falsedesktopLRCX2020-09-27000070754920000173{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "Large accelerated filer\t☒\tAccelerated filer\t☐\nNon-accelerated filer\t☐\tSmaller reporting company\t☐\n\t\tEmerging growth company\t☐\n", "q10k_tbl_1": "\t\tPage No.\n\tPART I. Financial Information\t\nItem 1.\tFinancial Statements (Unaudited):\t\n\tCondensed Consolidated Statements of Operations for the three months ended September 27 2020 and September 29 2019\t3\n\tCondensed Consolidated Statements of Comprehensive Income for the three months ended September 27 2020 and September 29 2019\t4\n\tCondensed Consolidated Balance Sheets as of September 27 2020 and June 28 2020\t5\n\tCondensed Consolidated Statements of Cash Flows for the three months ended September 27 2020 and September 29 2019\t6\n\tCondensed Consolidated Statements of Stockholders' Equity for the three months ended September 27 2020 and September 29 2019\t7\n\tNotes to Condensed Consolidated Financial Statements\t8\nItem 2.\tManagement's Discussion and Analysis of Financial Condition and Results of Operations\t26\nItem 3.\tQuantitative and Qualitative Disclosures about Market Risk\t34\nItem 4.\tControls and Procedures\t35\n\tPART II. Other Information\t\nItem 1.\tLegal Proceedings\t36\nItem 1A.\tRisk Factors\t36\nItem 2.\tUnregistered Sales of Equity Securities and Use of Proceeds\t48\nItem 3.\tDefaults Upon Senior Securities\t48\nItem 4.\tMine Safety Disclosures\t48\nItem 5.\tOther Information\t48\nItem 6.\tExhibits\t49\nSignatures\t\t\t50\t\t\n", "q10k_tbl_2": "\tThree Months Ended\t\n\tSeptember 27 2020\tSeptember 29 2019\nRevenue\t3177080\t2165746\nCost of goods sold\t1670901\t1184036\nGross margin\t1506179\t981710\nResearch and development\t355367\t286827\nSelling general and administrative\t189748\t157428\nTotal operating expenses\t545115\t444255\nOperating income\t961064\t537455\nOther expense net\t(38792)\t(12728)\nIncome before income taxes\t922272\t524727\nIncome tax expense\t(98821)\t(58938)\nNet income\t823451\t465789\nNet income per share:\t\t\nBasic\t5.67\t3.22\nDiluted\t5.59\t3.09\nNumber of shares used in per share calculations:\t\t\nBasic\t145267\t144673\nDiluted\t147248\t150682\n", "q10k_tbl_3": "\tThree Months Ended\t\n\tSeptember 27 2020\tSeptember 29 2019\nNet income\t823451\t465789\nOther comprehensive income (loss) net of tax:\t\t\nForeign currency translation adjustment\t12124\t(8698)\nCash flow hedges:\t\t\nNet unrealized losses during the period\t(350)\t(691)\nNet losses reclassified into earnings\t767\t1350\n\t417\t659\nAvailable-for-sale investments:\t\t\nNet unrealized losses during the period\t(1400)\t(1000)\nNet losses reclassified into earnings\t402\t390\n\t(998)\t(610)\nDefined benefit plans net change in unrealized component\t(4)\t119\nOther comprehensive income (loss) net of tax\t11539\t(8530)\nComprehensive income\t834990\t457259\n", "q10k_tbl_4": "\tSeptember 27 2020\tJune 28 2020\n\t(unaudited)\t(1)\nASSETS\t\t\nCash and cash equivalents\t4129067\t4915172\nInvestments\t2528841\t1795080\nAccounts receivable less allowance of $5245 as of September 27 2020 and $5465 as of June 28 2020\t2317922\t2097099\nInventories\t2138050\t1900024\nPrepaid expenses and other current assets\t161003\t146160\nTotal current assets\t11274883\t10853535\nProperty and equipment net\t1133529\t1071499\nRestricted cash and investments\t253458\t253911\nGoodwill\t1484629\t1484436\nIntangible assets net\t161714\t168532\nOther assets\t748795\t727134\nTotal assets\t15057008\t14559047\nLIABILITIES AND STOCKHOLDERS' EQUITY\t\t\nTrade accounts payable\t662674\t592387\nAccrued expenses and other current liabilities\t1333568\t1272655\nDeferred profit\t576488\t457523\nCurrent portion of long-term debt and finance lease obligations\t834138\t839877\nTotal current liabilities\t3406868\t3162442\nLong-term debt and finance lease obligations less current portion\t4993495\t4970848\nIncome taxes payable\t879870\t909709\nOther long-term liabilities\t351283\t332559\nTotal liabilities\t9631516\t9375558\nCommitments and contingencies\t\t\nTemporary equity convertible notes\t6307\t10995\nStockholders' equity:\t\t\nPreferred stock at par value of $0.001 per share; authorized 5000 shares none outstanding\t0\t0\nCommon stock at par value of $0.001 per share; authorized 400000 shares as of September 27 2020 and June 28 2020; issued and outstanding 144593 shares at September 27 2020 and 145331 shares at June 28 2020\t145\t145\nAdditional paid-in capital\t6761545\t6695858\nTreasury stock at cost; 146791 shares at September 27 2020 and 145432 shares at June 28 2020\t(13416986)\t(12949889)\nAccumulated other comprehensive loss\t(82672)\t(94211)\nRetained earnings\t12157153\t11520591\nTotal stockholders' equity\t5419185\t5172494\nTotal liabilities and stockholders' equity\t15057008\t14559047\n", "q10k_tbl_5": "\tThree Months Ended\t\n\tSeptember 27 2020\tSeptember 29 2019\nCASH FLOWS FROM OPERATING ACTIVITIES:\t\t\nNet income\t823451\t465789\nAdjustments to reconcile net income to net cash provided by operating activities:\t\t\nDepreciation and amortization\t72912\t64664\nDeferred income taxes\t(1850)\t(2992)\nEquity-based compensation expense\t55988\t42905\nAmortization of note discounts and issuance costs\t1422\t1675\nOther net\t2917\t4026\nChanges in operating assets and liabilities\t(312329)\t(112020)\nNet cash provided by operating activities\t642511\t464047\nCASH FLOWS FROM INVESTING ACTIVITIES:\t\t\nCapital expenditures and intangible assets\t(62806)\t(39256)\nPurchases of available-for-sale securities\t(1750188)\t(147632)\nMaturities of available-for-sales securities\t597252\t600347\nSales of available-for-sale securities\t415862\t337763\nOther net\t(1786)\t(540)\nNet cash (used for) provided by investing activities\t(801666)\t750682\nCASH FLOWS FROM FINANCING ACTIVITIES:\t\t\nPrincipal payments on debt\t(19173)\t(28965)\nTreasury stock purchases\t(448581)\t(78132)\nDividends paid\t(167129)\t(158868)\nProceeds from issuance of common stock\t5538\t3869\nOther net\t(2140)\t0\nNet cash used for financing activities\t(631485)\t(262096)\nEffect of exchange rate changes on cash cash equivalents and restricted cash\t4082\t(4193)\nNet (decrease) increase in cash cash equivalents and restricted cash\t(786558)\t948440\nCash cash equivalents and restricted cash at beginning of period\t5169083\t3913396\nCash cash equivalents and restricted cash at end of period\t4382525\t4861836\nSchedule of non-cash transactions:\t\t\nAccrued payables for stock repurchases\t18599\t13\nAccrued payables for capital expenditures\t37733\t30333\nDividends payable\t188046\t166721\nTransfers of inventory to property and equipment net\t29019\t13997\nReconciliation of cash cash equivalents and restricted cash\tSeptember 27 2020\tSeptember 29 2019\nCash and cash equivalents\t4129067\t4607182\nRestricted cash and investments\t253458\t254654\nTotal cash cash equivalents and restricted cash\t4382525\t4861836\n", "q10k_tbl_6": "\tThree Months Ended\t\t\t\t\t\t\n\tSeptember 27 2020\t\t\t\t\t\t\n\tCommon Stock Shares\tCommon Stock\tAdditional Paid-in Capital\tTreasury Stock\tAccumulated Other Comprehensive Loss\tRetained Earnings\tTotal\nBalance at June 28 2020\t145331\t145\t6695858\t(12949889)\t(94211)\t11520591\t5172494\nSale of common stock\t105\t0\t5538\t0\t0\t0\t5538\nPurchase of treasury stock\t(1360)\t(1)\t0\t(467097)\t0\t0\t(467098)\nEquity-based compensation expense\t0\t0\t55988\t0\t0\t0\t55988\nEffect of conversion of convertible notes\t517\t1\t(527)\t0\t0\t0\t(526)\nReclassification from temporary to permanent equity\t0\t0\t4688\t0\t0\t0\t4688\nAdoption of ASU 2018-18\t0\t0\t0\t0\t0\t1157\t1157\nNet income\t0\t0\t0\t0\t0\t823451\t823451\nOther comprehensive income\t0\t0\t0\t0\t11539\t0\t11539\nCash dividends declared ($1.30 per common share)\t0\t0\t0\t0\t0\t(188046)\t(188046)\nBalance at September 27 2020\t144593\t145\t6761545\t(13416986)\t(82672)\t12157153\t5419185\n\tThree Months Ended\t\t\t\t\t\t\n\tSeptember 29 2019\t\t\t\t\t\t\n\tCommon Stock Shares\tCommon Stock\tAdditional Paid-in Capital\tTreasury Stock\tAccumulated Other Comprehensive Loss\tRetained Earnings\tTotal\nBalance at June 30 2019\t144433\t144\t6409405\t(11602573)\t(64030)\t9930919\t4673865\nSale of common stock\t111\t0\t3869\t0\t0\t0\t3869\nPurchase of treasury stock\t(397)\t0\t0\t(78116)\t0\t0\t(78116)\nEquity-based compensation expense\t0\t0\t42905\t0\t0\t0\t42905\nEffect of conversion of convertible notes\t724\t1\t(6573)\t0\t0\t0\t(6572)\nReclassification from temporary to permanent equity\t0\t0\t6886\t0\t0\t0\t6886\nAdoption of ASU 2016-02\t0\t0\t0\t0\t0\t3018\t3018\nNet income\t0\t0\t0\t0\t0\t465789\t465789\nOther comprehensive loss\t0\t0\t0\t0\t(8530)\t0\t(8530)\nCash dividends declared ($1.15 per common share)\t0\t0\t0\t0\t0\t(166721)\t(166721)\nBalance at September 29 2019\t144871\t145\t6456492\t(11680689)\t(72560)\t10233005\t4936393\n", "q10k_tbl_7": "\tLess than 1 Year\t1-3 Years\t\tMore than 3 Years\tTotal\n\t(In thousands)\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nDeferred revenue\t581580\t98520\t(1)\t0\t680100\n", "q10k_tbl_8": "\tThree Months Ended\t\n\tSeptember 27 2020\tSeptember 29 2019\n\t(In thousands)\t\nSystem revenue\t2148241\t1365228\nCustomer support-related revenue and other\t1028839\t800518\n\t3177080\t2165746\n", "q10k_tbl_9": "\tThree Months Ended\t\n\tSeptember 27 2020\tSeptember 29 2019\n\t(In thousands)\t\nChina\t1174669\t591668\nKorea\t756257\t451483\nTaiwan\t446091\t391492\nJapan\t392526\t273673\nSoutheast Asia\t203339\t213755\nUnited States\t137892\t183659\nEurope\t66306\t60016\n\t3177080\t2165746\n", "q10k_tbl_10": "\tThree Months Ended\t\n\tSeptember 27 2020\tSeptember 29 2019\nMemory\t58%\t64%\nFoundry\t36%\t25%\nLogic/integrated device manufacturing\t6%\t11%\n", "q10k_tbl_11": "\tThree Months Ended\t\n\tSeptember 27 2020\tSeptember 29 2019\n\t(in thousands)\t\nEquity-based compensation expense\t55988\t42905\nIncome tax benefit recognized related to equity-based compensation expense\t9877\t9818\n", "q10k_tbl_12": "\tThree Months Ended\t\n\tSeptember 27 2020\tSeptember 29 2019\n\t(in thousands)\t\nInterest income\t6959\t31784\nInterest expense\t(52115)\t(43995)\nGains (losses) on deferred compensation plan-related assets net\t12927\t(436)\nForeign exchange losses net\t(1375)\t(529)\nOther net\t(5188)\t448\n\t(38792)\t(12728)\n", "q10k_tbl_13": "\tThree Months Ended\t\n\tSeptember 27 2020\tSeptember 29 2019\n\t(in thousands except per share data)\t\nNumerator:\t\t\nNet income\t823451\t465789\nDenominator:\t\t\nBasic average shares outstanding\t145267\t144673\nEffect of potential dilutive securities:\t\t\nEmployee stock plans\t1112\t1190\nConvertible notes\t869\t4819\nDiluted average shares outstanding\t147248\t150682\nNet income per share - basic\t5.67\t3.22\nNet income per share - diluted\t5.59\t3.09\n", "q10k_tbl_14": "\tSeptember 27 2020\t\t\t\t\t\t\t\n\t\t\t\t\t(Reported Within)\t\t\t\n\tCost\tUnrealized Gain\tUnrealized (Loss)\tFair Value\tCash and Cash Equivalents\tInvestments\tRestricted Cash & Investments\tOther Assets\n\t(in thousands)\t\t\t\t\t\t\t\nCash\t756609\t0\t0\t756609\t753178\t0\t3431\t0\nTime deposits\t1614040\t0\t0\t1614040\t1364013\t0\t250027\t0\nLevel 1:\t\t\t\t\t\t\t\t\nMoney market funds\t1753879\t0\t0\t1753879\t1753879\t0\t0\t0\nU.S. Treasury and agencies\t770184\t264\t(1)\t770447\t93453\t676994\t0\t0\nMutual funds\t67183\t8886\t(583)\t75486\t0\t0\t0\t75486\nLevel 1 Total\t2591246\t9150\t(584)\t2599812\t1847332\t676994\t0\t75486\nLevel 2:\t\t\t\t\t\t\t\t\nGovernment-sponsored enterprises\t3498\t14\t0\t3512\t0\t3512\t0\t0\nForeign government bonds\t60139\t34\t(12)\t60161\t3340\t56821\t0\t0\nCorporate notes and bonds\t1919478\t4472\t(392)\t1923558\t161204\t1762354\t0\t0\nMortgage backed securities - residential\t7754\t67\t(15)\t7806\t0\t7806\t0\t0\nMortgage backed securities - commercial\t21257\t97\t0\t21354\t0\t21354\t0\t0\nLevel 2 Total\t2012126\t4684\t(419)\t2016391\t164544\t1851847\t0\t0\nTotal\t6974021\t13834\t(1003)\t6986852\t4129067\t2528841\t253458\t75486\n", "q10k_tbl_15": "\tJune 28 2020\t\t\t\t\t\t\t\n\t\t\t\t\t(Reported Within)\t\t\t\n\tCost\tUnrealized Gain\tUnrealized (Loss)\tFair Value\tCash and Cash Equivalents\tInvestments\tRestricted Cash & Investments\tOther Assets\n\t(in thousands)\t\t\t\t\t\t\t\nCash\t977862\t0\t0\t977862\t973978\t0\t3884\t0\nTime deposits\t2244655\t0\t0\t2244655\t1994628\t0\t250027\t0\nLevel 1:\t\t\t\t\t\t\t\t\nMoney market funds\t1709350\t0\t0\t1709350\t1709350\t0\t0\t0\nU.S. Treasury and agencies\t552088\t373\t(9)\t552452\t76992\t475460\t0\t0\nMutual funds\t68784\t4571\t(928)\t72427\t0\t0\t0\t72427\nLevel 1 Total\t2330222\t4944\t(937)\t2334229\t1786342\t475460\t0\t72427\nLevel 2:\t\t\t\t\t\t\t\t\nGovernment-sponsored enterprises\t31442\t12\t0\t31454\t25999\t5455\t0\t0\nForeign government bonds\t10693\t28\t(5)\t10716\t2540\t8176\t0\t0\nCorporate notes and bonds\t1405615\t5344\t(302)\t1410657\t131685\t1278972\t0\t0\nMortgage backed securities - residential\t3142\t71\t0\t3213\t0\t3213\t0\t0\nMortgage backed securities - commercial\t23660\t144\t0\t23804\t0\t23804\t0\t0\nLevel 2 Total\t1474552\t5599\t(307)\t1479844\t160224\t1319620\t0\t0\nTotal\t7027291\t10543\t(1244)\t7036590\t4915172\t1795080\t253911\t72427\n", "q10k_tbl_16": "\tSeptember 27 2020\t\t\t\t\t\t\n\tUnrealized Losses Less than 12 Months\t\t\tUnrealized Losses 12 Months or Greater\t\t\tTotal\n\tFair Value\tGross Unrealized Loss\tFair Value\tGross Unrealized Loss\tFair Value\tGross Unrealized Loss\n\t(in thousands)\t\t\t\t\t\t\nU.S. Treasury and agencies\t74231\t(1)\t0\t0\t74231\t(1)\nMutual funds\t0\t0\t7953\t(583)\t7953\t(583)\nForeign government bonds\t46218\t(12)\t0\t0\t46218\t(12)\nCorporate notes and bonds\t478124\t(392)\t0\t0\t478124\t(392)\nMortgage backed securities - residential\t4912\t(15)\t0\t0\t4912\t(15)\n\t603485\t(420)\t7953\t(583)\t611438\t(1003)\n", "q10k_tbl_17": "\tCost\tEstimated Fair Value\n\t(in thousands)\t\t\t\t\t\t\t\nDue in one year or less\t5325959\t5327267\nDue after one year through five years\t783076\t786135\nDue in more than five years\t41194\t41355\n\t6150229\t6154757\n", "q10k_tbl_18": "\tNotional Value\t\t\t\n\tDerivatives Designated as Hedging Instruments:\t\t\tDerivatives Not Designated as Hedging Instruments:\n\t(in thousands)\t\t\t\n\tBuy Contracts\tSell Contracts\tBuy Contracts\tSell Contracts\nJapanese yen\t0\t370658\t0\t9495\nEuro\t101899\t0\t32707\t0\nKorean won\t84339\t0\t0\t51523\nMalaysian ringgit\t43120\t0\t14484\t0\nIndian rupee\t39170\t0\t3616\t0\nTaiwan dollar\t0\t0\t51855\t0\nChinese renminbi\t0\t0\t40996\t0\nSwiss franc\t0\t0\t22124\t0\nSingapore dollar\t0\t0\t14598\t0\nBritish pound sterling\t0\t0\t9564\t0\n\t268528\t370658\t189944\t61018\n", "q10k_tbl_19": "\tSeptember 27 2020\t\t\t\t\t\t\tJune 28 2020\t\n\tFair Value of Derivative Instruments (Level 2)\t\t\t\t\t\t\tFair Value of Derivative Instruments (Level 2)\t\n\tDerivative Assets\t\t\tDerivative Liabilities\t\t\tDerivative Assets\t\tDerivative Liabilities\n\tBalance Sheet Location\tFair Value\tBalance Sheet Location\tFair Value\tBalance Sheet Location\tFair Value\tBalance Sheet Location\tFair Value\n\t(in thousands)\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nDerivatives designated as hedging instruments:\t\t\t\t\t\t\t\t\t\nForeign exchange contracts\tPrepaid expense and other assets\t3700\tAccrued expenses and other current liabilities\t3509\tPrepaid expense and other assets\t1862\tAccrued expenses and other current liabilities\t1405\nDerivatives not designated as hedging instruments:\t\t\t\t\t\t\t\t\t\nForeign exchange contracts\tPrepaid expense and other assets\t169\tAccrued expenses and other current liabilities\t85\tPrepaid expense and other assets\t155\tAccrued expenses and other current liabilities\t70\nTotal Derivatives\t\t3869\t\t3594\t\t2017\t\t1475\n", "q10k_tbl_20": "\t\tThree Months Ended\t\t\n\t\t\tSeptember 27 2020\t\t\t\t\n\tLocation of Gain or (Loss) Recognized in or Reclassified into Income\t(Loss) Gain Recognized in AOCI\t\t(Loss) Gain Reclassified from AOCI into Income\nDerivatives in Cash Flow Hedging Relationships\t\t\t(in thousands)\t\t\t\t\nForeign Exchange Contracts\tRevenue\t(3281)\t\t(835)\nForeign Exchange Contracts\tCost of goods sold\t1093\t\t560\nForeign Exchange Contracts\tSelling general and administrative\t1640\t\t305\nForeign Exchange Contracts\tResearch and Development\t394\t\t0\nInterest Rate Contracts\tOther expense net\t0\t\t(952)\n\t\t(154)\t\t(922)\n", "q10k_tbl_21": "\t\tThree Months Ended\t\t\n\t\t\tSeptember 29 2019\t\t\t\t\n\tLocation of Gain or (Loss) Recognized in or Reclassified into Income\tGain (Loss) Recognized in AOCI\t\tLoss Reclassified from AOCI into Income\nDerivatives in Cash Flow Hedging Relationships\t\t\t(in thousands)\t\t\t\t\nForeign Exchange Contracts\tRevenue\t934\t\t(334)\nForeign Exchange Contracts\tCost of goods sold\t(1263)\t\t(810)\nForeign Exchange Contracts\tSelling general and administrative\t(595)\t\t(476)\nInterest Rate Contracts\tOther expense net\t0\t\t(35)\n\t\t(924)\t\t(1655)\n", "q10k_tbl_22": "\t\tThree Months Ended\t\n\t\tSeptember 27 2020\tSeptember 29 2019\nDerivatives Not Designated as Hedging Instruments:\tLocation of Gain (Loss) Recognized in Income\tGain Recognized in Income\tLoss Recognized in Income\n\t\t(in thousands)\t\nForeign Exchange Contracts\tOther expense net\t2747\t(5501)\n", "q10k_tbl_23": "\tThree Months Ended\t\t\t\n\tSeptember 27 2020\t\t\t\n\tRevenue\tCost of Goods Sold\tSelling General and Admini-strative\tOther Expense Net\n\t(in thousands)\t\t\t\nTotal amounts of income and expense line items presented in the statement of financial performance in which the effects of cash flow hedges are recorded:\t\t\t\t\t\t\t\n\t3177080\t1670901\t189748\t(38792)\n(Loss) or gain on cash flow hedging relationships in Subtopic 815-20:\t\t\t\t\nForeign exchange contracts:\t\t\t\t\nAmount of (loss) gain reclassified from accumulated other comprehensive income into income\t(835)\t560\t305\t0\nInterest rate contracts:\t\t\t\t\nAmount of loss reclassified from accumulated other comprehensive income into income\t0\t0\t0\t(952)\n", "q10k_tbl_24": "\tSeptember 27 2020\tJune 28 2020\n\t(in thousands)\t\t\t\t\t\t\t\nRaw materials\t1284302\t1161961\nWork-in-process\t269023\t251199\nFinished goods\t584725\t486864\n\t2138050\t1900024\n", "q10k_tbl_25": "\tSeptember 27 2020\t\t\t\t\tJune 28 2020\n\tGross\tAccumulated Amortization\tNet\tGross\tAccumulated Amortization\tNet\n\t(in thousands)\t\t\t\t\t\t\t\t\t\t\t\nCustomer relationships\t630171\t(544753)\t85418\t630137\t(532550)\t97587\nExisting technology\t669068\t(655826)\t13242\t668992\t(654382)\t14610\nPatents and other intangible assets\t108326\t(45272)\t63054\t98342\t(42007)\t56335\nTotal intangible assets\t1407565\t(1245851)\t161714\t1397471\t(1228939)\t168532\n", "q10k_tbl_26": "Fiscal Year\tAmount\n\t(in thousands)\n2021 (remaining 9 months)\t50270\n2022\t62918\n2023\t17275\n2024\t9269\n2025\t4577\nThereafter\t697\n\t145006\n", "q10k_tbl_27": "\tSeptember 27 2020\tJune 28 2020\n\t(in thousands)\t\t\t\t\t\t\t\nAccrued compensation\t445625\t402401\nWarranty reserves\t125237\t117839\nIncome and other taxes payable\t170409\t215652\nDividend payable\t188046\t167129\nOther\t404251\t369634\n\t1333568\t1272655\n", "q10k_tbl_28": "\tSeptember 27 2020\t\t\t\t\tJune 28 2020\n\tAmount (in thousands)\t\tEffective Interest Rate\tAmount (in thousands)\t\tEffective Interest Rate\nFixed-rate 2.80% Senior Notes Due June 15 2021 (\"2021 Notes\")\t800000\t\t2.95%\t800000\t\t2.95%\nFixed-rate 3.80% Senior Notes Due March 15 2025 (\"2025 Notes\")\t500000\t\t3.87%\t500000\t\t3.87%\nFixed-rate 3.75% Senior Notes Due March 15 2026 (\"2026 Notes\")\t750000\t\t3.86%\t750000\t\t3.86%\nFixed-rate 4.00% Senior Notes Due March 15 2029 (\"2029 Notes\")\t1000000\t\t4.09%\t1000000\t\t4.09%\nFixed-rate 1.90% Senior Note Due June 15 2030 (\"2030 Notes\")\t750000\t\t2.01%\t750000\t\t2.01%\nFixed-rate 2.625% Convertible Notes Due May 15 2041 (\"2041 Notes\")\t30361\t(1)\t4.28%\t48460\t(1)\t4.28%\nFixed-rate 4.875% Senior Notes Due March 15 2049 (\"2049 Notes\")\t750000\t\t4.93%\t750000\t\t4.93%\nFixed-rate 2.875% Senior Note Due June 15 2050 (\"2050 Notes\")\t750000\t\t2.93%\t750000\t\t2.93%\nFixed-rate 3.125% Senior Note Due June 15 2060 (\"2060 Notes\")\t500000\t\t3.18%\t500000\t\t3.18%\nTotal debt outstanding at par\t5830361\t\t\t5848460\t\t\nUnamortized discount\t(47451)\t\t\t(53086)\t\t\nFair value adjustment - interest rate contracts\t7959\t(2)\t\t8405\t(2)\t\nUnamortized bond issuance costs\t(8085)\t\t\t(8301)\t\t\nTotal debt outstanding at carrying value\t5782784\t\t\t5795478\t\t\nReported as:\t\t\t\t\t\t\nCurrent portion of long-term debt\t823051\t\t\t836107\t\t\nLong-term debt\t4959733\t\t\t4959371\t\t\nTotal debt outstanding at carrying value\t5782784\t\t\t5795478\t\t\n", "q10k_tbl_29": "\tSeptember 27 2020\tJune 28 2020\n\t2041 Notes\t2041 Notes\n\t(in thousands except years percentages conversion rate and conversion price)\t\t\t\t\t\t\t\nCarrying amount of permanent equity component net of tax\t161531\t161467\nCarrying amount of temporary equity component net of tax\t6307\t10995\nRemaining amortization period (years)\t20.6\t20.9\nFair Value of Notes (Level 2)\t315182\t\nConversion rate (shares of common stock per $1000 principal amount of notes)\t31.5206\t\nConversion price (per share of common stock)\t31.73\t\nIf-converted value in excess of par value\t285706\t\nEstimated share dilution using average quarterly stock price $344.03 per share\t869\t\n", "q10k_tbl_30": "\tRemaining Amortization period\tFair Value of Notes (Level 2)\n\t(years)\t(in thousands)\n2021 Notes\t0.7\t811752\n2025 Notes\t4.5\t562955\n2026 Notes\t5.5\t860393\n2029 Notes\t8.5\t1197500\n2030 Notes\t9.7\t775058\n2049 Notes\t28.5\t1065315\n2050 Notes\t29.7\t782858\n2060 Notes\t39.7\t545435\n", "q10k_tbl_31": "\tThree Months Ended\t\n\tSeptember 27 2020\tSeptember 29 2019\n\t(in thousands)\t\nContractual interest coupon\t49571\t41122\nAmortization of interest discount\t1012\t1235\nAmortization of issuance costs\t411\t414\nEffect of interest rate contracts net\t506\t675\nTotal interest cost recognized\t51500\t43446\n", "q10k_tbl_32": "\tThree Months Ended\t\n\tSeptember 27 2020\tSeptember 29 2019\n\t(in thousands)\t\nBalance at beginning of period\t129197\t127932\nWarranties issued during the period\t46044\t30480\nSettlements made during the period\t(36131)\t(35068)\nChanges in liability for pre-existing warranties\t(2250)\t(8874)\nBalance at end of period\t136860\t114470\n", "q10k_tbl_33": "Period\tTotal Number of Shares Repurchased\tTotal Cost of Repurchase\tAverage Price Paid Per Share\tAmount Available Under Repurchase Program\n\t(in thousands except per share data)\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nAvailable balance as of June 28 2020\t\t\t\t1773427\nQuarter ended September 27 2020\t1344\t461998\t343.73\t1311429\n", "q10k_tbl_34": "\tAccumulated Foreign Currency Translation Adjustment\tAccumulated Unrealized Gain or Loss on Cash flow hedges\t\tAccumulated Unrealized Holding Gain or Loss on Available-For-Sale Investments\t\tAccumulated Unrealized Components of Defined Benefit Plans\tTotal\n\t(in thousands)\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nBalance at June 28 2020\t(45811)\t(32796)\t\t4923\t\t(20527)\t(94211)\nOther comprehensive income (loss) before reclassifications\t12124\t(350)\t\t(1400)\t\t(4)\t10370\nLosses reclassified from accumulated other comprehensive loss to net income\t0\t767\t(1)\t402\t(2)\t0\t1169\nNet current-period other comprehensive income (loss)\t12124\t417\t\t(998)\t\t(4)\t11539\nBalance at September 27 2020\t(33687)\t(32379)\t\t3925\t\t(20531)\t(82672)\n", "q10k_tbl_35": "\tThree Months Ended\t\t\n\tSeptember 27 2020\tJune 28 2020\tSeptember 29 2019\n\t(in thousands except per share data and percentages)\t\t\nRevenue\t3177080\t2791864\t2165746\nGross margin\t1506179\t1280332\t981710\nGross margin as a percent of total revenue\t47.4%\t45.9%\t45.3%\nTotal operating expenses\t545115\t524610\t444255\nNet income\t823451\t696673\t465789\nDiluted net income per share\t5.59\t4.73\t3.09\n", "q10k_tbl_36": "\tThree Months Ended\t\t\n\tSeptember 27 2020\tJune 28 2020\tSeptember 29 2019\nRevenue (in millions)\t3177\t2792\t2166\nChina\t37%\t34%\t27%\nKorea\t24%\t32%\t21%\nTaiwan\t14%\t11%\t18%\nJapan\t12%\t8%\t13%\nSoutheast Asia\t7%\t5%\t10%\nUnited States\t4%\t7%\t8%\nEurope\t2%\t3%\t3%\n", "q10k_tbl_37": "\tThree Months Ended\t\t\n\tSeptember 27 2020\tJune 28 2020\tSeptember 29 2019\n\t(In thousands)\t\t\nSystem revenue\t2148241\t1865249\t1365228\nCustomer support-related revenue and other\t1028839\t926615\t800518\n\t3177080\t2791864\t2165746\n", "q10k_tbl_38": "\tThree Months Ended\t\t\n\tSeptember 27 2020\tJune 28 2020\tSeptember 29 2019\nMemory\t58%\t61%\t64%\nFoundry\t36%\t29%\t25%\nLogic/integrated device manufacturing\t6%\t10%\t11%\n", "q10k_tbl_39": "\tThree Months Ended\t\t\n\tSeptember 27 2020\tJune 28 2020\tSeptember 29 2019\n\t(in thousands except percentages)\t\t\nGross margin\t1506179\t1280332\t981710\nPercent of revenue\t47.4%\t45.9%\t45.3%\n", "q10k_tbl_40": "\tThree Months Ended\t\t\n\tSeptember 27 2020\tJune 28 2020\tSeptember 29 2019\n\t(in thousands except percentages)\t\t\nResearch & development (\"R&D\")\t355367\t338810\t286827\nPercent of revenue\t11.2%\t12.1%\t13.2%\n", "q10k_tbl_41": "\tThree Months Ended\t\t\n\tSeptember 27 2020\tJune 28 2020\tSeptember 29 2019\n\t(in thousands except percentages)\t\t\nSelling general and administrative (\"SG&A\")\t189748\t185800\t157428\nPercent of revenue\t6.0%\t6.7%\t7.3%\n", "q10k_tbl_42": "\tThree Months Ended\t\t\n\tSeptember 27 2020\tJune 28 2020\tSeptember 29 2019\n\t(in thousands)\t\t\nInterest income\t6959\t9339\t31784\nInterest expense\t(52115)\t(49250)\t(43995)\nGains (losses) on deferred compensation plan-related assets net\t12927\t26134\t(436)\nForeign exchange losses net\t(1375)\t(981)\t(529)\nOther net\t(5188)\t7205\t448\n\t(38792)\t(7553)\t(12728)\n", "q10k_tbl_43": "\tThree Months Ended\t\t\n\tSeptember 27 2020\tJune 28 2020\tSeptember 29 2019\n\t(in thousands except percentages)\t\t\nIncome tax expense\t98821\t51496\t58938\nEffective tax rate\t10.7%\t6.9%\t11.2%\n", "q10k_tbl_44": "Net income\t823451\nNon-cash charges:\t\nDepreciation and amortization\t72912\nEquity-based compensation expense\t55988\nDeferred income taxes\t(1850)\nAmortization of note discounts and issuance costs\t1422\nChanges in operating asset and liability accounts\t(312329)\nOther\t2917\n\t642511\n", "q10k_tbl_45": "\tValuation of Securities Given an Interest Rate Decrease of X Basis Points\t\t\t\t\tFair Value as of September 27 2020\tValuation of Securities Given an Interest Rate Increase of X Basis Points\n\t(150 BPS)\t(100 BPS)\t(50 BPS)\t0.00%\t50 BPS\t100 BPS\t150 BPS\n\t(in thousands)\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nU.S. Treasury and agencies\t770789\t770789\t770789\t770447\t768933\t767419\t765905\nGovernment-sponsored enterprises\t3528\t3528\t3528\t3512\t3471\t3430\t3389\nForeign government bonds\t60342\t60341\t60339\t60161\t59894\t59628\t59362\nCorporate notes and bonds\t1929676\t1929620\t1928863\t1923558\t1916751\t1909941\t1903129\nMortgage backed securities - residential\t7924\t7890\t7855\t7806\t7757\t7707\t7657\nMortgage backed securities - commercial\t21465\t21435\t21398\t21354\t21311\t21267\t21224\nTotal\t2793724\t2793603\t2792772\t2786838\t2778117\t2769392\t2760666\n", "q10k_tbl_46": "\tTotal Number of Shares Repurchased (1)\tAverage Price Paid Per Share\tTotal Number of Shares Purchased as Part of Publicly Announced Plans or Programs\tAmount Available Under Repurchase Program\n\t(in thousands except per share data)\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nAvailable balance as of June 28 2020\t\t\t\t1773427\nJune 29 2020 - July 26 2020\t4\t339.86\t0\t1773427\nJuly 27 2020 - August 23 2020\t487\t372.37\t483\t1593430\nAugust 24 2020 - September 27 2020\t868\t327.63\t861\t1311429\nQuarter ended September 27 2020\t1359\t343.71\t1344\t1311429\n", "q10k_tbl_47": "Exhibit Number\tDescription\n10.1*\tEmployment Agreement with Patrick J. Lord dated September 8 2020 which is incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on September 8 2020 (SEC File No. 000-12933).\n31.1\tRule 13a-14(a)/15d-14(a) Certification (Principal Executive Officer)\n31.2\tRule 13a-14(a)/15d-14(a) Certification (Principal Financial Officer)\n32.1\tSection 1350 Certification (Principal Executive Officer)\n32.2\tSection 1350 Certification (Principal Financial Officer)\n101.INS\tInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.\n101.SCH\tInline XBRL Taxonomy Extension Schema Document\n101.CAL\tInline XBRL Taxonomy Extension Calculation Linkbase Document\n101.DEF\tInline XBRL Taxonomy Extension Definition Linkbase Document\n101.LAB\tInline XBRL Taxonomy Extension Label Linkbase Document\n101.PRE\tInline XBRL Taxonomy Extension Presentation Linkbase Document\n104\tCover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)\n\t*Indicates management contract or compensatory plan or arrangement.\n"}{"bs": "q10k_tbl_4", "is": "q10k_tbl_2", "cf": "q10k_tbl_5"}None
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 October 23, 2020, the Registrant had 144,009,220 shares of Common Stock outstanding.
Accounts receivable, less allowance of $5,245 as of September 27, 2020, and $5,465 as of June 28, 2020
2,317,922
2,097,099
Inventories
2,138,050
1,900,024
Prepaid expenses and other current assets
161,003
146,160
Total current assets
11,274,883
10,853,535
Property and equipment, net
1,133,529
1,071,499
Restricted cash and investments
253,458
253,911
Goodwill
1,484,629
1,484,436
Intangible assets, net
161,714
168,532
Other assets
748,795
727,134
Total assets
$
15,057,008
$
14,559,047
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable
$
662,674
$
592,387
Accrued expenses and other current liabilities
1,333,568
1,272,655
Deferred profit
576,488
457,523
Current portion of long-term debt and finance lease obligations
834,138
839,877
Total current liabilities
3,406,868
3,162,442
Long-term debt and finance lease obligations, less current portion
4,993,495
4,970,848
Income taxes payable
879,870
909,709
Other long-term liabilities
351,283
332,559
Total liabilities
9,631,516
9,375,558
Commitments and contingencies
Temporary equity, convertible notes
6,307
10,995
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 September 27, 2020 and June 28, 2020; issued and outstanding, 144,593 shares at September 27, 2020, and 145,331 shares at June 28, 2020
145
145
Additional paid-in capital
6,761,545
6,695,858
Treasury stock, at cost; 146,791 shares at September 27, 2020, and 145,432 shares at June 28, 2020
(13,416,986)
(12,949,889)
Accumulated other comprehensive loss
(82,672)
(94,211)
Retained earnings
12,157,153
11,520,591
Total stockholders’ equity
5,419,185
5,172,494
Total liabilities and stockholders’ equity
$
15,057,008
$
14,559,047
(1) Derived from audited financial statements
See Notes to Condensed Consolidated Financial Statements
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 27, 2020
(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 28, 2020, which are included in the Company’s Annual Report on Form 10-K as of and for the year ended June 28, 2020 (the “2020 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 27, 2021 and includes 52 weeks. The quarters ended September 27, 2020 (the “September 2020 quarter”) and September 29, 2019 (the “September 2019 quarter”) included 13 weeks.
NOTE 2 — RECENT ACCOUNTING PRONOUNCEMENTS
Recently Adopted
In June 2016, the Financial Accounting Standards Board (“FASB”) released Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses.” The amendment revises the impairment model to utilize an expected loss methodology in place of the previously used incurred loss methodology, which will result in more timely recognition of losses on financial instruments, including but not limited to, available for sale debt securities and accounts receivable. The FASB issued a subsequent amendment to the initial guidance in April 2019 and November 2019 within ASU 2019-04 and ASU 2019-11, respectively. The adoption of these standards in the first quarter of fiscal year 2021 did not have a material impact on the Company’s Condensed Consolidated Financial Statements.
In November 2018, the FASB issued ASU 2018-18, “Collaborative Arrangements (Topic 808).” The amendment clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under Topic 606 when the counterparty is a customer for a good or service that is a distinct unit of account. The amendment also precludes entities from presenting consideration from transactions with a collaborator that is not a customer together with revenue recognized from contracts with customers. The adoption of this standard in the first quarter of fiscal year 2021 did not have a material impact on the Company’s Condensed Consolidated Financial Statements.
Updates Not Yet Adopted or Effective
In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. ASU 2020-04 is currently effective and upon adoption may be applied prospectively to contract modifications made on or before December 31, 2022. The Company is currently assessing contracts that will require modification due to reference rate reform to which this ASU may be applied.
In August 2020, the FASB issued ASU No. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Among other changes, ASU 2020-06 removes from U.S. GAAP the liability and equity separation model for convertible instruments with a cash conversion feature, and as a result, after adoption, entities will no longer separately present in equity an embedded conversion feature for such debt. ASU 2020-06 also enhances transparency and improves disclosures for convertible instruments and earnings per share guidance. The
provisions of ASU 2020-06 are applicable for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company is required to adopt this standard in the first quarter of fiscal year 2023. The update permits the use of either the modified retrospective or fully retrospective method of transition. The Company does not expect adoption of this standard to have a material impact on its Consolidated Financial Statements related to the Company’s existing 2041 Notes (as defined in Note 12 - Long-Term Debt and Other Borrowings ).
NOTE 3 — REVENUE
Deferred Revenue
Revenue of $274.3 million included in deferred revenue at June 28, 2020 was recognized during the three months ended September 27, 2020.
The following table summarizes the transaction price for contracts that have not yet been recognized as revenue as of September 27, 2020 and when the Company expects to recognize the amounts as revenue:
Less than 1 Year
1-3 Years
More than 3 Years
Total
(In thousands)
Deferred revenue
$
581,580
$
98,520
(1)
$
—
$
680,100
(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 Ended
September 27, 2020
September 29, 2019
(In thousands)
System revenue
$
2,148,241
$
1,365,228
Customer support-related revenue and other
1,028,839
800,518
$
3,177,080
$
2,165,746
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.
The following table presents the Company’s revenues disaggregated by geographic region:
Three Months Ended
September 27, 2020
September 29, 2019
(In thousands)
China
$
1,174,669
$
591,668
Korea
756,257
451,483
Taiwan
446,091
391,492
Japan
392,526
273,673
Southeast Asia
203,339
213,755
United States
137,892
183,659
Europe
66,306
60,016
$
3,177,080
$
2,165,746
The following table presents the percentages of leading- and non-leading-edge equipment and upgrade revenue to each of the primary markets the Company serves:
Three Months Ended
September 27, 2020
September 29, 2019
Memory
58
%
64
%
Foundry
36
%
25
%
Logic/integrated device manufacturing
6
%
11
%
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 Ended
September 27, 2020
September 29, 2019
(in thousands)
Equity-based compensation expense
$
55,988
$
42,905
Income tax benefit recognized related to equity-based compensation expense
The significant components of other expense, net, are as follows:
Three Months Ended
September 27, 2020
September 29, 2019
(in thousands)
Interest income
$
6,959
$
31,784
Interest expense
(52,115)
(43,995)
Gains (losses) on deferred compensation plan-related assets, net
12,927
(436)
Foreign exchange losses, net
(1,375)
(529)
Other, net
(5,188)
448
$
(38,792)
$
(12,728)
NOTE 6 — INCOME TAX EXPENSE
The Company recorded an income tax expense of $98.8 million and $58.9 million for the three months ended September 27, 2020 and September 29, 2019, respectively, which yielded an effective tax rate of approximately 10.7% and 11.2%, respectively.
The difference between the U.S. federal statutory tax rate of 21% and the Company’s effective tax rate for the three months ended September 27, 2020 and September 29, 2019 was primarily due to income in lower tax jurisdictions.
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 September 27, 2020, 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 limitations. The change in uncertain tax positions as a result of lapses of statutes of limitations may range up to $8.4 million.
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, convertible notes, and warrants. Refer to Note 12 - Long-term Debt and Other Borrowings for additional information regarding the Company’s convertible notes. The following table reconciles the numerators and denominators of the basic and diluted computations for net income per share.