ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES

(Unaudited)

Three Months Ended

March 30,

December 29,

March 31,

2013

2012

2012

(in thousands, except per share data)

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

GAAP gross profit

$           376,102

$              363,375

$           335,430

GAAP gross profit %

62.2%

60.0%

58.7%

Special expense items:

      Intangible asset amortization

7,777

8,986

9,787

 Total special expense items 

7,777

8,986

9,787

 GAAP gross profit excluding special expense items 

$           383,879

$              372,361

$           345,217

 GAAP gross profit % excluding special expense items 

63.5%

61.5%

60.4%

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

GAAP operating expenses

$           221,824

$              245,827

$           223,544

Special expense (income) items:

      Intangible asset amortization

3,903

3,903

4,029

      Impairment of long-lived assets (1)

-

22,222

7,712

     Severance and restructuring 

151

2,236

228

     Other operating expenses (income), net (2) 

1,678

1,666

(2,511)

 Total special expense items 

5,732

30,027

9,458

 GAAP operating expenses excluding special expense items 

$           216,092

$              215,800

$           214,086

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

GAAP net income

$           131,388

$                76,622

$             54,517

Special expense (income) items:

      Intangible asset amortization

11,680

12,889

13,816

      Impairment of long-lived assets (1)

-

22,222

7,712

     Severance and restructuring 

151

2,236

228

     Other operating expenses (income) , net (2) 

1,678

1,666

(2,511)

                     Pre-tax total special expense items 

13,509

39,013

19,245

     Tax effect of special items 

(3,806)

(9,555)

(5,445)

     Reversal of tax reserves 

-

-

(2,272)

     International restructuring implementation (3) 

-

18,726

65,293

     Fiscal year 2012 research & development tax credits 

(3,899)

-

-

     Discontinued operations, net of tax (4) 

(2,603)

-

(31,809)

 GAAP net income excluding special expense items 

$           134,589

$              124,806

$             99,529

 GAAP net income per share excluding special expense items: 

    Basic 

$             0.46

$                0.43

$             0.34

    Diluted 

$             0.45

$                0.42

$             0.33

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

    Basic

292,888

292,075

292,276

    Diluted 

300,082

298,759

300,221

(1) Includes impairment charges relating to wafer fab and end of line manufacturing equipment and land and building held for sale.

(2) Other operating expenses (income), net are primarily for in-process research and development, contingent consideration adjustments related to certain acquisitions, gain relating to sale of land and buildings, and stock option related litigation.

(3) Includes impact due to international restructuring.

(4) Includes gain on sale, net of tax relating to certain businesses divested.