SUMMARY OF ACCOUNTING POLICIES

3 Months Ended

Jun. 29, 2012

SUMMARY OF ACCOUNTING POLICIES

SUMMARY OF ACCOUNTING POLICIES

2.  SUMMARY OF ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) for interim financial information and in accordance with the requirements of Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements, and should be read in conjunction with the Company’s audited consolidated financial statements as of and for the fiscal year ended March 31, 2012 contained in the Company’s Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three-month period ended June 29, 2012 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2013.

The first quarter for fiscal 2013 and fiscal 2012 ended on June 29, 2012 and July 1, 2011, respectively. The second fiscal quarter for the current year ends on September 28, 2012 and the second fiscal quarter of the prior year ended on September 30, 2011.  The Company’s third fiscal quarter ends on December 31, and the fourth fiscal quarter and year ends on March 31 of each year.

During the three month period ended June 29, 2012, the Company finalized the sale of certain assets of its Vista Point Technologies camera modules business, including intellectual property and the China-based manufacturing operations to Tessera Technologies, Inc. (“Tessera Technologies”), and DigitalOptics Corporation, a wholly-owned subsidiary of Tessera Technologies. In accordance with the accounting guidance, the camera modules business represent a separate asset group and the divestiture qualifies as discontinued operations, and accordingly, the Company has reported the results of operations and financial position of this business in discontinued operations within the condensed consolidated statements of operations and the condensed consolidated balance sheets for all periods presented.

Cash and Cash Equivalents

Cash and cash equivalents consisted of the following:

	As of		As of
	June 29, 2012		March 31, 2012
	(In thousands)
Cash and bank balances	$	1,019,321	$	1,174,423
Money market funds and time deposits	265,732		343,906
	$	1,285,053	$	1,518,329

Inventories

The components of inventories, net of applicable lower of cost or market write-downs, were as follows:

	As of		As of
	June 29, 2012		March 31, 2012
	(In thousands)
Raw materials	$	1,882,465	$	1,950,181
Work-in-progress	507,902		537,240
Finished goods	767,563		820,649
	$	3,157,930	$	3,308,070

Other Current Assets

Other current assets includes approximately $513.9 million and $514.9 million as of June 29, 2012 and March 31, 2012, respectively, for the deferred purchase price receivable from our Global and North American Asset-Backed Securitization programs (see note 7).

Property and Equipment

Depreciation expense associated with property and equipment was approximately $100.6 million and $100.4 million for the three-month periods ended June 29, 2012 and July 1, 2011, respectively.

Goodwill and Other Intangibles

The following table summarizes the activity in the Company’s goodwill account during the three-month period ended June 29, 2012:

	Amount
	(In thousands)
Balance, beginning of the year	$	101,670
Acquisitions (1)	35,392
Foreign currency translation adjustments	(780		)
Balance, end of the quarter	$	136,282

(1) The amount is attributable to certain acquisitions that were not individually, nor in the aggregate, significant to the Company. See note 9 to the condensed consolidated financial statements for additional information.

The components of acquired intangible assets are as follows:

	As of June 29, 2012							As of March 31, 2012
	Gross					Net		Gross					Net
	Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
	Amount		Amortization			Amount		Amount		Amortization			Amount
	(In thousands)
Intangible assets:
Customer-related intangibles	$	276,476	$	(228,986	)	$	47,490	$	276,681	$	(221,238	)	$	55,443
Licenses and other intangibles	110,740		(9,923		)	100,817		22,740		(8,929		)	13,811
Total	$	387,216	$	(238,909	)	$	148,307	$	299,421	$	(230,167	)	$	69,254

The gross carrying amounts of intangible assets are removed when the recorded amounts have been fully amortized. During the three months ended June 29, 2012, the value of intangible assets increased by $88.0 million relating to a license agreement for exclusive manufacturing rights and certain manufacturing technologies and processes in connection with an acquisition as more fully described in note 9 to the condensed consolidated financial statements.  Total intangible amortization expense was $8.8 million and $13.3 million during the three-month periods ended June 29, 2012 and July 1, 2011. The estimated future annual amortization expense for acquired intangible assets is as follows:

Fiscal Year Ending March 31,	Total
	(In thousands)
2013 (1)	$	38,400
2014	42,155
2015	32,144
2016	26,809
2017	7,460
Thereafter	1,339
Total amortization expense	$	148,307

(1)  Represents estimated amortization for the nine-month period ending March 31, 2013.

Other Current Liabilities

Other current liabilities include customer working capital advances amounting to $174.2 million and $326.6 million and deferred revenue amounting to $286.0 million and $329.6 million as of June 29, 2012 and March 31, 2012, respectively. Additionally, as of June 29, 2012, $134.5 million was included in other current liabilities related to assets financed by a third party banking institution on behalf of one of our customers as discussed further in note 9 to the condensed consolidated financial statements.