RECONCILIATION OF GAAP TO NON-GAAP RESULTS

U.S. dollars in thousands (except per share data)

 (Unaudited)

Three months ended

Year ended

March 31,

December 31,

2018

2017

2017

Reported operating income on GAAP basis

35,925

19,654

137,510

Equity-based compensation expenses

3,032

2,218

9,876

Amortization of intangible assets

6,371

5,893

25,006

Transaction cost pending merger with KLA

2,481

Gain from the release of AMST earn out payment obligation

(1,471)

Non-GAAP operating income

$47,809

$27,765

$172,392

Reported net income attributable to Orbotech Ltd. on GAAP basis⁽¹⁾ 

$30,267

$14,920

$132,385

Equity-based compensation expenses

3,032

2,218

9,876

Amortization of intangible assets

6,371

5,893

25,006

Tax effect of non-GAAP adjustments

(1,059)

(748)

(4,656)

Tax benefit 

(18,778)

Transaction cost pending merger with KLA

2,481

Gain from the release of AMST earn out payment obligation

(1,471)

Non-GAAP net income

$41,092

$22,283

$142,362

GAAP earnings per diluted share

$0.61

$0.31

$2.71

Non-GAAP earnings per diluted share

$0.83

$0.46

$2.91

Shares used in earnings per diluted share computation - in thousands

49,331

48,768

48,850

⁽¹⁾ Reflects the net benefit of approximately $16 million consisting of the impact of increase in deferred tax assets during the last quarter of 2017, 

mainly for the valuation allowance releases and decrease in deferred tax liabilities offset by an increase in our tax provisions.