Altera Reports First Quarter Results.

Business Editors

SAN JOSE, Calif.--(BUSINESS WIRE)--April 22, 2002

Altera Corporation (Nasdaq: ALTR) today announced first quarter sales of $172.0 million, ahead of First Call estimates of $168.5 million. First quarter sales were up 6% from the fourth quarter of 2001 and down 40% versus the first quarter of 2001. Sales of the company's new products grew 22% sequentially, and sales of mainstream products improved 10%.

First quarter net income was $19.0 million, $0.05 per diluted share, also above First Call estimates of $0.04 per share. First quarter net income compares to a net loss of $34.4 million, $0.09 per diluted share, last quarter and net income of $63.0 million, $0.16 per diluted share, in the first quarter of 2001.

Including March stock transactions that settled in April, Altera repurchased 750,000 shares of its common stock during the quarter at a cost of $15.4 million. Altera ended the quarter with an $899.4 million cash position.

"The quarter's top line improvement reflects a sharp increase in new product sales," said John Daane, president and CEO. "Altera's R&D commitment is paying off with a steady stream of innovative, first-to-market new products introduced during the past several quarters. We have just announced the Stratix(TM) device family --- the industry's fastest, most powerful programmable logic devices. We believe the Stratix revenue growth ramp will set new Altera records, add to our present design win momentum, and drive increasing Altera market share."

Altera continued to enhance its leadership position in system-on-a-programmable-chip (SOPC) solutions:

-- In February, Altera announced the Stratix device family that sets new
standards in performance for programmable logic devices. Stratix devices
incorporate significant advances in memory, processing power and I/O
flexibility to meet the needs of bandwidth-hungry designs. The new Stratix
architecture delivers on average 40% faster performance than current Altera
devices. In addition, Stratix devices offer three times more memory, and
greater memory flexibility, than any other programmable logic device on the
market. Utilizing a 0.13-micron process and offering up to 114,000 logic
elements, Stratix devices provide unmatched density and the industry's only
high-performance digital signal processing (DSP) blocks for computationally
demanding applications. Customers will be able to convert higher density
Stratix devices to Altera HardCopy(TM)devices, providing a seamless migration
path for higher volume, cost sensitive applications. Customers are already
creating Stratix designs using Altera's latest Quartus(R)II development
software, delivered initially to more than 100 customers in November 2001 and
broadly released in January. This design activity is expected to drive demand
for Stratix devices, which are scheduled to begin shipping later in the second
quarter.

-- With all of its first generation ARM(R)-based Excalibur(TM) devices now
shipping, and broad market acceptance of the Nios(TM)soft-core processor,
Altera is now the only PLD vendor delivering complete embedded processor
solutions that include development kits, software development tools, hardware
development tools and seamless intellectual property (IP) integration.
Excalibur devices incorporate the peripherals and RAM necessary to fully
implement embedded processor functionality without forcing the customer to
consume device logic or other off-chip resources. The efficiency gained from
this unique Altera approach creates a distinct Altera competitive advantage.
The Nios soft-core processor, available since June 2000, now has an installed
base of more than 6,000 users worldwide and is the de facto industry standard
for soft-core PLD processors.

-- First introduced in mid-2000 to support the design of Nios soft-core
processors, Altera's SOPC Builder has been steadily upgraded and offers the
quickest and easiest way to combine system building blocks into a complex
design implemented in Altera's high-density programmable devices. With SOPC
Builder, users can select and parameterize IP cores from an extensive drop-down
list of communication, DSP, microprocessor and bus interface cores, as well as
incorporate their own IP. SOPC Builder automates the tedious task of defining,
parameterizing and linking IP cores, including multiple embedded processors.
SOPC Builder, by giving designers the ability to turn their concepts into
systems in minutes, further extends Altera's leadership in system integration
tools.

Conference Call and Quarterly Update:

A conference call will be held today at 2:00 p.m. Pacific Time to discuss the quarter's results and management's outlook for the second quarter. The webcast and subsequent replay will be available on the company's web site at http://www.altera.com. A telephonic replay of the call may be accessed later in the day by calling [phone] and referencing confirmation code 258712. The telephonic replay will be available for two weeks following the live call.

Altera's second quarter business update will be made available after the market close on June 5 and will be posted on the company's web site. Those who do not have access to the Internet may contact Altera's investor relations department directly at [phone].

Forward-Looking Statements

Statements in this press release that are not historical are "forward-looking statements," as the term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally written in the future tense and/or preceded by words such as "will", "expects", or "anticipation" or words that imply or predict a future state. Investors are cautioned that all forward-looking statements in this release involve risks and uncertainty which can cause actual results to differ from those currently anticipated, due to a number of factors, including without limitation, the risk that future performance is dependent on the design performance of software and other tools, customer business environment, Altera's ability to meet product introduction schedules, market acceptance of the company's products, the rate of growth of the company's new products and in particular the Stratix device family, as well as changing economic conditions, and other risk factors discussed in documents filed by the company with the Securities and Exchange Commission from time to time. Forward-looking statements are made as of the date of this release and, except as required by law, the company does not undertake an obligation to update its forward-looking statements to reflect future events or circumstances.

About Altera

Altera Corporation (Nasdaq: ALTR) is the world's pioneer of system-on-a-programmable-chip (SOPC) solutions. Combining programmable logic technology with software tools, intellectual property, and technical services, Altera provides high-value programmable solutions to approximately 14,000 customers worldwide. More information is available at http://www.altera.com.

Note to Editors: Altera, The Programmable Solutions Company, the stylized Altera logo, specific device designations and all other words that are identified as trademarks and/or service marks are, unless noted otherwise, the trademarks and service marks of Altera Corporation in the U.S. and other countries. ARM is a registered trademark of ARM Limited.

                          ALTERA CORPORATION
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
     COMPARISONS WITH AND WITHOUT INVENTORY AND SPECIAL CHARGES(1)
                 (In thousands, except per share data)
                              (Unaudited)

                                   THREE MONTHS ENDED
                    Mar. 31       Mar. 31       Dec. 31      Dec. 31
                      2002          2001          2001         2001
                  ---------     ---------     ---------     ---------
                                            (1) Pro Forma

*Pro forma
Net sales         $ 171,957     $ 287,438     $ 162,525     $ 162,525

Costs and expenses:
Cost of sales        68,583        99,195        63,865       102,265
Research and
 development         41,185        50,973        39,703        39,703
Selling, general
 and
 administrative      43,540        61,963        47,806        47,806
Restructuring and
 other special
 charges               --            --            --          16,841
                  ---------     ---------     ---------     ---------
Total costs
 and expenses       153,308       212,131       151,374       206,615
                  ---------     ---------     ---------     ---------

Income (loss)
 from operations     18,649        75,307        11,151       (44,090)
Interest and
 other income, net    7,047        14,681         6,801         6,801
                  ---------     ---------     ---------     ---------
Income (loss)
 before
 income taxes        25,696        89,988        17,952       (37,289)
Benefit from
 (provision for)
 income taxes        (6,681)      (26,996)       (5,386)        2,867
                  ---------     ---------     ---------     ---------
Net income (loss) $  19,015     $  62,992     $  12,566     $ (34,422)
                  =========     =========     =========     =========

Income (loss)
 per share:
   Basic          $    0.05     $    0.16     $    0.03     $   (0.09)
                  =========     =========     =========     =========
   Diluted        $    0.05     $    0.16     $    0.03     $   (0.09)
                  =========     =========     =========     =========
Shares used
 in computation:
   Basic            385,586       387,894       385,219       385,219
                  =========     =========     =========     =========
   Diluted          396,917       402,927       396,396       385,219
                  =========     =========     =========     =========

Tax rate               26.0%         30.0%         30.0%          7.7%
% of Sales:
   Gross margin        60.1%         65.5%         60.7%         37.1%
   Research and
    development        24.0%         17.7%         24.4%         24.4%
   Selling, general
    and
    administrative     25.3%         21.6%         29.4%         29.4%
   Income from
    operations         10.8%         26.2%          6.9%         --
   Net income          11.1%         21.9%          7.7%         --


(1) The three months ended Dec. 31, 2001 pro forma statement of
    operations excludes the effects of the inventory charge of $38.4
    million, other special charges of $16.8 million, and the related
    tax benefits of $8.3 million taken during the fourth quarter of
    2001.

Note: The company provides pro forma financial data as an
alternative for understanding its operating results. These
measures are not in compliance with Generally Accepted
Accounting Principles, and may be different from pro forma
measures used by other companies.

                          ALTERA CORPORATION
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                            (In thousands)
                              (Unaudited)

                                       Mar. 31        Dec. 31
                                         2002           2001
                                      ----------    ----------

Assets

Current assets:
  Cash and short-term investments     $  899,368    $  805,691
  Accounts receivable, net                62,910        33,931
  Inventories                             50,674        77,611
  Other assets                           133,998       212,115
                                      ----------    ----------
Total current assets                   1,146,950     1,129,348
Property and equipment, net              206,286       217,282
Investments and other assets              12,040        14,797
                                      ----------    ----------
                                      $1,365,276    $1,361,427
                                      ==========    ==========

Liabilities and Stockholders' Equity

Accounts payable and
 current liabilities                  $  110,902    $   99,182
Deferred income on
 sales to distributors                   124,962       147,745
                                      ----------    ----------
  Total current liabilities              235,864       246,927
Stockholders' equity                   1,129,412     1,114,500
                                      ----------    ----------
                                      $1,365,276    $1,361,427
                                      ==========    ==========


Key Ratios & Information

Current Assets/Current Liabilities           5:1           5:1
Liabilities/Equity                           1:5           1:5
Annualized Return on Equity(2)                 7%           11%
Quarterly Depreciation Expense, Net       11,972        13,356
Quarterly Capital Expenditures               976         8,112
Annualized Sales per Employee                356           417
Number of Employees                        1,873         1,987
Inventory MSOH(3): Altera                    2.2           3.6
Inventory MSOH(3): Distribution              1.8           2.2
Days Sales Outstanding                        33            19

(2) Calculated based on pro forma financial data for 2001
(3) MSOH: Months Supply On Hand


                          ALTERA CORPORATION
                            REVENUE SUMMARY

                                         Q-Q    Y-Y
                   Q1'02  Q4'01 Q1'01   Growth Growth
                    ----   ----   ----   ----   ----
Geography
---------
North America       44%    44%    47%     7%   -44%
                   ----   ----   ----
Europe              25%    22%    27%    19%   -46%
Japan               19%    21%    18%    -5%   -36%
Asia/Pacific        12%    13%     8%    -3%    -6%
                   ----   ----   ----
International       56%    56%    53%     5%   -37%
                   ----   ----   ----
Total              100%   100%   100%     6%   -40%
                   ====   ====   ====

Product Category
----------------
New                 20%    17%    10%    22%    19%
Mainstream          43%    41%    49%    10%   -48%
Mature & Other      37%    42%    41%    -5%   -45%
                   ----   ----   ----
Total              100%   100%   100%     6%   -40%
                   ====   ====   ====

Market Segment (4)
--------------
Communications      49%    50%            2%
Digital Consumer    11%    12%           -3%
Computer & Storage  15%    13%           25%
Industrial
 & Automotive       25%    25%            7%
                   ----   ----
Total              100%   100%            6%
                   ====   ====

Product Category Description
----------------------------

 Category                  Products

 New                       APEX 20KE, APEX 20KC, APEX II, MAX
                           7000B, ACEX 1K, Excalibur, Mercury,
                           HardCopy and Stratix families

 Mainstream                MAX 7000A, MAX 3000A, FLEX 6000, FLEX 10KA,
                           FLEX 10KE and APEX 20K families

 Mature & Other            Classic, MAX 7000, MAX 7000S,
                           MAX 9000, FLEX 8000, FLEX 10K families,
                           configuration and other devices, Tools and
                           intellectual property

(4) Effective 1/1/02 Altera adopted a new revenue classification
    methodology. For comparison purposes, revenue for the fourth
    quarter of 2001 was categorized using this new methodology.