Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Lam Research Corp., balance sheet: goodwill and intangible assets

US$ in thousands

	Jun 25, 2023	Jun 26, 2022	Jun 27, 2021	Jun 28, 2020	Jun 30, 2019	Jun 24, 2018
Goodwill	1,622,489)	1,515,113)	1,490,134)	1,484,436)	1,484,597)	1,484,904)
Customer relationships	644,138)	633,252)	630,303)	630,137)	630,165)	630,220)
Existing technology	717,331)	676,924)	669,359)	668,992)	669,399)	669,520)
Patents and other intangible assets	199,532)	167,821)	132,774)	98,342)	126,235)	99,767)
Intangible assets subject to amortization, gross	1,561,001)	1,477,997)	1,432,436)	1,397,471)	1,425,799)	1,399,507)
Accumulated amortization	(1,422,628)	(1,376,147)	(1,300,071)	(1,228,939)	(1,208,849)	(1,081,671)
Intangible assets subject to amortization, net	138,373)	101,850)	132,365)	168,532)	216,950)	317,836)
In process research and development	30,081)	—)	—)	—)	—)	—)
Intangible assets	168,454)	101,850)	132,365)	168,532)	216,950)	317,836)
Goodwill and intangible assets	1,790,943)	1,616,963)	1,622,499)	1,652,968)	1,701,547)	1,802,740)

Based on: 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27), 10-K (reporting date: 2020-06-28), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-24).

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Item	Description	The company
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	Lam Research Corp. goodwill increased from 2021 to 2022 and from 2022 to 2023.
Intangible assets	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Lam Research Corp. intangible assets decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Goodwill and intangible assets	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Lam Research Corp. goodwill and intangible assets decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Lam Research Corp., adjustments to financial statements

US$ in thousands

	Jun 25, 2023	Jun 26, 2022	Jun 27, 2021	Jun 28, 2020	Jun 30, 2019	Jun 24, 2018
Adjustment to Total Assets
Total assets (as reported)	18,781,643)	17,195,632)	15,892,152)	14,559,047)	12,001,333)	12,479,478)
Less: Goodwill	1,622,489)	1,515,113)	1,490,134)	1,484,436)	1,484,597)	1,484,904)
Total assets (adjusted)	17,159,154)	15,680,519)	14,402,018)	13,074,611)	10,516,736)	10,994,574)
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported)	8,210,172)	6,278,366)	6,027,188)	5,172,494)	4,673,865)	6,501,851)
Less: Goodwill	1,622,489)	1,515,113)	1,490,134)	1,484,436)	1,484,597)	1,484,904)
Stockholders’ equity (adjusted)	6,587,683)	4,763,253)	4,537,054)	3,688,058)	3,189,268)	5,016,947)

Based on: 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27), 10-K (reporting date: 2020-06-28), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-24).

Lam Research Corp., Financial Data: Reported vs. Adjusted

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Lam Research Corp., adjusted financial ratios

	Jun 25, 2023	Jun 26, 2022	Jun 27, 2021	Jun 28, 2020	Jun 30, 2019	Jun 24, 2018
Total Asset Turnover
Reported total asset turnover	0.93	1.00	0.92	0.69	0.80	0.89
Adjusted total asset turnover	1.02	1.10	1.02	0.77	0.92	1.01
Financial Leverage
Reported financial leverage	2.29	2.74	2.64	2.81	2.57	1.92
Adjusted financial leverage	2.60	3.29	3.17	3.55	3.30	2.19
Return on Equity (ROE)
Reported ROE	54.94%	73.35%	64.85%	43.53%	46.89%	36.62%
Adjusted ROE	68.48%	96.68%	86.15%	61.06%	68.71%	47.45%
Return on Assets (ROA)
Reported ROA	24.02%	26.78%	24.59%	15.47%	18.26%	19.08%
Adjusted ROA	26.29%	29.37%	27.14%	17.22%	20.84%	21.65%

Based on: 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27), 10-K (reporting date: 2020-06-28), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-24).

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Lam Research Corp. adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Lam Research Corp. adjusted financial leverage ratio increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Lam Research Corp. adjusted ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Lam Research Corp. adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Lam Research Corp., Financial Ratios: Reported vs. Adjusted

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	Jun 25, 2023	Jun 26, 2022	Jun 27, 2021	Jun 28, 2020	Jun 30, 2019	Jun 24, 2018
As Reported
Selected Financial Data (US$ in thousands)
Revenue	17,428,516)	17,227,039)	14,626,150)	10,044,736)	9,653,559)	11,076,998)
Total assets	18,781,643)	17,195,632)	15,892,152)	14,559,047)	12,001,333)	12,479,478)
Activity Ratio
Total asset turnover¹	0.93	1.00	0.92	0.69	0.80	0.89
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Revenue	17,428,516)	17,227,039)	14,626,150)	10,044,736)	9,653,559)	11,076,998)
Adjusted total assets	17,159,154)	15,680,519)	14,402,018)	13,074,611)	10,516,736)	10,994,574)
Activity Ratio
Adjusted total asset turnover²	1.02	1.10	1.02	0.77	0.92	1.01

Based on: 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27), 10-K (reporting date: 2020-06-28), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-24).

2023 Calculations

¹ Total asset turnover = Revenue ÷ Total assets
= 17,428,516 ÷ 18,781,643 = 0.93

² Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 17,428,516 ÷ 17,159,154 = 1.02

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Lam Research Corp. adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

	Jun 25, 2023	Jun 26, 2022	Jun 27, 2021	Jun 28, 2020	Jun 30, 2019	Jun 24, 2018
As Reported
Selected Financial Data (US$ in thousands)
Total assets	18,781,643)	17,195,632)	15,892,152)	14,559,047)	12,001,333)	12,479,478)
Stockholders’ equity	8,210,172)	6,278,366)	6,027,188)	5,172,494)	4,673,865)	6,501,851)
Solvency Ratio
Financial leverage¹	2.29	2.74	2.64	2.81	2.57	1.92
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted total assets	17,159,154)	15,680,519)	14,402,018)	13,074,611)	10,516,736)	10,994,574)
Adjusted stockholders’ equity	6,587,683)	4,763,253)	4,537,054)	3,688,058)	3,189,268)	5,016,947)
Solvency Ratio
Adjusted financial leverage²	2.60	3.29	3.17	3.55	3.30	2.19

Based on: 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27), 10-K (reporting date: 2020-06-28), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-24).

2023 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity
= 18,781,643 ÷ 8,210,172 = 2.29

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 17,159,154 ÷ 6,587,683 = 2.60

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Lam Research Corp. adjusted financial leverage ratio increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

	Jun 25, 2023	Jun 26, 2022	Jun 27, 2021	Jun 28, 2020	Jun 30, 2019	Jun 24, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income	4,510,931)	4,605,286)	3,908,458)	2,251,753)	2,191,430)	2,380,681)
Stockholders’ equity	8,210,172)	6,278,366)	6,027,188)	5,172,494)	4,673,865)	6,501,851)
Profitability Ratio
ROE¹	54.94%	73.35%	64.85%	43.53%	46.89%	36.62%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income	4,510,931)	4,605,286)	3,908,458)	2,251,753)	2,191,430)	2,380,681)
Adjusted stockholders’ equity	6,587,683)	4,763,253)	4,537,054)	3,688,058)	3,189,268)	5,016,947)
Profitability Ratio
Adjusted ROE²	68.48%	96.68%	86.15%	61.06%	68.71%	47.45%

Based on: 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27), 10-K (reporting date: 2020-06-28), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-24).

2023 Calculations

¹ ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 4,510,931 ÷ 8,210,172 = 54.94%

² Adjusted ROE = 100 × Net income ÷ Adjusted stockholders’ equity
= 100 × 4,510,931 ÷ 6,587,683 = 68.48%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Lam Research Corp. adjusted ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

	Jun 25, 2023	Jun 26, 2022	Jun 27, 2021	Jun 28, 2020	Jun 30, 2019	Jun 24, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income	4,510,931)	4,605,286)	3,908,458)	2,251,753)	2,191,430)	2,380,681)
Total assets	18,781,643)	17,195,632)	15,892,152)	14,559,047)	12,001,333)	12,479,478)
Profitability Ratio
ROA¹	24.02%	26.78%	24.59%	15.47%	18.26%	19.08%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income	4,510,931)	4,605,286)	3,908,458)	2,251,753)	2,191,430)	2,380,681)
Adjusted total assets	17,159,154)	15,680,519)	14,402,018)	13,074,611)	10,516,736)	10,994,574)
Profitability Ratio
Adjusted ROA²	26.29%	29.37%	27.14%	17.22%	20.84%	21.65%

Based on: 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27), 10-K (reporting date: 2020-06-28), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-24).

2023 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 4,510,931 ÷ 18,781,643 = 24.02%

² Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 4,510,931 ÷ 17,159,154 = 26.29%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Lam Research Corp. adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Lam Research Corp. (NASDAQ:LRCX)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

Lam Research Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Lam Research Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)