8-KMaterial AgreementsFinancial EventsRegulation FD+1

LAM RESEARCH CORP 8-K Report, Material Agreement (Jun 19, 2006)

Filed June 19, 2006For Securities:LRCX

Summary

Lam Research Corporation (LRCX) has filed an 8-K report detailing a significant financial event on June 19, 2006. The company's indirect wholly-owned subsidiary, Lam Research International SARL (LRI), entered into a $350 million credit facility. Lam Research Corporation (LRC) provided a guarantee for this facility. This new credit agreement allows LRI to borrow up to $350 million, with a maturity of five years and interest at LIBOR plus a spread. The initial spread is set at 0.10%.

Key Highlights

  • 1LRI entered into a $350 million Credit Agreement, maturing in five years.
  • 2LRCX's subsidiary LRI is the borrower, and LRC is the guarantor of the debt.
  • 3The loan bears interest at LIBOR plus a spread ranging from 0.10% to 0.50%, based on leverage.
  • 4LRI borrowed the full $350 million on June 19, 2006.
  • 5Proceeds from the credit facility are being used to repatriate $350 million of foreign earnings under the American Jobs Creation Act (AJCA).
  • 6This repatriation is in addition to $150 million previously announced.
  • 7LRCX expects to record approximately $16 million in tax expense for this additional repatriation in the June 2006 quarter.

Frequently Asked Questions

The primary purpose of the credit facility is to facilitate the repatriation of $350 million of foreign earnings under the provisions of the American Jobs Creation Act (AJCA).

The credit agreement has a maturity of five years from the closing date. Interest is charged at LIBOR plus a spread of 0.10% to 0.50%, dependent on a consolidated leverage ratio. The initial spread is 0.10%. The loan can be prepaid without penalty, subject to potential reimbursement of lenders' costs.

Lam Research expects to record a tax expense of approximately $16 million in the June 2006 quarter related to this additional $350 million repatriation.

No, Lam Research Corporation (LRC) is not the direct borrower. Its indirect wholly-owned subsidiary, Lam Research International SARL (LRI), is the borrower. LRC has provided a guarantee for the obligations of LRI under the credit agreement.