What changed in this filing

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Item 9A. Controls and Procedures

2022-02-02 compared with 2021-02-03 · 380 added, 325 removed, 845 unchanged (45% of the section changed)

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Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Certain information required by Part III is omitted from this report because we intend to file a definitive Proxy Statement pursuant to Regulation 14A (the “Proxy Statement”) no later than 120 days after the end of the fiscal year covered by this report, and certain information to be included therein is incorporated herein by reference.

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Financial Statements

Report of independent registered public accounting firm

Report of independent registered public accounting firm (PCAOB ID:

Report of independent registered public accounting firm

Consolidated Balance Sheets at January 2, 2021 and December 28, 2019

Consolidated Statements of Income for the fiscal years ended January 2, 2021, December 28, 2019 and December 29, 2018

Consolidated Statements of Comprehensive Income for the fiscal years ended January 2, 2021, December 28, 2019 and December 29, 2018

Consolidated Statements of Changes in Stockholders' Equity for the fiscal years ended January 2, 2021, December 28, 2019 and December 29, 2018

Consolidated Statements of Cash Flows for the fiscal years ended January 2, 2021, December 28, 2019 and December 29, 2018

Consolidated Balance Sheets at January 1, 2022 and January 2, 2021

Consolidated Statements of Income for the fiscal years ended January 1, 2022, January 2, 2021 and December 28, 2019

Consolidated Statements of Comprehensive Income for the fiscal years ended January 1, 2022, January 2, 2021 and December 28, 2019

Consolidated Statements of Changes in Stockholders’ Equity for the fiscal years ended January 1, 2022, January 2, 2021 and December 28, 2019

Consolidated Statements of Cash Flows for the fiscal years ended January 1, 2022, January 2, 2021 and December 28, 2019

Notes to Consolidated Financial Statements

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The exhibits listed on the accompanying index to exhibits immediately following the Consolidated Financial Statements are filed as part of, or hereby incorporated by reference into, this Form 10-K.

Asset Purchase Agreement, dated March 11, 2020, by and among Silicon Laboratories Inc., Silicon Laboratories International Pte.

and Redpine Signals, Inc.

(filed as Exhibit 2.1 to the Form 8-K filed on March 12, 2020).

The following exhibits are filed as part of this report:

Asset Purchase Agreement dated April 22, 2021 between Silicon Laboratories Inc.

and Skyworks Solutions, Inc.

(filed as Exhibit 2.1 to the Form 8-K filed on April 22, 2021).

Form of Fourth Amended and Restated Certificate of Incorporation of Silicon Laboratories Inc.

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333-94853) (the “IPO Registration Statement”)).

Fourth Amended and Restated Bylaws of Silicon Laboratories Inc.

(filed as Exhibit 3.2 to the Form 8-K filed on January 27, 2017).

Fifth Amended and Restated Bylaws of Silicon Laboratories Inc.

(filed as Exhibit 3.1 to the Form 8-K filed on February 3, 2021).

Specimen certificate for shares of common stock (filed as Exhibit 4.1 to the IPO Registration Statement).

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Security and Pledge Agreement, dated July 31, 2012, by and among Silicon Laboratories Inc., with the other parties identified as “Obligors” (as defined therein) and such other parties that may become Obligors thereunder after the date thereof, and Bank of America, N.A (filed as Exhibit 10.2 to the Form 8-K filed August 1, 2012).

Silicon Laboratories Inc.

2009 Stock Incentive Plan, as amended and restated on April 20, 2017 (filed as Exhibit 10.1 to the Form 10-Q filed on July 26, 2017).

Silicon Laboratories Inc.

2009 Employee Stock Purchase Plan, as amended and restated on April 20, 2017 (filed as Exhibit 10.2 to the Form 10-Q filed on July 26, 2017).

Form of Restricted Stock Units Grant Notice and Global Restricted Stock Units Award Agreement under Registrant’s 2009 Stock Incentive Plan, as amended and restated (filed as Exhibit 10.7 to the Form 10-K filed on February 1, 2017).

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and Wells Fargo Securities, LLC, as representatives of the several initial purchasers named therein, dated February 28, 2017 (filed as Exhibit 10.1 to the Form 8-K filed on March 6, 2017).

CEO Change in Control Agreement dated October 23, 2018 between Silicon Laboratories Inc.

Tyson Tuttle (filed as Exhibit 10.1 to the Form 8-K filed on October 24, 2018).

Silicon Laboratories Inc.

Form of Change in Control Agreement (filed as Exhibit 10.2 to the Form 8-K filed on October 24, 2018).

2021 Bonus Plan (filed as Exhibit 10.1 to the Form 8-K filed on February 3, 3021).

Silicon Laboratories Inc.

2020 Bonus Plan (filed as Exhibit 10.1 to the Form 8-K filed on January 24, 2020).

Form of CEO Severance Agreement (filed as Exhibit 10.1 to the Form 8-K filed on May 17, 2021).

Silicon Laboratories Inc.

Form of Executive Severance Agreement (filed as Exhibit 10.2 to the Form 8-K filed on May 17, 2021).

Silicon Laboratories Inc.

Form of Performance Stock Units Grant Notice and Global PSU Award Agreement under Registrant’s 2009 Stock Incentive Plan, as amended and restated (filed as Exhibit 10.3 to the Form 8-K filed on May 17, 2021).

Silicon Laboratories Inc.

2009 Stock Incentive Plan (As Amended and Restated on April 22, 2021) (filed as Exhibit 4.3 to the Form S-8 filed on May 5, 2021).

Silicon Laboratories Inc.

2009 Employee Stock Purchase Plan (As Amended and Restated on April 22, 2021) (filed as Exhibit 4.4 to the Form S-8 filed on May 5, 2021).

CEO Transition Agreement between G.

Tyson Tuttle and Silicon Laboratories Inc.

dated July 27, 2021 (filed as Exhibit 10.1 to the Form 8-K filed on July 28, 2021).

ASR Agreement dated October 27, 2021 between Silicon Laboratories Inc.

and Goldman Sachs & Co.

LLC (filed as Exhibit 10.1 to the Form 8-K filed on October 28, 2021).

Silicon Laboratories Inc.

Form of Performance Stock Units Grant Notice and Global PSU Award Agreement under Registrant’s 2009 Stock Incentive Plan, as amended and restated (filed as Exhibit 10.1 to the Form 8-K filed on December 23, 2021).

Subsidiaries of the Registrant.

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SILICON LABORATORIES INC.

President and Chief Executive Officer

Matthew Johnson

President and

Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints G.

Tyson Tuttle and John C.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints R.

Matthew Johnson and John C.

Hollister and each of them, acting individually, as his or her attorney-in-fact, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this annual report on Form 10-K and other documents in connection herewith and therewith, and to file the same, with all exhibits thereto, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection herewith and therewith and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

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February 2, 2022

Matthew Johnson

President, Chief Executive Officer and Director

(Principal Executive Officer)

February 2, 2022

Matthew Johnson

(Principal Executive Officer)

Senior Vice President and Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

February 2, 2022

(Principal Financial Officer)

Chief Accounting Officer

February 2, 2022

(Principal Accounting Officer)

/s/ William G.

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February 2, 2022

/s/ Sherri Luther

February 2, 2022

Sherri Luther

/s/ Nina Richardson

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The Board of Directors and Stockholders of Silicon Laboratories Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Silicon Laboratories Inc.’s internal control over financial reporting as of January 2, 2021, based on criteria established in Internal Control— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Silicon Laboratories Inc.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of January 2, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Silicon Laboratories Inc.

as of January 2, 2021 and December 28, 2019, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for each of the three years in the period ended January 2, 2021, and the related notes and our report dated February 3, 2021 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Austin, Texas

February 3, 2021

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Silicon Laboratories Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Silicon Laboratories Inc.

(the Company) as of January 2, 2021 and December 28, 2019, the related consolidated statements of income, comprehensive income, changes in stockholders' equity and cash flows for each of the three years in the period ended January 2, 2021, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 2, 2021 and December 28, 2019, and the results of its operations and its cash flows for each of the three years in the period ended January 2, 2021, in conformity with U.S.

(the Company) as of January 1, 2022 and January 2, 2021, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for each of the three years in the period ended January 1, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 1, 2022 and January 2, 2021, and the results of its operations and its cash flows for each of the three years in the period ended January 1, 2022, in conformity with U.S.

generally accepted accounting principles.

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For example, we tested controls over management’s review of the variable consideration methodology, the significant assumptions and the historical data utilized in the estimate for assumed product returns and expected price concessions.

To test the variable consideration recognized as revenue and the revenue returns liability, we performed audit procedures that included, among others, an evaluation of the Company’s methodology and significant assumptions, and tested the completeness and accuracy of the historical data utilized in the estimate.

In our assessment of the methodology, we considered changes in the business, changes to specific distributor contracts and evaluated significant assumptions used by comparison to current trends and recent transactions.

To test the variable consideration recognized as revenue and the revenue returns liability, we performed audit procedures that included, among others, an evaluation of the Company’s methodology and significant assumptions and estimates, and tested the completeness and accuracy of the historical data utilized in the estimates.

In our assessment of the methodology, we considered changes in the business, changes to specific distributor contracts, and evaluated significant assumptions used by management by comparison to current trends and recent transactions.

We also evaluated the accuracy of management’s assumed product returns and expected price concessions from prior periods by comparing to subsequent actual activity.

Accounting for Acquisition

Accounting for Discontinued Operations

Description of the Matter

As discussed in Note 8 of the financial statements, on April 28, 2020, the Company acquired the Wi-Fi and Bluetooth business of Redpine Signals, Inc.

for total acquisition consideration of $317 million.

The transaction was accounted for as a business combination in accordance with Accounting Standards Codification (ASC) 805.

Auditing the Company’s accounting for the Redpine Signals acquisition was complex and judgmental due to the significant estimation required by management to determine the fair value of the acquired intangible assets, including developed technology and in-process research and development assets of $62 million and $12 million, respectively.

The Company used variations of the income valuation approach, including the discounted expected future cash flow method, to measure the fair value of these intangible assets.

Significant assumptions used to estimate the fair value of these intangible assets included revenue growth rates, technology migration curves and discount rates.

These assumptions are forward-looking and could be affected by future economic and market conditions.

As discussed in Note 3 of the consolidated financial statements, on July 26, 2021, the Company completed the sale of its Infrastructure and Automotive (“I&A”) business to Skyworks Solutions, Inc.

for $2.75 billion in cash.

In connection with the sale, the Company recognized a pre-tax gain of $2.4 billion in discontinued operations.

As a result of the discontinued operations classification, the comparative period consolidated financial statements for fiscal years 2020 and 2019 have been recast to reclassify balance sheet, income statement and cash flow amounts related to the infrastructure and automotive business as discontinued operations.

Auditing the Company’s discontinued operations was complex due to judgments made by management to calculate the gain on sale, including allocating goodwill between the I&A and Internet of Things (IoT) business lines as well as the non-routine process used by management to compile historical financial data for the I&A business, which involved certain judgments in allocating expenses to the discontinued operations.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s accounting for acquisitions.

For example, we tested controls over management’s review of the valuation of acquired intangible assets, including the review of the valuation models and significant assumptions used in the valuation models.

To test the estimated fair value of these intangible assets, our audit procedures included, among others, evaluating the Company’s valuation methodology, evaluating the significant assumptions used by the Company and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates.

For example, we compared the significant assumptions used to current industry, market and economic trends, to the assumptions used to value similar assets in other acquisitions, and to the historical results of both the Company and the acquiree.

We also involved our valuation specialists to assist with our evaluation of the methodology used by the Company and significant assumptions included in the fair value estimates.

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s accounting for the discontinued operations.

For example, we tested controls over management’s treatment of the sale and calculation of the gain on sale, which included management’s review of the methodologies and assumptions used in the gain on sale calculation as well as controls over the disclosure of discontinued operations, including recasting prior period comparative financial statements.

Our audit procedures included, among others, testing the accuracy of the gain on sale calculation and evaluating the adequacy of the company’s disclosures related to discontinued operations.

For example, we evaluated the appropriateness of the company’s application of the criteria for reporting of discontinued operations by inspecting management’s supporting documentation, reading of board of director meeting minutes and other entity information, and evaluating for contrary evidence based on our understanding of the business.

To test the gain recognized in discontinued operations, we performed audit procedures that included testing the existence and valuation of cash proceeds;

inspecting the related sale agreement to obtain an understanding of the assets and liabilities included in the scope of the sales transaction and testing the completeness and accuracy of the assets and liabilities included in the gain calculation on a sample basis by comparing amounts to the Company’s accounting records and testing the tax effects of the sale.

To test the allocation of goodwill between the I&A and IoT business lines, we involved our valuation specialists to evaluate the reasonableness of the Company’s valuation methodology and significant assumptions used to allocate goodwill.

For example, we compared the significant assumptions used by the Company to current market and economic trends, to the assumptions used to value similar assets in other relevant divestitures, and to the historical results of the Company.

We performed procedures to audit the presentation of discontinued operations in the financial statements, including testing the recast prior period financial statements and assessing the reasonableness of key judgments applied by management in allocating expenses to the discontinued operations.

/s/ Ernst & Young LLP

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February 2, 2022

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Silicon Laboratories Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Silicon Laboratories Inc.’s internal control over financial reporting as of January 1, 2022, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Silicon Laboratories Inc.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of January 1, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Silicon Laboratories Inc.

as of January 1, 2022 and January 2, 2021, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for each of the three years in the period ended January 1, 2022, and the related notes and our report dated February 2, 2022 expressed an unqualified opinion thereon.