What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-11-17 compared with 2022-11-23 · 160 added, 179 removed, 746 unchanged (31% of the section changed)

4 unchanged sentences

(3) Consolidated Statements of Comprehensive Income for the three years ended September 29 , 202 3

(4) Consolidated Balance Sheets at September 30, 2022, and October 1, 2021

(4) Consolidated Balance Sheets at September 29 , 202 3 , and September 30, 2022

(5) Consolidated Statements of Cash Flows for the three years ended September 29 , 202 3

7 unchanged sentences

We have audited the accompanying consolidated balance sheets of Skyworks Solutions, Inc.

and subsidiaries (the Company) as of September 30, 2022 and October 1, 2021, the related consolidated statements of operations, comprehensive income, cash flows, and stockholders’ equity for each of the years in the three-year period ended September 30, 2022, and the related notes (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of September 29, 2023 and September 30, 2022, the related consolidated statements of operations, comprehensive income, cash flows, and stockholders’ equity for each of the years in the three-year period ended September 29, 2023, and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of September 29, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, 2022 and October 1, 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended September 30, 2022, in conformity with U.S.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 29, 2023 and September 30, 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended September 29, 2023, in conformity with U.S.

generally accepted accounting principles.

42 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

2022 October 1,

10 unchanged sentences

Interest expense ( 64.4 ) ( 47.9 ) ( 13.4 )

Other expense, net ( 2.5 ) ( 0.6 ) ( 0.1 )

Other income (expense), net

18.2 ( 2.5 ) ( 0.6 )

Income before income taxes 1,078.8 1,476.6 1,598.7

13 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

2022 October 1,

9 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

Current assets:

32 unchanged sentences

525.0 shares authorized;

160.2 shares issued and outstanding at September 30, 2022, and 165.3 shares issued and outstanding at October 1, 2021

159.5 shares issued and outstanding at September 29, 2023, and 160.2 shares issued and outstanding at September 30, 2022

Additional paid-in capital 172.4 11.9

Treasury stock, at cost — ( 1.7 )

Retained earnings 5,876.0 5,421.9

8 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

2022 October 1,

21 unchanged sentences

Payments for acquisitions — — ( 2,751.0 )

Receipts from the sales of property, plant, and equipment 7.7 — —

Other 6.5 7.7 —

Net cash used in investing activities ( 224.4 ) ( 378.9 ) ( 3,133.2 )

8 unchanged sentences

Payments of debt ( 900.0 ) ( 50.0 ) ( 250.0 )

Net cash provided by (used in) financing activities ( 1,362.6 ) 1,677.4 ( 907.7 )

Net cash (used in) provided by financing activities ( 1,479.2 ) ( 1,362.6 ) 1,677.4

Net increase (decrease) in cash and cash equivalents 152.8 ( 316.9 ) 316.2

11 unchanged sentences

Shares of common stock Par value of common stock Shares of treasury stock Value of treasury stock Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Total stockholders ’ equity

Balance at September 27, 2019 170.1 $ 42.5 60.1 $ ( 3,412.9 ) $ 3,188.0 $ 4,312.6 $ ( 7.9 ) $ 4,122.3

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

Net income — — — — — 1,498.3 — 1,498.3

3 unchanged sentences

Dividends declared — — — — — ( 340.6 ) — ( 340.6 )

Pre-combination service on replacement awards — — — — 4.1 — — 4.1

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

5 unchanged sentences

Dividends declared — — — — — ( 373.1 ) — ( 373.1 )

Pre-combination service on replacement awards — — — — 4.1 — — 4.1

Other comprehensive loss — — — — — — 3.1 3.1

Balance at October 1, 2021 165.3 $ 41.3 — $ ( 1.7 ) $ 79.6 $ 5,185.8 $ ( 7.9 ) $ 5,297.1

Balance at September 30, 2022 160.2 $ 40.0 — $ — $ 11.9 $ 5,421.9 $ ( 4.8 ) $ 5,469.0

Net income — — — — — 982.8 — 982.8

13 unchanged sentences

All Skyworks subsidiaries are included in the Company’s consolidated financial statements and all intercompany balances are eliminated in consolidation.

Certain items in the fiscal years 2021 and 2020 financial statements have been reclassified to conform to the fiscal 2022 presentation.

Certain items in the fiscal years 2022 and 2021 financial statements, including certain account groupings in the tax reconciliation disclosure, have been reclassified to conform to the fiscal 2023 presentation.

The Company’s fiscal year ends on the Friday closest to September 30.

Fiscal 2022 and 2021 each consisted of 52 weeks and ended on September 30, 2022, and October 1, 2021, respectively.

Fiscal 2020 consisted of 53 weeks and ended on October 2, 2020.

Fiscal years 2023 , 2022, and 2021 each consisted of 52 weeks and ended on September 29, 2023, September 30, 2022, and October 1, 2021, respectively.

Use of Estimates

2 unchanged sentences

Judgment is required in determining the reserves for, and fair value of, items such as overall fair value assessments of assets and liabilities, particularly those classified as Level 2 or Level 3 in the fair value hierarchy, marketable securities, inventory, intangible assets associated with business combinations, share-based compensation, revenue reserves, loss contingencies, and income taxes.

In addition, judgment is required in determining whether a potential indicator of impairment of long-lived assets exists and in estimating future cash flows for any necessary impairment testing.

In addition, judgment is required in determining whether a potential indicator of impairment of long-lived assets, indefinite-lived intangible assets, and goodwill exists and in estimating future cash flows for any necessary impairment testing.

Actual results could differ significantly from these estimates.

Cash and Cash Equivalents

The Company invests excess cash in time deposits, certificates of deposit, money market funds, U.S.

Treasury securities, agency securities, other government securities, corporate debt securities, and commercial paper.

The Company invests excess cash in money market funds, U.S.

Treasury securities, agency securities, other government securities, and corporate debt securities.

The Company considers highly liquid investments as cash equivalents including money market funds and investments with maturities of 90 days or less when purchased.

23 unchanged sentences

Maintenance and repairs are expensed as incurred.

Depreciation is calculated using the straight-line method over the estimated useful lives, which range from five to forty years for buildings and improvements and three to ten years for machinery and equipment.

Depreciation is calculated using the straight-line method over the estimated useful lives, which range from five to forty years for buildings and improvements and five to ten years for machinery and equipment.

Leasehold improvements are depreciated over the lesser of the economic life or the life of the associated lease.

59 unchanged sentences

The Company recognizes compensation expense for all share-based payment awards made to employees and directors including non-qualified employee stock options, share awards and units, employee stock purchase plan, and other special share-based awards based on estimated fair values.

The determination of fair value of restricted and certain performance stock awards and units is based on the value of the Company’s stock on the date of grant with performance awards and units adjusted for the actual outcome of the underlying performance condition.

For more complex performance awards including units with market-based performance conditions the Company employs a Monte Carlo simulation valuation method to calculate the fair value of the awards based on the most likely outcome.

Under the Monte Carlo simulation, a number of variables and assumptions are used including, but not limited to:

the expected stock price volatility over the term of the award, a correlation coefficient, the risk-free rate, and dividend yield.

The fair value of share-based payment awards is amortized over the requisite service period, which is defined as the period during which an employee is required to provide service in exchange for an award.

3 unchanged sentences

Forfeitures are recorded as incurred.

Under the Monte Carlo simulation, a number of variables and assumptions are used including, but not limited to:

the expected stock price volatility over the term of the award, a correlation coefficient, the risk-free rate, and dividend yield.

Research and Development Costs

13 unchanged sentences

Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.

This method also requires the recognition of future tax benefits such as net operating loss carry forwards, to the extent that realization of such benefits is

more likely than not.

This method also requires the recognition of future tax benefits such as net operating loss carry forwards, to the extent that realization of such benefits is more likely than not.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

4 unchanged sentences

Likewise, in the event the Company were to determine that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, an adjustment to the deferred tax assets would increase income in the period such determination was made.

The determination of recording or releasing tax valuation allowances is made, in part, pursuant to an assessment performed by management regarding the likelihood that the Company will generate future taxable income against which benefits of its deferred tax assets may or may not be realized.

The determination of recording or releasing tax valuation allowances is made, in part, pursuant to an assessment performed by management regarding the likelihood that the Company will generate future taxable income in the jurisdiction that generated the deferred tax assets.

This assessment requires management to exercise judgment and make estimates with respect to its ability to generate revenues, gross profits, operating income, and taxable income in future periods.

11 unchanged sentences

The Company accounts for stock repurchases in the consolidated balance sheet by reducing common stock for the par value of the shares, reducing paid-in capital for the amount in excess of par to zero during the period in which the shares are repurchased, and recording the residual amount, if any, to retained earnings.

Recently Issued Accounting Guidance

In December 2019, the Financial Accounting Standards Board (the “FASB”) issued an accounting standards update that simplifies the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation and modified the methodology for calculating income taxes in an interim period.

The guidance also clarifies and simplifies other aspects of the accounting for income taxes.

The guidance was effective for the Company beginning in the first quarter of fiscal 2022.

The new standard did not have a material effect on the Company’s consolidated financial statements.

BUSINESS COMBINATIONS

On July 26, 2021, the Company acquired the Infrastructure and Automotive (“I&A”) business of Silicon Laboratories Inc.

(the “Asset Purchase”).

The Asset Purchase accelerated the Company’s expansion into high-growth segments, including electric and

hybrid vehicles, industrial and motor control, power supply, 5G wireless infrastructure, optical data communication, data center, automotive, smart home, and several other applications.

The Company acquired the business for total cash consideration of $ 2.75 billion.

Net revenue and net income from this acquisition have been included in the Consolidated Statements of Operations from the acquisition date through the end of the fiscal year on October 1, 2021, and the impact of the acquisition to the ongoing operations on the Company’s net revenue and net income was not material.

The Company incurred $ 40.7 million in transaction-related costs during the fiscal year ended October 1, 2021, which were included within the selling, administrative, and general expense.

The allocation of the purchase price to the assets and liabilities recognized in the Company’s acquisition of the I&A business was considered final at the time of filing the 2021 Annual Report on Form 10-K.

The allocation of the purchase price is based on the estimated fair values of the assets acquired and liabilities assumed by major class related to the Asset Purchase and are reflected, as of the acquisition date, in the accompanying financial statements as follows (in millions):

Purchase Price July 26,

Cash consideration $ 2,750.0

Fair value of partially vested equity awards 4.1

Total purchase consideration $ 2,754.1

Inventory, including step up $ 56.3

Property, plant, and equipment 4.4

Other long-term assets 0.7

Intangible assets 1,708.3

Goodwill 986.2

Liabilities assumed ( 1.8 )

Estimated fair value of net assets acquired $ 2,754.1

Goodwill is primarily attributable to the assembled workforce and planned growth in strategic markets.

This goodwill is expected to be deductible for tax purposes.

Intangible Assets July 26,

Developed technology $ 960.1

Backlog 154.6

Customer relationships and tradename 2.5

Total identified finite-lived intangible assets 1,117.2

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

Total identified intangible assets $ 1,708.3

Developed semiconductor technology relates to timing products including clocks and oscillators, power products including isolation and power-over-ethernet devices, and broadcast products including consumer and automotive radio devices.

Developed technology was valued using the multi-period excess earnings method under the income approach.

This method reflects the present value of the projected cash flows that are expected to be generated by the developed technology less charges representing the contribution of other assets to those cash flows.

The weighted-average amortization period of approximately four years was determined based on the technology cycle related to each developed technology, as well as the cash flows over the forecast period.

Customer relationships and backlog represent the fair value of future projected revenue that will be derived from sales of products to existing customers of the I&A business.

Backlog was valued using the multi-period excess earnings method under

the income approach, and customer relationships were valued using the replacement cost method under the cost approach.

The cost approach estimates the amount of money required to replace the investment or asset with another having equivalent utility.

The weighted-average amortization period of the customer relationships was determined based on historical customer acquisition rates under a distributor model and was fully amortized as of October 1, 2021.

The weighted-average amortization period of the backlog of approximately two years was determined based on the expected life of the backlog and the cash flows over the forecast period.

Tradename relates to the “Silicon Laboratories” trade name.

The fair value was determined by applying the relief-from-royalty method under the income approach.

This method is based on the application of a market royalty rate to forecasted revenue under the trade name.

The weighted-average amortization period was determined based on the expected life of the trade name and was fully amortized as of October 1, 2021.

The fair value of IPR&D was determined using the multi-period excess earnings method under the income approach.

This method reflects the present value of the projected net cash flows that are expected to be generated by the IPR&D, less charges representing the contribution of other assets to those cash flows.

The unaudited pro forma financial results for the fiscal years ended October 1, 2021, and October 2, 2020, combine the historical results of Skyworks with the unaudited historical results of the I&A business for the fiscal years ended October 1, 2021, and October 2, 2020, respectively.

The results include the effects of unaudited pro forma adjustments as if the I&A business was acquired at the beginning of the prior fiscal year.

The unaudited pro forma results presented include amortization charges for acquired intangible assets, adjustments for increases in the fair value of acquired inventory, interest expense, other charges, and related tax effects.

The pro forma financial results presented below do not include any anticipated synergies or other expected benefits of the acquisition.

These unaudited results are presented for informational purposes only and are not necessarily indicative of future operations (in millions):

Fiscal Years Ended

(unaudited) October 1,

2021 October 2,

Revenue $ 5,440.0 $ 3,735.4

Net income 1,514.3 637.8

Excise tax on stock repurchases is recorded as part of the cost basis of shares acquired in the consolidated statement of stockholders’ equity.

Government Assistance

The Company receives government assistance for qualifying capital investments, research and development, and other activities as defined by the relevant government entities awarding the incentive.

Incentives provided by government entities are recognized when the Company has reasonable assurance that it will comply with the conditions of the incentive and the incentive will be received.

The Company records capital-related incentives as a reduction to property, plant and equipment and recognizes a reduction to depreciation expense over the useful life of the corresponding asset.

Incentives for specific operating activities are offset against the related expense in the period the expense is incurred.

As of September 29, 2023, the Company has recognized $10.2 million of receivables in other short-term assets with a corresponding reduction to the carrying amounts of the qualifying manufacturing assets, recorded as a reduction to cost of goods sold as the related assets depreciate.

The Company recognized an immaterial benefit in the consolidated statement of operations in fiscal 2023 for grants related to operating activities.

Recently Adopted Accounting Pronouncements and Other Developments

In November 2021, the Financial Accounting Standards Board issued ASU 2021-10 - Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance (“ASU 2021-10”) to increase transparency of government assistance received by most business entities.

The standard requires annual disclosures of the nature of the transactions, including the commitments, contingencies, and the terms and conditions attached to the grant, the form in which the assistance was provided, the accounting policies used to account for the transactions and the effect of the transactions on the entity's financial statements.

The Company adopted ASU 2021-10 in fiscal 2023 and the adoption did not have a significant impact on the consolidated financial statements.

In August 2022, the U.S.

government enacted the CHIPS and Science Act, which provides funding for manufacturing grants and research investments and establishes a 25% investment tax credit for certain investments in U.S.

semiconductor manufacturing that is placed in service after December 31, 2022.

This new law did not have a material impact to the Company in fiscal 2023.

In August 2022, the U.S.

government enacted the Inflation Reduction Act, which imposes a corporate alternative minimum tax (“CAMT”) of 15% on corporations with three-year average annual adjusted financial statement income exceeding $1.0 billion, as well as a 1% excise tax on corporate stock repurchases made after December 31, 2022.

The Company did not incur an excise tax on stock repurchases in fiscal 2023 and is currently evaluating the provisions of CAMT and its potential impact to the Company.

CAMT is effective for the Company in fiscal 2024.

MARKETABLE SECURITIES

2 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

2022 October 1,

2022 September 29,

2023 September 30,

Treasury and government $ 15.1 $ 13.1 $ 4.1 $ 0.5

3 unchanged sentences

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

Neither gross unrealized gains and losses nor realized gains and losses were material as of September 30, 2022, and October 1, 2021, respectively.

Neither gross unrealized gains and losses nor realized gains and losses were material as of September 29, 2023, and September 30, 2022, respectively.

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

2 unchanged sentences

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

As of September 30, 2022 As of October 1, 2021

As of September 29, 2023 As of September 30, 2022

Fair Value Measurements Fair Value Measurements

4 unchanged sentences

Total assets at fair value $ 738.5 $ 718.5 $ 20.0 $ — $ 586.8 $ 569.3 $ 17.5 $ —

(1) 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) Cash equivalents included in Levels 1 and 2 consist of money market funds and corporate bonds and notes, US Treasury and government securities, and agency securities purchased with less than ninety days until maturity.

Assets Measured and Recorded at Fair Value on a Nonrecurring Basis

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.

During fiscal 2022, the Company recorded impairment charges of $ 20.7 million primarily related to the abandonment of two previously capitalized IPR&D projects.

During the fiscal years ended October 1, 2021, and October 2, 2020, the Company recorded impairment charges of $ 7.1 million and $ 11.8 million, respectively.

During fiscal 2023, the Company recorded impairment charges of $ 64.5 million primarily due to reduced overall market demand related to long-term supply capacity deposits of $ 47.5 million recorded within cost of goods sold and a loss on divested assets of $ 12.3 million recorded within restructuring, impairment, and other.

During the fiscal years ended September 30, 2022, and October 1, 2021, the Company recorded impairment charges of $ 20.7 million and $ 7.1 million, respectively.

Fair Value of Debt

1 unchanged sentence

The estimated fair values are based on Level 2 inputs as the fair value is based on quoted prices for the Company’s debt.

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

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

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

September 29,

2022 October 1,

2023 September 30,

Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value

5 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

Raw materials $ 57.2 $ 81.3

1 unchanged sentence

Finished goods 315.7 325.5

Finished goods held on consignment by customers 3.0 2.5

Total inventory $ 1,119.7 $ 1,212.1

2 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

Land and improvements $ 11.8 $ 11.9

7 unchanged sentences

GOODWILL AND INTANGIBLE ASSETS

The Company’s goodwill balance was $ 2,176.7 million as of each of September 30, 2022, and October 1, 2021.

The Company performed an impairment test of its goodwill as of the first day of the fourth fiscal quarter in accordance with its regularly scheduled testing.

The results of this test indicated that the Company’s goodwill was not impaired.

The Company’s goodwill balance was $ 2,176.7 million as of each of September 29, 2023, and September 30, 2022.

The Company performed an impairment test of its goodwill and its indefinite-lived intangible assets as of the first day of the fourth fiscal quarter in accordance with its regularly scheduled testing.

The results of these tests indicated that the Company’s goodwill and indefinite-lived intangible assets were not impaired.

There were no indicators of impairment noted during the fiscal year ended September 29, 2023.

1 unchanged sentence

period (years)

September 30, 2022 October 1, 2021

September 29, 2023 September 30, 2022

Customer relationships and backlog 2.3 $ 154.6 $ ( 154.6 ) $ — $ 154.6 $ ( 122.3 ) $ 32.3

4 unchanged sentences

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

During fiscal 2022, $ 293.5 million of IPR&D assets were transferred to definite-lived intangible assets, and are being amortized over their useful lives of 12 years.

Amortization expense related to definite-lived intangible assets was $ 288.4 million, $ 86.8 million, and $ 46.0 million for the fiscal years ended September 30, 2022, October 1, 2021, and October 2, 2020, respectively.

During fiscal 2023 and fiscal 2022, $ 9.5 million and $ 293.5 million, respectively, of IPR&D assets were transferred to definite-lived intangible assets, and are being amortized over their useful lives of 12 years.

Amortization expense related to definite-lived intangible assets was $ 225.9 million, $ 288.4 million, and $ 86.8 million for the fiscal years ended September 29, 2023, September 30, 2022, and October 1, 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):

4 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

2022 October 1,

5 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

2022 October 1,

Current tax expense (benefit):

Current tax expense:

Federal $ 164.4 $ 88.7 $ 87.5

12 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

2022 October 1,

1 unchanged sentence

Foreign tax rate difference ( 90.7 ) ( 105.3 ) ( 111.7 )

Tax on deemed repatriation — — 0.2

Effect of stock compensation 16.0 ( 13.1 ) ( 6.7 )

5 unchanged sentences

Provision for income taxes $ 96.0 $ 201.4 $ 100.4

The Company operates in foreign jurisdictions with income tax rates lower than the United States tax rate of 21.0 % for the fiscal years ended September 30, 2022, October 1, 2021, and October 2, 2020.

The Company’s federal income tax returns for fiscal 2019 and fiscal 2018 are currently under Internal Revenue Service examination.

The Company operates in foreign jurisdictions with income tax rates lower than the United States tax rate of 21.0 % for the fiscal years ended September 29, 2023, September 30, 2022, and October 1, 2021.

The Company had accrued $ 34.9 million and $ 105.8 million of the deemed repatriation tax in short-term and long-term liabilities within the consolidated balance sheet, respectively, as of September 29, 2023.

The Company had accrued $ 18.6 million and $ 158.4 million of the deemed repatriation tax in short-term and long-term liabilities within the consolidated balance sheet, respectively, as of October 1, 2021.

The remaining repatriation tax is payable over the next four years:

$ 18.6 million in 2023, $ 34.9 million in 2024, $ 46.6 million in 2025, and $ 58.2 million in 2026.

The Company had accrued $ 18.6 million and $ 139.7 million of the deemed repatriation tax in short-term and long-term liabilities within the consolidated balance sheet, respectively, as of September 30, 2022.

The remaining repatriation tax is payable over the next three years:

$ 34.9 million in 2024, $ 47.6 million in 2025, and $ 58.2 million in 2026.

On October 2, 2010, the Company expanded its presence in Asia by launching operations in Singapore.

1 unchanged sentence

The current tax holiday is conditioned upon the Company’s compliance with certain employment and investment thresholds in Singapore.

The impact of the tax holiday decreased Singapore taxes owed by $ 96.6 million, $ 99.5 million, and $ 63.1 million for the fiscal years ended September 30, 2022, October 1, 2021, and October 2, 2020, respectively, which resulted in tax benefits of $ 0.59 , $ 0.60 , and $ 0.37 of diluted earnings per share, respectively.

The impact of the tax holiday decreased Singapore taxes owed by $ 66.0 million, $ 96.6 million, and $ 99.5 million for the fiscal years ended September 29, 2023, September 30, 2022, and October 1, 2021, respectively, which resulted in tax benefits of $ 0.41 , $ 0.59 , and $ 0.60 of diluted earnings per share, respectively.

These tax benefits were partially offset by an increase in tax expense on GILTI.

2 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

Deferred tax assets:

7 unchanged sentences

Operating leases 45.6 56.8

Prepayments — 42.1

Property, plant, and equipment 31.4 35.8

R&D capitalization

Intangible assets 34.0 20.4

Property, plant, and equipment 34.5 31.4

Other, net 13.9 8.7

11 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

Deferred tax assets $ 192.3 $ 52.7

5 unchanged sentences

The United States tax credits relate primarily to California research tax credits that can be carried forward indefinitely, for which the Company has provided a full valuation allowance.

The Company does not anticipate sufficient taxable income or tax liability to utilize these United States and foreign credits.

The Company does not anticipate sufficient taxable income or tax liability to utilize the United States and foreign credits.

If these benefits are recognized in a future period, the valuation allowance on deferred tax assets will be reversed and up to a $ 164.2 million income tax benefit may be recognized.

The Company will need to generate $ 130.6 million of future United States federal taxable income to utilize its United States deferred tax assets, excluding state deferred tax assets with a full valuation allowance, as of September 30, 2022.

The Company will need

to generate $ 656.6 million of future United States federal taxable income to utilize its United States deferred tax assets, net of deferred tax liabilities and excluding state deferred tax assets with a full valuation allowance, as of September 29, 2023.

The Company believes that future reversals of taxable temporary differences, and its forecast of continued earnings in its domestic and foreign jurisdictions, support its decision to not record a valuation allowance on other deferred tax assets.

The Company will continue to assess its valuation allowance in future periods.

The net valuation allowance increased by $ 11.4 million and $ 12.6 million in fiscal 2022 and fiscal 2021, respectively, primarily related to increases for foreign and state net operating loss and tax credit carryovers.

The net valuation allowance increased by $ 2.8 million and $ 11.4 million in fiscal 2023 and fiscal 2022, respectively, primarily related to increases in state tax credit carryovers.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in millions):

Unrecognized tax benefits

Balance at October 1, 2021 $ 55.3

Balance at September 30, 2022 $ 62.5

Increases based on positions related to prior years

Decreases based on positions related to prior years

Increases based on positions related to current year 3.7

Decreases based on settlements with taxing authorities

Balance at September 29, 2023 $ 57.9

2 unchanged sentences

The Company anticipates reversals within the next 12 months related to items such as the lapse of the statute of limitations, audit closures, and other items that occur in the normal course of business.

Due to open examinations, an estimate of anticipated reversals within the next 12 months cannot be made.

Although the Company cannot predict the timing of resolution with taxing authorities, if any, the Company believes it is reasonably possible that its unrecognized tax benefits will be reduced by $ 13.1 million in the next 12 months due to expiration of the applicable statute of limitations.

During fiscal 2023 and fiscal 2022, the Company recognized $ 2.9 million and $ 1.2 million, respectively, of interest or penalties related to unrecognized tax benefits.

During fiscal 2021, the Company recognized an $ 11.6 million benefit for interest or penalties related to unrecognized tax benefits.

Accrued interest and penalties of $ 5.7 million and $ 4.5 million related to uncertain tax positions have been included in long-term tax liabilities within the consolidated balance sheet as of September 30, 2022, and October 1, 2021, respectively.

During fiscal 2021, the Company recognized an $ 11.6 million benefit for interest and penalties related to unrecognized tax benefits.

Accrued interest and penalties of $ 6.2 million and $ 5.7 million related to uncertain tax positions have been included in long-term tax liabilities within the consolidated balance sheet as of September 29, 2023, and September 30, 2022, respectively.

During fiscal 2023, the Company concluded an Internal Revenue Service examination of its federal income tax returns for the fiscal year ended September 28, 2018 (“fiscal 2018”) and the fiscal year ended September 27, 2019 (“fiscal 2019”).

The Company agreed to various adjustments to fiscal 2018 and fiscal 2019 tax returns that resulted in the recognition of net tax expense of $1.6 million during fiscal 2023.

The Company’s major tax jurisdictions as of September 29, 2023, are the United States, California, Canada, Mexico, Japan, and Singapore.

For the United States, the Company has open tax years dating back to fiscal 2020 .

For California, the Company has open tax years dating back to fiscal 2000 due to the carry forward of tax attributes.

For California, the Company has open tax years dating back to fiscal 2004 .

For Canada, the Company has open tax years dating back to fiscal 2016 .

For Mexico, the Company has open tax years back to fiscal 2014 .

For Japan, the Company has open tax years back to fiscal 2016 .

For Mexico, the Company has open tax years dating back to fiscal 2013 .

For Japan, the Company has open tax years dating back to fiscal 2016 .

For Singapore, the Company has open tax years dating back to fiscal 2019 .

13 unchanged sentences

Stock Repurchase and Retirement

On January 26, 2021, the Board of Directors approved a stock repurchase program, pursuant to which the Company is authorized to repurchase up to $ 2.0 billion of its common stock from time to time prior to January 26, 2023, on the open market or in privately negotiated transactions as permitted by securities laws and other legal requirements.

This authorized stock repurchase program replaced in its entirety the stock repurchase program adopted by the Board of Directors on January 30, 2019.

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 fiscal year ended September 30, 2022, the Company paid approximately $ 886.8 million (including commissions) in connection with the repurchase of 6.5 million shares of its common stock (paying an average price of $ 136.32 per share) under the January 26, 2021, stock repurchase program.

On January 31, 2023, the Board of Directors approved a stock repurchase program (“January 31, 2023 stock repurchase program”), pursuant to which the Company is authorized to repurchase up to $ 2.0 billion of its common stock from time to time through February 1, 2025, on the open market or in privately negotiated transactions, in compliance with applicable securities laws and other legal requirements.

The January 31, 2023 stock repurchase program succeeds in its entirety the stock repurchase program approved by the Board of Directors on January 26, 2021 (“January 26, 2021 stock repurchase program”).

The timing and amount of any shares of the Company’s common stock that are repurchased under the January 31, 2023 stock repurchase program will be determined by the Company’s management based on its evaluation of market conditions and other factors.

The January 31, 2023 stock repurchase program may be suspended or discontinued at any time.

The Company currently expects to fund the January 31, 2023 stock repurchase program using the Company’s working capital.

During the fiscal year ended September 29, 2023, the Company paid approximately $ 175.3 million (including commissions) in connection with the repurchase of 1.9 million shares of its common stock (paying an average price of $ 90.60 per share) all of which shares were repurchased pursuant to the January 26, 2021 stock repurchase program.

As of September 29, 2023, $ 2.0 billion remained available under the January 31, 2023 stock repurchase program.

During the fiscal year ended October 1, 2021, the Company paid approximately $ 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) under the January 30, 2019, stock repurchase program.

During the fiscal year ended October 2, 2020, the Company paid approximately $ 647.5 million (including commissions) in connection with the repurchase of 6.3 million shares of its common stock (paying an average price of $ 102.74 per share) under the January 30, 2019, stock repurchase program.

During the fiscal year ended September 30, 2022, the Company paid approximately $ 886.8 million (including commissions) in connection with the repurchase of 6.5 million shares of its common stock (paying an average price of $ 136.32 per share) all of which shares were repurchased pursuant to the January 26, 2021, stock repurchase program.

During the fiscal year ended October 1, 2021, the Company paid approximately $ 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.

During the fiscal years ended September 30, 2022 and October 1, 2021, the Board of Directors approved the retirement of 6.2 million and 68.5 million treasury shares at an aggregate historical cost of $ 893.4 million and $ 4,342.6 million, respectively.

2 unchanged sentences

On November 2, 2023 , the Company announced that the Board of Directors had declared a cash dividend on the Company’s common stock of $ 0.68 per share.

This dividend is payable on December 13, 2022 , to the Company’s stockholders of record as of the close of business on November 22, 2022 .

This dividend is payable on December 12, 2023 , to the Company’s stockholders of record as

of the close of business on November 21, 2023 .

Future dividends are subject to declaration by the Board of Directors.

2 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

Per Share Total Per Share Total

8 unchanged sentences

◦ the Non-Qualified Employee Stock Purchase Plan

◦ the 2005 Long-Term Incentive Plan

◦ the 2008 Director Long-Term Incentive Plan

1 unchanged sentence

Except for the Non-Qualified Employee Stock Purchase Plan, each of the foregoing equity compensation plans was approved by the Company’s stockholders.

As of September 30, 2022, a total of 81.8 million shares are authorized for grant under the Company’s share-based compensation plans, with 0.1 million options outstanding.

As of September 29, 2023, a total of 37.5 million shares are authorized for grant under the Company’s share-based compensation plans.

The number of common shares reserved for future awards to employees and directors under these plans was 10.5 million at September 29, 2023.

16 unchanged sentences

The maximum contractual term of options granted under the plan is ten years from the date of grant.

Options granted under the plan are generally exercisable over four years.

Options granted under the plan generally vest ratably over four years.

Restricted stock units granted under the plan generally vest over one or more years.

4 unchanged sentences

The plans provide for purchases by employees of up to an aggregate of 11.6 million shares.

Shares of common stock purchased under these plans in the fiscal years ended September 30, 2022, October 1, 2021, and October 2, 2020, were 0.3 million, 0.2 million, and 0.3 million, respectively.

Shares of common stock purchased under these plans in the fiscal years ended September 29, 2023, September 30, 2022, and October 1, 2021, were 0.3 million, 0.3 million, and 0.2 million, respectively.

At September 29, 2023, there were 1.0 million shares available for purchase.

The Company recognized compensation expense of $ 9.2 million, $ 8.7 million, and $ 6.6 million for the fiscal years ended September 30, 2022, October 1, 2021, and October 2, 2020, respectively, related to the employee stock purchase plan.

The Company recognized compensation expense of $ 10.9 million, $ 9.2 million, and $ 8.7 million for the fiscal years ended September 29, 2023, September 30, 2022, and October 1, 2021, respectively, related to the employee stock

purchase plan.

The unrecognized compensation expense on the employee stock purchase plan at September 29, 2023, was $ 3.5 million.

5 unchanged sentences

grant date fair value

Non-vested awards outstanding at October 1, 2021 2.7 $ 118.87

Non-vested awards outstanding at September 30, 2022 2.4 $ 139.63

Granted (1) 2.6 $ 92.86

3 unchanged sentences

(1) includes performance stock awards granted and earned assuming target performance under the underlying performance metrics

The weighted-average grant date fair value per share for awards granted during the fiscal years ended September 30, 2022, October 1, 2021, and October 2, 2020, was $ 151.20 , $ 148.96 , and $ 99.68 , respectively.

The weighted-average grant date fair value per share for awards granted during the fiscal years ended September 29, 2023, September 30, 2022, and October 1, 2021, was $ 92.86 , $ 151.20 , and $ 148.96 , respectively.

The following table summarizes the total intrinsic value for awards vested (in millions):

1 unchanged sentence

September 29,

2022 October 1,

2023 September 30,

2022 October 1,

4 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

2022 October 1,

3 unchanged sentences

Total share-based compensation expense $ 185.1 $ 195.2 $ 191.9

Share-based compensation tax benefit $ 20.1 $ 13.5 $ 10.3

Share-based compensation tax expense (benefit)

$ 9.1 $ ( 20.1 ) $ ( 13.5 )

Capitalized share-based compensation expense at period end $ 14.5 $ 6.8 $ 9.8

5 unchanged sentences

The Company issued performance stock unit awards during fiscal 2023, fiscal 2022, and fiscal 2021 that contained market-based conditions.

T he fair value of these performance stock unit awards was estimated on the date of the grant using a Monte Carlo simulation with the following weighted average assumptions:

The fair value of these performance stock unit awards was estimated on the date of the grant using a Monte Carlo simulation with the following weighted average assumptions:

Fiscal Year Ended

September 29,

2022 October 1,

2023 September 30,

2022 October 1,

7 unchanged sentences

The longest potential total lease term consists of a 40 -year land lease in Osaka, Japan.

During the fiscal years ended September 30, 2022, October 1, 2021, and October 2, 2020, the Company recorded $ 43.6 million, $ 33.9 million, and $ 28.1 million of operating lease expense, and $ 12.3 million, $ 3.2 million, and $ 7.6 million of variable lease expense, respectively.

During the fiscal years ended September 29, 2023, September 30, 2022, and October 1, 2021, the Company recorded $ 39.8 million, $ 43.6 million, and $ 33.9 million of operating lease expense, and $ 19.2 million, $ 12.3 million, and $ 3.2 million of variable lease expense, respectively.

Supplemental cash information and non-cash activities related to operating leases are as follows (in millions):

1 unchanged sentence

September 29,

2023 September 30,

2022 October 1,

2 unchanged sentences

Operating leases are classified as follows (in millions):

Fiscal Year Ended

September 29,

2022 October 1,

2023 September 30,

Other current liabilities $ 28.3 $ 18.5

11 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

Weighted-average remaining lease term (years) 12.3 12.1

11 unchanged sentences

The Company is engaged in various legal actions in the normal course of business and, while there can be no assurances, the Company believes the outcome of all pending litigation involving the Company will not have, individually or in the aggregate, a material adverse effect on its business or financial statements.

Purchase Commitments

The Company purchases materials primarily pursuant to individual purchase orders, some of which have underlying master purchase agreements.

Some of these purchase commitments are cancellable, and some are non-cancelable, depending on the terms with each individual supplier.

In the event of cancellation, the Company may be required to pay costs incurred through the date of cancellation or other fees.

When cancellation would result in incurring costs or other fees, the Company has historically sought to negotiate amended terms to the original agreements and orders to limit its exposure and, as such, the Company believes that purchase commitments as of any particular date may not be a reliable indicator of future commitments.

The Company maintains certain minimum purchase commitments under long-term capacity reservation agreements primarily with foundries for the purchase of wafers.

Under these agreements, the Company agreed to pay refundable deposits to the suppliers in exchange for reserved manufacturing production capacity over the term of the agreements.

During fiscal 2023, the Company recorded impairment charges of $ 47.5 million within cost of goods sold due to reduced overall market demand related to long-term supply capacity deposits.

As of September 29, 2023, the remaining deposits under the long-term capacity reservation agreements were $43.0 million and $16.0 million recorded within other current assets and other long-term assets, respectively.

GUARANTEES AND INDEMNITIES

5 unchanged sentences

The indemnities to customers in connection with product sales generally are subject to limits based upon the amount of the related product sales and in many cases are subject to geographic and other restrictions.

In certain instances, the Company’s indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make.

In certain instances, the Company’s indemnities do not provide for any limitation of the

maximum potential future payments the Company could be obligated to make.

The Company has not recorded any liability for these indemnities in the accompanying consolidated balance sheets and does not expect that such obligations will have a material adverse impact on its financial statements.

3 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

2022 October 1,

7 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 fiscal years ended September 30, 2022, October 1, 2021, and October 2, 2020, 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 fiscal years ended September 29, 2023, September 30, 2022, and October 1, 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.

13 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

2022 October 1,

2 unchanged sentences

Taiwan 344.4 430.4 404.2

South Korea 458.2 264.5 254.6

Europe, Middle East, and Africa 204.2 235.8 180.1

South Korea 198.3 458.2 264.5

Other Asia-Pacific 63.3 75.8 38.0

3 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

2022 October 1,

6 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

Japan $ 606.4 $ 679.7

10 unchanged sentences

At September 29, 2023, the Company’s three largest accounts receivable balances comprised 83 % of aggregate gross accounts receivable.

This concentration was 70 % at October 1, 2021, and 70 % at October 2, 2020.

This concentration was 79 % at September 30, 2022, and 70 % at October 1, 2021.

SUPPLEMENTAL FINANCIAL INFORMATION

7 unchanged sentences

September 29,

2022 October 1,

2023 September 30,

Accrued customer liabilities $ 270.9 $ 226.9

5 unchanged sentences

Effective Interest Rate September 29,

2022 October 1,

2023 September 30,

0.90% Senior Notes due 2023 — % $ — $ 500.0

5 unchanged sentences

current portion of long-term debt 299.4 499.2

Total $ 1,689.9 $ 2,235.6

On May 26, 2021, the Company issued $ 500.0 million of its 0.90 % Senior Notes due 2023 (the “2023 Notes”), $ 500.0 million of its 1.80 % Senior Notes due 2026 (the “2026 Notes”), and $ 500.0 million of its 3.00 % Senior Notes due 2031 (the “2031 Notes” and, together with the 2023 Notes and the 2026 Notes, the “Notes”).

Total long-term debt

$ 992.9 $ 1,689.9

During fiscal 2023, the Company repaid $ 500.0 million of the 2023 Notes at maturity.

The Notes are senior unsecured obligations of the Company and rank equally in right of payment with all of its existing and future senior unsecured debt but effectively junior to any of the Company’s senior secured debt to the extent of the value of collateral securing such debt, and are structurally subordinated to all existing and future obligations of the Company’s subsidiaries.

1 unchanged sentence

Interest on the Notes is payable on June 1 and December 1 of each year.

The Company may redeem all or a portion of the 2023 Notes at any time after June 1, 2022, and all or a portion of the 2026 Notes and the 2031 Notes at any time and from time to time prior to maturity, in whole or in part, for cash at the applicable redemption prices set forth in the respective supplemental indenture.

The Company may redeem all or a portion of the 2026 Notes and the 2031 Notes at any time and from time to time prior to maturity, in whole or in part, for cash at the applicable redemption prices set forth in the respective supplemental indenture.

If the Company undergoes a change of control repurchase event, as defined in the indenture governing the Notes (as supplemented, the “Indenture”), holders may require the Company to repurchase the Notes in whole or in part for cash at a price equal to 101 % of the principal amount of the Notes to be purchased, plus any accrued and unpaid interest.

As of September 29, 2023, the Company considered the likelihood of acceleration related to the 2026 and 2031 Notes and recorded the Notes as long-term debt.

The 2023 Note has been recorded as short-term debt.

Notes are recorded net of discount and issuance costs, which are amortized to interest expense over the respective terms of these borrowings.

The Notes are recorded net of discount and issuance costs, which are amortized to interest expense over the respective terms of these borrowings.

The Indenture contains customary events of default, including failure to make required payments of principal and interest, certain events of bankruptcy and insolvency, and default in the performance or breach of any covenant or warranty contained in the Indenture or the Notes.

As of September 29, 2023, the Company was in material compliance with all debt covenants under the Senior Notes.

Term Credit Agreement

On May 21, 2021, the Company entered into a term credit agreement (the “Term Credit Agreement”) providing for a $ 1.0 billion term loan facility (the “Term Loan Facility”).

On July 26, 2021, the Company borrowed $ 1.0 billion in aggregate principal amount of term loans (the “Term Loans”) under the Term Loan Facility to finance a portion of the purchase price for the Asset Purchase and to pay fees and expenses incurred in connection therewith.

During fiscal 2022 and 2021, the Company repaid $ 50.0 million and $ 250.0 million, respectively, of outstanding borrowings under the Term Loans.

As of September 30, 2022, there were $ 700.0 million of borrowings outstanding under the Term Loan Facility.

On May 21, 2021, the Company entered into a term credit agreement (as amended, the “Term Credit Agreement”) providing for a $ 1.0 billion term loan facility (the “Term Loan Facility”).

On July 26, 2021, the Company borrowed $ 1.0 billion in aggregate principal amount of term loans (the “Term Loans”) under the Term Loan Facility to finance a portion of the purchase price for the acquisition of the Infrastructure and Automotive business of Silicon Laboratories Inc.

and to pay fees and expenses incurred in connection therewith.

During fiscal 2023, 2022, and 2021 the Company repaid $ 400.0 million, $ 50.0 million, and $ 250.0 million, respectively, of outstanding borrowings under the Term Loans.

As of September 29, 2023, there were $ 300.0 million of borrowings outstanding under the Term Credit Agreement.

Borrowings under the Term Loan Facility are not currently guaranteed by any of the Company’s subsidiaries.

4 unchanged sentences

The Term Credit Agreement also contains customary events of default, which include failure to make required payments of principal and interest, breaches of representations and warranties, changes of control or failures to pay money judgments, and certain defaults in respect of specified material indebtedness, upon the occurrence of which, among other remedies, the lenders may accelerate the maturity of the indebtedness and other obligations under the Term Credit Agreement.

As of September 29, 2023, the Company was in material compliance with all debt covenants under the Term Credit Agreement.

Revolving Credit Agreement

On May 21, 2021, the Company entered into a revolving credit agreement (the “Revolving Credit Agreement”) providing for a $ 750.0 million revolving credit facility (the “Revolver”).

On May 21, 2021, the Company entered into a revolving credit agreement (as amended, the “Revolving Credit Agreement”) providing for a $ 750.0 million revolving credit facility (the “Revolver”).

The proceeds of the Revolver will be used for general corporate purposes and working capital needs of the Company and its subsidiaries.

3 unchanged sentences

The Revolving Credit Agreement contains customary representations and warranties and covenants, including restrictions on the incurrence of indebtedness by non-guarantor subsidiaries and the creation of liens, and a financial covenant consisting of a limitation on leverage, defined as consolidated total indebtedness divided by consolidated earnings before interest, taxes, depreciation, and amortization for the period of four consecutive quarters not to exceed a ratio of 3.0 to 1.0.

As of September 30, 2022, there were no borrowings outstanding under the Revolver.

As of September 29, 2023, there were no borrowings outstanding and the Company was in material compliance with all debt covenants under the Revolver.

SUBSEQUENT EVENT

On October 4, 2023, the Company repaid $ 150.0 million of outstanding borrowings under the Term Loans.

As of October 4, 2023, there were $ 150.0 million of borrowings outstanding under the Term Credit Agreement.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

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-K

Item 8. Financial Statements and Supplementary Data