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10-Q 1 nati-20170630x10q.htm 10-Q

Delaware(State or other jurisdiction of incorporation or organization)74-1871327(I.R.S. Employer Identification Number)
11500 North MoPac Expressway Austin, Texas78759
(address of principal executive offices)(zip code)
PART I. FINANCIAL INFORMATIONPage No.
Item 1Financial Statements:
Consolidated Balance Sheets
September 30, 2017 (unaudited) and December 31, 20163
Consolidated Statements of Income
(unaudited) for the three and nine month periods ended September 30, 2017 and 20164
Consolidated Statements of Comprehensive Income
(unaudited) for the three and nine month periods ended September 30, 2017 and 20165
Consolidated Statements of Cash Flows
(unaudited) for the three and nine month periods ended September 30, 2017 and 20166
Notes to Consolidated Financial Statements7
Item 2Management's Discussion and Analysis of Financial Condition and Results of Operations26
Item 3Quantitative and Qualitative Disclosures about Market Risk40
Item 4Controls and Procedures41
PART II. OTHER INFORMATION
Item 1Legal Proceedings41
Item 1ARisk Factors41
Item 2Unregistered Sales of Equity Securities and Use of Proceeds50
Item 5Other Information50
Item 6Exhibits51
Signatures and Certifications54
September 30,December 31,
20172016
Assets(unaudited)
Current assets:

Cash and cash equivalents$294,194
$285,283
Short-term investments91,223
73,117
Accounts receivable, net235,177
228,686
Inventories, net184,641
193,608
Prepaid expenses and other current assets50,325
53,953
Total current assets855,560
834,647
Property and equipment, net254,918
260,456
Goodwill265,091
253,197
Intangible assets, net122,681
108,663
Other long-term assets32,878
39,601
Total assets$1,531,128
$1,496,564
Liabilities and stockholders' equity

Current liabilities:

Accounts payable and accrued liabilities$51,274
$48,800
Accrued compensation45,231
27,743
Deferred revenue - current120,271
115,577
Other current liabilities17,802
32,997
Other taxes payable30,832
34,958
Total current liabilities265,410
260,075
Long-term debt15,000
25,000
Deferred income taxes37,074
45,386
Liability for uncertain tax positions9,284
11,719
Deferred revenue - long-term31,405
29,752
Other long-term liabilities9,156
10,413
Total liabilities367,329
382,345
Commitments and contingencies



Stockholders' equity:

Preferred stock: par value $0.01; 5,000,000 shares authorized; none issued and outstanding

Common stock: par value $0.01; 360,000,000 shares authorized; 130,745,022 shares and 129,202,979 shares issued and outstanding, respectively 1,307
1,292
Additional paid-in capital816,152
771,346
Retained earnings365,021
376,202
Accumulated other comprehensive loss(18,681)(34,621)
Total stockholders’ equity1,163,799
1,114,219
Total liabilities and stockholders’ equity$1,531,128
$1,496,564
Three Months EndedNine Months Ended
September 30,September 30,
2017201620172016




Net sales:



Product$291,891
$278,521
$853,219
$816,486
Software maintenance29,030
27,843
86,416
83,161
Total net sales320,921
306,364
939,635
899,647




Cost of sales:



Product81,641
74,734
235,989
225,261
Software maintenance2,110
1,998
6,744
5,126
Total cost of sales83,751
76,732
242,733
230,387




Gross profit237,170
229,632
696,902
669,260




Operating expenses:



Sales and marketing116,661
116,662
358,335
346,230
Research and development56,526
59,066
171,701
178,244
General and administrative26,468
24,537
78,400
74,308
Total operating expenses199,655
200,265
608,436
598,782




Operating income37,515
29,367
88,466
70,478




Other income:



Interest income657
276
1,509
787
Net foreign exchange gain (loss)1,096
(760)1,624
(1,471)
Other (loss) gain, net(1,153)301
(957)(2,052)
Income before income taxes38,115
29,184
90,642
67,742
Provision for income taxes4,726
4,695
13,949
14,155




Net income$33,389
$24,489
$76,693
$53,587




Basic earnings per share$0.26
0.19
0.59
0.42




Weighted average shares outstanding - basic130,660
128,815
130,103
128,233




Diluted earnings per share$0.25
$0.19
$0.59
0.42




Weighted average shares outstanding - diluted131,617
129,047
131,050
128,738




Dividends declared per share$0.21
$0.20
$0.63
$0.60
Three Months EndedNine Months Ended
September 30,September 30,
2017201620172016




Net income$33,389
$24,489
$76,693
$53,587
Other comprehensive income, before tax and net of reclassification adjustments:



Foreign currency translation adjustment6,226
3,964
21,890
12,130
Unrealized gain (loss) on securities available-for-sale162
(70)187
479
Unrealized (loss) gain on derivative instruments(3,136)976
(9,470)4,541
Other comprehensive gain, before tax3,252
4,870
12,607
17,150
Tax (benefit) expense related to items of other comprehensive income(1,186)967
(3,333)4,242
Other comprehensive gain, net of tax4,438
3,903
15,940
12,908
Comprehensive income$37,827
$28,392
$92,633
$66,495
Nine Months Ended
September 30,
20172016
Cash flow from operating activities:

Net income$76,693
$53,587
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization54,794
55,164
Stock-based compensation21,272
19,635
Tax expense from deferred income taxes(4,290)(7,321)
Changes in operating assets and liabilities(1,013)28,951
Net cash provided by operating activities147,456
150,016


Cash flow from investing activities:

Capital expenditures(24,084)(34,408)
Capitalization of internally developed software(34,406)(24,048)
Additions to other intangibles(1,379)(1,969)
Acquisitions, net of cash received
(549)
Purchases of short-term investments(62,845)(9,054)
Sales and maturities of short-term investments45,582
38,566
Net cash used in investing activities(77,132)(31,462)


Cash flow from financing activities:

Proceeds from revolving line of credit
15,000
Principal payments on revolving line of credit(10,000)(27,000)
Proceeds from issuance of common stock22,870
22,157
Repurchase of common stock
(5,635)
Dividends paid(82,051)(77,056)
Net cash used in financing activities(69,181)(72,534)


Effect of exchange rate changes on cash7,768
3,503


Net change in cash and cash equivalents8,911
49,523
Cash and cash equivalents at beginning of period285,283
251,129
Cash and cash equivalents at end of period$294,194
$300,652
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands)(In thousands)
(Unaudited)(Unaudited)
2017201620172016
Weighted average shares outstanding-basic130,660
128,815
130,103
128,233
Plus: Common share equivalents



RSUs957
232
947
505
Weighted average shares outstanding-diluted131,617
129,047
131,050
128,738
As of September 30, 2017
(In thousands)(Unaudited)
GrossGrossCumulative
Adjusted CostUnrealized GainUnrealized LossTranslation AdjustmentFair Value
Corporate bonds$90,817
$170
$(76)$(1,448)$89,463
Time deposits1,760



1,760
Short-term investments$92,577
$170
$(76)$(1,448)$91,223
(In thousands)As of December 31, 2016
GrossGrossCumulative
Adjusted CostUnrealized GainUnrealized LossTranslation AdjustmentFair Value
Corporate bonds$72,986
$89
$(182)$(1,536)$71,357
Time deposits1,760



1,760
Short-term investments$74,746
$89
$(182)$(1,536)$73,117
As of September 30, 2017
(In thousands)(Unaudited)
Adjusted CostFair Value
Due in less than 1 year$15,838
$15,833
Due in 1 to 5 years76,739
75,390
Total available-for-sale debt securities$92,577
$91,223
Due in less than 1 yearAdjusted CostFair Value
Corporate bonds$14,078
$14,073
U.S. treasuries and agencies

Time deposits1,760
1,760
Total available-for-sale debt securities$15,838
$15,833
Due in 1 to 5 yearsAdjusted CostFair Value
Corporate bonds$76,739
$75,390
Total available-for-sale debt securities$76,739
$75,390
Fair Value Measurements at Reporting Date Using
(In thousands)(Unaudited)
DescriptionSeptember 30, 2017Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Assets
Cash and cash equivalents available for sale:
Money Market Funds$43,982
$43,982
$
$
U.S. treasuries and agencies64,064

64,064

Short-term investments available for sale:


Corporate bonds89,463

89,463

Time deposits1,760
1,760


Derivatives6,574

6,574

Total Assets$205,843
$45,742
$160,101
$
Liabilities
Derivatives$(11,700)$
$(11,700)

Total Liabilities$(11,700)$
$(11,700)$
(In thousands)Fair Value Measurements at Reporting Date Using
DescriptionDecember 31, 2016Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Assets
Cash and cash equivalents available for sale:
Money Market Funds$68,577
$68,577
$
$
Short-term investments available for sale:
Corporate bonds71,357

71,357

Time deposits1,760
1,760


Derivatives15,113

15,113

Total Assets$156,807
$70,337
$86,470
$
Liabilities
Derivatives$(8,199)$
$(8,199)$
Total Liabilities$(8,199)$
$(8,199)$
(In thousands)US Dollar Equivalent
As of September 30, 2017As of December 31,
(Unaudited)2016
Chinese yuan$27,760
$27,414
Euro158,490
123,522
Japanese yen23,726
44,982
Hungarian forint48,722
57,077
Malaysian ringgit32,438
42,510
Total forward contracts notional amount$291,136
$295,505
Asset Derivatives
September 30, 2017December 31, 2016
(In thousands)(Unaudited)
Balance Sheet LocationFair ValueBalance Sheet LocationFair Value
Derivatives designated as hedging instruments

Foreign exchange contracts - ST forwardsPrepaid expenses and other current assets$3,695
Prepaid expenses and other current assets$9,378
Foreign exchange contracts - LT forwardsOther long-term assets2,702
Other long-term assets3,866
Total derivatives designated as hedging instruments$6,397
$13,244
Derivatives not designated as hedging instruments

Foreign exchange contracts - ST forwardsPrepaid expenses and other current assets$177
Prepaid expenses and other current assets$1,869
Total derivatives not designated as hedging instruments$177
$1,869
Total derivatives$6,574
$15,113
Liability Derivatives
September 30, 2017December 31, 2016
(In thousands)(Unaudited)
Balance Sheet LocationFair ValueBalance Sheet LocationFair Value
Derivatives designated as hedging instruments

Foreign exchange contracts - ST forwardsOther current liabilities$(6,695)Other current liabilities$(4,672)


Foreign exchange contracts - LT forwardsOther long-term liabilities(4,082)Other long-term liabilities(3,352)
Total derivatives designated as hedging instruments$(10,777)$(8,024)


Derivatives not designated as hedging instruments



Foreign exchange contracts - ST forwardsOther current liabilities$(923)Other current liabilities$(175)
Total derivatives not designated as hedging instruments$(923)$(175)


Total derivatives$(11,700)$(8,199)
September 30, 2017
(In thousands)
(Unaudited)
Derivatives in Cash Flow Hedging RelationshipGain or (Loss) Recognized in OCI on Derivative (Effective Portion)Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
Foreign exchange contracts - forwards and options$(5,804)Net sales$(1,401)Net foreign exchange gain/(loss)$



Foreign exchange contracts - forwards and options1,421
Cost of sales(105)Net foreign exchange gain/(loss)



Foreign exchange contracts - forwards and options1,247
Operating expenses(148)Net foreign exchange gain/(loss)
Total$(3,136)$(1,654)$
September 30, 2016
(In thousands)
(Unaudited)
Derivatives in Cash Flow Hedging RelationshipGain or (Loss) Recognized in OCI on Derivative (Effective Portion)Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
Foreign exchange contracts - forwards and options$(1,156)Net sales$(160)Net foreign exchange gain/(loss)$



Foreign exchange contracts - forwards and options1,412
Cost of sales(414)Net foreign exchange gain/(loss)



Foreign exchange contracts - forwards and options720
Operating expenses(389)Net foreign exchange gain/(loss)
Total$976
$(963)$
(In thousands)
Derivatives not Designated as Hedging InstrumentsLocation of Gain (Loss) Recognized in IncomeAmount of Gain (Loss) Recognized in IncomeAmount of Gain (Loss) Recognized in Income
September 30, 2017September 30, 2016
(Unaudited)(Unaudited)
Foreign exchange contracts - forwardsNet foreign exchange gain/(loss)$(887)(814)


Total$(887)$(814)
September 30, 2017
(In thousands)
(Unaudited)
Derivatives in Cash Flow Hedging RelationshipGain or (Loss) Recognized in OCI on Derivative (Effective Portion)Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
Foreign exchange contracts - forwards and options$(20,601)Net sales$1,348
Net foreign exchange gain/(loss)$



Foreign exchange contracts - forwards and options5,901
Cost of sales(1,083)Net foreign exchange gain/(loss)



Foreign exchange contracts - forwards and options5,230
Operating expenses(1,127)Net foreign exchange gain/(loss)
Total(9,470)$(862)$
September 30, 2016
(In thousands)
(Unaudited)
Derivatives in Cash Flow Hedging RelationshipGain or (Loss) Recognized in OCI on Derivative (Effective Portion)Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
Foreign exchange contracts - forwards and options$(1,432)Net sales$(1,301)Net foreign exchange gain/(loss)$



Foreign exchange contracts - forwards and options3,009
Cost of sales(1,367)Net foreign exchange gain/(loss)



Foreign exchange contracts - forwards and options2,964
Operating expenses(1,278)Net foreign exchange gain/(loss)
Total$4,541
$(3,946)$
(In thousands)
Derivatives not Designated as Hedging InstrumentsLocation of Gain (Loss) Recognized in IncomeAmount of Gain (Loss) Recognized in IncomeAmount of Gain (Loss) Recognized in Income
September 30, 2017September 30, 2016
(Unaudited)(Unaudited)
Foreign exchange contracts - forwardsNet foreign exchange gain/(loss)$(4,065)(1,005)
Total$(4,065)$(1,005)
September 30, 2017December 31,
(In thousands)(Unaudited)2016


Raw materials $93,023
$92,906
Work-in-process9,095
9,125
Finished goods82,523
91,577
$184,641
$193,608
September 30, 2017
(In thousands)(Unaudited)December 31, 2016
Gross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying Amount
Capitalized software development costs$116,760
$(32,701)$84,059
$103,887
$(39,180)$64,707
Acquired technology95,963
(85,573)10,390
94,124
(79,485)14,639
Patents32,678
(19,424)13,254
31,513
(17,573)13,940
Other45,212
(30,234)14,978
42,848
(27,471)15,377
$290,613
$(167,932)$122,681
$272,372
$(163,709)$108,663
Amount
(In thousands)
Balance as of December 31, 2016$253,197
Acquisitions
Foreign currency translation impact11,894
Balance as of September 30, 2017 (unaudited)$265,091
September 30, 2017
(Unaudited)
(In thousands)Currency translation adjustmentInvestmentsDerivative instrumentsAccumulated other comprehensive income/(loss)
Balance as of December 31, 2016$(37,174)$(669)3,222
$(34,621)
Current-period other comprehensive income (loss)21,890
187
(10,332)11,745
Reclassified from accumulated OCI into income

862
862
Income tax (benefit) expense13
14
(3,360)(3,333)
Balance as of September 30, 2017$(15,297)$(496)$(2,888)$(18,681)
September 30, 2016
(Unaudited)
(In thousands)Currency translation adjustmentInvestmentsDerivative instrumentsAccumulated other comprehensive income/(loss)
Balance as of December 31, 2015$(31,871)$(857)(5,362)$(38,090)
Current-period other comprehensive income12,130
479
595
13,204
Reclassified from accumulated OCI into income

3,946
3,946
Income tax expense2,582
123
1,537
4,242
Balance as of September 30, 2016$(22,323)$(501)$(2,358)$(25,182)
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands)(Unaudited)(Unaudited)
2017201620172016
Net sales:
Americas$133,191
$129,710
$373,277
$354,806
EMEIA93,277
92,232
288,565
278,616
APAC94,453
84,422
277,793
266,225
$320,921
$306,364
$939,635
$899,647
Nine Months Ended September 30,
(In thousands)(Unaudited)
20172016
Balance at the beginning of the period$2,686
$1,755
Accruals for warranties issued during the period1,929
1,764
Accruals related to pre-existing warranties193
690
Settlements made (in cash or in kind) during the period(1,983)(2,088)
Balance at the end of the period$2,825
$2,121
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands)(Unaudited)(Unaudited)
2017201620172016
Cost of sales$79

$986

Research and development86

1,382

Sales and marketing1,618

7,997

General and Administration207

801

Total restructuring and other related costs$1,990

$11,166

Restructuring Liability
(in thousands)
Balance as of December 31, 2016$
Income statement expense11,166
Cash payments(7,714)
Balance as of September 30, 2017$3,452
Three Months Ended September 30,Nine Months Ended September 30,
(Unaudited)(Unaudited)
2017201620172016
Net sales:

Americas41.5 %42.3 %39.7 %39.4 %
EMEIA29.1
30.1
30.7
31.0
APAC29.4
27.6
29.6
29.6
Total net sales100.0
100.0
100.0
100.0
Cost of sales26.1
25.0
25.8
25.6
Gross profit73.9
75.0
74.2
74.4
Operating expenses:



Sales and marketing36.4
38.1
38.1
38.5
Research and development17.6
19.3
18.3
19.8
General and administrative8.2
8.0
8.3
8.3
Total operating expenses62.2
65.4
64.7
66.6
Operating income11.7
9.6
9.4
7.8
Other income (expense):



Interest income0.2
0.1
0.2
0.1
Net foreign exchange loss0.3
(0.2)0.2
(0.2)
Other income, net(0.4)0.1
(0.1)(0.2)
Income before income taxes11.8
9.6
9.7
7.5
Provision for income taxes1.5
1.5
1.5
1.5
Net income10.4 %8.0 %8.2 %6.0 %
Three Months Ended September 30,Nine Months Ended September 30,
(Unaudited)(Unaudited)
ChangeChange
(In millions)20172016DollarsPercentage20172016DollarsPercentage
Product sales$291.9
$278.5
13.45%$853.2
$816.5
36.74%
Software maintenance sales29.0
27.8
1.24%86.4
83.2
3.24%
Total net sales$320.9
$306.4
14.55%$939.6
$899.6
40.04%
Three Months Ended September 30,Nine Months Ended September 30,
(Unaudited)(Unaudited)
ChangeChange
(In millions)20172016DollarsPercentage20172016DollarsPercentage
Americas$133.2
$129.7
3.53%$373.3
$354.8
18.55%
Percentage of total net sales41.5%42.3%39.7%39.4%
EMEIA93.3
$92.2
1.11%288.6
278.6
10.04%
Percentage of total net sales29.1%30.1%30.7%31.0%
APAC$94.5
$84.4
10.112%277.8
266.2
11.64%
Percentage of total net sales29.4%27.6%29.6%29.6%
Three Months ended September 30, 2016Changein Constant DollarsImpact of changes in foreign currency exchange rates on net salesThree Months ended September 30, 2017
(In millions)GAAP Net SalesDollarsPercentageDollarsPercentageGAAP Net Sales
Americas$129.7
3.2
2.5%0.3
0.2%133.2
EMEIA$92.2
1.3
1.4%(0.2)(0.2)%93.3
APAC$84.4
10.2
12.1%(0.2)(0.2)%94.5
Total net sales$306.3
14.7
4.8%(0.1)(0.1)%320.9
Nine Months ended September 30, 2016Changein Constant DollarsImpact of changes in foreign currency exchange rates on net salesNine Months ended September 30, 2017
(In millions)GAAP Net SalesDollarsPercentageDollarsPercentageGAAP Net Sales
Americas$354.8
18.0
5.1%0.4
—%373.3
EMEIA$278.6
14.9
5.3%(5.0)(1.8)%288.6
APAC$266.2
12.8
4.8%(1.2)(0.5)%277.8
Total net sales$899.6
45.7
5.1%(5.8)(0.6)%939.6
Three Months Ended September 30,Nine Months Ended
September 30,
(Unaudited)(Unaudited)
(In millions)2017201620172016
Gross Profit$237.2$229.6$696.9$669.3
% change compared with prior period3.3%4.1%
Gross Profit as a percentage of net sales73.9%75.0%74.2%74.4%
Three Months Ended September 30,Nine Months Ended September 30,
(Unaudited)(Unaudited)
(In thousands)20172016Change20172016Change
Sales and marketing$116,661
$116,662
—%$358,335
$346,230
3%
Percentage of total net sales36%38%38%38%
Research and development$56,526
59,066
(4)%171,701
178,244
(4)%
Percentage of total net sales18%19%18%20%
General and Administrative$26,468
24,537
8%78,400
74,308
6%
Percentage of total net sales8%8%8%8%
Total operating expenses$199,655
200,265
(0.3)%608,436
598,782
2%
Percentage of total net sales62%65%65%67%
Three Months EndedNine months Ended
September 30, 2017September 30, 2017
(Unaudited)(Unaudited)
Effective tax rate at September 30, 201616 %21 %
Change in profit in foreign jurisdictions with reduced tax rates(6)%(5)%
Change in enhanced deduction for certain research and development expenses5 %5 %
Change in intercompany prepaid tax asset(4)%(4)%
Change in unrecognized tax benefits1 % %
Change in tax benefit from equity awards %(2)%
Effective tax rate at September 30, 201712 %15 %
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands)(Unaudited)(Unaudited)
2017201620172016
Stock-based compensation



Cost of sales$689
$556
$1,914
$1,643
Sales and marketing3,014
2,635
8,523
8,422
Research and development2,328
2,027
6,552
6,745
General and administrative1,514
921
4,358
2,764
Provision for income taxes(2,369)(2,092)(7,388)(6,202)
Total$5,176
$4,047
$13,959
$13,372
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands)(Unaudited)(Unaudited)
2017201620172016
Amortization of acquired intangibles



Cost of sales$1,502
$1,599
$4,648
$7,621
Sales and marketing515
502
1,479
2,141
Research and development283
276
813
815
Provision for income taxes(546)854
(1,656)1,312
Total$1,754
$3,231
$5,284
$11,889
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands)(Unaudited)(Unaudited)
2017201620172016
Acquisition transaction costs, restructuring charges, and other



Cost of sales$79
$74
$988
$253
Sales and marketing1,618
42
8,018
141
Research and development235
236
1,816
648
General and administrative207
97
803
317
Foreign exchange gain (loss)1


94
Other income (loss), net2


2,475
Provision for income taxes(720)(156)(3,655)(1,358)
Total$1,419
$293
$7,970
$2,570
(1) Foreign exchange losses on acquisitions were $0 and $94 for the nine month periods ended September 30, 2017 and 2016, respectively
(2) Taxes levied on the transfer of acquired intellectual property were $0 and $2,475 for the nine months ended September 30, 2017 and 2016, respectively
DomesticInternationalTotal
Cash and Cash Equivalents$61$233$294
21%79%
Short-term Investments$—$91$91
100%
Cash, Cash Equivalents and Short-term Investments$61$324$385
16%84%
September 30, 2017December 31,Increase/
(In thousands)(unaudited)2016(Decrease)


Working capital$590,150
$574,572
$15,578
Cash and cash equivalents (1)294,194
285,283
8,911
Short-term investments (1)91,223
73,117
18,106
Total cash, cash equivalents and short-term investments$385,417
$358,400
$27,017
(1) Included in working capital
Nine Months Ended September 30,
(In thousands)(unaudited)
20172016
Cash provided by operating activities$147,456
$150,016
Cash used in investing activities(77,132)(31,462)
Cash used in financing activities(69,181)(72,534)
Effect of exchange rate changes on cash7,768
3,503
Net change in cash and cash equivalents8,911
49,523
Cash and cash equivalents at beginning of year285,283
251,129
Cash and cash equivalents at end of period$294,194
$300,652
our business, product, capital expenditure and research and development plans, and product and technology roadmaps;
general economic and political uncertainty and specific conditions in the markets we address, including any volatility in the industrial economy in the various geographic regions in which we do business;
the inability of certain of our customers who depend on credit to have access to their traditional sources of credit to finance the purchase of products from us, which may lead them to reduce their level of purchases or to seek credit or other accommodations from us;
increased manufacturing costs resulting from component supply shortages or component price fluctuations;
the timing, cost or outcome of any future intellectual property litigation or commercial disputes;
the ability of competitors to more fully leverage low cost geographies for manufacturing or distribution;
the difficulty in maintaining margins, including the higher margins traditionally achieved in international sales;
the timing, cost or outcome of any future intellectual property litigation or commercial disputes;
interruption to transportation flows for delivery of components to us and finished goods to our customers;
burdens of complying with additional or more complex VAT and customs regulations; and,
concentration of inventory increasing the risks associated with fire, natural disasters and logistics disruptions to customer order fulfillment.

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