Marvell Technology Group Ltd.

Reconciliations from GAAP to Non-GAAP

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended

May 2,

January 31,

May 3,

2015

2015

2014

GAAP net income

$   14,090

$      81,693

$   99,479

Share-based compensation

33,221

37,963

29,969

Amortization and write-off of acquired intangible assets

3,493

4,025

7,614

Restructuring and other exit-related costs

592

3,412

5,088

Litigation matters (a)

(1,700)

-

2,000

Other (b)

21,382

3,764

-

Non-GAAP net income

$   71,078

$    130,857

$ 144,150

GAAP weighted average shares - diluted

527,167

522,112

520,751

Non-GAAP adjustment

7,993

10,688

9,625

Non-GAAP weighted average shares diluted (c)

535,160

532,800

530,376

GAAP diluted net income per share

$       0.03

$          0.16

$       0.19

Non-GAAP diluted net income per share 

$       0.13

$          0.25

$       0.27

GAAP gross profit:

$ 373,135

$    440,321

$ 463,970

Share-based compensation

1,547

2,006

2,299

Amortization of acquired intangible assets

925

925

925

Litigation matters (a)

(1,700)

-

-

Other (b)

-

1,000

-

Non-GAAP gross profit

$ 373,907

$    444,252

$ 467,194

GAAP gross margin

51.5%

51.4%

48.4%

Share-based compensation

0.2%

0.2%

0.3%

Amortization of acquired intangible assets

0.1%

0.1%

0.1%

Litigation matters (a)

-0.2%

-

-

Other (b)

-

0.1%

-

Non-GAAP gross margin

51.6%

51.8%

48.8%

GAAP research and development:

$ 280,114

$    285,497

$ 295,363

Share-based compensation

(24,781)

(25,590)

(20,368)

Restructuring and other exit-related costs

-

(67)

(4,682)

Non-GAAP research and development

$ 255,333

$    259,840

$ 270,313

GAAP selling and marketing:

$   36,174

$      37,235

$   38,358

Share-based compensation

(2,577)

(3,069)

(2,928)

Restructuring and other exit-related costs

-

-

(48)

Non-GAAP selling and marketing

$   33,597

$      34,166

$   35,382

GAAP general and administrative:

$   41,027

$      34,651

$   30,573

Share-based compensation

(4,316)

(7,298)

(4,374)

Restructuring and other exit-related costs

(592)

(3,345)

(358)

Litigation matters (a)

-

-

(2,000)

Other (b)

(18,302)

(2,764)

-

Non-GAAP general and administrative

$   17,817

$      21,244

$   23,841

GAAP provision (benefit) for income taxes

$     4,329

$        2,527

$   (4,567)

Other (b)

(3,080)

-

-

Non-GAAP provision (benefit) for income taxes

$ 1,249

$ 2,527

$ (4,567)

(a) 

The amounts recorded do not relate to Marvell's litigation with Carnegie Mellon University. 

(b)

Other costs included in general and administrative expenses for the three months ended May 2, 2015 includes a cash payment of $15.4 million to Dr. Sehat Sutardja, the Company's Chief Executive Officer (See "Note 15 - Subsequent Events" in the Notes to the Consolidated Financial Statements set forth in Part II, Item 8 of the Company's Annual Report on Form 10-K for fiscal 2015). Other costs included in the provision for income taxes for the three months ended May 2, 2015 includes the corporate income tax effect of the $15.4 million cash payment. Other costs for all periods presented also includes costs associated with the surety bond to appeal the Carnegie Mellon University judgment.

(c) 

For purposes of calculating non-GAAP diluted net income per share, the GAAP diluted weighted average shares outstanding is adjusted to exclude the potential benefits of share-based compensation costs expected to be incurred in future periods but not yet recognized in the financial statements.