Altera Announces Third Quarter Results

Product Category Description

New Products include the Arria^® 10, Stratix^® V, Stratix IV, Arria V, Arria II, Cyclone^®V, Cyclone IV, MAX^®10, MAX V, HardCopy^® IV devices and Enpirion PowerSoCs.
Mainstream Products include the Stratix III, Cyclone III, MAX II and HardCopy III devices.
Mature and Other Products include the Stratix II, Stratix, Arria GX, Cyclone II, Cyclone, MAX 3000A, MAX 7000, MAX 7000A, MAX 7000B, MAX 7000S, MAX 9000, HardCopy II, HardCopy, FLEX^® series, APEX™ series, Mercury™, Excalibur™ devices, configuration and other devices, intellectual property cores, and software and other tools.

Forward-Looking Statements

Statements in this press release that are not historical are "forward-looking statements" as the term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally written in the future tense and/or preceded by words such as "will," "expects," "anticipates," or other words that imply or predict a future state. Forward-looking statements include, but are not limited to, statements regarding data center application growth potential. Investors are cautioned that all forward-looking statements in this release involve risks and uncertainty that can cause actual results to differ materially from those currently anticipated due to a number of factors, including without limitation, changing global economic conditions and other risk factors discussed in documents filed by the company with the Securities and Exchange Commission (SEC) from time to time. Copies of Altera's SEC filings are posted on the company's website and are available from the company without charge. Forward-looking statements are made as of the date of this release, and, except as required by law, the company does not undertake an obligation to update its forward-looking statements to reflect future events or circumstances.

About Altera

Altera^® programmable solutions enable designers of electronic systems to rapidly and cost effectively innovate, differentiate and win in their markets. Altera offers FPGA, SoC, CPLD products, and complementary technologies, such as power solutions, to provide high-value solutions to customers worldwide. Visit www.altera.com.

ALTERA, ARRIA, CYCLONE, ENPIRION, MAX, MEGACORE, NIOS, QUARTUS and STRATIX words and logos are trademarks of Altera Corporation and registered in the U.S. Patent and Trademark Office and in other countries. All other words and logos identified as trademarks or service marks are the property of their respective holders as described at www.altera.com/legal.

ALTERA CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)


	Three Months Ended									Nine Months Ended
(In thousands, except per share amounts)	September 25, 2015			June 26, 2015			September 26, 2014			September 25, 2015			September 26, 2014

Net sales	$	399,567		$	414,162		$	499,606		$	1,249,214		$	1,452,216
Cost of sales	133,667			126,590			166,019			416,520			480,279
Gross margin	265,900			287,572			333,587			832,694			971,937
Operating expense
Research and development expense	100,481			105,345			112,078			309,057			310,856
Selling, general, and administrative expense	74,745			75,011			77,724			220,262			231,205
Amortization of acquisition-related intangible assets	2,491			2,427			2,465			7,382			7,394
Merger expenses	10,421			18,458			—			28,879			—
Total operating expense	188,138			201,241			192,267			565,580			549,455
Operating margin ⁽²⁾	77,762			86,331			141,320			267,114			422,482
Compensation (benefit)/expense — deferred compensation plan	(4,468)			2,732			(487)			(1,709)			4,093
Loss/(gain) on deferred compensation plan securities	4,468			(2,732)			487			1,709			(4,093)
Interest income and other	(9,590)			(8,495)			(4,558)			(24,681)			(18,362)
Gain reclassified from other comprehensive income	(1,644)			(1,463)			(59)			(5,613)			(150)
Interest expense	10,772			10,859			10,774			32,039			32,139
Income before income taxes	78,224			85,430			135,163			265,369			408,855
Income tax expense	16,706			15,091			17,154			38,660			47,328
Net income	61,518			70,339			118,009			226,709			361,527

Other comprehensive income/(loss):
Unrealized gain/(loss) on investments:
Unrealized holding gain/(loss) on investments arising during period, net of tax of $190, ($460), ($6), ($228) and $41	13,058			(24,805)			(4,929)			5,038			22,102
Less: Reclassification adjustments for gain on investments included in net income, net of tax of ($1), $9, $11, $15 and $21	(1,644)			(1,454)			(48)			(5,598)			(129)
Other comprehensive income/(loss)	11,414			(26,259)			(4,977)			(560)			21,973
Comprehensive income	$	72,932		$	44,080		$	113,032		$	226,149		$	383,500

Net income per share:
Basic	$	0.20		$	0.23		$	0.38		$	0.75		$	1.16
Diluted	$	0.20		$	0.23		$	0.38		$	0.74		$	1.15

Shares used in computing per share amounts:
Basic	302,707			301,799			308,215			301,950			311,853
Diluted	305,337			304,604			310,184			304,421			314,130

Dividends per common share	$	0.18		$	0.18		$	0.18		$	0.54		$	0.48

Tax rate	21.4		%	17.7		%	12.7		%	14.6		%	11.6		%
% of Net sales:
Gross margin	66.5		%	69.4		%	66.8		%	66.7		%	66.9		%
Research and development ⁽¹⁾	25.8		%	26.0		%	22.9		%	25.3		%	21.9		%
Selling, general, and administrative	18.7		%	18.1		%	15.6		%	17.6		%	15.9		%
Operating margin ⁽²⁾	19.5		%	20.8		%	28.3		%	21.4		%	29.1		%
Net income	15.4		%	17.0		%	23.6		%	18.1		%	24.9		%

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