8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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 11, 2006

LAM RESEARCH CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

(State or Other Jurisdiction of Incorporation)

0-12933	94-2634797
(Commission File Number)	(IRS Employer Identification Number)

4650 Cushing Parkway
Fremont, California 94538
(Address of principal executive offices including zip code)

(510) 572-0200
(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 October 11, 2006, Lam Research Corporation (the Company) issued a press release announcing its earnings for the fiscal quarter ended September 24, 2006, the text of which is attached hereto as Exhibit 99.1.

The information in this Current Report on Form 8-K, including the exhibit, is furnished pursuant to Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section. Furthermore, the information in the Current Report on Form 8-K, including the exhibit, shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended.

Item 9.01. Financial Statements and Exhibits

     (c) Exhibits

99.1 Press Release dated October 11, 2006 announcing earnings for the fiscal quarter ended September 24, 2006

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.

Date: October 11, 2006

LAM RESEARCH CORPORATION
By:	/s/ Martin B. Anstice
	Martin B. Anstice
	Group Vice President,
	Chief Financial Officer, and
	Chief Accounting Officer

EXHIBIT INDEX

99.1 Press Release dated October 11, 2006 announcing earnings for the fiscal quarter ended September 24, 2006

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Lam Research Corporation Contact:

Kathleen Bela, Investor Relations, phone: 510/572-4566, e-mail: kathleen.bela@lamresearch.com

Lam Research Corporation Announces Earnings for the Quarter Ended September 24, 2006

FREMONT, Calif., October 11, 2006—Lam Research Corporation (NASDAQ: LRCX) today announced earnings for the quarter ended September 24, 2006. Highlights for the September 2006 quarter were:

• Revenue:		$	604.4	million
• Operating Margin:			32.2	%
• Net Income:	U.S. GAAP:	$	183.5	million	Ongoing:	$	163.9	million
• Diluted EPS:	U.S. GAAP:	$	1.27		Ongoing:	$	1.13

Revenue for the period was $604.4 million and net income was $183.5 million, or $1.27 per diluted share, compared to revenue of $525.6 million and net income of $122.1 million, or $0.84 per diluted share for the June 2006 quarter. Ongoing net income was $163.9 million, or $1.13 per diluted share in the September 2006 quarter compared with ongoing net income of $139.0 million, or $0.96 per diluted share, for the June 2006 quarter.

Gross margin for the September 2006 quarter was $313.2 million, or 51.8 percent, compared to gross margin of $274.2 million, or 52.2 percent, for the June 2006 quarter. Operating expenses increased during the quarter to $118.3 million compared to operating expenses of $114.7 million for the June 2006 quarter, driven by increases in incentive-based and equity compensation, and investments supporting our etch market share growth and new product development for markets adjacent to etch. Equity compensation expense in the September 2006 quarter recorded in cost of goods sold and operating expenses was $1.1 million and $5.2 million, respectively.

~more~

Lam Announces Earnings for the September 2006 Quarter Page 2 of 7

The Company believes the presentation of ongoing results, which excludes certain special items, is useful for analyzing ongoing business trends. A table presenting a reconciliation of ongoing performance to results under U.S. GAAP is included at the end of this press release and on the Company’s web site. The September 2006 quarter ongoing presentation removes the effects of a legal judgment in favor of the Company of $15.8 million recorded in other income, net, which was previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended June 25, 2006, and the successful resolution of certain foreign tax matters resulting in a net tax benefit of $10.0 million. The June 2006 quarter ongoing presentation removes the effect of tax expense associated with the Company’s decision to repatriate foreign earnings of $350 million under the provisions of the American Jobs Creation Act.

New orders recorded in backlog increased 13 percent sequentially to $725 million. The geographic distribution of new orders and revenue during the September 2006 quarter is shown in the following table:

Region	New Orders			Revenue
North America		26	%		15	%
Europe		5	%		14	%
Japan		17	%		18	%
Korea		19	%		15	%
Asia Pacific		33	%		38	%

Cash and cash equivalents, short-term investments and restricted cash and investments balances were $1.7 billion at the end of September, and cash flows provided by operating activities were $216.6 million during the quarter. Condensed Consolidated Statements of Cash Flows are included at the end of this press release. Deferred revenue and deferred profit balances were $258.2 million and $153.1 million, respectively. At the end of the period, unshipped orders in backlog were approximately $593 million, and the anticipated future revenue value of orders shipped from backlog to Japanese customers that are not recorded as deferred revenue remained constant at approximately $74 million.

~more~

Lam Announces Earnings for the September 2006 Quarter Page 3 of 7

“September results reflect another quarter of strong revenue and earnings growth for Lam Research,” stated Steve Newberry, Lam Research’s president and chief executive officer. “Operating margins and income achieved record levels, and demonstrate the leverage throughout our business model. In addition, we generated record levels of cash from operations, a consequence of our focus on a disciplined approach to asset management. Clearly, these are excellent results and provide a solid foundation for future opportunities. Our customers continue to increase their reliance on Lam to deliver next-generation capability quickly and cost-effectively. Our market share continues to grow as we effectively support our rapidly growing installed base of leading edge equipment with well characterized solutions to our customers’ most critical technical challenges,” Newberry concluded.

Statements made in this press release which are not statements of historical fact are forward-looking statements and are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate, but are not limited, to our business model’s ability to produce superior operating margins and income, our continuing ability to generate cash, through asset management or otherwise, our customers’ continued reliance on us, and our ability to grow market share and effectively support our installed base. Some factors that may affect these forward-looking statements include: changing business conditions in the semiconductor industry and the overall economy and our plans for reacting to those changes, changing customer demands, success of our competitors’ strategies including their development of new technologies, our ability to hire, train and retain key employees, and the success of our research and development programs. These forward-looking statements are based on current expectations and are subject to uncertainties and changes in condition, significance, value and effect as well as other risks detailed in documents filed with the Securities and Exchange Commission, including specifically the report on Form 10-K for the year ended June 25, 2006, which could cause actual results to vary from expectations. The Company undertakes no obligation to update the information or statements made in this press release.

Lam Research Corporation is a major provider of wafer fabrication equipment and services to the world’s semiconductor industry. Lam’s common stock trades on The NASDAQ Global Select Market^SM under the symbol LRCX. Lam is a NASDAQ-100^® company. The Company’s World Wide Web address is http://www.lamresearch.com.

Consolidated Financial Tables Follow

###

Lam Announces Earnings for the September 2006 Quarter Page 4 of 7

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data and percentages)

	Three Months Ended
	September 24,			June 25,			September 25,
	2006			2006			2005
	(unaudited)			(unaudited)			(unaudited)
Total revenue	$	604,387		$	525,596		$	320,907
Cost of goods sold		291,223			251,445			164,828
Gross margin		313,164			274,151			156,079
Gross margin as a percent of revenue		51.8	%		52.2	%		48.6	%
Research and development		61,623			60,824			51,242
Selling, general and administrative		56,708			53,921			45,155
Total operating expenses		118,331			114,745			96,397
Operating income		194,833			159,406			59,682
Operating margin as a percent of revenue		32.2	%		30.3	%		18.6	%
Other income, net		30,348			9,398			8,488
Income before income taxes		225,181			168,804			68,170
Income tax expense		41,663			46,655			18,679
Net income	$	183,518		$	122,149		$	49,491
Net income per share:
Basic	$	1.29		$	0.87		$	0.36
Diluted	$	1.27		$	0.84		$	0.35
Number of shares used in per share calculations:
Basic		141,928			141,168			136,453
Diluted		144,850			144,683			141,430

Lam Announces Earnings for the September 2006 Quarter Page 5 of 7

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

	September 24,		June 25,
	2006		2006
	(unaudited)		(1)
Assets:
Cash and cash equivalents	$	1,031,348	$	910,815
Short-term investments		233,284		139,524
Accounts receivable, net		379,869		407,347
Inventories		188,179		168,714
Other current assets		87,920		79,969
Total current assets		1,920,600		1,706,369
Property and equipment, net		56,786		49,893
Restricted cash and investments		470,038		470,038
Other assets		86,937		87,044
Total assets	$	2,534,361	$	2,313,344
Liabilities and stockholders’ equity:
Current liabilities	$	584,244	$	566,226
Long-term debt	$	350,000	$	350,000
Other long-term liabilities		924		969
Stockholders’ equity		1,599,193		1,396,149
Total liabilities and stockholders’ equity	$	2,534,361	$	2,313,344

(1) Derived from audited financial statements.

Lam Announces Earnings for the September 2006 Quarter Page 6 of 7

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

	Three Months Ended
	September 24,			June 25,			September 25,
	2006			2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	183,518		$	122,149		$	49,491
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		6,527			5,765			6,032
Deferred income taxes		6,419			(4,936	)		15,374
Equity-based compensation		6,251			5,449			5,246
Income tax benefit on equity-based compensation plans		1,872			27,786			—
Excess tax benefit on equity-based compensation plans		(1,264	)		(17,805	)		—
Other, net		420			1,270			1,842
Change in working capital accounts		12,884			(47,412	)		(30,604	)
Net cash provided by operating activities		216,627			92,266			47,381
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures and intangible assets		(12,920	)		(25,939	)		(4,658	)
Transfer of restricted cash and investments		—			(385,000	)		—
Net sales (purchases) of available-for-sale securities		(90,923	)		90,296			51,598
Net cash provided by/(used for) investing activities		(103,843	)		(320,643	)		46,940
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on capital lease		(44	)		(45	)		—
Net proceeds from issuance of long-term debt		—			349,632			—
Excess tax benefit on equity-based compensation plans		1,264			17,805			—
Treasury stock purchases		(1,048	)		(37,002	)		(78,690	)
Reissuances of treasury stock		5,990			5,519			5,137
Proceeds from issuance of common stock		1,739			43,698			12,174
Net cash provided by/(used for) financing activities		7,901			379,607			(61,379	)
Effect of exchange rate changes on cash		(152	)		1,740			(374	)
Net increase in cash and cash equivalents		120,533			152,970			32,568
Cash and cash equivalents at beginning of period		910,815			757,845			482,250
Cash and cash equivalents at end of period	$	1,031,348		$	910,815		$	514,818

Lam Announces Earnings for the September 2006 Quarter Page 7 of 7

Reconciliation of U.S. GAAP Net Income to Ongoing Net Income
(in thousands, except per share data and percentages)

	Three Months Ended
	September 24,			June 25,
	2006			2006
U.S. GAAP net income	$	183,518		$	122,149
Tax expense on repatriation of foreign earnings		—			16,810
Net tax benefit on successful resolution of certain foreign tax matters		(9,959	)		—
Pre-tax legal judgment — other income, net		(15,834	)		—
Tax expense on legal judgment		6,128			—
Ongoing net income	$	163,853		$	138,959
Ongoing net income per diluted share	$	1.13		$	0.96
Number of shares used for diluted per share calculation		144,850			144,683
U.S. GAAP income tax rate		18.5	%		27.6	%
Ongoing income tax rate		21.7	%		17.7	%