2 unchanged sentences
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic reports filed with the SEC is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure.
−Removed: In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and no evaluation of controls and procedures can provide absolute assurance that all control issues and instances of
−Removed: fraud, if any, within a company have been detected.
+Added: In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and no evaluation of controls and procedures can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
Management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
5 unchanged sentences
Based upon that evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2021.
−Removed: Management’s evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2020 did not include internal controls over financial reporting that had not yet been integrated for a portion of the Home Gateway Platform Division of Intel Corporation, which we refer to as the Wi-Fi and Broadband assets business, which we acquired in a business combination in July 2020, as described below.
−Removed: Assessment of a recently acquired business may be omitted from management’s report on internal control over financial reporting in the year of acquisition under SEC guidelines.
−Removed: The omitted portion of the Wi-Fi and Broadband assets business relates to certain sales and other transactions made on our behalf by Intel Corporation under the transition services agreement and comprised approximately 5% of our total assets and 3% of our total liabilities as of December 31, 2020 and approximately 23% of total revenues and 19% of cost of goods sold for the year ended December 31, 2020.
The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by Grant Thornton LLP, an independent registered public accounting firm, and Grant Thornton LLP has issued a report on our internal control over financial reporting, which is included herein.
1 unchanged sentence
An evaluation was performed under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, to determine whether any change in our internal control over financial reporting occurred during the fiscal quarter ended December 31, 2021 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
−Removed: On July 31, 2020, we completed the acquisition of the Home Gateway Platform Division of Intel Corporation, which we refer to as the Wi-Fi and Broadband assets business.
−Removed: On September 9, 2020, we completed the acquisition of NanoSemi, Inc.
−Removed: We have completed the integration of NanoSemi into our existing system of internal control over financial reporting;
−Removed: however, we are in the process of integrating the processes, systems, and controls relating to the Wi-Fi and Broadband assets business into our existing system of internal control over financial reporting in accordance with our integration plans through the fiscal quarter ended December 31, 2020.
−Removed: We expect to complete the integration of the internal controls over financial reporting related to the Wi-Fi and Broadband assets business in 2021.
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934, as amended, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
16 unchanged sentences
We believe that our audit provides a reasonable basis for our opinion.
−Removed: Our audit of, and opinion on, the Company’s internal control over financial reporting does not include the internal control over financial reporting for the portion of the business not yet integrated from the acquisition of the Home Gateway Platform Division of Intel Corporation, which management refers to as the Wi-Fi and Broadband assets business.
−Removed: The omitted portion of the Wi-Fi and Broadband assets business relates to certain sales and other transactions made on the Company's behalf by Intel Corporation under a transition services agreement and comprises approximately 5% of total assets, 3% of total liabilities, 23% of total revenues, and 19% of total cost of goods sold as of and for the year ended December 31, 2020.
−Removed: As indicated in Management’s Report, the Wi-Fi and Broadband assets business was acquired during 2020.
−Removed: Management’s assertion on the effectiveness of the Company’s internal control over financial reporting excluded the internal control over financial reporting related to certain sales and other transactions as discussed.
Definition and limitations of internal control over financial reporting
9 unchanged sentences
OTHER INFORMATION
+Added: DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTION
+Added: Not applicable.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
5 unchanged sentences
We have adopted a code of ethics and employee conduct that applies to our board of directors and all of our employees, including our chief executive officer and principal financial officer.
−Removed: Our code of conduct is available at our website by visiting www.maxlinear.com and clicking through “Investors,” “Corporate Governance,” “Governance,” “Governance Documents,” and “Code of Conduct.” When required by the rules of the New York Stock Exchange, or NYSE, or the Securities and Exchange Commission, or SEC, we will disclose any future amendment to, or waiver of, any provision of the code of conduct for our chief executive officer and principal financial officer or any member or members of our board of directors on our website within four business days following the date of such amendment or waiver.
+Added: Our code of conduct is available at our website by visiting www.maxlinear.com and clicking through “Investors,” “Corporate Governance,” “Governance,” “Governance Documents,” and “Code of Conduct.” When required by the rules of the NASDAQ Stock Market LLC, or NASDAQ, or the Securities and Exchange Commission, or SEC, we will disclose any future amendment to, or waiver of, any provision of the code of conduct for our chief executive officer and principal financial officer or any member or members of our board of directors on our website within four business days following the date of such amendment or waiver.
The information required by Item 10 with respect to our audit committee is incorporated by reference from the information set forth under the caption “Corporate Governance and Board of Directors — Board Committees” in either an amendment to this Annual Report on Form 10-K or the 2022 Proxy Statement.
30 unchanged sentences
Exhibit Number Exhibit Title
−Removed: 2.1 Agreement and Plan of Merger and Reorganization, dated as of February 3, 2015, by and among MaxLinear, Inc., a Delaware corporation, Entropic Communications, Inc., a Delaware corporation, Excalibur Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of MaxLinear, and Excalibur Subsidiary, LLC, a Delaware limited liability company and wholly-owned subsidiary of MaxLinear (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on February 4, 2015 (File No.
−Removed: 2.2 Agreement and Plan of Merger, dated as of March 28, 2017, by and among MaxLinear, Inc., a Delaware corporation, Exar Corporation, a Delaware corporation, and Eagle Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of MaxLinear (incorporated by reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K filed on March 29, 2017 (File No.
2.1 Asset Purchase Agreement, dated as of April 5, 2020, by and among MaxLinear, Inc., a Delaware corporation, Intel Corporation, a Delaware corporation, and MaxLinear Asia Singapore Private Limited, a wholly-owned subsidiary of MaxLinear (incorporated by reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K filed on April 6, 2020 (File No.
1 unchanged sentence
333-162947)).
−Removed: 3.2 Registrant’s Amended and Restated Bylaws, as amended to date (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on November 10, 2015 (File No.
−Removed: 3.3 Registrant’s Amended and Restated Bylaws, as amended to date (incorporated by reference to Exhibit 3.2 to
−Removed: the Registrant’s Current Report on Form 8-K filed on February 16, 2017 (File No.
−Removed: 3.4 Certificate of Retirement (incorporated by reference to Exhibit 3.1 to the Amendment No.
−Removed: 1 on Form 8-A filed with the Securities and Exchange Commission on March 30, 2017 (Registration No.
+Added: 3.2 Registrant’s Amended and Restated Bylaws, as amended to date (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on April 14, 2021 (File No.
4.1 Specimen common stock certificate of Registrant (incorporated by reference to Exhibit 4.1 of the Registrant’s Amendment No.
5 unchanged sentences
333-162947)).
−Removed: +10.3 2004 Stock Plan, as amended (incorporated by reference to Exhibit 10.3 of the Registrant’s Annual Report on Form 10-K filed on February 6, 2013 (File No.
−Removed: +10.4 Form of Stock Option Agreement under the 2004 Stock Plan (incorporated by reference to Exhibit 10.4 of the Registrant’s Registration Statement on Form S-1 and all amendments thereto (File No.
−Removed: 333-162947)).
−Removed: +10.5 Amendment No.
−Removed: 1 to the form of Stock Option Agreement under the 2004 Stock Plan (incorporated by reference to Exhibit 10.5 of the Registrant’s Registration Statement on Form S-1 and all amendments thereto (File No.
−Removed: 333-162947)).
+10.3 2010 Equity Incentive Plan, as amended on December 13, 2018 (incorporated by reference to Exhibit 10.3 of the Registrant’s Current Report on Form 8-K filed on December 19, 2018 (File No.
1 unchanged sentence
+10.5 2010 Employee Stock Purchase Plan, as amended (incorporated by reference to Exhibit 10.8 of the Registrant’s Current Report on Form 8-K filed on August 15, 2016 (File No.
−Removed: +10.12 Form of Change in Control Agreement for Chief Executive Officer and Chief Financial Officer (incorporated herein by reference to Exhibit 10.12 of the Registrant's Annual Report on Form 10-K filed on February 17, 2016).
+10.6 Form of Change in Control Agreement for Executive Officers (incorporated herein by reference to Exhibit 10.13 of the Registrant's Annual Report on Form 10-K filed on February 17, 2016).
−Removed: 10.14 Lease Agreement, dated May 18, 2009, between the Registrant and JCCE - Palomar, LLC (incorporated by reference to Exhibit 10.14 of the Registrant’s Registration Statement on Form S-1 and all amendments thereto (File No.
−Removed: 333-162947)).
−Removed: Exhibit Number Exhibit Title
−Removed: †10.15 Sublease Agreement, dated May 9, 2009, between the Registrant and CVI Laser, LLC (incorporated by reference to Exhibit 10.15 of the Registrant’s Registration Statement on Form S-1 and all amendments thereto (File No.
−Removed: 333-162947)).
†10.7 Intellectual Property License Agreement, dated June 18, 2009, between the Registrant and Intel Corporation, (incorporated by reference to Exhibit 10.16 of the Registrant’s Registration Statement on Form S-1 and all amendments thereto (File No.
1 unchanged sentence
+†10.8 Employment Offer Letter, dated November 9, 2012, between the Registrant and Will Torgerson (incorporated by reference to Exhibit 10.17 of the Registrant’s Annual Report on Form 10-K filed on February 6, 2013 (File No.
−Removed: †10.18 Distributor Agreement, dated June 5, 2009, between the Registrant and Moly Tech Limited (incorporated by reference to Exhibit 10.18 of the Registrant’s Registration Statement on Form S-1 and all amendments thereto (File No.
−Removed: 333-162947)).
−Removed: †10.19 Distributor Agreement, dated October 3, 2005, between the Registrant and Tomen Electronics Corporation (incorporated by reference to Exhibit 10.19 of the Registrant’s Registration Statement on Form S-1 and all amendments thereto (File No.
−Removed: 333-162947)).
−Removed: †10.20 Distributor Agreement, dated August 19, 2009, between the Registrant and Lestina International Ltd.
−Removed: (incorporated by reference to Exhibit 10.20 of the Registrant’s Registration Statement on Form S-1 and all amendments thereto (File No.
−Removed: 333-162947)).
−Removed: +10.21 MaxLinear, Inc.
−Removed: Executive Bonus Plan, as amended (incorporated herein by reference to Exhibit 10.21 of the Registrant’s Annual Report on Form 10-K filed on February 17, 2016).
−Removed: +10.22 Employment Offer Letter, dated April 22, 2011, between the Registrant and Michael LaChance (incorporated by reference to Exhibit 10.22 of the Registrant’s Annual Report on Form 10-K filed on March 14, 2012 (File No.
−Removed: 10.23 Stock Repurchase Agreement, dated August 21, 2012, by and among the Registrant, Mission Ventures III, L.P., Mission Ventures Affiliates III, L.P., and U.S.
−Removed: Venture Partners VIII, L.P.
−Removed: (incorporated by reference to Exhibit 10.23 of the Registrant’s Current Report on Form 8-K filed on August 22, 2012 (File No.
−Removed: 10.24 Stock Repurchase Agreement, dated October 31, 2012, by and among the Registrant, U.S.
−Removed: Venture Partners VIII, L.P, USVP VIII Affiliates Fund, L.P., USVP Entrepreneur Partners VIII-A, L.P.
−Removed: and USVP Entrepreneur Partners VIII-B, L.P.
−Removed: (incorporated by reference to Exhibit 10.24 of the Registrant’s Current Report on Form 8-K filed on October 31, 2012 (File No.
10.9 Lease Agreement, dated December 17, 2013, between Registrant and The Campus Carlsbad, LLC (incorporated by reference to Exhibit 10.26 of the Registrant’s Annual Report on Form 10-K filed on February 7, 2014 (File No.
−Removed: 10.28 Form of MaxLinear Voting Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on February 4, 2015 (File No.
−Removed: 10.29 Form of Entropic Voting Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on February 4, 2015 (File No.
10.10 First Amendment to Lease, dated May 6, 2015, between Registrant, on the one hand, and Brookwood CB I, LLC and Brookwood CB II, LLC, as tenants in common and successors-in-interest to The Campus Carlsbad, LLC, on the other hand (incorporated by reference to Exhibit 10.1 of Registrant’s Quarterly Report on Form 10-Q filed on August 10, 2015 (File No.
−Removed: +10.31 Entropic Communications, Inc.
−Removed: 2007 Equity Incentive Plan and Form of Option Agreement, Form of Option Grant Notice thereunder and Notice of Exercise (incorporated herein by reference to Entropic Communication, Inc.’s Annual Report on Form 10-K filed on March 3, 2008 (File No.
−Removed: +10.32 Entropic Communications, Inc.
−Removed: 2007 Non-Employee Directors’ Stock Option Plan and Form of Option Agreement, Forms of Grant Notice, and Notice of Exercise thereunder (incorporated herein by reference to Entropic Communications, Inc.’s Registration Statement on Form S-1 filed on July 27, 2007 (No.
−Removed: 333-144899)).
10.11 Lease Agreement, dated November 11, 2015, between Registrant and The Northwestern Mutual Life Insurance Company (incorporated herein by reference to Exhibit 10.33 of the Registrant’s Annual Report on Form 10-K filed on February 17, 2016).
−Removed: 10.34 Asset Purchase Agreement, by and between the Company and Microsemi, dated as of April 28, 2016 (incorporated herein by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on April 28, 2016).
−Removed: Exhibit Number Exhibit Title
−Removed: 10.35 Asset Purchase Agreement, dated as of May 9, 2016, by and between the Registrant and Broadcom (incorporated herein by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on May 9, 2016).
+10.12 Employment Promotion Letter, dated February 11, 2016, between the Registrant and Connie Kwong (incorporated herein by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 10-Q filed on May 9, 2016).
1 unchanged sentence
10.14 Credit Agreement, dated as of May 12, 2017, by and among MaxLinear, Inc., the lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (incorporated by references to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on May 12, 2017 (File No.
+Added: Exhibit Number Exhibit Title
10.15 Security Agreement, dated as of May 12, 2017, by and among MaxLinear, Inc., the subsidiary guarantors from time to time party thereto, and JPMorgan Chase Bank, N.A., as collateral agent (incorporated by references to Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed on May 12, 2017 (File No.
10 unchanged sentences
1, dated as of July 31, 2020, by and among MaxLinear, the guarantors party thereto, the lenders party thereto, MUFG Bank, Ltd., as administrative agent, and MUFG as collateral agent.
+Added: 10.25 Incremental Amendment No.
+Added: 1, dated as of July 31, 2020, by and among MaxLinear, the guarantors party thereto, the lenders party thereto, MUFG Bank, Ltd., as administrative agent, and MUFG as collateral agent (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed on June 7, 2021 )
+Added: 10.26 Credit Agreement, dated as of June 23, 2021, by and among MaxLinear, Inc., the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 24, 2021 )
+Added: 10.27 Security Agreement, dated as of June 23, 2021, by and among MaxLinear, Inc., the subsidiary guarantors from time to time party thereto, and Wells Fargo Bank, National Association, as collateral agent (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on June 24, 2021)
*11.1 Statement re computation of income (loss) per share (included in Part IV, Item 1 4 of this Form 10-K).
9 unchanged sentences
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
−Removed: Exhibit Number Exhibit Title
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
+Added: Exhibit Number Exhibit Title
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
+Added: 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
* Filed herewith.
37 unchanged sentences
DOUGHERTY Director February 2, 2022
+Added: /s/ TSU-JAE KING LIU, Ph.D.
+Added: Director February 2, 2022
+Added: Tsu-Jae King Liu, Ph.D.
/s/ ALBERT J.
7 unchanged sentences
Index to Consolidated Financial Statements
−Removed: Report of Independent Registered Public Accounting Firm
+Added: Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248 )
Consolidated Balance Sheets
20 unchanged sentences
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
−Removed: Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
+Added: Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
4 unchanged sentences
The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
−Removed: Business combinations - valuation of identifiable intangible assets
−Removed: As discussed in Note 3 to the financial statements, the Company acquired the Home Gateway Platform Division, which the Company refers to as the Wi-Fi and Broadband Assets business, pursuant to an Asset Purchase Agreement with Intel Corporation on July 31, 2020 for a purchase consideration of $150.0 million, which resulted in identifiable intangible assets of $58.0 million.
−Removed: Further, on September 9, 2020, the Company acquired NanoSemi, Inc.
−Removed: for a total purchase price of $61.2 million, which resulted in identifiable intangible assets of $19.9 million.
−Removed: Management estimated the fair value of identifiable intangible assets using available valuation methods.
−Removed: We identified the valuation of identifiable intangible assets as a critical audit matter.
−Removed: The principal consideration for our determination that valuation of identifiable intangible assets is a critical audit matter is that management’s judgments and estimates in selecting valuation methods, and determining significant assumptions and prospective financial information are subject to a high level of judgment and estimation uncertainty.
−Removed: Therefore, subjective and complex auditor judgment is necessary to evaluate the reasonableness of management’s selections, judgments and assumptions since the application of alternative methods and assumptions can result in differing estimates of fair value and historical results may not be indicative of the future
−Removed: due to uncertainties arising from technological advances, complexities in developing new products, industry consolidation and economic factors.
−Removed: Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.
−Removed: These procedures included, among others:
−Removed: • Utilizing a valuation specialist to assist in evaluating the appropriateness of the Company’s selection of valuation methods for the identifiable intangible assets and evaluating the reasonableness of significant assumptions used, including the discount rate, contributory asset charges, and long-term growth rates;
−Removed: • Evaluating significant assumptions of prospective financial information used, such as growth rates, customer attrition rate, the technology obsolescence curve and margin percentages, were reasonable by considering past performance, industry data, current market forecasts, and whether such assumptions were consistent with evidence obtained in other areas of the audit;
−Removed: • Testing the mathematical accuracy of the calculations;
−Removed: • Testing the design and operating effectiveness of internal controls relating to the valuation reports and allocation of purchase price, which included management’s review of the preliminary valuation report for the completeness and mathematical accuracy of the data, evaluating the reasonableness of significant assumptions used in the calculations, such as assumed growth rates, customer attrition rate, margin percentages, discount rate, contributory asset charges and the long term growth rates as compared to industry and market data.
Inventory valuation
15 unchanged sentences
• Testing the completeness, accuracy, and relevance of underlying data used in the estimate of net realizable value of its inventories;
−Removed: • Testing the design and operating effectiveness of internal controls over the inventory valuation adjustments, including management’s review of the demand forecast and significant adjustments to the inventory valuation calculations.
+Added: • Testing the design and operating effectiveness of internal controls over the inventory valuation adjustments, including management’s review of the demand forecast and significant adjustments to the inventory valuation calculation.
Realizability of deferred tax assets
3 unchanged sentences
We identified the realizability of deferred tax assets as a critical audit matter.
−Removed: The principal consideration for our determination that the realizability of deferred tax assets is a critical audit matter is that the forecast of future taxable income is an accounting
−Removed: estimate subject to a high level of estimation.
+Added: The principal consideration for our determination that the realizability of deferred tax assets is a critical audit matter is that the forecast of future taxable income is an accounting estimate subject to a high level of estimation.
There is inherent uncertainty and subjectivity related to management’s judgments and assumptions regarding the Company’s international tax structure and transfer pricing agreements, determination of the taxable income by jurisdiction, and the impacts of the Tax Act on future taxable income, which are complex in nature and require significant auditor judgment.
5 unchanged sentences
◦ Prior year actual results by jurisdiction to evaluate the reasonableness of significant changes contemplated for the following year;
−Removed: ◦ Forecasts of future information used in other areas, such as inventory valuation and impairment assessment of intangible assets, to evaluate completeness and consistency;
+Added: ◦ Forecasts of future information used in other areas to evaluate completeness and consistency;
• Reviewing the Company’s transfer pricing assumptions, including royalty rates and cost plus markups, applied by the Company and its non-US subsidiaries;
7 unchanged sentences
(in thousands, except par value amounts)
−Removed: December 31, December 31,
+Added: 2021 December 31,
Current assets:
29 unchanged sentences
Common stock, $ 0.0001 par value;
−Removed: 550,000 shares authorized, 74,536 shares issued and outstanding at December 31, 2020 and 71,931 shares issued and outstanding at December 31, 2019
+Added: 550,000 shares authorized;
+Added: 76,778 shares issued and outstanding at December 31, 2021 and 74,536 shares issued and outstanding December 31, 2020
Additional paid-in capital 657,485 602,064
−Removed: 602,064 529,596
−Removed: Accumulated other comprehensive income (loss) 1,435 ( 887 )
+Added: Accumulated other comprehensive income 2,125 1,435
Accumulated deficit ( 170,420 ) ( 212,389 )
−Removed: ( 212,389 ) ( 113,796 )
Total stockholders’ equity 489,198 391,117
4 unchanged sentences
(in thousands, except per share data)
−Removed: Years Ended December 31,
+Added: Year Ended December 31,
2021 2020 2019
8 unchanged sentences
Total operating expenses 430,587 313,937 189,742
−Removed: Loss from operations ( 101,139 ) ( 22,057 ) ( 19,097 )
+Added: Income (loss) from operations 65,245 ( 101,139 ) ( 22,057 )
Interest income 78 409 775
Interest expense ( 12,996 ) ( 12,952 ) ( 11,133 )
+Added: Loss on extinguishment of debt ( 5,221 ) — —
Other income (expense), net 764 ( 1,170 ) ( 69 )
−Removed: Total interest and other income (expense), net ( 13,713 ) ( 10,427 ) ( 13,755 )
−Removed: Loss before income taxes ( 114,852 ) ( 32,484 ) ( 32,852 )
−Removed: Income tax benefit ( 16,259 ) ( 12,586 ) ( 6,653 )
−Removed: Net loss $ ( 98,593 ) $ ( 19,898 ) $ ( 26,199 )
−Removed: Net loss per share:
+Added: Total other income (expense), net ( 17,375 ) ( 13,713 ) ( 10,427 )
+Added: Income (loss) before income taxes 47,870 ( 114,852 ) ( 32,484 )
+Added: Income tax provision (benefit) 5,901 ( 16,259 ) ( 12,586 )
+Added: Net income (loss) $ 41,969 $ ( 98,593 ) $ ( 19,898 )
+Added: Net income (loss) per share:
Basic $ 0.55 $ ( 1.35 ) $ ( 0.28 )
Diluted $ 0.53 $ ( 1.35 ) $ ( 0.28 )
−Removed: Shares used to compute net loss per share:
+Added: Shares used to compute net income (loss) per share:
Basic 76,037 73,133 71,005
6 unchanged sentences
2021 2020 2019
−Removed: Net loss $ ( 98,593 ) $ ( 19,898 ) $ ( 26,199 )
+Added: Net income (loss) $ 41,969 $ ( 98,593 ) $ ( 19,898 )
Other comprehensive income (loss), net of tax:
−Removed: Foreign currency translation adjustments, net of tax expense of $ 216 in 2020, expense of $ 136 in 2019 and benefit of $ 200 in 2018
+Added: Foreign currency translation adjustments, net of tax expense of $ 93 in 2021, expense of $ 216 in 2020 and expense of $ 136 in 2019
( 242 ) 1,010 160
−Removed: Net actuarial gain on pension and other defined benefit plans, net of tax expense of $ 0 in 2020
−Removed: Unrealized gain (loss) on interest rate swap, net of tax expense of $ 8 in 2020, benefit of $ 341 in 2019 and expense of $ 187 in 2018
+Added: Net actuarial gain on pension and other defined benefit plans, net of tax expense of $ 792 in 2021 and $ 0 in 2020
+Added: Unrealized gain (loss) on interest rate swap, net of tax expense of $ 0 in 2021, tax expense of $ 8 in 2020, and tax benefit of $ 341 in 2019
— 225 ( 1,319 )
2 unchanged sentences
Other comprehensive income (loss) 690 2,322 ( 1,159 )
−Removed: Total comprehensive loss $ ( 96,271 ) $ ( 21,057 ) $ ( 27,069 )
+Added: Total comprehensive income (loss) $ 42,659 $ ( 96,271 ) $ ( 21,057 )
See accompanying notes.
18 unchanged sentences
Common stock issued pursuant to equity awards, net 1,515 — 3,997 — — 3,997
+Added: Common stock issued for merger, net 804 — 17,080 — — 17,080
Employee stock purchase plan 286 — 3,794 — — 3,794
Stock-based compensation — — 47,597 — — 47,597
−Removed: Cumulative effect of adoption of new accounting principles — — — — ( 268 ) ( 268 )
−Removed: Other comprehensive loss — — — ( 1,159 ) — ( 1,159 )
+Added: Other comprehensive income — — — 2,322 — 2,322
Net loss — — — — ( 98,593 ) ( 98,593 )
Balance at December 31, 2020 74,536 7 602,064 1,435 ( 212,389 ) 391,117
+Added: Repurchase of common stock ( 455 ) — ( 23,548 ) — — ( 23,548 )
Common stock issued pursuant to equity awards, net 2,501 1 14,613 — — 14,614
−Removed: Common stock issued for merger, net 804 — 17,080 — — 17,080
Employee stock purchase plan 196 — 4,998 — — 4,998
1 unchanged sentence
Other comprehensive income — — — 690 — 690
−Removed: Net loss — — — — ( 98,593 ) ( 98,593 )
+Added: Net income — — — — 41,969 41,969
Balance at December 31, 2021 76,778 $ 8 $ 657,485 $ 2,125 $ ( 170,420 ) $ 489,198
3 unchanged sentences
(in thousands)
−Removed: Years Ended December 31,
+Added: Year Ended December 31,
2021 2020 2019
Operating Activities
−Removed: Net loss $ ( 98,593 ) $ ( 19,898 ) $ ( 26,199 )
−Removed: Adjustments to reconcile net loss to cash provided by operating activities:
+Added: Net income (loss) $ 41,969 $ ( 98,593 ) $ ( 19,898 )
+Added: Adjustments to reconcile net income (loss) to cash provided by operating activities:
Amortization and depreciation 91,792 76,513 66,401
1 unchanged sentence
Inventory fair value adjustments — 32,945 —
−Removed: Amortization of debt issuance costs and accretion of discount on debt and leases 2,201 1,577 1,148
+Added: Amortization of debt issuance costs and accretion of discounts 3,000 2,201 1,577
Stock-based compensation 59,358 47,597 32,060
3 unchanged sentences
Impairment of leased right-of-use assets 429 1,508 9,240
+Added: Loss on extinguishment of debt 5,221 — —
Gain on extinguishment of lease liabilities — — ( 10,437 )
−Removed: (Gain) loss on foreign currency and other 1,289 760 ( 809 )
+Added: Loss on foreign currency 634 1,289 760
Excess tax benefits on stock-based awards ( 7,415 ) ( 677 ) ( 4,064 )
−Removed: Changes in operating assets and liabilities, net of acquisitions:
+Added: Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable ( 51,690 ) ( 16,856 ) 9,090
4 unchanged sentences
Accrued compensation 33,595 32,606 2,021
−Removed: Deferred revenue and deferred profit — — ( 138 )
Accrued price protection liability ( 7,320 ) 34,719 ( 3,966 )
6 unchanged sentences
Cash used in acquisitions, net of cash acquired ( 40,000 ) ( 160,000 ) —
+Added: Purchases of long-term investments ( 5,000 ) — —
Net cash used in investing activities ( 91,757 ) ( 175,286 ) ( 6,973 )
Financing Activities
−Removed: Net proceeds from the issuance of debt 175,000 — —
+Added: Proceeds from the issuance of debt 350,000 175,000 —
Payment of debt issuance cost ( 4,173 ) ( 2,696 ) —
2 unchanged sentences
Minimum tax withholding paid on behalf of employees for restricted stock units ( 13,149 ) ( 3,535 ) ( 11,986 )
+Added: Repurchase of common stock ( 23,548 ) — —
Net cash provided by (used in) financing activities ( 91,903 ) 159,649 ( 53,383 )
Effect of exchange rate changes on cash and cash equivalents ( 2,869 ) ( 1,039 ) 934
−Removed: Increase in cash, cash equivalents and restricted cash 56,917 18,926 ( 221 )
+Added: Increase (decrease) in cash, cash equivalents and restricted cash ( 18,296 ) 56,917 18,926
Cash, cash equivalents and restricted cash at beginning of period 150,034 93,117 74,191
3 unchanged sentences
Cash paid for income taxes $ 3,839 $ 2,822 $ 4,417
−Removed: Supplemental disclosures of non-cash investing and financing activities:
+Added: Supplemental disclosures of non-cash activities:
Common stock issued in acquisitions, at fair value $ — $ 17,080 $ —
4 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
Organization and Summary of Significant Accounting Policies
21 unchanged sentences
Actual results could differ from those estimates.
−Removed: In the year ended December 31, 2020, the Company’s revenues were impacted by the coronavirus disease, or COVID-19, pandemic.
+Added: In the year ended December 31, 2020, the Company’s revenues were impacted by the novel coronavirus disease, or COVID-19, pandemic.
In particular, the Company experienced some negative impact to its revenue and gross profits in the first half of 2020 due to several industry-wide dynamics related to COVID-19 including supply constraints as well as customer requests to temporarily delay shipments.
−Removed: Although the Company has benefited from increased demand for certain of its products from the work-from-home environment in the second half of 2020, heightened volatility and uncertainty in customer demand and the worldwide economy in general has continued, and the Company may experience increased volatility in its sales and revenues in the near future.
+Added: Although the Company has benefited from increased demand for certain of its products from the work-from-home environment in the second half of 2020 and in fiscal year 2021, a sudden increase in demand for electronics containing semiconductor chips and stockpiling of chips by certain firms in China blacklisted by the U.S.
+Added: has exacerbated bottlenecks in the supply chain, resulting in a global semiconductor supply shortage impacting the Company’s industry.
+Added: Some chip manufacturers are estimating this supply shortage may continue into 2023.
+Added: While these chip manufacturers are working to increase capacity in the future, and the Company is continuing to work closely with its suppliers and customers to minimize the potential adverse impacts of the supply shortage, such shortage may have a near-term impact on the Company’s ability to meet increased demand on certain products and have a negative impact on its operating results which may continue into 2023.
+Added: Heightened volatility, global supply shortages, and uncertainty in customer demand and the worldwide economy in general has continued, and the Company may experience increased volatility in its sales and revenues in the near future.
However, the magnitude of such volatility on the Company’s business and its duration is uncertain and cannot be reasonably estimated at this time.
The Company also believes that its $ 131.7 million of cash and cash equivalents at December 31, 2021 will be sufficient to fund its projected operating requirements for at least the next twelve months.
−Removed: A material adverse impact from COVID-19 could result in a need to raise additional capital or incur additional indebtedness to fund strategic initiatives or operating activities, particularly if the Company pursues additional acquisitions.
−Removed: The Company’s future capital requirements will depend on many factors, including the Company’s efforts to complete the integration of the acquired Wi-Fi and Broadband assets business and NanoSemi (Note 3), changes in revenue, the expansion of engineering, sales and marketing activities, the timing and extent of expansion into new territories, the timing of introductions of new products and enhancements to existing products, the continuing market acceptance of the Company’s products and potential material investments in, or acquisitions of, complementary businesses, services or technologies.
+Added: A material adverse impact from COVID-19 and the global semiconductor supply shortage could result in a need to raise additional capital or incur additional indebtedness to fund strategic initiatives or operating activities, particularly if the Company pursues additional acquisitions.
+Added: The Company’s future capital requirements will depend on many factors, including changes in revenue, the expansion of engineering, sales and marketing activities, the timing and extent of expansion into new territories, the timing of introductions of new products and
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: enhancements to existing products, the continuing market acceptance of the Company’s products and potential material investments in, or acquisitions of, complementary businesses, services or technologies.
Additional funds may not be available on terms favorable to the Company or at all.
1 unchanged sentence
The Company is not aware of any specific event or circumstance that would require an update to its estimates or adjustments to the carrying value of its assets and liabilities as of February 2, 2022, the issuance date of this Annual Report on Form 10-K.
−Removed: Actual results could differ from those estimates, particularly if the Company experiences material impacts from
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
+Added: Actual results could differ from those estimates, particularly if the Company experiences material impacts from COVID-19.
Business Combinations
19 unchanged sentences
The Company performs ongoing credit evaluations of its customers and assesses each customer’s credit worthiness.
−Removed: The Company monitors collections and payments from its customers and maintains an allowance for doubtful accounts, which effective January 1, 2020, is based upon applying an expected credit loss rate to receivables based on the historical loss rate from similar high risk customers adjusted for current conditions, including any specific customer collection issues identified, and forecasts of economic conditions.
−Removed: Delinquent account balances are written off after management has determined that the likelihood of collection is remote.
−Removed: The allowance for credit losses as of December 31, 2020 and the activity in this account, including the current-period provision for expected credit losses for the year ended December 31, 2020, were not material.
+Added: The Company monitors collections and payments from its customers and maintains an allowance for doubtful accounts, which is based upon applying an expected credit loss rate to receivables based on the historical loss rate from similar high risk customers adjusted for current conditions, including any specific customer collection issues identified, and forecasts of economic conditions.
+Added: Delinquent account balances are written off after management has determined that the likelihood of collection is
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: The allowance for credit losses as of December 31, 2021 and 2020 and the activity in this account, including the current-period provision for expected credit losses for the years ended December 31, 2021 and 2020, were not material.
The Company assesses the recoverability of its inventory based on assumptions about demand and market conditions.
1 unchanged sentence
Inventory is stated at the lower of cost or net realizable value.
−Removed: Cost is computed using standard cost, which approximates actual cost on a first-in, first-out basis and net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion,
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: disposal and transportation.
+Added: Cost is computed using standard cost, which approximates actual cost on a first-in, first-out basis and net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.
The Company reduces its inventory to its lower of cost or net realizable value on a part-by-part basis to account for its obsolescence or lack of marketability.
19 unchanged sentences
Impairment of Goodwill and Long-Lived Assets
−Removed: Goodwill is not amortized but is tested for impairment using either a qualitative assessment, and/or quantitative assessment, which effective with its October 31, 2020 impairment test, is based on comparing the fair value of a reporting unit with its carrying amount.
+Added: Goodwill is not amortized but is tested for impairment using either a qualitative assessment, and/or quantitative assessment, which is based on comparing the fair value of a reporting unit with its carrying amount.
If the carrying amount of a reporting unit exceeds its fair value, a goodwill impairment loss is recorded.
2 unchanged sentences
The Company reviews indefinite-lived intangible assets for impairment using a qualitative assessment, followed by a quantitative assessment, as needed, each year as of October 31, the date of its annual goodwill impairment review, or whenever events or changes in circumstances indicate the carrying value may not be recoverable.
−Removed: Recoverability of indefinite-lived intangible assets is measured by comparing the carrying amount of the asset to its fair value.
+Added: Recoverability of indefinite-lived intangible assets is measured by comparing the
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: carrying amount of the asset to its fair value.
In certain cases, the Company utilizes the relief-from-royalty method when appropriate, and a fair value will be obtained based on analysis over the costs saved by owning the right instead of leasing it.
1 unchanged sentence
The Company regularly reviews the carrying amount of its long-lived assets subject to depreciation and amortization, as well as the useful lives, to determine whether indicators of impairment may exist which warrant adjustments to carrying values or estimated useful lives.
−Removed: An impairment loss would be recognized when the sum of the expected future undiscounted net cash
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: flows is less than the carrying amount of the asset.
+Added: An impairment loss would be recognized when the sum of the expected future undiscounted net cash flows is less than the carrying amount of the asset.
Should impairment exist, the impairment loss would be measured based on the excess of the carrying amount of the asset over the asset’s fair value.
−Removed: During the years 2020, 2019, and 2018, the Company identified impairment of intangible assets of $ 0.1 million, $ 0 and $ 2.2 million, respectively.
+Added: During the years 2021, 2020, and 2019, the Company recorded impairment of intangible assets of $ 0 , $ 0.1 million and $ 0 , respectively.
Refer to Goodwill and Intangible Assets, Note 5 for more information.
1 unchanged sentence
The Company’s revenue is primarily generated from sales of the Company’s integrated circuits to electronics distributors, module makers, OEMs, and ODMs under individual customer purchase orders, some of which have underlying master sales agreements that specify terms governing the product sales.
−Removed: Effective January 1, 2018, the Company adopted ASC 606 and recognizes such revenue at the point in time when control of the products is transferred to the customer at the estimated net consideration for which collection is probable, taking into account the customer's rights to price protection, other pricing credits, unit rebates, and rights to return unsold product.
+Added: The Company recognizes such revenue at the point in time when control of the products is transferred to the customer at the estimated net consideration for which collection is probable, taking into account the customer's rights to price protection, other pricing credits, unit rebates, and rights to return unsold product.
Transfer of control occurs either when products are shipped to or received by the distributor or direct customer, based on the terms of the specific agreement with the customer, if the Company has a present right to payment and transfer of legal title and the risks and rewards of ownership to the customer has occurred.
3 unchanged sentences
Since payment terms are less than a year, the Company has elected the practical expedient and does not assess whether a customer contract has a significant financing component.
−Removed: A five-step approach is applied in the recognition of revenue under ASC 606:
+Added: A five-step approach is applied in the recognition of revenue:
(1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when the Company satisfies a performance obligation.
−Removed: The Company applied ASC 606 to its customer contracts that were not completed before the January 1, 2018 adoption date.
−Removed: Customer purchase orders plus the underlying master sales agreements are considered to be contracts with the customer for purposes of applying the five-step approach under ASC 606.
+Added: Customer purchase orders plus the underlying master sales agreements are considered to be contracts with the customer for purposes of applying the five-step approach.
Pricing adjustments and estimates of returns under contractual stock rotation rights are treated as variable consideration for purposes of determining the transaction price, and are estimated at the time control transfers using the expected value method based on the Company’s analysis of actual price adjustment claims by distributors and historical product return rates, and then reassessed at the end of each reporting period.
8 unchanged sentences
Although customers may place orders for products to be delivered on multiple dates that may be in different quarterly reporting periods, all of the orders are scheduled within one year from the order date.
−Removed: The Company has opted to not disclose the portion of revenues allocated to partially unsatisfied performance obligations, which represent products to be shipped within 12 months under open customer purchase orders, at the end of the current reporting period as allowed under ASC 606.
−Removed: The Company has also elected to record sales commissions when incurred, pursuant to the practical expedient under ASC 340, as the period over which the sales commission asset that would have been recognized is less than one year.
−Removed: Customer contract liabilities consist primarily of obligations to deliver rebates to customers in the form of units of products which are included in accrued expenses and other current liabilities in the consolidated balance sheets.
−Removed: Other obligations to customers consist of estimates of price protection rights offered to the Company's end customers, which are
+Added: The Company has opted to not disclose the portion of revenues allocated to partially unsatisfied
MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: included in accrued price protection liability in the consolidated balance sheets, as well as price adjustments expected to be claimed by the distributor upon sell-through of the products to their customers, and amounts expected to be returned by distributors under stock rotation rights, which are included in accrued expenses and other current liabilities in the consolidated balance sheets.
+Added: performance obligations, which represent products to be shipped within 12 months under open customer purchase orders, at the end of the current reporting period.
+Added: The Company has also elected to record sales commissions when incurred, as the period over which the sales commission asset that would have been recognized is less than one year .
+Added: Customer contract liabilities consist primarily of obligations to deliver rebates to customers in the form of units of products which are included in accrued expenses and other current liabilities in the consolidated balance sheets.
+Added: Other obligations to customers consist of estimates of price protection rights offered to the Company’s end customers, which are included in accrued price protection liability in the consolidated balance sheets, as well as price adjustments expected to be claimed by the distributor upon sell-through of the products to their customers, and amounts expected to be returned by distributors under stock rotation rights, which are included in accrued expenses and other current liabilities in the consolidated balance sheets.
The Company also records a right of return asset, consisting of amounts representing the products the Company expects to receive from customers in returns, which is included in inventory in the consolidated balance sheets, and is typically settled within six months of transfer of control to the customer, or the period over which stock rotation rights are based.
21 unchanged sentences
The Company recognizes compensation expense over the vesting period using the straight-line method and classifies these amounts in the consolidated statements of operations based on the department to which the related employee reports.
−Removed: Research and Development
−Removed: Costs incurred in connection with the development of the Company’s technology and future products are charged to research and development expense as incurred.
MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
+Added: Research and Development
+Added: Costs incurred in connection with the development of the Company’s technology and future products are charged to research and development expense as incurred.
The Company’s leases primarily consist of facility leases which are classified as operating leases.
The Company assesses whether an arrangement contains a lease at inception.
−Removed: Effective January 1, 2019, the Company recognizes a lease liability to make contractual payments under all leases with terms greater than twelve months and a corresponding right-of-use asset, representing its right to use the underlying asset for the lease term.
+Added: The Company recognizes a lease liability to make contractual payments under all leases with terms greater than twelve months and a corresponding right-of-use asset, representing its right to use the underlying asset for the lease term.
The lease liability is initially measured at the present value of the lease payments over the lease term using the collateralized incremental borrowing rate since the implicit rate is unknown.
26 unchanged sentences
Valuation allowances are recorded to reduce deferred tax assets when a judgment is made that is considered more likely than not that a tax benefit will not be realized.
−Removed: A decision to record a valuation allowance results in an increase in income tax expense or a decrease in income tax benefit.
−Removed: If the valuation allowance is released in a future period, income tax expense will be reduced accordingly.
−Removed: The calculation of tax liabilities involves dealing with uncertainties in the application of complex global tax regulations.
−Removed: The impact of an uncertain income tax position is recognized at the largest amount that is “more likely than not” to be sustained
+Added: A decision to record a
MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: upon audit by the relevant taxing authority.
+Added: valuation allowance results in an increase in income tax expense or a decrease in income tax benefit.
+Added: If the valuation allowance is released in a future period, income tax expense will be reduced accordingly.
+Added: The calculation of tax liabilities involves dealing with uncertainties in the application of complex global tax regulations.
+Added: The impact of an uncertain income tax position is recognized at the largest amount that is “more likely than not” to be sustained upon audit by the relevant taxing authority.
An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.
8 unchanged sentences
Comprehensive income (loss) is defined as the change in equity (net assets) of a business entity during a period from transactions and other events and circumstances from non-owner sources.
−Removed: Other comprehensive income (loss) includes certain changes in equity that are excluded from net income (loss), net of tax, such as foreign currency translation gains and losses, and unrealized gains and losses from interest rate hedging activities.
+Added: Other comprehensive income (loss) includes certain changes in equity that are excluded from net income (loss), net of tax, such as foreign currency translation gains and losses and change in fair value of projected benefit obligation for defined benefit plans.
Litigation and Settlement Costs
4 unchanged sentences
Recently Adopted Accounting Pronouncements
−Removed: In June 2016, the FASB issued ASU No.
−Removed: 2016-13, Financial Instruments—Credit Losses (Topic 326):
−Removed: Measurement of Credit Losses on Financial Instruments , to replace the incurred loss methodology with an expected credit loss model that requires consideration of a broader range of information to estimate credit losses over the lifetime of the asset, including current conditions and reasonable and supportable forecasts in addition to historical loss information, to determine expected credit losses.
−Removed: Pooling of assets with similar risk characteristics and the use of a loss model are also required.
−Removed: Also, in April 2019, the FASB issued ASU No.
−Removed: 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, to clarify the inclusion of recoveries of trade receivables previously written off when estimating an allowance for credit losses.
−Removed: The amendments in this update were required to be applied using the modified retrospective method with an adjustment to accumulated deficit and were effective for the Company beginning with fiscal year 2020, including interim periods.
−Removed: The adoption of the amendments in this update as of January 1, 2020 did not have a material impact on the Company’s accounts receivable, net and accumulated deficit, as well as its results of operations for the year ended December 31, 2020.
−Removed: In January 2017, the FASB issued ASU No.
−Removed: 2017-04, Intangibles—Goodwill and Other (Topic 350):
−Removed: Simplifying the Test for Goodwill Impairment , to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test.
−Removed: An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if the reporting unit had been acquired in a business combination.
−Removed: Instead, under the amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.
−Removed: The FASB also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test.
−Removed: The amendments in this update are effective for the Company beginning with fiscal year 2020, including interim periods.
−Removed: The adoption of the amendments in this update as of the Company’s October 31, 2020 goodwill impairment test date did not have a material impact on the Company’s consolidated financial position and results of operations as of and for the year ended December 31, 2020.
−Removed: In August 2018, the FASB issued ASU No.
−Removed: 2018-13, Fair Value Measurement (Topic 820):
−Removed: Disclosure Framework— Changes to the Disclosure Requirements for Fair Value Measurement , to improve the fair value measurement reporting of
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: financial instruments.
−Removed: The amendments in this update require, among other things, added disclosure of the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.
−Removed: The amendments in this update eliminate, among other things, disclosure of the reasons for and amounts of transfers between Level 1 and Level 2 for assets and liabilities that are measured at fair value on a recurring basis and an entity's valuation processes for Level 3 fair value measurements.
−Removed: The amendments in this update were effective for the Company beginning with fiscal year 2020.
−Removed: Retrospective application is required for all amendments in this update except the added disclosures, which should be applied prospectively.
−Removed: The adoption of the amendments in this update did not have a material impact on the Company’s consolidated financial position and results of operations as of and for the year ended December 31, 2020.
−Removed: In August 2018, the FASB issued ASU No.
−Removed: 2018-15, Intangibles - Goodwill and Other—Internal-Use Software (Subtopic 350-40):
−Removed: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract , to provide additional guidance on the accounting for costs of implementing cloud computing arrangements that are service contracts.
−Removed: The amendments in this update require the capitalization of implementation costs during the application development stage of such hosting arrangements and amortization of the expense over the term of the arrangement including any option to extend reasonably certain to be exercised or option to terminate reasonably certain not to be exercised.
−Removed: Capitalized implementation costs and amortization thereof are also required to be classified in the same line item in the statements of financial position, operations and cash flows associated with the hosting service fees.
−Removed: The amendments in this update were effective for the Company beginning with fiscal year 2020.
−Removed: Entities may select retrospective or prospective application to all implementation costs incurred after the adoption date.
−Removed: The Company has selected prospective application.
+Added: In December 2019, the FASB issued ASU No.
+Added: 2019-12 Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes , to remove certain exceptions related to the approach for intraperiod tax allocation, recognition of deferred tax liabilities for outside basis differences and requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date.
+Added: The amendments in this update are effective for the Company beginning with fiscal year 2021.
+Added: Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis.
The adoption of the amendments in this update did not have a material impact on the Company’s consolidated financial position and results of operations as of and for the year ended December 31, 2021.
−Removed: In August 2018, the FASB issued ASU No.
−Removed: 2018-14 Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20) , to clarify disclosure requirements related to defined benefit pension plans.
−Removed: The amendment adds a narrative description on the reasons for significant gains and losses affecting the benefit obligation and an explanation of any other significant changes in the benefit obligation or plan assets not otherwise apparent in other disclosures.
−Removed: The amendment removes the disclosure of amounts in accumulated other comprehensive income expected to be recognized as part of net periodic benefit costs over the next year.
+Added: In October 2020, the FASB issued ASU No.
+Added: 2020-10 Codification Improvements , to make incremental improvements to GAAP and address stakeholder suggestions, including, among other things, clarifying that the requirement to provide comparative information in the financial statements extends to the corresponding disclosures section.
The amendments in this update are effective for the Company beginning with fiscal year 2021.
−Removed: Entities are required to apply the amendments on a retrospective basis with early adoption permitted.
−Removed: The Company selected to early adopt this update.
−Removed: The adoption of the amendments in this update did not have a material impact on the Company's defined benefit plan disclosures and the Company's consolidated financial position and results of operations as of and for the year ended December 31, 2020.
−Removed: In March 2020, the FASB issued ASU No.
−Removed: 2020-04 Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference Rate Reform on Financial Reporting , that provides optional relief to applying reference rate reform to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (LIBOR), which will be discontinued by the end of 2021.
−Removed: Also, in January 2021, the FASB issued ASU No.
−Removed: 2021-01 Reference Rate Reform (Topic 848)—Scope , to clarify that cash flow hedges are eligible for certain optional expedients and exceptions for the application of subsequent assessment methods to assume perfect effectiveness as previously presented in ASU 2020-04.
−Removed: The amendments in this update are effective immediately and may be applied through December 31, 2022.
−Removed: The Company's LIBOR interest rate swap expired in October 2020 and was not impacted by reference rate reform.
−Removed: Therefore, the adoption of the amendments in this update did not have a material impact on the Company’s accumulated other comprehensive loss or its results of operations as of and for the year ended December 31, 2020.
−Removed: In May 2020, the SEC issued a final rule that amends the financial statement requirements for business acquisitions and related pro forma financial information.
−Removed: The rule modifies the significance tests to replace total assets with aggregate worldwide market value of common equity in the investment test and to include a revenue component in the income test while requiring the use of absolute value to calculate average net income for the last five fiscal years.
−Removed: The rule improves the presentation of pro forma financial information by replacing pro forma adjustments with transaction accounting adjustments and adds the optional disclosure of management’s adjustments related to synergies and dis-synergies.
−Removed: The rule also reduces the number of acquiree annual financial statement periods required to a maximum of the two most recent fiscal years.
−Removed: The final rule is effective for the Company beginning with fiscal year 2021, with early application permitted;
−Removed: all applicable aspects of the rule are required to be applied upon adoption.
−Removed: The Company has early adopted the rule in its filings related to the acquisition of the Wi-Fi and Broadband assets business.
−Removed: The adoption of the rule did not have an impact on the Company’s consolidated financial position and results of operations as of and for the year ended December 31, 2020.
+Added: The amendments in this update should be applied retrospectively and at the beginning of the period that includes the adoption date.
+Added: The adoption of the amendments in this update did not have a material impact on the Company’s financial disclosures as of and for the year ended December 31, 2021.
MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
Recently Issued Accounting Pronouncements
−Removed: In December 2019, the FASB issued ASU No.
−Removed: 2019-12 Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes , to remove certain exceptions and improve consistency of application, including, among other things, requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date.
−Removed: The amendments in this update will be effective for the Company beginning with fiscal year 2021, with early adoption permitted.
−Removed: Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis.
−Removed: The adoption of the amendments in this update is not expected to have a material impact on the Company’s consolidated financial position and results of operations.
In October 2021, the FASB issued ASU No.
−Removed: 2020-10 Codification Improvements , to make incremental improvements to GAAP and address stakeholder suggestions, including, among other things, clarifying that the requirement to provide comparative information in the financial statements extends to the corresponding disclosures section.
−Removed: The amendments in this update will be effective for the Company beginning with fiscal year 2021, with early adoption permitted.
−Removed: The amendments in this update should be applied retrospectively and at the beginning of the period that includes the adoption date.
−Removed: The adoption of the amendments in this update is not expected to have a material impact on the Company’s consolidated financial position and results of operations.
+Added: 2021-08, Business Combinations (Topic 805):
+Added: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , to provide specific guidance to eliminate diversity in practice on how to recognize and measure acquired contract assets and contract liabilities from revenue contracts from customers in a business combination consistent with revenue contracts with customers not acquired in an acquisition.
+Added: The amendments in this update provide that the acquirer should consider the terms of the acquired contracts, such as timing of payment, identify each performance obligation in the contracts, and allocate the total transaction price to each identified performance obligation on a relative standalone selling price basis as of contract inception (that is, the date the acquiree entered into the contracts) or contract modification to determine what should be recorded at the acquisition date.
+Added: These amendments are effective for the Company beginning with fiscal year 2023.
+Added: The impact of the adoption of the amendments in this update will depend on the magnitude of any customer contracts assumed in a business combination in 2023 and beyond.
Net Income (Loss) Per Share
−Removed: Basic earnings per share, or EPS, is calculated by dividing net loss by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents.
−Removed: Diluted EPS is computed by dividing net income by the weighted-average number of common shares outstanding for the period and the weighted-average number of dilutive common stock equivalents outstanding for the period determined using the treasury-stock method.
+Added: Basic earnings per share, or EPS, is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents.
+Added: Diluted EPS is computed by dividing net income (loss) by the weighted-average number of common shares outstanding for the period and the weighted-average number of dilutive common stock equivalents outstanding for the period determined using the treasury-stock method.
For purposes of this calculation, common stock options, restricted stock units and restricted stock awards are considered to be common stock equivalents and are only included in the calculation of diluted EPS when their effect is dilutive.
In periods in which the Company has a net loss, dilutive common stock equivalents are excluded from the calculation of diluted EPS.
−Removed: The table below presents the computation of basic and diluted earnings per share:
−Removed: Years Ended December 31,
+Added: The table below presents the computation of basic and diluted EPS:
+Added: Year Ended December 31,
2021 2020 2019
(in thousands, except per share amounts)
−Removed: Net loss $ ( 98,593 ) $ ( 19,898 ) $ ( 26,199 )
+Added: Net income (loss) $ 41,969 $ ( 98,593 ) $ ( 19,898 )
Weighted average common shares outstanding—basic 76,037 73,133 71,005
1 unchanged sentence
Weighted average common shares outstanding—diluted 79,679 73,133 71,005
−Removed: Net loss per share:
+Added: Net income (loss) per share:
Basic $ 0.55 $ ( 1.35 ) $ ( 0.28 )
Diluted $ 0.53 $ ( 1.35 ) $ ( 0.28 )
−Removed: For the years ended December 31, 2020, 2019, and 2018, the Company incurred net losses and accordingly excluded common stock equivalents for outstanding stock-based awards, which represented all potentially dilutive securities, of 3.2 million, 2.5 million, and 3.7 million, respectively, from the calculation of diluted net loss per share due to their anti-dilutive nature.
+Added: For each of the years ended December 31, 2021, 2020, and 2019, the Company excluded common stock equivalents for outstanding stock-based awards, which represented potentially dilutive securities of 0.07 million for 2021, 3.2 million for 2020 periods, and 2.5 million for 2019 from the calculation of diluted net income (loss) per share due to their anti-dilutive nature.
MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
Business Combinations
1 unchanged sentence
On July 31, 2020, the Company and certain of its designated subsidiaries completed their acquisition of the Home Gateway Platform Division, which the Company refers to as the Wi-Fi and Broadband assets business, pursuant to an Asset Purchase Agreement with Intel Corporation, or Intel, dated April 5, 2020 (the “Asset Purchase Agreement”), and related agreements.
−Removed: The Company paid cash consideration of $ 150.0 million for the purchase of certain assets of the Wi-Fi and Broadband assets business, and assumed certain liabilities primarily related to specified employment matters.
+Added: The Company paid cash consideration of $ 150.0 million for the purchase of certain assets of the Wi-Fi and Broadband assets business, and assumed certain liabilities related to specified employment matters.
The transaction was funded with a portion of the net proceeds from a secured incremental term loan with an aggregate principal amount of $ 175.0 million (Note 8).
−Removed: The Wi-Fi and Broadband assets business develops a broad portfolio of connected home products, including Wi-Fi, Ethernet and Broadband Gateway Processor SoCs, which enables the Company to strengthen its existing connected home portfolio by bringing together a complete, scalable, and complementary platform of connectivity and access solutions to address its customers’ needs across target end-markets.
The acquired assets and assumed liabilities, together with the employees who joined the Company and its subsidiaries as a result of the transaction, represent a business as defined in ASC 805, Business Combinations .
−Removed: The Company is integrating the acquired assets and rehired employees into the Company’s existing business.
−Removed: The Asset Purchase Agreement also contains customary representations, warranties and covenants, including indemnification provisions set forth therein.
−Removed: Pursuant to the Purchase Agreement, Intel has retained, and will be obligated to indemnify MaxLinear for, certain liabilities, including but not limited to those relating to the Home Gateway Platform Division for pre-closing taxes and specified employment matters, and MaxLinear has assumed, and will indemnify Intel for, certain liabilities, including but not limited to those relating to the Home Gateway Platform Division and the Transferred Assets for certain pre-closing and post-closing actions, events and periods (including certain product-related liabilities for products sold prior to the Closing for up to a $ 25.0 million cap), and specified employment matters.
−Removed: In connection with the transaction, the Company and Intel have entered into as of the closing certain other ancillary agreements, including (i) an intellectual property matters agreement, pursuant to which Intel will grant to the Company a license to certain intellectual property rights for use by the Company in connection with the acquired assets and the Company will grant back to Intel a license to the intellectual property rights in the acquired assets, (ii) a supply agreement, pursuant to which Intel will manufacture and fabricate certain products for the Company that are part of the acquired assets, (iii) an ethernet network controller services agreement, pursuant to which the Company will provide Intel with certain development services with respect to certain Intel ethernet network controller products, (iv) a transition services agreement, pursuant to which Intel will provide certain services on a transitional basis for up to a 12-month period after the closing, the scope of which includes services relating to real estate and facilities, information technology, and supply chain, procurement, sales operations, and engineering support, and (v) a side letter regarding the delayed transfer of certain inventory.
−Removed: Pursuant to the delayed inventory side letter, the Company has control and economic benefits of the inventory, but the title and possession of the inventory has been delayed until the last day that Intel provides services under the transition services agreement.
−Removed: Acquisition Consideration
−Removed: The following table summarizes the fair value of purchase price consideration to acquire the Wi-Fi and Broadband assets business (in thousands):
−Removed: Description Amount
−Removed: Fair value of purchase consideration:
−Removed: Cash $ 150,000
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: Purchase Price Allocation
−Removed: The following is an allocation of purchase price as of the July 31, 2020 acquisition closing date based upon an estimate of the fair value of the assets acquired and the liabilities assumed by the Company in the acquisition (in thousands):
−Removed: Description Amount
−Removed: Purchase price allocation:
−Removed: Inventory $ 67,100
−Removed: Property and equipment 17,641
−Removed: Identifiable intangible assets 58,000
−Removed: Deferred tax assets 457
−Removed: Accrued expenses ( 68 )
−Removed: Accrued price protection liability ( 413 )
−Removed: Accrued compensation ( 7,916 )
−Removed: Other long-term liabilities ( 8,197 )
−Removed: Identifiable net assets acquired 126,604
−Removed: Goodwill 23,396
−Removed: Total purchase price $ 150,000
−Removed: The fair value of inventories acquired with the Wi-Fi and Broadband assets business included acquisition accounting fair market value adjustments of $ 32.9 million.
−Removed: The Company recognized $ 32.9 million in inventory fair value adjustments in cost of sales in the consolidated statement of operations for the year ended December 31, 2020.
−Removed: The following is a summary of identifiable intangible assets acquired and the related expected lives for the finite-lived intangible assets (in thousands):
−Removed: Category Estimated Life in Years Fair Value
−Removed: Finite-lived intangible assets:
−Removed: Developed technology 7 $ 43,200
−Removed: Customer-related intangible 5 6,800
−Removed: Product backlog 0.58 800
−Removed: Indefinite-lived intangible assets:
−Removed: IPR&D N/A 7,200
−Removed: Total identifiable intangible assets acquired $ 58,000
+Added: The Company has integrated the acquired assets and rehired employees into the Company’s existing business and has completed its purchase price allocation accounting associated with this acquisition.
Acquisition of NanoSemi, Inc.
2 unchanged sentences
The initial closing transaction consideration consisted of $ 10.0 million in cash and 804,163 shares of MaxLinear’s common stock.
−Removed: In addition, the NanoSemi securityholders will receive $ 35.0 million in deferred cash payments payable in 2021, and certain NanoSemi securityholders may also receive up to an additional $ 35.0 million in potential contingent consideration, subject to the acquired business’s satisfying certain financial objectives from July 1, 2020 through December 31, 2022.
+Added: In addition, in the year ended December 31, 2021, the NanoSemi stockholders received $ 35.0 million in cash payments that were deferred as of the acquisition date, and certain NanoSemi stockholders may also receive up to an additional $ 35.0 million in potential contingent consideration, subject to the acquired business’s satisfying certain financial objectives from July 1, 2020 through December 31, 2022.
The stock consideration was issued in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended.
In connection with the acquisition, MaxLinear agreed to provide the NanoSemi stockholders with certain registration rights with respect to the shares of MaxLinear common stock they received in the acquisition.
−Removed: NanoSemi is an industry-leading provider of intellectual property that utilizes patented machine learning techniques to improve signal integrity and power efficiency in systems-on-chip, or SoCs, application-specific integrated circuits, or ASICs, and field-programmable gate arrays, or FPGAs, used in next-generation communication and artificial intelligence systems.
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: technology enables higher throughput connections for 5G, Wi-Fi, and WiGig smartphones and base stations while simultaneously reducing energy consumption.
+Added: The Company has integrated NanoSemi into the Company's existing business and has completed its purchase price allocation accounting associated with this acquisition.
+Added: Acquisition of Company X
+Added: On December 8, 2021, the Company completed its acquisition of a business, or Company X, pursuant to a Purchase and Sale Agreement (the “Purchase Agreement”).
+Added: The initial closing transaction consideration consisted of $ 5.0 million in cash.
+Added: In addition, their stockholders may receive up to an additional $ 3.0 million in potential contingent consideration, subject to the acquired business satisfying certain financial and personnel objectives by March 31, 2023.
+Added: Company X is headquartered in Chennai, India and operates as a WiFi solutions and service provider.
Acquisition Consideration
−Removed: The following table summarizes the fair value of purchase price consideration to acquire NanoSemi (in thousands):
+Added: The following table summarizes the fair value of purchase price consideration to acquire Company X (in thousands):
Description Amount
Fair value of purchase consideration:
−Removed: Cash $ 10,000
−Removed: Common stock issued (1)
−Removed: Deferred payments (2)
Contingent consideration (1)
1 unchanged sentence
_________________
−Removed: (1) The fair value of common stock issued in the merger is based on 804,163 shares issued on the September 9, 2020 acquisition date at the closing price of the Company’s common stock of $ 21.24 per share.
−Removed: (2) The fair value of the deferred payments was determined by discounting to present value payments totaling $ 35.0 million expected to be made to NanoSemi securityholders throughout 2021.
−Removed: (3) The fair value of contingent consideration is zero as the applicable financial objectives from July 1, 2020 through December 31, 2022 are not expected to be met based on the Company's forecast.
−Removed: Purchase Price Allocation
−Removed: The following is an allocation of purchase price as of the September 9, 2020 acquisition closing date based upon an estimate of the fair value of the assets acquired and the liabilities assumed by the Company in the acquisition (in thousands):
−Removed: Description Amount
−Removed: Purchase price allocation:
−Removed: Accounts receivable $ 175
−Removed: Prepaid expenses and other current assets 879
−Removed: Property and equipment 177
−Removed: Leased right-of-use assets 1,805
−Removed: Identifiable intangible assets 19,900
−Removed: Accounts payable ( 602 )
−Removed: Accrued expenses and other current liabilities ( 323 )
−Removed: Accrued compensation ( 223 )
−Removed: Long-term lease liabilities ( 1,546 )
−Removed: Other long-term liabilities ( 164 )
−Removed: Identifiable net assets acquired 20,078
−Removed: Goodwill 41,102
−Removed: Total purchase price $ 61,180
+Added: (1) The fair value of contingent consideration is based on applying the Monte Carlo simulation method to forecast achievement under various contingent consideration events which may result in up to $ 3.0 million in payments subject to the acquired business’s satisfying certain financial and personnel objectives by March 31, 2023 under the Purchase Agreement.
+Added: Key inputs in the valuation include forecasted revenue, revenue volatility and discount rate.
+Added: Underlying forecast mathematics were based on Geometric Brownian Motion in a risk-neutral framework and discounted back to the applicable period in which the accumulative thresholds were achieved at discount rates commensurate with the risk and expected payout term of the contingent consideration.
+Added: Preliminary Purchase Price Allocation
+Added: A preliminary allocation of purchase price as of the December 8, 2021 acquisition closing date based upon an estimate of
MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
+Added: the fair value of the assets acquired and the liabilities assumed by the Company in the acquisition primarily includes $ 4.4 million in identifiable intangible assets, and $ 0.5 million in net operating liabilities, with $ 3.8 million in goodwill:
The following is a summary of identifiable intangible assets acquired and the related expected lives for the finite-lived intangible assets (in thousands):
1 unchanged sentence
Finite-lived intangible assets:
−Removed: Developed technology 7 $ 17,500
−Removed: Trademarks and tradenames 7 1,000
−Removed: Customer-related intangible 5 900
−Removed: Product backlog 5.33 500
+Added: Licensed technology 3 $ 4,400
Total identifiable intangible assets acquired $ 4,400
Assumptions in the Allocations of Purchase Price
−Removed: Management prepared the purchase price allocations for the Wi-Fi and Broadband assets business and NanoSemi, and in doing so considered or relied in part upon reports of a third party valuation expert to calculate the fair value of certain acquired assets, which primarily included identifiable intangible assets, inventory, and property and equipment, and the portions of the purchase consideration for NanoSemi expected to be paid to NanoSemi securityholders in the future, as described above.
−Removed: Certain NanoSemi securityholders that are employees are not required to remain employed in order to receive the deferred payments and contingent consideration;
−Removed: accordingly, the fair value of the deferred payments and contingent consideration have been accounted for as a portion of the purchase consideration.
+Added: Management prepared the purchase price allocations for the Wi-Fi and Broadband assets business, NanoSemi, and Company X, and in doing so considered or relied in part upon reports of a third party valuation expert to calculate the fair value of certain acquired assets, which primarily included identifiable intangible assets, inventory, and property and equipment for the Wi-Fi and Broadband assets business and NanoSemi, and identifiable intangible assets for Company X, the portions of the purchase consideration for NanoSemi that were initially deferred and were subsequently paid to NanoSemi stockholders in the year ended December 31, 2021, as described above, and contingent consideration for NanoSemi and Company X.
+Added: Certain stockholders that are employees of NanoSemi and Company X were not required to remain employed in order to receive the deferred payments and contingent consideration;
+Added: accordingly, the fair value of the deferred payments and contingent consideration were accounted for as a portion of the purchase consideration.
Estimates of fair value require management to make significant estimates and assumptions.
−Removed: The goodwill recognized is attributable primarily to the acquired workforce, expected synergies, and other benefits that MaxLinear believes will result from integrating the operations of the Wi-Fi and Broadband assets business and NanoSemi with the operations of MaxLinear.
+Added: The goodwill recognized is attributable primarily to the acquired workforce, expected synergies, and other benefits that MaxLinear believes will result from integrating the operations of the Wi-Fi and Broadband assets business, NanoSemi, and Company X with the operations of MaxLinear.
Certain liabilities included in the purchase price allocations are based on management’s best estimates of the amounts to be paid or settled and based on information available at the time the purchase price allocations were prepared.
−Removed: Adjustments between the preliminary purchase price allocations initially recorded as reflected in the Company’s interim condensed consolidated financial statements as of September 30, 2020 and the amounts reflected as of December 31, 2020 primarily resulted from a refinement of the Company’s forecast with respect to the NanoSemi business, resulting in a decrease in estimated fair value of contingent consideration to $ 0 and a decrease in the valuation of intangible assets;
−Removed: and updates to our evaluation of certain income tax positions with respect to both acquisitions.
−Removed: Updates to the valuations of certain assets acquired and liabilities assumed and our evaluation of certain income tax positions may result in changes to the recorded amounts of assets and liabilities, with corresponding adjustments to goodwill amounts in subsequent periods.
−Removed: We expect to complete the purchase price allocations within 12 months of the respective acquisition dates.
−Removed: The fair value of the identified intangible assets acquired from the Wi-Fi and Broadband assets business and NanoSemi was estimated using an income approach.
+Added: There have been no adjustments between the preliminary purchase price allocations reflected as of December 31, 2020 for the Wi-Fi and Broadband assets business and NanoSemi, and the final purchase price allocations reflected as of December 31, 2021.
+Added: The fair value of the identified intangible assets acquired from the Wi-Fi and Broadband assets business, NanoSemi and Company X was estimated using an income approach.
Under the income approach, an intangible asset’s fair value is equal to the present value of future economic benefits to be derived from ownership of the asset.
Indications of value are developed by discounting future net cash flows to their present value at market-based rates of return.
−Removed: More specifically, the fair value of the developed technology, IPR&D and backlog assets was determined using the multi-period excess earnings method, or MPEEM.
+Added: More specifically, the fair value of the developed and licensed technology, IPR&D and backlog assets was determined using the multi-period excess earnings method, or MPEEM.
MPEEM is an income approach to fair value measurement attributable to a specific intangible asset being valued from the asset grouping’s overall cash-flow stream.
3 unchanged sentences
Future cash flows for each project were estimated based on forecasted revenue and costs, taking into account the expected product life cycles, market penetration, and growth rates.
−Removed: Developed technology will begin amortization immediately and IPR&D will begin amortization upon the completion of each project.
+Added: Developed technology began amortization immediately upon the closing of the transaction and IPR&D will begin amortization upon the completion of each project.
If any of the projects are abandoned, the Company will be required to impair the related IPR&D asset.
In connection with the acquisition of the Wi-Fi and Broadband assets business, the Company has assumed liabilities which primarily consist of accrued employee compensation and benefits in jurisdictions where such transfer is required either by law or by work council agreement.
−Removed: In connection with the acquisition of NanoSemi, the Company assumed certain operating liabilities.
+Added: In connection with the acquisition of NanoSemi and Company X, the Company assumed certain operating liabilities.
The liabilities assumed in these acquisitions are included in the respective purchase price allocations above.
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: Goodwill recorded in connection with the Wi-Fi and Broadband assets business and NanoSemi was $ 23.4 million and $ 41.1 million, respectively.
+Added: Goodwill recorded in connection with the Wi-Fi and Broadband assets business, NanoSemi and Company X was $ 23.4 million, $ 41.1 million, and $ 3.8 million respectively.
The Company does not expect to deduct any of the acquired goodwill for tax purposes.
−Removed: Proforma Combined Financial Information
−Removed: The following table presents unaudited pro forma combined financial information for each of the periods presented, as if the acquisitions of the Wi-Fi and Broadband assets business and NanoSemi had occurred at the beginning of fiscal year 2019:
−Removed: Years Ended December 31,
−Removed: (in thousands)
−Removed: Net revenue – proforma combined $ 703,165 $ 708,139
−Removed: Net loss – proforma combined $ ( 101,783 ) $ ( 152,070 )
−Removed: The following adjustments were included in the unaudited pro forma combined net revenues:
−Removed: Years Ended December 31,
−Removed: (in thousands)
−Removed: Net revenue $ 478,596 $ 317,180
−Removed: Net revenue – acquired businesses 224,569 390,959
−Removed: Net revenues – proforma combined $ 703,165 $ 708,139
−Removed: The following adjustments were included in the unaudited pro forma combined net loss:
−Removed: Years Ended December 31,
−Removed: (in thousands)
−Removed: Net loss $ ( 98,593 ) $ ( 19,898 )
−Removed: Results of operations – acquired businesses ( 63,882 ) ( 97,368 )
−Removed: Proforma adjustments
−Removed: Depreciation of property and equipment 5,810 2,020
−Removed: Amortization of intangible assets 11,428 17,583
−Removed: Inventory fair value adjustments 32,945 ( 32,945 )
−Removed: Acquisition and integration expenses 14,243 ( 14,243 )
−Removed: Interest expense ( 4,963 ) 2,816
−Removed: Other expense 1,867 ( 7,604 )
−Removed: Income taxes ( 638 ) ( 2,431 )
−Removed: Net loss – proforma combined $ ( 101,783 ) $ ( 152,070 )
−Removed: Net loss per share – proforma combined:
−Removed: Basic $ ( 1.39 ) $ ( 2.12 )
−Removed: Diluted $ ( 1.39 ) $ ( 2.12 )
−Removed: Shares used to compute net loss per share – proforma combined:
−Removed: Basic 73,133 71,809
−Removed: Diluted 73,133 71,809
MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: The pro forma combined financial information for the year ended December 31, 2020 includes aggregate non-recurring adjustments of $ 33.7 million consisting of inventory fair value adjustments of $ 32.9 million and amortization of intangible assets of $ 0.8 million, respectively, for which the related assets have useful lives of less than one year.
−Removed: The pro forma combined financial information is presented for illustrative purposes only and is not necessarily indicative of the consolidated results of operations of the consolidated business had the acquisitions actually occurred at the beginning of fiscal year 2019 or of the results of future operations of the consolidated business.
−Removed: The unaudited pro forma financial information does not reflect any operating efficiencies and cost saving that may be realized from the integration of the acquisitions in the Company's consolidated statements of operations.
−Removed: For the year ended December 31, 2020, $ 209.7 million of revenue and $ 110.7 million of gross profit, excluding $ 36.3 million consisting of inventory fair-value adjustments of $ 32.9 million and amortization of acquired intangible assets of $ 3.4 million for the Wi-Fi and Broadband assets business and NanoSemi since the acquisition date, are included in the Company’s consolidated statement of operations.
−Removed: Acquisition and integration-related costs of $ 14.2 million related to the acquisitions of the Wi-Fi and Broadband assets business and NanoSemi were included in selling, general, and administrative expenses in the Company’s statement of operations for the year ended December 31, 2020.
Restructuring Activity
1 unchanged sentence
Such restructuring plans include terminating employees, vacating certain leased facilities, and cancellation of contracts.
−Removed: The following table presents the activity related to the plans, which is included in restructuring charges in the consolidated statements of operations:
−Removed: Years Ended December 31,
+Added: The following table presents the activity related to the restructuring plans, which is included in restructuring charges in the consolidated statements of operations:
+Added: Year Ended December 31,
2021 2020 2019
1 unchanged sentence
Employee separation expenses $ 1,273 $ 1,620 $ 1,150
−Removed: Lease related expenses 1,998 1,301 1,608
+Added: Lease related charges 608 1,998 1,301
Other 323 215 185
$ 2,204 $ 3,833 $ 2,636
+Added: Lease related charges for the year ended December 31, 2021 included the impairment of leased right-of-use assets and leasehold improvements of $ 0.4 million and $ 0.2 million, respectively.
Lease related charges for the year ended December 31, 2020 included the impairment of leased right-of-use assets of $ 1.5 million related to a reduction in expected cash inflows from subleases.
−Removed: Lease related and other charges for the years ended December 31, 2019 and 2018 primarily related to exiting certain redundant facilities.
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: The following table presents a roll-forward of the Company's restructuring liability for the years ended December 31, 2020 and 2019.
+Added: Lease related and other charges for the year ended December 31, 2019 primarily related to exiting certain redundant facilities.
+Added: The following table presents a roll-forward of the Company’s restructuring liability for the year ended December 31, 2021 and 2020.
The restructuring liability is included in accrued expenses and other current liabilities and other long-term liabilities in the consolidated balance sheets.
−Removed: Employee Separation Expenses Lease Related Expenses Other Total
+Added: Employee Separation Expenses Lease Related Charges Other Total
(in thousands)
Liability as of December 31, 2019 $ — $ 818 $ 19 $ 837
−Removed: Transfer to right-of-use asset — ( 299 ) — ( 299 )
Restructuring charges 1,620 1,998 215 3,833
Cash payments ( 2,165 ) ( 322 ) ( 36 ) ( 2,523 )
−Removed: Non-cash charges — 46 ( 50 ) ( 4 )
+Added: Reimbursement due from Intel (Note 6) 4,415 — — 4,415
+Added: Non-cash charges and adjustments ( 596 ) ( 1,774 ) ( 195 ) ( 2,565 )
Liability as of December 31, 2020 $ 3,274 $ 720 $ 3 $ 3,997
1 unchanged sentence
Cash payments ( 1,833 ) ( 329 ) ( 25 ) ( 2,187 )
−Removed: Reimbursement due from Intel (Note 6) 4,415 — — 4,415
+Added: Reimbursement from Intel ( 2,711 ) ( 2,711 )
Non-cash charges and adjustments ( 3 ) ( 555 ) ( 301 ) ( 859 )
2 unchanged sentences
Long-term portion as of December 31, 2021 $ — $ 124 $ — $ 124
−Removed: As of December 31, 2020, the remaining employee separation balance primarily consists of reduction in force costs that will be reimbursed by Intel and other severance payments, and remaining lease related charges primarily consist of common area maintenance obligations.
+Added: As of December 31, 2021, the remaining lease related charges primarily consist of common area maintenance obligations.
The Company does not expect to incur additional material costs related to current restructuring plans.
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Goodwill and Intangible Assets
9 unchanged sentences
If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recorded.
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
As a result of the Company's impairment assessment, no goodwill impairment was recognized as of October 31, 2021.
In addition to its annual review, the Company performs a test of impairment when indicators of impairment are present.
−Removed: As of December 31, 2020, there were no indications of impairment of the Company’s goodwill balances.
+Added: During the years ended December 31, 2021, 2020, and 2019, there were no indications of impairment of the Company’s goodwill balances.
Acquired Intangibles
Finite-lived Intangible Assets
−Removed: The following table sets forth the Company’s finite-lived intangible assets resulting from business acquisitions and other purchases, which continue to be amortized:
+Added: The following table sets forth the Company’s finite-lived intangible assets resulting from business acquisitions and other purchases, which are amortized over their estimated useful lives:
December 31, 2021 December 31, 2020
8 unchanged sentences
6.2 $ 470,411 $ ( 320,471 ) $ 149,940 $ 454,930 $ ( 254,864 ) $ 200,066
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table sets forth amortization expense associated with finite-lived intangible assets, which is included in the consolidated statements of operations as follows:
1 unchanged sentence
2021 2020 2019
+Added: (in thousands)
Cost of net revenue $ 43,078 $ 37,784 $ 33,932
3 unchanged sentences
Amortization of finite-lived intangible assets in cost of net revenue in the consolidated statements of operations results primarily from acquired developed technology.
−Removed: The following table sets forth activity during the years ended December 31, 2020 and 2019 related to finite-lived intangible assets:
−Removed: Years Ended December 31,
+Added: The following table sets forth the activity related to finite-lived intangible assets:
+Added: Year Ended December 31,
(in thousands)
1 unchanged sentence
Acquisitions (Note 3) 4,400 70,700
−Removed: Other additions 2,799 86
−Removed: Transfers to developed technology from IPR&D — 4,400
+Added: Additions 7,581 2,799
Amortization ( 66,707 ) ( 61,318 )
1 unchanged sentence
Ending balance $ 149,940 $ 200,066
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: The Company regularly reviews the carrying amounts of its long-lived assets subject to depreciation and amortization, as well as the related useful lives, to determine whether indicators of impairment may exist which warrant adjustments to carrying values or estimated useful lives.
+Added: The Company regularly reviews the carrying amount of its long-lived assets subject to depreciation and amortization, as well as the related useful lives, to determine whether indicators of impairment may exist that warrant adjustments to carrying values or estimated useful lives.
An impairment loss is recognized when the sum of the expected future undiscounted net cash flows is less than the carrying amount of the asset.
Should impairment exist, the impairment loss is measured based on the excess of the carrying amount of the asset over the asset’s fair value.
−Removed: During the year ended December 31, 2019, no impairment losses related to finite-lived intangible assets were recognized.
−Removed: Impairment losses related to finite-lived intangible assets for the year ended December 31, 2020 was $ 0.1 million and related to purchased licensed technology and for the year ended December 31, 2018 was $2.2 million and related to acquired developed technology.
+Added: During the years ended December 31, 2021 and 2019, no impairment losses related to finite-lived intangible assets were recognized.
+Added: During the year ended December 31, 2020, the Company recognized impairment losses related to finite-lived intangible assets of $ 0.1 million, which was attributable to certain purchased licensed technology.
The following table presents future amortization of the Company’s finite-lived intangible assets at December 31, 2021:
3 unchanged sentences
Total $ 149,940
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Indefinite-lived Intangible Assets
Indefinite-lived intangible assets consist entirely of acquired in-process research and development technology, or IPR&D.
−Removed: The following table sets forth the Company’s activities related to the indefinite-lived intangible assets:
+Added: The following table sets forth the Company’s activities related to indefinite-lived intangible assets:
Years Ended December 31,
4 unchanged sentences
Ending balance $ 2,600 $ 7,200
−Removed: The Company performs its annual assessment of indefinite-lived intangible assets on October 31 each year or more frequently if events or changes in circumstances indicate that the asset might be impaired utilizing a qualitative test as a precursor to the quantitative test comparing the fair value of the assets with their carrying amount.
+Added: The Company performs its annual assessment of indefinite-lived intangible assets on October 31st each year or more frequently if events or changes in circumstances indicate that the asset might be impaired utilizing a qualitative test as a precursor to the quantitative test comparing the fair value of the assets with their carrying amount.
Based on the qualitative test, if it is more likely than not that indicators of impairment exists, the Company proceeds to perform a quantitative analysis.
Based on the Company’s assessment as of October 31, 2021, no indicators of impairment were identified.
−Removed: In the years ended December 31, 2020, 2019 and 2018, no IPR&D impairment losses were recorded.
+Added: During the years ended December 31, 2021, 2020, and 2019, no indicators of impairment were identified and, as a result, no IPR&D impairment losses were recorded.
Financial Instruments
3 unchanged sentences
Contingent consideration (Note 3) $ 2,700 $ —
−Removed: Interest rate swap $ — $ 37
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
The fair values of the Company’s financial instrument is the amount that would be received in an asset sale or paid to transfer a liability in an orderly transaction between unaffiliated market participants and is recorded using a hierarchical disclosure framework based upon the level of subjectivity of the inputs used in measuring assets and liabilities.
3 unchanged sentences
Unobservable inputs are used when little or no market data is available.
−Removed: The Company classifies its financial instrument within Level 2 of the fair value hierarchy on the basis of models utilizing market observable inputs.
−Removed: The interest rate swap has been valued on the basis of valuations provided by third-party pricing services, as derived from standard valuation or pricing models.
−Removed: Market-based observable inputs for the interest rate swap include one month LIBOR-based yield curves over the term of the swap.
−Removed: The Company reviews third-party pricing provider models, key inputs and assumptions and understands the pricing processes at its third-party providers in determining the overall reasonableness of the fair value of its Level 2 financial instruments.
−Removed: The Company also considers the risk of nonperformance by assessing the swap counterparty's credit risk in the estimate of fair value of the interest rate swap.
−Removed: Through the expiration of the swap in October 2020, the Company has not made any adjustments to the valuations obtained from its third party pricing providers.
−Removed: The contingent consideration liability is associated with the Company’s acquisition of NanoSemi (Note 3) and is classified as a Level 3 financial instrument.
−Removed: The fair value of contingent consideration is based on applying the Monte Carlo simulation method to forecast achievement under various contingent consideration events which may result in up to $35.0 million in payments subject to the acquired business’s satisfying certain financial objectives from July 1, 2020 through December 31, 2022, under the Merger Agreement.
−Removed: Key inputs in the valuation include forecasted revenue, of which the financial objectives are not expected to be met, revenue volatility and discount rate.
−Removed: Underlying forecast mathematics were based on Geometric Brownian Motion in a risk-neutral framework and discounted back to the applicable period in which the accumulative thresholds were achieved at discount rates commensurate with the risk and expected payout term of the contingent consideration.
+Added: The contingent consideration liability is associated with the Company’s acquisition of Company X (Note 3) and is classified as a Level 3 financial instrument that is subject to the acquired business’s satisfaction of certain financial and personnel objectives by March 31, 2023, under the Purchase Agreement.
+Added: The fair value of the contingent consideration is based on (1) applying the Monte Carlo simulation method, with underlying forecast mathematics based on Geometric Brownian motion in a risk-neutral framework, to forecast achievement of the acquired business’ financial objectives under various possible contingent consideration events and (2) a probability based methodology using management's inputs and assumptions to forecast achievement of the acquired business’ personnel objectives which combined may result in up to $ 3.0 million in total payments to the acquired business.
+Added: Key inputs in the valuation include forecasted revenue, revenue volatility, discount rate and discount term as it relates to the financial objectives and probability of achievement, discount term and discount rate as it relates to the personnel objectives.
The following are the financial instruments that are measured on a recurring basis.
−Removed: The contingent consideration liability, a Level 3 financial instrument, was $ 0 as of December 31, 2020.
−Removed: The interest rate swap, which expired in October 2020 and was a Level 2 financial instrument, was a liability of $ 0.04 million as of December 31, 2019.
−Removed: The following table summarizes activity for the interest rate swap:
+Added: The contingent consideration liability, a Level 3 financial instrument, was $ 2.7 million as of December 31, 2021.
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: The following table summarizes activity for the contingent consideration:
Fair Value at December 31,
(in thousands)
+Added: Contingent consideration
+Added: Beginning balance $ — $ —
+Added: Acquisitions (Note 3) 2,700 —
+Added: Gain (loss) recognized in earnings — —
+Added: Ending balance $ 2,700 $ —
+Added: Net loss for the period included in earnings attributable to contingent consideration held at the end of the period $ — $ —
Interest rate swap
5 unchanged sentences
Financial Instruments Not Recorded at Fair Value on a Recurring Basis
−Removed: Some of the Company’s financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature.
+Added: Some of the Company’s financial instruments are recorded at amounts that approximate fair value due to their liquid or short-term nature or by election on investments in privately-held entities (Note 7).
Such financial assets and financial liabilities include:
−Removed: cash and cash equivalents, restricted cash, net receivables, certain other assets, accounts payable, accrued price protection liability, accrued expenses, accrued compensation costs, and other current liabilities.
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
+Added: cash and cash equivalents, restricted cash, net receivables, investments in privately-held entities, certain other assets, accounts payable, accrued price protection liability, accrued expenses, accrued compensation costs, and other current liabilities.
The Company’s long-term debt is not recorded at fair value on a recurring basis, but is measured at fair value for disclosure purposes (Note 8).
7 unchanged sentences
Total cash, cash equivalents and restricted cash $ 131,738 $ 150,034
−Removed: As of December 31, 2020 and December 31, 2019, cash and cash equivalents included $ 20.4 million and $ 20.4 million of money market funds, respectively.
−Removed: As of December 31, 2020 and 2019, the Company has restricted cash of $ 1.1 million and $ 0.4 million, respectively.
+Added: As of December 31, 2021 and December 31, 2020, cash and cash equivalents included money market funds of approximately $ 20.4 million.
+Added: As of December 31, 2021 and December 31, 2020, the Company has restricted cash of approximately $ 1.2 million and $ 1.1 million, respectively.
The cash is restricted in connection with guarantees for certain import duties and office leases.
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Inventory consists of the following:
11 unchanged sentences
$ 22,000 $ 47,421
−Removed: As of December 31, 2020, other receivables of $ 32.8 million consist of amounts due from Intel of approximately $ 28.4 million for amounts collected on the Company’s behalf from customers on sales of the Company’s products under the transition services agreement and of approximately $ 4.4 million for reimbursement of certain severance and other personnel-related costs pursuant to the Asset Purchase Agreement (Note 3).
−Removed: Property and equipment consist of the following:
+Added: As of December 31, 2020, other receivables of $ 32.8 million consisted of amounts due from Intel of $ 28.4 million for amounts collected on the Company’s behalf from customers on sales of the Company’s products under the transition services agreement and of $ 4.4 million for reimbursement of certain severance-related costs pursuant to the Asset Purchase Agreement (Note 3).
+Added: Property and equipment, net consists of the following:
(in Years) December 31, 2021 December 31, 2020
10 unchanged sentences
145,319 109,300
−Removed: Less accumulated depreciation and amortization ( 69,830 ) ( 59,343 )
+Added: accumulated depreciation and amortization ( 84,395 ) ( 69,830 )
$ 60,924 $ 39,470
+Added: Depreciation expense for the years ended December 31, 2021, 2020, and 2019 was $ 17.7 million, $ 11.3 million and $ 7.3 million, respectively.
MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: Depreciation expense for the years ended December 31, 2020, 2019, and 2018 was $ 11.3 million, $ 7.3 million, and $ 11.1 million, respectively.
+Added: Included in other long-term assets is an investment in a privately held entity of $ 5.0 million as of December 31, 2021.
+Added: The Company does not have the ability to exercise significant influence or control over such entity and has accounted for the investment as a financial instrument.
+Added: Given that there is not a readily determinable fair value, the Company is electing to measure such investment at cost, less any impairment, and adjust the carrying value to fair value if any observable price changes for similar investments in the same entity are identified.
Accrued price protection liability consists of the following activity:
−Removed: Years Ended December 31,
+Added: Year Ended December 31,
(in thousands)
22 unchanged sentences
$ 57,268 $ 105,842
−Removed: As of December 31, 2020, other payables of $ 17.4 million consist of amounts due to Intel of approximately $ 9.1 million for purchases of inventory and $ 8.3 million for other operating expenses incurred by Intel on behalf of MaxLinear under the transition services agreement (Note 3).
+Added: As of December 31, 2020, payables under transition services agreement of $ 17.4 million consisted of amounts due to Intel of approximately $ 9.1 million for purchases of inventory and $ 8.3 million for other operating expenses incurred under the transition services agreement.
MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: The following table summarizes the balances in accumulated other comprehensive income (loss) by component:
+Added: The following table summarizes the change in balances of accumulated other comprehensive income (loss) by component:
Cumulative Translation Adjustments Interest Rate Hedge Pension and Other Defined Benefit Plan Obligation Total
2 unchanged sentences
Other comprehensive income (loss) before reclassifications, net of tax 1,010 225 1,172 2,407
−Removed: Balance at December 31, 2019 ( 747 ) ( 140 ) — ( 887 )
−Removed: Other comprehensive income (loss) before reclassifications, net of tax 1,010 225 1,172 2,407
Amounts reclassified, net of tax — ( 85 ) — ( 85 )
1 unchanged sentence
Balance at December 31, 2020 263 — 1,172 1,435
+Added: Other comprehensive income (loss) before reclassifications, net of tax ( 242 ) — 932 690
+Added: Balance at December 31, 2021 $ 21 $ — $ 2,104 $ 2,125
Debt and Interest Rate Swap
The carrying amount of the Company’s long-term debt consists of the following:
−Removed: December 31, 2020 December 31, 2019
+Added: 2021 December 31,
(in thousands)
Principal balance:
−Removed: Initial term loan $ 212,000 $ 212,000
−Removed: Incremental term loan 157,812 —
−Removed: 369,812 212,000
+Added: Initial term loan under June 23, 2021 credit agreement $ 310,000 $ —
+Added: Initial term loan under May 12, 2017 credit agreement — 212,000
+Added: Incremental term loan under May 12, 2017 credit agreement, as amended — 157,812
+Added: Total principal balance 310,000 369,812
Unamortized debt discount ( 816 ) ( 1,767 )
3 unchanged sentences
Long-term debt, non-current portion $ 306,153 $ 363,592
−Removed: As of December 31, 2020 and 2019, the weighted average effective interest rate on long-term debt was approximately 4.4 % and 4.9 %, respectively.
−Removed: During the year ended December 31, 2020, the Company recognized amortization of debt discount of $ 0.4 million and debt issuance costs of $ 1.1 million to interest expense.
−Removed: During the year ended December 31, 2019, the Company recognized amortization of debt discount of $ 0.3 million and debt issuance costs of $ 0.9 million to interest expense.
−Removed: During the year ended December 31, 2018, the Company recognized amortization of debt discount of $ 0.3 million and debt issuance costs of $ 0.8 million to interest expense.
−Removed: The approximate fair value of the term loan as of December 31, 2020 and 2019 was $ 376.1 million and $ 214.6 million, respectively, which was estimated on the basis of inputs that are observable in the market and which is considered a Level 2 measurement method in the fair value hierarchy.
+Added: As of December 31, 2021 and December 31, 2020, the weighted average effective interest rate on aggregate debt was approximately 3.2 % and 4.4 %, respectively.
+Added: During the years ended December 31, 2021, 2020 and 2019, the Company recognized total amortization of debt discount and debt issuance costs of $ 1.3 million, $ 1.5 million, and $ 1.2 million, respectively, to interest expense.
+Added: The approximate aggregate fair value of the term loans outstanding as of December 31, 2021 and December 31, 2020 was $ 311.0 million and $ 376.1 million, respectively, which was estimated on the basis of inputs that are observable in the market and which is considered a Level 2 measurement method in the fair value hierarchy.
+Added: As of December 31, 2021, the outstanding principal balance of $ 310.0 million is due in full on June 23, 2028 upon maturity of the loan.
MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: As of December 31, 2020, future payments of principal are as follows:
−Removed: (in thousands)
−Removed: Total principal payments due 369,812
−Removed: current portion —
−Removed: Long-term debt principal, non-current portion $ 369,812
−Removed: Initial Term Loan
−Removed: On May 12, 2017, the Company entered into a credit agreement with certain lenders and a collateral agent in connection with the acquisition of Exar Corporation.
−Removed: The credit agreement provides for an initial secured term B loan facility, or the
−Removed: “Initial Term Loan,” in an aggregate principal amount of $ 425.0 million.
−Removed: The credit agreement permits the Company to request incremental loans in an aggregate principal amount not to exceed the sum of $ 160.0 million (subject to adjustments for any voluntary prepayments), plus an unlimited amount that is subject to pro forma compliance with certain secured leverage ratio and total leverage ratio tests.
−Removed: Incremental loans are subject to certain additional conditions, including obtaining additional commitments from the lenders then party to the credit agreement or new lenders.
−Removed: Loans under the credit agreement bear interest, at the Company’s option, at a rate equal to either (i) a base rate equal to the highest of (x) the federal funds rate, plus 0.50% , (y) the prime rate then in effect and (z) an adjusted LIBOR rate determined on the basis of a one- three- or six-month interest period, plus 1.0% or (ii) an adjusted LIBOR rate, subject to a floor of 0.75% , in each case, plus an applicable margin of 2.50 % in the case of LIBOR rate loans and 1.50 % in the case of base rate loans.
−Removed: Commencing on September 30, 2017, the Initial Term Loan will amortize in equal quarterly installments equal to 0.25 % of the original principal amount of the Initial Term Loan, with the balance payable on the maturity date.
−Removed: The Initial Term Loan has a term of seven years and will mature on May 12, 2024, at which time all outstanding principal and accrued and unpaid interest on the Initial Term Loan must be repaid.
−Removed: The Company is also required to pay fees customary for a credit facility of this size and type.
−Removed: The Company is required to make mandatory prepayments of the outstanding principal amount of term loans under the credit agreement with the net cash proceeds from the disposition of certain assets and the receipt of insurance proceeds upon certain casualty and condemnation events, in each case, to the extent not reinvested within a specified time period, from excess cash flow beyond stated threshold amounts, and from the incurrence of certain indebtedness.
−Removed: The Company has the right to prepay its term loans under the credit agreement, in whole or in part, at any time without premium or penalty, subject to certain limitations and a 1.0% soft call premium applicable during the first six months for the loan term.
−Removed: The Company exercised its right to prepay and made aggregate payments of principal of $ 213.0 million to date through December 31, 2020.
−Removed: The Company’s obligations under the credit agreement are required to be guaranteed by certain of its domestic subsidiaries meeting materiality thresholds set forth in the credit agreement.
−Removed: Such obligations, including the guaranties, are secured by substantially all of the assets of the Company and the subsidiary guarantors pursuant to a security agreement with the collateral agent.
−Removed: The credit agreement contains customary affirmative and negative covenants, including covenants limiting the ability of the Company and its restricted subsidiaries to, among other things, incur debt, grant liens, undergo certain fundamental changes, make investments, make certain restricted payments, and sell assets, in each case, subject to limitations and exceptions.
−Removed: As of December 31, 2020, the Company was in compliance with such covenants.
−Removed: The credit agreement also contains customary events of default that include, among other things, certain payment defaults, cross defaults to other indebtedness, covenant defaults, change in control defaults, judgment defaults, and bankruptcy and insolvency defaults.
−Removed: If an event of default exists, the lenders may require immediate payment of all obligations under the credit agreement, and may exercise certain other rights and remedies provided for under the credit agreement, the other loan documents and applicable law.
+Added: Initial Term Loan and Revolving Facility under June 23, 2021 Credit Agreement
+Added: On June 23, 2021, the Company entered into a Credit Agreement (the “June 23, 2021 Credit Agreement”), by and among the Company, the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as administrative agent and collateral agent, that provides for a senior secured term B loan facility, or the “Initial Term Loan under the June 23, 2021 Credit Agreement,” in an aggregate principal amount of $ 350.0 million and a senior secured revolving credit facility, or the “Revolving Facility,” in an aggregate principal amount of up to $ 100.0 million.
+Added: The proceeds of the Initial Term Loan under the June 23, 2021 Credit Agreement were used (i) to repay in full all outstanding indebtedness under that certain Credit Agreement dated May 12, 2017, by and among the Company, MUFG Bank Ltd., as administrative agent and MUFG Union Bank, N.A., as collateral agent and the lenders from time to time party thereto (as amended by Amendment No.
+Added: 1, dated July 31, 2020 and as further amended, amended and restated, waived, supplemented or otherwise modified from time to time, the “May 12, 2017 Credit Agreement”) and (ii) to pay fees and expenses incurred in connection therewith.
+Added: The remaining proceeds of the Initial Term Loan under the June 23, 2021 Credit Agreement are available for general corporate purposes and the proceeds of the Revolving Facility may be used to finance the working capital needs and other general corporate purposes of the Company and its subsidiaries.
+Added: As of December 31, 2021, the Revolving Facility was undrawn.
+Added: The June 23, 2021 Credit Agreement permits the Company to request incremental loans in an aggregate principal amount not to exceed the sum of an amount equal to the greater of (x) $ 175.0 million and (y) 100 % of consolidated EBITDA, plus the amount of certain voluntary prepayments, plus an unlimited amount that is subject to pro forma compliance with certain first lien net leverage ratio, secured net leverage ratio and total net leverage ratio tests.
+Added: Incremental loans are subject to certain additional conditions, including obtaining additional commitments from the lenders then party to the June 23, 2021 Credit Agreement or new lenders.
+Added: Under the June 23, 2021 Credit Agreement, the Initial Term Loan bears interest, at the Company’s option, at a per annum rate equal to either (i) a base rate equal to the highest of (x) the federal funds rate, plus 0.50 %, (y) the prime rate then in effect and (z) an adjusted LIBOR rate determined on the basis of a one-month interest period plus 1.00 %, in each case, plus an applicable margin of 1.25 % or (ii) an adjusted LIBOR rate, subject to a floor of 0.50 %, plus an applicable margin of 2.25 %.
+Added: Loans under the Revolving Facility initially bear interest, at a per annum rate equal to either (i) a base rate (as calculated above) plus an applicable margin of 0.00 %, or (ii) an adjusted LIBOR rate (as calculated above) plus an applicable margin of 1.00 %.
+Added: Following delivery of financial statements for the Company’s fiscal quarter ending June 30, 2021, the applicable margin for loans under the Revolving Facility will range from 0.00 % to 0.75 % in the case of base rate loans and 1.00 % to 1.75 % in the case of LIBOR rate loans, in each case, depending on the Company’s secured net leverage ratio as of the most recently ended fiscal quarter.
+Added: The Company is required to pay commitment fees ranging from 0.175 % to 0.25 % per annum on the daily undrawn commitments under the Revolving Facility, depending on the Company’s secured net leverage ratio as of the most recently ended fiscal quarter.
+Added: Commencing on September 30, 2021, the Initial Term Loan under the June 23, 2021 Credit Agreement will amortize in equal quarterly installments equal to 0.25 % of the original principal amount of the Initial Term Loan under the June 23, 2021 Credit Agreement, with the balance payable on the maturity date.
+Added: The June 23, 2021 Credit Agreement contains customary provisions specifying alternative interest rate calculations to be employed at such time as LIBOR ceases to be available as a benchmark for establishing the interest rate on floating interest rate borrowings.
+Added: The Company is required to make mandatory prepayments of the outstanding principal amount of term loans under the June 23, 2021 Credit Agreement with the net cash proceeds from the disposition of certain assets and the receipt of insurance proceeds upon certain casualty and condemnation events, in each case, to the extent not reinvested within a specified time period, from excess cash flow beyond stated threshold amounts, and from the incurrence of certain indebtedness.
+Added: The Company has the right to prepay its term loans under the June 23, 2021 Credit Agreement, in whole or in part, at any time without premium or penalty, subject to certain limitations and a 1.0 % soft call premium applicable during the first six months following the closing date of the June 23, 2021 Credit Agreement.
+Added: The Initial Term Loan under the June 23, 2021 Credit Agreement will mature on June 23, 2028, at which time all outstanding principal and accrued and unpaid interest on the Initial Term Loan under the June 23, 2021 Credit Agreement must be repaid.
+Added: The Revolving Facility will mature on June 23, 2026, at which time all outstanding principal and accrued and unpaid interest under the Revolving Facility must be repaid.
+Added: The Company is also obligated to pay fees customary for a credit facility of this size and type.
+Added: The Company’s obligations under the June 23, 2021 Credit Agreement are required to be guaranteed by certain of its domestic subsidiaries meeting materiality thresholds set forth in the June 23, 2021 Credit Agreement.
+Added: Such obligations, including the guaranties, are secured by substantially all of the assets of the Company and the subsidiary guarantors pursuant to a Security Agreement, dated as of June 23, 2021, by and among the Company, the subsidiary guarantors from time to time party thereto, and Wells Fargo Bank, National Association, as collateral agent.
+Added: The June 23, 2021 Credit Agreement contains customary affirmative and negative covenants, including covenants limiting the ability of the Company and its restricted subsidiaries to, among other things, incur debt, grant liens, undergo certain
MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: The debt is carried at its principal amount, net of unamortized debt discount and issuance costs, and is not adjusted to fair value each period.
−Removed: The issuance date fair value of the liability component of the debt in the amount of $ 398.5 million was determined using a discounted cash flow analysis, in which the projected interest and principal payments were discounted back to the issuance date of the term loan at a market interest rate for nonconvertible debt of 4.6 %, which represents a Level 2 fair value measurement.
−Removed: The debt discount of $ 2.1 million and debt issuance costs of $ 6.0 million are being amortized to interest expense using the effective interest method from the issuance date through the contractual maturity date of the term loan of May 12, 2024.
−Removed: Incremental Term Loan
−Removed: In connection with the acquisition of the Wi-Fi and Broadband assets business, on July 31, 2020, the Company entered into an incremental term loan agreement with certain lenders that amends the credit agreement, dated as of May 12, 2017 with a secured incremental term loan facility in an aggregate principal amount of $ 175.0 million (the “Incremental Term Loan”).
−Removed: The Incremental Term Loan bears interest, at the Company’s option, at an Adjusted LIBOR plus a fixed applicable margin of 4.25 % per annum or an Adjusted Base Rate plus a fixed applicable margin of 3.25 % per annum.
−Removed: The Incremental Term Loan is subject to a financial covenant of an initial maximum total net leverage ratio of 3.5 to 1 which decreases to 3.0 to 1 beginning with the sixth full fiscal quarter ending after July 31, 2020.
−Removed: During any period during which the Company (i) fails to maintain a public corporate rating from S&P that is equal to or higher than BB- and a public corporate rating from Moody's that is equal to or higher than Ba3 or (ii) fails to maintain a total leverage ratio of 3.0 to 1 or less, the applicable margin will increase to 4.75% in the case of LIBOR Rate loans and 3.75% in the case of Base Rate loans.
+Added: fundamental changes, make investments, make certain restricted payments, and sell assets, in each case, subject to limitations and exceptions set forth in the June 23, 2021 Credit Agreement.
+Added: The Revolving Facility also prohibits the Company from having a secured net leverage ratio in excess of 3.50 :1.00 (subject to a temporary increase to 3.75 :1.00 following the consummation of certain material permitted acquisitions) as of the last day of any fiscal quarter of the Company (commencing with the fiscal quarter ending September 30, 2021) if the aggregate borrowings under the Revolving Facility exceed 1 % of the aggregate commitments thereunder (subject to certain exceptions set forth in the June 23, 2021 Credit Agreement) as of such date.
As of December 31, 2021, the Company was in compliance with such covenants.
−Removed: Commencing on July 31, 2020, the Incremental Term Loan amortizes in quarterly installments of principal equal to (i) 1.25 % of the original aggregate principal amount of the Incremental Term Loan on the last day of each of the first through fourth full fiscal quarters of the Company after July 31, 2020, (ii) 2.50 % of the original aggregate principal amount of the Incremental Term Loan on the last day of each of the fifth through eighth full fiscal quarters of the Company after July 31, 2020, and (iii) 3.75 % of the original aggregate principal amount of the Incremental Term Loan on the last day of each of the ninth through the eleventh full fiscal quarters of the Company after July 31, 2020.
−Removed: The Incremental Term Loan has a term of three years and will mature on July 31, 2023, at which time all outstanding principal and accrued and unpaid interest on the Incremental Term Loan is due.
−Removed: The Company is also required to pay fees customary for a credit facility of this size and type.
−Removed: The Company has made aggregate payments of principal of $ 17.2 million to date through December 31, 2020.
+Added: The June 23, 2021 Credit Agreement also contains customary events of default that include, among other things, certain payment defaults, cross defaults to other indebtedness, covenant defaults, change in control defaults, judgment defaults, and bankruptcy and insolvency defaults.
+Added: If an event of default exists, the lenders may require immediate payment of all obligations under the June 23, 2021 Credit Agreement and may exercise certain other rights and remedies provided for under the June 23, 2021 Credit Agreement , the other loan documents and applicable law.
The debt is carried at its principal amount, net of unamortized debt discount and issuance costs, and is not adjusted to fair value each period.
The issuance date fair value of the liability component of the debt in the amount of $ 350.2 million was determined using a discounted cash flow analysis, in which the projected interest and principal payments were discounted back to the issuance date of the term loan at a market interest rate for nonconvertible debt of 3.4 %, which represents a Level 2 fair value measurement.
−Removed: The debt discount of $ 0.9 million and debt issuance costs of $ 1.8 million are being amortized to interest expense using the effective interest method from the issuance date through the contractual maturity date of the term loan of July 31, 2023.
−Removed: Interest Rate Swap
−Removed: In November 2017, the Company entered into a fixed-for-floating interest rate swap with an amortizing notional amount to swap a substantial portion of variable rate LIBOR interest payments under its term loans for fixed interest payments bearing an interest rate of 1.74685 %.
−Removed: The interest rate swap expired in October 2020.
−Removed: The Company's outstanding debt was still subject to a 2.5 % fixed applicable margin during the term of the loan.
−Removed: The interest rate swap was designated as a cash flow hedge of a portion of floating rate interest payments on long-term debt and effectively fixed the interest rate on a substantial portion of the Company’s long-term debt at approximately 4.25 %.
−Removed: Accordingly, the Company applied cash flow hedge accounting to the interest rate swap and it was recorded at fair value as an asset or liability and the effective portion of changes in the fair value of the interest rate swap, as measured quarterly, were reported in other comprehensive income (loss).
−Removed: As of December 31, 2019, the fair value of the interest rate swap was a $ 0.04 million liability and was included in other current liabilities in the consolidated balance sheet (Note 6).
−Removed: The change in fair value related to the interest rate swap asset included in other comprehensive income (loss) for the years ended December 31, 2020, 2019, and 2018 was a $ 0.1 million increase, a $ 1.7 million decrease and a $ 0.9 million increase in fair value, respectively.
−Removed: Upon expiration of the interest rate swap, a total $ 0.1 million of unrealized gain was recorded in interest income and included in gain/loss on foreign currency and other in the statement of cash flows at December 31, 2020.
+Added: The debt discount of $ 0.9 million and debt issuance costs of $ 2.9 million associated with the Initial Term Loan under the June 23, 2021 Credit Agreement are being amortized to interest expense using the effective interest method over its seven-year term.
+Added: Debt issuance costs of $ 0.4 million associated with the Revolving Facility are being amortized to interest expense over its five-year term.
+Added: Initial Term Loan under May 12, 2017 Credit Agreement
+Added: On May 12, 2017, the Company entered into the May 12, 2017 Credit Agreement in connection with the acquisition of Exar Corporation.
+Added: The May 12, 2017 Credit Agreement provided for an initial secured term B loan facility, or the “Initial Term Loan under the May 12, 2017 Credit Agreement,” in an aggregate principal amount of $ 425.0 million.
+Added: The May 12, 2017 Credit Agreement permitted the Company to request incremental loans in an aggregate principal amount not to exceed the sum of an amount equal to $ 160.0 million, plus the amount of certain voluntary prepayments, plus an unlimited amount that is subject to pro forma compliance with certain secured leverage ratio and total leverage ratio tests.
+Added: Incremental loans were subject to certain additional conditions, including obtaining additional commitments from the lenders then party to the credit agreement or new lenders.
+Added: Loans under the May 12, 2017 Credit Agreement bore interest, at the Company’s option, at a rate equal to either (i) a base rate equal to the highest of (x) the federal funds rate, plus 0.50 %, (y) the prime rate then in effect and (z) an adjusted LIBOR rate determined on the basis of a one - three - or six-month interest period, plus 1.0 % or (ii) an adjusted LIBOR rate, subject to a floor of 0.75 %, in each case, plus an applicable margin of 2.50 % in the case of LIBOR rate loans and 1.50 % in the case of base rate loans.
+Added: Commencing on September 30, 2017, the Initial Term Loan under the May 12, 2017 Credit Agreement amortized in equal quarterly installments equal to 0.25 % of the original principal amount of the Initial Term Loan under the May 12, 2017 Credit Agreement, with the balance payable on the maturity date.
+Added: The Initial Term Loan under the May 12, 2017 Credit Agreement had a term of seven years and was scheduled to mature on May 12, 2024, at which time all outstanding principal and accrued and unpaid interest on the Initial Term Loan under the May 12, 2017 Credit Agreement was due.
+Added: The Company was required to make mandatory prepayments of the outstanding principal amount of term loans under the May 12, 2017 Credit Agreement with the net cash proceeds from the disposition of certain assets and the receipt of insurance proceeds upon certain casualty and condemnation events, in each case, to the extent not reinvested within a specified time period, from excess cash flow beyond stated threshold amounts, and from the incurrence of certain indebtedness.
+Added: The Company had the right to prepay its term loans under the May 12, 2017 Credit Agreement, in whole or in part, at any time without premium or penalty, subject to certain limitations and a 1.0 % soft call premium applicable during the first six months of the loan term.
+Added: On June 23, 2021, the Company exercised its right to prepay the Initial Term Loan under the May 12, 2017 Credit Agreement and repaid the outstanding principal amount of the Initial Term Loan under the May 12, 2017 Credit Agreement, plus accrued and unpaid interest in full with the proceeds of the Initial Term Loan under the June 23, 2021 Credit Agreement.
+Added: Incremental Term Loan under May 12, 2017 Credit Agreement, As Amended
+Added: In connection with the acquisition of the Wi-Fi and Broadband assets business, on July 31, 2020, the Company entered into an incremental term loan agreement with certain lenders that amended the May 12, 2017 Credit Agreement and provided for a secured incremental term loan facility in an aggregate principal amount of $ 350.0 million (the “Incremental Term Loan”).
MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: Stock-Based Compensation and Employee Benefit Plans
+Added: The Incremental Term Loan bore interest, at the Company’s option, at an Adjusted LIBOR plus a fixed applicable margin of 4.25 % per annum or an Adjusted Base Rate plus a fixed applicable margin of 3.25 % per annum.
+Added: Commencing on July 31, 2020, the Incremental Term Loan amortized in quarterly installments of principal equal to (i) 1.25 % of the original aggregate principal amount of the Incremental Term Loan on the last day of each of the first through fourth full fiscal quarters of the Company after July 31, 2020, (ii) 2.50 % of the original aggregate principal amount of the Incremental Term Loan on the last day of each of the fifth through eighth full fiscal quarters of the Company after July 31, 2020, and (iii) 3.75 % of the original aggregate principal amount of the Incremental Term Loan on the last day of each of the ninth through the eleventh full fiscal quarters of the Company after July 31, 2020.
+Added: The Incremental Term Loan had a term of three years and was scheduled to mature on July 31, 2023, at which time all outstanding principal and accrued and unpaid interest on the Incremental Term Loan was due.
+Added: On June 23, 2021, the Company exercised its right to prepay the Incremental Term Loan and repaid the outstanding principal amount of the Incremental Term Loan, plus accrued and unpaid interest in full with the proceeds of the Initial Term Loan under the June 23, 2021 Credit Agreement.
+Added: In connection with the settlement of the indebtedness under the May 12, 2017 Credit Agreement, in the year ended December 31, 2021, the Company recognized an aggregate loss on debt extinguishment of $ 5.2 million consisting of unamortized debt issuance costs and discounts.
+Added: Interest Rate Swap
+Added: In November 2017, the Company entered into a fixed-for-floating interest rate swap with an amortizing notional amount to swap a substantial portion of variable rate LIBOR interest payments under its initial term loan for fixed interest payments bearing an interest rate of 1.74685 % through the expiration of the swap in October 2020.
+Added: The Company’s then outstanding initial term loan was still subject to a 2.5 % fixed applicable margin during the term of the loan.
+Added: The interest rate swap was designated as a cash flow hedge of a portion of floating rate interest payments on the initial term loan and effectively fixed the interest rate on a substantial portion of the Company’s then outstanding long-term debt at approximately 4.25 % until the expiration of the swap in October 2020.
+Added: Accordingly, the Company applied cash flow hedge accounting to the interest rate swap and it was recorded at fair value as an asset or liability and the effective portion of changes in the fair value of the interest rate swap, as measured quarterly, were reported in other comprehensive income (loss) until expiration of the swap.
+Added: The change in fair value related to the interest rate swap asset included in other comprehensive income (loss) for the years ended December 31, 2021, 2020 and 2019 was a $ 0.0 million increase, a $ 0.1 million increase, and a $ 1.7 million decrease in fair value, respectively.
+Added: Upon expiration of the interest rate swap, a total $ 0.1 million of unrealized gain was recorded in interest income and included in gain/loss on foreign currency and other in the statement of cash flows at December 31, 2020.
+Added: Stock-Based Compensation
Each share of common stock is entitled to one vote per share and holders of the common stock vote as a single class of stock on any matter that is submitted to a vote of stockholders.
−Removed: Employee Compensation Plans
+Added: Employee Stock-Based Compensation Plans
At December 31, 2021, the Company had stock-based compensation awards outstanding under the following plans:
−Removed: the 2004 Stock Plan, the 2010 Equity Incentive Plan, as amended, or 2010 Plan, and the 2010 Employee Stock Purchase Plan, or ESPP, and plans under which equity incentive awards were assumed in connection with the acquisitions of Entropic Corporation in 2015 and Exar Corporation in 2017.
−Removed: All current stock awards are issued under the 2010 Plan and ESPP.
+Added: the 2010 Equity Incentive Plan, as amended, or 2010 Plan, and the 2010 Employee Stock Purchase Plan, or ESPP.
2010 Equity Incentive Plan
The 2010 Plan, as amended, provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance-based stock awards, and other forms of equity compensation, or collectively, stock awards.
−Removed: The aggregate number of shares of common stock that may be issued pursuant to stock awards under the 2010 Plan will increase by any shares subject to stock options or other awards granted under the 2004 Stock Plan that expire or otherwise terminate without having been exercised in full and shares issued pursuant to awards granted under the 2004 Stock Plan that are forfeited to or repurchased by the Company.
−Removed: In addition, the number of shares of common stock reserved for issuance will automatically increase on the first day of each fiscal year, equal to the lesser of:
+Added: The number of shares of common stock reserved for issuance will automatically increase on the first day of each fiscal year, equal to the lesser of:
2,583,311 shares of the Company’s common stock;
1 unchanged sentence
or such lesser amount as the Company’s board of directors may determine.
−Removed: Options granted will generally vest over a four years period and the term can be from seven to ten years .
+Added: Options granted will generally vest over a period of four years and the term can be from seven to ten years .
The 2010 plan, as amended, contains a clawback policy, which requires the Company's executive officers to repay to MaxLinear certain incentive compensation if (i) the Company restates its financial statements as a result of a material error or due to material non-compliance with reporting requirements under applicable law;
−Removed: (ii) no more than three (3) years have elapsed since the original filing date of the financial statements;
+Added: (ii) no more than three (3) years have
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: elapsed since the original filing date of the financial statements;
and (iii) an independent committee of the board’s compensation committee determines, in its sole discretion, that the misreporting event occurred due to fraud or intentional misconduct within MaxLinear and, following consideration of such factors as the committee may deem reasonable and appropriate, including the extent to which an executive officer knew or should have known of the factors resulting in the misreporting, that the executive officer should repay any “recoverable compensation.” Recoverable compensation is defined in the clawback policy but generally includes any cash or equity compensation paid to executive officers under the Company's Executive Incentive Bonus Plan or 2010 Equity Incentive Plan, as amended, to the extent the amount actually paid by MaxLinear exceeds the amount that would have been paid if the financial misreporting event had not occurred.
To date, there has been no repayment of compensation from executive officers pursuant to such clawback policy.
−Removed: As of December 31, 2020, the number of shares reserved for future issuance under the 2010 Plan and awards outstanding under the 2004 Plan are 14,879,764 shares and 0 shares, respectively.
+Added: As of December 31, 2021, the number of shares of common stock available for future issuance under the 2010 Plan was 15,116,743 shares.
2010 Employee Stock Purchase Plan
9 unchanged sentences
Generally, all eligible employees, including executive officers, employed by the Company may participate in the ESPP and may contribute up to 15 % of their earnings for the purchase of the Company’s common stock under the ESPP.
−Removed: Unless otherwise determined by the Company’s board of directors, common stock will be purchased for accounts of employees participating in the ESPP at a price per share equal to the lower of (a) 85 % of the fair market value of a share of the Company’s common stock on the first date of an offering or (b) 85 % of the fair market value of a share of the Company’s
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: common stock on the date of purchase.
−Removed: As of December 31, 2020, the number of shares of common stock reserved for future issuance under the ESPP is 3,365,693 shares.
+Added: Unless otherwise determined by the Company’s board of directors, common stock will be purchased for accounts of employees participating in the ESPP at a price per share equal to the lower of (a) 85 % of the fair market value of a share of the Company’s common stock on the first date of an offering or (b) 85 % of the fair market value of a share of the Company’s common stock on the date of purchase.
+Added: As of December 31, 2021, the number of shares of common stock available for future issuance under the ESPP was 4,101,642 shares.
Employee Incentive Bonus
−Removed: In May 2013, the Company's compensation committee amended its Executive Incentive Bonus Plan to permit the settlement of awards under the plan in any combination of cash or shares of its common stock.
−Removed: Additionally, the Company settles a majority of bonus awards for all other employees in common stock.
−Removed: When bonus awards are settled in common stock issued under the 2010 Plan, the number of shares issuable to plan participants is determined based on the closing sales price of the Company's common stock as determined in trading on the New York Stock Exchange on the date approved by the Board of Directors.
−Removed: In March 2020 and February 2019, the Company issued 0.2 million and 0.3 million freely-tradable shares, respectively, of its common stock in settlement of bonus awards to employees, including executives, for the 2019 and 2018 performance periods, respectively.
−Removed: At December 31, 2020, an accrual of $ 32.8 million was recorded for bonus awards for employees for the 2020 performance period, which the Company intends to settle primarily in shares of its common stock, unless otherwise required to be settled in cash due to local laws or agreements.
−Removed: Common stock in settlement of employee bonuses is to be issued under the Company’'s 2010 Equity Incentive Plan, as amended, with the number of shares issuable to plan participants determined based on the closing sales price of the Company’s common stock as determined in trading on the New York Stock Exchange at a date to be determined.
+Added: The Company’s Executive Incentive Bonus Plan permits the settlement of awards under the plan in any combination of cash or shares of its common stock.
+Added: The Company settles a majority of bonus awards for its employees, including executives, in shares of common stock under the 2010 Equity Incentive Plan.
+Added: When bonus awards are settled in common stock issued under the 2010 Equity Incentive Plan, the number of shares issuable to plan participants is determined based on the closing price of the Company’s common stock as determined in trading on the applicable stock exchange on a date approved by the Board of Directors.
+Added: In connection with the Company’s bonus programs, in February 2021 and March 2020, the Company issued 0.5 million and 0.2 million freely-tradable shares, respectively, of the Company’s common stock in settlement of bonus awards to employees, including executives, for the 2020 and 2019 performance periods.
+Added: At December 31, 2021, the Company has an accrual of $ 41.5 million for bonus awards for employees for year-to-date achievement in the 2021 performance period, which the Company intends to settle primarily in shares of its common stock, unless otherwise required to be settled in cash due to local laws or agreements.
The Company’s compensation committee retains discretion to effect payment in cash, stock, or a combination of cash and stock.
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Stock-Based Compensation
−Removed: The Company recognizes stock-based compensation expense in the consolidated statements of operations, based on the department to which the related employee reports, as follows:
−Removed: Years Ended December 31,
+Added: The Company recognizes stock-based compensation in the consolidated statements of operations, based on the department to which the related employee reports, as follows:
+Added: Year Ended December 31,
2021 2020 2019
6 unchanged sentences
The total unrecognized compensation cost related to unvested restricted stock units as of December 31, 2021 was $ 85.5 million, and the weighted average period over which these equity awards are expected to vest is 2.44 years.
−Removed: The total unrecognized compensation cost related to performance-based restricted stock units as of December 31, 2020 was $ 11.4 million, and the weighted average period over which these equity awards are expected to vest is 1.4 years.
+Added: The total unrecognized compensation cost related to unvested performance-based restricted stock units as of December 31, 2021 was $ 15.1 million, and the weighted average period over which these equity awards are expected to vest is 0.90 years.
The total unrecognized compensation cost related to unvested stock options as of December 31, 2021 was $ 0.3 million, and the weighted average period over which these equity awards are expected to vest is 0.51 years.
8 unchanged sentences
Outstanding at December 31, 2021 5,233 $ 25.14
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
Performance-Based Restricted Stock Units
Performance-based restricted stock units are eligible to vest at the end of each fiscal year in a three-year performance period based on the Company’s annual growth rate in net sales and non-GAAP diluted earnings per share (subject to certain adjustments) over baseline results relative to the growth rates for a peer group of companies for the same metrics and periods.
−Removed: For the performance-based restricted stock units granted, 60 % of each performance-based award is subject to the net sales metric for the performance period and 40 % is subject to the non-GAAP diluted earnings per share metric for the performance period.
+Added: For the performance-based restricted stock units granted to date, 60 % of each performance-based award is subject to the net sales metric for the performance period and 40 % is subject to the non-GAAP diluted earnings per share metric for the performance period.
The maximum percentage for a particular metric is 250 % of the target number of units subject to the award related to that metric, however, vesting of the performance stock units is capped at 30 % and 100 %, respectively, of the target number of units subject to the award in years one and two, respectively, of the three-year performance period.
−Removed: As of December 31, 2020, the Company believes that it is probable that the Company will achieve performance metrics specified in the award agreement based on its expected revenue and non-GAAP diluted EPS results over the performance period and calculated growth rates relative to its peers’ expected results based on data available, as defined in the respective award agreements.
+Added: As of December 31, 2021, the Company believes that it is probable that it will achieve certain performance metrics specified in the respective award agreements based on its expected revenue and non-GAAP diluted EPS results over the performance periods and calculated growth rates relative to its peers’ expected results based on data available, as defined in the respective award agreements.
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A summary of the Company’s performance-based restricted stock unit activity is as follows:
10 unchanged sentences
During the year ended December 31, 2021, there were 195,752 shares of common stock purchased under the ESPP at a weighted average price of $ 25.53 .
+Added: During the year ended December 31, 2020, there were 285,633 shares of common stock purchased under the ESPP at a weighted average price of $ 13.29 .
The fair values of employee stock purchase rights were estimated using the Black-Scholes option pricing model at their respective grant date using the following assumptions:
−Removed: Years Ended December 31,
+Added: Year Ended December 31,
2021 2020 2019
6 unchanged sentences
Dividend yield — % — % — %
−Removed: Expected term (in years) 0.5 0.5 0.5
+Added: Expected life (in years) 0.50 0.50 0.50
Volatility 43.83 - 61.1 %
1 unchanged sentence
40.47 - 43.14 %
−Removed: The risk-free interest rate assumption was based on the United States (U.S.) Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued.
+Added: The risk-free interest rate assumption was based on rates for United States (U.S.) Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued.
The assumed dividend yield was based on the Company’s expectation of not paying dividends in the foreseeable future.
1 unchanged sentence
In addition, the estimated volatility incorporates the historical volatility over the expected term based on the Company’s daily closing stock prices.
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
Stock Options
−Removed: A summary of the Company’s stock option activity is as follows:
+Added: A summary of the Company’s stock options activity is as follows:
Number of Options
−Removed: (in thousands) Weighted-Average Exercise Price Weighted-Average Contractual Term
−Removed: (in years) Aggregate Intrinsic Value
−Removed: (in thousands)
+Added: (in thousands) Weighted-Average Exercise Price Weighted-Average Contractual Term (in years) Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2020 797 $ 14.67
Exercised ( 380 ) 12.04
−Removed: Canceled ( 44 ) 20.85
Outstanding at December 31, 2021 417 $ 17.05 3.28 $ 24,355
2 unchanged sentences
No stock options were granted by the Company during the years ended December 31, 2021 and 2020.
−Removed: The fair values of stock options granted in 2018 were estimated using the Black-Scholes option pricing model on the grant date using the following assumptions:
−Removed: Weighted-average grant date fair value per share $ 8.14
−Removed: Risk-free interest rate 2.76 %
−Removed: Dividend yield — %
−Removed: Expected term (in years) 5.50
−Removed: Volatility 44.30 %
−Removed: The risk-free interest rate assumption was based on the U.S.
−Removed: Treasury's rates for zero-coupon bonds with maturities similar to those of the expected term of the award being valued.
−Removed: The assumed dividend yield was based on the Company’s expectation of not paying dividends in the foreseeable future.
−Removed: The expected term of the options was calculated using the simplified method as prescribed by guidance provided by the SEC.
−Removed: This decision was based on the lack of historical data due to the Company’s limited number of stock option exercises under the 2010 Equity Incentive Plan.
−Removed: Estimated volatility incorporates historical volatility of the Company over the expected term based on the Company's daily closing stock prices.
The intrinsic value of stock options exercised during 2021, 2020, and 2019 was $ 9.8 million, $ 4.9 million, and $ 22.2 million, respectively.
−Removed: Cash received from exercise of stock options was $ 4.4 million, $ 4.5 million and $ 0.7 million during the years ended December 31, 2020, 2019 and 2018, respectively.
+Added: Cash received from exercise of stock options was $ 4.2 million, $ 4.4 million and $ 4.5 million during the
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: years ended December 31, 2021, 2020, and 2019, respectively.
The tax benefit from stock options exercised was $ 14.4 million, $ 5.2 million and $ 20.7 million during the years ended December 31, 2021, 2020, and 2019, respectively.
−Removed: The domestic and international components of loss before income taxes are presented as follows:
+Added: The domestic and international components of income (loss) before income taxes are presented as follows:
Years Ended December 31,
3 unchanged sentences
Foreign 79,845 ( 2,074 ) 29,409
−Removed: Loss before income taxes $ ( 114,852 ) $ ( 32,484 ) $ ( 32,852 )
+Added: Income (loss) before income taxes $ 47,870 $ ( 114,852 ) $ ( 32,484 )
The income tax provision (benefit) consists of the following:
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
Years Ended December 31,
10 unchanged sentences
Total deferred ( 2,311 ) ( 18,782 ) ( 15,766 )
−Removed: Total income tax benefit $ ( 16,259 ) $ ( 12,586 ) $ ( 6,653 )
+Added: Total income tax provision (benefit) $ 5,901 $ ( 16,259 ) $ ( 12,586 )
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The actual income tax provision (benefit) differs from the amount computed using the federal statutory rate as follows:
12 unchanged sentences
Foreign unremitted earnings ( 59 ) ( 233 ) ( 103 )
−Removed: Tax Act — — 185
Transaction costs 45 883 —
1 unchanged sentence
Valuation allowance ( 3,397 ) ( 7,507 ) ( 1,239 )
−Removed: Total income tax benefit $ ( 16,259 ) $ ( 12,586 ) $ ( 6,653 )
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
+Added: Total income tax provision (benefit) $ 5,901 $ ( 16,259 ) $ ( 12,586 )
The components of the deferred income tax assets are as follows:
3 unchanged sentences
Research and development credits 88,778 79,019
+Added: Foreign tax credits 7,695 5,728
Accrued expenses and other 2,748 5,941
9 unchanged sentences
Intangible assets ( 640 ) ( 9,049 )
+Added: Pension liability ( 792 ) —
Net deferred tax assets $ 88,376 $ 86,065
−Removed: At December 31, 2020, the Company had federal, state and foreign tax net operating loss carryforwards of approximately $ 281.3 million, $ 78.7 million and $ 4.4 million, respectively.
−Removed: The federal and state tax loss carryforwards will begin to expire in 2021 and 2028, respectively, unless previously utilized.
−Removed: The foreign tax loss carryforwards will not expire.
+Added: At December 31, 2021, the Company had federal, state and foreign tax net operating loss carryforwards of approximately $ 187.9 million, $ 79.8 million and $ 0 , respectively.
+Added: The federal and state tax loss carryforwards will begin to expire in 2024 and 2029, and foreign tax loss will not expire, unless previously utilized.
At December 31, 2021, the Company had federal, state and foreign tax credit carryforwards of approximately $ 56.7 million, $ 95.6 million and $ 1.8 million, respectively.
−Removed: The federal and foreign tax credit carryforwards will begin to expire in 2023 and 2026, respectively, unless previously utilized.
+Added: The federal and foreign tax credit carryforwards will begin to expire in
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: 2022 and 2026, respectively, unless previously utilized.
The state tax credit carryforwards do not expire.
7 unchanged sentences
The Company does not incur expense or benefit in certain tax-free jurisdictions in which it operates.
−Removed: The income tax benefit for the year ended December 31, 2020 primarily related to the generation of research and development tax credits, mix of pre-tax income among jurisdictions, excess tax benefits related to stock-based compensation, and release of certain reserves for uncertain tax positions under ASC 740-10.
−Removed: The income tax benefit for the year ended December 31, 2019 and 2018 primarily related to the mix of pre-tax income among jurisdictions, discrete tax benefits related to stock-based compensation, and release of certain reserves for uncertain tax positions under ASC 740-10.
+Added: The Company recorded an income tax provision of $ 5.9 million in the year ended December 31, 2021 and an income tax benefit of $ 16.3 million in the year ended December 31, 2020.
+Added: The difference between the Company’s effective tax rate and the 21.0% United States federal statutory rate for the year ended December 31, 2021 resulted primarily from a tax on global intangible low-taxed income (“GILTI”) and non-deductible foreign stock-based compensation, offset by a benefit related to research and development tax credits, foreign earnings taxed at rates other than the federal statutory rate and the effect of a release of valuation allowance against certain Singapore deferred tax assets pertaining to usage of net operating losses.
+Added: The difference between the Company’s effective tax rate and the 21.0% United States federal statutory rate for the year ended December 31, 2020 resulted primarily from foreign earnings taxed at rates other than the federal statutory rate, a benefit related to release of uncertain tax positions under ASC 740-10, and excess tax benefits related to stock-based compensation.
Income tax positions must meet a more-likely-than-not threshold to be recognized.
Income tax positions that previously failed to meet the more-likely-than-not threshold are recognized in the first subsequent financial reporting period in which that threshold is met.
−Removed: Previously recognized tax positions that no longer meet the more-likely-than-not threshold are de-recognized
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: in the first financial reporting period in which that threshold is no longer met.
+Added: Previously recognized tax positions that no longer meet the more-likely-than-not threshold are de-recognized in the first financial reporting period in which that threshold is no longer met.
The Company records potential penalties and interest accrued related to unrecognized tax benefits within the consolidated statements of operations as income tax expense.
+Added: During the year ended December 31, 2021, the Company’s unrecognized tax benefits increased by $ 1.9 million.
At December 31, 2021, the Company’s unrecognized tax benefits totaled $ 65.7 million, $ 55.9 million of which, if recognized at a time when the valuation allowance no longer exists, would affect the effective tax rate.
−Removed: The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months.
−Removed: At December 31, 2020 and 2019, the Company had accrued interest and penalties of approximately $ 0.6 million and $ 0.9 million, respectively.
+Added: The unrecognized tax benefits are not expected to materially change in next 12 months.
+Added: At December 31, 2021, the Company had accrued approximately $ 0.5 million of interest and penalties.
The total amounts of interest and penalties recognized for the years ended December 31, 2021, 2020 and 2019 were not material.
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes the changes to the unrecognized tax benefits during 2021, 2020, and 2019:
2 unchanged sentences
Additions based on tax positions related to the current year 1,678
−Removed: Additions related to acquisitions —
Decreases based on tax positions of prior year ( 1,121 )
1 unchanged sentence
Additions based on tax positions related to the current year 1,506
+Added: Additions related to acquisitions 1,154
Decreases based on tax positions of prior year ( 922 )
6 unchanged sentences
At December 31, 2021, the statutes of limitations for the assessment of federal, state, and foreign income taxes are closed for the years before 2018, 2017, and 2016, respectively.
−Removed: In April 2017, the Company’s subsidiary in Singapore began operating under certain tax incentives in Singapore, which are generally effective through March 2022, and are conditional upon meeting certain employment and investment thresholds in Singapore.
+Added: The Company’s subsidiary in Singapore operates under certain tax incentives in Singapore, which are generally effective through March 2022 and may be extended through March 2027, and are conditional upon meeting certain employment and investment thresholds in Singapore.
Under the incentives, qualifying income derived from certain sales of the Company’s integrated circuits is taxed at a concessionary rate over the incentive period, and there are reduced Singapore withholding taxes on certain intercompany royalties during the incentive period.
−Removed: Primarily because of the Company’s Singapore net operating losses and a full valuation allowance in Singapore, the incentives did not have a material impact on the Company’s income tax expense for the years ended December 31, 2020, 2019 and 2018.
−Removed: On March 27, 2020, the U.S.
−Removed: government enacted the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, a $2 trillion relief package comprising a combination of tax provisions and other stimulus measures.
−Removed: The CARES Act broadly provides entities tax payment relief and significant business incentives and makes certain technical corrections to the 2017 Tax Cuts and Jobs Act, or the Tax Act.
−Removed: The tax relief measures for entities include a five-year net operating loss carry back, increases interest expense deduction limits, acceleration of alternative minimum tax credit refunds, payroll tax relief, and a technical correction to allow accelerated deductions for qualified improvement property.
−Removed: The Act also provides other non-income tax benefits, including federal funding for a range of stabilization measures and emergency funding to assist those impacted by the COVID-19 pandemic.
−Removed: Similar legislation is being enacted in other jurisdictions in which the Company operates.
−Removed: ASC Topic 740, Income Taxes , requires the effect of changes in tax rates and laws on deferred tax balances to be recognized in the period in which new legislation is enacted.
−Removed: The enactment of the CARES Act and similar legislation in other jurisdictions in which the Company operates was not material to the Company’s income tax benefit for the year ended December 31, 2020.
−Removed: On July 27, 2015, the US Tax Court decided on behalf of Altera Corporation, or Altera US, that certain 2003 Internal Revenue Service, or IRS regulations underpinning the transfer pricing between related parties for shared costs were invalid.
−Removed: The case involved the cost-sharing arrangement, or CSA entered into by Altera US with an international subsidiary.
−Removed: Pursuant to the terms of the CSA, the parties agreed to share the risks and costs of research and development, or R&D activities, including granted stock options and other stock-based compensation, or SBC, to certain of its employees responsible for conducting the R&D activities.
−Removed: In allocating the costs to be shared pursuant to that CSA, Altera US included the cash compensation of its
+Added: Due to the valuation allowance in Singapore in 2020 and prior, the incentive did not have a material impact on the Company's income tax provision in 2020 and 2019.
+Added: Due to the valuation allowance release in 2021 and the Company's use of loss carry forwards, the Company recorded a tax benefit in the current year at the incentive rate, net of any expected tax payable.
+Added: Without the incentive rate, deferred taxes and the valuation allowance release would have provided an overall tax benefit, net of any current period payable.
+Added: Concentration of Credit Risk, Significant Customers and Geographic Information
+Added: Concentration of Credit Risk
+Added: Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents and accounts receivable.
+Added: Collateral is generally not required for customer receivables.
+Added: The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions.
+Added: At times, such deposits may be in excess of insured limits.
+Added: The Company has not experienced any losses on its deposits of cash and cash equivalents.
+Added: Significant Customers
+Added: The Company markets its products and services to manufacturers of a wide range of electronic devices (Note 1).
+Added: The Company sells its products both directly to customers and through third-party distributors, both of which are referred to as the Company’s customers (Note 12).
+Added: The Company makes periodic evaluations of the credit worthiness of its customers.
+Added: Customers comprising greater than 10% of net revenues for each of the periods presented are as follows:
+Added: Year Ended December 31,
+Added: 2021 2020 2019
+Added: Percentage of total net revenue
+Added: Customer A (direct) 15 % 15 % 14 %
+Added: Customer B (direct) 11 % 13 % *
+Added: ____________________________
+Added: * Represents less than 10% of total net revenue for the respective period.
MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: employees engaged in R&D in the shared cost pool but excluded their SBC.
−Removed: The IRS had imposed transfer pricing adjustments in each of the tax years 2004 through 2007 on the basis of Altera US’ failure to include SBC costs in its CSA cost pool.
−Removed: On June 7, 2019, in a 2-1 ruling, a panel of the Ninth Circuit Court of Appeals reversed the Tax Court’s holding and upheld a 2003 IRS regulation that requires participants in a CSA to share SBC costs.
−Removed: After the Ninth Circuit Court’s reversal, Altera filed a petition for en banc review of the decision by Ninth Circuit judges.
−Removed: The petition was denied, and the taxpayer decided to appeal to the Supreme Court.
−Removed: On June 22, 2020, the Supreme Court of the United States announced that it was denying the petition for certiorari and will not review an appeals court decision in the case of Altera Corporation & Subsidiaries v.
−Removed: Commissioner (Altera v.
−Removed: The announcement represented new information that the Company considered in its second quarter tax provision for the six months ended June 30, 2020.
−Removed: The evaluation of this ruling for all open tax periods was not material to the Company’s income tax benefit for the year ended December 31, 2020.
+Added: The following table presents balances that are 10% or greater of accounts receivable, based on the Company’s billings to its customers.
+Added: December 31, December 31,
+Added: Percentage of gross accounts receivable
+Added: Customer B (direct) 14 % 17 %
+Added: Customer C (direct) 17 % *
+Added: Customer D (distributor) * 13 %
+Added: ____________________________
+Added: * Represents less than 10% of the gross accounts receivable as of the respective period end.
+Added: Significant Suppliers
+Added: Suppliers comprising greater than 10% of total inventory purchases are as follows:
+Added: Year Ended December 31,
+Added: 2021 2020 2019
+Added: Vendor A 38 % 34 % *
+Added: Vendor B 22 % 20 % 14 %
+Added: Vendor C 12 % * 17 %
+Added: Vendor D * 11 % 13 %
+Added: Vendor E * * 15 %
+Added: * Represents less than 10% of the inventory purchases for the respective period.
+Added: Geographic Information
+Added: The Company’s consolidated net revenues by geographic area based on ship-to location are as follows (in thousands):
+Added: Years Ended December 31,
+Added: 2021 2020 2019
+Added: Amount % of total net revenue Amount % of total net revenue Amount % of total net revenue
+Added: Asia $ 736,808 83 % $ 393,579 82 % $ 265,122 84 %
+Added: United States 35,978 4 % 15,501 3 % 13,984 4 %
+Added: Rest of world 119,612 13 % 69,516 15 % 38,074 12 %
+Added: Total $ 892,398 100 % $ 478,596 100 % $ 317,180 100 %
+Added: The products shipped to individual countries or territories representing greater than 10% of net revenue for each of the periods presented are as follows:
+Added: Years Ended December 31,
+Added: 2021 2020 2019
+Added: Percentage of total net revenue
+Added: Hong Kong 40 % 42 % 46 %
+Added: China 12 % 17 % 14 %
+Added: Vietnam 13 % * *
+Added: ____________________________
+Added: * Represents less than 10% of total revenue for the respective period.
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: The determination of which country a particular sale is allocated to is based on the destination of the product shipment.
+Added: No other individual country accounted for more than 10% of net revenue during these periods.
+Added: Although a large percentage of the Company’s products is shipped to Asia, and in particular, Hong Kong, China and Vietnam, the Company believes that a significant number of the systems designed by customers and incorporating the Company’s semiconductor products are subsequently sold outside Asia to Europe, Middle East, and Africa, or EMEA markets and North American markets.
+Added: Long-lived assets, which consists of property and equipment, net, leased right-of-use assets, intangible assets, net, and goodwill by geographic area are as follows (in thousands):
+Added: December 31, December 31,
+Added: Amount % of total Amount % of total
+Added: United States $ 382,650 70 % $ 403,071 72 %
+Added: Singapore 122,474 22 % 136,967 24 %
+Added: Rest of world 42,277 8 % 31,412 5 %
+Added: Total $ 547,401 100 % $ 571,450 100 %
+Added: Revenue from Contracts with Customers
+Added: Revenue by Market
+Added: The table below presents disaggregated net revenues by market (in thousands):
+Added: Year Ended December 31,
+Added: 2021 2020 2019
+Added: Broadband $ 492,482 $ 244,424 $ 119,320
+Added: % of net revenue 55 % 51 % 38 %
+Added: Connectivity 149,285 70,739 85,369
+Added: % of net revenue 17 % 15 % 27 %
+Added: Infrastructure 119,421 76,166 79,137
+Added: % of net revenue 13 % 16 % 25 %
+Added: Industrial and multi-market 131,210 87,267 33,354
+Added: % of net revenue 15 % 18 % 11 %
+Added: Total net revenue $ 892,398 $ 478,596 $ 317,180
+Added: Revenues from sales through the Company’s distributors accounted for 47 % , 49 % and 52 % of net revenue for the years ended December 31, 2021, 2020, and 2019, respectively.
+Added: Contract Liabilities
+Added: As of December 31, 2021, customer contract liabilities consisted primarily of advanced payments received for which performance obligations have not been completed of approximately $ 1.0 million.
+Added: As of December 31, 2020, customer contract liabilities consisted of estimates of obligations to deliver rebates to customers in the form of units of products and were approximately $ 0.03 million.
+Added: Revenue recognized in each of the years ended December 31, 2021, 2020, and 2019 that was included in the contract liability balance as of the beginning of each of those respective periods was immaterial.
+Added: There were no material changes in the contract liabilities balance during the years ended December 31, 2021, 2020, and 2019, respectively.
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: Obligations to Customers for Price Adjustments and Returns and Assets for Right-of-Returns
+Added: As of December 31, 2021 and December 31, 2020, obligations to customers consisting of estimates of price protection rights offered to the Company’s end customers totaled $ 40.5 million and $ 47.8 million, respectively, and are included in accrued price protection liability in the consolidated balance sheets.
+Added: For activity in this account, including amounts included in net revenue, refer to Note 7.
+Added: Other obligations to customers representing estimates of price adjustments to be claimed by distributors upon sell-through of their inventory to their end customer and estimates of stock rotation returns to be claimed by distributors on products sold as of December 31, 2021 were $ 6.7 million and $ 2.8 million, respectively, and as of December 31, 2020 were $ 10.3 million and $ 2.0 million, respectively, and are included in accrued expenses and other current liabilities in the consolidated balance sheets (Note 7).
+Added: The increase or decrease in revenue in the years ended December 31, 2021, 2020, and 2019 from net changes in transaction prices for amounts included in obligations to customers for price adjustments as of the beginning of those respective periods was not material.
+Added: As of December 31, 2021 and December 31, 2020, right of return assets under customer contracts representing the estimates of product inventory the Company expects to receive from customers in stock rotation returns were approximately $ 1.1 million and $ 0.6 million, respectively.
+Added: Right of return assets are included in inventory in the consolidated balance sheets.
+Added: As of December 31, 2021 and December 31, 2020, there were no impairment losses recorded on customer accounts receivable.
+Added: Operating Leases
+Added: Operating lease arrangements primarily consist of office leases expiring in various years through 2028.
+Added: These leases have original terms of approximately 2 to 8 years and some contain options to extend the lease up to 5 years or terminate the lease, which are included in right-of-use assets and lease liabilities when the Company is reasonably certain it will renew the underlying leases.
+Added: Since the implicit rate of such leases is unknown and the Company is not reasonably certain to renew its leases, the Company has elected to apply a collateralized incremental borrowing rate to facility leases on the original lease term in calculating the present value of future lease payments.
+Added: As of December 31, 2021 and December 31, 2020, the weighted average discount rate for operating leases was 3.6 % and 4.0 %, respectively, and the weighted average remaining lease term for operating leases was 4.6 years and 4.6 years, respectively, as of the end of each of these periods.
+Added: The table below presents aggregate future minimum payments due under leases, reconciled to total lease liabilities included in the consolidated balance sheet as of December 31, 2021:
+Added: Operating Leases
+Added: (in thousands)
+Added: Thereafter 3,257
+Added: Total minimum payments 36,234
+Added: imputed interest ( 2,707 )
+Added: unrealized translation loss —
+Added: Total lease liabilities 33,528
+Added: short-term lease liabilities ( 8,888 )
+Added: Long-term lease liabilities $ 24,640
+Added: Operating lease cost was $ 9.4 million, $ 5.2 million, and $ 3.1 million for the years ended December 31, 2021, 2020, and 2019, respectively.
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: Short-term lease costs for each of the years ended December 31, 2021, 2020, and 2019, respectively, were not material.
+Added: There were $ 13.2 million, $ 15.9 million, and $ 0.5 million of right-of-use assets obtained in exchange for new lease liabilities for the years ended December 31, 2021, 2020, and 2019, respectively, including $ 0.05 million and $ 1.8 million from acquisitions in 2021 and 2020, respectively.
Employee Retirement Plans
4 unchanged sentences
Pension and Other Defined Benefit Retirement Obligations
−Removed: In connection with the July 31, 2020 acquisition of the Wi-Fi and Broadband assets business (Note 3), the Company assumed an obligation of $ 7.9 million associated with certain defined benefit retirement plans, including a pension plan.
+Added: In connection with the July 31, 2020 acquisition of the Wi-Fi and Broadband assets business (Note 3), the Company assumed an obligation of $ 7.9 million of the Wi-Fi and Broadband assets business associated with certain defined benefit retirement plans, including a pension plan.
+Added: As of December 31, 2021 and December 31, 2020, the defined benefit obligation was $ 4.5 million and $ 6.4 million, respectively.
The benefit is based on a formula applied to eligible employee earnings.
−Removed: Net periodic benefit costs were $ 0.2 million for the year ended December 31, 2020 and were recorded to research and development expenses in the consolidated statement of operations.
+Added: Net periodic benefit costs were $ 0.5 million and $ 0.2 million, respectively for the years ended December 31, 2021 and 2020, respectively, and were recorded to research and development expenses in the consolidated statements of operations.
Benefit Obligation and Plan Assets for Pension Benefit Plans
The vested benefit obligation for a defined-benefit pension or other retirement plan is the actuarial present value of the vested benefits to which the employee is currently entitled based on the employee's expected date of separation or retirement.
−Removed: December 31, 2020
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: December 31, 2021 December 31, 2020
(in thousands)
11 unchanged sentences
Plan assets transferred from acquisition — 5,417
+Added: Actual return on plan assets 2 —
+Added: Employer contributions — —
Currency exchange rate changes ( 439 ) 217
+Added: Plan settlements — —
Fair value of plan assets, end of period 5,198 5,634
6 unchanged sentences
Under this approach, net actuarial gains or losses in excess of 10% of the larger of the projected benefit obligation or the fair value of plan assets are amortized on a straight-line basis.
−Removed: As of December 31, 2020, all plans had accumulated benefit obligations and projected benefit obligations in excess of plan assets.
−Removed: As of December 31, 2020, the accumulated benefit obligations were $ 11.1 million for the pension plans.
−Removed: December 31, 2020
+Added: As of December 31, 2021 and 2020, all plans had accumulated benefit obligations and projected benefit obligations in excess of plan assets.
+Added: As of December 31, 2021 and 2020, the accumulated benefit obligations were $ 9.2 million and $ 11.1 million for the pension plans.
+Added: MAXLINEAR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: December 31, 2021 December 31, 2020
(in thousands)
6 unchanged sentences
Assumptions for Pension Benefit Plans
−Removed: December 31, 2020
+Added: December 31, 2021 December 31, 2020
(in thousands)
1 unchanged sentence
Discount rate 0.8 % - 0.9 %
+Added: 0.5 % - 0.6 %
Rate of compensation increase 2.6 % - 3.8 %
+Added: 2.6 % - 3.8 %
Weighted average actuarial assumptions used to determine costs
2 unchanged sentences
Rate of compensation increase 2.6 % - 3.8 %
+Added: 2.6 % - 3.8 %
The Company establishes the discount rate for each pension plan by analyzing current market long-term bond rates and matching the bond maturity with the average duration of the pension liabilities.
4 unchanged sentences
Estimated Future Benefit Payments for Pension Benefit Plans
−Removed: The estimated benefit payments over the next five years and beyond are as follows:
+Added: At December 31, 2021, the estimated benefit payments over the next five years and beyond are as follows:
Estimated Future Benefit Payments
1 unchanged sentence
Thereafter 625
−Removed: Operating Leases
−Removed: Operating lease arrangements primarily consist of office leases expiring at various years through 2028.
−Removed: These leases often have original terms of 2 to 7 years and contain options to extend the lease up to 5 years or terminate the lease, which are included in leased right-of-use assets and lease liabilities in the consolidated balance sheet when the Company is reasonably certain it will renew the underlying leases.
−Removed: Since the implicit rate of such leases is unknown and the Company is not reasonably certain to renew its leases, the Company has elected to apply a collateralized incremental borrowing rate to facility leases on the original lease term in calculating the present value of future lease payments.
−Removed: As of December 31, 2020 and 2019, the weighted
−Removed: average discount rate for operating leases was 4.0 % and 5.0 %, respectively, and the weighted average remaining lease term for operating leases was 4.6 years and 2.9 years, respectively.
−Removed: The table below presents aggregate future minimum payments due under leases, reconciled to lease liabilities included in the consolidated balance sheet as of December 31, 2020:
−Removed: Operating Leases
−Removed: (in thousands)
−Removed: Thereafter 4,794
−Removed: Total minimum payments 30,658
−Removed: imputed interest ( 2,655 )
−Removed: unrealized translation gain 1,013
−Removed: Total lease liabilities 29,006
−Removed: short-term lease liabilities ( 8,144 )
−Removed: Lease liabilities - long-term $ 20,862
−Removed: Operating lease costs were $ 5.2 million, $ 3.1 million and $ 4.5 million for the years ended December 31, 2020, 2019 and 2018, respectively.
−Removed: Short-term lease costs for the years ended December 31, 2020 and 2019 were not material.
−Removed: There were $ 15.9 million and $ 0.5 million of right-of-use assets obtained in exchange for new lease liabilities for the years ended December 31, 2020 and 2019, respectively, including $ 1.8 million in right-of-use assets from acquisitions in 2020 (Note 3).
−Removed: The Company has a subleased facility that it ceased using in connection with a restructuring plan (Note 4).
−Removed: Such sublease expires in fiscal 2021, and future minimum rental income under the sublease is $ 0.1 million.
−Removed: Total sublease income related to leased facilities the Company ceased using in connection with a restructuring plan for the years ended December 31, 2020, 2019 and 2018 was approximately $ 0.4 million, $ 1.2 million and $ 2.4 million, respectively (Note 4).
−Removed: Lease Terminations
−Removed: In the year ended December 31, 2019, the Company terminated certain facility leases and a related sublease, which were due to expire in 2022 to 2023, upon release from the landlords.
−Removed: The Company had previously ceased use of all or portions of the related facilities.
−Removed: As a result of such terminations, the Company reduced leased right-of-use assets by approximately $ 9.2 million, lease liabilities by approximately $ 10.1 million, and other related liabilities by approximately $ 0.3 million in the consolidated balance sheet.
−Removed: The related net impact in the consolidated statement of operations was a gain of approximately $ 1.2 million, which consisted of a gain on extinguishment of lease-related liabilities of $ 10.4 million, partially offset by impairment of leased right-of-use assets of $ 9.2 million.
−Removed: The Company also recorded impairment of related leasehold improvements of $ 1.4 million.
MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
Commitments and Contingencies
2 unchanged sentences
Inventory Purchase Obligations Other Obligations Total
−Removed: (in thousands)
2022 $ 141,401 $ 28,758 $ 170,159
4 unchanged sentences
Other obligations consist of contractual payments due for software licenses.
−Removed: Our inventory purchase obligations and other obligations increased by $ 99.1 million to $ 121.7 million as of December 31, 2020, from $ 22.6 million as of December 31, 2019 primarily as a result of increased orders of software licenses and inventory placed with our vendors during the period, which is due in part to our 2020 acquisitions (Note 3).
+Added: Our inventory purchase obligations and other obligations increased by $ 64.7 million to $ 186.4 million as of December 31, 2021, from $ 121.7 million as of December 31, 2020 primarily as a result of increased orders of inventory placed with our vendors during the period, partially offset by a decrease in software license obligations.
+Added: Jointly Funded Research and Development
+Added: In 2021, the Company entered into contracts for jointly funded research and development projects to develop technology that may be commercialized into a product in the future.
+Added: As the Company may be required to repay all or a portion of the funds provided by the other parties under certain conditions, total funds received to date from the other parties of $ 5.8 million have been recorded in other long-term liabilities.
+Added: Additional amounts under the contracts are tied to certain milestones and will also be recorded as a long-term liability as payment due under such milestones are received.
+Added: The Company currently expects to de-recognize the liabilities when the contingencies associated with the repayment conditions have been resolved.
Other Matters
−Removed: In addition, from time to time, the Company is subject to threats of litigation or actual litigation in the ordinary course of business, some of which may be material.
−Removed: The Company believes that there are no other currently pending litigation matters that, if determined adversely by the Company, would have a material effect on the Company's business or that would not be covered by the Company’s existing liability insurance.
−Removed: Concentration of Credit Risk, Significant Customers and Geographic Information
−Removed: Concentration of Credit Risk
−Removed: Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents and accounts receivable.
−Removed: Collateral is generally not required for customer receivables.
−Removed: The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions.
−Removed: At times, such deposits may be in excess of insured limits.
−Removed: The Company has not experienced any losses on its deposits of cash and cash equivalents.
−Removed: Significant Customers
−Removed: The Company markets its products and services to manufacturers of a wide range of electronic devices (Note 1).
−Removed: The Company sells its products both directly to customers and through third-party distributors, both of which are referred to as the Company’s customers (Note 15).
−Removed: The Company makes periodic evaluations of the credit worthiness of its customers.
−Removed: Customers comprising greater than 10% of net revenues for each of the periods presented are as follows:
−Removed: Years Ended December 31,
−Removed: 2020 2019 2018
−Removed: Percentage of total net revenue
−Removed: Customer A (direct) 15 % 14 % 18 %
−Removed: Customer B (direct) 13 % * *
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: Balances greater than 10% of accounts receivable, based on the Company’s billings to the contract manufacturer customers, are as follows:
−Removed: Percentage of gross accounts receivable
−Removed: Customer B (direct) 17 % *
−Removed: Customer C (distributor) 13 % *
−Removed: Customer D (distributor) * 10 %
−Removed: Suppliers comprising greater than 10% of total inventory purchases are as follows:
−Removed: Years ended December 31,
−Removed: 2020 2019 2018
−Removed: Vendor A 34 % * *
−Removed: Vendor B 20 % 14 % 19 %
−Removed: Vendor C 11 % 17 % 16 %
−Removed: Vendor D * 13 % 15 %
−Removed: Vendor E * 15 13 %
−Removed: * Represents less than 10% of the inventory purchases for the respective period.
−Removed: Geographic Information
−Removed: The Company's consolidated net revenues by geographic area based on ship-to location are as follows (in thousands):
−Removed: Years Ended December 31,
−Removed: 2020 2019 2018
−Removed: Amount % of total net revenue Amount % of total net revenue Amount % of total net revenue
−Removed: Asia $ 393,579 82 % $ 265,122 84 % $ 312,877 81 %
−Removed: United States 15,501 3 % 13,984 4 % 18,060 5 %
−Removed: Rest of world 69,516 15 % 38,074 12 % 54,060 14 %
−Removed: Total $ 478,596 100 % $ 317,180 100 % $ 384,997 100 %
−Removed: The products shipped to individual countries representing greater than 10% of net revenue for each of the periods presented are as follows:
−Removed: Years Ended December 31,
−Removed: 2020 2019 2018
−Removed: Percentage of total net revenue
−Removed: Hong Kong 42 % 46 % 43 %
−Removed: China 17 % 14 % 19 %
−Removed: The determination of which country a particular sale is allocated to is based on the destination of the product shipment.
−Removed: No other individual country accounted for more than 10% of net revenue during these periods.
−Removed: Although a large percentage of the Company’s products is shipped to Asia, and in particular, Hong Kong and China, the Company believes that a significant number of the systems designed by customers and incorporating the Company’s semiconductor products are subsequently sold outside Asia to Europe, Middle East, and Africa, or EMEA markets and North American markets.
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: Long-lived assets, which consists of property and equipment, net, leased right-of-use assets, intangible assets, net, and goodwill, by geographic area are as follows (in thousands):
−Removed: As of December 31,
−Removed: Amount % of total Amount % of total
−Removed: United States $ 403,071 72 % $ 385,302 85 %
−Removed: Singapore 136,967 24 % 63,556 14 %
−Removed: Rest of world 31,412 5 % 5,034 1 %
−Removed: Total $ 571,450 100 % $ 453,892 100 %
−Removed: Revenue from Contracts with Customers
−Removed: Revenue by Market
−Removed: The table below presents disaggregated net revenues by market (in thousands):
−Removed: Year Ended December 31,
−Removed: Broadband $ 244,424 $ 119,320 $ 207,336
−Removed: % of net revenue 51 % 38 % 54 %
−Removed: Infrastructure 76,166 85,369 82,388
−Removed: % of net revenue 16 % 27 % 21 %
−Removed: Industrial and multi-market 87,267 79,137 95,273
−Removed: % of net revenue 18 % 25 % 25 %
−Removed: Connectivity 70,739 33,354 —
−Removed: % of net revenue 15 % 11 % — %
−Removed: Total net revenue $ 478,596 $ 317,180 $ 384,997
−Removed: _______________
−Removed: (1) The Company’s net revenues by market was revised during 2020 to align with changing end-market conditions, the Company’s current business priorities, as well as growth opportunities in the four categories.
−Removed: The broadband category includes the Company’s prior connected home category plus the SoC business from the Wi-Fi and Broadband assets business, but excludes wired connectivity.
−Removed: The infrastructure category remains unchanged.
−Removed: Industrial and multi-market includes the previously reported revenue plus component revenues from the Wi-Fi and Broadband assets business.
−Removed: The Company’s connectivity category includes primarily its MoCA/G.hn products and Wi-Fi and Ethernet revenues from the Wi-Fi and Broadband assets business.
−Removed: The 2019 amounts were adjusted to reflect the change in market categories;
−Removed: however, 2018 amounts have not been adjusted.
−Removed: Revenues from sales to the Company’s distributors accounted for 49 %, 52 % and 42 % of net revenue for the years ended December 31, 2020, 2019 and 2018, respectively.
−Removed: Contract Liabilities
−Removed: As of December 31, 2020 and 2019, customer contract liabilities consist of estimates of obligations to deliver rebates to customers in the form of units of products and were approximately $ 0.03 million and $ 0.1 million, respectively.
−Removed: Revenue recognized in the years ended December 31, 2020 and 2019 that was included in the contract liability balance as of the beginning of those respective years was immaterial.
−Removed: There were no material changes in the contract liabilities balance during the years ended December 31, 2020 and 2019.
−Removed: MAXLINEAR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands, except per share amounts and percentage data)
−Removed: Obligations to Customers for Price Adjustments and Returns and Assets for Right-of-Returns
−Removed: As of December 31, 2020 and 2019, obligations to customers consisting of estimates of price protection rights offered to the Company's end customers totaled $ 47.8 million and $ 12.6 million and are included in accrued price protection liability in the consolidated balance sheets.
−Removed: For activity in this account, including amounts included in net revenue, refer to Note 7.
−Removed: As of December 31, 2020 and 2019, other obligations to customers representing estimates of price adjustments to be claimed by distributors upon sell-through of their inventory to their end customer were $ 10.3 million and $ 8.4 million, respectively.
−Removed: As of December 31, 2020 and 2019, other obligations to customers representing estimates of stock rotation returns to be claimed by distributors on products sold were $ 2.0 million and $ 1.4 million, respectively.
−Removed: Obligations to customers for estimates of price adjustments and stock rotation return rights are included in accrued expenses and other current liabilities in the consolidated balance sheets (Note 7).
−Removed: The increase in revenue in the years ended December 31, 2020 and 2019 from net changes in transaction prices for amounts included in obligations to customers for price adjustments as of the beginning of those respective years was not material.
−Removed: As of December 31, 2020 and 2019, right of return assets under customer contracts representing the estimates of product inventory the Company expects to receive from customers in stock rotation returns were approximately $ 0.6 million and $ 0.3 million, respectively.
−Removed: Right of return assets are included in inventory in the consolidated balance sheets (Note 7).
−Removed: As of December 31, 2020 and 2019, there were no impairment losses recorded on customer accounts receivable.
−Removed: Selected Quarterly Financial Data (Unaudited)
−Removed: The following table presents the Company’s unaudited quarterly financial data for each of the eight quarters in the period ended December 31, 2020.
−Removed: In management’s opinion, this information has been presented on the same basis as the audited consolidated financial statements included in a separate section of this report, and all necessary adjustments, consisting only of normal recurring adjustments, have been included in the amounts below to present fairly the unaudited quarterly results when read in conjunction with the audited consolidated financial statements and related notes.
−Removed: The operating results for any quarter should not be relied upon as necessarily indicative of results for any future period.
−Removed: Year Ended December 31, 2020
−Removed: First Quarter Second Quarter Third Quarter Fourth Quarter
−Removed: (in thousands, except per share amounts)
−Removed: Net revenue $ 62,027 $ 65,220 $ 156,633 $ 194,716
−Removed: Gross profit $ 30,762 $ 32,743 $ 66,206 $ 83,087
−Removed: Net loss $ ( 15,469 ) $ ( 21,807 ) $ ( 36,645 ) $ ( 24,672 )
−Removed: Net loss per share:
−Removed: Basic $ ( 0.21 ) $ ( 0.30 ) $ ( 0.50 ) $ ( 0.33 )
−Removed: Diluted $ ( 0.21 ) $ ( 0.30 ) $ ( 0.50 ) $ ( 0.33 )
−Removed: Year Ended December 31, 2019
−Removed: First Quarter Second Quarter Third Quarter Fourth Quarter
−Removed: (in thousands, except per share amounts)
−Removed: Net revenue $ 84,635 $ 82,507 $ 80,020 $ 70,018
−Removed: Gross profit $ 45,077 $ 44,080 $ 41,904 $ 36,624
−Removed: Net loss $ ( 4,851 ) $ ( 2,229 ) $ ( 4,714 ) $ ( 8,104 )
−Removed: Net loss per share:
−Removed: Basic $ ( 0.07 ) $ ( 0.03 ) $ ( 0.07 ) $ ( 0.11 )
−Removed: Diluted $ ( 0.07 ) $ ( 0.03 ) $ ( 0.07 ) $ ( 0.11 )
+Added: From time to time, the Company is subject to threats of litigation or actual litigation in the ordinary course of business, some of which may be material.
+Added: The Company believes that there are no currently pending litigation matters that, if determined adversely to the Company’s interests, would have a material effect on the Company’s financial position, results of operations, or cash flows or that would not be covered by the Company’s existing liability insurance.
+Added: Stock Repurchases
+Added: On February 23, 2021, the Company’s board of directors authorized a plan to repurchase up to $ 100 million of the Company’s common stock over a period ending February 16, 2024.
+Added: The amount and timing of repurchases are subject to a variety of factors including liquidity, share price, market conditions, and legal requirements.
+Added: Any purchases will be funded from available working capital and may be effected through open market purchases, block transactions, and privately negotiated transactions.
+Added: The share repurchase program does not obligate the Company to make any repurchases and may be modified, suspended, or terminated by the Company at any time without prior notice.
+Added: During the year ended December 31, 2021, the Company repurchased 454,372 shares of its common stock at a weighted average price of $ 51.7998 per share at an aggregate value of approximately $ 23.5 million under the repurchase program.
+Added: At December 31, 2021, the aggregate value of common stock repurchased under the program was approximately $ 23.5 million and approximately $ 76.5 million remained available for repurchase under the program.
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.