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

Financial Statement Components (Tables)

Financial Statement Components (Tables)

9 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Consolidated Balance Sheets



(In thousands)	As of March 31, 2020			As of June 30, 2019
Accounts receivable, net:
Accounts receivable, gross	$	1,131,068		$	1,002,114
Allowance for doubtful accounts	(11,805		)	(12,001		)
	$	1,119,263		$	990,113
Inventories:
Raw materials	$	449,251		$	444,627
Customer service parts	340,191			328,515
Work-in-process	324,423			285,191
Finished goods	150,265			204,167
	$	1,264,130		$	1,262,500
Other current assets:
Contract assets	$	91,382		$	94,015
Prepaid expenses	71,975			88,387
Deferred costs of revenue	73,326			70,721
Prepaid income and other taxes	36,870			51,889
Other current assets	26,988			18,065
	$	300,541		$	323,077
Land, property and equipment, net:
Land	$	67,859		$	67,883
Buildings and leasehold improvements	398,999			402,678
Machinery and equipment	659,048			669,316
Office furniture and fixtures	30,022			28,282
Construction-in-process	79,035			26,029
	1,234,963			1,194,188
Less: accumulated depreciation	(737,220		)	(745,389		)
	$	497,743		$	448,799
Other non-current assets:
Executive Deferred Savings Plan⁽¹⁾	$	187,936		$	207,581
Operating lease right of use assets	98,104			—
Other non-current assets	54,767			58,392
	$	340,807		$	265,973
Other current liabilities:
Compensation and benefits	$	287,012		$	226,462
Executive Deferred Savings Plan	189,331			208,926
Customer credits and advances	124,109			133,677
Other accrued expenses	164,195			202,647
Income taxes payable	31,601			23,350
Interest payable	34,651			31,992
Operating lease liabilities	28,520			—
	$	859,419		$	827,054
Other non-current liabilities:
Income taxes payable	$	383,356		$	392,266
Pension liabilities	80,628			79,622
Operating lease liabilities	67,524			—
Other non-current liabilities	144,436			116,009
	$	675,944		$	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 $(29.4) million and $19.3 million during the three months ended March 31, 2020 and 2019, respectively and was $(15.5) million and $7.0 million during the nine months ended March 31, 2020 and 2019, respectively. The amount of net gains (losses) associated with changes in the EDSP assets included in selling, general and administrative expense was $(29.4) million and $19.7 million during the three months ended March 31, 2020 and 2019, respectively and was $(15.3) million and $7.7 million during the nine months ended March 31, 2020 and 2019, 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 March 31, 2020	$	(47,144	)	$	(224	)	$	(23,382	)	$	(17,544	)	$	(88,294	)

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 March 31,						Nine Months Ended March 31,
Accumulated OCI Components	Statements of Operations	2020			2019			2020			2019
Unrealized gains (losses) on cash flow hedges from foreign exchange and interest rate contracts⁽¹⁾	Revenues	$	3,051		$	655		$	3,416		$	3,343
	Costs of revenues and operating expenses	12			(17		)	(1,806		)	(309		)
	Interest expense	(159		)	150			(358		)	527
	Other expense (income), net	—			158			—			158
	Net gains (losses) reclassified from accumulated OCI	$	2,904		$	946		$	1,252		$	3,719
Unrealized gains (losses) on available-for-sale securities	Other expense (income), net	$	(432	)	$	(313	)	$	(346	)	$	(1,263	)

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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 Notes to the Condensed Consolidated Financial Statements.