PART II Item 8. |
Financial Statements and Supplementary Data |
|
|
Consolidated Statements Of Operations
| |
|
|
|
|
|
|
| |
Years Ended |
|
| |
April 3,
2004 |
|
March 29,
2003 |
|
March 30,
2002 |
|
| |
(In thousands, except per share amounts) |
|
| Net revenues |
$1,397,846 |
|
$1,155,977 |
|
$1,015,579 |
|
| Costs and expenses: |
|
|
|
|
|
|
| Cost of revenues |
529,968 |
|
473,551 |
|
557,884 |
|
| Research and development |
247,609 |
|
222,139 |
|
204,752 |
|
| Selling, general and administrative |
266,664 |
|
235,347 |
|
228,759 |
|
| Amortization of goodwill (through fiscal 2002) and other intangibles |
9,725 |
|
14,580 |
|
42,998 |
|
| Impairment loss on excess facilities, intangible assets and equipment |
3,376 |
|
54,691 |
|
25,336 |
|
| Litigation settlement and contingency |
6,400 |
|
— |
|
— |
|
| Write-off of acquired in-process research and development |
6,969 |
|
— |
|
— |
|
| Altera Corporation lawsuit settlement received |
— |
|
— |
|
(19,400 |
) |
| Total costs and expenses |
1,070,711 |
|
1,000,308 |
|
1,040,329 |
|
| Operating income (loss) |
327,135 |
|
155,669 |
|
(24,750 |
) |
| Impairment loss on investments |
— |
|
(10,425 |
) |
(2,825 |
) |
| Impairment loss on United Microelectronics Corp. investment |
— |
|
— |
|
(191,852 |
) |
| Interest income and other, net |
23,409 |
|
24,628 |
|
26,473 |
|
| Income (loss) before income taxes |
350,544 |
|
169,872 |
|
(192,954 |
) |
| Provision (benefit) for income taxes |
47,555 |
|
44,167 |
|
(79,347 |
) |
| Net income (loss) |
$ 302,989 |
|
$125,705 |
|
$(113,607 |
) |
| Net income (loss) per share: |
|
|
|
|
|
|
| Basic |
$0.89 |
|
$0.37 |
|
$(0.34 |
) |
| Diluted |
$0.85 |
|
$0.36 |
|
$(0.34 |
) |
| Shares used in per share calculations: |
|
|
|
|
|
|
| Basic |
341,427 |
|
337,069 |
|
333,556 |
|
| Diluted |
354,551 |
|
348,622 |
|
333,556 |
|
Consolidated Balance Sheets
| |
April 3,
2004 |
|
March 29,
2003 |
|
| |
(In thousands, except par
value amounts) |
|
| ASSETS |
|
|
|
|
| Current assets: |
|
|
|
|
| Cash and cash equivalents |
$337,343 |
|
$213,995 |
|
| Short-term investments |
461,617 |
|
461,600 |
|
Accounts receivable, net of allowances for doubtful accounts and customer
returns of $3,989 and $3,618 in 2004 and 2003, respectively |
248,956 |
|
197,690 |
|
| Inventories |
102,454 |
|
111,504 |
|
| Deferred tax assets |
90,386 |
|
150,147 |
|
| Prepaid expenses and other current assets |
60,796 |
|
40,346 |
|
| Total current assets |
1,301,552 |
|
1,175,282 |
|
| Property, plant and equipment, at cost: |
|
|
|
|
| Land |
61,445 |
|
72,974 |
|
| Buildings |
226,833 |
|
247,452 |
|
| Machinery and equipment |
254,854 |
|
254,616 |
|
| Furniture and fixtures |
38,603 |
|
37,108 |
|
| |
581,735 |
|
612,150 |
|
| Accumulated depreciation and amortization |
(246,621 |
) |
(229,167 |
) |
| Net property, plant and equipment |
335,114 |
|
382,983 |
|
| Long-term investments |
767,671 |
|
434,369 |
|
| Investment in United Microelectronics Corp. |
324,026 |
|
209,293 |
|
| Goodwill |
111,627 |
|
100,724 |
|
Other intangible assets, less accumulated amortization of $69,583 and $59,752 in
2004 and 2003, respectively |
16,813 |
|
18,690 |
|
| Other assets |
80,670 |
|
100,335 |
|
| Total Assets |
$2,937,473 |
|
$2,421,676 |
|
| |
|
|
|
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
| Current liabilities: |
|
|
|
|
| Accounts payable |
$77,936 |
|
$41,739 |
|
| Accrued payroll and related liabilities |
54,607 |
|
48,736 |
|
| Income taxes payable |
60,430 |
|
85,198 |
|
| Deferred income on shipments to distributors |
150,979 |
|
120,831 |
|
| Other accrued liabilities |
37,178 |
|
17,330 |
|
| Total current liabilities |
381,130 |
|
313,834 |
|
| Deferred tax liabilities |
73,281 |
|
157,103 |
|
| Commitments and contingencies |
|
|
|
|
| |
|
|
|
|
| Stockholders' equity: |
|
|
|
|
| Preferred stock, $.01 par value; 2,000 shares authorized; none issued and outstanding |
— |
|
— |
|
Common stock, $.01 par value; 2,000,000 shares authorized; 346,989 shares
issued and 346,962 shares outstanding at April 3, 2004; 339,026 shares issued
and 339,005 shares outstanding at March 29, 2003 |
3,470 |
|
3,390 |
|
| Additional paid-in capital |
903,991 |
|
744,166 |
|
| Retained earnings |
1,521,568 |
|
1,218,579 |
|
| Treasury stock, at cost (27 shares at April 3, 2004 and 21 shares at March 29,2003) |
(1,031 |
) |
(541 |
) |
| Accumulated other comprehensive income (loss) |
55,064 |
|
(14,855 |
) |
| Total stockholders' equity |
2,483,062 |
|
1,950,739 |
|
| Total Liabilities and Stockholders' Equity |
$2,937,473 |
|
$2,421,676 |
|
Consolidated Statement of Cash Flows
| |
Years Ended |
| |
April 3,
2004 |
|
March 29,
2003 |
|
March 30,
2002 |
|
| |
(In thousands) |
| Cash flows from operating activities: |
|
| Net income (loss) |
$ 302,989 |
|
$ 125,705 |
|
$(113,607 |
) |
Adjustments to reconcile net income (loss) to net cash provided
by operating activities: |
|
|
|
|
|
|
| Depreciation and amortization |
67,923 |
|
72,450 |
|
106,097 |
|
| Amortization of deferred compensation |
3,767 |
|
6,390 |
|
10,981 |
|
| Write-off of acquired in-process research and development |
6,969 |
|
— |
|
— |
|
| Net gain on sale of available-for-sale securities |
(6,650 |
) |
(5,454 |
) |
(9,572 |
) |
| Impairment loss on excess facilities |
3,376 |
|
53,836 |
|
— |
|
| Impairment loss on intangible assets |
— |
|
— |
|
14,925 |
|
| Impairment loss on equipment |
— |
|
855 |
|
10,411 |
|
| Impairment loss on investments |
— |
|
10,425 |
|
4,322 |
|
| Litigation settlement and contingency |
6,400 |
|
— |
|
— |
|
| Gain on sale of building |
— |
|
(508 |
) |
— |
|
| Impairment loss on United Microelectronics Corp. investment |
— |
|
— |
|
191,852 |
|
| Provision (benefit) for deferred income taxes |
49,275 |
|
(24,423 |
) |
(1,403 |
) |
| Tax benefit from exercise of stock options |
109,236 |
|
17,093 |
|
52,401 |
|
| Changes in assets and liabilities: |
|
|
|
|
|
|
| Accounts receivable, net |
(50,160 |
) |
(49,259 |
) |
24,336 |
|
| Inventories |
9,614 |
|
(14,858 |
) |
245,943 |
|
| Deferred income taxes |
(60,366 |
) |
20,338 |
|
10,906 |
|
| Prepaid expenses and other current assets |
(10,035 |
) |
45,384 |
|
(39,550 |
) |
| Other assets |
6,234 |
|
(4,447 |
) |
(20,076 |
) |
| Accounts payable |
35,867 |
|
5,008 |
|
(67,943 |
) |
| Accrued liabilities |
11,872 |
|
15,084 |
|
(1,031 |
) |
| Income taxes payable |
(83,709 |
) |
20,331 |
|
(77,378 |
) |
| Deferred income on shipments to distributors |
29,898 |
|
51,050 |
|
(60,720 |
) |
| Total adjustments |
129,511 |
|
219,295 |
|
394,501 |
|
| Net cash provided by operating activities |
432,500 |
|
345,000 |
|
280,894 |
|
| |
|
|
|
|
|
|
| Cash flows from investing activities: |
|
|
|
|
|
|
| Purchases of available-for-sale securities |
(2,181,741 |
) |
(1,544,365 |
) |
(1,085,053 |
) |
| Proceeds from sale or maturity of available-for-sale securities |
1,855,933 |
|
1,228,813 |
|
962,207 |
|
| Purchases of property, plant and equipment |
(41,040 |
) |
(46,049 |
) |
(94,883 |
) |
| Proceeds from sale of buildings and land |
32,047 |
|
6,463 |
|
— |
|
| Acquisition of business, net of cash acquired |
(19,997 |
) |
— |
|
— |
|
| Net cash used in investing activities |
(354,798 |
) |
(355,138 |
) |
(217,729 |
) |
| |
|
|
|
|
|
|
| Cash flows from financing activities: |
|
|
|
|
|
|
| Acquisition of treasury stock |
(62,328 |
) |
(60,846 |
) |
(125,580 |
) |
| Proceeds from issuance of common stock |
107,974 |
|
54,643 |
|
81,088 |
|
| Proceeds from sale of put options |
— |
|
— |
|
2,970 |
|
| Net cash provided by (used in) financing activities |
45,646 |
|
(6,203 |
) |
(41,522 |
) |
| Net increase (decrease) in cash and cash equivalents |
123,348 |
|
(16,341 |
) |
21,643 |
|
| Cash and cash equivalents at beginning of year |
213,995 |
|
230,336 |
|
208,693 |
|
| Cash and cash equivalents at end of year |
$ 337,343 |
|
$ 213,995 |
|
$ 230,336 |
|
| Supplemental schedule of non-cash activities: |
|
|
|
|
|
|
| Issuance of treasury stock under employee stock plans |
$62,284 |
|
$68,059 |
|
$ 188,575 |
|
| Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
| Income taxes paid (refunds received) |
$34,163 |
|
$(62,984 |
) |
$13,865 |
|
Consolidated Statement of Stockholders' Equity
| |
|
| |
Common Stock Outstanding |
|
Additional
Paid-in
Capital |
|
Retained
Earnings |
|
Treasury
Stock |
|
Accumulated
Other
Comprehensive
Income (Loss) |
|
Total
Stockholders'
Equity |
|
| Shares |
|
Amount |
| |
(In thousands) |
|
| Balance at March 31, 2001 |
331,140 |
|
$3,311 |
|
$725,626 |
|
$1,257,083 |
|
$(70,584 |
) |
$ 2,880 |
|
$1,918,316 |
|
| Components of comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
— |
|
— |
|
— |
|
(113,607 |
) |
— |
|
— |
|
(113,607 |
) |
Net unrealized gain on available-for-sale
securities, net of taxes of $57,458 |
— |
|
— |
|
— |
|
— |
|
— |
|
79,180 |
|
79,180 |
|
| Cumulative translation adjustment |
— |
|
— |
|
— |
|
— |
|
— |
|
(512 |
) |
(512 |
) |
| Total comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
(34,939 |
) |
Issuance of common shares
under employee stock plans |
7,022 |
|
70 |
|
80,148 |
|
— |
|
— |
|
— |
|
80,218 |
|
| Acquisition of treasury stock |
(2,161 |
) |
(22 |
) |
— |
|
— |
|
(126,188 |
) |
— |
|
(126,210 |
) |
| Issuance of shares for RocketChips |
187 |
|
2 |
|
— |
|
— |
|
— |
|
— |
|
2 |
|
| Put option premiums |
— |
|
— |
|
2,970 |
|
— |
|
— |
|
— |
|
2,970 |
|
| Deferred compensation—RocketChips |
— |
|
— |
|
8,483 |
|
— |
|
— |
|
— |
|
8,483 |
|
| Deferred compensation—other |
— |
|
— |
|
2,499 |
|
— |
|
— |
|
— |
|
2,499 |
|
| Tax benefit from exercise of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| stock options |
— |
|
— |
|
52,401 |
|
— |
|
— |
|
— |
|
52,401 |
|
| Balance at March 30, 2002 |
336,188 |
|
3,361 |
|
719,747 |
|
1,107,281 |
|
(8,197 |
) |
81,548 |
|
1,903,740 |
|
| Components of comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
— |
|
— |
|
— |
|
125,705 |
|
— |
|
— |
|
125,705 |
|
Net unrealized loss on available-for-sale
securities, net of tax benefit of $67,850 |
— |
|
— |
|
— |
|
— |
|
— |
|
(97,638 |
) |
(97,638 |
) |
| Cumulative translation adjustment |
— |
|
— |
|
— |
|
— |
|
— |
|
1,235 |
|
1,235 |
|
| Total comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
29,302 |
|
Issuance of common shares
under employee stock plan |
5,206 |
|
52 |
|
54,588 |
|
— |
|
— |
|
— |
|
54,640 |
|
| Acquisition of treasury stock |
(2,389 |
) |
(23 |
) |
— |
|
— |
|
(60,403 |
) |
— |
|
(60,426 |
) |
| Issuance of treasury stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| under employee stock plans |
— |
|
— |
|
(53,652 |
) |
(14,407 |
) |
68,059 |
|
— |
|
— |
|
| Deferred compensation—RocketChips |
— |
|
— |
|
6,390 |
|
— |
|
— |
|
— |
|
6,390 |
|
| Tax benefit from exercise of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| stock options |
— |
|
— |
|
17,093 |
|
— |
|
— |
|
— |
|
17,093 |
|
| Balance at March 29, 2003 |
339,005 |
|
3,390 |
|
744,166 |
|
1,218,579 |
|
(541 |
) |
(14,855 |
) |
1,950,739 |
|
| Components of comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
— |
|
— |
|
— |
|
302,989 |
|
— |
|
— |
|
302,989 |
|
Net unrealized gain on available-for-sale
securities,net of taxes of $47,485 |
— |
|
— |
|
— |
|
— |
|
— |
|
68,359 |
|
68,359 |
|
| Cumulative translation adjustment |
— |
|
— |
|
— |
|
— |
|
— |
|
1,560 |
|
1,560 |
|
| Total comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
372,908 |
|
| Issuance of common shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| under employee stock plans |
9,889 |
|
99 |
|
109,106 |
|
— |
|
— |
|
— |
|
109,205 |
|
| Acquisition of treasury stock |
(1,932 |
) |
(19 |
) |
— |
|
— |
|
(62,774 |
) |
— |
|
(62,793 |
) |
Issuance of treasury stock under
employee stock plans |
— |
|
— |
|
(62,284 |
) |
— |
|
62,284 |
|
— |
|
— |
|
| Deferred compensation—RocketChips |
— |
|
— |
|
3,767 |
|
— |
|
— |
|
— |
|
3,767 |
|
| Tax benefit from exercise of stock options |
— |
|
— |
|
109,236 |
|
— |
|
— |
|
— |
|
109,236 |
|
| Balance at April 3, 2004 |
346,962 |
|
$3,470 |
|
$903,991 |
|
$1,521,568 |
|
$ (1,031 |
) |
$55,064 |
|
$2,483,062 |
|
See notes to consolidated financial statements |