CREE, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts and percentages) (unaudited) Three Months Ended March 30, 2014 Revenue, net $ 405,259 Nine Months Ended March 31, 2013 $ 348,934 March 30, 2014 $ 1,211,351 March 31, 2013 $ 1,010,973 Cost of revenue, net 255,265 215,924 754,822 628,438 Gross profit 149,994 133,010 456,529 382,535 Gross margin percentage 37.0% 38.1% 37.7% 37.8% Operating expenses: Research and development 46,626 39,036 132,805 116,524 Sales, general and administrative 65,368 62,140 197,589 174,885 7,257 7,719 21,800 23,108 Amortization of acquisition-related intangibles Loss on disposal or impairment of long-lived assets Total operating expenses Operating income 364 863 1,781 2,385 119,615 109,758 353,975 316,902 30,379 23,252 102,554 65,633 Operating income percentage 7.5% 6.7% 8.5% 6.5% Non-operating income, net 3,152 2,512 9,373 8,378 Income before income taxes 33,531 25,764 111,927 74,011 Income tax expense $ 5,367 28,164 $ 3,607 22,157 $ 17,585 94,342 $ 15,328 58,683 $ 0.23 $ 0.19 $ 0.77 $ 0.50 Net income Earnings per share: Diluted Weighted average shares used in per share calculation: 123,695 5 118,608 123,140 116,768