XML 19 R8.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Note 1 - Summary of Significant Accounting Policies and Other Information | 6 Months Ended
--- | ---
Jun. 30, 2018
Notes to Financial Statements |
Significant Accounting Policies [Text Block] | 1. Summary of Significant Accounting Policies and Other Information Nature of Operations Littelfuse, Inc. and subsidiaries (the “Company”) is a global leader in circuit protection products with advancing platforms in power control and sensor technologies, serving customers in the electronics, automotive, and industrial markets. With a diverse and extensive product portfolio of fuses, semiconductors, polymers, ceramics, relays and sensors, the Company works with its customers to build safer, more reliable and more efficient products for the connected world in virtually every market that uses electrical energy, ranging across consumer electronics, IT and telecommunication applications, industrial electronics, automobiles and other transportation, and heavy industrial applications. The Company has a network of global engineering centers and labs that develop new products and product enhancements, provides customer application support and test products for safety, reliability, and regulatory compliance. Basis of Presentation The Company’s accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information, the instructions to Form 10 -Q and Article 10 of Regulation S- X. Accordingly, certain information and disclosures normally included in the consolidated balance sheets, statements of net income and comprehensive income and cash flows prepared in conformity with U.S. GAAP have been condensed or omitted as permitted by such rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. They have been prepared in accordance with accounting policies described in the Company’s Annual Report on Form 10 -K for the year ended December 30, 2017, which should be read in conjunction with the disclosures therein. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal, recurring nature. Operating results for interim periods are not necessarily indicative of annual operating results. Revenue Recognition Adoption On December 31, 2017, the Company adopted new guidance on revenue from contracts with customers using the modified retrospective method. The adoption did not have a significant impact on the Company’s consolidated financial statements. Revenue Disaggregation The following table disaggregates the Company’s revenue by primary business units for the three and six months ended June 30, 2018:
|  | For the three months ended June 30, 2018 |
(in thousands) |  | Electronics Segment |  |  | Automotive Segment |  |  | Industrial Segment |  |  | Total |
Electronics – Passive Products and Sensors |  | $ | 128,321 |  |  | $ | — |  |  | $ | — |  |  | $ | 128,321 |
Electronics – Semiconductor |  |  | 171,036 |  |  |  | — |  |  |  | — |  |  |  | 171,036 |
Passenger Car Products |  |  | — |  |  |  | 63,581 |  |  |  | — |  |  |  | 63,581 |
Automotive Sensors |  |  | — |  |  |  | 30,729 |  |  |  | — |  |  |  | 30,729 |
Commercial Vehicle Products |  |  | — |  |  |  | 32,862 |  |  |  | — |  |  |  | 32,862 |
Industrial Products |  |  | — |  |  |  | — |  |  |  | 32,654 |  |  |  | 32,654 |
Total |  | $ | 299,357 |  |  | $ | 127,172 |  |  | $ | 32,654 |  |  | $ | 459,183 |
|  | For the six months ended June 30, 2018 |
(in thousands) |  | Electronics Segment |  |  | Automotive Segment |  |  | Industrial Segment |  |  | Total |
Electronics – Passive Products and Sensors |  | $ | 242,816 |  |  | $ | — |  |  | $ | — |  |  | $ | 242,816 |
Electronics – Semiconductor |  |  | 320,952 |  |  |  | — |  |  |  | — |  |  |  | 320,952 |
Passenger Car Products |  |  | — |  |  |  | 127,160 |  |  |  | — |  |  |  | 127,160 |
Automotive Sensors |  |  | — |  |  |  | 62,052 |  |  |  | — |  |  |  | 62,052 |
Commercial Vehicle Products |  |  | — |  |  |  | 64,090 |  |  |  | — |  |  |  | 64,090 |
Industrial Products |  |  | — |  |  |  | — |  |  |  | 59,926 |  |  |  | 59,926 |
Total |  | $ | 563,768 |  |  | $ | 253,302 |  |  | $ | 59,926 |  |  | $ | 876,996 |
See Note 12, Segment Information for net sales by segment and countries. Revenue Recognition The Company recognizes revenue on product sales in the period in which the Company satisfies its performance obligation and control of the product is transferred to the customer. The Company’s sales arrangements with customers are predominately short term in nature and generally provide for transfer of control at the time of shipment as this is the point at which title and risk of loss of the product transfers to the customer. At the end of each period, for those shipments where title to the products and the risk of loss and rewards of ownership do not transfer until the product has been received by the customer, the Company adjusts revenues and cost of sales for the delay between the time that the products are shipped and when they are received by the customer. The amount of revenue recorded reflects the consideration to which the Company expects to be entitled in exchange for goods and may include adjustments for customer allowance, rebates and price adjustments. The Company’s distribution channels are primarily through direct sales and independent third -party distributors. The Company has elected the practical expedient under ASC 340 - 40 - 25 - 4 to expense commissions when incurred as the amortization period of the commission asset the Company would have otherwise recognized is less than one year. Revenue and Billing The Company generally accepts orders from customers through receipt of purchase orders or electronic data interchange based on written sales agreements and purchasing contracts. Contract pricing and selling agreement terms are based on market factors, costs, and competition. Pricing is often negotiated as an adjustment (premium or discount) from the Company’s published price lists. The customer is invoiced when the Company’s products are shipped to them in accordance with the terms of the sales agreement. As the Company’s standard payment terms are less than one year, the Company has elected the practical expedient under ASC 606 - 10 - 32 - 18 to not assess whether a contract has a significant financing component. The Company also elected the practical expedient provided in ASC 606 - 10 - 25 - 18B to treat all product shipping and handling activities as fulfillment activities, and therefore recognize the gross revenue associated with the contract, inclusive of any shipping and handling revenue. This is similar to the Company’s prior practice and therefore the effect of the new guidance is immaterial. Ship and Debit Program Some of the terms of the Company’s sales agreements and normal business conditions provide customers (distributors) the ability to receive price adjustments on products previously shipped and invoiced. This practice is common in the industry and is referred to as a “ship and debit” program. This program allows the distributor to debit the Company for the difference between the distributors’ contracted price and a lower price for specific transactions. Under certain circumstances (usually in a competitive situation or large volume opportunity), a distributor will request authorization for pricing allowances to reduce its price. When the Company approves such a reduction, the distributor is authorized to “debit” its account for the difference between the contracted price and the lower approved price. The Company establishes reserves for this program based on historic activity and actual authorizations for the debit and recognizes these debits as a reduction of revenue. Return to Stock The Company has a return to stock policy whereby certain customers, with prior authorization from Littelfuse management, can return previously purchased goods for full or partial credit. The Company establishes an estimated allowance for these returns based on historic activity. Sales revenue and cost of sales are reduced to anticipate estimated returns. Volume Rebates The Company offers volume based sales incentives to certain customers to encourage greater product sales. If customers achieve their specific quarterly or annual sales targets, they are entitled to rebates. The Company estimates the projected amount of rebates that will be achieved by the customer and recognizes this estimated cost as a reduction to revenue as products are sold. Recently Adopted Accounting Standards In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017 - 07 “Compensation-Retirement Benefits (Topic 715 ): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-Retirement Benefit Cost,” which changed the presentation of net periodic pension and post-retirement benefit cost (net benefit cost) within the Statement of Income. Under the previous guidance, net benefit cost was reported as an employee cost within operating income. The amendment required the bifurcation of net benefit cost, with the service cost component to be presented with other employee compensation costs in operating income while the other components will be reported separately outside of income from operations. ASU No. 2017 - 07 was effective for the first quarter of 2018 with the Company adopting the new standard on December 31, 2017. In January 2016, the FASB issued ASU No. 2016 - 01, “Financial Instruments-Recognition and Measurement of Financial Assets and Financial Liabilities” which addressed certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. The ASU requires the Company to recognize any changes in the fair value of certain equity investments in net income. Previously these changes were recognized in other comprehensive income ("OCI"). The Company adopted the new standard on December 31, 2017, on a modified retrospective basis, recognizing the cumulative effect as a $9.8 million increase to retained earnings. As a result of the adoption of the new standard and change in fair value of our equity investments, for the six months ended June 30, 2018, the Company recognized an unrealized gain of $2.8 million in Other (income) expense, net in the Condensed Consolidated Statements of Net Income. In May 2014, the FASB issued ASU No. 2014 - 09, “Revenue from Contracts with Customers” (Topic 606 ) which supersedes the revenue recognition requirements in ASC 605, “Revenue Recognition.” This ASU provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. The Company adopted the new standard on December 31, 2017 using the modified retrospective method, however, no adjustment to retained earnings was needed. The new guidance did not have a material effect on the Company’s Condensed Consolidated Statements of Income. See the Revenue Recognition section above for further discussion. In October 2016, the FASB issued ASU No. 2016 - 16, "Income Taxes” (Topic 740 ). This ASU update requires entities to recognize the income tax consequences of many intercompany asset transfers at the transaction date. The seller and buyer will immediately recognize the current and deferred income tax consequences of an intercompany transfer of an asset other than inventory. The tax consequences were previously deferred. The Company adopted the new standard on December 31, 2017 and it did not have a material impact. Recently Issued Accounting Standards In February 2016, the FASB issued ASU No. 2016 - 02, "Leases" (Topic 842 ). This ASU requires lessees to recognize, on the balance sheet, assets and liabilities for the rights and obligations created by leases of greater than twelve months. The accounting by lessors will remain largely unchanged. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. Adoption will require a modified retrospective transition. The Company will adopt the standard in the first quarter of 2019. The Company has made progress on assessing the Company’s portfolio of leases and compiling a central repository of all active leases. We are in the process of assessing the design of the future lease process and drafting a policy to address the new standard requirements. Key lease data elements are being evaluated including developing a methodology for determining the incremental borrowing rate across all countries where we have operations. While the Company has not yet completed its evaluation of the impact the new lease accounting standard will have on its Consolidated Financial Statements, the Company expects to recognize right of use assets and lease liabilities for its operating leases in the Consolidated Balance Sheet upon adoption. In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income ("GILTI") provisions of the 2017 U.S. Tax Cuts and Jobs Act (the “Tax Act”). The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The guidance indicates that either accounting for deferred taxes related to GILTI inclusions or treating any taxes on GILTI inclusions as period cost are both acceptable methods subject to an accounting policy election. The Company has not yet completed its assessment and therefore has not yet elected an accounting policy. In February 2018, the FASB issued ASU No. 2018 - 02 “Income Statement—Reporting Comprehensive Income (Topic 220 ): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which permits the reclassification of tax effects stranded in accumulated other comprehensive income to retained earnings as a result of the Tax Act. The standard also requires entities to disclose whether or not they elected to reclassify the tax effects related to the Tax Act as well as their policy for releasing income tax effects from accumulated other comprehensive income. The standard allows the option of applying either a retrospective adoption, meaning the standard is applied to all periods in which the effect of the Tax Act is recognized, or applying the amendments in the period of adoption, meaning an adjustment is made to shareholder’s equity as of the beginning of the reporting period. ASU 2018 - 02 will be effective in the first quarter of 2019; however early adoption is permitted for interim and annual periods, including the reporting period in which the Tax Act was enacted. The Company is currently evaluating the impact of ASU 2018 - 02 on the Consolidated Financial Statements.

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for all significant accounting policies of the reporting entity. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
Name: | us-gaap_SignificantAccountingPoliciesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration