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Provision (Benefit) for Income TaxesDuring our 2005 fiscal year we recorded a provision for income taxes of $4.0 million comparedwith a benefit of $6.2 million in our 2004 fiscal year. This was primarily a result of the recording of anincome tax benefit of $12.3 million relating to non cash equity compensation in our 2004 fiscal year. Inaddition, income tax expense increased by $2.1 million as a result of the increase in income beforeincome taxes, the inclusion of an exchange gain of $1.2 million in our 2004 fiscal year and by$1.8 million because the development arrangement benefit in our 2004 fiscal year was not taxable.These effects were partially offset by a benefit of $3.3 million arising from an increase in incomerelated to our Malaysian operation which is substantially exempt from income taxes, an adjustment toprior year reserves of $2.6 million and a $0.9 million benefit resulting from the legal reorganization ofour group structure—see ‘‘Item 4C—Organization Structure’’. The increase in income of our Malaysianoperation results from the increased level of Storage Infrastructure revenue. The adjustment to prioryear reserves results primarily from the agreement of certain prior year U.K. tax filings.Net Income (Loss) from Continuing OperationsThe recording of net income for our 2005 fiscal year compared to a net loss from continuingoperations for our 2004 fiscal year resulted primarily from non cash equity compensation expense.Factors set out above, including, in particular, the increase in our revenues also contributed to the netincome. The effects of these were offset by factors set out above, including, in particular, the decreasein gross margins and increases in operating expenses.49