Marvell Technology Group Ltd.

Reconciliations from GAAP to Non-GAAP

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended

January 28,

October 29,

July 30,

April 30,

2017

2016

2016

2016

GAAP gross profit from continuing operations:

$    327,517

$   357,779

$ 327,822

$ 275,029

Special items:

Share-based compensation

1,641

2,189

2,720

1,784

Non-GAAP gross profit

$    329,158

$   359,968

$ 330,542

$ 276,813

GAAP gross margin from continuing operations

57.3%

57.1%

54.6%

53.0%

Non-GAAP gross margin 

57.6%

57.5%

55.0%

53.3%

Total GAAP operating expenses from continuing operations

$    339,650

$   270,195

$ 283,163

$ 295,145

Special items:

Share-based compensation

(20,764)

(23,826)

(31,440)

(20,396)

Restructuring and other related charges (a)

(98,860)

(1,164)

(721)

(4,441)

Amortization of and write-off acquired intangible assets

(1,480)

(2,299)

(2,299)

(2,298)

Other operating expenses

(315)

-

13

(1,242)

Total special items

(121,419)

(27,289)

(34,447)

(28,377)

Total non-GAAP operating expenses

$    218,231

$   242,906

$ 248,716

$ 266,768

GAAP net income (loss)

$    (80,091)

$     72,616

$   51,305

$ (22,679)

Net loss from discontinued operations

3,214

4,838

5,383

9,408

GAAP net income (loss) from continuing operations

(76,877)

77,454

56,688

(13,271)

Special items:

Share-based compensation

22,405

26,015

34,160

22,180

Restructuring and other related charges (a)

98,860

1,164

721

4,441

Amortization of and write-off acquired intangible assets

1,480

2,299

2,299

2,298

Other operating expenses

315

-

(13)

1,242

Pre-tax total special items

123,060

29,478

37,167

30,161

Non-GAAP income before income taxes

46,183

106,932

93,855

16,890

Tax effect of special items (b)

67,989

-

-

(1,071)

Non-GAAP net income from continuing operations

$    114,172

$   106,932

$   93,855

$   15,819

Weighted average shares - basic

507,834

511,090

511,235

508,794

Weighted average shares - diluted

507,834

522,091

514,314

508,794

Non-GAAP weighted average shares - diluted

528,141

531,831

526,453

522,363

GAAP diluted net income (loss) per share from continuing operations

$        (0.15)

$         0.15

$       0.11

$     (0.03)

Non-GAAP diluted net income per share from continuing operations

$          0.22

$         0.20

$       0.18

$       0.03

(a)

Restructuring and other related charges include costs that qualify under U.S. GAAP as restructuring costs and other incremental charges that are a direct result of restructuring. Examples of other incremental charges include impairment of equipment specifically identified as part of the restructuring action. 

(b)

Tax effect of special items in the three months ended January 28, 2017 include $68.0 million of tax expense related to restructuring actions taken. Tax effect of special items in the three months ended April 30, 2016 include $1.1 million related tax effect of the payment to our former Chief Executive Officer.