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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 27, 2022
or 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number 0-12933 
___________________________________________________________
LAM RESEARCH CORPORATION
(Exact name of registrant as specified in its charter)
___________________________________________________________
Delaware 94-2634797
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
4650 Cushing Parkway,Fremont,California 94538
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (510) 572-0200
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, Par Value $0.001 Per ShareLRCXThe Nasdaq Stock Market
(Nasdaq Global Select Market)
__________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer   Accelerated filer 
Non-accelerated filer   Smaller reporting company 
Emerging growth company
    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
As of April 22, 2022, the Registrant had 138,715,027 shares of Common Stock outstanding.




LAM RESEARCH CORPORATION
TABLE OF CONTENTS
 
  Page No.
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


PART I. FINANCIAL INFORMATION

ITEM 1.    Financial Statements

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
 
Three Months EndedNine Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
Revenue$4,060,416 $3,847,654 $12,591,485 $10,480,971 
Cost of goods sold2,243,791 2,067,523 6,820,190 5,590,866 
Gross margin1,816,625 1,780,131 5,771,295 4,890,105 
Research and development407,120 381,120 1,193,091 1,111,659 
Selling, general, and administrative217,408 203,703 675,735 612,350 
Total operating expenses624,528 584,823 1,868,826 1,724,009 
Operating income1,192,097 1,195,308 3,902,469 3,166,096 
Other income (expense), net(57,402)(35,320)(68,260)(104,053)
Income before income taxes1,134,695 1,159,988 3,834,209 3,062,043 
Income tax expense(112,917)(88,867)(437,857)(298,242)
Net income$1,021,778 $1,071,121 $3,396,352 $2,763,801 
Net income per share:
Basic$7.34 $7.51 $24.17 $19.20 
Diluted$7.30 $7.41 $24.02 $18.94 
Number of shares used in per share calculations:
Basic139,229 142,676 140,534 143,925 
Diluted140,057 144,609 141,400 145,923 











See Notes to Condensed Consolidated Financial Statements

3



LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)

 
Three Months EndedNine Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
Net income$1,021,778 $1,071,121 $3,396,352 $2,763,801 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment(14,958)(13,701)(28,810)20,231 
Cash flow hedges:
Net unrealized gains during the period12,506 8,024 16,293 12,546 
Net (gains) losses reclassified into net income(5,759)(207)(17,205)843 
6,747 7,817 (912)13,389 
Available-for-sale investments:
Net unrealized losses during the period(1,333)(1,623)(4,523)(3,667)
Net (gains) losses reclassified into net income(34)162 1,456 727 
(1,367)(1,461)(3,067)(2,940)
Defined benefit plans, net change in unrealized component58 174 (749)234 
Other comprehensive (loss) income, net of tax(9,520)(7,171)(33,538)30,914 
Comprehensive income $1,012,258 $1,063,950 $3,362,814 $2,794,715 
See Notes to Condensed Consolidated Financial Statements
4

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
 
March 27,
2022
June 27,
2021
(unaudited)(1)
ASSETS
Cash and cash equivalents$4,194,719 $4,418,263 
Investments160,072 1,310,872 
Accounts receivable, less allowance of $5,602 as of March 27, 2022, and $5,255 as of June 27, 2021
3,702,320 3,026,430 
Inventories3,479,332 2,689,294 
Prepaid expenses and other current assets351,658 207,528 
Total current assets11,888,101 11,652,387 
Property and equipment, net1,561,875 1,303,479 
Restricted cash and investments251,036 252,487 
Goodwill1,513,729 1,490,134 
Intangible assets, net113,306 132,365 
Other assets1,260,984 1,061,300 
Total assets$16,589,031 $15,892,152 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable$1,007,026 $829,710 
Accrued expenses and other current liabilities1,634,917 1,719,483 
Deferred profit1,545,109 967,325 
Current portion of long-term debt and finance lease obligations7,689 11,349 
Total current liabilities4,194,741 3,527,867 
Long-term debt and finance lease obligations, less current portion5,000,657 4,990,333 
Income taxes payable916,668 948,037 
Other long-term liabilities450,475 398,727 
Total liabilities10,562,541 9,864,964 
Commitments and contingencies
Stockholders’ equity:
Preferred stock, at par value of $0.001 per share; authorized, 5,000 shares, none outstanding
  
Common stock, at par value of $0.001 per share; authorized, 400,000 shares as of March 27, 2022 and June 27, 2021; issued and outstanding, 138,707 shares as of March 27, 2022, and 142,501 shares as of June 27, 2021
139 143 
Additional paid-in capital7,289,393 7,052,962 
Treasury stock, at cost; 155,323 shares as of March 27, 2022, and 150,766 shares as of June 27, 2021
(18,616,780)(15,646,701)
Accumulated other comprehensive loss(97,666)(64,128)
Retained earnings17,451,404 14,684,912 
Total stockholders’ equity6,026,490 6,027,188 
Total liabilities and stockholders’ equity$16,589,031 $15,892,152 
(1) Derived from audited financial statements

See Notes to Condensed Consolidated Financial Statements
5

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Nine Months Ended
March 27,
2022
March 28,
2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income3,396,352 $2,763,801 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization245,807 228,754 
Deferred income taxes(83,451)(5,448)
Equity-based compensation expense189,476 163,843 
Other, net(78,325)10,394 
Changes in operating assets and liabilities(1,014,119)(1,009,116)
Net cash provided by operating activities2,655,740 2,152,228 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures and intangible assets(420,288)(244,474)
Purchases of available-for-sale securities(567,819)(3,242,741)
Maturities of available-for-sales securities167,123 1,951,037 
Sales of available-for-sale securities1,543,094 956,261 
Other, net(33,898)(35,873)
Net cash provided by (used for) investing activities688,212 (615,790)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on debt(9,857)(40,014)
Treasury stock purchases(2,989,574)(2,266,449)
Dividends paid(607,234)(541,607)
Reissuance of treasury stock related to employee stock purchase plan46,380 41,434 
Proceeds from issuance of common stock4,685 23,272 
Other, net197 (1,844)
Net cash used for financing activities(3,555,403)(2,785,208)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(13,544)6,513 
Net decrease in cash, cash equivalents, and restricted cash(224,995)(1,242,257)
Cash, cash equivalents, and restricted cash at beginning of period4,670,750 5,169,083 
Cash, cash equivalents, and restricted cash at end of period$4,445,755 $3,926,826 
Schedule of non-cash transactions:
Accrued payables for stock repurchases4,624 5,855 
Accrued payables for capital expenditures57,930 80,215 
Dividends payable208,057 185,390 
Transfers of finished goods inventory to property and equipment62,116 59,882 
Reconciliation of cash, cash equivalents, and restricted cashMarch 27,
2022
March 28,
2021
Cash and cash equivalents$4,194,719 $3,673,366 
Restricted cash and cash equivalents251,036 253,460 
Total cash, cash equivalents, and restricted cash$4,445,755 $3,926,826 
See Notes to Condensed Consolidated Financial Statements
6

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)
Three Months Ended
March 27, 2022
Common
Stock
Shares
Common
Stock
Additional
Paid-in
Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
Balance at December 26, 2021140,275 $140 $7,220,359 $(17,294,255)$(88,146)$16,637,683 $6,475,781 
Issuance of common stock664 1 491 — — — 492 
Purchase of treasury stock(2,232)(2)— (1,322,525)— — (1,322,527)
Equity-based compensation expense— — 68,543 — — — 68,543 
Net income— — — — — 1,021,778 1,021,778 
Other comprehensive loss— — — — (9,520)— (9,520)
Cash dividends declared ($1.50 per common share)
— — — — — (208,057)(208,057)
Balance at March 27, 2022138,707 $139 $7,289,393 $(18,616,780)$(97,666)$17,451,404 $6,026,490 
Nine Months Ended
March 27, 2022
Common
Stock
Shares
Common
Stock
Additional
Paid-in
Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
Balance at June 27, 2021142,501 $143 $7,052,962 $(15,646,701)$(64,128)$14,684,912 $6,027,188 
Issuance of common stock763 1 4,684 — — — 4,685 
Purchase of treasury stock(4,654)(5)— (2,974,188)— — (2,974,193)
Reissuance of treasury stock97 — 42,271 4,109 — — 46,380 
Equity-based compensation expense— — 189,476 — — — 189,476 
Net income— — — — — 3,396,352 3,396,352 
Other comprehensive loss— — — — (33,538)— (33,538)
Cash dividends declared ($4.50 per common share)
— — — — — (629,860)(629,860)
Balance at March 27, 2022138,707 $139 $7,289,393 $(18,616,780)$(97,666)$17,451,404 $6,026,490 
See Notes to Condensed Consolidated Financial Statements
7

Three Months Ended
March 28, 2021
Common
Stock
Shares
Common
Stock
Additional
Paid-in
Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
Balance at December 26, 2020143,205 $143 $6,854,681 $(14,135,555)$(56,126)$12,839,890 $5,503,033 
Issuance of common stock848 1 9,625 — — — 9,626 
Purchase of treasury stock(1,731)(1)— (1,077,379)— — (1,077,380)
Equity-based compensation expense— — 55,746 — — — 55,746 
Effect of conversion of convertible notes285 — (327)— — — (327)
Reclassification from temporary to permanent equity— — 2,298 — — — 2,298 
Net income— — — — — 1,071,121 1,071,121 
Other comprehensive loss— — — — (7,171)— (7,171)
Cash dividends declared ($1.30 per common share)
— — — — — (185,330)(185,330)
Balance at March 28, 2021142,607 $143 $6,922,023 $(15,212,934)$(63,297)$13,725,681 $5,371,616 
Nine Months Ended
March 28, 2021
Common
Stock
Shares
Common
Stock
Additional
Paid-in
Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
Balance at June 28, 2020145,331 $145 $6,695,858 $(12,949,889)$(94,211)$11,520,591 $5,172,494 
Issuance of common stock1,053 1 23,271 — — — 23,272 
Purchase of treasury stock(4,887)(4)— (2,272,218)— — (2,272,222)
Reissuance of treasury stock207 — 32,261 9,173 — — 41,434 
Equity-based compensation expense— — 163,843 — — — 163,843 
Effect of conversion of convertible notes903 1 (988)— — — (987)
Reclassification from temporary to permanent equity— — 7,778 — — — 7,778 
Adoption of ASU 2018-18— — — — — 1,157 1,157 
Net income— — — — — 2,763,801 2,763,801 
Other comprehensive income— — — — 30,914 — 30,914 
Cash dividends declared ($3.90 per common share)
— — — — — (559,868)(559,868)
Balance at March 28, 2021142,607 $143 $6,922,023 $(15,212,934)$(63,297)$13,725,681 $5,371,616 
See Notes to Condensed Consolidated Financial Statements
8

LAM RESEARCH CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 27, 2022
(Unaudited)
NOTE 1 — BASIS OF PRESENTATION
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements of Lam Research Corporation (“Lam Research” or the “Company”) for the fiscal year ended June 27, 2021, which are included in the Company’s Annual Report on Form 10-K as of and for the year ended June 27, 2021 (the “2021 Form 10-K”). The Company’s reports on Form 10-K, Form 10-Q and Form 8-K are available online at the Securities and Exchange Commission website on the Internet. The address of that site is www.sec.gov. The Company also posts its reports on Form 10-K, Form 10-Q and Form 8-K on its corporate website at http://investor.lamresearch.com. The content on any website referred to in this Form 10-Q is not a part of or incorporated by reference in this Form 10-Q unless expressly noted.
The condensed consolidated financial statements include the accounts of Lam Research and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s reporting period is a 52/53-week fiscal year. The Company’s current fiscal year will end June 26, 2022 and includes 52 weeks. The quarters ended March 27, 2022 (the “March 2022 quarter”) and March 28, 2021 included 13 weeks.
NOTE 2 — RECENT ACCOUNTING PRONOUNCEMENTS
Recently Adopted
The Company did not adopt any new accounting standards during the first quarter of fiscal year 2022 that had a material impact on the Company’s Condensed Consolidated Financial Statements.
Updates Not Yet Adopted or Effective
In November 2021, the Financial Accounting Standards Board issued Accounting Standards Update 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance,” which requires business entities to make annual disclosures, including the nature of transactions and the related accounting policy used to account for the transactions, significant terms and conditions, and line items affected, about transactions with a government (including government assistance) that are accounted for by analogizing to a grant or contribution accounting model. The guidance is effective for financial statements issued for annual periods beginning after December 15, 2021, with early adoption permitted. The Company is required to adopt this standard in the first quarter of fiscal year 2023 for the annual reporting period ending June 25, 2023. The guidance may be applied either prospectively to all in-scope transactions at the date of initial application or retrospectively. The Company is currently in the process of evaluating the impact of adoption on its Consolidated Financial Statements.
NOTE 3 — REVENUE
Deferred Revenue
Revenue of $79.1 million and $835.8 million included in deferred revenue as of June 27, 2021 was recognized during the three and nine months ended March 27, 2022.
9


The following table summarizes the transaction price for contracts that have not yet been recognized as revenue as of March 27, 2022 and when the Company expects to recognize the amounts as revenue:
Less than 1 Year1-3 YearsMore than 3 YearsTotal
(In thousands)
Deferred revenue$1,876,645 $173,845 
(1)
$18,934 
(1)
$2,069,424 
(1) This amount is reported in Deferred profit on the Company's Condensed Consolidated Balance Sheets as the customers can demand the liability to be performed at any time.
Disaggregation of Revenue
The Company operates in one reportable business segment: manufacturing and servicing of wafer processing semiconductor manufacturing equipment. The Company’s material operating segments qualify for aggregation due to their customer base and similarities in economic characteristics, nature of products and services, and processes for procurement, manufacturing, and distribution.
The Company operates in seven geographic regions: United States, China, Europe, Japan, Korea, Southeast Asia, and Taiwan. For geographical reporting, revenue is attributed to the geographic location in which the customers’ facilities are located. The Company serves three primary markets: memory, foundry, and logic/integrated device manufacturing.
The following table presents the Company’s revenues disaggregated between system and its customer support-related revenue:
Three Months EndedNine Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
(In thousands)
System revenue$2,650,842 $2,545,306 $8,315,898 $7,000,968 
Customer support-related revenue and other1,409,574 1,302,348 4,275,587 3,480,003 
$4,060,416 $3,847,654 $12,591,485 $10,480,971 
System revenue includes sales of new leading-edge equipment in deposition, etch and clean markets.
Customer support-related revenue includes sales of customer service, spares, upgrades, and non-leading-edge equipment from the Company’s Reliant product line.
10


The following table presents the Company’s revenues disaggregated by geographic region:
Three Months EndedNine Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
(In thousands)
China$1,277,502 $1,217,427 $3,966,185 $3,600,281 
Korea961,300 1,195,711 2,947,657 2,664,493 
Taiwan663,494 545,719 2,074,681 1,576,109 
Southeast Asia378,481 260,360 1,108,111 829,157 
Japan342,329 262,913 1,324,996 999,462 
United States309,161 184,887 782,170 460,271 
Europe128,149 180,637 387,685 351,198 
$4,060,416 $3,847,654 $12,591,485 $10,480,971 
The following table presents the percentages of leading- and non-leading-edge equipment and upgrade revenue to each of the primary markets the Company serves:
Three Months EndedNine Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
Memory66 %62 %62 %62 %
Foundry21 %31 %26 %31 %
Logic/integrated device manufacturing13 %7 %12 %7 %
NOTE 4 — EQUITY-BASED COMPENSATION PLANS
The Lam Research Corporation 2015 Stock Incentive Plan, as amended (the “2015 Plan”), provides for the grant of non-qualified equity-based awards of the Company’s Common Stock to eligible employees and non-employee directors, including stock options, restricted stock units (“RSUs”), and market-based performance RSUs (“market-based PRSUs”). An option is a right to purchase Common Stock at a set price. An RSU award is an agreement to issue a set number of shares of Common Stock at the time of vesting. The Company’s market-based PRSUs contain both a market condition and a service condition. The Company’s option, RSU, and market-based PRSU awards typically vest over a period of three years. The Company also has an employee stock purchase plan that allows employees to purchase its Common Stock at a discount through payroll deductions.
The Company recognized the following equity-based compensation expense (including expense related to the employee stock purchase plan) and related income tax benefit in the Condensed Consolidated Statements of Operations:
Three Months EndedNine Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
(in thousands)
Equity-based compensation expense$68,543 $55,746 $189,476 $163,843 
Income tax benefit recognized related to equity-based compensation expense$23,933 $44,077 $41,155 $63,866 

11


NOTE 5 — OTHER INCOME (EXPENSE), NET
The significant components of other income (expense), net, are as follows:
Three Months EndedNine Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
(in thousands)
Interest income$1,938 $4,209 $8,988 $15,964 
Interest expense(46,710)(52,236)(138,531)(156,902)
(Losses) gains on deferred compensation plan-related assets, net(13,118)7,520 (5,737)44,654 
Foreign exchange gains (losses), net943 541 1,657 (4,597)
Other, net(455)4,646 65,363 (3,172)
$(57,402)$(35,320)$(68,260)$(104,053)
Other, net includes an unrealized gain totaling $63.6 million associated with an equity investee that became publicly traded during the nine months ended March 27, 2022. Refer to Note 8 - Financial Instruments for additional information regarding the Company’s investments.

NOTE 6 — INCOME TAX EXPENSE
The Company’s provision for income taxes and effective tax rate are as follows:
Three Months EndedNine Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
(in thousands, except percentages)
Income tax expense$112,917 $88,867 $437,857 $298,242 
Effective tax rate10.0 %7.7 %11.4 %9.7 %
The difference between the U.S. federal statutory tax rate of 21% and the Company’s effective tax rate for the three and nine months ended March 27, 2022 and March 28, 2021 was primarily due to income in lower tax jurisdictions.
The Company transferred its international sales operations from Switzerland to Malaysia, effective from fiscal year 2022. Through fiscal year 2036, the Company expects to operate under various tax incentives in Malaysia which provide exemptions on foreign income earned and are contingent upon meeting certain conditions.
The Internal Revenue Service (“IRS”) is examining the Company’s U.S. federal income tax return for the fiscal year ended June 24, 2018. As of March 27, 2022, no significant adjustments have been proposed by the IRS. The Company is unable to make a reasonable estimate as to when cash settlements, if any, with the IRS will occur.
The Company is in various stages of examinations in connection with all of its tax audits worldwide, and it is difficult to determine when these examinations will be settled. It is reasonably possible that over the next 12-month period the Company may experience an increase or decrease in its uncertain tax positions as a result of tax examinations or lapses of statutes of limitation. The change in uncertain tax positions as a result of lapses of statutes of limitation may range up to $11.3 million.
12


NOTE 7 — NET INCOME PER SHARE
Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the treasury stock method, for dilutive stock options, restricted stock units, and convertible notes. The following table reconciles the inputs to the basic and diluted computations for net income per share. 
Three Months EndedNine Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
(in thousands, except per share data)
Numerator:
Net income$1,021,778 $1,071,121 $3,396,352 $2,763,801 
Denominator:
Basic average shares outstanding139,229 142,676 140,534 143,925 
Effect of potential dilutive securities:
Employee stock plans828 1,415 866 1,273 
Convertible notes 518  725 
Diluted average shares outstanding140,057 144,609 141,400 145,923 
Net income per share - basic$7.34 $7.51 $24.17 $19.20 
Net income per share - diluted$7.30 $7.41 $24.02 $18.94 

For purposes of computing diluted net income per share, weighted-average common shares do not include potentially dilutive securities that are anti-dilutive under the treasury stock method. The impact from potentially dilutive securities, including options and RSUs, was not material for the three and nine months ended March 27, 2022 and March 28, 2021.

NOTE 8 — FINANCIAL INSTRUMENTS
The Company maintains an investment portfolio of various holdings, types, and maturities. The Company’s mutual funds, which are related to the Company’s obligations under the deferred compensation plan, are classified as trading securities. Investments classified as trading securities are recorded at fair value based upon quoted market prices. Differences between the cost and fair value of trading securities are recognized as other income (expense), net in the Condensed Consolidated Statements of Operations. All of the Company’s debt securities are classified as available-for-sale and consequently are recorded in the Condensed Consolidated Balance Sheets at fair value with unrealized gains or losses associated with market valuation changes, unrelated to credit losses, reported as a separate component of accumulated other comprehensive income (loss), net of tax; and credit losses, if any, recognized as other income (expense), net in the Condensed Consolidated Statements of Operations.
The Company periodically invests in equity securities. For equity investments that do not have a readily determinable fair value, the Company records them using either 1) the measurement alternative which measures the equity investments at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes; or 2) the equity method whereby the Company recognizes its proportional share of the income or loss from the equity method investment on a one-quarter lag. The equity method is utilized when the Company does not have the ability to control the investee but is deemed to have the ability to exercise significant influence over the investee’s operating or financial policies. For equity investments that have a readily determinable fair value, the Company records them at fair market value on a recurring basis based upon quoted market prices. Realized and unrealized gains and losses resulting from application of the measurement alternative, the impact of the application of the equity method to the Company’s equity investments, and recognition of changes in fair market value, as applicable, are recognized as other income (expense), net in the Condensed Consolidated Statements of Operations.
Fair Value
The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability.
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A fair value hierarchy has been established that prioritizes the inputs to valuation techniques used to measure fair value. The level of an asset or liability in the hierarchy is based on the lowest level of input that is significant to the fair value measurement. Assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:
Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities with sufficient volume and frequency of transactions.
Level 2: Valuations based on observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or model-derived valuations techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3: Valuations based on unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities and based on non-binding, broker-provided price quotes and may not have been corroborated by observable market data.
The Company engages with pricing vendors to provide fair values for a majority of its Level 1 and Level 2 investments. The vendors provide either a quoted market price in an active market or use observable inputs without applying significant adjustments in their pricing. Significant observable inputs include interest rates and yield curves observable at commonly quoted intervals, volatility and credit risks. The fair value of derivative contracts is determined using observable market inputs such as the foreign currency rates, forward rate curves, currency volatility and interest rates and considers nonperformance risk of the Company and its counterparties.
The Company’s primary financial instruments include its cash, cash equivalents, investments, restricted cash and investments, long-term investments, accounts receivable, accounts payable, long-term debt and leases, and foreign currency related derivative instruments. The estimated fair value of cash, accounts receivable, and accounts payable approximates their carrying value due to the short period of time to their maturities. The estimated fair values of lease obligations approximate their carrying value as the majority of these obligations have interest rates that adjust to market rates on a periodic basis. Refer to Note 12 - Long-Term Debt and Other Borrowings for additional information regarding the fair value of the Company’s senior notes.
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Investments
Equity Investments measured at fair value on a non-recurring basis
As of March 27, 2022, and June 27, 2021, equity investments of $121.8 million and $117.3 million, respectively, were recognized in other assets in the Condensed Consolidated Balance Sheets.
With the exception of one equity investee that became publicly traded during the nine months ended March 27, 2022, net gains resulting from the application of the measurement alternative to the Company’s equity investments were immaterial for the three and nine months ended March 27, 2022, and March 28, 2021. Refer to Note 5 - Other Income (Expense), net for additional information regarding the gain associated with an equity investee that became publicly traded in the nine months ended March 27, 2022. Additionally, following the equity investee becoming publicly traded, the Company began measuring the investment at fair market value on a recurring basis in the category corporate equities.
Debt and Equity Investments measured at fair value on a recurring basis
The following tables set forth the Company’s cash, cash equivalents, investments, restricted cash and investments, and other assets measured at fair value on a recurring basis as of March 27, 2022, and June 27, 2021:
March 27, 2022
(Reported Within)
CostUnrealized
Gain
Unrealized
(Loss)
Fair ValueCash and
Cash
Equivalents
InvestmentsRestricted
Cash &
Investments
Other
Assets
(in thousands)
Cash$1,217,415 $— $— $1,217,415 $1,216,406 $ $1,009 $ 
Time deposits2,228,391 — — 2,228,391 1,978,364  250,027  
Level 1:
Money market funds999,949   999,949 999,949    
Corporate equities