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

Quarterly report pursuant to Section 13 or 15(d)

Equity, Long-Term Incentive Compensation Plans and Non-controlling Interest (Tables)

Equity, Long-Term Incentive Compensation Plans and Non-controlling Interest (Tables)

9 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Combined Activity Under Equity Incentive Plans

The following table summarizes the combined activity under our equity incentive plans:



(In thousands)	Available For Grant^{(1) (2)}
Balance as of June 30, 2019	11,613
Restricted stock units granted⁽³⁾	(948	)
Restricted stock units granted adjustment	103
Restricted stock units canceled	55
Balance as of March 31, 2020	10,823

__________________


(1)	The number of RSUs reflects the application of the award multiplier of 2.0x to calculate the impact of the award on the shares reserved under the 2004 Plan.


(2)	No additional stock options, RSUs or other awards will be granted under the Assumed Equity Plans.

(3)

Includes RSUs granted to senior management during the nine months ended March 31, 2020 with performance-based vesting criteria (in addition to service-based vesting criteria for any of such RSUs that are deemed to have been earned) (“performance-based RSUs”). This line item includes all such performance-based RSUs granted during the nine months ended March 31, 2020 reported at the maximum possible number of shares that may ultimately be issuable if all applicable performance-based criteria are achieved at their maximum levels and all applicable service-based criteria are fully satisfied (0.4 million shares for the nine months ended March 31, 2020 reflects the application of the multiplier described above).

Schedule of Stock-based Compensation Expense

The following table shows stock-based compensation expense for the indicated periods:



	Three Months Ended March 31,				Nine Months Ended March 31,
(In thousands)	2020		2019		2020		2019
Stock-based compensation expense by:
Costs of revenues	$	4,162	$	3,105	$	10,389	$	6,759
Research and development	6,577		4,986		16,936		9,988
Selling, general and administrative	20,531		26,102		57,678		49,279
Total stock-based compensation expense	$	31,270	$	34,193	$	85,003	$	66,026

Schedule of Stock-based Compensation Capitalized as Inventory

The following table shows stock-based compensation capitalized as inventory as of the dates indicated below:



(In thousands)	As of March 31, 2020		As of June 30, 2019
Inventory	$	5,089	$	4,819

Schedule of Restricted Stock Activity

The following table shows the activity and weighted-average grant date fair value for RSUs during the nine months ended March 31, 2020:



	Shares⁽¹⁾ (In thousands)		Weighted-Average Grant Date Fair Value
Outstanding restricted stock units as of June 30, 2019⁽²⁾	2,902		$	91.84
Granted⁽³⁾	474		$	142.93
Granted adjustments	(52	)	$	111.41
Vested and released	(650	)	$	85.45
Withheld for taxes	(276	)	$	85.45
Forfeited	(49	)	$	104.62
Outstanding restricted stock units as of March 31, 2020⁽²⁾	2,349		$	103.98

__________________


(1)	Share numbers reflect actual shares subject to awarded RSUs.


(2)	Includes performance-based and market-based RSUs.

(3)

This line item includes performance-based RSUs granted during the nine months ended March 31, 2020 reported at the maximum possible number of shares that may ultimately be issuable if all applicable performance-based criteria are achieved at their maximum levels and all applicable service-based criteria are fully satisfied (0.2 million shares for the nine months ended March 31, 2020

Schedule of Grant Date Fair Value, Weighted Average Grant Date Fair Value, and Tax Benefits for Restricted Stock Units

The following table shows the weighted-average grant date fair value per unit for the RSUs granted, vested, and tax benefits realized by us in connection with vested and released RSUs for the indicated periods:



	Three Months Ended March 31,				Nine Months Ended March 31,
(In thousands, except for weighted-average grant date fair value)	2020		2019		2020		2019
Weighted-average grant date fair value per unit	$	168.92	$	97.60	$	142.93	$	103.59
Weighted-average fair value per unit assumed upon Orbotech Acquisition	$	—	$	104.49	$	—	$	104.49
Grant date fair value of vested restricted stock units	$	22,459	$	4,740	$	79,194	$	47,674
Tax benefits realized by us in connection with vested and released restricted stock units	$	4,942	$	170	$	18,596	$	10,900

Employee Stock Purchase Rights Valuation

The fair value of each purchase right under the ESPP was estimated on the date of grant using the Black-Scholes model and the straight-line attribution approach with the following weighted-average assumptions:



	Three Months Ended March 31,				Nine Months Ended March 31,
	2020		2019		2020		2019
Stock purchase plan:
Expected stock price volatility	37.0	%	36.3	%	34.3	%	33.2	%
Risk-free interest rate	1.8	%	2.4	%	2.1	%	2.1	%
Dividend yield	1.9	%	3.3	%	2.2	%	3.1	%
Expected life (in years)	0.5		0.5		0.5		0.5

Schedule of Tax Benefits Realized and Weighted-average fair value for the ESPP

The following table shows total cash received from employees for the issuance of shares under the ESPP, the number of shares purchased by employees through the ESPP, the tax benefits realized by us in connection with the disqualifying dispositions of shares purchased under the ESPP and the weighted-average fair value per share for the indicated periods:



(In thousands, except for weighted-average fair value per share)	Three Months Ended March 31,				Nine Months Ended March 31,
	2020		2019		2020		2019
Total cash received from employees for the issuance of shares under the ESPP	$	—	$	—	$	24,500	$	20,556
Number of shares purchased by employees through the ESPP	—		—		237		270
Tax benefits realized by us in connection with the disqualifying dispositions of shares purchased under the ESPP	$	945	$	444	$	2,798	$	1,047
Weighted-average fair value per share based on Black-Scholes model	$	43.36	$	21.25	$	36.70	$	21.67