As presented in the “Reconciliation of GAAP to Non-GAAP” tables in the accompanying press release, each of the non-GAAP financial measures excludes one or more of the following items:

Acquisition related. Acquisition-related charges are not factored into management’s evaluation of potential acquisitions or IDT’s performance after completion of acquisitions, because they are not related to the Company’s core operating performance. Adjustments of these items provide investors with a basis to compare IDT’s performance to other companies without the variability caused by purchase accounting. Acquisition-related expenses primarily include:

• Amortization of acquisition related intangibles, which include acquired intangibles such as purchased technology, patents, customer relationships, trademarks, backlog and non-compete agreements.
• Acquisition related costs such as legal, accounting and other professional or consulting fees directly related to an acquisition.
• Other acquisition related costs which consists of an accrued deferred closing date fee associated with the acquisition of NXP’s high-speed data converter assets.
• Fair market value adjustment to acquired inventory sold.

Restructuring related. Restructuring charges primarily relate to changes in IDT’s infrastructure in efforts to reduce costs and expenses (gains) associated with strategic divestitures and restructuring in force actions. Restructuring charges (gains) are excluded from non-GAAP financial measures because they are not considered core operating activities. Although IDT has engaged in various restructuring activities in the past, each has been a discrete event based on a unique set of business objectives. As such, management believes that it is appropriate to exclude restructuring charges (gains) from IDT’s non-GAAP financial measures as it enhances the ability of investors to compare the Company’s period-over-period operating results from continuing operations. Restructuring-related charges (gains) primarily include:

• Severance and retention costs directly related to a restructuring action.
• Facility closure costs consist of ongoing costs associated with the exit of our leased and owned facilities.
• Gain on divestiture consists of gains recognized upon the strategic sale of business units.
• Assets impairments consists of an impairment charge related to a note receivable and subsequent recoveries.
• Asset impairments, consists of the accelerated depreciation of certain design tools no longer in use

Other adjustments. These items are excluded from non-GAAP financial measures because they are not related to the core operating activities and on-going future operating performance of IDT. Excluding this data allows investors to better compare IDT’s period-over-period performance without such expense, which IDT believes may be useful to the investor community. Other adjustments primarily include:

• Stock based compensation expense.
• Expenses related to stockholder activities reflect advisory fees related to inquiries of Starboard Value LP.
• Compensation expense (benefit) – deferred compensation, consists of gains and losses on marketable equity securities related to our deferred compensation arrangements.
• Loss (gain) on deferred compensation plan securities represents the changes in the fair value of the assets in a separate trust that is invested in corporate owned life insurance under our deferred compensation plan.
• Life insurance proceeds received, represents proceeds received under corporate owned life insurance under our deferred compensation plan.
• Tax effects of non-GAAP adjustments.
• Diluted weighted average shares non-GAAP adjustment, for purposes of calculating non-GAAP diluted net income per share, the GAAP diluted weighted average shares outstanding is adjusted to exclude the benefits of stock compensation expense attributable to future services not yet recognized in the financial statements that are treated as proceeds assumed to be used to repurchase shares under the GAAP treasury method.

IDT and the IDT logo are trademarks or registered trademarks of Integrated Device Technology, Inc. All other brands, product names and marks are or may be trademarks or registered trademarks used to identify products or services of their respective owners.

INTEGRATED DEVICE TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
		Three Months Ended														Twelve Months Ended
		Mar. 30,				Dec. 29,				Mar. 31,						Mar. 30,				Mar. 31,
		2014				2013				2013						2013				2013
Revenues		$	118,640			$	124,628			$	107,779					$	484,779			$	484,452
Cost of revenues			57,509				49,689				48,256						211,826				214,728
Gross profit			61,131				74,939				59,523						272,953				269,724
Operating expenses:
Research and development			32,656				31,063				42,096						140,595				159,471
Selling, general and administrative			23,213				23,687				27,784						101,039				117,648
Total operating expenses			55,869				54,750				69,880						241,634				277,119
Operating income (loss)			5,262				20,189				(10,357	)					31,319				(7,395	)
Gain (loss) from divestiture			(302	)			(3,415	)			7,986						78,632				7,986
Other-than-temporary impairment loss on investments			-				-				(1,708	)					-				(1,708	)
Other income (expense), net			786				1,108				258						2,707				1,708
Income (loss) from continuing operations before income taxes			5,746				17,882				(3,821	)					112,658				591
Provision (benefit) for income taxes			320				543				1,648						981				(2,120	)
Net income (loss) from continuing operations			5,426				17,339				(5,469	)					111,677				2,711
Discontinued operations:
Gain from divestiture			-				-				-						-				886
Loss from discontinued operations			(5,016	)			(10,123	)			(4,995	)					(22,938	)			(23,653	)
Provision (benefit) for income taxes			17				268				163						11				116
Net income (loss) from discontinued operations			(5,033	)			(10,391	)			(5,158	)					(22,949	)			(22,883	)
Net income (loss)		$	393			$	6,948			$	(10,627	)				$	88,728			$	(20,172	)
Basic net income (loss) per share continuing operations		$	0.04			$	0.11			$	(0.04	)				$	0.75			$	0.02
Basic net income (loss) per share discontinued operations			(0.04	)			(0.06	)			(0.03	)					(0.16	)			(0.16	)
Basic net income (loss) per share		$	-			$	0.05			$	(0.07	)				$	0.59			$	(0.14	)
Diluted net income (loss) per share continuing operations		$	0.04			$	0.11			$	(0.04	)				$	0.73			$	0.02
Diluted net income (loss) per share discontinued operations			(0.04	)			(0.07	)			(0.03	)					(0.15	)			(0.16	)
Diluted net income (loss) per share		$	-			$	0.04			$	(0.07	)				$	0.58			$	(0.14	)
Weighted average shares:
Basic			150,033				151,018				145,626						149,480				144,014
Diluted			154,390				155,035				145,626						153,369				145,678

INTEGRATED DEVICE TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (a)
(Unaudited)
(In thousands, except per share data)
		Three Months Ended														Twelve Months Ended
		Mar. 30,				Dec. 29,				Mar. 31,						Mar. 30,				Mar. 31,
		2014				2013				2013						2013				2013
GAAP net income (loss) from continuing operations		$	5,426			$	17,339			$	(5,469	)				$	111,677			$	2,711
GAAP diluted net income (loss) per share continuing operations		$	0.04			$	0.11			$	(0.04	)				$	0.73			$	0.02
Acquisition related:
Amortization of acquisition related intangibles			11,999				3,322				4,097						21,964				16,339
Impairment of acquired in-process R&D			2,433				-				-						2,433				-
Acquisition related legal and consulting fees			73				21				1,009						802				11,238
Fair market value adjustment to acquired inventory sold			-				-				-						-				358
Restructuring related:
Severance and retention costs			383				400				1,662						6,456				5,522
Facility closure costs			107				6				2						134				62
Gain on divestiture			302				3,415				(7,986	)					(78,632	)			(7,986	)
Assets impairment and other			334				(265	)			5,687						4,113				6,096
Other:
Other-than-temporary impairment loss on investments			-				-				1,708						-				1,708
Stock-based compensation expense			2,368				3,169				3,813						12,677				13,054
Expenses related to stockholder activities			-				-				(1,000	)					-				1,614
Compensation expense (benefit)—deferred compensation plan			185				557				704						1,265				1,135
Loss (gain) on deferred compensation plan securities			(171	)			(627	)			(696	)					(1,316	)			(941	)
Life insurance proceeds received			-				-				-						-				(2,313	)
Tax effects of Non-GAAP adjustments			(1,331	)			(1,402	)			1,381						(4,389	)			(7,910	)
Non-GAAP net income from continuing operations		$	22,108			$	25,935			$	4,912					$	77,184			$	40,687
GAAP weighted average shares - diluted			154,390				155,035				145,626						153,369				145,678
Non-GAAP adjustment			1,492				2,099				5,026						1,981				1,934
Non-GAAP weighted average shares - diluted			155,882				157,134				150,652						155,350				147,612
Non-GAAP diluted net income per share continuing operations		$	0.14			$	0.17			$	0.03					$	0.50			$	0.28
GAAP gross profit			61,131				74,939				59,523						272,953				269,724
Acquisition and divestiture related:
Amortization of acquisition related intangibles			11,016				2,435				2,740						18,321				12,413
Fair market value adjustment to acquired inventory sold			-				-				-						-				358
Restructuring related:
Severance and retention costs			117				-				-						204				607
Facility closure costs			-				2				(9	)					8				4
Assets impairment and other			105				(142	)			(37	)					(111	)			372
Other:
Compensation expense (benefit)—deferred compensation plan			55				172				217						388				324
Stock-based compensation expense			61				403				263						1,189				1,113
Non-GAAP gross profit			72,485				77,809				62,697						292,952				284,915
GAAP R&D expenses:			32,656				31,063				42,096						140,595				159,471
Acquisition and divestiture related:
Impairment of acquired in-process R&D			(2,433	)			-				-						(2,433	)			-
Restructuring related:
Severance and retention costs			(264	)			(86	)			(1,560	)					(4,193	)			(3,882	)
Facility closure costs			-				(2	)			(6	)					(9	)			(43	)
Assets impairment and other			(63	)			123				(3,203	)					(4,058	)			(3,203	)
Other:
Compensation expense (benefit)—deferred compensation plan			(90	)			(289	)			(365	)					(650	)			(626	)
Stock-based compensation expense			(1,389	)			(1,514	)			(2,001	)					(5,601	)			(6,691	)
Non-GAAP R&D expenses			28,417				29,295				34,961						123,651				145,026
GAAP SG&A expenses:			23,213				23,687				27,784						101,039				117,648
Acquisition and divestiture related:
Amortization of acquisition related intangibles			(983	)			(887	)			(1,357	)					(3,643	)			(3,926	)
Acquisition related legal and consulting fees			(73	)			(21	)			(1,009	)					(802	)			(11,238	)
Restructuring related:
Severance and retention costs			(2	)			(314	)			(102	)					(2,059	)			(1,033	)
Facility closure costs			(107	)			(2	)			(5	)					(117	)			(15	)
Assets impairment and other			(166	)			-				(2,521	)					(166	)			(2,521	)
Other:
Compensation expense (benefit)—deferred compensation plan			(40	)			(96	)			(122	)					(227	)			(185	)
Stock-based compensation expense			(918	)			(1,252	)			(1,549	)					(5,887	)			(5,250	)
Expenses related to stockholder activities			-				-				1,000						-				(1,614	)
Non-GAAP SG&A expenses			20,924				21,115				22,119						88,138				91,866
GAAP interest income and other, net			786				1,108				258						2,707				1,708
Loss (gain) on deferred compensation plan securities			(171	)			(627	)			(696	)					(1,316	)			(941	)
Life insurance proceeds received			-				-				-						-				(2,313	)
Non-GAAP interest income and other, net			615				481				(438	)					1,391				(1,546	)
GAAP provision (benefit) for income taxes continuing operations			320				543				1,648						981				(2,120	)
Tax effects of Non-GAAP adjustments (7)			1,331				1,402				(1,381	)					4,389				7,910
Non-GAAP provision for income taxes continuing operations			1,651				1,945				267						5,370				5,790
(a) Refer to the accompanying “Notes to Non-GAAP Financial Measures” for a detailed discussion of management’s use of non-GAAP financial measures.

INTEGRATED DEVICE TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
		Mar. 30,			March 31,
(In thousands)		2014			2013
ASSETS
Current assets:
Cash and cash equivalents		$	91,211		$	130,837
Short-term investments			362,604			166,333
Accounts receivable, net			68,904			62,083
Inventories			49,622			56,555
Prepaid and other current assets			13,034			24,697
Total current assets			585,375			440,505
Property, plant and equipment, net			69,827			74,988
Goodwill			135,644			144,924
Acquisition-related intangibles			18,741			48,602
Other assets			21,373			19,560
TOTAL ASSETS		$	830,960		$	728,579
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	25,442		$	23,244
Accrued compensation and related expenses			24,343			21,090
Deferred income on shipments to distributors			14,006			14,539
Deferred taxes liabilities			1,346			1,000
Other accrued liabilities			11,160			14,652
Total current liabilities			76,297			74,525
Deferred tax liabilities			1,494			1,552
Long term income taxes payable			266			454
Other long term obligations			18,683			22,022
Total liabilities			96,740			98,553
Stockholders' equity			734,220			630,026
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	830,960		$	728,579

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