ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES

(Unaudited)

Three Months Ended

December 26, 2020

September 26, 2020

December 28, 2019

(in thousands, except per share data)

Reconciliation of GAAP gross profit to GAAP gross profit excluding special items:

GAAP gross profit

$                     416,422

$                      417,014

$                     360,524

GAAP gross profit %

66.3%

67.3%

65.4%

Special items:

Intangible asset amortization

5,569

4,363

3,111

Merger-related expenses ⁽¹⁾

1,059

1,335

-

Cost of COVID-19 response programs

565

938

-

 Total special items 

7,193

6,636

3,111

 GAAP gross profit excluding special items 

$                     423,615

$                      423,650

$                     363,635

 GAAP gross profit % excluding special items 

67.4%

68.4%

66.0%

Reconciliation of GAAP operating expenses to GAAP operating expenses excluding special items:

GAAP operating expenses

$                     202,757

$                      215,580

$                     191,468

Special items:

Merger-related expenses ⁽¹⁾

4,750

6,607

-

Intangible asset amortization

943

918

756

Severance and restructuring

3,327

8,813

2,728

Other operating expenses (income), net ⁽¹⁾

3,531

7,428

(1)

 Total special items 

23,766

3,483

 GAAP operating expenses excluding special items 

$                      191,814

$                     187,985

Reconciliation of GAAP net income to GAAP net income excluding special items:

GAAP net income

$                     183,945

$                      169,514

$                     146,050

Special items:

Intangible asset amortization

6,512

5,281

3,867

Merger-related expenses ⁽¹⁾

5,809

7,942

-

Cost of COVID-19 response programs

565

938

-

Severance and restructuring

3,327

8,813

2,728

Other operating expenses (income), net ⁽¹⁾

3,531

7,428

(1)

Interest and other expense (income), net

(5,131)

(535)

(1,230)

Pre-tax total special items

14,613

29,867

5,364

Other income tax effects and adjustments ⁽²⁾

(1,616)

(4,272)

317

GAAP net income excluding special items

$                     196,942

$                      195,109

$                     151,731

GAAP net income per share excluding special items:

Basic

$                           0.74

$                            0.73

$                           0.56

Diluted

$                           0.73

$                            0.72

$                           0.56

Shares used in the calculation of earnings per share excluding special items:

Basic

267,299

266,831

270,330

Diluted

270,792

269,529

273,269

(1) Includes ADI merger-related expenses such as accelerated stock-based compensation expense resulting from the acceleration of certain RSAs and RSUs, and other legal and professional services.

(2) Includes tax effect of pre-tax special items and miscellaneous tax adjustments.