x |
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For
the quarterly period ended February 28, 2010.
|
or
|
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For
the transition period from _________ to
_________.
|
Commission
File Number: 1-6453
|
|
National
Semiconductor Corporation
(Exact
name of registrant as specified in its charter)
|
|
DELAWARE
(State
of Incorporation)
|
95-2095071
(I.R.S.
Employer Identification No.)
|
2900
SEMICONDUCTOR DRIVE, P.O. BOX 58090
SANTA CLARA, CALIFORNIA
(Address
of principal executive offices)
|
95052-8090
(Zip
Code)
|
(408) 721-5000
(Registrant’s
telephone number, including area
code)
|
Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
|
|||||
Yes
x
|
No
o
|
||||
Indicate
by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).
|
|||||
Yes
o
|
No o
|
||||
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.
|
|||||
Large
accelerated filer x
|
Non-accelerated
filer o
|
||||
Accelerated
filer o
|
Smaller
reporting company o
|
||||
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
|
|||||
Yes o
|
No x
|
||||
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.
|
|||||
Title of Each Class
|
Outstanding at February 28,
2010
|
||||
Common
stock, par value $0.50 per share
|
238,062,353
|
Page
|
|
3
|
|
4
|
|
5
|
|
6-22
|
|
23-34
|
|
34
|
|
35
|
|
36
|
|
37-43
|
|
44
|
|
45
|
|
46
|
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
(In
Millions, Except Per Share Amounts)
|
Feb.
28,
2010
|
Mar.
1,
2009
|
Feb.
28,
2010
|
Mar.
1,
2009
|
||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
Net
sales
|
$
|
361.9
|
$
|
292.4
|
$
|
1,020.9
|
$
|
1,179.6
|
||||||||
Cost
of sales
|
118.2
|
124.3
|
360.0
|
426.9
|
||||||||||||
Gross
margin
|
243.7
|
168.1
|
660.9
|
752.7
|
||||||||||||
Research
and development
|
69.0
|
72.9
|
202.5
|
254.1
|
||||||||||||
Selling,
general and administrative
|
81.7
|
66.5
|
235.7
|
217.8
|
||||||||||||
Severance
and restructuring expenses (recovery), net
|
6.4
|
(1.4
|
)
|
12.8
|
27.8
|
|||||||||||
Other
operating expense (income), net
|
0.6
|
(0.2
|
)
|
(0.3
|
)
|
(0.4
|
)
|
|||||||||
Operating
expenses, net
|
157.7
|
137.8
|
450.7
|
499.3
|
||||||||||||
Operating
income
|
86.0
|
30.3
|
210.2
|
253.4
|
||||||||||||
Interest
income
|
0.4
|
2.0
|
1.3
|
9.6
|
||||||||||||
Interest
expense
|
(14.8
|
)
|
(18.7
|
)
|
(45.5
|
)
|
(55.7
|
)
|
||||||||
Other
non-operating income (expense), net
|
0.8
|
1.0
|
6.1
|
(14.1
|
)
|
|||||||||||
Income
before taxes
|
72.4
|
14.6
|
172.1
|
193.2
|
||||||||||||
Income
tax expense (benefit)
|
19.2
|
(6.5
|
)
|
42.1
|
56.2
|
|||||||||||
Net
income
|
$
|
53.2
|
$
|
21.1
|
$
|
130.0
|
$
|
137.0
|
||||||||
Earnings
per share:
|
||||||||||||||||
Basic
|
$
|
0.22
|
$
|
0.09
|
$
|
0.55
|
$
|
0.60
|
||||||||
Diluted
|
$
|
0.22
|
$
|
0.09
|
$
|
0.54
|
$
|
0.58
|
||||||||
Weighted-average
common and potential common shares outstanding:
|
||||||||||||||||
Basic
|
237.3
|
228.4
|
235.8
|
228.7
|
||||||||||||
Diluted
|
242.5
|
231.3
|
240.5
|
235.5
|
||||||||||||
See
accompanying Notes to Condensed Consolidated Financial
Statements
|
(In
Millions, Except Per Share Amounts)
|
Feb.
28,
2010
|
May
31,
2009
|
||||||
ASSETS
|
(Unaudited)
|
|||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$
|
868.6
|
$
|
700.3
|
||||
Receivables,
less allowances of $30.1 in fiscal 2010 and $18.7 in fiscal
2009
|
87.4
|
71.7
|
||||||
Inventories
|
113.9
|
134.6
|
||||||
Deferred
tax assets
|
73.0
|
72.6
|
||||||
Other
current assets
|
112.9
|
108.0
|
||||||
Total
current assets
|
1,255.8
|
1,087.2
|
||||||
Property,
plant and equipment, net
|
419.2
|
461.8
|
||||||
Goodwill
|
66.1
|
61.5
|
||||||
Deferred
tax assets, net
|
258.5
|
251.5
|
||||||
Other
assets
|
103.3
|
101.3
|
||||||
Total
assets
|
$
|
2,102.9
|
$
|
1,963.3
|
||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Current
portion of long-term debt
|
$
|
339.0
|
$
|
62.5
|
||||
Accounts
payable
|
45.8
|
40.3
|
||||||
Accrued
expenses
|
165.1
|
144.6
|
||||||
Income
taxes payable
|
14.3
|
28.2
|
||||||
Total
current liabilities
|
564.2
|
275.6
|
||||||
Long-term
debt
|
906.2
|
1,227.4
|
||||||
Long-term
income taxes payable
|
169.3
|
162.6
|
||||||
Other
non-current liabilities
|
115.9
|
120.7
|
||||||
Total
liabilities
|
1,755.6
|
1,786.3
|
||||||
Commitments
and contingencies
|
||||||||
Shareholders’
equity:
|
||||||||
Common
stock of $0.50 par value. Authorized 850,000,000 shares
|
||||||||
Issued
and outstanding:
|
||||||||
238,062,353
in fiscal 2010 and 232,605,355 in fiscal 2009
|
119.0
|
116.3
|
||||||
Additional
paid-in-capital
|
161.9
|
67.6
|
||||||
Retained
earnings
|
190.1
|
116.8
|
||||||
Accumulated
other comprehensive loss
|
(123.7
|
)
|
(123.7
|
)
|
||||
Total
shareholders’ equity
|
347.3
|
177.0
|
||||||
Total
liabilities and shareholders’ equity
|
$
|
2,102.9
|
$
|
1,963.3
|
||||
See
accompanying Notes to Condensed Consolidated Financial
Statements
|
Nine
Months Ended
|
||||||||
(In
Millions)
|
Feb.
28,
2010
|
Mar.
1,
2009
|
||||||
Cash
flows from operating activities:
|
(Unaudited)
|
|||||||
Net
income
|
$
|
130.0
|
$
|
137.0
|
||||
Adjustments
to reconcile net income with net cash provided by
|
||||||||
operating
activities:
|
||||||||
Depreciation
and amortization
|
71.6
|
92.0
|
||||||
Share-based
compensation
|
49.9
|
52.4
|
||||||
Excess
tax benefit from share-based payment arrangements
|
(0.2
|
)
|
(4.4
|
)
|
||||
Tax
(expense) benefit associated with stock options
|
(6.7
|
)
|
6.8
|
|||||
(Gain)
loss on investments
|
(6.1
|
)
|
14.1
|
|||||
Non-cash
restructuring recovery
|
(5.6
|
)
|
(0.5
|
)
|
||||
Loss
(gain) on disposal of equipment
|
1.0
|
(0.3
|
)
|
|||||
Other,
net
|
0.9
|
2.1
|
||||||
Changes
in certain assets and liabilities, net:
|
||||||||
Receivables
|
(17.4
|
)
|
52.2
|
|||||
Inventories
|
20.3
|
(1.2
|
)
|
|||||
Other
current assets
|
(3.5
|
)
|
0.5
|
|||||
Accounts
payable and accrued expenses
|
14.6
|
(57.3
|
)
|
|||||
Current
and deferred income taxes
|
(15.5
|
)
|
30.3
|
|||||
Other
non-current liabilities
|
12.9
|
(31.5
|
)
|
|||||
Net
cash provided by operating activities
|
246.2
|
292.2
|
||||||
Cash
flows from investing activities:
|
||||||||
Purchase
of property, plant and equipment
|
(25.9
|
)
|
(75.7
|
)
|
||||
Proceeds
from sale of property, plant and equipment
|
2.0
|
1.0
|
||||||
Business
acquisition, net of cash acquired
|
(4.8
|
)
|
-
|
|||||
Funding
of benefit plan
|
(1.5
|
)
|
(6.2
|
)
|
||||
Redemption
and net realized losses of benefit plan
|
7.6
|
10.4
|
||||||
Other,
net
|
(2.2
|
)
|
0.7
|
|||||
Net
cash used in investing activities
|
(24.8
|
)
|
(69.8
|
)
|
||||
Cash
flows from financing activities:
|
||||||||
Repayment
of bank borrowing
|
(46.8
|
)
|
(47.0
|
)
|
||||
Payment
on software license obligations
|
(6.3
|
)
|
-
|
|||||
Excess
tax benefit from share-based payment arrangements
|
0.2
|
4.4
|
||||||
Minimum
tax withholding paid on behalf of employees for net share
settlements
|
(1.7
|
)
|
(0.2
|
)
|
||||
Issuance
of common stock
|
59.5
|
35.1
|
||||||
Cash
payments in connection with stock option exchange program
|
(1.3
|
)
|
-
|
|||||
Purchase
and retirement of treasury stock
|
-
|
(128.4
|
)
|
|||||
Cash
dividends declared and paid
|
(56.7
|
)
|
(46.0
|
)
|
||||
Net
cash used in financing activities
|
(53.1
|
)
|
(182.1
|
)
|
||||
Net
change in cash and cash equivalents
|
168.3
|
40.3
|
||||||
Cash
and cash equivalents at beginning of period
|
700.3
|
736.8
|
||||||
Cash
and cash equivalents at end of period
|
$
|
868.6
|
$
|
777.1
|
||||
See
accompanying Notes to Condensed Consolidated Financial
Statements
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
(In
Millions)
|
Feb.
28,
2010
|
Mar.
1,
2009
|
Feb.
28,
2010
|
Mar.
1,
2009
|
|||||||||
Numerator:
|
|||||||||||||
Net
income
|
$
|
53.2
|
$
|
21.1
|
$
|
130.0
|
$
|
137.0
|
|||||
Denominator:
|
|||||||||||||
Weighted-average
common shares outstanding
|
|||||||||||||
used
for basic earnings per share
|
237.3
|
228.4
|
235.8
|
228.7
|
|||||||||
Effect
of dilutive securities:
|
|||||||||||||
Stock
options, restricted stock and restricted stock units
|
5.2
|
2.9
|
4.7
|
6.8
|
|||||||||
Weighted-average
common and potential common shares outstanding used for diluted earnings
per share
|
242.5
|
231.3
|
240.5
|
235.5
|
|||||||||
Anti-dilutive
common equivalent shares:
|
|||||||||||||
Stock
options:
|
|||||||||||||
Number
of shares
|
29.0
|
52.0
|
37.3
|
41.4
|
|||||||||
Weighted-average
exercise price
|
$
|
21.25
|
$
|
21.15
|
$
|
22.00
|
$
|
23.48
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||
(In
Millions, Except Per Share Amounts)
|
Feb.
28,
2010
|
Mar.
1,
2009
|
Feb.
28,
2010
|
Mar.
1,
2009
|
||||||||||
Cost
of sales:
|
||||||||||||||
Gross
compensation
|
$
|
2.3
|
$
|
4.2
|
$
|
7.6
|
$
|
12.3
|
||||||
Capitalized
in inventory during the period
|
(2.0
|
)
|
(3.1
|
)
|
(6.1
|
)
|
(10.4
|
)
|
||||||
Realized
from inventory during the period
|
2.1
|
3.5
|
6.7
|
10.6
|
||||||||||
2.4
|
4.6
|
8.2
|
12.5
|
|||||||||||
Research
and development
|
4.4
|
6.5
|
13.9
|
19.3
|
||||||||||
Selling,
general and administrative
|
12.4
|
7.2
|
34.3
|
22.0
|
||||||||||
Total
share-based compensation included in income
before
taxes
|
19.2
|
18.3
|
56.4
|
53.8
|
||||||||||
Income
tax benefit
|
(6.3
|
)
|
(5.3
|
)
|
(17.8
|
)
|
(16.1
|
)
|
||||||
Total
share-based compensation, net of tax, included
in
net income
|
$
|
12.9
|
$
|
13.0
|
$
|
38.6
|
$
|
37.7
|
||||||
Share-based
compensation effects on earnings per share:
|
||||||||||||||
Basic
|
$
|
0.05
|
$
|
0.06
|
$
|
0.16
|
$
|
0.16
|
||||||
Diluted
|
$
|
0.05
|
$
|
0.06
|
$
|
0.16
|
$
|
0.16
|
||||||
Share-based
compensation capitalized in inventory
|
$
|
0.9
|
$
|
1.8
|
$
|
0.9
|
$
|
1.8
|
||||||
Total
gross share-based compensation
|
$
|
19.1
|
$
|
17.9
|
$
|
55.8
|
$
|
53.6
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||
Feb.
28,
2010
|
Mar.
1,
2009
|
Feb.
28,
2010
|
Mar.
1,
2009
|
||||||
Stock
Option Plans:
|
|||||||||
Expected
life (in years)
|
3.9
|
3.8
|
3.8
|
3.7
|
|||||
Expected
volatility
|
38
|
%
|
65
|
%
|
45
|
%
|
43
|
%
|
|
Risk-free
interest rate
|
1.8
|
%
|
1.2
|
%
|
1.9
|
%
|
2.6
|
%
|
|
Dividend
yield
|
2.2
|
%
|
2.5
|
%
|
2.3
|
%
|
1.3
|
%
|
|
Stock
Purchase Plans:
|
|||||||||
Expected
life (in years)
|
n/a
|
n/a
|
0.8
|
0.8
|
|||||
Expected
volatility
|
n/a
|
n/a
|
42
|
%
|
38
|
%
|
|||
Risk-free
interest rate
|
n/a
|
n/a
|
0.3
|
%
|
1.2
|
%
|
|||
Dividend
yield
|
n/a
|
n/a
|
2.3
|
%
|
1.5
|
%
|
Feb.
28, 2010
|
May
31, 2009
|
|||||||||||||||
Executive
Officer Retention Awards:
|
||||||||||||||||
Closing
stock price
|
$
|
14.48
|
$
|
13.88
|
||||||||||||
Remaining
term (in years)
|
0.7
|
1.5
|
||||||||||||||
Expected
volatility
|
38
|
%
|
60
|
%
|
||||||||||||
Risk-free
interest rate
|
0.3
|
%
|
0.9
|
%
|
||||||||||||
Dividend
yield
|
2.2
|
%
|
2.0
|
%
|
·
|
Level 1. Valuations
based on quoted prices in active markets for identical assets or
liabilities that an entity has the ability to
access.
|
·
|
Level 2. Valuations
based on quoted prices for similar assets or liabilities, quoted prices
for identical assets or liabilities 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 3. Valuations
based on inputs that are supported by little or no market activity and
that are significant to the fair value of the assets or
liabilities.
|
(In
Millions)
|
Quoted
Prices in Active Markets for Identical Instruments
(Level
1)
|
Significant
Other Observable Inputs
(Level
2)
|
Total
|
||||||
Balances
at February 28, 2010:
|
|||||||||
Assets:
|
|||||||||
Institutional
money-market funds
|
$
|
149.8
|
$
|
-
|
$
|
149.8
|
|||
Commercial
paper
|
-
|
30.0
|
30.0
|
||||||
Investment
funds – Deferred compensation plan assets
|
40.6
|
-
|
40.6
|
||||||
Total
assets measured at fair value
|
$
|
190.4
|
$
|
30.0
|
$
|
220.4
|
|||
Balances
at May 31, 2009:
|
|||||||||
Assets:
|
|||||||||
Institutional
money-market funds
|
$
|
368.4
|
$
|
-
|
$
|
368.4
|
|||
Investment
funds – Deferred compensation plan assets
|
40.9
|
-
|
40.9
|
||||||
Total
assets measured at fair value
|
$
|
409.3
|
$
|
-
|
$
|
409.3
|
|||
(In
Millions)
|
Feb.
28,
2010
|
May
31,
2009
|
|||||
Receivable
allowances:
|
|||||||
Doubtful
accounts
|
$
|
0.5
|
$
|
1.1
|
|||
Returns
and allowances
|
29.6
|
17.6
|
|||||
Total
receivable allowances
|
$
|
30.1
|
$
|
18.7
|
|||
Inventories:
|
|||||||
Raw
materials
|
$
|
7.7
|
$
|
5.0
|
|||
Work
in progress
|
71.8
|
81.6
|
|||||
Finished
goods
|
34.4
|
48.0
|
|||||
Total
inventories
|
$
|
113.9
|
$
|
134.6
|
|||
Other
current assets:
|
|||||||
Prepaid
income taxes
|
$
|
69.9
|
$
|
71.1
|
|||
Prepaid
expenses
|
21.5
|
31.2
|
|||||
Assets
held for sale
|
20.7
|
5.4
|
|||||
Other
|
0.8
|
0.3
|
|||||
Total
other current assets
|
$
|
112.9
|
$
|
108.0
|
|||
Property,
plant and equipment:
|
|||||||
Total
property, plant and equipment
|
$
|
2,393.3
|
$
|
2,505.3
|
|||
Less
accumulated depreciation and amortization
|
(1,974.1
|
)
|
(2,043.5
|
)
|
|||
Total
property, plant and equipment, net
|
$
|
419.2
|
$
|
461.8
|
|||
Other
assets:
|
|||||||
Deposits
|
$
|
2.2
|
$
|
7.1
|
|||
Debt
issuance costs
|
6.1
|
8.2
|
|||||
Income
tax receivable
|
41.7
|
35.2
|
|||||
Deferred
compensation plan assets
|
40.6
|
40.9
|
|||||
Other
|
12.7
|
9.9
|
|||||
Total
other assets
|
$
|
103.3
|
$
|
101.3
|
|||
Accrued
expenses:
|
|||||||
Payroll
and employee related
|
$
|
96.6
|
$
|
39.5
|
|||
Accrued
interest payable
|
11.6
|
24.9
|
|||||
Severance
and restructuring expenses
|
20.4
|
44.4
|
|||||
Other
|
36.5
|
35.8
|
|||||
Total
accrued expenses
|
$
|
165.1
|
$
|
144.6
|
|||
Other
non-current liabilities:
|
|||||||
Accrued
pension cost
|
$
|
58.6
|
$
|
52.7
|
|||
Deferred
compensation plan liability
|
40.6
|
40.9
|
|||||
Other
|
16.7
|
27.1
|
|||||
Total
other non-current liabilities
|
$
|
115.9
|
$
|
120.7
|
(In
Millions)
|
Feb.
28,
2010
|
May
31,
2009
|
|||||
Accumulated
other comprehensive loss:
|
|||||||
Defined
benefit pension plans
|
$
|
(123.5
|
)
|
$
|
(123.5
|
)
|
|
Other
|
(0.2
|
)
|
(0.2
|
)
|
|||
Total
accumulated other comprehensive loss
|
$
|
(123.7
|
)
|
$
|
(123.7
|
)
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
(In
Millions)
|
Feb.
28,
2010
|
Mar.
1,
2009
|
Feb.
28,
2010
|
Mar.
1,
2009
|
|||||||||
Other
operating expense (income), net:
|
|||||||||||||
Net
intellectual property income
|
$
|
-
|
$
|
(0.2
|
)
|
$
|
-
|
$
|
(0.4
|
)
|
|||
Litigation
settlement
|
-
|
-
|
(0.5
|
)
|
-
|
||||||||
Other
|
0.6
|
-
|
0.2
|
-
|
|||||||||
Total
other operating expense (income), net
|
$
|
0.6
|
$
|
(0.2
|
)
|
$
|
(0.3
|
)
|
$
|
(0.4
|
)
|
||
Other
non-operating income (expense), net:
|
|||||||||||||
Trading
securities:
|
|||||||||||||
Change
in net unrealized holding gains/losses
|
$
|
0.5
|
$
|
1.0
|
$
|
5.8
|
$
|
(14.1
|
)
|
||||
Non-marketable
investments:
|
|||||||||||||
Gain
from liquidation of investment
|
0.3
|
-
|
0.3
|
-
|
|||||||||
Total
gain (loss) on investments
|
0.8
|
1.0
|
6.1
|
(14.1
|
)
|
||||||||
Total
other non-operating income (expense), net
|
$
|
0.8
|
$
|
1.0
|
$
|
6.1
|
$
|
(14.1
|
)
|
Nine
Months Ended
|
||||||||
(In
Millions)
|
Feb.
28,
2010
|
Mar.
1,
2009
|
||||||
Supplemental
Disclosure of Cash Flow Information:
|
||||||||
Cash
paid for:
|
||||||||
Interest
|
$
|
56.7
|
$
|
66.5
|
||||
Income
taxes
|
$
|
74.0
|
$
|
21.6
|
||||
Supplemental
Schedule of Non-Cash Investing and Financing Activities:
|
||||||||
Acquisition
of software under license obligations, net
|
$
|
-
|
$
|
3.3
|
||||
Cancellation
of shares withheld for taxes on restricted stock
and
performance share unit awards
|
$
|
1.7
|
$
|
0.3
|
||||
Deposit
applied to purchase equipment
|
$
|
13.8
|
$
|
-
|
(In
Millions)
|
Analog
Segment
|
All
Others
|
Total
|
||||||||
Three
Months Ended February 28, 2010:
|
|||||||||||
March
2009 workforce reduction and plant closures:
|
|||||||||||
Other
exit-related costs
|
$
|
-
|
$
|
7.0
|
$
|
7.0
|
|||||
Severance
|
-
|
0.2
|
0.2
|
||||||||
Gain
on sale of equipment
|
-
|
(0.6
|
)
|
(0.6
|
)
|
||||||
Other
equipment gain, net
|
-
|
(0.2
|
)
|
(0.2
|
)
|
||||||
Total
severance and restructuring expenses, net
|
$
|
-
|
$
|
6.4
|
$
|
6.4
|
|||||
Nine
Months Ended February 28, 2010:
|
|||||||||||
March
2009 workforce reduction and plant closures:
|
|||||||||||
Other
exit-related costs
|
$
|
-
|
$
|
20.2
|
$
|
20.2
|
|||||
Severance
|
-
|
0.3
|
0.3
|
||||||||
Gain
on sale of equipment
|
-
|
(0.6
|
)
|
(0.6
|
)
|
||||||
Other
equipment gain, net
|
-
|
(1.4
|
)
|
(1.4
|
)
|
||||||
Release
of reserves:
|
|||||||||||
Severance
|
(0.4
|
)
|
(3.0
|
)
|
(3.4
|
)
|
|||||
(0.4
|
)
|
15.5
|
15.1
|
||||||||
November
2008 workforce reduction:
|
|||||||||||
Release
of reserves:
|
|||||||||||
Severance
|
(0.2
|
)
|
(2.0
|
)
|
(2.2
|
)
|
|||||
Fiscal
2008 workforce reduction and manufacturing restructure:
|
|||||||||||
Release
of reserves:
|
|||||||||||
Other
exit-related costs
|
-
|
(0.1
|
)
|
(0.1
|
)
|
||||||
Total
severance and restructuring expenses, net
|
$
|
(0.6
|
)
|
$
|
13.4
|
$
|
12.8
|
(In
Millions)
|
Analog
Segment
|
All
Others
|
Total
|
||||||
March
2009 workforce reduction and plant closures:
|
|||||||||
Severance
|
$
|
14.0
|
$
|
46.0
|
$
|
60.0
|
|||
Other
exit-related costs
|
-
|
23.5
|
23.5
|
||||||
Impairment
of equipment
|
-
|
54.3
|
54.3
|
||||||
Gain
on sale of equipment
|
-
|
(0.6
|
)
|
(0.6
|
)
|
||||
Other
equipment gain, net
|
-
|
(1.4
|
)
|
(1.4
|
)
|
||||
Release
of reserves:
|
|||||||||
Severance
|
(0.4
|
)
|
(3.0
|
)
|
(3.4
|
)
|
|||
Total
cumulative severance and restructuring expenses for the
|
|||||||||
March
2009 workforce reduction and plant closures
|
$
|
13.6
|
$
|
118.8
|
$
|
132.4
|
(In
Millions)
|
March
2009
Workforce
Reduction
and
Plant Closures
|
Cost
Reduction and
Restructuring
Actions
in
Prior Years
|
||||||||||||||||
Severance
|
Other
Exit-Related Costs
|
Severance
|
Other
Exit-Related Costs
|
Total
|
||||||||||||||
Balance
at May 31, 2009
|
$
|
33.9
|
$
|
1.1
|
$
|
9.1
|
$
|
0.3
|
$
|
44.4
|
||||||||
Cost
reduction charges
|
0.3
|
20.2
|
-
|
-
|
20.5
|
|||||||||||||
Cash
payments
|
(15.2
|
)
|
(20.7
|
)
|
(3.5
|
)
|
(0.2
|
)
|
(39.6
|
)
|
||||||||
Exchange
rate adjustment
|
0.6
|
-
|
0.2
|
-
|
0.8
|
|||||||||||||
Release
of residual reserves
|
(3.4
|
)
|
-
|
(2.2
|
)
|
(0.1
|
)
|
(5.7
|
)
|
|||||||||
Balance
at February 28, 2010
|
$
|
16.2
|
$
|
0.6
|
$
|
3.6
|
$
|
-
|
$
|
20.4
|
(In
Millions)
|
Total
|
||
Net
assets
|
$
|
0.2
|
|
Acquired
developed technology
|
0.8
|
||
Other
intangible assets
|
1.1
|
||
Goodwill
|
4.6
|
||
Deferred
tax liability
|
(0.6
|
)
|
|
Total
|
$
|
6.1
|
(In
Millions)
|
Analog
Segment
|
All
Others
|
Total
|
|||||||||
Balances
at May 31, 2009
|
$
|
54.2
|
$
|
7.3
|
$
|
61.5
|
||||||
Acquisition
of ERI
|
4.6
|
-
|
4.6
|
|||||||||
Balances
at February 28, 2010
|
$
|
58.8
|
$
|
7.3
|
$
|
66.1
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
(In
Millions)
|
Feb.
28,
2010
|
Mar.
1,
2009
|
Feb.
28,
2010
|
Mar.
1,
2009
|
|||||||||
Service
cost of benefits earned during the period
|
$
|
0.8
|
$
|
0.7
|
$
|
2.5
|
$
|
2.6
|
|||||
Plan
participant contributions
|
(0.2
|
)
|
(0.1
|
)
|
(0.6
|
)
|
(0.6)
|
||||||
Interest
cost on projected benefit obligation
|
4.0
|
3.5
|
12.1
|
11.7
|
|||||||||
Expected
return on plan assets
|
(3.5
|
)
|
(3.9
|
)
|
(10.4
|
)
|
(13.1
|
)
|
|||||
Net
amortization and deferral
|
1.4
|
0.7
|
4.2
|
2.4
|
|||||||||
Net
periodic pension cost
|
$
|
2.5
|
$
|
0.9
|
$
|
7.8
|
$
|
3.0
|
Number
of Shares
(In
Millions)
|
Weighted-Average
Exercise Price
|
|||||
Outstanding
at May 31, 2009
|
53.8
|
$
|
19.95
|
|||
Granted
|
6.4
|
$
|
13.11
|
|||
Exercised
|
(4.2
|
)
|
$
|
11.48
|
||
Forfeited
|
(13.3
|
)
|
$
|
23.70
|
||
Expired
|
(4.3
|
)
|
$
|
21.54
|
||
Outstanding
at February 28, 2010
|
38.4
|
$
|
18.26
|
Number
of
Shares
(In
Millions)
|
Weighted-Average
Exercise
Price
|
Aggregate
Intrinsic
Value
(In
Millions)
|
Weighted-Average
Remaining
Contractual
Life
(In
Years)
|
||||||
Fully
vested and
|
|||||||||
expected
to vest
|
37.9
|
$18.33
|
$48.9
|
2.3
|
|||||
Currently
exercisable
|
28.6
|
$19.49
|
$36.7
|
1.4
|
Number
of Shares
(In
Millions)
|
Weighted-Average
Grand-Date
Fair Value
|
|||||
Outstanding
at May 31, 2009
|
1.1
|
$
|
15.59
|
|||
Granted
|
2.1
|
$
|
13.74
|
|||
Vested
|
(0.1
|
)
|
$
|
22.03
|
||
Forfeited
|
(0.1
|
)
|
$
|
13.20
|
||
Outstanding
at February 28, 2010
|
3.0
|
$
|
14.19
|
(In
Millions)
|
Analog
Segment
|
All
Others
|
Total
|
||||||
Three
months ended February 28, 2010:
|
|||||||||
Sales
to unaffiliated customers
|
$
|
339.5
|
$
|
22.4
|
$
|
361.9
|
|||
Segment
income (loss) before taxes
|
$
|
87.5
|
$
|
(15.1
|
)
|
$
|
72.4
|
||
Three
months ended March 1, 2009:
|
|||||||||
Sales
to unaffiliated customers
|
$
|
267.3
|
$
|
25.1
|
$
|
292.4
|
|||
Segment
income (loss) before taxes
|
$
|
21.8
|
$
|
(7.2
|
)
|
$
|
14.6
|
||
Nine
months ended February 28, 2010:
|
|||||||||
Sales
to unaffiliated customers
|
$
|
957.2
|
$
|
63.7
|
$
|
1,020.9
|
|||
Segment
income (loss) before taxes
|
$
|
212.0
|
$
|
(39.9
|
)
|
$
|
172.1
|
||
Nine
months ended March 1, 2009:
|
|||||||||
Sales
to unaffiliated customers
|
$
|
1,074.0
|
$
|
105.6
|
$
|
1,179.6
|
|||
Segment
income (loss) before taxes
|
$
|
211.3
|
$
|
(18.1
|
)
|
$
|
193.2
|
·
|
growing
our core revenues by marketing our extensive portfolio of general purpose
analog products to a broad base of customers utilizing our established
distribution channels and industry leading design
tools;
|
·
|
identifying
and understanding the complex application-specific system problems
addressable by analog innovation;
|
·
|
providing
energy efficient, analog-intensive solutions that enable customers to
differentiate their products while reducing the power consumption of their
systems;
|
·
|
targeting
our analog solutions towards emerging areas or applications that can
provide further growth on top of our core business (current examples would
include LED lighting, renewable energy, portable medical, communications
infrastructure and personal mobile devices);
|
·
|
consistently
delivering competitive products with superior manufacturing and logistics
execution to our customers, and
|
·
|
consistently
delivering superior returns on invested capital to our
shareholders.
|
a)
|
Revenue
Recognition
|
b)
|
Valuation
of Inventories
|
c)
|
Impairment
of Goodwill, Intangible Assets and Other Long-lived
Assets
|
·
|
significant
decrease in the market value of an asset;
|
·
|
significant
changes in the extent or manner for which the asset is being used or in
its physical condition;
|
·
|
significant
change, delay or departure in our business strategy related to the
asset;
|
·
|
significant
negative changes in the business climate, industry or economic conditions;
and
|
·
|
current
period operating losses or negative cash flow combined with a history of
similar losses or a forecast that indicates continuing losses associated
with the use of an asset.
|
|
d)
|
Income
Taxes
|
|
e)
|
Share-based
Compensation
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||||
(In
Millions)
|
Feb.
28,
2010
|
%
Change
|
Mar.
1,
2009
|
Feb.
28,
2010
|
%
Change
|
Mar.
1,
2009
|
||||||||||||
Net
sales
|
$
|
361.9
|
23.8
%
|
$
|
292.4
|
$
|
1,020.9
|
(13.5
%
|
)
|
$
|
1,179.6
|
|||||||
Gross
margin
|
$
|
243.7
|
$
|
168.1
|
$
|
660.9
|
$
|
752.7
|
||||||||||
As
a % of net sales
|
67.3
|
%
|
57.5
|
%
|
64.7
|
%
|
63.8
|
%
|
||||||||||
Operating
income
|
$
|
86.0
|
$
|
30.3
|
$
|
210.2
|
$
|
253.4
|
||||||||||
As
a % of net sales
|
23.8
|
%
|
10.4
|
%
|
20.6
|
%
|
21.5
|
%
|
||||||||||
Net
income
|
$
|
53.2
|
$
|
21.1
|
$
|
130.0
|
$
|
137.0
|
||||||||||
As
a % of net sales
|
14.7
|
%
|
7.2
|
%
|
12.7
|
%
|
11.6
|
%
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||||||
(In
Millions)
|
Feb.
28,
2010
|
%
Change
|
Mar.
1,
2009
|
Feb.
28,
2010
|
%
Change
|
Mar.
1,
2009
|
|||||||||||
Analog
segment
|
$
|
339.5
|
27.0%
|
$
|
267.3
|
$
|
957.2
|
(10.9%
|
)
|
$
|
1,074.0
|
||||||
As
a % of net sales
|
93.8
|
%
|
91.4
|
%
|
93.8
|
%
|
91.0
|
%
|
|||||||||
All
others
|
$
|
22.4
|
(10.8%
|
)
|
$
|
25.1
|
$
|
63.7
|
(39.7%
|
)
|
$
|
105.6
|
|||||
As
a % of net sales
|
6.2
|
%
|
8.6
|
%
|
6.2
|
%
|
9.0
|
%
|
|||||||||
Total
net sales
|
$
|
361.9
|
$
|
292.4
|
$
|
1,020.9
|
$
|
1,179.6
|
|||||||||
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
Three Months Ended |
Nine
Months Ended
|
||||||||||||||||
(In
Millions)
|
Feb.
28,
2010
|
%
Change
|
Mar.
1,
2009
|
Feb.
28,
2010
|
%
Change
|
Mar.
1,
2009
|
|||||||||||
Net
sales
|
$
|
361.9
|
23.8%
|
$
|
292.4
|
$
|
1,020.9
|
(13.5
%
|
)
|
$
|
1,179.6
|
||||||
Cost
of sales
|
118.2
|
(4.9
%
|
)
|
124.3
|
360.0
|
(15.7
%
|
)
|
426.9
|
|||||||||
Gross
margin
|
$
|
243.7
|
$
|
168.1
|
$
|
660.9
|
$
|
752.7
|
|||||||||
As
a % of net sales
|
67.3
|
%
|
57.5
|
%
|
64.7
|
%
|
63.8
|
%
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||||||
(In
Millions)
|
Feb.
28,
2010
|
%
Change
|
Mar.
1,
2009
|
Feb.
28,
2010
|
%
Change
|
Mar.
1,
2009
|
|||||||||||
Research
and development
|
$
|
69.0
|
(5.3
%
|
)
|
$
|
72.9
|
$
|
202.5
|
(20.3
%
|
)
|
$
|
254.1
|
|||||
As
a % of net sales
|
19.1
|
%
|
24.9
|
%
|
19.8
|
%
|
21.5
|
%
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||||||
(In
Millions)
|
Feb.
28,
2010
|
%
Change
|
Mar.
1,
2009
|
Feb.
28,
2010
|
%
Change
|
Mar.
1,
2009
|
|||||||||||
Selling,
general and administrative
|
$
|
81.7
|
22.9
%
|
$
|
66.5
|
$
|
235.7
|
8.2
%
|
$
|
217.8
|
|||||||
As
a % of net sales
|
22.6
|
%
|
22.7
|
%
|
23.1
|
%
|
18.5
|
%
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||||
(In
Millions)
|
Feb.
28,
2010
|
Mar.
1,
2009
|
Feb.
28,
2010
|
Mar.
1,
2009
|
|||||||||||
Interest
income
|
$
|
0.4
|
$
|
2.0
|
$
|
1.3
|
$
|
9.6
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||||
(In
Millions)
|
Feb.
28,
2010
|
Mar.
1,
2009
|
Feb.
28,
2010
|
Mar.
1,
2009
|
|||||||||||
Interest
expense
|
$
|
14.8
|
$
|
18.7
|
$
|
45.5
|
$
|
55.7
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||||
(In
Millions)
|
Feb.
28,
2010
|
Mar.
1,
2009
|
Feb.
28,
2010
|
Mar.
1,
2009
|
|||||||||||
Gain
(loss) on investments
|
$
|
0.8
|
$
|
1.0
|
$
|
6.1
|
$
|
(14.1
|
)
|
||||||
Total
other non-operating income
|
|||||||||||||||
(expense),
net
|
$
|
0.8
|
$
|
1.0
|
$
|
6.1
|
$
|
(14.1
|
)
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||||
(In
Millions)
|
Feb.
28,
2010
|
Mar.
1,
2009
|
Feb.
28,
2010
|
Mar.
1,
2009
|
|||||||||||
Income
tax expense (benefit)
|
$
|
19.2
|
$
|
(6.5
|
)
|
$
|
42.1
|
$
|
56.2
|
||||||
Effective
tax rate
|
26.5
|
%
|
44.5
|
%
|
24.5
|
%
|
29.1
|
%
|
Nine
Months Ended
|
|||||||
(In
Millions)
|
Feb.
28,
2010
|
Mar.
1,
2009
|
|||||
Net
cash provided by operating activities
|
$
|
246.2
|
$
|
292.2
|
|||
Net
cash used in investing activities
|
(24.8
|
)
|
(69.8
|
)
|
|||
Net
cash used in financing activities
|
(53.1
|
)
|
(182.1
|
)
|
|||
Net
change in cash and cash equivalents
|
$
|
168.3
|
$
|
40.3
|
·
|
the
patents owned by us or numerous other patents which third parties license
to us will not be invalidated, circumvented, challenged or licensed to
other companies; or
|
·
|
any
of our pending or future patent applications will be issued within the
scope of the claims sought by us, if at all;
or
|
·
|
our
products will not be held to infringe patents of
others.
|
·
|
we
would have additional cash requirements in order to support the payment of
principal and interest on our outstanding
indebtedness;
|
·
|
increases
in our outstanding indebtedness and leverage may increase our
vulnerability to adverse changes in general economic and industry
conditions, as well as to competitive
pressure;
|
·
|
our
ability to obtain additional financing for working capital, capital
expenditures, general corporate and other purposes may be limited
particularly in light of recent challenging credit market conditions;
and
|
·
|
our
flexibility in planning for, or reacting to, changes in our business and
our industry may be limited.
|
·
|
seek
additional financing in the debt or equity
markets;
|
·
|
refinance,
retire or restructure all or a portion of our
indebtedness;
|
·
|
sell
selected assets;
|
·
|
reduce
or delay planned capital expenditures;
or
|
·
|
reduce
or delay planned operating
expenditures.
|
·
|
we
currently are remediating past contamination at some of our
sites;
|
·
|
we
have been identified as a potentially responsible party at a number of
Superfund sites where we (or our predecessors) disposed of wastes in the
past; and
|
·
|
significant
regulatory and public attention on the impact of semiconductor operations
on the environment may result in more stringent regulations, further
increasing our costs.
|
(a)
|
During
the third quarter of fiscal 2010, we did not make any unregistered sales
of our securities.
|
(b)
|
The
following table summarizes our purchases of our common stock during the
third quarter of fiscal 2010:
|
Period
|
Total
Number of Shares
Purchased
(1)
|
Average
Price Paid
per
Share
|
Total
Number of
Shares
Purchased as
Part
of Publicly
Announced
Plans or
Programs
|
Approximate
Dollar
Value
of Shares that
May
Yet Be Purchased
Under
the Plans or
Programs
(2)
|
||
Month
# 1:
|
||||||
November
30, 2009 -
December
29, 2009
|
396
|
$14.92
|
-
|
$127 million
|
||
Month
# 2:
|
||||||
December
30, 2009 -
January
29, 2010
|
1,819
|
$13.61
|
-
|
$127 million
|
||
Month
# 3:
|
||||||
January
30, 2010 -
February
28, 2010
|
8,922
|
$13.59
|
-
|
$127 million
|
||
Total
|
11,137
|
-
|
31.1
|
Rule
13a-14 (a) /15d-14 (a) Certifications.
|
32.1
|
Section
1350 Certifications.
|
NATIONAL
SEMICONDUCTOR CORPORATION
|
||
Date:
March 29, 2010
|
/s/
Jamie E. Samath
|
|
Jamie
E. Samath
Corporate
Controller
Signing
on behalf of the registrant and as principal accounting
officer
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of National Semiconductor
Corporation;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
(d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date:
March 29, 2010
|
/s/
Donald Macleod
|
|
Donald
Macleod
President
and Chief Executive Officer
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of National Semiconductor
Corporation;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
(d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date:
March 29, 2010
|
/s/
Lewis Chew
|
|
Lewis
Chew
Senior
Vice President, Finance and Chief Financial
Officer
|
|
·
|
The
Report fully complies with the requirements of Section 13(a) or Section
15(d), as applicable, of the Securities Exchange Act of 1934,
and
|
|
·
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
Date:
March 29, 2010
|
/s/
Donald Macleod
|
|
Donald
Macleod
President
and Chief Executive Officer
|
|
·
|
The
Report fully complies with the requirements of Section 13(a) or Section
15(d), as applicable, of the Securities Exchange Act of 1934,
and
|
|
·
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
Date:
March 29, 2010
|
/s/
Lewis Chew
|
|
Lewis
Chew
Senior
Vice President, Finance and Chief Financial
Officer
|