Altera Announces First Quarter Results

SAN JOSE, Calif., April 23, 2015 -- Altera Corporation (NASDAQ: ALTR) today announced first quarter sales of $435.5 million, down 9 percent from the fourth quarter of 2014 and down 6 percent from the first quarter of 2014. First quarter net income was $94.9 million, $0.31 per diluted share, compared with net income of $111.1 million, $0.36 per diluted share, in the fourth quarter of 2014 and $116.5 million, $0.37 per diluted share, in the first quarter of 2014.

Cash flow from operating activities was $136.6 million. Altera repurchased approximately 1.6 million shares during the quarter at a cost of approximately $57.5 million.

Altera's board of directors has declared a quarterly cash dividend of $0.18 per share, to be paid on June 1, 2015 to shareholders of record on May 11, 2015.

"While we had anticipated a weak start to the year, the first quarter was more challenging than expected," said John Daane, president, chief executive officer, and chairman of the board. "There continues to be solid market acceptance of our Generation 10 devices, with record opportunities for our high-end 14 nm FinFET Stratix 10 FPGAs. The combination of our HyperFlex architecture and the FinFET manufacturing process delivers substantial competitive advantages and market expansion potential."

Recent accomplishments mark Altera's continuing progress:

• At this year's Mobile World Congress, Altera and China Mobile demonstrated jointly a Centralized/Coordinated/Cloud Radio Access Network (C-RAN) platform targeting the next generation of virtualized 5G wireless networks. This approach will dramatically improve the user experience, achieving much higher channel capacity and spectrum efficiency, reducing network power consumption, while supporting flexible and agile network deployments. C-RAN offers the potential for new network operator business models and support for numerous new end user 5G wireless network applications. This strategic collaboration, formally established between Altera and China Mobile Research Institute (CMRI) in 2014, has achieved a significant milestone with this innovative wireless network solution. To accelerate the development and deployment of such next-generation wireless networks, FPGA technologies play a key role in data processing acceleration, component connectivity, and front-haul data transportation in the C-RAN system.
• Altera has strengthened its leadership position in SoC FPGA products by shipping initial devices of its second-generation SoC family. These Arria^® 10 SoC devices are the industry's only programmable devices that combine ARM^® processors with a 20 nm FPGA fabric. Arria 10 SoCs bring across-the-board improvements to enable higher performing, lower power, and more feature rich embedded systems compared to previous generation SoC FPGAs. Arria 10 SoCs provide up to 50 percent higher performance and up to 40 percent lower power than the previous generation. Arria 10 SoCs are optimized to deliver the performance, power, security and cost requirements for next-generation embedded applications within wireless infrastructure, wireline communications, computer and storage, and broadcast equipment. Altera's SoC portfolio will also include a 3rd-generation 14 nm Stratix^® 10 SoC with a 64-bit quad-core ARM Cortex^TM-A53 processor for embedded developers that demand the highest performance and power efficiency.

SELECTED FIRST QUARTER RATIOS AND RELATED RESULTS

($ in thousands) Key Ratios & Information	March 27, 2015	December 31, 2014
Current Ratio	5:1	6:1
Liabilities/Equity	3:4	3:4
Quarterly Operating Cash Flows	$ 136,633	$150,778
TTM Return on Equity	13%	14%
Quarterly Depreciation Expense	$ 12,777	$12,099
Quarterly Capital Expenditures	$ 33,245	$9,836
Inventory MSOH (1): Altera	3.0	2.7
Inventory MSOH (1): Distribution	0.7	0.5
Cash Conversion Cycle (Days)	149	144
Turns	41%	41%
Book to Bill	<1.0	<1.0

Note (1): MSOH: Months Supply On Hand

ALTERA CORPORATION
NET SALES SUMMARY
(Unaudited)

	Three Months Ended			Quarterly Growth Rate
	March 27, 2015	December 31, 2014	March 28, 2014	Sequential Change	Year- Over-Year Change
Geography
Americas	17%	15%	15%	(1)%	4%
Asia Pacific	45%	41%	43%	(2)%	(1)%
EMEA	27%	30%	26%	(17)%	(3)%
Japan	11%	14%	16%	(26)%	(32)%
Net Sales	100%	100%	100%	(9)%	(6)%
Product Category
New	59%	59%	49%	(9)%	15%
Mainstream	19%	18%	23%	(5)%	(20)%
Mature and Other	22%	23%	28%	(14)%	(29)%
Net Sales	100%	100%	100%	(9)%	(6)%
Vertical Market
Telecom & Wireless	42%	42%	45%	(8)%	(12)%
Industrial Automation, Military & Automotive	21%	22%	22%	(13)%	(7)%
Networking, Computer & Storage	17%	16%	15%	(8)%	2%
Other	20%	20%	18%	(8)%	7%
Net Sales	100%	100%	100%	(9)%	(6)%
FPGAs and CPLDs
FPGA	84	84	83	(9)	(4)%
CPLD	8	8	9	(8)	(10)%
Other Products	8	8	8	(15)	(14)%
Net Sales	100	100	100	(9)	(6)%

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.

Business Outlook for the Second Quarter 2015

Sales and Income Statement

Sequential Sales	-4% to -8%
Gross Margin	66.5% - 67.5%
Research and Development (1)	$110 - $112 million
SG&A	$73 - $75 million
Other Income/Expense, Net (2)	Net expense of approximately $2 million
Tax Rate	12% - 14%
Diluted Share Count	Approximately 300 million
Turns	Mid 40's
Inventory MSOH	Approximately 4

Note (1): The business outlook for Research and Development expense includes amortization of acquisition-related intangible assets

Note (2): Other Income/Expense, Net includes Interest income and other and Interest expense in our consolidated statements of comprehensive income.

Vertical Market

Telecom & Wireless	Down
Industrial Automation, Military & Automotive	Up
Networking, Computer & Storage	Flat
Other	Down

First Quarter Earnings Conference Call

A conference call will be held today at 1:45 p.m. Pacific time to discuss the quarter's results and management's current business outlook. The web cast and subsequent replay will be available in the Investor Relations section of the company's website at www.altera.com. A telephonic replay of the call may be accessed later in the day by calling (719) 457-0820 and referencing confirmation code 258712. The telephonic replay will be available for two weeks following the live call.

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.