What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-04-24 compared with 2023-01-30 · 133 added, 111 removed, 557 unchanged (30% of the section changed)

3 unchanged sentences

(in thousands, except per share data)

Three Months Ended Six Months Ended

2022 December 26,

2021 December 25,

2022 December 26,

Three Months Ended Nine Months Ended

2023 March 27,

2022 March 26,

2023 March 27,

Revenue $ 3,869,569 $ 4,060,416 $ 14,221,259 $ 12,591,485

Cost of goods sold 2,197,237 2,243,791 7,835,743 6,820,190

Restructuring charges, net - cost of goods sold 66,720 — 66,720 —

Total cost of goods sold 2,263,957 2,243,791 7,902,463 6,820,190

Gross margin 1,605,612 1,816,625 6,318,796 5,771,295

1 unchanged sentence

Selling, general, and administrative 193,500 217,408 632,922 675,735

Restructuring charges, net - operating expenses 40,408 — 40,408 —

Total operating expenses 663,359 624,528 1,998,541 1,868,826

15 unchanged sentences

(in thousands)

Three Months Ended Six Months Ended

2022 December 26,

2021 December 25,

2022 December 26,

Three Months Ended Nine Months Ended

2023 March 27,

2022 March 26,

2023 March 27,

Net income $ 814,008 $ 1,021,778 $ 3,708,394 $ 3,396,352

7 unchanged sentences

Net unrealized gains (losses) during the period 652 ( 1,333 ) 1,222 ( 4,523 )

Net losses (gains) reclassified into net income — 345 ( 53 ) 1,490

Net (gains) losses reclassified into net income ( 105 ) ( 34 ) ( 158 ) 1,456

547 ( 1,367 ) 1,064 ( 3,067 )

11 unchanged sentences

Investments 63,849 135,731

Accounts receivable, less allowance of $ 5,411 as of December 25, 2022, and $ 5,606 as of June 26, 2022

Accounts receivable, less allowance of $ 5,359 as of March 26, 2023, and $ 5,606 as of June 26, 2022

3,262,140 4,313,818

23 unchanged sentences

Common stock, at par value of $ 0.001 per share;

authorized, 400,000 shares as of December 25, 2022 and June 26, 2022;

issued and outstanding, 135,403 shares as of December 25, 2022, and 136,975 shares as of June 26, 2022

authorized, 400,000 shares as of March 26, 2023 and June 26, 2022;

issued and outstanding, 134,692 shares as of March 26, 2023, and 136,975 shares as of June 26, 2022

Additional paid-in capital 7,680,059 7,414,916

Treasury stock, at cost;

158,775 shares as of December 25, 2022, and 157,087 shares as of June 26, 2022

159,940 shares as of March 26, 2023, and 157,087 shares as of June 26, 2022

( 20,627,829 ) ( 19,481,429 )

9 unchanged sentences

(in thousands) (unaudited)

Six Months Ended

2022 December 26,

Nine Months Ended

2023 March 27,

CASH FLOWS FROM OPERATING ACTIVITIES:

24 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 1,349 ) ( 13,544 )

Net increase in cash, cash equivalents, and restricted cash 962,525 666,657

Net increase (decrease) in cash, cash equivalents, and restricted cash 1,782,801 ( 224,995 )

Cash, cash equivalents, and restricted cash at beginning of period 3,773,535 4,670,750

5 unchanged sentences

Transfers of finished goods inventory to property and equipment 64,932 62,116

Reconciliation of cash, cash equivalents, and restricted cash December 25,

2022 December 26,

Reconciliation of cash, cash equivalents, and restricted cash March 26,

2023 March 27,

Cash and cash equivalents $ 5,305,648 $ 4,194,719

7 unchanged sentences

Three Months Ended

December 25, 2022

March 26, 2023

Shares Common

5 unchanged sentences

Earnings Total

Balance at September 25, 2022 136,374 $ 136 $ 7,492,822 $ ( 19,591,249 ) $ ( 133,765 ) $ 19,644,623 $ 7,412,567

Balance at December 25, 2022 135,403 $ 135 $ 7,606,149 $ ( 20,071,931 ) $ ( 108,871 ) $ 20,879,153 $ 8,304,635

Issuance of common stock 454 1 ( 1 ) — — — —

Purchase of treasury stock ( 1,165 ) ( 1 ) — ( 555,898 ) — — ( 555,899 )

Reissuance of treasury stock 131 — 39,366 5,630 — — 44,996

Equity-based compensation expense — — 73,911 — — — 73,911

3 unchanged sentences

— — — — — ( 233,043 ) ( 233,043 )

Balance at December 25, 2022 135,403 $ 135 $ 7,606,149 $ ( 20,071,931 ) $ ( 108,871 ) $ 20,879,153 $ 8,304,635

Six Months Ended

December 25, 2022

Balance at March 26, 2023 134,692 $ 135 $ 7,680,059 $ ( 20,627,829 ) $ ( 105,095 ) $ 21,460,118 $ 8,407,388

Nine Months Ended

March 26, 2023

Shares Common

14 unchanged sentences

— — — — — ( 703,000 ) ( 703,000 )

Balance at December 25, 2022 135,403 $ 135 $ 7,606,149 $ ( 20,071,931 ) $ ( 108,871 ) $ 20,879,153 $ 8,304,635

Balance at March 26, 2023 134,692 $ 135 $ 7,680,059 $ ( 20,627,829 ) $ ( 105,095 ) $ 21,460,118 $ 8,407,388

See Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

Three Months Ended

December 26, 2021

March 27, 2022

Shares Common

5 unchanged sentences

Earnings Total

Balance at September 26, 2021 140,811 $ 141 $ 7,111,803 $ ( 16,863,573 ) $ ( 81,768 ) $ 15,653,440 $ 5,820,043

Balance at December 26, 2021 140,275 $ 140 $ 7,220,359 $ ( 17,294,255 ) $ ( 88,146 ) $ 16,637,683 $ 6,475,781

Issuance of common stock 664 1 491 — — — 492

Purchase of treasury stock ( 2,232 ) ( 2 ) — ( 1,322,525 ) — — ( 1,322,527 )

Reissuance of treasury stock 97 — 42,271 4,109 — — 46,380

Equity-based compensation expense — — 68,543 — — — 68,543

3 unchanged sentences

— — — — — ( 208,057 ) ( 208,057 )

Balance at December 26, 2021 140,275 $ 140 $ 7,220,359 $ ( 17,294,255 ) $ ( 88,146 ) $ 16,637,683 $ 6,475,781

Six Months Ended

December 26, 2021

Balance at March 27, 2022 138,707 $ 139 $ 7,289,393 $ ( 18,616,780 ) $ ( 97,666 ) $ 17,451,404 $ 6,026,490

Nine Months Ended

March 27, 2022

Shares Common

14 unchanged sentences

— — — — — ( 629,860 ) ( 629,860 )

Balance at December 26, 2021 140,275 $ 140 $ 7,220,359 $ ( 17,294,255 ) $ ( 88,146 ) $ 16,637,683 $ 6,475,781

Balance at March 27, 2022 138,707 $ 139 $ 7,289,393 $ ( 18,616,780 ) $ ( 97,666 ) $ 17,451,404 $ 6,026,490

See Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 25, 2022

March 26, 2023

NOTE 1 — BASIS OF PRESENTATION

12 unchanged sentences

The Company’s current fiscal year will end June 25, 2023 and includes 52 weeks.

The quarters ended December 25, 2022 (the “December 2022 quarter”) and December 26, 2021 included 13 weeks.

The quarters ended March 26, 2023 (the “March 2023 quarter”) and March 27, 2022 included 13 weeks.

NOTE 2 — RECENT ACCOUNTING PRONOUNCEMENTS

21 unchanged sentences

Deferred Revenue

Revenue of $ 190.2 million and $ 1,732.7 million included in deferred profit at June 26, 2022 was recognized during the three and six months ended December 25, 2022, respectively.

The following table summarizes the transaction price for contracts that have not yet been recognized as revenue as of December 25, 2022 and when the Company expects to recognize the amounts as revenue:

Revenue of $ 149.1 million and $ 1,881.8 million included in deferred profit at June 26, 2022 was recognized during the three and nine months ended March 26, 2023, respectively.

The following table summarizes the transaction price for contracts that have not yet been recognized as revenue as of March 26, 2023 and when the Company expects to recognize the amounts as revenue:

Less than 1 Year 1-3 Years More than 3 Years Total

12 unchanged sentences

The following table presents the Company’s revenues disaggregated between system and its customer support-related revenue:

Three Months Ended Six Months Ended

2022 December 26,

2021 December 25,

2022 December 26,

Three Months Ended Nine Months Ended

2023 March 27,

2022 March 26,

2023 March 27,

(In thousands)

5 unchanged sentences

The following table presents the Company’s revenues disaggregated by geographic region:

Three Months Ended Six Months Ended

2022 December 26,

2021 December 25,

2022 December 26,

Three Months Ended Nine Months Ended

2023 March 27,

2022 March 26,

2023 March 27,

(In thousands)

China $ 1,263,507 $ 1,080,973 $ 2,793,982 $ 2,688,683

Korea $ 847,728 $ 961,300 $ 2,780,158 $ 2,947,657

China 839,710 1,277,502 3,633,692 3,966,185

Taiwan 713,708 663,494 2,825,827 2,074,681

Japan 575,945 513,936 1,034,638 982,667

Southeast Asia 528,836 364,382 1,069,900 729,630

United States 594,426 309,161 1,402,641 782,170

Japan 406,219 342,329 1,440,857 1,324,996

Europe 311,843 128,149 912,249 387,685

Southeast Asia 155,935 378,481 1,225,835 1,108,111

$ 3,869,569 $ 4,060,416 $ 14,221,259 $ 12,591,485

1 unchanged sentence

The following table presents the percentages of leading- and non-leading-edge equipment and upgrade revenue to each of the primary markets the Company serves:

Three Months Ended Six Months Ended

2022 December 26,

2021 December 25,

2022 December 26,

Three Months Ended Nine Months Ended

2023 March 27,

2022 March 26,

2023 March 27,

Memory 32 % 66 % 46 % 62 %

9 unchanged sentences

The Company recognized the following equity-based compensation expense (including expense related to the employee stock purchase plan) and related income tax benefit in the Condensed Consolidated Statements of Operations:

Three Months Ended Six Months Ended

2022 December 26,

2021 December 25,

2022 December 26,

Three Months Ended Nine Months Ended

2023 March 27,

2022 March 26,

2023 March 27,

(in thousands)

3 unchanged sentences

The significant components of other income (expense), net, are as follows:

Three Months Ended Six Months Ended

2022 December 26,

2021 December 25,

2022 December 26,

Three Months Ended Nine Months Ended

2023 March 27,

2022 March 26,

2023 March 27,

(in thousands)

5 unchanged sentences

$ ( 3,331 ) $ ( 57,402 ) $ ( 74,660 ) $ ( 68,260 )

Other, net includes an unrealized gain totaling $ 46.6 million associated with an equity investee that became publicly traded during the three and six months ended December 26, 2021.

Other, net includes an unrealized gain totaling $ 63.6 million associated with an equity investee that became publicly traded during the nine months ended March 27, 2022.

Refer to Note 8 - Financial Instruments for additional information regarding the Company’s investments.

2 unchanged sentences

The Company’s provision for income taxes and effective tax rate are as follows:

Three Months Ended Six Months Ended

2022 December 26,

2021 December 25,

2022 December 26,

Three Months Ended Nine Months Ended

2023 March 27,

2022 March 26,

2023 March 27,

(in thousands, except percentages)

2 unchanged sentences

The difference between the U.S.

federal statutory tax rate of 21% and the Company’s effective tax rate for the three and six months ended December 25, 2022 and December 26, 2021 was primarily due to income in lower tax jurisdictions.

federal statutory tax rate of 21% and the Company’s effective tax rate for the three and nine months ended March 26, 2023 and March 27, 2022 was primarily due to income in lower tax jurisdictions.

The Internal Revenue Service (“IRS”) has examined the Company’s U.S.

4 unchanged sentences

federal income tax returns for the fiscal years ended June 30, 2019, and June 28, 2020.

As of December 25, 2022, no significant adjustments have been proposed by the IRS.

As of March 26, 2023, no adjustments have been proposed by the IRS.

The Company is unable to make a reasonable estimate as to when cash settlements, if any, with the IRS will occur.

6 unchanged sentences

The following table reconciles the inputs to the basic and diluted computations for net income per share.

Three Months Ended Six Months Ended

2022 December 26,

2021 December 25,

2022 December 26,

Three Months Ended Nine Months Ended

2023 March 27,

2022 March 26,

2023 March 27,

(in thousands, except per share data)

7 unchanged sentences

For purposes of computing diluted net income per share, weighted-average common shares do not include potentially dilutive securities that are anti-dilutive under the treasury stock method.

The impact from potentially dilutive securities, including options and RSUs, was not material for the three and six months ended December 25, 2022 and December 26, 2021.

The impact from potentially dilutive securities, including options and RSUs, was not material for the three and nine months ended March 26, 2023 and March 27, 2022.

Lam Research Corporation 2023 Q3 10-Q 12

30 unchanged sentences

Equity Investments measured at fair value on a non-recurring basis

As of December 25, 2022, and June 26, 2022, equity investments of $ 121.3 million and $ 125.2 million, respectively, were reported in other assets in the Condensed Consolidated Balance Sheets.

As of March 26, 2023, and June 26, 2022, equity investments of $ 128.9 million and $ 125.2 million, respectively, were reported in other assets in the Condensed Consolidated Balance Sheets.

Lam Research Corporation 2023 Q3 10-Q 13

With the exception of one equity investee that became publicly traded during the three and six months ended December 26, 2021, net gains resulting from the application of the measurement alternative to the Company’s equity investments were immaterial for the three and six months ended December 25, 2022, and December 26, 2021.

Refer to Note 5 - Other Income (Expense), net for additional information regarding the gain associated with an equity investee that became publicly traded in the three and six months ended December 26, 2021.

With the exception of one equity investee that became publicly traded during the nine months ended March 27, 2022, net gains resulting from the application of the measurement alternative to the Company’s equity investments were immaterial for the three and nine months ended March 26, 2023, and March 27, 2022.

Refer to Note 5 - Other Income (Expense), net for additional information regarding the gain associated with an equity investee that became publicly traded in the nine months ended March 27, 2022.

Debt and Equity Investments measured at fair value on a recurring basis

The following tables set forth the Company’s cash, cash equivalents, investments, restricted cash and investments, and other assets measured at fair value on a recurring basis as of December 25, 2022, and June 26, 2022:

December 25, 2022

March 26, 2023

(Reported Within)

39 unchanged sentences

All other differences between fair value and amortized cost are recognized in other comprehensive income.

No such losses were recognized through the income statement during the three and six months ended December 25, 2022 and December 26, 2021.

No such losses were recognized through the income statement during the three and nine months ended March 26, 2023 and March 27, 2022.

Lam Research Corporation 2023 Q3 10-Q 14

Gross realized gains/(losses) from sales of investments were insignificant in the three and six months ended December 25, 2022 and December 26, 2021.

Gross realized gains/(losses) from sales of investments were insignificant in the three and nine months ended March 26, 2023 and March 27, 2022.

The following is an analysis of the Company’s investments in unrealized loss positions:

December 25, 2022

March 26, 2023

Unrealized Losses

8 unchanged sentences

$ 28,472 $ ( 1,010 ) $ 61,892 $ ( 1,968 ) $ 90,364 $ ( 2,978 )

The amortized cost and fair value of cash equivalents, investments, and restricted investments with contractual maturities are as follows as of December 25, 2022:

The amortized cost and fair value of cash equivalents, investments, and restricted investments with contractual maturities are as follows as of March 26, 2023:

(in thousands)

6 unchanged sentences

The Company’s hedging strategies and policies are unchanged from those disclosed in Note 9, “Financial Instruments,” to our Consolidated Financial Statements in Part II, Item 8 of our 2022 Form 10-K.

The financial statement impacts from derivative instruments and hedging activities were not material as of and for the three and six months ended December 25, 2022 and December 26, 2021.

The financial statement impacts from derivative instruments and hedging activities were not material as of and for the three and nine months ended March 26, 2023 and March 27, 2022.

Concentrations of Credit Risk

21 unchanged sentences

NOTE 10 — GOODWILL AND INTANGIBLE ASSETS

The balance of goodwill is approximately $ 1.6 billion and $ 1.5 billion as of December 25, 2022 and June 26, 2022, respectively.

As of December 25, 2022 and June 26, 2022, $ 62.0 million of the goodwill balance is tax deductible and the remaining balance is not tax deductible due to purchase accounting and applicable foreign law.

Refer to Note 1 7 - Business Combination s for additional information regarding the Company’s goodwill balance.

The balance of goodwill is approximately $ 1.6 billion and $ 1.5 billion as of March 26, 2023 and June 26, 2022, respectively.

As of March 26, 2023 and June 26, 2022, $ 62.0 million of the goodwill balance is tax deductible and the remaining balance is not tax deductible due to purchase accounting and applicable foreign law.

Refer to Note 17 - Business Combinations for additional information regarding the Company’s goodwill balance.

Intangible Assets

The following table provides the Company’s intangible assets, other than goodwill:

December 25, 2022 June 26, 2022

March 26, 2023 June 26, 2022

Gross Accumulated

8 unchanged sentences

Total intangible assets $ 1,588,986 $ ( 1,409,339 ) $ 179,647 $ 1,477,997 $ ( 1,376,147 ) $ 101,850

The Company recognized $ 12.2 million and $ 19.5 million in intangible asset amortization expense during the three months ended December 25, 2022 and December 26, 2021, respectively.

The Company recognized $ 23.8 million and $ 38.6 million in intangible asset amortization expense during the six months ended December 25, 2022 and December 26, 2021, respectively.

The estimated future amortization expense of intangible assets as of December 25, 2022, is reflected in the table below.

The table excludes $ 27.7 million of capitalized costs for internal-use software that have not been placed into service.

The Company recognized $ 13.8 million and $ 20.4 million in intangible asset amortization expense during the three months ended March 26, 2023 and March 27, 2022, respectively.

The Company recognized $ 37.4 million and $ 58.9 million in intangible asset amortization expense during the nine months ended March 26, 2023 and March 27, 2022, respectively.

The estimated future amortization expense of intangible assets as of March 26, 2023, is reflected in the table below.

The table excludes $ 20.7 million of capitalized costs for internal-use software, included in Patents and other intangible assets in the table above, that have not been placed into service.

Fiscal Year Amount

2 unchanged sentences

Thereafter 19,570

Refer to Note 1 7 - Business Combination s for additional information regarding the Company’s intangible assets.

Refer to Note 17 - Business Combinations for additional information regarding the Company’s intangible assets.

Lam Research Corporation 2023 Q3 10-Q 16

7 unchanged sentences

Dividend payable 233,043 205,615

Restructuring 75,257 —

Other 587,411 589,738

7 unchanged sentences

Such spreads and such facility fees are further subject to sustainability adjustments as described in the Amendment No.1 To Second Amended and Restated Credit Agreement, in each case based on the Company’s performance of certain energy savings and health and safety standards metrics.

As of December 25, 2022, the Company had no borrowings outstanding under the credit facility and was in compliance with all financial covenants.

As of March 26, 2023, the Company had no borrowings outstanding under the credit facility and was in compliance with all financial covenants.

NOTE 13 — LEASES

7 unchanged sentences

The Company is required to maintain cash collateral in an aggregate of approximately $ 250.0 million in separate interest-bearing accounts as security for the Company’s obligations.

These amounts are recorded with other restricted cash and investments in the Company’s Condensed Consolidated Balance Sheet as of December 25, 2022.

These amounts are recorded with other restricted cash and investments in the Company’s Condensed Consolidated Balance Sheet as of March 26, 2023.

During the seven-year term of the California Facility Leases and when the terms of the California Facility Leases expire, the property subject to the California Facility Leases may be re-marketed.

7 unchanged sentences

The Company has entered into insurance contracts that are intended to limit its exposure to such indemnifications.

As of December 25, 2022, the Company had not recorded any liability on its Condensed Consolidated Financial Statements in connection with these indemnifications, as it does not believe that it is probable that any material amounts will be paid under these guarantees.

As of March 26, 2023, the Company had not recorded any liability on its Condensed Consolidated Financial Statements in connection with these indemnifications, as it does not believe that it is probable that any material amounts will be paid under these guarantees.

Generally, the Company indemnifies, under pre-determined conditions and limitations, its customers for infringement of third-party intellectual property rights by the Company’s products or services.

2 unchanged sentences

The Company provides guarantees and standby letters of credit to certain parties as required for certain transactions initiated during the ordinary course of business.

As of December 25, 2022, the maximum potential amount of future payments that the Company could be required to make under these arrangements and letters of credit was $ 98.6 million.

As of March 26, 2023, the maximum potential amount of future payments that the Company could be required to make under these arrangements and letters of credit was $ 99.6 million.

The Company does not believe, based on historical experience and information currently available, that it is probable that any material amounts will be required to be paid.

5 unchanged sentences

The liability amount is based on actual historical warranty spending activity by type of system, customer, and geographic region, modified for any known differences such as the impact of system reliability improvements.

As of December 25, 2022, warranty reserves totaling $ 34.8 million were recognized in other long-term liabilities, the remainder were included in accrued expenses and other current liabilities in the Company’s Condensed Consolidated Balance Sheets.

As of March 26, 2023, warranty reserves totaling $ 35.6 million were recognized in other long-term liabilities, the remainder were included in accrued expenses and other current liabilities in the Company’s Condensed Consolidated Balance Sheets.

Changes in the Company’s product warranty reserves were as follows:

Three Months Ended Six Months Ended

2022 December 26,

2021 December 25,

2022 December 26,

Three Months Ended Nine Months Ended

2023 March 27,

2022 March 26,

2023 March 27,

(in thousands)

20 unchanged sentences

Repurchase Average Price

Paid Per Share (1)

Available Under

3 unchanged sentences

Quarter ended December 25, 2022 1,125 $ 483,226 $ 429.42 $ 4,926,428

Quarter ended March 26, 2023 1,017 $ 483,418 (3) $ 475.18 (3) $ 4,443,010

(1) Average price paid per share excludes the effect of accelerated share repurchase activities.

See additional disclosure below regarding the Company’s accelerated share repurchase activity during the six months ended December 25, 2022.

See additional disclosure below regarding the Company’s accelerated share repurchase activity during the nine months ended March 26, 2023.

(2) Includes shares received at final settlement of accelerated share repurchase agreements;

see additional disclosures below regarding the Company’s accelerated share repurchase activity during the six months ended December 25, 2022.

In addition to the shares repurchased under the Board-authorized repurchase program shown above, during the three and six months ended December 25, 2022, the Company acquired 8 thousand shares at a total cost of $ 3.1 million and 19 thousand shares at a total cost of $ 7.9 million, respectively, which the Company withheld through net settlements to cover minimum tax withholding obligations upon the vesting of restricted stock unit awards granted under the Company’s equity compensation plans.

see additional disclosures below regarding the Company’s accelerated share repurchase activity during the nine months ended March 26, 2023.

(3) As of January 1, 2023, the Company’s net share repurchases are subject to a 1% excise tax under the Inflation Reduction Act.

Excise tax incurred reduces the amount available under the repurchase program, as applicable, and is included in the cost of share repurchased in the Condensed Consolidated Statement of Stockholders’ Equity.

In addition to the shares repurchased under the Board-authorized repurchase program shown above, during the three and nine months ended March 26, 2023, the Company acquired 148 thousand shares at a total cost of $ 72.5 million and 167 thousand shares at a total cost of $ 80.4 million, respectively, which the Company withheld through net settlements to cover minimum tax withholding obligations upon the vesting of restricted stock unit awards granted under the Company’s equity compensation plans.

The shares retained by the Company through these net share settlements are not a part of the Board-authorized repurchase program but instead are authorized under the Company’s equity compensation plan.

4 unchanged sentences

Final settlement of the June 2022 ASR occurred in September 2022, resulting in the receipt of approximately 433 thousand additional shares, which yielded a weighted-average share price of $ 435.20 for the transaction period.

Lam Research Corporation 2023 Q3 10-Q 19

NOTE 16 — ACCUMULATED OTHER COMPREHENSIVE LOSS

The components of accumulated other comprehensive loss, net of tax at December 25, 2022, as well as the activity for the six months ending December 25, 2022, were as follows:

The components of accumulated other comprehensive loss, net of tax at March 26, 2023, as well as the activity for the nine months ending March 26, 2023, were as follows:

Accumulated Foreign Currency Translation Adjustment Accumulated

6 unchanged sentences

Balance at June 26, 2022 $ ( 81,755 ) $ ( 12,330 ) $ ( 1,637 ) $ ( 14,260 ) $ ( 109,982 )

Other comprehensive income before reclassifications 7,861 185 570 572 9,188

Other comprehensive income (loss) before reclassifications 11,588 ( 3,135 ) 1,222 848 10,523

Gains reclassified from accumulated other comprehensive loss to net income (1)

1 unchanged sentence

Net current-period other comprehensive income (loss) 11,588 ( 8,613 ) 1,064 848 4,887

Balance at December 25, 2022 $ ( 73,894 ) $ ( 20,169 ) $ ( 1,120 ) $ ( 13,688 ) $ ( 108,871 )

Balance at March 26, 2023 $ ( 70,167 ) $ ( 20,943 ) $ ( 573 ) $ ( 13,412 ) $ ( 105,095 )

(1) Amount of after-tax gains reclassified from AOCI into net income is not material in the aggregate, or to any individual location in our Condensed Consolidated Statements of Operations.

Lam Research Corporation 2023 Q2 10-Q 19

NOTE 17 — BUSINESS COMBINATIONS

3 unchanged sentences

The preliminary fair value of net tangible liabilities assumed and intangible assets acquired was based on preliminary valuations, estimates, and assumptions which are subject to change within the measurement period (up to one year from the acquisition date).

The Company expensed all associated costs, as incurred, in selling, general, and administrative expense in the Condensed Consolidated Statement of Operations for the three and six months ended December 25, 2022.

The following table is a summary of the preliminary fair value estimates of the identifiable intangible assets and their useful lives:

4 unchanged sentences

In process research and development Indefinite 30,081

NOTE 18 — SUBSEQUENT EVENT

In January 2023, the Company announced its plan to reduce headcount by approximately 1,300 employees as part of restructuring activity that will commence in the three months ended March 26, 2023.

The Company estimates it will incur approximately $ 80.0 million in connection with this activity.

NOTE 18 — RESTRUCTURING CHARGES, NET

The Company records employee severance and separation costs that meet the requirements for recognition in accordance with the relevant guidance of ASC 420, Exit or Disposal Cost Obligations, or ASC 712, Compensation - Non-retirement Post-employment Benefits, as applicable.

For involuntary termination benefits that are not provided under the terms of an ongoing benefit arrangement, the liability for the current fair value of expected future costs associated with a management-approved restructuring plan is recognized in the period in which the plan is communicated to the employees and the plan is not expected to change significantly.

For ongoing benefit arrangements, inclusive of statutory requirements, employee termination costs are accrued when the existing situation or set of circumstances indicates that an obligation has been incurred, it is probable the benefits will be paid, and the amount can be reasonably estimated.

Termination benefits associated with employees that elected to voluntarily terminate as part of the restructuring plan are recorded when the employee irrevocably accepts the offer and the amount can be reasonably estimated.

If applicable, the Company records such costs into operating expense over the terminated employees’ future service period beyond any minimum or legally required retention period.

The majority of restructuring charges that have been incurred but not yet paid are recorded in Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets.

Lam Research Corporation 2023 Q3 10-Q 20

In the three and nine months ended March 26, 2023, the Company initiated a restructuring plan designed to better align the Company’s cost structure with its outlook for the economic environment and business opportunities.

Under the plan the Company terminated approximately 1,400 employees, incurring expenses related to employee severance and separation costs.

Employee severance and separation costs primarily relate to severance, non-cash severance, including equity award compensation expense, pension and other termination benefits.

Additionally, the Company made a strategic decision to relocate certain manufacturing activities to pre-existing facilities.

During the three and nine months ended March 26, 2023, net restructuring costs of $ 66.7 million and $ 40.4 million were recorded in restructuring charges, net - cost of goods sold, and restructuring charges, net - operating expenses, respectively in the Condensed Consolidated Statements of Operations.

The Company anticipates the restructuring plan to be substantially complete by December 24, 2023, and estimates that incremental restructuring charges totaling approximately $ 40 million will be incurred through the fiscal quarter ending December 24, 2023.

The following table is a summary of the activity related to the restructuring plan:

Severance and Benefits Other Total

(in thousands)

Restructuring expense $ 98,508 $ 8,620 $ 107,128

Cash payments ( 20,658 ) ( 2,967 ) ( 23,625 )

Non-cash activities ( 2,269 ) ( 794 ) ( 3,063 )

Restructuring liability as of March 26, 2023 $ 75,581 $ 4,859 $ 80,440

Lam Research Corporation 2023 Q3 10-Q 21

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements