ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES

(Unaudited)

Three Months Ended

Year Ended

June 26, 2021

March 27, 2021

June 27, 2020

June 26, 2021

June 27, 2020

(in thousands, except per share data)

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

GAAP gross profit

$         484,025

$             442,885

$         362,368

$      1,760,346

$      1,432,652

GAAP gross profit %

67.2%

66.6%

66.4%

66.9%

65.4%

Special items:

Intangible asset amortization

3,047

4,430

3,528

17,408

12,860

Merger-related expenses⁽¹⁾

-

-

-

2,381

-

Cost of COVID-19 response programs

609

638

1,591

2,750

3,616

Severance and restructuring

-

-

-

13

-

 Total special items 

3,656

5,068

5,119

22,552

16,476

 GAAP gross profit excluding special items 

$         487,681

$             447,953

$         367,487

$      1,782,898

$      1,449,128

 GAAP gross profit % excluding special items 

67.7%

67.4%

67.4%

67.7%

66.1%

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

GAAP operating expenses

$         200,688

$             195,621

$         184,381

$         814,646

$         746,258

Special items:

Merger-related expenses ⁽¹⁾

2,058

2,546

-

26,617

-

Intangible asset amortization

846

846

810

3,553

3,078

Severance and restructuring

1,139

155

678

13,434

5,363

Other operating expenses (income), net

831

6,302

(173)

7,436

928

 Total special items 

4,874

9,849

1,315

51,040

9,369

 GAAP operating expenses excluding special items 

$         195,814

$             185,772

$         183,066

$         763,606

$         736,889

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

GAAP net income

$         253,739

$             220,063

$         207,298

$         827,261

$         654,694

Special items:

Intangible asset amortization

3,893

5,276

4,338

20,961

15,938

Merger-related expenses ⁽¹⁾

2,058

2,546

-

29,011

-

Cost of COVID-19 response programs

609

638

1,591

2,750

3,616

Severance and restructuring

1,139

155

678

13,434

5,363

Other operating expenses (income), net

831

6,302

(173)

7,436

928

Interest and other expense (income), net

(2,878)

(7,359)

1,484

(15,903)

(541)

 Pre-tax total special items 

5,652

7,558

7,918

57,689

25,304

Other income tax effects and adjustments ⁽²⁾

(12,950)

(5,928)

(14,378)

(24,765)

(19,668)

Impact of U.S. tax legislation ⁽³⁾

-

-

6,486

-

6,486

Impact of income tax audit settlements ⁽⁴⁾

-

-

(51,197)

-

(51,197)

 GAAP net income excluding special items 

$         246,441

$             221,693

$         156,127

$         860,185

$         615,619

 GAAP net income per share excluding special items: 

Basic

$               0.92

$                   0.83

$               0.59

$               3.22

$               2.29

Diluted

$               0.91

$                   0.82

$               0.58

$               3.18

$               2.26

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

Basic

268,160

267,892

266,639

267,546

269,341

Diluted

271,445

271,396

268,777

270,872

272,028

(1) Includes ADI merger related expenses such as accelerated stock-based compensation expense resulting from the acceleration of certain RSAs and RSUs, and other legal and professional services.

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

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

(4) Includes effect of income tax audit settlements.