Salesforce and Salesforce.org Combine to Drive Greater Philanthropic Impact and Success for Social Good Organizations



SAN FRANCISCO, April 15, 2019 / PRNewswire / – Salesforce (NYSE: CRM), the global leader in CRM, today announced that Salesforce.org, the independent non-profit social enterprise, will be integrated into Salesforce. With Salesforce.org, Salesforce will scale up its philanthropic efforts and create strategic synergies and operational simplicity that will enable the company to achieve even greater success for its nonprofit, education and philanthropy clients.

When Salesforce was founded in 1999, the company pioneered the 1-1-1 model of integrated corporate philanthropy, donating one percent of its capital, product and employee time to communities around the world. To date, Salesforce and Salesforce.org have provided free or discounted technology to more than 40,000 educational and non-profit institutions and have donated more than $ 260 million in grantsone. Employees of Salesforce and Salesforce.org have offered 3.8 million hours of their time in their communities.

The combination of Salesforce and Salesforce.org in a new non-profit organization and education reinforces the strength of Salesforce's philanthropic model. Salesforce will expand this model by continuing to provide free and highly discounted software to non-profit institutions and educational institutions around the world and investing in local communities through employee volunteering, strategic grants and equivalent employee badignments. $ 5,000 per employee annually.

Details about the business combination
In the process of combining the two organizations, Salesforce.org will become a California public benefit corporation in a California Commercial Corporation and Salesforce will pay a one-time cash purchase price of $ 300 million for all Salesforce.org actions. the $ 300 million will be distributed to the independent Salesforce.com Foundation, a California non-profit charitable corporation and 501 (c) (3) organization, for subsequent distribution by the Foundation for future philanthropic purposes. The company will make additional contributions to the Salesforce Foundation.

Salesforce will create a new educational and non-profit vertical directed by the CEO of Salesforce.org Rob Acker. The new vertical will be responsible for the sales, marketing and customer success of the Salesforce Customer Success Platform for the nonprofit and education communities, as well as the development of vertical nonprofit cloud applications, the cloud education and the philanthropic cloud of Salesforce.org.

The closing of the combination is subject to the approval of the Attorney General of California and other usual closing conditions. At the close of the transaction, Salesforce will terminate its current reseller agreement between Salesforce and Salesforce.org, and Salesforce will incur a one-time non-cash countable charge in the fiscal quarter in which the transaction is closed. Currently, Salesforce estimates that this non-monetary charge will be approximately $ 200 million, but the final amount will not be determined until the close of the transaction, and this estimate is subject to change. The one-time non-cash charge will be reflected as an operating expense for the company's GAAP and non-GAAP results.

As a result of the combination, Salesforce is updating its guidance for the full fiscal year 2020, previously provided in March 4, 2019.

Income FY20: The combination with Salesforce.org is expected to increase revenues for the company's entire fiscal year 2020 by approximately $ 150 million to $ 200 million, depending on the closing date of the transaction.

FY20 EPS: GAAP EPS Guidance Updates are currently unavailable for the reasons listed below and the company expects to provide the corresponding updates after the transaction closes. The company now expects FY20 non-GAAP EPS from $ 2.54 to $ 2.56. This estimate reflects the anticipated impact of the one-time non-monetary accounting charge mentioned above.

Operating cash flow FY20: The company continues to expect operating cash flow growth for the fiscal year 2020 from 20% to 21% year-on-year.

These estimates badume a closing date of the fiscal second quarter or the initial fiscal third quarter, and actual results could differ materially based on the closing date of the final transaction. Currently, the company can not prepare a forecast for the impact of the combination in GAAP EPS throughout the year and, therefore, can not provide a reconciliation for such amounts. Salesforce expects to be able to provide this update after the close of the transaction. The impact on EPS GAAP is expected to be more significant than non-GAAP EPS due to additional compensation charges based on shares and the impact of other non-monetary items, including income tax adjustments.

The previous guidance does not imply any change in the value of the strategic investment portfolio of the company as a result of ASU 2016-01, since it is not possible to forecast future gains and losses.

Management conference call
Salesforce will make a conference call in 2:00 p.m. (PT) / 5:00 pm. (ET) Today to discuss the combination with the investment community. The live broadcast of the event will be available on the Salesforce Investor Relations website at www.salesforce.com/investor. A direct telephone number is available nationwide at 866-901-SFDC or 866-901-7332 and internationally at 706-902-1764, access code 7897903. Repetition will be available at 800-585-8367 or 855-859- 2056 until midnight (ET) May 15, 2019.

Non-GAAP financial measures
This press release includes information on non-GAAP EPS and non-GAAP tax rates (collectively, "non-GAAP financial measures"). The main purpose of using non-GAAP financial measures is to provide complementary information that may be useful for investors and allow investors to evaluate the company's results in the same way that management does. Non-GAAP EPS estimates exclude the impact of the following elements: share-based compensation, amortization of intangibles related to acquisitions, future gains and losses on strategic investments, as well as income tax adjustments. A projected long-term non-GAAP projected tax rate, which excludes the direct impact of the excluded nonmonetary expense items mentioned above, is used, eliminating the effects of items such as changes in the allocation of tax valuation and the tax effects of cost related to the acquisition. and reflects the information currently available, as well as other factors and badumptions. The method used to produce non-GAAP financial measures is not calculated in accordance with accounting principles generally accepted in the US. UU And it may differ from the methods used by other companies. Non-GAAP financial measures should not be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with the company's consolidated financial statements prepared in accordance with GAAP.

Forward-looking statements
This communication contains prospective information related to the company, Salesforce.org and the business combination that involves substantial risks, uncertainties and badumptions that could cause actual results to differ materially from those expressed or implied in such statements. Forward-looking statements in this communication include, among other things, statements about the potential benefits of the proposed business combination, the plans, objectives, expectations and intentions of the company, the financial condition, the results of the operations and the business of the company. the company, and the anticipated results. Moment of closure of the proposed combination.

Risks and uncertainties include, among other things, risks related to the ability of the company to close the proposed combination in a timely manner or not at all; the satisfaction of the conditions prior to the closure of the proposed combination; the ability of the company to obtain regulatory approvals in the expected terms, in a timely manner or not at all; the ability of the company to implement its plans, forecasts and other expectations regarding Salesforce.org after the close of the combination and achieve the expected synergies; the ability to obtain the anticipated benefits of the proposed combination, including the possibility that the expected benefits of the proposed combination are not realized within the expected time period or not at all; the negative effects of the announcement of the proposed combination on the market price of the company's ordinary shares or on the company's operating results; transaction costs; unknown liabilities; the risk of litigation or regulatory actions related to the proposed combination; risks badociated with the effect of general economic and market conditions; the impact of geopolitical events; the impact of the exchange rate of the foreign currency and the fluctuations of the interest rate on the company's results; the business strategy of the company and the company's plan to develop its business, including the company's strategy to be the leading provider of business computing platforms and applications in the cloud; the pace of change and innovation in cloud computing business services; the competitive nature of the market in which the company participates; the strategy of international expansion of the company; the performance and security of the company's service, including the resources and costs necessary to prevent, detect and remedy possible security breaches; the expenses badociated with new data centers and third-party infrastructure providers; additional capacity of the data center; real estate and office space; operating results and cash flows of the company; new services and features of the product; the company's strategy of acquiring or investing in complementary businesses, joint ventures, services, technologies and intellectual property rights; the performance and fair value of the company's investments in complementary businesses through the company's strategic investment portfolio; the ability of the company to obtain the benefits of strategic alliances, joint ventures and investments; the ability of the company to successfully integrate acquired businesses and technologies; the company's ability to continue growing unearned income and the remaining performance obligation; the ability of the company to protect its intellectual property rights; the ability of the company to develop its brands; the company's confidence in suppliers of hardware, software and third-party platforms; the dependence of the company on the development and maintenance of the Internet infrastructure; the effect of the evolution of national and foreign government regulations, including those related to the provision of services on the Internet, those related to Internet access and those related to data privacy, cross-border data transfers and controls on import and export; the valuation of the deferred tax badets of the company and the changes in the provision for related valuation; the potential availability of additional fiscal badets in the future; the impact of new accounting pronouncements and tax laws; uncertainties that affect the ability of the company to estimate its tax rate; the uncertainties that affect the ability of the company to estimate the one-time non-cash accounting charge that will be incurred in connection with the proposed combination of Salesforce.org; the impact of future gains or losses on the company's strategic investment portfolio, including gains or losses from general market conditions that may affect listed companies within the company's strategic investment portfolio; the impact of expenses with stock options and other capital awards; the sufficiency of the capital resources of the company; factors related to the company's outstanding debt, the revolving credit facility, the term loan and the loan badociated with 50 Fremont; the fulfillment of the obligations of the company and the obligations of capital leasing; current and potential litigation involving the company; and the impact of climate change.

About Salesforce.org
Salesforce.org was founded on the idea that the business of companies is improving the state of the world. Founded on the 1-1-1 model, Salesforce.org returns the investment in education to the community to ensure that young people are prepared for the future.

Everyone who wants to change the world should have the tools and technology to do so. Technology is the most powerful equalizer of our time, as it provides access to data, knowledge and, above all, connections. Salesforce.org puts technology in the hands of nonprofits, educational institutions and philanthropic organizations so they can connect with others and do more good.

About Salesforce
Salesforce, the world leader in CRM, allows companies to connect with their customers in a completely new way. For more information about Salesforce (NYSE: CRM), visit: www.salesforce.com.

All unpublished services or features referenced in this or other press releases or public statements are not currently available and may not be delivered on time or at all. Customers who purchase Salesforce applications must make their purchase decisions based on the features that are currently available. Salesforce is based in San Francisco, with offices in Europe Y Asia, and listed on the New York Stock Exchange under the symbol "CRM". For more information, visit https://www.salesforce.com or call 1-800-NO-SOFTWARE.

one Grants made through Salesforce.org and the Salesforce.com Foundation.

SOURCE Salesforce

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