8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 27, 2009

ALTERA CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	0-16617	77-0016691
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

101 Innovation Drive, San Jose, California	95134
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (408) 544-7000

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On January 27, 2009, Altera Corporation issued a press release announcing its financial results for the fourth quarter of 2008. A copy of the press release is furnished as Exhibit 99.1 to this report.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

99.1 Press release dated January 27, 2009

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

ALTERA CORPORATION

/s/ Timothy R. Morse

Timothy R. Morse, Senior Vice President and

Chief Financial Officer

Dated: January 27, 2009

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release dated January 27, 2009

EX-99.1

Exhibit 99.1

INVESTOR CONTACT	MEDIA CONTACT
Scott Wylie – Vice President	Mark Plungy – Senior Manager
Investor Relations	Corporate Communications
(408) 544-6996	(408) 544-6397
swylie@altera.com	newsroom@altera.com

ALTERA ANNOUNCES 2008 RESULTS

San Jose, Calif., January 27, 2009—Altera Corporation (NASDAQ: ALTR) today announced 2008 sales of $1.37 billion, up 8 percent compared with $1.26 billion in 2007. New product sales increased 51 percent. Net income rose 24 percent to $359.7 million, $1.18 per diluted share, versus net income of $290.0 million, $0.82 per diluted share, in 2007.

Fourth quarter sales were $314.5 million, down 3 percent from the fourth quarter of 2007 and down 12 percent from the third quarter of 2008. Fourth quarter net income was $83.0 million, $0.28 per diluted share, up from net income of $65.5 million, $0.20 per diluted share, in the fourth quarter of 2007.

Altera repurchased 26.6 million shares of its common stock during 2008 at a cost of $473.2 million, with 9.0 million shares repurchased during the fourth quarter at a cost of $154.2 million. Altera ended the quarter with $1.2 billion in cash and short-term investments.

Altera’s board of directors has declared a quarterly cash dividend of $0.05 per share payable on March 2, 2009 to shareholders of record on February 10, 2009.

“While we experienced the effects of a global economic-driven slowdown in the fourth quarter, we increased our market share in the programmable logic industry for the sixth year in a row. Net income growth substantially outpaced sales growth as a result of our sustained focus on improving efficiencies across the company. We will apply these simplification and cost reduction skills in this current challenging business environment to help protect shareholder value,” said John Daane, president, chief executive officer, and chairman of the board.” As previously committed, we shipped our first 40-nm Stratix IV FPGAs in the fourth quarter, placing us in a leadership position that will strengthen our competitive position in 2009 and beyond.”

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Several recent accomplishments mark the company’s continuing progress.

• Following the introduction of development software in May 2008, Altera began shipping Stratix^® IV FPGAs in December. As the only supplier of 40-nm FPGAs in the industry, Altera’s customers will benefit from the industry’s largest density, highest performance, highest system bandwidth, and lowest power among high-end FPGA solutions. With increasing demand for services such as video over Internet, high-speed wireless data and digital TV, designers need to deliver solutions that provide higher data rates, higher interface bandwidths, and increased data processing all in a power-efficient manner. To address these design challenges, Stratix IV FPGAs leverage Altera’s innovations in transceivers, memory interfaces, low-power technology and FPGA core architecture to offer new capabilities in its 40-nm devices. For designers faced with sharply increased ASIC design costs and otherwise limited to lagging node technology, the comparative economics and performance advantages of advanced-node FPGAs are compelling. As the industry leader at the 40-nm node, Altera is in a unique position to compete for these new design wins and gain increased share in the FPGA market, which will continue to be the fastest growing portion of the programmable logic industry.

• Even though just launched, the combination of process node and architectural leadership represented by Stratix IV FPGAs has already led to broad industry recognition:

• China Electronics News selected Stratix IV FPGAs as its “2008 Editor’s Choice Award” winner in the FPGA category. Winners of this award demonstrated a significant leap in innovation.

• EDN named Stratix IV FPGAs to its annual list of “Hot 100 Electronic Products.” This list encompasses the 100 most significant products of 2008, as determined by the magazine’s editors and readers.

• Stratix IV FPGAs received EDN China’s “Leading Products Award” in the digital IC and programmable logic category. Winners of this award were chosen by a panel of technical experts and professors that selects products having the greatest impact on the electronics industry.

• Stratix IV FPGAs received Electronic Products’ 2008 “Product of the Year” award in the digital ICs category. Award winners are selected by the magazine’s editors based on innovative design, significant advancement in technology or application and substantial achievement in price and performance.

• Recognizing Altera’s overall business performance, Forbes.com identified Altera as the best managed company in the semiconductor category. Altera was selected from Forbes.com’s Platinum 400 and chosen based on sales and earnings growth, debt to total capital, earnings outlook and stock market returns.

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Business Outlook for the First Quarter 2009

Sequential Sales Growth	Down 15% to 25%
Gross Margin	67% +/– .5%
Research and Development	$62 to $64 million
SG&A	$58 to $60 million
Other Income	approximately $3 million
Tax Rate	13% - 15%

Conference Call and Quarterly Update:

A conference call will be held today at 1:45 p.m. Pacific Time to discuss the quarter’s results and management’s current business outlook. The webcast and subsequent replay will be available in the Investor Relations section of the company’s website at www.altera.com. A telephonic replay of the call may be accessed later in the day by calling (719) 457-0820 and referencing confirmation code 258712. The telephonic replay will be available for two weeks following the live call.

Altera’s first quarter business update will be issued in a press release available after the market close on March 2, 2009.

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,” “anticipates,” or other words that imply or predict a future state. Forward-looking statements include any projection of revenue, gross margin, expense or other financial items discussed in the Business Outlook section of this press release, as well as statements regarding future competitive position and shareholder value creation. Investors are cautioned that all forward-looking statements in this release involve risks and uncertainty that can cause actual results to differ from those currently anticipated, due to a number of factors, including without limitation, current global economic conditions, customer business environment, vertical market mix, market acceptance of the company’s products, product introduction schedules, the rate of growth of the company’s new products including the Arria^® GX, Cyclone^® II, Cyclone III, Stratix II, Stratix II GX, Stratix III, Stratix IV, MAX^® II and HardCopy^® device families, changes in the mix of our business between prototyping and production-based demand, as well as changes in

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economic conditions and other risk factors discussed in documents filed by the company with the Securities and Exchange Commission (SEC) from time to time. Copies of Altera’s SEC filings are posted on the company’s website and are available from the company without charge. 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^® programmable solutions enable system and semiconductor companies to rapidly and cost-effectively innovate, differentiate and win in their markets. Find out more at www.altera.com.

#####

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. All other product or service names are the property of their respective holder.

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ALTERA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

	THREE MONTHS ENDED									YEARS ENDED
	December 31, 2008			September 26, 2008			December 28, 2007			December 31, 2008			December 28, 2007
Net sales	$	314,544		$	356,755		$	323,167		$	1,367,224		$	1,263,548
Cost of sales		96,699			117,405			116,062			449,750			447,969
Gross margin		217,845			239,350			207,105			917,474			815,579
Operating expenses
Research and development		68,846			64,111			72,428			257,717			261,786
Selling, general, and administrative		62,757			65,330			69,211			255,391			272,141
Total operating expenses		131,603			129,441			141,639			513,108			533,927
Operating margin (1)		86,242			109,909			65,466			404,366			281,652
Compensation expense (benefit) - deferred compensation plan		(10,184	)		(3,177	)		335			(18,106	)		6,699
Loss (gain) on deferred compensation plan securities		10,184			3,177			(335	)		18,106			(6,699	)
Interest income and other expense (income)		(6,118	)		(7,501	)		(12,505	)		(30,300	)		(57,681	)
Interest expense		4,456			3,992			1,443			15,492			1,705
Income before income taxes		87,904			113,418			76,528			419,174			337,628
Income tax expense		4,863			18,714			11,051			59,523			47,605
Net income	$	83,041		$	94,704		$	65,477		$	359,651		$	290,023
Net income per share:
Basic	$	0.28		$	0.31		$	0.20		$	1.20		$	0.84
Diluted	$	0.28		$	0.31		$	0.20		$	1.18		$	0.82
Shares used in computing per share amounts:
Basic		294,803			301,337			328,084			300,951			345,382
Diluted		296,298			306,528			331,807			304,604			351,906
Cash dividends per common share	$	0.05		$	0.05		$	0.04		$	0.19		$	0.12
Tax rate		5.5	%		16.5	%		14.4	%		14.2	%		14.1	%
% of Net sales:
Gross margin		69.3	%		67.1	%		64.1	%		67.1	%		64.5	%
Research and development		21.9	%		18.0	%		22.4	%		18.8	%		20.7	%
Selling, general, and administrative		20.0	%		18.3	%		21.4	%		18.7	%		21.5	%
Operating margin (1)		27.4	%		30.8	%		20.3	%		29.6	%		22.3	%
Net income		26.4	%		26.5	%		20.3	%		26.3	%		23.0	%

Notes:

(1) We define operating margin as gross margin less research and development and selling, general and administrative expenses, as presented above. This presentation differs from income from operations as defined by U.S. Generally Accepted Accounting Principles (GAAP), as it excludes compensation expense (benefit) associated with deferred compensation plan obligations. Since compensation expense (benefit) associated with our deferred compensation plan obligations is offset by losses (gains) from related securities, we believe this presentation provides a more meaningful representation of our ongoing operating performance. A reconciliation of operating margin to income from operations follows:

	THREE MONTHS ENDED								YEARS ENDED
	December 31, 2008			September 26, 2008			December 28, 2007		December 31, 2008			December 28, 2007
Operating margin (non-GAAP)	$	86,242		$	109,909		$	65,466	$	404,366		$	281,652
Compensation expense (benefit) - deferred compensation plan		(10,184	)		(3,177	)		335		(18,106	)		6,699
Income from operations (GAAP)	$	96,426		$	113,086		$	65,131	$	422,472		$	274,953

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ALTERA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

	THREE MONTHS ENDED
	March 28, 2008			June 27, 2008			September 26, 2008			December 31, 2008
Net sales	$	336,071		$	359,854		$	356,755		$	314,544
Cost of sales		117,309			118,337			117,405			96,699
Gross margin		218,762			241,517			239,350			217,845
Operating expenses
Research and development		61,137			63,623			64,111			68,846
Selling, general, and administrative		63,131			64,173			65,330			62,757
Total operating expenses		124,268			127,796			129,441			131,603
Operating margin (1)		94,494			113,721			109,909			86,242
Compensation expense (benefit) - deferred compensation plan		(5,029	)		284			(3,177	)		(10,184	)
Loss (gain) on deferred compensation plan securities		5,029			(284	)		3,177			10,184
Interest income and other expense (income)		(9,151	)		(7,530	)		(7,501	)		(6,118	)
Interest expense		3,137			3,907			3,992			4,456
Income before income taxes		100,508			117,344			113,418			87,904
Income tax expense		16,584			19,362			18,714			4,863
Net income	$	83,924		$	97,982		$	94,704		$	83,041
	THREE MONTHS ENDED
	March 30, 2007			June 29, 2007			September 28, 2007			December 28, 2007
Net sales	$	304,916		$	319,682		$	315,783		$	323,167
Cost of sales		104,494			113,052			114,361			116,062
Gross margin		200,422			206,630			201,422			207,105
Operating expenses
Research and development		57,884			61,505			69,969			72,428
Selling, general, and administrative		71,216			66,436			65,278			69,211
Total operating expenses		129,100			127,941			135,247			141,639
Operating margin (1)		71,322			78,689			66,175			65,466
Compensation expense (benefit) - deferred compensation plan		1,157			3,034			2,173			335
Loss (gain) on deferred compensation plan securities		(1,157	)		(3,034	)		(2,173	)		(335	)
Interest income and other expense (income)		(16,055	)		(15,045	)		(14,076	)		(12,505	)
Interest expense		99			94			69			1,443
Income before income taxes		87,278			93,640			80,182			76,528
Income tax expense		12,219			13,110			11,225			11,051
Net income	$	75,059		$	80,530		$	68,957		$	65,477

Notes:

(1) We define operating margin as gross margin less research and development and selling, general and administrative expenses, as presented above. This presentation differs from income from operations as defined by U.S. Generally Accepted Accounting Principles (GAAP), as it excludes compensation expense (benefit) associated with deferred compensation plan obligations. Since compensation expense (benefit) associated with our deferred compensation plan obligations is offset by losses (gains) from related securities, we believe this presentation provides a more meaningful representation of our ongoing operating performance. A reconciliation of operating margin to income from operations follows:

	THREE MONTHS ENDED
	March 28, 2008			June 27, 2008		September 26, 2008			December 31, 2008
Operating margin (non-GAAP)	$	94,494		$	113,721	$	109,909		$	86,242
Compensation expense (benefit) - deferred compensation plan		(5,029	)		284		(3,177	)		(10,184	)
Income from operations (GAAP)	$	99,523		$	113,437	$	113,086		$	96,426
	THREE MONTHS ENDED
	March 30, 2007			June 29, 2007		September 28, 2007			December 28, 2007
Operating margin (non-GAAP)	$	71,322		$	78,689	$	66,175		$	65,466
Compensation expense (benefit) - deferred compensation plan		1,157			3,034		2,173			335
Income from operations (GAAP)	$	70,165		$	75,655	$	64,002		$	65,131

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ALTERA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	December 31, 2008			September 26, 2008			December 28, 2007
Assets
Current assets:
Cash and short-term investments	$	1,216,743		$	1,283,172		$	1,021,379
Accounts receivable, net		83,430			221,331			198,889
Inventories		84,637			74,230			74,110
Deferred compensation plan assets		55,990			65,593			74,768
Deferred income taxes and other current assets		186,361			171,880			164,942
Total current assets		1,627,161			1,816,206			1,534,088
Property and equipment, net		192,262			188,532			169,850
Deferred income taxes and other assets, net		60,484			70,530			65,980
	$	1,879,907		$	2,075,268		$	1,769,918
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and current liabilities	$	124,358		$	144,107		$	134,450
Deferred compensation plan obligations		55,990			65,593			74,768
Deferred income and allowances on sales to distributors		205,674			299,781			280,440
Total current liabilities		386,022			509,481			489,658
Income taxes payable, non-current		173,880			172,499			152,010
Long-term credit facility		500,000			500,000			250,000
Other non-current liabilities		20,128			20,095			16,800
Stockholders’ equity		799,877			873,193			861,450
	$	1,879,907		$	2,075,268		$	1,769,918
Key Ratios & Information
Current Assets/Current Liabilities		4:1			4:1			3:1
Liabilities/Equity		1:1			1:1			1:1
TTM Return on Equity		45	%		38	%		21	%
Quarterly Depreciation Expense	$	7,625		$	7,006		$	7,693
Quarterly Capital Expenditures	$	11,354		$	17,825		$	9,545
Annualized Net Sales per Employee	$	508		$	524		$	473
Number of Employees		2,760			2,730			2,651
Inventory MSOH (1): Altera		2.6			1.9			1.9
Inventory MSOH (1): Distribution		1.0			1.1			1.1
Days Sales Outstanding		25			56			56

(1) MSOH: Months Supply On Hand

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ALTERA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	THREE MONTHS ENDED									YEARS ENDED
	December 31, 2008			September 26, 2008			December 28, 2007			December 31, 2008			December 28, 2007
Cash Flows from Operating Activities:
Net income	$	83,041		$	94,704		$	65,477		$	359,651		$	290,023
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		7,684			7,065			7,752			29,969			31,082
Stock-based compensation		13,743			10,655			12,497			48,630			50,203
Deferred income tax expense (benefit)		21,147			(12,179	)		(2,402	)		737			(14,367	)
Tax expense (benefit) from stock-based compensation		(12,860	)		6,654			1,152			1,311			12,871
Gross tax benefit from stock-based compensation		(194	)		(2,116	)		(1,841	)		(6,767	)		(13,177	)
Gain on sale of land		—			—			—			(112	)		—
Changes in assets and liabilities:
Accounts receivable, net		137,901			35,908			(17,819	)		115,459			(105,626	)
Inventories		(10,407	)		1,776			10,873			(10,527	)		4,367
Other assets		(25,896	)		5,183			(3,449	)		(26,173	)		(14,505	)
Accounts payable and other liabilities		(11,202	)		13,446			(15,740	)		2,810			6,250
Deferred income and allowances on sales to distributors		(94,107	)		(35,862	)		10,926			(74,766	)		(17,638	)
Income taxes payable		(1,601	)		(11,052	)		9,896			9,717			43,419
Deferred compensation plan obligations		581			495			638			(673	)		(1,309	)
Net cash provided by operating activities		107,830			114,677			77,960			449,266			271,593
Cash Flows from Investing Activities:
Purchases of property and equipment		(11,354	)		(17,825	)		(9,545	)		(40,273	)		(31,171	)
Purchases of available-for-sale investments		—			—			(20,627	)		—			(113,540	)
Proceeds from the maturities and sales of available-for-sale investments		3,776			45,787			399,251			131,060			864,853
Proceeds from sale of land		—			—			—			9,063			—
Sales (purchases) of deferred compensation plan securities, net		(581	)		(495	)		(638	)		673			1,309
Purchases of intangible assets		—			—			—			—			(240	)
Net cash provided by (used for) investing activities		(8,159	)		27,467			368,441			100,523			721,211
Cash Flows from Financing Activities:
Proceeds from issuance of common stock through various stock plans		11,289			12,764			13,013			58,908			165,624
Repurchases of common stock		(154,201	)		(42,348	)		(509,287	)		(473,229	)		(1,226,343	)
Payment of dividends to stockholders		(14,626	)		(15,057	)		(13,330	)		(57,051	)		(41,277	)
Gross tax benefit from stock-based compensation		194			2,116			1,841			6,767			13,177
Increase (decrease) in book overdrafts		—			—			(179	)		(320	)		319
Proceeds from long-term credit facility		—			—			250,000			250,000			250,000
Principal payments on capital lease obligations		(4,980	)		(2,567	)		(212	)		(8,216	)		(2,621	)
Net cash used for financing activities		(162,324	)		(45,092	)		(258,154	)		(223,141	)		(841,121	)
Net increase (decrease) in cash and cash equivalents		(62,653	)		97,052			188,247			326,648			151,683
Cash and cash equivalents at beginning of period		1,279,396			1,182,344			701,848			890,095			738,412
Cash and cash equivalents at end of period	$	1,216,743		$	1,279,396		$	890,095		$	1,216,743		$	890,095
Cash paid during the period for:
Income taxes paid, net	$	20,658		$	31,788		$	5,034		$	66,411		$	8,240
Interest paid	$	4,556		$	4,260		$	22		$	15,666		$	1,433
Non-cash transactions:
Assets acquired under capital leases	$	—		$	716		$	—		$	11,871		$	—
Land reclassified from fixed assets to other current assets	$	—		$	—		$	8,951		$	—		$	8,951

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ALTERA CORPORATION

REVENUE SUMMARY

(Unaudited)

	THREE MONTHS ENDED						Quarterly Growth Rate				YEARS ENDED
	December 31, 2008		September 26, 2008		December 28, 2007		Sequential Change		Year- Over-Year Change		December 31, 2008		December 28, 2007		Annual Growth Rate
Geography
North America	23	%	23	%	24	%	-10	%	-6	%	23	%	22	%	13	%
Asia Pacific	36	%	35	%	34	%	-11	%	3	%	35	%	34	%	12	%
Europe	23	%	23	%	23	%	-13	%	-1	%	23	%	24	%	3	%
Japan	18	%	19	%	19	%	-15	%	-10	%	19	%	20	%	4	%
Total	100	%	100	%	100	%	-12	%	-3	%	100	%	100	%	8	%
Product Category
New	48	%	46	%	37	%	-8	%	28	%	44	%	32	%	51	%
Mainstream	25	%	25	%	27	%	-12	%	-11	%	26	%	30	%	-7	%
Mature & Other	27	%	29	%	36	%	-18	%	-28	%	30	%	38	%	-15	%
Total	100	%	100	%	100	%	-12	%	-3	%	100	%	100	%	8	%
Market Segment
Communications	44	%	44	%	41	%	-11	%	6	%	43	%	40	%	16	%
Industrial	36	%	36	%	34	%	-13	%	3	%	35	%	35	%	11	%
Consumer	14	%	14	%	16	%	-11	%	-15	%	15	%	16	%	-3	%
Computer & Storage	6	%	6	%	9	%	-16	%	-36	%	7	%	9	%	-15	%
Total	100	%	100	%	100	%	-12	%	-3	%	100	%	100	%	8	%
FPGAs and CPLDs
FPGA	75	%	75	%	71	%	-12	%	2	%	74	%	71	%	13	%
CPLD	16	%	17	%	19	%	-16	%	-13	%	18	%	19	%	2	%
Other	9	%	8	%	10	%	-6	%	-16	%	8	%	10	%	-11	%
Total	100	%	100	%	100	%	-12	%	-3	%	100	%	100	%	8	%

Product Category Description

Category	Products
New	Stratix II (and GX), Stratix III, Stratix IV, Arria GX, Cyclone II, Cyclone III, MAX II, HardCopy, and Hardcopy II devices
Mainstream	Stratix (and GX), Cyclone, and MAX 3000A devices
Mature & Other	Classic™, MAX 7000, MAX 7000A, MAX 7000B, MAX 7000S, MAX 9000, FLEX® series, APEX™ series, Mercury™, Excalibur™, configuration and other devices, intellectual property cores, and software and other tools

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