ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES

(Unaudited)

Three Months Ended

March 25, 

December 24, 

March 26, 

2017

2016

2016

(in thousands, except per share data)

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

GAAP gross profit

$      366,904

$             340,178

$      318,841

GAAP gross profit %

63.1%

61.7%

57.4%

Special items:

Intangible asset amortization 

11,064

11,755

11,829

Accelerated depreciation (1)

1,103

1,178

4,066

Other cost of goods sold (2)

—

—

6,123

 Total special items 

12,167

12,933

22,018

  GAAP gross profit excluding special items 

$      379,071

$             353,111

$      340,859

  GAAP gross profit % excluding special items 

65.2%

64.1%

61.4%

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

GAAP operating expenses

$      192,652

$             191,104

$      141,133

Special items:

Intangible asset amortization

2,348

2,348

2,538

Impairment of long-lived assets (3)

1,000

383

506

Severance and restructuring 

450

864

2,552

Other operating expenses (income), net 

1,704

1,909

(55,419)

  Total special items 

5,502

5,504

(49,823)

  GAAP operating expenses excluding special items 

$      187,150

$             185,600

$      190,956

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

GAAP net income (loss)

$      140,213

$             130,477

$      139,810

Special items:

Intangible asset amortization 

13,412

14,103

14,367

Accelerated depreciation (1)

1,103

1,178

4,066

Other cost of goods sold (2)

—

—

6,123

Impairment of long-lived assets (3)

1,000

383

506

Severance and restructuring 

450

864

2,552

Other operating expenses (income), net 

1,704

1,909

(55,419)

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

(48)

(5,052)

(45)

  Pre-tax total special items 

17,621

13,385

(27,850)

Other income tax effects and adjustments (5)

1,957

(11,167)

5,698

 GAAP net income excluding special items 

$      159,791

$             132,695

$      117,658

 GAAP net income per share excluding special items: 

Basic

$            0.56

$                   0.47

$            0.41

Diluted

$            0.56

$                   0.46

$            0.41

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

Basic

282,903

283,294

285,854

Diluted

287,882

288,106

289,783

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

(2) Includes expense related to patent license settlement.

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

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

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