LRCX » Topics » Goodwill Impairment

This excerpt taken from the LRCX 10-Q filed May 8, 2009.

Goodwill Impairment

As a result of a combination of factors, including the current economic environment, a sustained decline in our market valuation and a decline in our operating results, we have concluded, in accordance with Statement of Financial Accounting Standards Number 142, “Goodwill and Other Intangible Assets”, that the fair value of our Clean Product Group has been reduced below its carrying value. As a result, we recorded a non-cash goodwill impairment charge of approximately $89.1 million during the quarter ended March 29, 2009. The goodwill impairment charge is based on our current best estimate.

Due to the complexities involved in determining the implied fair value of goodwill of the Clean Product Group, we expect to finalize our goodwill impairment analysis during the fourth quarter of fiscal year 2009 and there could be adjustments to the goodwill impairment charge when the goodwill impairment analysis is completed. Any adjustments to our preliminary estimates as a result of completing this evaluation will be recorded in our financial statements for the quarter ending June 28, 2009.

If our future operating results do not meet current forecasts or if we experience a sustained decline in our market capitalization that is determined to be indicative of a reduction in fair value of our Clean Product Group, an additional impairment analysis may be required which may result in additional impairment charges.

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