Acquisitions (Tables)

The table below details the consideration transferred to acquire Novellus:


	Conversion		Estimated
(in thousands, except per share amounts)	Calculation		Fair Value
Lam common stock issued at merger		82,689
Per share price of Lam common stock as of June 4, 2012	$	35.99	$	2,975,977

Estimated fair value of vested Lam equivalent restricted stock ⁽¹⁾			$	9,599
Estimated fair value of vested Lam equivalent stock options ⁽²⁾				41,412

Estimated purchase price consideration			$	3,026,988

(1)	The fair value of Lam Research equivalent restricted stock as of the acquisition date was estimated based upon the per share price of Lam Research common stock as of June 4, 2012, and giving effect to the exchange ratio of 1.125.

(2)	The fair value of the Lam Research equivalent stock options as of the acquisition date was estimated using the Black-Scholes valuation model. Assumptions used are the same as those for acquired awards as disclosed in Note 11 of Notes to Consolidated Financial Statements.

The following table summarizes the assets acquired and liabilities assumed as of the acquisition date:


	June 4, 2012
	(in thousands)
Cash and investments	$	1,059,859
Accounts receivable		241,924
Inventory		309,213
Other current assets		55,502
Property and equipment		289,126
Intangible assets		1,219,100
Goodwill		1,283,111
Other long-term assets		36,494

Total assets acquired		4,494,329
Accounts payable		(83,028	)
Accrued expenses and other current liabilities		(199,262	)
Deferred revenue		(20,388	)
Debt		(509,805	)
Other long-term liabilities		(326,732	)
Convertible notes - equity component		(328,126	)

Net assets acquired	$	3,026,988

The following table is a summary of the fair value estimates of the identifiable intangible assets and their useful lives:


	Useful Life	Estimated Fair Value June 4, 2012
	(in thousands, except years)
Existing technology	7	$	580,000
Customer relationships	6-10		580,000
In-process research and design	Indefinite		30,000
Patents	6		10,000
Backlog	1		10,000
Additional development rights	Indefinite		9,100

Total		$	1,219,100

The amounts of revenue and net income (loss) of Novellus included in the Company’s consolidated Statement of Operations from the acquisition date to June 24, 2012 are as follows:


	(in thousands)
Revenue	$	25,843
Net income (loss)	$	(29,187	)

The unaudited pro-forma results presented below include the effects of the Novellus acquisition as if it had been consummated as of June 28, 2010. The pro forma results below include adjustments related to conforming revenue accounting policies, depreciation and amortization to reflect the fair value of acquired property, plant and equipment and identifiable intangible assets, and the associated income tax impacts. The pro forma results for the years ended June 24, 2012 include $122 million of costs related to inventory fair value adjustments on products sold, share-based compensation associated with accelerated vesting and acquisition-related costs, which are not expected to occur in future quarters. The pro forma information does not necessarily reflect the actual results of operations had the acquisition been consummated at the beginning of the fiscal reporting period indicated nor is it indicative of future operating results. The pro forma information does not include any adjustment for (i) potential revenue enhancements, cost synergies or other operating efficiencies that could result from the acquisition or (ii) transaction or integration costs relating to the acquisition.


	Year Ended
	June 24, 2012		June 26, 2011
	(in thousands, except per share amounts)
Pro forma revenue	$	3,804,252	$	4,743,797
Pro forma net income	$	152,981	$	894,864
Pro forma basic earnings per share	$	0.76	$	4.34
Pro forma diluted earnings per share	$	0.74	$	4.18