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RF MICRO DEVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

Three Months Ended

January 1,
2011

January 2,
2010

Total revenue

$

278,794

$

250,271

Costs and expenses:

  Cost of goods sold  

175,705

159,081

  Research and development

33,920

32,997

  Marketing and selling

14,621

13,821

  General and administrative

11,036

9,496

  Other operating expense

192

1,288

  Total costs and expenses

235,474

216,683

Operating income

43,320

33,588

Other expense

(3,034)

(5,828)

Income before income taxes

$

40,286

$

27,760

Income tax expense

(3,600)

(2,832)

Net income

$

36,686

$

24,928

Net income per share, diluted

$

0.13

$

0.09

Weighted average outstanding diluted shares

284,152

285,907

RF MICRO DEVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

Nine Months Ended

January 1,
2011

January 2,
2010

Total revenue

$

838,430

$

717,568

Costs and expenses:

  Cost of goods sold  

524,280

460,827

  Research and development

105,626

103,477

  Marketing and selling

44,083

42,131

  General and administrative

36,941

37,429

  Other operating expense

1,229

3,937

  Total costs and expenses

712,159

647,801

Operating income

126,271

69,767

Other expense

(11,851)

(16,073)

Income before income taxes

$

114,420

$

53,694

Income tax expense

(13,996)

(9,403)

Net income

$

100,424

$

44,291

Net income per share, diluted

$

0.36

$

0.16

Weighted average outstanding diluted shares

279,493

293,787

RF MICRO DEVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(In thousands, except percentages and per share data)

(Unaudited)

Three Months Ended

January 1,
2011

October 2,
2010

January 2,
2010

GAAP operating income

$

43,320

$

42,392

$

33,588

Share-based compensation expense

5,615

9,135

5,322

Amortization of intangible assets

4,614

4,615

4,751

Restructuring charges related to fiscal 2009 strategic
        restructuring and adverse macroeconomic conditions

107

110

585

Other expenses (restructuring, loss on PP&E, integration,
       start-up costs and other non-cash expenses)

347

881

330

Non-GAAP operating income

54,003

57,133

44,576

GAAP net income

36,686

35,396

24,928

Share-based compensation expense

5,615

9,135

5,322

Amortization of intangible assets

4,614

4,615

4,751

Restructuring charges related to fiscal 2009 strategic
       restructuring and adverse macroeconomic conditions

107

110

585

Other expenses (restructuring, loss on PP&E, integration,
       start-up costs, and other non-cash expenses)

347

881

330

Loss on retirement of convertible subordinated notes

-

1,646

408

Non-cash interest expense on convertible subordinated notes

3,046

3,262

4,335

Income from equity investment

(34)

(313)

-

Tax adjustments

2,257

(2,415)

(1,881)

Non-GAAP net income

52,638

52,317

38,778

Plus:  Income impact of assumed conversions for interest on
   1.50% convertible notes      

-

-

361

Non-GAAP net income plus assumed conversion of notes-
   Numerator for diluted income per share

$

52,638

$

52,317

$

39,139

GAAP and Non-GAAP weighted average outstanding diluted
   shares

284,152

277,458

285,907

Non-GAAP net income per share, diluted

$

0.19

$

0.19

$

0.14

Three Months Ended

January 1, 2011

October 2, 2010

January 2, 2010

GAAP gross margin

$

103,089

37.0%

$

108,655

38.0%

$

91,190

36.4%

Adjustment for intangible amortization

3,515

1.2%

3,514

1.2%

3,651

1.5%

Adjustment for share-based compensation

1,065

0.4%

1,248

0.5%

939

0.4%

Other expenses (restructuring, integration
        and other non-cash expenses)

262

0.1%

262

0.1%

384

0.1%

Non-GAAP gross margin

$

107,931

38.7%

$

113,679

39.8%

$

96,164

38.4%

RF MICRO DEVICES, INC. AND SUBSIDIARIES

ADDITIONAL SELECTED NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands, except percentages)

(Unaudited)

Three Months Ended

Non-GAAP Operating Income

January 1, 2011

(as a percentage of sales)

GAAP operating income

15.5%

Share-based compensation expense

2.0%

Amortization of intangible assets

1.7%

Restructuring charges related to fiscal 2009 strategic restructuring and adverse
       macroeconomic conditions

0.1%

Other expenses (restructuring, loss on PP&E, integration, start-up costs and other
        non-cash expenses)

0.1%

Non-GAAP operating income

19.4%

Three Months Ended

January 1, 2011

October 2, 2010

January 2, 2010

GAAP research and development expense

$

33,920

$

35,604

$

32,997

Less:

Share-based compensation expense

1,405

1,392

1,481

Amortization of intangible assets

13

14

13

Other expenses (restructuring, integration)

-

-

18

Non-GAAP research and development expense

$

32,502

$

34,198

$

31,485

Three Months Ended

January 1, 2011

October 2, 2010

January 2, 2010

GAAP marketing and selling expense

$

14,621

$

15,094

$

13,821

Less:

Share-based compensation expense

1,255

1,493

1,298

Amortization of intangible assets

1,086

1,087

1,087

Other expenses (restructuring, integration)

-

-

8

Non-GAAP marketing and selling expense

$

12,280

$

12,514

$

11,428

Three Months Ended

January 1, 2011

October 2, 2010

January 2, 2010

GAAP general and administrative expense

$

11,036

$

14,836

$

9,496

Less:

Share-based compensation expense

1,890

5,002

1,604

Other expenses (restructuring, integration)

-

-

(783)

Non-GAAP general and administrative expense

$

9,146

$

9,834

$

8,675

RF MICRO DEVICES, INC. AND SUBSIDIARIES

ADDITIONAL SELECTED NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(Unaudited)

Free Cash Flow (1)

Three Months Ended

January 1, 2011

(In millions)

Net cash provided by operating activities

$

63.3

Purchases of property and equipment

(9.1)

Free Cash Flow

$

54.2

(1)   Free Cash Flow is calculated as net cash provided by operating activities minus property
and equipment expenditures.

EBITDA (2)

Three Months Ended

January 1, 2011

(In millions)

Net Income

$

36.7

  Interest

3.7

  Income Tax Expense

3.6

  Depreciation

15.5

  Amortization

4.6

EBITDA

$

64.1

(2)  EBITDA is calculated by adjusting net income for interest expense and interest income,
income tax expense, depreciation and intangible amortization.

RF MICRO DEVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

January 1,
2011

April 3,
2010

ASSETS

Current assets:

Cash and cash equivalents

$

158,386

$

104,778

Restricted cash and trading security investments

415

17,698

Short-term investments

145,903

134,882

Accounts receivable, net

138,753

108,219

Inventories

133,440

122,509

Other current assets

50,676

60,738

Total current assets

627,573

548,824

Property and equipment, net

220,252

247,085

Intangible assets, net

88,299

102,169

Goodwill

95,628

95,628

Long-term investments

2,724

2,175

Other non-current assets

18,876

18,127

Total assets

$

1,053,352

$

1,014,008

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued liabilities

141,247

124,253

Current portion of long-term debt

5,169

15,053

Other short-term liabilities, net

227

13,427

Total current liabilities

146,643

152,733

Long-term debt, net

207,368

289,837

Other long-term liabilities

40,977

41,354

Total liabilities

394,988

483,924

Shareholders' equity

658,364

530,084

Total liabilities and shareholders' equity

$

1,053,352

$

1,014,008