1000 - CONOLIDATED BALANCE SHEE
1000 - CONOLIDATED BALANCE SHEETS (USD $) | |||||||||||||||||||
In Thousands | Jun. 30, 2009
| Mar. 31, 2009
| |||||||||||||||||
ASSETS | |||||||||||||||||||
Cash and cash equivalents | $576,979 | $446,329 | |||||||||||||||||
Short-term investments | 830,456 | 943,616 | |||||||||||||||||
Accounts receivable, net | 98,044 | 88,525 | |||||||||||||||||
Inventories | 113,872 | 131,510 | |||||||||||||||||
Prepaid expenses | 11,864 | 11,447 | |||||||||||||||||
Deferred tax assets | 71,039 | 75,681 | [1] | ||||||||||||||||
Other current assets | 58,887 | 51,736 | |||||||||||||||||
Total current assets | 1,761,141 | 1,748,844 | [1] | ||||||||||||||||
Property, plant and equipment, net | 513,765 | 531,687 | |||||||||||||||||
Long-term investments | 30,729 | 50,826 | |||||||||||||||||
Goodwill | 36,165 | 36,165 | |||||||||||||||||
Intangible assets, net | 25,639 | 25,718 | |||||||||||||||||
Other assets | 18,970 | 18,526 | [1] | ||||||||||||||||
Total assets | 2,386,409 | 2,411,766 | [1] | ||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||
Accounts payable | 28,885 | 29,228 | |||||||||||||||||
Accrued liabilities | 36,875 | 42,486 | |||||||||||||||||
Deferred income on shipments to distributors | 83,431 | 83,931 | |||||||||||||||||
Total current liabilities | 149,191 | 155,645 | |||||||||||||||||
Junior convertible debentures | 335,539 | 334,184 | [1] | ||||||||||||||||
Long-term income tax payable | 72,737 | 70,051 | |||||||||||||||||
Deferred tax liability | 367,788 | 365,734 | [1] | ||||||||||||||||
Other long-term liabilities | 3,946 | 3,834 | |||||||||||||||||
Stockholders' equity: | |||||||||||||||||||
Preferred stock, $0.001 par value; authorized 5,000,000 shares; no shares issued or outstanding | 0 | 0 | |||||||||||||||||
Common stock, $0.001 par value; authorized 450,000,000 shares; 218,789,994 shares issued and 182,933,167 shares outstanding at June 30, 2009; 218,789,994 shares issued and 182,769,124 shares outstanding at March 31, 2009. | 183 | 183 | |||||||||||||||||
Additional paid-in capital | 1,278,212 | 1,273,876 | [1] | ||||||||||||||||
Retained earnings | 1,264,693 | 1,299,317 | [1] | ||||||||||||||||
Accumulated other comprehensive income | 4,282 | 4,312 | |||||||||||||||||
Common stock held in treasury: 35,856,827 shares at June 30, 2009; and 36,020,870 shares at March 31, 2009. | (1,090,162) | (1,095,370) | |||||||||||||||||
Total stockholders' equity | 1,457,208 | 1,482,318 | [1] | ||||||||||||||||
Total liabilities and stockholders' equity | $2,386,409 | $2,411,766 | [1] | ||||||||||||||||
[1]As adjusted due to the adoption of FSP APB 14-1 |
1100 - PARENTHETICAL DATA TO TH
1100 - PARENTHETICAL DATA TO THE CONSOLIDATED BALANCE SHEETS (USD $) | ||
Jun. 30, 2009
| Mar. 31, 2009
| |
Stockholders' equity: | ||
Preferred stock - par value | 0.001 | 0.001 |
Preferred stock - shares authorized | 5,000,000 | 5,000,000 |
Preferred Stock - Shares Issued | 0 | 0 |
Common stock - par value | 0.001 | 0.001 |
Common stock - shares authorized | 450,000,000 | 450,000,000 |
Common stock - shares issued | 218,789,994 | 218,789,994 |
Common stock - shares outstanding | 182,933,167 | 182,769,124 |
Treasury stock - shares | 35,856,827 | 36,020,870 |
2000 - CONSOLIDATED STATEMENTS
2000 - CONSOLIDATED STATEMENTS OF INCOME (USD $) | |||||||||||||||||||
In Thousands, except Per Share data | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | |||||||||||||||||
Net sales | $192,949 | $268,172 | |||||||||||||||||
Cost of sales | 96,514 | [3] | 104,575 | [2] | |||||||||||||||
Gross profit | 96,435 | 163,597 | |||||||||||||||||
Operating expenses: | |||||||||||||||||||
Research and development | 27,636 | [3] | 31,552 | [2] | |||||||||||||||
Selling, general and administrative | 36,383 | [3] | 45,413 | [2] | |||||||||||||||
Special charge | 1,238 | 0 | |||||||||||||||||
Total operating expenses | 65,257 | 76,965 | |||||||||||||||||
Operating income | 31,178 | 86,632 | |||||||||||||||||
Other income (expense): | |||||||||||||||||||
Interest income | 3,302 | 10,199 | |||||||||||||||||
Interest expense | (7,519) | (7,642) | [1] | ||||||||||||||||
Other, net | 5,694 | 2,745 | |||||||||||||||||
Income before income taxes | 32,655 | 91,934 | |||||||||||||||||
Income tax provision | 5,287 | 16,387 | [1] | ||||||||||||||||
Net income | $27,368 | $75,547 | |||||||||||||||||
Basic net income per common share | 0.15 | 0.41 | [1] | ||||||||||||||||
Diluted net income per common share | 0.15 | 0.4 | [1] | ||||||||||||||||
Dividends declared per common share | 0.339 | 0.33 | |||||||||||||||||
Basic common shares outstanding | 182,856 | 184,663 | |||||||||||||||||
Diluted common shares outstanding | 185,526 | 191,049 | |||||||||||||||||
[1]As adjusted due to the adoption of FSP APB 14-1 | |||||||||||||||||||
[2]Includes share-based compensation expense as follows: Cost of Sales $1,625 Research and development $2,435 Selling, general and administrative $3,639 | |||||||||||||||||||
[3]Includes share-based compensation expense as follows: Cost of Sales $1,710 Research and development $2,989 Selling, general and administrative $4,299 |
3000 - CONSOLIDATED STATEMENTS
3000 - CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | ||
In Thousands | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 |
Cash flows from operating activities: | ||
Net income | $27,368 | $75,547 |
Adjustments to reconcile net income to net cash provided by operating activitie | ||
Depreciation and amortization | 22,659 | 23,766 |
Deferred income taxes | 7,239 | 3,410 |
Share-based compensation expense related to equity incentive plans | 8,998 | 7,699 |
Tax benefit from equity incentive plans | (68) | 5,928 |
Excess tax benefit from share-based compensation | 0 | (5,178) |
Convertible debt derivatives - revaluation and amortization | (153) | 99 |
Amortization of convertible debenture issuance costs | 192 | 192 |
Gain on sale of assets | 0 | (94) |
Special charge | 1,238 | 0 |
Purchases/sales of trading securities | 55,215 | (1,021) |
Gain on trading securities | (5,485) | (1,417) |
Unrealized impairment loss on available-for-sale investments | 1,266 | 894 |
Changes in operating assets and liabilities: | ||
(Increase) decrease in accounts receivable | (9,519) | 2,566 |
Decrease (increase) in inventories | 17,704 | (1,537) |
(Decrease) increase in deferred income on shipments to distributors | (500) | 1,684 |
(Decrease) increase in accounts payable and accrued liabilities | (7,192) | 1,756 |
Change in other assets and liabilities | (3,895) | 8,799 |
Net cash provided by operating activities | 115,067 | 123,093 |
Cash flows from investing activities: | ||
Purchases of available-for-sale investments | (133,279) | (3,500) |
Sales and maturities of available-for-sale investments | 214,967 | 165,135 |
Investment in other assets | (902) | (237) |
Proceeds from sale of assets | 0 | 109 |
Capital expenditures | (3,756) | (21,747) |
Net cash provided by investing activities | 77,030 | 139,760 |
Cash flows from financing activities: | ||
Payment of cash dividend | (61,991) | (60,977) |
Repurchase of common stock | 0 | (23,637) |
Proceeds from sale of common stock | 544 | 14,422 |
Excess tax benefit from share-based compensation | 0 | 5,178 |
Net cash used in financing activities | (61,447) | (65,014) |
Net increase in cash and cash equivalents | 130,650 | 197,839 |
Cash and cash equivalents at beginning of period | 446,329 | 487,736 |
Cash and cash equivalents at end of period | $576,979 | $685,575 |
6000 - BASIS OF PRESENTATION
6000 - BASIS OF PRESENTATION | |
3 Months Ended
Jun. 30, 2009 USD / shares | |
Basis of Presentation | |
Basis of Presentation | (1) Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Microchip Technology Incorporated and its wholly-owned subsidiaries (the Company).All intercompany balances and transactions have been eliminated in consolidation.We own 100% of the outstanding stock in all of our subsidiaries. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC).In the opinion of management, all adjustments of a normalrecurring nature which are necessary for a fair presentation have been included.Certain information and footnote disclosures normally included in audited consolidated financial statements have been condensed or omitted pursuant to such SEC rules and regulations.It is suggested that these condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for thefiscal year ended March 31, 2009.The results of operations for the three months ended June 30, 2009 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2010 or for any other period. Subsequent events have been evaluated through August7, 2009, which is the date the financial statements were issued. |
6010 - RECENTLY ISSUED ACCOUNTI
6010 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |
3 Months Ended
Jun. 30, 2009 USD / shares | |
Adopted and Recently Issued Accounting Pronouncements | |
Adopted and Recently Issued Accounting Pronouncements | (2) Adopted and Recently Issued Accounting Pronouncements On April 1, 2009, we adopted the Financial Accounting Standards Boards (FASB) Staff Position No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (FSP APB 14-1), which clarifies the accounting forconvertible debt instruments that may be settled in cash (including partial cash settlement) upon conversion.FSP APB 14-1 requires issuers to account separately for the liability and equity components of certain convertible debt instruments in a manner that reflects the issuers convertible debt (unsecured debt) borrowing rate when interest cost is recognized.FSP APB 14-1 requires bifurcation of a component of the debt to be recognized as part of interest expense in our consolidated statements of income. Once adopted, FSP APB 14-1 requires retrospective application to the terms of instruments as they existed for all periods presented.The adoption of FSP APB 14-1 affects the accounting for our 2.125% junior subordinated convertible debentures issued in December 2007 and due in December 2037.The retrospective application of this pronouncement affects our fiscal years 2008 and 2009. The following table sets forth the effect of the retrospective application of FSP APB 14-1 on certain previously reported line items (in thousands, except per share data): Condensed Consolidated Statements of Income: Three Months Ended June 30, 2008 As Reported As Adjusted Interest expense $ (6,401 ) $ (7,642 ) Income tax provision $ 16,865 $ 16,387 Net income $ 76,310 $ 75,547 Basic net income per common share $ 0.41 $ 0.41 Diluted net income per common share $ 0.40 $ 0.40 Condensed Consolidated Balance Sheet: March 31, 2009 As Reported As Adjusted Deferred tax assets $ 69,626 $ 75,681 Total current assets $ 1,742,789 $ 1,748,844 Other assets $ 34,254 $ 18,526 Total assets $ 2,421,439 $ 2,411,766 Junior convertible debentures $ 1,149,184 $ 334,184 Deferred tax liability $ 51,959 $ 365,734 Additional paid-in capital $ 778,204 $ 1,273,876 Retained earnings $ 1,303,437 $ 1,299,317 Total stockholders equity $ 990,766 $ 1,482,318 Total liabilities and stockholders equity $ 2,421,439 $ 2,411,766 In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (SFAS No. 141R). SFAS No. 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed,any noncontrolling interest in the acquiree and the goodwill acquired. SFAS No. 141R also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. In April2009, the FASB issued FSP FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies (FSP FAS 141R-1). FSP FAS 141R-1 amends and clarifies SFAS No.141R toaddress application issues on initial recognition and measurement, subs |
6020 - SPECIAL CHARGE
6020 - SPECIAL CHARGE | |
3 Months Ended
Jun. 30, 2009 USD / shares | |
Special Charge | |
Special Charge | (3)Special Charge During the three months ended June 30, 2009, the Company agreed to the terms of a patent license with an unrelated third-party and signed an agreement on July 9, 2009. The patent license settled alleged infringement claims. The total payment made to the third-party in July 2009 was $1.4 million, $1.2 million of which was expensed in the first quarter of fiscal 2010 and the remaining $0.2 million was recorded as a prepaid royalty that will be amortized over the remaining life of the patent, which expires in June 2010. |
6040 - INVESTMENTS
6040 - INVESTMENTS | |
3 Months Ended
Jun. 30, 2009 USD / shares | |
Investments | |
Investments | (4)Investments The Company's investments are intended to establish a high-quality portfolio that preserves principal, meets liquidity needs, avoids inappropriate concentrations, and delivers an appropriate yield in relationship to the Companys investment guidelines and market conditions.The following is a summary of available-for-sale and tradingsecurities at June 30, 2009 (amounts in thousands): Available-for-sale Securities Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Government agency bonds $ 400,431 $ 1,425 $ 9 $ 401,847 Municipal bonds 345,883 4,722 --- 350,605 Auction rate securities 17,636 --- --- 17,636 Corporate bonds 20,000 --- 22 19,978 $ 783,950 $ 6,147 $ 31 $ 790,066 Trading Securities Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Marketable equity securities $ 26,908 $ 2,912 $ 1 $ 29,819 Restricted cash 9,425 --- --- 9,425 Auction rate securities 28,101 --- --- 28,101 Put option on auction rate securities 3,774 --- --- 3,774 $ 68,208 $ 2,912 $ 1 $ 71,119 At June 30, 2009, the Companys available-for-sale and trading securities are presented on the condensed consolidated balance sheets as short-term investments of $830.5 million and long-term investments of $30.7 million. The $29.8million in marketable equity securities listed above relates to strategic investments in publicly traded companies.The Company has classified the shares owned in these companies as trading securities.During the three months ended June 30, 2009, the Company recognized a gain in earnings of $4.7million on these trading securities.The Company had a net realized loss of $3.8 million on trading securities that it sold in the three months ended June 30, 2009.The Company also has cash on deposit of $9.4million, held by a broker as cash collateral for put options the Company has written on one of its trading securities.This amount is shown as restricted cash in the table above.The Company recorded the cash value received at the date the puts were written withinother current liabilities.The Company records the change in the fair value of the puts in other income, net at each balance sheet date.At June 30, 2009, the fair value of the puts of $1.0 million was recorded in other current liabilities.These put options expire in January 2010.If the price of the common stock underlying the puts falls below the strike price of the puts, the Company may need to make an additional investment at the designated strike price of theputs. At June 30, 2009, $45.7 million of the fair value of the Companys investment portfolio was invested in auction rate securities (ARS).With the continuing liquidity issues in the global credit and capital markets, the Companys ARS have experienced multiple failed auctions. In September2007 and February2008, auctionsfor $24.9 million and $34.8 million, respectively, of the original purchase value of the Companys investments in ARS first failed. While the Company continues t |
6050 - FAIR VALUE MEASUREMENTS
6050 - FAIR VALUE MEASUREMENTS | |
3 Months Ended
Jun. 30, 2009 USD / shares | |
Fair Value Measurements | |
Fair Value Measurements | (5)Fair Value Measurements The Company adopted SFAS No.157 on April1, 2008. SFAS No.157, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. SFAS No.157 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. 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. As a basis for considering such assumptions, SFAS No.157 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair valueas 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; and Level 3 Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Assets and liabilities measured at fair value on a recurring basis at June 30, 2009 are as follows (amounts in thousands): Quoted Prices in Active Markets for Identical Instruments (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Balance Assets Money market fund deposits $ 383,811 $ --- $ --- $ 383,811 Deposit accounts --- 202,592 --- 202,592 Government agency bonds --- 401,847 --- 401,847 Municipal bonds --- 350,605 --- 350,605 Auction rate securities --- --- 45,737 45,737 Put option on auction rate securities --- --- 3,774 3,774 Corporate bonds --- 19,978 --- 19,978 Marketable securities 29,819 --- --- 29,819 Total assets measured at fair value $ 413,630 $ 975,022 $ 49,511 $ 1,438,163 Liabilities Put options on publicly traded common stock $ 958 $ --- $ --- $ 958 Total liabilities measured at fair value $ 958 $ --- $ --- $ 958 For Level 3 valuations, the Company estimated the fair value of its ARS based on the following: (i)the underlying structure of each security; (ii)the present value of future principal and interest payments discounted at rates considered to reflect current market conditions; (iii)consideration of the probabilities of default,auction failure, or repurchase at par for each period; and (iv) estimates of the recovery rates in the event of default for each security.The Company estimated the value of the put option on the ARS by evaluating the estimated cash flows before and after the receipt of the put option, discounted at rates reflecting the likelihood of default and lack of liquidity, or in the case of the payment of the par value to be paid by the broker at exercise of the put option, the counterparty credit risk.Theestimated fair values that ar |
6055 - FAIR VALUE OF FINANCIAL
6055 - FAIR VALUE OF FINANCIAL INSTRUMENTS | |
3 Months Ended
Jun. 30, 2009 USD / shares | |
Fair value of financial instruments | |
Fair Value of Financial Instruments | (6) Fair value of financial instruments The carrying amount of cash equivalents approximates fair value because their maturity is less than three months.The carrying amount of short-term and long-term investments approximates fair value as the securities are marked to market as of each balance sheet date with any unrealized gains and losses reported in stockholders' equity.The carrying amount of accounts receivable, accounts payable and accrued liabilities approximates fair value due to the short-term maturity of the amounts.The fair value of the Companys junior subordinated convertible debentures was $868.3 million at June 30, 2009, based on the trading price of the bonds, compared to the carrying value of $335.5 million.See Note 11 for additional information regarding the carrying value of the Company's junior subordinated convertibledebentures. |
6060 - ACCOUNTS RECEIVABLE
6060 - ACCOUNTS RECEIVABLE | |
3 Months Ended
Jun. 30, 2009 USD / shares | |
Accounts Receivable | |
Accounts Receivable | (7) Accounts Receivable Accounts receivable consists of the following (amounts in thousands): June 30, 2009 March 31, 2009 Trade accounts receivable $ 100,562 $ 91,325 Other 685 376 101,247 91,701 Less allowance for doubtful accounts 3,203 3,176 $ 98,044 $ 88,525 |
6070 - INVENTORIES
6070 - INVENTORIES | |
3 Months Ended
Jun. 30, 2009 USD / shares | |
Inventories | |
Inventories | (8) Inventories The components of inventories consist of the following (amounts in thousands): June 30, 2009 March 31, 2009 Raw materials $ 3,750 $ 3,693 Work in process 101,990 114,676 Finished goods 8,132 13,141 $ 113,872 $ 131,510 Inventory impairment charges establish a new cost basis for inventory and charges are not subsequently reversed to income even if circumstances later suggest that increased carrying amounts are recoverable. |
6080 - PROPERTY PLANT AND EQUIP
6080 - PROPERTY PLANT AND EQUIPMENT | |
3 Months Ended
Jun. 30, 2009 USD / shares | |
Property Plant and Equipment | |
Property Plant and Equipment | (9) Property, Plant and Equipment Property, plant and equipment consists of the following (amounts in thousands): June 30, 2009 March 31, 2009 Land $ 39,671 $ 39,671 Building and building improvements 334,955 334,717 Machinery and equipment 1,149,741 1,148,588 Projects in process 111,888 114,478 1,636,255 1,637,454 Less accumulated depreciation and amortization 1,122,490 1,105,767 $ 513,765 $ 531,687 Depreciation expense attributed to property, plant and equipment was $21.7million in the three months ended June 30, 2009 and $23.2million in the three months ended June 30, 2008. |
6090 - INCOME TAXES
6090 - INCOME TAXES | |
3 Months Ended
Jun. 30, 2009 USD / shares | |
Income Taxes | |
Income Taxes | (10)Income Taxes The provision for income taxes reflects tax on foreign earnings and federal and state tax on U.S. earnings.The Company had an effective tax rate of 16.2% for the three-month period ended June 30, 2009 and 18.1% for the three-month period ended June 30, 2008.The Company's effective tax rate is lower than statutory ratesin the U.S. due primarily to its mix of earnings in foreign jurisdictions with lower tax rates. At March31, 2009, the Company had $70.1 million of unrecognized tax benefits.Unrecognized tax benefits increased by $2.6 million in the three months ended June 30, 2009 compared to the March 31, 2009 balances as a result of the accrual for uncertain tax positions and the accrual of deficiency interest on these positions. The Company adopted FSP APB 14-1 in the quarter ended June 30, 2009 as described in Note 2.As a result of the adoption of this pronouncement, the Company recorded a deferred tax liability of $313.2million associated with future non-cash interest deductions that will be recorded in the financial statements with no corresponding tax deduction. The Company files U.S. federal, U.S. state, and foreign income tax returns. For U.S. federal, and in general for U.S. state tax returns, the fiscal 2002 through fiscal 2004 and fiscal 2006 through fiscal 2009 tax years remain open for examination by tax authorities. For foreign tax returns, the Company is generally no longersubject to income tax examinations for years prior to fiscal 2002. The Company recognizes liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on its estimate of whether, and the extent to which, additional tax payments are more likely than not. The Company believes that it maintains adequate reserves to offset any potential income tax liabilities that may ariseupon final resolution of matters for open tax years. The U.S. IRS is currently auditing the Company's fiscal years ended March 31, 2002, 2003, 2004, 2006, 2007 and 2008.The Company believes that it has appropriate support for the income tax positions taken on its tax returns and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. If such amounts ultimately prove to be unnecessary, the resulting reversal of such reserves would result in tax benefits being recorded in the period the reserves are no longer deemed necessary. If such amounts prove to be less than an ultimate assessment, a future charge to expense would be recorded in the period in which the assessmentis determined. Although the timing of the resolution and/or closure on audits is highly uncertain, the Company does not believe it is reasonably possible that its unrecognized tax benefits would materially change in the next 12months. |
6100 - 2.125% JUNIOR SUBORDINAT
6100 - 2.125% JUNIOR SUBORDINATED CONVERTIBLE DEBENTURES | |
3 Months Ended
Jun. 30, 2009 USD / shares | |
Junior Subordinated Convertible Debentures | |
Junior Subordinated Convertible Debentures | (11)2.125% Junior Subordinated Convertible Debentures In December 2007, the Company issued $1.15 billion principal amount of 2.125% junior subordinated convertible debentures due December 15, 2037, to two initial purchasers in a private offering.The debentures are subordinated in right of payment to any future senior debt of the Company and are effectively subordinated in right ofpayment to the liabilities of the Company's subsidiaries.The debentures are convertible, subject to certain conditions, into shares of the Company's common stock at an initial conversion rate of 29.2783 shares of common stock per $1,000 principal amount of debentures, representing an initial conversion price of approximately $34.16 per share of common stock.As of June 30, 2009, none of the conditions allowing holders of the debentures to convert had been met.The conversionrate will be subject to adjustment for certain events as outlined in the indenture governing the debentures, including in the event the Company pays a cash dividend on its common stock, but will not be adjusted for accrued interest.As a result of a cash dividend of $0.339 per share paid in June 2009, the conversion rate was adjusted to 31.7108 shares of common stock per $1,000 of principal amount of debentures, representing a conversion price of approximately $31.53 per share of common stock.TheCompany received net proceeds of $1,127.0 million upon its initial sale of the debentures after deduction of issuance costs of $23.0 million.The debt issuance costs were allocated to the liability and equity components of the debentures, described in further detail below.Based on this allocation, $6.6 million was recorded in long-term other assets and is being amortized to interest expense over 30 years, and $16.4 million was recorded as a reduction of additional paid-in capital. Interest is payable in cash semiannually in arrears on June 15 and December 15, beginning on June 15, 2008.Interest expense related to cash payments of interest for the first quarter of fiscal 2010 totaled $6.1 million and was included in interest expense on the condensed consolidated statements of income.The debentures also have a contingent interest component that will require the Company to pay interest during any semiannual interest period if the average trading price of the debenture is greater or less than certain thresholds beginning with the semi-annual interest period commencing on December 15, 2017 (the maximum amount of contingent interest that will accrue is 0.50% of such average trading price per year) and upon the occurrence of certain events, as outlined in the indenture governing the debentures. On or after December 15, 2017, the Company may redeem all or part of the debentures for the principal amount plus any accrued and unpaid interest if the closing price of the Company's common stock has been at least 150% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading-day period prior tothe date on which the Company provides notice of redemption. Prior to September 1, 2037, holders of the debentures may convert their debentures only upon the occurrence of certain |
6105 - DERIVATIVE INSTRUMENTS
6105 - DERIVATIVE INSTRUMENTS | |
3 Months Ended
Jun. 30, 2009 USD / shares | |
Derivative Instruments | |
Derivative Instruments | (12)Derivative Instruments The Company has international operations and is thus subject to foreign currency rate fluctuations.To manage the risk of changes in foreign currency rates, the Company periodically enters into derivative contracts comprised offoreign currency forward contracts to hedge its asset and liability foreign currency exposureand a portion of its foreign currency operating expenses.Approximately 99% of the Company's sales are U.S. Dollar denominated.To date, the exposure related to foreign exchange rate volatility has not been material to the Company's operating results.As of June 30, 2009 and March 31, 2009, the Company had no foreign currency derivatives outstanding.The Company recognized an immaterial amount of net realized gains on foreign currency derivatives in the three monthsended June 30, 2009. |
6110 - COMPREHENSIVE INCOME
6110 - COMPREHENSIVE INCOME | |
3 Months Ended
Jun. 30, 2009 USD / shares | |
Comprehensive Income | |
Comprehensive Income | (13) Comprehensive Income Comprehensive income consists of net income offset by net unrealized gains and losses on available-for-sale investments.The components of other comprehensive income and related tax effects were as follows (amounts in thousands): Three Months Ended June 30, 2009 2008 Change in unrealized gains and losses on investments, net of tax effect of $543, and $874, respectively $ 30 $ 3,219 Comprehensiveincome was $27.3 million and $73.1 million for the three months ended June 30, 2009 and June 30, 2008, respectively. |
6120 - EMPLOYEE BENEFIT PLANS
6120 - EMPLOYEE BENEFIT PLANS | |
3 Months Ended
Jun. 30, 2009 USD / shares | |
Employee Benefit Plans | |
Employee Benefit Plans | (14) Employee Benefit Plans Share-Based Compensation Expense The following table presents details of share-based compensation expense resulting from the application of SFAS No. 123 (revised 2004), Share-Based Payments (SFAS 123R) (amounts in thousands): Three Months Ended June 30, 2009 2008 Cost of sales $ 1,710 (1) $ 1,625 (1) Research and development 2,989 2,435 Selling, general and administrative 4,299 3,639 Pre-tax effect of share-based compensation 8,998 7,699 Income tax benefit 1,170 1,393 Net income effect of share-based compensation $ 7,828 $ 6,306 (1) During the three months ended June 30, 2009, $1.8 million was capitalized to inventory and $1.7million of previously capitalized inventory was sold.During the three months ended June 30, 2008, $1.4million was capitalized to inventory and $1.6 million of previously capitalized inventory was sold. The amount of unearned share-based compensation currently estimated to be expensed in the remainder of fiscal 2010 through fiscal 2014 related to unvested share-based payment awards at June 30, 2009 is $55.8million.The weighted average period over which the unearned share-based compensation is expected to be recognized isapproximately 2.31 years. Combined Incentive Plan Information The total intrinsic value of restricted stock units (RSUs) which vested during the three months ended June 30, 2009 was $2.5million.The aggregate intrinsic value of RSUs outstanding at June 30, 2009 was $88.4million, calculated based on the closing price of the Company's common stock of $22.55 per share on June 30, 2009.At June 30, 2009, the weighted average remaining expense recognition period was 2.40 years. The weighted average fair value per share of the RSUs awarded is calculated based on the fair market value of the Company's common stock on the respective grant dates discounted for the Company's expected dividend yield.The weighted average fair value per share of RSUs awarded in the three months ended June 30, 2009 and 2008 was$17.18 and $28.07, respectively. The total intrinsic value of options exercised during the three months ended June 30, 2009 was $0.4million.This intrinsic value represents the difference between the fair market value of the Company's common stock on the date of exercise and the exercise price of each equity award. The aggregate intrinsic value of options outstanding and options exercisable at June 30, 2009 was $11.2million.The aggregate intrinsic values were calculated based on the closing price of the Company's common stock of $22.55 per share on June30, 2009. For the three months ended June 30, 2009 and 2008, the number of option shares exercisable was 8,884,803 and 8,335,404, respectively, and the weighted average exercise price per share was $24.06 and $22.51, respectively. There were no stock options granted in the three-month periods ended June 30, 2009 and 2008. |
6130 - NET INCOME PER COMMON SH
6130 - NET INCOME PER COMMON SHARE | |
3 Months Ended
Jun. 30, 2009 USD / shares | |
Net Income Per Common Share | |
Net Income Per Common Share | (15) Net Income Per Common Share The following table sets forth the computation of basic and diluted net income per common share (in thousands, except per share amounts): Three Months Ended June 30, 2009 As adjusted (Note 2) 2008 Net income $ 27,368 $ 75,547 Weighted average common shares outstanding 182,856 184,663 Dilutive effect of stock options and RSUs 2,670 6,386 Dilutive effect of convertible debt --- 1,178 Weighted average common and potential common shares outstanding 185,526 191,049 Basic net income per common share $ 0.15 $ 0.41 Diluted net income per common share $ 0.15 $ 0.40 Diluted net income per common share for the three months ended June 30, 2009 does not include any incremental shares issuable upon the exchange of the debentures (see Note 11).The three-month period ended June 30, 2008 includes 1,177,781 incremental shares issuable upon the exchange of the debentures.The debentures have no impact on diluted net income per common share unless the average price of the Company's common stock exceeds the conversion price because the principal amount of the debentures will be settled in cash upon conversion.Prior to conversion, the Company will include, in the diluted net income per common share calculation, the effect of the additional shares that may be issued when the Company's common stock price exceeds the conversion price using the treasury stock method.The weighted average conversion price per share used in calculating the dilutive effect of the convertible debt for the three months ended June 30, 2009 was $31.82. Weighted average common shares exclude the effect of anti-dilution option shares.As of the three-month period ended June 30, 2009, the number of option shares that were antidilutive was 6,444,475.As of the three-month period ended June 30, 2008, the number of option shares that were antidilutive was 77,931. |
6140 - STOCK REPURCHASE
6140 - STOCK REPURCHASE | |
3 Months Ended
Jun. 30, 2009 USD / shares | |
Stock Repurchase | |
Stock Repurchase | (16) Stock Repurchase During the three months ended June 30, 2009, the Company did not repurchase any of its shares of common stock.During the three months ended June 30, 2008, the Company purchased 0.7 million shares of its common stock for a total of $23.6 million. As of June 30, 2009, approximately 35.9million shares remained as treasury shares with the balance of the shares being used to fund share issuance requirements under the Companys equity incentive plans. The timing and amount of future repurchases will depend upon market conditions,interest rates, and corporate considerations. |
6150 - DIVIDENDS
6150 - DIVIDENDS | |
3 Months Ended
Jun. 30, 2009 USD / shares | |
Dividends | |
Dividends | (17) Dividends On October 28, 2002, the Company announced that its Board of Directors had approved and instituted a quarterly cash dividend on its common stock.A quarterly cash dividend of $0.339 per share was paid on June 4, 2009 in the aggregate amount of $62.0million.A quarterly cash dividend of $0.339 per share was declaredon August 6, 2009 and will be paid on September 3, 2009 to shareholders of record as of August 20, 2009.The Company expects the September 2009 payment of its quarterly cash dividend to be approximately $62.2million. |
Document Information
Document Information | |
3 Months Ended
Jun. 30, 2009 USD / shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Document Period End Date | 2009-06-30 |
Amendment Flag | false |
Entity Information
Entity Information (USD $) | |||
3 Months Ended
Jun. 30, 2009 | Jul. 31, 2009
| Sep. 30, 2008
| |
Entity Information [Line Items] | |||
Entity Registrant Name | Microchip Technology Incorporated | ||
Entity Central Index Key | 0000827054 | ||
Current Fiscal Year End Date | --03-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $5,215,717,918 | ||
Entity Common Stock, Shares Outstanding | 182,951,234 |