CREE, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts and percentages) (unaudited) Revenue, net Cost of revenue, net Gross profit Gross margin percentage $ Operating expenses: Research and development Sales, general and administrative Amortization or impairment of acquisitionrelated intangibles Loss on disposal or impairment of long-lived assets Total operating expenses Three Months Ended June 29, June 30, 2014 2013 436,290 $ 375,009 $ 274,024 234,284 162,266 140,725 37.2 % 37.5 % Year Ended June 29, June 30, 2014 2013 1,647,641 $ 1,385,982 1,028,846 862,722 618,795 523,260 37.6 % 37.8 % 48,577 70,871 39,365 61,696 181,382 268,460 155,889 236,581 10,188 7,715 31,988 30,823 909 130,545 1,088 109,864 2,690 484,520 3,473 426,766 Operating income Operating income percentage 31,721 7.3 % 30,861 8.2 % 134,275 8.1 % Non-operating income, net Income from operations before income taxes Income tax expense Net income $ 3,922 35,643 5,794 29,849 $ 2,685 33,546 5,304 28,242 $ 13,295 147,570 23,379 124,191 $ 11,063 107,557 20,632 86,925 Diluted earnings per share $ 0.24 $ 0.23 $ 1.01 $ 0.74 Shares used in diluted per share calculation 122,043 5 121,081 122,914 96,494 7.0 % 117,979