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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Sep. 28, 2014	Oct. 28, 2014
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 28, 2014
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Trading Symbol	LRCX
Entity Registrant Name	LAM RESEARCH CORP
Entity Central Index Key	0000707549
Current Fiscal Year End Date	--06-28
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		158,960,476

Consolidated Balance Sheets - USD ($)
$ in Thousands

Sep. 28, 2014

Jun. 29, 2014

^[1]

ASSETS

Cash and cash equivalents

$ 1,293,678

$ 1,452,677

Short-term investments

1,593,668

1,612,967

Accounts receivable, less allowance for doubtful accounts of $4,917 as of September 28, 2014 and $4,962 as of June 29, 2014

864,403

800,616

Inventories

815,612

740,503

Prepaid expenses and other current assets

123,615

176,899

Total current assets

4,690,976

4,783,662

Property and equipment, net

555,658

543,496

Restricted cash and investments

149,483

146,492

Goodwill

1,467,319

1,466,225

Intangible assets, net

854,834

894,078

Other assets

175,558

159,353

Total assets

7,893,828

7,993,306

LIABILITIES AND STOCKHOLDERS' EQUITY

Trade accounts payable

249,779

223,515

Accrued expenses and other current liabilities

578,968

604,296

Deferred profit

251,779

235,923

Current portion of long-term debt, convertible notes, and capital leases

519,099

518,267

Total current liabilities

1,599,625

1,582,001

Long-term debt, convertible notes, and capital leases

824,269

817,202

Income taxes payable

217,118

258,357

Other long-term liabilities

179,711

122,662

Total liabilities

2,820,723

2,780,222

Commitments and contingencies

Senior convertible notes

182,432

183,349

Stockholders' equity:

Preferred stock, at par value of $0.001 per share; authorized - 5,000 shares; none outstanding

Common stock, at par value of $0.001 per share; authorized - 400,000 shares; issued and outstanding - 159,384 shares as of September 28, 2014 and 162,350 shares as of June 29, 2014

159

162

Additional paid-in capital

5,291,844

5,239,567

Treasury stock, at cost; 96,386 shares as of September 28, 2014 and 92,867 shares as of June 29, 2014

(4,050,035)

(3,757,076)

Accumulated other comprehensive loss

(38,732)

(28,655)

Retained earnings

3,687,437

3,575,737

Total stockholders' equity

4,890,673

5,029,735

Total liabilities and stockholders' equity

$ 7,893,828

$ 7,993,306

[1]	Derived from audited financial statements

Consolidated Balance Sheets (Parenthetical) - USD ($)
shares in Thousands, $ in Thousands

Sep. 28, 2014

Jun. 29, 2014

^[1]

Accounts receivable, allowance for doubtful accounts

$ 4,917

$ 4,962

Preferred stock, par value

$ 0.001

Preferred stock, shares authorized

5,000

Preferred stock, shares outstanding

Common stock, par value

$ 0.001

Common stock, shares authorized

400,000

Common stock, shares issued

159,384

162,350

Common stock, shares outstanding

159,384

162,350

Treasury stock, shares

96,386

92,867

[1]	Derived from audited financial statements

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 28, 2014	Sep. 29, 2013
Revenue	$ 1,152,368	$ 1,015,059
Cost of goods sold	646,829	583,201
Gross margin	505,539	431,858
Research and development	188,934	170,567
Selling, general and administrative	148,307	155,883
Total operating expenses	337,241	326,450
Operating income	168,298	105,408
Other expense, net	(5,648)	(14,262)
Income before income taxes	162,650	91,146
Income tax expense	21,569	5,640
Net income	$ 141,081	$ 85,506
Net income per share:
Basic	$ 0.87	$ 0.52
Diluted	$ 0.80	$ 0.50
Number of shares used in per share calculations:
Basic	161,685	162,896
Diluted	177,118	171,363
Cash dividend declared per common share	$ 0.18

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Sep. 28, 2014	Sep. 29, 2013
Net income	$ 141,081	$ 85,506
Other comprehensive income, net of tax:
Foreign currency translation adjustment	(8,959)	3,559
Cash flow hedges:
Net unrealized gains during the period	298	4,507
Net losses reclassified into earnings	(102)	(3,802)
Net change	196	705
Available-for-sale investments:
Net unrealized (losses) gains during the period	(1,759)	686
Net gains reclassified into earnings	379	74
Net change	(1,380)	760
Defined benefit plan, net change in unrealized component	66	314
Net current-period other comprehensive (loss) income	(10,077)	5,338
Comprehensive income	$ 131,004	$ 90,844

Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands

3 Months Ended

Sep. 28, 2014

Sep. 29, 2013

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$ 141,081

$ 85,506

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

67,885

74,331

Deferred income taxes

3,186

Impairment of long-lived asset

7,004

Equity-based compensation expense

32,040

23,235

Income tax benefit on equity-based compensation plans

9,861

Excess tax benefit on equity-based compensation plans

(10,404)

Gain on sale of business

(7,431)

Amortization of convertible note discount

8,509

8,122

Other, net

5,526

4,115

Changes in operating assets and liabilities

(109,092)

(150,388)

Net cash provided by operating activities

141,161

51,925

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures

(41,871)

(23,778)

Cash paid for business acquisition

(1,137)

Purchases of available-for-sale securities

(337,100)

(156,409)

Sales and maturities of available-for-sale securities

346,745

198,976

Proceeds from sale of business

41,212

Transfer of restricted cash and investments

150

Net cash provided by investing activities

7,871

18,939

CASH FLOWS FROM FINANCING ACTIVITIES:

Principal payments on long-term debt and capital lease obligations

(107)

(88)

Excess tax benefit on equity-based compensation plans

10,404

Treasury stock purchases

(308,422)

(104,285)

Dividends paid

(29,240)

Reissuances of treasury stock related to employee stock purchase plan

16,919

15,154

Proceeds from issuance of common stock

4,609

12,574

Net cash used for financing activities

(305,837)

(76,645)

Effect of exchange rate changes on cash

(2,194)

(508)

Net decrease in cash and cash equivalents

(158,999)

(6,289)

Cash and cash equivalents at beginning of period

1,452,677

^[1]

1,162,473

Cash and cash equivalents at end of period

$ 1,293,678

$ 1,156,184

[1]	Derived from audited financial statements

BASIS OF PRESENTATION

3 Months Ended

Sep. 28, 2014

BASIS OF PRESENTATION

NOTE 1 — BASIS OF PRESENTATION

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements of Lam Research Corporation (“Lam Research” or the “Company”) for the fiscal year ended June 29, 2014, which are included in the Company’s Annual Report on Form 10-K as of and for the year ended June 29, 2014 (the “2014 Form 10-K”). The Company’s Forms 10-K, Forms 10-Q and Forms 8-K are available online at the Securities and Exchange Commission website on the Internet. The address of that site is www.sec.gov. The Company also posts its Forms 10-K, Forms 10-Q and Forms 8-K on its corporate website at http://investor.lamresearch.com.

The consolidated financial statements include the accounts of Lam Research and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s reporting period is a 52/53-week fiscal year. The Company’s current fiscal year will end June 28, 2015 and includes 52 weeks. The quarters ended September 28, 2014 (the “September 2014 quarter”) and September 29, 2013 (the “September 2013 quarter”) included 13 weeks.

RECENT ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Sep. 28, 2014

RECENT ACCOUNTING PRONOUNCEMENTS

NOTE 2 — RECENT ACCOUNTING PRONOUNCEMENTS

In July 2013, the FASB released Accounting Standards Update 2013-11 “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” The new standard requires that an unrecognized tax benefit should be presented as a reduction of a deferred tax asset for a net operating loss carryforward or other tax credit carryforward when settlement in this manner is available under the tax law. The Company adopted this standard during the fiscal quarter without significant impact on its financial position, results of operations, or cash flows.

In April 2014, the FASB released Accounting Standards Update 2014-8 “Presentation of Financial Statements and Property, Plant and Equipment: Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity.” The new standard re-defines discontinued operations and requires only those disposals of components of an entity, including classifications as held for sale, that represent a strategic shift that has, or will have, a major effect on an entity’s operations and financial results to be reported as discontinued operations. In addition, the new standard expands the disclosure requirements of discontinued operations. The Company adopted this standard during the fiscal quarter with no impact on its financial position.

In May 2014, the FASB released Accounting Standards Update 2014-9 “Revenue from Contracts with Customers” to supersede nearly all existing revenue recognition guidance under GAAP. The core principle of the standard is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The new standard defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The Company is required to adopt this standard starting in the first quarter of fiscal year 2018 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within the standard; or (ii) retrospective with the cumulative effect of initially applying the standard recognized at the date of initial application and providing certain additional disclosures as defined per the standard. The Company has not yet selected a transition method, and has not determined the impact that the new standard will have on its consolidated financial statements.

- Definition

The entire disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6507316

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Direct Effects of a Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6510796

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=28359718&loc=d3e22583-107794

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Indirect Effects of a Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6515603

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=28359718&loc=d3e22580-107794

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.10-01.(b)(6))
-URI http://asc.fasb.org/extlink&oid=27015980&loc=d3e46468-122699

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Accounting Change
-URI http://asc.fasb.org/extlink&oid=6503790

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=28359718&loc=d3e22499-107794

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Retrospective Application
-URI http://asc.fasb.org/extlink&oid=6523989

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
-Section 45
-Paragraph 13
-URI http://asc.fasb.org/extlink&oid=6372559&loc=d3e765-108305

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
-Section 45
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=6372559&loc=d3e725-108305

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 01
-Paragraph b
-Subparagraph 6
-Article 10

+ Details

EQUITY-BASED COMPENSATION PLANS

3 Months Ended

Sep. 28, 2014

EQUITY-BASED COMPENSATION PLANS

NOTE 3 — EQUITY-BASED COMPENSATION PLANS

The Company has stock plans that provide for grants of equity-based awards to eligible participants, including stock options and restricted stock units (“RSUs”), of Lam Research common stock (“Common Stock”). An option is a right to purchase Common Stock at a set price. An RSU award is an agreement to issue shares of Common Stock at the time of vesting. The Company’s options and RSU awards typically vest over a period of three years or less, although awards assumed in connection with the acquisition of Novellus Systems, Inc. (“Novellus”), have vesting terms up to four years. The Company also has an employee stock purchase plan that allows employees to purchase its Common Stock at a discount through payroll deductions.

The Company recognized the following equity-based compensation expense and related income tax benefit in the Condensed Consolidated Statements of Operations:


	Three Months Ended
	September 28, 2014		September 29, 2013
	(in millions)
Equity-based compensation expense	$	32.0	$	23.2
Income tax benefit related to equity-based compensation expense	$	4.7	$	3.9

The estimated fair value of the Company’s stock-based awards, less expected forfeitures, is amortized over the awards’ vesting term on a straight-line basis.

Stock Options and RSUs

The Lam Research Corporation 2007 Stock Incentive Plan and 2011 Stock Incentive Plan (collectively the “Stock Plans”) provide for the grant of non-qualified equity-based awards to eligible employees, consultants and advisors, and non-employee directors of the Company and its subsidiaries. A summary of stock plan transactions is as follows:


	Options Outstanding					Restricted Stock Units Outstanding
	Number of Shares			Weighted- Average Exercise Price		Number of Shares			Weighted- Average Fair Market Value at Grant
June 29, 2014		1,331,886		$	32.20		5,635,469		$	45.83
Granted		—		$	—		67,439		$	65.92
Exercised		(165,696	)	$	27.81		N/A			N/A
Cancelled		(7,452	)	$	29.86		(57,295	)	$	44.54
Vested restricted stock		N/A			N/A		(387,148	)	$	41.90

September 28, 2014		1,158,738		$	32.84		5,258,465		$	46.39

As of September 28, 2014, there was $3.4 million of total unrecognized compensation cost related to unvested stock options granted and outstanding; that cost is expected to be recognized over a weighted-average remaining vesting period of 1.5 years. As of September 28, 2014, there was $154.2 million of total unrecognized compensation expense related to unvested RSUs granted; that expense is expected to be recognized over a weighted-average remaining period of 1.8 years.

ESPP

The 1999 Employee Stock Purchase Plan, as amended and restated (the “1999 ESPP”), allows employees to designate a portion of their base compensation to be withheld through payroll deductions and used to purchase Common Stock at a purchase price per share equal to the lower of 85% of the fair market value of Common Stock on the first or last day of the applicable purchase period. Each offering period generally lasts up to 12 months and includes up to three interim purchase dates.

Purchase rights under the 1999 ESPP were valued using the Black-Scholes option valuation model and the following weighted-average assumptions for the three months ended September 28, 2014 and September 29, 2013:


	Three Months Ended
	September 28, 2014			September 29, 2013
Expected term (years)		0.68			0.66
Expected stock price volatility		29.07	%		31.43	%
Risk-free interest rate		0.07	%		0.11	%
Dividend Yield		0.29	%		—

As of September 28, 2014, there was $13.2 million of unrecognized compensation expense related to the 1999 ESPP, which is expected to be recognized over a remaining period of approximately 11 months.

FINANCIAL INSTRUMENTS

3 Months Ended

Sep. 28, 2014

FINANCIAL INSTRUMENTS

NOTE 4 — FINANCIAL INSTRUMENTS

The Company maintains an investment portfolio of various holdings, types, and maturities. The Company’s mutual funds, which are related to the Company’s obligations under the deferred compensation plan, are classified as trading securities. Investments classified as trading securities are recorded at fair value based upon quoted market prices. Differences between the cost and fair value of trading securities are recognized as other income (expense) in the Condensed Consolidated Statements of Operations. All of the Company’s other short-term investments are classified as available-for-sale and consequently are recorded in the Consolidated Balance Sheets at fair value with unrealized gains or losses reported as a separate component of accumulated other comprehensive income (loss), net of tax.

Fair Value

The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability.

A fair value hierarchy has been established that prioritizes the inputs to valuation techniques used to measure fair value. The level of an asset or liability in the hierarchy is based on the lowest level of input that is significant to the fair value measurement. Assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities with sufficient volume and frequency of transactions.

Level 2: Valuations based on observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or model-derived valuations techniques for which all significant inputs are observable in the market or can be corroborated by observable market data, for substantially the full term of the assets or liabilities.

Level 3: Valuations based on unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities and based on non-binding, broker-provided price quotes and may not have been corroborated by observable market data.

The Company’s primary financial instruments include its cash, cash equivalents, short-term investments, restricted cash and investments, long-term investments, accounts receivable, accounts payable, long-term debt and capital leases, and foreign currency related derivatives. The estimated fair value of cash, accounts receivable and accounts payable approximates their carrying value due to the short period of time to their maturities. The estimated fair values of capital lease obligations approximate their carrying value as the substantial majority of these obligations have interest rates that adjust to market rates on a periodic basis. Refer to Note 12 for additional information regarding the fair value of the Company’s convertible notes.

The following table sets forth the Company’s cash, cash equivalents, short-term investments, restricted cash and investments, and other assets measured at fair value on a recurring basis at September 28, 2014 and June 29, 2014:


	September 28, 2014
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Value		(Reported Within)
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Value		Cash and Cash Equivalents		Short-Term Investments		Restricted Cash & Investments		Other Assets
	(in thousands)
Cash	$	286,534	$	—	$	—		$	286,534	$	280,665	$	—	$	5,869		—
Level 1:
Time Deposit		132,549		—		—			132,549		—		—		132,549		—
Money Market Funds		1,013,013		—		—			1,013,013		1,013,013		—		—		—
US Treasury and Agencies		241,522		178		(98	)		241,602		—		230,537		11,065		—
Mutual Funds		20,071		3,635		—			23,706		—		—		—		23,706

Level 1 Total	$	1,407,155	$	3,813	$	(98	)	$	1,410,870	$	1,013,013	$	230,537	$	143,614	$	23,706

Level 2:
Municipal Notes and Bonds		252,846		794		(12	)		253,628		—		253,628		—		—
Government-Sponsored Enterprises		54,449		39		(68	)		54,420		—		54,420		—		—
Foreign Government Bonds		34,192		26		(46	)		34,172		—		34,172		—		—
Corporate Notes and Bonds		888,871		1,194		(1,099	)		888,966		—		888,966		—		—
Mortgage Backed Securities — Residential		24,288		76		(152	)		24,212		—		24,212		—		—
Mortgage Backed Securities — Commercial		108,165		117		(549	)		107,733		—		107,733		—		—

Level 2 Total	$	1,362,811	$	2,246	$	(1,926	)	$	1,363,131	$	—	$	1,363,131	$	—	$	—

Total	$	3,056,500	$	6,059	$	(2,024	)	$	3,060,535	$	1,293,678	$	1,593,668	$	149,483	$	23,706


	June 29, 2014
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Value		(Reported Within)
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Value		Cash and Cash Equivalents		Short-Term Investments		Restricted Cash & Investments		Other Assets
	(in thousands)
Cash	$	285,031	$	—	$	—		$	285,031	$	279,126	$	—	$	5,905		—
Level 1:
Time Deposit		132,549		—		—			132,549		—		—		132,549		—
Money Market Funds		1,168,261		—		—			1,168,261		1,168,261		—		—		—
US Treasury and Agencies		212,436		178		(27	)		212,587		—		204,549		8,038		—
Mutual Funds		18,784		2,974		—			21,758		—		—		—		21,758

Level 1 Total	$	1,532,030	$	3,152	$	(27	)	$	1,535,155	$	1,168,261	$	204,549	$	140,587	$	21,758

Level 2:
Municipal Notes and Bonds		334,329		1,108		(4	)		335,433		5,290		330,143		—		—
Government-Sponsored Enterprises		27,666		41		(15	)		27,692		—		27,692		—		—
Foreign Government Bonds		35,438		57		(28	)		35,467		—		35,467		—		—
Corporate Notes and Bonds		874,540		2,034		(335	)		876,239		—		876,239		—		—
Mortgage Backed Securities — Residential		27,067		59		(182	)		26,944		—		26,944		—		—
Mortgage Backed Securities — Commercial		112,642		100		(809	)		111,933		—		111,933		—		—

Level 2 Total	$	1,411,682	$	3,399	$	(1,373	)	$	1,413,708	$	5,290	$	1,408,418	$	—	$	—

Total	$	3,228,743	$	6,551	$	(1,400	)	$	3,233,894	$	1,452,677	$	1,612,967	$	146,492	$	21,758

The Company accounts for its investment portfolio at fair value. Realized gains (losses) for investment sales are specifically identified. Management assesses the fair value of investments in debt securities that are not actively traded through consideration of interest rates and their impact on the present value of the cash flows to be received from the investments. The Company also considers whether changes in the credit ratings of the issuer could impact the assessment of fair value. The Company did not recognize any losses on investments due to other-than-temporary impairments during the three months ended September 28, 2014 or September 29, 2013. Additionally, gross realized gains and gross realized (losses) from sales of investments were approximately $0.5 million and $(0.6) million, respectively, in the three months ended September 28, 2014 and $0.2 million and $(0.6) million, respectively, in the three months ended September 29, 2013.

The following is an analysis of the Company’s cash, cash equivalents, short-term investments and restricted cash and investments in unrealized loss positions:


	September 28, 2014
	Unrealized Losses Less Than 12 Months					Unrealized Losses 12 Months or Greater					Total
	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
	(in thousands)
Municipal Notes and Bonds	$	13,717	$	(12	)	$	—	$	—		$	13,717	$	(12	)
US Treasury & Agencies		58,326		(98	)		—		—			58,326		(98	)
Government-Sponsored Enterprises		36,960		(68	)		—		—			36,960		(68	)
Foreign Government Bonds		20,566		(46	)		—		—			20,566		(46	)
Corporate Notes and Bonds		431,132		(1,072	)		3,525		(27	)		434,657		(1,099	)
Mortgage Backed Securities — Residential		4,252		(83	)		4,487		(69	)		8,739		(152	)
Mortgage Backed Securities — Commercial		69,068		(308	)		19,362		(241	)		88,430		(549	)

	$	634,021	$	(1,687	)	$	27,374	$	(337	)	$	661,395	$	(2,024	)

The amortized cost and fair value of cash equivalents, short-term investments and restricted investments with contractual maturities are as follows as of September 28, 2014:


	Cost		Estimated Fair Value
	(in thousands)
Due in one year or less	$	1,312,967	$	1,313,292
Due after one year through five years		1,138,825		1,139,517
Due in more than five years		298,103		297,486

	$	2,749,895	$	2,750,295

Management has the ability, if necessary, to liquidate its investments in order to meet the Company’s liquidity needs in the next 12 months. Accordingly, those investments with contractual maturities greater than one year from the date of purchase nonetheless are classified as short-term on the accompanying Consolidated Balance Sheets.

Derivative Instruments and Hedging

The Company carries derivative financial instruments (“derivatives”) on its Consolidated Balance Sheets at their fair values. The Company enters into foreign currency forward contracts with financial institutions with the primary objective of reducing volatility of earnings and cash flows related to foreign currency exchange rate fluctuations. The counterparties to these forward contracts are large global financial institutions that the Company believes are creditworthy, and therefore, it does not consider the risk of counterparty nonperformance to be material.

Cash Flow Hedges

The Company’s financial position is routinely subjected to market risk associated with foreign currency exchange rate fluctuations on non-U.S. dollar transactions or cash flows, primarily from Japanese yen-denominated revenues and euro-denominated expenses. The Company’s policy is to mitigate the foreign exchange risk arising from the fluctuations in the value of these non-U.S. dollar denominated transactions or cash flows through a foreign currency cash flow hedging program, using forward contracts that generally expire within 12 months and no later than 24 months. These foreign currency forward contracts are designated as cash flow hedges and are carried on the Company’s balance sheet at fair value with the effective portion of the contracts’ gains or losses included in accumulated other comprehensive income (loss) and subsequently recognized in revenue/expense in the same period the hedged items are recognized.

At inception and at each quarter end, hedges are tested prospectively and retrospectively for effectiveness using regression analysis. Changes in the fair value of the forward contracts due to changes in time value are excluded from the assessment of effectiveness and are recognized in revenue or expense in the current period. The change in time value related to these contracts was not material for all reported periods. To qualify for hedge accounting, the hedge relationship must meet criteria relating both to the derivative instrument and the hedged item. These criteria include identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the hedging instrument’s effectiveness in offsetting the exposure to changes in the hedged item’s fair value or cash flows will be measured. There were no gains or losses during the three months ended September 28, 2014 or September 29, 2013 associated with ineffectiveness or forecasted transactions that failed to occur.

To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge and the hedges must be tested to demonstrate an expectation of providing highly effective offsetting changes to future cash flows on hedged transactions. When derivative instruments are designated and qualify as effective cash flow hedges, the Company recognizes effective changes in the fair value of the hedging instrument within accumulated other comprehensive income (loss) until the hedged exposure is realized. Consequently, with the exception of excluded time value and hedge ineffectiveness recognized, the Company’s results of operations are not subject to fluctuation as a result of changes in the fair value of the derivative instruments. If hedges are not highly effective or if the Company does not believe that the underlying hedged forecasted transactions will occur, the Company may not be able to account for its derivative instruments as cash flow hedges. If this were to occur, future changes in the fair values of the Company’s derivative instruments would be recognized in earnings. Additionally, related amounts previously recorded in other comprehensive income would be reclassified to income immediately. At September 28, 2014, the Company had gains of $0.1 million accumulated in other comprehensive income, which it expects to reclassify from other comprehensive income into earnings over the next 12 months.

Balance Sheet Hedges

The Company also enters into foreign currency forward contracts to hedge fluctuations associated with foreign currency denominated monetary assets and liabilities, primarily third party accounts receivables, accounts payables and intercompany receivables and payables. These forward contracts are not designated for hedge accounting treatment. Therefore, the change in fair value of these derivatives is recorded as a component of other income (expense) and offsets the change in fair value of the foreign currency denominated assets and liabilities, which are also recorded in other income (expense).

As of September 28, 2014, the Company had the following outstanding foreign currency forward contracts that were entered into under its cash flow and balance sheet hedge program:


	Derivatives Designated as Hedging Instruments:				Derivatives Not Designated as Hedging Instruments:
	(in thousands)
Foreign Currency Forward Contracts
	Buy Contracts		Sell Contracts		Buy Contracts		Sell Contracts
Japanese Yen	$	—	$	58,868	$	—	$	21,379
Swiss Franc		—		—		6,684		—
Euro		59,270		—		22,430		—
Korean Won		—		—		12,564		—
Taiwan Dollar		—		—		33,487		—

	$	59,270	$	58,868	$	75,165	$	21,379

The fair value of derivative instruments in the Company’s Consolidated Balance Sheets as of September 28, 2014 and June 29, 2014 were as follows:

September 28, 2014

June 29, 2014

Fair Value of Derivative Instruments (Level 2)

Asset Derivatives

Liability Derivatives

Asset Derivatives

Liability Derivatives

Balance Sheet
Location

Fair Value

Balance Sheet
Location

Fair Value

Balance Sheet
Location

Fair Value

Balance Sheet
Location

Fair Value

(in thousands)

Derivatives designated as hedging instruments:

Foreign exchange forward contracts

Prepaid expense
and other assets

3,059

Accrued
liabilities

3,069

Prepaid expense
and other assets

483

Accrued
liabilities

805

Derivatives not designated as hedging instruments:

Foreign exchange forward contracts

Prepaid expense
and other assets

Accrued
liabilities

515

Prepaid expense
and other assets

1,109

Accrued
liabilities

118

Total derivatives

3,067

3,584

1,592

923

Under the master netting agreements with the respective counterparties to the Company’s foreign exchange contracts, subject to applicable requirements, the Company is allowed to net settle transactions of the same currency with a single net amount payable by one party to the other. However, the Company has elected to present the derivative assets and derivative liabilities on a gross basis in its balance sheet. As of September 28, 2014, the potential effect of netting the above foreign exchange contracts would be an offset to assets and liabilities by $1.7 million, resulting in a net derivative asset of $1.4 million and net derivative liabilities of $1.9 million. As of June 29, 2014, the potential effect of netting the above foreign exchange contracts was an offset to both assets and liabilities by $0.5 million, resulting in a net derivative asset of $1.1 million and net derivative liabilities of $0.5 million. The Company is not required to pledge, nor is the Company entitled to receive, cash collateral for these derivative transactions.

The effect of derivative instruments designated as cash flow hedges on the Company’s Condensed Consolidated Statements of Operations, including accumulated other comprehensive income (“AOCI”) was as follows:


	Three Months Ended September 28, 2014									Three Months Ended September 29, 2013
	Effective Portion						Ineffective Portion and Amount Excluded from Effectiveness Testing			Effective Portion				Ineffective Portion and Amount Excluded from Effectiveness Testing
Location of Gain (Loss) Recognized in or Reclassified into Income	Gain (Loss) Recognized in AOCI			Gain (Loss) Reclassified from AOCI into Income			Gain (Loss) Recognized in Income			Gain (Loss) Recognized in AOCI		Gain (Loss) Reclassified from AOCI into Income		Gain (Loss) Recognized in Income
	(in thousands)									(in thousands)
Revenue	$	3,024		$	469		$	42		$	4,878	$	3,383	$	93
Cost of goods sold		(2,023	)		(276	)		(6	)		149		651		(32	)
Selling, general, and administrative		(866	)		(105	)		(1	)		48		317		(15	)

	$	135		$	88		$	35		$	5,075	$	4,351	$	46

The effect of derivative instruments not designated as cash flow hedges on the Company’s Condensed Consolidated Statements of Operations was as follows:


		Three Months Ended
		September 28, 2014		September 29, 2013
Derivatives Not Designated as Hedging Instruments:	Location of Gain Recognized in Income	Gain Recognized in Income		Gain Recognized in Income
		(in thousands)
Foreign Exchange Contracts	Other income	$	968	$	6,027

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term investments, restricted cash and investments, trade accounts receivable, and derivative financial instruments used in hedging activities. Cash is placed on deposit at large global financial institutions. Such deposits may be in excess of insured limits. Management believes that the financial institutions that hold the Company’s cash are creditworthy and, accordingly, minimal credit risk exists with respect to these balances.

The Company’s overall portfolio of available-for-sale securities must maintain an average minimum rating of “AA-” or “Aa3” as rated by Standard and Poor’s or Moody’s Investor Services, respectively. To ensure diversification and minimize concentration, the Company’s policy limits the amount of credit exposure with any one financial institution or commercial issuer.

The Company is exposed to credit losses in the event of nonperformance by counterparties on the foreign currency forward hedge contracts and on structured share repurchase arrangements. These counterparties are large global financial institutions and, to date, no such counterparty has failed to meet its financial obligations to the Company.

Credit risk evaluations, including trade references, bank references and Dun & Bradstreet ratings, are performed on all new customers and the Company monitors its customers’ financial condition and payment performance. In general, the Company does not require collateral on sales.

INVENTORIES

3 Months Ended

Sep. 28, 2014

INVENTORIES

NOTE 5 — INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out method) or market. System shipments to Japanese customers, for which title does not transfer until customer acceptance, are classified as finished goods inventory and carried at cost until title transfers. Inventories consist of the following:


	September 28, 2014		June 29, 2014
	(in thousands)
Raw materials	$	497,058	$	449,623
Work-in-process		121,804		126,564
Finished goods		196,750		164,316

	$	815,612	$	740,503

GOODWILL AND INTANGIBLE ASSETS

3 Months Ended

Sep. 28, 2014

GOODWILL AND INTANGIBLE ASSETS

NOTE 6 — GOODWILL AND INTANGIBLE ASSETS

Goodwill

There were no significant changes in the goodwill balance during the three months ended September 28, 2014. Of the $1.5 billion goodwill balance, $61 million is tax deductible and the remaining balance is not tax deductible due to purchase accounting and applicable foreign law.

Intangible Assets

The following table provides the Company’s intangible assets as of September 28, 2014:


	Gross		Accumulated Amortization			Net
	(in thousands)
Customer relationships	$	615,549	$	(185,615	)	$	429,934
Existing technology		643,779		(246,484	)		397,295
Patents		32,053		(24,925	)		7,128
Other intangible assets		35,670		(35,293	)		377

Intangible assets subject to amortization		1,327,051		(492,317	)		834,734
In process research and development		11,000					11,000
Development rights		9,100					9,100

Intangible assets not subject to amortization		20,100					20,100

Total intangible assets	$	1,347,151	$	(492,317	)	$	854,834

The following table provides the Company’s intangible assets as of June 29, 2014:


	Gross		Accumulated Amortization			Net
	(in thousands)
Customer relationships	$	615,618	$	(169,162	)	$	446,456
Existing technology		643,922		(224,246	)		419,676
Patents		32,253		(24,407	)		7,846
Other intangible assets		35,270		(35,270	)		—

Intangible assets subject to amortization		1,327,063		(453,085	)		873,978
In process research and development		11,000					11,000
Development rights		9,100					9,100

Intangible assets not subject to amortization		20,100					20,100

Total intangible assets	$	1,347,163	$	(453,085	)	$	894,078

The Company recognized $39.2 million and $41.6 million in intangible asset amortization expense during the three months ended September 28, 2014, and September 29, 2013, respectively.

The estimated future amortization expense of intangible assets, excluding those with indefinite lives, as of September 28, 2014 was as follows:


Fiscal Year	Amount
2015 (9 Months)	$	117,482
2016		154,130
2017		152,427
2018		151,215
2019		120,285
Thereafter		139,195

	$	834,734

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

3 Months Ended

Sep. 28, 2014

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

NOTE 7 — ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following:


	September 28, 2014		June 29, 2014
	(in thousands)
Accrued compensation	$	318,330	$	311,054
Warranty reserves		70,185		68,324
Income and other taxes payable		45,452		93,934
Dividend payable		29,381		29,240
Other		115,620		101,744

	$	578,968	$	604,296

OTHER EXPENSE, NET

3 Months Ended

Sep. 28, 2014

OTHER EXPENSE, NET

NOTE 8 — OTHER EXPENSE, NET

The significant components of other expense, net, are as follows:


	Three Months Ended
	September 28, 2014			September 29, 2013
	(in thousands)
Interest income	$	3,288		$	2,723
Interest expense		(15,704	)		(15,302	)
Gains on deferred compensation plan related assets		2,416			37
Foreign exchange gains (losses)		906			(222	)
Other, net		3,446			(1,498	)

	$	(5,648	)	$	(14,262	)

During the three months ended September 28, 2014, the Company sold all of Peter Wolters, a wholly owned subsidiary acquired as part of the Novellus acquisition. Net pre-tax gain of $7.3 million associated with this divestiture is included in other expense, net in the Condensed Consolidated Statements of Operations.

INCOME TAX EXPENSE

3 Months Ended

Sep. 28, 2014

INCOME TAX EXPENSE

NOTE 9 — INCOME TAX EXPENSE

The Company recorded an income tax expense of $21.6 million, which yielded an effective tax rate for the quarter ended September 28, 2014 of approximately 13.3%. The difference between the U.S. federal statutory tax rate of 35% and the Company’s effective tax rate for the quarter ended September 28, 2014 is primarily due to the geographic mix of income and the treatment of discrete items in determining the effective tax rate, offset by the tax effect of non-deductible stock-based compensation and unrecognized tax benefits due to uncertain tax positions.

NET INCOME PER SHARE

3 Months Ended

Sep. 28, 2014

NET INCOME PER SHARE

NOTE 10 — NET INCOME PER SHARE

Basic net income per share is computed by dividing net income by the weighted-average number of shares of Common Stock outstanding during the period. Diluted net income per share is computed using the treasury stock method, for dilutive stock options, RSUs, and convertible notes. Dilutive shares outstanding include the effect of the 2016, 2018 and 2041 Notes. The following table reconciles the numerators and denominators of the basic and diluted computations for net income per share.


	Three Months Ended
	September 28, 2014		September 29, 2013
	(in thousands, except per share data)
Numerator:
Net income	$	141,081	$	85,506


Denominator:
Basic average shares outstanding		161,685		162,896
Effect of potential dilutive securities:
Employee stock plans		3,560		2,868
Convertible notes		11,867		5,599
Warrants		6		—

Diluted average shares outstanding		177,118		171,363

Net income per share — basic	$	0.87	$	0.52

Net income per share — diluted	$	0.80	$	0.50

For purposes of computing diluted net income per share, weighted-average common shares do not include potentially dilutive securities that are anti-dilutive under the treasury stock method. The following potentially dilutive securities were excluded:


	Three Months Ended
	September 28, 2014		September 29, 2013
	(in thousands)
Number of potential dilutive securities excluded		—		290

Diluted shares outstanding do not include any effect resulting from the note hedges associated with the Company’s 2016 or 2018 Notes (as described in Note 12) as their impact would have been anti-dilutive.

ACCUMULATED OTHER COMPREHENSIVE LOSS

3 Months Ended

Sep. 28, 2014

ACCUMULATED OTHER COMPREHENSIVE LOSS

NOTE 11 — ACCUMULATED OTHER COMPREHENSIVE LOSS

The components of accumulated other comprehensive income (loss), net of tax at the end of the period, as well as the activity during the period, were as follows:


	Accumulated foreign currency translation adjustment			Accumulated unrealized holding gain (loss) on cash flow hedges			Accumulated unrealized holding gain (loss) on available- for-sale investments			Accumulated unrealized components of defined benefit plans			Total
	(in thousands)
Balance as of June 29, 2014	$	(12,986	)	$	(66	)	$	1,557		$	(17,160	)	$	(28,655	)
Other comprehensive income before reclassifications		(5,564	)		298			(1,759	)		66			(6,959	)
(Losses) gains reclassified from accumulated other comprehensive income to net income		(3,395	)		(102	)⁽¹⁾		379	⁽²⁾		—			(3,118	)

Net current-period other comprehensive income	$	(8,959	)	$	196		$	(1,380	)	$	66		$	(10,077	)

Balance as of September 28, 2014	$	(21,945	)	$	130		$	177		$	(17,094	)	$	(38,732	)

(1)	Amount of after tax gain reclassified from accumulated other comprehensive income into net income located in revenue: $441 gain, cost of goods sold: $250 loss and selling, general and administrative expenses: $89 loss.

(2)	Amount of after tax gain reclassified from accumulated other comprehensive income into net income located in other expense, net

- Definition

The entire disclosure for comprehensive income, which includes, but is not limited to, 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=36458714&loc=d3e689-108580

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=36458714&loc=SL7669619-108580

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=36458714&loc=d3e640-108580

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 17
-URI http://asc.fasb.org/extlink&oid=36458714&loc=d3e716-108580

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=36458714&loc=d3e709-108580

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=36458714&loc=d3e637-108580

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=36458714&loc=d3e681-108580

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Reclassification Adjustments
-URI http://asc.fasb.org/extlink&oid=6522872

+ Details

LONG-TERM DEBT AND OTHER BORROWINGS

3 Months Ended

Sep. 28, 2014

LONG-TERM DEBT AND OTHER BORROWINGS

NOTE 12 — LONG-TERM DEBT AND OTHER BORROWINGS

Convertible Senior Notes

In May 2011, the Company issued and sold $450.0 million in aggregate principal amount of 0.50% Convertible Senior Notes due May 2016 (the “2016 Notes”) at par. At the same time, the Company issued and sold $450.0 million in aggregate principal amount of 1.25% Convertible Senior Notes due May 2018 (the “2018 Notes”) at par. The Company pays cash interest at an annual rate of 0.5% and 1.25%, respectively, on the 2016 Notes and the 2018 Notes, on a semi-annual basis on May 15 and November 15 of each year.

In June 2012, with the acquisition of Novellus, the Company assumed $700.0 million in aggregate principal amount of 2.625% Convertible Senior Notes due May 2041 (the “2041 Notes,” and collectively with the 2016 Notes and the 2018 Notes, the “Notes”). The Company pays cash interest at an annual rate of 2.625%, on a semi-annual basis on May 15 and November 15 of each year. The 2041 Notes also have a contingent interest payment provision that may require the Company to pay additional interest based on certain thresholds, beginning with the semi-annual interest payment on May 15, 2021, and upon the occurrence of certain events, as outlined in the indenture governing the 2041 Notes. The maximum amount of the contingent interest will accrue at a rate of 2.1% per annum, excluding any potential impact from dividends deemed payable to holders of the 2041 Notes.

The Company separately accounts for the liability and equity components of the Notes. The initial debt components of the 2016 Notes, the 2018 Notes, and the 2041 Notes were valued based on the present value of the future cash flows using the Company’s borrowing rate at the date of the issuance or assumption for similar debt instruments without the conversion feature; which equals the effective interest rate on the liability component disclosed in the following table, respectively.

As of September 28, 2014 and June 29, 2014, the Notes consisted of the following:


	September 28, 2014									June 29, 2014
	2016 Notes			2018 Notes			2041 Notes⁽¹⁾			2016 Notes		2018 Notes		2041 Notes⁽¹⁾
	(in thousands, except years, percentages, conversion rate, and conversion price)
Carrying value, long-term	$	423,481		$	391,011		$	—		$	419,561	$	387,338	$	—
Carrying value, current portion		—			—			517,503			—		—		516,586
Unamortized discount		26,519			58,989			182,432			30,439		62,662		183,349

Principal amount	$	450,000		$	450,000		$	699,935		$	450,000	$	450,000	$	699,935


Remaining amortization period (years)		1.6			3.6			26.7
Effective interest rate on liability component		4.29	%		5.27	%		4.28	%

Carrying amount of equity component, net of tax	$	76,230		$	104,895		$	328,109
Fair Value of Notes (Level 1)	$	573,525		$	610,205		$	1,542,041
Conversion rate (shares of common stock per $1,000 principal amount of notes)		15.9527			15.9527			28.6288
Conversion price (per share of common stock)	$	62.69		$	62.69		$	34.93
If-converted value in excess of par value	$	89,911		$	89,911		$	807,144

(1)

During the quarter-ended September 28, 2014 and June 29, 2014 the market value of the Common Stock was greater than or equal to 130% of the 2041 Note conversion price for 20 or more trading days of the 30 consecutive trading days preceding the quarter end. As a result, the 2041 Notes are convertible at the option of the holder. The carrying amount of the 2041 Notes was classified in current liabilities and the excess of the amount of cash payable, if converted, over the carrying amount of the 2041 Notes was classified as temporary equity in the Company’s Consolidated Balance Sheets as of September 28, 2014 and June 29, 2014. Upon closure of a conversion period, all 2041 Notes not converted will be reclassified back to noncurrent liabilities and the temporary equity is reclassified to permanent equity.

The following table presents the amount of interest cost recognized relating to both the contractual interest coupon and amortization of the discount on the liability component of the Notes during the three months ended September 28, 2014 and September 29, 2013.


	Three Months Ended
	September 28, 2014		September 29, 2013
	(in thousands)
Contractual interest coupon	$	6,562	$	6,562
Amortization of interest discount		8,509		8,122
Amortization of issuance costs		591		591

Total interest cost recognized	$	15,662	$	15,275

Convertible Note Hedges and Warrants

Concurrent with the issuance of the 2016 Notes and 2018 Notes, the Company sold warrants. At expiration, the Company may, at its option, elect to settle the warrants on a net share basis. As of September 28, 2014, the warrants had not been exercised and remained outstanding. The exercise price is adjusted for certain corporate events, including dividends on the Company’s Common Stock.

In addition, counterparties agreed to sell to the Company shares of Common Stock equal to the number of shares issuable upon conversion of the 2016 Notes and 2018 Notes in full. The convertible note hedge transactions will be settled in net shares and will terminate upon the earlier of the maturity date or the first day none of the respective notes remain outstanding due to conversion or otherwise. Settlement of the convertible note hedge in net shares, based on the number of shares issued upon conversion of the Notes, on the expiration date would result in the Company receiving net shares equivalent to the number of shares issuable by the Company upon conversion of the 2016 Notes and 2018 Notes. The exercise price is adjusted for certain corporate events, including dividends on the Company’s Common Stock. The following table presents the details of the warrants and convertible note hedge arrangements as of September 28, 2014:


	2016 Notes		2016 Notes
	(shares in thousands)
Warrants:
Number of shares to be delivered upon exercise		7,179		7,179
Exercise price	$	70.96	$	75.70
Expiration date range		August 15 - October 21, 2016		August 15 - October 23, 2018

Convertible Note Hedge:
Number of shares available from counterparties		7,179		7,179
Exercise price	$	62.69	$	62.69

Revolving Credit Facility

On March 12, 2014 the Company entered into a $300 million revolving unsecured credit facility with a syndicate of lenders that matures on March 12, 2019. The facility includes an option for the Company to, subject to certain requirements, request an increase in the facility of up to an additional $200 million, for a potential total commitment of $500 million. Proceeds from the credit facility can be used for general corporate purposes.

Interest on amounts borrowed under the credit facility is, at the Company’s option, based on (i) a base rate, defined as the greatest of (a) prime rate, (b) Federal Funds rate plus 0.5%, or (c) one-month LIBOR plus 1.0%, plus a spread of 0.0% to 0.5%, or (ii) LIBOR plus a spread of 0.9% to 1.5%, in each case as the applicable spread is determined based on the rating of the Company’s non-credit enhanced, senior unsecured long-term debt. Principal and any accrued and unpaid interest, is due and payable upon maturity. Additionally, the Company will pay the lenders a quarterly commitment fee that varies based on the Company’s rating described above. The credit facility contains certain restrictive covenants including maintaining a total consolidated indebtedness to consolidated capitalization ratio of no more than 0.5 to 1.0 and maintaining unrestricted or unencumbered cash and investments of no less than $1.0 billion. As of September 28, 2014, the Company had no borrowings outstanding under the credit facility and was in compliance with all financial covenants.

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Sep. 28, 2014

COMMITMENTS AND CONTINGENCIES

NOTE 13 — COMMITMENTS AND CONTINGENCIES

Operating Leases and Related Guarantees

The Company leases certain of its administrative, research and development (“R&D”) and manufacturing facilities, regional sales/service offices and certain equipment under non-cancelable operating leases. Certain of the Company’s facility leases for buildings located at its Fremont, California headquarters and certain other facility leases provide the Company with options to extend the leases for additional periods or to purchase the facilities. Certain of the Company’s facility leases provide for periodic rent increases based on the general rate of inflation.

The Company has operating leases regarding certain improved properties in Fremont and Livermore, California (the “Operating Leases”). The Company was required to maintain cash collateral in an aggregate of approximately $132.5 million in separate interest-bearing accounts, and marketable securities collateral in an aggregate of approximately $11.1 million as security for the Company’s obligations. These amounts are recorded as restricted cash and investments in the Company’s Consolidated Balance Sheet as of September 28, 2014.

During the term of the Operating Leases and when the terms of the Operating Leases expire, the property subject to those Operating Leases may be remarketed. The Company has guaranteed to the lessor that each property will have a certain minimum residual value. The aggregate guarantee made by the Company under the Operating Leases is generally no more than approximately $191.2 million; however, under certain default circumstances, the guarantee with regard to an Operating Lease may be 100% of the lessor’s aggregate investment in the applicable property, which in no case will exceed $220.0 million, in the aggregate.

The Company’s contractual cash obligations with respect to operating leases, excluding the residential value guarantee discussed above, as of September 28, 2014 were as follows:


	Operating Leases
	(in thousands)
Payments due by period:
One year	$	15,203
Two years		13,528
Three years		11,761
Four years		5,241
Five years		4,395
Over five years		13,850
Less: Sublease Income		(639	)

Total	$	63,339

Other Guarantees

The Company has issued certain indemnifications to its lessors for taxes and general liability under some of its agreements. The Company has entered into certain insurance contracts that may limit its exposure to such indemnifications. As of September 28, 2014, the Company had not recorded any liability in connection with these indemnifications, as it does not believe, based on information available, that it is probable that any amounts will be paid under these guarantees.

Generally, the Company indemnifies, under pre-determined conditions and limitations, its customers for infringement of third-party intellectual property rights by the Company’s products or services. The Company seeks to limit its liability for such indemnity to an amount not to exceed the sales price of the products or services subject to its indemnification obligations. The Company does not believe, based on information available, that it is probable that any material amounts will be paid under these guarantees.

The Company provides guarantees and standby letters of credit to certain parties as required for certain transactions initiated during the ordinary course of business. As of September 28, 2014, the maximum potential amount of future payments that it could be required to make under these arrangements and letters of credit was $14.8 million. The Company does not believe, based on historical experience and information currently available, that it is probable that any amounts will be required to be paid.

Warranties

The Company provides standard warranties on its systems. The liability amount is based on actual historical warranty spending activity by type of system, customer, and geographic region, modified for any known differences such as the impact of system reliability improvements.

Changes in the Company’s product warranty reserves were as follows:


	Three Months Ended
	September 28, 2014			September 29, 2013
	(in thousands)
Balance at beginning of period	$	69,385		$	58,078
Warranties issued during the period		24,536			16,753
Settlements made during the period		(24,068	)		(14,305	)
Changes in liability for pre-existing warranties		599			(655	)

Balance at end of period	$	70,452		$	59,871

Legal proceedings

The Company is either a defendant or plaintiff in various actions that have arisen from time to time in the normal course of business, including intellectual property claims. The Company accrues for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Significant judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable. To the extent there is a reasonable possibility that the losses could exceed the amounts already accrued, the Company believes that the amount of any such additional loss would be immaterial to the Company’s business, financial condition, and results of operations.

STOCK REPURCHASE PROGRAM

3 Months Ended

Sep. 28, 2014

STOCK REPURCHASE PROGRAM

NOTE 14 — STOCK REPURCHASE PROGRAM

On April 29, 2014, the Board of Directors authorized the repurchase of up to $850 million of Common Stock, which includes the remaining value available under the Company’s prior authorization. These repurchases can be conducted on the open market or as private purchases and may include the use of derivative contracts with large financial institutions, in all cases subject to compliance with applicable law. Repurchases will be funded using the Company’s on-shore cash and on-shore cash generation. This repurchase program has no termination date and may be suspended or discontinued at any time.

Repurchases under the repurchase program were as follows during the periods indicated:


Period	Total Number of Shares Repurchased		Total Cost of Repurchase		Average Price Paid Per Share*		Amount Available Under Repurchase Program
	(in thousands, except per share data)
Available balance as of June 29, 2014							$	830,895
Quarter ended September 28, 2014		3,818	$	296,721	$	70.01	$	534,174

Average price paid per share excludes accelerated share repurchases for which cost was incurred during the September 2014 quarter, but that did not settle until the December 2014 quarter. See Collared Accelerated Share Repurchase section below for details regarding average price associated with these transactions.

In addition to shares repurchased under the Board-authorized repurchase program shown above, during the three months ended September 28, 2014, the Company acquired 120,575 shares at a total cost of $8.3 million, which the Company withheld through net share settlements to cover minimum tax withholding obligations upon the vesting of restricted stock unit awards granted under the Company’s equity compensation plans. The shares retained by the Company through these net share settlements are not a part of the Board-authorized repurchase program but instead are authorized under the Company’s equity compensation plans.

As part of its share repurchase program, the Company may from time-to-time enter into structured share repurchase arrangements with financial institutions using general corporate funds. Such arrangements entered into or settled during the three months ended September 28, 2014 included the following:

Collared Accelerated Share Repurchases

During the three months ended September 28, 2014, the Company entered into a collared accelerated share repurchase (“ASR”) transaction under a master repurchase arrangement. Under the ASR, the Company made an up-front cash payment of $250 million, in exchange for an initial delivery of approximately 3.2 million shares of its Common Stock.

The number of shares to ultimately be repurchased by the Company is based generally on the volume-weighted average price (“VWAP”) of the Common Stock during the term of the ASR minus a pre-determined discount set at inception of the ASR, subject to collar provisions that provided a minimum and maximum number of shares that the Company could repurchase under the agreements. The minimum and maximum thresholds for the transaction were established based on the average of the VWAP prices for the Common Stock during an initial hedge period. The ASR was scheduled to end at any time on or after October 8, 2014 and on or before December 8, 2014. At the conclusion of the ASR, the Company could potentially receive additional shares based on the VWAP of the Common Stock during the term of the agreement minus the pre-determined fixed discount.

The counterparty designated October 9, 2014 as the termination date, at which time the Company settled the ASR. Approximately 0.3 million shares were received at final settlement, which represented a weighted-average share price of approximately $72.90 for the transaction period.

The Company accounted for the ASR as two separate transactions: (a) as shares of Common Stock acquired in a treasury stock transaction recorded on the acquisition date and (b) as a forward contract indexed to the Company’s own Common Stock and classified in stockholders’ equity. As such, the Company accounted for the shares that it received under the ASR as a repurchase of its Common Stock for the purpose of calculating earnings per common share. The Company has determined that the forward contract indexed to the Common Stock met all of the applicable criteria for equity classification in accordance with the Derivatives and Hedging topic of the FASB Accounting Standards Codification, and, therefore, the ASR was not accounted for as a derivative instrument. As of September 28, 2014, the aggregate repurchase price of $250 million was reflected as Treasury stock, at cost, in the Consolidated Balance Sheet.

EQUITY-BASED COMPENSATION PLANS (Tables)

3 Months Ended

Sep. 28, 2014

Recognized Equity Based Compensation Expense and Related Income Tax Benefit

The Company recognized the following equity-based compensation expense and related income tax benefit in the Condensed Consolidated Statements of Operations:


	Three Months Ended
	September 28, 2014		September 29, 2013
	(in millions)
Equity-based compensation expense	$	32.0	$	23.2
Income tax benefit related to equity-based compensation expense	$	4.7	$	3.9

Summary of Stock Plan Activity

A summary of stock plan transactions is as follows:


	Options Outstanding					Restricted Stock Units Outstanding
	Number of Shares			Weighted- Average Exercise Price		Number of Shares			Weighted- Average Fair Market Value at Grant
June 29, 2014		1,331,886		$	32.20		5,635,469		$	45.83
Granted		—		$	—		67,439		$	65.92
Exercised		(165,696	)	$	27.81		N/A			N/A
Cancelled		(7,452	)	$	29.86		(57,295	)	$	44.54
Vested restricted stock		N/A			N/A		(387,148	)	$	41.90

September 28, 2014		1,158,738		$	32.84		5,258,465		$	46.39

Schedule of ESPP Weighted-Average Assumptions


	Three Months Ended
	September 28, 2014			September 29, 2013
Expected term (years)		0.68			0.66
Expected stock price volatility		29.07	%		31.43	%
Risk-free interest rate		0.07	%		0.11	%
Dividend Yield		0.29	%		—

FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Sep. 28, 2014

Cash, Cash Equivalents, Short-Term Investments, Restricted Cash and Investments and Other Assets Measured at Fair Value on Recurring Basis


	September 28, 2014
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Value		(Reported Within)
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Value		Cash and Cash Equivalents		Short-Term Investments		Restricted Cash & Investments		Other Assets
	(in thousands)
Cash	$	286,534	$	—	$	—		$	286,534	$	280,665	$	—	$	5,869		—
Level 1:
Time Deposit		132,549		—		—			132,549		—		—		132,549		—
Money Market Funds		1,013,013		—		—			1,013,013		1,013,013		—		—		—
US Treasury and Agencies		241,522		178		(98	)		241,602		—		230,537		11,065		—
Mutual Funds		20,071		3,635		—			23,706		—		—		—		23,706

Level 1 Total	$	1,407,155	$	3,813	$	(98	)	$	1,410,870	$	1,013,013	$	230,537	$	143,614	$	23,706

Level 2:
Municipal Notes and Bonds		252,846		794		(12	)		253,628		—		253,628		—		—
Government-Sponsored Enterprises		54,449		39		(68	)		54,420		—		54,420		—		—
Foreign Government Bonds		34,192		26		(46	)		34,172		—		34,172		—		—
Corporate Notes and Bonds		888,871		1,194		(1,099	)		888,966		—		888,966		—		—
Mortgage Backed Securities — Residential		24,288		76		(152	)		24,212		—		24,212		—		—
Mortgage Backed Securities — Commercial		108,165		117		(549	)		107,733		—		107,733		—		—

Level 2 Total	$	1,362,811	$	2,246	$	(1,926	)	$	1,363,131	$	—	$	1,363,131	$	—	$	—

Total	$	3,056,500	$	6,059	$	(2,024	)	$	3,060,535	$	1,293,678	$	1,593,668	$	149,483	$	23,706


	June 29, 2014
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Value		(Reported Within)
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Value		Cash and Cash Equivalents		Short-Term Investments		Restricted Cash & Investments		Other Assets
	(in thousands)
Cash	$	285,031	$	—	$	—		$	285,031	$	279,126	$	—	$	5,905		—
Level 1:
Time Deposit		132,549		—		—			132,549		—		—		132,549		—
Money Market Funds		1,168,261		—		—			1,168,261		1,168,261		—		—		—
US Treasury and Agencies		212,436		178		(27	)		212,587		—		204,549		8,038		—
Mutual Funds		18,784		2,974		—			21,758		—		—		—		21,758

Level 1 Total	$	1,532,030	$	3,152	$	(27	)	$	1,535,155	$	1,168,261	$	204,549	$	140,587	$	21,758

Level 2:
Municipal Notes and Bonds		334,329		1,108		(4	)		335,433		5,290		330,143		—		—
Government-Sponsored Enterprises		27,666		41		(15	)		27,692		—		27,692		—		—
Foreign Government Bonds		35,438		57		(28	)		35,467		—		35,467		—		—
Corporate Notes and Bonds		874,540		2,034		(335	)		876,239		—		876,239		—		—
Mortgage Backed Securities — Residential		27,067		59		(182	)		26,944		—		26,944		—		—
Mortgage Backed Securities — Commercial		112,642		100		(809	)		111,933		—		111,933		—		—

Level 2 Total	$	1,411,682	$	3,399	$	(1,373	)	$	1,413,708	$	5,290	$	1,408,418	$	—	$	—

Total	$	3,228,743	$	6,551	$	(1,400	)	$	3,233,894	$	1,452,677	$	1,612,967	$	146,492	$	21,758

Schedule of Cash, Cash Equivalents, Short-Term Investments and Restricted Cash and Investments in Unrealized Loss Positions

The following is an analysis of the Company’s cash, cash equivalents, short-term investments and restricted cash and investments in unrealized loss positions:


	September 28, 2014
	Unrealized Losses Less Than 12 Months					Unrealized Losses 12 Months or Greater					Total
	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
	(in thousands)
Municipal Notes and Bonds	$	13,717	$	(12	)	$	—	$	—		$	13,717	$	(12	)
US Treasury & Agencies		58,326		(98	)		—		—			58,326		(98	)
Government-Sponsored Enterprises		36,960		(68	)		—		—			36,960		(68	)
Foreign Government Bonds		20,566		(46	)		—		—			20,566		(46	)
Corporate Notes and Bonds		431,132		(1,072	)		3,525		(27	)		434,657		(1,099	)
Mortgage Backed Securities — Residential		4,252		(83	)		4,487		(69	)		8,739		(152	)
Mortgage Backed Securities — Commercial		69,068		(308	)		19,362		(241	)		88,430		(549	)

	$	634,021	$	(1,687	)	$	27,374	$	(337	)	$	661,395	$	(2,024	)

Schedule of Amortized Cost and Fair Value of Cash Equivalents, Short-Term Investments and Restricted Investments with Contractual Maturities

The amortized cost and fair value of cash equivalents, short-term investments and restricted investments with contractual maturities are as follows as of September 28, 2014:


	Cost		Estimated Fair Value
	(in thousands)
Due in one year or less	$	1,312,967	$	1,313,292
Due after one year through five years		1,138,825		1,139,517
Due in more than five years		298,103		297,486

	$	2,749,895	$	2,750,295

Schedule of Outstanding Foreign Currency Forward Contracts

As of September 28, 2014, the Company had the following outstanding foreign currency forward contracts that were entered into under its cash flow and balance sheet hedge program:


	Derivatives Designated as Hedging Instruments:				Derivatives Not Designated as Hedging Instruments:
	(in thousands)
Foreign Currency Forward Contracts
	Buy Contracts		Sell Contracts		Buy Contracts		Sell Contracts
Japanese Yen	$	—	$	58,868	$	—	$	21,379
Swiss Franc		—		—		6,684		—
Euro		59,270		—		22,430		—
Korean Won		—		—		12,564		—
Taiwan Dollar		—		—		33,487		—

	$	59,270	$	58,868	$	75,165	$	21,379

Schedule of Fair Value of Derivative Instruments

The fair value of derivative instruments in the Company’s Consolidated Balance Sheets as of September 28, 2014 and June 29, 2014 were as follows:

September 28, 2014

June 29, 2014

Fair Value of Derivative Instruments (Level 2)

Asset Derivatives

Liability Derivatives

Asset Derivatives

Liability Derivatives

Balance Sheet
Location

Fair Value

Balance Sheet
Location

Fair Value

Balance Sheet
Location

Fair Value

Balance Sheet
Location

Fair Value

(in thousands)

Derivatives designated as hedging instruments:

Foreign exchange forward contracts

Prepaid expense
and other assets

3,059

Accrued
liabilities

3,069

Prepaid expense
and other assets

483

Accrued
liabilities

805

Derivatives not designated as hedging instruments:

Foreign exchange forward contracts

Prepaid expense
and other assets

Accrued
liabilities

515

Prepaid expense
and other assets

1,109

Accrued
liabilities

118

Total derivatives

3,067

3,584

1,592

923

Schedule of Derivative Instruments Designated as Cash Flow Hedges in Statements of Operations Including Accumulated Other Comprehensive Income


	Three Months Ended September 28, 2014									Three Months Ended September 29, 2013
	Effective Portion						Ineffective Portion and Amount Excluded from Effectiveness Testing			Effective Portion				Ineffective Portion and Amount Excluded from Effectiveness Testing
Location of Gain (Loss) Recognized in or Reclassified into Income	Gain (Loss) Recognized in AOCI			Gain (Loss) Reclassified from AOCI into Income			Gain (Loss) Recognized in Income			Gain (Loss) Recognized in AOCI		Gain (Loss) Reclassified from AOCI into Income		Gain (Loss) Recognized in Income
	(in thousands)									(in thousands)
Revenue	$	3,024		$	469		$	42		$	4,878	$	3,383	$	93
Cost of goods sold		(2,023	)		(276	)		(6	)		149		651		(32	)
Selling, general, and administrative		(866	)		(105	)		(1	)		48		317		(15	)

	$	135		$	88		$	35		$	5,075	$	4,351	$	46

The effect of derivative instruments not designated as cash flow hedges on the Company’s Condensed Consolidated Statements of Operations was as follows:


		Three Months Ended
		September 28, 2014		September 29, 2013
Derivatives Not Designated as Hedging Instruments:	Location of Gain Recognized in Income	Gain Recognized in Income		Gain Recognized in Income
		(in thousands)
Foreign Exchange Contracts	Other income	$	968	$	6,027

INVENTORIES (Tables)

3 Months Ended

Sep. 28, 2014

Schedule of Inventories

Inventories consist of the following:


	September 28, 2014		June 29, 2014
	(in thousands)
Raw materials	$	497,058	$	449,623
Work-in-process		121,804		126,564
Finished goods		196,750		164,316

	$	815,612	$	740,503

GOODWILL AND INTANGIBLE ASSETS (Tables)

3 Months Ended

Sep. 28, 2014

Schedule of Intangible Assets

The following table provides the Company’s intangible assets as of September 28, 2014:


	Gross		Accumulated Amortization			Net
	(in thousands)
Customer relationships	$	615,549	$	(185,615	)	$	429,934
Existing technology		643,779		(246,484	)		397,295
Patents		32,053		(24,925	)		7,128
Other intangible assets		35,670		(35,293	)		377

Intangible assets subject to amortization		1,327,051		(492,317	)		834,734
In process research and development		11,000					11,000
Development rights		9,100					9,100

Intangible assets not subject to amortization		20,100					20,100

Total intangible assets	$	1,347,151	$	(492,317	)	$	854,834

The following table provides the Company’s intangible assets as of June 29, 2014:


	Gross		Accumulated Amortization			Net
	(in thousands)
Customer relationships	$	615,618	$	(169,162	)	$	446,456
Existing technology		643,922		(224,246	)		419,676
Patents		32,253		(24,407	)		7,846
Other intangible assets		35,270		(35,270	)		—

Intangible assets subject to amortization		1,327,063		(453,085	)		873,978
In process research and development		11,000					11,000
Development rights		9,100					9,100

Intangible assets not subject to amortization		20,100					20,100

Total intangible assets	$	1,347,163	$	(453,085	)	$	894,078

Estimated Future Amortization Expense of Intangible Assets

The estimated future amortization expense of intangible assets, excluding those with indefinite lives, as of September 28, 2014 was as follows:


Fiscal Year	Amount
2015 (9 Months)	$	117,482
2016		154,130
2017		152,427
2018		151,215
2019		120,285
Thereafter		139,195

	$	834,734

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)

3 Months Ended

Sep. 28, 2014

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:


	September 28, 2014		June 29, 2014
	(in thousands)
Accrued compensation	$	318,330	$	311,054
Warranty reserves		70,185		68,324
Income and other taxes payable		45,452		93,934
Dividend payable		29,381		29,240
Other		115,620		101,744

	$	578,968	$	604,296

OTHER EXPENSE, NET (Tables)

3 Months Ended

Sep. 28, 2014

Components of Other Expense, Net

The significant components of other expense, net, are as follows:


	Three Months Ended
	September 28, 2014			September 29, 2013
	(in thousands)
Interest income	$	3,288		$	2,723
Interest expense		(15,704	)		(15,302	)
Gains on deferred compensation plan related assets		2,416			37
Foreign exchange gains (losses)		906			(222	)
Other, net		3,446			(1,498	)

	$	(5,648	)	$	(14,262	)

NET INCOME PER SHARE (Tables)

3 Months Ended

Sep. 28, 2014

Schedule of Numerators and Denominators of Basic and Diluted Computations for Net Income Per Share

The following table reconciles the numerators and denominators of the basic and diluted computations for net income per share.


	Three Months Ended
	September 28, 2014		September 29, 2013
	(in thousands, except per share data)
Numerator:
Net income	$	141,081	$	85,506


Denominator:
Basic average shares outstanding		161,685		162,896
Effect of potential dilutive securities:
Employee stock plans		3,560		2,868
Convertible notes		11,867		5,599
Warrants		6		—

Diluted average shares outstanding		177,118		171,363

Net income per share — basic	$	0.87	$	0.52

Net income per share — diluted	$	0.80	$	0.50

Schedule of Potentially Dilutive Securities Excluded from EPS Calculations

The following potentially dilutive securities were excluded:


	Three Months Ended
	September 28, 2014		September 29, 2013
	(in thousands)
Number of potential dilutive securities excluded		—		290

ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

3 Months Ended

Sep. 28, 2014

Components of Accumulated Other Comprehensive Income or Loss

The components of accumulated other comprehensive income (loss), net of tax at the end of the period, as well as the activity during the period, were as follows:


	Accumulated foreign currency translation adjustment			Accumulated unrealized holding gain (loss) on cash flow hedges			Accumulated unrealized holding gain (loss) on available- for-sale investments			Accumulated unrealized components of defined benefit plans			Total
	(in thousands)
Balance as of June 29, 2014	$	(12,986	)	$	(66	)	$	1,557		$	(17,160	)	$	(28,655	)
Other comprehensive income before reclassifications		(5,564	)		298			(1,759	)		66			(6,959	)
(Losses) gains reclassified from accumulated other comprehensive income to net income		(3,395	)		(102	)⁽¹⁾		379	⁽²⁾		—			(3,118	)

Net current-period other comprehensive income	$	(8,959	)	$	196		$	(1,380	)	$	66		$	(10,077	)

Balance as of September 28, 2014	$	(21,945	)	$	130		$	177		$	(17,094	)	$	(38,732	)

(1)	Amount of after tax gain reclassified from accumulated other comprehensive income into net income located in revenue: $441 gain, cost of goods sold: $250 loss and selling, general and administrative expenses: $89 loss.

(2)	Amount of after tax gain reclassified from accumulated other comprehensive income into net income located in other expense, net

LONG-TERM DEBT AND OTHER BORROWINGS (Tables)

3 Months Ended

Sep. 28, 2014

Components of Notes

As of September 28, 2014 and June 29, 2014, the Notes consisted of the following:


	September 28, 2014									June 29, 2014
	2016 Notes			2018 Notes			2041 Notes⁽¹⁾			2016 Notes		2018 Notes		2041 Notes⁽¹⁾
	(in thousands, except years, percentages, conversion rate, and conversion price)
Carrying value, long-term	$	423,481		$	391,011		$	—		$	419,561	$	387,338	$	—
Carrying value, current portion		—			—			517,503			—		—		516,586
Unamortized discount		26,519			58,989			182,432			30,439		62,662		183,349

Principal amount	$	450,000		$	450,000		$	699,935		$	450,000	$	450,000	$	699,935


Remaining amortization period (years)		1.6			3.6			26.7
Effective interest rate on liability component		4.29	%		5.27	%		4.28	%

Carrying amount of equity component, net of tax	$	76,230		$	104,895		$	328,109
Fair Value of Notes (Level 1)	$	573,525		$	610,205		$	1,542,041
Conversion rate (shares of common stock per $1,000 principal amount of notes)		15.9527			15.9527			28.6288
Conversion price (per share of common stock)	$	62.69		$	62.69		$	34.93
If-converted value in excess of par value	$	89,911		$	89,911		$	807,144

(1)

Schedule of Recognized Interest Cost Relating to Both Contractual Interest Coupon and Amortization of Discount on Liability Component of Notes


	Three Months Ended
	September 28, 2014		September 29, 2013
	(in thousands)
Contractual interest coupon	$	6,562	$	6,562
Amortization of interest discount		8,509		8,122
Amortization of issuance costs		591		591

Total interest cost recognized	$	15,662	$	15,275

Warrants and Convertible Note Hedge Arrangements

The following table presents the details of the warrants and convertible note hedge arrangements as of September 28, 2014:


	2016 Notes		2016 Notes
	(shares in thousands)
Warrants:
Number of shares to be delivered upon exercise		7,179		7,179
Exercise price	$	70.96	$	75.70
Expiration date range		August 15 - October 21, 2016		August 15 - October 23, 2018

Convertible Note Hedge:
Number of shares available from counterparties		7,179		7,179
Exercise price	$	62.69	$	62.69

COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Sep. 28, 2014

Schedule of Contractual Cash Obligations Relating to Operating Leases

The Company’s contractual cash obligations with respect to operating leases, excluding the residential value guarantee discussed above, as of September 28, 2014 were as follows:


	Operating Leases
	(in thousands)
Payments due by period:
One year	$	15,203
Two years		13,528
Three years		11,761
Four years		5,241
Five years		4,395
Over five years		13,850
Less: Sublease Income		(639	)

Total	$	63,339

Schedule of Changes in Product Warranty Reserves

Changes in the Company’s product warranty reserves were as follows:


	Three Months Ended
	September 28, 2014			September 29, 2013
	(in thousands)
Balance at beginning of period	$	69,385		$	58,078
Warranties issued during the period		24,536			16,753
Settlements made during the period		(24,068	)		(14,305	)
Changes in liability for pre-existing warranties		599			(655	)

Balance at end of period	$	70,452		$	59,871

STOCK REPURCHASE PROGRAM (Tables)

3 Months Ended

Sep. 28, 2014

Schedule of Repurchases under Repurchase Program

Repurchases under the repurchase program were as follows during the periods indicated:


Period	Total Number of Shares Repurchased		Total Cost of Repurchase		Average Price Paid Per Share*		Amount Available Under Repurchase Program
	(in thousands, except per share data)
Available balance as of June 29, 2014							$	830,895
Quarter ended September 28, 2014		3,818	$	296,721	$	70.01	$	534,174

Equity Based Compensation Plans - Additional Information (Detail) $ in Millions	3 Months Ended
	Sep. 28, 2014 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options and restricted stock units vesting period, years	3 years
Novellus Systems Incorporated
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options and restricted stock units vesting period, years	4 years
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average remaining period for recognition, years	11 months
ESPP purchase price per share as percentage of fair market value	85.00%
Unrecognized compensation expense	$ 13.2
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense, stock option	$ 3.4
Weighted average remaining period for recognition, years	1 year 6 months
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average remaining period for recognition, years	1 year 9 months 18 days
Unrecognized compensation expense	$ 154.2

Recognized Equity Based Compensation Expenses and Related Income Tax Benefit (Detail) - USD ($) $ in Millions	3 Months Ended
	Sep. 28, 2014	Sep. 29, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense	$ 32.0	$ 23.2
Income tax benefit related to equity-based compensation expense	$ 4.7	$ 3.9

Summary of Stock Plan Activity (Detail)	3 Months Ended
Summary of Stock Plan Activity (Detail)	Sep. 28, 2014 $ / shares shares
Options Outstanding Number of Shares
Beginning balance \| shares	1,331,886
Granted \| shares
Exercised \| shares	(165,696)
Cancelled \| shares	(7,452)
Ending balance \| shares	1,158,738
Weighted-Average Exercise Price
Beginning balance \| $ / shares	$ 32.20
Granted \| $ / shares
Exercised \| $ / shares	27.81
Cancelled \| $ / shares	29.86
Ending balance \| $ / shares	$ 32.84
Restricted stock units outstanding number of shares