Quarterly report pursuant to Section 13 or 15(d)

Financial Statement Components

v3.8.0.1
Financial Statement Components
6 Months Ended
Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
FINANCIAL STATEMENT COMPONENTS
NOTE 3 – FINANCIAL STATEMENT COMPONENTS
Balance Sheet Components
(In thousands)
As of
December 31, 2017
 
As of
June 30, 2017
Accounts receivable, net:
 
 
 
Accounts receivable, gross
$
752,618

 
$
592,753

Allowance for doubtful accounts
(11,715
)
 
(21,636
)
 
$
740,903

 
$
571,117

Inventories:
 
 
 
Customer service parts
$
248,937

 
$
245,172

Raw materials
248,475

 
240,389

Work-in-process
237,261

 
193,026

Finished goods
53,298

 
54,401

 
$
787,971

 
$
732,988

Other current assets:
 
 
 
Prepaid expenses
$
46,451

 
$
36,146

Other current assets
11,512

 
13,004

Income tax related receivables
8,966

 
22,071

 
$
66,929

 
$
71,221

Land, property and equipment, net:
 
 
 
Land
$
40,620

 
$
40,617

Buildings and leasehold improvements
323,143

 
319,306

Machinery and equipment
568,203

 
551,277

Office furniture and fixtures
21,909

 
21,328

Construction-in-process
7,214

 
4,597

 
961,089

 
937,125

Less: accumulated depreciation and amortization
(679,455
)
 
(653,150
)
 
$
281,634

 
$
283,975

Other non-current assets:
 
 
 
Executive Deferred Savings Plan(1)
$
192,169

 
$
182,150

Other non-current assets
19,146

 
13,526

 
$
211,315

 
$
195,676

Other current liabilities:
 
 
 
Compensation and benefits
$
222,503

 
$
172,707

Executive Deferred Savings Plan(1)
192,849

 
183,603

Customer credits and advances
116,856

 
95,188

Other accrued expenses
86,865

 
116,039

Warranty
45,013

 
45,458

Income taxes payable
22,525

 
17,040

Interest payable
17,008

 
19,396

 
$
703,619

 
$
649,431

Other non-current liabilities:
 
 
 
Income taxes payable
$
355,849

 
$
68,439

Pension liabilities
74,868

 
72,801

Other non-current liabilities
30,025

 
31,167

 
$
460,742

 
$
172,407



________________
(1)
KLA-Tencor has a non-qualified deferred compensation plan (known as “Executive Deferred Savings Plan”) under which certain executives and non-employee directors may defer a portion of their compensation. Participants are credited with returns based on their allocation of their account balances among measurement funds. The Company controls the investment of these funds, and the participants remain general creditors of the Company. The Company invests these funds in certain mutual funds and such investments are classified as trading securities in the condensed consolidated balance sheets. Distributions from the Executive Deferred Savings Plan commence following a participant’s retirement or termination of employment or on a specified date allowed per the Executive Deferred Savings Plan provisions, except in cases where such distributions are required to be delayed in order to avoid a prohibited distribution under Internal Revenue Code Section 409A. Participants can generally elect the distributions to be paid in lump sum or quarterly cash payments over a scheduled period for up to 15 years and are allowed to make subsequent changes to their existing elections as permissible under the Executive Deferred Savings Plan provisions. Changes in the Executive Deferred Savings Plan liability are recorded in selling, general and administrative expense in the condensed consolidated statements of operations. The expense associated with changes in the liability included in selling, general and administrative expense was $7.0 million and $1.2 million during the three months ended December 31, 2017 and 2016, respectively and $13.8 million and $7.0 million during the six months ended December 31, 2017 and 2016. Changes in the Executive Deferred Savings Plan assets are recorded as gains (losses), net in selling, general and administrative expense in the condensed consolidated statements of operations. The amount of net gains included in selling, general and administrative expense was $7.0 million and $0.8 million during the three months ended December 31, 2017 and 2016, respectively and $13.9 million and $6.7 million during the six months ended December 31, 2017 and 2016, respectively.
Accumulated Other Comprehensive Income (Loss)
The components of accumulated other comprehensive income (loss) (“OCI”) as of the dates indicated below were as follows:
(In thousands)
Currency Translation Adjustments
 
Unrealized Gains (Losses) on Available-for-Sale Securities
 
Unrealized Gains (Losses) on Cash Flow Hedges
 
Unrealized Gains (Losses) on Defined Benefit Plans
 
Total
Balance as of December 31, 2017
$
(26,614
)
 
$
(7,751
)
 
$
3,957

 
$
(22,114
)
 
$
(52,522
)
 
 
 
 
 
 
 
 
 
 
Balance as of June 30, 2017
$
(30,654
)
 
$
(3,869
)
 
$
5,221

 
$
(22,021
)
 
$
(51,323
)

The effects on net income (loss) of amounts reclassified from accumulated OCI to the Condensed Consolidated Statement of Operations for the indicated period were as follows (in thousands):
 
 
Location in the Condensed Consolidated
 
Three months ended
December 31,
 
Six months ended
December 31,
Accumulated OCI Components
 
Statements of Operations
 
2017
 
2016
 
2017
 
2016
Unrealized gains (losses) on cash flow hedges from foreign exchange and interest rate contracts
 
Revenues
 
$
397

 
$
(1,425
)
 
$
1,365

 
$
(2,906
)
 
 
Costs of revenues
 
377

 
(69
)
 
1,338

 
(156
)
 
 
Interest expense
 
189

 
189

 
378

 
378

 
 
Net gains (losses) reclassified from accumulated OCI
 
$
963

 
$
(1,305
)
 
$
3,081

 
$
(2,684
)
Unrealized gains (losses) on available-for-sale securities
 
Other expense (income), net
 
$
(69
)
 
$
30

 
$
(63
)
 
$
234


The amounts reclassified out of accumulated OCI related to the Company’s defined benefit pension plans, which were recognized as a component of net periodic cost for the three and six months ended December 31, 2017 were $0.4 million and $0.8 million, respectively. The amounts reclassified out of accumulated OCI related to the Company’s defined benefit pension plans, which were recognized as a component of net periodic cost for the three and six months ended December 31, 2016 were $0.9 million and $1.3 million, respectively. For additional details, refer to Note 11, “Employee Benefit Plans” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2017.