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)
July 23, 2008

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))

Item 2.02 Results of Operation and Financial Condition.

On July 23, 2008, LSI Corporation issued a news release regarding its financial results for the quarter ended June 29, 2008. 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 (loss), non-GAAP gross margin, non-GAAP operating expenses, non-GAAP taxes, and non-GAAP net income (loss) 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;

• 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.

The news release also presents information about our revenues for the second quarter of 2007, excluding revenues from the Mobility business that we sold in late October 2007 and the Consumer business that we sold in late July 2007. We believe that the presentation of revenues computed on this basis may be useful to investors as it enables them to compare the revenue performance of the businesses that we currently operate.

How we calculate our non-GAAP financial measures

Non-GAAP net income (loss), non-GAAP gross margin, non-GAAP operating expenses, non-GAAP taxes and non-GAAP net income (loss) per basic and diluted share 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.

• Purchase accounting effect on inventory. This is an acquisition-related charge. It results from marking to fair value an acquired company’s inventory at the time of acquisition. This charge is not factored into management’s evaluation of potential acquisitions or our performance after completion of acquisitions, because it is not related to our core operating performance, and the frequency and amount of this type of charge vary significantly based on the size and timing of our acquisitions. Excluding this data provides investors with a basis to compare the company against the performance of other companies without this variability.

2

• Amortization of acquisition-related intangibles and acquired in-process research and development. These 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 these types of 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.

• 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 the company against the performance of other companies without this variability.

• Goodwill impairment charge. This item reflects the write down of goodwill to its fair value. Because of the infrequent nature of this type of charge, management does not include this item in internal operating forecasts and models. Excluding this data provides investors with a basis to compare the company’s core operating results in different periods 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 our ongoing operations. Management excludes these items because they do not affect our core operations. Excluding this data provides investors with a basis to compare the 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.

We use non-GAAP net income computed as described above as the numerator in the calculation of non-GAAP net income per basic and diluted share. We calculate the basic and diluted share amounts used in the denominator in accordance with GAAP rules, using non-GAAP net income rather than GAAP net income.

Limitations of relying on non-GAAP financial measures

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.

• Purchase accounting effect on inventory. 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.

• Amortization of acquisition-related intangibles and acquired 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.

3

• 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.

• Goodwill impairment charge. This amount should be included for a complete view of our historical performance including the impact of declines of the value of our assets.

• 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.

• Revenues excluding revenues from businesses sold. Revenues from businesses sold should be included in revenues for a complete view of our historical performance even though we no longer own those businesses.

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 July 23, 2008.*

* 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: July 23, 2008

6

EXHIBIT INDEX

Exhibit No.	Description
99.1	News Release issued July 23, 2008.*

* Furnished, not filed.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE	JULY 23, 2008
Investor Relations Contact:	Media Relations Contact:
Sujal Shah	Mitch Seigle
610-712-5471	408-954-3225
sujal.shah@lsi.com	mitch.seigle@lsi.com
cc08-46

LSI REPORTS SECOND QUARTER 2008 RESULTS

Second Quarter 2008 Revenues Exceed Guidance

MILPITAS, Calif., July 23, 2008 — LSI Corporation (NYSE: LSI) today reported results for its second quarter ended June 29, 2008.

Second Quarter News Release Summary

n Second quarter 2008 revenues of $692 million, exceeding guidance

n Second quarter 2008 GAAP* net loss of 2 cents per share

n Second quarter 2008 non-GAAP** net income of 13 cents per diluted share, exceeding guidance

n Second quarter operating cash flows of $27 million

n Cash and short-term investments of $1.1 billion

Third Quarter 2008 Business Outlook

n Projected revenues of $695 million to $725 million

n GAAP* net (loss)/income in the range of ($0.03) to $0.04 per share

n Non-GAAP** net income in the range of 11 to 15 cents per diluted share

*	Generally Accepted Accounting Principles.
**	Excludes goodwill impairment, 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.

DOUBLE-DIGIT SEQUENTIAL GROWTH IN STORAGE SYSTEMS AND
NETWORKING DRIVES SOLID QUARTERLY RESULTS

Second quarter 2008 revenues were $692 million, a 3% increase year-over-year compared to $670 million reported in the second quarter of 2007, and up 5% sequentially compared to $661 million reported in the first quarter of 2008. Adjusting for the sale of the consumer and mobility businesses, second quarter revenues increased 24% year-over-year compared to the second quarter of 2007.

Second quarter 2008 GAAP* net loss was $14 million or 2 cents per share, compared to second quarter 2007 GAAP net loss of $378 million or 50 cents per share. Second quarter 2008 GAAP results compare to first quarter 2008 GAAP net loss of $14 million or 2 cents per share. Second quarter 2008 GAAP net loss included a net charge of $97 million from special items, consisting primarily of $58.6 million of amortization of acquisition-related items, $20.7 million of restructuring costs and other items, and $19.6 million of stock-based compensation expense.

Second quarter 2008 non-GAAP** net income was $83 million or 13 cents per diluted share, compared to second quarter 2007 non-GAAP net loss of $14 million or 2 cents per share. First quarter 2008 non-GAAP net income was $64 million or 10 cents per diluted share.

Cash and short-term investments totaled approximately $1.1 billion at quarter end.

“Strong worldwide demand for our storage systems and networking products helped us deliver another quarter of solid results,” said Abhi Talwalkar, LSI president and chief executive officer. “During the quarter, we also continued to build significant momentum for the future, introducing several new storage and networking products and securing additional silicon design wins with top-tier hard disk drive and server makers.

“Our business has demonstrated resilience through recent market uncertainty, and we expect this to continue as the positive effects of seasonal buying patterns materialize in the second half,” added Talwalkar.

Bryon Look, LSI chief financial officer, said, “Our second quarter results reflect the ongoing benefit of the many strategic and operational steps we have taken over the past four quarters. Increases in net income compared to the year-ago period were significant, and we continue to focus on improving our top and bottom line results.”

LSI Third Quarter 2008 Business Outlook

	GAAP*	Special Items	Non-GAAP**
Revenue	$695 million to $725 million		$695 million to $725 million
Gross Margin	39 – 41%	$40 to $50 million	45.5 – 47.5%
Operating Expenses	$268 million to $288 million	$30 to $40 million	$238 million to $248 million
Net Other Income	$0 million		$0 million
Tax	Approximately $6 million		Approximately 8%
Net (Loss)/Income Per Share	($0.03) to $0.04	($0.11) to ($0.14)	$0.11 to $0.15
Diluted Share Count	650 million		650 million

Capital spending is projected to be around $15 million in the third quarter and approximately $60 million in total for 2008.

Third 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 p.m. PDT to discuss second quarter financial results and the third quarter 2008 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.

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: our reliance on major customers and suppliers; our ability to keep up with rapid technological change; our ability to compete successfully in competitive markets; our ability to achieve anticipated synergies following our acquisition of Agere Systems; fluctuations in the timing and volumes of customer demand; the unavailability of appropriate levels of manufacturing capacity; our ability to successfully and timely transition our assembly and test operations to third parties; and general industry and market conditions. For additional information, see the documents filed by LSI with the Securities and Exchange Commission, 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. LSI and the LSI logo design are trademarks or registered trademarks of LSI Corporation or its subsidiaries.

3. All other brand or product names may be trademarks or registered trademarks of their respective companies.

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

	June 29,			March 30,			December 31,
	2008			2008			2007
Assets
Current assets:
Cash and short-term investments	$	1,147.2		$	1,236.8		$	1,397.6
Accounts receivable, net		359.3			332.1			406.4
Inventories		241.0			258.6			240.8
Prepaid expenses and other current assets		179.1			158.6			147.8
Total current assets		1,926.6			1,986.1			2,192.6
Property and equipment, net		240.2			235.2			229.7
Goodwill and other intangible assets, net		1,692.3			1,665.9			1,724.7
Other assets		268.8			252.5			249.4
Total assets	$	4,127.9		$	4,139.7		$	4,396.4
Liabilities and Stockholders’ Equity
Current liabilities	$	683.5		$	729.0		$	762.5
Long-term debt		716.4			717.2			718.0
Pension, tax and other liabilities		406.6			407.0			430.7
Total liabilities		1,806.5			1,853.2			1,911.2
Minority interest in subsidiary		0.3			0.3			0.2
Stockholders’ equity:
Common stock and additional paid-in capital		6,019.3			5,959.2			6,159.2
Accumulated deficit		(3,765.8	)		(3,752.1	)		(3,738.5	)
Accumulated other comprehensive income		67.6			79.1			64.3
Total stockholders’ equity		2,321.1			2,286.2			2,485.0
Total liabilities and stockholders’ equity	$	4,127.9		$	4,139.7		$	4,396.4

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

	Three Months Ended									Six Months Ended
	June 29,			March 30,			July 1,			June 29,			July 1,
	2008			2008			2007			2008			2007
Revenues	$	692,063		$	660,747		$	669,939		$	1,352,810		$	1,135,354
Cost of revenues		360,492			356,878			395,607			717,370			659,277
Purchase accounting effect on inventory		—			—			47,904			—			47,904
Amortization of acquisition related intangibles		44,103			42,255			71,310			86,358			76,595
Stock-based compensation expense		2,572			2,061			3,148			4,633			5,092
Total cost of revenues		407,167			401,194			517,969			808,361			788,868
Gross profit		284,896			259,553			151,970			544,449			346,486
Research and development		162,546			161,894			192,955			324,440			292,085
Stock-based compensation expense		7,569			7,823			8,978			15,392			13,695
Total research and development		170,115			169,717			201,933			339,832			305,780
Selling, general and administrative		80,473			77,708			97,440			158,181			154,527
Amortization of acquisition related intangibles		14,491			13,434			6,676			27,925			6,676
Stock-based compensation expense		9,506			7,911			10,687			17,417			15,210
Total selling, general and administrative		104,470			99,053			114,803			203,523			176,413
Restructuring of operations and other items, net		20,719			4,564			25,920			25,283			17,840
Acquired in-process research and development		—			—			176,400			—			182,900
Loss from operations		(10,408	)		(13,781	)		(367,086	)		(24,189	)		(336,447	)
Interest expense		(8,959	)		(8,978	)		(9,049	)		(17,937	)		(12,939	)
Interest income and other, net		8,220			14,631			10,790			22,851			21,321
Loss before income taxes		(11,147	)		(8,128	)		(365,345	)		(19,275	)		(328,065	)
Provision for income taxes		2,500			5,500			12,500			8,000			19,956
Net loss	$	(13,647	)	$	(13,628	)	$	(377,845	)	$	(27,275	)	$	(348,021	)
Net loss per share:
Basic	$	(0.02	)	$	(0.02	)	$	(0.50	)	$	(0.04	)	$	(0.60	)
Diluted	$	(0.02	)	$	(0.02	)	$	(0.50	)	$	(0.04	)	$	(0.60	)
Shares used in computing per share amounts:
Basic		639,872			661,984			751,114			650,867			577,672
Diluted		639,872			661,984			751,114			650,867			577,672
A reconciliation of net loss on a GAAP basis to a non-GAAP net income/(loss) is included below.
	Three Months Ended									Six Months Ended
	June 29,			March 30,			July 1,			June 29,			July 1,
Reconciliation of GAAP net loss to Non-GAAP net income/(loss):	2008			2008			2007			2008			2007
GAAP net loss	$	(13,647	)	$	(13,628	)	$	(377,845	)	$	(27,275	)	$	(348,021	)
Special items:
a) Stock-based compensation expense — cost of revenues		2,572			2,061			3,148			4,633			5,092
b) Stock-based compensation expense — R&D		7,569			7,823			8,978			15,392			13,695
c) Stock-based compensation expense — SG&A		9,506			7,911			10,687			17,417			15,210
d) Amortization of acquisition related intangibles — cost of revenues		44,103			42,255			71,310			86,358			76,595
e) Amortization of acquisition related intangibles — SG&A		14,491			13,434			6,676			27,925			6,676
f) Purchase accounting effect on inventory		—			—			47,904			—			47,904
g) Restructuring of operations and other items, net		20,719			4,564			25,920			25,283			17,840
h) Acquired in-process research and development		—			—			176,400			—			182,900
i) Write-down of debt and equity securities		2,827			—			2,396			2,827			2,396
j) Income tax effect		(4,751	)		(94	)		10,264			(4,845	)		9,895
Total special items		97,036			77,954			363,683			174,990			378,203
Non-GAAP net income/(loss)	$	83,389		$	64,326		$	(14,162	)	$	147,715		$	30,182
Non-GAAP net income/(loss) per share:
Basic	$	0.13		$	0.10		$	(0.02	)	$	0.23		$	0.05
Diluted	$	0.13		$	0.10		$	(0.02	)	$	0.23		$	0.05
Shares used in computing Non-GAAP per share amounts:
Basic		639,872			661,984			751,114			650,867			577,672
Diluted		643,106			662,485			751,114			652,293			587,248
	Three Months Ended									Six Months Ended
Reconciliation of GAAP to Non-GAAP shares used in the	June 29,			March 30,			July 1,			June 29,			July 1,
calculation of diluted per share amounts:	2008			2008			2007			2008			2007
Diluted shares used in per-share calculation — GAAP		639,872			661,984			751,114			650,867			577,672
Dilutive stock awards		3,234			501			—			1,426			9,576
Diluted shares used in per-share calculation — Non-GAAP		643,106			662,485			751,114			652,293			587,248

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

	Three Months Ended									Six Months Ended
	June 29,			March 30,			July 1,			June 29,			July 1,
	2008			2008			2007			2008			2007
Operating Activities:
Net loss	$	(13,647	)	$	(13,628	)	$	(377,845	)	$	(27,275	)	$	(348,021	)
Adjustments:
Depreciation and amortization *		79,290			78,328			101,599			157,618			120,175
Stock-based compensation expense		19,647			17,795			22,813			37,442			33,997
Non-cash restructuring and other items		46			(3,291	)		(29	)		(3,245	)		199
Acquired in-process research and development		—			—			176,400			—			182,900
Write-down of debt and equity securities		2,827			—			2,396			2,827			2,396
(Gain)/loss on sale of property and equipment, including assets held-for-sale		(11	)		(12	)		160			(23	)		(9,502	)
Non-cash foreign exchange (gain)/loss		(7,869	)		12,918			(4,277	)		5,049			(3,888	)
Changes in deferred tax assets and liabilities		2,014			2,115			(5,501	)		4,129			(5,470	)
Changes in assets and liabilities, net of assets acquired and liabilities assumed in business combinations:
Accounts receivable, net		(27,253	)		74,272			104,715			47,019			150,165
Inventories		17,620			(17,719	)		64,896			(99	)		45,242
Prepaid expenses and other assets		(5,275	)		(4,317	)		9,299			(9,592	)		33,864
Accounts payable		(11,376	)		(39,432	)		(94,585	)		(50,808	)		(131,054	)
Accrued and other liabilities		(28,762	)		(10,828	)		29,840			(39,590	)		14,860
Net cash provided by operating activities		27,251			96,201			29,881			123,452			85,863
Investing activities:
Purchases of debt securities available-for-sale		(62,481	)		(44,151	)		(61,606	)		(106,632	)		(122,236	)
Proceeds from maturities and sales of debt securities available-for-sale		42,299			50,904			199,740			93,203			374,132
Purchases of equity securities		—			(3,500	)		(3,000	)		(3,500	)		(3,000	)
Purchases of property, equipment and software		(32,625	)		(35,230	)		(20,211	)		(67,855	)		(40,714	)
Proceeds from sale of property and equipment		4,917			6,333			1,274			11,250			13,785
Cash acquired from acquisition of Agere, net of acquisition costs		—			—			517,712			—			517,712
Acquisitions of other companies, net of cash acquired		(95,137	)		—			—			(95,137	)		(52,079	)
Increase in non-current assets and deposits		(13,300	)		—			—			(13,300	)		—
Adjustment to goodwill acquired in a prior year for resolution of a pre-acquisition income tax contingency		—			4,821			—			4,821			2,442
Net cash (used in)/provided by investing activities		(156,327	)		(20,823	)		633,909			(177,150	)		690,042
Financing activities:
Issuance of common stock		29,203			346			16,246			29,549			21,917
Purchase of common stock under repurchase programs		—			(229,231	)		(400,355	)		(229,231	)		(400,355	)
Net cash provided by/(used in) financing activities		29,203			(228,885	)		(384,109	)		(199,682	)		(378,438	)
Effect of exchange rate changes on cash and cash equivalents		(944	)		1,816			268			872			203
(Decrease)/increase in cash and cash equivalents		(100,817	)		(151,691	)		279,949			(252,508	)		397,670
Cash and cash equivalents at beginning of period		869,878			1,021,569			445,521			1,021,569			327,800
Cash and cash equivalents at end of period	$	769,061		$	869,878		$	725,470		$	769,061		$	725,470

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

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

	Three Months Ended
	June 29,			March 30,			July 1,
	2008			2008			2007
Semiconductor revenues	$	462.0		$	458.8		$	484.8
Storage Systems revenues	$	230.1		$	201.9		$	185.1
Total revenues	$	692.1		$	660.7		$	669.9
Percentage change in revenues-qtr./qtr. ( a )		4.7	%		-10.8	%		43.9	%
Percentage change in revenues-yr./yr. ( b )		3.3	%		42.0	%		36.8	%
Days sales outstanding		47			45			57
Days of inventory		53			58			50
Current ratio		2.8			2.7			3.0
Quick ratio		2.2			2.2			2.3
Gross margin as a percentage of revenues		41.2	%		39.3	%		22.7	%
R&D as a percentage of revenues		24.6	%		25.7	%		30.1	%
SG&A as a percentage of revenues		15.1	%		15.0	%		17.1	%
Employees ( c )		5,378			5,351			9,138
Revenues per employee (in thousands) ( d )	$	514.7		$	493.9		$	293.3
Selected Cash Flow information:
Purchases of property and equipment ( e )	$	14.3		$	21.1		$	8.6
Depreciation and amortization ( f )	$	20.6		$	21.9		$	21.0

(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.

LSI CORPORATION
Reconciliations of Non-GAAP to GAAP measures
(In thousands)
(Unaudited)

	Three Months Ended
	June 29,			July 1,
	2008			2007
Consolidated revenues	$	692,063		$	669,939
Less:
Mobility revenues		—			90,550
Consumer revenues		—			20,998
Consolidated revenues excluding Mobility & Consumer	$	692,063		$	558,391
% change in revenues-yr./yr.		24	%