(1) Excludes 2,025 and 1,929 shares for the three and twelve months ended July 2, 2006, respectively, to conform diluted outstanding shares calculated under FAS123R to diluted shares calculated under prior accounting standards

FAS123R -- Share-Based Payment became effective and was adopted by the Company during the quarter ended October 2, 2005. FAS123R requires the Company to estimate the cost of all forms of stock based compensation, including employee stock options, and to record a commensurate expense in the income statement. To supplement our consolidated financial statements presented in accordance with GAAP, we have shown above a non-GAAP (pro forma) presentation of the Company's earnings per share, which is adjusted to reflect the GAAP results to exclude all stock based compensation. This non-GAAP presentation of earnings per share is provided to enhance the user's overall understanding of the Company's historical financial performance and comparability between periods. We believe the non-GAAP results provide useful information to investors by excluding stock based compensation particularly during this transitional period when many companies have not yet adopted the provisions of FAS123R.

                        LINEAR TECHNOLOGY CORPORATION
                    CONSOLIDATED CONDENSED BALANCE SHEETS
                            (Dollars in thousands)

                                                   July 2,        July 3,
                                                    2006           2005
                                                  (audited)      (audited)
    ASSETS

    Current assets:
      Cash, cash equivalents and short-term
       investments                                $1,819,587     $1,790,912

      Accounts receivable, net of allowance for
       doubtful accounts of $1,808 ($1,713 at
       July 3, 2005)                                 154,297        125,864

      Inventories                                     39,031         34,328

      Deferred tax assets and other current assets    64,221         56,205

      Total current assets                         2,077,136      2,007,309

    Property, plant & equipment, net                 247,969        221,028
    Other noncurrent assets                           65,790         57,897
    Total assets                                  $2,390,895     $2,286,234

    LIABILITIES & STOCKHOLDERS ' EQUITY

    Current liabilities:
      Accounts payable                               $14,574        $11,800

      Accrued income taxes, payroll & other
       accrued liabilities                           174,239        152,231

      Deferred income on shipments to distributors    48,013         43,708

        Total current liabilities                    236,826        207,739

    Deferred tax and other long-term liabilities      49,571         71,461

    Stockholders' equity:

      Common stock                                 1,063,446        926,763
      Retained earnings                            1,046,137      1,083,110
      Accumulated other comprehensive income         (5,085)        (2,839)
        Total stockholders' equity                 2,104,498      2,007,034
                                                  $2,390,895     $2,286,234

Web site: http://www.linear.com/