ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES

(Unaudited)

Three Months Ended

Year Ended

June 30,

March 31, 

June 24,

June 30,

June 24,

2018

2018

2017

2018

2017

(in thousands, except per share data)

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

GAAP gross profit

$   418,668

$   423,946

$   393,666

$ 1,626,121

$ 1,446,480

GAAP gross profit %

66.1%

65.4%

65.4%

65.6%

63.0%

Special items:

Intangible asset amortization 

11,759

12,101

11,064

46,064

46,485

Accelerated depreciation (1)

—

—

—

—

3,459

 Total special items 

11,759

12,101

11,064

46,064

49,944

  GAAP gross profit excluding special items 

$   430,427

$   436,047

$   404,730

$ 1,672,185

$ 1,496,424

  GAAP gross profit % excluding special items 

68.0%

67.2%

67.2%

67.4%

65.2%

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

GAAP operating expenses

$   196,273

$   199,108

$   194,288

$    792,674

$    751,703

Special items:

Intangible asset amortization

844

876

2,050

4,467

9,189

Impairment of long-lived assets (2)

—

—

—

892

7,517

Severance and restructuring

833

2,272

1,175

15,060

12,453

Other operating expenses (income), net (3)

(71)

266

1,923

(1,607)

(22,944)

 Total special items 

1,606

3,414

5,148

18,812

6,215

 GAAP operating expenses excluding special items 

$   194,667

$   195,694

$   189,140

$    773,862

$    745,488

Reconciliation of GAAP net income (loss) to GAAP net income excluding special items:

GAAP net income (loss)

$   194,172

$   193,627

$   163,309

$    467,318

$    571,613

Special items:

Intangible asset amortization

12,603

12,977

13,114

50,531

55,674

Accelerated depreciation (1)

—

—

—

—

3,459

Impairment of long-lived assets (2)

—

—

—

892

7,517

Severance and restructuring

833

2,272

1,175

15,060

12,453

Other operating expenses (income), net (3)

(71)

266

1,923

(1,607)

(22,944)

Interest and other expense (income), net (4)

(941)

(97)

(90)

(1,243)

(5,661)

 Pre-tax total special items 

12,424

15,418

16,122

63,633

50,498

Other income tax effects and adjustments (5)

1,194

151

499

(898)

(11,465)

Impact of U.S. tax legislation (6)

—

—

—

243,550

—

 GAAP net income excluding special items 

$   207,790

$   209,196

$   179,930

$    773,603

$    610,646

 GAAP net income per share excluding special items: 

Basic

$0.74

$0.74

$0.64

$2.75

$2.16

Diluted

$0.73

$0.73

$0.63

$2.71

$2.12

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

Basic

279,304

280,850

282,747

280,979

283,147

Diluted

283,934

285,881

287,494

285,674

287,974

(1) Includes building and equipment accelerated depreciation related to the Dallas manufacturing facility during fiscal year 2017.

(2) Includes impairment of investments in privately-held companies and other equipment impairment charges.

(3) Includes gain on sale of the micro-electromechanical systems (MEMS) business line during fiscal year 2017.

(4) Includes gain on sale of shares received for the sale of the wafer manufacturing facility in San Antonio, Texas during fiscal year 2017.

(5) Includes tax effect of pre-tax special items and miscellaneous tax adjustments.

(6) Includes effect of U.S. tax legislation enacted on December 22, 2017.