UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



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

	For the quarterly period ended ~~December 30, 2017~~September 29, 2018
or
¨	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 offices)
(Zip Code)

(336) 664-1233
(Registrant's telephone number, including area code)

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 ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ 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 ¨
		~~(Do not check if a smaller reporting 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 24,~~October 25, 2018, there were ~~126,493,599~~124,905,033 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 30, 2017~~September 29, 2018 and ~~April 1, 2017~~March 31, 2018	3
Condensed Consolidated Statements of ~~Operations~~Income for the three and ~~nine~~six months ended ~~December~~September 29, 2018 and September 30, 2017 ~~and December 31, 2016~~	4
Condensed Consolidated Statements of Comprehensive ~~Loss~~Income (Loss) for the three and ~~nine~~six months ended ~~December~~September 29, 2018 and September 30, 2017 ~~and December 31, 2016~~	5
Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~December~~September 29, 2018 and September 30, 2017 ~~and December 31, 2016~~	6
Notes to Condensed Consolidated Financial Statements	7

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.	2426
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	3235
Item 4. Controls and Procedures.	3235

PART II — OTHER INFORMATION	3335

Item 1A. Risk Factors.	3335
Item 2. Unregistered Sales of Equity Securities and Use of ~~Proceeds~~Proceeds..	3436
Item 6. Exhibits.	3537

SIGNATURES	3638

PART I — FINANCIAL INFORMATION

ITEM 1.

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)


	December 30, 2017			April 1, 2017			September 29, 2018			March 31, 2018
ASSETS
Current assets:
Cash and cash equivalents (Note 8)	$	841,326		$	545,463
Accounts receivable, less allowance of $231 and $58 as of December 30, 2017 and April 1, 2017, respectively	448,848			357,948
Inventories (Note 4)	422,907			430,454
Cash and cash equivalents							$	557,924		$	926,037
Accounts receivable, less allowance of $177 and $134 as of September 29, 2018 and March 31, 2018, respectively							491,183			345,957
Inventories (Note 3)							474,532			472,292
Prepaid expenses	28,008			36,229			26,313			23,909
Other receivables	44,021			65,247			38,973			44,795
Other current assets	29,056			26,264			30,845			30,815
Total current assets	1,814,166			1,461,605			1,619,770			1,843,805
Property and equipment, net of accumulated depreciation of $875,942 at December 30, 2017 and $981,328 at April 1, 2017	1,417,141			1,391,932
Property and equipment, net of accumulated depreciation of $1,130,891 at September 29, 2018 and $911,910 at March 31, 2018							1,401,865			1,374,112
Goodwill	2,173,889			2,173,914			2,173,889			2,173,889
Intangible assets, net of accumulated amortization of $1,663,549 at December 30, 2017 and $1,257,665 at April 1, 2017 (Note 5)	993,629			1,400,563
Long-term investments (Note 8)	62,756			35,494
Intangible assets, net of accumulated amortization of $1,978,206 at September 29, 2018 and $1,711,520 at March 31, 2018 (Note 4)							595,852			860,336
Long-term investments (Note 5)							90,903			63,765
Other non-current assets	65,066			58,815			64,782			65,612
Total assets	$	6,526,647		$	6,522,323		$	5,947,061		$	6,381,519
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	192,046		$	216,246		$	229,009		$	213,193
Accrued liabilities	140,395			170,584			181,505			167,182
Other current liabilities	52,077			31,998			51,869			60,904
Total current liabilities	384,518			418,828			462,383			441,279
Long-term debt (Note 6)	1,088,730			989,154
Deferred tax liabilities (Note 7)	58,879			131,511
Other long-term liabilities (Note 7)	173,442			86,108
Long-term debt (Note 6 )							735,098			983,290
Deferred tax liabilities (Note 10)							21,932			63,084
Other long-term liabilities							95,511			118,302
Total liabilities	1,705,569			1,625,601			1,314,924			1,605,955
Stockholders’ equity:
Preferred stock, $.0001 par value; 5,000 shares authorized; no shares issued and outstanding	—			—			—			—
Common stock and additional paid-in capital, $.0001 par value; 405,000 shares authorized; 126,473 and 126,464 shares issued and outstanding at December 30, 2017 and April 1, 2017, respectively	5,270,428			5,357,394
Common stock and additional paid-in capital, $.0001 par value; 405,000 shares authorized; 125,046 and 126,322 shares issued and outstanding at September 29, 2018 and March 31, 2018, respectively							5,089,331			5,237,085
Accumulated other comprehensive loss, net of tax	(3,082		)	(4,306		)	(5,008		)	(2,752		)
Accumulated deficit	(446,268		)	(456,366		)	(452,186		)	(458,769		)
Total stockholders’ equity	4,821,078			4,896,722			4,632,137			4,775,564
Total liabilities and stockholders’ equity	$	6,526,647		$	6,522,323		$	5,947,061		$	6,381,519

See accompanying Notes to Condensed Consolidated Financial Statements.

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~INCOME

(In thousands, except per share data)

(Unaudited)


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	December 30, 2017			December 31, 2016			December 30, 2017			December 31, 2016			September 29, 2018			September 30, 2017			September 29, 2018			September 30, 2017
Revenue	$	845,739		$	826,347		$	2,308,153		$	2,389,582		$	884,443		$	821,583		$	1,577,113		$	1,462,414
Cost of goods sold	508,812			515,705			1,413,827			1,485,666			530,929			500,561			986,866			905,015
Gross profit	336,927			310,642			894,326			903,916			353,514			321,022			590,247			557,399
Operating expenses:
Research and development	106,411			111,951			334,308			355,166			116,748			111,398			227,651			227,897
Selling, general and administrative	126,555			130,672			404,853			412,850			139,507			138,867			275,437			278,298
Other operating expense (Note 9)	23,641			6,638			53,110			23,385
Other operating expense													6,782			21,193			15,897			29,469
Total operating expenses	256,607			249,261			792,271			791,401			263,037			271,458			518,985			535,664
Income from operations	80,320			61,381			102,055			112,515			90,477			49,564			71,262			21,735
Interest expense (Note 6)	(16,338		)	(14,464		)	(43,387		)	(45,205		)	(9,689		)	(14,778		)	(24,042		)	(27,049		)
Interest income	2,215			233			4,039			703			1,580			1,058			4,974			1,824
Other expense	(757		)	(2,609		)	(1,883		)	(3,420		)
Other expense (Note 6)													(49,532		)	(192		)	(81,487		)	(1,126		)

Income before income taxes	65,440			44,541			60,824			64,593
Income (loss) before income taxes													32,836			35,652			(29,293		)	(4,616		)

Income tax expense (Note 7)	(98,522		)	(123,179		)	(88,611		)	(137,059		)
Net loss	$	(33,082	)	$	(78,638	)	$	(27,787	)	$	(72,466	)
Income tax (expense) benefit (Note 10)													(752		)	267			31,384			9,911
Net income													$	32,084		$	35,919		$	2,091		$	5,295

Net loss per share (Note 3):
Net income per share (Note 11):
Basic	$	(0.26	)	$	(0.62	)	$	(0.22	)	$	(0.57	)	$	0.26		$	0.28		$	0.02		$	0.04
Diluted	$	(0.26	)	$	(0.62	)	$	(0.22	)	$	(0.57	)	$	0.25		$	0.27		$	0.02		$	0.04

Weighted average shares of common stock outstanding (Note 3):
Weighted average shares of common stock outstanding (Note 11):
Basic	127,034			126,852			127,084			127,313			125,643			127,257			125,859			127,109
Diluted	127,034			126,852			127,084			127,313			128,550			130,778			128,977			131,062

See accompanying Notes to Condensed Consolidated Financial Statements.

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~LOSS~~INCOME (LOSS)

(In thousands)

(Unaudited)

Three Months Ended Nine Months Ended
December 30, 2017 December 31, 2016 December 30, 2017 December 31, 2016
Net loss $ (33,082 ) $ (78,638 ) $ (27,787 ) $ (72,466 )
Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities, net of tax 57
(28 ) 156
45
Foreign currency translation adjustment, including intra-entity foreign currency transactions that are of a long-term investment nature 795
162
1,517
(596 )
Reclassification adjustments, net of tax:
Foreign currency gain included in net loss —
—
(581 ) —
Amortization of pension actuarial loss 45
42
132
130
Other comprehensive income (loss) 897
176
1,224
(421 )
Total comprehensive loss $ (32,185 ) $ (78,462 ) $ (26,563 ) $ (72,887 )



	Three Months Ended						Six Months Ended
	September 29, 2018			September 30, 2017			September 29, 2018			September 30, 2017
Net income	$	32,084		$	35,919		$	2,091		$	5,295
Other comprehensive (loss) income:
Unrealized gain on marketable securities, net of tax	85			38			90			99
Foreign currency translation adjustment, including intra-entity foreign currency transactions that are of a long-term investment nature	(181		)	106			(2,394		)	722
Reclassification adjustments, net of tax:
Foreign currency gain included in net income	—			(581		)	—			(581		)
Amortization of pension actuarial loss	24			45			48			87
Other comprehensive (loss) income	(72		)	(392		)	(2,256		)	327
Total comprehensive income (loss)	$	32,012		$	35,527		$	(165	)	$	5,622

See accompanying Notes to Condensed Consolidated Financial Statements.

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine Months Ended						Six Months Ended
	December 30, 2017			December 31, 2016			September 29, 2018			September 30, 2017
Cash flows from operating activities:
Net loss	$	(27,787	)	$	(72,466	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Net income							$	2,091		$	5,295
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	132,879			153,286			90,214			86,267
Amortization and other non-cash items	408,040			365,932
Excess tax benefit from exercises of stock options	—			(12		)
Intangible assets amortization (Note 4)							266,708			270,546
Amortization of debt issuance cost and non-cash items (Note 6)							82,539			464
Deferred income taxes	(36,657		)	(19,382		)	(42,962		)	(17,290		)
Foreign currency adjustments	3,244			3,267			(2,020		)	1,553
Loss on investments and other assets, net	10,611			444
(Income) loss on investments and other assets, net							(81		)	3,573
Stock-based compensation expense	58,299			73,291			40,250			44,584
Changes in operating assets and liabilities:
Accounts receivable, net	(91,051		)	(100,374		)	(145,874		)	(102,219		)
Inventories	6,974			19,151			556			(29,786		)
Prepaid expenses and other current and non-current assets	26,130			(2,145		)	1,589			12,157
Accounts payable and accrued liabilities	(338		)	16,742			23,980			55,620
Income tax (recoverable) / payable	94,566			86,873			(20,965		)	(4,261		)
Other liabilities	8,652			5,142			(6,229		)	(3,009		)
Net cash provided by operating activities	593,562			529,749			289,796			323,494
Investing activities:
Purchase of property and equipment	(237,658		)	(386,955		)	(113,666		)	(192,219		)
Purchase of a business, net of cash acquired	—			(118,002		)
Proceeds from maturities and sales of available-for-sale securities	—			186,793
Purchase of debt securities and other investments							(132,729		)	—
Proceeds from maturities of other investments							133,132			—
Other investing activities	(8,713		)	(5,090		)	(19,492		)	(23,028		)
Net cash used in investing activities	(246,371		)	(323,254		)	(132,755		)	(215,247		)
Financing activities:
Proceeds from debt issuances	100,000			—
Issuance costs	(1,903		)	—
Repurchase of common stock, including transaction costs	(168,935		)	(158,491		)
Payment of debt (Note 6)							(954,745		)	—
Proceeds from debt issuances (Note 6)							631,300			—
Repurchase of common stock, including transaction costs (Note 7)							(186,682		)	(88,925		)
Proceeds from the issuance of common stock	42,121			38,417			18,406			32,867
Tax withholding paid on behalf of employees for restricted stock units	(24,343		)	(15,034		)	(24,181		)	(24,005		)
Excess tax benefit from exercises of stock options	—			12
Other financing activities	—			20			(7,057		)	—
Net cash used in financing activities	(53,060		)	(135,076		)	(522,959		)	(80,063		)

Effect of exchange rate changes on cash	1,771			(1,358		)	(2,216		)	1,260
Net increase in cash, cash equivalents and restricted cash	295,902			70,061
Net (decrease) increase in cash, cash equivalents and restricted cash							(368,134		)	29,444
Cash, cash equivalents and restricted cash at the beginning of the period	545,779			426,062			926,402			545,779
Cash, cash equivalents and restricted cash at the end of the period	$	841,681		$	496,123		$	558,268		$	575,223
Non-cash investing information:
Capital expenditure adjustments included in accounts payable and accrued liabilities	$	26,743		$	59,491		$	44,634		$	30,272

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" or "Qorvo") have been prepared in conformity with accounting principles generally accepted in the United ~~States.~~States ("U.S. 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 ~~accounting principles generally accepted in the United States~~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 ~~April 1, 2017~~March 31, 2018.

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 2017 financial statements have been reclassified to conform with the fiscal 2018 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 ~~2018~~2019 and ~~2017~~2018 are 52-week years.

As of December 30, 2017 and April 1, 2017, restricted cash of $0.4 million and $0.3 million, respectively, was included in "Other current assets" and "Other non-current assets" in the Condensed Consolidated Balance Sheets.

2. ~~CHANGE IN ESTIMATE~~RECENT ACCOUNTING PRONOUNCEMENTS

~~During~~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 31, 2018.

In January 2017, the FASB issued Accounting Standards Update ("ASU") 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business." The new guidance clarifies the definition of a business and provides further guidance for evaluating whether a transaction will be accounted for as an acquisition of an asset or a business. The new standard became effective for the Company in the first quarter of fiscal ~~2018,~~2019. There was no impact to the Company's Condensed Consolidated Financial Statements.

In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the FASB’s Emerging Issues Task Force)." The new guidance addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The new standard became effective for the Company changed its accounting estimate for the expected useful lives of certain machinery and equipment. The Company evaluated its current asset base and reassessed the estimated useful lives of certain machinery and equipment in connection with its implementation of several capital projects, including the migration of certain surface acoustic wave ("SAW") processes from 4-inch to 6-inch toolsets and certain bulk acoustic wave ("BAW") processes from 6-inch to 8-inch toolsets. Based on its ability to re-use equipment across generations of process technologies and historical usage trends, the Company determined that the expected useful lives for certain machinery and equipment should be increased by up to three years to reflect more closely the estimated economic lives of those assets. This change in estimate was applied prospectively effective for the first quarter of fiscal ~~2018~~2019. The Company's historical policies were consistent with the new standard, and ~~resulted in~~therefore, there was no impact to the Company's Condensed Consolidated Financial Statements.

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." The new guidance requires lessees to recognize a ~~decrease in depreciation expense~~right-of-use asset and a lease liability for all leases with a term longer than 12 months, including those previously described as operating leases. Consistent with current U.S. GAAP, the recognition, measurement, and presentation of ~~$15.6 million~~expenses and ~~$45.4 million~~cash flows arising from a lease by a lessee will primarily depend on its classification as a finance or operating lease. The new guidance will become effective for the ~~three and nine months ended December 30, 2017, respectively. This decrease in depreciation expense for the three and nine months ended December 30, 2017, resulted~~Company in the ~~following: (1) an increase~~first quarter of fiscal 2020. The Company expects the valuation of the right-of-use assets and lease liabilities, for leases previously described as operating leases, to ~~income from operations~~be the present value of ~~$15.4 million~~its forecasted future lease commitments, as determined by the standard. The Company is continuing to assess the overall impacts of the new standard, including the discount rate to be applied in these valuations.

In January 2016, the FASB issued ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and ~~$32.7 million, respectively; (2) an increase~~Measurement of Financial Assets and Financial Liabilities." The new guidance affects the accounting for equity investments, financial liabilities measured under the fair value option and presentation and disclosure requirements for financial instruments. In addition, the FASB clarified guidance related to ~~net income~~the assessment of $14.9 million and $30.5 million, respectively; (3) an improvement to earnings per share of $0.12 and $0.24, respectively; and (4) a reduction to inventory of $0.2 million and $12.7 million, respectively.valuation allowances when recognizing deferred tax assets

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~3. NET LOSS PER SHARE~~related to unrealized losses on available-for-sale debt securities. The new standard was adopted by the Company in the first quarter of fiscal 2019. There was no impact to the Company's Condensed Consolidated Financial Statements.

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," with several amendments subsequently issued. The ~~following table sets forth~~new guidance provides an updated framework for revenue recognition, resulting in a single revenue model to be applied by reporting companies under U.S. GAAP. Under the ~~computation~~new model, recognition of ~~basic and diluted net loss per share (in thousands, except per share data):~~

Three Months Ended Nine Months Ended
December 30, 2017 December 31, 2016 December 30, 2017 December 31, 2016
Numerator:
Numerator for basic and diluted net loss per share — net loss available to common stockholders $ (33,082 ) $ (78,638 ) $ (27,787 ) $ (72,466 )
Denominator:
Denominator for basic net loss per share — weighted average shares 127,034
126,852
127,084
127,313
Effect of dilutive securities:
Stock-based awards —
—
—
—
Denominator for diluted net loss per share — adjusted weighted average shares and assumed conversions 127,034
126,852
127,084
127,313
Basic net loss per share $ (0.26 ) $ (0.62 ) $ (0.22 ) $ (0.57 )
Diluted net loss per share $ (0.26 ) $ (0.62 ) $ (0.22 ) $ (0.57 )

Inrevenue occurs when a customer obtains control of promised goods or services in an amount that reflects the ~~computation~~consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the standard in the first quarter of ~~diluted net loss per share for~~fiscal 2019 using the ~~three and nine months ended December 30, 2017, outstanding options to purchase 3.4 million shares and 3.8 million shares, respectively, were excluded because~~modified retrospective approach, under which the cumulative effect of ~~their inclusion would~~adoption is recognized at the date of initial application. This standard did not have ~~been anti-dilutive. In~~a material impact on the ~~computation~~Company's Condensed Consolidated Financial Statements. The Company has implemented changes to its accounting policies, internal controls and disclosures to support the new standard; however, these changes were not material. See Note 8 for further disclosures resulting from the adoption of diluted net loss per share for the three and nine months ended December 31, 2016, outstanding options to purchase 4.6 million shares and 4.9 million shares, respectively, were excluded because the effect of their inclusion would have been anti-dilutive.this new standard.

4.3. INVENTORIES

~~Inventories are stated at the lower of cost or net realizable value based on standard costs, which approximate actual average costs.~~ The components of inventories, net of reserves, are as follows (in thousands):


	December 30, 2017		April 1, 2017		September 29, 2018		March 31, 2018
Raw materials	$	94,975	$	92,282	$	112,227	$	110,389
Work in process	204,634		198,339		252,891		221,137
Finished goods	123,298		139,833		109,414		140,766
Total inventories	$	422,907	$	430,454	$	474,532	$	472,292

5.4. INTANGIBLE ASSETS

Total intangible assets decreased to ~~$993.6~~$595.9 million as of ~~December 30, 2017,~~September 29, 2018, compared to ~~$1,400.6~~$860.3 million as of ~~April 1, 2017.~~March 31, 2018. This decrease was ~~largely~~ due to amortization expense ~~of $406.4 million~~ for the ~~nine~~three and six months ended ~~December 30, 2017,~~September 29, 2018 of $133.4 million and $266.7 million, respectively, primarily related to developed technology and customer relationships (which had net book values of ~~$576.5~~$386.9 million and ~~$406.4~~$196.8 million respectively, as of ~~December 30, 2017)~~September 29, 2018).

~~6. DEBT~~5. INVESTMENTS AND FAIR VALUE MEASUREMENTS

~~Credit Agreement~~Debt Securities

~~On December 5, 2017,~~The following is a summary of available-for-sale debt securities as of September 29, 2018 and March 31, 2018 (in thousands):



	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
September 29, 2018
Auction rate securities	$	1,950	$	—	$	(17	)	$	1,933
March 31, 2018
Auction rate securities	$	1,950	$	—	$	(107	)	$	1,843

The estimated fair value of available-for-sale debt securities was based on the ~~Company~~prevailing market values on September 29, 2018 and certain of its material domestic subsidiaries (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”)March 31, 2018. The ~~Credit Agreement includes a senior delayed draw term loan~~Company determines the cost of ~~up to $400.0 million (the "Term Loan") and a $300.0 million senior revolving line of credit (the "Revolving Facility", together with~~an investment sold based on the ~~Term Loan, the "Credit Facility"). On the closing~~specific identification method.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~date, $100.0~~The expected maturity distribution of available-for-sale debt securities is as follows (in thousands):



	September 29, 2018				March 31, 2018
	Cost		Estimated Fair Value		Cost		Estimated Fair Value
Due in less than one year	$	—	$	—	$	—	$	—
Due after ten years	1,950		1,933		1,950		1,843
Total	$	1,950	$	1,933	$	1,950	$	1,843

Equity Investment Without a Readily Determinable Fair Value

As of September 29, 2018, the Company has invested $60.0 million to acquire preferred shares of a private limited company. This investment is classified in "Long-term investments" in the Condensed Consolidated Balance Sheets. This investment was determined to be an equity investment without a readily determinable fair value and is accounted for using the measurement alternative in accordance with ASU 2016-01. As of September 29, 2018, there was no impairment or observable price change for this investment.

Fair Value of Financial Instruments

Marketable securities are measured at fair value and recorded in "Cash and cash equivalents," "Short-term investments" 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.

Recurring Fair Value Measurements

The fair value of the ~~Term Loan~~financial assets measured at fair value on a recurring basis was ~~funded,~~determined using the following levels of inputs as of September 29, 2018 and March 31, 2018 (in thousands):



				Total		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
September 29, 2018
	Assets
		Money market funds		$	—	$	—	$	—
		Auction rate securities ("ARS") (1)		1,933		—		1,933
		Invested funds in deferred compensation plan (2)		16,472		16,472		—
			Total assets measured at fair value	$	18,405	$	16,472	$	1,933
	Liabilities
		Deferred compensation plan obligation (2)		$	16,472	$	16,472	$	—
			Total liabilities measured at fair value	$	16,472	$	16,472	$	—

March 31, 2018
	Assets
		Money market funds		$	9	$	9	$	—
		Auction rate securities (1)		1,843		—		1,843
		Invested funds in deferred compensation plan (2)		14,284		14,284		—
			Total assets measured at fair value	$	16,136	$	14,293	$	1,843
	Liabilities
		Deferred compensation plan obligation (2)		$	14,284	$	14,284	$	—
			Total liabilities measured at fair value	$	14,284	$	14,284	$	—

(1) ARS are debt instruments with interest rates that reset through periodic short-term auctions. The Company’s Level 2 ARS are valued based on quoted prices for identical or similar instruments in markets that are not active.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

(2) The Company's non-qualified deferred compensation plan provides eligible employees and members of the Board of Directors with the ~~remainder available, at~~opportunity to defer a specified percentage of their cash compensation. The Company includes the ~~discretion~~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 current liabilities" and “Other long-term liabilities” line items of its Condensed Consolidated Balance Sheets.

As of September 29, 2018 and March 31, 2018, the Company did not have any Level 3 assets or liabilities.

Other Fair Value Disclosures

The carrying values of cash and cash equivalents, accounts receivable, accounts payable and other accrued liabilities approximate fair values because of the ~~Company, in up~~relatively short-term maturities of these instruments. See Note 6 for further disclosures related to two draws within six months following the closing date. 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 Company may request, at its option and at any time, that the Credit Facility be increased by an amount not to exceed $300.0 million, subject to securing additional funding commitments from the existing or new lenders. The Credit Facility is available to finance working capital, capital expenditures and other corporate purposes. The Company’s obligations under the Credit Agreement are jointly and severally guaranteed by the Guarantors. Upon execution of the Credit Agreement, the Company terminated its prior credit agreement, dated as of April 7, 2015, as amended, with Bank of America, N.A., thus terminating and releasing the Company’s obligations and guarantees of certain of its subsidiaries under that agreement.

~~The Company had no outstanding amounts under the Revolving Facility as of December 30, 2017. The Term Loan carries a variable interest rate set at current market rates, and as such,~~ the fair value of the ~~Term Loan approximated book value~~Company's long-term debt.

6. DEBT

Long-term debt as of ~~December 30, 2017~~.September 29, 2018 and March 31, 2018 is as follows (in thousands):

At the Company’s option, loans under the Credit Agreement bear interest at (i) the Applicable Rate (as defined in the Credit Agreement) plus the Eurodollar Rate (as defined in the 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 of the Administrative Agent, or (c) the Eurodollar Base Rate plus 1.0% (the “Base Rate”). All swingline 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, six or twelve months, as selected by the Company. The Applicable Rate for Eurodollar Rate loans ranges from 1.125% per annum to 1.375% per annum. The Applicable Rate for Base Rate loans ranges from 0.125% per annum to 0.375% per annum. Interest for Eurodollar Rate loans will be payable at the end of each applicable interest period or at three-month intervals, if such interest period exceeds three months. Interest for Base Rate loans will be payable quarterly in arrears. The Company will pay a letter of credit fee equal to the Applicable Rate multiplied by the daily amount available to be drawn under any letter of credit, a fronting fee, and any customary documentary and processing charges for any letter of credit issued under the Credit Agreement.

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, including the following financial covenants that the Company must maintain (i) a consolidated leverage ratio not to exceed 3.0 to 1.0 as of the end of any fiscal quarter of the Company, provided that in connection with a permitted acquisition in excess of $300.0 million, the Company's maximum consolidated leverage ratio may increase on two occasions during the term of the Credit Facility to 3.5 to 1.0 for four consecutive fiscal quarters, beginning with the fiscal quarter in which such acquisition occurs and (ii) an interest coverage ratio not to be less than 3.0 to 1.0 as of the end of any fiscal quarter of the Company. As of December 30, 2017, the Company was in compliance with these covenants.

The Credit Agreement also contains customary events of default. The occurrence of an event of default can result in the exercise of remedies including an increase in the applicable rate of interest by 2.00%, termination of undrawn commitments under the Credit Facility, declaration that all outstanding loans are due and payable and requiring cash collateral deposits in respect of outstanding letters of credit. 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.



	September 29, 2018			March 31, 2018
6.75% Senior Notes due 2023	$	—		$	444,464
7.00% Senior Notes due 2025	112,110			548,500
5.50% Senior Notes due 2026	630,000			—
Less unamortized premium and issuance costs	(7,012		)	(9,674		)
Total long-term debt	$	735,098		$	983,290

Senior Notes due 2023 and 2025

On November 19, 2015, the Company ~~completed an offering of~~issued $450.0 million aggregate principal amount of its 6.75% senior notes due December 1, 2023 (the ~~“2023 Notes”~~"2023 Notes") and $550.0 million aggregate principal amount of its 7.00% senior notes due December 1, 2025 (the ~~“2025 Notes” and, together with the~~"2025 Notes"). The 2023 Notes were, and the ~~“Notes”~~2025 Notes are, senior unsecured obligations of the Company and guaranteed, jointly and severally, by the Company and certain of its U.S. subsidiaries (the "Guarantors"). The 2023 Notes ~~were sold in~~and the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States pursuant to Regulation S under the Securities Act. The2025 Notes were issued pursuant to an indenture dated as of November 19, 2015 (the ~~"Indenture"~~"2015 Indenture") ~~containing~~, 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. ~~The Indenture also contains customary negative covenants.~~

In March 2018, the Company repurchased $5.5 million and $1.5 million of the 2023 Notes and the 2025 Notes, respectively, at prices equal to 107.50% of the principal amount of the 2023 Notes purchased, plus accrued and unpaid interest, and 109.50% of the principal amount of the 2025 Notes purchased, plus accrued and unpaid interest.

On June 15, 2018, the Company commenced cash tender offers for any and all of the 2023 Notes (the “2023 Tender Offer”) and up to $150.0 million of the 2025 Notes (the "2025 Tender Offer"). On June 29, 2018, the Company completed the purchase of $429.2 million aggregate principal amount of the 2023 Notes at a price equal to 106.75% of the principal amount of the 2023 Notes purchased, plus accrued and unpaid interest. On July 19, 2018, the Company redeemed the remaining $15.3 million principal amount of the 2023 Notes at a redemption price equal to 100.0% of the principal amount, plus a make-whole premium and accrued and unpaid interest.

On July 10, 2018, the Company increased the tender cap for the 2025 Tender Offer to $300.0 million, and on July 16, 2018, the Company completed the purchase of $300.0 million aggregate principal amount of the 2025 Notes at a price equal to 109.63% of the principal amount of the 2025 Notes purchased, plus accrued and unpaid interest.

On August 14, 2018, the Company commenced a cash tender offer for up to $130.0 million of the 2025 Notes. On August 28, 2018, following an increase of the tender cap to $140.0 million, the Company completed the purchase of $136.4 million aggregate principal amount of the 2025 Notes at a price equal to 110.00% of the principal amount of the 2025 Notes purchased, plus accrued and unpaid interest.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

OnDuring the three and six months ended September 19, 2016, the Company completed an exchange offer, in which all of the 2023 Notes and substantially all of the 2025 Notes were exchanged for new notes that have been registered under the Securities Act.

~~At any time prior to December 1,~~29, 2018, the Company ~~may redeem all or part~~recognized a loss on debt extinguishment of ~~the 2023 Notes, at a redemption price equal to their principal amount, plus a “make whole” premium~~$48.8 million and $82.2 million, respectively, as of the redemption date, and accrued and unpaid interest. In addition, at any time prior to December 1, 2018, the Company may redeem up to 35% of the original aggregate principal amount of the 2023 Notes with the proceeds of one or more equity offerings, at a redemption price equal to 106.75%, plus accrued and unpaid interest. Furthermore, at any time on or after December 1, 2018, the Company may redeem the 2023 Notes, in whole or in part, at once or over time, at the specified redemption prices set forth"Other expense" in the ~~Indenture plus accrued and unpaid interest thereon to the redemption date (subject to the rights~~Company’s Condensed Consolidated Statements of ~~holders of record on the relevant record date to receive interest due on the relevant interest payment date).~~Income.

At any time prior to December 1, 2020, the Company may redeem all or part of the 2025 Notes, at a redemption price equal to their principal amount, plus a “make whole” premium as of the redemption date, and accrued and unpaid interest. In addition, at any time prior to December 1, 2018, the Company may redeem up to 35% of the original aggregate principal amount of the 2025 Notes with the proceeds of one or more equity offerings, at a redemption price equal to 107.00%, of the principal amount of the 2025 Notes redeemed, plus accrued and unpaid interest. Furthermore, at any time on or after December 1, 2020, the Company may redeem the 2025 Notes, in whole or in part, at ~~once or over time, at~~ the ~~specified~~ redemption prices ~~set forth~~specified in the 2015 Indenture, plus accrued and unpaid ~~interest thereon~~interest.

With respect to the ~~redemption date (subject~~2023 Notes, 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 ~~rights of holders of record on the relevant record date to receive~~2025 Notes, interest ~~due on the relevant interest payment date).~~

~~Interest~~ is payable on June 1 and December 1 of each year ~~on the 2023 Notes at a rate of 6.75% per annum and on the 2025 Notes~~ at a rate of 7.00% per annum. Interest paid on the Notes during the three and nine months ended December 30, 2017 was $34.5 million and $68.9 million, respectively. Interest paid on the Notes during the three and nine months ended December 31, 2016 was $34.5 million and $71.2 million, respectively.

~~The~~ 2023 Notes and the 2025 Notes ~~are traded over~~during the ~~counter~~three and ~~their fair values as of December 30, 2017 of $484.9~~six months ended September 29, 2018 was $7.3 million and ~~$613.9~~$41.5 million, ~~respectively (compared to carrying values of $450.0 million and $550.0 million, respectively), were estimated based upon the values of their last trade at the end of the period. The fair values of~~respectively. Interest paid on the 2023 Notes and the 2025 Notes ~~were $489.4~~during the six months ended September 30, 2017 was $34.4 million.

Senior Notes due 2026

On July 16, 2018, the Company completed an offering of $500.0 million aggregate principal amount of its 5.50% Senior Notes due 2026 (the “Initial 2026 Notes”). On August 28, 2018, the Company completed an offering of an additional $130.0 million aggregate principal amount of such notes (the "Additional 2026 Notes", together with the "Initial 2026 Notes", the "2026 Notes"). The 2026 Notes pay interest semi-annually on January 15 and ~~$607.8 million, respectively, as~~July 15 at a rate of ~~April 1, 2017, based upon the values of~~5.50% per annum. The 2026 Notes will mature on July 15, 2026, unless earlier redeemed in accordance with their ~~last trade at the end~~terms. The 2026 Notes are senior unsecured obligations of the ~~period.~~

~~Interest Expense~~

~~During the three~~Company and ~~nine months ended December 30, 2017, the Company recognized $17.7 million~~are initially guaranteed, jointly and ~~$52.3 million, respectively, of interest expense related to the Notes and the Term Loan which was partially offset~~severally, by $2.0 million and $10.8 million, respectively, of interest capitalized to property and equipment. During the three and nine months ended December 31, 2016, the Company recognized $17.4 million and $52.2 million, respectively, of interest expense related to the Notes, which was partially offset by $3.6 million and $9.0 million, respectively, of interest capitalized to property and equipment.

~~7. INCOME TAXES~~

~~Income Tax Expense~~

The Company’s provision for income taxes for the three and nine months ended December 30, 2017 and December 31, 2016 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) to year-to-date income (loss) to determine the amounts for the three and nine months ended December 30, 2017 and December 31, 2016.its Guarantors.

The ~~Company’s income tax expense was $98.5 million~~Initial 2026 Notes were issued pursuant to an indenture, dated as of July 16, 2018 by and ~~$88.6 million for~~among the ~~three~~Company, the Guarantors and ~~nine months ended December 30, 2017, respectively,~~MUFG Union Bank, N.A., as trustee, and the Company's income tax expense was $123.2 million and $137.1 million for the three and nine months ended December 31, 2016, respectively. The Company’s effective tax rate was 150.6% and 145.7% for the three and nine months ended December 30, 2017, respectively, and 276.6% and 212.2% for the three and nine months ended December 31, 2016, respectively. The Company's effective tax rate for the three and nine months ended December 30, 2017 differed from the statutory rate primarily dueAdditional 2026 Notes were issued pursuant to a ~~net discrete provisional tax expense~~supplemental indenture, dated as of ~~$95.9 million resulting from~~August 28, 2018 (together, the ~~enactment~~"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.

The 2026 Notes were sold in a private offering to certain institutions that then resold the ~~Tax Cuts and Jobs~~2026 Notes in the United States to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the ~~"Tax~~"Securities Act"), ~~changes in unrecognized tax benefits, a discrete tax expense, for the nine months only, associated with intra-entity transfers~~and to certain non-U.S. persons in accordance with Regulation S under the ~~new guidance~~Securities Act. The Company used a portion of the net proceeds of the 2026 Notes to fund the tender offers for the ~~intra-entity transfer~~2025 Notes and to pay related fees and expenses of ~~assets other than~~the offering and will use the remaining net proceeds for general corporate purposes.

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

~~inventory (Accounting Standards Update ("ASU") 2016-16,~~ ~~"Income Taxes (Topic 740), Intra-Entity Transfers~~At any time prior to July 15, 2021, the Company may redeem all or part of ~~Assets Other Than Inventory") offset by tax rate differences in foreign jurisdictions, state income taxes, domestic tax credits generated~~the 2026 Notes, at a redemption price equal to their principal amount, plus a “make-whole” premium as of the redemption date, and ~~a discrete tax benefit for excess stock compensation deductions in accordance~~accrued and unpaid interest. In addition, at any time prior to July 15, 2021, the Company may redeem up to 35% of the original aggregate principal amount of the 2026 Notes with the ~~new guidance for accounting for employee share-based payments (ASU 2016-09,~~ ~~"Compensation - Stock Compensation (Topic 718): Improvements~~proceeds of one or more equity offerings, at a redemption price equal to ~~Employee Share-Based Payment Accounting"). The Company's effective tax rate for~~105.50% of the ~~three~~principal amount of the 2026 Notes redeemed, plus accrued and ~~nine months ended December 31, 2016 differed from~~unpaid interest. Furthermore, at any time on or after July 15, 2021, the ~~statutory rate primarily due to tax rate differences~~Company may redeem the 2026 Notes, in ~~foreign jurisdictions, state income taxes, domestic tax credits generated, changes~~whole or in ~~unrecognized tax benefits and~~part, at the ~~timing of when income and loss is recognized~~redemption prices specified in the ~~various tax jurisdictions.~~

~~U.S. Tax Reform~~

On December 22, 2017, the Tax Act was signed into law in the U.S. The Tax Act significantly revises the future ongoing U.S. corporate income tax by, among other things, lowering U.S. corporate income tax rates, providing 100% bonus depreciation through December 31, 20222018 Indenture, plus accrued and implementing a territorial tax system. Due to the timing of the Company's fiscal year, the lower corporate income tax rate will be phased in, resulting in a U.S. statutory federal rate of approximately 31.5% for our fiscal year ending March 31, 2018, and 21% for subsequent fiscal years. However, the Tax Act implements a territorial tax system, which eliminates the ability to credit certain foreign taxes that existed prior to enactment of the Tax Act. For the quarter ended December 30, 2017, the impact of these changes, along with the transitional deemed repatriation of the historical earnings of foreign subsidiaries, resulted in a discrete provisional tax expense of approximately $95.9 million. This is comprised of a provisional repatriation tax expense of $139.5 million, offset by a provisional deferred tax benefit of $43.6 million from the remeasurement of U.S. deferred tax assets and liabilities. Both the tax charge and the tax benefit represent provisional amounts and the Company’s current best estimates.

Because of the complexity of the new Global Intangible Low-Taxed Income (GILTI) tax rules, the Company continues to evaluate this provision of the Tax Act and the application of Accounting Standards Codification ("ASC") 740, ~~Income Taxes~~. Under U.S. GAAP, the Company is allowed to make an accounting policy choice of either: (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company's measurement of its deferred taxes (the “deferred method”). The Company is currently still in the process of analyzing the impact of the GILTI tax rules and, as a result, the Company has not made any provisional adjustments related to potential GILTI tax in its financial statements and has not made a policy decision regarding whether to record deferred tax on GILTI.unpaid interest.

The ~~Tax~~2026 Notes have not been registered under the Securities Act, ~~allows~~or any state securities laws, and, unless so registered, may not be offered or sold in the ~~tax liability arising~~United States absent registration or an applicable exemption from the ~~transitional deemed repatriation~~registration requirements of the historical earnings of foreign subsidiaries to be paid on an installment basis over eight years, resulting in an increase in the long-term tax liability account included in "Other long-term liabilities" in the Condensed Consolidated Balance Sheets.Securities Act and applicable state securities laws.

~~The changes included in~~In connection with the ~~Tax Act are broad and complex. The final transition impacts~~offering of the ~~Tax Act may differ from~~2026 Notes, the ~~above estimates, possibly materially, due to,~~Company entered into a registration rights agreement, dated as of July 16, 2018, by and among ~~other things, evolving technical interpretations~~the Company and the Guarantors, on the one hand, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the ~~Tax Act, legislative action to address questions that arise because~~initial purchasers of the ~~Tax Act, clarification~~Initial 2026 Notes, on the ~~application~~other hand, and a substantially similar agreement, dated as of ~~accounting standards for income taxes or related interpretations in response~~August 28, 2018 with respect to the ~~Tax Act, or updates or changes to provisional amounts~~Additional 2026 Notes (together, the Company has utilized to calculate the transition impacts, including impacts from changes to current year earnings and tax liabilities, deferred tax assets and liabilities, earnings and profits at foreign subsidiaries, tax pools at foreign subsidiaries, foreign tax credits and foreign exchange rates. SEC Staff Accounting Bulletin (“SAB”"Registration Rights Agreements") No. 118 issued December 22, 2017, allows for a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. The Company will finalize and record any resulting adjustments within this one-year measurement period.

The Company had $841.3 million of total cash and cash equivalents as of December 30, 2017, including $476.8 million held by Qorvo International Pte. Ltd. in Singapore. As a result of the deemed repatriation of the historical earnings, the impact of GILTI on future earnings, and Singapore not imposing a withholding tax on dividends, the Company no longer takes the position that earnings are permanently reinvested for this operating subsidiary in Singapore.

~~Deferred Taxes~~

~~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.~~.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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 2026 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 2026 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 July 16, 2018 (in the case of the Initial 2026 Notes) or August 28, 2018 (in the case of the Additional 2026 Notes) (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 2026 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 2026 Notes covered thereby have been sold pursuant thereto).

If the Company fails to meet any of these targets, the annual interest rate on the 2026 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 2026 Notes will revert to the original rate.

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"). On June 5, 2018, the Company and the Guarantors entered into the First Amendment (the "Amendment") to the Credit Agreement. The Credit Agreement includes 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", together with the Term Loan, the "Credit Facility"). On the closing date, $100.0 million of the Term Loan was funded (and subsequently repaid in March 2018), with the remainder available, at the discretion of the Company, in up to two draws. The Amendment, among other things, extended the delayed draw availability period from June 5, 2018 to January 3, 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 Company may request that the Credit Facility be increased by up to $300.0 million, subject to securing additional funding commitments from the existing or new lenders. 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 six months ended September 29, 2018, there were no borrowings under the Revolving Facility and the Company had no outstanding amounts under the Credit Facility as of September 29, 2018.

The Credit Agreement contains various conditions, covenants and representations with which the Company ~~increased the deferred tax assets for both the domestic federal~~must be in compliance in order to borrow funds and ~~state tax net operating loss (“NOL”) carry-forwards by $36.7 million due~~ to ~~the adoption~~avoid an event of ~~new accounting guidance for stock compensation (ASU 2016-09) in the first quarter~~default. As of ~~fiscal 2018.~~

~~In the third quarter of fiscal~~September 29, 2018, the Company ~~provisionally decreased~~was in compliance with these covenants.

Fair Value of Long-Term Debt

The fair value of the ~~net U.S. deferred tax liability by $43.6~~2025 Notes as of September 29, 2018 and March 31, 2018 was $120.0 million and $596.5 million, respectively (compared to ~~account for~~a carrying value of $112.1 million and $548.5 million, respectively). The fair value of the ~~reduction~~2026 Notes as of September 29, 2018 was $641.0 million (compared to a carrying value of $630.0 million). The Company considers its long-term debt to be Level 2 in the ~~U.S. federal corporate income tax rate from 35% to 21% with~~fair value hierarchy. Fair values are generally estimated based on quoted market prices for identical or similar instruments. The 2025 Notes and 2026 Notes trade over the ~~enactment~~counter and their fair values were estimated based upon the value of ~~the Tax Act.~~

The Company has domestic federal and state tax NOL carry-forwards that, if unused, will expire in fiscal years 2020 to 2036 and 2018 to 2036, respectively. The use of the NOLs that were acquired in prior year acquisitions is subject to certain annual limitations under Internal Revenue Code Section 382 and similar state income tax provisions.

~~Uncertain Tax Positions~~

~~The Company’s gross unrecognized tax benefits increased from $90.6 million as of the end of fiscal 2017 to $102.3 million as of~~their last trade at the end of the ~~third quarter of fiscal 2018, primarily due to tax positions taken with respect to the current fiscal year.~~

~~8. INVESTMENTS AND FAIR VALUE MEASUREMENTS~~

~~Investments~~

~~The following is a summary of cash equivalents and available-for-sale securities as of~~ ~~December 30, 2017~~ ~~and~~ ~~April 1, 2017~~ ~~(in thousands):~~

Cost
Gross
Unrealized
Gains

Gross
Unrealized
Losses

Estimated Fair
Value
December 30, 2017
Auction rate securities $ 2,150
$ —
$ (155 ) $ 1,995
Money market funds 60
—
—
60
$ 2,210
$ —
$ (155 ) $ 2,055
April 1, 2017
Auction rate securities $ 2,150
$ —
$ (429 ) $ 1,721
Money market funds 14
—
—
14
$ 2,164
$ —
$ (429 ) $ 1,735

~~The estimated fair value of available-for-sale securities was based on the prevailing market values on~~ ~~December 30, 2017~~ ~~and~~ ~~April 1, 2017. The Company determines the cost of an investment sold based on the specific identification method.~~

~~The expected maturity distribution of cash equivalents and available-for-sale securities is as follows (in thousands):~~

December 30, 2017 April 1, 2017
Cost
Estimated
Fair Value
Cost
Estimated
Fair Value
Due in less than one year $ 260
$ 249
$ 14
$ 14
Due after ten years 1,950
1,806
2,150
1,721
Total cash equivalents and available-for-sale securities $ 2,210
$ 2,055
$ 2,164
$ 1,735

~~Other Investments~~

On August 4, 2015, the Company invested $25.0 million to acquire shares of Series F Preferred Stock of Cavendish Kinetics Limited (Cavendish), a private limited company incorporated in England and Wales. On July 31, 2017, the Company invested an additional $20.0 million in Cavendish Series F Preferred Stock. The Company began accounting for this investment under the equity method (on a one quarter lag basis) on July 31, 2017. As of December 30, 2017, this investment is classified in "Long-term investments" in the Condensed Consolidated Balance Sheets.

period.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~Fair Value of Financial Instruments~~

Marketable securities are measured at fair value and recorded in "Cash and cash equivalents" 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.

~~Recurring Fair Value Measurements~~

~~The fair value of the financial assets measured at fair value on a recurring basis was determined using the following levels of inputs as of December 30, 2017 and April 1, 2017 (in thousands):~~

Total Quoted Prices In
Active Markets For
Identical Assets
(Level 1) Significant Other
Observable Inputs
(Level 2)
December 30, 2017
Assets
Money market funds $ 60
$ 60
$ —

Auction rate securities ("ARS") (1)
1,995
—
1,995

Invested funds in deferred compensation plan (2)
13,900
13,900
—
Total assets measured at fair value $ 15,955
$ 13,960
$ 1,995
Liabilities

Deferred compensation plan obligation (2)
$ 13,900
$ 13,900
$ —
Total liabilities measured at fair value $ 13,900
$ 13,900
$ —

April 1, 2017
Assets
Money market funds $ 14
$ 14
$ —

Auction rate securities (1)
1,721
—
1,721

Invested funds in deferred compensation plan (2)
10,237
10,237
—
Total assets measured at fair value $ 11,972
$ 10,251
$ 1,721
Liabilities

Deferred compensation plan obligation (2)
$ 10,237
$ 10,237
$ —
Total liabilities measured at fair value $ 10,237
$ 10,237
$ —

(2) 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 current liabilities" and “Other long-term liabilities” line items of its Condensed Consolidated Balance Sheets.

~~As of December 30, 2017 and April 1, 2017, the Company did not have any Level 3 assets or liabilities.~~

~~Other Fair Value Disclosures~~

The carrying values 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 6 for the fair value of the Company's long-term debt.

~~QORVO, INC. AND SUBSIDIARIES~~Interest Expense

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

~~(Unaudited)~~

~~9. RESTRUCTURING~~

InDuring the ~~second quarter of fiscal~~three and six months ended September 29, 2018, the Company ~~initiated restructuring actions to improve operating efficiencies. As a result of these actions, restructuring charges of approximately $8.2~~recognized $10.9 million and ~~$15.0~~$28.0 million, respectively, ~~(primarily~~of interest expense related to ~~employee termination benefits),~~the 2023 Notes, 2025 Notes and ~~a loss on asset disposal of approximately $6.7~~the 2026 Notes, which was partially offset by $1.8 million and ~~$9.7~~$5.3 million, respectively, ~~were recorded in "Other operating expense" in the Condensed Consolidated Statement~~ of ~~Operations, for~~interest capitalized to property and equipment. During the three and ~~nine~~six months ended ~~December 30, 2017. The Company expects to record approximately $1.8 million of additional restructuring charges primarily associated with employee termination benefits.~~

~~As of December~~September 30, 2017, ~~restructuring obligations relating to employee termination benefits totaled $7.6~~the Company recognized $17.3 million and ~~are included in “Accrued liabilities” in~~$34.6 million, respectively, of interest expense related to the ~~Consolidated Balance Sheets.~~2023 Notes and the 2025 Notes, which was partially offset by $3.2 million and $8.8 million, respectively, of interest capitalized to property and equipment.

~~10.~~7. STOCK REPURCHASES

On ~~November 3, 2016,~~May 23, 2018, the Company announced that its Board of Directors authorized a share repurchase program to repurchase up to ~~$500.0 million~~$1.0 billion of the Company's outstanding ~~stock.~~stock, which included approximately $126.3 million authorized under a prior share repurchase 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, ~~and~~ does not have a fixed term, and may be modified, suspended or terminated at any time without prior notice.

During the three ~~and nine~~ months ended ~~December 30, 2017,~~September 29, 2018, the Company repurchased approximately 1.1 million shares ~~and~~of its common stock for approximately $86.7 million under the current share repurchase program. During the six months ended September 29, 2018, the Company repurchased approximately 2.3 million shares of its common stock for approximately ~~$80.0~~$186.7 million ~~and $168.9~~(which included 0.4 million ~~respectively.~~shares of its common stock for approximately $35.9 million under a prior share repurchase program). As of ~~December 30, 2017, $213.1~~September 29, 2018, $849.2 million remains available for repurchases under ~~this~~the current share repurchase program.

During the three and ~~nine~~six months ended ~~December 31, 2016,~~September 30, 2017, the Company repurchased approximately ~~1.3~~0.8 million shares and ~~2.9~~1.2 million shares of its common stock for approximately ~~$67.1~~$57.0 million and ~~$158.5~~$88.9 million, ~~respectively.~~respectively, under a prior share repurchase program.

~~11. RECENT ACCOUNTING PRONOUNCEMENTS~~8. REVENUE

Change in Accounting Policy

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 impactsadopted ASU 2014-09, "Revenue 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 April 1, 2017.~~

~~In May 2017, the FASB issued ASU 2017-09,~~ Contracts with Customers (Topic 606),"~~"Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting."~~ The new guidance clarifies when modification accounting in Topic 718 should be applied to changes to the terms or conditions of a share-based payment award. The Company elected to early-adopt the standard in the first quarter of fiscal ~~2018 with no impact on its consolidated financial statements.~~

~~In November 2016, the FASB issued ASU 2016-18,~~ ~~"Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)."~~ This standard requires that restricted cash and restricted cash equivalents be included in cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown in the statement of cash flows. The Company adopted the provisions of ASU 2016-18 in the second quarter of fiscal 2018 using the retrospective transition method. The adjustment to reclassify restricted cash2019 for ~~each period presented was less than $1.0 million.~~

~~In October 2016, the FASB issued ASU 2016-16,"Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory.~~" The new guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. The Company elected to adopt the standard early in the first quarter of fiscal 2018open contracts using the modified retrospective ~~method, which requires~~approach through a cumulative adjustment to ~~retained earnings as of~~"Accumulated deficit" in the ~~beginning of the period of adoption. The cumulative adjustment to the December 30, 2017~~ Condensed Consolidated Balance Sheet for the fiscal year beginning April 1, 2018. The impact from the cumulative-effect adjustment was ~~approximately $1.3 million. For~~immaterial (less than 1% of revenue in the ~~three and nine months ended December 30, 2017, the Company recognized a discrete tax expense~~quarter of ~~less than $0.1 million and $5.4 million, respectively,~~adoption), related to ~~intra-entity transfers~~over-time revenue recognition for customer-controlled inventory and point in time revenue recognition for intellectual property with a right to use. As the adoption of ~~assets.~~ASU 2014-09 did not have a material impact, comparative financial information for prior periods has not been restated and continues to be presented under the accounting standards in effect for the respective periods.

~~In March 2016,~~Revenue Recognition Policy

The Company generates revenue primarily from the ~~FASB issued ASU 2016-09,~~ ~~"Compensation - Stock Compensation (Topic 718): Improvements~~sale of semiconductor products, either directly to ~~Employee Share-Based Payment Accounting."~~a customer or to a distributor, or at completion of a consignment process. Revenue is recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration it expects to be entitled in exchange for those goods or services. A majority of the Company's revenue is recognized at a point in time, either on shipment or delivery of the product, depending on individual customer terms and conditions. Revenue from sales to the Company’s distributors is recognized upon shipment of the product to the distributors (sell-in). Revenue is recognized from the Company’s consignment programs at a point in time when the products are pulled from consignment inventory by the customer. Revenue recognized for product and services over-time is immaterial (less than 2% of overall revenue). The new guidance simplifies certain aspects of accounting for share-based payment transactions, including income tax consequences, forfeitures, classification of awards on the balance sheet and presentation on the statement of cash flows, and became effective for the Company applies a five-step approach as defined in the ~~first quarter~~new standard in determining the amount and timing of ~~fiscal 2018. As~~revenue to be recognized: (1) identifying the contract with a ~~result of adoption,~~customer; (2) identifying the ~~Company recognized a cumulative-effect adjustment~~performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to ~~reduce~~ the ~~Company's accumulated deficit by $36.7 million with a~~performance obligations in the contract; and (5) recognizing revenue when the corresponding performance obligation is satisfied.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~corresponding increase~~

Sales agreements are in place with certain customers and contain terms and conditions with respect to ~~deferred tax assets for~~payment, delivery, warranty and supply, but typically do not require minimum purchase commitments. In the ~~Federal~~absence of a sales agreement, the Company’s standard terms and ~~state~~conditions apply. The Company considers a customer's purchase order, which is governed by a sales agreement or the Company’s standard terms and conditions, to be the contract with the customer.

The Company’s pricing terms are negotiated independently, on a stand-alone basis. In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment to determine the net ~~operating losses attributable~~consideration to ~~excess tax benefits that had not been previously recognized. All excess tax benefits and deficiencies~~which the Company expects to be entitled. Variable consideration in the ~~current~~form of rebate programs is offered to certain customers, including distributors. These rebates represent less than 5% of net revenue. The majority of these accruals are classified as a contra accounts receivable. The Company determines variable consideration by estimating the most likely amount of consideration it expects to receive from the customer. The Company's terms and ~~future~~conditions do not give its customers a right of return associated with the original sale of its products. However, the Company may authorize sales returns under certain circumstances, which include courtesy returns and like-kind exchanges. Sales returns are classified as a refund liability. The Company reduces revenue and records reserves for product returns and allowances, rebate programs and scrap allowance based on historical experience or specific identification depending on the contractual terms of the arrangement.

The Company’s accounts receivable balance is from contracts with customers and represents the Company’s unconditional right to receive consideration from its customers. Payments are due within one year of completion of the performance obligation and subsequent invoicing and, therefore, do not include significant financing components. To date, there have been no material impairment losses on accounts receivable. Contract assets and contract liabilities recorded on the Condensed Consolidated Balance Sheets were immaterial in the periods ~~will~~presented.

The Company invoices customers upon shipment and recognizes revenues in accordance with delivery terms. As of September 29, 2018, the Company had $41.6 million in remaining unsatisfied performance obligations with an original duration greater than one year, of which the majority is expected to be recognized as income ~~tax expense~~over the next twelve months.

The Company includes shipping charges billed to customers in "Revenue" and includes the related shipping costs in "Cost of goods sold" in the ~~Company’s~~ Condensed Consolidated ~~Statement~~Statements of ~~Operations~~Income. Taxes assessed by government authorities on revenue-producing transactions, including tariffs, value-added and excise taxes, are excluded from revenue in the reporting period in which they occur. This will result in increased volatility in the Company’s effective tax rate. For the three and nine months ended December 30, 2017, the Company recognized a discrete tax benefitCondensed Consolidated Statements of $0.6 million and $9.9 million, respectively, related to the excess tax benefits from stock-based compensation. The Company plans to continue its existing practice of estimating expected forfeitures in determining compensation cost.Income.

~~In March 2016, the FASB issued ASU 2016-07,~~ ~~"Investments-Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting."~~ The new guidance eliminates the requirement to retrospectively apply the equity method of accounting when an investment previously accounted for under the cost basis qualifies for the equity method of accounting. The Company ~~adopted ASU 2016-07~~incurs commission expense that is incremental to obtaining contracts with customers. Sales commissions (which are recorded in the ~~first quarter~~"Selling, general and administrative" expense line item in the Condensed Consolidated Statements of ~~fiscal 2018~~Income) are expensed when incurred because such commissions are not owed until the performance obligation is satisfied, which coincides with the end of the contract term, and therefore no ~~significant impact on its consolidated financial results.~~remaining period exists over which to amortize the commissions.

~~In July 2015,~~The following table presents the ~~FASB issued ASU 2015-11,~~ ~~"Inventory (Topic 330): Simplifying~~Company's revenue disaggregated by geography, based on the ~~Measurement~~billing addresses of ~~Inventory."~~ The new guidance changes the measurement principle for inventory from the lower of cost or market to the lower of cost and net realizable value. ASU 2015-11 defines net realizable value as the estimated selling price in the ordinary course of business less reasonably predictable costs to completion, transportation, or disposal. The Company adopted ASU 2015-11 in the first quarter of fiscal 2018 with no significant impact on its ~~consolidated financial statements.~~customers (in thousands):



	Three Months Ended				Six Months Ended
	September 29, 2018		September 30, 2017		September 29, 2018		September 30, 2017
Revenue:
China	$	548,848	$	430,141	$	915,382	$	779,772
Taiwan	160,835		169,913		316,006		260,071
United States	106,294		127,897		214,760		266,257
Other Asia	39,241		64,901		73,810		101,076
Europe	24,302		24,534		46,938		45,769
Other	4,923		4,197		10,217		9,469
Total Revenue	$	884,443	$	821,583	$	1,577,113	$	1,462,414

~~In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)~~," with several amendments subsequently issued. This new standard provides an updated framework for revenue recognition, resulting in a single revenue model to be applied by reporting companies under U.S. GAAP. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additional disclosures will be required regarding the nature, amount, timing and uncertainty of cash flows. The new guidance will become effective for the Company in the first quarter of fiscal 2019 and permits the use of either a retrospective approach or a modified retrospective approach, under which the cumulative effect of adoption is recognized at the date of initial application.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The Company ~~has established a cross-functional team to assess the potential impact of the new~~also disaggregates revenue standard and this assessment will be completed during fiscal 2018. The Company's assessment process consists of reviewing its current accounting policies and practices and its customer contracts to identify potential differences that may result from applying the requirements of the new standard to its contracts and identifying appropriate changes to its business processes, systems and controls to support revenue recognition and disclosure requirements under the new standard. The Company's revenue is generated principally from sales of semiconductor products. The Company currently expects that under the new standard, a substantial majority of its revenue will continue to be recognized at a "point in time" as products are shipped to, or received by customers. In limited circumstances the products sold are highly customized and have no alternative use, and the Company has an enforceable right to payment (with a reasonable margin) for performance completed to date. For the contracts related to these products, the Company expects that it will recognize revenue "over time" as performance obligations are satisfied. This will accelerate revenue recognition because revenue for these products currently is recognized as the products are shipped to, or received by, customers. While the Company has made substantial progress in identifying the likely impacts of the new standard, it has not yet quantified the potential impact. The Company expects that it will have additional disclosure related to revenue recognition, including judgments made, under the new standard. The Company will continue to evaluate the impact of the new standard, including any necessary changes to internal controls, and prepare for adoption in the first quarter of fiscal 2019. The Company will adopt the standard using the modified retrospective approach.operating segments (see Note 9).

~~12.~~9. OPERATING SEGMENT INFORMATION

The Company's operating segments as of ~~December 30, 2017~~September 29, 2018 are Mobile Products (MP) and Infrastructure and Defense Products (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 (loss) and non-GAAP operating income (loss) as a percentage of revenue.

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

MP is a leading global supplier of cellular radio frequency ("RF") and Wi-Fi solutions for a variety of mobile devices, including smartphones, notebook computers, wearables, tablets, and cellular-based applications for the Internet of Things ("IoT"). Mobile device manufacturers and mobile network operators are adopting new technologies to address the growing demand for data-intensive, increasingly cloud-based distributed applications and for mobile devices with smaller form factors, improved signal quality, less heat and longer talk and standby times. New wireless communications standards are being deployed, ~~to utilize available spectrum more efficiently.~~and new frequency bands are being added. Carrier aggregation is being implemented to support wider bandwidths, increase data rates and improve network performance. These trends increase the complexity of smartphones, require more RF content and place a premium on performance, integration, systems-level expertise, and product and technology portfolio breadth, all of which are MP strengths. MP offers a comprehensive product portfolio of ~~BAW~~bulk acoustic wave ("BAW") and surface acoustic wave ("SAW") filters, power amplifiers ("PAs"), low noise amplifiers ("LNAs"), switches, multimode multi-band PAs and transmit modules, RF power management integrated circuits, diversity receive modules, antenna switch modules, antenna tuning and control solutions, modules incorporating PAs and duplexers ~~("PADs")~~ and modules incorporating switches, PAs and duplexers.

IDP is a leading global supplier of RF solutions with a diverse portfolio of solutions that "connect and protect," spanning communications and defense applications. These applications include high performance defense systems such as radar, electronic warfare and communication systems, Wi-Fi customer premises equipment for home and work, high speed connectivity in Long-Term Evolution ("LTE") and 5G base stations, cloud connectivity via data center communications and telecom transport, automotive connectivity and other IoT, including smart home solutions. IDP products include high power gallium arsenide ("GaAs") and gallium nitride ("GaN") PAs, LNAs, switches, Complementary Metal Oxide Semiconductor ("CMOS") system-on-a-chip solutions, premium BAW and SAW filter solutions and various multi-chip and hybrid assemblies.

The “All other” category includes operating expenses such as stock-based compensation, amortization of intangible assets, acquisition and integration related costs, restructuring charges, ~~intellectual property rights litigation settlement,~~ start-up costs, ~~and~~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” category, the Company’s accounting policies for segment reporting are the same as for the Company as a whole.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	December 30, 2017			December 31, 2016			December 30, 2017			December 31, 2016			September 29, 2018			September 30, 2017			September 29, 2018			September 30, 2017
Revenue:
MP	$	642,089		$	656,788		$	1,728,709		$	1,910,003		$	666,539		$	630,397		$	1,152,618		$	1,086,620
IDP	202,680			168,589			576,534			476,669			217,904			190,216			424,495			373,854
All other (1)	970			970			2,910			2,910			—			970			—			1,940
Total revenue	$	845,739		$	826,347		$	2,308,153		$	2,389,582		$	884,443		$	821,583		$	1,577,113		$	1,462,414
Income from operations:
Income (loss) from operations
MP	$	190,990		$	163,401		$	451,689		$	460,775		$	196,948		$	172,892		$	286,119		$	260,699
IDP	63,281			45,278			170,516			112,345			56,311			57,649			111,515			107,235
All other	(173,951		)	(147,298		)	(520,150		)	(460,605		)	(162,782		)	(180,977		)	(326,372		)	(346,199		)
Income from operations	80,320			61,381			102,055			112,515			90,477			49,564			71,262			21,735
Interest expense	(16,338		)	(14,464		)	(43,387		)	(45,205		)	(9,689		)	(14,778		)	(24,042		)	(27,049		)
Interest income	2,215			233			4,039			703			1,580			1,058			4,974			1,824
Other expense	(757		)	(2,609		)	(1,883		)	(3,420		)	(49,532		)	(192		)	(81,487		)	(1,126		)
Income before income taxes	$	65,440		$	44,541		$	60,824		$	64,593
Income (loss) before income taxes													$	32,836		$	35,652		$	(29,293	)	$	(4,616	)

(1) "All other" revenue relates to royalty income that is not allocated to MP or ~~IDP.~~IDP for the three and six months ended September 30, 2017. As a result of the adoption of ASU 2014-09, income related to a right-to-use license of intellectual property was recognized at a point-in-time and, therefore, was included as a transition adjustment impacting retained earnings.



	Three Months Ended						Six Months Ended
	September 29, 2018			September 30, 2017			September 29, 2018			September 30, 2017
Reconciliation of “All other” category:
Stock-based compensation expense	$	(20,905	)	$	(23,458	)	$	(40,250	)	$	(44,584	)
Amortization of intangible assets	(133,116		)	(135,639		)	(266,291		)	(270,325		)
Acquisition and integration related costs	(1,098		)	(2,613		)	(2,180		)	(5,390		)
Restructuring charges	(510		)	(7,453		)	(3,312		)	(7,984		)
Start-up costs	(5,883		)	(7,129		)	(11,244		)	(13,753		)
Other (including gain (loss) on assets and other miscellaneous corporate overhead)	(1,270		)	(4,685		)	(3,095		)	(4,163		)
Loss from operations for “All other”	$	(162,782	)	$	(180,977	)	$	(326,372	)	$	(346,199	)

10. INCOME TAXES

U.S. Tax Reform

On December 22, 2017, the Tax Cuts and Jobs Act ("Tax Act") was enacted into law. This new law includes significant changes to the U.S. corporate income tax system, including a permanent reduction in the corporate income tax rate from 35% to 21%, full expensing for investments in new and used qualified property, limitations on the deductibility of interest expense and executive compensation, and the transition of U.S. international taxation from a worldwide tax system to a territorial tax system.

In December 2017, the SEC staff issued Staff Accounting Bulletin 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC Topic 740 - Income Taxes (“ASC 740”). The provisional tax effects recorded to date will be revised during the measurement period, possibly materially, due to further

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

refinement of the calculations, changes in interpretations and assumptions made, and additional guidance that may be issued by the Department of the U.S. Treasury, the Internal Revenue Service, and other regulatory and standard setting bodies. The Company will complete its analysis within fiscal 2019 consistent with the guidance provided in SAB 118, and any adjustments during this measurement period will be included in net earnings from continuing operations as an adjustment to income tax expense.

As described in Note 12 Income Taxes in our 2018 Annual Report on Form 10-K, we were able to reasonably estimate certain effects of the Tax Act provisions that became effective during fiscal 2018 and, therefore, recorded provisional amounts, including a $116.4 million expense related to the one-time transition tax on certain unrepatriated earnings of foreign subsidiaries (the “Transitional Repatriation Tax”) and a $39.1 million benefit from the remeasurement of U.S. deferred tax assets and liabilities. While the Company has not finalized the accounting for the tax effects of the Tax Act, for the six months ended September 29, 2018 we have made a $15.9 million measurement period adjustment to reduce the tax expense related to the previously recorded provisional amounts. This was comprised of an $11.6 million reduction in the Transitional Repatriation Tax and a $4.3 million increase in U.S. deferred tax assets.

The Global Intangible Low-Taxed Income (“GILTI”) provisions create a new requirement that certain income earned by foreign subsidiaries be currently included in the gross income of the U.S. shareholder. No provisional adjustments related to the potential GILTI impact on deferred taxes has been made as the Company has not made its accounting policy choice of either: (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company's measurement of its deferred taxes (the “deferred method”).

The GILTI and executive compensation limitation provisions in the Tax Act became effective for the Company in fiscal 2019. Provisional estimates for the current year impact of these new provisions are included in the calculation of the fiscal 2019 annual effective tax rate applied to year-to-date income (loss).

Income Tax Expense

The Company’s provision for income taxes for the three and six months ended September 29, 2018 and September 30, 2017 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) to year-to-date income (loss) to determine the amounts for the three and six months ended September 29, 2018 and September 30, 2017.

The Company’s income tax expense was $0.8 million and income tax benefit was $31.4 million for the three and six months ended September 29, 2018, respectively, and the Company's income tax benefit was $0.3 million and $9.9 million for the three and six months ended September 30, 2017, respectively. The Company’s effective tax rate was 2.3% and 107.1% for the three and six months ended September 29, 2018, respectively, and (0.7)% and 214.7% for the three and six months ended September 30, 2017, respectively.

The Company's effective tax rate for the three and six months ended September 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 Transitional Repatriation Tax, and a discrete tax benefit resulting from 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 30, 2017 differed from the statutory rate primarily due to tax rate differences in foreign jurisdictions, state income taxes, domestic tax credits generated, changes in unrecognized tax benefits, a discrete tax benefit for excess stock compensation deductions in accordance with the new guidance for accounting for employee share-based payments ASU 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share Based Payment Accounting"), and a discrete tax expense, for the six months only, associated with intra-entity transfers in accordance with the new guidance for the intra-entity transfer of assets other than inventory (ASU 2016-16, "Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory").

Deferred Taxes

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.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
Reconciliation of “All other” category:
Stock-based compensation expense $ (13,715 ) $ (16,655 ) $ (58,299 ) $ (73,291 )
Amortization of intangible assets (135,743 ) (121,969 ) (406,068 ) (360,960 )
Acquisition and integration related costs (2,723 ) (5,426 ) (8,113 ) (21,148 )
Restructuring charges (8,958 ) (437 ) (16,942 ) (1,319 )
Start-up costs (5,415 ) (2,207 ) (19,168 ) (6,295 )
Other (expense) income (including (loss) gain on assets and other miscellaneous corporate overhead) (7,397 ) (604 ) (11,560 ) 2,408
Loss from operations for “All other” $ (173,951 ) $ (147,298 ) $ (520,150 ) $ (460,605 )

The Company has domestic federal and state tax net operating loss ("NOL") and credit carry-forwards that expire in fiscal years 2019 to 2038 if unused. The use of the NOLs that were acquired in prior year acquisitions is subject to certain annual limitations under Internal Revenue Code Section 382 and similar state income tax provisions.

Uncertain Tax Positions

The Company’s gross unrecognized tax benefits increased from $122.8 million as of the end of fiscal 2018 to $134.1 million as of the end of the second quarter of fiscal 2019, primarily due to tax positions taken with respect to the current fiscal year.

~~13.~~11. 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				Six Months Ended
	September 29, 2018		September 30, 2017		September 29, 2018		September 30, 2017
Numerator:
Numerator for basic and diluted net income per share — net income available to common stockholders	$	32,084	$	35,919	$	2,091	$	5,295
Denominator:
Denominator for basic net income per share — weighted average shares	125,643		127,257		125,859		127,109
Effect of dilutive securities:
Stock-based awards	2,907		3,521		3,118		3,953
Denominator for diluted net income per share — adjusted weighted average shares and assumed conversions	128,550		130,778		128,977		131,062
Basic net income per share	$	0.26	$	0.28	$	0.02	$	0.04
Diluted net income per share	$	0.25	$	0.27	$	0.02	$	0.04

In the computation of diluted net income per share for the three and six months ended September 29, 2018, outstanding options to purchase 0.3 million shares and 0.2 million 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 six months ended September 30, 2017, outstanding options to purchase less than 0.1 million shares were excluded because the effect of their inclusion would have been anti-dilutive.

12. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

In accordance with the ~~Indenture~~applicable indentures governing the 2025 Notes and 2026 Notes, the Company's obligations under the 2025 Notes and 2026 Notes are fully and unconditionally guaranteed on a joint and several basis by each Guarantor, each 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 ~~Indenture;~~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 in the condensed consolidating financial information follows the same accounting policies as described in the consolidated financial statements, except for the use by the Parent Company and Guarantor subsidiaries of the equity method of

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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.

The Company made certain immaterial corrections to the Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income for the three and nine months ended December 31, 2016. An adjustment to income in subsidiaries for the Guarantor subsidiaries of $(92.1) million has been presented in the Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income for the three months ended December 31, 2016 to properly reflect equity method accounting for the Guarantor subsidiaries’ ownership interests in non-guarantor subsidiaries. An adjustment to income from operations and income in subsidiaries for the Guarantor subsidiaries of $26.7 million and $1.8 million, respectively, has been presented in the Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income for the nine months ended December 31, 2016, to properly reflect intercompany transactions between Guarantor and non-guarantor subsidiaries and equity method accounting for the Guarantor subsidiaries’ ownership interests in non-guarantor subsidiaries. An adjustment to income from operations for the non-guarantor subsidiaries of $228.9 million and $158.9 million has been presented in the Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income for the three and nine months ended December 31, 2016, respectively, to properly reflect intercompany transactions between Guarantor and non-guarantor subsidiaries. These immaterial corrections relate solely to presentation between the Company and its subsidiaries and only impact the financial statements included in this footnote. These corrections do not affect the Company’s consolidated financial statements.

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~


	Condensed Consolidating Balance Sheet											Condensed Consolidating Balance Sheet
	December 30, 2017											September 29, 2018
(in thousands)	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations and Reclassifications			Consolidated		Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations and Reclassifications			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	249,637	$	591,689	$	—		$	841,326	$	—	$	95,152	$	462,772		$	—		$	557,924
Accounts receivable, less allowance	—		65,678		383,170		—			448,848		—		50,023		441,160			—			491,183
Intercompany accounts and notes receivable	—		295,369		30,113		(325,482		)	—		—		389,857		50,428			(440,285		)	—
Inventories	—		173,678		272,536		(23,307		)	422,907		—		214,519		280,586			(20,573		)	474,532
Prepaid expenses	—		19,375		8,633		—			28,008		—		18,699		7,614			—			26,313
Other receivables	—		7,621		36,400		—			44,021		—		3,795		35,178			—			38,973
Other current assets	38,990		28,067		989		(38,990		)	29,056		—		29,696		1,149			—			30,845
Total current assets	38,990		839,425		1,323,530		(387,779		)	1,814,166		—		801,741		1,278,887			(460,858		)	1,619,770
Property and equipment, net	—		1,123,650		293,878		(387		)	1,417,141		—		1,127,933		274,463			(531		)	1,401,865
Goodwill	—		1,121,941		1,051,948		—			2,173,889		—		1,122,629		1,051,260			—			2,173,889
Intangible assets, net	—		445,525		548,104		—			993,629		—		294,900		300,952			—			595,852
Long-term investments	—		2,032		60,724		—			62,756		—		4,952		85,951			—			90,903
Long-term intercompany accounts and notes receivable	—		429,900		116,122		(546,022		)	—		—		990,080		92,490			(1,082,570		)	—
Investment in subsidiaries	6,173,284		2,771,958		—		(8,945,242		)	—		6,272,369		2,450,260		—			(8,722,629		)	—
Other non-current assets	51,262		32,087		31,717		(50,000		)	65,066		109,305		32,394		30,496			(107,413		)	64,782
Total assets	$	6,263,536	$	6,766,518	$	3,426,023	$	(9,929,430	)	$	6,526,647	$	6,381,674	$	6,824,889	$	3,114,499		$	(10,374,001	)	$	5,947,061
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	—	$	69,986	$	122,060	$	—		$	192,046	$	—	$	90,561	$	138,448		$	—		$	229,009
Intercompany accounts and notes payable	—		30,113		295,369		(325,482		)	—		—		50,428		389,857			(440,285		)	—
Accrued liabilities	5,824		92,481		41,856		234			140,395		9,921		126,420		44,806			358			181,505
Other current liabilities	—		12,790		39,287		—			52,077		—		2,989		48,880			—			51,869
Total current liabilities	5,824		205,370		498,572		(325,248		)	384,518		9,921		270,398		621,991			(439,927		)	462,383
Long-term debt	1,088,730		—		—		—			1,088,730		735,098		—		—			—			735,098
Deferred tax liabilities	—		89,127		19,753		(50,001		)	58,879		—		46,815		5,478			(30,361		)	21,932
Long-term intercompany accounts and notes payable	347,904		116,122		81,996		(546,022		)	—		1,004,518		92,490		(14,438		)	(1,082,570		)	—
Other long-term liabilities	—		119,698		53,744		—			173,442		—		43,784		51,727			—			95,511
Total liabilities	1,442,458		530,317		654,065		(921,271		)	1,705,569		1,749,537		453,487		664,758			(1,552,858		)	1,314,924
Total stockholders’ equity	4,821,078		6,236,201		2,771,958		(9,008,159		)	4,821,078		4,632,137		6,371,402		2,449,741			(8,821,143		)	4,632,137
Total liabilities and stockholders’ equity	$	6,263,536	$	6,766,518	$	3,426,023	$	(9,929,430	)	$	6,526,647	$	6,381,674	$	6,824,889	$	3,114,499		$	(10,374,001	)	$	5,947,061

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)


	Condensed Consolidating Balance Sheet											Condensed Consolidating Balance Sheet
	April 1, 2017											March 31, 2018
(in thousands)	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations and Reclassifications			Consolidated		Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations and Reclassifications			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	226,186	$	319,277	$	—		$	545,463	$	—	$	629,314	$	296,723	$	—		$	926,037
Accounts receivable, less allowance	—		57,874		300,074		—			357,948		—		76,863		269,094		—			345,957
Intercompany accounts and notes receivable	—		392,075		36,603		(428,678		)	—		—		272,409		53,363		(325,772		)	—
Inventories	—		131,225		322,559		(23,330		)	430,454		—		154,651		339,434		(21,793		)	472,292
Prepaid expenses	—		29,032		7,197		—			36,229		—		17,530		6,379		—			23,909
Other receivables	—		7,239		58,008		—			65,247		—		5,959		38,836		—			44,795
Other current assets	—		25,534		730		—			26,264		—		29,627		1,188		—			30,815
Total current assets	—		869,165		1,044,448		(452,008		)	1,461,605		—		1,186,353		1,005,017		(347,565		)	1,843,805
Property and equipment, net	—		1,078,761		314,910		(1,739		)	1,391,932		—		1,085,255		289,146		(289		)	1,374,112
Goodwill	—		1,121,941		1,051,973		—			2,173,914		—		1,121,941		1,051,948		—			2,173,889
Intangible assets, net	—		599,618		800,945		—			1,400,563		—		395,317		465,019		—			860,336
Long-term investments	—		25,971		9,523		—			35,494		—		1,847		61,918		—			63,765
Long-term intercompany accounts and notes receivable	—		447,613		138,398		(586,011		)	—		—		543,127		116,494		(659,621		)	—
Investment in subsidiaries	6,142,568		2,596,172		—		(8,738,740		)	—		6,198,885		2,388,222		—		(8,587,107		)	—
Other non-current assets	84,153		33,249		24,746		(83,333		)	58,815		72,122		31,011		32,516		(70,037		)	65,612
Total assets	$	6,226,721	$	6,772,490	$	3,384,943	$	(9,861,831	)	$	6,522,323	$	6,271,007	$	6,753,073	$	3,022,058	$	(9,664,619	)	$	6,381,519
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	—	$	111,799	$	104,447	$	—		$	216,246	$	—	$	78,278	$	134,915	$	—		$	213,193
Intercompany accounts and notes payable	—		36,603		392,075		(428,678		)	—		—		53,363		272,409		(325,772		)	—
Accrued liabilities	23,150		111,700		35,734		—			170,584		23,102		101,286		43,163		(369		)	167,182
Other current liabilities	—		55		31,943		—			31,998		—		3,882		57,022		—			60,904
Total current liabilities	23,150		260,157		564,199		(428,678		)	418,828		23,102		236,809		507,509		(326,141		)	441,279
Long-term debt	989,154		—		—		—			989,154		983,290		—		—		—			983,290
Deferred tax liabilities	—		171,284		43,560		(83,333		)	131,511		—		83,449		16,366		(36,731		)	63,084
Long-term intercompany accounts and notes payable	317,695		138,398		129,918		(586,011		)	—		489,051		116,494		54,076		(659,621		)	—
Other long-term liabilities	—		35,014		51,094		—			86,108		—		62,417		55,885		—			118,302
Total liabilities	1,329,999		604,853		788,771		(1,098,022		)	1,625,601		1,495,443		499,169		633,836		(1,022,493		)	1,605,955
Total stockholders’ equity	4,896,722		6,167,637		2,596,172		(8,763,809		)	4,896,722		4,775,564		6,253,904		2,388,222		(8,642,126		)	4,775,564
Total liabilities and stockholders’ equity	$	6,226,721	$	6,772,490	$	3,384,943	$	(9,861,831	)	$	6,522,323	$	6,271,007	$	6,753,073	$	3,022,058	$	(9,664,619	)	$	6,381,519

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
Three Months Ended December 30, 2017
(in thousands) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations and Reclassifications Consolidated
Revenue $ —
$ 301,077
$ 751,995
$ (207,333 ) $ 845,739
Cost of goods sold —
212,574
473,330
(177,092 ) 508,812
Gross profit —
88,503
278,665
(30,241 ) 336,927
Operating expenses:
Research and development 7,101
6,842
97,842
(5,374 ) 106,411
Selling, general and administrative 6,381
57,166
88,016
(25,008 ) 126,555
Other operating expense 234
15,799
7,466
142
23,641
Total operating expenses 13,716
79,807
193,324
(30,240 ) 256,607
Income (loss) from operations (13,716 ) 8,696
85,341
(1 ) 80,320
Interest expense (16,001 ) (557 ) (393 ) 613
(16,338 )
Interest income —
614
2,214
(613 ) 2,215
Other expense —
(549 ) (208 ) —
(757 )
Income (loss) before income taxes (29,717 ) 8,204
86,954
(1 ) 65,440
Income tax expense (30,116 ) (59,974 ) (8,432 ) —
(98,522 )
Income in subsidiaries 26,751
78,522
—
(105,273 ) —
Net (loss) income $ (33,082 ) $ 26,752
$ 78,522
$ (105,274 ) $ (33,082 )

Comprehensive (loss) income $ (32,185 ) $ 28,630
$ 82,312
$ (110,942 ) $ (32,185 )


	Condensed Consolidating Statement of Operations and Comprehensive Loss															Condensed Consolidating Statement of Income and Comprehensive Income
	Three Months Ended December 31, 2016															Three Months Ended September 29, 2018
(in thousands)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations and Reclassifications			Consolidated			Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations and Reclassifications			Consolidated
Revenue	$	—		$	298,334		$	777,326		$	(249,313	)	$	826,347		$	—		$	236,631		$	825,844		$	(178,032	)	$	884,443
Cost of goods sold	—			227,556			548,314			(260,165		)	515,705			—			207,221			476,256			(152,548		)	530,929
Gross profit	—			70,778			229,012			10,852			310,642			—			29,410			349,588			(25,484		)	353,514
Operating expenses:
Research and development	9,115			1,961			106,749			(5,874		)	111,951			6,910			7,340			103,671			(1,173		)	116,748
Selling, general and administrative	7,540			61,606			88,590			(27,064		)	130,672			13,876			58,924			91,399			(24,692		)	139,507
Other operating expense	—			6,088			539			11			6,638
Other operating expense (income)																119			(2,192		)	8,458			397			6,782
Total operating expenses	16,655			69,655			195,878			(32,927		)	249,261			20,905			64,072			203,528			(25,468		)	263,037
Income (loss) from operations	(16,655		)	1,123			33,134			43,779			61,381			(20,905		)	(34,662		)	146,060			(16		)	90,477
Interest expense	(14,090		)	(594		)	(895		)	1,115			(14,464		)	(9,400		)	(522		)	(160		)	393			(9,689		)
Interest income	—			915			433			(1,115		)	233			—			477			1,495			(392		)	1,580
Other expense	—			(1,295		)	(1,314		)	—			(2,609		)
Other (expense) income																(48,779		)	798			(1,551		)	—			(49,532		)
Income (loss) before income taxes	(30,745		)	149			31,358			43,779			44,541			(79,084		)	(33,909		)	145,844			(15		)	32,836
Income tax (expense) benefit	9,420			(9,101		)	(123,498		)	—			(123,179		)	25,920			(20,470		)	(6,202		)	—			(752		)
Income in subsidiaries	(57,313		)	(92,140		)	—			149,453			—			85,248			139,642			—			(224,890		)	—
Net loss	$	(78,638	)	$	(101,092	)	$	(92,140	)	$	193,232		$	(78,638	)
Net income																$	32,084		$	85,263		$	139,642		$	(224,905	)	$	32,084

Comprehensive loss	$	(78,462	)	$	(101,120	)	$	(91,936	)	$	193,056		$	(78,462	)
Comprehensive income																$	32,012		$	85,347		$	139,472		$	(224,819	)	$	32,012

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)


	Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income															Condensed Consolidating Statement of Income and Comprehensive Income
	Nine Months Ended December 30, 2017															Three Months Ended September 30, 2017
(in thousands)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated			Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations and Reclassifications			Consolidated
Revenue	$	—		$	829,625		$	2,108,231		$	(629,703	)	$	2,308,153		$	—		$	256,595		$	775,682		$	(210,694	)	$	821,583
Cost of goods sold	—			592,928			1,346,505			(525,606		)	1,413,827			—			196,350			480,439			(176,228		)	500,561
Gross profit	—			236,697			761,726			(104,097		)	894,326			—			60,245			295,243			(34,466		)	321,022
Operating expenses:
Research and development	20,600			34,728			292,926			(13,946		)	334,308			6,703			11,148			97,800			(4,253		)	111,398
Selling, general and administrative	37,252			190,336			268,072			(90,807		)	404,853			16,626			66,958			86,004			(30,721		)	138,867
Other operating expense	448			39,659			12,764			239			53,110			129			16,800			4,288			(24		)	21,193
Total operating expenses	58,300			264,723			573,762			(104,514		)	792,271			23,458			94,906			188,092			(34,998		)	271,458
Income (loss) from operations	(58,300		)	(28,026		)	187,964			417			102,055			(23,458		)	(34,661		)	107,151			532			49,564
Interest expense	(42,367		)	(1,689		)	(1,161		)	1,830			(43,387		)	(14,442		)	(557		)	(434		)	655			(14,778		)
Interest income	—			1,439			4,430			(1,830		)	4,039			—			331			1,382			(655		)	1,058
Other (expense) income	—			207			(2,090		)	—			(1,883		)	—			970			(3,880		)	2,718			(192		)
Income (loss) before income taxes	(100,667		)	(28,069		)	189,143			417			60,824			(37,900		)	(33,917		)	104,219			3,250			35,652
Income tax (expense) benefit	5,657			(76,149		)	(18,119		)	—			(88,611		)
Income tax benefit (expense)																19,527			(8,651		)	(10,609		)	—			267
Income in subsidiaries	67,223			171,024			—			(238,247		)	—			54,292			93,610			—			(147,902		)	—
Net (loss) income	$	(27,787	)	$	66,806		$	171,024		$	(237,830	)	$	(27,787	)
Net income																$	35,919		$	51,042		$	93,610		$	(144,652	)	$	35,919

Comprehensive (loss) income	$	(26,563	)	$	68,783		$	172,528		$	(241,311	)	$	(26,563	)
Comprehensive income																$	35,527		$	51,080		$	90,666		$	(141,746	)	$	35,527


	Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income															Condensed Consolidating Statement of Income and Comprehensive (Loss) Income
	Nine Months Ended December 31, 2016															Six Months Ended September 29, 2018
(in thousands)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated			Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	1,030,877		$	2,329,712		$	(971,007	)	$	2,389,582		$	—		$	468,570		$	1,451,805		$	(343,262	)	$	1,577,113
Cost of goods sold	—			785,654			1,609,839			(909,827		)	1,485,666			—			397,532			885,953			(296,619		)	986,866
Gross profit	—			245,223			719,873			(61,180		)	903,916			—			71,038			565,852			(46,643		)	590,247
Operating expenses:
Research and development	27,032			24,239			320,280			(16,385		)	355,166			13,311			10,619			206,119			(2,398		)	227,651
Selling, general and administrative	46,259			192,933			282,444			(108,786		)	412,850			26,671			116,880			177,778			(45,892		)	275,437
Other operating expense	—			9,827			7,426			6,132			23,385			269			5,748			9,512			368			15,897
Total operating expenses	73,291			226,999			610,150			(119,039		)	791,401			40,251			133,247			393,409			(47,922		)	518,985
Income (loss) from operations	(73,291		)	18,224			109,723			57,859			112,515			(40,251		)	(62,209		)	172,443			1,279			71,262
Interest expense	(44,025		)	(2,001		)	(2,793		)	3,614			(45,205		)	(23,442		)	(1,059		)	(321		)	780			(24,042		)
Interest income	—			3,906			204			(3,407		)	703			—			2,883			2,870			(779		)	4,974
Other expense	—			(1,427		)	(478		)	(1,515		)	(3,420		)
Income (loss) before income taxes	(117,316		)	18,702			106,656			56,551			64,593
Income tax (expense) benefit	37,039			(69,252		)	(104,846		)	—			(137,059		)
Other (expense) income																(82,152		)	1,126			(461		)	—			(81,487		)
(Loss) income before income taxes																(145,845		)	(59,259		)	174,531			1,280			(29,293		)
Income tax benefit (expense)																37,374			(3,666		)	(2,324		)	—			31,384
Income in subsidiaries	7,811			1,810			—			(9,621		)	—			110,562			172,207			—			(282,769		)	—
Net (loss) income	$	(72,466	)	$	(48,740	)	$	1,810		$	46,930		$	(72,466	)
Net income																$	2,091		$	109,282		$	172,207		$	(281,489	)	$	2,091

Comprehensive (loss) income	$	(72,887	)	$	(48,695	)	$	1,344		$	47,351		$	(72,887	)	$	(165	)	$	109,371		$	169,727		$	(279,098	)	$	(165	)

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Condensed Consolidating Statement of Cash Flows
Nine Months Ended December 30, 2017
(in thousands) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations and Reclassifications Consolidated
Net cash provided by operating activities $ 53,060
$ 175,303
$ 365,199
$ —
$ 593,562
Investing activities:
Purchase of property and equipment —
(198,517 ) (39,141 ) —
(237,658 )
Other investing activities —
21,534
(30,247 ) —
(8,713 )
Net transactions with related parties —
24,100
(24,100 ) —
—
Net cash used in investing activities —
(152,883 ) (93,488 ) —
(246,371 )
Financing activities:
Proceeds from debt issuances 100,000
—
—
—
100,000
Debt issuance costs (1,903 ) —
—
—
(1,903 )
Proceeds from the issuance of common stock 42,121
—
—
—
42,121
Repurchase of common stock, including transaction costs (168,935 ) —
—
—
(168,935 )
Tax withholding paid on behalf of employees for restricted stock units (24,343 ) —
—
—
(24,343 )
Net transactions with related parties —
1,031
(1,031 ) —
—
Net cash (used in) provided by financing activities (53,060 ) 1,031
(1,031 ) —
(53,060 )
Effect of exchange rate changes on cash —
—
1,771
—
1,771
Net increase in cash, cash equivalents and restricted cash —
23,451
272,451
—
295,902
Cash, cash equivalents and restricted cash at the beginning of the period —
226,186
319,593
—
545,779
Cash, cash equivalents and restricted cash at the end of the period $ —
$ 249,637
$ 592,044
$ —
$ 841,681



	Condensed Consolidating Statement of Income and Comprehensive Income
	Six Months Ended September 30, 2017
(in thousands)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	528,548		$	1,356,236		$	(422,370	)	$	1,462,414
Cost of goods sold	—			380,354			873,175			(348,514		)	905,015
Gross profit	—			148,194			483,061			(73,856		)	557,399
Operating expenses:
Research and development	13,499			27,886			195,084			(8,572		)	227,897
Selling, general and administrative	30,871			133,170			180,056			(65,799		)	278,298
Other operating expense	214			23,860			5,298			97			29,469
Total operating expenses	44,584			184,916			380,438			(74,274		)	535,664
Income (loss) from operations	(44,584		)	(36,722		)	102,623			418			21,735
Interest expense	(26,366		)	(1,132		)	(768		)	1,217			(27,049		)
Interest income	—			825			2,216			(1,217		)	1,824
Other (expense) income	—			756			(1,882		)	—			(1,126		)
(Loss) income before income taxes	(70,950		)	(36,273		)	102,189			418			(4,616		)
Income tax benefit (expense)	35,773			(16,175		)	(9,687		)	—			9,911
Income in subsidiaries	40,472			92,502			—			(132,974		)	—
Net income	$	5,295		$	40,054		$	92,502		$	(132,556	)	$	5,295

Comprehensive income	$	5,622		$	40,153		$	90,216		$	(130,369	)	$	5,622

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)


	Condensed Consolidating Statement of Cash Flows														Condensed Consolidating Statement of Cash Flows
	Nine Months Ended December 31, 2016														Six Months Ended September 29, 2018
(in thousands)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations and Reclassifications		Consolidated			Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations and Reclassifications			Consolidated
Net cash provided by operating activities	$	135,096		$	72,178		$	322,475				$	529,749
Net cash provided by (used in) operating activities															$	522,959		$	(548,315	)	$	315,152		$	—		$	289,796
Investing activities:
Purchase of property and equipment	—			(275,018		)	(111,937		)	—		(386,955		)	—			(95,897		)	(17,769		)	—			(113,666		)
Purchase of a business, net of cash acquired	—			—			(118,002		)	—		(118,002		)
Proceeds from maturities and sales of available-for-sale securities	—			186,793			—			—		186,793
Purchase of debt securities and other investments															—			(132,729		)	—			—			(132,729		)
Proceeds from maturities of other investments															—			133,132			—			—			133,132
Other investing activities	—			3,810			(8,900		)	—		(5,090		)	—			(1,086		)	(18,406		)	—			(19,492		)
Net cash used in investing activities	—			(84,415		)	(238,839		)	—		(323,254		)
Net transactions with related parties															—			110,047			—			(110,047		)	—
Net cash (used in) provided by investing activities															—			13,467			(36,175		)	(110,047		)	(132,755		)
Financing activities:
Excess tax benefit from exercises of stock options	12			—			—			—		12
Payment of debt															(954,745		)	—			—			—			(954,745		)
Proceeds from debt issuances															631,300			—			—			—			631,300
Repurchase of common stock, including transaction costs															(186,682		)	—			—			—			(186,682		)
Proceeds from the issuance of common stock	38,417			—			—			—		38,417			18,406			—			—			—			18,406
Repurchase of common stock, including transaction costs	(158,491		)	—			—			—		(158,491		)
Tax withholding paid on behalf of employees for restricted stock units	(15,034		)	—			—			—		(15,034		)	(24,181		)	—			—			—			(24,181		)
Other financing activities	—			20			—			—		20			(7,057		)	—			—			—			(7,057		)
Net transactions with related parties	—			1,238			(1,238		)			—			—			686			(110,733		)	110,047			—
Net cash (used in) provided by financing activities	(135,096		)	1,258			(1,238		)	—		(135,076		)	(522,959		)	686			(110,733		)	110,047			(522,959		)
Effect of exchange rate changes on cash	—			—			(1,358		)	—		(1,358		)	—			—			(2,216		)	—			(2,216		)
Net increase (decrease) in cash, cash equivalents and restricted cash	—			(10,979		)	81,040			—		70,061
Net (decrease) increase in cash, cash equivalents and restricted cash															—			(534,162		)	166,028			—			(368,134		)
Cash, cash equivalents and restricted cash at the beginning of the period	—			220,633			205,429			—		426,062			—			629,314			297,088			—			926,402
Cash, cash equivalents and restricted cash at the end of the period	$	—		$	209,654		$	286,469		$	—	$	496,123		$	—		$	95,152		$	463,116		$	—		$	558,268

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)



	Condensed Consolidating Statement of Cash Flows
	Six Months Ended September 30, 2017
(in thousands)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations and Reclassifications		Consolidated
Net cash provided by (used in) operating activities	$	80,063		$	(2,241	)	$	245,672		$	—	$	323,494
Investing activities:
Purchase of property and equipment	—			(159,337		)	(32,882		)	—		(192,219		)
Other investing activities	—			7,154			(30,182		)	—		(23,028		)
Net transactions with related parties	—			24,100			(24,100		)	—		—
Net cash used in investing activities	—			(128,083		)	(87,164		)	—		(215,247		)
Financing activities:
Repurchase of common stock, including transaction costs	(88,925		)	—			—			—		(88,925		)
Proceeds from the issuance of common stock	32,867			—			—			—		32,867
Tax withholding paid on behalf of employees for restricted stock units	(24,005		)	—			—			—		(24,005		)
Net transactions with related parties	—			686			(686		)	—		—
Net cash (used in) provided by financing activities	(80,063		)	686			(686		)	—		(80,063		)
Effect of exchange rate changes on cash	—			—			1,260			—		1,260
Net increase (decrease) in cash, cash equivalents and restricted cash	—			(129,638		)	159,082			—		29,444
Cash, cash equivalents and restricted cash at the beginning of the period	—			226,186			319,593			—		545,779
Cash, cash equivalents and restricted cash at the end of the period	$	—		$	96,548		$	478,675		$	—	$	575,223

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 contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that relate to our plans, objectives, estimates and goals. Statements expressing expectations regarding our future and projections relating to products, sales, revenues and earnings are typical of such statements and are made under the Private Securities Litigation Reform Act of 1995. Words such as "expect," "anticipate," "intend," "plan," "believe," "estimate," "forecast," and "predict," and variations of such words and similar expressions, identify such forward-looking statements. Our business is subject to numerous risks and uncertainties, including, but not limited to the factors listed below:

business, political, and macroeconomic changes, including trade disputes and downturns in the semiconductor industry and the overall global economy;

our ability to ~~predict market requirements and define and design~~introduce new products that ~~address those requirements;~~are competitive and can be manufactured at lower costs or that command higher prices based on superior performance;

our ability to ~~predict customer~~forecast our customers' demand ~~accurately to limit obsolete inventory, which would reduce~~for our ~~margins;~~products accurately;

our customers’ and distributors’ ability to manage the inventory they hold and accurately forecast their demand for our products;

our ability to successfully integrate acquired businesses, operations, product technologies and personnel as well as achieve expected synergies;

~~our ability to meet certain development, supply, quality and other commitments under our supply arrangement with our largest customer with respect to a module for its 2018 smartphones;~~

our ability to achieve cost savings and improve yields and margins on our new and existing products;

our ability to utilize our capacity efficiently, or to acquire or source additional capacity, in response to customer demand;

our ability to continue to improve our product designs, develop new products, and achieve design wins as our industry's ~~technology changes~~product life cycles are short and our customers’ requirements change rapidly;

our dependence on a limited number of customers for a substantial portion of our revenue;

our reliance on the U.S. government and on U.S. government sponsored programs (principally for defense and aerospace applications) for a portion of our revenue;

our ability to bring new products to market in response to market shifts and to use technological innovation to shorten time-to-market for our products;

our ability to efficiently and successfully operate our wafer fabrication, ~~facilities,~~ assembly ~~facilities~~ and test and tape and reel facilities;

variability in manufacturing yields and product quality;

variability in raw material costs and availability of raw materials;

our dependence on third parties, including distributors, wafer foundries, wafer starting material suppliers, passive component manufacturers, assembly and packaging suppliers and test and tape and reel suppliers;

our ability to manage platform provider and customer relationships;

our ability to procure, commercialize and enforce intellectual property rights ("IPR") and to operate our business without infringing on the unlicensed IPR of others;

the risks associated with security breaches and other ~~similar~~ disruptions or events, which could compromise our or our customers' proprietary information and expose us to liability and could cause our business and reputation to suffer;

the possibility that we may be subject to theft, loss or misuse of personal data by or about our employees, customers or other third parties;

currency fluctuations, tariffs, trade barriers, tax and export license requirements and health and security issues associated with our foreign operations;

the impact of ~~stringent~~ environmental, health and safety ~~regulations;~~regulations and climate change;

the impact of changes in generally accepted accounting principles and in tax laws or the interpretation of such tax laws, including the U.S. Tax Cuts and Jobs Act ~~enacted during the third quarter of fiscal 2018, and changes in generally accepted accounting principles;~~(the "Tax Act");

the impact of the ~~implementation of~~Organisation for Economic Co-operation and Development Base Erosion and Profit Shifting initiative on tax policy and enacted laws in the ~~Tax Cuts and Jobs Act on our business and results of operations; and~~countries in which we operate;

our ability to attract and retain skilled personnel and develop leaders for key business units and ~~functions.~~functions; and

the possibility that future acquisitions may dilute our stockholders’ ownership and cause us to incur debt and assume contingent liabilities or adversely affect our results of operations.

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 the actual results and developments to be materially different from those expressed or implied by any of these forward-looking statements. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update or revise such statements, except as required by the federal securities laws.

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.

We are a product and technology leader at the forefront of the growing global demand for always-on broadband connectivity. We combine a broad portfolio of radio frequency ("RF") solutions, highly differentiated semiconductor technologies, deep systems-level expertise and ~~high volume~~ scale manufacturing to supply a diverse group of customers in expanding markets, including smartphones and other mobile devices, defense and aerospace, Wi-Fi customer premises equipment, cellular base stations, optical networks, automotive connectivity and ~~other Internet of Things ("IoT"), including~~ smart home applications. Within these markets, our products enable a broad range of leading-edge applications — from very-high-power wired and wireless infrastructure solutions to ultra-low-power smart home solutions. Our products and technologies help transform how people around the world access their data, transact commerce, and interact with their communities.

We employ more than ~~8,500~~8,200 people. We have world-class manufacturing facilities, and our fabrication facility in Richardson, Texas, is a U.S. Department of Defense accredited ‘Trusted Source’ (Category 1A) for gallium arsenide ("GaAs"), gallium nitride ("GaN") and bulk acoustic wave ("BAW") technologies. Our design and manufacturing expertise covers many semiconductor process technologies, which we source both internally and through external suppliers. Our primary wafer fabrication facilities are in ~~the U.S. (Florida,~~Florida, North Carolina, Oregon and ~~Texas),~~Texas, and our primary assembly and test facilities are in China, Costa Rica, Germany and ~~the U.S. (Texas).~~Texas. We also operate design, sales and manufacturing facilities throughout Asia, Europe and North America.

We design, develop, manufacture and market our products to leading U.S. and international original equipment manufacturers and original design manufacturers in the following operating segments:

Mobile Products (MP) - MP is a leading global supplier of cellular RF and Wi-Fi solutions for a variety of mobile devices, including smartphones, notebook computers, wearables, tablets and cellular-based applications for the ~~IoT.~~Internet of Things ("IoT"). Mobile device manufacturers and mobile network operators are adopting new technologies to address the growing demand for data-intensive, increasingly cloud-based distributed applications and for mobile devices with smaller form

factors, improved signal quality, less heat and longer talk and standby times. New wireless communications standards are being deployed, ~~to utilize available spectrum more efficiently.~~and new frequency bands are being added. Carrier aggregation is being implemented to support wider bandwidths, increase data rates and improve network performance. These trends increase the complexity of smartphones, require more RF content and place a premium on performance, integration, systems-level expertise, and product and technology

portfolio breadth, all of which are MP strengths. We offer a comprehensive product portfolio of BAW and surface acoustic wave ("SAW") filters, power amplifiers ("PAs"), low noise amplifiers ("LNAs"), switches, multimode multi-band PAs and transmit modules, RF power management integrated circuits, diversity receive modules, antenna switch modules, antenna tuning and control solutions, modules incorporating PAs and duplexers ("PADs") and modules incorporating switches, PAs and duplexers.

Infrastructure and Defense Products (IDP) - IDP is a leading global supplier of RF solutions with a diverse portfolio of solutions that "connect and protect," spanning communications and defense applications. These applications include high performance defense systems such as radar, electronic warfare and communication systems, Wi-Fi customer premises equipment for home and work, high speed connectivity in Long-Term Evolution ("LTE") and 5G base stations, cloud connectivity via data center communications and telecom transport, automotive connectivity and other IoT, including smart home solutions. Our IDP products include GaAs and GaN PAs, LNAs, switches, Complementary Metal Oxide Semiconductor ("CMOS") system-on-a-chip solutions, premium BAW and SAW filter solutions and various multi-chip and hybrid assemblies.

As of ~~December 30, 2017,~~September 29, 2018, 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 operating income and operating income as a percentage of revenue (see Note 129 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 ~~2018~~2019 FINANCIAL HIGHLIGHTS:

Quarterly revenue increased ~~2.3%~~7.7% as compared to the ~~third~~second quarter of fiscal ~~2017,~~2018, primarily due to higher demand for our cellular RF solutions in support of our customers based in China and our largest end customer as well as higher demand for our ~~defense~~base station and ~~aerospace products and our~~ Wi-Fi ~~products, partially offset by lower demand for our cellular RF solutions in support of customers based in China.~~products.

Gross margin for the ~~third~~second quarter of fiscal ~~2018~~2019 was ~~39.8%~~40.0% as compared to ~~37.6%~~39.1% for the ~~third~~second quarter of fiscal ~~2017.~~2018. The increase was primarily due to favorable changes in product mix within our cellular RF solutions, ~~and lower depreciation (see Note 2 to the Condensed Consolidated Financial Statements),~~ partially offset by ~~higher intangible amortization,~~ average selling price ~~erosion and lower factory utilization.~~erosion.

Our operating income was ~~$80.3~~$90.5 million for the three months ended ~~December 30, 2017~~September 29, 2018 as compared to operating income of ~~$61.4~~$49.6 million for the three months ended ~~December 31, 2016.~~September 30, 2017, primarily due to higher revenue, improved gross margin and lower operating expenses.

During the second quarter of fiscal 2019, we recognized a loss on debt extinguishment of $48.8 million.

Diluted net ~~loss~~income per share for the ~~third~~second quarter of fiscal ~~2018~~2019 was ~~$0.26~~$0.25 as compared to ~~diluted net loss per share of $0.62~~$0.27 for the ~~third~~second quarter of fiscal ~~2017.~~2018. This year-over-year decrease was primarily due to the loss on debt extinguishment recognized in the second quarter of fiscal 2019.

Cash flow from operations was ~~$270.1~~$214.5 million for the ~~third~~second quarter of fiscal ~~2018~~2019 as compared to ~~$220.4~~$219.9 million for the ~~third~~second quarter of fiscal ~~2017.~~2018.

Capital expenditures were ~~$45.5~~$70.1 million for the ~~third~~second quarter of fiscal ~~2018~~2019 as compared to ~~$136.5~~$67.8 million for the ~~third~~second quarter of fiscal 2017. This year-over-year decrease was primarily due to lower capital expenditures related to projects initiated in fiscal 2017 to increase premium filter capacity and for manufacturing cost savings initiatives.

The Tax Cuts and Jobs Act (the "Tax Act"), enacted during the third quarter of fiscal 2018, lowers the U.S. federal corporate income tax rate from 35% to 21% as of January 1, 2018 and implements a territorial tax system that will allow the repatriation of future foreign earnings without incurring additional U.S. federal income tax. This tax law change resulted in a provisional tax benefit of $43.6 million to reduce the U.S. deferred tax assets and liabilities and a provisional tax expense of $139.5 million for the one-time deemed repatriation of our historical unremitted foreign earnings. 2018.

During the ~~third~~second quarter of fiscal ~~2018,~~2019, we received a Section 19B incentive grant in Singapore which allows us to retroactively amortize $124.2 million of previously non-deductible payments made in prior years.

During the second quarter of fiscal 2019, we completed the purchase of $436.4 million aggregate principal amount of our 7.00% senior notes due 2025 (the "2025 Notes").

During the second quarter of fiscal 2019, we redeemed the remaining $15.3 million aggregate principal amount of our 6.75% senior notes due 2023 (the "2023 Notes").

During the second quarter of fiscal 2019, we completed an offering of $630.0 million aggregate principal amount of our 5.50% senior notes due 2026 (the "2026 Notes").

During the second quarter of fiscal 2019, we repurchased approximately 1.1 million shares of our common stock for approximately ~~$80.0~~$86.7 million.

RESULTS OF OPERATIONS

Consolidated

The following table presents a summary of our results of operations for the three and ~~nine~~six months ended ~~December 30, 2017~~September 29, 2018 and ~~December 31, 2016~~September 30, 2017 (in thousands, except percentages):


	Three Months Ended													Three Months Ended
	December 30, 2017		% of Revenue		December 31, 2016		% of Revenue		Increase (Decrease)			Percentage Change		September 29, 2018		% of Revenue		September 30, 2017		% of Revenue		Increase (Decrease)			Percentage Change
Revenue	$	845,739	100.0	%	$	826,347	100.0	%	$	19,392		2.3	%	$	884,443	100.0	%	$	821,583	100.0	%	$	62,860		7.7	%
Cost of goods sold	508,812		60.2		515,705		62.4		(6,893		)	(1.3	)	530,929		60.0		500,561		60.9		30,368			6.1
Gross profit	336,927		39.8		310,642		37.6		26,285			8.5		353,514		40.0		321,022		39.1		32,492			10.1
Research and development	106,411		12.6		111,951		13.6		(5,540		)	(4.9	)	116,748		13.2		111,398		13.6		5,350			4.8
Selling, general and administrative	126,555		14.9		130,672		15.8		(4,117		)	(3.2	)	139,507		15.8		138,867		16.9		640			0.5
Other operating expense	23,641		2.8		6,638		0.8		17,003			256.1		6,782		0.8		21,193		2.6		(14,411		)	(68.0	)
Operating income	$	80,320	9.5	%	$	61,381	7.4	%	$	18,939		30.9	%	$	90,477	10.2	%	$	49,564	6.0	%	$	40,913		82.5	%

	Nine Months Ended													Six Months Ended
	December 30, 2017		% of Revenue		December 31, 2016		% of Revenue		Increase (Decrease)			Percentage Change		September 29, 2018		% of Revenue		September 30, 2017		% of Revenue		Increase (Decrease)			Percentage Change
Revenue	$	2,308,153	100.0	%	$	2,389,582	100.0	%	$	(81,429	)	(3.4	)%	$	1,577,113	100.0	%	$	1,462,414	100.0	%	$	114,699		7.8	%
Cost of goods sold	1,413,827		61.3		1,485,666		62.2		(71,839		)	(4.8	)	986,866		62.6		905,015		61.9		81,851			9.0
Gross profit	894,326		38.7		903,916		37.8		(9,590		)	(1.1	)	590,247		37.4		557,399		38.1		32,848			5.9
Research and development	334,308		14.5		355,166		14.8		(20,858		)	(5.9	)	227,651		14.4		227,897		15.6		(246		)	(0.1	)
Selling, general and administrative	404,853		17.5		412,850		17.3		(7,997		)	(1.9	)	275,437		17.5		278,298		19.0		(2,861		)	(1.0	)
Other operating expense	53,110		2.3		23,385		1.0		29,725			127.1		15,897		1.0		29,469		2.0		(13,572		)	(46.1	)
Operating income	$	102,055	4.4	%	$	112,515	4.7	%	$	(10,460	)	(9.3	)%	$	71,262	4.5	%	$	21,735	1.5	%	$	49,527		227.9	%

Revenue increased for the three and six months ended ~~December 30, 2017~~September 29, 2018, as compared to the three and six months ended ~~December 31, 2016,~~September 30, 2017, primarily due to higher demand for our cellular RF solutions in support of our customers based in China and our largest end customer as well as higher demand for our ~~defense~~base station and ~~aerospace products and our Wi-Fi products, partially offset by lower demand for our cellular RF solutions in support of customers based in China.~~

Revenue decreased for the nine months ended December 30, 2017, as compared to the nine months ended December 31, 2016, primarily due to lower demand for our cellular RF solutions in support of customers based in China, partially offset by higher demand for our cellular RF solutions in support of our largest customer as well as higher demand for our defense and aerospace and our Wi-Fi products.

Gross margin for the three months ended ~~December 30, 2017~~September 29, 2018 was ~~39.8%~~40.0%, as compared to ~~37.6%~~39.1% for the three months ended ~~December 31, 2016.~~September 30, 2017. The increase was primarily due to favorable changes in product mix within our cellular RF solutions, ~~and lower depreciation (see Note 2 to the Condensed Consolidated Financial Statements),~~ partially offset by ~~higher intangible amortization,~~ average selling price ~~erosion and lower factory utilization.~~erosion.

Gross margin for the ~~nine~~six months ended ~~December 30, 2017~~September 29, 2018 was ~~38.7%~~37.4%, as compared to ~~37.8%~~38.1% for the ~~nine~~six months ended ~~December 31, 2016.~~September 30, 2017. The ~~increase~~decrease was primarily due to average selling price erosion, partially offset by favorable changes in product mix within our cellular RF solutions, improved manufacturing and test yields on certain high volume parts (including the low-band PAD modules that were adversely affected by unfavorable inventory adjustments in the second quarter of fiscal 2017) and lower depreciation (see Note 2 to the Condensed Consolidated Financial Statements). These increases to gross margin were partially offset by higher intangible amortization, average selling price erosion and lower factory utilization.

solutions.

Operating Expenses

Research and development expense ~~decreased~~increased for the three ~~and nine~~ months ended ~~December 30, 2017,~~September 29, 2018, as compared to the three ~~and nine~~ months ended ~~December 31, 2016,~~September 30, 2017, primarily due to ~~ongoing efforts~~higher personnel related costs. Research and development expense was relatively flat for the six months ended September 29, 2018, as compared to ~~optimize our~~the six months ended September 30, 2017, with the timing of product ~~portfolio and restructuring actions that were initiated during the second quarter of fiscal 2018 to improve operating efficiencies.~~development spend being offset by higher personnel related costs.

Selling, general and administrative expense was relatively flat for the three months ended September 29, 2018, as compared to the three months ended September 30, 2017, with higher personnel related costs being offset by lower intangible amortization. Selling, general and administrative expense decreased for the six months ended September 29, 2018, as compared to the six months ended September 30, 2017, primarily due to lower intangible amortization expense.

Other operating expense decreased for the three and ~~nine~~six months ended ~~December 30, 2017,~~September 29, 2018, as compared to the three and ~~nine~~six months ended ~~December 31, 2016,~~September 30, 2017, primarily due to a decrease in restructuring charges (primarily related to employee termination benefits and impairment charges on held for sale assets) associated with the cost reduction actions ~~that were~~ initiated ~~during~~in the second quarter of fiscal ~~2018 to improve operating efficiencies.~~

~~Other operating expense increased~~2018. In addition, for the three and ~~nine~~six months ended ~~December 30, 2017,~~September 29, 2018, as compared to the three and ~~nine~~six months ended December 31, 2016, primarily due to restructuring actions that were initiated during the second quarter of fiscal 2018 to improve operating efficiencies. As a result of these actions, restructuring charges of approximately $8.2 million and $15.0 million, respectively (primarily related to employee termination benefits), and a loss on asset disposal of approximately $6.7 million and $9.7 million, respectively, were recorded for the three and nine months ended December 30, 2017. We expect to record additional restructuring charges of approximately $1.8 million primarily associated with employee termination benefits. In addition, for the three and nine months ended DecemberSeptember 30, 2017, ~~as compared to the three and nine months ended December 31, 2016,~~ we recorded ~~higher start-up costs, partially offset by~~ lower acquisition and integration related costs and start-up costs.

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 30, 2017			December 31, 2016			Increase (Decrease)			Percentage Change		September 29, 2018			September 30, 2017			Increase		Percentage Change
Revenue	$	642,089		$	656,788		$	(14,699	)	(2.2	)%	$	666,539		$	630,397		$	36,142	5.7	%
Operating income	190,990			163,401			27,589			16.9		196,948			172,892			24,056		13.9
Operating income as a % of revenue	29.7		%	24.9		%						29.5		%	27.4		%

	Nine Months Ended											Six Months Ended
(In thousands, except percentages)	December 30, 2017			December 31, 2016			Decrease			Percentage Change		September 29, 2018			September 30, 2017			Increase		Percentage Change
Revenue	$	1,728,709		$	1,910,003		$	(181,294	)	(9.5	)%	$	1,152,618		$	1,086,620		$	65,998	6.1	%
Operating income	451,689			460,775			(9,086		)	(2.0	)	286,119			260,699			25,420		9.8
Operating income as a % of revenue	26.1		%	24.1		%						24.8		%	24.0		%

MP revenue ~~decreased~~increased for the three and ~~nine~~six months ended ~~December 30, 2017,~~September 29, 2018, as compared to the three and ~~nine~~six months ended ~~December 31, 2016,~~September 30, 2017, primarily due to ~~lower~~higher demand for our cellular RF solutions in support of customers based in China ~~partially offset by higher demand for~~and our ~~cellular RF solutions in support of our~~ largest end customer.

~~The increase in~~ MP operating income ~~as a percentage of revenue~~increased $24.1 million, or 13.9%, for the three months ended ~~December 30, 2017,~~September 29, 2018, as compared to the three months ended ~~December 31, 2016, was~~September 30, 2017, primarily due to higher revenue and higher gross ~~margin and lower operating expense.~~margin. Gross margin ~~increased primarily due to~~was positively impacted by favorable changes in product mix within our cellular RF solutions and ~~lower depreciation (see Note 2 to the Condensed Consolidated Financial Statements),~~higher factory utilization, partially offset by average selling price ~~erosion~~erosion.

MP operating income increased $25.4 million, or 9.8%, for the six months ended September 29, 2018, as compared to the six months ended September 30, 2017, primarily due to higher revenue and lower ~~factory utilization.~~operating expenses, partially offset by lower gross margin. Operating ~~expense~~expenses decreased primarily due to ~~ongoing efforts to optimize our~~timing of product ~~portfolio and restructuring actions that were initiated during the second quarter of fiscal 2018 to improve operating efficiencies.~~

The increase in MP operating income as a percentage of revenue for the nine months ended December 30, 2017, as compared to the nine months ended December 31, 2016, was primarily due to higher gross margin and lower operating expense.development spend. Gross margin ~~increased primarily due to~~was negatively impacted by average selling price erosion, partially offset by favorable changes in product mix within our cellular RF solutions ~~improved manufacturing~~ and test yields on certain high volume parts (including the low-band PAD modules that were adversely affected by unfavorable inventory adjustments in the second quarter of fiscal 2017) and lower depreciation (see Note 2 to the Condensed Consolidated Financial Statements). These increases to gross margin were partially offset by average selling price erosion and lowerhigher factory utilization. Operating expense decreased primarily due to ongoing efforts to optimize our product portfolio and restructuring actions that were initiated during the second quarter of fiscal 2018 to improve operating efficiencies.

Infrastructure and Defense Products


	Three Months Ended										Three Months Ended
(In thousands, except percentages)	December 30, 2017			December 31, 2016			Increase		Percentage Change		September 29, 2018			September 30, 2017			Increase (Decrease)			Percentage Change
Revenue	$	202,680		$	168,589		$	34,091	20.2	%	$	217,904		$	190,216		$	27,688		14.6	%
Operating income	63,281			45,278			18,003		39.8		56,311			57,649			(1,338		)	(2.3	)
Operating income as a % of revenue	31.2		%	26.9		%					25.8		%	30.3		%

	Nine Months Ended										Six Months Ended
(In thousands, except percentages)	December 30, 2017			December 31, 2016			Increase		Percentage Change		September 29, 2018			September 30, 2017			Increase			Percentage Change
Revenue	$	576,534		$	476,669		$	99,865	21.0	%	$	424,495		$	373,854		$	50,641		13.5	%
Operating income	170,516			112,345			58,171		51.8		111,515			107,235			4,280			4.0
Operating income as a % of revenue	29.6		%	23.6		%					26.3		%	28.7		%

IDP revenue increased for the three and ~~nine~~six months ended ~~December 30, 2017,~~September 29, 2018, as compared to the three and ~~nine~~six months ended ~~December 31, 2016,~~September 30, 2017, primarily due to higher demand for our ~~defense and aerospace~~base station and Wi-Fi products.

The decrease in IDP operating income for the three months ended September 29, 2018, as compared to the three months ended September 30, 2017 was primarily due to lower gross margin and higher operating expenses, partially offset by higher revenue. Gross margin was negatively impacted by lower fab utilization, changes in product mix, and inventory adjustments associated with product quality and end of life products. Operating expenses increased primarily due to higher personnel related costs.

The increase in IDP operating income for the ~~three and nine~~six months ended ~~December 30, 2017,~~September 29, 2018, as compared to the ~~three and nine~~six months ended ~~December 31, 2016~~September 30, 2017 was primarily due to higher ~~revenue.~~revenue, partially offset by lower gross margin and higher operating expenses. Gross margin was negatively impacted by changes in product mix and inventory adjustments associated with product quality and end of life products. Operating expenses increased primarily due to higher personnel related costs.

See Note 129 to the Condensed Consolidated Financial Statements for a reconciliation of segment operating income to the consolidated operating income (loss) for the three and ~~nine~~six months ended ~~December 30, 2017 and December 31, 2016.~~

~~Change in Estimate~~

During the first quarter of fiscal 2018, we changed our accounting estimate for the expected useful lives of certain machinery and equipment. We evaluated our current asset base and reassessed the estimated useful lives of certain machinery and equipment in connection with the implementation of several capital projects, including the migration of certain SAW processes from 4-inch to 6-inch toolsets and certain BAW processes from 6-inch to 8-inch toolsets. Based on our ability to re-use equipment across generations of process technologies and historical usage trends, we determined that the expected useful lives for certain machinery and equipment should be increased by up to three years to reflect more closely the estimated economic lives of those assets. This change in estimate was applied prospectively effective for the first quarter of fiscalSeptember 29, 2018 and ~~resulted in a decrease in depreciation expense of $15.6 million and $45.4 million for the three and nine months ended December~~September 30, 2017, respectively. This decrease in depreciation expense for the three and nine months ended December 30, 2017, resulted in the following: (1) an increase to income from operations of $15.4 million and $32.7 million, respectively; (2) an increase to net income of $14.9 million and $30.5 million, respectively; (3) an improvement to earnings per share of $0.12 and $0.24, respectively; and (4) a reduction to inventory of $0.2 million and $12.7 million, respectively.

This change in depreciable lives is expected to lower depreciation expense for the remainder of fiscal 2018 by approximately $15.6 million (increasing gross profit by approximately $12.8 million and decreasing operating expenses by approximately $2.6 million).2017.

OTHER (EXPENSE) INCOME AND INCOME TAXES


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
(In thousands)	December 30, 2017			December 31, 2016			December 30, 2017			December 31, 2016			September 29, 2018			September 30, 2017			September 29, 2018			September 30, 2017
Interest expense	$	(16,338	)	$	(14,464	)	$	(43,387	)	$	(45,205	)	$	(9,689	)	$	(14,778	)	$	(24,042	)	$	(27,049	)
Interest income	2,215			233			4,039			703			1,580			1,058			4,974			1,824
Other expense	(757		)	(2,609		)	(1,883		)	(3,420		)	(49,532		)	(192		)	(81,487		)	(1,126		)
Income tax expense	(98,522		)	(123,179		)	(88,611		)	(137,059		)
Income tax (expense) benefit													(752		)	267			31,384			9,911

Interest Expense

During the three and ~~nine~~six months ended ~~December 30, 2017,~~September 29, 2018, we recorded interest expense of $10.9 million and $28.0 million, respectively, related to the 2023 Notes, 2025 Notes and the ~~Term Loan of $17.7 million and $52.3 million, respectively~~2026 Notes (which was offset by ~~$2.0~~$1.8 million and ~~$10.8~~$5.3 million of capitalized interest, respectively). During the three and ~~nine~~six months ended ~~December 31, 2016,~~September 30, 2017, we recorded interest expense of ~~$17.4~~$17.3 million and ~~$52.2~~$34.6 million, respectively, related to the 2023 Notes and 2025 Notes (which was offset by ~~$3.6~~$3.2 million and ~~$9.0~~$8.8 million of capitalized interest, respectively).

During the first half of fiscal 2019, we completed the purchase (via tender offer) of $429.2 million and $436.4 million aggregate principal amounts of our 2023 Notes and 2025 Notes, respectively, and we redeemed the remaining $15.3 million aggregate principal amount of our 2023 Notes. In addition, during the second quarter of fiscal 2019 we completed the issuance of $630.0 million aggregate principal amount of our 2026 Notes. Collectively, compared to our long-term debt portfolio at March 31, 2018, these transactions extended the weighted-average maturity of our outstanding senior notes by an additional seventeen months and are expected to decrease our annual interest expense by approximately $25.9 million.

Other Expense

During the three and six months ended September 29, 2018, we recorded a loss on debt extinguishment of $48.8 million and $82.2 million, respectively, primarily as a result of our debt extinguishment activity (see Note 6 of the Notes to the Condensed Consolidated Financial Statements for additional information regarding the tender offers for the 2023 Notes and the 2025 Notes and the redemption of the 2023 Notes).

Income Taxes

On December 22, 2017, the U.S. enacted the Tax Act that instituted fundamental changes to the taxation of multinational corporations, including a reduction in the U.S. federal corporate tax rate from 35% to 21% which became effective as of January 1, 2018, and implemented a territorial tax system. As a result of the Tax Act, we recorded, as of March 31, 2018, a provisional tax expense of $77.3 million, which was comprised of a $116.4 million tax expense related to the one-time transition tax on certain unrepatriated earnings of foreign subsidiaries (the “Transitional Repatriation Tax”), offset by a provisional deferred tax benefit of $39.1 million from the remeasurement of U.S. deferred tax assets and liabilities. As of the end of the second quarter of fiscal 2019, provisional amounts continue to be recorded because certain information related to the computation of earnings and profits, distributable reserves, non-U.S. income taxes paid, and foreign exchange gains and losses related to wholly owned subsidiaries are still being gathered and analyzed; information related to non-wholly owned subsidiaries is not available; and there is evolving information and guidance from federal and state taxing authorities regarding the application and interpretation of the recently enacted legislation. In accordance with current SEC guidance, the Company will finalize its provisional estimates for the impact of the Tax Act in the reporting period in which the accounting is completed, which will not exceed one year from the date of enactment of the Tax Act.

While as of September 29, 2018 the Company has not completed the accounting for any of the tax effects of tax reform described above, in the first two quarters of fiscal 2019 we recorded a discrete income tax benefit of $15.9 million related to our fiscal 2018 estimated provisional tax expense. This was comprised of an $11.6 million reduction in the provisional Transitional Repatriation Tax and a $4.3 million increase in U.S. deferred tax assets. In addition, provisional amounts are recorded for the impact of the new GILTI and limitations on compensation provisions enacted by the Tax Act, which both became effective for the Company in fiscal 2019. The GILTI provisions result in certain income earned by foreign subsidiaries currently being included in the gross income of the U.S. shareholder.

Our provision for income taxes for the three and ~~nine~~six months ended ~~December~~September 29, 2018 and September 30, 2017 ~~and December 31, 2016~~ was 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) to year-to-date income (loss) to determine the amounts for the three and ~~nine~~six months ended ~~December~~September 29, 2018 and September 30, ~~2017 and December 31, 2016.~~2017.

For the three and ~~nine~~six months ended ~~December 30, 2017,~~September 29, 2018, we ~~had~~recorded an income tax expense of ~~$98.5~~$0.8 million and ~~$88.6~~income tax benefit of $31.4 million, respectively, which was comprised primarily of tax ~~expense from a provisional tax expense from the deemed repatriation of the historical foreign earnings upon enactment of the Tax Act, tax expense from~~benefit related to domestic and international operations generating pre-tax book ~~income~~losses, tax benefit related to the adjustments in the provisional Tax Act estimates, and tax ~~expense, for the nine months only, from the adoption of new accounting guidance~~benefit related to ~~intra-entity transfers of assets~~the Singapore tax incentive granted during the second quarter, offset by a tax ~~benefits from a provisional remeasurement of U.S. deferred tax assets~~expense related to international operations generating pre-tax book income.

For the three and ~~liabilities for the decrease in the U.S. federal corporate~~six months ended September 30, 2017, income tax ~~rate from 35%~~benefit was $0.3 million and $9.9 million, respectively, which was comprised primarily of tax benefit related to ~~21% upon enactment of the Tax Act,~~ domestic and international operations generating pre-tax book losses and tax benefit from the adoption of new accounting guidance related to stock ~~compensation.~~

~~For the three and nine months ended December 31, 2016, income~~compensation, partially offset by tax expense was $123.2 million and $137.1 million, respectively, which was comprised primarily of tax expense related to domestic and international operations generating pre-tax book income offset by a tax benefit related to international operations generating pre-tax book ~~losses. See Note 7~~income and tax expense, for the six months only, from the adoption of new accounting guidance related to ~~the Condensed Consolidated Financial Statements for additional information regarding the Tax Act.~~

~~The new Global Intangible Low-Taxed Income provisions~~intra-entity transfers of the Tax Act will increase our effective tax rate in future years. However, there will be a delayed impact on cash payments due primarily to the new 100% bonus depreciation provisions of the Tax Act, net operating losses and other tax credits.assets.

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 30, 2017,~~September 29, 2018, we had working capital of approximately ~~$1,429.6~~$1,157.4 million, including ~~$841.3~~$557.9 million in cash and cash equivalents, compared to working capital of approximately ~~$1,042.8~~$1,402.5 million at ~~April 1, 2017,~~March 31, 2018, including ~~$545.5~~$926.0 million in cash and cash equivalents. The decrease in working capital was primarily due to the retirement of the 2023 Notes and 2025 Notes and the higher share repurchase activity. These amounts were offset by the issuance of the 2026 Notes as well as an increase in accounts receivable as of September 29, 2018 as compared to March 31, 2018.

Our ~~$841.3~~$557.9 million of total cash and cash equivalents as of ~~December 30, 2017~~September 29, 2018 includes approximately ~~$588.2~~$462.1 million held by our foreign subsidiaries, of which ~~$476.8~~$361.7 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 accrue and pay state income and/or foreign local withholding taxes to repatriate. ~~Our~~Under our current plans, ~~are~~we may repatriate the foreign earnings of Qorvo International Pte. Ltd. and expect to permanently reinvest the undistributed earnings of our other foreign ~~subsidiaries, with the exception of Qorvo International Pte. Ltd.~~subsidiaries.

Stock Repurchases

On November 3, 2016, our Board of Directors authorized a share repurchase program to repurchase up to $500.0 million of our outstanding stock. Under this program, share repurchases will be 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 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 and does not have a fixed term, and may be modified, suspended or terminated at any time without prior notice. During the ~~nine~~six months ended ~~December 30, 2017,~~September 29, 2018, we repurchased approximately 2.3 million shares of our common stock for approximately ~~$168.9 million.~~$186.7 million under the current and prior share repurchase programs. As of ~~December 30, 2017, $213.1~~September 29, 2018, $849.2 million remains available for repurchases under ~~this~~our current share repurchase program.

Cash Flows from Operating Activities

Operating activities for the ~~nine~~six months ended ~~December 30, 2017~~September 29, 2018 generated cash of ~~$593.6~~$289.8 million, compared to ~~$529.7~~$323.5 million for the ~~nine~~six months ended ~~December 31, 2016.~~September 30, 2017. This year-over-year ~~increase~~decrease was ~~driven~~primarily due to changes in working capital. Working capital was impacted by increased accounts receivable resulting from higher revenue generated during the ~~timing~~last months of ~~value added tax collections.~~the second quarter of fiscal 2019 as compared to the same period of fiscal 2018.

Cash Flows from Investing Activities

Net cash used in investing activities was ~~$246.4~~$132.8 million for the ~~nine~~six months ended ~~December 30, 2017,~~September 29, 2018, compared to ~~$323.3~~$215.2 million for the ~~nine~~six months ended ~~December 31, 2016.~~September 30, 2017. Capital expenditures decreased $78.6 million for the ~~nine~~six months ended ~~December 30, 2017 were down $149.3 million,~~September 29, 2018, as compared to the ~~nine~~six months ended ~~December 31, 2016,~~September 30, 2017, primarily due to ~~lower~~higher capital expenditures ~~on projects initiated~~incurred in the first half of fiscal ~~2017 to increase~~2018 in support of our premium filter ~~capacity and for manufacturing cost savings initiatives.~~capacity.

Cash Flows from Financing Activities

Net cash used in financing activities was ~~$53.1~~$523.0 million for the ~~nine~~six months ended ~~December 30, 2017,~~September 29, 2018, compared to ~~net cash used in financing activities of $135.1~~$80.1 million for the ~~nine~~six months ended ~~December 31, 2016. The~~September 30, 2017. This year-over-year ~~decrease~~increase was primarily due to ~~net~~the retirement of the 2023 Notes and a majority of the 2025 Notes and higher share repurchase activity in the six months ended September 29, 2018. The increase was partially offset by the proceeds from ~~borrowings~~the issuance of ~~$98.1 million~~the 2026 Notes in the ~~third quarter of fiscal~~six months ended September 29, 2018.

COMMITMENTS AND CONTINGENCIES

Notes Offering 2015On November 19, 2015, we issued $450.0 million aggregate principal amount of the 2023 Notes and $550.0 million aggregate principal amount of the 2025 Notes. The 2023 Notes were, and the 2025 Notes are, senior unsecured obligations of the Company and guaranteed, jointly and severally, by certain of its U.S. subsidiaries (the "Guarantors"). The 2023 Notes and the 2025 Notes were issued pursuant to an indenture dated as of November 19, 2015 containing customary events of default, including payment default, failure to provide certain notices and certain provisions related to bankruptcy events. 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 2023 Notes and the 2025 Notes during the three and six months ended September 29, 2018 was $7.3 million and $41.5 million, respectively. Interest paid on the 2023 Notes and the 2025 Notes during the six months ended September 30, 2017 was $34.4 million.

In March 2018, we repurchased $5.5 million of the 2023 Notes at a price equal to 107.50% of the principal amount of the 2023 Notes purchased, plus accrued and unpaid interest, and $1.5 million of the 2025 Notes at a price equal to 109.50% of the principal amount of the 2025 Notes purchased, plus accrued and unpaid interest.

In June 2018, we completed the purchase (via tender offer) of $429.2 million aggregate principal amount of the 2023 Notes at a price equal to 106.75% of the principal amount of the 2023 Notes purchased, plus accrued and unpaid interest. In July 2018, we redeemed the remaining $15.3 million principal amount of the 2023 Notes at a redemption price equal to 100.0% of the principal amount of the 2023 Notes redeemed, plus a make-whole premium and accrued and unpaid interest.

In July 2018, we completed the purchase (via tender offer) of $300.0 million aggregate principal amount of the 2025 Notes at a price equal to 109.63% of the principal amount of the 2025 Notes purchased, plus accrued and unpaid interest. In August 2018, we completed the purchase (via tender offer) of $136.4 million aggregate principal amount of the 2025 Notes at a price equal to 110.00% of the principal amount of the 2025 Notes purchased, plus accrued and unpaid interest. As of September 29, 2018, 2025 Notes with an aggregate principal amount of $112.1 million remained outstanding.

See Note 6 of the Notes to the Condensed Consolidated Financial Statements for additional information regarding the 2023 Notes and the 2025 Notes.

Notes Offering 2018 On July 16, 2018, we completed an offering of $500.0 million aggregate principal amount of our 2026 Notes (the "Initial 2026 Notes"). On August 28, 2018, we completed an offering of an additional $130.0 million aggregate principal amount of such notes (the "Additional 2026 Notes"). The 2026 Notes were sold in a private offering to certain institutions that then resold the 2026 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. We used a portion of the net proceeds of the offering of the 2026 Notes to fund the tender offers for the 2025 Notes and to pay related fees and expenses of the offering and will use the remaining net proceeds for general corporate purposes. 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.

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 a supplemental indenture, dated as of August 28, 2018 (together, the "2018 Indenture"). The 2018 Indenture contains customary events of default, including, among other things, payment default, exchange default, failure to provide certain notices thereunder and certain provisions related to bankruptcy events. The 2018 Indenture also contains customary negative covenants. In connection with the offering of the Initial 2026 Notes and the Additional 2026 Notes, we also entered into registration rights agreements, dated as of July 16, 2018 and August 28, 2018, respectively (see Note 6 of the Notes to the Condensed Consolidated Financial Statements).

The 2026 Notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.

Credit Agreement On December 5, 2017, we and ~~certain of our material domestic subsidiaries (the “Guarantors”)~~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 execution of the Credit Agreement, we terminated our prior credit agreement, dated April 7, 2015. On June 5, 2018, we and the Guarantors entered into the First Amendment (the "Amendment") to the Credit Agreement.

The Credit Agreement includes a 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", together with the Term Loan, the "Credit Facility"). On the closing date, $100.0 million of the Term Loan was funded ~~with~~and this amount was subsequently repaid in March 2018. The remainder of the ~~remainder~~Term Loan is available, at our discretion, in up to two ~~advances within six months following~~draws. The Amendment, among other things, extended the ~~closing date.~~delayed draw availability period from June 5, 2018 to January 3, 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. We may request at any time ~~at our option,~~ that the Credit Facility be increased ~~by an amount not~~up to ~~exceed~~ $300.0 million. The Credit Facility is available to finance working capital, capital expenditures and other corporate purposes. Our obligations under the Credit Agreement are 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). We had no outstanding amounts under the ~~Revolving~~Credit Facility as of ~~December 30, 2017.~~September 29, 2018.

At our option, loans under the Credit Agreement will bear interest at (i) the Applicable Rate (as defined in the Credit Agreement) plus the Eurodollar Rate (as defined in the 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 of the Administrative Agent, or (c) the Eurodollar Base Rate (as defined in the credit agreement) plus 1.0% (the “Base Rate”). All swingline 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 London Interbank Offered Rate, as published by Bloomberg, for dollar deposits for interest periods of one, two, three, six or twelve months, as we selected. The Applicable Rate for Eurodollar Rate loans ranges from 1.125% per annum to 1.375% per annum. The Applicable Rate for Base Rate loans ranges from 0.125% per annum to 0.375% per annum. Interest for Eurodollar Rate loans will be payable at the end of each applicable interest period or at three-month intervals, if such interest period exceeds three months. Interest for Base Rate loans will be payable quarterly in arrears. We will pay a letter of credit fee equal to the Applicable Rate multiplied by the daily amount available to be drawn under any letter of credit, a fronting fee, and any customary documentary and processing charges for any letter of credit issued under the Credit Agreement.

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, including financial covenants that we must maintain. At December 30, 2017,~~default. As of September 29, 2018, we were in ~~full~~ compliance with ~~these covenants. See Note6 to~~all the ~~Condensed Consolidated Financial Statements for additional information regarding~~financial covenants under the Credit ~~Agreement and related financial covenants.~~

~~Notes Offering~~On November 19, 2015, we completed an offering of $450.0 million aggregate principal amount of 6.75% senior notes due December 1, 2023 and $550.0 million aggregate principal amount of 7.00% senior notes due December 1, 2025 (collectively the "Notes"). The Notes are senior unsecured obligations and are guaranteed, jointly and severally, by the Guarantors. Interest on both series of the Notes is payable semi-annually on June 1 and December 1 of each year and commenced on June 1, 2016. Interest paid on the Notes during the nine months ended December 30, 2017 and December 31, 2016 was $68.9 million and $71.2 million, respectively. At any time on or after December 1, 2018, we may redeem the 2023 Notes, in whole or in part, at once or over time, at the specified redemption prices set forth in the Indenture plus accrued and unpaid interest thereon to the redemption date (subject to the rights of holders of record on the relevant record date to receive interest due on the relevant interest payment date).

The Notes were issued pursuant to an indenture dated as of November 19, 2015 (the "Indenture") containing customary events of default, including payment default, failure to provide certain notices and certain provisions related to bankruptcy events. The Indenture also contains customary negative covenants. See Note 6 to the Condensed Consolidated Financial Statements for additional information regarding the Notes.Agreement.

Capital Commitments At ~~December 30, 2017,~~September 29, 2018, we had capital commitments of approximately ~~$35.8~~$104.2 million primarily related to projects to increase our premium filter capacity, projects for manufacturing cost savings initiatives, equipment replacements and general corporate purposes.

Future Sources of Funding Our future capital requirements may differ materially from those currently anticipated and will depend on many factors, including, but not limited to, 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 existing resources and 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 or debt financing will not be dilutive to holders of our common stock. Further, we cannot be sure that additional equity or debt 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.

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 ~~2018~~2019. 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 ~~April 1, 2017~~March 31, 2018.

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 ~~Rule~~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 into 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 30, 2017~~September 29, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1A. RISK FACTORS.

In addition to 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 ~~April 1, 2017,~~March 31, 2018, 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 ~~April 1, 2017~~March 31, 2018 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.

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
October 1, 2017 to October 28, 2017 —
$ —
—
$293.1 million
October 29, 2017 to November 25, 2017 312
$ 78.55
312
$268.6 million
November 26, 2017 to December 30, 2017 768
$ 72.30
768
$213.1 million
Total 1,080
$ 74.11
1,080
$213.1 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
July 1, 2018 to July 28, 2018	—	$	—	—	$935.9 million
July 29, 2018 to August 25, 2018	253	$	81.31	253	$915.4 million
August 26, 2018 to September 29, 2018	851	$	77.67	851	$849.2 million
Total	1,104	$	78.50	1,104	$849.2 million

On ~~November 3, 2016,~~May 23, 2018, we announced that our Board of Directors authorized a share repurchase program to repurchase up to ~~$500.0 million~~$1.0 billion of our outstanding ~~stock.~~stock, which included approximately $126.3 million authorized under a prior share repurchase program terminated concurrent with the new authorization. Under this program, share repurchases will be 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 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, ~~and~~ does not have a fixed term, and may be modified, suspended or terminated at any time without prior notice.

ITEM 6. EXHIBITS.



~~10.1~~4.1		~~Credit Agreement,~~Indenture, dated as of ~~December 5, 2017, by and~~July 16, 2018, among Qorvo, Inc., ~~as the Borrower, certain subsidiaries of the Borrower identified therein, as~~ the Guarantors party thereto and MUFG Union Bank, ~~of America,~~ N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, the other lenders party thereto, and Wells Fargo Bank, National Association, TD Bank, National Association, The Bank of Tokyo-Mitsubishi UFJ, Ltd., PNC Bank, National Association, and Bank of the West, as Co-Syndication AgentsTrustee (incorporated by reference to Exhibit ~~10.1~~4.1 to the Current Report on Form 8-K filed with the SEC on ~~December 6, 2017)~~July 16, 2018).

4.2		Registration Rights Agreement, dated as of July 16, 2018, among Qorvo, Inc., the Guarantors named therein and Merrill Lynch, Pierce, Fenner & Smith Incorporated, 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 July 16, 2018).

4.3		Supplemental Indenture, dated as of August 28, 2018, 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 August 28, 2018)

4.4		Registration Rights Agreement, dated as of August 28, 2018, by and among Qorvo, Inc., the Guarantors named therein and Merrill Lynch, Pierce, Fenner & Smith Incorporated, 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 August 28, 2018)

4.5		Supplemental Indenture No. 2, dated as of August 28, 2018, among Qorvo, Inc. the Guarantors party thereto and MUFG Union Bank, N.A., as Trustee (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed with the SEC on August 28, 2018)

31.1		Certification of Periodic Report by Robert A. Bruggeworth, as Chief Executive Officer, pursuant to Rule 13a-14(a) or ~~15d-14(a)~~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 30, 2017,~~September 29, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets as of ~~December 30, 2017~~September 29, 2018 and ~~April 1, 2017;~~March 31, 2018; (ii) the Condensed Consolidated Statements of ~~Operations~~Income for the three and ~~nine~~six months ended ~~December~~September 29, 2018 and September 30, ~~2017 and December 31, 2016;~~2017; (iii) the Condensed Consolidated Statements of Comprehensive ~~Loss~~Income (Loss) for the three and ~~nine~~six months ended ~~December~~September 29, 2018 and September 30, ~~2017 and December 31, 2016;~~2017; (iv) the Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~December~~September 29, 2018 and September 30, ~~2017 and December 31, 2016;~~2017; and (v) the Notes to Condensed Consolidated Financial Statements

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:	~~February~~November 1, 2018	/s/ Mark J. Murphy
		Mark J. Murphy
		Chief Financial Officer

3638



	Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
	Three Months Ended December 30, 2017
(in thousands)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations and Reclassifications			Consolidated
Revenue	$	—		$	301,077		$	751,995		$	(207,333	)	$	845,739
Cost of goods sold	—			212,574			473,330			(177,092		)	508,812
Gross profit	—			88,503			278,665			(30,241		)	336,927
Operating expenses:
Research and development	7,101			6,842			97,842			(5,374		)	106,411
Selling, general and administrative	6,381			57,166			88,016			(25,008		)	126,555
Other operating expense	234			15,799			7,466			142			23,641
Total operating expenses	13,716			79,807			193,324			(30,240		)	256,607
Income (loss) from operations	(13,716		)	8,696			85,341			(1		)	80,320
Interest expense	(16,001		)	(557		)	(393		)	613			(16,338		)
Interest income	—			614			2,214			(613		)	2,215
Other expense	—			(549		)	(208		)	—			(757		)
Income (loss) before income taxes	(29,717		)	8,204			86,954			(1		)	65,440
Income tax expense	(30,116		)	(59,974		)	(8,432		)	—			(98,522		)
Income in subsidiaries	26,751			78,522			—			(105,273		)	—
Net (loss) income	$	(33,082	)	$	26,752		$	78,522		$	(105,274	)	$	(33,082	)

Comprehensive (loss) income	$	(32,185	)	$	28,630		$	82,312		$	(110,942	)	$	(32,185	)