2017 Q4 Form 10-K Financial Statement

#000079634319000019 Filed on January 25, 2019

View on sec.gov

Income Statement

Concept 2017 Q4 2017 Q3 2017 Q2
Revenue $2.007B $1.841B $1.772B
YoY Change 24.76% 25.76% 26.7%
Cost Of Revenue $270.9M $262.9M $239.4M
YoY Change 25.07% 29.71% 18.45%
Gross Profit $1.736B $1.578B $1.533B
YoY Change 24.71% 25.12% 28.1%
Gross Profit Margin 86.5% 85.72% 86.49%
Selling, General & Admin $743.7M $697.5M $710.0M
YoY Change 15.57% 12.35% 18.16%
% of Gross Profit 42.85% 44.2% 46.32%
Research & Development $324.0M $315.6M $299.4M
YoY Change 25.68% 27.01% 28.78%
% of Gross Profit 18.67% 20.0% 19.53%
Depreciation & Amortization $81.20M $82.40M $81.60M
YoY Change -0.73% -1.9% -3.43%
% of Gross Profit 4.68% 5.22% 5.32%
Operating Expenses $1.086B $1.032B $1.029B
YoY Change 18.11% 15.76% 20.69%
Operating Profit $649.3M $545.7M $504.1M
YoY Change 37.55% 47.75% 46.43%
Interest Expense -$14.60M $18.81M $18.35M
YoY Change -6.41% 8.84% 6.83%
% of Operating Profit -2.25% 3.45% 3.64%
Other Income/Expense, Net $8.300M -$4.295M -$11.46M
YoY Change -67.02% -20.44%
Pretax Income $643.0M $541.4M $492.6M
YoY Change 40.8% 51.94% 49.36%
Income Tax $141.5M $121.8M $118.2M
% Of Pretax Income 22.01% 22.5% 24.0%
Net Earnings $501.5M $419.6M $374.4M
YoY Change 25.51% 54.94% 53.39%
Net Earnings / Revenue 25.0% 22.79% 21.13%
Basic Earnings Per Share $1.02 $0.85 $0.76
Diluted Earnings Per Share $1.00 $0.84 $0.75
COMMON SHARES
Basic Shares Outstanding 493.4M shares 494.4M shares
Diluted Shares Outstanding 500.4M shares 500.4M shares

Balance Sheet

Concept 2017 Q4 2017 Q3 2017 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $5.820B $5.368B $4.932B
YoY Change 22.24% 20.74% 14.22%
Cash & Equivalents $2.306B $1.775B $1.317B
Short-Term Investments $3.514B $3.594B $3.615B
Other Short-Term Assets $210.0M $207.0M $220.0M
YoY Change -14.29% -14.11% -13.04%
Inventory
Prepaid Expenses
Receivables $1.218B $1.006B $901.5M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $7.248B $6.581B $6.052B
YoY Change 24.11% 21.45% 15.53%
LONG-TERM ASSETS
Property, Plant & Equipment $937.0M $939.8M $924.1M
YoY Change 14.79% 15.81% 16.08%
Goodwill $5.822B $5.821B $5.789B
YoY Change 7.68% 7.13% 6.32%
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $143.5M $144.6M $146.1M
YoY Change 2.61% -14.6% -10.37%
Total Long-Term Assets $7.288B $7.326B $7.313B
YoY Change 6.27% 5.43% 4.79%
TOTAL ASSETS
Total Short-Term Assets $7.248B $6.581B $6.052B
Total Long-Term Assets $7.288B $7.326B $7.313B
Total Assets $14.54B $13.91B $13.36B
YoY Change 14.48% 12.45% 9.4%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $113.5M $90.33M $77.91M
YoY Change 28.99% 8.25% 3.07%
Accrued Expenses $993.8M $932.3M $865.4M
YoY Change 34.36% 39.93% 30.92%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $3.527B $3.216B $3.048B
YoY Change 25.46% 28.35% 27.76%
LONG-TERM LIABILITIES
Long-Term Debt $1.881B $1.889B $1.888B
YoY Change -0.58% -1.46% -1.56%
Other Long-Term Liabilities $125.2M $113.6M $112.3M
YoY Change 28.52% 13.69% 15.83%
Total Long-Term Liabilities $125.2M $113.6M $112.3M
YoY Change 28.52% 13.69% 15.83%
TOTAL LIABILITIES
Total Short-Term Liabilities $3.527B $3.216B $3.048B
Total Long-Term Liabilities $125.2M $113.6M $112.3M
Total Liabilities $6.076B $5.736B $5.561B
YoY Change 15.24% 12.71% 11.93%
SHAREHOLDERS EQUITY
Retained Earnings $9.574B $9.072B $8.653B
YoY Change 17.98% 17.59% 16.24%
Common Stock $61.00K $61.00K $61.00K
YoY Change 0.0% 0.0% 0.0%
Preferred Stock
YoY Change
Treasury Stock (at cost) $6.084B $5.792B $5.539B
YoY Change 18.55% 23.34%
Treasury Stock Shares 109.6M shares
Shareholders Equity $8.459B $8.170B $7.804B
YoY Change
Total Liabilities & Shareholders Equity $14.54B $13.91B $13.36B
YoY Change 14.48% 12.45% 9.4%

Cashflow Statement

Concept 2017 Q4 2017 Q3 2017 Q2
OPERATING ACTIVITIES
Net Income $501.5M $419.6M $374.4M
YoY Change 25.51% 54.94% 53.39%
Depreciation, Depletion And Amortization $81.20M $82.40M $81.60M
YoY Change -0.73% -1.9% -3.43%
Cash From Operating Activities $833.3M $704.4M $644.8M
YoY Change 19.8% 36.01% 31.94%
INVESTING ACTIVITIES
Capital Expenditures -$37.70M -$54.20M -$55.30M
YoY Change -22.43% -1.81% 2.79%
Acquisitions
YoY Change
Other Investing Activities $58.00M $17.40M -$32.20M
YoY Change -161.44% -106.92% -83.72%
Cash From Investing Activities $20.30M -$36.80M -$87.50M
YoY Change -114.19% -88.0% -65.21%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -319.5M -218.3M -314.4M
YoY Change 6.32% -32.81% 73.8%
NET CHANGE
Cash From Operating Activities 833.3M 704.4M 644.8M
Cash From Investing Activities 20.30M -36.80M -87.50M
Cash From Financing Activities -319.5M -218.3M -314.4M
Net Change In Cash 534.1M 449.3M 242.9M
YoY Change 111.94% -495.51% 331.44%
FREE CASH FLOW
Cash From Operating Activities $833.3M $704.4M $644.8M
Capital Expenditures -$37.70M -$54.20M -$55.30M
Free Cash Flow $871.0M $758.6M $700.1M
YoY Change 17.04% 32.37% 29.05%

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1435138000 USD
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2137641000 USD
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2793876000 USD
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IncomeLossFromContinuingOperationsBeforeIncomeTaxesForeign
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CY2017 us-gaap Income Loss From Continuing Operations Before Income Taxes Foreign
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CY2017 us-gaap Income Tax Reconciliation State And Local Income Taxes
IncomeTaxReconciliationStateAndLocalIncomeTaxes
25131000 USD
CY2018 us-gaap Income Tax Reconciliation State And Local Income Taxes
IncomeTaxReconciliationStateAndLocalIncomeTaxes
25214000 USD
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17795000 USD
CY2016 us-gaap Income Tax Reconciliation State And Local Income Taxes
IncomeTaxReconciliationStateAndLocalIncomeTaxes
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1435138000 USD
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460632000 USD
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492618000 USD
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541379000 USD
CY2017Q4 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
643012000 USD
CY2017 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
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2137641000 USD
CY2018Q1 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
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702502000 USD
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IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
699217000 USD
CY2018 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
2793876000 USD
CY2016 us-gaap Income Tax Effects Allocated Directly To Equity Employee Stock Options
IncomeTaxEffectsAllocatedDirectlyToEquityEmployeeStockOptions
75103000 USD
CY2017 us-gaap Income Tax Effects Allocated Directly To Equity Employee Stock Options
IncomeTaxEffectsAllocatedDirectlyToEquityEmployeeStockOptions
0 USD
CY2018 us-gaap Income Tax Effects Allocated Directly To Equity Employee Stock Options
IncomeTaxEffectsAllocatedDirectlyToEquityEmployeeStockOptions
0 USD
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IncomeTaxExpenseBenefit
266356000 USD
CY2017 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
443687000 USD
CY2018 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
203102000 USD
CY2016 us-gaap Income Tax Reconciliation Change In Enacted Tax Rate
IncomeTaxReconciliationChangeInEnactedTaxRate
0 USD
CY2017 us-gaap Income Tax Reconciliation Change In Enacted Tax Rate
IncomeTaxReconciliationChangeInEnactedTaxRate
0 USD
CY2018 us-gaap Income Tax Reconciliation Change In Enacted Tax Rate
IncomeTaxReconciliationChangeInEnactedTaxRate
185997000 USD
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IncomeTaxReconciliationDeductionsQualifiedProductionActivities
26990000 USD
CY2017 us-gaap Income Tax Reconciliation Deductions Qualified Production Activities
IncomeTaxReconciliationDeductionsQualifiedProductionActivities
32200000 USD
CY2018 us-gaap Income Tax Reconciliation Deductions Qualified Production Activities
IncomeTaxReconciliationDeductionsQualifiedProductionActivities
13098000 USD
CY2016 us-gaap Income Tax Reconciliation Foreign Income Tax Rate Differential
IncomeTaxReconciliationForeignIncomeTaxRateDifferential
-133778000 USD
CY2017 us-gaap Income Tax Reconciliation Foreign Income Tax Rate Differential
IncomeTaxReconciliationForeignIncomeTaxRateDifferential
-215490000 USD
CY2018 us-gaap Income Tax Reconciliation Foreign Income Tax Rate Differential
IncomeTaxReconciliationForeignIncomeTaxRateDifferential
-384393000 USD
CY2016 us-gaap Income Tax Reconciliation Income Tax Expense Benefit At Federal Statutory Income Tax Rate
IncomeTaxReconciliationIncomeTaxExpenseBenefitAtFederalStatutoryIncomeTaxRate
502298000 USD
CY2017 us-gaap Income Tax Reconciliation Income Tax Expense Benefit At Federal Statutory Income Tax Rate
IncomeTaxReconciliationIncomeTaxExpenseBenefitAtFederalStatutoryIncomeTaxRate
748174000 USD
CY2018 us-gaap Income Tax Reconciliation Income Tax Expense Benefit At Federal Statutory Income Tax Rate
IncomeTaxReconciliationIncomeTaxExpenseBenefitAtFederalStatutoryIncomeTaxRate
620240000 USD
CY2016 us-gaap Income Tax Reconciliation Nondeductible Expense Share Based Compensation Cost
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15101000 USD
CY2017 us-gaap Income Tax Reconciliation Nondeductible Expense Share Based Compensation Cost
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-42512000 USD
CY2018 us-gaap Income Tax Reconciliation Nondeductible Expense Share Based Compensation Cost
IncomeTaxReconciliationNondeductibleExpenseShareBasedCompensationCost
-95372000 USD
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10129000 USD
CY2017 us-gaap Income Tax Reconciliation Other Adjustments
IncomeTaxReconciliationOtherAdjustments
5171000 USD
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48383000 USD
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38000000 USD
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110849000 USD
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IncomeTaxReconciliationTaxSettlementsDomestic
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IncomeTaxReconciliationTaxSettlementsDomestic
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CY2018 us-gaap Income Tax Reconciliation Tax Settlements Domestic
IncomeTaxReconciliationTaxSettlementsDomestic
-42432000 USD
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249884000 USD
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396668000 USD
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210369000 USD
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-45186000 USD
CY2018 us-gaap Increase Decrease In Accounts Payable
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54920000 USD
CY2016 us-gaap Increase Decrease In Accrued Income Taxes Payable
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43115000 USD
CY2017 us-gaap Increase Decrease In Accrued Income Taxes Payable
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CY2018 us-gaap Increase Decrease In Accrued Income Taxes Payable
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151104000 USD
CY2018 us-gaap Increase Decrease In Accrued Liabilities
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524840000 USD
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IncreaseDecreaseInDeferredRevenue
475402000 USD
CY2018 us-gaap Increase Decrease In Deferred Revenue
IncreaseDecreaseInDeferredRevenue
444693000 USD
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71021000 USD
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-28040000 USD
CY2018 us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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IncreaseDecreaseInReceivables
160416000 USD
CY2017 us-gaap Increase Decrease In Receivables
IncreaseDecreaseInReceivables
187173000 USD
CY2018 us-gaap Increase Decrease In Receivables
IncreaseDecreaseInReceivables
1983000 USD
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IncrementalCommonSharesAttributableToShareBasedPaymentArrangements
499000 shares
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IncrementalCommonSharesAttributableToShareBasedPaymentArrangements
330000 shares
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IncrementalCommonSharesAttributableToShareBasedPaymentArrangements
137000 shares
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InterestExpense
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CY2017 us-gaap Interest Expense
InterestExpense
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InterestExpense
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14535556000 USD
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18768682000 USD
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0 USD
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186522000 USD
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OperatingIncomeLoss
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CY2017 us-gaap Net Income Loss
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CY2017 us-gaap Other Comprehensive Income Loss Available For Sale Securities Tax
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172000 USD
CY2018 us-gaap Other Comprehensive Income Loss Available For Sale Securities Tax
OtherComprehensiveIncomeLossAvailableForSaleSecuritiesTax
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25099000 USD
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CY2018 us-gaap Other Comprehensive Income Loss Derivatives Qualifying As Hedges Tax
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CY2018 us-gaap Other Comprehensive Income Loss Foreign Currency Transaction And Translation Reclassification Adjustment From Aoci Realized Upon Sale Or Liquidation Net Of Tax
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0 USD
CY2016 us-gaap Other Comprehensive Income Loss Foreign Currency Translation Adjustment Tax
OtherComprehensiveIncomeLossForeignCurrencyTranslationAdjustmentTax
24000 USD
CY2017 us-gaap Other Comprehensive Income Loss Foreign Currency Translation Adjustment Tax
OtherComprehensiveIncomeLossForeignCurrencyTranslationAdjustmentTax
3005000 USD
CY2018 us-gaap Other Comprehensive Income Loss Foreign Currency Translation Adjustment Tax
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1895000 USD
CY2017 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci For Sale Of Securities Net Of Tax
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947000 USD
CY2018 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci For Sale Of Securities Net Of Tax
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CY2016 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci For Sale Of Securities Tax
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-108000 USD
CY2017 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci For Sale Of Securities Tax
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491000 USD
CY2018 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci For Sale Of Securities Tax
OtherComprehensiveIncomeLossReclassificationAdjustmentFromAOCIForSaleOfSecuritiesTax
0 USD
CY2016 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci On Derivatives Net Of Tax
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16425000 USD
CY2017 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci On Derivatives Net Of Tax
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31973000 USD
CY2018 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci On Derivatives Net Of Tax
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48981000 USD
CY2016 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci On Derivatives Tax
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552000 USD
CY2017 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci On Derivatives Tax
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732000 USD
CY2018 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci On Derivatives Tax
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1946000 USD
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OtherComprehensiveIncomeLossTax
2445000 USD
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OtherComprehensiveIncomeLossTax
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35199000 USD
CY2017 us-gaap Other Comprehensive Income Unrealized Gain Loss On Derivatives Arising During Period Net Of Tax
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6917000 USD
CY2018 us-gaap Other Comprehensive Income Unrealized Gain Loss On Derivatives Arising During Period Net Of Tax
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74080000 USD
CY2016 us-gaap Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Net Of Tax
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-1618000 USD
CY2017 us-gaap Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Net Of Tax
OtherComprehensiveIncomeUnrealizedHoldingGainLossOnSecuritiesArisingDuringPeriodNetOfTax
-2503000 USD
CY2018 us-gaap Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Net Of Tax
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-24464000 USD
CY2016 us-gaap Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Tax
OtherComprehensiveIncomeUnrealizedHoldingGainLossOnSecuritiesArisingDuringPeriodTax
-299000 USD
CY2017 us-gaap Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Tax
OtherComprehensiveIncomeUnrealizedHoldingGainLossOnSecuritiesArisingDuringPeriodTax
663000 USD
CY2018 us-gaap Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Tax
OtherComprehensiveIncomeUnrealizedHoldingGainLossOnSecuritiesArisingDuringPeriodTax
0 USD
CY2017 us-gaap Payments For Repurchase Of Common Stock
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1100000000 USD
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157600000 USD
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OtherDepreciationAndAmortization
156900000 USD
CY2018 us-gaap Other Depreciation And Amortization
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157100000 USD
CY2017Q4 us-gaap Other Liabilities Noncurrent
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125188000 USD
CY2018Q4 us-gaap Other Liabilities Noncurrent
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152209000 USD
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-2022000 USD
CY2017 us-gaap Other Noncash Income Expense
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-4625000 USD
CY2018 us-gaap Other Noncash Income Expense
OtherNoncashIncomeExpense
-7193000 USD
CY2016 us-gaap Other Nonoperating Income
OtherNonoperatingIncome
13548000 USD
CY2017 us-gaap Other Nonoperating Income
OtherNonoperatingIncome
36395000 USD
CY2018 us-gaap Other Nonoperating Income
OtherNonoperatingIncome
39536000 USD
CY2016 us-gaap Payments For Repurchase Of Common Stock
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1075000000 USD
CY2016 us-gaap Payments For Repurchase Of Common Stock
PaymentsForRepurchaseOfCommonStock
1075000000 USD
CY2017 us-gaap Payments For Repurchase Of Common Stock
PaymentsForRepurchaseOfCommonStock
1100000000 USD
CY2018 us-gaap Payments For Repurchase Of Common Stock
PaymentsForRepurchaseOfCommonStock
2050000000 USD
CY2018 us-gaap Payments For Repurchase Of Common Stock
PaymentsForRepurchaseOfCommonStock
2050000000 USD
CY2016 us-gaap Payments To Acquire Businesses Net Of Cash Acquired
PaymentsToAcquireBusinessesNetOfCashAcquired
48427000 USD
CY2017 us-gaap Payments To Acquire Businesses Net Of Cash Acquired
PaymentsToAcquireBusinessesNetOfCashAcquired
459626000 USD
CY2018 us-gaap Payments To Acquire Businesses Net Of Cash Acquired
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CY2018 us-gaap Concentration Risk Credit Risk
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:12px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Concentration of Risk</font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Financial instruments that potentially subject us to concentrations of credit risk are short-term fixed-income investments, structured repurchase transactions, foreign currency and interest rate hedge contracts and trade receivables.</font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Our investment portfolio consists of investment-grade securities diversified among security types, industries and issuers. Our cash and investments are held and primarily managed by recognized financial institutions that follow our investment policy. Our policy limits the amount of credit exposure to any one security issue or issuer and we believe no significant concentration of credit risk exists with respect to these investments.</font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">We enter into foreign currency hedge contracts with bank counterparties that could expose us to credit related losses in the event of their nonperformance. This is largely mitigated with collateral security agreements that provide for collateral to be received or posted when the net fair value of certain financial instruments fluctuates from contractually established thresholds. In addition, we enter into master netting arrangements which have the ability to further limit credit related losses with the same counterparty by permitting net settlement transactions. </font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The aggregate fair value of foreign currency contracts in net asset positions as of </font><font style="font-family:inherit;font-size:10pt;">November&#160;30, 2018</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">December&#160;1, 2017</font><font style="font-family:inherit;font-size:10pt;"> was </font><font style="font-family:inherit;font-size:10pt;">$44.3 million</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">$14.2 million</font><font style="font-family:inherit;font-size:10pt;"> respectively. These amounts represent the maximum exposure to loss at the reporting date as a result of all of the counterparties failing to perform as contracted. These exposures could be reduced by certain immaterial liabilities included in master netting arrangements with those same counterparties.&#160;</font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Credit risk in receivables is limited to OEMs, dealers and distributors of hardware and software products to the retail market, customers to whom we license software directly and our SaaS offerings. A credit review is completed for our new distributors, dealers and OEMs. We also perform ongoing credit evaluations of our customers&#8217; financial condition and require letters of credit or other guarantees, whenever deemed necessary. The credit limit given to the customer is based on our risk assessment of their ability to pay, country risk and other factors and is not contingent on the resale of the product or on the collection of payments from their customers. If we license our software or provide SaaS services to a customer where we have a reason to believe the customer&#8217;s ability to pay is not probable, due to country risk or credit risk, we will not recognize the revenue. We will revert to recognizing the revenue on a cash basis, assuming all other criteria for revenue recognition has been met.</font></div><div style="line-height:120%;padding-bottom:10px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;"></font></div></div>
CY2018 us-gaap Revenue Recognition Deferred Revenue
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:8px;padding-top:8px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Deferred Revenue</font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;Deferred revenue consists of billings and payments received in advance of revenue recognition for our products and solutions described above. We recognize deferred revenue as revenue only when the revenue recognition criteria are met.</font></div></div>

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