FORM 10-K
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Fiscal Year Ended June 30, 2017
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Transition Period from to
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Delaware
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04-2564110
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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One Technology Drive, Milpitas, California
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95035
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $0.001 par value per share
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The Nasdaq Stock Market, LLC
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The NASDAQ Global Select Market
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Securities Registered Pursuant to Section 12(g) of the Act:
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None
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(Title of Class)
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
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Emerging growth company
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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ITEM 1.
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BUSINESS
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MARKETS
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APPLICATIONS
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PRODUCTS
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Chip Manufacturing
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Front-End Defect Inspection
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Patterned Wafer
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3900 Series, 2930 Series, 2920 Series,
Puma
TM
9980 Series, Puma
TM
9850 Series, Puma
TM
9650 Series
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High Productivity and All Surface
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CIRCL
TM
with 8 Series, CV350i, BDR300
TM
and Micro300 modules
8 Series
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Unpatterned Wafer/Surface
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Surfscan
®
SP3 and Surfscan
®
SP5 Series
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Reticle
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X5.3™, Teron
TM
SL650 Series
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Data Management
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Klarity
®
product family
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Defect Review
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Electron-beam
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eDR7200
TM
Series
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Metrology
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Patterning Control
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5D Patterning Control Solution™
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Overlay
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Archer
TM
Series
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Optical CD and Shape
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SpectraShape
TM
product family
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Film Thickness/Index
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SpectraFilm
TM
product family
Aleris
TM
product family
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Wafer Geometry and Topography
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WaferSight
TM
Series
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Ion Implant and Anneal
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Therma-Probe
®
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Surface Metrology
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HRP
®
product family
P-Series product family
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Resistivity
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RS product family
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Data Management
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5D Analyzer
®
, K-T Analyzer
®
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In-Situ Process Monitoring
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Lithography
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SensArray
®
product family
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Plasma Etch
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SensArray
®
product family
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Implant and Wet
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SensArray
®
PlasmaSuite
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Lithography Software
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Lithography Simulation
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PROLITH
TM
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Process Window Analysis
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ProDATA
TM
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Year ended June 30,
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2017
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2016
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2015
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Samsung Electronics Co., Ltd.
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Micron Technology, Inc.
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Intel Corporation
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Taiwan Semiconductor Manufacturing Company Limited
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Taiwan Semiconductor Manufacturing Company Limited
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Samsung Electronics Co., Ltd.
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Taiwan Semiconductor Manufacturing Company Limited
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back-end
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Process steps that make up the second half of the semiconductor manufacturing process, from contact through completion of the wafer prior to electrical test.
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broadband
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An illumination source with a wide spectral bandwidth.
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critical dimension (CD)
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The dimension of a specified geometry (such as the width of a patterned line or the distance between two lines) that must be within design tolerances in order to maintain semiconductor device performance consistency.
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design rules
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Rules that set forth the allowable dimensions of particular features used in the design and layout of integrated circuits.
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design technology co-optimization (DTCO)
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The methodology of optimizing semiconductor design and process simultaneously during the technology definition phase.
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die
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The term for a single semiconductor chip on a wafer.
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electron-beam
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An illumination source comprised of a stream of electrons emitted by a single source.
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epitaxial silicon (epi)
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A substrate technology based on growing a crystalline silicon layer on top of a silicon wafer. The added layer, where the structure and orientation are matched to those of the silicon wafer, includes dopants (impurities) to imbue the substrate with special electronic properties.
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excursion
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For a manufacturing step or process, a deviation from normal operating conditions that can lead to decreased performance or yield of the final product.
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fab
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The main manufacturing facility for processing semiconductor wafers.
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front-end
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The processes that make up the first half of the semiconductor manufacturing process, from wafer start through final contact window processing.
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in-situ
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Refers to processing steps or tests that are done without moving the wafer. Latin for “in original position.”
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interconnect
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A highly conductive material, usually copper or aluminum, which carries electrical signals to different parts of a die.
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lithography
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A process in which a masked pattern is projected onto a photosensitive coating that covers a substrate.
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mask shop
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A manufacturer that produces the reticles used by semiconductor manufacturers.
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metrology
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The science of measurement to determine dimensions, quantity or capacity. In the semiconductor industry, typical measurements include critical dimension, overlay and film thickness.
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microelectromechanical systems (MEMS)
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Micron-sized mechanical devices powered by electricity, created using processes similar to those used to manufacture IC devices.
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micron
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A metric unit of linear measure that equals 1/1,000,000 meter (10
-6
m), or 10,000 angstroms (the diameter of a human hair is approximately 75 microns).
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Moore
’
s Law
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An observation made by Gordon Moore in 1965 and revised in 1975 that the number of transistors on a typical integrated circuit doubles approximately every two years.
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nanometer (nm)
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One billionth (10
-9
) of a meter.
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patterned
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For semiconductor manufacturing and industries using similar processing technologies, refers to substrates that have electronic circuits (transistors, interconnects, etc.) fabricated on the surface.
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photoresist
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A radiation-sensitive material that, when properly applied to a variety of substrates and then properly exposed and developed, masks portions of the substrate with a high degree of integrity.
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process control
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The ability to maintain specifications of products and equipment during manufacturing operations.
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reticle
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A very flat glass plate that contains the patterns to be reproduced on a wafer.
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silicon-on-insulator (SOI)
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A substrate technology comprised of a thin top silicon layer separated from the silicon substrate by a thin insulating layer of glass or silicon dioxide, used to improve performance and reduce the power consumption of IC circuits.
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substrate
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A wafer on which layers of various materials are added during the process of manufacturing semiconductor devices or circuits.
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unpatterned
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For semiconductor manufacturing and industries using similar processing technologies, refers to substrates that do not have electronic circuits (transistors, interconnects, etc.) fabricated on the surface. These can include bare silicon wafers, other bare substrates or substrates on which blanket films have been deposited.
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yield management
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The ability of a semiconductor manufacturer to oversee, manage and control its manufacturing processes so as to maximize the percentage of manufactured wafers or die that conform to pre-determined specifications.
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ITEM 1A.
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RISK FACTORS
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the potential for reversal of the long-term historical trend of declining cost per transistor with each new generation of technological advancement within the semiconductor industry, and the adverse impact that such reversal may have upon our business;
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the increasing cost of building and operating fabrication facilities and the impact of such increases on our customers’ investment decisions;
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differing market growth rates and capital requirements for different applications, such as memory, logic and foundry;
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lower level of process control adoption by our memory customers compared to our foundry and logic customers;
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our customers’ reuse of existing and installed products, which may decrease their need to purchase new products or solutions at more advanced technology nodes;
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the emergence of disruptive technologies that change the prevailing semiconductor manufacturing processes (or the economics associated with semiconductor manufacturing) and, as a result, also impact the inspection and metrology requirements associated with such processes;
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the higher design costs for the most advanced integrated circuits, which could economically constrain leading-edge manufacturing technology customers to focus their resources on only the large, technologically advanced products and applications;
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the possible introduction of integrated products by our larger competitors that offer inspection and metrology functionality in addition to managing other semiconductor manufacturing processes;
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changes in semiconductor manufacturing processes that are extremely costly for our customers to implement and, accordingly, our customers could reduce their available budgets for process control equipment by reducing inspection and metrology sampling rates for certain technologies;
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the bifurcation of the semiconductor manufacturing industry into (a) leading edge manufacturers driving continued research and development into next-generation products and technologies and (b) other manufacturers that are content with existing (including previous generation) products and technologies;
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the ever escalating cost of next-generation product development, which may result in joint development programs between us and our customers or government entities to help fund such programs that could restrict our control of, ownership of and profitability from the products and technologies developed through those programs; and
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the entry by some semiconductor manufacturers into collaboration or sharing arrangements for capacity, cost or risk with other manufacturers, as well as increased outsourcing of their manufacturing activities, and greater focus only on specific markets or applications, whether in response to adverse market conditions or other market pressures.
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The mix and type of customers, and sales to any single customer, may vary significantly from quarter to quarter and from year to year, which exposes our business and operating results to increased volatility tied to individual customers.
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New orders from our foundry customers in the past several years have constituted a significant portion of our total orders. This concentration increases the impact that future business or technology changes within the foundry industry may have on our business, financial condition and operating results.
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In a highly concentrated business environment, if a particular customer does not place an order, or if they delay or cancel orders, we may not be able to replace the business. Furthermore, because our products are configured to each customer’s specifications, any changes, delays or cancellations of orders may result in significant, non-recoverable costs.
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As a result of this consolidation, the customers that survive the consolidation represent a greater portion of our sales and, consequently, have greater commercial negotiating leverage. Many of our large customers have more aggressive policies regarding engaging alternative, second-source suppliers for the products we offer and, in addition, may seek and, on occasion, receive pricing, payment, intellectual property-related or other commercial terms that may have an adverse impact on our business. Any of these changes could negatively impact our prices, customer orders, revenues and gross margins.
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Certain customers have undergone significant ownership changes, created alliances with other companies, experienced management changes or have outsourced manufacturing activities, any of which may result in additional complexities in managing customer relationships and transactions. Any future change in ownership or management of our existing customers may result in similar challenges, including the possibility of the successor entity or new management deciding to select a competitor’s products.
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The highly concentrated business environment also increases our exposure to risks related to the financial condition of each of our customers. For example, as a result of the challenging economic environment during fiscal year 2009, we were (and in some cases continue to be) exposed to additional risks related to the continued financial viability of certain of our customers. To the extent our customers experience liquidity issues in the future, we may be required to incur additional bad debt expense with respect to receivables owed to us by those customers. In addition, customers with liquidity issues may be forced to reduce purchases of our equipment, delay deliveries of our products, discontinue operations or may be acquired by one of our customers, and in either case such event would have the effect of further consolidating our customer base.
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Semiconductor manufacturers generally must commit significant resources to qualify, install and integrate process control and yield management equipment into a semiconductor production line. We believe that once a semiconductor manufacturer selects a particular supplier’s process control and yield management equipment, the manufacturer generally relies upon that equipment for that specific production line application for an extended period of time. Accordingly, we expect it to be more difficult to sell our products to a given customer for that specific production line application and other similar production line applications if that customer initially selects a competitor’s equipment. Similarly, we expect it to be challenging for a competitor to sell its products to a given customer for a specific production line application if that customer initially selects our equipment.
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Prices differ among the products we offer for different applications due to differences in features offered or manufacturing costs. If there is a shift in demand by our customers from our higher-priced to lower-priced products, our gross margin and revenue would decrease. In addition, when products are initially introduced, they tend to have higher costs because of initial development costs and lower production volumes relative to the previous product generation, which can impact gross margin.
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a negative impact on our ability to satisfy our future obligations;
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an increase in the portion of our cash flows that may have to be dedicated to increased interest and principal payments that may not be available for operations, working capital, capital expenditures, acquisitions, investments, dividends, stock repurchases, general corporate or other purposes;
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an impairment of our ability to obtain additional financing in the future; and
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obligations to comply with restrictive and financial covenants as noted in the above risk factor and Note 7, “Debt” to the consolidated financial statements.
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managing cultural diversity and organizational alignment;
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exposure to the unique characteristics of each region in the global semiconductor market, which can cause capital equipment investment patterns to vary significantly from period to period;
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periodic local or international economic downturns;
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potential adverse tax consequences, including withholding tax rules that may limit the repatriation of our earnings, and higher effective income tax rates in foreign countries where we do business;
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government controls, either by the United States or other countries, that restrict our business overseas or the import or export of semiconductor products or increase the cost of our operations;
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compliance with customs regulations in the countries in which we do business;
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tariffs or other trade barriers (including those applied to our products or to parts and supplies that we purchase);
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political instability, natural disasters, legal or regulatory changes, acts of war or terrorism in regions where we have operations or where we do business;
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fluctuations in interest and currency exchange rates may adversely impact our ability to compete on price with local providers or the value of revenues we generate from our international business. Although we attempt to manage some of our near-term currency risks through the use of hedging instruments, there can be no assurance that such efforts will be adequate;
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longer payment cycles and difficulties in collecting accounts receivable outside of the United States;
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difficulties in managing foreign distributors (including monitoring and ensuring our distributors’ compliance with applicable laws); and
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inadequate protection or enforcement of our intellectual property and other legal rights in foreign jurisdictions.
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we may have to devote unanticipated financial and management resources to acquired businesses;
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the combination of businesses may cause the loss of key personnel or an interruption of, or loss of momentum in, the activities of our company and/or the acquired business;
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we may not be able to realize expected operating efficiencies or product integration benefits from our acquisitions;
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we may experience challenges in entering into new market segments for which we have not previously manufactured and sold products;
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we may face difficulties in coordinating geographically separated organizations, systems and facilities;
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the customers, distributors, suppliers, employees and others with whom the companies we acquire have business dealings may have a potentially adverse reaction to the acquisition;
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we may have to write-off goodwill or other intangible assets; and
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we may incur unforeseen obligations or liabilities in connection with acquisitions.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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Location
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Type
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Principal Use
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Square
Footage
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Ownership
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Milpitas, CA
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Office, plant and
warehouse
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Principal Executive Offices, Research, Engineering, Marketing, Manufacturing, Service and Sales Administration
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727,302
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Owned
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Westwood, MA
(1)
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Office and plant
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Engineering, Marketing, Manufacturing and Service
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116,908
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Leased
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Leuven, Belgium
(1)
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Office, plant and
warehouse
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Engineering, Marketing and Service and Sales Administration
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60,654
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Owned
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Shenzhen, China
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Office and plant
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Sales, Service and Manufacturing
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47,840
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Leased
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Shanghai, China
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Office
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Research, Service and Sales Administration
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58,109
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Leased
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Weilburg, Germany
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Office and plant
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Engineering, Marketing, Manufacturing, Service and Sales Administration
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138,119
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Leased
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Chennai, India
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Office
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Engineering
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46,351
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Leased
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Chennai, India
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Office
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Engineering
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33,366
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Owned
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Migdal Ha’Emek, Israel
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Office and plant
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Research, Engineering, Marketing, Manufacturing, Service and Sales Administration
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191,982
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Owned
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Yokohama, Japan
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Office and
warehouse
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Sales and Service
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35,531
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Leased
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Serangoon, Singapore
(2)
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Office and plant
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Sales, Service and Manufacturing
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248,155
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Owned
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Hsinchu, Taiwan
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Office
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Sales and Service
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73,676
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Leased
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(1)
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Portions of this property are sublet, are vacant and marketed to sublease, or are leased to third parties.
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(2)
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We own the building at our location in Serangoon, Singapore, but the land on which this building resides is leased.
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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Year ended June 30, 2017
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Year ended June 30, 2016
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||||||||||||||||||||
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High
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Low
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Cash Dividends Declared per share
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High
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Low
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Cash Dividends Declared per share
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||||||||||||
First Fiscal Quarter
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$
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77.85
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$
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66.88
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$
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0.52
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$
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57.35
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$
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44.95
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$
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0.52
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Second Fiscal Quarter
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$
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83.23
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$
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69.75
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$
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0.54
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$
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70.28
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$
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48.73
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$
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0.52
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Third Fiscal Quarter
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$
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96.91
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$
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77.86
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$
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0.54
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$
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73.19
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$
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62.33
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$
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0.52
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Fourth Fiscal Quarter
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$
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109.59
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$
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91.09
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$
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0.54
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$
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75.17
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$
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67.32
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$
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0.52
|
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Period
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Total Number of
Shares Purchased (2) |
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Average Price Paid
per Share |
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Maximum Number of
Shares that May Yet Be Purchased Under the Plans or Programs (3) |
||||
April 1, 2017 to April 30, 2017
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—
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$
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—
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5,916,120
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May 1, 2017 to May 31, 2017
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148,769
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$
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102.03
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5,767,351
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June 1, 2017 to June 30, 2017
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94,391
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$
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104.06
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5,672,960
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Total
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243,160
|
|
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$
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102.82
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(1)
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Our Board of Directors has authorized a program for us to repurchase shares of our common stock. The total number and dollar amount of shares repurchased for the fiscal years ended June 30, 2017, 2016 and 2015 were 0.2 million shares ($25.0 million), 3.4 million shares ($175.7 million) and 9.3 million shares ($608.9 million), respectively.
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(2)
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All shares were purchased pursuant to the publicly announced repurchase program described in footnote 1 above. Shares are reported based on the trade date of the applicable repurchase.
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(3)
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The stock repurchase program has no expiration date. Future repurchases of our common stock under our repurchase program may be effected through various different repurchase transaction structures, including isolated open market transactions or systematic repurchase plans.
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|
June 2012
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June 2013
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June 2014
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June 2015
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June 2016
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June 2017
|
KLA-Tencor Corporation
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$100.00
|
|
$116.72
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$156.61
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$155.36
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$209.39
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$268.60
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S&P 500
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$100.00
|
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$120.60
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|
$150.27
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|
$161.43
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|
$167.87
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$197.92
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PHLX Semiconductor
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$100.00
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$116.96
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$156.62
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$161.36
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$173.61
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$241.00
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ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
Year ended June 30,
|
||||||||||||||||||
(In thousands, except per share amounts)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Consolidated Statements of Operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
3,480,014
|
|
|
$
|
2,984,493
|
|
|
$
|
2,814,049
|
|
|
$
|
2,929,408
|
|
|
$
|
2,842,781
|
|
Net income
(1)
|
$
|
926,076
|
|
|
$
|
704,422
|
|
|
$
|
366,158
|
|
|
$
|
582,755
|
|
|
$
|
543,149
|
|
Cash dividends declared per share (including a special cash dividend of $16.50 per share declared during the three months ended December 31, 2014)
|
$
|
2.14
|
|
|
$
|
2.08
|
|
|
$
|
18.50
|
|
|
$
|
1.80
|
|
|
$
|
1.60
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
5.92
|
|
|
$
|
4.52
|
|
|
$
|
2.26
|
|
|
$
|
3.51
|
|
|
$
|
3.27
|
|
Diluted
|
$
|
5.88
|
|
|
$
|
4.49
|
|
|
$
|
2.24
|
|
|
$
|
3.47
|
|
|
$
|
3.21
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
As of June 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Consolidated Balance Sheets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and marketable securities
|
$
|
3,016,740
|
|
|
$
|
2,491,294
|
|
|
$
|
2,387,111
|
|
|
$
|
3,152,637
|
|
|
$
|
2,918,881
|
|
Working capital
(2)
|
$
|
3,098,904
|
|
|
$
|
2,865,609
|
|
|
$
|
2,902,813
|
|
|
$
|
3,690,484
|
|
|
$
|
3,489,236
|
|
Total assets
|
$
|
5,532,173
|
|
|
$
|
4,962,432
|
|
|
$
|
4,826,012
|
|
|
$
|
5,535,846
|
|
|
$
|
5,283,804
|
|
Long-term debt
(3)
|
$
|
2,680,474
|
|
|
$
|
3,057,936
|
|
|
$
|
3,173,435
|
|
|
$
|
745,101
|
|
|
$
|
743,823
|
|
Total stockholders’ equity
(3)
|
$
|
1,326,417
|
|
|
$
|
689,114
|
|
|
$
|
421,439
|
|
|
$
|
3,669,346
|
|
|
$
|
3,482,152
|
|
(1)
|
Our net income decreased to
$366.2 million
in the fiscal year ended June 30, 2015, primarily as a result of the impact of the pre-tax net loss of
$131.7 million
for the loss on extinguishment of debt and certain one-time expenses of
$2.5 million
associated with the leveraged recapitalization that was completed during the three months ended December 31, 2014.
|
(2)
|
We adopted the accounting standards update regarding classification of deferred taxes on a prospective basis at the beginning of the fourth quarter of fiscal year ended 2016. Upon adoption, approximately $218.0 million in net current deferred tax assets were reclassified to noncurrent. No prior periods were retrospectively adjusted.
|
(3)
|
Our long-term debt increased to
$3.17 billion
at the end of fiscal year ended June 30, 2015, because, as part of the leveraged recapitalization plan, we issued
$2.50 billion
aggregate principal amount of senior, unsecured long-term notes (collectively referred to as “Senior Notes”), entered into
$750.0 million
of
five
-year senior unsecured prepayable term loans and a
$500.0 million
unfunded revolving credit facility and redeemed our $750.0 million aggregate principal amount of 6.900% Senior Notes due in 2018 (the “2018 Notes”). Refer to Note 7, “Debt” for additional details. Our total stockholders’ equity decreased to $421.4 million at the end of fiscal year ended June 30, 2015, because, as part of our leveraged recapitalization plan, we declared a special cash dividend of approximately
$2.76 billion
. Refer to Note 8, “Equity and Long-term Incentive Compensation Plans” to the consolidated financial statements for additional details.
|
ITEM 7.
|
MANAGEMENT
’
S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
When the customer fab has previously accepted the same tool, with the same specifications, and when we can objectively demonstrate that the tool meets all of the required acceptance criteria.
|
•
|
When system sales to independent distributors have no installation requirement, contain no acceptance agreement, and 100% of the payment is due based upon shipment.
|
•
|
When the installation of the system is deemed perfunctory.
|
•
|
When the customer withholds acceptance due to issues unrelated to product performance, in which case revenue is recognized when the system is performing as intended and meets predetermined specifications.
|
|
Year ended June 30,
|
|
|
|
|
|
|
|
|
||||||||||||||||
(Dollar amounts in thousands)
|
2017
|
|
2016
|
|
2015
|
|
FY17 vs. FY16
|
|
FY16 vs. FY15
|
||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product
|
$
|
2,703,934
|
|
|
$
|
2,250,260
|
|
|
$
|
2,125,396
|
|
|
$
|
453,674
|
|
|
20
|
%
|
|
$
|
124,864
|
|
|
6
|
%
|
Service
|
776,080
|
|
|
734,233
|
|
|
688,653
|
|
|
41,847
|
|
|
6
|
%
|
|
45,580
|
|
|
7
|
%
|
|||||
Total revenues
|
$
|
3,480,014
|
|
|
$
|
2,984,493
|
|
|
$
|
2,814,049
|
|
|
$
|
495,521
|
|
|
17
|
%
|
|
$
|
170,444
|
|
|
6
|
%
|
Costs of revenues
|
$
|
1,287,547
|
|
|
$
|
1,163,391
|
|
|
$
|
1,215,229
|
|
|
$
|
124,156
|
|
|
11
|
%
|
|
$
|
(51,838
|
)
|
|
(4
|
)%
|
Gross margin percentage
|
63
|
%
|
|
61
|
%
|
|
57
|
%
|
|
2
|
%
|
|
|
|
4
|
%
|
|
|
Year ended June 30,
|
||||
2017
|
|
2016
|
|
2015
|
Samsung Electronics Co., Ltd.
|
|
Micron Technology, Inc.
|
|
Intel Corporation
|
Taiwan Semiconductor Manufacturing Company Limited
|
|
Taiwan Semiconductor Manufacturing Company Limited
|
|
Samsung Electronics Co., Ltd.
|
|
|
|
|
Taiwan Semiconductor Manufacturing Company Limited
|
|
Year ended June 30,
|
|||||||||||||||||||
(Dollar amounts in thousands)
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
Taiwan
|
$
|
1,104,307
|
|
|
32
|
%
|
|
$
|
894,557
|
|
|
30
|
%
|
|
$
|
691,482
|
|
|
25
|
%
|
Korea
|
688,094
|
|
|
20
|
%
|
|
367,905
|
|
|
12
|
%
|
|
405,320
|
|
|
14
|
%
|
|||
North America
|
523,024
|
|
|
14
|
%
|
|
521,335
|
|
|
18
|
%
|
|
815,914
|
|
|
29
|
%
|
|||
China
|
412,098
|
|
|
12
|
%
|
|
430,074
|
|
|
14
|
%
|
|
162,669
|
|
|
6
|
%
|
|||
Japan
|
351,202
|
|
|
10
|
%
|
|
444,216
|
|
|
15
|
%
|
|
426,963
|
|
|
15
|
%
|
|||
Europe & Israel
|
263,789
|
|
|
8
|
%
|
|
167,936
|
|
|
6
|
%
|
|
194,670
|
|
|
7
|
%
|
|||
Rest of Asia
|
137,500
|
|
|
4
|
%
|
|
158,470
|
|
|
5
|
%
|
|
117,031
|
|
|
4
|
%
|
|||
Total
|
$
|
3,480,014
|
|
|
100
|
%
|
|
$
|
2,984,493
|
|
|
100
|
%
|
|
$
|
2,814,049
|
|
|
100
|
%
|
|
Gross Margin Percentage
|
|
Fiscal year ended June 30, 2015
|
56.8
|
%
|
Revenue volume of products and services
|
0.4
|
%
|
Mix of products and services sold
|
2.6
|
%
|
Manufacturing labor, overhead and efficiencies
|
0.7
|
%
|
Other service and manufacturing costs
|
0.5
|
%
|
Fiscal year ended June 30, 2016
|
61.0
|
%
|
Revenue volume of products and services
|
1.5
|
%
|
Mix of products and services sold
|
0.6
|
%
|
Manufacturing labor, overhead and efficiencies
|
—
|
%
|
Other service and manufacturing costs
|
(0.1
|
)%
|
Fiscal year ended June 30, 2017
|
63.0
|
%
|
|
Year ended June 30,
|
|
|
|
|
|
|
|
|
||||||||||||||||
(Dollar amounts in thousands)
|
2017
|
|
2016
|
|
2015
|
|
FY17 vs. FY16
|
|
FY16 vs. FY15
|
||||||||||||||||
R&D expenses
|
$
|
526,870
|
|
|
$
|
481,258
|
|
|
$
|
530,616
|
|
|
$
|
45,612
|
|
|
9
|
%
|
|
$
|
(49,358
|
)
|
|
(9
|
)%
|
R&D expenses as a percentage of total revenues
|
15
|
%
|
|
16
|
%
|
|
19
|
%
|
|
(1
|
)%
|
|
|
|
(3
|
)%
|
|
|
|
Year ended June 30,
|
|
|
|
|
|
|
|
|
||||||||||||||||
(Dollar amounts in thousands)
|
2017
|
|
2016
|
|
2015
|
|
FY17 vs. FY16
|
|
FY16 vs. FY15
|
||||||||||||||||
SG&A expenses
|
$
|
389,336
|
|
|
$
|
379,399
|
|
|
$
|
406,864
|
|
|
$
|
9,937
|
|
|
3
|
%
|
|
$
|
(27,465
|
)
|
|
(7
|
)%
|
SG&A expenses as a percentage of total revenues
|
11
|
%
|
|
13
|
%
|
|
14
|
%
|
|
(2
|
)%
|
|
|
|
(1
|
)%
|
|
|
|
Year ended June 30,
|
||||||||||
(In thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Beginning balance
|
$
|
587
|
|
|
$
|
24,887
|
|
|
$
|
2,329
|
|
Restructuring costs
|
—
|
|
|
8,926
|
|
|
31,569
|
|
|||
Adjustments
|
(147
|
)
|
|
(142
|
)
|
|
1,177
|
|
|||
Cash payments
|
(440
|
)
|
|
(33,084
|
)
|
|
(10,188
|
)
|
|||
Ending balance
|
$
|
—
|
|
|
$
|
587
|
|
|
$
|
24,887
|
|
|
Year ended June 30,
|
||||||||||
(Dollar amounts in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Interest expense
|
$
|
122,476
|
|
|
$
|
122,887
|
|
|
$
|
106,009
|
|
Other expense (income), net
|
$
|
(19,461
|
)
|
|
$
|
(20,634
|
)
|
|
$
|
(10,469
|
)
|
Interest expense as a percentage of total revenues
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|||
Other expense (income), net as a percentage of total revenues
|
1
|
%
|
|
1
|
%
|
|
—
|
%
|
|
Year ended June 30,
|
||||||||||
(Dollar amounts in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Income before income taxes
|
$
|
1,173,246
|
|
|
$
|
858,192
|
|
|
$
|
434,131
|
|
Provision for income taxes
|
$
|
247,170
|
|
|
$
|
153,770
|
|
|
$
|
67,973
|
|
Effective tax rate
|
21.1
|
%
|
|
17.9
|
%
|
|
15.7
|
%
|
|
As of June 30,
|
||||||||||
(Dollar amounts in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Cash and cash equivalents
|
$
|
1,153,051
|
|
|
$
|
1,108,488
|
|
|
$
|
838,025
|
|
Marketable securities
|
1,863,689
|
|
|
1,382,806
|
|
|
1,549,086
|
|
|||
Total cash, cash equivalents and marketable securities
|
$
|
3,016,740
|
|
|
$
|
2,491,294
|
|
|
$
|
2,387,111
|
|
Percentage of total assets
|
55
|
%
|
|
50
|
%
|
|
49
|
%
|
|||
|
|
|
|
|
|
||||||
|
Year ended June 30,
|
||||||||||
(In thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows:
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
1,079,665
|
|
|
$
|
759,696
|
|
|
$
|
605,906
|
|
Net cash provided by (used in) investing activities
|
(560,886
|
)
|
|
144,687
|
|
|
918,221
|
|
|||
Net cash used in financing activities
|
(472,805
|
)
|
|
(636,702
|
)
|
|
(1,302,972
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(1,411
|
)
|
|
2,782
|
|
|
(13,991
|
)
|
|||
Net increase in cash and cash equivalents
|
$
|
44,563
|
|
|
$
|
270,463
|
|
|
$
|
207,164
|
|
•
|
An increase in collections of approximately $567.0 million during the fiscal year ended June 30, 2017 compared to the fiscal year June 30, 2016, mainly driven by higher shipments;
|
•
|
The positive impact of our early adoption of the new accounting standard update for share-based payment awards to employees on a prospective basis during the fiscal year ended June 30, 2017, which no longer requires the excess tax benefit from share-based compensation to be shown as a reduction within cash flows from operating activities of $11.9 million compared to the fiscal ended June 30, 2016;
|
•
|
An increase in interest income of approximately $9.0 million during the fiscal year ended June 30, 2017 compared to the fiscal year ended June 30, 2016, as U.S. dollar interest rates increased; partially offset by
|
◦
|
An increase in accounts payable payments of approximately $71.0 million during the fiscal year ended June 30, 2017 compared to the fiscal year ended June 30, 2016;
|
◦
|
An increase in income tax payments of $129.0 million during the fiscal year ended June 30, 2017 compared to the fiscal year ended June 30, 2016, reflecting higher operating profits;
|
◦
|
An increase in payroll and employee expenses of approximately $85.0 million during the fiscal year ended June 30, 2017 compared to the fiscal year ended June 30, 2016, primarily due to a change in the timing of certain variable compensation payments; and
|
◦
|
Less unfavorable impacts from currency fluctuations of approximately $19.0 million during the fiscal year ended June 30, 2017 compared to the fiscal year ended June 30, 2016.
|
•
|
An increase in collections of approximately $294.0 million mostly due to higher shipments during the fiscal year ended June 30, 2016 compared to the fiscal year ended June 30, 2015;
|
•
|
A decrease in payroll and employee-related payments of approximately $34.0 million during the fiscal year ended June 30, 2016 compared to the fiscal year ended June 30, 2015; partially offset by
|
◦
|
An increase in vendor payments of approximately $65.0 million during the fiscal year ended June 30, 2016 mainly due to higher inventory purchases compared to the fiscal year ended June 30, 2015;
|
◦
|
A net increase of realized foreign exchange hedge losses of approximately $48.0 million during the fiscal year ended June 30, 2016 compared to the fiscal year ended June 30, 2015, mainly due to the substantial foreign exchange fluctuations in Japanese Yen during these periods;
|
◦
|
An increase in debt interest payments of approximately $27.0 million during the fiscal year ended June 30, 2016 due to higher average outstanding debt balances compared to the fiscal year ended June 30, 2015;
|
◦
|
An increase in income tax and other tax payments net of tax refunds of approximately $22.0 million during the fiscal year ended June 30, 2016 compared to the fiscal year ended June 30, 2015; and
|
◦
|
An increase in cash LTI payments of approximately $13.0 million during the fiscal year ended June 30, 2016 compared to the fiscal year ended June 30, 2015.
|
•
|
A decrease in payment of dividends to stockholders of $2.70 billion, primarily from the payment of special cash dividend during the fiscal year ended June 30, 2015;
|
•
|
A decrease in repayment of debt of approximately $781.0 million mainly as a result of the redemption of the 2018 Senior Notes during the fiscal year ended June 30, 2015;
|
•
|
A decrease in common stock repurchases of $421.0 million during the fiscal year ended June 30, 2016 compared to the fiscal year ended June 30, 2015. In connection with entering into the Merger Agreement, we suspended further repurchases under our repurchase program effective October 21, 2015; partially offset by
|
◦
|
Net proceeds of $3.22 billion from the issuance of Senior Notes and the term loans during the fiscal year ended June 30, 2015.
|
|
Fiscal year ending June 30,
|
||||||||||||||||||||||||||||||
(In thousands)
|
Total
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023 and thereafter
|
|
Others
|
||||||||||||||||
Debt obligations
(1)
|
$
|
2,946,250
|
|
|
$
|
250,000
|
|
|
$
|
—
|
|
|
$
|
696,250
|
|
|
$
|
—
|
|
|
$
|
500,000
|
|
|
$
|
1,500,000
|
|
|
$
|
—
|
|
Interest payment associated with all
debt obligations (2) |
829,212
|
|
|
116,579
|
|
|
113,610
|
|
|
101,710
|
|
|
92,875
|
|
|
82,563
|
|
|
321,875
|
|
|
—
|
|
||||||||
Purchase commitments
(3)
|
432,752
|
|
|
428,903
|
|
|
3,586
|
|
|
142
|
|
|
121
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Income taxes
payable (4) |
74,344
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74,344
|
|
||||||||
Operating leases
|
25,515
|
|
|
9,073
|
|
|
5,768
|
|
|
4,341
|
|
|
2,486
|
|
|
1,358
|
|
|
2,489
|
|
|
—
|
|
||||||||
Cash long-term incentive program
(5)
|
163,141
|
|
|
58,088
|
|
|
46,809
|
|
|
34,534
|
|
|
23,710
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Pension obligations
(6)
|
23,938
|
|
|
1,551
|
|
|
1,586
|
|
|
1,534
|
|
|
1,705
|
|
|
2,574
|
|
|
14,988
|
|
|
—
|
|
||||||||
Executive Deferred
Savings Plan (7) |
183,603
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
183,603
|
|
||||||||
Other
(8)
|
34,600
|
|
|
28,640
|
|
|
4,822
|
|
|
1,044
|
|
|
94
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total contractual cash obligations
|
$
|
4,713,355
|
|
|
$
|
892,834
|
|
|
$
|
176,181
|
|
|
$
|
839,555
|
|
|
$
|
120,991
|
|
|
$
|
586,495
|
|
|
$
|
1,839,352
|
|
|
$
|
257,947
|
|
(1)
|
In November 2014, we issued
$750.0 million
aggregate principal amount of term loans due in fiscal year 2020 (outstanding balance of
$446.3 million
as of June 30, 2017) and
$2.50 billion
aggregate principal amount of Senior Notes due from fiscal year 2018 to fiscal year 2035. During our fiscal year ended June 30, 2017, we made term loan principal payments of
$130.0 million
.
|
(2)
|
The interest payments associated with the Senior Notes obligations included in the table above are based on the principal amount multiplied by the applicable coupon rate for each series of Senior Notes. Our future interest payments are subject to change if our then effective credit rating is below investment grade as discussed above. The interest payments under the term loans are payable on the borrowed amounts at the LIBOR plus 125 bps. As of
June 30, 2017
, we utilized the existing interest rates to project our estimated term loans interest payments for the next five years. The interest payment under the revolving credit facility for the undrawn balance is payable at 15 bps as a commitment fee based on the daily undrawn balance and we utilized the existing rate for the projected interest payments included in the table above. Our future interest payments for the term loans and the revolving credit facility are subject to change due to future fluctuations in the LIBOR rates as well as any upgrades or downgrades to our then effective credit rating.
|
(3)
|
Represents an estimate of significant commitments to purchase inventory from our suppliers as well as an estimate of significant purchase commitments associated with other goods and services in the ordinary course of business. Our liability under these purchase commitments is generally restricted to a forecasted time-horizon as mutually agreed upon between the parties. This forecasted time-horizon can vary among different suppliers. Actual expenditures will vary based upon the volume of the transactions and length of contractual service provided. In addition, the amounts paid under these arrangements may be less in the event the arrangements are renegotiated or canceled. Certain agreements provide for potential cancellation penalties.
|
(4)
|
Represents the estimated income tax payable obligation related to uncertain tax positions as well as related accrued interest. We are unable to make a reasonably reliable estimate of the timing of payments in individual years due to uncertainties in the timing of tax audit outcomes.
|
(5)
|
Represents the amount committed under our cash long-term incentive program. The expected payment after estimated forfeitures is approximately
$133.0 million
.
|
(6)
|
Represents an estimate of expected benefit payments up to fiscal year 2027 that was actuarially determined and excludes the minimum cash required to contribute to the plan. As of
June 30, 2017
, our defined pension plans do not have material required minimum cash contribution obligations.
|
(7)
|
Represents the amount committed under our non-qualified executive deferred compensation plan. We are unable to make a reasonably reliable estimate of the timing of payments in individual years due to the uncertainties in the timing around participant’s separation and any potential changes that participants may decide to make to the previous distribution elections.
|
(8)
|
Includes $20.8 million of employee-related retention commitments in connection with the retention program adopted at the time we entered into the Merger Agreement with Lam Research as well as the amount committed for accrued dividends payable of
$13.8 million
, substantially all of which are for the special cash dividend for the unvested restricted stock units as of the dividend record date as well as quarterly cash dividends from unvested restricted stock units granted with dividend equivalent rights. For additional details, refer to Note 8, “Equity and Long-term Incentive Compensation Plans.”
|
|
Year ended June 30,
|
||||||||||
(In thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Receivables sold under factoring agreements
|
$
|
152,509
|
|
|
$
|
205,790
|
|
|
$
|
137,285
|
|
Proceeds from sales of LCs
|
$
|
48,780
|
|
|
$
|
21,904
|
|
|
$
|
6,920
|
|
Rating Agency
|
Rating
|
Fitch
|
BBB-
|
Moody’s
|
Baa2
|
Standard & Poor’s
|
BBB
|
|
As of June 30,
|
||||||
(In thousands)
|
2017
|
|
2016
|
||||
Cash flow hedge contracts
|
|
|
|
||||
Purchase
|
$
|
19,305
|
|
|
$
|
7,591
|
|
Sell
|
$
|
128,672
|
|
|
$
|
91,793
|
|
Other foreign currency hedge contracts
|
|
|
|
||||
Purchase
|
$
|
165,563
|
|
|
$
|
122,275
|
|
Sell
|
$
|
118,504
|
|
|
$
|
115,087
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30,
|
||||||
(In thousands, except par value)
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,153,051
|
|
|
$
|
1,108,488
|
|
Marketable securities
|
1,863,689
|
|
|
1,382,806
|
|
||
Accounts receivable, net
|
571,117
|
|
|
613,233
|
|
||
Inventories
|
732,988
|
|
|
698,635
|
|
||
Other current assets
|
71,221
|
|
|
64,870
|
|
||
Total current assets
|
4,392,066
|
|
|
3,868,032
|
|
||
Land, property and equipment, net
|
283,975
|
|
|
278,014
|
|
||
Goodwill
|
349,526
|
|
|
335,177
|
|
||
Deferred income taxes
|
291,967
|
|
|
302,219
|
|
||
Purchased intangibles, net
|
18,963
|
|
|
4,331
|
|
||
Other non-current assets
|
195,676
|
|
|
174,659
|
|
||
Total assets
|
$
|
5,532,173
|
|
|
$
|
4,962,432
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
147,380
|
|
|
$
|
106,517
|
|
Deferred system profit
|
180,861
|
|
|
174,551
|
|
||
Unearned revenue
|
65,507
|
|
|
59,147
|
|
||
Current portion of long-term debt
|
249,983
|
|
|
—
|
|
||
Other current liabilities
|
649,431
|
|
|
662,208
|
|
||
Total current liabilities
|
1,293,162
|
|
|
1,002,423
|
|
||
Non-current liabilities:
|
|
|
|
||||
Long-term debt
|
2,680,474
|
|
|
3,057,936
|
|
||
Unearned revenue
|
59,713
|
|
|
56,336
|
|
||
Other non-current liabilities
|
172,407
|
|
|
156,623
|
|
||
Total liabilities
|
4,205,756
|
|
|
4,273,318
|
|
||
Commitments and contingencies (Notes 13 and 14)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value, 1,000 shares authorized, none outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value, 500,000 shares authorized, 261,654 and 260,619 shares issued, 156,840 and 155,955 shares outstanding, as of June 30, 2017 and June 30, 2016, respectively
|
157
|
|
|
156
|
|
||
Capital in excess of par value
|
529,126
|
|
|
452,818
|
|
||
Retained earnings
|
848,457
|
|
|
284,825
|
|
||
Accumulated other comprehensive income (loss)
|
(51,323
|
)
|
|
(48,685
|
)
|
||
Total stockholders’ equity
|
1,326,417
|
|
|
689,114
|
|
||
Total liabilities and stockholders’ equity
|
$
|
5,532,173
|
|
|
$
|
4,962,432
|
|
|
Year ended June 30,
|
||||||||||
(In thousands, except per share amounts)
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Product
|
$
|
2,703,934
|
|
|
$
|
2,250,260
|
|
|
$
|
2,125,396
|
|
Service
|
776,080
|
|
|
734,233
|
|
|
688,653
|
|
|||
Total revenues
|
3,480,014
|
|
|
2,984,493
|
|
|
2,814,049
|
|
|||
Costs and expenses:
|
|
|
|
|
|
||||||
Costs of revenues
|
1,287,547
|
|
|
1,163,391
|
|
|
1,215,229
|
|
|||
Research and development
|
526,870
|
|
|
481,258
|
|
|
530,616
|
|
|||
Selling, general and administrative
|
389,336
|
|
|
379,399
|
|
|
406,864
|
|
|||
Loss on extinguishment of debt and other, net
|
—
|
|
|
—
|
|
|
131,669
|
|
|||
Interest expense
|
122,476
|
|
|
122,887
|
|
|
106,009
|
|
|||
Other expense (income), net
|
(19,461
|
)
|
|
(20,634
|
)
|
|
(10,469
|
)
|
|||
Income before income taxes
|
1,173,246
|
|
|
858,192
|
|
|
434,131
|
|
|||
Provision for income taxes
|
247,170
|
|
|
153,770
|
|
|
67,973
|
|
|||
Net income
|
$
|
926,076
|
|
|
$
|
704,422
|
|
|
$
|
366,158
|
|
Net income per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
5.92
|
|
|
$
|
4.52
|
|
|
$
|
2.26
|
|
Diluted
|
$
|
5.88
|
|
|
$
|
4.49
|
|
|
$
|
2.24
|
|
Cash dividends declared per share (including a special
cash dividend of $16.50 per share declared during the three months ended December 31, 2014) |
$
|
2.14
|
|
|
$
|
2.08
|
|
|
$
|
18.50
|
|
Weighted-average number of shares:
|
|
|
|
|
|
||||||
Basic
|
156,468
|
|
|
155,869
|
|
|
162,282
|
|
|||
Diluted
|
157,481
|
|
|
156,779
|
|
|
163,701
|
|
|
Year ended June 30,
|
||||||||||
(In thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
926,076
|
|
|
$
|
704,422
|
|
|
$
|
366,158
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Currency translation adjustments:
|
|
|
|
|
|
||||||
Change in currency translation adjustments
|
2,332
|
|
|
(3,898
|
)
|
|
(20,740
|
)
|
|||
Change in income tax benefit or expense
|
(562
|
)
|
|
1,399
|
|
|
8,086
|
|
|||
Net change related to currency translation adjustments
|
1,770
|
|
|
(2,499
|
)
|
|
(12,654
|
)
|
|||
Cash flow hedges:
|
|
|
|
|
|
||||||
Change in net unrealized gains or losses
|
10,138
|
|
|
(9,622
|
)
|
|
13,745
|
|
|||
Reclassification adjustments for net gains or losses included in net income
|
(3,222
|
)
|
|
3,722
|
|
|
(6,615
|
)
|
|||
Change in income tax benefit or expense
|
(2,470
|
)
|
|
2,122
|
|
|
(2,565
|
)
|
|||
Net change related to cash flow hedges
|
4,446
|
|
|
(3,778
|
)
|
|
4,565
|
|
|||
Net change related to unrecognized losses and transition obligations in connection with defined benefit plans
|
(1,534
|
)
|
|
(4,552
|
)
|
|
(147
|
)
|
|||
Available-for-sale securities:
|
|
|
|
|
|
||||||
Change in net unrealized gains or losses
|
(8,568
|
)
|
|
3,549
|
|
|
(1,069
|
)
|
|||
Reclassification adjustments for net gains or losses included in net income
|
(191
|
)
|
|
(312
|
)
|
|
(2,119
|
)
|
|||
Change in income tax benefit or expense
|
1,439
|
|
|
(520
|
)
|
|
1,122
|
|
|||
Net change related to available-for-sale securities
|
(7,320
|
)
|
|
2,717
|
|
|
(2,066
|
)
|
|||
Other comprehensive income (loss)
|
(2,638
|
)
|
|
(8,112
|
)
|
|
(10,302
|
)
|
|||
Total comprehensive income
|
$
|
923,438
|
|
|
$
|
696,310
|
|
|
$
|
355,856
|
|
|
Common Stock and
Capital in Excess of
Par Value
|
|
Retained
Earnings
(Accumulated Deficit)
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Stockholders’
Equity
|
|||||||||||
(In thousands, except per share amounts)
|
Shares
|
|
Amount
|
|
||||||||||||||
Balances as of June 30, 2014
|
165,448
|
|
|
$
|
1,220,504
|
|
|
$
|
2,479,113
|
|
|
$
|
(30,271
|
)
|
|
$
|
3,669,346
|
|
Net income
|
—
|
|
|
—
|
|
|
366,158
|
|
|
—
|
|
|
366,158
|
|
||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,302
|
)
|
|
(10,302
|
)
|
||||
Net issuance under employee stock plans
|
1,658
|
|
|
16,186
|
|
|
—
|
|
|
—
|
|
|
16,186
|
|
||||
Repurchase of common stock
|
(9,255
|
)
|
|
(26,891
|
)
|
|
(581,965
|
)
|
|
—
|
|
|
(608,856
|
)
|
||||
Cash dividends ($18.50 per share including a special cash dividend of $16.50 per share declared during the three months ended December 31, 2014) and dividend equivalents declared
|
—
|
|
|
(807,391
|
)
|
|
(2,275,668
|
)
|
|
—
|
|
|
(3,083,059
|
)
|
||||
Stock-based compensation expense
|
—
|
|
|
55,302
|
|
|
—
|
|
|
—
|
|
|
55,302
|
|
||||
Tax benefit for equity awards
|
—
|
|
|
16,664
|
|
|
—
|
|
|
—
|
|
|
16,664
|
|
||||
Balances as of June 30, 2015
|
157,851
|
|
|
474,374
|
|
|
(12,362
|
)
|
|
(40,573
|
)
|
|
421,439
|
|
||||
Net income
|
—
|
|
|
—
|
|
|
704,422
|
|
|
—
|
|
|
704,422
|
|
||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,112
|
)
|
|
(8,112
|
)
|
||||
Net issuance under employee stock plans
|
1,589
|
|
|
14,354
|
|
|
—
|
|
|
—
|
|
|
14,354
|
|
||||
Repurchase of common stock
|
(3,445
|
)
|
|
(10,049
|
)
|
|
(165,694
|
)
|
|
—
|
|
|
(175,743
|
)
|
||||
Cash dividends ($2.08 per share) and dividend equivalents declared
|
—
|
|
|
(82,295
|
)
|
|
(241,541
|
)
|
|
—
|
|
|
(323,836
|
)
|
||||
Stock-based compensation expense
|
—
|
|
|
45,050
|
|
|
—
|
|
|
—
|
|
|
45,050
|
|
||||
Tax benefit for equity awards
|
—
|
|
|
11,540
|
|
|
—
|
|
|
—
|
|
|
11,540
|
|
||||
Balances as of June 30, 2016
|
155,995
|
|
|
452,974
|
|
|
284,825
|
|
|
(48,685
|
)
|
|
689,114
|
|
||||
Net income
|
—
|
|
|
—
|
|
|
926,076
|
|
|
—
|
|
|
926,076
|
|
||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,638
|
)
|
|
(2,638
|
)
|
||||
Net issuance under employee stock plans
|
1,088
|
|
|
26,132
|
|
|
—
|
|
|
—
|
|
|
26,132
|
|
||||
Repurchase of common stock
|
(243
|
)
|
|
(766
|
)
|
|
(24,236
|
)
|
|
—
|
|
|
(25,002
|
)
|
||||
Cash dividends ($2.14 per share) and dividend equivalents declared
|
—
|
|
|
—
|
|
|
(338,208
|
)
|
|
—
|
|
|
(338,208
|
)
|
||||
Stock-based compensation expense
|
—
|
|
|
50,943
|
|
|
—
|
|
|
—
|
|
|
50,943
|
|
||||
Balances as of June 30, 2017
|
156,840
|
|
|
$
|
529,283
|
|
|
$
|
848,457
|
|
|
$
|
(51,323
|
)
|
|
$
|
1,326,417
|
|
|
Year Ended June 30,
|
||||||||||
(In thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
926,076
|
|
|
$
|
704,422
|
|
|
$
|
366,158
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
57,836
|
|
|
66,932
|
|
|
80,536
|
|
|||
Asset impairment charges
|
358
|
|
|
1,396
|
|
|
2,126
|
|
|||
Loss on extinguishment of debt and other, net
|
—
|
|
|
—
|
|
|
131,669
|
|
|||
Non-cash stock-based compensation expense
|
50,943
|
|
|
45,050
|
|
|
55,302
|
|
|||
Deferred income taxes
|
4,007
|
|
|
19,804
|
|
|
(24,245
|
)
|
|||
Excess tax benefit from equity awards
|
—
|
|
|
(11,936
|
)
|
|
(15,403
|
)
|
|||
Net gain on sales of marketable securities and other investments
|
(1,207
|
)
|
|
(5,887
|
)
|
|
(2,119
|
)
|
|||
Changes in assets and liabilities, net of business acquisition:
|
|
|
|
|
|
||||||
Decrease (increase) in accounts receivable, net
|
39,898
|
|
|
(8,292
|
)
|
|
(118,520
|
)
|
|||
Decrease (increase) in inventories
|
(46,433
|
)
|
|
(67,579
|
)
|
|
27,500
|
|
|||
Decrease (increase) in other assets
|
(26,596
|
)
|
|
14,613
|
|
|
11,135
|
|
|||
Increase in accounts payable
|
40,100
|
|
|
3,109
|
|
|
848
|
|
|||
Increase in deferred system profit
|
6,310
|
|
|
25,860
|
|
|
768
|
|
|||
Increase (decrease) in other liabilities
|
28,373
|
|
|
(27,796
|
)
|
|
90,151
|
|
|||
Net cash provided by operating activities
|
1,079,665
|
|
|
759,696
|
|
|
605,906
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Acquisition of non-marketable securities
|
(3,430
|
)
|
|
—
|
|
|
—
|
|
|||
Business acquisition, net of cash acquired
|
(28,560
|
)
|
|
—
|
|
|
—
|
|
|||
Capital expenditures, net
|
(38,594
|
)
|
|
(31,741
|
)
|
|
(45,791
|
)
|
|||
Proceeds from sale of assets
|
2,947
|
|
|
7,076
|
|
|
—
|
|
|||
Purchases of available-for-sale securities
|
(1,626,983
|
)
|
|
(1,175,720
|
)
|
|
(1,731,551
|
)
|
|||
Proceeds from sale of available-for-sale securities
|
434,873
|
|
|
737,817
|
|
|
1,993,396
|
|
|||
Proceeds from maturity of available-for-sale securities
|
699,293
|
|
|
602,446
|
|
|
699,108
|
|
|||
Purchases of trading securities
|
(97,525
|
)
|
|
(68,378
|
)
|
|
(60,808
|
)
|
|||
Proceeds from sale of trading securities
|
97,093
|
|
|
73,187
|
|
|
63,867
|
|
|||
Net cash provided by (used in) investing activities
|
(560,886
|
)
|
|
144,687
|
|
|
918,221
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of debt, net of issuance costs
|
—
|
|
|
—
|
|
|
3,224,906
|
|
|||
Repayment of debt
|
(130,000
|
)
|
|
(135,000
|
)
|
|
(916,117
|
)
|
|||
Issuance of common stock
|
45,359
|
|
|
38,298
|
|
|
47,008
|
|
|||
Tax withholding payments related to vested and released restricted stock units
|
(19,169
|
)
|
|
(23,942
|
)
|
|
(30,229
|
)
|
|||
Common stock repurchases
|
(25,002
|
)
|
|
(181,711
|
)
|
|
(602,888
|
)
|
|||
Payment of dividends to stockholders
|
(343,993
|
)
|
|
(346,283
|
)
|
|
(3,041,055
|
)
|
|||
Excess tax benefit from equity awards
|
—
|
|
|
11,936
|
|
|
15,403
|
|
|||
Net cash used in financing activities
|
(472,805
|
)
|
|
(636,702
|
)
|
|
(1,302,972
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(1,411
|
)
|
|
2,782
|
|
|
(13,991
|
)
|
|||
Net increase in cash and cash equivalents
|
44,563
|
|
|
270,463
|
|
|
207,164
|
|
|||
Cash and cash equivalents at beginning of period
|
1,108,488
|
|
|
838,025
|
|
|
630,861
|
|
|||
Cash and cash equivalents at end of period
|
$
|
1,153,051
|
|
|
$
|
1,108,488
|
|
|
$
|
838,025
|
|
Supplemental cash flow disclosures:
|
|
|
|
|
|
||||||
Income taxes paid, net
|
$
|
234,053
|
|
|
$
|
105,187
|
|
|
$
|
69,681
|
|
Interest paid
|
$
|
119,998
|
|
|
$
|
120,433
|
|
|
$
|
92,982
|
|
Non-cash activities:
|
|
|
|
|
|
||||||
Purchase of land, property and equipment - investing activities
|
$
|
3,299
|
|
|
$
|
2,035
|
|
|
$
|
1,843
|
|
Business acquisition holdback amounts- investing activities
|
$
|
5,318
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unsettled common stock repurchase - financing activities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,968
|
|
Dividends payable - financing activities
|
$
|
13,772
|
|
|
$
|
19,556
|
|
|
$
|
42,002
|
|
Year ended June 30,
|
||||
2017
|
|
2016
|
|
2015
|
Samsung Electronics Co., Ltd.
|
|
Micron Technology, Inc.
|
|
Intel Corporation
|
Taiwan Semiconductor Manufacturing Company Limited
|
|
Taiwan Semiconductor Manufacturing Company Limited
|
|
Samsung Electronics Co., Ltd.
|
|
|
|
|
Taiwan Semiconductor Manufacturing Company Limited
|
As of June 30,
|
||
2017
|
|
2016
|
Samsung Electronics Co., Ltd.
|
|
SK Hynix, Inc.
|
Taiwan Semiconductor Manufacturing Company Limited
|
|
Taiwan Semiconductor Manufacturing Company Limited
|
•
|
When the customer fab has previously accepted the same tool, with the same specifications, and when the Company can objectively demonstrate that the tool meets all of the required acceptance criteria.
|
•
|
When system sales to independent distributors have no installation requirement, contain no acceptance agreement, and 100% of the payment is due based upon shipment.
|
•
|
When the installation of the system is deemed perfunctory.
|
•
|
When the customer withholds acceptance due to issues unrelated to product performance, in which case revenue is recognized when the system is performing as intended and meets predetermined specifications.
|
•
|
The Company will account for the standard
12
-month warranty for a majority of its products that is not separately paid for by the customers as a performance obligation since the Company provides for necessary repairs as well as preventive maintenance services for such products. The estimated fair value of the service will be deferred and recognized ratably as revenue over the warranty period.
|
•
|
The Company will generally recognize revenue for its products at a point of time based on judgment of whether or not the Company has satisfied its performance obligation by transferring control of the product to the customer. In evaluating whether or not control has been transferred to the customer, the Company will consider whether or not certain indicators have been met. Not all of the indicators need to be met for the Company to conclude that control has transferred to the customer. The Company will be required to use significant judgment to evaluate whether or not the factors indicate that the customer has obtained control of the product and the following factors will be considered in evaluating whether or not control has transferred to the customer: the Company has a present right to payment; the customer has legal title; the customer has physical possession; the customer has significant risk and rewards of ownership; and the customer has accepted the product, or whether customer acceptance is considered a formality based on history of acceptance of similar products.
|
•
|
The Company will recognize revenue for software licenses at the time of delivery since the Vendor Specific Objective Evidence (“VSOE”) requirement for undelivered element such as post-contract support is eliminated and companies are allowed to use established or best estimate selling price for the undelivered element to allocate and defer the revenue. As a result, the Company will recognize as revenue a portion of the sales price upon delivery of the software, compared to the current practice of recognizing the entire sales price ratably over the term of the service contract due to the lack of VSOE.
|
Level 1
|
|
Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
|
|
|
|
Level 2
|
|
Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
|
|
|
|
Level 3
|
|
Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
As of June 30, 2017 (In thousands)
|
Total
|
|
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
||||||
Assets
|
|
|
|
|
|
||||||
Cash equivalents:
|
|
|
|
|
|
||||||
Corporate debt securities
|
$
|
76,472
|
|
|
$
|
—
|
|
|
$
|
76,472
|
|
Money market funds and other
|
616,039
|
|
|
616,039
|
|
|
—
|
|
|||
U.S. Government agency securities
|
117,417
|
|
|
—
|
|
|
117,417
|
|
|||
Sovereign securities
|
10,050
|
|
|
—
|
|
|
10,050
|
|
|||
Marketable securities:
|
|
|
|
|
|
||||||
Corporate debt securities
|
1,042,723
|
|
|
—
|
|
|
1,042,723
|
|
|||
Sovereign securities
|
42,515
|
|
|
—
|
|
|
42,515
|
|
|||
U.S. Government agency securities
|
391,409
|
|
|
368,121
|
|
|
23,288
|
|
|||
U.S. Treasury securities
|
373,299
|
|
|
373,299
|
|
|
—
|
|
|||
Total cash equivalents and marketable securities
(1)
|
2,669,924
|
|
|
1,357,459
|
|
|
1,312,465
|
|
|||
Other current assets:
|
|
|
|
|
|
||||||
Derivative assets
|
5,931
|
|
|
—
|
|
|
5,931
|
|
|||
Other non-current assets:
|
|
|
|
|
|
||||||
Executive Deferred Savings Plan
|
182,150
|
|
|
136,145
|
|
|
46,005
|
|
|||
Total financial assets
(1)
|
$
|
2,858,005
|
|
|
$
|
1,493,604
|
|
|
$
|
1,364,401
|
|
Liabilities
|
|
|
|
|
|
||||||
Other current liabilities:
|
|
|
|
|
|
||||||
Derivative liabilities
|
$
|
(1,275
|
)
|
|
$
|
—
|
|
|
$
|
(1,275
|
)
|
Total financial liabilities
|
$
|
(1,275
|
)
|
|
$
|
—
|
|
|
$
|
(1,275
|
)
|
As of June 30, 2016 (In thousands)
|
Total
|
|
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
||||||
Assets
|
|
|
|
|
|
||||||
Cash equivalents:
|
|
|
|
|
|
||||||
Corporate debt securities
|
$
|
20,569
|
|
|
$
|
—
|
|
|
$
|
20,569
|
|
Money market funds and other
|
626,156
|
|
|
626,156
|
|
|
—
|
|
|||
U.S. Treasury securities
|
68,748
|
|
|
68,748
|
|
|
—
|
|
|||
Marketable securities:
|
|
|
|
|
|
||||||
Corporate debt securities
|
657,905
|
|
|
—
|
|
|
657,905
|
|
|||
Municipal securities
|
5,016
|
|
|
—
|
|
|
5,016
|
|
|||
Sovereign securities
|
41,257
|
|
|
6,426
|
|
|
34,831
|
|
|||
U.S. Government agency securities
|
405,705
|
|
|
385,731
|
|
|
19,974
|
|
|||
U.S. Treasury securities
|
258,754
|
|
|
258,754
|
|
|
—
|
|
|||
Total cash equivalents and marketable securities
(1)
|
2,084,110
|
|
|
1,345,815
|
|
|
738,295
|
|
|||
Other current assets:
|
|
|
|
|
|
||||||
Derivative assets
|
1,095
|
|
|
—
|
|
|
1,095
|
|
|||
Other non-current assets:
|
|
|
|
|
|
||||||
Executive Deferred Savings Plan
|
162,160
|
|
|
106,149
|
|
|
56,011
|
|
|||
Total financial assets
(1)
|
$
|
2,247,365
|
|
|
$
|
1,451,964
|
|
|
$
|
795,401
|
|
Liabilities
|
|
|
|
|
|
||||||
Other current liabilities:
|
|
|
|
|
|
||||||
Derivative liabilities
|
$
|
(11,647
|
)
|
|
$
|
—
|
|
|
$
|
(11,647
|
)
|
Total financial liabilities
|
$
|
(11,647
|
)
|
|
$
|
—
|
|
|
$
|
(11,647
|
)
|
|
As of June 30,
|
||||||
(In thousands)
|
2017
|
|
2016
|
||||
Accounts receivable, net:
|
|
|
|
||||
Accounts receivable, gross
|
$
|
592,753
|
|
|
$
|
634,905
|
|
Allowance for doubtful accounts
|
(21,636
|
)
|
|
(21,672
|
)
|
||
|
$
|
571,117
|
|
|
$
|
613,233
|
|
Inventories:
|
|
|
|
||||
Customer service parts
|
$
|
245,172
|
|
|
$
|
234,712
|
|
Raw materials
|
240,389
|
|
|
208,689
|
|
||
Work-in-process
|
193,026
|
|
|
187,733
|
|
||
Finished goods
|
54,401
|
|
|
67,501
|
|
||
|
$
|
732,988
|
|
|
$
|
698,635
|
|
Other current assets:
|
|
|
|
||||
Prepaid expenses
|
$
|
36,146
|
|
|
$
|
37,127
|
|
Income tax related receivables
|
22,071
|
|
|
18,190
|
|
||
Other current assets
|
13,004
|
|
|
9,553
|
|
||
|
$
|
71,221
|
|
|
$
|
64,870
|
|
Land, property and equipment, net:
|
|
|
|
||||
Land
|
$
|
40,617
|
|
|
$
|
40,603
|
|
Buildings and leasehold improvements
|
319,306
|
|
|
313,239
|
|
||
Machinery and equipment
|
551,277
|
|
|
507,378
|
|
||
Office furniture and fixtures
|
21,328
|
|
|
21,737
|
|
||
Construction-in-process
|
4,597
|
|
|
5,286
|
|
||
|
937,125
|
|
|
888,243
|
|
||
Less: accumulated depreciation and amortization
|
(653,150
|
)
|
|
(610,229
|
)
|
||
|
$
|
283,975
|
|
|
$
|
278,014
|
|
Other non-current assets:
|
|
|
|
||||
Executive Deferred Savings Plan
|
$
|
182,150
|
|
|
$
|
162,160
|
|
Other non-current assets
|
13,526
|
|
|
12,499
|
|
||
|
$
|
195,676
|
|
|
$
|
174,659
|
|
Other current liabilities:
|
|
|
|
||||
Executive Deferred Savings Plan
|
$
|
183,603
|
|
|
$
|
162,289
|
|
Compensation and benefits
|
172,707
|
|
|
224,496
|
|
||
Customer credits and advances
|
95,188
|
|
|
81,994
|
|
||
Interest payable
|
19,396
|
|
|
19,395
|
|
||
Warranty
|
45,458
|
|
|
34,773
|
|
||
Income taxes payable
|
17,040
|
|
|
27,964
|
|
||
Other accrued expenses
|
116,039
|
|
|
111,297
|
|
||
|
$
|
649,431
|
|
|
$
|
662,208
|
|
Other non-current liabilities:
|
|
|
|
||||
Pension liabilities
|
$
|
72,801
|
|
|
$
|
69,418
|
|
Income taxes payable
|
68,439
|
|
|
50,365
|
|
||
Other non-current liabilities
|
31,167
|
|
|
36,840
|
|
||
|
$
|
172,407
|
|
|
$
|
156,623
|
|
(In thousands)
|
Currency Translation Adjustments
|
|
Unrealized Gains (Losses) on Available-for-Sale Securities
|
|
Unrealized Gains (Losses) on Cash Flow Hedges
|
|
Unrealized Gains (Losses) on Defined Benefit Plans
|
|
Total
|
||||||||||
Balance as of June 30, 2017
|
$
|
(30,654
|
)
|
|
$
|
(3,869
|
)
|
|
$
|
5,221
|
|
|
$
|
(22,021
|
)
|
|
$
|
(51,323
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance as of June 30, 2016
|
$
|
(32,424
|
)
|
|
$
|
3,451
|
|
|
$
|
775
|
|
|
$
|
(20,487
|
)
|
|
$
|
(48,685
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Location in the Consolidated Statements of Operations
|
|
Year ended June 30,
|
||||||
Accumulated OCI Components
|
|
|
2017
|
|
2016
|
|||||
Unrealized gains (losses) on cash flow hedges from foreign exchange and interest rate contracts
|
|
Revenues
|
|
$
|
2,846
|
|
|
$
|
(2,926
|
)
|
|
|
Costs of revenues
|
|
(378
|
)
|
|
(1,551
|
)
|
||
|
|
Interest expense
|
|
754
|
|
|
755
|
|
||
|
|
Net gains reclassified from accumulated OCI
|
|
$
|
3,222
|
|
|
$
|
(3,722
|
)
|
|
|
|
|
|
|
|
||||
Unrealized gains (losses) on available-for-sale securities
|
|
Other expense (income), net
|
|
$
|
191
|
|
|
$
|
312
|
|
|
Year ended June 30,
|
||||||||||
(In thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Other expense (income), net:
|
|
|
|
|
|
||||||
Interest income
|
$
|
(23,270
|
)
|
|
$
|
(14,507
|
)
|
|
$
|
(12,545
|
)
|
Foreign exchange losses, net
|
641
|
|
|
1,235
|
|
|
1,764
|
|
|||
Net realized gains on sale of investments
|
(191
|
)
|
|
(311
|
)
|
|
(2,119
|
)
|
|||
Other
|
3,359
|
|
|
(7,051
|
)
|
|
2,431
|
|
|||
|
$
|
(19,461
|
)
|
|
$
|
(20,634
|
)
|
|
$
|
(10,469
|
)
|
As of June 30, 2017 (In thousands)
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Corporate debt securities
|
$
|
1,120,548
|
|
|
$
|
598
|
|
|
$
|
(1,951
|
)
|
|
$
|
1,119,195
|
|
Money market funds and other
|
616,039
|
|
|
—
|
|
|
—
|
|
|
616,039
|
|
||||
Sovereign securities
|
52,621
|
|
|
—
|
|
|
(56
|
)
|
|
52,565
|
|
||||
U.S. Government agency securities
|
510,553
|
|
|
62
|
|
|
(1,789
|
)
|
|
508,826
|
|
||||
U.S. Treasury securities
|
374,676
|
|
|
52
|
|
|
(1,429
|
)
|
|
373,299
|
|
||||
Subtotal
|
2,674,437
|
|
|
712
|
|
|
(5,225
|
)
|
|
2,669,924
|
|
||||
Add: Time deposits
(1)
|
39,389
|
|
|
—
|
|
|
—
|
|
|
39,389
|
|
||||
Less: Cash equivalents
|
845,639
|
|
|
—
|
|
|
(15
|
)
|
|
845,624
|
|
||||
Marketable securities
|
$
|
1,868,187
|
|
|
$
|
712
|
|
|
$
|
(5,210
|
)
|
|
$
|
1,863,689
|
|
|
|
|
|
|
|
|
|
||||||||
As of June 30, 2016 (In thousands)
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Corporate debt securities
|
$
|
676,259
|
|
|
$
|
2,372
|
|
|
$
|
(157
|
)
|
|
$
|
678,474
|
|
Money market funds and other
|
626,156
|
|
|
—
|
|
|
—
|
|
|
626,156
|
|
||||
Municipal securities
|
5,014
|
|
|
2
|
|
|
—
|
|
|
5,016
|
|
||||
Sovereign securities
|
41,224
|
|
|
38
|
|
|
(5
|
)
|
|
41,257
|
|
||||
U.S. Government agency securities
|
404,889
|
|
|
830
|
|
|
(14
|
)
|
|
405,705
|
|
||||
U.S. Treasury securities
|
326,321
|
|
|
1,181
|
|
|
—
|
|
|
327,502
|
|
||||
Subtotal
|
2,079,863
|
|
|
4,423
|
|
|
(176
|
)
|
|
2,084,110
|
|
||||
Add: Time deposits
(1)
|
77,131
|
|
|
—
|
|
|
—
|
|
|
77,131
|
|
||||
Less: Cash equivalents
|
778,451
|
|
|
1
|
|
|
(17
|
)
|
|
778,435
|
|
||||
Marketable securities
|
$
|
1,378,543
|
|
|
$
|
4,422
|
|
|
$
|
(159
|
)
|
|
$
|
1,382,806
|
|
As of June 30, 2017 (In thousands)
|
Fair Value
|
|
Gross
Unrealized
Losses
(1)
|
||||
Corporate debt securities
|
$
|
716,934
|
|
|
$
|
(1,940
|
)
|
U.S. Government agency securities
|
328,868
|
|
|
(1,786
|
)
|
||
U.S. Treasury securities
|
324,555
|
|
|
(1,429
|
)
|
||
Sovereign securities
|
42,515
|
|
|
(55
|
)
|
||
Total
|
$
|
1,412,872
|
|
|
$
|
(5,210
|
)
|
(1)
|
As of
June 30, 2017
, the amount of total gross unrealized losses related to investments that had been in a continuous loss position for
12
months or more was immaterial.
|
As of June 30, 2017 (In thousands)
|
Amortized
Cost
|
|
Fair Value
|
||||
Due within one year
|
$
|
661,679
|
|
|
$
|
661,184
|
|
Due after one year through three years
|
1,206,508
|
|
|
1,202,505
|
|
||
|
$
|
1,868,187
|
|
|
$
|
1,863,689
|
|
(In thousands)
|
Preliminary Purchase Price Allocation
|
||
Intangible assets
|
$
|
17,660
|
|
Goodwill
|
14,280
|
|
|
Assets acquired (including cash and marketable securities of $3.2 million)
|
6,294
|
|
|
Liabilities assumed
|
(1,334
|
)
|
|
Fair value of net assets acquired
|
$
|
36,900
|
|
(In thousands)
|
|
Wafer Inspection
|
|
Patterning
|
|
GSS
|
|
Others
|
|
Total
|
||||||||||
Balance as of June 30, 2015
|
|
$
|
332,783
|
|
(1)
|
$
|
2,480
|
|
(2)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
335,263
|
|
Goodwill reallocation
|
|
(51,671
|
)
|
(3)
|
50,775
|
|
(3)
|
—
|
|
|
896
|
|
(3)
|
—
|
|
|||||
Foreign currency adjustment
|
|
(86
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(86
|
)
|
|||||
Balance as of June 30, 2016
|
|
281,026
|
|
|
53,255
|
|
|
—
|
|
|
896
|
|
|
335,177
|
|
|||||
Acquired goodwill
|
|
—
|
|
|
—
|
|
|
2,856
|
|
|
11,424
|
|
|
14,280
|
|
|||||
Foreign currency adjustment
|
|
69
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|||||
Balance as of June 30, 2017
|
|
$
|
281,095
|
|
|
$
|
53,255
|
|
|
$
|
2,856
|
|
|
$
|
12,320
|
|
|
$
|
349,526
|
|
(1)
|
The balance as of
June 30, 2015
, reflects goodwill for the Defect Inspection reporting unit under the old reporting structure which was renamed as Wafer Inspection under a new reporting structure after certain components were allocated out.
|
(2)
|
The balance as of
June 30, 2015
, reflects goodwill for the Metrology reporting unit under the old reporting structure which was renamed as Patterning under a new reporting structure after certain components were allocated in.
|
(3)
|
The Company made certain organizational changes and consolidated its product division effective in the first quarter of fiscal 2016. The reorganization resulted in the reallocation of certain goodwill balances as noted above.
|
(In thousands)
|
|
|
As of June 30, 2017
|
|
As of June 30, 2016
|
||||||||||||||||||||
Category
|
Range of
Useful Lives
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization and Impairment
|
|
Net
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization and Impairment
|
|
Net
Amount
|
||||||||||||
Existing technology
|
4-7 years
|
|
$
|
157,259
|
|
|
$
|
140,346
|
|
|
$
|
16,913
|
|
|
$
|
141,659
|
|
|
$
|
138,160
|
|
|
$
|
3,499
|
|
Trade name/Trademark
|
7 years
|
|
20,993
|
|
|
19,902
|
|
|
1,091
|
|
|
19,893
|
|
|
19,743
|
|
|
150
|
|
||||||
Customer relationships
|
7-8 years
|
|
55,680
|
|
|
54,959
|
|
|
721
|
|
|
54,980
|
|
|
54,298
|
|
|
682
|
|
||||||
Backlog
|
<1 year
|
|
260
|
|
|
22
|
|
|
238
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
|
$
|
234,192
|
|
|
$
|
215,229
|
|
|
$
|
18,963
|
|
|
$
|
216,532
|
|
|
$
|
212,201
|
|
|
$
|
4,331
|
|
|
As of June 30, 2017
|
|
As of June 30, 2016
|
||||||||||
|
Amount
(in thousands)
|
|
Effective
Interest Rate
|
|
Amount
(in thousands) |
|
Effective
Interest Rate
|
||||||
Fixed-rate 2.375% Senior notes due on November 1, 2017
|
$
|
250,000
|
|
|
2.396
|
%
|
|
$
|
250,000
|
|
|
2.396
|
%
|
Fixed-rate 3.375% Senior notes due on November 1, 2019
|
250,000
|
|
|
3.377
|
%
|
|
250,000
|
|
|
3.377
|
%
|
||
Fixed-rate 4.125% Senior notes due on November 1, 2021
|
500,000
|
|
|
4.128
|
%
|
|
500,000
|
|
|
4.128
|
%
|
||
Fixed-rate 4.650% Senior notes due on November 1, 2024
(1)
|
1,250,000
|
|
|
4.682
|
%
|
|
1,250,000
|
|
|
4.682
|
%
|
||
Fixed-rate 5.650% Senior notes due on November 1, 2034
|
250,000
|
|
|
5.670
|
%
|
|
250,000
|
|
|
5.670
|
%
|
||
Term loans
|
446,250
|
|
|
2.137
|
%
|
|
576,250
|
|
|
1.714
|
%
|
||
Total debt
|
2,946,250
|
|
|
|
|
3,076,250
|
|
|
|
||||
Unamortized discount
|
(2,901
|
)
|
|
|
|
(3,312
|
)
|
|
|
||||
Unamortized debt issuance costs
|
(12,892
|
)
|
|
|
|
(15,002
|
)
|
|
|
||||
Total debt
|
$
|
2,930,457
|
|
|
|
|
$
|
3,057,936
|
|
|
|
||
|
|
|
|
|
|
|
|
||||||
Reported as:
|
|
|
|
|
|
|
|
||||||
Current portion of long-term debt
|
$
|
249,983
|
|
|
|
|
$
|
—
|
|
|
|
||
Long-term debt
|
2,680,474
|
|
|
|
|
3,057,936
|
|
|
|
||||
Total debt
|
$
|
2,930,457
|
|
|
|
|
$
|
3,057,936
|
|
|
|
(1)
|
The effective interest rate disclosed above for this series of Senior Notes excludes the impact of the treasury rate lock hedge discussed below. The effective interest rate including the impact of the treasury rate lock hedge was
4.626%
.
|
Fiscal year ending June 30,
|
Amount
(In thousands)
|
||
2018
|
$
|
250,000
|
|
2019
|
—
|
|
|
2020
|
696,250
|
|
|
2021
|
—
|
|
|
2022
|
500,000
|
|
|
Thereafter
|
1,500,000
|
|
|
Total payments
|
$
|
2,946,250
|
|
(In thousands)
|
Available
For Grant
|
|
Balances as of June 30, 2014
|
8,804
|
|
Restricted stock units granted
(1)(3)
|
(1,191
|
)
|
Restricted stock units canceled
(1)
|
196
|
|
Options canceled/expired/forfeited
|
11
|
|
Plan shares expired
(2)
|
(10
|
)
|
Balances as of June 30, 2015
(4)
|
7,810
|
|
Restricted stock units granted
(1)(3)
|
(1,541
|
)
|
Restricted stock units canceled
(1)
|
509
|
|
Balances as of June 30, 2016
|
6,778
|
|
Restricted stock units granted
(1)(3)
|
(2,169
|
)
|
Restricted stock units canceled
(1)
|
101
|
|
Balances as of June 30, 2017
|
4,710
|
|
(1)
|
The number of restricted stock units reflects the application of the award multiplier as described above (
1.8
x or
2.0
x depending on the grant date of the applicable award).
|
(2)
|
Represents the portion of shares listed as “Options canceled/expired/forfeited” above that were issued under the Company’s equity incentive plans other than the 2004 Plan and the Outside Director Plan. Because the Company is only currently authorized to issue equity awards under the 2004 Plan and the Outside Director Plan, any equity awards that are canceled, expired or forfeited under any other Company equity incentive plan do not result in additional shares being available to the Company for future grant.
|
(3)
|
Includes restricted stock units granted to senior management with performance-based vesting criteria (in addition to service-based vesting criteria for any of such restricted stock units that are deemed to have been earned). As of
June 30, 2017
, it had not yet been determined the extent to which (if at all) the performance-based vesting criteria had been satisfied. Therefore, this line item includes all performance-based restricted stock units granted during the fiscal year, reported at the maximum possible number of shares that may ultimately be issuable if all applicable performance-based criteria are achieved at their maximum levels and all applicable service-based criteria are fully satisfied (
84 thousand
shares,
0.7 million
shares and
0.6 million
shares for the fiscal years ended June 30, 2017, 2016 and 2015, respectively, after application of the
1.8
x or
2.0
x multiplier described above).
|
(4)
|
During the fiscal year ended June 30, 2015, the Company adjusted the number of shares subject to outstanding options under the 2004 Plan by an aggregate of
4,245
shares pursuant to a proportionate and equitable adjustment for the effect of the special cash dividend, as required by the 2004 Plan. The total number of outstanding options under the 2004 Plan as well as the associated exercise prices were adjusted to ensure the aggregate intrinsic value remained the same after considering the effect of the special cash dividend. As the adjustment was required by the 2004 Plan, under the authoritative guidance, the adjustment to the outstanding awards did not result in any incremental compensation expense. Additionally, the adjustment did not have an impact on the shares available for future issuance under the 2004 Plan.
|
|
Year ended June 30,
|
||||||||||
(In thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Stock-based compensation expense by:
|
|
|
|
|
|
||||||
Costs of revenues
|
$
|
5,338
|
|
|
$
|
4,689
|
|
|
$
|
7,242
|
|
Research and development
|
8,089
|
|
|
8,618
|
|
|
12,259
|
|
|||
Selling, general and administrative
|
37,516
|
|
|
31,743
|
|
|
35,801
|
|
|||
Total stock-based compensation expense
|
$
|
50,943
|
|
|
$
|
45,050
|
|
|
$
|
55,302
|
|
(In thousands)
|
As of June 30,
|
||||||
2017
|
|
2016
|
|||||
Inventory
|
$
|
2,820
|
|
|
$
|
2,685
|
|
Restricted Stock Units
|
Shares
(In thousands)
(1)
|
|
Weighted-Average
Grant Date
Fair Value
|
|||
Outstanding restricted stock units as of June 30, 2016
(2)
|
1,849
|
|
|
$
|
56.41
|
|
Granted
(2)
|
1,085
|
|
|
$
|
78.83
|
|
Vested and released
|
(383
|
)
|
|
$
|
52.73
|
|
Withheld for taxes
|
(259
|
)
|
|
$
|
52.73
|
|
Forfeited
|
(51
|
)
|
|
$
|
59.77
|
|
Outstanding restricted stock units as of June 30, 2017
(2)
|
2,241
|
|
|
$
|
68.24
|
|
(1)
|
Share numbers reflect actual shares subject to awarded restricted stock units. As described above, under the terms of the 2004 Plan, the number of shares subject to each award reflected in this number is multiplied by either
1.8
x or
2.0
x (depending on the grant date of the award) to calculate the impact of the award on the share reserve under the 2004 Plan.
|
(2)
|
Includes restricted stock units granted to senior management with performance-based vesting criteria (in addition to service-based vesting criteria for any of such restricted stock units that are deemed to have been earned). As of
June 30, 2017
, it had not yet been determined the extent to which (if at all) the performance-based vesting criteria had been satisfied. Therefore, this line item includes all performance-based restricted stock units, reported at the maximum possible number of shares (i.e.,
42 thousand
shares the fiscal years ended
June 30, 2017
and
0.3 million
shares for each of the fiscal years ended June 30, 2016 and 2015) that may ultimately be issuable if all applicable performance-based criteria are achieved at their maximum and all applicable service-based criteria are fully satisfied.
|
(In thousands, except for weighted-average grant date fair value)
|
Year ended June 30,
|
||||||||||
2017
|
|
2016
|
|
2015
|
|||||||
Weighted-average grant date fair value per unit
|
$
|
78.83
|
|
|
$
|
51.12
|
|
|
$
|
74.48
|
|
Grant date fair value of vested restricted stock units
|
$
|
33,820
|
|
|
$
|
51,992
|
|
|
$
|
38,859
|
|
Tax benefits realized by the Company in connection with vested and released restricted stock units
|
$
|
15,829
|
|
|
$
|
27,412
|
|
|
$
|
26,250
|
|
|
Year ended June 30,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Stock purchase plan:
|
|
|
|
|
|
|||
Expected stock price volatility
|
23.4
|
%
|
|
25.4
|
%
|
|
24.5
|
%
|
Risk-free interest rate
|
0.5
|
%
|
|
0.2
|
%
|
|
0.1
|
%
|
Dividend yield
|
2.8
|
%
|
|
3.3
|
%
|
|
2.8
|
%
|
Expected life (in years)
|
0.50
|
|
|
0.50
|
|
|
0.50
|
|
(In thousands, except for weighted-average fair value per share)
|
Year ended June 30,
|
||||||||||
2017
|
|
2016
|
|
2015
|
|||||||
Total cash received from employees for the issuance of shares under the ESPP
|
$
|
45,358
|
|
|
$
|
38,295
|
|
|
$
|
41,116
|
|
Number of shares purchased by employees through the ESPP
|
705
|
|
|
735
|
|
|
759
|
|
|||
Tax benefits realized by the Company in connection with the disqualifying dispositions of shares purchased under the ESPP
|
$
|
1,999
|
|
|
$
|
2,194
|
|
|
$
|
1,741
|
|
Weighted-average fair value per share based on Black-Scholes model
|
$
|
15.16
|
|
|
$
|
12.48
|
|
|
$
|
14.55
|
|
(In thousands)
|
Year ended June 30,
|
||||||||||
2017
|
|
2016
|
|
2015
|
|||||||
Number of shares of common stock repurchased
|
243
|
|
|
3,445
|
|
|
9,255
|
|
|||
Total cost of repurchases
|
$
|
25,002
|
|
|
$
|
175,743
|
|
|
$
|
608,856
|
|
(In thousands, except per share amounts)
|
Year ended June 30,
|
||||||||||
2017
|
|
2016
|
|
2015
|
|||||||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
926,076
|
|
|
$
|
704,422
|
|
|
$
|
366,158
|
|
Denominator:
|
|
|
|
|
|
||||||
Weighted-average shares-basic, excluding unvested restricted stock units
|
156,468
|
|
|
155,869
|
|
|
162,282
|
|
|||
Effect of dilutive restricted stock units and options
(1)
|
1,013
|
|
|
910
|
|
|
1,419
|
|
|||
Weighted-average shares-diluted
|
157,481
|
|
|
156,779
|
|
|
163,701
|
|
|||
Basic net income per share
|
$
|
5.92
|
|
|
$
|
4.52
|
|
|
$
|
2.26
|
|
Diluted net income per share
|
$
|
5.88
|
|
|
$
|
4.49
|
|
|
$
|
2.24
|
|
Anti-dilutive securities excluded from the computation of diluted net income per share
|
46
|
|
|
9
|
|
|
36
|
|
|
Year ended June 30,
|
||||||
(In thousands)
|
2017
|
|
2016
|
||||
Change in projected benefit obligation:
|
|
|
|
||||
Projected benefit obligation as of the beginning of the fiscal year
|
$
|
89,923
|
|
|
$
|
75,928
|
|
Service cost
|
4,015
|
|
|
3,349
|
|
||
Interest cost
|
1,117
|
|
|
1,322
|
|
||
Contributions by plan participants
|
76
|
|
|
163
|
|
||
Actuarial loss
|
2,991
|
|
|
9,029
|
|
||
Benefit payments
|
(1,363
|
)
|
|
(2,517
|
)
|
||
Foreign currency exchange rate changes and others, net
|
506
|
|
|
2,649
|
|
||
Projected benefit obligation as of the end of the fiscal year
|
$
|
97,265
|
|
|
$
|
89,923
|
|
|
|
|
|
||||
|
Year ended June 30,
|
||||||
(In thousands)
|
2017
|
|
2016
|
||||
Change in fair value of plan assets:
|
|
|
|
||||
Fair value of plan assets as of the beginning of the fiscal year
|
$
|
18,894
|
|
|
$
|
17,038
|
|
Actual return on plan assets
|
241
|
|
|
588
|
|
||
Employer contributions
|
3,330
|
|
|
4,330
|
|
||
Benefit and expense payments
|
(1,363
|
)
|
|
(2,517
|
)
|
||
Foreign currency exchange rate changes and others, net
|
678
|
|
|
(545
|
)
|
||
Fair value of plan assets as of the end of the fiscal year
|
$
|
21,780
|
|
|
$
|
18,894
|
|
|
As of June 30,
|
||||||
(In thousands)
|
2017
|
|
2016
|
||||
Underfunded status
|
$
|
75,485
|
|
|
$
|
71,029
|
|
|
|
|
|
||||
|
As of June 30,
|
||||||
(In thousands)
|
2017
|
|
2016
|
||||
Plans with accumulated benefit obligations in excess of plan assets:
|
|
|
|
||||
Accumulated benefit obligation
|
$
|
56,967
|
|
|
$
|
53,198
|
|
Projected benefit obligation
|
$
|
97,265
|
|
|
$
|
89,923
|
|
Plan assets at fair value
|
$
|
21,780
|
|
|
$
|
18,894
|
|
|
Year ended June 30,
|
||||
|
2017
|
|
2016
|
|
2015
|
Weighted-average assumptions:
|
|
|
|
|
|
Discount rate
|
0.8%-1.9%
|
|
0.5%-2.0%
|
|
1.3%-2.0%
|
Expected rate of return on assets
|
1.5%-2.9%
|
|
1.8%-2.5%
|
|
1.8%-2.5%
|
Rate of compensation increases
|
3.0%-5.8%
|
|
3.0%-5.8%
|
|
3.0%-5.5%
|
|
Year ended June 30,
|
||||||
(In thousands)
|
2017
|
|
2016
|
||||
Unrecognized transition obligation
|
$
|
190
|
|
|
$
|
108
|
|
Unrecognized prior service cost
|
51
|
|
|
113
|
|
||
Unrealized net loss
|
33,477
|
|
|
31,739
|
|
||
Amount of losses recognized
|
$
|
33,718
|
|
|
$
|
31,960
|
|
(In thousands)
|
Year ending
June 30, 2018
|
||
Unrecognized transition obligation
|
$
|
—
|
|
Unrecognized prior service cost
|
26
|
|
|
Unrealized net loss
|
1,436
|
|
|
Amount of losses expected to be recognized
|
$
|
1,462
|
|
|
Year ended June 30,
|
||||||||||
(In thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Components of net periodic pension cost:
|
|
|
|
|
|
||||||
Service cost
|
$
|
4,015
|
|
|
$
|
3,349
|
|
|
$
|
3,905
|
|
Interest cost
|
1,117
|
|
|
1,322
|
|
|
1,562
|
|
|||
Return on plan assets
|
(393
|
)
|
|
(406
|
)
|
|
(450
|
)
|
|||
Amortization of transitional obligation
|
251
|
|
|
249
|
|
|
259
|
|
|||
Amortization of prior service cost
|
46
|
|
|
46
|
|
|
46
|
|
|||
Amortization of net loss
|
1,617
|
|
|
1,132
|
|
|
1,014
|
|
|||
Adjustment
|
—
|
|
|
—
|
|
|
(177
|
)
|
|||
Net periodic pension cost
|
$
|
6,653
|
|
|
$
|
5,692
|
|
|
$
|
6,159
|
|
As of June 30, 2017 (In thousands)
|
Total
|
|
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
||||||
Cash and cash equivalents
|
$
|
13,784
|
|
|
$
|
13,784
|
|
|
$
|
—
|
|
Bonds, equity securities and other investments
|
7,996
|
|
|
—
|
|
|
7,996
|
|
|||
Total assets measured at fair value
|
$
|
21,780
|
|
|
$
|
13,784
|
|
|
$
|
7,996
|
|
|
|
|
|
|
|
||||||
As of June 30, 2016 (In thousands)
|
Total
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
|||||
Cash and cash equivalents
|
$
|
11,950
|
|
|
$
|
11,950
|
|
|
$
|
—
|
|
Bonds, equity securities and other investments
|
6,944
|
|
|
—
|
|
|
6,944
|
|
|||
Total assets measured at fair value
|
$
|
18,894
|
|
|
$
|
11,950
|
|
|
$
|
6,944
|
|
|
Year ended June 30,
|
||||||||||
(In thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Domestic income before income taxes
|
$
|
615,906
|
|
|
$
|
417,803
|
|
|
$
|
157,251
|
|
Foreign income before income taxes
|
557,340
|
|
|
440,389
|
|
|
276,880
|
|
|||
Total income before income taxes
|
$
|
1,173,246
|
|
|
$
|
858,192
|
|
|
$
|
434,131
|
|
(In thousands)
|
Year ended June 30,
|
||||||||||
2017
|
|
2016
|
|
2015
|
|||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
200,831
|
|
|
$
|
94,088
|
|
|
$
|
63,123
|
|
State
|
4,660
|
|
|
6,123
|
|
|
3,655
|
|
|||
Foreign
|
38,208
|
|
|
37,680
|
|
|
25,438
|
|
|||
|
243,699
|
|
|
137,891
|
|
|
92,216
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
444
|
|
|
15,645
|
|
|
(22,390
|
)
|
|||
State
|
2,852
|
|
|
3,583
|
|
|
409
|
|
|||
Foreign
|
175
|
|
|
(3,349
|
)
|
|
(2,262
|
)
|
|||
|
3,471
|
|
|
15,879
|
|
|
(24,243
|
)
|
|||
Provision for income taxes
|
$
|
247,170
|
|
|
$
|
153,770
|
|
|
$
|
67,973
|
|
(In thousands)
|
As of June 30,
|
||||||
2017
|
|
2016
|
|||||
Deferred tax assets:
|
|
|
|
||||
Tax credits and net operating losses
|
$
|
134,052
|
|
|
$
|
116,277
|
|
Employee benefits accrual
|
106,637
|
|
|
109,524
|
|
||
Stock-based compensation
|
15,252
|
|
|
13,607
|
|
||
Inventory reserves
|
95,200
|
|
|
94,783
|
|
||
Non-deductible reserves
|
43,140
|
|
|
34,484
|
|
||
Depreciation and amortization
|
3,415
|
|
|
15,857
|
|
||
Unearned revenue
|
15,757
|
|
|
14,375
|
|
||
Other
|
26,538
|
|
|
26,877
|
|
||
Gross deferred tax assets
|
439,991
|
|
|
425,784
|
|
||
Valuation allowance
|
(120,708
|
)
|
|
(104,968
|
)
|
||
Net deferred tax assets
|
$
|
319,283
|
|
|
$
|
320,816
|
|
Deferred tax liabilities:
|
|
|
|
||||
Unremitted earnings of foreign subsidiaries not indefinitely reinvested
|
$
|
(13,213
|
)
|
|
$
|
(11,571
|
)
|
Deferred profit
|
(13,657
|
)
|
|
(10,346
|
)
|
||
Unrealized gain on investments
|
(2,707
|
)
|
|
(604
|
)
|
||
Total deferred tax liabilities
|
(29,577
|
)
|
|
(22,521
|
)
|
||
Total net deferred tax assets
|
$
|
289,706
|
|
|
$
|
298,295
|
|
|
Year ended June 30,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Federal statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal benefit
|
0.4
|
%
|
|
0.9
|
%
|
|
0.7
|
%
|
Effect of foreign operations taxed at various rates
|
(12.2
|
)%
|
|
(13.0
|
)%
|
|
(15.3
|
)%
|
Research and development tax credit
|
(1.1
|
)%
|
|
(1.9
|
)%
|
|
(3.7
|
)%
|
Net change in tax reserves
|
1.3
|
%
|
|
(2.2
|
)%
|
|
1.5
|
%
|
Domestic manufacturing benefit
|
(1.5
|
)%
|
|
(1.5
|
)%
|
|
(2.1
|
)%
|
Effect of stock-based compensation
|
(0.2
|
)%
|
|
0.3
|
%
|
|
0.8
|
%
|
Other
|
(0.6
|
)%
|
|
0.3
|
%
|
|
(1.2
|
)%
|
Effective income tax rate
|
21.1
|
%
|
|
17.9
|
%
|
|
15.7
|
%
|
|
Year ended June 30,
|
||||||||||
(In thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Unrecognized tax benefits at the beginning of the year
|
$
|
50,365
|
|
|
$
|
69,018
|
|
|
$
|
59,575
|
|
Increases for tax positions taken in prior years
|
6,788
|
|
|
4,245
|
|
|
1,245
|
|
|||
Decreases for tax positions taken in prior years
|
(246
|
)
|
|
(1,209
|
)
|
|
(7
|
)
|
|||
Increases for tax positions taken in current year
|
14,696
|
|
|
13,636
|
|
|
11,634
|
|
|||
Decreases for settlements with taxing authorities
|
—
|
|
|
(8,762
|
)
|
|
—
|
|
|||
Decreases for lapsing of statutes of limitations
|
(3,164
|
)
|
|
(26,563
|
)
|
|
(3,429
|
)
|
|||
Unrecognized tax benefits at the end of the year
|
$
|
68,439
|
|
|
$
|
50,365
|
|
|
$
|
69,018
|
|
|
Year ended June 30,
|
||||||||||
(In thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Receivables sold under factoring agreements
|
$
|
152,509
|
|
|
$
|
205,790
|
|
|
$
|
137,285
|
|
Proceeds from sales of LCs
|
$
|
48,780
|
|
|
$
|
21,904
|
|
|
$
|
6,920
|
|
Fiscal year ending June 30,
|
Amount
(In thousands)
|
||
2018
|
$
|
9,073
|
|
2019
|
5,768
|
|
|
2020
|
4,341
|
|
|
2021
|
2,486
|
|
|
2022
|
1,358
|
|
|
2023 and thereafter
|
2,489
|
|
|
Total minimum lease payments
|
$
|
25,515
|
|
|
Year ended June 30,
|
||||||
(In thousands)
|
2017
|
|
2016
|
||||
Beginning balance
|
$
|
34,773
|
|
|
$
|
36,413
|
|
Accruals for warranties issued during the period
|
50,616
|
|
|
39,175
|
|
||
Changes in liability related to pre-existing warranties
|
(5,133
|
)
|
|
(9,146
|
)
|
||
Settlements made during the period
|
(34,798
|
)
|
|
(31,669
|
)
|
||
Ending balance
|
$
|
45,458
|
|
|
$
|
34,773
|
|
|
Year ended June 30,
|
||||||||||
(In thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Beginning balance
|
$
|
587
|
|
|
$
|
24,887
|
|
|
$
|
2,329
|
|
Restructuring costs
|
—
|
|
|
8,926
|
|
|
31,569
|
|
|||
Adjustments
|
(147
|
)
|
|
(142
|
)
|
|
1,177
|
|
|||
Cash payments
|
(440
|
)
|
|
(33,084
|
)
|
|
(10,188
|
)
|
|||
Ending balance
|
$
|
—
|
|
|
$
|
587
|
|
|
$
|
24,887
|
|
(In thousands)
|
Location in Financial Statements
|
Year ended June 30,
|
||||||
2017
|
|
2016
|
||||||
Derivatives Designated as Hedging Instruments
|
|
|
|
|
||||
Gains (losses) in accumulated OCI on derivatives (effective portion)
|
Accumulated OCI
|
$
|
10,138
|
|
|
$
|
(9,622
|
)
|
Gains (losses) reclassified from accumulated OCI into income (effective portion):
|
Revenues
|
$
|
2,846
|
|
|
$
|
(2,926
|
)
|
|
Costs of revenues
|
(378
|
)
|
|
(1,551
|
)
|
||
|
Interest expense
|
754
|
|
|
755
|
|
||
|
Net gains (losses) reclassified from accumulated OCI into income (effective portion)
|
$
|
3,222
|
|
|
$
|
(3,722
|
)
|
Net losses recognized in income on derivatives (ineffective portion and amount excluded from effectiveness testing)
|
Other expense (income), net
|
$
|
(929
|
)
|
|
$
|
(989
|
)
|
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
||||
Gains (losses) recognized in income
|
Other expense (income), net
|
$
|
7,318
|
|
|
$
|
(21,430
|
)
|
(In thousands)
|
As of
June 30, 2017 |
|
As of
June 30, 2016 |
||||
Cash flow hedge contracts
|
|
|
|
||||
Purchase
|
$
|
19,305
|
|
|
$
|
7,591
|
|
Sell
|
$
|
128,672
|
|
|
$
|
91,793
|
|
Other foreign currency hedge contracts
|
|
|
|
||||
Purchase
|
$
|
165,563
|
|
|
$
|
122,275
|
|
Sell
|
$
|
118,504
|
|
|
$
|
115,087
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||||||
|
Balance Sheet
Location
|
|
As of
June 30, 2017 |
|
As of
June 30, 2016 |
|
Balance Sheet
Location
|
|
As of
June 30, 2017 |
|
As of
June 30, 2016 |
||||||||
(In thousands)
|
Fair Value
|
|
|
Fair Value
|
|||||||||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Other current assets
|
|
$
|
2,198
|
|
|
$
|
342
|
|
|
Other current liabilities
|
|
$
|
72
|
|
|
$
|
4,736
|
|
Total derivatives designated as hedging instruments
|
|
|
2,198
|
|
|
342
|
|
|
|
|
72
|
|
|
4,736
|
|
||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Other current assets
|
|
3,733
|
|
|
753
|
|
|
Other current liabilities
|
|
1,203
|
|
|
6,911
|
|
||||
Total derivatives not designated as hedging instruments
|
|
|
3,733
|
|
|
753
|
|
|
|
|
1,203
|
|
|
6,911
|
|
||||
Total derivatives
|
|
|
$
|
5,931
|
|
|
$
|
1,095
|
|
|
|
|
$
|
1,275
|
|
|
$
|
11,647
|
|
|
|
Year ended June 30,
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
Beginning balance
|
|
$
|
1,210
|
|
|
$
|
7,110
|
|
Amount reclassified to income
|
|
(3,222
|
)
|
|
3,722
|
|
||
Net change in unrealized gains or losses
|
|
10,138
|
|
|
(9,622
|
)
|
||
Ending balance
|
|
$
|
8,126
|
|
|
$
|
1,210
|
|
As of June 30, 2017
|
|
|
|
|
|
Gross Amounts of Derivatives Not Offset in the Consolidated Balance Sheets
|
|
|
||||||||||||||||
Description
|
|
Gross Amounts of Derivatives
|
|
Gross Amounts of Derivatives Offset in the Consolidated Balance Sheets
|
|
Net Amount of Derivatives Presented in the Consolidated Balance Sheets
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||||||||
Derivatives - Assets
|
|
$
|
5,931
|
|
|
$
|
—
|
|
|
$
|
5,931
|
|
|
$
|
(1,275
|
)
|
|
$
|
—
|
|
|
$
|
4,656
|
|
Derivatives - Liabilities
|
|
$
|
(1,275
|
)
|
|
$
|
—
|
|
|
$
|
(1,275
|
)
|
|
$
|
1,275
|
|
|
$
|
—
|
|
|
$
|
—
|
|
As of June 30, 2016
|
|
|
|
|
|
Gross Amounts of Derivatives Not Offset in the Consolidated Balance Sheets
|
|
|
||||||||||||||||
Description
|
|
Gross Amounts of Derivatives
|
|
Gross Amounts of Derivatives Offset in the Consolidated Balance Sheets
|
|
Net Amount of Derivatives Presented in the Consolidated Balance Sheets
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||||||||
Derivatives - Assets
|
|
$
|
1,095
|
|
|
$
|
—
|
|
|
$
|
1,095
|
|
|
$
|
(843
|
)
|
|
$
|
—
|
|
|
$
|
252
|
|
Derivatives - Liabilities
|
|
$
|
(11,647
|
)
|
|
$
|
—
|
|
|
$
|
(11,647
|
)
|
|
$
|
843
|
|
|
$
|
—
|
|
|
$
|
(10,804
|
)
|
(Dollar amounts in thousands)
|
Year ended June 30,
|
|||||||||||||||||||
2017
|
|
2016
|
|
2015
|
||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Taiwan
|
$
|
1,104,307
|
|
|
32
|
%
|
|
$
|
894,557
|
|
|
30
|
%
|
|
$
|
691,482
|
|
|
25
|
%
|
Korea
|
688,094
|
|
|
20
|
%
|
|
367,905
|
|
|
12
|
%
|
|
405,320
|
|
|
14
|
%
|
|||
North America
|
523,024
|
|
|
14
|
%
|
|
521,335
|
|
|
18
|
%
|
|
815,914
|
|
|
29
|
%
|
|||
China
|
412,098
|
|
|
12
|
%
|
|
430,074
|
|
|
14
|
%
|
|
162,669
|
|
|
6
|
%
|
|||
Japan
|
351,202
|
|
|
10
|
%
|
|
444,216
|
|
|
15
|
%
|
|
426,963
|
|
|
15
|
%
|
|||
Europe & Israel
|
263,789
|
|
|
8
|
%
|
|
167,936
|
|
|
6
|
%
|
|
194,670
|
|
|
7
|
%
|
|||
Rest of Asia
|
137,500
|
|
|
4
|
%
|
|
158,470
|
|
|
5
|
%
|
|
117,031
|
|
|
4
|
%
|
|||
Total
|
$
|
3,480,014
|
|
|
100
|
%
|
|
$
|
2,984,493
|
|
|
100
|
%
|
|
$
|
2,814,049
|
|
|
100
|
%
|
(Dollar amounts in thousands)
|
Year ended June 30,
|
|||||||||||||||||||
2017
|
|
2016
|
|
2015
|
||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Wafer Inspection
|
$
|
1,601,190
|
|
|
46
|
%
|
|
$
|
1,293,922
|
|
|
43
|
%
|
|
$
|
1,224,858
|
|
|
44
|
%
|
Patterning
|
917,178
|
|
|
26
|
%
|
|
772,045
|
|
|
26
|
%
|
|
736,959
|
|
|
26
|
%
|
|||
Global Service and Support
(1)
|
897,794
|
|
|
26
|
%
|
|
852,151
|
|
|
29
|
%
|
|
790,971
|
|
|
28
|
%
|
|||
Other
|
63,852
|
|
|
2
|
%
|
|
66,375
|
|
|
2
|
%
|
|
61,261
|
|
|
2
|
%
|
|||
Total
|
$
|
3,480,014
|
|
|
100
|
%
|
|
$
|
2,984,493
|
|
|
100
|
%
|
|
$
|
2,814,049
|
|
|
100
|
%
|
(In thousands, except per share data)
|
First quarter
ended
September 30, 2016
|
|
Second quarter
ended
December 31, 2016
|
|
Third quarter
ended
March 31, 2017
|
|
Fourth quarter
ended
June 30, 2017
|
||||||||
Total revenues
|
$
|
750,673
|
|
|
$
|
876,885
|
|
|
$
|
913,809
|
|
|
$
|
938,647
|
|
Gross margin
|
$
|
472,837
|
|
|
$
|
558,378
|
|
|
$
|
570,535
|
|
|
$
|
590,717
|
|
Net income
|
$
|
178,101
|
|
|
$
|
238,251
|
|
|
$
|
253,562
|
|
|
$
|
256,162
|
|
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
(1)
|
$
|
1.14
|
|
|
$
|
1.52
|
|
|
$
|
1.62
|
|
|
$
|
1.64
|
|
Diluted
(1)
|
$
|
1.13
|
|
|
$
|
1.52
|
|
|
$
|
1.61
|
|
|
$
|
1.62
|
|
(In thousands, except per share data)
|
First quarter
ended
September 30, 2015
|
|
Second quarter
ended
December 31, 2015
|
|
Third quarter
ended
March 31, 2016
|
|
Fourth quarter
ended
June 30, 2016
|
||||||||
Total revenues
|
$
|
642,644
|
|
|
$
|
710,245
|
|
|
$
|
712,433
|
|
|
$
|
919,171
|
|
Gross margin
|
$
|
372,400
|
|
|
$
|
429,265
|
|
|
$
|
437,834
|
|
|
$
|
581,603
|
|
Net income
|
$
|
104,897
|
|
|
$
|
152,207
|
|
|
$
|
175,777
|
|
|
$
|
271,541
|
|
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
(1)
|
$
|
0.67
|
|
|
$
|
0.98
|
|
|
$
|
1.13
|
|
|
$
|
1.74
|
|
Diluted
(1)
|
$
|
0.66
|
|
|
$
|
0.98
|
|
|
$
|
1.12
|
|
|
$
|
1.73
|
|
(1)
|
Basic and diluted net income per share are computed independently for each of the quarters presented based on the weighted-average basic and fully diluted shares outstanding for each quarter. Therefore, the sum of quarterly basic and diluted net income per share information may not equal annual basic and diluted net income per share.
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
|
|
|
|
KLA-Tencor Corporation
|
|
|
|
|
|
August 4, 2017
|
|
By:
|
|
/
S
/ R
ICHARD
P. W
ALLACE
|
(Date)
|
|
|
|
Richard P. Wallace
|
|
|
|
|
President and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ R
ICHARD
P. W
ALLACE
|
|
President, Chief Executive Officer and Director (principal executive officer)
|
|
August 4, 2017
|
Richard P. Wallace
|
|
|
||
|
|
|
|
|
/s/ B
REN
D. H
IGGINS
|
|
Executive Vice President and Chief Financial Officer (principal financial officer)
|
|
August 4, 2017
|
Bren D. Higgins
|
|
|
||
|
|
|
|
|
/s/ V
IRENDRA
A. K
IRLOSKAR
|
|
Senior Vice President and Chief Accounting Officer (principal accounting officer)
|
|
August 4, 2017
|
Virendra A. Kirloskar
|
|
|
||
|
|
|
|
|
/s/ E
DWARD
W. B
ARNHOLT
|
|
Chairman of the Board and Director
|
|
August 4, 2017
|
Edward W. Barnholt
|
|
|
||
|
|
|
|
|
/s/ R
OBERT
M. C
ALDERONI
|
|
Director
|
|
August 4, 2017
|
Robert M. Calderoni
|
|
|
||
|
|
|
|
|
/s/ J
OHN
T. D
ICKSON
|
|
Director
|
|
August 4, 2017
|
John T. Dickson
|
|
|
||
|
|
|
|
|
/s/ E
MIKO
H
IGASHI
|
|
Director
|
|
August 4, 2017
|
Emiko Higashi
|
|
|
||
|
|
|
|
|
/s/ K
EVIN
J. K
ENNEDY
|
|
Director
|
|
August 4, 2017
|
Kevin J. Kennedy
|
|
|
||
|
|
|
|
|
/s/ G
ARY
B. M
OORE
|
|
Director
|
|
August 4, 2017
|
Gary B. Moore
|
|
|
||
|
|
|
|
|
/s/ K
IRAN
M. P
ATEL
|
|
Director
|
|
August 4, 2017
|
Kiran M. Patel
|
|
|
||
|
|
|
|
|
/s/ R
OBERT
A. R
ANGO
|
|
Director
|
|
August 4, 2017
|
Robert A. Rango
|
|
|
||
|
|
|
|
|
/s/ D
AVID
C. W
ANG
|
|
Director
|
|
August 4, 2017
|
David C. Wang
|
|
|
||
|
|
|
|
|
(In thousands)
|
Balance at
Beginning
of Period
|
|
Charged to
Expense
|
|
Deductions/
Adjustments
|
|
Balance
at End
of Period
|
||||||||
Fiscal Year Ended June 30, 2015:
|
|
|
|
|
|
|
|
||||||||
Allowance for Doubtful Accounts
|
$
|
21,827
|
|
|
$
|
—
|
|
|
$
|
(164
|
)
|
|
$
|
21,663
|
|
Allowance for Deferred Tax Assets
|
$
|
76,328
|
|
|
$
|
—
|
|
|
$
|
15,022
|
|
|
$
|
91,350
|
|
Fiscal Year Ended June 30, 2016:
|
|
|
|
|
|
|
|
||||||||
Allowance for Doubtful Accounts
|
$
|
21,663
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
21,672
|
|
Allowance for Deferred Tax Assets
|
$
|
91,350
|
|
|
$
|
1,763
|
|
|
$
|
11,855
|
|
|
$
|
104,968
|
|
Fiscal Year Ended June 30, 2017:
|
|
|
|
|
|
|
|
|
|||||||
Allowance for Doubtful Accounts
|
$
|
21,672
|
|
|
$
|
—
|
|
|
$
|
(36
|
)
|
|
$
|
21,636
|
|
Allowance for Deferred Tax Assets
|
$
|
104,968
|
|
|
$
|
—
|
|
|
$
|
15,740
|
|
|
$
|
120,708
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporated by Reference
|
||||||
Form
|
|
File No.
|
|
Exhibit
Number
|
|
Filing Date
|
||||
2.1
|
|
Agreement and Plan of Merger and Reorganization, dated as of October 20, 2015, by and among Lam Research Corporation, Topeka Merger Sub 1, Inc., Topeka Merger sub 2, Inc. and KLA-Tencor Corporation
|
|
8-K
|
|
No. 000-09992
|
|
2.1
|
|
October 21, 2015
|
2.2
|
|
Termination Agreement with Lam Research Corporation
|
|
8-K
|
|
No. 000-09992
|
|
2.1
|
|
October 6, 2016
|
3.1
|
|
Amended and Restated Certificate of Incorporation
|
|
10-Q
|
|
No. 000-09992
|
|
3.1
|
|
May 14, 1997
|
3.2
|
|
Certificate of Amendment of Amended and Restated Certificate of Incorporation
|
|
10-Q
|
|
No. 000-09992
|
|
3.1
|
|
February 14, 2001
|
3.3
|
|
Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company effective as of November 8, 2012
|
|
8-K
|
|
No. 000-09992
|
|
3.1
|
|
November 13, 2012
|
3.4
|
|
Amended and Restated Bylaws of the Company effective as of May 7, 2015
|
|
8-K
|
|
No. 000-09992
|
|
3.1
|
|
May 8, 2015
|
4.1
|
|
Indenture dated November 6, 2014 between KLA-Tencor Corporation and Wells Fargo Bank, National Association, as trustee
|
|
8-K
|
|
No. 000-09992
|
|
4.1
|
|
November 7, 2014
|
4.2
|
|
Form of Officer’s Certificate setting forth the terms of the Notes (with form of Notes attached)
|
|
8-K
|
|
No. 000-09992
|
|
4.2
|
|
November 7, 2014
|
10.1
|
|
2004 Equity Incentive Plan (as amended and restated (as of August 7, 2014))*
|
|
8-K
|
|
No. 000-09992
|
|
10.45
|
|
August 12, 2014
|
10.2
|
|
Notice of Grant of Restricted Stock Units*
|
|
10-Q
|
|
No. 000-09992
|
|
10.18
|
|
May 4, 2006
|
10.3
|
|
Form of Restricted Stock Unit Award Notification (Performance-Vesting) (approved August 2014)*
|
|
8-K
|
|
No. 000-09992
|
|
10.49
|
|
August 12, 2014
|
10.4
|
|
Form of Restricted Stock Unit Award Notification (Service-Vesting) (approved August 2012)*
|
|
8-K
|
|
No. 000-09992
|
|
10.1
|
|
August 2, 2012
|
10.5
|
|
Form of Restricted Stock Unit Award Notification (Service-Vesting; 25% Annual Vesting) (approved August 2014)*
|
|
8-K
|
|
No. 000-09992
|
|
10.50
|
|
August 12, 2014
|
10.6
|
|
Form of Restricted Stock Unit Award Notification (Service-Vesting; 50% Vesting Year Two, 50% Vesting Year Four) (approved August 2014)*
|
|
8-K
|
|
No. 000-09992
|
|
10.51
|
|
August 12, 2014
|
10.7
|
|
Form of Restricted Stock Unit Agreement for U.S. Employees (with Dividend Equivalents) (approved August 2014)*
|
|
8-K
|
|
No. 000-09992
|
|
10.46
|
|
August 12, 2014
|
10.8
|
|
Form of Restricted Stock Unit Agreement for Non-U.S. Employees (with Dividend Equivalents) (approved August 2014)*
|
|
8-K
|
|
No. 000-09992
|
|
10.48
|
|
August 12, 2014
|
10.9
|
|
KLA-Tencor Corporation Performance Bonus Plan*
|
|
DEF 14A
|
|
No. 000-09992
|
|
App. B
|
|
September 26, 2013
|
10.10
|
|
Fiscal Year 2015 Executive Incentive Plan*+
|
|
10-Q
|
|
No. 000-09992
|
|
10.53
|
|
October 24, 2014
|
10.11
|
|
Fiscal Year 2016 Executive Incentive Plan*+
|
|
10-Q
|
|
No. 000-09992
|
|
10.44
|
|
October 22, 2015
|
10.12
|
|
Executive Deferred Savings Plan (as amended and restated effective November 7, 2012)*
|
|
10-Q
|
|
No. 000-09992
|
|
10.42
|
|
January 25, 2013
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporated by Reference
|
||||||
Form
|
|
File No.
|
|
Exhibit
Number
|
|
Filing Date
|
||||
10.13
|
|
Credit Agreement dated November 14, 2014 among KLA-Tencor Corporation, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent
|
|
8-K
|
|
No. 000-09992
|
|
10.54
|
|
November 17, 2014
|
10.14
|
|
Fiscal year 2017 6-Month Executive Incentive Plan*+
|
|
10-Q
|
|
No. 000-09992
|
|
10.1
|
|
October 20, 2016
|
10.15
|
|
Amended and Restated Executive Severance Plan*
|
|
8-K
|
|
No. 000-09992
|
|
10.1
|
|
October 20, 2016
|
10.16
|
|
Amended and Restated 2010 Executive Severance Plan
|
|
10-Q
|
|
No. 000-09992
|
|
10.45
|
|
October 22, 2015
|
10.17
|
|
Calendar Year 2017 Executive Incentive Plan*+
|
|
10-Q
|
|
No. 000-09992
|
|
10.1
|
|
April 28, 2017
|
12.1
|
|
Computation of Ratio of Earnings to Fixed Charges
|
|
|
|
|
|
|
|
|
21.1
|
|
List of Subsidiaries
|
|
|
|
|
|
|
|
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm
|
|
|
|
|
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer under Rule 13a-14(a) of the Securities Exchange Act of 1934
|
|
|
|
|
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer under Rule 13a-14(a) of the Securities Exchange Act of 1934
|
|
|
|
|
|
|
|
|
32
|
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350
|
|
|
|
|
|
|
|
|
99.1
|
|
Risks related to the Merger with Lam Research
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
*
|
Denotes a management contract, plan or arrangement.
|
+
|
Confidential treatment has been requested as to a portion of this exhibit.
|
|
Fiscal year ended June 30,
|
||||||||||||||||||
(In thousands, except ratios)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
$
|
1,173,246
|
|
|
$
|
858,192
|
|
|
$
|
434,131
|
|
|
$
|
734,461
|
|
|
$
|
690,621
|
|
Add back fixed charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
(1)
|
122,476
|
|
|
122,887
|
|
|
110,311
|
|
|
53,812
|
|
|
54,176
|
|
|||||
Interest portion of rental expense
|
3,203
|
|
|
2,912
|
|
|
3,023
|
|
|
2,915
|
|
|
3,081
|
|
|||||
Total adjusted earnings
|
$
|
1,298,925
|
|
|
$
|
983,991
|
|
|
$
|
547,465
|
|
|
$
|
791,188
|
|
|
$
|
747,878
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
(1)
|
$
|
122,476
|
|
|
$
|
122,887
|
|
|
$
|
110,311
|
|
|
$
|
53,812
|
|
|
$
|
54,176
|
|
Interest portion of rental expense
|
3,203
|
|
|
2,912
|
|
|
3,023
|
|
|
2,915
|
|
|
3,081
|
|
|||||
Total fixed charges
|
$
|
125,679
|
|
|
$
|
125,799
|
|
|
$
|
113,334
|
|
|
$
|
56,727
|
|
|
$
|
57,257
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
10.3
|
|
|
7.8
|
|
|
4.8
|
|
|
13.9
|
|
|
13.1
|
|
(1)
|
Interest expense for the fiscal year ended June 30, 2015 includes interest expense, amortization of bond issuance costs, amortization of bond discount and portion of the bond issuance costs and bond discount that were expensed as part of our redemption of the 2018 Senior Notes during the three months ended December 31, 2014.
|
Name
|
|
State or Other Jurisdiction of
Incorporation / Organization
|
DOMESTIC SUBSIDIARIES
|
|
|
International Sales & Business, Inc.
|
|
California
|
KLA-Tencor China Corporation
|
|
California
|
KLA-Tencor International Corporation
|
|
California
|
VLSI Standards, Inc.
|
|
California
|
ADE International Corporation
|
|
Delaware
|
Belize Holdings, LLC
|
|
Delaware
|
KLA-Tencor Asia-Pac Distribution Corporation
|
|
Delaware
|
KT Venture Group, L.L.C.
|
|
Delaware
|
KT Venture Group II, L.L.C.
|
|
Delaware
|
Dino Acquisition Technology L.L.C.
|
|
Delaware
|
Zeta Instruments, Inc.
|
|
Delaware
|
KT Recreation Association, LLC
|
|
Delaware
|
|
|
|
INTERNATIONAL SUBSIDIARIES
|
|
|
ICOS Vision Systems Corporation BVBA
|
|
Belgium
|
ICOS Vision Systems NV
|
|
Belgium
|
Lee Ta Technologies (BVI), Inc.
|
|
British Virgin Islands
|
KLA-Tencor Corporation (Cayman) Limited, I
|
|
Cayman Islands
|
KLA-Tencor Corporation (Cayman) Limited, III
|
|
Cayman Islands
|
KLA-Tencor Corporation (Cayman) Limited, IV
|
|
Cayman Islands
|
ICOS Vision Systems (Shenzhen) Co. Ltd.
|
|
China
|
KLA-Tencor International Trading (Shanghai) Co., Ltd.
|
|
China
|
KLA-Tencor Semiconductor Equipment Technology (Shanghai) Co., Ltd.
|
|
China
|
KLA-Tencor France SARL
|
|
France
|
KLA-Tencor GmbH
|
|
Germany
|
KLA-Tencor MIE GmbH
|
|
Germany
|
KLA-Tencor MIE Holdings GmbH & Co. KG
|
|
Germany
|
KLA-Tencor MIE Holdings Verwaltungs GmbH
|
|
Germany
|
ICOS Vision Systems Ltd.
|
|
Hong Kong
|
KLA-Tencor Software India Private Limited
|
|
India
|
KLA-Tencor Ireland Ltd.
|
|
Ireland
|
Optical Metrology Patents Limited
|
|
Ireland
|
KLA-Tencor Corporation (Israel)
|
|
Israel
|
KLA-Tencor Corporation Holding (1987) Ltd.
|
|
Israel
|
KLA-Tencor Corporation (1992) Ltd.
|
|
Israel
|
KLA-Tencor Integrated Metrology (Israel) (2002) Ltd.
|
|
Israel
|
KLA-Tencor Italy S.R.L.
|
|
Italy
|
KLA-Tencor Japan, Ltd.
|
|
Japan
|
KLA-Tencor Korea, Inc.
|
|
Korea
|
KLA-Tencor MIE Holdings S.à r.l.
|
|
Luxembourg
|
KLA-Tencor (Malaysia) Sdn Bhd
|
|
Malaysia
|
Name
|
|
State or Other Jurisdiction of
Incorporation / Organization
|
KLA-Tencor (Singapore) Pte. Ltd.
|
|
Singapore
|
KLA-Tencor Singapore Holding Co. Pte. Ltd.
|
|
Singapore
|
KLA-Tencor Singapore Holding Co. Pte II Ltd.
|
|
Singapore
|
KLA Instruments S.A.
|
|
Switzerland
|
KLA-Tencor (Thailand) Limited
|
|
Thailand
|
KLA-Tencor Limited
|
|
United Kingdom
|
Zeta Instruments (Shanghai) Co., Ltd.
|
|
China
|
/s/ PricewaterhouseCoopers LLP
|
|
|
|
San Jose, California
|
|
August 4, 2017
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of KLA-Tencor Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
August 4, 2017
|
|
/s/ R
ICHARD
P. W
ALLACE
|
(Date)
|
|
Richard P. Wallace
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K of KLA-Tencor Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
August 4, 2017
|
|
/s/ B
REN
D. H
IGGINS
|
(Date)
|
|
Bren D. Higgins
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
August 4, 2017
|
|
By:
|
/s/ R
ICHARD
P. W
ALLACE
|
|
(Date)
|
|
Name:
|
Richard P. Wallace
|
|
|
|
Title:
|
President and Chief Executive Officer
|
August 4, 2017
|
|
By:
|
/s/ B
REN
D. H
IGGINS
|
|
(Date)
|
|
Name:
|
Bren D. Higgins
|
|
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|