##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended March 31, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to .
 
 Commission File Number 000-26934
 Hyperion Solutions Corporation
  Delaware
    
    77-0277772(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 5450 Great America Parkway, Santa Clara, California 95054
 (408) 744-9500
 þ o
  þ o o
 o þ




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##### 



Hyperion Solutions Corporation
 Form 10-Q
 PAGEPART I. FINANCIAL INFORMATIONItem 1        Financial Statements (Unaudited):Condensed Consolidated Balance Sheets as of March 31, 2006 and June 30, 2005
    
    
    3Condensed Consolidated Statements of Income and Comprehensive Income for the three and nine months ended March 31, 2006 and 2005
    
    
    4Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2006 and 2005
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2        Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21Item 3        Quantitative and Qualitative Disclosures About Market Risk
    
    
    30Item 4        Controls and Procedures
    
    
    31PART II. OTHER INFORMATIONItem 1        Legal Proceedings
    
    
    31Item 1A     Risk Factors
    
    
    32Item 2        Unregistered Sales of Existing Securities and Use of Proceeds
    
    
    39Item 3        Defaults
    
    
    40Item 4        Submission of Matters to a Vote of Security Holders
    
    
    40Item 5        Other Information
    
    
    40Item 6        Exhibits
    
    
    40Signatures
    
    
    41Exhibit Index
    
    
    42EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
   2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 HYPERION SOLUTIONS CORPORATION
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
   March 31,
    
    
    June 30,2006
    
    
    2005 (*)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    151,669
    
    
    $
    170,740Short-term investments
    
    
    294,155
    
    
    
    270,008Accounts receivable, net of allowances of $9,010 and $10,053
    
    
    164,706
    
    
    
    141,045Deferred  tax assets
    
    
    10,965
    
    
    
    10,976Assets held for sale
    
    
    29,274
    
    
    
    Prepaid expenses and other current assets
    
    
    28,475
    
    
    
    28,157TOTAL CURRENT ASSETS
    
    
    679,244
    
    
    
    620,926Property and equipment, net
    
    
    46,505
    
    
    
    74,911Goodwill
    
    
    138,083
    
    
    
    137,898Other intangible assets, net
    
    
    22,405
    
    
    
    29,811Deferred tax assets
    
    
    37,526
    
    
    
    30,287Other assets
    
    
    6,368
    
    
    
    5,603TOTAL ASSETS
    
    $
    930,131
    
    
    $
    899,436LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    66,501
    
    
    $
    56,657Accrued employee compensation and benefits
    
    
    50,542
    
    
    
    53,298Income taxes payable
    
    
    42,688
    
    
    
    32,703Deferred revenue
    
    
    158,038
    
    
    
    140,772Restructuring liabilities
    
    
    6,674
    
    
    
    7,276TOTAL CURRENT LIABILITIES
    
    
    324,443
    
    
    
    290,706Long-term restructuring liabilities and other
    
    
    19,813
    
    
    
    24,830TOTAL LIABILITIES
    
    
    344,256
    
    
    
    315,536Commitments and contingencies (Note 4)Stockholders equity:Preferred stock  $0.001 par value; 5,000 shares
authorized; none issued
    
    
    
    
    
    
    Common stock  $0.001 par value; 300,000 shares authorized;
58,983 and 60,153 shares issued and outstanding
    
    
    59
    
    
    
    60Additional paid-in capital
    
    
    524,892
    
    
    
    489,137Deferred stock-based compensation
    
    
    
    
    
    
    (4,393
    )Retained earnings
    
    
    64,066
    
    
    
    100,491Accumulated other comprehensive loss
    
    
    (3,142
    )
    
    
    (1,395
    )TOTAL STOCKHOLDERS EQUITY
    
    
    585,875
    
    
    
    583,900TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    930,131
    
    
    $
    899,436
  
 (*)The condensed consolidated balance sheet at June 30, 2005 has been derived from the audited
financial statements at that date but does not include all of the information and footnotes
required by accounting principles generally accepted in the United States of America for complete
financial statements. This condensed consolidated balance sheet should be read in conjunction with
the annual report on Form 10-K for the fiscal year ended June 30, 2005. 3




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HYPERION SOLUTIONS CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
   Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2006
    
    
    2005
    
    
    2006
    
    
    2005REVENUESSoftware licenses
    
    $
    64,351
    
    
    $
    68,659
    
    
    $
    199,320
    
    
    $
    194,607Maintenance and services
    
    
    121,292
    
    
    
    108,448
    
    
    
    342,042
    
    
    
    319,016TOTAL REVENUES
    
    
    185,643
    
    
    
    177,107
    
    
    
    541,362
    
    
    
    513,623COSTS AND EXPENSESCost of revenues:Software licenses
    
    
    4,483
    
    
    
    4,141
    
    
    
    12,948
    
    
    
    11,496Maintenance and services
    
    
    43,215
    
    
    
    40,492
    
    
    
    124,014
    
    
    
    117,710Sales and marketing
    
    
    69,767
    
    
    
    62,155
    
    
    
    206,222
    
    
    
    185,532Research and development
    
    
    28,334
    
    
    
    26,863
    
    
    
    84,575
    
    
    
    78,222General and administrative
    
    
    17,973
    
    
    
    18,408
    
    
    
    51,487
    
    
    
    48,803Restructuring charges (credits)
    
    
    198
    
    
    
    (1,842
    )
    
    
    544
    
    
    
    6,235TOTAL COSTS AND EXPENSES
    
    
    163,970
    
    
    
    150,217
    
    
    
    479,790
    
    
    
    447,998OPERATING INCOME
    
    
    21,673
    
    
    
    26,890
    
    
    
    61,572
    
    
    
    65,625Interest and other income, net
    
    
    4,133
    
    
    
    2,050
    
    
    
    9,518
    
    
    
    5,103INCOME BEFORE INCOME TAXES
    
    
    25,806
    
    
    
    28,940
    
    
    
    71,090
    
    
    
    70,728Income tax provision
    
    
    9,806
    
    
    
    10,129
    
    
    
    26,276
    
    
    
    24,754NET INCOME
    
    $
    16,000
    
    
    $
    18,811
    
    
    $
    44,814
    
    
    $
    45,974Other comprehensive income (loss)
    
    
    48
    
    
    
    (1,299
    )
    
    
    (1,747
    )
    
    
    995COMPREHENSIVE INCOME
    
    $
    16,048
    
    
    $
    17,512
    
    
    $
    43,067
    
    
    $
    46,969Basic net income per share
    
    $
    0.27
    
    
    $
    0.31
    
    
    $
    0.76
    
    
    $
    0.78Diluted net income per share
    
    $
    0.26
    
    
    $
    0.30
    
    
    $
    0.74
    
    
    $
    0.74Shares used in computing basic
net income per share
    
    
    59,143
    
    
    
    60,212
    
    
    
    59,183
    
    
    
    59,256Shares used in computing diluted
net income per share
    
    
    60,865
    
    
    
    62,802
    
    
    
    60,861
    
    
    
    61,761
  4




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HYPERION SOLUTIONS CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
   Nine Months EndedMarch 31,2006
    
    
    2005CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    44,814
    
    
    $
    45,974Adjustments to reconcile net income to net cash provided by operating
activities:(Gain) loss on sale of assets
    
    
    (990
    )
    
    
    66Depreciation and amortization
    
    
    24,836
    
    
    
    25,833Stock-based compensation
    
    
    21,943
    
    
    
    1,880Provision for accounts receivable allowances
    
    
    3,495
    
    
    
    4,288Deferred tax assets
    
    
    (6,265
    )
    
    
    2,040Income tax benefit from exercise of stock options
    
    
    
    
    
    
    17,320Changes in operating assets and liabilities, net of the effect of acquisitions:Accounts receivable
    
    
    (27,607
    )
    
    
    (11,331
    )Prepaid expenses and other current assets
    
    
    833
    
    
    
    1,566Other assets
    
    
    160
    
    
    
    917Accounts payable and accrued liabilities
    
    
    9,742
    
    
    
    646Accrued employee compensation and benefits
    
    
    (2,574
    )
    
    
    (4,684
    )Income taxes payable
    
    
    10,146
    
    
    
    (618
    )Deferred revenue
    
    
    17,815
    
    
    
    1,208Restructuring liabilities
    
    
    (571
    )
    
    
    4,948Long-term restructuring liabilities and other
    
    
    (5,119
    )
    
    
    (793
    )Net cash provided by operating activities
    
    
    90,658
    
    
    
    89,260CASH FLOWS FROM INVESTING ACTIVITIESPurchases of available-for-sale investments
    
    
    (255,938
    )
    
    
    (141,650
    )Proceeds from sales and maturities of investments
    
    
    229,929
    
    
    
    288,494Purchases of property and equipment
    
    
    (16,453
    )
    
    
    (20,840
    )Purchases of other intangible assets
    
    
    (2,172
    )
    
    
    (4,355
    )Payments for acquisitions, net of cash acquired
    
    
    (604
    )
    
    
    (8,225
    )Net cash provided by (used in) investing activities
    
    
    (45,238
    )
    
    
    113,424CASH FLOWS FROM FINANCING ACTIVITIESPurchases of common stock
    
    
    (109,410
    )
    
    
    (52,548
    )Proceeds from issuance of common stock
    
    
    37,776
    
    
    
    55,431Income tax benefit from exercise of stock options
    
    
    8,609
    
    
    
    Net cash provided by (used in) financing activities
    
    
    (63,025
    )
    
    
    2,883Effect of foreign exchange rate changes on cash and cash equivalents
    
    
    (1,466
    )
    
    
    1,323INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (19,071
    )
    
    
    206,890Cash and cash equivalents at beginning of period
    
    
    170,740
    
    
    
    172,261CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    151,669
    
    
    $
    379,151SUPPLEMENTAL CASH FLOW INFORMATION:Cash paid for interest
    
    $
    188
    
    
    $
    25Cash paid for income taxes
    
    $
    11,464
    
    
    $
    5,109
  5




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HYPERION SOLUTIONS CORPORATION
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 MARCH 31, 2006
 1. Basis of Presentation
  2. Significant Accounting Policies
 Stock Dividend
  Revenue Recognition
     6




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Accounts Receivable Allowances
   Net Income Per Share
  7




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Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2006
    
    
    2005
    
    
    2006
    
    
    2005Net income
    
    $
    16,000
    
    
    $
    18,811
    
    
    $
    44,814
    
    
    $
    45,974Shares used in computing basic net income
per share
    
    
    59,143
    
    
    
    60,212
    
    
    
    59,183
    
    
    
    59,256Effect of potentially dilutive securities
    
    
    1,722
    
    
    
    2,590
    
    
    
    1,678
    
    
    
    2,505Shares used in computing diluted net income
per share
    
    
    60,865
    
    
    
    62,802
    
    
    
    60,861
    
    
    
    61,761Basic net income per share
    
    $
    0.27
    
    
    $
    0.31
    
    
    $
    0.76
    
    
    $
    0.78Diluted net income per share
    
    $
    0.26
    
    
    $
    0.30
    
    
    $
    0.74
    
    
    $
    0.74
  Stock-Based Compensation
   8




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Three Months
    
    
    Nine MonthsEnded
    
    
    EndedMarch 31, 2005
    
    
    March 31, 2005Net income, as reported
    
    $
    18,811
    
    
    $
    45,974Add: stock-based compensation expense
included in reported net income, net of tax
    
    
    339
    
    
    
    1,221Deduct: stock-based compensation expense
determined under fair value method, net of tax
    
    
    (4,067
    )
    
    
    (12,370
    )Net income, pro forma
    
    $
    15,083
    
    
    $
    34,825Net income per share:Basic  as reported
    
    $
    0.31
    
    
    $
    0.78Basic  pro forma
    
    $
    0.25
    
    
    $
    0.59Diluted  as reported
    
    $
    0.30
    
    
    $
    0.74Diluted  pro forma
    
    $
    0.24
    
    
    $
    0.56
   9




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Three Months
    
    
    Nine MonthsEnded
    
    
    EndedMarch 31, 2006
    
    
    March 31, 2006Stock-based compensation expense by type of awardEmployee stock options
    
    $
    4,888
    
    
    $
    15,630Restricted stock and restricted stock units
    
    
    1,529
    
    
    
    3,533Employee stock purchase plan
    
    
    719
    
    
    
    2,792Total stock based compensation
    
    
    7,136
    
    
    
    21,955Tax effect on stock-based compensation
    
    
    (1,985
    )
    
    
    (6,764
    )Net effect on net income
    
    $
    5,151
    
    
    $
    15,191Tax effect onCash flow from operations
    
    $
    (1,848
    )
    
    $
    (8,609
    )Cash flow from financing activities
    
    $
    1,848
    
    
    $
    8,609Effect on earnings per share:Basic
    
    $
    0.09
    
    
    $
    0.26Diluted
    
    $
    0.08
    
    
    $
    0.25
   Three Months EndedMarch 31,2006
    
    2005Stock option plans:Expected dividend yield
    
    
    0
    %
    
    
    0
    %Expected stock price volatility
    
    
    44
    %
    
    
    41
    %Risk-free interest rate
    
    
    4.29
    %
    
    
    3.88
    %Average expected life (in years)
    
    
    4.1
    
    
    
    4.1Stock purchase plans:Expected dividend yield
    
    
    0
    %
    
    
    0
    %Expected stock price volatility
    
    
    26
    %
    
    
    43
    %Risk-free interest rate
    
    
    4.25
    %
    
    
    2.05
    %Average expected life (in years)
    
    
    0.5
    
    
    
    0.5
  10




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Comprehensive Income
  Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2006
    
    
    2005
    
    
    2006
    
    
    2005Net income
    
    $
    16,000
    
    
    $
    18,811
    
    
    $
    44,814
    
    
    $
    45,974Other comprehensive income:Foreign currency translation adjustments
    
    
    296
    
    
    
    (1,285
    )
    
    
    (898
    )
    
    
    929Unrealized gains (losses) on
available-for-sale securities, net of tax
    
    
    (248
    )
    
    
    (14
    )
    
    
    (849
    )
    
    
    66Comprehensive income
    
    $
    16,048
    
    
    $
    17,512
    
    
    $
    43,067
    
    
    $
    46,969
 Recent Accounting Pronouncements
     11




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Income Taxes
     Valuation of Goodwill, Intangibles, and Long-Lived Assets
  12




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Balance at June 30, 2005
    
    $
    137,898Goodwill from acquisitions
    
    
    994Adjustment of income tax benefits received in connection with Brio acquisition
    
    
    (991
    )Effect of foreign currency translation
    
    
    182Balance at March 31, 2006
    
    $
    138,083
     March 31, 2006
    
    
    June 30, 2005Gross
    
    
    
    
    
    
    
    
    
    
    GrossCarrying
    
    
    Accumulated
    
    
    Book
    
    
    Carrying
    
    
    Accumulated
    
    
    BookAmount
    
    
    Amortization
    
    
    Value
    
    
    Amount
    
    
    Amortization
    
    
    ValueProduct development costs
    
    $
    14,051
    
    
    $
    (7,745
    )
    
    $
    6,306
    
    
    $
    12,471
    
    
    $
    (6,013
    )
    
    $
    6,458Acquired technologies
    
    
    31,190
    
    
    
    (19,652
    )
    
    
    11,538
    
    
    
    31,340
    
    
    
    (14,348
    )
    
    
    16,992Other intangibles
    
    
    10,587
    
    
    
    (6,026
    )
    
    
    4,561
    
    
    
    10,616
    
    
    
    (4,255
    )
    
    
    6,361$
    55,828
    
    
    $
    (33,423
    )
    
    $
    22,405
    
    
    $
    54,427
    
    
    $
    (24,616
    )
    
    $
    29,811
 13




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EstimatedAmortizationFiscal Year
    
    ExpenseRemainder of 2006
    
    $
    3,1232007
    
    
    12,0022008
    
    
    5,6252009
    
    
    1,4612010
    
    
    194$
    22,405
 3. Related Party Transactions
  4. Commitments and Contingencies
 Guarantees and Indemnifications
  Contingencies
   14




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5. Business Combinations
   6. Restructuring Liabilities
     15




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Severance
    
    
    Facilities
    
    
    Other
    
    
    TotalAccrual balance at June 30, 2005
    
    $
    95
    
    
    $
    9,239
    
    
    $
    1,750
    
    
    $
    11,084Restructuring credits
    
    
    (51
    )
    
    
    
    
    
    
    
    
    
    
    (51
    )Non-cash items
    
    
    
    
    
    
    
    
    
    
    (1,532
    )
    
    
    (1,532
    )Cash payments
    
    
    
    
    
    
    (460
    )
    
    
    
    
    
    
    (460
    )Accrual balance at September 30, 2005
    
    
    44
    
    
    
    8,779
    
    
    
    218
    
    
    
    9,041Restructuring charges
    
    
    444
    
    
    
    
    
    
    
    
    
    
    
    444Non-cash items
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    (1
    )Cash payments
    
    
    
    
    
    
    (467
    )
    
    
    
    
    
    
    (467
    )Accrual balance at December 31, 2005
    
    
    487
    
    
    
    8,312
    
    
    
    218
    
    
    
    9,017Restructuring charges
    
    
    198
    
    
    
    
    
    
    
    
    
    
    
    198Non-cash items
    
    
    
    
    
    
    
    
    
    
    (87
    )
    
    
    (87
    )Cash payments
    
    
    (233
    )
    
    
    (570
    )
    
    
    
    
    
    
    (803
    )Accrual balance at March 31, 2006
    
    $
    452
    
    
    $
    7,742
    
    
    $
    131
    
    
    $
    8,325
  Severance
    
    
    Facilities
    
    
    TotalBalance at June 30, 2005
    
    $
    361
    
    
    $
    15,348
    
    
    $
    15,709Restructuring credits
    
    
    (49
    )
    
    
    
    
    
    
    (49
    )Cash payments
    
    
    
    
    
    
    (1,117
    )
    
    
    (1,117
    )Balance at September 30, 2005
    
    
    312
    
    
    
    14,231
    
    
    
    14,543Restructuring charges
    
    
    
    
    
    
    2
    
    
    
    2Non-cash items
    
    
    4
    
    
    
    (16
    )
    
    
    (12
    )Cash payments
    
    
    
    
    
    
    (751
    )
    
    
    (751
    )Balance at December 31, 2005
    
    
    316
    
    
    
    13,466
    
    
    
    13,782Non-cash items
    
    
    176
    
    
    
    
    
    
    
    176Cash payments
    
    
    
    
    
    
    (737
    )
    
    
    (737
    )Balance at March 31, 2006
    
    $
    492
    
    
    $
    12,729
    
    
    $
    13,221
  16




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7. Stock Option, Restricted Stock, Restricted Stock Units, and Employee Stock Purchase Plans
 Stock Options
    WeightedAverageWeighted
    
    
    Remaining
    
    
    AggregateAverage
    
    
    Contractual
    
    
    IntrinsicExercise
    
    
    Term
    
    
    ValueShares
    
    
    Price
    
    
    (Years)
    
    
    ($000s)Outstanding at July 1, 2005
    
    
    9,409
    
    
    $
    21.98Granted
    
    
    558
    
    
    
    28.83Exercised
    
    
    (516
    )
    
    
    16.77Forfeited
    
    
    (168
    )
    
    
    25.23Outstanding at September 30, 2005
    
    
    9,283
    
    
    
    22.62
    
    
    
    4.78
    
    
    $
    91,126Granted
    
    
    411
    
    
    
    33.38Exercised
    
    
    (973
    )
    
    
    17.09Forfeited
    
    
    (115
    )
    
    
    26.29Outstanding at December 31, 2005
    
    
    8,606
    
    
    
    23.71
    
    
    
    4.58
    
    
    $
    105,150Granted
    
    
    266
    
    
    
    34.81Exercised
    
    
    (403
    )
    
    
    18.26Forfeited
    
    
    (316
    )
    
    
    25.80Outstanding at March 31, 2006
    
    
    8,153
    
    
    $
    24.28
    
    
    
    4.39
    
    
    $
    70,265Exercisable at March 31, 2006
    
    
    3,844
    
    
    $
    20.73
    
    
    
    4.09
    
    
    $
    46,800
   17




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##### Table of Contents



Restricted Stock
   WeightedAverageGrant-DateShares
    
    
    Fair ValueNonvested shares at July 1, 2005
    
    
    229
    
    
    $
    22.47Granted
    
    
    131
    
    
    
    28.66Vested
    
    
    (74
    )
    
    
    18.75Nonvested shares at September 30, 2005
    
    
    286
    
    
    
    26.26Granted
    
    
    15
    
    
    
    31.94Vested
    
    
    (2
    )
    
    
    27.65Nonvested shares at December 31, 2005
    
    
    299
    
    
    
    26.53Granted
    
    
    56
    
    
    
    33.95Vested
    
    
    (9
    )
    
    
    30.07Cancelled
    
    
    (30
    )
    
    
    26.73Nonvested shares at March 31, 2006
    
    
    316
    
    
    $
    27.78
  Restricted Stock Units
   WeightedAverageGrant-DateShares
    
    Fair ValueOutstanding at January 1, 2006
    
    
    Granted
    
    
    75
    
    
    $
    35.73Cancelled
    
    
    (2
    )
    
    
    36.00Outstanding at March 31, 2006
    
    
    73
    
    
    $
    35.72Exercisable at March 31, 2006
    
    
    
    
    
    $
    
  18




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##### Table of Contents



Employee Stock Purchase Plan
  8. Stock Repurchases
   9. Segment and Geographic Information
   Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenues:Americas
    
    $
    113,857
    
    
    $
    105,816
    
    
    $
    333,259
    
    
    $
    309,553EMEA
    
    
    58,436
    
    
    
    59,114
    
    
    
    167,224
    
    
    
    169,352APAC
    
    
    13,350
    
    
    
    12,177
    
    
    
    40,879
    
    
    
    34,718$
    185,643
    
    
    $
    177,107
    
    
    $
    541,362
    
    
    $
    513,623
 19




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##### Table of Contents



March 31,
    
    
    June 30,2006
    
    
    2005Long-lived assets:Americas
    
    $
    41,028
    
    
    $
    68,041EMEA
    
    
    3,990
    
    
    
    5,046APAC
    
    
    1,487
    
    
    
    1,824$
    46,505
    
    
    $
    74,911
   Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2006
    
    
    2005
    
    
    2006
    
    
    2005Software licenses
    
    $
    64,351
    
    
    $
    68,659
    
    
    $
    199,320
    
    
    $
    194,607Maintenance and services:Maintenance
    
    
    83,499
    
    
    
    75,232
    
    
    
    242,835
    
    
    
    221,845Consulting and training
    
    
    37,793
    
    
    
    33,216
    
    
    
    99,207
    
    
    
    97,171121,292
    
    
    
    108,448
    
    
    
    342,042
    
    
    
    319,016Total revenues
    
    $
    185,643
    
    
    $
    177,107
    
    
    $
    541,362
    
    
    $
    513,623
 20




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 FORWARD-LOOKING STATEMENTS
  OVERVIEW
  RESULTS OF OPERATIONS
 REVENUES
 Three Months Ended March 31,
    
    
    Nine Months Ended March 31,Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent ofTotal
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    Total(In thousands)
    
    2006
    
    
    Revenue
    
    
    2005
    
    
    Revenue
    
    
    2006
    
    
    Revenue
    
    
    2005
    
    
    RevenueSoftware licenses
    
    $
    64,351
    
    
    
    35
    %
    
    $
    68,659
    
    
    
    39
    %
    
    $
    199,320
    
    
    
    37
    %
    
    $
    194,607
    
    
    
    38
    %Maintenance and
services:Maintenance
    
    
    83,499
    
    
    
    45
    %
    
    
    75,232
    
    
    
    42
    %
    
    
    242,835
    
    
    
    45
    %
    
    
    221,845
    
    
    
    43
    %Consulting and
training
    
    
    37,793
    
    
    
    20
    %
    
    
    33,216
    
    
    
    19
    %
    
    
    99,207
    
    
    
    18
    %
    
    
    97,171
    
    
    
    19
    %121,292
    
    
    
    65
    %
    
    
    108,448
    
    
    
    61
    %
    
    
    342,042
    
    
    
    63
    %
    
    
    319,016
    
    
    
    62
    %Total revenues
    
    $
    185,643
    
    
    
    100
    %
    
    $
    177,107
    
    
    
    100
    %
    
    $
    541,362
    
    
    
    100
    %
    
    $
    513,623
    
    
    
    100
    %
  21




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##### Table of Contents



Software licenses.
  Maintenance and services.
 COST OF REVENUES
 Three Months Ended March 31,
    
    
    Nine Months Ended March 31,Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent ofRelated
    
    
    
    
    
    
    Related
    
    
    
    
    
    
    Related
    
    
    
    
    
    
    Related(In thousands)
    
    2006
    
    
    Revenue
    
    
    2005
    
    
    Revenue
    
    
    2006
    
    
    Revenue
    
    
    2005
    
    
    RevenueCost of revenues:Software licenses
    
    $
    4,483
    
    
    
    7
    %
    
    $
    4,141
    
    
    
    6
    %
    
    $
    12,948
    
    
    
    6
    %
    
    $
    11,496
    
    
    
    6
    %Maintenance
and services
    
    
    43,215
    
    
    
    36
    %
    
    
    40,492
    
    
    
    37
    %
    
    
    124,014
    
    
    
    36
    %
    
    
    117,710
    
    
    
    37
    %
 Three Months Ended March 31,
    
    
    Nine Months Ended March 31,Variance
    
    
    Variance
    
    
    
    
    
    
    
    
    
    
    Variance
    
    
    Variancein
    
    
    in
    
    
    
    
    
    
    
    
    
    
    in
    
    
    in(In thousands)
    
    2006
    
    
    2005
    
    
    Dollars
    
    
    Percent
    
    
    2006
    
    
    2005
    
    
    Dollars
    
    
    PercentCost of revenues:Software licenses
    
    $
    4,483
    
    
    $
    4,141
    
    
    $
    342
    
    
    
    8
    %
    
    $
    12,948
    
    
    $
    11,496
    
    
    $
    1,452
    
    
    
    13
    %Maintenance and
services
    
    
    43,215
    
    
    
    40,492
    
    
    
    2,723
    
    
    
    7
    %
    
    
    124,014
    
    
    
    117,710
    
    
    
    6,304
    
    
    
    5
    %
 Cost of software license revenue.
 22




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##### Table of Contents



Cost of maintenance and services revenue. 123(R).
  OPERATING EXPENSES
 Three Months Ended March 31,
    
    
    Nine Months Ended March 31,Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent ofTotal
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    Total(In thousands)
    
    2006
    
    
    Revenue
    
    
    2005
    
    
    Revenue
    
    
    2006
    
    
    Revenue
    
    
    2005
    
    
    RevenueSales and marketing
    
    $
    69,767
    
    
    
    38
    %
    
    $
    62,155
    
    
    
    35
    %
    
    $
    206,222
    
    
    
    38
    %
    
    $
    185,532
    
    
    
    36
    %Research and development
    
    
    28,334
    
    
    
    15
    %
    
    
    26,863
    
    
    
    15
    %
    
    
    84,575
    
    
    
    16
    %
    
    
    78,222
    
    
    
    15
    %General and administrative
    
    
    17,973
    
    
    
    10
    %
    
    
    18,408
    
    
    
    10
    %
    
    
    51,487
    
    
    
    10
    %
    
    
    48,803
    
    
    
    10
    %Restructuring charges
(credits)
    
    
    198
    
    
    
    0
    %
    
    
    (1,842
    )
    
    
    (1
    %)
    
    
    544
    
    
    
    0
    %
    
    
    6,235
    
    
    
    1
    %Total
    
    $
    116,272
    
    
    
    
    
    
    $
    105,584
    
    
    
    
    
    
    $
    342,828
    
    
    
    
    
    
    $
    318,792
 Three Months Ended March 31,
    
    
    Nine Months Ended March 31,Variance
    
    
    Variance
    
    
    
    
    
    
    
    
    
    
    Variance
    
    
    Variancein
    
    
    in
    
    
    
    
    
    
    
    
    
    
    in
    
    
    in(In thousands)
    
    2006
    
    
    2005
    
    
    Dollars
    
    
    Percent
    
    
    2006
    
    
    2005
    
    
    Dollars
    
    
    PercentSales and marketing
    
    $
    69,767
    
    
    $
    62,155
    
    
    $
    7,612
    
    
    
    12
    %
    
    $
    206,222
    
    
    $
    185,532
    
    
    $
    20,690
    
    
    
    11
    %Research and development
    
    
    28,334
    
    
    
    26,863
    
    
    
    1,471
    
    
    
    5
    %
    
    
    84,575
    
    
    
    78,222
    
    
    
    6,353
    
    
    
    8
    %General and administrative
    
    
    17,973
    
    
    
    18,408
    
    
    
    (435
    )
    
    
    (2
    %)
    
    
    51,487
    
    
    
    48,803
    
    
    
    2,684
    
    
    
    5
    %Restructuring charges
(credits)
    
    
    198
    
    
    
    (1,842
    )
    
    
    2,040
    
    
    
    111
    %
    
    
    544
    
    
    
    6,235
    
    
    
    (5,691
    )
    
    
    (91
    %)Total
    
    $
    116,272
    
    
    $
    105,584
    
    
    $
    10,688
    
    
    
    10
    %
    
    $
    342,828
    
    
    $
    318,792
    
    
    $
    24,036
    
    
    
    8
    %
 Sales and marketing.
 23




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##### Table of Contents



Research and development.
   General and administrative.
  24




---



##### Table of Contents



Restructuring charges (credits)
      25




---



##### Table of Contents



Severance
    
    
    Facilities
    
    
    Other
    
    
    TotalAccrual balance at June 30, 2005
    
    $
    95
    
    
    $
    9,239
    
    
    $
    1,750
    
    
    $
    11,084Restructuring credits
    
    
    (51
    )
    
    
    
    
    
    
    
    
    
    
    (51
    )Non-cash items
    
    
    
    
    
    
    
    
    
    
    (1,532
    )
    
    
    (1,532
    )Cash payments
    
    
    
    
    
    
    (460
    )
    
    
    
    
    
    
    (460
    )Accrual balance at September 30, 2005
    
    
    44
    
    
    
    8,779
    
    
    
    218
    
    
    
    9,041Restructuring charges
    
    
    444
    
    
    
    
    
    
    
    
    
    
    
    444Non-cash items
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    (1
    )Cash payments
    
    
    
    
    
    
    (467
    )
    
    
    
    
    
    
    (467
    )Accrual balance at December 31, 2005
    
    
    487
    
    
    
    8,312
    
    
    
    218
    
    
    
    9,017Restructuring charges
    
    
    198
    
    
    
    
    
    
    
    
    
    
    
    198Non-cash items
    
    
    
    
    
    
    
    
    
    
    (87
    )
    
    
    (87
    )Cash payments
    
    
    (233
    )
    
    
    (570
    )
    
    
    
    
    
    
    (803
    )Accrual balance at March 31, 2006
    
    $
    452
    
    
    $
    7,742
    
    
    $
    131
    
    
    $
    8,325
  Severance
    
    
    Facilities
    
    
    TotalBalance at June 30, 2005
    
    $
    361
    
    
    $
    15,348
    
    
    $
    15,709Restructuring credits
    
    
    (49
    )
    
    
    
    
    
    
    (49
    )Cash payments
    
    
    
    
    
    
    (1,117
    )
    
    
    (1,117
    )Balance at September 30, 2005
    
    
    312
    
    
    
    14,231
    
    
    
    14,543Restructuring charges
    
    
    
    
    
    
    2
    
    
    
    2Non-cash items
    
    
    4
    
    
    
    (16
    )
    
    
    (12
    )Cash payments
    
    
    
    
    
    
    (751
    )
    
    
    (751
    )Balance at December 31, 2005
    
    
    316
    
    
    
    13,466
    
    
    
    13,782Non-cash items
    
    
    176
    
    
    
    
    
    
    
    176Cash payments
    
    
    
    
    
    
    (737
    )
    
    
    (737
    )Balance at March 31, 2006
    
    $
    492
    
    
    $
    12,729
    
    
    $
    13,221
  INTEREST AND OTHER INCOME, NET
  INCOME TAX PROVISION
 SFAS
123(R)
 26




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##### Table of Contents



NET INCOME
  LIQUIDITY AND CAPITAL RESOURCES
 March 31,
    
    
    March 31,(In thousands)
    
    2006
    
    
    2005Cash and cash equivalents
    
    $
    151,669
    
    
    $
    379,151Short-term investments
    
    
    294,155
    
    
    
    47,575Working capital
    
    
    354,801
    
    
    
    332,416
 Nine Months EndedMarch 31,(In thousands)
    
    2006
    
    
    2005Net cash provided by operating activities
    
    $
    90,658
    
    
    $
    89,260Net cash provided by (used in) investing activities
    
    
    (45,238
    )
    
    
    113,424Net cash provided by (used in) financing activities
    
    
    (63,025
    )
    
    
    2,883
     27




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##### Table of Contents



Payments Due InTotal
    
    
    
    
    
    
    
    
    
    
    Fiscal
    
    
    Fiscal 2011Payments
    
    
    Rest of
    
    
    Fiscal 2007
    
    
    2009 and
    
    
    andDue
    
    
    Fiscal 2006
    
    
    and 2008
    
    
    2010
    
    
    ThereafterCapital lease obligations
    
    $
    1,547
    
    
    $
    273
    
    
    $
    1,274
    
    
    $
    
    
    
    $
    Operating lease obligations
    
    
    110,619
    
    
    
    6,420
    
    
    
    60,676
    
    
    
    17,929
    
    
    
    25,594Future sublease income
    
    
    (13,360
    )
    
    
    (1,240
    )
    
    
    (9,771
    )
    
    
    (2,349
    )
    
    
    Purchase obligations
    
    
    824
    
    
    
    69
    
    
    
    755
    
    
    
    
    
    
    
    $
    99,630
    
    
    $
    5,522
    
    
    $
    52,934
    
    
    $
    15,580
    
    
    $
    25,594
 OFF-BALANCE SHEET ARRANGEMENTS
  CRITICAL ACCOUNTING ESTIMATES
  28




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##### Table of Contents



Stock-Based Compensation
   Three Months
    
    
    
    
    
    
    Nine MonthsEnded
    
    
    Percent of
    
    
    Ended
    
    
    Percent ofMarch 31,
    
    
    Total
    
    
    March 31,
    
    
    Total(In thousands)
    
    2006
    
    
    Expense
    
    
    2006
    
    
    ExpenseCost of revenues:Software licenses
    
    $
    7
    
    
    
    
    
    
    $
    20
    
    
    
    Maintenance and services
    
    
    677
    
    
    
    9
    %
    
    
    2,264
    
    
    
    10
    %Sales and marketing
    
    
    3,108
    
    
    
    44
    %
    
    
    9,572
    
    
    
    44
    %Research and development
    
    
    1,470
    
    
    
    21
    %
    
    
    4,791
    
    
    
    22
    %General and administrative
    
    
    1,874
    
    
    
    26
    %
    
    
    5,308
    
    
    
    24
    %Total stock-based compensation
    
    $
    7,136
    
    
    
    100
    %
    
    $
    21,955
    
    
    
    100
    %
 RECENT ACCOUNTING PRONOUNCEMENTS
    29




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 FOREIGN CURRENCY EXCHANGE RATE RISK
   INTEREST RATE RISK
 30




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
 EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.
 CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING.
 
 PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
   31




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##### Table of Contents



ITEM 1A. RISK FACTORS
 FACTORS THAT MAY AFFECT FUTURE RESULTS
  Product enhancement and new product introductions involve inherent risks.
  
    
    Product quality, including the possibility of software defects;
    
    Delays in releasing new products;
    
    Customers delaying purchase decisions in anticipation of new products to be released;
    
    Customer confusion and extended evaluation and negotiation time;
    
    The fit of the new products and features with the customers needs;
    
    The successful adaptation of third-party technology into Hyperions products;
    
    Educating Hyperions sales, marketing, and consulting personnel to work with the new
products and features;
    
    Competition from earlier and more established entrants;
    
    Market acceptance of initial product releases;
    
    Technological challenges involved in integrating Hyperion products into cohesive
business performance management systems offerings;
    
    Marketing effectiveness, including challenges in distribution; and
    
    The accuracy of assumptions about the nature of customer demand.
  Fluctuations in our quarterly operating results may not be predictable and may result in
significant volatility in our stock price.
  32




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##### Table of Contents



Hyperion operates in a very competitive environment.
    If Hyperion is unable to develop or acquire new and enhanced products that achieve widespread
market acceptance, we may be unable to recoup product development costs and our earnings and
revenue may decline.
  Failure to support older products will adversely affect sales.
  Hyperion typically has back-ended quarters which may cause its actual revenues in a quarter to vary
from sales forecasts.
  33




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##### Table of Contents



A change in pricing or marketing could adversely affect Hyperions business.
  Employee turnover could adversely impact revenue, costs, and productivity.
   Exchange rate fluctuations may adversely affect results.
  Hyperion may not be able to continue its operational improvements.
  34




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##### Table of Contents



Reorganizations may adversely affect productivity.
  We are required to evaluate our internal control over financial reporting under Section 404 of the
Sarbanes Oxley Act of 2002 and are exposed to future risks of non-compliance
    Hyperions international operations are subject to significant risks.
  
    
    Fluctuations in currency exchange rates and economic instability such as higher interest
rates and inflation, which could reduce Hyperions customers ability to obtain financing
for software products or which could make Hyperions products more expensive in those
countries;
    
    Difficulties in hedging foreign currency transaction exposures;
    
    Potential loss of proprietary information due to piracy, misappropriation, or weaker
laws regarding intellectual property protection;
    
    Imposition of foreign laws and other governmental controls, including trade and employment restrictions;
    
    Longer payment cycles for sales in foreign countries and difficulties in collecting accounts receivable;
    
    Difficulties in staffing and managing our international operations, including increased
turnover as economic opportunities increase in countries such as India and difficulties
related to administering Hyperions stock option plan in some foreign countries;
    
    Difficulties in coordinating the activities of Hyperions geographically dispersed and
culturally diverse operations;
    
    Competition from local suppliers;
    
    Costs and delays associated with developing software in multiple languages; and
    
    Political unrest, war, or terrorism, particularly in areas in which Hyperion has facilities.
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Hyperion faces significant challenges and risks associated with compliance.
  There are significant risks related to any business combination and investment.
  
    
    The possibility that Hyperion pays more than the value it derives from the acquisition;
    
    The difficulty of integrating the products, operations, and personnel of the acquired businesses;
    
    The possibility that all aspects of the integration are not completed or that all of the
anticipated synergies of the acquisition are not realized;
    
    Difficulties in managing software development activities to define a combined product
roadmap, ensuring timely development of new products, timely release of new products to
market, and the development of efficient integration and migration processes and tools;
    
    The difficulty of retaining key alliances on attractive terms with partners and suppliers;
    
    The difficulty in retaining customers and protecting maintenance revenues;
    
    The difficulty of retaining and recruiting key personnel and maintaining employee morale;
    
    The potential product liability associated with selling the acquired companys products;
    
    The potential that we do not detect a significant liability of the acquired business
during the pre-acquisition due diligence process;
    
    The possibility that businesses in which Hyperion invests ultimately fail, rendering our
investment worthless;
    
    The potential disruption of Hyperions ongoing business and the distraction of
management from Hyperions business; and
    
    The potential write-down of impaired goodwill, intangible assets, fixed assets, and
other assets. In particular, Hyperion has recorded approximately $120.2 million of goodwill
related to the acquisition of Brio that will not be amortized in the ordinary course of
business. To the extent that the business acquired in that transaction (primarily the
Performance Suite products) does not remain competitive, some or all of the goodwill
related to that acquisition could be charged against future earnings.
  Hyperion is subject to the possibility of infringement claims.
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Enforcement of Hyperions intellectual property rights may be difficult.
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Hyperions stock price is volatile.
  Hyperion is dependent upon indirect channel partners.
  
    
    Hyperions lack of control over the delivery of its products to end-users;
    
    Hyperions resellers and distributors may terminate their relationship with Hyperion on short notice; and
    
    Hyperions resellers and distributors may market and distribute competing products.
  Hyperion is exposed to product liability claims.
  Defects in Hyperions products could increase its costs, adversely affect its reputation, diminish
demand for its products, and hurt its operating results.
  Some provisions in Hyperions charter documents and its stockholder rights plan may prevent or
deter an acquisition of Hyperion.
  
    
    Hyperions Board of Directors is authorized to issue preferred stock with any rights it
may determine. Consequently, without shareholder approval, Hyperions Board of Directors
may issue preferred stock that has rights superior to the outstanding Hyperion common
stock;
    
    Hyperions Board of Directors is classified into three groups, with each group of
directors holding office for three years. The effect of this classified board is that two
annual meetings, not one, are required to replace a majority of the Board of Directors;
    
    Hyperion stockholders are not entitled to cumulate votes for directors; and
    
    Special meetings of Hyperion stockholders may not be called by Hyperions stockholders.
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The accounting treatment for employee stock options has changed and has impacted Hyperions
earnings for the third quarter and first nine months of fiscal 2006.
  We are incurring substantial costs and devoting more management resources to comply with increasing
regulation of corporate governance and disclosure.
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  Total Number of
    
    ApproximateTotal Number
    
    
    
    
    
    Shares Purchased as
    
    Dollar Value ofof Shares
    
    Average Price
    
    Part of Publicly
    
    Shares that MayPurchased
    
    Paid per
    
    Announced Plans
    
    Yet Be PurchasedPeriod
    
    [1]
    
    Share
    
    [2]
    Under the Plans(In thousands, except per share data)January 1, 2006  January 31, 2006
    
    
    150
    
    
    $
    35.60
    
    
    
    150
    
    
    $
    24,443February 1, 2006  February 28, 2006
    
    
    309
    
    
    $
    33.63
    
    
    
    309
    
    
    
    14,061March 1, 2006  March 31, 2006
    
    
    411
    
    
    $
    33.11
    
    
    
    411
    
    
    
    453
 
 [1]
    
    All stock repurchases during the three months ended March 31,
2006, were made in open-market transactions as part of our
publicly announced plans.[2]
    
    On May 20, 2004, we announced that our Board of Directors
had authorized a plan to repurchase up to $75.0 million of our
common stock. No authorized funds remain under this repurchase
program.   39




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ITEM 3. DEFAULTS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
   
 ITEM 6. EXHIBITS
 Exhibit No.
    
    Description10.1
    
    Employment Letter Agreement, dated January 11, 2006, between the
Company and Robin Washington (filed as Exhibit 10.1 to the Companys
Current Report on Form 8-K filed on January 11, 2006 and incorporated
herein by reference).10.2
    
    Offer letter between Hyperion and Robin Washington (filed as Exhibit
10.2 to the Companys Current Report on Form 8-K filed on January 11,
2006 and incorporated herein by reference).10.3
    
    Form of Restricted Stock Unit Agreement Under the 2004 Equity Incentive
Plan (filed as Exhibit 10.1 to the Companys Current Report on Form 8-K
filed on March 27, 2006 and incorporated by reference).10.4
    
    Form of International Restricted Stock Unit Agreement Under the 2004
Equity Incentive Plan (filed as Exhibit 10.2 to the Companys Current
Report on Form 8-K filed on March 27, 2006 and incorporated by
reference).10.5
    
    Form of International Notice of Grant of Stock Options Under the 2004
Equity Incentive Plan (filed as Exhibit 10.3 to the Companys Current
Report on Form 8-K filed on March 27, 2006 and incorporated by
reference).31.1
    
    Certification of Godfrey R. Sullivan pursuant to Rule 13a-14(a).31.2
    
    Certification of Robin L. Washington pursuant to Rule 13a-14(a).32.1
    
    Certification of Godfrey R. Sullivan pursuant to 18 U.S.C. Section 1350.32.2
    
    Certification of Robin L. Washington pursuant to 18 U.S.C. Section 1350.
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SIGNATURES
  Date:  May 10, 2006
    Hyperion Solutions Corporation
(Registrant)By:
    /s/ ROBIN L. WASHINGTONRobin L. WashingtonChief Financial Officer and
Principal Accounting Officer 41




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EXHIBIT INDEX
 Exhibit No.
    
    Description10.1
    
    Employment Letter Agreement, dated January 11, 2006, between the
Company and Robin Washington (filed as Exhibit 10.1 to the Companys
Current Report on Form 8-K filed on January 11, 2006 and incorporated
herein by reference).10.2
    
    Offer letter between Hyperion and Robin Washington (filed as Exhibit
10.2 to the Companys Current Report on Form 8-K filed on January 11,
2006 and incorporated herein by reference).10.3
    
    Form of Restricted Stock Unit Agreement Under the 2004 Equity Incentive
Plan (filed as Exhibit 10.1 to the Companys Current Report on Form 8-K
filed on March 27, 2006 and incorporated by reference).10.4
    
    Form of International Restricted Stock Unit Agreement Under the 2004
Equity Incentive Plan (filed as Exhibit 10.2 to the Companys Current
Report on Form 8-K filed on March 27, 2006 and incorporated by
reference).10.5
    
    Form of International Notice of Grant of Stock Options Under the 2004
Equity Incentive Plan (filed as Exhibit 10.3 to the Companys Current
Report on Form 8-K filed on March 27, 2006 and incorporated by
reference).31.1
    
    Certification of Godfrey R. Sullivan pursuant to Rule 13a-14(a).31.2
    
    Certification of Robin L. Washington pursuant to Rule 13a-14(a).32.1
    
    Certification of Godfrey R. Sullivan pursuant to 18 U.S.C. Section 1350.32.2
    
    Certification of Robin L. Washington pursuant to 18 U.S.C. Section 1350.
 42