Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2018 | Jan. 18, 2019 | |
DEI [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2018 | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | KLA TENCOR CORP | |
Entity Central Index Key | 319,201 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Current Fiscal Year End Date | --06-30 | |
Trading Symbol | klac | |
Entity Common Stock, Shares Outstanding | 151,363,988 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Dec. 31, 2018 | Jun. 30, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 1,793,982 | $ 1,404,382 |
Marketable securities | 900,112 | 1,475,936 |
Accounts receivable, net | 658,080 | 651,678 |
Inventories | 1,005,990 | 931,845 |
Other current assets | 127,350 | 85,159 |
Total current assets | 4,485,514 | 4,549,000 |
Land, property and equipment, net | 306,351 | 286,306 |
Goodwill | 360,480 | 354,698 |
Deferred income taxes | 225,124 | 193,200 |
Purchased intangible assets, net | 23,818 | 19,333 |
Other non-current assets | 204,000 | 216,819 |
Total assets | 5,605,287 | 5,619,356 |
Current liabilities: | ||
Accounts payable | 152,491 | 169,354 |
Deferred system revenue | 196,242 | 0 |
Deferred service revenue | 168,936 | 69,255 |
Deferred system profit | 0 | 279,581 |
Current portion of long-term debt | 249,996 | 0 |
Other current liabilities | 714,873 | 699,893 |
Total current liabilities | 1,482,538 | 1,218,083 |
Non-current liabilities: | ||
Long-term debt | 1,988,382 | 2,237,402 |
Deferred service revenue | 90,466 | 71,997 |
Other non-current liabilities | 446,279 | 471,363 |
Total liabilities | 4,007,665 | 3,998,845 |
Commitments and contingencies (Note 13 and Note 14) | ||
Stockholders’ equity: | ||
Common stock and capital in excess of par value | 619,265 | 617,999 |
Retained earnings | 1,048,804 | 1,056,445 |
Accumulated other comprehensive income (loss) | (70,447) | (53,933) |
Total stockholders’ equity | 1,597,622 | 1,620,511 |
Total liabilities and stockholders’ equity | $ 5,605,287 | $ 5,619,356 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | ||||
Revenues | $ 1,119,898 | $ 975,822 | $ 2,213,158 | $ 1,945,403 |
Costs and expenses: | ||||
Costs of revenues | 408,260 | 347,002 | 789,647 | 700,119 |
Research and development | 165,903 | 156,700 | 319,433 | 303,387 |
Selling, general and administrative | 112,462 | 105,265 | 226,900 | 212,697 |
Interest expense | 26,538 | 27,372 | 52,900 | 57,948 |
Other expense (income), net | (9,228) | (7,824) | (19,253) | (12,207) |
Income before income taxes | 415,963 | 347,307 | 843,531 | 683,459 |
Provision for income taxes | 46,863 | 481,626 | 78,487 | 536,842 |
Net income (loss) | $ 369,100 | $ (134,319) | $ 765,044 | $ 146,617 |
Net income (loss) per share | ||||
Basic (in dollars per share) | $ 2.43 | $ (0.86) | $ 4.98 | $ 0.94 |
Diluted (in dollars per share) | $ 2.42 | $ (0.86) | $ 4.96 | $ 0.93 |
Weighted-average number of shares: | ||||
Basic (in shares) | 152,148 | 156,587 | 153,684 | 156,707 |
Diluted (in shares) | 152,648 | 156,587 | 154,389 | 157,688 |
Product | ||||
Revenues: | ||||
Revenues | $ 852,201 | $ 761,587 | $ 1,681,428 | $ 1,522,374 |
Service | ||||
Revenues: | ||||
Revenues | $ 267,697 | $ 214,235 | $ 531,730 | $ 423,029 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 369,100 | $ (134,319) | $ 765,044 | $ 146,617 |
Currency translation adjustments: | ||||
Change in currency translation adjustments | (991) | 4,821 | (4,073) | 6,379 |
Change in income tax benefit or expense | 0 | (1,836) | 0 | (2,339) |
Net change related to currency translation adjustments | (991) | 2,985 | (4,073) | 4,040 |
Cash flow hedges: | ||||
Change in net unrealized gains or losses | (18,982) | (5,188) | ||
Change in net unrealized gains or losses | 697 | 1,141 | ||
Reclassification adjustments for net gains or losses included in net income | (1,736) | (2,773) | ||
Reclassification adjustments for net gains or losses included in net income | (963) | (3,081) | ||
Change in income tax benefit or expense | 4,475 | 1,180 | ||
Change in income tax benefit or expense | 78 | 676 | ||
Net change related to cash flow hedges | (16,243) | (6,781) | ||
Net change related to cash flow hedges | (188) | (1,264) | ||
Net change related to unrecognized losses and transition obligations in connection with defined benefit plans | 413 | (59) | 555 | (93) |
Available-for-sale securities: | ||||
Change in net unrealized gains or losses | 2,649 | (5,863) | 4,759 | (5,196) |
Reclassification adjustments for net gains or losses included in net income | 469 | 69 | 950 | 63 |
Change in income tax benefit or expense | (577) | 1,315 | (1,079) | 1,251 |
Net change related to available-for-sale securities | 2,541 | (4,479) | 4,630 | (3,882) |
Other comprehensive income (loss) | (14,280) | (1,741) | (5,669) | (1,199) |
Total comprehensive income (loss) | $ 354,820 | $ (136,060) | $ 759,375 | $ 145,418 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||||
Net income (loss) | $ 369,100 | $ (134,319) | $ 765,044 | $ 146,617 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation and amortization | 31,893 | 31,412 | |||
Loss (gains) on unrealized foreign exchange and other | 4,790 | (883) | |||
Stock-based compensation expense | 31,833 | 27,770 | |||
Changes in assets and liabilities, net of assets acquired and liabilities assumed in business acquisitions: | |||||
Accounts receivable | (19,790) | $ (22,202) | (169,498) | ||
Inventories | (70,847) | (44,434) | |||
Other assets | 18,125 | 82,290 | |||
Accounts payable | (17,205) | 2,192 | |||
Deferred system revenue | (99,533) | 0 | |||
Deferred service revenue | (1,114) | 0 | |||
Deferred system profit | 0 | 69,179 | |||
Other liabilities | 20,381 | 358,355 | |||
Net cash provided by operating activities | 663,577 | 503,000 | |||
Cash flows from investing activities: | |||||
Acquisition of non-marketable securities | 0 | (3,377) | |||
Business acquisitions, net of cash acquired | (11,787) | (5,490) | |||
Capital expenditures | (48,696) | (29,125) | |||
Purchases of available-for-sale securities | (2,686) | (326,012) | |||
Proceeds from sale of available-for-sale securities | 198,608 | 106,601 | |||
Proceeds from maturity of available-for-sale securities | 382,809 | 391,760 | |||
Purchases of trading securities | (32,100) | (30,790) | |||
Proceeds from sale of trading securities | 37,334 | 35,382 | |||
Net cash provided by investing activities | 523,482 | 138,949 | |||
Cash flows from financing activities: | |||||
Proceeds from revolving credit facility, net of debt issuance costs | 0 | 248,693 | |||
Repayment of debt | 0 | (696,250) | |||
Issuance of common stock | 20,556 | 20,579 | |||
Tax withholding payments related to vested and released restricted stock units | (30,194) | (26,195) | |||
Common stock repurchases | (550,187) | (80,354) | |||
Payment of dividends to stockholders | (237,319) | (192,902) | |||
Net cash used in financing activities | (797,144) | (726,429) | |||
Effect of exchange rate changes on cash and cash equivalents | (315) | 4,823 | |||
Net increase (decrease) in cash and cash equivalents | 389,600 | (79,657) | |||
Cash and cash equivalents at beginning of period | 1,404,382 | 1,153,051 | |||
Cash and cash equivalents at end of period | 1,793,982 | 1,073,394 | 1,793,982 | 1,793,982 | 1,073,394 |
Supplemental cash flow disclosures: | |||||
Income taxes paid | 112,816 | 147,483 | |||
Interest paid | 51,673 | 58,698 | |||
Non-cash activities: | |||||
Business acquisition holdback amounts - investing activities | 440 | 0 | |||
Contingent consideration payable - financing activities | 2,529 | 0 | |||
Accrued purchases of land, property and equipment - investing activities | 7,705 | 5,548 | |||
Unsettled common stock repurchase - financing activities | 0 | 1,289 | |||
Dividends payable - financing activities | $ 5,404 | $ 7,590 | $ 5,404 | $ 5,404 | $ 7,590 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | NOTE 1 – BASIS OF PRESENTATION Basis of Presentation. For purposes of this report, “KLA,” “KLA-Tencor,” the “Company,” “we,” “our,” “us,” or similar references mean KLA-Tencor Corporation, and its majority-owned subsidiaries unless the context requires otherwise. The condensed consolidated financial statements have been prepared by us pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the unaudited interim financial statements reflect all adjustments (consisting only of normal, recurring adjustments) necessary for a fair statement of the financial position, results of operations, comprehensive income, and cash flows for the periods indicated. These financial statements and notes, however, should be read in conjunction with Item 8, “Financial Statements and Supplementary Data” included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018 , filed with the SEC on August 6, 2018 . The condensed consolidated financial statements include the accounts of KLA and its majority-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. The results of operations for the three and six months ended December 31, 2018 are not necessarily indicative of the results that may be expected for any other interim period or for the full fiscal year ending June 30, 2019 . Certain reclassifications have been made to the prior year’s Condensed Consolidated Financial Statements to conform to the current year presentation. The reclassifications did not have material effects on the prior year’s Condensed Consolidated Balance Sheets, Statements of Operations, Comprehensive Income and Cash Flows. Proposed Merger with Orbotech, Ltd. On March 18, 2018 , we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Orbotech, Ltd. (“Orbotech”) pursuant to which we would acquire Orbotech for $38.86 in cash and 0.25 of a share of our common stock in exchange for each ordinary share of Orbotech, which at the time of announcement valued Orbotech at $3.2 billion in enterprise value. The merger contemplated by the Merger Agreement (the “Orbotech Merger”) is subject to receipt of required regulatory approvals and satisfaction of the other customary closing conditions. KLA continues to have advanced discussions with the State Administration for Market Regulation of the People’s Republic of China (SAMR) regarding clearance of the proposed merger with a goal of obtaining clearance as soon as practicable in 2019. Management Estimates. The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions in applying our accounting policies that affect the reported amounts of assets and liabilities (and related disclosure of contingent assets and liabilities) at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Comparability. Effective on the first day of fiscal 2019, we adopted Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“ASC 606”) . Prior periods were not retrospectively restated, and accordingly, the consolidated balance sheet as of June 30, 2018 , and the condensed consolidated statements of operations for the three and six months ended December 31, 2017 were prepared using accounting standards that were different than those in effect for the three and six months ended December 31, 2018 . Recent Accounting Pronouncements. Recently Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASC 606, which supersedes the guidance in ASC 605, Revenue Recognition (“ ASC 605 ”). Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, ASC 606 requires enhanced disclosures, including disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. We adopted the ASC 606 as of July 1, 2018 in our first quarter of our fiscal year ending June 30, 2019, using the modified retrospective transition approach. For additional detail, refer to Note 2 “Revenue.” In January 2016, the FASB issued an accounting standard update that changes the accounting for financial instruments primarily related to equity investments (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee), financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. We adopted this update beginning in the first quarter of our fiscal year ending June 30, 2019 on a prospective basis and the adoption had no material impact on our condensed consolidated financial statements. In August 2016, the FASB issued an accounting standard update intended to clarify how certain cash receipts and cash payment are presented and classified in the statement of cash flows. We adopted this update beginning in the first quarter of our fiscal year ending June 30, 2019 on a retrospective basis and the adoption had no material impact on our condensed consolidated financial statements. In October 2016, the FASB issued an accounting standard update to recognize the income tax consequences of intra-entity transfers of assets other than inventory when they occur. This eliminates the exception to postpone recognition until the asset has been sold to an outside party. We adopted this update beginning in the first quarter of our fiscal year ending June 30, 2019 on a modified retrospective basis and the adoption had no material impact on our condensed consolidated financial statements. In January 2017, the FASB issued an accounting standard on clarifying the definition of a business, with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. We adopted this update beginning in the first quarter of our fiscal year ending June 30, 2019 on a prospective basis and the adoption had no material impact on our condensed consolidated financial statements. In January 2017, the FASB issued an accounting standard update to simplify the subsequent measurement of goodwill by removing the second step of the two-step impairment test, which requires an entity to determine the fair value of assets and liabilities similar to what is required in a purchase price allocation. Under the update, goodwill impairment will be calculated as the amount by which a reporting unit’s carrying value exceeds our fair value. We early adopted this update in the first quarter of our fiscal year ending June 30, 2019 on a prospective basis and the adoption had no material impact on our condensed consolidated financial statements. In March 2017, the FASB issued an accounting standard update that changes the statements of operation classification of net periodic benefit cost related to defined benefit pension and/or other post-retirement benefit plans. Under the update, employers will present the service cost component of net periodic benefit cost in the same statements of operations line item(s) as other employee compensation costs arising from services rendered during the period. Only the service cost component will be eligible for capitalization in assets. Employers will present the other components of the net periodic benefit costs separately from the line item(s) that includes the service cost and outside of any subtotal of operating income, if one is presented. We adopted this update beginning in the first quarter of our fiscal year ending June 30, 2019 on a retrospective basis and the adoption had no material impact on our condensed consolidated financial statements. In May 2017, the FASB issued an accounting standard update regarding stock compensation that provides guidance about which changes to the terms and conditions of a share-based payment award require an entity to apply modification accounting in order to reduce diversity in practice and reduce complexity. We adopted this update beginning in the first quarter of our fiscal year ending June 30, 2019 on a prospective basis and the adoption had no material impact on our condensed consolidated financial statements. In August 2017, the FASB issued an accounting standard update to hedge accounting to better align our risk management activities by refining financial and non-financial hedging strategy eligibilities. This update also amends the presentation and disclosure requirements to increase transparency to better understand an entity’s risk exposures and how hedging strategies are used to manage those exposures. We early adopted this update in the second quarter of our fiscal year ending June 30, 2019 under the modified retrospective approach. The cumulative effect adjustment for the elimination of the ineffectiveness was not material to our condensed consolidated financial statements. The presentation and disclosure have been amended on a prospective basis, as required by this update. In February 2018, the FASB issued an accounting standard update that provides an option to reclassify disproportional tax effects and other income tax effects (“stranded tax effects”) caused by the Tax Cuts and Jobs Act (“the Act”) from accumulated other comprehensive income (“AOCI”) to retained earnings. We early adopted this update in the first quarter of our fiscal year ending June 30, 2019 and applied this update in the period of adoption. As a result of the adoption, we made a reclassification from AOCI to beginning retained earnings of approximately $10.7 million related to the stranded tax effects. Updates Not Yet Effective In February 2016, the FASB issued an accounting standard update which amends the existing accounting standards for leases. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on our classification. Under the new guidance, a lessee will be required to recognize assets and liabilities for all leases with lease terms of more than 12 months using a modified retrospective transition method. In July 2018, the FASB issued an amendment to the standard which provide us an option to apply the practical expedient allowed in the standard retrospectively with the cumulative effect recognized as of the date of adoption. The update is effective for us beginning in the first quarter of our fiscal year ending June 30, 2020. Early adoption is permitted. We are currently evaluating the impact of this accounting standard update on our condensed consolidated financial statements. In June 2016, the FASB issued an accounting standard update that changes the accounting for recognizing impairments of financial assets. Under the update, credit losses for certain types of financial instruments will be estimated based on expected losses. The update also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. The update is effective for us beginning in the first quarter of our fiscal year ending June 30, 2021, with early adoption permitted starting in the first quarter of fiscal year ending June 30, 2020. We are currently evaluating the impact of this accounting standard update on our condensed consolidated financial statements. In August 2018, the FASB issued an accounting standard update which modifies the existing accounting standards for fair value measurement disclosure. This update eliminates the amount of and reasons for transfers between level 1 and level 2 of the fair value hierarchy, and the policy for timing of transfers between levels. This standard update is effective for us beginning in the first quarter of our fiscal year ending June 30, 2021, and early adoption is permitted. We are currently evaluating the impact of this accounting standard update on our condensed consolidated financial statements. In August 2018, the FASB issued an accounting standard update to amend the disclosure requirements related to defined benefit pension and other post-retirement plans. Some of the changes include adding a disclosure requirement for significant gains and losses related to changes in the benefit obligation for the period, and removing the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year. This standard update is effective for us for the fiscal year ending June 30, 2021, and early adoption is permitted. We are currently evaluating the impact of this accounting standard update on our condensed consolidated financial statements. In August 2018, the FASB issued an accounting standard update to align the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance clarifies which costs should be capitalized including the cost to acquire the license and the related implementation costs. This standard update is effective for us beginning in the first quarter of our fiscal year ending June 30, 2021, with an option to be adopted either prospectively or retrospectively. Early adoption is permitted. We are currently evaluating the impact of this accounting standard update on our condensed consolidated financial statements. Significant Accounting Policies. We updated our accounting policies for Revenue Recognition, Business Combinations, Global Intangible Low-Taxed Income (“GILTI”), and Derivative Financial Instruments. There has been no other material changes to our significant accounting policies in 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, 2018 . Revenue Recognition. We primarily derive revenue from the sale of process control and yield management solutions for the semiconductor and related nanoelectronics industries, maintenance and support of all these products, installation and training services and the sale of spare parts. Our solutions provide a comprehensive portfolio of inspection, metrology and data analytics products, which are accompanied by a flexible portfolio of services to enable our customers to maintain the performance and productivity of the solutions purchased. Our solutions are generally not sold with a right of return, nor have we experienced significant returns from or refunds to our customers. We account for a contract with a customer when there is approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectibility of consideration is probable. Our revenues are measured based on consideration stipulated in the arrangement with each customer, net of any sales incentives and amounts collected on behalf of third parties, such as sales taxes. The revenues are recognized as separate performance obligations that are satisfied by transferring control of the product or service to the customer. Our arrangements with our customers include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. A product or service is considered distinct if it is separately identifiable from other deliverables in the arrangement and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The transaction consideration, including any sales incentives, is allocated between separate performance obligations of an arrangement based on the stand-alone selling prices (“SSP”) for each distinct product or service. Management considers a variety of factors to determine the SSP, such as, historical standalone sales of products and services, discounting strategies and other observable data. From time to time, our contracts are modified to account for additional, or to change existing, performance obligations. Our contract modifications are generally accounted for prospectively. Product revenue We recognize revenue from product sales at a point in time when we have satisfied our performance obligation by transferring control of the product to the customer. We use judgment to evaluate whether the control has transferred by considering several indicators, including: • whether we have a present right to payment; • the customer has legal title; • the customer has physical possession; • the customer has significant risk and rewards of ownership; and • the customer has accepted the product, or whether customer acceptance is considered a formality based on history of acceptance of similar products (for example, when the customer has previously accepted the same tool, with the same specifications, and when we can objectively demonstrate that the tool meets all of the required acceptance criteria, and when the installation of the system is deemed perfunctory). Not all of the indicators need to be met for us to conclude that control has transferred to the customer. In circumstances in which revenue is recognized prior to the product acceptance, the portion of revenue associated with our performance obligations to install product is deferred and recognized upon acceptance. We enter into volume purchase agreements with some of our customers. We adjust the transaction consideration for estimated credits earned by our customers for such incentives. These credits are estimated based upon the forecasted and actual product sales for any given period, and agreed-upon incentive rate. The estimate is updated at each reporting period. We offer perpetual and term licenses for defects and data analysis software. The primary difference between perpetual and term licenses is the duration over which the customer can benefit from the use of the software, while the functionality and the features of the software are the same. The software is generally bundled with post-contract customer support (“PCS”), which includes unspecified software updates that are made available throughout the entire term of the arrangement. Revenue from software licenses is recognized at a point in time, when the software is made available to the customer. Revenue from PCS is deferred at contract inception and recognized ratably over the service period, or as services are performed. Services and spare parts revenue The majority of product sales include a standard 12 -month warranty that is not separately paid for by the customers. The customers may also purchase extended warranty for periods beyond the initial year as part of the initial product sale. We have concluded that the standard 12 -month warranty as well as any extended warranty periods included in the initial product sales are separate performance obligations. The estimated fair value of warranty services is deferred and recognized ratably as revenue over the warranty period, as the customer simultaneously receives and consumes the benefits of warranty services provided by us. Additionally, we offer product maintenance and support services, which the customer may purchase separately from the standard and extended warranty offered as part of the initial product sale. Revenue from separately negotiated maintenance and support service contracts is also recognized over time based on the terms of the applicable service period. Revenue from services performed in the absence of a maintenance contract, including training revenue, is recognized when the related services are performed. We also sell spare parts, revenue from which is recognized when control over the spare parts is transferred to the customer. Installation services include connecting and validating configuration of the product. In addition, several testing protocols are completed to confirm the equipment is performing to customer specifications. Revenue from product installation are deferred and recognized at a point in time, once installation is complete. Significant Judgments Our contracts with our customers often include promises to transfer multiple products and services. Each product and service is generally capable of being distinct and represents a separate performance obligation. Determining the SSP for each distinct performance obligation and allocation of consideration from an arrangement to the individual performance obligations and the appropriate timing of revenue recognition are significant judgments with respect to these arrangements. We typically estimate the SSP of products and services based on observable transactions when the products and services are sold on a standalone basis and those prices fall within a reasonable range. We typically have more than one SSP for individual products and services due to the stratification of these products by customers and circumstances. In these instances, we use information such as the size of the customer, geographic region, as well as customization of the products in determining the SSP. In instances where the SSP is not directly observable, we determine the SSP using information that includes market conditions, entity-specific factors, including discounting strategies, information about the customer or class of customer that is reasonably available and other observable inputs. While changes in the allocation of SSP between performance obligations will not affect the amount of total revenue recognized for a particular contract, any material changes could impact the timing of revenue recognition, which could have a material effect on our financial position and result of operations. Although the products are generally not sold with a right of return, we may provide other credits or sales incentives, which are accounted for either as variable consideration or material right, depending on the specific terms and conditions of the arrangement. These credits and incentives are estimated at contract inception and updated at the end of each reporting period if and when additional information becomes available. As outlined above, we use judgments to evaluate whether or not the customer has obtained control of the product and considers the several indicators in evaluating whether or not control has transferred to the customer. Not all of the indicators need to be met for us to conclude that control has transferred to the customer. Contract Assets/Liabilities The timing of revenue recognition, billings and cash collections may result in accounts receivable, contract assets, and contract liabilities (deferred revenue) on our condensed consolidated balance sheet. A receivable is recorded in the period we deliver products or provide services when we have an unconditional right to payment. Contract assets primarily relate to the value of products and services transferred to the customer for which the right to payment is not just dependent on the passage of time. Contract assets are transferred to receivable when rights to payment become unconditional. A contract liability is recognized when we receive payment or have an unconditional right to payment in advance of the satisfaction of performance. The contract liabilities represent (1) deferred product revenue related to the value of products that have been shipped and billed to customers and for which the control has not been transferred to the customers, and (2) deferred service revenue, which is recorded when we receive consideration, or such consideration is unconditionally due, from a customer prior to transferring services to the customer under the terms of a contract. Deferred service revenue typically results from warranty services, and maintenance and other service contracts. Contract assets and liabilities related to rights and obligations in a contract are recorded net in the condensed consolidated balance sheets. Upon the adoption of ASC 606, deferred costs of revenue is included in other current assets while under the legacy guidance deferred costs of revenue was included in deferred system profit. Business Combinations. We allocate the fair value of the purchase price of our acquisitions to the tangible assets acquired, liabilities assumed, and intangible assets acquired, including in-process research and development (“IPR&D”), based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these net tangible and intangible assets acquired is recorded as goodwill. Management's estimates of fair value are based upon assumptions believed to be reasonable, but our estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the measurement period, which will not exceed one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value of the purchase price of our acquisitions, whichever comes first, any subsequent adjustments are recorded to our condensed consolidated statements of operations. The fair value of IPR&D is initially capitalized as an intangible asset with an indefinite life and assessed for impairment thereafter. When an IPR&D project is completed, the IPR&D is reclassified as an amortizable purchased intangible asset and amortized over the asset’s estimated useful life. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. Derivative Financial Instruments. We use financial instruments, such as forward exchange contracts and currency options, to hedge a portion of, but not all, existing and forecasted foreign currency denominated transactions. The purpose of our foreign currency program is to manage the effect of exchange rate fluctuations on certain foreign currency denominated revenues, costs and eventual cash flows. The effect of exchange rate changes on forward exchange contracts is expected to offset the effect of exchange rate changes on the underlying hedged items. We also use interest rate lock agreements to hedge the risk associated with the variability of cash flows due to changes in the benchmark interest rate of the intended debt financing. We believe these financial instruments do not subject us to speculative risk that would otherwise result from changes in currency exchange rates or interest rates. All of our derivative financial instruments are recorded at fair value based upon quoted market prices for comparable instruments adjusted for risk of counterparty non-performance. For derivative instruments designated and qualifying as cash flow hedges of forecasted foreign currency denominated transactions or debt financing expected to occur within twelve to eighteen months, the effective portion of the gains or losses is reported in accumulated other comprehensive income (loss) (“OCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Prior to adopting the new accounting guidance for hedge accounting, time value was excluded from the assessment of effectiveness for derivative instruments designated as cash flow hedges. Time value was amortized on a mark-to-market basis and recognized in earnings over the life of the derivative contract. For derivative contracts executed after adopting the new accounting guidance, the election to include time value for the assessment of effectiveness is made on all forward contracts designated as cash flow hedges. The change in fair value of the derivative are recorded in OCI until the hedged transaction is recognized in earnings. The assessment effectiveness of options contracts designated as cash flow hedges continue to exclude time value after adopting the new accounting guidance. The initial value of the component excluded from the assessment of effectiveness are recognized in earnings over the life of the derivative contracts. Any difference between change in the fair value of the excluded components and the amounts recognized in earnings are recorded in OCI. For derivative instruments that are not designated as a cash flow hedge, gains and losses are recognized in other expense (income), net. We use foreign currency forward contracts to hedge certain foreign currency denominated assets or liabilities. The gains and losses on these derivative instruments are largely offset by the changes in the fair value of the assets or liabilities being hedged. Global Intangible Low-Taxed Income. The Tax Cuts and Jobs Act (the “Act”) includes provisions for Global Intangible Low-Taxed Income (“GILTI”) wherein taxes on foreign income are imposed in excess of a deemed return on tangible assets of foreign corporations. This income will effectively be taxed at a 10.5% tax rate in general. As a result, the Company’s deferred tax assets and liabilities were being evaluated to determine if the deferred tax assets and liabilities should be recognized for the basis differences expected to reverse as a result of GILTI provisions that are effective for the Company after the fiscal year ending June 30, 2018, or should the tax on GILTI provisions be recognized as period costs in each year incurred. The Company has elected to account for GILTI as a component of current period tax expense starting from the first quarter of the fiscal year ending June 30, 2019. |
Revenue
Revenue | 6 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | NOTE 2 – REVENUE New Revenue Accounting Standard Method and Impact of Adoption At the beginning of the fiscal year 2019, we adopted ASC 606 using the modified retrospective transition approach for all contracts completed and not completed as of the date of adoption. Under the modified retrospective transition approach, periods prior to the adoption date were not adjusted and continue to be reported in accordance with ASC 605. A cumulative effect of applying ASC 606 was recorded to the beginning retained earnings to reflect the impact of all existing arrangements under ASC 606. The cumulative effect of applying ASC 606 represents a net decrease of $21.0 million as of July 1, 2018 , which primarily related to the following: • A decrease of approximately $97.0 million in retained earnings related to the deferral of estimated fair value of the warranty services provided with our products for which revenue will be recognized in future periods under ASC 606. Further, upon adoption of ASC 606, we will recognize the standard warranty for a majority of products as a separate performance obligation, while in prior periods, we accounted for the estimated warranty cost as a charge to costs of sales when revenue was recognized. This was partially offset by an increase in retained earnings of approximately $37.0 million related to reversal of standard warranty expense, which was charged to cost of revenues in prior periods. • An increase in retained earnings of approximately $26.0 million due to a change in the timing of transfer of control over products to the customers. The following table summarizes the effects of adopting ASC 606 on our condensed consolidated balance sheet as of December 31, 2018 : December 31, 2018 (In thousands) As reported under ASC 606 Prior to adoption of ASC 606 Effect of changes ASSETS Accounts receivable, net $ 658,080 $ 678,863 $ (20,783 ) Other current assets 127,350 71,214 56,136 Deferred income taxes 225,124 206,674 18,450 LIABILITIES Deferred system revenue $ 196,242 $ — $ 196,242 Deferred service revenue 168,936 66,759 102,177 Deferred system profit — 319,696 (319,696 ) Other current liabilities 714,873 733,220 (18,347 ) Deferred service revenue, non-current 90,466 83,338 7,128 STOCKHOLDERS ’ EQUITY Retained earnings $ 1,048,804 $ 962,561 $ 86,243 Accumulated other comprehensive income (loss) (70,447 ) (70,502 ) 55 The following table summarizes the effects of adopting ASC 606 on our condensed consolidated statements of operations for the three months ended December 31, 2018 : Three months ended December 31, 2018 (In thousands, except per share amounts) As reported under ASC 606 Prior to adoption of ASC 606 Effect of changes Revenues: Product $ 852,201 $ 875,415 $ (23,214 ) Service 267,697 230,683 37,014 Costs and expenses: Costs of revenues 408,260 392,916 15,344 Other expense (income), net (9,228 ) (9,187 ) (41 ) Provision for income taxes 46,863 48,401 (1,538 ) Net income $ 369,100 $ 369,065 $ 35 Net income per share Basic $ 2.43 $ 2.43 $ — Diluted $ 2.42 $ 2.42 $ — The following table summarizes the effects of adopting ASC 606 on our condensed consolidated statements of operations for the six months ended December 31, 2018 : Six months ended December 31, 2018 (In thousands, except per share amounts) As reported under ASC 606 Prior to adoption of ASC 606 Effect of changes Revenues: Product $ 1,681,428 $ 1,576,088 $ 105,340 Service 531,730 460,643 71,087 Costs and expenses: Costs of revenues 789,647 734,790 54,857 Other expense (income), net (19,253 ) (19,213 ) (40 ) Provision for income taxes 78,487 64,335 14,152 Net income $ 765,044 $ 657,586 $ 107,458 Net income per share: Basic $ 4.98 $ 4.29 $ 0.69 Diluted $ 4.96 $ 4.27 $ 0.69 Under ASC 606, revenue is recognized earlier than it would have been recognized under legacy guidance primarily due to our assessment of timing of transfer of control. Additionally, we render standard warranty coverage on our products for 12 months , providing labor and parts necessary to repair and maintain the products during the warranty period. Prior to adoption of ASC 606, we accounted for the estimated warranty cost as a charge to costs of sales when revenue was recognized. Upon adoption of ASC 606, the standard warranty for the majority of products is recognized as a separate performance obligation in service revenue. Contract Balances As of As of (In thousands, except for percentage) December 31, 2018 July 1, 2018 $ Change % Change Accounts receivable, net $ 658,080 $ 635,878 $ 22,202 3.49 % Contract assets $ 23,316 $ 14,727 $ 8,589 58.32 % Contract liabilities $ 455,644 $ 556,691 $ (101,047 ) (18.15 )% Our payment terms and conditions vary by contract type, although terms generally include a requirement of payment of 70% to 90% of total contract consideration within 30 to 60 days of shipment, with the remainder payable within 30 days of acceptance . The change in contract assets during the six months ended December 31, 2018 was mainly due to $23.2 million of revenue recognized in excess of the amounts billed to the customers, partially offset by $14.6 million of contract assets reclassified to net accounts receivable as our right to consideration for these contract assets became unconditional. Contract assets are included in Other current assets on our condensed consolidated balance sheet. During the six months ended December 31, 2018 , we recognized revenue of $371.4 million that was included in contract liabilities as of July 1, 2018 . This was partially offset by the value of products and services billed to customers for which control of the products and service has not transferred to the customers. Contract liabilities are included in current and non-current liabilities on our condensed consolidated balance sheets. Remaining Performance Obligations As of December 31, 2018 , we had $1.66 billion of remaining performance obligations, which represents our obligation to deliver products and services, and consists primarily of sales orders where written customer requests have been received. We expect to recognize approximately 5% to 15% of these performance obligations as revenue beyond the next twelve months, subject to risk of delays, pushouts, and cancellation by the customer, usually with limited or no penalties. Refer to Note 17 “Segment Reporting and Geographic Information” for information related to revenue by geographic region as well as significant product and service offerings. Practical expedients We apply the following practical expedients: • We account for shipping and handling costs as activities to fulfill the promise to transfer the goods, instead of a promised service to our customer. • We have elected to not adjust the promised amount of consideration for the effects of a significant financing component as we expect, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will generally be one year or less. • We have elected to expense costs to obtain a contract as incurred because the expected amortization period is one year or less. • We have elected to reflect the aggregate effect of all modifications that occurred before July 1, 2018 in determining the transaction price, identifying the satisfied and unsatisfied performance obligations, and allocating the transaction price to the performance obligations. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 3 – FAIR VALUE MEASUREMENTS Our financial assets and liabilities are measured and recorded at fair value, except for our debt and certain equity investments in privately-held companies. Prior to July 1, 2018 , the equity investments were generally accounted for under the cost method of accounting and were periodically assessed for other-than-temporary impairment when an event or circumstance indicated that an other-than-temporary decline in value may have occurred. Effective July 1, 2018 , equity investments without a readily available fair value are accounted for using the measurement alternative. The measurement alternative is calculated as cost minus impairment, if any, plus or minus changes resulting from observable price changes. Our non-financial assets, such as goodwill, intangible assets, and land, property and equipment, are recorded at cost and are assessed for impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred. Fair Value of Financial Instruments. We have evaluated the estimated fair value of financial instruments using available market information and valuations as provided by third-party sources. The use of different market assumptions and/or estimation methodologies could have a significant effect on the estimated fair value amounts. The fair value of our cash equivalents, accounts receivable, accounts payable and other current assets and liabilities approximate their carrying amounts due to the relatively short maturity of these items. Fair Value Hierarchy. The authoritative guidance for fair value measurements establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1 Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access. Level 2 Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. Level 3 Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. As of December 31, 2018 , the types of instruments valued based on quoted market prices in active markets included money market funds, certain U.S. Treasury securities and U.S. Government agency securities. Such instruments are generally classified within Level 1 of the fair value hierarchy. The types of instruments valued based on other observable inputs included corporate debt securities, sovereign securities and certain U.S. Treasury securities. The market inputs used to value these instruments generally consist of market yields, reported trades and broker/dealer quotes. Such instruments are generally classified within Level 2 of the fair value hierarchy. The principal market in which we execute our foreign currency contracts is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants generally are large financial institutions. Our foreign currency contracts’ valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. These contracts are typically classified within Level 2 of the fair value hierarchy. The fair value of contingent consideration payable, which resulted from the acquisitions of privately-held companies, was classified as Level 3 and estimated using significant inputs that were not observable in the market. Financial assets (excluding cash held in operating accounts and time deposits) and liabilities measured at fair value on a recurring basis, as of the date indicated below, were presented on our Condensed Consolidated Balance Sheet as follows: As of December 31, 2018 (In thousands) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Little or no market activity Inputs (Level 3) Assets Cash equivalents: Money market funds and other $ 877,527 $ 877,527 $ — $ — U.S. Treasury securities 668,058 — 668,058 — Marketable securities: Corporate debt securities 500,594 — 500,594 — Sovereign securities 10,919 — 10,919 — U.S. Government agency securities 172,615 172,615 — — U.S. Treasury securities 211,588 211,588 — — Total cash equivalents and marketable securities (1) 2,441,301 1,261,730 1,179,571 — Other current assets: Derivative assets 1,732 — 1,732 — Other non-current assets: Executive Deferred Savings Plan 181,104 137,301 43,803 — Total financial assets (1) $ 2,624,137 $ 1,399,031 $ 1,225,106 $ — Liabilities Other current liabilities: Derivative liabilities $ (14,318 ) $ — $ (14,318 ) $ — Contingent consideration payable (2,529 ) — — (2,529 ) Total financial liabilities $ (16,847 ) $ — $ (14,318 ) $ (2,529 ) ________________ (1) Excludes cash of $204.5 million held in operating accounts and time deposits of $48.3 million as of December 31, 2018 . Financial assets (excluding cash held in operating accounts and time deposits) and liabilities measured at fair value on a recurring basis, as of the date indicated below, were presented on our Condensed Consolidated Balance Sheet as follows: As of June 30, 2018 (In thousands) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Assets Cash equivalents: Corporate debt securities $ 4,995 $ — $ 4,995 Money market funds and other 863,115 863,115 — U.S. Government agency securities 7,675 — 7,675 U.S. Treasury securities 1,996 — 1,996 Marketable securities: Corporate debt securities 735,408 — 735,408 Sovereign securities 17,142 — 17,142 U.S. Government agency securities 316,022 299,501 16,521 U.S. Treasury securities 405,654 364,574 41,080 Total cash equivalents and marketable securities (1) 2,352,007 1,527,190 824,817 Other current assets: Derivative assets 5,385 — 5,385 Other non-current assets: Executive Deferred Savings Plan 197,213 143,580 53,633 Total financial assets (1) $ 2,554,605 $ 1,670,770 $ 883,835 Liabilities Other current liabilities: Derivative liabilities $ (6,828 ) $ — $ (6,828 ) Total financial liabilities $ (6,828 ) $ — $ (6,828 ) ________________ (1) Excludes cash of $473.8 million held in operating accounts and time deposits of $54.5 million as of June 30, 2018 . There were no transfers between Level 1 and Level 2 fair value measurements during the six months ended December 31, 2018 . We did not have any assets or liabilities measured at fair value on a recurring basis within Level 3 fair value measurements as of June 30, 2018 . |
Financial Statement Components
Financial Statement Components | 6 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
FINANCIAL STATEMENT COMPONENTS | NOTE 4 – FINANCIAL STATEMENT COMPONENTS Consolidated Balance Sheets (In thousands) As of As of Accounts receivable, net: Accounts receivable, gross $ 669,650 $ 663,317 Allowance for doubtful accounts (11,570 ) (11,639 ) $ 658,080 $ 651,678 Inventories: Customer service parts $ 275,045 $ 253,639 Raw materials 340,253 331,065 Work-in-process 305,864 280,208 Finished goods 84,828 66,933 $ 1,005,990 $ 931,845 Other current assets: Contract assets $ 23,316 $ — Deferred costs of revenue (1) 32,821 — Prepaid expenses 48,411 47,088 Prepaid income and other taxes 12,181 23,452 Other current assets 10,621 14,619 $ 127,350 $ 85,159 Land, property and equipment, net: Land $ 40,593 $ 40,599 Buildings and leasehold improvements 340,722 335,647 Machinery and equipment 602,387 577,077 Office furniture and fixtures 22,569 22,171 Construction-in-process 16,360 9,180 1,022,631 984,674 Less: accumulated depreciation (716,280 ) (698,368 ) $ 306,351 $ 286,306 Other non-current assets: Executive Deferred Savings Plan (2) $ 181,103 $ 197,213 Other non-current assets 22,897 19,606 $ 204,000 $ 216,819 Other current liabilities: Executive Deferred Savings Plan (2) $ 181,976 $ 199,505 Compensation and benefits 230,079 177,587 Other accrued expenses 107,644 123,869 Customer credits and advances 144,408 116,440 Warranty 666 42,258 Income taxes payable 33,153 23,287 Interest payable 16,947 16,947 $ 714,873 $ 699,893 Other non-current liabilities: Income taxes payable $ 341,745 $ 371,665 Pension liabilities 67,139 66,786 Other non-current liabilities 37,395 32,912 $ 446,279 $ 471,363 ________________ (1) Deferred costs of revenue were previously included under deferred system profit prior to the adoption of ASC 606. (2) 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 $(19.8) million and $7.0 million during the three months ended December 31, 2018 and 2017 , respectively and was $(12.3) million and $13.8 million during the six months ended December 31, 2018 and 2017 , respectively. The amount of net gains (losses) associated with changes in the EDSP assets included in selling, general and administrative expense was $(19.4) million and $7.0 million during the three months ended December 31, 2018 and 2017 , respectively and was $(12.0) million and $13.9 million the six months ended December 31, 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 our 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 December 31, 2018 $ (43,041 ) $ (6,736 ) $ (4,402 ) $ (16,268 ) $ (70,447 ) Balance as of June 30, 2018 $ (29,974 ) $ (11,032 ) $ 1,932 $ (14,859 ) $ (53,933 ) 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 Six months ended Accumulated OCI Components Statements of Operations 2018 2017 2018 2017 Unrealized gains (losses) on cash flow hedges from foreign exchange and interest rate contracts (1) Revenues $ 1,705 $ 397 $ 2,688 $ 1,365 Costs of revenues (158 ) 377 (292 ) 1,338 Interest expense 189 189 377 378 Net gains (losses) reclassified from accumulated OCI $ 1,736 $ 963 $ 2,773 $ 3,081 Unrealized gains (losses) on available-for-sale securities Other expense (income), net $ (469 ) $ (69 ) $ (950 ) $ (63 ) __________________ (1) Reflects the adoption of the new accounting guidance for hedge accounting in the second quarter of fiscal year 2019. For additional details, refer to Note 15, “Derivative Instruments and Hedging Activities.” The amounts reclassified out of accumulated OCI related to our defined benefit pension plans, which were recognized as a component of net periodic cost for the three and six months ended December 31, 2018 were $0.2 million and $0.4 million , respectively. The amounts reclassified out of accumulated OCI related to our defined benefit pension plans, which were recognized as a component of net periodic cost for the three and six months ended December 31, 2017 were $0.4 million and $0.8 million , respectively. For additional details, refer to Note 11, “Employee Benefit Plans” of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018 . |
Marketable Securities
Marketable Securities | 6 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
MARKETABLE SECURITIES | NOTE 5 – MARKETABLE SECURITIES The amortized cost and fair value of marketable securities as of the dates indicated below were as follows: As of December 31, 2018 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities $ 505,296 $ — $ (4,702 ) $ 500,594 Money market funds and other 877,527 — — 877,527 Sovereign securities 11,008 — (89 ) 10,919 U.S. Government agency securities 174,058 2 (1,445 ) 172,615 U.S. Treasury securities 881,704 36 (2,094 ) 879,646 Subtotal 2,449,593 38 (8,330 ) 2,441,301 Add: Time deposits (1) 48,265 — — 48,265 Less: Cash equivalents 1,589,418 36 — 1,589,454 Marketable securities $ 908,440 $ 2 $ (8,330 ) $ 900,112 As of June 30, 2018 (In thousands) Amortized Gross Gross Fair Corporate debt securities $ 747,763 $ 148 $ (7,508 ) $ 740,403 Money market funds and other 863,115 — — 863,115 Sovereign securities 17,293 — (151 ) 17,142 U.S. Government agency securities 326,508 16 (2,827 ) 323,697 U.S. Treasury securities 411,329 3 (3,682 ) 407,650 Subtotal 2,366,008 167 (14,168 ) 2,352,007 Add: Time deposits (1) 54,537 — — 54,537 Less: Cash equivalents 930,608 — — 930,608 Marketable securities $ 1,489,937 $ 167 $ (14,168 ) $ 1,475,936 ________________ (1) Time deposits excluded from fair value measurements. Our investment portfolio consists of both corporate and government securities that have a maximum maturity of three years . The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields. As yields increase, those securities with a lower yield-at-cost show a mark-to-market unrealized loss. Most of our unrealized losses are due to changes in market interest rates and bond yields. We believe that we have the ability to realize the full value of all of these investments upon maturity. The following table summarizes the fair value and gross unrealized losses of our investments that were in an unrealized loss position as of the date indicated below: As of December 31, 2018 (In thousands) Fair Value Gross Unrealized Losses (1) Corporate debt securities $ 497,833 $ (4,702 ) U.S. Treasury securities 211,588 (2,094 ) U.S. Government agency securities 169,967 (1,445 ) Sovereign securities 10,919 (89 ) Total $ 890,307 $ (8,330 ) __________________ (1) As of December 31, 2018 , the amount of total gross unrealized losses related to investments that had been in a continuous loss position for 12 months or more was $7.9 million . The contractual maturities of securities classified as available-for-sale, regardless of their classification on our Condensed Consolidated Balance Sheet, as of the date indicated below were as follows: As of December 31, 2018 (In thousands) Amortized Cost Fair Value Due within one year $ 567,385 $ 563,316 Due after one year through three years 341,055 336,796 $ 908,440 $ 900,112 Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Realized gains and losses on available-for-sale securities for the three and six months ended December 31, 2018 and 2017 were immaterial. |
Business Combinations
Business Combinations | 6 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | NOTE 6 - BUSINESS COMBINATIONS In September 2018, we acquired certain assets and assumed certain liabilities of a privately-held company for a total purchase consideration of $4.1 million , which includes a promise to pay an additional consideration of up to $1.5 million contingent on the achievement of certain milestones. As of December 31, 2018 , the estimated fair value of the additional consideration was $0.9 million , which is classified as a current liability on the condensed consolidated balance sheet. In July 2018, we acquired the outstanding shares of a privately-held company for a total purchase consideration of $11.3 million , including the fair value of the promise to pay an additional consideration of up to $4.5 million contingent on the achievement of certain revenue milestones. As of December 31, 2018 , the estimated fair value of the additional consideration was $1.6 million , which is classified as a current liability on the condensed consolidated balance sheet. We have included the financial results of the acquisitions completed during the first quarter of the fiscal year 2019 in our condensed consolidated financial statements from the date of acquisition. These results were not individually or in aggregate material to our condensed consolidated financial statements. For the fiscal year ended June 30, 2018 , we acquired a product line from Keysight Technologies, Inc., a related party, for a total purchase consideration of $12.1 million , of which $5.2 million was allocated to goodwill based on the fair value at the acquisition date. Goodwill recognized was deductible for income tax purposes. For additional details, refer to Note 5 “Business Combinations,” of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018 . |
Goodwill and Purchased Intangib
Goodwill and Purchased Intangible Assets | 6 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND PURCHASED INTANGIBLE ASSETS | NOTE 7 – GOODWILL AND PURCHASED INTANGIBLE ASSETS Goodwill We have four reporting units: Wafer Inspection, Patterning, Global Service and Support (“GSS”), and Others. The following table presents goodwill carrying value and the movements by reporting unit during the six months ended December 31, 2018 : (In thousands) Wafer Inspection Patterning GSS Others Total Balance as of June 30, 2018 $ 281,005 $ 53,255 $ 8,039 $ 12,399 $ 354,698 Acquired goodwill — — 4,631 1,176 5,807 Foreign currency and other adjustments (25 ) — — — (25 ) Balance as of December 31, 2018 $ 280,980 $ 53,255 $ 12,670 $ 13,575 $ 360,480 The change in goodwill during the six months ended December 31, 2018 resulted primarily from the acquisition of certain assets and liabilities of privately-held companies. For additional details, refer to Note 6 “Business Combinations”. As of December 31, 2018 , there have been no significant events or circumstances affecting the carrying value of goodwill subsequent to the qualitative assessment performed in the third quarter of the fiscal year ended June 30, 2018 . For additional details, refer to Note 6 “Goodwill and Purchased Intangible Assets,” of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018 . The next annual assessment of goodwill by reporting unit is scheduled to be performed in the third quarter of the fiscal year ending June 30, 2019 . Purchased Intangible Assets The components of purchased intangible assets as of the dates indicated below were as follows: (In thousands) As of As of Category Range of Useful Lives Gross Carrying Amount Accumulated Amortization and Impairment Net Amount Gross Carrying Amount Accumulated Amortization and Impairment Net Amount Existing technology 4-7 years $ 166,029 $ 146,001 $ 20,028 $ 160,859 $ 144,202 $ 16,657 Trade name/Trademark 5-7 years 21,073 20,143 930 20,993 20,060 933 Customer relationships 4-7 years 58,050 55,388 2,662 56,680 55,136 1,544 Other <1-5 years 1,270 1,072 198 660 461 199 Total $ 246,422 $ 222,604 $ 23,818 $ 239,192 $ 219,859 $ 19,333 Purchased intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. For the three months ended December 31, 2018 and 2017, amortization expense for purchased intangible assets was $1.3 million and $1.2 million , respectively. For the six months ended December 31, 2018 and 2017, amortization expense for purchased intangible assets was $2.7 million and $2.4 million , respectively. The change in purchased intangible assets gross carrying amount resulted primarily from the acquisition of certain assets and liabilities of privately-held companies. For additional details, refer to Note 6 “Business Combinations.” Based on the purchased intangible assets gross carrying amount recorded as of December 31, 2018 , and assuming no subsequent additions to, or impairment of, the underlying assets, the remaining estimated annual amortization expense is expected to be as follows: Fiscal year ending June 30: Amortization (In thousands) 2019 (remaining 6 months) $ 2,218 2020 4,438 2021 4,438 2022 4,438 2023 4,242 Thereafter 4,044 Total $ 23,818 |
Debt
Debt | 6 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 8 – DEBT The following table summarizes our debt as of December 31, 2018 and June 30, 2018 : As of December 31, 2018 As of June 30, 2018 Amount (In thousands) Effective Interest Rate Amount Effective Interest Rate Fixed-rate 3.375% Senior Notes due on November 1, 2019 $ 250,000 3.377 % $ 250,000 3.377 % Fixed-rate 4.125% Senior Notes due on November 1, 2021 500,000 4.128 % 500,000 4.128 % Fixed-rate 4.650% Senior Notes due on November 1, 2024 (1) 1,250,000 4.682 % 1,250,000 4.682 % Fixed-rate 5.650% Senior Notes due on November 1, 2034 250,000 5.670 % 250,000 5.670 % Total 2,250,000 2,250,000 Unamortized discount (2,343 ) (2,523 ) Unamortized debt issuance costs (9,279 ) (10,075 ) Total $ 2,238,378 $ 2,237,402 Reported as: Current portion of long-term debt $ 249,996 $ — Long-term debt 1,988,382 2,237,402 Total $ 2,238,378 $ 2,237,402 __________________ (1) The effective interest rate disclosed above for this series of Senior Notes excludes the impact of the treasury rate lock hedge discussed below. The effective interest rate including the impact of the treasury rate lock hedge was 4.626% . As of December 31, 2018 , future principal payments for the long-term debt are $250.0 million in fiscal year 2020 ; $500.0 million in fiscal year 2022 ; and $1.50 billion after fiscal year 2023 . Senior Notes: In November 2014, we issued $2.50 billion aggregate principal amount of senior, unsecured long-term notes (collectively referred to as “Senior Notes”) as part of the leveraged recapitalization plan. The interest rate specified for each series of the Senior Notes will be subject to adjustments from time to time if Moody’s Investor Service, Inc. (“Moody’s”) or Standard & Poor’s Ratings Services (“S&P”) or, under certain circumstances, a substitute rating agency selected by us as a replacement for Moody’s or S&P, as the case may be (a “Substitute Rating Agency”), downgrades (or subsequently upgrades) its rating assigned to the respective series of Senior Notes such that the adjusted rating is below investment grade. In October 2014, we entered into a series of forward contracts to lock the 10-year treasury rate (“benchmark rate”) on a portion of the Senior Notes with a notional amount of $1.00 billion in aggregate. For additional details, refer to Note 15, “Derivative Instruments and Hedging Activities” of this report, and Note 7 “Debt” of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018 . The original discount on the Senior Notes amounted to $4.0 million and is being amortized over the life of the debt. Interest is payable semi-annually on May 1 and November 1 of each year. The indenture for the Senior Notes (the “Indenture”) includes covenants that limit our ability to grant liens on our facilities and enter into sale and leaseback transactions, subject to certain allowances under which certain sale and leaseback transactions are not restricted. In certain circumstances involving a change of control followed by a downgrade of the rating of a series of Senior Notes by at least two of Moody’s, S&P and Fitch Inc., unless we have exercised our rights to redeem the Senior Notes of such series, we will be required to make an offer to repurchase all or, at the holder’s option, any part, of each holder’s Senior Notes of that series pursuant to the offer described below (the “Change of Control Offer”). In the Change of Control Offer, we will be required to offer payment in cash equal to 101% of the aggregate principal amount of Senior Notes repurchased plus accrued and unpaid interest, if any, on the Senior Notes repurchased, up to, but not including, the date of repurchase. Based on the trading prices of the Senior Notes on the applicable dates, the fair value of the Senior Notes as of December 31, 2018 and June 30, 2018 was approximately $2.30 billion and $2.33 billion , respectively. While the Senior Notes are recorded at cost, the fair value of the long-term debt was determined based on quoted prices in markets that are not active; accordingly, the long-term debt is categorized as Level 2 for purposes of the fair value measurement hierarchy. As of December 31, 2018 , we were in compliance with all of our covenants under the Indenture associated with the Senior Notes. Revolving Credit Facility: In November 2017, we entered into a Credit Agreement (the “Credit Agreement”) providing for a $750.0 million five -year unsecured Revolving Credit Facility (the “Revolving Credit Facility”), which replaced our prior Credit Facility. Subject to the terms of the Credit Agreement, the Revolving Credit Facility may be increased in an amount up to $250.0 million in the aggregate. In November 2018, we entered into an Incremental Facility, Extension and Amendment Agreement (the “Amendment”), which amends the Credit Agreement to (a) extend the Maturity Date (the “Maturity Date”) from November 30, 2022 to November 30, 2023 , (b) increase the total commitment by $250.0 million and (c) effect certain other amendments to the Credit Agreement as set forth in the Amendment. After giving effect to the Amendment, the total commitments under the Credit Agreement are $1.00 billion . We may borrow, repay and reborrow funds under the Revolving Credit Facility until the Maturity Date, at which time such Revolving Credit Facility will terminate, and all outstanding loans under such facility, together with all accrued and unpaid interest, must be repaid. We may prepay outstanding borrowings under the Revolving Credit Facility at any time without a prepayment penalty. Borrowings under the Revolving Credit Facility will bear interest, at our option, at either: (i) the Alternative Base Rate (“ABR”) plus a spread, which ranges from 0 bps to 75 bps , or (ii) the London Interbank Offered Rate (“LIBOR”) plus a spread, which ranges from 100 bps to 175 bps . The spreads under ABR and LIBOR are subject to adjustment in conjunction with credit rating downgrades or upgrades. We are also obligated to pay an annual commitment fee on the daily undrawn balance of the Revolving Credit Facility, which ranges from 10 bps to 25 bps , subject to an adjustment in conjunction with changes to our credit rating. As of December 31, 2018 , we pay an annual commitment fee of 12.5 bps on the daily undrawn balance of the Revolving Credit Facility. The Revolving Credit Facility requires us to maintain an interest expense coverage ratio as described in the Credit Agreement, on a quarterly basis, covering the trailing four consecutive fiscal quarters of no less than 3.50 to 1.00. In addition, we are required to maintain the maximum leverage ratio as described in the Credit Agreement, on a quarterly basis of 3.00 to 1.00, covering the trailing four consecutive fiscal quarters for each fiscal quarter, which can be increased to 4.00 to 1.00 for a period of time in connection with a material acquisition or a series of material acquisitions. We were in compliance with all covenants under the Credit Agreement as of December 31, 2018 and had no outstanding borrowings under the unfunded Revolving Credit Facility. |
Equity and Long-Term Incentive
Equity and Long-Term Incentive Compensation Plans | 6 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EQUITY AND LONG-TERM INCENTIVE COMPENSATION PLANS | NOTE 9 – EQUITY AND LONG-TERM INCENTIVE COMPENSATION PLANS Equity Incentive Program As of December 31, 2018 , we were able to issue equity incentive awards, such as restricted stock units (“RSUs”) and stock options, to our employees, consultants and members of our Board of Directors under our 2004 Equity Incentive Plan (the “2004 Plan”) with 13.4 million shares available for issuance. For details of the 2004 Plan refer to Note 8 “Equity and Long-Term Incentive Compensation Plans,” of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018 . Equity Incentive Plans - General Information The following table summarizes the combined activity under our equity incentive plans for the indicated periods: (In thousands) Available For Grant (1) Balance as of June 30, 2018 3,680 Plan shares increased 12,000 Restricted stock units granted (2) (675 ) Restricted stock units granted adjustment (3) 5 Restricted stock units canceled 20 Balance as of December 31, 2018 15,030 __________________ (1) The number of RSUs reflects the application of the award multiplier (1.8x or 2.0x depending on the grant date of the applicable award). (2) Includes RSUs granted to senior management during the six months ended December 31, 2018 with performance-based vesting criteria (in addition to service-based vesting criteria for any of such RSUs that are deemed to have been earned). As of December 31, 2018 , it had not yet been determined the extent to which (if at all) the performance-based vesting criteria had been satisfied. Therefore, this line item includes all such performance-based RSUs granted during the six months ended December 31, 2018 , 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 six months ended December 31, 2018 reflects the application of the multiplier described above). (3) Represents the portion of RSUs granted with performance-based vesting criteria and reported at the actual number of shares issued upon achievement of the performance vesting criteria during the six months ended December 31, 2018 . The fair value of stock-based awards is measured at the grant date and is recognized as an expense over the employee’s requisite service period. For RSUs granted without “dividend equivalent” rights, fair value is calculated using the closing price of our common stock on the grant date, adjusted to exclude the present value of dividends which are not accrued on those RSUs. The fair value for RSUs granted with “dividend equivalent” rights is determined using the closing price of our common stock on the grant date. The fair value for purchase rights under our Employee Stock Purchase Plan is determined using a Black-Scholes model. The following table shows stock-based compensation expense for the indicated periods: Three months ended Six months ended (In thousands) 2018 2017 2018 2017 Stock-based compensation expense by: Costs of revenues $ 1,823 $ 1,656 $ 3,654 $ 3,072 Research and development 2,483 2,275 5,002 4,446 Selling, general and administrative 11,389 9,808 23,177 20,252 Total stock-based compensation expense $ 15,695 $ 13,739 $ 31,833 $ 27,770 The following table shows stock-based compensation capitalized as inventory as of the dates indicated below: (In thousands) As of As of Inventory $ 4,859 $ 4,580 Restricted Stock Units The following table shows the activity and weighted-average grant date fair value for RSUs during the six months ended December 31, 2018 : Shares (1) (In thousands) Weighted-Average Grant Date Fair Value Outstanding restricted stock units as of June 30, 2018 (2) 2,014 $ 76.50 Granted (2) 338 $ 117.21 Granted adjustments (3) (2 ) $ 50.88 Vested and released (383 ) $ 66.41 Withheld for taxes (264 ) $ 66.41 Forfeited (10 ) $ 81.55 Outstanding restricted stock units as of December 31, 2018 (2) 1,693 $ 88.48 __________________ (1) Share numbers reflect actual shares subject to awarded RSUs. Under the terms of the 2004 Plan, the number of shares subject to each award reflected in this number is multiplied by either 1.8 x or 2.0 x (depending on the grant date of the award) to calculate the impact of the award on the share reserve under the 2004 Plan. (2) Includes RSUs granted to senior management with performance-based vesting criteria (in addition to service-based vesting criteria for any of such RSUs that are deemed to have been earned). As of December 31, 2018 , it had not yet been determined the extent to which (if at all) the performance-based vesting criteria had been satisfied. Therefore, this line item includes all such performance-based RSUs, reported at the maximum possible number of shares ( 42 thousand shares for the fiscal year ended June 30, 2017, 0.2 million shares for the fiscal year ended June 30, 2018 and 0.2 million shares for the six months ended December 31, 2018 ) that may ultimately be issuable if all applicable performance-based criteria are achieved at their maximum and all applicable service-based criteria are fully satisfied. (3) Represents the portion of RSUs granted with performance-based vesting criteria and reported at the actual number of shares issued upon achievement of the performance vesting criteria during six months ended December 31, 2018 . The RSUs granted by us generally vest (a) with respect to awards with only service-based vesting criteria, in three or four equal installments and (b) with respect to awards with both performance-based and service-based vesting criteria, in two equal installments on the third and fourth anniversaries of the grant date, in each case subject to the recipient remaining employed by us as of the applicable vesting date. The RSUs granted to the independent members of the Board of Directors' vest annually. 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 Six months ended (In thousands, except for weighted-average grant date fair value) 2018 2017 2018 2017 Weighted-average grant date fair value per unit $ 96.51 $ 105.15 $ 117.21 $ 91.39 Grant date fair value of vested restricted stock units $ 6,862 $ 5,322 $ 42,934 $ 41,856 Tax benefits realized by us in connection with vested and released restricted stock units $ 3,812 $ (1,930 ) $ 10,730 $ 16,482 As of December 31, 2018 , the unrecognized stock-based compensation expense balance related to RSUs was $116.4 million , excluding the impact of estimated forfeitures, and will be recognized over a weighted-average remaining contractual term and an estimated weighted-average amortization period of 1.5 years . The intrinsic value of outstanding RSUs as of December 31, 2018 was $151.5 million . Cash-Based Long-Term Incentive Compensation We have adopted a cash-based long-term incentive (“Cash LTI Plan”) program for many of our employees as part of our employee compensation program. Executives and non-employee Board of Directors’ members are not participating in this program. During the six months ended December 31, 2018 and 2017 , we approved Cash LTI awards of $5.6 million and $4.0 million , respectively under our Cash LTI Plan. During the three months ended December 31, 2018 and 2017 , we recognized $12.0 million and $11.5 million , respectively, in compensation expense under the Cash LTI Plan. During the six months ended December 31, 2018 and 2017 , we recognized $27.2 million and $26.3 million , respectively, in compensation expense under the Cash LTI Plan. As of December 31, 2018 , the unrecognized compensation balance (excluding the impact of estimated forfeitures) related to the Cash LTI Plan was $104.9 million . For details, refer to Note 8 “Equity and Long-Term Incentive Compensation Plans,” of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018. Employee Stock Purchase Plan Our Employee Stock Purchase Plan (“ESPP”) provides that eligible employees may contribute up to 15% of their eligible earnings toward the semi-annual purchase of our common stock. The ESPP is qualified under Section 423 of the Internal Revenue Code. The employee’s purchase price is derived from a formula based on the closing price of the common stock on the first day of the offering period versus the closing price on the date of purchase (or, if not a trading day, on the immediately preceding trading day). The offering period (or length of the look-back period) under the ESPP has a duration of six months , and the purchase price with respect to each offering period beginning on or after such date is, until otherwise amended, equal to 85% of the lesser of (i) the fair market value of our common stock at the commencement of the applicable six-month offering period or (ii) the fair market value of our common stock on the purchase date. We estimate the fair value of purchase rights under the ESPP using a Black-Scholes model. 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 Six months ended 2018 2017 2018 2017 Stock purchase plan: Expected stock price volatility 30.0 % 25.9 % 30.0 % 25.9 % Risk-free interest rate 1.9 % 0.9 % 1.9 % 0.9 % Dividend yield 2.9 % 2.6 % 2.9 % 2.6 % Expected life (in years) 0.5 0.5 0.5 0.5 The following table shows 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 Six months ended 2018 2017 2018 2017 Total cash received from employees for the issuance of shares under the ESPP $ 20,556 $ 20,579 $ 20,556 $ 20,579 Number of shares purchased by employees through the ESPP 270 264 270 264 Tax benefits realized by us in connection with the disqualifying dispositions of shares purchased under the ESPP $ 92 $ 47 $ 603 $ 894 Weighted-average fair value per share based on Black-Scholes model $ 22.73 $ 19.04 $ 22.73 $ 19.04 The ESPP shares are replenished annually on the first day of each fiscal year by virtue of an evergreen provision. The provision allows for share replenishment equal to the lesser of 2.0 million shares or the number of shares which we estimate will be required to be issued under the ESPP during the forthcoming fiscal year. As of December 31, 2018 , a total of 2.4 million shares were reserved and available for issuance under the ESPP. Quarterly cash dividends On November 7, 2018 , our Board of Directors declared a regular quarterly cash dividend of $0.75 per share on the outstanding shares of our common stock, which was paid on December 4, 2018 to the stockholders of record as of the close of business on November 17, 2018 . The total amount of regular quarterly cash dividends and dividend equivalents paid by us during the three months ended December 31, 2018 and 2017 was $114.5 million and $92.6 million , respectively. The total amount of regular quarterly cash dividends and dividend equivalents paid by us during the six months ended December 31, 2018 and 2017 was $234.4 million and $186.7 million , respectively. The amount of accrued dividends payable for regular quarterly cash dividends on unvested RSUs with dividend equivalent rights as of December 31, 2018 and June 30, 2018 was $5.4 million and $6.7 million , respectively. These accrued cash dividends will be paid upon vesting of the underlying RSUs. Special cash dividend On November 19, 2014, our Board of Directors declared a special cash dividend of $16.50 per share on our outstanding common stock. The declaration and payment of the special cash dividend was part of our leveraged recapitalization transaction under which the special cash dividend was financed through a combination of existing cash and proceeds from the debt financing disclosed in Note 8 “Debt” that was completed during the three months ended December 31, 2014. The total amount of the special cash dividend accrued by us at the declaration date was substantially paid out during the three months ended December 31, 2014, except for the aggregate special cash dividend of $43.0 million that was accrued for the unvested RSUs and to be paid when such underlying unvested RSUs vest. During the three months ended December 31, 2018 and 2017 , the total special cash dividends paid with respect to vested RSUs were immaterial. During the six months ended December 31, 2018 and 2017 , the total special cash dividends paid with respect to vested RSUs were $2.9 million and $6.2 million , respectively. As of December 31, 2018, all of the special cash dividends accrued with respect to outstanding RSUs were vested and paid in full. For details of the special cash dividend, refer to Note 8 “Equity and Long-Term Incentive Compensation Plans,” of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018 . |
Stock Repurchase Program
Stock Repurchase Program | 6 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
STOCK REPURCHASE PROGRAM | NOTE 10 – STOCK REPURCHASE PROGRAM Our Board of Directors has authorized a program which permits us to repurchase up to $1.00 billion of its common stock, or up to $2.00 billion if the Orbotech Merger closes. For additional details, refer to Note 1, “Basis of Presentation”. The intent of this program is to offset the dilution from our equity incentive plans, employee stock purchase plan, the issuance of shares in the merger involving Orbotech, as well as to return excess cash to our stockholders. Subject to market conditions, applicable legal requirements and other factors, the repurchases were made in the open market in compliance with applicable securities laws, including the Securities Exchange Act of 1934 and the rules promulgated thereunder, such as Rule 10b-18 and Rule 10b5-1. This stock repurchase program has no expiration date and may be suspended at any time. As of December 31, 2018 , an aggregate of approximately $411.7 million was available for repurchase under our stock repurchase program. Share repurchases for the indicated periods (based on the trade date of the applicable repurchase) were as follows: Three months ended Six months ended (In thousands) 2018 2017 2018 2017 Number of shares of common stock repurchased 2,556 388 5,337 822 Total cost of repurchases $ 242,401 $ 40,868 $ 550,187 $ 81,643 |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 6 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | NOTE 11 – NET INCOME (LOSS) PER SHARE Basic net income (loss) per share is calculated by dividing net income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is calculated by using the weighted-average number of common shares outstanding during the period, increased to include the number of additional shares of common stock that would have been outstanding if the shares of common stock underlying our outstanding dilutive restricted stock units had been issued. The dilutive effect of outstanding restricted stock units is reflected in diluted net income (loss) per share by application of the treasury stock method. The following table sets forth the computation of basic and diluted net income (loss) per share: (In thousands, except per share amounts) Three months ended Six months ended 2018 2017 2018 2017 Numerator: Net income (loss) $ 369,100 $ (134,319 ) $ 765,044 $ 146,617 Denominator: Weighted-average shares-basic, excluding unvested restricted stock units 152,148 156,587 153,684 156,707 Effect of dilutive restricted stock units and options 500 — 705 981 Weighted-average shares-diluted 152,648 156,587 154,389 157,688 Basic net income (loss) per share $ 2.43 $ (0.86 ) $ 4.98 $ 0.94 Diluted net income (loss) per share $ 2.42 $ (0.86 ) $ 4.96 $ 0.93 Anti-dilutive securities excluded from the computation of diluted net income (loss) per share 341 909 280 11 |
Income Taxes
Income Taxes | 6 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 12 – INCOME TAXES The following table provides details of income taxes: Three months ended Six months ended (Dollar amounts in thousands) 2018 2017 2018 2017 Income before income taxes $ 415,963 $ 347,307 $ 843,531 $ 683,459 Provision for income taxes $ 46,863 $ 481,626 $ 78,487 $ 536,842 Effective tax rate 11.3 % 138.7 % 9.3 % 78.5 % As of December 31, 2018 , we had completed our accounting for the tax effects of the Act, which was enacted into law on December 22, 2017 . We recorded a tax benefit adjustment of $0.3 million and $20.1 million for the transition tax liability provided by the Act during the three and six months ended December 31, 2018 , respectively. Future guidance of the Act from U.S. federal and state governments may change the tax liability. In the normal course of business, we are subject to examination by tax authorities throughout the world. We are under United States federal income tax examination for the fiscal year ended June 30, 2016 . We are subject to state income tax examinations for all years beginning from the fiscal year ended June 30, 2014 . We are also subject to examinations in other major foreign jurisdictions, including Singapore, for all years beginning from the fiscal year ended June 30, 2014 . It is possible that certain examinations may be concluded in the next twelve months. We believe that it may recognize up to $10.0 million of our existing unrecognized tax benefits within the next twelve months as a result of the lapse of statutes of limitations and the resolution of examinations with various tax authorities. |
Litigation and Other Legal Matt
Litigation and Other Legal Matters | 6 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION AND OTHER LEGAL MATTERS | NOTE 13 – LITIGATION AND OTHER LEGAL MATTERS We are named from time to time as a party to lawsuits and other types of legal proceedings and claims in the normal course of our business. Actions filed against us include commercial, intellectual property, customer, and labor and employment related claims, including complaints of alleged wrongful termination and potential class action lawsuits regarding alleged violations of federal and state wage and hour and other laws. In general, legal proceedings and claims, regardless of their merit, and associated internal investigations (especially those relating to intellectual property or confidential information disputes) are often expensive to prosecute, defend or conduct and may divert management’s attention and other company resources. Moreover, the results of legal proceedings are difficult to predict, and the costs incurred in litigation can be substantial, regardless of outcome. We believe the amounts provided in our condensed consolidated financial statements are adequate in light of the probable and estimated liabilities. However, because such matters are subject to many uncertainties, the ultimate outcomes are not predictable, and there can be no assurances that the actual amounts required to satisfy alleged liabilities from the matters described above will not exceed the amounts reflected in our condensed consolidated financial statements or will not have a material adverse effect on our results of operations, financial condition or cash flows. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 – COMMITMENTS AND CONTINGENCIES Factoring. We have agreements (referred to as “factoring agreements”) with financial institutions to sell certain of our trade receivables and promissory notes from customers without recourse. We do not believe we are at risk for any material losses as a result of these agreements. In addition, we periodically sell certain letters of credit (“LCs”), without recourse, received from customers in payment for goods and services. The following table shows total receivables sold under factoring agreements and proceeds from sales of LCs for the indicated periods: Three months ended Six months ended (In thousands) 2018 2017 2018 2017 Receivables sold under factoring agreements $ 39,814 $ 47,232 $ 101,354 $ 79,133 Proceeds from sales of LCs $ 8,339 $ — $ 19,231 $ 5,571 Factoring and LC fees for the sale of certain trade receivables were recorded in other expense (income), net and were not material for the periods presented. Facilities. We lease certain of our facilities under arrangements that are accounted for as operating leases. Rent expense was $2.4 million and $2.5 million for the three months ended December 31, 2018 and 2017 , respectively and was $4.7 million and $5.0 million for the six months ended December 31, 2018 and 2017 , respectively The following is a schedule of expected operating lease payments: Fiscal year ending June 30, Amount (In thousands) 2019 (remaining 6 months) $ 7,145 2020 8,361 2021 6,016 2022 3,166 2023 2,317 2024 and thereafter 3,078 Total minimum lease payments $ 30,083 Purchase Commitments. We maintain commitments to purchase inventory from our suppliers as well as goods, services, and other assets in the ordinary course of business. Our liability under these purchase commitments is generally restricted to a forecasted time-horizon as mutually agreed upon between the parties. This forecasted time-horizon can vary among different suppliers. Our estimate of our significant purchase commitments for primarily material, services, supplies and asset purchases is approximately $489.8 million as of December 31, 2018 , which are primarily due within the next 12 months. Actual expenditures will vary based upon the volume of the transactions and length of contractual service provided. In addition, the amounts paid under these arrangements may be less in the event that the arrangements are renegotiated or canceled. Certain agreements provide for potential cancellation penalties. Cash Long-Term Incentive Plan. As of December 31, 2018 , we have committed $129.8 million for future payment obligations under our Cash LTI Plan. The calculation of compensation expense related to the Cash LTI Plan includes estimated forfeiture rate assumptions. Cash LTI awards issued to employees under the Cash LTI Plan vest in three or four equal installments, with one-third or one-fourth of the aggregate amount of the Cash LTI award vesting on each anniversary of the grant date over a three or four -year period. In order to receive payments under a Cash LTI award, participants must remain employed by us as of the applicable award vesting date. Guarantees and Contingencies. We maintain guarantee arrangements available through various financial institutions for up to $22.5 million , of which $18.2 million had been issued as of December 31, 2018 , primarily to fund guarantees to customs authorities for value-added tax (“VAT”) and other operating requirements of our subsidiaries in Europe and Asia. Indemnification Obligations. Subject to certain limitations, we are obligated to indemnify our current and former directors, officers and employees with respect to certain litigation matters and investigations that arise in connection with their service to us. These obligations arise under the terms of our certificate of incorporation, our bylaws, applicable contracts, and Delaware and California law. The obligation to indemnify generally means that we are required to pay or reimburse the individuals’ reasonable legal expenses and possibly damages and other liabilities incurred in connection with these matters. For example, we have paid or reimbursed legal expenses incurred in connection with the investigation of our historical stock option practices and the related litigation and government inquiries by several of our current and former directors, officers and employees. Although the maximum potential amount of future payments we could be required to make under the indemnification obligations generally described in this paragraph is theoretically unlimited, we believe the fair value of this liability, to the extent estimable, is appropriately considered within the reserve we have established for currently pending legal proceedings. We are a party to a variety of agreements pursuant to which we may be obligated to indemnify the other party with respect to certain matters. Typically, these obligations arise in connection with contracts and license agreements or the sale of assets, under which we customarily agrees to hold the other party harmless against losses arising from, or provides customers with other remedies to protect against, bodily injury or damage to personal property caused by our products, non-compliance with our product performance specifications, infringement by our products of third-party intellectual property rights and a breach of warranties, representations and covenants related to matters such as title to assets sold, validity of certain intellectual property rights, non-infringement of third-party rights, and certain income tax-related matters. In each of these circumstances, payment by us is typically subject to the other party making a claim to and cooperating with us pursuant to the procedures specified in the particular contract. This usually allows us to challenge the other party’s claims or, in case of breach of intellectual property representations or covenants, to control the defense or settlement of any third-party claims brought against the other party. Further, our obligations under these agreements may be limited in terms of amounts, activity (typically at our option to replace or correct the products or terminate the agreement with a refund to the other party), and duration. In some instances, we may have recourse against third parties and/or insurance covering certain payments made by us. In addition, we may in limited circumstances enter into agreements that contain customer-specific commitments on pricing, tool reliability, spare parts stocking levels, response time and other commitments. Furthermore, we may give these customers limited audit or inspection rights to enable them to confirm that we are complying with these commitments. If a customer elects to exercise its audit or inspection rights, we may be required to expend significant resources to support the audit or inspection, as well as to defend or settle any dispute with a customer that could potentially arise out of such audit or inspection. To date, we have made no significant accruals in our condensed consolidated financial statements for this contingency. While we have not in the past incurred significant expenses for resolving disputes regarding these types of commitments, we cannot make any assurance that it will not incur any such liabilities in the future. It is not possible to predict the maximum potential amount of future payments under these or similar agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by us under these agreements have not had a material effect on our business, financial condition, results of operations or cash flows. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 6 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 15 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The authoritative guidance requires companies to recognize all derivative instruments and hedging activities, including foreign currency exchange contracts and interest rate lock agreements, (collectively “derivatives”) as either assets or liabilities at fair value on the condensed consolidated balance sheets. In accordance with the accounting guidance, we designate foreign currency exchange contracts and interest rate lock agreements as cash flow hedges of certain forecasted foreign currency denominated sales and purchase transactions, and the benchmark interest rate of the corresponding debt financing, respectively. Our foreign subsidiaries operate and sell our products in various global markets. As a result, we are exposed to risks relating to changes in foreign currency exchange rates. We utilize foreign currency forward exchange contracts and option contracts to hedge against future movements in foreign exchange rates that affect certain existing and forecasted foreign currency denominated sales and purchase transactions, such as the Japanese yen, the euro, the New Taiwan dollar and the Israeli new shekel. We routinely hedge our exposures to certain foreign currencies with various financial institutions in an effort to minimize the impact of certain currency exchange rate fluctuations. These currency forward exchange contracts and options, designated as cash flow hedges, generally have maturities of less than 18 months . Cash flow hedges are evaluated for effectiveness monthly, based on changes in total fair value of the derivatives. If a financial counterparty to any of our hedging arrangements experiences financial difficulties or is otherwise unable to honor the terms of the foreign currency hedge, we may experience material losses. In October 2014 , we entered into a series of forward contracts (“Rate Lock Agreements”) to lock the benchmark rate on a portion of the Senior Notes. The Rate Lock Agreements was matured and terminated in the second quarter of the fiscal year ended June 30, 2015 and we recorded the fair value of $7.5 million as a gain within accumulated other comprehensive income (loss) (“OCI”) as of December 31, 2014 . As of December 31, 2018 , the unamortized portion of the fair value of the forward contracts for the Rate Lock Agreements was $4.4 million . For more details, refer to Note 16, “Derivative Instruments and Hedging Activities” of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018 . During the three months ended June 30, 2018 , we entered into a series of forward contracts (the “2018 Rate Lock Agreements”) to lock the benchmark interest rate prior to expected debt issuances. The objective of the 2018 Rate Lock Agreements was to hedge the risk associated with the variability in interest rates due to the changes in the benchmark rate leading up to the closing of the intended financing, on the notional amount being hedged. The 2018 Rate Lock Agreement had a notional amount of $500.0 million in aggregate with contract maturity dates in the first half of the fiscal year ending June 30, 2019. Each forward contract will be closed on the earlier of the completion date of pricing of the portion of the intended debt being hedged or the expiration date. We designated each of the 2018 Rate Lock Agreements as a qualifying hedging instrument to be accounted for as a cash flow hedge. During the six months ended December 31, 2018, the 2018 Rate Lock Agreements were extended with a maturity date in the fiscal quarter ending March 31, 2019 and the realized net loss of $3.8 million was recorded in OCI. For derivatives that are designated and qualify as cash flow hedge, the effective portion of the gains or losses is reported in OCI and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Prior to adopting the new accounting guidance for hedge accounting, time value was excluded from the assessment of effectiveness for derivatives designated as cash flow hedges. Time value was amortized on a mark-to-market basis and recognized in earnings over the life of the derivative contract. For derivative contracts executed after adopting the new accounting guidance, the election to include time value for the assessment of effectiveness is made on all forward contracts designated as cash flow hedges. The change in fair value of the derivative are recorded in OCI until the hedged item is recognized in earnings. The assessment of effectiveness of options contracts designated as cash flow hedges continue to exclude time value after adopting the new accounting guidance. The initial value of the component excluded from the assessment of effectiveness are recognized in earnings over the life of the derivative contract. Any difference between change in the fair value of the excluded components and the amounts recognized in earnings are recorded in OCI. For derivatives that are not designated as cash flow hedges, gains and losses are recognized in other expense (income), net. We use foreign currency forward contracts to hedge certain foreign currency denominated assets or liabilities. The gains and losses on these derivative instruments are largely offset by the changes in the fair value of the assets or liabilities being hedged. Derivatives in Cash Flow Hedging Relationships: Foreign Exchange and Interest Rate Contracts The gains (losses) on derivatives in cash flow hedging relationships recognized in OCI for the indicated periods were as follows: Three months ended Six months ended December 31, December 31, (In thousands) 2018 2017 2018 2017 Derivatives Designated as Hedging Instruments: Rate lock agreements: Amounts included in the assessment of effectiveness $ (17,752 ) $ — $ (5,396 ) $ — Foreign exchange contracts: Amounts included in the assessment of effectiveness $ (1,201 ) $ 697 $ 237 $ 1,141 Amounts excluded from the assessment of effectiveness $ (29 ) $ — $ (29 ) $ — The locations and amounts of designated and non-designated derivative’s gains and losses reported in the condensed consolidated statements of operations for the indicated periods were as follows: Three months ended December 31, Three months ended December 31, 2018 2017 (In thousands) Revenue Cost of revenues Interest expense Other income (expense), net Revenue Cost of revenues Interest expense Other income (expense), net Total amounts presented in the condensed consolidated statement of operations in which the effects of cash flow hedges are recorded $ 1,119,898 $ 408,260 $ 26,538 $ (9,228 ) $ 975,822 $ 347,002 $ 27,372 $ (7,824 ) Gains (losses) on Derivatives Designated as Hedging Instruments: Rate lock agreements: Amount of gains (losses) reclassified from accumulated OCI to earnings $ — $ — $ 189 $ — $ — $ — $ — $ — Amount of gains (losses) reclassified from accumulated OCI to earnings as a result that a forecasted transaction is no longer probable of occurring $ — $ — $ — $ (108 ) $ — $ — $ — $ — Foreign exchange contracts: Amount of gains (losses) reclassified from accumulated OCI to earnings $ 1,705 $ (158 ) $ — $ (3 ) $ 397 $ 377 $ 189 $ — Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach $ 80 $ (8 ) $ — $ — $ — $ — $ — $ — Amount excluded from the assessment of effectiveness $ — $ — $ — $ (220 ) $ — $ — $ — $ (158 ) Gains (losses) on Derivatives Not Designated as Hedging Instruments: Amount of gains (losses) recognized in earnings $ — $ — $ — $ (3,700 ) $ — $ — $ — $ 3,237 Six months ended December 31, Six months ended December 31, 2018 2017 (In thousands) Revenue Cost of revenues Interest expense Other income (expense), net Revenue Cost of revenues Interest expense Other income (expense), net Total amounts presented in the condensed consolidated statement of operations in which the effects of cash flow hedges are recorded $ 2,213,158 $ 789,647 $ 52,900 $ (19,253 ) $ 1,945,403 $ 700,119 $ 57,948 $ (12,207 ) Gains (losses) on Derivatives Designated as Hedging Instruments: Rate lock agreements: Amount of gains (losses) reclassified from accumulated OCI to earnings $ — $ — $ 377 $ — $ — $ — $ — $ — Amount of gains (losses) reclassified from accumulated OCI to earnings as a result that a forecasted transaction is no longer probable of occurring $ — $ — $ — $ 4 $ — $ — $ — $ — Foreign exchange contracts: Amount of gains (losses) reclassified from accumulated OCI to earnings $ 2,688 $ (292 ) $ — $ (18 ) $ 1,365 $ 1,338 $ 378 $ — Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach $ 80 $ (8 ) $ — $ — $ — $ — $ — $ — Amount excluded from the assessment of effectiveness $ — $ — $ — $ (88 ) $ — $ — $ — $ (229 ) Gains (losses) on Derivatives Not Designated as Hedging Instruments: Amount of gains (losses) recognized in earnings $ — $ — $ — $ 63 $ — $ — $ — $ 3,676 The U.S. dollar equivalent of all outstanding notional amounts of foreign currency hedge contracts, with maximum remaining maturities of approximately ten months as of December 31, 2018 and June 30, 2018 , were as follows: (In thousands) As of As of Cash flow hedge contracts - foreign currency Purchase $ 777 $ 8,116 Sell $ 84,302 $ 115,032 Other foreign currency hedge contracts Purchase $ 163,758 $ 130,442 Sell $ 173,793 $ 154,442 The locations and fair value of our derivatives reported in our Condensed Consolidated Balance Sheets as of the dates indicated below were as follows: Asset Derivatives Liability Derivatives Balance Sheet Location As of As of Balance Sheet Location As of As of (In thousands) Fair Value Fair Value Derivatives designated as hedging instruments Rate lock contracts Other current assets $ — $ 219 Other current liabilities $ 10,955 $ 5,158 Foreign exchange contracts Other current assets 102 3,259 Other current liabilities 649 312 Total derivatives designated as hedging instruments 102 3,478 11,604 5,470 Derivatives not designated as hedging instruments Foreign exchange contracts Other current assets 1,630 1,907 Other current liabilities 2,714 1,358 Total derivatives not designated as hedging instruments 1,630 1,907 2,714 1,358 Total derivatives $ 1,732 $ 5,385 $ 14,318 $ 6,828 The changes in OCI, before taxes, related to derivatives for the indicated periods were as follows: Three months ended Six months ended (In thousands) 2018 2017 2018 2017 Beginning balance $ 15,103 $ 6,452 $ 2,346 $ 8,126 Amount reclassified to earnings (1,736 ) (963 ) (2,773 ) (3,081 ) Net change in unrealized gains or losses (18,982 ) 697 (5,188 ) 1,141 Ending balance $ (5,615 ) $ 6,186 $ (5,615 ) $ 6,186 Offsetting of Derivative Assets and Liabilities We present derivatives at gross fair values in the Condensed Consolidated Balance Sheets. We have entered into arrangements with each of our counterparties, which reduce credit risk by permitting net settlement of transactions with the same counterparty under certain conditions. The information related to the offsetting arrangements for the periods indicated was as follows (in thousands): As of December 31, 2018 Gross Amounts of Derivatives Not Offset in the Condensed Consolidated Balance Sheets Description Gross Amounts of Derivatives Gross Amounts of Derivatives Offset in the Condensed Consolidated Balance Sheets Net Amount of Derivatives Presented in the Condensed Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount Derivatives - Assets $ 1,732 $ — $ 1,732 $ (995 ) $ — $ 737 Derivatives - Liabilities $ (14,318 ) $ — $ (14,318 ) $ 995 $ — $ (13,323 ) As of June 30, 2018 Gross Amounts of Derivatives Not Offset in the Condensed Consolidated Balance Sheets Description Gross Amounts of Derivatives Gross Amounts of Derivatives Offset in the Condensed Consolidated Balance Sheets Net Amount of Derivatives Presented in the Condensed Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount Derivatives - Assets $ 5,385 $ — $ 5,385 $ (1,888 ) $ — $ 3,497 Derivatives - Liabilities $ (6,828 ) $ — $ (6,828 ) $ 1,888 $ — $ (4,940 ) |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 16 – RELATED PARTY TRANSACTIONS During the three and six months ended December 31, 2018 and 2017 , we purchased from, or sold to, several entities, where one or more of our executive officers or members of our Board of Directors, or their immediate family members, were, during the periods presented, an executive officer or a board member of a subsidiary, including Citrix Systems, Inc., Integrated Device Technology, Inc., Keysight Technologies, Inc., MetLife Insurance K.K., NetApp, Inc., and Proofpoint, Inc. The following table provides the transactions with these parties for the indicated periods (for the portion of such period that they were considered related): Three months ended Six months ended (In thousands) 2018 2017 2018 2017 Total revenues $ 11 $ 455 $ 13 $ 457 Total purchases (1) $ 1,603 $ 542 $ 2,206 $ 1,246 __________________ (1) During the three months ended June 30, 2018 , we acquired a product line from Keysight Technologies, Inc. (“Keysight”) and entered into a transition services agreement pursuant to which Keysight provides certain manufacturing services to us. For additional details refer to Note 6, “Business Combinations”. We recorded the manufacturing services fees under the transition services agreement with Keysight within cost of revenues, which was immaterial for the three and six months ended December 31, 2018 . Our receivable and payable balances from these parties were immaterial as of December 31, 2018 and June 30, 2018 . |
Segment Reporting and Geographi
Segment Reporting and Geographic Information | 6 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION | NOTE 17 – SEGMENT REPORTING AND GEOGRAPHIC INFORMATION While we operate our business in multiple operating segments, we have only one reportable segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our Chief Executive Officer. All operating segments have been aggregated due to their inter-dependencies, commonality of long-term economic characteristics, products and services, the production processes, class of customer and distribution processes. Our service products are an extension of the system product portfolio and provide customers with spare parts and fab management services (including system preventive maintenance and optimization services) to improve yield, increase production uptime and throughput, and lower the cost of ownership. Since we operate in one reportable segment, all financial segment information required by the authoritative guidance can be found in the condensed consolidated financial statements. Our significant operations outside the United States include manufacturing facilities in China, Germany, Israel and Singapore and sales, marketing and service offices in Japan, the rest of the Asia Pacific region and Europe. For geographical revenue reporting, revenues are attributed to the geographic location in which the customer is located. Long-lived assets consist of land, property and equipment, net and are attributed to the geographic region in which they are located. The following is a summary of revenues by geographic region, based on ship-to location, for the indicated periods (as a percentage of total revenues): Three months ended December 31, Six months ended December 31, (Dollar amounts in thousands) 2018 2017 2018 2017 Revenues: China $ 269,878 24 % $ 66,460 7 % $ 610,012 28 % $ 234,799 12 % Taiwan 266,534 24 % 216,791 22 % 520,971 24 % 355,350 18 % Japan 180,283 16 % 154,762 16 % 315,861 14 % 301,197 15 % North America 150,113 13 % 149,042 15 % 252,242 11 % 278,292 14 % Korea 126,968 11 % 270,184 28 % 280,469 13 % 544,862 28 % Europe and Israel 80,618 7 % 82,158 8 % 152,287 7 % 165,663 9 % Rest of Asia 45,504 5 % 36,425 4 % 81,316 3 % 65,240 4 % Total $ 1,119,898 100 % $ 975,822 100 % $ 2,213,158 100 % $ 1,945,403 100 % The following is a summary of revenues by major products for the indicated periods (as a percentage of total revenues): Three months ended December 31, Six months ended December 31, (Dollar amounts in thousands) 2018 2017 2018 2017 Revenues: Wafer Inspection $ 505,878 45 % $ 400,584 41 % $ 978,191 44 % $ 790,004 41 % Patterning 288,997 26 % 274,868 28 % 598,206 27 % 569,218 29 % Global Service and Support (1) 295,216 26 % 273,805 28 % 568,193 26 % 534,303 27 % Other 29,807 3 % 26,565 3 % 68,568 3 % 51,878 3 % Total $ 1,119,898 100 % $ 975,822 100 % $ 2,213,158 100 % $ 1,945,403 100 % __________________ (1) The Global Service and Support revenues includes service revenues as presented in the Condensed Consolidated Statements of Operations as well as certain product revenues, primarily revenues from our K-T Pro business. In the three months ended December 31, 2018 , two customers accounted for approximately 14% and 13% of total revenues. In the three months ended December 31, 2017 , one customer accounted for approximately 17% of total revenues. In the six months ended December 31, 2018 , one customer accounted for approximately 14% of total revenues. In the six months ended December 31, 2017 , one customer accounted for approximately 22% of total revenues. Three customers on an individual basis accounted for greater than 10% of net accounts receivables as of December 31, 2018 and June 30, 2018 , respectively. Long-lived assets by geographic region as of the dates indicated below were as follows: (In thousands) As of As of Long-lived assets: United States $ 205,253 $ 187,352 Singapore 49,302 47,009 Israel 27,517 26,980 Europe 12,816 12,924 Rest of Asia 11,463 12,041 Total $ 306,351 $ 286,306 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The condensed consolidated financial statements have been prepared by us pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the unaudited interim financial statements reflect all adjustments (consisting only of normal, recurring adjustments) necessary for a fair statement of the financial position, results of operations, comprehensive income, and cash flows for the periods indicated. These financial statements and notes, however, should be read in conjunction with Item 8, “Financial Statements and Supplementary Data” included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018 , filed with the SEC on August 6, 2018 . The condensed consolidated financial statements include the accounts of KLA and its majority-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. The results of operations for the three and six months ended December 31, 2018 are not necessarily indicative of the results that may be expected for any other interim period or for the full fiscal year ending June 30, 2019 . Certain reclassifications have been made to the prior year’s Condensed Consolidated Financial Statements to conform to the current year presentation. The reclassifications did not have material effects on the prior year’s Condensed Consolidated Balance Sheets, Statements of Operations, Comprehensive Income and Cash Flows. |
Management Estimates | The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions in applying our accounting policies that affect the reported amounts of assets and liabilities (and related disclosure of contingent assets and liabilities) at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Revenue Recognition | Effective on the first day of fiscal 2019, we adopted Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“ASC 606”) . Prior periods were not retrospectively restated, and accordingly, the consolidated balance sheet as of June 30, 2018 , and the condensed consolidated statements of operations for the three and six months ended December 31, 2017 were prepared using accounting standards that were different than those in effect for the three and six months ended December 31, 2018 . Practical expedients We apply the following practical expedients: • We account for shipping and handling costs as activities to fulfill the promise to transfer the goods, instead of a promised service to our customer. • We have elected to not adjust the promised amount of consideration for the effects of a significant financing component as we expect, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will generally be one year or less. • We have elected to expense costs to obtain a contract as incurred because the expected amortization period is one year or less. • We have elected to reflect the aggregate effect of all modifications that occurred before July 1, 2018 in determining the transaction price, identifying the satisfied and unsatisfied performance obligations, and allocating the transaction price to the performance obligations. At the beginning of the fiscal year 2019, we adopted ASC 606 using the modified retrospective transition approach for all contracts completed and not completed as of the date of adoption. Under the modified retrospective transition approach, periods prior to the adoption date were not adjusted and continue to be reported in accordance with ASC 605. A cumulative effect of applying ASC 606 was recorded to the beginning retained earnings to reflect the impact of all existing arrangements under ASC 606. |
Recent Accounting Pronouncements | Recently Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASC 606, which supersedes the guidance in ASC 605, Revenue Recognition (“ ASC 605 ”). Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, ASC 606 requires enhanced disclosures, including disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. We adopted the ASC 606 as of July 1, 2018 in our first quarter of our fiscal year ending June 30, 2019, using the modified retrospective transition approach. For additional detail, refer to Note 2 “Revenue.” In January 2016, the FASB issued an accounting standard update that changes the accounting for financial instruments primarily related to equity investments (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee), financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. We adopted this update beginning in the first quarter of our fiscal year ending June 30, 2019 on a prospective basis and the adoption had no material impact on our condensed consolidated financial statements. In August 2016, the FASB issued an accounting standard update intended to clarify how certain cash receipts and cash payment are presented and classified in the statement of cash flows. We adopted this update beginning in the first quarter of our fiscal year ending June 30, 2019 on a retrospective basis and the adoption had no material impact on our condensed consolidated financial statements. In October 2016, the FASB issued an accounting standard update to recognize the income tax consequences of intra-entity transfers of assets other than inventory when they occur. This eliminates the exception to postpone recognition until the asset has been sold to an outside party. We adopted this update beginning in the first quarter of our fiscal year ending June 30, 2019 on a modified retrospective basis and the adoption had no material impact on our condensed consolidated financial statements. In January 2017, the FASB issued an accounting standard on clarifying the definition of a business, with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. We adopted this update beginning in the first quarter of our fiscal year ending June 30, 2019 on a prospective basis and the adoption had no material impact on our condensed consolidated financial statements. In January 2017, the FASB issued an accounting standard update to simplify the subsequent measurement of goodwill by removing the second step of the two-step impairment test, which requires an entity to determine the fair value of assets and liabilities similar to what is required in a purchase price allocation. Under the update, goodwill impairment will be calculated as the amount by which a reporting unit’s carrying value exceeds our fair value. We early adopted this update in the first quarter of our fiscal year ending June 30, 2019 on a prospective basis and the adoption had no material impact on our condensed consolidated financial statements. In March 2017, the FASB issued an accounting standard update that changes the statements of operation classification of net periodic benefit cost related to defined benefit pension and/or other post-retirement benefit plans. Under the update, employers will present the service cost component of net periodic benefit cost in the same statements of operations line item(s) as other employee compensation costs arising from services rendered during the period. Only the service cost component will be eligible for capitalization in assets. Employers will present the other components of the net periodic benefit costs separately from the line item(s) that includes the service cost and outside of any subtotal of operating income, if one is presented. We adopted this update beginning in the first quarter of our fiscal year ending June 30, 2019 on a retrospective basis and the adoption had no material impact on our condensed consolidated financial statements. In May 2017, the FASB issued an accounting standard update regarding stock compensation that provides guidance about which changes to the terms and conditions of a share-based payment award require an entity to apply modification accounting in order to reduce diversity in practice and reduce complexity. We adopted this update beginning in the first quarter of our fiscal year ending June 30, 2019 on a prospective basis and the adoption had no material impact on our condensed consolidated financial statements. In August 2017, the FASB issued an accounting standard update to hedge accounting to better align our risk management activities by refining financial and non-financial hedging strategy eligibilities. This update also amends the presentation and disclosure requirements to increase transparency to better understand an entity’s risk exposures and how hedging strategies are used to manage those exposures. We early adopted this update in the second quarter of our fiscal year ending June 30, 2019 under the modified retrospective approach. The cumulative effect adjustment for the elimination of the ineffectiveness was not material to our condensed consolidated financial statements. The presentation and disclosure have been amended on a prospective basis, as required by this update. In February 2018, the FASB issued an accounting standard update that provides an option to reclassify disproportional tax effects and other income tax effects (“stranded tax effects”) caused by the Tax Cuts and Jobs Act (“the Act”) from accumulated other comprehensive income (“AOCI”) to retained earnings. We early adopted this update in the first quarter of our fiscal year ending June 30, 2019 and applied this update in the period of adoption. As a result of the adoption, we made a reclassification from AOCI to beginning retained earnings of approximately $10.7 million related to the stranded tax effects. Updates Not Yet Effective In February 2016, the FASB issued an accounting standard update which amends the existing accounting standards for leases. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on our classification. Under the new guidance, a lessee will be required to recognize assets and liabilities for all leases with lease terms of more than 12 months using a modified retrospective transition method. In July 2018, the FASB issued an amendment to the standard which provide us an option to apply the practical expedient allowed in the standard retrospectively with the cumulative effect recognized as of the date of adoption. The update is effective for us beginning in the first quarter of our fiscal year ending June 30, 2020. Early adoption is permitted. We are currently evaluating the impact of this accounting standard update on our condensed consolidated financial statements. In June 2016, the FASB issued an accounting standard update that changes the accounting for recognizing impairments of financial assets. Under the update, credit losses for certain types of financial instruments will be estimated based on expected losses. The update also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. The update is effective for us beginning in the first quarter of our fiscal year ending June 30, 2021, with early adoption permitted starting in the first quarter of fiscal year ending June 30, 2020. We are currently evaluating the impact of this accounting standard update on our condensed consolidated financial statements. In August 2018, the FASB issued an accounting standard update which modifies the existing accounting standards for fair value measurement disclosure. This update eliminates the amount of and reasons for transfers between level 1 and level 2 of the fair value hierarchy, and the policy for timing of transfers between levels. This standard update is effective for us beginning in the first quarter of our fiscal year ending June 30, 2021, and early adoption is permitted. We are currently evaluating the impact of this accounting standard update on our condensed consolidated financial statements. In August 2018, the FASB issued an accounting standard update to amend the disclosure requirements related to defined benefit pension and other post-retirement plans. Some of the changes include adding a disclosure requirement for significant gains and losses related to changes in the benefit obligation for the period, and removing the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year. This standard update is effective for us for the fiscal year ending June 30, 2021, and early adoption is permitted. We are currently evaluating the impact of this accounting standard update on our condensed consolidated financial statements. In August 2018, the FASB issued an accounting standard update to align the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance clarifies which costs should be capitalized including the cost to acquire the license and the related implementation costs. This standard update is effective for us beginning in the first quarter of our fiscal year ending June 30, 2021, with an option to be adopted either prospectively or retrospectively. Early adoption is permitted. We are currently evaluating the impact of this accounting standard update on our condensed consolidated financial statements. Significant Accounting Policies. We updated our accounting policies for Revenue Recognition, Business Combinations, Global Intangible Low-Taxed Income (“GILTI”), and Derivative Financial Instruments. There has been no other material changes to our significant accounting policies in 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, 2018 . Revenue Recognition. We primarily derive revenue from the sale of process control and yield management solutions for the semiconductor and related nanoelectronics industries, maintenance and support of all these products, installation and training services and the sale of spare parts. Our solutions provide a comprehensive portfolio of inspection, metrology and data analytics products, which are accompanied by a flexible portfolio of services to enable our customers to maintain the performance and productivity of the solutions purchased. Our solutions are generally not sold with a right of return, nor have we experienced significant returns from or refunds to our customers. We account for a contract with a customer when there is approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectibility of consideration is probable. Our revenues are measured based on consideration stipulated in the arrangement with each customer, net of any sales incentives and amounts collected on behalf of third parties, such as sales taxes. The revenues are recognized as separate performance obligations that are satisfied by transferring control of the product or service to the customer. Our arrangements with our customers include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. A product or service is considered distinct if it is separately identifiable from other deliverables in the arrangement and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The transaction consideration, including any sales incentives, is allocated between separate performance obligations of an arrangement based on the stand-alone selling prices (“SSP”) for each distinct product or service. Management considers a variety of factors to determine the SSP, such as, historical standalone sales of products and services, discounting strategies and other observable data. From time to time, our contracts are modified to account for additional, or to change existing, performance obligations. Our contract modifications are generally accounted for prospectively. Product revenue We recognize revenue from product sales at a point in time when we have satisfied our performance obligation by transferring control of the product to the customer. We use judgment to evaluate whether the control has transferred by considering several indicators, including: • whether we have a present right to payment; • the customer has legal title; • the customer has physical possession; • the customer has significant risk and rewards of ownership; and • the customer has accepted the product, or whether customer acceptance is considered a formality based on history of acceptance of similar products (for example, when the customer has previously accepted the same tool, with the same specifications, and when we can objectively demonstrate that the tool meets all of the required acceptance criteria, and when the installation of the system is deemed perfunctory). Not all of the indicators need to be met for us to conclude that control has transferred to the customer. In circumstances in which revenue is recognized prior to the product acceptance, the portion of revenue associated with our performance obligations to install product is deferred and recognized upon acceptance. We enter into volume purchase agreements with some of our customers. We adjust the transaction consideration for estimated credits earned by our customers for such incentives. These credits are estimated based upon the forecasted and actual product sales for any given period, and agreed-upon incentive rate. The estimate is updated at each reporting period. We offer perpetual and term licenses for defects and data analysis software. The primary difference between perpetual and term licenses is the duration over which the customer can benefit from the use of the software, while the functionality and the features of the software are the same. The software is generally bundled with post-contract customer support (“PCS”), which includes unspecified software updates that are made available throughout the entire term of the arrangement. Revenue from software licenses is recognized at a point in time, when the software is made available to the customer. Revenue from PCS is deferred at contract inception and recognized ratably over the service period, or as services are performed. Services and spare parts revenue The majority of product sales include a standard 12 -month warranty that is not separately paid for by the customers. The customers may also purchase extended warranty for periods beyond the initial year as part of the initial product sale. We have concluded that the standard 12 -month warranty as well as any extended warranty periods included in the initial product sales are separate performance obligations. The estimated fair value of warranty services is deferred and recognized ratably as revenue over the warranty period, as the customer simultaneously receives and consumes the benefits of warranty services provided by us. Additionally, we offer product maintenance and support services, which the customer may purchase separately from the standard and extended warranty offered as part of the initial product sale. Revenue from separately negotiated maintenance and support service contracts is also recognized over time based on the terms of the applicable service period. Revenue from services performed in the absence of a maintenance contract, including training revenue, is recognized when the related services are performed. We also sell spare parts, revenue from which is recognized when control over the spare parts is transferred to the customer. Installation services include connecting and validating configuration of the product. In addition, several testing protocols are completed to confirm the equipment is performing to customer specifications. Revenue from product installation are deferred and recognized at a point in time, once installation is complete. Significant Judgments Our contracts with our customers often include promises to transfer multiple products and services. Each product and service is generally capable of being distinct and represents a separate performance obligation. Determining the SSP for each distinct performance obligation and allocation of consideration from an arrangement to the individual performance obligations and the appropriate timing of revenue recognition are significant judgments with respect to these arrangements. We typically estimate the SSP of products and services based on observable transactions when the products and services are sold on a standalone basis and those prices fall within a reasonable range. We typically have more than one SSP for individual products and services due to the stratification of these products by customers and circumstances. In these instances, we use information such as the size of the customer, geographic region, as well as customization of the products in determining the SSP. In instances where the SSP is not directly observable, we determine the SSP using information that includes market conditions, entity-specific factors, including discounting strategies, information about the customer or class of customer that is reasonably available and other observable inputs. While changes in the allocation of SSP between performance obligations will not affect the amount of total revenue recognized for a particular contract, any material changes could impact the timing of revenue recognition, which could have a material effect on our financial position and result of operations. Although the products are generally not sold with a right of return, we may provide other credits or sales incentives, which are accounted for either as variable consideration or material right, depending on the specific terms and conditions of the arrangement. These credits and incentives are estimated at contract inception and updated at the end of each reporting period if and when additional information becomes available. As outlined above, we use judgments to evaluate whether or not the customer has obtained control of the product and considers the several indicators in evaluating whether or not control has transferred to the customer. Not all of the indicators need to be met for us to conclude that control has transferred to the customer. Contract Assets/Liabilities The timing of revenue recognition, billings and cash collections may result in accounts receivable, contract assets, and contract liabilities (deferred revenue) on our condensed consolidated balance sheet. A receivable is recorded in the period we deliver products or provide services when we have an unconditional right to payment. Contract assets primarily relate to the value of products and services transferred to the customer for which the right to payment is not just dependent on the passage of time. Contract assets are transferred to receivable when rights to payment become unconditional. A contract liability is recognized when we receive payment or have an unconditional right to payment in advance of the satisfaction of performance. The contract liabilities represent (1) deferred product revenue related to the value of products that have been shipped and billed to customers and for which the control has not been transferred to the customers, and (2) deferred service revenue, which is recorded when we receive consideration, or such consideration is unconditionally due, from a customer prior to transferring services to the customer under the terms of a contract. Deferred service revenue typically results from warranty services, and maintenance and other service contracts. Contract assets and liabilities related to rights and obligations in a contract are recorded net in the condensed consolidated balance sheets. Upon the adoption of ASC 606, deferred costs of revenue is included in other current assets while under the legacy guidance deferred costs of revenue was included in deferred system profit. Business Combinations. We allocate the fair value of the purchase price of our acquisitions to the tangible assets acquired, liabilities assumed, and intangible assets acquired, including in-process research and development (“IPR&D”), based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these net tangible and intangible assets acquired is recorded as goodwill. Management's estimates of fair value are based upon assumptions believed to be reasonable, but our estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the measurement period, which will not exceed one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value of the purchase price of our acquisitions, whichever comes first, any subsequent adjustments are recorded to our condensed consolidated statements of operations. The fair value of IPR&D is initially capitalized as an intangible asset with an indefinite life and assessed for impairment thereafter. When an IPR&D project is completed, the IPR&D is reclassified as an amortizable purchased intangible asset and amortized over the asset’s estimated useful life. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. Derivative Financial Instruments. We use financial instruments, such as forward exchange contracts and currency options, to hedge a portion of, but not all, existing and forecasted foreign currency denominated transactions. The purpose of our foreign currency program is to manage the effect of exchange rate fluctuations on certain foreign currency denominated revenues, costs and eventual cash flows. The effect of exchange rate changes on forward exchange contracts is expected to offset the effect of exchange rate changes on the underlying hedged items. We also use interest rate lock agreements to hedge the risk associated with the variability of cash flows due to changes in the benchmark interest rate of the intended debt financing. We believe these financial instruments do not subject us to speculative risk that would otherwise result from changes in currency exchange rates or interest rates. All of our derivative financial instruments are recorded at fair value based upon quoted market prices for comparable instruments adjusted for risk of counterparty non-performance. For derivative instruments designated and qualifying as cash flow hedges of forecasted foreign currency denominated transactions or debt financing expected to occur within twelve to eighteen months, the effective portion of the gains or losses is reported in accumulated other comprehensive income (loss) (“OCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Prior to adopting the new accounting guidance for hedge accounting, time value was excluded from the assessment of effectiveness for derivative instruments designated as cash flow hedges. Time value was amortized on a mark-to-market basis and recognized in earnings over the life of the derivative contract. For derivative contracts executed after adopting the new accounting guidance, the election to include time value for the assessment of effectiveness is made on all forward contracts designated as cash flow hedges. The change in fair value of the derivative are recorded in OCI until the hedged transaction is recognized in earnings. The assessment effectiveness of options contracts designated as cash flow hedges continue to exclude time value after adopting the new accounting guidance. The initial value of the component excluded from the assessment of effectiveness are recognized in earnings over the life of the derivative contracts. Any difference between change in the fair value of the excluded components and the amounts recognized in earnings are recorded in OCI. For derivative instruments that are not designated as a cash flow hedge, gains and losses are recognized in other expense (income), net. We use foreign currency forward contracts to hedge certain foreign currency denominated assets or liabilities. The gains and losses on these derivative instruments are largely offset by the changes in the fair value of the assets or liabilities being hedged. Global Intangible Low-Taxed Income. The Tax Cuts and Jobs Act (the “Act”) includes provisions for Global Intangible Low-Taxed Income (“GILTI”) wherein taxes on foreign income are imposed in excess of a deemed return on tangible assets of foreign corporations. This income will effectively be taxed at a 10.5% tax rate in general. As a result, the Company’s deferred tax assets and liabilities were being evaluated to determine if the deferred tax assets and liabilities should be recognized for the basis differences expected to reverse as a result of GILTI provisions that are effective for the Company after the fiscal year ending June 30, 2018, or should the tax on GILTI provisions be recognized as period costs in each year incurred. The Company has elected to account for GILTI as a component of current period tax expense starting from the first quarter of the fiscal year ending June 30, 2019. |
Fair Value Measurement | Our financial assets and liabilities are measured and recorded at fair value, except for our debt and certain equity investments in privately-held companies. Prior to July 1, 2018 , the equity investments were generally accounted for under the cost method of accounting and were periodically assessed for other-than-temporary impairment when an event or circumstance indicated that an other-than-temporary decline in value may have occurred. Effective July 1, 2018 , equity investments without a readily available fair value are accounted for using the measurement alternative. The measurement alternative is calculated as cost minus impairment, if any, plus or minus changes resulting from observable price changes. Our non-financial assets, such as goodwill, intangible assets, and land, property and equipment, are recorded at cost and are assessed for impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred. |
Fair Value of Financial Instruments | We have evaluated the estimated fair value of financial instruments using available market information and valuations as provided by third-party sources. The use of different market assumptions and/or estimation methodologies could have a significant effect on the estimated fair value amounts. The fair value of our cash equivalents, accounts receivable, accounts payable and other current assets and liabilities approximate their carrying amounts due to the relatively short maturity of these items. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Impact of ASC 606 to the Condensed Consolidated Financial Statements | The following table summarizes the effects of adopting ASC 606 on our condensed consolidated balance sheet as of December 31, 2018 : December 31, 2018 (In thousands) As reported under ASC 606 Prior to adoption of ASC 606 Effect of changes ASSETS Accounts receivable, net $ 658,080 $ 678,863 $ (20,783 ) Other current assets 127,350 71,214 56,136 Deferred income taxes 225,124 206,674 18,450 LIABILITIES Deferred system revenue $ 196,242 $ — $ 196,242 Deferred service revenue 168,936 66,759 102,177 Deferred system profit — 319,696 (319,696 ) Other current liabilities 714,873 733,220 (18,347 ) Deferred service revenue, non-current 90,466 83,338 7,128 STOCKHOLDERS ’ EQUITY Retained earnings $ 1,048,804 $ 962,561 $ 86,243 Accumulated other comprehensive income (loss) (70,447 ) (70,502 ) 55 The following table summarizes the effects of adopting ASC 606 on our condensed consolidated statements of operations for the three months ended December 31, 2018 : Three months ended December 31, 2018 (In thousands, except per share amounts) As reported under ASC 606 Prior to adoption of ASC 606 Effect of changes Revenues: Product $ 852,201 $ 875,415 $ (23,214 ) Service 267,697 230,683 37,014 Costs and expenses: Costs of revenues 408,260 392,916 15,344 Other expense (income), net (9,228 ) (9,187 ) (41 ) Provision for income taxes 46,863 48,401 (1,538 ) Net income $ 369,100 $ 369,065 $ 35 Net income per share Basic $ 2.43 $ 2.43 $ — Diluted $ 2.42 $ 2.42 $ — The following table summarizes the effects of adopting ASC 606 on our condensed consolidated statements of operations for the six months ended December 31, 2018 : Six months ended December 31, 2018 (In thousands, except per share amounts) As reported under ASC 606 Prior to adoption of ASC 606 Effect of changes Revenues: Product $ 1,681,428 $ 1,576,088 $ 105,340 Service 531,730 460,643 71,087 Costs and expenses: Costs of revenues 789,647 734,790 54,857 Other expense (income), net (19,253 ) (19,213 ) (40 ) Provision for income taxes 78,487 64,335 14,152 Net income $ 765,044 $ 657,586 $ 107,458 Net income per share: Basic $ 4.98 $ 4.29 $ 0.69 Diluted $ 4.96 $ 4.27 $ 0.69 |
Schedule of Contract Balances | Contract Balances As of As of (In thousands, except for percentage) December 31, 2018 July 1, 2018 $ Change % Change Accounts receivable, net $ 658,080 $ 635,878 $ 22,202 3.49 % Contract assets $ 23,316 $ 14,727 $ 8,589 58.32 % Contract liabilities $ 455,644 $ 556,691 $ (101,047 ) (18.15 )% |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | Financial assets (excluding cash held in operating accounts and time deposits) and liabilities measured at fair value on a recurring basis, as of the date indicated below, were presented on our Condensed Consolidated Balance Sheet as follows: As of December 31, 2018 (In thousands) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Little or no market activity Inputs (Level 3) Assets Cash equivalents: Money market funds and other $ 877,527 $ 877,527 $ — $ — U.S. Treasury securities 668,058 — 668,058 — Marketable securities: Corporate debt securities 500,594 — 500,594 — Sovereign securities 10,919 — 10,919 — U.S. Government agency securities 172,615 172,615 — — U.S. Treasury securities 211,588 211,588 — — Total cash equivalents and marketable securities (1) 2,441,301 1,261,730 1,179,571 — Other current assets: Derivative assets 1,732 — 1,732 — Other non-current assets: Executive Deferred Savings Plan 181,104 137,301 43,803 — Total financial assets (1) $ 2,624,137 $ 1,399,031 $ 1,225,106 $ — Liabilities Other current liabilities: Derivative liabilities $ (14,318 ) $ — $ (14,318 ) $ — Contingent consideration payable (2,529 ) — — (2,529 ) Total financial liabilities $ (16,847 ) $ — $ (14,318 ) $ (2,529 ) ________________ (1) Excludes cash of $204.5 million held in operating accounts and time deposits of $48.3 million as of December 31, 2018 . Financial assets (excluding cash held in operating accounts and time deposits) and liabilities measured at fair value on a recurring basis, as of the date indicated below, were presented on our Condensed Consolidated Balance Sheet as follows: As of June 30, 2018 (In thousands) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Assets Cash equivalents: Corporate debt securities $ 4,995 $ — $ 4,995 Money market funds and other 863,115 863,115 — U.S. Government agency securities 7,675 — 7,675 U.S. Treasury securities 1,996 — 1,996 Marketable securities: Corporate debt securities 735,408 — 735,408 Sovereign securities 17,142 — 17,142 U.S. Government agency securities 316,022 299,501 16,521 U.S. Treasury securities 405,654 364,574 41,080 Total cash equivalents and marketable securities (1) 2,352,007 1,527,190 824,817 Other current assets: Derivative assets 5,385 — 5,385 Other non-current assets: Executive Deferred Savings Plan 197,213 143,580 53,633 Total financial assets (1) $ 2,554,605 $ 1,670,770 $ 883,835 Liabilities Other current liabilities: Derivative liabilities $ (6,828 ) $ — $ (6,828 ) Total financial liabilities $ (6,828 ) $ — $ (6,828 ) ________________ (1) Excludes cash of $473.8 million held in operating accounts and time deposits of $54.5 million as of June 30, 2018 . |
Financial Statement Components
Financial Statement Components (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | Consolidated Balance Sheets (In thousands) As of As of Accounts receivable, net: Accounts receivable, gross $ 669,650 $ 663,317 Allowance for doubtful accounts (11,570 ) (11,639 ) $ 658,080 $ 651,678 Inventories: Customer service parts $ 275,045 $ 253,639 Raw materials 340,253 331,065 Work-in-process 305,864 280,208 Finished goods 84,828 66,933 $ 1,005,990 $ 931,845 Other current assets: Contract assets $ 23,316 $ — Deferred costs of revenue (1) 32,821 — Prepaid expenses 48,411 47,088 Prepaid income and other taxes 12,181 23,452 Other current assets 10,621 14,619 $ 127,350 $ 85,159 Land, property and equipment, net: Land $ 40,593 $ 40,599 Buildings and leasehold improvements 340,722 335,647 Machinery and equipment 602,387 577,077 Office furniture and fixtures 22,569 22,171 Construction-in-process 16,360 9,180 1,022,631 984,674 Less: accumulated depreciation (716,280 ) (698,368 ) $ 306,351 $ 286,306 Other non-current assets: Executive Deferred Savings Plan (2) $ 181,103 $ 197,213 Other non-current assets 22,897 19,606 $ 204,000 $ 216,819 Other current liabilities: Executive Deferred Savings Plan (2) $ 181,976 $ 199,505 Compensation and benefits 230,079 177,587 Other accrued expenses 107,644 123,869 Customer credits and advances 144,408 116,440 Warranty 666 42,258 Income taxes payable 33,153 23,287 Interest payable 16,947 16,947 $ 714,873 $ 699,893 Other non-current liabilities: Income taxes payable $ 341,745 $ 371,665 Pension liabilities 67,139 66,786 Other non-current liabilities 37,395 32,912 $ 446,279 $ 471,363 ________________ (1) Deferred costs of revenue were previously included under deferred system profit prior to the adoption of ASC 606. (2) 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 $(19.8) million and $7.0 million during the three months ended December 31, 2018 and 2017 , respectively and was $(12.3) million and $13.8 million during the six months ended December 31, 2018 and 2017 , respectively. The amount of net gains (losses) associated with changes in the EDSP assets included in selling, general and administrative expense was $(19.4) million and $7.0 million during the three months ended December 31, 2018 and 2017 , respectively and was $(12.0) million and $13.9 million the six months ended December 31, 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 our Annual Report on Form 10-K for the fiscal year ended June 30, 2018 . |
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, 2018 $ (43,041 ) $ (6,736 ) $ (4,402 ) $ (16,268 ) $ (70,447 ) Balance as of June 30, 2018 $ (29,974 ) $ (11,032 ) $ 1,932 $ (14,859 ) $ (53,933 ) |
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 Six months ended Accumulated OCI Components Statements of Operations 2018 2017 2018 2017 Unrealized gains (losses) on cash flow hedges from foreign exchange and interest rate contracts (1) Revenues $ 1,705 $ 397 $ 2,688 $ 1,365 Costs of revenues (158 ) 377 (292 ) 1,338 Interest expense 189 189 377 378 Net gains (losses) reclassified from accumulated OCI $ 1,736 $ 963 $ 2,773 $ 3,081 Unrealized gains (losses) on available-for-sale securities Other expense (income), net $ (469 ) $ (69 ) $ (950 ) $ (63 ) __________________ (1) Reflects the adoption of the new accounting guidance for hedge accounting in the second quarter of fiscal year 2019. For additional details, refer to Note 15, “Derivative Instruments and Hedging Activities.” |
Marketable Securities (Tables)
Marketable Securities (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Marketable Securities | The amortized cost and fair value of marketable securities as of the dates indicated below were as follows: As of December 31, 2018 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities $ 505,296 $ — $ (4,702 ) $ 500,594 Money market funds and other 877,527 — — 877,527 Sovereign securities 11,008 — (89 ) 10,919 U.S. Government agency securities 174,058 2 (1,445 ) 172,615 U.S. Treasury securities 881,704 36 (2,094 ) 879,646 Subtotal 2,449,593 38 (8,330 ) 2,441,301 Add: Time deposits (1) 48,265 — — 48,265 Less: Cash equivalents 1,589,418 36 — 1,589,454 Marketable securities $ 908,440 $ 2 $ (8,330 ) $ 900,112 As of June 30, 2018 (In thousands) Amortized Gross Gross Fair Corporate debt securities $ 747,763 $ 148 $ (7,508 ) $ 740,403 Money market funds and other 863,115 — — 863,115 Sovereign securities 17,293 — (151 ) 17,142 U.S. Government agency securities 326,508 16 (2,827 ) 323,697 U.S. Treasury securities 411,329 3 (3,682 ) 407,650 Subtotal 2,366,008 167 (14,168 ) 2,352,007 Add: Time deposits (1) 54,537 — — 54,537 Less: Cash equivalents 930,608 — — 930,608 Marketable securities $ 1,489,937 $ 167 $ (14,168 ) $ 1,475,936 ________________ (1) Time deposits excluded from fair value measurements. |
Investments with Gross Unrealized Losses | The following table summarizes the fair value and gross unrealized losses of our investments that were in an unrealized loss position as of the date indicated below: As of December 31, 2018 (In thousands) Fair Value Gross Unrealized Losses (1) Corporate debt securities $ 497,833 $ (4,702 ) U.S. Treasury securities 211,588 (2,094 ) U.S. Government agency securities 169,967 (1,445 ) Sovereign securities 10,919 (89 ) Total $ 890,307 $ (8,330 ) __________________ (1) As of December 31, 2018 , the amount of total gross unrealized losses related to investments that had been in a continuous loss position for 12 months or more was $7.9 million . |
Contractual Maturities of Securities | The contractual maturities of securities classified as available-for-sale, regardless of their classification on our Condensed Consolidated Balance Sheet, as of the date indicated below were as follows: As of December 31, 2018 (In thousands) Amortized Cost Fair Value Due within one year $ 567,385 $ 563,316 Due after one year through three years 341,055 336,796 $ 908,440 $ 900,112 |
Goodwill and Purchased Intang_2
Goodwill and Purchased Intangible Assets (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill Balances | The following table presents goodwill carrying value and the movements by reporting unit during the six months ended December 31, 2018 : (In thousands) Wafer Inspection Patterning GSS Others Total Balance as of June 30, 2018 $ 281,005 $ 53,255 $ 8,039 $ 12,399 $ 354,698 Acquired goodwill — — 4,631 1,176 5,807 Foreign currency and other adjustments (25 ) — — — (25 ) Balance as of December 31, 2018 $ 280,980 $ 53,255 $ 12,670 $ 13,575 $ 360,480 |
Components of Purchased Intangible Assets | The components of purchased intangible assets as of the dates indicated below were as follows: (In thousands) As of As of Category Range of Useful Lives Gross Carrying Amount Accumulated Amortization and Impairment Net Amount Gross Carrying Amount Accumulated Amortization and Impairment Net Amount Existing technology 4-7 years $ 166,029 $ 146,001 $ 20,028 $ 160,859 $ 144,202 $ 16,657 Trade name/Trademark 5-7 years 21,073 20,143 930 20,993 20,060 933 Customer relationships 4-7 years 58,050 55,388 2,662 56,680 55,136 1,544 Other <1-5 years 1,270 1,072 198 660 461 199 Total $ 246,422 $ 222,604 $ 23,818 $ 239,192 $ 219,859 $ 19,333 |
Remaining Estimated Amortization Expense | Based on the purchased intangible assets gross carrying amount recorded as of December 31, 2018 , and assuming no subsequent additions to, or impairment of, the underlying assets, the remaining estimated annual amortization expense is expected to be as follows: Fiscal year ending June 30: Amortization (In thousands) 2019 (remaining 6 months) $ 2,218 2020 4,438 2021 4,438 2022 4,438 2023 4,242 Thereafter 4,044 Total $ 23,818 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table summarizes our debt as of December 31, 2018 and June 30, 2018 : As of December 31, 2018 As of June 30, 2018 Amount (In thousands) Effective Interest Rate Amount Effective Interest Rate Fixed-rate 3.375% Senior Notes due on November 1, 2019 $ 250,000 3.377 % $ 250,000 3.377 % Fixed-rate 4.125% Senior Notes due on November 1, 2021 500,000 4.128 % 500,000 4.128 % Fixed-rate 4.650% Senior Notes due on November 1, 2024 (1) 1,250,000 4.682 % 1,250,000 4.682 % Fixed-rate 5.650% Senior Notes due on November 1, 2034 250,000 5.670 % 250,000 5.670 % Total 2,250,000 2,250,000 Unamortized discount (2,343 ) (2,523 ) Unamortized debt issuance costs (9,279 ) (10,075 ) Total $ 2,238,378 $ 2,237,402 Reported as: Current portion of long-term debt $ 249,996 $ — Long-term debt 1,988,382 2,237,402 Total $ 2,238,378 $ 2,237,402 __________________ (1) The effective interest rate disclosed above for this series of Senior Notes excludes the impact of the treasury rate lock hedge discussed below. The effective interest rate including the impact of the treasury rate lock hedge was 4.626% . |
Equity and Long-Term Incentiv_2
Equity and Long-Term Incentive Compensation Plans (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Combined Activity Under Equity Incentive Plans | The following table summarizes the combined activity under our equity incentive plans for the indicated periods: (In thousands) Available For Grant (1) Balance as of June 30, 2018 3,680 Plan shares increased 12,000 Restricted stock units granted (2) (675 ) Restricted stock units granted adjustment (3) 5 Restricted stock units canceled 20 Balance as of December 31, 2018 15,030 __________________ (1) The number of RSUs reflects the application of the award multiplier (1.8x or 2.0x depending on the grant date of the applicable award). (2) Includes RSUs granted to senior management during the six months ended December 31, 2018 with performance-based vesting criteria (in addition to service-based vesting criteria for any of such RSUs that are deemed to have been earned). As of December 31, 2018 , it had not yet been determined the extent to which (if at all) the performance-based vesting criteria had been satisfied. Therefore, this line item includes all such performance-based RSUs granted during the six months ended December 31, 2018 , 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 six months ended December 31, 2018 reflects the application of the multiplier described above). (3) Represents the portion of RSUs granted with performance-based vesting criteria and reported at the actual number of shares issued upon achievement of the performance vesting criteria during the six months ended December 31, 2018 . |
Schedule of Stock-based Compensation Expense | The following table shows stock-based compensation expense for the indicated periods: Three months ended Six months ended (In thousands) 2018 2017 2018 2017 Stock-based compensation expense by: Costs of revenues $ 1,823 $ 1,656 $ 3,654 $ 3,072 Research and development 2,483 2,275 5,002 4,446 Selling, general and administrative 11,389 9,808 23,177 20,252 Total stock-based compensation expense $ 15,695 $ 13,739 $ 31,833 $ 27,770 |
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 As of Inventory $ 4,859 $ 4,580 |
Schedule of Restricted Stock Activity | The following table shows the activity and weighted-average grant date fair value for RSUs during the six months ended December 31, 2018 : Shares (1) (In thousands) Weighted-Average Grant Date Fair Value Outstanding restricted stock units as of June 30, 2018 (2) 2,014 $ 76.50 Granted (2) 338 $ 117.21 Granted adjustments (3) (2 ) $ 50.88 Vested and released (383 ) $ 66.41 Withheld for taxes (264 ) $ 66.41 Forfeited (10 ) $ 81.55 Outstanding restricted stock units as of December 31, 2018 (2) 1,693 $ 88.48 __________________ (1) Share numbers reflect actual shares subject to awarded RSUs. Under the terms of the 2004 Plan, the number of shares subject to each award reflected in this number is multiplied by either 1.8 x or 2.0 x (depending on the grant date of the award) to calculate the impact of the award on the share reserve under the 2004 Plan. (2) Includes RSUs granted to senior management with performance-based vesting criteria (in addition to service-based vesting criteria for any of such RSUs that are deemed to have been earned). As of December 31, 2018 , it had not yet been determined the extent to which (if at all) the performance-based vesting criteria had been satisfied. Therefore, this line item includes all such performance-based RSUs, reported at the maximum possible number of shares ( 42 thousand shares for the fiscal year ended June 30, 2017, 0.2 million shares for the fiscal year ended June 30, 2018 and 0.2 million shares for the six months ended December 31, 2018 ) that may ultimately be issuable if all applicable performance-based criteria are achieved at their maximum and all applicable service-based criteria are fully satisfied. (3) Represents the portion of RSUs granted with performance-based vesting criteria and reported at the actual number of shares issued upon achievement of the performance vesting criteria during six months ended December 31, 2018 . |
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 Six months ended (In thousands, except for weighted-average grant date fair value) 2018 2017 2018 2017 Weighted-average grant date fair value per unit $ 96.51 $ 105.15 $ 117.21 $ 91.39 Grant date fair value of vested restricted stock units $ 6,862 $ 5,322 $ 42,934 $ 41,856 Tax benefits realized by us in connection with vested and released restricted stock units $ 3,812 $ (1,930 ) $ 10,730 $ 16,482 |
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 Six months ended 2018 2017 2018 2017 Stock purchase plan: Expected stock price volatility 30.0 % 25.9 % 30.0 % 25.9 % Risk-free interest rate 1.9 % 0.9 % 1.9 % 0.9 % Dividend yield 2.9 % 2.6 % 2.9 % 2.6 % 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 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 Six months ended 2018 2017 2018 2017 Total cash received from employees for the issuance of shares under the ESPP $ 20,556 $ 20,579 $ 20,556 $ 20,579 Number of shares purchased by employees through the ESPP 270 264 270 264 Tax benefits realized by us in connection with the disqualifying dispositions of shares purchased under the ESPP $ 92 $ 47 $ 603 $ 894 Weighted-average fair value per share based on Black-Scholes model $ 22.73 $ 19.04 $ 22.73 $ 19.04 |
Stock Repurchase Program (Table
Stock Repurchase Program (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Share Repurchases | Share repurchases for the indicated periods (based on the trade date of the applicable repurchase) were as follows: Three months ended Six months ended (In thousands) 2018 2017 2018 2017 Number of shares of common stock repurchased 2,556 388 5,337 822 Total cost of repurchases $ 242,401 $ 40,868 $ 550,187 $ 81,643 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income (Loss) Per Share | The following table sets forth the computation of basic and diluted net income (loss) per share: (In thousands, except per share amounts) Three months ended Six months ended 2018 2017 2018 2017 Numerator: Net income (loss) $ 369,100 $ (134,319 ) $ 765,044 $ 146,617 Denominator: Weighted-average shares-basic, excluding unvested restricted stock units 152,148 156,587 153,684 156,707 Effect of dilutive restricted stock units and options 500 — 705 981 Weighted-average shares-diluted 152,648 156,587 154,389 157,688 Basic net income (loss) per share $ 2.43 $ (0.86 ) $ 4.98 $ 0.94 Diluted net income (loss) per share $ 2.42 $ (0.86 ) $ 4.96 $ 0.93 Anti-dilutive securities excluded from the computation of diluted net income (loss) per share 341 909 280 11 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Details of Income Taxes | The following table provides details of income taxes: Three months ended Six months ended (Dollar amounts in thousands) 2018 2017 2018 2017 Income before income taxes $ 415,963 $ 347,307 $ 843,531 $ 683,459 Provision for income taxes $ 46,863 $ 481,626 $ 78,487 $ 536,842 Effective tax rate 11.3 % 138.7 % 9.3 % 78.5 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Receivables Sold Under Factoring Agreements | The following table shows total receivables sold under factoring agreements and proceeds from sales of LCs for the indicated periods: Three months ended Six months ended (In thousands) 2018 2017 2018 2017 Receivables sold under factoring agreements $ 39,814 $ 47,232 $ 101,354 $ 79,133 Proceeds from sales of LCs $ 8,339 $ — $ 19,231 $ 5,571 |
Schedule of Future Minimum Rental Payments for Operating Leases | The following is a schedule of expected operating lease payments: Fiscal year ending June 30, Amount (In thousands) 2019 (remaining 6 months) $ 7,145 2020 8,361 2021 6,016 2022 3,166 2023 2,317 2024 and thereafter 3,078 Total minimum lease payments $ 30,083 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments, Location, Designated and Non-Designated, Gains (Losses) | The gains (losses) on derivatives in cash flow hedging relationships recognized in OCI for the indicated periods were as follows: Three months ended Six months ended December 31, December 31, (In thousands) 2018 2017 2018 2017 Derivatives Designated as Hedging Instruments: Rate lock agreements: Amounts included in the assessment of effectiveness $ (17,752 ) $ — $ (5,396 ) $ — Foreign exchange contracts: Amounts included in the assessment of effectiveness $ (1,201 ) $ 697 $ 237 $ 1,141 Amounts excluded from the assessment of effectiveness $ (29 ) $ — $ (29 ) $ — The locations and amounts of designated and non-designated derivative’s gains and losses reported in the condensed consolidated statements of operations for the indicated periods were as follows: Three months ended December 31, Three months ended December 31, 2018 2017 (In thousands) Revenue Cost of revenues Interest expense Other income (expense), net Revenue Cost of revenues Interest expense Other income (expense), net Total amounts presented in the condensed consolidated statement of operations in which the effects of cash flow hedges are recorded $ 1,119,898 $ 408,260 $ 26,538 $ (9,228 ) $ 975,822 $ 347,002 $ 27,372 $ (7,824 ) Gains (losses) on Derivatives Designated as Hedging Instruments: Rate lock agreements: Amount of gains (losses) reclassified from accumulated OCI to earnings $ — $ — $ 189 $ — $ — $ — $ — $ — Amount of gains (losses) reclassified from accumulated OCI to earnings as a result that a forecasted transaction is no longer probable of occurring $ — $ — $ — $ (108 ) $ — $ — $ — $ — Foreign exchange contracts: Amount of gains (losses) reclassified from accumulated OCI to earnings $ 1,705 $ (158 ) $ — $ (3 ) $ 397 $ 377 $ 189 $ — Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach $ 80 $ (8 ) $ — $ — $ — $ — $ — $ — Amount excluded from the assessment of effectiveness $ — $ — $ — $ (220 ) $ — $ — $ — $ (158 ) Gains (losses) on Derivatives Not Designated as Hedging Instruments: Amount of gains (losses) recognized in earnings $ — $ — $ — $ (3,700 ) $ — $ — $ — $ 3,237 Six months ended December 31, Six months ended December 31, 2018 2017 (In thousands) Revenue Cost of revenues Interest expense Other income (expense), net Revenue Cost of revenues Interest expense Other income (expense), net Total amounts presented in the condensed consolidated statement of operations in which the effects of cash flow hedges are recorded $ 2,213,158 $ 789,647 $ 52,900 $ (19,253 ) $ 1,945,403 $ 700,119 $ 57,948 $ (12,207 ) Gains (losses) on Derivatives Designated as Hedging Instruments: Rate lock agreements: Amount of gains (losses) reclassified from accumulated OCI to earnings $ — $ — $ 377 $ — $ — $ — $ — $ — Amount of gains (losses) reclassified from accumulated OCI to earnings as a result that a forecasted transaction is no longer probable of occurring $ — $ — $ — $ 4 $ — $ — $ — $ — Foreign exchange contracts: Amount of gains (losses) reclassified from accumulated OCI to earnings $ 2,688 $ (292 ) $ — $ (18 ) $ 1,365 $ 1,338 $ 378 $ — Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach $ 80 $ (8 ) $ — $ — $ — $ — $ — $ — Amount excluded from the assessment of effectiveness $ — $ — $ — $ (88 ) $ — $ — $ — $ (229 ) Gains (losses) on Derivatives Not Designated as Hedging Instruments: Amount of gains (losses) recognized in earnings $ — $ — $ — $ 63 $ — $ — $ — $ 3,676 |
Schedule of Notional Amounts of Derivatives Outstanding | The U.S. dollar equivalent of all outstanding notional amounts of foreign currency hedge contracts, with maximum remaining maturities of approximately ten months as of December 31, 2018 and June 30, 2018 , were as follows: (In thousands) As of As of Cash flow hedge contracts - foreign currency Purchase $ 777 $ 8,116 Sell $ 84,302 $ 115,032 Other foreign currency hedge contracts Purchase $ 163,758 $ 130,442 Sell $ 173,793 $ 154,442 |
Schedule of Derivative Instruments, Fair Value | The locations and fair value of our derivatives reported in our Condensed Consolidated Balance Sheets as of the dates indicated below were as follows: Asset Derivatives Liability Derivatives Balance Sheet Location As of As of Balance Sheet Location As of As of (In thousands) Fair Value Fair Value Derivatives designated as hedging instruments Rate lock contracts Other current assets $ — $ 219 Other current liabilities $ 10,955 $ 5,158 Foreign exchange contracts Other current assets 102 3,259 Other current liabilities 649 312 Total derivatives designated as hedging instruments 102 3,478 11,604 5,470 Derivatives not designated as hedging instruments Foreign exchange contracts Other current assets 1,630 1,907 Other current liabilities 2,714 1,358 Total derivatives not designated as hedging instruments 1,630 1,907 2,714 1,358 Total derivatives $ 1,732 $ 5,385 $ 14,318 $ 6,828 |
Balances and Changes in Accumulated Other Comprehensive Income Related to Derivative Instruments | The changes in OCI, before taxes, related to derivatives for the indicated periods were as follows: Three months ended Six months ended (In thousands) 2018 2017 2018 2017 Beginning balance $ 15,103 $ 6,452 $ 2,346 $ 8,126 Amount reclassified to earnings (1,736 ) (963 ) (2,773 ) (3,081 ) Net change in unrealized gains or losses (18,982 ) 697 (5,188 ) 1,141 Ending balance $ (5,615 ) $ 6,186 $ (5,615 ) $ 6,186 |
Offsetting of Assets and Liabilities | information related to the offsetting arrangements for the periods indicated was as follows (in thousands): As of December 31, 2018 Gross Amounts of Derivatives Not Offset in the Condensed Consolidated Balance Sheets Description Gross Amounts of Derivatives Gross Amounts of Derivatives Offset in the Condensed Consolidated Balance Sheets Net Amount of Derivatives Presented in the Condensed Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount Derivatives - Assets $ 1,732 $ — $ 1,732 $ (995 ) $ — $ 737 Derivatives - Liabilities $ (14,318 ) $ — $ (14,318 ) $ 995 $ — $ (13,323 ) As of June 30, 2018 Gross Amounts of Derivatives Not Offset in the Condensed Consolidated Balance Sheets Description Gross Amounts of Derivatives Gross Amounts of Derivatives Offset in the Condensed Consolidated Balance Sheets Net Amount of Derivatives Presented in the Condensed Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount Derivatives - Assets $ 5,385 $ — $ 5,385 $ (1,888 ) $ — $ 3,497 Derivatives - Liabilities $ (6,828 ) $ — $ (6,828 ) $ 1,888 $ — $ (4,940 ) |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | The following table provides the transactions with these parties for the indicated periods (for the portion of such period that they were considered related): Three months ended Six months ended (In thousands) 2018 2017 2018 2017 Total revenues $ 11 $ 455 $ 13 $ 457 Total purchases (1) $ 1,603 $ 542 $ 2,206 $ 1,246 __________________ (1) During the three months ended June 30, 2018 , we acquired a product line from Keysight Technologies, Inc. (“Keysight”) and entered into a transition services agreement pursuant to which Keysight provides certain manufacturing services to us. For additional details refer to Note 6, “Business Combinations”. We recorded the manufacturing services fees under the transition services agreement with Keysight within cost of revenues, which was immaterial for the three and six months ended December 31, 2018 . |
Segment Reporting and Geograp_2
Segment Reporting and Geographic Information (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Revenues by Geographic Region | The following is a summary of revenues by geographic region, based on ship-to location, for the indicated periods (as a percentage of total revenues): Three months ended December 31, Six months ended December 31, (Dollar amounts in thousands) 2018 2017 2018 2017 Revenues: China $ 269,878 24 % $ 66,460 7 % $ 610,012 28 % $ 234,799 12 % Taiwan 266,534 24 % 216,791 22 % 520,971 24 % 355,350 18 % Japan 180,283 16 % 154,762 16 % 315,861 14 % 301,197 15 % North America 150,113 13 % 149,042 15 % 252,242 11 % 278,292 14 % Korea 126,968 11 % 270,184 28 % 280,469 13 % 544,862 28 % Europe and Israel 80,618 7 % 82,158 8 % 152,287 7 % 165,663 9 % Rest of Asia 45,504 5 % 36,425 4 % 81,316 3 % 65,240 4 % Total $ 1,119,898 100 % $ 975,822 100 % $ 2,213,158 100 % $ 1,945,403 100 % |
Revenues by Major Products | The following is a summary of revenues by major products for the indicated periods (as a percentage of total revenues): Three months ended December 31, Six months ended December 31, (Dollar amounts in thousands) 2018 2017 2018 2017 Revenues: Wafer Inspection $ 505,878 45 % $ 400,584 41 % $ 978,191 44 % $ 790,004 41 % Patterning 288,997 26 % 274,868 28 % 598,206 27 % 569,218 29 % Global Service and Support (1) 295,216 26 % 273,805 28 % 568,193 26 % 534,303 27 % Other 29,807 3 % 26,565 3 % 68,568 3 % 51,878 3 % Total $ 1,119,898 100 % $ 975,822 100 % $ 2,213,158 100 % $ 1,945,403 100 % __________________ (1) The Global Service and Support revenues includes service revenues as presented in the Condensed Consolidated Statements of Operations as well as certain product revenues, primarily revenues from our K-T Pro business. |
Long-Lived Assets by Geographic Region | Long-lived assets by geographic region as of the dates indicated below were as follows: (In thousands) As of As of Long-lived assets: United States $ 205,253 $ 187,352 Singapore 49,302 47,009 Israel 27,517 26,980 Europe 12,816 12,924 Rest of Asia 11,463 12,041 Total $ 306,351 $ 286,306 |
Basis of Presentation - Basis
Basis of Presentation - Basis of Presentation (Details) - Orbotech $ / shares in Units, $ in Billions | Mar. 18, 2018USD ($)$ / sharesshares |
Business Acquisition | |
Merger agreement, share price (in dollars per share) | $ / shares | $ 38.86 |
Merger agreement, entity shares issues per acquiree share (in shares) | shares | 0.25 |
Merger agreement, enterprise value | $ | $ 3.2 |
Basis of Presentation - Tax Cu
Basis of Presentation - Tax Cuts and Jobs Act (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2018USD ($) | |
Retained Earnings | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Tax Cuts and Jobs Act of 2017, reclassification from AOCI to Retained Earnings, tax effect | $ 10.7 |
AOCI | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Tax Cuts and Jobs Act of 2017, reclassification from AOCI to Retained Earnings, tax effect | $ (10.7) |
Basis of Presentation - Revenu
Basis of Presentation - Revenue Recognition (Details) | 6 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Standard warranty coverage period | 12 months |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Dec. 31, 2018 | Jul. 01, 2018 | Jun. 30, 2018 | |
Retained Earnings Adjustments [Line Items] | |||
Effect on retained earnings for new accounting pronouncement | $ 1,048,804 | $ 1,056,445 | |
Standard warranty coverage period | 12 months | ||
Revenue, description of timing | Our payment terms and conditions vary by contract type, although terms generally include a requirement of payment of 70% to 90% of total contract consideration within 30 to 60 days of shipment, with the remainder payable within 30 days of acceptance | ||
Revenue recognized in excess of amount billed to customer | $ 23,200 | ||
Decrease in contract assets, reclassified to accounts receivable | 14,600 | ||
Revenue recognized, included in contract liabilities at beginning of period | 371,400 | ||
Accounting Standards Update 2014-09 | Effect of changes | |||
Retained Earnings Adjustments [Line Items] | |||
Effect on retained earnings for new accounting pronouncement | $ 86,243 | $ (21,000) | |
Accounting Standards Update 2014-09 | Effect if changes, Deferral of estimated fair value of warranty service | |||
Retained Earnings Adjustments [Line Items] | |||
Effect on retained earnings for new accounting pronouncement | (97,000) | ||
Accounting Standards Update 2014-09 | Effect of changes, Reversal of warranty expense | |||
Retained Earnings Adjustments [Line Items] | |||
Effect on retained earnings for new accounting pronouncement | 37,000 | ||
Accounting Standards Update 2014-09 | Effect of changes, Timing of transfer of control | |||
Retained Earnings Adjustments [Line Items] | |||
Effect on retained earnings for new accounting pronouncement | $ 26,000 |
Revenue - Impact of ASC 606 to
Revenue - Impact of ASC 606 to the Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jul. 01, 2018 | Jun. 30, 2018 |
ASSETS | |||
Accounts receivable, net | $ 658,080 | $ 635,878 | $ 651,678 |
Other current assets | 127,350 | 85,159 | |
Deferred income taxes | 225,124 | 193,200 | |
LIABILITIES | |||
Deferred system revenue | 196,242 | 0 | |
Deferred service revenue | 168,936 | 69,255 | |
Deferred system profit | 0 | 279,581 | |
Other current liabilities | 714,873 | 699,893 | |
Deferred service revenue | 90,466 | 71,997 | |
STOCKHOLDERS’ EQUITY | |||
Retained earnings | 1,048,804 | 1,056,445 | |
Accumulated other comprehensive income (loss) | (70,447) | $ (53,933) | |
Prior to adoption of ASC 606 | |||
ASSETS | |||
Accounts receivable, net | 678,863 | ||
Other current assets | 71,214 | ||
Deferred income taxes | 206,674 | ||
LIABILITIES | |||
Deferred system revenue | 0 | ||
Deferred service revenue | 66,759 | ||
Deferred system profit | 319,696 | ||
Other current liabilities | 733,220 | ||
Deferred service revenue | 83,338 | ||
STOCKHOLDERS’ EQUITY | |||
Retained earnings | 962,561 | ||
Accumulated other comprehensive income (loss) | (70,502) | ||
Effect of changes | Accounting Standards Update 2014-09 | |||
ASSETS | |||
Accounts receivable, net | (20,783) | ||
Other current assets | 56,136 | ||
Deferred income taxes | 18,450 | ||
LIABILITIES | |||
Deferred system revenue | 196,242 | ||
Deferred service revenue | 102,177 | ||
Deferred system profit | (319,696) | ||
Other current liabilities | (18,347) | ||
Deferred service revenue | 7,128 | ||
STOCKHOLDERS’ EQUITY | |||
Retained earnings | 86,243 | $ (21,000) | |
Accumulated other comprehensive income (loss) | $ 55 |
Revenue - Impact of ASC 606 _2
Revenue - Impact of ASC 606 to the Condensed Consolidated Statements of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | ||||
Revenues | $ 1,119,898 | $ 975,822 | $ 2,213,158 | $ 1,945,403 |
Costs and expenses: | ||||
Costs of revenues | 408,260 | 347,002 | 789,647 | 700,119 |
Other expense (income), net | (9,228) | (7,824) | (19,253) | (12,207) |
Provision for income taxes | 46,863 | 481,626 | 78,487 | 536,842 |
Net income (loss) | $ 369,100 | $ (134,319) | $ 765,044 | $ 146,617 |
Net income (loss) per share | ||||
Basic (in dollars per share) | $ 2.43 | $ (0.86) | $ 4.98 | $ 0.94 |
Diluted (in dollars per share) | $ 2.42 | $ (0.86) | $ 4.96 | $ 0.93 |
Prior to adoption of ASC 606 | ||||
Costs and expenses: | ||||
Costs of revenues | $ 392,916 | $ 734,790 | ||
Other expense (income), net | (9,187) | (19,213) | ||
Provision for income taxes | 48,401 | 64,335 | ||
Net income (loss) | $ 369,065 | $ 657,586 | ||
Net income (loss) per share | ||||
Basic (in dollars per share) | $ 2.43 | $ 4.29 | ||
Diluted (in dollars per share) | $ 2.42 | $ 4.27 | ||
Effect of changes | Accounting Standards Update 2014-09 | ||||
Costs and expenses: | ||||
Costs of revenues | $ 15,344 | $ 54,857 | ||
Other expense (income), net | (41) | (40) | ||
Provision for income taxes | (1,538) | 14,152 | ||
Net income (loss) | $ 35 | $ 107,458 | ||
Net income (loss) per share | ||||
Basic (in dollars per share) | $ 0 | $ 0.69 | ||
Diluted (in dollars per share) | $ 0 | $ 0.69 | ||
Product | ||||
Revenues: | ||||
Revenues | $ 852,201 | $ 761,587 | $ 1,681,428 | $ 1,522,374 |
Product | Prior to adoption of ASC 606 | ||||
Revenues: | ||||
Revenues | 875,415 | 1,576,088 | ||
Product | Effect of changes | Accounting Standards Update 2014-09 | ||||
Revenues: | ||||
Revenues | (23,214) | 105,340 | ||
Service [Member] | ||||
Revenues: | ||||
Revenues | 267,697 | $ 214,235 | 531,730 | $ 423,029 |
Service [Member] | Prior to adoption of ASC 606 | ||||
Revenues: | ||||
Revenues | 230,683 | 460,643 | ||
Service [Member] | Effect of changes | Accounting Standards Update 2014-09 | ||||
Revenues: | ||||
Revenues | $ 37,014 | $ 71,087 |
Revenue - Schedule of Contract
Revenue - Schedule of Contract Balances (Details) - USD ($) $ in Thousands | 6 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jul. 01, 2018 | Jun. 30, 2018 | |
Accounts receivable, net | |||||
Accounts receivable, net | $ 658,080 | $ 658,080 | $ 635,878 | $ 651,678 | |
Change in accounts receivable, net | 19,790 | $ 22,202 | $ 169,498 | ||
Percentage change in accounts receivable, net | 3.49% | ||||
Contract assets | |||||
Contract assets | 23,316 | $ 23,316 | 14,727 | $ 0 | |
Change in contract assets | $ 8,589 | ||||
Percentage change in contract assets | 58.32% | ||||
Contract liabilities | |||||
Contract liabilities | $ 455,644 | $ 455,644 | $ 556,691 | ||
Change in contract liabilities | $ (101,047) | ||||
Percentage change in contract liabilities | (18.15%) |
Revenue - Remaining Performanc
Revenue - Remaining Performance Obligations (Details) $ in Millions | Dec. 31, 2018USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 1,660 |
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 5.00% |
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 15.00% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jun. 30, 2018 | |||
Other current assets: | |||||
Derivative assets | $ 1,732 | $ 5,385 | |||
Other current liabilities: | |||||
Derivative liabilities | (14,318) | (6,828) | |||
Cash excluded from fair value measurement | 204,500 | 473,800 | |||
Time deposits excluded from fair value measurement | [1] | 48,265 | 54,537 | ||
Recurring | |||||
Marketable securities: | |||||
Total cash equivalents and marketable securities | 2,441,301 | [2] | 2,352,007 | [3] | |
Other current assets: | |||||
Derivative assets | 1,732 | 5,385 | |||
Other non-current assets: | |||||
Executive Deferred Savings Plan | 181,104 | 197,213 | |||
Total financial assets | 2,624,137 | [2] | 2,554,605 | [3] | |
Other current liabilities: | |||||
Derivative liabilities | (14,318) | (6,828) | |||
Contingent consideration payable | (2,529) | ||||
Total financial liabilities | (16,847) | (6,828) | |||
Recurring | Money market funds and other | |||||
Cash equivalents: | |||||
Cash equivalents | 877,527 | 863,115 | |||
Recurring | U.S. Treasury securities | |||||
Cash equivalents: | |||||
Cash equivalents | 668,058 | 1,996 | |||
Marketable securities: | |||||
Marketable securities | 211,588 | 405,654 | |||
Recurring | Corporate debt securities | |||||
Cash equivalents: | |||||
Cash equivalents | 4,995 | ||||
Marketable securities: | |||||
Marketable securities | 500,594 | 735,408 | |||
Recurring | Sovereign securities | |||||
Marketable securities: | |||||
Marketable securities | 10,919 | 17,142 | |||
Recurring | U.S. Government agency securities | |||||
Cash equivalents: | |||||
Cash equivalents | 7,675 | ||||
Marketable securities: | |||||
Marketable securities | 172,615 | 316,022 | |||
Recurring | Level 1 | |||||
Marketable securities: | |||||
Total cash equivalents and marketable securities | 1,261,730 | [2] | 1,527,190 | [3] | |
Other current assets: | |||||
Derivative assets | 0 | 0 | |||
Other non-current assets: | |||||
Executive Deferred Savings Plan | 137,301 | 143,580 | |||
Total financial assets | 1,399,031 | [2] | 1,670,770 | [3] | |
Other current liabilities: | |||||
Derivative liabilities | 0 | 0 | |||
Contingent consideration payable | 0 | ||||
Total financial liabilities | 0 | 0 | |||
Recurring | Level 1 | Money market funds and other | |||||
Cash equivalents: | |||||
Cash equivalents | 877,527 | 863,115 | |||
Recurring | Level 1 | U.S. Treasury securities | |||||
Cash equivalents: | |||||
Cash equivalents | 0 | 0 | |||
Marketable securities: | |||||
Marketable securities | 211,588 | 364,574 | |||
Recurring | Level 1 | Corporate debt securities | |||||
Cash equivalents: | |||||
Cash equivalents | 0 | ||||
Marketable securities: | |||||
Marketable securities | 0 | 0 | |||
Recurring | Level 1 | Sovereign securities | |||||
Marketable securities: | |||||
Marketable securities | 0 | 0 | |||
Recurring | Level 1 | U.S. Government agency securities | |||||
Cash equivalents: | |||||
Cash equivalents | 0 | ||||
Marketable securities: | |||||
Marketable securities | 172,615 | 299,501 | |||
Recurring | Level 2 | |||||
Marketable securities: | |||||
Total cash equivalents and marketable securities | 1,179,571 | [2] | 824,817 | [3] | |
Other current assets: | |||||
Derivative assets | 1,732 | 5,385 | |||
Other non-current assets: | |||||
Executive Deferred Savings Plan | 43,803 | 53,633 | |||
Total financial assets | 1,225,106 | [2] | 883,835 | [3] | |
Other current liabilities: | |||||
Derivative liabilities | (14,318) | (6,828) | |||
Contingent consideration payable | 0 | ||||
Total financial liabilities | (14,318) | (6,828) | |||
Recurring | Level 2 | Money market funds and other | |||||
Cash equivalents: | |||||
Cash equivalents | 0 | 0 | |||
Recurring | Level 2 | U.S. Treasury securities | |||||
Cash equivalents: | |||||
Cash equivalents | 668,058 | 1,996 | |||
Marketable securities: | |||||
Marketable securities | 0 | 41,080 | |||
Recurring | Level 2 | Corporate debt securities | |||||
Cash equivalents: | |||||
Cash equivalents | 4,995 | ||||
Marketable securities: | |||||
Marketable securities | 500,594 | 735,408 | |||
Recurring | Level 2 | Sovereign securities | |||||
Marketable securities: | |||||
Marketable securities | 10,919 | 17,142 | |||
Recurring | Level 2 | U.S. Government agency securities | |||||
Cash equivalents: | |||||
Cash equivalents | 7,675 | ||||
Marketable securities: | |||||
Marketable securities | 0 | $ 16,521 | |||
Recurring | Level 3 | |||||
Marketable securities: | |||||
Total cash equivalents and marketable securities | [2] | 0 | |||
Other current assets: | |||||
Derivative assets | 0 | ||||
Other non-current assets: | |||||
Executive Deferred Savings Plan | 0 | ||||
Total financial assets | [2] | 0 | |||
Other current liabilities: | |||||
Derivative liabilities | 0 | ||||
Contingent consideration payable | (2,529) | ||||
Total financial liabilities | (2,529) | ||||
Recurring | Level 3 | Money market funds and other | |||||
Cash equivalents: | |||||
Cash equivalents | 0 | ||||
Recurring | Level 3 | U.S. Treasury securities | |||||
Cash equivalents: | |||||
Cash equivalents | 0 | ||||
Marketable securities: | |||||
Marketable securities | 0 | ||||
Recurring | Level 3 | Corporate debt securities | |||||
Marketable securities: | |||||
Marketable securities | 0 | ||||
Recurring | Level 3 | Sovereign securities | |||||
Marketable securities: | |||||
Marketable securities | 0 | ||||
Recurring | Level 3 | U.S. Government agency securities | |||||
Marketable securities: | |||||
Marketable securities | $ 0 | ||||
[1] | Time deposits excluded from fair value measurements. | ||||
[2] | Excludes cash of $204.5 million held in operating accounts and time deposits of $48.3 million as of December 31, 2018. | ||||
[3] | Excludes cash of $473.8 million held in operating accounts and time deposits of $54.5 million as of June 30, 2018. |
Financial Statement Component_2
Financial Statement Components - Balance Sheet Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Jul. 01, 2018 | Jun. 30, 2018 | |||
Accounts receivable, net: | ||||||||
Accounts receivable, gross | $ 669,650 | $ 669,650 | $ 663,317 | |||||
Allowance for doubtful accounts | (11,570) | (11,570) | (11,639) | |||||
Accounts receivable, net | 658,080 | 658,080 | $ 635,878 | 651,678 | ||||
Inventories: | ||||||||
Customer service parts | 275,045 | 275,045 | 253,639 | |||||
Raw materials | 340,253 | 340,253 | 331,065 | |||||
Work-in-process | 305,864 | 305,864 | 280,208 | |||||
Finished goods | 84,828 | 84,828 | 66,933 | |||||
Inventories | 1,005,990 | 1,005,990 | 931,845 | |||||
Other current assets: | ||||||||
Contract assets | 23,316 | 23,316 | $ 14,727 | 0 | ||||
Deferred costs of revenue | 32,821 | 32,821 | 0 | [1] | ||||
Prepaid expenses | 48,411 | 48,411 | 47,088 | |||||
Prepaid income and other taxes | 12,181 | 12,181 | 23,452 | |||||
Other current assets | 10,621 | 10,621 | 14,619 | |||||
Other current assets, total | 127,350 | 127,350 | 85,159 | |||||
Land, property and equipment, net: | ||||||||
Land | 40,593 | 40,593 | 40,599 | |||||
Buildings and leasehold improvements | 340,722 | 340,722 | 335,647 | |||||
Machinery and equipment | 602,387 | 602,387 | 577,077 | |||||
Office furniture and fixtures | 22,569 | 22,569 | 22,171 | |||||
Construction-in-process | 16,360 | 16,360 | 9,180 | |||||
Land, property and equipment, gross | 1,022,631 | 1,022,631 | 984,674 | |||||
Less: accumulated depreciation | (716,280) | (716,280) | (698,368) | |||||
Land, property and equipment, net | 306,351 | 306,351 | 286,306 | |||||
Other non-current assets: | ||||||||
Executive Deferred Savings Plan | [2] | 181,103 | 181,103 | 197,213 | ||||
Other non-current assets | 22,897 | 22,897 | 19,606 | |||||
Other non-current assets, total | 204,000 | 204,000 | 216,819 | |||||
Other current liabilities: | ||||||||
Executive Deferred Savings Plan | [2] | 181,976 | 181,976 | 199,505 | ||||
Compensation and benefits | 230,079 | 230,079 | 177,587 | |||||
Other accrued expenses | 107,644 | 107,644 | 123,869 | |||||
Customer credits and advances | 144,408 | 144,408 | 116,440 | |||||
Warranty | 666 | 666 | 42,258 | |||||
Income taxes payable | 33,153 | 33,153 | 23,287 | |||||
Interest payable | 16,947 | 16,947 | 16,947 | |||||
Other current liabilities, total | 714,873 | 714,873 | 699,893 | |||||
Other non-current liabilities: | ||||||||
Income taxes payable | 341,745 | 341,745 | 371,665 | |||||
Pension liabilities | 67,139 | 67,139 | 66,786 | |||||
Other non-current liabilities | 37,395 | 37,395 | 32,912 | |||||
Other non-current liabilities, total | 446,279 | 446,279 | $ 471,363 | |||||
Selling, general and administrative | ||||||||
Other non-current liabilities: | ||||||||
EDSP Liability | (19,800) | $ 7,000 | (12,300) | $ 13,800 | ||||
Gain (loss) on deferred compensation plan assets | $ (19,400) | $ 7,000 | $ (12,000) | $ 13,900 | ||||
[1] | Deferred costs of revenue were previously included under deferred system profit prior to the adoption of ASC 606. | |||||||
[2] | (2)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 $(19.8) million and $7.0 million during the three months ended December 31, 2018 and 2017, respectively and was $(12.3) million and $13.8 million during the six months ended December 31, 2018 and 2017, respectively. The amount of net gains (losses) associated with changes in the EDSP assets included in selling, general and administrative expense was $(19.4) million and $7.0 million during the three months ended December 31, 2018 and 2017, respectively and was $(12.0) million and $13.9 million the six months ended December 31, 2018 and 2017, respectively. For additional details, refer to Note 1, “Description of Business and Summary of Significant Accounting Policies,” of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018. |
Financial Statement Component_3
Financial Statement Components - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jun. 30, 2018 |
Accumulated Other Comprehensive Income (Loss) | ||
Stockholders' equity | $ 1,597,622 | $ 1,620,511 |
Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss) | ||
Stockholders' equity | (43,041) | (29,974) |
Unrealized Gains (Losses) on Available-for-Sale Securities | ||
Accumulated Other Comprehensive Income (Loss) | ||
Stockholders' equity | (6,736) | (11,032) |
Unrealized Gains (Losses) on Cash Flow Hedges | ||
Accumulated Other Comprehensive Income (Loss) | ||
Stockholders' equity | (4,402) | |
Unrealized Gains (Losses) on Cash Flow Hedges | ||
Accumulated Other Comprehensive Income (Loss) | ||
Stockholders' equity | 1,932 | |
Unrealized Gains (Losses) on Defined Benefit Plans | ||
Accumulated Other Comprehensive Income (Loss) | ||
Stockholders' equity | (16,268) | (14,859) |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss) | ||
Stockholders' equity | $ (70,447) | $ (53,933) |
Financial Statement Component_4
Financial Statement Components - Effects on net income (loss) of amounts reclassified from AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Accumulated Other Comprehensive Income (Loss) | |||||
Revenues | $ 1,119,898 | $ 975,822 | $ 2,213,158 | $ 1,945,403 | |
Costs of revenues | 408,260 | 347,002 | 789,647 | 700,119 | |
Interest expense | 26,538 | 27,372 | 52,900 | 57,948 | |
Net income (loss) | 369,100 | (134,319) | 765,044 | 146,617 | |
Unrealized Gains (Losses) on Defined Benefit Plans | |||||
Accumulated Other Comprehensive Income (Loss) | |||||
Other comprehensive (income) loss, reclassification adjustment from AOCI, pension and other postretirement benefit plans, net of tax | 200 | 400 | 400 | 800 | |
Reclassification out of accumulated other comprehensive income | Unrealized gains (losses) on cash flow hedges from foreign exchange and interest rate contracts(1) | |||||
Accumulated Other Comprehensive Income (Loss) | |||||
Revenues | [1] | 1,705 | 397 | 2,688 | 1,365 |
Costs of revenues | (158) | 377 | (292) | 1,338 | |
Interest expense | 189 | 189 | 377 | 378 | |
Net income (loss) | 1,736 | 963 | 2,773 | 3,081 | |
Reclassification out of accumulated other comprehensive income | Unrealized gains (losses) on available-for-sale securities | |||||
Accumulated Other Comprehensive Income (Loss) | |||||
Other expense (income), net | $ (469) | $ (69) | $ (950) | $ (63) | |
[1] | Reflects the adoption of the new accounting guidance for hedge accounting in the second quarter of fiscal year 2019. For additional details, refer to Note 15, “Derivative Instruments and Hedging Activities.” |
Marketable Securities - Amorti
Marketable Securities - Amortized Cost and Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jun. 30, 2018 | |
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | $ 2,449,593 | $ 2,366,008 | |
Gross Unrealized Gains | 38 | 167 | |
Gross Unrealized Losses | (8,330) | (14,168) | |
Fair Value | 2,441,301 | 2,352,007 | |
Add: Time deposits | [1] | 48,265 | 54,537 |
Marketable securities, Amortized Cost | 908,440 | 1,489,937 | |
Marketable securities, Gross Unrealized Gains | 2 | 167 | |
Marketable securities, Gross Unrealized Losses | (8,330) | (14,168) | |
Marketable securities, Fair value | 900,112 | 1,475,936 | |
Cash and Cash Equivalents | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 1,589,418 | 930,608 | |
Gross Unrealized Gains | 36 | 0 | |
Gross Unrealized Losses | 0 | 0 | |
Fair Value | 1,589,454 | 930,608 | |
Corporate debt securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 505,296 | 747,763 | |
Gross Unrealized Gains | 0 | 148 | |
Gross Unrealized Losses | (4,702) | (7,508) | |
Fair Value | 500,594 | 740,403 | |
Money market funds and other | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 877,527 | 863,115 | |
Gross Unrealized Gains | 0 | 0 | |
Gross Unrealized Losses | 0 | 0 | |
Fair Value | 877,527 | 863,115 | |
Sovereign securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 11,008 | 17,293 | |
Gross Unrealized Gains | 0 | 0 | |
Gross Unrealized Losses | (89) | (151) | |
Fair Value | 10,919 | 17,142 | |
U.S. Government agency securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 174,058 | 326,508 | |
Gross Unrealized Gains | 2 | 16 | |
Gross Unrealized Losses | (1,445) | (2,827) | |
Fair Value | 172,615 | 323,697 | |
U.S. Treasury securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 881,704 | 411,329 | |
Gross Unrealized Gains | 36 | 3 | |
Gross Unrealized Losses | (2,094) | (3,682) | |
Fair Value | $ 879,646 | $ 407,650 | |
Corporate and Government securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Investment portfolio, maximum maturity term | 3 years | ||
[1] | Time deposits excluded from fair value measurements. |
Marketable Securities - Contin
Marketable Securities - Continuous Unrealized Loss Position (Details) $ in Thousands | Dec. 31, 2018USD ($) | |
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | $ 890,307 | |
Gross Unrealized Losses, less than 12 months | (8,330) | [1] |
Gross Unrealized Losses, 12 months or more | 7,900 | |
Corporate Debt Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 497,833 | |
Gross Unrealized Losses, less than 12 months | (4,702) | [1] |
U.S. Treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 211,588 | |
Gross Unrealized Losses, less than 12 months | (2,094) | [1] |
U.S. Government agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 169,967 | |
Gross Unrealized Losses, less than 12 months | (1,445) | [1] |
Sovereign securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 10,919 | |
Gross Unrealized Losses, less than 12 months | $ (89) | [1] |
[1] | As of December 31, 2018, the amount of total gross unrealized losses related to investments that had been in a continuous loss position for 12 months or more was $7.9 million. |
Marketable Securities - Contra
Marketable Securities - Contractual Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jun. 30, 2018 |
Amortized Cost | ||
Due within one year | $ 567,385 | |
Due after one year through three years | 341,055 | |
Marketable securities, Amortized Cost | 908,440 | $ 1,489,937 |
Fair Value | ||
Due within one year | 563,316 | |
Due after one year through three years | 336,796 | |
Marketable securities, Fair value | $ 900,112 | $ 1,475,936 |
Business Combinations - Additi
Business Combinations - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Jul. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | |
Business Acquisition | ||||
Goodwill acquired | $ 354,698 | $ 360,480 | ||
Privately-Held Company, September 30, 2018 Acquisition | ||||
Business Acquisition | ||||
Total purchase consideration | $ 4,100 | |||
Additional contingent consideration, liability | $ 1,500 | 900 | ||
Privately-Held Company, July 11, 2018 Acquisition | ||||
Business Acquisition | ||||
Total purchase consideration | $ 11,300 | |||
Additional contingent consideration, liability | $ 4,500 | $ 1,600 | ||
Product line from Keysight Technologies, Inc. | ||||
Business Acquisition | ||||
Total purchase consideration | 12,100 | |||
Goodwill acquired | $ 5,200 |
Goodwill and Purchased Intang_3
Goodwill and Purchased Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 6 Months Ended |
Dec. 31, 2018USD ($)reporting_unit | |
Goodwill | |
Number of reporting units | reporting_unit | 4 |
Goodwill | |
Balance as of June 30, 2018 | $ 354,698 |
Acquired goodwill | 5,807 |
Foreign currency and other adjustments | (25) |
Balance as of December 31, 2018 | 360,480 |
Wafer Inspection | |
Goodwill | |
Balance as of June 30, 2018 | 281,005 |
Acquired goodwill | 0 |
Foreign currency and other adjustments | (25) |
Balance as of December 31, 2018 | 280,980 |
Patterning | |
Goodwill | |
Balance as of June 30, 2018 | 53,255 |
Acquired goodwill | 0 |
Foreign currency and other adjustments | 0 |
Balance as of December 31, 2018 | 53,255 |
GSS | |
Goodwill | |
Balance as of June 30, 2018 | 8,039 |
Acquired goodwill | 4,631 |
Foreign currency and other adjustments | 0 |
Balance as of December 31, 2018 | 12,670 |
Others | |
Goodwill | |
Balance as of June 30, 2018 | 12,399 |
Acquired goodwill | 1,176 |
Foreign currency and other adjustments | 0 |
Balance as of December 31, 2018 | $ 13,575 |
Goodwill and Purchased Intang_4
Goodwill and Purchased Intangible Assets - Purchased Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2018 | |
Components of purchased intangible assets | |||||
Gross Carrying Amount | $ 246,422 | $ 246,422 | $ 239,192 | ||
Accumulated Amortization and Impairment | 222,604 | 222,604 | 219,859 | ||
Total | 23,818 | 23,818 | 19,333 | ||
Other intangible assets, amortization expense | 1,300 | $ 1,200 | 2,700 | $ 2,400 | |
Existing technology | |||||
Components of purchased intangible assets | |||||
Gross Carrying Amount | 166,029 | 166,029 | 160,859 | ||
Accumulated Amortization and Impairment | 146,001 | 146,001 | 144,202 | ||
Total | 20,028 | $ 20,028 | 16,657 | ||
Existing technology | Minimum | |||||
Components of purchased intangible assets | |||||
Range of Useful Lives | 4 years | ||||
Existing technology | Maximum | |||||
Components of purchased intangible assets | |||||
Range of Useful Lives | 7 years | ||||
Trade name/Trademark | |||||
Components of purchased intangible assets | |||||
Gross Carrying Amount | 21,073 | $ 21,073 | 20,993 | ||
Accumulated Amortization and Impairment | 20,143 | 20,143 | 20,060 | ||
Total | 930 | $ 930 | 933 | ||
Trade name/Trademark | Minimum | |||||
Components of purchased intangible assets | |||||
Range of Useful Lives | 5 years | ||||
Trade name/Trademark | Maximum | |||||
Components of purchased intangible assets | |||||
Range of Useful Lives | 7 years | ||||
Customer relationships | |||||
Components of purchased intangible assets | |||||
Gross Carrying Amount | 58,050 | $ 58,050 | 56,680 | ||
Accumulated Amortization and Impairment | 55,388 | 55,388 | 55,136 | ||
Total | 2,662 | $ 2,662 | 1,544 | ||
Customer relationships | Minimum | |||||
Components of purchased intangible assets | |||||
Range of Useful Lives | 4 years | ||||
Customer relationships | Maximum | |||||
Components of purchased intangible assets | |||||
Range of Useful Lives | 7 years | ||||
Other | |||||
Components of purchased intangible assets | |||||
Gross Carrying Amount | 1,270 | $ 1,270 | 660 | ||
Accumulated Amortization and Impairment | 1,072 | 1,072 | 461 | ||
Total | $ 198 | $ 198 | $ 199 | ||
Other | Minimum | |||||
Components of purchased intangible assets | |||||
Range of Useful Lives | 1 year | ||||
Other | Maximum | |||||
Components of purchased intangible assets | |||||
Range of Useful Lives | 5 years |
Goodwill and Purchased Intang_5
Goodwill and Purchased Intangible Assets - Future Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jun. 30, 2018 |
Remaing Estimated Amortization Expense | ||
2019 (remaining 6 months) | $ 2,218 | |
2,020 | 4,438 | |
2,021 | 4,438 | |
2,022 | 4,438 | |
2,023 | 4,242 | |
Thereafter | 4,044 | |
Total | $ 23,818 | $ 19,333 |
Debt - Schedule of Debt (Detai
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jun. 30, 2018 | Nov. 30, 2014 | |
Debt Instrument | ||||
Total debt, gross | $ 2,250,000 | $ 2,250,000 | ||
Unamortized discount | (2,343) | (2,523) | ||
Unamortized debt issuance costs | (9,279) | (10,075) | ||
Total, net of discount | 2,238,378 | 2,237,402 | ||
Current portion of long-term debt | 249,996 | 0 | ||
Long-term debt | $ 1,988,382 | 2,237,402 | ||
Senior notes | ||||
Debt Instrument | ||||
Unamortized discount | $ (4,000) | |||
Fixed-rate 3.375% Senior Notes due on November 1, 2019 | Senior notes | ||||
Debt Instrument | ||||
Stated interest rate | 3.375% | |||
Total debt, gross | $ 250,000 | $ 250,000 | ||
Effective interest rate | 3.377% | 3.377% | ||
Fixed-rate 4.125% Senior Notes due on November 1, 2021 | Senior notes | ||||
Debt Instrument | ||||
Stated interest rate | 4.125% | |||
Total debt, gross | $ 500,000 | $ 500,000 | ||
Effective interest rate | 4.128% | 4.128% | ||
Fixed-rate 4.650% Senior Notes due on November 1, 2024 | Senior notes | ||||
Debt Instrument | ||||
Stated interest rate | [1] | 4.65% | ||
Total debt, gross | [1] | $ 1,250,000 | $ 1,250,000 | |
Effective interest rate | [1] | 4.682% | 4.682% | |
Fixed-rate 5.650% Senior Notes due on November 1, 2034 | Senior notes | ||||
Debt Instrument | ||||
Stated interest rate | 5.65% | |||
Total debt, gross | $ 250,000 | $ 250,000 | ||
Effective interest rate | 5.67% | 5.67% | ||
Portion of senior notes | Cash flow hedge contracts - foreign currency | Senior notes | Treasury lock | Derivatives designated as hedging instruments | ||||
Debt Instrument | ||||
Effective percentage including treasury rate lock hedge | 4.626% | |||
[1] | The effective interest rate disclosed above for this series of Senior Notes excludes the impact of the treasury rate lock hedge discussed below. The effective interest rate including the impact of the treasury rate lock hedge was 4.626%. |
Debt - Additional Information
Debt - Additional Information (Details) $ in Millions | Dec. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
Future principal payments for long-term debt in fiscal year 2020 | $ 250 |
Future principal payments for long-term debt in fiscal year 2022 | 500 |
Future principal payments for long-term debt after fiscal year 2023 | $ 1,500 |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) - USD ($) | 6 Months Ended | |||
Dec. 31, 2018 | Jun. 30, 2018 | Nov. 30, 2014 | Oct. 31, 2014 | |
Debt Instrument | ||||
Unamortized discount | $ 2,343,000 | $ 2,523,000 | ||
Treasury lock | Derivatives designated as hedging instruments | Cash flow hedge contracts - foreign currency | Portion of senior notes | Senior notes | ||||
Debt Instrument | ||||
Notional amount of derivative | $ 1,000,000,000 | |||
Senior notes | ||||
Debt Instrument | ||||
Face amount | $ 2,500,000,000 | |||
Unamortized discount | $ 4,000,000 | |||
Redemption price | 101.00% | |||
Fair value disclosure | $ 2,300,000,000 | $ 2,330,000,000 |
Debt - Revolving Credit Facili
Debt - Revolving Credit Facility (Details) - Revolving credit facility - Line of credit | 1 Months Ended | 6 Months Ended | |
Nov. 30, 2017USD ($) | Dec. 31, 2018USD ($)quarter | Nov. 30, 2018USD ($) | |
Debt Instrument | |||
Debt instrument, term | 5 years | ||
Maximum borrowing capacity | $ 750,000,000 | $ 1,000,000,000 | |
Increase limit to borrowing capacity | $ 250,000,000 | ||
Borrowing capacity increase | $ 250,000,000 | ||
Commitment fee percentage (in bps) | 0.125% | ||
Covenant compliance, number of consecutive quarters | quarter | 4 | ||
Covenant compliance, minimum interest expense coverage ratio | 3.50 | ||
Maximum leverage ratio | 3 | ||
Minimum leverage ratio under a material acquisition or series of material acquisitions | 4 | ||
Outstanding borrowings under the unfunded Revolving Credit Facility | $ 0 | ||
Minimum | |||
Debt Instrument | |||
Commitment fee percentage (in bps) | 0.10% | ||
Minimum | Alternative base rate | |||
Debt Instrument | |||
Basis spread on variable rate (in bps) | 0.00% | ||
Minimum | LIBOR | |||
Debt Instrument | |||
Basis spread on variable rate (in bps) | 1.00% | ||
Maximum | |||
Debt Instrument | |||
Commitment fee percentage (in bps) | 0.25% | ||
Maximum | Alternative base rate | |||
Debt Instrument | |||
Basis spread on variable rate (in bps) | 0.75% | ||
Maximum | LIBOR | |||
Debt Instrument | |||
Basis spread on variable rate (in bps) | 1.75% |
Equity and Long-Term Incentiv_3
Equity and Long-Term Incentive Compensation Plans - Equity Incentive Program (Details) - shares shares in Thousands | 6 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Maximum number of shares available for grant (in shares) | [1] | 3,680 | 15,030 | |
Total Shares Available for Grant under the Company's equity incentive plans: | ||||
Balance as of June 30, 2018 (in shares) | [1] | 3,680 | ||
Plan shares increased (in shares) | 12,000 | |||
Balance as of December 31, 2018 (in shares) | [1] | 15,030 | ||
2004 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Shares available for issuance (in shares) | 13,400 | |||
Restricted stock units | ||||
Total Shares Available for Grant under the Company's equity incentive plans: | ||||
Restricted stock units granted (in shares) | [1],[2] | (675) | ||
Restricted stock units granted, adjustment (in shares) | [1],[3] | 5 | ||
Restricted stock units canceled (in shares) | [1] | 20 | ||
Restricted stock units | 2004 Plan | ||||
Total Shares Available for Grant under the Company's equity incentive plans: | ||||
Restricted stock units granted (in shares) | [4],[5] | (338) | ||
Restricted stock units granted, adjustment (in shares) | [5],[6] | 2 | ||
Restricted stock units canceled (in shares) | [5] | 10 | ||
Restricted stock unit, Performance-based and Service-based | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Maximum number of shares available for grant (in shares) | 400 | 400 | ||
Total Shares Available for Grant under the Company's equity incentive plans: | ||||
Balance as of December 31, 2018 (in shares) | 400 | |||
Restricted stock unit, Performance-based and Service-based | 2004 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Maximum number of shares available for grant (in shares) | 200 | 42 | 200 | |
Total Shares Available for Grant under the Company's equity incentive plans: | ||||
Balance as of June 30, 2018 (in shares) | 200 | 42 | ||
Balance as of December 31, 2018 (in shares) | 200 | |||
[1] | The number of RSUs reflects the application of the award multiplier (1.8x or 2.0x depending on the grant date of the applicable award) | |||
[2] | Includes RSUs granted to senior management during the six months ended December 31, 2018 with performance-based vesting criteria (in addition to service-based vesting criteria for any of such RSUs that are deemed to have been earned). As of December 31, 2018, it had not yet been determined the extent to which (if at all) the performance-based vesting criteria had been satisfied. Therefore, this line item includes all such performance-based RSUs granted during the six months ended December 31, 2018, 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 six months ended December 31, 2018 reflects the application of the multiplier described above). | |||
[3] | Represents the portion of RSUs granted with performance-based vesting criteria and reported at the actual number of shares issued upon achievement of the performance vesting criteria during the six months ended December 31, 2018 | |||
[4] | Includes RSUs granted to senior management with performance-based vesting criteria (in addition to service-based vesting criteria for any of such RSUs that are deemed to have been earned). As of December 31, 2018, it had not yet been determined the extent to which (if at all) the performance-based vesting criteria had been satisfied. Therefore, this line item includes all such performance-based RSUs, reported at the maximum possible number of shares (42 thousand shares for the fiscal year ended June 30, 2017, 0.2 million shares for the fiscal year ended June 30, 2018 and 0.2 million shares for the six months ended December 31, 2018) that may ultimately be issuable if all applicable performance-based criteria are achieved at their maximum and all applicable service-based criteria are fully satisfied | |||
[5] | Share numbers reflect actual shares subject to awarded RSUs. Under the terms of the 2004 Plan, the number of shares subject to each award reflected in this number is multiplied by either 1.8x or 2.0x (depending on the grant date of the award) to calculate the impact of the award on the share reserve under the 2004 Plan. | |||
[6] | Represents the portion of RSUs granted with performance-based vesting criteria and reported at the actual number of shares issued upon achievement of the performance vesting criteria during six months ended December 31, 2018. |
Equity and Long-Term Incentiv_4
Equity and Long-Term Incentive Compensation Plans - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2018 | |
Stock-based compensation expense | |||||
Stock-based compensation expense | $ 15,695 | $ 13,739 | $ 31,833 | $ 27,770 | |
Stock-based compensation capitalized as inventory | 4,859 | 4,859 | $ 4,580 | ||
Costs of revenues | |||||
Stock-based compensation expense | |||||
Stock-based compensation expense | 1,823 | 1,656 | 3,654 | 3,072 | |
Research and development | |||||
Stock-based compensation expense | |||||
Stock-based compensation expense | 2,483 | 2,275 | 5,002 | 4,446 | |
Selling, general and administrative | |||||
Stock-based compensation expense | |||||
Stock-based compensation expense | $ 11,389 | $ 9,808 | $ 23,177 | $ 20,252 |
Equity and Long-Term Incentiv_5
Equity and Long-Term Incentive Compensation Plans - Restricted Stock Unit Activities (Details) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017$ / shares | Dec. 31, 2018USD ($)Installment$ / sharesshares | Dec. 31, 2017$ / shares | Jun. 30, 2018shares | Jun. 30, 2017shares | ||
Restricted Stock Units Activity, Weighted Average Grant Date Fair Value Rollforward | |||||||
Maximum number of shares available for grant (in shares) | [1] | 15,030 | 15,030 | 3,680 | |||
Restricted stock units | |||||||
Restricted Stock Units Activity Rollforward | |||||||
Granted (in shares) | [1],[2] | 675 | |||||
Granted adjustments (in shares) | [1],[3] | (5) | |||||
Forfeited (in shares) | [1] | (20) | |||||
Restricted Stock Units Activity, Weighted Average Grant Date Fair Value Rollforward | |||||||
Restricted stock units granted, weighted-average grant date fair value (in dollars per share) | $ / shares | $ 96.51 | $ 105.15 | $ 117.21 | $ 91.39 | |||
Unrecognized stock-based compensation balance | $ | $ 116.4 | $ 116.4 | |||||
Estimated weighted-average amortization period | 1 year 6 months 12 days | ||||||
Intrinsic value, RSUs | $ | $ 151.5 | $ 151.5 | |||||
Restricted stock unit, Service-based | Minimum | |||||||
Restricted Stock Units Activity, Weighted Average Grant Date Fair Value Rollforward | |||||||
Service and performance-based, number of equal vesting installments | Installment | 3 | ||||||
Restricted stock unit, Service-based | Maximum | |||||||
Restricted Stock Units Activity, Weighted Average Grant Date Fair Value Rollforward | |||||||
Service and performance-based, number of equal vesting installments | Installment | 4 | ||||||
Restricted stock unit, Performance-based and Service-based | |||||||
Restricted Stock Units Activity, Weighted Average Grant Date Fair Value Rollforward | |||||||
Maximum number of shares available for grant (in shares) | 400 | 400 | |||||
Service and performance-based, number of equal vesting installments | Installment | 2 | ||||||
First anniversary | Restricted stock unit, Service-based | Minimum | |||||||
Restricted Stock Units Activity, Weighted Average Grant Date Fair Value Rollforward | |||||||
Service and performance-based, percentage of equal vesting installments (as a percent) | 33.33% | ||||||
First anniversary | Restricted stock unit, Service-based | Maximum | |||||||
Restricted Stock Units Activity, Weighted Average Grant Date Fair Value Rollforward | |||||||
Service and performance-based, percentage of equal vesting installments (as a percent) | 25.00% | ||||||
Second anniversary | Restricted stock unit, Service-based | Minimum | |||||||
Restricted Stock Units Activity, Weighted Average Grant Date Fair Value Rollforward | |||||||
Service and performance-based, percentage of equal vesting installments (as a percent) | 33.33% | ||||||
Second anniversary | Restricted stock unit, Service-based | Maximum | |||||||
Restricted Stock Units Activity, Weighted Average Grant Date Fair Value Rollforward | |||||||
Service and performance-based, percentage of equal vesting installments (as a percent) | 25.00% | ||||||
Third anniversary | Restricted stock unit, Service-based | Minimum | |||||||
Restricted Stock Units Activity, Weighted Average Grant Date Fair Value Rollforward | |||||||
Service and performance-based, percentage of equal vesting installments (as a percent) | 33.33% | ||||||
Third anniversary | Restricted stock unit, Service-based | Maximum | |||||||
Restricted Stock Units Activity, Weighted Average Grant Date Fair Value Rollforward | |||||||
Service and performance-based, percentage of equal vesting installments (as a percent) | 25.00% | ||||||
Third anniversary | Restricted stock unit, Performance-based and Service-based | |||||||
Restricted Stock Units Activity, Weighted Average Grant Date Fair Value Rollforward | |||||||
Service and performance-based, percentage of equal vesting installments (as a percent) | 50.00% | ||||||
Fourth anniversary | Restricted stock unit, Service-based | Maximum | |||||||
Restricted Stock Units Activity, Weighted Average Grant Date Fair Value Rollforward | |||||||
Service and performance-based, percentage of equal vesting installments (as a percent) | 25.00% | ||||||
Fourth anniversary | Restricted stock unit, Performance-based and Service-based | |||||||
Restricted Stock Units Activity, Weighted Average Grant Date Fair Value Rollforward | |||||||
Service and performance-based, percentage of equal vesting installments (as a percent) | 50.00% | ||||||
2004 Plan | Restricted stock units | |||||||
Restricted Stock Units Activity Rollforward | |||||||
Outstanding restricted stock units as of June 30, 2018 (in shares) | [4],[5] | 2,014 | |||||
Granted (in shares) | [4],[5] | 338 | |||||
Granted adjustments (in shares) | [5],[6] | (2) | |||||
Vested and released (in shares) | [5] | (383) | |||||
Withheld for taxes (in shares) | [5] | (264) | |||||
Forfeited (in shares) | [5] | (10) | |||||
Outstanding restricted stock units as of December 31, 2018 (in shares) | [4],[5] | 1,693 | 1,693 | ||||
Restricted Stock Units Activity, Weighted Average Grant Date Fair Value Rollforward | |||||||
Outstanding restricted stock units as of June 30, 2018, weighted-average grant date fair value (in dollars per share) | $ / shares | [4] | $ 76.50 | |||||
Restricted stock units granted, weighted-average grant date fair value (in dollars per share) | $ / shares | [4] | 117.21 | |||||
Restricted stock units granted adjustments, weighted-average grant date fair value (in dollars per share) | $ / shares | [6] | 50.88 | |||||
Restricted stock units vested and released, weighted-average grant date fair value (in dollars per share) | $ / shares | 66.41 | ||||||
Restricted stock units withheld for taxes, weighted-average grant date fair value (in dollars per share) | $ / shares | 66.41 | ||||||
Restricted stock units forfeited, weighted-average grant date fair value (in dollars per share) | $ / shares | 81.55 | ||||||
Outstanding restricted stock units as of December 31, 2018, weighted-average grant date fair value (in dollars per share) | $ / shares | [4] | $ 88.48 | $ 88.48 | ||||
2004 Plan | Restricted stock unit, Performance-based and Service-based | |||||||
Restricted Stock Units Activity, Weighted Average Grant Date Fair Value Rollforward | |||||||
Maximum number of shares available for grant (in shares) | 200 | 200 | 200 | 42 | |||
Awards Granted before November 6, 2013 | 2004 Plan | |||||||
Restricted Stock Units Activity, Weighted Average Grant Date Fair Value Rollforward | |||||||
Impact on share reserve multiplier | 1.8 | 1.8 | |||||
Awards Granted after November 6, 2013 | 2004 Plan | |||||||
Restricted Stock Units Activity, Weighted Average Grant Date Fair Value Rollforward | |||||||
Impact on share reserve multiplier | 2 | 2 | |||||
[1] | The number of RSUs reflects the application of the award multiplier (1.8x or 2.0x depending on the grant date of the applicable award) | ||||||
[2] | Includes RSUs granted to senior management during the six months ended December 31, 2018 with performance-based vesting criteria (in addition to service-based vesting criteria for any of such RSUs that are deemed to have been earned). As of December 31, 2018, it had not yet been determined the extent to which (if at all) the performance-based vesting criteria had been satisfied. Therefore, this line item includes all such performance-based RSUs granted during the six months ended December 31, 2018, 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 six months ended December 31, 2018 reflects the application of the multiplier described above). | ||||||
[3] | Represents the portion of RSUs granted with performance-based vesting criteria and reported at the actual number of shares issued upon achievement of the performance vesting criteria during the six months ended December 31, 2018 | ||||||
[4] | Includes RSUs granted to senior management with performance-based vesting criteria (in addition to service-based vesting criteria for any of such RSUs that are deemed to have been earned). As of December 31, 2018, it had not yet been determined the extent to which (if at all) the performance-based vesting criteria had been satisfied. Therefore, this line item includes all such performance-based RSUs, reported at the maximum possible number of shares (42 thousand shares for the fiscal year ended June 30, 2017, 0.2 million shares for the fiscal year ended June 30, 2018 and 0.2 million shares for the six months ended December 31, 2018) that may ultimately be issuable if all applicable performance-based criteria are achieved at their maximum and all applicable service-based criteria are fully satisfied | ||||||
[5] | Share numbers reflect actual shares subject to awarded RSUs. Under the terms of the 2004 Plan, the number of shares subject to each award reflected in this number is multiplied by either 1.8x or 2.0x (depending on the grant date of the award) to calculate the impact of the award on the share reserve under the 2004 Plan. | ||||||
[6] | Represents the portion of RSUs granted with performance-based vesting criteria and reported at the actual number of shares issued upon achievement of the performance vesting criteria during six months ended December 31, 2018. |
Equity and Long-Term Incentiv_6
Equity and Long-Term Incentive Compensation Plans - Restricted Stock Units (Details) - Restricted stock units - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Weighted-average grant date fair value per unit (in dollars per share) | $ 96.51 | $ 105.15 | $ 117.21 | $ 91.39 |
Grant date fair value of vested restricted stock units | $ 6,862 | $ 5,322 | $ 42,934 | $ 41,856 |
Tax benefits realized by us in connection with vested and released restricted stock units | $ 3,812 | $ (1,930) | $ 10,730 | $ 16,482 |
Equity and Long-Term Incentiv_7
Equity and Long-Term Incentive Compensation Plans - Cash-Based Long-Term Incentive Compensation (Details) - Cash long-term incentive plan - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Long-Term Incentive Plan | ||||
Cash-based long-term incentive plan, granted amount | $ 5.6 | $ 4 | ||
Cash long-term incentive plan, compensation expense | $ 12 | $ 11.5 | 27.2 | $ 26.3 |
Cash long-term incentive plan, unrecognized compensation balance | $ 104.9 | $ 104.9 |
Equity and Long-Term Incentiv_8
Equity and Long-Term Incentive Compensation Plans - Employee Stock Purchase Plan (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
ESPP maximum employee subscription rate | 15.00% | 15.00% | ||
ESPP, offering period | 6 months | |||
ESPP, discount from market price, lesser of commencement of offering period or purchase date | 85.00% | |||
Employee Stock Purchase Plan Additional Information | ||||
Total cash received from employees for the issuance of shares under the ESPP | $ 20,556 | $ 20,579 | $ 20,556 | $ 20,579 |
Number of shares purchased by employees through the ESPP (in shares) | 270 | 264 | 270 | 264 |
Tax benefits realized by us in connection with the disqualifying dispositions of shares purchased under the ESPP | $ 92 | $ 47 | $ 603 | $ 894 |
Weighted-average fair value per share based on Black-Scholes model (in dollars per share) | $ 22.73 | $ 19.04 | $ 22.73 | $ 19.04 |
ESPP maximum annual share replenishment (in shares) | 2,000 | 2,000 | ||
Number of ESPP shares available for future issuance (in shares) | 2,400 | 2,400 | ||
Employee Stock Purchase Plan | ||||
ESPP, Fair Value Assumptions and Methodology | ||||
Expected stock price volatility | 30.00% | 25.90% | 30.00% | 25.90% |
Risk-free interest rate | 1.90% | 0.90% | 1.90% | 0.90% |
Dividend yield | 2.90% | 2.60% | 2.90% | 2.60% |
Expected life (in years) | 6 months | 6 months | 6 months | 6 months |
Equity and Long-Term Incentiv_9
Equity and Long-Term Incentive Compensation Plans - Cash Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 04, 2018 | Nov. 07, 2018 | Nov. 19, 2014 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2014 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2018 |
Dividends Payable | |||||||||
Payment of dividends | $ 237,319 | $ 192,902 | |||||||
Dividends payable | $ 5,404 | $ 7,590 | 5,404 | 7,590 | |||||
Regular cash dividend | |||||||||
Dividends Payable | |||||||||
Cash dividends declared (in dollars per share) | $ 0.75 | ||||||||
Cash dividends paid per share (in dollars per share) | $ 0.75 | ||||||||
Regular cash dividend | Restricted stock unit, Performance-based and Service-based | |||||||||
Dividends Payable | |||||||||
Dividends payable | 5,400 | 5,400 | $ 6,700 | ||||||
Regular cash dividend | Additional paid-in capital | |||||||||
Dividends Payable | |||||||||
Payment of dividends | $ 114,500 | $ 92,600 | 234,400 | 186,700 | |||||
Special cash dividend | |||||||||
Dividends Payable | |||||||||
Cash dividends declared (in dollars per share) | $ 16.50 | ||||||||
Cash dividends paid per share (in dollars per share) | $ 16.50 | ||||||||
Special cash dividend | Restricted stock unit, Performance-based and Service-based | |||||||||
Dividends Payable | |||||||||
Dividends payable | $ 43,000 | ||||||||
Cash dividends paid | $ 2,900 | $ 6,200 |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity, Class of Treasury Stock | ||||
Total cost of repurchases | $ 242,401,000 | $ 40,868,000 | $ 550,187,000 | $ 81,643,000 |
Common Stock and Capital in Excess of Par Value, Shares | ||||
Equity, Class of Treasury Stock | ||||
Number of shares of common stock repurchased (in shares) | 2,556 | 388 | 5,337 | 822 |
New repurchase program | ||||
Equity, Class of Treasury Stock | ||||
Shares authorized to be repurchased, amount | $ 1,000,000,000 | $ 1,000,000,000 | ||
Remaining shares authorized to be repurchased, amount | 411,700,000 | 411,700,000 | ||
New repurchase program, authorized shares if Orbotech merger closes | ||||
Equity, Class of Treasury Stock | ||||
Shares authorized to be repurchased, amount | $ 2,000,000,000 | $ 2,000,000,000 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator: | ||||
Net income (loss) | $ 369,100 | $ (134,319) | $ 765,044 | $ 146,617 |
Denominator: | ||||
Weighted-average shares-basic, excluding unvested restricted stock units (in shares) | 152,148 | 156,587 | 153,684 | 156,707 |
Effect of dilutive restricted stock units and options (in shares) | 500 | 0 | 705 | 981 |
Weighted-average shares-diluted (in shares) | 152,648 | 156,587 | 154,389 | 157,688 |
Basic net income (loss) per share (in dollars per share) | $ 2.43 | $ (0.86) | $ 4.98 | $ 0.94 |
Diluted net income (loss) per share (in dollars per share) | $ 2.42 | $ (0.86) | $ 4.96 | $ 0.93 |
Anti-dilutive securities excluded from the computation of diluted net income (loss) per share (in shares) | 341 | 909 | 280 | 11 |
Income Taxes - Details of Inco
Income Taxes - Details of Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Income before income taxes | $ 415,963 | $ 347,307 | $ 843,531 | $ 683,459 |
Provision for income taxes | $ 46,863 | $ 481,626 | $ 78,487 | $ 536,842 |
Effective tax rate | 11.30% | 138.70% | 9.30% | 78.50% |
Income Taxes - Additional Info
Income Taxes - Additional Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Dec. 31, 2018USD ($) | Dec. 31, 2018USD ($) | |
Income Tax Disclosure [Abstract] | ||
Provisional tax benefit included as a component of provision for income taxes from continuing operations | $ 0.3 | $ 20.1 |
Amount of unrecorded benefit | $ 10 | $ 10 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2018USD ($)Installment | Dec. 31, 2017USD ($) | |
Receivables Sold Under Factoring Agreements | ||||
Receivables sold under factoring agreements | $ 39,814 | $ 47,232 | $ 101,354 | $ 79,133 |
Proceeds from sales of LCs | 8,339 | 0 | 19,231 | 5,571 |
Operating leases, rent expense | 2,400 | $ 2,500 | 4,700 | $ 5,000 |
Operating Leases, Future Minimum Payments Due | ||||
2019 (remaining 6 months) | 7,145 | 7,145 | ||
2,020 | 8,361 | 8,361 | ||
2,021 | 6,016 | 6,016 | ||
2,022 | 3,166 | 3,166 | ||
2,023 | 2,317 | 2,317 | ||
2024 and thereafter | 3,078 | 3,078 | ||
Total minimum lease payments | 30,083 | 30,083 | ||
Commitments and Contingencies | ||||
Purchase commitments | 489,800 | $ 489,800 | ||
Majority outstanding purchase commitment, period due (in months) | 12 months | |||
Cash-based long-term incentive plan, committed amount | $ 129,800 | $ 129,800 | ||
Guarantee arrangements to fund customs guarantees for VAT and other operating requirements | 22,500 | |||
Outstanding guarantee arrangements to fund customs guarantees for VAT and other operating requirements | $ 18,200 | |||
Minimum | Cash long-term incentive plan | ||||
Commitments and Contingencies | ||||
Cash long-term incentive plan, equal vesting installments | Installment | 3 | |||
Cash long-term incentive plan, percentage of equal vesting installments | 33.33% | |||
Cash long-term incentive plan, vesting period | 3 years | |||
Maximum | Cash long-term incentive plan | ||||
Commitments and Contingencies | ||||
Cash long-term incentive plan, equal vesting installments | Installment | 4 | |||
Cash long-term incentive plan, percentage of equal vesting installments | 25.00% | |||
Cash long-term incentive plan, vesting period | 4 years |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2014 | Oct. 31, 2014 | |
Derivative | |||||
Unamortized portion of the fair value of the forward contracts | $ 4,400,000 | $ 4,400,000 | |||
Realized net loss | $ 18,982,000 | 5,188,000 | |||
2018 Rate lock agreements | Senior notes | |||||
Derivative | |||||
Realized net loss | $ 3,800,000 | ||||
Derivatives designated as hedging instruments | Cash flow hedge contracts - foreign currency | Portion of senior notes | Treasury lock | Senior notes | |||||
Derivative | |||||
Unrealized gains (losses) on cash flow hedges | $ 7,500,000 | ||||
Derivative, notional amount | $ 1,000,000,000 | ||||
Derivatives designated as hedging instruments | Cash flow hedge contracts - foreign currency | 2018 Rate lock agreements | Treasury lock | Senior notes | |||||
Derivative | |||||
Derivative, notional amount | $ 500,000,000 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Gains (Losses) on Derivatives in Cash Flow Hedging Relationships Recognized in OCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative | ||||
Amounts included in the assessment of effectiveness | $ (18,982) | $ (5,188) | ||
Amounts included in the assessment of effectiveness | $ 697 | $ 1,141 | ||
Rate lock contracts | ||||
Derivative | ||||
Amounts included in the assessment of effectiveness | (17,752) | (5,396) | ||
Amounts included in the assessment of effectiveness | 0 | 0 | ||
Foreign exchange contracts | ||||
Derivative | ||||
Amounts included in the assessment of effectiveness | (1,201) | 237 | ||
Amounts included in the assessment of effectiveness | 697 | 1,141 | ||
Amounts excluded from the assessment of effectiveness | $ (29) | $ (29) | ||
Amounts excluded from the assessment of effectiveness | $ 0 | $ 0 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Locations and Amounts of Designated and Non-Designated Derivative's Gains and Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative Instruments | ||||
Revenues | $ 1,119,898 | $ 975,822 | $ 2,213,158 | $ 1,945,403 |
Costs of revenues | 408,260 | 347,002 | 789,647 | 700,119 |
Interest expense | 26,538 | 27,372 | 52,900 | 57,948 |
Other expense (income), net | (9,228) | (7,824) | (19,253) | (12,207) |
Amount of gains (losses) reclassified from accumulated OCI to earnings | 1,736 | 2,773 | ||
Amount of gains (losses) reclassified from accumulated OCI to earnings | 963 | 3,081 | ||
Revenues | ||||
Derivative Instruments | ||||
Amount of gains (losses) reclassified from accumulated OCI to earnings as a result that a forecasted transaction is no longer probable of occurring | 0 | 0 | ||
Costs of revenues | ||||
Derivative Instruments | ||||
Amount of gains (losses) reclassified from accumulated OCI to earnings as a result that a forecasted transaction is no longer probable of occurring | 0 | 0 | ||
Interest expense | ||||
Derivative Instruments | ||||
Amount of gains (losses) reclassified from accumulated OCI to earnings as a result that a forecasted transaction is no longer probable of occurring | 0 | 0 | ||
Other expense (income), net | ||||
Derivative Instruments | ||||
Amount of gains (losses) reclassified from accumulated OCI to earnings as a result that a forecasted transaction is no longer probable of occurring | 0 | 0 | ||
Rate lock contracts | Revenues | ||||
Derivative Instruments | ||||
Amount of gains (losses) reclassified from accumulated OCI to earnings | 0 | 0 | ||
Amount of gains (losses) reclassified from accumulated OCI to earnings as a result that a forecasted transaction is no longer probable of occurring | 0 | 0 | ||
Rate lock contracts | Costs of revenues | ||||
Derivative Instruments | ||||
Amount of gains (losses) reclassified from accumulated OCI to earnings | 0 | 0 | ||
Amount of gains (losses) reclassified from accumulated OCI to earnings as a result that a forecasted transaction is no longer probable of occurring | 0 | 0 | ||
Rate lock contracts | Interest expense | ||||
Derivative Instruments | ||||
Amount of gains (losses) reclassified from accumulated OCI to earnings | 189 | 377 | ||
Amount of gains (losses) reclassified from accumulated OCI to earnings as a result that a forecasted transaction is no longer probable of occurring | 0 | 0 | ||
Rate lock contracts | Other expense (income), net | ||||
Derivative Instruments | ||||
Amount of gains (losses) reclassified from accumulated OCI to earnings | 0 | 0 | ||
Amount of gains (losses) reclassified from accumulated OCI to earnings as a result that a forecasted transaction is no longer probable of occurring | (108) | 4 | ||
Foreign exchange contracts | Revenues | ||||
Derivative Instruments | ||||
Amount of gains (losses) reclassified from accumulated OCI to earnings | 1,705 | 2,688 | ||
Amount of gains (losses) reclassified from accumulated OCI to earnings | 397 | 1,365 | ||
Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach | 80 | 80 | ||
Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach | 0 | 0 | ||
Amount excluded from the assessment of effectiveness | 0 | 0 | 0 | 0 |
Amount of gains (losses) recognized in earnings | 0 | 0 | ||
Foreign exchange contracts | Costs of revenues | ||||
Derivative Instruments | ||||
Amount of gains (losses) reclassified from accumulated OCI to earnings | (158) | (292) | ||
Amount of gains (losses) reclassified from accumulated OCI to earnings | 377 | 1,338 | ||
Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach | (8) | (8) | ||
Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach | 0 | 0 | ||
Amount excluded from the assessment of effectiveness | 0 | 0 | 0 | 0 |
Amount of gains (losses) recognized in earnings | 0 | 0 | ||
Foreign exchange contracts | Interest expense | ||||
Derivative Instruments | ||||
Amount of gains (losses) reclassified from accumulated OCI to earnings | 0 | 0 | ||
Amount of gains (losses) reclassified from accumulated OCI to earnings | 189 | 378 | ||
Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach | 0 | 0 | ||
Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach | 0 | 0 | ||
Amount excluded from the assessment of effectiveness | 0 | 0 | 0 | 0 |
Amount of gains (losses) recognized in earnings | 0 | 0 | ||
Foreign exchange contracts | Other expense (income), net | ||||
Derivative Instruments | ||||
Amount of gains (losses) reclassified from accumulated OCI to earnings | (3) | (18) | ||
Amount of gains (losses) reclassified from accumulated OCI to earnings | 0 | 0 | ||
Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach | 0 | 0 | ||
Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach | 0 | 0 | ||
Amount excluded from the assessment of effectiveness | (220) | (158) | (88) | (229) |
Amount of gains (losses) recognized in earnings | $ (3,700) | $ 63 | ||
Derivatives designated as hedging instruments | Rate lock contracts | Revenues | ||||
Derivative Instruments | ||||
Amount of gains (losses) reclassified from accumulated OCI to earnings | 0 | 0 | ||
Derivatives designated as hedging instruments | Rate lock contracts | Costs of revenues | ||||
Derivative Instruments | ||||
Amount of gains (losses) reclassified from accumulated OCI to earnings | 0 | 0 | ||
Derivatives designated as hedging instruments | Rate lock contracts | Interest expense | ||||
Derivative Instruments | ||||
Amount of gains (losses) reclassified from accumulated OCI to earnings | 0 | 0 | ||
Derivatives designated as hedging instruments | Rate lock contracts | Other expense (income), net | ||||
Derivative Instruments | ||||
Amount of gains (losses) reclassified from accumulated OCI to earnings | 0 | 0 | ||
Derivatives not designated as hedging instruments | Foreign exchange contracts | Revenues | ||||
Derivative Instruments | ||||
Amount of gains (losses) recognized in earnings | 0 | 0 | ||
Derivatives not designated as hedging instruments | Foreign exchange contracts | Costs of revenues | ||||
Derivative Instruments | ||||
Amount of gains (losses) recognized in earnings | 0 | 0 | ||
Derivatives not designated as hedging instruments | Foreign exchange contracts | Interest expense | ||||
Derivative Instruments | ||||
Amount of gains (losses) recognized in earnings | 0 | 0 | ||
Derivatives not designated as hedging instruments | Foreign exchange contracts | Other expense (income), net | ||||
Derivative Instruments | ||||
Amount of gains (losses) recognized in earnings | $ 3,237 | $ 3,676 |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities - Schedule of Notional Amount (Details) - Derivatives designated as hedging instruments - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Jun. 30, 2018 | |
Purchase | Other foreign currency hedge contracts | ||
Derivative | ||
Derivative, notional amount | $ 163,758 | $ 130,442 |
Purchase | Cash flow hedge contracts - foreign currency | ||
Derivative | ||
Derivative, notional amount | 777 | 8,116 |
Sell | Other foreign currency hedge contracts | ||
Derivative | ||
Derivative, notional amount | 173,793 | 154,442 |
Sell | Cash flow hedge contracts - foreign currency | ||
Derivative | ||
Derivative, notional amount | $ 84,302 | $ 115,032 |
Maximum | ||
Derivative | ||
Remaining maturity | 10 months | 10 months |
Derivative Instruments and He_7
Derivative Instruments and Hedging Activities - Schedule of Derivative Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jun. 30, 2018 |
Derivative Assets and Liabilities, at Fair Value, Net, by Balance Sheet Classification | ||
Asset derivatives fair value | $ 1,732 | $ 5,385 |
Liability derivatives fair value | 14,318 | 6,828 |
Other current assets | ||
Derivative Assets and Liabilities, at Fair Value, Net, by Balance Sheet Classification | ||
Asset derivatives fair value | 1,732 | 5,385 |
Other current liabilities | ||
Derivative Assets and Liabilities, at Fair Value, Net, by Balance Sheet Classification | ||
Liability derivatives fair value | 14,318 | 6,828 |
Derivatives designated as hedging instruments | Other current assets | ||
Derivative Assets and Liabilities, at Fair Value, Net, by Balance Sheet Classification | ||
Asset derivatives fair value | 102 | 3,478 |
Derivatives designated as hedging instruments | Other current liabilities | ||
Derivative Assets and Liabilities, at Fair Value, Net, by Balance Sheet Classification | ||
Liability derivatives fair value | 11,604 | 5,470 |
Derivatives not designated as hedging instruments | Other current assets | ||
Derivative Assets and Liabilities, at Fair Value, Net, by Balance Sheet Classification | ||
Asset derivatives fair value | 1,630 | 1,907 |
Derivatives not designated as hedging instruments | Other current liabilities | ||
Derivative Assets and Liabilities, at Fair Value, Net, by Balance Sheet Classification | ||
Liability derivatives fair value | 2,714 | 1,358 |
Rate lock contracts | Derivatives designated as hedging instruments | Other current assets | ||
Derivative Assets and Liabilities, at Fair Value, Net, by Balance Sheet Classification | ||
Foreign exchange contracts, other current assets | 0 | 219 |
Rate lock contracts | Derivatives designated as hedging instruments | Other current liabilities | ||
Derivative Assets and Liabilities, at Fair Value, Net, by Balance Sheet Classification | ||
Foreign exchange contracts, other current liabilities | 10,955 | 5,158 |
Foreign exchange contracts | Derivatives designated as hedging instruments | Other current assets | ||
Derivative Assets and Liabilities, at Fair Value, Net, by Balance Sheet Classification | ||
Foreign exchange contracts, other current assets | 102 | 3,259 |
Foreign exchange contracts | Derivatives designated as hedging instruments | Other current liabilities | ||
Derivative Assets and Liabilities, at Fair Value, Net, by Balance Sheet Classification | ||
Foreign exchange contracts, other current liabilities | 649 | 312 |
Foreign exchange contracts | Derivatives not designated as hedging instruments | Other current assets | ||
Derivative Assets and Liabilities, at Fair Value, Net, by Balance Sheet Classification | ||
Foreign exchange contracts, other current assets | 1,630 | 1,907 |
Foreign exchange contracts | Derivatives not designated as hedging instruments | Other current liabilities | ||
Derivative Assets and Liabilities, at Fair Value, Net, by Balance Sheet Classification | ||
Foreign exchange contracts, other current liabilities | $ 2,714 | $ 1,358 |
Derivative Instruments and He_8
Derivative Instruments and Hedging Activities - Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Beginning balance | $ 15,103 | $ 2,346 | ||
Beginning balance | $ 6,452 | $ 8,126 | ||
Amount reclassified to earnings | (1,736) | (2,773) | ||
Amount reclassified to earnings | (963) | (3,081) | ||
Net change in unrealized gains or losses | (18,982) | (5,188) | ||
Net change in unrealized gains or losses | 697 | 1,141 | ||
Ending balance | $ (5,615) | $ (5,615) | ||
Ending balance | $ 6,186 | $ 6,186 |
Derivative Instruments and He_9
Derivative Instruments and Hedging Activities - Offsetting of Derivative Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jun. 30, 2018 |
Derivatives - Assets | ||
Derivative - Assets, Gross Amounts of Derivatives | $ 1,732 | $ 5,385 |
Derivatives - Assets, Gross Amounts of Derivatives Offset in the Condensed Consolidated Balance Sheets | 0 | 0 |
Derivatives - Assets, Net Amount of Derivatives Presented in the Condensed Consolidated Balance Sheets | 1,732 | 5,385 |
Derivatives - Assets, Financial Instruments | (995) | (1,888) |
Derivatives - Assets, Cash Collateral Received | 0 | 0 |
Derivatives - Assets, Net Amount | 737 | 3,497 |
Derivatives - Liabilities | ||
Derivatives - Liabilities, Gross Amounts of Derivatives | (14,318) | (6,828) |
Derivatives - Liabilities, Gross Amounts of Derivatives Offset in the Condensed Consolidated Balance Sheets | 0 | 0 |
Derivatives - Liabilities, Net Amount of Derivatives Presented in the Condensed Consolidated Balance Sheets | (14,318) | (6,828) |
Derivatives - Liabilities, Financial Instruments | 995 | 1,888 |
Derivatives - Liabilities, Cash Collateral Received | 0 | 0 |
Derivatives - Liabilities, Net Amount | $ (13,323) | $ (4,940) |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Related Party Transactions [Abstract] | |||||
Total revenues | $ 11 | $ 455 | $ 13 | $ 457 | |
Total purchases | [1] | $ 1,603 | $ 542 | $ 2,206 | $ 1,246 |
[1] | During the three months ended June 30, 2018, we acquired a product line from Keysight Technologies, Inc. (“Keysight”) and entered into a transition services agreement pursuant to which Keysight provides certain manufacturing services to us. For additional details refer to Note 6, “Business Combinations”. We recorded the manufacturing services fees under the transition services agreement with Keysight within cost of revenues, which was immaterial for the three and six months ended December 31, 2018. |
Segment Reporting and Geograp_3
Segment Reporting and Geographic Information - Additional Information (Details) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2018customer | Dec. 31, 2017customer | Dec. 31, 2018customersegment | Dec. 31, 2017customer | Jun. 30, 2018customer | |
Segment Reporting Information | |||||
Number of reportable segments | segment | 1 | ||||
Number of customers with significant revenue | 2 | 1 | 1 | 1 | |
Segment percent of total revenues | 100.00% | 100.00% | 100.00% | 100.00% | |
Number of customers with significant accounts receivable balance | 3 | 3 | 3 | ||
Customer One | |||||
Segment Reporting Information | |||||
Segment percent of total revenues | 14.00% | 17.00% | 14.00% | 22.00% | |
Customer Two | |||||
Segment Reporting Information | |||||
Segment percent of total revenues | 13.00% |
Segment Reporting and Geograp_4
Segment Reporting and Geographic Information - Schedule of Revenue from External Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information | ||||
Revenues | $ 1,119,898 | $ 975,822 | $ 2,213,158 | $ 1,945,403 |
Segment percent of total revenues | 100.00% | 100.00% | 100.00% | 100.00% |
China | ||||
Segment Reporting Information | ||||
Revenues | $ 269,878 | $ 66,460 | $ 610,012 | $ 234,799 |
Segment percent of total revenues | 24.00% | 7.00% | 28.00% | 12.00% |
Taiwan | ||||
Segment Reporting Information | ||||
Revenues | $ 266,534 | $ 216,791 | $ 520,971 | $ 355,350 |
Segment percent of total revenues | 24.00% | 22.00% | 24.00% | 18.00% |
Japan | ||||
Segment Reporting Information | ||||
Revenues | $ 180,283 | $ 154,762 | $ 315,861 | $ 301,197 |
Segment percent of total revenues | 16.00% | 16.00% | 14.00% | 15.00% |
North America | ||||
Segment Reporting Information | ||||
Revenues | $ 150,113 | $ 149,042 | $ 252,242 | $ 278,292 |
Segment percent of total revenues | 13.00% | 15.00% | 11.00% | 14.00% |
Korea | ||||
Segment Reporting Information | ||||
Revenues | $ 126,968 | $ 270,184 | $ 280,469 | $ 544,862 |
Segment percent of total revenues | 11.00% | 28.00% | 13.00% | 28.00% |
Europe and Israel | ||||
Segment Reporting Information | ||||
Revenues | $ 80,618 | $ 82,158 | $ 152,287 | $ 165,663 |
Segment percent of total revenues | 7.00% | 8.00% | 7.00% | 9.00% |
Rest of Asia | ||||
Segment Reporting Information | ||||
Revenues | $ 45,504 | $ 36,425 | $ 81,316 | $ 65,240 |
Segment percent of total revenues | 5.00% | 4.00% | 3.00% | 4.00% |
Segment Reporting and Geograp_5
Segment Reporting and Geographic Information - Revenue from External Customers by Products and Services (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Revenue from External Customer | |||||
Revenues | $ 1,119,898 | $ 975,822 | $ 2,213,158 | $ 1,945,403 | |
Segment percent of total revenues | 100.00% | 100.00% | 100.00% | 100.00% | |
Wafer Inspection | |||||
Revenue from External Customer | |||||
Revenues | $ 505,878 | $ 400,584 | $ 978,191 | $ 790,004 | |
Segment percent of total revenues | 45.00% | 41.00% | 44.00% | 41.00% | |
Patterning | |||||
Revenue from External Customer | |||||
Revenues | $ 288,997 | $ 274,868 | $ 598,206 | $ 569,218 | |
Segment percent of total revenues | 26.00% | 28.00% | 27.00% | 29.00% | |
Global Service and Support | |||||
Revenue from External Customer | |||||
Revenues | $ 295,216 | [1] | $ 273,805 | $ 568,193 | $ 534,303 |
Segment percent of total revenues | 26.00% | [1] | 28.00% | 26.00% | 27.00% |
Other | |||||
Revenue from External Customer | |||||
Revenues | $ 29,807 | $ 26,565 | $ 68,568 | $ 51,878 | |
Segment percent of total revenues | 3.00% | 3.00% | 3.00% | 3.00% | |
[1] | The Global Service and Support revenues includes service revenues as presented in the Condensed Consolidated Statements of Operations as well as certain product revenues, primarily revenues from our K-T Pro business. |
Segment Reporting and Geograp_6
Segment Reporting and Geographic Information - Long-lived Assets by Geographic Region (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jun. 30, 2018 |
Revenues from External Customers and Long-Lived Assets | ||
Long-lived assets | $ 306,351 | $ 286,306 |
United States | ||
Revenues from External Customers and Long-Lived Assets | ||
Long-lived assets | 205,253 | 187,352 |
Singapore | ||
Revenues from External Customers and Long-Lived Assets | ||
Long-lived assets | 49,302 | 47,009 |
Israel | ||
Revenues from External Customers and Long-Lived Assets | ||
Long-lived assets | 27,517 | 26,980 |
Europe | ||
Revenues from External Customers and Long-Lived Assets | ||
Long-lived assets | 12,816 | 12,924 |
Rest of Asia | ||
Revenues from External Customers and Long-Lived Assets | ||
Long-lived assets | $ 11,463 | $ 12,041 |