News Release

In Detail

Consolodated Financial Statements

Lattice Semiconductor Corporation

Consolidated Operations Information- Proforma Earnings (1)

(in thousands, except per share data)

(unaudited)

	Three months ended
Description	June 30, 2002	Mar. 31, 2002	June 30, 2001	June 30, 2002	June 30, 2001
Revenue	$56,466	$58,878	$74,082	$115,344	$185,180
Costs and expenses:
Costs of products sold	22,492	23,606	27,771	46,098	69,681
Research and development	21,078	21,385	18,126	42,463	36,315
Selling, general and administrative	12,220	11,858	13,366	24,078	30,767
Total costs and expenses	55,790	56,849	59,263	112,639	136,763
Income from operations	676	2,029	14,819	2,705	48,417
Other income (expense), net	3,078	(1,901)	1,383	1,177	4,334
Income before provision for income taxes	3,754	128	16,202	3,882	52,751
Provision for income taxes	976	33	5,346	1,009	17,406
Tax shield	4,250	3,923	2,767	8,173	5,534
Proforma earnings	$7,028	$4,018	$13,623	$11,046	$40,879
Diluted proforma earnings per share (2)	$0.06	$0.04	$0.12	$0.10	$0.36
Shares used in calculations	110,991	112,971	112,482	111,978	124,828

Notes:

(1) This table presents operating information which is consistent with the information reported by First Call, IBES and Zacks for Lattice Semiconductor Corporation. A Statement of Operations based on GAAP is attached as Appendix 1. A reconciliation of Proforma earnings to GAAP on a per share basis is attached as Appendix 2.

(2) For the six months ended June 30, 2001, the computation of diluted proforma earnings per share includes the effect of stock options and $260 million of convertible notes. Diluted proforma earnings are adjusted to exclude interest expense and debt issuance cost amortization (net of tax) of $4.665 million for this period. Diluted weighted-average shares outstanding include the dilutive effect of stock options and approximately 12.548 million shares issuable on the assumed conversion of the notes. For all other periods presented, diluted proforma earnings per share only includes the effect of stock options as the convertible notes are antidilutive.

Lattice Semiconductor Corporation

Consolidated Balance Sheet

(in thousands)

(unaudited)

Description	June 30, 2002	Dec 31, 2001
Assets
Current assets:
Cash and short-term investments	$308,189	$531,566
Accounts receivable, net	28,679	19,452
Inventories	63,590	64,926
Other current assets	91,341	60,338
Total current assets	491,799	676,282
Property and equipment, net	64,197	63,222
Foundry investments, advances and other assets	88,989	162,418
Goodwill and other intangible assets, net (1)	402,066	206,468
Deferred tax assets	80,078	65,590
	$1,127,129	$1,173,980
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and other accrued
liabilities	$40,377	$38,255
Deferred income on sales to distributors	17,310	18,103
Income taxes payable	2,042	2,751
Total current liabilities	59,729	59,109
4 3/4% Convertible notes due in 2006	250,750	260,000
Other long-term liabilities	15,879	15,101
	266,629	275,101
Stockholders' equity	800,771	839,770
	$1,127,129	$1,173,980

(1) Includes approximately $142.2 million in Goodwill and $78.9 million of other intangible assets, net, recorded in the March 2002 quarter in connection with the January 18, 2002 acquisition of the FPGA business of Agere Systems, Inc. Also includes approximately $81.3 million in Goodwill and $99.6 million of other intangible assets, net, related to previous acquisitions. The other intangible assets will be amortized generally over three to seven years. Goodwill is not amortized effective with the March 2002 quarter.