LINEAR TECHNOLOGY CORPORATION RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME (In thousands, except per share amounts) Three Months Ended Six Months Ended --------------------------------- --------------------- Dec. 30, Sep. 30, Dec. 31, Dec. 30, Dec. 31, 2007 2007 2006 2007 2006 --------- --------- ----------- --------- --------- Reported net income (GAAP basis) $ 93,755 $ 91,475 $105,012 $185,230 $217,401 Stock- based comp- ensation (1) 14,682 13,944 17,761 28,626 34,8477 Income tax effect of non- GAAP adjust- ments (4,405) (4,044) (4,973) (8,447) (10,308) --------- --------- ----------- --------- --------- Non-GAAP net income $104,032 $101,375 $117,800 $205,409 $241,940 ========= ========= =========== ========= ========= Non-GAAP earnings per share excluding the effects of stock-based compensation: Basic $ 0.47 $ 0.45 $ 0.39 $ 0.92 $ 0.81 ========= ========= ========= ========= ========= Diluted $ 0.46 $ 0.45 $ 0.39 $ 0.91 $ 0.80 ========= ========= ========= ========= ========= Shares used in the calculation of Non-GAAP earnings per share: Basic 223,494 224,093 299,724 223,137 300,385 ========= ========= ========= ========= ========= Diluted 225,647 (2) 227,591 (2) 303,005 (2) 226,075 (3) 303,845 (3) ========= ========= ========= ========= =========
1) Linear began expensing stock options in the first quarter of fiscal year 2006.
2) Excludes 1,472, 1,639 and 1,954 shares for the three months ended December 30, 2007, September 30, 2007 and December 31, 2006, respectively, to conform diluted outstanding shares calculated under FAS123R to diluted shares calculated under prior accounting standards.
3) Excludes 1,612 and 1,929 shares for the six months ended December 30, 2007 and December 31, 2006, respectively, to conform diluted outstanding shares calculated under FAS123R to diluted shares calculated under prior accounting standards.
The Company's non-GAAP measures set forth above exclude charges related to stock-based compensation. The Company's management uses non-GAAP net income and non-GAAP net income per diluted share to evaluate the Company's current operating results and financial results and to compare them against historical financial results. The Company excludes stock-based compensation expenses and the related tax effects primarily because they are significant non-cash expense estimates which management separates for consideration when evaluating and managing business operations.
In addition, the Company believes that providing investors with these non-GAAP measurements enhances their ability to compare the Company's business against that of its many competitors who employ and disclose similar non-GAAP measures. This financial measure may be different from non-GAAP methods of accounting and reporting used by the Company's competitors to the extent their non-GAAP measures include other items. The presentation of this additional information should not be considered a substitute for net income or net income per diluted share prepared in accordance with GAAP.
Contact:
Linear Technology Corporation
Paul Coghlan, 408-432-1900
Vice
President, Finance