What changed in this filing

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Item 1. Financial Statements

2021-07-28 compared with 2021-04-28 · 163 added, 82 removed, 382 unchanged (39% of the section changed)

8 unchanged sentences

Prepaid expenses and other current assets

Current assets held for sale

Total current assets

2 unchanged sentences

Other assets, net

Non-current assets held for sale

Liabilities and Stockholders’ Equity

4 unchanged sentences

Other current liabilities

Current liabilities held for sale

Total current liabilities

1 unchanged sentence

Other non-current liabilities

Non-current liabilities held for sale

Total liabilities

6 unchanged sentences

250,000 shares authorized;

44,749 and 43,925 shares issued and outstanding at April 3, 2021 and January 2, 2021, respectively

44,764 and 43,925 shares issued and outstanding at July 3, 2021 and January 2, 2021, respectively

Additional paid-in capital

Retained earnings

Accumulated other comprehensive income

Accumulated other comprehensive income (loss)

Total stockholders' equity

2 unchanged sentences

Silicon Laboratories Inc.

Condensed Consolidated Statements of Income

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

Three Months Ended

Six Months Ended

Cost of revenues

3 unchanged sentences

Operating expenses

Operating income

Operating loss

Other income (expense):

1 unchanged sentence

Interest expense

Income before income taxes

Loss from continuing operations before income taxes

Provision (benefit) for income taxes

Earnings per share:

Loss from continuing operations

Income from discontinued operations, net of income taxes

Net income (loss)

Basic earnings (loss) per share:

Continuing operations

Diluted earnings (loss) per share:

Continuing operations

Weighted-average common shares outstanding:

4 unchanged sentences

Three Months Ended

Other comprehensive loss, before tax:

Six Months Ended

Net income (loss)

Other comprehensive income (loss), before tax

Net changes to available-for-sale securities

Unrealized losses arising during the period

Reclassification for gains included in net income

Unrealized gains (losses) arising during the period

Reclassification for gains included in net income (loss)

Net changes to cash flow hedges

Unrealized losses arising during the period

Reclassification for (gains) losses included in net income

Other comprehensive loss, before tax

Unrealized gains (losses) arising during the period

Reclassification for (gains) losses included in net income (loss)

Other comprehensive income (loss), before tax

Provision (benefit) for income taxes

Other comprehensive loss

Other comprehensive income (loss)

Comprehensive income

6 unchanged sentences

Stockholders’

Three Months Ended April 3, 2021

Three Months Ended July 3, 2021

Income (Loss)

Balance as of April 3, 2021

Other comprehensive loss

Stock issuances, net of shares withheld for taxes

Repurchases of common stock

Stock-based compensation

Balance as of July 3, 2021

Accumulated Other

Comprehensive

Stockholders’

Three Months Ended July 4, 2020

Income (Loss)

Balance as of April 4, 2020

Other comprehensive income

Stock issuances, net of shares withheld for taxes

Stock-based compensation

Convertible debt issuance

Balance as of July 4, 2020

Accumulated Other

Comprehensive

Stockholders’

Six Months Ended July 3, 2021

Income (Loss)

Balance as of January 2, 2021

1 unchanged sentence

Stock issuances, net of shares withheld for taxes

Repurchases of common stock

Stock-based compensation

Convertible debt activity

Balance as of April 3, 2021

Balance as of July 3, 2021

Accumulated Other

1 unchanged sentence

Stockholders’

Three Months Ended April 4, 2020

Six Months Ended July 4, 2020

Income (Loss)

1 unchanged sentence

Cumulative effect of adoption of accounting standard

Other comprehensive loss

Other comprehensive income

Stock issuances, net of shares withheld for taxes

1 unchanged sentence

Stock-based compensation

Balance as of April 4, 2020

Convertible debt issuance

Balance as of July 4, 2020

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended

Operating Activities

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to cash provided by operating activities of

continuing operations:

Income from discontinued operations, net of income taxes

Depreciation of property and equipment

Amortization of other intangible assets and other assets

Amortization of intangible assets and other assets

Amortization of debt discount and debt issuance costs

9 unchanged sentences

Other non-current liabilities

Net cash provided by operating activities

Net cash provided by operating activities of continuing operations

Investing Activities

3 unchanged sentences

Purchases of other assets

Net cash provided by investing activities

Acquisition of business, net of cash acquired

Net cash provided by (used in) investing activities of continuing operations

Financing Activities

Proceeds from revolving line of credit

Proceeds from issuance of debt

Payments on debt

1 unchanged sentence

Payment of taxes withheld for vested stock awards

Net cash provided by (used in) financing activities

Proceeds from the issuance of common stock

Net cash provided by (used in) financing activities of continuing operations

Discontinued Operations

Operating activities

Investing activities

Net cash provided by discontinued operations

Increase in cash and cash equivalents

8 unchanged sentences

however, they contain all normal recurring accruals and adjustments which, in the opinion of management, are necessary to present fairly the condensed consolidated financial position of Silicon Laboratories Inc.

and its subsidiaries (collectively, the “Company”) at April 3, 2021 and January 2, 2021, the condensed consolidated results of its operations for the three months ended April 3, 2021 and April 4, 2020, the Condensed Consolidated Statements of Comprehensive Income for the three months ended April 3, 2021 and April 4, 2020, the Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended April 3, 2021 and April 4, 2020, and the Condensed Consolidated Statements of Cash Flows for the three months ended April 3, 2021 and April 4, 2020.

and its subsidiaries (collectively, the “Company”) at July 3, 2021 and January 2, 2021, the condensed consolidated results of its operations for the three and six months ended July 3, 2021 and July 4, 2020, the Condensed Consolidated Statements of Comprehensive Income for the three and six months ended July 3, 2021 and July 4, 2020, the Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended July 3, 2021 and July 4, 2020, and the Condensed Consolidated Statements of Cash Flows for the six months ended July 3, 2021 and July 4, 2020.

All intercompany balances and transactions have been eliminated in consolidation.

The condensed consolidated results of operations for the three months ended April 3, 2021 are not necessarily indicative of the results to be expected for the full year.

The condensed consolidated results of operations for the three and six months ended July 3, 2021 are not necessarily indicative of the results to be expected for the full year.

The accompanying unaudited Condensed Consolidated Financial Statements do not include certain footnotes and financial presentations normally required under U.S.

40 unchanged sentences

The Company will continue to evaluate the effect that the adoption of this ASU will have on its financial statements.

Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

Discontinued Operations

On April 22, 2021, the Company entered into an Asset Purchase Agreement pursuant to which Skyworks Solutions, Inc.

agreed to acquire certain assets, rights, and properties, and assume certain liabilities, comprising the Company’s infrastructure and automotive business for $ 2.75 billion in cash.

The transaction closed on July 26, 2021.

The financial results of the infrastructure and automotive business, which are readily distinguishable from other components of the Company, have been presented as discontinued operations in the Condensed Consolidated Financial Statements.

The following table presents the financial results of the infrastructure and automotive business (the “discontinued operations”) in the Company’s condensed consolidated statements of operations (in thousands):

Three Months Ended

Shares used in computing basic earnings per share

Six Months Ended

Costs of revenues and operating expenses

Income from discontinued operations before income taxes

Provision (benefit) for income taxes

Income from discontinued operations

Income from discontinued operations per share:

Silicon Laboratories Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

Discontinued Operations (Continued)

The following table summarizes the assets and liabilities of the infrastructure and automotive business held for sale (in thousands):

Prepaid expenses and other current assets

Total assets held for sale

Other current liabilities

Other non-current liabilities

Total liabilities held for sale

Continuing Involvement

In connection with the closing of the sale, the Company entered into certain ancillary agreements with Skyworks, including a Transition Services Agreement ("TSA").

Through the TSA, the Company will sublease certain premises to Skyworks and provide various temporary support services for three to eighteen months , depending on the service provided.

Although the services provided under the TSA will generate continuing cash flows between the Company and Skyworks for the duration of the TSA, the amounts are not expected to be material to the ongoing operations of either entity.

In addition, the Company has no contractual ability through the TSA or any other agreement to significantly influence the operating or financial policies of Skyworks.

Earnings (Loss) Per Share

The following table sets forth the computation of basic and diluted loss per share from continuing operations (in thousands, except per share data):

Three Months Ended

Six Months Ended

Loss from continuing operations

Shares used in computing basic loss per share

Effect of dilutive securities:

Stock-based awards and convertible debt

Shares used in computing diluted earnings per share

Earnings per share:

Shares used in computing diluted loss per share

Loss per share:

Silicon Laboratories Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

Earnings (Loss) Per Share (Continued)

For the three months ended July 3, 2021 and July 4, 2020 and the six months ended July 3, 2021 and July 4, 2020, approximately 0.0 million, 0.4 million, 0.0 million and 0.3 million shares, respectively, consisting primarily of restricted stock awards (RSUs) and market stock awards (MSUs) granted under our 2009 Stock Incentive Plan, were not included in the diluted loss per share calculation since the shares were anti-dilutive.

Further, diluted shares for the three months ended July 3, 2021 and July 4, 2020 and the six months ended July 3, 2021 and July 4, 2020 excluded 1.0 million, 0.3 million, 1.3 million and 0.5 million shares, respectively, due to the Company’s loss from continuing operations for the periods.

The Company intends to settle the principal amount of its convertible senior notes in cash and any excess value in shares in the event of a conversion.

Accordingly, shares issuable upon conversion of the principal amount have been excluded from the calculation of diluted earnings per share.

Accordingly, shares issuable upon conversion of the principal amount using the treasury stock method have been excluded from the calculation of diluted earnings per share.

If the market value of the notes under certain prescribed conditions exceeds the conversion amount, the excess is included in the denominator for the computation of diluted earnings per share using the treasury stock method.

For the three months ended April 3, 2021 and April 4, 2020, approximately 1.1 million and 0.3 million shares, respectively, were included in the denominator for the calculation of diluted earnings per share.

For the three months ended July 3, 2021 and July 4, 2020 and the six months ended July 3, 2021 and July 4, 2020, approximately 0.5 million, 0.0 million, 0.8 million and 0.2 million shares, respectively, were included in the denominator for the calculation of diluted earnings per share.

See Note 8, Debt , to the Condensed Consolidated Financial Statements for additional information.

3 unchanged sentences

Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 – Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 – Inputs are unobservable for the asset or liability and are developed based on the best information available in the circumstances, which might include the Company’s own data.

Silicon Laboratories Inc.

1 unchanged sentence

Fair Value of Financial Instruments (Continued)

Level 2 – Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 – Inputs are unobservable for the asset or liability and are developed based on the best information available in the circumstances, which might include the Company’s own data.

The following summarizes the valuation of the Company’s financial instruments (in thousands).

1 unchanged sentence

Fair Value Measurements

at April 3, 2021 Using

at July 3, 2021 Using

Quoted Prices in

41 unchanged sentences

Contractual maturities of investments

The Company’s investments are reported at fair value, with unrealized gains and losses, net of tax, recorded as a component of accumulated other comprehensive income in the Consolidated Balance Sheet.

The following summarizes the contractual underlying maturities of the Company’s available-for-sale investments and money market funds at April 3, 2021 (in thousands):

The Company’s investments are reported at fair value, with unrealized gains and losses, net of tax, recorded as a component of accumulated other comprehensive income (loss) in the Consolidated Balance Sheet.

The following summarizes the contractual underlying maturities of the Company’s available-for-sale investments and money market funds at July 3, 2021 (in thousands):

Due in one year or less

5 unchanged sentences

12 Months or Greater

As of April 3, 2021

As of July 3, 2021

Government debt securities

7 unchanged sentences

Auction rate securities

The gross unrealized losses as of April 3, 2021 and January 2, 2021 were due primarily to changes in market interest rates and the illiquidity of the Company’s auction-rate securities.

The gross unrealized losses as of July 3, 2021 and January 2, 2021 were due primarily to changes in market interest rates and the illiquidity of the Company’s auction-rate securities.

The Company’s auction-rate securities have been illiquid since 2008 when auctions for the securities failed because sell orders exceeded buy orders.

6 unchanged sentences

When evaluating an investment for impairment, the Company reviews factors such as the severity of the impairment, changes in underlying credit ratings, forecasted recovery, the Company’s intent to sell or the likelihood that it would be required to sell the investment before its anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made.

As of April 3, 2021, there were no material declines in the market value of available-for-sale investments due to credit-related factors.

At April 3, 2021 and January 2, 2021, there were no material unrealized gains associated with the Company’s available-for-sale investments.

As of July 3, 2021, there were no material declines in the market value of available-for-sale investments due to credit-related factors.

At July 3, 2021 and January 2, 2021, there were no material unrealized gains associated with the Company’s available-for-sale investments.

Level 3 fair value measurements

2 unchanged sentences

Fair Value at

April 3, 2021

Valuation Technique

8 unchanged sentences

Generally, a change in the assumptions used for expected holding period is accompanied by a directionally similar change in the assumptions used for estimated yield and discount rate.

The following summarizes the activity in Level 3 financial instruments for the three months ended April 3, 2021 (in thousands):

The following summarizes the activity in Level 3 financial instruments for the three and six months ended July 3, 2021 (in thousands):

Auction Rate Securities

Beginning balance

Loss included in other comprehensive loss

Balance at April 3, 2021

Loss included in other comprehensive income (loss)

Balance at July 3, 2021

Fair values of other financial instruments

2 unchanged sentences

The notes are traded in less active markets and are therefore classified as a Level 2 fair value measurement.

As of April 3, 2021 and January 2, 2021, the fair value of the 0.625 % convertible senior notes due in 2025 was $ 691.2 million and $ 671.4 million, respectively.

As of July 3, 2021 and January 2, 2021, the fair value of the 0.625 % convertible senior notes due in 2025 was $ 743.2 million and $ 671.4 million, respectively.

The Company’s other financial instruments, including cash, accounts receivable and accounts payable, are recorded at amounts that approximate their fair values due to their short maturities.

13 unchanged sentences

If the foreign currency forward contracts are terminated or can no longer qualify as hedging instruments prior to maturity, the fair value of the contracts recorded in accumulated other comprehensive income (loss) may be recognized in the Consolidated Statement of Income based on an assessment of the contracts at the time of termination.

The Company has entered into foreign currency forward contracts for a portion of its forecasted operating expenses denominated in the Euro, Norwegian Krone and Hungarian Forint.

As of April 3, 2021, the contracts had maturities of one to twelve months and an aggregate notional value of $ 22.0 million.

The Company has entered into foreign currency forward contracts for a portion of its forecasted operating expenses denominated in the Euro, Norwegian Krone, Indian Rupee and Hungarian Forint.

As of July 3, 2021, the contracts had maturities of one to six months and an aggregate notional value of $ 23.1 million.

Gains expected to be reclassified into earnings in the next twelve months were not material.

6 unchanged sentences

The Company does not apply hedge accounting to these foreign currency forward contracts.

As of April 3, 2021, the Company held three foreign currency forward contracts denominated in Singapore Dollars with a notional value of $ 16.5 million.

As of July 3, 2021, the Company held two foreign currency forward contracts denominated in Singapore Dollars with a notional value of $ 8.9 million and one foreign currency forward contract denominated in Indian Rupees with a notional value of $ 5.3 million.

The fair value of foreign contracts and contract losses recognized in income were not material for any of the periods presented.

5 unchanged sentences

Notes to Condensed Consolidated Financial Statements (Continued)

Redpine Signals

On April 28, 2020, the Company acquired the Wi-Fi® and Bluetooth® business of Redpine Signals for $ 316.8 million in cash.

This strategic acquisition accelerated the Company’s roadmap for Wi-Fi and Bluetooth silicon and software solutions, while further scaling the Company’s engineering team.

0.625 % Convertible Senior Notes

21 unchanged sentences

All note conversions and redemptions were completed by March 22, 2021.

The Company recognized a loss on debt extinguishment of $ 3.4 million during the three months ended April 3, 2021, which was recorded in interest expense in the Condensed Consolidated Statements of Income.

Silicon Laboratories Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

Debt (Continued)

Convertible Debt, Net

2 unchanged sentences

The carrying amounts of the liability components was estimated by discounting the contractual cash flows of similar non-convertible debt at an appropriate market rate at the date of issuance.

Silicon Laboratories Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

Debt (Continued)

The carrying amount of the Notes consisted of the following (in thousands):

8 unchanged sentences

The effective interest rate for the liability component was 5.336 % for the 2025 Notes and 4.75 % for the 2022 Notes.

As of April 3, 2021, the remaining period over which the debt discount and debt issuance costs will be amortized was 4.2 years for the 2025 Notes.

As of July 3, 2021, the remaining period over which the debt discount and debt issuance costs will be amortized was 4.0 years for the 2025 Notes.

Interest expense related to the notes was comprised of the following (in thousands):

Three Months Ended

Six Months Ended

Contractual interest expense

4 unchanged sentences

The credit facility includes a $ 25 million letter of credit sublimit and a $ 10 million swingline loan sublimit.

The Company also has an option to increase the size of the borrowing capacity by up to the greater of an aggregate of $ 250 million and 100 % of EBITDA, plus an amount that would not cause a secured leverage ratio (funded debt secured by assets/EBITDA) to exceed 3.25 to 1.00, subject to certain conditions.

The Company also has an option to increase the size of the borrowing capacity by up to the greater of an aggregate of $ 250 million and 100 % of EBITDA of the last four fiscal quarters, plus an amount that would not cause a secured leverage ratio (funded debt secured by assets/EBITDA) to exceed 3.25 to 1.00, subject to certain conditions.

The credit facility, other than swingline loans, will bear interest at the Eurodollar rate plus an applicable margin or, at the option of the Company, a base rate (defined as the highest of the Wells Fargo prime rate, the Federal Funds rate plus 0.50 % and the Eurodollar Base Rate plus 1.00 %) plus an applicable margin.

1 unchanged sentence

The applicable margins for the Eurodollar rate loans range from 1.00 % to 1.75 % and for base rate loans range from 0.00 % to 0.75 %, depending in each case, on the leverage ratio as defined in the credit facility.

The credit facility contains various conditions, covenants and representations with which the Company must be in compliance in order to borrow funds and to avoid an event of default, including financial covenants that the Company must maintain a net leverage ratio (funded indebtedness/EBITDA) of no more than 4.25 to 1, a secured leverage ratio of no more than 3.50 to 1, and a minimum interest coverage ratio (EBITDA/interest payments) of no less than 2.50 to 1.

As of April 3, 2021, the Company was in compliance with all covenants of the credit facility.

The Company’s obligations under the credit facility are guaranteed by the Guarantors and are secured by a security interest in substantially all assets of the Company and the Guarantors.

Silicon Laboratories Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

Debt (Continued)

As of July 3, 2021, the Company was in compliance with all covenants of the credit facility.

The Company’s obligations under the credit facility are guaranteed by the Guarantors and are secured by a security interest in substantially all assets of the Company and the Guarantors.

Commitments and Contingencies

2 unchanged sentences

While the ultimate results cannot be predicted with certainty, the Company does not expect them to have a material adverse effect on its Consolidated Financial Statements.

The Company groups its revenues into two categories, based on the markets and applications in which its products may be used.

The following disaggregates the Company's revenue by product category (in thousands):

Three Months Ended

Internet of Things

Infrastructure and automotive

A portion of the Company's sales are made to distributors under agreements allowing certain rights of return and/or price protection related to the final selling price to the end customers.

These factors impact the timing and uncertainty of revenues and cash flows.

During the three months ended April 3, 2021 and April 4, 2020, the Company recognized revenue of $ 12.0 million and $ 11.1 million, respectively, from performance obligations that were satisfied in previous reporting periods.

During the three months ended July 3, 2021 and July 4, 2020 and the six months ended July 3, 2021 and July 4, 2020, the Company recognized revenue of $ 8.4 million, $ 8.5 million, $ 9.3 million and $ 9.5 million, respectively, from performance obligations that were satisfied in previous reporting periods.

The following disaggregates the Company's revenue by sales channel (in thousands):

Three Months Ended

Six Months Ended

Direct customers

10 unchanged sentences

Stock-Based Compensation (Continued)

The following table presents details of stock-based compensation costs recognized in the Condensed Consolidated Statements of Income (in thousands):

The following table presents details of stock-based compensation costs recognized in the Condensed Consolidated Statements of Operations (in thousands):

Three Months Ended

Six Months Ended

Cost of revenues

2 unchanged sentences

Income tax benefit

The Company had approximately $ 66.0 million of total unrecognized compensation costs related to equity grants from the 2009 Plan as of April 3, 2021 that are expected to be recognized over a weighted-average period of approximately 2.0 years.

The Company had approximately $ 110.8 million of total unrecognized compensation costs related to equity grants under the 2009 Plan as of July 3, 2021 that are expected to be recognized over a weighted-average period of approximately 2.4 years.

There were no significant stock-based compensation costs capitalized into assets in any of the periods presented.

Provision (benefit) for income taxes includes both domestic and foreign income taxes at the applicable tax rates adjusted for non-deductible expenses, research and development tax credits and other permanent differences.

Income tax expense (benefit) was $ 0.2 million and $( 0.6 ) million for the three months ended April 3, 2021 and April 4, 2020, resulting in effective tax rates of 1.5 % and ( 35.4 )%, respectively.

The higher provision for income taxes for the three months ended April 3, 2021 was primarily due to higher profits, partially offset by the amount of income earned in foreign jurisdictions where the tax rate may be lower than the federal statutory rate, as well as permanent items including excess tax benefits from stock-based awards and the federal research and development credit.

The benefit from income taxes for the three months ended April 4, 2020 was primarily due to lower profits relative to the amount of income earned in foreign jurisdictions where the tax rate may be lower than the federal statutory rate, as well as the increased impact of permanent items including the federal research and development credit, the tax effects of non-deductible stock-based compensation, global intangible low-tax income (“GILTI”) and excess tax benefits from stock-based awards.

Income tax expense (benefit) was $ 1.2 million and $( 4.2 ) million for the three months ended July 3, 2021 and July 4, 2020, resulting in effective tax rates of ( 6.7 )% and 10.5 %, respectively.

Income tax expense (benefit) was $ 3.2 million and $( 8.4 ) million for the six months ended July 3, 2021 and July 4, 2020, resulting in effective tax rates of ( 7.8 )% and 11.1 %, respectively.

The higher provision for income taxes for the three and six months ended July 3, 2021 was primarily due to the adoption of ASU 2019-12 Simplifying the Accounting for Income Taxes, as of the beginning of the current fiscal year and its requirement to reallocate income tax benefit from continuing operations to discontinued operations.

Under ASU 2019-12, which is being applied prospectively from the date of adoption, the income tax benefit of a loss from continuing operations should be reallocated to discontinued operations if the Company would be unable to benefit from the loss without considering the income from discontinued operations.

As such, the income tax benefit of $ 9.6 million associated with continuing operations for the three and six months ended July 3, 2021 was reallocated to discontinued operations.

Prior to ASU 2019-12, if the Company reported a loss from continuing operations and income from discontinued operations, income from discontinued operations would be considered in determining the income tax benefit allocated to continuing operations.

Uncertain Tax Positions

As of April 3, 2021, the Company had gross unrecognized tax benefits, inclusive of interest, of $ 3.2 million, of which $ 2.5 million would affect the effective tax rate if recognized.

During the three months ended April 3, 2021, the Company did not release any of its unrecognized tax benefits.

As of July 3, 2021, the Company had gross unrecognized tax benefits, inclusive of interest, of $ 3.4 million, of which $ 2.7 million would affect the effective tax rate if recognized.

During the six months ended July 3, 2021, the Company did not release any of its unrecognized tax benefits.

The Company recognizes interest and penalties related to unrecognized tax benefits in the provision (benefit) for income taxes.

These amounts were not material for any of the periods presented.

Silicon Laboratories Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

Income Taxes (Continued)

Following the completion of the Norwegian Tax Administration (“NTA”) examination of the Company’s Norwegian subsidiary for income tax matters relating to fiscal years 2013 - 2016, the Company received an assessment from the NTA in December 2017 concerning an adjustment to its 2013 taxable income related to the pricing of an intercompany transaction.

3 unchanged sentences

The Company plans to exhaust all available administrative remedies, and if unable to resolve this matter through administrative remedies with the NTA, the Company plans to pursue judicial remedies.

Silicon Laboratories Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

Income Taxes (Continued)

The Company believes that it has accrued adequate reserves related to all matters contained in tax periods open to examination.

4 unchanged sentences

Subsequent Event

On April 22, 2021, the Company entered into an Asset Purchase Agreement pursuant to which Skyworks Solutions, Inc.

has agreed to acquire certain assets, rights, and properties, and assume certain liabilities, comprising the Company’s infrastructure and automotive business for $ 2.75 billion in cash.

The Company cannot estimate the amount of the gain to be recorded upon the close of the sale at this time.

The Company has determined that the criteria for classification as held for sale for the infrastructure and automotive business were met beginning in the second quarter of fiscal 2021.

As a result, the assets and liabilities of the infrastructure and automotive business will be classified as held for sale and financial results of the business will be reported as income from discontinued operations beginning in the second quarter of fiscal 2021.

The transaction is subject to regulatory approval and other customary closing conditions and is expected to be closed in the third quarter of fiscal 2021.

On April 22, 2021, the Company entered into an Asset Purchase Agreement (the “Agreement”) pursuant to which Skyworks Solutions, Inc.

agreed to acquire certain assets, rights, and properties, and assume certain liabilities, comprising the Company’s infrastructure and automotive business for $ 2.75 billion in cash.

The sale was completed pursuant to the terms of the Agreement on July 26, 2021.

The Company expects to record a gain on sale, net of income tax, of approximately $ 2.1 billion in its third fiscal quarter of 2021 upon the close of the sale.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements