Slide 1: December Quarter 2016 Financial Results
Lam Research Corporation December Quarter 2016 Financial Results January 25, 2017 © 2017 Lam Research Corp. | 1.25.2017 1
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This presentation and the accompanying discussion contain “forward-looking statements” under U.S. securities laws. Forward-looking statements include any statements that are not statements of historical fact. Examples of forward-looking state
Slide 3: Business Review and Industry Outlook
Business Review and Industry Outlook Martin Anstice President & Chief Executive Officer © 2017 Lam Research Corp. | 1.25.2017 3
Slide 4: December Quarter Results and CY'16 Milestones
December Quarter Results and CY’16 Milestones Continuing the trajectory of sustainable growth ► Record results for shipments, revenues, Annual Shipments ($B) profit dollars*, and earnings per share* $7 in the December quarter $6 $5 ► Fifth consecutive year of outperformance $4 — 5-year shipments CAG
Slide 5: Creating Balance Across Market Segments
Creating Balance Across Market Segments Strengthening our momentum in foundry and NAND Foundry Shipments ► Atomic Layer Etch (ALE): Doubled installed base of ALE systems for logic self-aligned contact application in the December quarter ► Foundry: Grew foundry shipments by ~40% in CY’16, compared to
Slide 6: Multi-Year Growth Opportunity Ahead
Multi-Year Growth Opportunity Ahead Accelerating demand for cloud, mobility, connected devices ► The semiconductor industry is now “more than Moore” ► Lam has the right products at the right time to help customers enable industry transformation ► Sustained opportunity for Lam outperformance, support
Slide 7: Enabling Customer Success
Enabling Customer Success Supporting time-to-market needs of our customers ► Ramped supply chain and factory capacity to deliver record factory output in December quarter; scaling for further growth ► Global customer support organization effected accelerated production ramps at multiple sites worldw
Slide 8: 2017 Industry Outlook
2017 Industry Outlook Foundry DRAM NAND & Logic Tight supply and demand Early stage of industry Spend primarily focused continues into 2017 transition to solid-state on 10 nm and 7 nm storage capacity for leading- DRAM investments edge processors focused on conversions, 3D NAND shipped wit
Slide 9: December Quarter 2016 Financial Results and March Quarter 17 Outlook
December Quarter 2016 Financial Results and March Quarter 2017 Outlook Doug Bettinger Executive Vice President & Chief Financial Officer © 2017 Lam Research Corp. | 1.25.2017 9
Slide 10: December Quarter and CY'16 Results
December Quarter and CY’16 Results Achieved multiple milestones throughout CY’16 ► Shipments, revenue, operating income dollars*, and earnings per share* at record levels for QDec’16 and CY’16 Shipments Revenue EPS* $6.7 $6.4 $7.06 $6.0 $5.9 $6.29 $ Billions $ Billions CY'15 CY'16 CY'15 CY'16 CY'15
Slide 11: December Quarter Shipments
December Quarter Shipments QDec’16 shipments of $1.923 billion ► 13% increase compared to September quarter ► System shipments segment mix: Dec’16 Sep’16 Logic/Other Logic/Other 8% 8% NVM Memory NVM Memory Foundry 31% 37% 61% Foundry 36% 56% 43% DRAM DRAM 24% 13% © 2017 Lam Research Corp. | 1.25.201
Slide 12: December Quarter Financial Results
December Quarter Financial Results Dec’16 Sep’16 Revenue $1,882M $1,632M Non-GAAP Gross Margin* 46.4% 45.2% Non-GAAP Operating Expenses* $384M $372M Non-GAAP Operating Income* $490M $366M Non-GAAP Operating Margin* 26.0% 22.4% Non-GAAP Other Income/(Expense)* ($12.2M) $0.5M Non-GAAP Tax Rate* 15% 12
Slide 13: Key Balance Sheet and Financial Metrics
Key Balance Sheet and Financial Metrics Dec’16 Sep’16 Total Consolidated Gross Cash Balance $6,089M $7,470M Account Receivables, Net $1,426M $1,290M DSO 69 Days 72 Days Inventory Turns 4.1 3.9 Deferred Revenue* $673M $704M Capital Expenditures $37M $42M Equity Compensation Expense $32M $39M Amortiza
Slide 14: March 2017 Quarter Non-GAAP Guidance
March 2017 Quarter Non-GAAP Guidance Mar’17 Guidance Shipments $2.350 billion ± $75 million Revenue $2.125 billion ± $75 million Non-GAAP Gross Margin 45.5% ± 1% Non-GAAP Operating Margin 25.5% ± 1% Non-GAAP Earnings per Share* $2.55 ± $0.10 *Based on a share count of ~180 million shares. © 2017 Lam
Slide 15: Questions & Answers
Questions & Answers © 2017 Lam Research Corp. | 1.25.2017 15
Slide 16: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP Gross Margin, Operating Expenses and Operating Income to Non-GAAP Gross Margin, Operating Expenses and Operating Income (in thousands, except percentages) (unaudited) Three Months Ended December 25, September 25, June 26, March 27, 2016 2016 2016
Slide 17: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income and U.S. GAAP number of dilutive shares to Non- GAAP number of dilutive shares (in thousands, except per share data) (unaudited) © 2017 Lam Research Corp. | 1.25.2017 17
Slide 18: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP Other Expense, Net to Non-GAAP Other Income (Expense), Net (in thousands) (unaudited) Three Months Ended December 25, September 25, 2016 2016 U.S. GAAP Other expense, net $ (55,023) $ (23,154) Pre-tax non-GAAP items: KLA-Tencor acquisition fundin
Slide 19: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP Income Tax Rate to Non-GAAP Income Tax Rate (in thousands, except percentages) (unaudited) Three Months Ended December 25, September 25, 2016 2016 U.S. GAAP income before income taxes 384,805 $ 292,793 U.S. GAAP income tax expense (benefit) 52,01
Slide 20: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP to Non-GAAP Guidance for the March 2017 quarter (unaudited) Reconciling U.S. GAAP Items Non-GAAP Shipments $2.350 Billion +/- $75 Million — $2.350 Billion +/- $75 Million Revenue $2.125 Billion +/- $75 Million — $2.125 Billion +/- $75 Million Gro
Slide 21: Appendix – Reconciliation
Appendix – Reconciliation RECONCILIATION OF DEFERRED REVENUE (in millions) (unaudited) Three Months Ended December 25, September 25, 2016 2016 Beginning Balance $ 704.3 $ 566.4 Shipments 1,922.5 1,708.5 Revenue (1,882.3) (1,632.4) Net Change in Japan (1) (63.7) 66.4 Services & Other (8.2) (4.6) Endi
Slide 22: Innovative
A Innovative Trusted Fast § \g