Document and Company Informatio
Document and Company Information (USD $) | |||
12 Months Ended
Dec. 31, 2009 | Jan. 29, 2010
| Jun. 26, 2009
| |
Document and Company Information [Abstract] | |||
Entity Registrant Name | ALTERA CORP | ||
Entity Central Index Key | 0000768251 | ||
Document Type | 10-K | ||
Document Period End Date | 2009-12-31 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $4,067,455,979 | ||
Entity Common Stock, Shares Outstanding (actual number) | 297,388,263 |
Consolidated Balance Sheets
Consolidated Balance Sheets (USD $) | ||
In Thousands | Dec. 31, 2009
| Dec. 31, 2008
|
Current assets: | ||
Cash and cash equivalents | $1,546,672 | $1,216,743 |
Accounts receivable, net | 218,144 | 83,430 |
Inventories | 69,705 | 84,637 |
Deferred income taxes - current | 79,164 | 85,777 |
Deferred compensation plan - marketable securities | 50,905 | 38,593 |
Deferred compensation plan - restricted cash equivalents | 18,986 | 17,397 |
Other current assets | 58,194 | 100,584 |
Total current assets | 2,041,770 | 1,627,161 |
Property and equipment, net | 174,516 | 192,262 |
Deferred income taxes - non-current | 59,249 | 50,611 |
Other assets, net | 17,696 | 9,873 |
Total assets | 2,293,231 | 1,879,907 |
Current liabilities: | ||
Accounts payable | 50,520 | 33,834 |
Accrued liabilities | 32,256 | 29,951 |
Accrued compensation and related liabilities | 49,862 | 58,450 |
Deferred compensation plan obligations | 69,891 | 55,990 |
Deferred income and allowances on sales to distributors | 281,885 | 205,674 |
Income taxes payable | 5,547 | 2,123 |
Total current liabilities | 489,961 | 386,022 |
Income taxes payable - non-current | 210,967 | 173,880 |
Long-term credit facility | 500,000 | 500,000 |
Other non-current liabilities | 6,967 | 20,128 |
Total liabilities | 1,207,895 | 1,080,030 |
Stockholders' equity: | ||
Common stock: $.001 par value; 1,000,000 shares authorized; outstanding - 296,817 at December 31, 2009 and 292,733 shares at December 31, 2008 | 297 | 293 |
Capital in excess of par value | 372,098 | 272,424 |
Retained earnings | 712,941 | 528,278 |
Accumulated other comprehensive loss | 0 | (1,118) |
Total stockholders' equity | 1,085,336 | 799,877 |
Total liabilities and stockholders' equity | $2,293,231 | $1,879,907 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | ||
Share data in Thousands | Dec. 31, 2009
| Dec. 31, 2008
|
Stockholders' equity: | ||
Common stock, par value | 0.001 | 0.001 |
Common stock, shares authorized | 1,000,000 | 1,000,000 |
Common stock, shares outstanding | 296,817 | 292,733 |
Consolidated Statements of Inco
Consolidated Statements of Income (USD $) | |||
In Thousands, except Per Share data | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 28, 2007 |
Statements of Income [Abstract] | |||
Net sales | $1,195,413 | $1,367,224 | $1,263,548 |
Cost of sales | 396,584 | 449,750 | 447,969 |
Gross margin | 798,829 | 917,474 | 815,579 |
Research and development expense | 260,208 | 257,717 | 261,786 |
Selling, general, and administrative expense | 234,074 | 255,391 | 272,141 |
Compensation expense (benefit) - deferred compensation plan | 11,776 | (18,106) | 6,699 |
(Gain) loss on deferred compensation plan securities | (11,776) | 18,106 | (6,699) |
Interest income and other | (6,083) | (30,300) | (57,681) |
Interest expense | 5,092 | 15,492 | 1,705 |
Income before income taxes | 305,538 | 419,174 | 337,628 |
Income tax expense | 54,476 | 59,523 | 47,605 |
Net income | $251,062 | $359,651 | $290,023 |
Net income per share: | |||
Basic | 0.85 | 1.2 | 0.84 |
Diluted | 0.84 | 1.18 | 0.82 |
Shares used in computing per share amounts: | |||
Basic | 294,493 | 300,951 | 345,382 |
Diluted | 297,180 | 304,604 | 351,906 |
Cash dividends per common share | 0.2 | 0.19 | 0.12 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (USD $) | |||
In Thousands | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 28, 2007 |
Cash Flows from Operating Activities: | |||
Net income | $251,062 | $359,651 | $290,023 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 29,022 | 29,969 | 31,082 |
Stock-based compensation | 64,446 | 48,630 | 50,203 |
Deferred income tax (benefit) expense | (5,890) | 737 | (14,367) |
Tax effect of employee stock plans | (3,648) | 1,311 | 12,871 |
Excess tax benefit from employee stock plans | (990) | (6,767) | (13,177) |
Gain on sale of land | 0 | (112) | 0 |
Gain on substantive termination of retiree medical plan | (6,488) | 0 | 0 |
Changes in assets and liabilities: | |||
Accounts receivable, net | (136,115) | 115,459 | (105,626) |
Inventories | 14,931 | (10,527) | 4,367 |
Other assets | 38,862 | (26,173) | (14,505) |
Accounts payable and other liabilities | 7,918 | 2,810 | 6,250 |
Deferred income and allowances on sales to distributors | 77,611 | (74,766) | (17,638) |
Income taxes payable | 39,860 | 9,717 | 43,419 |
Deferred compensation plan obligations | 2,125 | (673) | (1,309) |
Net cash provided by operating activities | 372,706 | 449,266 | 271,593 |
Cash Flows from Investing Activities: | |||
Purchases of property and equipment | (11,060) | (40,273) | (31,171) |
Purchases of available-for-sale investments | 0 | 0 | (113,540) |
Proceeds from the maturities and sales of available-for-sale investments | 0 | 131,060 | 864,853 |
Proceeds from sale of land | 0 | 9,063 | 0 |
(Purchases) sales of deferred compensation plan securities, net | (2,125) | 673 | 1,309 |
Purchases of intangible assets | (690) | 0 | (240) |
Net cash (used in) provided by investing activities | (13,875) | 100,523 | 721,211 |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of common stock through various stock plans | 42,144 | 67,138 | 170,320 |
Shares withheld for employee taxes | (10,738) | (8,229) | (4,696) |
Repurchases of common stock | 0 | (473,229) | (1,226,343) |
Payment of dividends to stockholders | (58,925) | (57,051) | (41,277) |
Excess tax benefit from stock-based compensation | 990 | 6,767 | 13,177 |
(Decrease) increase in book overdrafts | 0 | (320) | 319 |
Proceeds from long-term credit facility | 0 | 250,000 | 250,000 |
Principal payments on capital lease obligations | (2,373) | (8,217) | (2,621) |
Net cash used in financing activities | (28,902) | (223,141) | (841,121) |
Net increase in cash and cash equivalents | 329,929 | 326,648 | 151,683 |
Cash and cash equivalents at beginning of period | 1,216,743 | 890,095 | 738,412 |
Cash and cash equivalents at end of period | 1,546,672 | 1,216,743 | 890,095 |
Cash paid during the period for: | |||
Income taxes paid, net | 7,310 | 66,503 | 8,240 |
Interest paid | 4,503 | 15,666 | 1,433 |
Noncash Investing and Financing Activities: | |||
Assets acquired under capital leases | $0 | $11,871 | $0 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders Equity (USD $) | |||||
In Thousands | Common Stock and Capital In Excess of Par Value
| Retained Earnings
| Accumulated Other Comprehensive Income (Loss)
| Total
| |
Beginning Balance, Shares at Dec. 29, 2006 | 360,201 | ||||
Beginning Balance at Dec. 29, 2006 | $507,223 | $1,102,151 | ($1,213) | $1,608,161 | |
Components of comprehensive income: | |||||
Net income | 290,023 | 290,023 | |||
Change in unrealized gains (losses) on investments, net of tax expense of $263 for 2007 and net of tax benefit of $84 for 2008 | 439 | 439 | |||
Amortization of accumulated unamortized loss on retiree medical plan | 34 | 34 | |||
Net gain (loss) on retiree medical plan arising during the year, net of tax benefit of $380 for 2007 and net of tax expense of $235 for 2008 | (584) | (584) | |||
Issuance of common stock through employee stock plans, net | 170,320 | 170,320 | |||
Issuance of common stock through employee stock plans, net, shares | 12,003 | ||||
Restricted stock withholding | (1,568) | (3,128) | (4,696) | ||
Restricted stock withholding, shares | (219) | ||||
Repurchases of common stock | (422,405) | (803,938) | (1,226,343) | ||
Repurchases of common stock, shares | (57,966) | ||||
Stock-based compensation expense | 50,203 | 50,203 | |||
Tax effect of employee stock plan | 12,871 | 12,871 | |||
Dividends paid | (41,277) | (41,277) | |||
Adjustment to adopt FIN 48 | 2,299 | 2,299 | |||
Ending Balance at Dec. 28, 2007 | 316,644 | 546,130 | (1,324) | 861,450 | |
Ending Balance, Shares at Dec. 28, 2007 | 314,019 | ||||
Components of comprehensive income: | |||||
Net income | 359,651 | 359,651 | |||
Change in unrealized gains (losses) on investments, net of tax expense of $263 for 2007 and net of tax benefit of $84 for 2008 | (139) | (139) | |||
Amortization of accumulated unamortized loss on retiree medical plan | 16 | 16 | |||
Net gain (loss) on retiree medical plan arising during the year, net of tax benefit of $380 for 2007 and net of tax expense of $235 for 2008 | 329 | 329 | |||
Issuance of common stock through employee stock plans, net | 67,138 | 67,138 | |||
Issuance of common stock through employee stock plans, net, shares | 5,739 | ||||
Restricted stock withholding | (2,707) | (5,522) | (8,229) | ||
Restricted stock withholding, shares | (407) | ||||
Repurchases of common stock | (158,299) | (314,930) | (473,229) | ||
Repurchases of common stock, shares | (26,618) | ||||
Stock-based compensation expense | 48,630 | 48,630 | |||
Tax effect of employee stock plan | 1,311 | 1,311 | |||
Dividends paid | (57,051) | (57,051) | |||
Ending Balance at Dec. 31, 2008 | 272,717 | 528,278 | (1,118) | 799,877 | |
Ending Balance, Shares at Dec. 31, 2008 | 292,733 | 292,733 | |||
Components of comprehensive income: | |||||
Net income | 251,062 | 251,062 | |||
Amortization of accumulated unamortized loss on retiree medical plan | 1,118 | 1,118 | |||
Issuance of common stock through employee stock plans, net | 42,144 | 42,144 | |||
Issuance of common stock through employee stock plans, net, shares | 4,710 | ||||
Restricted stock withholding | (3,264) | (7,474) | (10,738) | ||
Restricted stock withholding, shares | (626) | ||||
Stock-based compensation expense | 64,446 | 64,446 | |||
Tax effect of employee stock plan | (3,648) | (3,648) | |||
Dividends paid | (58,925) | (58,925) | |||
Ending Balance at Dec. 31, 2009 | $372,395 | $712,941 | $0 | $1,085,336 | |
Ending Balance, Shares at Dec. 31, 2009 | 296,817 | 296,817 |
1_Consolidated Statements of St
Consolidated Statements of Stockholders Equity (Parenthetical) (USD $) | ||
In Thousands | Accumulated Other Comprehensive Income (Loss)
| Total
|
Components of comprehensive income: | ||
Tax effect on changes in unrealized gains (losses) on investment | $263 | $263 |
Tax effect on Net gain/(loss) on retiree medical plan arising during the year | 380 | 380 |
Components of comprehensive income: | ||
Tax effect on changes in unrealized gains (losses) on investment | 84 | 84 |
Tax effect on Net gain/(loss) on retiree medical plan arising during the year | $235 | $235 |
The Company
The Company | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
The Company [Abstract] | |
The Company | Note1:The Company Altera Corporation was founded in 1983 and reincorporated in the State of Delaware in 1997. We design, manufacture, and market high-performance, high-density programmable logic devices, or PLDs, HardCopy ASIC devices, pre-defined design building blocks known as intellectual property (IP), cores, and associated development tools. Our PLDs, which consist of field-programmable gate arrays, or FPGAs, and complex programmable logic devices, or CPLDs, are semiconductor integrated circuits that are manufactured as standard chips that our customers program to perform desired logic functions within their electronic systems. With our HardCopy devices we offer our customers a migration path from a PLD to a low-cost, high-volume, non-programmable implementation of their designs. Our customers can license IP cores from us for implementation of standard functions in their PLD designs. Customers develop, compile, and verify their PLD designs, and then program their designs into our PLDs using our proprietary development software, which operates on personal computers and engineering workstations. Our products serve a wide range of customers within the Telecom and Wireless, Industrial Automation, Military and Auto, Networking, Computer and Storage and Other market segments. |
Significant Accounting Policies
Significant Accounting Policies | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | Note2:Significant Accounting Policies BASIS OF PRESENTATION|On September23, 2008, our board of directors approved a change in our fiscal year end from the Friday nearest December31 to December31 of each year. This change was effective beginning with our fiscal year 2008 and had no impact on our consolidated financial statements for any previously reported period. As a result of the change in our fiscal year end, our fiscal years ended December31, 2008 (2008)and December28, 2007 (2007)contain 369days and 364days, respectively. Our fiscal year ended December31, 2009 (2009)contains 365 days. The consolidated financial statements include our accounts as well as those of our wholly-owned subsidiaries after elimination of all significant inter-company balances and transactions. USE OF ESTIMATES|The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. RECLASSIFICATION|The following reclassification has been made to prior year consolidated financial statements to conform to the current year presentation: Consolidated Statements of Cash Flows: Cash used for Shares withheld for employee taxes is presented as a separate line item (previously reported as a component of Proceeds from issuance of common stock through various stock plans). The reclassification had no effect on our consolidated cash flows, as previously reported. CASH EQUIVALENTS |Cash equivalents consist of highly liquid investments with a maturity of three months or less from the date of original purchase. As of December31, 2009 and 2008, our cash equivalents consisted of money market funds. DEFERRED COMPENSATION PLAN MARKETABLE SECURITIES |We allow our U.S.-based officers and director-level employees to defer a portion of their compensation under the Altera Corporation Non-Qualified Deferred Compensation Plan (NQDC Plan). The investments held in the NQDC Plan consist of publicly traded equity securities, mutual funds and fixed income securities. We account for these investments as trading securities with gains or losses reported as (Gain) loss on deferred compensation plan securities in our consolidated statements of income. DEFERRED COMPENSATION PLAN RESTRICTED CASH EQUIVALENTS |As of December31, 2009 and 2008, the NQDC Plan held $19.0million and $17.4million, respectively, in money market funds, which are classified as restricted cash equivalents due to legal restrictions associated with the trust held under the Plan. INVENTORIES|Inventories are recorded at the lower of actual cost (approximated by standard cost) determined on a first-in-first-out basis or market. We establish provisions for inventory if it is in excess of projected customer demand, and the creation of such provisions results in a write-down of inventory to net realizable value and a charge to cost of goods sold. PROPERTY AND EQUIPMENT|Property and equipment are carried at cost less accumulated deprec |
Accounts Receivable, Net and Si
Accounts Receivable, Net and Significant Customers | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Accounts Receivable, Net and Significant Customers [Abstract] | |
Accounts Receivable, Net and Significant Customers | Note 3: Accounts Receivable, Net and Significant Customers Account receivable, net as of December31, 2009 and 2008 was comprised of the following: December 31, December 31, (In thousands) 2009 2008 Gross accounts receivable $ 218,647 $ 86,526 Allowance for doubtful accounts (500 ) (2,782 ) Allowance for sales returns (3 ) (314 ) Accounts receivable, net $ 218,144 $ 83,430 We determine the allowance requirement, on an account by account basis, by calculating an estimated financial risk for each OEM customer or distributor and taking into account other available information that indicates that receivable balances may not be fully collectible. Account balances are charged off against the allowance when it is probable that the receivable will not be recovered. During 2009, we reduced our allowance for doubtful accounts based on our sustained favorable collection experience and estimated probable credit losses in our existing accounts receivable based on analysis of current aging, economic indicators and customer conditions. This change in accounting estimate reduced our Selling, general and administrative expense by $2.3million. We sell our products to original equipment manufacturers, or OEMs, and to electronic components distributors who resell these products to OEMs, or their subcontract manufacturers. Net sales by customer type and net sales to significant customers were as follows: (Percentage of Net Sales) 2009 2008 2007 Sales to distributors 82 % 91 % 94 % Sales to OEMs 18 % 9 % 6 % 100 % 100 % 100 % Significant Distributors(1): Arrow Electronics, Inc. ( Arrow) 45 % 46 % 45 % Macnica, Inc. (Macnica) 15 % 14 % 13 % (1) Except as presented above, no other distributor accounted for greater than 10% of our net sales for the years ended 2009, 2008 or 2007. Huawei Technologies Co., Ltd., an OEM, individually accounted for 11% of our net sales in 2009. No other individual OEM accounted for more than 10% of our net sales for 2009. No individual OEM accounted for more than 10% of our net sales in 2008 or 2007. As of December31, 2009, accounts receivable from Arrow, Macnica and Avnet, Inc. including its affiliates (Avnet) individually accounted for approximately 36%, 17% and 14%, respectively, of our total accounts receivable. As of December31, 2008, accounts receivable from Arrow and Macnica individually accounted for approximately 20% and 31%, respectively, of our total accounts receivable. No other distributor or OEM accounted for more than 10% of our accounts receivable as of December31, 2009 or 2008. |
Marketable Securities
Marketable Securities | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Marketable Securities [Abstract] | |
Marketable Securities | Note 4: Marketable Securities CASH EQUIVALENTS |Cash equivalents as of December31, 2009 and 2008 consisted of $1.5billion and $1.2billion of money market funds, respectively. For money market funds, the cost basis equals fair value and, accordingly, there are no unrealized gains or losses. Investment income from these securities was $6.2million, $31.7 million and $59.2million in 2009, 2008 and 2007, respectively, and is presented in Interest income and other in our consolidated statements of income. DEFERRED COMPENSATION PLAN ASSETS | Assets held in the trust associated with the NQDC Plan consist of money market shares, publicly traded equity securities, mutual funds and fixed income securities. Except for the money market shares, we account for these assets as trading securities, with gains or losses reported as (Gain) loss on deferred compensation plan securities in our consolidated statements of income. (Gain) loss from these assets is offset by the compensation expense (benefit)associated with our deferred compensation plan obligations. Therefore, gains or losses associated with the NQDC Plan assets do not impact our income before income taxes, net income, or cash balances. Investment income (loss)from our deferred compensation plan assets for 2009, 2008 and 2007 was comprised of the following: (In thousands) 2009 2008 2007 Gross realized gains from sale of trading securities $ 2,359 $ 2,048 $ 4,602 Gross realized losses from sale of trading securities (1,824 ) (3,926 ) (102 ) Dividend and interest income 1,038 1,529 2,026 Net unrealized holding gains (losses) 10,203 (17,757 ) 173 Net investment income (loss) $ 11,776 $ (18,106 ) $ 6,699 |
Inventories
Inventories | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Inventories [Abstract] | |
Inventories | Note 5: Inventories Inventories as of December31, 2009 and 2008 were comprised of the following: December 31, December 31, (In thousands) 2009 2008 Raw materials $ 7,158 $ 5,237 Work in process 39,652 51,527 Finished goods 22,895 27,873 Total inventories $ 69,705 $ 84,637 |
Property and Equipment
Property and Equipment | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Property and Equipment [Abstract] | |
Property and Equipment | Note 6: Property and Equipment Property and equipment, net as of December31, 2009 and 2008 was comprised of the following: December 31, December 31, (In thousands) 2009 2008 Land and land rights $ 23,108 $ 23,108 Buildings 152,557 125,323 Equipment and software 213,187 233,098 Office furniture and fixtures 20,798 21,840 Leasehold improvements 6,930 8,680 Contruction in progress 1,464 25,310 Property and equipment, at cost 418,044 437,359 Accumulated depreciation and amortization (243,528 ) (245,097 ) Property and equipment, net $ 174,516 $ 192,262 Depreciation expense includes the amortization of assets recorded under capital leases. Depreciation expense was $28.8million in 2009, $29.7million in 2008, and $30.7million in 2007. Depreciation and amortization expense as presented in our consolidated statements of cash flows includes the above amounts, together with amortization expense on our intangible assets. Intangible asset amortization expense was not significant for any period presented in our consolidated income statements. Assets held under capital leases, included in Equipment and software as presented above, totaled $8.6million (net of accumulated amortization of $6.9million) as of December31, 2009 and $13.0 million (net of accumulated amortization of $2.5million) as of December31, 2008. The amortization expense incurred on assets held under capital leases was $4.4million, $4.2million and $4.1million for 2009, 2008 and 2007, respectively. |
Deferred Income and Allowances
Deferred Income and Allowances on Sales to Distributors | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Deferred Income and Allowances on Sales to Distributors [Abstract] | |
Deferred Income and Allowances on Sales to Distributors | Note 7: Deferred Income and Allowances on Sales to Distributors Deferred income and allowances on sales to distributors is comprised of the following components: December 31, December 31, (In thousands) 2009 2008 Deferred revenue on shipments to distributors $ 363,448 $ 370,098 Deferred cost of sales on shipments to distributors (28,971 ) (33,924 ) Deferred income on shipments to distributors 334,477 336,174 Advances to distributors (60,877 ) (137,353 ) Other deferred revenue (1) 8,285 6,853 Total $ 281,885 $ 205,674 (1) Principally represents revenue deferred on our software and intellectual property licenses. The Deferred income and allowances on sales to distributor activity for 2009 and 2008 was as follows: (In thousands) 2009 2008 Balance at beginning of period $ 205,674 $ 280,440 Deferred revenue recognized upon shipment to distributors 4,605,460 5,209,908 Deferred costs of sales recognized upon shipments to distributors (304,601 ) (400,586 ) Decrease (increase)in advances to distributors 76,476 (18,691 ) Revenue recognized upon sell-through to end customers (951,125 ) (1,241,275 ) Costs of sales recognized upon sell-through to end customers 309,554 415,442 Earned distributor price concessions (1) (3,478,550 ) (3,908,151 ) Returns (182,435 ) (128,951 ) Increase (decrease)in other deferred revenue 1,432 (2,462 ) Balance at end of period $ 281,885 $ 205,674 (1) Average aggregate price concessions typically range from 65% to 80% of our list price on an annual basis, depending upon the composition of our sales, volumes and factors associated with the timing of shipments to distributors or payment of price concessions. |
Commitments and Contingencies
Commitments and Contingencies | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note8:Commitments and Contingencies OPERATING AND CAPITAL LEASE COMMITMENTS|We lease facilities and equipment under non-cancelable lease agreements expiring at various times through 2015. The facility leases generally require us to pay property taxes, insurance, maintenance, and repair costs. Total rental expense under all operating leases was $9.0million, $10.2million, and $11.6million in 2009, 2008 and 2007, respectively. We have the option to extend or renew most of our leases which may increase the future minimum lease commitments. Future minimum lease payments under all non-cancelable operating leases and capital lease obligations as of December31, 2009 are as follows: Year Operating Capital (In thousands) 2010 $ 8,226 $ 2,867 2011 5,729 2012 3,453 2013 2,430 2014 1,920 2015 297 Total $ 22,055 $ 2,867 PURCHASE OBLIGATIONS | We depend entirely upon subcontractors to manufacture our silicon wafers and provide assembly and test services. Due to lengthy subcontractor lead times, we must order these materials and services from these subcontractors well in advance, and we are obligated to pay for the materials and services once they are completed. As of December31, 2009, we had approximately $158.3million of outstanding purchase commitments to such subcontractors. We expect to receive and pay for these materials and services within the next four to six months. OTHER COMMITMENTS|In addition to operating leases and capital lease obligations, we enter into a variety of agreements and financial commitments in the normal course of business. 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 pursuant to such agreements have not been material. We believe that any future payments required pursuant to such agreements would not be material to our financial condition or results of operations. LEGAL PROCEEDING|We are named as a party to a lawsuit concerning our historical stock option practices and related accounting and reporting. In May and July2006, we were notified that three shareholder derivative lawsuits had been filed in the Superior Court of the State of California, County of Santa Clara, by persons identifying themselves as Altera shareholders and purporting to act on behalf of Altera, naming Altera Corporation as a nominal defendant and naming some of our current and former officers and directors as defendants. On July12, 2006, one of these derivative actions was voluntarily dismissed by the plaintiff shareholder. The remaining two derivative lawsuits pending in Santa Clara Superior Court were consolidated into a single action on September5, 2006. Plaintiffs filed a second amended consolidated complaint on December15, 2006. On January30, 2007, Altera and the defendants filed a motion to stay this action pending resolution of the federal derivative action (discussed be |
Income per Share
Income per Share | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Income per Share [Abstract] | |
Income per Share | Note 9: Income per Share A reconciliation of basic and diluted income per share is presented below: (In thousands, except per share amounts) 2009 2008 2007 Basic: Net income $ 251,062 $ 359,651 $ 290,023 Basic weighted shares outstanding 294,493 300,951 345,382 Net income per share $ 0.85 $ 1.20 $ 0.84 Diluted: Net income $ 251,062 $ 359,651 $ 290,023 Weighted shares outstanding 294,493 300,951 345,382 Effect of dilutive securities: Stock options, ESPP shares, and restricted stock unit shares 2,687 3,653 6,524 Diluted weighted shares outstanding 297,180 304,604 351,906 Net income per share $ 0.84 $ 1.18 $ 0.82 In applying the treasury stock method, we excluded 27.7million stock option shares for 2009 because their effect was anti-dilutive. Anti-dilutive stock option shares totaled 26.7million for 2008 and 21.6million for 2007. While these stock option shares are currently anti-dilutive, they could be dilutive in the future. All restricted stock units outstanding as of December31, 2009, December31, 2008 and December28, 2007 were included in our treasury stock method calculation. |
Stockholders Equity
Stockholders Equity | |
1/1/2009 - 12/31/2009
USD / shares | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | Note 10:Stockholders Equity COMMON STOCK REPURCHASES|We repurchase shares under our stock purchase program announced on July15, 1996, which has no specified expiration. No existing repurchase plans or programs have expired, nor have we decided to terminate any repurchase plans or programs prior to expiration. Since the inception of our stock repurchase program through December31, 2009, our board of directors has authorized 183.0million shares for repurchase and we have repurchased a total of 178.3million shares of our common stock for an aggregate cost of $3.7billion. All shares were retired upon acquisition and have been recorded as a reduction of Common stock, Capital in excess of par value and Retained earnings, as applicable. As of December31, 2009, 4.7million shares remained authorized for repurchase under our stock repurchase program. No shares were repurchased in 2009. Common stock repurchase activities for 2008 and 2007 were as follows: (In millions, except per share amounts) 2008 2007 Shares repurchased 26.6 58.0 Cost of shares repurchased $ 473.2 $ 1,226.3 Average price per share $ 17.78 $ 21.16 |
Stock-Based Compensation
Stock-Based Compensation | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Note 11:Stock-Based Compensation Our stock-based compensation plans include the 2005 Equity Incentive Plan (the 2005 Plan) and the 1987 Employee Stock Purchase Plan (ESPP). 2005 EQUITY INCENTIVE PLAN|Our equity incentive program is a broad-based, long-term retention program intended to attract, motivate, and retain talented employees as well as align stockholder and employee interests. The 2005 Plan provides stock-based incentive compensation (awards) to both our eligible employees and non-employee directors. Awards that may be granted under the 2005 Plan include non-qualified and incentive stock options, restricted stock units (RSUs), performance-based restricted stock units (PRSUs), restricted stock awards, stock appreciation rights, and stock bonus awards. To date, awards granted under the 2005 Plan consist of stock options, RSUs and PRSUs. The majority of stock-based awards granted under the 2005 Plan vest over four years. Stock options, RSUs and PRSUs granted under the 2005 Plan have a maximum contractual term of ten years. On May12, 2009, our stockholders approved an amendment to the 2005 Plan to increase the shares authorized for future issuance by 5million. As of December31, 2009, the 2005 Plan had a total of 29.6million shares reserved for future issuance, of which 18.4million shares were available for future grants. In 2007, we initiated the PRSU program for selected members of our senior management. The PRSUs vest upon: (1)Altera achieving net income (including equity compensation expense) from continuing operations as a percentage of net sales above a certain percentage; and (2)the grantees satisfying certain service requirements. For 2009, 2008 and 2007, 0.6million, 0.3million and 0.2million PRSUs were granted, respectively. Historically, we used equity awards in the form of stock options as one of the means for recruiting and retaining highly skilled talent. We now issue primarily RSUs and PRSUs rather than stock options for eligible employees as the primary type of long-term equity based award. A summary of activity for our RSUs and PRSUs for 2009 and information regarding RSUs and PRSUs outstanding and expected to vest as of December31, 2009 is as follows: Weighted-Average Grant-Date Weighted-Average Aggregate (In thousands, except per share Number of Fair Market Value Remaining Contractual Intrinsic amounts and terms) Shares Per Share Term (in Years) Value (1) Outstanding, December31, 2008 6,289 $ 20.54 Grants 3,274 $ 17.71 Vested (1,982 ) $ 20.35 Forfeited (629 ) $ 19.37 Outstanding, December31, 2009 6,952 $ 19.36 1.6 $ 157,317 Vested and expected to vest, December31, 2009 6,133 $ 19.36 1.5 $ 138,784 (1) Aggregate intrinsic value represents the closing price per share of our stock on December 31, 2009, multiplied by the number of RSUs and PRSUs outstanding or vested and expect |
Income Taxes
Income Taxes | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Income Taxes [Abstract] | |
Income Taxes | Note 12:Income Taxes Income tax expense consists of: (In thousands) 2009 2008 2007 Current tax expense: United States (U.S.) $ 12,654 $ 35,073 $ 43,670 State 10,273 3,583 5,617 Foreign 37,439 20,130 12,685 Total current tax expense 60,366 58,786 61,972 Deferred taxes: U.S. (6,741 ) (2,405 ) (10,095 ) State 851 2,747 (4,876 ) Foreign 395 604 Total deferred tax expense (benefit) (5,890 ) 737 (14,367 ) Total income tax expense $ 54,476 $ 59,523 $ 47,605 Deferred income tax assets were as follows: December 31, December 31, (In thousands) 2009 2008 Deferred income on sales to distributors $ 20,702 $ 28,849 Acquisition costs 7,787 10,044 Deferred compensation 24,868 24,340 Stock compensation 32,114 31,377 Other accrued expenses and reserves 33,724 32,325 Unutilized tax credits 23,731 12,794 Gross deferred tax assets 142,926 139,729 Depreciation (4,513 ) (3,341 ) Net deferred tax assets $ 138,413 $ 136,388 As of December31, 2009, we had $10.1million and $13.7million of U.S. and California research and development tax credit carry forwards, respectively. The U.S. research and development tax credits start to expire in 2027 and the California credits can be carried forward indefinitely. We calculate our current and deferred tax provision based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed. Adjustments for differences between tax provisions and tax returns are recorded when identified, which is generally in the third or fourth quarter of our subsequent year. The provisions related to the tax accounting for stock-based compensation prohibit the recognition of a deferred tax asset for an excess benefit that has not yet been realized. As a result, we will only recognize a benefit from stock-based compensation in paid-in-capital if an incremental tax benefit is realized or realizable after all other tax attributes currently available to us have been utilized. In addition, we have elected to account for the indirect benefits of stock-based compensation on the research and development tax credit through the consolidated statement of income (continuing operations) rather than through paid-in-capital. The items accounting for the difference between income taxes computed at the federal statutory rate and income tax expense are as follows: (In thousands) 2009 2008 2007 Tax expense at U.S. statutory rates $ 106,977 $ 146,736 $ 118,158 State taxes, net of federal benefit 10,166 12,227 8,440 |
Segment and Geographic Informat
Segment and Geographic Information | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Segment and Geographic Information [Abstract] | |
Segment and Geographic Information | Note 13: Segment and Geographic Information We operate in a single industry segment comprised of the design, development, manufacture, and sale of PLDs and related software design tools. Our sales by major geographic area are based on the geographic location of the OEMs or the distributors who have purchased our products. The geographic locations of our distributors may be different from the geographic locations of our end customers. (In thousands) 2009 2008 2007 United States $ 220,452 $ 287,905 $ 252,244 Japan 214,849 260,672 251,694 China 322,762 259,773 214,803 Other 437,350 558,874 544,807 Net sales from foreign countries 974,961 1,079,319 1,011,304 Net sales in total $ 1,195,413 $ 1,367,224 $ 1,263,548 Property and equipment, net by country was as follows: December 31, December 31, (In thousands) 2009 2008 United States $ 113,562 $ 128,708 Malaysia 56,175 56,614 Other 4,779 6,940 Property and equipment, net from foreign countries 60,954 63,554 Property and equipment, net in total $ 174,516 $ 192,262 |
Employee Benefit Plans
Employee Benefit Plans | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | Note 14: Employee Benefits Plans ALTERA CORPORATION SAVINGS AND RETIREMENT PLAN | We provide retirement benefits to our eligible U.S. employees, through the Altera Corporation Savings and Retirement Plan (the 401(k) Plan). As allowed under Section 401(k) of the Internal Revenue Code, the 401(k) Plan allows tax deferred salary deductions for eligible employees. Our Retirement Plans Committee administers the 401(k) Plan. Participants in the 401(k) Plan may make salary deferrals of up to 50% of their eligible annual salary, limited by the maximum dollar amount allowed by the Internal Revenue Code. For every dollar deferred under the 401(k) Plan, we make a matching contribution equal to 100% up to the first 12% of the salary deferred per pay period with a maximum of $4,000 per participant in 2009 ($3,000 for 2008 and $2000 for 2007). After three years of service, all matching contributions are immediately vested. Effective January1, 2003, participants who reach the age of fifty before the close of the 401(k) Plan year may be eligible to make catch-up salary deferral contributions, limited by the maximum dollar amount allowed by the Internal Revenue Code. Catch-up contributions are not eligible for matching contributions. Total contributions to the 401(k) Plan were $4.7million, $3.8million, and $2.8million in 2009, 2008 and 2007, respectively, and were expensed as incurred. ALTERA CORPORATION NON-QUALIFIED DEFERRED COMPENSATION PLAN | We allow our U.S.-based officers and director-level employees to defer a portion of their compensation under the Altera Corporation Non-Qualified Deferred Compensation Plan (NQDC Plan). Our Retirement Plans Committee administers the NQDC Plan. As of December31, 2009, there were approximately 123 participants in the NQDC Plan who self-direct their investments in the NQDC Plan, subject to certain limitations. In the event we become insolvent, the NQDC Plan assets are subject to the claims of our general creditors. Since the inception of the NQDC Plan, we have not made any contributions to the NQDC Plan and we have no commitments to do so in the future. There are no NQDC Plan provisions that provide for any guarantees or minimum return on investments. NQDC Plan participants are prohibited from investing NQDC Plan contributions in Altera common stock. The balance of the NQDC Plan assets and related obligations was $69.9million and $56.0million as of December31, 2009 and December31, 2008, respectively. Investment income or loss earned by the NQDC Plan is recorded as (Gain) loss on deferred compensation plan securities in our consolidated statements of income. The investment (gain) loss also represents a (increase)decrease in the future payout to participants and is recorded as Compensation expense (benefit) deferred compensation plan in our consolidated statements of income. Compensation expense (benefit)associated with our NQDC Plan obligations is offset by (gain)loss from related securities. The net effect of investment income or loss and related compensation expense or benefit has no impact on our income before income taxes, net income, or cash balances. RETIREE MEDICAL PLAN | We sponsor a ret |
Long-Term Credit Facility
Long-Term Credit Facility | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Long-term Credit Facility [Abstract] | |
Long-term Credit Facility | Note 15: Long-term Credit Facility On August31, 2007, we entered into a five-year $750million unsecured revolving credit facility (the Facility) that is scheduled to expire on August31, 2012. Under certain circumstances, upon our request and with the consent of the lenders, the commitments under the Facility may be increased up to an additional $250million and the expiration date of the Facility may be extended annually for additional one year periods. Our total borrowings under the Facility as of December31, 2009 and 2008 were $500million. Borrowings under the Facility bear interest at either a Eurodollar rate (LIBOR) or a Prime rate, at our option, plus an applicable margin based upon certain financial ratios, determined and payable quarterly. The interest rate as of December31, 2009 and 2008 was LIBOR plus 0.425%. In addition, we pay a facility fee on the entire Facility. This facility fee varies with certain financial ratios and was 0.125% as of December31, 2009 and 2008. The principal amount of borrowings, together with accrued interest, is due on the maturity date of August31, 2012. As of December31, 2009, $250million is available under the Facility. Interest expense recognized under the Facility represented the substantial portion of Interest expense on our consolidated income statements for 2009, 2008 and 2007. The terms of the Facility require compliance with certain financial covenants that require us to maintain certain financial ratios related to interest coverage and financial leverage. As of December31, 2009, we were in compliance with all such covenants. |
Restructuring Charges
Restructuring Charges | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Restructuring Charges [Abstract] | |
Restructuring Charges | Note 16: Restructuring Charges During 2009, we announced a net reduction of approximately 120 positions. We incurred restructuring-related charges of approximately $10.0million in 2009. The charges were comprised of employee severance costs of approximately $7.6million, charges related to the termination of certain external sales representatives of approximately $2.3million and operating lease impairments of approximately $0.1million. No significant restructuring activities were initiated in 2008. In 2007, we announced a restructuring of our operations in order to lower our overall cost structure and enhance near and long term profitability of the company. The restructuring plan included the elimination of 67 jobs and the consolidation of excess facilities resulting in the restructuring of our office leases in San Diego and Santa Cruz, California; Ottawa, Canada; and Hong Kong. The restructuring charges are included in our consolidated statements of income as follows: (In thousands) 2009 2008 2007 Cost of sales $ 137 $ $ Research and development expense 4,104 1,767 Selling, general, and administrative expense 5,728 3,472 $ 9,969 $ $ 5,239 The following table summarizes the significant activity within, and components of, our restructuring obligations as of December31, 2009 and December31, 2008: Operating External Sales Employee Lease Representative Other (In thousands) severance costs impairments Termination costs Total Restructuring obligations as of December28, 2007 (1) $ 2,619 $ 1,282 $ $ 360 $ 4,261 Cash payments (2,619 ) (1,001 ) (341 ) (3,961 ) Other adjustments (2) 452 50 502 Restructuring obligations as of December31, 2008 (1) 733 69 802 Restructuring charges recognized 7,588 62 2,319 9,969 Cash payments (7,072 ) (617 ) (1,898 ) (59 ) (9,646 ) Other adjustments (2 ) (3 ) (3 ) (10 ) (18 ) Restructuring obligations as of December31, 2009 (1) $ 514 $ 175 $ 418 $ $ 1,107 (1) Principally included in Accrued liabilities in the accompanying consolidated balance sheets as of December31, 2009 and December31, 2008. (2) Principally represents adjustments to the net operating lease accrual associated with a change in estimate related to sub-lease income assumptions. The change in estimate was driven by an overall deterioration of real estate market conditions arising since the fourth quarter of 2007 in markets affected by our restructuring plan. We anticipate that the remaining restructuring obligations of $1.1million as of December31, 2009 will be substantially paid prior to December31, 2010. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Note 17: Fair Value of Financial Instruments We define fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, an exit price. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability, also taking into consideration the principal or most advantageous market in which we would transact and the market based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk and credit risk. We apply the following fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 Observable inputs such as quoted prices in active markets Level 2 Inputs other than the quoted prices in active markets that are observable either directly or indirectly Level 3 Unobservable inputs in which there is little or no market data, which require us to develop our own assumptions This hierarchy requires us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. On a recurring basis, we measure certain financial assets and liabilities at fair value, which consist of our cash equivalents and marketable securities. The following table summarizes the valuation of our financial instruments that were determined by using the following inputs as of December31, 2009 and 2008: Fair Value Measurements as of December 31, 2009 Quoted Prices in Active Significant Other Significant Markets for Identical Observable Inputs Unobservable Inputs (In thousands) Total Assets (Level 1) (Level 2) (Level 3) Cash equivalents (1) $ 1,450,112 $ 1,450,112 $ $ Deferred compensation plan assets: (2) Restricted cash equivalents 18,986 18,986 Equity securities 22,530 22,530 Fixed income securities 5,002 5,002 Mutual funds 23,373 22,523 850 Total $ 1,520,003 $ 1,514,151 $ 5,852 $ Fair Value Measurements as of December 31, 2008 Quoted Prices in Active Significant Other Significant Markets for Identical Observable Inputs Unobservable Inputs (In thousands) Total Assets (Level 1) (Level 2) (Level 3) Cash equivalents (1) $ 1,190,271 $ 1,190,271 $ $ Deferred compensation plan assets: (2) Restricted cash equivalents 17,379 17,379 Equity securities 14,592 14,592 Fixed income securities 6,239 6,239 Mutual funds 17,762 17,762 Total $ 1,246,243 $ 1,240,004 $ 6,239 $ (1) Included in |
Subsequent Events
Subsequent Events | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 18: Subsequent Events We evaluated subsequent events through February17, 2010 when the financial statements were issued. On January25, 2010, our board of directors declared a cash dividend of $0.05 per common share payable on March1, 2010 to stockholders of record on February10, 2010. On January28, 2010, our board of directors approved a 10million share increase to the number of shares authorized for repurchase under our share repurchase program. |