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)

October 24, 2007

LSI CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	1-10317	94-2712976
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer 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

Item 2.02 Results of Operation and Financial Condition	3
Item 9.01 Financial Statements and Exhibits	5
SIGNATURES	6
EXHIBIT INDEX	7
EXHIBIT 99.1

2

Item 2.02 Results of Operation and Financial Condition.

On October 24, 2007, LSI Corporation issued a news release regarding its financial results for the quarter ended September 30, 2007. A copy of the news release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated by reference herein.

The news release contains non-GAAP financial information. Management believes that the presentation of non-GAAP net income, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP taxes and non-GAAP net income per basic and diluted share provides important supplemental information to management and investors about financial and business trends relating to the Company’s financial condition and results of operations. Management believes that the use of these non-GAAP financial measures provides consistency and comparability with our past financial reports.

Management has historically used these non-GAAP measures when evaluating operating performance because we believe that the inclusion or exclusion of the items described below provides an additional measure of our core operating results and facilitates comparisons of our core operating performance against prior periods and our business model objectives. We have chosen to provide this information to investors to enable them to perform additional analyses of past, present and future operating performance and as a supplemental means to evaluate our ongoing core operations. Externally, we believe that these non-GAAP measures continue to be useful to investors in their assessment of our operating performance and their valuation of the company.

Internally, these non-GAAP measures are significant measures used by management for purposes of:

• evaluating the core operating performance of the company;

• determination of bonuses for certain key employees;

• establishing internal budgets;

• calculating return on investment for development programs and growth initiatives;

• comparing performance with internal forecasts and targeted business models;

• strategic planning;

• evaluating and valuing potential acquisition candidates and how their operations compare to the company’s operations; and

• benchmarking performance externally against our competitors.

Non-GAAP financial measures:

     Non-GAAP net income, non-GAAP gross margin, non-GAAP operating expenses and non-GAAP taxes are important to the Company for the reasons noted above and exclude the following items:

• Stock-based compensation. Stock-based compensation relates primarily to LSI stock awards such as stock options and restricted stock units. Stock-based compensation is a non-cash expense that varies in amount from period to period and is dependent on market forces that are difficult to predict. As a result of this unpredictability, management excludes this item from its internal operating forecasts and models. Management believes that non-GAAP measures adjusted for stock-based compensation provide investors with a basis to measure the company’s core performance against the performance of other companies without the variability created by stock-based compensation.

• Amortization of acquisition related intangibles and in-process research and development. These charges are acquisition-related charges. Amortization of acquisition-related intangibles relates to purchased technology in acquisitions such as existing technology, patents and trademarks. In-process research and development relates to projects in process as of the acquisition date that have not reached technological feasibility and are immediately expensed. These charges are not factored into management’s evaluation of potential acquisitions, or our performance after completion of acquisitions, because they are not related to our core operating performance, and the frequency and amount of such charges vary significantly based on the size and timing of our acquisitions and the maturities of the businesses being acquired. Excluding this data provides investors with a basis to compare the company against the performance of other companies without this variability.

3

• Restructuring of operations and other items, net. This represents charges/losses and gains that are not directly related to the company’s ongoing or core business results. Management regularly excludes such items from internal operating forecasts and models because they are not considered a core operating activity for the company and because the frequency and variability in the nature of the charges can vary significantly from period to period. Excluding this data provides investors with a basis to compare our company against the performance of other companies without this variability.

• Other charges and gains. Other charges and gains consist of gains or losses on equity investments and certain non-operating gains and losses that occur on an infrequent basis and vary greatly in amount. We do not regularly trade public equity securities nor do we typically use these securities to fund of ongoing operations. Management excludes these items because they do not affect our core operations. Excluding this data provides investors with a basis to compare our company against the performance of other companies without this variability.

• Non-GAAP income tax expense/benefit. This item represents the additional amount of tax expense or benefit that the company would accrue if it used non-GAAP results instead of GAAP results in the calculation of its tax liability.

Non-GAAP net income per basic and diluted share:

The numerator used in the calculation of non-GAAP net income per basic and diluted share is non-GAAP net income computed as described above. In the denominator, the Company uses the GAAP basic and dilutive shares.

Some of the limitations of relying on non-GAAP financial measures include:

• Stock-based compensation. LSI’s stock-based incentive plans are important components of our employee incentive compensation arrangements and are reflected in our GAAP results under Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment. Stock-based compensation should be considered for a complete view of the costs of our compensation arrangements.

• Amortization of acquisition-related intangibles and in-process research and development. Acquisitions have been an important part of our business strategy and the corresponding acquisition-related charges reflect the costs of choosing acquisitions as a form of growth strategy.

• Restructuring of operations and other items, net. This item reflects charges for severance, exit costs associated with leased facilities, asset impairment charges and gains on sales of assets that are no longer strategic. While no longer strategic to the future of the company, such items reflect the costs of decisions made as part of running a business and are critical to a complete view of our historical results.

• Other charges and gains. These amounts should be included for a complete view of our historical performance even though they are not related to our core operations.

• Non-GAAP income tax expense/benefit. This item represents the additional amount of tax expense or benefit that the company would accrue if it used non-GAAP results instead of GAAP results in the calculation of its tax liability. The limitation in it is that it does not include the effect of all the items excluded from the non-GAAP financial statements.

All supplemental non-GAAP financial measures should be read in conjunction with the comparable information presented in accordance with generally accepted accounting principles in the United States of America.

4

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	News Release issued October 24, 2007.*

* Furnished, not filed.

5

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 CORPORATION
By:	/s/ Bryon Look
	Bryon Look
	Executive Vice President and Chief Financial Officer

Date: October 24, 2007

6

EXHIBIT INDEX

Exhibit No.	Description
99.1	News Release issued October 24, 2007.*

* Furnished, not filed.

7

EX-99.1

Exhibit 99.1

`
FOR IMMEDIATE RELEASE	OCTOBER 24, 2007
Investor Relations Contact:	Media Relations Contact:
Sujal Shah	Robert Guenther
610-712-5471	610-712-1514
sujal.shah@lsi.com	robert.guenther@lsi.com

LSI REPORTS THIRD QUARTER 2007 RESULTS

Third Quarter 2007 Revenues Exceed Guidance

Third Quarter News Release Summary

§ Third quarter 2007 revenues of $727 million

§ Third quarter 2007 GAAP* net loss of 20 cents per diluted share

§ Third quarter 2007 non-GAAP** net income of 6 cents per diluted share

§ Cash and short-term investments of $1.1 billion

Fourth Quarter 2007 Business Outlook

§ Projected revenues of $700 million to $730 million [1]

§ GAAP* net income in the range of minus 9 to plus 3 cents per diluted share

§ Non-GAAP** net income in the range of 5 to 9 cents per diluted share

[1] On October 24, 2007, LSI announced that it had completed the sale of its mobility business. Revenue guidance for the fourth quarter includes revenue from that business only through the date of sale.

* Generally Accepted Accounting Principles.

** Excludes stock-based compensation, amortization of acquisition-related intangibles, restructuring of operations and other items, net, purchase accounting effect on inventory, loss on write-down of equity securities and acquired in-process research and development. It also excludes the income tax effect associated with the above mentioned items.

BROAD-BASED END CUSTOMER DEMAND FUELS STRONG
SEQUENTIAL GROWTH

MILPITAS, Calif., October 24, 2007 – LSI Corporation (NYSE: LSI) today reported third quarter 2007 revenues of $727 million, compared to $493 million in the third quarter of 2006 and $670 million in the second quarter of 2007.

Third quarter 2007 GAAP* net loss was $141 million or 20 cents per diluted share, compared to third quarter 2006 GAAP net income of $44 million or 11 cents per diluted share. Third quarter 2007 GAAP results compare to second quarter 2007 GAAP net loss of $378 million or 50 cents per diluted share. Third quarter 2007 GAAP net loss included a net charge of $184.7 million from special items, including $101.2 million of restructuring costs relating primarily to the sale of our mobility business, $70.6M in the amortization of acquisition-related items and $21.8 million of stock-based compensation expense.

Third quarter 2007 non-GAAP** net income was $44 million or 6 cents per diluted share, compared to third quarter 2006 non-GAAP net income of $65 million or 16 cents per diluted share. Second quarter 2007 non-GAAP net loss was $14 million or 2 cents per diluted share.

Cash and short-term investments totaled approximately $1.1 billion at quarter end. LSI also announced today that to date it has purchased approximately 67.3 million shares of its common stock for approximately $549 million under two repurchase authorizations totaling $1 billion.

“Our solid quarterly results were driven by strong end customer demand in our storage and networking businesses and by achieving substantial cost reductions during our second full quarter of combined operations with Agere,” said Abhi Talwalkar, LSI president and chief executive officer. “Since the beginning of the third quarter, we have made significant progress on completing the first phase of our three-phase business acceleration plan, including completing the sale of our consumer products business to Magnum Semiconductor, our mobility products business to Infineon Technologies and our Thai final assembly and test operations to STATS ChipPAC.

“As a more focused company, we are now experiencing a significantly higher level of engagement with our customers and substantial increases in design win opportunities,” added Talwalkar. “We are also continuing to execute our strategy to invest for long-term revenue growth in our core areas of storage and networking, acquiring Tarari, Inc., a recognized leader in deep packet inspection technology that enables advanced security and network control for service provider and enterprise networks. Through these initial actions and our strong focus, we are poised to achieve our long-term growth and profitability objectives.”

Bryon Look, LSI chief financial officer, said, “We experienced healthy demand in both our semiconductor and storage systems segments, with double-digit sequential revenue growth in storage and networking semiconductors. Our continuing focus on driving organizational efficiencies and maintaining tight controls contributed to significantly lower operating expenses and improved margins.”

LSI Fourth Quarter 2007 Business Outlook

	GAAP*		Special Items	Non-GAAP**
Revenue	$700 million to $730 million			$700 million to $730 million
Gross Margin		36 – 41%	$30 to $50 million		43 – 45%
Operating Expenses	$270 million to $300 million		$25 to $45 million	$245 million to $255 million
Net Other Income	$2 million			$2 million
Tax	Approximately $12 million			Approximately 25%
Net (Loss)/Income Per Share	($0.09) to $0.03		($0.06) to ($0.14)	$0.05 to $0.09
Diluted Share Count	700 million			705 million

Capital spending is projected to be around $20 million in the fourth quarter and approximately $60 million in total for 2007.

Fourth quarter depreciation and software amortization is expected to be approximately $20 million.

LSI Conference Call Information

LSI will hold a conference call today at 2 pm PDT to discuss third quarter financial results and the fourth quarter 2007 business outlook. Internet users can access the conference call at http://www.lsi.com/webcast. Subsequent to the conference call, a replay will be available at the same web address or may be accessed by calling 1-866-410-5843 within the U.S. and 1-203-369-0645 for all other locations.

Forward Looking Statements: This news release contains forward-looking statements that are based on the current opinions and estimates of management. These statements 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’s actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to: the challenges and costs of integrating and restructuring our operations and achieving anticipated synergies following our recent acquisition of Agere Systems; our ability to successfully and timely transition our assembly and test operations to third parties; fluctuations in the timing and volumes of customer demand; our reliance on major customers and suppliers; our ability to compete successfully in competitive markets; our ability to keep up with rapid technological change; the unavailability of appropriate levels of manufacturing capacity; and general industry and market conditions. For additional information, see the documents filed by LSI with the SEC, and specifically the risk factors set forth in the company’s most recent reports on Form 10-K and 10-Q.

LSI disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

About LSI

LSI Corporation (NYSE: LSI) is a leading provider of innovative silicon, systems and software technologies that enable products which seamlessly bring people, information and digital content together. The company offers a broad portfolio of capabilities and services including custom and standard product ICs, adapters, systems and software that are trusted by the world’s best known brands to power leading solutions in the Storage and Networking markets. More information is available at www.lsi.com.

# # #

Editor’s Notes:

1.	All LSI 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.lsi.com.
2.	The LSI logo design is a trademark of LSI Corporation.
3.	All other brand or product names may be trademarks or registered trademarks of their respective companies.

Exhibit 99.1

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

	Three Months Ended									Nine Months Ended
	September 30,			July 1,			October 1,			September 30,			October 1,
	2007			2007			2006			2007			2006
Revenues	$	727,415		$	669,939		$	492,978		$	1,862,769		$	1,458,497
Cost of revenues		411,866			395,607			276,725			1,071,143			824,565
Purchase accounting effect on inventory		—			47,904			—			47,904			—
Amortization of acquisition related intangibles		64,860			71,310			6,436			141,455			28,453
Stock-based compensation expense		2,824			3,148			1,719			7,916			5,702
Total cost of revenues		479,550			517,969			284,880			1,268,418			858,720
Gross profit		247,865			151,970			208,098			594,351			599,777
Research and development		173,375			192,955			98,625			465,460			292,096
Stock-based compensation expense		8,916			8,978			3,908			22,611			13,073
Total research and development		182,291			201,933			102,533			488,071			305,169
Selling, general and administrative		88,769			97,440			54,878			243,296			176,411
Amortization of acquisition related intangibles		5,714			6,676			—			12,390			—
Stock-based compensation expense		10,035			10,687			5,398			25,245			17,379
Total selling, general and administrative		104,518			114,803			60,276			280,931			193,790
Restructuring of operations and other items, net		101,231			25,920			2,614			119,071			(13,384	)
Acquired in-process research and development		—			176,400			—			182,900			—
(Loss)/income from operations		(140,175	)		(367,086	)		42,675			(476,622	)		114,202
Interest expense		(9,033	)		(9,049	)		(6,556	)		(21,972	)		(19,314	)
Interest income and other, net		11,808			10,790			13,066			33,129			32,912
(Loss)/income before income taxes		(137,400	)		(365,345	)		49,185			(465,465	)		127,800
Provision for income taxes		3,200			12,500			5,575			23,156			17,175
Net (loss)/income	$	(140,600	)	$	(377,845	)	$	43,610		$	(488,621	)	$	110,625
(Loss)/income per share:
Basic	$	(0.20	)	$	(0.50	)	$	0.11		$	(0.78	)	$	0.28
Diluted	$	(0.20	)	$	(0.50	)	$	0.11		$	(0.78	)	$	0.27
Shares used in computing per share amounts:
Basic		715,733			751,114			399,613			623,692			397,408
Diluted		715,733			751,114			403,715			623,692			403,779

A reconciliation between net (loss)/income on a GAAP basis to a non-GAAP net (loss)/income is included below.

Reconciliation of GAAP to Non-GAAP net (loss)/income:

	Three Months Ended									Nine Months Ended
	September 30,			July 1,			October 1,			September 30,			October 1,
	2007			2007			2006			2007			2006
GAAP net (loss)/income	$	(140,600	)	$	(377,845	)	$	43,610		$	(488,621	)	$	110,625
Special items:
a) Stock-based compensation expense — Cost of revenues		2,824			3,148			1,719			7,916			5,702
b) Stock-based compensation expense — R&D		8,916			8,978			3,908			22,611			13,073
c) Stock-based compensation expense — SG&A		10,035			10,687			5,398			25,245			17,379
d) Amortization of acquisition related intangibles — Cost of revenues		64,860			71,310			6,436			141,455			28,453
e) Amortization of acquisition related intangibles — SG&A		5,714			6,676			—			12,390			—
f) Purchase accounting effect on inventory		—			47,904			—			47,904			—
g) Restructuring of operations and other items, net		101,231			25,920			2,614			119,071			(13,384	)
h) Acquired in-process research and development		—			176,400			—			182,900			—
i) Loss/(gain) on sale/write-down of certain equity securities					2,396			(787	)		2,396			(2,216	)
j) Income tax effect		(8,916	)		10,264			1,738			979			1,421
Total special items		184,664			363,683			21,026			562,867			50,428
Non-GAAP net income/(loss)	$	44,064		$	(14,162	)	$	64,636		$	74,246		$	161,053
Non-GAAP income/(loss) per share:
Basic	$	0.06		$	(0.02	)	$	0.16		$	0.12		$	0.41
Diluted*	$	0.06		$	(0.02	)	$	0.16		$	0.12		$	0.40
Shares used in computing Non-GAAP per share amounts:
Basic		715,733			751,114			399,613			623,692			397,408
Diluted		720,317			751,114			431,713			632,563			406,791

* In computing non-GAAP diluted earnings per share for the three month period ended October 1, 2006, net income was increased by $3,500 for interest, net of taxes, on the $350 million convertible notes considered dilutive common stock equivalents.

Reconciliation of shares used in the calculation of GAAP to

Non-GAAP diluted net (loss)/income per share:

	Three Months Ended						Nine Months Ended
	September 30,		July 1,		October 1,		September 30,		October 1,
	2007		2007		2006		2007		2006
Diluted shares used in per-share calculation — GAAP		715,733		751,114		403,715		623,692		403,779
Dilutive stock awards		4,584		—		1,918		8,871		3,012
Effect of $350 million convertible notes considered dilutive		—		—		26,080		—		—
Diluted shares used in per-share calculation — Non-GAAP		720,317		751,114		431,713		632,563		406,791

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

	September 30,			July 1,			December 31,
	2007			2007			2006
Assets
Current assets:
Cash and short-term investments	$	1,097.9		$	1,158.3		$	1,008.9
Accounts receivable, net		436.0			424.4			348.6
Inventories		218.4			285.0			209.5
Prepaid expenses and other current assets		708.2			252.4			68.7
Total current assets		2,460.5			2,120.1			1,635.7
Property and equipment, net		236.5			246.1			86.0
Goodwill and other intangibles		3,701.4			4,231.8			991.8
Other assets		226.0			227.1			138.6
Total assets	$	6,624.4		$	6,825.1		$	2,852.1
Liabilities and Stockholders’ Equity
Current liabilities:
Other current liabilities	$	746.9		$	699.4		$	526.8
Current portion of long-term debt		—			—			—
Total current liabilities		746.9			699.4			526.8
Long-term debt		718.7			719.5			350.0
Pension, tax and other liabilities		520.4			519.7			79.4
Total liabilities		1,986.0			1,938.6			956.2
Minority interest in subsidiary		0.2			0.2			0.2
Stockholders’ equity:
Common stock and additional paid-in capital		6,335.0			6,453.6			3,106.2
Accumulated deficit		(1,716.5	)		(1,575.9	)		(1,220.3	)
Accumulated other comprehensive income		19.7			8.6			9.8
Total stockholders’ equity		4,638.2			4,886.3			1,895.7
Total liabilities and stockholders’ equity	$	6,624.4		$	6,825.1		$	2,852.1

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

	Three Months Ended									Nine Months Ended
	September 30,			July 1,			October 1,			September 30,			October 1,
	2007			2007			2006			2007			2006
Operating Activities:
Net (loss)/income	$	(140,600	)	$	(377,845	)	$	43,610		$	(488,621	)	$	110,625
Adjustments:
Depreciation & amortization *		96,545			101,599			17,527			216,720			65,693
Stock-based compensation expense		21,775			22,813			11,025			55,772			36,154
Non-cash restructuring and other items		88,155			(29	)		173			88,354			(2,576	)
Acquired in-process research and development		—			176,400			—			182,900			—
Gain on sale of intellectual property		—			—			—			—			(15,000	)
Gain on sale of Gresham manufacturing facility and associated intellectual property		—			—			—			—			(12,553	)
Write-off of intangible assets acquired in a purchase business combination		—			—			—			—			3,325
Non-cash foreign exchange loss/(gain)		7,109			(4,277	)		(941	)		3,221			(472	)
Loss/(gain) on sale/write-down of equity securities		—			2,396			(787	)		2,396			(1,998	)
(Gain)/loss on sale of property and equipment		(11	)		160			(240	)		(9,513	)		(245	)
Changes in deferred tax assets and liabilities		(1,327	)		(5,501	)		4			(6,797	)		24
Changes in assets and liabilities, net of assets acquired and liabilities assumed in business combinations:
Accounts receivable		(6,167	)		104,715			(9,460	)		143,998			3,063
Inventories		49,906			64,896			(10,148	)		95,148			7,158
Prepaid expenses and other assets		1,197			9,299			(7,403	)		35,061			(13,380	)
Accounts payable		(3,567	)		(94,585	)		(9,904	)		(134,621	)		(1,161	)
Accrued and other liabilities		(14,202	)		29,840			13,303			658			17,104
Net cash provided by operating activities		98,813			29,881			46,759			184,676			195,761
Investing activities:
Purchases of debt securities available-for-sale		(31,851	)		(61,606	)		(116,196	)		(154,087	)		(498,408	)
Proceeds from maturities and sales of debt securities available-for-sale		118,897			199,740			96,494			493,029			302,407
Purchases of convertible notes/equity securities		(7,500	)		(3,000	)		(3,000	)		(10,500	)		(8,150	)
Proceeds from sale of equity securities		—			—			2,511			—			6,092
Purchases of property, equipment and software		(36,272	)		(20,211	)		(15,587	)		(76,986	)		(44,244	)
Proceeds from sale of property and equipment		5			1,274			49			13,790			89
Proceeds from sale of Consumer		22,555			—			—			22,555			—
Proceeds from sale of intellectual property		—			—			7,670			—			22,670
Proceeds from sale of Fort Collins facility		—			—			—			—			10,998
Proceeds from sale of Colorado Springs facility		—			—			—			—			7,029
Proceeds from sale of Gresham manufacturing facility		—			—			15,000			—			96,426
Proceeds from sale of Gresham manufacturing facility associated intellectual property		—			—			—			—			5,100
Acquisitions of companies, net of cash acquired		—			517,712			—			465,633			—
Adjustment to goodwill acquired in a prior year for resolution of a pre-acquisition income tax contingency		—			—			1,373			2,442			1,373
Net cash provided by/(used in) investing activities		65,834			633,909			(11,686	)		755,876			(98,618	)
Financing activities:
Issuance of common stock		7,077			16,246			3,868			28,994			36,005
Purchase of common stock under repurchase program		(148,758	)		(400,355	)		—			(549,113	)		—
Net cash (used in)/provided by financing activities		(141,681	)		(384,109	)		3,868			(520,119	)		36,005
Effect of exchange rate changes on cash and cash equivalents		1,497			268			15			1,700			613
Increase in cash and cash equivalents		24,463			279,949			38,956			422,133			133,761
Cash and cash equivalents at beginning of period		725,470			445,521			359,454			327,800			264,649
Cash and cash equivalents at end of period	$	749,933		$	725,470		$	398,410		$	749,933		$	398,410

* Depreciation of fixed assets, amortization of intangible assets, software, capitalized intellectual property and debt issuance costs.

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

	Three Months Ended
	September 30,			July 1,			October 1,
	2007			2007			2006
Semiconductor revenues	$	530.0		$	484.8		$	313.3
Storage Systems revenues	$	197.4		$	185.1		$	179.7
Total revenues	$	727.4		$	669.9		$	493.0
Percentage change in revenues-qtr./qtr. ( a )		8.6	%		43.9	%		0.7	%
Percentage change in revenues-yr./yr. ( b )		47.6	%		36.8	%		2.3	%
Days sales outstanding		54			57			58
Days of inventory		41			50			59
Current ratio		3.3			3.0			2.5
Quick ratio		2.1			2.3			2.1
Gross margin as a percentage of revenues		34.1	%		22.7	%		42.2	%
R&D as a percentage of revenues		25.1	%		30.1	%		20.8	%
SG&A as a percentage of revenues		14.4	%		17.1	%		12.2	%
Employees ( c )		8,302			9,138			3,884
Revenues per employee (in thousands) ( d )	$	350.5		$	293.3		$	507.7
Selected Cash Flow information
Purchases of property and equipment ( e )	$	13.4		$	8.6		$	6.0
Depreciation / amortization ( f )	$	24.6		$	21.0		$	10.5

( 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 )	Revenues per employee is calculated by annualizing revenues for each quarter presented and dividing it by the number of employees.
( e )	Excludes purchases of software.
( f )	Represents depreciation of fixed assets and amortization of software.