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Balance Sheet Information | 12 Months Ended
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Dec. 31, 2013
Balance Sheet Information |
Balance Sheet Information | 6. Balance Sheet Information Short-Term Investments Available-for-sale securities consist of the following (in thousands):
|  | December 31, 2013 |
|  |  |  | Gains in |  | Losses in |  |  |
|  |  |  | Accumulated |  | Accumulated |  |  |
|  |  |  | Other |  | Other |  |  |
|  | Amortized |  | Comprehensive |  | Comprehensive |  | Estimated |
|  | Cost |  | Income |  | Income |  | Fair Value |
U.S. treasuries |  | $ | 130,956 |  | $ | 22 |  | $ | (1 | ) | $ | 130,977 |
Government agency securities |  | 61,004 |  | 9 |  | — |  | 61,013 |
Corporate debt |  | 77,582 |  | 55 |  | (36 | ) | 77,601 |
Commercial paper |  | 11,947 |  | — |  | — |  | 11,947 |
Total available-for-sale securities |  | $ | 281,489 |  | $ | 86 |  | $ | (37 | ) | $ | 281,538 |
During the year ended December 31, 2013, sales and maturities of available-for-sale securities provided total proceeds of $499.6 million. The gross realized gains on these sales were $0.1 million for the year ended December 31, 2013. For purpose of determining gross realized gains, the cost of securities sold is based on specific identification. The change in the net unrealized holding gain on available-for-sale securities was minimal for the year ended December 31, 2013, and has been included in accumulated other comprehensive income. The tax impact on the unrealized gains, which is excluded from the table above, was less than $0.1 million.
|  | December 31, 2012 |
|  |  |  | Gains in |  | Losses in |  |  |
|  |  |  | Accumulated |  | Accumulated |  |  |
|  |  |  | Other |  | Other |  |  |
|  | Amortized |  | Comprehensive |  | Comprehensive |  | Estimated |
|  | Cost |  | Income |  | Income |  | Fair Value |
U.S. treasuries |  | $ | 184,102 |  | $ | 76 |  | $ | — |  | $ | 184,178 |
Government agency securities |  | 8,056 |  | — |  | — |  | 8,056 |
Total available-for-sale securities |  | $ | 192,158 |  | $ | 76 |  | $ | — |  | $ | 192,234 |
During the year ended December 31, 2012, sales and maturities of available-for-sale securities provided total proceeds of $244.9 million. The gross realized gains on these sales were minimal for the year ended December 31, 2012. For purpose of determining gross realized gains, the cost of securities sold is based on specific identification. The change in the net unrealized holding gain on available-for-sale securities amounted to $0.1 million for the year ended December 31, 2012, and has been included in accumulated other comprehensive income. The tax impact on the unrealized gains, which is excluded from the table above, was minimal. Available-for-sale securities in a loss position at December 31, 2013 are as follows (in thousands):
|  | Less than 12 months |  | Total |
|  |  |  | Gross |  |  |  | Gross |
|  |  |  | Unrealized |  |  |  | Unrealized |
|  | Fair value |  | Losses |  | Fair value |  | Losses |
Corporate debt |  | $ | 37,654 |  | $ | (36 | ) | $ | 37,654 |  | $ | (36 | )
U.S. treasuries |  | 29,068 |  | (1 | ) | 29,068 |  | (1 | )
Total |  | $ | 66,722 |  | $ | (37 | ) | $ | 66,722 |  | $ | (37 | )
As of December 31, 2013 we had $66.7 million in short-term investments that had an aggregate unrealized fair value loss of less than $0.1 million none of which had been in an unrealized loss position for 12 months or longer. As of December 31, 2012 we did not hold any short-term investments that were in a loss position. Contractual maturities of available-for-sale securities as of December 31, 2013 are as follows (in thousands):
|  | Estimated |
|  | Fair Value |
Due in one year or less |  | $ | 196,015 |
Due in 1–2 years |  | 64,156 |
Due in 2–3 years |  | 21,367 |
Total investments in securities |  | $ | 281,538 |
Actual maturities may differ from contractual maturities because some borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Restricted Cash As of December 31, 2013 and 2012, restricted cash consisted of $2.7 million and $2.0 million, respectively, which serves as collateral for bank guarantees that provide financial assurance that the Company will fulfill certain customer obligations. This cash is held in custody by the issuing bank, and is restricted as to withdrawal or use while the related bank guarantees are outstanding. Accounts Receivable, Net Accounts receivable are shown net of the allowance for doubtful accounts of $2.4 million and $0.5 million as of December 31, 2013 and 2012, respectively. Inventories (in thousands)
|  | December 31, |
|  | 2013 |  | 2012 |
Materials |  | $ | 34,301 |  | $ | 36,523 |
Work in process |  | 12,900 |  | 13,363 |
Finished goods |  | 12,525 |  | 9,921 |
|  | $ | 59,726 |  | $ | 59,807 |
Property, Plant and Equipment (in thousands)
|  | December 31, |  | Estimated |
|  | 2013 |  | 2012 |  | Useful Lives |
Land |  | $ | 12,535 |  | $ | 12,535 |  |  |
Building and improvements |  | 52,050 |  | 49,498 |  | 10-40 years |
Machinery and equipment |  | 110,228 |  | 110,150 |  | 3-10 years |
Leasehold improvements |  | 5,888 |  | 5,677 |  | 3-7 years |
Gross property, plant and equipment at cost |  | 180,701 |  | 177,860 |  |  |
Less: accumulated depreciation and amortization |  | 91,562 |  | 79,558 |  |  |
Net property, plant and equipment |  | $ | 89,139 |  | $ | 98,302 |  |  |
For the years ended December 31, 2013, 2012 and 2011, depreciation expense was $12.9 million, $11.3 million and $8.2 million, respectively. As of December 31, 2013, we had $7.2 million of tools that we previously used in our laboratories carried in machinery and equipment which we are holding for sale. These tools are the same type of tools we sell to our customers in the ordinary course of our business. In addition, during the year ended December 31, 2013, we converted and sold $3.7 million of tools that we had previously used in our laboratories as Veeco Certified Equipment at an aggregate selling price of $7.4 million which is included in revenue. During 2013, we recorded asset impairment charges in LED & Solar of $0.9 million related to certain tools used in our laboratories carried in machinery and equipment which we are holding for sale. Goodwill and Indefinite-Lived Intangible Assets In accordance with the relevant accounting guidance related to goodwill and other intangible assets, we conducted our annual impairment test of goodwill and indefinite-lived intangible assets during the fourth quarters of 2013 and 2012, using October 1st as our measurement date as described in our footnote Description of Business and Significant Accounting Policies. Based upon the results of the qualitative assessment we determined that it was not more likely than not that goodwill or our indefinite-lived intangible assets were impaired. Therefore, we determined that no impairment of goodwill and indefinite-lived intangible asset existed as of October 1, 2013. In 2012, we determined not to perform the optional qualitative assessment and performed our step 1 assessment utilizing discounted future cash flows and a reconciliation to our market capitalization. Based on our assessment we determined that there was no impairment of our goodwill or our indefinite-lived assets as of October 1, 2012. Changes in our goodwill are as follows (in thousands):
|  | December 31, |
|  | 2013 |  | 2012 |
Beginning balance |  | $ | 55,828 |  | $ | 55,828 |
Acquisition (see Business Combinations) |  | 35,520 |  | — |
Ending balance |  | $ | 91,348 |  | $ | 55,828 |
Intangible Assets As of December 31, 2013, we had $8.0 million of indefinite-lived intangible assets consisting of trademarks, tradenames and in-process research and development (“IPR&D”). Pursuant to acquisition guidance, IPR&D is carried as an indefinite lived intangible until abandonment or completion. As of December 31, 2012, we had $2.9 million of indefinite-lived intangible assets consisting of trademarks and tradenames. These intangibles are included in the accompanying Consolidated Balance Sheets in the caption intangible assets, net.
|  | December 31, 2013 |  | December 31, 2012 |
|  |  |  | Other |  | Total |  |  |  | Other |  | Total |
|  | Purchased |  | intangible |  | intangible |  | Purchased |  | intangible |  | intangible |
(in thousands) |  | technology |  | assets |  | assets |  | technology |  | assets |  | assets |
Gross intangible assets |  | $ | 187,478 |  | $ | 40,675 |  | $ | 228,153 |  | $ | 109,248 |  | $ | 19,635 |  | $ | 128,883 |
Less accumulated amortization |  | (97,524 | ) | (15,913 | ) | (113,437 | ) | (93,436 | ) | (14,473 | ) | (107,909 | )
Intangible assets, net |  | $ | 89,954 |  | $ | 24,762 |  | $ | 114,716 |  | $ | 15,812 |  | $ | 5,162 |  | $ | 20,974 |
The estimated aggregate amortization expense for intangible assets with definite useful lives for each of the next five fiscal years is as follows (in thousands):
2014 |  | $ | 11,569 |
2015 |  | 19,376 |
2016 |  | 18,498 |
2017 |  | 15,876 |
2018 |  | 12,244 |
Other Assets
|  | December 31, |
(in thousands) |  | 2013 |  | 2012 |
Cost method investment |  | $ | 16,884 |  | $ | 14,494 |
Income taxes receivable |  | 21,128 |  | — |
Other |  | 714 |  | 2,287 |
|  | $ | 38,726 |  | $ | 16,781 |
Cost Method Investment On September 28, 2010, we completed a $3 million investment in a rapidly developing organic light emitting diode (also known as OLED) equipment company (the “Investment”). We invested an additional $10.3 million and $1.2 million in the Investment during 2012 and 2011, respectively. In 2013, we invested an additional $2.4 million in the Investment in the form of bridge notes bearing 4% interest. The bridge notes are payable in equity at the time of a liquidity event or a qualifying equity investment round, otherwise they are payable in cash in June 2014. As of December 31, 2013, we have a 15.4% ownership of the preferred shares, and effectively hold a 11.0% ownership interest of the total company. Since we do not exert significant influence on the Investment, this investment is treated under the cost method in accordance with applicable accounting guidance. This investment is recorded in other assets in our Consolidated Balance Sheets as of December 31, 2013 and 2012. Accrued Expenses and Other Current Liabilities
|  | December 31, |
(in thousands) |  | 2013 |  | 2012 |
Payroll and related benefits |  | $ | 11,020 |  | $ | 14,581 |
Sales, use and other taxes |  | 5,402 |  | 6,480 |
Contingent consideration |  | 20,098 |  | — |
Warranty |  | 5,662 |  | 4,942 |
Restructuring liability |  | 533 |  | 1,875 |
Other |  | 8,369 |  | 13,523 |
|  | $ | 51,084 |  | $ | 41,401 |
Customer deposits and deferred revenue As of December 31, 2013 and 2012, we had customer deposits of $27.5 million and $32.7 million, respectively recorded as a component of customer deposits and deferred revenue. Accrued Warranty Typically, we provide our customers a one year manufacturer’s warranty from the date of final acceptance on the products they purchase from us. We estimate the costs that may be incurred under the warranty we provide for our products and recognize a liability in the amount of such costs at the time the related revenue is recognized. Factors that affect our warranty liability include product failure rates, material usage and labor costs incurred in correcting product failures during the warranty period. Changes in our warranty liability during the year are as follows:
|  | December 31, |
|  | 2013 |  | 2012 |
Balance as of the beginning of year |  | $ | 4,942 |  | $ | 8,731 |
Warranties issued during the year |  | 5,291 |  | 3,563 |
Settlements made during the year |  | (5,580 | ) | (7,060 | )
Changes in estimate during the period |  | 1,009 |  | (292 | )
Balance as of the end of year |  | $ | 5,662 |  | $ | 4,942 |
Other Liabilities
|  | December 31, |
(in thousands) |  | 2013 |  | 2012 |
Contingent consideration |  | $ | 9,270 |  | $ | — |
Income taxes payable |  | — |  | 3,986 |
Other |  | 379 |  | 544 |
|  | $ | 9,649 |  | $ | 4,530 |
Accumulated Other Comprehensive Income The components of accumulated other comprehensive income are:
As of December 31, 2013 |  | Gross |  | Taxes |  | Net |
Translation adjustments |  | $ | 5,718 |  | $ | (392 | ) | $ | 5,326 |
Minimum pension liability |  | (1,160 | ) | 424 |  | (736 | )
Unrealized gain on available-for-sale securities |  | 49 |  | (18 | ) | 31 |
Accumulated other comprehensive income |  | $ | 4,607 |  | $ | 14 |  | $ | 4,621 |
As of December 31, 2012 |  | Gross |  | Taxes |  | Net |
Translation adjustments |  | $ | 7,040 |  | $ | (339 | ) | $ | 6,701 |
Minimum pension liability |  | (1,285 | ) | 510 |  | (775 | )
Unrealized gain on available-for-sale securities |  | 76 |  | (29 | ) | 47 |
Accumulated other comprehensive income |  | $ | 5,831 |  | $ | 142 |  | $ | 5,973 |

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