SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements other than statements of historical fact
may be forward-looking statements. You can identify these and other
forward-looking statements by the use of words such as "may," "will," "could,"
"would," "should," "expects," "plans," "anticipates," "relies," "believes,"
"estimates," "predicts," "intends," "potential," "continue," "thinks," "seeks,"
or the negative of such terms, or other comparable terminology. Forward-looking
statements also include the assumptions underlying or relating to any of the
foregoing statements. Such forward-looking statements include, among others,
statements regarding: the future impacts of the COVID-19 pandemic; forecasts of
the future results of our operations, including profitability; orders for our
products and capital equipment generally; sales of semiconductors; the
investments by our customers in advanced technologies and new materials; growth
of revenue in the semiconductor industry, the semiconductor capital equipment
industry and our business; technological trends in the semiconductor industry;
future developments or trends in the global capital and financial markets; our
future product offerings and product features; the success and market acceptance
of new products; timing of shipment of backlog; our future product shipments and
product and service revenues; our future gross margins; our future research and
development expenses and selling, general and administrative expenses;
international sales and operations; our ability to maintain or improve our
existing competitive position; success of our product offerings; creation and
funding of programs for research and development; results of our investment in
leading edge technologies; the effects of hedging transactions; the effect of
the sale of trade receivables and promissory notes from customers; our future
effective income tax rate; our recognition of tax benefits; the effects of any
audits or litigation; future payments of dividends to our stockholders; the
completion of any acquisitions of third parties, or the technology or assets
thereof; benefits received from any acquisitions and development of acquired
technologies; sufficiency of our existing cash balance, investments, cash
generated from operations and the unfunded portion of our Revolving Credit
Facility (as defined below) to meet our operating and working capital
requirements, including debt service and payment thereof; future dividends, and
stock repurchases; our compliance with the financial covenants under the Credit
Agreement (as defined below) for our Revolving Credit Facility; the adoption of
new accounting pronouncements including ASC 326 and ASC 740; and our repayment
of our outstanding indebtedness.
Our actual results may differ significantly from those projected in the
forward-looking statements in this report. Factors that might cause or
contribute to such differences include, but are not limited to:

• The impact of the COVID-19 pandemic on the global economy and on our business,
financial condition and results of operations;
•Economic, political and social conditions in the countries in which we, our
customers and our suppliers operate, including global trade policies;
•Disruption to our manufacturing facilities or other operations, or the
operations of our customers, due to natural catastrophic events, health
epidemics or terrorism;
•Ongoing changes in the technology industry, and the semiconductor industry in
particular, including future growth rates, pricing trends in end-markets, or
changes in customer capital spending patterns;
•Our ability to timely develop new technologies and products that successfully
anticipate or address changes in the semiconductor industry;
•Our ability to maintain our technology advantage and protect our proprietary
rights;
•Our ability to compete with new products introduced by our competitors;
•Our ability to attract and retain key personnel;
•Cybersecurity threats and our ability to access critical information systems
for daily business operations;
•Liability to our customers under indemnification provisions if our products
fail to operate properly or contain defects or our customers are sued by third
parties due to our products;
•Exposure to a highly concentrated customer base;
•Availability and cost of the wide range of materials used in the production of
our products;
•Our ability to operate our business in accordance with our business plan;
•Legal, regulatory and tax environments in which we perform our operations and
conduct our business;
•Our ability to pay interest and repay the principal of our current indebtedness
is dependent upon our ability to manage our business operations, our credit
rating and the ongoing interest rate environment, among other factors;
•Instability in the global credit and financial markets;
•Our exposure to currency exchange rate fluctuations, or declining economic
conditions in those countries;
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•Changes in our effective tax rate resulting from changes in the tax rates
imposed by jurisdictions where our profits are determined to be earned and
taxed, expiration of tax holidays in certain jurisdictions, resolution of issues
arising from tax audits with various authorities or changes in tax laws or the
interpretation of such tax laws; and
•Our ability to identify suitable acquisition targets and successfully integrate
and manage acquired businesses.
For a more detailed discussion of these and other risk factors that might cause
or contribute to differences from the forward looking statements in this report,
see Part II, Item 1A, "Risk Factors" in this report as well as in Item 1,
"Business" and Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in our Annual Report on Form 10-K for the
year ended June 30, 2020. You should carefully review these risks and also
review the risks described in other documents we file from time to time with the
Securities and Exchange Commission. You are cautioned not to place undue
reliance on these forward-looking statements, and we expressly assume no
obligation and do not intend to update the forward-looking statements in this
report after the date hereof.
EXECUTIVE SUMMARY
We are a leading supplier of process control and yield management solutions and
services for the semiconductor and related electronics industries. Our broad
portfolio of device manufacturing, inspection and metrology products and related
service, software and other offerings support R&D and manufacturing of
integrated circuits ("IC" or "chip"), wafers, and reticles. Our products,
services and expertise are used by our customers to measure, detect, analyze and
resolve critical product defects in nanometric level manufacturing processes,
helping reduce risk, lower costs, and achieve their productivity goals. We also
offer technologically advanced, yield-enhancing and process-enabling solutions
to address various manufacturing stages of Printed Circuit Boards ("PCB"), Flat
Panel Displays ("FPD"), Specialty Semiconductor Devices ("SD") and other
electronic components.
Our semiconductor customers generally operate in one or both of the major
semiconductor device manufacturing markets: Memory and Foundry/Logic. The
diversification of semiconductor end demand, the rapid proliferation of new
applications for more advanced semiconductor devices, and the increasing
complexity associated with leading edge semiconductor manufacturing drives
demand for our process control and yield management solutions. Other advanced
electronics demand trends include the deployment of 5G telecommunications
technology and associated high-end mobile devices, the electrification and
digitalization of the automotive industry, the revival of personal computer
demand and associated innovations to support work from home requirements,
virtual collaboration, remote learning and entertainment, and the growth of the
Internet of Things ("IoT") and associated new applications. These trends drive
demand for our other products such as those used in the PCB, FPD and Specialty
Semiconductor manufacturing, where the increase in technology complexity is
expected to continue and further accelerate as more devices become
interconnected and dependent on other electronic devices. As a result of these
factors, we saw a general strengthening of demand for our products throughout
fiscal 2021, especially in the current quarter. Our customer base, particularly
in the semiconductor industry, has become increasingly concentrated, so large
orders from a relatively limited number of customers account for a substantial
portion of our sales, which potentially exposes us to more earnings volatility.
We are organized into four reportable segments:

•Semiconductor Process Control: A comprehensive portfolio of inspection,
metrology and data analytics products as well as related service offerings that
help IC manufacturers achieve target yields throughout the semiconductor
fabrication process.
•Specialty Semiconductor Process: Advanced vacuum deposition and etching process
tools used by a broad range of specialty semiconductor customers.
•PCB, Display and Component Inspection: a range of inspection, testing and
measurement, and direct imaging for patterning products used by manufacturers of
PCBs, FPDs, advanced packaging, microelectromechanical systems, and other
electronic components.
•Other: products that do not fall into the three segments above.

China is emerging as a major region for manufacturing of logic and memory chips,
adding to its role as the world's largest consumer of ICs. Additionally, a
significant portion of global FPD and PCB manufacturing has migrated to China.
Government initiatives are propelling China to expand its domestic manufacturing
capacity and attracting investment from semiconductor manufacturers from Taiwan,
Korea, Japan and the United States. Although China is currently seen as an
important long-term growth region for the semiconductor and electronics capital
equipment sector, the United States Department of Commerce has added certain
China-based entities to the U.S. Entity List, restricting our ability to provide
products and services to such entities without a license. In addition, the U.S.
Department of Commerce has imposed new export licensing requirements on
China-based customers engaged in military end uses, as well as requiring our
customers to obtain an
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export license when they use certain semiconductor capital equipment based on
U.S. technology to manufacture products connected to Huawei or its affiliates.
While these new rules have not significantly impacted our operations to-date,
such actions by the U.S. government or another country could impact our ability
to provide our products and services to existing and potential customers and
adversely affect our business.

The following table sets forth some of our key quarterly unaudited financial information:


                                                                                  Three Months Ended
(In thousands, except net income per      March 31,           December 31,           September 30,            June 30,            March 31,
share)                                       2021                 2020                   2020                   2020                 2020
Total revenues                          $ 1,803,773          $  1,650,870          $    1,538,620          $ 1,459,593          $ 1,423,964
Gross margin                            $ 1,094,144          $    981,137

$ 918,058 $ 838,049 $ 833,806 Net income attributable to KLA(1) $ 567,496 $ 457,251

$      420,567          $   411,253          $    78,452

Diluted net income per share
attributable to KLA(2)                  $      3.66          $       2.94          $         2.69          $      2.63          $      0.50


__________________

(1)Our net income attributable to KLA increased to $567.5 million in the three
months ended March 31, 2021, primarily as a result of higher revenues as well as
improvements in cost control.
(2)Diluted net income per share is computed independently for each of the
quarters presented based on the weighted-average fully diluted shares
outstanding for each quarter. Therefore, the sum of quarterly diluted net income
per share information may not equal annual (or other multiple-quarter
calculations of) diluted net income per share.

Impact of COVID-19



Events surrounding the ongoing COVID-19 pandemic have resulted in a reduction in
economic activity across the globe. The severity and duration of these economic
repercussions remain largely unknown and ultimately will depend on many factors,
including the speed and effectiveness of the containment efforts throughout the
world. The extent to which the COVID-19 pandemic will impact demand for our
products depends on future developments, which are highly uncertain and very
difficult to predict, including new information that may emerge concerning the
severity of the virus and actions to contain and treat its impacts including the
speed and efficacy of developing vaccines to prevent its spread. While all of
our global sites are currently operational, our facilities could be required to
temporarily curtail production levels or temporarily cease operations based on
government mandates.
From the start of the COVID-19 pandemic, we proactively implemented preventative
protocols intended to safeguard our employees, contractors, suppliers,
customers, and communities, and ensure business continuity in the event
government restrictions or severe outbreaks impact our operations at certain
sites. We remain committed to the health and safety of our employees,
contractors, suppliers, customers, and communities, and are following government
policies and recommendations designed to slow the spread of COVID-19.
Our efforts to respond to the COVID-19 pandemic include the following:
•We have put health screenings in place, required social distancing, and have
established employee separation protocols at our facilities. We have also
suspended non-essential business travel and require team members to work from
home to the extent possible. Where work from home is not possible, all on-site
team members must pass through thermal scanning equipment to ensure they do not
have an elevated body temperature and must wear a mask at all times.
•We have developed strategies to address our responsiveness and ability to send
engineers into customer facilities to provide support services.
•We continue to monitor our supply chain and work with our suppliers to identify
and mitigate potential gaps to ensure continuity of supply.
•We are evaluating all our construction projects across our global operations
and enacting protocols to enhance the safety of our employees, suppliers, and
contractors.
•We have developed strategies and are implementing measures to respond to a
variety of potential economic scenarios, such as limitations on new hiring and
reductions in discretionary spending.
•We are committed to helping those most impacted by COVID-19. In regions around
the world, the KLA Foundation is addressing immediate humanitarian needs while
investing resources to combat the long-term effect of the virus on our
communities.
•We are working with government authorities in the jurisdictions where we
operate, and continuing to monitor our operations in an effort to ensure we
follow government requirements, relevant regulations, industry standards, and
best
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practices to help safeguard our team members, while safely continuing operations
to the extent possible at our sites across the globe.
We believe these actions are appropriate and prudent to safeguard our employees,
contractors, suppliers, customers, and communities, while allowing us to safely
continue operations. We will continue to actively monitor the situation and may
take further actions altering our business operations that we determine are in
the best interests of our employees, customers, partners, suppliers, and
stakeholders, or as required by federal, state, or local authorities.
The COVID-19 pandemic has resulted in an increase in freight costs due in large
part to reduced air traffic, which impacts gross margin, as well as decreases in
travel costs which reduce our cost structure. We continue to experience various
constraints in our supply chain due to the pandemic. As a result, supply lead
times are extended and we continue to have difficulties in obtaining some
necessary components in a timely manner. We have communicated with our suppliers
to identify supply gaps and taken steps to ensure continuity and, while there is
progress in the recovery within our supply chain, the situation remains fluid
and uncertain. As of the date of this report, we cannot predict with certainty
any other effects the COVID-19 pandemic may have on our business, including the
effects on our customers, employees, or on our financial results for the
remainder of fiscal 2021.

CRITICAL ACCOUNTING ESTIMATES AND POLICIES
The preparation of our Condensed Consolidated Financial Statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions in applying our accounting
policies that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and liabilities. We base
these estimates and assumptions on historical experience and evaluate them on an
ongoing basis to ensure that they remain reasonable under current conditions.
Actual results could differ from those estimates. We discuss the development and
selection of the critical accounting estimates with the Audit Committee of our
Board of Directors on a quarterly basis, and the Audit Committee has reviewed
our related disclosure in this Quarterly Report on Form 10-Q.
Other than the change for the accounting of credit losses as a result of the
adoption of Accounting Standard Codification ("ASC") 326, there have been no
material changes in our critical accounting estimates and policies since our
Annual Report on Form 10-K for the fiscal year ended June 30, 2020. Refer to
Note 1 "Basis of Presentation" in the Notes to the Condensed Consolidated
Financial Statements for additional details. In addition, please refer to
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained in Part II, Item 7 of our Annual Report on Form 10-K for
our fiscal year ended June 30, 2020 for a complete description of our critical
accounting policies and estimates.
Recent Accounting Pronouncements
For a description of recent accounting pronouncements, including those recently
adopted and the expected dates of adoption as well as estimated effects, if any,
on our Condensed Consolidated Financial Statements of those not yet adopted, see
Note 1 "Basis of Presentation" in the Notes to the Condensed Consolidated
Financial Statements.

RESULTS OF OPERATIONS
Revenues and Gross Margin
Revenues
Our business is affected by the concentration of our customer base and our
customers' capital equipment procurement schedules as a result of their
investment plans. Our product revenues in any particular period are
significantly impacted by the amount of new orders that we receive during that
period and, depending upon the duration of manufacturing and installation
cycles, in the preceding period.
Service revenues are generated from product maintenance and support services, as
well as billable time and material service calls made to our customers. The
amount of our service revenues is typically a function of the number of systems
installed at our customers' sites and the utilization of those systems, but it
is also impacted by other factors, such as our rate of service contract
renewals, the types of systems being serviced and fluctuations in foreign
exchange rates.
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                                             Three Months Ended
                                                                                 Q3 FY21
                                        March 31,         March 31,                vs.
      (Dollar amounts in thousands)        2021              2020                Q3 FY20
      Revenues:
      Product                         $ 1,375,320       $ 1,051,096       $ 324,224        31  %
      Service                             428,453           372,868          55,585        15  %
      Total revenues                  $ 1,803,773       $ 1,423,964       $ 379,809        27  %
      Costs of revenues               $   709,629       $   590,158       $ 119,471        20  %
      Gross margin percentage                60.7  %           58.6  %


Product revenues during the three months ended March 31, 2021 increased compared
to the three months ended March 31, 2020, primarily due to strong demand from
our memory and logic customers and an increase from continued growth in the 5G
infrastructure market, ongoing work from home requirements, and high-performance
computing technologies. These increases were partially offset by softer demand
and oversupply in the FPD market.
Service revenues during the three months ended March 31, 2021 increased compared
to the three months ended March 31, 2020, primarily due to an increase in the
number of systems installed at our customers' sites.
                                        Nine Months Ended
                                                                           Q3 FY21 YTD
                                   March 31,         March 31,                 vs.
(Dollar amounts in thousands)         2021              2020               Q3 FY20 YTD
Revenues:
Product                          $ 3,758,838       $ 3,253,621       $  505,217        16  %
Service                            1,234,425         1,093,210          141,215        13  %
Total revenues                   $ 4,993,263       $ 4,346,831       $  646,432        15  %
Costs of revenues                $ 1,999,924       $ 1,828,017       $  171,907         9  %
Gross margin percentage                 59.9  %           57.9  %



Product revenues during the nine months ended March 31, 2021 increased compared
to the nine months ended March 31, 2020, primarily due to strong demand for many
of our products, especially our inspection and metrology portfolios, as well as
an increase from continued growth in the 5G infrastructure market. These
increases were partially offset by softer demand and oversupply in the FPD
market.
Service revenues during the nine months ended March 31, 2021 increased compared
to the nine months ended March 31, 2020, primarily due to an increase in the
number of systems installed at our customers' sites.
Revenues by segment(1)
                                               Three Months Ended
                                                                                  Q3 FY21
                                           March 31,        March 31,               vs.
(Dollar amounts in thousands)                2021             2020                Q3 FY20
Revenues:
Semiconductor Process Control            $ 1,506,140      $ 1,177,777      $ 328,363        28  %
Specialty Semiconductor Process               91,724           85,083          6,641         8  %
PCB, Display and Component Inspection        205,202          160,411         44,791        28  %
Other                                            149              469       

(320) (68) % Total revenues for reportable segments $ 1,803,215 $ 1,423,740 $ 379,475 27 %


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Revenue from our Semiconductor Process Control segment during the three months
ended March 31, 2021 increased compared to the three months ended March 31,
2020, primarily due to strong demand for our inspection and metrology products.
Revenues in the Specialty Semiconductor Process and PCB, Display and Component
Inspection segments during the three months ended March 31, 2021 increased
compared to the three months ended March 31, 2020, primarily due to continued
growth in 5G infrastructure, the ongoing work from home requirements, as well as
high-performance computing technologies. These increases were partially offset
by softer demand and oversupply in the FPD market.
                                               Nine Months Ended
                                                                                 Q3 FY21 YTD
                                           March 31,        March 31,                vs.
(Dollar amounts in thousands)                2021             2020               Q3 FY20 YTD
Revenues:
Semiconductor Process Control            $ 4,154,278      $ 3,588,839      $  565,439        16  %
Specialty Semiconductor Process              271,264          229,328          41,936        18  %
PCB, Display and Component Inspection        565,646          525,242          40,404         8  %
Other                                            739            3,217          (2,478)      (77) %
Total revenues                           $ 4,991,927      $ 4,346,626      $  645,301        15  %


__________
(1)Segment revenues exclude corporate allocations and the effects of foreign
exchange rates. For additional details, refer to Note 18 "Segment Reporting and
Geographic Information" in the Notes to the Condensed Consolidated Financial
Statements.
Revenues from our Semiconductor Process Control segment during the nine months
ended March 31, 2021 increased compared to the nine months ended March 31, 2020,
primarily due to strong demand for many of our products especially from our
inspection and metrology portfolios. Revenues in the Specialty Semiconductor
Process and PCB, Display and Component Inspection segments during the nine
months ended March 31, 2021 increased compared to the nine months ended
March 31, 2020, primarily due to continued growth in 5G infrastructure, the
ongoing work from home requirements, and high-performance computing
technologies. These increases were partially offset by softer demand and
oversupply in the FPD market.
Revenues by region
The following is a summary of revenues by geographic region, based on ship-to
location, for the indicated periods:
                                                     Three Months Ended                                                           Nine Months Ended
(Dollar amounts in
thousands)                          March 31, 2021                        March 31, 2020                        March 31, 2021                        March 31, 2020
Korea                       $      557,514            31  %       $      297,687            21  %       $    1,094,979            22  %       $      677,085            16  %
Taiwan                             401,797            22  %              349,841            24  %            1,151,683            23  %            1,183,653            27  %
China                              353,393            20  %              352,343            25  %            1,221,639            24  %            1,079,951            25  %
North America                      174,728            10  %              159,250            11  %              559,712            11  %              499,750            11  %
Japan                              161,190             9  %              152,984            11  %              482,330            10  %              553,999            13  %
Europe and Israel                   95,080             5  %               76,021             5  %              278,398             6  %              232,870             5  %
Rest of Asia                        60,071             3  %               35,838             3  %              204,522             4  %              119,523             3  %
Total                       $    1,803,773           100  %       $    1,423,964           100  %       $    4,993,263           100  %       $    4,346,831           100  %

A significant portion of our revenues continues to be generated in Asia, where a substantial portion of the world's semiconductor manufacturing capacity is located, and we expect that trend to continue.



Gross margin
Our gross margin fluctuates with revenue levels and product mix and is affected
by variations in costs related to manufacturing and servicing our products,
including our ability to scale our operations efficiently and effectively in
response to prevailing business conditions.
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The following table summarizes the major factors that contributed to the changes
in gross margin percentage:
                                                                           Gross Margin Percentage
                                                              Three Months Ended                  Nine Months Ended
March 31, 2020                                                       58.6%                              57.9%
Revenue volume of products and services                              1.8%                                1.0%
Mix of products and services sold                                    1.3%                                1.8%

Manufacturing labor, overhead and efficiencies                       0.1%                                0.1%
Other service and manufacturing costs                               (1.1)%                              (0.9)%

March 31, 2021                                                       60.7%                              59.9%


Changes in gross margin percentage, which are driven by the revenue volume of
products and services, reflect our ability to leverage existing infrastructure
to generate higher revenues. It also includes average customer pricing, customer
revenue deferrals associated with volume purchase agreements, and the effect of
fluctuations in foreign exchange rates. Changes in gross margin percentage from
the mix of products and services sold reflect the impact of changes within the
composition of product and service offerings. Changes in gross margin percentage
from manufacturing labor, overhead and efficiencies reflect our ability to
manage costs and drive productivity as we scale our manufacturing activity to
respond to customer requirements, and amortization of intangible assets. Changes
in gross margin percentage from other service and manufacturing costs include
the impact of customer support costs, including the efficiencies with which we
deliver services to our customers, and the effectiveness with which we manage
our production plans and inventory risk.
The increase in our gross margin percentage during the comparative periods
presented is primarily due to a more profitable mix of products and services
sold as well as a higher revenue volume of products and services, partially
offset by an increase in service and manufacturing costs.
Segment gross margin(1)
                                                            Three months ended
                                                                                                                    Q3 FY21
                                                            March 31,                 March 31,                       vs.
(Dollar amounts in thousands)                                 2021                       2020                       Q3 FY20
Segment gross margin:
Semiconductor Process Control                            $    982,511                $ 752,649                       $ 229,862               31  %
Specialty Semiconductor Process                                51,720                   47,187                           4,533               10  %
PCB, Display and Component Inspection                         100,311                   71,163                          29,148               41  %
Other                                                              40                     (271)                            311             (115) %
                                                         $  1,134,582                $ 870,728                       $ 263,854               30  %



Gross margin in the Semiconductor Process Control segment during the three
months ended March 31, 2021 increased compared to the three months ended
March 31, 2020, primarily due to a higher revenue volume of products and
services sold and a more favorable mix of products and services sold, partially
offset by an increase in other service and manufacturing costs. Gross margin in
the Specialty Semiconductor Process and PCB, Display and Component Inspection
segments during the three months ended March 31, 2021 increased compared to the
three months ended March 31, 2020, primarily due to a more favorable mix of
products and services sold as well as a higher revenue volume of products and
services sold.
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                                                       Nine Months Ended
                                                                                                               Q3 FY21 YTD
                                                       March 31,                  March 31,                        vs.
(Dollar amounts in thousands)                            2021                        2020                      Q3 FY20 YTD
Segment gross margin:
Semiconductor Process Control                       $  2,681,411                $ 2,290,721                        $ 390,690               17  %
Specialty Semiconductor Process                          152,819                    126,684                           26,135               21  %
PCB, Display and Component Inspection                    275,064                    229,769                           45,295               20  %
Other                                                        (68)                       499                             (567)            (114) %
                                                    $  3,109,226                $ 2,647,673                        $ 461,553               17  %


________________
(1)  Segment gross margin is calculated as segment revenues less segment cost of
revenues and excludes corporate allocations, amortization of intangible assets,
inventory fair value adjustments, acquisition related costs, and the effects of
foreign exchange rates. For additional details, refer to Note 18 "Segment
Reporting and Geographic Information" in the Notes to the Condensed Consolidated
Financial Statements.

Gross margin in the Semiconductor Process Control segment during the nine months
ended March 31, 2021 increased compared to the nine months ended March 31, 2020,
primarily due to a more profitable mix of products and services sold as well as
higher manufacturing efficiencies, partially offset by an increase in other
service and manufacturing costs. Gross margin in the Specialty Semiconductor
Process and PCB, Display and Component Inspection segments during the nine
months ended March 31, 2021 increased compared to the nine months ended
March 31, 2020, primarily due to a more favorable mix of products and services
sold and higher revenue volume of products and services sold.

Research and Development ("R&D")



R&D expenses may fluctuate with product development phases and project timing as
well as our R&D efforts. As technological innovation is essential to our
success, we may incur significant costs associated with R&D projects, including
compensation for engineering talent, engineering material costs, and other
expenses.
                                                       Three Months Ended
                                                                                                      Q3 FY21
                                                                                                        vs.
(Dollar amounts in thousands)                March 31, 2021          March 31, 2020                   Q3 FY20
R&D expenses                                $      238,957          $      215,433          $ 23,524              11  %
R&D expenses as a percentage of total
revenues                                                13  %                   15  %



R&D expenses during the three months ended March 31, 2021 increased compared to
the three months ended March 31, 2020, primarily due to increased
employee-related expenses of $18.3 million as a result of additional engineering
headcount, higher employee benefit costs and higher variable compensation, as
well as an increase in engineering project material costs of $5.4 million.
                                                        Nine Months Ended
                                                                                                     Q3 FY21 YTD
                                                                                                         vs.
(Dollar amounts in thousands)                March 31, 2021          March 31, 2020                  Q3 FY20 YTD
R&D expenses                                $      687,059          $      646,764          $    40,295              6  %
R&D expenses as a percentage of total
revenues                                                14  %                   15  %



R&D expenses during the nine months ended March 31, 2021 increased compared to
the nine months ended March 31, 2020, primarily due to an increase in
employee-related expenses of $34.3 million as a result of additional engineering
headcount, higher employee benefit costs and higher variable compensation, as
well as higher engineering project material costs of $19.5 million, partially
offset by a decrease in travel-related expenses of $11.7 million.
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Our future operating results will depend significantly on our ability to produce
products and provide services that have a competitive advantage in our
marketplace. To do this, we believe that we must continue to make substantial
and focused investments in our research and development. We remain committed to
product development in new and emerging technologies.

Selling, General and Administrative ("SG&A")


                                                         Three Months Ended
                                                                                                      Q3 FY21
                                                                         March 31,                      vs.
(Dollar amounts in thousands)                   March 31, 2021              2020                      Q3 FY20
SG&A expenses                                  $      183,040          $   185,760          $ (2,720)             (1) %
SG&A expenses as a percentage of total
revenues                                                   10  %                13  %



SG&A expenses during the three months ended March 31, 2021 decreased compared to
the three months ended March 31, 2020, primarily due to a decrease in
travel-related expenses of $6.1 million and a decrease in depreciation and
intangible amortization expense of $4.3 million, partially offset by an increase
in employee-related expenses of $4.9 million as the result of additional
headcount, higher employee benefit costs and higher variable compensation, and
an increase in consulting costs of $2.3 million.

                                                        Nine Months Ended
                                                                                                     Q3 FY21 YTD
                                                                                                         vs.
(Dollar amounts in thousands)                March 31, 2021          March 31, 2020                  Q3 FY20 YTD
SG&A expenses                               $      537,580          $      566,358          $  (28,778)             (5) %
SG&A expenses as a percentage of total
revenues                                                11  %                   13  %



SG&A expenses during the nine months ended March 31, 2021 decreased compared to
the nine months ended March 31, 2020, primarily due to a decrease in
travel-related expenses of $27.4 million and a decrease in depreciation and
intangible amortization expense of $18.7 million, partially offset by an
increase in employee-related expenses of $5.1 million as the result of
additional headcount, higher employee benefit costs and higher variable
compensation, an increase in facilities-related expense of $4.8 million, an
increase in legal fees of $4.1 million and an increase in consulting costs of
$3.1 million.
Goodwill Impairment
We performed the required annual goodwill impairment testing via the qualitative
assessment for all reporting units as of February 28, 2021 and concluded that
goodwill was not impaired.
For the fiscal year ended June 30, 2020, as a result of our annual goodwill
impairment testing for all reporting units, we recorded $144.2 million and
$112.5 million in impairment charges in the Specialty Semiconductor Process and
PCB and Display reporting units, respectively, in the three months ended March
31, 2020.

Restructuring Charges

In September 2019, management approved a plan to streamline our organization and
business processes that included a reduction of workforce, which is expected to
be completed in the fourth quarter of our fiscal year ending June 30, 2021,
primarily in our PCB, Display and Component Inspection segment.
Restructuring charges were $2.9 million for the three months ended March 31,
2021, and included $1.0 million of non-cash charges for accelerated depreciation
related to certain right-of use assets and fixed assets to be abandoned.
Restructuring charges were $11.1 million for the nine months ended March 31,
2021, and included $3.0 million of non-cash charges for accelerated depreciation
related to certain right-of use assets and fixed assets to be abandoned. As of
March 31, 2021, the accrual for restructuring charges was $4.5 million.
We expect to incur additional restructuring charges in future periods in
connection with the completion of our workforce reduction. For additional
information refer to Note 19 "Restructuring Charges" in the Notes to the
Condensed Consolidated Financial Statements.
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Interest Expense and Other Expense (Income), Net
Other expense (income), net is comprised primarily of realized gains or losses
on sales of marketable securities, gains or losses from revaluations of certain
foreign currency denominated assets and liabilities as well as foreign currency
contracts, and interest-related accruals (such as interest and penalty accruals
related to our tax obligations) and interest income earned on our invested cash,
cash equivalents and marketable securities.
                                                             Three Months Ended
                                                                                                           Q3 FY21
                                                                                                             vs.
(Dollar amounts in thousands)                       March 31, 2021         March 31, 2020                  Q3 FY20
Interest expense                                   $      39,092          $      39,231          $   (139)              -  %
Other expense (income), net                        $      (7,348)         $      (1,004)         $  6,344             632  %
Interest expense as a percentage of total revenues             2  %                   3  %
Other expense (income), net as a percentage of
total revenues                                                 < 1%         

< 1%




Other expense (income), net during the three months ended March 31, 2021
increased compared to the three months ended March 31, 2020, primarily due to
the sale of our interest in PixCell to a South Korean company in the third
quarter of fiscal 2021 for total consideration of $20.2 million, for which the
$4.4 million gain was recorded as part of other expense (income), net.

                                                               Nine Months Ended
                                                                                                            Q3 FY21 YTD
                                                                                                                vs.
(Dollar amounts in thousands)                       March 31, 2021          March 31, 2020                  Q3 FY20 YTD
Interest expense                                   $      117,358          $      120,053          $    (2,695)             (2) %
Other expense (income), net                        $         (269)         $       (5,190)         $    (4,921)            (95) %
Interest expense as a percentage of total revenues              2  %                    3  %
Other expense (income), net as a percentage of
total revenues                                                  < 1%                    < 1%



Interest expense during the nine months ended March 31, 2021 decreased compared
to the nine months ended March 31, 2020, primarily due to a lower interest rate
on our $750.0 million Senior Notes issued in February 2020.
Other expense (income), net during the nine months ended March 31, 2021
decreased compared to the nine months ended March 31, 2020, primarily due to a
decrease in interest income of $11.2 million due to lower interest rates, and is
partially offset by the $4.4 million gain from the sale of our interest in
PixCell.
Loss on Extinguishment of Debt
For the three and nine months ended March 31, 2021, we had no loss on
extinguishment of debt. For the three and nine months ended March 31, 2020, loss
on extinguishment of debt reflected a pre-tax net loss of $22.5 million
associated with the redemption of our $500.0 million of Senior Notes due 2021,
including associated redemption premiums, accrued interest and other fees and
expenses.

Provision for Income Taxes
The following table provides details of income taxes:
                                      Three Months Ended               Nine Months Ended
                                          March 31,                        March 31,
(Dollar amounts in thousands)        2021            2020             2021             2020
Income before income taxes       $ 640,403       $ 115,199       $ 1,651,611       $ 911,642
Provision for income taxes       $  73,233       $  37,190       $   207,316       $ 106,932
Effective tax rate                    11.4  %         32.3  %           12.6  %         11.7  %


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The effective tax rate during the three months ended March 31, 2021 was lower
compared to the three months ended March 31, 2020 primarily due to a $256.6
million goodwill impairment charge during the three months ended March 31, 2020,
which is non-deductible for income tax. Excluding the goodwill impairment
charge, tax expense was higher as a percentage of income before taxes during the
three months ended March 31, 2021 compared to the three months ended March 31,
2020 primarily due to the impact of the following item:
• Tax expense increased by $10.9 million during the three months ended March 31,
2021 relating to a decrease in the proportion of our earnings generated in
jurisdictions with tax rates lower than the U.S. statutory rate.
The effective tax rate during the nine months ended March 31, 2021 was higher
compared to the nine months ended March 31, 2020 primarily due to the impact of
the following items:
•Tax expense increased by $28.2 million during the nine months ended March 31,
2021 relating to a decrease in the proportion of our earnings generated in
jurisdictions with tax rates lower than the U.S. statutory rate; partially
offset by
•Tax expense decreased by $12.2 million during the nine months ended March 31,
2021 relating to a non-deductible increase in the value of the assets held
within our Executive Deferred Savings Plan.
Our future effective income tax rate depends on various factors, such as tax
legislation, the geographic composition of our pre-tax income, the amount of our
pre-tax income as business activities fluctuate, non-deductible expenses
incurred in connection with acquisitions, research and development credits as a
percentage of aggregate pre-tax income, non-taxable or non-deductible increases
or decreases in the assets held within our Executive Deferred Savings Plan, the
tax effects of employee stock activity and the effectiveness of our tax planning
strategies.
In the normal course of business, we are subject to examination by tax
authorities throughout the world. We are subject to United States income tax
examinations for all years beginning from the fiscal year ended June 30, 2017
and are under United States income tax examination for the fiscal year ended
June 30, 2018. We are subject to state income tax examinations for all years
beginning from the fiscal year ended June 30, 2016. We are also subject to
examinations in other major foreign jurisdictions, including Singapore and
Israel, for all years beginning from the calendar year ended December 31, 2012.
We are under audit in Germany related to Orbotech for the calendar years ended
December 31, 2013 to December 31, 2015. We are also under audit in Israel
related to KLA for the fiscal years ended June 30, 2017 to June 30, 2019.
Although we believe our tax estimates are reasonable, the final determination of
tax audits and any related litigation could be materially different from our
historical income tax provisions and accruals. The results of an audit or
litigation could have a material adverse effect on our results of operations or
cash flows in the period or periods for which that determination is made.
In May 2017, Orbotech received an assessment from the Israel Tax Authority
("ITA") with respect to its fiscal years 2012 through 2014 (the "Assessment")
for an aggregate amount of tax, after offsetting all net operating losses
("NOLs") available through the end of 2014, of approximately NIS 229.0 million
(equivalent to approximately $66.0 million which includes related interest and
linkage differentials to the Israeli consumer price index as of date of the
issuance of the Tax Decrees, as defined below).
On August 31, 2018, Orbotech filed an objection in respect of the Assessment
(the "Objection"). The ITA completed the second stage of the audit, in which the
claims Orbotech raised in the Objection were examined by different personnel at
the ITA. In addition, the ITA examined additional items during this second stage
of the audit. As Orbotech and the ITA did not reach an agreement during the
second stage, the ITA issued Tax Decrees to Orbotech on August 28, 2019 ("Tax
Decrees") for an aggregate amount of tax, after offsetting all NOLs available
through the end of 2014, of approximately NIS 257.0 million (equivalent to
approximately $73.0 million which includes related interest and linkage
differentials to the Israeli consumer price index as of the date of the issuance
of the Tax Decrees). These Tax Decrees replaced the Assessment. We believe that
our recorded unrecognized tax benefits are sufficient to cover the resolution of
these Tax Decrees.
Orbotech filed a notice of appeal with respect to the above Tax Decrees with the
District Court of Tel Aviv on September 26, 2019. On February 27, 2020, the ITA
filed its arguments in support of the Tax Decrees. Orbotech filed the grounds of
appeal with respect to the above Tax Decrees on July 30, 2020. We are currently
in the pre-trial hearing stage of the process and the next pre-trial meeting is
scheduled for June 2021. The ITA and Orbotech are continuing discussions in an
effort to resolve this matter in a mutually agreeable manner.
In connection with the above, there is an ongoing criminal investigation in
Israel against Orbotech, certain of its employees and its tax consultant. On
April 11, 2018, Orbotech received a "suspect notification letter" (dated March
28, 2018) from the Tel Aviv District Attorney's Office (Fiscal and Financial).
In the letter, it was noted that the investigation file was transferred from the
Assessment Investigation Officer to the District Attorney's Office. The letter
further states that the District Attorney's Office has not yet made a decision
regarding submission of an indictment against Orbotech; and that if after
studying the case, a decision is made to consider prosecuting Orbotech, Orbotech
will receive an additional letter and, within 30
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days, Orbotech may present its arguments to the District Attorney's Office as to
why it should not be indicted. On October 27, 2019, we received a request for
additional information from the District Attorney's Office. We will continue to
monitor the progress of the District Attorney's Office investigation; however,
we cannot anticipate when the review of the case will be completed and what will
be the results thereof. We intend to cooperate with the District Attorney's
Office to enable them to conclude their investigation.

In December 2020, Orbotech received an assessment from the ITA with respect to
its fiscal years 2015 through 2018 (the "Second Assessment"), for an aggregate
amount of tax, after offsetting all NOLs available through the end of 2018, of
approximately NIS 227.0 million (equivalent to approximately $68.0 million which
includes related interest and linkage differentials to the Israeli consumer
price index as of date of the issuance of the Second Assessment). We filed an
objection to the Second Assessment with the ITA in March 2021. The objection
moved the 2015-2018 audit to the second stage, in which the ITA will review the
objections. We believe that our recorded unrecognized tax benefits are
sufficient to cover the resolution of the Second Assessment.

Liquidity and Capital Resources


                                                                     As of                  As of
(Dollar amounts in thousands)                                   March 31, 2021          June 30, 2020
Cash and cash equivalents                                      $    1,452,150          $  1,234,409
Marketable securities                                                 990,575               746,063
Total cash, cash equivalents and marketable securities         $    2,442,725          $  1,980,472
Percentage of total assets                                                 25  %                 21  %

                                                                     Nine Months Ended March 31,
(In thousands)                                                       2021                   2020
Cash flows:
Net cash provided by operating activities                      $    1,719,402          $  1,326,004
Net cash used in investing activities                                (406,800)             (153,053)
Net cash used in financing activities                              (1,105,036)           (1,238,280)

Effect of exchange rate changes on cash and cash equivalents 10,175

                (4,490)
Net (decrease) increase in cash and cash equivalents           $      

217,741 $ (69,819)




Cash and Cash Equivalents and Marketable Securities:
As of March 31, 2021, our cash, cash equivalents and marketable securities
totaled $2.44 billion, which represents an increase of $462.3 million from
June 30, 2020. The increase is due to net cash provided by operating activities
of $1.72 billion, partially offset by stock repurchases of $638.8 million, cash
used for payment of dividends and dividend equivalents of $420.1 million,
capital expenditures of $176.3 million and a net cash usage of $249.9 million
related to purchases, sales and maturities of available-for-sale and trading
securities.
As of March 31, 2021, $897.5 million of our $2.44 billion of cash, cash
equivalents and marketable securities were held by our foreign subsidiaries and
branch offices. We currently intend to indefinitely reinvest $581.8 million of
the cash, cash equivalents and marketable securities held by our foreign
subsidiaries for which we assert that earnings are permanently reinvested. If,
however, a portion of these funds were to be repatriated to the United States,
we would be required to accrue and pay state and foreign taxes of approximately
1% - 22% of the funds repatriated. The amount of taxes due will depend on the
amount and manner of the repatriation, as well as the location from which the
funds are repatriated. We have accrued state and foreign tax on the remaining
cash of $315.7 million of the $897.5 million held by our foreign subsidiaries
and branch offices. As such, these funds can be returned to the U.S. without
accruing any additional U.S. tax expense.
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Cash Dividends:
During the three months ended March 31, 2021, our Board of Directors declared a
regular quarterly cash dividend of $0.90 per share on our outstanding common
stock, which was paid on March 2, 2021 to our stockholders of record as of the
close of business on February 19, 2021. During the same period in fiscal year
ended June 30, 2020, our Board of Directors declared and paid a regular
quarterly cash dividend of $0.85 per share on our outstanding common stock. The
total amount of regular quarterly cash dividends and dividend equivalents paid
during the three months ended March 31, 2021 and 2020 was $139.3 million and
$133.3 million, respectively. The total amount of regular quarterly cash
dividends and dividend equivalents paid during the nine months ended March 31,
2021 and 2020 was $420.1 million and $389.7 million, respectively. The amount of
accrued dividend equivalents payable for regular quarterly cash dividends on
unvested RSUs with dividend equivalent rights as of March 31, 2021 and June 30,
2020 was $10.3 million and $8.3 million, respectively. These amounts will be
paid upon vesting of the underlying unvested RSU as described in Note 10
"Equity, Long-term Incentive Compensation Plans and Non-Controlling Interest" in
the Notes to the Condensed Consolidated Financial Statements.
Stock Repurchases:
The shares repurchased under our stock repurchase program have reduced our basic
and diluted weighted-average shares outstanding for the nine months ended
March 31, 2021 and 2020. The stock repurchase program is intended, in part, to
offset the dilution from our equity incentive plans, shares issued in connection
with purchases under our ESPP, and the issuance of shares in the Orbotech
Acquisition, as well as to return excess cash to our shareholders.
Cash Flows from Operating Activities:
We have historically financed our liquidity requirements through cash generated
from our operations. Net cash provided by operating activities during the nine
months ended March 31, 2021 was $1.72 billion compared to $1.33 billion during
the nine months ended March 31, 2020. This increase of $393.4 million resulted
primarily from the following:
•An increase in collections of approximately $751.0 million mainly driven by
higher shipments and prepayments during the nine months ended March 31, 2021;
partially offset by
•An increase in accounts payable payments of approximately $239.0 million during
the nine months ended March 31, 2021;
•An increase in employee related payments of approximately $58.0 million during
the nine months ended March 31, 2021;
•An increase in income tax payments of approximately $51.9 million during the
nine months ended March 31, 2021; and
•An increase in other tax payments of approximately $13.0 million during the
nine months ended March 31, 2021.
Cash Flows used in Investing Activities:
Net cash used in investing activities during the nine months ended March 31,
2021 was $406.8 million compared to $153.1 million during the nine months ended
March 31, 2020. This increase in cash used was mainly due to an increase in net
purchases of available for sale and trading securities of $285.2 million and an
increase in cash paid to purchase fixed assets of $65.4 million, partially
offset by a decrease in cash paid for business acquisitions of $78.6 million and
an increase in cash received from sale of business of $16.8 million.
Cash Flows used in Financing Activities:
Net cash used in financing activities during the nine months ended March 31,
2021 was $1.11 billion compared to cash used by financing activities of $1.24
billion during the nine months ended March 31, 2020. This decrease was mainly
due to a decrease in cash used for common stock repurchases of $190.3 million,
partially offset by an increase in cash paid for dividends and dividend
equivalents of $30.4 million, and an increase in net debt repayments of $25.6
million.
Senior Notes:
We have senior unsecured notes in the aggregate principal amount of $3.45
billion outstanding as of March 31, 2021. In February 2020, we issued $750
million ("2020 Senior Notes") aggregate principal amount of senior, unsecured
long-term notes under which the proceeds were used to redeem $500.0 million of
Senior Notes due 2021, including associated redemption premiums, accrued
interest and other fees and expenses, to repay borrowings of $200.0 million
under the Revolving Credit Facility, and for other general corporate purposes.
In March 2019 and November 2014, we issued $1.20 billion (the "2019
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Senior Notes") and $2.50 billion (the "2014 Senior Notes" and together with the
2019 Senior Notes and the 2020 Senior Notes, the "Senior Notes"), respectively,
aggregate principal amount of senior, unsecured long-term notes. See Note 8
"Debt" of the Notes to the Consolidated Condensed Financial Statements for
additional discussion of existing debt. We may seek to refinance our existing
debt and may incur additional indebtedness depending on our capital requirements
and the availability of financing.
Interest is payable as follows: semi-annually on March 1 and September 1 of each
year for the 2020 Senior Notes; semi-annually on March 15 and September 15 of
each year for the 2019 Senior Notes; and semi-annually on May 1 and November 1
of each year for the 2014 Senior Notes. The Indenture for the Senior Notes
includes covenants that limit our ability to grant liens on our facilities and
enter into sale and leaseback transactions, subject to certain allowances under
which certain sale and leaseback transactions are not restricted.
In certain circumstances involving a change of control followed by a downgrade
of the rating of a series of Senior Notes by at least two of Moody's, S&P and
Fitch Inc., unless we have exercised our rights to redeem the Senior Notes of
such series, we will be required to make an offer to repurchase all or, at the
holder's option, any part, of each holder's Senior Notes of that series pursuant
to the offer described below (the "Change of Control Offer"). In the Change of
Control Offer, we will be required to offer payment in cash equal to 101% of the
aggregate principal amount of Senior Notes repurchased plus accrued and unpaid
interest, if any, on the Senior Notes repurchased, up to, but not including, the
date of repurchase.
As of March 31, 2021, we were in compliance with all of our covenants under the
Indenture associated with the Senior Notes.
Revolving Credit Facility:
We have a Credit Agreement (the "Credit Agreement") providing for a $1.00
billion unsecured Revolving Credit Facility (the "Revolving Credit Facility"),
with a maturity date of November 30, 2023. In the second and fourth quarters of
fiscal 2020, we borrowed $250.0 million and $200.0 million, respectively, from
the Revolving Credit Facility. In the second, third, and fourth quarters of
fiscal 2020, we made principal payments of $25.0 million, $200.0 million and
$175.0 million, respectively. During the first quarter of the fiscal year ending
June 30, 2021, we made a principal payment of $50.0 million on the Revolving
Credit Facility so that as of March 31, 2021, we had no outstanding borrowings
under the Revolving Credit Facility.
We may borrow, repay and reborrow funds under the Revolving Credit Facility
until the maturity date, at which time such Revolving Credit Facility will
terminate, and all outstanding loans under such facility, together with all
accrued and unpaid interest, must be repaid. We may prepay outstanding
borrowings under the Revolving Credit Facility at any time without a prepayment
penalty.
Borrowings under the Revolving Credit Facility will bear interest, at our
option, at either: (i) the Alternative Base Rate ("ABR") plus a spread, which
ranges from 0 bps to 75 bps, or (ii) the London Interbank Offered Rate ("LIBOR")
plus a spread, which ranges from 100 bps to 175 bps. The spreads under ABR and
LIBOR are subject to adjustment in conjunction with credit rating downgrades or
upgrades. We are also obligated to pay an annual commitment fee on the daily
undrawn balance of the Revolving Credit Facility, which ranges from 10 bps to 25
bps, subject to an adjustment in conjunction with changes to our credit rating.
As of March 31, 2021, we elected to pay interest on the borrowed amount under
the Revolving Credit Facility at LIBOR plus a spread of 112.5 bps, and we pay an
annual commitment fee of 12.5 bps on the daily undrawn balance of the Revolving
Credit Facility.
The Revolving Credit Facility requires us to maintain an interest expense
coverage ratio as described in the Credit Agreement, on a quarterly basis,
covering the trailing four consecutive fiscal quarters of no less than 3.50 to
1.00. In addition, we are required to maintain the maximum leverage ratio as
described in the Credit Agreement, on a quarterly basis of 3.00 to 1.00,
covering the trailing four consecutive fiscal quarters for each fiscal quarter,
which can be increased to a maximum of 4.00 to 1.00 for a period of time in
connection with a material acquisition or a series of material acquisitions, as
we elected to increase our maximum leverage ratio from January through December
2019 in connection with the Orbotech acquisition. As of March 31, 2021, our
maximum allowed leverage ratio was 3.00 to 1.00.
We were in compliance with all covenants under the Credit Agreement as of
March 31, 2021 (the interest expense coverage ratio was 16.97 to 1.00 and the
leverage ratio was 1.30 to 1.00). Considering our current liquidity position,
short-term financial forecasts and ability to prepay the Revolving Credit
Facility, if necessary, we expect to continue to be in compliance with our
financial covenants at the end of our fiscal year ending June 30, 2021.
Contractual Obligations:
There have been no material changes outside the ordinary course of business to
our contractual obligations as disclosed in our Annual Report on Form 10-K for
the fiscal year ended June 30, 2020. For additional details regarding our debt
and
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commitments, refer to Note 8 "Debt" and Note 15 "Commitments and Contingencies,"
respectively, in the Notes to the Condensed Consolidated Financial Statements.
For additional details regarding our contractual obligations, refer to our
Annual Report Form on 10-K for the fiscal year ended June 30, 2020.
Working Capital:
Working capital was $3.38 billion as of March 31, 2021, which represents an
increase of $351.9 million compared to our working capital of $3.02 billion as
of June 30, 2020. As of March 31, 2021, our principal sources of liquidity
consisted of $2.44 billion of cash, cash equivalents and marketable securities.
Our liquidity may be affected by many factors, some of which are based on the
normal ongoing operations of the business, spending for business acquisitions,
and other factors such as uncertainty in the global and regional economies and
the semiconductor, semiconductor related and electronic device industries.
Although cash requirements will fluctuate based on the timing and extent of
these factors, we believe that cash generated from operations, together with the
liquidity provided by existing cash and cash equivalents balances and
availability under our Revolving Credit Facility, will be sufficient to satisfy
our liquidity requirements associated with working capital needs, capital
expenditures, cash dividends, stock repurchases and other contractual
obligations, including repayment of outstanding debt, for at least the next 12
months.
Our credit ratings as of March 31, 2021 are summarized below:
Rating Agency        Rating
Fitch                 BBB+
Moody's               Baa1
Standard & Poor's     BBB+

Factors that can affect our credit ratings include changes in our operating performance, the economic environment, conditions in the semiconductor and semiconductor equipment industries, our financial position, material acquisitions and changes in our business strategy.



Off-Balance Sheet Arrangements
As of March 31, 2021, we did not have any off-balance sheet arrangements, as
defined in Item 303(a)(4)(ii) of Regulation S-K, that have or are reasonably
likely to have a current or future effect on our financial position, changes in
financial condition, revenues and expenses, results of operations, liquidity,
capital expenditures, or capital resources that are material to investors. Refer
to Note 15 "Commitments and Contingencies" in the Notes to the Condensed
Consolidated Financial Statements for information related to indemnification
obligations.
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