8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

January 26, 2005

LSI LOGIC CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	0-11674	94-2712976
(State or other jurisdiction of	(Commission File Number)	(IRS Employer
incorporation)		Identification No.)

1621 Barber Lane
Milpitas, California 95035
(Address of principal executive offices, including zip code)

(408) 433-8000
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EXHIBIT 99.1

Item 2.02 Results of Operations and Financial Condition

On January 26, 2005, LSI Logic Corporation (referred to here as “LSI Logic” or the “Company”) issued a news release regarding its financial results for the fiscal quarter ended December 31, 2004. A copy of the news release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated by reference herein.

Use of Non-GAAP Financial Information

LSI Logic has referenced non-GAAP financial information in the news release. LSI Logic management believes that the results of operations excluding special items presented herein for the three- and twelve-month periods ended December 31, 2004 and 2003, provides useful information to investors regarding results of operations, as it excludes charges, expenses, gains and losses that are not directly related to the ongoing business results and/or stem from purchase business combinations. These business results are used by management for evaluating historical performance in addition to being used for the Company’s forecasting and planning for future periods. Restructuring of operations, acquisition-related amortization including intangibles and non-cash deferred stock compensation and other special items are examples of charges that are not directly related to the Company’s ongoing business and/or stem from purchase business combinations. For a complete reconciliation of special items excluded from our results of operations for the three- and twelve-month periods ended December 31, 2004 and 2003, refer to the tables furnished in the news release attached as Exhibit 99.1.

Results of operations excluding special items for the period presented are provided for illustrative purposes only and should be read in conjunction with the comparable information presented in accordance with generally accepted accounting principles in the United States and the Company’s most recent annual report on Form 10-K for the twelve months ended December 31, 2003.

Item 8.01 Other Events

The Company reported revenues of $420 million in the fourth quarter of 2004, a 9 percent decrease compared to revenues of $463 million reported in the fourth quarter of 2003, and a 10 percent sequential increase compared to revenues of $380 million reported in the third quarter of 2004.

Cash and short-term investments totaled $815 million at the end of the fourth quarter of 2004. In 2004, the Company repurchased approximately $69 million in convertible notes, reducing the Company’s debt due in 2006.

Fourth quarter 2004 net loss was $197 million or 51 cents per diluted share, including a $178 million non-cash charge related to the impairment of the Company’s Gresham manufacturing facility. The fourth quarter 2004 result compares to a net income of $8 million or 2 cents per diluted share in the fourth quarter of 2003. Third quarter 2004 net loss was $282 million or 73 cents per diluted share. The foregoing net loss and net income figures were prepared in accordance with United States generally accepted accounting principles.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits.

Exhibit No.	Description
99.1	LSI Logic Corporation News Release issued January 26, 2005*
	* Furnished, not filed, except as otherwise noted in Item 8.01.

2

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

LSI LOGIC CORPORATION, a Delaware corporation
By:	/s/ David G. Pursel
	David G. Pursel
	Vice President, General Counsel and Corporate Secretary

Date: January 26, 2005

3

EXHIBIT INDEX

Exhibit No.	Description
99.1	LSI Logic Corporation News Release issued January 26, 2005*
	* Furnished, not filed, except as otherwise noted in Item 8.01.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE	JANUARY 26, 2005
Investor Relations Contact:	Media Relations Contact:
Diana Matley	Kevin Brett
408-433-4365	408-433-7150
diana@lsil.com	kbrett@lsil.com

CC05-14

LSI LOGIC REPORTS DOUBLE-DIGIT TOP-LINE GROWTH
PROVIDES Q1 BUSINESS OUTLOOK

Fourth Quarter News Release Summary

§ Revenues of $420 million; 10 percent sequential growth.

§GAAP* net loss of 51 cents per diluted share (includes previously announced non-cash charge associated with the company’s Gresham manufacturing campus, totaling $178 million).

§Net income, excluding special items**, of 4 cents per diluted share.

§Gross margin of 41 percent.

§Generated positive operating cash flow for 11^th consecutive quarter.

First Quarter Business Outlook

§Projected revenue of $400 million to $415 million.

§GAAP* net loss range of 1-4 cents per diluted share.

§Net income, excluding special items**, in the range of 1– 4 cents per diluted share.

*	Generally Accepted Accounting Principles
**	Acquisition-related amortization, restructuring and other special items.

LSI LOGIC REPORTS 10% SEQUENTIAL REVENUE GROWTH
STORAGE AND CONSUMER BUSINESSES DRIVE REVENUES

Milpitas, California – LSI Logic Corporation (NYSE: LSI) today reported fourth quarter 2004 revenues of $420 million, a sequential increase of 10 percent compared to the $380 million reported in the third quarter of 2004, and a 9 percent decrease compared to the $463 million reported in the fourth quarter of 2003.

Cash and short-term investments grew to $815 million at the end of the fourth quarter of 2004. LSI Logic generated positive operating cash flow for the 11th consecutive quarter.

Fourth quarter 2004 GAAP* net loss was $197 million or 51 cents per diluted share, including a $178 million non-cash charge associated with the company’s Gresham manufacturing facility. The fourth quarter GAAP result compares to third quarter GAAP net loss of $282 million or 73 cents per diluted share, including a $206 million non-cash charge associated with the company’s Gresham manufacturing facility. Fourth quarter 2003 GAAP net income was $8 million or 2 cents per diluted share.

Fourth quarter 2004 net income, excluding special items**, was $15 million or 4 cents per diluted share compared to a net loss, excluding special items, of $25 million or 7 cents per diluted share in the third quarter. Excluding special items, fourth quarter 2003 net income was $25 million or 6 cents per diluted share.

“In Q4, we saw sequential growth in Storage Systems, Storage Components and Consumer Products, “ said Wilfred J. Corrigan, LSI Logic chairman and chief executive officer. “The adjustment in our customers’ supply chain inventory that began in Q2 appears to be substantially over in Storage Systems, Storage Components and Consumer Products. We are anticipating a small seasonal decline in the first quarter with revenues in the range of $400 million to $415 million.

“In semiconductors, LSI Logic has technology and market share leadership positions in several high-growth sectors, including DVD recorders, Ultra320 SCSI controllers, SAS (Serial Attached SCSI), Fibre Channel, RAID adapters and our RapidChipâ Platform ASICs. Our Engenio storage systems subsidiary demonstrated strong growth in the fourth quarter and expanded its OEM base with its range of leading modular, scalable storage systems. All of these products are expected to drive company revenue growth in 2005.”

LSI Logic recorded 2004 revenues of $1.70 billion, compared to $1.69 billion in 2003.

GAAP 2004 net loss was $464 million or $1.21 per diluted share, which includes the $384 million non-cash charge associated with the Gresham manufacturing facility. The 2003 GAAP net loss was $309 million or 82 cents per diluted share.

LSI Logic reported 2004 net income, excluding special items, of $43 million or 11 cents per diluted share compared to a 2003 net loss, excluding special items, of $16 million or 4 cents per diluted share.

The company’s 2004 gross margin was 43.3 percent, a 330-basis point improvement over 2003. The company generated $91 million in cash from operations in 2004. LSI Logic reduced its convertible debt in 2004 by $69 million through open market purchases .

“In the fourth quarter, we generated revenue growth above expectations and our gross margin improved over the prior quarter,” said Bryon Look, LSI Logic chief financial officer. “We continued to improve our cost structure and align our resources to the highest value opportunities. We maintained our strong focus on cash flows, continuing to generate positive cash flow as we grew revenues. LSI Logic was profitable, excluding special items, in both our semiconductor and our storage systems segments. “

LSI Logic First Quarter Business Outlook

			Excluding Special**
	GAAP*	Special Items**	Items
Revenue	$400 million to $415 million		$400 million to $415 million
Gross Margin	41.5-43.5 percent		41.5-43.5 percent
Operating Expenses	$174 million to $179 million	Approximately $20 million	$154 million to $159 million
Net Other Income (Exp.)	$(2) to $(3) million		$(2) to $(3) million
Tax Provision	$6 million		$6 million
Net (Loss)/Income Per Share	($0.04) to ($0.01)	Approximately $0.05	$0.01 to $0.04
Diluted Share Count	388 million		394 million

Capital spending is projected to be around $20 million in the first quarter, and approximately $80 million in total for 2005.

First quarter depreciation and software amortization is expected to be approximately $22 million.

*	Generally Accepted Accounting Principles
**	Acquisition-related amortization, restructuring and other special items .

NOTE: The company’s financial guidance will be limited to the comments made on today’s public conference call and contained in the First Quarter Business Outlook section of this news release.

LSI Logic Conference Call Information
LSI Logic will hold a conference call today at 2 p.m. PST to discuss fourth quarter/2004 financial results and the first quarter business outlook. The number is 1-303-205-0033. Internet users can access the conference call by visiting http://www.lsilogic.com/investors. A replay of the call will be available today at approximately 5 p.m. PST and will be available for 48 hours. The replay access numbers are 1-800-405-2236 within the U.S. and 1-303-590-3000 for all other locations, passcode 11020471#.

Safe Harbor for Forward Looking Statements: This news release contains forward-looking statements, which include the following: projected revenues for the first quarter of 2005; the extent of the seasonal decline in the first quarter of 2005; projected GAAP net loss for the first quarter of 2005; projected net income, excluding special items, for the first quarter of 2005; the company’s expectation for revenue growth for the company in 2005; the company’s expectations of a continued heightened level of sales activity for RapidChipâ Platform ASICs in the first quarter of 2005; the completion of our customer’s supply chain inventory adjustments; continued technology and market share leadership positions in several sectors, including DVD recorders, Ultra 320 SCSI controllers, SAS (Serial Attached SCSI), Fibre Channel, RAID adapters, and RapidChipâ Platform ASICs; continued high-growth in these sectors, including DVD recorders, Ultra 320 SCSI controllers, SAS (Serial Attached SCSI), Fibre Channel, RAID adapters, and RapidChipâ Platform ASICs; continued expansion of our Engenio storage subsidiary’s growth and expansion of its OEM base; the ability of any of the company’s products to drive revenue growth in 2005; projected capital spending in the first quarter of 2005 and for the year; expected first quarter depreciation and software amortization. Forward-looking statements also include projections of gross margins, operating expenses, net other income (exp.), tax provisions, earnings/loss per share and diluted share count. These forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could cause LSI Logic’s actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to: fluctuations in the timing and volumes of customer demand especially in our DVD recorders, Ultra 320 SCSI controllers, SAS (Serial Attached SCSI), Fibre Channel, RAID adapters, and RapidChipâ Platform ASICs products; the rate of depletion of customer inventory buildup; the company’s failure to achieve revenue objectives; the company’s failure to meet financial targets; and the unavailability of appropriate levels of manufacturing capacity. For additional information, readers are referred to the documents filed by LSI Logic with the SEC, and specifically the risk factors set forth in the company’s most recent reports on Form 10-K, 10-Q and 8-K.
About LSI Logic
LSI Logic Corporation (NYSE: LSI) focuses on the design and production of high-performance semiconductors for Consumer, Communications and Storage applications that access, interconnect and store data, voice and video. LSI Logic engineers incorporate reusable, industry-standard intellectual property building blocks that serve as the heart of leading-edge systems. LSI Logic serves its global OEM, channel and distribution customers with Platform ASICs, standard-cell ASICs, standard products, host bus adapters, RAID controllers and software. In addition, the company supplies storage network solutions for the enterprise.

LSI Logic is headquartered at 1621 Barber Lane, Milpitas, CA 95035. http://www.lsilogic.com

# # #

Editor’s Notes:

1.	All LSI Logic news releases (financial, acquisitions, manufacturing, products, technology etc.) are issued exclusively by PR Newswire and are immediately thereafter posted on the company’s external website, http://www.lsilogic.com.
2.	The LSI Logic logo design is a registered trademark of LSI Logic Corporation.
3.	All other brand or product names may be trademarks or registered trademarks of their respective companies.

LSI LOGIC CORPORATION
Consolidated Condensed Statements of Operations Excluding Special Items
(In thousands, except per share amounts)
(Unaudited)

	Three Months Ended						Year Ended
	Dec. 31,			Dec. 31,			Dec. 31,			Dec. 31,
	2004			2003			2004			2003
Revenues	$	419,693		$	462,845		$	1,700,164		$	1,693,070
Cost of revenues		246,132			264,085			964,556			1,015,865
Gross profit		173,561			198,760			735,608			677,205
Research and development		94,343			102,439			421,516			432,695
Selling, general and administrative		55,123			61,942			239,962			234,156
Income from operations		24,095			34,379			74,130			10,354
Interest expense		(7,342	)		(7,587	)		(25,320	)		(30,703	)
Interest income and other, net		4,403			3,833			17,907			28,802
Income before income taxes		21,156			30,625			66,717			8,453
Provision for income taxes		6,000			6,000			24,000			24,000
Net income/(loss) excluding special items	$	15,156		$	24,625		$	42,717		$	(15,547	)
Income/(loss) per share excluding special items:
Basic	$	0.04		$	0.06		$	0.11		$	(0.04	)
Diluted	$	0.04		$	0.06		$	0.11		$	(0.04	)
Shares used in computing per share amounts:
Basic		386,267			380,166			384,070			377,781
Diluted		386,781			387,051			388,204			377,781

Statements of operations excluding special items are intended to present the Company’s operating results, excluding special items described below, for the periods presented.

During the three month period ended December 31, 2004, the special items represented amortization of acquisition related items including intangibles and non-cash deferred stock compensation, and restructuring of operations and other items, net.

During the year ended December 31, 2004, the special items represented all the items mentioned above in addition to the following items: write-downs of certain equity securities due to impairment and fees related to our subsidiary Engenio’s initial public offering, which was postponed in August of 2004 due to market conditions. These charges were offset in part by gains on certain equity securities and gains associated with the repurchase of a portion of the Company’s Convertible Subordinated Notes.

During the three month period ended December 31, 2003, the special items represented amortization of acquisition related items including intangibles and non-cash deferred stock compensation, restructuring of operations and other items, and other special items.

During the year ended December 31, 2003, the special items represented all the items mentioned above in addition to write downs on certain equity securities due to impairment.

For the three month period and year ended December 31, 2004, the statements excluding special items are prepared using the Company’s calculated tax expense of $6,000 and $24,000, respectively when excluding special items. For the three month period and year ended December 31, 2003, the statements excluding special items are prepared using the Company’s calculated tax expense of $6,000 and $24,000, respectively when excluding special items.

For the three month period ended December 31, 2004, 514 shares were considered dilutive common stock equivalents and included in the computation of diluted earning per share excluding special items. For the year ended December 31, 2004, 4,134 shares were considered dilutive common stock equivalents and included in the computation of diluted earning per share excluding special items.

For the three month period ended December 31, 2003, 6,885 shares were considered dilutive common stock equivalents and included in the computation of diluted earnings per share excluding special items. In computing the diluted loss per share excluding special items for the year ended December 31, 2003, all common stock equivalents were excluded as a result of their antidilutive effect.

A reconciliation from net income/(loss) excluding special items to the reported results is presented on the following page.

The format presented above is not intended to be in accordance with Generally Accepted Accounting Principles.

LSI LOGIC CORPORATION
Reconciliation of Net (Loss)/Income Excluding Special Items to GAAP Results
(In thousands, except per share amounts)
(Unaudited)

	Three Months Ended						Year Ended
	Dec. 31,			Dec. 31,			Dec. 31,			Dec. 31,
	2004			2003			2004			2003
Net income/(loss) excluding special items	$	15,156		$	24,625		$	42,717		$	(15,547	)
Special items:
Amortization of acquisition related items including intangibles and non-cash deferred stock compensation		(20,193	)		(20,956	)		(83,499	)		(102,373	)
Restructuring of operations and other items, net		(192,389	)		4,112			(423,444	)		(180,597	)
Other special items		—			(167	)		695			(10,030	)
Total special items		(212,582	)		(17,011	)		(506,248	)		(293,000	)
Net (loss)/income	$	(197,426	)	$	7,614		$	(463,531	)	$	(308,547	)
Basic (loss)/Income per share:
Net income/(loss) excluding special items	$	0.04		$	0.06		$	0.11		$	(0.04	)
Special items **		(0.55	)		(0.04	)		(1.32	)		(0.78	)
Net (loss)/income	$	(0.51	)	$	0.02		$	(1.21	)	$	(0.82	)
Diluted (loss)/income per share*:
Net income/(loss) excluding special items	$	0.04		$	0.06		$	0.11		$	(0.04	)
Special items **		(0.55	)		(0.04	)		(1.32	)		(0.78	)
Net (loss)/income	$	(0.51	)	$	0.02		$	(1.21	)	$	(0.82	)
Shares used in computing per share amounts:
Basic		386,267			380,166			384,070			377,781
Diluted		386,267			387,051			384,070			377,781

*

In computing diluted loss per share for the three month period ended December 31, 2004 and for the years ended December 31, 2004 and 2003, all common stock equivalents were excluded as a result of their antidilutive effect. For the three month period ended December 31, 2003, 6,885 shares were considered dilutive common stock equivalents and included in the computation of diluted earnings per share.

**

This line item includes rounding adjustments.

LSI LOGIC CORPORATION
Consolidated Condensed Statements of Operations (GAAP)
(In thousands, except per share amounts)
(Unaudited)

	Three Months Ended						Year Ended
	Dec. 31,			Dec. 31,			Dec. 31,			Dec. 31,
	2004			2003			2004			2003
Revenues	$	419,693		$	462,845		$	1,700,164		$	1,693,070
Cost of revenues		246,132			264,085			964,556			1,015,865
Gross profit		173,561			198,760			735,608			677,205
Research and development		94,343			102,439			421,516			432,695
Selling, general and administrative		55,123			61,942			243,498			234,156
Restructuring of operations and other items, net		192,389			(4,112	)		423,444			180,597
Amortization of acquisition related items including intangibles and non-cash deferred stock compensation *		20,193			20,956			83,499			102,373
(Loss)/income from operations		(188,487	)		17,535			(436,349	)		(272,616	)
Interest expense		(7,342	)		(7,587	)		(25,320	)		(30,703	)
Interest income and other, net		4,403			3,666			22,138			18,772
(Loss)/income before income taxes		(191,426	)		13,614			(439,531	)		(284,547	)
Provision for income taxes		6,000			6,000			24,000			24,000
Net (loss)/income	$	(197,426	)	$	7,614		$	(463,531	)	$	(308,547	)
(Loss)/income per share:
Basic	$	(0.51	)	$	0.02		$	(1.21	)	$	(0.82	)
Diluted **	$	(0.51	)	$	0.02		$	(1.21	)	$	(0.82	)
Shares used in computing per share amounts:
Basic		386,267			380,166			384,070			377,781
Diluted		386,267			387,051			384,070			377,781

* The amortization of acquisition related items including intangibles and non-cash deferred stock compensation for the three month period ended December 31, 2004 are comprised of the following items:

Amortization of intangibles	$	18,166
Amortization of non-cash deferred stock compensation		2,027
	$	20,193

**   In computing diluted loss per share for the three month period ended December 31, 2004 and for the years ended December 31, 2004 and 2003, all common stock equivalents were excluded as a result of their antidilutive effect. For the three month period ended December 31, 2003, 6,885 shares were considered dilutive common stock equivalents and included in the computation of diluted earnings per share.

LSI LOGIC CORPORATION
Consolidated Condensed Balance Sheets
(In millions)
(Unaudited)

	Dec. 31,			Dec. 31,
	2004			2003
Assets
Current assets:
Cash and short-term investments	$	814.6		$	813.7
Accounts receivable, net		272.1			231.2
Inventories		218.9			198.5
Prepaid expenses and other current assets		59.7			146.6
Total current assets		1,365.3			1,390.0
Property and equipment, net		311.9			481.5
Goodwill and other intangibles		1,081.6			1,129.7
Other assets		115.2			446.7
Total assets	$	2,874.0		$	3,447.9
Liabilities and Stockholders’ Equity
Current liabilities:
Other current liabilities	$	396.2		$	390.8
Current portion of long-term debt, capital lease obligations and short-term borrowings		0.1			0.4
Total current liabilities		396.3			391.2
Long-term debt and capital lease obligations		781.9			865.6
Other long-term liabilities		77.6			141.1
Total liabilities		1,255.8			1,397.9
Minority interest in consolidated subsidiaries		0.3			7.5
Stockholders’ equity:
Common stock		2,973.4			2,953.8
Deferred stock compensation		(8.9	)		(24.8	)
Accumulated deficit		(1,384.2	)		(920.7	)
Accumulated other comprehensive income		37.6			34.2
Total stockholders’ equity		1,617.9			2,042.5
Total liabilities and stockholders’ equity	$	2,874.0		$	3,447.9

LSI LOGIC CORPORATION
Statement of Cash Flows
(In thousands, except where noted)
(Unaudited)

	Three Months Ended						Year Ended
	Dec. 31,			Dec. 31,			Dec. 31,			Dec. 31,
	2004			2003			2004			2003
Operating Activities:
Net (loss)/income	$	(197,426	)	$	7,614		$	(463,531	)	$	(308,547	)
Adjustments:
Depreciation & amortization *		40,199			54,113			176,606			262,728
Amortization of non-cash deferred stock compensation		2,027			3,196			8,449			26,021
Non-cash restructuring and other items		187,000			2,424			401,058			148,252
Loss on write down of equity securities, net of gain on sales		200			(525	)		(1,913	)		8,518
Loss/(gain) on redemption/repurchase of Convertible Subordinated Notes		—			694			(1,767	)		3,885
Gain on sales of property and equipment		(467	)		(4,746	)		(6,348	)		(6,896	)
Changes in deferred tax assets and liabilities		4,657			(552	)		4,895			(646	)
Changes in assets and liabilities, net of assets acquired and liabilities assumed in business combinations:
Accounts receivable		(7,221	)		32,993			(40,076	)		18,220
Inventories		25,372			2,818			(20,660	)		(4,232	)
Prepaid expenses and other assets		25,445			176			23,377			63,325
Accounts payable		(8,852	)		3,022			21,056			1,684
Accrued and other liabilities		(44,672	)		(49,878	)		(10,329	)		(22,559	)
Net cash provided by operating activities		26,262			51,349			90,817			189,753
Investing activities:
Purchases of debt securities available-for-sale		(105,661	)		(224,162	)		(747,096	)		(2,219,484	)
Maturities and sales of debt securities available-for-sale		111,305			313,248			679,483			2,203,313
Purchases of equity securities		—			(200	)		(2,250	)		(200	)
Proceeds from sales of equity securities		—			1,060			10,518			1,060
Purchases of property and equipment		(10,982	)		(29,414	)		(52,776	)		(78,189	)
Buyout of equipment operating lease		(332,396	)		—			(332,396	)		—
Decrease in non-current assets and deposits		319,530			16,262			688,994			272,868
Increase in non-current assets and deposits		—			—			(313,013	)		(390,135	)
Proceeds from the sale of property and equipment		2,339			11,060			10,936			24,737
Acquisitions of companies, net of cash acquired		—			—			(32,025	)		—
Proceeds from the sale leaseback of equipment		—			—			—			160,000
Proceeds from the sale of the Japan manufacturing facility		—			20,977			—			25,846
Net cash (used in)/provided by investing activities		(15,865	)		108,831			(89,625	)		(184	)
Financing activities:
Redemption/repurchase of Convertible Subordinated Notes		—			(254,000	)		(68,117	)		(715,983	)
Issuance of common stock		10,124			12,543			27,988			30,306
Purchase of minority interest in subsidiary		(42	)		—			(8,020	)		—
Repayment of debt obligations		(141	)		(63	)		(438	)		(327	)
Proceeds from borrowings		—			—			—			350,000
Cash paid for call spread options		—			—			—			(28,000	)
Debt issuance costs		—			(48	)		—			(10,984	)
Net cash provided by/ (used in) financing activities		9,941			(241,568	)		(48,587	)		(374,988	)
Effect of exchange rate changes on cash and cash equivalents		(4,242	)		1,317			(3,564	)		6,254
Increase/(decrease) in cash and cash equivalents		16,096			(80,071	)		(50,959	)		(179,165	)
Cash and cash equivalents at beginning of period		202,627			349,753			269,682			448,847
Cash and cash equivalents at end of period	$	218,723		$	269,682		$	218,723		$	269,682

* Depreciation of fixed assets, amortization of intangible assets, software, capitalized intellectual property, debt issuance costs and deferred gains on cancelled interest rate swaps.

LSI LOGIC CORPORATION
Selected Financial Information (GAAP)
(In millions, except where noted)
(Unaudited)

	Three Months Ended
	Dec. 31,			Sept. 30,			Dec. 31,
	2004			2004			2003
Semiconductor revenues	$	292.5		$	283.5		$	344.0
Storage Systems revenues	$	127.2		$	96.7		$	118.8
Total revenues	$	419.7		$	380.2		$	462.8
Percentage change in revenues-qtr./qtr. ( a )		10.4	%		-15.1	%		3.0	%
Percentage change in revenues-yr./yr. ( b )		-9.3	%		-15.5	%		-4.0	%
Days sales outstanding		58			63			45
Days of inventory		80			96			68
Current ratio		3.4			3.2			3.6
Quick ratio		2.7			2.3			2.7
R&D as a percentage of revenues		22.5	%		28.4	%		22.1	%
SG&A as a percentage of revenues		13.1	%		16.7	%		13.4	%
Gross margin as a percentage of revenues		41.4	%		39.9	%		42.9	%
Employees ( c )		4,429			4,866			4,722
Revenues per employee (in thousands) ( d )	$	379.0		$	312.5		$	392.0
Diluted shares (in thousands)		386,267			384,876			387,051
Selected Cash Flow information
Purchases of property and equipment	$	33.2		$	15.5		$	29.4
Depreciation / amortization ( e )	$	19.9		$	23.0		$	34.5

(a)	Represents sequential quarter growth in revenues.
(b)	Represents growth in revenues in the quarter presented as compared to the same quarter of the previous year.
(c)	Actual number of employees at the end of each period presented.
(d)	Revenue per employee is calculated by annualizing revenue for each quarter presented and dividing it by the number of employees.
(e)	Represents depreciation of fixed assets and amortization of software.