KLA Corporation Quarterly report pursuant to Section 13 or 15(d)

Financial Statement Components (Tables)

Financial Statement Components (Tables)

6 Months Ended

Dec. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Consolidated Balance Sheets



(In thousands)	As of December 31, 2019			As of June 30, 2019
Accounts receivable, net:
Accounts receivable, gross	$	1,202,925		$	1,002,114
Allowance for doubtful accounts	(11,890		)	(12,001		)
	$	1,191,035		$	990,113
Inventories:
Raw materials	$	450,956		$	444,627
Customer service parts	337,118			328,515
Work-in-process	319,590			285,191
Finished goods	143,736			204,167
	$	1,251,400		$	1,262,500
Other current assets:
Contract assets	$	85,837		$	94,015
Prepaid expenses	73,322			88,387
Deferred costs of revenue	55,083			70,721
Prepaid income and other taxes	25,102			51,889
Other current assets	18,142			18,065
	$	257,486		$	323,077
Land, property and equipment, net:
Land	$	67,874		$	67,883
Buildings and leasehold improvements	416,463			402,678
Machinery and equipment	699,175			669,316
Office furniture and fixtures	34,899			28,282
Construction-in-process	63,566			26,029
	1,281,977			1,194,188
Less: accumulated depreciation	(791,997		)	(745,389		)
	$	489,980		$	448,799
Other non-current assets:
Executive Deferred Savings Plan⁽¹⁾	$	216,612		$	207,581
Operating lease right of use assets	103,666			—
Other non-current assets	57,533			58,392
	$	377,811		$	265,973
Other current liabilities:
Compensation and benefits	$	326,407		$	226,462
Executive Deferred Savings Plan	217,387			208,926
Customer credits and advances	164,155			133,677
Other accrued expenses	160,522			202,647
Income taxes payable	80,776			23,350
Interest payable	31,026			31,992
Operating lease liabilities	29,937			—
	$	1,010,210		$	827,054
Other non-current liabilities:
Income taxes payable	$	368,751		$	392,266
Pension liabilities	79,895			79,622
Operating lease liabilities	72,620			—
Other non-current liabilities	142,466			116,009
	$	663,732		$	587,897

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(1)

We have a non-qualified deferred compensation plan (known as “Executive Deferred Savings Plan” or “EDSP”) under which certain employees and non-employee directors may defer a portion of their compensation. The expense (benefit) associated with changes in the EDSP liability included in selling, general and administrative expense was $12.0 million and $(19.8) million during the three months ended December 31, 2019 and 2018, respectively and was $13.9 million and $(12.3) million during the six months ended December 31, 2019 and 2018, respectively. The amount of net gains (losses) associated with changes in the EDSP assets included in selling, general and administrative expense was $11.9 million and $(19.4) million during the three months ended December 31, 2019 and 2018, respectively and was $14.2 million and $(12.0) million during the six months ended December 31, 2019 and 2018, respectively. For additional details, refer to Note 1, “Description of Business and Summary of Significant Accounting Policies,” of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2019.

Components of 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 December 31, 2019	$	(43,489	)	$	661		$	(5,961	)	$	(17,969	)	$	(66,758	)

Balance as of June 30, 2019	$	(44,041	)	$	(1,616	)	$	(8,725	)	$	(18,647	)	$	(73,029	)

Reclassification out of Accumulated Other Comprehensive Income

The effects on net income (loss) 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 December 31,						Six Months Ended December 31,
Accumulated OCI Components	Statements of Operations	2019			2018			2019			2018
Unrealized gains (losses) on cash flow hedges from foreign exchange and interest rate contracts⁽¹⁾	Revenues	$	(8	)	$	1,705		$	365		$	2,688
	Costs of revenues and operating expenses	(17		)	(158		)	(1,818		)	(292		)
	Interest expense	(100		)	189			(199		)	377
	Net gains (losses) reclassified from accumulated OCI	$	(125	)	$	1,736		$	(1,652	)	$	2,773
Unrealized gains (losses) on available-for-sale securities	Other expense (income), net	$	(82	)	$	(469	)	$	(86	)	$	(950	)

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(1)

Reflects the new accounting guidance for hedge accounting, which was adopted in the second quarter of fiscal year 2019. For additional details, refer to Note 16, “Derivative Instruments and Hedging Activities” of the Condensed Consolidated Financial Statements.