Lam Research (LRCX) 10-K risk factor changes: FY2020 vs FY2019

In addition to the other information in this Annual Report on Form 10-K [removed: (“2019] [added: (“2020] Form 10-K”), the following risk factors should be carefully considered in evaluating us and our business because such factors may significantly impact our business, operating results, and financial condition.

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Lam Research Corporation [removed: 2019] [added: 2020] 10-K 14

[removed: ][added: ]

[added: Our success will depend, to a] significant extent, on the ability of our executive officers and other members of our senior management to identify and respond to these challenges effectively.

Lam Research Corporation [removed: 2019] [added: 2020] 10-K 15

| • | customer cancellations or delays in shipments, installations, [added: customer payments,] and/or customer acceptances; |

| • | transportation, communication, demand, information technology, or supply disruptions based on factors outside our control, such as strikes, acts of God, wars, terrorist activities, [added: widespread outbreak of illness,] and natural or man-made disasters; |

| • | changes in our estimated effective tax rate; [added: and] |

| • | foreign currency exchange rate [removed: fluctuations; and] [added: fluctuations.] |

Our Leverage and Debt Service Obligations [removed: and Potential Note Conversion or Related Hedging Activities] May Adversely Affect Our Financial Condition, Results of Operations, and Earnings per Share

We have [removed: $4.5] [added: $5.8] billion in aggregate principal amount of senior unsecured [removed: notes, convertible notes,] [added: notes] and [removed: commercial paper instruments] [added: convertible notes] outstanding.

Our revolving credit facility also includes an option to increase the amount up to an additional [removed: $600] [added: $600.0] million, for a potential total commitment of $1.85 billion.

Lam Research Corporation [removed: 2019] [added: 2020] 10-K 16

Lam Research Corporation [removed: 2019] [added: 2020] 10-K 17

Our investments and acquisitions may not be as successful as we may expect, particularly [removed: as] [added: in the event that] we [removed: seek to] invest [added: in] or acquire product lines and technologies that are new to us.

Our products are priced up to approximately [removed: $11] [added: $15] million per system.

Lam Research Corporation [removed: 2019] [added: 2020] 10-K 18

In addition, the fact that we offer limited product lines creates the risk that our customers may view us as less important to their business than our competitors that offer additional products and/or product [removed: capabilities.][added: capabilities, including new products that take advantage of “big data” or other new technologies such as machine learning and artificial intelligence.]

The outcomes of such an alliance can be the definition of a particular tool set for a certain function and/or the standardization of a series of process steps that use a specific set of manufacturing equipment, while the outcomes of consolidation can lead to an overall reduction in the market for semiconductor manufacturing equipment as customers’ operations achieve economies of scale and/or increased purchasing [removed: power based on their higher volumes.]

Lam Research Corporation [removed: 2019] [added: 2020] 10-K 19

These locations are subject to disruption for a variety of reasons, such as natural or man-made disasters, [added: widespread outbreaks of illness,] terrorist activities, [added: political or governmental unrest or instability,] disruptions of our information technology resources, utility interruptions, or other events beyond our control.

Results of Operation of this [removed: 2019] [added: 2020] Form 10-K, accounted for approximately 92%, [removed: 93%,] [added: 92%,] and [removed: 92%] [added: 93%] of total revenue in fiscal years [added: 2020,] 2019, [removed: 2018,] and [removed: 2017,] [added: 2018,] respectively.

Lam Research Corporation [removed: 2019] [added: 2020] 10-K 20

| • | domestic and international trade [added: regulations,] policies, practices, relations, disputes and issues; |

| • | developing customers and/or suppliers, who may have limited access to capital [removed: resources.] [added: resources;] |

| • | [added: changes in and] compliance with U.S. and international laws and regulations affecting foreign operations, including U.S. and international trade restrictions and sanctions, anti-bribery, anti-corruption, environmental, tax, and labor laws; |

Tariffs, export controls, additional taxes, trade [removed: barriers] [added: barriers, sanctions,] or [removed: sanctions] [added: the termination or modification of trade agreements, trade zones, and other duty mitigation initiatives,] may increase our manufacturing costs, decrease margins, reduce the competitiveness of our products, or inhibit our ability to sell products or purchase necessary equipment and supplies, which could have a material adverse effect on our business, results of operations, or financial conditions.

Certain [added: of our] international sales depend on our ability to obtain export licenses from the U.S. or foreign governments.

Our [removed: failure or] inability to obtain such licenses, or an expansion of the number or kinds of sales for which export licenses are required, could potentially limit [added: the market for] our [removed: markets] [added: products] and [added: adversely] impact our revenues.

[removed: Many of the challenges noted above are applicable in China, which is] [added: China represents] a [added: large and] fast-developing market for the semiconductor equipment industry and therefore [removed: an area of anticipated growth for] [added: is important to] our business.

[removed: Moreover, by hedging these] foreign currency denominated revenues, expenses, monetary assets, and liabilities, we may miss favorable currency trends that would have been advantageous to us but for the hedges.

Lam Research Corporation [removed: 2019] [added: 2020] 10-K 21

We have experienced [removed: cyber] [added: cybersecurity and other] threats and incidents in the past.

Although past threats and incidents have not resulted in a material adverse effect, we may incur material losses related to [removed: cyber] [added: cybersecurity and other] threats or incidents in the future.

If we were subject to a [removed: cyber] [added: cybersecurity and other] incident, it could have a material adverse effect on our business.

| • | Misappropriation or theft of our or a [removed: customer, supplier] [added: customer’s, supplier’s] or other party's assets or resources, [added: including technology data, intellectual property or other sensitive information] and costs associated therewith; |

Lam Research Corporation [removed: 2019] [added: 2020] 10-K 22

While we have implemented ISO 27001 compliant security procedures and virus protection software, intrusion prevention systems, identity and access control, and emergency recovery processes, and we carefully select our third-party providers of information systems, to mitigate risks to the information systems that we rely on, [added: and to our technology, data, intellectual property and other sensitive information,] those [added: security procedures and] mitigation and protection systems cannot be guaranteed to be fail-safe and we may still suffer [removed: cyber-related] [added: cybersecurity and other] incidents.

Our effective tax rate could be adversely affected by changes in the split of earnings between countries with differing statutory tax rates, in the valuation allowance [removed: of deferred tax assets, in tax laws, by material audit assessments, or by changes in or expirations of agreements with tax authorities.]

Many of the following risk factors are, and will be, exacerbated by the COVID-19 pandemic and any worsening of the global business and economic environment as a result.

The Recent COVID-19 Outbreak Has Adversely Impacted, and May Continue to Adversely Impact, Our Business, Operations, and Financial Results

The COVID-19 outbreak and efforts by national, state and local governments worldwide to control its spread have resulted in widespread measures aimed at containing the disease such as quarantines, travel bans, shutdowns, and shelter in place or “stay at home” orders, which collectively have significantly restricted the movement of people and goods and the ability of businesses to operate.

These restrictions and measures, incidents of confirmed or suspected infections within our workforce or those of our suppliers or other business partners, and our efforts to act in the best interests of our employees, customers, and suppliers, have affected and are affecting our business and operations by, among other things, causing facility closures, production delays and capacity limitations; disrupting production by our supply chain; disrupting the transport of goods from our supply chain to us and from us to our customers; requiring modifications to our business processes; requiring the implementation of business continuity plans; requiring the development and qualification of alternative sources of supply; requiring the implementation of social distancing measures that require changes to existing manufacturing processes; disrupting business travel; disrupting our ability to staff our on-site manufacturing and research and development facilities; delaying capital expansion projects; and necessitating teleworking by a large proportion of our workforce.

These impacts have caused and are expected to continue to cause delays in product shipments and product development, increases in costs, and decreases in revenue, profitability and cash from operations, which have caused and are expected to cause an adverse effect on our results of operations that may be material.

The potential duration and impact of the outbreak on the global economy and on our business are difficult to predict and cannot be estimated with any degree of certainty, but the outbreak has resulted in significant disruption of global financial markets, increases in levels of unemployment, and economic uncertainty, which has adversely impacted our business and may continue to do so, and may lead to significant negative impacts on customer spending, demand for our products, the ability of our customers to pay, our financial condition and the financial condition of our suppliers, and our access to external sources of financing to fund our operations and capital expenditures.

For example, the recent COVID-19 outbreak has impacted and could further impact our ability to meet the demand for our products due to production, sourcing, logistics and other challenges resulting from quarantines, shelter in place or “stay at home” orders, facility closures, workforce challenges, and travel and logistics restrictions in connection with the outbreak.

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For example, the recent COVID-19 outbreak has impacted and could further impact our ability to meet the demand for our products due to production, sourcing, logistics and other challenges resulting from quarantines, shelter in place or “stay at home” orders, facility closures, workforce challenges, and travel and logistics restrictions in connection with the outbreak.

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| • | reputational damage; |

It has been difficult and may continue to be difficult to hire and retain employees with substantial cybersecurity acumen.

In addition, our policies and procedures may not be effective in enabling us to identify risks, threats and incidents in a timely manner, or at all, or to respond expediently, appropriately and effectively when incidents occur and repair any damage caused by such incidents, which could have a material adverse effect on our business.

In addition, the emergence of “big data” and new tools such as machine learning and artificial intelligence that capitalize on the availability of large data sets is leading semiconductor manufacturers and equipment manufacturers to pursue new products and approaches that exploit those tools to advance technology development.

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power based on their higher volumes.

For example, the recent COVID-19 outbreak has impacted and could further impact our manufacturing operations, supply chain, and customer support due to production, sourcing, logistics and other challenges resulting from quarantines, “stay at home” orders, facility closures, workforce challenges, and travel and logistics restrictions in connection with the outbreak.

For example, the recent COVID-19 outbreak has impacted and could further impact our manufacturing operations, supply chain, and customer support due to production, sourcing, logistics and other challenges resulting from quarantines, “stay at home” orders, facility closures, workforce challenges, and travel and logistics restrictions in connection with the outbreak.

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For example, the recent COVID-19 outbreak has impacted and could further impact our manufacturing operations, supply chain, and customer support due to production, sourcing, logistics and other challenges resulting from quarantines, “stay at home” orders, facility closures, workforce challenges, and travel and logistics restrictions in connection with the outbreak.

Moreover, by hedging these

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Our Sales to Customers in China, a Region of Growing Significance to Us, Could be Materially and Adversely Affected by Export License Requirements and Other Regulatory Changes, or Other Governmental Actions in the Course of the Trade Relationship Between the U.S. and China.

Revenue in China represented approximately 31%, 22%, and 16% of our total revenue for fiscal years 2020, 2019, and 2018, respectively.

The U.S. and China have historically had a complex relationship that has included actions that have impacted trade between the two countries.

In recent months, these actions have included an expansion of export license requirements imposed by the U.S. government, which could potentially limit the market for our products and adversely impact our revenues.

Specifically, on June 29, 2020, a new rule enacted by the U.S. Department of Commerce took effect that expands export license requirements for U.S. companies to sell certain items to companies in China that are designated as military end-users or have operations that could support military end uses.

This rule may require us to apply for additional export licenses for our products to be sold to certain customers in China, and there is no assurance that we will be issued licenses that we may apply for on a timely basis or at all.

Although we do not currently anticipate a material adverse impact from this rule on our revenues in China, the impact of this rule is uncertain and could change.

In addition, our international sales may also be impacted by export licensing requirements applicable to our customers and their products.

On August 17, 2020, the U.S. Department of Commerce expanded a rule originally published on May 19, 2020 in a manner that could cause foreign-made wafers, chipsets, and certain related items produced with many of our products to be subject to U.S. licensing requirements if Huawei Technologies Co. Ltd (“Huawei”) or its affiliates are parties to a transaction involving the items.

Our success will depend, to a

| • | the dilutive impact of our Convertible Notes (as defined below) on our earnings per share. |

Conversion of our Convertible Notes may cause dilution to our stockholders and to our earnings per share.

The number of shares of our Common Stock into which the Convertible Notes are convertible may be adjusted from time to time, including increases in such rates as a result of dividends that we pay to our stockholders.

Upon conversion of any Convertible Notes, we will deliver cash in the amount of the principal amount of the Convertible Notes and, with respect to any excess conversion value greater than the principal amount of the Convertible Notes, shares of our Common Stock, which would result in dilution to our stockholders.

Prior to the maturity of the Convertible Notes, if the price of our Common Stock exceeds the conversion price, U.S. generally accepted accounting principles require that we report an increase in diluted share count, which would result in lower reported earnings per share.

The price of our Common Stock could also be affected by sales of our Common Stock by investors who view the Convertible Notes as a more attractive means of equity participation in our company and also by hedging activity that may develop involving our Common Stock by holders of the Convertible Notes.

| • | dilutive impacts of our Convertible Notes. |

systems that give us a competitive advantage; increasing market penetration and growth of our installed base; and providing comprehensive support and service to our customers.

Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors, including but not limited to those discussed in “Risk Factors” and elsewhere in this [removed: 2019] [added: 2020] Form 10-K and other documents we file from time to time with the Securities and Exchange Commission.

(See “Cautionary Statement Regarding Forward-Looking Statements” in Part I of this [removed: 2019] [added: 2020] Form 10-K.)

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) provides a description of our results of operations and should be read in conjunction with our Consolidated Financial Statements and accompanying Notes to Consolidated Financial Statements included in Part II, Item 8 of this [removed: 2019] [added: 2020] Form 10-K.

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Lam Research Corporation [removed: 2019] [added: 2020] 10-K [removed: 31][added: 33]

[removed: ][added: ]

This involves the repetition of a set of core processes and can require hundreds of [removed: individual steps.]

[removed: Despite recent semiconductor capital investment volatility, over] [added: Over] the longer term, [added: while there are risks that the impact of COVID-19 to the broader macroeconomic environment may negatively impact our customer demand,] we believe that [added: secular demand for semiconductors will continue to drive sustainable growth for our products and services, and that] technology inflections in our industry, including 3D device scaling, multiple patterning, process flow, and advanced packaging chip [removed: integration,] [added: integration] will lead to an increase in our served addressable market for our products and services in deposition, etch, and clean.

Lam Research Corporation [removed: 2019] [added: 2020] 10-K [removed: 32][added: 34]

| June [removed: 30, 2019] [added: 28, 2020] | | | | June [removed: 24, 2018] [added: 30, 2019] | | | | June [removed: 25, 2017] [added: 24, 2018] | | | | [removed: FY19] [added: FY20] vs. [removed: FY18] [added: FY19] | | | | | | | [removed: FY18] [added: FY19] vs. [removed: FY17] [added: FY18] | | | | | | |

| Revenue | $ | [removed: 9,653,559] [added: 10,044,736] | | | $ | [removed: 11,076,998] [added: 9,653,559] | | | $ | [removed: 8,013,620] [added: 11,076,998] | | | $ | [removed: (1,423,439] [added: 391,177] | [removed: )] | | [removed: (12.9] [added: 4.1] | [removed: )%] [added: %] | | $ | [removed: 3,063,378] [added: (1,423,439] | [added: )] | | [removed: 38.2] [added: (12.9] | [removed: %] [added: )%] |

| Gross margin | $ | [removed: 4,358,459] [added: 4,608,693] | | | $ | [removed: 5,165,032] [added: 4,358,459] | | | $ | [removed: 3,603,359] [added: 5,165,032] | | | $ | [removed: (806,573] [added: 250,234] | [removed: )] | | [removed: (15.6] [added: 5.7] | [removed: )%] [added: %] | | $ | [removed: 1,561,673] [added: (806,573] | [added: )] | | [removed: 43.3] [added: (15.6] | [removed: %] [added: )%] |

| Gross margin as a percent of total revenue | [removed: 45.1] [added: 45.9] | | % | | [removed: 46.6] [added: 45.1] | | % | | [removed: 45.0] [added: 46.6] | | % | | [removed: (1.5)%] [added: 0.8%] | | | | | | | [removed: 1.6%] [added: (1.5)%] | | | | | |

| Total operating expenses | $ | [removed: 1,893,727] [added: 1,934,891] | | | $ | [removed: 1,951,733] [added: 1,893,727] | | | $ | [removed: 1,701,227] [added: 1,951,733] | | | $ | [removed: (58,006] [added: 41,164] | [removed: )] | | [removed: (3.0] [added: 2.2] | [removed: )%] [added: %] | | $ | [removed: 250,506] [added: (58,006] | [added: )] | | [removed: 14.7] [added: (3.0] | [removed: %] [added: )%] |

| Net income | $ | [removed: 2,191,430] [added: 2,251,753] | | | $ | [removed: 2,380,681] [added: 2,191,430] | | | $ | [removed: 1,697,763] [added: 2,380,681] | | | $ | [removed: (189,251] [added: 60,323] | [removed: )] | | [removed: (7.9] [added: 2.8] | [removed: )%] [added: %] | | $ | [removed: 682,918] [added: (189,251] | [added: )] | | [removed: 40.2] [added: (7.9] | [removed: %] [added: )%] |

| Net income per diluted share | $ | [removed: 13.70] [added: 15.10] | | | $ | [removed: 13.17] [added: 13.70] | | | $ | [removed: 9.24] [added: 13.17] | | | $ | [removed: 0.53] [added: 1.40] | | | [removed: 4.0] [added: 10.2] | % | | $ | [removed: 3.93] [added: 0.53] | | | [removed: 42.5] [added: 4.0] | % |

Our cash and cash equivalents, investments, and restricted cash and investments balances totaled approximately [removed: $5.7] [added: $7.0] billion as of June [removed: 30, 2019,] [added: 28, 2020,] compared to [removed: $5.2] [added: $5.7] billion as of June [removed: 24, 2018.][added: 30, 2019.]

Cash flow provided from operating activities was [removed: $3.2] [added: $2.1] billion for fiscal year [removed: 2019] [added: 2020] compared to [removed: $2.7] [added: $3.2] billion for fiscal year [removed: 2018.][added: 2019.]

Cash flow provided from operating activities in fiscal year [removed: 2019] [added: 2020] was primarily used for [removed: $3.8] [added: $1.4] billion in treasury stock purchases, [removed: $678] [added: $657] million in dividends paid to our stockholders, and [removed: $303] [added: $203] million of capital expenditures.

These cash outflows were partially offset by [removed: $2.0] [added: $1.3] billion of net proceeds from issuance of debt and [removed: $85] [added: $94] million of treasury stock reissuance and Common Stock issuance resulting from our employee equity-based compensation programs.

Lam Research Corporation [removed: 2019] [added: 2020] 10-K [removed: 33][added: 35]

| June [removed: 30, 2019] [added: 28, 2020] | | | | June [removed: 24, 2018] [added: 30, 2019] | | | | June [removed: 25, 2017] [added: 24, 2018] | | | |

| Revenue (in millions) | $ | [removed: 9,654] [added: 10,045] | | | $ | [removed: 11,077] [added: 9,654] | | | $ | [removed: 8,014] [added: 11,077] | |

| Korea | [removed: 23] [added: 24] | | % | | [removed: 35] [added: 23] | | % | | [removed: 31] [added: 35] | | % |

| China | [removed: 22] [added: 31] | | % | | [removed: 16] [added: 22] | | % | | [removed: 13] [added: 16] | | % |

| Japan | [removed: 20] [added: 9] | | % | | [removed: 17] [added: 20] | | % | | [removed: 13] [added: 17] | | % |

| Taiwan | [removed: 17] [added: 19] | | % | | [removed: 13] [added: 17] | | % | | [removed: 26] [added: 13] | | % |

| United States | 8 | | % | | [removed: 7] [added: 8] | | % | | [removed: 8] [added: 7] | | % |

| Southeast Asia | 6 | | % | | [removed: 7] [added: 6] | | % | | [removed: 5] [added: 7] | | % |

| Europe | [removed: 4] [added: 3] | | % | | [removed: 5] [added: 4] | | % | | [removed: 4] [added: 5] | | % |

Revenue [removed: decreased] [added: increased] in fiscal year [removed: 2019] [added: 2020] compared to fiscal year [removed: 2018,] [added: 2019,] but [removed: increased] [added: decreased] compared to fiscal year [removed: 2017,] [added: 2018,] primarily as a result of the [removed: volatility] [added: variability] of semiconductor capital investments by our customers.

| | Year Ended | | [added: | | |]

| June [added: 28, 2020 | | | June] 30, 2019 | | |

| Memory | [added: 58 | % | |] 70 | % |

| Foundry | [added: 31 | % | |] 20 | % |

| Logic/integrated device manufacturing | [added: 11 | % | |] 10 | % |

| June [removed: 30, 2019] [added: 28, 2020] | | | | June [removed: 24, 2018] [added: 30, 2019] | | | | June [removed: 25, 2017] [added: 24, 2018] | | | [removed: FY19] [added: FY20] vs. [removed: FY18] [added: FY19] | | | | | | | [removed: FY18] [added: FY19] vs. [removed: FY17] [added: FY18] | | | | | | | |

| Percent of revenue | [removed: 45.1] [added: 45.9] | | % | | [removed: 46.6] [added: 45.1] | | % | | [removed: 45.0] [added: 46.6] | | % | | [removed: (1.5)%] [added: 0.8%] | | | | | | | [removed: 1.6%] [added: (1.5)%] | | | | | |

Lam Research Corporation [removed: 2019] [added: 2020] 10-K [removed: 34][added: 36]

| Research & development | $ | [removed: 1,191,320] [added: 1,252,412] | | | $ | [removed: 1,189,514] [added: 1,191,320] | | | $ | [removed: 1,033,742] [added: 1,189,514] | | | $ | [removed: 1,806] [added: 61,092] | | | [removed: 0.2] [added: 5.1] | % | | $ | [removed: 155,772] [added: 1,806] | | | [removed: 15.1] [added: 0.2] | % |

individual steps.

We have a broad portfolio of products that provide complementary processing steps used throughout semiconductor manufacturing.

Our Customer Support Business Group focuses attention on delivery solutions that meet our customers’ technical requirements as well as productivity needs during the equipment lifecycle.

During fiscal year 2020, customer demand remained relatively strong, however we experienced COVID-19-related production and supply chain disruptions, which impacted the timing of revenue recognition and negatively impacted our gross margin.

While we are currently seeing improvements in both our own operations and those of our suppliers, risks and uncertainties related to the COVID-19 pandemic remain, which may negatively impact our revenue and gross margin.

Fiscal year 2020 revenue increased 4% compared to fiscal year 2019, reflecting stronger customer demand for semiconductor equipment.

Gross margin as a percentage of revenue increased primarily due to customer and product mix as well as lower amortization expense related to intangibles acquired through business combinations, partially offset by lower factory and field utilization.

The increase in operating expenses in fiscal year 2020 compared to fiscal year 2019 was mainly driven by higher employee-related costs as a result of increased headcount and outsourcing services, partially offset by lower travel expense, miscellaneous costs and restructuring charges.

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The deferred revenue balance was $537 million as of June 28, 2020 compared to $449 million as of June 30, 2019, driven primarily by additional deferrals towards the future servicing of our existing installed base and COVID-19-related production disruptions.

The percentage of leading- and non-leading-edge equipment and upgrade revenue to each of the markets we serve was as follows:

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| | | | | | |

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| Gross margin | $ | 4,608,693 | | | $ | 4,358,459 | | | $ | 5,165,032 | | | $ | 250,234 | | | 5.7 | % | | $ | (806,573 | ) | | (15.6 | )% |

The increase in gross margin as a percentage of revenue for fiscal year 2020 compared to fiscal year 2019 was primarily due to customer and product mix as well as lower amortization expense related to intangibles acquired through business combinations, partially offset by lower factory and field utilization.

| June 28, 2020 | | | | June 30, 2019 | | | | June 24, 2018 | | | FY20 vs. FY19 | | | | | | | FY19 vs. FY18 | | | | | | | |

The increase in R&D expense during fiscal year 2020 compared to fiscal year 2019 was mainly driven by an increase of $50 million in employee-related costs due to increased headcount, $19 million in outsourcing service costs, and $10 million in spending for supplies, partially offset by a decrease of $7 million in travel expense and $5 million in restructuring charges.

| June 28, 2020 | | | | June 30, 2019 | | | | June 24, 2018 | | | FY20 vs. FY19 | | | | | | | FY19 vs. FY18 | | | | | | | |

The decrease in SG&A expense during fiscal year 2020 compared to fiscal year 2019 was primarily due to a $17 million decrease in spending for customer-related sales costs, a $9 million decrease in spending for supplies, a $9 million decrease in restructuring charges, and a $6 million decrease in spending for travel and entertainment, partially offset by an increase of $25 million in spending for rent, repair and utilities.

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| June 28, 2020 | | | | June 30, 2019 | | | | June 24, 2018 | | | FY20 vs. FY19 | | | | | | | FY19 vs. FY18 | | | | | | | |

| Other, net | (9,499 | | ) | | (10,959 | | ) | | (18,790 | | ) | | $ | 1,460 | | | (13.3 | )% | | $ | 7,831 | | | (41.7 | )% |

Interest income decreased in fiscal year 2020 compared to fiscal year 2019 as a result of lower yield, offset by a higher cash balance.

Interest expense increased in fiscal year 2020 compared to fiscal year 2019 primarily due to the full-year impact of the issuance of the $2.5 billion of senior notes that occurred in fiscal year 2019 and the issuance of $2.0 billion senior notes in fiscal year 2020.

| June 28, 2020 | | | | June 30, 2019 | | | | June 24, 2018 | | | FY20 vs. FY19 | | | | | | | FY19 vs. FY18 | | | | | | | |

The increase in the effective tax rate in fiscal year 2020 as compared to fiscal year 2019 was primarily due to a cumulative income tax benefit reversal due to a court ruling in fiscal year 2020, as outlined below.

In November 2019, the U.S. Court of Appeals for the Ninth Circuit (“Ninth Circuit”) rejected the en banc appeal petitioned by Altera Corporation (“Altera”) in July 2019.

In that quarter, we evaluated the impact of the decision

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and viewed the denial as an indication that Altera’s position of excluding stock-based compensation expense in an inter-company cost-sharing arrangement was unlikely to be sustained upon further litigation.

As a result, we reversed $74.5 million of net tax assets associated with stock-based compensation benefits related to previous years in the Condensed Consolidated Financial Statements in the three months ended December 29, 2019 and we no longer reflected a net tax benefit within our financial statements related to excluding stock-based compensation from our inter-company cost-sharing arrangement.

In February 2020, Altera petitioned the Supreme Court of the United States ("SCOTUS") to hear their case.

In June 2020, the SCOTUS denied the petition.

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While there could be continued variability in the near-term, we believe that demand for our products and services will increase faster than overall spending on wafer fabrication equipment, as the proportion of customers’ capital expenditures rises in these technology inflection areas, and as we gain market share.

Fiscal year 2018 revenue increased 38% compared to fiscal year 2017, reflecting an increase in technology and capacity investments by our customers.

Gross margin as a percentage of revenue improved primarily due to favorable margin mix and higher revenue.

Operating expenses in fiscal year 2018 increased as compared to fiscal year 2017 primarily as a result of higher employee headcount and increased investment in research and development.

Our deferred revenue balance was $449 million as of June 30, 2019, compared to $994 million as of June 24, 2018.

The deferred revenue at the end of June 2019 is recognized under Accounting Standard Codification (“ASC”) 606, while the same values as of June 2018 are recognized under ASC 605, which contributes to the change in value period over period.

Our deferred revenue balance does not include shipments to customers in Japan, to whom title does not transfer until customer acceptance.

Shipments to customers in Japan are classified as inventory at cost until the time of customer acceptance.

The anticipated future revenue value from shipments to customers in Japan was approximately $78 million as of June 30, 2019, compared to $607 million as of June 24, 2018.

The percentage of total Lam semiconductor systems revenue to each of the markets we serve was as follows for fiscal year 2019:

| | | |

| --- | --- | --- |

The increase in gross margin as a percentage of revenue for fiscal year 2018 compared to fiscal year 2017 was primarily due to favorable margin mix and higher revenue.

The increase in R&D expense during fiscal year 2018 compared to fiscal year 2017 was primarily due to an $88 million increase in employee compensation and benefits related to increased headcount, a $24 million increase in supplies, and a $23 million increase in outside services and miscellaneous expenses.

The increase in SG&A expense during fiscal year 2018 compared to fiscal year 2017 was primarily due to a $44 million increase in employee compensation and benefits from increased headcount, a $28 million increase in outside services, and a $15 million increase in rent, utilities and repairs.

| Gains (losses) on extinguishment of debt, net | 118 | | | | 542 | | | | (36,252 | | ) | | $ | (424 | ) | | (78.2 | )% | | $ | 36,794 | | | (101.5 | )% |

| Other, net | (11,077 | | ) | | (19,332 | | ) | | (11,642 | | ) | | $ | 8,255 | | | (42.7 | )% | | $ | (7,690 | ) | | 66.1 | % |

The decrease in interest expense during fiscal year 2018 compared to fiscal year 2017 was primarily due to the conversions of 2018 and 2041 Convertible Notes as well as the retirement of the 2018 Convertible Notes in May 2018.

Loss on extinguishment of debt during fiscal year 2017 related to the special mandatory redemption of certain senior notes issued, as well as the termination of the Amended and Restated Term Loan Agreement following the termination of the Agreement and Plan of Merger and Reorganization with KLA-Tencor.

As discussed in Note 7, “Income Taxes,” to our Consolidated Financial Statements in Part II, Item 8 of this 2019 Form 10-K, the “Tax Cuts & Jobs Act” (hereafter referred to as “U.S. tax reform”) was signed into law on December 22, 2017 and was effective starting in our quarter ended December 24, 2017.

U.S. tax reform reduced the U.S. federal statutory tax rate from 35% to 21%, assessed a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and created new taxes on certain foreign sourced earnings.

The impact on income taxes due to a change in legislation is required under the authoritative guidance of Accounting Standards Codification (“ASC”) 740, Income Taxes, to be recognized in the period in which the law is enacted.

In conjunction, the SEC issued Staff Accounting Bulletin (“SAB”) 118, which allowed for the recording of provisional amounts related to U.S. tax reform and subsequent adjustments related to U.S. tax reform during an up to one-year measurement period that is similar to the measurement period used when accounting for business combinations.

We recorded what we believed to be reasonable estimates during the SAB 118 measurement period.

During the December 2018 quarter, we finalized the accounting of the income tax effects of U.S. tax reform.

Although the SAB 118 measurement period has ended, there may be some aspects of U.S. tax reform that remain subject to future regulations and/or notices which may further clarify certain provisions of U.S.

tax reform.

We may need to adjust our previously recorded amounts to reflect the recognition and measurement of our tax accounting positions in accordance with ASC 740; such adjustments could be material.

The below discussion around the provision for income taxes and effective tax rate are significantly impacted by U.S. tax reform.

the impact of U.S. tax reform and its mandated one-time transition tax on accumulated unrepatriated foreign earnings in fiscal year 2018.

The increase in the effective tax rate in fiscal year 2018 as compared to fiscal year 2017 was primarily due to the impact of U.S. tax reform and its mandated one-time transition tax on accumulated unrepatriated foreign earnings.

In July 2015, the U.S. Tax Court issued an opinion favorable to Altera Corporation (“Altera”) with respect to Altera’s litigation with the Internal Revenue Service (“IRS”).

The litigation related to the treatment of stock-based compensation expense in an intercompany cost-sharing arrangement with Altera’s foreign subsidiary.

In its opinion, the U.S. Tax Court accepted Altera’s position of excluding stock-based compensation from its intercompany cost-sharing arrangement.

In June 2019, the U.S. Court of Appeals for the Ninth Circuit (“Ninth Circuit”), through a three-judge panel, reversed the 2015 decision of the U.S. Tax Court.

Altera has petitioned the Ninth Circuit for an en banc rehearing of a larger panel of eleven Ninth Circuit judges.

We will continue to monitor and evaluate the potential impact of this litigation on our fiscal year 2020 Consolidated Financial Statements.

The estimated potential impact is in the range of $75 million, which may result in a decrease in deferred tax assets and an increase in tax expense.

| | |

| --- | --- |

As of June [removed: 30, 2019,] [added: 28, 2020,] our mutual funds are classified as trading securities.

Market changes reflect immediate hypothetical parallel shifts in the yield curve of plus or minus 50 basis points (“BPS”), 100 BPS, and 150 [added: BPS with a minimum interest rate of zero] BPS.

The hypothetical fair values as of June [removed: 30, 2019,were] [added: 28, 2020,were] as follows:

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Lam Research Corporation [removed: 2019] [added: 2020] 10-K 46

[removed: ][added: ]

As of June [removed: 30, 2019,] [added: 28, 2020,] we had [removed: $4.5] [added: $5.8] billion in principal amount of fixed-rate long-term debt outstanding, with a fair value of [removed: $5.7] [added: $7.0] billion.

We do not carry the Notes at fair [removed: value,] [added: value] but present the fair value of the principal amount of our Notes for disclosure purposes.

The hypothetical fair values as of June [removed: 30, 2019,] [added: 28, 2020,] were as follows:

| | Valuation of Securities Given an X% Decrease in Stock Price | | | | | | | | | | | | Fair Value as of | | | [added: |] Valuation of Securities Given an X% Increase in Stock Price | | | | | | | | | | |

| (25)% | | | | (15)% | | | | (10)% | | | | —% | | | [added: |] 10% | | | | 15% | | | | 25% | | | |

| | (in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | [added: |]

Lam Research Corporation [removed: 2019] [added: 2020] 10-K 47

designated as cash flow hedges, as of June [removed: 30, 2019,] [added: 28, 2020,] are shown in the table below.

| June [removed: 30, 2019] [added: 28, 2020] | | | | \= +/- (10%) | | | | \= +/- (15%) | | | | | | | | | |

The notional amount and unrealized loss of our outstanding foreign currency forward contracts that are designated as balance sheet hedges, as of June [removed: 30, 2019,] [added: 28, 2020,] are shown in the table below.

| | June [removed: 30, 2019] [added: 28, 2020] | | | | \= +/- (10%) | | | | \= +/- (15%) | | | | | | | | |

| Buy | [removed: Korean won] [added: Indian rupee] | 7.8 | | | | — | | | | | 0.8 | | | | 1.2 | | |

Lam Research Corporation [removed: 2019] [added: 2020] 10-K 48

| | June 28, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| U.S. Treasury and agencies | $ | 552,656 | | | $ | 552,656 | | | $ | 552,656 | | | $ | 552,452 | | | $ | 551,801 | | | $ | 551,149 | | | $ | 550,498 | |

| Government-sponsored enterprises | 31,497 | | | | 31,497 | | | | 31,497 | | | | 31,454 | | | | 31,374 | | | | 31,295 | | | | 31,215 | | |

| Foreign government bonds | 10,735 | | | | 10,735 | | | | 10,734 | | | | 10,716 | | | | 10,694 | | | | 10,673 | | | | 10,651 | | |

| Corporate notes and bonds | 1,414,694 | | | | 1,414,583 | | | | 1,413,851 | | | | 1,410,657 | | | | 1,407,049 | | | | 1,403,439 | | | | 1,399,824 | | |

| Mortgage backed securities - residential | 3,323 | | | | 3,286 | | | | 3,249 | | | | 3,213 | | | | 3,176 | | | | 3,139 | | | | 3,102 | | |

| Mortgage backed securities - commercial | 23,890 | | | | 23,889 | | | | 23,868 | | | | 23,804 | | | | 23,740 | | | | 23,676 | | | | 23,613 | | |

| Total | $ | 2,036,795 | | | $ | 2,036,646 | | | $ | 2,035,855 | | | $ | 2,032,296 | | | $ | 2,027,834 | | | $ | 2,023,371 | | | $ | 2,018,903 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | June 28, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Mutual funds | $ | 54,320 | | | $ | 61,563 | | | $ | 65,184 | | | $ | 72,427 | | | $ | 79,670 | | | $ | 83,291 | | | $ | 90,534 | |

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| Sell | Japanese yen | $ | 299.5 | | | $ | 0.1 | | | | $ | 29.9 | | | $ | 44.8 | |

| Buy | Euro | 54.5 | | | | 0.8 | | | | | 6.1 | | | | 9.7 | | |

| Buy | Korean won | 20.5 | | | | (0.4 | | | ) | | 2.0 | | | | 3.0 | | |

| | | | | | | $ | 0.5 | | | | $ | 38.0 | | | $ | 57.5 | |

| Sell | Korean won | $ | 50.7 | | | $ | 0.1 | | | | $ | 5.1 | | | $ | 7.6 | |

| Buy | Taiwan dollar | 47.6 | | | | (0.1 | | | ) | | 4.7 | | | | 7.0 | | |

| Buy | Euro | 36.1 | | | | — | | | | | 10.6 | | | | 12.0 | | |

| Buy | Chinese renminbi | 35.1 | | | | — | | | | | 3.5 | | | | 5.3 | | |

| Buy | Japanese yen | 22.5 | | | | — | | | | | 2.2 | | | | 3.4 | | |

| Buy | Swiss francs | 12.7 | | | | — | | | | | 1.3 | | | | 1.9 | | |

| Buy | British pound | 11.2 | | | | — | | | | | 0.7 | | | | 1.1 | | |

| Buy | Singapore dollar | 10.1 | | | | — | | | | | 1.0 | | | | 1.5 | | |

| Buy | Malaysian ringgit | 5.6 | | | | — | | | | | 0.6 | | | | 0.8 | | |

| | | | | | | $ | — | | | | $ | 30.5 | | | $ | 41.8 | |

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| | June 30, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| U.S. Treasury and agencies | 467,445 | | | | 466,940 | | | | 466,427 | | | | 465,914 | | | | 465,403 | | | | 464,891 | | | | 464,379 | | |

| Government-sponsored enterprises | 16,108 | | | | 16,062 | | | | 16,015 | | | | 15,969 | | | | 15,921 | | | | 15,875 | | | | 15,828 | | |

| Foreign government bonds | 24,592 | | | | 24,542 | | | | 24,493 | | | | 24,443 | | | | 24,394 | | | | 24,344 | | | | 24,294 | | |

| Corporate notes and bonds | 1,478,541 | | | | 1,475,154 | | | | 1,471,766 | | | | 1,468,378 | | | | 1,464,989 | | | | 1,461,600 | | | | 1,458,211 | | |

| Mortgage backed securities - residential | 6,240 | | | | 6,208 | | | | 6,176 | | | | 6,144 | | | | 6,112 | | | | 6,080 | | | | 6,048 | | |

| Mortgage backed securities - commercial | 30,157 | | | | 30,014 | | | | 29,871 | | | | 29,727 | | | | 29,585 | | | | 29,442 | | | | 29,299 | | |

| Total | $ | 2,023,083 | | | $ | 2,018,920 | | | $ | 2,014,748 | | | $ | 2,010,575 | | | $ | 2,006,404 | | | $ | 2,002,232 | | | $ | 1,998,059 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | June 30, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Mutual funds | $ | 58,306 | | | $ | 66,080 | | | $ | 69,967 | | | 77,741 | | | $ | 85,515 | | | $ | 89,402 | | | $ | 97,176 | |

| Sell | Japanese yen | $ | 115.8 | | | $ | (1.6 | | ) | | $ | 11.6 | | | $ | 17.4 | |

| Buy | Euro | 43.8 | | | | (0.7 | | | ) | | 4.8 | | | | 7.5 | | |

| Buy | Korean won | 14.6 | | | | (0.3 | | | ) | | 1.4 | | | | 2.2 | | |

| | | | | | | $ | (2.6 | | ) | | $ | 17.8 | | | $ | 27.1 | |

| Buy | British pound | $ | 45.8 | | | $ | — | | | | $ | 2.8 | | | $ | 4.3 | |

| Buy | Japanese yen | 39.3 | | | | 0.6 | | | | | 4.0 | | | | 6.0 | | |

| Buy | Taiwan dollar | 29.0 | | | | — | | | | | 2.9 | | | | 4.3 | | |

| Buy | Swiss francs | 26.7 | | | | — | | | | | 2.6 | | | | 4.0 | | |

| Buy | Euro | 24.0 | | | | — | | | | | 7.3 | | | | 8.2 | | |

| Buy | Chinese renminbi | 14.4 | | | | — | | | | | 1.4 | | | | 2.2 | | |

| Buy | Indian rupee | 9.5 | | | | — | | | | | 1.0 | | | | 1.4 | | |

| Buy | Singapore dollar | 8.9 | | | | — | | | | | 0.9 | | | | 1.3 | | |

| | | | | | | $ | 0.6 | | | | $ | 23.7 | | | $ | 32.9 | |

Interest Rate Contracts

Interest rate risk is present with both fixed- and floating-rate debt.

Interest rate swap agreements designated as fair value hedges are used to mitigate our exposure to changes in the fair value of fixed-rate debt resulting from fluctuations in benchmark interest rates.

Accordingly, benchmark interest rate fluctuations impact the fair value of our fixed-rate debt, which are offset by corresponding changes in the fair value of the swap agreements.

Interest rate swaps may also be used to adjust interest rate exposures when appropriate, based on market conditions, and for qualifying hedges, the interest differential of swaps is included in interest expense.

During the fiscal year ended June 26, 2016, we entered into a series of interest rate contracts with a total notional value of $400 million where we received fixed rates and paid variable rates based on certain benchmark interest rates.

Such interest rate swap arrangements were designated as fair value hedges of the fair value of the underlying debt instrument.

The following table shows the change in fair value of these fair value hedges, assuming a hypothetical benchmark interest rate movement of plus or minus 10 BPS and plus or minus 15 BPS.

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | Fair Value as of | | | | Valuation of Fair Value Hedge Given an Interest rate increase (+)/Decrease (-) of X Basis Points | | | | | | |

| | | June 30, 2019 | | | | \= +/- 10 BPS | | | | \= +/- 15 BPS | | |

| | | (in millions) | | | | | | | | | | |

| Interest Rate Contracts | | $ | 3.6 | | | $ | 2.1 | | | $ | 3.2 | |

Interest rate risk is also present on anticipated issuances of debt.

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Lam Research Corporation [removed: 2019] [added: 2020] 10-K 4

[removed: ][added: ]

[added: In addition, our products are well-suited for related markets that rely on] semiconductor processes and require production-proven manufacturing capability, such as complementary metal-oxide-semiconductor image sensors (“CIS”) and micro-electromechanical systems (“MEMS”).

We offer a broad range of services to deliver value throughout the lifecycle of our equipment, including customer service, spares, upgrades, and [removed: refurbishment of] [added: new and refurbished non-leading edge products in] our deposition, etch, and clean [removed: products.][added: markets.]

Additionally, within CSBG, our Reliant product line offers new and refurbished non-leading-edge products in [removed: Clean, Deposition,] [added: deposition, etch] and [removed: Etch] [added: clean] markets for those applications that do not require the most advanced wafer processing capability.

At these nanoscale dimensions, even slight imperfections can impact device [added: performance or cause a chip to fail.]

Lam Research Corporation [removed: 2019] [added: 2020] 10-K 5

The Multi-Station Sequential Deposition architecture enables nucleation layer formation and bulk CVD fill to be performed in the same [removed: chamber (“in situ”).]

[removed: PNL®, our] [added: Our] ALD [removed: technology, is] [added: technologies are] used in the deposition of [removed: tungsten nitride] [added: barrier] films to achieve high step coverage with reduced thickness [added: at lower temperatures] relative to [added: a] conventional [removed: barrier films.][added: process.]

Lam Research Corporation [removed: 2019] [added: 2020] 10-K 6

[removed: These processes involve fabricating increasingly] small, complex, and narrow features using many types of materials.

Plasma etch processes used to remove [added: single crystal] silicon and other materials deep into the wafer are collectively referred to as deep silicon etch.

These may be deep trenches for CMOS image [removed: sensor pixel isolation,] [added: sensors,] trenches for power and other devices, TSVs, and other high aspect ratio features.

Lam Research Corporation [removed: 2019] [added: 2020] 10-K 7

It is [removed: widely] used to identify production wafer trends and excursions as they occur, allowing corrections to be implemented quickly to prevent further yield loss.

All references to fiscal years apply to our fiscal years, which ended June [added: 28, 2020, June] 30, 2019, [removed: June 24, 2018,] and June [removed: 25, 2017.][added: 24, 2018.]

Lam Research Corporation [removed: 2019] [added: 2020] 10-K 8

We maintain ongoing service relationships with our customers and have an extensive network of service engineers in place throughout the United States, China, Europe, [added: India,] Japan, Korea, Southeast Asia, and Taiwan.

A significant portion of our sales and operations occur outside the United States [added: (“U.S.”)] and, therefore, may be subject to certain risks, including but not limited to tariffs and other barriers; difficulties in staffing and managing non-U.S. operations; adverse tax consequences; foreign currency exchange rate fluctuations; changes in currency controls; compliance with U.S. and international laws and regulations, including U.S. export restrictions; and economic and political conditions.

Refer to Note [removed: 19] [added: 20] of our Consolidated Financial Statements, included in Item 8 of this report, for the attribution of revenue by geographic region.

Refer to Note [removed: 19] [added: 20] of our Consolidated Financial Statements, included in Item 8 of this report, for information concerning the geographic locations of long-lived assets.

Customers accounting for greater than 10% of total revenues in fiscal year [removed: 2019 included Micron Technology, Inc.; Samsung Electronics Company, Ltd.; SK hynix Inc.; and Toshiba, Inc. Customers accounting for greater than 10% of total revenues in fiscal year 2018] [added: 2020] included [removed: Intel Corporation;] Micron Technology, Inc.; Samsung Electronics Company, Ltd.; SK hynix Inc.; and [removed: Toshiba, Inc. Customers accounting for greater than 10% of total revenues in fiscal year 2017 included Micron Technology, Inc.; Samsung Electronics Company, Ltd.; SK hynix Inc.;] Taiwan Semiconductor Manufacturing [removed: Company, Ltd; and Toshiba, Inc.][added: Company.]

Semiconductor manufacturers’ businesses, in turn, depend on many factors, including their economic capability, [added: the current and anticipated market demand for ICs, and the availability of equipment capacity to support that demand.]

Lam Research Corporation [removed: 2019] [added: 2020] 10-K 9

As of June [removed: 30, 2019,] [added: 28, 2020,] and June [removed: 24, 2018,] [added: 30, 2019,] our backlog was [removed: $1.6] [added: $2.9] billion and [removed: $2.0] [added: $1.6] billion, respectively.

Refer to Note [removed: 16] [added: 17] of our Consolidated Financial Statements, included in Item 8 of this report, for further information concerning our outsourcing commitments, reported as a component of purchase obligations.

Lam Research Corporation [removed: 2019] [added: 2020] 10-K 10

As of August [removed: 15, 2019,] [added: 13, 2020,] we had approximately [removed: 10,700] [added: 11,300] regular employees globally.

Lam Research Corporation [removed: 2019] [added: 2020] 10-K 11

We currently hold a number of U.S. and foreign patents [added: and applications] covering various aspects of our products and processes.

In addition, other companies and inventors may receive patents that contain claims applicable [removed: or similar] to our products and processes.

As of August [removed: 15, 2019,] [added: 13, 2020,] the executive officers of Lam Research were as follows:

| Timothy M. Archer | | [removed: 52] [added: 53] | | President and Chief Executive Officer |

| Douglas R. Bettinger | | [removed: 52] [added: 53] | | Executive Vice President, Chief Financial Officer, and Chief Accounting Officer |

| Richard A. Gottscho | | [removed: 67] [added: 68] | | Executive Vice President, Chief Technology Officer |

| Kevin D. Jennings | | [removed: 54] [added: 55] | | Senior Vice President, Global Operations |

| Patrick J. Lord | | [removed: 53] [added: 54] | | Senior Vice President and General Manager, CSBG |

| Scott G. Meikle | | [removed: 57] [added: 58] | | Senior Vice President, Global Customer Operations |

| [removed: Sarah A. O’Dowd] [added: Ava M. Hahn] | | [removed: 69] [added: 47] | | Senior Vice President, Chief Legal Officer and Secretary |

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chamber (“in situ”).

These processes involve fabricating increasingly

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It has been adopted in the production of 3D devices where traditional metrology and inspection techniques are insufficient for complex high aspect ratio device architectures.

Mass metrology is also increasingly used to characterize multi-step processes and integrations for development, technology transfer, and diagnosis.

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Customers accounting for greater than 10% of total revenues in fiscal year 2019 included Micron Technology, Inc.; Samsung Electronics Company, Ltd.; SK hynix Inc.; and Toshiba Memory Holding Corporation (presently known as *Kioxia Corporation*).

Customers accounting for greater than 10% of total revenues in fiscal year 2018 included Intel Corporation; Micron Technology, Inc.; Samsung Electronics Company, Ltd.; SK hynix Inc.; and Toshiba Memory Corporation (presently known as *Kioxia Corporation*).

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Ava M.

She joined the Company in January 2020 and is responsible for global legal matters.

Prior to joining us, Ms. Hahn served as executive vice president, chief compliance officer, general counsel and secretary of CA Technologies, an enterprise software company, from February 2019 to November 2019 (until its acquisition by Broadcom Corp.), general counsel and secretary of Aruba Networks, a provider of networking products, from April 2013 to June 2016 (until its acquisition by Hewlett Packard Enterprise), general counsel and secretary of ShoreTel, Inc. from 2007 to 2013, and general counsel and secretary of Genesis Microchip from 2002 to 2007.

Ms. Hahn also served as general counsel of venture capital firms Kleiner Perkins and Felicis Ventures.

She started her career at the law firm of Wilson Sonsini Goodrich & Rosati, where she practiced corporate and securities law.

Ms. Hahn earned a J.D. from Columbia Law School and a B.A. in history from the University of California, Berkeley.

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Our vision is to realize full value from natural technology extensions of our Company.

In addition, our products are well-suited for related markets that rely on

performance or cause a chip to fail.

Etch processes also create the tall, column-like features used, for example, in TSVs that link chips together and in MEMS.

It is particularly useful for ultra-thin, ultra-thick and opaque films, and complex 3D geometries of newer chip designs, where traditional metrology and inspection techniques are ineffective.

The Metryx® mass metrology systems are available as both platform-integrated modules and as stand-alone systems.

Key applications include high aspect ratio etch (DRAM cell, 3D NAND channel hole, carbon mask open), conformal and ALD sidewall deposition, horizontal processing (recess etch, fill), film density monitoring, and wafer cleaning/polymer removal.

the current and anticipated market demand for ICs, and the availability of equipment capacity to support that demand.

Sarah A.

She joined us in September 2008 as group vice president and chief legal officer, responsible for general legal matters, intellectual property and ethics, and compliance.

In addition to her Legal function, in April 2009 she was appointed vice president of Human Resources and served in this dual capacity through May 2012.

Prior to joining us, she was vice president and general counsel for FibroGen, Inc., from February 2007 until September 2008.

Until February 2007, Ms. O’Dowd was a shareholder in the law firm of Heller Ehrman LLP for more than 20 years, practicing in the areas of corporate securities, governance, and mergers and acquisitions for a variety of clients, principally publicly traded high-technology companies.

She served in a variety of leadership and management roles at Heller Ehrman, including managing partner of the Silicon Valley and San Diego offices, member of the firm’s Policy Committee, and, as head of the firm’s business practice groups, a member of the firm’s Executive Committee.

Ms. O’Dowd earned her J.D. and M.A. degrees in communications from Stanford Law School and Stanford University, respectively, and her B.A. degree in mathematics from Immaculata College.

To the extent there is a reasonable possibility that the losses could exceed the amounts already accrued, [added: based on current information,] we believe that the amount of any such additional loss would be immaterial to our business, financial condition, and results of operations.

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Lam Research Corporation 2020 10-K 27


For the fiscal year ended June [removed: 30, 2019][added: 28, 2020]

The aggregate market value of the Registrant’s Common Stock, $0.001 par value, held by non-affiliates of the Registrant, as of December [removed: 23, 2018,] [added: 29, 2019,] the last business day of the most recently completed second fiscal quarter, was [removed: $15,363,329,674.][added: $29,587,424,632.]

As of August [removed: 15, 2019,] [added: 13, 2020,] the Registrant had [removed: 144,532,998] [added: 145,625,225] outstanding shares of Common Stock.

Parts of the Registrant’s Proxy Statement for the Annual Meeting of Stockholders expected to be held on or about November [removed: 5, 2019,] [added: 3, 2020,] are incorporated by reference into Part III of this Form 10-K.

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Lam Research Corporation [removed: 2019] [added: 2020] 10-K 1

[removed: ][added: ]

[removed: 2019] [added: 2020] ANNUAL REPORT ON FORM 10-K

| Item 1. | [removed: [Business](#s701C1C23CDF95928A32D20F74C5C4D6C)] [added: [Business](#sABF287C019045D079D129184678DA4EA)] | [removed: [4](#s701C1C23CDF95928A32D20F74C5C4D6C)] [added: [4](#sABF287C019045D079D129184678DA4EA)] |

| Item 1A. | [Risk [removed: Factors](#s34A4B1BF94DE56AAADFE89875637DE11)] [added: Factors](#s75A06AAB29625309872B56150E0F2533)] | [removed: [14](#s34A4B1BF94DE56AAADFE89875637DE11)] [added: [14](#s75A06AAB29625309872B56150E0F2533)] |

| Item 1B. | [Unresolved Staff [removed: Comments](#s5B196BF426CE55D39F2B0D653A826DAA)] [added: Comments](#s5DE94A87B96B513096441399FC8B9107)] | [removed: [25](#s5B196BF426CE55D39F2B0D653A826DAA)] [added: [27](#s5DE94A87B96B513096441399FC8B9107)] |

| Item 2. | [removed: [Properties](#s604CD86352CE594198F92923D26AB7DB)] [added: [Properties](#s4935A430FA345C7EAB6145009B6E08FA)] | [removed: [26](#s604CD86352CE594198F92923D26AB7DB)] [added: [27](#s4935A430FA345C7EAB6145009B6E08FA)] |

| Item 3. | [Legal [removed: Proceedings](#s87542F9DBA945465ACFF2DE729FFA55C)] [added: Proceedings](#s6736380E58405122A3136758C2D5F68E)] | [removed: [26](#s87542F9DBA945465ACFF2DE729FFA55C)] [added: [27](#s6736380E58405122A3136758C2D5F68E)] |

| Item 4. | [Mine Safety [removed: Disclosures](#s4B8C0CA29CCF5F6CB0D9AFCBEF1C3540)] [added: Disclosures](#sDB662B55211B5B9FB278360233DE5D9B)] | [removed: [26](#s4B8C0CA29CCF5F6CB0D9AFCBEF1C3540)] [added: [28](#sDB662B55211B5B9FB278360233DE5D9B)] |

| [Part [removed: II.](#s4DEA435932C155188ACAE0D32D6990A3)] [added: II.](#sB148735247EA52308245C05EDB1A507B)] | | |

| Item 5. | [Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s15B44B4A23B65961BFC10EAAA384FE41)] [added: Securities](#sD285EE27859B50B09CF3A7D90E3EB3A5)] | [removed: [27](#s15B44B4A23B65961BFC10EAAA384FE41)] [added: [29](#sD285EE27859B50B09CF3A7D90E3EB3A5)] |

| Item 6. | [Selected Financial [removed: Data](#s6DCE8442ACB8567391B2299EDC45BB24)] [added: Data](#sC5EA286D14575B568FCBF48DA40C8384)] | [removed: [30](#s6DCE8442ACB8567391B2299EDC45BB24)] [added: [32](#sC5EA286D14575B568FCBF48DA40C8384)] |

| Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s52A65AA4AF17533B840B1942B511518E)] [added: Operations](#s558640B88C0F56688121C3D5FA70DE0F)] | [removed: [32](#s65BB7C04C5E25FDDA1E1F36E5FB7FCF2)] [added: [33](#s254ADCC62D995E0DBAFACFA01F019B3C)] |

| Item 7A. | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s3B067B58A29A5CCD8920E47B323BE213)] [added: Risk](#s9E1549D083725717B0A8C873C2C15501)] | [removed: [46](#s3B067B58A29A5CCD8920E47B323BE213)] [added: [46](#s9E1549D083725717B0A8C873C2C15501)] |

| Item 8. | [Financial Statements and Supplementary [removed: Data](#s0EE39CDA171157908DD50086BDC97BAC)] [added: Data](#s657D87CABFEC5D629C36F039075B8117)] | [removed: [50](#s0EE39CDA171157908DD50086BDC97BAC)] [added: [49](#s657D87CABFEC5D629C36F039075B8117)] |

| Item 9. | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#sED9C522C535152C8A1D31AECE155907E)] [added: Disclosure](#s88752A40993C53029D03C750197F2B54)] | [removed: [98](#sED9C522C535152C8A1D31AECE155907E)] [added: [96](#s88752A40993C53029D03C750197F2B54)] |

| Item 9A. | [Controls and [removed: Procedures](#s5717DFBB50FA544A9AC5638E59AD93CF)] [added: Procedures](#sF43AE8C0CD7953D2AAC60A9CB7907AE0)] | [removed: [98](#s5717DFBB50FA544A9AC5638E59AD93CF)] [added: [96](#sF43AE8C0CD7953D2AAC60A9CB7907AE0)] |

| Item 9B. | [Other [removed: Information](#sAD56731516175258B5D20DB85196805D)] [added: Information](#s17B562F629E758E69B940BDAA2F990C4)] | [removed: [98](#sAD56731516175258B5D20DB85196805D)] [added: [97](#s17B562F629E758E69B940BDAA2F990C4)] |

| [Part [removed: III.](#s07D39ED99A1155C89010E1D0333D3A51)] [added: III.](#s797E3F04C98C5B18BFFB8118F269E106)] | | |

| Item 10. | [Directors, Executive Officers and Corporate [removed: Governance](#s47922F0DFD945F31A239C3A49A22C510)] [added: Governance](#sA92CF7FABEC052D4BD0E4F26A99ECACF)] | [removed: [99](#s47922F0DFD945F31A239C3A49A22C510)] [added: [98](#sA92CF7FABEC052D4BD0E4F26A99ECACF)] |

| Item 11. | [Executive [removed: Compensation](#s6457CD4C4B7D5D6DB91D26212C25C55C)] [added: Compensation](#s91F1A45622DE51C69C6A3CC173DD8E99)] | [removed: [99](#s6457CD4C4B7D5D6DB91D26212C25C55C)] [added: [98](#s91F1A45622DE51C69C6A3CC173DD8E99)] |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#sC40212FD9B3158AAB0568AF0A1E4A72E)] [added: Matters](#s357E6DC4A6B3599BA750DE56B499FDA3)] | [removed: [99](#sC40212FD9B3158AAB0568AF0A1E4A72E)] [added: [98](#s357E6DC4A6B3599BA750DE56B499FDA3)] |

| Item 13. | [Certain Relationships and Related Transactions, and Director [removed: Independence](#sF940F516A04F5F74A65B00A2E0F98BF5)] [added: Independence](#sD74B8ACE1B0F5975A03781BC4C9E8221)] | [removed: [99](#sF940F516A04F5F74A65B00A2E0F98BF5)] [added: [98](#sD74B8ACE1B0F5975A03781BC4C9E8221)] |

| Item 14. | [Principal Accounting Fees and [removed: Services](#sD744238F651C50848239233ADB0F7A9E)] [added: Services](#s50C6D363866E509DBCAE41CE0D08B6AB)] | [removed: [99](#sD744238F651C50848239233ADB0F7A9E)] [added: [98](#s50C6D363866E509DBCAE41CE0D08B6AB)] |

| [Part [removed: IV.](#s6A4AFB3C664D5BE3A6795EEA8861EB55)] [added: IV.](#s11F1E4640B0358AC85E75F94BEFD596B)] | | |

| Item 15. | [Exhibits, Financial Statement [removed: Schedules](#s1EF0B4BAC44B5701B7FCE0B7D8C1F3A9)] [added: Schedules](#s3A746EAC05C4561E8296CC82CAC09811)] | [removed: [100](#s1EF0B4BAC44B5701B7FCE0B7D8C1F3A9)] [added: [99](#s3A746EAC05C4561E8296CC82CAC09811)] |

Lam Research Corporation [removed: 2019] [added: 2020] 10-K 2

Lam Research Corporation [removed: 2019] [added: 2020] 10-K 3

_______________________

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

| [Part I.](#s8B7F0BF723AB54E8A47CA0EF63880154) | | |

| [Exhibit Index](#s324E5E615E3A57C99177B09B973D70B9) | | [100](#s324E5E615E3A57C99177B09B973D70B9) |

| [Signatures](#sE98693C81925582DAF2D38D091C77F01) | | [104](#sE98693C81925582DAF2D38D091C77F01) |

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_________________________

| [Part I.](#s7243E0295EFB55D28608CC2710B5447D) | | |

| [Exhibit Index](#sC65231ABA9FC566F82B6F765E4FFF1DD) | | [101](#sC65231ABA9FC566F82B6F765E4FFF1DD) |

| [Signatures](#sD023691285FE5B87815F63B09DE3AE6B) | | [105](#sD023691285FE5B87815F63B09DE3AE6B) |

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Lam Research Corporation 2019 10-K 25


The majority of the Fremont and Livermore facilities are held under operating leases expiring in [added: December] 2020 and [added: May] 2021.

The Villach facilities are held under [removed: capital] [added: finance] leases expiring in calendar year 2021.

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Lam Research Corporation [removed: 2019] [added: 2020] 10-K [removed: 26][added: 28]

[removed: ][added: ]

Our Common Stock is traded on the Nasdaq Global Select MarketSM under the symbol “LRCX.” As of August [removed: 15, 2019,] [added: 13, 2020,] we had [removed: 401] [added: 494] stockholders of record.

During fiscal year [removed: 2019,] [added: 2020,] our quarterly dividend was [removed: $1.10] [added: $1.15] per share.

In November 2018, the Board of Directors authorized management to repurchase up to an additional $5.0 billion of Common Stock on such terms and conditions as it deems [removed: appropriate.][added: appropriate, and this authorization was announced on January 23, 2019.]

As of June [removed: 30, 2019,] [added: 28, 2020,] we have purchased approximately [removed: $2.0] [added: $3.2] billion of shares under this authorization, [removed: $0.5] [added: $0.7] billion via open market trading and [removed: $1.5] [added: $2.5] billion utilizing accelerated share repurchase arrangements.

The total number of shares received under the June 2019 ASR [removed: will be] [added: was] based upon the average daily volume weighted average price of our Common Stock during the repurchase period, less an agreed upon discount.

On [removed: January 31,] [added: November 22,] 2019, we entered into two separate accelerated share repurchase agreements (collectively, the [removed: "January] [added: "November] 2019 ASR") with two financial institutions to repurchase a total of [removed: $760 million] [added: $1.0 billion] of Common Stock.

We took an initial delivery of approximately [removed: 3.3] [added: 2.9] million shares, which represented 75% of the prepayment amount divided by our closing stock price on [removed: January 30,] [added: November 22,] 2019.

The total number of shares received under the [removed: January] [added: November] 2019 ASR was based upon the average daily volume weighted average price [removed: of] our Common Stock during the repurchase period, less an agreed upon discount.

Final settlement of the agreements occurred during [removed: May] [added: November] 2019, [removed: resulted] [added: resulting] in the receipt of approximately [removed: 0.8 million] [added: 361 thousand] additional shares, which yielded a weighted-average share price of approximately [removed: $182.32] [added: $215.60] for the transaction period.

Continues on next [removed: page][added: page]

Lam Research Corporation [removed: 2019] [added: 2020] 10-K [removed: 27][added: 29]

[removed: ][added: ]

| [removed: May 27, 2019 -] [added: Available balance as of] June 30, 2019 | [removed: 4,728] | | | [removed: $] | [removed: 176.68] | | | [removed: 4,724] | | | [removed: 3,033,500] [added: $] | [added: 3,033,500] | |

| (1) | During the fiscal year ended June [removed: 30, 2019,] [added: 28, 2020,] we acquired [removed: 0.5 million] [added: 380 thousand] shares at a total cost of [removed: $80.5] [added: $109.6] million which we withheld through net share settlements to cover minimum tax withholding obligations upon the vesting of restricted stock unit awards granted under our equity compensation plans. The shares retained by us through these net share settlements are not a part of the Board-authorized repurchase program but instead are authorized under our equity compensation plan. |

Lam Research Corporation [removed: 2019] [added: 2020] 10-K [removed: 28][added: 30]

The graph below compares Lam Research Corporation’s cumulative five-year total shareholder return on Common Stock with the cumulative total returns of the [added: Philadelphia Semiconductor Sector Total Return Index, the] Nasdaq Composite [added: Total Return] index, [added: and] the Standard & Poor’s (“S&P”) 500 [removed: index, and the Philadelphia Semiconductor Sector Index.][added: (TR) index.]

The graph tracks the performance of a $100 investment in our Common Stock and in each of the indices (with the reinvestment of all dividends) for the five years ended June [removed: 30, 2019.][added: 28, 2020.]

| | Among Lam Research Corporation, the [added: Philadelphia Semiconductor Sector Total Return Index, the] Nasdaq Composite [added: Total Return] Index, [added: and] the S&P 500 [removed: Index, and the Philadelphia Semiconductor Index] [added: (TR) Index.] | | |

[removed: ][added: ]

*$100 invested on June [removed: 29, 2014] [added: 28, 2015] in stock or June 30, [removed: 2014] [added: 2015] in index, including reinvestment of dividends.

Copyright © [removed: 2019] [added: 2020] Standard & Poor’s, a division of S&P Global.

Lam Research Corporation [removed: 2019] [added: 2020] 10-K [removed: 29][added: 31]

| | June [removed: 29, 2014 | | | June] 28, 2015 | | | [added: |] June 26, 2016 | | | [added: |] June 25, 2017 | | | [added: |] June 24, 2018 | | | [added: |] June 30, 2019 | | [added: | | June 28, 2020 | | |]

Final settlement of the November 2019 ASR occurred during March 2020, resulting in the receipt of approximately 705 thousand additional shares, which yielded a weighted-average share price of approximately $280.27 for the transaction period.

| Quarter ended September 29, 2019 | 397 | | | $ | 196.83 | | | 383 | | | 2,958,304 | | |

| Quarter ended December 29, 2019 | 3,242 | | | $ | 265.88 | | | 3,224 | | | 1,957,829 | | |

| Quarter ended March 29, 2020 | 1,576 | | | $ | 281.93 | | | 1,239 | | | 1,811,432 | | |

| March 30, 2020 - April 26, 2020 | 3 | | | $ | 261.24 | | | — | | | 1,811,432 | | |

| April 27, 2020 - May 24, 2020 | 134 | | | $ | 260.59 | | | 129 | | | 1,777,649 | | |

| May 25, 2020 - June 28, 2020 | 19 | | | $ | 267.31 | | | 16 | | | 1,773,427 | | |

| Total | 5,371 | | | $ | 261.44 | | | 4,991 | | | $ | 1,773,427 | |

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| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | |

| Lam Research Corporation | $ | 100.00 | | | $ | 100.88 | | | $ | 188.74 | | | $ | 220.13 | | | $ | 242.99 | | | $ | 398.42 | |

| Philadelphia Semiconductor Sector Total Return Index | $ | 100.00 | | | $ | 103.77 | | | $ | 157.95 | | | $ | 203.93 | | | $ | 231.07 | | | $ | 321.96 | |

| Nasdaq Composite Total Return Index | $ | 100.00 | | | $ | 98.32 | | | $ | 126.14 | | | $ | 155.91 | | | $ | 168.04 | | | $ | 213.32 | |

| S&P 500 (TR) Index | $ | 100.00 | | | $ | 103.99 | | | $ | 122.60 | | | $ | 140.23 | | | $ | 154.83 | | | $ | 166.45 | |

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Final settlement of the June 2019 ASR is anticipated to occur no later than November 20, 2019.

| Available balance as of June 24, 2018 | | | | | | | | | | | $ | 1,733,638 | |

| Quarter ended September 23, 2018 | 7,821 | | | $ | 183.46 | | | 7,807 | | | 108 | | |

| Board authorization, $5.0 billion, November 2018 | | | | | | | | | | | 5,000,000 | | |

| Quarter ended December 23, 2018 | 1,693 | | | $ | 145.30 | | | 1,683 | | | 5,000,000 | | |

| Quarter ended March 31, 2019 | 6,125 | | | $ | 172.06 | | | 5,702 | | | 4,138,494 | | |

| April 1, 2019 - April 28, 2019 | 3 | | | $ | 193.52 | | | — | | | 4,138,494 | | |

| April 29, 2019 - May 26, 2019 | 1,147 | | | $ | 190.89 | | | 1,143 | | | 3,920,258 | | |

| Total | 21,517 | | | $ | 181.72 | | | 21,059 | | | $ | 3,033,500 | |

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Lam Research Corporation | 100.00 | | | 125.08 | | | 126.17 | | | 236.07 | | | 275.33 | | | 303.92 | |

| Nasdaq Composite Index | 100.00 | | | 114.44 | | | 112.51 | | | 144.35 | | | 178.42 | | | 192.30 | |

| S&P 500 Index | 100.00 | | | 107.42 | | | 111.71 | | | 131.70 | | | 150.64 | | | 166.33 | |

| Philadelphia Semiconductor Sector Index | 100.00 | | | 108.97 | | | 113.07 | | | 172.12 | | | 222.22 | | | 251.80 | |

| June [added: 28, 2020 | | | | June] 30, 2019 | | | | June 24, 2018 | | | | June 25, 2017 | | | | June 26, 2016 | | | | [removed: June 28, 2015] | [removed: | | | |]

| Revenue | $ | [removed: 9,653,559] [added: 10,044,736] | | | $ | [removed: 11,076,998] [added: 9,653,559] | | | $ | [removed: 8,013,620] [added: 11,076,998] | | | $ | [removed: 5,885,893] [added: 8,013,620] | | | $ | [removed: 5,259,312] [added: 5,885,893] | | |

| Gross margin | [removed: 4,358,459] [added: 4,608,693] | | | | [removed: 5,165,032] [added: 4,358,459] | | | | [removed: 3,603,359] [added: 5,165,032] | | | | [removed: 2,618,922] [added: 3,603,359] | | | | [removed: 2,284,336] [added: 2,618,922] | | | |

| Operating income | [removed: 2,464,732] [added: 2,673,802] | | | | [removed: 3,213,299] [added: 2,464,732] | | | | [removed: 1,902,132] [added: 3,213,299] | | | | [removed: 1,074,256] [added: 1,902,132] | | | | [removed: 788,039] [added: 1,074,256] | | | |

| Net income | [removed: 2,191,430] [added: 2,251,753] | | | | [removed: 2,380,681] [added: 2,191,430] | | | | [removed: 1,697,763] [added: 2,380,681] | | | | [removed: 914,049] [added: 1,697,763] | | | | [removed: 655,577] [added: 914,049] | | | |

| Basic | $ | [removed: 14.37] [added: 15.55] | | | $ | [removed: 14.73] [added: 14.37] | | | $ | [removed: 10.47] [added: 14.73] | | | $ | [removed: 5.75] [added: 10.47] | | | $ | [removed: 4.11] [added: 5.75] | | |

| Diluted | $ | [removed: 13.70] [added: 15.10] | | | $ | [removed: 13.17] [added: 13.70] | | | $ | [removed: 9.24] [added: 13.17] | | | $ | [removed: 5.22] [added: 9.24] | | | $ | [removed: 3.70] [added: 5.22] | | |

| Cash dividends declared per common share | $ | [removed: 4.40] [added: 4.60] | | | $ | [removed: 2.55] [added: 4.40] | | | $ | [removed: 1.65] [added: 2.55] | | | $ | [removed: 1.20] [added: 1.65] | | | $ | [removed: 0.84] [added: 1.20] | | |

| Working capital | $ | [removed: 6,188,759] [added: 7,691,093] | | | $ | [removed: 5,999,603] [added: 6,188,759] | | | $ | [removed: 6,192,383] [added: 5,999,603] | | | $ | [removed: 6,795,109] [added: 6,192,383] | | | $ | [removed: 3,639,488] [added: 6,795,109] | | |

| Total assets | [removed: 12,001,333] [added: 14,559,047] | | | | [removed: 12,479,478] [added: 12,001,333] | | | | [removed: 12,122,765] [added: 12,479,478] | | | | [removed: 12,264,315] [added: 12,122,765] | | | [removed: (2)] | [removed: 9,358,904] [added: 12,264,315] | | | [removed: (2)] [added: (1)] |

| [removed: Long-term] [added: Total] obligations, less current portion | [removed: 4,906,379] [added: 6,213,116] | | | | [removed: 2,749,127] [added: 4,906,379] | | | | [removed: 2,185,338] [added: 2,749,127] | | | | [removed: 3,744,205] [added: 2,185,338] | | | [removed: (2)] | [removed: 1,386,536] [added: 3,744,205] | | | [removed: (2)] [added: (1)] |

| Current portion of long-term debt and [removed: capital] [added: finance] leases | [removed: 667,131] [added: 839,877] | | | | [removed: 610,030] [added: 667,131] | | | | [removed: 908,439] [added: 610,030] | | | | [removed: 947,733] [added: 908,439] | | | [removed: (2)] | [removed: 1,355,705] [added: 947,733] | | | [removed: (2)] [added: (1)] |

| [removed: (2)] [added: (1)] | Adjusted for effects of retrospective implementation of [removed: ASU] [added: Accounting Standards Update] 2015-3 in the first quarter of fiscal 2017. |

Continues on next [removed: page][added: page]

Lam Research Corporation [removed: 2019] [added: 2020] 10-K [removed: 30][added: 32]

[removed: ][added: ]

| June [removed: 30, 2019] [added: 30, 2019] | | | | March 31, 2019 | | | | December 23, 2018 | | | | September 23, 2018 | | | |

| June [removed: 24, 2018] [added: 28, 2020] | | | | March [removed: 25, 2018] [added: 29, 2020] | | | | December [removed: 24, 2017] [added: 29, 2019] | | | | September [removed: 24, 2017] [added: 29, 2019] | | | |

| QUARTERLY FISCAL YEAR [removed: 2018:] [added: 2020:] | | | | | | | | | | | | | | | |

| Net income [removed: (loss)] per share | | | | | | | | | | | | | | | |

| (1) | Our reporting period is a 52/53-week fiscal year. The fiscal years ended June [removed: 30, 2019,] [added: 28, 2020,] and June [removed: 24, 2018,] [added: 30, 2019,] included [removed: 53 and] 52 [added: and 53] weeks, respectively. All quarters presented above included 13 weeks, except for the quarter ended March 31, 2019, which includes 14 weeks. |

| Revenue | $ | 2,791,864 | | | $ | 2,503,625 | | | $ | 2,583,501 | | | $ | 2,165,746 | |

| Gross margin | 1,280,332 | | | | 1,167,007 | | | | 1,179,644 | | | | 981,710 | | |

| Operating income | 755,722 | | | | 694,114 | | | | 686,511 | | | | 537,455 | | |

| Net income | 696,673 | | | | 574,781 | | | | 514,510 | | | | 465,789 | | |

| Basic | $ | 4.79 | | | $ | 3.96 | | | $ | 3.57 | | | $ | 3.22 | |

| Diluted | $ | 4.73 | | | $ | 3.88 | | | $ | 3.43 | | | $ | 3.09 | |

| Basic | 145,295 | | | | 145,301 | | | | 143,987 | | | | 144,673 | | |

| Diluted | 147,416 | | | | 148,165 | | | | 150,097 | | | | 150,682 | | |

| Goodwill impairment (1) | — | | | | — | | | | — | | | | — | | | | 79,444 | | | |

| | |

| --- | --- |

| (1) | Goodwill impairment analysis during fiscal year 2015 resulted in a non-cash impairment charge to our Clean reporting unit, extinguishing the goodwill ascribed to the reporting unit. |

| Revenue | $ | 3,125,928 | | | $ | 2,892,115 | | | $ | 2,580,815 | | | $ | 2,478,140 | |

| Gross margin | 1,479,408 | | | | 1,330,714 | | | | 1,205,567 | | | | 1,149,343 | | |

| Operating income | 955,195 | | | | 827,511 | | | | 737,371 | | | | 693,222 | | |

| Net income (loss) | 1,021,146 | | | (2) | 778,800 | | | | (9,955 | | ) | (2) | 590,690 | | |

| Basic | $ | 6.35 | | | $ | 4.80 | | | $ | (0.06 | ) | (2) | $ | 3.64 | |

| Diluted | $ | 5.82 | | | $ | 4.33 | | | $ | (0.06 | ) | (2) | $ | 3.21 | |

| Basic | 160,916 | | | | 162,378 | | | | 161,135 | | | | 162,141 | | |

| Diluted | 175,432 | | | | 179,779 | | | | 161,135 | | | | 183,880 | | |

| (2) | The comparability of our quarter ended December 24, 2017 was affected by a $757 million provisional charge associated with the December 2017 U.S. tax reform. During the quarter ended June 24, 2018, $116 million of this provisional charge was reversed. |

| Consolidated Statements of Operations — Years Ended June [added: 28, 2020, June] 30, 2019, [removed: June 24, 2018,] and June [removed: 25, 2017] [added: 24, 2018] | [removed: [51](#s0D8F5DE0DF1C5BB786CF26031EEC8F9E)] [added: [50](#sA99AB236FB3056708F100EE069004FE9)] |

| Consolidated Statements of Comprehensive Income — Years Ended June [added: 28, 2020, June] 30, 2019, [removed: June 24, 2018,] and June [removed: 25, 2017] [added: 24, 2018] | [removed: [52](#s9F3A26BAF61D5BB68FEA249C1E124110)] [added: [51](#s95127699A79A527990E7147A91DEFAF2)] |

| Consolidated Balance Sheets — June [removed: 30, 2019,] [added: 28, 2020,] and June [removed: 24, 2018] [added: 30, 2019] | [removed: [53](#s1706372261A95B2681DF4DDACACB3F38)] [added: [52](#s3F8EDF7394655D9E8AE84EDC76AEC762)] |

| Consolidated Statements of Cash Flows — Years Ended June [added: 28, 2020, June] 30, 2019, [removed: June 24, 2018,] and June [removed: 25, 2017] [added: 24, 2018] | [removed: [54](#s43ECA216BCA7582AB3DE36D92DBB90F1)] [added: [53](#s620857DBB69B5154ABC4E425A6A8D704)] |

| Consolidated Statements of Stockholders’ Equity — Years Ended June [added: 28, 2020, June] 30, 2019, [removed: June 24, 2018,] and June [removed: 25, 2017] [added: 24, 2018] | [removed: [56](#s2C1E2F8871A258198E0A566ABD96304F)] [added: [55](#s40D1193C16955485B39643C2F75B8298)] |

| Notes to Consolidated Financial Statements | [removed: [58](#sC5CAB7C958195EF7AF32A0FAA4384DF0)] [added: [57](#s494333AAF33E5CD1B5627FEAD0925D6F)] |

| Reports of Independent Registered Public Accounting Firm | [removed: [95](#s38CFE2E9465A5A0299ED5A107F4B969D)] [added: [93](#s8A2035FA1E355B7E8979C6FAC5460D0F)] |

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Lam Research Corporation [removed: 2019] [added: 2020] 10-K [removed: 50][added: 49]

[removed: ][added: ]

| June [removed: 30, 2019] [added: 28, 2020] | | | | June [removed: 24, 2018] [added: 30, 2019] | | | | June [removed: 25, 2017] [added: 24, 2018] | | | |

| Revenue | $ | [removed: 9,653,559] [added: 10,044,736] | | | $ | [removed: 11,076,998] [added: 9,653,559] | | | $ | [removed: 8,013,620] [added: 11,076,998] | |

| Cost of goods sold | [removed: 5,295,100] [added: 5,436,043] | | | | [removed: 5,911,966] [added: 5,295,100] | | | | [removed: 4,410,261] [added: 5,911,966] | | |

| Gross margin | [removed: 4,358,459] [added: 4,608,693] | | | | [removed: 5,165,032] [added: 4,358,459] | | | | [removed: 3,603,359] [added: 5,165,032] | | |

| Research and development | [removed: 1,191,320] [added: 1,252,412] | | | | [removed: 1,189,514] [added: 1,191,320] | | | | [removed: 1,033,742] [added: 1,189,514] | | |

| Selling, general, and administrative | [removed: 702,407] [added: 682,479] | | | | [removed: 762,219] [added: 702,407] | | | | [removed: 667,485] [added: 762,219] | | |

| Total operating expenses | [removed: 1,893,727] [added: 1,934,891] | | | | [removed: 1,951,733] [added: 1,893,727] | | | | [removed: 1,701,227] [added: 1,951,733] | | |

| Operating income | [removed: 2,464,732] [added: 2,673,802] | | | | [removed: 3,213,299] [added: 2,464,732] | | | | [removed: 1,902,132] [added: 3,213,299] | | |

| Other expense, net | [removed: (18,161] [added: (98,824] | | ) | | [removed: (61,510] [added: (18,161] | | ) | | [removed: (90,459] [added: (61,510] | | ) |

| Income before income taxes | [removed: 2,446,571] [added: 2,574,978] | | | | [removed: 3,151,789] [added: 2,446,571] | | | | [removed: 1,811,673] [added: 3,151,789] | | |

| Income tax expense | [removed: (255,141] [added: (323,225] | | ) | | [removed: (771,108] [added: (255,141] | | ) | | [removed: (113,910] [added: (771,108] | | ) |

| Net income | $ | [removed: 2,191,430] [added: 2,251,753] | | | $ | [removed: 2,380,681] [added: 2,191,430] | | | $ | [removed: 1,697,763] [added: 2,380,681] | |

| Basic | $ | [removed: 14.37] [added: 15.55] | | | $ | [removed: 14.73] [added: 14.37] | | | $ | [removed: 10.47] [added: 14.73] | |

| Diluted | $ | [removed: 13.70] [added: 15.10] | | | $ | [removed: 13.17] [added: 13.70] | | | $ | [removed: 9.24] [added: 13.17] | |

| Basic | [removed: 152,478] [added: 144,814] | | | | [removed: 161,643] [added: 152,478] | | | | [removed: 162,222] [added: 161,643] | | |

| Diluted | [removed: 159,915] [added: 149,090] | | | | [removed: 180,782] [added: 159,915] | | | | [removed: 183,770] [added: 180,782] | | |

Lam Research Corporation [removed: 2019] [added: 2020] 10-K [removed: 51][added: 50]

| Foreign currency translation adjustment | [removed: (6,648] [added: (6,441] | | ) | | [removed: 9,649] [added: (6,648] | | [added: )] | | [removed: (2,843] [added: 9,649] | | [removed: )] |

| Net unrealized [removed: gains] (losses) [added: gains] during the period | [removed: 2,461] [added: (30,603] | | [added: )] | | [removed: (6,960] [added: 2,461] | | [removed: )] | | [removed: 5,841] [added: (6,960] | | [added: )] |

| Net [removed: (gains)] losses [added: (gains)] reclassified into earnings | [removed: (2,749] [added: 2,137] | | [removed: )] | | [removed: 3,729] [added: (2,749] | | [added: )] | | [removed: 8,971] [added: 3,729] | | |

| | [removed: (288] [added: (28,466] | | ) | | [removed: (3,231] [added: (288] | | ) | | [removed: 14,812] [added: (3,231] | | [added: )] |

| Net unrealized gains (losses) during the period | [removed: 3,535] [added: 1,842] | | | | [removed: (45,382] [added: 3,535] | | [removed: )] | | [removed: (3,789] [added: (45,382] | | ) |

| Net [removed: (gains)] losses [added: (gains)] reclassified into earnings | [removed: (199] [added: 935] | | [removed: )] | | [removed: 43,086] [added: (199] | | [added: )] | | [removed: (1] [added: 43,086] | | [removed: )] |

| | [removed: 3,336] [added: 2,777] | | | | [removed: (2,296] [added: 3,336] | | [removed: )] | | [removed: (3,790] [added: (2,296] | | ) |

| Defined benefit plans, net change in unrealized component | [removed: (2,981] [added: 1,949] | | [removed: )] | | [removed: 129] [added: (2,981] | | [added: )] | | [removed: (546] [added: 129] | | [removed: )] |

| Other comprehensive (loss) income, net of tax | [removed: (6,581] [added: (30,181] | | ) | | [removed: 4,251] [added: (6,581] | | [added: )] | | [removed: 7,633] [added: 4,251] | | |

| Comprehensive income | $ | [removed: 2,184,849] [added: 2,221,572] | | | $ | [removed: 2,384,932] [added: 2,184,849] | | | $ | [removed: 1,705,396] [added: 2,384,932] | |

Lam Research Corporation [removed: 2019] [added: 2020] 10-K [removed: 52][added: 51]

| [added: June 28, 2020] | [added: | | |] June 30, 2019 | | | | June 24, 2018 | | | [added: |]

| Cash and cash equivalents | $ | [added: 4,915,172 | | | $ |] 3,658,219 | | | $ | 4,512,257 | |

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| Net income | $ | 2,251,753 | | | $ | 2,191,430 | | | $ | 2,380,681 | |

| Other, net | 688 | | | | (5,819 | | ) | | 33,718 | | |

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| Sale of common stock | 1,288 | | | $ | 1 | | | $ | 8,083 | | | $ | — | | | $ | — | | | $ | — | | | $ | 8,084 | |

| Purchase of treasury stock | (5,371 | ) | | (5 | | ) | | — | | | | (1,369,697 | | ) | | — | | | | — | | | | (1,369,702 | | ) |

| Reissuance of treasury stock | 513 | | | 1 | | | | 63,057 | | | | 22,381 | | | | — | | | | — | | | | 85,439 | | |

| Adoption of ASU 2016-02 | — | | | — | | | | — | | | | — | | | | — | | | | 3,018 | | | | 3,018 | | |

| Net income | — | | | — | | | | — | | | | — | | | | — | | | | 2,251,753 | | | | 2,251,753 | | |

| Other comprehensive loss | — | | | — | | | | — | | | | — | | | | (30,181 | | ) | | — | | | | (30,181 | | ) |

| Balance at June 28, 2020 | 145,331 | | | $ | 145 | | | $ | 6,695,858 | | | $ | (12,949,889 | ) | | $ | (94,211 | ) | | $ | 11,520,591 | | | $ | 5,172,494 | |

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June 28, 2020

Fixed consideration includes amounts to be contractually billed to the customer while variable consideration includes estimates for discounts and credits for

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assets to the amount that is more likely than not to be realized.

In addition, the Company makes certain judgments

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In addition, for fully amortized intangible assets, we derecognize the gross cost and accumulated amortization in the period we determine the intangible asset no longer enhances future cash flows.

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*Leases:* Lease expense for operating leases is recognized on a straight-line basis over the lease term.

The Company includes renewals and terminations in the calculation of the right-of-use asset and liability when the provision is reasonably certain to be exercised.

The Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future lease payments when the rate implicit in the lease is unknown.

The Company has elected the following practical expedients and accounting policy elections for accounting under ASC 842: (i) leases with an initial lease term of 12 months or less are not recorded on the balance sheet; and (ii) lease and non-lease components of a contract are accounted for as a single lease component.

| | |

| --- | --- |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Excess tax benefits on equity-based compensation plans | — | | | | — | | | | (38,635 | | ) |

| (Gains) losses on extinguishment of debt, net | (118 | | ) | | (542 | | ) | | 36,252 | | |

| Gain on sale of assets | — | | | | — | | | | (163 | | ) |

| Other, net | (5,701 | | ) | | 34,260 | | | | 19,052 | | |

| Proceeds from sale of assets | — | | | | — | | | | 1,291 | | |

| Excess tax benefits on equity-based compensation plans | — | | | | — | | | | 38,635 | | |

| Balance at June 26, 2016 | 160,201 | | | $ | 160 | | | $ | 5,572,898 | | | $ | (4,429,317 | ) | | $ | (69,333 | ) | | $ | 4,820,109 | | | $ | 5,894,517 | |

| Sale of common stock | 2,661 | | | 3 | | | | 12,910 | | | | — | | | | — | | | | — | | | | 12,913 | | |

| Purchase of treasury stock | (5,322 | ) | | (5 | | ) | | — | | | | (811,667 | | ) | | — | | | | — | | | | (811,672 | | ) |

| Income tax benefits on equity-based compensation plans | — | | | — | | | | 38,747 | | | | — | | | | — | | | | — | | | | 38,747 | | |

| Reissuance of treasury stock | 825 | | | 1 | | | | 34,865 | | | | 24,797 | | | | — | | | | — | | | | 59,663 | | |

| Exercise of warrants | 1,970 | | | 2 | | | | (5 | | ) | | — | | | | — | | | | — | | | | (3 | | ) |

| Net income | — | | | — | | | | — | | | | — | | | | — | | | | 1,697,763 | | | | 1,697,763 | | |

| Other comprehensive income | — | | | — | | | | — | | | | — | | | | 7,633 | | | | — | | | | 7,633 | | |

Reclassification: Certain amounts for the fiscal years 2018 and 2017 Consolidated Statement of Cash Flows, and certain amounts within the 2017 footnotes have been reclassified to conform to the fiscal year 2019 presentation.

Fixed consideration includes amounts to be

as well as the tax effect of carryforwards.

determining the cash flows attributable to a reporting unit.

In May 2014, the FASB released ASU 2014-09, “Revenue from Contracts with Customers,” to supersede nearly all existing revenue recognition guidance under GAAP.

The core principle of the standard is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services.

In connection with the adoption of ASC 606, the Company’s revenue recognition policy has been amended, refer to Note 2 - Summary of Significant Accounting Policies for a description of the policy.

The cumulative effect of the changes made to the Company’s Consolidated Balance Sheet as of June 25, 2018 for the adoption of ASC 606 to all contracts with customers that were not completed as of June 24, 2018 was recorded as an adjustment to retained earnings as of the adoption date as follows:

| As reported | | | | Adjustments | | | | As Adjusted | | | |

| Total assets | $ | 12,479,478 | | | $ | 12,955 | | | $ | 12,492,433 | |

| Deferred profit | $ | 720,086 | | | $ | (160,695 | ) | | $ | 559,391 | |

| Total liabilities | $ | 5,899,435 | | | $ | (126,400 | ) | | $ | 5,773,035 | |

| Stockholder’s equity | $ | 6,501,851 | | | $ | 139,355 | | | $ | 6,641,206 | |

Upon adoption, the Company recorded a cumulative effect adjustment of $139.4 million, net of tax adjustment of $21.0 million, which increased the June 25, 2018 opening retained earnings balance on the Condensed Consolidated Balance Sheet, primarily as a result of changes in the timing of recognition of system sales.

Under ASC 606, the Company recognizes revenue from sales of systems when the Company determines that control has passed to the customer which is generally (1) for products that have been demonstrated to meet product specifications prior to shipment upon shipment or delivery; (2) for products that have not been demonstrated to meet product specifications prior to shipment, revenue is recognized upon completion of installation and receipt of customer acceptance; (3) for transactions where legal title does not pass upon shipment or delivery and the Company does not have a right to payment, revenue is recognized when legal title passes to the customer and the Company has a right to payment, which is generally at customer acceptance.

The impact of adoption of ASC 606 on the Company's Consolidated Statement of Operations and Consolidated Balance Sheet was as follows:

| | As Reported | | | | Without adoption of ASC 606 | | | | Effect of Change Higher/(Lower) | | |

| Revenue | $ | 9,653,559 | | | $ | 9,049,790 | | | $ | 603,769 | |

| Cost of goods sold | $ | 5,295,100 | | | $ | 5,016,679 | | | $ | 278,421 | |

| Deferred profit | $ | 381,317 | | | $ | 846,422 | | | $ | (465,105 | ) |

| Retained earnings | $ | 9,930,919 | | | $ | 9,465,814 | | | $ | 465,105 | |

Except as disclosed above, the adoption of ASC 606 did not have a significant impact on the Company’s Consolidated Statement of Operations for the year ended June 30, 2019.

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of June [removed: 30, 2019,] [added: 28, 2020,] we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e).

Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer each concluded that our disclosure controls and procedures are effective, as of June [removed: 30, 2019,] [added: 28, 2020,] at the reasonable assurance level.

Based on that evaluation, management has concluded that the Company’s internal control over financial reporting was effective as of June [removed: 30, 2019,] [added: 28, 2020,] at providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

Ernst & Young LLP, an independent registered public accounting firm, audited the financial statements included in this [removed: 2019] [added: 2020] Form 10-K and has issued an attestation report on the Company’s internal control over financial reporting, as stated in their report, which is included in Part II, Item 8 of this [removed: 2019] [added: 2020] Form 10-K.

In response to the COVID-19 pandemic a significant number of our employees are working remotely.

The design of our business processes and internal controls enabled remote execution through secure remote access to data.

While certain of our business processes required slight modification as a result of the need for remote work, those changes did not result in the need for significant adjustments to our internal control structure.

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Lam Research Corporation 2020 10-K 96


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Lam Research Corporation [removed: 2019] [added: 2020] 10-K [removed: 98][added: 97]

[removed: ][added: ]

We have omitted from this [removed: 2019] [added: 2020] Form 10-K certain information required by Part III because we, as the Registrant, will file a definitive proxy statement with the SEC within 120 days after the end of our fiscal year, pursuant to Regulation 14A, as promulgated by the SEC, for our Annual Meeting of Stockholders expected to be held on or about November [removed: 5, 2019,] [added: 3, 2020,] (the “Proxy Statement”), and certain information included in the Proxy Statement is incorporated into this report by reference.

For information regarding our executive officers, see Part I, Item 1 of this [removed: 2019] [added: 2020] Form 10-K under the caption “Information about our Executive Officers,” which information is incorporated into Part III by reference.

The information concerning our directors required by this Item is incorporated by reference to our Proxy Statement under the heading “Voting Proposals — Proposal No. 1: Election of Directors — [removed: 2019] [added: 2020] Nominees for Director.”

The information concerning compliance by our officers, directors and 10% stockholders with Section 16 of the Exchange Act required by this Item is incorporated by reference to our Proxy Statement under the heading “Stock Ownership – Delinquent Section 16(a) Reports.”

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Lam Research Corporation [removed: 2019] [added: 2020] 10-K [removed: 99][added: 98]

[removed: ][added: ]

| Consolidated Statements of Operations — Years Ended June [added: 28, 2020, June] 30, 2019, [removed: June 24, 2018,] and June [removed: 25, 2017] [added: 24, 2018] | [removed: [51](#s0D8F5DE0DF1C5BB786CF26031EEC8F9E)] [added: [50](#sA99AB236FB3056708F100EE069004FE9)] |

| Consolidated Statements of Comprehensive Income — Years Ended June [added: 28, 2020, June] 30, 2019, [removed: June 24, 2018,] and June [removed: 25, 2017] [added: 24, 2018] | [removed: [52](#s9F3A26BAF61D5BB68FEA249C1E124110)] [added: [51](#s95127699A79A527990E7147A91DEFAF2)] |

| Consolidated Balance Sheets — June [removed: 30, 2019,] [added: 28, 2020,] and June [removed: 24, 2018] [added: 30, 2019] | [removed: [53](#s1706372261A95B2681DF4DDACACB3F38)] [added: [52](#s3F8EDF7394655D9E8AE84EDC76AEC762)] |

| Consolidated Statements of Cash Flows — Years Ended June [added: 28, 2020, June] 30, 2019, [removed: June 24, 2018,] and June [removed: 25, 2017] [added: 24, 2018] | [removed: [54](#s43ECA216BCA7582AB3DE36D92DBB90F1)] [added: [53](#s620857DBB69B5154ABC4E425A6A8D704)] |

| Consolidated Statements of Stockholders’ Equity — Years Ended June [added: 28, 2020, June] 30, 2019, [removed: June 24, 2018,] and June [removed: 25, 2017] [added: 24, 2018] | [removed: [56](#s2C1E2F8871A258198E0A566ABD96304F)] [added: [55](#s40D1193C16955485B39643C2F75B8298)] |

| Notes to Consolidated Financial Statements | [removed: [58](#sC5CAB7C958195EF7AF32A0FAA4384DF0)] [added: [57](#s494333AAF33E5CD1B5627FEAD0925D6F)] |