x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 94-2634797 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
4650 Cushing Parkway Fremont, California | 94538 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | x | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ | |||
Emerging growth company | ¨ |
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ITEM 1. | Financial Statements |
Three Months Ended | Six Months Ended | ||||||||||||||
December 24, 2017 | December 25, 2016 | December 24, 2017 | December 25, 2016 | ||||||||||||
Revenue | $ | 2,580,815 | $ | 1,882,299 | $ | 5,058,955 | $ | 3,514,718 | |||||||
Cost of goods sold | 1,375,248 | 1,035,502 | 2,704,045 | 1,951,724 | |||||||||||
Gross margin | 1,205,567 | 846,797 | 2,354,910 | 1,562,994 | |||||||||||
Research and development | 281,311 | 246,804 | 556,389 | 482,044 | |||||||||||
Selling, general, and administrative | 186,885 | 160,165 | 367,928 | 325,175 | |||||||||||
Total operating expenses | 468,196 | 406,969 | 924,317 | 807,219 | |||||||||||
Operating income | 737,371 | 439,828 | 1,430,593 | 755,775 | |||||||||||
Other expense, net | (3,152 | ) | (55,023 | ) | (8,654 | ) | (78,177 | ) | |||||||
Income before income taxes | 734,219 | 384,805 | 1,421,939 | 677,598 | |||||||||||
Income tax expense | (744,174 | ) | (52,014 | ) | (841,204 | ) | (80,972 | ) | |||||||
Net (loss) income | $ | (9,955 | ) | $ | 332,791 | $ | 580,735 | $ | 596,626 | ||||||
Net (loss) income per share: | |||||||||||||||
Basic | $ | (0.06 | ) | $ | 2.05 | $ | 3.59 | $ | 3.69 | ||||||
Diluted | $ | (0.06 | ) | $ | 1.81 | $ | 3.16 | $ | 3.28 | ||||||
Number of shares used in per share calculations: | |||||||||||||||
Basic | 161,135 | 162,659 | 161,638 | 161,633 | |||||||||||
Diluted | 161,135 | 183,543 | 183,958 | 181,780 | |||||||||||
Cash dividend declared per common share | $ | 0.50 | $ | 0.45 | $ | 0.95 | $ | 0.75 |
Three Months Ended | Six Months Ended | ||||||||||||||
December 24, 2017 | December 25, 2016 | December 24, 2017 | December 25, 2016 | ||||||||||||
Net (loss) income | $ | (9,955 | ) | $ | 332,791 | $ | 580,735 | $ | 596,626 | ||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Foreign currency translation adjustment | 5,239 | (14,428 | ) | 13,108 | (9,927 | ) | |||||||||
Cash flow hedges: | |||||||||||||||
Net unrealized gains during the period | 6,930 | 15,225 | 9,992 | 12,804 | |||||||||||
Net (gains) losses reclassified into earnings | (5,459 | ) | (502 | ) | (3,271 | ) | 11,448 | ||||||||
1,471 | 14,723 | 6,721 | 24,252 | ||||||||||||
Available-for-sale investments: | |||||||||||||||
Net unrealized losses during the period | (18,339 | ) | (13,585 | ) | (20,066 | ) | (16,308 | ) | |||||||
Net losses (gains) reclassified into earnings | 84 | 91 | (39 | ) | 994 | ||||||||||
(18,255 | ) | (13,494 | ) | (20,105 | ) | (15,314 | ) | ||||||||
Defined benefit plans, net change in unrealized component | 172 | 122 | (2,184 | ) | 245 | ||||||||||
Other comprehensive loss, net of tax | (11,373 | ) | (13,077 | ) | (2,460 | ) | (744 | ) | |||||||
Comprehensive (loss) income | $ | (21,328 | ) | $ | 319,714 | $ | 578,275 | $ | 595,882 |
December 24, 2017 | June 25, 2017 | ||||||
(unaudited) | (1) | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 1,745,173 | $ | 2,377,534 | |||
Investments | 3,954,526 | 3,663,628 | |||||
Accounts receivable, less allowance for doubtful accounts of $5,262 as of December 24, 2017, and $5,103 as of June 25, 2017 | 2,279,044 | 1,673,398 | |||||
Inventories | 1,507,435 | 1,232,916 | |||||
Prepaid expenses and other current assets | 179,944 | 195,022 | |||||
Total current assets | 9,666,122 | 9,142,498 | |||||
Property and equipment, net | 807,340 | 685,595 | |||||
Restricted cash and investments | 255,984 | 256,205 | |||||
Goodwill | 1,485,230 | 1,385,673 | |||||
Intangible assets, net | 380,929 | 410,995 | |||||
Other assets | 316,660 | 241,799 | |||||
Total assets | $ | 12,912,265 | $ | 12,122,765 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Trade accounts payable | $ | 421,788 | $ | 464,643 | |||
Accrued expenses and other current liabilities | 1,339,612 | 969,361 | |||||
Deferred profit | 748,635 | 607,672 | |||||
Current portion of convertible notes, and capital leases; and commercial paper | 1,401,660 | 908,439 | |||||
Total current liabilities | 3,911,695 | 2,950,115 | |||||
Long-term debt and capital leases, less current portion | 1,789,958 | 1,784,974 | |||||
Income taxes payable | 818,880 | 120,178 | |||||
Other long-term liabilities | 118,177 | 280,186 | |||||
Total liabilities | 6,638,710 | 5,135,453 | |||||
Commitments and contingencies | |||||||
Temporary equity, convertible notes | 130,424 | 169,861 | |||||
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; issued and outstanding, 159,451 shares at December 24, 2017, and 161,723 shares at June 25, 2017 | 159 | 162 | |||||
Additional paid-in capital | 5,959,945 | 5,845,485 | |||||
Treasury stock, at cost; 110,754 shares at December 24, 2017, and 105,569 shares at June 25, 2017 | (6,470,434 | ) | (5,216,187 | ) | |||
Accumulated other comprehensive loss | (64,160 | ) | (61,700 | ) | |||
Retained earnings | 6,717,621 | 6,249,691 | |||||
Total stockholders’ equity | 6,143,131 | 6,817,451 | |||||
Total liabilities and stockholders’ equity | $ | 12,912,265 | $ | 12,122,765 |
Six Months Ended | |||||||
December 24, 2017 | December 25, 2016 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 580,735 | $ | 596,626 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 159,040 | 151,627 | |||||
Deferred income taxes | (228,274 | ) | 42,248 | ||||
Equity-based compensation expense | 83,907 | 70,850 | |||||
Loss on extinguishment of debt | — | 36,325 | |||||
Amortization of note discounts and issuance costs | 9,127 | 13,032 | |||||
Other, net | 5,461 | 15,515 | |||||
Changes in operating assets and liabilities | 277,014 | (48,901 | ) | ||||
Net cash provided by operating activities | 887,010 | 877,322 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Capital expenditures and intangible assets | (144,757 | ) | (78,492 | ) | |||
Business acquisition, net of cash acquired | (115,697 | ) | — | ||||
Purchases of available-for-sale securities | (2,251,486 | ) | (2,370,910 | ) | |||
Sales and maturities of available-for-sale securities | 1,928,011 | 811,732 | |||||
Transfers of restricted cash and investments | 221 | (4,754 | ) | ||||
Other, net | (14,996 | ) | (8,041 | ) | |||
Net cash used for investing activities | (598,704 | ) | (1,650,465 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Principal payments on long-term debt and capital lease obligations and payments for debt issuance costs | (349,249 | ) | (1,616,641 | ) | |||
Net proceeds from commercial paper | 798,947 | — | |||||
Proceeds from borrowings on revolving credit facility | 750,000 | — | |||||
Repayments of borrowings on revolving credit facility | (750,000 | ) | — | ||||
Treasury stock purchases | (1,266,835 | ) | (69,522 | ) | |||
Dividends paid | (145,865 | ) | (96,449 | ) | |||
Reissuance of treasury stock related to employee stock purchase plan | 34,057 | 19,320 | |||||
Proceeds from issuance of common stock | 4,115 | 4,580 | |||||
Other, net | 4 | (54 | ) | ||||
Net cash used for financing activities | (924,826 | ) | (1,758,766 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 4,159 | (3,453 | ) | ||||
Net decrease in cash and cash equivalents | (632,361 | ) | (2,535,362 | ) | |||
Cash and cash equivalents at beginning of period | 2,377,534 | 5,039,322 | |||||
Cash and cash equivalents at end of period | $ | 1,745,173 | $ | 2,503,960 | |||
Schedule of non-cash transactions: | |||||||
Accrued payables for stock repurchases | — | 8,382 | |||||
Accrued payables for capital expenditures | 29,031 | 24,216 | |||||
Dividends payable | 79,743 | 73,338 | |||||
Transfers of inventory to property and equipment, net | 29,977 | 23,828 |
• | entities will be required to recognize all excess tax benefits or deficiencies as an income tax benefit or expense in the income statement, eliminating additional paid in capital (“APIC”) pools; |
• | entities will no longer be required to delay recognition of excess tax benefits until they are realized; |
• | entities will be required to classify the excess tax benefits as an operating activity in the statement of cash flows; |
• | entities will be allowed to elect an accounting policy to either estimate the number of forfeitures, or account for forfeitures as they occur; |
• | entities can withhold up to the maximum individual statutory tax rate without classifying the awards as a liability; and |
• | the cash paid to satisfy the statutory income tax withholding obligations shall be classified as a financing activity in the statement of cash flows. |
Three Months Ended | Six Months Ended | ||||||||||||||
December 24, 2017 | December 25, 2016 | December 24, 2017 | December 25, 2016 | ||||||||||||
(in thousands) | |||||||||||||||
Equity-based compensation expense | $ | 42,124 | $ | 32,255 | $ | 83,907 | $ | 70,850 | |||||||
Income tax benefit recognized related to equity-based compensation expense | $ | 18,089 | $ | 8,815 | $ | 31,477 | $ | 19,721 |
Three and Six Months Ended | |||||
December 24, 2017 | December 25, 2016 | ||||
Expected stock price volatility | 29.13 | % | 33.02 | % | |
Risk-free interest rate | 0.82 | % | 0.43 | % | |
Expected term (years) | 0.77 | 0.77 | |||
Dividend yield | 0.89 | % | 1.14 | % |
Three Months Ended | Six Months Ended | ||||||||||||||
December 24, 2017 | December 25, 2016 | December 24, 2017 | December 25, 2016 | ||||||||||||
(in thousands) | |||||||||||||||
Interest income | $ | 20,578 | $ | 10,945 | $ | 40,787 | $ | 23,708 | |||||||
Interest expense | (23,317 | ) | (26,641 | ) | (47,222 | ) | (68,070 | ) | |||||||
Gains on deferred compensation plan related assets, net | 6,074 | 1,666 | 9,527 | 7,838 | |||||||||||
Loss on extinguishment of debt | — | (36,325 | ) | — | (36,325 | ) | |||||||||
Foreign exchange (losses) gains, net | 1,196 | 1,011 | (1,804 | ) | 2,230 | ||||||||||
Other, net | (7,683 | ) | (5,679 | ) | (9,942 | ) | (7,558 | ) | |||||||
$ | (3,152 | ) | $ | (55,023 | ) | $ | (8,654 | ) | $ | (78,177 | ) |
Three Months Ended | Six Months Ended | ||||||||||||||
December 24, 2017 | December 25, 2016 | December 24, 2017 | December 25, 2016 | ||||||||||||
(in thousands, except per share data) | |||||||||||||||
Numerator: | |||||||||||||||
Net (loss) income | $ | (9,955 | ) | $ | 332,791 | $ | 580,735 | $ | 596,626 | ||||||
Denominator: | |||||||||||||||
Basic average shares outstanding | 161,135 | 162,659 | 161,638 | 161,633 | |||||||||||
Effect of potential dilutive securities: | |||||||||||||||
Employee stock plans | — | 2,243 | 2,636 | 2,193 | |||||||||||
Convertible notes | — | 16,640 | 15,287 | 15,930 | |||||||||||
Warrants | — | 2,001 | 4,397 | 2,024 | |||||||||||
Diluted average shares outstanding | 161,135 | 183,543 | 183,958 | 181,780 | |||||||||||
Net (loss) income per share - basic | $ | (0.06 | ) | $ | 2.05 | $ | 3.59 | $ | 3.69 | ||||||
Net (loss) income per share - diluted | $ | (0.06 | ) | $ | 1.81 | $ | 3.16 | $ | 3.28 |
Three Months Ended | Six Months Ended | ||||||||||
December 24, 2017 | December 25, 2016 | December 24, 2017 | December 25, 2016 | ||||||||
(in thousands) | |||||||||||
Options and RSUs | 7 | — | 20 | 3 | |||||||
Employee stock plans | 2,757 | — | — | — | |||||||
Convertible notes | 15,423 | — | — | — | |||||||
Warrants | 4,721 | — | — | — |
December 24, 2017 | |||||||||||||||||||||||||||||||
(Reported Within) | |||||||||||||||||||||||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Value | Cash and Cash Equivalents | Investments | Restricted Cash & Investments | Other Assets | ||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||
Cash | $ | 594,353 | $ | — | $ | — | $ | 594,353 | $ | 588,396 | $ | — | $ | 5,957 | $ | — | |||||||||||||||
Level 1: | |||||||||||||||||||||||||||||||
Time deposit | 521,265 | — | — | 521,265 | 271,238 | — | 250,027 | — | |||||||||||||||||||||||
Money market funds | 878,732 | — | — | 878,732 | 878,732 | — | — | — | |||||||||||||||||||||||
U.S. Treasury and agencies | 835,112 | — | (9,028 | ) | 826,084 | 2,199 | 823,885 | — | — | ||||||||||||||||||||||
Mutual funds | 58,307 | 3,844 | — | 62,151 | — | — | — | 62,151 | |||||||||||||||||||||||
Level 1 Total | 2,293,416 | 3,844 | (9,028 | ) | 2,288,232 | 1,152,169 | 823,885 | 250,027 | 62,151 | ||||||||||||||||||||||
Level 2: | |||||||||||||||||||||||||||||||
Municipal notes and bonds | 179,475 | 10 | (649 | ) | 178,836 | — | 178,836 | — | — | ||||||||||||||||||||||
Government-sponsored enterprises | 47,925 | — | (602 | ) | 47,323 | — | 47,323 | — | — | ||||||||||||||||||||||
Foreign government bonds | 61,006 | — | (490 | ) | 60,516 | — | 60,516 | — | — | ||||||||||||||||||||||
Corporate notes and bonds | 2,686,080 | 849 | (12,781 | ) | 2,674,148 | 4,608 | 2,669,540 | — | — | ||||||||||||||||||||||
Mortgage backed securities — residential | 53,506 | 24 | (325 | ) | 53,205 | — | 53,205 | — | — | ||||||||||||||||||||||
Mortgage backed securities — commercial | 121,950 | — | (729 | ) | 121,221 | — | 121,221 | — | — | ||||||||||||||||||||||
Level 2 Total | 3,149,942 | 883 | (15,576 | ) | 3,135,249 | 4,608 | 3,130,641 | — | — | ||||||||||||||||||||||
Total | $ | 6,037,711 | $ | 4,727 | $ | (24,604 | ) | $ | 6,017,834 | $ | 1,745,173 | $ | 3,954,526 | $ | 255,984 | $ | 62,151 |
June 25, 2017 | |||||||||||||||||||||||||||||||
(Reported Within) | |||||||||||||||||||||||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Value | Cash and Cash Equivalents | Investments | Restricted Cash & Investments | Other Assets | ||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||
Cash | $ | 551,308 | $ | — | $ | — | $ | 551,308 | $ | 545,130 | $ | — | $ | 6,178 | $ | — | |||||||||||||||
Level 1: | |||||||||||||||||||||||||||||||
Time deposit | 640,666 | — | — | 640,666 | 390,639 | — | 250,027 | — | |||||||||||||||||||||||
Money market funds | 1,423,417 | — | — | 1,423,417 | 1,423,417 | — | — | — | |||||||||||||||||||||||
U.S. Treasury and agencies | 783,848 | 684 | (2,111 | ) | 782,421 | 8,297 | 774,124 | — | — | ||||||||||||||||||||||
Mutual funds | 53,247 | 3,007 | — | 56,254 | — | — | — | 56,254 | |||||||||||||||||||||||
Level 1 Total | 2,901,178 | 3,691 | (2,111 | ) | 2,902,758 | 1,822,353 | 774,124 | 250,027 | 56,254 | ||||||||||||||||||||||
Level 2: | |||||||||||||||||||||||||||||||
Municipal notes and bonds | 194,575 | 308 | (7 | ) | 194,876 | — | 194,876 | — | — | ||||||||||||||||||||||
U.S. Treasury and agencies | 12,795 | — | (167 | ) | 12,628 | — | 12,628 | — | — | ||||||||||||||||||||||
Government-sponsored enterprises | 24,502 | — | (6 | ) | 24,496 | — | 24,496 | — | — | ||||||||||||||||||||||
Foreign government bonds | 62,917 | 219 | (114 | ) | 63,022 | — | 63,022 | — | — | ||||||||||||||||||||||
Corporate notes and bonds | 2,433,622 | 4,654 | (1,840 | ) | 2,436,436 | 10,051 | 2,426,385 | — | — | ||||||||||||||||||||||
Mortgage backed securities — residential | 102,760 | 87 | (489 | ) | 102,358 | — | 102,358 | — | — | ||||||||||||||||||||||
Mortgage backed securities — commercial | 65,828 | 9 | (98 | ) | 65,739 | — | 65,739 | — | — | ||||||||||||||||||||||
Level 2 Total | 2,896,999 | 5,277 | (2,721 | ) | 2,899,555 | 10,051 | 2,889,504 | — | — | ||||||||||||||||||||||
Total | $ | 6,349,485 | $ | 8,968 | $ | (4,832 | ) | $ | 6,353,621 | $ | 2,377,534 | $ | 3,663,628 | $ | 256,205 | $ | 56,254 |
December 24, 2017 | |||||||||||||||||||||||
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 | $ | 659,453 | $ | (6,546 | ) | $ | 161,386 | $ | (2,482 | ) | $ | 820,839 | $ | (9,028 | ) | ||||||||
Municipal notes and bonds | 168,189 | (649 | ) | — | — | 168,189 | (649 | ) | |||||||||||||||
Government-sponsored enterprises | 27,681 | (163 | ) | 19,533 | (439 | ) | 47,214 | (602 | ) | ||||||||||||||
Foreign government bonds | 51,879 | (382 | ) | 8,425 | (108 | ) | 60,304 | (490 | ) | ||||||||||||||
Corporate notes and bonds | 2,160,923 | (11,215 | ) | 152,403 | (1,566 | ) | 2,313,326 | (12,781 | ) | ||||||||||||||
Mortgage backed securities — residential | 46,771 | (309 | ) | 1,789 | (16 | ) | 48,560 | (325 | ) | ||||||||||||||
Mortgage backed securities — commercial | 115,554 | (674 | ) | 5,401 | (55 | ) | 120,955 | (729 | ) | ||||||||||||||
$ | 3,230,450 | $ | (19,938 | ) | $ | 348,937 | $ | (4,666 | ) | $ | 3,579,387 | $ | (24,604 | ) |
Cost | Estimated Fair Value | ||||||
(in thousands) | |||||||
Due in one year or less | $ | 1,995,451 | $ | 1,994,497 | |||
Due after one year through five years | 3,217,096 | 3,195,218 | |||||
Due in more than five years | 172,504 | 171,615 | |||||
$ | 5,385,051 | $ | 5,361,330 |
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 | $ | — | $ | 512,577 | $ | — | $ | 141,737 | |||||||
Euro | 69,649 | — | 33,044 | — | |||||||||||
Korean won | 33,693 | — | — | 73,282 | |||||||||||
Taiwan dollar | — | — | 20,047 | — | |||||||||||
Swiss franc | — | — | 15,225 | — | |||||||||||
Chinese renminbi | — | — | 7,529 | — | |||||||||||
Singapore dollar | — | — | 7,410 | — | |||||||||||
British pound sterling | — | — | 4,019 | — | |||||||||||
$ | 103,342 | $ | 512,577 | $ | 87,274 | $ | 215,019 | ||||||||
Foreign currency option contracts | |||||||||||||||
Buy Put | Sell Put | Buy Put | Sell Put | ||||||||||||
Japanese yen | $ | 36,036 | $ | — | $ | — | $ | — |
December 24, 2017 | June 25, 2017 | ||||||||||||||||||||||
Fair Value of Derivative Instruments (Level 2) | Fair Value of Derivative Instruments (Level 2) | ||||||||||||||||||||||
Asset Derivatives | Liability Derivatives | Asset Derivatives | Liability Derivatives | ||||||||||||||||||||
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 | $ | 9,687 | Accrued expenses and other current liabilities | $ | 331 | Prepaid expense and other assets | $ | 8,061 | Accrued expenses and other current liabilities | $ | 2,916 | |||||||||||
Interest rate contracts, short-term | Accrued expenses and other current liabilities | 4,662 | Accrued expenses and other current liabilities | 2,833 | |||||||||||||||||||
Interest rate contracts, long-term | Other long-term liabilities | 14,520 | Other long-term liabilities | 7,269 | |||||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
Foreign exchange contracts | Prepaid expense and other assets | 51 | Accrued expenses and other current liabilities | 118 | Prepaid expense and other assets | 213 | Accrued expenses and other current liabilities | 342 | |||||||||||||||
Total Derivatives | $ | 9,738 | $ | 19,631 | $ | 8,274 | $ | 13,360 |
Three Months Ended December 24, 2017 | Six Months Ended December 24, 2017 | |||||||||||||||||||||||
Effective Portion | Ineffective Portion and Amount Excluded from Effectiveness | Effective Portion | Ineffective Portion and Amount Excluded from Effectiveness | |||||||||||||||||||||
Derivatives Designated as Hedging Instruments | 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 Income | Gain Recognized in AOCI | (Loss) Gain Reclassified from AOCI into Income | Gain (Loss) Recognized in Income | |||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Foreign Exchange Contracts | Revenue | $ | 8,194 | $ | 3,771 | $ | 1,225 | $ | 8,185 | $ | (35 | ) | $ | 3,772 | ||||||||||
Foreign Exchange Contracts | Cost of goods sold | (250 | ) | 1,648 | (139 | ) | 2,193 | 2,472 | (347 | ) | ||||||||||||||
Foreign Exchange Contracts | Selling, general, and administrative | (206 | ) | 1,012 | (49 | ) | 1,150 | 1,726 | (166 | ) | ||||||||||||||
Foreign Exchange Contracts | Other expense, net | — | — | (35 | ) | — | — | (52 | ) | |||||||||||||||
Interest Rate Contracts | Other expense, net | — | (31 | ) | — | — | (62 | ) | — | |||||||||||||||
$ | 7,738 | $ | 6,400 | $ | 1,002 | $ | 11,528 | $ | 4,101 | $ | 3,207 |
Three Months Ended December 25, 2016 | Six Months Ended December 25, 2016 | |||||||||||||||||||||||
Effective Portion | Ineffective Portion and Amount Excluded from Effectiveness | Effective Portion | Ineffective Portion and Amount Excluded from Effectiveness | |||||||||||||||||||||
Derivatives Designated as Hedging Instruments | Location of Gain (Loss) Recognized in or Reclassified into Income | Gain (Loss) Recognized in AOCI | (Loss) Gain Reclassified from AOCI into Income | Gain (Loss) Recognized in Income | Gain (Loss) Recognized in AOCI | (Loss) Gain Reclassified from AOCI into Income | Gain (Loss) Recognized in Income | |||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Foreign Exchange Contracts | Revenue | $ | 18,138 | $ | (420 | ) | $ | 708 | $ | 15,225 | $ | (14,025 | ) | $ | 1,413 | |||||||||
Foreign Exchange Contracts | Cost of goods sold | (786 | ) | (180 | ) | (28 | ) | (551 | ) | (7 | ) | (95 | ) | |||||||||||
Foreign Exchange Contracts | Selling, general, and administrative | (348 | ) | (146 | ) | (15 | ) | (372 | ) | (155 | ) | (36 | ) | |||||||||||
Foreign Exchange Contracts | Other expense, net | — | — | 3 | — | — | 3 | |||||||||||||||||
Interest Rate Contracts | Other expense, net | — | 1,778 | — | — | 1,787 | — | |||||||||||||||||
$ | 17,004 | $ | 1,032 | $ | 668 | $ | 14,302 | $ | (12,400 | ) | $ | 1,285 |
Three Months Ended | Six Months Ended | |||||||||||||||
December 24, 2017 | December 25, 2016 | December 24, 2017 | December 25, 2016 | |||||||||||||
Derivatives Not Designated as Hedging Instruments: | Location of Gain Recognized in Income | Gain Recognized in Income | Gain Recognized in Income | Gain Recognized in Income | Gain Recognized in Income | |||||||||||
(in thousands) | ||||||||||||||||
Foreign Exchange Contracts | Other income | $ | 2,612 | $ | 4,343 | $ | 5,284 | $ | 3,960 |
December 24, 2017 | June 25, 2017 | ||||||
(in thousands) | |||||||
Raw materials | $ | 820,157 | $ | 625,600 | |||
Work-in-process | 263,910 | 213,066 | |||||
Finished goods | 423,368 | 394,250 | |||||
$ | 1,507,435 | $ | 1,232,916 |
December 24, 2017 | June 25, 2017 | ||||||||||||||||||||||
Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Customer relationships | $ | 630,237 | $ | (400,189 | ) | $ | 230,048 | $ | 615,164 | $ | (366,439 | ) | $ | 248,725 | |||||||||
Existing technology | 669,559 | (531,632 | ) | 137,927 | 643,196 | (487,056 | ) | 156,140 | |||||||||||||||
Patents | 37,953 | (32,507 | ) | 5,446 | 36,553 | (31,238 | ) | 5,315 | |||||||||||||||
Other intangible assets | 43,814 | (36,306 | ) | 7,508 | 36,514 | (35,699 | ) | 815 | |||||||||||||||
Total intangible assets | $ | 1,381,563 | $ | (1,000,634 | ) | $ | 380,929 | $ | 1,331,427 | $ | (920,432 | ) | $ | 410,995 |
Fiscal Year | Amount | ||
(in thousands) | |||
2018 (remaining 6 months) | $ | 80,490 | |
2019 | 123,610 | ||
2020 | 58,478 | ||
2021 | 55,792 | ||
2022 | 52,001 | ||
Thereafter | 10,558 | ||
$ | 380,929 |
December 24, 2017 | June 25, 2017 | ||||||
(in thousands) | |||||||
Accrued compensation | $ | 556,110 | $ | 447,363 | |||
Warranty reserves | 179,680 | 161,981 | |||||
Income and other taxes payable | 310,810 | 95,127 | |||||
Dividend payable | 79,743 | 72,738 | |||||
Other | 213,269 | 192,152 | |||||
$ | 1,339,612 | $ | 969,361 | ||||
December 24, 2017 | June 25, 2017 | ||||||||||||
Amount (in thousands) | Effective Interest Rate | Amount (in thousands) | Effective Interest Rate | ||||||||||
Fixed-rate 1.25% Convertible Notes Due May 15, 2018 ("2018 Notes") | $ | 206,124 | (1) | 5.27 | % | $ | 447,436 | (2) | 5.27 | % | |||
Fixed-rate 2.75% Senior Notes Due March 15, 2020 ("2020 Notes") | 500,000 | 2.88 | % | 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 2.625% Convertible Notes Due May 15, 2041 ("2041 Notes") | 526,136 | (1) | 4.28 | % | 631,074 | (2) | 4.28 | % | |||||
Commercial paper | 800,000 | 1.64 | % | (3) | — | — | |||||||
Total debt outstanding, at par | 3,332,260 | 2,878,510 | |||||||||||
Unamortized discount | (138,651 | ) | (178,589 | ) | |||||||||
Fair value adjustment - interest rate contracts | (19,182 | ) | (10,102 | ) | |||||||||
Unamortized bond issuance costs | (2,434 | ) | (3,161 | ) | |||||||||
Total debt outstanding, at carrying value | $ | 3,171,993 | $ | 2,686,658 | |||||||||
Reported as: | |||||||||||||
Current portion of long-term debt, and commercial paper | $ | 1,401,015 | (4) | $ | 907,827 | (4) | |||||||
Long-term debt | 1,770,978 | 1,778,831 | |||||||||||
Total debt outstanding, at carrying value | $ | 3,171,993 | $ | 2,686,658 |
December 24, 2017 | June 25, 2017 | ||||||||||||||
2018 Notes | 2041 Notes | 2018 Notes | 2041 Notes | ||||||||||||
(in thousands, except years, percentages, conversion rate, and conversion price) | |||||||||||||||
Carrying amount of permanent equity component, net of tax | $ | 94,516 | $ | 158,007 | $ | 89,604 | $ | 156,374 | |||||||
Carrying amount of temporary equity component, net of tax | $ | 3,037 | $ | 127,387 | $ | 15,186 | $ | 154,675 | |||||||
Remaining amortization period (years) | 0.3 | 23.3 | 0.8 | 23.8 | |||||||||||
Fair Value of Notes (Level 2) | $ | 642,049 | $ | 2,943,299 | |||||||||||
Conversion rate (shares of common stock per $1,000 principal amount of notes) | 16.6603 | 29.8987 | |||||||||||||
Conversion price (per share of common stock) | $ | 60.02 | $ | 33.45 | |||||||||||
If-converted value in excess of par value | $ | 434,986 | $ | 2,410,644 | |||||||||||
Estimated share dilution using average quarterly stock price $195.72 per share | 2,381 | 13,042 |
2018 Notes | ||
(shares in thousands) | ||
Warrants: | ||
Underlying shares | 7,497 | |
Estimated share dilution using average quarterly stock price $195.72 per share | 4,721 | |
Exercise price | $72.48 | |
Expiration date range | August 15 - October 24, 2018 | |
Convertible Note Hedge: | ||
Number of shares available from counterparties | 3,434 | |
Exercise price | $60.02 |
Remaining Amortization period | Fair Value of Notes (Level 2) | ||||
(years) | (in thousands) | ||||
2020 Notes | 2.2 | $ | 503,330 | ||
2021 Notes | 3.5 | $ | 804,120 | ||
2025 Notes | 7.2 | $ | 518,060 |
Three Months Ended | Six Months Ended | ||||||||||||||
December 24, 2017 | December 25, 2016 | December 24, 2017 | December 25, 2016 | ||||||||||||
(in thousands) | |||||||||||||||
Contractual interest coupon | $ | 18,627 | $ | 22,622 | $ | 36,583 | $ | 57,334 | |||||||
Amortization of interest discount | 3,410 | 5,673 | 7,514 | 11,587 | |||||||||||
Amortization of issuance costs | 544 | 531 | 1,029 | 1,449 | |||||||||||
Effect of interest rate contracts, net | (254 | ) | (2,566 | ) | (603 | ) | (3,624 | ) | |||||||
Total interest cost recognized | $ | 22,327 | $ | 26,260 | $ | 44,523 | $ | 66,746 |
Three Months Ended | Six Months Ended | ||||||||||||||
December 24, 2017 | December 25, 2016 | December 24, 2017 | December 25, 2016 | ||||||||||||
(in thousands) | |||||||||||||||
Balance at beginning of period | $ | 168,337 | $ | 103,226 | $ | 161,981 | $ | 100,321 | |||||||
Warranties issued during the period | 57,698 | 41,544 | 106,488 | 76,399 | |||||||||||
Settlements made during the period | (44,347 | ) | (32,747 | ) | (88,400 | ) | (64,975 | ) | |||||||
Changes in liability for pre-existing warranties | (2,008 | ) | 7,311 | (389 | ) | 7,589 | |||||||||
Balance at end of period | $ | 179,680 | $ | 119,334 | $ | 179,680 | $ | 119,334 |
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 25, 2017 | $ | 282,141 | ||||||||||||
Quarter ended September 24, 2017 | 1,779 | $ | 157,938 | $ | 158.40 | $ | 124,203 | |||||||
Board authorization $2.0 billion increase, November 2017 | $ | 2,124,203 | ||||||||||||
Quarter ended December 24, 2017 | 3,709 | $ | 1,089,744 | $ | 196.28 | $ | 1,034,459 |
Accumulated Foreign Currency Translation Adjustment | Accumulated Unrealized Holding Gain (Loss) on Cash flow hedges | Accumulated Unrealized Holding Gain (Loss) on Available-For-Sale Investments | Accumulated Unrealized Components of Defined Benefit Plans | Total | |||||||||||||||
(in thousands) | |||||||||||||||||||
Balance as of June 25, 2017 | $ | (42,371 | ) | $ | (811 | ) | $ | 1,106 | $ | (19,624 | ) | $ | (61,700 | ) | |||||
Other comprehensive income (loss) before reclassifications | 9,174 | 9,992 | (20,066 | ) | (2,184 | ) | (3,084 | ) | |||||||||||
Losses (income) reclassified from accumulated other comprehensive income (loss) to net (loss) income | 3,934 | (1) | (3,271 | ) | (2) | (39 | ) | (1) | — | 624 | |||||||||
Net current-period other comprehensive income (loss) | $ | 13,108 | $ | 6,721 | $ | (20,105 | ) | $ | (2,184 | ) | $ | (2,460 | ) | ||||||
Balance as of December 24, 2017 | $ | (29,263 | ) | $ | 5,910 | $ | (18,999 | ) | $ | (21,808 | ) | $ | (64,160 | ) |
Preliminary Purchase Price Allocation | |||
(In thousands) | |||
Intangible assets | $ | 48,500 | |
Assets acquired (including cash of $8.7 million) | 11,484 | ||
Goodwill | 99,144 | ||
Liabilities assumed | (21,517 | ) | |
Fair value of net assets acquired | $ | 137,611 |
Fair Value | Weighted-Average Estimated Useful Life | ||||
(In thousands) | (In years) | ||||
Existing technology | $ | 26,200 | 6.0 | ||
Customer relationships | 15,000 | 6.0 | |||
Trade names and other intangible assets | 7,300 | 6.4 | |||
Total identified intangible assets | $ | 48,500 | 6.0 |
ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended | |||||||||||
December 24, 2017 | September 24, 2017 | December 25, 2016 | |||||||||
(in thousands, except per share data and percentages) | |||||||||||
Revenue | $ | 2,580,815 | $ | 2,478,140 | $ | 1,882,299 | |||||
Gross margin | $ | 1,205,567 | $ | 1,149,343 | $ | 846,797 | |||||
Gross margin as a percent of total revenue | 46.7 | % | 46.4 | % | 45.0 | % | |||||
Total operating expenses | $ | 468,196 | $ | 456,121 | $ | 406,969 | |||||
Net (loss) income | $ | (9,955 | ) | $ | 590,690 | $ | 332,791 | ||||
Diluted net (loss) income per share | $ | (0.06 | ) | $ | 3.21 | $ | 1.81 |
Three Months Ended | |||||||||||
December 24, 2017 | September 24, 2017 | December 25, 2016 | |||||||||
Shipments (in millions) | $ | 2,632 | $ | 2,382 | $ | 1,923 | |||||
Korea | 32 | % | 38 | % | 25 | % | |||||
Japan | 14 | % | 19 | % | 12 | % | |||||
Taiwan | 15 | % | 15 | % | 37 | % | |||||
China | 14 | % | 10 | % | 8 | % | |||||
United States | 10 | % | 8 | % | 8 | % | |||||
Southeast Asia | 10 | % | 5 | % | 4 | % | |||||
Europe | 5 | % | 5 | % | 6 | % |
Three Months Ended | ||||||||
December 24, 2017 | September 24, 2017 | December 25, 2016 | ||||||
Memory | 77 | % | 66 | % | 61 | % | ||
Foundry | 15 | % | 21 | % | 31 | % | ||
Logic/integrated device manufacturing | 8 | % | 13 | % | 8 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||
December 24, 2017 | September 24, 2017 | December 25, 2016 | December 24, 2017 | December 25, 2016 | |||||||||||||||
Revenue (in millions) | $ | 2,581 | $ | 2,478 | $ | 1,882 | $ | 5,059 | $ | 3,515 | |||||||||
Korea | 30 | % | 38 | % | 26 | % | 34 | % | 25 | % | |||||||||
Japan | 16 | % | 20 | % | 8 | % | 18 | % | 11 | % | |||||||||
Taiwan | 15 | % | 14 | % | 37 | % | 15 | % | 32 | % | |||||||||
China | 11 | % | 14 | % | 10 | % | 12 | % | 12 | % | |||||||||
United States | 11 | % | 6 | % | 7 | % | 9 | % | 7 | % | |||||||||
Southeast Asia | 11 | % | 5 | % | 5 | % | 7 | % | 8 | % | |||||||||
Europe | 6 | % | 3 | % | 7 | % | 5 | % | 5 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||
December 24, 2017 | September 24, 2017 | December 25, 2016 | December 24, 2017 | December 25, 2016 | |||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||
Gross margin | $ | 1,205,567 | $ | 1,149,343 | $ | 846,797 | $ | 2,354,910 | $ | 1,562,994 | |||||||||
Percent of total revenue | 46.7 | % | 46.4 | % | 45.0 | % | 46.5 | % | 44.5 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||
December 24, 2017 | September 24, 2017 | December 25, 2016 | December 24, 2017 | December 25, 2016 | |||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||
Research & development (“R&D”) | $ | 281,311 | $ | 275,078 | $ | 246,804 | $ | 556,389 | $ | 482,044 | |||||||||
Percent of total revenue | 10.9 | % | 11.1 | % | 13.1 | % | 11.0 | % | 13.7 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||
December 24, 2017 | September 24, 2017 | December 25, 2016 | December 24, 2017 | December 25, 2016 | |||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||
Selling, general, and administrative | $ | 186,885 | $ | 181,043 | $ | 160,165 | $ | 367,928 | $ | 325,175 | |||||||||
Percent of total revenue | 7.2 | % | 7.3 | % | 8.5 | % | 7.3 | % | 9.3 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||
December 24, 2017 | September 24, 2017 | December 25, 2016 | December 24, 2017 | December 25, 2016 | |||||||||||||||
(in thousands) | |||||||||||||||||||
Interest income | $ | 20,578 | $ | 20,209 | $ | 10,945 | $ | 40,787 | $ | 23,708 | |||||||||
Interest expense | (23,317 | ) | (23,905 | ) | (26,641 | ) | (47,222 | ) | (68,070 | ) | |||||||||
Gains on deferred compensation plan related assets, net | 6,074 | 3,453 | 1,666 | 9,527 | 7,838 | ||||||||||||||
Loss on extinguishment of debt | — | — | (36,325 | ) | — | (36,325 | ) | ||||||||||||
Foreign exchange gains (losses), net | 1,196 | (3,000 | ) | 1,011 | (1,804 | ) | 2,230 | ||||||||||||
Other, net | (7,683 | ) | (2,259 | ) | (5,679 | ) | (9,942 | ) | (7,558 | ) | |||||||||
$ | (3,152 | ) | $ | (5,502 | ) | $ | (55,023 | ) | $ | (8,654 | ) | $ | (78,177 | ) |
Three Months Ended | Six Months Ended | ||||||||||||||||||
December 24, 2017 | September 24, 2017 | December 25, 2016 | December 24, 2017 | December 25, 2016 | |||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||
Income tax expense | $ | 744,174 | $ | 97,030 | $ | 52,014 | $ | 841,204 | $ | 80,972 | |||||||||
Effective tax rate | 101.4 | % | 14.1 | % | 13.5 | % | 59.2 | % | 11.9 | % |
• | the recognition and valuation of revenue from multiple-element arrangements, which impacts revenue; |
• | the valuation of inventory, which impacts gross margin; |
• | the valuation of warranty reserves, which impacts gross margin; |
• | the valuation of equity-based compensation expense, including forfeiture estimates, which impacts both gross margin and operating expenses; |
• | 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 | $ | 580.7 | |
Non-cash charges: | |||
Depreciation and amortization | 159.0 | ||
Equity-based compensation | 83.9 | ||
Deferred income taxes | (228.3 | ) | |
Amortization of note discounts and issuance costs | 9.1 | ||
Changes in operating asset and liability accounts | 277.0 | ||
Other | 5.6 | ||
$ | 887.0 |
ITEM 3. | Quantitative and Qualitative Disclosures about Market Risk |
Valuation of Securities Given an Interest Rate Decrease of X Basis Points | Fair Value as of December 24, 2017 | Valuation of Securities Given an Interest Rate Increase of X Basis Points | |||||||||||||||||||||||||
(150 BPS) | (100 BPS) | (50 BPS) | 0.00% | 50 BPS | 100 BPS | 150 BPS | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Time deposit | $ | 521,265 | $ | 521,265 | $ | 521,265 | $ | 521,265 | $ | 521,265 | $ | 521,265 | $ | 521,265 | |||||||||||||
U.S. Treasury and agencies | 855,503 | 845,703 | 835,893 | 826,084 | 816,277 | 806,471 | 796,668 | ||||||||||||||||||||
Municipal notes and bonds | 181,905 | 180,891 | 179,863 | 178,836 | 177,808 | 176,781 | 175,754 | ||||||||||||||||||||
Government-sponsored enterprises | 48,840 | 48,334 | 47,828 | 47,323 | 46,817 | 46,312 | 45,807 | ||||||||||||||||||||
Foreign government bonds | 62,333 | 61,727 | 61,122 | 60,516 | 59,910 | 59,305 | 58,699 | ||||||||||||||||||||
Bank and corporate notes | 2,743,690 | 2,720,516 | 2,697,341 | 2,674,148 | 2,650,943 | 2,627,741 | 2,604,542 | ||||||||||||||||||||
Mortgage backed securities - residential | 55,161 | 54,511 | 53,858 | 53,205 | 52,551 | 51,898 | 51,244 | ||||||||||||||||||||
Mortgage backed securities - commercial | 123,691 | 122,868 | 122,045 | 121,221 | 120,399 | 119,576 | 118,753 | ||||||||||||||||||||
Total | $ | 4,592,388 | $ | 4,555,815 | $ | 4,519,215 | $ | 4,482,598 | $ | 4,445,970 | $ | 4,409,349 | $ | 4,372,732 |
ITEM 4. | Controls and Procedures |
PART II. | OTHER INFORMATION |
ITEM 1. | Legal Proceedings |
ITEM 1A. | Risk Factors |
• | a decline in demand for our products or services; |
• | an increase in reserves on accounts receivable due to our customers’ inability to pay us; |
• | an increase in reserves on inventory balances due to excess or obsolete inventory as a result of our inability to sell such inventory; |
• | valuation allowances on deferred tax assets; |
• | restructuring charges; |
• | asset impairments including the potential impairment of goodwill and other intangible assets; |
• | a decline in the value of our investments; |
• | exposure to claims from our suppliers for payment on inventory that is ordered in anticipation of customer purchases that do not come to fruition; |
• | a decline in the value of certain facilities we lease to less than our residual value guarantee with the lessor; and |
• | challenges maintaining reliable and uninterrupted sources of supply. |
• | economic conditions in the electronics and semiconductor industries in general and specifically the semiconductor equipment industry; |
• | the size and timing of orders from customers; |
• | 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; |
• | procurement shortages; |
• | the failure of our suppliers or outsource providers to perform their obligations in a manner consistent with our expectations; |
• | manufacturing difficulties; |
• | customer cancellations or delays in shipments, installations, and/or customer acceptances; |
• | the extent that customers continue to purchase and use our products and services in their business; |
• | our customers’ reuse of existing and installed products, to the extent that such reuse decreases their need to purchase new products or services; |
• | changes in average selling prices, customer mix, and product mix; |
• | our ability to develop, introduce, and market new, enhanced, and competitive products in a timely manner; |
• | our competitors’ introduction of new products; |
• | legal or technical challenges to our products and technologies; |
• | transportation, communication, demand, information technology, or supply disruptions based on factors outside our control, such as strikes, acts of God, wars, terrorist activities, and natural or man-made disasters; |
• | legal, tax, accounting, or regulatory changes (including but not limited to change in import/export regulations) or changes in the interpretation or enforcement of existing requirements; |
• | changes in our estimated effective tax rate; |
• | foreign currency exchange rate fluctuations; and |
• | the dilutive impact of our Convertible Notes (as defined below) and related warrants on our earnings per share. |
• | risk associated with any inability to satisfy our obligations; |
• | 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 |
• | impairing our ability to obtain additional financing in the future. |
• | incur additional debt, assume obligations in connection with letters of credit, or issue guarantees; |
• | create liens; |
• | enter into transactions with our affiliates; |
• | sell certain assets; and |
• | merge or consolidate with any person. |
• | a decline in demand for even a limited number of our products, |
• | a failure to achieve continued market acceptance of our key products, |
• | 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, |
• | an improved version of products being offered by a competitor in the markets in which we participate, |
• | increased pressure from competitors that offer broader product lines, |
• | technological changes that we are unable to address with our products, or |
• | a failure to release new or enhanced versions of our products on a timely basis. |
• | trade balance issues; |
• | tariffs and other barriers; |
• | global or national economic and political conditions; |
• | changes in currency controls; |
• | differences in the enforcement of intellectual property and contract rights in varying jurisdictions; |
• | 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; |
• | 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; |
• | fluctuations in interest and foreign currency exchange rates; |
• | the need for technical support resources in different locations; and |
• | our ability to secure and retain qualified people, and effectively manage people, in all necessary locations for the successful operation of our business. |
• | Loss of confidential and/or sensitive information stored on these critical information systems or transmitted to or from those systems; |
• | The disruption of the proper function of our products, services and/or operations; |
• | The failure of our or our customers’ manufacturing processes; |
• | Errors in the output of our work or our customers’ work; |
• | The loss or public exposure of the personal information of our employees or customers; |
• | The public release of customer orders, financial and business plans, and operational results; |
• | Exposure to claims from third parties who are adversely impacted by such incidents; |
• | Misappropriation or theft of Company, customer, supplier, or other’s assets or resources, and costs associated therewith; |
• | Diminution in the value of Lam's investment in research, development and engineering; or |
• | Our failure to meet, or violation of, regulatory or other legal obligations, such as the timely publication or filing of financial statements, tax forms and other required communications. |
• | general market, semiconductor, or semiconductor equipment industry conditions; |
• | economic or political events, trends, and unexpected developments occurring nationally, globally, or in any of our key sales regions; |
• | variations in our quarterly operating results and financial condition, including our liquidity; |
• | 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; |
• | announcements of restructurings, reductions in force, departure of key employees, and/or consolidations of operations; |
• | government regulations; |
• | developments in, or claims relating to, patent or other proprietary rights; |
• | technological innovations and the introduction of new products by us or our competitors; |
• | commercial success or failure of our new and existing products; |
• | disruptions of relationships with key customers or suppliers; or |
• | dilutive impacts of our Convertible Notes and related warrants. |
ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
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 share and per share data) | |||||||||||||
Amount available at June 25, 2017 | $ | 282,141 | |||||||||||
Quarter ended September 24, 2017 | 1,790 | $ | 158.40 | 1,779 | 124,203 | ||||||||
September 25, 2017 - October 22, 2017 | 241 | $ | 185.85 | 235 | 80,633 | ||||||||
Board authorization, $2.0 billion increase, November 2017 | 2,080,633 | ||||||||||||
October 23, 2017 - November 19, 2017 | 213 | $ | 207.16 | 210 | 2,037,104 | ||||||||
November 20, 2017 - December 24, 2017 | 3,352 | $ | 190.97 | 3,264 | 1,034,459 | ||||||||
Quarter ended December 24, 2017 | 3,806 | $ | 194.99 | 3,709 | $ | 1,034,459 |
(1) | During the three and six months ended December 24, 2017, we acquired 98 thousand shares at a total cost of $18.4 million, and 109 thousand shares at a total cost of $20.2 million, respectively, which we withheld through net share settlements to cover minimum tax withholding obligations upon the vesting of restricted stock unit awards granted under the Company’s 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 accelerated share repurchases; see additional disclosure below regarding our accelerated share repurchase activity during the fiscal year. |
ITEM 3. | Defaults Upon Senior Securities |
ITEM 4. | Mine Safety Disclosures |
ITEM 5. | Other Information |
ITEM 6. | Exhibits |
Date: | January 30, 2018 | LAM RESEARCH CORPORATION (Registrant) | |
/s/ Douglas R. Bettinger | |||
Douglas R. Bettinger | |||
Executive Vice President, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
Exhibit Number | Description |
10.1(1) | |
10.2(1) | |
10.3(1) | |
10.4(1) | |
10.5(1) | |
31.1 | |
31.2 | |
32.1 | |
32.2 | |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
* | Indicates management contract or compensatory plan or arrangement in which executive officers of the Company are eligible to participate. |
/s/ Martin B. Anstice | |
Martin B. Anstice | |
Chief Executive Officer |
/s/ Douglas R. Bettinger | |
Douglas R. Bettinger | |
Executive Vice President, Chief Financial Officer | |
(Principal Financial Officer and Principal Accounting Officer) |
/s/ Martin B. Anstice | |
Martin B. Anstice | |
Chief Executive Officer |
/s/ Douglas R. Bettinger | |
Douglas R. Bettinger | |
Executive Vice President, Chief Financial Officer | |
(Principal Financial Officer and Principal Accounting Officer) |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Dec. 24, 2017 |
Jan. 25, 2018 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 24, 2017 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | LRCX | |
Entity Registrant Name | LAM RESEARCH CORP | |
Entity Central Index Key | 0000707549 | |
Current Fiscal Year End Date | --06-24 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 162,952,484 |
Condensed Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 24, 2017 |
Dec. 25, 2016 |
Dec. 24, 2017 |
Dec. 25, 2016 |
|
Income Statement [Abstract] | ||||
Revenue | $ 2,580,815 | $ 1,882,299 | $ 5,058,955 | $ 3,514,718 |
Cost of goods sold | 1,375,248 | 1,035,502 | 2,704,045 | 1,951,724 |
Gross margin | 1,205,567 | 846,797 | 2,354,910 | 1,562,994 |
Research and development | 281,311 | 246,804 | 556,389 | 482,044 |
Selling, general, and administrative | 186,885 | 160,165 | 367,928 | 325,175 |
Total operating expenses | 468,196 | 406,969 | 924,317 | 807,219 |
Operating income | 737,371 | 439,828 | 1,430,593 | 755,775 |
Other expense, net | (3,152) | (55,023) | (8,654) | (78,177) |
Income before income taxes | 734,219 | 384,805 | 1,421,939 | 677,598 |
Income tax expense | (744,174) | (52,014) | (841,204) | (80,972) |
Net (loss) income | $ (9,955) | $ 332,791 | $ 580,735 | $ 596,626 |
Net (loss) income per share: | ||||
Basic (in dollars per share) | $ (0.06) | $ 2.05 | $ 3.59 | $ 3.69 |
Diluted (in dollars per share) | $ (0.06) | $ 1.81 | $ 3.16 | $ 3.28 |
Number of shares used in per share calculations: | ||||
Basic (in shares) | 161,135 | 162,659 | 161,638 | 161,633 |
Diluted (in shares) | 161,135 | 183,543 | 183,958 | 181,780 |
Cash dividend declared per common share (in dollars per share) | $ 0.5 | $ 0.45 | $ 0.95 | $ 0.75 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 24, 2017 |
Dec. 25, 2016 |
Dec. 24, 2017 |
Dec. 25, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (9,955) | $ 332,791 | $ 580,735 | $ 596,626 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustment | 5,239 | (14,428) | 13,108 | (9,927) |
Cash flow hedges: | ||||
Net unrealized gains during the period | 6,930 | 15,225 | 9,992 | 12,804 |
Net (gains) losses reclassified into earnings | (5,459) | (502) | (3,271) | 11,448 |
Net change | 1,471 | 14,723 | 6,721 | 24,252 |
Available-for-sale investments: | ||||
Net unrealized losses during the period | (18,339) | (13,585) | (20,066) | (16,308) |
Net losses (gains) reclassified into earnings | 84 | 91 | (39) | 994 |
Net change | (18,255) | (13,494) | (20,105) | (15,314) |
Defined benefit plans, net change in unrealized component | 172 | 122 | (2,184) | 245 |
Other comprehensive loss, net of tax | (11,373) | (13,077) | (2,460) | (744) |
Comprehensive (loss) income | $ (21,328) | $ 319,714 | $ 578,275 | $ 595,882 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 24, 2017 |
Jun. 25, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 5,262 | $ 5,103 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 159,451,000 | 161,723,000 |
Common stock, shares outstanding | 159,451,000 | 161,723,000 |
Treasury stock, shares | 110,754,000 | 105,569,000 |
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands |
6 Months Ended | ||||
---|---|---|---|---|---|
Dec. 24, 2017 |
Dec. 25, 2016 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||
Net income | $ 580,735 | $ 596,626 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation and amortization | 159,040 | 151,627 | |||
Deferred income taxes | (228,274) | 42,248 | |||
Equity-based compensation expense | 83,907 | 70,850 | |||
Loss on extinguishment of debt | 0 | 36,325 | |||
Amortization of note discounts and issuance costs | 9,127 | 13,032 | |||
Other, net | 5,461 | 15,515 | |||
Changes in operating assets and liabilities | 277,014 | (48,901) | |||
Net cash provided by operating activities | 887,010 | 877,322 | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||
Capital expenditures and intangible assets | (144,757) | (78,492) | |||
Business acquisition, net of cash acquired | (115,697) | 0 | |||
Purchases of available-for-sale securities | (2,251,486) | (2,370,910) | |||
Sales and maturities of available-for-sale securities | 1,928,011 | 811,732 | |||
Transfers of restricted cash and investments | 221 | (4,754) | |||
Other, net | (14,996) | (8,041) | |||
Net cash used for investing activities | (598,704) | (1,650,465) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||
Principal payments on long-term debt and capital lease obligations and payments for debt issuance costs | (349,249) | (1,616,641) | |||
Net proceeds from commercial paper | 798,947 | 0 | |||
Proceeds from borrowings on revolving credit facility | 750,000 | 0 | |||
Repayments of borrowings on revolving credit facility | (750,000) | 0 | |||
Treasury stock purchases | (1,266,835) | (69,522) | |||
Dividends paid | (145,865) | (96,449) | |||
Reissuance of treasury stock related to employee stock purchase plan | 34,057 | 19,320 | |||
Proceeds from issuance of common stock | 4,115 | 4,580 | |||
Other, net | 4 | (54) | |||
Net cash used for financing activities | (924,826) | (1,758,766) | |||
Effect of exchange rate changes on cash and cash equivalents | 4,159 | (3,453) | |||
Net decrease in cash and cash equivalents | (632,361) | (2,535,362) | |||
Cash and cash equivalents at beginning of period | 2,377,534 | [1] | 5,039,322 | ||
Cash and cash equivalents at end of period | 1,745,173 | 2,503,960 | |||
Schedule of non-cash transactions: | |||||
Accrued payables for stock repurchases | 0 | 8,382 | |||
Accrued payables for capital expenditures | 29,031 | 24,216 | |||
Dividends payable | 79,743 | 73,338 | |||
Transfers of inventory to property and equipment, net | $ 29,977 | $ 23,828 | |||
|
BASIS OF PRESENTATION |
6 Months Ended |
---|---|
Dec. 24, 2017 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements of Lam Research Corporation (“Lam Research” or the “Company”) for the fiscal year ended June 25, 2017, which are included in the Company’s Annual Report on Form 10-K as of and for the year ended June 25, 2017 (the “2017 Form 10-K”). The Company’s reports on Form 10-K, Form 10-Q and Form 8-K are available online at the Securities and Exchange Commission website on the Internet. The address of that site is www.sec.gov. The Company also posts its reports on Form 10-K, Form 10-Q and Form 8-K on its corporate website at http://investor.lamresearch.com. The content on any website referred to in this Form 10-Q is not a part of or incorporated by reference in this Form 10-Q unless expressly noted. The condensed consolidated financial statements include the accounts of Lam Research and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s reporting period is a 52/53-week fiscal year. The Company’s current fiscal year will end June 24, 2018 and includes 52 weeks. The quarters ended December 24, 2017 (the “December 2017 quarter”) and December 25, 2016 (the “December 2016 quarter”) included 13 weeks. |
RECENT ACCOUNTING PRONOUNCEMENTS |
6 Months Ended | ||||||||||||||||||||||||
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Dec. 24, 2017 | |||||||||||||||||||||||||
Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted In November 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes.” This ASU amends existing guidance to require that deferred income tax assets and liabilities be classified as non-current in a classified balance sheet, and eliminates the prior guidance which required an entity to separate deferred tax assets and liabilities into a current amount and a non-current amount in a classified balance sheet. The Company adopted this standard prospectively in the first quarter of fiscal year 2018. The implementation resulted in a net reduction of prepaid expense and other current assets of $49.7 million, accrued expense and other current liabilities of $5.3 million, and other long-term liabilities of $39.4 million; and an increase in other assets of $5.0 million in the Company’s Condensed Consolidated Balance Sheet, and had no impact on cash provided by or used in operations for any period presented. In March 2016, the FASB released ASU 2016-9, “Compensation – Stock Compensation.” Key changes in the amendment include:
The Company adopted this standard in the first quarter of fiscal year 2018. As a result of the adoption, the Company recorded a $40.1 million cumulative-effect adjustment to retained earnings for the recognition of previously unrecognized excess tax benefits for all years prior to the adoption. As required by the standard update, the amendment was applied prospectively to recognize excess tax benefits or deficiencies in the income statement in the period of occurrence. Accordingly, the provision for income taxes in the three and six months ended December 24, 2017 included excess tax benefits of $11.0 million and $13.0 million, respectively, that decreased the income tax provision. Additionally, the Company has elected to apply the change in cash flow classification on a prospective basis. The Company has elected to continue to estimate the number of forfeitures expected to occur to determine the amount of compensation cost to be recognized each period. The Company has elected to adopt the effects of the standard update with regard to the income tax withholdings obligations on a prospective basis. Such withholdings during the three and six months ended December 24, 2017 were not material. Updates Not Yet Effective In May 2014, the FASB released Accounting Standards Update (“ASU”) 2014-9, “Revenue from Contracts with Customers,” to supersede nearly all existing revenue recognition guidance under GAAP. The FASB issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016, May 2016 and December 2016 within ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20, respectively. The core principle of the standard is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The new standard defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price, and allocating the transaction price to each separate performance obligation. The Company is required to adopt these standards starting in the first quarter of fiscal year 2019 using either of two methods: (1) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within the standard; or (2) retrospective with the cumulative effect of initially applying the standard recognized at the date of initial application and providing certain additional disclosures as defined per the standard. The Company has not yet selected a transition method. The Company is continuing its evaluation of the impact that the new standard will have on its Condensed Consolidated Financial Statements and disclosures, business processes, systems, and controls. While the Company’s evaluation of the impact of the standard on its financial statements with respect to its spare parts and service revenue has not been completed, the Company believes that the timing of revenue recognition for certain of its systems will generally be earlier than under existing revenue recognition guidance. The Company continues to evaluate the impact to its revenues related to its pending adoption of these standards and its preliminary assessments are subject to change. In January 2016, the FASB released ASU 2016-1, “Financial Instruments – Overall – Recognition and Measurement of Financial Assets and Financial Liabilities.” The amendment changes the accounting for and financial statement presentation of equity investments, other than those accounted for under the equity method of accounting or those that result in consolidation of the investee. The amendment provides clarity on the measurement methodology to be used for the required disclosure of fair value of financial instruments measured at amortized cost on the balance sheet and clarifies that an entity should evaluate the need for a valuation allowance on deferred tax assets related to available-for-sale securities in combination with the entity’s other deferred tax assets, among other changes. The Company is required to adopt this standard starting in the first quarter of fiscal year 2019 and does not anticipate that implementation will have a material impact on its Condensed Consolidated Financial Statements. In January 2016, the FASB released ASU 2016-2, “Leases.” The amendment requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. The amendment offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. The Company is required to adopt this standard starting in the first quarter of fiscal year 2020 using a modified-retrospective approach on the earliest period presented. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption on its Condensed Consolidated Financial Statements. In June 2016, the FASB released ASU 2016-13, “Financial Instruments – Credit Losses.” The amendment revises the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses on financial instruments, including but not limited to, available for sale debt securities and accounts receivable. The Company is required to adopt this standard starting in the first quarter of fiscal year 2021 using a modified-retrospective approach. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption on its Condensed Consolidated Financial Statements. In August 2016, the FASB released ASU 2016-15, “Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments.” The amendment provides and clarifies guidance on the classification of certain cash receipts and cash payments in the statement of cash flows to eliminate diversity in practice. The Company is required to adopt the standard update in the first quarter of fiscal year 2019, with a retrospective transition method required. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption on its Condensed Consolidated Financial Statements. In October 2016, the FASB released ASU 2016-16, “Income Tax – Intra-Entity Transfers of Assets Other than Inventory.” This standard update improves the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Early adoption is permitted. The Company is required to adopt the standard in the first quarter of fiscal year 2019 using a modified-retrospective approach through a cumulative-effect adjustment directly to retained earnings. The Company is currently in the process of evaluating the impact of adoption on its Condensed Consolidated Financial Statements. In November 2016, the FASB released ASU 2016-18, “Statement of Cash Flows – Restricted Cash.” This standard update requires that restricted cash and restricted cash equivalents be included in cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown in the statement of cash flows. The Company is required to adopt this standard in the first quarter of fiscal year 2019, with a retrospective transition method required. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption on its Condensed Consolidated Financial Statements. In August 2017, the FASB released ASU 2017-12, “Targeted Improvements to Accounting for Hedging Activities.” The new guidance is intended to: (1) more closely align hedge accounting with an entity’s risk management strategies, (2) simplify the application of hedge accounting by eliminating the requirement to separately measure and report hedge ineffectiveness, and (3) increase transparency around the scope and results of hedging programs. The Company is required to adopt the standard in the first quarter of fiscal year 2020, using a modified-retrospective approach for any cash flow or net investment hedges that exist on the date of adoption. The presentation and disclosure requirements as defined per the standard are to be applied prospectively. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption on its Condensed Consolidated Financial Statements. |
EQUITY-BASED COMPENSATION PLANS |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 24, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY-BASED COMPENSATION PLANS | EQUITY-BASED COMPENSATION PLANS The Lam Research Corporation 2015 Stock Incentive Plan, as amended (the “2015 Plan”), provides for the grant of non-qualified equity-based awards of the Company’s Common Stock to eligible employees and non-employee directors, including stock options, restricted stock units (“RSUs”), and market-based performance RSUs (“market-based PRSUs”). An option is a right to purchase Common Stock at a set price. An RSU award is an agreement to issue a set number of shares of Common Stock at the time of vesting. The Company’s market-based PRSUs contain both a market condition and a service condition. The Company’s options, RSU, and market-based PRSU awards typically vest over a period of three years. The Company also has an employee stock purchase plan that allows employees to purchase its Common Stock at a discount through payroll deductions. The Company recognized the following equity-based compensation expense (including expense related to the employee stock purchase plan) and related income tax benefit in the Condensed Consolidated Statements of Operations:
The estimated fair value of the Company’s stock-based awards, less expected forfeitures, is amortized over the awards’ vesting term on a straight-line basis. In the first quarter of fiscal year 2018, the Company adopted ASU 2016-9, “Compensation – Stock Compensation,” as discussed further in Note 2. ESPP The 1999 Employee Stock Purchase Plan, as amended and restated (the “1999 ESPP”), allows employees to designate a portion of their base compensation to be withheld through payroll deductions and used to purchase Common Stock at a purchase price per share equal to the lower of 85% of the fair market value of Common Stock on the first or last day of the applicable purchase period. Typically, each offering period lasts up to twelve months and comprises two interim purchase dates. During the three and six months ended December 24, 2017, a total of 412,469 shares of the Company’s Common Stock were sold to employees under the 1999 ESPP. Purchase rights under the 1999 ESPP were valued using the Black-Scholes option valuation model and the following weighted-average assumptions for the three and six months ended December 24, 2017 and December 25, 2016:
|
OTHER EXPENSE, NET |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER EXPENSE, NET | OTHER EXPENSE, NET The significant components of other expense, net, are as follows:
Interest income in the three and six months ended December 24, 2017, increased compared to same period in 2016 due to higher yield. Interest expense decreased in the six months ended December 24, 2017 compared to the same period in 2016 due to the termination of the Term Loan Agreement and mandatory redemption of the Senior Notes due 2023 and 2026 during the December 2016 quarter. Loss on extinguishment of debt realized in the three months ended December 25, 2016 is primarily a result of the mandatory redemption of the Senior Notes Due 2023 and 2026 as well as the termination of the Term Loan Agreement. |
INCOME TAX EXPENSE |
6 Months Ended |
---|---|
Dec. 24, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX EXPENSE | INCOME TAX EXPENSE On December 22, 2017, the “Tax Cuts & Jobs Act” (hereafter referred to as “U.S. tax reform”) was signed into law and is effective for the Company’s quarter which ended December 24, 2017. U.S. tax reform reduces the U.S. federal statutory tax rate from 35% to 21%, mandates payment of a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. The impact on income taxes due to change in legislation is required under the authoritative guidance of Accounting Standards Codification (“ASC”) 740, Income Taxes, to be recognized in the period in which the law is enacted. In conjunction, the SEC issued Staff Accounting Bulletin (“SAB”) 118, which allows for the recording of provisional amounts related to U.S. tax reform and subsequent adjustments related to U.S. tax reform during a measurement period that is similar to the measurement period used when accounting for business combinations. As such, there is significant activity within the quarter which reflects the change in legislation. Most of that activity has provisionally been recorded in the Company’s Condensed Consolidated Financial Statements in the period ended December 24, 2017, as the Company has not yet completed the accounting for the tax effects of enactment. The Company has recorded what it believes to be a reasonable estimate and the provisional activity is subject to further adjustments under SAB 118. In addition, for significant items for which the Company could not make a reasonable estimate, no provisional activity was recorded. The activity will be recorded during the measurement period allowed under SAB 118 when a reasonable estimate can be made, or when the effect of the activity is known. The Company will continue to refine provisional balances and adjustments may be made under SAB 118 during the measurement period as a result of future changes in interpretation, information available, assumptions made by the Company and/or issuance of additional guidance; these adjustments could be material. The Company recorded an income tax expense of $744.2 million and $841.2 million for the three and six months ended December 24, 2017, which yielded an effective tax rate of approximately 101.4% and 59.2%, respectively. As a result of U.S. tax reform, the Company revised its estimated annual effective tax rate to reflect the change in the U.S. federal statutory tax rate from 35% to 21%. As the Company has a fiscal year ending the last Sunday in June, it is subject to transitional tax rate rules. Therefore, a blended rate of 28.27% was computed as effective for the current fiscal year. The difference between the U.S. federal statutory tax rate of 28.27% and the Company’s effective tax rate for the three and six months ended December 24, 2017, is primarily due to the impact of U.S. tax reform, outlined below, and income in lower tax jurisdictions. Revaluation of the Company’s deferred tax balances to reflect the new U.S. federal statutory tax rate and computation of the one-time transition tax on accumulated unrepatriated foreign earnings, were recorded on a provisional basis in the three and six months ended December 24, 2017 and are therefore subject to potential measurement period adjustments under SAB 118. The Company revalued the deferred tax balances based on the tax rates at which the balance, or a portion of the balance, is expected to reverse at in the future. Generally, this is 21%, but for certain activity which is expected to reverse at the Company’s current fiscal year blended rate. The Company has not yet completed the revaluation of the deferred tax balances due to estimates which are being used during interim periods until finalization of the balances can occur at the Company’s fiscal year end. The provisional amount recorded related to the revaluation of the Company’s deferred tax balance was $42.7 million, and an associated tax liability was remeasured at $54.0 million, which is the tax effect of when the balance is expected to reverse. The one-time transition tax is based on the Company’s total post-1986 earnings and profits (“E&P”) that was previously deferred from U.S. income taxes. The Company had previously accrued deferred taxes on a portion of this E&P. The Company has not yet completed the calculation of total post-1986 E&P and related income tax pools for its foreign subsidiaries. The Company recorded a provisional amount for the one-time transition tax of $991.3 million, which was offset by the release of the associated previously accrued deferred taxes of $287.8 million. The net increase to tax expense was $703.5 million. The one-time transition tax may be elected to be paid over a period of eight years. The Company intends to make this election. Other significant items which are being evaluated by the Company but for which no estimate can currently be made and for which no provisional amounts were recorded in the Company’s Condensed Consolidated Financial Statements, include the impact of the “Global Intangible Low-Taxed Income” (“GILTI”) provision of U.S. tax reform. The GILTI provision imposes taxes on foreign earnings in excess of a deemed return on tangible assets. This tax is effective for the Company after the end of the current fiscal year. However, the Company is evaluating whether deferred taxes should be recorded in relation to the GILTI provisions or if the tax should be recorded in the period in which it occurs. Based on current interpretation, the Company may choose either method as an accounting policy election. The Company has not yet decided on the accounting policy related to GILTI and will only do so after completion of the GILTI analysis. The provisions related to GILTI are subject to adjustment during the measurement period under SAB 118. The Company is in various stages of examination in connection with all of its tax audits worldwide, and it is difficult to determine when these examinations will be settled. It is reasonably possible that over the next 12-month period the Company may experience an increase or decrease in its unrecognized tax benefits as a result of tax examinations or lapses of statute of limitations. The estimated reduction in unrecognized tax benefits may range up to $94 million. |
NET (LOSS) INCOME PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET (LOSS) INCOME PER SHARE | NET (LOSS) INCOME PER SHARE Basic net (loss) income per share is computed by dividing net (loss) income by the weighted-average number of common shares outstanding during the period. Diluted net (loss) income per share is computed using the treasury stock method, for dilutive stock options, restricted stock units, convertible notes, and warrants. Dilutive shares outstanding include the effect of the convertible notes. Refer to Note 11 for additional information regarding the Company’s convertible notes. The following table reconciles the numerators and denominators of the basic and diluted computations for net (loss) income per share.
For purposes of computing diluted net income per share, weighted-average common shares do not include potentially dilutive securities that are anti-dilutive under the treasury stock method. The following potentially dilutive securities were excluded:
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. |
FINANCIAL INSTRUMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS The Company maintains an investment portfolio of various holdings, types, and maturities. The Company’s mutual funds, which are related to the Company’s obligations under the deferred compensation plan, are classified as trading securities. Investments classified as trading securities are recorded at fair value based upon quoted market prices. Differences between the cost and fair value of trading securities are recognized as other income (expense) in the Condensed Consolidated Statements of Operations. All of the Company’s other investments are classified as available-for-sale and consequently are recorded in the Condensed Consolidated Balance Sheets at fair value with unrealized gains or losses reported as a separate component of accumulated other comprehensive income (loss), net of tax. Fair Value The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability. A fair value hierarchy has been established that prioritizes the inputs to valuation techniques used to measure fair value. The level of an asset or liability in the hierarchy is based on the lowest level of input that is significant to the fair value measurement. Assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities with sufficient volume and frequency of transactions. Level 2: Valuations based on observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or model-derived valuations techniques for which all significant inputs are observable in the market or can be corroborated by observable market data, for substantially the full term of the assets or liabilities. Level 3: Valuations based on unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities and based on non-binding, broker-provided price quotes and may not have been corroborated by observable market data. The Company’s primary financial instruments include its cash, cash equivalents, investments, restricted cash and investments, long-term investments, accounts receivable, accounts payable, long-term debt and capital leases, and foreign currency related derivative instruments. The estimated fair value of cash, accounts receivable, and accounts payable approximates their carrying value due to the short period of time to their maturities. The estimated fair values of capital lease obligations approximate their carrying value as the substantial majority of these obligations have interest rates that adjust to market rates on a periodic basis. Refer to Note 11 to the Condensed Consolidated Financial Statements for additional information regarding the fair value of the Company’s Senior Notes and Convertible Notes. The following table sets forth the Company’s cash, cash equivalents, investments, restricted cash and investments, and other assets measured at fair value on a recurring basis as of December 24, 2017, and June 25, 2017:
The Company accounts for its investment portfolio at fair value. Realized gains (losses) for investment sales are specifically identified. Management assesses the fair value of investments in debt securities that are not actively traded through consideration of interest rates and their impact on the present value of the cash flows to be received from the investments. The Company also considers whether changes in the credit ratings of the issuer could impact the assessment of fair value. The Company did not recognize any losses on investments due to other-than-temporary impairments during the three and six months ended December 24, 2017 or December 25, 2016. Additionally, gross realized gains/(losses) from sales of investments were approximately $0.2 million and $(1.1) million, respectively, in the three months ended December 24, 2017, and $0.1 million and $(0.4) million, respectively, in the three months ended December 25, 2016. Gross realized gains/(losses) from sales of investments were approximately $1.0 million and $(2.1) million, respectively, in the six months ended December 24, 2017 and $2.7 million and $(0.6) million, respectively, in the six months ended December 25, 2016. The following is an analysis of the Company’s cash, cash equivalents, investments, and restricted cash and investment in unrealized loss positions:
The amortized cost and fair value of cash equivalents, investments, and restricted investments with contractual maturities are as follows as of December 24, 2017:
The Company has the ability, if necessary, to liquidate its investments in order to meet the Company’s liquidity needs in the next 12 months. Accordingly, those investments with contractual maturities greater than twelve months from the date of purchase nonetheless are classified as short-term on the accompanying Condensed Consolidated Balance Sheets. Derivative Instruments and Hedging The Company carries derivative financial instruments (“derivatives”) on its Condensed Consolidated Balance Sheets at their fair values. The Company enters into foreign currency forward contracts and foreign currency options with financial institutions with the primary objective of reducing volatility of earnings and cash flows related to foreign currency exchange rate fluctuations. In addition, the Company enters into interest rate swap arrangements to manage interest rate risk. The counterparties to these derivatives are large global financial institutions that the Company believes are creditworthy, and therefore, it does not consider the risk of counterparty nonperformance to be material. Cash Flow Hedges The Company’s financial position is routinely subjected to market risk associated with foreign currency exchange rate fluctuations on non-U.S. dollar transactions or cash flows, primarily from Japanese yen-denominated revenues and euro- denominated and Korean won-denominated expenses. The Company’s policy is to mitigate the foreign exchange risk arising from the fluctuations in the value of these non-U.S. dollar denominated transactions or cash flows through a foreign currency cash flow hedging program, using forward contracts and foreign currency options that generally expire within 12 months and no later than 24 months. These hedge contracts are designated as cash flow hedges and are carried on the Company’s balance sheet at fair value with the effective portion of the contracts’ gains or losses included in accumulated other comprehensive income (loss) and subsequently recognized in revenue/expense in the same period the hedged items are recognized. In addition, the Company has entered into interest rate swap agreements to hedge against the variability of cash flows due to changes in certain benchmark interest rates on fixed rate debt. These instruments are designated as cash flow hedges at inception and are settled in conjunction with the issuance of debt. The effective portion of the contracts’ gains or losses is included in accumulated other comprehensive (loss) and is amortized into income as the hedged item impacts earnings. At inception and at each quarter-end, hedges are tested prospectively and retrospectively for effectiveness using regression analysis. Changes in the fair value of the forward contracts due to changes in time value are excluded from the assessment of effectiveness and are recognized in revenue or expense in the current period. The change in time value related to these contracts was not material for all reported periods. Changes in the fair value of foreign exchange options due to changes in time value are included in the assessment of effectiveness. To qualify for hedge accounting, the hedge relationship must meet criteria relating to both the derivative instrument and the hedged item. These criteria include identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the hedging instrument’s effectiveness in offsetting the exposure to changes in the hedged item’s fair value or cash flows will be measured. There were no material gains or losses during the three or six months ended December 24, 2017 and December 25, 2016 associated with ineffectiveness or forecasted transactions that failed to occur. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be tested to demonstrate an expectation of providing highly effective offsetting changes to future cash flows on hedged transactions. When derivative instruments are designated and qualify as effective cash flow hedges, the Company recognizes effective changes in the fair value of the hedging instrument within accumulated other comprehensive income (loss) until the hedged exposure is realized. Consequently, with the exception of excluded time value associated with the forward contracts and hedge ineffectiveness recognized, the Company’s results of operations are not subject to fluctuation as a result of changes in the fair value of the derivative instruments. If hedges are not highly effective or if the Company does not believe that the underlying hedged forecasted transactions will occur, the Company may not be able to account for its derivative instruments as cash flow hedges. If this were to occur, future changes in the fair values of the Company’s derivative instruments would be recognized in earnings. Additionally, related amounts previously recorded in other comprehensive income would be reclassified to income immediately. As of December 24, 2017, the Company had gains of $7.8 million accumulated in other comprehensive income, net of tax, related to foreign exchange cash flow hedges which it expects to reclassify from other comprehensive income into earnings over the next 12 months. Additionally, as of December 24, 2017, the Company had a net loss of $1.9 million accumulated in other comprehensive income, net of tax, related to interest rate contracts which it expects to reclassify from other comprehensive income into earnings over the next 7.2 years. Fair Value Hedges The Company has interest rate contracts whereby the Company receives fixed rates and pays variable rates based on certain benchmark interest rates, resulting in a net increase or decrease to interest expense, a component of other expense, net in our Condensed Consolidated Statement of Operations. These interest rate contracts are designated as fair value hedges and hedge against changes in the fair value of our debt portfolio. The Company concluded that these interest rate contracts meet the criteria necessary to qualify for the short-cut method of hedge accounting, and as such an assumption is made that the change in the fair value of the hedged debt, due to changes in the benchmark rate, exactly offsets the change in the fair value of the interest rate swap. Therefore, the derivative is considered to be effective at achieving offsetting changes in the fair value of the hedged liability, and no ineffectiveness is recognized. Balance Sheet Hedges The Company also enters into foreign currency forward contracts to hedge fluctuations associated with foreign currency denominated monetary assets and liabilities, primarily cash, third-party accounts receivable, accounts payable, and intercompany receivables and payables. These forward contracts are not designated for hedge accounting treatment. Therefore, the change in fair value of these derivatives is recorded as a component of other income (expense) and offsets the change in fair value of the foreign currency denominated assets and liabilities, which are also recorded in other income (expense). As of December 24, 2017, the Company had the following outstanding foreign currency contracts that were entered into under its cash flow and balance sheet hedge programs:
The fair value of derivative instruments in the Company’s Condensed Consolidated Balance Sheets as of December 24, 2017, and June 25, 2017 were as follows:
Under the master netting agreements with the respective counterparties to the Company’s derivative contracts, subject to applicable requirements, the Company is allowed to net settle transactions of the same currency with a single net amount payable by one party to the other. However, the Company has elected to present the derivative assets and derivative liabilities on a gross basis on its balance sheet. As of December 24, 2017, the potential effect of rights of offset associated with the above foreign exchange and interest rate contracts would be an offset to assets and liabilities by $4.1 million, resulting in a net derivative asset of $5.6 million and net derivative liability of $15.5 million. As of June 25, 2017, the potential effect of rights of offset associated with the above foreign exchange contracts would be an offset to both assets and liabilities by $5.9 million, resulting in a net derivative asset of $2.3 million and a net derivative liability of $7.4 million. The Company is not required to pledge, nor is the Company entitled to receive, cash collateral for these derivative transactions. The effect of derivative instruments designated as cash flow hedges on the Company’s Condensed Consolidated Statements of Operations, including accumulated other comprehensive income (“AOCI”) was as follows:
The effect of derivative instruments not designated as cash flow hedges on the Company’s Condensed Consolidated Statements of Operations was as follows:
Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, investments, restricted cash and investments, trade accounts receivable, and derivative financial instruments used in hedging activities. Cash is placed on deposit at large global financial institutions. Such deposits may be in excess of insured limits. Management believes that the financial institutions that hold the Company’s cash are creditworthy and, accordingly, minimal credit risk exists with respect to these balances. The Company’s overall portfolio of available-for-sale securities must maintain an average minimum rating of “AA-” or “Aa3” as rated by Standard and Poor’s, Fitch Ratings, or Moody’s Investor Services. To ensure diversification and minimize concentration, the Company’s policy limits the amount of credit exposure with any one financial institution or commercial issuer. The Company is exposed to credit losses in the event of nonperformance by counterparties on foreign currency and interest rate hedge contracts that are used to mitigate the effect of exchange rate and interest rate fluctuations, and on contracts related to structured share repurchase arrangements. These counterparties are large global financial institutions and, to date, no such counterparty has failed to meet its financial obligations to the Company. Credit risk evaluations, including trade references, bank references, and Dun & Bradstreet ratings, are performed on all new customers and the Company monitors its customers’ financial condition and payment performance. In general, the Company does not require collateral on sales. |
INVENTORIES |
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Dec. 24, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | INVENTORIES Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. System shipments to Japanese customers, for which title does not transfer until customer acceptance, are classified as finished goods inventory and carried at cost until title transfers. Inventories consist of the following:
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GOODWILL AND INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill The balance of goodwill is approximately $1.5 billion and $1.4 billion as of December 24, 2017, and June 25, 2017, respectively. As of December 24, 2017, $61.1 million of the goodwill balance is tax deductible and the remaining balance is not tax deductible due to purchase accounting and applicable foreign law. Intangible Assets The following table provides the Company’s intangible assets:
The Company recognized $40.8 million and $38.6 million in intangible asset amortization expense during the three months ended December 24, 2017, and December 25, 2016, respectively. During the six months ended December 24, 2017 and December 25, 2016, the company recognized $80.1 million and $77.3 million, respectively, in intangible asset amortization expense. Refer to Note 15 - Business Combinations for additional information regarding intangible assets acquired during the six months ended December 24, 2017. The estimated future amortization expense of intangible assets as of December 24, 2017, was as follows:
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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
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Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following:
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LONG-TERM DEBT AND OTHER BORROWINGS |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT AND OTHER BORROWINGS | LONG-TERM DEBT AND OTHER BORROWINGS As of December 24, 2017, and June 25, 2017, the Company’s outstanding debt consisted of the following:
____________________________ (1) As of December 24, 2017, these notes were convertible at the option of the bondholder, as a result of the condition described in (4) below. Upon closure of the conversion period, the 2041 Notes not converted will be reclassified back into noncurrent liabilities and the temporary equity will be reclassified into permanent equity. (2) As of June 25, 2017, these notes were convertible at the option of the bond holder, as a result of the condition described in (4) below. (3) Represents the weighted average effective interest rate for all outstanding balances as of December 24, 2017. (4) As of the report date, 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. Convertible Senior Notes In May 2011, the Company issued and sold $450 million in aggregate principal amount of 1.25% Convertible Senior Notes due May 2018 (the “2018 Notes”) at par. The Company pays cash interest at an annual rate of 1.25%, on a semi-annual basis on May 15 and November 15 of each year. In June 2012, with the acquisition of Novellus Systems, Inc. (“Novellus”), the Company assumed $700 million in aggregate principal amount of 2.625% Convertible Senior Notes due May 2041 (the “2041 Notes,” and collectively with the 2018 Notes, the “Convertible Notes”). The Company pays cash interest at an annual rate of 2.625%, on a semi-annual basis on May 15 and November 15 of each year on the 2041 Notes. The 2041 Notes also have a contingent interest payment provision that may require the Company to pay additional interest, up to 0.60% per year, based on certain thresholds, beginning with the semi-annual interest payment on May 15, 2021, and upon the occurrence of certain events, as outlined in the indenture governing the 2041 Notes. The Company separately accounts for the liability and equity components of the Convertible Notes. The initial debt components of the Convertible Notes were valued based on the present value of the future cash flows using the Company’s borrowing rate at the date of the issuance or assumption for similar debt instruments without the conversion feature, which equals the effective interest rate on the liability component disclosed in the table below, respectively. The equity component was initially valued equal to the principle value of the notes, less the present value of the future cash flows using the Company’s borrowing rate at the date of the issuance or assumption for similar debt instruments without a conversion feature, which equated to the initial debt discount. Under certain circumstances, the Convertible Notes may be converted into shares of the Company’s Common Stock. The number of shares each debenture is convertible into is based on conversion rates, disclosed in the table below. The principal value of Convertible Note conversions in the three and six months ended December 24, 2017, was approximately $44.6 million and $346.3 million, respectively. During the quarter ended December 24, 2017, and in the subsequent period through January 26, 2018, the Company received notice of conversion of an additional $227.8 million principal value of Convertible Notes, which will settle in the quarter ending March 25, 2018. Selected additional information regarding the Convertible Notes outstanding as of December 24, 2017, and June 25, 2017, is as follows:
Convertible Note Hedges and Warrants Concurrent with the issuance of the 2018 Notes the Company purchased a convertible note hedge and sold warrants. The warrants settlement is contractually defined as net share settlement. The exercise price is adjusted for certain corporate events, including dividends on the Company’s Common Stock. As of December 24, 2017, the warrants associated with the 2018 Notes had not been exercised and remained outstanding. In conjunction with the convertible note hedge, counterparties agreed to sell to the Company shares of Common Stock equal to the number of shares issuable upon conversion of the 2018 Notes in full. The convertible note hedge transactions will be settled in net shares and will terminate upon the earlier of the maturity date or the first day none of the respective notes remain outstanding due to conversion or otherwise. Settlement of the convertible note hedge in net shares, based on the number of shares issued upon conversion of the 2018 Notes, on the expiration date would result in the Company receiving net shares equivalent to the number of shares issuable by the Company upon conversion of the 2018 Notes. The exercise price is adjusted for certain corporate events, including dividends on the Company’s Common Stock. During the three and six months ended December 24, 2017 the note hedge was partially settled, resulting in the receipt of approximately 367,000 and 2,459,000 shares, respectively. The following table presents the details of the warrants and convertible note hedge arrangements as of December 24, 2017:
Senior Notes On March 12, 2015, the Company completed a public offering of $500 million aggregate principal amount of the Company’s Senior Notes due March, 2020 (the “2020 Notes”) and $500 million aggregate principal amount of the Company’s Senior Notes due March, 2025 (the “2025 Notes”, together with the 2020 Notes, the “Senior Notes”). The Company pays interest at an annual rate of 2.75% and 3.80%, on the 2020 Notes and 2025 Notes, respectively, on a semi-annual basis on March 15 and September 15 of each year. During the year ended June 26, 2016, the Company entered into a series of interest rate contracts hedging the fair value of a portion of the 2025 Notes par value, whereby the Company receives a fixed rate and pays a variable rate based on a certain benchmark interest rate. Refer to Note 7 for additional information regarding these interest rate contracts. The Company may redeem the Senior Notes at a redemption price equal to 100% of the principal amount of such series (“par”), plus a “make whole” premium as described in the indenture in respect of the Senior Notes and accrued and unpaid interest before February 15, 2020, for the 2020 Notes and before December 15, 2024, for the 2025 Notes. The Company may redeem the Senior Notes at par, plus accrued and unpaid interest at any time on or after February 15, 2020, for the 2020 Notes and on or after December 24, 2024, for the 2025 Notes. In addition, upon the occurrence of certain events, as described in the indenture, the Company will be required to make an offer to repurchase the Senior Notes at a price equal to 101% of the principal amount of the Senior Notes, plus accrued and unpaid interest. On June 7, 2016, The Company completed a public offering of $800 million aggregate principal amount of Senior Notes due June 2021 (the “2021 Notes”, together with the 2020 and 2025 Notes, the “Senior Notes”). The Company pays interest at an annual rate of 2.80% on the 2021 Notes on a semi-annual basis on June 15 and December 15 of each year. The Company may redeem the 2021 Notes at a redemption price equal to 100% of the principal amount of such series (“par”), plus a “make whole” premium as described in the indenture in respect to the 2021 Notes and accrued and unpaid interest before May 15, 2021. The Company may redeem the 2021 Notes at par, plus accrued and unpaid interest at any time on or after May 15, 2021. In addition, upon the occurrence of certain events, as described in the indenture, the Company will be required to make an offer to repurchase the 2021 Notes at a price equal to 101% of the principal amount of the respective note, plus accrued and unpaid interest. Selected additional information regarding the Senior Notes outstanding as of December 24, 2017, is as follows:
Commercial Paper Program On November 13, 2017, the Company established a new commercial paper program (“the CP Program”) under which the Company may issue unsecured commercial paper notes on a private placement basis up to a maximum aggregate principal amount of $1.25 billion. The net proceeds from the commercial paper program will be used for general corporate purposes, including repurchases of the Company’s Common Stock from time to time and under the Company’s stock repurchase program. As of December 24, 2017, borrowings under the CP Program had a weighted-average interest rate of 1.64% with maturities of 30 days or less. Amounts available under the CP Program may be re-borrowed. Revolving Credit Facility On October 13, 2017, the Company entered into Amendment No. 2 to Amended and Restated Credit Agreement (the “2nd Amendment”), which amends the Company’s prior unsecured Credit Agreement (as amended by the 2nd Amendment, the “Amended Credit Agreement”). Among other things, the Amended Credit Agreement provides for a $500 million increase to the Company’s revolving credit facility, from $750 million to $1.25 billion with a syndicate of lenders. The Amended Credit Agreement provides for an expansion option that will allow the Company, subject to certain requirements, to request an increase in the facility of up to an additional $600 million, for a potential total commitment of $1.85 billion. The facility matures on October 13, 2022. Interest on amounts borrowed under the credit facility is, at the Company’s option, based on (1) a base rate, defined as the greatest of (a) prime rate, (b) Federal Funds rate plus 0.5%, or (c) one-month LIBOR plus 1.0%, plus a spread of 0.0% to 0.5%, or (2) LIBOR multiplied by the statutory rate, plus a spread of 0.9% to 1.5% in each case as the applicable spread is determined based on the rating of the Company’s non-credit enhanced, senior unsecured long-term debt. Principal and any accrued and unpaid interest is due and payable upon maturity. Additionally, the Company will pay the lenders a quarterly commitment fee that varies based on the Company’s credit rating. The Amended and Restated Credit Agreement contains affirmative covenants, negative covenants, financial covenants and events of default. As of December 24, 2017, the Company had no borrowings outstanding under the credit facility and was in compliance with all financial covenants. Interest Cost The following table presents the amount of interest cost recognized relating to both the contractual interest coupon and amortization of the debt discount, issuance costs, and effective portion of interest rate contracts with respect to the Convertible Notes, the Senior Notes, the term loan agreement, commercial paper, and the revolving credit facility during the three and six months ended December 24, 2017, and December 25, 2016.
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COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating Leases and Related Guarantees The Company leases the majority of its administrative, research and development (“R&D”) and manufacturing facilities, regional sales/service offices, and certain equipment under non-cancelable operating leases. Certain of the Company’s facility leases for buildings located at its Fremont, California headquarters and certain other facility leases provide the Company with options to extend the leases for additional periods or to purchase the facilities. Certain of the Company’s facility leases provide for periodic rent increases based on the general rate of inflation. The Company has operating leases regarding certain improved properties in Fremont and Livermore, California (the “Operating Leases”). The Company was required to maintain cash collateral in an aggregate of approximately $250.0 million in separate interest-bearing accounts as security for the Company’s obligations. These amounts are recorded with other restricted cash and investments in the Company’s Condensed Consolidated Balance Sheet as of December 24, 2017. During the term of the Operating Leases and when the terms of the Operating Leases expire, the property subject to those Operating Leases may be remarketed. The Company has guaranteed to the lessor that each property will have a certain minimum residual value. The aggregate guarantee made by the Company under the Operating Leases is generally no more than approximately $220.4 million; however, under certain default circumstances, the guarantee with regard to an Operating Lease may be 100% of the lessor’s aggregate investment in the applicable property, which in no case will exceed $250.0 million, in the aggregate. Other Guarantees The Company has issued certain indemnifications to its lessors for taxes and general liability under some of its agreements. The Company has entered into certain insurance contracts that are intended to limit its exposure to such indemnifications. As of December 24, 2017, the Company had not recorded any liability in connection with these indemnifications, as it does not believe that it is probable that any amounts will be paid under these guarantees. Generally, the Company indemnifies, under pre-determined conditions and limitations, its customers for infringement of third party intellectual property rights by the Company’s products or services. The Company seeks to limit its liability for such indemnity to an amount not to exceed the sales price of the products or services subject to its indemnification obligations. The Company does not believe that it is probable that any material amounts will be paid under these guarantees. The Company provides guarantees and standby letters of credit to certain parties as required for certain transactions initiated during the ordinary course of business. As of December 24, 2017, the maximum potential amount of future payments that it could be required to make under these arrangements and letters of credit was $20.6 million. The Company does not believe, based on historical experience and information currently available, that it is probable that any amounts will be required to be paid. Warranties The Company provides standard warranties on its systems. The liability amount is based on actual historical warranty spending activity by type of system, customer, and geographic region, modified for any known differences such as the impact of system reliability improvements. Changes in the Company’s product warranty reserves were as follows:
Legal proceedings While the Company is not currently a party to any legal proceedings that it believes material, the Company is either a defendant or plaintiff in various actions that have arisen from time to time in the normal course of business, including intellectual property claims. The Company accrues for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Significant judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable. Based on current information, the Company does not believe that a material loss from known matters is probable and therefore has not recorded an accrual for litigation or other contingencies related to existing legal proceedings. |
STOCK REPURCHASE PROGRAM |
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STOCK REPURCHASE PROGRAM | STOCK REPURCHASE PROGRAM In November 2017, the Board of Directors authorized the Company to repurchase up to an additional $2.0 billion of Common Stock; this authorization supplements the remaining balances from any prior authorizations. These repurchases can be conducted on the open market or as private purchases and may include the use of derivative contracts with large financial institutions, in all cases subject to compliance with applicable law. Repurchases are funded using the Company’s on-shore cash, on-shore cash generation, and available credit facilities. This repurchase program has no termination date and may be suspended or discontinued at any time. Repurchases under the repurchase program were as follows during the periods indicated:
(1) Average price paid per share excludes effect of accelerated share repurchases; see additional disclosure below regarding our accelerated share repurchase activity during the fiscal year. In addition to the shares repurchased under the Board-authorized repurchase program shown above, during the three and six months ended December 24, 2017, the Company acquired 98 thousand shares at a total cost of $18.4 million and 109 thousand shares at a total cost of $20.2 million, respectively, which the Company withheld through net settlements to cover minimum tax withholding obligations upon the vesting of restricted stock unit awards granted under the Company’s equity compensation plans. The shares retained by the Company through these net share settlements are not a part of the Board-authorized repurchase program but instead are authorized under the Company’s equity compensation plan. Accelerated Share Repurchase Agreements Executed in December Quarter On November 20, 2017, the Company entered into four separate accelerated share repurchase agreements (collectively, the "November 2017 ASR") with two financial institutions to repurchase a total of $1.0 billion of Common Stock. The Company took an initial delivery of 3,254,300 shares, which represented 70% of the prepayment amount divided by the Company’s closing stock price on November 20, 2017. The total number of shares to be received under the November 2017 ASR will be based upon the average daily volume weighted average price of the Company’s Common Stock during the repurchase period, less an agreed upon discount. Final settlement of two of the transactions is expected to be completed no later than February 22, 2018, and final settlement for the remaining transactions is expected to be completed no sooner than March 26, 2018 or no later than May 24, 2018. Accelerated Share Repurchase Agreements Settled in Fiscal Year On April 19, 2017, the Company entered into two separate accelerated share repurchase agreements (collectively, the “April 2017 ASR”) with two financial institutions to repurchase a total of $500 million of Common Stock. The Company took an initial delivery of approximately 2,570,000 shares, which represented 70% of the prepayment amount divided by the Company’s closing stock price on April 19, 2017. The total number of shares received under the April 2017 ASR was based upon the average daily volume weighted average price of our Common Stock during the repurchase period, less an agreed upon discount. The April 2017 ASR settled on June 30, 2017. Approximately 780,000 shares were received at final settlement, which resulted in a weighted-average share price of approximately $149.16 for the transaction period. |
ACCUMULATED OTHER COMPREHENSIVE LOSS |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The components of accumulated other comprehensive income (loss) (“AOCI”), net of tax at the end of the period, as well as the activity during the period, were as follows:
(1) Amount of after tax gain reclassified from accumulated other comprehensive income into net (loss) income located in other expense, net. (2)Amount of after tax gain reclassified from AOCI into net (loss) income located in revenue: $31 loss; cost of goods sold:$2,047 gain; selling, general, and administrative expenses: $1,296 gain; and other income and expense: $41 loss. |
BUSINESS COMBINATIONS |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS On August 28, 2017, the Company completed the acquisition of the outstanding shares of Coventor, Inc. (“Coventor”), a privately-held company that is a provider of simulation and modeling solutions for semiconductor process technology, micro-electromechanical systems (MEMS), and the Internet of Things, for a total purchase consideration of $137.6 million. The following table represents the preliminary purchase price allocation and summarizes the aggregate estimated fair value of the net assets acquired on the closing date of the acquisition:
The preliminary fair values of net tangible and intangible assets acquired were based on preliminary valuations, and management’s estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). The primary area that remains open relates to the fair value of intangible assets, certain tangible assets and liabilities assumed and income taxes. The Company expects to continue to obtain information to assist us in determining the fair value of the net assets acquired during the measurement period. The operating results of the acquired entity, from the date of acquisition, have been included in the Company’s Condensed Consolidated Financial Statements for the three and six months ended December 24, 2017. Goodwill represents the excess of the purchase price over the net tangible and identifiable intangible assets acquired. None of the goodwill recognized is deductible for income tax purposes. The identified intangible assets assumed in the acquisition of Coventor were recognized as follows based upon their fair values as of August 28, 2017:
Acquired existing technology represents the fair value of products that have reached technological feasibility and are a part of Coventor’s product offerings and customer relationships represent the fair values of the underlying relationships and agreements with Coventor’s customers. |
BASIS OF PRESENTATION (Policies) |
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Dec. 24, 2017 | |||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||
Consolidation | The condensed consolidated financial statements include the accounts of Lam Research and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
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Fiscal Period | The Company’s reporting period is a 52/53-week fiscal year. The Company’s current fiscal year will end June 24, 2018 and includes 52 weeks. |
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Recent Accounting Pronouncements | Recently Adopted In November 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes.” This ASU amends existing guidance to require that deferred income tax assets and liabilities be classified as non-current in a classified balance sheet, and eliminates the prior guidance which required an entity to separate deferred tax assets and liabilities into a current amount and a non-current amount in a classified balance sheet. The Company adopted this standard prospectively in the first quarter of fiscal year 2018. The implementation resulted in a net reduction of prepaid expense and other current assets of $49.7 million, accrued expense and other current liabilities of $5.3 million, and other long-term liabilities of $39.4 million; and an increase in other assets of $5.0 million in the Company’s Condensed Consolidated Balance Sheet, and had no impact on cash provided by or used in operations for any period presented. In March 2016, the FASB released ASU 2016-9, “Compensation – Stock Compensation.” Key changes in the amendment include:
The Company adopted this standard in the first quarter of fiscal year 2018. As a result of the adoption, the Company recorded a $40.1 million cumulative-effect adjustment to retained earnings for the recognition of previously unrecognized excess tax benefits for all years prior to the adoption. As required by the standard update, the amendment was applied prospectively to recognize excess tax benefits or deficiencies in the income statement in the period of occurrence. Accordingly, the provision for income taxes in the three and six months ended December 24, 2017 included excess tax benefits of $11.0 million and $13.0 million, respectively, that decreased the income tax provision. Additionally, the Company has elected to apply the change in cash flow classification on a prospective basis. The Company has elected to continue to estimate the number of forfeitures expected to occur to determine the amount of compensation cost to be recognized each period. The Company has elected to adopt the effects of the standard update with regard to the income tax withholdings obligations on a prospective basis. Such withholdings during the three and six months ended December 24, 2017 were not material. Updates Not Yet Effective In May 2014, the FASB released Accounting Standards Update (“ASU”) 2014-9, “Revenue from Contracts with Customers,” to supersede nearly all existing revenue recognition guidance under GAAP. The FASB issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016, May 2016 and December 2016 within ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20, respectively. The core principle of the standard is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The new standard defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price, and allocating the transaction price to each separate performance obligation. The Company is required to adopt these standards starting in the first quarter of fiscal year 2019 using either of two methods: (1) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within the standard; or (2) retrospective with the cumulative effect of initially applying the standard recognized at the date of initial application and providing certain additional disclosures as defined per the standard. The Company has not yet selected a transition method. The Company is continuing its evaluation of the impact that the new standard will have on its Condensed Consolidated Financial Statements and disclosures, business processes, systems, and controls. While the Company’s evaluation of the impact of the standard on its financial statements with respect to its spare parts and service revenue has not been completed, the Company believes that the timing of revenue recognition for certain of its systems will generally be earlier than under existing revenue recognition guidance. The Company continues to evaluate the impact to its revenues related to its pending adoption of these standards and its preliminary assessments are subject to change. In January 2016, the FASB released ASU 2016-1, “Financial Instruments – Overall – Recognition and Measurement of Financial Assets and Financial Liabilities.” The amendment changes the accounting for and financial statement presentation of equity investments, other than those accounted for under the equity method of accounting or those that result in consolidation of the investee. The amendment provides clarity on the measurement methodology to be used for the required disclosure of fair value of financial instruments measured at amortized cost on the balance sheet and clarifies that an entity should evaluate the need for a valuation allowance on deferred tax assets related to available-for-sale securities in combination with the entity’s other deferred tax assets, among other changes. The Company is required to adopt this standard starting in the first quarter of fiscal year 2019 and does not anticipate that implementation will have a material impact on its Condensed Consolidated Financial Statements. In January 2016, the FASB released ASU 2016-2, “Leases.” The amendment requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. The amendment offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. The Company is required to adopt this standard starting in the first quarter of fiscal year 2020 using a modified-retrospective approach on the earliest period presented. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption on its Condensed Consolidated Financial Statements. In June 2016, the FASB released ASU 2016-13, “Financial Instruments – Credit Losses.” The amendment revises the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses on financial instruments, including but not limited to, available for sale debt securities and accounts receivable. The Company is required to adopt this standard starting in the first quarter of fiscal year 2021 using a modified-retrospective approach. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption on its Condensed Consolidated Financial Statements. In August 2016, the FASB released ASU 2016-15, “Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments.” The amendment provides and clarifies guidance on the classification of certain cash receipts and cash payments in the statement of cash flows to eliminate diversity in practice. The Company is required to adopt the standard update in the first quarter of fiscal year 2019, with a retrospective transition method required. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption on its Condensed Consolidated Financial Statements. In October 2016, the FASB released ASU 2016-16, “Income Tax – Intra-Entity Transfers of Assets Other than Inventory.” This standard update improves the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Early adoption is permitted. The Company is required to adopt the standard in the first quarter of fiscal year 2019 using a modified-retrospective approach through a cumulative-effect adjustment directly to retained earnings. The Company is currently in the process of evaluating the impact of adoption on its Condensed Consolidated Financial Statements. In November 2016, the FASB released ASU 2016-18, “Statement of Cash Flows – Restricted Cash.” This standard update requires that restricted cash and restricted cash equivalents be included in cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown in the statement of cash flows. The Company is required to adopt this standard in the first quarter of fiscal year 2019, with a retrospective transition method required. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption on its Condensed Consolidated Financial Statements. In August 2017, the FASB released ASU 2017-12, “Targeted Improvements to Accounting for Hedging Activities.” The new guidance is intended to: (1) more closely align hedge accounting with an entity’s risk management strategies, (2) simplify the application of hedge accounting by eliminating the requirement to separately measure and report hedge ineffectiveness, and (3) increase transparency around the scope and results of hedging programs. The Company is required to adopt the standard in the first quarter of fiscal year 2020, using a modified-retrospective approach for any cash flow or net investment hedges that exist on the date of adoption. The presentation and disclosure requirements as defined per the standard are to be applied prospectively. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption on its Condensed Consolidated Financial Statements. |
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Inventories | Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. System shipments to Japanese customers, for which title does not transfer until customer acceptance, are classified as finished goods inventory and carried at cost until title transfers. |
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Warranties | The Company provides standard warranties on its systems. The liability amount is based on actual historical warranty spending activity by type of system, customer, and geographic region, modified for any known differences such as the impact of system reliability improvements. |
EQUITY-BASED COMPENSATION PLANS (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recognized Equity Based Compensation Expense and Related Income Tax Benefit | The Company recognized the following equity-based compensation expense (including expense related to the employee stock purchase plan) and related income tax benefit in the Condensed Consolidated Statements of Operations:
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Schedule of ESPP Weighted-Average Assumptions | Purchase rights under the 1999 ESPP were valued using the Black-Scholes option valuation model and the following weighted-average assumptions for the three and six months ended December 24, 2017 and December 25, 2016:
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OTHER EXPENSE, NET (Tables) |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Other Expense, Net | The significant components of other expense, net, are as follows:
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NET (LOSS) INCOME PER SHARE (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Numerators and Denominators of Basic and Diluted Computations for Net Income Per Share | The following table reconciles the numerators and denominators of the basic and diluted computations for net (loss) income per share.
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Schedule of Potentially Dilutive Securities Excluded from EPS Calculations | The following potentially dilutive securities were excluded:
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FINANCIAL INSTRUMENTS (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents, Investments, Restricted Cash and Investments and Other Assets Measured at Fair Value on Recurring Basis | The following table sets forth the Company’s cash, cash equivalents, investments, restricted cash and investments, and other assets measured at fair value on a recurring basis as of December 24, 2017, and June 25, 2017:
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Schedule of Cash, Cash Equivalents, Investments and Restricted Cash and Investments in Unrealized Loss Positions | The following is an analysis of the Company’s cash, cash equivalents, investments, and restricted cash and investment in unrealized loss positions:
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Schedule of Amortized Cost and Fair Value of Cash Equivalents, Investments, Restricted Cash and Investments with Contractual Maturities | The amortized cost and fair value of cash equivalents, investments, and restricted investments with contractual maturities are as follows as of December 24, 2017:
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Schedule of Outstanding Foreign Currency Forward Contracts | As of December 24, 2017, the Company had the following outstanding foreign currency contracts that were entered into under its cash flow and balance sheet hedge programs:
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Schedule of Fair Value of Derivatives Instruments | The fair value of derivative instruments in the Company’s Condensed Consolidated Balance Sheets as of December 24, 2017, and June 25, 2017 were as follows:
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Schedule of Derivative Instruments Designated as Cash Flow Hedges in Statements of Operations | The effect of derivative instruments designated as cash flow hedges on the Company’s Condensed Consolidated Statements of Operations, including accumulated other comprehensive income (“AOCI”) was as follows:
The effect of derivative instruments not designated as cash flow hedges on the Company’s Condensed Consolidated Statements of Operations was as follows:
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INVENTORIES (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 24, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories | Inventories consist of the following:
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GOODWILL AND INTANGIBLE ASSETS (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 24, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets | The following table provides the Company’s intangible assets:
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Estimated Future Amortization Expense of Intangible Assets | The estimated future amortization expense of intangible assets as of December 24, 2017, was as follows:
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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 24, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following:
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LONG-TERM DEBT AND OTHER BORROWINGS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 24, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding Debt | As of December 24, 2017, and June 25, 2017, the Company’s outstanding debt consisted of the following:
____________________________ (1) As of December 24, 2017, these notes were convertible at the option of the bondholder, as a result of the condition described in (4) below. Upon closure of the conversion period, the 2041 Notes not converted will be reclassified back into noncurrent liabilities and the temporary equity will be reclassified into permanent equity. (2) As of June 25, 2017, these notes were convertible at the option of the bond holder, as a result of the condition described in (4) below. (3) Represents the weighted average effective interest rate for all outstanding balances as of December 24, 2017. (4) As of the report date, 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. |
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Components of Convertible Notes | Selected additional information regarding the Convertible Notes outstanding as of December 24, 2017, and June 25, 2017, is as follows:
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Warrants and Convertible Note Hedge Arrangements | The following table presents the details of the warrants and convertible note hedge arrangements as of December 24, 2017:
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Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | Selected additional information regarding the Senior Notes outstanding as of December 24, 2017, is as follows:
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Schedule of Recognized Interest Cost Relating to Both Contractual Interest Coupon and Amortization of Discount on Liability Component of Notes | The following table presents the amount of interest cost recognized relating to both the contractual interest coupon and amortization of the debt discount, issuance costs, and effective portion of interest rate contracts with respect to the Convertible Notes, the Senior Notes, the term loan agreement, commercial paper, and the revolving credit facility during the three and six months ended December 24, 2017, and December 25, 2016.
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COMMITMENTS AND CONTINGENCIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 24, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warranties | Changes in the Company’s product warranty reserves were as follows:
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STOCK REPURCHASE PROGRAM (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 24, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchases Under the Repurchase Program | Repurchases under the repurchase program were as follows during the periods indicated:
(1) Average price paid per share excludes effect of accelerated share repurchases; see additional disclosure below regarding our accelerated share repurchase activity during the fiscal year. |
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 24, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive income (loss) (“AOCI”), net of tax at the end of the period, as well as the activity during the period, were as follows:
(1) Amount of after tax gain reclassified from accumulated other comprehensive income into net (loss) income located in other expense, net. (2)Amount of after tax gain reclassified from AOCI into net (loss) income located in revenue: $31 loss; cost of goods sold:$2,047 gain; selling, general, and administrative expenses: $1,296 gain; and other income and expense: $41 loss. |
BUSINESS COMBINATIONS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 24, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Preliminary Purchase Price Allocation | The following table represents the preliminary purchase price allocation and summarizes the aggregate estimated fair value of the net assets acquired on the closing date of the acquisition:
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Schedule of Identified Intangible Assets Assumed in the Acquisition | The identified intangible assets assumed in the acquisition of Coventor were recognized as follows based upon their fair values as of August 28, 2017:
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RECENT ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Dec. 24, 2017 |
Dec. 24, 2017 |
Sep. 24, 2017 |
Jun. 25, 2017 |
[1] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Prepaid expenses and other current assets | $ 179,944 | $ 179,944 | $ 195,022 | ||||
Accrued expenses and other current liabilities | 1,339,612 | 1,339,612 | 969,361 | ||||
Other long-term liabilities | 118,177 | 118,177 | 280,186 | ||||
Other assets | 316,660 | 316,660 | $ 241,799 | ||||
Excess tax benefit | $ 11,000 | $ 13,000 | |||||
ASU 2015-17 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Prepaid expenses and other current assets | $ (49,700) | ||||||
Accrued expenses and other current liabilities | (5,300) | ||||||
Other long-term liabilities | (39,400) | ||||||
Other assets | 5,000 | ||||||
ASU 2016-9 | Retained earnings | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Cumulative-effect adjustment to retained earnings | $ 40,100 | ||||||
|
EQUITY-BASED COMPENSATION PLANS - Additional Information (Details) |
3 Months Ended | 6 Months Ended |
---|---|---|
Dec. 24, 2017
shares
|
Dec. 24, 2017
period
shares
|
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Options and restricted stock units vesting period (years) | 3 years | |
1999 ESPP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
ESPP purchase price per share as percentage of fair market value | 85.00% | |
Offering period | 12 months | |
Interim purchase periods | period | 2 | |
Shares issued | shares | 412,469 | 412,469 |
EQUITY-BASED COMPENSATION PLANS - Recognized Equity Based Compensation Expenses and Related Income Tax Benefit (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 24, 2017 |
Dec. 25, 2016 |
Dec. 24, 2017 |
Dec. 25, 2016 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Equity-based compensation expense | $ 42,124 | $ 32,255 | $ 83,907 | $ 70,850 |
Income tax benefit recognized related to equity-based compensation expense | $ 18,089 | $ 8,815 | $ 31,477 | $ 19,721 |
EQUITY-BASED COMPENSATION PLANS - Schedule of ESPP Weighted-Average Assumptions (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 24, 2017 |
Dec. 25, 2016 |
Dec. 24, 2017 |
Dec. 25, 2016 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Expected stock price volatility | 29.13% | 33.02% | 29.13% | 33.02% |
Risk-free interest rate | 0.82% | 0.43% | 0.82% | 0.43% |
Expected term (years) | 9 months 7 days | 9 months 7 days | 9 months 7 days | 9 months 7 days |
Dividend yield | 0.89% | 1.14% | 0.89% | 1.14% |
OTHER EXPENSE, NET (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 24, 2017 |
Dec. 25, 2016 |
Dec. 24, 2017 |
Dec. 25, 2016 |
|
Other Income and Expenses [Abstract] | ||||
Interest income | $ 20,578 | $ 10,945 | $ 40,787 | $ 23,708 |
Interest expense | (23,317) | (26,641) | (47,222) | (68,070) |
Gains on deferred compensation plan related assets, net | 6,074 | 1,666 | 9,527 | 7,838 |
Loss on extinguishment of debt | 0 | (36,325) | 0 | (36,325) |
Foreign exchange (losses) gains, net | 1,196 | 1,011 | (1,804) | 2,230 |
Other, net | (7,683) | (5,679) | (9,942) | (7,558) |
Other expense, net | $ (3,152) | $ (55,023) | $ (8,654) | $ (78,177) |
INCOME TAX EXPENSE (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Dec. 24, 2017 |
Sep. 24, 2017 |
Dec. 25, 2016 |
Dec. 24, 2017 |
Dec. 25, 2016 |
|
Income Tax Disclosure [Abstract] | |||||
U.S. federal statutory tax rate | 35.00% | 21.00% | |||
Income tax expense | $ 744,174 | $ 52,014 | $ 841,204 | $ 80,972 | |
Effective income tax rate | 101.40% | 59.20% | |||
Blended tax rate in effect | 28.27% | ||||
Revaluation of deferred tax balance | $ 42,700 | ||||
Tax liability remeasured | $ 54,000 | ||||
Provisional amount for transition tax | 991,300 | ||||
Release of previously accrued deferred taxes | (287,800) | ||||
Net increase to tax expense | 703,500 | ||||
Tax examinations or lapses of statute of limitation | |||||
Income Tax Contingency [Line Items] | |||||
Estimated unrecognized tax benefits reduction | $ 94,000 | $ 94,000 |
NET (LOSS) INCOME PER SHARE - Schedule of Numerators and Denominators of Basic and Diluted Computations for Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 24, 2017 |
Dec. 25, 2016 |
Dec. 24, 2017 |
Dec. 25, 2016 |
|
Numerator: | ||||
Net (loss) income | $ (9,955) | $ 332,791 | $ 580,735 | $ 596,626 |
Denominator: | ||||
Basic average shares outstanding (in shares) | 161,135 | 162,659 | 161,638 | 161,633 |
Effect of potential dilutive securities: | ||||
Employee stock plans (in shares) | 0 | 2,243 | 2,636 | 2,193 |
Convertible notes (in shares) | 0 | 16,640 | 15,287 | 15,930 |
Warrants (in shares) | 0 | 2,001 | 4,397 | 2,024 |
Diluted average shares outstanding (in shares) | 161,135 | 183,543 | 183,958 | 181,780 |
Net income per share - basic (in dollars per share) | $ (0.06) | $ 2.05 | $ 3.59 | $ 3.69 |
Net income per share - diluted (in dollars per share) | $ (0.06) | $ 1.81 | $ 3.16 | $ 3.28 |
NET (LOSS) INCOME PER SHARE - Schedule of Potentially Dilutive Securities Excluded from EPS Calculations (Details) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 24, 2017 |
Dec. 25, 2016 |
Dec. 24, 2017 |
Dec. 25, 2016 |
|
Options and RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of potentially dilutive securities (in shares) | 7 | 0 | 20 | 3 |
Employee stock plans | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of potentially dilutive securities (in shares) | 2,757 | 0 | 0 | 0 |
Convertible notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of potentially dilutive securities (in shares) | 15,423 | 0 | 0 | 0 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of potentially dilutive securities (in shares) | 4,721 | 0 | 0 | 0 |
FINANCIAL INSTRUMENTS - Cash, Cash Equivalents, Investments, Restricted Cash and Investments and Other Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands |
Dec. 24, 2017 |
Jun. 25, 2017 |
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost | $ 6,037,711 | $ 6,349,485 |
Unrealized Gain | 4,727 | 8,968 |
Unrealized (Loss) | (24,604) | (4,832) |
Fair Value | 6,017,834 | 6,353,621 |
Cash and Cash Equivalents | 1,745,173 | 2,377,534 |
Investments | 3,954,526 | 3,663,628 |
Restricted Cash & Investments | 255,984 | 256,205 |
Other Assets | 62,151 | 56,254 |
Fair Value Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost | 2,293,416 | 2,901,178 |
Unrealized Gain | 3,844 | 3,691 |
Unrealized (Loss) | (9,028) | (2,111) |
Fair Value | 2,288,232 | 2,902,758 |
Cash and Cash Equivalents | 1,152,169 | 1,822,353 |
Investments | 823,885 | 774,124 |
Restricted Cash & Investments | 250,027 | 250,027 |
Other Assets | 62,151 | 56,254 |
Fair Value Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost | 3,149,942 | 2,896,999 |
Unrealized Gain | 883 | 5,277 |
Unrealized (Loss) | (15,576) | (2,721) |
Fair Value | 3,135,249 | 2,899,555 |
Cash and Cash Equivalents | 4,608 | 10,051 |
Investments | 3,130,641 | 2,889,504 |
Restricted Cash & Investments | 0 | 0 |
Other Assets | 0 | 0 |
Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost | 594,353 | 551,308 |
Unrealized Gain | 0 | 0 |
Unrealized (Loss) | 0 | 0 |
Fair Value | 594,353 | 551,308 |
Cash and Cash Equivalents | 588,396 | 545,130 |
Investments | 0 | 0 |
Restricted Cash & Investments | 5,957 | 6,178 |
Other Assets | 0 | 0 |
Time deposit | Fair Value Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost | 521,265 | 640,666 |
Unrealized Gain | 0 | 0 |
Unrealized (Loss) | 0 | 0 |
Fair Value | 521,265 | 640,666 |
Cash and Cash Equivalents | 271,238 | 390,639 |
Investments | 0 | 0 |
Restricted Cash & Investments | 250,027 | 250,027 |
Other Assets | 0 | 0 |
Money market funds | Fair Value Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost | 878,732 | 1,423,417 |
Unrealized Gain | 0 | 0 |
Unrealized (Loss) | 0 | 0 |
Fair Value | 878,732 | 1,423,417 |
Cash and Cash Equivalents | 878,732 | 1,423,417 |
Investments | 0 | 0 |
Restricted Cash & Investments | 0 | 0 |
Other Assets | 0 | 0 |
U.S. Treasury and agencies | Fair Value Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost | 835,112 | 783,848 |
Unrealized Gain | 0 | 684 |
Unrealized (Loss) | (9,028) | (2,111) |
Fair Value | 826,084 | 782,421 |
Cash and Cash Equivalents | 2,199 | 8,297 |
Investments | 823,885 | 774,124 |
Restricted Cash & Investments | 0 | 0 |
Other Assets | 0 | 0 |
U.S. Treasury and agencies | Fair Value Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost | 12,795 | |
Unrealized Gain | 0 | |
Unrealized (Loss) | (167) | |
Fair Value | 12,628 | |
Cash and Cash Equivalents | 0 | |
Investments | 12,628 | |
Restricted Cash & Investments | 0 | |
Other Assets | 0 | |
Mutual funds | Fair Value Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost | 58,307 | 53,247 |
Unrealized Gain | 3,844 | 3,007 |
Unrealized (Loss) | 0 | 0 |
Fair Value | 62,151 | 56,254 |
Cash and Cash Equivalents | 0 | 0 |
Investments | 0 | 0 |
Restricted Cash & Investments | 0 | 0 |
Other Assets | 62,151 | 56,254 |
Municipal notes and bonds | Fair Value Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost | 179,475 | 194,575 |
Unrealized Gain | 10 | 308 |
Unrealized (Loss) | (649) | (7) |
Fair Value | 178,836 | 194,876 |
Cash and Cash Equivalents | 0 | 0 |
Investments | 178,836 | 194,876 |
Restricted Cash & Investments | 0 | 0 |
Other Assets | 0 | 0 |
Government-sponsored enterprises | Fair Value Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost | 47,925 | 24,502 |
Unrealized Gain | 0 | 0 |
Unrealized (Loss) | (602) | (6) |
Fair Value | 47,323 | 24,496 |
Cash and Cash Equivalents | 0 | 0 |
Investments | 47,323 | 24,496 |
Restricted Cash & Investments | 0 | 0 |
Other Assets | 0 | 0 |
Foreign government bonds | Fair Value Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost | 61,006 | 62,917 |
Unrealized Gain | 0 | 219 |
Unrealized (Loss) | (490) | (114) |
Fair Value | 60,516 | 63,022 |
Cash and Cash Equivalents | 0 | 0 |
Investments | 60,516 | 63,022 |
Restricted Cash & Investments | 0 | 0 |
Other Assets | 0 | 0 |
Corporate notes and bonds | Fair Value Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost | 2,686,080 | 2,433,622 |
Unrealized Gain | 849 | 4,654 |
Unrealized (Loss) | (12,781) | (1,840) |
Fair Value | 2,674,148 | 2,436,436 |
Cash and Cash Equivalents | 4,608 | 10,051 |
Investments | 2,669,540 | 2,426,385 |
Restricted Cash & Investments | 0 | 0 |
Other Assets | 0 | 0 |
Mortgage backed securities — residential | Fair Value Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost | 53,506 | 102,760 |
Unrealized Gain | 24 | 87 |
Unrealized (Loss) | (325) | (489) |
Fair Value | 53,205 | 102,358 |
Cash and Cash Equivalents | 0 | 0 |
Investments | 53,205 | 102,358 |
Restricted Cash & Investments | 0 | 0 |
Other Assets | 0 | 0 |
Mortgage backed securities — commercial | Fair Value Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost | 121,950 | 65,828 |
Unrealized Gain | 0 | 9 |
Unrealized (Loss) | (729) | (98) |
Fair Value | 121,221 | 65,739 |
Cash and Cash Equivalents | 0 | 0 |
Investments | 121,221 | 65,739 |
Restricted Cash & Investments | 0 | 0 |
Other Assets | $ 0 | $ 0 |
FINANCIAL INSTRUMENTS - Additional Information (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Dec. 24, 2017 |
Dec. 25, 2016 |
Dec. 24, 2017 |
Dec. 25, 2016 |
Jun. 25, 2017 |
|
Fair Value Disclosures [Abstract] | |||||
Other than temporary impairment included in net realized gains (losses) | $ 0 | $ 0 | $ 0 | $ 0 | |
Gross realized gains from sale of investments | 200,000 | 100,000 | 1,000,000 | 2,700,000 | |
Gross realized losses from sale of investments | (1,100,000) | $ (400,000) | (2,100,000) | $ (600,000) | |
Foreign exchange forward contracts | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Foreign exchange contracts amount of offset, assets | 4,100,000 | 4,100,000 | |||
Net derivative asset from master netting agreements | 5,600,000 | 5,600,000 | |||
Foreign exchange contracts amount of offset, liabilities | 4,100,000 | 4,100,000 | $ 5,900,000 | ||
Net derivative liability from master netting agreements | $ 15,500,000 | $ 15,500,000 | |||
Foreign exchange contracts | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Foreign exchange contracts amount of offset, assets | 5,900,000 | ||||
Net derivative asset from master netting agreements | 2,300,000 | ||||
Net derivative liability from master netting agreements | $ 7,400,000 | ||||
Cash Flow Hedges | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Foreign currency cash flow hedge, expiration period | 12 months | ||||
Gain reclassification from AOCI to income, in the next 12 months | $ 7,800,000 | ||||
Losses accumulated in other comprehensive income expected to reclassify from other comprehensive income into earnings | $ 1,900,000 | ||||
Gains (losses) accumulated in other comprehensive income expected to reclassify from other comprehensive income into earnings, estimate of time to transfer | 7 years 2 months 15 days | ||||
Cash Flow Hedges | Minimum | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Foreign currency cash flow hedge, expiration period | 12 months | ||||
Cash Flow Hedges | Maximum | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Foreign currency cash flow hedge, expiration period | 24 months |
FINANCIAL INSTRUMENTS - Schedule of Cash, Cash Equivalents, Investments and Restricted Cash and Investments Unrealized Loss Positions (Details) $ in Thousands |
Dec. 24, 2017
USD ($)
|
---|---|
Fair Value | |
Unrealized Losses Less than 12 Months | $ 3,230,450 |
Unrealized Losses 12 Months or Greater | 348,937 |
Total | 3,579,387 |
Gross Unrealized Loss | |
Unrealized Losses Less than 12 Months | (19,938) |
Unrealized Losses 12 Months or Greater | (4,666) |
Total | (24,604) |
U.S. Treasury and agencies | |
Fair Value | |
Unrealized Losses Less than 12 Months | 659,453 |
Unrealized Losses 12 Months or Greater | 161,386 |
Total | 820,839 |
Gross Unrealized Loss | |
Unrealized Losses Less than 12 Months | (6,546) |
Unrealized Losses 12 Months or Greater | (2,482) |
Total | (9,028) |
Municipal notes and bonds | |
Fair Value | |
Unrealized Losses Less than 12 Months | 168,189 |
Unrealized Losses 12 Months or Greater | 0 |
Total | 168,189 |
Gross Unrealized Loss | |
Unrealized Losses Less than 12 Months | (649) |
Unrealized Losses 12 Months or Greater | 0 |
Total | (649) |
Government-sponsored enterprises | |
Fair Value | |
Unrealized Losses Less than 12 Months | 27,681 |
Unrealized Losses 12 Months or Greater | 19,533 |
Total | 47,214 |
Gross Unrealized Loss | |
Unrealized Losses Less than 12 Months | (163) |
Unrealized Losses 12 Months or Greater | (439) |
Total | (602) |
Foreign government bonds | |
Fair Value | |
Unrealized Losses Less than 12 Months | 51,879 |
Unrealized Losses 12 Months or Greater | 8,425 |
Total | 60,304 |
Gross Unrealized Loss | |
Unrealized Losses Less than 12 Months | (382) |
Unrealized Losses 12 Months or Greater | (108) |
Total | (490) |
Corporate notes and bonds | |
Fair Value | |
Unrealized Losses Less than 12 Months | 2,160,923 |
Unrealized Losses 12 Months or Greater | 152,403 |
Total | 2,313,326 |
Gross Unrealized Loss | |
Unrealized Losses Less than 12 Months | (11,215) |
Unrealized Losses 12 Months or Greater | (1,566) |
Total | (12,781) |
Mortgage backed securities — residential | |
Fair Value | |
Unrealized Losses Less than 12 Months | 46,771 |
Unrealized Losses 12 Months or Greater | 1,789 |
Total | 48,560 |
Gross Unrealized Loss | |
Unrealized Losses Less than 12 Months | (309) |
Unrealized Losses 12 Months or Greater | (16) |
Total | (325) |
Mortgage backed securities — commercial | |
Fair Value | |
Unrealized Losses Less than 12 Months | 115,554 |
Unrealized Losses 12 Months or Greater | 5,401 |
Total | 120,955 |
Gross Unrealized Loss | |
Unrealized Losses Less than 12 Months | (674) |
Unrealized Losses 12 Months or Greater | (55) |
Total | $ (729) |
FINANCIAL INSTRUMENTS - Schedule of Amortized Cost and Fair Value of Cash Equivalents, Investments, and Restricted Cash and Investments with Contractual Maturities (Details) $ in Thousands |
Dec. 24, 2017
USD ($)
|
---|---|
Cost | |
Due in one year or less | $ 1,995,451 |
Due after one year through five years | 3,217,096 |
Due in more than five years | 172,504 |
Total | 5,385,051 |
Estimated Fair Value | |
Due in one year or less | 1,994,497 |
Due after one year through five years | 3,195,218 |
Due in more than five years | 171,615 |
Total | $ 5,361,330 |
FINANCIAL INSTRUMENTS - Schedule of Outstanding Foreign Currency Forward Contracts (Details) - Foreign exchange contracts $ in Thousands |
Dec. 24, 2017
USD ($)
|
---|---|
Foreign currency forward contracts | Buy Contracts | Derivatives Designated as Hedging Instruments | |
Derivative [Line Items] | |
Derivative notional amount | $ 103,342 |
Foreign currency forward contracts | Buy Contracts | Derivatives Designated as Hedging Instruments | Japanese yen | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Buy Contracts | Derivatives Designated as Hedging Instruments | Euro | |
Derivative [Line Items] | |
Derivative notional amount | 69,649 |
Foreign currency forward contracts | Buy Contracts | Derivatives Designated as Hedging Instruments | Korean won | |
Derivative [Line Items] | |
Derivative notional amount | 33,693 |
Foreign currency forward contracts | Buy Contracts | Derivatives Designated as Hedging Instruments | Taiwan dollar | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Buy Contracts | Derivatives Designated as Hedging Instruments | Swiss franc | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Buy Contracts | Derivatives Designated as Hedging Instruments | Chinese renminbi | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Buy Contracts | Derivatives Designated as Hedging Instruments | Singapore dollar | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Buy Contracts | Derivatives Designated as Hedging Instruments | British pound sterling | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Buy Contracts | Derivatives Not Designated as Hedging Instruments | |
Derivative [Line Items] | |
Derivative notional amount | 87,274 |
Foreign currency forward contracts | Buy Contracts | Derivatives Not Designated as Hedging Instruments | Japanese yen | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Buy Contracts | Derivatives Not Designated as Hedging Instruments | Euro | |
Derivative [Line Items] | |
Derivative notional amount | 33,044 |
Foreign currency forward contracts | Buy Contracts | Derivatives Not Designated as Hedging Instruments | Korean won | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Buy Contracts | Derivatives Not Designated as Hedging Instruments | Taiwan dollar | |
Derivative [Line Items] | |
Derivative notional amount | 20,047 |
Foreign currency forward contracts | Buy Contracts | Derivatives Not Designated as Hedging Instruments | Swiss franc | |
Derivative [Line Items] | |
Derivative notional amount | 15,225 |
Foreign currency forward contracts | Buy Contracts | Derivatives Not Designated as Hedging Instruments | Chinese renminbi | |
Derivative [Line Items] | |
Derivative notional amount | 7,529 |
Foreign currency forward contracts | Buy Contracts | Derivatives Not Designated as Hedging Instruments | Singapore dollar | |
Derivative [Line Items] | |
Derivative notional amount | 7,410 |
Foreign currency forward contracts | Buy Contracts | Derivatives Not Designated as Hedging Instruments | British pound sterling | |
Derivative [Line Items] | |
Derivative notional amount | 4,019 |
Foreign currency forward contracts | Sell Contracts | Derivatives Designated as Hedging Instruments | |
Derivative [Line Items] | |
Derivative notional amount | 512,577 |
Foreign currency forward contracts | Sell Contracts | Derivatives Designated as Hedging Instruments | Japanese yen | |
Derivative [Line Items] | |
Derivative notional amount | 512,577 |
Foreign currency forward contracts | Sell Contracts | Derivatives Designated as Hedging Instruments | Euro | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Sell Contracts | Derivatives Designated as Hedging Instruments | Korean won | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Sell Contracts | Derivatives Designated as Hedging Instruments | Taiwan dollar | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Sell Contracts | Derivatives Designated as Hedging Instruments | Swiss franc | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Sell Contracts | Derivatives Designated as Hedging Instruments | Chinese renminbi | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Sell Contracts | Derivatives Designated as Hedging Instruments | Singapore dollar | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Sell Contracts | Derivatives Designated as Hedging Instruments | British pound sterling | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Sell Contracts | Derivatives Not Designated as Hedging Instruments | |
Derivative [Line Items] | |
Derivative notional amount | 215,019 |
Foreign currency forward contracts | Sell Contracts | Derivatives Not Designated as Hedging Instruments | Japanese yen | |
Derivative [Line Items] | |
Derivative notional amount | 141,737 |
Foreign currency forward contracts | Sell Contracts | Derivatives Not Designated as Hedging Instruments | Euro | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Sell Contracts | Derivatives Not Designated as Hedging Instruments | Korean won | |
Derivative [Line Items] | |
Derivative notional amount | 73,282 |
Foreign currency forward contracts | Sell Contracts | Derivatives Not Designated as Hedging Instruments | Taiwan dollar | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Sell Contracts | Derivatives Not Designated as Hedging Instruments | Swiss franc | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Sell Contracts | Derivatives Not Designated as Hedging Instruments | Chinese renminbi | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Sell Contracts | Derivatives Not Designated as Hedging Instruments | Singapore dollar | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency forward contracts | Sell Contracts | Derivatives Not Designated as Hedging Instruments | British pound sterling | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency option contracts | Buy Contracts | Derivatives Designated as Hedging Instruments | Japanese yen | |
Derivative [Line Items] | |
Derivative notional amount | 36,036 |
Foreign currency option contracts | Buy Contracts | Derivatives Not Designated as Hedging Instruments | Japanese yen | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency option contracts | Sell Contracts | Derivatives Designated as Hedging Instruments | Japanese yen | |
Derivative [Line Items] | |
Derivative notional amount | 0 |
Foreign currency option contracts | Sell Contracts | Derivatives Not Designated as Hedging Instruments | Japanese yen | |
Derivative [Line Items] | |
Derivative notional amount | $ 0 |
FINANCIAL INSTRUMENTS - Schedule of Fair Value of Derivative Instruments (Details) - Fair Value of Derivative Instruments (Level 2) - USD ($) $ in Thousands |
Dec. 24, 2017 |
Jun. 25, 2017 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset Derivatives | $ 9,738 | $ 8,274 |
Liability Derivatives | 19,631 | 13,360 |
Derivatives Designated as Hedging Instruments | Prepaid expense and other assets | Foreign exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset Derivatives | 9,687 | 8,061 |
Derivatives Designated as Hedging Instruments | Accrued expenses and other current liabilities | Foreign exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liability Derivatives | 331 | 2,916 |
Derivatives Designated as Hedging Instruments | Accrued expenses and other current liabilities | Interest rate contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liability Derivatives | 4,662 | 2,833 |
Derivatives Designated as Hedging Instruments | Other long-term liabilities | Interest rate contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liability Derivatives | 14,520 | 7,269 |
Derivatives Not Designated as Hedging Instruments | Prepaid expense and other assets | Foreign exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset Derivatives | 51 | 213 |
Derivatives Not Designated as Hedging Instruments | Accrued expenses and other current liabilities | Foreign exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liability Derivatives | $ 118 | $ 342 |
FINANCIAL INSTRUMENTS - Schedule of Derivative Instruments Designated as Cash Flow Hedges in Statements of Operations Including Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 24, 2017 |
Dec. 25, 2016 |
Dec. 24, 2017 |
Dec. 25, 2016 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Gain (Loss) Recognized in AOCI (Effective Portion) | $ 7,738 | $ 17,004 | $ 11,528 | $ 14,302 |
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | 6,400 | 1,032 | 4,101 | (12,400) |
Gain (Loss) Recognized In Income (Excluded from Effectiveness) | 1,002 | 668 | 3,207 | 1,285 |
Foreign Exchange Contracts | Revenue | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Gain (Loss) Recognized in AOCI (Effective Portion) | 8,194 | 18,138 | 8,185 | 15,225 |
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | 3,771 | (420) | (35) | (14,025) |
Gain (Loss) Recognized In Income (Excluded from Effectiveness) | 1,225 | 708 | 3,772 | 1,413 |
Foreign Exchange Contracts | Cost of goods sold | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Gain (Loss) Recognized in AOCI (Effective Portion) | (250) | (786) | 2,193 | (551) |
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | 1,648 | (180) | 2,472 | (7) |
Gain (Loss) Recognized In Income (Excluded from Effectiveness) | (139) | (28) | (347) | (95) |
Foreign Exchange Contracts | Selling, general, and administrative | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Gain (Loss) Recognized in AOCI (Effective Portion) | (206) | (348) | 1,150 | (372) |
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | 1,012 | (146) | 1,726 | (155) |
Gain (Loss) Recognized In Income (Excluded from Effectiveness) | (49) | (15) | (166) | (36) |
Foreign Exchange Contracts | Other expense, net | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Gain (Loss) Recognized in AOCI (Effective Portion) | 0 | 0 | 0 | 0 |
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | 0 | 0 | 0 | 0 |
Gain (Loss) Recognized In Income (Excluded from Effectiveness) | (35) | 3 | (52) | 3 |
Foreign Exchange Contracts | Other income | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Gain (Loss) Recognized In Income | 2,612 | 4,343 | 5,284 | 3,960 |
Interest Rate Contracts | Other expense, net | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Gain (Loss) Recognized in AOCI (Effective Portion) | 0 | 0 | 0 | 0 |
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | (31) | 1,778 | (62) | 1,787 |
Gain (Loss) Recognized In Income (Excluded from Effectiveness) | $ 0 | $ 0 | $ 0 | $ 0 |
INVENTORIES (Details) - USD ($) $ in Thousands |
Dec. 24, 2017 |
Jun. 25, 2017 |
|||
---|---|---|---|---|---|
Inventory Disclosure [Abstract] | |||||
Raw materials | $ 820,157 | $ 625,600 | |||
Work-in-process | 263,910 | 213,066 | |||
Finished goods | 423,368 | 394,250 | |||
Total inventories | $ 1,507,435 | $ 1,232,916 | [1] | ||
|
GOODWILL AND INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Dec. 24, 2017 |
Dec. 25, 2016 |
Dec. 24, 2017 |
Dec. 25, 2016 |
Aug. 28, 2017 |
Jun. 25, 2017 |
[1] | |||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||
Goodwill | $ 1,485,230 | $ 1,485,230 | $ 99,144 | $ 1,385,673 | |||||
Tax deductible goodwill | 61,100 | 61,100 | |||||||
Intangible asset amortization expense | $ 40,800 | $ 38,600 | $ 80,100 | $ 77,300 | |||||
|
GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands |
Dec. 24, 2017 |
Jun. 25, 2017 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 1,381,563 | $ 1,331,427 |
Accumulated Amortization | (1,000,634) | (920,432) |
Net | 380,929 | 410,995 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 630,237 | 615,164 |
Accumulated Amortization | (400,189) | (366,439) |
Net | 230,048 | 248,725 |
Existing technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 669,559 | 643,196 |
Accumulated Amortization | (531,632) | (487,056) |
Net | 137,927 | 156,140 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 37,953 | 36,553 |
Accumulated Amortization | (32,507) | (31,238) |
Net | 5,446 | 5,315 |
Other intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 43,814 | 36,514 |
Accumulated Amortization | (36,306) | (35,699) |
Net | $ 7,508 | $ 815 |
GOODWILL AND INTANGIBLE ASSETS - Estimated Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands |
Dec. 24, 2017 |
Jun. 25, 2017 |
---|---|---|
Fiscal Year | ||
2018 (remaining 6 months) | $ 80,490 | |
2019 | 123,610 | |
2020 | 58,478 | |
2021 | 55,792 | |
2022 | 52,001 | |
Thereafter | 10,558 | |
Net | $ 380,929 | $ 410,995 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands |
Dec. 24, 2017 |
Jun. 25, 2017 |
|||
---|---|---|---|---|---|
Payables and Accruals [Abstract] | |||||
Accrued compensation | $ 556,110 | $ 447,363 | |||
Warranty reserves | 179,680 | 161,981 | |||
Income and other taxes payable | 310,810 | 95,127 | |||
Dividend payable | 79,743 | 72,738 | |||
Other | 213,269 | 192,152 | |||
Accrued expenses and other current liabilities | $ 1,339,612 | $ 969,361 | [1] | ||
|
LONG-TERM DEBT AND OTHER BORROWINGS - Schedule of Outstanding Debt (Details) - USD ($) |
Dec. 24, 2017 |
Jun. 25, 2017 |
Jun. 07, 2016 |
Mar. 12, 2015 |
Jun. 30, 2012 |
May 31, 2011 |
---|---|---|---|---|---|---|
Debt Instrument [Line Items] | ||||||
Total debt outstanding, at par | $ 3,332,260,000 | $ 2,878,510,000 | ||||
Unamortized discount | (138,651,000) | (178,589,000) | ||||
Fair value adjustment - interest rate contracts | (19,182,000) | (10,102,000) | ||||
Unamortized bond issuance costs | (2,434,000) | (3,161,000) | ||||
Total debt outstanding, at carrying value | 3,171,993,000 | 2,686,658,000 | ||||
Current portion of long-term debt, and commercial paper | 1,401,015,000 | 907,827,000 | ||||
Long-term debt | $ 1,770,978,000 | $ 1,778,831,000 | ||||
Commercial paper | ||||||
Debt Instrument [Line Items] | ||||||
Effective Interest Rate | 1.64% | 0.00% | ||||
Commercial paper | $ 800,000,000 | $ 0 | ||||
Fixed-rate 1.25% Convertible Notes Due May 15, 2018 (2018 Notes) | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes interest rate | 1.25% | |||||
Fixed-rate 2.625% Convertible Notes Due May 15, 2041 (2041 Notes) | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes interest rate | 2.625% | |||||
Convertible debt | Fixed-rate 1.25% Convertible Notes Due May 15, 2018 (2018 Notes) | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes interest rate | 1.25% | |||||
Effective Interest Rate | 5.27% | 5.27% | ||||
Amount | $ 206,124,000 | $ 447,436,000 | ||||
Convertible debt | Fixed-rate 2.625% Convertible Notes Due May 15, 2041 (2041 Notes) | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes interest rate | 2.625% | |||||
Effective Interest Rate | 4.28% | 4.28% | ||||
Amount | $ 526,136,000 | $ 631,074,000 | ||||
Senior notes | Fixed-rate 2.75% Senior Notes Due March 15, 2020 (2020 Notes) | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes interest rate | 2.75% | 2.75% | ||||
Effective Interest Rate | 2.88% | 2.88% | ||||
Amount | $ 500,000,000 | $ 500,000,000 | ||||
Senior notes | Fixed-rate 2.80% Senior Notes Due June 15, 2021 (2021 Notes) | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes interest rate | 2.80% | 2.80% | ||||
Effective Interest Rate | 2.95% | 2.95% | ||||
Amount | $ 800,000,000 | $ 800,000,000 | $ 800,000,000 | |||
Senior notes | Fixed-rate 3.80% Senior Notes Due March 15, 2025 (2025 Notes) | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes interest rate | 3.80% | 3.80% | ||||
Effective Interest Rate | 3.87% | 3.87% | ||||
Amount | $ 500,000,000 | $ 500,000,000 |
LONG-TERM DEBT AND OTHER BORROWINGS - Schedule of Outstanding Debt Footnotes (Details) - Convertible debt |
6 Months Ended |
---|---|
Dec. 24, 2017
d
| |
Debt Instrument [Line Items] | |
Stock price percentage of conversion price | 130.00% |
Number of days on which common stock sale price was greater than or equal to 130% of conversion price, in a period of 30 consecutive trading days ending on the last trading day of the preceding the quarter | 20 |
Number of consecutive trading days period required | 30 |
LONG-TERM DEBT AND OTHER BORROWINGS - Convertible Senior Notes (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | |
---|---|---|---|---|
Jun. 30, 2012 |
Dec. 24, 2017 |
Dec. 24, 2017 |
May 31, 2011 |
|
Debt Instrument [Line Items] | ||||
Notice of conversion | $ 227,800,000 | |||
Convertible debt | ||||
Debt Instrument [Line Items] | ||||
Conversion of notes | $ 44,600,000 | $ 346,300,000 | ||
Fixed-rate 1.25% Convertible Notes Due May 15, 2018 (2018 Notes) | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 450,000,000 | |||
Senior notes interest rate | 1.25% | |||
Fixed-rate 1.25% Convertible Notes Due May 15, 2018 (2018 Notes) | Convertible debt | ||||
Debt Instrument [Line Items] | ||||
Senior notes interest rate | 1.25% | 1.25% | ||
Fixed-rate 2.625% Convertible Notes Due May 15, 2041 (2041 Notes) | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 700,000,000 | |||
Senior notes interest rate | 2.625% | |||
Fixed-rate 2.625% Convertible Notes Due May 15, 2041 (2041 Notes) | Convertible debt | ||||
Debt Instrument [Line Items] | ||||
Senior notes interest rate | 2.625% | 2.625% | ||
Fixed-rate 2.625% Convertible Notes Due May 15, 2041 (2041 Notes) | Maximum | ||||
Debt Instrument [Line Items] | ||||
Maximum amount of contingent interest rate | 0.60% |
LONG-TERM DEBT AND OTHER BORROWINGS - Components of Convertible Senior Notes (Details) $ / shares in Units, shares in Thousands |
6 Months Ended | ||
---|---|---|---|
Dec. 24, 2017
USD ($)
$ / shares
shares
|
Dec. 25, 2016 |
Jun. 25, 2017
USD ($)
|
|
2018 Notes | |||
Debt Instrument [Line Items] | |||
Remaining amortization period (years) | 3 months 23 days | 9 months 23 days | |
Fair Value of Notes (Level 2) | $ 642,049,000 | ||
Conversion rate (shares of common stock per $1,000 principal amount of notes) | 0.0166603 | ||
Principal amount of convertible debt conversion increments | $ 1,000 | ||
Conversion price (per share of common stock) (in dollars per share) | $ / shares | $ 60.02 | ||
If-converted value in excess of par value | $ 434,986,000 | ||
Estimated share dilution using average quarterly stock price $195.72 per share | shares | 2,381 | ||
Average quarterly stock price (in dollars per share) | $ / shares | $ 195.72 | ||
2018 Notes | Permanent Equity | |||
Debt Instrument [Line Items] | |||
Carrying amount of equity component, net of tax | $ 94,516,000 | $ 89,604,000 | |
2018 Notes | Temporary Equity | |||
Debt Instrument [Line Items] | |||
Carrying amount of equity component, net of tax | $ 3,037,000 | 15,186,000 | |
2041 Notes | |||
Debt Instrument [Line Items] | |||
Remaining amortization period (years) | 23 years 3 months 23 days | 23 years 9 months 23 days | |
Fair Value of Notes (Level 2) | $ 2,943,299,000 | ||
Conversion rate (shares of common stock per $1,000 principal amount of notes) | 0.0298987 | ||
Principal amount of convertible debt conversion increments | $ 1,000 | ||
Conversion price (per share of common stock) (in dollars per share) | $ / shares | $ 33.45 | ||
If-converted value in excess of par value | $ 2,410,644,000 | ||
Estimated share dilution using average quarterly stock price $195.72 per share | shares | 13,042 | ||
Average quarterly stock price (in dollars per share) | $ / shares | $ 195.72 | ||
2041 Notes | Permanent Equity | |||
Debt Instrument [Line Items] | |||
Carrying amount of equity component, net of tax | $ 158,007,000 | 156,374,000 | |
2041 Notes | Temporary Equity | |||
Debt Instrument [Line Items] | |||
Carrying amount of equity component, net of tax | $ 127,387,000 | $ 154,675,000 |
LONG-TERM DEBT AND OTHER BORROWINGS - Convertible Note Hedges and Warrants (Details) - $ / shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 24, 2017 |
Dec. 25, 2016 |
Dec. 24, 2017 |
Dec. 25, 2016 |
|
Class of Warrant or Right [Line Items] | ||||
Estimated share dilution using average quarterly stock price $195.72 per share | 0 | 2,001 | 4,397 | 2,024 |
2018 Notes | ||||
Class of Warrant or Right [Line Items] | ||||
Shares received during settlement | 367 | 2,459 | ||
Average quarterly stock price (in dollars per share) | $ 195.72 | $ 195.72 | ||
2018 Notes | Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Underlying shares | 7,497 | |||
Estimated share dilution using average quarterly stock price $195.72 per share | 4,721 | |||
Average quarterly stock price (in dollars per share) | 195.72 | $ 195.72 | ||
Exercise price (in dollars per share) | 72.48 | 72.48 | ||
2018 Notes | Convertible Note Hedge | ||||
Class of Warrant or Right [Line Items] | ||||
Exercise price (in dollars per share) | $ 60.02 | $ 60.02 | ||
Number of shares available from counterparties | 3,434 | 3,434 |
LONG-TERM DEBT AND OTHER BORROWINGS - Senior Notes (Details) - Senior notes - USD ($) |
6 Months Ended | |||
---|---|---|---|---|
Mar. 12, 2015 |
Dec. 24, 2017 |
Jun. 25, 2017 |
Jun. 07, 2016 |
|
Debt Instrument [Line Items] | ||||
Percentage of principal amount of debt redeemed | 100.00% | |||
2020 Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 500,000,000 | |||
Senior notes interest rate | 2.75% | 2.75% | ||
Amount | $ 500,000,000 | $ 500,000,000 | ||
2025 Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 500,000,000 | |||
Senior notes interest rate | 3.80% | 3.80% | ||
Debt instrument, redemption price (percentage) | 101.00% | |||
Amount | $ 500,000,000 | 500,000,000 | ||
2021 Notes | ||||
Debt Instrument [Line Items] | ||||
Senior notes interest rate | 2.80% | 2.80% | ||
Percentage of principal amount of debt redeemed | 100.00% | |||
Debt instrument, redemption price (percentage) | 101.00% | |||
Amount | $ 800,000,000 | $ 800,000,000 | $ 800,000,000 |
LONG-TERM DEBT AND OTHER BORROWINGS - Schedule of Additional Senior Notes Information (Details) $ in Thousands |
6 Months Ended |
---|---|
Dec. 24, 2017
USD ($)
| |
2020 Notes | |
Debt Instrument [Line Items] | |
Remaining Amortization Period (years) | 2 years 2 months 18 days |
2020 Notes | Fair Value of Derivative Instruments (Level 2) | |
Debt Instrument [Line Items] | |
Fair Value of Notes (Level 2) | $ 503,330 |
2021 Notes | |
Debt Instrument [Line Items] | |
Remaining Amortization Period (years) | 3 years 5 months 20 days |
2021 Notes | Fair Value of Derivative Instruments (Level 2) | |
Debt Instrument [Line Items] | |
Fair Value of Notes (Level 2) | $ 804,120 |
2025 Notes | |
Debt Instrument [Line Items] | |
Remaining Amortization Period (years) | 7 years 2 months 18 days |
2025 Notes | Fair Value of Derivative Instruments (Level 2) | |
Debt Instrument [Line Items] | |
Fair Value of Notes (Level 2) | $ 518,060 |
LONG-TERM DEBT AND OTHER BORROWINGS - Commercial Paper Program (Details) - Commercial paper - USD ($) |
6 Months Ended | |
---|---|---|
Dec. 24, 2017 |
Nov. 13, 2017 |
|
Line of Credit Facility [Line Items] | ||
Unsecured private placement commercial paper notes, maximum aggregate principal | $ 1,250,000,000 | |
Line of Credit Facility, Interest Rate at Period End | 1.64% | |
Line of Credit Facility, Expiration Period | 30 days |
LONG-TERM DEBT AND OTHER BORROWINGS - Revolving Credit Facility (Details) - Revolving credit facility - USD ($) |
Oct. 13, 2017 |
Dec. 24, 2017 |
Oct. 12, 2017 |
---|---|---|---|
Extinguishment of Debt [Line Items] | |||
Additional increase in the facility | $ 500,000,000 | ||
Revolving unsecured credit facility | 1,250,000,000 | $ 750,000,000 | |
Additional increase in the facility, available expansion | 600,000,000 | ||
Revolving unsecured credit facility, available expansion | $ 1,850,000,000 | ||
Borrowings outstanding | $ 0 | ||
Federal Funds Rate | |||
Extinguishment of Debt [Line Items] | |||
Variable interest spread | 0.50% | ||
One-month LIBOR | |||
Extinguishment of Debt [Line Items] | |||
Variable interest spread | 1.00% | ||
One-month LIBOR | Minimum | |||
Extinguishment of Debt [Line Items] | |||
Variable interest spread | 0.00% | ||
One-month LIBOR | Maximum | |||
Extinguishment of Debt [Line Items] | |||
Variable interest spread | 0.50% | ||
LIBOR | Minimum | |||
Extinguishment of Debt [Line Items] | |||
Variable interest spread | 0.90% | ||
LIBOR | Maximum | |||
Extinguishment of Debt [Line Items] | |||
Variable interest spread | 1.50% |
LONG-TERM DEBT AND OTHER BORROWINGS - Schedule of Recognized Interest Cost Relating to Both Contractual Interest Coupon and Amortization of Discount on Liability Component of Notes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 24, 2017 |
Dec. 25, 2016 |
Dec. 24, 2017 |
Dec. 25, 2016 |
|
Debt Disclosure [Abstract] | ||||
Contractual interest coupon | $ 18,627 | $ 22,622 | $ 36,583 | $ 57,334 |
Amortization of interest discount | 3,410 | 5,673 | 7,514 | 11,587 |
Amortization of issuance costs | 544 | 531 | 1,029 | 1,449 |
Effect of interest rate contracts, net | (254) | (2,566) | (603) | (3,624) |
Total interest cost recognized | $ 22,327 | $ 26,260 | $ 44,523 | $ 66,746 |
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) - USD ($) |
6 Months Ended | ||||
---|---|---|---|---|---|
Dec. 24, 2017 |
Jun. 25, 2017 |
[1] | |||
Loss Contingencies [Line Items] | |||||
Restricted cash and investments | $ 255,984,000 | $ 256,205,000 | |||
Letters of Credit | |||||
Loss Contingencies [Line Items] | |||||
Guarantee obligation maximum exposure | 20,600,000 | ||||
Operating Leases | |||||
Loss Contingencies [Line Items] | |||||
Operating lease residual value of guarantee, maximum | $ 220,400,000 | ||||
Maximum percentage of aggregate investment value guaranteed | 100.00% | ||||
Guarantee obligation maximum exposure | $ 250,000,000.0 | ||||
Operating Lease Cash Collateral | |||||
Loss Contingencies [Line Items] | |||||
Restricted cash and investments | $ 250,000,000 | ||||
|
COMMITMENTS AND CONTINGENCIES - Schedule of Changes in Product Warranty Reserves (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 24, 2017 |
Dec. 25, 2016 |
Dec. 24, 2017 |
Dec. 25, 2016 |
|
Changes in Product Warranty Reserve | ||||
Balance at beginning of period | $ 168,337 | $ 103,226 | $ 161,981 | $ 100,321 |
Warranties issued during the period | 57,698 | 41,544 | 106,488 | 76,399 |
Settlements made during the period | (44,347) | (32,747) | (88,400) | (64,975) |
Changes in liability for pre-existing warranties | (2,008) | 7,311 | (389) | 7,589 |
Balance at end of period | $ 179,680 | $ 119,334 | $ 179,680 | $ 119,334 |
STOCK REPURCHASE PROGRAM - Additional Information (Details) |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Nov. 20, 2017
USD ($)
financial_institution
agreement
shares
|
Jun. 30, 2017
$ / shares
shares
|
Apr. 19, 2017
USD ($)
financial_institution
agreement
shares
|
Dec. 24, 2017
USD ($)
shares
|
Sep. 24, 2017
shares
|
Dec. 24, 2017
USD ($)
shares
|
Nov. 30, 2017
USD ($)
|
|
Equity [Abstract] | |||||||
Authorized repurchase of Company common stock (up to) | $ | $ 2,000,000,000 | ||||||
Net shares of settlements to cover tax withholding obligations (in shares) | shares | 98,000 | 109,000 | |||||
Amount paid for shares under net share settlements | $ | $ 18,400,000 | $ 20,200,000 | |||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Number of shares repurchased (in shares) | shares | 3,709,000 | 1,779,000 | |||||
November 2017 ASR | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Number of accelerated share repurchase agreements | agreement | 4 | ||||||
Number of financial institutions | financial_institution | 2 | ||||||
Total repurchase amount | $ | $ 1,000,000,000 | ||||||
Number of shares repurchased (in shares) | shares | 3,254,300 | ||||||
Percent of prepayment divided by closing stock price | 70.00% | ||||||
April 2017 ASR | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Number of accelerated share repurchase agreements | agreement | 2 | ||||||
Number of financial institutions | financial_institution | 2 | ||||||
Total repurchase amount | $ | $ 500,000,000 | ||||||
Number of shares repurchased (in shares) | shares | 780,000 | 2,570,000 | |||||
Percent of prepayment divided by closing stock price | 70.00% | ||||||
Weighted-average share price (in dollars per share) | $ / shares | $ 149.16 |
STOCK REPURCHASE PROGRAM - Repurchases Under the Repurchase Program (Details) - USD ($) $ / shares in Units, shares in Thousands |
1 Months Ended | 3 Months Ended | ||
---|---|---|---|---|
Nov. 30, 2017 |
Dec. 24, 2017 |
Sep. 24, 2017 |
Jun. 25, 2017 |
|
Equity [Abstract] | ||||
Total Number of Shares Repurchased | 3,709 | 1,779 | ||
Total Cost of Repurchase | $ 1,089,744,000 | $ 157,938,000 | ||
Average Price Paid Per Share (in dollars per share) | $ 196.28 | $ 158.40 | ||
Amount Available Under Repurchase Program | $ 2,124,203,000 | $ 1,034,459,000 | $ 124,203,000 | $ 282,141,000 |
Board authorized increase | $ 2,000,000,000.0 |
ACCUMULATED OTHER COMPREHENSIVE LOSS - Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Dec. 24, 2017 |
Dec. 25, 2016 |
Dec. 24, 2017 |
Dec. 25, 2016 |
|||
Change in Accumulated Other Comprehensive Loss | ||||||
Beginning balance | [1] | $ 6,817,451 | ||||
Other comprehensive income (loss) before reclassifications | (3,084) | |||||
Losses (income) reclassified from accumulated other comprehensive income (loss) to net (loss) income | 624 | |||||
Other comprehensive loss, net of tax | $ (11,373) | $ (13,077) | (2,460) | $ (744) | ||
Ending balance | 6,143,131 | 6,143,131 | ||||
Accumulated Foreign Currency Translation Adjustment | ||||||
Change in Accumulated Other Comprehensive Loss | ||||||
Beginning balance | (42,371) | |||||
Other comprehensive income (loss) before reclassifications | 9,174 | |||||
Losses (income) reclassified from accumulated other comprehensive income (loss) to net (loss) income | 3,934 | |||||
Other comprehensive loss, net of tax | 13,108 | |||||
Ending balance | (29,263) | (29,263) | ||||
Accumulated Unrealized Holding Gain (Loss) on Cash flow hedges | ||||||
Change in Accumulated Other Comprehensive Loss | ||||||
Beginning balance | (811) | |||||
Other comprehensive income (loss) before reclassifications | 9,992 | |||||
Losses (income) reclassified from accumulated other comprehensive income (loss) to net (loss) income | (3,271) | |||||
Other comprehensive loss, net of tax | 6,721 | |||||
Ending balance | 5,910 | 5,910 | ||||
Accumulated Unrealized Holding Gain (Loss) on Available-For-Sale Investments | ||||||
Change in Accumulated Other Comprehensive Loss | ||||||
Beginning balance | 1,106 | |||||
Other comprehensive income (loss) before reclassifications | (20,066) | |||||
Losses (income) reclassified from accumulated other comprehensive income (loss) to net (loss) income | (39) | |||||
Other comprehensive loss, net of tax | (20,105) | |||||
Ending balance | (18,999) | (18,999) | ||||
Accumulated Unrealized Components of Defined Benefit Plans | ||||||
Change in Accumulated Other Comprehensive Loss | ||||||
Beginning balance | (19,624) | |||||
Other comprehensive income (loss) before reclassifications | (2,184) | |||||
Losses (income) reclassified from accumulated other comprehensive income (loss) to net (loss) income | 0 | |||||
Other comprehensive loss, net of tax | (2,184) | |||||
Ending balance | (21,808) | (21,808) | ||||
Total | ||||||
Change in Accumulated Other Comprehensive Loss | ||||||
Beginning balance | (61,700) | |||||
Ending balance | $ (64,160) | $ (64,160) | ||||
|
ACCUMULATED OTHER COMPREHENSIVE LOSS - Components of Accumulated Other Comprehensive Loss Footnotes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 24, 2017 |
Dec. 25, 2016 |
Dec. 24, 2017 |
Dec. 25, 2016 |
|
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Revenue | $ 2,580,815 | $ 1,882,299 | $ 5,058,955 | $ 3,514,718 |
Cost of goods sold | 1,375,248 | 1,035,502 | 2,704,045 | 1,951,724 |
Selling, general, and administrative | 186,885 | 160,165 | 367,928 | 325,175 |
Other income and expense | $ (3,152) | $ (55,023) | (8,654) | $ (78,177) |
Accumulated Unrealized Holding Gain (Loss) on Cash flow hedges | Reclassified from accumulated other comprehensive income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Revenue | (31) | |||
Cost of goods sold | 2,047 | |||
Selling, general, and administrative | 1,296 | |||
Other income and expense | $ (41) |
BUSINESS COMBINATIONS - Additional Information (Details) $ in Millions |
Aug. 28, 2017
USD ($)
|
---|---|
Business Combinations [Abstract] | |
Total purchase consideration | $ 137.6 |
BUSINESS COMBINATIONS - Schedule of Preliminary Purchase Price Allocation (Details) - USD ($) $ in Thousands |
Dec. 24, 2017 |
Aug. 28, 2017 |
Jun. 25, 2017 |
[1] | ||
---|---|---|---|---|---|---|
Business Combinations [Abstract] | ||||||
Intangible assets | $ 48,500 | |||||
Assets acquired (including cash of $8.7 million) | 11,484 | |||||
Goodwill | $ 1,485,230 | 99,144 | $ 1,385,673 | |||
Liabilities assumed | (21,517) | |||||
Fair value of net assets acquired | 137,611 | |||||
Cash acquired | $ 8,700 | |||||
|
BUSINESS COMBINATIONS - Schedule of Identified Intangible Assets Assumed in the Acquisition (Details) $ in Thousands |
Aug. 28, 2017
USD ($)
|
---|---|
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 48,500 |
Weighted-Average Estimated Useful Life | 6 years |
Existing technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 26,200 |
Weighted-Average Estimated Useful Life | 6 years |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 15,000 |
Weighted-Average Estimated Useful Life | 6 years |
Trade names and other intangible assets | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 7,300 |
Weighted-Average Estimated Useful Life | 6 years 4 months 25 days |
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