Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2016 | Jan. 28, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | VIAVI SOLUTIONS INC. | |
Entity Central Index Key | 912,093 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --07-01 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 230,314,179 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Dec. 31, 2016 | Jan. 02, 2016 | |
Revenues: | ||||
Product revenue | $ 184.2 | $ 208.4 | $ 372.5 | $ 408.6 |
Service revenue | 22.3 | 23.7 | 44.8 | 53.2 |
Total net revenues | 206.5 | 232.1 | 417.3 | 461.8 |
Cost of revenues: | ||||
Product cost of revenues | 64.7 | 71.2 | 133.3 | 139.1 |
Service cost of revenues | 13.4 | 14.5 | 26.7 | 31.5 |
Amortization of acquired technologies | 3.7 | 4.6 | 7.5 | 8.9 |
Total cost of revenues | 81.8 | 90.3 | 167.5 | 179.5 |
Gross profit | 124.7 | 141.8 | 249.8 | 282.3 |
Operating expenses: | ||||
Research and development | 35.9 | 41.7 | 72 | 86 |
Selling, general and administrative | 76.9 | 85.8 | 152.3 | 180.7 |
Amortization of other intangibles | 3.4 | 3.7 | 6.9 | 7.5 |
Restructuring and related charges | 1.8 | 1.4 | 1.8 | 1.8 |
Total operating expenses | 118 | 132.6 | 233 | 276 |
Income from operations | 6.7 | 9.2 | 16.8 | 6.3 |
Interest and other income (expense), net | 3.8 | 1.7 | 5.1 | 0.6 |
Gain on sale of investments | 53.9 | 0 | 135.4 | 0 |
Interest expense | (9.4) | (8.8) | (18.6) | (17.6) |
Income (loss) from continuing operations before taxes | 55 | 2.1 | 138.7 | (10.7) |
Provision for income taxes | 5.8 | 1.1 | 11.5 | 4 |
Income (loss) from continuing operations, net of taxes | 49.2 | 1 | 127.2 | (14.7) |
Income (loss) from discontinued operations, net of taxes | 0 | 3 | 0 | (50.4) |
Net income (loss) | $ 49.2 | $ 4 | $ 127.2 | $ (65.1) |
Net income (loss) per share from - basic: | ||||
Continuing operations (in dollars per share) | $ 0.21 | $ 0.01 | $ 0.55 | $ (0.06) |
Discontinued operations (in dollars per share) | 0 | 0.01 | 0 | (0.22) |
Net (loss) income per share (in dollars per share) | 0.21 | 0.02 | 0.55 | (0.28) |
Net income (loss) per share from - diluted: | ||||
Continuing operations (in dollars per share) | 0.21 | 0.01 | 0.54 | (0.06) |
Discontinued operations (in dollars per share) | 0 | 0.01 | 0 | (0.22) |
Net income (loss) per share (in dollars per share) | $ 0.21 | $ 0.02 | $ 0.54 | $ (0.28) |
Shares used in per share calculation - basic (in shares) | 230.5 | 234.9 | 231.4 | 235.5 |
Shares used in per share calculation - diluted (in shares) | 234.2 | 237.1 | 235.8 | 235.5 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Dec. 31, 2016 | Jan. 02, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 49.2 | $ 4 | $ 127.2 | $ (65.1) |
Other comprehensive (loss) income: | ||||
Net change in cumulative translation adjustment, net of tax | (25.6) | (11.8) | (22.2) | (21.8) |
Net change in available-for-sale investments, net of tax: | ||||
Unrealized holding (loss) gain arising during period | (10.2) | 71.4 | 74.2 | 153.1 |
Less: reclassification adjustments included in net income (loss) | (52.7) | 0 | (134.2) | 0 |
Net change in defined benefit obligation, net of tax: | ||||
Amortization of actuarial losses | 0.4 | 0.1 | 0.9 | 0.3 |
Net change in Accumulated other comprehensive (loss) income | (88.1) | 59.7 | (81.3) | 131.6 |
Comprehensive (loss) income | $ (38.9) | $ 63.7 | $ 45.9 | $ 66.5 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2016 | Jul. 02, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 505.7 | $ 482.9 |
Short-term investments | 498 | 484.7 |
Restricted cash | 11.2 | 12.2 |
Accounts receivable, net | 164.4 | 148.4 |
Inventories, net | 47.2 | 51.4 |
Prepayments and other current assets | 48.4 | 32.1 |
Total current assets | 1,274.9 | 1,211.7 |
Property, plant and equipment, net | 133.8 | 133 |
Goodwill | 149.7 | 152.1 |
Intangibles, net | 44.4 | 59.9 |
Deferred income taxes | 103.8 | 108.8 |
Other non-current assets | 12.2 | 12.6 |
Total assets | 1,718.8 | 1,678.1 |
Current liabilities: | ||
Accounts payable | 36 | 47 |
Accrued payroll and related expenses | 42.1 | 44.9 |
Deferred revenue | 64.4 | 78.6 |
Accrued expenses | 31.5 | 24.9 |
Other current liabilities | 71 | 31 |
Total current liabilities | 245 | 226.4 |
Long-term debt | 598.3 | 583.3 |
Other non-current liabilities | 166.1 | 179.1 |
Commitments and contingencies (Note 16) | ||
Stockholders’ equity: | ||
Preferred Stock, $0.001 par value; 1 million shares authorized; 1 share at December 31, 2016 and July 2, 2016, issued and outstanding | 0 | 0 |
Common Stock, $0.001 par value; 1 billion shares authorized; 231 million shares at December 31, 2016 and 232 million shares at July 2, 2016, issued and outstanding | 0.2 | 0.2 |
Additional paid-in capital | 70,073.7 | 70,059.8 |
Accumulated deficit | (69,293.2) | (69,380.7) |
Accumulated other comprehensive (loss) income | (71.3) | 10 |
Total stockholders’ equity | 709.4 | 689.3 |
Total liabilities and stockholders’ equity | $ 1,718.8 | $ 1,678.1 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2016 | Jul. 02, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred Stock, shares issued | 1 | 1 |
Preferred Stock, shares outstanding | 1 | 1 |
Common Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common Stock, shares issued | 231,000,000 | 232,000,000 |
Common Stock, shares outstanding | 231,000,000 | 232,000,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | ||
OPERATING ACTIVITIES: | |||
Net income (loss) | $ 127.2 | $ (65.1) | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation expense | 15.5 | 21.7 | |
Amortization of acquired technologies and other intangibles | 14.4 | 17 | |
Stock-based compensation | 17.8 | 26.5 | |
Amortization of debt issuance costs and accretion of debt discount | 15 | 14.2 | |
Amortization of discount and premium on investments, net | 0.8 | 0.8 | |
Gain on sale of investments | (135.4) | 0 | |
Other | 3.1 | (0.2) | |
Changes in operating assets and liabilities, net of impact of Lumentum distribution: | |||
Accounts receivable | (21.2) | (6.1) | |
Inventories | (0.6) | (6.5) | |
Other current and non-currents assets | (7.1) | 2.6 | |
Accounts payable | (9.8) | (10.9) | |
Income taxes payable | 3.7 | 15.3 | |
Deferred revenue, current and non-current | (16.9) | 11.8 | |
Deferred taxes, net | (0.9) | 7.4 | |
Accrued payroll and related expenses | (9.3) | (11.4) | |
Accrued expenses and other current and non-current liabilities | 32.6 | (18.4) | |
Net cash provided by (used in) operating activities | 28.9 | (1.3) | |
INVESTING ACTIVITIES: | |||
Purchases of available-for-sale investments | (373) | (185.6) | |
Maturities of available-for-sale investments | 201.2 | 250.3 | |
Sales of available-for-sale investments | 234.3 | 71.9 | |
Changes in restricted cash | 0.9 | 14.7 | |
Capital expenditures | (20.1) | (19.4) | |
Proceeds from the sale of assets | 2.8 | 3.4 | |
Acquisition of a business | 0 | (0.9) | |
Net cash provided by investing activities | 46.1 | 134.4 | |
FINANCING ACTIVITIES: | |||
Proceeds from sale of Lumentum Holdings Inc. Series A Preferred Stock | 0 | 35.8 | |
Cash contribution to Lumentum Holdings Inc. | 0 | (136.7) | |
Repurchase and retirement of common stock | (39.7) | (40) | |
Payment of financing obligations | (0.4) | (1.3) | |
Proceeds from exercise of employee stock options and employee stock purchase plan | 4 | 0.8 | |
Net cash used in financing activities | (36.1) | (141.4) | |
Effect of exchange rates on cash and cash equivalents | (16.1) | (10.6) | |
Net increase (decrease) in cash and cash equivalents | 22.8 | (18.9) | |
Cash and cash equivalents at the beginning of the period | 482.9 | 347.9 | [1] |
Cash and cash equivalents at the end of the period | $ 505.7 | $ 329 | |
[1] | Cash and cash equivalents at June 27, 2015 included $13.4 million in current assets of the discontinued operations of Lumentum Holdings Inc. |
CONSOLIDATED STATEMENTS OF CAS7
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Millions | Jun. 27, 2015USD ($) |
Spinoff | Lumentum | |
Cash and cash equivalents included in discontinued operations | $ 13.4 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation The financial information for Viavi Solutions Inc. (“Viavi” also referred to as “the Company”, “we”, “our” and “us”) as of December 31, 2016 and for the three and six months ended December 31, 2016 and January 2, 2016 is unaudited, and includes all normal and recurring adjustments Company management (“Management”) considers necessary for a fair statement of the financial information set forth herein, in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, such information does not include all of the information and footnotes required by U.S. GAAP for annual consolidated financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended July 2, 2016 . The balance sheet as of July 2, 2016 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The results for the three and six months ended December 31, 2016 and January 2, 2016 may not be indicative of results for the fiscal year ending July 1, 2017 or any future periods. Fiscal Years The Company utilizes a 52 - 53 week fiscal year ending on the Saturday closest to June 30th. The Company’s fiscal 2017 is a 52 -week year ending on July 1, 2017 . The Company’s fiscal 2016 was a 53 -week year ending on July 2, 2016 . Lumentum Separation On August 1, 2015 (the “Separation Date”), Viavi completed the distribution of approximately 80.1% of the outstanding shares of Lumentum Holdings Inc. (“Lumentum”) common stock (the “Distribution”). Concurrent with the Distribution, JDSU was renamed Viavi Solutions Inc. and, at the time of the Distribution, retained ownership of approximately 19.9% of Lumentum’s outstanding shares. Lumentum was formed to hold Viavi’s communications and commercial optical products business segment (“CCOP”) and the WaveReady product line and, as a result of the Distribution, is now an independent public company trading under the symbol “LITE” on The Nasdaq Stock Market (“NASDAQ”). The Distribution was made to Viavi’s stockholders of record as of the close of business on July 27, 2015 (the “Record Date”), who received one share of Lumentum common stock for every five shares of Viavi common stock held as of the close of business on the Record Date and not sold prior to August 4, 2015, the ex-dividend date. The historical results of operations and the financial position have been recasted to present the Lumentum business as discontinued operations as described in “ Note 3. Discontinued Operations .” Unless noted otherwise, discussion in the Notes to Consolidated Financial Statements pertain to continuing operations. Principles of Consolidation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements, the reported amount of Net revenues and expenses and the disclosure of commitments and contingencies during the reporting periods. The Company bases estimates on historical experience and on various assumptions about the future believed to be reasonable based on available information. The Company’s reported financial position or results of operations may be materially different under changed conditions or when using different estimates and assumptions, particularly with respect to significant accounting policies. If estimates or assumptions differ from actual results, subsequent periods are adjusted to reflect more current information. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 6 Months Ended |
Dec. 31, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently Issued Accounting Pronouncements | Note 2. Recently Issued Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued guidance that will eliminate the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, impairment charge will be based on the excess of a reporting unit's carrying amount over its fair value. The guidance is effective for the Company in the first quarter of fiscal 2021. Early adoption is permitted. The Company does not anticipate the adoption of this guidance will have a material impact on its consolidated financial statements, absent any goodwill impairment. In November 2016, the FASB issued guidance that will require that the amounts generally described as restricted cash and restricted cash equivalents would be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows. The new guidance also requires certain disclosures to supplement the statement of cash flows. The guidance is effective for the Company in the first quarter of fiscal 2019. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In October 2016, the FASB issued guidance that requires entities to recognize at the transaction date the income tax consequences of intra-entity transfer of an asset other than inventory. The guidance is effective for the Company in the first quarter of fiscal 2019. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In June 2016, the FASB issued guidance that changes the accounting for recognizing impairments of financial assets. Under the new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The new guidance also modifies the impairment models for available for-sale debt securities and for purchased financial assets with credit deterioration since their origination. The guidance is effective for the Company in the first quarter of fiscal 2021 and earlier adoption is permitted. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In March 2016, the FASB issued guidance which simplifies several aspects of accounting for share-based payment award transactions including income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The guidance is effective for the Company in the first quarter of fiscal 2018 and earlier adoption is permitted. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In February 2016, the FASB issued guidance related to how an entity should recognize lease assets and lease liabilities. The guidance specifies that an entity who is a lessee under lease agreements should recognize lease assets and lease liabilities for those leases classified as operating leases under previous FASB guidance. Accounting for leases by lessors is largely unchanged under the new guidance. The guidance requires a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The guidance is effective for the Company in the first quarter of fiscal 2020. While the Company is not yet in a position to assess the full impact of the application of the new guidance, the Company expects that the impact of recording lease liabilities and the corresponding right-to-use assets may have a significant impact on its total assets and total liabilities on the consolidated balance sheets. In May 2014, the FASB issued new authoritative guidance related to revenue recognition. This guidance will replace current U.S. GAAP guidance on this topic and eliminate industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance allows for either full retrospective adoption or modified retrospective adoption. The FASB deferred the effective date for this guidance by one year to December 15, 2017 for annual reporting periods beginning after such date. Earlier application of this guidance is permitted. In accordance with the deferred effective date, the Company is required to adopt the new guidance in the first quarter of fiscal 2019. The Company does not intend to adopt the new guidance early and is continuing to evaluate the impact of this new accounting guidance and the transition alternatives on its consolidated financial statements and related disclosures. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 3. Discontinued Operations Lumentum Separation On August 1, 2015 , the Company completed the separation of the Lumentum business (the “Separation”) and made a tax-free distribution of approximately 80.1% of the outstanding shares of Lumentum common stock to Viavi shareholders who received one share of Lumentum common stock for every five shares of Viavi common stock held as of the close of business on July 27, 2015 (the “Record Date”) and not sold prior to August 4, 2015 (the “ex-dividend date”). In connection with the Separation Viavi agreed to contribute $137.6 million all of which was contributed during fiscal 2016. As of the Distribution, Viavi retained ownership of approximately 19.9% , or 11.7 million shares, of Lumentum’s outstanding shares. Lumentum was formed to hold Viavi’s CCOP business and the WaveReady product line. As a result of the Distribution, Lumentum is now an independent public company. The Company agreed not to liquidate the retained shares during the first six months following the Distribution. However, in connection with a private letter ruling from the Internal Revenue Service, the Company committed to liquidate these shares within three years from the Distribution. As of December 31, 2016 , the Company owns approximately 1.7 million shares, of Lumentum’s common stock. Refer to “ Note 7. Investments, Forward Contracts and Fair Value Measurements ” for more information. As the separation of the Lumentum business represented a strategic shift that had and will have a major effect on the Company’s operations and financial results, the results of operations of the Lumentum business are presented separately as discontinued operations for the three and six months ended January 2, 2016 in accordance with the authoritative guidance. As of the Separation Date, Lumentum became a stand-alone public company that separately reports its financial results. Due to the difference between the basis of presentation for discontinued operations and the basis of presentation as a stand-alone company, the financial results of Lumentum included within discontinued operations for the Company may not be indicative of actual financial results of Lumentum as a stand-alone company. The removal of Lumentum’s net assets and equity related adjustments upon the Separation are presented as an increase of Viavi's accumulated deficit and represents a non-cash financing activity, excluding the cash transferred. Refer to “ Note 14. Stock-Based Compensation ” for information on modifications to stock-based compensation awards as a result of the Distribution. The following table summarizes results from discontinued operations of the Lumentum business included in the condensed Consolidated Statement of Operations (in millions) : Six Months Ended (1) January 2, 2016 Net revenues $ 66.5 Cost of revenues 49.7 Amortization of acquired technologies 0.6 Gross profit 16.2 Operating expenses: Research and development 12.5 Selling, general and administrative 24.0 Restructuring charges 0.1 Total operating expenses 36.6 Loss from operations (20.4 ) Interest and other income (expense), net 0.5 Loss before income taxes (19.9 ) Provision for income taxes 30.5 Net loss from discontinued operations $ (50.4 ) (1) Net income from discontinued operations for the three months ended January 2, 2016 was $ 3.0 million comprised of costs to complete the separation offset by a benefit from income taxes from discontinued operations of $4.5 million . No income or expense has been recorded relating to the Lumentum business after the separation from Viavi on August 1, 2015 . During the six months ended January 2, 2016 , the income tax provision for discontinued operations of $30.5 million , included approximately $5.6 million cash taxes that were due to federal and state authorities as a result of the Separation. In addition, approximately $25.2 million of the income tax provision for discontinued operations related to the income tax intraperiod tax allocation rules in relation to continuing operations and other comprehensive income. Net income (loss) from discontinued operations also includes other costs incurred by the Company to separate Lumentum. These costs include transaction charges, advisory and consulting fees. Net income (loss) from discontinued operations includes transaction, advisory and other costs to effect the separation of $1.5 million and $15.5 million for the three and six months ended January 2, 2016 , respectively. The following table presents supplemental cash flow information: depreciation expense, amortization expense, stock based compensation expense and capital expenditures of the Lumentum business (in millions) : Six Months Ended (1) January 2, 2016 Operating activities: Depreciation expense $ 3.7 Amortization expense 0.6 Stock-based compensation expense 1.6 Investing activities: Capital expenditures $ 5.8 (1) No depreciation expense, amortization expense, stock based compensation expense and capital expenditures relating to the Lumentum business are presented after the Separation Date. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 4. Earnings Per Share The following table sets forth the computation of basic and diluted net income (loss) per share ( in millions, except per share data ): Three Months Ended Six Months Ended December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016 Numerator: Income (loss) from continuing operations, net of taxes $ 49.2 $ 1.0 $ 127.2 $ (14.7 ) Income (loss) from discontinued operations, net of taxes — 3.0 — (50.4 ) Net income (loss) $ 49.2 $ 4.0 $ 127.2 $ (65.1 ) Denominator: Weighted-average number of common shares outstanding Basic 230.5 234.9 231.4 235.5 Effect of dilutive securities from stock-based benefit plans 3.7 2.2 4.4 — Diluted 234.2 237.1 235.8 235.5 Net income (loss) per share - basic: Continuing operations $ 0.21 $ 0.01 $ 0.55 $ (0.06 ) Discontinued operations — 0.01 — (0.22 ) Net income (loss) per share $ 0.21 $ 0.02 $ 0.55 $ (0.28 ) Net income (loss) per share - diluted: Continuing operations $ 0.21 $ 0.01 $ 0.54 $ (0.06 ) Discontinued operations — 0.01 $ — $ (0.22 ) Net income (loss) per share $ 0.21 $ 0.02 $ 0.54 $ (0.28 ) The following table sets forth the weighted-average potentially dilutive securities excluded from the computation of the diluted net income (loss) per share because their effect would have been anti-dilutive ( in millions ): Three Months Ended Six Months Ended December 31, 2016 (2) January 2, 2016 (2) December 31, 2016 (2) January 2, 2016 (1)(2) Stock options and ESPP 1.5 0.9 1.6 3.4 Restricted Stock Units 0.2 4.5 — 11.0 Total potentially dilutive securities 1.7 5.4 1.6 14.4 (1) As the Company incurred a net loss from continuing operations in the period, potential dilutive securities from employee stock options, employee stock purchase plan (“ESPP”) and Restricted Stock Units (“RSUs”) have been excluded from the diluted net loss per share computations as their effects were deemed anti-dilutive. (2) The Company’s 0.625% Senior Convertible 2033 Notes are not included in the table above. The par amount of convertible notes is payable in cash equal to the principal amount of the notes plus any accrued and unpaid interest and then the “in-the-money” conversion benefit feature at the conversion price above $11.28 per share is payable in cash, shares of the Company’s common stock or a combination of both at the Company’s election. Refer to “ Note 10. Debts and Letters of Credit ” for more details. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 6 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive (Loss) Income | Note 5. Accumulated Other Comprehensive (Loss) Income The Company’s accumulated other comprehensive (loss) income consists of the accumulated net unrealized gains and losses on available-for-sale investments, foreign currency translation adjustments and change in unrealized components of defined benefit obligations. For the six months ended December 31, 2016 the changes in accumulated other comprehensive (loss) income by component net of tax were as follows ( in millions ): Unrealized gains (losses) on available-for sale investments (1) Foreign currency translation adjustments Change in unrealized components of defined benefit obligations, net of tax (2) Total Beginning balance as of July 2, 2016 $ 104.5 $ (70.1 ) $ (24.4 ) $ 10.0 Other comprehensive income (loss) before reclassification 74.2 (22.2 ) — 52.0 Amounts reclassified from accumulated other comprehensive income (134.2 ) — 0.9 (133.3 ) Net current-period other comprehensive (loss) income (60.0 ) (22.2 ) 0.9 (81.3 ) Ending balance as of December 31, 2016 $ 44.5 $ (92.3 ) $ (23.5 ) $ (71.3 ) (1) Activity before reclassifications to the Consolidated Statements of Operations during the six months ended December 31, 2016 relates to the unrealized gain on the marketable equity securities of Lumentum held by Viavi. The amount reclassified out of accumulated other comprehensive (loss) income relates to the realized gain from the sale of the marketable equity securities of Lumentum. There was no tax impact for the six months ended December 31, 2016 . (2) The amount reclassified out of accumulated other comprehensive income represents the amortization of actuarial losses included as a component of cost of revenues, research and development (“R&D”) and selling, general and administrative expense (“SG&A”) in the Consolidated Statement of Operations for the six months ended December 31, 2016 . There was no tax impact for the six months ended December 31, 2016 . Refer to “ Note 15. Employee Pension and Other Benefit Plans ” for more details on the computation of net periodic cost for pension plans. |
Balance Sheet and Other Details
Balance Sheet and Other Details | 6 Months Ended |
Dec. 31, 2016 | |
Balance Sheet and Other Details [Abstract] | |
Balance Sheet and Other Details | Note 6. Balance Sheet and Other Details Accounts receivable reserves and allowances The components of accounts receivable reserves and allowances were as follows ( in millions ): July 2, 2016 Charged to Costs and Expenses Adjustments (1) December 31, 2016 Allowance for doubtful accounts $ 2.2 $ 0.1 $ (0.6 ) $ 1.7 Allowance for sales returns 2.5 1.7 (2.3 ) 1.9 Total accounts receivable reserves $ 4.7 $ 1.8 $ (2.9 ) $ 3.6 (1) Represents the effect of currency translation adjustments and write-offs of uncollectible accounts, net of recoveries. Inventories, net The components of Inventories, net were as follows ( in millions ): December 31, 2016 July 2, 2016 Finished goods $ 24.7 $ 29.1 Work in process 9.3 7.5 Raw materials 13.2 14.8 Inventories, net $ 47.2 $ 51.4 Prepayments and other current assets The components of Prepayments and other current assets were as follo ws ( in millions ): December 31, 2016 July 2, 2016 Prepayments $ 10.5 $ 10.4 Other current assets 37.9 21.7 Prepayments and other current assets $ 48.4 $ 32.1 Other current liabilities The components of Other current liabilities were as follows ( in millions ): December 31, 2016 July 2, 2016 Customer prepayments 36.0 0.4 Foreign exchange forward contract 9.6 — Restructuring accrual 6.1 13.3 Income tax payable 5.7 3.3 VAT liabilities 3.6 2.3 Warranty accrual 2.7 2.6 Deferred compensation plan 2.5 2.4 Other 4.8 6.7 Other current liabilities $ 71.0 $ 31.0 Other non-current liabilities The components of Other non-current liabilities were as follo ws ( in millions ): December 31, 2016 July 2, 2016 Pension and post-employment benefits $ 97.1 $ 103.0 Financing obligation 28.0 28.7 Long-term deferred revenue 17.4 22.7 Other 23.6 24.7 Other non-current liabilities $ 166.1 $ 179.1 |
Investments, Forward Contracts
Investments, Forward Contracts and Fair Value Measurements | 6 Months Ended |
Dec. 31, 2016 | |
Investments and Fair Value Measurements [Abstract] | |
Investments, Forward Contracts and Fair Value Measurements | Note 7. Investments, Forward Contracts and Fair Value Measurements The Company’s investments in marketable debt and equity securities were primarily classified as available-for-sale securities. As of December 31, 2016 , the Company’s available-for-sale securities were as follows ( in millions ): Amortized Cost/ Carrying Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt securities: U.S. treasuries $ 67.6 $ — $ (0.1 ) $ 67.5 U.S. agencies 36.5 — (0.1 ) 36.4 Municipal bonds and sovereign debt instruments 3.5 — — 3.5 Asset-backed securities 62.9 — (0.3 ) 62.6 Corporate securities 302.3 — (0.4 ) 301.9 Certificate of deposits 6.0 — — 6.0 Total debt securities 478.8 — (0.9 ) 477.9 Marketable equity securities 14.3 50.0 — 64.3 Total available-for-sale securities $ 493.1 $ 50.0 $ (0.9 ) $ 542.2 The Company generally classifies debt securities as cash equivalents, short-term investments or other non-current assets based on the stated maturities; however, certain securities with stated maturities of longer than twelve months which are highly liquid and available to support current operations are also classified as short-term investments. As of December 31, 2016 , of the total fair value, $46.1 million was classified as cash equivalents, $431.2 million was classified as short-term investments and $0.6 million was classified as other non-current assets. Marketable equity securities consist of the Company’s ownership of 1.7 million shares of Lumentum common stock remaining as of December 31, 2016 in connection with the August 1, 2015 separation. Refer to “ Note 3. Discontinued Operations ” for more information. These securities are stated at fair value, with unrealized gains and losses reported in other comprehensive income (loss), net of tax and are classified as short-term investments on the Consolidated Balance Sheet as of December 31, 2016 at $64.3 million . The Company sold 1.7 million and 5.6 million shares during the three and six months ended December 31, 2016 , respectively and recognized gross realized gains of $53.8 million and $135.3 million , reflected in "Gain on sale of investments" in the Company’s Consolidated Statements of Operations. The sale resulted in no tax effect. The realized gain is also reflected as a reconciling item to net income in the operating activities section of the Consolidated Statements of Cash Flows, while the cash proceeds received are reflected in “Sales of available-for-sale investments” within the investing activities section. In addition to the amounts presented above, as of December 31, 2016 , the Company’s short-term investments classified as trading securities related to the deferred compensation plan were $2.5 million , of which $0.3 million was invested in debt securities, $0.8 million was invested in money market instruments and funds and $1.4 million was invested in equity securities. Trading securities are reported at fair value, with the unrealized gains or losses resulting from changes in fair value recognized in Interest and other income (expense), net. During the three and six months ended December 31, 2016 and January 2, 2016 , the Company recorded no other-than-temporary impairment charges in each respective period. As of December 31, 2016 , contractual maturities of the Company’s debt securities classified as available-for-sale securities were as follows ( in millions ): Amortized Cost/ Carrying Cost Estimated Fair Value Amounts maturing in less than 1 year $ 327.5 $ 327.4 Amounts maturing in 1 - 5 years 149.3 148.9 Amounts maturing in more than 5 years 2.0 1.6 Total debt available-for-sale securities $ 478.8 $ 477.9 As of July 2, 2016 , the Company’s available-for-sale securities were as follows ( in millions ): Amortized Cost/ Carrying Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt securities: U.S. treasuries $ 46.1 $ — $ — $ 46.1 U.S. agencies 24.9 — — 24.9 Municipal bonds and sovereign debt instruments 2.0 — — 2.0 Asset-backed securities 50.4 0.1 (0.3 ) 50.2 Corporate securities 224.5 0.2 (0.1 ) 224.6 Total debt securities 347.9 0.3 (0.4 ) 347.8 Marketable equity securities 62.1 109.2 — 171.3 Total debt available-for-sale securities $ 410.0 $ 109.5 $ (0.4 ) $ 519.1 As of July 2, 2016 , of the total fair value, $36.1 million was classified as cash equivalents, $311.1 million was classified as short-term investments and $0.6 million was classified as other non-current assets. Marketable equity securities consist of the Company’s ownership of 7.2 million shares of Lumentum common stock remaining as of July 2, 2016 in connection with the Separation. These securities are stated at fair value, with change in unrealized gains and losses reported in other comprehensive income, net of tax and are classified as short-term investments on the Consolidated Balance Sheet as of July 2, 2016 at $171.3 million. In addition to the amounts presented above, as of July 2, 2016 , the Company’s short-term investments classified as trading securities, related to the deferred compensation plan, were $2.4 million , of which $0.3 million was invested in debt securities, $0.8 million was invested in money market instruments and funds and $1.3 million was invested in equity securities. Trading securities are reported at fair value, with the unrealized gains or losses resulting from changes in fair value recognized in Interest and other income (expense), net. Fair Value Measurements Assets measured at fair value as of December 31, 2016 and July 2, 2016 are summarized below ( in millions ): Fair value measurement as of Fair value measurement as of December 31, 2016 July 2, 2016 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Assets: Debt available-for-sale securities U.S. treasuries $ 67.5 $ 67.5 $ — $ 46.1 $ 46.1 $ — U.S. agencies 36.4 — 36.4 24.9 — 24.9 Municipal bonds and sovereign debt instruments 3.5 — 3.5 2.0 — 2.0 Asset-backed securities 62.6 — 62.6 50.2 — 50.2 Corporate securities 301.9 — 301.9 224.6 — 224.6 Certificate of deposits 6.0 — 6.0 — — — Total debt available-for-sale securities 477.9 67.5 410.4 347.8 46.1 301.7 Marketable equity securities 64.3 64.3 — 171.3 171.3 — Money market funds 283.1 283.1 — 274.4 274.4 — Trading securities 2.5 2.5 — 2.4 2.4 — Foreign currency forward contracts 4.0 — 4.0 — — — Total assets (1) $ 831.8 $ 417.4 $ 414.4 $ 795.9 $ 494.2 $ 301.7 Liability: Foreign currency forward contracts 9.6 — 9.6 — — — Total liabilities (2) $ 9.6 $ — $ 9.6 $ — $ — $ — (1) $ 314.0 million in cash and cash equivalents, $498.0 million in short-term investments, $11.0 million in restricted cash, $ 4.0 million in prepayments and other current assets, and $4.8 million in other non-current assets on the Company’s Consolidated Balance Sheets as of December 31, 2016 . $295.4 million in cash and cash equivalents, $484.7 million in short-term investments, $11.3 million in restricted cash, and $4.5 million in other non-current assets on the Company’s Consolidated Balance Sheets as of July 2, 2016 . (2) $ 9.6 million in other current liabilities on the Company’s Consolidated Balance Sheets as of December 31, 2016 . Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. There is an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the assumptions about the factors that market participants would use in valuing the asset or liability. The Company’s cash and investment instruments are classified within Level 1 or Level 2 of the fair value hierarchy based on quoted prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. • Level 1 includes financial instruments for which quoted market prices for identical instruments are available in active markets. Level 1 assets of the Company include money market funds, U.S. Treasury securities and marketable equity securities as they are traded with sufficient volume and frequency of transactions. • Level 2 includes financial instruments for which the valuations are based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. Level 2 instruments of the Company generally include certain U.S. and foreign government and agency securities, commercial paper, corporate and municipal bonds and notes, asset-backed securities, and foreign currency forward contracts. To estimate their fair value, the Company utilizes pricing models based on market data. The significant inputs for the valuation model usually include benchmark yields, reported trades, broker and dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data, and industry and economic events. • Level 3 includes financial instruments for which fair value is derived from valuation based on inputs that are unobservable and significant to the overall fair value measurement. As of December 31, 2016 and July 2, 2016 , the Company did not hold any Level 3 investment securities. Non-Designated Foreign Currency Forward Contracts The Company has foreign subsidiaries that operate and sell the Company’s products in various markets around the world. As a result, the Company is exposed to foreign exchange risks. The Company utilizes foreign exchange forward contracts and other instruments to manage foreign currency risk associated with foreign currency denominated monetary assets and liabilities, primarily certain short-term intercompany receivables and payables, and to reduce the volatility of earnings and cash flows related to foreign-currency transactions. The Company does not use these foreign currency forward contracts for trading purposes. As of December 31, 2016 and July 2, 2016 , the notional amounts of the forward contracts the Company held to purchase foreign currencies were $117.7 million and $110.0 million , respectively, and the notional amounts of forward contracts the Company held to sell foreign currencies were $32.8 million and $55.2 million , respectively. The fair values of the Company’s outstanding foreign currency forward contracts were not material as of July 2, 2016 . As of December 31, 2016 , the Company had forward contracts that were effectively closed but not settled with the counterparties by quarter end; therefore, the fair value of these contracts of $ 4.0 million and $9.6 million is reflected as prepayments and other current assets and other current liabilities in the Consolidated Balance Sheets as of December 31, 2016 , respectively. The change in the fair value of foreign currency forward contracts is recorded as gain or loss in the Company’s Consolidated Statements of Operations as a component of Interest and other income (expense), net. The cash flows related to the settlement of foreign currency forward contracts are classified as operating activities. The losses on foreign exchange forward contracts were $5.6 million and $5.3 million for the three and six months ended December 31, 2016 , respectively. The losses on foreign exchange forward contracts were $4.4 million and $3.8 million for the three and six months ended January 2, 2016 , respectively. |
Goodwill
Goodwill | 6 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 8. Goodwill The following table presents the changes in goodwill allocated to the Company’s reportable segments (in millions) : Network Enablement Optical Security and Performance Products Total Balance as of July 2, 2016 $ 143.8 $ 8.3 $ 152.1 Currency translation adjustments (2.4 ) — (2.4 ) Balance as of December 31, 2016 $ 141.4 $ 8.3 $ 149.7 The Company reviews goodwill for impairment during the fourth quarter of each fiscal year, or more frequently if events or circumstances indicate that an impairment loss may have occurred. In the fourth quarter of fiscal 2016 , the Company completed the annual impairment test of goodwill with no goodwill impairments for the NE and OSP reporting units, and recorded a goodwill impairment charge for the full amount of SE’s goodwill balance of $91.4 million . There were no events or changes in circumstances which triggered an impairment review during the three and six months ended December 31, 2016 . |
Acquired Developed Technology a
Acquired Developed Technology and Other Intangibles | 6 Months Ended |
Dec. 31, 2016 | |
Acquired Developed Technology and Other Intangibles | |
Acquired Developed Technology and Other Intangibles | Note 9. Acquired Developed Technology and Other Intangibles The following tables present details of the Company’s acquired developed technology, customer relationships and other intangibles ( in millions ): As of December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Acquired developed technology $ 365.5 $ (341.8 ) $ 23.7 Customer relationships 94.5 (74.1 ) 20.4 Other 10.8 (10.5 ) 0.3 Total intangibles $ 470.8 $ (426.4 ) $ 44.4 As of July 2, 2016 Gross Carrying Amount Accumulated Amortization Net Acquired developed technology $ 369.3 $ (337.3 ) $ 32.0 Customer relationships 95.6 (68.0 ) 27.6 Other 10.8 (10.5 ) 0.3 Total intangibles $ 475.7 $ (415.8 ) $ 59.9 The following table presents the amortization recorded relating to acquired developed technology, customer relationships and other intangibles ( in millions ): Three Months Ended Six Months Ended December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016 Amortization of acquired developed technologies $ 3.7 $ 4.6 $ 7.5 $ 8.9 Amortization of other intangibles 3.4 3.7 6.9 7.5 Total amortization of intangible assets $ 7.1 $ 8.3 $ 14.4 $ 16.4 Based on the carrying amount of acquired developed technology, customer relationships and other intangibles as of December 31, 2016 , and assuming no future impairment of the underlying assets, the estimated future amortization is as follows ( in millions ): Fiscal Years Remainder of 2017 $ 13.6 2018 19.8 2019 9.3 2020 1.4 2021 0.3 Thereafter — Total amortization $ 44.4 The acquired developed technology, customer relationships and other intangibles balance are adjusted quarterly to record the effect of currency translation adjustments. |
Debts and Letters of Credit
Debts and Letters of Credit | 6 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debts and Letters of Credit | Note 10. Debts and Letters of Credit As of December 31, 2016 and July 2, 2016 , the Company’s long-term debt on the Consolidated Balance Sheets represented the carrying amount of the liability component, net of unamortized debt discounts and issuance cost, of the 0.625% Senior Convertible Notes as discussed below. The following table presents the carrying amounts of the liability and equity components ( in millions ): December 31, 2016 July 2, 2016 Principal amount of 0.625% Senior Convertible Notes $ 650.0 $ 650.0 Unamortized discount of liability component (47.8 ) (61.7 ) Unamortized debt issuance cost (1) $ (3.9 ) $ (5.0 ) Carrying amount of liability component $ 598.3 $ 583.3 Carrying amount of equity component (2) $ 134.4 $ 134.4 (1) In April 2015 , the Financial Accounting Standards Board ("FASB") issued new authoritative guidance to simplify the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding liability, consistent with debt discounts or premiums. This guidance was effective for the Company in the first quarter of fiscal 2017 for its convertible debt, and was applied retrospectively for all periods reported. (2) Included in Accumulated paid-in-capital on the Consolidated Balance Sheets. The Company was in compliance with all debt covenants and held no short term debt as of December 31, 2016 and July 2, 2016 . 0.625% Senior Convertible Notes (“2033 Notes”) On August 21, 2013, the Company issued $650.0 million aggregate principal amount of 0.625% Senior Convertible Notes due 2033 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The proceeds from the 2033 Notes amounted to $636.3 million after issuance costs. The 2033 Notes are an unsecured obligation of the Company and bear interest at an annual rate of 0.625% payable in cash semi-annually in arrears on February 15 and August 15 of each year. The 2033 Notes mature on August 15, 2033 unless earlier converted, redeemed or repurchased. Following the Separation on August 1, 2015 , the conversion price per share was adjusted pursuant to the terms of the 2033 Notes relating to the occurrence of the Separation. Effective as of the end of the business day on August 17, 2015, the initial conversion price per share was adjusted to $11.28 per share of the Company’s common stock traded on NASDAQ under the ticker symbol “VIAV.” The 2033 Notes and its terms are described in “Note 11. Debts and Letters of Credit” of the Company’s Annual Report on Form 10-K for the year ended July 2, 2016 . Based on quoted market prices as of December 31, 2016 and July 2, 2016 , the fair value of the 2033 Notes was approximately $672.0 million and $633.0 million . The 2033 Notes are classified within Level 2 as they are not actively traded in markets. The following table presents the effective interest rate and the interest expense for the contractual interest and the accretion of debt discount ( in millions, except for the effective interest rate ): Three Months Ended Six Months Ended December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016 Effective interest rate 5.4 % 5.4 % 5.4 % 5.4 % Interest expense-contractual interest $ 1.0 $ 1.0 $ 2.0 $ 2.0 Accretion of debt discount 7.0 6.6 13.9 13.2 Outstanding Letters of Credit As of December 31, 2016 , the Company had 12 standby letters of credit totaling $15.2 million . |
Restructuring and Related Charg
Restructuring and Related Charges | 6 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Charges | Note 11. Restructuring and Related Charges The Company has initiated various strategic restructuring events primarily intended to reduce its costs, consolidate its operations, rationalize the manufacturing of its products and align its businesses in response to market conditions. As of December 31, 2016 and July 2, 2016 , the Company’s total restructuring accrual was $9.4 million and $18.0 million , respectively. During the three and six months ended December 31, 2016 the Company recorded restructuring and related charges of $1.8 million and $1.8 million , respectively. During the three and six months ended January 2, 2016 the Company recorded restructuring and related charges of $1.4 million and $1.8 million , respectively. The Company’s restructuring charges can include severance and benefit costs to eliminate a specified number of positions, facilities and equipment costs to vacate facilities and consolidate operations, and lease termination costs. The timing of associated cash payments is dependent upon the type of restructuring charge and can extend over multiple periods. Summary of Restructuring Plans The adjustments to the accrued restructuring expenses related to all of the Company’s restructuring plans described below for the three and six months ended December 31, 2016 were as follows (in millions) : Balance Six Months Ended December 31, 2016 Charges (Benefits) Cash Settlements Non-cash Settlements and Other Adjustments Balance December 31, 2016 Three Fiscal 2017 Plan Focused NSE Restructuring Plan (1) $ — $ 1.4 $ — $ — $ 1.4 $ 1.4 Other Plan (2) — 0.4 (0.4 ) — — 0.4 Fiscal 2016 Plan NE, SE and Shared Services Agile Restructuring Plan (1) (2) 8.6 0.1 (7.3 ) — 1.4 — NE and SE Agile Restructuring Plan (1) 0.8 — (0.3 ) — 0.5 — Fiscal 2015 Plan NE, SE and Shared Service Separation Restructuring Plan (1)(2) 1.4 (0.2 ) (0.9 ) — 0.3 — Plans Prior to Fiscal 2015 NE Product Strategy Restructuring Plan (1) 1.5 — (0.2 ) (0.1 ) 1.2 — NE Lease Restructuring Plan (2) 4.0 0.1 (0.8 ) — 3.3 — Other Plans (1)(2) 1.7 — (0.4 ) — 1.3 — Total $ 18.0 $ 1.8 $ (10.3 ) $ (0.1 ) $ 9.4 $ 1.8 (1) Plan type includes workforce reduction cost. (2) Plan type includes lease exit cost. As of December 31, 2016 and July 2, 2016 , $3.3 million and $4.7 million , respectively, of our restructuring liability was long-term in nature and included as a component of Other non-current liabilities, with the remaining short-term portion included as a component of Other current liabilities on the Consolidated Balance Sheets. Fiscal 2017 Plans Focused NSE Restructuring Plan During the second quarter of fiscal 2017, as part of the strategy to narrow the scope of the SE business and reducing cost by streamlining NSE operations, the Company entered into a separation agreement with two key executives and as a result, a restructuring charge of $1.4 million was recorded for severance and employee benefits. Payments related to the severance and benefits accrual are expected to be paid in the third quarter of fiscal 2017 . Also refer to “Note 18. Subsequent Events” for the approval of the restructuring and global workforce reduction plan in the third quarter of fiscal 2017. Fiscal 2016 Plans NE, SE and Shared Service Agile Restructuring Plan During the fourth quarter of fiscal 2016, Management approved a plan within the NE and SE business segment and Shared Services function for organizational alignment and consolidation as part of Viavi’s continued commitment for a more cost effective organization. As a result approximately 180 employees primarily in manufacturing, R&D and SG&A functions located in North America, Latin America, Europe and Asia were impacted. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the fourth quarter of fiscal 2017 . NE and SE Agile Restructuring Plan During the sec ond quarter of fiscal 2016, Management approved a plan primarily impacting the NE and SE business segments as part of Viavi’s ongoing commitment for an agile and more efficient operating structure. As a result approximately 40 employees primarily in manufacturing, R&D and SG&A functions located in North America, Latin America, Europe and Asia were impacted. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the third quarter of fiscal 2017 . Fiscal 2015 Plans NE, SE and Shared Service Separation Restructuring Plan During the second, third and fourth quarters of fiscal 2015, Management approved a plan to eliminate certain positions in its shared services functions in connection with the Company’s plan to split into two separate public companies. Further, Management consolidated its operations, sales and R&D organizations and eliminated positions within the NE and SE segments to align to the Company’s product market strategy and lower manufacturing costs in connection with the separation. As a result, approximately 330 employees in manufacturing, R&D and SG&A functions located in North America, Latin America, Europe and Asia were impacted. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the third quarter of fiscal 2018 . During the fourth quarter of fiscal 2015, Management also approved a plan in the NE and SE segment to exit the space in Roanoke, Virginia. As of July 2, 2016 , the Company exited the workspace in Roanoke under the plan. The fair value of the remaining contractual obligations as of December 31, 2016 was $0.1 million. Payments related to the Roanoke lease costs are expected to be paid by the end of the fourth quarter of fiscal 2017 . Plans Prior to Fiscal 2015 NE Product Strategy Restructuring Plan During the third quarter of fiscal 2014, Management approved a NE plan to realign its services, support and product resources in response to market conditions in the mobile assurance market and to increase focus on software products and next generation solutions through acquisitions and R&D. As a result, approximately 60 employees primarily in SG&A and manufacturing functions located in North America, Latin America, Asia and Europe were impacted. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the first quarter of fiscal 2020 . NE Lease Restructuring Plan During the second quarter of fiscal 2014, Management approved a NE plan to exit the remaining space in Germantown, Maryland. As of June 28, 2014, the Company exited the space in Germantown under the plan. The fair value of the remaining contractual obligations, net of sublease income, as of December 31, 2016 was $3.3 million . Payments related to the Germantown lease costs are expected to be paid by the end of the second quarter of fiscal 2019 . As of December 31, 2016 , the restructuring accrual for other plans that commenced prior to fiscal year 2015 was $1.3 million , which consists of immaterial accruals from various restructuring plans. |
Income Taxes
Income Taxes | 6 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12. Income Taxes The Company recorded an income tax expense of $ 5.8 million and $ 11.5 million related to the income from continuing operations for the three and six months ended months ended December 31, 2016 , respectively. The Company recorded an income tax expense of $ 1.1 million and $ 4.0 million related to the income (loss) from continuing operations for the three and six months ended January 2, 2016 , respectively. The income tax expense related to the income (loss) from continuing operations recorded for the three and six months ended December 31, 2016 and January 2, 2016 primarily relates to income tax in certain foreign and state jurisdictions based on the Company’s forecasted pre-tax income or loss for the respective year. In addition, for the three and six months ended January 2, 2016, the Company’s income tax provision includes a tax benefit of $8.8 million and $ 22.2 million , respectively, related to the income tax intraperiod tax allocation rules for discontinued operations and other comprehensive income. The income tax expense related to the loss from continuing operations for the six months ended January 2, 2016 included a tax expense of $8.9 million related to a one-time increase in valuation allowance associated with deferred tax assets transferred to Lumentum in connection with the Separation. The income tax expense related to the income (loss) from continuing operations recorded differs from the expected tax expense (benefit) that would be calculated by applying the federal statutory rate to the Company’s income (loss) from continuing operations before taxes primarily due to the changes in valuation allowance for deferred tax assets attributable to the Company’s domestic and foreign income (loss) from continuing operations, the income tax benefit recorded in continuing operations under the income tax intraperiod tax allocation rules, and the increase in valuation allowance associated with deferred tax assets transferred to Lumentum in connection with the separation. As of December 31, 2016 and July 2, 2016 , the Company’s unrecognized tax benefits totaled $42.3 million and $41.7 million , respectively, and are included in deferred taxes and other non-current tax liabilities, net. The Company had $2.3 million accrued for the payment of interest and penalties at December 31, 2016 . The unrecognized tax benefits that may be recognized during the next twelve months are approximately $1.0 million . |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | Note 13. Stockholders' Equity Repurchase of Common Stock In September 2016 , the Board of Directors increased the Company’s previously authorized stock repurchase program from $100 million to $150 million . Under the revised repurchase authorization, the Company may repurchase up to $150 million of the Company’s common stock from time to time at the discretion of the Company’s management. This stock repurchase authorization expires on December 31, 2017. During the three months ended December 31, 2016 , the Company repurchased approximately 1.9 million shares of its common stock for $14.2 million . As of December 31, 2016 , the Company had remaining authorization of $105.7 million for future share repurchases. The number of shares to be repurchased and the timing of such repurchases will be based on several factors, including business and financial market conditions. All common shares repurchased under this program have been canceled and retired. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Note 14. Stock-Based Compensation Overview The impact on the Company’s results of operations of recording stock-based compensation by function for the three and six months ended December 31, 2016 and January 2, 2016 was as follows (in millions): Three Months Ended Six Months Ended December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016 Cost of sales $ 1.0 $ 1.4 $ 2.0 $ 2.6 Research and development 1.6 1.9 3.3 4.7 Selling, general and administrative 6.5 5.6 12.5 17.6 Stock-based compensation $ 9.1 $ 8.9 $ 17.8 $ 24.9 Approximately $0.7 million and $0.9 million of stock-based compensation was capitalized to inventory at December 31, 2016 and January 2, 2016 respectively. Full Value Awards Full Value Awards refer to RSUs and Performance Units that are granted with the exercise price equal to zero and are converted to shares immediately upon vesting. These Full Value Awards are performance-based, time-based or a combination of both and expected to vest over one to four years. The fair value of the time-based Full Value Awards is based on the closing market price of the Company’s common stock on the date of award. During the six months ended December 31, 2016 and January 2, 2016 , the Company granted 3.9 million and 5.3 million RSUs, of which 0.4 million and 0.5 million , respectively, are performance-based RSUs with market conditions (“MSUs”). These MSU shares represent the target amount of grants, and the actual number of shares awarded upon vesting of the MSUs may be higher or lower depending upon the achievement of the relevant market conditions. The majority of MSUs vest in equal annual installments over three years based on the attainment of certain total shareholder return performance measures and the employee’s continued service through the vest date. The aggregate grant-date fair value of MSUs granted during the six months ended December 31, 2016 and January 2, 2016 were estimated to be $3.3 million and $2.9 million , respectively, and was calculated using a Monte Carlo simulation. The remaining 3.5 million and 4.8 million granted during the six months ended December 31, 2016 and January 2, 2016 , respectively, are time-based RSUs. The majority of these time-based RSUs vest over three years , with 33% vesting after one year and the balance vesting quarterly over the remaining two years . As of December 31, 2016 , $47.9 million of unrecognized stock-based compensation cost related to Full Value Awards remains to be amortized. That cost is expected to be recognized over an estimated amortization period of 2.1 years . Full Value Awards are converted into shares upon vesting. Shares equivalent in value to the minimum withholding tax liability on the vested shares are withheld by the Company for the payment of such taxes. During the six months ended December 31, 2016 and January 2, 2016 , the Company paid $7.8 million and $7.8 million , respectively, and classified the payments as operating cash outflows in the Consolidated Statement of Cash Flows. Impact on Stock-based Compensation Due to Separation In connection with the separation of the Lumentum business on August 1, 2015 and in accordance with the Employee Matters Agreement, the Company made certain adjustments to the exercise price and number of shares underlying stock-based compensation awards with the intention of preserving the economic value of the awards for Viavi employees. These adjustments resulted in a modification of equity awards with total incremental stock-based compensation of $13.6 million , to be amortized over the remaining requisite service period from Separation Date to the end of the vesting term. As of December 31, 2016 , $2.4 million of unrecognized stock-based compensation cost remains to be amortized. Valuation Assumptions The Company estimates the fair value of the new MSUs granted using a Monte Carlo simulation based on the assumptions described below for the following periods: Six Months Ended December 31, 2016 January 2, 2016 Volatility of common stock 35.0 % 33.0 % Average volatility of peer companies 54.7 % 52.6 % Average correlation coefficient of peer companies 0.1856 0.0887 Risk-free interest rate 0.8 % 0.8 % |
Employee Pension and Other Bene
Employee Pension and Other Benefit Plans | 6 Months Ended |
Dec. 31, 2016 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Employee Pension and Other Benefit Plans | Note 15. Employee Pension and Other Benefit Plans The Company sponsors significant qualified and non-qualified pension plans for certain past and present employees in the United Kingdom (“U.K.”) and Germany. The Company also is responsible for the non-pension post-retirement benefit obligation assumed from a past acquisition. All of the plans have been closed to new participants and no additional service costs are being accrued, except for certain plans in Germany assumed in connection with acquisitions during fiscal 2010. Benefits are generally based upon years of service and compensation or stated amounts for each year of service. As of December 31, 2016 the U.K. plan was partially funded while the other plans were unfunded. The Company’s policy for funded plans is to make contributions equal to or greater than the requirements prescribed by law or regulation. For unfunded plans, the Company pays the post-retirement benefits when due. During the six months ended December 31, 2016 , the Company contributed $0.6 million to the U.K. plan. The funded plan assets consist primarily of managed investments. The following table presents the components of the net periodic cost for the pension and benefits plans ( in millions ): Three Months Ended Six Months Ended Pension Benefits December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016 Service cost $ 0.1 $ 0.1 $ 0.2 $ 0.2 Interest cost 0.6 0.7 1.0 1.5 Expected return on plan assets (0.3 ) (0.4 ) (0.5 ) (0.8 ) Amortization of net actuarial losses 0.4 0.1 0.9 0.3 Net periodic benefit cost $ 0.8 $ 0.5 $ 1.6 $ 1.2 Both the calculation of the projected benefit obligation and net periodic cost are based upon actuarial valuations. These valuations use participant-specific information such as salary, age, years of service, and assumptions about interest rates, pension increases and other factors. At a minimum, the Company evaluates these assumptions annually and makes changes as necessary. The Company expects to incur cash outlays of approximately $5.9 million related to its defined benefit pension plans during fiscal 2017 to make current benefit payments and fund future obligations. As of December 31, 2016 , approximately $2.2 million had been incurred. These payments have been estimated based on the same assumptions used to measure the Company’s projected benefit obligation at July 2, 2016 . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 16. Commitments and Contingencies Legal Proceedings In June 2016 , the Company received a court decision regarding the validity of an amendment to a pension deed of trust related to one of its foreign subsidiaries which the Company contends contained an error requiring the Company to increase the pension plan’s benefit. The Company had subsequently further amended the deed to rectify the error. The court ruled that the amendment increasing the pension plan benefit was valid until the subsequent amendment. The Company determined that the likelihood of loss to be probable as of July 2, 2016 and accrued GBP 5.7 million , in accordance with authoritative guidance on contingencies. The Company is pursuing an appeal of the court decision and is also pursuing a claim against the U.K. law firm responsible for the error. The Company is subject to a variety of claims and suits that arise from time to time in the ordinary course of our business. While management currently believes that resolving claims against the Company, individually or in aggregate, will not have a material adverse impact on its financial position, results of operations or statement of cash flows, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. Were an unfavorable final outcome to occur, there exists the possibility of a material adverse impact on the Company’s financial position, results of operations or cash flows for the period in which the effect becomes reasonably estimable. Guarantees In accordance with authoritative guidance which requires that upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligation it assumes under that guarantee. In addition, disclosures about the guarantees that an entity has issued, including a tabular reconciliation of the changes of the entity’s product warranty liabilities, are required. The Company from time to time enters into certain types of contracts that contingently require the Company to indemnify parties against third-party claims. These contracts primarily relate to: (i) divestiture agreements, under which the Company may provide customary indemnifications to purchasers of the Company’s businesses or assets; (ii) certain real estate leases, under which the Company may be required to indemnify property owners for environmental and other liabilities, and other claims arising from the Company’s use of the applicable premises; and (iii) certain agreements with the Company’s officers, directors and employees, under which the Company may be required to indemnify such persons for liabilities arising out of their employment relationship. The terms of such obligations vary. Generally, a maximum obligation is not explicitly stated. Because the obligated amounts of these types of agreements often are not explicitly stated, the overall maximum amount of the obligations cannot be reasonably estimated. Historically, the Company has not been obligated to make significant payments for these obligations, and no liabilities have been recorded for these obligations on the consolidated balance sheet as of December 31, 2016 and July 2, 2016 . Product Warranties In general, the Company offers a three -year warranty for most of its products. The Company provides reserves for the estimated costs of product warranties at the time revenue is recognized. The Company estimates the costs of its warranty obligations based on its historical experience of known product failure rates, use of materials to repair or replace defective products and service delivery costs incurred in correcting product failures. In addition, from time to time, specific warranty accruals may be made if unforeseen technical problems arise with specific products. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. The following table presents the changes in the Company’s warranty reserve during fiscal 2017 and fiscal 2016 ( in millions ): Three Months Ended Six Months Ended December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016 Balance as of beginning of period $ 5.2 $ 4.0 $ 4.9 $ 3.7 Provision for warranty 1.6 0.8 3.2 1.7 Utilization of reserve (0.9 ) (0.7 ) (2.0 ) (1.5 ) Adjustments related to pre-existing warranties (including changes in estimates) (0.6 ) 0.2 (0.8 ) 0.4 Balance as of end of period $ 5.3 $ 4.3 $ 5.3 $ 4.3 |
Operating Segments and Geograph
Operating Segments and Geographic Information | 6 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Operating Segments and Geographic Information | Note 17. Operating Segments and Geographic Information The Company evaluates its reportable segments in accordance with the authoritative guidance on segment reporting. The Company’s Chief Executive Officer, Oleg Khaykin, is the Company’s Chief Operating Decision Maker (“CODM”) pursuant to the guidance. The CODM allocates resources to the segments based on their business prospects, competitive factors, net revenue and operating results. The Company is a leading provider of software and hardware platforms and instruments that deliver end-to-end visibility across physical, virtual and hybrid networks. Our solutions provide precise intelligence and actionable insight from across the network ecosystem to optimize networks and support more profitable, higher-performing networks and quicker transition to next-generation technologies for our customers. Viavi is also a leader in anti-counterfeiting solutions for currency authentication and high-value optical components and instruments for diverse government and commercial applications. The Company’s reportable segments are: (i) Network Enablement (“NE”): NE provides testing solutions that access the network to perform build-out and maintenance tasks. These solutions include instruments, software and services to design, build, activate, certify, troubleshoot and optimize networks. The company also offers a range of product support and professional services such as repair, calibration, software support and technical assistance for our products. (ii) Service Enablement (“SE”): SE solutions are embedded systems that yield network, service and application performance data. These solutions—including microprobes and software—monitor, collect and analyze network data to reveal the actual customer experience and to identify opportunities for new revenue streams and network optimization. (iii) Optical Security and Performance Products (“OSP”): OSP provides innovative optical security solutions, with a strategic focus on serving the anti-counterfeiting market through advanced security pigments, thread substrates and printed features for the currency, pharmaceutical and consumer electronic segments. OSP also provides thin-film coating solutions for 3D sensing applications. The CODM manages the Company in two broad business categories: Network and Service Enablement ("NSE") and OSP. NSE operates in two segments, NE and SE, whereas OSP operates as a single segment. The CODM evaluates segment performance of the NSE business based on NE and SE segment gross margin and NSE operating margin as a whole. Operating expenses associated with the NSE business are not allocated to the NE and SE segments within NSE, as they are managed centrally at the business unit level. The CODM evaluates segment performance of the OSP business based on OSP segment operating margin. The Company does not allocate stock-based compensation, acquisition-related charges, amortization of intangibles, restructuring and related charges, impairment of goodwill, non-operating income and expenses, or other non-core operating and non-recurring charges to its segments because Management does not include this information in its measurement of the performance of the operating segments. These items are presented as “Reconciling Items” in the table below. Additionally, the Company does not specifically identify and allocate all assets by operating segment. The segment information for all periods presented has been revised to be comparable with the changes in the Company’s segment reporting measures. Information on reportable segments is as follows (in millions): Three Months Ended December 31, 2016 Network and Service Enablement Network Enablement Service Enablement Network and Service Enablement Optical Security and Performance Products Total Segment Measures Reconciling Items Consolidated GAAP Measures Net revenue $ 117.0 $ 40.6 $ 157.6 $ 48.9 $ 206.5 $ — $ 206.5 Gross profit 74.6 27.1 101.7 28.2 129.9 (5.2 ) 124.7 Gross margin 63.8 % 66.7 % 64.5 % 57.7 % 62.9 % 60.4 % Operating income 6.0 20.9 26.9 (20.2 ) 6.7 Operating margin 3.8 % 42.7 % 13.0 % 3.2 % Three Months Ended January 2, 2016 Network and Service Enablement Network Enablement Service Enablement Network and Service Enablement Optical Security and Performance Products Total Segment Measures Reconciling Items Consolidated GAAP Measures Net revenue $ 136.4 $ 36.9 $ 173.3 $ 58.8 $ 232.1 $ — $ 232.1 Gross profit 90.6 24.5 115.1 32.8 147.9 (6.1 ) 141.8 Gross margin 66.4 % 66.4 % 66.4 % 55.8 % 63.7 % 61.1 % Operating income 8.0 22.5 30.5 (21.3 ) 9.2 Operating margin 4.6 % 38.3 % 13.1 % 4.0 % Three Months Ended December 31, 2016 January 2, 2016 Corporate reconciling items impacting gross profit: Total segment gross profit $ 129.9 $ 147.9 Stock-based compensation (1.0 ) (1.4 ) Amortization of intangibles (3.7 ) (4.6 ) Other charges unrelated to core operating performance (1) (0.5 ) (0.1 ) GAAP gross profit $ 124.7 $ 141.8 Corporate reconciling items impacting operating income (loss): Total segment operating income $ 26.9 $ 30.5 Stock-based compensation (9.1 ) (8.9 ) Amortization of intangibles (7.1 ) (8.3 ) Other charges unrelated to core operating performance (1) (2.2 ) (2.7 ) Restructuring and related charges (1.8 ) (1.4 ) GAAP operating income (loss) from continuing operations $ 6.7 $ 9.2 (1) During the three months ended December 31, 2016 and January 2, 2016 , other charges related to non-recurring activities primarily consisted of transformational initiatives such as the implementation of simplified automated processes, write-down of fixed assets, site consolidations, reorganizations, and the insourcing or outsourcing of activities. Six Months Ended December 31, 2016 Network and Service Enablement Network Enablement Service Enablement Network and Service Enablement Optical Security and Performance Products Total Segment Measures Reconciling Items Consolidated GAAP Measures Net revenue $ 235.6 $ 77.0 $ 312.6 $ 104.7 $ 417.3 $ — $ 417.3 Gross profit 152.0 48.4 200.4 59.8 260.2 (10.4 ) 249.8 Gross margin 64.5 % 62.9 % 64.1 % 57.1 % 62.4 % 59.9 % Operating income 10.1 44.3 54.4 (37.6 ) 16.8 Operating margin 3.2 % 42.3 % 13.0 % 4.0 % Six Months Ended January 2, 2016 Network and Service Enablement Network Enablement Service Enablement Network and Service Enablement Optical Security and Performance Products Total Segment Measures Reconciling Items Consolidated GAAP Measures Net revenue $ 254.0 $ 84.8 $ 338.8 $ 123.0 $ 461.8 $ — $ 461.8 Gross profit 166.3 57.9 224.2 69.8 294.0 (11.7 ) 282.3 Gross margin 65.5 % 68.3 % 66.2 % 56.7 % 63.7 % 61.1 % Operating income 10.4 48.8 59.2 (52.9 ) 6.3 Operating margin 3.1 % 39.7 % 12.8 % 1.4 % Six Months Ended December 31, 2016 January 2, 2016 Corporate reconciling items impacting gross profit: Total segment gross profit $ 260.2 $ 294.0 Stock-based compensation (2.0 ) (2.6 ) Amortization of intangibles (7.5 ) (8.9 ) Other charges unrelated to core operating performance (1) (0.9 ) (0.2 ) GAAP gross profit $ 249.8 $ 282.3 Corporate reconciling items impacting operating income (loss): Total segment operating income $ 54.4 $ 59.2 Stock-based compensation (17.8 ) (24.9 ) Amortization of intangibles (14.4 ) (16.4 ) Other charges unrelated to core operating performance (1) (3.6 ) (9.8 ) Restructuring and related charges (1.8 ) (1.8 ) GAAP operating income (loss) from continuing operations $ 16.8 $ 6.3 (1) During the six months ended December 31, 2016 and January 2, 2016 , other charges related to non-recurring activities primarily consisted of Viavi-specific incremental charges for professional fees and additional personnel costs to complete the separation as well as transformational initiatives such as the implementation of simplified automated processes, write-down of fixed assets, site consolidations, reorganizations, and the insourcing or outsourcing of activities. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Costs Associated with Exit or Disposal Activities In January 2017, Management approved a restructuring and global workforce reduction plan (the “Plan”). The Plan is part of the Company’s strategy to improve profitability in the Company’s Network and Service Enablement (NSE) business by narrowing the scope of the Service Enablement business and reducing costs by streamlining NSE operations. The Company expects up to approximately 10% of its global workforce to be affected. The Company estimates it will incur total aggregate charges of up to approximately $30 million in connection with the Plan, including up to approximately $24 million in cash expenditures, the majority of which will be related to severance charges. The Company expects the Plan to be completed by the end of the second quarter of fiscal 2018 with the significant portion completed by the end of fiscal 2017. The Company expects to recognize the majority of the total charges in the third quarter of fiscal 2017. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Fiscal Years | Fiscal Years The Company utilizes a 52 - 53 week fiscal year ending on the Saturday closest to June 30th. The Company’s fiscal 2017 is a 52 -week year ending on July 1, 2017 . The Company’s fiscal 2016 was a 53 -week year ending on July 2, 2016 . |
Lumentum Separation | Lumentum Separation On August 1, 2015 (the “Separation Date”), Viavi completed the distribution of approximately 80.1% of the outstanding shares of Lumentum Holdings Inc. (“Lumentum”) common stock (the “Distribution”). Concurrent with the Distribution, JDSU was renamed Viavi Solutions Inc. and, at the time of the Distribution, retained ownership of approximately 19.9% of Lumentum’s outstanding shares. Lumentum was formed to hold Viavi’s communications and commercial optical products business segment (“CCOP”) and the WaveReady product line and, as a result of the Distribution, is now an independent public company trading under the symbol “LITE” on The Nasdaq Stock Market (“NASDAQ”). The Distribution was made to Viavi’s stockholders of record as of the close of business on July 27, 2015 (the “Record Date”), who received one share of Lumentum common stock for every five shares of Viavi common stock held as of the close of business on the Record Date and not sold prior to August 4, 2015, the ex-dividend date. The historical results of operations and the financial position have been recasted to present the Lumentum business as discontinued operations as described in “ Note 3. Discontinued Operations .” Unless noted otherwise, discussion in the Notes to Consolidated Financial Statements pertain to continuing operations. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements, the reported amount of Net revenues and expenses and the disclosure of commitments and contingencies during the reporting periods. The Company bases estimates on historical experience and on various assumptions about the future believed to be reasonable based on available information. The Company’s reported financial position or results of operations may be materially different under changed conditions or when using different estimates and assumptions, particularly with respect to significant accounting policies. If estimates or assumptions differ from actual results, subsequent periods are adjusted to reflect more current information. |
Recently Issued Accounting Pronouncements | In November 2016, the FASB issued guidance that will require that the amounts generally described as restricted cash and restricted cash equivalents would be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows. The new guidance also requires certain disclosures to supplement the statement of cash flows. The guidance is effective for the Company in the first quarter of fiscal 2019. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In October 2016, the FASB issued guidance that requires entities to recognize at the transaction date the income tax consequences of intra-entity transfer of an asset other than inventory. The guidance is effective for the Company in the first quarter of fiscal 2019. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In June 2016, the FASB issued guidance that changes the accounting for recognizing impairments of financial assets. Under the new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The new guidance also modifies the impairment models for available for-sale debt securities and for purchased financial assets with credit deterioration since their origination. The guidance is effective for the Company in the first quarter of fiscal 2021 and earlier adoption is permitted. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In March 2016, the FASB issued guidance which simplifies several aspects of accounting for share-based payment award transactions including income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The guidance is effective for the Company in the first quarter of fiscal 2018 and earlier adoption is permitted. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In February 2016, the FASB issued guidance related to how an entity should recognize lease assets and lease liabilities. The guidance specifies that an entity who is a lessee under lease agreements should recognize lease assets and lease liabilities for those leases classified as operating leases under previous FASB guidance. Accounting for leases by lessors is largely unchanged under the new guidance. The guidance requires a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The guidance is effective for the Company in the first quarter of fiscal 2020. While the Company is not yet in a position to assess the full impact of the application of the new guidance, the Company expects that the impact of recording lease liabilities and the corresponding right-to-use assets may have a significant impact on its total assets and total liabilities on the consolidated balance sheets. In May 2014, the FASB issued new authoritative guidance related to revenue recognition. This guidance will replace current U.S. GAAP guidance on this topic and eliminate industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance allows for either full retrospective adoption or modified retrospective adoption. The FASB deferred the effective date for this guidance by one year to December 15, 2017 for annual reporting periods beginning after such date. Earlier application of this guidance is permitted. In accordance with the deferred effective date, the Company is required to adopt the new guidance in the first quarter of fiscal 2019. The Company does not intend to adopt the new guidance early and is continuing to evaluate the impact of this new accounting guidance and the transition alternatives on its consolidated financial statements and related disclosures. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | The following table summarizes results from discontinued operations of the Lumentum business included in the condensed Consolidated Statement of Operations (in millions) : Six Months Ended (1) January 2, 2016 Net revenues $ 66.5 Cost of revenues 49.7 Amortization of acquired technologies 0.6 Gross profit 16.2 Operating expenses: Research and development 12.5 Selling, general and administrative 24.0 Restructuring charges 0.1 Total operating expenses 36.6 Loss from operations (20.4 ) Interest and other income (expense), net 0.5 Loss before income taxes (19.9 ) Provision for income taxes 30.5 Net loss from discontinued operations $ (50.4 ) (1) Net income from discontinued operations for the three months ended January 2, 2016 was $ 3.0 million comprised of costs to complete the separation offset by a benefit from income taxes from discontinued operations of $4.5 million . No income or expense has been recorded relating to the Lumentum business after the separation from Viavi on August 1, 2015 . The following table presents supplemental cash flow information: depreciation expense, amortization expense, stock based compensation expense and capital expenditures of the Lumentum business (in millions) : Six Months Ended (1) January 2, 2016 Operating activities: Depreciation expense $ 3.7 Amortization expense 0.6 Stock-based compensation expense 1.6 Investing activities: Capital expenditures $ 5.8 (1) No depreciation expense, amortization expense, stock based compensation expense and capital expenditures relating to the Lumentum business are presented after the Separation Date. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted net (loss) income per share | The following table sets forth the computation of basic and diluted net income (loss) per share ( in millions, except per share data ): Three Months Ended Six Months Ended December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016 Numerator: Income (loss) from continuing operations, net of taxes $ 49.2 $ 1.0 $ 127.2 $ (14.7 ) Income (loss) from discontinued operations, net of taxes — 3.0 — (50.4 ) Net income (loss) $ 49.2 $ 4.0 $ 127.2 $ (65.1 ) Denominator: Weighted-average number of common shares outstanding Basic 230.5 234.9 231.4 235.5 Effect of dilutive securities from stock-based benefit plans 3.7 2.2 4.4 — Diluted 234.2 237.1 235.8 235.5 Net income (loss) per share - basic: Continuing operations $ 0.21 $ 0.01 $ 0.55 $ (0.06 ) Discontinued operations — 0.01 — (0.22 ) Net income (loss) per share $ 0.21 $ 0.02 $ 0.55 $ (0.28 ) Net income (loss) per share - diluted: Continuing operations $ 0.21 $ 0.01 $ 0.54 $ (0.06 ) Discontinued operations — 0.01 $ — $ (0.22 ) Net income (loss) per share $ 0.21 $ 0.02 $ 0.54 $ (0.28 ) |
Schedule of weighted average potentially dilutive securities excluded from the computation because their effect would have been anti-dilutive | The following table sets forth the weighted-average potentially dilutive securities excluded from the computation of the diluted net income (loss) per share because their effect would have been anti-dilutive ( in millions ): Three Months Ended Six Months Ended December 31, 2016 (2) January 2, 2016 (2) December 31, 2016 (2) January 2, 2016 (1)(2) Stock options and ESPP 1.5 0.9 1.6 3.4 Restricted Stock Units 0.2 4.5 — 11.0 Total potentially dilutive securities 1.7 5.4 1.6 14.4 (1) As the Company incurred a net loss from continuing operations in the period, potential dilutive securities from employee stock options, employee stock purchase plan (“ESPP”) and Restricted Stock Units (“RSUs”) have been excluded from the diluted net loss per share computations as their effects were deemed anti-dilutive. (2) The Company’s 0.625% Senior Convertible 2033 Notes are not included in the table above. The par amount of convertible notes is payable in cash equal to the principal amount of the notes plus any accrued and unpaid interest and then the “in-the-money” conversion benefit feature at the conversion price above $11.28 per share is payable in cash, shares of the Company’s common stock or a combination of both at the Company’s election. Refer to “ Note 10. Debts and Letters of Credit ” for more details. |
Accumulated Other Comprehensi29
Accumulated Other Comprehensive (Loss) Income (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of components of Accumulated other comprehensive income | For the six months ended December 31, 2016 the changes in accumulated other comprehensive (loss) income by component net of tax were as follows ( in millions ): Unrealized gains (losses) on available-for sale investments (1) Foreign currency translation adjustments Change in unrealized components of defined benefit obligations, net of tax (2) Total Beginning balance as of July 2, 2016 $ 104.5 $ (70.1 ) $ (24.4 ) $ 10.0 Other comprehensive income (loss) before reclassification 74.2 (22.2 ) — 52.0 Amounts reclassified from accumulated other comprehensive income (134.2 ) — 0.9 (133.3 ) Net current-period other comprehensive (loss) income (60.0 ) (22.2 ) 0.9 (81.3 ) Ending balance as of December 31, 2016 $ 44.5 $ (92.3 ) $ (23.5 ) $ (71.3 ) (1) Activity before reclassifications to the Consolidated Statements of Operations during the six months ended December 31, 2016 relates to the unrealized gain on the marketable equity securities of Lumentum held by Viavi. The amount reclassified out of accumulated other comprehensive (loss) income relates to the realized gain from the sale of the marketable equity securities of Lumentum. There was no tax impact for the six months ended December 31, 2016 . (2) The amount reclassified out of accumulated other comprehensive income represents the amortization of actuarial losses included as a component of cost of revenues, research and development (“R&D”) and selling, general and administrative expense (“SG&A”) in the Consolidated Statement of Operations for the six months ended December 31, 2016 . There was no tax impact for the six months ended December 31, 2016 . Refer to “ Note 15. Employee Pension and Other Benefit Plans ” for more details on the computation of net periodic cost for pension plans. |
Balance Sheet and Other Detai30
Balance Sheet and Other Details (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Balance Sheet and Other Details [Abstract] | |
Schedule of components of accounts receivable reserves and allowances | The components of accounts receivable reserves and allowances were as follows ( in millions ): July 2, 2016 Charged to Costs and Expenses Adjustments (1) December 31, 2016 Allowance for doubtful accounts $ 2.2 $ 0.1 $ (0.6 ) $ 1.7 Allowance for sales returns 2.5 1.7 (2.3 ) 1.9 Total accounts receivable reserves $ 4.7 $ 1.8 $ (2.9 ) $ 3.6 (1) Represents the effect of currency translation adjustments and write-offs of uncollectible accounts, net of recoveries. |
Schedule of components of Inventories | The components of Inventories, net were as follows ( in millions ): December 31, 2016 July 2, 2016 Finished goods $ 24.7 $ 29.1 Work in process 9.3 7.5 Raw materials 13.2 14.8 Inventories, net $ 47.2 $ 51.4 |
Schedule of components of Prepayments and other current assets | The components of Prepayments and other current assets were as follo ws ( in millions ): December 31, 2016 July 2, 2016 Prepayments $ 10.5 $ 10.4 Other current assets 37.9 21.7 Prepayments and other current assets $ 48.4 $ 32.1 |
Schedule of components of Other current liabilities | The components of Other current liabilities were as follows ( in millions ): December 31, 2016 July 2, 2016 Customer prepayments 36.0 0.4 Foreign exchange forward contract 9.6 — Restructuring accrual 6.1 13.3 Income tax payable 5.7 3.3 VAT liabilities 3.6 2.3 Warranty accrual 2.7 2.6 Deferred compensation plan 2.5 2.4 Other 4.8 6.7 Other current liabilities $ 71.0 $ 31.0 |
Schedule of components of Other non-current liabilities | The components of Other non-current liabilities were as follo ws ( in millions ): December 31, 2016 July 2, 2016 Pension and post-employment benefits $ 97.1 $ 103.0 Financing obligation 28.0 28.7 Long-term deferred revenue 17.4 22.7 Other 23.6 24.7 Other non-current liabilities $ 166.1 $ 179.1 |
Investments, Forward Contract31
Investments, Forward Contracts and Fair Value Measurements (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Investments and Fair Value Measurements [Abstract] | |
Schedule of available-for-sale securities | As of December 31, 2016 , the Company’s available-for-sale securities were as follows ( in millions ): Amortized Cost/ Carrying Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt securities: U.S. treasuries $ 67.6 $ — $ (0.1 ) $ 67.5 U.S. agencies 36.5 — (0.1 ) 36.4 Municipal bonds and sovereign debt instruments 3.5 — — 3.5 Asset-backed securities 62.9 — (0.3 ) 62.6 Corporate securities 302.3 — (0.4 ) 301.9 Certificate of deposits 6.0 — — 6.0 Total debt securities 478.8 — (0.9 ) 477.9 Marketable equity securities 14.3 50.0 — 64.3 Total available-for-sale securities $ 493.1 $ 50.0 $ (0.9 ) $ 542.2 As of July 2, 2016 , the Company’s available-for-sale securities were as follows ( in millions ): Amortized Cost/ Carrying Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt securities: U.S. treasuries $ 46.1 $ — $ — $ 46.1 U.S. agencies 24.9 — — 24.9 Municipal bonds and sovereign debt instruments 2.0 — — 2.0 Asset-backed securities 50.4 0.1 (0.3 ) 50.2 Corporate securities 224.5 0.2 (0.1 ) 224.6 Total debt securities 347.9 0.3 (0.4 ) 347.8 Marketable equity securities 62.1 109.2 — 171.3 Total debt available-for-sale securities $ 410.0 $ 109.5 $ (0.4 ) $ 519.1 |
Schedule of contractual maturities of available-for-sale securities | As of December 31, 2016 , contractual maturities of the Company’s debt securities classified as available-for-sale securities were as follows ( in millions ): Amortized Cost/ Carrying Cost Estimated Fair Value Amounts maturing in less than 1 year $ 327.5 $ 327.4 Amounts maturing in 1 - 5 years 149.3 148.9 Amounts maturing in more than 5 years 2.0 1.6 Total debt available-for-sale securities $ 478.8 $ 477.9 |
Schedule of assets measured at fair value | Assets measured at fair value as of December 31, 2016 and July 2, 2016 are summarized below ( in millions ): Fair value measurement as of Fair value measurement as of December 31, 2016 July 2, 2016 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Assets: Debt available-for-sale securities U.S. treasuries $ 67.5 $ 67.5 $ — $ 46.1 $ 46.1 $ — U.S. agencies 36.4 — 36.4 24.9 — 24.9 Municipal bonds and sovereign debt instruments 3.5 — 3.5 2.0 — 2.0 Asset-backed securities 62.6 — 62.6 50.2 — 50.2 Corporate securities 301.9 — 301.9 224.6 — 224.6 Certificate of deposits 6.0 — 6.0 — — — Total debt available-for-sale securities 477.9 67.5 410.4 347.8 46.1 301.7 Marketable equity securities 64.3 64.3 — 171.3 171.3 — Money market funds 283.1 283.1 — 274.4 274.4 — Trading securities 2.5 2.5 — 2.4 2.4 — Foreign currency forward contracts 4.0 — 4.0 — — — Total assets (1) $ 831.8 $ 417.4 $ 414.4 $ 795.9 $ 494.2 $ 301.7 Liability: Foreign currency forward contracts 9.6 — 9.6 — — — Total liabilities (2) $ 9.6 $ — $ 9.6 $ — $ — $ — (1) $ 314.0 million in cash and cash equivalents, $498.0 million in short-term investments, $11.0 million in restricted cash, $ 4.0 million in prepayments and other current assets, and $4.8 million in other non-current assets on the Company’s Consolidated Balance Sheets as of December 31, 2016 . $295.4 million in cash and cash equivalents, $484.7 million in short-term investments, $11.3 million in restricted cash, and $4.5 million in other non-current assets on the Company’s Consolidated Balance Sheets as of July 2, 2016 . (2) $ 9.6 million in other current liabilities on the Company’s Consolidated Balance Sheets as of December 31, 2016 . |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in goodwill | The following table presents the changes in goodwill allocated to the Company’s reportable segments (in millions) : Network Enablement Optical Security and Performance Products Total Balance as of July 2, 2016 $ 143.8 $ 8.3 $ 152.1 Currency translation adjustments (2.4 ) — (2.4 ) Balance as of December 31, 2016 $ 141.4 $ 8.3 $ 149.7 |
Acquired Developed Technology33
Acquired Developed Technology and Other Intangibles (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Acquired Developed Technology and Other Intangibles | |
Schedule of acquired developed technology and other intangibles | The following tables present details of the Company’s acquired developed technology, customer relationships and other intangibles ( in millions ): As of December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Acquired developed technology $ 365.5 $ (341.8 ) $ 23.7 Customer relationships 94.5 (74.1 ) 20.4 Other 10.8 (10.5 ) 0.3 Total intangibles $ 470.8 $ (426.4 ) $ 44.4 As of July 2, 2016 Gross Carrying Amount Accumulated Amortization Net Acquired developed technology $ 369.3 $ (337.3 ) $ 32.0 Customer relationships 95.6 (68.0 ) 27.6 Other 10.8 (10.5 ) 0.3 Total intangibles $ 475.7 $ (415.8 ) $ 59.9 |
Finite-lived intangible assets amortization expense | The following table presents the amortization recorded relating to acquired developed technology, customer relationships and other intangibles ( in millions ): Three Months Ended Six Months Ended December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016 Amortization of acquired developed technologies $ 3.7 $ 4.6 $ 7.5 $ 8.9 Amortization of other intangibles 3.4 3.7 6.9 7.5 Total amortization of intangible assets $ 7.1 $ 8.3 $ 14.4 $ 16.4 |
Schedule of estimated future amortization | Based on the carrying amount of acquired developed technology, customer relationships and other intangibles as of December 31, 2016 , and assuming no future impairment of the underlying assets, the estimated future amortization is as follows ( in millions ): Fiscal Years Remainder of 2017 $ 13.6 2018 19.8 2019 9.3 2020 1.4 2021 0.3 Thereafter — Total amortization $ 44.4 |
Debts and Letters of Credit (Ta
Debts and Letters of Credit (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of carrying amounts of the liability and equity components of convertible debt | The following table presents the carrying amounts of the liability and equity components ( in millions ): December 31, 2016 July 2, 2016 Principal amount of 0.625% Senior Convertible Notes $ 650.0 $ 650.0 Unamortized discount of liability component (47.8 ) (61.7 ) Unamortized debt issuance cost (1) $ (3.9 ) $ (5.0 ) Carrying amount of liability component $ 598.3 $ 583.3 Carrying amount of equity component (2) $ 134.4 $ 134.4 (1) In April 2015 , the Financial Accounting Standards Board ("FASB") issued new authoritative guidance to simplify the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding liability, consistent with debt discounts or premiums. This guidance was effective for the Company in the first quarter of fiscal 2017 for its convertible debt, and was applied retrospectively for all periods reported. (2) Included in Accumulated paid-in-capital on the Consolidated Balance Sheets. |
Summary of effective interest rate and the interest expense for the contractual interest and the accretion of debt discount | The following table presents the effective interest rate and the interest expense for the contractual interest and the accretion of debt discount ( in millions, except for the effective interest rate ): Three Months Ended Six Months Ended December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016 Effective interest rate 5.4 % 5.4 % 5.4 % 5.4 % Interest expense-contractual interest $ 1.0 $ 1.0 $ 2.0 $ 2.0 Accretion of debt discount 7.0 6.6 13.9 13.2 |
Restructuring and Related Cha35
Restructuring and Related Charges (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of various restructuring plans | The adjustments to the accrued restructuring expenses related to all of the Company’s restructuring plans described below for the three and six months ended December 31, 2016 were as follows (in millions) : Balance Six Months Ended December 31, 2016 Charges (Benefits) Cash Settlements Non-cash Settlements and Other Adjustments Balance December 31, 2016 Three Fiscal 2017 Plan Focused NSE Restructuring Plan (1) $ — $ 1.4 $ — $ — $ 1.4 $ 1.4 Other Plan (2) — 0.4 (0.4 ) — — 0.4 Fiscal 2016 Plan NE, SE and Shared Services Agile Restructuring Plan (1) (2) 8.6 0.1 (7.3 ) — 1.4 — NE and SE Agile Restructuring Plan (1) 0.8 — (0.3 ) — 0.5 — Fiscal 2015 Plan NE, SE and Shared Service Separation Restructuring Plan (1)(2) 1.4 (0.2 ) (0.9 ) — 0.3 — Plans Prior to Fiscal 2015 NE Product Strategy Restructuring Plan (1) 1.5 — (0.2 ) (0.1 ) 1.2 — NE Lease Restructuring Plan (2) 4.0 0.1 (0.8 ) — 3.3 — Other Plans (1)(2) 1.7 — (0.4 ) — 1.3 — Total $ 18.0 $ 1.8 $ (10.3 ) $ (0.1 ) $ 9.4 $ 1.8 (1) Plan type includes workforce reduction cost. (2) Plan type includes lease exit cost. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of the impact on the entity's results of operations of recording stock-based compensation by function | The impact on the Company’s results of operations of recording stock-based compensation by function for the three and six months ended December 31, 2016 and January 2, 2016 was as follows (in millions): Three Months Ended Six Months Ended December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016 Cost of sales $ 1.0 $ 1.4 $ 2.0 $ 2.6 Research and development 1.6 1.9 3.3 4.7 Selling, general and administrative 6.5 5.6 12.5 17.6 Stock-based compensation $ 9.1 $ 8.9 $ 17.8 $ 24.9 |
Schedule of assumptions used to estimate the fair value of new MSU awards on the date of grant | The Company estimates the fair value of the new MSUs granted using a Monte Carlo simulation based on the assumptions described below for the following periods: Six Months Ended December 31, 2016 January 2, 2016 Volatility of common stock 35.0 % 33.0 % Average volatility of peer companies 54.7 % 52.6 % Average correlation coefficient of peer companies 0.1856 0.0887 Risk-free interest rate 0.8 % 0.8 % |
Employee Pension and Other Be37
Employee Pension and Other Benefit Plans (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Schedule of net periodic cost for the pension and benefits plans | The following table presents the components of the net periodic cost for the pension and benefits plans ( in millions ): Three Months Ended Six Months Ended Pension Benefits December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016 Service cost $ 0.1 $ 0.1 $ 0.2 $ 0.2 Interest cost 0.6 0.7 1.0 1.5 Expected return on plan assets (0.3 ) (0.4 ) (0.5 ) (0.8 ) Amortization of net actuarial losses 0.4 0.1 0.9 0.3 Net periodic benefit cost $ 0.8 $ 0.5 $ 1.6 $ 1.2 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of changes in the entity's warranty reserve | The following table presents the changes in the Company’s warranty reserve during fiscal 2017 and fiscal 2016 ( in millions ): Three Months Ended Six Months Ended December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016 Balance as of beginning of period $ 5.2 $ 4.0 $ 4.9 $ 3.7 Provision for warranty 1.6 0.8 3.2 1.7 Utilization of reserve (0.9 ) (0.7 ) (2.0 ) (1.5 ) Adjustments related to pre-existing warranties (including changes in estimates) (0.6 ) 0.2 (0.8 ) 0.4 Balance as of end of period $ 5.3 $ 4.3 $ 5.3 $ 4.3 |
Operating Segments and Geogra39
Operating Segments and Geographic Information (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of information on reportable segments | Information on reportable segments is as follows (in millions): Three Months Ended December 31, 2016 Network and Service Enablement Network Enablement Service Enablement Network and Service Enablement Optical Security and Performance Products Total Segment Measures Reconciling Items Consolidated GAAP Measures Net revenue $ 117.0 $ 40.6 $ 157.6 $ 48.9 $ 206.5 $ — $ 206.5 Gross profit 74.6 27.1 101.7 28.2 129.9 (5.2 ) 124.7 Gross margin 63.8 % 66.7 % 64.5 % 57.7 % 62.9 % 60.4 % Operating income 6.0 20.9 26.9 (20.2 ) 6.7 Operating margin 3.8 % 42.7 % 13.0 % 3.2 % Three Months Ended January 2, 2016 Network and Service Enablement Network Enablement Service Enablement Network and Service Enablement Optical Security and Performance Products Total Segment Measures Reconciling Items Consolidated GAAP Measures Net revenue $ 136.4 $ 36.9 $ 173.3 $ 58.8 $ 232.1 $ — $ 232.1 Gross profit 90.6 24.5 115.1 32.8 147.9 (6.1 ) 141.8 Gross margin 66.4 % 66.4 % 66.4 % 55.8 % 63.7 % 61.1 % Operating income 8.0 22.5 30.5 (21.3 ) 9.2 Operating margin 4.6 % 38.3 % 13.1 % 4.0 % Three Months Ended December 31, 2016 January 2, 2016 Corporate reconciling items impacting gross profit: Total segment gross profit $ 129.9 $ 147.9 Stock-based compensation (1.0 ) (1.4 ) Amortization of intangibles (3.7 ) (4.6 ) Other charges unrelated to core operating performance (1) (0.5 ) (0.1 ) GAAP gross profit $ 124.7 $ 141.8 Corporate reconciling items impacting operating income (loss): Total segment operating income $ 26.9 $ 30.5 Stock-based compensation (9.1 ) (8.9 ) Amortization of intangibles (7.1 ) (8.3 ) Other charges unrelated to core operating performance (1) (2.2 ) (2.7 ) Restructuring and related charges (1.8 ) (1.4 ) GAAP operating income (loss) from continuing operations $ 6.7 $ 9.2 (1) During the three months ended December 31, 2016 and January 2, 2016 , other charges related to non-recurring activities primarily consisted of transformational initiatives such as the implementation of simplified automated processes, write-down of fixed assets, site consolidations, reorganizations, and the insourcing or outsourcing of activities. Six Months Ended December 31, 2016 Network and Service Enablement Network Enablement Service Enablement Network and Service Enablement Optical Security and Performance Products Total Segment Measures Reconciling Items Consolidated GAAP Measures Net revenue $ 235.6 $ 77.0 $ 312.6 $ 104.7 $ 417.3 $ — $ 417.3 Gross profit 152.0 48.4 200.4 59.8 260.2 (10.4 ) 249.8 Gross margin 64.5 % 62.9 % 64.1 % 57.1 % 62.4 % 59.9 % Operating income 10.1 44.3 54.4 (37.6 ) 16.8 Operating margin 3.2 % 42.3 % 13.0 % 4.0 % Six Months Ended January 2, 2016 Network and Service Enablement Network Enablement Service Enablement Network and Service Enablement Optical Security and Performance Products Total Segment Measures Reconciling Items Consolidated GAAP Measures Net revenue $ 254.0 $ 84.8 $ 338.8 $ 123.0 $ 461.8 $ — $ 461.8 Gross profit 166.3 57.9 224.2 69.8 294.0 (11.7 ) 282.3 Gross margin 65.5 % 68.3 % 66.2 % 56.7 % 63.7 % 61.1 % Operating income 10.4 48.8 59.2 (52.9 ) 6.3 Operating margin 3.1 % 39.7 % 12.8 % 1.4 % Six Months Ended December 31, 2016 January 2, 2016 Corporate reconciling items impacting gross profit: Total segment gross profit $ 260.2 $ 294.0 Stock-based compensation (2.0 ) (2.6 ) Amortization of intangibles (7.5 ) (8.9 ) Other charges unrelated to core operating performance (1) (0.9 ) (0.2 ) GAAP gross profit $ 249.8 $ 282.3 Corporate reconciling items impacting operating income (loss): Total segment operating income $ 54.4 $ 59.2 Stock-based compensation (17.8 ) (24.9 ) Amortization of intangibles (14.4 ) (16.4 ) Other charges unrelated to core operating performance (1) (3.6 ) (9.8 ) Restructuring and related charges (1.8 ) (1.8 ) GAAP operating income (loss) from continuing operations $ 16.8 $ 6.3 (1) During the six months ended December 31, 2016 and January 2, 2016 , other charges related to non-recurring activities primarily consisted of Viavi-specific incremental charges for professional fees and additional personnel costs to complete the separation as well as transformational initiatives such as the implementation of simplified automated processes, write-down of fixed assets, site consolidations, reorganizations, and the insourcing or outsourcing of activities. |
Basis of Presentation (Details)
Basis of Presentation (Details) | Aug. 01, 2015 |
Organization, Consolidation And Presentation Of Financial Statement [Line Items] | |
Stock conversion ratio in distribution | 0.2 |
Lumentum | |
Organization, Consolidation And Presentation Of Financial Statement [Line Items] | |
Percentage of outstanding shares distributed | 80.10% |
Ownership percentage | 19.90% |
Stock conversion ratio in distribution | 0.2 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Details) - USD ($) shares in Millions, $ in Millions | Aug. 01, 2015 | Jan. 02, 2016 | Jan. 02, 2016 | Dec. 31, 2016 |
Discontinued Operations | ||||
Stock conversion ratio in distribution | 0.2 | |||
Net income tax provision (benefit) for discontinued operations | $ (4.5) | |||
Spinoff | Lumentum | ||||
Discontinued Operations | ||||
Net income tax provision (benefit) for discontinued operations | $ 30.5 | |||
Transaction, advisory and other costs to effect the separation | $ 1.5 | 15.5 | ||
Spinoff | Lumentum | Discontinued Operations | ||||
Discontinued Operations | ||||
Net income tax provision | 25.2 | |||
Spinoff | Lumentum | Federal and State | ||||
Discontinued Operations | ||||
Net income tax provision (benefit) for discontinued operations | $ 5.6 | |||
Lumentum | ||||
Discontinued Operations | ||||
Percentage of outstanding shares distributed | 80.10% | |||
Stock conversion ratio in distribution | 0.2 | |||
Cash contributions agreed to in spin-off | $ 137.6 | |||
Retained ownership percentage | 19.90% | |||
Shares held in investment (in shares) | 11.7 | 1.7 | ||
Minimum holding period for retained interest | 6 months | |||
Maximum holding period for retained interest | 3 years |
Discontinued Operations - State
Discontinued Operations - Statement of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Dec. 31, 2016 | Jan. 02, 2016 | |
Discontinued Operations | ||||
Provision for income taxes | $ (4.5) | |||
Income (loss) from discontinued operations, net of taxes | $ 0 | $ 3 | $ 0 | $ (50.4) |
Spinoff | Lumentum | ||||
Discontinued Operations | ||||
Net revenues | 66.5 | |||
Cost of revenues | 49.7 | |||
Amortization of acquired technologies | 0.6 | |||
Gross profit | 16.2 | |||
Research and development | 12.5 | |||
Selling, general and administrative | 24 | |||
Restructuring charges | 0.1 | |||
Total operating expenses | 36.6 | |||
Loss from operations | (20.4) | |||
Interest and other income (expense), net | 0.5 | |||
Loss before income taxes | (19.9) | |||
Provision for income taxes | 30.5 | |||
Net loss from discontinued operations | $ (50.4) |
Discontinued Operations - Suppl
Discontinued Operations - Supplemental Cash Flow and Other Disclosures (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Dec. 31, 2016 | Jan. 02, 2016 | |
Discontinued Operations | ||||
Depreciation expense | $ 15.5 | $ 21.7 | ||
Amortization of other intangibles | $ 3.4 | $ 3.7 | 6.9 | 7.5 |
Stock-based compensation expense | $ 9.1 | $ 8.9 | $ 17.8 | 24.9 |
Spinoff | Discontinued Operations | Lumentum | ||||
Discontinued Operations | ||||
Depreciation expense | 3.7 | |||
Amortization of other intangibles | 0.6 | |||
Stock-based compensation expense | 1.6 | |||
Capital expenditures | $ 5.8 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Aug. 17, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Dec. 31, 2016 | Jan. 02, 2016 | Aug. 21, 2013 |
Numerator: | ||||||
Income (loss) from continuing operations, net of taxes | $ 49.2 | $ 1 | $ 127.2 | $ (14.7) | ||
Income (loss) from discontinued operations, net of taxes | 0 | 3 | 0 | (50.4) | ||
Net income (loss) | $ 49.2 | $ 4 | $ 127.2 | $ (65.1) | ||
Denominator: | ||||||
Weighted-average number of common shares outstanding - basic (in shares) | 230.5 | 234.9 | 231.4 | 235.5 | ||
Effect of dilutive securities from stock-based benefit plans (in shares) | 3.7 | 2.2 | 4.4 | 0 | ||
Shares used in per share calculation - diluted (in shares) | 234.2 | 237.1 | 235.8 | 235.5 | ||
Net income (loss) per share from - basic: | ||||||
Continuing operations (in dollars per share) | $ 0.21 | $ 0.01 | $ 0.55 | $ (0.06) | ||
Discontinued operations (in dollars per share) | 0 | 0.01 | 0 | (0.22) | ||
Net (loss) income per share (in dollars per share) | 0.21 | 0.02 | 0.55 | (0.28) | ||
Net income (loss) per share from - diluted: | ||||||
Continuing operations (in dollars per share) | 0.21 | 0.01 | 0.54 | (0.06) | ||
Discontinued operations (in dollars per share) | 0 | 0.01 | 0 | (0.22) | ||
Net income (loss) per share (in dollars per share) | $ 0.21 | $ 0.02 | $ 0.54 | $ (0.28) | ||
Anti-dilutive securities excluded from computation of earnings per share | ||||||
Total potentially dilutive securities (in shares) | 1.7 | 5.4 | 1.6 | 14.4 | ||
2033 Notes | ||||||
Convertible notes | ||||||
Interest rate on senior convertible notes (as a percent) | 0.625% | 0.625% | 0.625% | |||
Conversion price of debt (in dollars per share) | $ 11.28 | $ 11.28 | ||||
Stock options and ESPP | ||||||
Anti-dilutive securities excluded from computation of earnings per share | ||||||
Total potentially dilutive securities (in shares) | 1.5 | 0.9 | 1.6 | 3.4 | ||
Restricted Stock Units | ||||||
Anti-dilutive securities excluded from computation of earnings per share | ||||||
Total potentially dilutive securities (in shares) | 0.2 | 4.5 | 0 | 11 |
Accumulated Other Comprehensi45
Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Dec. 31, 2016 | Jan. 02, 2016 | |
Changes in accumulated other comprehensive income (loss) by component | ||||
Balance at the beginning of the period | $ 689.3 | |||
Other comprehensive income (loss) before reclassification | 52 | |||
Amounts reclassified from accumulated other comprehensive income | (133.3) | |||
Net change in Accumulated other comprehensive (loss) income | $ (88.1) | $ 59.7 | (81.3) | $ 131.6 |
Balance at the end of the period | 709.4 | 709.4 | ||
Income tax expense impact from realized gain on sale of marketable equity securities | 0 | |||
Tax impact of amortization of actuarial gains (losses) | 0 | |||
Total | ||||
Changes in accumulated other comprehensive income (loss) by component | ||||
Balance at the beginning of the period | 10 | |||
Balance at the end of the period | (71.3) | (71.3) | ||
Unrealized gains (losses) on available-for-sale investments | ||||
Changes in accumulated other comprehensive income (loss) by component | ||||
Balance at the beginning of the period | 104.5 | |||
Other comprehensive income (loss) before reclassification | 74.2 | |||
Amounts reclassified from accumulated other comprehensive income | (134.2) | |||
Net change in Accumulated other comprehensive (loss) income | (60) | |||
Balance at the end of the period | 44.5 | 44.5 | ||
Foreign currency translation adjustments | ||||
Changes in accumulated other comprehensive income (loss) by component | ||||
Balance at the beginning of the period | (70.1) | |||
Other comprehensive income (loss) before reclassification | (22.2) | |||
Amounts reclassified from accumulated other comprehensive income | 0 | |||
Net change in Accumulated other comprehensive (loss) income | (22.2) | |||
Balance at the end of the period | (92.3) | (92.3) | ||
Change in unrealized components of defined benefit obligations, net of tax | ||||
Changes in accumulated other comprehensive income (loss) by component | ||||
Balance at the beginning of the period | (24.4) | |||
Other comprehensive income (loss) before reclassification | 0 | |||
Amounts reclassified from accumulated other comprehensive income | 0.9 | |||
Net change in Accumulated other comprehensive (loss) income | 0.9 | |||
Balance at the end of the period | $ (23.5) | $ (23.5) |
Balance Sheet and Other Detai46
Balance Sheet and Other Details - Accounts Receivable Reserves and Allowances (Details) $ in Millions | 6 Months Ended |
Dec. 31, 2016USD ($) | |
Components of accounts receivable reserves and allowances | |
Beginning balance | $ 4.7 |
Charged to Costs and Expenses | 1.8 |
Adjustments | (2.9) |
Ending balance | 3.6 |
Allowance for doubtful accounts | |
Components of accounts receivable reserves and allowances | |
Beginning balance | 2.2 |
Charged to Costs and Expenses | 0.1 |
Adjustments | (0.6) |
Ending balance | 1.7 |
Allowance for sales returns | |
Components of accounts receivable reserves and allowances | |
Beginning balance | 2.5 |
Charged to Costs and Expenses | 1.7 |
Adjustments | (2.3) |
Ending balance | $ 1.9 |
Balance Sheet and Other Detai47
Balance Sheet and Other Details - Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Jul. 02, 2016 |
Inventories, net | ||
Finished goods | $ 24.7 | $ 29.1 |
Work in process | 9.3 | 7.5 |
Raw materials | 13.2 | 14.8 |
Inventories, net | $ 47.2 | $ 51.4 |
Balance Sheet and Other Detai48
Balance Sheet and Other Details - Prepayments and Other Current Assets (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Jul. 02, 2016 |
Prepayments and other current assets | ||
Prepayments | $ 10.5 | $ 10.4 |
Other current assets | 37.9 | 21.7 |
Prepayments and other current assets | $ 48.4 | $ 32.1 |
Balance Sheet and Other Detai49
Balance Sheet and Other Details - Other Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Jul. 02, 2016 |
Other current liabilities | ||
Customer prepayments | $ 36 | $ 0.4 |
Foreign exchange forward contract | 9.6 | 0 |
Restructuring accrual | 6.1 | 13.3 |
Income taxes payable | 5.7 | 3.3 |
VAT liabilities | 3.6 | 2.3 |
Warranty accrual | 2.7 | 2.6 |
Deferred compensation plan | 2.5 | 2.4 |
Other | 4.8 | 6.7 |
Other current liabilities | $ 71 | $ 31 |
Balance Sheet and Other Detai50
Balance Sheet and Other Details - Other Non-Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Jul. 02, 2016 |
Other non-current liabilities | ||
Pension and post-employment benefits | $ 97.1 | $ 103 |
Financing obligation | 28 | 28.7 |
Long-term deferred revenue | 17.4 | 22.7 |
Other | 23.6 | 24.7 |
Other non-current liabilities | $ 166.1 | $ 179.1 |
Investments, Forward Contract51
Investments, Forward Contracts and Fair Value Measurements - Amortized Cost to Fair Value Reconciliation (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Jul. 02, 2016 |
Available-For-Sale Investments | ||
Amortized Cost/ Carrying Cost | $ 493.1 | $ 410 |
Gross Unrealized Gains | 50 | 109.5 |
Gross Unrealized Losses | (0.9) | (0.4) |
Fair Value | 542.2 | 519.1 |
Debt securities | ||
Available-For-Sale Investments | ||
Amortized Cost/ Carrying Cost | 478.8 | 347.9 |
Gross Unrealized Gains | 0 | 0.3 |
Gross Unrealized Losses | (0.9) | (0.4) |
Fair Value | 477.9 | 347.8 |
U.S. treasuries | ||
Available-For-Sale Investments | ||
Amortized Cost/ Carrying Cost | 67.6 | 46.1 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (0.1) | 0 |
Fair Value | 67.5 | 46.1 |
U.S. agencies | ||
Available-For-Sale Investments | ||
Amortized Cost/ Carrying Cost | 36.5 | 24.9 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (0.1) | 0 |
Fair Value | 36.4 | 24.9 |
Municipal bonds and sovereign debt instruments | ||
Available-For-Sale Investments | ||
Amortized Cost/ Carrying Cost | 3.5 | 2 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 3.5 | 2 |
Asset-backed securities | ||
Available-For-Sale Investments | ||
Amortized Cost/ Carrying Cost | 62.9 | 50.4 |
Gross Unrealized Gains | 0 | 0.1 |
Gross Unrealized Losses | (0.3) | (0.3) |
Fair Value | 62.6 | 50.2 |
Corporate securities | ||
Available-For-Sale Investments | ||
Amortized Cost/ Carrying Cost | 302.3 | 224.5 |
Gross Unrealized Gains | 0 | 0.2 |
Gross Unrealized Losses | (0.4) | (0.1) |
Fair Value | 301.9 | 224.6 |
Certificates of deposits | ||
Available-For-Sale Investments | ||
Amortized Cost/ Carrying Cost | 6 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | 6 | |
Marketable equity securities | ||
Available-For-Sale Investments | ||
Amortized Cost/ Carrying Cost | 14.3 | 62.1 |
Gross Unrealized Gains | 50 | 109.2 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 64.3 | $ 171.3 |
Investments, Forward Contract52
Investments, Forward Contracts and Fair Value Measurements - Additional Information (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2016 | Jan. 02, 2016 | Dec. 31, 2016 | Jan. 02, 2016 | Jul. 02, 2016 | Aug. 01, 2015 | |
Trading securities related to deferred compensation plan | ||||||
Term of maturities of securities classified as current assets included in short-term investments | 12 months | |||||
Fair Value | $ 542.2 | $ 542.2 | $ 519.1 | |||
Other-than-temporary impairment loss | 0 | $ 0 | 0 | $ 0 | ||
Not designated | Foreign exchange forward contracts | ||||||
Foreign Currency Forward Contracts | ||||||
Derivative asset, fair value | 4 | 4 | ||||
Derivative liability, fair value | 9.6 | 9.6 | ||||
Losses on derivatives | 5.6 | $ 4.4 | 5.3 | $ 3.8 | ||
Not designated | Foreign exchange forward contracts | Held to purchase | ||||||
Foreign Currency Forward Contracts | ||||||
Notional amount of forward contracts | 117.7 | 117.7 | 110 | |||
Not designated | Foreign exchange forward contracts | Held to sell | ||||||
Foreign Currency Forward Contracts | ||||||
Notional amount of forward contracts | $ 32.8 | $ 32.8 | 55.2 | |||
Lumentum | ||||||
Trading securities related to deferred compensation plan | ||||||
Shares held in investment (in shares) | 1.7 | 1.7 | 11.7 | |||
Marketable equity investments | ||||||
Trading securities related to deferred compensation plan | ||||||
Fair Value | $ 64.3 | $ 64.3 | $ 171.3 | |||
Realized gain on sale of marketable equity securities | 53.8 | $ 135.3 | ||||
Income tax effect related to gain on sale of marketable security | $ 0 | |||||
Marketable equity investments | Lumentum | ||||||
Trading securities related to deferred compensation plan | ||||||
Shares held in investment (in shares) | 1.7 | 1.7 | 7.2 | |||
Number of shares sold (in shares) | 1.7 | 5.6 | ||||
Cash equivalents | ||||||
Trading securities related to deferred compensation plan | ||||||
Fair Value | $ 46.1 | $ 46.1 | $ 36.1 | |||
Short-term investments | ||||||
Trading securities related to deferred compensation plan | ||||||
Fair Value | 431.2 | 431.2 | 311.1 | |||
Short-term investments | Marketable equity investments | ||||||
Trading securities related to deferred compensation plan | ||||||
Fair Value | 64.3 | 64.3 | 171.3 | |||
Other non-current assets | ||||||
Trading securities related to deferred compensation plan | ||||||
Fair Value | 0.6 | 0.6 | 0.6 | |||
Trading securities | Short-term investments | ||||||
Trading securities related to deferred compensation plan | ||||||
Deferred compensation plan assets | 2.5 | 2.5 | 2.4 | |||
Trading securities | Short-term investments | Debt securities | ||||||
Trading securities related to deferred compensation plan | ||||||
Deferred compensation plan assets | 0.3 | 0.3 | 0.3 | |||
Trading securities | Short-term investments | Money market instruments and funds | ||||||
Trading securities related to deferred compensation plan | ||||||
Deferred compensation plan assets | 0.8 | 0.8 | 0.8 | |||
Trading securities | Short-term investments | Marketable equity investments | ||||||
Trading securities related to deferred compensation plan | ||||||
Deferred compensation plan assets | $ 1.4 | $ 1.4 | $ 1.3 |
Investments, Forward Contract53
Investments, Forward Contracts and Fair Value Measurements - Contractual Maturities (Details) - Debt securities $ in Millions | Dec. 31, 2016USD ($) |
Amortized Cost/ Carrying Cost | |
Amounts maturing in less than 1 year | $ 327.5 |
Amounts maturing in 1 - 5 years | 149.3 |
Amounts maturing in more than 5 years | 2 |
Total debt available-for-sale securities | 478.8 |
Estimated Fair Value | |
Amounts maturing in less than 1 year | 327.4 |
Amounts maturing in 1 - 5 years | 148.9 |
Amounts maturing in more than 5 years | 1.6 |
Total debt available-for-sale securities | $ 477.9 |
Investments, Forward Contract54
Investments, Forward Contracts and Fair Value Measurements - Measured at Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Jul. 02, 2016 |
Cash and cash equivalents | ||
Assets: | ||
Total assets | $ 295.4 | |
Short-term investments | ||
Assets: | ||
Total assets | 484.7 | |
Restricted cash | ||
Assets: | ||
Total assets | 11.3 | |
Other non-current assets | ||
Assets: | ||
Total assets | 4.5 | |
Other current liabilities | ||
Liability: | ||
Total liabilities | $ 9.6 | |
Recurring basis | Cash and cash equivalents | ||
Assets: | ||
Total assets | 314 | |
Recurring basis | Short-term investments | ||
Assets: | ||
Total assets | 498 | |
Recurring basis | Restricted cash | ||
Assets: | ||
Total assets | 11 | |
Recurring basis | Other non-current assets | ||
Assets: | ||
Total assets | 4.8 | |
Recurring basis | Prepayments and other current assets | ||
Assets: | ||
Total assets | 4 | |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Total debt available-for-sale securities | 67.5 | 46.1 |
Marketable equity securities | 64.3 | 171.3 |
Money market funds | 283.1 | 274.4 |
Trading securities | 2.5 | 2.4 |
Foreign currency forward contracts | 0 | 0 |
Total assets | 417.4 | 494.2 |
Liability: | ||
Foreign currency forward contracts | 0 | 0 |
Total liabilities | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. treasuries | ||
Assets: | ||
Total debt available-for-sale securities | 67.5 | 46.1 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. agencies | ||
Assets: | ||
Total debt available-for-sale securities | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Municipal bonds and sovereign debt instruments | ||
Assets: | ||
Total debt available-for-sale securities | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Asset-backed securities | ||
Assets: | ||
Total debt available-for-sale securities | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate securities | ||
Assets: | ||
Total debt available-for-sale securities | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Certificates of deposits | ||
Assets: | ||
Total debt available-for-sale securities | 0 | 0 |
Recurring basis | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Total debt available-for-sale securities | 410.4 | 301.7 |
Marketable equity securities | 0 | 0 |
Money market funds | 0 | 0 |
Trading securities | 0 | 0 |
Foreign currency forward contracts | 4 | 0 |
Total assets | 414.4 | 301.7 |
Liability: | ||
Foreign currency forward contracts | 9.6 | 0 |
Total liabilities | 9.6 | 0 |
Recurring basis | Significant Other Observable Inputs (Level 2) | U.S. treasuries | ||
Assets: | ||
Total debt available-for-sale securities | 0 | 0 |
Recurring basis | Significant Other Observable Inputs (Level 2) | U.S. agencies | ||
Assets: | ||
Total debt available-for-sale securities | 36.4 | 24.9 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Municipal bonds and sovereign debt instruments | ||
Assets: | ||
Total debt available-for-sale securities | 3.5 | 2 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Asset-backed securities | ||
Assets: | ||
Total debt available-for-sale securities | 62.6 | 50.2 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Corporate securities | ||
Assets: | ||
Total debt available-for-sale securities | 301.9 | 224.6 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Certificates of deposits | ||
Assets: | ||
Total debt available-for-sale securities | 6 | 0 |
Recurring basis | Total fair value | ||
Assets: | ||
Total debt available-for-sale securities | 477.9 | 347.8 |
Marketable equity securities | 64.3 | 171.3 |
Money market funds | 283.1 | 274.4 |
Trading securities | 2.5 | 2.4 |
Foreign currency forward contracts | 4 | 0 |
Total assets | 831.8 | 795.9 |
Liability: | ||
Foreign currency forward contracts | 9.6 | 0 |
Total liabilities | 9.6 | 0 |
Recurring basis | Total fair value | U.S. treasuries | ||
Assets: | ||
Total debt available-for-sale securities | 67.5 | 46.1 |
Recurring basis | Total fair value | U.S. agencies | ||
Assets: | ||
Total debt available-for-sale securities | 36.4 | 24.9 |
Recurring basis | Total fair value | Municipal bonds and sovereign debt instruments | ||
Assets: | ||
Total debt available-for-sale securities | 3.5 | 2 |
Recurring basis | Total fair value | Asset-backed securities | ||
Assets: | ||
Total debt available-for-sale securities | 62.6 | 50.2 |
Recurring basis | Total fair value | Corporate securities | ||
Assets: | ||
Total debt available-for-sale securities | 301.9 | 224.6 |
Recurring basis | Total fair value | Certificates of deposits | ||
Assets: | ||
Total debt available-for-sale securities | $ 6 | $ 0 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jul. 02, 2016 | Dec. 31, 2016 | |
Changes in goodwill | ||
Balance at the beginning of the period | $ 152.1 | |
Currency translation and other adjustments | (2.4) | |
Balance at the end of the period | $ 152.1 | 149.7 |
Network Enablement | ||
Changes in goodwill | ||
Balance at the beginning of the period | 143.8 | |
Currency translation and other adjustments | (2.4) | |
Balance at the end of the period | 143.8 | 141.4 |
Goodwill impairment | 0 | |
Optical Security and Performance Products | ||
Changes in goodwill | ||
Balance at the beginning of the period | 8.3 | |
Currency translation and other adjustments | 0 | |
Balance at the end of the period | 8.3 | $ 8.3 |
Goodwill impairment | 0 | |
Service Enablement | ||
Changes in goodwill | ||
Goodwill impairment | $ 91.4 |
Acquired Developed Technology56
Acquired Developed Technology and Other Intangibles (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2016 | Jan. 02, 2016 | Dec. 31, 2016 | Jan. 02, 2016 | Jul. 02, 2016 | |
Acquired developed technology, customer relationships and other intangibles | |||||
Gross carrying amount of finite lived intangibles | $ 470.8 | $ 470.8 | $ 475.7 | ||
Accumulated Amortization | (426.4) | (426.4) | (415.8) | ||
Net carrying amount of finite lived intangibles | 44.4 | 44.4 | 59.9 | ||
Amortization of acquired developed technologies | 3.7 | $ 4.6 | 7.5 | $ 8.9 | |
Amortization of other intangibles | 3.4 | 3.7 | 6.9 | 7.5 | |
Total amortization of intangible assets | 7.1 | $ 8.3 | 14.4 | $ 16.4 | |
Estimated future amortization expense | |||||
Remainder of 2017 | 13.6 | 13.6 | |||
2,018 | 19.8 | 19.8 | |||
2,019 | 9.3 | 9.3 | |||
2,020 | 1.4 | 1.4 | |||
2,021 | 0.3 | 0.3 | |||
Thereafter | 0 | 0 | |||
Total amortization | 44.4 | 44.4 | |||
Acquired developed technology | |||||
Acquired developed technology, customer relationships and other intangibles | |||||
Gross carrying amount of finite lived intangibles | 365.5 | 365.5 | 369.3 | ||
Accumulated Amortization | (341.8) | (341.8) | (337.3) | ||
Net carrying amount of finite lived intangibles | 23.7 | 23.7 | 32 | ||
Customer relationships | |||||
Acquired developed technology, customer relationships and other intangibles | |||||
Gross carrying amount of finite lived intangibles | 94.5 | 94.5 | 95.6 | ||
Accumulated Amortization | (74.1) | (74.1) | (68) | ||
Net carrying amount of finite lived intangibles | 20.4 | 20.4 | 27.6 | ||
Other | |||||
Acquired developed technology, customer relationships and other intangibles | |||||
Gross carrying amount of finite lived intangibles | 10.8 | 10.8 | 10.8 | ||
Accumulated Amortization | (10.5) | (10.5) | (10.5) | ||
Net carrying amount of finite lived intangibles | $ 0.3 | $ 0.3 | $ 0.3 |
Debts and Letters of Credit (De
Debts and Letters of Credit (Details) | Aug. 17, 2015$ / shares | Dec. 31, 2016USD ($)letter_of_credit | Jan. 02, 2016USD ($) | Dec. 31, 2016USD ($)letter_of_credit$ / shares | Jan. 02, 2016USD ($) | Jul. 02, 2016USD ($) | Aug. 21, 2013USD ($) |
Carrying amounts of the liability and equity components: | |||||||
Short-term debt | $ 0 | $ 0 | $ 0 | ||||
Outstanding Letters of Credit | |||||||
Number of standby letters of credit | letter_of_credit | 12 | 12 | |||||
Letters of credit outstanding | $ 15,200,000 | $ 15,200,000 | |||||
0.625% Senior Convertible Notes | |||||||
Carrying amounts of the liability and equity components: | |||||||
Principal amount of notes | 650,000,000 | 650,000,000 | 650,000,000 | ||||
Unamortized discount of liability component | (47,800,000) | (47,800,000) | (61,700,000) | ||||
Unamortized debt issuance costs | (3,900,000) | (3,900,000) | (5,000,000) | ||||
Carrying value of the liability component | 598,300,000 | 598,300,000 | 583,300,000 | ||||
Carrying amount of equity component | $ 134,400,000 | $ 134,400,000 | 134,400,000 | ||||
Aggregate principal amount of convertible debt | $ 650,000,000 | ||||||
Interest rate on senior convertible notes (as a percent) | 0.625% | 0.625% | 0.625% | ||||
Proceeds from issuance of convertible notes after issuance costs | $ 636,300,000 | ||||||
Conversion price of debt (in dollars per share) | $ / shares | $ 11.28 | $ 11.28 | |||||
Fair market value of convertible debt | $ 672,000,000 | $ 672,000,000 | $ 633,000,000 | ||||
Interest expense for the contractual interest and the amortization of debt discount | |||||||
Effective interest rate (as a percent) | 5.40% | 5.40% | 5.40% | 5.40% | |||
Interest expense-contractual interest | $ 1,000,000 | $ 1,000,000 | $ 2,000,000 | $ 2,000,000 | |||
Accretion of debt discount | $ 7,000,000 | $ 6,600,000 | $ 13,900,000 | $ 13,200,000 |
Restructuring and Related Cha58
Restructuring and Related Charges (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 18 Months Ended | |||||
Dec. 31, 2016USD ($)employee | Jul. 02, 2016USD ($)employee | Jan. 02, 2016USD ($)employee | Mar. 29, 2014employee | Dec. 31, 2016USD ($) | Jan. 02, 2016USD ($) | Apr. 02, 2016employee | Sep. 27, 2014company | |
Summary of various restructuring plans | ||||||||
Accrual balance at the beginning of the period | $ 18 | |||||||
Restructuring Charges (Benefits) | $ 1.8 | $ 1.4 | 1.8 | $ 1.8 | ||||
Cash Settlements | (10.3) | |||||||
Non-cash Settlements and Other Adjustments | (0.1) | |||||||
Accrual balance at the end of the period | 9.4 | $ 18 | 9.4 | |||||
Long-term restructuring accrual | 3.3 | 4.7 | 3.3 | |||||
Number of new public entities (in company) | company | 2 | |||||||
Focused NSE Restructuring Plan | ||||||||
Summary of various restructuring plans | ||||||||
Accrual balance at the beginning of the period | 0 | |||||||
Restructuring Charges (Benefits) | 1.4 | 1.4 | ||||||
Cash Settlements | 0 | |||||||
Non-cash Settlements and Other Adjustments | 0 | |||||||
Accrual balance at the end of the period | $ 1.4 | 0 | 1.4 | |||||
Number of employees impacted (employee) | employee | 2 | |||||||
Other Plan | ||||||||
Summary of various restructuring plans | ||||||||
Accrual balance at the beginning of the period | 0 | |||||||
Restructuring Charges (Benefits) | $ 0.4 | 0.4 | ||||||
Cash Settlements | (0.4) | |||||||
Non-cash Settlements and Other Adjustments | 0 | |||||||
Accrual balance at the end of the period | 0 | 0 | 0 | |||||
NE, SE and Shared Services Agile Restructuring Plan | ||||||||
Summary of various restructuring plans | ||||||||
Accrual balance at the beginning of the period | 8.6 | |||||||
Restructuring Charges (Benefits) | 0 | 0.1 | ||||||
Cash Settlements | (7.3) | |||||||
Non-cash Settlements and Other Adjustments | 0 | |||||||
Accrual balance at the end of the period | 1.4 | $ 8.6 | 1.4 | |||||
Number of employees impacted (employee) | employee | 180 | |||||||
NE and SE Agile Restructuring Plan | ||||||||
Summary of various restructuring plans | ||||||||
Accrual balance at the beginning of the period | 0.8 | |||||||
Restructuring Charges (Benefits) | 0 | 0 | ||||||
Cash Settlements | (0.3) | |||||||
Non-cash Settlements and Other Adjustments | 0 | |||||||
Accrual balance at the end of the period | 0.5 | $ 0.8 | 0.5 | |||||
Number of employees impacted (employee) | employee | 40 | |||||||
NE, SE, and Shared Separation Restructuring Plan | ||||||||
Summary of various restructuring plans | ||||||||
Accrual balance at the beginning of the period | 1.4 | |||||||
Restructuring Charges (Benefits) | 0 | (0.2) | ||||||
Cash Settlements | (0.9) | |||||||
Non-cash Settlements and Other Adjustments | 0 | |||||||
Accrual balance at the end of the period | 0.3 | 1.4 | 0.3 | |||||
Number of employees impacted (employee) | employee | 330 | |||||||
Contractual obligations under the operating lease, net of sublease income, fair value | 0.1 | 0.1 | ||||||
Plans Prior to Fiscal 2015 | ||||||||
Summary of various restructuring plans | ||||||||
Accrual balance at the end of the period | 1.3 | 1.3 | ||||||
NE Product Strategy Restructuring Plan | ||||||||
Summary of various restructuring plans | ||||||||
Accrual balance at the beginning of the period | 1.5 | |||||||
Restructuring Charges (Benefits) | 0 | 0 | ||||||
Cash Settlements | (0.2) | |||||||
Non-cash Settlements and Other Adjustments | (0.1) | |||||||
Accrual balance at the end of the period | 1.2 | 1.5 | 1.2 | |||||
Number of employees impacted (employee) | employee | 60 | |||||||
NE Lease Restructuring Plan | ||||||||
Summary of various restructuring plans | ||||||||
Accrual balance at the beginning of the period | 4 | |||||||
Restructuring Charges (Benefits) | 0 | 0.1 | ||||||
Cash Settlements | (0.8) | |||||||
Non-cash Settlements and Other Adjustments | 0 | |||||||
Accrual balance at the end of the period | 3.3 | 4 | 3.3 | |||||
Contractual obligations under the operating lease, net of sublease income, fair value | 3.3 | 3.3 | ||||||
Other Plans | ||||||||
Summary of various restructuring plans | ||||||||
Accrual balance at the beginning of the period | 1.7 | |||||||
Restructuring Charges (Benefits) | 0 | 0 | ||||||
Cash Settlements | (0.4) | |||||||
Non-cash Settlements and Other Adjustments | 0 | |||||||
Accrual balance at the end of the period | $ 1.3 | $ 1.7 | $ 1.3 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2016 | Jan. 02, 2016 | Dec. 31, 2016 | Jan. 02, 2016 | Jul. 02, 2016 | |
Income Tax Disclosure [Abstract] | |||||
(Benefit from) provision for income taxes | $ 5.8 | $ 1.1 | $ 11.5 | $ 4 | |
Valuation Allowance [Line Items] | |||||
Increase in valuation allowance due to Separation | 8.9 | ||||
Unrecognized tax benefits | 42.3 | 42.3 | $ 41.7 | ||
Interest and penalties accrued | 2.3 | 2.3 | |||
Unrecognized tax benefits that may be recognized during the next twelve months | $ 1 | $ 1 | |||
Continuing operations | |||||
Valuation Allowance [Line Items] | |||||
Tax benefit from discontinued operations | $ 8.8 | $ 22.2 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) shares in Millions | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2016 | Jan. 02, 2016 | Sep. 30, 2016 | Jul. 02, 2016 | |
Class of Stock [Line Items] | |||||
Authorized amount under stock repurchase program | $ 150,000,000 | $ 100,000,000 | |||
Payment for share repurchase | $ 14,200,000 | $ 39,700,000 | $ 40,000,000 | ||
Common stock | |||||
Class of Stock [Line Items] | |||||
Shares delivered and retired (in shares) | 1.9 | ||||
Remaining authorization for future share repurchases | $ 105,700,000 | $ 105,700,000 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Compensation by Function (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Dec. 31, 2016 | Jan. 02, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | $ 9.1 | $ 8.9 | $ 17.8 | $ 24.9 |
Cost of sales | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | 1 | 1.4 | 2 | 2.6 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | 1.6 | 1.9 | 3.3 | 4.7 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | $ 6.5 | $ 5.6 | $ 12.5 | $ 17.6 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Dec. 31, 2016 | Dec. 31, 2016 | Jan. 02, 2016 | Aug. 01, 2015 |
Stock-Based Compensation | ||||
Stock-based compensation capitalized to inventory (in dollars) | $ 0.7 | $ 0.9 | ||
Total incremental stock-based compensation related to plan modification | $ 13.6 | |||
Full Value Awards - Total | ||||
Stock-Based Compensation | ||||
Exercise price (in dollars per share) | $ 0 | $ 0 | ||
Unrecognized stock-based compensation | $ 47.9 | $ 47.9 | ||
Estimated amortization period for unrecognized compensation | 2 years 1 month 18 days | |||
Withholding taxes liability paid | $ 7.8 | $ 7.8 | ||
Remaining incremental expense to be recognized from plan modification | $ 2.4 | |||
Full Value Awards - Total | Minimum | ||||
Stock-Based Compensation | ||||
Vesting period | 1 year | |||
Full Value Awards - Total | Maximum | ||||
Stock-Based Compensation | ||||
Vesting period | 4 years | |||
RSUs | ||||
Stock-Based Compensation | ||||
Granted (in shares) | 3.9 | 5.3 | ||
Restricted Stock Units with Market Conditions (MSU) | ||||
Stock-Based Compensation | ||||
Vesting period | 3 years | |||
Granted (in shares) | 0.4 | 0.5 | ||
Aggregate grant-date fair value (in dollars) | $ 3.3 | $ 2.9 | ||
Restricted Stock Units with Time Based Conditions | ||||
Stock-Based Compensation | ||||
Vesting period | 3 years | |||
Granted (in shares) | 3.5 | 4.8 | ||
Percentage of first tranche vested | 33.00% | |||
Initial vesting period | 1 year | |||
Subsequent vesting period | 2 years |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used for Valuation (Details) - MSUs - Monte Carlo simulation | 6 Months Ended | |
Dec. 31, 2016 | Jan. 02, 2016 | |
Valuation Assumptions | ||
Volatility of common stock (as a percent) | 35.00% | 33.00% |
Average volatility of peer companies (as a percent) | 54.70% | 52.60% |
Average correlation coefficient of peer companies | 0.1856 | 0.0887 |
Risk-free interest rate (as a percent) | 0.80% | 0.80% |
Employee Pension and Other Be64
Employee Pension and Other Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Dec. 31, 2016 | Jan. 02, 2016 | |
Employee Defined Benefit Plans | ||||
Employer contributions | $ 2.2 | |||
Components of the net periodic cost for the pension and benefits plans | ||||
Cash outlays expected during fiscal 2017 | 5.9 | |||
Pension Benefit Plans | ||||
Components of the net periodic cost for the pension and benefits plans | ||||
Service cost | $ 0.1 | $ 0.1 | 0.2 | $ 0.2 |
Interest cost | 0.6 | 0.7 | 1 | 1.5 |
Expected return on plan assets | (0.3) | (0.4) | (0.5) | (0.8) |
Amortization of net actuarial losses | 0.4 | 0.1 | 0.9 | 0.3 |
Net periodic benefit cost | $ 0.8 | $ 0.5 | 1.6 | $ 1.2 |
U.K. | Foreign Pension Plan | ||||
Employee Defined Benefit Plans | ||||
Employer contributions | $ 0.6 |
Commitments and Contingencies65
Commitments and Contingencies (Details) £ in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2016USD ($) | Jan. 02, 2016USD ($) | Dec. 31, 2016USD ($) | Jan. 02, 2016USD ($) | Jul. 02, 2016USD ($) | Jul. 02, 2016GBP (£) | |
Loss Contingencies [Line Items] | ||||||
Guarantee liabilities | $ 0 | $ 0 | $ 0 | |||
Product Warranties | ||||||
Warranty Term for most products | 3 years | |||||
Changes in warranty reserve | ||||||
Balance as of beginning of period | 5.2 | $ 4 | $ 4.9 | $ 3.7 | ||
Provision for warranty | 1.6 | 0.8 | 3.2 | 1.7 | ||
Utilization of reserve | (0.9) | (0.7) | (2) | (1.5) | ||
Adjustments related to pre-existing warranties (including changes in estimates) | (0.6) | 0.2 | (0.8) | 0.4 | ||
Balance as of end of period | $ 5.3 | $ 4.3 | $ 5.3 | $ 4.3 | ||
Judicial ruling | Case related to amendment of pension for foreign subsidiary | ||||||
Loss Contingencies [Line Items] | ||||||
Loss contingency accrual | £ | £ 5.7 |
Operating Segments and Geogra66
Operating Segments and Geographic Information - Information on Reportable Segments (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016USD ($) | Jan. 02, 2016USD ($) | Dec. 31, 2016USD ($)subsegmentsegment | Jan. 02, 2016USD ($) | |
Information on reportable segments | ||||
Number of broad business categories (in segment) | segment | 2 | |||
Net revenue | $ 206.5 | $ 232.1 | $ 417.3 | $ 461.8 |
Gross profit | $ 124.7 | $ 141.8 | $ 249.8 | $ 282.3 |
Gross margin (as a percent) | 60.40% | 61.10% | 59.90% | 61.10% |
Operating income | $ 6.7 | $ 9.2 | $ 16.8 | $ 6.3 |
Operating margin (as a percent) | 3.20% | 4.00% | 4.00% | 1.40% |
Segment Measures | ||||
Information on reportable segments | ||||
Net revenue | $ 206.5 | $ 232.1 | $ 417.3 | $ 461.8 |
Gross profit | $ 129.9 | $ 147.9 | $ 260.2 | $ 294 |
Gross margin (as a percent) | 62.90% | 63.70% | 62.40% | 63.70% |
Operating income | $ 26.9 | $ 30.5 | $ 54.4 | $ 59.2 |
Operating margin (as a percent) | 13.00% | 13.10% | 13.00% | 12.80% |
Reconciling Items | ||||
Information on reportable segments | ||||
Net revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Gross profit | (5.2) | (6.1) | (10.4) | (11.7) |
Operating income | (20.2) | (21.3) | $ (37.6) | (52.9) |
Network and Service Enablement | ||||
Information on reportable segments | ||||
Number of subsegment (in subsegment) | subsegment | 2 | |||
Network and Service Enablement | Segment Measures | ||||
Information on reportable segments | ||||
Net revenue | 157.6 | 173.3 | $ 312.6 | 338.8 |
Gross profit | $ 101.7 | $ 115.1 | $ 200.4 | $ 224.2 |
Gross margin (as a percent) | 64.50% | 66.40% | 64.10% | 66.20% |
Operating income | $ 6 | $ 8 | $ 10.1 | $ 10.4 |
Operating margin (as a percent) | 3.80% | 4.60% | 3.20% | 3.10% |
Network and Service Enablement | Network Enablement | Segment Measures | ||||
Information on reportable segments | ||||
Net revenue | $ 117 | $ 136.4 | $ 235.6 | $ 254 |
Gross profit | $ 74.6 | $ 90.6 | $ 152 | $ 166.3 |
Gross margin (as a percent) | 63.80% | 66.40% | 64.50% | 65.50% |
Network and Service Enablement | Service Enablement | Segment Measures | ||||
Information on reportable segments | ||||
Net revenue | $ 40.6 | $ 36.9 | $ 77 | $ 84.8 |
Gross profit | $ 27.1 | $ 24.5 | $ 48.4 | $ 57.9 |
Gross margin (as a percent) | 66.70% | 66.40% | 62.90% | 68.30% |
Optical Security and Performance Products | Segment Measures | ||||
Information on reportable segments | ||||
Net revenue | $ 48.9 | $ 58.8 | $ 104.7 | $ 123 |
Gross profit | $ 28.2 | $ 32.8 | $ 59.8 | $ 69.8 |
Gross margin (as a percent) | 57.70% | 55.80% | 57.10% | 56.70% |
Operating income | $ 20.9 | $ 22.5 | $ 44.3 | $ 48.8 |
Operating margin (as a percent) | 42.70% | 38.30% | 42.30% | 39.70% |
Operating Segments and Geogra67
Operating Segments and Geographic Information - Segment Reconciling Items (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Dec. 31, 2016 | Jan. 02, 2016 | |
Information on reportable segments | ||||
Amortization of acquired technologies | $ (3.7) | $ (4.6) | $ (7.5) | $ (8.9) |
Gross profit | 124.7 | 141.8 | 249.8 | 282.3 |
Operating income | 6.7 | 9.2 | 16.8 | 6.3 |
Stock-based compensation | (9.1) | (8.9) | (17.8) | (24.9) |
Amortization of intangibles | (3.4) | (3.7) | (6.9) | (7.5) |
Restructuring and related charges | (1.8) | (1.4) | (1.8) | (1.8) |
Segment Measures | ||||
Information on reportable segments | ||||
Gross profit | 129.9 | 147.9 | 260.2 | 294 |
Operating income | 26.9 | 30.5 | 54.4 | 59.2 |
Reconciling Items | ||||
Information on reportable segments | ||||
Stock-based compensation | (1) | (1.4) | (2) | (2.6) |
Amortization of acquired technologies | (3.7) | (4.6) | (7.5) | (8.9) |
Other charges related to non-recurring activities | (0.5) | (0.1) | (0.9) | (0.2) |
Gross profit | (5.2) | (6.1) | (10.4) | (11.7) |
Operating income | (20.2) | (21.3) | (37.6) | (52.9) |
Stock-based compensation | (9.1) | (8.9) | (17.8) | (24.9) |
Amortization of intangibles | (7.1) | (8.3) | (14.4) | (16.4) |
Other charges related to non-recurring activities | (2.2) | (2.7) | (3.6) | (9.8) |
Restructuring and related charges | $ (1.8) | $ (1.4) | $ (1.8) | $ (1.8) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ in Millions | 1 Months Ended |
Jan. 31, 2017USD ($) | |
Subsequent Event [Line Items] | |
Percentage of global workforce affected | 10.00% |
Expected restructuring charges | $ 30 |
Severance Charges | |
Subsequent Event [Line Items] | |
Expected restructuring charges | $ 24 |