2017 Q4 Form 10-K Financial Statement

#000104360418000011 Filed on February 23, 2018

View on sec.gov

Income Statement

Concept 2017 Q4 2017 Q3 2017 Q2
Revenue $1.240B $1.258B $1.309B
YoY Change -10.54% -2.14% 7.17%
Cost Of Revenue $485.4M $507.0M
YoY Change -0.08% 9.06%
Gross Profit $751.2M $772.4M $801.9M
YoY Change -12.42% -3.39% 6.02%
Gross Profit Margin 60.61% 61.41% 61.27%
Selling, General & Admin $303.1M $295.5M
YoY Change 2.09% -2.25%
% of Gross Profit 39.24% 36.85%
Research & Development $236.4M $240.2M
YoY Change -6.12% -3.11%
% of Gross Profit 30.61% 29.95%
Depreciation & Amortization
YoY Change
% of Gross Profit
Operating Expenses $541.5M $543.7M
YoY Change -1.46% -1.61%
Operating Profit $230.9M $258.2M
YoY Change -7.64% 26.69%
Interest Expense $25.30M $25.00M
YoY Change 0.8% 0.0%
% of Operating Profit 10.96% 9.68%
Other Income/Expense, Net -$5.100M -$13.00M
YoY Change -61.94% 12.07%
Pretax Income $200.2M $225.8M $245.2M
YoY Change -26.42% -4.56% 27.58%
Income Tax $60.10M $65.40M
% Of Pretax Income 26.62% 26.67%
Net Earnings -$148.1M $165.7M $179.8M
YoY Change -178.4% -3.89% 28.43%
Net Earnings / Revenue -11.95% 13.17% 13.74%
Basic Earnings Per Share -$0.40 $0.44 $0.47
Diluted Earnings Per Share -$0.40 $0.43 $0.47
COMMON SHARES
Basic Shares Outstanding 374.9M shares 378.3M shares 380.4M shares
Diluted Shares Outstanding 382.7M shares 385.6M shares

Balance Sheet

Concept 2017 Q4 2017 Q3 2017 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments
YoY Change
Cash & Equivalents $2.007B $2.364B $2.393B
Short-Term Investments
Other Short-Term Assets
YoY Change
Inventory $97.80M $90.90M $96.60M
Prepaid Expenses
Receivables $852.0M $724.3M $750.4M
Other Receivables
Total Short-Term Assets $4.185B $4.283B $4.145B
YoY Change 5.35% 24.9% 20.02%
LONG-TERM ASSETS
Property, Plant & Equipment $1.021B $1.008B $1.026B
YoY Change -4.01% -5.58% -3.79%
Goodwill $3.096B $3.096B $3.079B
YoY Change 0.47% 1.57% 2.59%
Intangibles $128.1M $133.0M $121.7M
YoY Change -1.61% 17.49% 76.12%
Long-Term Investments
YoY Change
Other Assets $415.5M $245.8M $247.7M
YoY Change 75.17% 2.85% -4.51%
Total Long-Term Assets $5.649B $5.461B $5.608B
YoY Change -0.62% -4.46% -0.02%
TOTAL ASSETS
Total Short-Term Assets $4.185B $4.283B $4.145B
Total Long-Term Assets $5.649B $5.461B $5.608B
Total Assets $9.834B $9.744B $9.753B
YoY Change 1.84% 6.55% 7.61%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $217.6M $205.4M $210.7M
YoY Change -1.54% -1.44% -7.75%
Accrued Expenses
YoY Change
Deferred Revenue $1.030B
YoY Change
Short-Term Debt
YoY Change
Long-Term Debt Due $0.00
YoY Change
Total Short-Term Liabilities $1.738B $1.585B $1.673B
YoY Change 0.13% 5.1% 5.75%
LONG-TERM LIABILITIES
Long-Term Debt $2.136B $2.136B $2.135B
YoY Change 0.12% 0.12% 0.12%
Other Long-Term Liabilities $118.8M $155.7M $134.8M
YoY Change -28.48% 10.82% 22.66%
Total Long-Term Liabilities $2.255B $2.291B $2.270B
YoY Change -1.94% 0.78% 1.22%
TOTAL LIABILITIES
Total Short-Term Liabilities $1.738B $1.585B $1.673B
Total Long-Term Liabilities $2.255B $2.291B $2.270B
Total Liabilities $5.153B $4.586B $4.667B
YoY Change 9.78% 4.88% 6.39%
SHAREHOLDERS EQUITY
Retained Earnings -$3.356B -$3.047B -$3.139B
YoY Change 2.25% -12.21% -12.72%
Common Stock
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $4.681B
YoY Change
Total Liabilities & Shareholders Equity $9.834B $9.744B $9.753B
YoY Change 1.84% 6.55% 7.61%

Cashflow Statement

Concept 2017 Q4 2017 Q3 2017 Q2
OPERATING ACTIVITIES
Net Income -$148.1M $165.7M $179.8M
YoY Change -178.4% -3.89% 28.43%
Depreciation, Depletion And Amortization
YoY Change
Cash From Operating Activities
YoY Change
INVESTING ACTIVITIES
Capital Expenditures
YoY Change
Acquisitions
YoY Change
Other Investing Activities
YoY Change
Cash From Investing Activities
YoY Change
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities
YoY Change
NET CHANGE
Cash From Operating Activities
Cash From Investing Activities
Cash From Financing Activities
Net Change In Cash
YoY Change
FREE CASH FLOW
Cash From Operating Activities
Capital Expenditures
Free Cash Flow
YoY Change

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200200000 USD
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9500000 USD
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298300000 USD
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289600000 USD
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284100000 USD
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13200000 USD
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10500000 USD
CY2017 us-gaap Income Tax Reconciliation Nondeductible Expense Share Based Compensation Cost
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4300000 USD
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3700000 USD
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8900000 USD
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8900000 USD
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12700000 USD
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16800000 USD
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15100000 USD
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173900000 USD
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193500000 USD
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66600000 USD
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104300000 USD
CY2016 us-gaap Increase Decrease In Accrued Income Taxes Payable
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CY2017 us-gaap Increase Decrease In Accrued Income Taxes Payable
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43500000 USD
CY2016 us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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43600000 USD
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CY2017 us-gaap Increase Decrease In Restricted Cash
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CY2015 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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0 USD
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1200000000 USD
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0 USD
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300000000 USD
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500000 USD
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CY2016 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci For Sale Of Securities Tax
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500000 USD
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400000 USD
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800000 USD
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800000 USD
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4500000 USD
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0 USD
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3500000 USD
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144600000 USD
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33000000 USD
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5400000 USD
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20300000 USD
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10300000 USD
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210300000 USD
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151200000 USD
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4300000 USD
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0 shares
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0 shares
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0 shares
CY2017Q4 us-gaap Preferred Stock Shares Outstanding
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0 shares
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0 USD
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16900000 USD
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0 USD
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0 USD
CY2017 us-gaap Proceeds From Collection Of Notes Receivable
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75000000 USD
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121200000 USD
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62300000 USD
CY2017 us-gaap Proceeds From Issuance Of Common Stock
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64500000 USD
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594600000 USD
CY2016 us-gaap Proceeds From Issuance Of Long Term Debt
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494000000 USD
CY2017 us-gaap Proceeds From Issuance Of Long Term Debt
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0 USD
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319800000 USD
CY2016 us-gaap Proceeds From Maturities Prepayments And Calls Of Available For Sale Securities
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342300000 USD
CY2017 us-gaap Proceeds From Maturities Prepayments And Calls Of Available For Sale Securities
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741600000 USD
CY2015 us-gaap Proceeds From Payments For Trading Securities
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CY2015 us-gaap Proceeds From Sale And Collection Of Receivables
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99300000 USD
CY2016 us-gaap Proceeds From Sale And Collection Of Receivables
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83200000 USD
CY2017 us-gaap Proceeds From Sale And Collection Of Receivables
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169300000 USD
CY2015 us-gaap Proceeds From Sale And Maturity Of Other Investments
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10600000 USD
CY2016 us-gaap Proceeds From Sale And Maturity Of Other Investments
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9500000 USD
CY2017 us-gaap Proceeds From Sale And Maturity Of Other Investments
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10100000 USD
CY2015 us-gaap Proceeds From Sale Maturity And Collections Of Investments
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2900000 USD
CY2016 us-gaap Proceeds From Sale Maturity And Collections Of Investments
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3000000 USD
CY2017 us-gaap Proceeds From Sale Maturity And Collections Of Investments
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2300000 USD
CY2015 us-gaap Proceeds From Sale Of Available For Sale Securities
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861600000 USD
CY2016 us-gaap Proceeds From Sale Of Available For Sale Securities
ProceedsFromSaleOfAvailableForSaleSecurities
1182100000 USD
CY2017 us-gaap Proceeds From Sale Of Available For Sale Securities
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944000000 USD
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36700000 USD
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ShareBasedCompensation
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ShareBasedCompensation
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202700000 USD
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185700000 USD
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900000 shares
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35.67
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27500000 USD
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ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisesInPeriodTotalIntrinsicValue
7100000 USD
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7100000 USD
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1000000 shares
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3000000 USD
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CY2017Q4 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Number
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900000 shares
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29.20
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34.41
CY2017Q4 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Vested And Expected To Vest Outstanding Aggregate Intrinsic Value
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3000000 USD
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ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingNumber
900000 shares
CY2017Q4 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Vested And Expected To Vest Outstanding Weighted Average Exercise Price
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingWeightedAverageExercisePrice
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CY2017 us-gaap Share Based Compensation Arrangements By Share Based Payment Award Options Exercises In Period Weighted Average Exercise Price
ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice
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CY2017 us-gaap Share Based Compensation Arrangements By Share Based Payment Award Options Expirations In Period Weighted Average Exercise Price
ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExpirationsInPeriodWeightedAverageExercisePrice
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CY2017 us-gaap Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range Lower Range Limit
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0.08
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44
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28.50
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2100000 USD
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SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableWeightedAverageRemainingContractualTerm1
P8M12D
CY2017 us-gaap Sharebased Compensation Arrangement By Sharebased Payment Award Options Outstanding Weighted Average Remaining Contractual Term2
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2
P1Y
CY2017 us-gaap Sharebased Compensation Arrangement By Sharebased Payment Award Options Vested And Expected To Vest Outstanding Weighted Average Remaining Contractual Term1
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingWeightedAverageRemainingContractualTerm1
P1Y
CY2015 us-gaap Sharebased Compensation Arrangement By Sharebased Payment Award Options Vested In Period Fair Value1
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedInPeriodFairValue1
7000000 USD
CY2016 us-gaap Sharebased Compensation Arrangement By Sharebased Payment Award Options Vested In Period Fair Value1
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedInPeriodFairValue1
3900000 USD
CY2017 us-gaap Sharebased Compensation Arrangement By Sharebased Payment Award Options Vested In Period Fair Value1
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedInPeriodFairValue1
700000 USD
CY2017Q4 us-gaap Sharebased Compensation Arrangement By Sharebased Payment Award Purchase Price Of Common Stock Percent
SharebasedCompensationArrangementBySharebasedPaymentAwardPurchasePriceOfCommonStockPercent
0.85 pure
CY2016Q4 us-gaap Short Term Investments
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752300000 USD
CY2017Q4 us-gaap Short Term Investments
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1026100000 USD
CY2015Q4 us-gaap Standard Product Warranty Accrual
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28400000 USD
CY2016Q4 us-gaap Standard Product Warranty Accrual
StandardProductWarrantyAccrual
41300000 USD
CY2017Q4 us-gaap Standard Product Warranty Accrual
StandardProductWarrantyAccrual
27400000 USD
CY2016 us-gaap Standard Product Warranty Accrual Payments
StandardProductWarrantyAccrualPayments
30100000 USD
CY2017 us-gaap Standard Product Warranty Accrual Payments
StandardProductWarrantyAccrualPayments
50600000 USD
CY2015 us-gaap State And Local Income Tax Expense Benefit Continuing Operations
StateAndLocalIncomeTaxExpenseBenefitContinuingOperations
15900000 USD
CY2016 us-gaap State And Local Income Tax Expense Benefit Continuing Operations
StateAndLocalIncomeTaxExpenseBenefitContinuingOperations
10300000 USD
CY2017 us-gaap State And Local Income Tax Expense Benefit Continuing Operations
StateAndLocalIncomeTaxExpenseBenefitContinuingOperations
13900000 USD
CY2017 us-gaap Stock Issued During Period Shares Stock Options Exercised
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500000 shares
CY2015 us-gaap Stock Issued During Period Value Share Based Compensation
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121200000 USD
CY2016 us-gaap Stock Issued During Period Value Share Based Compensation
StockIssuedDuringPeriodValueShareBasedCompensation
62300000 USD
CY2017 us-gaap Stock Issued During Period Value Share Based Compensation
StockIssuedDuringPeriodValueShareBasedCompensation
64500000 USD
CY2014Q4 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
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4919100000 USD
CY2015Q4 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
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4574400000 USD
CY2016Q4 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest
4962500000 USD
CY2017Q4 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest
4680900000 USD
CY2014Q4 us-gaap Unrecognized Tax Benefits
UnrecognizedTaxBenefits
199200000 USD
CY2015Q4 us-gaap Unrecognized Tax Benefits
UnrecognizedTaxBenefits
216100000 USD
CY2016Q4 us-gaap Unrecognized Tax Benefits
UnrecognizedTaxBenefits
223100000 USD
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UnrecognizedTaxBenefits
264500000 USD
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UnrecognizedTaxBenefitsDecreasesResultingFromPriorPeriodTaxPositions
2900000 USD
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UnrecognizedTaxBenefitsDecreasesResultingFromPriorPeriodTaxPositions
4100000 USD
CY2017 us-gaap Unrecognized Tax Benefits Decreases Resulting From Prior Period Tax Positions
UnrecognizedTaxBenefitsDecreasesResultingFromPriorPeriodTaxPositions
16600000 USD
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0 USD
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14300000 USD
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4000000 USD
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2500000 USD
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UnrecognizedTaxBenefitsIncomeTaxPenaltiesAndInterestExpense
6000000 USD
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UnrecognizedTaxBenefitsIncomeTaxPenaltiesAndInterestExpense
8500000 USD
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18100000 USD
CY2016 us-gaap Unrecognized Tax Benefits Increases Resulting From Current Period Tax Positions
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27200000 USD
CY2017 us-gaap Unrecognized Tax Benefits Increases Resulting From Current Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromCurrentPeriodTaxPositions
64600000 USD
CY2015 us-gaap Unrecognized Tax Benefits Increases Resulting From Prior Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromPriorPeriodTaxPositions
5300000 USD
CY2016 us-gaap Unrecognized Tax Benefits Increases Resulting From Prior Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromPriorPeriodTaxPositions
1000000 USD
CY2017 us-gaap Unrecognized Tax Benefits Increases Resulting From Prior Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromPriorPeriodTaxPositions
1800000 USD
CY2015 us-gaap Unrecognized Tax Benefits Reductions Resulting From Lapse Of Applicable Statute Of Limitations
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3600000 USD
CY2016 us-gaap Unrecognized Tax Benefits Reductions Resulting From Lapse Of Applicable Statute Of Limitations
UnrecognizedTaxBenefitsReductionsResultingFromLapseOfApplicableStatuteOfLimitations
2800000 USD
CY2017 us-gaap Unrecognized Tax Benefits Reductions Resulting From Lapse Of Applicable Statute Of Limitations
UnrecognizedTaxBenefitsReductionsResultingFromLapseOfApplicableStatuteOfLimitations
4400000 USD
CY2017Q4 us-gaap Unrecognized Tax Benefits That Would Impact Effective Tax Rate
UnrecognizedTaxBenefitsThatWouldImpactEffectiveTaxRate
259800000 USD
CY2017Q4 us-gaap Unrecorded Unconditional Purchase Obligation Balance On Fifth Anniversary
UnrecordedUnconditionalPurchaseObligationBalanceOnFifthAnniversary
3100000 USD
CY2017Q4 us-gaap Unrecorded Unconditional Purchase Obligation Balance On First Anniversary
UnrecordedUnconditionalPurchaseObligationBalanceOnFirstAnniversary
47100000 USD
CY2017Q4 us-gaap Unrecorded Unconditional Purchase Obligation Balance On Fourth Anniversary
UnrecordedUnconditionalPurchaseObligationBalanceOnFourthAnniversary
6000000 USD
CY2017Q4 us-gaap Unrecorded Unconditional Purchase Obligation Balance On Second Anniversary
UnrecordedUnconditionalPurchaseObligationBalanceOnSecondAnniversary
25200000 USD
CY2017Q4 us-gaap Unrecorded Unconditional Purchase Obligation Balance On Third Anniversary
UnrecordedUnconditionalPurchaseObligationBalanceOnThirdAnniversary
13300000 USD
CY2017Q4 us-gaap Unrecorded Unconditional Purchase Obligation Balance Sheet Amount
UnrecordedUnconditionalPurchaseObligationBalanceSheetAmount
94800000 USD
CY2017Q4 us-gaap Unrecorded Unconditional Purchase Obligation Due After Five Years
UnrecordedUnconditionalPurchaseObligationDueAfterFiveYears
100000 USD
CY2016 us-gaap Valuation Allowance Deferred Tax Asset Change In Amount
ValuationAllowanceDeferredTaxAssetChangeInAmount
8200000 USD
CY2017 us-gaap Valuation Allowance Deferred Tax Asset Change In Amount
ValuationAllowanceDeferredTaxAssetChangeInAmount
60100000 USD
CY2015 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
399400000 shares
CY2016 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
387800000 shares
CY2017 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
384200000 shares
CY2015 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
390600000 shares
CY2016 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
381700000 shares
CY2017 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
377700000 shares
CY2017 us-gaap Concentration Risk Credit Risk
ConcentrationRiskCreditRisk
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Concentrations of Risk</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, investments, and accounts receivable. The Company invests only in high-quality credit instruments and maintains its cash, cash equivalents and available-for-sale investments in fixed income securities with several high-quality institutions. Deposits held with banks, including those held in foreign branches of global banks, may exceed the amount of insurance provided on such deposits. We mitigate the concentration of credit risk in our investment portfolio through diversification of the investments in various industries and asset classes, and limits to the amount of credit exposure to any single issuer and credit rating. </font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company&#8217;s derivatives expose it to credit risk to the extent that counterparties may be unable to meet the terms of the agreement. To mitigate concentration of risk related to its derivatives, the Company establishes counterparty limits to major credit-worthy financial institutions. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored and the derivatives transacted with these entities are relatively short in duration. Therefore, the Company does not expect material losses as a result of defaults by counterparties.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Generally, credit risk with respect to accounts receivable is diversified due to the number of entities comprising the Company's customer base and their dispersion across different geographic locations throughout the world. The Company performs ongoing credit evaluations of its customers and generally does not require collateral on accounts receivable. During the years ended </font><font style="font-family:inherit;font-size:10pt;">December&#160;31, 2017</font><font style="font-family:inherit;font-size:10pt;">, </font><font style="font-family:inherit;font-size:10pt;">2016</font><font style="font-family:inherit;font-size:10pt;">, and </font><font style="font-family:inherit;font-size:10pt;">2015</font><font style="font-family:inherit;font-size:10pt;">, </font><font style="font-family:inherit;font-size:10pt;">no</font><font style="font-family:inherit;font-size:10pt;"> single customer accounted for 10% or more of net revenues. </font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company relies on sole suppliers for certain of its components such as application-specific integrated circuits ("ASICs") and custom sheet metal. Additionally, the Company relies primarily on a limited number of significant independent contract manufacturers and outside design manufacturers for the production of its products. The inability of any supplier or manufacturer to fulfill supply requirements of the Company could negatively impact future operating results. </font></div></div>
CY2017 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Use of Estimates</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of the financial statements and related disclosures in accordance with U.S.&#160;GAAP requires the Company to make judgments, assumptions, and estimates that affect the amounts reported in the Consolidated Financial Statements and the accompanying notes. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. To the extent there are material differences between the Company's estimates and the actual results, the Company's future consolidated results of operation may be affected.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></div>

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