What changed in this filing

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Item 1. Financial Statements

2022-05-04 compared with 2022-02-04 · 143 added, 90 removed, 382 unchanged (38% of the section changed)

3 unchanged sentences

(Unaudited, in millions, except per share amounts)

Three Months Ended

2021 January 1,

Three Months Ended Six Months Ended

2022 April 2,

2021 April 1,

2022 April 2,

Net revenue $ 1,335.6 $ 1,171.8 $ 2,846.0 $ 2,681.8

9 unchanged sentences

Interest expense ( 11.4 ) — ( 22.3 ) —

Other income, net 1.2 0.2

Other income (expense), net ( 1.8 ) 0.8 ( 0.5 ) 0.9

Income before income taxes 354.1 375.5 790.3 946.3

11 unchanged sentences

(Unaudited, in millions)

Three Months Ended

2021 January 1,

Three Months Ended Six Months Ended

2022 April 2,

2021 April 1,

2022 April 2,

Net income $ 305.8 $ 325.0 $ 705.7 $ 834.3

Other comprehensive income, net of tax

Other comprehensive income (loss), net of tax:

Fair value of investments ( 0.3 ) ( 0.1 ) ( 0.4 ) ( 0.3 )

39 unchanged sentences

525.0 shares authorized;

166.7 shares issued and 164.5 shares outstanding at December 31, 2021, and 165.3 shares issued and 165.3 shares outstanding at October 1, 2021

166.9 shares issued and 161.7 shares outstanding at April 1, 2022 , and 165.3 shares issued and 165.3 shares outstanding at October 1, 2021

Additional paid-in capital 218.1 79.6

8 unchanged sentences

(Unaudited, in millions)

Three Months Ended

2021 January 1,

Six Months Ended

2022 April 2,

Cash flows from operating activities:

24 unchanged sentences

Net proceeds from exercise of stock options 2.6 7.1

Proceeds from employee stock purchase plan 15.5 12.7

Payments of debt ( 50.0 ) —

23 unchanged sentences

Balance at December 31, 2021 164.5 $ 41.1 2.2 $ ( 351.2 ) $ 155.8 $ 5,493.2 $ ( 4.7 ) $ 5,334.2

Net income — $ — — $ — $ — 305.8 — 305.8

Exercise and settlement of share-based awards, net of shares withheld for taxes 0.2 — — ( 3.5 ) 16.3 — — 12.8

Share-based compensation expense — — — — 45.3 — — 45.3

Stock repurchase program ( 3.0 ) ( 0.7 ) 3.0 ( 418.0 ) 0.7 — — ( 418.0 )

Dividends declared — — — — — ( 91.2 ) — ( 91.2 )

Other comprehensive loss — — — — — — ( 0.3 ) ( 0.3 )

Balance at April 1, 2022 161.7 $ 40.4 5.2 $ ( 772.7 ) $ 218.1 $ 5,707.8 $ ( 5.0 ) $ 5,188.6

Balance at October 2, 2020 165.6 $ 41.4 66.7 $ ( 4,093.5 ) $ 3,403.7 $ 4,820.4 $ ( 7.8 ) $ 4,164.2

6 unchanged sentences

Balance at January 1, 2021 164.9 $ 41.2 68.5 $ ( 4,336.9 ) $ 3,471.6 $ 5,246.7 $ ( 7.7 ) $ 4,414.9

Net income — — — — — 325.0 — 325.0

Exercise and settlement of share-based awards, net of shares withheld for taxes 0.2 0.1 — ( 3.6 ) 16.9 — — 13.4

Share-based compensation expense — — — — 41.7 — — 41.7

Dividends declared — — — — — ( 82.6 ) — ( 82.6 )

Other comprehensive income — — — — — — ( 0.1 ) ( 0.1 )

Balance at April 2, 2021 165.1 $ 41.3 68.5 $ ( 4,340.5 ) $ 3,530.2 $ 5,489.1 $ ( 7.8 ) $ 4,712.3

See accompanying Notes to Consolidated Financial Statements.

17 unchanged sentences

Fiscal 2021 consisted of 53 weeks and ended on October 1, 2021.

The three months ended December 31, 2021, and January 1, 2021, each consisted of 13 weeks, respectively.

The three and six months ended April 1, 2022 , and April 2, 2021, each consisted of 13 weeks and 26 weeks, respectively.

REVENUE RECOGNITION

2 unchanged sentences

Net revenue by geographic area is as follows (in millions):

Three Months Ended

2021 January 1,

Three Months Ended Six Months Ended

2022 April 2,

2021 April 1,

2022 April 2,

United States $ 824.0 $ 635.0 $ 1,817.9 $ 1,736.6

China 154.6 285.1 388.9 497.7

Taiwan 110.0 87.5

South Korea 157.3 66.4 252.3 134.3

Taiwan 114.7 132.6 224.7 220.1

Europe, Middle East, and Africa 65.3 45.4 122.2 79.2

Other Asia-Pacific 19.7 7.3 40.0 13.9

Total $ 1,510.4 $ 1,510.0

Total net revenue $ 1,335.6 $ 1,171.8 $ 2,846.0 $ 2,681.8

Net revenue by sales channel is as follows (in millions):

Three Months Ended

2021 January 1,

Three Months Ended Six Months Ended

2022 April 2,

2021 April 1,

2022 April 2,

Distributors $ 1,057.5 $ 1,044.3 $ 2,371.1 $ 2,415.2

Direct customers 278.1 127.5 474.9 266.6

Total $ 1,510.4 $ 1,510.0

Total net revenue $ 1,335.6 $ 1,171.8 $ 2,846.0 $ 2,681.8

The Company’s revenue from external customers is generated principally from the sale of semiconductor products that facilitate various wireless communication applications.

3 unchanged sentences

Current Noncurrent

Available-for-sale:

2022 October 1,

2021 December 31,

2021 April 1,

2022 October 1,

2 unchanged sentences

Municipal bonds 7.9 12.6 — 1.1

Total $ 137.0 $ 137.2 $ 3.5 $ 7.1

Total marketable securities $ 118.4 $ 137.2 $ 3.4 $ 7.1

The contractual maturities of noncurrent available-for-sale marketable securities were due within two years or less.

Neither gross unrealized gains and losses nor realized gains and losses were material as of December 31, 2021, and October 1, 2021, respectively.

Neither gross unrealized gains and losses nor realized gains and losses were material as of April 1, 2022 , and October 1, 2021, respectively.

Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis

5 unchanged sentences

Assets and liabilities recorded at fair value on a recurring basis consisted of the following (in millions):

As of December 31, 2021 As of October 1, 2021

April 1, 2022 October 1, 2021

Fair Value Measurements Fair Value Measurements

3 unchanged sentences

Municipal bonds 7.9 — 7.9 — 13.7 — 13.7 —

Total $ 1,016.9 $ 873.1 $ 143.8 $ — $ 1,027.2 $ 885.5 $ 141.7 $ —

Total assets at fair value $ 778.2 $ 634.6 $ 143.6 $ — $ 1,027.2 $ 885.5 $ 141.7 $ —

* Cash equivalents included in Levels 1 and 2 consist of money market funds and corporate bonds and notes, commercial paper, and agency securities purchased with less than ninety days until maturity.

1 unchanged sentence

The Company’s non-financial assets and liabilities, such as goodwill, intangible assets, and other long-lived assets resulting from business combinations, are measured at fair value using income approach valuation methodologies at the date of acquisition and are subsequently re-measured if there are indicators of impairment.

There were no indicators of impairment identified during the three months ended December 31, 2021.

There were no indicators of impairment identified during the three and six months ended April 1, 2022 .

Fair Value of Debt

2 unchanged sentences

The carrying value of the Term Loan approximates its fair value as the Term Loan is carried at a market observable interest rate that resets periodically.

The estimated fair value of debt consists of the following (in millions):

The carrying amount and estimated fair value of debt consists of the following (in millions):

2022 October 1,

Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value

0.90% Senior Notes due 2023 $ 498.5 $ 489.8 $ 498.2 $ 501.0

21 unchanged sentences

GOODWILL AND INTANGIBLE ASSETS

There were no changes to the carrying amount of goodwill during the three months ended December 31, 2021.

There were no changes to the carrying amount of goodwill during the three and six months ended April 1, 2022 .

The Company tests its goodwill for impairment annually as of the first day of its fourth fiscal quarter and in interim periods if certain events occur indicating the carrying value of goodwill may be impaired.

There were no indicators of impairment noted during the three months ended December 31, 2021.

There were no indicators of impairment noted during the three and six months ended April 1, 2022 .

Intangible assets consist of the following (in millions):

Period (Years) December 31, 2021 October 1, 2021

Period (Years) April 1, 2022 October 1, 2021

Carrying Amount

2 unchanged sentences

Technology licenses 2.6 61.4 ( 32.7 ) 28.7 48.4 ( 23.9 ) 24.5

In-process research and development (“IPR&D”) 594.9 — 594.9 594.9 — 594.9

In-process research and development 427.7 — 427.7 594.9 — 594.9

Total intangible assets $ 1,798.3 $ ( 232.6 ) $ 1,565.7 $ 1,854.5 $ ( 155.9 ) $ 1,698.6

Fully amortized intangible assets are eliminated from both the gross and accumulated amortization amounts in the first quarter of each fiscal year.

Amortization expense related to definite-lived intangible assets was $ 80.0 million and $ 8.0 million for the three months ended December 31, 2021, and January 1, 2021, respectively.

During the three and six months ended April 1, 2022 , $ 167.2 million of in-process research and development (“IPR&D”) assets were transferred to definite-lived intangible assets, and are being amortized over their weighted-average useful lives of 6.6 years.

Amortization expense related to definite-lived intangible assets was $ 65.9 million and $ 145.9 million for the three and six months ended April 1, 2022 , respectively.

Amortization expense related to definite-lived intangible assets was $ 9.5 million and $ 17.5 million for the three and six months ended April 2, 2021, respectively.

Annual amortization expense for the next five fiscal years related to definite-lived intangible assets, excluding IPR&D, is expected to be as follows (in millions):

2 unchanged sentences

The provision for income taxes consists of the following components (in millions):

Three Months Ended

2021 January 1,

Three Months Ended Six Months Ended

2022 April 2,

2021 April 1,

2022 April 2,

United States income taxes 34.3 36.4 52.7 77.4

Foreign income taxes 14.0 14.1 31.9 34.6

Provision (benefit) for income taxes $ 36.2 $ 61.6

Provision for income taxes $ 48.3 $ 50.5 $ 84.6 $ 112.0

Effective tax rate 13.7 % 13.4 % 10.7 % 11.8 %

The difference between the Company’s effective tax rate and the 21.0 % United States federal statutory rate for the three months ended December 31, 2021, and January 1, 2021, respectively, resulted primarily from foreign earnings taxed at rates lower than the federal statutory rate, a benefit from foreign-derived intangible income deduction (“FDII”), windfall tax deductions, and research and experimentation and foreign tax credits earned, partially offset by a tax on global intangible low-taxed income (“GILTI”), and tax expense related to a change in the reserve for uncertain tax positions.

The difference between the Company’s effective tax rate and the 21.0 % United States federal statutory rate for the three and six months ended April 1, 2022 , and April 2, 2021, respectively, resulted primarily from foreign earnings taxed at rates lower than the federal statutory rate, a benefit from foreign-derived intangible income deduction (“FDII”), windfall tax deductions, and research and experimentation and foreign tax credits earned, partially offset by a tax on global intangible low-taxed income (“GILTI”), and tax expense related to a change in the reserve for uncertain tax positions.

COMMITMENTS AND CONTINGENCIES

23 unchanged sentences

The timing and amount of any shares of the Company’s common stock that are repurchased under the repurchase program are determined by the Company’s management based on its evaluation of market conditions and other factors.

During the three months ended December 31, 2021, the Company paid $ 269.4 million (including commissions) in connection with the repurchase of 1.7 million shares of its common stock (paying an average price of $ 159.56 per share), all of which shares were repurchased pursuant to the January 26, 2021, stock repurchase program.

As of December 31, 2021, $ 1.7 billion remained available under the January 26, 2021, stock repurchase program.

During the three months ended January 1, 2021, the Company paid $ 195.6 million (including commissions) in connection with the repurchase of 1.4 million shares of its common stock (paying an average price of $ 138.85 per share), all of which shares were repurchased pursuant to the January 30, 2019, stock repurchase program.

On February 3, 2022 , the Company announced that the Board of Directors had declared a cash dividend on the Company’s common stock of $ 0.56 per share.

This dividend is payable on March 15, 2022 , to the Company’s stockholders of record as of the close of business on February 22, 2022 .

During the three months ended April 1, 2022 , the Company paid $ 418.0 million (including commissions) in connection with the repurchase of 3.0 million shares of its common stock (paying an average price of $ 138.46 per share).

During the six months ended April 1, 2022 , the Company paid $ 687.4 million (including commissions) in connection with the repurchase of 4.7 million shares of its common stock (paying an average price of $ 146.03 per share), all of which shares were repurchased pursuant to the January 26, 2021, stock repurchase program.

As of April 1, 2022 , $ 1.3 billion remained available under the January 26, 2021, stock repurchase program.

During the three months ended April 2, 2021, the Company did not repurchase any shares of its common stock.

During the six months ended April 2, 2021, the Company paid $ 195.6 million (including commissions) in connection with the repurchase of 1.4 million shares of its common stock (paying an average price of $ 138.85 per share), all of which shares were repurchased pursuant to the January 30, 2019, stock repurchase program.

On May 3, 2022 , the Company announced that the Board of Directors had declared a cash dividend on the Company’s common stock of $ 0.56 per share.

This dividend is payable on June 14, 2022 , to the Company’s stockholders of record as of the close of business on May 24, 2022 .

Dividends charged to retained earnings were as follows (in millions, except per share data):

1 unchanged sentence

First quarter $ 0.56 $ 92.5 $ 0.50 $ 83.0

Second quarter 0.56 91.2 0.50 82.6

Total dividends $ 1.12 $ 183.7 $ 1.00 $ 165.6

Share-based Compensation

The following table summarizes the share-based compensation expense by line item in the Statements of Operations (in millions):

Three Months Ended

2021 January 1,

The following table summarizes the share-based compensation expense by line item in the Consolidated Statements of Operations (in millions):

Three Months Ended Six Months Ended

2022 April 2,

2021 April 1,

2022 April 2,

Cost of goods sold $ 6.3 $ 12.7 $ 14.9 $ 19.1

4 unchanged sentences

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

Three Months Ended

2021 January 1,

Three Months Ended Six Months Ended

2022 April 2,

2021 April 1,

2022 April 2,

Net income $ 305.8 $ 325.0 $ 705.7 $ 834.3

6 unchanged sentences

Basic earnings per share are calculated by dividing net income by the weighted average number of shares of the Company’s common stock outstanding during the period.

The calculation of diluted earnings per share includes the dilutive effect of equity-based awards that were outstanding during the three months ended December 31, 2021, and January 1, 2021, using the treasury stock method.

The calculation of diluted earnings per share includes the dilutive effect of equity-based awards that were outstanding during the three and six months ended April 1, 2022 , and April 2, 2021, using the treasury stock method.

Shares issuable upon the vesting of performance stock awards are likewise included in the calculation of diluted earnings per share as of the date the condition(s) have been satisfied, assuming the end of the reporting period was the end of the contingency period.

4 unchanged sentences

Accrued taxes $ 64.3 $ 88.6

Operating lease liability 29.7 33.0

Short-term operating lease liabilities 19.2 33.0

Accrued customer liabilities 151.2 119.7

4 unchanged sentences

Words such as “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “seek,” “should,” “will,” “would,” and similar expressions or variations or negatives of such words are intended to identify forward-looking statements but are not the exclusive means of identifying forward-looking statements in this report.

Additionally, statements concerning future matters such as the possible impacts of the COVID-19 pandemic, the development of new products, enhancements of technologies, sales levels, expense levels, the benefits of acquisitions we have made or may make in the future and other statements regarding matters that are not historical are forward-looking statements.

Additionally, statements concerning future matters such as the possible impacts of geopolitical conflicts, inflation, and the COVID-19 pandemic, as well as the development of new products, enhancements of technologies, sales levels, expense levels, the benefits of acquisitions we have made or may make in the future, and other statements regarding matters that are not historical are forward-looking statements.

Although forward-looking statements in this report reflect the good faith judgment of our management as of the date the statement is first made, such statements can only be based on facts and factors then known by us.

11 unchanged sentences

RESULTS OF OPERATIONS

Three Months Ended December 31, 2021, and January 1, 2021

Three and Six Months Ended April 1, 2022 , and April 2, 2021

The following table sets forth the results of our operations expressed as a percentage of net revenue:

Three Months Ended

2021 January 1,

Three Months Ended Six Months Ended

2022 April 2,

2021 April 1,

2022 April 2,

Net revenue 100.0 % 100.0 % 100.0 % 100.0 %

9 unchanged sentences

Interest expense (0.9) — (0.8) —

Other income, net 0.1 —

Other income (expense), net (0.1) — — —

Income before income taxes 26.5 32.0 27.8 35.3

3 unchanged sentences

Our highly innovative analog semiconductors are connecting people, places, and things spanning a number of new and previously unimagined applications within the aerospace, automotive, broadband, cellular infrastructure, connected home, entertainment and gaming, industrial, medical, military, smartphone, tablet, and wearable markets.

During the three months ended December 31, 2021, the following key factors contributed to our overall results of operations, financial position, and cash flows:

• Net revenue slightly increased to $1,510.4 million for the three months ended December 31, 2021, as compared to $1,510.0 million for the corresponding period in fiscal 2021, driven primarily by our prior year fourth quarter acquisition to support high-growth market segments, including electric and hybrid vehicles, industrial and motor control, power supply, 5G wireless infrastructure, optical data communication and data center, automotive, and smart home.

• Our ending cash, cash equivalents, and marketable securities balance decreased slightly to $1,016.9 million as of December 31, 2021, from $1,027.2 million as of October 1, 2021.

The minimal decrease in cash, cash equivalents, and marketable securities during the three months ended December 31, 2021, was primarily due to the repurchase of 1.7 million shares of common stock for $ 269.4 million, capital expenditures of $ 95.8 million, dividend payments of $ 92.5 million, and repayments of Term Loans (as defined below) of $50.0 million, mostly offset by cash generated from operations of $581.7 million.

Three Months Ended

2021 Change January 1,

During the three months ended April 1, 2022 , the following key factors contributed to our overall results of operations, financial position, and cash flows:

• Net revenue increased to $1,335.6 million for the three months ended April 1, 2022 , as compared to $1,171.8 million for the corresponding period in fiscal 2021, driven primarily by our prior year fourth quarter acquisition to support high-growth market segments, including electric and hybrid vehicles, industrial and motor control, power supply, 5G wireless infrastructure, optical data communication and data center, automotive, and smart home.

The increase in net revenue was also driven in part by an increase in demand for next-generation wireless connectivity products, including 5G and advanced Wi-Fi solutions, from major OEMs and the associated increases in average content per device for these products, partially offset by a decrease in demand for our mobile products from smartphone customers in China.

• Our ending cash, cash equivalents, and marketable securities balance decreased to $778.2 million.

The decrease in cash, cash equivalents, and marketable securities during the three months ended April 1, 2022, was primarily due to the repurchase of 3.0 million shares of common stock for $ 418.0 million, capital expenditures of $126.7 million, and dividend payments of $91.2 million, partially offset by cash generated from operations of $392.9 million.

Three Months Ended Six Months Ended

2022 Change April 2,

2021 April 1,

2022 Change April 2,

(dollars in millions)

2 unchanged sentences

We generally experience seasonal peaks during our fourth and first fiscal quarters (which correspond to the second half of the calendar year), primarily as a result of increased worldwide production of consumer electronics in anticipation of increased holiday sales, whereas our second and third fiscal quarters are typically lower and in line with seasonal industry trends.

The slight increase in net revenue for the three months ended December 31, 2021, as compared with the corresponding period in fiscal 2021, was driven primarily by our prior year fourth quarter acquisition to support high-growth market segments, including electric and hybrid vehicles, industrial and motor control, power supply, 5G wireless infrastructure, optical data communication and data center, automotive, and smart home.

Three Months Ended

2021 Change January 1,

The increase in net revenue for the three and six months ended April 1, 2022 , as compared with the corresponding periods in fiscal 2021, was driven primarily by our prior year fourth quarter acquisition to support high-growth market segments, including electric and hybrid vehicles, industrial and motor control, power supply, 5G wireless infrastructure, optical data communication and data center, automotive, and smart home.

Three Months Ended Six Months Ended

2022 Change April 2,

2021 April 1,

2022 Change April 2,

(dollars in millions)

4 unchanged sentences

As part of our normal course of business, we intend to improve gross profit with efforts to increase unit volumes, improve manufacturing efficiencies, lower manufacturing costs of existing products, and by introducing new and higher value-added products.

The decrease in gross profit for the three months ended December 31, 2021, as compared with the corresponding period in fiscal 2021, was primarily the result of an increase in amortization of acquisition intangibles, including inventory step-up, due to additional intangible assets acquired during fiscal 2021.

The increase in gross profit for the three and six months ended April 1, 2022 , as compared with the corresponding periods in fiscal 2021, was primarily the result of a favorable product mix including volume increases for new product introductions with a gross profit impact of $110.9 million and $220.7 million, respectively, partially offset by lower comparable unit volumes and an increase in amortization of acquisition intangibles, including inventory step-up, due to additional intangible assets acquired during the fourth quarter of fiscal 2021.

Research and Development

Three Months Ended

2021 Change January 1,

Three Months Ended Six Months Ended

2022 Change April 2,

2021 April 1,

2022 Change April 2,

(dollars in millions)

2 unchanged sentences

Research and development expenses consist primarily of direct personnel costs including share-based compensation expense, costs for pre-production evaluation, and testing of new devices, masks, engineering prototypes, and design tool costs.

The increase in research and development expenses for the three months ended December 31, 2021, as compared with the corresponding period in fiscal 2021, was primarily related to headcount-related expenses, including share-based compensation, as a result of our increased investment in developing new technologies and products.

The increase in headcount was partially due to our acquisition in fiscal 2021.

The increase in research and development expenses for the three and six months ended April 1, 2022 , as compared with the corresponding periods in fiscal 2021, was primarily related to headcount-related expenses, including share-based compensation, as a result of our increased investment in developing new technologies and products.

The increase in headcount was partially due to our acquisition in the fourth quarter of fiscal 2021.

Selling, General, and Administrative

Three Months Ended

2021 Change January 1,

Three Months Ended Six Months Ended

2022 Change April 2,

2021 April 1,

2022 Change April 2,

(dollars in millions)

2 unchanged sentences

Selling, general, and administrative expenses include legal and related costs, accounting, treasury, human resources, information systems, customer service, bad debt expense, sales commissions, share-based compensation expense, advertising, marketing, costs associated with business combinations completed or contemplated during the period, and other costs.

The increase in selling, general, and administrative expenses for the three months ended December 31, 2021, as compared with the corresponding period in fiscal 2021, was primarily related to increases in headcount-related expenses, including share-based compensation.

The increase in headcount was primarily due to our acquisition in fiscal 2021.

The increase in selling, general, and administrative expenses for the three and six months ended April 1, 2022 , as compared with the corresponding periods in fiscal 2021, was primarily related to increases in headcount-related expenses, including share-based compensation.

The increase in headcount was primarily due to our acquisition in the fourth quarter of fiscal 2021.

Amortization of Intangibles

Three Months Ended

2021 Change January 1,

Three Months Ended Six Months Ended

2022 Change April 2,

2021 April 1,

2022 Change April 2,

(dollars in millions)

1 unchanged sentence

% of net revenue 1.6 % 0.2 % 1.9 % 0.2 %

The increase in amortization expense for the three months ended December 31, 2021, as compared with the corresponding period in fiscal 2021, was primarily due to additional intangible assets acquired during fiscal 2021.

The increase in amortization expense for the three and six months ended April 1, 2022 , as compared with the corresponding periods in fiscal 2021, was primarily due to the intangible assets acquired during the fourth quarter of fiscal 2021.

Interest Expense

Three Months Ended

2021 Change January 1,

Three Months Ended Six Months Ended

2022 Change April 2,

2021 April 1,

2022 Change April 2,

(dollars in millions)

1 unchanged sentence

% of net revenue (0.9) % — % (0.8) % — %

The increase in interest expense for the three months ended December 31, 2021, as compared with the corresponding period in fiscal 2021, was due to the issuance of the Notes (as defined below) in May 2021 and the borrowing of the Term Loans (as defined above) in July 2021.

The increase in interest expense for the three and six months ended April 1, 2022 , as compared with the corresponding periods in fiscal 2021, was due to the issuance of the Notes (as defined below) in May 2021 and the borrowing of the Term Loans (as defined below) in July 2021.

Provision for Income Taxes

Three Months Ended

2021 Change January 1,

Three Months Ended Six Months Ended

2022 Change April 2,

2021 April 1,

2022 Change April 2,

(dollars in millions)

1 unchanged sentence

% of net revenue 3.6 % 4.3 % 3.0 % 4.2 %

We recorded a provision for income taxes of $ 36.2 million (which consisted of $ 18.4 million and $ 17.8 million related to United States and foreign income taxes, respectively) for the three months ended December 31, 2021.

The decrease in income tax expense for the three months ended December 31, 2021, as compared with the corresponding period in fiscal 2021, was primarily due to a decrease in income from operations and an increase in windfall tax deductions.

We recorded a provision for income taxes of $ 48.3 million (which consisted of $ 34.3 million and $ 14.0 million related to United States and foreign income taxes, respectively) and $84.6 million (which consisted of $ 52.7 million and $ 31.9 million related to United States and foreign income taxes, respectively) for the three and six months ended April 1, 2022 , respectively.

The decrease in income tax expense for the three and six months ended April 1, 2022 , as compared with the corresponding periods in fiscal 2021, was primarily due to a decrease in income from operations and an increase in windfall tax deductions.

LIQUIDITY AND CAPITAL RESOURCES

Three Months Ended

(in millions) December 31,

2021 January 1,

Six Months Ended

(in millions) April 1,

2022 April 2,

Cash and cash equivalents at beginning of period $ 882.9 $ 566.7

5 unchanged sentences

Cash provided by operating activities consists of net income for the period adjusted for certain non-cash items and changes in certain operating assets and liabilities.

The $96.6 million increase in cash provided by operating activities during the three months ended December 31, 2021, as compared with the corresponding period in fiscal 2021, was primarily related to favorable changes in working capital of $96.2 million, due primarily to changes in accounts receivable.

The $126.3 million decrease in cash provided by operating activities during the six months ended April 1, 2022, as compared with the corresponding period in fiscal 2021, was primarily related to unfavorable changes in working capital of $186.6 million, due primarily to changes in inventory and increases in cash deposits with suppliers and customers.

Cash used in investing activities:

Cash used in investing activities consists primarily of capital expenditures and cash paid related to the purchase of marketable securities, offset by cash received related to the sale or maturity of marketable securities.

The $13.0 million decrease in cash used in investing activities during the three months ended December 31, 2021, as compared with the corresponding period in fiscal 2021, was primarily related to a $23.1 million decrease in cash used for capital expenditures, partially offset by an $8.6 million decrease in the net sales of marketable securities.

The $0.5 million decrease in cash used in investing activities during the six months ended April 1, 2022, as compared with the corresponding period in fiscal 2021, was primarily related to a $37.3 million decrease in cash used for capital expenditures, partially offset by a $28.7 million decrease in the net sales of marketable securities.

Cash used in financing activities:

Cash used in financing activities consists primarily of proceeds and payments related to our long-term borrowings and cash transactions related to equity.

The $166.6 million increase in cash used in financing activities during the three months ended December 31, 2021, as compared with the corresponding period in fiscal 2021, was primarily related to an increase of $73.8 million in stock repurchase activity, a $50.0 million repayment of Term Loans, an increase of $32.4 million related to the minimum statutory payroll tax withholdings upon vesting of employee performance and restricted stock awards, and an increase of $9.5 million in dividend payments.

Cash, cash equivalents, and marketable securities totaled $1,016.9 million as of December 31, 2021, representing a decrease of $10.3 million from October 1, 2021.

The $593.9 million increase in cash used in financing activities during the six months ended April 1, 2022, as compared with the corresponding period in fiscal 2021, was primarily related to an increase of $491.8 million in stock repurchase activity, a $50.0 million repayment of Term Loans, an increase of $32.3 million related to the minimum statutory payroll tax withholdings upon vesting of employee performance and restricted stock awards, and an increase of $18.1 million in dividend payments.

Cash, cash equivalents, and marketable securities totaled $778.2 million as of April 1, 2022, representing a decrease of $249.0 million from October 1, 2021.

The decrease during the six months ended April 1, 2022, resulted primarily from the repurchase of 4.7 million shares of common stock for $687.4 million, capital expenditures of $222.5 million, and dividend payments of $183.7 million, partially offset by cash generated from operations of $974.5 million.

We have outstanding $500.0 million of Notes Due 2023, $500.0 million of Notes Due 2026, and $500.0 million of Notes Due 2031 (the “Notes”).

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and to pay fees and expenses incurred in connection therewith.

During the three months ended December 31, 2021, we repaid $50.0 million of outstanding borrowings under the Term Loans.

As of December 31, 2021, there were $700.0 million of borrowings outstanding under the Term Credit Agreement.

During the six months ended April 1, 2022, we repaid $50.0 million of outstanding borrowings under the Term Loans.

As of April 1, 2022, there were $700.0 million of borrowings outstanding under the Term Credit Agreement.

We have a Revolving Credit Agreement (the “Revolving Credit Agreement”) under which we may borrow up to $750.0 million for general corporate purposes and working capital needs of the Company and its subsidiaries.

As of December 31, 2021, there were no borrowings outstanding under the revolving credit facility (the “Revolver”).

As of April 1, 2022, there were no borrowings outstanding under the revolving credit facility (the “Revolver”).

The Revolving Credit Agreement expires July 26, 2026.

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However, we cannot be certain that our cash on hand, cash generated from operations, and funds from our Revolver will be available in the future to fund all of our capital and operating requirements.

In addition, any future strategic investments and significant acquisitions may require additional cash and capital resources.

In addition, any future strategic investments and significant acquisitions may require additional cash and capital

If we are unable to obtain sufficient cash or capital to meet our needs on a timely basis and on favorable terms, our business and operations could be materially and adversely affected.

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

What changed 10-Q

Item 1. Financial Statements