| FINANCIAL STATEMENT COMPONENTS |
NOTE 3 – FINANCIAL STATEMENT COMPONENTS
Balance Sheet Components
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(In thousands) |
As of
December 31, 2015 |
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As of
June 30, 2015 |
Accounts receivable, net: |
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|
Accounts receivable, gross |
$ |
448,786 |
|
|
$ |
607,157 |
|
Allowance for doubtful accounts |
(21,671 |
) |
|
(21,663 |
) |
|
$ |
427,115 |
|
|
$ |
585,494 |
|
Inventories: |
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|
|
Customer service parts |
$ |
221,980 |
|
|
$ |
209,726 |
|
Raw materials |
226,377 |
|
|
194,218 |
|
Work-in-process |
186,359 |
|
|
156,820 |
|
Finished goods |
57,070 |
|
|
57,140 |
|
|
$ |
691,786 |
|
|
$ |
617,904 |
|
Other current assets: |
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|
|
Prepaid expenses |
$ |
38,625 |
|
|
$ |
37,006 |
|
Income tax related receivables |
61,129 |
|
|
32,850 |
|
Other current assets |
7,152 |
|
|
7,958 |
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|
$ |
106,906 |
|
|
$ |
77,814 |
|
Land, property and equipment, net: |
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|
Land |
$ |
40,385 |
|
|
$ |
40,397 |
|
Buildings and leasehold improvements |
318,904 |
|
|
316,566 |
|
Machinery and equipment |
508,578 |
|
|
510,642 |
|
Office furniture and fixtures |
21,573 |
|
|
21,411 |
|
Construction-in-process |
3,432 |
|
|
3,152 |
|
|
892,872 |
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|
892,168 |
|
Less: accumulated depreciation and amortization |
(600,479 |
) |
|
(577,577 |
) |
|
$ |
292,393 |
|
|
$ |
314,591 |
|
Other non-current assets: |
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|
|
Executive Deferred Savings Plan(1)
|
$ |
161,053 |
|
|
$ |
165,655 |
|
Deferred tax assets – long-term |
77,288 |
|
|
78,648 |
|
Other non-current assets |
14,938 |
|
|
15,384 |
|
|
$ |
253,279 |
|
|
$ |
259,687 |
|
Other current liabilities: |
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|
Warranty |
$ |
36,148 |
|
|
$ |
36,413 |
|
Executive Deferred Savings Plan(1)
|
163,988 |
|
|
167,886 |
|
Compensation and benefits |
130,394 |
|
|
196,682 |
|
Income taxes payable |
18,880 |
|
|
15,582 |
|
Interest payable |
19,398 |
|
|
19,395 |
|
Customer credits and advances |
89,265 |
|
|
93,212 |
|
Other accrued expenses |
82,508 |
|
|
132,244 |
|
|
$ |
540,581 |
|
|
$ |
661,414 |
|
Other non-current liabilities: |
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Pension liabilities |
$ |
53,930 |
|
|
$ |
55,696 |
|
Income taxes payable |
65,997 |
|
|
69,018 |
|
Other non-current liabilities |
47,598 |
|
|
57,516 |
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|
$ |
167,525 |
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|
$ |
182,230 |
|
________________
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(1) |
KLA-Tencor has a non-qualified deferred compensation plan (known as “Executive Deferred Savings Plan”) under which certain executives and non-employee directors may defer a portion of their compensation. Participants are credited with returns based on their allocation of their account balances among measurement funds. The Company controls the investment of these funds, and the participants remain general creditors of the Company. The Company invests these funds in certain mutual funds and such investments are classified as trading securities on the condensed consolidated balance sheets. Distributions from the Executive Deferred Savings Plan commence following a participant’s retirement or termination of employment or on a specified date allowed per the Executive Deferred Savings Plan provisions, except in cases where such distributions are required to be delayed in order to avoid a prohibited distribution under Internal Revenue Code Section 409A. Participants can generally elect the distributions to be paid in lump sum or quarterly cash payments over a scheduled period for up to 15 years and are allowed to make subsequent changes to their existing elections as permissible under the Executive Deferred Savings Plan provisions. Changes in the Executive Deferred Savings Plan liability is recorded in selling, general and administrative expense in the condensed consolidated statements of operations. The expense (benefit) associated with changes in the liability included in selling, general and administrative expense were $6.8 million and $6.1 million for the three months ended December 31, 2015 and 2014, respectively. The expense (benefit) associated with changes in the liability included in selling, general and administrative expense were $(3.3) million and $4.2 million for the six months ended December 31, 2015 and 2014, respectively. Changes in the Executive Deferred Savings Plan assets are recorded as gains (losses), net in selling, general and administrative expense in the condensed consolidated statements of operations. The amount of gains (losses), net included in selling, general and administrative expense were $6.9 million and $6.2 million for the three months ended December 31, 2015 and 2014, respectively. The amount of gains (losses), net included in selling, general and administrative expense were $(3.1) million and $4.4 million for the six months ended December 31, 2015 and 2014, respectively.
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Accumulated Other Comprehensive Income (Loss)
The components of accumulated other comprehensive income (loss) (“OCI”) as of the dates indicated below were as follows:
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(In thousands) |
Currency Translation Adjustments |
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Unrealized Gains (Losses) on Available-for-Sale Securities |
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Unrealized Gains (Losses) on Cash Flow Hedges |
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Unrealized Gains (Losses) on Defined Benefit Plans |
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Total |
Balance as of December 31, 2015 |
$ |
(36,429 |
) |
|
$ |
(2,623 |
) |
|
$ |
3,662 |
|
|
$ |
(15,129 |
) |
|
$ |
(50,519 |
) |
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Balance as of June 30, 2015 |
$ |
(29,925 |
) |
|
$ |
734 |
|
|
$ |
4,553 |
|
|
$ |
(15,935 |
) |
|
$ |
(40,573 |
) |
The effects on net income of amounts reclassified from accumulated OCI to the Condensed Consolidated Statement of Operations for the indicated period were as follows (in thousands):
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Location in the Condensed Consolidated |
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Three months ended
December 31, |
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Six months ended
December 31, |
Accumulated OCI Components |
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Statements of Operations |
|
2015 |
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2014 |
|
2015 |
|
2014 |
Unrealized gains (losses) on cash flow hedges from foreign exchange and interest rate contracts |
|
Revenues |
|
$ |
324 |
|
|
$ |
1,933 |
|
|
$ |
1,009 |
|
|
$ |
2,202 |
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Costs of revenues |
|
(678 |
) |
|
(475 |
) |
|
(1,150 |
) |
|
(516 |
) |
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Interest expense |
|
189 |
|
|
126 |
|
|
378 |
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|
126 |
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Net gains reclassified from accumulated OCI |
|
$ |
(165 |
) |
|
$ |
1,584 |
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|
$ |
237 |
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$ |
1,812 |
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Unrealized gains on available-for-sale securities |
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Other expense (income), net |
|
$ |
26 |
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|
$ |
281 |
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$ |
43 |
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$ |
1,916 |
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The amounts reclassified out of accumulated OCI related to the Company’s defined benefit pension plans, which were recognized as a component of net periodic cost for the three and six months ended December 31, 2015 were $0.7 million and $1.0 million, respectively. The amounts reclassified out of accumulated OCI related to the Company’s defined benefit pension plans, which were recognized as a component of net periodic cost for the three and six months ended December 31, 2014 were $0.7 million and $1.5 million, respectively. For additional details, refer to Note 11, “Employee Benefit Plans” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2015.
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