ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES

(Unaudited)

Three Months Ended

March 29,

December 28,

March 30,

2014

2013

2013

(in thousands, except per share data)

Reconciliation of GAAP gross profit to GAAP gross profit excluding special items:

GAAP gross profit

$     339,937

$       328,672

$     376,102

GAAP gross profit %

56.1%

53.0%

62.2%

Special items:

      Intangible asset amortization 

18,542

19,098

7,777

      Acquisition-related inventory write-up

5,518

13,066

-

 Total special items 

24,060

32,164

7,777

 GAAP gross profit excluding special items 

$     363,997

$       360,836

$     383,879

 GAAP gross profit % excluding special items 

60.1%

58.2%

63.5%

Reconciliation of GAAP operating expenses to GAAP operating expenses excluding special items:

GAAP operating expenses

$     233,199

$       258,278

$     221,824

Special items:

    Intangible asset amortization 

4,863

4,968

3,903

    Impairment of long-lived assets 

-

5,197

-

    Severance and restructuring (1) 

3,338

10,227

151

     Acquisition-related costs

(88)

4,137

-

   Other operating expenses (income), net (2) 

2,913

7,307

1,678

 Total special items 

11,026

31,836

5,732

 GAAP operating expenses excluding special items 

$     222,173

$       226,442

$     216,092

Reconciliation of GAAP net income to GAAP net income excluding special items:

GAAP net income

$     122,544

$         44,353

$     131,388

Special items:

      Intangible asset amortization

23,405

24,066

11,680

      Acquisition-related inventory write-up

5,518

13,066

-

      Impairment of long-lived assets

-

5,197

-

     Severance and restructuring (1) 

3,338

10,227

151

     Acquisition-related costs

(88)

4,137

-

     Other operating expenses (income), net (2) 

2,913

7,307

1,678

     Interest and other expense, net (3) 

3,723

-

-

                     Pre-tax total special items 

38,809

64,000

13,509

     Tax effect of special items 

(3,658)

(5,894)

(3,806)

     Fixed asset tax basis adjustment (4) 

(34,562)

-

-

     Research & development tax credits 

-

-

(3,899)

     Discontinued operations, net of tax 

-

-

(2,603)

 GAAP net income excluding special items 

$     123,133

$       102,459

$     134,589

 GAAP net income per share excluding special items: 

    Basic 

$           0.44

$             0.36

$           0.46

    Diluted 

$           0.43

$             0.36

$           0.45

Shares used in the calculation of earnings per share excluding special items: 

    Basic

282,627

282,664

292,888

    Diluted 

288,575

288,565

300,082

(1)  Includes severance, retention and lease abandonment charges related to acquisitions, and severance charges related to the reorganization of various business units and manufacturing operations.

(2) Other operating expenses (income), net are primarily for legal settlement, in-process research and development abandoned, contingent consideration adjustments related to certain acquisitions and legal expenses related to Volterra acquisition.

(3) Includes impairment of investments in privately-held companies.

(4) Includes one-time fixed asset tax basis adjustments relating to prior year depreciation expense.