EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE


Investor Relations:		Media Relations:
Ed Lockwood		Meggan Powers
Sr. Director, Investor Relations		Sr. Director, Corporate Communications
(408) 875-9529		(408) 875-8733
ed.lockwood@kla-tencor.com		meggan.powers@kla-tencor.com

KLA-TENCOR REPORTS FISCAL 2016 THIRD QUARTER RESULTS

MILPITAS, Calif., April 26, 2016 - KLA-Tencor Corporation (NASDAQ: KLAC) today announced operating results for its third quarter of fiscal year 2016, which ended on March 31, 2016, reporting GAAP net income of $176 million and GAAP earnings per diluted share of $1.12 on revenues of $712 million.


GAAP Results
	Q3 FY 2016		Q2 FY 2016		Q3 FY 2015
Revenues	$	712 million	$	710 million	$	738 million
Net Income	$	176 million	$	152 million	$	132 million
Earnings per Diluted Share	$	1.12	$	0.98	$	0.81

Non-GAAP Results
	Q3 FY 2016		Q2 FY 2016		Q3 FY 2015
Net Income	$	179 million	$	162 million	$	137 million
Earnings per Diluted Share	$	1.15	$	1.04	$	0.84

A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements that are part of this release. Non-GAAP results include the impact of stock-based compensation, but exclude the impact of acquisitions, restructuring, severance and other related charges, merger-related charges, and debt extinguishment loss and recapitalization charges.

In light of the pending merger transaction with Lam Research Corporation, KLA-Tencor has discontinued conducting quarterly earnings conference calls to discuss financial results, but instead publish a quarterly stockholder letter and other supplemental data on the Investor Relations section of the KLA-Tencor website.

About KLA-Tencor:

KLA-Tencor Corporation, a leading provider of process control and yield management solutions, partners with customers around the world to develop state-of-the-art inspection and metrology technologies. These technologies serve the semiconductor, LED and other related nanoelectronics industries. With a portfolio of industry-standard products and a team of world-class engineers and scientists, the company has created superior solutions for its customers for nearly 40 years. Headquartered in Milpitas, California, KLA-Tencor has dedicated customer operations and service centers around the world. Additional information may be found at www.kla-tencor.com. (KLAC-F)

Use of Non-GAAP Financial Information:

The non-GAAP and supplemental information provided in this press release is a supplement to, and not a substitute for, KLA-Tencor’s financial results presented in accordance with United States GAAP.

To supplement KLA-Tencor’s condensed consolidated financial statements presented in accordance with GAAP, the company provides certain non-GAAP financial information, which is adjusted from results based on GAAP to exclude certain costs and expenses, as well as other supplemental information. The non-GAAP and supplemental information is provided to enhance the user’s overall understanding of KLA-Tencor’s operating performance and its prospects in the future. Specifically, KLA-Tencor believes that the non-GAAP information provides useful measures to both management and investors regarding financial and business trends relating to KLA-Tencor’s financial performance by excluding certain costs and expenses that the company believes are not indicative of its core operating results. The non-GAAP information is among the budgeting and planning tools that management uses for future forecasting. However, because there are no standardized or generally accepted definitions for most non-GAAP financial metrics, definitions of non-GAAP financial metrics (for example, determining which costs and expenses to exclude when calculating such a metric) are inherently subject to significant discretion. As a result, non-GAAP financial metrics may be defined very differently from company to company, or even from period to period within the same company, which can potentially limit the usefulness of such information to an investor. The presentation of non-GAAP and supplemental information is not meant to be considered in isolation or as a substitute for results prepared and presented in accordance with United States GAAP.

KLA-Tencor Corporation

Condensed Consolidated Unaudited Balance Sheets


*(In thousands)*	March 31, 2016			June 30, 2015
ASSETS
Cash, cash equivalents and marketable securities	$	2,241,310		$	2,387,111
Accounts receivable, net		624,818			585,494
Inventories		721,493			617,904
Other current assets		318,852			314,067
Land, property and equipment, net		287,874			314,591
Goodwill		335,205			335,263
Purchased intangibles, net		5,625			11,895
Other non-current assets		246,925			259,687

Total assets	$	4,782,102		$	4,826,012

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	126,322		$	103,342
Deferred system profit		193,219			148,691
Unearned revenue		51,820			71,335
Current portion of long-term debt		—			16,981
Other current liabilities		626,331			661,414

Total current liabilities		997,692			1,001,763
Non-current liabilities:
Long-term debt		3,097,306			3,173,435
Unearned revenue		51,065			47,145
Other non-current liabilities		159,467			182,230

Total liabilities		4,305,530			4,404,573
Stockholders’ equity:
Common stock and capital in excess of par value		424,474			474,374
Retained earnings (accumulated deficit)		95,121			(12,362	)
Accumulated other comprehensive income (loss)		(43,023	)		(40,573	)

Total stockholders’ equity		476,572			421,439

Total liabilities and stockholders’ equity	$	4,782,102		$	4,826,012

KLA-Tencor Corporation

Condensed Consolidated Unaudited Statements of Operations


	Three months ended March 31,				Nine months ended March 31,
*(In thousands, except per share amounts)*	2016		2015		2016		2015
Revenues:
Product	$	530,623	$	565,181	$	1,519,142	$	1,545,663
Service		181,810		173,278		546,180		512,054

Total revenues		712,433		738,459		2,065,322		2,057,717
Costs and expenses:
Costs of revenues		274,599		320,282		825,823		891,962
Engineering, research and development		115,589		124,583		353,804		401,777
Selling, general and administrative		87,407		98,608		275,602		305,125
Interest expense and other, net		24,907		28,532		80,388		67,991
Loss on extinguishment of debt and other, net		—		—		—		131,669

Income before income taxes		209,931		166,454		529,705		259,193
Provision for income taxes		34,154		34,816		96,824		35,054

Net income	$	175,777	$	131,638	$	432,881	$	224,139

Net income per share:
Basic	$	1.13	$	0.81	$	2.78	$	1.37

Diluted	$	1.12	$	0.81	$	2.76	$	1.36

Cash dividends declared per share (including a special cash dividend of $16.50 per share declared during the three months ended December 31, 2014)	$	0.52	$	0.50	$	1.56	$	18.00

Weighted-average number of shares:
Basic		155,690		161,559		155,921		163,494
Diluted		156,429		162,794		156,797		164,930

KLA-Tencor Corporation

Condensed Consolidated Unaudited Statements of Cash Flows


	Three months ended
	March 31,
*(In thousands)*	2016			2015
Cash flows from operating activities:
Net income	$	175,777		$	131,638
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		15,780			20,510
Asset impairment charges		1,038			1,698
Non-cash stock-based compensation expense		9,185			12,767
Excess tax benefit from equity awards		(635	)		(398	)
Net gain on sales of marketable securities and other investments		(2,847	)		(60	)
Changes in assets and liabilities:
Increase in accounts receivable, net		(186,715	)		(1,213	)
Decrease (increase) in inventories		(26,065	)		23,745
Decrease in other assets		8,322			20,096
Increase (decrease) in accounts payable		3,751			(5,054	)
Increase (decrease) in deferred system profit		61,371			(21,732	)
Increase in other liabilities		52,535			60,420

Net cash provided by operating activities		111,497			242,417
Cash flows from investing activities:
Capital expenditures, net		(8,954	)		(10,326	)
Proceeds from sale of assets		2,811			—
Purchases of available-for-sale securities		(249,126	)		(339,580	)
Proceeds from sale of available-for-sale securities		147,120			223,438
Proceeds from maturity of available-for-sale securities		146,102			181,151
Purchases of trading securities		(13,243	)		(9,383	)
Proceeds from sale of trading securities		16,162			13,765

Net cash provided by investing activities		40,872			59,065
Cash flows from financing activities:
Repayment of debt		(35,000	)		(9,375	)
Issuance of common stock		2			175
Tax withholding payments related to vested and released restricted stock units		(1,702	)		(1,990	)
Common stock repurchases		—			(168,670	)
Payment of dividends to stockholders		(82,109	)		(82,250	)
Excess tax benefit from equity awards		635			398

Net cash used in financing activities		(118,174	)		(261,712	)
Effect of exchange rate changes on cash and cash equivalents		5,188			(2,743	)

Net increase in cash and cash equivalents		39,383			37,027
Cash and cash equivalents at beginning of period		886,591			584,865

Cash and cash equivalents at end of period	$	925,974		$	621,892

Supplemental cash flow disclosures:
Income taxes paid, net	$	22,304		$	8,101
Interest paid	$	3,482		$	4,341
Non-cash activities:
Purchase of land, property and equipment - investing activities	$	2,311		$	2,255
Unsettled common stock repurchase - financing activities	$	—		$	12,862
Dividends payable - financing activities	$	18,827		$	41,412

KLA-Tencor Corporation

Condensed Consolidated Unaudited Supplemental Information

(In thousands, except per share amounts)

Reconciliation of GAAP Net Income to Non-GAAP Net Income


		Three months ended									Nine months ended
		March 31, 2016			December 31, 2015			March 31, 2015			March 31, 2016			March 31, 2015
GAAP net income		$	175,777		$	152,207		$	131,638		$	432,881		$	224,139
Adjustments to reconcile GAAP net income to non-GAAP net income
Acquisition-related charges	a		1,309			1,309			3,928			6,199			11,758
Restructuring, severance and other related charges	b		137			1,742			3,636			8,945			10,992
Merger-related charges	c		3,582			8,820			—			12,402			—
Debt extinguishment loss and recapitalization charges	d		—			—			—			—			134,147
Income tax effect of non-GAAP adjustments	e		(1,535	)		(2,321	)		(1,840	)		(7,204	)		(52,099	)

Non-GAAP net income		$	179,270		$	161,757		$	137,362		$	453,223		$	328,937

GAAP net income per diluted share		$	1.12		$	0.98		$	0.81		$	2.76		$	1.36

Non-GAAP net income per diluted share		$	1.15		$	1.04		$	0.84		$	2.89		$	1.99

Shares used in diluted shares calculation			156,429			155,996			162,794			156,797			164,930

Pre-tax impact of items included in Condensed Consolidated Unaudited Statements of Operations


	Acquisition- related charges		Restructuring, severance and other related charges		Merger-related charges		Total pre-tax GAAP to non- GAAP adjustments
Three months ended March 31, 2016
Costs of revenues	$	663	$	121	$	238	$	1,022
Engineering, research and development		—		5		508		513
Selling, general and administrative		646		11		2,836		3,493

Total in three months ended March 31, 2016	$	1,309	$	137	$	3,582	$	5,028

Three months ended December 31, 2015
Costs of revenues	$	663	$	470	$	67	$	1,200
Engineering, research and development		—		479		—		479
Selling, general and administrative		646		793		8,753		10,192

Total in three months ended December 31, 2015	$	1,309	$	1,742	$	8,820	$	11,871

Three months ended March 31, 2015
Costs of revenues	$	2,507	$	211	$	—	$	2,718
Engineering, research and development		700		680		—		1,380
Selling, general and administrative		721		2,745		—		3,466

Total in three months ended March 31, 2015	$	3,928	$	3,636	$	—	$	7,564

To supplement our condensed consolidated financial statements presented in accordance with GAAP, we provide certain non-GAAP financial information, which is adjusted from results based on GAAP to exclude certain costs and expenses, as well as other supplemental information. The non-GAAP and supplemental information is provided to enhance the user’s overall understanding of our operating performance and our prospects in the future. Specifically, we believe that the non-GAAP information provides useful measures to both management and investors regarding financial and business trends relating to our financial performance by excluding certain costs and expenses that we believe are not indicative of our core operating results. The non-GAAP information is among the budgeting and planning tools that management uses for future forecasting. However, because there are no standardized or generally accepted definitions for most non-GAAP financial metrics, definitions of non-GAAP financial metrics (for example, determining which costs and expenses to exclude when calculating such a metric) are inherently subject to significant discretion. As a result, non-GAAP financial metrics may be defined very differently from company to company, or even from period to period within the same company, which can potentially limit the usefulness of such information to an investor. The presentation of non-GAAP and supplemental information is not meant to be considered in isolation or as a substitute for results prepared and presented in accordance with United States GAAP.

Acquisition-related charges includes amortization of intangible assets associated with acquisitions. Management believes that the expense associated with the amortization of acquisition related intangible assets is appropriate to be excluded because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have short lives, and exclusion of these expenses allows comparisons of operating results that are consistent over time for both KLA-Tencor’s newly acquired and long-held businesses. Management believes excluding these items helps investors compare our operating performance with our results in prior periods as well as with the performance of other companies.

Restructuring, severance and other related charges include costs associated with employee severance and other exit costs, impairment of certain long-lived assets. Management believes excluding these items helps investors compare our operating performance with our results in prior periods as well as with the performance of other companies.

Merger-related charges that are directly related to the pending merger between KLA-Tencor and Lam as announced on October 21, 2015. Charges primarily includes costs for advisory services, appraisals, legal services, employee-related expense and auditing services. Management believes that it is appropriate to exclude these items as they are not indicative of ongoing operating results and therefore limit comparability and excluding these items helps investors compare our operating performance with our results in prior periods as well as with the performance of other companies.

Debt extinguishment loss and recapitalization charges include a pre-tax loss on early extinguishment of debt related to the 6.900% Senior Notes due in 2018, net and certain other expenses incurred in connection with the leveraged recapitalization plan which was completed in the second quarter of fiscal year ended June 30, 2015. Management believes that it is appropriate to exclude these items as they are not indicative of ongoing operating results and therefore limit comparability and excluding these items helps investors compare our operating performance with our results in prior periods as well as with the performance of other companies.

e.	Income tax effect of non-GAAP adjustments includes the income tax effects of the excluded items noted above. Management believes that it is appropriate to exclude the tax effects of the items noted above in order to present a more meaningful measure of non-GAAP net income.