What changed in this filing

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Item 1A. Risk Factors

2021-12-03 compared with 2021-08-27 · 95 added, 93 removed, 649 unchanged (22% of the section changed)

10 unchanged sentences

• risks related to the impact of the COVID-19 pandemic or other future pandemics, on the global economy and on our customers, suppliers, employees and business;

• risks related to our ability to successfully integrate and to realize anticipated synergies, on a timely basis or at all, in connection with the Inphi merger and other strategic transactions;

• risks related to our ability to successfully integrate and to realize anticipated synergies, on a timely basis or at all, in connection with the Inphi merger, Innovium acquisition and other strategic transactions;

• risks related to our ability to scale our business;

• risks related to the extension of lead time due to supply chain disruptions, component shortages that impact the production of our products, and constrained availability from other electronic suppliers impacting our customers' ability to ship their products, which in turn may adversely impact our sales to those customers;

• risks related to changes in general economic conditions, such as the impact of Brexit on the economy in the E.U., political conditions, such as the tariffs and trade restrictions with China and other foreign nations, and specific conditions in the end markets we address, including the continuing volatility in the technology sector and semiconductor industry;

• risks related to changes in general economic conditions or political conditions, such as the tariffs and trade restrictions with China and other foreign nations, and specific conditions in the end markets we address, including the continuing volatility in the technology sector and semiconductor industry;

• risks related to our debt obligations;

1 unchanged sentence

• risks related to cancellations, rescheduling or deferrals of significant customer orders or shipments, as well as the ability of our customers to manage inventory;

• risks related to the effects of any future acquisitions, divestitures or significant investments, such as our proposed acquisition of Innovium, Inc.;

• risks related to the effects of any future acquisitions, divestitures or significant investments;

• risks related to the highly competitive nature of the end markets we serve, particularly within the semiconductor and infrastructure industries;

10 unchanged sentences

• risks related to our ability to attract, retain and motivate a highly skilled workforce, especially managerial, engineering, sales and marketing personnel;

• risks related to our ESG programs;

• risks related to severe financial hardship or bankruptcy of one or more of our major customers;

10 unchanged sentences

We face risks related to the COVID-19 pandemic which currently has, and may continue in the future to, significantly disrupt and adversely impact our manufacturing, research and development, operations, sales and financial results.

Although restrictions have eased in some places, the ongoing pandemic, including large

outbreaks, resurgences of COVID-19 in various regions (such as the U.S., various countries throughout Asia and India) and appearances of new variants of the virus, has resulted, and may continue to result, in their reinstitution.

Although restrictions have eased in some places, the ongoing pandemic, including large outbreaks, resurgences of COVID-19 in various regions (such as the U.S., various countries throughout Asia and India) and appearances of new variants of the virus, has resulted, and may continue to result, in their reinstitution.

In addition, although many countries have vaccinated large segments of their population, COVID-19 continues to disrupt business activities, trade, and supply chains in many countries.

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If we are unable to retain and motivate our current personnel or attract additional qualified personnel, our ability to develop and successfully market our products could be harmed .”

We may become subject to claims or lawsuits by employees, customers, suppliers or other parties regarding actions we take in our operations in response to the COVID-19 pandemic.

Our efforts to manage these impacts may be unsuccessful, and the ultimate impact of the COVID-19 pandemic also depends on factors beyond our knowledge or control, including the duration, severity and geographic scope of the COVID-19 pandemic, the availability, widespread distribution and use of safe and effective vaccines and the actions taken to contain its spread and mitigate its public health and economic effects.

We may become subject to claims or lawsuits by employees, customers, suppliers or other parties regarding actions we take in our operations in response to the COVID-19 pandemic including our vaccination policies.

Our efforts to manage these impacts may be unsuccessful, and the ultimate impact of the COVID-19 pandemic also depends on factors beyond our knowledge or control, including the duration, severity and geographic scope of the COVID-19 pandemic, the availability, widespread distribution, acceptance, and use of safe and effective vaccines and the actions taken to contain its spread and mitigate its public health and economic effects.

Due to the uncertainty regarding the severity and duration of the COVID-19 pandemic and related public health measures and macroeconomic impacts, at this time we are unable to predict the full impact of the COVID-19 pandemic on our business, financial condition, operating results and cash flows.

9 unchanged sentences

The benefits we expect to realize from the Mergers will depend, in part, on our ability to integrate the businesses successfully and efficiently.

See also, “ Failure to successfully integrate the businesses of Marvell and Inphi in the expected time frame may adversely affect our future results .”

See also, “ Failure to successfully integrate the businesses of Marvell with the businesses of Inphi and Innovium in the expected time frame may adversely affect our future results .”

Furthermore, uncertainties with respect to integration related to the Mergers may cause our current and prospective employees to experience uncertainty about their futures.

7 unchanged sentences

Further, our failure to identify or accurately assess the magnitude of certain liabilities we are assuming in the transaction could result in unexpected litigation or regulatory exposure, unfavorable accounting charges, unexpected increases in taxes due, a loss of anticipated tax benefits or other adverse effects on our business, results of operations, financial condition or cash flows.

Failure to successfully integrate the businesses of Marvell and Inphi in the expected time frame may adversely affect our future results.

We entered into the Merger Agreement with Inphi with the expectation that the Mergers will result in various benefits to us, including certain cost savings and operational efficiencies or synergies.

To realize these anticipated benefits, the businesses of Marvell and Inphi must be successfully integrated.

Historically, Marvell and Inphi have been independent companies, and they were operated as such until the completion of the Mergers.

The integration may be complex and time consuming and may require substantial resources and effort.

Our management may face significant challenges in consolidating the operations of Marvell and Inphi, integrating the technologies, procedures, and policies, as well as addressing the different corporate cultures of the two companies and retaining key personnel.

If the companies are not successfully integrated, the anticipated benefits of the Mergers may not be realized fully or at all or may take longer to realize than expected.

WE ARE SUBJECT TO RISKS ASSOCIATED WITH OUR STRATEGIC TRANSACTIONS

Failure to successfully integrate the businesses of Marvell with the businesses of Inphi and Innovium in the expected time frame may adversely affect our future results.

We entered into acquisition agreements with Inphi and Innovium with the expectation that these transactions will result in various benefits to us, including certain cost savings and operational efficiencies or synergies.

To realize these anticipated benefits, the businesses of Marvell and Inphi and Innovium must be successfully integrated.

Historically, these companies have been independent companies, and they were operated as such until the completion of the transactions.

Integration may be complex and time consuming and may require substantial resources and effort.

Our management may face significant challenges in consolidating operations, integrating the technologies, procedures, and policies, as well as addressing the different corporate cultures of the three companies and retaining key personnel.

If the companies are not successfully integrated, the anticipated benefits of the transactions may not be realized fully or may take longer to realize than expected.

WE ARE SUBJECT TO RISKS ASSOCIATED WITH THE RAPID GROWTH OF THE COMPANY AND WITH OUR STRATEGIC TRANSACTIONS

We may not be able to scale our business quickly enough to meet our customers’ needs or in an efficient manner, which could harm our operating results.

Over the last few years, the Company has rapidly increased in size.

As a result, we have to appropriately scale our business, internal systems and organization, including our ability to attract and retain personnel, and continue to improve our operational, financial and management controls, reporting systems and procedures, to serve our growing customer base.

Any failure of, or delay in, these efforts could negatively impact our performance and financial results.

Even if we are able to upgrade our systems and expand our staff, any such expansion will likely be expensive and complex, requiring management’s time and attention.

We could also face inefficiencies, reduced productivity or operational failures as a result of our efforts to scale our business.

Moreover, there are inherent risks associated with upgrading, improving and expanding our information technology systems.

We cannot be sure that the expansion and improvements to our business operations will be fully or effectively implemented on a timely basis, if at all.

These efforts may adversely affect our financial results

Recent, current and potential future acquisitions, strategic investments, divestitures, mergers or joint ventures may subject us to significant risks, any of which could harm our business.

7 unchanged sentences

• On April 20, 2021, we completed the acquisition of Inphi;

• On August 3, 2021, we announced the potential acquisition of Innovium, Inc.

(which is subject to customary closing conditions).

• On October 5, 2021, we completed the acquisition of Innovium

Mergers, acquisitions and divestitures include a number of risks and present financial, managerial and operational challenges.

3 unchanged sentences

Our acquisitions may not further our business strategy as we expected, we may not integrate an acquired company or technology as successfully as we expected, we may impose our business practices that adversely impact the acquired business or we may overpay for, or otherwise not realize the expected return on our investments, each or all of which could adversely affect our business or operating results and potentially cause impairment to assets that we recorded as a part of an acquisition including intangible assets and goodwill.

In addition, the use of our shares to finance an acquisition, such as our proposed acquisition of Innovium, will result in an increase in the number of outstanding shares and will reduce the ownership percentage of each of our outstanding stockholders.

In addition, the use of our shares to finance an acquisition, such as our recent acquisition of Innovium, will result in an increase in the number of outstanding shares and will reduce the ownership percentage of each of our outstanding stockholders.

When we decide to sell assets or a business, we may have difficulty selling on acceptable terms in a timely manner or at all.

8 unchanged sentences

Recent or potential future acquisitions involve a number of risks, including, among others, those associated with our use of a significant portion of our cash and other financial risks.

We used a significant portion of our cash and incurred substantial indebtedness in connection with the financing of our acquisition of Cavium, which was completed in fiscal year 2019.

In fiscal year 2020, we used cash and indebtedness to finance our acquisition of Aquantia and indebtedness to finance our acquisition of Avera.

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The ability of each of our manufacturing partners to provide us with semiconductor devices is limited by its available capacity and existing obligations.

When demand is strong, availability of our partners' capacity may be constrained or not available, and with limited exceptions such as our wafer supply capacity reservation agreement with one of our suppliers , our vendors are not obligated to perform services or supply products to us for any specific period, in any specific quantities, or at any specific price, except as may be provided in a particular purchase order.

When demand is strong, availability of our partners' capacity may be constrained or not available, and with certain exceptions our vendors are not obligated to perform services or supply products to us for any specific period, in any specific quantities, or at any specific price, except as may be provided in a particular purchase order.

We place our orders on the basis of our customers’ purchase orders or our forecast of customer demand, and most of our manufacturing partners can allocate capacity to the production of other companies’ products and reduce deliveries to us on short notice.

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In addition, our testing and assembly partners may be single sourced and it may be difficult for us to transition to other partners for these services.

In order to secure sufficient capacity when demand is high and to mitigate the risks described in the foregoing paragraph, we may enter into various arrangements with our manufacturing partners or other suppliers that could be costly and harm our results of operations, such as nonrefundable deposits with, or loans to, such parties in exchange for capacity commitments, or contracts that commit us to purchase specified quantities of components over extended periods.

In order to secure sufficient capacity when demand is high and to mitigate the risks described in the foregoing paragraph, we have entered into, and in the future may enter into, various arrangements with certain manufacturing partners or other suppliers that could be costly and harm our results of operations, such as nonrefundable deposits with, or loans to, such parties in exchange for capacity commitments, or contracts that commit us to purchase specified quantities of components over extended periods.

We may not be able to make any such arrangement in a timely fashion or at all, and any arrangements may be costly, reduce our financial flexibility, and not be on terms favorable to us.

1 unchanged sentence

These penalties may be expensive and could harm our financial results.

For example, on July 13, 2021, the Company entered into a wafer supply capacity reservation agreement with a supplier to reserve manufacturing supply capacity due to the current global supply shortage environment.

Under the agreement, the Company has agreed to pay certain fees as well as to meet an annual wafer purchase commitment in exchange for the supplier's guarantee to produce a specific minimum quantity of wafers for each of the calendar years from 2022 through 2025.

In addition, subsequent to quarter end the Company entered into a capacity reservation agreement with another supplier to reserve additional materials, assembly, and test capacity.

Under the agreement, the Company is required to make certain refundable deposits and to meet annual purchase commitments for calendar years from 2022 through 2026 in exchange for the supplier’s guarantee to produce material and reserve capacity for a minimum quantity of devices.

Recent supply shortages in the semiconductor industry of multi-layer complex substrates, IC packaging capacity and fab constraints have resulted in increased lead times, inability to meet demand, and increased costs during calendar 2020, and these supply constraints are currently expected to continue throughout calendar 2021 and into calendar 2022 .

Recent supply shortages in the semiconductor industry of multi-layer complex substrates, IC packaging capacity and fab constraints have resulted in increased lead times, inability to meet demand, and increased costs since calendar 2020, and these supply constraints are currently expected to continue into calendar 2022 .

Of these shortages, ABF substrates are the most constrained at this time and most of these suppliers are located in Japan and Taiwan.

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Department of Commerce’s Bureau of Industry and Security, has dampened demand for our products, adding to the already challenging macroeconomic environment.

Sales to an increasing number of our customers require licenses in order for us to export our products;

there can be no assurances that such licenses will be approved by the U.S.

For example, we have received notices from the U.S.

government that it intends to deny some of our requests for licenses.

Due to the U.S.

Government restricting sales to certain customers in China, sales to some of our customers require licenses in order for us to export our products;

however, there can be no assurances that such licenses will be approved by the U.S.

Moreover, concerns that U.S.

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We typically sell products to customers in China pursuant to purchase orders rather than long term purchase commitments.

Customers in China can generally cancel or defer purchase orders on short notice without incurring a penalty and, therefore, they may be more likely to do so while the tariffs and trade restrictions are in effect.

Some customers in China may be able to cancel or defer purchase orders on short notice without incurring a penalty and, therefore, they may be more likely to do so while the tariffs and trade restrictions are in effect.

See also, risk Factor entitled “ We are subject to order and shipment uncertainties.

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The current U.S.

presidential administration’s policy goals are not fully understood yet, but such policies may include some changes to the status quo, which may cause damage to our business.

presidential administration’s policy goals are not fully understood yet, but it has continued the import tariffs and export restrictions against certain foreign manufacturers initiated by the prior administration.

Political changes and trends such as populism, protectionism, economic nationalism and sentiment toward multinational companies and resulting changes to trade, tax or other laws and policies may be disruptive to our businesses.

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In addition, many of our customers are located outside of the United States, primarily in Asia, which further exposes us to foreign risks.

Sales shipped to customers with operations in Asia represented approximately 80% and 79% of our net revenue in the three months ended July 31, 2021 and August 1, 2020, respectively.

Sales shipped to customers with operations in Asia represented approximately 79% and 81% of our net revenue in the three months ended October 30, 2021 and October 31, 2020, respectively.

We also have substantial operations outside of the United States.

5 unchanged sentences

• volatile global economic conditions, including downturns in which some competitors may become more aggressive in their pricing practices, which would adversely impact our gross margin;

• compliance with domestic and foreign export and import regulations, including pending changes thereto, and difficulties in obtaining and complying with domestic and foreign export, import and other governmental approvals, permits and licenses;

• compliance with domestic and foreign export and import regulations including deemed export restrictions, tariffs, quotas and other trade barriers and restrictions, including pending changes thereto, and difficulties in obtaining and complying with domestic and foreign export, import and other governmental approvals, permits and licenses;

• local laws and practices that favor local companies, including business practices in which we are prohibited from engaging by the Foreign Corrupt Practices Act and other anti-corruption laws and regulations;

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Such future developments, particularly in those end markets that account for more significant portions of our revenues, could harm our business and our results of operations.

In addition, we may be less likely to negotiate as favorable terms with larger customers whether those customers resulted from customer consolidation, merger integrations or other reasons, and any such less favorable terms could harm our business and our results of operations.

We are subject to order and shipment uncertainties.

2 unchanged sentences

We typically sell products pursuant to purchase orders rather than long-term purchase commitments.

Customers can generally cancel or defer purchase orders on short notice without incurring a significant penalty.

Some of our customers may cancel or defer purchase orders on short notice without incurring a significant penalty.

Due to their inability to predict demand or other reasons, some of our customers may accumulate excess inventories and, as a consequence, defer purchase of our products.

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This creates the risk that our customers may decide to cancel or change product plans for products incorporating our semiconductor solutions prior to completion, which makes it even more difficult to forecast customer demand.

In addition, while many of our customers are subject to purchase orders or other agreements that do not allow for cancellation, there can be no assurance that these customers will honor these contract terms and cancellation of these orders may adversely affect our business operations and demand forecast which is the basis for us to have products made.

Our products are incorporated into complex devices and systems, which creates supply chain cross-dependencies.

22 unchanged sentences

In addition, the semiconductor industry has experienced increased consolidation over the past several years.

For example, NVIDIA Corporation acquired Mellanox Technologies on April 27, 2020 and Infineon acquired Cypress Semiconductors on April 16, 2020.

In July 2020, Analog Devices Inc.

announced its intent to merge with Maxim Integrated Products Inc.

For example, NVIDIA Corporation acquired Mellanox Technologies on April 27, 2020, Infineon acquired Cypress Semiconductors on April 16, 2020, and Analog Devices Inc.

acquired Maxim Integrated Products Inc.

on August 26, 2021.

In September 2020, NVIDIA announced its intent to acquire Arm Limited.

31 unchanged sentences

Therefore, the income from all foreign subsidiaries is now subject to the U.S.

provisions applicable to Global Intangible Low Taxed Income (“GILTI”), which generally requires for GILTI income to be included in the taxable income of U.S.

currently has a federal tax rate of 21%, and that federal income tax rate could be increased in the future by the current Congress and presidential administration, which has proposed raising it to as high as 28%.

This proposed increased tax rate could cause our overall effective tax rate to increase significantly versus our effective tax rate when we were a Bermuda-domiciled company, which could materially impact our financial results, including our earnings and cash flow.

Changes in existing taxation benefits, rules or practices may also have a significant effect on our reported results.

Both the U.S.

Congress and the G-20 (Group of Twenty Finance Ministers and Central Bank Governors) may consider legislation affecting the taxation of foreign corporations and such legislation if enacted might adversely affect our future tax liabilities and have a material impact on our results of operations.

In addition, in prior years, we have entered into incentive agreements in certain foreign jurisdictions that if certain criteria are met, the foreign jurisdiction will provide a more favorable tax rate than their current statutory rate.

For example, our Singapore subsidiary qualifies for the Development and Expansion Incentive until June 2024, which is effective until June 2024, and generally can be extended.

Furthermore, under the Israeli Encouragement law of “approved or benefited enterprise,” our subsidiary in Israel, Marvell Israel (M.I.S.L) Ltd., is entitled to, and has certain existing programs that qualify as, approved and benefited tax programs that include reduced tax rates and exemption of certain income through fiscal 2027.

Receipt of past and future benefits under tax agreements may depend on our ability to fulfill commitments regarding employment of personnel or performance of specified activities in the applicable jurisdictions.

Changes in our business plans, including divestitures, could result in termination of an agreement or loss of benefits thereunder.

If any of our tax agreements in any of these foreign jurisdictions were terminated, our results of operations could be harmed.

The Organization for Economic Cooperation and Development has been working on a Base Erosion and Profit Sharing Project, and issued in 2015, and is expected to continue to issue, guidelines and proposals that may change various aspects of the existing framework under which our tax obligations are determined in some of the countries in which we do business.

We can provide no assurance that changes in tax laws and additional investigations as a result of this project would not have an adverse tax impact on our international operations.

In addition, the European Union (“EU”) has initiated its own measures along similar lines.

In December 2017, the EU identified certain jurisdictions (including Bermuda and Cayman Islands) which it considered to have a tax system that facilitated offshore structuring by attracting profits without commensurate economic activity.

To avoid EU “blacklisting”, both Bermuda and Cayman Islands introduced new legislation in December 2018, which came into force on January 1, 2019.

These laws required Bermuda and Cayman companies carrying on one or more “relevant activity” (including:

banking, insurance, fund management, financing, leasing, headquarters, shipping, distribution and service center, intellectual property or holding company) to maintain a substantial economic presence in Bermuda to comply with the economic substance requirements.

It is still not clear how the Bermuda and Cayman Islands authorities will interpret and enforce these new rules.

To the extent that we are required to maintain more of a presence in Bermuda or the Cayman Islands, such requirements will increase our costs either directly in those locations or indirectly as a result of increased costs related to moving our operations to other jurisdictions.

In addition, both in the current period and in a prior period, the Company transferred certain intellectual property to a related entity in Singapore.

The impact to the Company was determined based on our determination of the fair value of this property, which required management to make significant estimates and to apply complex tax regulations in multiple jurisdictions.

In a future period, local tax authorities may challenge the fair value determinations made by the Company, which could adversely impact our expected tax benefits from this transaction.

provisions applicable to Global Intangible Low Taxed Income (“GILTI”), which generally requires GILTI income to be included in the taxable income of U.S.

currently has a federal corporate tax rate of 21%.

That federal income tax rate could be increased by the Congress and presidential administration, which have proposed various tax increases, including raising the corporate tax rate to as high as 28%, adjusting the GILTI regime, enacting a new 15% minimum tax for certain US-based companies with book income exceeding $1 billion, as well as a 1% excise tax on corporate stock repurchases effective for repurchases after December 31, 2021, which would increase the costs associated with repurchasing shares of our common stock.

Ultimate enactment into law of these proposals, could cause our overall effective tax rate to increase and could materially affect our financial results, including our earnings and cash flow.

The Organization for Economic Cooperation and Development (the “OECD”) has been working on a Base Erosion and Profit Sharing Project, and since 2015 has been issuing guidelines and proposals with respect to various aspects of the existing framework under which our tax obligations are determined in the countries in which we do business.

In October 2021 the OECD announced that 136 member jurisdictions (including the United States, Singapore, and Bermuda) have politically committed to potential changes to the international corporate tax system, including enacting a minimum tax rate of at least 15%.

We calculate our income taxes based on currently enacted laws.

Because of increasing focus by government taxing authorities on multinational companies, the tax laws of certain countries in which we do business could change on a prospective or retroactive basis, and any such changes could increase our liabilities for taxes, interest and penalties, and could materially impact our financial results, including our earnings and cash flow.

In addition, in prior years, we entered into incentive agreements in certain foreign jurisdictions that provide for reduced tax rates in such jurisdictions if certain criteria are met.

For example, our Singapore subsidiary has a Development and Expansion Incentive (“DEI”) until June 2024, which we believe generally can be extended to future periods.

In addition, under the Israeli Encouragement law of “approved or benefited enterprise,” our subsidiary in Israel, Marvell Israel (M.I.S.L) Ltd., is entitled to reduced tax rates and exemption of certain income from taxation through fiscal 2027.

Receipt of past and future benefits under tax agreements and incentives may depend on our ability to fulfill commitments regarding employment of personnel, investment, or performance of specified activities in the applicable jurisdictions.

Changes in our business plans, including divestitures, could result in termination of an agreement or loss of tax benefits thereunder.

If any of our tax agreements in any of these foreign jurisdictions were terminated, our results of operations and our financial position could be harmed.

In addition, in prior periods, the Company transferred certain intellectual property to a related entity in Singapore.

The impact to the Company was based on our determination of the fair value of this property, which required management to make significant estimates and to apply complex tax regulations in multiple jurisdictions.

In future periods, local tax authorities may challenge the Company’s valuations of these assets, which could reduce our expected tax benefits from these transactions.

Our profitability and effective tax rate could be impacted by unexpected changes to our statutory income tax rates or income tax liabilities.

Such changes might include changes in tax law or regulations, changes to our geographic mix of earnings, changes in the valuation of deferred tax assets and liabilities, discrete items, changes in our supply chain and changes due to audit assessments.

In particular, the tax benefits associated with our transfer of intellectual property to Singapore are sensitive to future profitability and taxable income in Singapore, audit assessments, and changes in applicable tax law.

Our current corporate effective tax rate fluctuates significantly from period to period, and is based upon the application of currently applicable income tax laws, regulations and treaties, as well as current judicial and administrative interpretations of these income tax laws, regulations and treaties, in various jurisdictions.

Such changes could result from various items, including changes in tax laws or regulations, changes to our geographic mix of earnings, changes in the valuation of our deferred tax assets and liabilities, discrete items, changes in our supply chain, and changes due to audit assessments.

In particular, the tax benefits associated with our transfer of intellectual property to Singapore are sensitive to our future profitability and taxable income in Singapore, audit assessments, and changes in applicable tax law.

Our current corporate effective tax rate fluctuates significantly from period to period, and is based on the application of currently applicable income tax laws, regulations and treaties, as well as current judicial and administrative interpretations of these income tax laws, regulations and treaties, in various jurisdictions.

WE ARE SUBJECT TO RISKS RELATED TO OUR DEBT OBLIGATIONS

Our indebtedness could adversely affect our financial condition and our ability to raise additional capital to fund our operations and limit our ability to react to changes in the economy or our industry.

On July 6, 2018, in connection with our acquisition of Cavium, we incurred substantial indebtedness pursuant to a Credit Agreement (the “2018 Credit Agreement”).

The 2018 Credit Agreement provided for a $900.0 million Term Loan (the “2018 Term Loan”).

During the first quarter of fiscal 2022, the entire outstanding principal balance of the 2018 Term Loan was repaid in full and the 2018 Credit Agreement was terminated.

See “Note 5 - Debt” for discussion of the debt financing in the Notes to Consolidated Financial Statements set forth in Part II, Item 8 of the Annual Report on Form 10-K.

We paid the cash portion of the consideration for the Mergers and other fees and expenses required to be paid in connection with the Mergers from cash on hand and borrowings.

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The 2020 Term Loan Facility is evidenced by a credit agreement, dated December 7, 2020 (the “2020 Term Loan Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent and a lender, and the other lenders from time to time party thereto.

As of October 30, 2021, the Company had a balance of $1.6 billion on the term loan facility.

In addition to the 2020 Term Loan Agreement, on December 7, 2020, we entered into a revolving credit agreement with JPMorgan Chase Bank, N.A., as administrative agent and a lender, and the other lenders from time to time party thereto (“Revolving Credit Agreement” and together with the 2020 Term Loan Agreement, the “Credit Agreements”), which provides for a $750 million revolving credit facility.

The commitments for the $2.5 billion senior 364-day bridge term loan facility, as evidenced by a commitment letter dated as of October 29, 2020, with JPMorgan Chase Bank, N.A., and the other financial institutions that have joined thereto, terminated in full on the closing date of the Mergers.

On June 22, 2018, we completed a public offering of (i) $500.0 million aggregate principal amount of the Company’s 4.200% Senior Notes due 2023 (the “2023 Notes”) and (ii) $500.0 million aggregate principal amount of the Company’s 4.875% Senior Notes due 2028 (the “2028 Notes” and, together with the 2023 Notes, the “Senior Notes”).

On May 4, 2021, the Company completed exchange offers for approximately $434 million in aggregate principal amount of our 2023 Notes and approximately $479 million in aggregate principal amount of our 2028 Notes, and such Senior Notes were subsequently cancelled.

We are obligated to pay interest on the outstanding Senior Notes on June 22 and December 22 of each year.

The 2023 Notes will mature on June 22, 2023 and the 2028 Notes will mature on June 22, 2028.

On April 12, 2021, the Company completed an offering of (i) $500.0 million aggregate principal amount of 2026 Senior Notes, (ii) $750.0 million aggregate principal amount of 2028 Senior Notes and (iii) $750.0 million aggregate principal amount of 2031 Senior Notes.

In addition, on May 4, 2021, the Company issued (i) $433.8 million aggregate principal amount of MTI 2023 Notes and (ii) $479.4 million aggregate principal amount of MTI 2028 Notes in the Exchange Offers.

As of October 30, 2021, the Company had $2.0 billion aggregate principal amount of MTI Senior Notes outstanding, $913.2 million aggregate principal amount of MTI Exchange Notes outstanding and $86.7 million aggregate principal amount of MTG Senior Notes outstanding.

On October 8, 2021, the Senior Notes issued on April 12, 2021 were exchanged for new notes.

The terms of the new notes issued in the exchange are substantially identical to the notes issued in April 2021, except that the new notes are registered under the Securities Act of 1933 and the transfer restrictions and registration rights applicable to the Senior Notes issued in April 2021 do not apply to the new notes.

Our indebtedness could have important consequences to us including:

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• making it more difficult to borrow additional funds in the future to fund growth, acquisitions, working capital, capital expenditures and other purposes.

Although the Credit Agreements contain restrictions on our ability to incur additional indebtedness and the indenture governing the Senior Notes contains restrictions on creating liens and entering into certain sale-leaseback transactions, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness, liens or sale-leaseback transactions incurred in compliance with these restrictions could be substantial.

The Credit Agreements and the indenture governing the Senior Notes contain customary events of default upon the occurrence of which, after any applicable grace period, the lenders would have the ability to immediately declare the loans due and payable in whole or in part.

Although the Credit Agreements contain restrictions on our ability to incur additional indebtedness and the indentures governing the MTI Notes (together, the “MTI Indentures”) contain restrictions on creating liens and entering into certain sale-leaseback transactions, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness, liens or sale-leaseback transactions incurred in compliance with these restrictions could be substantial.

The Credit Agreements, the MTI Indentures and the MTG Indenture contain customary events of default upon the occurrence of which, after any applicable grace period, the lenders would have the ability to immediately declare the loans due and payable in whole or in part.

In such event, we may not have sufficient available cash to repay such debt at the time it becomes due, or be able to refinance such debt on acceptable terms or at all.

Any of the foregoing could materially and adversely affect our financial condition and results of operations.

We may not be able to access cash or to incur additional indebtedness if the COVID-19 pandemic causes the closure of banks for an extended period of time or if there is a sudden increase in requests for indebtedness at one time by many potential borrowers which could overwhelm the banking industry.

Adverse changes to our debt ratings could negatively affect our ability to raise additional capital.

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A ratings downgrade could adversely impact our ability to access debt markets in the future and increase the cost of current or future debt and may adversely affect our share price.

The Credit Agreements and the indenture governing the Senior Notes impose restrictions on our business.

The Credit Agreements and the indenture governing the Senior Notes each contains a number of covenants imposing restrictions on our business.

The Credit Agreements and the MTI Indentures impose restrictions on our business.

The Credit Agreements and the MTI Indentures each contains a number of covenants imposing restrictions on our business.

These restrictions may affect our ability to operate our business and may limit our ability to take advantage of potential business opportunities as they arise.

The restrictions, among other things, restrict our ability and our subsidiaries’ ability to create or incur certain liens, incur or guarantee additional indebtedness, merge or consolidate with other companies, pay dividends, transfer or sell assets and make restricted payments.

These restrictions are subject to a number of limitations and exceptions set forth in the Credit Agreements and the indenture governing the Senior Notes.

These restrictions are subject to a number of limitations and exceptions set forth in the Credit Agreements and the MTI Indentures governing the Senior Notes.

Our ability to meet the leverage ratio set forth in the Credit Agreements may be affected by events beyond our control.

The foregoing restrictions could limit our ability to plan for, or react to, changes in market conditions or our capital needs.

We do not know whether we will be granted waivers under, or amendments to, our Credit Agreements or to the indenture governing the Senior Notes if for any reason we are unable to meet these requirements, or whether we will be able to refinance our indebtedness on terms acceptable to us, or at all.

We do not know whether we will be granted waivers under, or amendments to, our Credit Agreements or to the MTI Indentures if for any reason we are unable to meet these requirements, or whether we will be able to refinance our indebtedness on terms acceptable to us, or at all.

We may be unable to generate the cash flow to service our debt obligations.

We may not be able to generate sufficient cash flow to enable us to service our indebtedness, including the outstanding Senior Notes, or to make anticipated capital expenditures.

We may not be able to generate sufficient cash flow to enable us to service our indebtedness, including the outstanding Notes, or to make anticipated capital expenditures.

Our ability to pay our expenses and satisfy our debt obligations, refinance our debt obligations and fund planned capital expenditures will depend on our future performance, which will be affected by general economic, financial competitive, legislative, regulatory and other factors beyond our control.

If we are unable to generate sufficient cash flow from operations or to borrow sufficient funds in the future to service our debt, we may be required to sell assets, reduce capital expenditures, refinance all or a portion of our existing debt (including the outstanding Senior Notes) or obtain additional financing.

We cannot assure you that we will be able to refinance our debt, sell assets or borrow more money on terms acceptable to us, if at all.

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In addition, a material default on our indebtedness could suspend our eligibility to register securities using certain registration statement forms under SEC guidelines that permit incorporation by reference of substantial information regarding us, potentially hindering our ability to raise capital through the issuance of our securities and increasing our costs of registration.

We may, under certain circumstances, be required to repurchase the outstanding Senior Notes at the option of the holder.

We are required to repurchase the outstanding Senior Notes at the option of each holder upon the occurrence of a change of control repurchase event as defined in the indenture governing the Senior Notes.

However, we may not have sufficient funds to repurchase the outstanding Senior Notes in cash at the time of any change of control repurchase event.

Our failure to repurchase the outstanding Senior Notes upon a change of control repurchase event would be an event of default under the indenture governing the Senior Notes and could cause a cross-default or acceleration under certain future agreements governing our other indebtedness.

The repayment obligations under the Senior Notes may have the effect of discouraging, delaying or preventing a takeover of our company.

If we were required to pay the outstanding Senior Notes prior to their scheduled maturity, it could have a negative impact on our cash and liquidity and could impact our ability to invest financial resources in other strategic initiatives.

We may, under certain circumstances, be required to repurchase the outstanding MTI Notes at the option of the holder.

We may be required to repurchase the MTI Notes at the option of each holder upon the occurrence of a change of control repurchase event as defined in the MTI Indentures.

However, we may not have sufficient funds to repurchase the MTI Notes in cash at the time of any change of control repurchase event.

Our failure to repurchase the MTI Notes upon a change of control repurchase event would be an event of default under the MTI Indentures and could cause a cross-default or acceleration under the agreements governing our other indebtedness.

The repayment obligations under the MTI Notes may have the effect of discouraging, delaying or preventing a takeover of our company.

If we were required to repurchase the MTI Notes prior to their scheduled maturity, it could have a negative impact on our cash and liquidity and could impact our ability to invest financial resources in other strategic initiatives.

WE ARE SUBJECT TO RISKS RELATED TO OUR ASSETS

We are exposed to potential impairment charges on certain assets.

We had approximately $11.0 billion of goodwill and $6.3 billion of acquired intangible assets on our unaudited condensed consolidated balance sheet as of July 31, 2021.

We had approximately $11.4 billion of goodwill and $6.4 billion of acquired intangible assets on our unaudited condensed consolidated balance sheet as of October 30, 2021.

Under generally accepted accounting principles in the United States, we are required to review our intangible assets including goodwill for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable.

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Environmental legislation, such as the EU Directive on Restriction of Hazardous Substances (RoHS), the EU Waste Electrical and Electronic Equipment Directive (WEEE Directive) and China’s regulation on Management Methods for Controlling Pollution Caused by Electronic Information Products, may increase our cost of doing business internationally and impact our revenues from the EU, China and other countries with similar environmental legislation as we endeavor to comply with and implement these requirements.

Increasingly regulators, customers, investors, employees and other stakeholders are focusing on Environmental, Social and Governance (ESG) matters.

While we have certain ESG initiatives at the Company there can be no assurance that regulators, customers, investors, and employees will determine that these programs are sufficiently robust.

In addition, there can be no assurance that we will be able to attain our announced goals related to our ESG program, as statements regarding our ESG goals reflect our current plans and aspirations and are not guarantees that we will be able to achieve them within the timelines we announce or at all.

Actual or perceived shortcomings with respect to our ESG initiatives and reporting can impact our ability to hire and retain employees, increase our customer base, or attract and retain certain types of investors.

In addition, these parties are increasing focused on specific disclosures and frameworks related to ESG matters.

Collecting, measuring, and reporting ESG information and metrics can be costly, difficult and time consuming, is subject to evolving reporting standards, and can present numerous operational, reputational, financial, legal and other risks, any of which could have a material impact, including on our reputation and stock price.

Inadequate processes to collect and review this information prior to disclosure could be subject to potential liability related to such information.

In connection with some of our acquisitions, we have been subject to regulatory conditions imposed by the Committee on Foreign Investment in the United States (CFIUS) where we have agreed to implement certain cyber security, physical security and training measures and supply agreements to protect national security.

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Cyber-attacks on us may include viruses and worms, ransomware attacks, phishing attacks, and denial-of-service attacks.

In addition, we may be the target of email scams that attempt to acquire personal information or company assets.

In addition, we have been and may in the future be the target of email scams that attempt to acquire personal information or company assets.

We have implemented processes for systems under our control intended to mitigate risks;

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In May 2012, we declared our first quarterly cash dividend and in October 2018, we announced that our board of directors had authorized a $700 million addition to our previously existing $1.0 billion share repurchase program.

An aggregate of $1.1 billion of shares have been repurchased under that program as of July 31, 2021.

An aggregate of $1.1 billion of shares have been repurchased under that program as of October 30, 2021.

Future payment of a regular quarterly cash dividend on our common shares and future share repurchases will be subject to, among other things:

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A reduction in, a delay of, or elimination of our dividend payments or share repurchases could have a negative effect on our share price.

As of July 31, 2021, there was $564.5 million remaining available for future share repurchases of the authorization.

As of October 30, 2021, there was $564.5 million remaining available for future share repurchases of the authorization.

Our indemnification obligations and limitations of our director and officer liability insurance may have a material adverse effect on our financial condition, results of operations and cash flows.

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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.

What changed 10-Q

Item 1A. Risk Factors