UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~December 28, 2019~~October 3, 2020



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____to _____

Commission File Number 001-36801

Qorvo, Inc.

(Exact name of registrant as specified in its charter)



Delaware		46-5288992
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification no.)

7628 Thorndike Road
Greensboro,	North Carolina	27409-9421
(Address of principal executive office)		(Zip code)

(336) 664-1233

Registrant's telephone number, including area code



Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value	QRVO	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	þ	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

As of ~~January 22,~~October 26, 2020, there were ~~115,684,626~~114,054,102 shares of the registrant’s common stock outstanding.

QORVO, INC. AND SUBSIDIARIES

INDEX



	Page
PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).
Condensed Consolidated Balance Sheets as of ~~December 28, 2019~~October 3, 2020 and March ~~30, 2019~~28, 2020	3
Condensed Consolidated Statements of Income for the three and ~~nine~~six months ended ~~December~~October 3, 2020 and September 28, 2019 ~~and December 29, 2018~~	4
Condensed Consolidated Statements of Comprehensive Income for the three and ~~nine~~six months ended ~~December~~October 3, 2020 and September 28, 2019 ~~and December 29, 2018~~	5
Condensed Consolidated Statements of Stockholders' Equity for the three and ~~nine~~six months ended ~~December~~October 3, 2020 and September 28, 2019 ~~and December 29, 2018~~	6
Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~December~~October 3, 2020 and September 28, 2019 ~~and December 29, 2018~~	8
Notes to Condensed Consolidated Financial Statements	9

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.	3021
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	3830
Item 4. Controls and Procedures.	3830

PART II — OTHER INFORMATION	3830

Item 1A. Risk Factors.	3831
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	3932
Item 6. Exhibits.	4033

SIGNATURES	4134

PART I — FINANCIAL INFORMATION

ITEM 1.

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)


	December 28, 2019			March 30, 2019			October 3, 2020		March 28, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	1,097,724		$	711,035		$	2,000,257	$	714,939
Accounts receivable, less allowance of $61 and $40 as of December 28, 2019 and March 30, 2019, respectively	409,835			378,172
Inventories (Note 3)	479,885			511,793
Accounts receivable, net of allowance of $1,062 and $55 as of October 3, 2020 and March 28, 2020, respectively							485,100		367,172
Inventories							476,846		517,198
Prepaid expenses	27,120			25,766			42,178		37,872
Other receivables	16,620			21,934			13,831		15,016
Other current assets	36,488			36,141			44,514		38,305
Total current assets	2,067,672			1,684,841			3,062,726		1,690,502
Property and equipment, net of accumulated depreciation of $1,374,455 at December 28, 2019 and $1,218,507 at March 30, 2019	1,278,988			1,366,513
Goodwill (Note 4)	2,415,802			2,173,889
Intangible assets, net (Note 4)	595,307			408,210
Long-term investments (Note 5)	40,896			97,786
Other non-current assets (Note 6)	120,838			76,785
Property and equipment, net of accumulated depreciation of $1,477,921 and $1,415,397 as of October 3, 2020 and March 28, 2020, respectively							1,224,853		1,259,203
Goodwill							2,639,943		2,614,274
Intangible assets, net							714,565		808,892
Long-term investments							37,848		22,515
Other non-current assets							144,487		165,296
Total assets	$	6,519,503		$	5,808,024		$	7,824,422	$	6,560,682
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	239,180		$	233,307		$	242,147	$	246,954
Accrued liabilities	187,017			160,516			240,839		217,801
Current portion of long-term debt (Note 7)	5,302			80
Other current liabilities (Note 6)	59,706			41,711
Current portion of long-term debt							905,086		6,893
Other current liabilities							88,945		67,355
Total current liabilities	491,205			435,614			1,477,017		539,003
Long-term debt (Note 7)	1,568,554			920,935
Other long-term liabilities (Note 6)	120,367			91,796
Long-term debt							1,764,396		1,567,231
Other long-term liabilities							175,843		161,783
Total liabilities	2,180,126			1,448,345			3,417,256		2,268,017
Commitments and contingent liabilities (Note 9)
Stockholders’ equity:
Preferred stock, $.0001 par value; 5,000 shares authorized; no shares issued and outstanding	—			—			0		0
Common stock and additional paid-in capital, $.0001 par value; 405,000 shares authorized; 115,738 and 119,063 shares issued and outstanding at December 28, 2019 and March 30, 2019, respectively	4,383,368			4,687,455
Accumulated other comprehensive loss, net of tax	(6,843		)	(6,624		)
Accumulated deficit	(37,148		)	(321,152		)
Common stock and additional paid-in capital, $.0001 par value; 405,000 shares authorized; 114,111 and 114,625 shares issued and outstanding at October 3, 2020 and March 28, 2020, respectively							4,267,987		4,290,377
Accumulated other comprehensive income, net of tax							26,616		2,288
Retained earnings							112,563		0
Total stockholders’ equity	4,339,377			4,359,679			4,407,166		4,292,665
Total liabilities and stockholders’ equity	$	6,519,503		$	5,808,024		$	7,824,422	$	6,560,682

See accompanying Notes to Condensed Consolidated Financial Statements.

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	December 28, 2019			December 29, 2018			December 28, 2019			December 29, 2018			October 3, 2020			September 28, 2019			October 3, 2020			September 28, 2019
Revenue	$	869,073		$	832,330		$	2,451,369		$	2,409,443		$	1,060,292		$	806,698		$	1,847,743		$	1,582,296
Cost of goods sold	500,962			493,967			1,465,387			1,480,833			568,742			483,116			1,030,404			964,425
Gross profit	368,111			338,363			985,982			928,610			491,550			323,582			817,339			617,871
Operating expenses:
Research and development	122,851			109,985			357,385			337,636			156,342			115,614			286,413			234,534
Selling, general and administrative	81,205			125,604			258,458			401,041			109,372			88,274			195,976			177,253
Other operating expense (Notes 4 and 10)	10,986			21,617			49,077			37,514
Other operating expense													4,192			6,927			20,594			38,091
Total operating expenses	215,042			257,206			664,920			776,191			269,906			210,815			502,983			449,878
Income from operations	153,069			81,157			321,062			152,419
Interest expense (Note 7)	(16,900		)	(9,562		)	(41,457		)	(33,604		)
Operating income													221,644			112,767			314,356			167,993
Interest expense													(23,486		)	(12,693		)	(42,335		)	(24,557		)
Interest income	2,874			2,814			8,112			7,788			1,272			2,292			2,462			5,238
Other income (expense) (Notes 4 & 7)	44,148			(3,520		)	42,737			(85,007		)
Other income (expense), net													648			(300		)	22,595			(1,411		)

Income before income taxes	183,191			70,889			330,454			41,596			200,078			102,066			297,078			147,263

Income tax (expense) benefit (Note 12)	(21,835		)	(1,372		)	(46,519		)	30,012
Income tax expense													(63,161		)	(19,028		)	(63,239		)	(24,684		)
Net income	$	161,356		$	69,517		$	283,935		$	71,608		$	136,917		$	83,038		$	233,839		$	122,579

Net income per share (Note 13):
Net income per share:
Basic	$	1.39		$	0.56		$	2.42		$	0.57		$	1.20		$	0.71		$	2.04		$	1.04
Diluted	$	1.36		$	0.55		$	2.37		$	0.56		$	1.18		$	0.70		$	2.01		$	1.02

Weighted average shares of common stock outstanding (Note 13):
Weighted average shares of common stock outstanding:
Basic	116,129			124,308			117,436			125,437			114,328			117,294			114,388			117,945
Diluted	118,455			126,842			119,712			128,360			116,177			119,429			116,395			120,196

See accompanying Notes to Condensed Consolidated Financial Statements.

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	Three Months Ended					Nine Months Ended						Three Months Ended					Six Months Ended
	December 28, 2019		December 29, 2018			December 28, 2019			December 29, 2018			October 3, 2020		September 28, 2019			October 3, 2020		September 28, 2019
Net income	$	161,356	$	69,517		$	283,935		$	71,608		$	136,917	$	83,038		$	233,839	$	122,579
Other comprehensive income (loss):
Unrealized (loss) gain on marketable securities, net of tax	—		(5		)	—			85
Foreign currency translation adjustment, including intra-entity foreign currency transactions that are of a long-term investment nature	781		(1,079		)	(674		)	(3,448		)	18,201		(1,242		)	24,288		(1,455		)
Reclassification adjustments, net of tax:
Foreign currency loss included in net income	—		—			353			—			0		231			0		353
Amortization of pension actuarial loss	34		22			102			45			21		34			40		68
Other comprehensive income (loss)	815		(1,062		)	(219		)	(3,318		)	18,222		(977		)	24,328		(1,034		)
Total comprehensive income	$	162,171	$	68,455		$	283,716		$	68,290		$	155,139	$	82,061		$	258,167	$	121,545

See accompanying Notes to Condensed Consolidated Financial Statements.

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands)

(Unaudited)


						Accumulated Other Comprehensive Loss				Accumulated Deficit													Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Accumulated Deficit)
	Common Stock												Common Stock
Three Months Ended	Shares		Amount						Total
Balance, September 28, 2019	116,294		$	4,471,656				$	(7,658			)		$	(198,504	)		$	4,265,494
																	Shares			Amount				Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Accumulated Deficit)				Total
Balance, June 27, 2020																	114,354			$	4,293,621					$				4,351,245
Net income	—		—					—						161,356				161,356			0					0								136,917
Other comprehensive income	—		—			815				—				815			0			0			18,222			0				18,222
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	490		10,150			—				—				10,150			594			(26,306		)	0			0				(26,306		)
Issuance of common stock in connection with employee stock purchase plan	213		13,710			—				—				13,710
Repurchase of common stock, including transaction costs	(1,259	)	(125,012		)	—				—				(125,012		)	(837	)		(31,425		)	0			(73,584		)		(105,009		)
Stock-based compensation	—		12,864			—				—				12,864			—			32,097			0			0				32,097
Balance, December 28, 2019	115,738		$	4,383,368		$	(6,843	)		$	(37,148	)		$	4,339,377
Balance, October 3, 2020																	114,111			$	4,267,987		$		26,616			$	112,563			$	4,407,166

Balance, September 29, 2018	125,046		$	5,089,331		$	(5,008	)		$	(452,186	)		$	4,632,137
Balance, June 29, 2019																	117,943			$	4,625,566		$	(6,681	)	$	(281,542	)		$	4,337,343
Net income	—		—			—				69,517				69,517			0			0			0			83,038				83,038
Other comprehensive loss	—		—			(1,062		)		—				(1,062		)	0			0			(977		)	0				(977		)
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	41		226			—				—				226			652			(12,033		)	0			0				(12,033		)
Issuance of common stock in connection with employee stock purchase plan	219		12,535			—				—				12,535
Repurchase of common stock, including transaction costs	(2,305	)	(151,993		)	—				—				(151,993		)	(2,301	)		(165,032		)	0			0				(165,032		)
Stock-based compensation	—		15,960			—				—				15,960			—			23,155			0			0				23,155
Balance, December 29, 2018	123,001		$	4,966,059		$	(6,070	)		$	(382,669	)		$	4,577,320
Balance, September 28, 2019																	116,294			$	4,471,656		$	(7,658	)	$	(198,504	)		$	4,265,494

See accompanying Notes to Condensed Consolidated Financial Statements.

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands)

(Unaudited)


						Accumulated Other Comprehensive Loss				Accumulated Deficit													Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Accumulated Deficit)
	Common Stock												Common Stock
Nine Months Ended	Shares		Amount						Total
																	Shares			Amount				Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Accumulated Deficit)				Total
Balance, March 28, 2020																	114,625			$	4,290,377					$				4,292,665
Net income																	0			0						233,839
Other comprehensive income																	0			0					24,328				0				24,328
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes																	826			(32,371		)	0			0				(32,371		)
Issuance of common stock in connection with employee stock purchase plan																	229			15,758			0			0				15,758
Cumulative-effect adoption of ASU 2016-13																	0			0			0			(38		)		(38		)
Repurchase of common stock, including transaction costs																	(1,569	)		(58,830		)	0			(121,218		)		(180,048		)
Stock-based compensation																	—			53,053			0			0				53,053
Other																	0			0			0			(20		)		(20		)
Balance, October 3, 2020																	114,111			$	4,267,987		$		26,616		$	112,563			$	4,407,166

Balance, March 30, 2019	119,063		$	4,687,455				$	(6,624			)		$	(321,152	)		$	4,359,679		119,063		$	4,687,455		$	(6,624	)		$	(321,152	)		$	4,359,679
Net income	—		—					—						283,935				283,935			0		0			0				122,579				122,579
Other comprehensive loss	—		—			(219		)		—				(219		)	0			0			(1,034		)	0				(1,034		)
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	1,327		(5,459		)	—				—				(5,459		)	837			(15,609		)	0			0				(15,609		)
Issuance of common stock in connection with employee stock purchase plan	452		28,658			—				—				28,658			239			14,948			0			0				14,948
Cumulative-effect adoption of ASU 2016-02	—		—			—				69				69			0			0			0			69				69
Repurchase of common stock, including transaction costs	(5,104	)	(390,117		)	—				—				(390,117		)	(3,845	)		(265,105		)	0			0				(265,105		)
Stock-based compensation	—		62,831			—				—				62,831			—			49,967			0			0				49,967
Balance, December 28, 2019	115,738		$	4,383,368		$	(6,843	)		$	(37,148	)		$	4,339,377

Balance, March 31, 2018	126,322		$	5,237,085		$	(2,752	)		$	(458,769	)		$	4,775,564
Net income	—		—			—				71,608				71,608
Other comprehensive loss	—		—			(3,318		)		—				(3,318		)
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	859		(19,633		)	—				—				(19,633		)
Issuance of common stock in connection with employee stock purchase plan	468		26,817			—				—				26,817
Cumulative-effect adoption of ASU 2014-09	—		—			—				4,492				4,492
Repurchase of common stock, including transaction costs	(4,648	)	(338,675		)	—				—				(338,675		)
Stock-based compensation	—		60,465			—				—				60,465
Balance, December 29, 2018	123,001		$	4,966,059		$	(6,070	)		$	(382,669	)		$	4,577,320
Balance, September 28, 2019																	116,294			$	4,471,656		$	(7,658	)	$	(198,504	)		$	4,265,494

See accompanying Notes to Condensed Consolidated Financial Statements.

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Nine Months Ended

December 28, 2019 December 29, 2018
Cash flows from operating activities:
Net income $ 283,935
$ 71,608
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 172,314
143,008
Intangible assets amortization (Note 4)
177,930
399,200
Loss on debt extinguishment (Note 7)
—
84,004
Deferred income taxes (1,207 ) (58,216 )
Gain on Cavendish investment (Note 4)
(43,008 ) —
Asset impairment (Note 10)
1,057
14,913
Stock-based compensation expense 62,210
58,874
Other, net 7,036
3,491
Changes in operating assets and liabilities:
Accounts receivable, net (25,166 ) (74,844 )
Inventories 44,863
7,474
Prepaid expenses and other current and non-current assets 2,942
14,914
Accounts payable and accrued liabilities 41,723
(9,810 )
Income tax payable and receivable 3,917
(26,574 )
Other liabilities 2,705
(5,023 )
Net cash provided by operating activities 731,251
623,019
Investing activities:
Purchase of property and equipment (129,004 ) (185,627 )
Purchase of available-for-sale debt securities —
(132,729 )
Purchase of businesses, net of cash acquired (Note 4)
(494,783 ) —
Proceeds from sales and maturities of available-for-sale debt securities 1,950
133,132
Other investing activities (1,263 ) (20,238 )
Net cash used in investing activities (623,100 ) (205,462 )
Financing activities:
Repurchase of debt (Note 7)
—
(977,498 )
Proceeds from borrowings and debt issuances (Note 7)
659,000
631,300
Repurchase of common stock, including transaction costs (Note 8)
(390,117 ) (338,675 )
Proceeds from the issuance of common stock 37,530
25,452
Tax withholding paid on behalf of employees for restricted stock units (21,013 ) (24,595 )
Other financing activities (6,252 ) (7,510 )
Net cash provided by (used in) financing activities 279,148
(691,526 )

Effect of exchange rate changes on cash (501 ) (2,369 )
Net increase (decrease) in cash, cash equivalents and restricted cash 386,798
(276,338 )
Cash, cash equivalents and restricted cash at the beginning of the period 711,382
926,402
Cash, cash equivalents and restricted cash at the end of the period $ 1,098,180
$ 650,064

Non-cash investing information:
Capital expenditure adjustments included in accounts payable and accrued liabilities $ 26,152
$ 37,206

Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents $ 1,097,724
$ 649,711
Restricted cash included in "Other non-current assets" 456
353
Total cash, cash equivalents and restricted cash 1,098,180
650,064



	Six Months Ended
	October 3, 2020			September 28, 2019
Cash flows from operating activities:
Net income	$	233,839		$	122,579
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	100,799			118,622
Intangible assets amortization	144,470			114,837
Deferred income taxes	36,468			(9,517		)
Stock-based compensation expense	51,907			45,829
Other, net	(7,496		)	12,036
Changes in operating assets and liabilities:
Accounts receivable, net	(118,008		)	(20,990		)
Inventories	41,844			41,874
Prepaid expenses and other assets	(2,366		)	8,380
Accounts payable and accrued liabilities	16,230			(4,201		)
Income taxes payable and receivable	9,671			5,072
Other liabilities	(12,109		)	(3,991		)
Net cash provided by operating activities	495,249			430,530
Cash flows from investing activities:
Purchase of property and equipment	(73,386		)	(88,338		)
Purchase of businesses, net of cash acquired	(47,520		)	(299,673		)
Proceeds from sales of available-for-sale debt securities	0			1,950
Other investing activities	9,581			(1,242		)
Net cash used in investing activities	(111,325		)	(387,303		)
Cash flows from financing activities:
Payment of debt	(100,000		)	0
Proceeds from borrowings and debt issuances	1,206,750			100,000
Repurchase of common stock, including transaction costs	(180,048		)	(265,105		)
Proceeds from the issuance of common stock	21,792			20,205
Tax withholding paid on behalf of employees for restricted stock units	(36,354		)	(20,545		)
Other financing activities	(11,705		)	(832		)
Net cash provided by (used in) financing activities	900,435			(166,277		)

Effect of exchange rate changes on cash, cash equivalents and restricted cash	936			(1,091		)
Net increase (decrease) in cash, cash equivalents and restricted cash	1,285,295			(124,141		)
Cash, cash equivalents and restricted cash at the beginning of the period	715,612			711,382
Cash, cash equivalents and restricted cash at the end of the period	$	2,000,907		$	587,241

Non-cash investing information:
Capital expenditure adjustments included in liabilities	$	22,124		$	30,052

Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	2,000,257		$	586,794
Restricted cash included in "Other current assets" and "Other non-current assets"	650			447
Total cash, cash equivalents and restricted cash	$	2,000,907		$	587,241

See accompanying Notes to Condensed Consolidated Financial Statements.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying Condensed Consolidated Financial Statements of Qorvo, Inc. and Subsidiaries (together, the ~~"Company"~~“Company” or ~~"Qorvo"~~“Qorvo”) have been prepared in conformity with accounting principles generally accepted in the United States ("(“U.S. ~~GAAP"~~GAAP”). The preparation of these financial statements requires management to make estimates and assumptions, which could differ materially from actual results. In addition, certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed, or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the financial statements include all adjustments (which are of a normal and recurring nature) necessary for the fair presentation of the results of the interim periods presented. These Condensed Consolidated Financial Statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in Qorvo’s Annual Report on Form 10-K for the fiscal year ended March ~~30, 2019~~28, 2020.

The Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain items in the fiscal ~~2019~~2020 financial statements have been reclassified to conform with the fiscal ~~2020~~2021 presentation.

The Company uses a 52- or 53-week fiscal year ending on the Saturday closest to March 31 of each year. The first fiscal quarter of each year ends on the Saturday closest to June 30, the second fiscal quarter of each year ends on the Saturday closest to September 30 and the third fiscal quarter of each year ends on the Saturday closest to December 31. Fiscal ~~years~~2021 is a 53-week fiscal year during which the second fiscal quarter ended October 3, 2020 and ~~2019 are 52-week years.~~included 14 weeks, compared to 13 weeks for the second fiscal quarter ended September 28, 2019. The first six months of fiscal 2021 ended October 3, 2020 and included 27 weeks, compared to 26 weeks for the six months ended September 28, 2019.

2. RECENT ACCOUNTING PRONOUNCEMENTS

The Company assesses recently issued accounting standards by the Financial Accounting Standards Board ("FASB") to determine the expected impacts on the Company's financial statements. The summary below describes impacts from newly issued standards as well as material updates to our previous assessments, if any, from Qorvo’s Annual Report on Form 10-K for the fiscal year ended March ~~30, 2019.~~28, 2020.

In ~~February~~June 2016, the FASB issued Accounting Standards Update ~~2016-02,~~ ("ASU") 2016-13, "~~"Leases~~Financial Instruments-Credit Losses (Topic ~~842)~~326): Measurement of Credit Losses on Financial Instruments," ~~with multiple amendments subsequently issued. The new guidance~~ which requires ~~that lease arrangements~~a current lifetime expected credit loss methodology to be ~~presented on~~used to measure impairments of accounts receivable and other financial assets. Using this methodology will result in earlier recognition of losses than under the ~~lessee's balance sheet by recording~~previous incurred loss approach, which requires waiting to recognize a ~~right-of-use asset and a lease liability equal to the present value~~loss until it is probable of ~~the related future minimum lease payments.~~being incurred. The Company adopted the standard, which applies to its accounts receivables, in the first quarter of fiscal ~~2020,~~2021.

Under this new standard, trade receivables are now evaluated on a collective (pool) basis and aggregated on the basis of similar risk characteristics. These aggregated risk pools will be reassessed at each measurement date. A combination of factors is considered in determining the appropriate estimate of expected credit losses which include broad-based economic indicators as well as customers' financial strength, credit standing, payment history and any historical defaults.

The adoption of this standard using the modified retrospective approach which permits lessees to recognize a cumulative-effect adjustment to the opening balance of accumulated deficit in the period of adoption. Upon adoption, the Company recorded a right-of-use asset of $70.7 million and a lease liability of $75.0 million. The difference between the right-of-use asset and lease liability is primarily attributed to a deferred rent liability which existed under Accounting Standards Codification ("ASC") 840, ~~"Leases~~."

~~The Company elected the~~ transition package of practical expedients, under which the Company does not have to reassess (1) whether any expired or existing contracts are leases, or contain leases, (2) the lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases. Further, the Company elected the practical expedient not to separate lease and non-lease components for substantially all of its classes of leases and to account for the combined lease and non-lease components as a single lease component. In addition, the Company made an accounting policy election to exclude leases with an initial term of 12 months or less from the balance sheet.

~~The adoption of this standard~~method resulted in a cumulative-effect adjustment to ~~accumulated deficit~~retained earnings of less than $0.1 million. ~~This standard did not have a material impact on the Condensed Consolidated Statements of Income or Condensed Consolidated Statements of Cash Flows. See Note~~ 6 ~~for further disclosures resulting from the adoption of this new standard.~~

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

3. INVENTORIES

The components of inventories, net of reserves, are as follows (in thousands):


	December 28, 2019		March 30, 2019		October 3, 2020		March 28, 2020
Raw materials	$	105,854	$	118,608	$	114,391	$	112,671
Work in process	271,798		272,469		233,826		291,028
Finished goods	102,233		120,716		128,629		113,499
Total inventories	$	479,885	$	511,793	$	476,846	$	517,198

4. BUSINESS ACQUISITIONS

During the three months ended October 3, 2020, the Company completed the acquisition of 7Hugs Labs S.A.S. ("7Hugs"). During fiscal 2020, the Company completed the acquisitions of Decawave Limited ("Decawave"), Custom MMIC Design Services, Inc. ("Custom MMIC"), Cavendish Kinetics Limited ("Cavendish") and Active-Semi International, Inc. ("Active-Semi"). The operating results of these companies have been included in the Company's consolidated financial statements as of the acquisition dates.

7Hugs Labs S.A.S.

On October 1, 2020, the Company acquired all of the outstanding equity interests of 7Hugs, a private developer of ultra-wide band ("UWB") software and solutions, for a total purchase price of $48.7 million, including cash acquired of $1.0 million. The acquisition expands the Company's product offerings and is expected to support the ongoing development and adoption of UWB products and solutions.

The purchase price was allocated to 7Hugs' net tangible liabilities (approximately $5.4 million, which includes debt assumed), deferred tax liability (approximately $1.7 million) and an intangible asset (approximately $37.3 million, entirely related to developed technology) based on their estimated fair values as of October 1, 2020. The fair value of the developed technology was determined based on an income approach using the "relief from royalty method," which estimated the value by discounting the royalties avoided by acquiring the technology to present value as of the valuation date. The acquired developed technology asset is being amortized on a straight-line basis over the estimated useful life of 10 years.

The excess of the purchase price over the value of the net tangible liabilities, deferred tax liability and intangible asset resulted in goodwill of approximately $18.5 million. The Company will continue to evaluate certain assets, liabilities and tax estimates over the measurement period (up to one year from the acquisition date). During the three months ended October 3, 2020, the Company recorded acquisition and integration costs associated with the acquisition of 7Hugs of $1.4 million in "Other operating expense" in the Condensed Consolidated Statement of Income.

Decawave Limited

On February 21, 2020, the Company acquired all of the outstanding equity interests of Decawave, a pioneer in UWB technology and provider of UWB solutions for mobile, automotive and Internet of Things ("IoT") applications, for a total purchase price of $372.7 million. The acquisition expands the Company's product and technology offerings that enables real-time, highly accurate and reliable local area precision-location services.

During the six months ended October 3, 2020, the Company recognized a decrease to goodwill of approximately $2.6 million as a result of purchase price allocation adjustments. The Company will continue to evaluate certain assets, liabilities, and tax estimates over the measurement period (up to one year from the acquisition date).

Custom MMIC Design Services, Inc.

On February 6, 2020, the Company acquired all of the outstanding equity interests of Custom MMIC, a supplier of high-performance gallium arsenide ("GaAs") and gallium nitride ("GaN") monolithic microwave integrated circuits ("MMICs") for defense and commercial applications, for a total purchase price of $91.7 million. The acquisition expands the Company's

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

millimeter wave ("mmWave") capabilities for product offerings in defense and commercial markets. On the acquisition date, the purchase price was comprised of cash consideration of $86.0 million and contingent consideration of $5.7 million (based on estimated fair value) which is payable to the sellers in the first quarter of fiscal 2022 if certain revenue targets are achieved over a one-year period from the acquisition date. The contingent consideration liability is remeasured to fair value each period with changes recognized in "Other operating expense." The fair value of the contingent consideration liability as of October 3, 2020 was equal to the maximum amount payable of $10.0 million, which is included in "Accrued liabilities." See Note 6 for further information related to the fair value measurement.

During the six months ended October 3, 2020, the Company recognized a decrease to goodwill of approximately $0.6 million as a result of purchase price allocation adjustments. The Company will continue to evaluate certain assets, liabilities, and tax estimates over the measurement period (up to one year from the acquisition date).

Cavendish Kinetics Limited

As of September 28, 2019, the Company had an investment in preferred shares in Cavendish, ~~Kinetics Limited (“Cavendish”),~~ a private supplier of high-performance radio frequency ("RF") microelectromechanical system ("MEMS") technology for antenna tuning applications, with a carrying value of $59.4 million. The Company accounted for this investment as an equity investment without a readily determinable fair value using the measurement alternative in accordance with ~~Accounting Standards Update ("ASU") 2016-01.~~ASC 321, "Investments-Equity Securities."

On October 4, 2019, the Company ~~completed its acquisition of~~acquired the remaining issued and outstanding capital of Cavendish for ~~$196.8 million, net~~cash consideration of ~~cash acquired.~~$198.4 million. The acquisition advances RF MEMS technology for applications across the Company's products and the technology will be transitioned into high-volume manufacturing for mobile devices and other markets.

The purchase of the remaining equity interest in Cavendish was considered to be an acquisition achieved in stages, whereby the previously held equity interest was remeasured at its acquisition-date fair value. The Company determined that the fair value of its previously held equity investment was $102.4 million based on the purchase consideration exchanged to acquire the remaining issued and outstanding capital of ~~Cavendish. This~~Cavendish, which resulted in recognition of a gain of $43.0 million ~~for~~in the ~~three and nine~~third quarter of fiscal 2020.

During the six months ended ~~December 28, 2019, which is recorded in "Other income (expense)" in~~October 3, 2020, the ~~Condensed Consolidated Statements~~Company recognized an increase to goodwill of ~~Income.~~

~~The total~~approximately $1.6 million and a decrease to intangibles of approximately $2.0 million as a result of purchase price of $305.9 million was allocated to Cavendish's net tangible assets (approximately $4.7 million), deferred tax liability (approximately $16.5 million) and intangible assets (approximately $206.4 million, primarily related to developed technology) based on their estimated fair values asallocation adjustments. The measurement period ended one year from the acquisition date of October 4, 2019.

The fair value of the Cavendish developed technology acquired was determined based on an income approach using the “excess earnings method,” which estimated the value of the intangible asset by discounting the future projected earnings of the asset to present value as of the valuation date. This developed technology is being amortized on a straight-line basis over its estimated useful life of 9 years.

The excess of the purchase price over the value of the net tangible assets, deferred tax liability and intangible assets resulted in goodwill of approximately $111.3 million. The Company will continue to evaluate certain assets, liabilities and tax estimates over the measurement period (up to one year from the October 4, 2019 acquisition date).

Active-Semi International, Inc.

On May 6, 2019, the Company ~~completed its acquisition~~acquired all of the outstanding equity interests of Active-Semi, ~~International, Inc. ("Active-Semi"),~~ a private fabless supplier of programmable analog power ~~solutions.~~management solutions, for a total purchase price of $307.9 million. The acquisition expanded the Company's product offerings ~~for existing customers and new customers~~ in power management markets. ~~The~~

During the six months ended October 3, 2020, the Company recognized an increase to goodwill of approximately $0.1 million in connection with finalizing the purchase price allocation. The measurement period ended one year from the acquisition date.

5. GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying amount of ~~$307.9 million was allocated to Active-Semi's~~goodwill for the six months ended October 3, 2020 are as follows (in thousands):



	Mobile Products			Infrastructure and Defense Products			Total
Balance as of March 28, 2020 (1)	$	2,005,432		$	608,842		$	2,614,274
Goodwill resulting from 7Hugs acquisition (Note 4)	18,527			—			18,527
Measurement period adjustments (Note 4)	(951		)	(508		)	(1,459		)
Foreign currency translation	8,601			0			8,601
Balance as of October 3, 2020 (1)	$	2,031,609		$	608,334		$	2,639,943

(1) The Company’s goodwill balance is presented net ~~tangible assets (approximately $18.9 million)~~of accumulated impairment losses and ~~intangible assets (approximately $158.4 million) based on their estimated fair values as~~write-offs of May 6, 2019. The more significant intangible assets acquired included developed technology of $76.7 million, customer relationships of $40.9 million and in-process research and development ("IPRD") of $40.6$621.6 million.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~The fair value of Active-Semi customer relationships acquired was determined based on an income approach using~~Goodwill is allocated to the ~~“with and without method,” in which~~reporting units that are expected to benefit from the ~~value~~synergies of the ~~asset is determined by~~business combinations generating the difference in discounted cash flows of the profitability of the Company “with” the asset and the profitability of the Company “without” the asset. These customer relationships are being amortized on a straight-line basis over their estimated useful lives of 5 years.

The fair values of the Active-Semi developed technology and IPRD acquired were determined based on an income approach using the “excess earnings method,” which estimated the values of the intangible assets by discounting the future projected earnings of the asset to present value as of the valuation date. The acquired developed technology assets are being amortized on a straight-line basis over their estimated useful lives, ranging from 5 to 9 years.

During the nine months ended December 28, 2019, $31.0 million of IPRD assets were completed, transferred to finite-lived intangible assets, and are being amortized over their estimated useful lives of 5 to 7 years. The IPRD remaining as of December 28, 2019 is expected to be completed during fiscal 2021 with remaining costs to complete of less than $2.0 million.

The excess of the purchase price over the value of the net tangible assets and intangible assets resulted in goodwill of approximately $130.6 million. The Company will continue to evaluate certain assets, liabilities and tax estimates over the measurement period (up to one year from the acquisition date).

The Company recorded postcombination compensation expense as well as other acquisition and integration related costs during the three and nine months ended December 28, 2019 of $2.1 million and $25.1 million, respectively, in "Other operating expense" in the Condensed Consolidated Statements of Income. In addition, the Company recorded acquisition and integration related costs during the three and nine months ended December 28, 2019 of $0.3 million and $4.5 million, respectively, in "Cost of goods sold" in the Condensed Consolidated Statements of Income.

~~The change in the carrying amount of goodwill resulting from the Active-Semi and Cavendish acquisitions for the nine months ended December 28, 2019, is as follows (in thousands):~~

Mobile Products Infrastructure and Defense Products Total
Balance as of March 30, 2019 $ 1,751,503
$ 422,386
$ 2,173,889
Goodwill resulting from Active-Semi acquisition —
130,648
130,648
Goodwill resulting from Cavendish acquisition 111,265
—
111,265
Balance as of December 28, 2019 $ 1,862,768
$ 553,034
$ 2,415,802
underlying goodwill.

The following summarizes information regarding the gross carrying amounts and accumulated amortization of intangible assets (in thousands):


	December 28, 2019				March 30, 2019				October 3, 2020				March 28, 2020
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Intangible assets:
Developed technology	$	1,077,872	$	602,536	$	1,246,335	$	960,793	$	1,269,772	$	665,442	$	1,325,472	$	652,400
Customer relationships	426,872		327,829		1,272,725		1,161,735		458,150		380,121		463,772		346,799
Technology licenses									2,271		1,706		3,271		2,327
Backlog									1,600		1,067		1,600		267
Trade names	200		200		29,391		29,391		1,000		333		1,200		283
Technology licenses	3,490		2,162		14,704		13,026
Non-compete agreement	—		—		1,026		1,026
IPRD	19,600		N/A		10,000		N/A
In-process research and development									9,600		N/A		9,600		N/A
Foreign currency translation									21,802		961		6,064		11
Total	$	1,528,034	$	932,727	$	2,574,181	$	2,165,971	$	1,764,195	$	1,049,630	$	1,810,979	$	1,002,087

InAt the ~~first quarter~~beginning of each fiscal year, the Company removes the ~~fully amortized balances from the~~ gross asset and accumulated amortization amounts of ~~those~~ intangible assets that ~~were~~have reached the end of their useful lives and have been fully ~~amortized as of~~amortized. Useful lives are estimated based on expected economic benefit to be derived from the ~~prior fiscal year end.~~intangible assets.

Total intangible assets amortization expense was $72.4 million and $144.5 million for the three and six months ended October 3, 2020, respectively, and $56.4 million and $114.8 million for the three and six months ended September 28, 2019, respectively.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Total intangible assets amortization expense was $63.1 million and $177.9 million, respectively, for the three and nine months ended December 28, 2019, and $132.5 million and $399.2 million, respectively, for the three and nine months ended December 29, 2018.

~~Based on the identified intangible assets as of December 28, 2019, the Company's estimated amortization expense for each period is as follows (in thousands):~~

Fiscal Year
Estimated
Amortization
Expense
2020 $ 240,000
2021 206,000
2022 79,000
2023 63,000
2024 53,000

56. INVESTMENTS AND FAIR VALUE ~~MEASUREMENTS~~OF FINANCIAL INSTRUMENTS

~~Recurring~~Equity Method Investments

The Company invests in limited partnerships which are accounted for using the equity method. The carrying amounts of these investments as of October 3, 2020 and March 28, 2020 were $29.8 million and $14.2 million, respectively, and are classified as “Long-term investments” in the Condensed Consolidated Balance Sheets. During the three and six months ended October 3, 2020, the Company recorded $0.1 million of expense and $15.6 million of income, respectively, based on its share of the limited partnerships' earnings. These amounts are included in “Other income (expense), net” in the Condensed Consolidated Statements of Income.

Equity Investments Without a Readily Determinable Fair Value ~~Measurements~~

During the fourth quarter of fiscal 2020, the Company recorded an impairment of $18.3 million on an equity investment without a readily determinable fair value based on observable price changes present at the time. During the first quarter of fiscal 2021, the Company recorded an additional impairment of $2.8 million to fully impair this investment. This amount is recorded in “Other income (expense), net” in the Condensed Consolidated Statement of Income.

Fair Value of Financial Instruments

The fair value of the financial assets and liabilities measured ~~at fair value~~ on a recurring basis was determined using the following levels of inputs as of ~~December 28, 2019~~October 3, 2020 and March ~~30, 2019~~28, 2020 (in thousands):

Total Quoted Prices In
Active Markets For
Identical Assets
(Level 1) Significant Other
Observable Inputs
(Level 2)
December 28, 2019
Assets
Marketable equity securities $ 879
$ 879
$ —

Invested funds in deferred compensation plan (1)

23,255
23,255
—
Total assets measured at fair value $ 24,134
$ 24,134
$ —
Liabilities

Deferred compensation plan obligation (1)
$ 23,255
$ 23,255
$ —
Total liabilities measured at fair value $ 23,255
$ 23,255
$ —

March 30, 2019
Assets
Money market funds $ 13
$ 13
$ —
Marketable equity securities 901
901
—

Auction rate securities (2)

1,950
—
1,950

Invested funds in deferred compensation plan (1)

18,737
18,737
—
Total assets measured at fair value $ 21,601
$ 19,651
$ 1,950
Liabilities

Deferred compensation plan obligation (1)
$ 18,737
$ 18,737
$ —
Total liabilities measured at fair value $ 18,737
$ 18,737
$ —



				Total		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
October 3, 2020
	Assets
		Marketable equity securities		$	282	$	282	$	0	$	0
		Invested funds in deferred compensation plan (1)		26,316		26,316		0		0
			Total assets measured at fair value	$	26,598	$	26,598	$	0	$	0
	Liabilities
		Deferred compensation plan obligation (1)		$	26,316	$	26,316	$	0	$	0
		Contingent earn-out liability (2)		10,000		0		0		10,000
			Total liabilities measured at fair value	$	36,316	$	26,316	$	0	$	10,000

March 28, 2020
	Assets
		Marketable equity securities		$	459	$	459	$	0	$	0
		Invested funds in deferred compensation plan (1)		19,398		19,398		0		0
			Total assets measured at fair value	$	19,857	$	19,857	$	0	$	0
	Liabilities
		Deferred compensation plan obligation (1)		$	19,398	$	19,398	$	0	$	0
		Contingent earn-out liability (2)		5,700		0		0		5,700
			Total liabilities measured at fair value	$	25,098	$	19,398	$	0	$	5,700

(1) The Company's non-qualified deferred compensation plan provides eligible employees and members of the Board of Directors with the opportunity to defer a specified percentage of their cash compensation. The Company includes the assets deferred by the participants in the “Other current assets” and “Other non-current assets” line items of its Condensed Consolidated Balance Sheets and the Company's obligation to deliver the deferred compensation in the ~~"Other~~“Other current ~~liabilities"~~liabilities” and “Other long-term liabilities” line items of its Condensed Consolidated Balance Sheets.

(2) The Company recorded a contingent earn-out liability in conjunction with the Custom MMIC acquisition. The fair value of this liability is estimated using an option pricing model and is remeasured to fair value each period with changes in fair value reported in “Other operating

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

(2) The Company's Level 2 auction rate securities were debt instruments with interest rates that reset through periodic short-term auctions and were valued based on quoted prices for identical or similar instruments in markets that were not active. During the first quarter of fiscal 2020, the Company sold its auction rate securities at par value.

~~As of December 28, 2019 and March 30, 2019, the Company did not have any Level 3 assets or liabilities.~~

~~Equity Investment Without a Readily Determinable Fair Value~~

On October 4, 2019, the Company completed its acquisition of the remaining issued and outstanding capital of Cavendish. Prior to the acquisition date, the Company had accounted for its investment in Cavendish as an equity investment without a readily determinable fair value and the investment was classified in "Long-term investments" in the Condensed Consolidated Balance Sheets. See Note 4 ~~for disclosures related to the acquisition of Cavendish.~~

~~Fair Value of Financial Instruments~~

Marketable securities are measured at fair value and recorded in "Cash and cash equivalents," "Other current assets" and "Long-term investments" in the Condensed Consolidated Balance Sheets, and the related unrealized gains and losses are included in "Accumulated other comprehensive loss," a component of stockholders’ equity, net of tax (debt securities) and "Other income (expense)"expense” in the Condensed Consolidated Statements of ~~Income (equity securities).~~

~~Other Fair Value Disclosures~~

~~The carrying values~~ Income. As of cash and cash equivalents, accounts receivable, accounts payable and other accrued liabilities approximate fair values because of the relatively short-term maturities of these instruments. See Note 7 for further disclosures related toOctober 3, 2020, the fair value of the ~~Company's debt.~~contingent consideration liability was equal to the maximum amount payable of $10.0 million. NaN payments have been made for the contingent liability as the earn-out assessment period is still ongoing. Any anticipated payments are expected to be settled during the first quarter of fiscal 2022.

7. LONG-TERM DEBT

Long-term debt as of October 3, 2020 and March 28, 2020 is as follows (in thousands):



	October 3, 2020			March 28, 2020
Term loan	$	200,000		$	100,000
7.00% senior notes due 2025	23,404			23,404
5.50% senior notes due 2026 (1)	900,000			900,000
4.375% senior notes due 2029	850,000			550,000
3.375% senior notes due 2031	700,000			0
Finance leases	1,606			2,252
Unamortized premium and issuance costs, net	(5,528		)	(1,532		)
Less current portion of long-term debt (1)	(905,086		)	(6,893		)
Total long-term debt	$	1,764,396		$	1,567,231

6~~. LEASES~~

~~The~~(1) On October 16, 2020, the Company ~~leases~~completed the redemption of all of its outstanding 5.50% senior notes due 2026. As of October 3, 2020, the outstanding principal balance is included in "Current portion of long-term debt" in the Condensed Consolidated Balance Sheet (see below and Note 15 for additional information).

Credit Agreement

On September 29, 2020, the Company and certain of its ~~corporate, manufacturing~~U.S. subsidiaries (the “Guarantors”) entered into a five-year unsecured senior credit facility pursuant to a credit agreement (the "2020 Credit Agreement") with Bank of America, N.A. acting as administrative agent (the “Administrative Agent”) and ~~other facilities from multiple third-party real estate developers.~~a syndicate of lenders. The ~~Company also leases various machinery~~2020 Credit Agreement amended and ~~office equipment. These operating leases expire at various dates through 2036, and some~~restated the previous credit agreement dated as of ~~these leases have renewal options, with the longest ranging~~December 5, 2017 (the “2017 Credit Agreement”). The 2020 Credit Agreement includes a senior term loan (the "2020 Term Loan") of up to ~~two, ten-year periods.~~$200.0 million and a senior revolving line of credit (the "Revolving Facility") of up to $300.0 million (collectively the “Credit Facility”).

~~The Company determines that a contract contains a lease at lease inception if~~On the ~~contract conveys~~closing date of the ~~right to control the use of an identified asset for a period of time in exchange for consideration. In evaluating whether the right to control an identified asset exists,~~2020 Credit Agreement, the Company ~~assesses whether it has~~repaid the ~~right to direct the use~~remaining principal balance of ~~the identified asset and obtain substantially all of the economic benefit from the use of the identified asset.~~

~~Right-of-use assets and liabilities are recognized at the lease commencement date based~~$97.5 million on the ~~present value of lease payments over~~term loan under the ~~lease term. The Company uses its estimated incremental borrowing rate in determining~~2017 Credit Agreement (the “2017 Term Loan”) and concurrently drew $200.0 million under the ~~present value of lease payments considering~~2020 Term Loan. Interest paid on the term of the lease, which is derived from information available at the lease commencement date. 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.

~~The components of lease expense for operating leases for~~2017 Term Loan during the three and ~~nine~~six months ended ~~December 28, 2019,~~October 3, 2020 was $0.4 million and $0.8 million, respectively.

Pursuant to the 2020 Credit Agreement, the Company may request one or more additional tranches of term loans or increases to the Revolving Facility, up to an aggregate of $500.0 million and subject to securing additional funding commitments from the existing or new lenders. The Revolving Facility includes a $25.0 million sublimit for the issuance of standby letters of credit and a $10.0 million sublimit for swing line loans. The Credit Facility is available to finance working capital, capital expenditures and other general corporate purposes. Outstanding amounts are due in full on the maturity date of September 29, 2025, subject to scheduled amortization of the 2020 Term Loan principal prior to the maturity date as ~~follows:~~

December 28, 2019
Three Months Ended Nine Months Ended
Operating lease expense $ 3,698
$ 11,115
Short-term lease expense 1,911
5,063
Variable lease expense 734
2,329
Total lease expense $ 6,343
$ 18,507

set forth in the 2020 Credit Agreement. During the six months ended October 3, 2020, there were 0 borrowings under the Revolving Facility.

At the Company’s option, loans under the 2020 Credit Agreement will bear interest at (i) the Applicable Rate (as defined in the 2020 Credit Agreement) plus the Eurodollar Rate (as defined in the 2020 Credit Agreement) or (ii) the Applicable Rate plus a rate equal to the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate as set by the Administrative Agent, and (c) the Eurodollar Rate plus 1.0% (the “Base Rate”). All swing line loans will bear interest at a rate equal to the Applicable Rate plus the Base Rate. The Eurodollar Rate is the rate per annum equal to the reserve adjusted London Interbank Offered Rate (or a comparable or successor rate), for dollar deposits for interest periods of one, two, three or six months, as selected by the Company. The Applicable Rate for Eurodollar Rate loans ranges from 1.000% per annum to 1.250% per annum and is set at 1.125% per annum until the delivery of the Company’s first compliance certificate to the lenders following the fiscal quarter ending January 2, 2021. The Applicable Rate for Base Rate loans ranges from 0.000% per annum to 0.250% per annum, and is set at 0.125% per annum until the delivery of the Company’s first compliance certificate to the lenders following the fiscal

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~Supplemental cash information and non-cash activities related~~quarter ending January 2, 2021. Undrawn amounts under the Credit Facility are subject to ~~operating leases are as follows (in thousands):~~

Nine Months Ended
December 28, 2019
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases $ 12,172

Non-cash activities:
Operating lease assets obtained in exchange for new lease liabilities $ 3,559

~~Supplemental balance sheet information related~~a commitment fee ranging from 0.150% to ~~operating leases~~0.200%. Interest for Eurodollar Rate loans is ~~as follows (in thousands):~~

   Classification on the Condensed Consolidated Balance Sheet December 28, 2019
Assets
Operating lease assets Other non-current assets $ 58,965

Liabilities
Operating lease current liabilities    Other current liabilities $ 13,268
Operating lease non-current liabilities    Other long-term liabilities $ 55,004

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



	~~December 28, 2019~~
~~Weighted-average remaining lease term (years) - operating leases~~	~~8.26~~
~~Weighted-average discount rate - operating leases~~	~~4.22~~	%

~~Maturities~~payable at the end of ~~lease liabilities under operating leases by fiscal year as of December 28, 2019 are as follows (in thousands):~~

2020 $ 7,685
2021 14,661
2022 11,485
2023 8,526
2024 7,005
Thereafter 31,272
Total lease payments 80,634
Less imputed interest (12,362 )
Present value of lease liabilities $ 68,272

each applicable interest period or at three-month intervals if such interest period exceeds three months. Interest for Base Rate loans is payable quarterly in arrears.

~~QORVO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

~~7. DEBT~~

~~Long-term debt as~~The 2020 Credit Agreement contains various conditions, covenants and representations with which the Company must be in compliance in order to borrow funds and to avoid an event of ~~December 28, 2019 and March 30, 2019 is as follows (in thousands):~~

December 28, 2019 March 30, 2019
Term loan $ 100,000
$ —
7.00% senior notes due 2025 23,404
23,404
5.50% senior notes due 2026 900,000
900,000
4.375% senior notes due 2029 550,000
—
Finance leases 1,951
1,745
Less unamortized premium and issuance costs (1,499 ) (4,134 )
Less current portion of long-term debt (5,302 ) (80 )
Total long-term debt $ 1,568,554
$ 920,935

default. As of October 3, 2020, the Company was in compliance with these covenants.

Senior Notes due ~~2023 and~~ 2025

On November 19, 2015, the Company issued ~~$450.0 million aggregate principal amount of its 6.75% senior notes due December 1, 2023 (the "2023 Notes") and~~ $550.0 million aggregate principal amount of its 7.00% senior notes due December 1, 2025 (the ~~"2025 Notes"~~“2025 Notes”). ~~The 2023~~Interest on the 2025 Notes ~~were,~~is payable on June 1 and ~~the~~December 1 of each year. The 2025 Notes are senior unsecured obligations of the Company and guaranteed, jointly and severally, by ~~certain of~~ the ~~Company's U.S. subsidiaries (the "Guarantors").~~Guarantors. The ~~2023 Notes and the~~ 2025 Notes were issued pursuant to an indenture dated as of November 19, 2015 (the ~~"2015 Indenture"~~“2015 Indenture”), by and among the Company, the Guarantors and MUFG Union Bank, N.A., as trustee. The 2015 Indenture contains customary events of default, including payment default, failure to provide certain notices and certain provisions related to bankruptcy events.

In fiscal years 2018 and 2019, the Company retired ~~all of the issued and outstanding 2023 Notes and~~ $526.6 million of the 2025 Notes. During the three and nine months ended December 29, 2018, the Company recognized a loss on debt extinguishment of $1.8 million and $84.0 million, respectively, as "Other expense" in the Condensed Consolidated Statements of Income in connection with certain purchases of these notes. As of ~~December 28, 2019,~~October 3, 2020, an aggregate principal amount of $23.4 million of the 2025 Notes remained outstanding.

~~With respect to the 2023 Notes,~~The Company paid 0 interest was payable on June 1 and December 1 of each year at a rate of 6.75% per annum, and with respect to the 2025 Notes, interest is payable on June 1 and December 1 of each year at a rate of 7.00% per annum. Interest paid on the 2025 Notes during the three and nine months ended December 28, 2019 was $0.8 million and $1.6 million, respectively. Interest paid on the 2025 Notes during the three months ended ~~December 29, 2018 was $4.0~~October 3, 2020 and September 28, 2019, and paid interest of $0.8 million ~~and interest paid~~ on the ~~2023 Notes and~~ 2025 Notes during each of the ~~nine~~six months ended ~~December 29, 2018 was $45.5 million.~~October 3, 2020 and September 28, 2019.

Senior Notes due 2026

On July 16, 2018, the Company issued $500.0 million aggregate principal amount of its 5.50% senior notes due July 15, 2026 (the “Initial 2026 Notes”). On August 28, 2018 and March 5, 2019, the Company issued an additional $130.0 million and $270.0 million, respectively, aggregate principal amount of such notes (together, the ~~"Additional~~“Additional 2026 ~~Notes"~~Notes” and together with the Initial 2026 Notes, the ~~"2026 Notes"~~“2026 Notes”). ~~The~~Interest is payable on the 2026 Notes ~~will mature~~ on January 15 and July 15 ~~2026, unless earlier redeemed in accordance with their terms.~~of each year. The 2026 Notes are senior unsecured obligations of the Company and are initially guaranteed, jointly and severally, by the Guarantors.

The Initial 2026 Notes were issued pursuant to an indenture, dated as of July 16, 2018, by and among the Company, the Guarantors and MUFG Union Bank, N.A., as trustee, and the Additional 2026 Notes were issued pursuant to supplemental indentures, dated as of August 28, 2018 and March 5, 2019 ~~respectively~~ (such indenture and supplemental indentures, collectively, the ~~"2018 Indenture"~~“2018 Indenture”). The 2018 Indenture contains customary events of default, including payment default, exchange default, failure to provide certain notices thereunder and certain provisions related to bankruptcy events and also contains customary negative covenants.

InDuring the three and six months ended October 3, 2020 and September 28, 2019, interest paid on the 2026 Notes was $24.8 million.

During the three months ended October 3, 2020, in connection with the ~~offerings~~offering of the 2031 Notes (as defined below), the Company delivered to MUFG Union Bank, N.A., as trustee, a Notice of Redemption for all of the outstanding 2026 Notes, at a cash redemption price to be calculated as provided in the 2026 Notes, plus accrued and unpaid interest, to the redemption date of October 16, 2020.

On October 16, 2020, the Company completed the redemption of the 2026 Notes at a redemption price equal to 106.363% of the ~~Company agreed to provide~~principal amount, plus accrued and unpaid interest. The 2026 Notes were redeemed using proceeds from the ~~holders~~recent issuance of the 2031 Notes (as defined below) combined with cash on hand plus borrowings under the 2020 Term Loan.

The principal balance of the 2026 Notes ~~with an opportunity~~was reclassified as of October 3, 2020 from "Long-term debt" to ~~exchange~~"Current portion of long-term debt" in the ~~2026 Notes for registered notes having terms substantially identical~~Condensed Consolidated Balance Sheet due to the ~~2026 Notes. On June~~Company's intention to retire the obligation soon after the balance sheet date.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

25, 2019, the Company completed the exchange offer, in which all of the privately placed 2026 Notes were exchanged for new notes that have been registered under the Securities Act of 1933, as amended (the "Securities Act").

Interest is payable on the 2026 Notes on January 15 and July 15 of each year at a rate of 5.50% per annum. The Company paid no interest on the 2026 Notes during the three months ended December 28, 2019 and paid interest of $24.8 million on the 2026 Notes during the nine months ended December 28, 2019.

Senior Notes due 2029

On September 30, 2019, the Company issued $350.0 million aggregate principal amount of its 4.375% senior notes due 2029 (the “Initial 2029 Notes”). On December 20, 2019 and June 11, 2020, the Company issued an additional $200.0 million and $300.0 million, respectively, aggregate principal amount of such notes ~~(the "Additional~~(together, the “Additional 2029 ~~Notes"~~Notes” and together with the Initial 2029 Notes, the ~~"2029 Notes"~~“2029 Notes”). Interest is payable on the 2029 Notes on April 15 and October 15 of each year. The 2029 Notes will mature on October 15, 2029, unless earlier redeemed in accordance with their terms. The 2029 Notes are senior unsecured obligations of the Company and are initially guaranteed, jointly and severally, by ~~each of~~ the Guarantors.

The Initial 2029 Notes were issued pursuant to an indenture, dated as of September 30, 2019, by and among the Company, the Guarantors and MUFG Union Bank, N.A., as trustee, and the Additional 2029 Notes were issued pursuant to a supplemental ~~indenture,~~indentures, dated as of December 20, 2019 and June 11, 2020 (such indenture and supplemental ~~indenture, together,~~indentures, collectively, the ~~"2019 Indenture"~~“2019 Indenture”). The 2019 Indenture contains customary events of default, including payment default, exchange default, failure to provide certain notices thereunder and certain provisions related to bankruptcy ~~events.~~ events and also contains customary negative covenants.

In connection with the offerings of the 2029 Notes, the Company agreed to provide the holders of the 2029 Notes with an opportunity to exchange the 2029 Notes for registered notes having terms substantially identical to the 2029 Notes. On August 28, 2020, the Company completed the exchange offer, in which substantially all of the privately placed 2029 Notes were exchanged for new notes that have been registered under the Securities Act of 1933, as amended (the “Securities Act”).

The ~~2019~~Company paid 0 interest on the 2029 Notes during the three months ended October 3, 2020 and paid interest of $13.0 million on the 2029 Notes during the six months ended October 3, 2020.

Senior Notes due 2031

On September 29, 2020, the Company issued $700.0 million aggregate principal amount of its 3.375% senior notes due 2031 (the “2031 Notes”). Interest is payable on the 2031 Notes on April 1 and October 1 of each year, commencing April 1, 2021. The 2031 Notes will mature on April 1, 2031, unless earlier redeemed in accordance with their terms. The 2031 Notes are senior unsecured obligations of the Company and are initially guaranteed, jointly and severally, by the Guarantors.

The 2031 Notes were sold in a private offering to certain institutions that then resold the 2031 Notes in the United States to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act, and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The Company used the net proceeds of the offering of the 2031 Notes, together with the 2020 Term Loan and cash on hand, to redeem all of the outstanding 2026 Notes as described above.

The 2031 Notes were issued pursuant to an indenture, dated as of September 29, 2020, by and among the Company, the Guarantors and MUFG Union Bank, N.A., as trustee (the “2020 Indenture”). The 2020 Indenture contains customary events of default, including payment default, failure to provide certain notices thereunder and certain provisions related to bankruptcy events and also contains customary negative covenants.

The ~~2029~~2031 Notes have not been and will not be registered under the Securities Act, or any state securities laws, and ~~unless so registered,~~ may not be offered or sold in the United States absent ~~registration or~~ an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws.

In connection with the offering of the Initial 2029 Notes, the Company entered into a registration rights agreement, dated as of September 30, 2019, by and among the Company and the Guarantors, on the one hand, and BofA Securities, Inc., as representative of the initial purchasers of the Initial 2029 Notes, on the other hand, and a substantially similar agreement, dated as of December 20, 2019, with respect to the Additional 2029 Notes (together, the "Registration Rights Agreements").

Under the Registration Rights Agreements, the Company and the Guarantors have agreed to use their commercially reasonable efforts to (i) file with the SEC a registration statement (the “Exchange Offer Registration Statement”) relating to the registered exchange offer (the “Exchange Offer”) to exchange the 2029 Notes for a new series of the Company’s exchange notes having terms substantially identical in all material respects to, and in the same aggregate principal amount as, the 2029 Notes; (ii) cause the Exchange Offer Registration Statement to be declared effective by the SEC; and (iii) cause the Exchange Offer to be consummated no later than the 360th day after September 30, 2019 (or if such 360th day is not a business day, the next succeeding business day). The Company and the Guarantors have also agreed to use their commercially reasonable efforts to cause the Exchange Offer Registration Statement to be effective continuously and keep the Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to consummate the Exchange Offer.

Under certain circumstances, the Company and the Guarantors have agreed to use their commercially reasonable efforts to (i) file a shelf registration statement relating to the resale of the 2029 Notes as promptly as practicable, and (ii) cause the shelf registration statement to be declared effective by the SEC as promptly as practicable. The Company and the Guarantors have also agreed to use their commercially reasonable efforts to keep the shelf registration statement continuously effective until one year after its effective date (or such shorter period that will terminate when all the 2029 Notes covered thereby have been sold pursuant thereto).

If the Company fails to meet any of these targets, the annual interest rate on the 2029 Notes will increase by 0.25% during the 90-day period following the default, and will increase by an additional 0.25% for each subsequent 90-day period during which the default continues, up to a maximum additional interest rate of 1.00% per year. If the Company cures the default, the interest rate on the 2029 Notes will revert to the original level.

~~Interest is payable on the 2029 Notes on April 15 and October 15 of each year at a rate of 4.375% per annum, commencing April 15, 2020.~~

~~QORVO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

~~Credit Agreement~~

On December 5, 2017, the Company and the Guarantors entered into a five-year unsecured senior credit facility pursuant to a credit agreement with Bank of America, N.A., as administrative agent (in such capacity, the “Administrative Agent”), swing line lender and L/C issuer, and a syndicate of lenders (the "Credit Agreement"). The Credit Agreement included a senior delayed draw term loan of up to $400.0 million (the "Term Loan") and a $300.0 million senior revolving line of credit (the "Revolving Facility"). In addition, the Company may request one or more additional tranches of term loans or increases in the Revolving Facility, up to an aggregate of $300.0 million and subject to securing additional funding commitments from the existing or new lenders (the “Incremental Facility,” together with the Term Loan and the Revolving Facility, the “Credit Facility”). On the closing date, $100.0 million of the Term Loan was funded (and subsequently repaid in March 2018). On June 17, 2019, the Company drew $100.0 million of the Term Loan. The delayed draw availability period for the remaining $200.0 million of the Term Loan expired on December 31, 2019. The Revolving Facility includes a $25.0 million sublimit for the issuance of standby letters of credit and a $10.0 million sublimit for swing line loans. The Credit Facility is available to finance working capital, capital expenditures and other corporate purposes. Outstanding amounts are due in full on the maturity date of December 5, 2022 (with amounts borrowed under the swingline option due in full no later than ten business days after such loan is made), subject to scheduled amortization of the Term Loan principal as set forth in the Credit Agreement prior to the maturity date. During the nine months ended December 28, 2019, there were 0 borrowings under the Revolving Facility. Interest paid on the Term Loan during the three and nine months ended December 28, 2019 was $0.7 million and $1.6 million, respectively.

The Credit Agreement contains various conditions, covenants and representations with which the Company must be in compliance in order to borrow funds and to avoid an event of default. As of December 28, 2019, the Company was in compliance with these covenants.

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 value of the 2025 Notes, 2026 Notes, 2029 Notes and 2031 Notes as of October 3, 2020 was $23.7 million, $956.1 million, $906.3 million, and $713.1 million, respectively (compared to a carrying value of $23.4 million, $900.0 million, $850.0 million, and $700.0 million, respectively). The estimated fair value of the 2025 Notes, 2026 Notes and the 2029 Notes as of ~~December~~March 28, ~~2019~~2020 was ~~$25.3~~$23.9 million, ~~$962.3~~$962.8 million, and ~~$576.1~~$489.5 million, respectively (compared to a carrying value of $23.4 million, $900.0 million, and $550.0 million, respectively). ~~The estimated fair value of the 2025 Notes and the 2026 Notes as of March 30, 2019 was $25.8 million and $929.3 million, respectively.~~ The Company considers its debt to be Level 2 in the fair value hierarchy. Fair values are estimated based on quoted market prices for identical or similar instruments. The 2025 Notes, 2026 Notes, 2029 Notes and ~~2029~~2031 Notes trade over the counter, and their fair values were estimated based upon the value of their last trade at the end of the period.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The 2020 Term Loan carries a variable interest rate set at current market rates, and as such, the fair value of the 2020 Term Loan approximated book value as of ~~December 28, 2019.~~October 3, 2020.

Interest Expense

During the three and ~~nine~~six months ended ~~December~~October 3, 2020, the Company recognized interest expense of $24.6 million and $44.6 million, respectively, primarily related to the 2026 Notes and the 2029 Notes, which was partially offset by interest capitalized to property and equipment of $1.1 million and $2.3 million, respectively. During the three and six months ended September 28, 2019, the Company recognized ~~$17.8~~interest expense of $14.0 million and ~~$44.3~~$27.6 million, respectively, ~~of interest expense~~primarily related to the 2025 Notes, the 2026 Notes, the 2029 Notes and the Term Loan, which was partially offset by $1.4 million and $4.4 million, respectively, of interest capitalized to property and equipment. During the three months ended December 29, 2018, the Company recognized $10.8 million of interest expense related to the 2025 Notes and the 2026 Notes, which was partially offset by ~~$1.9 million of~~ interest capitalized to property and ~~equipment. During the nine months ended December 29, 2018, the Company recognized $38.8~~equipment of $1.3 million ~~of interest expense related to the 2023 Notes, the 2025 Notes~~ and ~~the 2026 Notes, which was partially offset by $7.2~~$3.0 million, ~~of interest capitalized to property and equipment.~~respectively.

8. STOCK REPURCHASES

On October 31, 2019, the Company announced that its Board of Directors authorized a new share repurchase program to repurchase up to $1.0 billion of the Company's outstanding common stock, which included approximately $117.0 million authorized under the prior program which was terminated concurrent with the new authorization. Under this program, share repurchases are made in accordance with applicable securities laws on the open market or in privately negotiated transactions. The extent to which the Company repurchases its shares, the number of shares and the timing of any repurchases depends on general market conditions, regulatory requirements, alternative investment opportunities and other considerations. The program does not require the Company to repurchase a minimum number of shares, does not have a fixed term, and may be modified, suspended or terminated at any time without prior notice.

~~QORVO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

During the three and ~~nine~~six months ended ~~December 28, 2019,~~October 3, 2020, the Company repurchased approximately ~~1.3~~0.8 million ~~shares~~ and ~~5.1~~1.6 million shares, respectively, of its common stock for approximately ~~$125.0~~$105.0 million and ~~$390.1~~$180.0 million, respectively, under the ~~prior and~~ current share repurchase ~~programs.~~program. As of ~~December 28, 2019, $890.9~~October 3, 2020, approximately $585.9 million remained available for repurchases under the current share repurchase program.

During the three and ~~nine~~six months ended ~~December 29, 2018,~~September 28, 2019, the Company repurchased approximately 2.3 million ~~shares~~ and ~~4.6~~3.8 million shares, respectively, of its common stock for approximately ~~$152.0~~$165.0 million and ~~$338.7~~$265.1 million, respectively, under the prior share repurchase program.

9. COMMITMENTS AND CONTINGENT LIABILITIES

Legal Matters

The Company accrues a liability for legal contingencies when it believes that it is both probable that a liability has been incurred and that it can reasonably estimate the amount of the loss. The Company reviews these accruals and adjusts them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel and other relevant information. To the extent new information is obtained and the Company's views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in the Company's accrued liabilities would be recorded in the period in which such determination is made.

The Company is involved in various legal proceedings and claims that have arisen in the ordinary course of its business that have not been fully adjudicated. These actions, when finally concluded and determined, will not, in the opinion of management, have a material adverse effect upon the Company’s consolidated financial position or results of operations.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

910. REVENUE

The following table presents the Company's revenue disaggregated by geography, based on the location of the customers' headquarters (in thousands):



	Three Months Ended				Six Months Ended
	October 3, 2020		September 28, 2019		October 3, 2020		September 28, 2019
United States	$	459,416	$	452,926	$	707,661	$	720,422
China	391,011		199,945		778,233		561,088
Other Asia	102,548		78,606		160,645		148,615
Taiwan	53,350		38,044		106,679		79,033
Europe	53,967		37,177		94,525		73,138
Total revenue	$	1,060,292	$	806,698	$	1,847,743	$	1,582,296

Three Months Ended Nine Months Ended
December 28, 2019 December 29, 2018 December 28, 2019 December 29, 2018
United States $ 423,573
$ 460,525
$ 1,143,995
$ 1,153,823
China 281,024
242,454
842,112
830,727
Other Asia 80,729
54,414
229,344
168,344
Taiwan 43,156
35,143
122,189
142,038
Europe 40,591
39,794
113,729
114,511
Total revenue $ 869,073
$ 832,330
$ 2,451,369
$ 2,409,443

During the first quarter of fiscal 2020, the Company changed its presentation of net revenue based on the "sold to" address of the customer to the above presentation of net revenue based on the location of the customers' headquarters. The December 29, 2018 information above has been reclassified to reflect this change. The Company believes that the disaggregation of revenue based on the location of the customers' headquarters is more representative of how its revenue and cash flows are impacted by geographically-sensitive changes in economic factors.

The Company also disaggregates revenue by operating segments (see Note ~~11)~~12).

1011. RESTRUCTURING

~~In the third quarter of~~During fiscal 2019, the Company initiated restructuring actions to reduce operating expenses and improve its manufacturing cost structure, including the phased closure of a wafer fabrication facility in Florida and idling production at a wafer fabrication facility in Texas. As ~~of the end of the third quarter of fiscal 2020, the Company has recorded total cumulative restructuring charges of $88.1 million as~~ a result of these restructuring actions, the Company has recorded cumulative restructuring related charges totaling $92.8 million as of the end of the second quarter of fiscal 2021, including accelerated depreciation of ~~$47.2~~$47.4 million (to reflect changes in estimated useful lives of certain property and equipment), impairment charges of $15.9 million (to adjust the carrying value of certain property and equipment to reflect its fair value), employee termination benefits of ~~$13.9~~$13.6 million and other exit costs of ~~$11.1~~$15.9 million. The Company expects to record additional expenses of approximately ~~$1.0~~$0.4 million for employee termination benefits and ~~$4.0 million for~~ other exit costs as a result of these actions.

~~During fiscal 2018,~~The following table summarizes the ~~Company initiated~~ restructuring ~~actions~~charges resulting from the 2019 restructuring event (in thousands):



	Three Months Ended October 3, 2020								Three Months Ended September 28, 2019
	Cost of Goods Sold		Other Operating Expense			Total			Cost of Goods Sold		Other Operating Expense		Total
One-time employee termination benefits (1)	$	0	$	(289	)	$	(289	)	$	0	$	1,364	$	1,364
Contract termination and other associated costs	0		233			233			1,034		1,214		2,248
Accelerated depreciation	0		0			0			5,578		0		5,578
Total	$	0	$	(56	)	$	(56	)	$	6,612	$	2,578	$	9,190

	Six Months Ended October 3, 2020								Six Months Ended September 28, 2019
	Cost of Goods Sold		Other Operating Expense			Total			Cost of Goods Sold		Other Operating Expense		Total
One-time employee termination benefits (1)	$	0	$	(43	)	$	(43	)	$	0	$	4,614	$	4,614
Contract termination and other associated costs	0		858			858			2,870		3,982		6,852
Accelerated depreciation	0		0			0			21,516		0		21,516
Total	$	0	$	815		$	815		$	24,386	$	8,596	$	32,982

(1) Includes reversal due to ~~improve operating efficiencies. As~~true-up of the end of the third quarter of fiscal 2020, the Company has recorded cumulative expenses of $46.3 million, $23.3 million and $0.2 million for impairment charges, employee termination benefits and other exit costs, respectively, as a result of thesepreviously accrued restructuring ~~actions which are substantially complete.~~

~~The Company does not allocate restructuring costs to its reportable segments.~~charges.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The Company has entered into other individually immaterial restructuring plans. The Company's restructuring charges related to these plans was $0.7 million for the three and six months ended October 3, 2020 and $0.3 million and $0.4 million for the three and six months ended September 28, 2019, respectively.

The following table summarizes the ~~restructuring~~ activity ~~primarily resulting from these restructuring events:~~

Three Months Ended December 28, 2019 Three Months Ended December 29, 2018
Cost of Goods Sold Other Operating Expense Total Cost of Goods Sold Other Operating Expense Total
One-time employee termination benefits $ —
$ 1,570
$ 1,570
$ —
$ 1,302
$ 1,302
Contract termination and other associated costs 3,438
948
4,386
—
208
208
Asset impairment and accelerated depreciation
4,324
—
4,324
3,080
14,914
17,994
Total $ 7,762
$ 2,518
$ 10,280
$ 3,080
$ 16,424
$ 19,504

Nine Months Ended December 28, 2019 Nine Months Ended December 29, 2018
Cost of Goods Sold Other Operating Expense Total Cost of Goods Sold Other Operating Expense Total
One-time employee termination benefits $ —
$ 6,379
$ 6,379
$ —
$ 4,437
$ 4,437
Contract termination and other associated costs 6,308
5,163
11,471
—
385
385
Asset impairment and accelerated depreciation
25,840
—
25,840
3,080
14,914
17,994
Total $ 32,148
$ 11,542
$ 43,690
$ 3,080
$ 19,736
$ 22,816

~~The following table presents a roll-forward of~~related to the Company's restructuring liabilities for the ~~nine~~six months ended ~~December 28, 2019:~~October 3, 2020 (in thousands):


	One-Time Employee Termination Benefits			Accelerated Depreciation			Contract Termination and Other Associated Costs			Total			One-Time Employee Termination Benefits			Contract Termination and Other Associated Costs			Total
Accrued restructuring balance as of March 30, 2019	$	6,988		$	—		$	1,626		$	8,614
Accrued restructuring balance as of March 28, 2020													$	1,728		$	270		$	1,998
Costs incurred and charged to expense	6,379			25,840			11,471			43,690			539			1,008			1,547
Transfer to right-of-use asset	—			—			(1,248		)	(1,248		)
Cash payments	(6,835		)	—			(5,245		)	(12,080		)	(1,089		)	(949		)	(2,038		)
Non-cash activity	—			(25,840		)	(6,307		)	(32,147		)	0			(113		)	(113		)
Accrued restructuring balance as of December 28, 2019	$	6,532		$	—		$	297		$	6,829
Accrued restructuring balance as of October 3, 2020													$	1,178		$	216		$	1,394

~~11.~~12. OPERATING SEGMENT INFORMATION

The Company's operating and reportable segments as of ~~December 28, 2019~~October 3, 2020 are Mobile Products ~~(MP)~~("MP") and Infrastructure and Defense Products ~~(IDP)~~("IDP") based on the organizational structure and information reviewed by the Company's Chief Executive Officer, who is the Company's chief operating decision maker ("CODM"), and these segments are managed separately based on the end markets and applications they support. The CODM allocates resources and assesses the performance of each operating segment primarily based on non-GAAP operating income.

MP is a global supplier of cellular, RFUWB and Wi-Fi solutions for a variety of ~~mobile devices,~~high-volume markets, including smartphones, wearables, laptops, tablets and ~~cellular-based applications for the Internet of Things ("IoT").~~IoT applications.

IDP is a global supplier of RF, system-on-a-chip and power management solutions for ~~cellular base station,~~wireless infrastructure, defense, smart home, ~~IoT, defense~~automotive, and ~~automotive applications.~~

~~QORVO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

IoT.

The ~~“All other”~~"All other" category includes operating expenses such as stock-based compensation, amortization of intangible assets, acquisition and integration related costs, restructuring ~~costs,~~related charges, start-up costs, ~~asset impairment and~~ accelerated depreciation, gain (loss) ~~gain~~ on assets, and other miscellaneous corporate overhead expenses that the Company does not allocate to its reportable segments because these expenses are not included in the segment operating performance measures evaluated by the Company’s CODM. The CODM does not evaluate operating segments using discrete asset information. The Company’s operating segments do not record intercompany revenue. The Company does not allocate gains and losses from equity investments, interest and other income, or taxes to operating segments. Except as discussed above regarding the ~~“All other”~~"All other" category, the Company’s accounting policies for segment reporting are the same as for the Company as a whole.

The following tables present details of the Company’s operating and reportable segments and a reconciliation of the “All other” category (in thousands):

Three Months Ended Nine Months Ended
December 28,
2019 December 29,
2018 December 28,
2019 December 29,
2018
Revenue:
MP $ 662,109
$ 602,312
$ 1,841,468
$ 1,754,930
IDP 206,964
230,018
609,901
654,513
Total revenue $ 869,073
$ 832,330
$ 2,451,369
$ 2,409,443
Operating income (loss):
MP $ 219,778
$ 180,394
$ 553,144
$ 466,513
IDP 32,628
80,861
97,721
192,376
All other (99,337 ) (180,098 ) (329,803 ) (506,470 )
Operating income 153,069
81,157
321,062
152,419
Interest expense (16,900 ) (9,562 ) (41,457 ) (33,604 )
Interest income 2,874
2,814
8,112
7,788
Other income (expense) (Notes 4 & 7)
44,148
(3,520 ) 42,737
(85,007 )
Income before income taxes $ 183,191
$ 70,889
$ 330,454
$ 41,596

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)



	Three Months Ended						Six Months Ended
	October 3, 2020			September 28, 2019			October 3, 2020			September 28, 2019
Revenue:
MP	$	754,294		$	623,106		$	1,222,698		$	1,179,359
IDP	305,998			183,592			625,045			402,937
Total revenue	$	1,060,292		$	806,698		$	1,847,743		$	1,582,296
Operating income (loss):
MP	$	262,858		$	193,431		$	372,841		$	333,366
IDP	66,495			14,969			160,250			65,093
All other	(107,709		)	(95,633		)	(218,735		)	(230,466		)
Operating income	221,644			112,767			314,356			167,993
Interest expense	(23,486		)	(12,693		)	(42,335		)	(24,557		)
Interest income	1,272			2,292			2,462			5,238
Other income (expense), net	648			(300		)	22,595			(1,411		)
Income before income taxes	$	200,078		$	102,066		$	297,078		$	147,263


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	December 28, 2019			December 29, 2018			December 28, 2019			December 29, 2018			October 3, 2020			September 28, 2019			October 3, 2020			September 28, 2019
Reconciliation of “All other” category:
Stock-based compensation expense	$	(16,381	)	$	(18,624	)	$	(62,210	)	$	(58,874	)	$	(30,048	)	$	(20,876	)	$	(51,907	)	$	(45,829	)
Amortization of intangible assets	(62,910		)	(132,227		)	(177,380		)	(398,518		)	(72,147		)	(56,288		)	(144,091		)	(114,470		)
Acquisition and integration related costs	(7,226		)	(3,700		)	(37,905		)	(5,880		)	(7,259		)	(7,549		)	(19,922		)	(30,679		)
Restructuring costs	(5,956		)	(1,510		)	(17,850		)	(4,822		)
Start-up costs	(361		)	(6,791		)	(461		)	(18,035		)
Asset impairment and accelerated depreciation	(4,324		)	(17,994		)	(26,897		)	(17,994		)
Other (including (loss) gain on assets and other miscellaneous corporate overhead)	(2,179		)	748			(7,100		)	(2,347		)
Restructuring related charges													(609		)	(3,863		)	(1,547		)	(11,894		)
Accelerated depreciation													0			(6,635		)	0			(22,573		)
Other (including gain (loss) on assets, start-up costs and other miscellaneous corporate overhead)													2,354			(422		)	(1,268		)	(5,021		)
Loss from operations for “All other”	$	(99,337	)	$	(180,098	)	$	(329,803	)	$	(506,470	)	$	(107,709	)	$	(95,633	)	$	(218,735	)	$	(230,466	)

1213. INCOME TAXES

~~Income Tax Expense~~

The Company’s provision for income taxes for the three and ~~nine~~six months ended ~~December~~October 3, 2020 and September 28, 2019 ~~and December 29, 2018~~ was calculated by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss ~~(pre-~~

~~QORVO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

~~tax~~(pre-tax income or loss excluding unusual or infrequently occurring discrete items) for ~~the three and nine months ended December 28, 2019 and December 29, 2018.~~those respective periods.

The Company’s income tax expense was ~~$21.8~~$63.2 million ~~and $46.5 million, respectively,~~ for the three and ~~nine~~six months ended ~~December 28, 2019,~~October 3, 2020, and the Company’s income tax expense was ~~$1.4~~$19.0 million and ~~income tax benefit was $30.0~~$24.7 million, respectively, for the three and ~~nine~~six months ended ~~December 29, 2018, respectively.~~September 28, 2019. The Company’s effective tax rate was ~~11.9%~~31.6% and ~~14.1%~~21.3% for the three and ~~nine~~six months ended ~~December 28, 2019,~~October 3, 2020, respectively, and ~~1.9%~~18.6% and ~~(72.2)%~~16.8% for the three and ~~nine~~six months ended ~~December 29, 2018,~~September 28, 2019, respectively.

The Company's effective tax rate for the three and ~~nine~~six months ended ~~December 28, 2019~~October 3, 2020 differed from the statutory rate primarily due to tax rate differences in foreign jurisdictions, global intangible low tax income (“GILTI”), domestic tax credits generated, and discrete tax items recorded during the period. A discrete charge of $45.2 million and $35.2 million was recorded during the three and six months ended October 3, 2020, respectively. The discrete charge primarily relates to the intercompany restructuring of the Cavendish intellectual property, partially offset by discrete tax benefits recognized for stock-based compensation deductions and a retroactive incentive allowing previously non-deductible payments to be amortized. The Company's effective tax rate for the three and six months ended September 28, 2019 differed from the statutory rate primarily

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

due to tax rate differences in foreign jurisdictions, GILTI, domestic tax credits generated, foreign permanent differences, the discrete treatment of ~~postcombination~~post-combination compensation related expenses ~~related~~due to the Active-Semi ~~and Cavendish acquisitions,~~acquisition, and a discrete expense related to the Company’s change in its permanent reinvestment ~~assertion. The Company's effective tax rate~~assertion for the three and nine months ended December 29, 2018 differed from the statutory rate primarily due to tax rate differences in foreign jurisdictions, foreign permanent differences, state income taxes, domestic tax credits generated, changes in unrecognized tax benefits, GILTI, a discrete tax benefit for changes in provisional estimates related to the one-time transition tax on certain unrepatriated foreign earnings ~~of foreign subsidiaries enacted in the Tax Cuts and Jobs Act and, for the nine months ended December 29, 2018 only, a discrete tax benefit resulting from a retroactive incentive allowing~~ previously ~~non-deductible payments to be amortized.~~

~~Management has concluded that it can no longer support an assertion that certain earnings which have previously been~~ subject to U.S. federal taxation at its foreign subsidiaries are permanently reinvested. During the second quarter of fiscal 2020, the Company updated forecasts of cash balances and cash flow outside the U.S. and began to implement a more centralized approach to cash management. As a result, the Company recorded $4.0 million of discrete tax expense during the second quarter of fiscal 2020. During the third quarter of fiscal 2020, the Company recorded an additional $9.3 million of discrete deferred tax expense related to outside tax basis differences realized on the Company's investment in Cavendish. The Company had previously released in the third quarter of fiscal 2018 its permanent reinvestment assertion on its operating subsidiary in Singapore, Qorvo International Pte. Ltd.taxation.

1314. NET INCOME PER SHARE

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


	Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
	December 28, 2019		December 29, 2018		December 28, 2019		December 29, 2018		October 3, 2020		September 28, 2019		October 3, 2020		September 28, 2019
Numerator:
Numerator for basic and diluted net income per share — net income available to common stockholders	$	161,356	$	69,517	$	283,935	$	71,608	$	136,917	$	83,038	$	233,839	$	122,579
Denominator:
Denominator for basic net income per share — weighted average shares	116,129		124,308		117,436		125,437		114,328		117,294		114,388		117,945
Effect of dilutive securities:
Stock-based awards	2,326		2,534		2,276		2,923		1,849		2,135		2,007		2,251
Denominator for diluted net income per share — adjusted weighted average shares and assumed conversions	118,455		126,842		119,712		128,360		116,177		119,429		116,395		120,196
Basic net income per share	$	1.39	$	0.56	$	2.42	$	0.57	$	1.20	$	0.71	$	2.04	$	1.04
Diluted net income per share	$	1.36	$	0.55	$	2.37	$	0.56	$	1.18	$	0.70	$	2.01	$	1.02

In the computation of diluted net income per share for the three and ~~nine~~six months ended ~~December 28, 2019, less than 0.1~~October 3, 2020, approximately 0.3 million and ~~approximately~~ 0.1 million outstanding shares, respectively, were excluded because the effect of their inclusion would have been anti-dilutive. In the computation of diluted net income per share for the three and ~~nine~~six months ended

~~QORVO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

~~December 29, 2018,~~ September 28, 2019, approximately ~~0.5~~0.4 million and ~~0.3~~0.2 million outstanding shares, respectively, were excluded because the effect of their inclusion would have been anti-dilutive.

14~~. CONDENSED CONSOLIDATING FINANCIAL INFORMATION~~15. SUBSEQUENT EVENT

~~In accordance~~Prior to October 3, 2020, in connection with the ~~applicable indentures governing~~offering of the ~~2025~~2031 Notes, the Company delivered to MUFG Union Bank, N.A., as trustee, a Notice of Redemption for the $900.0 million principal balance of the 2026 Notes. On October 16, 2020, the Company completed the redemption of the 2026 Notes at a redemption price equal to 106.363% of the principal amount, plus accrued and unpaid interest, for a total cash payment of $969.8 million. The 2026 Notes were redeemed using proceeds from the ~~2029~~recent issuance of the 2031 Notes ~~the Company's obligations~~combined with cash on hand plus borrowings under the ~~2025 Notes,~~2020 Term Loan.

The principal balance of the 2026 Notes ~~and the 2029 Notes are fully and unconditionally guaranteed on a joint and several basis by each Guarantor, each~~was reclassified as of ~~which is 100% owned, directly or indirectly, by Qorvo, Inc. (the "Parent Company"). A Guarantor can be released in certain customary circumstances.~~

~~The following presents the condensed consolidating financial information separately for:~~


~~(i)~~	~~Parent Company, the issuer of the guaranteed obligations;~~


~~(ii)~~	~~Guarantor subsidiaries, on a combined basis, as specified in the applicable indenture;~~


~~(iii)~~	~~Non-guarantor subsidiaries, on a combined basis;~~


~~(iv)~~	Consolidating entries, eliminations and reclassifications representing adjustments to (a) eliminate intercompany transactions between or among the Parent Company, the Guarantor subsidiaries and the non-guarantor subsidiaries, (b) eliminate intercompany profit in inventory, (c) eliminate the investments in the Company’s subsidiaries and (d) record consolidating entries; and


~~(v)~~	~~The Company, on a consolidated basis.~~

~~Each entity~~October 3, 2020 from "Long-term debt" to "Current portion of long-term debt" in the ~~condensed consolidating financial information follows~~Condensed Consolidated Balance Sheet due to the ~~same accounting policies as described in~~Company's intention to retire the ~~consolidated financial statements, except for~~obligation soon after the use by the Parent Company and Guarantor subsidiaries of the equity method of accounting to reflect ownership interests in subsidiaries that are eliminated upon consolidation. The financial information may not necessarily be indicative of the financial position, results of operations, comprehensive (loss) income, and cash flows, had the Parent Company, Guarantor or non-guarantor subsidiaries operated as independent entities.

~~QORVO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

Condensed Consolidating Balance Sheet
December 28, 2019
(in thousands) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations and Reclassifications Consolidated
ASSETS
Current assets:
Cash and cash equivalents $ —
$ 520,845
$ 576,879
$ —
$ 1,097,724
Accounts receivable, less allowance —
57,798
352,037
—
409,835
Intercompany accounts and notes receivable —
499,432
6,319
(505,751 ) —
Inventories —
158,751
342,900
(21,766 ) 479,885
Prepaid expenses —
22,713
4,407
—
27,120
Other receivables —
1,695
14,925
—
16,620
Other current assets —
33,382
3,106
—
36,488
Total current assets —
1,294,616
1,300,573
(527,517 ) 2,067,672
Property and equipment, net —
1,041,282
232,906
4,800
1,278,988
Goodwill —
1,122,629
1,293,173
—
2,415,802
Intangible assets, net —
125,346
469,961
—
595,307
Long-term investments —
5,537
35,359
—
40,896
Long-term intercompany accounts and notes receivable —
864,935
236,904
(1,101,839 ) —
Investment in subsidiaries 6,901,231
2,819,038
—
(9,720,269 ) —
Other non-current assets 6,567
97,717
22,375
(5,821 ) 120,838
Total assets $ 6,907,798
$ 7,371,100
$ 3,591,251
$ (11,350,646 ) $ 6,519,503
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ —
$ 75,812
$ 163,368
$ —
$ 239,180
Intercompany accounts and notes payable —
6,318
499,432
(505,750 ) —
Accrued liabilities 28,794
102,294
55,177
752
187,017
Current portion of long-term debt 5,000
—
302
—
5,302
Other current liabilities —
10,354
49,352
—
59,706
Total current liabilities 33,794
194,778
767,631
(504,998 ) 491,205
Long-term debt 1,566,905
—
1,649
—
1,568,554
Long-term intercompany accounts and notes payable 967,722
134,117
—
(1,101,839 ) —
Other long-term liabilities —
112,369
31,538
(23,540 ) 120,367
Total liabilities 2,568,421
441,264
800,818
(1,630,377 ) 2,180,126
Total stockholders’ equity 4,339,377
6,929,836
2,790,433
(9,720,269 ) 4,339,377
Total liabilities and stockholders’ equity $ 6,907,798
$ 7,371,100
$ 3,591,251
$ (11,350,646 ) $ 6,519,503

~~QORVO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

Condensed Consolidating Balance Sheet
March 30, 2019
(in thousands) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations and Reclassifications Consolidated
ASSETS
Current assets:
Cash and cash equivalents $ —
$ 231,865
$ 479,170
$ —
$ 711,035
Accounts receivable, less allowance —
47,181
330,991
—
378,172
Intercompany accounts and notes receivable —
381,558
62,640
(444,198 ) —
Inventories —
173,885
359,252
(21,344 ) 511,793
Prepaid expenses —
24,087
1,679
—
25,766
Other receivables —
5,121
16,813
—
21,934
Other current assets —
33,956
2,354
(169 ) 36,141
Total current assets —
897,653
1,252,899
(465,711 ) 1,684,841
Property and equipment, net —
1,090,171
268,040
8,302
1,366,513
Goodwill —
1,122,629
1,051,260
—
2,173,889
Intangible assets, net —
214,348
193,862
—
408,210
Long-term investments —
4,969
92,817
—
97,786
Long-term intercompany accounts and notes receivable —
1,239,474
93,923
(1,333,397 ) —
Investment in subsidiaries 6,540,081
2,321,170
—
(8,861,251 ) —
Other non-current assets 17,245
46,784
28,234
(15,478 ) 76,785
Total assets $ 6,557,326
$ 6,937,198
$ 2,981,035
$ (10,667,535 ) $ 5,808,024
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ —
$ 95,089
$ 138,218
$ —
$ 233,307
Intercompany accounts and notes payable —
62,640
381,558
(444,198 ) —
Accrued liabilities 11,174
96,238
51,781
1,323
160,516
Current portion of long-term debt —
—
80
—
80
Other current liabilities —
—
41,880
(169 ) 41,711
Total current liabilities 11,174
253,967
613,517
(443,044 ) 435,614
Long-term debt 919,270
—
1,665
—
920,935
Long-term intercompany accounts and notes payable 1,267,203
66,195
—
(1,333,398 ) —
Other long-term liabilities —
76,955
45,202
(30,361 ) 91,796
Total liabilities 2,197,647
397,117
660,384
(1,806,803 ) 1,448,345
Total stockholders’ equity 4,359,679
6,540,081
2,320,651
(8,860,732 ) 4,359,679
Total liabilities and stockholders’ equity $ 6,557,326
$ 6,937,198
$ 2,981,035
$ (10,667,535 ) $ 5,808,024

~~QORVO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

Condensed Consolidating Statement of Income and Comprehensive Income
Three Months Ended December 28, 2019
(in thousands) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations and Reclassifications Consolidated
Revenue $ —
$ 246,326
$ 789,083
$ (166,336 ) $ 869,073
Cost of goods sold —
218,639
426,940
(144,617 ) 500,962
Gross profit —
27,687
362,143
(21,719 ) 368,111
Operating expenses:
Research and development 9,078
11,434
105,216
(2,877 ) 122,851
Selling, general and administrative 7,258
41,140
51,993
(19,186 ) 81,205
Other operating expense 45
7,164
3,919
(142 ) 10,986
Total operating expenses 16,381
59,738
161,128
(22,205 ) 215,042
Income (loss) from operations (16,381 ) (32,051 ) 201,015
486
153,069
Interest expense (16,691 ) (930 ) (124 ) 845
(16,900 )
Interest income —
1,337
2,381
(844 ) 2,874
Other income —
2,136
42,012
—
44,148
Income (loss) before income taxes (33,072 ) (29,508 ) 245,284
487
183,191
Income tax (expense) benefit 9,832
(10,714 ) (20,953 ) —
(21,835 )
Income in subsidiaries 184,595
224,332
—
(408,927 ) —
Net income $ 161,355
$ 184,110
$ 224,331
$ (408,440 ) $ 161,356

Comprehensive income $ 162,171
$ 184,015
$ 225,389
$ (409,404 ) $ 162,171

Condensed Consolidating Statement of Income and Comprehensive Income
Three Months Ended December 29, 2018
(in thousands) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations and Reclassifications Consolidated
Revenue $ —
$ 271,671
$ 762,484
$ (201,825 ) $ 832,330
Cost of goods sold —
225,156
447,084
(178,273 ) 493,967
Gross profit —
46,515
315,400
(23,552 ) 338,363
Operating expenses:
Research and development 8,122
10,218
94,114
(2,469 ) 109,985
Selling, general and administrative 10,327
53,131
82,581
(20,435 ) 125,604
Other operating expense 173
21,477
499
(532 ) 21,617
Total operating expenses 18,622
84,826
177,194
(23,436 ) 257,206
Income (loss) from operations (18,622 ) (38,311 ) 138,206
(116 ) 81,157
Interest expense (9,235 ) (516 ) (206 ) 395
(9,562 )
Interest income —
269
2,941
(396 ) 2,814
Other (expense) income (1,852 ) (2,566 ) 898
—
(3,520 )
Income (loss) before income taxes (29,709 ) (41,124 ) 141,839
(117 ) 70,889
Income tax (expense) benefit 6,147
(23,051 ) 15,532
—
(1,372 )
Income in subsidiaries 93,079
157,371
—
(250,450 ) —
Net income $ 69,517
$ 93,196
$ 157,371
$ (250,567 ) $ 69,517

Comprehensive income $ 68,455
$ 92,520
$ 156,974
$ (249,494 ) $ 68,455

~~QORVO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

Condensed Consolidating Statement of Income and Comprehensive Income
Nine Months Ended December 28, 2019
(in thousands) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations and Reclassifications Consolidated
Revenue $ —
�� $ 718,365
$ 2,263,778
$ (530,774 ) $ 2,451,369
Cost of goods sold —
656,503
1,270,889
(462,005 ) 1,465,387
Gross profit —
61,862
992,889
(68,769 ) 985,982
Operating expenses:
Research and development 23,080
22,963
315,937
(4,595 ) 357,385
Selling, general and administrative 39,085
136,132
147,636
(64,395 ) 258,458
Other operating expense 45
26,485
22,879
(332 ) 49,077
Total operating expenses 62,210
185,580
486,452
(69,322 ) 664,920
Income (loss) from operations (62,210 ) (123,718 ) 506,437
553
321,062
Interest expense (40,776 ) (1,999 ) (402 ) 1,720
(41,457 )
Interest income —
2,743
7,088
(1,719 ) 8,112
Other income —
2,029
40,708
—
42,737
Income (loss) before income taxes (102,986 ) (120,945 ) 553,831
554
330,454
Income tax (expense) benefit 24,997
(12,157 ) (59,359 ) —
(46,519 )
Income in subsidiaries 361,923
494,472
—
(856,395 ) —
Net income $ 283,934
$ 361,370
$ 494,472
$ (855,841 ) $ 283,935

Comprehensive income $ 283,716
$ 361,370
$ 494,222
$ (855,592 ) $ 283,716

Condensed Consolidating Statement of Income and Comprehensive Income
Nine Months Ended December 29, 2018
(in thousands) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations and Reclassifications Consolidated
Revenue $ —
$ 740,241
$ 2,214,289
$ (545,087 ) $ 2,409,443
Cost of goods sold —
622,688
1,333,037
(474,892 ) 1,480,833
Gross profit —
117,553
881,252
(70,195 ) 928,610
Operating expenses:
Research and development 21,433
20,837
300,233
(4,867 ) 337,636
Selling, general and administrative 36,998
170,011
260,359
(66,327 ) 401,041
Other operating expense 442
27,225
10,011
(164 ) 37,514
Total operating expenses 58,873
218,073
570,603
(71,358 ) 776,191
Income (loss) from operations (58,873 ) (100,520 ) 310,649
1,163
152,419
Interest expense (32,677 ) (1,575 ) (527 ) 1,175
(33,604 )
Interest income —
3,152
5,811
(1,175 ) 7,788
Other (expense) income (84,004 ) (1,440 ) 437
—
(85,007 )
Income (loss) before income taxes (175,554 ) (100,383 ) 316,370
1,163
41,596
Income tax benefit (expense) 43,521
(26,717 ) 13,208
—
30,012
Income in subsidiaries 203,641
329,578
—
(533,219 ) —
Net income $ 71,608
$ 202,478
$ 329,578
$ (532,056 ) $ 71,608

Comprehensive income $ 68,290
$ 201,891
$ 326,701
$ (528,592 ) $ 68,290

~~QORVO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

Condensed Consolidating Statement of Cash Flows
Nine Months Ended December 28, 2019
(in thousands) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations and Reclassifications Consolidated
Net cash provided by (used in) operating activities $ (279,501 ) $ 322,496
$ 688,256
$ —
$ 731,251
Investing activities:
Purchase of property and equipment —
(102,781 ) (26,223 ) —
(129,004 )
Purchase of businesses, net of cash acquired —
—
(494,783 ) —
(494,783 )
Proceeds from sale of available-for-sale debt securities —
1,950
—
—
1,950
Other investing activities —
(1,772 ) 509
—
(1,263 )
Net transactions with related parties —
28,086
—
(28,086 ) —
Net cash used in investing activities —
(74,517 ) (520,497 ) (28,086 ) (623,100 )
Financing activities:
Proceeds from borrowings and debt issuances 659,000
—
—
—
659,000
Repurchase of common stock, including transaction costs (390,117 ) —
—
—
(390,117 )
Proceeds from the issuance of common stock 37,530
—
—
—
37,530
Tax withholding paid on behalf of employees for restricted stock units (21,013 ) —
—
—
(21,013 )
Other financing activities (5,899 ) —
(353 ) —
(6,252 )
Net transactions with related parties —
41,001
(69,087 ) 28,086
—
Net cash provided by (used in) financing activities 279,501
41,001
(69,440 ) 28,086
279,148
Effect of exchange rate changes on cash —
—
(501 ) —
(501 )
Net increase in cash, cash equivalents and restricted cash —
288,980
97,818
—
386,798
Cash, cash equivalents and restricted cash at the beginning of the period —
231,865
479,517
—
711,382
Cash, cash equivalents and restricted cash at the end of the period $ —
$ 520,845
$ 577,335
$ —
$ 1,098,180

~~QORVO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

Condensed Consolidating Statement of Cash Flows
Nine Months Ended December 29, 2018
(in thousands) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations and Reclassifications Consolidated
Net cash provided by (used in) operating activities $ 691,479
$ (688,262 ) $ 619,802
$ —
$ 623,019
Investing activities:
Purchase of property and equipment —
(155,006 ) (30,621 ) —
(185,627 )
Purchase of available-for-sale debt securities —
(132,729 ) —
—
(132,729 )
Proceeds from sales and maturities of available-for-sale debt securities —
133,132
—
—
133,132
Other investing activities —
(3,829 ) (16,409 ) —
(20,238 )
Net transactions with related parties —
260,047
—
(260,047 ) —
Net cash (used in) provided by investing activities —
101,615
(47,030 ) (260,047 ) (205,462 )
Financing activities:
Repurchase of debt (977,498 ) —
—
—
(977,498 )
Proceeds from debt issuances 631,300
—
—
—
631,300
Repurchase of common stock, including transaction costs (338,675 ) —
—
—
(338,675 )
Proceeds from the issuance of common stock 25,452
—
—
—
25,452
Tax withholding paid on behalf of employees for restricted stock units (24,595 ) —
—
—
(24,595 )
Other financing activities (7,463 ) —
(47 ) —
(7,510 )
Net transactions with related parties —
1,028
(261,075 ) 260,047
—
Net cash (used in) provided by financing activities (691,479 ) 1,028
(261,122 ) 260,047
(691,526 )
Effect of exchange rate changes on cash —
—
(2,369 ) —
(2,369 )
Net (decrease) increase in cash, cash equivalents and restricted cash —
(585,619 ) 309,281
—
(276,338 )
Cash, cash equivalents and restricted cash at the beginning of the period —
629,314
297,088
—
926,402
Cash, cash equivalents and restricted cash at the end of the period $ —
$ 43,695
$ 606,369
$ —
$ 650,064

balance sheet date.

15~~. SUBSEQUENT EVENTS~~

~~Custom MMIC Design Services, Inc. Acquisition~~

On January 13, 2020, the Company entered into a definitive agreement to acquire Custom MMIC Design Services, Inc. (“Custom MMIC”) for a cash purchase price of approximately $105.0 million. Custom MMIC is a privately-held designer and supplier of high-performance monolithic microwave integrated circuits, primarily for military, aerospace, and space qualified applications and will become part of the Company’s IDP operating segment. Upon closing, the acquisition is expected to expand the Company's defense and aerospace portfolio and customer base. The Company anticipates the acquisition will be completed during the fourth quarter of fiscal 2020, subject to certain customary closing conditions.

~~Decawave Limited Acquisition~~

On January 24, 2020, the Company entered into a definitive agreement to acquire Decawave Limited (“Decawave”) for a cash purchase price of approximately $400.0 million. Decawave is a privately-held supplier of Ultra-Wideband solutions for IoT and smart consumer applications. Upon closing, the acquisition is expected to enhance the Company’s position in ultra-

~~QORVO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

accurate location-based services and expand our opportunities in mobile, automotive and industrial and consumer IoT. The Company anticipates the acquisition will be completed during the fourth quarter of fiscal 2020, subject to certain customary closing conditions.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, representations and contentions, and are not historical facts and typically are identified by use of terms such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," ~~"potential,~~

"potential," "continue" and similar words, although some forward-looking statements are expressed differently. You should be aware that the forward-looking statements included herein represent management's current judgment and expectations, but our actual results, events and performance could differ materially from those expressed or implied by forward-looking statements. We do not intend to update any of these forward-looking statements or publicly announce the results of any revisions to these forward-looking statements, other than as is required under U.S. federal securities laws. Our business is subject to numerous risks and uncertainties, including those relating to fluctuations in our operating results; our substantial dependence on developing new products and achieving design wins; our dependence on a few large customers for a substantial portion of our revenue; a loss of revenue if contracts with the United States government or defense and aerospace contractors are canceled or delayed or if defense spending is reduced; the COVID-19 pandemic, which has and will likely continue to negatively impact the global economy and disrupt normal business activities, and which may have an adverse effect on our results of operations; our dependence on third parties; risks related to sales through distributors; risks associated with the operation of our manufacturing facilities; business disruptions; poor manufacturing yields; increased inventory risks and costs due to timing of customer forecasts; our inability to effectively manage or maintain evolving relationships with platform providers; risks from international sales and operations; economic regulation in China; changes in government trade policies, including imposition of tariffs and export restrictions; our ability to implement innovative technologies; underutilization of manufacturing facilities as a result of industry overcapacity; we may not be able to borrow funds under our credit facility or secure future financing; we may not be able to generate sufficient cash to service all of our debt; restrictions imposed by the agreements governing our debt; volatility in the price of our common stock; damage to our reputation or brand; fluctuations in the amount and frequency of our stock repurchases; our recent and future acquisitions and other strategic investments including our recent acquisitions of Active-Semi International, Inc. ("Active-Semi") and Cavendish Kinetics Limited ("Cavendish") and our pending acquisitions of Custom MMIC Design Services, Inc. ("Custom MMIC") and Decawave Limited (“Decawave”), could fail to achieve financial or strategic objectives; our ability to attract, retain and motivate key employees; our reliance on our intellectual property portfolio; claims of infringement of third-party intellectual property rights; security breaches and other similar disruptions compromising our information; theft, loss or misuse of personal data by or about our employees, customers or third parties; warranty claims, product recalls and product liability; and risks associated with environmental, health and safety regulations and climate change. Many of the foregoing risks and uncertainties are, and will continue to be exacerbated by the COVID-19 pandemic and any worsening of the global business and economic environment as a result. These and other risks and uncertainties, which are described in more detail in our most recent Annual Report on Form 10-K and in other reports and statements that we file with the SEC, could cause actual results and developments to be materially different from those expressed or implied by any of these forward-looking statements.

OVERVIEW

~~Company~~

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help the reader understand the consolidated results of operations and financial condition of Qorvo. MD&A is provided as a supplement to, and should be read in conjunction with, our Condensed Consolidated Financial Statements and accompanying Notes to Condensed Consolidated Financial Statements.

~~Qorvo~~^®Qorvo® is a ~~product~~leader in the development and ~~technology leader at the forefront~~commercialization of ~~the growing global demand~~technologies and products for ~~always-on~~wireless and wired connectivity. We combine a broad portfolio of innovative radio frequency ("RF") solutions, highly differentiated semiconductor technologies, systems-level expertise and global manufacturing scale to supply a diverse ~~group~~set of customers a broad range of products that enable a more connected world.

The COVID-19 pandemic and the resulting economic downturn are affecting business conditions in ~~expanding markets,~~our industry. During the six months ended October 3, 2020, we did not encounter material disruptions to our global supply chain or operations, and we believe that our cash on hand (including from our recently issued senior notes), cash flows from operations and availability under our revolving credit facility provide us with sufficient liquidity. The duration, severity, and future impact of the COVID-19 pandemic remains highly uncertain, however, and may result in significant disruptions to our operations, including ~~smartphones~~our supply chain, as well as negative impacts to our financial condition. We will continue to monitor the implications of the COVID-19 pandemic on our business, as well as our customers' and ~~other mobile devices, defense and aerospace, Wi-Fi customer premises equipment, cellular base stations, and multiple Internet of Things ("IoT") applications including the smart home and connected car.~~suppliers' businesses.

We design, develop, manufacture and market our products to ~~leading~~ U.S. and international original equipment manufacturers and original design manufacturers in ~~the following~~two operating segments, which are also our reportable segments: Mobile Products ("MP") and Infrastructure and Defense Products ("IDP").

•

~~Mobile Products (MP)~~ - MP is a global supplier of cellular, ultra-wide band and Wi-Fi solutions for a variety of high-volume markets, including smartphones, wearables, laptops, tablets and Internet of Things ("IoT") applications.

IDP is a global supplier of RF, system-on-a-chip and power management solutions for wireless infrastructure, defense, smart home, automotive, and ~~Wi-Fi solutions for a variety of mobile devices, including smartphones, wearables, laptops, tablets and cellular-based applications for the~~ IoT.


•	~~Infrastructure and Defense Products (IDP)~~ ~~- IDP is a global supplier of RF, system-on-a-chip and power management solutions for cellular base station, smart home, IoT, defense and automotive applications.~~

~~As of December 28, 2019, our reportable segments are MP and IDP.~~ These business segments are based on the organizational structure and information reviewed by our Chief Executive Officer, who is our chief operating decision maker ("CODM"), and are managed separately based on the end markets and applications they support. The CODM allocates resources and evaluates the performance of each operating segment primarily based on non-GAAP operating income (see Note 1112 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report for additional information regarding our operating segments).

~~THIRD~~SECOND QUARTER FISCAL ~~2020~~2021 FINANCIAL HIGHLIGHTS:

Fiscal 2021 is a 53-week fiscal year during which the second fiscal quarter ended October 3, 2020 and included 14 weeks, compared to 13 weeks for the second fiscal quarter ended September 28, 2019. The first six months of fiscal 2021 ended October 3, 2020 and included 27 weeks, compared to 26 weeks for the six months ended September 28, 2019. This additional week impacts the following year-over-year results of operations.

Quarterly revenue increased ~~4.4%~~31.4% as compared to the ~~third~~second quarter of fiscal ~~2019,~~2020, primarily due to higher demand for our mobile products in support of smartphone customers ~~based~~ in China and Korea, higher ~~demand from a Korea-based customer, partially offset by lower demand from our largest end customer as well as lower~~ demand for our 5G base station products ~~as a result of trade restrictions.~~(primarily in China), and higher demand for our Wi-Fi products.

Gross margin for the ~~third~~second quarter of fiscal 2021 was 46.4% as compared to 40.1% for the second quarter of fiscal 2020, ~~was 42.4% as compared to 40.7% for the third quarter of fiscal 2019,~~ primarily due to ~~gross margin improvements related to~~overall favorable factory utilization, lower ~~intangible amortization expense~~inventory adjustments and ~~favorable changes in product mix,~~lower restructuring charges, partially offset by average selling price ~~erosion and lower factory utilization.~~erosion.

Operating income was ~~$153.1~~$221.6 million for the ~~third~~second quarter of fiscal ~~2020~~2021 as compared to ~~$81.2~~$112.8 million for the ~~third~~second quarter of fiscal ~~2019.~~2020. This increase was primarily due to ~~lower operating expenses,~~ higher revenue and higher gross ~~margin.~~margin, partially offset by higher operating expenses. Operating expenses increased primarily due to higher personnel costs and increased product development spend resulting from our recent acquisitions.

Net income per diluted share was $1.18 for the second quarter of fiscal 2021 as compared to $0.70 for the second quarter of fiscal 2020.

Capital expenditures ~~decreased to $40.7~~were $43.6 million for the ~~third~~second quarter of fiscal ~~2020~~2021 as compared to ~~$72.0~~$38.0 million for the ~~third~~second quarter of fiscal ~~2019. Our capital expenditures in the third quarter of fiscal 2020 included strategic investments in premium filter capacity and gallium nitride ("GaN") technology capabilities.~~2020.

During the ~~third~~second quarter of fiscal ~~2020,~~2021, we repurchased approximately ~~1.3~~0.8 million shares of our common stock for approximately ~~$125.0~~$105.0 million.

During the ~~third~~second quarter of fiscal ~~2020,~~2021, we completed the acquisition of ~~the remaining issued and outstanding capital of Cavendish~~7Hugs Labs S.A.S. ("7Hugs") for a total purchase price of ~~$305.9 million. On the October 4, 2019 acquisition date, our previously held equity interest was remeasured, which resulted in the recognition~~$48.7 million, including cash acquired of ~~a gain of $43.0~~$1.0 million.

During the ~~third~~second quarter of fiscal ~~2020,~~2021, we issued ~~$550.0~~$700.0 million aggregate principal amount of ~~4.375%~~3.375% senior notes due ~~2029~~2031 (the ~~"2029~~"2031 Notes").

During the second quarter of fiscal 2021, we entered into a five-year unsecured senior credit facility, which includes a senior term loan (the "2020 Term Loan") of up to $200.0 million. On the closing date, we drew the full amount of the 2020 Term Loan and concurrently repaid the $97.5 million remaining principal balance of the term loan under a previous credit facility (see Note 7 of the Notes to Condensed Consolidated Financial Statements).

Subsequent to quarter end, we completed the redemption of our 5.50% senior notes due July 15, 2026 (the "2026 Notes") at a redemption price equal to 106.363% of the principal amount of $900.0 million, plus accrued and unpaid interest (see Note 15 of the Notes to Condensed Consolidated Financial Statements).

RESULTS OF OPERATIONS

Consolidated

The following table presents a summary of our results of operations for the three and ~~nine~~six months ended ~~December 28, 2019~~October 3, 2020 and ~~December 29, 2018~~September 28, 2019 (in thousands, except percentages):


	Three Months Ended													Three Months Ended
	December 28, 2019		% of Revenue		December 29, 2018		% of Revenue		Increase (Decrease)			Percentage Change		October 3, 2020		% of Revenue		September 28, 2019		% of Revenue		Increase (Decrease)			Percentage Change
Revenue	$	869,073	100.0	%	$	832,330	100.0	%	$	36,743		4.4	%	$	1,060,292	100.0	%	$	806,698	100.0	%	$	253,594		31.4	%
Cost of goods sold	500,962		57.6		493,967		59.3		6,995			1.4		568,742		53.6		483,116		59.9		85,626			17.7
Gross profit	368,111		42.4		338,363		40.7		29,748			8.8		491,550		46.4		323,582		40.1		167,968			51.9
Research and development	122,851		14.1		109,985		13.2		12,866			11.7		156,342		14.8		115,614		14.3		40,728			35.2
Selling, general and administrative	81,205		9.4		125,604		15.1		(44,399		)	(35.3	)	109,372		10.3		88,274		10.9		21,098			23.9
Other operating expense	10,986		1.3		21,617		2.6		(10,631		)	(49.2	)	4,192		0.4		6,927		0.9		(2,735		)	(39.5	)
Operating income	$	153,069	17.6	%	$	81,157	9.8	%	$	71,912		88.6	%	$	221,644	20.9	%	$	112,767	14.0	%	$	108,877		96.6	%

	Nine Months Ended													Six Months Ended
	December 28, 2019		% of Revenue		December 29, 2018		% of Revenue		Increase (Decrease)			Percentage Change		October 3, 2020		% of Revenue		September 28, 2019		% of Revenue		Increase (Decrease)			Percentage Change
Revenue	$	2,451,369	100.0	%	$	2,409,443	100.0	%	$	41,926		1.7	%	$	1,847,743	100.0	%	$	1,582,296	100.0	%	$	265,447		16.8	%
Cost of goods sold	1,465,387		59.8		1,480,833		61.5		(15,446		)	(1.0	)	1,030,404		55.8		964,425		61.0		65,979			6.8
Gross profit	985,982		40.2		928,610		38.5		57,372			6.2		817,339		44.2		617,871		39.0		199,468			32.3
Research and development	357,385		14.6		337,636		14.0		19,749			5.8		286,413		15.5		234,534		14.8		51,879			22.1
Selling, general and administrative	258,458		10.5		401,041		16.6		(142,583		)	(35.6	)	195,976		10.6		177,253		11.2		18,723			10.6
Other operating expense	49,077		2.0		37,514		1.6		11,563			30.8		20,594		1.1		38,091		2.4		(17,497		)	(45.9	)
Operating income	$	321,062	13.1	%	$	152,419	6.3	%	$	168,643		110.6	%	$	314,356	17.0	%	$	167,993	10.6	%	$	146,363		87.1	%

Revenue increased for the three months ended ~~December 28, 2019,~~October 3, 2020 as compared to the three months ended ~~December 29, 2018,~~September 28, 2019, primarily due to higher demand for our mobile products in support of smartphone customers ~~based~~ in China and ~~higher demand from a Korea-based customer, partially offset by lower demand from our largest end customer as well as lower demand for our base station products as a result of trade restrictions.~~

~~Revenue increased for the nine months ended December 28, 2019, as compared to the nine months ended December 29, 2018, primarily due to higher demand from a Korea-based customer,~~Korea, higher demand for our mobile products from Huawei Technologies Co., Ltd. and its affiliates ("Huawei") and sales of our programmable power management products as a result of the acquisition of Active-Semi. This increase was offset by lower demand for our5G base station products ~~as a result of trade restrictions~~(primarily in China), and ~~lower~~higher demand for our Wi-Fi products.

Revenue increased for the six months ended October 3, 2020 as compared to the six months ended September 28, 2019, primarily due to higher demand for our 5G base station products (primarily in China), higher demand for our mobile products in support of smartphone customers in China and Korea, and higher demand for our Wi-Fi products, partially offset by lower shipments of our mobile products to Huawei Technologies Co., Ltd. and affiliates ("Huawei").

On May 16, 2019, ~~we suspended shipments of products to Huawei after~~ the Bureau of Industry and Security ~~("BIS")~~ of the U.S. Department of Commerce ("Commerce") added Huawei Technologies Co., Ltd. and over 100 of its affiliates to the ~~BIS's~~ Entity ~~List. Subsequently,~~List maintained by Commerce, which caused us to temporarily suspend the shipment of all products to Huawei. In August 2020, Commerce issued a final rule adding additional Huawei non-U.S. affiliates to the Entity List, confirming the expiration of a temporary general license applicable to Huawei, and amending the foreign-produced direct product rule in a manner that represents a significant expansion of its application to Huawei. While we restarted shipments to Huawei of certain products from outside the U.S. ~~of certain products~~ that ~~are~~were not subject to the Export Administration Regulations ("EAR") ~~to Huawei~~in fiscal 2020, during the second quarter of fiscal 2021, as a result of and in compliance with the ~~BIS order. We~~most recent Commerce action, we suspended shipments of products to Huawei. While we have ~~also applied for~~obtained a license to allow us to ship ~~other~~certain mobile products ~~that are subject to~~in compliance with the ~~EAR, as required by the rules governing the Entity List. Our~~most recent Commerce action, our sales to Huawei will continue to be impacted by trade restrictions.

Gross margin increased for the three months ended ~~December 28, 2019 was 42.4%,~~October 3, 2020 as compared to ~~40.7% for~~ the three months ended ~~December 29, 2018. This increase was~~September 28, 2019, primarily due to ~~gross margin improvements related to~~overall favorable factory utilization, lower ~~intangible amortization expense~~inventory adjustments and ~~favorable changes in product mix,~~lower restructuring charges, partially offset by average selling price ~~erosion and lower factory utilization.~~erosion.

Gross margin increased for the ~~nine~~six months ended ~~December 28, 2019 was 40.2%,~~October 3, 2020 as compared to ~~38.5% for~~ the ~~nine~~six months ended ~~December 29, 2018. This increase was~~September 28, 2019, primarily due to ~~lower intangible amortization expense,~~ favorable changes in product mix, overall favorable factory utilization and lower ~~manufacturing costs,~~restructuring charges, partially offset by average selling price ~~erosion, lower factory utilization and increased restructuring charges.~~erosion.

Operating Expenses

Research and development expense increased ~~$12.9 million, or 11.7%,~~for the three and six months ended October 3, 2020 as compared to the three and six months ended September 28, 2019, primarily due to higher personnel costs and increased product development spend resulting from our recent acquisitions.

Selling, general and administrative expense increased for the three and six months ended October 3, 2020 as compared to the three and six months ended September 28, 2019, primarily due to higher personnel costs and higher intangible amortization expense as a result of our recent acquisitions.

Other operating expense decreased for the three months ended ~~December 28, 2019~~October 3, 2020 as compared to the three months ended ~~December 29, 2018,~~September 28, 2019, primarily due to ~~higher personnel costs as well as~~gains realized on the ~~addition~~sale of ~~Active-Semi~~fixed assets, partially offset by increased acquisition and ~~Cavendish~~integration-related expenses. ~~Research and development~~Other operating expense ~~increased $19.7 million, or 5.8%,~~decreased for the ~~nine~~six months ended ~~December 28, 2019~~October 3, 2020 as compared to the ~~nine~~six months ended ~~December 29, 2018,~~September 28, 2019, primarily due to ~~higher personnel costs~~gains realized on the sale of fixed assets and ~~the addition of Active-Semi and Cavendish expenses.~~

Selling, general and administrative expense decreased $44.4 million, or 35.3%, for the three months ended December 28, 2019 as compared to the three months ended December 29, 2018, primarily due to lower intangible amortization, partially offset by higher personnel costs and the addition of Active-Semi expenses. Selling, general and administrative expense decreased $142.6 million, or 35.6%, for the nine months ended December 28, 2019 as compared to the nine months ended December 29, 2018, primarily due to lower intangible amortization, partially offset by higher personnel costs and the addition of Active-Semi expenses.

~~Other operating expense decreased $10.6 million for the three months ended December 28, 2019 as compared to the three months ended December 29, 2018, primarily due to~~ lower restructuring expenses and lower start-up costs as compared to the three months ended December 29, 2018, partially offset by expenses related to the acquisitions of Active-Semi and Cavendish. Other operating expense increased $11.6 million for the nine months ended December 28, 2019 as compared to the nine months ended December 29, 2018, primarily due to expenses related to the acquisitions of Active-Semi and Cavendish. These costs were partially offset by lower start-up costs and restructuring expenses as compared to the nine months ended December 29, 2018.expenses.

Segment Product Revenue, Operating Income and Operating Income as a Percentage of Revenue

Mobile Products


	Three Months Ended										Three Months Ended
(In thousands, except percentages)	December 28, 2019			December 29, 2018			Increase		Percentage Change		October 3, 2020			September 28, 2019			Increase		Percentage Change
Revenue	$	662,109		$	602,312		$	59,797	9.9	%	$	754,294		$	623,106		$	131,188	21.1	%
Operating income	219,778			180,394			39,384		21.8		262,858			193,431			69,427		35.9
Operating income as a % of revenue	33.2		%	30.0		%					34.8		%	31.0		%

	Nine Months Ended										Six Months Ended
(In thousands, except percentages)	December 28, 2019			December 29, 2018			Increase		Percentage Change		October 3, 2020			September 28, 2019			Increase		Percentage Change
Revenue	$	1,841,468		$	1,754,930		$	86,538	4.9	%	$	1,222,698		$	1,179,359		$	43,339	3.7	%
Operating income	553,144			466,513			86,631		18.6		372,841			333,366			39,475		11.8
Operating income as a % of revenue	30.0		%	26.6		%					30.5		%	28.3		%

MP revenue increased ~~$59.8 million, or 9.9%,~~ for the three months ended ~~December 28, 2019~~October 3, 2020 as compared to the three months ended ~~December 29, 2018,~~September 28, 2019, primarily due to higher demand for our mobile products in support of smartphone customers ~~based~~ in China ~~higher demand from a Korea-based customer~~ and ~~higher demand from Huawei. These increases were partially offset by lower demand from our largest end customer.~~Korea.

MP revenue increased ~~$86.5 million, or 4.9%,~~ for the ~~nine~~six months ended ~~December 28, 2019~~October 3, 2020 as compared to the ~~nine~~six months ended ~~December 29, 2018,~~September 28, 2019, primarily due to higher demand ~~from a Korea-based customer~~for our mobile products in support of smartphone customers in China and ~~higher demand from~~Korea, partially offset by lower shipments of our mobile products to Huawei.

MP operating income increased ~~$39.4 million, or 21.8%,~~ for the three months ended ~~December 28, 2019~~October 3, 2020 as compared to the three months ended ~~December 29, 2018,~~September 28, 2019, primarily due to higher revenue and higher gross ~~margin.~~margin, partially offset by higher operating expenses. Gross margin was positively impacted by higher factory utilization and favorable changes in product mix, partially offset by average selling price ~~erosion~~erosion. Operating expenses increased primarily due to higher personnel costs and ~~lower factory utilization.~~increased product development spend as a result of recent acquisitions.

MP operating income increased ~~$86.6 million, or 18.6%,~~ for the ~~nine~~six months ended ~~December 28, 2019~~October 3, 2020 as compared to the ~~nine~~six months ended ~~December 29, 2018,~~September 28, 2019, primarily due to higher gross margin and higher ~~revenue.~~revenue, partially offset by higher operating expenses. Gross margin was positively impacted by favorable changes in product mix and lower manufacturing costs, partially offset by average selling price ~~erosion~~erosion. Operating expenses increased primarily due to higher personnel costs and ~~lower factory utilization.~~increased product development spend as a result of recent acquisitions.

Infrastructure and Defense Products


	Three Months Ended											Three Months Ended
(In thousands, except percentages)	December 28, 2019			December 29, 2018			Decrease			Percentage Change		October 3, 2020			September 28, 2019			Increase		Percentage Change
Revenue	$	206,964		$	230,018		$	(23,054	)	(10.0	)%	$	305,998		$	183,592		$	122,406	66.7	%
Operating income	32,628			80,861			(48,233		)	(59.6	)	66,495			14,969			51,526		344.2
Operating income as a % of revenue	15.8		%	35.2		%						21.7		%	8.2		%

	Nine Months Ended											Six Months Ended
(In thousands, except percentages)	December 28, 2019			December 29, 2018			Decrease			Percentage Change		October 3, 2020			September 28, 2019			Increase		Percentage Change
Revenue	$	609,901		$	654,513		$	(44,612	)	(6.8	)%	$	625,045		$	402,937		$	222,108	55.1	%
Operating income	97,721			192,376			(94,655		)	(49.2	)	160,250			65,093			95,157		146.2
Operating income as a % of revenue	16.0		%	29.4		%						25.6		%	16.2		%

IDP revenue ~~decreased $23.1 million, or 10.0%,~~increased for the three and six months ended ~~December 28, 2019~~October 3, 2020 as compared to the three and six months ended ~~December 29, 2018,~~September 28, 2019, primarily due to ~~lower demand for our base station products as a result of trade restrictions, partially offset by~~ higher demand for our ~~defense and aerospace products as well as sales of our programmable power management products as a result of the acquisition of Active-Semi.~~

~~IDP revenue decreased $44.6 million, or 6.8%, for the nine months ended December 28, 2019 as compared to the nine months ended December 29, 2018, primarily due to lower demand for our~~5G base station products ~~as a result of trade restrictions~~(primarily in China), and ~~lower~~higher demand for our Wi-Fi ~~products, partially offset by sales of our programmable power management products as a result of the acquisition of Active-Semi.~~products.

IDP operating income ~~decreased $48.2 million, or 59.6%,~~increased for the three and six months ended ~~December 28, 2019~~October 3, 2020 as compared to the three and six months ended ~~December 29, 2018,~~September 28, 2019, primarily due to higher ~~operating expenses, lower~~revenue and higher gross margin, partially offset by higher operating expenses. Gross margin was positively impacted by higher factory utilization and lower ~~revenue. The increase~~inventory adjustments, partially offset by unfavorable changes in ~~operating~~product mix. Operating expenses ~~was~~increased primarily due to higher personnel costs and ~~the addition~~increased product development spend as a result of ~~Active-Semi expenses. Gross margin was negatively impacted by lower factory utilization, unfavorable changes in product mix and inventory charges.~~recent acquisitions.

IDP operating income decreased $94.7 million, or 49.2%, for the nine months ended December 28, 2019 as compared to the nine months ended December 29, 2018, primarily due to higher operating expenses, lower gross margin and lower revenue. The increase in operating expenses was primarily due to higher personnel costs and the addition of Active-Semi expenses. Gross margin was negatively impacted by lower factory utilization, inventory charges and average selling price erosion.

See Note 1112 of the Notes to Condensed Consolidated Financial Statements for a reconciliation of segment operating income to the consolidated operating income for the three and ~~nine~~six months ended ~~December~~October 3, 2020 and September 28, ~~2019 and December 29, 2018.~~2019.

INTEREST, OTHER INCOME (EXPENSE) ~~INCOME~~ AND INCOME TAXES


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
(In thousands)	December 28, 2019			December 29, 2018			December 28, 2019			December 29, 2018			October 3, 2020			September 28, 2019			October 3, 2020			September 28, 2019
Interest expense	$	(16,900	)	$	(9,562	)	$	(41,457	)	$	(33,604	)	$	(23,486	)	$	(12,693	)	$	(42,335	)	$	(24,557	)
Interest income	2,874			2,814			8,112			7,788			1,272			2,292			2,462			5,238
Other income (expense)	44,148			(3,520		)	42,737			(85,007		)
Income tax (expense) benefit	(21,835		)	(1,372		)	(46,519		)	30,012
Other income (expense), net													648			(300		)	22,595			(1,411		)
Income tax expense													(63,161		)	(19,028		)	(63,239		)	(24,684		)

Interest ~~Expense~~expense

During the three and ~~nine~~six months ended ~~December~~October 3, 2020, we recorded interest expense of $24.6 million and $44.6 million, respectively, which was partially offset by $1.1 million and $2.3 million, respectively, of capitalized interest. During the three and six months ended September 28, 2019, we recorded interest expense of ~~$18.3~~$14.0 million and ~~$45.8~~$27.6 million, respectively, ~~primarily related to the 5.50% senior notes due July 15, 2026 (the "2026 Notes") and the 2029 Notes,~~ which was partially offset by ~~$1.4~~$1.3 million and ~~$4.4~~$3.0 million, respectively, of capitalized interest.

~~During~~ Interest expense increased as a result of the ~~three months ended December 29, 2018, we recorded interest expense~~issuance of ~~$11.5 million primarily related to~~ the ~~7.00%~~4.375% senior notes due ~~December 1, 2025~~October 15, 2029 (the ~~"2025~~"2029 Notes") and the 2026 Notes, which was partially offset by $1.9 million of capitalized interest. During the nine months ended December 29, 2018, we recorded interest expense of $40.8 million primarily related to the 6.75% senior notes due December 1, 2023 (the "2023 Notes"), the 2025 Notes and the 2026 Notes, which was partially offset by $7.2 million of capitalized interest.

~~Other Income (Expense)~~

During the three and nine months ended December 28, 2019, we recorded a gain of $43.0 million related to the remeasurement of our previously held equity interest in Cavendish in connection with our purchase of the remaining issued and outstanding capital of the entity (see. See Note 47 of the Notes to Condensed Consolidated Financial Statements for ~~information regarding the Cavendish acquisition).~~ additional information.

Other income (expense), net

During the three and ~~nine~~six months ended ~~December 29, 2018,~~October 3, 2020, we recorded ~~a loss~~$0.1 million of expense and $15.6 million of income, respectively, based on ~~debt extinguishment~~our share of ~~$1.8 million and $84.0 million, respectively.~~the earnings from our investments in two limited partnerships.

Income ~~Taxes~~tax expense

Our provision for income taxes for the three and ~~nine~~six months ended ~~December~~October 3, 2020 and September 28, 2019 ~~and December 29, 2018 was~~has been calculated by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pre-tax income or loss excluding unusual or ~~infrequently occurring~~ discrete items) for those respective periods.

For the three and ~~nine~~six months ended ~~December~~October 3, 2020, we recorded income tax expense of $63.2 million, which was comprised primarily of tax expense related to international operations generating pre-tax book income, and discrete tax items recorded

during the period. The discrete tax expense items primarily relate to the intercompany restructuring of the Cavendish Kinetics Limited intellectual property, partially offset by discrete tax benefits recognized for stock-based compensation deductions and a retroactive incentive allowing previously non-deductible payments to be amortized. For the three and six months ended September 28, 2019, we recorded income tax expense of ~~$21.8~~$19.0 million and ~~$46.5~~$24.7 million, respectively, which was comprised primarily of tax expense related to international operations generating pre-tax book income and the reversal of the permanent reinvestment assertion with regards to unrepatriated foreign earnings, partially offset by a tax benefit related to domestic and international operations generating pre-tax book losses and domestic tax credits. For the three months ended December 29, 2018, we recorded income tax expense of $1.4 million, which was comprised primarily of tax expense related to international operations generating pre-tax book income, partially offset by tax benefit related to domestic and international operations generating pre-tax book losses. For the nine months ended December 29, 2018, we recorded income tax benefit of $30.0 million, which was comprised primarily of tax benefit related to domestic and international operations generating pre-tax book losses, a tax incentive granted in Singapore and adjustments in the provisional estimates required by the Tax Cuts and Jobs Act, partially offset by a tax expense related to international operations generating pre-tax book income.

A valuation allowance remained against certain domestic and foreign net deferred tax assets as it is more likely than not that the related deferred tax assets will not be realized.

LIQUIDITY AND CAPITAL RESOURCES

Cash generated by operations is our primary source of liquidity. As of ~~December 28, 2019,~~October 3, 2020, we had working capital of approximately ~~$1,576.5~~$1,585.7 million, including ~~$1,097.7~~$2,000.3 million in cash and cash equivalents, compared to working capital of approximately ~~$1,249.2~~$1,151.5 million, ~~at March 30, 2019,~~ including ~~$711.0~~$714.9 million in cash and cash ~~equivalents.~~ equivalents as of March 28, 2020.

The ~~increase in working capital was primarily due to~~cash balance at October 3, 2020 includes $700.0 million from the issuance of ~~$550.0~~the 2031 Notes which was used subsequent to quarter end (combined with cash on hand and the $200.0 million ~~aggregate~~draw under the 2020 Term Loan) to redeem the $900.0 million principal ~~amount~~balance of the ~~2029~~2026 Notes. The principal balance of the 2026 Notes was reclassified as of October 3, 2020, from "Long-term debt" to "Current portion of long-term debt" in the ~~third quarter~~Condensed Consolidated Balance Sheet due to our intention to retire the obligation soon after the balance sheet date. See Note 15 of ~~fiscal 2020 and~~ the ~~$100.0 million draw on~~Notes to Condensed Consolidated Financial Statements for additional information regarding the ~~Term Loan (as defined in “Commitments and Contingencies” below) in~~redemption of the first quarter of fiscal 2020. These increases to working capital were partially offset by the acquisition of Active-Semi in the first quarter of fiscal 2020 and the acquisition of Cavendish in the third quarter of fiscal 2020.2026 Notes.

Our ~~$1,097.7~~$2,000.3 million of total cash and cash equivalents as of ~~December 28, 2019~~October 3, 2020 includes approximately ~~$573.1~~$617.0 million held by our foreign subsidiaries, of which ~~$485.1~~$512.7 million is held by Qorvo International Pte. Ltd. in Singapore. If the undistributed earnings of our foreign subsidiaries are needed in the U.S., we may be required to pay state income and/or foreign local withholding taxes to repatriate these earnings.

Stock Repurchases

~~On October 31, 2019, we announced that our Board of Directors authorized a new share repurchase program (see Note~~ 8 ~~of the Notes to Condensed Consolidated Financial Statements for information regarding the new share repurchase program).~~ During the ~~nine~~six months ended ~~December 28, 2019,~~October 3, 2020, we repurchased approximately ~~5.1~~1.6 million shares of our common stock for approximately ~~$390.1~~$180.0 million under our ~~prior and current~~ share repurchase ~~programs.~~program. As of ~~December 28, 2019, $890.9~~October 3, 2020, approximately $585.9 million remained available for repurchases under the ~~current~~ program.

Cash Flows from Operating Activities

Operating activities for the ~~nine~~six months ended ~~December 28, 2019~~October 3, 2020 generated cash of ~~$731.3~~$495.2 million, compared to ~~$623.0~~$430.5 million for the ~~nine~~six months ended ~~December 29, 2018,~~September 28, 2019, primarily due to ~~favorable~~increased profitability, partially offset by changes in working capital driven by ~~improvements in days sales outstanding during the nine months ended December 28, 2019.~~accounts receivable.

Cash Flows from Investing Activities

Net cash used in investing activities was ~~$623.1~~$111.3 million for the ~~nine~~six months ended ~~December 28, 2019,~~October 3, 2020, compared to ~~$205.5~~$387.3 million for the ~~nine~~six months ended ~~December 29, 2018, primarily due~~September 28, 2019. During the six months ended October 3, 2020, we acquired 7Hugs for $47.7 million (net of cash acquired). During the six months ended September 28, 2019, we acquired Active-Semi International, Inc. for $299.7 million (net of cash acquired). See Note 4 of the Notes to ~~the acquisitions of Active-Semi and Cavendish.~~Condensed Consolidated Financial Statements for additional information regarding our business acquisitions.

Cash Flows from Financing Activities

Net cash provided by financing activities was ~~$279.1~~$900.4 million for the ~~nine~~six months ended ~~December 28, 2019,~~October 3, 2020, compared to $166.3 million of net cash used inby financing activities ~~of $691.5 million~~ for the ~~nine~~six months ended ~~December 29, 2018.~~September 28, 2019. During the ~~nine~~six months ended ~~December 29, 2018, cash disbursed in connection with the retirement of all of the 2023 Notes and a majority of the 2025 Notes was partially offset by cash~~October 3, 2020, we received proceeds ~~received~~ from (1) the issuance of ~~the 2026 Notes. During the nine months ended December 28, 2019, we received cash proceeds of $559.0~~an additional $300.0 million ~~from the issuance~~aggregate principal amount of the 2029 Notes, (2) the issuance of $700.0 million aggregate principal amount of the 2031 Notes, and (3) the $200.0 million draw under the 2020 Term Loan. In addition, during the six months ended October 3, 2020, we made payments of $100.0 million ~~from the draw~~ on the term loan (the "2017 Term ~~Loan.~~Loan") under our previous credit agreement dated as of December 5, 2017 (the "2017 Credit Agreement").

COMMITMENTS AND CONTINGENCIES

~~2023~~Credit AgreementOn September 29, 2020, we and certain of our U.S. subsidiaries (the “Guarantors”) entered into a five-year unsecured senior credit facility pursuant to a credit agreement (the "2020 Credit Agreement") with Bank of America, N.A.

acting as administrative agent and a syndicate of lenders. The 2020 Credit Agreement amended and restated the 2017 Credit Agreement. The 2020 Credit Agreement includes a senior term loan (the "2020 Term Loan") of up to $200.0 million and a senior revolving line of credit (the "Revolving Facility") of up to $300.0 million (collectively the “Credit Facility”).

On the closing date of the 2020 Credit Agreement, we repaid the remaining principal balance of $97.5 million on the 2017 Term Loan and concurrently drew $200.0 million under the 2020 Term Loan. Interest paid on the 2017 Term Loan during the three and six months ended October 3, 2020 was $0.4 million and $0.8 million, respectively.

Pursuant to the 2020 Credit Agreement, we may request one or more additional tranches of term loans or increases in the Revolving Facility, up to an aggregate of $500.0 million and subject to securing additional funding commitments from the existing or new lenders. The Revolving Facility includes a $25.0 million sublimit for the issuance of standby letters of credit and a $10.0 million sublimit for swing line loans. The Credit Facility is available to finance working capital, capital expenditures and other lawful corporate purposes. Outstanding amounts are due in full on the maturity date of September 29, 2025, subject to scheduled amortization of the 2020 Term Loan principal prior to the maturity date as set forth in the 2020 Credit Agreement. During the six months ended October 3, 2020, there were no borrowings under the Revolving Facility.

The 2020 Credit Agreement contains various conditions, covenants and representations with which we must be in compliance in order to borrow funds and to avoid an event of default. As of October 3, 2020, we were in compliance with these covenants.

See Note 7 of the Notes ~~and~~ to Condensed Consolidated Financial Statements for additional information regarding the 2020 Credit Agreement.

2025 Notes On November 19, 2015, we issued ~~$450.0 million aggregate principal amount of the 2023 Notes and~~ $550.0 million aggregate principal amount of our 7.00% senior notes due December 1, 2025 (the "2025 Notes"). Interest on the 2025 ~~Notes.~~Notes is payable on June 1 and December 1 of each year. The ~~2023 Notes were, and the~~ 2025 Notes are senior unsecured obligations of the Company and are guaranteed, jointly and severally, by ~~certain of our U.S. subsidiaries (the "Guarantors"). With respect to~~ the 2023 Notes, interest was payable semi-annually on June 1 and December 1 of each year at a rate of 6.75% per annum, and with respect to the 2025 Notes, interest is payable on June 1 and December 1 of each year at a rate of 7.00% per annum. Interest paid on the 2025 Notes during the three and nine months ended December 28, 2019 was $0.8 million and $1.6 million, respectively. Interest paid on the 2025 Notes during the three months ended December 29, 2018 was $4.0 million, and interest paid on the 2023 Notes and 2025 Notes during the nine months ended December 29, 2018 was $45.5 million.Guarantors.

In fiscal years 2018 and 2019, we retired ~~all of the issued and outstanding 2023 Notes and~~ $526.6 million of the 2025 Notes. As of ~~December 28, 2019,~~October 3, 2020, an aggregate principal amount of $23.4 million of the 2025 Notes remained outstanding.

See Note 7 of the Notes to Condensed Consolidated Financial Statements for additional information regarding ~~the 2023 Notes and~~ the 2025 Notes.

2026 Notes On July 16, 2018, we issued $500.0 million aggregate principal amount of the 2026 Notes. On August 28, 2018 and March 5, 2019, we ~~completed offerings of~~issued an additional $130.0 million and $270.0 million, respectively, aggregate principal amount of the 2026 Notes. ~~The 2026 Notes are senior unsecured obligations of the Company and are guaranteed, jointly and severally, by each of the Guarantors.~~ Interest on the 2026 Notes is payable on January 15 and July 15 of each year at a rate of 5.50% per annum. ~~We paid no interest on the~~The 2026 Notes ~~during~~are senior unsecured obligations of the ~~three months ended December 28, 2019~~Company and ~~paid interest~~are guaranteed, jointly and severally, by the Guarantors.

On October 16, 2020, we completed the redemption of ~~$24.8 million on~~all of the outstanding 2026 Notes ~~during~~at a redemption price equal to 106.363% of the ~~nine months ended December 28, 2019.~~principal amount of $900.0 million (plus and accrued and unpaid interest), for a total cash payment of $969.8 million.

See Note 7 of the Notes to Condensed Consolidated Financial Statements for additional information regarding the 2026 Notes.

2029 Notes On September 30, 2019, we issued $350.0 million aggregate principal amount of the 2029 Notes. On December 20, 2019 and June 11, 2020, we ~~completed an offering of~~issued an additional $200.0 million and $300.0 million, respectively, aggregate principal amount of the 2029 Notes. Interest on the 2029 Notes is payable on April 15 and October 15 of each year at a rate of 4.375% per annum. The 2029 Notes are senior unsecured obligations of the Company and are guaranteed, jointly and severally, by ~~each of~~ the Guarantors.

~~Interest on the 2029 Notes is payable on October 15 and April 15 of each year at a rate of 4.375% per annum, commencing April 15, 2020.~~

See Note 7 of the Notes to Condensed Consolidated Financial Statements for additional information regarding the 2029 Notes.

~~Credit Agreement~~2031 Notes On ~~December 5, 2017,~~September 29, 2020, we and the Guarantors entered into a five-year unsecured senior credit facility with Bank of America, N.A., as administrative agent, swing line lender, and L/C issuer, and a syndicate of lenders (the “Credit Agreement”). On the same date, in connection with the executionissued $700.0 million aggregate principal amount of the ~~Credit Agreement, we terminated our prior credit agreement, dated~~2031 Notes. Interest on the 2031 Notes is payable on April ~~7, 2015.~~

1 and October 1 of each year, commencing April 1, 2021, at a rate of 3.375% per annum. The ~~Credit Agreement included a~~2031 Notes will mature on April 1, 2031, unless earlier redeemed in accordance with their terms. The 2031 Notes are senior delayed draw term loan of up to $400.0 million (the "Term Loan") and a $300.0 million revolving line of credit (the "Revolving Facility"). In addition, we may request one or more additional tranches of term loans or increases in the Revolving Facility, up to an aggregate of $300.0 million and subject to securing additional funding commitments from the existing or new lenders (the “Incremental Facility,” together with the Term Loan and the Revolving Facility, the “Credit Facility”). On the closing date, $100.0 millionunsecured obligations of the ~~Term Loan was funded,~~Company and this amount was subsequently repaid in March 2018. On June 17, 2019, we drew $100.0 million of the Term Loan. The delayed draw availability period for the remaining $200.0 million of the Term Loan expired on December 31, 2019. The Revolving Facility includes a $25.0 million sublimit for the issuance of standby letters of credit and a $10.0 million sublimit for swing line loans. The Credit Facility is available to finance working capital, capital expenditures and other corporate purposes. Our obligations under the Credit Agreement are initially guaranteed, jointly and severally, ~~guaranteed~~ by the Guarantors. Outstanding amounts are due in full on the maturity date of December 5, 2022 (with amounts borrowed under the swing line option due in full no later than ten business days after such loan is made). During the three and nine months ended December 28, 2019, there were no borrowings under the Revolving Facility. Interest paid on the Term Loan during the three and nine months ended December 28, 2019 was $0.7 million and $1.6 million, respectively.

The Credit Agreement contains various conditions, covenants and representations with which we must be in compliance in order to borrow funds and to avoid an event of default. As of December 28, 2019, we were in compliance with all the financial covenants under the Credit Agreement.

~~See Note 7 of the Notes to Condensed Consolidated Financial Statements for additional information regarding the Credit Agreement.~~

~~Capital Commitments~~ At December 28, 2019, we had capital commitments of approximately $47.5 million primarily for projects related to GaN technology capabilities, premium filter capacity and manufacturing cost savings initiatives, as well as for equipment replacements and general corporate purposes.

~~Pending Business Acquisitions~~ On January 13, 2020, we entered into a definitive agreement to acquire Custom MMIC for a cash purchase price of approximately $105.0 million. In addition, on January 24, 2020, we entered into a definitive agreement to acquire Decawave for a cash purchase price of approximately $400.0 million.

See Note 157 of the Notes to Condensed Consolidated Financial Statements for additional information regarding the ~~pending business acquisitions.~~2031 Notes.

Capital Commitments At October 3, 2020, we had capital commitments of approximately $62.2 million primarily for projects related to manufacturing capacity, cost savings initiatives, as well as for equipment upgrades and general corporate purposes.

Future Sources of Funding Our future capital requirements may differ materially from those currently ~~anticipated~~projected and will depend on many factors, including the long-term impact of the COVID-19 pandemic on our business (including our supply chain), financial conditions, results of operations, cash flow, as well as market acceptance of and demand for our products, acquisition opportunities, technological advances and our relationships with suppliers and customers. Based on current and projected levels of cash flow from operations, coupled with our existing cash, ~~and~~ cash equivalents and our Credit Facility, we believe that we have sufficient liquidity to meet both our short-term and long-term cash requirements. However, if there is a significant decrease in demand for our products, or in the event that growth is faster than we anticipate, operating cash flows may be insufficient to meet our needs. If our existing ~~resources and~~liquidity combined with cash from operations are not sufficient to meet our future requirements or if we perceive conditions to be favorable, we may seek additional debt or equity financing. We cannot be sure that any additional ~~equity~~debt or ~~debt~~equity financing will not be dilutive to holders of our common ~~stock. Further, we cannot be sure~~stock or that additional ~~equity~~debt or ~~debt~~equity financing, if required, will be available on favorable terms, if at all.

Legal We are involved in various legal proceedings and claims that have arisen in the ordinary course of business that have not been fully adjudicated. These actions, when finally concluded and determined, will not, in the opinion of management, have a material adverse effect on our consolidated financial position or results of operations.

Taxes We are subject to income and other taxes in the United States and in numerous foreign jurisdictions. Our domestic and foreign tax liabilities are subject to the allocation of revenues and expenses in different jurisdictions. Additionally, the amount of taxes paid is subject to our interpretation of applicable tax laws in the jurisdictions in which we operate. We are subject to audits by tax authorities. While we endeavor to comply with all applicable tax laws, there can be no assurance that a governing tax authority will not have a different interpretation of the law than we do or that we will comply in all respects with applicable tax laws, which could result in additional taxes. There can be no assurance that the outcomes from tax audits will not have an adverse effect on our results of operations in the period during which the review is conducted.

SUPPLEMENTAL PARENT AND GUARANTOR FINANCIAL INFORMATION

In accordance with the indentures governing the 2025 Notes, the 2026 Notes, the 2029 Notes and the 2031 Notes (collectively, the "Notes"), our obligations under the Notes are fully and unconditionally guaranteed on a joint and several unsecured basis by the Guarantors, each of which is 100% owned, directly or indirectly, by Qorvo, Inc. ("Parent"). A Guarantor can be released in certain customary circumstances. Our other U.S. subsidiaries and our non-U.S. subsidiaries do not guarantee the Notes (such subsidiaries are referred to as the "Non-Guarantors").

The following presents summarized financial information for the Parent and the Guarantors on a combined basis as of and for the period indicated, after eliminating (i) intercompany transactions and balances among the Parent and Guarantors, and (ii) equity earnings from, and investments in, any Non-Guarantor. The summarized financial information may not necessarily be indicative of the financial position and results of operations had the combined Parent and Guarantors operated independently from the Non-Guarantors.



Summarized Balance Sheet
(in thousands)	October 3, 2020
Current assets (1)	$	2,101,975
Non-current assets	$	2,504,778

Current liabilities	$	1,147,002
Long-term liabilities (2)	$	1,969,916

(1) Includes current receivable from Non-Guarantors of $462.0 million.

(2) Includes non-current payable to Non-Guarantors of $83.8 million.



Summarized Statement of Income	Six Months Ended
(in thousands)	October 3, 2020
Revenue	$	786,274
Gross profit	$	364,018
Net income	$	116,083

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There have been no material changes to our market risk exposures during the ~~third~~second quarter of fiscal ~~2020~~2021. For a discussion of our exposure to market risk, refer to Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” contained in Qorvo's Annual Report on Form 10-K for the fiscal year ended March ~~30, 2019~~28, 2020.

ITEM 4. CONTROLS AND PROCEDURES.

As of the end of the period covered by this report, the Company’s management, with the participation of the Company’s Chief Executive Officer (CEO) and the Chief Financial Officer (CFO), evaluated the effectiveness of the Company’s disclosure controls and procedures in accordance with Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our CEO and CFO concluded that the Company’s disclosure controls and procedures were effective, as of such date, to enable the Company to record, process, summarize and report in a timely manner the information that the Company is required to disclose in its Exchange Act reports, and to accumulate and communicate such information to management, including the Company’s CEO and the CFO, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended ~~December 28, 2019~~October 3, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Due to the ongoing COVID-19 pandemic, a significant number of our employees are now working from home. The design of our processes, systems, and controls allows for remote execution with accessibility to secure data.

PART II — OTHER INFORMATION

ITEM 1A. RISK FACTORS.

Other than the risk factor set forth below, there have been no material changes to the risk factors included in Qorvo’s Annual Report on Form 10-K for the fiscal year ended March 28, 2020. In addition to the risk factor set forth below and the other information set forth in this report and in our other reports and statements that we file with the SEC, ~~including our quarterly reports on Form 10-Q,~~ careful consideration should be given to the factors discussed in Part I, Item 1A., “Risk Factors” in Qorvo's Annual Report on Form 10-K for the fiscal year ended March ~~30, 2019,~~28, 2020, which could materially affect our business, financial condition or future results. The risks described in Qorvo's Annual Report on Form 10-K ~~for the fiscal year ended March 30, 2019~~and Quarterly Reports on Form 10-Q are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Changes in government trade policies, including the imposition of tariffs and export restrictions, have limited and could continue to limit our ability to sell our products to certain customers, which may materially adversely affect our sales and results of operations.

The U.S. or foreign governments have taken and may continue to take administrative, legislative or regulatory action that could materially interfere with our ability to sell products in certain countries, particularly in China. For example, between July 2018 and June 2019, the Office of the United States Trade Representative imposed 25% tariffs on specified product lists, including certain electronic components and equipment, totaling approximately $250 billion in Chinese imports. In response, China imposed or proposed new or higher tariffs on U.S. products. The U.S. government also imposed 15% tariffs on an additional $120 billion of Chinese imports, with China imposing retaliatory tariffs. While the imposition of these tariffs did not have a direct, material adverse impact on our business during fiscal 2020, the direct and indirect effects of tariffs and other restrictive trade policies are difficult to measure and are only one part of a larger U.S./China economic and trade policy disagreement. For example, imposition of tariffs on our customers’ products that are imported from China to the U.S. could harm sales of such products, which would harm our business. We cannot predict what further actions may ultimately be taken with respect to tariffs or trade relations between the U.S. and China or other countries, what products may be subject to such actions, or what actions may be taken by the other countries in retaliation.

Furthermore, we have experienced restrictions on our ability to sell products to certain foreign customers where sales of products require export licenses or are prohibited by government action. The U.S. government has in the past imposed export restrictions that effectively banned American companies from selling products to ZTE Corporation, one of our customers. In May 2019, the Bureau of Industry and Security of the U.S. Department of Commerce (“Commerce”) added Huawei Technologies Co., Ltd. and over 100 of its affiliates to the “Entity List” maintained by Commerce, which caused us to temporarily suspend the shipment of products to Huawei. In August 2020, Commerce issued a final rule adding additional Huawei non-U.S. affiliates to the Entity List, confirming the expiration of a temporary general license applicable to Huawei, and amending the foreign-produced direct product rule in a manner that represents a significant expansion of its application to Huawei. Huawei accounted for 10%, 15% and 8% of our total revenue during fiscal years 2020, 2019, and 2018, respectively. While we restarted shipments to Huawei of certain products from outside the U.S. that were not subject to the Export Administration Regulations (“EAR”) in fiscal 2020, during the second quarter of fiscal 2021, as a result of and in compliance with the most recent Commerce action, we suspended shipments of products to Huawei. While we have obtained a license to allow us to ship certain mobile products in compliance with the most recent Commerce action, our sales to Huawei will continue to be impacted by trade restrictions.

As of the date of this report, we are unable to predict the scope and duration of the export restrictions imposed on Huawei and the corresponding future effects on our business. Even if such restrictions are lifted, any financial or other penalties or continuing export restrictions imposed on Huawei could have a continuing negative impact on our future revenue and results of operations. In addition, Huawei or other foreign customers affected by future U.S. government sanctions or threats of sanctions may respond by developing their own solutions to replace our products or by adopting our foreign competitors’ solutions. Moreover, U.S. government actions targeting exports of certain technologies to China are becoming more pervasive. For example, in 2018, the U.S. adopted new laws designed to address concerns about the export of emerging and foundational technologies to China. In addition, in May 2019, an executive order was issued that invoked national emergency economic powers to implement a framework to regulate the acquisition or transfer of information communications technology in transactions that imposed undue national security risks. These actions could lead to additional restrictions on the export of products that include or enable certain technologies, including products we provide to China-based customers.

The loss or temporary loss of Huawei or other foreign customers or the imposition of restrictions on our ability to sell products to such customers as a result of tariffs, export restrictions or other U.S. regulatory actions could materially adversely affect our sales, business and results of operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

~~Purchases of Equity Securities~~

Period
Total number of shares purchased (in thousands)
Average price paid per share
Total number of shares purchased as part of publicly announced plans or programs (in thousands)
Approximate dollar value of shares that may yet be purchased under the plans or programs
September 29, 2019 to October 26, 2019 167
$ 75.91
167
$120.2 million
October 27, 2019 to November 23, 2019 486
$ 100.49
486
$954.3 million
November 24, 2019 to December 28, 2019 606
$ 104.81
606
$890.9 million
Total 1,259
$ 99.30
1,259
$890.9 million



Period	Total number of shares purchased (in thousands)	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs (in thousands)	Approximate dollar value of shares that may yet be purchased under the plans or programs
June 28, 2020 to August 1, 2020	175	$	110.64	175	$671.5 million
August 2, 2020 to August 29, 2020	397	$	131.59	397	$619.2 million
August 30, 2020 to October 3, 2020	265	$	126.06	265	$585.9 million
Total	837	$	125.46	837	$585.9 million

On October 31, 2019, we announced that our Board of Directors authorized a new share repurchase program to repurchase up to $1.0 billion of the Company's outstanding common stock, which included approximately $117.0 million authorized under the prior program which was terminated concurrent with the new authorization. Under this program, share repurchases ~~will be~~are made in accordance with applicable securities laws on the open market or in privately negotiated transactions. The extent to which we repurchase our shares, the number of shares and the timing of any repurchases ~~will depend~~depends on general market conditions, regulatory requirements, alternative investment opportunities and other considerations. The program does not require us to repurchase a minimum number of shares, does not have a fixed term, and may be modified, suspended or terminated at any time without prior notice.

ITEM 6. EXHIBITS.



4.1		Indenture, dated as of September ~~30, 2019,~~29, 2020, among Qorvo, Inc., the Guarantors party thereto and MUFG Union Bank, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on ~~October 1, 2019)~~September 29, 2020)

~~4.2~~10.1		~~Registration Rights~~Amended and Restated Credit Agreement, dated as of September ~~30, 2019,~~29, 2020, by and among Qorvo, Inc., as the Borrower, certain subsidiaries of the Borrower identified therein, as the Guarantors, ~~named therein and BofA Securities, Inc.~~Bank of America, N.A., as ~~representative~~Administrative Agent, Swing Line Lender and L/C Issuer, the other lenders party thereto, and Wells Fargo Bank, National Association, Citibank, N.A., TD Bank, National Association, MUFG Bank, Ltd., PNC Bank, National Association, Bank of the ~~several Initial Purchasers named therein~~West and Morgan Stanley Bank, N.A., as Co-Syndication Agents (incorporated by reference to Exhibit ~~4.2~~10.1 to the Current Report on Form 8-K filed with the SEC on ~~October 1, 2019)~~September 29, 2020)

~~4.3~~		Supplemental Indenture, dated as of December 20, 2019, among Qorvo, Inc., the Guarantors party thereto and MUFG Union Bank, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on December 20, 2019)

~~4.4~~		Registration Rights Agreement, dated as of December 20, 2019, among Qorvo, Inc., the Guarantors named therein and BofA Securities, Inc., as representative of the several Initial Purchasers named therein (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on December 20, 2019)

~~10.1~~		~~2019 Declaration of Amendment to Qorvo, Inc. 2007 Employee Stock Purchase Plan, dated as of October 30, 2019~~

~~10.2~~		~~2019 Declaration of Amendment to Qorvo, Inc. Nonqualified Deferred Compensation Plan, dated as of October 30, 2019~~

31.1		Certification of Periodic Report by Robert A. Bruggeworth, as Chief Executive Officer, pursuant to Rule 13a-14(a) or 15d-14 (a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Periodic Report by Mark J. Murphy, as Chief Financial Officer, pursuant to Rule 13a-14(a) or 15d-14 (a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Periodic Report by Robert A. Bruggeworth, as Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Periodic Report by Mark J. Murphy, as Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101		The following materials from our Quarterly Report on Form 10-Q for the quarter ended ~~December 28, 2019,~~October 3, 2020, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets as of ~~December 28, 2019~~October 3, 2020 and March ~~30, 2019;~~28, 2020; (ii) the Condensed Consolidated Statements of Income for the three and ~~nine~~six months ended ~~December~~October 3, 2020 and September 28, ~~2019 and December 29, 2018;~~2019; (iii) the Condensed Consolidated Statements of Comprehensive Income for the three and ~~nine~~six months ended ~~December~~October 3, 2020 and September 28, ~~2019 and December 29, 2018;~~2019; (iv) the Condensed Consolidated Statements of Stockholders' Equity for the three and ~~nine~~six months ended ~~December~~October 3, 2020 and September 28, ~~2019 and December 29, 2018;~~2019; (v) the Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~December~~October 3, 2020 and September 28, ~~2019 and December 29, 2018;~~2019; and (vi) the Notes to Condensed Consolidated Financial Statements

104		The cover page from our Quarterly Report on Form 10-Q for the quarter ended ~~December 28, 2019,~~October 3, 2020, formatted in iXBRL

Our SEC file number for documents filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended, is 001-36801.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		Qorvo, Inc.

Date:	~~January 30,~~November 5, 2020	/s/ Mark J. Murphy
		Mark J. Murphy
		Chief Financial Officer

4134



Fiscal Year	Estimated Amortization Expense
2020	$	240,000
2021	206,000
2022	79,000
2023	63,000
2024	53,000



	Nine Months Ended
	December 28, 2019
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	12,172

Non-cash activities:
Operating lease assets obtained in exchange for new lease liabilities	$	3,559



2020	$	7,685
2021	14,661
2022	11,485
2023	8,526
2024	7,005
Thereafter	31,272
Total lease payments	80,634
Less imputed interest	(12,362		)
Present value of lease liabilities	$	68,272



	Three Months Ended December 28, 2019						Three Months Ended December 29, 2018
	Cost of Goods Sold		Other Operating Expense		Total		Cost of Goods Sold		Other Operating Expense		Total
One-time employee termination benefits	$	—	$	1,570	$	1,570	$	—	$	1,302	$	1,302
Contract termination and other associated costs	3,438		948		4,386		—		208		208
Asset impairment and accelerated depreciation	4,324		—		4,324		3,080		14,914		17,994
Total	$	7,762	$	2,518	$	10,280	$	3,080	$	16,424	$	19,504

	Nine Months Ended December 28, 2019						Nine Months Ended December 29, 2018
	Cost of Goods Sold		Other Operating Expense		Total		Cost of Goods Sold		Other Operating Expense		Total
One-time employee termination benefits	$	—	$	6,379	$	6,379	$	—	$	4,437	$	4,437
Contract termination and other associated costs	6,308		5,163		11,471		—		385		385
Asset impairment and accelerated depreciation	25,840		—		25,840		3,080		14,914		17,994
Total	$	32,148	$	11,542	$	43,690	$	3,080	$	19,736	$	22,816



	Condensed Consolidating Balance Sheet
	December 28, 2019
(in thousands)	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations and Reclassifications			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	520,845	$	576,879	$	—		$	1,097,724
Accounts receivable, less allowance	—		57,798		352,037		—			409,835
Intercompany accounts and notes receivable	—		499,432		6,319		(505,751		)	—
Inventories	—		158,751		342,900		(21,766		)	479,885
Prepaid expenses	—		22,713		4,407		—			27,120
Other receivables	—		1,695		14,925		—			16,620
Other current assets	—		33,382		3,106		—			36,488
Total current assets	—		1,294,616		1,300,573		(527,517		)	2,067,672
Property and equipment, net	—		1,041,282		232,906		4,800			1,278,988
Goodwill	—		1,122,629		1,293,173		—			2,415,802
Intangible assets, net	—		125,346		469,961		—			595,307
Long-term investments	—		5,537		35,359		—			40,896
Long-term intercompany accounts and notes receivable	—		864,935		236,904		(1,101,839		)	—
Investment in subsidiaries	6,901,231		2,819,038		—		(9,720,269		)	—
Other non-current assets	6,567		97,717		22,375		(5,821		)	120,838
Total assets	$	6,907,798	$	7,371,100	$	3,591,251	$	(11,350,646	)	$	6,519,503
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	—	$	75,812	$	163,368	$	—		$	239,180
Intercompany accounts and notes payable	—		6,318		499,432		(505,750		)	—
Accrued liabilities	28,794		102,294		55,177		752			187,017
Current portion of long-term debt	5,000		—		302		—			5,302
Other current liabilities	—		10,354		49,352		—			59,706
Total current liabilities	33,794		194,778		767,631		(504,998		)	491,205
Long-term debt	1,566,905		—		1,649		—			1,568,554
Long-term intercompany accounts and notes payable	967,722		134,117		—		(1,101,839		)	—
Other long-term liabilities	—		112,369		31,538		(23,540		)	120,367
Total liabilities	2,568,421		441,264		800,818		(1,630,377		)	2,180,126
Total stockholders’ equity	4,339,377		6,929,836		2,790,433		(9,720,269		)	4,339,377
Total liabilities and stockholders’ equity	$	6,907,798	$	7,371,100	$	3,591,251	$	(11,350,646	)	$	6,519,503