2015 Q1 Form 10-K Financial Statement

#000082705415000103 Filed on May 27, 2015

View on sec.gov

Income Statement

Concept 2015 Q1 2014 Q1 2013 Q4
Revenue $543.2M $493.4M $482.4M
YoY Change 10.1% 14.7% 15.94%
Cost Of Revenue $229.6M $202.8M $199.7M
YoY Change 13.21% 6.12% -7.41%
Gross Profit $313.6M $290.6M $282.7M
YoY Change 7.93% 21.56% 41.06%
Gross Profit Margin 57.74% 58.9% 58.61%
Selling, General & Admin $67.80M $65.30M $66.86M
YoY Change 3.83% 0.93% -3.62%
% of Gross Profit 21.62% 22.47% 23.65%
Research & Development $87.70M $77.40M $76.34M
YoY Change 13.31% 9.94% 6.95%
% of Gross Profit 27.96% 26.64% 27.0%
Depreciation & Amortization $73.20M $45.40M $22.20M
YoY Change 61.23% -28.62% -3.48%
% of Gross Profit 23.34% 15.62% 7.85%
Operating Expenses $202.5M $164.0M $165.8M
YoY Change 23.48% -6.34% -9.41%
Operating Profit $110.3M $126.0M $116.9M
YoY Change -12.45% 122.24% 571.44%
Interest Expense -$15.00M -$7.600M $12.55M
YoY Change 97.37% 16.92% 13.25%
% of Operating Profit -13.59% -6.03% 10.73%
Other Income/Expense, Net $17.30M -$200.0K $3.824M
YoY Change -8750.0% -71.43% -1777.19%
Pretax Income $62.00M $118.2M $112.6M
YoY Change -47.55% 138.79% 1061.66%
Income Tax -$36.60M $6.700M $7.187M
% Of Pretax Income -59.03% 5.67% 6.38%
Net Earnings $99.40M $111.5M $105.4M
YoY Change -10.85% 86.79% 936.09%
Net Earnings / Revenue 18.3% 22.6% 21.85%
Basic Earnings Per Share $0.53
Diluted Earnings Per Share $0.45 $0.50 $0.48
COMMON SHARES
Basic Shares Outstanding 201.4M shares 199.1M shares 198.8M shares
Diluted Shares Outstanding 219.1M shares

Balance Sheet

Concept 2015 Q1 2014 Q1 2013 Q4
SHORT-TERM ASSETS
Cash & Short-Term Investments $1.959B $1.345B $1.307B
YoY Change 45.65% -14.82% -19.42%
Cash & Equivalents $607.8M $466.6M $375.1M
Short-Term Investments $1.351B $878.0M $932.0M
Other Short-Term Assets $32.60M $20.24M $61.14M
YoY Change 61.1% -69.95% -18.99%
Inventory $279.5M $262.7M $274.6M
Prepaid Expenses $34.72M $31.76M $29.44M
Receivables $273.9M $242.4M $224.3M
Other Receivables $7.000M $2.000M $2.000M
Total Short-Term Assets $2.665B $1.969B $1.969B
YoY Change 35.3% -11.94% -14.26%
LONG-TERM ASSETS
Property, Plant & Equipment $581.6M $532.0M $520.6M
YoY Change 9.32% 3.39% -0.42%
Goodwill $571.3M $276.1M $276.0M
YoY Change 106.91% 1.75% 4.81%
Intangibles $504.4M $445.5M $466.3M
YoY Change 13.23% -15.97% -18.31%
Long-Term Investments $383.0M $799.0M $724.0M
YoY Change -52.07% 210.89% 382.67%
Other Assets $75.51M $45.96M $47.35M
YoY Change 64.31% 10.59% 17.11%
Total Long-Term Assets $2.116B $2.098B $2.034B
YoY Change 0.85% 29.92% 31.49%
TOTAL ASSETS
Total Short-Term Assets $2.665B $1.969B $1.969B
Total Long-Term Assets $2.116B $2.098B $2.034B
Total Assets $4.781B $4.068B $4.003B
YoY Change 17.53% 5.61% 4.15%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $86.87M $74.05M $62.75M
YoY Change 17.31% -1.99% 16.2%
Accrued Expenses $101.0M $96.73M $96.18M
YoY Change 4.39% -23.9% -19.6%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $17.50M $14.16M
YoY Change -100.0%
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $354.0M $336.1M $316.4M
YoY Change 5.32% -1.62% 6.79%
LONG-TERM LIABILITIES
Long-Term Debt $1.827B $1.003B $1.005B
YoY Change 82.15% 2.03% 3.5%
Other Long-Term Liabilities $43.33M $37.55M $38.42M
YoY Change 15.39% 70.95% 75.92%
Total Long-Term Liabilities $43.33M $37.55M $38.42M
YoY Change 15.39% 70.95% 75.92%
TOTAL LIABILITIES
Total Short-Term Liabilities $354.0M $336.1M $316.4M
Total Long-Term Liabilities $43.33M $37.55M $38.42M
Total Liabilities $397.3M $373.6M $354.8M
YoY Change 6.34% 2.76% 11.54%
SHAREHOLDERS EQUITY
Retained Earnings $1.550B $1.467B $1.426B
YoY Change 5.63% 8.43% 4.69%
Common Stock $999.7M $200.0K $199.0K
YoY Change 499758.5% 2.04% 2.05%
Preferred Stock
YoY Change
Treasury Stock (at cost) $515.7M $577.4M $603.7M
YoY Change -10.69% -15.37% -15.67%
Treasury Stock Shares 16.71M shares 18.79M shares 19.67M shares
Shareholders Equity $11.08M $2.135B $2.075B
YoY Change
Total Liabilities & Shareholders Equity $4.781B $4.068B $4.003B
YoY Change 17.53% 5.61% 4.15%

Cashflow Statement

Concept 2015 Q1 2014 Q1 2013 Q4
OPERATING ACTIVITIES
Net Income $99.40M $111.5M $105.4M
YoY Change -10.85% 86.79% 936.09%
Depreciation, Depletion And Amortization $73.20M $45.40M $22.20M
YoY Change 61.23% -28.62% -3.48%
Cash From Operating Activities $178.5M $203.4M $148.3M
YoY Change -12.24% 59.03% 6.54%
INVESTING ACTIVITIES
Capital Expenditures -$29.50M -$33.60M -$24.30M
YoY Change -12.2% 128.57% 145.45%
Acquisitions
YoY Change
Other Investing Activities $27.90M -$21.40M -$34.90M
YoY Change -230.37% 421.95% -27.29%
Cash From Investing Activities -$1.500M -$54.90M -$59.30M
YoY Change -97.27% 192.02% 2.42%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -25.50M -56.90M -58.10M
YoY Change -55.18% 23.7% 11.09%
NET CHANGE
Cash From Operating Activities 178.5M 203.4M 148.3M
Cash From Investing Activities -1.500M -54.90M -59.30M
Cash From Financing Activities -25.50M -56.90M -58.10M
Net Change In Cash 151.5M 91.60M 30.90M
YoY Change 65.39% 45.17% 6.55%
FREE CASH FLOW
Cash From Operating Activities $178.5M $203.4M $148.3M
Capital Expenditures -$29.50M -$33.60M -$24.30M
Free Cash Flow $208.0M $237.0M $172.6M
YoY Change -12.24% 66.2% 15.76%

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1196000 USD
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0 USD
CY2014 us-gaap Available For Sale Securities Gross Realized Gains
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0 USD
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135300000 USD
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273900000 USD
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15011000 USD
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3990000 USD
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474000 USD
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0 USD
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2438000 USD
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591000 USD
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986000 USD
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P2Y0M0D
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300000 USD
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1400000 USD
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1200000 USD
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297000 USD
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1411000 USD
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1216000 USD
CY2013 us-gaap Excess Tax Benefit From Share Based Compensation Operating Activities
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297000 USD
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1411000 USD
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1216000 USD
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263691000 USD
CY2015Q1 us-gaap Finite Lived Intangible Assets Accumulated Amortization
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444650000 USD
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144229000 USD
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40718000 USD
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56577000 USD
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400000 USD
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0 USD
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256000 USD
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0 USD
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0 USD
CY2014 us-gaap Gains Losses On Extinguishment Of Debt
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0 USD
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0 USD
CY2014 us-gaap Impairment Of Intangible Assets Finitelived
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350000 USD
CY2015 us-gaap Impairment Of Intangible Assets Finitelived
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1881000 USD
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28245000 USD
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152177000 USD
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432354000 USD
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345907000 USD
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234340000 USD
CY2014 us-gaap Income Loss From Continuing Operations Before Income Taxes Foreign
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404109000 USD
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346851000 USD
CY2013 us-gaap Income Loss From Equity Method Investments
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-617000 USD
CY2014 us-gaap Income Loss From Equity Method Investments
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16800000 USD
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0 USD
CY2014 us-gaap Income Tax Reconciliation Change In Deferred Tax Assets Valuation Allowance
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0 USD
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CY2014 us-gaap Income Tax Reconciliation Income Tax Expense Benefit At Federal Statutory Income Tax Rate
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151324000 USD
CY2015 us-gaap Income Tax Reconciliation Income Tax Expense Benefit At Federal Statutory Income Tax Rate
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121067000 USD
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1793000 USD
CY2014 us-gaap Income Tax Reconciliation Other Adjustments
IncomeTaxReconciliationOtherAdjustments
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CY2015 us-gaap Income Tax Reconciliation Other Adjustments
IncomeTaxReconciliationOtherAdjustments
1454000 USD
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7267000 USD
CY2014 us-gaap Income Tax Reconciliation Other Reconciling Items
IncomeTaxReconciliationOtherReconcilingItems
6212000 USD
CY2015 us-gaap Income Tax Reconciliation Other Reconciling Items
IncomeTaxReconciliationOtherReconcilingItems
5218000 USD
CY2013 us-gaap Income Tax Reconciliation State And Local Income Taxes
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CY2014 us-gaap Income Tax Reconciliation State And Local Income Taxes
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686000 USD
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IncomeTaxReconciliationTaxCreditsResearch
8263000 USD
CY2014 us-gaap Income Tax Reconciliation Tax Credits Research
IncomeTaxReconciliationTaxCreditsResearch
4875000 USD
CY2015 us-gaap Income Tax Reconciliation Tax Credits Research
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9703000 USD
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21400000 USD
CY2014 us-gaap Income Taxes Paid
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25700000 USD
CY2015 us-gaap Income Taxes Paid
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25500000 USD
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CY2014 us-gaap Increase Decrease In Accounts Payable And Accrued Liabilities
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CY2015 us-gaap Increase Decrease In Accounts Receivable
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15893000 USD
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18867000 USD
CY2014 us-gaap Increase Decrease In Deferred Revenue
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8846000 USD
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18330000 USD
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18500000 USD
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CY2014 us-gaap Interest Expense
InterestExpense
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CY2014 us-gaap Interest Paid
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CY2015 us-gaap Interest Paid
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21500000 USD
CY2015 us-gaap Lease And Rental Expense
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23800000 USD
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32095000 USD
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CY2013 us-gaap Net Cash Provided By Used In Operating Activities Continuing Operations
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CY2014 us-gaap Net Cash Provided By Used In Operating Activities Continuing Operations
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721182000 USD
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52467000 USD
CY2014 us-gaap Oci Before Reclassifications Net Of Tax Attributable To Parent
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OperatingIncomeLoss
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CY2015Q1 us-gaap Operating Leases Future Minimum Payments Due In Five Years
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CY2015Q1 us-gaap Operating Leases Future Minimum Payments Due In Three Years
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CY2015Q1 us-gaap Operating Leases Future Minimum Payments Due In Two Years
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CY2013 us-gaap Other Comprehensive Income Defined Benefit Plans Net Unamortized Gain Loss Arising During Period Net Of Tax
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52000 USD
CY2014 us-gaap Other Comprehensive Income Defined Benefit Plans Net Unamortized Gain Loss Arising During Period Net Of Tax
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88000 USD
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CY2013 us-gaap Other Comprehensive Income Defined Benefit Plans Net Unamortized Gain Loss Arising During Period Tax
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28000 USD
CY2014 us-gaap Other Comprehensive Income Defined Benefit Plans Net Unamortized Gain Loss Arising During Period Tax
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55000 USD
CY2015 us-gaap Other Comprehensive Income Defined Benefit Plans Net Unamortized Gain Loss Arising During Period Tax
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1439000 USD
CY2014 us-gaap Other Comprehensive Income Foreign Currency Transaction And Translation Adjustment Net Of Tax Portion Attributable To Parent
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0 USD
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2686000 USD
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0 USD
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0 USD
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3834000 USD
CY2014 us-gaap Other Comprehensive Income Loss Net Of Tax Portion Attributable To Parent
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343000 USD
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CY2014 us-gaap Payments Of Merger Related Costs Financing Activities
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14700000 USD
CY2015 us-gaap Payments Of Merger Related Costs Financing Activities
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CY2013 us-gaap Payments Of Ordinary Dividends
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557000 USD
CY2014 us-gaap Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Tax
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497000 USD
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12000 USD
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CY2014 us-gaap Other Noncash Income Expense
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OtherNoncashIncomeExpense
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OtherNonoperatingIncomeExpense
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OtherNonoperatingIncomeExpense
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OtherNonrecurringIncomeExpense
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CY2014 us-gaap Other Nonrecurring Income Expense
OtherNonrecurringIncomeExpense
3024000 USD
CY2015 us-gaap Other Nonrecurring Income Expense
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CY2014 us-gaap Payments To Acquire Additional Interest In Subsidiaries
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CY2015 us-gaap Payments To Acquire Additional Interest In Subsidiaries
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CY2013 us-gaap Payments To Acquire Available For Sale Securities
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CY2014 us-gaap Payments To Acquire Available For Sale Securities
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CY2015 us-gaap Payments To Acquire Available For Sale Securities
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CY2013 us-gaap Payments To Acquire Business Three Net Of Cash Acquired
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731746000 USD
CY2014 us-gaap Payments To Acquire Business Three Net Of Cash Acquired
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0 USD
CY2015 us-gaap Payments To Acquire Business Three Net Of Cash Acquired
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0 USD
CY2013 us-gaap Payments To Acquire Business Two Net Of Cash Acquired
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0 USD
CY2014 us-gaap Payments To Acquire Business Two Net Of Cash Acquired
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0 USD
CY2015 us-gaap Payments To Acquire Business Two Net Of Cash Acquired
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375365000 USD
CY2013 us-gaap Payments To Acquire Businesses Net Of Cash Acquired
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0 USD
CY2014 us-gaap Payments To Acquire Businesses Net Of Cash Acquired
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0 USD
CY2015 us-gaap Payments To Acquire Businesses Net Of Cash Acquired
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252469000 USD
CY2013 us-gaap Payments To Acquire Other Property Plant And Equipment
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50818000 USD
CY2014 us-gaap Payments To Acquire Other Property Plant And Equipment
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113072000 USD
CY2013 us-gaap Payments To Acquire Productive Assets
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4730000 USD
CY2014 us-gaap Payments To Acquire Productive Assets
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9069000 USD
CY2015 us-gaap Payments To Acquire Productive Assets
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6663000 USD
CY2014Q1 us-gaap Preferred Stock Par Or Stated Value Per Share
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0.001
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CY2014Q1 us-gaap Preferred Stock Shares Authorized
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CY2015Q1 us-gaap Preferred Stock Shares Authorized
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5000000 shares
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0 shares
CY2015Q1 us-gaap Preferred Stock Shares Issued
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0 shares
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0 shares
CY2015Q1 us-gaap Preferred Stock Shares Outstanding
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0 shares
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0 USD
CY2015Q1 us-gaap Preferred Stock Value
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0 USD
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31756000 USD
CY2015Q1 us-gaap Prepaid Expense Current
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34717000 USD
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0 USD
CY2014 us-gaap Proceeds From Convertible Debt
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0 USD
CY2015 us-gaap Proceeds From Convertible Debt
ProceedsFromConvertibleDebt
1725000000 USD
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51365000 USD
CY2014 us-gaap Proceeds From Issuance Of Common Stock
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60086000 USD
CY2015 us-gaap Proceeds From Issuance Of Common Stock
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34433000 USD
CY2013 us-gaap Proceeds From Issuance Of Long Term Debt
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0 USD
CY2014 us-gaap Proceeds From Issuance Of Long Term Debt
ProceedsFromIssuanceOfLongTermDebt
350000000 USD
CY2015 us-gaap Proceeds From Issuance Of Long Term Debt
ProceedsFromIssuanceOfLongTermDebt
0 USD
CY2013 us-gaap Proceeds From Sale And Maturity Of Available For Sale Securities
ProceedsFromSaleAndMaturityOfAvailableForSaleSecurities
856579000 USD
CY2014 us-gaap Proceeds From Sale And Maturity Of Available For Sale Securities
ProceedsFromSaleAndMaturityOfAvailableForSaleSecurities
951296000 USD
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CY2015 us-gaap Proceeds From Sale Of Productive Assets
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CY2014 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Forfeitures And Expirations In Period
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19.90
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CY2014 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Grants In Period
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CY2013Q1 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Number
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25.00
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CY2014Q1 us-gaap Short Term Borrowings
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CY2015Q1 us-gaap Short Term Borrowings
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34433000 USD
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10000000 shares
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2500000 shares
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27600000 USD
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200000 USD
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300000 USD
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CY2015 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%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Concentrations of Credit Risk</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of investments in debt securities and trade receivables.&#160;&#160;Investments in debt securities with original maturities of greater than six months consist primarily of AAA and AA rated financial instruments and counterparties.&#160;&#160;The Company's investments are primarily in direct obligations of the U.S. government or its agencies, corporate bonds, and municipal bonds.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Concentrations of credit risk with respect to accounts receivable are generally not significant due to the diversity of the Company's customers and geographic sales areas.&#160;&#160;The Company sells its products primarily to OEMs and distributors in the Americas, Europe and Asia.&#160;&#160;The Company performs ongoing credit evaluations of its customers' financial condition and, as deemed necessary, may require collateral, primarily letters of credit.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Distributor advances, included in deferred income on shipments to distributors in the consolidated balance sheets, totaled $</font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">116.0 million</font><font style="font-family:inherit;font-size:10pt;"> at </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">March&#160;31, 2015</font><font style="font-family:inherit;font-size:10pt;"> and $</font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">92.8 million</font><font style="font-family:inherit;font-size:10pt;"> at </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">March&#160;31, 2014</font><font style="font-family:inherit;font-size:10pt;">.&#160;&#160;On sales to distributors, the Company's payment terms generally require the distributor to settle amounts owed to the Company for an amount in excess of their ultimate cost.&#160;&#160;The Company's sales price to its distributors may be higher than the amount that the distributors will ultimately owe the Company because distributors often negotiate price reductions after purchasing the product from the Company and such reductions are often significant.&#160;&#160;It is the Company's practice to apply these negotiated price discounts to future purchases, requiring the distributor to settle receivable balances, on a current basis, generally within </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">30</font><font style="font-family:inherit;font-size:10pt;"> days, for amounts originally invoiced.&#160;&#160;This practice has an adverse impact on the working capital of the Company's distributors.&#160;&#160;As such, the Company has entered into agreements with certain distributors whereby it advances cash to the distributors to reduce the distributor's working capital requirements.&#160;&#160;These advances are reconciled at least on a quarterly basis and are estimated based on the amount of ending inventory as reported by the distributor multiplied by a negotiated percentage.&#160;&#160;Such advances have no impact on revenue recognition or the Company's consolidated statements of income.&#160;&#160;The Company processes discounts taken by distributors against its deferred income on shipments to distributors' balance and trues-up the advanced amounts generally after the end of each completed fiscal quarter.&#160;&#160;The terms of these advances are set forth in binding legal agreements and are unsecured, bear no interest on unsettled balances and are due upon demand.&#160;&#160;The agreements governing these advances can be canceled by the Company at any time.</font></div></div>
CY2015 us-gaap Loss Contingency Disclosures
LossContingencyDisclosures
<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-weight:bold;text-decoration:underline;">CONTINGENCIES</font></div><div style="line-height:120%;text-align:left;padding-left:48px;text-indent:-48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In the ordinary course of the Company's business, it is involved in a limited number of legal actions, both as plaintiff and defendant, and could incur uninsured liability in any one or more of them.&#160;&#160;The Company also periodically receives notifications from various third parties alleging infringement of patents, intellectual property rights or other matters.&#160;&#160;With respect to pending legal actions to which the Company is a party, although the outcomes of these actions are not generally determinable, the Company believes that the ultimate resolution of these matters will not have a material adverse effect on its financial position, cash flows or results of operations.&#160;&#160;Litigation relating to the semiconductor industry is not uncommon, and the Company is, and from time to time has been, subject to such litigation.&#160;&#160;No assurances can be given with respect to the extent or outcome of any such litigation in the future.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company's technology license agreements generally include an indemnification clause that indemnifies the licensee against liability and damages (including legal defense costs) arising from any claims of patent, copyright, trademark or trade secret infringement by the Company's proprietary technology.&#160;&#160;The terms of these indemnification provisions approximate the terms of the outgoing technology license agreements, which are typically perpetual unless terminated by either party for breach. The possible amount of future payments the Company could be required to make based on agreements that specify indemnification limits, if such indemnifications were required on all of these agreements, is approximately $</font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">139 million</font><font style="font-family:inherit;font-size:10pt;">. There are some licensing agreements in place that do not specify indemnification limits.&#160;&#160;The Company had not recorded any liabilities related to these indemnification obligations&#160;as of March&#160;31, </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">2015</font><font style="font-family:inherit;font-size:10pt;">.</font></div></div>
CY2015 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-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;">&#160;</font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company has made a number of estimates and assumptions relating to the reporting of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities to prepare its consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles.&#160;&#160;Actual results could differ from those estimates.</font></div></div>

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