PRESENTATION OF FINANCIAL INFORMATION

9 Months Ended

Jun. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

PRESENTATION OF FINANCIAL INFORMATION

PRESENTATION OF FINANCIAL INFORMATION

The unaudited consolidated financial statements include the accounts of Microsemi Corporation and its subsidiaries. Intercompany transactions have been eliminated in consolidation.

The consolidated financial information furnished herein is unaudited, but in the opinion of our management, includes all adjustments (all of which are normal or recurring adjustments) necessary for a fair statement of the results of operations for the periods indicated. The results of operations for the most recently reported quarter and first nine months of the current fiscal year are not necessarily indicative of the results to be expected for the full year.

The unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q, and therefore do not include all information and note disclosures necessary for a fair presentation of consolidated financial position, results of operations and cash flows in conformity with United States generally accepted accounting principles. The unaudited consolidated financial statements and notes thereto must be read in their entirety in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended September 30, 2012.

The unaudited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles, which require us to make estimates and assumptions that may materially affect the reported amounts of assets and liabilities at the date of the unaudited consolidated financial statements and revenues and expenses during the periods reported. Actual results could differ materially from those estimates. Information with respect to our critical accounting policies that we believe could have the most significant effect on our reported results and require subjective or complex judgments is contained in the notes to the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended September 30, 2012. In referencing a year, we are referring to the fiscal year ended on the Sunday closest to September 30.

Earnings Per Share

Basic earnings per share have been computed based upon the weighted-average number of common shares outstanding during the respective periods. Diluted earnings per share have been computed, when the result is dilutive, using the treasury stock method for stock awards outstanding during the respective periods. Earnings per share were calculated as follows (amounts in thousands, except per share data):

	Quarter Ended				Nine Months Ended
	June 30, 2013		July 1, 2012		June 30, 2013		July 1, 2012
Basic
Net income (loss)	$	18,279	$	8,126	$	29,588	$	(41,268	)
Weighted-average common shares outstanding	89,809		86,000		89,235		85,652
Basic earnings (loss) per share	$	0.20	$	0.09	$	0.33	$	(0.48	)
Diluted
Net income (loss)	$	18,279	$	8,126	$	29,588	$	(41,268	)
Weighted-average common shares outstanding for basic	89,809		86,000		89,235		85,652
Dilutive effect of stock awards	1,873		1,941		1,575		—
Weighted-average common shares outstanding on a diluted basis	91,682		87,941		90,810		85,652
Diluted earnings (loss) per share	$	0.20	$	0.09	$	0.33	$	(0.48	)

For the quarter and nine months ended June 30, 2013, we excluded 3.6 million and 4.0 million, respectively, of stock awards in the computation of diluted earnings per share as these stock awards would have been anti-dilutive. For the quarter ended July 1, 2012, 5.2 million stock awards were excluded in the computation of diluted earnings per share as these stock awards would have been anti-dilutive. For the nine months ended July 1, 2012, all stock awards outstanding were excluded as we reported a net loss for that period.

Reclassifications

Certain prior year amounts have been reclassified to conform to current year presentation.

Revision to Prior Year Consolidated Statement of Cash Flows 

During the first quarter of 2013, we revised our consolidated statement of cash flows to correct for an error in our 2012 presentation of excess tax benefits on stock awards. The correction resulted in an increase in cash flows from operating activities for the nine-months ended July 1, 2012 of $0.4 million and a corresponding decrease in cash flows from financing activities for the same amount. The revision had no impact on our total cash flows or cash and cash equivalents.

Recently Issued Accounting Standards

In December 2011, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2011-11, the objective of which is to provide additional disclosures on the effect or potential effect of rights of setoff associated with an entity's recognized assets and recognized liabilities within the scope of the update. The update primarily impacts financial instruments and derivatives subject to a master netting arrangement or similar agreement. ASU No. 2011-11 is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. We are currently assessing the disclosures required under this ASU.

In February 2013, the FASB issued ASU No. 2013-04, the objective of which is to provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date. The guidance in the update requires that these arrangements be recorded as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. ASU 2013-04 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. We are currently assessing the impact of this ASU on our consolidated financial position and results of operations.