Quarterly report pursuant to Section 13 or 15(d)

Financial Statement Components

v3.5.0.2
Financial Statement Components
3 Months Ended
Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
FINANCIAL STATEMENT COMPONENTS
NOTE 3 – FINANCIAL STATEMENT COMPONENTS
Balance Sheet Components
(In thousands)
As of
September 30, 2016
 
As of
June 30, 2016
Accounts receivable, net:
 
 
 
Accounts receivable, gross
$
676,366

 
$
634,905

Allowance for doubtful accounts
(21,667
)
 
(21,672
)
 
$
654,699

 
$
613,233

Inventories:
 
 
 
Customer service parts
$
245,105

 
$
234,712

Raw materials
207,080

 
208,689

Work-in-process
188,909

 
187,733

Finished goods
62,168

 
67,501

 
$
703,262

 
$
698,635

Other current assets:
 
 
 
Prepaid expenses
$
38,111

 
$
37,127

Income tax related receivables
29,753

 
18,190

Other current assets
8,716

 
9,553

 
$
76,580

 
$
64,870

Land, property and equipment, net:
 
 
 
Land
$
40,606

 
$
40,603

Buildings and leasehold improvements
314,649

 
313,239

Machinery and equipment
510,763

 
507,378

Office furniture and fixtures
21,287

 
21,737

Construction-in-process
5,810

 
5,286

 
893,115

 
888,243

Less: accumulated depreciation and amortization
(620,764
)
 
(610,229
)
 
$
272,351

 
$
278,014

Other non-current assets:
 
 
 
Executive Deferred Savings Plan(1)
$
174,752

 
$
162,160

Other non-current assets
13,777

 
12,499

 
$
188,529

 
$
174,659

Other current liabilities:
 
 
 
Compensation and benefits
$
179,452

 
$
224,496

Executive Deferred Savings Plan(1)
175,211

 
162,289

Customer credits and advances
80,734

 
81,994

Interest payable
46,208

 
19,395

Warranty
36,967

 
34,773

Income taxes payable
21,513

 
27,964

Other accrued expenses
89,109

 
111,297

 
$
629,194

 
$
662,208

Other non-current liabilities:
 
 
 
Pension liabilities
$
71,349

 
$
69,418

Income taxes payable
54,671

 
50,365

Other non-current liabilities
34,982

 
36,840

 
$
161,002

 
$
156,623



________________
(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 in 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 are 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 was $5.8 million and $(10.2) million during the three months ended September 30, 2016 and 2015, 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 net gains (losses), net included in selling, general and administrative expense was $5.9 million and $(10.0) million during the three months ended September 30, 2016 and 2015, respectively.
Accumulated Other Comprehensive Income (Loss)
The components of accumulated other comprehensive income (loss) (“OCI”) as of the dates indicated below were as follows:
(In thousands)
Currency Translation Adjustments
 
Unrealized Gains (Losses) on Available-for-Sale Securities
 
Unrealized Gains (Losses) on Cash Flow Hedges
 
Unrealized Gains (Losses) on Defined Benefit Plans
 
Total
Balance as of September 30, 2016
$
(27,718
)
 
$
846

 
$
481

 
$
(20,242
)
 
$
(46,633
)
 
 
 
 
 
 
 
 
 
 
Balance as of June 30, 2016
$
(32,424
)
 
$
3,451

 
$
775

 
$
(20,487
)
 
$
(48,685
)

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):
 
 
Location in the Condensed Consolidated
 
Three months ended
September 30,
Accumulated OCI Components
 
Statements of Operations
 
2016
 
2015
Unrealized gains (losses) on cash flow hedges from foreign exchange and interest rate contracts
 
Revenues
 
$
(1,481
)
 
$
685

 
 
Costs of revenues
 
(87
)
 
(472
)
 
 
Interest expense
 
189

 
189

 
 
Net gains (losses) reclassified from accumulated OCI
 
$
(1,379
)
 
$
402

Unrealized gains (losses) on available-for-sale securities
 
Other expense (income), net
 
$
204

 
$
17


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 months ended September 30, 2016 and 2015 were $0.4 million and $0.3 million, respectively. For additional details, refer to Note 10, “Employee Benefit Plans” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2016.