FORM
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10-K
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(Mark One)
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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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LAM RESEARCH CORPORATION
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(Exact name of registrant as specified in its charter)
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Delaware
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94-2634797
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||
(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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4650 Cushing Parkway,
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Fremont,
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California
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94538
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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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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, Par Value $0.001 Per Share
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LRCX
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The Nasdaq Stock Market
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(Nasdaq Global Select Market)
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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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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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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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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Item 15.
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Item 1.
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Business
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Market
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Process/Application
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Technology
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Products
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Deposition
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Metal Films
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Electrochemical Deposition (“ECD”) (Copper & Other)
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SABRE® family
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Chemical Vapor Deposition (“CVD”)
Atomic Layer Deposition (“ALD”)
(Tungsten)
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ALTUS® family
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Dielectric Films
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Plasma-enhanced CVD (“PECVD”)
ALD
Gapfill High-Density Plasma CVD (“HDP-CVD”)
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VECTOR® family
Striker® family
SPEED® family
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Film Treatment
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Ultraviolet Thermal Processing (“ULTP”)
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SOLA® family
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Etch
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Conductor Etch
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Reactive Ion Etch
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Kiyo® family,
Versys® Metal family
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Dielectric Etch
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Reactive Ion Etch
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Flex® family
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Through-silicon Via (“TSV”) Etch
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Deep Reactive Ion Etch
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Syndion® family
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Clean
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Wafer Cleaning
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Wet Clean
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EOS®, DV-Prime®,
Da Vinci®, SP Series
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Bevel Cleaning
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Dry Plasma Clean
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Coronus® family
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Mass Metrology
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Deposition, Etch, Clean
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Sub-milligram Mass Measurement
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Metryx® Family
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Name
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Age
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Title
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Timothy M. Archer
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53
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President and Chief Executive Officer
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Douglas R. Bettinger
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53
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Executive Vice President, Chief Financial Officer, and Chief Accounting Officer
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Richard A. Gottscho
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68
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Executive Vice President, Chief Technology Officer
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Ava M. Hahn
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47
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Senior Vice President, Chief Legal Officer and Secretary
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Kevin D. Jennings
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55
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Senior Vice President, Global Operations
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Patrick J. Lord
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54
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Senior Vice President and General Manager, CSBG
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Scott G. Meikle
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58
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Senior Vice President, Global Customer Operations
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Vahid Vahedi
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54
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Senior Vice President and General Manager, Etch Business Unit
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Seshasayee (Sesha) Varadarajan
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45
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Senior Vice President and General Manager, Deposition Business Unit
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Item 1A.
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Risk Factors
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•
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a decline in demand for our products or services;
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•
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an increase in reserves on accounts receivable due to our customers’ inability to pay us;
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•
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an increase in reserves on inventory balances due to excess or obsolete inventory as a result of our inability to sell such inventory;
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•
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valuation allowances on deferred tax assets;
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•
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restructuring charges;
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•
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asset impairments including the potential impairment of goodwill and other intangible assets;
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•
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a decline in the value of our investments;
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•
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exposure to claims from our suppliers for payment on inventory that is ordered in anticipation of customer purchases that do not come to fruition;
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•
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a decline in the value of certain facilities we lease to less than our residual value guarantee with the lessor; and
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•
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challenges maintaining reliable and uninterrupted sources of supply.
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•
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economic conditions in the electronics and semiconductor industries in general and specifically the semiconductor equipment industry;
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•
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the size and timing of orders from customers;
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•
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consolidation of the customer base, which may result in the investment decisions of one customer or market having a significant effect on demand for our products or services;
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•
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procurement shortages;
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•
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the failure of our suppliers or outsource providers to perform their obligations in a manner consistent with our expectations;
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•
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manufacturing difficulties;
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•
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customer cancellations or delays in shipments, installations, customer payments, and/or customer acceptances;
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•
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the extent that customers continue to purchase and use our products and services in their business;
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•
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our customers’ reuse of existing and installed products, to the extent that such reuse decreases their need to purchase new products or services;
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•
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changes in average selling prices, customer mix, and product mix;
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•
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our ability to develop, introduce, and market new, enhanced, and competitive products in a timely manner;
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•
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our competitors’ introduction of new products;
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•
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legal or technical challenges to our products and technologies;
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•
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transportation, communication, demand, information technology, or supply disruptions based on factors outside our control, such as strikes, acts of God, wars, terrorist activities, widespread outbreak of illness, and natural or man-made disasters;
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•
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legal, tax, accounting, or regulatory changes (including but not limited to change in import/export regulations and tariffs) or changes in the interpretation or enforcement of existing requirements;
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•
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changes in our estimated effective tax rate; and
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•
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foreign currency exchange rate fluctuations.
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•
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general market, semiconductor, or semiconductor equipment industry conditions;
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•
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economic or political events, trends, and unexpected developments occurring nationally, globally, or in any of our key sales regions;
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•
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variations in our quarterly operating results and financial condition, including our liquidity;
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•
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variations in our revenues, earnings, or other business and financial metrics from forecasts by us or securities analysts or from those experienced by other companies in our industry;
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•
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announcements of restructurings, reductions in force, departure of key employees, and/or consolidations of operations;
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•
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government regulations;
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•
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developments in, or claims relating to, patent or other proprietary rights;
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•
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technological innovations and the introduction of new products by us or our competitors;
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•
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commercial success or failure of our new and existing products; or
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•
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disruptions of relationships with key customers or suppliers.
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•
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loss of (or inability to access, e.g. through ransomware) confidential and/or sensitive information stored on these critical information systems or transmitted to or from those systems;
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•
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the disruption of the proper function of our products, services and/or operations;
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•
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the failure of our or our customers’ manufacturing processes;
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•
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errors in the output of our work or our customers’ work;
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•
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the loss or public exposure of the personal information of our employees, customers or other parties;
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•
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the public release of customer orders, financial and business plans, and operational results;
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•
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exposure to claims from third parties who are adversely impacted by such incidents;
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•
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Misappropriation or theft of our or a customer’s, supplier’s or other party's assets or resources, including technology data, intellectual property or other sensitive information and costs associated therewith;
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•
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reputational damage;
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•
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diminution in the value of our investment in research, development and engineering; or
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•
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our failure to meet, or violation of, regulatory or other legal obligations, such as the timely publication or filing of financial statements, tax information and other required communications.
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•
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a decline in demand for even a limited number of our products,
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•
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a failure to achieve continued market acceptance of our key products,
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•
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export restrictions or other regulatory or legislative actions that could limit our ability to sell those products to key customers or customers within certain markets,
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•
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an improved version of products being offered by a competitor in the markets in which we participate,
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•
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increased pressure from competitors that offer broader product lines,
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•
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increased pressure from regional competitors,
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•
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technological changes that we are unable to address with our products, or
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•
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a failure to release new or enhanced versions of our products on a timely basis.
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•
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domestic and international trade regulations, policies, practices, relations, disputes and issues;
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•
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domestic and international tariffs, export controls and other barriers;
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•
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developing customers and/or suppliers, who may have limited access to capital resources;
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•
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global or national economic and political conditions;
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•
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changes in currency controls;
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•
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differences in the enforcement of intellectual property and contract rights in varying jurisdictions;
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•
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our ability to respond to customer and foreign government demands for locally sourced systems, spare parts, and services and develop the necessary relationships with local suppliers;
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•
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changes in and compliance with U.S. and international laws and regulations affecting foreign operations, including U.S. and international trade restrictions and sanctions, anti-bribery, anti-corruption, environmental, tax, and labor laws;
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•
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fluctuations in interest and foreign currency exchange rates;
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•
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the need for technical support resources in different locations; and
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•
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our ability to secure and retain qualified people, and effectively manage people, in all necessary
|
•
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risk associated with the alternative reference rate reform (e.g. LIBOR transition);
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•
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risk associated with any inability to satisfy our obligations;
|
•
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a portion of our cash flows that may have to be dedicated to interest and principal payments and may not be available for operations, working capital, capital expenditures, expansion, acquisitions, or general corporate or other purposes; and
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•
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impairing our ability to obtain additional financing in the future.
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•
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incur additional debt, assume obligations in connection with letters of credit, or issue guarantees;
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•
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create liens;
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•
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enter into transactions with our affiliates;
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•
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sell certain assets; and
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•
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merge or consolidate with any person.
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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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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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Period
|
Total Number
of Shares
Repurchased (1)
|
|
Average
Price Paid
per Share(2)
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
|
|
Amount
Available
Under
Repurchase
Program
|
||||||
|
(in thousands, except per share data)
|
||||||||||||
Available balance as of June 30, 2019
|
|
|
|
|
|
|
$
|
3,033,500
|
|
||||
Quarter ended September 29, 2019
|
397
|
|
|
$
|
196.83
|
|
|
383
|
|
|
2,958,304
|
|
|
Quarter ended December 29, 2019
|
3,242
|
|
|
$
|
265.88
|
|
|
3,224
|
|
|
1,957,829
|
|
|
Quarter ended March 29, 2020
|
1,576
|
|
|
$
|
281.93
|
|
|
1,239
|
|
|
1,811,432
|
|
|
March 30, 2020 - April 26, 2020
|
3
|
|
|
$
|
261.24
|
|
|
—
|
|
|
1,811,432
|
|
|
April 27, 2020 - May 24, 2020
|
134
|
|
|
$
|
260.59
|
|
|
129
|
|
|
1,777,649
|
|
|
May 25, 2020 - June 28, 2020
|
19
|
|
|
$
|
267.31
|
|
|
16
|
|
|
1,773,427
|
|
|
Total
|
5,371
|
|
|
$
|
261.44
|
|
|
4,991
|
|
|
$
|
1,773,427
|
|
(1)
|
During the fiscal year ended June 28, 2020, we acquired 380 thousand shares at a total cost of $109.6 million which we withheld through net share settlements to cover minimum tax withholding obligations upon the vesting of restricted stock unit awards granted under our equity compensation plans. The shares retained by us through these net share settlements are not a part of the Board-authorized repurchase program but instead are authorized under our equity compensation plan.
|
(2)
|
Average price paid per share excludes effect of accelerated share repurchases, see additional disclosure above regarding our accelerated share repurchase activity during the fiscal year.
|
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
|
|||
|
Among Lam Research Corporation, the Philadelphia Semiconductor Sector Total Return Index, the Nasdaq Composite Total Return Index, and the S&P 500 (TR) Index.
|
|
|
June 28, 2015
|
|
June 26, 2016
|
|
June 25, 2017
|
|
June 24, 2018
|
|
June 30, 2019
|
|
June 28, 2020
|
||||||||||||
Lam Research Corporation
|
$
|
100.00
|
|
|
$
|
100.88
|
|
|
$
|
188.74
|
|
|
$
|
220.13
|
|
|
$
|
242.99
|
|
|
$
|
398.42
|
|
Philadelphia Semiconductor Sector Total Return Index
|
$
|
100.00
|
|
|
$
|
103.77
|
|
|
$
|
157.95
|
|
|
$
|
203.93
|
|
|
$
|
231.07
|
|
|
$
|
321.96
|
|
Nasdaq Composite Total Return Index
|
$
|
100.00
|
|
|
$
|
98.32
|
|
|
$
|
126.14
|
|
|
$
|
155.91
|
|
|
$
|
168.04
|
|
|
$
|
213.32
|
|
S&P 500 (TR) Index
|
$
|
100.00
|
|
|
$
|
103.99
|
|
|
$
|
122.60
|
|
|
$
|
140.23
|
|
|
$
|
154.83
|
|
|
$
|
166.45
|
|
Item 6.
|
Selected Financial Data
|
|
Year Ended
|
|
||||||||||||||||||
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
|
June 25,
2017 |
|
June 26,
2016 |
|
|||||||||||
|
(in thousands, except per share data)
|
|
||||||||||||||||||
OPERATIONS:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
10,044,736
|
|
|
$
|
9,653,559
|
|
|
$
|
11,076,998
|
|
|
$
|
8,013,620
|
|
|
$
|
5,885,893
|
|
|
Gross margin
|
4,608,693
|
|
|
4,358,459
|
|
|
5,165,032
|
|
|
3,603,359
|
|
|
2,618,922
|
|
|
|||||
Operating income
|
2,673,802
|
|
|
2,464,732
|
|
|
3,213,299
|
|
|
1,902,132
|
|
|
1,074,256
|
|
|
|||||
Net income
|
2,251,753
|
|
|
2,191,430
|
|
|
2,380,681
|
|
|
1,697,763
|
|
|
914,049
|
|
|
|||||
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
15.55
|
|
|
$
|
14.37
|
|
|
$
|
14.73
|
|
|
$
|
10.47
|
|
|
$
|
5.75
|
|
|
Diluted
|
$
|
15.10
|
|
|
$
|
13.70
|
|
|
$
|
13.17
|
|
|
$
|
9.24
|
|
|
$
|
5.22
|
|
|
Cash dividends declared per common share
|
$
|
4.60
|
|
|
$
|
4.40
|
|
|
$
|
2.55
|
|
|
$
|
1.65
|
|
|
$
|
1.20
|
|
|
BALANCE SHEET:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital
|
$
|
7,691,093
|
|
|
$
|
6,188,759
|
|
|
$
|
5,999,603
|
|
|
$
|
6,192,383
|
|
|
$
|
6,795,109
|
|
|
Total assets
|
14,559,047
|
|
|
12,001,333
|
|
|
12,479,478
|
|
|
12,122,765
|
|
|
12,264,315
|
|
(1)
|
|||||
Total obligations, less current portion
|
6,213,116
|
|
|
4,906,379
|
|
|
2,749,127
|
|
|
2,185,338
|
|
|
3,744,205
|
|
(1)
|
|||||
Current portion of long-term debt and finance leases
|
839,877
|
|
|
667,131
|
|
|
610,030
|
|
|
908,439
|
|
|
947,733
|
|
(1)
|
(1)
|
Adjusted for effects of retrospective implementation of Accounting Standards Update 2015-3 in the first quarter of fiscal 2017.
|
|
Three Months Ended (1)
|
||||||||||||||
June 28,
2020 |
|
March 29,
2020 |
|
December 29,
2019 |
|
September 29,
2019 |
|||||||||
|
unaudited
(in thousands, except per share data)
|
||||||||||||||
QUARTERLY FISCAL YEAR 2020:
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
2,791,864
|
|
|
$
|
2,503,625
|
|
|
$
|
2,583,501
|
|
|
$
|
2,165,746
|
|
Gross margin
|
1,280,332
|
|
|
1,167,007
|
|
|
1,179,644
|
|
|
981,710
|
|
||||
Operating income
|
755,722
|
|
|
694,114
|
|
|
686,511
|
|
|
537,455
|
|
||||
Net income
|
696,673
|
|
|
574,781
|
|
|
514,510
|
|
|
465,789
|
|
||||
Net income per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
4.79
|
|
|
$
|
3.96
|
|
|
$
|
3.57
|
|
|
$
|
3.22
|
|
Diluted
|
$
|
4.73
|
|
|
$
|
3.88
|
|
|
$
|
3.43
|
|
|
$
|
3.09
|
|
Number of shares used in per share calculations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
145,295
|
|
|
145,301
|
|
|
143,987
|
|
|
144,673
|
|
||||
Diluted
|
147,416
|
|
|
148,165
|
|
|
150,097
|
|
|
150,682
|
|
|
Three Months Ended (1)
|
||||||||||||||
June 30,
2019
|
|
March 31,
2019 |
|
December 23,
2018 |
|
September 23,
2018 |
|||||||||
|
unaudited
(in thousands, except per share data)
|
||||||||||||||
QUARTERLY FISCAL YEAR 2019:
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
2,361,147
|
|
|
$
|
2,439,048
|
|
|
$
|
2,522,673
|
|
|
$
|
2,330,691
|
|
Gross margin
|
1,080,891
|
|
|
1,074,337
|
|
|
1,145,033
|
|
|
1,058,198
|
|
||||
Operating income
|
617,085
|
|
|
565,517
|
|
|
690,379
|
|
|
591,751
|
|
||||
Net income
|
541,825
|
|
|
547,390
|
|
|
568,855
|
|
|
533,360
|
|
||||
Net income per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
3.66
|
|
|
$
|
3.62
|
|
|
$
|
3.67
|
|
|
$
|
3.43
|
|
Diluted
|
$
|
3.51
|
|
|
$
|
3.47
|
|
|
$
|
3.51
|
|
|
$
|
3.23
|
|
Number of shares used in per share calculations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
148,131
|
|
|
151,201
|
|
|
155,022
|
|
|
155,658
|
|
||||
Diluted
|
154,474
|
|
|
157,849
|
|
|
162,170
|
|
|
165,327
|
|
(1)
|
Our reporting period is a 52/53-week fiscal year. The fiscal years ended June 28, 2020, and June 30, 2019, included 52 and 53 weeks, respectively. All quarters presented above included 13 weeks, except for the quarter ended March 31, 2019, which includes 14 weeks.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Year Ended
|
|
Change
|
||||||||||||||||||||||
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
|
FY20 vs. FY19
|
|
FY19 vs. FY18
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(in thousands, except per share data and percentages)
|
||||||||||||||||||||||||
Revenue
|
$
|
10,044,736
|
|
|
$
|
9,653,559
|
|
|
$
|
11,076,998
|
|
|
$
|
391,177
|
|
|
4.1
|
%
|
|
$
|
(1,423,439
|
)
|
|
(12.9
|
)%
|
Gross margin
|
$
|
4,608,693
|
|
|
$
|
4,358,459
|
|
|
$
|
5,165,032
|
|
|
$
|
250,234
|
|
|
5.7
|
%
|
|
$
|
(806,573
|
)
|
|
(15.6
|
)%
|
Gross margin as a percent of total revenue
|
45.9
|
%
|
|
45.1
|
%
|
|
46.6
|
%
|
|
0.8%
|
|
(1.5)%
|
|||||||||||||
Total operating expenses
|
$
|
1,934,891
|
|
|
$
|
1,893,727
|
|
|
$
|
1,951,733
|
|
|
$
|
41,164
|
|
|
2.2
|
%
|
|
$
|
(58,006
|
)
|
|
(3.0
|
)%
|
Net income
|
$
|
2,251,753
|
|
|
$
|
2,191,430
|
|
|
$
|
2,380,681
|
|
|
$
|
60,323
|
|
|
2.8
|
%
|
|
$
|
(189,251
|
)
|
|
(7.9
|
)%
|
Net income per diluted share
|
$
|
15.10
|
|
|
$
|
13.70
|
|
|
$
|
13.17
|
|
|
$
|
1.40
|
|
|
10.2
|
%
|
|
$
|
0.53
|
|
|
4.0
|
%
|
|
Year Ended
|
||||||||||
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
|||||||
Revenue (in millions)
|
$
|
10,045
|
|
|
$
|
9,654
|
|
|
$
|
11,077
|
|
China
|
31
|
%
|
|
22
|
%
|
|
16
|
%
|
|||
Korea
|
24
|
%
|
|
23
|
%
|
|
35
|
%
|
|||
Taiwan
|
19
|
%
|
|
17
|
%
|
|
13
|
%
|
|||
Japan
|
9
|
%
|
|
20
|
%
|
|
17
|
%
|
|||
United States
|
8
|
%
|
|
8
|
%
|
|
7
|
%
|
|||
Southeast Asia
|
6
|
%
|
|
6
|
%
|
|
7
|
%
|
|||
Europe
|
3
|
%
|
|
4
|
%
|
|
5
|
%
|
|
Year Ended
|
||||
June 28,
2020 |
|
June 30,
2019 |
|||
Memory
|
58
|
%
|
|
70
|
%
|
Foundry
|
31
|
%
|
|
20
|
%
|
Logic/integrated device manufacturing
|
11
|
%
|
|
10
|
%
|
|
Year Ended
|
|
Change
|
||||||||||||||||||||||
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
FY20 vs. FY19
|
|
FY19 vs. FY18
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||||||
Gross margin
|
$
|
4,608,693
|
|
|
$
|
4,358,459
|
|
|
$
|
5,165,032
|
|
|
$
|
250,234
|
|
|
5.7
|
%
|
|
$
|
(806,573
|
)
|
|
(15.6
|
)%
|
Percent of revenue
|
45.9
|
%
|
|
45.1
|
%
|
|
46.6
|
%
|
|
0.8%
|
|
(1.5)%
|
|
Year Ended
|
|
Change
|
||||||||||||||||||||||
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
FY20 vs. FY19
|
|
FY19 vs. FY18
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||||||
Research & development
|
$
|
1,252,412
|
|
|
$
|
1,191,320
|
|
|
$
|
1,189,514
|
|
|
$
|
61,092
|
|
|
5.1
|
%
|
|
$
|
1,806
|
|
|
0.2
|
%
|
Percent of revenue
|
12.5
|
%
|
|
12.3
|
%
|
|
10.7
|
%
|
|
0.2%
|
|
1.6%
|
|
Year Ended
|
|
Change
|
||||||||||||||||||||||
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
FY20 vs. FY19
|
|
FY19 vs. FY18
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||||||
Interest income
|
$
|
85,433
|
|
|
$
|
98,771
|
|
|
$
|
85,813
|
|
|
$
|
(13,338
|
)
|
|
(13.5
|
)%
|
|
$
|
12,958
|
|
|
15.1
|
%
|
Interest expense
|
(177,440
|
)
|
|
(117,263
|
)
|
|
(97,387
|
)
|
|
$
|
(60,177
|
)
|
|
51.3
|
%
|
|
$
|
(19,876
|
)
|
|
20.4
|
%
|
|||
Gains on deferred compensation plan related assets, net
|
5,999
|
|
|
10,464
|
|
|
14,692
|
|
|
$
|
(4,465
|
)
|
|
(42.7
|
)%
|
|
$
|
(4,228
|
)
|
|
(28.8
|
)%
|
|||
Loss on impairment of investments
|
—
|
|
|
—
|
|
|
(42,456
|
)
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
42,456
|
|
|
100.0
|
%
|
|||
Foreign exchange (losses) gains, net
|
(3,317
|
)
|
|
826
|
|
|
(3,382
|
)
|
|
$
|
(4,143
|
)
|
|
(501.6
|
)%
|
|
$
|
4,208
|
|
|
(124.4
|
)%
|
|||
Other, net
|
(9,499
|
)
|
|
(10,959
|
)
|
|
(18,790
|
)
|
|
$
|
1,460
|
|
|
(13.3
|
)%
|
|
$
|
7,831
|
|
|
(41.7
|
)%
|
|||
|
$
|
(98,824
|
)
|
|
$
|
(18,161
|
)
|
|
$
|
(61,510
|
)
|
|
$
|
(80,663
|
)
|
|
444.2
|
%
|
|
$
|
43,349
|
|
|
(70.5
|
)%
|
•
|
the recognition and valuation of revenue from arrangements with multiple performance obligations which impacts revenue;
|
•
|
the valuation of inventory, which impacts gross margin;
|
•
|
the valuation of warranty reserves, which impacts gross margin;
|
•
|
the recognition and measurement of current and deferred income taxes, including the measurement of uncertain tax positions, which impact our provision for income tax expenses; and
|
•
|
the valuation and recoverability of long-lived assets, which impacts gross margin and operating expenses when we record asset impairments or accelerate their depreciation or amortization.
|
Net income
|
$
|
2,251,753
|
|
Non-cash charges:
|
|
||
Depreciation and amortization
|
268,525
|
|
|
Equity-based compensation expense
|
189,197
|
|
|
Deferred income taxes
|
(17,777
|
)
|
|
Amortization of note discounts and issuance costs
|
5,940
|
|
|
Changes in operating asset and liability accounts
|
(571,875
|
)
|
|
Other
|
688
|
|
|
|
$
|
2,126,451
|
|
|
Total
|
|
Less than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than
5 Years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Operating leases
|
$
|
186,935
|
|
|
$
|
50,611
|
|
|
$
|
53,624
|
|
|
$
|
33,040
|
|
|
$
|
49,660
|
|
Financing leases
|
16,421
|
|
|
4,170
|
|
|
8,250
|
|
|
1,697
|
|
|
2,304
|
|
|||||
Purchase obligations
|
707,945
|
|
|
541,524
|
|
|
99,040
|
|
|
66,423
|
|
|
958
|
|
|||||
Long-term debt and interest expense (1)
|
8,966,111
|
|
|
997,407
|
|
|
351,881
|
|
|
351,881
|
|
|
7,264,942
|
|
|||||
One-time transition tax on accumulated unrepatriated foreign earnings (2)
|
729,422
|
|
|
69,469
|
|
|
138,938
|
|
|
303,926
|
|
|
217,089
|
|
|||||
Other long-term liabilities (3)
|
208,670
|
|
|
7,177
|
|
|
27,108
|
|
|
7,781
|
|
|
166,604
|
|
|||||
Total
|
$
|
10,815,504
|
|
|
$
|
1,670,358
|
|
|
$
|
678,841
|
|
|
$
|
764,748
|
|
|
$
|
7,701,557
|
|
(1)
|
The conversion period for the 2.625% Convertible Senior Notes due May 2041 (the “2041 Notes”) was open as of June 28, 2020, and as such the net carrying value of the 2041 Notes is included within current liabilities on our Consolidated Balance Sheet. The principal balances of the 2041 Notes are reflected in the payment period in the table above based on the contractual maturity assuming no conversion. See Note 14 of our Consolidated Financial Statements in Part II, Item 8 of this 2020 Form 10-K for additional information concerning the 2041 Notes and associated conversion features.
|
(2)
|
We may choose to apply existing tax credits, thereby reducing the actual cash payment.
|
(3)
|
Certain tax-related liabilities and post-retirement benefits classified as other non-current liabilities on the Consolidated Balance Sheet are included in the “More than 5 Years” category due to the uncertainty in the timing and amount of
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
Valuation of Securities
Given an Interest Rate
Decrease of X Basis Points
|
|
Fair Value
as of
|
|
Valuation of Securities
Given an Interest Rate
Increase of X Basis Points
|
||||||||||||||||||||||
|
June 28,
2020 |
|
|||||||||||||||||||||||||
(150 BPS)
|
|
(100 BPS)
|
|
(50 BPS)
|
|
—%
|
|
50 BPS
|
|
100 BPS
|
|
150 BPS
|
|||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
U.S. Treasury and agencies
|
$
|
552,656
|
|
|
$
|
552,656
|
|
|
$
|
552,656
|
|
|
$
|
552,452
|
|
|
$
|
551,801
|
|
|
$
|
551,149
|
|
|
$
|
550,498
|
|
Government-sponsored enterprises
|
31,497
|
|
|
31,497
|
|
|
31,497
|
|
|
31,454
|
|
|
31,374
|
|
|
31,295
|
|
|
31,215
|
|
|||||||
Foreign government bonds
|
10,735
|
|
|
10,735
|
|
|
10,734
|
|
|
10,716
|
|
|
10,694
|
|
|
10,673
|
|
|
10,651
|
|
|||||||
Corporate notes and bonds
|
1,414,694
|
|
|
1,414,583
|
|
|
1,413,851
|
|
|
1,410,657
|
|
|
1,407,049
|
|
|
1,403,439
|
|
|
1,399,824
|
|
|||||||
Mortgage backed securities - residential
|
3,323
|
|
|
3,286
|
|
|
3,249
|
|
|
3,213
|
|
|
3,176
|
|
|
3,139
|
|
|
3,102
|
|
|||||||
Mortgage backed securities - commercial
|
23,890
|
|
|
23,889
|
|
|
23,868
|
|
|
23,804
|
|
|
23,740
|
|
|
23,676
|
|
|
23,613
|
|
|||||||
Total
|
$
|
2,036,795
|
|
|
$
|
2,036,646
|
|
|
$
|
2,035,855
|
|
|
$
|
2,032,296
|
|
|
$
|
2,027,834
|
|
|
$
|
2,023,371
|
|
|
$
|
2,018,903
|
|
|
Notional
Amount
|
|
Unrealized FX
Gain/(Loss)
|
|
Valuation of FX Contracts Given an X%
Increase (+)/Decrease(-) in Each
|
||||||||||||
June 28,
2020 |
= +/- (10%)
|
|
= +/- (15%)
|
||||||||||||||
|
(in millions)
|
||||||||||||||||
Forward contracts
|
|
|
|
|
|
|
|
||||||||||
Sell
|
Japanese yen
|
$
|
299.5
|
|
|
$
|
0.1
|
|
|
$
|
29.9
|
|
|
$
|
44.8
|
|
|
Buy
|
Euro
|
54.5
|
|
|
0.8
|
|
|
6.1
|
|
|
9.7
|
|
|||||
Buy
|
Korean won
|
20.5
|
|
|
(0.4
|
)
|
|
2.0
|
|
|
3.0
|
|
|||||
|
|
|
|
$
|
0.5
|
|
|
$
|
38.0
|
|
|
$
|
57.5
|
|
|
Notional
Amount
|
|
Unrealized FX
Gain/(Loss)
|
|
Valuation of FX Contracts Given an X%
Increase (+)/Decrease(-) in Each
|
||||||||||||
|
June 28,
2020 |
= +/- (10%)
|
|
= +/- (15%)
|
|||||||||||||
|
(in millions)
|
||||||||||||||||
Forward contracts, balance sheet hedge
|
|
|
|
|
|
|
|||||||||||
Sell
|
Korean won
|
$
|
50.7
|
|
|
$
|
0.1
|
|
|
$
|
5.1
|
|
|
$
|
7.6
|
|
|
Buy
|
Taiwan dollar
|
47.6
|
|
|
(0.1
|
)
|
|
4.7
|
|
|
7.0
|
|
|||||
Buy
|
Euro
|
36.1
|
|
|
—
|
|
|
10.6
|
|
|
12.0
|
|
|||||
Buy
|
Chinese renminbi
|
35.1
|
|
|
—
|
|
|
3.5
|
|
|
5.3
|
|
|||||
Buy
|
Japanese yen
|
22.5
|
|
|
—
|
|
|
2.2
|
|
|
3.4
|
|
|||||
Buy
|
Swiss francs
|
12.7
|
|
|
—
|
|
|
1.3
|
|
|
1.9
|
|
|||||
Buy
|
British pound
|
11.2
|
|
|
—
|
|
|
0.7
|
|
|
1.1
|
|
|||||
Buy
|
Singapore dollar
|
10.1
|
|
|
—
|
|
|
1.0
|
|
|
1.5
|
|
|||||
Buy
|
Indian rupee
|
7.8
|
|
|
—
|
|
|
0.8
|
|
|
1.2
|
|
|||||
Buy
|
Malaysian ringgit
|
5.6
|
|
|
—
|
|
|
0.6
|
|
|
0.8
|
|
|||||
|
|
|
|
$
|
—
|
|
|
$
|
30.5
|
|
|
$
|
41.8
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
Page
|
Consolidated Statements of Operations — Years Ended June 28, 2020, June 30, 2019, and June 24, 2018
|
|
Consolidated Statements of Comprehensive Income — Years Ended June 28, 2020, June 30, 2019, and June 24, 2018
|
|
Consolidated Balance Sheets — June 28, 2020, and June 30, 2019
|
|
Consolidated Statements of Cash Flows — Years Ended June 28, 2020, June 30, 2019, and June 24, 2018
|
|
Consolidated Statements of Stockholders’ Equity — Years Ended June 28, 2020, June 30, 2019, and June 24, 2018
|
|
Notes to Consolidated Financial Statements
|
|
Reports of Independent Registered Public Accounting Firm
|
|
Year Ended
|
||||||||||
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
|||||||
Revenue
|
$
|
10,044,736
|
|
|
$
|
9,653,559
|
|
|
$
|
11,076,998
|
|
Cost of goods sold
|
5,436,043
|
|
|
5,295,100
|
|
|
5,911,966
|
|
|||
Gross margin
|
4,608,693
|
|
|
4,358,459
|
|
|
5,165,032
|
|
|||
Research and development
|
1,252,412
|
|
|
1,191,320
|
|
|
1,189,514
|
|
|||
Selling, general, and administrative
|
682,479
|
|
|
702,407
|
|
|
762,219
|
|
|||
Total operating expenses
|
1,934,891
|
|
|
1,893,727
|
|
|
1,951,733
|
|
|||
Operating income
|
2,673,802
|
|
|
2,464,732
|
|
|
3,213,299
|
|
|||
Other expense, net
|
(98,824
|
)
|
|
(18,161
|
)
|
|
(61,510
|
)
|
|||
Income before income taxes
|
2,574,978
|
|
|
2,446,571
|
|
|
3,151,789
|
|
|||
Income tax expense
|
(323,225
|
)
|
|
(255,141
|
)
|
|
(771,108
|
)
|
|||
Net income
|
$
|
2,251,753
|
|
|
$
|
2,191,430
|
|
|
$
|
2,380,681
|
|
Net income per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
15.55
|
|
|
$
|
14.37
|
|
|
$
|
14.73
|
|
Diluted
|
$
|
15.10
|
|
|
$
|
13.70
|
|
|
$
|
13.17
|
|
Number of shares used in per share calculations:
|
|
|
|
|
|
||||||
Basic
|
144,814
|
|
|
152,478
|
|
|
161,643
|
|
|||
Diluted
|
149,090
|
|
|
159,915
|
|
|
180,782
|
|
|
Year Ended
|
||||||||||
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
|||||||
Net income
|
$
|
2,251,753
|
|
|
$
|
2,191,430
|
|
|
$
|
2,380,681
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
(6,441
|
)
|
|
(6,648
|
)
|
|
9,649
|
|
|||
Cash flow hedges:
|
|
|
|
|
|
||||||
Net unrealized (losses) gains during the period
|
(30,603
|
)
|
|
2,461
|
|
|
(6,960
|
)
|
|||
Net losses (gains) reclassified into earnings
|
2,137
|
|
|
(2,749
|
)
|
|
3,729
|
|
|||
|
(28,466
|
)
|
|
(288
|
)
|
|
(3,231
|
)
|
|||
Available-for-sale investments:
|
|
|
|
|
|
||||||
Net unrealized gains (losses) during the period
|
1,842
|
|
|
3,535
|
|
|
(45,382
|
)
|
|||
Net losses (gains) reclassified into earnings
|
935
|
|
|
(199
|
)
|
|
43,086
|
|
|||
|
2,777
|
|
|
3,336
|
|
|
(2,296
|
)
|
|||
Defined benefit plans, net change in unrealized component
|
1,949
|
|
|
(2,981
|
)
|
|
129
|
|
|||
Other comprehensive (loss) income, net of tax
|
(30,181
|
)
|
|
(6,581
|
)
|
|
4,251
|
|
|||
Comprehensive income
|
$
|
2,221,572
|
|
|
$
|
2,184,849
|
|
|
$
|
2,384,932
|
|
|
June 28,
2020 |
|
June 30,
2019 |
||||
ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
4,915,172
|
|
|
$
|
3,658,219
|
|
Investments
|
1,795,080
|
|
|
1,772,984
|
|
||
Accounts receivable, less allowance for doubtful accounts of $5,465 as of June 28, 2020 and $5,021 as of June 30, 2019
|
2,097,099
|
|
|
1,455,522
|
|
||
Inventories
|
1,900,024
|
|
|
1,540,140
|
|
||
Prepaid expenses and other current assets
|
146,160
|
|
|
133,544
|
|
||
Total current assets
|
10,853,535
|
|
|
8,560,409
|
|
||
Property and equipment, net
|
1,071,499
|
|
|
1,059,077
|
|
||
Restricted cash and investments
|
253,911
|
|
|
255,177
|
|
||
Goodwill
|
1,484,436
|
|
|
1,484,597
|
|
||
Intangible assets, net
|
168,532
|
|
|
216,950
|
|
||
Other assets
|
727,134
|
|
|
425,123
|
|
||
Total assets
|
$
|
14,559,047
|
|
|
$
|
12,001,333
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY:
|
|
|
|
||||
Trade accounts payable
|
$
|
592,387
|
|
|
$
|
376,561
|
|
Accrued expenses and other current liabilities
|
1,272,655
|
|
|
946,641
|
|
||
Deferred profit
|
457,523
|
|
|
381,317
|
|
||
Current portion of convertible notes and finance leases
|
839,877
|
|
|
667,131
|
|
||
Total current liabilities
|
3,162,442
|
|
|
2,371,650
|
|
||
Senior notes, convertible notes, and finance leases, less current portion
|
4,970,848
|
|
|
3,822,768
|
|
||
Income taxes payable
|
909,709
|
|
|
892,790
|
|
||
Other long-term liabilities
|
332,559
|
|
|
190,821
|
|
||
Total liabilities
|
9,375,558
|
|
|
7,278,029
|
|
||
Commitments and contingencies
|
|
|
|
||||
Temporary equity, convertible notes
|
10,995
|
|
|
49,439
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, at par value of $0.001 per share; authorized - 5,000 shares, none outstanding
|
—
|
|
|
—
|
|
||
Common stock, at par value of $0.001 per share; authorized 400,000 shares as of June 28, 2020 and June 30, 2019; issued and outstanding 145,331 shares as of June 28, 2020, and 144,433 shares as of June 30, 2019
|
145
|
|
|
144
|
|
||
Additional paid-in capital
|
6,695,858
|
|
|
6,409,405
|
|
||
Treasury stock, at cost, 145,432 shares as of June 28, 2020, and 140,573 shares as of June 30, 2019
|
(12,949,889
|
)
|
|
(11,602,573
|
)
|
||
Accumulated other comprehensive loss
|
(94,211
|
)
|
|
(64,030
|
)
|
||
Retained earnings
|
11,520,591
|
|
|
9,930,919
|
|
||
Total stockholders’ equity
|
5,172,494
|
|
|
4,673,865
|
|
||
Total liabilities and stockholders’ equity
|
$
|
14,559,047
|
|
|
$
|
12,001,333
|
|
|
Year Ended
|
||||||||||
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
2,251,753
|
|
|
$
|
2,191,430
|
|
|
$
|
2,380,681
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
268,525
|
|
|
309,281
|
|
|
326,395
|
|
|||
Deferred income taxes
|
(17,777
|
)
|
|
(4,980
|
)
|
|
3,046
|
|
|||
Equity-based compensation expense
|
189,197
|
|
|
187,234
|
|
|
172,216
|
|
|||
Impairment of investments
|
—
|
|
|
—
|
|
|
42,456
|
|
|||
Amortization of note discounts and issuance costs
|
5,940
|
|
|
7,343
|
|
|
14,428
|
|
|||
Other, net
|
688
|
|
|
(5,819
|
)
|
|
33,718
|
|
|||
Changes in operating asset and liability accounts:
|
|
|
|
|
|
||||||
Accounts receivable, net of allowance
|
(641,827
|
)
|
|
732,138
|
|
|
(501,628
|
)
|
|||
Inventories
|
(411,608
|
)
|
|
281,355
|
|
|
(701,008
|
)
|
|||
Prepaid expenses and other assets
|
(14,354
|
)
|
|
(17,864
|
)
|
|
(14,391
|
)
|
|||
Trade accounts payable
|
208,478
|
|
|
(131,472
|
)
|
|
35,655
|
|
|||
Deferred profit
|
76,207
|
|
|
(178,074
|
)
|
|
112,413
|
|
|||
Accrued expenses and other liabilities
|
211,229
|
|
|
(194,559
|
)
|
|
751,766
|
|
|||
Net cash provided by operating activities
|
2,126,451
|
|
|
3,176,013
|
|
|
2,655,747
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Capital expenditures and intangible assets
|
(203,239
|
)
|
|
(303,491
|
)
|
|
(273,469
|
)
|
|||
Business acquisition, net of cash acquired
|
—
|
|
|
—
|
|
|
(115,697
|
)
|
|||
Purchases of available-for-sale securities
|
(2,897,627
|
)
|
|
(2,930,049
|
)
|
|
(2,532,829
|
)
|
|||
Proceeds from maturities of available-for-sale securities
|
1,647,379
|
|
|
466,539
|
|
|
650,255
|
|
|||
Proceeds from sales of available-for-sale securities
|
1,235,248
|
|
|
1,137,302
|
|
|
5,035,460
|
|
|||
Other, net
|
(25,845
|
)
|
|
(7,355
|
)
|
|
(15,184
|
)
|
|||
Net cash (used for) provided by investing activities
|
(244,084
|
)
|
|
(1,637,054
|
)
|
|
2,748,536
|
|
|
Year Ended
|
||||||||||
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
|||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Net proceeds from issuance of long-term debt
|
$
|
1,974,651
|
|
|
$
|
2,476,720
|
|
|
$
|
—
|
|
Principal payments on long-term debt and capital lease obligations and payments for debt issuance costs
|
(667,537
|
)
|
|
(117,653
|
)
|
|
(755,694
|
)
|
|||
Net (repayment) proceeds from commercial paper
|
—
|
|
|
(361,754
|
)
|
|
359,604
|
|
|||
Proceeds from borrowings on revolving credit facility
|
1,250,000
|
|
|
—
|
|
|
750,000
|
|
|||
Repayment of borrowings on revolving credit facility
|
(1,250,000
|
)
|
|
—
|
|
|
(750,000
|
)
|
|||
Treasury stock purchases
|
(1,369,649
|
)
|
|
(3,780,611
|
)
|
|
(2,653,249
|
)
|
|||
Dividends paid
|
(656,838
|
)
|
|
(678,348
|
)
|
|
(307,609
|
)
|
|||
Reissuances of treasury stock related to employee stock purchase plan
|
85,439
|
|
|
77,961
|
|
|
75,624
|
|
|||
Proceeds from issuance of common stock
|
8,084
|
|
|
6,813
|
|
|
9,258
|
|
|||
Other, net
|
1,920
|
|
|
(13,208
|
)
|
|
9
|
|
|||
Net cash used for financing activities
|
(623,930
|
)
|
|
(2,390,080
|
)
|
|
(3,272,057
|
)
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(2,750
|
)
|
|
(4,041
|
)
|
|
2,593
|
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
1,255,687
|
|
|
(855,162
|
)
|
|
2,134,819
|
|
|||
Cash, cash equivalents and restricted cash at beginning of year
|
3,913,396
|
|
|
4,768,558
|
|
|
2,633,739
|
|
|||
Cash, cash equivalents and restricted cash at end of year
|
$
|
5,169,083
|
|
|
$
|
3,913,396
|
|
|
$
|
4,768,558
|
|
Schedule of non-cash transactions
|
|
|
|
|
|
||||||
Accrued payables for stock repurchases
|
$
|
82
|
|
|
$
|
29
|
|
|
$
|
116
|
|
Accrued payables for capital expenditures
|
37,812
|
|
|
23,185
|
|
|
24,001
|
|
|||
Dividends payable
|
167,129
|
|
|
158,868
|
|
|
174,372
|
|
|||
Transfers of finished goods inventory to property and equipment, net
|
51,694
|
|
|
54,533
|
|
|
57,886
|
|
|||
Supplemental disclosures:
|
|
|
|
|
|
||||||
Cash payments for interest
|
$
|
171,889
|
|
|
$
|
76,933
|
|
|
$
|
84,401
|
|
Cash payments for income taxes, net
|
222,909
|
|
|
300,268
|
|
|
142,800
|
|
|||
|
|
|
|
|
|
||||||
Reconciliation of cash, cash equivalents, and restricted cash
|
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||
Cash and cash equivalents
|
$
|
4,915,172
|
|
|
$
|
3,658,219
|
|
|
$
|
4,512,257
|
|
Restricted cash and investments
|
253,911
|
|
|
255,177
|
|
|
256,301
|
|
|||
Total cash, cash equivalents, and restricted cash
|
$
|
5,169,083
|
|
|
$
|
3,913,396
|
|
|
$
|
4,768,558
|
|
|
Common
Stock Shares |
|
Common
Stock |
|
Additional
Paid-in Capital |
|
Treasury
Stock |
|
Accumulated
Other Comprehensive Income(Loss) |
|
Retained
Earnings |
|
Total
|
|||||||||||||
Balance at June 25, 2017
|
161,723
|
|
|
$
|
162
|
|
|
$
|
5,845,485
|
|
|
$
|
(5,216,187
|
)
|
|
$
|
(61,700
|
)
|
|
$
|
6,249,691
|
|
|
$
|
6,817,451
|
|
Sale of common stock
|
1,934
|
|
|
2
|
|
|
9,256
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,258
|
|
||||||
Purchase of treasury stock
|
(14,786
|
)
|
|
(15
|
)
|
|
—
|
|
|
(2,653,350
|
)
|
|
—
|
|
|
—
|
|
|
(2,653,365
|
)
|
||||||
Reissuance of treasury stock
|
677
|
|
|
1
|
|
|
52,562
|
|
|
23,061
|
|
|
—
|
|
|
—
|
|
|
75,624
|
|
||||||
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
172,216
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
172,216
|
|
||||||
Effect of conversion of convertible notes
|
10,199
|
|
|
10
|
|
|
(26,776
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,766
|
)
|
||||||
Effect of bond hedge, cash in lieu of shares
|
(2,855
|
)
|
|
(3
|
)
|
|
13
|
|
|
|
|
|
|
|
|
10
|
|
|||||||||
Reclassification from temporary to permanent equity
|
—
|
|
|
—
|
|
|
91,669
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
91,669
|
|
||||||
Adoption of ASU 2016-09
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40,065
|
|
|
40,065
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,380,681
|
|
|
2,380,681
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,251
|
|
|
—
|
|
|
4,251
|
|
||||||
Cash dividends declared ($2.55 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(409,243
|
)
|
|
(409,243
|
)
|
||||||
Balance at June 24, 2018
|
156,892
|
|
|
157
|
|
|
6,144,425
|
|
|
(7,846,476
|
)
|
|
(57,449
|
)
|
|
8,261,194
|
|
|
6,501,851
|
|
||||||
Sale of common stock
|
1,090
|
|
|
1
|
|
|
6,812
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,813
|
|
||||||
Purchase of treasury stock
|
(21,059
|
)
|
|
(21
|
)
|
|
—
|
|
|
(3,780,503
|
)
|
|
—
|
|
|
—
|
|
|
(3,780,524
|
)
|
||||||
Reissuance of treasury stock
|
622
|
|
|
—
|
|
|
53,555
|
|
|
24,406
|
|
|
—
|
|
|
—
|
|
|
77,961
|
|
||||||
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
187,234
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
187,234
|
|
||||||
Effect of conversion of convertible notes
|
2,783
|
|
|
3
|
|
|
(11,361
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,358
|
)
|
||||||
Exercise of warrants
|
4,105
|
|
|
4
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
||||||
Reclassification from temporary to permanent equity
|
—
|
|
|
—
|
|
|
28,752
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,752
|
|
||||||
Adoption of ASU 2014-09
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
139,355
|
|
|
139,355
|
|
||||||
Adoption of ASU 2016-16
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(443
|
)
|
|
(443
|
)
|
||||||
Adoption of ASU 2018-02
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,227
|
)
|
|
2,227
|
|
|
—
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,191,430
|
|
|
2,191,430
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,354
|
)
|
|
—
|
|
|
(4,354
|
)
|
||||||
Cash dividends declared ($4.40 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(662,844
|
)
|
|
(662,844
|
)
|
||||||
Balance at June 30, 2019
|
144,433
|
|
|
144
|
|
|
6,409,405
|
|
|
(11,602,573
|
)
|
|
(64,030
|
)
|
|
9,930,919
|
|
|
4,673,865
|
|
|
Common
Stock Shares |
|
Common
Stock |
|
Additional
Paid-in Capital |
|
Treasury
Stock |
|
Accumulated
Other Comprehensive Income(Loss) |
|
Retained
Earnings |
|
Total
|
|||||||||||||
Sale of common stock
|
1,288
|
|
|
$
|
1
|
|
|
$
|
8,083
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,084
|
|
Purchase of treasury stock
|
(5,371
|
)
|
|
(5
|
)
|
|
—
|
|
|
(1,369,697
|
)
|
|
—
|
|
|
—
|
|
|
(1,369,702
|
)
|
||||||
Reissuance of treasury stock
|
513
|
|
|
1
|
|
|
63,057
|
|
|
22,381
|
|
|
—
|
|
|
—
|
|
|
85,439
|
|
||||||
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
189,197
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
189,197
|
|
||||||
Effect of conversion of convertible notes
|
4,468
|
|
|
4
|
|
|
(12,328
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,324
|
)
|
||||||
Reclassification from temporary to permanent equity
|
—
|
|
|
—
|
|
|
38,444
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,444
|
|
||||||
Adoption of ASU 2016-02
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,018
|
|
|
3,018
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,251,753
|
|
|
2,251,753
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30,181
|
)
|
|
—
|
|
|
(30,181
|
)
|
||||||
Cash dividends declared ($4.60 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(665,099
|
)
|
|
(665,099
|
)
|
||||||
Balance at June 28, 2020
|
145,331
|
|
|
$
|
145
|
|
|
$
|
6,695,858
|
|
|
$
|
(12,949,889
|
)
|
|
$
|
(94,211
|
)
|
|
$
|
11,520,591
|
|
|
$
|
5,172,494
|
|
|
Less than 1 Year
|
|
1-3 Years
|
|
More than 3 Years
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Deferred revenue
|
$
|
463,759
|
|
|
$
|
73,668
|
|
(1)
|
$
|
—
|
|
(1)
|
$
|
537,427
|
|
(1)
|
This amount is reported in Deferred profit on the Company's Consolidated Balance Sheets as the customers can demand the liability to be performed at any time.
|
|
Year Ended
|
||||||
|
June 28,
2020 |
|
June 30,
2019 |
||||
|
(in thousands)
|
||||||
Systems Revenue
|
$
|
6,625,130
|
|
|
$
|
6,451,104
|
|
Customer support-related revenue and other
|
3,419,606
|
|
|
3,202,455
|
|
||
|
$
|
10,044,736
|
|
|
$
|
9,653,559
|
|
|
Year Ended
|
||||
|
June 28,
2020 |
|
June 30,
2019 |
||
Memory
|
58
|
%
|
|
70
|
%
|
Foundry
|
31
|
%
|
|
20
|
%
|
Logic/integrated device manufacturing
|
11
|
%
|
|
10
|
%
|
|
Year Ended
|
||||||||||
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
|||||||
|
(in thousands)
|
||||||||||
Equity-based compensation expense
|
$
|
189,197
|
|
|
$
|
187,234
|
|
|
$
|
172,216
|
|
Income tax benefit recognized related to equity-based compensation
|
$
|
36,135
|
|
|
$
|
47,396
|
|
|
$
|
87,505
|
|
Income tax benefit realized from the exercise and vesting of options and RSUs
|
$
|
67,060
|
|
|
$
|
49,242
|
|
|
$
|
90,297
|
|
|
Service-based RSUs Outstanding
|
|
Market-based RSUs Outstanding
|
||||||||||
Number of
Shares |
|
Weighted-Average
Grant Date Fair Value |
|
Number of
Shares |
|
Weighted-Average
Grant Date Fair Value |
|||||||
June 25, 2017
|
2,687,606
|
|
|
$
|
92.01
|
|
|
862,455
|
|
|
$
|
83.83
|
|
Granted
|
964,391
|
|
|
183.97
|
|
|
285,866
|
|
|
125.56
|
|
||
Vested
|
(1,362,369
|
)
|
|
87.80
|
|
|
(407,024
|
)
|
|
76.88
|
|
||
Forfeited or canceled
|
(96,540
|
)
|
|
108.67
|
|
|
(47,571
|
)
|
|
91.36
|
|
||
June 24, 2018
|
2,193,088
|
|
|
$
|
134.34
|
|
|
693,726
|
|
|
$
|
104.59
|
|
Granted
|
893,622
|
|
|
161.64
|
|
|
163,529
|
|
|
148.50
|
|
||
Vested
|
(1,135,284
|
)
|
|
115.23
|
|
|
(301,622
|
)
|
|
70.58
|
|
||
Forfeited or canceled
|
(154,541
|
)
|
|
141.38
|
|
|
(120,859
|
)
|
|
104.73
|
|
||
June 30, 2019
|
1,796,885
|
|
|
$
|
159.36
|
|
|
434,774
|
|
|
$
|
144.57
|
|
Granted
|
616,353
|
|
|
280.08
|
|
|
171,526
|
|
|
216.04
|
|
||
Vested
|
(912,409
|
)
|
|
151.53
|
|
|
(257,787
|
)
|
|
111.75
|
|
||
Forfeited or canceled
|
(94,265
|
)
|
|
176.30
|
|
|
(33,403
|
)
|
|
160.83
|
|
||
June 28, 2020
|
1,406,564
|
|
|
$
|
216.34
|
|
|
315,110
|
|
|
$
|
208.60
|
|
|
Year Ended
|
||||||||||
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
|||||||
Assumptions:
|
|
|
|
|
|
||||||
Expected volatility
|
35.81
|
%
|
|
32.65
|
%
|
|
34.07
|
%
|
|||
Risk-free interest rate
|
0.85
|
%
|
|
2.52
|
%
|
|
2.35
|
%
|
|||
Expected term (years)
|
2.92
|
|
|
2.92
|
|
|
2.92
|
|
|||
Dividend yield
|
1.53
|
%
|
|
2.49
|
%
|
|
1.05
|
%
|
|||
Resulting grant date fair value:
|
$
|
320.69
|
|
|
$
|
165.78
|
|
|
$
|
170.15
|
|
|
Options Outstanding
|
|||||
Number of
Shares |
|
Weighted-Average
Exercise Price |
||||
June 25, 2017
|
594,059
|
|
|
$
|
66.69
|
|
Granted
|
63,980
|
|
|
190.07
|
|
|
Exercised
|
(166,481
|
)
|
|
55.62
|
|
|
Forfeited or expired
|
(8,630
|
)
|
|
84.44
|
|
|
June 24, 2018
|
482,928
|
|
|
$
|
86.53
|
|
Granted
|
181,450
|
|
|
164.54
|
|
|
Exercised
|
(110,427
|
)
|
|
61.69
|
|
|
Forfeited or expired
|
(59,068
|
)
|
|
126.05
|
|
|
June 30, 2019
|
494,883
|
|
|
$
|
115.96
|
|
Granted
|
34,236
|
|
|
300.33
|
|
|
Exercised
|
(118,334
|
)
|
|
68.31
|
|
|
Forfeited or expired
|
(4,948
|
)
|
|
179.39
|
|
|
June 28, 2020
|
405,837
|
|
|
$
|
144.63
|
|
|
Year Ended
|
|||||||
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
||||
Expected volatility
|
33.89
|
%
|
|
32.23
|
%
|
|
34.66
|
%
|
Risk-free interest rate
|
0.88
|
%
|
|
2.62
|
%
|
|
2.53
|
%
|
Expected term (years)
|
4.63
|
|
|
4.70
|
|
|
4.74
|
|
Dividend yield
|
1.53
|
%
|
|
2.70
|
%
|
|
1.05
|
%
|
|
Year Ended
|
||||||||||
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
|||||||
|
(in thousands)
|
||||||||||
Intrinsic value - options outstanding
|
$
|
64,077
|
|
|
$
|
35,674
|
|
|
$
|
43,563
|
|
Intrinsic value - options exercisable
|
$
|
46,698
|
|
|
$
|
30,139
|
|
|
$
|
34,661
|
|
Intrinsic value - options exercised
|
$
|
21,137
|
|
|
$
|
12,750
|
|
|
$
|
23,925
|
|
|
Year Ended
|
||||||||||
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
|||||||
|
(in thousands)
|
||||||||||
Interest income
|
$
|
85,433
|
|
|
$
|
98,771
|
|
|
$
|
85,813
|
|
Interest expense
|
(177,440
|
)
|
|
(117,263
|
)
|
|
(97,387
|
)
|
|||
Gains on deferred compensation plan related assets, net
|
5,999
|
|
|
10,464
|
|
|
14,692
|
|
|||
Loss on impairment of investments
|
—
|
|
|
—
|
|
|
(42,456
|
)
|
|||
Foreign exchange (losses) gains, net
|
(3,317
|
)
|
|
826
|
|
|
(3,382
|
)
|
|||
Other, net
|
(9,499
|
)
|
|
(10,959
|
)
|
|
(18,790
|
)
|
|||
|
$
|
(98,824
|
)
|
|
$
|
(18,161
|
)
|
|
$
|
(61,510
|
)
|
|
Year Ended
|
||||||||||
|
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||
|
(in thousands)
|
||||||||||
United States
|
$
|
44,739
|
|
|
$
|
(59,876
|
)
|
|
$
|
128,190
|
|
Foreign
|
2,530,239
|
|
|
2,506,447
|
|
|
3,023,599
|
|
|||
|
$
|
2,574,978
|
|
|
$
|
2,446,571
|
|
|
$
|
3,151,789
|
|
|
Year Ended
|
||||||||||
|
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||
|
(in thousands)
|
||||||||||
Federal:
|
|
|
|
|
|
||||||
Current
|
$
|
216,513
|
|
|
$
|
143,845
|
|
|
$
|
630,148
|
|
Deferred
|
(18,458
|
)
|
|
(10,722
|
)
|
|
12,871
|
|
|||
|
198,055
|
|
|
133,123
|
|
|
643,019
|
|
|||
State:
|
|
|
|
|
|
||||||
Current
|
4,724
|
|
|
5,994
|
|
|
5,348
|
|
|||
Deferred
|
6,524
|
|
|
4,944
|
|
|
(3,273
|
)
|
|||
|
11,248
|
|
|
10,938
|
|
|
2,075
|
|
|||
Foreign:
|
|
|
|
|
|
||||||
Current
|
119,766
|
|
|
110,283
|
|
|
132,566
|
|
|||
Deferred
|
(5,844
|
)
|
|
797
|
|
|
(6,552
|
)
|
|||
|
113,922
|
|
|
111,080
|
|
|
126,014
|
|
|||
Total provision for income taxes
|
$
|
323,225
|
|
|
$
|
255,141
|
|
|
$
|
771,108
|
|
|
June 28,
2020 |
|
June 30,
2019 |
||||
|
(in thousands)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Tax carryforwards
|
$
|
249,874
|
|
|
$
|
231,390
|
|
Allowances and reserves
|
119,974
|
|
|
97,671
|
|
||
Equity-based compensation
|
7,167
|
|
|
14,661
|
|
||
Inventory valuation differences
|
26,069
|
|
|
18,516
|
|
||
Prepaid cost sharing
|
—
|
|
|
74,139
|
|
||
Outside basis differences of foreign subsidiaries
|
105,159
|
|
|
16,260
|
|
||
Operating lease liabilities
|
40,157
|
|
|
—
|
|
||
Other
|
26,361
|
|
|
17,972
|
|
||
Gross deferred tax assets
|
574,761
|
|
|
470,609
|
|
||
Valuation allowance
|
(244,973
|
)
|
|
(226,928
|
)
|
||
Net deferred tax assets
|
329,788
|
|
|
243,681
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Intangible assets
|
(6,442
|
)
|
|
(9,883
|
)
|
||
Convertible debt
|
(24,530
|
)
|
|
(46,993
|
)
|
||
Capital assets
|
(105,508
|
)
|
|
(83,298
|
)
|
||
Amortization of goodwill
|
(12,256
|
)
|
|
(11,299
|
)
|
||
Right-of-use assets
|
(40,157
|
)
|
|
—
|
|
||
Other
|
(7,509
|
)
|
|
(8,752
|
)
|
||
Gross deferred tax liabilities
|
(196,402
|
)
|
|
(160,225
|
)
|
||
Net deferred tax assets
|
$
|
133,386
|
|
|
$
|
83,456
|
|
|
Year Ended
|
||||||||||
|
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||
|
(in thousands)
|
||||||||||
Income tax expense computed at federal statutory rate
|
$
|
540,745
|
|
|
$
|
513,780
|
|
|
$
|
891,011
|
|
State income taxes, net of federal tax benefit
|
(28,046
|
)
|
|
(17,565
|
)
|
|
(50,585
|
)
|
|||
Foreign income taxed at different rates
|
(146,023
|
)
|
|
(260,344
|
)
|
|
(939,808
|
)
|
|||
Settlements and reductions in uncertain tax positions
|
(12,854
|
)
|
|
(31,291
|
)
|
|
(33,367
|
)
|
|||
Tax credits
|
(88,762
|
)
|
|
(71,779
|
)
|
|
(69,301
|
)
|
|||
State valuation allowance, net of federal tax benefit
|
30,923
|
|
|
26,742
|
|
|
57,302
|
|
|||
Equity-based compensation
|
(23,248
|
)
|
|
(7,566
|
)
|
|
(35,875
|
)
|
|||
Other permanent differences and miscellaneous items
|
50,490
|
|
|
39,251
|
|
|
43,214
|
|
|||
U.S. tax reform impacts
|
—
|
|
|
63,913
|
|
|
908,517
|
|
|||
|
$
|
323,225
|
|
|
$
|
255,141
|
|
|
$
|
771,108
|
|
|
|
||
|
(in thousands)
|
||
Balance as of June 25, 2017
|
$
|
339,447
|
|
Settlements and effective settlements with tax authorities
|
(693
|
)
|
|
Lapse of statute of limitations
|
(88,837
|
)
|
|
Increases in balances related to tax positions taken during prior periods
|
2,044
|
|
|
Decreases in balances related to tax positions taken during prior periods
|
(1,320
|
)
|
|
Increases in balances related to tax positions taken during current period
|
54,772
|
|
|
Balance as of June 24, 2018
|
305,413
|
|
|
Settlements and effective settlements with tax authorities
|
(3,705
|
)
|
|
Lapse of statute of limitations
|
(28,176
|
)
|
|
Increases in balances related to tax positions taken during prior periods
|
78,927
|
|
|
Decreases in balances related to tax positions taken during prior periods
|
(1,577
|
)
|
|
Increases in balances related to tax positions taken during current period
|
69,890
|
|
|
Balance as of June 30, 2019
|
420,772
|
|
|
Settlements and effective settlements with tax authorities
|
(1,836
|
)
|
|
Lapse of statute of limitations
|
(8,026
|
)
|
|
Increases in balances related to tax positions taken during prior periods
|
3,206
|
|
|
Decreases in balances related to tax positions taken during prior periods
|
(3,989
|
)
|
|
Increases in balances related to tax positions taken during current period
|
66,568
|
|
|
Balance as of June 28, 2020
|
$
|
476,695
|
|
|
Year Ended
|
|
||||||||||
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
|
|||||||
|
(in thousands, except per share data)
|
|
||||||||||
Numerator:
|
|
|
|
|
|
|
||||||
Net income
|
$
|
2,251,753
|
|
|
$
|
2,191,430
|
|
|
$
|
2,380,681
|
|
|
Denominator:
|
|
|
|
|
|
|
||||||
Basic average shares outstanding
|
144,814
|
|
|
152,478
|
|
|
161,643
|
|
|
|||
Effect of potential dilutive securities:
|
|
|
|
|
|
|
||||||
Employee stock plans
|
1,236
|
|
|
1,323
|
|
|
2,312
|
|
|
|||
Convertible notes
|
3,040
|
|
|
5,610
|
|
|
12,258
|
|
(1)
|
|||
Warrants
|
—
|
|
|
504
|
|
|
4,569
|
|
|
|||
Diluted average shares outstanding
|
149,090
|
|
|
159,915
|
|
|
180,782
|
|
|
|||
Net income per share - basic
|
$
|
15.55
|
|
|
$
|
14.37
|
|
|
$
|
14.73
|
|
|
Net income per share - diluted
|
$
|
15.10
|
|
|
$
|
13.70
|
|
|
$
|
13.17
|
|
|
(1)
|
Diluted shares outstanding do not include any effect resulting from note hedges associated with the Company’s 2018 Notes as their impact would have been anti-dilutive.
|
|
Year Ended
|
|||||||
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
||||
|
(in thousands)
|
|||||||
Options and RSUs
|
206
|
|
|
578
|
|
|
34
|
|
|
June 28, 2020
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
(Reported Within)
|
|||||||||||||||||||||||
Cost
|
|
Unrealized
Gain |
|
Unrealized
(Loss) |
|
Fair Value
|
|
Cash and
Cash Equivalents |
|
Investments
|
|
Restricted
Cash & Investments |
|
Other
Assets |
|||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||
Cash
|
$
|
977,862
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
977,862
|
|
|
$
|
973,978
|
|
|
$
|
—
|
|
|
$
|
3,884
|
|
|
$
|
—
|
|
Time deposit
|
2,244,655
|
|
|
—
|
|
|
—
|
|
|
2,244,655
|
|
|
1,994,628
|
|
|
—
|
|
|
250,027
|
|
|
—
|
|
||||||||
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
1,709,350
|
|
|
—
|
|
|
—
|
|
|
1,709,350
|
|
|
1,709,350
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
U.S. Treasury and agencies
|
552,088
|
|
|
373
|
|
|
(9
|
)
|
|
552,452
|
|
|
76,992
|
|
|
475,460
|
|
|
—
|
|
|
—
|
|
||||||||
Mutual funds
|
68,784
|
|
|
4,571
|
|
|
(928
|
)
|
|
72,427
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
72,427
|
|
||||||||
Level 1 total
|
2,330,222
|
|
|
4,944
|
|
|
(937
|
)
|
|
2,334,229
|
|
|
1,786,342
|
|
|
475,460
|
|
|
—
|
|
|
72,427
|
|
||||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Government-sponsored enterprises
|
31,442
|
|
|
12
|
|
|
—
|
|
|
31,454
|
|
|
25,999
|
|
|
5,455
|
|
|
—
|
|
|
—
|
|
||||||||
Foreign government bonds
|
10,693
|
|
|
28
|
|
|
(5
|
)
|
|
10,716
|
|
|
2,540
|
|
|
8,176
|
|
|
—
|
|
|
—
|
|
||||||||
Corporate notes and bonds
|
1,405,615
|
|
|
5,344
|
|
|
(302
|
)
|
|
1,410,657
|
|
|
131,685
|
|
|
1,278,972
|
|
|
—
|
|
|
—
|
|
||||||||
Mortgage backed securities - residential
|
3,142
|
|
|
71
|
|
|
—
|
|
|
3,213
|
|
|
—
|
|
|
3,213
|
|
|
—
|
|
|
—
|
|
||||||||
Mortgage backed securities - commercial
|
23,660
|
|
|
144
|
|
|
—
|
|
|
23,804
|
|
|
—
|
|
|
23,804
|
|
|
—
|
|
|
—
|
|
||||||||
Level 2 total
|
1,474,552
|
|
|
5,599
|
|
|
(307
|
)
|
|
1,479,844
|
|
|
160,224
|
|
|
1,319,620
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
$
|
7,027,291
|
|
|
$
|
10,543
|
|
|
$
|
(1,244
|
)
|
|
$
|
7,036,590
|
|
|
$
|
4,915,172
|
|
|
$
|
1,795,080
|
|
|
$
|
253,911
|
|
|
$
|
72,427
|
|
|
June 30, 2019
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
(Reported Within)
|
|||||||||||||||||||||||
Cost
|
|
Unrealized
Gain |
|
Unrealized
(Loss) |
|
Fair Value
|
|
Cash and
Cash Equivalents |
|
Investments
|
|
Restricted
Cash & Investments |
|
Other
Assets |
|||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||
Cash
|
$
|
467,460
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
467,460
|
|
|
$
|
462,310
|
|
|
$
|
—
|
|
|
$
|
5,150
|
|
|
$
|
—
|
|
Time deposit
|
1,563,686
|
|
|
—
|
|
|
—
|
|
|
1,563,686
|
|
|
1,313,659
|
|
|
—
|
|
|
250,027
|
|
|
—
|
|
||||||||
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
1,644,659
|
|
|
—
|
|
|
—
|
|
|
1,644,659
|
|
|
1,644,659
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
U.S. Treasury and agencies
|
465,655
|
|
|
283
|
|
|
(24
|
)
|
|
465,914
|
|
|
86,981
|
|
|
378,933
|
|
|
—
|
|
|
—
|
|
||||||||
Mutual funds
|
76,961
|
|
|
1,063
|
|
|
(283
|
)
|
|
77,741
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
77,741
|
|
||||||||
Level 1 total
|
2,187,275
|
|
|
1,346
|
|
|
(307
|
)
|
|
2,188,314
|
|
|
1,731,640
|
|
|
378,933
|
|
|
—
|
|
|
77,741
|
|
||||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Government-sponsored enterprises
|
16,005
|
|
|
5
|
|
|
(41
|
)
|
|
15,969
|
|
|
—
|
|
|
15,969
|
|
|
—
|
|
|
—
|
|
||||||||
Foreign government bonds
|
24,408
|
|
|
35
|
|
|
—
|
|
|
24,443
|
|
|
—
|
|
|
24,443
|
|
|
—
|
|
|
—
|
|
||||||||
Corporate notes and bonds
|
1,466,167
|
|
|
2,310
|
|
|
(99
|
)
|
|
1,468,378
|
|
|
150,610
|
|
|
1,317,768
|
|
|
—
|
|
|
—
|
|
||||||||
Mortgage backed securities - residential
|
6,148
|
|
|
—
|
|
|
(4
|
)
|
|
6,144
|
|
|
—
|
|
|
6,144
|
|
|
—
|
|
|
—
|
|
||||||||
Mortgage backed securities - commercial
|
29,587
|
|
|
140
|
|
|
—
|
|
|
29,727
|
|
|
—
|
|
|
29,727
|
|
|
—
|
|
|
—
|
|
||||||||
Level 2 total
|
1,542,315
|
|
|
2,490
|
|
|
(144
|
)
|
|
1,544,661
|
|
|
150,610
|
|
|
1,394,051
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
$
|
5,760,736
|
|
|
$
|
3,836
|
|
|
$
|
(451
|
)
|
|
$
|
5,764,121
|
|
|
$
|
3,658,219
|
|
|
$
|
1,772,984
|
|
|
$
|
255,177
|
|
|
$
|
77,741
|
|
|
June 28, 2020
|
||||||||||||||||||||||
Unrealized Losses
Less than 12 Months |
|
Unrealized Losses
12 Months or Greater |
|
Total
|
|||||||||||||||||||
Fair Value
|
|
Gross
Unrealized Loss |
|
Fair Value
|
|
Gross
Unrealized Loss |
|
Fair Value
|
|
Gross
Unrealized Loss |
|||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
U.S. Treasury and agencies
|
$
|
189,437
|
|
|
$
|
(9
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
189,437
|
|
|
$
|
(9
|
)
|
Mutual funds
|
2,623
|
|
|
(289
|
)
|
|
5,011
|
|
|
(639
|
)
|
|
7,634
|
|
|
(928
|
)
|
||||||
Foreign government bonds
|
9,056
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
9,056
|
|
|
(5
|
)
|
||||||
Corporate notes and bonds
|
332,924
|
|
|
(302
|
)
|
|
—
|
|
|
—
|
|
|
332,924
|
|
|
(302
|
)
|
||||||
|
$
|
534,040
|
|
|
$
|
(605
|
)
|
|
$
|
5,011
|
|
|
$
|
(639
|
)
|
|
$
|
539,051
|
|
|
$
|
(1,244
|
)
|
|
Cost
|
|
Estimated
Fair Value |
||||
|
(in thousands)
|
||||||
Due in one year or less
|
$
|
5,527,654
|
|
|
$
|
5,529,241
|
|
Due after one year through five years
|
433,973
|
|
|
437,872
|
|
||
Due in more than five years
|
19,018
|
|
|
19,188
|
|
||
|
$
|
5,980,645
|
|
|
$
|
5,986,301
|
|
|
Notional Value
|
||||||||||||||
|
Derivatives Designated as
Hedging Instruments: |
|
Derivatives Not Designated as
Hedging Instruments: |
||||||||||||
|
|
||||||||||||||
|
(in thousands)
|
||||||||||||||
Foreign currency forward contracts
|
|
|
|
|
|
|
|
||||||||
|
Buy Contracts
|
|
Sell Contracts
|
|
Buy Contracts
|
|
Sell Contracts
|
||||||||
Japanese yen
|
$
|
—
|
|
|
$
|
299,450
|
|
|
$
|
22,475
|
|
|
$
|
—
|
|
Euro
|
54,512
|
|
|
—
|
|
|
36,113
|
|
|
—
|
|
||||
Korean won
|
20,492
|
|
|
—
|
|
|
—
|
|
|
50,715
|
|
||||
Taiwan dollar
|
—
|
|
|
—
|
|
|
47,612
|
|
|
—
|
|
||||
Chinese renminbi
|
—
|
|
|
—
|
|
|
35,071
|
|
|
—
|
|
||||
Swiss franc
|
—
|
|
|
—
|
|
|
12,672
|
|
|
—
|
|
||||
British pound sterling
|
—
|
|
|
—
|
|
|
11,191
|
|
|
—
|
|
||||
Singapore dollar
|
—
|
|
|
—
|
|
|
10,062
|
|
|
—
|
|
||||
Indian rupee
|
—
|
|
|
—
|
|
|
7,772
|
|
|
—
|
|
||||
Malaysian ringgit
|
—
|
|
|
—
|
|
|
5,612
|
|
|
—
|
|
||||
|
$
|
75,004
|
|
|
$
|
299,450
|
|
|
$
|
188,580
|
|
|
$
|
50,715
|
|
|
June 28, 2020
|
|
June 30, 2019
|
||||||||||||||||||||
Fair Value of Derivative Instruments (Level 2)
|
|
Fair Value of Derivative Instruments (Level 2)
|
|||||||||||||||||||||
Derivative Assets
|
|
Derivative Liabilities
|
|
Derivative Assets
|
|
Derivative Liabilities
|
|||||||||||||||||
Balance
Sheet Location |
|
Fair
Value |
|
Balance
Sheet Location |
|
Fair
Value |
|
Balance
Sheet Location |
|
Fair
Value |
|
Balance
Sheet Location |
|
Fair
Value |
|||||||||
|
(in thousands)
|
||||||||||||||||||||||
Derivatives designated as hedging instruments:
|
|||||||||||||||||||||||
Foreign exchange contracts
|
Prepaid
expense and other assets |
|
$
|
1,862
|
|
|
Accrued expenses and other current liabilities
|
|
$
|
1,405
|
|
|
Prepaid
expense and other assets |
|
$
|
119
|
|
|
Accrued expenses and other current liabilities
|
|
$
|
2,756
|
|
Interest rate contracts, short-term
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Accrued expenses and other current liabilities
|
|
5,149
|
|
||||
Interest rate contracts, long-term
|
|
|
—
|
|
|
|
|
—
|
|
|
Other assets
|
|
1,537
|
|
|
|
|
—
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|||||||||||||||
Foreign exchange contracts
|
Prepaid
expense and other assets |
|
155
|
|
|
Accrued expenses and other current liabilities
|
|
70
|
|
|
Prepaid
expense and other assets |
|
1,249
|
|
|
Accrued expenses and other current liabilities
|
|
748
|
|
||||
Total derivatives
|
|
|
$
|
2,017
|
|
|
|
|
$
|
1,475
|
|
|
|
|
$
|
2,905
|
|
|
|
|
$
|
8,653
|
|
|
|
Year Ended June 28, 2020
|
|
Year Ended June 30, 2019
|
||||||||||||
|
Location of
Gain (Loss) Recognized in or Reclassified into Income |
Gain (Loss)
Recognized in AOCI |
|
Gain (Loss)
Reclassified from AOCI into Income |
|
Gain (Loss)
Recognized in AOCI |
|
Gain (Loss) Reclassified
from AOCI into Income |
||||||||
|
|
|||||||||||||||
Derivatives in Cash Flow Hedging Relationships
|
(in thousands)
|
|||||||||||||||
Foreign exchange contracts
|
Revenue
|
$
|
4,095
|
|
|
$
|
2,418
|
|
|
$
|
8,143
|
|
|
$
|
10,821
|
|
Foreign exchange contracts
|
Cost of goods sold
|
(2,104
|
)
|
|
(3,101
|
)
|
|
(3,801
|
)
|
|
(5,949
|
)
|
||||
Foreign exchange contracts
|
SG&A
|
(1,158
|
)
|
|
(1,501
|
)
|
|
(1,618
|
)
|
|
(2,321
|
)
|
||||
Interest rate contracts
|
Other expense, net
|
(40,610
|
)
|
|
(700
|
)
|
|
—
|
|
|
(134
|
)
|
||||
|
|
$
|
(39,777
|
)
|
|
$
|
(2,884
|
)
|
|
$
|
2,724
|
|
|
$
|
2,417
|
|
|
Year Ended
|
|||||||
June 28, 2020
|
|
June 30, 2019
|
||||||
Derivatives Not Designated as Hedging Instruments:
|
Location of (Loss) Gain
Recognized in Income |
Loss
Recognized in Income |
|
Gain
Recognized in Income |
||||
|
|
(in thousands)
|
||||||
Foreign exchange contracts
|
Other income
|
$
|
(5,971
|
)
|
|
$
|
4,124
|
|
|
June 28,
2020 |
|
June 30,
2019 |
||||
|
(in thousands)
|
||||||
Raw materials
|
$
|
1,161,961
|
|
|
$
|
994,738
|
|
Work-in-process
|
251,199
|
|
|
174,219
|
|
||
Finished goods
|
486,864
|
|
|
371,183
|
|
||
|
$
|
1,900,024
|
|
|
$
|
1,540,140
|
|
|
June 28,
2020 |
|
June 30,
2019 |
||||
|
(in thousands)
|
||||||
Manufacturing and engineering equipment
|
$
|
1,154,668
|
|
|
$
|
1,039,454
|
|
Buildings and improvements
|
660,865
|
|
|
664,061
|
|
||
Computer and computer-related equipment
|
178,193
|
|
|
190,974
|
|
||
Office equipment, furniture and fixtures
|
83,386
|
|
|
82,115
|
|
||
Land
|
58,805
|
|
|
46,155
|
|
||
|
2,135,917
|
|
|
2,022,759
|
|
||
Less: accumulated depreciation and amortization
|
(1,082,827
|
)
|
|
(963,682
|
)
|
||
|
$
|
1,053,090
|
|
|
$
|
1,059,077
|
|
|
June 28, 2020
|
|
June 30, 2019
|
||||||||||||||||||||
|
Gross
|
|
Accumulated
Amortization |
|
Net
|
|
Gross
|
|
Accumulated
Amortization |
|
Net
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Customer relationships
|
$
|
630,137
|
|
|
$
|
(532,550
|
)
|
|
$
|
97,587
|
|
|
$
|
630,165
|
|
|
$
|
(483,204
|
)
|
|
$
|
146,961
|
|
Existing technology
|
668,992
|
|
|
(654,382
|
)
|
|
14,610
|
|
|
669,399
|
|
|
(647,837
|
)
|
|
21,562
|
|
||||||
Patents and other intangible assets
|
98,342
|
|
|
(42,007
|
)
|
|
56,335
|
|
|
126,235
|
|
|
(77,808
|
)
|
|
48,427
|
|
||||||
Total intangible assets
|
$
|
1,397,471
|
|
|
$
|
(1,228,939
|
)
|
|
$
|
168,532
|
|
|
$
|
1,425,799
|
|
|
$
|
(1,208,849
|
)
|
|
$
|
216,950
|
|
Fiscal Year
|
Amount
|
||
|
(in thousands)
|
||
2021
|
$
|
65,949
|
|
2022
|
61,687
|
|
|
2023
|
16,156
|
|
|
2024
|
8,561
|
|
|
2025
|
3,868
|
|
|
Thereafter
|
16
|
|
|
|
$
|
156,237
|
|
|
June 28,
2020 |
|
June 30,
2019 |
||||
|
(in thousands)
|
||||||
Accrued compensation
|
$
|
402,401
|
|
|
$
|
336,090
|
|
Warranty reserves
|
117,839
|
|
|
127,932
|
|
||
Income and other taxes payable
|
215,652
|
|
|
49,926
|
|
||
Dividend payable
|
167,129
|
|
|
158,868
|
|
||
Other
|
369,634
|
|
|
273,825
|
|
||
|
$
|
1,272,655
|
|
|
$
|
946,641
|
|
|
June 28, 2020
|
|
June 30, 2019
|
|
||||||||||
|
Amount
(in thousands)
|
|
Effective Interest Rate
|
|
Amount
(in thousands)
|
|
Effective Interest Rate
|
|
||||||
Fixed-rate 2.75% Senior Notes Due March 15, 2020 (“2020 Notes”)
|
$
|
—
|
|
|
—
|
|
|
$
|
500,000
|
|
|
2.88
|
%
|
|
Fixed-rate 2.80% Senior Notes Due June 15, 2021 (“2021 Notes”)
|
800,000
|
|
|
2.95
|
%
|
|
800,000
|
|
|
2.95
|
%
|
|
||
Fixed-rate 3.80% Senior Notes Due March 15, 2025 (“2025 Notes”)
|
500,000
|
|
|
3.87
|
%
|
|
500,000
|
|
|
3.87
|
%
|
|
||
Fixed-rate 3.75% Senior Notes Due March 15, 2026 ("2026 Notes")
|
750,000
|
|
|
3.86
|
%
|
|
750,000
|
|
|
3.86
|
%
|
|
||
Fixed-rate 4.00% Senior Notes Due March 15, 2029 ("2029 Notes")
|
1,000,000
|
|
|
4.09
|
%
|
|
1,000,000
|
|
|
4.09
|
%
|
|
||
Fixed-rate 1.90% Senior Note Due June 15, 2030 ("2030 Notes")
|
750,000
|
|
|
2.01
|
%
|
|
—
|
|
|
—
|
|
|
||
Fixed-rate 2.625% Convertible Notes Due May 15, 2041 (“2041 Notes”)
|
48,460
|
|
(1)
|
4.28
|
%
|
|
212,349
|
|
(1)
|
4.28
|
%
|
|
||
Fixed-rate 4.875% Senior Notes Due March 15, 2049 ("2049 Notes")
|
750,000
|
|
|
4.93
|
%
|
|
750,000
|
|
|
4.93
|
%
|
|
||
Fixed-rate 2.875% Senior Note Due June 15, 2050 ("2050 Notes")
|
750,000
|
|
|
2.93
|
%
|
|
—
|
|
|
—
|
|
|
||
Fixed-rate 3.125% Senior Note Due June 15, 2060 ("2060 Notes")
|
500,000
|
|
|
3.18
|
%
|
|
—
|
|
|
—
|
|
|
||
Total debt outstanding, at par
|
5,848,460
|
|
|
|
|
4,512,349
|
|
|
|
|
||||
Unamortized discount
|
(53,086
|
)
|
|
|
|
(73,191
|
)
|
|
|
|
||||
Fair value adjustment - interest rate contracts
|
8,405
|
|
(2)
|
|
|
(3,612
|
)
|
|
|
|
||||
Unamortized bond issuance costs
|
(8,301
|
)
|
|
|
|
(5,535
|
)
|
|
|
|
||||
Total debt outstanding, at carrying value
|
$
|
5,795,478
|
|
|
|
|
$
|
4,430,011
|
|
|
|
|
||
Reported as:
|
|
|
|
|
|
|
|
|
||||||
Current portion of long-term debt
|
$
|
836,107
|
|
|
|
|
$
|
662,308
|
|
|
|
|
||
Long-term debt
|
4,959,371
|
|
|
|
|
3,767,703
|
|
|
|
|
||||
Total debt outstanding, at carrying value
|
$
|
5,795,478
|
|
|
|
|
$
|
4,430,011
|
|
|
|
|
(1)
|
As of the report date, these notes were convertible at the option of the bondholder. This is a result of the following condition being met: the market value of the Company’s Common Stock was greater than 130% of the convertible notes conversion price for 20 or more of the 30 consecutive trading days preceding the quarter-end. As a result, the 2041 Notes were classified in current liabilities and a portion of the equity component associated with the convertible notes, representing the unamortized discount, was classified in temporary equity on the Company’s Consolidated Balance Sheets. Upon closure of the conversion period, the notes not converted will be reclassified back into noncurrent liabilities and the temporary equity will be reclassified into permanent equity.
|
(2)
|
This amount represents a cumulative fair market gain for discontinued hedging relationships, net of an immaterial amount of amortization for the year ended June 28, 2020.
|
(1)
|
As noted above, the conversion period for the 2041 Notes is open as of June 28, 2020. As there is the potential for conversion at the option of the holder, the principal balance of the 2041 Notes has been included in the one-year payment period.
|
|
2041 Notes
|
||||||
|
June 28,
2020 |
|
June 30,
2019 |
||||
|
(in thousands, except years, percentages, conversion rate, and conversion price)
|
||||||
Carrying amount of permanent equity component, net of tax
|
$
|
161,467
|
|
|
$
|
160,604
|
|
Carrying amount of temporary equity component, net of tax
|
$
|
10,995
|
|
|
$
|
49,439
|
|
Remaining amortization period (years)
|
20.9
|
|
|
21.9
|
|
||
Fair Value of Notes (Level 2)
|
$
|
462,857
|
|
|
|
||
Conversion rate (shares of common stock per $1,000 principal amount of notes)
|
31.5206
|
|
|
|
|||
Conversion price (per share of common stock)
|
$
|
31.73
|
|
|
|
||
If-converted value in excess of par value
|
$
|
413,636
|
|
|
|
||
Estimated share dilution using average quarterly stock price of $270.53 per share
|
1,348
|
|
|
|
|
Remaining Amortization period
|
|
Fair Value of Notes (Level 2)
|
||
|
(years)
|
|
(in thousands)
|
||
2021 Notes
|
1.0
|
|
$
|
815,560
|
|
2025 Notes
|
4.7
|
|
$
|
565,985
|
|
2026 Notes
|
5.7
|
|
$
|
859,560
|
|
2029 Notes
|
8.7
|
|
$
|
1,185,430
|
|
2030 Notes
|
10.0
|
|
$
|
763,793
|
|
2049 Notes
|
28.7
|
|
$
|
1,045,035
|
|
2050 Notes
|
30.0
|
|
$
|
773,603
|
|
2060 Notes
|
40.0
|
|
$
|
527,825
|
|
|
Year Ended
|
||||||||||
|
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||
|
(in thousands)
|
||||||||||
Contractual interest coupon
|
$
|
169,483
|
|
|
$
|
100,712
|
|
|
$
|
77,091
|
|
Amortization of interest discount
|
4,280
|
|
|
3,937
|
|
|
12,225
|
|
|||
Amortization of issuance costs
|
1,632
|
|
|
1,426
|
|
|
2,034
|
|
|||
Effect of interest rate contracts, net
|
1,037
|
|
|
4,086
|
|
|
3
|
|
|||
Total interest cost recognized
|
$
|
176,432
|
|
|
$
|
110,161
|
|
|
$
|
91,353
|
|
Financing lease cost:
|
|
||
Amortization of right-of-use assets
|
$
|
3,613
|
|
Interest on lease liabilities
|
506
|
|
|
Total finance lease cost
|
$
|
4,119
|
|
|
|
||
Operating lease cost
|
$
|
46,101
|
|
Variable lease cost
|
91,851
|
|
Operating leases
|
|
||
Other assets
|
$
|
174,583
|
|
|
|
||
Accrued expenses and other current liabilities
|
$
|
49,480
|
|
Other long-term liabilities
|
123,889
|
|
|
Total operating lease liabilities
|
$
|
173,369
|
|
|
|
||
Finance Leases
|
|
||
Property and Equipment, net
|
$
|
18,409
|
|
|
|
||
Current portion of long-term debt and lease liabilities
|
$
|
3,770
|
|
Long-term debt and lease liabilities
|
11,477
|
|
|
Total finance lease liabilities
|
$
|
15,247
|
|
|
June 28, 2020
|
|||
|
Weighted-Average Remaining Lease Term
|
|
Weighted-Average Discount Rate
|
|
|
(in years)
|
|
|
|
Operating leases
|
9.0
|
|
2.57
|
%
|
Finance leases
|
4.1
|
|
2.79
|
%
|
|
Operating Leases
|
|
Finance Leases
|
||||
|
(in thousands)
|
||||||
2021
|
$
|
50,611
|
|
|
$
|
4,170
|
|
2022
|
31,178
|
|
|
6,709
|
|
||
2023
|
22,446
|
|
|
1,541
|
|
||
2024
|
18,279
|
|
|
1,080
|
|
||
2025
|
14,761
|
|
|
617
|
|
||
Thereafter
|
49,660
|
|
|
2,304
|
|
||
Total lease payments
|
$
|
186,935
|
|
|
$
|
16,421
|
|
Less imputed interest
|
(13,566
|
)
|
|
(1,174
|
)
|
||
Total
|
$
|
173,369
|
|
|
$
|
15,247
|
|
Payments Due by Fiscal Year:
|
Purchase
Obligations |
||
|
(in thousands)
|
||
2021
|
$
|
541,524
|
|
2022
|
49,520
|
|
|
2023
|
49,520
|
|
|
2024
|
33,211
|
|
|
2025
|
33,212
|
|
|
Thereafter
|
958
|
|
|
Total
|
$
|
707,945
|
|
|
Year Ended
|
||||||
June 28,
2020 |
|
June 30,
2019 |
|||||
|
(in thousands)
|
||||||
Balance at beginning of period
|
$
|
127,932
|
|
|
$
|
192,480
|
|
Warranties issued during the period
|
151,508
|
|
|
249,737
|
|
||
Settlements made during the period
|
(131,177
|
)
|
|
(307,079
|
)
|
||
Changes in liability for pre-existing warranties
|
(19,066
|
)
|
|
(7,206
|
)
|
||
Balance at end of period
|
$
|
129,197
|
|
|
$
|
127,932
|
|
Period
|
Total Number
of Shares Repurchased |
|
Total
Cost of Repurchase |
|
Average
Price Paid Per Share(1) |
|
Amount Available
Under Repurchase Program |
|||||||
|
(in thousands, except per share data)
|
|||||||||||||
Available balance as of June 30, 2019
|
|
|
|
|
|
|
$
|
3,033,500
|
|
|||||
Quarter ended September 29, 2019
|
383
|
|
|
$
|
75,196
|
|
|
$
|
196.34
|
|
|
$
|
2,958,304
|
|
Quarter ended December 29, 2019
|
3,224
|
|
(2)
|
$
|
1,000,475
|
|
|
$
|
—
|
|
|
$
|
1,957,829
|
|
Quarter ended March 29, 2020
|
1,239
|
|
(2)
|
$
|
146,397
|
|
|
$
|
274.37
|
|
|
$
|
1,811,432
|
|
Quarter ended June 28, 2020
|
145
|
|
|
$
|
38,005
|
|
|
$
|
261.34
|
|
|
$
|
1,773,427
|
|
(1)
|
Average price paid per share excludes effect of accelerated share repurchases; see additional disclosure below regarding the Company’s accelerated share repurchase activity during the fiscal year.
|
(2)
|
Includes shares received at final settlement of accelerated share repurchase agreements; see additional disclosures below regarding the Company’s accelerated share repurchase activity during the fiscal year.
|
|
Accumulated
Foreign Currency Translation Adjustment |
|
Accumulated
Unrealized Gain or Loss on Cash Flow Hedges |
|
Accumulated
Unrealized Holding Gain or Loss on Available-For- Sale Investments |
|
Accumulated
Unrealized Components of Defined Benefit Plans |
|
Total
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Balance as of June 30, 2019
|
$
|
(39,370
|
)
|
|
$
|
(4,330
|
)
|
|
$
|
2,146
|
|
|
$
|
(22,476
|
)
|
|
$
|
(64,030
|
)
|
Other comprehensive (loss) income before reclassifications
|
(6,428
|
)
|
|
(30,603
|
)
|
|
1,842
|
|
|
1,949
|
|
|
(33,240
|
)
|
|||||
Losses (gains) reclassified from accumulated other comprehensive income (loss) to net income
|
(13
|
)
|
(1)
|
2,137
|
|
(2)
|
935
|
|
(1)
|
—
|
|
|
3,059
|
|
|||||
Net current-period other comprehensive income (loss)
|
(6,441
|
)
|
|
(28,466
|
)
|
|
2,777
|
|
|
1,949
|
|
|
(30,181
|
)
|
|||||
Balance as of June 28, 2020
|
$
|
(45,811
|
)
|
|
$
|
(32,796
|
)
|
|
$
|
4,923
|
|
|
$
|
(20,527
|
)
|
|
$
|
(94,211
|
)
|
(1)
|
Amount of after-tax gain reclassified from accumulated other comprehensive income into net income located in other expense, net.
|
(2)
|
Amount of after-tax gain reclassified from accumulated other comprehensive income into net income located in revenue: $2.1 million gain; cost of goods sold: $2.6 million loss; selling, general, and administrative expenses: $1.1 million loss; and other income and expense: $0.5 million loss.
|
|
Year Ended
|
||||||||||
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
|||||||
Revenue:
|
(in thousands)
|
||||||||||
China
|
$
|
3,083,916
|
|
|
$
|
2,161,440
|
|
|
$
|
1,784,436
|
|
Korea
|
2,391,257
|
|
|
2,205,348
|
|
|
3,832,798
|
|
|||
Taiwan
|
1,906,223
|
|
|
1,596,261
|
|
|
1,397,978
|
|
|||
Japan
|
954,743
|
|
|
1,969,869
|
|
|
1,882,799
|
|
|||
United States
|
812,482
|
|
|
748,601
|
|
|
820,438
|
|
|||
Southeast Asia
|
587,638
|
|
|
615,813
|
|
|
781,360
|
|
|||
Europe
|
308,477
|
|
|
356,227
|
|
|
577,189
|
|
|||
Total revenue
|
$
|
10,044,736
|
|
|
$
|
9,653,559
|
|
|
$
|
11,076,998
|
|
|
June 28,
2020 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||
Long-lived assets:
|
(in thousands)
|
||||||||||
United States
|
$
|
930,970
|
|
|
$
|
933,054
|
|
|
$
|
784,469
|
|
Europe
|
74,103
|
|
|
72,928
|
|
|
73,336
|
|
|||
Korea
|
40,318
|
|
|
28,200
|
|
|
24,312
|
|
|||
Southeast Asia
|
8,643
|
|
|
5,542
|
|
|
3,715
|
|
|||
China
|
6,261
|
|
|
6,844
|
|
|
5,466
|
|
|||
Japan
|
5,793
|
|
|
5,750
|
|
|
3,327
|
|
|||
Taiwan
|
5,411
|
|
|
6,759
|
|
|
7,922
|
|
|||
|
$
|
1,071,499
|
|
|
$
|
1,059,077
|
|
|
$
|
902,547
|
|
Description of the Matter
|
The Company’s inventories totaled $1.9 billion as of June 28, 2020, representing 13% of total assets. As explained in Note 2 to the consolidated financial statements, the Company assesses the valuation of all inventories including manufacturing raw materials, work-in-process, finished goods, and spare parts in each reporting period. Obsolete inventory or inventory in excess of management’s estimated usage requirement is written down to its estimated net realizable value if less than cost.
Auditing management’s estimates for excess and obsolete inventory involved subjective auditor judgment because management’s assessment of whether a write down is required and the measurement of any excess of cost over net realizable value is judgmental and considers a number of qualitative factors that are affected by market and economic conditions outside the Company’s control.
|
How We Addressed the Matter in Our Audit
|
We evaluated and tested the Company’s processes and the design and operating effectiveness of internal controls addressing the identified audit risks. This included controls over management’s assessment of inventory valuation, including the development of forecasted usage of inventories and consideration of how factors outside of the Company’s control might affect management’s judgment related to the valuation of excess and obsolete inventory.
Our audit procedures included, among others, evaluating the significant assumptions (e.g., forecasts related to the Company’s future manufacturing schedules, customer demand, technological and/or market obsolescence, and possible alternative uses) and the underlying data used in management’s excess and obsolete inventory valuation assessment. We evaluated inventory levels compared to forecasted demand, historical sales and specific product considerations. We also assessed the historical accuracy of management’s estimates.
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
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
|
(a)
|
The following documents are filed as part of this Annual Report on Form 10-K.
|
|
Page
|
1. Index to Financial Statements
|
|
Consolidated Statements of Operations — Years Ended June 28, 2020, June 30, 2019, and June 24, 2018
|
|
Consolidated Statements of Comprehensive Income — Years Ended June 28, 2020, June 30, 2019, and June 24, 2018
|
|
Consolidated Balance Sheets — June 28, 2020, and June 30, 2019
|
|
Consolidated Statements of Cash Flows — Years Ended June 28, 2020, June 30, 2019, and June 24, 2018
|
|
Consolidated Statements of Stockholders’ Equity — Years Ended June 28, 2020, June 30, 2019, and June 24, 2018
|
|
Notes to Consolidated Financial Statements
|
|
Reports of Independent Registered Public Accounting Firm
|
|
|
|
2. Index to Financial Statement Schedules
|
|
|
|
Schedules have been omitted since they are not applicable, not required, not material, or the information is included elsewhere herein.
|
|
|
|
Exhibit
|
|
Description
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
4.4
|
|
|
4.5
|
|
|
4.6
|
|
|
4.7
|
|
|
4.8
|
|
|
10.1*
|
|
Form of Indemnification Agreement which is incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended April 3, 1988 (SEC File No. 000-12933).
|
10.2*
|
|
|
10.3*
|
|
|
10.4*
|
|
|
10.5*
|
|
|
10.6*
|
|
|
10.7*
|
|
|
10.8*
|
|
Exhibit
|
|
Description
|
10.9*
|
|
|
10.10*
|
|
|
10.11*
|
|
|
10.12*
|
|
|
10.13*
|
|
|
10.14*
|
|
|
10.15*
|
|
|
10.16
|
|
|
10.17*
|
|
|
10.18*
|
|
|
10.19*
|
|
|
10.20*
|
|
|
10.21*
|
|
|
10.22*
|
|
|
10.23*
|
|
|
10.24
|
|
|
10.25
|
|
|
10.26*
|
|
|
10.27*
|
|
Exhibit
|
|
Description
|
10.28*
|
|
|
10.29
|
|
|
10.30
|
|
|
10.31*
|
|
|
10.32*
|
|
|
10.33*
|
|
|
10.34*
|
|
|
10.35
|
|
|
10.36*
|
|
|
10.37*
|
|
|
10.38*
|
|
|
10.39*
|
|
|
10.40*
|
|
|
10.41
|
|
|
10.42*
|
|
|
10.43*
|
|
|
10.44*
|
|
|
10.45*
|
|
|
10.46*
|
|
|
10.47*
|
|
Exhibit
|
|
Description
|
10.48*
|
|
|
10.49*
|
|
|
21
|
|
|
23
|
|
|
24
|
|
Power of Attorney (See Signature page)
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
32.2
|
|
|
101.INS
|
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
*
|
Indicates management contract or compensatory plan or arrangement.
|
Date:
|
August 18, 2020
|
|
LAM RESEARCH CORPORATION
(Registrant)
|
|
|||
By:
|
/s/ Timothy M. Archer
|
||
Timothy M. Archer
|
|||
President and Chief Executive Officer
|
Signatures
|
|
Title
|
|
Date
|
Principal Executive Officer
|
|
|
|
|
|
|
|
||
/s/ Timothy M. Archer
|
|
President, Chief Executive Officer and Director
|
|
August 18, 2020
|
Timothy M. Archer
|
|
|
|
|
|
|
|
||
Principal Financial Officer and Principal Accounting Officer
|
||||
|
|
|
||
/s/ Douglas R. Bettinger
|
|
Executive Vice President, Chief Financial Officer, and Chief Accounting Officer
|
|
August 18, 2020
|
Douglas R. Bettinger
|
|
|
|
Other Directors
|
|
|
|
|
|
Signatures
|
Title
|
Date
|
Signatures
|
Title
|
Date
|
|
|
|
|
|
|
/s/ Abhijit Y. Talwalkar
|
Chairman
|
August 18, 2020
|
/s/ Catherine P. Lego
|
Director
|
August 18, 2020
|
Abhijit Y. Talwalkar
|
|
|
Catherine P. Lego
|
|
|
|
|
|
|
|
|
/s/ Sohail U. Ahmed
|
Director
|
August 18, 2020
|
/s/ Bethany J. Mayer
|
Director
|
August 18, 2020
|
Sohail U. Ahmed
|
|
|
Bethany J. Mayer
|
|
|
|
|
|
|
|
|
/s/ Eric K. Brandt
|
Director
|
August 18, 2020
|
/s/ Lih Shyng Tsai
|
Director
|
August 18, 2020
|
Eric K. Brandt
|
|
|
Lih Shyng (Rick L.) Tsai
|
|
|
|
|
|
|
|
|
/s/ Michael R. Cannon
|
Director
|
August 18, 2020
|
/s/ Leslie F. Varon
|
Director
|
August 18, 2020
|
Michael R. Cannon
|
|
|
Leslie F. Varon
|
|
|
|
|
|
|
|
|
/s/ Youssef A. El-Mansy
|
Director
|
August 18, 2020
|
|
|
|
Youssef A. El-Mansy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
the transaction is approved by the board of directors before the date the interested stockholder attained that status;
|
•
|
upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; or
|
•
|
on or after the date the business combination is approved by the board and authorized at a meeting of stockholders by at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.
|
•
|
any merger or consolidation involving the corporation and the interested stockholder;
|
•
|
any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder;
|
•
|
subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;
|
•
|
any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or
|
•
|
the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.
|
SUBSIDIARY (as of August 18, 2020)
|
STATE OR OTHER JURISDICTION OF OPERATION
|
Lam Research AG
|
Austria
|
Lam Research Management GmbH
|
Austria
|
Lam Research Belgium BVBA
|
Belgium
|
Novellus Systems, Inc.
|
California, United States
|
Novellus Systems International, LLC
|
California, United States
|
Lam Research International Holdings Ltd.
|
Cayman Islands
|
Lam Research International Holdings II Ltd.
|
Cayman Islands
|
Lam Research Capital Ltd.
|
Cayman Islands
|
Lam Research (Shanghai) Co., Ltd.
|
China
|
Lam Research Service Co., Ltd.
|
China
|
Coventor, Inc.
|
Delaware, United States
|
Lam Research Capital, LLC
|
Delaware, United States
|
Lam Research International Holding Company
|
Delaware, United States
|
Silfex, Inc.
|
Delaware, United States
|
SpeedFam-IPEC International Services, LLC
|
Delaware, United States
|
Coventor Sarl
|
France
|
Lam Research SAS
|
France
|
Lam Research GmbH
|
Germany
|
Lam Research (H.K.) Limited
|
Hong Kong
|
Lam Research Illinois IAG, Inc
|
Illinois, United States
|
Lam Research (India) Private Limited
|
India
|
Lam Research (Ireland) Limited
|
Ireland
|
Lam Research (Israel) Ltd.
|
Israel
|
Lam Research Services Ltd.
|
Israel
|
Lam Research S.r.l.
|
Italy
|
Lam Research Co., Ltd.
|
Japan
|
Lam Research Luxembourg S.à.r.l.
|
Luxembourg
|
Lam Research Malaysia Sdn. Bhd.
|
Malaysia
|
Lam Research International Sdn Bhd.
|
Malaysia
|
Lam Research B.V.
|
Netherlands
|
Lam Research International B.V.
|
Netherlands
|
Coventor Korea Limited **
|
Republic of Korea
|
Lam Research Korea Limited
|
Republic of Korea
|
Lam Research Korea LLC YH
|
Republic of Korea
|
Lam Research Korea Technology, LLC YH
|
Republic of Korea
|
Lam Research Manufacturing Korea, LLC
|
Republic of Korea
|
Lam Research Singapore Pte Ltd.
|
Singapore
|
Lam Research Holding GmbH
|
Switzerland
|
Lam Research International Sàrl
|
Switzerland
|
Lam Research Co., Ltd.
|
Taiwan
|
SUBSIDIARY (as of August 18, 2020)
|
STATE OR OTHER JURISDICTION OF OPERATION
|
Lam Research (H.K.) Limited, Taiwan Branch
|
Taiwan
|
Lam Research Ltd.
|
United Kingdom
|
Metryx, Ltd.
|
United Kingdom
|
1.
|
Registration Statement (Form S-4 No. 333-30545) of Lam Research Corporation and in the related Prospectus;
|
2.
|
Registration Statement (Form S-4 No. 333-179267) of Lam Research Corporation and in the related Prospectus;
|
3.
|
Registration Statements (Form S-8 No. 333-66833, 333-127936, 333-156335, and 333-231138) pertaining to the 1999 Employee Stock Purchase Plan;
|
4.
|
Registration Statements (Form S-8 No. 333-84638, 333-185641, and 333-233961) pertaining to the Savings Plus Plan, Lam Research 401(k);
|
5.
|
Registration Statement (Form S-8 No. 333-138545) pertaining to the 2007 Stock Incentive Plan, as amended;
|
6.
|
Registration Statement (Form S-8 No. 333-181878) pertaining to the Novellus Systems, Inc. 2011 Stock Incentive Plan, Novellus Systems, Inc. Retirement Plan, and Lam Research Corporation 1999 Employee Stock Purchase Plan, as amended;
|
7.
|
Registration Statement (Form S-8 No. 333-207844) pertaining to the 2015 Stock Incentive Plan of Lam Research Corporation; and
|
8.
|
Registration Statement (Form S-3 No. 333-229762) of Lam Research Corporation and in the related Prospectus;
|
1.
|
I have reviewed this Annual Report on Form 10-K of Lam Research 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 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 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 18, 2020
|
/s/ Timothy M. Archer
|
|
Timothy M. Archer
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of Lam Research 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 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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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The registrant’s other certifying officer 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):
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a)
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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
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b)
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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.
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August 18, 2020
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/s/ Douglas R. Bettinger
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Douglas R. Bettinger
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Executive Vice President, Chief Financial Officer and Chief Accounting Officer
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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August 18, 2020
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/s/ Timothy M. Archer
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Timothy M. Archer
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President and Chief Executive Officer
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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August 18, 2020
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/s/ Douglas R. Bettinger
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Douglas R. Bettinger
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Executive Vice President, Chief Financial Officer and Chief Accounting Officer
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