Altera Announces Third Quarter Results

Notes:
(1) Research and development expense as a percentage of Net sales includes amortization of acquisition-related intangible assets. (2) We define operating margin as gross margin less research and development expense, selling, general and administrative expense, amortization of acquisition-related intangible assets, and merger expenses, as presented above. This presentation differs from income from operations as defined by U.S. Generally Accepted Accounting Principles ("GAAP"), as it excludes the effect of compensation associated with the deferred compensation plan obligations. Since the effect of compensation associated with our deferred compensation plan obligations is offset by losses/(gains) from related securities, we believe this presentation provides a more meaningful representation of our ongoing operating performance. A reconciliation of operating margin to income from operations follows:

	Three Months Ended						Nine Months Ended
(In thousands, except per share amounts)	September 25, 2015		June 26, 2015		September 26, 2014		September 25, 2015		September 26, 2014
Operating margin (non-GAAP)	$	77,762	$	86,331	$	141,320	$	267,114	$	422,482
Compensation (benefit)/ expense — deferred compensation plan	(4,468)		2,732		(487)		(1,709)		4,093
Income from operations (GAAP)	$	82,230	$	83,599	$	141,807	$	268,823	$	418,389

ALTERA CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)

(In thousands, except par value amount)	September 25, 2015		December 31, 2014

Assets
Current assets:
Cash and cash equivalents	$	1,934,850	$	2,426,367
Short-term investments	185,762		151,519
Total cash, cash equivalents, and short-term investments	2,120,612		2,577,886
Accounts receivable, net	444,107		377,964
Inventories	159,310		153,387
Deferred income taxes — current	60,210		56,048
Deferred compensation plan — marketable securities	57,781		69,367
Deferred compensation plan — restricted cash equivalents	17,166		14,412
Other current assets	50,718		39,479
Total current assets	2,909,904		3,288,543
Property and equipment, net	208,897		194,840
Long-term investments	2,504,693		1,942,343
Deferred income taxes — non-current	20,725		20,077
Goodwill	81,331		74,341
Acquisition-related intangible assets, net	66,989		72,291
Other assets, net	92,646		81,791
Total assets	$	5,885,185	$	5,674,226

Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	41,520	$	49,140
Accrued liabilities	47,523		28,384
Accrued compensation and related liabilities	74,113		69,837
Deferred compensation plan obligations	74,947		83,779
Deferred income and allowances on sales to distributors	439,504		344,168
Total current liabilities	677,607		575,308
Income taxes payable — non-current	352,433		313,447
Long-term debt	1,493,729		1,492,759
Other non-current liabilities	8,955		6,886
Total liabilities	2,532,724		2,388,400
Stockholders' equity:
Common stock: $.001 par value; 1,000,000 shares authorized; outstanding - 302,857 shares at September 25, 2015 and 302,430 shares at December 31, 2014	303		302
Capital in excess of par value	1,227,586		1,165,259
Retained earnings	2,115,487		2,110,620
Accumulated other comprehensive income	9,085		9,645
Total stockholders' equity	3,352,461		3,285,826
Total liabilities and stockholders' equity	$	5,885,185	$	5,674,226

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