Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Apr. 02, 2016 | Apr. 30, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | VIAVI SOLUTIONS INC. | |
Entity Central Index Key | 912,093 | |
Document Type | 10-Q | |
Document Period End Date | Apr. 2, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --07-02 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 232,516,228 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 02, 2016 | Mar. 28, 2015 | Apr. 02, 2016 | Mar. 28, 2015 | |
Revenues: | ||||
Product revenue | $ 198.5 | $ 186.6 | $ 607.1 | $ 574.1 |
Service revenue | 21.9 | 25.8 | 75.1 | 80 |
Total net revenues | 220.4 | 212.4 | 682.2 | 654.1 |
Cost of revenues: | ||||
Product cost of revenues | 70.5 | 62 | 209.6 | 190.3 |
Service cost of revenues | 14.5 | 14.4 | 46 | 48.5 |
Amortization of acquired technologies | 4.1 | 9 | 13 | 26.3 |
Total cost of revenues | 89.1 | 85.4 | 268.6 | 265.1 |
Gross profit | 131.3 | 127 | 413.6 | 389 |
Operating expenses: | ||||
Research and development | 40 | 42.1 | 126 | 127.9 |
Selling, general and administrative | 80.6 | 95.5 | 261.3 | 285.2 |
Amortization of other intangibles | 3.6 | 4.8 | 11.1 | 14.7 |
Restructuring and related charges | (0.1) | 7.8 | 1.7 | 18 |
Total operating expenses | 124.1 | 150.2 | 400.1 | 445.8 |
Income (loss) from operations | 7.2 | (23.2) | 13.5 | (56.8) |
Interest and other income (expense), net | 0.8 | 0.3 | 1.4 | 1.2 |
Gain on sale of investments | 39.8 | 0.1 | 39.8 | 0.1 |
Interest expense | (9.1) | (8.2) | (26.7) | (24.7) |
Income (loss) from continuing operations before taxes | 38.7 | (31) | 28 | (80.2) |
Provision for income taxes | 11.3 | 4.8 | 10.9 | 19.1 |
Income (loss) from continuing operations, net of taxes | 27.4 | (35.8) | 17.1 | (99.3) |
Income (loss) from discontinued operations, net of taxes | 5 | 22.6 | (45.4) | 51.3 |
Net income (loss) | $ 32.4 | $ (13.2) | $ (28.3) | $ (48) |
Net income (loss) per share from - basic and diluted: | ||||
Continuing operations (in dollars per share) | $ 0.12 | $ (0.16) | $ 0.07 | $ (0.43) |
Discontinued operations (in dollars per share) | 0.02 | 0.10 | (0.19) | 0.22 |
Net income (loss) per share (in dollars per share) | $ 0.14 | $ (0.06) | $ (0.12) | $ (0.21) |
Shares used in per share calculation - basic (in shares) | 232 | 233.2 | 234.4 | 232.1 |
Shares used in per share calculation - diluted (in shares) | 234.6 | 233.2 | 237.4 | 232.1 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 02, 2016 | Mar. 28, 2015 | Apr. 02, 2016 | Mar. 28, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 32.4 | $ (13.2) | $ (28.3) | $ (48) |
Other comprehensive income (loss): | ||||
Net change in cumulative translation adjustment, net of tax | 3.4 | (27.1) | (18.4) | (63) |
Net change in available-for-sale investments, net of tax: | ||||
Unrealized holding gains (losses) arising during period | 48.5 | 0.1 | 201.6 | (0.4) |
Less: reclassification adjustments included in Net income (loss) | (38.8) | (38.8) | 0 | |
Net change in defined benefit obligation, net of tax: | ||||
Amortization of actuarial losses | 0.2 | 0.1 | 0.5 | 0.4 |
Net change in Accumulated other comprehensive income (loss) | 13.3 | (26.9) | 144.9 | (63) |
Comprehensive income (loss) | $ 45.7 | $ (40.1) | $ 116.6 | $ (111) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Apr. 02, 2016 | Jun. 27, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 437.1 | $ 334.5 |
Short-term investments | 555.8 | 464.9 |
Restricted cash | 12.1 | 26.2 |
Accounts receivable, net (Note 6) | 151.9 | 152.3 |
Inventories, net | 52.5 | 53.8 |
Prepayments and other current assets | 34.7 | 38.2 |
Current assets of discontinued operations | 0 | 310.2 |
Total current assets | 1,244.1 | 1,380.1 |
Property, plant and equipment, net | 134.4 | 149.2 |
Goodwill | 245.3 | 255.5 |
Intangibles, net | 69.4 | 90.6 |
Deferred income taxes | 113 | 117.3 |
Other non-current assets | 18.6 | 20.9 |
Non-current assets of discontinued operations | 0 | 204.2 |
Total assets | 1,824.8 | 2,217.8 |
Current liabilities: | ||
Accounts payable | 39.9 | 42 |
Accrued payroll and related expenses | 46.2 | 52.6 |
Income taxes payable | 14.5 | 3.1 |
Deferred revenue | 87.9 | 80.6 |
Accrued expenses | 27.3 | 23.7 |
Other current liabilities | 17.7 | 43.5 |
Current liabilities of discontinued operations | 0 | 130 |
Total current liabilities | 233.5 | 375.5 |
Long-term debt | 581.5 | 561.6 |
Other non-current liabilities | 172.4 | 168.4 |
Non-current liabilities of discontinued operations | $ 0 | $ 10.9 |
Commitments and contingencies (Note 16) | ||
Stockholders’ equity: | ||
Preferred Stock, $0.001 par value; 1 million shares authorized; 1 share at April 2, 2016 and June 27, 2015, issued and outstanding | $ 0 | $ 0 |
Common Stock, $0.001 par value; 1 billion shares authorized; 232 million shares at April 2, 2016 and 235 million shares at June 27, 2015, issued and outstanding | 0.2 | 0.2 |
Additional paid-in capital | 70,051.6 | 70,022.7 |
Accumulated deficit | (69,303.5) | (68,873.5) |
Accumulated other comprehensive income (loss) | 89.1 | (48) |
Total stockholders’ equity | 837.4 | 1,101.4 |
Total liabilities and stockholders’ equity | $ 1,824.8 | $ 2,217.8 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Apr. 02, 2016 | Jun. 27, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred Stock, shares issued | 1 | 1 |
Preferred Stock, shares outstanding | 1 | 1 |
Common Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common Stock, shares issued | 232,000,000 | 235,000,000 |
Common Stock, shares outstanding | 232,000,000 | 235,000,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | ||
Apr. 02, 2016 | Mar. 28, 2015 | ||
OPERATING ACTIVITIES: | |||
Net income (loss) | $ (28.3) | $ (48) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation expense | 29.8 | 60.3 | |
Amortization of acquired technologies and other intangibles | 24.7 | 47 | |
Stock-based compensation | 35.6 | 50.3 | |
Amortization of debt issuance costs and accretion of debt discount | 21.4 | 20.4 | |
Amortization of discount and premium on investments, net | 0.9 | 2.7 | |
Gain on sale of investments | (39.8) | (0.1) | |
Other | 1.3 | 4.6 | |
Changes in operating assets and liabilities, net of impact of Lumentum distribution: | |||
Accounts receivable | 22.6 | (14.3) | |
Inventories | (2.2) | (6.7) | |
Other current and non-currents assets | 3.7 | (5.2) | |
Accounts payable | (8.4) | (17.6) | |
Income taxes payable | 8.3 | (15.6) | |
Deferred revenue, current and non-current | 8.1 | 2.4 | |
Deferred taxes, net | 7.6 | 13.6 | |
Accrued payroll and related expenses | (22) | (38.7) | |
Accrued expenses and other current and non-current liabilities | (28.3) | (20.6) | |
Net cash provided by operating activities | 35 | 34.5 | |
INVESTING ACTIVITIES: | |||
Purchases of available-for-sale investments | (334.1) | (460) | |
Maturities of available-for-sale investments | 330.1 | 450.2 | |
Sales of available-for-sale investments | 217.3 | 69.5 | |
Changes in restricted cash | 14.1 | 5 | |
Capital expenditures | (26.6) | (68.7) | |
Proceeds from the sale of assets | 5 | 5.2 | |
Acquisition of a business | (0.9) | 0 | |
Net cash provided by investing activities | 204.9 | 1.2 | |
FINANCING ACTIVITIES: | |||
Proceeds from sale of Lumentum Holdings Inc. Series A Preferred Stock | 35.8 | 0 | |
Cash contribution to Lumentum Holdings Inc. | (137) | 0 | |
Repurchase and retirement of common stock | (40) | (4.7) | |
Payment of financing obligations | (5.7) | (23.1) | |
Proceeds from exercise of employee stock options and employee stock purchase plan | 3 | 14 | |
Net cash used in financing activities | (143.9) | (13.8) | |
Effect of exchange rates on cash and cash equivalents | (6.8) | (19.9) | |
Net increase in cash and cash equivalents | 89.2 | 2 | |
Cash and cash equivalents at the beginning of the period | 347.9 | [1] | 297.2 |
Cash and cash equivalents at the end of the period | $ 437.1 | $ 299.2 | |
[1] | Cash and cash equivalents at June 27, 2015 included $13.4 million in current assets of the discontinued operations of Lumentum Holdings Inc. |
CONSOLIDATED STATEMENTS OF CAS7
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Millions | Jun. 27, 2015USD ($) |
Spinoff | Lumentum | |
Cash and cash equivalents included in discontinued operations | $ 13.4 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Apr. 02, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation The financial information for Viavi Solutions Inc. (“Viavi” also referred to as “the Company”, “we”, “our” and “us”) as of April 2, 2016 and for the three and nine months ended April 2, 2016 and March 28, 2015 is unaudited, and includes all normal and recurring adjustments Company management (“Management”) considers necessary for a fair statement of the financial information set forth herein, in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, such information does not include all of the information and footnotes required by U.S. GAAP for annual financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 27, 2015 . The balance sheet as of June 27, 2015 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The results for the three and nine months ended April 2, 2016 and March 28, 2015 may not be indicative of results for the year ending July 2, 2016 or any future periods. Fiscal Years The Company utilizes a 52 - 53 week fiscal year ending on the Saturday closest to June 30th. The Company’s fiscal 2016 is a 53 -week year ending on July 2, 2016 . The Company’s fiscal 2015 was a 52 -week year ending on June 27, 2015 . Lumentum Separation On August 1, 2015 (the “Separation Date”), Viavi, formerly known as JDS Uniphase Corporation (“JDSU”), completed the distribution of approximately 80.1% of the outstanding shares of Lumentum Holdings Inc. (“Lumentum”) common stock (the “Distribution”). Concurrent with the Distribution, JDSU was renamed Viavi Solutions Inc. and, at the time of the Distribution, retained ownership of approximately 19.9% of Lumentum’s outstanding shares. Lumentum was formed to hold Viavi’s communications and commercial optical products business segment (“CCOP”) and the WaveReady product line and, as a result of the Distribution, is now an independent public company trading under the symbol “LITE” on The Nasdaq Stock Market (“NASDAQ”). The Distribution was made to Viavi’s stockholders of record as of the close of business on July 27, 2015 (the “Record Date”), who received one share of Lumentum common stock for every five shares of Viavi common stock held as of the close of business on the Record Date and not sold prior to August 4, 2015, the ex-dividend date. The historical results of operations and the financial position have been recasted to present the Lumentum business as discontinued operations as described in “ Note 3. Discontinued Operations .” Unless noted otherwise, discussion in the Notes to Consolidated Financial Statements pertain to continuing operations. Principles of Consolidation The amounts presented in the consolidated financial statements have been prepared in accordance with U.S. GAAP and include the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements, the reported amount of Net revenues and expenses and the disclosure of commitments and contingencies during the reporting periods. The Company bases estimates on historical experience and on various assumptions about the future believed to be reasonable based on available information. The Company’s reported financial position or results of operations may be materially different under changed conditions or when using different estimates and assumptions, particularly with respect to significant accounting policies. If estimates or assumptions differ from actual results, subsequent periods are adjusted to reflect more current information. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 9 Months Ended |
Apr. 02, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently Issued Accounting Pronouncements | Note 2. Recently Issued Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued guidance which simplifies several aspects of accounting for share-based payment award transactions including income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The guidance is effective for the Company in the first quarter of fiscal 2018 and earlier adoption is permitted. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In March 2016, the FASB issued guidance that clarifies the steps required when assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to the economic characteristics and risks of their debt instrument. The guidance is effective for the Company in the first quarter of fiscal 2018. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In February 2016, the FASB issued guidance related to how an entity should recognize lease assets and lease liabilities. The guidance specifies that an entity who is a lessee under lease agreements should recognize lease assets and lease liabilities for those leases classified as operating leases under previous FASB guidance. Accounting for leases by lessors is largely unchanged under the new guidance. The guidance requires a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The guidance is effective for the Company in the first quarter of fiscal 2020. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In January 2016, the FASB issued guidance that requires an entity to measure equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, it requires entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes and requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset. It also eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The guidance is effective for the Company in the first quarter of fiscal 2019. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In November 2015, the FASB issued guidance requiring deferred tax assets and liabilities, and any related valuation allowance, to be classified as non-current on the balance sheet. This classification eliminates the need to separately identify the net current and net non-current deferred tax asset or liability in each jurisdiction. The Company elected to prospectively adopt the guidance in the beginning of the second quarter of fiscal 2016. Refer to “ Note 12. Income Taxes ” for more information regarding the impact of adopting this guidance. In July 2015, the FASB issued guidance to change the subsequent measurement of inventory from lower of cost or market to lower of cost and net realizable value. The guidance is effective for the Company in the first quarter of fiscal 2018. Earlier application is permitted as of the beginning of an interim or annual reporting period. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In May 2015, the FASB issued guidance to remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using net asset value per share practical expedient. The guidance is effective for the Company in the first quarter of fiscal 2017 and may apply to certain pension assets. The guidance will be applied retrospectively and earlier adoption is permitted. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In April 2015, the FASB issued new authoritative guidance to provide a practical expedient that permits the entity to measure defined benefit plan assets and obligations using the month-end that is closest to the entity’s fiscal year-end and apply that practical expedient consistently from year to year. Prospective application is required and early adoption is permitted. This guidance is effective for the Company in the first quarter of fiscal 2017 and may apply to the qualified and the non-qualified pension plans in certain countries. The Company does not expect the adoption of this standard will have a material effect on the consolidated financial statements. In April 2015, the FASB issued new authoritative guidance to simplify the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding liability, consistent with debt discounts or premiums. This guidance is effective for the Company in the first quarter of fiscal 2017 for its convertible debt, and will be applied retrospectively. The consolidated balance sheet of each individual period presented will be adjusted to reflect the period-specific effects of applying this new guidance. In May 2014, the FASB issued new authoritative guidance related to revenue recognition. This guidance will replace current U.S. GAAP guidance on this topic and eliminate industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance allows for either full retrospective adoption or modified retrospective adoption. The FASB deferred the effective date for this guidance by one year to December 15, 2017 for annual reporting periods beginning after such date. Earlier application of this guidance is permitted but not before the original date of December 15, 2016. In March, April and May 2016, the FASB clarified the implementation guidance on principal versus agent, identifying performance obligations, licensing, collectibility, noncash consideration, presentation of sales tax, and other transition matters. The new guidance is effective for the Company in the first quarter of fiscal 2019. The Company is evaluating the impact that this new accounting guidance will have on its consolidated financial statements and related disclosures. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Apr. 02, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 3. Discontinued Operations On August 1, 2015, the Company completed the separation of the Lumentum business (the “Separation”) and made a tax-free distribution of approximately 80.1% of the outstanding shares of Lumentum common stock to Viavi shareholders who received one share of Lumentum common stock for every five shares of Viavi common stock held as of the close of business on July 27, 2015 (the “Record Date”) and not sold prior to August 4, 2015 (the “ex-dividend date”). In connection with the Separation Viavi agreed to contribute $137.6 million of total cash, of which $0.6 million remains to be contributed as of April 2, 2016 . As of the Distribution, Viavi retained ownership of approximately 19.9% , or 11.7 million shares, of Lumentum’s outstanding shares. Lumentum was formed to hold Viavi’s CCOP business and the Waveready product line. As a result of the Distribution, Lumentum is now an independent public company. In connection with the Separation, the Company entered into a Contribution Agreement, Separation and Distribution Agreement, a Tax Matters Agreement, Employee Matters Agreement, Securities Purchase Agreement, a Supply Agreement, and an Intellectual Property Matters Agreement with Lumentum and others. The Contribution Agreement identifies the assets to be transferred, the liabilities to be assumed and the contracts to be assigned and it provides for when and how these transfers, assumptions and assignments will occur. The Separation and Distribution Agreement governs the separation of the CCOP and Waveready business, the transfer of assets and other matters related to Viavi’s relationship with Lumentum. The Tax Matters Agreement governs the respective rights, responsibilities and obligations of Lumentum and Viavi with respect to tax liabilities and benefits, tax attributes, tax contests, tax returns, and certain other tax matters. The Employee Matters Agreement governs the compensation and employee benefit obligations with respect to the current and former employees and non-employee directors of Lumentum and Viavi, and generally allocates liabilities and responsibilities relating to employee compensation, benefit plans and programs. The Employee Matters Agreement provides that employees of Lumentum will no longer participate in benefit plans sponsored or maintained by Viavi. The Securities Purchase Agreement with the Company, Lumentum and Amada Holdings Co., Ltd. (“Amada”) set forth terms whereby the Company received 40,000 shares of Lumentum’s Series A Preferred Stock (“Series A Preferred Stock”) pursuant to a binding commitment to sell the Series A Preferred Stock to Amada following the Separation. Upon Separation, in connection with the agreement, during the first quarter of fiscal 2016 the Company sold 35,805 shares of the Series A Preferred Stock to Amada for $35.8 million and the remaining 4,195 shares of the Series A Preferred Stock were canceled. The $35.8 million is included as a part of financing activities in the Statement of Cash Flows. The Supply Agreement outlines that Viavi will supply test equipment to Lumentum and Lumentum will supply components related to the Company’s metro, fiber and optical product lines and development services related to smart transceivers. The most significant component of the Supply Agreement is $15 million related to the sale of certain optical test equipment to Lumentum during the 12 month period from the date of the agreement through July 31, 2016, of which the company recorded $4.4 million and $12.7 million of net revenue during the three and nine months ended April 2, 2016 , respectively. The Intellectual Property Matters Agreement outlines the intellectual property rights and technology transferred to Lumentum upon the Separation, as well as the intellectual property and technology both companies can license from each other. In addition it outlines non-compete restrictions between Viavi and Lumentum. As the separation of the Lumentum business represents a strategic shift that has and will have a major effect on the Company’s operations and financial results, the results of operations and net assets of the Lumentum business are presented separately as discontinued operations for the three and nine months ended April 2, 2016 and March 28, 2015 and as of June 27, 2015, in accordance with the authoritative guidance. Lumentum is now a stand-alone public company that separately reports it financial results. Due to the difference between the basis of presentation for discontinued operations and the basis of presentation as a stand-alone company, the financial results of Lumentum included within discontinued operations for the Company may not be indicative of actual financial results of Lumentum as a stand-alone company. The following table presents the carrying amounts of the major classes of the assets and liabilities of the Lumentum business which are presented as discontinued operation on the Consolidated Balance Sheets (in millions) . June 27, 2015 Assets: Cash and cash equivalents $ 13.4 Accounts receivable, net 150.2 Inventories, net 100.0 Prepayments and other current assets 46.6 Current assets of discontinued operations 310.2 Property, plant and equipment, net 145.4 Goodwill 5.6 Intangibles, net 21.8 Other non-current assets 31.4 Non-current assets of discontinued operations 204.2 Total assets of discontinued operations $ 514.4 Liabilities: Accounts payable $ 79.1 Accrued payroll and related expenses 18.3 Income taxes payable 3.7 Accrued expenses 17.5 Other current liabilities 11.4 Current liabilities of discontinued operations 130.0 Non-current liabilities of discontinued operations 10.9 Total liabilities of discontinued operations $ 140.9 In connection with the Separation, $7.8 million of accumulated other comprehensive loss, net of income taxes, related to foreign currency translation adjustments and the pension plan obligation was transferred to Lumentum on the Separation Date. Refer to “ Note 5. Accumulated Other Comprehensive Income (Loss) ” for more information. The Company also transferred deferred tax assets of $29.5 million , deferred tax liabilities of $1.0 million , current income tax payables of $3.3 million , an income tax receivable of $1.3 million and other long-term liabilities related to uncertain tax positions totaling $0.1 million on the Separation date. The Company utilized approximately $1.0 billion of federal net operating losses to offset income recognized as a result of the Separation and the license of Lumentum’s intellectual property to a foreign subsidiary. The removal of Lumentum’s net assets and equity related adjustments upon the Separation are presented as an increase of Viavi's accumulated deficit and represents a non-cash financing activity, excluding the cash transferred. Refer to “ Note 14. Stock-Based Compensation ” for information on modifications to stock-based compensation awards as a result of the Distribution. The following table summarizes results from discontinued operations of the Lumentum business included in the condensed Consolidated Statement of Operations (in millions) : Three Months Ended (1) Nine Months Ended March 28, 2015 April 2, 2016 March 28, 2015 Net revenues $ 198.3 $ 66.5 $ 627.3 Cost of revenues 139.1 49.8 426.5 Amortization of acquired technologies 1.9 0.6 5.7 Gross profit 57.3 16.1 195.1 Operating expenses: Research and development 34.6 12.5 104.4 Selling, general and administrative 21.3 24.7 57.3 Restructuring charges 0.5 0.1 2.9 Total operating expenses 56.4 37.3 164.6 Income (loss) from operations 0.9 (21.2 ) 30.5 Interest and other income (expense), net (0.5 ) — (0.8 ) Income (loss) before income taxes 0.4 (21.2 ) 29.7 (Benefit from) provision for income taxes (22.2 ) 24.4 (21.6 ) Net income (loss) from discontinued operations $ 22.6 $ (45.6 ) $ 51.3 (1) Net income from discontinued operations for the three months ended April 2, 2016 of $5.0 million is comprised of costs to complete the separation offset by a benefit attributable to income taxes from discontinued operations of $6.1 million . No income or expense relating to the Lumentum business has been recorded after the separation from Viavi on August 1, 2015. During the nine months ended April 2, 2016 , the income tax provision for discontinued operations of $24.4 million , included approximately $7.6 million cash taxes that are due to federal and state authorities as a result of the Separation. In addition, approximately $17.1 million of the income tax provision for discontinued operations related to the income tax intraperiod tax allocation rules in relation to continuing operations and other comprehensive income. Net (loss) income from discontinued operations also includes costs incurred by the Company to separate Lumentum such as transaction charges, advisory and consulting fees. Net income (loss) from discontinued operations for the three and nine months ended April 2, 2016 included $1.1 million and $16.5 million of costs to complete the separation, respectively. Net income (loss) from discontinued operations for the three and nine months ended March 28, 2015 included $5.2 million and $8.9 million of costs to complete the separation, respectively. The following table presents supplemental cash flow information: depreciation expense, amortization expense, stock based compensation expense and capital expenditures of the Lumentum business (in millions) : Nine Months Ended April 2, 2016 March 28, 2015 Operating activities: Depreciation expense $ 3.7 $ 32.3 Amortization expense 0.6 6.0 Stock-based compensation expense 1.6 14.4 Investing activities: Capital expenditures $ 5.8 $ 34.0 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Apr. 02, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 4. Earnings Per Share The following table sets forth the computation of basic and diluted net income (loss) per share ( in millions, except per share data ): Three Months Ended Nine Months Ended April 2, 2016 March 28, 2015 April 2, 2016 March 28, 2015 Numerator: Income (loss) from continuing operations, net of taxes $ 27.4 $ (35.8 ) $ 17.1 $ (99.3 ) Income (loss) from discontinued operations, net of taxes 5.0 22.6 (45.4 ) 51.3 Net income (loss) $ 32.4 $ (13.2 ) $ (28.3 ) $ (48.0 ) Denominator: Weighted-average number of common shares outstanding Basic 232.0 233.2 234.4 232.1 Effect of dilutive securities from stock-based benefit plans 2.6 — 3.0 — Diluted 234.6 233.2 237.4 232.1 Net income (loss) per share - basic and diluted: Continuing operations $ 0.12 $ (0.16 ) $ 0.07 $ (0.43 ) Discontinued operations 0.02 0.10 (0.19 ) 0.22 Net income (loss) per share $ 0.14 $ (0.06 ) $ (0.12 ) $ (0.21 ) The following table sets forth the weighted-average potentially dilutive securities excluded from the computation of the diluted net income (loss) per share because their effect would have been anti-dilutive ( in millions ): Three Months Ended Nine Months Ended April 2, 2016 (2) March 28, 2015 (1)(2) April 2, 2016 (2) March 28, 2015 (1)(2) Stock options and ESPP 1.2 3.7 1.0 3.8 Restricted Stock Units 3.0 10.4 2.3 10.6 Total potentially dilutive securities 4.2 14.1 3.3 14.4 (1) As the Company incurred a net loss from continuing operations in the period, potential dilutive securities from employee stock options, employee stock purchase plan (“ESPP”) and Restricted Stock Units (“RSUs”) have been excluded from the diluted net loss per share computations as their effects were deemed anti-dilutive. (2) The Company’s 0.625% Senior Convertible 2033 Notes are not included in the table above. The par amount of convertible notes is payable in cash equal to the principal amount of the notes plus any accrued and unpaid interest and then the “in-the-money” conversion benefit feature at the conversion price above $11.28 per share is payable in cash, shares of the Company’s common stock or a combination of both. Refer to “ Note 10. Debts and Letters of Credit ” for more details. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Apr. 02, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Note 5. Accumulated Other Comprehensive Income (Loss) The Company’s accumulated other comprehensive income (loss) consists of the accumulated net unrealized gains and losses on available-for-sale investments, foreign currency translation adjustments and defined benefit obligations. For the nine months ended April 2, 2016 the changes in accumulated other comprehensive income (loss) by component net of tax were as follows ( in millions ): Unrealized (losses) on available-for sale investments (2) Foreign currency translation adjustments Defined benefit obligation, net of tax (3) Total Beginning balance as of June 27, 2015 $ (3.2 ) $ (29.2 ) $ (15.6 ) $ (48.0 ) Transferred to Lumentum (1) — (8.9 ) 1.1 (7.8 ) Other comprehensive (loss) income before reclassification 201.6 (18.4 ) — 183.2 Amounts reclassified from accumulated other comprehensive income (loss) (38.8 ) — 0.5 (38.3 ) Net current-period other comprehensive (loss) income 162.8 (18.4 ) 0.5 144.9 Ending balance as of April 2, 2016 $ 159.6 $ (56.5 ) $ (14.0 ) $ 89.1 (1) Amount represents the transfer of accumulated other comprehensive balances to Lumentum as of the Separation Date. Refer to “ Note 3. Discontinued Operations ” for more information. (2) Activity before reclassifications to the Consolidated Statements of Operations during the nine months ended April 2, 2016 primarily relates to a $205.3 million gross unrealized gain on the marketable equity securities of Lumentum held by Viavi, net of a $3.7 million income tax effect related to the intraperiod tax allocation rules. The amount reclassified out of accumulated other comprehensive income (loss) is primarily composed of a $39.7 million realized gain before tax during the three months ended April 2, 2016 from the sale of 2.5 million shares out of 11.7 million shares of the marketable equity securities of Lumentum held by Viavi upon Separation, net of a $1.0 million income tax effect related to the intraperiod tax allocation rules. The gain and the income tax effect are included in "Gain on sale of investments" and “ Provision for income taxes ,” respectively, in the Consolidated Statement of Operations for the three and nine months ended April 2, 2016 . (3) Amount represents the amortization of actuarial losses included as a component of Selling, general and administrative expense (“SG&A”) in the Consolidated Statement of Operations for the nine months ended April 2, 2016 . There was no tax impact. Refer to “ Note 15. Employee Pension and Other Benefit Plans ” for more details on the computation of net periodic cost for pension plans. |
Balance Sheet and Other Details
Balance Sheet and Other Details | 9 Months Ended |
Apr. 02, 2016 | |
Balance Sheet and Other Details | |
Balance Sheet and Other Details | Note 6. Balance Sheet and Other Details Accounts receivable reserves and allowances The components of accounts receivable reserves and allowances were as follows ( in millions ): June 27, 2015 Charged to Costs and Expenses Adjustments (1) April 2, 2016 Allowance for doubtful accounts $ 2.4 $ 0.1 $ (0.4 ) $ 2.1 Allowance for sales returns 0.7 2.7 (1.7 ) 1.7 Total accounts receivable reserves $ 3.1 $ 2.8 $ (2.1 ) $ 3.8 (1) Represents the effect of currency translation adjustments and write-offs of uncollectible accounts, net of recoveries. Inventories, net The components of Inventories, net were as follows ( in millions ): April 2, 2016 June 27, 2015 Finished goods $ 30.5 $ 31.5 Work in process 6.8 6.8 Raw materials 15.2 15.5 Inventories, net $ 52.5 $ 53.8 Prepayments and other current assets The components of Prepayments and other current assets were as follo ws ( in millions ): April 2, 2016 June 27, 2015 Prepayments $ 12.5 $ 15.7 Other current assets 22.2 22.5 Prepayments and other current assets $ 34.7 $ 38.2 Other current liabilities The components of Other current liabilities were as follows ( in millions ): April 2, 2016 June 27, 2015 Deferred compensation plan $ 2.4 $ 3.0 Warranty 2.6 2.3 Value-added tax 2.8 1.7 Restructuring 7.0 19.1 Deferred income taxes — 7.1 Other 2.9 10.3 Other current liabilities $ 17.7 $ 43.5 Other non-current liabilities The components of Other non-current liabilities were as follo ws ( in millions ): April 2, 2016 June 27, 2015 Pension and post-employment benefits $ 83.5 $ 86.9 Financing obligation 29.0 29.1 Restructuring accrual 5.3 8.2 Long-term deferred revenue 24.2 23.6 Other 30.4 20.6 Other non-current liabilities $ 172.4 $ 168.4 |
Investments and Fair Value Meas
Investments and Fair Value Measurements | 9 Months Ended |
Apr. 02, 2016 | |
Investments and Fair Value Measurements | |
Investments and Fair Value Measurements | Note 7. Investments and Fair Value Measurements The Company’s investments in marketable debt and equity securities were primarily classified as available-for-sale securities. As of April 2, 2016 , the Company’s available-for-sale securities were as follows ( in millions ): Amortized Cost/ Carrying Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt securities: U.S. treasuries $ 60.2 $ — $ — $ 60.2 U.S. agencies 29.1 — — 29.1 Municipal bonds and sovereign debt instruments 2.3 — — 2.3 Asset-backed securities 46.3 0.1 (0.4 ) 46.0 Corporate securities 206.8 0.1 (0.1 ) 206.8 Total debt securities 344.7 0.2 (0.5 ) 344.4 Marketable equity securities 78.8 165.5 — 244.3 Total available-for-sale securities $ 423.5 $ 165.7 $ (0.5 ) $ 588.7 The Company generally classifies debt securities as cash equivalents, short-term investments or other non-current assets based on the stated maturities; however, certain securities with stated maturities of longer than twelve months which are highly liquid and available to support current operations are also classified as short-term investments. As of April 2, 2016 , of the total fair value, $34.7 million was classified as cash equivalents, $309.1 million was classified as short-term investments and $0.6 million was classified as other non-current assets. Marketable equity securities consist of the Company’s ownership of Lumentum common stock retained in connection with the Separation. Refer to “ Note 3. Discontinued Operations ” for more information. These securities are stated at fair value, with unrealized gains and losses reported in other comprehensive income, net of tax and are classified as short-term investments on the Consolidated Balance Sheet as of April 2, 2016 at $244.3 million . The Company sold 2.5 million shares during the third quarter of fiscal 2016 and recognized a realized gain before tax of $39.7 million , net of a $1.0 million income tax effect related to the intraperiod tax allocation rules, reflected in "Gain on sale of investments" in the Consolidated Statements of Operations. In addition to the amounts presented above, as of April 2, 2016 , the Company’s short-term investments classified as trading securities related to the deferred compensation plan were $2.4 million , of which $0.4 million was invested in debt securities, $0.7 million was invested in money market instruments and funds and $1.3 million was invested in equity securities. Trading securities are reported at fair value, with the unrealized gains or losses resulting from changes in fair value recognized in Interest and other income (expense), net. During the three and nine months ended April 2, 2016 and March 28, 2015 , the Company recorded no other-than-temporary impairment charges in each respective period. As of April 2, 2016 , contractual maturities of the Company’s debt securities classified as available-for-sale securities were as follows ( in millions ): Amortized Cost/ Carrying Cost Estimated Fair Value Amounts maturing in less than 1 year $ 251.6 $ 251.6 Amounts maturing in 1 - 5 years 91.4 91.4 Amounts maturing in more than 5 years 1.7 1.4 Total debt available-for-sale securities $ 344.7 $ 344.4 As of June 27, 2015 , the Company’s available-for-sale securities were as follows ( in millions ): Amortized Cost/ Carrying Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt securities: U.S. treasuries $ 51.9 $ — $ — $ 51.9 U.S. agencies 96.0 — — 96.0 Municipal bonds and sovereign debt instruments 4.0 — — 4.0 Asset-backed securities 70.6 — (0.2 ) 70.4 Corporate securities 274.1 0.1 (0.1 ) 274.1 Total debt available-for-sale securities $ 496.6 $ 0.1 $ (0.3 ) $ 496.4 As of June 27, 2015 , of the total fair value, $33.7 million was classified as cash equivalents, $461.9 million was classified as short-term investments and $0.8 million was classified as other non-current assets. In addition to the amounts presented above, as of June 27, 2015 , the Company’s short-term investments classified as trading securities, related to the deferred compensation plan, were $3.4 million , of which $0.6 million was invested in debt securities, $0.7 million was invested in money market instruments and funds and $2.1 million was invested in equity securities. Trading securities are reported at fair value, with the unrealized gains or losses resulting from changes in fair value recognized in Interest and other income (expense), net. Fair Value Measurements Assets measured at fair value as of April 2, 2016 are summarized below ( in millions ): Fair value measurement as of April 2, 2016 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Assets: Debt available-for-sale securities U.S. treasuries $ 60.2 $ 60.2 $ — U.S. agencies 29.1 — 29.1 Municipal bonds and sovereign debt instruments 2.3 — 2.3 Asset-backed securities 46.0 — 46.0 Corporate securities 206.8 — 206.8 Total debt available-for-sale securities 344.4 60.2 284.2 Marketable equity securities 244.3 244.3 — Money market funds 273.7 273.7 — Trading securities 2.4 2.4 — Total assets (1) $ 864.8 $ 580.6 $ 284.2 (1) $ 293.5 million in cash and cash equivalents, $555.8 million in short-term investments, $11.1 million in restricted cash, and $4.4 million in other non-current assets on the Company’s Consolidated Balance Sheets. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. There is an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the assumptions about the factors that market participants would use in valuing the asset or liability. The Company’s cash and investment instruments are classified within Level 1 or Level 2 of the fair value hierarchy based on quoted prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. • Level 1 includes financial instruments for which quoted market prices for identical instruments are available in active markets. Level 1 assets of the Company include money market funds, U.S. Treasury securities and marketable equity securities as they are traded with sufficient volume and frequency of transactions. • Level 2 includes financial instruments for which the valuations are 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 2 instruments of the Company generally include certain U.S. and foreign government and agency securities, commercial paper, corporate and municipal bonds and notes, asset-backed securities, and foreign currency forward contracts. To estimate their fair value, the Company utilizes pricing models based on market data. The significant inputs for the valuation model usually include benchmark yields, reported trades, broker and dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data, and industry and economic events. • Level 3 includes financial instruments for which fair value is derived from valuation based on inputs that are unobservable and significant to the overall fair value measurement. As of June 27, 2015 and during the three and nine months ended April 2, 2016 and March 28, 2015 , the Company did not hold any Level 3 investment securities. Foreign Currency Forward Contracts The Company has foreign subsidiaries that operate and sell the Company’s products in various markets around the world. As a result, the Company is exposed to foreign exchange risks. The Company utilizes foreign exchange forward contracts and other instruments to manage foreign currency risk associated with foreign currency denominated monetary assets and liabilities, primarily certain short-term intercompany receivables and payables, and to reduce the volatility of earnings and cash flows related to foreign-currency transactions. The forward contracts, most with a term of less than 120 days, were transacted near quarter end; therefore, the fair value of the contracts as of both April 2, 2016 and June 27, 2015 is not material. The change in the fair value of these foreign currency forward contracts is recorded as gain or loss in the Company’s Consolidated Statements of Operations as a component of Interest and other income (expense), net. |
Goodwill
Goodwill | 9 Months Ended |
Apr. 02, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 8. Goodwill The following table presents the changes in goodwill allocated to the Company’s reportable segments (in millions) : Network Enablement Service Enablement Optical Security and Performance Products Total Balance as of June 27, 2015 $ 154.5 $ 92.7 $ 8.3 $ 255.5 Currency translation and other adjustments (2.7 ) (1.5 ) — (4.2 ) Goodwill allocation - WaveReady (1) (6.0 ) — — (6.0 ) Balance as of April 2, 2016 $ 145.8 $ 91.2 $ 8.3 $ 245.3 (1) Amount represents a release of the relative fair value of goodwill in our NE reporting unit related to the WaveReady products line, which is now a part of Lumentum as of the Separation Date. Refer to “ Note 3. Discontinued Operations ” for more information. The Company reviews goodwill for impairment during the fourth quarter of each fiscal year, or more frequently if events or circumstances indicate that an impairment loss may have occurred. In the fourth quarter of fiscal 2015, the Company completed the annual impairment test of goodwill with no goodwill impairments. There were no events or changes in circumstances which triggered an impairment review during the three and nine months ended months ended April 2, 2016 . |
Acquired Developed Technology a
Acquired Developed Technology and Other Intangibles | 9 Months Ended |
Apr. 02, 2016 | |
Acquired Developed Technology and Other Intangibles | |
Acquired Developed Technology and Other Intangibles | Note 9. Acquired Developed Technology and Other Intangibles The following tables present details of the Company’s acquired developed technology, customer relationships and other intangibles ( in millions ): As of April 2, 2016 Gross Carrying Amount Accumulated Amortization Net Acquired developed technology $ 421.9 $ (385.1 ) $ 36.8 Customer relationships 175.4 (144.0 ) 31.4 Other 19.3 (18.9 ) 0.4 Total intangibles subject to amortization 616.6 (548.0 ) 68.6 In-process research and development assets 0.8 — 0.8 Total intangibles $ 617.4 $ (548.0 ) $ 69.4 As of June 27, 2015 Gross Carrying Amount Accumulated Amortization Net Acquired developed technology $ 418.9 $ (373.6 ) $ 45.3 Customer relationships 178.7 (135.8 ) 42.9 Other 19.5 (18.9 ) 0.6 Total intangibles subject to amortization 617.1 (528.3 ) 88.8 In-process research and development assets 1.8 — 1.8 Total intangibles $ 618.9 $ (528.3 ) $ 90.6 During the first quarter of fiscal 2016, the Company completed its in-process research and development (“IPR&D”) project related to the fiscal 2014 acquisition of Trendium. Accordingly, $1.8 million was transferred from indefinite life intangible assets to acquired developed technology intangible assets with a useful life of thirty-six months . The following table presents the amortization recorded relating to acquired developed technology, customer relationships and other intangibles ( in millions ): Three Months Ended Nine Months Ended April 2, 2016 March 28, 2015 April 2, 2016 March 28, 2015 Amortization of acquired developed technologies $ 4.1 $ 9.0 $ 13.0 $ 26.3 Amortization of other intangibles 3.6 4.8 11.1 14.7 Total amortization of intangible assets $ 7.7 $ 13.8 $ 24.1 $ 41.0 Based on the carrying amount of acquired developed technology, customer relationships and other intangibles as of April 2, 2016 , and assuming no future impairment of the underlying assets, the estimated future amortization is as follows ( in millions ): Fiscal Years Remainder of 2016 $ 7.6 2017 29.2 2018 20.8 2019 9.3 2020 1.3 Thereafter 0.4 Total amortization $ 68.6 The acquired developed technology, customer relationships and other intangibles balance are adjusted quarterly to record the effect of currency translation adjustments. |
Debts and Letters of Credit
Debts and Letters of Credit | 9 Months Ended |
Apr. 02, 2016 | |
Debt Disclosure [Abstract] | |
Debts and Letters of Credit | Note 10. Debts and Letters of Credit As of April 2, 2016 and June 27, 2015 , the Company’s long-term debt on the Consolidated Balance Sheets represented the carrying amount of the liability component of the 0.625% Senior Convertible Notes as discussed below. The following table presents the carrying amounts of the liability and equity components ( in millions ): April 2, 2016 June 27, 2015 Principal amount of 0.625% Senior Convertible Notes $ 650.0 $ 650.0 Unamortized discount of liability component (68.5 ) (88.4 ) Carrying amount of liability component $ 581.5 $ 561.6 Carrying amount of equity component (1) $ 134.4 $ 134.4 (1) Included in Accumulated paid-in-capital on the Consolidated Balance Sheets. The Company was in compliance with all debt covenants and held no short term debt as of April 2, 2016 and June 27, 2015 . 0.625% Senior Convertible Notes (“2033 Notes”) On August 21, 2013, the Company issued $650.0 million aggregate principal amount of 0.625% Senior Convertible Notes due 2033 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The proceeds from the 2033 Notes amounted to $636.3 million after issuance costs. The 2033 Notes are an unsecured obligation of the Company and bear interest at an annual rate of 0.625% payable in cash semi-annually in arrears on February 15 and August 15 of each year. The 2033 Notes mature on August 15, 2033 unless earlier converted, redeemed or repurchased. The 2033 Notes and its terms are described in “Note 10. Debts and Letters of Credit” of the Company’s Annual Report on Form 10-K for the year ended June 27, 2015. Following the separation of the Lumentum business on August 1, 2015, the conversion price per share was adjusted pursuant to the terms of the 2033 Notes relating to the occurrence of the Separation. Effective as of the end of the business day on August 17, 2015, the initial conversion price per share was adjusted to $11.28 per share of the Company’s common stock traded on NASDAQ under the ticker symbol “VIAV.” In accordance with the authoritative accounting guidance, the Company separated the 2033 Notes into liability and equity components. The carrying value of the liability component at issuance was calculated as the present value of its cash flows using a discount rate of 5.4% based on the 5 -year swap rate plus credit spread as of the issuance date. The credit spread for the Company is based on the historical average “yield to worst” rate for BB rated issuers. The difference between the 2033 Notes principal and the carrying value of the liability component, representing the value of conversion premium assigned to the equity component, was recorded as a debt discount on the issuance date and is being accreted using the effective interest rate of 5.4% over the period from the issuance date through August 15, 2018 as a non-cash charge to interest expense. The carrying value of the liability component was determined to be $515.6 million , and the equity component, or debt discount, of the 2033 Notes was determined to be $134.4 million . As of April 2, 2016 , the expected remaining term of the 2033 Notes is 2.4 years. In connection with the issuance of the 2033 Notes, the Company incurred $13.7 million of issuance costs, which were bifurcated into the debt issuance costs, attributable to the liability component of $10.9 million and the equity issuance costs, attributable to the equity component of $2.8 million based on their relative values. The debt issuance costs were capitalized and are being amortized to interest expense using the effective interest rate method from issuance date through August 15, 2018. The equity issuance costs were netted against the equity component in additional paid-in capital at the issuance date. As of April 2, 2016 , the unamortized portion of the debt issuance costs related to the 2033 Notes was $5.6 million , which was included in Other non-current assets on the Consolidated Balance Sheets. Based on quoted market prices as of April 2, 2016 and June 27, 2015 , the fair value of the 2033 Notes was approximately $636.9 million and $644.0 million . The 2033 Notes are classified within Level 2 as they are not actively traded in markets. The following table presents the effective interest rate and the interest expense for the contractual interest and the accretion of debt discount ( in millions, except for the effective interest rate ): Three Months Ended Nine Months Ended April 2, 2016 March 28, 2015 April 2, 2016 March 28, 2015 Effective interest rate 5.4 % 5.4 % 5.4 % 5.4 % Interest expense-contractual interest $ 1.0 $ 1.0 $ 3.0 $ 3.0 Accretion of debt discount 6.7 6.3 19.9 18.8 Outstanding Letters of Credit As of April 2, 2016 , the Company had 12 standby letters of credit totaling $14.9 million . |
Restructuring and Related Charg
Restructuring and Related Charges | 9 Months Ended |
Apr. 02, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Charges | Note 11. Restructuring and Related Charges The Company has initiated various strategic restructuring events primarily intended to reduce its costs, consolidate its operations, rationalize the manufacturing of its products and align its businesses in response to market conditions. As of April 2, 2016 and June 27, 2015 , the Company’s total restructuring accrual was $12.3 million and $27.2 million . During the three and nine months ended April 2, 2016 the Company recorded restructuring and related (benefits) charges of $(0.1) million and $1.7 million , respectively. During the three and nine months ended March 28, 2015 the Company recorded restructuring and related charges of $7.8 million and $18.0 million , respectively. The Company’s restructuring charges can include severance and benefit costs to eliminate a specified number of positions, facilities and equipment costs to vacate facilities and consolidate operations, and lease termination costs. The timing of associated cash payments is dependent upon the type of restructuring charge and can extend over multiple periods. Summary of Restructuring Plans The adjustments to the accrued restructuring expenses related to all of the Company’s restructuring plans described below for the three and nine months ended April 2, 2016 were as follows (in millions) : Balance Nine Months Ended April 2, 2016 Charges Cash Settlements Non-cash Settlements and Other Adjustments Balance April 2, 2016 Three Months Ended April 2, 2016 Charges Fiscal 2016 Plan NE and SE Agile Restructuring Plan (Workforce Reduction) $ — $ 3.0 $ (1.1 ) $ — $ 1.9 $ — Fiscal 2015 Plan NE, SE and Shared Service Separation Restructuring Plan (Workforce Reduction) 14.9 (0.6 ) (11.7 ) (0.2 ) 2.4 (0.1 ) Fiscal 2014 Plans NE Realignment Plan (Workforce Reduction) 0.6 (0.1 ) (0.5 ) — — — Shared Services Restructuring Plan (Workforce Reduction) 0.7 — (0.7 ) — — — NE Product Strategy Restructuring Plan (Workforce Reduction) 2.3 — (0.5 ) — — 1.8 — NE Lease Restructuring Plan 5.2 0.2 (1.0 ) — 4.4 — Central Finance and IT Restructuring Plan (Workforce Reduction) 1.1 (0.7 ) (0.1 ) — 0.3 — Plans Prior to Fiscal 2014 2.4 (0.1 ) (0.8 ) — 1.5 — Total $ 27.2 $ 1.7 $ (16.4 ) $ (0.2 ) $ 12.3 $ (0.1 ) As of April 2, 2016 and June 27, 2015 , $5.3 million and $8.2 million , respectively, of our restructuring liability was long-term in nature and included as a component of Other non-current liabilities, with the remaining short-term portion included as a component of Other current liabilities on the Consolidated Balance Sheets. Fiscal 2016 Plans NE and SE Agile Restructuring Plan During the second quarter of fiscal 2016, Management approved a plan primarily impacting the NE and SE business segments as part of Viavi’s ongoing commitment for an agile and more efficient operating structure. As a result, a restructuring charge of $3.0 million was recorded for severance and employee benefits for approximately 50 employees primarily in manufacturing, R&D and SG&A functions located in North America, Latin America, Europe and Asia. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the third quarter of fiscal 2017. Fiscal 2015 Plans NE, SE and Shared Service Separation Restructuring Plan During the second, third and fourth quarters of fiscal 2015, Management approved a plan to eliminate certain positions in its shared services functions in connection with the Company’s plan to split into two separate public companies. Further, Management consolidated its operations, sales and R&D organizations and eliminated positions within the NE and SE segments to align to the Company’s product market strategy and lower manufacturing costs in connection with the separation. As a result, approximately 330 employees in manufacturing, R&D and SG&A functions located in North America, Latin America, Europe and Asia were impacted. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the third quarter of fiscal 2018 . Fiscal 2014 Plans NE Realignment Plan During the fourth quarter of fiscal 2014, Management approved a NE plan to realign its operations and strategy to allow for greater investment in high-growth areas. As a result, approximately 100 employees in manufacturing, R&D and SG&A functions located in North America, Asia and Europe were impacted. Payments related to the remaining severance and benefits accrual were paid by the end of the second quarter of fiscal 2016 . Shared Services Restructuring Plan During the fourth quarter of fiscal 2014, Management approved a plan to eliminate positions and re-define roles and responsibilities in its shared services functions in order to reduce cost, standardize global processes and establish a more efficient organization. As a result, approximately 40 employees primarily in the general and administrative functions located in the United States, Asia and Europe were impacted. Payments related to the remaining severance and benefits accrual were paid by the end of the fourth quarter of fiscal 2016 . NE Product Strategy Restructuring Plan During the third quarter of fiscal 2014, Management approved a NE plan to realign its services, support and product resources in response to market conditions in the mobile assurance market and to increase focus on software products and next generation solutions through acquisitions and R&D. As a result, approximately 60 employees primarily in SG&A and manufacturing functions located in North America, Latin America, Asia and Europe were impacted. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the first quarter of fiscal 2020. NE Lease Restructuring Plan During the second quarter of fiscal 2014, Management approved a NE plan to exit the remaining space in Germantown, Maryland. As of June 28, 2014, the Company exited the space in Germantown under the plan. The fair value of the remaining contractual obligations, net of sublease income, as of April 2, 2016 was $4.4 million . Payments related to the Germantown lease costs are expected to be paid by the end of the second quarter of fiscal 2019. Central Finance and Information Technology (“IT”) Restructuring Plan During the second quarter of fiscal 2014, Management approved a plan to eliminate positions and re-define roles and responsibilities in the Finance and IT organization to align with the future state of the organizations under new executive management and move positions to lower-cost locations where appropriate. As a result, approximately 20 employees primarily in SG&A functions located in North America, Asia and Europe were impacted. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the fourth quarter of fiscal 2019. Plans Prior to Fiscal 2014 As of April 2, 2016, the restructuring accrual for plans that commenced prior to fiscal year 2014 was $1.5 million , which consists of immaterial accruals from various restructuring plans. |
Income Taxes
Income Taxes | 9 Months Ended |
Apr. 02, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12. Income Taxes The Company recorded an income tax expense of $11.3 million and $10.9 million related to the income from continuing operations for the three and nine months ended months ended April 2, 2016 , respectively. The Company recorded an income tax expense of $4.8 million and $19.1 million related to the loss from continuing operations for the three and nine months ended March 28, 2015 , respectively. The income tax expense related to the income (loss) from continuing operations recorded for the three and nine months ended April 2, 2016 and March 28, 2015 primarily relates to income tax in certain foreign and state jurisdictions based on the Company’s forecasted pre-tax income or loss for the respective year. In addition, for the three and nine months ended April 2, 2016 the Company’s income tax provision includes a tax expense of $7.6 million and a tax benefit of $14.6 million , respectively, related to the income tax intraperiod tax allocation rules for discontinued operations and other comprehensive income. The income tax expense related to the income from continuing operations for the nine months ended April 2, 2016 also includes a tax expense of $8.9 million related to a one-time increase in valuation allowance associated with deferred tax assets transferred to Lumentum in connection with the Separation. The income tax expense related to the income (loss) from continuing operations recorded differs from the expected tax expense (benefit) that would be calculated by applying the federal statutory rate to the Company’s income (loss) from continuing operations before taxes primarily due to the increases in valuation allowance for deferred tax assets attributable to the Company’s domestic and foreign losses from continuing operations, the income tax benefit recorded in continuing operations under the income tax intraperiod tax allocation rules, and the increase in valuation allowance associated with deferred tax assets transferred to Lumentum in connection with the separation. At the beginning of the second quarter of fiscal 2016, the Company prospectively adopted the authoritative guidance on balance sheet classification of deferred taxes, which requires deferred tax assets and liabilities, and any related valuation allowance, to be classified as non-current on the balance sheet. As of April 2, 2016 and June 27, 2015 , the Company’s unrecognized tax benefits totaled $37.0 million and $37.4 million , respectively, and are included in deferred taxes and other non-current tax liabilities, net. The Company had $1.7 million accrued for the payment of interest and penalties at April 2, 2016 . The unrecognized tax benefits that may be recognized during the next twelve months are approximately $0.1 million . |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Apr. 02, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | Note 13. Stockholders' Equity Repurchase of Common Stock In May 2014, the Company's Board of Directors authorized a stock repurchase program under which the Company may purchase shares of its common stock worth up to an aggregate purchase price of $100.0 million through open market or private transactions. In October 2015, the Board extended the previously authorized repurchase program to utilize the remaining unused dollar amount from the program of approximately $40 million . In November 2015, the Company entered into a $40.0 million accelerated share repurchase agreement (the “ASR”) with a financial institution that was completed during the third quarter of fiscal 2016. Upon making the upfront payment of $40.0 million , the Company received an initial delivery of 5.3 million shares from the financial institution during the second quarter of fiscal 2016, which were retired and recorded as a $32.0 million reduction to stockholder’s equity on the Consolidated Balance Sheet. During the third quarter of fiscal 2016 the ASR was completed and an additional 1.3 million shares were delivered from the financial institution, based on the final settlement price of $6.05 per share, which were retired and recorded as an $8.0 million reduction to stockholder’s equity on the Consolidated Balance Sheet. The Company reflects the repurchase of common stock under the ASR in the period the shares are delivered for the purposes of calculating earnings per share. All common shares repurchased under this program have been canceled and retired. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Apr. 02, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Note 14. Stock-Based Compensation Overview The impact on the Company’s results of operations of recording stock-based compensation by function for the three and nine months ended April 2, 2016 and March 28, 2015 was as follows (in millions): Three Months Ended Nine Months Ended April 2, 2016 March 28, 2015 April 2, 2016 March 28, 2015 Cost of sales $ 1.1 $ 1.1 $ 3.7 $ 3.1 Research and development 2.0 2.0 6.7 5.9 Selling, general and administrative 6.0 11.7 23.6 26.8 Stock-based compensation $ 9.1 $ 14.8 $ 34.0 $ 35.8 Approximately $0.9 million of stock-based compensation was capitalized to inventory at April 2, 2016 . Full Value Awards Full Value Awards refer to RSUs and Performance Units that are granted with the exercise price equal to zero and are converted to shares immediately upon vesting. These Full Value Awards are performance-based, time-based or a combination of both and expected to vest over one to four years. The fair value of the time-based Full Value Awards is based on the closing market price of the Company’s common stock on the date of award. During the nine months ended April 2, 2016 and March 28, 2015 , the Company granted 6.1 million and 5.6 million RSUs, of which 0.6 million and 0.7 million , respectively, are performance-based RSUs with market conditions (“MSUs”). These MSU shares represent the target amount of grants, and the actual number of shares awarded upon vesting of the MSUs may be higher or lower depending upon the achievement of the relevant market conditions. The majority of MSUs vest in equal annual installments over three years based on the attainment of certain total shareholder return performance measures and the employee’s continued service through the vest date. The aggregate grant-date fair value of MSUs granted through the third quarter of fiscal 2016 and fiscal 2015 was estimated to be $3.7 million and $9.4 million , respectively, and was calculated using a Monte Carlo simulation. The remaining 5.5 million and 4.9 million granted during the nine months ended April 2, 2016 and March 28, 2015 , respectively, are time-based RSUs. The majority of these time-based RSUs vest over three years , with 33% vesting after one year and the balance vesting quarterly over the remaining two years . The grant amounts and grant-date fair values during the nine months ended March 28, 2015 represent the Company’s historical grant information and have not been adjusted to remove grants made to employees who transferred to Lumentum as part of the Separation. As of April 2, 2016 , $46.5 million of unrecognized stock-based compensation cost related to Full Value Awards remains to be amortized. That cost is expected to be recognized over an estimated amortization period of 2.1 years . Full Value Awards are converted into shares upon vesting. Shares equivalent in value to the minimum withholding taxes liability on the vested shares are withheld by the Company for the payment of such taxes. During the nine months ended April 2, 2016 and March 28, 2015 , the Company paid $9.8 million and $17.2 million , respectively, and classified the payments as operating cash outflows in the Consolidated Statement of Cash Flows. Impact on Stock-based Compensation Due to Separation In connection with the separation of the Lumentum business on August 1, 2015 and in accordance with the Employee Matters Agreement, the Company made certain adjustments to the exercise price and number of shares underlying stock-based compensation awards with the intention of preserving the economic value of the awards for Viavi employees. These adjustments resulted in a modification of equity awards with total incremental stock-based compensation of $13.6 million , of which $9.2 million was expensed during the nine months ended April 2, 2016 . The remaining $4.4 million will be amortized over the remaining requisite service period from Separation Date to the end of the vesting term. Valuation Assumptions The Company estimates the fair value of the new MSUs granted using a Monte Carlo simulation based on the assumptions described below for the following periods: Nine Months Ended April 2, 2016 March 28, 2015 Volatility of common stock 33.6 % 40.8 % Average volatility of peer companies 52.8 % 53.4 % Average correlation coefficient of peer companies 0.1047 0.2156 Risk-free interest rate 0.8 % 0.6 % |
Employee Pension and Other Bene
Employee Pension and Other Benefit Plans | 9 Months Ended |
Apr. 02, 2016 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Employee Benefit Plans | Note 15. Employee Pension and Other Benefit Plans In connection with the separation of Lumentum on August 1, 2015, the Company transferred the liabilities and assets of the Switzerland defined benefit pension plans to Lumentum in the amount of $6.7 million and $4.6 million , respectively. The Company sponsors significant qualified and non-qualified pension plans for certain past and present employees in the United Kingdom (“U.K.”) and Germany. The Company also is responsible for the non-pension post-retirement benefit obligation assumed from a past acquisition. Most of the plans have been closed to new participants and no additional service costs are being accrued, except for certain plans in Germany assumed in connection with acquisitions during fiscal 2010. Benefits are generally based upon years of service and compensation or stated amounts for each year of service. As of April 2, 2016 the U.K. plan was partially funded while the other plans were unfunded. The Company’s policy for funded plans is to make contributions equal to or greater than the requirements prescribed by law or regulation. For unfunded plans, the Company pays the post-retirement benefits when due. During the nine months ended April 2, 2016 , the Company contributed $0.7 million to the U.K. plan. The funded plans assets consist primarily of managed investments. The following table presents the components of the net periodic cost for the pension and benefits plans ( in millions ): Three Months Ended Nine Months Ended Pension Benefits April 2, 2016 March 28, 2015 April 2, 2016 March 28, 2015 Service cost $ 0.1 $ 0.1 $ 0.3 $ 0.2 Interest cost 0.7 0.8 2.2 2.8 Expected return on plan assets (0.4 ) (0.4 ) (1.2 ) (1.2 ) Recognized net actuarial losses 0.2 0.1 0.5 0.3 Net periodic benefit cost $ 0.6 $ 0.6 $ 1.8 $ 2.1 Both the calculation of the projected benefit obligation and net periodic cost are based upon actuarial valuations. These valuations use participant-specific information such as salary, age, years of service, and assumptions about interest rates, pension increases and other factors. At a minimum, the Company evaluates these assumptions annually and makes changes as necessary. The Company expects to incur cash outlays of approximately $6.0 million related to its defined benefit pension plans during fiscal 2016 to make current benefit payments and fund future obligations. As of April 2, 2016 , approximately $3.9 million had been incurred. These payments have been estimated based on the same assumptions used to measure the Company’s projected benefit obligation at June 27, 2015. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Apr. 02, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 16. Commitments and Contingencies Legal Proceedings The Company is subject to a variety of claims and suits that arise from time to time in the ordinary course of our business. While management currently believes that resolving claims against the Company, individually or in aggregate, will not have a material adverse impact on its financial position, results of operations or statement of cash flows, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. Were an unfavorable final outcome to occur, there exists the possibility of a material adverse impact on the Company’s financial position, results of operations or cash flows for the period in which the effect becomes reasonably estimable. Guarantees In accordance with authoritative guidance which requires that upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligation it assumes under that guarantee. In addition, disclosures about the guarantees that an entity has issued, including a tabular reconciliation of the changes of the entity’s product warranty liabilities, are required. The Company from time to time enters into certain types of contracts that contingently require the Company to indemnify parties against third-party claims. These contracts primarily relate to: (i) divestiture agreements, under which the Company may provide customary indemnifications to purchasers of the Company’s businesses or assets; (ii) certain real estate leases, under which the Company may be required to indemnify property owners for environmental and other liabilities, and other claims arising from the Company’s use of the applicable premises; and (iii) certain agreements with the Company’s officers, directors and employees, under which the Company may be required to indemnify such persons for liabilities arising out of their employment relationship. The terms of such obligations vary. Generally, a maximum obligation is not explicitly stated. Because the obligated amounts of these types of agreements often are not explicitly stated, the overall maximum amount of the obligations cannot be reasonably estimated. Historically, the Company has not been obligated to make significant payments for these obligations, and no liabilities have been recorded for these obligations on the consolidated balance sheet as of April 2, 2016 and June 27, 2015 . Product Warranties In general, the Company offers a three -year warranty for most of its products. The Company provides reserves for the estimated costs of product warranties at the time revenue is recognized. The Company estimates the costs of its warranty obligations based on its historical experience of known product failure rates, use of materials to repair or replace defective products and service delivery costs incurred in correcting product failures. In addition, from time to time, specific warranty accruals may be made if unforeseen technical problems arise with specific products. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. The following table presents the changes in the Company’s warranty reserve during fiscal 2016 and fiscal 2015 ( in millions ): Three Months Ended Nine Months Ended April 2, 2016 March 28, 2015 April 2, 2016 March 28, 2015 Balance as of beginning of period $ 4.3 $ 3.5 $ 3.7 $ 3.6 Provision for warranty 0.8 1.0 2.5 2.9 Utilization of reserve (0.8 ) (0.9 ) (2.3 ) (3.0 ) Adjustments related to pre-existing warranties (including changes in estimates) 0.2 — 0.6 0.1 Balance as of end of period $ 4.5 $ 3.6 $ 4.5 $ 3.6 |
Operating Segments
Operating Segments | 9 Months Ended |
Apr. 02, 2016 | |
Segment Reporting [Abstract] | |
Operating Segments | Note 17. Operating Segments The Company evaluates its reportable segments in accordance with the authoritative guidance on segment reporting. The Company’s Chief Executive Officer, Oleg Khaykin, is the Company’s Chief Operating Decision Maker (“CODM”) pursuant to the guidance. The CODM allocates resources to the segments based on their business prospects, competitive factors, net revenue and operating results. The Company provides software and hardware platforms and instruments that deliver end-to-end visibility across physical, virtual and hybrid networks. Viavi’s solutions provide intelligence and insight across the network ecosystem to optimize networks and support more profitable, higher-performing networks for our customers. Viavi is also a leader in anti-counterfeiting solutions for currency authentication and high-value optical components and instruments for diverse government and commercial applications. The Company’s reportable segments are: (i) Network Enablement (“NE”): NE provides testing solutions that access the network to perform build out and maintenance tasks. These solutions include instruments and software to design, build, turn-up, certify, troubleshoot, and optimize networks. (ii) Service Enablement (“SE”): SE solutions are embedded systems that yield network, service and application performance data. These solutions—including microprobes and software—monitor, collect and analyze network data to reveal the actual customer experience and to identify opportunities for new revenue streams and network optimization. (iii) Optical Security and Performance Products (“OSP”): OSP provides innovative optical security solutions, with a strategic focus on serving the anti-counterfeiting market through advanced security pigments, thread substrates and printed features for the currency, pharmaceutical and consumer electronic segments. OSP also provides thin-film coating solutions for 3D sensing applications. Changes to Segment Reporting Following the Separation in the first quarter of fiscal 2016, the Company made changes to its segment measures to reflect how the CODM manages the business post-separation as described below. The CODM manages the Company in two broad business categories: Network and Service Enablement ("NSE") and OSP. NSE operates in two segments, NE and SE, whereas OSP operates as a single segment. The CODM evaluates segment performance of the NSE business based on NE and SE segment gross margin and NSE operating margin as a whole. Operating expenses associated with the NSE business are not allocated to the NE and SE segments within NSE, as they are managed centrally at the business unit level. The CODM evaluates segment performance of the OSP business based on OSP segment operating margin. In addition, prior to the first quarter of fiscal 2016 the Company did not allocate certain corporate-level operating expenses associated with its shared-service function to its segment results. Beginning in the first quarter of fiscal 2016, the Company has allocated these corporate-level operating expenses to its segment results, with the exception of certain non-recurring activities and other items as discussed below. The Company does not allocate stock-based compensation, acquisition-related charges and amortization of intangibles, restructuring and related charges, non-operating income and expenses, or other non-recurring charges to our segments because Management does not include this information in its measurement of the performance of the operating segments. These items are presented as “Reconciling Items” in the table below. As a result of the Separation, the Company excluded the results of the Lumentum business which historically consisted of the CCOP segment and the WaveReady product line within the NE segment for all periods presented. Refer to “ Note 3. Discontinued Operations ” for more information on the Separation. Additionally, the Company’s Video Assurance product line was moved out of its NE segment and into its SE segment during the first quarter of fiscal 2016. The segment information for all periods presented has been revised to be comparable with the changes in the Company’s segment reporting measures. Information on reportable segments is as follows (in millions): Three Months Ended April 2, 2016 Network and Service Enablement Network Enablement Service Enablement Network and Service Enablement Optical Security and Performance Products Total Segment Measures Corporate Reconciling Items Consolidated GAAP Measures Net revenue $ 123.1 $ 35.2 $ 158.3 $ 62.1 $ 220.4 $ — $ 220.4 Gross profit 80.7 19.8 100.5 35.9 136.4 (5.1 ) 131.3 Gross margin 65.6 % 56.3 % 63.5 % 57.8 % 61.9 % 59.6 % Operating (loss) income (0.1 ) 26.3 26.2 (19.0 ) 7.2 Operating margin (0.1 )% 42.4 % 11.9 % 3.3 % Three Months Ended March 28, 2015 Network and Service Enablement Network Enablement Service Enablement Network and Service Enablement Optical Security and Performance Products Total Segment Measures Corporate Reconciling Items Consolidated GAAP Measures Net revenue $ 124.1 $ 39.9 $ 164.0 $ 48.4 $ 212.4 $ — $ 212.4 Gross profit 83.2 28.2 111.4 26.3 137.7 (10.7 ) 127.0 Gross margin 67.0 % 70.7 % 67.9 % 54.3 % 64.8 % 59.8 % Operating income (loss) 1.7 17.3 19.0 (42.2 ) (23.2 ) Operating margin 1.0 % 35.7 % 8.9 % (10.9 )% Three Months Ended April 2, 2016 March 28, 2015 Corporate reconciling items impacting gross profit: Total segment gross profit $ 136.4 $ 137.7 Stock-based compensation (1.1 ) (1.1 ) Amortization of intangibles (4.1 ) (9.0 ) Other charges related to non-recurring activities 0.1 (0.6 ) GAAP gross profit $ 131.3 $ 127.0 Corporate reconciling items impacting operating income (loss): Total segment operating income $ 26.2 $ 19.0 Stock-based compensation (9.1 ) (14.8 ) Amortization of intangibles (7.7 ) (13.8 ) Other charges related to non-recurring activities (1) (2.3 ) (5.8 ) Restructuring and related charges 0.1 (7.8 ) GAAP operating income (loss) from continuing operations $ 7.2 $ (23.2 ) (1) During the three months ended April 2, 2016 and March 28, 2015 , other charges related to non-recurring activities primarily consisted of Viavi-specific incremental charges for professional fees and additional personnel costs to complete the separation as well as transformational initiatives such as the implementation of simplified automated processes, site consolidations, reorganizations, and the insourcing or outsourcing of activities. Nine Months Ended April 2, 2016 Network and Service Enablement Network Enablement Service Enablement Network and Service Enablement Optical Security and Performance Products Total Segment Measures Corporate Reconciling Items Consolidated GAAP Measures Net revenue $ 377.1 $ 120.0 $ 497.1 $ 185.1 $ 682.2 $ — $ 682.2 Gross profit 247.0 77.7 324.7 105.7 430.4 (16.8 ) 413.6 Gross margin 65.5 % 64.8 % 65.3 % 57.1 % 63.1 % 60.6 % Operating (loss) income 10.3 75.1 85.4 (71.9 ) 13.5 Operating margin 2.1 % 40.6 % 12.5 % 2.0 % Nine Months Ended March 28, 2015 Network and Service Enablement Network Enablement Service Enablement Network and Service Enablement Optical Security and Performance Products Total Segment Measures Corporate Reconciling Items Consolidated GAAP Measures Net revenue $ 374.6 $ 137.2 $ 511.8 $ 142.3 $ 654.1 $ — $ 654.1 Gross profit 248.0 95.6 343.6 76.1 419.7 (30.7 ) 389.0 Gross margin 66.2 % 69.7 % 67.1 % 53.5 % 64.2 % 59.5 % Operating income (loss) 2.4 48.7 51.1 (107.9 ) (56.8 ) Operating margin 0.5 % 34.2 % 7.8 % (8.7 )% Nine Months Ended April 2, 2016 March 28, 2015 Corporate reconciling items impacting gross profit: Total segment gross profit $ 430.4 $ 419.7 Stock-based compensation (3.7 ) (3.1 ) Amortization of intangibles (13.0 ) (26.3 ) Other charges related to non-recurring activities (0.1 ) (1.3 ) GAAP gross profit $ 413.6 $ 389.0 Corporate reconciling items impacting operating income (loss): Total segment operating income $ 85.4 $ 51.1 Stock-based compensation (34.0 ) (35.8 ) Amortization of intangibles (24.1 ) (41.0 ) Other charges related to non-recurring activities (1) (12.1 ) (13.1 ) Restructuring and related charges (1.7 ) (18.0 ) GAAP operating income (loss) from continuing operations $ 13.5 $ (56.8 ) (1) During the nine months ended April 2, 2016 and March 28, 2015 , other charges related to non-recurring activities primarily consisted Viavi-specific incremental charges for professional fees and additional personnel costs to complete the separation as well as transformational initiatives such as the implementation of simplified automated processes, site consolidations, reorganizations, and the insourcing or outsourcing of activities. Additionally, the nine months ended April 2, 2016 included $3.5 million of non-recurring incremental severance and related costs upon the exit of a key executive. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Apr. 02, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 18. Subsequent Events In May 2016, Management approved a restructuring plan primarily related to the consolidation of NSE’s R&D function in China, including the planned closure of the Company’s Beijing R&D center. This restructuring plan is part of the Company’s ongoing commitment to create an agile and cost efficient organization. The Company anticipates that restructuring charges in the range of $5.0 million to $7.0 million will mostly be incurred in the fourth quarter of fiscal 2016, primarily consisting of employee related termination benefits. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Apr. 02, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Fiscal Years | Fiscal Years The Company utilizes a 52 - 53 week fiscal year ending on the Saturday closest to June 30th. The Company’s fiscal 2016 is a 53 -week year ending on July 2, 2016 . The Company’s fiscal 2015 was a 52 -week year ending on June 27, 2015 . |
Principles of Consolidation | Principles of Consolidation The amounts presented in the consolidated financial statements have been prepared in accordance with U.S. GAAP and include the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements, the reported amount of Net revenues and expenses and the disclosure of commitments and contingencies during the reporting periods. The Company bases estimates on historical experience and on various assumptions about the future believed to be reasonable based on available information. The Company’s reported financial position or results of operations may be materially different under changed conditions or when using different estimates and assumptions, particularly with respect to significant accounting policies. If estimates or assumptions differ from actual results, subsequent periods are adjusted to reflect more current information. |
Recently Issued Accounting Pronouncements | In March 2016, the Financial Accounting Standards Board (“FASB”) issued guidance which simplifies several aspects of accounting for share-based payment award transactions including income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The guidance is effective for the Company in the first quarter of fiscal 2018 and earlier adoption is permitted. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In March 2016, the FASB issued guidance that clarifies the steps required when assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to the economic characteristics and risks of their debt instrument. The guidance is effective for the Company in the first quarter of fiscal 2018. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In February 2016, the FASB issued guidance related to how an entity should recognize lease assets and lease liabilities. The guidance specifies that an entity who is a lessee under lease agreements should recognize lease assets and lease liabilities for those leases classified as operating leases under previous FASB guidance. Accounting for leases by lessors is largely unchanged under the new guidance. The guidance requires a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The guidance is effective for the Company in the first quarter of fiscal 2020. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In January 2016, the FASB issued guidance that requires an entity to measure equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, it requires entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes and requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset. It also eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The guidance is effective for the Company in the first quarter of fiscal 2019. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In November 2015, the FASB issued guidance requiring deferred tax assets and liabilities, and any related valuation allowance, to be classified as non-current on the balance sheet. This classification eliminates the need to separately identify the net current and net non-current deferred tax asset or liability in each jurisdiction. The Company elected to prospectively adopt the guidance in the beginning of the second quarter of fiscal 2016. Refer to “ Note 12. Income Taxes ” for more information regarding the impact of adopting this guidance. In July 2015, the FASB issued guidance to change the subsequent measurement of inventory from lower of cost or market to lower of cost and net realizable value. The guidance is effective for the Company in the first quarter of fiscal 2018. Earlier application is permitted as of the beginning of an interim or annual reporting period. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In May 2015, the FASB issued guidance to remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using net asset value per share practical expedient. The guidance is effective for the Company in the first quarter of fiscal 2017 and may apply to certain pension assets. The guidance will be applied retrospectively and earlier adoption is permitted. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In April 2015, the FASB issued new authoritative guidance to provide a practical expedient that permits the entity to measure defined benefit plan assets and obligations using the month-end that is closest to the entity’s fiscal year-end and apply that practical expedient consistently from year to year. Prospective application is required and early adoption is permitted. This guidance is effective for the Company in the first quarter of fiscal 2017 and may apply to the qualified and the non-qualified pension plans in certain countries. The Company does not expect the adoption of this standard will have a material effect on the consolidated financial statements. In April 2015, the FASB issued new authoritative guidance to simplify the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding liability, consistent with debt discounts or premiums. This guidance is effective for the Company in the first quarter of fiscal 2017 for its convertible debt, and will be applied retrospectively. The consolidated balance sheet of each individual period presented will be adjusted to reflect the period-specific effects of applying this new guidance. In May 2014, the FASB issued new authoritative guidance related to revenue recognition. This guidance will replace current U.S. GAAP guidance on this topic and eliminate industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance allows for either full retrospective adoption or modified retrospective adoption. The FASB deferred the effective date for this guidance by one year to December 15, 2017 for annual reporting periods beginning after such date. Earlier application of this guidance is permitted but not before the original date of December 15, 2016. In March, April and May 2016, the FASB clarified the implementation guidance on principal versus agent, identifying performance obligations, licensing, collectibility, noncash consideration, presentation of sales tax, and other transition matters. The new guidance is effective for the Company in the first quarter of fiscal 2019. The Company is evaluating the impact that this new accounting guidance will have on its consolidated financial statements and related disclosures. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Apr. 02, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | The following table presents supplemental cash flow information: depreciation expense, amortization expense, stock based compensation expense and capital expenditures of the Lumentum business (in millions) : Nine Months Ended April 2, 2016 March 28, 2015 Operating activities: Depreciation expense $ 3.7 $ 32.3 Amortization expense 0.6 6.0 Stock-based compensation expense 1.6 14.4 Investing activities: Capital expenditures $ 5.8 $ 34.0 The following table summarizes results from discontinued operations of the Lumentum business included in the condensed Consolidated Statement of Operations (in millions) : Three Months Ended (1) Nine Months Ended March 28, 2015 April 2, 2016 March 28, 2015 Net revenues $ 198.3 $ 66.5 $ 627.3 Cost of revenues 139.1 49.8 426.5 Amortization of acquired technologies 1.9 0.6 5.7 Gross profit 57.3 16.1 195.1 Operating expenses: Research and development 34.6 12.5 104.4 Selling, general and administrative 21.3 24.7 57.3 Restructuring charges 0.5 0.1 2.9 Total operating expenses 56.4 37.3 164.6 Income (loss) from operations 0.9 (21.2 ) 30.5 Interest and other income (expense), net (0.5 ) — (0.8 ) Income (loss) before income taxes 0.4 (21.2 ) 29.7 (Benefit from) provision for income taxes (22.2 ) 24.4 (21.6 ) Net income (loss) from discontinued operations $ 22.6 $ (45.6 ) $ 51.3 (1) Net income from discontinued operations for the three months ended April 2, 2016 of $5.0 million is comprised of costs to complete the separation offset by a benefit attributable to income taxes from discontinued operations of $6.1 million . No income or expense relating to the Lumentum business has been recorded after the separation from Viavi on August 1, 2015. The following table presents the carrying amounts of the major classes of the assets and liabilities of the Lumentum business which are presented as discontinued operation on the Consolidated Balance Sheets (in millions) . June 27, 2015 Assets: Cash and cash equivalents $ 13.4 Accounts receivable, net 150.2 Inventories, net 100.0 Prepayments and other current assets 46.6 Current assets of discontinued operations 310.2 Property, plant and equipment, net 145.4 Goodwill 5.6 Intangibles, net 21.8 Other non-current assets 31.4 Non-current assets of discontinued operations 204.2 Total assets of discontinued operations $ 514.4 Liabilities: Accounts payable $ 79.1 Accrued payroll and related expenses 18.3 Income taxes payable 3.7 Accrued expenses 17.5 Other current liabilities 11.4 Current liabilities of discontinued operations 130.0 Non-current liabilities of discontinued operations 10.9 Total liabilities of discontinued operations $ 140.9 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Apr. 02, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted net (loss) income per share | The following table sets forth the computation of basic and diluted net income (loss) per share ( in millions, except per share data ): Three Months Ended Nine Months Ended April 2, 2016 March 28, 2015 April 2, 2016 March 28, 2015 Numerator: Income (loss) from continuing operations, net of taxes $ 27.4 $ (35.8 ) $ 17.1 $ (99.3 ) Income (loss) from discontinued operations, net of taxes 5.0 22.6 (45.4 ) 51.3 Net income (loss) $ 32.4 $ (13.2 ) $ (28.3 ) $ (48.0 ) Denominator: Weighted-average number of common shares outstanding Basic 232.0 233.2 234.4 232.1 Effect of dilutive securities from stock-based benefit plans 2.6 — 3.0 — Diluted 234.6 233.2 237.4 232.1 Net income (loss) per share - basic and diluted: Continuing operations $ 0.12 $ (0.16 ) $ 0.07 $ (0.43 ) Discontinued operations 0.02 0.10 (0.19 ) 0.22 Net income (loss) per share $ 0.14 $ (0.06 ) $ (0.12 ) $ (0.21 ) |
Schedule of weighted average potentially dilutive securities excluded from the computation because their effect would have been anti-dilutive | The following table sets forth the weighted-average potentially dilutive securities excluded from the computation of the diluted net income (loss) per share because their effect would have been anti-dilutive ( in millions ): Three Months Ended Nine Months Ended April 2, 2016 (2) March 28, 2015 (1)(2) April 2, 2016 (2) March 28, 2015 (1)(2) Stock options and ESPP 1.2 3.7 1.0 3.8 Restricted Stock Units 3.0 10.4 2.3 10.6 Total potentially dilutive securities 4.2 14.1 3.3 14.4 (1) As the Company incurred a net loss from continuing operations in the period, potential dilutive securities from employee stock options, employee stock purchase plan (“ESPP”) and Restricted Stock Units (“RSUs”) have been excluded from the diluted net loss per share computations as their effects were deemed anti-dilutive. (2) The Company’s 0.625% Senior Convertible 2033 Notes are not included in the table above. The par amount of convertible notes is payable in cash equal to the principal amount of the notes plus any accrued and unpaid interest and then the “in-the-money” conversion benefit feature at the conversion price above $11.28 per share is payable in cash, shares of the Company’s common stock or a combination of both. Refer to “ Note 10. Debts and Letters of Credit ” for more details. |
Accumulated Other Comprehensi29
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Apr. 02, 2016 | |
Equity [Abstract] | |
Schedule of components of Accumulated other comprehensive income | For the nine months ended April 2, 2016 the changes in accumulated other comprehensive income (loss) by component net of tax were as follows ( in millions ): Unrealized (losses) on available-for sale investments (2) Foreign currency translation adjustments Defined benefit obligation, net of tax (3) Total Beginning balance as of June 27, 2015 $ (3.2 ) $ (29.2 ) $ (15.6 ) $ (48.0 ) Transferred to Lumentum (1) — (8.9 ) 1.1 (7.8 ) Other comprehensive (loss) income before reclassification 201.6 (18.4 ) — 183.2 Amounts reclassified from accumulated other comprehensive income (loss) (38.8 ) — 0.5 (38.3 ) Net current-period other comprehensive (loss) income 162.8 (18.4 ) 0.5 144.9 Ending balance as of April 2, 2016 $ 159.6 $ (56.5 ) $ (14.0 ) $ 89.1 (1) Amount represents the transfer of accumulated other comprehensive balances to Lumentum as of the Separation Date. Refer to “ Note 3. Discontinued Operations ” for more information. (2) Activity before reclassifications to the Consolidated Statements of Operations during the nine months ended April 2, 2016 primarily relates to a $205.3 million gross unrealized gain on the marketable equity securities of Lumentum held by Viavi, net of a $3.7 million income tax effect related to the intraperiod tax allocation rules. The amount reclassified out of accumulated other comprehensive income (loss) is primarily composed of a $39.7 million realized gain before tax during the three months ended April 2, 2016 from the sale of 2.5 million shares out of 11.7 million shares of the marketable equity securities of Lumentum held by Viavi upon Separation, net of a $1.0 million income tax effect related to the intraperiod tax allocation rules. The gain and the income tax effect are included in "Gain on sale of investments" and “ Provision for income taxes ,” respectively, in the Consolidated Statement of Operations for the three and nine months ended April 2, 2016 . (3) Amount represents the amortization of actuarial losses included as a component of Selling, general and administrative expense (“SG&A”) in the Consolidated Statement of Operations for the nine months ended April 2, 2016 . There was no tax impact. Refer to “ Note 15. Employee Pension and Other Benefit Plans ” for more details on the computation of net periodic cost for pension plans. |
Balance Sheet and Other Detai30
Balance Sheet and Other Details (Tables) | 9 Months Ended |
Apr. 02, 2016 | |
Balance Sheet and Other Details | |
Schedule of components of accounts receivable reserves and allowances | The components of accounts receivable reserves and allowances were as follows ( in millions ): June 27, 2015 Charged to Costs and Expenses Adjustments (1) April 2, 2016 Allowance for doubtful accounts $ 2.4 $ 0.1 $ (0.4 ) $ 2.1 Allowance for sales returns 0.7 2.7 (1.7 ) 1.7 Total accounts receivable reserves $ 3.1 $ 2.8 $ (2.1 ) $ 3.8 (1) Represents the effect of currency translation adjustments and write-offs of uncollectible accounts, net of recoveries. |
Schedule of components of Inventories | The components of Inventories, net were as follows ( in millions ): April 2, 2016 June 27, 2015 Finished goods $ 30.5 $ 31.5 Work in process 6.8 6.8 Raw materials 15.2 15.5 Inventories, net $ 52.5 $ 53.8 |
Schedule of components of Prepayments and other current assets | The components of Prepayments and other current assets were as follo ws ( in millions ): April 2, 2016 June 27, 2015 Prepayments $ 12.5 $ 15.7 Other current assets 22.2 22.5 Prepayments and other current assets $ 34.7 $ 38.2 |
Schedule of components of Other current liabilities | The components of Other current liabilities were as follows ( in millions ): April 2, 2016 June 27, 2015 Deferred compensation plan $ 2.4 $ 3.0 Warranty 2.6 2.3 Value-added tax 2.8 1.7 Restructuring 7.0 19.1 Deferred income taxes — 7.1 Other 2.9 10.3 Other current liabilities $ 17.7 $ 43.5 |
Schedule of components of Other non-current liabilities | The components of Other non-current liabilities were as follo ws ( in millions ): April 2, 2016 June 27, 2015 Pension and post-employment benefits $ 83.5 $ 86.9 Financing obligation 29.0 29.1 Restructuring accrual 5.3 8.2 Long-term deferred revenue 24.2 23.6 Other 30.4 20.6 Other non-current liabilities $ 172.4 $ 168.4 |
Investments and Fair Value Me31
Investments and Fair Value Measurements (Tables) | 9 Months Ended |
Apr. 02, 2016 | |
Investments and Fair Value Measurements | |
Schedule of available-for-sale securities | As of June 27, 2015 , the Company’s available-for-sale securities were as follows ( in millions ): Amortized Cost/ Carrying Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt securities: U.S. treasuries $ 51.9 $ — $ — $ 51.9 U.S. agencies 96.0 — — 96.0 Municipal bonds and sovereign debt instruments 4.0 — — 4.0 Asset-backed securities 70.6 — (0.2 ) 70.4 Corporate securities 274.1 0.1 (0.1 ) 274.1 Total debt available-for-sale securities $ 496.6 $ 0.1 $ (0.3 ) $ 496.4 As of April 2, 2016 , the Company’s available-for-sale securities were as follows ( in millions ): Amortized Cost/ Carrying Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt securities: U.S. treasuries $ 60.2 $ — $ — $ 60.2 U.S. agencies 29.1 — — 29.1 Municipal bonds and sovereign debt instruments 2.3 — — 2.3 Asset-backed securities 46.3 0.1 (0.4 ) 46.0 Corporate securities 206.8 0.1 (0.1 ) 206.8 Total debt securities 344.7 0.2 (0.5 ) 344.4 Marketable equity securities 78.8 165.5 — 244.3 Total available-for-sale securities $ 423.5 $ 165.7 $ (0.5 ) $ 588.7 |
Schedule of contractual maturities of available-for-sale securities | As of April 2, 2016 , contractual maturities of the Company’s debt securities classified as available-for-sale securities were as follows ( in millions ): Amortized Cost/ Carrying Cost Estimated Fair Value Amounts maturing in less than 1 year $ 251.6 $ 251.6 Amounts maturing in 1 - 5 years 91.4 91.4 Amounts maturing in more than 5 years 1.7 1.4 Total debt available-for-sale securities $ 344.7 $ 344.4 |
Schedule of assets measured at fair value | Assets measured at fair value as of April 2, 2016 are summarized below ( in millions ): Fair value measurement as of April 2, 2016 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Assets: Debt available-for-sale securities U.S. treasuries $ 60.2 $ 60.2 $ — U.S. agencies 29.1 — 29.1 Municipal bonds and sovereign debt instruments 2.3 — 2.3 Asset-backed securities 46.0 — 46.0 Corporate securities 206.8 — 206.8 Total debt available-for-sale securities 344.4 60.2 284.2 Marketable equity securities 244.3 244.3 — Money market funds 273.7 273.7 — Trading securities 2.4 2.4 — Total assets (1) $ 864.8 $ 580.6 $ 284.2 (1) $ 293.5 million in cash and cash equivalents, $555.8 million in short-term investments, $11.1 million in restricted cash, and $4.4 million in other non-current assets on the Company’s Consolidated Balance Sheets. |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Apr. 02, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in goodwill | The following table presents the changes in goodwill allocated to the Company’s reportable segments (in millions) : Network Enablement Service Enablement Optical Security and Performance Products Total Balance as of June 27, 2015 $ 154.5 $ 92.7 $ 8.3 $ 255.5 Currency translation and other adjustments (2.7 ) (1.5 ) — (4.2 ) Goodwill allocation - WaveReady (1) (6.0 ) — — (6.0 ) Balance as of April 2, 2016 $ 145.8 $ 91.2 $ 8.3 $ 245.3 (1) Amount represents a release of the relative fair value of goodwill in our NE reporting unit related to the WaveReady products line, which is now a part of Lumentum as of the Separation Date. Refer to “ Note 3. Discontinued Operations ” for more information. |
Acquired Developed Technology33
Acquired Developed Technology and Other Intangibles (Tables) | 9 Months Ended |
Apr. 02, 2016 | |
Acquired Developed Technology and Other Intangibles | |
Schedule of acquired developed technology and other intangibles | The following tables present details of the Company’s acquired developed technology, customer relationships and other intangibles ( in millions ): As of April 2, 2016 Gross Carrying Amount Accumulated Amortization Net Acquired developed technology $ 421.9 $ (385.1 ) $ 36.8 Customer relationships 175.4 (144.0 ) 31.4 Other 19.3 (18.9 ) 0.4 Total intangibles subject to amortization 616.6 (548.0 ) 68.6 In-process research and development assets 0.8 — 0.8 Total intangibles $ 617.4 $ (548.0 ) $ 69.4 As of June 27, 2015 Gross Carrying Amount Accumulated Amortization Net Acquired developed technology $ 418.9 $ (373.6 ) $ 45.3 Customer relationships 178.7 (135.8 ) 42.9 Other 19.5 (18.9 ) 0.6 Total intangibles subject to amortization 617.1 (528.3 ) 88.8 In-process research and development assets 1.8 — 1.8 Total intangibles $ 618.9 $ (528.3 ) $ 90.6 |
Finite-lived intangible assets amortization expense | The following table presents the amortization recorded relating to acquired developed technology, customer relationships and other intangibles ( in millions ): Three Months Ended Nine Months Ended April 2, 2016 March 28, 2015 April 2, 2016 March 28, 2015 Amortization of acquired developed technologies $ 4.1 $ 9.0 $ 13.0 $ 26.3 Amortization of other intangibles 3.6 4.8 11.1 14.7 Total amortization of intangible assets $ 7.7 $ 13.8 $ 24.1 $ 41.0 |
Schedule of estimated future amortization | Based on the carrying amount of acquired developed technology, customer relationships and other intangibles as of April 2, 2016 , and assuming no future impairment of the underlying assets, the estimated future amortization is as follows ( in millions ): Fiscal Years Remainder of 2016 $ 7.6 2017 29.2 2018 20.8 2019 9.3 2020 1.3 Thereafter 0.4 Total amortization $ 68.6 |
Debts and Letters of Credit (Ta
Debts and Letters of Credit (Tables) | 9 Months Ended |
Apr. 02, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of carrying amounts of the liability and equity components of convertible debt | The following table presents the carrying amounts of the liability and equity components ( in millions ): April 2, 2016 June 27, 2015 Principal amount of 0.625% Senior Convertible Notes $ 650.0 $ 650.0 Unamortized discount of liability component (68.5 ) (88.4 ) Carrying amount of liability component $ 581.5 $ 561.6 Carrying amount of equity component (1) $ 134.4 $ 134.4 (1) Included in Accumulated paid-in-capital on the Consolidated Balance Sheets. |
Summary of effective interest rate and the interest expense for the contractual interest and the accretion of debt discount | The following table presents the effective interest rate and the interest expense for the contractual interest and the accretion of debt discount ( in millions, except for the effective interest rate ): Three Months Ended Nine Months Ended April 2, 2016 March 28, 2015 April 2, 2016 March 28, 2015 Effective interest rate 5.4 % 5.4 % 5.4 % 5.4 % Interest expense-contractual interest $ 1.0 $ 1.0 $ 3.0 $ 3.0 Accretion of debt discount 6.7 6.3 19.9 18.8 |
Restructuring and Related Cha35
Restructuring and Related Charges (Tables) | 9 Months Ended |
Apr. 02, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of various restructuring plans | The adjustments to the accrued restructuring expenses related to all of the Company’s restructuring plans described below for the three and nine months ended April 2, 2016 were as follows (in millions) : Balance Nine Months Ended April 2, 2016 Charges Cash Settlements Non-cash Settlements and Other Adjustments Balance April 2, 2016 Three Months Ended April 2, 2016 Charges Fiscal 2016 Plan NE and SE Agile Restructuring Plan (Workforce Reduction) $ — $ 3.0 $ (1.1 ) $ — $ 1.9 $ — Fiscal 2015 Plan NE, SE and Shared Service Separation Restructuring Plan (Workforce Reduction) 14.9 (0.6 ) (11.7 ) (0.2 ) 2.4 (0.1 ) Fiscal 2014 Plans NE Realignment Plan (Workforce Reduction) 0.6 (0.1 ) (0.5 ) — — — Shared Services Restructuring Plan (Workforce Reduction) 0.7 — (0.7 ) — — — NE Product Strategy Restructuring Plan (Workforce Reduction) 2.3 — (0.5 ) — — 1.8 — NE Lease Restructuring Plan 5.2 0.2 (1.0 ) — 4.4 — Central Finance and IT Restructuring Plan (Workforce Reduction) 1.1 (0.7 ) (0.1 ) — 0.3 — Plans Prior to Fiscal 2014 2.4 (0.1 ) (0.8 ) — 1.5 — Total $ 27.2 $ 1.7 $ (16.4 ) $ (0.2 ) $ 12.3 $ (0.1 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Apr. 02, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of the impact on the entity's results of operations of recording stock-based compensation by function | The impact on the Company’s results of operations of recording stock-based compensation by function for the three and nine months ended April 2, 2016 and March 28, 2015 was as follows (in millions): Three Months Ended Nine Months Ended April 2, 2016 March 28, 2015 April 2, 2016 March 28, 2015 Cost of sales $ 1.1 $ 1.1 $ 3.7 $ 3.1 Research and development 2.0 2.0 6.7 5.9 Selling, general and administrative 6.0 11.7 23.6 26.8 Stock-based compensation $ 9.1 $ 14.8 $ 34.0 $ 35.8 |
Schedule of assumptions used to estimate the fair value of new MSU awards on the date of grant | The Company estimates the fair value of the new MSUs granted using a Monte Carlo simulation based on the assumptions described below for the following periods: Nine Months Ended April 2, 2016 March 28, 2015 Volatility of common stock 33.6 % 40.8 % Average volatility of peer companies 52.8 % 53.4 % Average correlation coefficient of peer companies 0.1047 0.2156 Risk-free interest rate 0.8 % 0.6 % |
Employee Pension and Other Be37
Employee Pension and Other Benefit Plans (Tables) | 9 Months Ended |
Apr. 02, 2016 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Schedule of net periodic cost for the pension and benefits plans | The following table presents the components of the net periodic cost for the pension and benefits plans ( in millions ): Three Months Ended Nine Months Ended Pension Benefits April 2, 2016 March 28, 2015 April 2, 2016 March 28, 2015 Service cost $ 0.1 $ 0.1 $ 0.3 $ 0.2 Interest cost 0.7 0.8 2.2 2.8 Expected return on plan assets (0.4 ) (0.4 ) (1.2 ) (1.2 ) Recognized net actuarial losses 0.2 0.1 0.5 0.3 Net periodic benefit cost $ 0.6 $ 0.6 $ 1.8 $ 2.1 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Apr. 02, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of changes in the entity's warranty reserve | The following table presents the changes in the Company’s warranty reserve during fiscal 2016 and fiscal 2015 ( in millions ): Three Months Ended Nine Months Ended April 2, 2016 March 28, 2015 April 2, 2016 March 28, 2015 Balance as of beginning of period $ 4.3 $ 3.5 $ 3.7 $ 3.6 Provision for warranty 0.8 1.0 2.5 2.9 Utilization of reserve (0.8 ) (0.9 ) (2.3 ) (3.0 ) Adjustments related to pre-existing warranties (including changes in estimates) 0.2 — 0.6 0.1 Balance as of end of period $ 4.5 $ 3.6 $ 4.5 $ 3.6 |
Operating Segments (Tables)
Operating Segments (Tables) | 9 Months Ended |
Apr. 02, 2016 | |
Segment Reporting [Abstract] | |
Schedule of information on reportable segments | Information on reportable segments is as follows (in millions): Three Months Ended April 2, 2016 Network and Service Enablement Network Enablement Service Enablement Network and Service Enablement Optical Security and Performance Products Total Segment Measures Corporate Reconciling Items Consolidated GAAP Measures Net revenue $ 123.1 $ 35.2 $ 158.3 $ 62.1 $ 220.4 $ — $ 220.4 Gross profit 80.7 19.8 100.5 35.9 136.4 (5.1 ) 131.3 Gross margin 65.6 % 56.3 % 63.5 % 57.8 % 61.9 % 59.6 % Operating (loss) income (0.1 ) 26.3 26.2 (19.0 ) 7.2 Operating margin (0.1 )% 42.4 % 11.9 % 3.3 % Three Months Ended March 28, 2015 Network and Service Enablement Network Enablement Service Enablement Network and Service Enablement Optical Security and Performance Products Total Segment Measures Corporate Reconciling Items Consolidated GAAP Measures Net revenue $ 124.1 $ 39.9 $ 164.0 $ 48.4 $ 212.4 $ — $ 212.4 Gross profit 83.2 28.2 111.4 26.3 137.7 (10.7 ) 127.0 Gross margin 67.0 % 70.7 % 67.9 % 54.3 % 64.8 % 59.8 % Operating income (loss) 1.7 17.3 19.0 (42.2 ) (23.2 ) Operating margin 1.0 % 35.7 % 8.9 % (10.9 )% Three Months Ended April 2, 2016 March 28, 2015 Corporate reconciling items impacting gross profit: Total segment gross profit $ 136.4 $ 137.7 Stock-based compensation (1.1 ) (1.1 ) Amortization of intangibles (4.1 ) (9.0 ) Other charges related to non-recurring activities 0.1 (0.6 ) GAAP gross profit $ 131.3 $ 127.0 Corporate reconciling items impacting operating income (loss): Total segment operating income $ 26.2 $ 19.0 Stock-based compensation (9.1 ) (14.8 ) Amortization of intangibles (7.7 ) (13.8 ) Other charges related to non-recurring activities (1) (2.3 ) (5.8 ) Restructuring and related charges 0.1 (7.8 ) GAAP operating income (loss) from continuing operations $ 7.2 $ (23.2 ) (1) During the three months ended April 2, 2016 and March 28, 2015 , other charges related to non-recurring activities primarily consisted of Viavi-specific incremental charges for professional fees and additional personnel costs to complete the separation as well as transformational initiatives such as the implementation of simplified automated processes, site consolidations, reorganizations, and the insourcing or outsourcing of activities. Nine Months Ended April 2, 2016 Network and Service Enablement Network Enablement Service Enablement Network and Service Enablement Optical Security and Performance Products Total Segment Measures Corporate Reconciling Items Consolidated GAAP Measures Net revenue $ 377.1 $ 120.0 $ 497.1 $ 185.1 $ 682.2 $ — $ 682.2 Gross profit 247.0 77.7 324.7 105.7 430.4 (16.8 ) 413.6 Gross margin 65.5 % 64.8 % 65.3 % 57.1 % 63.1 % 60.6 % Operating (loss) income 10.3 75.1 85.4 (71.9 ) 13.5 Operating margin 2.1 % 40.6 % 12.5 % 2.0 % Nine Months Ended March 28, 2015 Network and Service Enablement Network Enablement Service Enablement Network and Service Enablement Optical Security and Performance Products Total Segment Measures Corporate Reconciling Items Consolidated GAAP Measures Net revenue $ 374.6 $ 137.2 $ 511.8 $ 142.3 $ 654.1 $ — $ 654.1 Gross profit 248.0 95.6 343.6 76.1 419.7 (30.7 ) 389.0 Gross margin 66.2 % 69.7 % 67.1 % 53.5 % 64.2 % 59.5 % Operating income (loss) 2.4 48.7 51.1 (107.9 ) (56.8 ) Operating margin 0.5 % 34.2 % 7.8 % (8.7 )% Nine Months Ended April 2, 2016 March 28, 2015 Corporate reconciling items impacting gross profit: Total segment gross profit $ 430.4 $ 419.7 Stock-based compensation (3.7 ) (3.1 ) Amortization of intangibles (13.0 ) (26.3 ) Other charges related to non-recurring activities (0.1 ) (1.3 ) GAAP gross profit $ 413.6 $ 389.0 Corporate reconciling items impacting operating income (loss): Total segment operating income $ 85.4 $ 51.1 Stock-based compensation (34.0 ) (35.8 ) Amortization of intangibles (24.1 ) (41.0 ) Other charges related to non-recurring activities (1) (12.1 ) (13.1 ) Restructuring and related charges (1.7 ) (18.0 ) GAAP operating income (loss) from continuing operations $ 13.5 $ (56.8 ) (1) During the nine months ended April 2, 2016 and March 28, 2015 , other charges related to non-recurring activities primarily consisted Viavi-specific incremental charges for professional fees and additional personnel costs to complete the separation as well as transformational initiatives such as the implementation of simplified automated processes, site consolidations, reorganizations, and the insourcing or outsourcing of activities. Additionally, the nine months ended April 2, 2016 included $3.5 million of non-recurring incremental severance and related costs upon the exit of a key executive. |
Basis of Presentation (Details)
Basis of Presentation (Details) | Aug. 01, 2015 | Apr. 02, 2016 | Jul. 02, 2016 | Jun. 27, 2015 |
Organization, Consolidation And Presentation Of Financial Statement [Line Items] | ||||
Fiscal period duration | 364 days | |||
Percentage of outstanding shares distributed | 80.10% | |||
Stock conversion ratio in distribution | 0.2 | |||
Lumentum | ||||
Organization, Consolidation And Presentation Of Financial Statement [Line Items] | ||||
Ownership percentage | 19.90% | |||
Forecast | ||||
Organization, Consolidation And Presentation Of Financial Statement [Line Items] | ||||
Fiscal period duration | 371 days | |||
Minimum | ||||
Organization, Consolidation And Presentation Of Financial Statement [Line Items] | ||||
Fiscal period duration | 364 days | |||
Maximum | ||||
Organization, Consolidation And Presentation Of Financial Statement [Line Items] | ||||
Fiscal period duration | 371 days |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | Aug. 01, 2015 | Apr. 02, 2016 | Oct. 03, 2015 | Mar. 28, 2015 | Apr. 02, 2016 | Mar. 28, 2015 | Jul. 31, 2015 | Jun. 27, 2015 |
Discontinued Operations | ||||||||
Percentage of outstanding shares distributed | 80.10% | |||||||
Stock conversion ratio in distribution | 0.2 | |||||||
Cash contributions agreed to in spin-off | $ 137,600,000 | |||||||
Cash contributions remaining | $ 600,000 | $ 600,000 | ||||||
Proceeds from sale of Lumentum Holdings Inc. Series A Preferred Stock | 35,800,000 | $ 0 | ||||||
Net revenue under Supply Agreement | 220,400,000 | $ 212,400,000 | 682,200,000 | 654,100,000 | ||||
Accumulated other comprehensive loss transferred to Lumentum | 7,800,000 | 7,800,000 | ||||||
Net operating losses used to offset income and gain recognized on separation | 1,000,000,000 | |||||||
Income (loss) from discontinued operations, net of taxes | 5,000,000 | 22,600,000 | (45,400,000) | 51,300,000 | ||||
Tax benefit from discontinued operations | 6,100,000 | |||||||
Spinoff | Lumentum | ||||||||
Discontinued Operations | ||||||||
Deferred tax assets | 29,500,000 | |||||||
Deferred tax liabilities | 1,000,000 | |||||||
Income taxes payable | 3,300,000 | $ 3,700,000 | ||||||
Current income tax receivables | 1,300,000 | |||||||
Other long-term liabilities related to uncertain tax positions | $ 100,000 | |||||||
Net income tax provision for discontinued operations | (22,200,000) | 24,400,000 | (21,600,000) | |||||
Transaction, advisory and other costs to effect the separation | 1,100,000 | $ 5,200,000 | 16,500,000 | $ 8,900,000 | ||||
Spinoff | Lumentum | Discontinued Operations | ||||||||
Discontinued Operations | ||||||||
Net income tax provision | 17,100,000 | |||||||
Spinoff | Lumentum | Federal and State | ||||||||
Discontinued Operations | ||||||||
Net income tax provision for discontinued operations | 7,600,000 | |||||||
Series A Preferred Stock | ||||||||
Discontinued Operations | ||||||||
Proceeds from sale of Lumentum Holdings Inc. Series A Preferred Stock | $ 35,800,000 | |||||||
Shares canceled in transaction (in shares) | 4,195 | |||||||
Lumentum | Supply Commitment | ||||||||
Discontinued Operations | ||||||||
Supply Agreement with Lumentum amount | $ 15,000,000 | |||||||
Net revenue under Supply Agreement | $ 4,400,000 | $ 12,700,000 | ||||||
Amada | Series A Preferred Stock | ||||||||
Discontinued Operations | ||||||||
Number of shares sold (in shares) | 35,805 | |||||||
Lumentum | ||||||||
Discontinued Operations | ||||||||
Retained ownership percentage | 19.90% | |||||||
Lumentum | Viavi Solutions | Series A Preferred Stock | ||||||||
Discontinued Operations | ||||||||
Number of shares sold (in shares) | 40,000 | |||||||
Lumentum | ||||||||
Discontinued Operations | ||||||||
Retained ownership percentage | 19.90% | |||||||
Shares held in investment | 11,700,000 |
Discontinued Operations (Deta42
Discontinued Operations (Details 1) - USD ($) $ in Millions | Apr. 02, 2016 | Aug. 01, 2015 | Jun. 27, 2015 |
Assets: | |||
Current assets of discontinued operations | $ 0 | $ 310.2 | |
Non-current assets of discontinued operations | 0 | 204.2 | |
Liabilities: | |||
Current liabilities of discontinued operations | 0 | 130 | |
Non-current liabilities of discontinued operations | $ 0 | 10.9 | |
Spinoff | Lumentum | |||
Assets: | |||
Cash and cash equivalents | 13.4 | ||
Accounts receivable, net | 150.2 | ||
Inventories, net | 100 | ||
Prepayments and other current assets | 46.6 | ||
Current assets of discontinued operations | 310.2 | ||
Property, plant and equipment, net | 145.4 | ||
Goodwill | 5.6 | ||
Intangibles, net | 21.8 | ||
Other non-current assets | 31.4 | ||
Non-current assets of discontinued operations | 204.2 | ||
Total assets of discontinued operations | 514.4 | ||
Liabilities: | |||
Accounts payable | 79.1 | ||
Accrued payroll and related expenses | 18.3 | ||
Income taxes payable | $ 3.3 | 3.7 | |
Accrued expenses | 17.5 | ||
Other current liabilities | 11.4 | ||
Current liabilities of discontinued operations | 130 | ||
Non-current liabilities of discontinued operations | 10.9 | ||
Total liabilities of discontinued operations | $ 140.9 |
Discontinued Operations (Deta43
Discontinued Operations (Details 2) - Spinoff - Lumentum - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Mar. 28, 2015 | Apr. 02, 2016 | Mar. 28, 2015 | |
Discontinued Operations | |||
Net revenues | $ 198.3 | $ 66.5 | $ 627.3 |
Cost of revenues | 139.1 | 49.8 | 426.5 |
Amortization of acquired technologies | 1.9 | 0.6 | 5.7 |
Gross profit | 57.3 | 16.1 | 195.1 |
Research and development | 34.6 | 12.5 | 104.4 |
Selling, general and administrative | 21.3 | 24.7 | 57.3 |
Restructuring charges | 0.5 | 0.1 | 2.9 |
Total operating expenses | 56.4 | 37.3 | 164.6 |
Income (loss) from operations | 0.9 | (21.2) | 30.5 |
Interest and other income (expense), net | (0.5) | 0 | (0.8) |
Income (loss) before income taxes | 0.4 | (21.2) | 29.7 |
(Benefit from) provision for income taxes | (22.2) | 24.4 | (21.6) |
Net income (loss) from discontinued operations | $ 22.6 | $ (45.6) | $ 51.3 |
Discontinued Operations (Deta44
Discontinued Operations (Details 3) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 02, 2016 | Mar. 28, 2015 | Apr. 02, 2016 | Mar. 28, 2015 | |
Discontinued Operations | ||||
Depreciation expense | $ 29.8 | $ 60.3 | ||
Amortization of other intangibles | $ 3.6 | $ 4.8 | 11.1 | 14.7 |
Stock-based compensation expense | $ 9.1 | $ 14.8 | 34 | 35.8 |
Spinoff | Discontinued Operations | Lumentum | ||||
Discontinued Operations | ||||
Depreciation expense | 3.7 | 32.3 | ||
Amortization of other intangibles | 0.6 | 6 | ||
Stock-based compensation expense | 1.6 | 14.4 | ||
Capital expenditures | $ 5.8 | $ 34 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Aug. 17, 2015 | Apr. 02, 2016 | Mar. 28, 2015 | Apr. 02, 2016 | Mar. 28, 2015 | Aug. 21, 2013 |
Numerator: | ||||||
Income (loss) from continuing operations, net of taxes | $ 27.4 | $ (35.8) | $ 17.1 | $ (99.3) | ||
Income (loss) from discontinued operations, net of taxes | 5 | 22.6 | (45.4) | 51.3 | ||
Net income (loss) | $ 32.4 | $ (13.2) | $ (28.3) | $ (48) | ||
Denominator: | ||||||
Weighted-average number of common shares outstanding - basic (in shares) | 232 | 233.2 | 234.4 | 232.1 | ||
Effect of dilutive securities from stock-based benefit plans - Diluted (in shares) | 2.6 | 0 | 3 | 0 | ||
Shares used in per share calculation - diluted (in shares) | 234.6 | 233.2 | 237.4 | 232.1 | ||
Net income (loss) per share from - basic and diluted: | ||||||
Continuing operations (in dollars per share) | $ 0.12 | $ (0.16) | $ 0.07 | $ (0.43) | ||
Discontinued operations (in dollars per share) | 0.02 | 0.10 | (0.19) | 0.22 | ||
Net income (loss) per share (in dollars per share) | $ 0.14 | $ (0.06) | $ (0.12) | $ (0.21) | ||
Anti-dilutive securities excluded from computation of earnings per share | ||||||
Total potentially dilutive securities (in shares) | 4.2 | 14.1 | 3.3 | 14.4 | ||
2033 Notes | ||||||
Convertible notes | ||||||
Interest rate on senior convertible notes (as a percent) | 0.625% | 0.625% | 0.625% | 0.625% | 0.625% | |
Conversion price of debt (in dollars per share) | $ 11.28 | $ 11.28 | $ 11.28 | $ 11.28 | $ 11.28 | |
Stock options and ESPP | ||||||
Anti-dilutive securities excluded from computation of earnings per share | ||||||
Total potentially dilutive securities (in shares) | 1.2 | 3.7 | 1 | 3.8 | ||
Restricted Stock Units | ||||||
Anti-dilutive securities excluded from computation of earnings per share | ||||||
Total potentially dilutive securities (in shares) | 3 | 10.4 | 2.3 | 10.6 |
Accumulated Other Comprehensi46
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) shares in Millions, $ in Millions | Aug. 01, 2015 | Apr. 02, 2016 | Mar. 28, 2015 | Apr. 02, 2016 | Mar. 28, 2015 |
Changes in accumulated other comprehensive income (loss) by component | |||||
Balance at the beginning of the period | $ 1,101.4 | ||||
Transfer to Lumentum | $ (7.8) | (7.8) | |||
Other comprehensive (loss) income before reclassification | 183.2 | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | (38.3) | ||||
Net change in Accumulated other comprehensive income (loss) | $ 13.3 | $ (26.9) | 144.9 | $ (63) | |
Balance at the end of the period | $ 837.4 | 837.4 | |||
Tax impact of amortization of actuarial losses | 0 | ||||
Lumentum | |||||
Changes in accumulated other comprehensive income (loss) by component | |||||
Shares held in investment (in shares) | 11.7 | ||||
Marketable equity securities | |||||
Changes in accumulated other comprehensive income (loss) by component | |||||
Number of shares sold (in shares) | 2.5 | ||||
Marketable equity securities | Lumentum | |||||
Changes in accumulated other comprehensive income (loss) by component | |||||
Unrealized gain on marketable equity securities | 205.3 | ||||
Income tax expense impact from unrealized holding gains on marketable equity securities | 3.7 | ||||
Realized gain on sale of marketable equity securities | $ 39.7 | ||||
Number of shares sold (in shares) | 2.5 | ||||
Shares held in investment (in shares) | 11.7 | ||||
Income tax expense impact from realized gain on sale of marketable equity securities | $ 1 | ||||
Total | |||||
Changes in accumulated other comprehensive income (loss) by component | |||||
Balance at the beginning of the period | (48) | ||||
Balance at the end of the period | 89.1 | 89.1 | |||
Unrealized gains (losses) on available-for-sale investments | |||||
Changes in accumulated other comprehensive income (loss) by component | |||||
Balance at the beginning of the period | (3.2) | ||||
Transfer to Lumentum | 0 | ||||
Other comprehensive (loss) income before reclassification | 201.6 | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | (38.8) | ||||
Net change in Accumulated other comprehensive income (loss) | 162.8 | ||||
Balance at the end of the period | 159.6 | 159.6 | |||
Foreign currency translation adjustments | |||||
Changes in accumulated other comprehensive income (loss) by component | |||||
Balance at the beginning of the period | (29.2) | ||||
Transfer to Lumentum | (8.9) | ||||
Other comprehensive (loss) income before reclassification | (18.4) | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | ||||
Net change in Accumulated other comprehensive income (loss) | (18.4) | ||||
Balance at the end of the period | (56.5) | (56.5) | |||
Defined benefit obligation, net of tax | |||||
Changes in accumulated other comprehensive income (loss) by component | |||||
Balance at the beginning of the period | (15.6) | ||||
Transfer to Lumentum | 1.1 | ||||
Other comprehensive (loss) income before reclassification | 0 | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | 0.5 | ||||
Net change in Accumulated other comprehensive income (loss) | 0.5 | ||||
Balance at the end of the period | $ (14) | $ (14) |
Balance Sheet and Other Detai47
Balance Sheet and Other Details (Details) - USD ($) $ in Millions | 9 Months Ended | |
Apr. 02, 2016 | Jun. 27, 2015 | |
Activities and balances for allowance for doubtful accounts and allowance for sales returns | ||
Balance at Beginning of Period | $ 3.1 | |
Charged to Costs and Expenses | 2.8 | |
Adjustments | (2.1) | |
Balance at End of Period | 3.8 | |
Inventories, net | ||
Finished goods | 30.5 | $ 31.5 |
Work in process | 6.8 | 6.8 |
Raw materials | 15.2 | 15.5 |
Inventories, net | 52.5 | $ 53.8 |
Allowance for doubtful accounts | ||
Activities and balances for allowance for doubtful accounts and allowance for sales returns | ||
Balance at Beginning of Period | 2.4 | |
Charged to Costs and Expenses | 0.1 | |
Adjustments | (0.4) | |
Balance at End of Period | 2.1 | |
Allowance for sales returns | ||
Activities and balances for allowance for doubtful accounts and allowance for sales returns | ||
Balance at Beginning of Period | 0.7 | |
Charged to Costs and Expenses | 2.7 | |
Adjustments | (1.7) | |
Balance at End of Period | $ 1.7 |
Balance Sheet and Other Detai48
Balance Sheet and Other Details (Details 2) - USD ($) $ in Millions | Apr. 02, 2016 | Jun. 27, 2015 |
Prepayments and other current assets | ||
Prepayments | $ 12.5 | $ 15.7 |
Other current assets | 22.2 | 22.5 |
Prepayments and other current assets | 34.7 | 38.2 |
Other current liabilities | ||
Deferred compensation plan | 2.4 | 3 |
Warranty | 2.6 | 2.3 |
Value-added tax | 2.8 | 1.7 |
Restructuring | 7 | 19.1 |
Deferred income taxes | 0 | 7.1 |
Other | 2.9 | 10.3 |
Other current liabilities | 17.7 | 43.5 |
Other non-current liabilities | ||
Pension and post-employment benefits | 83.5 | 86.9 |
Financing obligation | 29 | 29.1 |
Restructuring accrual | 5.3 | 8.2 |
Long-term deferred revenue | 24.2 | 23.6 |
Other | 30.4 | 20.6 |
Other non-current liabilities | $ 172.4 | $ 168.4 |
Investments and Fair Value Me49
Investments and Fair Value Measurements (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Apr. 02, 2016 | Mar. 28, 2015 | Apr. 02, 2016 | Mar. 28, 2015 | Jun. 27, 2015 | |
Available-For-Sale Investments | |||||
Amortized Cost/ Carrying Cost | $ 423.5 | $ 423.5 | $ 496.6 | ||
Gross Unrealized Gains | 165.7 | 165.7 | 0.1 | ||
Gross Unrealized Losses | (0.5) | (0.5) | (0.3) | ||
Fair Value | 588.7 | $ 588.7 | 496.4 | ||
Term of maturities of securities classified as current assets included in short-term investments | 12 months | ||||
Other-than-temporary impairment loss | 0 | $ 0 | $ 0 | $ 0 | |
Cash equivalents | |||||
Available-For-Sale Investments | |||||
Fair Value | 34.7 | 34.7 | 33.7 | ||
Short-term investments | |||||
Available-For-Sale Investments | |||||
Fair Value | 309.1 | 309.1 | 461.9 | ||
Other non-current assets | |||||
Available-For-Sale Investments | |||||
Fair Value | 0.6 | 0.6 | 0.8 | ||
Debt securities | |||||
Available-For-Sale Investments | |||||
Amortized Cost/ Carrying Cost | 344.7 | 344.7 | |||
Gross Unrealized Gains | 0.2 | 0.2 | |||
Gross Unrealized Losses | (0.5) | (0.5) | |||
Fair Value | 344.4 | 344.4 | |||
Contractual maturities of debt securities classified as available-for-sale securities, Amortized Cost/Carrying Cost | |||||
Amortized cost of amounts maturing in less than 1 year | 251.6 | 251.6 | |||
Amortized cost of amounts maturing in 1-5 years | 91.4 | 91.4 | |||
Amortized cost of amounts maturing in more than 5 years | 1.7 | 1.7 | |||
Total amortized cost of debt available-for-sale securities | 344.7 | 344.7 | |||
Contractual maturities of the debt securities classified as available-for-sale securities, Estimated Fair Value | |||||
Estimated fair value amounts maturing in less than 1 year | 251.6 | 251.6 | |||
Estimated fair value amounts maturing in 1 -5 years | 91.4 | 91.4 | |||
Estimated fair value amounts maturing in more than 5 years | 1.4 | 1.4 | |||
Total estimated fair value of debt available-for-sale securities | 344.4 | 344.4 | |||
U.S. treasuries | |||||
Available-For-Sale Investments | |||||
Amortized Cost/ Carrying Cost | 60.2 | 60.2 | 51.9 | ||
Gross Unrealized Gains | 0 | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | 0 | ||
Fair Value | 60.2 | 60.2 | 51.9 | ||
U.S. agencies | |||||
Available-For-Sale Investments | |||||
Amortized Cost/ Carrying Cost | 29.1 | 29.1 | 96 | ||
Gross Unrealized Gains | 0 | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | 0 | ||
Fair Value | 29.1 | 29.1 | 96 | ||
Municipal bonds and sovereign debt instruments | |||||
Available-For-Sale Investments | |||||
Amortized Cost/ Carrying Cost | 2.3 | 2.3 | 4 | ||
Gross Unrealized Gains | 0 | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | 0 | ||
Fair Value | 2.3 | 2.3 | 4 | ||
Asset-backed securities | |||||
Available-For-Sale Investments | |||||
Amortized Cost/ Carrying Cost | 46.3 | 46.3 | 70.6 | ||
Gross Unrealized Gains | 0.1 | 0.1 | 0 | ||
Gross Unrealized Losses | (0.4) | (0.4) | (0.2) | ||
Fair Value | 46 | 46 | 70.4 | ||
Corporate securities | |||||
Available-For-Sale Investments | |||||
Amortized Cost/ Carrying Cost | 206.8 | 206.8 | 274.1 | ||
Gross Unrealized Gains | 0.1 | 0.1 | 0.1 | ||
Gross Unrealized Losses | (0.1) | (0.1) | (0.1) | ||
Fair Value | 206.8 | 206.8 | $ 274.1 | ||
Marketable equity securities | |||||
Available-For-Sale Investments | |||||
Amortized Cost/ Carrying Cost | 78.8 | 78.8 | |||
Gross Unrealized Gains | 165.5 | 165.5 | |||
Gross Unrealized Losses | 0 | 0 | |||
Fair Value | $ 244.3 | 244.3 | |||
Number of shares sold (in shares) | 2.5 | ||||
Realized gain on sale of marketable equity securities | $ 39.7 | ||||
Income tax effect related to gain on sale of marketable securitiy | 1 | ||||
Marketable equity securities | Short-term investments | |||||
Available-For-Sale Investments | |||||
Fair Value | $ 244.3 | $ 244.3 |
Investments and Fair Value Me50
Investments and Fair Value Measurements (Details 2) - Short-term investments - Trading securities - USD ($) $ in Millions | Apr. 02, 2016 | Jun. 27, 2015 |
Trading securities related to deferred compensation plan | ||
Deferred compensation plan assets | $ 2.4 | $ 3.4 |
Debt securities | ||
Trading securities related to deferred compensation plan | ||
Deferred compensation plan assets | 0.4 | 0.6 |
Money market instruments and funds | ||
Trading securities related to deferred compensation plan | ||
Deferred compensation plan assets | 0.7 | 0.7 |
Marketable equity investments | ||
Trading securities related to deferred compensation plan | ||
Deferred compensation plan assets | $ 1.3 | $ 2.1 |
Investments and Fair Value Me51
Investments and Fair Value Measurements (Details 3) - USD ($) $ in Millions | 9 Months Ended | |
Apr. 02, 2016 | Mar. 28, 2015 | |
Maximum | ||
Foreign Currency Forward Contracts | ||
Foreign currency forward contracts, expiration period | 120 days | 120 days |
Recurring basis | Total fair value | ||
Fair Value Measurements | ||
Total debt available-for-sale securities | $ 344.4 | |
Marketable equity securities | 244.3 | |
Money market funds | 273.7 | |
Trading securities | 2.4 | |
Total assets | 864.8 | |
Recurring basis | Cash and cash equivalents | ||
Fair Value Measurements | ||
Total assets | 293.5 | |
Recurring basis | Short-term investments | ||
Fair Value Measurements | ||
Total assets | 555.8 | |
Recurring basis | Restricted cash | ||
Fair Value Measurements | ||
Total assets | 11.1 | |
Recurring basis | Other non-current assets | ||
Fair Value Measurements | ||
Total assets | 4.4 | |
Recurring basis | U.S. treasuries | Total fair value | ||
Fair Value Measurements | ||
Total debt available-for-sale securities | 60.2 | |
Recurring basis | U.S. agencies | Total fair value | ||
Fair Value Measurements | ||
Total debt available-for-sale securities | 29.1 | |
Recurring basis | Municipal bonds and sovereign debt instruments | Total fair value | ||
Fair Value Measurements | ||
Total debt available-for-sale securities | 2.3 | |
Recurring basis | Asset-backed securities | Total fair value | ||
Fair Value Measurements | ||
Total debt available-for-sale securities | 46 | |
Recurring basis | Corporate securities | Total fair value | ||
Fair Value Measurements | ||
Total debt available-for-sale securities | 206.8 | |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value Measurements | ||
Total debt available-for-sale securities | 60.2 | |
Marketable equity securities | 244.3 | |
Money market funds | 273.7 | |
Trading securities | 2.4 | |
Total assets | 580.6 | |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. treasuries | ||
Fair Value Measurements | ||
Total debt available-for-sale securities | 60.2 | |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. agencies | ||
Fair Value Measurements | ||
Total debt available-for-sale securities | 0 | |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Municipal bonds and sovereign debt instruments | ||
Fair Value Measurements | ||
Total debt available-for-sale securities | 0 | |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Asset-backed securities | ||
Fair Value Measurements | ||
Total debt available-for-sale securities | 0 | |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate securities | ||
Fair Value Measurements | ||
Total debt available-for-sale securities | 0 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | ||
Fair Value Measurements | ||
Total debt available-for-sale securities | 284.2 | |
Marketable equity securities | 0 | |
Money market funds | 0 | |
Trading securities | 0 | |
Total assets | 284.2 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | U.S. treasuries | ||
Fair Value Measurements | ||
Total debt available-for-sale securities | 0 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | U.S. agencies | ||
Fair Value Measurements | ||
Total debt available-for-sale securities | 29.1 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | Municipal bonds and sovereign debt instruments | ||
Fair Value Measurements | ||
Total debt available-for-sale securities | 2.3 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | Asset-backed securities | ||
Fair Value Measurements | ||
Total debt available-for-sale securities | 46 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | Corporate securities | ||
Fair Value Measurements | ||
Total debt available-for-sale securities | $ 206.8 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Jun. 27, 2015 | Apr. 02, 2016 | |
Changes in goodwill | ||
Balance at the beginning of the period | $ 255.5 | |
Currency translation and other adjustments | (4.2) | |
Goodwill allocation - WaveReady | (6) | |
Balance at the end of the period | $ 255.5 | 245.3 |
Goodwill impairment | 0 | |
Network Enablement | ||
Changes in goodwill | ||
Balance at the beginning of the period | 154.5 | |
Currency translation and other adjustments | (2.7) | |
Goodwill allocation - WaveReady | (6) | |
Balance at the end of the period | 154.5 | 145.8 |
Service Enablement | ||
Changes in goodwill | ||
Balance at the beginning of the period | 92.7 | |
Currency translation and other adjustments | (1.5) | |
Goodwill allocation - WaveReady | 0 | |
Balance at the end of the period | 92.7 | 91.2 |
Optical Security and Performance Products | ||
Changes in goodwill | ||
Balance at the beginning of the period | 8.3 | |
Currency translation and other adjustments | 0 | |
Goodwill allocation - WaveReady | 0 | |
Balance at the end of the period | $ 8.3 | $ 8.3 |
Acquired Developed Technology53
Acquired Developed Technology and Other Intangibles (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Apr. 02, 2016 | Oct. 03, 2015 | Mar. 28, 2015 | Apr. 02, 2016 | Mar. 28, 2015 | Jun. 27, 2015 | |
Acquired developed technology, customer relationships and other intangibles | ||||||
Gross carrying amount of finite lived intangibles | $ 616.6 | $ 616.6 | $ 617.1 | |||
Accumulated Amortization | (548) | (548) | (528.3) | |||
Net carrying amount of finite lived intangibles | 68.6 | 68.6 | 88.8 | |||
Net carrying amount of in-process research and development intangibles | 0.8 | 0.8 | 1.8 | |||
Gross Carrying Amount | 617.4 | 617.4 | 618.9 | |||
Net carrying amount of intangibles | 69.4 | 69.4 | 90.6 | |||
Amortization of acquired developed technologies | 4.1 | $ 9 | 13 | $ 26.3 | ||
Amortization of other intangibles | 3.6 | 4.8 | 11.1 | 14.7 | ||
Total amortization of intangible assets | 7.7 | $ 13.8 | 24.1 | $ 41 | ||
Estimated future amortization expense | ||||||
Remainder of 2016 | 7.6 | 7.6 | ||||
2,017 | 29.2 | 29.2 | ||||
2,018 | 20.8 | 20.8 | ||||
2,019 | 9.3 | 9.3 | ||||
2,020 | 1.3 | 1.3 | ||||
Thereafter | 0.4 | 0.4 | ||||
Total amortization | 68.6 | 68.6 | ||||
Acquired developed technology | ||||||
Acquired developed technology, customer relationships and other intangibles | ||||||
Gross carrying amount of finite lived intangibles | 421.9 | 421.9 | 418.9 | |||
Accumulated Amortization | (385.1) | (385.1) | (373.6) | |||
Net carrying amount of finite lived intangibles | 36.8 | 36.8 | 45.3 | |||
Transfer from indefinite to finite lived intangible assets | $ 1.8 | |||||
Useful life | 36 months | |||||
Customer relationships | ||||||
Acquired developed technology, customer relationships and other intangibles | ||||||
Gross carrying amount of finite lived intangibles | 175.4 | 175.4 | 178.7 | |||
Accumulated Amortization | (144) | (144) | (135.8) | |||
Net carrying amount of finite lived intangibles | 31.4 | 31.4 | 42.9 | |||
Other | ||||||
Acquired developed technology, customer relationships and other intangibles | ||||||
Gross carrying amount of finite lived intangibles | 19.3 | 19.3 | 19.5 | |||
Accumulated Amortization | (18.9) | (18.9) | (18.9) | |||
Net carrying amount of finite lived intangibles | $ 0.4 | $ 0.4 | $ 0.6 |
Debts and Letters of Credit (De
Debts and Letters of Credit (Details) | Aug. 17, 2015$ / shares | Aug. 21, 2013USD ($) | Apr. 02, 2016USD ($)letter_of_credit$ / shares | Mar. 28, 2015USD ($)$ / shares | Apr. 02, 2016USD ($)letter_of_credit$ / shares | Mar. 28, 2015USD ($)$ / shares | Jun. 27, 2015USD ($) |
Carrying amounts of the liability and equity components: | |||||||
Short-term debt | $ 0 | $ 0 | $ 0 | ||||
Outstanding Letters of Credit | |||||||
Number of standby letters of credit | letter_of_credit | 12 | 12 | |||||
Letters of credit outstanding | $ 14,900,000 | $ 14,900,000 | |||||
0.625% Senior Convertible Notes | |||||||
Carrying amounts of the liability and equity components: | |||||||
Principal amount of notes | 650,000,000 | 650,000,000 | 650,000,000 | ||||
Unamortized discount of liability component | (68,500,000) | (68,500,000) | (88,400,000) | ||||
Carrying value of the liability component | $ 515,600,000 | 581,500,000 | 581,500,000 | 561,600,000 | |||
Carrying amount of equity component | 134,400,000 | $ 134,400,000 | $ 134,400,000 | 134,400,000 | |||
Aggregate principal amount of convertible debt | $ 650,000,000 | ||||||
Interest rate on senior convertible notes (as a percent) | 0.625% | 0.625% | 0.625% | 0.625% | 0.625% | ||
Proceeds from issuance of convertible notes after issuance costs | $ 636,300,000 | ||||||
Conversion price of debt (in dollars per share) | $ / shares | $ 11.28 | $ 11.28 | $ 11.28 | $ 11.28 | $ 11.28 | ||
Discount rate used to calculate the carrying value of the liability component of the convertible debt (as a percent) | 5.40% | ||||||
Variable rate basis term on which discount rate is based | 5 years | ||||||
Remaining term of convertible notes | 2 years 5 months 6 days | ||||||
Deferred finance costs | $ 13,700,000 | ||||||
Liability component, debt issuance cost | 10,900,000 | ||||||
Equity component, debt issuance cost | $ 2,800,000 | ||||||
Fair market value of convertible debt | $ 636,900,000 | $ 636,900,000 | $ 644,000,000 | ||||
Interest expense for the contractual interest and the amortization of debt discount | |||||||
Effective interest rate (as a percent) | 5.40% | 5.40% | 5.40% | 5.40% | 5.40% | ||
Interest expense-contractual interest | $ 1,000,000 | $ 1,000,000 | $ 3,000,000 | $ 3,000,000 | |||
Accretion of debt discount | 6,700,000 | $ 6,300,000 | 19,900,000 | $ 18,800,000 | |||
0.625% Senior Convertible Notes | Other non-current assets | |||||||
Carrying amounts of the liability and equity components: | |||||||
Unamortized portion of debt issuance cost | $ 5,600,000 | $ 5,600,000 |
Restructuring and Related Cha55
Restructuring and Related Charges (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 18 Months Ended | ||||||||
Apr. 02, 2016USD ($) | Jan. 02, 2016USD ($)employee | Mar. 28, 2015USD ($) | Jun. 28, 2014employee | Mar. 29, 2014employee | Dec. 28, 2013employee | Apr. 02, 2016USD ($) | Mar. 28, 2015USD ($) | Apr. 02, 2016USD ($)employee | Jun. 27, 2015USD ($) | Sep. 27, 2014company | |
Summary of various restructuring plans | |||||||||||
Accrual balance at the beginning of the period | $ 27.2 | ||||||||||
Restructuring Charges | $ (0.1) | $ 7.8 | 1.7 | $ 18 | |||||||
Cash Settlements | (16.4) | ||||||||||
Non-cash Settlements and Other Adjustments | (0.2) | ||||||||||
Accrual balance at the end of the period | 12.3 | 12.3 | $ 12.3 | ||||||||
Long-term restructuring accrual | 5.3 | 5.3 | 5.3 | $ 8.2 | |||||||
Number of new public entities | company | 2 | ||||||||||
NE Realignment Plan | |||||||||||
Summary of various restructuring plans | |||||||||||
Number of employees expected to be reduced (employee) | employee | 100 | ||||||||||
Shared Services Restructuring Plan | |||||||||||
Summary of various restructuring plans | |||||||||||
Number of employees expected to be reduced (employee) | employee | 40 | ||||||||||
NE Product Strategy Restructuring Plan | |||||||||||
Summary of various restructuring plans | |||||||||||
Number of employees expected to be reduced (employee) | employee | 60 | ||||||||||
NE Lease Restructuring Plan | |||||||||||
Summary of various restructuring plans | |||||||||||
Accrual balance at the beginning of the period | 5.2 | ||||||||||
Restructuring Charges | 0 | 0.2 | |||||||||
Cash Settlements | (1) | ||||||||||
Non-cash Settlements and Other Adjustments | 0 | ||||||||||
Accrual balance at the end of the period | 4.4 | 4.4 | 4.4 | ||||||||
Contractual obligations under the operating lease, net of sublease income, fair value | 4.4 | 4.4 | 4.4 | ||||||||
Central Finance and IT Restructuring Plan | |||||||||||
Summary of various restructuring plans | |||||||||||
Number of employees expected to be reduced (employee) | employee | 20 | ||||||||||
Plans Prior to Fiscal 2014 | |||||||||||
Summary of various restructuring plans | |||||||||||
Accrual balance at the beginning of the period | 2.4 | ||||||||||
Restructuring Charges | 0 | (0.1) | |||||||||
Cash Settlements | (0.8) | ||||||||||
Non-cash Settlements and Other Adjustments | 0 | ||||||||||
Accrual balance at the end of the period | 1.5 | 1.5 | 1.5 | ||||||||
Workforce Reduction | NE and SE Agile Restructuring Plan | |||||||||||
Summary of various restructuring plans | |||||||||||
Accrual balance at the beginning of the period | 0 | ||||||||||
Restructuring Charges | 0 | $ 3 | 3 | ||||||||
Cash Settlements | (1.1) | ||||||||||
Non-cash Settlements and Other Adjustments | 0 | ||||||||||
Accrual balance at the end of the period | 1.9 | 1.9 | 1.9 | ||||||||
Number of employees expected to be reduced (employee) | employee | 50 | ||||||||||
Workforce Reduction | NE, SE, and Shared Separation Restructuring Plan | |||||||||||
Summary of various restructuring plans | |||||||||||
Accrual balance at the beginning of the period | 14.9 | ||||||||||
Restructuring Charges | (0.1) | (0.6) | |||||||||
Cash Settlements | (11.7) | ||||||||||
Non-cash Settlements and Other Adjustments | (0.2) | ||||||||||
Accrual balance at the end of the period | 2.4 | 2.4 | $ 2.4 | ||||||||
Number of employees expected to be reduced (employee) | employee | 330 | ||||||||||
Workforce Reduction | NE Realignment Plan | |||||||||||
Summary of various restructuring plans | |||||||||||
Accrual balance at the beginning of the period | 0.6 | ||||||||||
Restructuring Charges | 0 | (0.1) | |||||||||
Cash Settlements | (0.5) | ||||||||||
Non-cash Settlements and Other Adjustments | 0 | ||||||||||
Accrual balance at the end of the period | 0 | 0 | $ 0 | ||||||||
Workforce Reduction | Shared Services Restructuring Plan | |||||||||||
Summary of various restructuring plans | |||||||||||
Accrual balance at the beginning of the period | 0.7 | ||||||||||
Restructuring Charges | 0 | 0 | |||||||||
Cash Settlements | (0.7) | ||||||||||
Non-cash Settlements and Other Adjustments | 0 | ||||||||||
Accrual balance at the end of the period | 0 | 0 | 0 | ||||||||
Workforce Reduction | NE Product Strategy Restructuring Plan | |||||||||||
Summary of various restructuring plans | |||||||||||
Accrual balance at the beginning of the period | 2.3 | ||||||||||
Restructuring Charges | 0 | 0 | |||||||||
Cash Settlements | (0.5) | ||||||||||
Non-cash Settlements and Other Adjustments | 0 | ||||||||||
Accrual balance at the end of the period | 1.8 | 1.8 | 1.8 | ||||||||
Workforce Reduction | Central Finance and IT Restructuring Plan | |||||||||||
Summary of various restructuring plans | |||||||||||
Accrual balance at the beginning of the period | 1.1 | ||||||||||
Restructuring Charges | 0 | (0.7) | |||||||||
Cash Settlements | (0.1) | ||||||||||
Non-cash Settlements and Other Adjustments | 0 | ||||||||||
Accrual balance at the end of the period | $ 0.3 | $ 0.3 | $ 0.3 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Apr. 02, 2016 | Mar. 28, 2015 | Apr. 02, 2016 | Mar. 28, 2015 | Jun. 27, 2015 | |
Income Tax Disclosure [Abstract] | |||||
(Benefit from) provision for income taxes | $ 11.3 | $ 4.8 | $ 10.9 | $ 19.1 | |
Valuation Allowance [Line Items] | |||||
Unrecognized tax benefits | 37 | 37 | $ 37.4 | ||
Interest and penalties accrued | 1.7 | 1.7 | |||
Unrecognized tax benefits that may be recognized during the next twelve months | 0.1 | 0.1 | |||
Increase in Lumentum valuation allowance | |||||
Valuation Allowance [Line Items] | |||||
Onetime increase in valuation allowance immediately before the separation transaction | 8.9 | ||||
Continuing operations | |||||
Valuation Allowance [Line Items] | |||||
Tax expense (benefit) from discontinued operations | $ 7.6 | $ (14.6) |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Nov. 30, 2015 | Apr. 02, 2016 | Jan. 02, 2016 | Apr. 02, 2016 | Mar. 28, 2015 | Oct. 31, 2015 | May. 31, 2014 | |
Class of Stock [Line Items] | |||||||
Upfront payment for share repurchase | $ 40,000,000 | $ 4,700,000 | |||||
Common stock | |||||||
Class of Stock [Line Items] | |||||||
Authorized amount under stock repurchase program | $ 40,000,000 | $ 100,000,000 | |||||
Accelerated Share Repurchase | Common stock | |||||||
Class of Stock [Line Items] | |||||||
Upfront payment for share repurchase | $ 40,000,000 | $ 40,000,000 | |||||
Shares delivered and retired (in shares) | 1.3 | 5.3 | |||||
Reduction in stockholders' equity for share repurchase | $ 8,000,000 | $ 32,000,000 | |||||
Final settlement price per share (usd per share) | $ 6.05 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 02, 2016 | Mar. 28, 2015 | Apr. 02, 2016 | Mar. 28, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | $ 9.1 | $ 14.8 | $ 34 | $ 35.8 |
Cost of sales | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | 1.1 | 1.1 | 3.7 | 3.1 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | 2 | 2 | 6.7 | 5.9 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | $ 6 | $ 11.7 | $ 23.6 | $ 26.8 |
Stock-Based Compensation (Det59
Stock-Based Compensation (Details 1) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Apr. 02, 2016 | Apr. 02, 2016 | Mar. 28, 2015 | Jun. 27, 2015 | Aug. 01, 2015 |
Stock-Based Compensation | |||||
Stock-based compensation capitalized to inventory (in dollars) | $ 0.9 | ||||
Total incremental stock-based compensation related to plan modification | $ 13.6 | ||||
Accelerated stock compensation expense from plan modification | $ 9.2 | ||||
Full Value Awards - Total | |||||
Stock-Based Compensation | |||||
Exercise price (in dollars per share) | $ 0 | $ 0 | |||
Unrecognized stock-based compensation | $ 46.5 | $ 46.5 | |||
Estimated amortization period | 2 years 1 month 18 days | ||||
Withholding taxes liability paid | $ 9.8 | $ 17.2 | |||
Remaining incremental expense to be recognized from plan modification | $ 4.4 | ||||
Full Value Awards - Total | Minimum | |||||
Stock-Based Compensation | |||||
Vesting period | 1 year | ||||
Full Value Awards - Total | Maximum | |||||
Stock-Based Compensation | |||||
Vesting period | 4 years | ||||
RSUs | |||||
Stock-Based Compensation | |||||
Granted (in shares) | 6.1 | 5.6 | |||
Restricted Stock Units with Market Conditions (MSU) | |||||
Stock-Based Compensation | |||||
Vesting period | 3 years | ||||
Granted (in shares) | 0.6 | 0.7 | |||
Aggregate grant-date fair value (in dollars) | $ 3.7 | $ 9.4 | |||
Restricted Stock Units with Time Based Conditions | |||||
Stock-Based Compensation | |||||
Vesting period | 3 years | ||||
Granted (in shares) | 5.5 | 4.9 | |||
Percentage of first tranche vested | 33.00% | ||||
Initial vesting period | 1 year | ||||
Subsequent vesting period | 2 years |
Stock-Based Compensation (Det60
Stock-Based Compensation (Details 2) - MSUs - Monte Carlo simulation | 9 Months Ended | |
Apr. 02, 2016 | Mar. 28, 2015 | |
Valuation Assumptions | ||
Volatility of common stock (as a percent) | 33.60% | 40.80% |
Average volatility of peer companies (as a percent) | 52.80% | 53.40% |
Average correlation coefficient of peer companies | 0.1047 | 0.2156 |
Risk-free interest rate (as a percent) | 0.80% | 0.60% |
Employee Pension and Other Be61
Employee Pension and Other Benefit Plans (Details) - USD ($) $ in Millions | Aug. 01, 2015 | Apr. 02, 2016 | Mar. 28, 2015 | Apr. 02, 2016 | Mar. 28, 2015 |
Employee Defined Benefit Plans | |||||
Employer contributions | $ 3.9 | ||||
Components of the net periodic cost for the pension and benefits plans | |||||
Cash outlays expected during fiscal 2016 | 6 | ||||
Pension Benefit Plans | |||||
Components of the net periodic cost for the pension and benefits plans | |||||
Service cost | $ 0.1 | $ 0.1 | 0.3 | $ 0.2 | |
Interest cost | 0.7 | 0.8 | 2.2 | 2.8 | |
Expected return on plan assets | (0.4) | (0.4) | (1.2) | (1.2) | |
Recognized actuarial losses (gains) | 0.2 | 0.1 | 0.5 | 0.3 | |
Net periodic benefit cost | $ 0.6 | $ 0.6 | 1.8 | $ 2.1 | |
Switzerland | Foreign Pension Plan | |||||
Employee Defined Benefit Plans | |||||
Liabilities transferred to Lumentum | $ 6.7 | ||||
Assets transferred to Lumentum | $ 4.6 | ||||
U.K. | Foreign Pension Plan | |||||
Employee Defined Benefit Plans | |||||
Employer contributions | $ 0.7 |
Commitments and Contingencies62
Commitments and Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Apr. 02, 2016 | Mar. 28, 2015 | Apr. 02, 2016 | Mar. 28, 2015 | Jun. 27, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Guarantee liabilities | $ 0 | $ 0 | $ 0 | ||
Product Warranties | |||||
Warranty Term for most products | 3 years | ||||
Changes in warranty reserve | |||||
Balance as of beginning of period | 4.3 | $ 3.5 | $ 3.7 | $ 3.6 | |
Provision for warranty | 0.8 | 1 | 2.5 | 2.9 | |
Utilization of reserve | (0.8) | (0.9) | (2.3) | (3) | |
Adjustments related to pre-existing warranties (including changes in estimates) | 0.2 | 0 | 0.6 | 0.1 | |
Balance as of end of period | $ 4.5 | $ 3.6 | $ 4.5 | $ 3.6 |
Operating Segments (Details)
Operating Segments (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 02, 2016USD ($) | Mar. 28, 2015USD ($) | Apr. 02, 2016USD ($)segmentsubsegment | Mar. 28, 2015USD ($) | |
Information on reportable segments | ||||
Number of broad business categories (in segment) | segment | 2 | |||
Net revenue | $ 220.4 | $ 212.4 | $ 682.2 | $ 654.1 |
Gross profit | $ 131.3 | $ 127 | $ 413.6 | $ 389 |
Gross margin (as a percent) | 59.60% | 59.80% | 60.60% | 59.50% |
Operating income (loss) | $ 7.2 | $ (23.2) | $ 13.5 | $ (56.8) |
Operating margin (as a percent) | 3.30% | (10.90%) | 2.00% | (8.70%) |
Segment Measures | ||||
Information on reportable segments | ||||
Net revenue | $ 220.4 | $ 212.4 | $ 682.2 | $ 654.1 |
Gross profit | $ 136.4 | $ 137.7 | $ 430.4 | $ 419.7 |
Gross margin (as a percent) | 61.90% | 64.80% | 63.10% | 64.20% |
Operating income (loss) | $ 26.2 | $ 19 | $ 85.4 | $ 51.1 |
Operating margin (as a percent) | 11.90% | 8.90% | 12.50% | 7.80% |
Reconciling Items | ||||
Information on reportable segments | ||||
Net revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Gross profit | (5.1) | (10.7) | (16.8) | (30.7) |
Operating income (loss) | (19) | (42.2) | $ (71.9) | (107.9) |
Network and Service Enablement | ||||
Information on reportable segments | ||||
Number of subsegment (in subsegment) | subsegment | 2 | |||
Network and Service Enablement | Segment Measures | ||||
Information on reportable segments | ||||
Net revenue | 158.3 | 164 | $ 497.1 | 511.8 |
Gross profit | $ 100.5 | $ 111.4 | $ 324.7 | $ 343.6 |
Gross margin (as a percent) | 63.50% | 67.90% | 65.30% | 67.10% |
Operating income (loss) | $ (0.1) | $ 1.7 | $ 10.3 | $ 2.4 |
Operating margin (as a percent) | (0.10%) | 1.00% | 2.10% | 0.50% |
Network Enablement | Segment Measures | ||||
Information on reportable segments | ||||
Net revenue | $ 123.1 | $ 124.1 | $ 377.1 | $ 374.6 |
Gross profit | $ 80.7 | $ 83.2 | $ 247 | $ 248 |
Gross margin (as a percent) | 65.60% | 67.00% | 65.50% | 66.20% |
Service Enablement | Segment Measures | ||||
Information on reportable segments | ||||
Net revenue | $ 35.2 | $ 39.9 | $ 120 | $ 137.2 |
Gross profit | $ 19.8 | $ 28.2 | $ 77.7 | $ 95.6 |
Gross margin (as a percent) | 56.30% | 70.70% | 64.80% | 69.70% |
Optical Security and Performance Products | Segment Measures | ||||
Information on reportable segments | ||||
Net revenue | $ 62.1 | $ 48.4 | $ 185.1 | $ 142.3 |
Gross profit | $ 35.9 | $ 26.3 | $ 105.7 | $ 76.1 |
Gross margin (as a percent) | 57.80% | 54.30% | 57.10% | 53.50% |
Operating income (loss) | $ 26.3 | $ 17.3 | $ 75.1 | $ 48.7 |
Operating margin (as a percent) | 42.40% | 35.70% | 40.60% | 34.20% |
Operating Segments (Details 2)
Operating Segments (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 02, 2016 | Mar. 28, 2015 | Apr. 02, 2016 | Mar. 28, 2015 | |
Information on reportable segments | ||||
Amortization of acquired technologies | $ (4.1) | $ (9) | $ (13) | $ (26.3) |
Gross profit | 131.3 | 127 | 413.6 | 389 |
Stock-based compensation | (9.1) | (14.8) | (34) | (35.8) |
Amortization of intangibles | (3.6) | (4.8) | (11.1) | (14.7) |
Restructuring and related charges | 0.1 | (7.8) | (1.7) | (18) |
Operating income (loss) | 7.2 | (23.2) | 13.5 | (56.8) |
Severance and related costs | 3.5 | |||
Segment Measures | ||||
Information on reportable segments | ||||
Gross profit | 136.4 | 137.7 | 430.4 | 419.7 |
Operating income (loss) | 26.2 | 19 | 85.4 | 51.1 |
Reconciling Items | ||||
Information on reportable segments | ||||
Stock-based compensation | (1.1) | (1.1) | (3.7) | (3.1) |
Amortization of acquired technologies | (4.1) | (9) | (13) | (26.3) |
Other charges related to non-recurring activities | 0.1 | (0.6) | (0.1) | (1.3) |
Gross profit | (5.1) | (10.7) | (16.8) | (30.7) |
Stock-based compensation | (9.1) | (14.8) | (34) | (35.8) |
Amortization of intangibles | (7.7) | (13.8) | (24.1) | (41) |
Other charges related to non-recurring activities | (2.3) | (5.8) | (12.1) | (13.1) |
Restructuring and related charges | 0.1 | (7.8) | (1.7) | (18) |
Operating income (loss) | $ (19) | $ (42.2) | $ (71.9) | $ (107.9) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - Consolidation Of Research And Development Functions | May. 09, 2016USD ($) |
Minimum | |
Subsequent Event [Line Items] | |
Anticipated restructuring charges | $ 5,000,000 |
Maximum | |
Subsequent Event [Line Items] | |
Anticipated restructuring charges | $ 7,000,000 |