31 unchanged sentences
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
−Removed: Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
−Removed: inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
+Added: Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Melville, New York
29 unchanged sentences
Amendment to Certificate of Incorporation of Veeco dated May 18, 2010.
−Removed: Fifth Amended and Restated Bylaws of Veeco effective February 5, 2016.
+Added: Sixth Amended and Restated Bylaws of Veeco effective January 22, 2021.
Certificate of Designation, Preferences, and Rights of Series A Junior Participating Preferred Stock of Veeco dated March 14, 2001.
3 unchanged sentences
Bank National Association, as Trustee (relating to the 2.70% Convertible Notes due 2023).
+Added: Indenture, dated as of May 18, 2020, between Veeco Instruments Inc.
+Added: Bank National Association, as trustee.
+Added: Form of 3.75% Convertible Senior Notes due 2027 .
+Added: Indenture, dated as of November 17, 2020, between Veeco Instruments Inc.
+Added: Bank National Association, as trustee .
+Added: Form of 3.50% Convertible Senior Notes due 2025 .
Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 .
+Added: Veeco Severance Benefits Policy, effective May 1, 2009.
Veeco Amended and Restated 2010 Stock Incentive Plan, effective May 14, 2010.
+Added: Incorporated by Reference
+Added: Exhibit Description
Veeco Amended and Restated 2010 Stock Incentive Plan, effective May 5, 2016.
4 unchanged sentences
1993 Stock Option/Stock Issuance Plan (as Amended and Restated as of May 31, 2011).
−Removed: Form of Notice of Performance Share Award and related terms and conditions pursuant to the Veeco 2010 Stock Incentive Plan, effective June 2015.
−Removed: Incorporated by Reference
−Removed: Exhibit Description
+Added: Form of Capped Call Confirmation.
+Added: Exchange Agreement .
Form of Notice of Performance Share Award and related terms and conditions pursuant to the Veeco 2010 Stock Incentive Plan, effective June 2016.
5 unchanged sentences
Form of Notice of Restricted Stock Award and related terms and conditions pursuant to the Veeco 2010 Stock Incentive Plan, effective March 2019 (time-based version B) .
+Added: Form of Notice of Performance Restricted Stock Unit Award and related terms and conditions pursuant to the Veeco 2019 Stock Incentive Plan, effective March 2020.
+Added: Form of Notice of Restricted Stock Award and related terms and conditions pursuant to the Veeco 2019 Stock Incentive Plan, effective March 2020.
Veeco 2013 Inducement Stock Incentive Plan, effective September 26, 2013 .
4 unchanged sentences
Form of Amended and Restated Indemnification Agreement entered into between Veeco and each of its directors and executive officers (August 2017).
+Added: Incorporated by Reference
+Added: Exhibit Description
Veeco Amended and Restated Senior Executive Change in Control Policy, effective as of January 1, 2014.
3 unchanged sentences
Miller, Ph.D.
−Removed: Employment Agreement effective as of July 1, 2007 between Veeco and John R.
−Removed: Amendment effective December 31, 2008 to Employment Agreement between Veeco and John R.
−Removed: Second Amendment effective June 11, 2010 to Employment Agreement between Veeco and John R.
−Removed: Incorporated by Reference
−Removed: Exhibit Description
−Removed: Third Amendment effective April 25, 2012 to Employment Agreement between Veeco and John R.
−Removed: Amendment dated June 12, 2014 to Employment Agreement between Veeco and John R.
−Removed: Amendment dated June 12, 2017 to Employment Agreement between Veeco and John R.
−Removed: Amendment dated August 29, 2018 to Employment Agreement between Veeco and John R.
−Removed: Letter Agreement dated April 8, 2014 between Veeco and Shubham Maheshwari .
−Removed: Letter Agreement dated August 29, 2018 between Veeco and Shubham Maheshwari.
−Removed: Amendment dated March 22, 2019 to the Letter Agreement between Veeco and Shubham Maheshwari.
Letter Agreement dated January 21, 2004 between Veeco and John P.
2 unchanged sentences
Letter dated January 1, 2020 from Veeco to John P.
+Added: Letter Agreement dated March 20, 2019 between Veeco and Adrian Devasahayam.
+Added: Letter Agreement dated August 4, 2017 between Veeco and Peter Porshnev.
+Added: Letter Agreement dated March 9, 2020 between Veeco and Susan Wilkerson.
Subsidiaries of the Registrant.
6 unchanged sentences
Section 1350, as adopted pursuant to Section 906 of the Sarbanes - Oxley Act of 2002.
−Removed: XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
+Added: XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline.
+Added: XBRL document.
XBRL Presentation.
18 unchanged sentences
(principal financial & accounting officer)
−Removed: /s/ KATHLEEN A.
/s/ RICHARD A.
+Added: /s/ KATHLEEN A.
/s/ GORDON HUNTER
39 unchanged sentences
Assessment of the value of excess and obsolete inventory
−Removed: As discussed in Note 1 to the consolidated financial statements, the Company assesses the valuation of all inventories, including materials, work-in-process, and finished goods, each reporting period.
+Added: As discussed in Note 1 of the consolidated financial statements, the Company assesses the valuation of all inventories, including materials, work-in-process, and finished goods, each reporting period.
Obsolete inventory or inventory in excess of the Company’s estimated usage requirement is written down to its estimated net realizable value if less than
Estimates of usage include the Company’s analysis of anticipated demand, possible alternative uses of its inventory, as well as other qualitative factors.
−Removed: As of December 31, 2019, the Company’s inventories totaled $133.1 million, representing 16.3% of total assets.
+Added: As of December 31, 2020, the Company’s inventories totaled $145.9 million.
We identified the assessment of the value of excess and obsolete inventory as a critical audit matter.
−Removed: Subjective auditor judgment was required to evaluate the Company’s estimates of anticipated demand and possible alternative uses of its inventory, which are affected by market and economic conditions outside the Company’s control.
+Added: Subjective auditor judgment was required to evaluate the Company’s estimates of anticipated demand, which can be affected by market and economic conditions outside the Company’s control.
The primary procedures we performed to address this critical audit matter included the following.
−Removed: We tested certain internal controls over the Company’s inventory valuation process, including controls related to the development of estimates of anticipated demand and possible alternative uses of inventory.
−Removed: We evaluated current year estimates of anticipated demand used to value excess and obsolete inventory when it significantly differed from historical sales volumes and assessed possible alternative uses of inventory.
−Removed: For certain inventory items, we compared the prior year anticipated demand to actual results to assess the Company’s ability to accurately forecast.
−Removed: We compared possible alternative uses of certain inventory determined in the prior year to actual uses in the current year.
+Added: We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s inventory valuation process.
+Added: This included controls related to the development of estimates of anticipated demand of inventory.
+Added: We evaluated current year estimates of anticipated demand used to assess the value of excess and obsolete inventory by comparing them to historical sales volumes and inspecting documentation when they differed significantly.
+Added: For certain inventory items, we compared the prior year estimate of anticipated demand to actual results to assess the Company’s ability to accurately forecast.
We have served as the Company’s auditor since 2015.
37 unchanged sentences
120,000,000 shares authorized;
−Removed: 48,994,346 and 48,547,417 shares issued at December 31, 2019 and December 31, 2018, respectively;
−Removed: 48,994,346 and 48,024,685 shares outstanding at December 31, 2019 and December 31, 2018, respectively.
+Added: 49,723,751 shares issued and outstanding at December 31, 2020 and 48,994,346 shares issued and outstanding at December 31, 2019
Additional paid-in capital
1 unchanged sentence
Accumulated other comprehensive income
−Removed: Treasury stock, at cost, 522,732 shares at December 31, 2018.
Total stockholders' equity
40 unchanged sentences
Net changes related to currency translation adjustments
−Removed: Other comprehensive income (loss), net of tax
+Added: Total other comprehensive income (loss), net of tax
Total comprehensive income (loss)
7 unchanged sentences
Balance at December 31, 2017
−Removed: Other comprehensive loss, net of tax
+Added: Other comprehensive income, net of tax
Share-based compensation expense
Net issuance under employee stock plans
−Removed: Stock issuance for business acquisition
−Removed: Convertible Senior Notes, equity component
Purchases of common stock
3 unchanged sentences
Net issuance under employee stock plans
−Removed: Purchases of common stock
Balance at December 31, 2019
2 unchanged sentences
Net issuance under employee stock plans
+Added: Extinguishment of equity component of repurchased/exchanged 2023 Notes
+Added: Equity component of 2025 Notes
+Added: Equity component of 2027 Notes
+Added: Purchase of capped calls
Balance at December 31, 2020
12 unchanged sentences
Share-based compensation expense
+Added: Loss on extinguishment of debt
Asset impairment
8 unchanged sentences
Income taxes receivable and payable, net
−Removed: Long-term income tax liability
Net cash provided by (used in) operating activities
Cash Flows from Investing Activities
−Removed: Acquisitions of businesses, net of cash acquired
Capital expenditures
1 unchanged sentence
Payments for purchases of investments
−Removed: Proceeds from held for sale assets
+Added: Proceeds from held for sale assets, net of costs to sell
+Added: Acquisitions of businesses, net of cash acquired
Net cash provided by (used in) investing activities
Cash Flows from Financing Activities
+Added: Proceeds from issuance of 2025 Notes and 2027 Notes, net of issuance costs
+Added: Purchase of capped calls
+Added: Repurchase of 2023 Notes
Proceeds (net of tax withholdings) from option exercises and employee stock purchase plan
1 unchanged sentence
Purchases of common stock
−Removed: Proceeds from long-term debt borrowings
−Removed: Principal payments on long-term debt
Net cash provided by (used in) financing activities
7 unchanged sentences
Non-cash operating and financing activities
−Removed: Net transfer of inventory to property, plant and equipment
+Added: Net transfer of property, plant and equipment to inventory
Right-of-use assets obtained in exchange for lease obligations
12 unchanged sentences
The Company’s fourth quarter always ends on the last day of the calendar year, December 31.
−Removed: During 2019 the interim quarters ended on March 31, June 30, and September 29, and during 2018 the interim quarters ended on April 1, July 1, and September 30.
+Added: During 2020 the interim quarters ended on March 29, June 28, and September 27, and during 2019 the interim quarters ended on March 31, June 30, and September 29.
The Company reports these interim quarters as March 31, June 30, and September 30 in its interim consolidated financial statements.
47 unchanged sentences
The Company recognizes such revenue and costs upon obtaining objective evidence that the acceptance provisions can be achieved, assuming all other revenue recognition criteria have been met.
−Removed: In certain cases, the Company’s contracts with customers contain a billing retention, typically 10 % of the sales price, which is billed by the Company and payable by the customer when field acceptance provisions are completed.
+Added: In certain cases, the Company’s contracts with customers contain a billing retention, which is billed by the Company and payable by the customer when field acceptance provisions are completed.
Revenue recognized in advance of the amount that has been billed is recorded as a contract asset on the Consolidated Balance Sheets.
66 unchanged sentences
The Company also provides allowances based on its write-off history.
+Added: Finally, the Company also considers its current expectations of future economic conditions, including the impact of COVID-19, when estimating its allowance for doubtful accounts.
The allowance for doubtful accounts totaled $ 0.7 million and $ 0.6 million at December 31, 2020 and 2019, respectively.
2 unchanged sentences
The Company, at its discretion, may monetize these letters of credit on a non-recourse basis after they become negotiable but before maturity.
−Removed: The fees associated with the monetization are included in “Selling, general, and administrative” in the Consolidated Statements of Operations and were immaterial for the years ended December 31, 2019, 2018, and 2017.
Veeco Instruments Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Continued)
+Added: associated with the monetization are included in “Selling, general, and administrative” in the Consolidated Statements of Operations and were immaterial for the years ended December 31, 2020, 2019, and 2018.
(n) Fair Value of Financial Instruments
27 unchanged sentences
Inventory acquired as part of a business combination is recorded at fair value on the date of acquisition.
−Removed: See Note 5, “Acquisitions and Dispositions,” for additional information.
−Removed: (q) Business Combinations
−Removed: The Company allocates the fair value of the purchase consideration of the Company’s acquisitions to the tangible assets, intangible assets, including in-process research and development (“IPR&D”), if any, and liabilities assumed, based on
Veeco Instruments Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Continued)
−Removed: estimated fair values.
+Added: (q) Business Combinations
+Added: The Company allocates the fair value of the purchase consideration of the Company’s acquisitions to the tangible assets, intangible assets, including in-process research and development (“IPR&D”), if any, and liabilities assumed, based on estimated fair values.
The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.
Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.
−Removed: See Note 5, “Acquisitions and Dispositions,” for additional information.
(r) Goodwill and Indefinite-Lived Intangible Assets
20 unchanged sentences
Amortization of leasehold improvements is recognized using the straight-line method over the shorter of the remaining lease term or the estimated useful lives of the improvements.
−Removed: Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
−Removed: If circumstances require a long-lived asset or asset group be tested for possible impairment, a recoverability test is performed utilizing undiscounted cash flows expected to be generated by that asset or asset group compared to its carrying amount.
−Removed: If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent the carrying amount exceeds
Veeco Instruments Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Continued)
−Removed: its fair value.
+Added: Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
+Added: If circumstances require a long-lived asset or asset group be tested for possible impairment, a recoverability test is performed utilizing undiscounted cash flows expected to be generated by that asset or asset group compared to its carrying amount.
+Added: If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent the carrying amount exceeds its fair value.
Fair value is determined through various valuation techniques including discounted cash flow models or, when available, quoted market values and third-party appraisals.
8 unchanged sentences
(u) Recently Adopted Accounting Standards
−Removed: The Company adopted ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), as of January 1, 2018, using the full retrospective method.
−Removed: All amounts and disclosures set forth in this Form 10-K reflect these changes.
−Removed: The most significant financial statement impacts of adopting ASC 606 are the elimination of the constraint on revenue associated with the billing retention related to the receipt of customer final acceptance and the identification of installation services as a performance obligation.
−Removed: The elimination of the constraint on revenue related to customer final acceptance, which is usually about 10 percent of a system sale, is now generally recognized at the time the Company transfers control of the system to the customer, which is earlier than under the Company’s previous revenue recognition model for certain contracts that were subject to the billing constraint.
−Removed: The performance obligation related to installation services is now recognized as the installation services are performed, which is later than the Company’s previous revenue recognition model.
−Removed: The Company adopted ASU 2016-01, Financial Instruments – Overall , as of January 1, 2018.
−Removed: This ASU requires certain equity investments to be measured at fair value, with changes in fair value recognized in net income.
−Removed: The Company measures equity investments without readily observable market prices at cost, adjusted for changes in observable prices minus impairment.
−Removed: Changes in measurement are included in “Other income (expense), net” in the Consolidated Statements of Operations.
−Removed: This ASU has not had a material impact on the consolidated financial statements upon adoption, and the Company will monitor its equity investments each reporting period for changes in observable market prices, if any, which may be material in future periods.
The Company adopted ASC Topic 842, Leases (“ASC 842”), as of January 1, 2019.
5 unchanged sentences
The adoption of the standard impacted the Company’s Consolidated Balance Sheets through the recognition of ROU assets and lease liabilities of approximately $ 14.2 million each as of January 1, 2019 but did not have an impact on the Consolidated Statements of Operations, Statements of Comprehensive Income, or Statements of Cash Flows.
+Added: The Company adopted ASU 2019-12:
+Added: Income Taxes (Topic 740):
+Added: Simplifying the Accounting for Income Taxes in the second quarter of 2020, effective as of the beginning of fiscal year 2020.
+Added: This ASU simplifies the accounting for income taxes by eliminating certain exceptions to the general principles and simplifying several aspects of ASC 740, Income Taxes, including, but not limited to, requirements related to the following:
+Added: a) exception to the incremental approach for intraperiod tax allocation;
+Added: b) the tax basis step-up in goodwill obtained in a transaction that is not a business combination;
+Added: c) ownership changes in investments - changes from a subsidiary to an equity method investment;
+Added: d) separate financial statements of entities not subject to tax;
+Added: e) interim-period accounting for enacted changes in tax law;
+Added: and f) the year-to-date loss limitation in interim-period tax accounting.
+Added: The adoption did not have a material impact on the Company’s consolidated financial statements as of the date of adoption.
+Added: (v) Recent Accounting Pronouncements Not Yet Adopted
+Added: In August 2020, the FASB issued ASU 2020-06:
+Added: Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40):
+Added: Accounting for Convertible Instruments
Veeco Instruments Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Continued)
−Removed: (v) Recent Accounting Pronouncements Not Yet Adopted
−Removed: The Company is evaluating pronouncements recently issued but not yet adopted.
+Added: and Contracts in an Entity’s Own Equity .
+Added: This standard simplifies the accounting for convertible debt instruments by removing the separation models for convertible debt with a cash conversion feature, as well as convertible instruments with a beneficial conversion feature.
+Added: As a result, entities will account for a convertible debt instrument wholly as debt, unless certain other conditions are met.
+Added: The elimination of these models will reduce non-cash interest expense for entities that have issued a convertible instrument that was within the scope of those models before the adoption of ASU 2020-06.
+Added: Additionally, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share, and precludes the use of the treasury stock method for certain debt instruments.
+Added: The provisions of ASU 2020-06 are applicable for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020.
+Added: An entity should adopt the provisions at the beginning of its annual fiscal year.
+Added: The Company is evaluating the impact of ASU 2020-06 on its consolidated financial statements.
+Added: The Company is evaluating other pronouncements recently issued but not yet adopted.
The adoption of these pronouncements is not expected to have a material impact on our consolidated financial statements.
3 unchanged sentences
The dilutive effect of outstanding options to purchase common stock and non-participating share-based awards is considered in diluted income per share by application of the treasury stock method.
−Removed: The dilutive effect of performance share units is included in diluted income per common share in the periods the performance targets have been achieved.
+Added: The dilutive effect of performance share units is included in diluted income per common share in the periods the performance targets have been achieved, or would have been achieved if the reporting date was the end of the contingency period.
The computations of basic and diluted income (loss) per share for the years ended December 31, 2020, 2019, and 2018 are as follows:
8 unchanged sentences
Potentially dilutive shares excluded from the diluted calculation as their effect would be antidilutive
−Removed: Maximum potential shares to be issued for settlement of the Convertible Senior Notes excluded from the diluted calculation as their effect would be antidilutive
+Added: Maximum potential shares to be issued for settlement of the 2023, 2025, and 2027 Notes excluded from the diluted calculation as their effect would be antidilutive
+Added: Veeco Instruments Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Continued)
Note 3 — Fair Value Measurements
3 unchanged sentences
Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly;
−Removed: Veeco Instruments Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Continued)
Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
8 unchanged sentences
Commercial paper
−Removed: Corporate debt
Short-term investments
−Removed: Government agency securities
Corporate debt
3 unchanged sentences
Certificate of deposits and time deposits
+Added: Commercial paper
+Added: Corporate debt
Short-term investments
+Added: Government agency securities
Corporate debt
Commercial paper
−Removed: The Company’s investments classified as Level 1 are based on quoted prices that are available in active markets.
−Removed: The Company’s investments classified as Level 2 are valued using observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes, or alternative pricing sources with reasonable levels of price transparency.
Veeco Instruments Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Continued)
+Added: The Company’s investments classified as Level 1 are based on quoted prices that are available in active markets, as well as certificates of deposits and time deposits that are classified as Level 1 due to their short-term nature.
+Added: The Company’s investments classified as Level 2 are valued using observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes, or alternative pricing sources with reasonable levels of price transparency.
Note 4 — Investments
2 unchanged sentences
December 31, 2020
−Removed: Government agency securities
Corporate debt
1 unchanged sentence
December 31, 2019
+Added: Government agency securities
Corporate debt
12 unchanged sentences
(“Kateeva”), over which Veeco does not exert significant influence.
−Removed: The carrying value of the investment was $ 21.0 million at December 31, 2018.
−Removed: Additionally, during the year ended December 31, 2018, the Company made a separate non-marketable investment of $ 3.5 million in another entity.
+Added: Additionally, the Company has a separate, non-marketable investment in another entity, with a carrying value of $ 3.0 million at December 31, 2020.
The Company does not exert significant influence over this investment and its ownership interest is also less than 20 %.
−Removed: Neither equity investment has a readily observable market price, and therefore the Company has elected to measure these investments at cost, adjusted for changes in observable market prices minus impairment.
−Removed: The investments are included in “Other assets” on the Consolidated Balance Sheets.
−Removed: There were no changes in observable market prices for either investment for the year ended December 31, 2019.
−Removed: These investments are subject to periodic impairment reviews which require judgment.
−Removed: The analyses include assessments of the
+Added: Neither equity investment has a readily
Veeco Instruments Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Continued)
−Removed: companies’ financial condition, the business outlooks for their products and technologies, their projected results and cash flows, business valuation indications from recent rounds of financing, the likelihood of obtaining subsequent rounds of financing, and the impact of equity preferences held by Veeco relative to other investors.
+Added: observable market price, and therefore the Company has elected to measure these investments at cost, adjusted for changes in observable market prices minus impairment.
+Added: The investments are included in “Other assets” on the Consolidated Balance Sheets.
+Added: These investments are subject to periodic impairment reviews which require judgment.
+Added: The analyses include assessments of the companies’ financial condition, the business outlooks for their products and technologies, their projected results and cash flows, business valuation indications from recent rounds of financing, the likelihood of obtaining subsequent rounds of financing, and the impact of equity preferences held by Veeco relative to other investors.
During the quarter ended December 31, 2019, the Company identified impairment indicators on the Company’s investment in Kateeva, and as a result of a valuation analysis, concluded that its investment in Kateeva is fully impaired, and recorded a non-cash impairment charge of $ 21.0 million, included in “Other income (expense), net” in the Consolidated Statements of Operations.
There were no impairment charges recorded for either investment for the years ended December 31, 2020 or 2018.
−Removed: Note 5 — Acquisitions and Dispositions
−Removed: Ultratech acquisition
−Removed: On May 26, 2017, the Company completed its acquisition of Ultratech, Inc.
−Removed: (“Ultratech”).
−Removed: Ultratech develops, manufactures, sells, and supports lithography, laser annealing, and inspection equipment for manufacturers of semiconductor devices, including front-end semiconductor manufacturing and advanced packaging.
−Removed: Ultratech also develops, manufactures, sells, and supports ALD equipment for scientific and industrial applications.
−Removed: Ultratech’s customers are primarily located throughout the United States, Europe, China, Japan, Taiwan, Singapore, and Korea.
−Removed: The results of Ultratech’s operations have been included in the consolidated financial statements since the date of acquisition.
−Removed: Ultratech shareholders received (i) $ 21.75 per share in cash and (ii) 0.2675 of a share of Veeco common stock for each Ultratech common share outstanding on the acquisition date.
−Removed: The acquisition date fair value of the consideration totaled $ 633.4 million, net of cash acquired, which consisted of the following:
−Removed: Acquisition Date
−Removed: (May 26, 2017)
−Removed: (in thousands)
−Removed: Cash consideration, net of cash acquired of $ 229.4 million
−Removed: Equity consideration ( 7.2 million shares issued)
−Removed: Replacement equity awards attributable to pre-acquisition service
−Removed: Acquisition date fair value
−Removed: Veeco Instruments Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Continued)
−Removed: The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date:
−Removed: Acquisition Date
−Removed: (May 26, 2017)
−Removed: (in thousands)
−Removed: Short-term investments
−Removed: Accounts receivable
−Removed: Deferred cost of sales
−Removed: Prepaid expense and other current assets
−Removed: Property, plant, and equipment
−Removed: Intangible assets
−Removed: Total identifiable assets acquired
−Removed: Accounts payable
−Removed: Accrued expenses and other current liabilities
−Removed: Customer deposits and deferred revenue
−Removed: Deferred income taxes
−Removed: Other liabilities
−Removed: Total liabilities assumed
−Removed: Net identifiable assets acquired
−Removed: Net assets acquired
−Removed: The gross contractual value of the acquired accounts receivable was approximately $ 46.0 million.
−Removed: The fair value of the accounts receivables is the amount expected to be collected by the Company.
−Removed: Goodwill generated from the acquisition is primarily attributable to expected synergies from future growth and strategic advantages provided through the expansion of product offerings as well as assembled workforce and is not expected to be deductible for income tax purposes.
−Removed: The classes of intangible assets acquired and the estimated useful life of each class is presented in the table below:
−Removed: Acquisition Date
−Removed: (May 26, 2017)
−Removed: (in thousands)
−Removed: Customer relationships
−Removed: In-process research and development
−Removed: Trademark and tradenames
−Removed: Intangible assets acquired
−Removed: In-process research and development will be amortized (or impaired) upon completion (or abandonment) of the development project.
−Removed: The Company determined the estimated fair value of the identifiable intangible assets based on various factors including:
−Removed: cost, discounted cash flow, income method, loss-of-revenue/income method, and relief-from-royalty method in determining the purchase price allocation.
−Removed: Veeco Instruments Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Continued)
−Removed: In-process research and development (“IPR&D”) represents the estimated fair values of incomplete Ultratech research and development projects that had not reached the commercialization stage and met the criteria for recognition as IPR&D as of the date of the acquisition.
−Removed: The fair value of IPR&D was determined using an income approach and costs to complete the project and expected commercialization timelines are considered key assumptions.
−Removed: This valuation approach reflected the present value of the projected cash flows that were expected to be generated by the IPR&D less charges representing the contribution of other assets to those cash flows.
−Removed: The value of the IPR&D was determined to be $ 43.3 million, approximately half of which was related to Ultratech’s lithography technologies and one -third of which was related to Ultratech’s laser annealing technologies.
−Removed: During the second quarter of 2018, the Company lowered its projected results for the Ultratech asset group and determined that the revised projections were significantly lower than projected results at the time of the acquisition and that these revised projections required the Company to assess the Ultratech asset group for impairment.
−Removed: See Note 6, “Goodwill and Intangible Assets,” for additional information.
−Removed: For the year ended December 31, 2018 and 2017, acquisition related costs were approximately $ 3.0 million and $ 17.8 million, respectively, including non-cash charges of $ 4.2 million related to accelerated share-based compensation for employee terminations for the year ended December 31, 2017.
−Removed: The amounts of net sales and income (loss) from operations before income taxes of Ultratech included in the Company’s Consolidated Statement of Operations for the year ended December 31, 2017 are as follows:
−Removed: December 31, 2017
+Added: Note 5 — Inventories
+Added: Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis.
+Added: Inventories consist of the following:
(in thousands)
−Removed: Loss before income taxes
−Removed: Loss before income taxes of Ultratech for the year ended December 31, 2017 of $ 62.3 million includes acquisition costs of $ 17.8 million, release of inventory fair value step-up related to purchase accounting of $ 9.6 million, amortization expense on intangible assets of $ 23.9 million, and restructuring charges of $ 3.3 million.
−Removed: The following table presents unaudited pro forma financial information for the year ended December 31, 2017, as if the acquisition of Ultratech had occurred on January 1, 2016:
−Removed: Year ended December 31, 2017
−Removed: (in thousands, except per share amounts)
−Removed: Loss before income taxes
−Removed: Diluted earnings per share
−Removed: The pro-forma results were calculated by combining the audited results of the Company with the stand-alone unaudited results of Ultratech for the pre-acquisition period, and adjusting for the following:
−Removed: (i) Additional amortization expense related to identified intangible assets valued as part of the purchase price allocation that would have been incurred starting on January 1, 2016.
−Removed: (ii) Additional depreciation expense for the property, plant, and equipment fair value adjustments that would have been incurred starting on January 1, 2016.
−Removed: (iii) All acquisition related costs incurred by the Company as well as by Ultratech pre-acquisition have been removed from the year ended December 31, 2017 and included in the year ended December 31, 2016, as such expenses would have been incurred in the first quarter following the acquisition.
−Removed: Veeco Instruments Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Continued)
−Removed: (iv) All amortization of inventory step-up has been removed from the year ended December 31, 2017 and recorded in the year ended December 31, 2016, as such costs would have been incurred as the corresponding inventory was sold.
−Removed: (v) Additional interest expense related to the Convertible Senior Notes (see Note 12, “Debt”) as if they had been issued on January 1, 2016.
−Removed: (vi) Income tax expense (benefit) was adjusted for the impact of the above adjustments for each period.
−Removed: (vii) All shares issued in connection with the acquisition were considered outstanding as of January 1, 2016 for purposes of calculating diluted earnings per share.
−Removed: As of December 31, 2019, the Company determined that one of its non-core product lines (the “disposal group”) met the held for sale criteria, and as such, the related assets are presented as “Assets held for sale” on the Consolidated Balance Sheets.
−Removed: Long-lived assets and definite-lived intangible assets are not depreciated or amortized while classified as held for sale.
−Removed: The potential sale of this disposal group does not represent a strategic shift that will have a material effect on the Company’s operations and financial results, nor is it considered a component of the Company, and as such it did not meet the criteria to be reported as discontinued operations.
−Removed: For the year ended December 31, 2019, the Company recorded a non-cash impairment charge on these assets held for sale of $ 4.0 million, included in “Asset impairment” in the Consolidated Statements of Operations, in order to measure the disposal group at the lower of its carrying value or fair value less costs to sell as of December 31, 2019, which resulted in a corresponding held for sale valuation allowance on its assets held for sale in the Consolidated Balance Sheet.
−Removed: The major classes of assets that were classified as held for sale as of December 31, 2019 are as follows:
−Removed: December 31, 2019
+Added: Work-in-process
+Added: Finished goods
+Added: Note 6 — Property, Plant, and Equipment
+Added: Property, plant, and equipment, net, consist of the following:
+Added: Average Useful Life
(in thousands)
−Removed: Assets held for sale:
−Removed: Property, plant, and equipment, net
−Removed: Intangible assets, net
−Removed: Total Assets held for sale
+Added: Building and improvements
+Added: 10 – 40 years
+Added: Machinery and equipment (1)
+Added: Leasehold improvements
+Added: Gross property, plant, and equipment
+Added: accumulated depreciation and amortization
+Added: Net property, plant, and equipment
+Added: (1) Machinery and equipment also includes software, furniture, and fixtures
+Added: Depreciation expense was $ 15.4 million, $ 17.3 million, and $ 17.6 million for the years ended December 31, 2020, 2019, and 2018, respectively.
+Added: During the year ended December 31, 2019, the Company classified vacant land in St.
+Added: Paul, Minnesota as held for sale, and subsequently sold the land for approximately $ 0.6 million, which approximated its carrying value.
Veeco Instruments Inc.
7 unchanged sentences
Balance at December 31, 2018
−Removed: Balance at December 31, 2018
Allocated to Assets held for sale
−Removed: Balance at December 31, 2019
+Added: Balance at December 31, 2019 and 2020
The Company performs its annual goodwill impairment test at the beginning of the fourth quarter each year.
11 unchanged sentences
Customer relationships
−Removed: In-process R&D
Trademarks and tradenames
Other intangible assets primarily consist of patents, licenses, and backlog.
−Removed: During the second quarter of 2018, the Company lowered its projected results for the Ultratech asset group, which were significantly below the projected results at the time of the acquisition.
−Removed: The reduced projections were based on lower than expected unit volume of certain smartphones, which incorporate advanced packaging methods such as fan-out wafer
+Added: During the second quarter of 2018, the Company lowered its projected results for the Ultratech asset group.
+Added: The reduced projections were based on lower than expected unit volume of certain smartphones, which incorporate advanced packaging methods such as fan-out wafer level packaging (“FOWLP”), and a delay in the adoption of FOWLP advanced packaging by other electronics manufacturers, both of which slowed orders and reduced revenue projections for the Company’s advanced packaging lithography systems.
+Added: In addition, there had been a delay in the build out of 28nm facilities by companies in China who were expected to purchase the Company’s laser spike anneal systems.
Veeco Instruments Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Continued)
−Removed: level packaging (“FOWLP”), and a delay in the adoption of FOWLP advanced packaging by other electronics manufacturers, both of which slowed orders and reduced revenue projections for the Company’s advanced packaging lithography systems.
−Removed: In addition, there has been a delay in the build out of 28nm facilities by companies in China who were expected to purchase the Company’s Laser Spike Anneal systems.
−Removed: Taken together, the reduced projections identified during the second quarter of 2018 required the Company to assess the Ultratech asset group for impairment.
+Added: together, the reduced projections identified during the second quarter of 2018 required the Company to assess the Ultratech asset group for impairment.
As a result of the analysis, which included projected cash flows that required the use of unobservable inputs, the Company recorded non-cash impairment charges of $ 216.4 million and $ 35.9 million related to definite-lived intangible assets and in-process research and development assets, respectively, during the second quarter of 2018.
3 unchanged sentences
(in thousands)
−Removed: Note 7 — Inventories
−Removed: Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis.
−Removed: Inventories consist of the following:
−Removed: (in thousands)
−Removed: Work-in-process
−Removed: Finished goods
−Removed: Veeco Instruments Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Continued)
−Removed: Note 8 — Property, Plant, and Equipment
−Removed: Property and equipment, net, consist of the following:
−Removed: Average Useful Life
−Removed: (in thousands)
−Removed: Building and improvements
−Removed: 10 – 40 years
−Removed: Machinery and equipment (1)
−Removed: Leasehold improvements
−Removed: Gross property, plant, and equipment
−Removed: accumulated depreciation and amortization
−Removed: Net property, plant, and equipment
−Removed: (1) Machinery and equipment also includes software, furniture, and fixtures
−Removed: Depreciation expense was $ 17.3 million, $ 17.6 million, and $ 14.6 million for the years ended December 31, 2019, 2018, and 2017, respectively.
−Removed: During the year ended December 31, 2019, the Company classified vacant land in St.
−Removed: Paul, Minnesota as held for sale, and subsequently sold the land for approximately $ 0.6 million, which approximated its carrying value.
Note 8 — Accrued Expenses and Other Liabilities
21 unchanged sentences
Other liabilities
−Removed: As part of the acquisition of Ultratech, the Company assumed an executive non-qualified deferred compensation plan that allowed qualifying executives to defer cash compensation.
+Added: As part of a prior acquisition, the Company assumed an executive non-qualified deferred compensation plan that allowed qualifying executives to defer cash compensation.
The plan was frozen at the time of acquisition and no further contributions have been made.
At December 31, 2020 and 2019, plan assets approximated $ 2.4 million and $ 2.7 million, respectively, representing the cash surrender value of life insurance policies and is included within “Other assets” in the Consolidated Balance Sheets, while plan liabilities approximated $ 2.5 million and $ 3.1 million, respectively and is included within “Other liabilities” in the Consolidated Balance Sheets.
−Removed: Other liabilities also included asset retirement obligations of $ 3.2 million and income tax payables of $ 1.0 million at both December 31, 2019 and 2018, and medical and dental benefits for former executives of $ 2.0 million and $ 2.2 million at December 31, 2019 and 2018, respectively.
+Added: At December 31, 2020 and 2019, other liabilities also included (i) asset retirement obligations of $ 2.7 million and $ 3.2 million, respectively;
+Added: (ii) income tax payables of $ 1.4 million and $ 1.0 million, respectively;
+Added: and (iii) medical and dental benefits for former executives of $ 1.9 million and $ 2.0 million, respectively.
+Added: Additionally, as a result of the Coronavirus, Aid, Relief, and Economic Security Act, the Company has accrued for and deferred the deposit and payment of its share of social security taxes, resulting in a liability of $ 3.6 million at December 31, 2020, of which $ 1.8 million is included within “Accrued expenses and other current liabilities”, and $ 1.8 million is included within “Other liabilities” in the Consolidated Balance Sheets.
Note 9 — Restructuring Charges
1 unchanged sentence
As a result of this and other cost saving initiatives, the Company announced headcount reductions of approximately 40 employees.
−Removed: During the year ended December 31, 2019, additional accruals were recognized and payments were made related to these restructuring initiatives.
−Removed: The Company continued to record restructuring charges during the year ended December 31, 2019 as a result of its efforts to further streamline operations, enhance efficiencies, and reduce costs.
In the second half of 2019, the Company executed an initiative to reorganize various functions along product lines and created a central research and development organization to better allocate its resources to the Company’s highest priority projects.
1 unchanged sentence
Collectively, these actions impacted approximately 60 employees.
+Added: During the year ended December 31, 2020, additional accruals were recognized and payments were made related to these restructuring initiatives, which are largely completed at December 31, 2020.
+Added: Veeco Instruments Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Continued)
The following table shows the amounts incurred and paid for restructuring activities during the years ended December 31, 2020, 2019, and 2018 and the remaining accrued balance of restructuring costs at December 31, 2020, which is included in “Accrued expenses and other current liabilities” in the Consolidated Balance Sheets:
7 unchanged sentences
Balance - December 31, 2020
−Removed: Veeco Instruments Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Continued)
−Removed: Restructuring expense for the years ended December 31, 2019, 2018, and 2017 included non-cash charges of $ 0.4 million, $ 1.2 million, and $ 1.9 million, respectively, which are excluded from the table above, related to accelerated share-based compensation for employee terminations.
+Added: Restructuring expense for the years ended December 31, 2019 and 2018 included non-cash charges of $ 0.4 million and $ 1.2 million, respectively, which are excluded from the table above, related to accelerated share-based compensation for employee terminations.
Note 10 — Commitments and Contingencies
3 unchanged sentences
Warranties issued
−Removed: Addition from Ultratech acquisition
Consumption of reserves
5 unchanged sentences
The weighted average remaining lease term of the Company’s operating leases as of December 31, 2020 was 3 years , and the weighted average discount rate used in determining the present value of future lease payments was 6.1 % .
+Added: Veeco Instruments Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Continued)
The following table provides the maturities of lease liabilities at December 31, 2020:
4 unchanged sentences
Reported as of December 31, 2020
−Removed: Other current liabilities
−Removed: Operating lease liabilities
−Removed: Veeco Instruments Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Continued)
−Removed: Minimum lease commitments at December 31, 2018 for property and equipment under operating lease agreements (exclusive of renewal options) were as follows:
−Removed: (in thousands)
−Removed: Payments due by period:
−Removed: Operating lease cost for the year ended December 31, 2019 was $ 5.5 million.
−Removed: Variable lease cost for the year ended December 31, 2019 was $ 1.7 million.
+Added: Accrued expenses and other current liabilities
+Added: Operating lease long-term liabilities
+Added: Operating lease cost for the years ended December 31, 2020 and 2019 was $ 5.4 million and $ 5.5 million, respectively.
+Added: Variable lease cost for both years ended December 31, 2020 and 2019 was $ 1.7 million.
Additionally, the Company has an immaterial amount of short-term leases.
1 unchanged sentence
In addition, the Company is obligated under such leases for certain other expenses, including real estate taxes and insurance.
+Added: Operating cash outflows from operating leases for the year ended December 31, 2020, 2019, and 2018 were $ 6.9 million, $ 7.2 million, and $ 6.3 million, respectively.
Legal Proceedings
11 unchanged sentences
Veeco is defending this matter vigorously.
+Added: Veeco Instruments Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Continued)
The Company is involved in various other legal proceedings arising in the normal course of business.
2 unchanged sentences
The Company depends on purchases from its ten largest customers, which accounted for 62 % and 67 % of net accounts receivable at December 31, 2020 and 2019, respectively.
−Removed: Veeco Instruments Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Continued)
Customers who accounted for more than 10% of net accounts receivable or net sales are as follows:
9 unchanged sentences
In some geographies, receivables may be payable up to 150 days from the date of the invoice.
+Added: Receivable Purchase Agreement
+Added: In December 2020, the Company entered into a receivable purchase agreement with a financial institution to sell certain of its trade receivables from customers without recourse, up to $ 15.0 million at any point in time.
+Added: Pursuant to this agreement, the Company sold $ 11.6 million of receivables during the year ended December 31, 2020, of which approximately $ 5.9 million remained outstanding at December 31, 2020, and therefore $ 9.1 million is available under the agreement for additional sales of receivables as of December 31, 2020.
+Added: The net sale of accounts receivable under the agreement is reflected as a reduction of accounts receivable in the Company’s Consolidated Balance Sheet at the time of sale and any fees for the sale of trade receivables were not material for the periods presented.
The Company outsources certain functions to third parties, including the manufacture of several of its systems.
3 unchanged sentences
The Company had deposits with its suppliers of $ 7.2 million and $ 5.9 million at December 31, 2020 and 2019, respectively, that were included in “Prepaid expenses and other current assets” on the Consolidated Balance Sheets.
+Added: Veeco Instruments Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Continued)
Purchase Commitments
6 unchanged sentences
Convertible Senior Notes
−Removed: On January 10, 2017, the Company issued $ 345.0 million of 2.70 % convertible senior unsecured notes (the “Convertible Senior Notes”).
+Added: On January 10, 2017, the Company issued $ 345.0 million of 2.70 % convertible senior unsecured notes due 2023 (the “2023 Notes”).
The Company received net proceeds, after deducting underwriting discounts and fees and expenses payable by the Company, of approximately $ 335.8 million.
−Removed: The Convertible Senior Notes bear interest at a rate of 2.70 % per year, payable semiannually in arrears on January 15 and July 15 of each year, commencing on July 15, 2017.
+Added: The 2023 Notes bear interest at a rate of 2.70 % per year, payable semiannually in arrears on January 15 and July 15 of each year, commencing on July 15, 2017.
+Added: The 2023 Notes mature on January 15, 2023, unless earlier purchased by the Company, redeemed, or converted.
+Added: On May 18, 2020, in connection with the completion of a private offering of $ 125.0 million aggregate principal amount of 3.75 % convertible senior notes due 2027 described below, the Company repurchased and retired approximately $ 88.3 million in aggregate principal amount of its outstanding 2023 Notes, with a carrying amount of $ 78.1 million, for approximately $ 81.2 million of cash.
+Added: The Company accounted for the partial settlement of the 2023 Notes as an extinguishment, and as such, recorded a loss on extinguishment of approximately $ 3.0 million for the year ended December 31, 2020, which is included in “Other income (expense), net” in the Consolidated Statements of Operations, as well as a reduction of additional paid-in capital of $ 0.1 million for the repurchase of the conversion feature.
+Added: Additionally, on November 11, 2020, the Company entered into a privately negotiated exchange agreement with a holder of its outstanding 2023 Notes, under which the Company agreed to retire $ 125.0 million in aggregate original principal amount of the 2023 Notes, with a carrying amount of $ 113.1 million, in exchange for the issuance of $ 132.5 million in aggregate principal amount of new 3.50 % convertible senior notes due 2025 described below, which had a fair value that approximated the principal amount of notes issued.
+Added: The Company accounted for the partial settlement of the 2023 Notes as an extinguishment, and as such, recorded a loss on extinguishment of approximately $ 4.8 million for the year ended December 31, 2020, which is included in “Other income (expense), net” in the Consolidated Statements of Operations, as well as a reduction of additional paid-in capital of $ 14.6 million for the exchange of the conversion feature.
+Added: On November 17, 2020, as part of the privately negotiated exchange agreement described above, the Company issued $ 132.5 million of 3.50 % convertible senior notes due 2025 (the “2025 Notes”).
+Added: The 2025 Notes bear interest at a rate of 3.50 % per year, payable semiannually in arrears on January 15 and July 15 of each year, commencing on July 15, 2021.
+Added: The 2025 Notes mature on January 15, 2025, unless earlier purchased by the Company, redeemed, or converted.
Veeco Instruments Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Continued)
−Removed: Convertible Senior Notes mature on January 15, 2023 (the “Maturity Date”), unless earlier purchased by the Company, redeemed, or converted.
−Removed: The Convertible Senior Notes are unsecured obligations of Veeco and rank senior in right of payment to any of Veeco’s subordinated indebtedness;
+Added: On May 18, 2020, the Company completed a private offering of $ 125.0 million of 3.75 % convertible senior notes due 2027 (the “2027 Notes”).
+Added: The Company received net proceeds of approximately $ 121.9 million, after deducting underwriting discounts and fees and expenses payable by the Company.
+Added: Additionally, the Company used approximately $ 10.3 million of cash to purchase capped calls, discussed below.
+Added: The 2027 Notes bear interest at a rate of 3.75 % per year, payable semiannually in arrears on June 1 and December 1 of each year, commencing on December 1, 2020.
+Added: The 2027 Notes mature on June 1, 2027, unless earlier purchased by the Company, redeemed, or converted.
+Added: The 2023 Notes, 2025 Notes, and 2027 Notes (collectively, the “Notes”) are unsecured obligations of Veeco and rank senior in right of payment to any of Veeco’s subordinated indebtedness;
equal in right of payment to all of Veeco’s unsecured indebtedness that is not subordinated;
1 unchanged sentence
and structurally subordinated to all indebtedness and other liabilities (including trade payables) of Veeco’s subsidiaries.
−Removed: The Convertible Senior Notes are convertible into cash, shares of the Company’s common stock, or a combination thereof, at the Company’s election, upon the satisfaction of specified conditions and during certain periods as described below.
−Removed: The initial conversion rate is 24.9800 shares of the Company’s common stock per $1,000 principal amount of Convertible Senior Notes, representing an initial effective conversion price of $ 40.03 per share of common stock.
−Removed: The conversion rate may be subject to adjustment upon the occurrence of certain specified events as provided in the indenture governing the Convertible Senior Notes, dated January 18, 2017 between the Company and U.S.
−Removed: Bank National Association, as trustee, but will not be adjusted for accrued but unpaid interest.
−Removed: Holders may convert all or any portion of their notes, in multiples of one thousand dollar principal amount, at their option at any time prior to the close of business on the business day immediately preceding October 15, 2022 only under the following circumstances:
+Added: The Notes are convertible into cash, shares of the Company’s common stock, or a combination thereof, at the Company’s election, upon the satisfaction of specified conditions and during certain periods as described below.
+Added: The initial conversion rates are 24.9800 , 41.6667 , and 71.5372 shares of the Company’s common stock per $1,000 principal amount of the 2023 Notes, 2025 Notes, and 2027 Notes, respectively, representing initial effective conversion prices of $ 40.03 , $ 24.00 , and $ 13.98 per share of common stock, respectively.
+Added: The conversion rates may be subject to adjustment upon the occurrence of certain specified events.
+Added: Holders may convert all or any portion of their notes, in multiples of one thousand dollar principal amount, at their option at any time prior to the close of business on the business day immediately preceding October 15, 2022 with respect to the 2023 Notes, October 15, 2024 with respect to the 2025 Notes, and October 1, 2027 with respect to the 2027 Notes, only under the following circumstances:
(i) During any calendar quarter (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day;
−Removed: (ii) During the five consecutive business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per one thousand dollar principal amount of Convertible Senior Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of Veeco’s common stock and the conversion rate on each such trading day;
−Removed: (iii) If the Company calls any or all of the Convertible Senior Notes for redemption at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date;
+Added: (ii) During the five consecutive business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per one thousand dollar principal amount of Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of Veeco’s common stock and the conversion rate on each such trading day;
+Added: (iii) If the Company calls any or all of applicable series of the Notes for redemption at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date;
(iv) Upon the occurrence of specified corporate events.
−Removed: On or after October 15, 2022, until the close of business on the business day immediately preceding the Maturity Date, holders may convert their notes at any time, regardless of the foregoing circumstances.
+Added: Holders may convert their notes at any time, regardless of the foregoing circumstances, on or after October 15, 2022 with respect to the 2023 Notes, October 15, 2024 with respect to the 2025 Notes, and October 1, 2026 with respect to the 2027 Notes, until the close of business on the business day immediately preceding the respective maturity date.
Upon conversion by the holders, the Company may elect to settle such conversion in shares of its common stock, cash, or a combination thereof.
−Removed: As a result of its cash conversion option, the Company segregated the liability component of the instrument from the equity component.
−Removed: The liability component was measured by estimating the fair value of a non-convertible debt instrument that is similar in its terms to the Convertible Senior Notes.
−Removed: The calculation of the fair value of the debt component required the use of Level 3 inputs, including utilization of convertible investors’ credit assumptions and high yield bond indices.
−Removed: Fair value was estimated through discounting future interest and principal payments, an income approach, due under the Convertible Senior Notes at a discount rate of 7.00 % , an interest rate equal to the estimated borrowing rate for similar non-convertible debt.
−Removed: The excess of the aggregate face value of the Convertible Senior Notes over the estimated fair value of the liability component of $ 72.5 million was recognized as a debt discount and recorded as an increase to additional paid-in capital and will be amortized over the expected life of the
+Added: As a result of its cash conversion options, the Company segregated the liability component of the instruments from the equity components.
+Added: The liability components were measured by estimating the fair value of a non-convertible debt instrument that is similar in its terms to the Notes.
+Added: The calculation of the fair value of the debt components required the use of Level 3 inputs, including utilization of convertible investors’ credit assumptions and
Veeco Instruments Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Continued)
−Removed: Convertible Senior Notes using the effective interest rate method.
−Removed: Amortization of the debt discount is recognized as non-cash interest expense.
−Removed: The transaction costs of $ 9.2 million incurred in connection with the issuance of the Convertible Senior Notes were allocated to the liability and equity components based on their relative values.
−Removed: Transaction costs allocated to the liability component are being amortized using the effective interest rate method and recognized as non-cash interest expense over the expected term of the Convertible Senior Notes.
−Removed: Transaction costs allocated to the equity component of $ 1.9 million reduced the value of the equity component recognized in stockholders' equity.
−Removed: The carrying value of the Convertible Senior Notes is as follows:
+Added: high yield bond indices.
+Added: Fair value was estimated through discounting future interest and principal payments, an income approach, due under the Notes at a discount rate equal to the estimated borrowing rate for similar non-convertible debt, or 7.0 % , 8.0 % , and 9.1 % with respect to the 2023 Notes, 2025 Notes, and 2027 Notes, respectively.
+Added: The excess of the aggregate face values of the Notes over the estimated fair values of the liability components of $ 72.5 million, $ 21.0 million, and $ 34.2 million with respect to the 2023 Notes, 2025 Notes, and 2027 Notes, respectively, were recognized as debt discounts and recorded as an increase to additional paid-in capital and will be amortized over the expected lives of the Notes using the effective interest rate method.
+Added: Amortization of the debt discounts are recognized as non-cash interest expense.
+Added: The transaction costs of $ 9.2 million, $ 1.9 million, and $ 3.1 million incurred in connection with the issuance of the 2023 Notes, 2025 Notes, and 2027 Notes, respectively, were allocated to the liability and equity components based on their relative values.
+Added: Transaction costs allocated to the liability component are being amortized using the effective interest rate method and recognized as non-cash interest expense over the expected terms of the Notes.
+Added: Transaction costs allocated to the equity component of $ 1.9 million, $ 0.3 million, and $ 0.8 million with respect to the 2023 Notes, 2025 Notes, and 2027 Notes, respectively, reduced the value of the equity components recognized in stockholders' equity.
+Added: In connection with the offering of the 2027 Notes, on May 13, 2020, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”), pursuant to capped call confirmations, covering the total principal amount of the 2027 Notes for an aggregate premium of $ 10.3 million.
+Added: The Capped Call Transactions are expected generally to reduce the potential dilution to the Company’s common stock upon any conversion of the 2027 Notes and/or offset any cash payments the Company is required to make in excess of the aggregate principal amount of converted 2027 Notes, as the case may be, with such reduction and/or offset subject to a cap based on the capped price of the Capped Call Transactions.
+Added: The Capped Call Transactions exercise price is equal to the initial conversion price of the 2027 Notes, and the capped price of the Capped Call Transactions is approximately $ 18.46 per share and is subject to certain adjustments under the terms of the capped call confirmations.
+Added: The Capped Call Transactions are separate transactions entered into by the Company with the capped call counterparties, are not part of the terms of the 2027 Notes and do not change the holders’ rights under the 2027 Notes.
+Added: Holders of the 2027 Notes do not have any rights with respect to the Capped Call Transactions.
+Added: The cost of the Capped Call Transactions is not expected to be tax-deductible as the Company did not elect to integrate the Capped Call Transactions into the 2027 Notes for tax purposes.
+Added: The Company used a portion of the net proceeds from the offering of the 2027 Notes to pay for the Capped Call Transactions, and the cost of the Capped Call Transactions was recorded as a reduction of the Company’s additional paid-in capital in the accompanying consolidated financial statements.
+Added: The carrying values of the Notes are as follows:
+Added: December 31, 2020
+Added: December 31, 2019
(in thousands)
Principal amount
−Removed: Unamortized debt discount
−Removed: Unamortized transaction costs
+Added: Unamortized debt discount/transaction costs
Net carrying value
−Removed: Total interest expense related to the Convertible Senior Notes is as follows:
+Added: Veeco Instruments Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Continued)
+Added: Total interest expense related to the Notes is as follows:
For the year ended December 31,
1 unchanged sentence
Cash Interest Expense
−Removed: Coupon interest expense
+Added: Coupon interest expense - 2023 Notes
+Added: Coupon interest expense - 2025 Notes
+Added: Coupon interest expense - 2027 Notes
Non-cash Interest Expense
−Removed: Amortization of debt discount
−Removed: Amortization of transaction costs
+Added: Amortization of debt discount/transaction costs- 2023 Notes
+Added: Amortization of debt discount/transaction costs- 2025 Notes
+Added: Amortization of debt discount/transaction costs- 2027 Notes
Total Interest Expense
−Removed: The Company determined the Convertible Senior Notes is a Level 2 liability in the fair value hierarchy and estimated its fair value as $ 330.3 million at December 31, 2019.
+Added: The Company determined the Notes are Level 2 liabilities in the fair value hierarchy and estimated their fair values as $ 125.4 million, $ 140.2 million, and $ 180.9 million at December 31, 2020 for the 2023 Notes, 2025 Notes, and 2027 Notes, respectively.
Note 12 — Derivative Financial Instruments
1 unchanged sentence
Changes in currency exchange rates could affect the Company’s foreign currency denominated monetary assets and liabilities and forecasted cash flows.
−Removed: The Company entered into monthly forward derivative contracts with the intent of mitigating a portion of this risk.
+Added: The Company sometimes enters into monthly forward derivative contracts with the intent of mitigating a portion of this risk.
The Company only used derivative financial instruments in the context of hedging and not for speculative purposes and had not designated its foreign exchange derivatives as hedges.
2 unchanged sentences
The Company did not have any outstanding derivative contracts at December 31, 2020 and 2019.
−Removed: The following table shows the gains and (losses) from currency exchange derivatives during the years ended December 31, 2018 and 2017, which are included in “Other operating expense (income), net” in the Consolidated Statements of Operations as well as the weighted average notional amount of derivatives outstanding for each period:
−Removed: Veeco Instruments Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Continued)
+Added: The following table shows the gains and (losses) from currency exchange derivatives during the year ended December 31, 2018, which is included in “Other operating expense (income), net” in the Consolidated Statement of Operations as well as the weighted average notional amount of derivatives outstanding:
Year ended December 31,
1 unchanged sentence
Weighted average notional amount
−Removed: Gains (losses)
−Removed: Weighted average notional amount
(in thousands)
Foreign currency exchange forwards
+Added: Veeco Instruments Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Continued)
Note 13 — Stockholders’ Equity
15 unchanged sentences
Treasury Stock
−Removed: The share repurchase program authorized by the Company’s Board of Directors in October 2015 expired on October 28, 2017.
−Removed: On December 11, 2017, the Company’s Board of Directors authorized a new program to repurchase up to $ 100 million of the Company’s common stock to be completed through December 11, 2019.
+Added: On December 11, 2017, the Company’s Board of Directors authorized a program to repurchase up to $ 100 million of the Company’s common stock to be completed through December 11, 2019.
At the end of the program, $ 14.3 million of the $ 100 million had been utilized.
2 unchanged sentences
If the Company reissues treasury stock at an amount below its acquisition cost and if additional paid-in capital associated with prior treasury stock transactions is insufficient to cover the difference between the acquisition cost and the reissue price, this difference is charged to accumulated deficit.
−Removed: Veeco Instruments Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Continued)
Note 14 — Stock Plans
2 unchanged sentences
This Plan was subsequently amended, as approved by shareholders, in 2013, 2016, and 2019 (at which time the Plan was renamed the 2019 Stock Incentive Plan (as amended to date, the “2019 Plan”).
−Removed: The Company’s employees, non-employee directors, and consultants are eligible to receive awards under the 2019 Plan, which can include non-qualified stock options, incentive stock options, restricted share awards (“RSAs”), restricted share units (“RSUs”), performance share awards (“PSAs”), performance share units (“PSUs”), share appreciation rights, dividend equivalent rights, or any combination thereof.
+Added: The Company’s employees, non-employee directors, and consultants are eligible to receive awards under the 2019 Plan, which can include non-qualified stock options, incentive stock options, RSAs, RSUs, PSAs, PSUs, share appreciation rights,
+Added: Veeco Instruments Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Continued)
+Added: dividend equivalent rights, or any combination thereof.
The Company settles awards under the Plans with newly issued shares or with shares held in treasury.
10 unchanged sentences
At December 31, 2020, there are 0.7 million option shares and 0.8 million RSUs and PSUs outstanding under the 2019 Plan.
−Removed: During 2016, the Company’s Board of Directors approved the 2016 Employee Stock Purchase Plan (“ESPP”).
−Removed: The Company is authorized to issue up to 1.5 million shares under the ESPP, including additional shares authorized under a plan amendment approved by shareholders in 2019.
+Added: The Company is authorized to issue up to 1.5 million shares under the approved 2016 employee stock purchase plan (“ESPP”), including additional shares authorized under a plan amendment approved by shareholders in 2019.
Under the ESPP, substantially all employees in the U.S.
1 unchanged sentence
The ESPP was approved by the Company’s shareholders.
−Removed: During 2017, in connection with the acquisition of Ultratech, the Company assumed certain restricted stock units (the “Assumed RSUs”) available and outstanding under the Ultratech, Inc.
−Removed: 1993 Stock Option/Stock Issuance Plan, as amended (the “Ultratech Plan”).
−Removed: The Assumed RSUs remain subject to the terms set forth in the award agreement governing the award and the Ultratech Plan, except that the Assumed RSUs relate to shares of Company common stock and the number of restricted stock units was adjusted pursuant to the terms of the acquisition to reflect the difference in the value of a share of Company common stock and a share of Ultratech common stock prior to closing the acquisition.
+Added: During 2017, in connection with an acquisition, the Company assumed certain restricted stock units (the “Assumed RSUs”) available and outstanding under the assumed plan (the “Assumed Plan”).
+Added: The Assumed RSUs remain subject to the terms set forth in the award agreement governing the award and the Assumed Plan, except that the Assumed RSUs relate to shares of Company common stock and the number of restricted stock units was adjusted pursuant to the terms of the acquisition to reflect the difference in the value of a share of Company common stock and a share of the acquired company’s common stock prior to closing the acquisition.
The Assumed RSUs were converted into 338,144 restricted stock units of the Company and generally vest over 50 months .
−Removed: After the acquisition and notwithstanding any other provisions of the Ultratech Plan, no further grants will be made under the Ultratech Plan, and the Company is solely maintaining the Ultratech Plan with respect to the Assumed RSUs.
−Removed: At December 31, 2019, there are 7,483 RSUs outstanding under the Ultratech Plan.
+Added: After the acquisition and notwithstanding any other provisions of the Assumed Plan, no further grants will be made under the Assumed Plan, and the Company is solely maintaining the Assumed Plan with respect to the Assumed RSUs.
+Added: At December 31, 2020, there are 4,030 RSUs outstanding under the Assumed Plan.
Shares Reserved for Future Issuance
12 unchanged sentences
Restructuring
−Removed: Acquisition costs
The Company did not realize any tax benefits associated with share-based compensation for the years ended December 31, 2020, 2019, and 2018 due to the full valuation allowance on its U.S.
6 unchanged sentences
(in thousands)
−Removed: Stock option awards
Restricted stock units
4 unchanged sentences
Stock options are awards issued to employees that entitle the holder to purchase shares of the Company’s stock at a fixed price.
−Removed: At December 31, 2019, options outstanding that have vested and are expected to vest are as follows:
−Removed: Exercise Price
−Removed: Contractual Life
−Removed: (in thousands)
−Removed: (in thousands)
−Removed: Expected to vest
−Removed: The aggregate intrinsic value represents the difference between the option exercise price and $ 14.69 , the closing price of the Company’s common stock on December 31, 2019, the last trading day of the Company’s fiscal year as reported on the NASDAQ Global Select Market.
−Removed: Veeco Instruments Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Continued)
−Removed: Additional information with respect to stock option activity:
+Added: The following table summarizes the equity activity related to stock options:
Exercise Price
7 unchanged sentences
Balance - December 31, 2020
+Added: Veeco Instruments Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Continued)
The following table summarizes stock option information at December 31, 2020:
9 unchanged sentences
$ 50.01 - $ 60.00
−Removed: The following table summarizes information on options exercised for the periods indicated:
−Removed: Year ended December 31,
−Removed: (in thousands)
−Removed: Cash received from options exercised
−Removed: Intrinsic value of options exercised
+Added: There were no unvested options outstanding as of December 31, 2020.
+Added: Additionally, there were no options exercised for the years ended December 31, 2020, 2019, or 2018.
RSAs, RSUs, PSAs, PSUs
−Removed: RSAs are stock awards issued to employees that are subject to specified restrictions and a risk of forfeiture.
+Added: RSAs are stock awards issued to employees and directors that are subject to specified restrictions and a risk of forfeiture.
RSUs are stock awards issued to employees that entitle the holder to receive shares of common stock as the awards vest.
PSAs and PSUs are awards that result in an issuance of shares of common stock to employees if certain performance or market conditions are achieved.
−Removed: All of these awards typically vest over one to five years and vesting is subject to the employee's continued service with the Company and, in the case of performance awards, meeting certain performance or market conditions.
+Added: All of these awards typically vest over one to four years and vesting is subject to the employee's continued service with the Company and, in the case of performance awards, meeting certain performance or market conditions.
The fair value of the awards is determined and fixed based on the closing price of the Company’s common stock on the trading day prior to the date of grant, or, in the case of performance awards with market conditions, fair value is determined using a Monte Carlo simulation.
−Removed: Veeco Instruments Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Continued)
The following table summarizes the equity activity of non-vested restricted shares and performance shares:
2 unchanged sentences
Performance award adjustments
−Removed: Assumed from Ultratech
Balance - December 31, 2018
4 unchanged sentences
The total fair value of shares that vested during the years ended December 31, 2020, 2019, and 2018 was $ 9.0 million, $ 8.8 million, and $ 9.1 million, respectively.
−Removed: For performance awards, the final number of shares earned will vary depending on the achievement of the actual results relative to the performance or market conditions.
+Added: For performance awards, the final number of shares earned will vary
+Added: Veeco Instruments Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Continued)
+Added: depending on the achievement of the actual results relative to the performance or market conditions.
Each performance award is included in the table above at the grant date target share amount until the end of the performance period if not previously forfeited.
12 unchanged sentences
(3) The expected life is the number of years the Company estimates that the awards will be outstanding prior to exercise.
−Removed: Veeco Instruments Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Continued)
Employee Stock Purchase Plan
16 unchanged sentences
Generally, the plan calls for vesting in the Company contributions over the initial five years of a participant’s employment.
−Removed: In addition, the Company assumed Ultratech’s 401(k) plan as a result of the merger, and Ultratech’s plan was merged into the Company’s existing plan effective January 1, 2018.
−Removed: The Company provided employer contributions associated with these plans of approximately $ 2.4 million, $ 2.0 million, and $ 1.8 million for the years ended December 31, 2019, 2018, and 2017, respectively.
+Added: The Company provided employer contributions
+Added: Veeco Instruments Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Continued)
+Added: associated with this plan of approximately $ 2.4 million, $ 2.4 million, and $ 2.0 million for the years ended December 31, 2020, 2019, and 2018, respectively.
+Added: Note 16 — Dispositions
+Added: In the fourth quarter of 2019, the Company determined that one of its non-core product lines (the “disposal group”) met the held for sale criteria, and as such, the related assets are presented as “Assets held for sale” on the Consolidated Balance Sheet as of December 31, 2019.
+Added: During the second quarter of 2020, the Company completed the sale of this product line for approximately $ 11.4 million, with approximately 85 % of the transaction price received upon closing, and 15 % held in escrow for a period of 18 months and included within “Prepaid expenses and other current assets” in the Consolidated Balance Sheet as of December 31, 2020.
+Added: Long-lived assets and definite-lived intangible assets were not depreciated or amortized while classified as held for sale.
+Added: The sale of this disposal group did not represent a strategic shift that will have a material effect on the Company’s operations and financial results, nor is it considered a component of the Company, and as such it did not meet the criteria to be reported as discontinued operations.
+Added: For the year ended December 31, 2019, the Company recorded a non-cash impairment charge on these assets held for sale of $ 4.0 million, included in “Asset impairment” in the Consolidated Statements of Operations, in order to measure the disposal group at the lower of its carrying value or fair value less costs to sell, which resulted in a corresponding held for sale valuation allowance on its assets held for sale in the Consolidated Balance Sheet.
+Added: During the second quarter of 2020, the Company recorded additional impairment charges of $ 0.3 million related to the finalization of the sale of this disposal group.
+Added: The major classes of assets that were sold are as follows:
+Added: Net assets sold:
+Added: (in thousands)
+Added: Property, plant, and equipment, net
+Added: Intangible assets, net
+Added: Deferred revenue
+Added: Total net assets sold
+Added: Net proceeds after costs to sell
+Added: Total impairment on sale of disposal group
Note 17 — Income Taxes
28 unchanged sentences
Asset impairment
+Added: Partial extinguishment of 2023 Notes
Total expense (benefit) for income taxes
−Removed: The Company recognized the income tax effects of the 2017 Tax Act in its 2017 financial statements in accordance with SAB 118, which provided SEC staff guidance for the application of ASC 740 in the reporting period in which the 2017 Tax Act was signed into law.
−Removed: As such, the Company’s 2017 financial results included provisional amounts for specific income tax effects of the 2017 Tax Act for which the accounting under ASC 740 was incomplete but for which a reasonable estimate could be determined.
−Removed: During the year ended December 31, 2018, the Company finalized the accounting for the tax effects of 2017 Tax Act based on legislative updates currently available and recorded an additional income tax benefit of $ 1.7 million for alternative minimum tax credits that became refundable in accordance with the 2017 Tax Act.
−Removed: The Company also reported an increase in deferred tax assets of $ 6.8 million as a result of adjustments to tax attributes utilized for one-time transition tax, which was offset by a full valuation allowance .
−Removed: The most significant impacts of the 2017 Tax Act on the Company’s federal income taxes for the year ended December 31, 2017 were as follows:
−Removed: Reduction of the U.S.
−Removed: Corporate Income Tax Rate
−Removed: The Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid.
−Removed: Accordingly, the Company’s deferred tax assets and liabilities were re-measured as of December 22, 2017 to reflect the reduction in the U.S.
−Removed: corporate income tax rate from
Veeco Instruments Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Continued)
−Removed: 35 percent to 21 percent.
−Removed: The Company recorded an income tax benefit of $ 4.8 million for the year ended December 31, 2017, as the net deferred tax assets were reduced by $ 25.6 million with a corresponding valuation allowance reduction of $ 30.4 million.
−Removed: One-Time Transition Tax on Foreign Earnings
−Removed: As of December 31, 2017, the Company had $ 180.1 million of foreign earnings that was subject to the one-time transition tax.
−Removed: The Company used its 2017 and carryforward net operating losses to offset the impact of the transition tax.
−Removed: As the Company maintains a full valuation allowance against its U.S.
−Removed: deferred tax assets, the Company did not record an income tax expense related to the transition tax for the year ended December 31, 2017.
−Removed: Valuation Allowance
−Removed: The 2017 Tax Act modified the Net Operating Loss ("NOL") provisions to provide for an indefinite carryforward of NOLs arising in tax years beginning after December 31, 2017.
−Removed: The 2017 Tax Act also limits the amount of NOL deductions that can be used in any one year to 80 percent of the taxpayer’s taxable income, effective with respect to NOLs arising in tax years beginning after December 31, 2017.
−Removed: The Company recognized an income tax benefit of $ 6.5 million for the year ended December 31, 2017 related to a reduction in the Company’s valuation allowance as a result of the Company scheduling out the reversals of its net deferred tax assets which resulted in tax amortization on indefinite-lived intangible assets becoming available to offset existing deferred tax assets that are now expected to have an indefinite life.
Deferred income taxes reflect the effect of temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for tax purposes.
7 unchanged sentences
Share-based compensation
+Added: Customer deposits and deferred revenue
+Added: Operating leases
Total deferred tax assets
4 unchanged sentences
Convertible Senior Notes
+Added: Operating leases
Total deferred tax liabilities
1 unchanged sentence
The Company is no longer permanently reinvesting future earnings from certain foreign jurisdictions and has accrued for foreign tax withholdings of $ 0.7 million on its unremitted earnings as of December 31, 2020.
−Removed: Veeco Instruments Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Continued)
At December 31, 2020, the Company had U.S.
federal NOL carryforwards of approximately $ 219.3 million, of which $ 6.9 million has an indefinite carryforward period, with the remaining expiring in varying amounts between 2034 and 2037, if not utilized.
−Removed: In connection with the Ultratech acquisition, the Company has $ 120.8 million of historical NOL carryforwards which are subject to an annual limitation.
−Removed: The Company has $ 3.5 million of capital loss carryforwards that expire in 2021.
At December 31, 2020, the Company had U.S.
federal research and development credits of $ 28.8 million that will expire between 2021 and 2040.
−Removed: The Ultratech acquisition resulted in the carryover of $ 11.4 million of research and development credit carryforwards, which are subject to an annual limitation.
The Company also has $ 9.4 million of foreign tax credits that expire in 2027.
3 unchanged sentences
As of December 31, 2020, the Company continued to have a cumulative three year loss with respect to its U.S.
−Removed: As such, the Company has recorded a valuation allowance against its U.S.
+Added: As such, the Company maintains a valuation allowance against its U.S.
deferred tax assets.
−Removed: During 2019, the Company’s valuation allowance increased by approximately $ 15.1 million.
+Added: During 2020, the Company’s valuation allowance decreased by approximately $ 11.6 million.
+Added: Veeco Instruments Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Continued)
A roll-forward of the Company’s uncertain tax positions for all U.S.
6 unchanged sentences
Reductions due to the lapse of the statute of limitations
−Removed: Additions for business combination
Balance at end of year
If the amount of unrecognized tax benefits at December 31, 2020 were recognized, the Company’s income tax provision would decrease by $ 1.4 million.
−Removed: The gross amount of interest and penalties accrued in income tax payable in the Consolidated Balance Sheets was approximately $ 0.4 million and $ 0.3 million at December 31, 2019 and 2018, respectively.
+Added: The gross amount of interest and penalties accrued in income tax payable in the Consolidated Balance Sheets was approximately $ 0.4 million at both December 31, 2020 and 2019.
The Company, or one of its subsidiaries, files income tax returns in the United States federal jurisdiction, and various state, local, and foreign jurisdictions.
2 unchanged sentences
The majority of the Company’s foreign jurisdictions have been reviewed through 2015.
−Removed: The Company’s major foreign jurisdictions’ statutes of limitation remain open with respect to the tax years 2017 and 2018 for China, 2015 through 2018 for Germany and Singapore, and 2018 for Taiwan.
+Added: The Company’s major foreign jurisdictions’ statutes of limitation remain open with respect to the tax years 2015 through 2019 for China, Germany, and Singapore, and 2019 for Taiwan.
The Company does not anticipate that its uncertain tax position will change significantly within the next twelve months subject to the completion of the ongoing tax audits and any resultant settlement.
1 unchanged sentence
The Company operates and measures its results in one operating segment and therefore has one reportable segment:
−Removed: the development, manufacture, sales, and support of semiconductor and thin film process equipment primarily sold to make
−Removed: Veeco Instruments Inc.
−Removed: and Subsidiaries
−Removed: Notes to Consolidated Financial Statements (Continued)
−Removed: electronic devices.
+Added: the development, manufacture, sales, and support of semiconductor and thin film process equipment primarily sold to make electronic devices.
The Company’s Chief Operating Decision Maker, the Chief Executive Officer, evaluates performance of the Company and makes decisions regarding the allocation of resources based on total Company results.
−Removed: Sales by market is as follows:
+Added: In order to align with the Company’s evolving strategy, the Company now categorizes its sales into the following four end-markets:
+Added: 1) Semiconductor;
+Added: 2) Compound Semiconductor;
+Added: 3) Data Storage;
+Added: and 4) Scientific & Other.
+Added: Prior period sales have been reclassified to the new end-markets for comparative purposes.
+Added: Sales by end-market is as follows:
For the year ended December 31,
1 unchanged sentence
Sales by end-market
−Removed: Front-End Semiconductor
−Removed: Advanced Packaging, MEMS & RF Filters
−Removed: LED Lighting, Display & Compound Semiconductor
−Removed: Scientific & Industrial
−Removed: The Company’s significant operations outside the United States include sales and service offices in China, Europe, and Rest of World.
+Added: Semiconductor
+Added: Compound Semiconductor
+Added: Scientific & Other
+Added: The Company’s significant operations outside the United States include sales and service offices in China, Europe, and Rest of APAC.
For geographic reporting, sales are attributed to the location in which the customer facility is located.
+Added: Veeco Instruments Inc.
+Added: and Subsidiaries
+Added: Notes to Consolidated Financial Statements (Continued)
Sales and long-lived tangible assets by geographic region are as follows:
13 unchanged sentences
Diluted income (loss) per common share
+Added: As discussed in Note 11, “Debt”, the Company accounted for the partial settlements of the 2023 Notes in the second quarter and fourth quarter of 2020 as extinguishments, and as such, recorded losses on extinguishment of approximately $ 3.0 million and $ 4.8 million for the second and fourth quarter, respectively, which were included in “Other income (expense), net” in the Consolidated Statements of Operations.
+Added: Refer to Note 11, “Debt” for additional information.
+Added: During the fourth quarter of 2019, the Company recorded a non-cash impairment charge of $ 21.0 million related to its equity investment in Kateeva which is included in “Other income (expense), net” in the Consolidated Statements of Operations, as well as a non-cash impairment charge of $ 4.0 million related to the classification of a disposal group as held for sale which is included in “Asset impairment” in the Consolidated Statements of Operations.
+Added: Refer to Note 4, “Investments,” and Note 16, “Dispositions,” for additional information.
Veeco Instruments Inc.
1 unchanged sentence
Notes to Consolidated Financial Statements (Continued)
−Removed: Asset Impairments
−Removed: During the fourth quarter of 2019, the Company recorded a non-cash impairment charge of $ 21 million related to its equity investment in Kateeva which is included in “Other income (expense), net” in the Consolidated Statements of Operations, as well as a non-cash impairment charge of $ 4.0 million related to the classification of a disposal group as held for sale which is included in “Asset impairment” in the Consolidated Statements of Operations.
−Removed: Refer to Note 4, “Investments,” and Note 5, “Acquisitions and Dispositions,” for additional information.
−Removed: During the second quarter of 2018, the Company recorded non-cash impairment charges related to the Ultratech asset group of $ 216.4 million and $ 35.9 million for definite-lived intangible assets and in-process research and development assets, respectively.
−Removed: Additionally, during the fourth quarter of 2018, the Company recorded a non-cash goodwill impairment charge of $ 122.8 million.
−Removed: Refer to Note 6, “Goodwill and Intangible Assets,” for additional information.
+Added: Note 20 — Subsequent Event
+Added: On February 18, 2021, the Company entered into a lease agreement through 2037 for a new manufacturing facility in San Jose, California in order to expand its manufacturing capabilities to meet growing demand for its advanced laser annealing technology that serves the world’s leading semiconductor technology companies.
+Added: With the transition to the new facility, the Company will remain in the Silicon Valley area in close proximity to leading U.S.
+Added: semiconductor companies.
+Added: The lease agreement contains two renewal options for a period of three years each, and has various escalation and abatement clauses, with annual base rent payable of between $ 2.0 million and $ 3.7 million through the initial lease period as well as certain other expenses, including maintenance, real estate taxes, and insurance.
+Added: In addition, the lease agreement includes a tenant improvement allowance of $ 6.8 million to be used for the initial build-out.
Schedule II — Valuation and Qualifying Accounts
11 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.