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News Release

In Detail

Lattice Semiconductor Corporation
Consolidated Statement of Operations
(in thousands, except per share data)
(unaudited)
	Three months ended			Six months ended
Description	June 30, 2003	Mar. 31, 2003	June 30, 2002	June 30, 2003	June 30, 2002
Revenue	$58,178	$58,311	$56,466	$116,489	$115,344
Costs and expenses:
Costs of products sold	23,289	23,208	22,492	46,497	46,098
Research and development	21,702	21,832	21,078	43,534	42,463
Selling, general and administrative	12,614	12,483	12,220	25,097	24,078
In-process research and development (1)	--	--	--	--	24,200
Amortization of intangible assets (2)(3)	18,687	21,114	17,923	39,801	36,546
Total costs and expenses	76,292	78,637	73,713	154,929	173,385
Loss from operations	(18,114)	(20,326)	(17,247)	(38,440)	(58,041)
Other (expense) income, net	(1,365)	1,491	3,078	126	1,177
Loss before benefit for income taxes	(19,479)	(18,835)	(14,169)	(38,314)	(56,864)
Benefit for income taxes	(2,554)	--	(6,022)	(2,554)	(23,100)
Net loss	($16,925)	($18,835)	($8,147)	($35,760)	($33,764)
Basic net loss per share	($0.15)	($0.17)	($0.07)	($0.32)	($0.31)
Diluted net loss per share	($0.15)	($0.17)	($0.07)	($0.32)	($0.31)
Shares used in per share calculations:
Basic	111,507	111,390	109,684	111,473	109,619
Diluted (4)	111,507	111,390	109,684	111,473	109,619

Notes:

(1) Represents write-off of in-process research and development in conjunction with the January 18, 2002 acquisition of the FPGA business of Agere Systems, Inc.

(2) Intangible assets subject to amortization aggregate $120.3 million, net, at June 30, 2003 and relate to the acquisition of Cerdelinx Technologies, Inc. on August 26, 2002, the acquisition of the FPGA business of Agere Systems, Inc. on January 18, 2002, the acquisition of Vantis Corporation on June 16, 1999 and the acquisition of Integrated Intellectual Property Inc. on March 16, 2001. These intangible assets are amortized to expense generally over three to seven years on a straight-line basis.

(3) Includes $0.8 million, $3.3 million and $0.6 million of deferred stock compensation expense for the quarters ended June 30, 2003, March 31, 2003 and June 30, 2002, respectively, and $4.1 million and $1.1 million of deferred stock compensation expense for the six months ended June 30, 2003 and June 30, 2002, respectively, attributable to Research and Development activities.

(4) For all periods presented, the computation of diluted net loss per share excludes the effect of stock options and our convertible notes as they are antidilutive.

Lattice Semiconductor Corporation
Consolidated Balance Sheet
(in thousands)
(unaudited)
Description	June 30, 2003	Dec. 31, 2002
Assets
Current assets:
Cash and short-term investments	$470,178	$276,880
Accounts receivable, net	28,372	26,374
Inventories	48,283	56,241
Other current assets	11,476	35,033
Total current assets	558,309	394,528
Property and equipment, net	58,978	62,786
Foundry investments, advances and other assets	108,574	104,507
Goodwill and other intangible assets, net (1)	343,909	379,442
	$1,069,770	$941,263
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and other accrued
liabilities	$31,238	$33,597
Deferred income on sales to distributors	8,763	11,983
Income taxes payable	--	142
Total current liabilities	40,001	45,722
4 3/4% Convertible notes due in 2006	172,304	208,061
Zero Coupon Convertible notes due in 2010	200,000	--
Other long-term liabilities	25,704	26,345
	398,008	234,406
Stockholders' equity	631,761	661,135
	$1,069,770	$941,263

Note:

(1) At June 30, 2003, includes approximately $10.4 million of other intangible assets, net, recorded in the September 2002 quarter in connection with the August 26, 2002 acquisition of Cerdelinx Technologies, Inc. Also includes $142.5 million in Goodwill and $61.1 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., and approximately $81.1 million in Goodwill and $48.8 million of other intangible assets, net, related to previous acquisitions. The other intangible assets will be amortized to expense generally over three to seven years. Goodwill is not amortized effective with the March 2002 quarter.