KLA Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Financial Statement Components (Tables)

Financial Statement Components (Tables)

6 Months Ended

Dec. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidated Balance Sheets



(In thousands)	As of December 31, 2018			As of June 30, 2018
Accounts receivable, net:
Accounts receivable, gross	$	669,650		$	663,317
Allowance for doubtful accounts	(11,570		)	(11,639		)
	$	658,080		$	651,678
Inventories:
Customer service parts	$	275,045		$	253,639
Raw materials	340,253			331,065
Work-in-process	305864年			280,208
Finished goods	84,828			66,933
	$	1,005,990		$	931,845
Other current assets:
Contract assets	$	23,316		$	—
Deferred costs of revenue ⁽¹⁾	32,821			—
Prepaid expenses	48,411			47,088
Prepaid income and other taxes	12,181			23,452
Other current assets	10,621			14,619
	$	127,350		$	85,159
Land, property and equipment, net:
Land	$	40,593		$	40,599
Buildings and leasehold improvements	340,722			335,647
Machinery and equipment	602,387			577,077
Office furniture and fixtures	22,569			22,171
建设- - - - - -in-process	16,360			9,180
	1,022,631			984,674
Less: accumulated depreciation	(716,280		)	(698,368		)
	$	306,351		$	286,306
Other non-current assets:
Executive Deferred Savings Plan ⁽²⁾	$	181,103		$	197,213
Other non-current assets	22,897			19,606
	$	204,000		$	216,819
Other current liabilities:
Executive Deferred Savings Plan ⁽²⁾	$	181,976		$	199,505
Compensation and benefits	230,079			177,587
Other accrued expenses	107,644			123,869
Customer credits and advances	144,408			116,440
Warranty	666			42,258
Income taxes payable	33,153			23,287
Interest payable	16,947			16,947
	$	714,873		$	699,893
Other non-current liabilities:
Income taxes payable	$	341,745		$	371,665
Pension liabilities	67,139			66,786
Other non-current liabilities	37,395			32,912
	$	446,279		$	471,363

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(1)	Deferred costs of revenue were previously included under deferred system profit prior to the adoption of ASC 606.

(2)

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 $(19.8) million and $7.0 million during the three months ended December 31, 2018 and 2017 , respectively and was $(12.3) million and $13.8 million during the six months ended December 31, 2018 and 2017 , respectively. The amount of net gains (losses) associated with changes in the EDSP assets included in selling, general and administrative expense was $(19.4) million and $7.0 million during the three months ended December 31, 2018 and 2017 , respectively and was $(12.0) million and $13.9 million the six months ended December 31, 2018 and 2017 , 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, 2018 .

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:



(In thousands)	Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for-Sale Securities			Unrealized Gains (Losses) on Cash Flow Hedges			Unrealized Gains (Losses) on Defined Benefit Plans			Total
Balance as of December 31, 2018	$	(43,041	)	$	(6,736	)	$	(4,402	)	$	(16,268	)	$	(70447	)

Balance as of June 30, 2018	$	(29,974	)	$	(11,032	)	$	1,932		$	(14,859	)	$	(53,933	)

Reclassification out of Accumulated Other Comprehensive Income

The effects on net income (loss) of amounts reclassified from accumulated OCI to the Condensed Consolidated Statement of Operations for the indicated period were as follows (in thousands):



	Location in the Condensed Consolidated	Three months ended December 31,						Six months ended December 31,
Accumulated OCI Components	Statements of Operations	2018			2017			2018			2017
Unrealized gains (losses) on cash flow hedges from foreign exchange and interest rate contracts ⁽¹⁾	Revenues	$	1,705		$	397		$	2,688		$	1,365
	Costs of revenues	(158		)	377			(292		)	1,338
	Interest expense	189			189			377			378
	Net gains (losses) reclassified from accumulated OCI	$	1,736		$	963		$	2,773		$	3,081
Unrealized gains (losses) on available-for-sale securities	Other expense (income), net	$	(469	)	$	(69	)	$	(950	)	$	(63	)

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(1)	Reflects the adoption of the new accounting guidance for hedge accounting in the second quarter of fiscal year 2019. For additional details, refer to Note 15, “Derivative Instruments and Hedging Activities.”