x
|
Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended March 31, 2013
|
o
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _________ to __________
|
Delaware
|
|
86-0629024
|
(State or Other Jurisdiction of Incorporation or Organization)
|
|
(IRS Employer Identification No.)
|
Title of Each Class
|
|
Name of Each Exchange on Which Registered
|
Common Stock, $0.001 Par Value Per Share
|
|
NASDAQ® Global Market
|
Large accelerated filer
|
x
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
Smaller reporting company
|
o
|
Documents Incorporated by Reference
|
||
Document
|
|
Part of Form 10-K
|
Proxy Statement for the 2013 Annual Meeting of Stockholders
|
|
III
|
|
|
Page
|
|
|
|
PART I
|
||
|
|
|
|
|
|
PART II
|
||
|
|
|
PART III
|
||
|
|
|
|
|
|
PART IV
|
||
|
|
|
|
|
|
|
•
|
our annual report on Form 10-K
|
•
|
our quarterly reports on Form 10-Q
|
•
|
our current reports on Form 8-K
|
•
|
our proxy statement
|
•
|
any amendments to the above-listed reports filed or furnished pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934
|
•
|
differentiate their products
|
•
|
replace less efficient electromechanical control devices
|
•
|
reduce the number of components in their system
|
•
|
add product functionality
|
•
|
reduce the system level energy consumption
|
•
|
decrease time to market for their products
|
•
|
significantly reduce product cost
|
•
|
automotive comfort, safety and entertainment applications
|
•
|
remote control devices
|
•
|
handheld tools
|
•
|
home appliances
|
•
|
portable computers
|
•
|
robotics
|
•
|
accessories
|
•
|
cordless and cellular telephones
|
•
|
motor controls
|
•
|
security systems
|
•
|
educational and entertainment devices
|
•
|
consumer electronics
|
•
|
power supplies
|
•
|
touch screens
|
•
|
medical products
|
•
|
general purpose and specialized microcontrollers
|
•
|
development tools
|
•
|
analog, interface and mixed signal products
|
•
|
memory products
|
•
|
technology licensing
|
•
|
Tempe, Arizona (Fab 2)
|
•
|
Gresham, Oregon (Fab 4)
|
•
|
Chandler, Arizona (wafer probe)
|
•
|
Bangkok, Thailand (wafer probe, assembly and test)
|
|
|
Year Ended March 31,
|
|||||||||||||||||||
|
|
2013
|
|
%
|
|
2012
|
|
%
|
|
2011
|
|
%
|
|||||||||
Americas
|
|
$
|
313,574
|
|
|
19.8
|
|
|
$
|
290,392
|
|
|
21.0
|
|
|
$
|
310,735
|
|
|
20.9
|
|
Europe
|
|
344,398
|
|
|
21.8
|
|
|
319,881
|
|
|
23.1
|
|
|
334,911
|
|
|
22.5
|
|
|||
Asia
|
|
923,651
|
|
|
58.4
|
|
|
772,903
|
|
|
55.9
|
|
|
841,559
|
|
|
56.6
|
|
|||
Total Sales
|
|
$
|
1,581,623
|
|
|
100.0
|
|
|
$
|
1,383,176
|
|
|
100.0
|
|
|
$
|
1,487,205
|
|
|
100.0
|
|
•
|
performance
|
•
|
analog, digital and mixed signal functionality
|
•
|
memory density
|
•
|
low power consumption
|
•
|
reliability
|
•
|
packaging alternatives
|
•
|
ease of use
|
•
|
functionality of application development systems
|
•
|
dependable delivery, quality and availability
|
•
|
technical and innovative service and support
|
•
|
time to market
|
•
|
price
|
Name
|
|
Age
|
|
Position
|
Steve Sanghi
|
|
57
|
|
Chairman of the Board, President and Chief Executive Officer
|
Ganesh Moorthy
|
|
53
|
|
Executive Vice President and Chief Operating Officer
|
J. Eric Bjornholt
|
|
42
|
|
Vice President, Chief Financial Officer
|
Stephen V. Drehobl
|
|
51
|
|
Vice President, MCU8 and Technology Development Division
|
David S. Lambert
|
|
61
|
|
Vice President, Fab Operations
|
Mitchell R. Little
|
|
61
|
|
Vice President, Worldwide Sales and Applications
|
Richard J. Simoncic
|
|
49
|
|
Vice President, Analog and Interface Products Division
|
•
|
general economic, industry or political conditions in the U.S. or internationally;
|
•
|
changes in demand or market acceptance of our products and products of our customers, and market fluctuations in the industries into which such products are sold;
|
•
|
changes in utilization of our manufacturing capacity and fluctuations in manufacturing yields;
|
•
|
the mix of inventory we hold and our ability to satisfy orders from our inventory;
|
•
|
levels of inventories held by our customers;
|
•
|
risk of excess and obsolete inventories;
|
•
|
our ability to realize the expected benefits of our acquisition of SMSC;
|
•
|
competitive developments including pricing pressures;
|
•
|
unauthorized copying of our products resulting in pricing pressure and loss of sales;
|
•
|
availability of raw materials and equipment;
|
•
|
the level of orders that are received and can be shipped in a quarter;
|
•
|
the level of sell-through of our products through distribution;
|
•
|
fluctuations in the mix of products;
|
•
|
our ability to secure sufficient wafer foundry, assembly and testing capacity;
|
•
|
changes or fluctuations in customer order patterns and seasonality;
|
•
|
announcements of significant acquisitions;
|
•
|
changes in tax regulations and policies in the U.S. and other countries in which we do business;
|
•
|
disruptions in our business or our customers' businesses due to terrorist activity, armed conflict, war, worldwide oil prices and supply, public health concerns, natural disasters or disruptions in the transportation system;
|
•
|
constrained availability from other electronic suppliers impacting our customers' ability to ship their products, which in turn may adversely impact our sales to those customers;
|
•
|
costs and outcomes of any current or future tax audits or any litigation involving intellectual property, customers or other issues;
|
•
|
fluctuations in commodity prices; and
|
•
|
property damage or other losses, whether or not covered by insurance.
|
•
|
the quality, performance, reliability, features, ease of use, pricing and diversity of our products;
|
•
|
our success in designing and manufacturing new products including those implementing new technologies;
|
•
|
the rate at which customers incorporate our products into their own applications;
|
•
|
the rate at which the markets that we serve redesign and change their own products;
|
•
|
changes in demand in the markets that we serve and the overall rate of growth or contraction of such markets, including but not limited to the automotive, personal computing and consumer electronics markets;
|
•
|
product introductions by our competitors;
|
•
|
the number, nature and success of our competitors in a given market;
|
•
|
our ability to obtain adequate foundry capacity and supplies of raw materials and other supplies at acceptable prices;
|
•
|
our ability to protect our products and processes by effective utilization of intellectual property rights;
|
•
|
our ability to remain price competitive against companies that have copied our proprietary product lines, especially in countries where intellectual property rights protection is difficult to achieve and maintain;
|
•
|
our ability to address the needs of our customers; and
|
•
|
general market and economic conditions.
|
•
|
proper new product selection;
|
•
|
timely completion and introduction of new product designs;
|
•
|
procurement of licenses for intellectual property rights from third parties under commercially reasonable terms;
|
•
|
timely filing and protection of intellectual property rights for new product designs;
|
•
|
availability of development and support tools and collateral literature that make complex new products easy for engineers to understand and use; and
|
•
|
market acceptance of our customers' end products.
|
•
|
proper identification of licensee requirements;
|
•
|
timely development and introduction of new or enhanced technology;
|
•
|
our ability to protect our intellectual property rights for our licensed technology;
|
•
|
our ability to limit our liability and indemnification obligations to licensees;
|
•
|
availability of sufficient development and support services to assist licensees in their design and manufacture of products integrating our technology;
|
•
|
availability of foundry licensees with sufficient capacity to support OEM production; and
|
•
|
market acceptance of our customers' end products.
|
•
|
costs related to writing off the value of our inventory of nonconforming products;
|
•
|
recalling nonconforming products;
|
•
|
providing support services, product replacements, or modifications to products and the defense of such claims;
|
•
|
diversion of resources from other projects;
|
•
|
lost revenue or a delay in the recognition of revenue due to cancellation of orders and unpaid receivables;
|
•
|
customer imposed fines or penalties for failure to meet contractual requirements; and
|
•
|
a requirement to pay damages.
|
•
|
political, social and economic instability;
|
•
|
economic uncertainty in the worldwide markets served by us;
|
•
|
public health conditions;
|
•
|
trade restrictions and changes in tariffs;
|
•
|
import and export license requirements and restrictions;
|
•
|
changes in rules and laws related to taxes, environmental, health and safety, technical standards and consumer protection in various jurisdictions;
|
•
|
difficulties in staffing and managing international operations;
|
•
|
employment regulations;
|
•
|
disruptions in international transport or delivery;
|
•
|
difficulties in collecting receivables and longer payment cycles;
|
•
|
currency fluctuations and foreign exchange regulations; and
|
•
|
potentially adverse tax consequences.
|
•
|
quarterly variations in our operating results or the operating results of other technology companies;
|
•
|
general conditions in the semiconductor industry;
|
•
|
global economic and financial conditions;
|
•
|
changes in analysts' estimates of our financial performance or buy/sell recommendations;
|
•
|
changes in our financial guidance or our failure to meet such guidance;
|
•
|
any acquisitions we pursue or complete; and
|
•
|
actual or anticipated announcements of technical innovations or new products by us or our competitors.
|
Location
|
|
Approximate
Total Sq. Ft.
|
|
Uses
|
Chandler, Arizona
|
|
415,000
|
|
Executive and Administrative Offices; Wafer Probe; R&D Center; Sales and Marketing; and Computer and Service Functions
|
Tempe, Arizona
|
|
379,000
|
|
Wafer Fabrication (Fab 2); R&D Center; Administrative Offices; and Warehousing
|
Gresham, Oregon
|
|
826,500
|
|
Wafer Fabrication (Fab 4); R&D Center; Administrative Offices; and Warehousing
|
Chacherngsao, Thailand
|
|
489,000
|
|
Test and Assembly; Wafer Probe; Sample Center; Warehousing; and Administrative Offices
|
Chacherngsao, Thailand
|
|
215,000
|
|
Assembly and Test
|
Bangalore, India
|
|
67,174
|
|
Research and Development; Marketing Support and Administrative Offices
|
Fiscal 2013
|
|
High
|
|
Low
|
|
Fiscal 2012
|
|
High
|
|
Low
|
First Quarter
|
|
$37.32
|
|
$30.40
|
|
First Quarter
|
|
$41.33
|
|
$35.69
|
Second Quarter
|
|
$35.73
|
|
$31.03
|
|
Second Quarter
|
|
$38.39
|
|
$29.60
|
Third Quarter
|
|
$33.37
|
|
$29.37
|
|
Third Quarter
|
|
$37.09
|
|
$30.43
|
Fourth Quarter
|
|
$37.32
|
|
$32.58
|
|
Fourth Quarter
|
|
$38.42
|
|
$35.17
|
|
|
Cumulative Total Return
|
||||||||||
|
|
March 2008
|
|
March 2009
|
|
March 2010
|
|
March 2011
|
|
March 2012
|
|
March 2013
|
Microchip Technology Incorporated
|
|
100.00
|
|
68.31
|
|
95.81
|
|
135.12
|
|
137.51
|
|
141.78
|
S&P 500 Stock Index
|
|
100.00
|
|
61.91
|
|
92.72
|
|
107.23
|
|
116.39
|
|
132.64
|
Philadelphia Semiconductor Index
|
|
100.00
|
|
69.61
|
|
107.23
|
|
122.10
|
|
137.46
|
|
133.90
|
Fiscal 2013
|
|
Dividends per Common Share
|
|
Aggregate
Amount of
Dividend
Payment
|
|
Fiscal 2012
|
|
Dividends per Common Share
|
|
Aggregate
Amount of
Dividend
Payment
|
||||||||
First Quarter
|
|
$
|
0.350
|
|
|
$
|
67,748
|
|
|
First Quarter
|
|
$
|
0.346
|
|
|
$
|
65,900
|
|
Second Quarter
|
|
0.351
|
|
|
68,147
|
|
|
Second Quarter
|
|
0.347
|
|
|
66,206
|
|
||||
Third Quarter
|
|
0.352
|
|
|
68,697
|
|
|
Third Quarter
|
|
0.348
|
|
|
66,813
|
|
||||
Fourth Quarter
|
|
0.353
|
|
|
69,230
|
|
|
Fourth Quarter
|
|
0.349
|
|
|
67,259
|
|
|
|
Year ended March 31,
|
||||||||||||||||||
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
Net sales
|
|
$
|
1,581,623
|
|
|
$
|
1,383,176
|
|
|
$
|
1,487,205
|
|
|
$
|
947,729
|
|
|
$
|
903,297
|
|
Cost of sales
|
|
743,164
|
|
|
583,882
|
|
|
605,954
|
|
|
412,092
|
|
|
386,409
|
|
|||||
Research and development
|
|
254,723
|
|
|
182,650
|
|
|
170,607
|
|
|
120,823
|
|
|
115,524
|
|
|||||
Selling, general and administrative
|
|
261,471
|
|
|
208,328
|
|
|
222,184
|
|
|
166,338
|
|
|
160,933
|
|
|||||
Amortization of acquired intangible assets
|
|
111,537
|
|
|
10,963
|
|
|
12,412
|
|
|
2,279
|
|
|
669
|
|
|||||
Special charges, net
(1)
|
|
32,175
|
|
|
837
|
|
|
1,865
|
|
|
1,238
|
|
|
6,434
|
|
|||||
Operating income
|
|
178,553
|
|
|
396,516
|
|
|
474,183
|
|
|
244,959
|
|
|
233,328
|
|
|||||
(Losses) gains on equity method investments
|
|
(617
|
)
|
|
(195
|
)
|
|
157
|
|
|
—
|
|
|
—
|
|
|||||
Interest income
|
|
15,560
|
|
|
17,992
|
|
|
16,002
|
|
|
15,325
|
|
|
32,545
|
|
|||||
Interest expense
|
|
(40,915
|
)
|
|
(34,266
|
)
|
|
(31,521
|
)
|
|
(31,150
|
)
|
|
(29,440
|
)
|
|||||
Other (expense) income, net
|
|
(404
|
)
|
|
(352
|
)
|
|
1,877
|
|
|
8,679
|
|
|
(4,354
|
)
|
|||||
Income from continuing operations before income taxes
|
|
152,177
|
|
|
379,695
|
|
|
460,698
|
|
|
237,813
|
|
|
232,079
|
|
|||||
Income tax provision (benefit)
|
|
24,788
|
|
|
42,990
|
|
|
31,531
|
|
|
20,808
|
|
|
(13,508
|
)
|
|||||
Net income from continuing operations
|
|
$
|
127,389
|
|
|
$
|
336,705
|
|
|
$
|
429,167
|
|
|
$
|
217,005
|
|
|
$
|
245,587
|
|
Basic net income per common share – continuing operations
|
|
$
|
0.65
|
|
|
$
|
1.76
|
|
|
$
|
2.29
|
|
|
$
|
1.18
|
|
|
$
|
1.34
|
|
Diluted net income per common share – continuing operations
|
|
$
|
0.62
|
|
|
$
|
1.65
|
|
|
$
|
2.20
|
|
|
$
|
1.16
|
|
|
$
|
1.31
|
|
Dividends declared per common share
|
|
$
|
1.406
|
|
|
$
|
1.390
|
|
|
$
|
1.374
|
|
|
$
|
1.359
|
|
|
$
|
1.346
|
|
Basic common shares outstanding
|
|
194,595
|
|
|
191,283
|
|
|
187,066
|
|
|
183,642
|
|
|
183,158
|
|
|||||
Diluted common shares outstanding
|
|
205,776
|
|
|
203,519
|
|
|
194,715
|
|
|
187,339
|
|
|
186,788
|
|
|
|
March 31,
|
||||||||||||||||||
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
Working capital
|
|
$
|
1,894,759
|
|
|
$
|
1,767,988
|
|
|
$
|
1,434,667
|
|
|
$
|
1,407,579
|
|
|
$
|
1,587,144
|
|
Total assets
|
|
3,851,405
|
|
|
3,083,776
|
|
|
2,968,058
|
|
|
2,516,313
|
|
|
2,405,711
|
|
|||||
Long-term obligations, less current portion
|
|
983,385
|
|
|
355,050
|
|
|
347,334
|
|
|
340,672
|
|
|
334,184
|
|
|||||
Stockholders' equity
|
|
1,933,470
|
|
|
1,990,673
|
|
|
1,812,438
|
|
|
1,533,380
|
|
|
1,490,311
|
|
(1)
|
Discussions of the special charges for the fiscal years ended March 31, 2013, 2012 and 2011 are contained in Note 5 to our consolidated financial statements. An explanation of the special charges for the fiscal years ended March 31, 2010 and 2009 is provided below.
|
|
|
March 31,
|
||||||||||||||||||
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
Acquisition related expenses
|
|
$
|
16,259
|
|
|
$
|
340
|
|
|
$
|
1,865
|
|
|
$
|
—
|
|
|
$
|
1,574
|
|
Legal settlement
|
|
11,516
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Adjustment to contingent consideration
|
|
4,400
|
|
|
(1,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Patent licenses
|
|
—
|
|
|
1,497
|
|
|
—
|
|
|
1,238
|
|
|
4,000
|
|
|||||
In-process research and development expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
860
|
|
|||||
Totals
|
|
$
|
32,175
|
|
|
$
|
837
|
|
|
$
|
1,865
|
|
|
$
|
1,238
|
|
|
$
|
6,434
|
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
The effects that adverse global economic conditions and fluctuations in the global credit and equity markets may have on our financial condition and results of operations;
|
•
|
The effects and amount of competitive pricing pressure on our product lines;
|
•
|
Our ability to moderate future average selling price declines;
|
•
|
The effect of product mix, capacity utilization, yields, fixed cost absorption, competition and economic conditions on gross margin;
|
•
|
The amount of, and changes in, demand for our products and those of our customers;
|
•
|
Our expectation that the overall percentage of revenue from our top ten customers will increase due to our acquisition of SMSC;
|
•
|
The level of orders that will be received and shipped within a quarter;
|
•
|
Our expectation that our inventory levels will increase modestly in the June 2013 quarter compared to the March 2013 quarter and that it will allow us to maintain competitive lead times and keep our capital expenditures low;
|
•
|
Our expectation that research and development expenses will be relatively flat with the March 2013 quarter and for such expenses to decrease as a percentage of net sales due to operational efficiencies and continued synergies of the SMSC integration;
|
•
|
The effect that distributor and customer inventory holding patterns will have on us;
|
•
|
Our belief that customers recognize our products and brand name and use distributors as an effective supply channel;
|
•
|
Our belief that deferred cost of sales are recorded at their approximate carrying value and will have low risk of material impairment;
|
•
|
Our belief that our direct sales personnel combined with our distributors provide an effective means of reaching our customer base;
|
•
|
Our ability to increase the proprietary portion of our analog, interface and mixed signal product lines and the effect of such an increase;
|
•
|
Our belief that our processes afford us both cost-effective designs in existing and derivative products and greater functionality in new product designs;
|
•
|
The impact of any supply disruption we may experience;
|
•
|
Our ability to effectively utilize our facilities at appropriate capacity levels and anticipated costs;
|
•
|
That we adjust capacity utilization to respond to actual and anticipated business and industry-related conditions;
|
•
|
That our existing facilities will provide sufficient capacity to respond to increases in demand with modest incremental capital expenditures;
|
•
|
That manufacturing costs will be reduced by transition to advanced process technologies;
|
•
|
Our ability to maintain manufacturing yields;
|
•
|
Continuing our investments in new and enhanced products;
|
•
|
The cost effectiveness of using our own assembly and test operations;
|
•
|
Our anticipated level of capital expenditures;
|
•
|
Continuation and amount of quarterly cash dividends;
|
•
|
The sufficiency of our existing sources of liquidity to finance anticipated capital expenditures and otherwise meet our anticipated cash requirements, and the effects that our contractual obligations are expected to have on them;
|
•
|
The impact of seasonality on our business;
|
•
|
The accuracy of our estimates used in valuing employee equity awards;
|
•
|
That the resolution of legal actions will not have a material effect on our business, and the accuracy of our assessment of the probability of loss and range of potential loss;
|
•
|
The recoverability of our deferred tax assets;
|
•
|
The adequacy of our tax reserves to offset any potential tax liabilities, having the appropriate support for our income tax positions and the accuracy of our estimated tax rate;
|
•
|
Our belief that the expiration of any tax holidays will not have a material impact on our overall tax expense or effective tax rate;
|
•
|
Our belief that the estimates used in preparing our consolidated financial statements are reasonable;
|
•
|
Our belief that recently issued accounting pronouncements listed in this document will not have a significant impact on our consolidated financial statements;
|
•
|
The accuracy of our estimates of the useful life and values of our property, assets and other liabilities;
|
•
|
The adequacy of our patent strategy, and our belief that the impact of the expiration of any particular patent will not have a material effect on our business;
|
•
|
Our actions to vigorously and aggressively defend and protect our intellectual property on a worldwide basis;
|
•
|
Our ability to obtain patents and intellectual property licenses and minimize the effects of litigation;
|
•
|
The level of risk we are exposed to for product liability or indemnification claims;
|
•
|
The effect of fluctuations in market interest rates on our income and/or cash flows;
|
•
|
The effect of fluctuations in currency rates;
|
•
|
The accuracy of our estimates of market information that determines the value of our Auction Rate Securities (ARS), and that the lack of markets for the ARS will not have a material impact on our liquidity, cash flow, or ability to fund operations;
|
•
|
That a significant portion of our future cash generation will be in our foreign subsidiaries;
|
•
|
Our intention to satisfy the lesser of the principal amount or the conversion value of our debenture in cash;
|
•
|
Our intention to indefinitely reinvest undistributed earnings of certain non-US subsidiaries in those subsidiaries;
|
•
|
Our intent to maintain a high-quality investment portfolio that preserves principal, meets liquidity needs, avoids inappropriate concentrations and delivers an appropriate yield; and
|
•
|
Our ability to collect accounts receivable.
|
|
|
Year Ended March 31,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
Net sales
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
|
47.0
|
|
|
42.2
|
|
|
40.7
|
|
Gross profit
|
|
53.0
|
|
|
57.8
|
|
|
59.3
|
|
Research and development
|
|
16.1
|
|
|
13.2
|
|
|
11.5
|
|
Selling, general and administrative
|
|
16.5
|
|
|
15.0
|
|
|
15.0
|
|
Amortization of acquired intangible assets
|
|
7.1
|
|
|
0.8
|
|
|
0.8
|
|
Special charges
|
|
2.0
|
|
|
0.1
|
|
|
0.1
|
|
Operating income
|
|
11.3
|
%
|
|
28.7
|
%
|
|
31.9
|
%
|
•
|
our acquisition of SMSC whose net sales included in our consolidated statements of income was approximately $234.3 million in fiscal 2013;
|
•
|
global economic conditions in the markets we serve;
|
•
|
semiconductor industry conditions;
|
•
|
inventory holding patterns of our customers;
|
•
|
increasing semiconductor content in our customers' products;
|
•
|
customers' increasing needs for the flexibility offered by our programmable solutions;
|
•
|
our new product offerings that have increased our served available market; and
|
•
|
continued market share gains in the segments of the markets we address.
|
|
Year Ended March 31,
|
|||||||||||||||||||
|
2013
|
|
%
|
|
2012
|
|
%
|
|
2011
|
|
%
|
|||||||||
Microcontrollers
|
$
|
1,035,514
|
|
|
65.5
|
|
|
$
|
928,509
|
|
|
67.1
|
|
|
$
|
1,013,937
|
|
|
68.2
|
|
Analog, interface and mixed signal products
|
307,723
|
|
|
19.4
|
|
|
171,165
|
|
|
12.4
|
|
|
177,994
|
|
|
12.0
|
|
|||
Memory products
|
142,557
|
|
|
9.0
|
|
|
179,217
|
|
|
13.0
|
|
|
221,219
|
|
|
14.9
|
|
|||
Technology licensing
|
83,803
|
|
|
5.3
|
|
|
87,001
|
|
|
6.3
|
|
|
72,068
|
|
|
4.8
|
|
|||
Other
|
12,026
|
|
|
0.8
|
|
|
17,284
|
|
|
1.2
|
|
|
1,987
|
|
|
0.1
|
|
|||
Total Sales
|
$
|
1,581,623
|
|
|
100.0
|
|
|
$
|
1,383,176
|
|
|
100.0
|
|
|
$
|
1,487,205
|
|
|
100.0
|
|
|
Year Ended March 31,
|
||||||||||||||||
|
2013
|
|
%
|
|
2012
|
|
%
|
|
2011
|
|
%
|
||||||
Americas
|
$
|
313,574
|
|
|
19.8
|
|
$
|
290,392
|
|
|
21.0
|
|
$
|
310,735
|
|
|
20.9
|
Europe
|
344,398
|
|
|
21.8
|
|
319,881
|
|
|
23.1
|
|
334,911
|
|
|
22.5
|
|||
Asia
|
923,651
|
|
|
58.4
|
|
772,903
|
|
|
55.9
|
|
841,559
|
|
|
56.6
|
|||
Total Net Sales
|
$
|
1,581,623
|
|
|
100.0
|
|
$
|
1,383,176
|
|
|
100.0
|
|
$
|
1,487,205
|
|
|
100.0
|
•
|
charges of approximately $53.6 million in fiscal 2013 related to the recognition of acquired inventory at fair value as a result of our acquisitions which reduced our gross margins;
|
•
|
production levels being below the range of our normal capacity, resulting in under absorption of fixed costs, in fiscal 2013 and the second half of fiscal 2012 compared to production levels being at or above the range of our normal capacity levels in the first half of fiscal 2012 and all of fiscal 2011;
|
•
|
for each of fiscal 2013 and fiscal 2012, inventory write-downs being higher than the gross margin impact of sales of inventory that was previously written down; and
|
•
|
fluctuations in the product mix of microcontrollers, analog products, memory products and technology licensing.
|
•
|
continual cost reductions in wafer fabrication and assembly and test manufacturing, such as new manufacturing technologies and more efficient manufacturing techniques; and
|
•
|
lower depreciation as a percentage of cost of sales.
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less than
1 year
|
|
1 – 3 years
|
|
3 – 5 years
|
|
More than
5 years
|
||||||||||
Operating lease obligations
|
$
|
71,071
|
|
|
$
|
13,344
|
|
|
$
|
21,451
|
|
|
$
|
16,591
|
|
|
$
|
19,685
|
|
Capital purchase obligations
(1)
|
28,011
|
|
|
28,011
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other purchase obligations and commitments
(2)
|
57,719
|
|
|
56,413
|
|
|
1,306
|
|
|
—
|
|
|
—
|
|
|||||
Borrowings under credit agreement outstanding as of March 31, 2013 - principal and interest
(3)
|
662,026
|
|
|
12,152
|
|
|
24,304
|
|
|
625,570
|
|
|
—
|
|
|||||
2.125% junior convertible debentures – principal and interest
(4)
|
1,753,810
|
|
|
24,438
|
|
|
48,875
|
|
|
48,875
|
|
|
1,631,622
|
|
|||||
Total contractual obligations
(5)
|
$
|
2,572,637
|
|
|
$
|
134,358
|
|
|
$
|
95,936
|
|
|
$
|
691,036
|
|
|
$
|
1,651,307
|
|
|
(1)
Capital purchase obligations represent commitments for construction or purchases of property, plant and equipment. These obligations were not recorded as liabilities on our balance sheet as of March 31, 2013, as we have not yet received the related goods or taken title to the property.
|
|
(2)
Other purchase obligations and commitments include payments due under various types of licenses and outstanding purchase commitments with our wafer foundries of approximately $
55.3
million for delivery of wafers in fiscal 2014.
|
|
(3)
For purposes of this table we have assumed that the principal of our credit agreement borrowings outstanding at March 31, 2013 will be paid on August 12, 2016, which is the maturity date of such borrowings.
|
|
(4)
For purposes of this table we have assumed that the principal of our convertible debentures will be paid on December 31, 2037.
|
|
(5)
Total contractual obligations do not include contractual obligations recorded on the balance sheet as current liabilities, or certain purchase obligations as discussed below. The contractual obligations also do not include amounts related to uncertain tax positions because reasonable estimates cannot be made.
|
|
Financial instruments maturing during the fiscal year ended March 31,
|
||||||||||||||||||||||
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
||||||||||||
Available-for-sale securities
|
$
|
352,279
|
|
|
$
|
290,359
|
|
|
$
|
462,073
|
|
|
$
|
36,958
|
|
|
$
|
10,016
|
|
|
$
|
144,328
|
|
Weighted-average yield rate
|
1.48
|
%
|
|
1.37
|
%
|
|
0.57
|
%
|
|
0.81
|
%
|
|
0.45
|
%
|
|
0.86
|
%
|
Item 12.
|
SECURITY OWNERSHIP OF CERTIAN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
|
|
Page No.
|
(1)
|
Financial Statements:
|
|
|
Report of Independent Registered Public Accounting Firm
|
F-1
|
|
Consolidated Balance Sheets as of March 31, 2013 and 2012
|
F-2
|
|
Consolidated Statements of Income for each of the three years in the period ended March 31, 2013
|
F-3
|
|
Consolidated Statements of Comprehensive Income for each of the three years in the period ended March 31, 2013
|
F-4
|
|
Consolidated Statements of Cash Flows for each of the three years in the period ended March 31, 2013
|
F-5
|
|
Consolidated Statements of Stockholders' Equity for each of the three years in the period ended March 31, 2013
|
F-6
|
|
Notes to Consolidated Financial Statements
|
F-7
|
(2)
|
Financial Statement Schedules
|
None
|
(3)
|
The Exhibits filed with this Form 10-K or incorporated herein by reference are set
forth in the Exhibit Index beginning on page 51 hereof, which Exhibit Index is incorporated herein by this reference.
|
|
|
MICROCHIP TECHNOLOGY INCORPORATED
|
|
(Registrant)
|
|
|
Date: May 30, 2013
|
By:
/s/ Steve Sanghi
|
|
Steve Sanghi
|
|
President and Chief Executive Officer
|
Name and Signature
|
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Steve Sanghi
|
|
|
Chairman, President and Chief Executive Officer
|
|
May 30, 2013
|
Steve Sanghi
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Albert J. Hugo-Martinez
|
|
|
Director
|
|
May 30, 2013
|
Albert J. Hugo-Martinez
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ L.B. Day
|
|
|
Director
|
|
May 30, 2013
|
L.B. Day
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Matthew W. Chapman
|
|
|
Director
|
|
May 30, 2013
|
Matthew W. Chapman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Wade F. Meyercord
|
|
|
Director
|
|
May 30, 2013
|
Wade F. Meyercord
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ J. Eric Bjornholt
|
|
|
Vice President and Chief Financial Officer
|
|
May 30, 2013
|
J. Eric Bjornholt
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filing Date
|
|
Filed Herewith
|
2.1
|
|
Purchase and Sale Agreement, dated as of July 18, 2002 between Registrant and Fujitsu Microelectronics, Inc.
|
|
8-K
|
|
000-21184
|
|
2.1
|
|
7/18/2002
|
|
|
2.2
|
|
Agreement and Plan of Merger dated as of May 1, 2012 by and among Microchip Technology Incorporated, Microchip Technology Management Co. and Standard Microsystems Corporation, including Form of Voting Agreement
|
|
10-K
|
|
000-21184
|
|
2.2
|
|
5/30/2012
|
|
|
2.3
|
|
Agreement and Plan of Merger dated as of February 2, 2010 by and among Microchip Technology Incorporated, Sun Acquisition Corporation and Silicon Storage Technology, Inc.
|
|
10-Q
|
|
000-21184
|
|
2.1
|
|
2/9/2010
|
|
|
2.4
|
|
Amendment No. 1 to Agreement and Plan of Merger by and among Microchip Technology Incorporated, Sun Acquisition Corporation and Silicon Storage Technology, Inc.
|
|
8-K
|
|
000-21184
|
|
2.1
|
|
2/23/2009
|
|
|
2.5
|
|
Amendment No. 2 to Agreement and Plan of Merger by and among Microchip Technology Incorporated, Sun Acquisition Corporation and Silicon Storage Technology, Inc.
|
|
8-K
|
|
000-21184
|
|
2.1
|
|
3/8/2010
|
|
|
3.1
|
|
Restated Certificate of Incorporation of Registrant
|
|
10-Q
|
|
000-21184
|
|
3.1
|
|
11/12/2002
|
|
|
3.2
|
|
Amended and Restated By-Laws of Registrant, as amended through January 29, 2007
|
|
10-Q
|
|
000-21184
|
|
3.1
|
|
2/6/2007
|
|
|
4.1
|
|
Indenture, dated as of December 7, 2007, by and between Wells Fargo Bank, National Association, as Trustee, and Microchip Technology Incorporated
|
|
8-K
|
|
000-21184
|
|
4.1
|
|
12/7/2007
|
|
|
4.2
|
|
Registration Rights Agreement, dated as of December 7, 2007, by and between J.P. Morgan Securities Inc. and Microchip Technology Incorporated
|
|
8-K
|
|
000-21184
|
|
4.2
|
|
12/7/2007
|
|
|
10.1
|
|
Credit Agreement, dated August 12, 2011, among Microchip Technology Incorporated, the lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent
|
|
8-K
|
|
000-21184
|
|
10.1
|
|
8/18/2011
|
|
|
10.2
|
|
Amendment No. 1 to Credit Agreement dated as of February 6, 2012
|
|
10-K
|
|
000-21184
|
|
10.2
|
|
5/30/2012
|
|
|
10.3
|
|
Amendment No. 2 to Credit Agreement dated as of April 10, 2012
|
|
10-K
|
|
000-21184
|
|
10.3
|
|
5/30/2012
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filing Date
|
|
Filed Herewith
|
10.4
|
|
Form of Indemnification Agreement between Registrant and its directors and certain of its officers
|
|
S-1
|
|
33-57960
|
|
10.1
|
|
2/5/1993
|
|
|
10.5
|
|
Microchip Technology Incorporated 2012 Inducement Award Plan as adopted by the Board of Directors on August 1, 2012
|
|
S-8
|
|
333-183074
|
|
4.8
|
|
8/1/2012
|
|
|
10.6
|
|
*2004 Equity Incentive Plan as amended by the Board on August 17, 2012
|
|
8-K
|
|
000-21184
|
|
10.1
|
|
8/23/2012
|
|
|
10.7
|
|
*Form of Notice of Grant for 2004 Equity Incentive Plan (including Exhibit A Stock Option Agreement)
|
|
S-8
|
|
333-119939
|
|
4.5
|
|
10/25/2004
|
|
|
10.8
|
|
Form of Notice of Grant (Foreign) for 2004 Equity Incentive Plan (including Exhibit A Stock Option Agreement (Foreign))
|
|
10-K
|
|
000-21184
|
|
10.4
|
|
5/23/2005
|
|
|
10.9
|
|
*Form of Notice of Grant of Restricted Stock Units for 2004 Equity Incentive Plan (including Exhibit A Restricted Stock Units Agreement)
|
|
10-K
|
|
000-21184
|
|
10.6
|
|
5/31/2006
|
|
|
10.10
|
|
*Restricted Stock Units Agreement (Domestic) for 2004 Equity Incentive Plan
|
|
10-Q
|
|
000-21184
|
|
10.3
|
|
11/7/2007
|
|
|
10.11
|
|
Restricted Stock Units Agreement (Foreign) for 2004 Equity Incentive Plan
|
|
10-Q
|
|
000-21184
|
|
10.4
|
|
11/7/2008
|
|
|
10.12
|
|
*Form of Global RSU Agreement for 2004 Equity Incentive Plan (including Notice of Grant of Restricted Stock Units)
|
|
8-K
|
|
000-21184
|
|
10.1
|
|
9/27/2010
|
|
|
10.13
|
|
*1993 Stock Option Plan, as Amended through August 16, 2002
|
|
10-Q
|
|
000-21184
|
|
10.1
|
|
11/12/2002
|
|
|
10.14
|
|
*Form of Notice of Grant For 1993 Stock Option Plan, with Exhibit A thereto, Form of Stock Option Agreement; and Exhibit B thereto, Form of Stock Purchase Agreement
|
|
S-8
|
|
333-872
|
|
10.6
|
|
1/23/1996
|
|
|
10.15
|
|
*Microchip Technology Incorporated 2001 Employee Stock Purchase Plan as amended through March 1, 2012
|
|
10-Q
|
|
000-21184
|
|
10.1
|
|
2/6/2012
|
|
|
10.16
|
|
*1997 Nonstatutory Stock Option Plan, as Amended Through March 3, 2003
|
|
10-K
|
|
000-21184
|
|
10.13
|
|
6/5/2003
|
|
|
10.17
|
|
*Form of Notice of Grant For 1997 Nonstatutory Stock Option Plan, with Exhibit A thereto, Form of Stock Option Agreement
|
|
10-K
|
|
000-21184
|
|
10.17
|
|
5/27/1998
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filing Date
|
|
Filed Herewith
|
10.18
|
|
Microchip Technology Incorporated International Employee Stock Purchase Plan as amended through August 19, 2011, including Purchase Agreement, Enrollment Form and Change Form
|
|
S-8
|
|
333-177889
|
|
4.2
|
|
11/10/2011
|
|
|
10.19
|
|
*Executive Management Incentive Compensation Plan as amended on August 19, 2011
|
|
8-K
|
|
000-21184
|
|
10.1
|
|
8/24/2011
|
|
|
10.20
|
|
*Discretionary Executive Management Incentive Compensation Plan
|
|
10-Q
|
|
000-21184
|
|
10.5
|
|
2/6/2007
|
|
|
10.21
|
|
*Management Incentive Compensation Plan as amended by the Board of Directors on May 17, 2013
|
|
|
|
|
|
|
|
|
|
X
|
10.22
|
|
PowerSmart, Inc. 1998 Stock Incentive Plan, Including Forms of Incentive Stock Option Agreement and Nonqualified Stock Option Agreement
|
|
S-8
|
|
333-96791
|
|
4.1
|
|
7/19/2002
|
|
|
10.23
|
|
*Microchip Technology Incorporated Supplemental Retirement Plan
|
|
S-8
|
|
333-101696
|
|
4.1.1
|
|
4/1/2009
|
|
|
10.24
|
|
*Adoption Agreement to the Microchip Technology Incorporated Supplemental Retirement Plan dated January 1, 1997
|
|
S-8
|
|
333-101696
|
|
4.1.3
|
|
4/1/2003
|
|
|
10.25
|
|
*Amendment dated December 9, 1999 to the Adoption Agreement to the Microchip Technology Incorporated Supplemental Retirement Plan
|
|
S-8
|
|
333-101696
|
|
4.1.4
|
|
4/1/2004
|
|
|
10.26
|
|
*February 3, 2003 Amendment to the Adoption Agreement to the Microchip Technology Incorporated Supplemental Retirement Plan
|
|
10-K
|
|
000-21184
|
|
10.28
|
|
6/5/2003
|
|
|
10.27
|
|
*Amendments to Supplemental Retirement Plan
|
|
10-Q
|
|
000-21184
|
|
10.1
|
|
2/9/2006
|
|
|
10.28
|
|
*Change of Control Severance Agreement
|
|
8-K
|
|
000-21184
|
|
10.1
|
|
12/18/2008
|
|
|
10.29
|
|
*Change of Control Severance Agreement
|
|
8-K
|
|
000-21184
|
|
10.2
|
|
12/18/2008
|
|
|
10.30
|
|
Development Agreement dated as of August 29, 1997 by and between Registrant and the City of Chandler, Arizona
|
|
10-Q
|
|
000-21184
|
|
10.1
|
|
2/13/1998
|
|
|
10.31
|
|
Addendum to Development Agreement by and between Registrant and the City of Tempe, Arizona, dated May 11, 2000
|
|
10-K
|
|
000-21184
|
|
10.14
|
|
5/15/2001
|
|
|
10.32
|
|
Development Agreement dated as of July 17, 1997 by and between Registrant and the City of Tempe, Arizona
|
|
10-Q
|
|
000-21184
|
|
10.2
|
|
2/13/1998
|
|
|
|
Page Number
|
|
|
Report of Independent Registered Public Accounting Firm
|
F-1
|
|
|
Consolidated Balance Sheets as of March 31, 2013 and 2012
|
F-2
|
|
|
Consolidated Statements of Income for each of the three years in the period ended March 31, 2013
|
F-3
|
|
|
Consolidated Statements of Comprehensive Income for each of the three years in the period ended March 31, 2013
|
F-4
|
|
|
Consolidated Statements of Cash Flows for each of the three years in the period ended March 31, 2013
|
F-5
|
|
|
Consolidated Statements of Stockholders' Equity for each of the three years in the period ended March 31, 2013
|
F-6
|
|
|
Notes to Consolidated Financial Statements
|
F-7
|
Item1.
|
Financial Statements
|
|
Year ended March 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net sales
|
$
|
1,581,623
|
|
|
$
|
1,383,176
|
|
|
$
|
1,487,205
|
|
Cost of sales (1)
|
743,164
|
|
|
583,882
|
|
|
605,954
|
|
|||
Gross profit
|
838,459
|
|
|
799,294
|
|
|
881,251
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
||||
Research and development (1)
|
254,723
|
|
|
182,650
|
|
|
170,607
|
|
|||
Selling, general and administrative (1)
|
261,471
|
|
|
208,328
|
|
|
222,184
|
|
|||
Amortization of acquired intangible assets
|
111,537
|
|
|
10,963
|
|
|
12,412
|
|
|||
Special charges, net
|
32,175
|
|
|
837
|
|
|
1,865
|
|
|||
|
659,906
|
|
|
402,778
|
|
|
407,068
|
|
|||
Operating income
|
178,553
|
|
|
396,516
|
|
|
474,183
|
|
|||
(Losses) gains on equity method investments
|
(617
|
)
|
|
(195
|
)
|
|
157
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest income
|
15,560
|
|
|
17,992
|
|
|
16,002
|
|
|||
Interest expense
|
(40,915
|
)
|
|
(34,266
|
)
|
|
(31,521
|
)
|
|||
Other (expense) income, net
|
(404
|
)
|
|
(352
|
)
|
|
1,877
|
|
|||
Income from continuing operations before income taxes
|
152,177
|
|
|
379,695
|
|
|
460,698
|
|
|||
Income tax provision
|
24,788
|
|
|
42,990
|
|
|
31,531
|
|
|||
Net income from continuing operations
|
127,389
|
|
|
336,705
|
|
|
429,167
|
|
|||
Discontinued operations:
|
|
|
|
|
|
|
|
||||
Loss from discontinued operations before income taxes
|
—
|
|
|
—
|
|
|
(11,126
|
)
|
|||
Income tax benefit
|
—
|
|
|
—
|
|
|
(909
|
)
|
|||
Net loss from discontinued operations
|
—
|
|
|
—
|
|
|
(10,217
|
)
|
|||
Net income
|
$
|
127,389
|
|
|
$
|
336,705
|
|
|
$
|
418,950
|
|
Basic net income per common share – continuing operations
|
$
|
0.65
|
|
|
$
|
1.76
|
|
|
$
|
2.29
|
|
Basic net loss per common share – discontinued operations
|
—
|
|
|
—
|
|
|
(0.05
|
)
|
|||
Basic net income per common share
|
$
|
0.65
|
|
|
$
|
1.76
|
|
|
$
|
2.24
|
|
Diluted net income per common share – continuing operations
|
$
|
0.62
|
|
|
$
|
1.65
|
|
|
$
|
2.20
|
|
Diluted net loss per common share – discontinued operations
|
—
|
|
|
—
|
|
|
(0.05
|
)
|
|||
Diluted net income per common share
|
$
|
0.62
|
|
|
$
|
1.65
|
|
|
$
|
2.15
|
|
Dividends declared per common share
|
$
|
1.406
|
|
|
$
|
1.390
|
|
|
$
|
1.374
|
|
Basic common shares outstanding
|
194,595
|
|
|
191,283
|
|
|
187,066
|
|
|||
Diluted common shares outstanding
|
205,776
|
|
|
203,519
|
|
|
194,715
|
|
|||
(1) Includes share-based compensation expense as follows:
|
|
|
|
|
|
||||||
Cost of sales
|
$
|
8,234
|
|
|
$
|
5,648
|
|
|
$
|
6,825
|
|
Research and development
|
22,178
|
|
|
14,719
|
|
|
12,874
|
|
|||
Selling, general and administrative
|
27,603
|
|
|
17,922
|
|
|
17,113
|
|
|
Year Ended March 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net income
|
$
|
127,389
|
|
|
$
|
336,705
|
|
|
$
|
418,950
|
|
Components of other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Change in net unrealized holding gain (loss) on available-for-sale securities, net of tax effect of ($505), $281 and ($493), respectively
|
2,343
|
|
|
(256
|
)
|
|
325
|
|
|||
Change in minimum pension liability, net of tax effect of ($28)
|
52
|
|
|
—
|
|
|
—
|
|
|||
Change in net foreign currency translation adjustment
|
1,439
|
|
|
—
|
|
|
—
|
|
|||
Other comprehensive income (loss)
|
3,834
|
|
|
(256
|
)
|
|
325
|
|
|||
Total comprehensive income
|
$
|
131,223
|
|
|
$
|
336,449
|
|
|
$
|
419,275
|
|
|
Year ended March 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
127,389
|
|
|
$
|
336,705
|
|
|
$
|
418,950
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
204,097
|
|
|
99,424
|
|
|
106,612
|
|
|||
Deferred income taxes
|
(28,368
|
)
|
|
21,954
|
|
|
24,003
|
|
|||
Share-based compensation expense related to equity incentive plans
|
52,069
|
|
|
38,289
|
|
|
36,812
|
|
|||
Excess tax benefit from share-based compensation
|
(297
|
)
|
|
(576
|
)
|
|
(1,854
|
)
|
|||
Convertible debt derivatives - revaluation and amortization
|
138
|
|
|
204
|
|
|
(185
|
)
|
|||
Amortization of convertible debenture issuance costs
|
217
|
|
|
219
|
|
|
219
|
|
|||
Amortization of debt discount on convertible debentures
|
8,197
|
|
|
7,512
|
|
|
6,847
|
|
|||
Losses (gains) on equity method investments
|
617
|
|
|
195
|
|
|
(157
|
)
|
|||
Gain on sale of assets
|
(256
|
)
|
|
(411
|
)
|
|
(89
|
)
|
|||
Loss on write-down of fixed assets
|
400
|
|
|
—
|
|
|
—
|
|
|||
Unrealized impairment loss on available-for-sale investments
|
413
|
|
|
2,158
|
|
|
4,659
|
|
|||
Special charge (income)
|
4,400
|
|
|
(1,000
|
)
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Decrease in accounts receivable
|
386
|
|
|
11,845
|
|
|
6,341
|
|
|||
Decrease (increase) in inventories
|
65,867
|
|
|
(35,240
|
)
|
|
(22,068
|
)
|
|||
Increase (decrease) in deferred income on shipments to distributors
|
18,867
|
|
|
(31,335
|
)
|
|
38,781
|
|
|||
Decrease in accounts payable and accrued liabilities
|
(40,914
|
)
|
|
(61,455
|
)
|
|
(638
|
)
|
|||
Change in other assets and liabilities
|
32,957
|
|
|
7,970
|
|
|
(35,572
|
)
|
|||
Net cash provided by operating activities
|
446,179
|
|
|
396,458
|
|
|
582,661
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||
Purchases of available-for-sale investments
|
(985,791
|
)
|
|
(1,133,625
|
)
|
|
(1,008,056
|
)
|
|||
Sales and maturities of available-for-sale investments
|
856,579
|
|
|
983,500
|
|
|
1,055,286
|
|
|||
Acquisition of SMSC, net of cash acquired
|
(731,746
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition of SST, net of cash acquired
|
—
|
|
|
—
|
|
|
(112,707
|
)
|
|||
Other business acquisitions, net of cash acquired
|
(20,556
|
)
|
|
(38,580
|
)
|
|
(13,020
|
)
|
|||
Investments in other assets
|
(4,730
|
)
|
|
(5,818
|
)
|
|
(16,567
|
)
|
|||
Proceeds from sale of assets
|
306
|
|
|
411
|
|
|
31,668
|
|
|||
Capital expenditures
|
(50,818
|
)
|
|
(62,370
|
)
|
|
(124,454
|
)
|
|||
Net cash used in investing activities
|
(936,756
|
)
|
|
(256,482
|
)
|
|
(187,850
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||
Proceeds from borrowings on line of credit
|
620,000
|
|
|
—
|
|
|
—
|
|
|||
Payment of cash dividend
|
(273,822
|
)
|
|
(266,178
|
)
|
|
(256,811
|
)
|
|||
Proceeds from sale of common stock
|
35,695
|
|
|
57,457
|
|
|
71,940
|
|
|||
Excess tax benefit from share-based compensation
|
297
|
|
|
576
|
|
|
1,854
|
|
|||
Net cash provided by (used in) financing activities
|
382,170
|
|
|
(208,145
|
)
|
|
(183,017
|
)
|
|||
Effect of foreign exchange rate changes on cash and cash equivalents
|
986
|
|
|
—
|
|
|
—
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
(107,421
|
)
|
|
(68,169
|
)
|
|
211,794
|
|
|||
Cash and cash equivalents at beginning of period
|
635,755
|
|
|
703,924
|
|
|
492,130
|
|
|||
Cash and cash equivalents at end of period
|
$
|
528,334
|
|
|
$
|
635,755
|
|
|
$
|
703,924
|
|
•
|
the investee's revenue and trends in earnings or losses relative to pre-defined milestones and overall business prospects;
|
•
|
the technological feasibility of the investee's products and technologies;
|
•
|
the general market conditions in the investee's industry or geographic area, including adverse regulatory or economic changes;
|
•
|
factors related to the investee's ability to remain in business, such as the investee's liquidity, debt ratios, and the rate at which the investee is using its cash; and
|
•
|
the investee's receipt of additional funding at a lower valuation.
|
Assets acquired
|
Previously Reported
September 30, 2012
|
|
Adjustments
|
|
March 31, 2013
|
||||||
Cash and cash equivalents
|
$
|
180,925
|
|
|
$
|
—
|
|
|
$
|
180,925
|
|
Accounts receivable, net
|
58,441
|
|
|
—
|
|
|
58,441
|
|
|||
Inventories
|
89,662
|
|
|
(3,418
|
)
|
|
86,244
|
|
|||
Prepaid expenses
|
5,675
|
|
|
(58
|
)
|
|
5,617
|
|
|||
Deferred tax assets
|
13,717
|
|
|
2,126
|
|
|
15,843
|
|
|||
Other current assets
|
18,290
|
|
|
(712
|
)
|
|
17,578
|
|
|||
Property, plant and equipment, net
|
36,669
|
|
|
(1,061
|
)
|
|
35,608
|
|
|||
Long-term investments
|
24,275
|
|
|
—
|
|
|
24,275
|
|
|||
Goodwill
|
157,840
|
|
|
11,225
|
|
|
169,065
|
|
|||
Intangible assets, net
|
7,390
|
|
|
2,824
|
|
|
10,214
|
|
|||
Purchased intangible assets
|
517,800
|
|
|
—
|
|
|
517,800
|
|
|||
Other assets
|
3,835
|
|
|
—
|
|
|
3,835
|
|
|||
Total assets acquired
|
1,114,519
|
|
|
10,926
|
|
|
1,125,445
|
|
|||
|
|
|
|
|
|
||||||
Liabilities assumed
|
|
|
|
|
|
||||||
Accounts payable
|
(28,035
|
)
|
|
—
|
|
|
(28,035
|
)
|
|||
Accrued liabilities
|
(52,453
|
)
|
|
(9,585
|
)
|
|
(62,038
|
)
|
|||
Deferred income on shipments to distributors
|
(11,376
|
)
|
|
—
|
|
|
(11,376
|
)
|
|||
Long-term income tax payable
|
(72,781
|
)
|
|
—
|
|
|
(72,781
|
)
|
|||
Deferred tax liability
|
(20,194
|
)
|
|
(885
|
)
|
|
(21,079
|
)
|
|||
Other liabilities
|
(10,079
|
)
|
|
(456
|
)
|
|
(10,535
|
)
|
|||
Total liabilities assumed
|
(194,918
|
)
|
|
(10,926
|
)
|
|
(205,844
|
)
|
|||
Purchase price allocated
|
$
|
919,601
|
|
|
$
|
—
|
|
|
$
|
919,601
|
|
Purchased Intangible Assets
|
Useful Life
|
|
August 2, 2012
|
||
|
(in years)
|
|
(in thousands)
|
||
Core/developed technology
|
7-15
|
|
$
|
238,100
|
|
In-process technology
|
7-15
|
|
80,300
|
|
|
Corporate trade name
|
1
|
|
2,300
|
|
|
Product trademarks
|
6
|
|
11,700
|
|
|
Customer-related
|
5
|
|
163,500
|
|
|
Backlog
|
1
|
|
21,900
|
|
|
|
|
|
$
|
517,800
|
|
|
Year ended March 31,
|
||||||
|
2013
|
|
2012
|
||||
Net sales
|
$
|
1,742,595
|
|
|
$
|
1,771,280
|
|
Net income
|
204,446
|
|
|
92,699
|
|
||
Basic earnings per share
|
$
|
1.05
|
|
|
$
|
0.48
|
|
Diluted earnings per share
|
$
|
0.99
|
|
|
$
|
0.45
|
|
3.
|
RECLASSIFICATION OF PRIOR PERIODS
|
|
Year ended
|
||
|
March 31, 2011
|
||
Net sales
|
$
|
25,177
|
|
Cost of sales
|
(32,627
|
)
|
|
Operating expenses
|
(3,676
|
)
|
|
Income tax benefit
|
909
|
|
|
Net loss from discontinued operations
|
$
|
(10,217
|
)
|
6.
|
INVESTMENTS
|
|
Available-for-sale Securities
|
||||||||||||||
|
Adjusted
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Government agency bonds
|
$
|
558,116
|
|
|
$
|
335
|
|
|
$
|
(298
|
)
|
|
$
|
558,153
|
|
Municipal bonds
|
25,000
|
|
|
146
|
|
|
(8
|
)
|
|
25,138
|
|
||||
Auction rate securities
|
33,459
|
|
|
332
|
|
|
—
|
|
|
33,791
|
|
||||
Corporate bonds and debt
|
680,144
|
|
|
5,137
|
|
|
(159
|
)
|
|
685,122
|
|
||||
Marketable equity securities
|
5,270
|
|
|
239
|
|
|
—
|
|
|
5,509
|
|
||||
|
$
|
1,301,989
|
|
|
$
|
6,189
|
|
|
$
|
(465
|
)
|
|
$
|
1,307,713
|
|
|
Available-for-sale Securities
|
||||||||||||||
|
Adjusted
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Government agency bonds
|
$
|
342,025
|
|
|
$
|
476
|
|
|
$
|
(397
|
)
|
|
$
|
342,104
|
|
Municipal bonds
|
19,888
|
|
|
234
|
|
|
—
|
|
|
20,122
|
|
||||
Auction rate securities
|
10,246
|
|
|
—
|
|
|
—
|
|
|
10,246
|
|
||||
Corporate bonds and debt
|
770,891
|
|
|
4,150
|
|
|
(937
|
)
|
|
774,104
|
|
||||
Marketable equity securities
|
5,864
|
|
|
188
|
|
|
(788
|
)
|
|
5,264
|
|
||||
|
$
|
1,148,914
|
|
|
$
|
5,048
|
|
|
$
|
(2,122
|
)
|
|
$
|
1,151,840
|
|
|
Adjusted
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Available-for-sale
|
|
|
|
|
|
|
|
||||||||
Due in one year or less
|
$
|
350,349
|
|
|
$
|
1,933
|
|
|
$
|
(3
|
)
|
|
$
|
352,279
|
|
Due after one year and through five years
|
795,952
|
|
|
3,666
|
|
|
(212
|
)
|
|
799,406
|
|
||||
Due after five years and through ten years
|
115,901
|
|
|
116
|
|
|
(250
|
)
|
|
115,767
|
|
||||
Due after ten years
|
28,327
|
|
|
235
|
|
|
—
|
|
|
28,562
|
|
||||
|
$
|
1,290,529
|
|
|
$
|
5,950
|
|
|
$
|
(465
|
)
|
|
$
|
1,296,014
|
|
|
Adjusted
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Available-for-sale
|
|
|
|
|
|
|
|
||||||||
Due in one year or less
|
$
|
268,501
|
|
|
$
|
1,537
|
|
|
$
|
(21
|
)
|
|
$
|
270,017
|
|
Due after one year and through five years
|
839,677
|
|
|
3,323
|
|
|
(1,297
|
)
|
|
841,703
|
|
||||
Due after five years and through ten years
|
25,177
|
|
|
—
|
|
|
(16
|
)
|
|
25,161
|
|
||||
Due after ten years
|
5,069
|
|
|
—
|
|
|
—
|
|
|
5,069
|
|
||||
|
$
|
1,138,424
|
|
|
$
|
4,860
|
|
|
$
|
(1,334
|
)
|
|
$
|
1,141,950
|
|
Level 1-
|
Observable inputs such as quoted prices in active markets;
|
Level 2-
|
Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
|
Level 3-
|
Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
|
Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
Balance
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Money market fund deposits
|
$
|
100,878
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
100,878
|
|
Marketable equity securities
|
5,509
|
|
|
—
|
|
|
—
|
|
|
5,509
|
|
||||
Corporate bonds & debt
|
—
|
|
|
678,932
|
|
|
6,190
|
|
|
685,122
|
|
||||
Government agency bonds
|
—
|
|
|
558,153
|
|
|
—
|
|
|
558,153
|
|
||||
Deposit accounts
|
—
|
|
|
427,456
|
|
|
—
|
|
|
427,456
|
|
||||
Municipal bonds
|
—
|
|
|
25,138
|
|
|
—
|
|
|
25,138
|
|
||||
Auction rate securities
|
—
|
|
|
—
|
|
|
33,791
|
|
|
33,791
|
|
||||
Total assets measured at fair value
|
$
|
106,387
|
|
|
$
|
1,689,679
|
|
|
$
|
39,981
|
|
|
$
|
1,836,047
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,100
|
|
|
$
|
19,100
|
|
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,100
|
|
|
$
|
19,100
|
|
|
Quoted Prices
in Active
Markets for Identical Instruments
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
Balance
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Money market fund deposits
|
$
|
232,219
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
232,219
|
|
Marketable equity securities
|
5,264
|
|
|
—
|
|
|
—
|
|
|
5,264
|
|
||||
Corporate bonds & debt
|
—
|
|
|
769,479
|
|
|
4,625
|
|
|
774,104
|
|
||||
Government agency bonds
|
—
|
|
|
342,104
|
|
|
—
|
|
|
342,104
|
|
||||
Deposit accounts
|
—
|
|
|
403,536
|
|
|
—
|
|
|
403,536
|
|
||||
Municipal bonds
|
—
|
|
|
20,122
|
|
|
—
|
|
|
20,122
|
|
||||
Auction rate securities
|
—
|
|
|
—
|
|
|
10,246
|
|
|
10,246
|
|
||||
Total assets measured at fair value
|
$
|
237,483
|
|
|
$
|
1,535,241
|
|
|
$
|
14,871
|
|
|
$
|
1,787,595
|
|
Year ended March 31, 2013
|
Auction Rate
Securities
|
|
Corporate
Debt
|
|
Contingent
Consideration
|
|
Total Gains
(Losses)
|
||||||||
Balance at March 31, 2012
|
$
|
10,246
|
|
|
$
|
4,625
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total gains or losses (realized and unrealized):
|
|
|
|
|
|
|
|
||||||||
Included in earnings
|
(412
|
)
|
|
—
|
|
|
(4,400
|
)
|
|
(4,813
|
)
|
||||
Included in other comprehensive income
|
332
|
|
|
—
|
|
|
—
|
|
|
218
|
|
||||
Purchases, sales, issuances, and settlements, net
|
(650
|
)
|
|
1,565
|
|
|
—
|
|
|
—
|
|
||||
Acquisition-related
|
24,275
|
|
|
—
|
|
|
(14,700
|
)
|
|
—
|
|
||||
Balance at March 31, 2013
|
$
|
33,791
|
|
|
$
|
6,190
|
|
|
$
|
(19,100
|
)
|
|
$
|
(4,595
|
)
|
Year ended March 31, 2012
|
Auction Rate
Securities
|
|
Corporate
Debt
|
|
Total Gains
|
||||||
Balance at March 31, 2011
|
$
|
12,475
|
|
|
$
|
3,500
|
|
|
$
|
—
|
|
Total gains or losses (realized and unrealized):
|
|
|
|
|
|
||||||
Included in earnings
|
271
|
|
|
—
|
|
|
271
|
|
|||
Purchases, sales, issuances, and settlements, net
|
(2,500
|
)
|
|
1,125
|
|
|
—
|
|
|||
Balance at March 31, 2012
|
$
|
10,246
|
|
|
$
|
4,625
|
|
|
$
|
271
|
|
|
Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
Balance
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
100,878
|
|
|
$
|
427,456
|
|
|
$
|
—
|
|
|
$
|
528,334
|
|
Short-term investments
|
—
|
|
|
1,050,263
|
|
|
—
|
|
|
1,050,263
|
|
||||
Long-term investments
|
5,509
|
|
|
211,960
|
|
|
39,981
|
|
|
257,450
|
|
||||
Total assets measured at fair value
|
$
|
106,387
|
|
|
$
|
1,689,679
|
|
|
$
|
39,981
|
|
|
$
|
1,836,047
|
|
|
Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
Balance
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
232,219
|
|
|
$
|
403,536
|
|
|
$
|
—
|
|
|
$
|
635,755
|
|
Short-term investments
|
782
|
|
|
822,472
|
|
|
—
|
|
|
823,254
|
|
||||
Long-term investments
|
4,482
|
|
|
309,233
|
|
|
14,871
|
|
|
328,586
|
|
||||
Total assets measured at fair value
|
$
|
237,483
|
|
|
$
|
1,535,241
|
|
|
$
|
14,871
|
|
|
$
|
1,787,595
|
|
|
March 31, 2013
|
|
March 31, 2012
|
||||
Trade accounts receivable
|
$
|
230,469
|
|
|
$
|
171,274
|
|
Other
|
2,250
|
|
|
1,529
|
|
||
|
232,719
|
|
|
172,803
|
|
||
Less allowance for doubtful accounts
|
2,764
|
|
|
2,602
|
|
||
|
$
|
229,955
|
|
|
$
|
170,201
|
|
|
March 31, 2013
|
|
March 31, 2012
|
||||
Raw materials
|
$
|
9,020
|
|
|
$
|
8,065
|
|
Work in process
|
181,750
|
|
|
139,045
|
|
||
Finished goods
|
51,564
|
|
|
70,168
|
|
||
|
$
|
242,334
|
|
|
$
|
217,278
|
|
11.
|
PROPERTY, PLANT AND EQUIPMENT
|
|
March 31, 2013
|
|
March 31, 2012
|
||||
Land
|
$
|
47,102
|
|
|
$
|
46,529
|
|
Building and building improvements
|
396,611
|
|
|
374,042
|
|
||
Machinery and equipment
|
1,377,814
|
|
|
1,314,303
|
|
||
Projects in process
|
76,158
|
|
|
83,676
|
|
||
|
1,897,685
|
|
|
1,818,550
|
|
||
Less accumulated depreciation and amortization
|
1,383,141
|
|
|
1,301,939
|
|
||
|
$
|
514,544
|
|
|
$
|
516,611
|
|
|
|
March 31, 2013
|
||||||||||
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net Amount
|
||||||
Developed technology
|
|
$
|
375,006
|
|
|
$
|
(69,107
|
)
|
|
$
|
305,899
|
|
Customer-related
|
|
194,500
|
|
|
(68,522
|
)
|
|
125,978
|
|
|||
Trademarks and trade names
|
|
15,730
|
|
|
(3,941
|
)
|
|
11,789
|
|
|||
Backlog
|
|
24,610
|
|
|
(17,310
|
)
|
|
7,300
|
|
|||
In-process technology
|
|
78,968
|
|
|
—
|
|
|
78,968
|
|
|||
Distribution rights
|
|
5,236
|
|
|
(5,101
|
)
|
|
135
|
|
|||
Covenants not to compete
|
|
400
|
|
|
(333
|
)
|
|
67
|
|
|||
|
|
$
|
694,450
|
|
|
$
|
(164,314
|
)
|
|
$
|
530,136
|
|
|
|
March 31, 2012
|
||||||||||
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net Amount
|
||||||
Developed technology
|
|
$
|
94,681
|
|
|
$
|
(35,920
|
)
|
|
$
|
58,761
|
|
Customer-related
|
|
20,400
|
|
|
(4,633
|
)
|
|
15,767
|
|
|||
Trademarks and trade names
|
|
1,730
|
|
|
(684
|
)
|
|
1,046
|
|
|||
Backlog
|
|
2,410
|
|
|
(2,410
|
)
|
|
—
|
|
|||
In-process technology
|
|
14,086
|
|
|
—
|
|
|
14,086
|
|
|||
Distribution rights
|
|
5,236
|
|
|
(4,660
|
)
|
|
576
|
|
|||
Covenants not to compete
|
|
400
|
|
|
(200
|
)
|
|
200
|
|
|||
|
|
$
|
138,943
|
|
|
$
|
(48,507
|
)
|
|
$
|
90,436
|
|
|
Semiconductor Products
Reporting Unit
|
|
Technology
Licensing
Reporting Unit
|
||||
Balance at March 31, 2011
|
$
|
56,818
|
|
|
$
|
19,200
|
|
Additions due to contingent consideration payments
|
120
|
|
|
—
|
|
||
Additions due to the acquisition of Ident Technology AG
|
17,375
|
|
|
—
|
|
||
Balance at March 31, 2012
|
74,313
|
|
|
19,200
|
|
||
Additions due to the acquisition of SMSC
|
169,065
|
|
|
—
|
|
||
Additions due to the acquisition of Roving Networks
|
8,652
|
|
|
—
|
|
||
Additions due to contingent consideration payments
|
118
|
|
|
—
|
|
||
Balance at March 31, 2013
|
$
|
252,148
|
|
|
$
|
19,200
|
|
13.
|
ACCRUED LIABILITIES
|
|
March 31, 2013
|
|
March 31, 2012
|
||||
Acquisition related contingent consideration
|
$
|
19,100
|
|
|
$
|
—
|
|
Other accrued expenses
|
108,008
|
|
|
88,877
|
|
||
|
$
|
127,108
|
|
|
$
|
88,877
|
|
14.
|
INCOME TAXES
|
|
Year Ended March 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Beginning balance
|
$
|
70,490
|
|
|
$
|
58,125
|
|
|
$
|
57,140
|
|
Increases related to acquisitions
|
45,624
|
|
|
—
|
|
|
36,587
|
|
|||
Decreases related to prior year tax positions
|
(5,751
|
)
|
|
(2,153
|
)
|
|
(49,932
|
)
|
|||
Increases related to current year tax positions
|
42,328
|
|
|
11,992
|
|
|
13,951
|
|
|||
Increases related to prior year tax positions
|
154
|
|
|
2,526
|
|
|
379
|
|
|||
Ending balance
|
$
|
152,845
|
|
|
$
|
70,490
|
|
|
$
|
58,125
|
|
|
Year Ended March 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Current (benefit) expense:
|
|
|
|
|
|
||||||
Federal
|
$
|
33,856
|
|
|
$
|
7,611
|
|
|
$
|
294
|
|
State
|
2,350
|
|
|
544
|
|
|
21
|
|
|||
Foreign
|
16,950
|
|
|
21,174
|
|
|
22,877
|
|
|||
Total current
|
$
|
53,156
|
|
|
29,329
|
|
|
23,192
|
|
||
Deferred expense (benefit):
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
(16,004
|
)
|
|
14,942
|
|
|
11,035
|
|
||
State
|
(1,111
|
)
|
|
1,067
|
|
|
788
|
|
|||
Foreign
|
(11,253
|
)
|
|
(2,348
|
)
|
|
(3,484
|
)
|
|||
Total deferred
|
(28,368
|
)
|
|
13,661
|
|
|
8,339
|
|
|||
|
$
|
24,788
|
|
|
$
|
42,990
|
|
|
$
|
31,531
|
|
|
Year Ended March 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Computed expected income tax provision
|
$
|
53,262
|
|
|
$
|
132,894
|
|
|
$
|
161,244
|
|
State income taxes, net of federal benefits
|
(2,054
|
)
|
|
1,280
|
|
|
1,746
|
|
|||
Research and development tax credits - current year
|
(8,263
|
)
|
|
(3,750
|
)
|
|
(3,691
|
)
|
|||
Research and development tax credits - prior years
|
(3,347
|
)
|
|
(5,894
|
)
|
|
—
|
|
|||
Foreign income taxed at lower than the federal rate
|
(52,317
|
)
|
|
(93,905
|
)
|
|
(92,166
|
)
|
|||
Increases related to current and prior year tax positions
|
37,507
|
|
|
12,365
|
|
|
14,330
|
|
|||
Decreases related to prior year tax positions
|
—
|
|
|
—
|
|
|
(49,932
|
)
|
|||
|
$
|
24,788
|
|
|
$
|
42,990
|
|
|
$
|
31,531
|
|
|
March 31,
|
||||||
|
2013
|
|
2012
|
||||
Deferred tax assets:
|
|
|
|
||||
Deferred intercompany profit
|
$
|
13,679
|
|
|
$
|
14,624
|
|
Deferred income on shipments to distributors
|
28,776
|
|
|
23,646
|
|
||
Inventory valuation
|
9,148
|
|
|
6,245
|
|
||
Net operating loss carryforward
|
77,959
|
|
|
33,639
|
|
||
Share-based compensation
|
27,757
|
|
|
25,693
|
|
||
Income tax credits
|
112,686
|
|
|
103,882
|
|
||
Accrued expenses and other
|
17,241
|
|
|
10,770
|
|
||
Gross deferred tax assets
|
287,246
|
|
|
218,499
|
|
||
Valuation allowances
|
(88,637
|
)
|
|
(78,506
|
)
|
||
Deferred tax assets, net of valuation allowances
|
198,609
|
|
|
139,993
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
||
Property, plant and equipment, principally due to differences in depreciation
|
(8,515
|
)
|
|
(7,844
|
)
|
||
Junior convertible debentures
|
(486,878
|
)
|
|
(445,826
|
)
|
||
Other
|
(10,779
|
)
|
|
(6,500
|
)
|
||
Deferred tax liabilities
|
(506,172
|
)
|
|
(460,170
|
)
|
||
Net deferred tax liability
|
$
|
(307,563
|
)
|
|
$
|
(320,177
|
)
|
|
|
|
|
||||
Reported as:
|
|
|
|
||||
Current deferred tax assets
|
$
|
80,687
|
|
|
$
|
91,191
|
|
Non-current deferred tax liability
|
(388,250
|
)
|
|
(411,368
|
)
|
||
Net deferred tax liability
|
(307,563
|
)
|
|
(320,177
|
)
|
16.
|
CREDIT FACILITY
|
17.
|
CONTINGENCIES
|
|
Year Ended March 31,
|
|||||||||||
|
2013
|
|
2012
|
|
2011
|
|
||||||
Cost of sales
|
$
|
8,234
|
|
(1)
|
$
|
5,648
|
|
(1)
|
$
|
6,825
|
|
(1)
|
Research and development
|
22,178
|
|
|
14,719
|
|
|
12,874
|
|
|
|||
Selling, general and administrative
|
27,603
|
|
|
17,922
|
|
|
17,113
|
|
|
|||
Pre-tax effect of share-based compensation
|
58,015
|
|
|
38,289
|
|
|
36,812
|
|
|
|||
Income tax benefit
|
9,038
|
|
|
4,889
|
|
|
4,493
|
|
|
|||
Net income effect of share-based compensation
|
$
|
48,977
|
|
|
$
|
33,400
|
|
|
$
|
32,319
|
|
|
|
Number of Shares
|
|
Nonvested shares at March 31, 2010
|
4,637,948
|
|
Granted
|
1,766,257
|
|
Forfeited/expired
|
(171,967
|
)
|
Vested
|
(990,932
|
)
|
Nonvested shares at March 31, 2011
|
5,241,306
|
|
Granted
|
1,627,191
|
|
Forfeited/expired
|
(184,926
|
)
|
Vested
|
(1,191,351
|
)
|
Nonvested shares at March 31, 2012
|
5,492,220
|
|
Granted
|
1,976,583
|
|
Assumed upon acquisition
|
523,043
|
|
Forfeited/expired
|
(370,196
|
)
|
Vested
|
(1,611,819
|
)
|
Nonvested shares at March 31, 2013
|
6,009,831
|
|
|
Number of
Shares
|
|
Weighted Average Exercise Price
per Share
|
|||
Outstanding at March 31, 2010
|
8,459,779
|
|
|
$
|
24.52
|
|
Granted
|
—
|
|
|
—
|
|
|
Exercised
|
(2,885,365
|
)
|
|
23.09
|
|
|
Canceled
|
(77,490
|
)
|
|
29.39
|
|
|
Outstanding at March 31, 2011
|
5,496,924
|
|
|
25.21
|
|
|
Granted
|
—
|
|
|
—
|
|
|
Exercised
|
(2,129,260
|
)
|
|
25.53
|
|
|
Canceled
|
(6,667
|
)
|
|
25.05
|
|
|
Outstanding at March 31, 2012
|
3,360,997
|
|
|
25.00
|
|
|
Granted
|
—
|
|
|
—
|
|
|
Assumed upon acquisition
|
827,707
|
|
|
19.32
|
|
|
Exercised
|
(1,638,548
|
)
|
|
22.19
|
|
|
Canceled
|
(280,353
|
)
|
|
19.90
|
|
|
Outstanding at March 31, 2013
|
2,269,803
|
|
|
$
|
25.58
|
|
Year Ending March 31,
|
|
Amount
|
||
2014
|
|
$
|
13,323
|
|
2015
|
|
11,510
|
|
|
2016
|
|
10,171
|
|
|
2017
|
|
8,910
|
|
|
2018
|
|
7,577
|
|
|
Thereafter
|
|
18,692
|
|
|
Total minimum payments
|
|
$
|
70,183
|
|
22.
|
GEOGRAPHIC AND SEGMENT INFORMATION
|
|
Years ended March 31,
|
||||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||||||||||||||
|
Net
Sales
|
|
Gross Profit
|
|
Net Sales
|
|
Gross Profit
|
|
Net Sales
|
|
Gross Profit
|
||||||||||||
Semiconductor products
|
$
|
1,497,820
|
|
|
$
|
754,656
|
|
|
$
|
1,296,175
|
|
|
$
|
712,798
|
|
|
$
|
1,415,137
|
|
|
$
|
809,183
|
|
Technology licensing
|
83,803
|
|
|
83,803
|
|
|
87,001
|
|
|
86,496
|
|
|
72,068
|
|
|
72,068
|
|
||||||
|
$
|
1,581,623
|
|
|
$
|
838,459
|
|
|
$
|
1,383,176
|
|
|
$
|
799,294
|
|
|
$
|
1,487,205
|
|
|
$
|
881,251
|
|
|
March 31,
|
||||||
|
2013
|
|
2012
|
||||
United States
|
$
|
325,326
|
|
|
$
|
314,339
|
|
Thailand
|
171,100
|
|
|
186,098
|
|
||
Various other countries
|
18,118
|
|
|
16,174
|
|
||
Total long-lived assets
|
$
|
514,544
|
|
|
$
|
516,611
|
|
23.
|
DERIVATIVE INSTRUMENTS
|
24.
|
NET INCOME PER COMMON SHARE
|
|
Year ended March 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net income from continuing operations
|
$
|
127,389
|
|
|
$
|
336,705
|
|
|
$
|
429,167
|
|
Weighted average common shares outstanding
|
194,595
|
|
|
191,283
|
|
|
187,066
|
|
|||
Dilutive effect of stock options and RSUs
|
3,650
|
|
|
4,207
|
|
|
4,463
|
|
|||
Dilutive effect of convertible debt
|
7,531
|
|
|
8,029
|
|
|
3,186
|
|
|||
Weighted average common and potential common shares outstanding
|
205,776
|
|
|
203,519
|
|
|
194,715
|
|
|||
Basic net income per common share – continuing operations
|
$
|
0.65
|
|
|
$
|
1.76
|
|
|
$
|
2.29
|
|
Diluted net income per common share – continuing operations
|
$
|
0.62
|
|
|
$
|
1.65
|
|
|
$
|
2.20
|
|
25.
|
QUARTERLY RESULTS (UNAUDITED)
|
Fiscal 2013
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
|
||||||||||
Net sales
|
|
$
|
352,134
|
|
|
$
|
383,298
|
|
|
$
|
416,047
|
|
|
$
|
430,144
|
|
|
$
|
1,581,623
|
|
Gross profit
|
|
204,797
|
|
|
194,195
|
|
|
200,428
|
|
|
239,039
|
|
|
838,459
|
|
|||||
Operating income
|
|
96,333
|
|
|
8,094
|
|
|
17,413
|
|
|
56,713
|
|
|
178,553
|
|
|||||
Net income
|
|
78,710
|
|
|
(21,184
|
)
|
|
10,173
|
|
|
59,690
|
|
|
127,389
|
|
|||||
Diluted net income per common share
|
|
0.39
|
|
|
(0.10
|
)
|
|
0.05
|
|
|
0.28
|
|
|
0.62
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fiscal 2012
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
|
||||||||||
Net sales
|
|
$
|
374,507
|
|
|
$
|
340,602
|
|
|
$
|
329,156
|
|
|
$
|
338,911
|
|
|
$
|
1,383,176
|
|
Gross profit
|
|
221,457
|
|
|
196,703
|
|
|
185,488
|
|
|
195,646
|
|
|
799,294
|
|
|||||
Operating income
|
|
116,860
|
|
|
97,620
|
|
|
88,127
|
|
|
93,909
|
|
|
396,516
|
|
|||||
Net income
|
|
99,293
|
|
|
79,287
|
|
|
77,489
|
|
|
80,636
|
|
|
336,705
|
|
|||||
Diluted net income per common share
|
|
0.49
|
|
|
0.40
|
|
|
0.38
|
|
|
0.39
|
|
|
1.65
|
|
|
Originally Reported
|
|
Adjustments
|
|
Revised
|
||||||
Fiscal 2013
|
|
|
|
|
|
||||||
First Quarter
|
$
|
203,079
|
|
|
$
|
1,718
|
|
|
$
|
204,797
|
|
|
|
|
|
|
|
||||||
Fiscal 2012
|
|
|
|
|
|
||||||
First Quarter
|
$
|
219,748
|
|
|
$
|
1,709
|
|
|
$
|
221,457
|
|
Second Quarter
|
194,994
|
|
|
1,709
|
|
|
196,703
|
|
|||
Third Quarter
|
183,779
|
|
|
1,709
|
|
|
185,488
|
|
|||
Fourth Quarter
|
193,873
|
|
|
1,773
|
|
|
195,646
|
|
|||
Fiscal 2012 Total
|
$
|
792,394
|
|
|
$
|
6,900
|
|
|
$
|
799,294
|
|
|
Balance at Beginning
of Year
|
|
Charged to
Costs and Expenses
|
|
Deductions
(1)
|
|
Balance at
End of Year
|
||||||||
Allowance for doubtful accounts:
|
|
|
|
|
|
|
|
||||||||
2013
|
$
|
2,602
|
|
|
$
|
516
|
|
|
$
|
(354
|
)
|
|
$
|
2,764
|
|
2012
|
2,838
|
|
|
7
|
|
|
(243
|
)
|
|
2,602
|
|
||||
2011
|
3,109
|
|
|
31
|
|
|
(302
|
)
|
|
2,838
|
|
(1)
|
Form S-3 No. 333-149999,
|
(2)
|
Form S-8 No. 33-59686,
|
(3)
|
Form S-8 No. 33-80072,
|
(4)
|
Form S-8 No. 33-81690,
|
(5)
|
Form S-8 No. 33-83196,
|
(6)
|
Form S-8 No. 333-872,
|
(7)
|
Form S-8 No. 333-40791,
|
(8)
|
Form S-8 No. 333-67215,
|
(9)
|
Form S-8 No. 333-93571,
|
(10)
|
Form S-8 No. 333-51322,
|
(11)
|
Form S-8 No. 333-53876,
|
(12)
|
Form S-8 No. 333-73506,
|
(13)
|
Form S-8 No. 333-96791,
|
(14)
|
Form S-8 No. 333-99655,
|
(15)
|
Form S-8 No. 333-101696,
|
(16)
|
Form S-8 No. 333-103764,
|
(17)
|
Form S-8 No. 333-109486,
|
(18)
|
Form S-8 No. 333-119939,
|
(19)
|
Form S-8 No. 333-140773,
|
(20)
|
Form S-8 No. 333-149460,
|
(21)
|
Form S-8 No. 333-177889, and
|
(22)
|
Form S-8 No. 333-183074;
|
1.
|
I have reviewed this Form 10-K of Microchip Technology Incorporated;
|
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 l5d-l5(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.
|
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.
|
Date:
|
|
May 30, 2013
|
/s/ Steve Sanghi
|
|
|
|
Steve Sanghi
|
|
|
|
President and CEO
|
1.
|
I have reviewed this Form 10-K of Microchip Technology Incorporated;
|
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 l5d-l5(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.
|
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.
|
Date:
|
|
May 30, 2013
|
/s/ J. Eric Bjornholt
|
|
|
|
J. Eric Bjornholt
|
|
|
|
Vice President and CFO
|
By:
|
/s/ Steve Sanghi
|
|
Name:
|
Steve Sanghi
|
|
Title:
|
President and Chief Executive Officer
|
|
Date:
|
May 30, 2013
|
By:
|
/s/ J. Eric Bjornholt
|
|
Name:
|
J. Eric Bjornholt
|
|
Title:
|
Vice President and Chief Financial Officer
|
|
Date:
|
May 30, 2013
|