FORM |
(Mark one) | |||||
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 |
(Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
The Nasdaq Global Select Market |
☒ | Accelerated filer | ☐ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
Page Number | ||||||||
PART I | FINANCIAL INFORMATION | |||||||
Item 1 | ||||||||
Condensed Consolidated Balance Sheets as of September 30, 2020 and June 30, 2020 | ||||||||
6 | ||||||||
Item 2 | ||||||||
Item 3 | ||||||||
Item 4 | ||||||||
PART II | OTHER INFORMATION | |||||||
Item 1 | ||||||||
Item 1A | ||||||||
Item 2 | ||||||||
Item 3 | ||||||||
Item 4 | ||||||||
Item 5 | ||||||||
Item 6 | ||||||||
(In thousands) | September 30, 2020 | June 30, 2020 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Marketable securities | |||||||||||
Accounts receivable, net | |||||||||||
Inventories | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Land, property and equipment, net | |||||||||||
Goodwill | |||||||||||
Deferred income taxes | |||||||||||
Purchased intangible assets, net | |||||||||||
Other non-current assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES, NON-CONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Deferred system revenue | |||||||||||
Deferred service revenue | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Non-current liabilities: | |||||||||||
Long-term debt | |||||||||||
Deferred tax liabilities | |||||||||||
Deferred service revenue | |||||||||||
Other non-current liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Notes 9, 14 and 15) | |||||||||||
Stockholders’ equity: | |||||||||||
Common stock and capital in excess of par value | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive income (loss) | ( | ( | |||||||||
Total KLA stockholders’ equity | |||||||||||
Non-controlling interest in consolidated subsidiaries | |||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended | |||||||||||
September 30, | |||||||||||
(In thousands, except per share amounts) | 2020 | 2019 | |||||||||
Revenues: | |||||||||||
Product | $ | $ | |||||||||
Service | |||||||||||
Total revenues | |||||||||||
Costs and expenses: | |||||||||||
Costs of revenues | |||||||||||
Research and development | |||||||||||
Selling, general and administrative | |||||||||||
Interest expense | |||||||||||
Other expense (income), net | ( | ||||||||||
Income before income taxes | |||||||||||
Provision for income taxes | |||||||||||
Net income | |||||||||||
Less: Net loss attributable to non-controlling interest | ( | ( | |||||||||
Net income attributable to KLA | $ | $ | |||||||||
Net income per share attributable to KLA | |||||||||||
Basic | $ | $ | |||||||||
Diluted | $ | $ | |||||||||
Weighted-average number of shares: | |||||||||||
Basic | |||||||||||
Diluted |
Three Months Ended | |||||||||||
September 30, | |||||||||||
(In thousands) | 2020 | 2019 | |||||||||
Net income | $ | $ | |||||||||
Other comprehensive income (loss): | |||||||||||
Currency translation adjustments: | |||||||||||
Cumulative currency translation adjustments | ( | ||||||||||
Income tax (provision) benefit | ( | ||||||||||
Net change related to currency translation adjustments | ( | ||||||||||
Cash flow hedges: | |||||||||||
Net unrealized gains (losses) arising during the period | ( | ( | |||||||||
Reclassification adjustments for net (gains) losses included in net income | ( | ||||||||||
Income tax (provision) benefit | ( | ||||||||||
Net change related to cash flow hedges | ( | ||||||||||
Net change related to unrecognized losses and transition obligations in connection with defined benefit plans | ( | ||||||||||
Available-for-sale securities: | |||||||||||
Net unrealized gains (losses) arising during the period | ( | ||||||||||
Reclassification adjustments for net (gains) losses included in net income | ( | ||||||||||
Income tax (provision) benefit | |||||||||||
Net change related to available-for-sale securities | ( | ||||||||||
Other comprehensive income (loss) | |||||||||||
Less: Comprehensive loss attributable to non-controlling interest | ( | ( | |||||||||
Total comprehensive income attributable to KLA | $ | $ |
Common Stock and Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total KLA Stockholder's Equity | Non- Controlling Interest | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | Shares | Amount | |||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2020 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||
— | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
Net income attributable to KLA | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Net loss attributable to non-controlling interest | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Net issuance under employee stock plans | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Cash dividends ($ | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2020 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Common Stock and Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total KLA Stockholder's Equity | Non- Controlling Interest | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | Shares | Amount | |||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2019 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Net income attributable to KLA | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Net loss attributable to non-controlling interest | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Net issuance under employee stock plans | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Cash dividends ($ | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2019 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||
September 30, | |||||||||||
(In thousands) | 2020 | 2019 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Loss (gain) on unrealized foreign exchange and other | ( | ||||||||||
Asset impairment charges | 865 | ||||||||||
Stock-based compensation expense | |||||||||||
Changes in assets and liabilities, net of assets acquired and liabilities assumed in business acquisitions: | |||||||||||
Accounts receivable | ( | ||||||||||
Inventories | ( | ( | |||||||||
Other assets | ( | ||||||||||
Accounts payable | ( | ||||||||||
Deferred system revenue | ( | ( | |||||||||
Deferred service revenue | ( | ( | |||||||||
Other liabilities | |||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Proceeds from sale of assets | |||||||||||
Business acquisitions, net of cash acquired | ( | ||||||||||
Capital expenditures | ( | ( | |||||||||
Purchases of available-for-sale securities | ( | ( | |||||||||
Proceeds from sale of available-for-sale securities | |||||||||||
Proceeds from maturity of available-for-sale securities | |||||||||||
Purchases of trading securities | ( | ( | |||||||||
Proceeds from sale of trading securities | |||||||||||
Proceeds from other investments | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Repayment of debt | ( | ||||||||||
Common stock repurchases | ( | ( | |||||||||
Payment of dividends to stockholders | ( | ( | |||||||||
Issuance of common stock | |||||||||||
Tax withholding payments related to vested and released restricted stock units | ( | ( | |||||||||
Payment of contingent consideration payable | ( | ||||||||||
Net cash used in financing activities | ( | ( | |||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
Net (decrease) increase in cash and cash equivalents | ( | ( | |||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
Supplemental cash flow disclosures: | |||||||||||
Income taxes paid | $ | $ | |||||||||
Interest paid | $ | $ | |||||||||
Non-cash activities: | |||||||||||
Contingent consideration (receivable) payable - financing activities | $ | ( | $ | ||||||||
Dividends payable - financing activities | $ | $ | |||||||||
Unsettled common stock repurchase - financing activities | $ | $ | |||||||||
Accrued purchases of land, property and equipment - investing activities | $ | $ | |||||||||
As of | As of | ||||||||||||||||||||||
(In thousands, except for percentage) | September 30, 2020 | June 30, 2020 | $ Change | % Change | |||||||||||||||||||
Accounts receivable, net | $ | $ | $ | ( | ( | % | |||||||||||||||||
Contract assets | $ | $ | $ | ( | ( | % | |||||||||||||||||
Contract liabilities | $ | $ | $ | ( | ( | % |
Level 1 | Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access. | |||||||
Level 2 | Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. | |||||||
Level 3 | Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Little or No Market Activity Inputs | |||||||||||||||||||||
As of September 30, 2020 (In thousands) | Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||
Corporate debt securities | $ | $ | $ | $ | |||||||||||||||||||
Money market funds and other | |||||||||||||||||||||||
U.S. Treasury securities | |||||||||||||||||||||||
Marketable securities: | |||||||||||||||||||||||
Corporate debt securities | |||||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||
U.S. Government agency securities | |||||||||||||||||||||||
U.S. Treasury securities | |||||||||||||||||||||||
Total cash equivalents and marketable securities(1) | |||||||||||||||||||||||
Other current assets: | |||||||||||||||||||||||
Derivative assets | |||||||||||||||||||||||
Other non-current assets: | |||||||||||||||||||||||
Executive Deferred Savings Plan | |||||||||||||||||||||||
Total financial assets(1) | $ | $ | $ | $ | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Derivative liabilities | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Deferred payments | ( | ( | |||||||||||||||||||||
Contingent consideration payable | ( | ( | |||||||||||||||||||||
Total financial liabilities | $ | ( | $ | $ | ( | $ | ( |
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Little or No Market Activity Inputs | |||||||||||||||||||||
As of June 30, 2020 (In thousands) | Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||
Money market funds and other | $ | $ | $ | $ | |||||||||||||||||||
Marketable securities: | |||||||||||||||||||||||
Corporate debt securities | |||||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||
Sovereign securities | |||||||||||||||||||||||
U.S. Government agency securities | |||||||||||||||||||||||
U.S. Treasury securities | |||||||||||||||||||||||
Total cash equivalents and marketable securities(1) | |||||||||||||||||||||||
Other current assets: | |||||||||||||||||||||||
Derivative assets | |||||||||||||||||||||||
Other non-current assets: | |||||||||||||||||||||||
Executive Deferred Savings Plan | |||||||||||||||||||||||
Total financial assets(1) | $ | $ | $ | $ | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Derivative liabilities | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Deferred payments | ( | ( | |||||||||||||||||||||
Contingent consideration payable | ( | ( | |||||||||||||||||||||
Total financial liabilities | $ | ( | $ | $ | ( | $ | ( |
As of | As of | ||||||||||
(In thousands) | September 30, 2020 | June 30, 2020 | |||||||||
Accounts receivable, net: | |||||||||||
Accounts receivable, gross | $ | $ | |||||||||
Allowance for credit losses | ( | ( | |||||||||
$ | $ | ||||||||||
Inventories: | |||||||||||
Raw materials | $ | $ | |||||||||
Customer service parts | |||||||||||
Work-in-process | |||||||||||
Finished goods | |||||||||||
$ | $ | ||||||||||
Other current assets: | |||||||||||
Contract assets | $ | $ | |||||||||
Prepaid expenses | |||||||||||
Deferred costs of revenue | |||||||||||
Prepaid income and other taxes | |||||||||||
Other current assets | |||||||||||
$ | $ | ||||||||||
Land, property and equipment, net: | |||||||||||
Land | $ | $ | |||||||||
Buildings and leasehold improvements | |||||||||||
Machinery and equipment | |||||||||||
Office furniture and fixtures | |||||||||||
Construction-in-process | |||||||||||
Less: accumulated depreciation | ( | ( | |||||||||
$ | $ | ||||||||||
Other non-current assets: | |||||||||||
Executive Deferred Savings Plan(1) | $ | $ | |||||||||
Operating lease right of use assets | |||||||||||
Other non-current assets | |||||||||||
$ | $ | ||||||||||
Other current liabilities: | |||||||||||
Compensation and benefits | $ | $ | |||||||||
Executive Deferred Savings Plan | |||||||||||
Customer credits and advances | |||||||||||
Other accrued expenses | |||||||||||
Income taxes payable | |||||||||||
Interest payable | |||||||||||
Operating lease liabilities | |||||||||||
$ | $ | ||||||||||
Other non-current liabilities: | |||||||||||
Income taxes payable | $ | $ | |||||||||
Pension liabilities | |||||||||||
Operating lease liabilities | |||||||||||
Other non-current liabilities | |||||||||||
$ | $ |
(In thousands) | Currency Translation Adjustments | Unrealized Gains (Losses) on Available-for-Sale Securities | Unrealized Gains (Losses) on Cash Flow Hedges | Unrealized Gains (Losses) on Defined Benefit Plans | Total | ||||||||||||||||||||||||
Balance as of September 30, 2020 | $ | ( | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||
Balance as of June 30, 2020 | $ | ( | $ | $ | ( | $ | ( | $ | ( |
Three Months Ended | ||||||||||||||||||||
Location in the Condensed Consolidated | September 30, | |||||||||||||||||||
Accumulated OCI Components | Statements of Operations | 2020 | 2019 | |||||||||||||||||
Unrealized gains (losses) on cash flow hedges from foreign exchange and interest rate contracts | Revenues | $ | ( | $ | ||||||||||||||||
Costs of revenues and operating expenses | ( | |||||||||||||||||||
Interest expense | ( | ( | ||||||||||||||||||
Net gains (losses) reclassified from accumulated OCI | $ | $ | ( | |||||||||||||||||
Unrealized gains (losses) on available-for-sale securities | Other expense (income), net | $ | ( | $ | ( |
As of September 30, 2020 (In thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
Corporate debt securities | $ | $ | $ | ( | $ | ||||||||||||||||||
Money market funds and other | |||||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||
U.S. Government agency securities | ( | ||||||||||||||||||||||
U.S. Treasury securities | |||||||||||||||||||||||
Subtotal | ( | ||||||||||||||||||||||
Add: Time deposits(1) | — | — | |||||||||||||||||||||
Less: Cash equivalents | |||||||||||||||||||||||
Marketable securities | $ | $ | $ | ( | $ | ||||||||||||||||||
As of June 30, 2020 (In thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
Corporate debt securities | $ | $ | $ | ( | $ | ||||||||||||||||||
Money market funds and other | |||||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||
Sovereign securities | |||||||||||||||||||||||
U.S. Government agency securities | ( | ||||||||||||||||||||||
U.S. Treasury securities | ( | ||||||||||||||||||||||
Subtotal | ( | ||||||||||||||||||||||
Add: Time deposits(1) | — | — | |||||||||||||||||||||
Less: Cash equivalents | |||||||||||||||||||||||
Marketable securities | $ | $ | $ | ( | $ |
As of September 30, 2020 (In thousands) | Fair Value | Gross Unrealized Losses | |||||||||
Corporate debt securities | $ | $ | ( | ||||||||
Municipal securities | |||||||||||
U.S. Government agency securities | ( | ||||||||||
U.S Treasury securities | |||||||||||
Total | $ | $ | ( |
As of June 30, 2020 (In thousands) | Fair Value | Gross Unrealized Losses | |||||||||
Corporate debt securities | $ | $ | ( | ||||||||
Municipal securities | |||||||||||
U.S. Government agency securities | ( | ||||||||||
U.S Treasury securities | ( | ||||||||||
Total | $ | $ | ( |
As of September 30, 2020 (In thousands) | Amortized Cost | Fair Value | |||||||||
Due within one year | $ | $ | |||||||||
Due after one year through three years | |||||||||||
$ | $ |
As of June 30, 2020 (In thousands) | Amortized Cost | Fair Value | |||||||||
Due within one year | $ | $ | |||||||||
Due after one year through three years | |||||||||||
$ | $ |
(In thousands) | Wafer Inspection and Patterning | Global Service and Support (“GSS”) | Specialty Semiconductor Process | PCB and Display | Component Inspection | Total | ||||||||||||||||||||||||||||||||
Balance as of June 30, 2020 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Foreign currency adjustments | ||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2020 | $ | $ | $ | $ | $ | $ |
As of | As of | ||||||||||||||||||||||||||||||||||||||||
(In thousands) | September 30, 2020 | June 30, 2020 | |||||||||||||||||||||||||||||||||||||||
Category | Range of Useful Lives (in years) | Gross Carrying Amount | Accumulated Amortization, and Impairment | Net Amount | Gross Carrying Amount | Accumulated Amortization and Impairment | Net Amount | ||||||||||||||||||||||||||||||||||
Existing technology | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Customer relationships | |||||||||||||||||||||||||||||||||||||||||
Trade name / Trademark | |||||||||||||||||||||||||||||||||||||||||
Backlog and other | < | ||||||||||||||||||||||||||||||||||||||||
Intangible assets subject to amortization | |||||||||||||||||||||||||||||||||||||||||
In-process research and development | |||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
Three Months Ended | |||||||||||
September 30, | |||||||||||
(In thousands) | 2020 | 2019 | |||||||||
Amortization expense - Cost of revenues | $ | $ | |||||||||
Amortization expense - Selling, general and administrative | |||||||||||
Amortization expense - Research and development | |||||||||||
Total | $ | $ |
Fiscal year ending June 30: | Amortization (In thousands) | ||||
2021 (remaining nine months) | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 and thereafter | |||||
Total | $ |
As of September 30, 2020 | As of June 30, 2020 | ||||||||||||||||||||||
Amount (In thousands) | Effective Interest Rate | Amount (In thousands) | Effective Interest Rate | ||||||||||||||||||||
Fixed-rate | $ | % | $ | % | |||||||||||||||||||
Fixed-rate | % | % | |||||||||||||||||||||
Fixed-rate | % | % | |||||||||||||||||||||
Fixed-rate | % | % | |||||||||||||||||||||
Fixed-rate | % | % | |||||||||||||||||||||
Revolving Credit Facility | % | % | |||||||||||||||||||||
Total | |||||||||||||||||||||||
Unamortized discount | ( | ( | |||||||||||||||||||||
Unamortized debt issuance costs | ( | ( | |||||||||||||||||||||
Total | $ | $ | |||||||||||||||||||||
Reported as: | |||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||
Three Months Ended September 30, | |||||||||||
In thousands | 2020 | 2019 | |||||||||
Operating cash outflows from operating leases | $ | $ | |||||||||
ROU assets obtained in exchange for new operating lease liabilities | $ | $ |
Amount (In thousands) | |||||
2021 (remaining nine months) | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 and thereafter | |||||
Total lease payments | |||||
Less imputed interest | ( | ||||
Total | $ |
(In thousands) | Available For Grant(1) (2) | ||||
Balance as of June 30, 2020 | |||||
Restricted stock units granted(3) | ( | ||||
Restricted stock units granted adjustment(4) | |||||
Restricted stock units canceled | |||||
Balance as of September 30, 2020 |
Three Months Ended | |||||||||||
September 30, | |||||||||||
(In thousands) | 2020 | 2019 | |||||||||
Stock-based compensation expense by: | |||||||||||
Costs of revenues | $ | $ | |||||||||
Research and development | |||||||||||
Selling, general and administrative | |||||||||||
Total stock-based compensation expense | $ | $ |
As of | As of | ||||||||||
(In thousands) | September 30, 2020 | June 30, 2020 | |||||||||
Inventory | $ | $ |
Shares(1) (In thousands) | Weighted-Average Grant Date Fair Value | ||||||||||
Outstanding restricted stock units as of June 30, 2020(2) | $ | ||||||||||
Granted(3) | $ | ||||||||||
Granted adjustments | ( | $ | |||||||||
Vested and released | ( | $ | |||||||||
Withheld for taxes | ( | $ | |||||||||
Forfeited | ( | $ | |||||||||
Outstanding restricted stock units as of September 30, 2020(2) | $ |
Three Months Ended | |||||||||||
September 30, | |||||||||||
(In thousands, except for weighted-average grant date fair value) | 2020 | 2019 | |||||||||
Weighted-average grant date fair value per unit | $ | $ | |||||||||
Grant date fair value of vested restricted stock units | $ | $ | |||||||||
Tax benefits realized by us in connection with vested and released restricted stock units | $ | $ |
Three Months Ended | |||||||||||
September 30, | |||||||||||
2020 | 2019 | ||||||||||
Stock purchase plan: | |||||||||||
Expected stock price volatility | % | % | |||||||||
Risk-free interest rate | % | % | |||||||||
Dividend yield | % | % | |||||||||
Expected life (in years) |
Three Months Ended | |||||||||||
(In thousands, except for weighted-average fair value per share) | September 30, | ||||||||||
2020 | 2019 | ||||||||||
Tax benefits realized by us in connection with the disqualifying dispositions of shares purchased under the ESPP | $ | $ | |||||||||
Weighted-average fair value per share based on Black-Scholes model | $ | $ |
Three Months Ended | |||||||||||
September 30, | |||||||||||
(In thousands) | 2020 | 2019 | |||||||||
Number of shares of common stock repurchased | |||||||||||
Total cost of repurchases | $ | $ |
Three Months Ended | |||||||||||
(In thousands, except per share amounts) | September 30, | ||||||||||
2020 | 2019 | ||||||||||
Numerator: | |||||||||||
Net income attributable to KLA | $ | $ | |||||||||
Denominator: | |||||||||||
Weighted-average shares-basic, excluding unvested restricted stock units | |||||||||||
Effect of dilutive restricted stock units and options | |||||||||||
Weighted-average shares-diluted | |||||||||||
Basic net income per share attributable to KLA | $ | $ | |||||||||
Diluted net income per share attributable to KLA | $ | $ | |||||||||
Anti-dilutive securities excluded from the computation of diluted net income per share |
Three Months Ended | |||||||||||
September 30, | |||||||||||
(Dollar amounts in thousands) | 2020 | 2019 | |||||||||
Income before income taxes | $ | $ | |||||||||
Provision for income taxes | $ | $ | |||||||||
Effective tax rate | % | % |
Three Months Ended | |||||||||||
September 30, | |||||||||||
(In thousands) | 2020 | 2019 | |||||||||
Receivables sold under factoring agreements | $ | $ | |||||||||
Proceeds from sales of LCs | $ | $ |
Three Months Ended | |||||||||||
September 30, | |||||||||||
(In thousands) | 2020 | 2019 | |||||||||
Derivatives Designated as Hedging Instruments: | |||||||||||
Foreign exchange contracts: | |||||||||||
Amounts included in the assessment of effectiveness | $ | ( | $ | ( | |||||||
Amounts excluded from the assessment of effectiveness | $ | ( | $ | ( |
Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | Revenue | Cost of Revenues and Operating Expenses | Interest Expense | Other Expense (Income), Net | Revenue | Cost of Revenues and Operating Expenses | Interest Expense | Other Expense (Income), Net | |||||||||||||||||||||||||||||||||||||||
Total amounts presented in the Condensed Consolidated Statements of Operations in which the effects of cash flow hedges are recorded | $ | $ | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||
Gains (losses) on Derivatives Designated as Hedging Instruments: | |||||||||||||||||||||||||||||||||||||||||||||||
Rate lock agreements: | |||||||||||||||||||||||||||||||||||||||||||||||
Amount of gains (losses) reclassified from accumulated OCI to earnings | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||
Foreign exchange contracts: | |||||||||||||||||||||||||||||||||||||||||||||||
Amount of gains (losses) reclassified from accumulated OCI to earnings | $ | ( | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach | $ | ( | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Gains (losses) on Derivatives Not Designated as Hedging Instruments: | |||||||||||||||||||||||||||||||||||||||||||||||
Amount of gains (losses) recognized in earnings | $ | $ | $ | $ | ( | $ | $ | $ | $ |
As of | As of | ||||||||||
(In thousands) | September 30, 2020 | June 30, 2020 | |||||||||
Cash flow hedge contracts - foreign currency | |||||||||||
Purchase | $ | $ | |||||||||
Sell | $ | $ | |||||||||
Other foreign currency hedge contracts | |||||||||||
Purchase | $ | $ | |||||||||
Sell | $ | $ |
Asset Derivatives | Liability Derivatives | ||||||||||||||||||||||||||||||||||
Balance Sheet | As of | As of | Balance Sheet | As of | As of | ||||||||||||||||||||||||||||||
Location | September 30, 2020 | June 30, 2020 | Location | September 30, 2020 | June 30, 2020 | ||||||||||||||||||||||||||||||
(In thousands) | Fair Value | Fair Value | |||||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments | |||||||||||||||||||||||||||||||||||
Foreign exchange contracts | Other current assets | $ | $ | Other current liabilities | $ | $ | |||||||||||||||||||||||||||||
Total derivatives designated as hedging instruments | |||||||||||||||||||||||||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||||||||||||||||||
Foreign exchange contracts | Other current assets | Other current liabilities | |||||||||||||||||||||||||||||||||
Total derivatives not designated as hedging instruments | |||||||||||||||||||||||||||||||||||
Total derivatives | $ | $ | $ | $ |
Three Months Ended | |||||||||||
September 30, | |||||||||||
(In thousands) | 2020 | 2019 | |||||||||
Beginning balance | $ | ( | $ | ( | |||||||
Amount reclassified to earnings | ( | ||||||||||
Net change in unrealized gains or losses | ( | ( | |||||||||
Ending balance | $ | ( | $ | ( |
As of September 30, 2020 | Gross Amounts of Derivatives Not Offset in the Condensed Consolidated Balance Sheets | |||||||||||||||||||||||||||||||||||||
Description | Gross Amounts of Derivatives | Gross Amounts of Derivatives Offset in the Condensed Consolidated Balance Sheets | Net Amount of Derivatives Presented in the Condensed Consolidated Balance Sheets | Financial Instruments | Cash Collateral Received | Net Amount | ||||||||||||||||||||||||||||||||
Derivatives - Assets | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
Derivatives - Liabilities | $ | ( | $ | $ | ( | $ | $ | $ | ( |
As of June 30, 2020 | Gross Amounts of Derivatives Not Offset in the Condensed Consolidated Balance Sheets | |||||||||||||||||||||||||||||||||||||
Description | Gross Amounts of Derivatives | Gross Amounts of Derivatives Offset in the Condensed Consolidated Balance Sheets | Net Amount of Derivatives Presented in the Condensed Consolidated Balance Sheets | Financial Instruments | Cash Collateral Received | Net Amount | ||||||||||||||||||||||||||||||||
Derivatives - Assets | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
Derivatives - Liabilities | $ | ( | $ | $ | ( | $ | $ | $ | ( |
Three Months Ended | |||||||||||
September 30, | |||||||||||
(In thousands) | 2020 | 2019 | |||||||||
Total revenues | $ | $ | |||||||||
Total purchases | $ | $ |
Three Months Ended | |||||||||||
September 30, | |||||||||||
(In thousands) | 2020 | 2019 | |||||||||
Semiconductor Process Control: | |||||||||||
Revenue | $ | $ | |||||||||
Segment gross margin | |||||||||||
Specialty Semiconductor Process: | |||||||||||
Revenue | |||||||||||
Segment gross margin | |||||||||||
PCB, Display and Component Inspection: | |||||||||||
Revenue | |||||||||||
Segment gross margin | |||||||||||
Other: | |||||||||||
Revenue | |||||||||||
Segment gross margin | |||||||||||
Totals: | |||||||||||
Revenue | $ | $ | |||||||||
Segment gross margin | $ | $ |
Three Months Ended | |||||||||||
September 30, | |||||||||||
(In thousands) | 2020 | 2019 | |||||||||
Total revenue for reportable segments | $ | $ | |||||||||
Corporate allocations and effects of foreign exchange rates | ( | ||||||||||
Total revenue | $ | $ |
Three Months Ended | |||||||||||
September 30, | |||||||||||
(In thousands) | 2020 | 2019 | |||||||||
Total segment gross margin | $ | $ | |||||||||
Acquisition-related charges, corporate allocations, and effects of foreign exchange rates(1) | |||||||||||
Research and development | |||||||||||
Selling, general and administrative | |||||||||||
Interest expense | |||||||||||
Other expense (income), net | ( | ||||||||||
Income before income taxes | $ | $ |
(Dollar amounts in thousands) | Three Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
China | $ | % | $ | % | |||||||||||||||||||
Taiwan | % | % | |||||||||||||||||||||
Korea | % | % | |||||||||||||||||||||
North America | % | % | |||||||||||||||||||||
Japan | % | % | |||||||||||||||||||||
Europe and Israel | % | % | |||||||||||||||||||||
Rest of Asia | % | % | |||||||||||||||||||||
Total | $ | % | $ | % |
(Dollar amounts in thousands) | Three Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Wafer Inspection | $ | % | $ | % | |||||||||||||||||||
Patterning | % | % | |||||||||||||||||||||
Specialty Semiconductor Process | % | % | |||||||||||||||||||||
PCB, Display and Component Inspection | % | % | |||||||||||||||||||||
Services | % | % | |||||||||||||||||||||
Other | % | % | |||||||||||||||||||||
Total | $ | % | $ | % |
As of | As of | ||||||||||
(In thousands) | September 30, 2020 | June 30, 2020 | |||||||||
Land, property and equipment, net: | |||||||||||
United States | $ | $ | |||||||||
Israel | |||||||||||
Singapore | |||||||||||
Europe | |||||||||||
Rest of Asia | |||||||||||
Total | $ | $ |
(In thousands, except net income per share) | Three Months Ended | ||||||||||||||||||||||||||||
September 30, 2020 | June 30, 2020 | March 31, 2020 | December 31, 2019 | September 30, 2019 | |||||||||||||||||||||||||
Total revenues | $ | 1,538,620 | $ | 1,459,593 | $ | 1,423,964 | $ | 1,509,453 | $ | 1,413,414 | |||||||||||||||||||
Gross margin | $ | 918,058 | $ | 838,049 | $ | 833,806 | $ | 875,835 | $ | 809,173 | |||||||||||||||||||
Net income attributable to KLA(2) | $ | 420,567 | $ | 411,253 | $ | 78,452 | $ | 380,555 | $ | 346,525 | |||||||||||||||||||
Diluted net income per share attributable to KLA(3) | $ | 2.69 | $ | 2.63 | $ | 0.50 | $ | 2.40 | $ | 2.16 |
Three Months Ended | |||||||||||||||||||||||
(Dollar amounts in thousands) | September 30, 2020 | September 30, 2019 | Q1 FY21 vs. Q1 FY20 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Product | $ | 1,145,495 | $ | 1,057,975 | $ | 87,520 | 8 | % | |||||||||||||||
Service | 393,125 | 355,439 | 37,686 | 11 | % | ||||||||||||||||||
Total revenues | $ | 1,538,620 | $ | 1,413,414 | $ | 125,206 | 9 | % | |||||||||||||||
Costs of revenues | $ | 620,562 | $ | 604,241 | $ | 16,321 | 3 | % | |||||||||||||||
Gross margin percentage | 59.7 | % | 57.2 | % |
Three Months Ended | |||||||||||||||||||||||
(Dollar amounts in thousands) | September 30, 2020 | September 30, 2019 | Q1 FY21 vs. Q1 FY20 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Semiconductor Process Control | $ | 1,267,954 | $ | 1,163,632 | $ | 104,322 | 9 | % | |||||||||||||||
Specialty Semiconductor Process | 88,954 | 69,139 | 19,815 | 29 | % | ||||||||||||||||||
PCB, Display and Component Inspection | 181,177 | 178,552 | 2,625 | 1 | % | ||||||||||||||||||
Other | 140 | 2,231 | (2,091) | (94) | % | ||||||||||||||||||
Total revenues | $ | 1,538,225 | $ | 1,413,554 | $ | 124,671 | 9 | % |
Three Months Ended | |||||||||||||||||||||||
(Dollar amounts in thousands) | September 30, 2020 | September 30, 2019 | |||||||||||||||||||||
China | $ | 486,089 | 32 | % | $ | 345,856 | 24 | % | |||||||||||||||
Taiwan | 369,100 | 24 | % | 386,729 | 27 | % | |||||||||||||||||
Korea | 189,518 | 12 | % | 197,450 | 14 | % | |||||||||||||||||
North America | 170,176 | 11 | % | 181,983 | 13 | % | |||||||||||||||||
Japan | 164,419 | 11 | % | 206,211 | 15 | % | |||||||||||||||||
Europe and Israel | 83,117 | 5 | % | 59,383 | 4 | % | |||||||||||||||||
Rest of Asia | 76,201 | 5 | % | 35,802 | 3 | % | |||||||||||||||||
Total | $ | 1,538,620 | 100 | % | $ | 1,413,414 | 100 | % |
Gross Margin Percentage | |||||
Three Months Ended | |||||
September 30, 2019 | 57.2% | ||||
Mix of products and services sold | 2.9% | ||||
Revenue volume of products and services | 0.5% | ||||
Manufacturing labor, overhead and efficiencies | 0.3% | ||||
Other service and manufacturing costs | (1.2)% | ||||
September 30, 2020 | 59.7% |
Three months ended | |||||||||||||||||||||||
(Dollar amounts in thousands) | September 30, 2020 | September 30, 2019 | Q1 FY21 vs. Q1 FY20 | ||||||||||||||||||||
Segment gross margin: | |||||||||||||||||||||||
Semiconductor Process Control | $ | 814,810 | $ | 742,342 | $ | 72,468 | 10 | % | |||||||||||||||
Specialty Semiconductor Process | 49,928 | 38,164 | 11,764 | 31 | % | ||||||||||||||||||
PCB, Display and Component Inspection | 90,169 | 76,068 | 14,101 | 19 | % | ||||||||||||||||||
Other | 13 | 653 | (640) | (98) | % | ||||||||||||||||||
$ | 954,920 | $ | 857,227 | $ | 97,693 | 11 | % |
(Dollar amounts in thousands) | Three Months Ended | ||||||||||||||||||||||
September 30, 2020 | September 30, 2019 | Q1 FY21 vs. Q1 FY20 | |||||||||||||||||||||
R&D expenses | $ | 219,038 | $ | 210,580 | $ | 8,458 | 4 | % | |||||||||||||||
R&D expenses as a percentage of total revenues | 14 | % | 15 | % |
Three Months Ended | |||||||||||||||||||||||
(Dollar amounts in thousands) | September 30, 2020 | September 30, 2019 | Q1 FY21 vs. Q1 FY20 | ||||||||||||||||||||
SG&A expenses | $ | 172,631 | $ | 188,345 | $ | (15,714) | (8) | % | |||||||||||||||
SG&A expenses as a percentage of total revenues | 11 | % | 13 | % |
(Dollar amounts in thousands) | Three Months Ended | ||||||||||
September 30, 2020 | September 30, 2019 | ||||||||||
Interest expense | $ | 39,386 | $ | 40,350 | |||||||
Other expense (income), net | $ | 3,197 | $ | (1,618) | |||||||
Interest expense as a percentage of total revenues | 3 | % | 3 | % | |||||||
Other expense (income), net as a percentage of total revenues | < 1% | < 1% |
Three Months Ended | |||||||||||
September 30, | |||||||||||
(Dollar amounts in thousands) | 2020 | 2019 | |||||||||
Income before income taxes | $ | 483,806 | $ | 371,516 | |||||||
Provision for income taxes | $ | 63,664 | $ | 25,120 | |||||||
Effective tax rate | 13.2 | % | 6.8 | % |
As of | As of | ||||||||||
(Dollar amounts in thousands) | September 30, 2020 | June 30, 2020 | |||||||||
Cash and cash equivalents | $ | 1,215,820 | $ | 1,234,409 | |||||||
Marketable securities | 827,633 | 746,063 | |||||||||
Total cash, cash equivalents and marketable securities | $ | 2,043,453 | $ | 1,980,472 | |||||||
Percentage of total assets | 22 | % | 21 | % | |||||||
Three Months Ended September 30, | |||||||||||
(In thousands) | 2020 | 2019 | |||||||||
Cash flows: | |||||||||||
Net cash provided by operating activities | $ | 512,171 | $ | 496,245 | |||||||
Net cash used in investing activities | (134,320) | (146,693) | |||||||||
Net cash (used in) provided by financing activities | (404,206) | (373,613) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 7,766 | (3,585) | |||||||||
Net (decrease) increase in cash and cash equivalents | $ | (18,589) | $ | (27,646) |
Rating Agency | Rating | ||||
Fitch | BBB+ | ||||
Moody’s | Baa1 | ||||
Standard & Poor’s | BBB+ |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs(1) | Approximate Dollar Value that May Yet Be Purchased Under the Plans or Programs(1) | |||||||||||||||||||
July 1, 2020 to July 31, 2020 | — | $ | — | — | $ | 1,037,609,908 | |||||||||||||||||
August 1, 2020 to August 31, 2020 | 290,245 | $ | 206.72 | 290,245 | $ | 977,611,095 | |||||||||||||||||
September 1, 2020 to September 30, 2020 | 737,436 | $ | 181.57 | 737,436 | $ | 843,712,366 | |||||||||||||||||
Total | 1,027,681 | $ | 188.67 | 1,027,681 |
Incorporated by Reference | ||||||||||||||||||||
Exhibit Number | Exhibit Description | Form | File Number | Exhibit Number | Filing Date | |||||||||||||||
Description of Registrant’s Securities Registered Under Section 12 of the Securities Exchange Act of 1934 | ||||||||||||||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL 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 | |||||||||||||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
KLA CORPORATION | ||||||||||||||
(Registrant) | ||||||||||||||
October 30, 2020 | /s/ RICHARD P. WALLACE | |||||||||||||
(Date) | Richard P. Wallace | |||||||||||||
President and Chief Executive Officer (Principal Executive Officer) | ||||||||||||||
October 30, 2020 | /s/ BREN D. HIGGINS | |||||||||||||
(Date) | Bren D. Higgins | |||||||||||||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) | ||||||||||||||
October 30, 2020 | /s/ VIRENDRA A. KIRLOSKAR | |||||||||||||
(Date) | Virendra A. Kirloskar | |||||||||||||
Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) |
October 30, 2020 | /s/ RICHARD P. WALLACE | |||||||||||||
(Date) | Richard P. Wallace | |||||||||||||
President and Chief Executive Officer | ||||||||||||||
(Principal Executive Officer) |
October 30, 2020 | /s/ BREN D. HIGGINS | |||||||||||||
(Date) | Bren D. Higgins | |||||||||||||
Executive Vice President and Chief Financial Officer | ||||||||||||||
(Principal Financial Officer) |
October 30, 2020 | By: | /s/ RICHARD P. WALLACE | ||||||||||||||||||
(Date) | Name: | Richard P. Wallace | ||||||||||||||||||
Title: | President and Chief Executive Officer |
October 30, 2020 | By: | /s/ BREN D. HIGGINS | ||||||||||||||||||
(Date) | Name: | Bren D. Higgins | ||||||||||||||||||
Title: | Executive Vice President and Chief Financial Officer |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Revenues: | ||
Revenues | $ 1,538,620 | $ 1,413,414 |
Costs and expenses: | ||
Costs of revenues | 620,562 | 604,241 |
Research and development | 219,038 | 210,580 |
Selling, general and administrative | 172,631 | 188,345 |
Interest expense | 39,386 | 40,350 |
Other expense (income), net | 3,197 | (1,618) |
Income before income taxes | 483,806 | 371,516 |
Provision for income taxes | 63,664 | 25,120 |
Net income | 420,142 | 346,396 |
Less: Net loss attributable to non-controlling interest | (425) | (129) |
Net income attributable to KLA | $ 420,567 | $ 346,525 |
Net income per share attributable to KLA | ||
Basic (in dollars per share) | $ 2.71 | $ 2.18 |
Diluted (in dollars per share) | $ 2.69 | $ 2.16 |
Weighted-average number of shares: | ||
Basic (in shares) | 155,281 | 158,697 |
Diluted (in shares) | 156,442 | 160,131 |
Product | ||
Revenues: | ||
Revenues | $ 1,145,495 | $ 1,057,975 |
Service | ||
Revenues: | ||
Revenues | $ 393,125 | $ 355,439 |
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
Total |
Cumulative Effect, Period of Adoption, Adjustment |
Common Stock and Capital in Excess of Par Value, Shares |
Common Stock and Capital in Excess of Par Value, Amount |
Retained Earnings |
Retained Earnings
Cumulative Effect, Period of Adoption, Adjustment
|
Accumulated Other Comprehensive Income (Loss) |
Total KLA Stockholder's Equity |
Total KLA Stockholder's Equity
Cumulative Effect, Period of Adoption, Adjustment
|
Non- Controlling Interest |
---|---|---|---|---|---|---|---|---|---|---|
Balance (in shares) at Jun. 30, 2019 | 159,475 | |||||||||
Balance at Jun. 30, 2019 | $ 2,677,693 | $ 2,017,312 | $ 714,825 | $ (73,029) | $ 2,659,108 | $ 18,585 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Net income attributable to KLA | 346,525 | 346,525 | 346,525 | |||||||
Other comprehensive income | 1,174 | 1,174 | 1,174 | |||||||
Net loss attributable to non-controlling interest | (129) | (129) | ||||||||
Net issuance under employee stock plans (in shares) | 281 | |||||||||
Net issuance under employee stock plans | (23,423) | (23,423) | (23,423) | |||||||
Repurchase of common stock (in shares) | (1,659) | |||||||||
Repurchase of common stock | (228,496) | (20,988) | (207,508) | (228,496) | ||||||
Cash dividends and dividend equivalents declared | (120,669) | (120,669) | (120,669) | |||||||
Stock-based compensation expense | 26,944 | 26,944 | 26,944 | |||||||
Balance (in shares) at Sep. 30, 2019 | 158,097 | |||||||||
Balance at Sep. 30, 2019 | 2,679,619 | 1,999,845 | 733,173 | (71,855) | 2,661,163 | 18,456 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | |||||||||
Balance (in shares) at Jun. 30, 2020 | 155,461 | |||||||||
Balance at Jun. 30, 2020 | 2,681,010 | $ (5,530) | 2,090,268 | 654,930 | $ (5,530) | (79,774) | 2,665,424 | $ (5,530) | 15,586 | |
Increase (Decrease) in Stockholders' Equity | ||||||||||
Net income attributable to KLA | 420,567 | 420,567 | 420,567 | |||||||
Other comprehensive income | 328 | 328 | 328 | |||||||
Net loss attributable to non-controlling interest | (425) | (425) | ||||||||
Net issuance under employee stock plans (in shares) | 172 | |||||||||
Net issuance under employee stock plans | (25,145) | (25,145) | (25,145) | |||||||
Repurchase of common stock (in shares) | (1,027) | |||||||||
Repurchase of common stock | (193,897) | (19,400) | (174,497) | (193,897) | ||||||
Cash dividends and dividend equivalents declared | (141,555) | (141,555) | (141,555) | |||||||
Stock-based compensation expense | 26,992 | 26,992 | 26,992 | |||||||
Balance (in shares) at Sep. 30, 2020 | 154,606 | |||||||||
Balance at Sep. 30, 2020 | $ 2,762,345 | $ 2,072,715 | $ 753,915 | $ (79,446) | $ 2,747,184 | $ 15,161 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member |
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares |
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Aug. 06, 2020 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Statement of Stockholders' Equity [Abstract] | |||
Cash dividends declared (in dollars per share) | $ 0.90 | $ 0.90 | $ 0.75 |
BASIS OF PRESENTATION |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Basis of Presentation. For purposes of this report, “KLA,” the “Company,” “we,” “our,” “us,” or similar references mean KLA Corporation, and its majority-owned subsidiaries unless the context requires otherwise. The Condensed Consolidated Financial Statements have been prepared by us pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The unaudited interim Condensed Consolidated Financial Statements reflect all adjustments (consisting only of normal, recurring adjustments) necessary for a fair statement of the financial position, results of operations, comprehensive income, stockholders’ equity and cash flows for the periods indicated. These Condensed Consolidated Financial Statements and notes, however, should be read in conjunction with Item 8, “Financial Statements and Supplementary Data” included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020. The Condensed Consolidated Financial Statements include the accounts of KLA and its majority-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. On February 20, 2019 ("Acquisition Date"), we completed the acquisition of Orbotech, Ltd. ("Orbotech") hereinafter referred to as the "Orbotech Acquisition". The results of operations for the three months ended September 30, 2020 are not necessarily indicative of the results that may be expected for any other interim period or for the full fiscal year ending June 30, 2021. Certain reclassifications have been made to the prior year’s Condensed Consolidated Financial Statements to conform to the current year presentation. The reclassifications did not have material effects on the prior year’s Condensed Consolidated Balance Sheets, Statements of Operations, Comprehensive Income and Cash Flows. Management Estimates. The preparation of the Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions in applying our accounting policies that affect the reported amounts of assets and liabilities (and related disclosure of contingent assets and liabilities) at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Comparability. Effective July 1, 2020, we adopted Accounting Standard Codification ("ASC") 326, Financial Instruments - Credit Losses. Prior periods were not retrospectively recast and accordingly, the Consolidated Balance Sheet as of June 30, 2020, and the Condensed Consolidated Statement of Operations for the three months ended September 30, 2019 were prepared using accounting standards that were different than those in effect for the three months ended September 30, 2020. Significant Accounting Policies. With the exception of the change for the accounting of credit losses as a result of the adoption of ASC 326, Financial Instruments - Credit Losses, there have been no other material changes to our significant accounting policies in Note 1 “Description of Business and Summary of Significant Accounting Policies” of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020. Credit Losses Cash Equivalents and Marketable Securities. All highly liquid debt instruments with original or remaining maturities of less than three months at the date of purchase are cash equivalents. Marketable securities are generally classified as available-for-sale for use in current operations, if required, and are reported at fair value, with unrealized gains and non-credit related unrealized losses, net of tax, presented as a separate component of stockholders’ equity under the caption “Accumulated other comprehensive income (loss)” (“AOCI”). All realized gains and losses are recorded in earnings in the period of occurrence. The specific identification method is used to determine the realized gains and losses on investments. We regularly review the available-for-sale debt securities in an unrealized loss position, and evaluate the current expected credit loss by considering available information relevant to the collectibility of the security, such as historical experience, market data, issuer-specific factors including credit ratings, default and loss rates of the underlying collateral and structure and credit enhancements, current economic conditions and reasonable and supportable forecasts. If we do not expect to recover the entire amortized cost of the security, the amount representing credit losses, defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis of the debt security, is recorded as an allowance for credit losses with an offsetting entry to earnings; and the amount that is not credit-related is recognized in other comprehensive income (loss). If we have the intent to sell the security or it is more likely than not that we will be required to sell the security before recovery of its entire amortized cost basis, we first write off any previously recognized allowance for credit losses with an offsetting entry to the security’s amortized cost basis. If the allowance has been fully written off and fair value is less than amortized cost basis, we write down the amortized cost basis of the security to its fair value with an offsetting entry to net income. There were no credit losses on available-for-sale debt securities recognized for the three months ended September 30, 2020 and 2019. Allowance for Credit Losses. A majority of our accounts receivable are derived from sales to large multinational semiconductor and electronics manufacturers throughout the world. We maintain an allowance for credit losses for expected uncollectible accounts receivable, which is recorded as an offset to accounts receivable and changes in such are classified as selling, general and administrative expense in the Condensed Consolidated Statements of Income. We assess collectibility by reviewing accounts receivable on a collective basis where similar risk characteristics exist and on an individual basis when we identify specific customers with known disputes or collectibility issues. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The allowance for credit losses is reviewed on a quarterly basis to assess the adequacy of the allowance. For the three months ended September 30, 2020, our assessment considered the impact of COVID-19 and estimates of expected credit and collectability trends. The credit losses recognized were not significant for the three months ended September 30, 2020 and 2019. Volatility in market conditions and evolving credit trends are difficult to predict and may cause variability and volatility that may have a material impact on our allowance for credit losses in future periods. Recent Accounting Pronouncements Recently Adopted As explained above, on July 1, 2020 we adopted ASC 326, which was issued by the Financial Accounting Board (“FASB”) in June 2016 as Accounting Standards Update ("ASU") No 2016-13 Financial Instruments – Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments. The ASU replaced previous incurred loss impairment guidance and established a single expected credit losses allowance framework for financial assets carried at amortized cost. It also eliminated the concept of other-than-temporary impairment and requires credit losses related to certain available-for-sale debt securities to be recorded through an allowance for credit losses. We using the modified retrospective method, which requires a cumulative-effect adjustment to the opening balance of retained earnings to be recognized on the date of adoption and, accordingly, recorded a net decrease of $5.5 million to retained earnings as of July 1, 2020. Please see the “Credit Losses” accounting policy in the “Significant Accounting Policies” section above. In August 2018, the FASB issued an accounting standard update which modifies the existing accounting standards for the fair value measurement disclosure. This update eliminates the disclosures of the amount of and reasons for transfers between level 1 and level 2 of the fair value hierarchy, and the policy for the timing of transfers between levels. We adopted this update beginning in the first quarter of our fiscal year ending June 30, 2021 on a retrospective basis and the adoption had no material impact on our Condensed Consolidated Financial Statements. In August 2018, the FASB issued an accounting standard update to amend the disclosure requirements related to defined benefit pension and other post-retirement plans. Some of the changes include adding a disclosure requirement for significant gains and losses related to changes in the benefit obligation for the period and removing the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year. We adopted this update beginning in the first quarter of the fiscal year ending June 30, 2021 on a retrospective basis and the adoption had no material impact on our Condensed Consolidated Financial Statements. In August 2018, the FASB issued an accounting standard update to align the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance clarifies which costs should be capitalized including the cost to acquire the license and the related implementation costs. We adopted this update beginning in the first quarter of our fiscal year ending June 30, 2021 on a prospective basis, and the adoption had no material impact on our Condensed Consolidated Financial Statements. Updates Not Yet Effective In December 2019, the FASB issued an accounting standard update to simplify the accounting for income taxes in ASC 740, Income Taxes (“ASC 740”). This amendment removes certain exceptions and improves consistent application of accounting principles for certain areas in ASC 740. The update is effective for us beginning in the first quarter of our fiscal year ending June 30, 2022, and early adoption is permitted. We are currently evaluating the impact of this accounting standard update on our Consolidated Financial Statements. In August 2020, the FASB issued an accounting standard update to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The standard eliminates beneficial conversion feature and cash conversion models resulting in more convertible instruments being accounted for as a single unit; and modifies the guidance on the computation of earnings per share for convertible instruments and contracts on an entity’s own equity. The update is effective for us in the first quarter of our fiscal year ending June 30, 2023 and can be adopted either on a fully retrospective basis or modified retrospective basis. Early adoption is permitted from our first quarter of fiscal year ending June 30, 2022. We are currently evaluating the impact of this accounting standard update on our Condensed Consolidated Financial Statements.
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE | REVENUE Contract Balances The following table represents the opening and closing balances of accounts receivables, net, contract assets and contract liabilities for the indicated periods.
Our payment terms and conditions vary by contract type, although the terms generally include a requirement of payment of 70% to 90% of total contract consideration within 30 to 60 days of product shipment, with the remainder payable within 30 days of acceptance. The change in contract assets during the three months ended September 30, 2020 was mainly due to $40.9 million of contract assets reclassified to net accounts receivable as our right to consideration for these contract assets became unconditional, partially offset by $38.6 million of revenue recognized for which the payment is subject to conditions other than passage of time. Contract assets are included in Other current assets on our Condensed Consolidated Balance Sheets. During the three months ended September 30, 2020, we recognized revenue of $314.8 million that was included in contract liabilities as of July 1, 2020. This was partially offset by the value of products and services billed to customers for which control of the products and service has not transferred to the customers. Contract liabilities are included in current and non-current liabilities on our Condensed Consolidated Balance Sheets. Remaining Performance Obligations As of September 30, 2020, we had $2.20 billion of remaining performance obligations, which represents our obligation to deliver products and services, and consists primarily of sales orders where written customer requests have been received. We expect to recognize approximately 5% to 15% of these performance obligations as revenue beyond the next twelve months, subject to risk of delays, pushouts, and cancellation by the customer, usually with limited or no penalties. Refer to Note 18 “Segment Reporting and Geographic Information” of the Notes to the Condensed Consolidated Financial Statements for information related to revenue by geographic region as well as significant product and service offerings.
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FAIR VALUE MEASUREMENTS |
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FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Our financial assets and liabilities are measured and recorded at fair value, except for our debt and certain equity investments in privately-held companies. Equity investments without a readily available fair value are accounted for using the measurement alternative. The measurement alternative is calculated as cost minus impairment, if any, plus or minus changes resulting from observable price changes. Our non-financial assets, such as goodwill, intangible assets, and land, property and equipment, are assessed for impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred. Fair Value of Financial Instruments. We have evaluated the estimated fair value of financial instruments using available market information and valuations as provided by third-party sources. The use of different market assumptions and/or estimation methodologies could have a significant effect on the estimated fair value amounts. The fair value of our cash equivalents, accounts receivable, accounts payable and other current assets and liabilities approximate their carrying amounts due to the relatively short maturity of these items. Fair Value Hierarchy. The authoritative guidance for fair value measurements establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. As of September 30, 2020, the types of instruments valued based on quoted market prices in active markets included money market funds, certain U.S. Treasury securities and U.S. Government agency securities. Such instruments are generally classified within Level 1 of the fair value hierarchy. The types of instruments valued based on other observable inputs included corporate debt securities, sovereign securities, municipal securities, and certain U.S. Treasury securities. The market inputs used to value these instruments generally consist of market yields, reported trades and broker / dealer quotes. Such instruments are generally classified within Level 2 of the fair value hierarchy. The principal market in which we execute our foreign currency contracts is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants generally are large financial institutions. Our foreign currency contracts’ valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. These contracts are typically classified within Level 2 of the fair value hierarchy. The fair value of deferred payments and contingent consideration payable, the majority of which were recorded in connection with business combinations, were classified as Level 3 and estimated using significant inputs that were not observable in the market. See Note 6 “Business Combinations” of the Notes to the Condensed Consolidated Financial Statements for additional information. Financial assets (excluding cash held in operating accounts and time deposits) and liabilities measured at fair value on a recurring basis, as of the date indicated below, were presented on our Condensed Consolidated Balance Sheets as follows:
________________ (1) Excludes cash of $471.2 million held in operating accounts and time deposits of $133.8 million as of September 30, 2020. Financial assets (excluding cash held in operating accounts and time deposits) and liabilities measured at fair value on a recurring basis, as of the date indicated below, were presented on our Condensed Consolidated Balance Sheets as follows:
________________ (1) Excludes cash of $460.8 million held in operating accounts and time deposits of $78.7 million as of June 30, 2020. There were no transfers between Level 1, Level 2 and Level 3 fair value measurements during the three months ended September 30, 2020. See Note 8 “Debt” of the Notes to the Condensed Consolidated Financial Statements for disclosure of the fair value of our Senior Notes.
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FINANCIAL STATEMENT COMPONENTS |
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL STATEMENT COMPONENTS | FINANCIAL STATEMENT COMPONENTS Condensed Consolidated Balance Sheets
________________ (1)We have a non-qualified deferred compensation plan (known as “Executive Deferred Savings Plan” or “EDSP”) under which certain employees and non-employee directors may defer a portion of their compensation. The expense (benefit) associated with changes in the EDSP liability included in selling, general and administrative expense was $13.2 million and $1.9 million during the three months ended September 30, 2020 and 2019, respectively. The amount of net gains (losses) associated with changes in the EDSP assets included in selling, general and administrative expense was $13.3 million and $2.3 million during the three months ended September 30, 2020 and 2019, respectively. For additional details, refer to Note 1 “Description of Business and Summary of Significant Accounting Policies” of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020. Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss) (“OCI”) as of the dates indicated below were as follows:
The effects on net income (loss) of amounts reclassified from accumulated OCI to the Condensed Consolidated Statements of Operations for the indicated period were as follows (in thousands):
The amounts reclassified out of accumulated OCI related to our defined benefit pension plans, which were recognized as a component of net periodic cost for the three months ended September 30, 2020 and 2019 were $0.3 million and $0.2 million, respectively. For additional details, refer to Note 12 “Employee Benefit Plans” of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020.
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MARKETABLE SECURITIES |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MARKETABLE SECURITIES | MARKETABLE SECURITIES The amortized cost and fair value of marketable securities as of the dates indicated below were as follows:
________________ (1) Time deposits excluded from fair value measurements. Our investment portfolio consists of both corporate and government securities that have a maximum maturity of three years. The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields. As yields increase, those securities with a lower yield-at-cost show a mark-to-market unrealized loss. Most of our unrealized losses are due to changes in market interest rates and bond yields. We believe that we have the ability to realize the full value of all of these investments upon maturity. As of September 30, 2020, we had 40 investments in an unrealized loss position. The following table summarizes the fair value and gross unrealized losses of our investments that were in an unrealized loss position as of the date indicated below, none of which were in a continuous loss position for 12 months or more:
The contractual maturities of securities classified as available-for-sale, regardless of their classification on our Condensed Consolidated Balance Sheets, as of the date indicated below were as follows:
Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Realized gains and losses on available-for-sale securities for the three months ended September 30, 2020 and 2019 were immaterial.
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BUSINESS COMBINATIONS |
3 Months Ended |
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Sep. 30, 2020 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS On April 24, 2020, we acquired a product line from a public company for total purchase consideration of $11.4 million, of which $2.2 million was allocated to goodwill. Goodwill recognized was assigned to the Wafer Inspection and Patterning reporting unit, and the amount recognized was deductible for income tax purposes. On August 22, 2019, we acquired the outstanding shares of a privately-held company, primarily to expand our products and services offerings, for a total purchase consideration of $94.0 million inclusive of measurement period adjustments as well as the fair value of the promise to pay an additional consideration up to $60.0 million contingent on the achievement of certain milestones. As of September 30, 2020, the estimated fair value of the additional consideration was $6.3 million, which was classified as a current liability on the Condensed Consolidated Balance Sheet. The $54.2 million of goodwill was assigned to the Wafer Inspection and Patterning reporting unit, and the amount recognized was not deductible for income tax purposes. In addition to the contingent consideration for the August 2019 acquisition, as of September 30, 2020, we have $6.7 million of contingent consideration recorded for other acquisitions from fiscal year 2019, which is classified as a non-current liability on the Condensed Consolidated Balance Sheet. For additional details, please refer to Note 6 "Business Combinations" included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020, filed with the SEC on August 7, 2020.
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GOODWILL AND PURCHASED INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND PURCHASED INTANGIBLE ASSETS | GOODWILL AND PURCHASED INTANGIBLE ASSETS Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in the current and prior business combinations. We have four reportable segments and six reporting units. For additional details, refer to Note 18 “Segment Reporting and Geographic Information” of the Notes to the Condensed Consolidated Financial Statements. The following table presents goodwill carrying value and the movements during the three months ended September 30, 2020(1):
_________________ (1)No goodwill was assigned to the Other reporting unit, and accordingly it was excluded in the table above. Goodwill is not subject to amortization but is tested for impairment annually during the third fiscal quarter as well as whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In testing goodwill for impairment, we utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. When performing the qualitative assessment, we consider the following factors: declines in our stock price or market capitalization, declines in our market share, and declines in revenues or profitability at our reporting units. Any impairment charges could have a material adverse effect on our operating results and net asset value in the quarter in which we recognize the impairment charge. If our qualitative assessment indicates that goodwill impairment is more likely than not, we perform a quantitative assessment by comparing the carrying value of net assets to the fair value of the reporting units. If the fair value is determined to be less than the carrying value, the amount of impairment is computed as the excess of the carrying value over the estimated fair value, not to exceed the carrying value of goodwill. As of September 30, 2020, there have been no significant events or circumstances affecting the valuation of goodwill subsequent to the assessment performed in the third quarter of the fiscal year ended June 30, 2020. As a result of that assessment, we recorded $144.2 million and $112.5 million in impairment charges in the Specialty Semiconductor Process and PCB and Display reporting units, respectively, in the three months ended March 31, 2020. For additional details, refer to Note 7 “Goodwill and Purchased Intangible Assets” of the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020. Purchased Intangible Assets The components of purchased intangible assets as of the dates indicated below were as follows:
Purchased intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be fully recoverable. The impairment indicator primarily includes the declines in our operating cash flows from the use of these assets. If the impairment indicators are present, we are required to perform a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to these long-lived assets to their carrying value. We performed the required recoverability test for intangible assets in the third quarter of the fiscal year ended June 30, 2020 and concluded that there was no impairment based on the assessment. As of September 30, 2020, there were no impairment indicators for purchased intangible assets. Amortization expense for purchased intangible assets for the periods indicated below was as follows:
Based on the purchased intangible assets gross carrying amount recorded as of September 30, 2020, the remaining estimated annual amortization expense is expected to be as follows:
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DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT The following table summarizes our debt as of September 30, 2020 and June 30, 2020:
As of September 30, 2020, future minimum principal payments for our debt are $1.25 billion in fiscal year 2025 and $2.20 billion after fiscal year 2026. Senior Notes and Debt Redemption: In February 2020, we issued $750.0 million aggregate principal amount of senior, unsecured long-term notes (the “2020 Senior Notes”). In March 2019 and November 2014, we issued $1.20 billion (the "2019 Senior Notes”) and $2.50 billion (the "2014 Senior Notes,” and together with the 2019 Senior Notes and the 2020 Senior Notes, the “Senior Notes”), respectively, aggregate principal amount of senior, unsecured long-term notes. In each of the second quarters of fiscal 2018 and 2020, we repaid $250.0 million of the 2014 Senior Notes and in the third quarter of fiscal 2020 we repaid another $500.0 million of the 2014 Senior Notes using the proceeds from the issuance of the 2020 Senior Notes, bringing the outstanding aggregate principal amount of the 2014 Senior Notes to $1.50 billion as of September 30, 2020. The interest rates for our Senior Notes are not subject to adjustment. Interest is payable as follows: semi-annually on March 1 and September 1 of each year for the 2020 Senior Notes; semi-annually on March 15 and September 15 of each year for the 2019 Senior Notes; and semi-annually on May 1 and November 1 of each year for the 2014 Senior Notes. The indenture for the Senior Notes (the “Indenture”) includes covenants that limit our ability to grant liens on our facilities and enter into sale and leaseback transactions, subject to certain allowances under which certain sale and leaseback transactions are not restricted. In certain circumstances involving a change of control followed by a downgrade of the rating of a series of Senior Notes by at least two of Moody’s, S&P and Fitch Inc., unless we have exercised our rights to redeem the Senior Notes of such series, we will be required to make an offer to repurchase all or, at the holder’s option, any part, of each holder’s Senior Notes of that series pursuant to the offer described below (the “Change of Control Offer”). In the Change of Control Offer, we will be required to offer payment in cash equal to 101% of the aggregate principal amount of Senior Notes repurchased plus accrued and unpaid interest, if any, on the Senior Notes repurchased, up to, but not including, the date of repurchase. Based on the trading prices of the Senior Notes on the applicable dates, the fair value of the Senior Notes as of September 30, 2020 and June 30, 2020 was approximately $4.05 billion and $4.01 billion, respectively. While the Senior Notes are recorded at cost, the fair value of the long-term debt was determined based on quoted prices in markets that are not active; accordingly, the long-term debt is categorized as Level 2 for purposes of the fair value measurement hierarchy. As of September 30, 2020, we were in compliance with all of our covenants under the Indenture associated with the Senior Notes. Revolving Credit Facility: We have in place a Credit Agreement (the “Credit Agreement”) providing for a $1.00 billion unsecured Revolving Credit Facility (the "Revolving Credit Facility") with a maturity date of November 30, 2023. During the fiscal year ended June 30, 2020, we borrowed $450.0 million from the Revolving Credit Facility and made principal payments of $400.0 million, $200.0 million of which were repayments in the third fiscal quarter of 2020 using a portion of the proceeds from the issuance of the 2020 Senior Notes. As of June 30, 2020, we had outstanding $50.0 million aggregate principal amount of borrowings under the Revolving Credit Facility. During the first fiscal quarter of 2021, we repaid the remaining $50.0 million aggregate principal balance so that as of September 30, 2020 we had no outstanding borrowings under the Revolving Credit Facility. We may borrow, repay and reborrow funds under the Revolving Credit Facility until the Maturity Date, at which time such Revolving Credit Facility will terminate, and all outstanding loans under such facility, together with all accrued and unpaid interest, must be repaid. We may prepay outstanding borrowings under the Revolving Credit Facility at any time without a prepayment penalty. Borrowings under the Revolving Credit Facility will bear interest, at our option, at either: (i) the Alternative Base Rate (“ABR”) plus a spread, which ranges from 0 bps to 75 bps, or (ii) the London Interbank Offered Rate (“LIBOR”) plus a spread, which ranges from 100 bps to 175 bps. The spreads under ABR and LIBOR are subject to adjustment in conjunction with credit rating downgrades or upgrades. We are also obligated to pay an annual commitment fee on the daily undrawn balance of the Revolving Credit Facility, which ranges from 10 bps to 25 bps, subject to an adjustment in conjunction with changes to our credit rating. As of September 30, 2020, we elected to pay interest on the borrowed amount under the Revolving Credit Facility at LIBOR plus a spread of 112.5 bps, and we pay an annual commitment fee of 12.5 bps on the daily undrawn balance of the Revolving Credit Facility. The Revolving Credit Facility requires us to maintain an interest expense coverage ratio as described in the Credit Agreement, on a quarterly basis, covering the trailing four consecutive fiscal quarters of no less than 3.50 to 1.00. In addition, we are required to maintain the maximum leverage ratio as described in the Credit Agreement, on a quarterly basis of 3.00 to 1.00, covering the trailing four consecutive fiscal quarters for each fiscal quarter, which can be increased to 4.00 to 1.00 for a period of time in connection with a material acquisition or a series of material acquisitions. As of September 30, 2020, our maximum allowed leverage ratio was 3.50 to 1.00. We were in compliance with all covenants under the Credit Agreement as of September 30, 2020. For additional details, refer to Note 8 “Debt” of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020.
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LEASES |
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LEASES | LEASES We have operating leases for facilities, vehicles, and other equipment. Our facility leases are primarily used for administrative functions, research and development, manufacturing, and storage and distribution. Our finance leases are not material. Our existing leases do not contain significant restrictive provisions or residual value guarantees; however, certain leases contain provisions for payment of maintenance, real estate taxes, or insurance costs by us. Our leases have remaining lease terms ranging from less than one year to 16 years, including periods covered by options to extend the lease when it is reasonably certain that the option will be exercised. Lease expense for the three months ended September 30, 2020 and September 30, 2019 was $9.6 million and $8.7 million, respectively. Expense related to short-term leases, which are not recorded on the Condensed Consolidated Balance Sheets, was not material for the three months ended September 30, 2020 and was $0.2 million for the three months ended September 30, 2019. As of September 30, 2020 and June 30, 2020, the weighted average remaining lease term was 4.9 years and 5.1 years, respectively, and the weighted average discount rate for operating leases was 1.93% and 1.99%, respectively. Supplemental cash flow information related to leases was as follows:
Maturities of lease liabilities as of September 30, 2020 were as follows:
As of September 30, 2020, we did not have any material leases that had not yet commenced.
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EQUITY, LONG-TERM INCENTIVE COMPENSATION PLANS AND NON-CONTROLLING INTEREST |
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EQUITY, LONG-TERM INCENTIVE COMPENSATION PLANS AND NON-CONTROLLING INTEREST | EQUITY, LONG-TERM INCENTIVE COMPENSATION PLANS AND NON-CONTROLLING INTEREST Equity Incentive Program As of September 30, 2020, 10.3 million shares remained available for issuance under our 2004 Equity Incentive Plan (the “2004 Plan”). For details of the 2004 Plan refer to Note 10 “Equity, Long-Term Incentive Compensation Plans and Non-Controlling Interest” of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020. Assumed Equity Plans As part of the Orbotech acquisition, we assumed outstanding equity incentive awards under the following Orbotech equity incentive plans: (i) Equity Remuneration Plan for Key Employees of Orbotech Ltd. and its Affiliates and Subsidiaries (as Amended and Restated in 2005), (ii) 2010 Equity-Based Incentive Plan, and (iii) 2015 Equity-Based Incentive Plan (each, an “Assumed Equity Plan” and collectively the “Assumed Equity Plans”). As of September 30, 2020, there were 217,387 shares of our common stock underlying the outstanding Assumed RSUs under the Assumed Equity Plans. For details on the Assumed Equity Plans refer to Note 10 “Equity, Long-Term Incentive Compensation Plans and Non-Controlling Interest” of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020. Equity Incentive Plans - General Information The following table summarizes the combined activity under our equity incentive plans:
__________________ (1)The number of RSUs reflects the application of the award multiplier of 2.0x to calculate the impact of the award on the shares reserved under the 2004 Plan. (2)No additional stock options, RSUs or other awards will be granted under the Assumed Equity Plans. (3)Includes RSUs granted to senior management during the three months ended September 30, 2020 with performance-based vesting criteria (in addition to service-based vesting criteria for any of such RSUs that are deemed to have been earned) (“performance-based RSUs”). This line item includes all such performance-based RSUs granted during the three months ended September 30, 2020 reported at the maximum possible number of shares that may ultimately be issuable if all applicable performance-based criteria are achieved at their maximum levels and all applicable service-based criteria are fully satisfied (0.2 million shares for the three months ended September 30, 2020 reflects the application of the multiplier described above). (4)Represents the portion of RSUs granted with performance-based vesting criteria and reported at the actual number of shares issued upon achievement of the performance vesting criteria during the three months ended September 30, 2020. The fair value of stock-based awards is measured at the grant date and is recognized as an expense over the employee’s requisite service period. For RSUs granted without “dividend equivalent” rights, fair value is calculated using the closing price of our common stock on the grant date, adjusted to exclude the present value of dividends which are not accrued on those RSUs. The fair value for RSUs granted with “dividend equivalent” rights is determined using the closing price of our common stock on the grant date. Compensation expense for RSUs with performance metrics is calculated based upon expected achievement of the metrics specified in the grant, or when a grant contains a market condition, the grand date fair value using a Monte Carlo simulation. The fair value for purchase rights under our Employee Stock Purchase Plan is determined using a Black-Scholes model. The following table shows stock-based compensation expense for the indicated periods:
The following table shows stock-based compensation capitalized as inventory as of the dates indicated below:
Restricted Stock Units The following table shows the activity and weighted-average grant date fair value for RSUs during the three months ended September 30, 2020:
__________________ (1)Share numbers reflect actual shares subject to awarded RSUs. (2)Includes performance-based and market-based RSUs. (3)This line item includes performance-based RSUs granted during the three months ended September 30, 2020 reported at the maximum possible number of shares that may ultimately be issuable if all applicable performance-based criteria are achieved at their maximum levels and all applicable service-based criteria are fully satisfied (0.1 million shares for the three months ended September 30, 2020). The RSUs granted by us generally vest (a) with respect to awards with only service-based vesting criteria, over periods ranging from to four years and (b) with respect to awards with both performance-based and service-based vesting criteria, in two equal installments on the third and fourth anniversaries of the grant date and (c) with respect to awards with both market-based and service-based vesting criteria in three equal installments on the third, fourth and fifth anniversaries of the grant date, in each case subject to the recipient remaining employed by us as of the applicable vesting date. The RSUs granted to the independent members of the Board of Directors vest annually. The following table shows the weighted-average grant date fair value per unit for the RSUs granted, vested, and tax benefits realized by us in connection with vested and released RSUs for the indicated periods:
As of September 30, 2020, the unrecognized stock-based compensation expense balance related to RSUs was $182.8 million, excluding the impact of estimated forfeitures, and will be recognized over a weighted-average remaining contractual term and an estimated weighted-average amortization period of 1.6 years. The intrinsic value of outstanding RSUs as of September 30, 2020 was $424.1 million. Cash-Based Long-Term Incentive Compensation We have adopted a cash-based long-term incentive (“Cash LTI Plan”) program for many of our employees as part of our employee compensation program. Executives and non-employee members of the Board of Directors do not participate in this program. During the three months ended September 30, 2020 and 2019, we approved Cash LTI awards of $3.5 million and $1.8 million, respectively under our Cash LTI Plan. Cash LTI awards issued to employees under the Cash LTI Plan will vest in three or four equal installments, with one-third or one-fourth of the aggregate amount of the Cash LTI award vesting on each anniversary of the grant date over a or four-year period. In order to receive payments under a Cash LTI award, participants must remain employed by us as of the applicable award vesting date. During the three months ended September 30, 2020 and 2019, we recognized $19.4 million and $16.6 million, respectively, in compensation expense under the Cash LTI Plan. As of September 30, 2020, the unrecognized compensation balance (excluding the impact of estimated forfeitures) related to the Cash LTI Plan was $155.4 million. For details, refer to Note 10 “Equity, Long-Term Incentive Compensation Plans and Non-Controlling Interest” of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020. Employee Stock Purchase Plan Our Employee Stock Purchase Plan (“ESPP”) provides that eligible employees may contribute up to 15% of their eligible earnings toward the semi-annual purchase of our common stock. The ESPP is qualified under Section 423 of the Internal Revenue Code. The employee’s purchase price is derived from a formula based on the closing price of the common stock on the first day of the offering period versus the closing price on the date of purchase (or, if not a trading day, on the immediately preceding trading day). The offering period (or length of the look-back period) under the ESPP has a duration of six months, and the purchase price with respect to each offering period beginning on or after such date is, until otherwise amended, equal to 85% of the lesser of (i) the fair market value of our common stock at the commencement of the applicable six-month offering period or (ii) the fair market value of our common stock on the purchase date. We estimate the fair value of purchase rights under the ESPP using a Black-Scholes model. The fair value of each purchase right under the ESPP was estimated on the date of grant using the Black-Scholes model and the straight-line attribution approach with the following weighted-average assumptions:
The following table shows total cash received from employees for the issuance of shares under the ESPP, the number of shares purchased by employees through the ESPP, the tax benefits realized by us in connection with the disqualifying dispositions of shares purchased under the ESPP and the weighted-average fair value per share for the indicated periods:
The ESPP shares are replenished annually on the first day of each fiscal year by virtue of an evergreen provision. The provision allows for share replenishment equal to the lesser of 2.0 million shares or the number of shares which we estimate will be required to be issued under the ESPP during the forthcoming fiscal year. As of September 30, 2020, a total of 2.6 million shares were reserved and available for issuance under the ESPP. Quarterly Cash Dividends On August 3, 2020, we announced that our Board of Directors had approved an increase in the quarterly cash dividend level to $0.90 per share. On August 6, 2020, we announced that our Board of Directors had declared a quarterly cash dividend of $0.90 per share to be paid on September 1, 2020 to stockholders of record as of the close of business on August 17, 2020. The total amount of regular quarterly cash dividends and dividend equivalents paid during the three months ended September 30, 2020 and 2019 was $141.2 million and $121.6 million, respectively. The amount of accrued dividend equivalents payable for regular quarterly cash dividends on unvested RSUs with dividend equivalent rights as of September 30, 2020 and June 30, 2020 was $8.7 million and $8.3 million, respectively. These amounts will be paid upon vesting of the underlying RSUs. Non-Controlling Interest We have consolidated the results of Orbograph Ltd. (“Orbograph”), in which we own approximately 94% of the outstanding equity interest. Orbograph is engaged in the development and marketing of character recognition solutions to banks, financial and other payment processing institutions and healthcare providers. During the fourth quarter of fiscal 2020, we entered into an Asset Purchase Agreement to sell certain core assets of our non-strategic solar energy business, Orbotech LT Solar, LLC ("OLTS"). The sale was completed in the first quarter of fiscal 2021 and the proceeds were not material. Prior to the sale, we consolidated the results of OLTS, of which we own 97% of the outstanding equity interest as of September 30, 2020. OLTS was engaged in the research, development and marketing of products for the deposition of thin film coating of various materials on crystalline silicon photovoltaic wafers for solar energy panels through plasma-enhanced chemical vapor deposition (“PECVD”). Additionally, we have consolidated the results of PixCell Medical Technologies, Ltd. ("PixCell"), an Israeli company that is engaged in the development, marketing and sales of diagnostic equipment for point-of-care hematology applications of which we own approximately 52% of the outstanding equity interest and are entitled to appoint the majority of this company’s directors.
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STOCK REPURCHASE PROGRAM |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK REPURCHASE PROGRAM | STOCK REPURCHASE PROGRAM Our Board of Directors has authorized a program which permits us to repurchase up to $3.00 billion of our common stock. The intent of this program is to offset the dilution from our equity incentive plans, shares issued in connection with purchases under our ESPP, the issuance of shares in the Orbotech Acquisition, as well as to return excess cash to our stockholders. Subject to market conditions, applicable legal requirements and other factors, the repurchases were made in the open market in compliance with applicable securities laws, including the Securities Exchange Act of 1934 and the rules promulgated thereunder, such as Rule 10b-18 and, if pursuant to a written plan, Rule 10b5-1. This stock repurchase program has no expiration date and may be suspended at any time. As of September 30, 2020, an aggregate of approximately $0.84 billion was available for repurchase under the stock repurchase program. Share repurchases for the indicated periods (based on the trade date of the applicable repurchase) were as follows:
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NET INCOME PER SHARE |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET INCOME PER SHARE | NET INCOME PER SHAREBasic net income per share is calculated by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income per share is calculated by using the weighted-average number of common shares outstanding during the period, increased to include the number of additional shares of common stock that would have been outstanding if the shares of common stock underlying our outstanding dilutive restricted stock units had been issued. The dilutive effect of outstanding restricted stock units is reflected in diluted net income per share by application of the treasury stock method. The following table sets forth the computation of basic and diluted net income per share attributable to KLA:
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INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The following table provides details of income taxes:
Our effective tax rate is lower than the U.S. federal statutory rate during the three months ended September 30, 2020 primarily due to the proportion of earnings generated in jurisdictions with tax rates lower than the U.S. statutory rate and the proportion of the U.S. earnings eligible for the Foreign Derived Intangible Income deduction. The Foreign Derived Intangible Income deduction reduces the U.S. tax rate on sales to customers outside the U.S. In the normal course of business, we are subject to examination by tax authorities throughout the world. We are subject to federal income tax examinations for all years beginning from the fiscal year ended June 30, 2017 and are under United States income tax examination for the fiscal year ended June 30, 2018. We are subject to state income tax examinations for all years beginning from the fiscal year ended June 30, 2016. We are also subject to examinations in other major foreign jurisdictions, including Singapore and Israel, for all years beginning from the calendar year ended December 31, 2012. We are under audit in Germany related to Orbotech for the calendar years ended December 31, 2013 to December 31, 2015. We are also under audit in Israel related to KLA for the fiscal years ended June 30, 2017 to June 30, 2019. It is possible that certain examinations may be concluded in the next twelve months. The timing and resolution of income tax examinations is uncertain. The amounts paid, if any, upon resolution of issues raised by the taxing authorities may differ materially from the amounts accrued for each year. Although it is possible that our balance of gross unrecognized tax benefits could materially change in the next 12 months, we are unable to estimate the full range of possible adjustments to this balance given the uncertainty in the development of ongoing income tax examinations. In May 2017, Orbotech received an assessment from the Israel Tax Authority (“ITA”) with respect to its fiscal years 2012 through 2014 (the “Assessment”, and the “Audit Period”, respectively), for an aggregate amount of tax, after offsetting all net operating losses (“NOLs”) available through the end of 2014, of approximately NIS 229.0 million (equivalent to approximately $66.0 million which includes related interest and linkage differentials to the Israeli consumer price index as of date of the issuance of the Tax Decrees). On August 31, 2018, Orbotech filed an objection in respect of the tax assessment (the “Objection”). The ITA completed the second stage of the audit, in which the claims Orbotech raised in the Objection were examined by different personnel at the ITA. In addition, the ITA examined additional items during this second stage of the audit. As Orbotech and the ITA did not reach an agreement during the second stage, the ITA issued Tax Decrees to Orbotech on August 28, 2019 (“Tax Decrees”) for an aggregate amount of tax, after offsetting all NOLs available through the end of 2014, of approximately NIS 257 million (equivalent to approximately $73 million which includes related interest and linkage differentials to the Israeli consumer price index as of the date of the issuance of the Tax Decrees). These Tax Decrees replaced the Assessment. We believe that our recorded unrecognized tax benefits are sufficient to cover the resolution of these Tax Decrees. Orbotech filed a notice of appeal with respect to the above Tax Decrees with the District Court of Tel Aviv on September 26, 2019. On February 27, 2020 the ITA filed its arguments in support of the Tax Decrees. Orbotech filed the grounds of appeal with respect to the above Tax Decrees on July 30, 2020. We are currently in the pre-trial hearing stage of the process and the next pre-trial meeting is scheduled for January 2021. The ITA and Orbotech are continuing discussions in an effort to resolve this matter in a mutually agreeable manner. In connection with the above, there is an ongoing criminal investigation in Israel against Orbotech, certain of its employees and its tax consultant. On April 11, 2018, Orbotech received a “suspect notification letter” (dated March 28, 2018) from the Tel Aviv District Attorney’s Office (Fiscal and Financial). In the letter, it was noted that the investigation file was transferred from the Assessment Investigation Officer to the District Attorney’s Office. The letter further states that the District Attorney’s Office has not yet made a decision regarding submission of an indictment against Orbotech; and that if after studying the case, a decision is made to consider prosecuting Orbotech, Orbotech will receive an additional letter, and within 30 days, Orbotech may present its arguments to the District Attorney’s Office as to why it should not be indicted. On October 27, 2019, we received a request for additional information from the District Attorney's Office. We will continue to monitor the progress of the District Attorney’s Office investigation; however, we cannot anticipate when the review of the case will be completed and what will be the results thereof. We intend to cooperate with the District Attorney’s Office to enable them to conclude their investigation.
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LITIGATION AND OTHER LEGAL MATTERS |
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Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION AND OTHER LEGAL MATTERS | LITIGATION AND OTHER LEGAL MATTERSWe are named from time to time as a party to lawsuits and other types of legal proceedings and claims in the normal course of our business. Actions filed against us include commercial, intellectual property, customer, and labor and employment related claims, including complaints of alleged wrongful termination and potential class action lawsuits regarding alleged violations of federal and state wage and hour and other laws. In general, legal proceedings and claims, regardless of their merit, and associated internal investigations (especially those relating to intellectual property or confidential information disputes) are often expensive to prosecute, defend or conduct and may divert management’s attention and other company resources. Moreover, the results of legal proceedings are difficult to predict, and the costs incurred in litigation can be substantial, regardless of outcome. We believe the amounts provided in our Condensed Consolidated Financial Statements are adequate in light of the probable and estimated liabilities. However, because such matters are subject to many uncertainties, and the ultimate outcomes are not predictable, there can be no assurances that the actual amounts required to satisfy alleged liabilities from the matters described above will not exceed the amounts reflected in our Condensed Consolidated Financial Statements or will not have a material adverse effect on our results of operations, financial condition or cash flows. |
COMMITMENTS AND CONTINGENCIES |
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COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Factoring. We have agreements (referred to as “factoring agreements”) with financial institutions to sell certain of our trade receivables and promissory notes from customers without recourse. We do not believe we are at risk for any material losses as a result of these agreements. In addition, we periodically sell certain letters of credit (“LCs”), without recourse, received from customers in payment for goods and services. The following table shows total receivables sold under factoring agreements and proceeds from sales of LCs for the indicated periods:
Factoring and LC fees for the sale of certain trade receivables were recorded in other expense (income), net and were not material for the periods presented. Purchase Commitments. We maintain commitments to purchase inventory from our suppliers as well as goods, services, and other assets in the ordinary course of business. Our liability under these purchase commitments is generally restricted to a forecasted time-horizon as mutually agreed upon between the parties. This forecasted time-horizon can vary among different suppliers. Our estimate of our significant purchase commitments for primarily material, services, supplies and asset purchases is approximately $804.3 million as of September 30, 2020, which are primarily due within the next 12 months. Actual expenditures will vary based upon the volume of the transactions and length of contractual service provided. In addition, the amounts paid under these arrangements may be less in the event that the arrangements are renegotiated or canceled. Certain agreements provide for potential cancellation penalties. Cash Long-Term Incentive Plan. As of September 30, 2020, we have committed $198.5 million for future payment obligations under our Cash LTI Plan. The calculation of compensation expense related to the Cash LTI Plan includes estimated forfeiture rate assumptions. Cash LTI awards issued to employees under the Cash LTI Plan vest in three or four equal installments, with one-third or one-fourth of the aggregate amount of the Cash LTI award vesting on each anniversary of the grant date over a or four-year period. In order to receive payments under a Cash LTI award, participants must remain employed by us as of the applicable award vesting date. Guarantees and Contingencies. We maintain guarantee arrangements available through various financial institutions for up to $79.8 million, of which $67.0 million had been issued as of September 30, 2020, primarily to fund guarantees to customs authorities for value-added tax (“VAT”) and other operating requirements of our subsidiaries in Europe, Israel and Asia. Indemnification Obligations. Subject to certain limitations, we are obligated to indemnify our current and former directors, officers and employees with respect to certain litigation matters and investigations that arise in connection with their service to us. These obligations arise under the terms of our certificate of incorporation, our bylaws, applicable contracts, and Delaware and California law. The obligation to indemnify generally means that we are required to pay or reimburse the individuals’ reasonable legal expenses and possibly damages and other liabilities incurred in connection with these matters. For example, we have paid or reimbursed legal expenses incurred in connection with the investigation of our historical stock option practices and the related litigation and government inquiries by several of our current and former directors, officers and employees. Although the maximum potential amount of future payments we could be required to make under the indemnification obligations generally described in this paragraph is theoretically unlimited, we believe the fair value of this liability, to the extent estimable, is appropriately considered within the reserve we have established for currently pending legal proceedings. We are a party to a variety of agreements pursuant to which we may be obligated to indemnify the other party with respect to certain matters. Typically, these obligations arise in connection with contracts and license agreements or the sale of assets, under which we customarily agree to hold the other party harmless against losses arising from, or provides customers with other remedies to protect against, bodily injury or damage to personal property caused by our products, non-compliance with our product performance specifications, infringement by our products of third-party intellectual property rights and a breach of warranties, representations and covenants related to matters such as title to assets sold, validity of certain intellectual property rights, non-infringement of third-party rights, and certain income tax-related matters. In each of these circumstances, payment by us is typically subject to the other party making a claim to and cooperating with us pursuant to the procedures specified in the particular contract. This usually allows us to challenge the other party’s claims or, in case of breach of intellectual property representations or covenants, to control the defense or settlement of any third-party claims brought against the other party. Further, our obligations under these agreements may be limited in terms of amounts, activity (typically at our option to replace or correct the products or terminate the agreement with a refund to the other party), and duration. In some instances, we may have recourse against third parties and/or insurance covering certain payments made by us. In addition, we may in limited circumstances enter into agreements that contain customer-specific commitments on pricing, tool reliability, spare parts stocking levels, response time and other commitments. Furthermore, we may give these customers limited audit or inspection rights to enable them to confirm that we are complying with these commitments. If a customer elects to exercise its audit or inspection rights, we may be required to expend significant resources to support the audit or inspection, as well as to defend or settle any dispute with a customer that could potentially arise out of such audit or inspection. To date, we have made no significant accruals in our Condensed Consolidated Financial Statements for this contingency. While we have not in the past incurred significant expenses for resolving disputes regarding these types of commitments, we cannot make any assurance that it will not incur any such liabilities in the future. It is not possible to predict the maximum potential amount of future payments under these or similar agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by us under these agreements have not had a material effect on our business, financial condition, results of operations or cash flows.
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES |
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The authoritative guidance requires companies to recognize all derivative instruments and hedging activities, including foreign currency exchange contracts and interest rate lock agreements, (collectively “derivatives”) as either assets or liabilities at fair value on the Condensed Consolidated Balance Sheets. In accordance with the accounting guidance, we designate foreign currency exchange contracts and interest rate lock agreements as cash flow hedges of certain forecasted foreign currency denominated sales, purchase and spending transactions, and the benchmark interest rate of the corresponding debt financing, respectively. Our foreign subsidiaries operate and sell our products in various global markets. As a result, we are exposed to risks relating to changes in foreign currency exchange rates. We utilize foreign currency forward exchange contracts and option contracts to hedge against future movements in foreign exchange rates that affect certain existing and forecasted foreign currency denominated sales and purchase transactions, such as the Japanese yen, the euro, the pound sterling and the Israeli new shekel. We routinely hedge our exposures to certain foreign currencies with various financial institutions in an effort to minimize the impact of certain currency exchange rate fluctuations. These currency forward exchange contracts and options, designated as cash flow hedges, generally have maturities of less than 18 months. Cash flow hedges are evaluated for effectiveness monthly, based on changes in total fair value of the derivatives. If a financial counterparty to any of our hedging arrangements experiences financial difficulties or is otherwise unable to honor the terms of the foreign currency hedge, we may experience material losses. In January 2020, we entered into a series of forward contracts (the “2020 Rate Lock Agreements”) with a notional amount of $350.0 million in aggregate to lock the benchmark interest rate on a portion of the 2020 Senior Notes. The 2020 Rate Lock Agreements were terminated on the date of the pricing of the 2020 Senior Notes and we recorded the fair value of $21.5 million as a loss within accumulated other comprehensive income (loss) (“OCI”) as of March 31, 2020, which is being amortized over the life of the debt. We entered into similar forward contracts in prior years to lock the benchmark interest rates prior to expected debt issuances, for which the original fair values of $13.6 million loss in fiscal 2019 and $7.5 million gain in fiscal 2015 were recognized in OCI, and are being amortized to interest expense over the lives of the associated debt. We recognized a net expense of $0.3 million and $0.1 million for the three months ended September 30, 2020 and 2019, respectively, for the amortization of the net of the three rate lock agreements that had been recognized in accumulated OCI, which increased the interest expense on a net basis. As of September 30, 2020, the aggregate unamortized portion of the fair value of the forward contracts for the Rate Lock Agreements was $29.8 million. For derivatives that are designated and qualify as cash flow hedges, the effective portion of the gains or losses is reported in OCI and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Prior to adopting the new accounting guidance for hedge accounting, time value was excluded from the assessment of effectiveness for derivatives designated as cash flow hedges. Time value was amortized on a mark-to-market basis and recognized in earnings over the life of the derivative contract. For derivative contracts executed after adopting the new accounting guidance, the election to include time value for the assessment of effectiveness is made on all forward contracts designated as cash flow hedges. The change in fair value of the derivative is recorded in OCI until the hedged item is recognized in earnings. The assessment of effectiveness of options contracts designated as cash flow hedges continue to exclude time value after adopting the new accounting guidance. The initial value of the component excluded from the assessment of effectiveness is recognized in earnings over the life of the derivative contract. Any difference between change in the fair value of the excluded components and the amounts recognized in earnings are recorded in OCI. For derivatives that are not designated as cash flow hedges, gains and losses are recognized in other expense (income), net. We use foreign currency forward contracts to hedge certain foreign currency denominated assets or liabilities. The gains and losses on these derivative instruments are largely offset by the changes in the fair value of the assets or liabilities being hedged. Derivatives in Cash Flow Hedging Relationships: Foreign Exchange and Interest Rate Contracts The gains (losses) on derivatives in cash flow hedging relationships recognized in OCI for the indicated periods were as follows:
The locations and amounts of designated and non-designated derivative’s gains and losses reported in the Condensed Consolidated Statements of Operations for the indicated periods were as follows:
The U.S. dollar equivalent of all outstanding notional amounts of foreign currency hedge contracts, with maximum remaining maturities of approximately seven months as of the dates indicated below were as follows:
The locations and fair value of our derivatives reported in our Condensed Consolidated Balance Sheets as of the dates indicated below were as follows:
The changes in OCI, before taxes, related to derivatives for the indicated periods were as follows:
Offsetting of Derivative Assets and Liabilities We present derivatives at gross fair values in the Condensed Consolidated Balance Sheets. We have entered into arrangements with each of our counterparties, which reduce credit risk by permitting net settlement of transactions with the same counterparty under certain conditions. The information related to the offsetting arrangements for the periods indicated was as follows (in thousands):
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RELATED PARTY TRANSACTIONS |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS During the three months ended September 30, 2020 and 2019, we purchased from, or sold to, several entities, where one or more of our executive officers or members of our Board of Directors, or their immediate family members, were, during the periods presented, an executive officer or a board member of a subsidiary, or in the case of The Vanguard Group, Inc. beneficially owns more than 10% of our outstanding stock, including Anaplan, Inc., Ansys, Inc., Citrix Systems, Inc., HP Inc., Keysight Technologies, Inc., Proofpoint, Inc. and The Vanguard Group, Inc. The following table provides the transactions with these parties for the indicated periods (for the portion of such period that they were considered related):
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SEGMENT REPORTING AND GEOGRAPHIC INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION | SEGMENT REPORTING AND GEOGRAPHIC INFORMATION ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Our CODM is our Chief Executive Officer. We have four reportable segments: Semiconductor Process Control; Specialty Semiconductor Process; PCB, Display and Component Inspection; and Other. The reportable segments are determined based on several factors including, but not limited to, customer base, homogeneity of products, technology, delivery channels and similar economic characteristics. Semiconductor Process Control The Semiconductor Process Control (“SPC”) segment offers comprehensive portfolio of inspection, metrology and data analytics products, and related service, which helps integrated circuit manufacturers achieve target yield throughout the entire semiconductor fabrication process-from research and development (“R&D”) to final volume production. Our differentiated products and services are designed to provide comprehensive solutions that help our customers accelerate development and production ramp cycles, achieve higher and more stable semiconductor die yields and improve their overall profitability. This reportable segment is comprised of two operating segments. Specialty Semiconductor Process The Specialty Semiconductor Manufacturing segment develops and sells advanced vacuum deposition and etching process tools, which are used by a broad range of specialty semiconductor customers, including manufacturers of microelectromechanical systems (“MEMS”), radio frequency (“RF”) communication chips, and power semiconductors for automotive and industrial applications. This reportable segment is comprised of one operating segment. PCB, Display and Component Inspection The PCB, Display and Component Inspection segment enables electronic device manufacturers to inspect, test and measure printed circuit boards (“PCBs”), flat panel displays (“FPDs”) and ICs to verify their quality, pattern the desired electronic circuitry on the relevant substrate and perform three-dimensional shaping of metalized circuits on multiple surfaces. This segment also engages in the development and marketing of character recognition solutions to banks, financial and other payment processing institutions and healthcare providers. This reportable segment is comprised of two operating segments. Other During the fourth quarter of fiscal 2020, we entered into an Asset Purchase Agreement to sell certain core assets of our non-strategic solar energy business, which was included in our Other reportable segment. This reportable segment remains comprised of one operating segment. The CODM assesses the performance of each operating segment and allocates resources to those segments based on total revenue and segment gross margin and does not evaluate the segments using discrete asset information. Segment gross margin excludes corporate allocations and effects of foreign exchange rates, amortization of intangible assets, amortization of inventory fair value adjustments, and transaction costs associated with our acquisitions related to costs of revenues. The following is a summary of results for each of our four reportable segments for the indicated periods:
The following table reconciles total reportable segment revenue to total revenue for the indicated periods:
The following table reconciles total segment gross margin to total income before income taxes for the indicated periods:
__________________ (1)Acquisition-related charges primarily include amortization of intangible assets and amortization of inventory fair value adjustments presented as part of costs of revenues. Our significant operations outside the United States include manufacturing facilities in China, Germany, Israel and Singapore and sales, marketing and service offices in Japan, the rest of the Asia Pacific region and Europe. For geographical revenue reporting, revenues are attributed to the geographic location in which the customer is located. Long-lived assets consist of land, property and equipment, net and are attributed to the geographic region in which they are located. The following is a summary of revenues by geographic region, based on ship-to location, for the indicated periods:
The following is a summary of revenues by major products for the indicated periods:
Wafer Inspection, and Patterning products are offered in Semiconductor Process Control segment. Services are offered in multiple segments. Other includes primarily refurbished systems, remanufactured legacy systems, and enhancements and upgrades for previous-generation products which are part of Semiconductor Process Control segment. In the three months ended September 30, 2020, two customers accounted for approximately 14% and 12% of total revenues. In the three months ended September 30, 2019, one customer accounted for approximately 19% of total revenues. One customer on an individual basis accounted for greater than 10% of net accounts receivables at September 30, 2020 and June 30, 2020. Land, property and equipment, net by geographic region as of the dates indicated below were as follows:
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RESTRUCTURING CHARGES |
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Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING CHARGES | RESTRUCTURING CHARGES In September 2019, management approved a plan to streamline our organization and business processes that included the reduction of workforce, which is expected to be completed in the second half of our fiscal year 2021, primarily in our PCB, Display and Component Inspection segment. Restructuring charges were $3.5 million for the three months ended September 30, 2020, and included $1.0 million of non-cash charges for accelerated depreciation related to certain right-of use assets and fixed assets to be abandoned. As of September 30, 2020, the accrual for restructuring charges was $7.0 million. We expect to incur additional restructuring charges, including additional severance costs and other related costs in future periods in connection with the completion of our workforce reduction.
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BASIS OF PRESENTATION (Policies) |
3 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation. For purposes of this report, “KLA,” the “Company,” “we,” “our,” “us,” or similar references mean KLA Corporation, and its majority-owned subsidiaries unless the context requires otherwise. The Condensed Consolidated Financial Statements have been prepared by us pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The unaudited interim Condensed Consolidated Financial Statements reflect all adjustments (consisting only of normal, recurring adjustments) necessary for a fair statement of the financial position, results of operations, comprehensive income, stockholders’ equity and cash flows for the periods indicated. These Condensed Consolidated Financial Statements and notes, however, should be read in conjunction with Item 8, “Financial Statements and Supplementary Data” included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020. The Condensed Consolidated Financial Statements include the accounts of KLA and its majority-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. On February 20, 2019 ("Acquisition Date"), we completed the acquisition of Orbotech, Ltd. ("Orbotech") hereinafter referred to as the "Orbotech Acquisition". The results of operations for the three months ended September 30, 2020 are not necessarily indicative of the results that may be expected for any other interim period or for the full fiscal year ending June 30, 2021. Certain reclassifications have been made to the prior year’s Condensed Consolidated Financial Statements to conform to the current year presentation. The reclassifications did not have material effects on the prior year’s Condensed Consolidated Balance Sheets, Statements of Operations, Comprehensive Income and Cash Flows.
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Management Estimates | Management Estimates. The preparation of the Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions in applying our accounting policies that affect the reported amounts of assets and liabilities (and related disclosure of contingent assets and liabilities) at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Credit Losses | Credit Losses Cash Equivalents and Marketable Securities. All highly liquid debt instruments with original or remaining maturities of less than three months at the date of purchase are cash equivalents. Marketable securities are generally classified as available-for-sale for use in current operations, if required, and are reported at fair value, with unrealized gains and non-credit related unrealized losses, net of tax, presented as a separate component of stockholders’ equity under the caption “Accumulated other comprehensive income (loss)” (“AOCI”). All realized gains and losses are recorded in earnings in the period of occurrence. The specific identification method is used to determine the realized gains and losses on investments. We regularly review the available-for-sale debt securities in an unrealized loss position, and evaluate the current expected credit loss by considering available information relevant to the collectibility of the security, such as historical experience, market data, issuer-specific factors including credit ratings, default and loss rates of the underlying collateral and structure and credit enhancements, current economic conditions and reasonable and supportable forecasts. If we do not expect to recover the entire amortized cost of the security, the amount representing credit losses, defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis of the debt security, is recorded as an allowance for credit losses with an offsetting entry to earnings; and the amount that is not credit-related is recognized in other comprehensive income (loss). If we have the intent to sell the security or it is more likely than not that we will be required to sell the security before recovery of its entire amortized cost basis, we first write off any previously recognized allowance for credit losses with an offsetting entry to the security’s amortized cost basis. If the allowance has been fully written off and fair value is less than amortized cost basis, we write down the amortized cost basis of the security to its fair value with an offsetting entry to net income. There were no credit losses on available-for-sale debt securities recognized for the three months ended September 30, 2020 and 2019. Allowance for Credit Losses. A majority of our accounts receivable are derived from sales to large multinational semiconductor and electronics manufacturers throughout the world. We maintain an allowance for credit losses for expected uncollectible accounts receivable, which is recorded as an offset to accounts receivable and changes in such are classified as selling, general and administrative expense in the Condensed Consolidated Statements of Income. We assess collectibility by reviewing accounts receivable on a collective basis where similar risk characteristics exist and on an individual basis when we identify specific customers with known disputes or collectibility issues. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The allowance for credit losses is reviewed on a quarterly basis to assess the adequacy of the allowance. For the three months ended September 30, 2020, our assessment considered the impact of COVID-19 and estimates of expected credit and collectability trends. The credit losses recognized were not significant for the three months ended September 30, 2020 and 2019. Volatility in market conditions and evolving credit trends are difficult to predict and may cause variability and volatility that may have a material impact on our allowance for credit losses in future periods.
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted As explained above, on July 1, 2020 we adopted ASC 326, which was issued by the Financial Accounting Board (“FASB”) in June 2016 as Accounting Standards Update ("ASU") No 2016-13 Financial Instruments – Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments. The ASU replaced previous incurred loss impairment guidance and established a single expected credit losses allowance framework for financial assets carried at amortized cost. It also eliminated the concept of other-than-temporary impairment and requires credit losses related to certain available-for-sale debt securities to be recorded through an allowance for credit losses. We using the modified retrospective method, which requires a cumulative-effect adjustment to the opening balance of retained earnings to be recognized on the date of adoption and, accordingly, recorded a net decrease of $5.5 million to retained earnings as of July 1, 2020. Please see the “Credit Losses” accounting policy in the “Significant Accounting Policies” section above. In August 2018, the FASB issued an accounting standard update which modifies the existing accounting standards for the fair value measurement disclosure. This update eliminates the disclosures of the amount of and reasons for transfers between level 1 and level 2 of the fair value hierarchy, and the policy for the timing of transfers between levels. We adopted this update beginning in the first quarter of our fiscal year ending June 30, 2021 on a retrospective basis and the adoption had no material impact on our Condensed Consolidated Financial Statements. In August 2018, the FASB issued an accounting standard update to amend the disclosure requirements related to defined benefit pension and other post-retirement plans. Some of the changes include adding a disclosure requirement for significant gains and losses related to changes in the benefit obligation for the period and removing the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year. We adopted this update beginning in the first quarter of the fiscal year ending June 30, 2021 on a retrospective basis and the adoption had no material impact on our Condensed Consolidated Financial Statements. In August 2018, the FASB issued an accounting standard update to align the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance clarifies which costs should be capitalized including the cost to acquire the license and the related implementation costs. We adopted this update beginning in the first quarter of our fiscal year ending June 30, 2021 on a prospective basis, and the adoption had no material impact on our Condensed Consolidated Financial Statements. Updates Not Yet Effective In December 2019, the FASB issued an accounting standard update to simplify the accounting for income taxes in ASC 740, Income Taxes (“ASC 740”). This amendment removes certain exceptions and improves consistent application of accounting principles for certain areas in ASC 740. The update is effective for us beginning in the first quarter of our fiscal year ending June 30, 2022, and early adoption is permitted. We are currently evaluating the impact of this accounting standard update on our Consolidated Financial Statements. In August 2020, the FASB issued an accounting standard update to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The standard eliminates beneficial conversion feature and cash conversion models resulting in more convertible instruments being accounted for as a single unit; and modifies the guidance on the computation of earnings per share for convertible instruments and contracts on an entity’s own equity. The update is effective for us in the first quarter of our fiscal year ending June 30, 2023 and can be adopted either on a fully retrospective basis or modified retrospective basis. Early adoption is permitted from our first quarter of fiscal year ending June 30, 2022. We are currently evaluating the impact of this accounting standard update on our Condensed Consolidated Financial Statements.
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Fair Value Measurements | Our financial assets and liabilities are measured and recorded at fair value, except for our debt and certain equity investments in privately-held companies. Equity investments without a readily available fair value are accounted for using the measurement alternative. The measurement alternative is calculated as cost minus impairment, if any, plus or minus changes resulting from observable price changes. Our non-financial assets, such as goodwill, intangible assets, and land, property and equipment, are assessed for impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred.
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Fair Value of Financial Instruments | Fair Value of Financial Instruments. We have evaluated the estimated fair value of financial instruments using available market information and valuations as provided by third-party sources. The use of different market assumptions and/or estimation methodologies could have a significant effect on the estimated fair value amounts. The fair value of our cash equivalents, accounts receivable, accounts payable and other current assets and liabilities approximate their carrying amounts due to the relatively short maturity of these items. |
REVENUE (Tables) |
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Schedule of Contract Balances | The following table represents the opening and closing balances of accounts receivables, net, contract assets and contract liabilities for the indicated periods.
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FAIR VALUE MEASUREMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | Financial assets (excluding cash held in operating accounts and time deposits) and liabilities measured at fair value on a recurring basis, as of the date indicated below, were presented on our Condensed Consolidated Balance Sheets as follows:
________________ (1) Excludes cash of $471.2 million held in operating accounts and time deposits of $133.8 million as of September 30, 2020. Financial assets (excluding cash held in operating accounts and time deposits) and liabilities measured at fair value on a recurring basis, as of the date indicated below, were presented on our Condensed Consolidated Balance Sheets as follows:
________________ (1) Excludes cash of $460.8 million held in operating accounts and time deposits of $78.7 million as of June 30, 2020.
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FINANCIAL STATEMENT COMPONENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Components | Condensed Consolidated Balance Sheets
________________ (1)We have a non-qualified deferred compensation plan (known as “Executive Deferred Savings Plan” or “EDSP”) under which certain employees and non-employee directors may defer a portion of their compensation. The expense (benefit) associated with changes in the EDSP liability included in selling, general and administrative expense was $13.2 million and $1.9 million during the three months ended September 30, 2020 and 2019, respectively. The amount of net gains (losses) associated with changes in the EDSP assets included in selling, general and administrative expense was $13.3 million and $2.3 million during the three months ended September 30, 2020 and 2019, respectively. For additional details, refer to Note 1 “Description of Business and Summary of Significant Accounting Policies” of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020.
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Components of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive income (loss) (“OCI”) as of the dates indicated below were as follows:
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Reclassification out of Accumulated Other Comprehensive Income | The effects on net income (loss) of amounts reclassified from accumulated OCI to the Condensed Consolidated Statements of Operations for the indicated period were as follows (in thousands):
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MARKETABLE SECURITIES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Marketable Securities | The amortized cost and fair value of marketable securities as of the dates indicated below were as follows:
________________ (1) Time deposits excluded from fair value measurements.
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Schedule of Investments with Gross Unrealized Losses | The following table summarizes the fair value and gross unrealized losses of our investments that were in an unrealized loss position as of the date indicated below, none of which were in a continuous loss position for 12 months or more:
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Contractual Maturities of Securities | The contractual maturities of securities classified as available-for-sale, regardless of their classification on our Condensed Consolidated Balance Sheets, as of the date indicated below were as follows:
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GOODWILL AND PURCHASED INTANGIBLE ASSETS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill Balances | The following table presents goodwill carrying value and the movements during the three months ended September 30, 2020(1):
_________________ (1)No goodwill was assigned to the Other reporting unit, and accordingly it was excluded in the table above.
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Components of Purchased Intangible Assets | The components of purchased intangible assets as of the dates indicated below were as follows:
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Schedule of Amortization Expense for Purchased Intangible Assets | Amortization expense for purchased intangible assets for the periods indicated below was as follows:
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Schedule of Remaining Estimated Amortization Expense | Based on the purchased intangible assets gross carrying amount recorded as of September 30, 2020, the remaining estimated annual amortization expense is expected to be as follows:
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DEBT (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | The following table summarizes our debt as of September 30, 2020 and June 30, 2020:
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LEASES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases Cost | Supplemental cash flow information related to leases was as follows:
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Maturities of Lease Liabilities | Maturities of lease liabilities as of September 30, 2020 were as follows:
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EQUITY, LONG-TERM INCENTIVE COMPENSATION PLANS AND NON-CONTROLLING INTEREST (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Combined Activity Under Equity Incentive Plans | The following table summarizes the combined activity under our equity incentive plans:
__________________ (1)The number of RSUs reflects the application of the award multiplier of 2.0x to calculate the impact of the award on the shares reserved under the 2004 Plan. (2)No additional stock options, RSUs or other awards will be granted under the Assumed Equity Plans. (3)Includes RSUs granted to senior management during the three months ended September 30, 2020 with performance-based vesting criteria (in addition to service-based vesting criteria for any of such RSUs that are deemed to have been earned) (“performance-based RSUs”). This line item includes all such performance-based RSUs granted during the three months ended September 30, 2020 reported at the maximum possible number of shares that may ultimately be issuable if all applicable performance-based criteria are achieved at their maximum levels and all applicable service-based criteria are fully satisfied (0.2 million shares for the three months ended September 30, 2020 reflects the application of the multiplier described above). (4)Represents the portion of RSUs granted with performance-based vesting criteria and reported at the actual number of shares issued upon achievement of the performance vesting criteria during the three months ended September 30, 2020.
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Schedule of Stock-based Compensation Expense | The following table shows stock-based compensation expense for the indicated periods:
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Schedule of Stock-based Compensation Capitalized as Inventory | The following table shows stock-based compensation capitalized as inventory as of the dates indicated below:
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Schedule of Restricted Stock Activity | The following table shows the activity and weighted-average grant date fair value for RSUs during the three months ended September 30, 2020:
__________________ (1)Share numbers reflect actual shares subject to awarded RSUs. (2)Includes performance-based and market-based RSUs. (3)This line item includes performance-based RSUs granted during the three months ended September 30, 2020 reported at the maximum possible number of shares that may ultimately be issuable if all applicable performance-based criteria are achieved at their maximum levels and all applicable service-based criteria are fully satisfied (0.1 million shares for the three months ended September 30, 2020
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Schedule of Grant Date Fair Value, Weighted Average Grant Date Fair Value, and Tax Benefits for Restricted Stock Units | The following table shows the weighted-average grant date fair value per unit for the RSUs granted, vested, and tax benefits realized by us in connection with vested and released RSUs for the indicated periods:
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Schedule of Employee Stock Purchase Rights Valuation | The fair value of each purchase right under the ESPP was estimated on the date of grant using the Black-Scholes model and the straight-line attribution approach with the following weighted-average assumptions:
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Schedule of Tax Benefits Realized and Weighted-average fair value for the ESPP | The following table shows total cash received from employees for the issuance of shares under the ESPP, the number of shares purchased by employees through the ESPP, the tax benefits realized by us in connection with the disqualifying dispositions of shares purchased under the ESPP and the weighted-average fair value per share for the indicated periods:
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STOCK REPURCHASE PROGRAM (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share Repurchases | Share repurchases for the indicated periods (based on the trade date of the applicable repurchase) were as follows:
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NET INCOME PER SHARE (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Net Income (Loss) Per Share | The following table sets forth the computation of basic and diluted net income per share attributable to KLA:
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INCOME TAXES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Details of Income Taxes | The following table provides details of income taxes:
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COMMITMENTS AND CONTINGENCIES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Receivables Sold Under Factoring Agreements | The following table shows total receivables sold under factoring agreements and proceeds from sales of LCs for the indicated periods:
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments, Location, Designated and Non-Designated, Gains (Losses) | The gains (losses) on derivatives in cash flow hedging relationships recognized in OCI for the indicated periods were as follows:
The locations and amounts of designated and non-designated derivative’s gains and losses reported in the Condensed Consolidated Statements of Operations for the indicated periods were as follows:
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Schedule of Notional Amounts of Derivatives Outstanding | The U.S. dollar equivalent of all outstanding notional amounts of foreign currency hedge contracts, with maximum remaining maturities of approximately seven months as of the dates indicated below were as follows:
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments, Fair Value | The locations and fair value of our derivatives reported in our Condensed Consolidated Balance Sheets as of the dates indicated below were as follows:
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Balances and Changes in Accumulated Other Comprehensive Income Related to Derivative Instruments | The changes in OCI, before taxes, related to derivatives for the indicated periods were as follows:
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Offsetting of Assets and Liabilities | The information related to the offsetting arrangements for the periods indicated was as follows (in thousands):
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RELATED PARTY TRANSACTIONS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | The following table provides the transactions with these parties for the indicated periods (for the portion of such period that they were considered related):
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SEGMENT REPORTING AND GEOGRAPHIC INFORMATION (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Results for Reportable Segments | The following is a summary of results for each of our four reportable segments for the indicated periods:
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Reconciliation of Total Reportable Segments Revenue to Total Revenue | The following table reconciles total reportable segment revenue to total revenue for the indicated periods:
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Reconciliation of Total Segment Gross Margin to Total Income Before Income Taxes | The following table reconciles total segment gross margin to total income before income taxes for the indicated periods:
__________________ (1)Acquisition-related charges primarily include amortization of intangible assets and amortization of inventory fair value adjustments presented as part of costs of revenues.
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Schedule of Revenues by Geographic Region | The following is a summary of revenues by geographic region, based on ship-to location, for the indicated periods:
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Schedule of Revenues by Major Products | The following is a summary of revenues by major products for the indicated periods:
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Schedule of Long-Lived Assets by Geographic Region | Land, property and equipment, net by geographic region as of the dates indicated below were as follows:
|
BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Jul. 01, 2020 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||||
Net decrease of retained earnings | $ (2,762,345) | $ (2,679,619) | $ (2,681,010) | $ (2,677,693) | |
Cumulative Effect, Period of Adoption, Adjustment | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||||
Net decrease of retained earnings | 5,530 | ||||
Retained Earnings | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Net decrease of retained earnings | $ (753,915) | $ (733,173) | (654,930) | $ (714,825) | |
Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Net decrease of retained earnings | $ 5,500 | $ 5,530 |
REVENUE - Schedule of Contract Balances (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Jun. 30, 2020 |
|
Accounts receivable, net | ||
Accounts receivable, net | $ 1,028,883 | $ 1,107,413 |
Change in accounts receivable, net | $ (78,530) | |
Percentage change in accounts receivable, net | (7.00%) | |
Contract assets | ||
Contract assets | $ 97,751 | 99,876 |
Change in contract assets | $ (2,125) | |
Percentage change in contract assets | (2.00%) | |
Contract liabilities | ||
Contract liabilities | $ 579,776 | $ 666,055 |
Change in contract liabilities | $ (86,279) | |
Percentage change in contract liabilities | (13.00%) |
FINANCIAL STATEMENT COMPONENTS - Accumulated Other Comprehensive Income (Loss) (Details) $ in Thousands |
Sep. 30, 2020
USD ($)
|
---|---|
Accumulated Other Comprehensive Income (Loss) | |
Beginning balance | $ 2,665,424 |
Ending balance | 2,747,184 |
Currency Translation Adjustments | |
Accumulated Other Comprehensive Income (Loss) | |
Beginning balance | (43,957) |
Ending balance | (38,920) |
Unrealized Gains (Losses) on Available-for-Sale Securities | |
Accumulated Other Comprehensive Income (Loss) | |
Beginning balance | 3,683 |
Ending balance | 2,857 |
Unrealized Gains (Losses) on Cash Flow Hedges | |
Accumulated Other Comprehensive Income (Loss) | |
Beginning balance | (23,250) |
Ending balance | (24,014) |
Unrealized Gains (Losses) on Defined Benefit Plans | |
Accumulated Other Comprehensive Income (Loss) | |
Beginning balance | (16,250) |
Ending balance | (19,369) |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) | |
Beginning balance | (79,774) |
Ending balance | $ (79,446) |
MARKETABLE SECURITIES - Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Jun. 30, 2020 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | $ 100,401 | $ 74,260 |
Gross Unrealized Losses | (96) | (59) |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 54,747 | 44,429 |
Gross Unrealized Losses | (88) | (50) |
Municipal securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 2,328 | 870 |
Gross Unrealized Losses | 0 | 0 |
U.S. Government agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 24,762 | 9,951 |
Gross Unrealized Losses | (8) | (7) |
U.S. Treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 18,564 | 19,010 |
Gross Unrealized Losses | $ 0 | $ (2) |
MARKETABLE SECURITIES - Contractual Maturities (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Jun. 30, 2020 |
---|---|---|
Amortized Cost | ||
Due within one year | $ 498,336 | $ 415,915 |
Due after one year through three years | 325,659 | 325,459 |
Marketable securities, Amortized Cost | 823,995 | 741,374 |
Fair Value | ||
Due within one year | 500,622 | 418,169 |
Due after one year through three years | 327,011 | 327,894 |
Marketable securities, Fair Value | $ 827,633 | $ 746,063 |
BUSINESS COMBINATIONS (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Apr. 24, 2020 |
Aug. 22, 2019 |
Sep. 30, 2020 |
|
April 2020 acquisition | |||
Business Acquisition | |||
Total purchase consideration | $ 11.4 | ||
Acquired goodwill | $ 2.2 | ||
August 2019 acquisition | |||
Business Acquisition | |||
Total purchase consideration | $ 94.0 | ||
Additional consideration (up to) | $ 60.0 | ||
Contingent consideration liability, current | $ 6.3 | ||
August 2019 acquisition | Wafer Inspection and Patterning | |||
Business Acquisition | |||
Acquired goodwill | 54.2 | ||
Other Acquisitions | |||
Business Acquisition | |||
Contingent consideration liability, non-current | $ 6.7 |
GOODWILL AND PURCHASED INTANGIBLE ASSETS - Schedule of Goodwill (Details) |
3 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Goodwill | |
Beginning balance | $ 2,045,402,000 |
Foreign currency adjustments | 30,000 |
Ending balance | 2,045,432,000 |
Wafer Inspection and Patterning | |
Goodwill | |
Beginning balance | 416,840,000 |
Foreign currency adjustments | 30,000 |
Ending balance | 416,870,000 |
Global Service and Support (“GSS”) | |
Goodwill | |
Beginning balance | 25,908,000 |
Foreign currency adjustments | 0 |
Ending balance | 25,908,000 |
Specialty Semiconductor Process | |
Goodwill | |
Beginning balance | 681,858,000 |
Foreign currency adjustments | 0 |
Ending balance | 681,858,000 |
PCB and Display | |
Goodwill | |
Beginning balance | 907,221,000 |
Foreign currency adjustments | 0 |
Ending balance | 907,221,000 |
Component Inspection | |
Goodwill | |
Beginning balance | 13,575,000 |
Foreign currency adjustments | 0 |
Ending balance | 13,575,000 |
Others | |
Goodwill | |
Beginning balance | 0 |
Ending balance | $ 0 |
GOODWILL AND PURCHASED INTANGIBLE ASSETS - Additional Information (Details) $ in Millions |
3 Months Ended | |
---|---|---|
Sep. 30, 2020
segment
reporting_unit
|
Mar. 31, 2020
USD ($)
|
|
Goodwill [Line Items] | ||
Number of reportable segments | segment | 4 | |
Number of reporting units | reporting_unit | 6 | |
Specialty Semiconductor Process | ||
Goodwill [Line Items] | ||
Goodwill impairment | $ 144.2 | |
PCB and Display | ||
Goodwill [Line Items] | ||
Goodwill impairment | $ 112.5 |
GOODWILL AND PURCHASED INTANGIBLE ASSETS - Amortization Expense for Purchased Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Purchased Intangible Assets | ||
Amortization of intangible assets | $ 50,500 | $ 57,908 |
Costs of revenues | ||
Purchased Intangible Assets | ||
Amortization of intangible assets | 37,040 | 35,621 |
Selling, general and administrative | ||
Purchased Intangible Assets | ||
Amortization of intangible assets | 13,429 | 22,256 |
Research and development | ||
Purchased Intangible Assets | ||
Amortization of intangible assets | $ 31 | $ 31 |
GOODWILL AND PURCHASED INTANGIBLE ASSETS - Future Estimated Amortization Expense (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Jun. 30, 2020 |
---|---|---|
Remaing Estimated Amortization Expense | ||
2021 (remaining nine months) | $ 147,317 | |
2022 | 195,239 | |
2023 | 194,147 | |
2024 | 191,630 | |
2025 | 179,421 | |
2026 and thereafter | 257,425 | |
Total | $ 1,165,179 | $ 1,215,679 |
DEBT - Future Principal Payments (Details) $ in Millions |
Sep. 30, 2020
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
Due in 2025 | $ 1,250 |
Due in 2026 | $ 2,200 |
DEBT - Senior Notes and Debt Redemption (Details) - USD ($) |
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Dec. 31, 2017 |
Jun. 30, 2020 |
Feb. 29, 2020 |
Mar. 31, 2019 |
Nov. 30, 2014 |
|
Debt Instrument | |||||||||
Repayment of debt | $ 50,000,000 | $ 0 | |||||||
Debt outstanding | $ 3,450,000,000 | $ 3,500,000,000 | |||||||
Senior notes | |||||||||
Debt Instrument | |||||||||
Redemption price | 101.00% | ||||||||
Fair value disclosure | $ 4,050,000,000.00 | $ 4,010,000,000.00 | |||||||
Senior notes | 2020 Senior Notes | |||||||||
Debt Instrument | |||||||||
Debt face amount | $ 750,000,000.0 | ||||||||
Senior notes | 2019 Senior Notes | |||||||||
Debt Instrument | |||||||||
Debt face amount | $ 1,200,000,000 | ||||||||
Senior notes | 2014 Senior Notes | |||||||||
Debt Instrument | |||||||||
Debt face amount | $ 2,500,000,000 | ||||||||
Repayment of debt | $ 500,000,000.0 | $ 250,000,000.0 | $ 250,000,000.0 | ||||||
Debt outstanding | $ 1,500,000,000 |
LEASES - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Jun. 30, 2020 |
|
Operating Leased Assets [Line Items] | |||
Total lease expense | $ 9,600 | $ 8,700 | |
Short-term leases expense | $ 200 | ||
Operating leases, weighted average remaining lease term | 4 years 10 months 24 days | 5 years 1 month 6 days | |
Operating leases, weighted average discount rate | 1.93% | 1.99% | |
Minimum | |||
Operating Leased Assets [Line Items] | |||
Remaining lease terms | 1 year | ||
Maximum | |||
Operating Leased Assets [Line Items] | |||
Remaining lease terms | 16 years |
LEASES - Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Leases [Abstract] | ||
Operating cash outflows from operating leases | $ 9,370 | $ 8,374 |
ROU assets obtained in exchange for new operating lease liabilities | $ 6,844 | $ 2,805 |
LEASES - Maturities of Lease Liabilities (Details) $ in Thousands |
Sep. 30, 2020
USD ($)
|
---|---|
Operating Leases, After Adoption of 842 | |
2021 (remaining nine months) | $ 24,375 |
2022 | 24,693 |
2023 | 16,812 |
2024 | 10,891 |
2025 | 9,065 |
2026 | 18,520 |
Total lease payments | 104,356 |
Less imputed interest | (5,507) |
Total | $ 98,849 |
EQUITY, LONG-TERM INCENTIVE COMPENSATION PLANS AND NON-CONTROLLING INTEREST - Equity Incentive Program (Details) - shares |
Sep. 30, 2020 |
Jun. 30, 2020 |
---|---|---|
Share-based Compensation Arrangement by Share-based Payment Award | ||
Number of shares available for grant (in shares) | 10,287,000 | 10,760,000 |
2004 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Number of shares available for grant (in shares) | 10,300,000 | |
Assumed Equity Plans | Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Number of shares available for grant (in shares) | 217,387 |
EQUITY, LONG-TERM INCENTIVE COMPENSATION PLANS AND NON-CONTROLLING INTEREST - Share-based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Jun. 30, 2020 |
|
Stock-based compensation expense | |||
Stock-based compensation expense | $ 26,992 | $ 26,944 | |
Stock-based compensation capitalized as inventory | 5,685 | $ 6,752 | |
Costs of revenues | |||
Stock-based compensation expense | |||
Stock-based compensation expense | 3,667 | 2,864 | |
Research and development | |||
Stock-based compensation expense | |||
Stock-based compensation expense | 5,471 | 5,287 | |
Selling, general and administrative | |||
Stock-based compensation expense | |||
Stock-based compensation expense | $ 17,854 | $ 18,793 |
EQUITY, LONG-TERM INCENTIVE COMPENSATION PLANS AND NON-CONTROLLING INTEREST - Weighted-Average Grant Date Fair Value (Details) - Restricted stock units - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award | ||
Weighted-average grant date fair value per unit (in dollars per share) | $ 201.95 | $ 136.76 |
Grant date fair value of vested restricted stock units | $ 27,302 | $ 30,092 |
Tax benefits realized by us in connection with vested and released restricted stock units | $ 6,737 | $ 3,993 |
EQUITY, LONG-TERM INCENTIVE COMPENSATION PLANS AND NON-CONTROLLING INTEREST - Cash-Based Long-Term Incentive Compensation (Details) - Cash long-term incentive plan $ in Millions |
3 Months Ended | |
---|---|---|
Sep. 30, 2020
USD ($)
Installment
|
Sep. 30, 2019
USD ($)
|
|
Cash Long-Term Incentive Plan | ||
Cash-based long-term incentive plan, authorized amount | $ 3.5 | $ 1.8 |
Cash long-term incentive plan, compensation expense | 19.4 | $ 16.6 |
Cash long-term incentive plan, unrecognized compensation balance | $ 155.4 | |
Minimum | ||
Cash Long-Term Incentive Plan | ||
Cash long-term incentive plan, equal vesting installments | Installment | 3 | |
Cash long-term incentive plan, vesting period | 3 years | |
Maximum | ||
Cash Long-Term Incentive Plan | ||
Cash long-term incentive plan, equal vesting installments | Installment | 4 | |
Cash long-term incentive plan, vesting period | 4 years |
EQUITY, LONG-TERM INCENTIVE COMPENSATION PLANS AND NON-CONTROLLING INTEREST - Cash Dividends (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Aug. 06, 2020 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Jun. 30, 2020 |
|
Dividends Payable | ||||
Cash dividends declared (in dollars per share) | $ 0.90 | $ 0.90 | $ 0.75 | |
Payment of dividends | $ 141.2 | $ 121.6 | ||
Restricted stock unit, Performance-based and Service-based | ||||
Dividends Payable | ||||
Dividends payable | $ 8.7 | $ 8.3 |
EQUITY, LONG-TERM INCENTIVE COMPENSATION PLANS AND NON-CONTROLLING INTEREST - Non-controlling Interest (Details) |
Sep. 30, 2020 |
---|---|
Orbograph | |
Noncontrolling Interest [Line Items] | |
Non-controlling interest, ownership | 94.00% |
OLTS | |
Noncontrolling Interest [Line Items] | |
Non-controlling interest, ownership | 97.00% |
PixCell | |
Noncontrolling Interest [Line Items] | |
Non-controlling interest, ownership | 52.00% |
STOCK REPURCHASE PROGRAM (Details) - USD ($) shares in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Equity, Class of Treasury Stock | ||
Shares authorized to be repurchased, amount | $ 3,000,000,000.00 | |
Remaining shares authorized to be repurchased, amount | 840,000,000 | |
Total cost of repurchases | $ 193,897,000 | $ 228,496,000 |
Common Stock and Capital in Excess of Par Value, Shares | ||
Equity, Class of Treasury Stock | ||
Number of shares of common stock repurchased (in shares) | 1,027 | 1,659 |
NET INCOME PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Numerator: | ||
Net income attributable to KLA | $ 420,567 | $ 346,525 |
Denominator: | ||
Weighted-average shares-basic, excluding unvested restricted stock units (in shares) | 155,281 | 158,697 |
Effect of dilutive restricted stock units and options (in shares) | 1,161 | 1,434 |
Weighted-average shares-diluted (in shares) | 156,442 | 160,131 |
Basic net income per share attributable to KLA (in dollars per share) | $ 2.71 | $ 2.18 |
Diluted net income per share attributable to KLA (in dollars per share) | $ 2.69 | $ 2.16 |
Anti-dilutive securities excluded from the computation of diluted net income (loss) per share (in shares) | 169 | 0 |
INCOME TAXES - Details of Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Income Tax Disclosure [Abstract] | ||
Income before income taxes | $ 483,806 | $ 371,516 |
Provision for income taxes | $ 63,664 | $ 25,120 |
Effective tax rate | 13.20% | 6.80% |
INCOME TAXES - Additional Information (Details) $ in Thousands, ₪ in Millions |
1 Months Ended | |||
---|---|---|---|---|
Aug. 28, 2019
ILS (₪)
|
Aug. 28, 2019
USD ($)
|
May 31, 2017
ILS (₪)
|
May 31, 2017
USD ($)
|
|
Foreign Tax Authority | ITA | ||||
Income Tax Examination | ||||
Income tax examination, estimate of possible loss | ₪ 257.0 | $ 73,000 | ₪ 229.0 | $ 66,000 |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Gains (Losses) on Derivatives in Cash Flow Hedging Relationships Recognized in OCI (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Derivative | ||
Amounts included in the assessment of effectiveness | $ (918) | $ (742) |
Foreign exchange contracts | ||
Derivative | ||
Amounts included in the assessment of effectiveness | (872) | (740) |
Amounts excluded from the assessment of effectiveness | $ (46) | $ (2) |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Notional Amount (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
|
Derivative | |||
Remaining maturity | 7 months | 7 months | |
Derivatives designated as hedging instruments | Purchase | Other foreign currency hedge contracts | |||
Derivative | |||
Derivative, notional amount | $ 310,356 | $ 329,310 | |
Derivatives designated as hedging instruments | Purchase | Cash flow hedge contracts | |||
Derivative | |||
Derivative, notional amount | 10,393 | 10,705 | |
Derivatives designated as hedging instruments | Sell | Other foreign currency hedge contracts | |||
Derivative | |||
Derivative, notional amount | 331,908 | 357,939 | |
Derivatives designated as hedging instruments | Sell | Cash flow hedge contracts | |||
Derivative | |||
Derivative, notional amount | $ 72,007 | $ 71,431 |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Other Comprehensive Income (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning balance | $ (29,602) | $ (10,791) |
Amount reclassified to earnings | (54) | 1,527 |
Net change in unrealized gains or losses | (918) | (742) |
Ending balance | $ (30,574) | $ (10,006) |
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Jun. 30, 2020 |
|
Related Party Transactions [Abstract] | |||
Total revenues | $ 558 | $ 1,041 | |
Total purchases | 292 | $ 465 | |
Accounts receivables | $ 1,500 | $ 2,400 |
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION - Reconciliation of Total Reportable Segments Revenue to Total Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | $ 1,538,620 | $ 1,413,414 |
Operating segments | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 1,538,225 | 1,413,554 |
Corporate allocations and effects of foreign exchange rates | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | $ 395 | $ (140) |
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION - Reconciliation of Total Segment Gross Margin to Total Income Before Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Acquisition-related charges, corporate allocations and effects of foreign exchange rates | $ 36,862 | $ 48,054 |
Research and development | 219,038 | 210,580 |
Selling, general and administrative | 172,631 | 188,345 |
Interest expense | 39,386 | 40,350 |
Other expense (income), net | 3,197 | (1,618) |
Income before income taxes | 483,806 | 371,516 |
Operating segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Total segment gross margin | $ 954,920 | $ 857,227 |
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION - Land, Property and Equipment, Net by Geographic Region (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Jun. 30, 2020 |
---|---|---|
Revenues from External Customers and Long-Lived Assets | ||
Land, property and equipment, net | $ 561,852 | $ 519,824 |
United States | ||
Revenues from External Customers and Long-Lived Assets | ||
Land, property and equipment, net | 371,987 | 329,558 |
Israel | ||
Revenues from External Customers and Long-Lived Assets | ||
Land, property and equipment, net | 57,830 | 59,162 |
Europe | ||
Revenues from External Customers and Long-Lived Assets | ||
Land, property and equipment, net | 56,594 | 58,065 |
Singapore | ||
Revenues from External Customers and Long-Lived Assets | ||
Land, property and equipment, net | 56,858 | 54,946 |
Rest of Asia | ||
Revenues from External Customers and Long-Lived Assets | ||
Land, property and equipment, net | $ 18,583 | $ 18,093 |
RESTRUCTURING CHARGES (Details) $ in Millions |
3 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Restructuring and Related Activities [Abstract] | |
Restructuring charges | $ 3.5 |
Accelerated depreciation charges | 1.0 |
Restructuring reserve | $ 7.0 |
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