What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-11-15 compared with 2023-11-17 · 175 added, 227 removed, 679 unchanged (37% of the section changed)

60 unchanged sentences

Fiscal Years Ended

September 29,

2023 September 30,

2022 October 1,

September 27, 2024 September 29, 2023 September 30, 2022

Net revenue $ 4,178.0 $ 4,772.4 $ 5,485.5

5 unchanged sentences

Amortization of intangibles 0.9 33.2 98.9

Restructuring, impairment, and other charges 28.3 30.7 8.9

Impairment, restructuring, and other charges

150.0 28.3 30.7

Total operating expenses 1,083.4 982.3 1,077.3

17 unchanged sentences

Fiscal Years Ended

September 29,

2023 September 30,

2022 October 1,

September 27, 2024 September 29, 2023 September 30, 2022

Net income $ 596.0 $ 982.8 $ 1,275.2

7 unchanged sentences

(In millions, except per share amounts)

September 29,

2023 September 30,

September 27, 2024 September 29, 2023

Current assets:

2 unchanged sentences

Receivables, net of allowances of $ 0.9 and $ 0.8 , respectively

864.3 1,094.0

Inventory 784.8 1,119.7

38 unchanged sentences

Fiscal Years Ended

September 29,

2023 September 30,

2022 October 1,

September 27, 2024 September 29, 2023 September 30, 2022

Cash flows from operating activities:

19 unchanged sentences

Sales and maturities of marketable securities 86.5 294.0 220.3

Payments for acquisitions — — ( 2,751.0 )

Other 11.6 6.5 7.7

6 unchanged sentences

Proceeds from employee stock purchase plan 32.6 32.1 29.4

Proceeds from issuance of long-term debt, net — — 2,488.2

Debt financing costs — — ( 5.8 )

Payments of debt ( 300.0 ) ( 900.0 ) ( 50.0 )

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

Net cash used in financing activities ( 819.0 ) ( 1,479.2 ) ( 1,362.6 )

Net increase (decrease) in cash and cash equivalents 649.8 152.8 ( 316.9 )

10 unchanged sentences

(In millions)

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

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

Balance at October 1, 2021

165.3 $ 41.3 $ 77.9 $ 5,185.8 $ ( 7.9 ) $ 5,297.1

Net income — — — 1,275.2 — 1,275.2

1 unchanged sentence

Share-based compensation expense — — 173.9 — — 173.9

Stock repurchase program ( 1.4 ) ( 0.4 ) ( 67.1 ) 4,147.0 ( 3,549.9 ) ( 792.3 ) — ( 195.6 )

Repurchase of common stock ( 6.5 ) ( 1.6 ) ( 219.2 ) ( 666.0 ) — ( 886.8 )

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

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

Other comprehensive income — — — — 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

1 unchanged sentence

Share-based compensation expense — — 191.5 — — 191.5

Repurchase and retirement of common stock ( 6.5 ) ( 1.6 ) ( 0.6 ) 90.2 ( 309.4 ) ( 666.0 ) — ( 886.8 )

Repurchase of common stock ( 1.9 ) ( 0.4 ) ( 51.4 ) ( 123.5 ) — ( 175.3 )

Dividends declared — — — ( 405.2 ) — ( 405.2 )

1 unchanged sentence

Balance at September 29, 2023

159.5 $ 39.9 $ 172.4 $ 5,876.0 $ ( 5.6 ) $ 6,082.7

Net income — $ — $ — $ 596.0 $ — $ 596.0

1 unchanged sentence

Share-based compensation expense — — 175.8 — — 175.8

Repurchase and retirement of common stock ( 1.9 ) ( 0.4 ) ( 0.4 ) 35.9 ( 87.3 ) ( 123.5 ) — ( 175.3 )

Repurchase of common stock ( 0.8 ) ( 0.2 ) ( 77.2 ) — — ( 77.4 )

Dividends declared — — — ( 439.1 ) — ( 439.1 )

Other comprehensive income — — — — — — ( 0.8 ) ( 0.8 )

Balance at September 27, 2024

159.9 $ 40.0 $ 269.4 $ 6,032.9 $ ( 5.6 ) $ 6,336.7

See accompanying Notes to Consolidated Financial Statements.

1 unchanged sentence

DESCRIPTION OF BUSINESS

Skyworks Solutions, Inc., together with its consolidated subsidiaries (“Skyworks” or the “Company”), is empowering the wireless networking revolution.

The Company’s analog and mixed-signal semiconductors are connecting people, places, and things, spanning a number of new applications within the aerospace, automotive, broadband, cellular infrastructure, connected home, defense, entertainment and gaming, industrial, medical, smartphone, tablet, and wearable markets.

Skyworks Solutions, Inc., together with its consolidated subsidiaries (“Skyworks” or the “Company”), is a leading developer, manufacturer and provider of analog and mixed-signal semiconductor products and solutions for numerous applications, including aerospace, automotive, broadband, cellular infrastructure, connected home, defense, entertainment and gaming, industrial, medical, smartphone, tablet, and wearables.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1 unchanged sentence

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

Certain items in the fiscal years 2023 and 2022 financial statements, including certain account groupings in the tax reconciliation disclosure, deferred tax disclosure, and the Consolidated Statements of Stockholders’ Equity, have been reclassified to conform to the fiscal 2024 presentation.

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

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.

The fiscal year ended on September 27, 2024 (“fiscal 2024”), the fiscal year ended on September 29, 2023 (“fiscal 2023”), and the fiscal year ended on September 30, 2022 (“fiscal 2022”), each consisted of 52 weeks.

Use of Estimates

6 unchanged sentences

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

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

Treasury and government securities, and corporate bonds and notes.

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

6 unchanged sentences

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principle or most advantageous market in an orderly transaction between market participants at the measurement date.

Applicable accounting guidance provides a hierarchy for inputs used in measuring fair value that prioritize the use of observable inputs over the use of unobservable inputs, when such observable inputs are available.

Applicable accounting guidance provides a hierarchy for inputs used in measuring fair value that prioritize the use of

observable inputs over the use of unobservable inputs, when such observable inputs are available.

The three levels of inputs that may be used to measure fair value are as follows:

14 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 five 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 from seven 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.

During fiscal 2024, the Company changed its accounting estimate for the expected useful lives of certain machinery and equipment.

The Company evaluated its current asset base and reassessed the estimated useful lives of certain machinery and equipment in connection with its recent usage of older equipment, including considering the technological and physical obsolescence of such machinery and equipment.

Based on its ability to re-use equipment across generations of process technologies and historical usage trends, the Company determined that the expected useful lives for certain machinery and equipment should be increased by up to two years to reflect more closely the estimated economic lives of those assets.

This change in estimate was applied prospectively effective during the first quarter of fiscal 2024 and resulted in a decrease in depreciation expense of $ 75.4 million during fiscal 2024.

This benefit decreased cost of goods sold by $ 25.8 million and decreased research and development expenses by $ 9.8 million during fiscal 2024, and decreased ending inventory by $ 39.8 million as of September 27, 2024.

As a result of this change in accounting estimate, net income increased by $ 35.6 million and diluted earnings per share increased by $ 0.22 during fiscal 2024.

The Company determines if an arrangement is a lease at its inception.

2 unchanged sentences

The lease term includes renewal options when it is reasonably certain that the option will be exercised and excludes termination options.

To the extent that the Company’s agreements have variable lease payments, the Company includes variable lease payments that depend on an index or a rate and excludes those that depend on facts or circumstances occurring after the commencement date, other than the passage of time.

To the extent that the Company’s agreements have variable lease payments, the Company includes variable lease payments that depend on an index

or a rate and excludes those that depend on facts or circumstances occurring after the commencement date, other than the passage of time.

Lease expense for these leases is recognized on a straight-line basis over the lease term.

The Company has elected not to recognize ROU assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset.

Operating leases are included in operating lease ROU assets, other current liabilities, and long-term operating lease liabilities in the Company’s condensed consolidated balance sheet.

Operating leases are included in operating lease ROU assets, other current liabilities, and long-term operating lease liabilities in the Company’s Consolidated Balance Sheets.

Valuation of Long-Lived Assets

3 unchanged sentences

Factors considered important that could result in an impairment review include significant underperformance relative to expected, historical or projected future operating results, significant changes in the manner of use of assets or the Company’s business strategy, or significant negative industry or economic trends.

In addition, impairment reviews are conducted at the judgment of

management whenever asset values are deemed to be unrecoverable relative to future undiscounted cash flows expected to be generated by that particular asset group.

In addition, impairment reviews are conducted at the judgment of management whenever asset values are deemed to be unrecoverable relative to future undiscounted cash flows expected to be generated by that particular asset group.

The determination of recoverability is based on an estimate of undiscounted cash flows expected to result from the use of an asset group and its eventual disposition.

33 unchanged sentences

Variable consideration is estimated using the expected value method considering all reasonably available information, including the Company’s historical experience and its current expectations, and is reflected in the transaction price when sales are recorded.

The Company records

net revenue excluding taxes on its sales to trade customers.

The Company records net revenue excluding taxes on its sales to trade customers.

The Company recognizes shipping fees, if any, received from customers in revenue and includes the related shipping and handling costs in cost of revenue.

34 unchanged sentences

The carrying value of the Company’s net deferred tax assets assumes the Company will be able to generate sufficient future taxable income in certain tax jurisdictions, based on estimates and assumptions.

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.

Amongst other factors, management must make assumptions regarding overall business and semiconductor industry conditions, operating efficiencies, the Company’s ability to develop products to its customers’ specifications, technological change, the competitive environment, and changes in regulatory requirements which may impact its ability to generate taxable income and, in turn, realize the value of its deferred tax assets.

If these estimates and related assumptions change in the future, the Company may be required to record additional valuation allowances against its deferred tax assets resulting in additional income tax expense in its Consolidated Statement of Operations.

1 unchanged sentence

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 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.

The calculation of the Company’s tax liabilities includes addressing uncertainties in the application of complex tax regulations and is based on the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

The Company recognizes liabilities for anticipated tax audit issues in the United States and other tax jurisdictions based on its recognition threshold and measurement attribute of whether it is more likely than not that the positions the Company has taken in tax filings will be sustained upon tax audit, and the extent to which, additional taxes would be due.

If payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period in which it is determined the liabilities are no longer necessary.

3 unchanged sentences

Basic earnings per share are computed using the weighted average number of common shares outstanding during the period.

Diluted earnings per share incorporate the potentially dilutive incremental shares issuable upon the assumed exercise of stock options, the assumed vesting of outstanding restricted stock units, and the assumed issuance of common stock under the stock purchase plan using the treasury share 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.

Diluted earnings per share incorporates the potentially dilutive incremental shares issuable upon the assumed exercise of stock options, the assumed vesting of outstanding restricted stock units, and the assumed issuance of common stock under the stock purchase plan using the treasury share 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 conditions have been satisfied, assuming the end of the reporting period was the end of the contingency period.

Stock Repurchase

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.

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

The Company accounts for stock repurchases in the Consolidated Balance Sheets 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.

Excise tax on stock repurchases is recorded as part of the cost basis of shares acquired in the Consolidated Statements 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.

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.

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

As of September 27, 2024 and September 29, 2023, there were $ 6.2 million and $ 10.2 million , respectively, of receivables in other short-term assets with a corresponding reduction to the carrying amounts of the qualifying manufacturing assets.

During fiscal 2024 and fiscal 2023, cost of goods sold benefited by $ 1.2 million and $ 0.2 million, respectively, from the investment tax credit, recognized as a reduction of depreciation expense.

The Company recognized an immaterial benefit in the Consolidated Statements of Operations in fiscal 2024, fiscal 2023, and fiscal 2022 for grants related to operating activities.

Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosure” (“ASU 2023-07”).

ASU 2023-07 requires disclosure of incremental segment information on an annual and interim basis.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, on a retrospective basis.

Early adoption is permitted.

The Company is currently evaluating the impact of ASU 2023-07 on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (“ASU 2023-09”).

ASU 2023-09 includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024, on either a prospective or retrospective basis, with early adoption permitted.

The Company is currently evaluating the impact of ASU 2023-09 on its consolidated financial statements and related disclosures.

MARKETABLE SECURITIES

1 unchanged sentence

Current Noncurrent

September 29,

2023 September 30,

2022 September 29,

2023 September 30,

Treasury and government $ 15.1 $ 13.1 $ 4.1 $ 0.5

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Treasury and government securities $ 39.0 $ 15.1 $ 11.1 $ 4.1

Corporate bonds and notes 155.0 — 0.3 —

2 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 29, 2023, and September 30, 2022, respectively.

Neither gross unrealized gains and losses nor realized gains and losses were material as of September 27, 2024, or September 29, 2023.

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 29, 2023 As of September 30, 2022

September 27, 2024 September 29, 2023

Fair Value Measurements Fair Value Measurements

4 unchanged sentences

Total assets at fair value $ 1,574.1 $ 1,235.6 $ 338.5 $ — $ 738.5 $ 718.5 $ 20.0 $ —

(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.

(1) Cash equivalents included in Levels 1 and 2 consist of money market funds, corporate bonds and notes, and U.S.

Treasury and government 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 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.

During fiscal 2024, the Company recorded impairment charges of $ 147.9 million primarily related to the abandonment or delay of previously capitalized in-process research and development (“IPR&D”) projects recorded within impairment, restructuring, and other charges.

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

Fair Value of Debt

The Company’s debt is carried at amortized cost and is measured at fair value quarterly for disclosure purposes.

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 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,

2023 September 30,

The estimated fair values are based on Level 2 inputs as the fair value is based on quoted prices for the Company’s debt and comparable instruments in inactive markets.

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

September 27, 2024 September 29, 2023

Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value

1 unchanged sentence

3.00% Senior Notes due 2031 495.8 441.2 495.2 390.4

3.00% Senior Notes due 2031 495.2 390.4 494.5 377.6

Total debt under Senior Notes $ 994.3 $ 919.6 $ 992.9 $ 834.9

Inventory consists of the following (in millions):

September 29,

2023 September 30,

September 27, 2024 September 29, 2023

Raw materials $ 30.3 $ 57.2

4 unchanged sentences

Property, plant, and equipment, net consists of the following (in millions):

September 29,

2023 September 30,

September 27, 2024 September 29, 2023

Land and improvements $ 11.9 $ 11.8

8 unchanged sentences

The Company’s goodwill balance was $ 2,176.7 million as of each of September 27, 2024, and September 29, 2023.

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.

In fiscal 2024, 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 was not impaired.

Refer to Note 4 for a discussion of IPR&D impairments of $ 146.7 million and $ 20.7 million in fiscal 2024 and fiscal 2022, respectively.

There was no IPR&D impairment in fiscal 2023.

Intangible assets consist of the following (in millions):

period (years)

September 29, 2023 September 30, 2022

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

Period (Years) September 27, 2024 September 29, 2023

Developed technology and other 6.3 $ 1,379.6 $ ( 540.7 ) $ 838.9 $ 1,290.4 $ ( 379.4 ) $ 911.0

3 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 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.

During fiscal 2024, $ 89.1 million of IPR&D assets were transferred to definite-lived intangible assets, of which $ 33.4 million is being amortized over their useful lives of 12 years and $ 55.7 million is being amortized over their useful lives of 8 years.

Amortization expense related to definite-lived intangible assets was $ 186.5 million, $ 225.9 million, and $ 288.4 million during fiscal 2024, fiscal 2023, and fiscal 2022, respectively, primarily recorded within cost of goods sold.

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):

3 unchanged sentences

Fiscal Years Ended

September 29,

2023 September 30,

2022 October 1,

September 27, 2024 September 29, 2023 September 30, 2022

United States $ 1.9 $ 484.9 $ 663.0

3 unchanged sentences

Fiscal Years Ended

September 29,

2023 September 30,

2022 October 1,

September 27, 2024 September 29, 2023 September 30, 2022

Current tax expense:

12 unchanged sentences

Fiscal Years Ended

September 29,

2023 September 30,

2022 October 1,

September 27, 2024 September 29, 2023 September 30, 2022

Tax expense at United States statutory rate $ 133.6 $ 226.5 $ 310.1

5 unchanged sentences

Foreign Derived Intangible Income ( 49.3 ) ( 65.9 ) ( 39.9 )

Section 162(m) limitation

10.6 10.9 21.0

Other, net 18.4 4.5 11.2

Provision for income taxes $ 40.4 $ 96.0 $ 201.4

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 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 $ 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.

The Company operates under a tax holiday in Singapore, which is effective through September 30, 2030 .

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 $ 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.

The Company operated in foreign jurisdictions with income tax rates lower than the United States tax rate of 21.0 % for fiscal 2024, fiscal 2023, and fiscal 2022.

The Company had accrued $ 46.1 million and $ 57.0 million of the deemed repatriation tax in short-term and long-term liabilities within the Consolidated Balance Sheets, respectively, as of September 27, 2024.

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 Sheets, respectively, as of September 29, 2023.

The remaining repatriation tax is payable over the next two years.

The Company operates under a tax holiday in Singapore, which is effective through September 30, 2025, with the ability to extend through September 30, 2030 .

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

The impact of the tax holiday decreased Singapore taxes owed by $ 67.7 million, $ 66.0 million, and $ 96.6 million during fiscal 2024, fiscal 2023, and fiscal 2022, respectively, which resulted in tax benefits of $ 0.42 , $ 0.41 , and $ 0.59 of diluted earnings per share, respectively.

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

Deferred income tax assets and liabilities consist of the tax effects of temporary differences related to the following (in millions):

Fiscal Years Ended

September 29,

2023 September 30,

September 27, 2024 September 29, 2023

Deferred tax assets:

4 unchanged sentences

Net operating loss carry forwards 6.4 12.2

Non-United States tax credits 15.7 17.0

State tax credits 140.0 138.0

Operating leases 46.1 45.6

1 unchanged sentence

Intangible assets 50.0 24.4

Property, plant, and equipment 34.5 31.4

Other, net 4.8 6.8

4 unchanged sentences

Property, plant, and equipment ( 22.5 ) ( 18.3 )

Intangible assets ( 9.6 ) ( 4.7 )

Operating leases ( 47.0 ) ( 44.3 )

Other, net ( 7.1 ) ( 39.7 )

Net deferred tax liabilities ( 69.5 ) ( 62.6 )

Total net deferred tax assets $ 291.6 $ 183.2

The deferred tax assets and liabilities based on tax jurisdictions are presented on our Consolidated Balance Sheets as follows:

September 29,

2023 September 30,

The deferred tax assets and liabilities based on tax jurisdictions are presented on our Consolidated Balance Sheets as follows (in millions):

September 27, 2024 September 29, 2023

Deferred tax assets $ 303.5 $ 192.3

Deferred tax liabilities ( 11.9 ) ( 9.1 )

Net deferred tax asset $ 183.2 $ 32.1

Net deferred tax assets $ 291.6 $ 183.2

In accordance with GAAP, management has determined that it is more likely than not that a portion of the Company’s historic and current year income tax benefits will not be realized.

As of September 27, 2024, the Company has a valuation allowance of $ 174.1 million.

This valuation allowance is comprised of $ 140.0 million related to United States tax credits, $ 4.0 million related to United States state net operating loss carry forwards, and $ 20.2 million related to foreign deferred tax assets.

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.

This valuation allowance is comprised of $ 155.4 million related to United States federal and state tax attributes and $ 18.7 million related to foreign deferred tax assets.

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 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 $ 174.1 million income tax benefit may be recognized.

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 will need to generate $ 1.2 billion 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 27, 2024.

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 $ 2.8 million and $ 11.4 million in fiscal 2023 and fiscal 2022, respectively, primarily related to increases in state tax credit carryovers.

The net valuation allowance increased by $ 9.9 million in fiscal 2024 primarily related to increases in state tax credit carryforwards.

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

4 unchanged sentences

Increases based on positions related to current year 7.9

Decreases based on expirations of statute of limitations ( 8.1 )

Decreases based on settlements with taxing authorities ( 6.1 )

1 unchanged sentence

Of the total unrecognized tax benefits at September 27, 2024, $ 47.3 million would impact the effective tax rate, if recognized.

The remaining unrecognized tax benefits would not impact the effective tax rate, if recognized, due to the Company’s valuation allowance and certain positions that were required to be capitalized.

The remaining unrecognized tax benefits would not impact the effective tax rate, if recognized, due to the Company’s valuation allowance on certain tax attributes.

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.

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 $ 5.7 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 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 2024, fiscal 2023, and fiscal 2022, the Company recognized $ 5.5 million, $ 2.9 million, and $ 1.2 million, respectively, of interest or penalties related to unrecognized tax benefits.

Accrued interest and penalties of $ 11.7 million and $ 6.2 million related to uncertain tax positions have been included in long-term tax liabilities within the Consolidated Balance Sheets as of September 27, 2024, and September 29, 2023, 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”).

8 unchanged sentences

The Company is subject to audit examinations by the respective taxing authorities on a periodic basis, of which the results could impact its financial position, results of operations, or cash flows.

In August 2022, the U.S.

The Company is subject to the provisions of CAMT in fiscal 2024.

CAMT had no impact to the Company’s consolidated financial statements for fiscal 2024.

STOCKHOLDERS’ EQUITY

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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.

During fiscal 2024, the Company paid $ 77.4 million (including commissions and excise tax, as applicable) in connection with the repurchase of 0.8 million shares of its common stock (paying an average price of $ 101.33 per share), all of which shares were repurchased pursuant to the January 31, 2023 stock repurchase program.

As of September 27, 2024, $ 1.9 billion remained available under the January 31, 2023 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.

Upon retirement, the shares assumed the status of authorized and unissued.

All future repurchases of shares will assume the status of authorized and unissued.

During fiscal 2023, the Company paid $ 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.

During fiscal 2022, the Company paid $ 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.

On November 12, 2024 , the Company announced that the Board of Directors had declared a cash dividend on the Company’s common stock of $ 0.70 per share.

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 .

This dividend is payable on December 24, 2024 , to the Company’s stockholders of record as of the close of business on December 3, 2024 .

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

The dividends charged to retained earnings in fiscal 2023 and 2022 were as follows (in millions except per share data):

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

Fiscal Years Ended

September 29,

2023 September 30,

Per Share Total Per Share Total

September 27, 2024 September 29, 2023

Per Share Total Amount Per Share Total Amount

First quarter $ 0.68 $ 108.9 $ 0.62 $ 99.4

2 unchanged sentences

Fourth quarter 0.70 112.0 0.68 108.5

$ 2.54 $ 405.2 $ 2.30 $ 373.1

Total dividends $ 2.74 $ 439.1 $ 2.54 $ 405.2

Employee Stock Benefit Plans

As of September 27, 2024, the Company has the following equity compensation plans under which its equity securities were authorized for issuance to its employees and/or directors:

◦ the 2002 Employee Stock Purchase Plan

◦ the Non-Qualified Employee Stock Purchase Plan

◦ the 2008 Director Long-Term Incentive Plan

◦ the 2015 Long-Term Incentive Plan

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

• the 2002 Employee Stock Purchase Plan, as Amended

• the Non-Qualified Employee Stock Purchase Plan, as Amended

• the Amended and Restated 2008 Director Long-Term Incentive Plan

• the Second Amended and Restated 2015 Long-Term Incentive Plan

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

As of September 27, 2024, a total of 45.4 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 14.7 million at September 27, 2024.

The Company currently grants new equity awards to employees under the 2015 Long-Term Incentive Plan and to non-employee directors under the 2008 Director Long-Term Incentive Plan.

2015 Long-Term Incentive Plan.

The Company currently grants new equity awards to employees under the Second Amended and Restated 2015 Long-Term Incentive Plan and to non-employee directors under the Amended and Restarted 2008 Director Long-Term Incentive Plan, as Amended.

Second Amended and Restated 2015 Long-Term Incentive Plan.

Under this plan, officers, employees, and certain consultants may be granted stock options, restricted stock units, performance stock units, and other share-based awards.

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Performance stock units are contingently granted depending on the achievement of certain predetermined performance goals and generally vest over one or more years.

2008 Director Long-Term Incentive Plan.

Amended and Restated 2008 Director Long-Term Incentive Plan, as Amended.

Under this plan, non-employee directors may be granted stock options, restricted stock units, and other share-based awards.

10 unchanged sentences

The plans provide for purchases by employees of up to an aggregate of 13.5 million shares.

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.

Shares of common stock purchased under these plans during fiscal 2024, fiscal 2023, and fiscal 2022, were 0.4 million, 0.3 million, and 0.3 million, respectively.

At September 27, 2024, there were 2.6 million shares available for purchase.

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.

The Company recognized compensation expense of $ 10.1 million, $ 10.9 million, and $ 9.2 million during fiscal 2024, fiscal 2023, and fiscal 2022, respectively, related to the employee stock purchase plan.

The unrecognized compensation expense on the employee

stock purchase plan at September 27, 2024, was $ 4.4 million.

The weighted average period over which the cost is expected to be recognized is approximately four months .

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(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 29, 2023, September 30, 2022, and October 1, 2021, was $ 92.86 , $ 151.20 , and $ 148.96 , respectively.

The weighted-average grant date fair value per share for awards granted during fiscal 2024, fiscal 2023, and fiscal 2022, was $ 92.24 , $ 92.86 , and $ 151.20 , respectively.

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

Fiscal Years Ended

September 29,

2023 September 30,

2022 October 1,

September 27, 2024 September 29, 2023 September 30, 2022

Awards $ 111.8 $ 111.9 $ 249.6

Valuation and Expense Information

The following table summarizes pre-tax share-based compensation expense by financial statement line and related tax benefit (in millions):

The following table summarizes pre-tax share-based compensation expense by financial statement line item and related tax benefit (in millions):

Fiscal Years Ended

September 29,

2023 September 30,

2022 October 1,

September 27, 2024 September 29, 2023 September 30, 2022

Cost of goods sold $ 32.0 $ 20.7 $ 26.9

1 unchanged sentence

Selling, general, and administrative 62.8 69.6 74.5

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

Total share-based compensation $ 180.3 $ 185.1 $ 195.2

Share-based compensation tax expense (benefit)

1 unchanged sentence

Capitalized share-based compensation expense at period end $ 10.1 $ 14.5 $ 6.8

The following table summarizes total compensation costs related to unvested share-based awards not yet recognized and the weighted-average period over which it is expected to be recognized at September 29, 2023:

Unrecognized Compensation Cost for Unvested Awards

5 unchanged sentences

Fiscal Year Ended

September 29,

2023 September 30,

2022 October 1,

September 27, 2024 September 29, 2023 September 30, 2022

Volatility of common stock 37.36 % 45.71 % 44.04 %

5 unchanged sentences

The leases expire at various dates through 2061, some of which include options to extend the lease term.

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

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.

The longest potential remaining lease term consists of a 37 year land lease in Osaka, Japan.

During fiscal 2024, fiscal 2023, and fiscal 2022, the Company recorded $ 35.5 million, $ 39.8 million, and $ 43.6 million of operating lease expense, and $ 20.6 million, $ 19.2 million, and $ 12.3 million of variable lease expense, respectively.

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

Fiscal Year Ended

September 29,

2023 September 30,

2022 October 1,

September 27, 2024 September 29, 2023 September 30, 2022

Operating cash outflows from operating leases $ 35.4 $ 34.0 $ 32.0

1 unchanged sentence

Operating leases are classified as follows (in millions):

September 29,

2023 September 30,

September 27, 2024 September 29, 2023

Other current liabilities $ 20.2 $ 28.3

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current portion (included in other current liabilities) ( 20.2 )

Total $ 188.7

Long-term operating lease liabilities

Weighted-average remaining lease term and discount rate related to operating leases are as follows:

September 29,

2023 September 30,

Weighted-average remaining lease term (years) 12.3 12.1

September 27, 2024 September 29, 2023

Weighted-average remaining lease term (in years) 11.9 12.3

Weighted-average discount rate 3.7 % 3.6 %

3 unchanged sentences

The semiconductor industry is characterized by vigorous protection and pursuit of intellectual property rights.

Third parties have asserted, and may in the future, assert patent, copyright, trademark, and other intellectual property rights to technologies that are important to the Company’s business and have demanded and may in the future demand that the Company license their technology.

From time to time, third parties have asserted and may in the future assert patent, copyright, trademark, and other intellectual property rights to technologies that are important to the Company’s business and have demanded and may in the future demand that the Company license their technology.

The outcome of any such litigation cannot be predicted with certainty and some such lawsuits, claims, or proceedings may be disposed of unfavorably to the Company.

1 unchanged sentence

From time to time the Company may also be involved in legal proceedings in the ordinary course of business.

The Company monitors the status of legal proceedings and other contingencies on an ongoing basis to ensure loss contingencies are recognized and/or disclosed in its financial statements and footnotes.

The Company monitors the status of legal proceedings and other contingencies on an ongoing basis to assess whether loss contingencies should be recognized and disclosed in its financial statements and footnotes.

The Company does not believe there are any pending legal proceedings that are reasonably possible to result in a material loss.

4 unchanged sentences

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.

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.

As such, the Company believes that purchase commitments as of any particular date may not be a reliable indicator of future liabilities.

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.

Under these agreements, the Company has agreed to pay a combination of refundable deposits and prepayments 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.

As of September 27, 2024, the deposits and prepayments under the long-term capacity reservation agreements were $ 141.7 million and $ 3.0 million, respectively, recorded within other current assets, and $ 1.3 million and $ 21.8 million, respectively, recorded within other long-term assets.

As of September 29, 2023, the deposits and prepayments under the long-term capacity reservation agreements were $ 41.7 million and $ 1.3 million, respectively, recorded within other current assets and $ 16.0 million of prepayments recorded within other long-term assets.

GUARANTEES AND INDEMNITIES

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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.

2 unchanged sentences

Fiscal Years Ended

September 29,

2023 September 30,

2022 October 1,

September 27, 2024 September 29, 2023 September 30, 2022

Net income $ 596.0 $ 982.8 $ 1,275.2

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 fiscal years ended September 29, 2023, September 30, 2022, and October 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 fiscal 2024, fiscal 2023, and fiscal 2022, using the treasury stock method.

7 unchanged sentences

Disaggregation of Revenue and Geographic Information

The Company presents net revenue by geographic area based upon the location of the OEMs’ headquarters and sales channel as it believes that doing so best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by

economic factors.

Individually insignificant OEMs are presented based on sales region.

The Company presents net revenue by geographic area, based upon the location of the OEMs’ headquarters, and by sales channel, as it believes that doing so best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

Individually insignificant OEMs are presented based upon the location of the Company’s direct customer, which is typically a distributor.

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

Fiscal Years Ended

September 29,

2023 September 30,

2022 October 1,

September 27, 2024 September 29, 2023 September 30, 2022

United States $ 3,202.2 $ 3,603.9 $ 3,685.7

China 358.3 599.6 994.2

Taiwan 317.5 344.4 430.4

Europe, Middle East, and Africa 204.2 235.8 180.1

China 303.4 358.3 599.6

South Korea 203.9 198.3 458.2

Europe, Middle East, and Africa 114.5 204.2 235.8

Other Asia-Pacific 36.5 63.3 75.8

Total $ 4,772.4 $ 5,485.5 $ 5,109.1

Total net revenue $ 4,178.0 $ 4,772.4 $ 5,485.5

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

Fiscal Years Ended

September 29,

2023 September 30,

2022 October 1,

September 27, 2024 September 29, 2023 September 30, 2022

Distributors $ 3,622.6 $ 4,235.7 $ 4,488.1

Direct customers 555.4 536.7 997.4

Total $ 4,772.4 $ 5,485.5 $ 5,109.1

Total net revenue $ 4,178.0 $ 4,772.4 $ 5,485.5

The Company’s revenue from external customers is generated principally from the sale of semiconductor products.

Accordingly, the Company considers its product offerings to be similar in nature and therefore not segregated for reporting purposes.

Net property, plant, and equipment balances, based on the physical locations within the indicated geographic areas are as follows (in millions):

September 29,

2023 September 30,

Property, plant, and equipment, net based on the physical locations within the indicated geographic areas are as follows (in millions):

September 27, 2024 September 29, 2023

Japan $ 526.1 $ 606.4

3 unchanged sentences

Rest of world 25.1 23.4

$ 1,390.1 $ 1,604.8

Total property, plant, and equipment, net $ 1,280.3 $ 1,390.1

Concentrations

2 unchanged sentences

The Company performs ongoing credit evaluations of customers.

In fiscal 2023, 2022, and 2021, Apple, through sales to multiple distributors, contract manufacturers, and direct sales for multiple applications including smartphones, tablets, desktop, and notebook computers, watches and other devices, in the aggregate accounted for 66 %, 58 %, and 59 % of the Company’s net revenue, respectively.

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

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

During fiscal 2024, fiscal 2023, and fiscal 2022, Apple, through sales to multiple distributors, contract manufacturers, and direct sales for multiple applications including smartphones, tablets, desktop, and notebook computers, watches and other devices, in the aggregate accounted for 69 %, 66 %, and 58 % of the Company’s net revenue, respectively.

The Company’s three largest accounts receivable balances comprised 80 % and 83 % of aggregate gross accounts receivable as of September 27, 2024 and September 29, 2023, respectively.

SUPPLEMENTAL FINANCIAL INFORMATION

Other current assets consist of the following (in millions):

September 30,

2022 October 1,

September 27, 2024 September 29, 2023

Prepaid expenses $ 234.8 $ 306.0

2 unchanged sentences

Other current liabilities consist of the following (in millions):

September 29,

2023 September 30,

September 27, 2024 September 29, 2023

Accrued customer liabilities $ 192.2 $ 270.9

4 unchanged sentences

Debt consists of the following (in millions, except percentages):

Effective Interest Rate September 29,

2023 September 30,

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

Effective Interest Rate As of

September 27, 2024 September 29, 2023

1.80% Senior Notes due 2026 1.97 % $ 500.0 $ 500.0

6 unchanged sentences

$ 994.3 $ 992.9

(1) In fiscal 2023, the effective interest rate of the Terms Loans due in 2024 was 6.37 %.

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 2026 Notes, the “Notes”).

8 unchanged sentences

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.

As of September 27, 2024, the Company was in compliance with all debt covenants under the Senior Notes.

Term Credit Agreement

2 unchanged sentences

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.

Interest on the Term Loans is payable either monthly or quarterly elected at the Company’s discretion and is based on the applicable floating interest rate, plus an applicable margin based on the Company’s public debt credit ratings.

The Term Loans mature on July 26, 2024, and all amounts then-outstanding under the Term Loans, together with accrued and unpaid interest thereon, are repayable at maturity.

There is no premium or penalty for prepayment.

The Term 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.

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.

During fiscal 2024, fiscal 2023, and fiscal 2022, the Company repaid $ 300.0 million, $ 400.0 million, and $ 50.0 million, respectively, of outstanding borrowings under the Term Loans.

The Term Credit Agreement expired on July 26, 2024.

Revolving Credit Agreement

5 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 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.

As of September 27, 2024, there were no borrowings outstanding and the Company was in compliance with all debt covenants under the Revolver.

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