What changed in this filing

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Item 1. Financial Statements

2024-01-29 compared with 2023-10-23 · 155 added, 138 removed, 376 unchanged (44% of the section changed)

3 unchanged sentences

(in thousands, except per share data)

Three Months Ended

September 24,

2023 September 25,

Three Months Ended Six Months Ended

2023 December 25,

2022 December 24,

2023 December 25,

Revenue $ 3,758,259 $ 5,277,569 $ 7,240,321 $ 10,351,690

23 unchanged sentences

(in thousands)

Three Months Ended

September 24,

2023 September 25,

Three Months Ended Six Months Ended

2023 December 25,

2022 December 24,

2023 December 25,

Net income $ 954,266 $ 1,468,507 $ 1,841,664 $ 2,894,386

2 unchanged sentences

Cash flow hedges:

Net unrealized gains during the period 8,598 18,803

Net gains reclassified into net income ( 8,917 ) ( 9,297 )

Net unrealized gains (losses) during the period 1,671 ( 18,618 ) 10,269 185

Net (gains) losses reclassified into net income ( 12,826 ) 1,273 ( 21,743 ) ( 8,024 )

( 11,155 ) ( 17,345 ) ( 11,474 ) ( 7,839 )

2 unchanged sentences

Net gains reclassified into net income — — ( 10 ) ( 53 )

102 490 274 517

Defined benefit plans, net change in unrealized component 179 279 360 572

Other comprehensive loss, net of tax ( 20,644 ) ( 23,783 )

Other comprehensive income (loss), net of tax 3,656 24,894 ( 16,988 ) 1,111

Comprehensive income $ 957,922 $ 1,493,401 $ 1,824,676 $ 2,895,497

4 unchanged sentences

(in thousands, except per share data)

September 24,

2023 June 25,

2 unchanged sentences

Investments 14,720 37,641

Accounts receivable, less allowance of $ 5,255 as of September 24, 2023, and $ 5,344 as of June 25, 2023

Accounts receivable, less allowance of $ 5,322 as of December 24, 2023, and $ 5,344 as of June 25, 2023

2,707,458 2,823,376

22 unchanged sentences

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

authorized, 400,000 shares as of September 24, 2023 and June 25, 2023;

issued and outstanding, 132,072 shares as of September 24, 2023, and 133,297 shares as of June 25, 2023

authorized, 400,000 shares as of December 24, 2023 and June 25, 2023;

issued and outstanding, 131,278 shares as of December 24, 2023, and 133,297 shares as of June 25, 2023

Additional paid-in capital 7,997,251 7,809,002

Treasury stock, at cost;

162,646 shares as of September 24, 2023, and 161,380 shares as of June 25, 2023

163,472 shares as of December 24, 2023, and 161,380 shares as of June 25, 2023

( 23,004,358 ) ( 21,530,353 )

9 unchanged sentences

(in thousands) (unaudited)

Three Months Ended

September 24,

2023 September 25,

Six Months Ended

2023 December 25,

CASH FLOWS FROM OPERATING ACTIVITIES:

9 unchanged sentences

Capital expenditures and intangible assets ( 192,268 ) ( 303,441 )

Business acquisitions, net of cash acquired — ( 119,955 )

Proceeds from maturities of available-for-sales securities 23,116 32,438

5 unchanged sentences

Dividends paid ( 494,746 ) ( 441,595 )

Reissuance of treasury stock related to employee stock purchase plan 53,081 44,996

Proceeds from issuance of common stock 4,522 7,673

2 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 4,306 ) 953

Net (decrease) increase in cash, cash equivalents, and restricted cash ( 460,563 ) 733,919

Net change in cash, cash equivalents, and restricted cash 38,150 962,525

Cash, cash equivalents, and restricted cash at beginning of period (1)

3 unchanged sentences

Schedule of non-cash transactions:

Accrued payables for stock repurchases $ 37,768 $ 88

Accrued payables for stock repurchases, including applicable excise tax $ 37,263 $ 30,125

Accrued payables for capital expenditures 63,126 94,494

1 unchanged sentence

Transfers of finished goods inventory to property and equipment 37,927 56,932

Reconciliation of cash, cash equivalents, and restricted cash September 24,

2023 September 25,

Reconciliation of cash, cash equivalents, and restricted cash December 24,

2023 December 25,

Cash and cash equivalents $ 5,623,289 $ 4,484,716

Restricted cash and cash equivalents (1)

2,233 251,344

Total cash, cash equivalents, and restricted cash $ 5,625,522 $ 4,736,060

6 unchanged sentences

Three Months Ended

September 24, 2023

December 24, 2023

Shares Common

5 unchanged sentences

Earnings Total

Balance at September 24, 2023 132,072 $ 132 $ 7,879,031 $ ( 22,365,872 ) $ ( 121,350 ) $ 22,655,389 $ 8,047,330

Issuance of common stock 32 — 1,704 — — — 1,704

Purchase of treasury stock ( 976 ) ( 1 ) — ( 644,952 ) — — ( 644,953 )

Reissuance of treasury stock 150 — 46,615 6,466 — — 53,081

Equity-based compensation expense — — 69,901 — — — 69,901

Net income — — — — — 954,266 954,266

Other comprehensive income — — — — 3,656 — 3,656

Cash dividends declared ($ 2.00 per common share)

— — — — — ( 262,507 ) ( 262,507 )

Balance at December 24, 2023 131,278 $ 131 $ 7,997,251 $ ( 23,004,358 ) $ ( 117,694 ) $ 23,347,148 $ 8,222,478

Six Months Ended

December 24, 2023

Shares Common

Stock Additional

Capital Treasury

Stock Accumulated

Comprehensive

Loss Retained

Earnings Total

Balance at June 25, 2023 133,297 $ 133 $ 7,809,002 $ ( 21,530,353 ) $ ( 100,706 ) $ 22,032,096 $ 8,210,172

1 unchanged sentence

Purchase of treasury stock ( 2,242 ) ( 2 ) — ( 1,480,471 ) — — ( 1,480,473 )

Reissuance of treasury stock 150 — 46,615 6,466 — — 53,081

Equity-based compensation expense — — 137,112 — — — 137,112

3 unchanged sentences

— — — — — ( 526,612 ) ( 526,612 )

Balance at September 24, 2023 132,072 $ 132 $ 7,879,031 $ ( 22,365,872 ) $ ( 121,350 ) $ 22,655,389 $ 8,047,330

Balance at December 24, 2023 131,278 $ 131 $ 7,997,251 $ ( 23,004,358 ) $ ( 117,694 ) $ 23,347,148 $ 8,222,478

See Notes to Condensed Consolidated Financial Statements

Lam Research Corporation 2024 Q2 10-Q 7

Three Months Ended

September 25, 2022

December 25, 2022

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

Issuance of common stock 31 — 877 — — — 877

Purchase of treasury stock ( 1,133 ) ( 1 ) — ( 486,312 ) — — ( 486,313 )

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

Equity-based compensation expense — — 73,084 — — — 73,084

Net income — — — — — 1,468,507 1,468,507

Other comprehensive income — — — — 24,894 — 24,894

Cash dividends declared ($ 1.725 per common share)

— — — — — ( 233,977 ) ( 233,977 )

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

Shares Common

Stock Additional

Capital Treasury

Stock Accumulated

Comprehensive

Loss Retained

Earnings Total

Balance at June 26, 2022 136,975 $ 137 $ 7,414,916 $ ( 19,481,429 ) $ ( 109,982 ) $ 18,454,724 $ 6,278,366

1 unchanged sentence

Purchase of treasury stock ( 1,819 ) ( 2 ) — ( 596,132 ) — — ( 596,134 )

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

Equity-based compensation expense — — 144,194 — — — 144,194

Net income — — — — — 2,894,386 2,894,386

Other comprehensive loss — — — — ( 23,783 ) — ( 23,783 )

Other comprehensive income — — — — 1,111 — 1,111

Cash dividends declared ($ 3.450 per common share)

— — — — — ( 469,957 ) ( 469,957 )

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

See Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 24, 2023

December 24, 2023

NOTE 1 — BASIS OF PRESENTATION

8 unchanged sentences

The Company’s current fiscal year will end June 30, 2024 and includes 53 weeks.

The quarters ended September 24, 2023 (the “September 2023 quarter”) and September 25, 2022 included 13 weeks.

The quarters ended December 24, 2023 (the “December 2023 quarter”) and December 25, 2022 included 13 weeks.

Reclassification:

2 unchanged sentences

Recently Adopted or Effective

The Company has not adopted any new accounting standards during the first quarter of fiscal year 2024 that have a material impact on the Company’s Condensed Consolidated Financial Statements.

The Company has not adopted any new accounting standards during the six months ended December 24, 2023 that have a material impact on the Company’s Condensed Consolidated Financial Statements.

Updates Not Yet Effective

There are no new accounting standards not yet adopted or effective that are expected to have a material impact on the Company’s Condensed Consolidated Financial Statements.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,” which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources.

The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is required to adopt this standard in the fiscal year 2025 for the annual reporting period ending June 29, 2025, with retrospective disclosure of prior periods presented.

The Company is currently in the process of evaluating the impact of adoption on its Consolidated Financial Statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures,” which requires public entities to disclose consistent categories and greater disaggregation of information in the rate reconciliation and for income taxes paid.

It also includes certain other amendments to improve the effectiveness of income tax disclosures.

The guidance is effective for financial statements issued for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is required to adopt this standard prospectively in fiscal year 2026 for the annual reporting period ending June 28, 2026.

The Company is currently in the process of evaluating the impact of adoption on its Consolidated Financial Statements.

NOTE 3 — REVENUE

8 unchanged sentences

memory, foundry, and logic/integrated device manufacturing.

Lam Research Corporation 2024 Q2 10-Q 9

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

Three Months Ended

September 24,

2023 September 25,

Three Months Ended Six Months Ended

2023 December 25,

2022 December 24,

2023 December 25,

(In thousands)

4 unchanged sentences

Customer support-related revenue includes sales of customer service, spares, upgrades, and non-leading-edge equipment from the Company’s Reliant product line.

Lam Research Corporation 2024 Q1 10-Q 8

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

Three Months Ended

September 24,

2023 September 25,

Three Months Ended Six Months Ended

2023 December 25,

2022 December 24,

2023 December 25,

(In thousands)

2 unchanged sentences

Japan 512,845 575,945 837,365 1,034,638

United States 282,224 304,977

Taiwan 499,883 991,173 742,373 2,112,119

United States 218,789 503,238 501,013 808,215

Europe 175,767 337,818 414,236 600,406

2 unchanged sentences

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

September 24,

2023 September 25,

Three Months Ended Six Months Ended

2023 December 25,

2022 December 24,

2023 December 25,

Memory 48 % 50 % 43 % 50 %

2 unchanged sentences

Deferred Revenue

Revenue of $ 561.8 million included in deferred profit at June 25, 2023 was recognized during the three months ended September 24, 2023, representing 31 % of the $ 1,837.9 million of deferred revenue as of June 25, 2023.

The following table summarizes the transaction price for contracts that have not yet been recognized as revenue as of September 24, 2023 and when the Company expects to recognize the amounts as revenue:

Revenue of $ 364.1 million and $ 925.8 million included in deferred profit at June 25, 2023 was recognized during the three and six months ended December 24, 2023, representing 20 % and 50 %, respectively, of the $ 1,837.9 million of deferred revenue as of June 25, 2023.

The following table summarizes the transaction price for contracts that have not yet been recognized as revenue as of December 24, 2023 and when the Company expects to recognize the amounts as revenue:

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

2 unchanged sentences

(1) This amount is reported in Deferred profit on the Company's Condensed Consolidated Balance Sheets as the customers can demand the liability to be performed at any time.

Lam Research Corporation 2024 Q2 10-Q 10

NOTE 4 — EQUITY-BASED COMPENSATION PLANS

5 unchanged sentences

The Company also has an employee stock purchase plan that allows employees to purchase its Common Stock at a discount through payroll deductions.

Lam Research Corporation 2024 Q1 10-Q 9

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

September 24,

2023 September 25,

Three Months Ended Six Months Ended

2023 December 25,

2022 December 24,

2023 December 25,

(in thousands)

3 unchanged sentences

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

Three Months Ended

September 24,

2023 September 25,

Three Months Ended Six Months Ended

2023 December 25,

2022 December 24,

2023 December 25,

(in thousands)

1 unchanged sentence

Interest expense ( 46,313 ) ( 46,661 ) ( 91,644 ) ( 92,713 )

(Losses) gains on deferred compensation plan-related assets, net ( 2,901 ) ( 12,726 )

Foreign exchange gains (losses), net 1,269 6,821

Gains (losses) on deferred compensation plan-related assets, net 25,530 10,871 22,629 ( 1,855 )

Foreign exchange (losses) gains, net ( 568 ) ( 10,114 ) 701 ( 3,293 )

Other, net ( 6,405 ) ( 8,455 ) ( 13,405 ) ( 14,649 )

2 unchanged sentences

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

Three Months Ended

September 24,

2023 September 25,

Three Months Ended Six Months Ended

2023 December 25,

2022 December 24,

2023 December 25,

(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 months ended September 24, 2023 and September 25, 2022 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 six months ended December 24, 2023 and December 25, 2022 was primarily due to income in lower tax jurisdictions.

On August 16, 2022, the Inflation Reduction Act (the “IRA”) was signed into law.

7 unchanged sentences

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

Lam Research Corporation 2024 Q2 10-Q 11

The Company is in various stages of examinations in connection with all of its tax audits worldwide, and it is difficult to determine when these examinations will be settled.

1 unchanged sentence

The change in uncertain tax positions as a result of lapses of statutes of limitation may range up to $ 12.4 million.

Lam Research Corporation 2024 Q1 10-Q 10

NOTE 7 — NET INCOME PER SHARE

2 unchanged sentences

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

Three Months Ended

September 24,

2023 September 25,

Three Months Ended Six Months Ended

2023 December 25,

2022 December 24,

2023 December 25,

(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 months ended September 24, 2023 and September 25, 2022.

The impact from potentially dilutive securities, including options and RSUs, was not material for the three and six months ended December 24, 2023 and December 25, 2022.

NOTE 8 — FINANCIAL INSTRUMENTS

The Company’s investment strategies and investment and fair value policies are unchanged from those disclosed in Note 9, “Financial Instruments,” to our Consolidated Financial Statements in Part II, Item 8 of our 2023 Form 10-K.

The financial statement impacts to the Condensed Consolidated Statement of Operations from debt and equity investments were not material as of and for the three months ended September 24, 2023 and September 25, 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, and other assets measured at fair value on a recurring basis as of September 24, 2023, and June 25, 2023:

September 24, 2023

(Reported Within)

Cost Unrealized

Gain Unrealized

(Loss) Fair Value Cash and

Equivalents Investments Other

(in thousands)

Money market funds $ 1,657,890 $ — $ — $ 1,657,890 $ 1,657,890 $ — $ —

Mutual funds 100,113 16,826 ( 1,973 ) 114,966 — — 114,966

Level 1 Total 1,758,003 16,826 ( 1,973 ) 1,772,856 1,657,890 — 114,966

Corporate notes and bonds 30,727 2 ( 172 ) 30,557 — 30,557 —

Level 2 Total 30,727 2 ( 172 ) 30,557 — 30,557 —

Total subject to fair value hierarchy $ 1,788,730 $ 16,828 $ ( 2,145 ) $ 1,803,413

Cash $ 1,772,866 $ 1,772,207 $ — $ 659

Time deposits 1,696,053 1,696,053 — —

Total $ 5,272,332 $ 5,126,150 $ 30,557 $ 115,625

Lam Research Corporation 2024 Q1 10-Q 11

As of December 24, 2023 and June 25, 2023 the fair value of mutual funds and debt and equity investments were not material.

The financial statement impacts to the Condensed Consolidated Statement of Operations from debt and equity investments were not material as of and for the three and six months ended December 24, 2023 and December 25, 2022.

The financial instruments reported within Cash and Cash Equivalents in the Company’s Condensed Consolidated Balance Sheets as of December 24, 2023, and June 25, 2023 consisted of the following:

2023 June 25,

(Reported Within)

Cost Unrealized

Gain Unrealized

(Loss) Fair Value Cash and

Equivalents Investments Other

(in thousands)

Money market funds $ 2,223,642 $ — $ — $ 2,223,642 $ 2,223,642 $ — $ —

Mutual funds 96,646 12,092 ( 2,069 ) 106,669 — — 106,669

Level 1 Total 2,320,288 12,092 ( 2,069 ) 2,330,311 2,223,642 — 106,669

Corporate notes and bonds 38,033 — ( 392 ) 37,641 — 37,641 —

Level 2 Total 38,033 — ( 392 ) 37,641 — 37,641 —

Total subject to fair value hierarchy $ 2,358,321 $ 12,092 $ ( 2,461 ) $ 2,367,952

Money market funds (fair value measured on a recurring basis, level 1) $ 2,155,586 $ 2,223,642

Cash 1,718,520 2,132,522

1 unchanged sentence

Total $ 5,623,289 $ 5,337,056

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

September 24, 2023

Unrealized Losses

Less than 12 Months Unrealized Losses

12 Months or Greater Total

Fair Value Gross

(in thousands)

Mutual funds $ 599 $ ( 6 ) $ 21,788 $ ( 1,967 ) $ 22,387 $ ( 1,973 )

Corporate notes and bonds 5,378 ( 1 ) 17,834 ( 171 ) 23,212 ( 172 )

$ 5,977 $ ( 7 ) $ 39,622 $ ( 2,138 ) $ 45,599 $ ( 2,145 )

The amortized cost and fair value of cash equivalents, investments, and restricted investments with contractual maturities as of September 24, 2023 are as follows:

(in thousands)

Due in one year or less $ 3,384,670 $ 3,384,500

Due after one year through five years — —

$ 3,384,670 $ 3,384,500

The Company has the ability, if necessary, to liquidate its investments in order to meet the Company’s liquidity needs in the next 12 months.

Accordingly, those investments with contractual maturities greater than 12 months from the date of purchase nonetheless are classified as short-term on the accompanying Condensed Consolidated Balance Sheets.

In addition, as of June 25, 2023 the Company had time deposits of $ 250.0 million reported within other assets in the Condensed Consolidated Balance Sheets.

Derivative Instruments and Hedging

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 2023 Form 10-K.

As of September 24, 2023 and June 25, 2023 the fair value of outstanding cash flow and balance sheet hedges were not material.

The financial statement impacts to the Condensed Consolidated Statement of Operations from derivative instruments and hedging activities were not material as of and for the three months ended September 24, 2023 and September 25, 2022.

As of December 24, 2023 and June 25, 2023 the fair value of outstanding cash flow and balance sheet hedges were not material.

The financial statement impacts to the Condensed Consolidated Statement of Operations from derivative instruments and hedging activities were not material as of and for the three and six months ended December 24, 2023 and December 25, 2022.

Lam Research Corporation 2024 Q2 10-Q 12

5 unchanged sentences

Inventories consist of the following:

September 24,

2023 June 25,

5 unchanged sentences

NOTE 10 — GOODWILL AND INTANGIBLE ASSETS

The balance of goodwill is approximately $ 1.6 billion as of September 24, 2023 and June 25, 2023.

As of September 24, 2023 and June 25, 2023, $ 65.4 million of the goodwill balance is tax deductible and the remaining balance is not tax deductible due to purchase accounting and applicable foreign law.

The balance of goodwill is approximately $ 1.6 billion as of December 24, 2023 and June 25, 2023.

As of December 24, 2023 and June 25, 2023, $ 65.4 million of the goodwill balance is tax deductible and the remaining balance is not tax deductible due to purchase accounting and applicable foreign law.

Intangible Assets

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

September 24, 2023 June 25, 2023

December 24, 2023 June 25, 2023

Gross Accumulated

8 unchanged sentences

Total intangible assets $ 1,591,573 $ ( 1,440,492 ) $ 151,081 $ 1,591,082 $ ( 1,422,628 ) $ 168,454

The Company recognized $ 14.0 million and $ 11.6 million in intangible asset amortization expense during the three months ended September 24, 2023 and September 25, 2022, respectively.

The Company recognized $ 12.8 million and $ 12.2 million in intangible asset amortization expense during the three months ended December 24, 2023 and December 25, 2022, respectively.

The Company recognized $ 26.8 million and $ 23.8 million in intangible asset amortization expense during the six months ended December 24, 2023 and December 25, 2022, respectively.

Lam Research Corporation 2024 Q2 10-Q 13

The estimated future amortization expense of intangible assets as of September 24, 2023, is reflected in the table below.

The estimated future amortization expense of intangible assets as of December 24, 2023, is reflected in the table below.

The table excludes $ 22.4 million of capitalized costs for intangible assets that have not been placed into service.

5 unchanged sentences

Accrued expenses and other current liabilities consist of the following:

September 24,

2023 June 25,

7 unchanged sentences

$ 1,975,945 $ 2,010,637

(1) The balance in income and other taxes payable includes an accrual of $ 180.0 million related to federal estimated taxes for which payment is deferred until our quarter ending December 24, 2023, under the IRS Federal tax relief for California disaster area taxpayers.

NOTE 12 — LEASES

The Company elected to exercise purchase options available under its finance leases for certain improved properties in Fremont and Livermore, California (the “California Facility Leases”) in the three months ended September 24, 2023.

As a result, the Company released cash collateral in an aggregate of approximately $ 250.0 million of restricted cash that is reported in Other assets in the Company’s Condensed Consolidated Balance Sheet.

As a result, the Company released cash collateral in an aggregate of approximately $ 250.0 million of restricted cash that was reported in Other assets in the Company’s Condensed Consolidated Balance Sheet.

Additionally, guarantees made to the lessor that each property would have a certain minimum residual value totaling $ 298.4 million as of June 25, 2023 in the aggregate were eliminated with the extinguishment of the California Facilities Leases.

3 unchanged sentences

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

As of September 24, 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.

As of December 24, 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.

1 unchanged sentence

The Company does not believe that it is probable that any material amounts will be paid under these guarantees.

Lam Research Corporation 2024 Q1 10-Q 14

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 September 24, 2023, the maximum potential amount of future payments that the Company could be required to make under these arrangements and letters of credit was $ 197.9 million.

As of December 24, 2023, the maximum potential amount of future payments that the Company could be required to make under these arrangements and letters of credit was $ 196.9 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.

Lam Research Corporation 2024 Q2 10-Q 14

In addition, the Company has entered into indemnification agreements with its directors, officers, and certain other employees, consistent with its Bylaws and Certificate of Incorporation;

4 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 September 24, 2023, warranty reserves totaling $ 24.8 million were reported 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 December 24, 2023, warranty reserves totaling $ 17.7 million were reported 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

September 24,

2023 September 25,

Three Months Ended Six Months Ended

2023 December 25,

2022 December 24,

2023 December 25,

(in thousands)

15 unchanged sentences

This repurchase program has no termination date and may be suspended or discontinued at any time.

Lam Research Corporation 2024 Q1 10-Q 15

Repurchases under the repurchase program were as follows during the periods indicated:

7 unchanged sentences

Quarter ended September 24, 2023 1,257 $ 829,874 $ 660.01 $ 2,707,343

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

Quarter ended December 24, 2023 970 $ 640,267 $ 660.04 $ 2,067,076

(1) 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 shares repurchased in the Condensed Consolidated Statement of Stockholders’ Equity and the calculation of the average price paid per share.

In addition to the shares repurchased under the Board-authorized repurchase program shown above, during the three months ended September 24, 2023, the Company acquired 9 thousand shares at a total cost of $ 5.5 million, 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.

Lam Research Corporation 2024 Q2 10-Q 15

In addition to the shares repurchased under the Board-authorized repurchase program shown above, during the three and six months ended December 24, 2023, the Company acquired 6 thousand shares at a total cost of $ 4.5 million and 15 thousand shares at a total cost of $ 10.0 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.

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In the fiscal year ended June 25, 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 1,650 employees, incurring expenses related to employee severance and separation costs.

Under the plan, through December 24, 2023, the Company terminated approximately 1,650 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 and incurred charges to move inventory and equipment and exit selected supplier arrangements.

During the three months ending September 24, 2023, net restructuring costs of $ 7.9 million and $ 2.0 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.

No restructuring charges were recognized during the three months ending September 25, 2022.

The cumulative cost of the restructuring plan as of September 24, 2023 was $ 130.3 million.

The Company anticipates the restructuring plan to be substantially complete by December 24, 2023, and estimates that incremental restructuring charges totaling approximately $ 7 million will be incurred in the fiscal quarter ending December 24, 2023.

During the three months ended December 24, 2023, net restructuring costs of $ 15.0 million and $ 1.7 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.

During the six months ended December 24, 2023, net restructuring costs of $ 22.9 million and $ 3.7 million were recorded in restructuring charges, net - cost of goods sold, and restructuring charges, net - operating expenses, respectively.

No restructuring charges were recognized during the three and six months ended December 25, 2022.

The restructuring plan is expected to be substantially completed by the June 2024 quarter, and cumulative costs as of December 24, 2023 total $ 146.9 million.

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

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Non-cash activities 53 ( 6,923 ) ( 6,870 )

Restructuring liability as of September 24, 2023 $ 2,992 $ 487 $ 3,479

Restructuring liability as of December 24, 2023 $ 2,823 $ 874 $ 3,697

Lam Research Corporation 2024 Q2 10-Q 16

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