RocketChips

On November 9, 2000, we completed the acquisition of RocketChips, Inc., a privately held fabless semiconductor company. RocketChips is a developer of ultra-high-speed analog and mixed-signal communication ICs fabricated in submicron CMOS processes. These ICs are used in products created by system OEMs serving the networking, telecommunications and enterprise storage markets.

In connection with the acquisition, we issued approximately 2,806,000 shares of Common stock in exchange for all outstanding preferred and common stock of RocketChips and reserved approximately 807,000 additional shares of Common stock for issuance upon exercise of outstanding employee stock options of RocketChips. Of the approximately 2,806,000 shares issued, 2,619,000 shares were issued in fiscal 2001 and 187,000 shares were issued in fiscal 2002, depending on the timing of the submission of the RocketChips’ stock certificates in exchange for Xilinx certificates. Of the shares issued, approximately 380,000 shares of Xilinx’s Common stock were held in escrow for a period of one year following the acquisition for the purpose of providing a fund against which Xilinx could seek indemnification from former RocketChips stockholders for any breaches of representations, warranties or covenants under the Merger Agreement. The escrowed shares were all released from escrow in November 2001.

The acquisition was accounted for under the purchase method of accounting. The purchase price of RocketChips was allocated to the fair value of the specific tangible and intangible assets acquired and liabilities assumed from RocketChips pursuant to an independent valuation. The total purchase price for RocketChips was $291.2 million, consisting of $231.0 million of Xilinx common stock, $57.3 million of options to purchase Xilinx common stock and $2.8 million of acquisition related costs. Xilinx recorded a charge to operations upon consummation of the transaction for acquired in-process research and development of approximately $90.7 million. In addition, Xilinx recorded approximately $218.9 million of intangible assets, goodwill, and deferred compensation on the balance sheet, which resulted in amortization expense of approximately $51.4 million in fiscal 2002 and $22.4 million in fiscal 2001.

Deferred compensation recorded in connection with the acquisition represents the estimated intrinsic value of unvested RocketChips stock options assumed by Xilinx in the merger agreement for which employee service is required after the closing date of the merger in order for the options to vest. Deferred compensation is being amortized to expense over the remaining vesting period of the options.

Below is a table of the acquisition cost and amortization period of the intangible assets.

Deferred compensation	$  24.3		1 month to 4 years
Goodwill	140.5		5 years
Developed technology	6.6		5 years
Noncompete agreements	23.6		3 years
Patents	13.2		7 years
Other intangibles	10.7		2 to 3 years
Total	$218.9

Philips

We completed the acquisition of Philips Semiconductors’ line of low-power CPLDs on August 2, 1999. The total cost, including acquisition related fees, was approximately $22.8 million. The purchase price allocation, based on an independent appraisal, resulted in a $4.6 million write-off of acquired in-process research and development in the second quarter of fiscal 2000. The acquired in-process technology represented the appraised value of technologies in the development stage that had not yet reached technological feasibility and did not have alternative future uses.

Other

In addition to the transactions described above, we purchased other businesses in smaller transactions. The total amount allocated to goodwill and identified intangibles for these transactions was $15.4 million in fiscal 2001 (none in fiscal 2002), which represents a substantial majority of the consideration for these transactions.

As of March 31, 2002 and 2001, the gross and net amounts of intangible assets were as follows:

Goodwill–gross	$152,249		$152,249		3 to 5 years
Less accumulated amortization	51,525		15,872
Goodwill-net	100,724		136,377
Noncompete agreements–gross	23,600		23,600		3 years
Less accumulated amortization	11,144		3,278
Noncompete agreements–net	12,456		20,322
Patents-gross	15,141		15,141		7 years
Less accumulated amortization	4,341		1,154
Patents-net	10,800		13,987
Other intangibles–gross	39,701		49,484		2 to 5 years
Less accumulated amortization	29,007		21,559
Other intangibles–net	10,694		27,925
Total intangible assets–gross	230,691		240,474
Less accumulated amortization	96,017		41,863
Total intangible assets–net	$134,674		$198,611

Amortization expense for all intangible assets for fiscal year 2002, 2001 and 2000 was $49.0 million, $30.5 million and $5.8 million, respectively. Of these amounts, $3.6 million, $8.3 million and $3.7 million of intangibles amortization related to technology acquisitions is included in cost of revenues and $2.4 million, $4.3 million and $2.1 million is included in research and development expenses for 2002, 2001 and 2000, respectively. Intangible assets are amortized on a straight-line basis.

The unaudited pro forma information below assumes that companies acquired in fiscal 2001 and 2000 had been acquired at the beginning of the respective fiscal year and includes the effect of amortization of goodwill and other identified intangibles from that date. The impact of charges for in-process research and development has been excluded. The unaudited proforma information is presented for informational purposes only and is not indicative of the results of future operations or results that would have been achieved had the acquisitions taken place at the beginning of fiscal years.

Net revenues	$1,660,019	$1,021,738
Net income (loss)	$24,143	$   639,927
Basic income (loss) per share	$        0.07	$        2.00
Diluted income (loss) per share	$        0.07	$        1.85