2016 Q4 Form 10-K Financial Statement

#000088324116000027 Filed on December 12, 2016

View on sec.gov

Income Statement

Concept 2016 Q4 2015 Q4 2015 Q3
Revenue $633.7M $587.2M $555.8M
YoY Change 7.93% 8.93% 6.51%
Cost Of Revenue $142.2M $139.8M $129.5M
YoY Change 1.72% 15.16% 12.07%
Gross Profit $491.5M $447.3M $426.3M
YoY Change 9.88% 7.12% 4.94%
Gross Profit Margin 77.56% 76.18% 76.71%
Selling, General & Admin $173.7M $174.5M $160.9M
YoY Change -0.46% 6.92% 7.48%
% of Gross Profit 35.34% 39.01% 37.74%
Research & Development $222.0M $208.3M $198.0M
YoY Change 6.58% 9.4% 8.31%
% of Gross Profit 45.17% 46.57% 46.44%
Depreciation & Amortization $49.20M $57.30M $52.40M
YoY Change -14.14% 10.19% 6.5%
% of Gross Profit 10.01% 12.81% 12.29%
Operating Expenses $402.2M $389.8M $364.9M
YoY Change 3.18% 8.25% 7.61%
Operating Profit $89.31M $57.52M $61.48M
YoY Change 55.28% 0.04% -8.55%
Interest Expense $600.0K $800.0K $599.0K
YoY Change -25.0% 100.0% -16.22%
% of Operating Profit 0.67% 1.39% 0.97%
Other Income/Expense, Net $1.100M $900.0K $3.711M
YoY Change 22.22% 0.0% 4.71%
Pretax Income $82.75M $55.92M $65.19M
YoY Change 47.99% -10.0% -7.88%
Income Tax $10.10M $6.200M $9.806M
% Of Pretax Income 12.21% 11.09% 15.04%
Net Earnings $72.70M $49.76M $55.39M
YoY Change 46.09% -20.32% -15.64%
Net Earnings / Revenue 11.47% 8.48% 9.97%
Basic Earnings Per Share $0.48 $0.32 $0.36
Diluted Earnings Per Share $0.47 $0.31 $0.35
COMMON SHARES
Basic Shares Outstanding 150.1M shares 151.5M shares 155.5M shares
Diluted Shares Outstanding 158.6M shares

Balance Sheet

Concept 2016 Q4 2015 Q4 2015 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $1.117B $964.9M $1.123B
YoY Change 15.79% -2.12% 24.35%
Cash & Equivalents $976.6M $836.2M $986.4M
Short-Term Investments $140.7M $128.7M $136.5M
Other Short-Term Assets $104.7M $71.50M $160.4M
YoY Change 46.43% -56.85% 3.89%
Inventory
Prepaid Expenses
Receivables $438.9M $385.7M $307.8M
Other Receivables $56.10M $46.70M $36.40M
Total Short-Term Assets $1.717B $1.469B $1.628B
YoY Change 16.89% -2.39% 23.79%
LONG-TERM ASSETS
Property, Plant & Equipment $257.0M $263.1M $260.7M
YoY Change -2.3% 5.61% 20.67%
Goodwill $2.518B $2.471B $2.336B
YoY Change 1.9% 9.56% 3.31%
Intangibles $266.7M $363.7M $318.5M
YoY Change -26.67% -0.38% -13.31%
Long-Term Investments
YoY Change
Other Assets $185.6M $186.3M $185.9M
YoY Change -0.4% 6.39% 8.49%
Total Long-Term Assets $3.523B $3.577B $3.326B
YoY Change -1.5% 9.36% 2.98%
TOTAL ASSETS
Total Short-Term Assets $1.717B $1.469B $1.628B
Total Long-Term Assets $3.523B $3.577B $3.326B
Total Assets $5.240B $5.046B $4.954B
YoY Change 3.86% 5.66% 9.0%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $13.75M $9.919M $18.69M
YoY Change 38.57% -64.77% 27.8%
Accrued Expenses $367.7M $365.3M $299.8M
YoY Change 0.66% 2.27% -0.43%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $205.0M $205.0M $190.0M
YoY Change 0.0% 583.33% 533.33%
Total Short-Term Liabilities $1.715B $1.578B $1.459B
YoY Change 8.65% 13.82% 18.91%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00 $22.50M
YoY Change -100.0% -57.14%
Other Long-Term Liabilities $210.9M $202.0M $204.1M
YoY Change 4.37% 27.08% 23.89%
Total Long-Term Liabilities $210.9M $202.0M $226.6M
YoY Change 4.37% -0.96% 4.31%
TOTAL LIABILITIES
Total Short-Term Liabilities $1.715B $1.578B $1.459B
Total Long-Term Liabilities $210.9M $202.0M $226.6M
Total Liabilities $2.045B $1.912B $1.816B
YoY Change 6.98% 11.19% 17.23%
SHAREHOLDERS EQUITY
Retained Earnings $1.948B $1.726B $1.689B
YoY Change 12.86% 11.22% 12.49%
Common Stock $1.515M $1.552M $1.559M
YoY Change -2.38% -0.51% 0.19%
Preferred Stock
YoY Change
Treasury Stock (at cost) $294.1M $98.38M $61.20M
YoY Change 198.91% 98.75% 1.68%
Treasury Stock Shares 5.811M shares 2.107M shares 1.336M shares
Shareholders Equity $3.195B $3.134B $3.138B
YoY Change
Total Liabilities & Shareholders Equity $5.240B $5.046B $4.954B
YoY Change 3.86% 5.66% 9.0%

Cashflow Statement

Concept 2016 Q4 2015 Q4 2015 Q3
OPERATING ACTIVITIES
Net Income $72.70M $49.76M $55.39M
YoY Change 46.09% -20.32% -15.64%
Depreciation, Depletion And Amortization $49.20M $57.30M $52.40M
YoY Change -14.14% 10.19% 6.5%
Cash From Operating Activities $147.6M $152.5M $275.0M
YoY Change -3.21% -11.85% -19.14%
INVESTING ACTIVITIES
Capital Expenditures -$19.80M -$233.4M -$149.3M
YoY Change -91.52% 247.84% 330.26%
Acquisitions
YoY Change
Other Investing Activities $2.800M $7.500M -$200.0K
YoY Change -62.67% -93.33%
Cash From Investing Activities -$17.10M -$225.9M -$149.4M
YoY Change -92.43% 236.16% 296.29%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $36.00M
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -101.3M -75.50M -5.100M
YoY Change 34.17% 586.36% -97.68%
NET CHANGE
Cash From Operating Activities 147.6M 152.5M 275.0M
Cash From Investing Activities -17.10M -225.9M -149.4M
Cash From Financing Activities -101.3M -75.50M -5.100M
Net Change In Cash 29.20M -148.9M 120.5M
YoY Change -119.61% -257.07% 46.42%
FREE CASH FLOW
Cash From Operating Activities $147.6M $152.5M $275.0M
Capital Expenditures -$19.80M -$233.4M -$149.3M
Free Cash Flow $167.4M $385.9M $424.3M
YoY Change -56.62% 60.72% 13.21%

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102118000 USD
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28700000 USD
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32300000 USD
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38800000 USD
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456885000 USD
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268348000 USD
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303633000 USD
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346825000 USD
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87226000 USD
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105242000 USD
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94019000 USD
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279000 USD
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1385000 USD
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3701000 USD
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-23510000 USD
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66345000 USD
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54604000 USD
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P12M
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3882000 USD
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1.67
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0.36
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0.39
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0.46
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0.43
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0.48
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0.42
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0.47
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1.73
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P2Y6M
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5362000 USD
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14865000 USD
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31683000 USD
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46551000 USD
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71091000 USD
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1195000 USD
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7397000 USD
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0 USD
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0 USD
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0 USD
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684000 USD
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6363000 USD
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156000 USD
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50075000 USD
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51589000 USD
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-3301000 USD
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-5554000 USD
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-4533000 USD
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6999000 USD
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109000 USD
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18000 USD
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155215000 USD
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165097000 USD
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165962000 USD
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233989000 USD
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435000 USD
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491508000 USD
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0 USD
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0 USD
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0 USD
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42571000 USD
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22134000 USD
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279780000 USD
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239039000 USD
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307414000 USD
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272142000 USD
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76615000 USD
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83884000 USD
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65193000 USD
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55918000 USD
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281610000 USD
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64342000 USD
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97223000 USD
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85231000 USD
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82752000 USD
CY2016 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
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329548000 USD
CY2015Q4 us-gaap Income Tax Examination Penalties And Interest Accrued
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2200000 USD
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3100000 USD
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IncomeTaxExaminationPenaltiesAndInterestExpense
500000 USD
CY2015 us-gaap Income Tax Examination Penalties And Interest Expense
IncomeTaxExaminationPenaltiesAndInterestExpense
600000 USD
CY2016 us-gaap Income Tax Examination Penalties And Interest Expense
IncomeTaxExaminationPenaltiesAndInterestExpense
800000 USD
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IncomeTaxExpenseBenefit
13018000 USD
CY2015 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
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CY2016 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
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-235000 USD
CY2015 us-gaap Income Tax Reconciliation Change In Deferred Tax Assets Valuation Allowance
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-216000 USD
CY2016 us-gaap Income Tax Reconciliation Change In Deferred Tax Assets Valuation Allowance
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428000 USD
CY2014 us-gaap Income Tax Reconciliation Foreign Income Tax Rate Differential
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CY2015 us-gaap Income Tax Reconciliation Foreign Income Tax Rate Differential
IncomeTaxReconciliationForeignIncomeTaxRateDifferential
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CY2016 us-gaap Income Tax Reconciliation Foreign Income Tax Rate Differential
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CY2014 us-gaap Income Tax Reconciliation Income Tax Expense Benefit At Federal Statutory Income Tax Rate
IncomeTaxReconciliationIncomeTaxExpenseBenefitAtFederalStatutoryIncomeTaxRate
95251000 USD
CY2015 us-gaap Income Tax Reconciliation Income Tax Expense Benefit At Federal Statutory Income Tax Rate
IncomeTaxReconciliationIncomeTaxExpenseBenefitAtFederalStatutoryIncomeTaxRate
98564000 USD
CY2016 us-gaap Income Tax Reconciliation Income Tax Expense Benefit At Federal Statutory Income Tax Rate
IncomeTaxReconciliationIncomeTaxExpenseBenefitAtFederalStatutoryIncomeTaxRate
115343000 USD
CY2014 us-gaap Income Tax Reconciliation Nondeductible Expense Share Based Compensation Cost
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5675000 USD
CY2015 us-gaap Income Tax Reconciliation Nondeductible Expense Share Based Compensation Cost
IncomeTaxReconciliationNondeductibleExpenseShareBasedCompensationCost
5406000 USD
CY2016 us-gaap Income Tax Reconciliation Nondeductible Expense Share Based Compensation Cost
IncomeTaxReconciliationNondeductibleExpenseShareBasedCompensationCost
5709000 USD
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IncomeTaxReconciliationOtherReconcilingItems
4838000 USD
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IncomeTaxReconciliationOtherReconcilingItems
2024000 USD
CY2016 us-gaap Income Tax Reconciliation Other Reconciling Items
IncomeTaxReconciliationOtherReconcilingItems
4811000 USD
CY2014 us-gaap Income Tax Reconciliation State And Local Income Taxes
IncomeTaxReconciliationStateAndLocalIncomeTaxes
-4306000 USD
CY2015 us-gaap Income Tax Reconciliation State And Local Income Taxes
IncomeTaxReconciliationStateAndLocalIncomeTaxes
-4764000 USD
CY2016 us-gaap Income Tax Reconciliation State And Local Income Taxes
IncomeTaxReconciliationStateAndLocalIncomeTaxes
11015000 USD
CY2014 us-gaap Income Tax Reconciliation Tax Credits
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5153000 USD
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IncomeTaxReconciliationTaxCredits
13301000 USD
CY2016 us-gaap Income Tax Reconciliation Tax Credits
IncomeTaxReconciliationTaxCredits
36979000 USD
CY2015 us-gaap Income Tax Reconciliation Tax Credits Research
IncomeTaxReconciliationTaxCreditsResearch
12400000 USD
CY2016 us-gaap Income Tax Reconciliation Tax Credits Research
IncomeTaxReconciliationTaxCreditsResearch
37100000 USD
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IncomeTaxReconciliationTaxSettlements
-19645000 USD
CY2015 us-gaap Income Tax Reconciliation Tax Settlements
IncomeTaxReconciliationTaxSettlements
-6251000 USD
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IncomeTaxReconciliationTaxSettlements
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IncomeTaxesPaid
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IncomeTaxesPaid
59731000 USD
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69447000 USD
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40645000 USD
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27568000 USD
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18977000 USD
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65018000 USD
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43269000 USD
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50139000 USD
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CY2014 us-gaap Increase Decrease In Income Taxes
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-9095000 USD
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23270000 USD
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16259000 USD
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3770000 USD
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23106000 USD
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37641000 USD
CY2014 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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2656000 shares
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3108000 shares
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2704000 shares
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InterestExpense
1895000 USD
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InterestExpense
2814000 USD
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InterestExpense
3771000 USD
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1302000 USD
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2785000 USD
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3715000 USD
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1904000 USD
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2710000 USD
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3708000 USD
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20414000 USD
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65600000 USD
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67600000 USD
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63900000 USD
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142275000 USD
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P10Y
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1792212000 USD
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1910902000 USD
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222580000 USD
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252674000 USD
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495160000 USD
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23425000 USD
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12153000 USD
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1 Segment
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1 Segment
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125000 USD
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6212000 USD
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0 USD
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47000 USD
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7107000 USD
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4372000 USD
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260000000 USD
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400000000 USD
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20000000 USD
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26562000 USD
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394623000 USD
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340153000 USD
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60056000 USD
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0 USD
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0 USD
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1002000 USD
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3638000 USD
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3682000 USD
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4131000 USD
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103275000 USD
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86965000 USD
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66909000 USD
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0 USD
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238902000 USD
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168712000 USD
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0 shares
CY2016Q4 us-gaap Preferred Stock Shares Outstanding
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0 USD
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200000000 USD
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460000000 USD
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185000000 USD
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3451000 USD
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CY2014 us-gaap Proceeds From Sale And Maturity Of Marketable Securities
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0 USD
CY2015 us-gaap Proceeds From Sale And Maturity Of Marketable Securities
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109173000 USD
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156350000 USD
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7774000 USD
CY2015 us-gaap Proceeds From Sale And Maturity Of Other Investments
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0 USD
CY2016 us-gaap Proceeds From Sale And Maturity Of Other Investments
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1785000 USD
CY2014 us-gaap Proceeds From Sale Of Treasury Stock
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103730000 USD
CY2015 us-gaap Proceeds From Sale Of Treasury Stock
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109764000 USD
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125283000 USD
CY2015Q1 us-gaap Profit Loss
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65189000 USD
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55596000 USD
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330425000 USD
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185000000 USD
CY2014 us-gaap Research And Development Expense
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718768000 USD
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776229000 USD
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55387000 USD
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49762000 USD
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60035000 USD
CY2016Q2 us-gaap Profit Loss
ProfitLoss
69376000 USD
CY2016Q3 us-gaap Profit Loss
ProfitLoss
64718000 USD
CY2016Q4 us-gaap Profit Loss
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72697000 USD
CY2015Q4 us-gaap Property Plant And Equipment Gross
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717132000 USD
CY2016Q4 us-gaap Property Plant And Equipment Gross
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763079000 USD
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CY2016 us-gaap Description Of New Accounting Pronouncements Not Yet Adopted
DescriptionOfNewAccountingPronouncementsNotYetAdopted
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:10px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-weight:bold;">Effect of New Accounting Pronouncements</font></div><div style="line-height:120%;padding-top:10px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, "Revenue from Contracts with Customers (Topic 606)," which supersedes the revenue recognition requirements in &#8220;Revenue Recognition (Topic 605).&#8221; This ASU requires an entity to recognize revenue when goods are transferred or services are provided to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. This ASU also requires disclosures enabling users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. </font></div><div style="line-height:120%;padding-top:10px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">In August 2015, the FASB issued ASU 2015-14, "Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date.&#8221; With the issuance of ASU 2015-14, the new revenue guidance ASU 2014-09 will be effective for fiscal 2019, including interim periods within that reporting period, using one of two prescribed retrospective methods. In April 2016, the FASB issued ASU 2016-10, "Revenue from Contracts with Customer (Topic 606), Identifying Performance Obligations and Licensing." This ASU finalizes the amendments to the guidance on the new revenue standard on the identification of performance obligations and accounting for licenses of intellectual property. The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements and related disclosures. </font></div><div style="line-height:120%;padding-top:10px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">In February 2016, the FASB issued ASU 2016-2, "Leases (Topic 842)," which supersedes the lease requirements in "Leases (Topic 840)." This ASU requires a lessee to recognize a right-of-use asset and a lease payment liability for most leases in the Consolidated Statement of Financial Position. This ASU also makes some changes to lessor accounting and aligns with the new revenue recognition guidance.&#160; This ASU will be effective for fiscal 2020, including interim periods within that reporting period, and earlier adoption is permitted. The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.</font></div><div style="line-height:120%;padding-top:10px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">In March 2016, the FASB issued ASU 2016-09, "Compensation-Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting." This ASU simplifies certain aspects of accounting for stock-based payment transactions, including the accounting for income taxes, provides an option to recognize gross stock-based compensation expense with actual forfeitures recognized as they occur and modifies the treatment of statutory tax withholding requirements, as well as certain classifications in the statement of cash flows. This ASU will be effective for fiscal 2018, including interim periods within that reporting period, and earlier adoption is permitted if all provisions are adopted in the same period. The Company will early adopt ASU 2016-09 in the first quarter of fiscal 2017, and the Company does not currently expect adoption to have a material impact on its consolidated financial statements.</font></div><div style="line-height:120%;padding-top:10px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory.&#8221;&#160; This ASU requires the immediate recognition of current and deferred income tax effects of intra-entity transfers of assets other than inventory.&#160; This ASU will be effective for fiscal 2019, including interim periods within that reporting period, and earlier adoption is permitted. The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.</font></div></div>
CY2016 us-gaap Concentration Risk Credit Risk
ConcentrationRiskCreditRisk
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:10px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-style:italic;">Concentration of Credit Risk</font><font style="font-family:Arial;font-size:10pt;">. Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash equivalents, marketable securities, foreign currency contracts, and accounts receivable from trade customers. The Company maintains cash equivalents primarily in highly rated taxable and tax-exempt money market funds located in the U.S. and in various overseas locations.</font></div><div style="line-height:120%;padding-top:10px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">The Company sells its products worldwide primarily to customers in the global electronics market. The Company performs on-going credit evaluations of its customers&#8217; financial condition and does not require collateral. The Company establishes reserves for potential credit losses and such losses have been within management&#8217;s expectations and have not been material in any year presented.</font></div></div>
CY2016 us-gaap Fiscal Period
FiscalPeriod
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:10px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-style:italic;">Fiscal Year End.</font><font style="font-family:Arial;font-size:10pt;"> The Company&#8217;s fiscal year ends on the Saturday nearest to October&#160;31 and consists of 52 weeks, with the exception that approximately every five years, the Company has a 53-week year. Fiscal </font><font style="font-family:Arial;font-size:10pt;">2016</font><font style="font-family:Arial;font-size:10pt;">, </font><font style="font-family:Arial;font-size:10pt;">2015</font><font style="font-family:Arial;font-size:10pt;">, and </font><font style="font-family:Arial;font-size:10pt;">2014</font><font style="font-family:Arial;font-size:10pt;"> were 52-week years ending on October 29, 2016, October 31, 2015, and November 1, 2014, respectively. For presentation purposes, the consolidated financial statements and accompanying notes refer to the closest calendar month end.</font></div></div>
CY2016 us-gaap Guarantees Indemnifications And Warranties Policies
GuaranteesIndemnificationsAndWarrantiesPolicies
<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:Arial;font-size:10pt;">.</font></div><div style="line-height:120%;padding-top:10px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-style:italic;">Warranties and Indemnities.</font><font style="font-family:Arial;font-size:10pt;"> The Company generally warrants its products to be free from defects in media and to substantially conform to material specifications for a period of </font><font style="font-family:Arial;font-size:10pt;">90</font><font style="font-family:Arial;font-size:10pt;">&#160;days for software products and for up to </font><font style="font-family:Arial;font-size:10pt;">six</font><font style="font-family:Arial;font-size:10pt;"> months for hardware systems. In certain cases, the Company also provides its customers with limited indemnification with respect to claims that their use of the Company&#8217;s software products infringes on United States patents, copyrights, trademarks or trade secrets. The Company is unable to estimate the potential impact of these commitments on the future results of operations. To date, the Company has not been required to pay any material warranty claim</font></div></div>
CY2016 us-gaap Nature Of Operations
NatureOfOperations
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:10px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-weight:bold;">Description of Business</font></div><div style="line-height:120%;padding-top:10px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">Synopsys, Inc. (Synopsys or the Company) provides software, intellectual property and services used by designers across the entire silicon to software spectrum, from engineers creating advanced semiconductors to software developers ensuring the quality and security of their applications. The Company is a global leader in supplying the electronic design automation (EDA) software that engineers use to design and test integrated circuits (ICs), also known as chips. The Company also offers semiconductor intellectual property (IP) products, which are pre-designed circuits that engineers use as components of larger chip designs rather than design those circuits themselves. The Company provides software and hardware used to develop the electronic systems that incorporate chips and the software that runs on them. To complement these offerings, the Company provides technical services and support to help its customers develop advanced chips and electronic systems. The Company is also a leading provider of software tools that developers use to improve the quality and security of software code in a wide variety of industries, including electronics, financial services, energy, industrials, and automotive.</font></div></div>
CY2016 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:10px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-style:italic;">Use of Estimates.</font><font style="font-family:Arial;font-size:10pt;"> To prepare financial statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP), management must make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from these estimates and may result in material effects on the Company&#8217;s operating results and financial position.</font></div></div>

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