Quarterly report pursuant to Section 13 or 15(d)

Financial Statement Components

v3.10.0.1
Financial Statement Components
3 Months Ended
Sep. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
FINANCIAL STATEMENT COMPONENTS
NOTE 4 – FINANCIAL STATEMENT COMPONENTS
Consolidated Balance Sheets
(In thousands)
As of
September 30, 2018
 
As of
June 30, 2018
Accounts receivable, net:
 
 
 
Accounts receivable, gross
$
613,847

 
$
663,317

Allowance for doubtful accounts
(11,637
)
 
(11,639
)
 
$
602,210

 
$
651,678

Inventories:
 
 
 
Customer service parts
$
265,849

 
$
253,639

Raw materials
349,300

 
331,065

Work-in-process
297,606

 
280,208

Finished goods
80,772

 
66,933

 
$
993,527

 
$
931,845

Other current assets:
 
 
 
Contract assets
$
15,373

 
$

Deferred costs of revenue(1)
47,843

 

Prepaid expenses
57,947

 
47,088

Prepaid income tax and other taxes
3,295

 
23,452

Other current assets
20,541

 
14,619

 
$
144,999

 
$
85,159

Land, property and equipment, net:
 
 
 
Land
$
40,582

 
$
40,599

Buildings and leasehold improvements
333,224

 
335,647

Machinery and equipment
583,682

 
577,077

Office furniture and fixtures
22,272

 
22,171

Construction-in-process
15,085

 
9,180

 
994,845

 
984,674

Less: accumulated depreciation
(703,613
)
 
(698,368
)
 
$
291,232

 
$
286,306

Other non-current assets:
 
 
 
Executive Deferred Savings Plan(2)
$
203,370

 
$
197,213

Other non-current assets
21,799

 
19,606

 
$
225,169

 
$
216,819

Other current liabilities:
 
 
 
Executive Deferred Savings Plan(2)
$
203,989

 
$
199,505

Compensation and benefits
243,874

 
177,587

Other accrued expenses
93,357

 
123,869

Customer credits and advances
119,655

 
116,440

Warranty
347

 
42,258

Income taxes payable
69,822

 
23,287

Interest payable
42,275

 
16,947

 
$
773,319

 
$
699,893

Other non-current liabilities:
 
 
 
Income taxes payable
$
348,282

 
$
371,665

Pension liabilities
66,431

 
66,786

Other non-current liabilities
33,271

 
32,912

 
$
447,984

 
$
471,363

____________
(1)
Deferred costs of revenue were previously included under deferred system profit prior to the adoption of ASC 606.
(2)
KLA-Tencor has 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 associated with changes in the EDSP liability included in selling, general and administrative expense was $7.5 million and $6.8 million during the three months ended September 30, 2018 and 2017, respectively. The amount of net gains associated with changes in the EDSP assets included in selling, general and administrative expense was $7.4 million and $6.9 million during the three months ended September 30, 2018 and 2017, 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 the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2018.
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, 2018
$
(42,050
)
 
$
(9,277
)
 
$
11,841

 
$
(16,681
)
 
$
(56,167
)
 
 
 
 
 
 
 
 
 
 
Balance as of June 30, 2018
$
(29,974
)
 
$
(11,032
)
 
$
1,932

 
$
(14,859
)
 
$
(53,933
)

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
 
2018
 
2017
Unrealized gains (losses) on cash flow hedges from foreign exchange and interest rate contracts
 
Revenues
 
$
983

 
$
968

 
 
Costs of revenues
 
(134
)
 
961

 
 
Interest expense
 
188

 
189

 
 
Net gains (losses) reclassified from accumulated OCI
 
$
1,037

 
$
2,118

Unrealized gains (losses) on available-for-sale securities
 
Other expense (income), net
 
$
(481
)
 
$
6


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, 2018 and 2017 were $0.2 million, respectively. For additional details, refer to Note 11, “Employee Benefit Plans” of the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2018.