Document



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): April 17, 2018
  
LAM RESEARCH CORPORATION
(Exact name of registrant as specified in its charter)
 
 
Delaware
 
0-12933
 
94-2634797
(State or Other Jurisdiction
of Incorporation)
 
(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):
¨

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

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

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

 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company     ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ¨








Table of Contents
 
 
 
 
 
 
Item 2.02.
  
Results of Operations and Financial Condition
 
Item 9.01.
  
Financial Statements and Exhibits
 
SIGNATURES
 
EX-99.1
 
 
 
 
 
 
 







 Item 2.02.
Results of Operations and Financial Condition
On April 17, 2018, Lam Research Corporation (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended March 25, 2018, the text of which is attached hereto as Exhibit 99.1.
The information in this item of this Current Report on Form 8-K, including Exhibit 99.1, 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 (the “Exchange Act”), or otherwise subject to the liabilities under that Section. Furthermore, the information in this item of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended, or the Exchange Act.
 Item 9.01.
Financial Statements and Exhibits
(d) Exhibits
99.1







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:
April 17, 2018
 
LAM RESEARCH CORPORATION
 
 
 
(Registrant)
 
 
 
/s/ Douglas R. Bettinger
 
 
 
Douglas R. Bettinger
 
 
 
Executive Vice President, Chief Financial Officer
 
 
 
(Principal Financial Officer and Principal Accounting Officer)
 



Exhibit


Exhibit 99.1
FOR IMMEDIATE RELEASE        
Lam Research Corporation Contacts:
Satya Kumar, Investor Relations, phone: 510-572-1615, e-mail: investor.relations@lamresearch.com
Lam Research Corporation Reports Financial Results for the Quarter Ended March 25, 2018
FREMONT, Calif., April 17, 2018 - Lam Research Corp. (Nasdaq: LRCX) today announced financial results for the quarter ended March 25, 2018 (the “March 2018 quarter”).
Highlights for the March 2018 quarter were as follows:
Shipments of $3.13 billion and revenue of $2.89 billion.
U.S. GAAP gross margin of 46.0%, U.S. GAAP operating margin of 28.6%, and U.S. GAAP diluted EPS of $4.33.
Non-GAAP gross margin of 46.8%, non-GAAP operating margin of 30.0%, and non-GAAP diluted EPS of $4.79.
Key Financial Data for the Quarters Ended
March 25, 2018 and December 24, 2017
(in thousands, except per-share data, percentages, and basis points) 
U.S. GAAP
 
  
March 2018
 
December 2017
 
Change Q/Q
Shipments
  
$
3,134,677

 
$
2,631,723

 
+ 19%

Revenue
  
$
2,892,115

 
$
2,580,815

 
+ 12%

Gross margin as percentage of revenue
  
46.0
%
 
46.7
%
 
- 70 bps

Operating margin as percentage of revenue
  
28.6
%
 
28.6
%
 

Diluted EPS
  
$
4.33

 
$
(0.06
)
 
7317 %

 
Non-GAAP
 
  
March 2018
 
December 2017
 
Change Q/Q
Shipments
  
$
3,134,677

 
$
2,631,723

 
+ 19%

Revenue
  
$
2,892,115

 
$
2,580,815

 
+ 12%

Gross margin as percentage of revenue
  
46.8
%
 
47.6
%
 
- 80 bps

Operating margin as percentage of revenue
  
30.0
%
 
30.2
%
 
- 20 bps

Diluted EPS
  
$
4.79

 
$
4.34

 
+ 10%

U.S. GAAP Financial Results
For the March 2018 quarter, revenue was $2,892 million, gross margin was $1,331 million, or 46.0% of revenue, operating expenses were $503 million, operating margin was 28.6% of revenue, and net income was $779 million, or $4.33 per diluted share on a U.S. GAAP basis. This compares to revenue of $2,581 million, gross margin of $1,206 million, or 46.7% of revenue, operating expenses of $468 million, operating margin of 28.6% of revenue, and net loss of $(10) million, or $(0.06) per diluted share, for the quarter ended December 24, 2017 (the “December 2017 quarter”). The December 2017 results were negatively impacted by a one-time provisional charge of $757 million associated with the recently enacted U.S. tax reform, which the Company will continue to evaluate during the measurement period.
Non-GAAP Financial Results
For the March 2018 quarter, non-GAAP gross margin was $1,353 million or 46.8% of revenue, non-GAAP operating expenses were $486 million, non-GAAP operating margin was 30.0% of revenue, and non-GAAP net income was $852 million, or $4.79 per diluted share. This compares to non-GAAP gross margin of $1,228 million or 47.6% of revenue, non-GAAP operating expenses of $449 million, non-GAAP operating margin of 30.2% of revenue, and non-GAAP net income of $788 million, or $4.34 per diluted share for the December 2017 quarter.
“Lam continues to deliver strong performance, again setting new records highlighted by shipments exceeding three billion dollars in the March quarter. Fundamental to this achievement is increased strategic relevance enabling primary technology inflections now critical to our customers’ success,” said Martin Anstice, Lam Research’s Chief Executive Officer. “We remain focused on delivering long-term outperformance and making the right investments for our future.”








Balance Sheet and Cash Flow Results
Cash and cash equivalents, short-term investments, and restricted cash and investments balances increased to $6.7 billion at the end of the March 2018 quarter compared to $6.0 billion at the end of the December 2017 quarter. This increase was primarily the result of approximately $1.1 billion of cash generated from operating activities, partially offset by approximately $80 million of net share settlement on employee stock-based compensation, $80 million of dividends paid to stockholders, $49 million of capital expenditures, and $29 million of net repayments of debt.

Deferred revenue and deferred profit at the end of the March 2018 quarter remained steady at $1.1 billion and $749 million, respectively, as compared to the end of the December 2017 quarter. Lam’s deferred revenue balance does not include shipments to customers in Japan, to whom title does not transfer until customer acceptance. Shipments to customers in Japan are classified as inventory at cost until the time of acceptance. The estimated future revenue from shipments to customers in Japan was approximately $526 million as of March 25, 2018 and $289 million as of December 24, 2017.
Geographic Distribution
The geographic distribution of shipments and revenue during the March 2018 quarter is shown in the following table:
Region
Shipments
 
Revenue
Korea
36
%
 
36
%
China
14
%
 
17
%
Japan
20
%
 
14
%
Taiwan
11
%
 
12
%
Southeast Asia
8
%
 
8
%
United States
6
%
 
8
%
Europe
5
%
 
5
%
Outlook
For the June 2018 quarter, Lam is providing the following guidance:
 
U.S. GAAP
 
Reconciling Items
 
Non-GAAP
Shipments
$3.000 Billion
+/-
 $150 Million
 
 
$3.000 Billion
+/-
 $150 Million
Revenue
$3.100 Billion
+/-
 $150 Million
 
 
$3.100 Billion
+/-
 $150 Million
Gross margin
46.8%
+/-
1%
 
$
22

Million
 
47.5%
+/-
1%
Operating margin
29.7%
+/-
1%
 
$
39

Million
 
31.0%
+/-
1%
Net income per diluted share
$4.77
+/-
$0.20
 
$
36

Million
 
$5.00
+/-
$0.20
Diluted share count
179 Million
 
1

Million
 
178 Million
The information provided above is only an estimate of what the Company believes is realizable as of the date of this release, and does not incorporate the potential impact of any business combinations, asset acquisitions, divestitures, balance sheet valuation adjustments, financing arrangements, other investments, measurement period adjustments associated with U.S. tax reform, or other significant transactions that may be completed after the date of this release. U.S. GAAP to non-GAAP reconciling items provided include only those items that are known and can be estimated as of the date of this release. Actual results will vary from this model and the variations may be material. Reconciling items included above are as follows:
Gross margin - amortization related to intangible assets acquired through business combinations, $22 million.
Operating margin - amortization related to intangible assets acquired through business combinations, $39 million.
Earnings per share - amortization related to intangible assets acquired though business combinations, $39 million; amortization of note discounts, $2 million; and associated tax benefit for non-GAAP items ($5 million); totaling $36 million.
Diluted share count - impact of a note hedge issued contemporaneously with the convertible notes due 2018, 1 million shares.







Use of Non-GAAP Financial Results
In addition to U.S. GAAP results, this press release also contains non-GAAP financial results. The Company’s non-GAAP results for both the March 2018 and December 2017 quarters exclude amortization related to intangible assets acquired through business combinations, acquisition and integration costs associated with a business combination, amortization of note discounts, and tax benefit of non-GAAP items. Additionally, the March 2018 quarter non-GAAP results exclude realized loss on sale or impairment of investments associated with repatriation and tax benefit on the conclusion of tax matters related to a prior business combination. The December 2017 quarter non-GAAP results exclude costs associated with business process reengineering and estimated income tax expense associated with U.S. tax reform.
Management uses non-GAAP gross margin, operating expense, operating income, operating margin, net income, and net income per diluted share to evaluate the Company’s operating and financial results. The Company believes the presentation of non-GAAP results is useful to investors for analyzing business trends and comparing performance to prior periods, along with enhancing investors’ ability to view the Company’s results from management’s perspective. Tables presenting reconciliations of non-GAAP results to U.S. GAAP results are included at the end of this press release and on the Company’s website at http://investor.lamresearch.com .
Caution Regarding Forward-Looking Statements
Statements made in this press release that are not 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 to, but are not limited to: the estimated future revenue from shipments to customers in Japan; our revenue, industry, performance and general outlooks, and their drivers; our future strategic relevance to customers; our vision of the Company's future; technology demand trends; the legal and business factors that may affect our future tax rate; and our guidance for shipments, revenue, gross margin, operating margin, net income or earnings per diluted share, provisional tax estimate, and diluted share count. Some factors that may affect these forward-looking statements include: business conditions in the consumer electronics industry, the semiconductor industry and the overall economy may deteriorate or change; and the actions of our customers and competitors may be inconsistent with our expectations, as well as the other risks and uncertainties that are described in the documents filed or furnished by us with the Securities and Exchange Commission, including specifically the Risk Factors described in our annual report on Form 10-K for the fiscal year ended June 25, 2017 and our quarterly report on Form 10-Q for the fiscal quarters ended September 24, 2017 and December 24, 2017. These uncertainties and changes could materially affect the forward looking statements and cause actual results to vary from expectations in a material way. The Company undertakes no obligation to update the information or statements made in this release.
About Lam Research
Lam Research Corp. is a global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. As a trusted, collaborative partner to the world’s leading semiconductor companies, we combine superior systems engineering capability, technology leadership, and unwavering commitment to customer success to accelerate innovation through enhanced device performance. In fact, today, nearly every advanced chip is built with Lam technology. Lam Research (Nasdaq: LRCX) is a FORTUNE 500® company headquartered in Fremont, Calif., with operations around the globe. Learn more at www.lamresearch.com. (LRCX-F)

Consolidated Financial Tables Follow.
 ###







 
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data and percentages)
(unaudited) 
 
Three Months Ended
 
Nine Months Ended
 
March 25,
2018
 
December 24,
2017
 
March 26,
2017
 
March 25,
2018
 
March 26,
2017
Revenue
$
2,892,115

 
$
2,580,815

 
$
2,153,995

 
$
7,951,070

 
$
5,668,713

Cost of goods sold
1,561,401

 
1,375,248

 
1,182,591

 
4,265,446

 
3,134,315

Gross margin
1,330,714

 
1,205,567

 
971,404

 
3,685,624

 
2,534,398

Gross margin as a percent of revenue
46.0
%
 
46.7
%
 
45.1
%
 
46.4
%
 
44.7
%
Research and development
305,412

 
281,311

 
265,986

 
861,801

 
748,030

Selling, general and administrative
197,791

 
186,885

 
167,000

 
565,719

 
492,175

Total operating expenses
503,203

 
468,196

 
432,986

 
1,427,520

 
1,240,205

Operating income
827,511

 
737,371

 
538,418

 
2,258,104

 
1,294,193

Operating income as a percent of revenue
28.6
%
 
28.6
%
 
25.0
%
 
28.4
%
 
22.8
%
Other expense, net
(55,810
)
 
(3,152
)
 
(7,838
)
 
(64,464
)
 
(86,015
)
Income before income taxes
771,701

 
734,219

 
530,580

 
2,193,640

 
1,208,178

Income tax benefit (expense)
7,099

 
(744,174
)
 
44,133

 
(834,105
)
 
(36,839
)
Net income (loss)
$
778,800

 
$
(9,955
)
 
$
574,713

 
$
1,359,535

 
$
1,171,339

Net income (loss) per share:
 
 
 
 
 
 
 
 
 
Basic
$
4.80

 
$
(0.06
)
 
$
3.52

 
$
8.40

 
$
7.22

Diluted
$
4.33

 
$
(0.06
)
 
$
3.10

 
$
7.45

 
$
6.40

Number of shares used in per share calculations:
 
 
 
 
 
 
 
 
 
Basic
162,378

 
161,135

 
163,408

 
161,885

 
162,225

Diluted
179,779

 
161,135

 
185,094

 
182,565

 
182,885

Cash dividend declared per common share
$
0.50

 
$
0.50

 
$
0.45

 
$
1.45

 
$
1.20


 












 





LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
 
 
March 25,
2018
 
December 24,
2017
 
June 25,
2017
 
(unaudited)
 
(unaudited)
 
(1)
ASSETS
 
 
 
 
 
Cash and cash equivalents
$
4,698,995

 
$
1,745,173

 
$
2,377,534

Investments
1,785,976

 
3,954,526

 
3,663,628

Accounts receivable, net
2,082,632

 
2,279,044

 
1,673,398

Inventories
1,693,128

 
1,507,435

 
1,232,916

Other current assets
165,066

 
179,944

 
195,022

Total current assets
10,425,797

 
9,666,122

 
9,142,498

Property and equipment, net
826,500

 
807,340

 
685,595

Restricted cash and investments
256,587

 
255,984

 
256,205

Goodwill and intangible assets
1,825,891

 
1,866,159

 
1,796,668

Other assets
328,724

 
316,660

 
241,799

Total assets
$
13,663,499

 
$
12,912,265

 
$
12,122,765

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
Current portion of debt and capital leases
$
1,423,265

 
$
1,401,660

 
$
908,439

Other current liabilities
2,525,155

 
2,510,035

 
2,041,676

Total current liabilities
3,948,420

 
3,911,695

 
2,950,115

Long-term debt and capital leases
1,781,731

 
1,789,958

 
1,784,974

Income taxes payable
818,700

 
818,880

 
120,178

Other long-term liabilities
230,620

 
118,177

 
280,186

Total liabilities
6,779,471

 
6,638,710

 
5,135,453

Temporary equity, convertible notes
80,973

 
130,424

 
169,861

Stockholders’ equity (2)
6,803,055

 
6,143,131

 
6,817,451

Total liabilities and stockholders’ equity
$
13,663,499

 
$
12,912,265

 
$
12,122,765

 
(1)
Derived from audited financial statements.
(2)
Common shares issued and outstanding were 164,100 as of March 25, 2018, 159,451 as of December 24, 2017, and 161,723 as of June 25, 2017.
 







 
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
 
Three Months Ended
 
Nine Months Ended
 
March 25,
2018
 
December 24,
2017
 
March 26,
2017
 
March 25,
2018
 
March 26,
2017
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Net income (loss)
$
778,800

 
$
(9,955
)
 
$
574,713

 
$
1,359,535

 
$
1,171,339

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
 
 
 
 
 
 
Depreciation and amortization
82,236

 
79,898

 
76,242

 
241,276

 
227,869

Deferred income taxes
19,060

 
(271,478
)
 
27,619

 
(209,214
)
 
69,867

Equity-based compensation expense
41,095

 
42,124

 
35,323

 
125,002

 
106,173

Impairment of investment
42,456

 

 

 
42,456

 

Loss on extinguishment of debt

 

 

 

 
36,325

Amortization of note discounts and issuance costs
4,342

 
4,539

 
6,136

 
13,469

 
19,168

Other, net
17,866

 
(1,108
)
 
(4,738
)
 
23,327

 
10,777

Changes in operating assets and liabilities
64,524

 
184,684

 
(292,607
)
 
341,538

 
(341,508
)
Net cash provided by operating activities
1,050,379

 
28,704

 
422,688

 
1,937,389

 
1,300,010

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Capital expenditures and intangible assets
(49,057
)
 
(84,693
)
 
(44,116
)
 
(193,814
)
 
(122,608
)
Business acquisitions, net of cash acquired

 
(84
)
 

 
(115,697
)
 

Net sale (purchase) of available-for-sale securities
2,134,886

 
(205,701
)
 
(418,566
)
 
1,811,411

 
(1,977,744
)
Transfers of restricted cash and investments
(603
)
 
61

 
(982
)
 
(382
)
 
(5,736
)
Other, net
638

 
(4,396
)
 
(3,586
)
 
(14,358
)
 
(11,627
)
Net cash provided by (used for) investing activities
2,085,864

 
(294,813
)
 
(467,250
)
 
1,487,160

 
(2,117,715
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Principal payments on long-term debt and capital lease obligations and payments for debt issuance costs
(228,166
)
 
(47,522
)
 
(69,227
)
 
(577,415
)
 
(1,685,868
)
Net proceeds from issuance of commercial paper
199,024

 
798,947

 

 
997,971

 

Proceeds from borrowings on revolving credit facility

 
750,000

 

 
750,000

 

Repayments of borrowings on revolving credit facility

 
(750,000
)
 

 
(750,000
)
 

Treasury stock purchases
(80,105
)
 
(1,111,450
)
 
(216,373
)
 
(1,346,940
)
 
(285,894
)
Dividends paid
(79,739
)
 
(73,127
)
 
(73,337
)
 
(225,604
)
 
(169,786
)
Reissuance of treasury stock related to employee stock purchase plan

 
34,057

 
17,223

 
34,057

 
36,543

Proceeds from issuance of common stock
2,517

 
3,073

 
7,964

 
6,632

 
12,544

Other, net
7

 

 
(70
)
 
11

 
(124
)
Net cash used for financing activities
(186,462
)
 
(396,022
)
 
(333,820
)
 
(1,111,288
)
 
(2,092,585
)
Effect of exchange rate changes on cash and cash equivalents
4,041

 
842

 
2,992

 
8,200

 
(462
)
Net increase (decrease) in cash and cash equivalents
2,953,822

 
(661,289
)
 
(375,390
)
 
2,321,461

 
(2,910,752
)
Cash and cash equivalents at beginning of period
1,745,173

 
2,406,462

 
2,503,960

 
2,377,534

 
5,039,322

Cash and cash equivalents at end of period
$
4,698,995

 
$
1,745,173

 
$
2,128,570

 
$
4,698,995

 
$
2,128,570








 
Non-GAAP Financial Summary
(in thousands, except percentages and per share data)
(unaudited)
 
Three Months Ended
 
March 25,
2018
 
December 24,
2017
Revenue
$
2,892,115

 
$
2,580,815

Gross margin
$
1,353,056

 
$
1,227,961

Gross margin as percentage of revenue
46.8
%
 
47.6
%
Operating expenses
$
486,022

 
$
448,667

Operating income
$
867,034

 
$
779,294

Operating margin as a percentage of revenue
30.0
%
 
30.2
%
Net income
$
851,795

 
$
787,863

Net income per diluted share
$
4.79

 
$
4.34

Shares used in per share calculation - diluted
177,786

 
181,655

Reconciliation of U.S. GAAP Net Income (Loss) to Non-GAAP Net Income and U.S. GAAP number of dilutive shares to Non-GAAP number of dilutive shares
(in thousands, except per share data)
(unaudited) 
 
Three Months Ended
 
March 25,
2018
 
December 24,
2017
U.S. GAAP net income (loss)
$
778,800

 
$
(9,955
)
Pre-tax non-GAAP items:
 
 
 
Amortization related to intangible assets acquired through certain business combinations - cost of goods sold
22,342

 
22,394

Amortization related to intangible assets acquired through certain business combinations - selling, general and administrative
17,074

 
17,074

Costs associated with business process reengineering - selling, general and administrative

 
1,362

Business combination acquisition and integration related costs - selling, general and administrative
107

 
1,093

Amortization of note discounts - other expense, net
2,860

 
3,410

Realized loss on sale or impairment of investments - other expense, net
46,641

 

Net income tax benefit on non-GAAP items
(11,518
)
 
(4,404
)
Income tax benefit on the conclusion of certain tax matters
(4,511
)
 

Income tax expense associated with U.S. tax reform

 
756,889

Non-GAAP net income
$
851,795

 
$
787,863

Non-GAAP net income per diluted share
$
4.79

 
$
4.34

GAAP net income (loss) per diluted share
$
4.33

 
$
(0.06
)
U.S. GAAP number of shares used for per diluted share calculation
179,779

 
161,135

Effect of potentially dilutive securities:
 
 
 
Employee stock plans

 
2,757

Convertible notes

 
15,423

Warrants

 
4,721

Effect of convertible note hedge
(1,993
)
 
(2,381
)
Non-GAAP number of shares used for per diluted share calculation
177,786

 
181,655







 
Reconciliation of U.S. GAAP Gross Margin, Operating Expenses and Operating Income to Non-GAAP Gross Margin, Operating Expenses and Operating Income
(in thousands, except percentages)
(unaudited) 
 
Three Months Ended
 
March 25,
2018
 
December 24,
2017
U.S. GAAP gross margin
$
1,330,714

 
$
1,205,567

Pre-tax non-GAAP items:
 
 
 
Amortization related to intangible assets acquired through certain business combinations
22,342

 
22,394

Non-GAAP gross margin
$
1,353,056

 
$
1,227,961

U.S. GAAP gross margin as a percentage of revenue
46.0
%
 
46.7
%
Non-GAAP gross margin as a percentage of revenue
46.8
%
 
47.6
%
U.S. GAAP operating expenses
$
503,203

 
$
468,196

Pre-tax non-GAAP items:
 
 
 
Amortization related to intangible assets acquired through certain business combinations
(17,074
)
 
(17,074
)
Costs associated with business process reengineering

 
(1,362
)
Business combination acquisition and integration related costs
(107
)
 
(1,093
)
Non-GAAP operating expenses
$
486,022

 
$
448,667

Non-GAAP operating income
$
867,034

 
$
779,294

U.S. GAAP operating margin as percent of revenue
28.6
%
 
28.6
%
Non-GAAP operating margin as a percent of revenue
30.0
%
 
30.2
%