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 28, 2019

		~~For the quarterly period ended December 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 _____~~

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.~~employer identification no.)

7628 Thorndike Road ~~Greensboro, North Carolina 27409-9421~~
~~(Address of principal executive offices)~~
~~(Zip Code)~~

~~(336) 664-1233~~Greensboro,	North Carolina	27409-9421
(Address of principal executive office)		(~~Registrant's telephone number, including area~~Zip code)

(336) 664-1233

Registrant's telephone number, including area code



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

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yesþ 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 filerþ	þ	Accelerated filer¨	☐
Non-accelerated filer¨	☐	Smaller reporting company¨	~~Emerging growth company~~ ¨ ☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐

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

As of January ~~30, 2019,~~22, 2020, there were ~~122,788,565~~115,684,626 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 ~~29, 2018~~28, 2019 and March ~~31, 2018~~30, 2019	3
Condensed Consolidated Statements of ~~Operations~~Income for the three and nine months ended December ~~29, 2018~~28, 2019 and December ~~30, 2017~~29, 2018	4
Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the three and nine months ended December ~~29, 2018~~28, 2019 and December ~~30, 2017~~29, 2018	5
Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended December 28, 2019 and December 29, 2018	6
Condensed Consolidated Statements of Cash Flows for the nine months ended December ~~29, 2018~~28, 2019 and December ~~30, 2017~~29, 2018	68
Notes to Condensed Consolidated Financial Statements	79

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.	2630
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	3538
Item 4. Controls and Procedures.	3538

PART II — OTHER INFORMATION	3538

Item 1A. Risk Factors.	3538
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	3639
Item 6. Exhibits.	3740

SIGNATURES	3841

PART I — FINANCIAL INFORMATION

ITEM 1.

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)


	December 29, 2018			March 31, 2018			December 28, 2019			March 30, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	649,711		$	926,037		$	1,097,724		$	711,035
Accounts receivable, less allowance of $159 and $134 as of December 29, 2018 and March 31, 2018, respectively	420,903			345,957
Accounts receivable, less allowance of $61 and $40 as of December 28, 2019 and March 30, 2019, respectively							409,835			378,172
Inventories (Note 3)	464,949			472,292			479,885			511,793
Prepaid expenses	23,961			23,909			27,120			25,766
Other receivables	21,899			44,795			16,620			21,934
Other current assets	34,113			30,815			36,488			36,141
Total current assets	1,615,536			1,843,805			2,067,672			1,684,841
Property and equipment, net of accumulated depreciation of $1,159,495 at December 29, 2018 and $911,910 at March 31, 2018	1,397,589			1,374,112
Goodwill	2,173,889			2,173,889
Intangible assets, net of accumulated amortization of $2,110,694 at December 29, 2018 and $1,711,520 at March 31, 2018 (Note 4)	463,359			860,336
Property and equipment, net of accumulated depreciation of $1,374,455 at December 28, 2019 and $1,218,507 at March 30, 2019							1,278,988			1,366,513
Goodwill (Note 4)							2,415,802			2,173,889
Intangible assets, net (Note 4)							595,307			408,210
Long-term investments (Note 5)	90,696			63,765			40,896			97,786
Other non-current assets	65,222			65,612
Other non-current assets (Note 6)							120,838			76,785
Total assets	$	5,806,291		$	6,381,519		$	6,519,503		$	5,808,024
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	229,266		$	213,193		$	239,180		$	233,307
Accrued liabilities	137,573			167,182			187,017			160,516
Other current liabilities	47,093			60,904
Current portion of long-term debt (Note 7)							5,302			80
Other current liabilities (Note 6)							59,706			41,711
Total current liabilities	413,932			441,279			491,205			435,614
Long-term debt (Note 6 )	714,402			983,290
Deferred tax liabilities (Note 11)	6,978			63,084
Other long-term liabilities	93,659			118,302
Long-term debt (Note 7)							1,568,554			920,935
Other long-term liabilities (Note 6)							120,367			91,796
Total liabilities	1,228,971			1,605,955			2,180,126			1,448,345
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; 123,001 and 126,322 shares issued and outstanding at December 29, 2018 and March 31, 2018, respectively	4,966,059			5,237,085
Common stock and additional paid-in capital, $.0001 par value; 405,000 shares authorized; 115,738 and 119,063 shares issued and outstanding at December 28, 2019 and March 30, 2019, respectively							4,383,368			4,687,455
Accumulated other comprehensive loss, net of tax	(6,070		)	(2,752		)	(6,843		)	(6,624		)
Accumulated deficit	(382,669		)	(458,769		)	(37,148		)	(321,152		)
Total stockholders’ equity	4,577,320			4,775,564			4,339,377			4,359,679
Total liabilities and stockholders’ equity	$	5,806,291		$	6,381,519		$	6,519,503		$	5,808,024

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						Nine Months Ended
	December 29, 2018			December 30, 2017			December 29, 2018			December 30, 2017			December 28, 2019			December 29, 2018			December 28, 2019			December 29, 2018
Revenue	$	832,330		$	845,739		$	2,409,443		$	2,308,153		$	869,073		$	832,330		$	2,451,369		$	2,409,443
Cost of goods sold	493,967			508,812			1,480,833			1,413,827			500,962			493,967			1,465,387			1,480,833
Gross profit	338,363			336,927			928,610			894,326			368,111			338,363			985,982			928,610
Operating expenses:
Research and development	109,985			106,411			337,636			334,308			122,851			109,985			357,385			337,636
Selling, general and administrative	125,604			126,555			401,041			404,853			81,205			125,604			258,458			401,041
Other operating expense (Note 9)	21,617			23,641			37,514			53,110
Other operating expense (Notes 4 and 10)													10,986			21,617			49,077			37,514
Total operating expenses	257,206			256,607			776,191			792,271			215,042			257,206			664,920			776,191
Income from operations	81,157			80,320			152,419			102,055			153,069			81,157			321,062			152,419
Interest expense (Note 6)	(9,562		)	(16,338		)	(33,604		)	(43,387		)
Interest expense (Note 7)													(16,900		)	(9,562		)	(41,457		)	(33,604		)
Interest income	2,814			2,215			7,788			4,039			2,874			2,814			8,112			7,788
Other expense (Note 6)	(3,520		)	(757		)	(85,007		)	(1,883		)
Other income (expense) (Notes 4 & 7)													44,148			(3,520		)	42,737			(85,007		)

Income before income taxes	70,889			65,440			41,596			60,824			183,191			70,889			330,454			41,596

Income tax (expense) benefit (Note 11)	(1,372		)	(98,522		)	30,012			(88,611		)
Net income (loss)	$	69,517		$	(33,082	)	$	71,608		$	(27,787	)
Income tax (expense) benefit (Note 12)													(21,835		)	(1,372		)	(46,519		)	30,012
Net income													$	161,356		$	69,517		$	283,935		$	71,608

Net income (loss) per share (Note 12):
Net income per share (Note 13):
Basic	$	0.56		$	(0.26	)	$	0.57		$	(0.22	)	$	1.39		$	0.56		$	2.42		$	0.57
Diluted	$	0.55		$	(0.26	)	$	0.56		$	(0.22	)	$	1.36		$	0.55		$	2.37		$	0.56

Weighted average shares of common stock outstanding (Note 12):
Weighted average shares of common stock outstanding (Note 13):
Basic	124,308			127,034			125,437			127,084			116,129			124,308			117,436			125,437
Diluted	126,842			127,034			128,360			127,084			118,455			126,842			119,712			128,360

See accompanying Notes to Condensed Consolidated Financial Statements.

QORVO, INC. AND SUBSIDIARIES

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

(In thousands)

(Unaudited)

Three Months Ended Nine Months Ended
December 29, 2018 December 30, 2017 December 29, 2018 December 30, 2017
Net income (loss) $ 69,517
$ (33,082 ) $ 71,608
$ (27,787 )
Other comprehensive (loss) income:
Unrealized (loss) gain on marketable securities, net of tax (5 ) 57
85
156
Foreign currency translation adjustment, including intra-entity foreign currency transactions that are of a long-term investment nature (1,079 ) 795
(3,448 ) 1,517
Reclassification adjustments, net of tax:
Foreign currency gain included in net income (loss) —
—
—
(581 )
Amortization of pension actuarial loss 22
45
45
132
Other comprehensive (loss) income (1,062 ) 897
(3,318 ) 1,224
Total comprehensive income (loss) $ 68,455
$ (32,185 ) $ 68,290
$ (26,563 )



	Three Months Ended					Nine Months Ended
	December 28, 2019		December 29, 2018			December 28, 2019			December 29, 2018
Net income	$	161,356	$	69,517		$	283,935		$	71,608
Other comprehensive income (loss):
Unrealized (loss) gain on marketable securities, net of tax	—		(5		)	—			85
Foreign currency translation adjustment, including intra-entity foreign currency transactions that are of a long-term investment nature	781		(1,079		)	(674		)	(3,448		)
Reclassification adjustments, net of tax:
Foreign currency loss included in net income	—		—			353			—
Amortization of pension actuarial loss	34		22			102			45
Other comprehensive income (loss)	815		(1,062		)	(219		)	(3,318		)
Total comprehensive income	$	162,171	$	68,455		$	283,716		$	68,290

See accompanying Notes to Condensed Consolidated Financial Statements.

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands)

(Unaudited)



						Accumulated Other Comprehensive Loss			Accumulated Deficit
	Common Stock
Three Months Ended	Shares		Amount									Total
Balance, September 28, 2019	116,294		$	4,471,656		$	(7,658	)	$	(198,504	)	$	4,265,494
Net income	—		—			—			161,356			161,356
Other comprehensive income	—		—			815			—			815
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	490		10,150			—			—			10,150
Issuance of common stock in connection with employee stock purchase plan	213		13,710			—			—			13,710
Repurchase of common stock, including transaction costs	(1,259	)	(125,012		)	—			—			(125,012		)
Stock-based compensation	—		12,864			—			—			12,864
Balance, December 28, 2019	115,738		$	4,383,368		$	(6,843	)	$	(37,148	)	$	4,339,377

Balance, September 29, 2018	125,046		$	5,089,331		$	(5,008	)	$	(452,186	)	$	4,632,137
Net income	—		—			—			69,517			69,517
Other comprehensive loss	—		—			(1,062		)	—			(1,062		)
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	41		226			—			—			226
Issuance of common stock in connection with employee stock purchase plan	219		12,535			—			—			12,535
Repurchase of common stock, including transaction costs	(2,305	)	(151,993		)	—			—			(151,993		)
Stock-based compensation	—		15,960			—			—			15,960
Balance, December 29, 2018	123,001		$	4,966,059		$	(6,070	)	$	(382,669	)	$	4,577,320

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands)

(Unaudited)



						Accumulated Other Comprehensive Loss			Accumulated Deficit
	Common Stock
Nine Months Ended	Shares		Amount									Total
Balance, March 30, 2019	119,063		$	4,687,455		$	(6,624	)	$	(321,152	)	$	4,359,679
Net income	—		—			—			283,935			283,935
Other comprehensive loss	—		—			(219		)	—			(219		)
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	1,327		(5,459		)	—			—			(5,459		)
Issuance of common stock in connection with employee stock purchase plan	452		28,658			—			—			28,658
Cumulative-effect adoption of ASU 2016-02	—		—			—			69			69
Repurchase of common stock, including transaction costs	(5,104	)	(390,117		)	—			—			(390,117		)
Stock-based compensation	—		62,831			—			—			62,831
Balance, December 28, 2019	115,738		$	4,383,368		$	(6,843	)	$	(37,148	)	$	4,339,377

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

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



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

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

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

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

Nine Months Ended

December 29, 2018 December 30, 2017
Cash flows from operating activities:
Net income (loss) $ 71,608
$ (27,787 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation 143,008
132,879
Intangible assets amortization (Note 4)
399,200
406,375
Loss on debt extinguishment (Note 6)
84,004
—
Deferred income taxes (58,216 ) (36,657 )
Foreign currency adjustments (1,603 ) 3,244
Asset impairment (Note 9)
14,913
—
Stock-based compensation expense 58,874
58,299
Other, net 5,094
12,276
Changes in operating assets and liabilities:
Accounts receivable, net (74,844 ) (91,051 )
Inventories 7,474
6,974
Prepaid expenses and other current and non-current assets 14,914
26,130
Accounts payable and accrued liabilities (9,810 ) (338 )
Income tax payable and receivable (26,574 ) 94,566
Other liabilities (5,023 ) 8,652
Net cash provided by operating activities 623,019
593,562
Investing activities:
Purchase of property and equipment (185,627 ) (237,658 )
Purchase of debt securities (132,729 ) —
Proceeds from sales and maturities of debt securities 133,132
—
Other investing activities (20,238 ) (8,713 )
Net cash used in investing activities (205,462 ) (246,371 )
Financing activities:
Payment of debt (Note 6)
(977,498 ) —
Proceeds from debt issuances (Note 6)
631,300
100,000
Repurchase of common stock, including transaction costs (Note 7)
(338,675 ) (168,935 )
Proceeds from the issuance of common stock 25,452
42,121
Tax withholding paid on behalf of employees for restricted stock units (24,595 ) (24,343 )
Other financing activities (7,510 ) (1,903 )
Net cash used in financing activities (691,526 ) (53,060 )

Effect of exchange rate changes on cash (2,369 ) 1,771
Net (decrease) increase in cash, cash equivalents and restricted cash (276,338 ) 295,902
Cash, cash equivalents and restricted cash at the beginning of the period 926,402
545,779
Cash, cash equivalents and restricted cash at the end of the period $ 650,064
$ 841,681
Non-cash investing information:
Capital expenditure adjustments included in accounts payable and accrued liabilities $ 37,206
$ 26,743

See accompanying Notes to Condensed Consolidated Financial Statements.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.1. 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 ("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 U.S. GAAP have been condensed, or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the financial statements include all adjustments (which are of a normal and recurring nature) necessary for the fair presentation of the results of the interim periods presented. These Condensed Consolidated Financial Statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in Qorvo’s Annual Report on Form 10-K for the fiscal year ended March ~~31, 2018~~30, 2019.

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 ~~2018~~2019 financial statements have been reclassified to conform with the fiscal ~~2019~~2020 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 ~~2019~~2020 and ~~2018~~2019 are 52-week years.

2.2. RECENT ACCOUNTING PRONOUNCEMENTS

The Company assesses recently issued accounting standards by the Financial Accounting Standards Board ("FASB") to determine the expected impacts on the Company's financial statements. The summary below describes impacts from newly issued standards as well as material updates to our previous assessments, if any, from Qorvo’s Annual Report on Form 10-K for the fiscal year ended March ~~31, 2018.~~30, 2019.

In ~~August 2018,~~February 2016, the FASB issued Accounting Standards Update ~~("ASU") 2018-15, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract."~~ The new guidance clarifies the accounting for implementation costs in cloud computing arrangements. The Company intends to adopt the guidance, prospectively, in the fourth quarter of fiscal 2019 and does not expect any significant impact to the Company's Condensed Consolidated Financial Statements.

~~In January 2017, the FASB issued 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 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 in the first quarter of fiscal 2019. The Company's historical policies were consistent with the new standard, and 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).," with multiple amendments subsequently issued. The new guidance requires ~~lessees to recognize~~that lease arrangements be presented on the lessee's balance sheet by recording a 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. Also, in July 2018,~~equal to the ~~FASB issued 2018-11, "Leases (Topic 842): Targeted Improvements,"~~ ~~to provide clarification on specific topics, including adoption guidance and practical expedients.~~present value of the related future minimum lease payments. The Company ~~plans to adopt~~adopted the ~~new guidance utilizing~~standard in the first quarter of fiscal 2020, using the modified retrospective ~~method and will~~approach which permits lessees to recognize ~~any cumulative effect~~a cumulative-effect adjustment ~~in retained earnings at~~to the ~~beginning~~opening balance of accumulated deficit in the period of adoption. Upon adoption, the Company recorded a right-of-use asset of $70.7 million and a lease liability of $75.0 million. The difference between the right-of-use asset and lease liability is primarily attributed to a deferred rent liability which existed under Accounting Standards Codification ("ASC") 840, "Leases."

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

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

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

for leases that exist at the date of adoption. Currently, the Company is assessing the other available practical expedients for potential adoption. The guidance will become effective for the Company in the 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 be the present value of 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 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 the assessment of valuation allowances when recognizing deferred tax assets 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 and there was no material 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 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 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. The Company adopted the standard in the first quarter of fiscal 2019 using the modified retrospective approach, under which the cumulative effect of adoption is recognized at the date of initial application. This standard did not have a material impact on the 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 this new standard.

3.3. INVENTORIES

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



	December 28, 2019		March 30, 2019
Raw materials	$	105,854	$	118,608
Work in process	271,798		272,469
Finished goods	102,233		120,716
Total inventories	$	479,885	$	511,793

December 29, 2018 March 31, 2018
Raw materials $ 113,660
$ 110,389
Work in process 222,499
221,137
Finished goods 128,790
140,766
Total inventories $ 464,949
$ 472,292

~~4. INTANGIBLE ASSETS~~4. BUSINESS ACQUISITIONS

~~Total intangible assets decreased~~

Cavendish Kinetics Limited

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

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

The purchase of the remaining equity interest in Cavendish was considered to ~~$463.4~~be an acquisition achieved in stages, whereby the previously held equity interest was remeasured at its acquisition-date fair value. The Company determined that the fair value of its previously held equity investment was $102.4 million asbased on the purchase consideration exchanged to acquire the remaining issued and outstanding capital of ~~December 29, 2018, compared to $860.3~~Cavendish. This resulted in recognition of a gain of $43.0 million ~~as of March 31, 2018. This decrease was primarily due to amortization expense~~ for the three and nine months ended December ~~29, 2018~~28, 2019, which is recorded in "Other income (expense)" in the Condensed Consolidated Statements of ~~$132.5~~Income.

The total purchase price of $305.9 million was allocated to Cavendish's net tangible assets (approximately $4.7 million), deferred tax liability (approximately $16.5 million) and ~~$399.2~~intangible assets (approximately $206.4 million, ~~respectively,~~ primarily related to developed technology) based on their estimated fair values as of October 4, 2019.

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

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

The Company recorded postcombination compensation expense as well as other acquisition and integration related costs during the three and nine months ended December 28, 2019 of $1.9 million and $3.1 million in "Other operating expense" in the Condensed Consolidated Statements of Income.

Active-Semi International, Inc.

On May 6, 2019, the Company completed its acquisition of Active-Semi International, Inc. ("Active-Semi"), a private fabless supplier of programmable analog power solutions. The acquisition expanded the Company's product offerings for existing customers and new customers in power management markets. The purchase price of $307.9 million was allocated to Active-Semi's net tangible assets (approximately $18.9 million) and intangible assets (approximately $158.4 million) based on their estimated fair values as of May 6, 2019. The more significant intangible assets acquired included developed technology of $76.7 million, customer relationships ~~(which had net book values~~ of ~~$324.2~~$40.9 million and ~~$127.3 million, respectively, as~~in-process research and development ("IPRD") of ~~December 29, 2018).~~

~~5. INVESTMENTS AND FAIR VALUE MEASUREMENTS~~

~~Debt Securities~~

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

Cost
Gross
Unrealized
Gains

Gross
Unrealized
Losses

Estimated Fair
Value
December 29, 2018
Auction rate securities $ 1,950
$ —
$ —
$ 1,950
March 31, 2018
Auction rate securities $ 1,950
$ —
$ (107 ) $ 1,843

$40.6 million.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The ~~estimated~~ fair value of ~~available-for-sale debt securities~~Active-Semi customer relationships acquired was determined based on an income approach using the ~~prevailing market~~“with and without method,” in which the value of the asset is determined by the difference in discounted cash flows of the profitability of the Company “with” the asset and the profitability of the Company “without” the asset. These customer relationships are being amortized on a straight-line basis over their estimated useful lives of 5 years.

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

During the nine months ended December ~~29, 2018~~28, 2019, $31.0 million of IPRD assets were completed, transferred to finite-lived intangible assets, and ~~March 31, 2018~~.are being amortized over their estimated useful lives of 5 to 7 years. The IPRD remaining as of December 28, 2019 is expected to be completed during fiscal 2021 with remaining costs to complete of less than $2.0 million.

The excess of the purchase price over the value of the net tangible assets and intangible assets resulted in goodwill of approximately $130.6 million. The Company ~~determines~~will continue to evaluate certain assets, liabilities and tax estimates over the ~~cost of an investment sold based on~~measurement period (up to one year from the ~~specific identification method.~~acquisition date).

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

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

December 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
1,950
1,950
1,843
Total $ 1,950
$ 1,950
$ 1,950
$ 1,843



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

~~Equity Investment Without a Readily Determinable Fair Value~~The following summarizes information regarding the gross carrying amounts and accumulated amortization of intangible assets (in thousands):



	December 28, 2019				March 30, 2019
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Intangible assets:
Developed technology	$	1,077,872	$	602,536	$	1,246,335	$	960,793
Customer relationships	426,872		327,829		1,272,725		1,161,735
Trade names	200		200		29,391		29,391
Technology licenses	3,490		2,162		14,704		13,026
Non-compete agreement	—		—		1,026		1,026
IPRD	19,600		N/A		10,000		N/A
Total	$	1,528,034	$	932,727	$	2,574,181	$	2,165,971

In the first quarter of ~~December 29, 2018,~~each fiscal year, the Company ~~has invested $60.0 million to acquire preferred shares~~removes the fully amortized balances from the gross asset and accumulated amortization amounts of ~~a private limited company. This investment was determined to be an equity investment without a readily determinable fair value and is accounted for using~~those intangible assets that were fully amortized as of the measurement alternative in accordance with ASU 2016-01. As of December 29, 2018, there was no impairment or observable price change for this investment. This investment is classified in "Long-term investments" in the Condensed Consolidated Balance Sheets.

~~Fair Value of Financial Instruments~~

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

prior fiscal year end.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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

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



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

5. INVESTMENTS AND FAIR VALUE MEASUREMENTS

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 ~~29, 2018~~28, 2019 and March ~~31, 2018~~30, 2019 (in thousands):

Total Quoted Prices In
Active Markets For
Identical Assets
(Level 1) Significant Other
Observable Inputs
(Level 2)
December 29, 2018
Assets

Auction rate securities (1)
1,950
—
1,950
Marketable equity securities 3,207
3,207
—

Invested funds in deferred compensation plan (2)
16,176
16,176
—
Total assets measured at fair value $ 21,333
$ 19,383
$ 1,950
Liabilities

Deferred compensation plan obligation (2)
$ 16,176
$ 16,176
$ —
Total liabilities measured at fair value $ 16,176
$ 16,176
$ —

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
$ —



				Total		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
December 28, 2019
	Assets
		Marketable equity securities		$	879	$	879	$	—
		Invested funds in deferred compensation plan (1)		23,255		23,255		—
			Total assets measured at fair value	$	24,134	$	24,134	$	—
	Liabilities
		Deferred compensation plan obligation (1)		$	23,255	$	23,255	$	—
			Total liabilities measured at fair value	$	23,255	$	23,255	$	—

March 30, 2019
	Assets
		Money market funds		$	13	$	13	$	—
		Marketable equity securities		901		901		—
		Auction rate securities (2)		1,950		—		1,950
		Invested funds in deferred compensation plan (1)		18,737		18,737		—
			Total assets measured at fair value	$	21,601	$	19,651	$	1,950
	Liabilities
		Deferred compensation plan obligation (1)		$	18,737	$	18,737	$	—
			Total liabilities measured at fair value	$	18,737	$	18,737	$	—

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

~~(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.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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

As of December ~~29, 2018~~28, 2019 and March ~~31, 2018,~~30, 2019, the Company did not have any Level 3 assets or liabilities.

Equity Investment Without a Readily Determinable Fair Value

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

Fair Value of Financial Instruments

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

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 67 for further disclosures related to the fair value of the Company's ~~long-term~~ debt.

6. LEASES

The Company leases certain of its corporate, manufacturing and other facilities from multiple third-party real estate developers. The Company also leases various machinery and office equipment. These operating leases expire at various dates through 2036, and some of these leases have renewal options, with the longest ranging up to two, ten-year periods.

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

Right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate in determining the present value of lease payments considering the term of the lease, which is derived from information available at the lease commencement date. The lease term includes renewal options when it is reasonably certain that the option will be exercised, and excludes termination options. To the extent that the Company's agreements have variable lease payments, the Company includes variable lease payments that depend on an index or a rate and excludes those that depend on facts or circumstances occurring after the commencement date, other than the passage of time.

The components of lease expense for operating leases for the three and nine months ended December 28, 2019, are as follows:



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

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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



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

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

Supplemental balance sheet information related to operating leases is as follows (in thousands):



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

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

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



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

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



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

6.QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

7. DEBT

Long-term debt as of December ~~29, 2018~~28, 2019 and March ~~31, 2018~~30, 2019 is as follows (in thousands):



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

December 29, 2018 March 31, 2018
6.75% Senior Notes due 2023 $ —
$ 444,464
7.00% Senior Notes due 2025 91,009
548,500
5.50% Senior Notes due 2026 630,000
—
Less unamortized premium and issuance costs (6,607 ) (9,674 )
Total long-term debt $ 714,402
$ 983,290

Senior Notes due 2023 and 2025

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

~~On June 15,~~In fiscal years 2018 and 2019, the Company ~~commenced cash tender offers for any and~~retired all of the issued and outstanding 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~~$526.6 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.

On November 28, 2018 and December 11, 2018, the Company repurchased $1.1 million and $20.0 million, respectively, of the 2025 Notes, at prices equal to 107.25% and 107.63%, respectively, of the principal amount of the 2025 Notes purchased, plus accrued and unpaid interest. As of December 29, 2018, 2025 Notes with an aggregate principal amount of $91.0 million remained outstanding.

During the three and nine months ended December 29, 2018, the Company recognized a loss on debt extinguishment of $1.8 million and $84.0 million, respectively, as "Other expense" in the ~~Company’s~~ Condensed Consolidated Statements of ~~Operations.~~

~~At any time prior to~~Income in connection with certain purchases of these notes. As of December ~~1, 2020, the Company may redeem all or part~~28, 2019, an aggregate principal amount of $23.4 million 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 on or after December 1, 2020, the Company may redeem the 2025 Notes, in whole or in part, at the redemption prices specified in the 2015 Indenture, plus accrued and unpaid interest.remained outstanding.

With respect to the 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 2025 Notes, interest is payable on June 1 and December 1 of each year at a rate of 7.00% per annum. Interest paid on the 2025 Notes during the three and nine months ended December 28, 2019 was $0.8 million and $1.6 million, respectively. Interest paid on the 2025 Notes during the three months ended December 29, 2018 was $4.0 million, and interest paid on the

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

2023 Notes and ~~the~~ 2025 Notes during the nine months ended December 29, 2018 was $45.5 million. ~~Interest paid on the 2023 Notes and the 2025 Notes during the three and nine months ended December 30, 2017 was $34.5 million and $68.9 million, respectively.~~

Senior Notes due 2026

On July 16, 2018, the Company ~~completed an offering of~~issued $500.0 million aggregate principal amount of its 5.50% ~~Senior Notes~~senior notes due 2026 (the “Initial 2026 Notes”). On August 28, 2018 and March 5, 2019, the Company ~~completed an offering of~~issued an additional $130.0 million and $270.0 million, respectively, aggregate principal amount of such notes ~~(the~~(together, the "Additional 2026 Notes", and together with the ~~"Initial~~Initial 2026 ~~Notes",~~Notes, the "2026 Notes"). ~~The 2026 Notes pay interest semi-annually on January 15 and July 15 at a rate of 5.50% per annum.~~ The 2026 Notes will mature on July 15, 2026, unless earlier redeemed in accordance with their terms. The 2026 Notes are senior unsecured obligations of the Company and are initially guaranteed, jointly and severally, by ~~its~~the Guarantors.

The Initial 2026 Notes were issued pursuant to an indenture, dated as of July 16, 2018, by and among the Company, the Guarantors and MUFG Union Bank, N.A., as trustee, and the Additional 2026 Notes were issued pursuant to a supplemental ~~indenture,~~indentures, dated as of August 28, 2018 ~~(together,~~and March 5, 2019, respectively (such indenture and supplemental indentures, collectively, the "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.

In connection with the offerings of the 2026 Notes, the Company agreed to provide the holders of the 2026 Notes with an opportunity to exchange the 2026 Notes for registered notes having terms substantially identical to the 2026 Notes. On June

~~The~~QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

25, 2019, the Company completed the exchange offer, in which all of the privately placed 2026 Notes were ~~sold in a private offering to certain institutions~~exchanged for new notes that ~~then resold the 2026 Notes in the United States to qualified institutional buyers pursuant to Rule 144A~~have been registered under the Securities Act of 1933, as amended (the "Securities Act")~~, and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The Company used a portion of the net proceeds of~~.

Interest is payable on the 2026 Notes ~~to fund the tender offers for the 2025 Notes~~on January 15 and ~~to pay related fees and expenses of the offering and will use the remaining net proceeds for general corporate purposes.~~

~~At any time prior to~~ July 15 ~~2021, the~~of each year at a rate of 5.50% per annum. The Company ~~may redeem all or part of~~paid no interest on the 2026 Notes ~~at a redemption price equal to their principal amount, plus a “make-whole” premium as~~during the three months ended December 28, 2019 and paid interest of $24.8 million on the ~~redemption date, and accrued and unpaid interest. In addition, at any time prior to July 15, 2021,~~2026 Notes during the nine months ended December 28, 2019.

Senior Notes due 2029

On September 30, 2019, the Company ~~may redeem up to 35% of the original~~issued $350.0 million aggregate principal amount of its 4.375% senior notes due 2029 (the “Initial 2029 Notes”). On December 20, 2019, the ~~2026 Notes with the proceeds of one or more equity offerings, at a redemption price equal to 105.50% of the~~Company issued an additional $200.0 million aggregate principal amount of such notes (the "Additional 2029 Notes" and together with the ~~2026~~Initial 2029 Notes, the "2029 Notes"). The 2029 Notes will mature on October 15, 2029, unless earlier redeemed ~~plus accrued and unpaid interest. Furthermore, at any time on or after July 15, 2021,~~in accordance with their terms. The 2029 Notes are senior unsecured obligations of the Company ~~may redeem~~and are initially guaranteed, jointly and severally, by each of the ~~2026 Notes, in whole or in part, at the redemption prices specified in the 2018 Indenture, plus accrued and unpaid interest.~~Guarantors.

The ~~2026~~Initial 2029 Notes were issued pursuant to an indenture, dated as of September 30, 2019, by and among the Company, the Guarantors and MUFG Union Bank, N.A., as trustee, and the Additional 2029 Notes were issued pursuant to a supplemental indenture, dated as of December 20, 2019 (such indenture and supplemental indenture, together, the "2019 Indenture"). The 2019 Indenture contains customary events of default, including payment default, exchange default, failure to provide certain notices thereunder and certain provisions related to bankruptcy events. The 2019 Indenture also contains customary negative covenants.

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

In connection with the offering of the ~~2026~~Initial 2029 Notes, the Company entered into a registration rights agreement, dated as of ~~July 16, 2018,~~September 30, 2019, by and among the Company and the Guarantors, on the one hand, and ~~Merrill Lynch, Pierce, Fenner & Smith Incorporated,~~BofA Securities, Inc., as representative of the initial purchasers of the Initial ~~2026~~2029 Notes, on the other hand, and a substantially similar agreement, dated as of ~~August 28, 2018~~December 20, 2019, with respect to the Additional ~~2026~~2029 Notes (together, the "Registration Rights Agreements").

Under the Registration Rights Agreements, the Company and the Guarantors have agreed to use their commercially reasonable efforts to (i) file with the SEC a registration statement (the ~~"Exchange~~“Exchange Offer Registration ~~Statement"~~Statement”) relating to the registered exchange offer (the ~~"Exchange Offer"~~“Exchange Offer”) to exchange the ~~2026~~2029 Notes for a new series of the Company’s exchange notes having terms substantially identical in all material respects to, and in the same aggregate principal amount as, the ~~2026~~2029 Notes; (ii) cause the Exchange Offer Registration Statement to be declared effective by the SEC; and (iii) cause the Exchange Offer to be consummated no later than the 360th day after ~~July 16, 2018 (in the case of the Initial 2026 Notes) or August 28, 2018 (in the case of the Additional 2026 Notes)~~September 30, 2019 (or if such 360th day is not a business day, the next succeeding business day). The Company and the Guarantors have also agreed to use their commercially reasonable efforts to cause the Exchange Offer Registration Statement to be effective continuously and keep the Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to consummate the Exchange Offer.

Under certain circumstances, the Company and the Guarantors have agreed to use their commercially reasonable efforts to (i) file a shelf registration statement relating to the resale of the ~~2026~~2029 Notes as promptly as practicable, and (ii) cause the shelf

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

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~~2029 Notes covered thereby have been sold pursuant thereto).

If the Company fails to meet any of these targets, the annual interest rate on the ~~2026~~2029 Notes will increase by 0.25% during the 90-day period following the default, and will increase by an additional 0.25% for each subsequent 90-day period during which the default continues, up to a maximum additional interest rate of 1.00% per year. If the Company cures the default, the interest rate on the ~~2026~~2029 Notes will revert to the original ~~rate.~~level.

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

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Credit Agreement

On December 5, 2017, the Company and the Guarantors entered into a five-year unsecured senior credit facility pursuant to a credit agreement with Bank of America, N.A., as administrative agent (in such capacity, the “Administrative Agent”), swing line lender and L/C issuer, and a syndicate of lenders (the "Credit Agreement"). On June 5, 2018, the Company and the Guarantors entered into the First Amendment (the "First Amendment") to the Credit Agreement, and on December 17, 2018, the Company and the Guarantors entered into the Second Amendment (the "Second Amendment") to the Credit Agreement. The Credit Agreement ~~includes~~included a senior delayed draw term loan of up to $400.0 million (the "Term Loan") and a $300.0 million senior revolving line of credit (the "Revolving Facility",). In addition, the Company may request one or more additional tranches of term loans or increases in the Revolving Facility, up to an aggregate of $300.0 million and subject to securing additional funding commitments from the existing or new lenders (the “Incremental Facility,” together with the Term Loan and the ~~"Credit Facility"~~Revolving Facility, the “Credit Facility”). On the closing date, $100.0 million of the Term Loan was funded (and subsequently repaid in March 2018)~~, with~~. On June 17, 2019, the ~~remainder available, at the discretion~~Company drew $100.0 million of the ~~Company, in up to two draws.~~Term Loan. The ~~First Amendment, among other things, extended the~~ delayed draw availability period ~~from June 5, 2018 to January 3, 2019, and~~for the ~~Second Amendment, among other things, further extended such period to June 30,~~remaining $200.0 million of the Term Loan expired on December 31, 2019. The Revolving Facility includes a $25.0 million sublimit for the issuance of standby letters of credit and a $10.0 million sublimit for swing line loans. ~~The 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 nine months ended December ~~29, 2018,~~28, 2019, there were no0 borrowings under the Revolving ~~Facility~~Facility. Interest paid on the Term Loan during the three and ~~the Company had no outstanding amounts under the Credit Facility as of~~nine months ended December ~~29, 2018.~~28, 2019 was $0.7 million and $1.6 million, respectively.

The Credit Agreement contains various conditions, covenants and representations with which the Company must be in compliance in order to borrow funds and to avoid an event of default. As of December ~~29, 2018,~~28, 2019, the Company was in compliance with these covenants.

Fair Value of ~~Long-Term~~ Debt

The Company's ~~long-term~~ debt is carried at amortized cost and is measured at fair value quarterly for disclosure purposes. The estimated fair value of the 2025 Notes, 2026 Notes, and 2029 Notes as of December ~~29, 2018 and March 31, 2018~~28, 2019 was ~~$97.8~~$25.3 million, $962.3 million, and ~~$596.5~~$576.1 million, respectively (compared to a carrying value of ~~$91.0~~$23.4 million, $900.0 million, and ~~$548.5~~$550.0 million, respectively). The estimated fair value of the 2025 Notes and the 2026 Notes as of ~~December 29, 2018~~March 30, 2019 was ~~$601.7~~$25.8 million ~~(compared to a carrying value of $630.0 million).~~and $929.3 million, respectively. The Company considers its ~~long-term~~ debt to be Level 2 in the fair value hierarchy. Fair values are estimated based on quoted market prices for identical or similar instruments. The 2025 Notes, 2026 Notes, and ~~2026~~2029 Notes trade over the counter, and their fair values were estimated based upon the value of their last trade at the end of the period.

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 as of December 28, 2019.

Interest Expense

During the three and nine months ended December 28, 2019, the Company recognized $17.8 million and $44.3 million, respectively, of interest expense related to the 2025 Notes, the 2026 Notes, the 2029 Notes and the Term Loan, which was partially offset by $1.4 million and $4.4 million, respectively, of interest capitalized to property and equipment. During the three months ended December 29, 2018, the Company recognized $10.8 million of interest expense related to the 2025 Notes and the 2026 Notes, which was partially offset by $1.9 million of interest capitalized to property and equipment. During the nine months ended December 29, 2018, the Company recognized $38.8 million of interest expense related to the 2023 Notes, the 2025 Notes and the 2026 Notes, which was partially offset by $7.2 million of interest capitalized to property and equipment. During the three and nine months ended December 30, 2017, the Company recognized $17.7 million and $52.3 million, respectively, of interest expense related to the 2023 Notes and the 2025 Notes, which was partially offset by $2.0 million and $10.8 million, respectively, of interest capitalized to property and equipment.

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

7.8. STOCK REPURCHASES

On ~~May 23, 2018,~~October 31, 2019, the Company announced that its Board of Directors authorized a new share repurchase program to repurchase up to $1.0 billion of the Company's outstanding common stock, which included approximately ~~$126.3~~$117.0 million authorized under athe 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, does not have a fixed term, and may be modified, suspended or terminated at any time without prior notice.

During the three months ended December 29, 2018, the Company repurchased approximately 2.3 million shares of its common stock for approximately $152.0 million under the current share repurchase program. During the nine months ended December 29, 2018, the Company repurchased approximately 4.6 million shares of its common stock for approximately $338.7 million (which included 0.4 million shares of its common stock for approximately $35.9 million under a prior share repurchase program). As of December 29, 2018, $697.2 million remains available for repurchases under the current share repurchase program.

During the three and nine months ended December 30, 2017, the Company repurchased approximately 1.1 million shares and 2.3 million shares of its common stock for approximately $80.0 million and $168.9 million, respectively, under a prior share repurchase program.

~~8. REVENUE~~

~~Adoption of Accounting Policy~~

~~The Company adopted ASU 2014-09,~~ ~~"Revenue from Contracts with Customers (Topic 606),"~~ in the first quarter of fiscal 2019 for open contracts using the modified retrospective approach through a cumulative adjustment to "Accumulated deficit" in the Condensed Consolidated Balance Sheet for the fiscal year beginning April 1, 2018. The impact from the cumulative-effect adjustment was immaterial (less than 1% of revenue in the quarter of adoption), related to 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 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.

~~Revenue Recognition Policy~~

The Company generates revenue primarily from the sale of semiconductor products, either directly to 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 products and services over-time is immaterial (less than 2% of overall revenue). The Company applies a five-step approach as defined in the new standard in determining the amount and timing of revenue to be recognized: (1) identifying the contract with a customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations in the contract; and (5) recognizing revenue when the corresponding performance obligation is satisfied.

Sales agreements are in place with certain customers and contain terms and conditions with respect to payment, delivery, warranty and supply, but typically do not require minimum purchase commitments. In the absence of a sales agreement, the Company’s standard terms and 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 consideration to which the Company expects to be entitled. Variable consideration in the form of rebate programs is offered to certain customers,

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~including distributors. A majority of these rebates are accrued~~

During the three and ~~classified as a contra accounts receivable,~~nine months ended December 28, 2019, the Company repurchased approximately 1.3 million shares and represent less than 5% of net revenue. 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 conditions do not give its customers a right of return associated with the original sale5.1 million shares, respectively, of its ~~products. However,~~common stock for approximately $125.0 million and $390.1 million, respectively, under the ~~Company may authorize sales returns~~prior and current share repurchase programs. As of December 28, 2019, $890.9 million remained available for repurchases under ~~certain circumstances, which include courtesy returns~~the current share repurchase program.

During the three 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 upon completion of the performance obligation and subsequent invoicing. Substantially all payments are collected within the Company’s standard terms, which do not include any 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 presented.

~~The Company invoices customers upon shipment and recognizes revenues in accordance with delivery terms. As of~~nine months ended December 29, 2018, the Company ~~had $34.7~~repurchased approximately 2.3 million ~~in remaining unsatisfied performance obligations with an original duration greater than one year,~~shares and 4.6 million shares, respectively, of ~~which~~its common stock for approximately $152.0 million and $338.7 million, respectively, under the ~~majority is expected to be recognized as income over the next twelve months.~~prior share repurchase program.

The Company includes shipping charges billed to customers in "Revenue" and includes the related shipping costs in "Cost of goods sold" in the Condensed Consolidated Statements of Operations. Taxes assessed by government authorities on revenue-producing transactions, including tariffs, value-added and excise taxes, are excluded from revenue in the Condensed Consolidated Statements of Operations.

9. REVENUE

The Company incurs commission expense that is incremental to obtaining contracts with customers. Sales commissions (which are recorded in the "Selling, general and administrative" expense line item in the Condensed Consolidated Statements of Operations) 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 remaining period exists over which to amortize the commissions.

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


	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	December 29, 2018		December 30, 2017		December 29, 2018		December 30, 2017		December 28, 2019		December 29, 2018		December 28, 2019		December 29, 2018
Revenue:
United States									$	423,573	$	460,525	$	1,143,995	$	1,153,823
China	$	474,844	$	446,721	$	1,390,226	$	1,226,494	281,024		242,454		842,112		830,727
Other Asia									80,729		54,414		229,344		168,344
Taiwan	127,104		157,725		443,110		417,795		43,156		35,143		122,189		142,038
United States	117,724		131,107		332,484		397,364
Europe	72,866		24,257		119,804		70,026		40,591		39,794		113,729		114,511
Other Asia	34,839		82,126		108,649		183,202
Other	4,953		3,803		15,170		13,272
Total Revenue	$	832,330	$	845,739	$	2,409,443	$	2,308,153
Total revenue									$	869,073	$	832,330	$	2,451,369	$	2,409,443

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

The Company also disaggregates revenue by operating segments (see Note ~~10)~~11).

9.10. RESTRUCTURING

In the third quarter of fiscal 2019, the Company initiated restructuring actions to reduce operating expenses and improve its manufacturing cost structure, including the phased closure of a wafer fabrication facility in Florida and idling production at a wafer fabrication facility in Texas. As ~~a result~~ of ~~these actions, in~~the end of the third quarter of fiscal ~~2019,~~2020, the Company has recorded ~~impairment~~total cumulative restructuring charges of ~~$14.9~~$88.1 million ~~(to adjust the carrying value~~as a result of ~~certain of its property and equipment to reflect its fair value) and~~these restructuring actions, including accelerated depreciation of ~~$3.1~~$47.2 million (to reflect changes in estimated useful lives of certain property and equipment), impairment charges of $15.9 million (to adjust the carrying value of certain property and equipment to reflect its fair value), employee termination benefits of $13.9 million and other exit costs of $11.1 million. The Company expects to record additional expenses of approximately $1.0 million for employee termination benefits and $4.0 million for other exit costs as a result of these actions.

During fiscal 2018, the Company initiated restructuring actions to improve operating efficiencies. As of the end of the third quarter of fiscal 2020, the Company has recorded cumulative expenses of $46.3 million, $23.3 million and $0.2 million for impairment charges, employee termination benefits and other exit costs, respectively, as a result of these restructuring actions which are substantially complete.

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

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~equipment), which were recorded in "Other operating expense" and "Cost of goods sold," respectively, in the Company’s Condensed Consolidated Statements of Operations.~~

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



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

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

The following table presents a roll-forward of the ~~real property was derived based upon a market approach with substantial input from market participants, including brokers, investors, developers and appraisers. The fair value of~~Company's restructuring liabilities for the personal property was determined using a market approach based upon quoted market prices from auction data for comparable assets. Factors such as age, condition, capacity and manufacturer were considered to adjust the auction price and determine an orderly liquidation value of the personal property assets. The significant inputs related to valuing these assets are classified as Level 2 in the fair value measurement hierarchy.nine months ended December 28, 2019:



	One-Time Employee Termination Benefits			Accelerated Depreciation			Contract Termination and Other Associated Costs			Total
Accrued restructuring balance as of March 30, 2019	$	6,988		$	—		$	1,626		$	8,614
Costs incurred and charged to expense	6,379			25,840			11,471			43,690
Transfer to right-of-use asset	—			—			(1,248		)	(1,248		)
Cash payments	(6,835		)	—			(5,245		)	(12,080		)
Non-cash activity	—			(25,840		)	(6,307		)	(32,147		)
Accrued restructuring balance as of December 28, 2019	$	6,532		$	—		$	297		$	6,829

Over the next four quarters, the Company expects to record additional charges associated with these restructuring actions, including $60.0 million to $70.0 million related to accelerated depreciation, $10.0 million to $20.0 million related to employee termination benefits and $5.0 million to $10.0 million related to other exit costs.

~~10.~~11. OPERATING SEGMENT INFORMATION

The Company's operating segments as of December ~~29, 2018~~28, 2019 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 ~~income from operations.~~operating income.

MP is a ~~leading~~ global supplier of cellular ~~radio frequency ("RF")~~RF and Wi-Fi solutions for a variety of mobile devices, including smartphones, ~~notebook computers,~~ wearables, laptops, 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, and new frequency bands are being added. Carrier aggregation, Multiple Input Multiple Output ("MIMO") and 5G are 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 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 and modules incorporating switches, PAs and duplexers.

IDP is a ~~leading~~ global supplier of RF, system-on-a-chip and power management 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~~cellular base ~~stations, cloud connectivity via data center communications and telecom transport, automotive connectivity and other IoT, including~~station, smart home, ~~solutions. IDP products include high power gallium arsenide ("GaAs")~~IoT, defense 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. automotive applications.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The “All other” category includes operating expenses such as stock-based compensation, amortization of intangible assets, acquisition and integration related costs, restructuring costs, start-up costs, asset impairment and accelerated depreciation, (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
	December 28, 2019			December 29, 2018			December 28, 2019			December 29, 2018
Revenue:
MP	$	662,109		$	602,312		$	1,841,468		$	1,754,930
IDP	206,964			230,018			609,901			654,513
Total revenue	$	869,073		$	832,330		$	2,451,369		$	2,409,443
Operating income (loss):
MP	$	219,778		$	180,394		$	553,144		$	466,513
IDP	32,628			80,861			97,721			192,376
All other	(99,337		)	(180,098		)	(329,803		)	(506,470		)
Operating income	153,069			81,157			321,062			152,419
Interest expense	(16,900		)	(9,562		)	(41,457		)	(33,604		)
Interest income	2,874			2,814			8,112			7,788
Other income (expense) (Notes 4 & 7)	44,148			(3,520		)	42,737			(85,007		)
Income before income taxes	$	183,191		$	70,889		$	330,454		$	41,596

Three Months Ended Nine Months Ended
December 29,
2018 December 30,
2017 December 29,
2018 December 30,
2017
Revenue:
MP $ 602,312
$ 642,089
$ 1,754,930
$ 1,728,709
IDP 230,018
202,680
654,513
576,534
All other (1)
—
970
—
2,910
Total revenue $ 832,330
$ 845,739
$ 2,409,443
$ 2,308,153
Income (loss) from operations
MP $ 180,394
$ 190,990
$ 466,513
$ 451,689
IDP 80,861
63,281
192,376
170,516
All other (180,098 ) (173,951 ) (506,470 ) (520,150 )
Income from operations 81,157
80,320
152,419
102,055
Interest expense (9,562 ) (16,338 ) (33,604 ) (43,387 )
Interest income 2,814
2,215
7,788
4,039
Other expense (Note 6)
(3,520 ) (757 ) (85,007 ) (1,883 )
Income before income taxes $ 70,889
$ 65,440
$ 41,596
$ 60,824

(1) "All other" revenue relates to royalty income that is not allocated to MP or IDP for the three and nine months ended December 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						Nine Months Ended
	December 28, 2019			December 29, 2018			December 28, 2019			December 29, 2018
Reconciliation of “All other” category:
Stock-based compensation expense	$	(16,381	)	$	(18,624	)	$	(62,210	)	$	(58,874	)
Amortization of intangible assets	(62,910		)	(132,227		)	(177,380		)	(398,518		)
Acquisition and integration related costs	(7,226		)	(3,700		)	(37,905		)	(5,880		)
Restructuring costs	(5,956		)	(1,510		)	(17,850		)	(4,822		)
Start-up costs	(361		)	(6,791		)	(461		)	(18,035		)
Asset impairment and accelerated depreciation	(4,324		)	(17,994		)	(26,897		)	(17,994		)
Other (including (loss) gain on assets and other miscellaneous corporate overhead)	(2,179		)	748			(7,100		)	(2,347		)
Loss from operations for “All other”	$	(99,337	)	$	(180,098	)	$	(329,803	)	$	(506,470	)

Three Months Ended Nine Months Ended
December 29,
2018 December 30,
2017 December 29,
2018 December 30,
2017
Reconciliation of “All other” category:
Stock-based compensation expense $ (18,624 ) $ (13,715 ) $ (58,874 ) $ (58,299 )
Amortization of intangible assets (132,227 ) (135,743 ) (398,518 ) (406,068 )
Acquisition and integration related costs (3,700 ) (2,723 ) (5,880 ) (8,113 )
Restructuring costs (1,510 ) (8,958 ) (4,822 ) (16,942 )
Start-up costs (6,791 ) (5,415 ) (18,035 ) (19,168 )
Asset impairment and accelerated depreciation (17,994 ) —
(17,994 ) —
Other (including (loss) gain on assets and other miscellaneous corporate overhead) 748
(7,397 ) (2,347 ) (11,560 )
Loss from operations for “All other” $ (180,098 ) $ (173,951 ) $ (506,470 ) $ (520,150 )

~~11.~~12. 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 included 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”). During~~

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

the third quarter of fiscal 2019, the Company completed its analysis within the measurement period provided by SAB 118, and the adjustments during this measurement period have been included in net earnings from operations as an adjustment to income tax expense.

~~As described in Note 12~~ ~~Income Taxes~~ in our 2018 Annual Report on Form 10-K, the Company was 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. For the nine months ended December 29, 2018, the Company made a $17.7 million SAB 118 measurement period adjustment consisting of a $2.6 million reduction in the tax expense related to the previously recorded provisional amount for the Transitional Repatriation Tax and a $15.1 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 adjustments related to the potential GILTI impact on deferred taxes have been recorded as the Company made its accounting policy choice during the third quarter of fiscal 2019 to treat taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost 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) before taxes.

Income Tax Expense

The Company’s provision for income taxes for the three and nine months ended December ~~29, 2018~~28, 2019 and December ~~30, 2017~~29, 2018 was calculated by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss ~~(pre-tax~~(pre-

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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 ~~29, 2018~~28, 2019 and December ~~30, 2017.~~29, 2018.

The Company’s income tax expense was $21.8 million and $46.5 million, respectively, for the three and nine months ended December 28, 2019, and the Company’s income tax expense was $1.4 million and income tax benefit was $30.0 million, for the three and nine months ended December 29, 2018, ~~respectively,~~respectively. The Company’s effective tax rate was 11.9% and ~~the Company's income tax expense was $98.5 million and $88.6 million~~14.1% for the three and nine months ended December ~~30, 2017, respectively. The Company’s effective tax rate was~~28, 2019, respectively, and 1.9% and (72.2)% for the three and nine months ended December 29, 2018, ~~respectively, and 150.6% and 145.7%~~respectively.

The Company's effective tax rate for the three and nine months ended December ~~30, 2017, respectively.~~

28, 2019 differed from the statutory rate primarily due to tax rate differences in foreign jurisdictions, global intangible low tax income (“GILTI”), domestic tax credits generated, foreign permanent differences, the discrete treatment of postcombination compensation expenses related to the Active-Semi and Cavendish acquisitions, and a discrete expense related to the Company’s change in its permanent reinvestment assertion. The Company's effective tax rate for the three and nine months ended December 29, 2018 differed from the statutory rate primarily due to tax rate differences in foreign jurisdictions, foreign permanent differences, state income taxes, domestic tax credits generated, changes in unrecognized tax benefits, GILTI, a discrete tax benefit for changes in provisional estimates related to the ~~Transitional Repatriation~~one-time transition tax on certain unrepatriated earnings of foreign subsidiaries enacted in the Tax Cuts and Jobs Act and, for the nine months ended December 29, 2018 only, a discrete tax ~~benefits of $8.3 million~~benefit resulting from a retroactive incentive allowing previously non-deductible payments to be ~~amortized and~~amortized.

Management has concluded that it can no longer support an assertion that certain earnings which have previously been subject to U.S. federal taxation at its foreign subsidiaries are permanently reinvested. During the SAB 118 increase in U.S deferred tax assets. The Company's effective tax rate for the three and nine months ended December 30, 2017 differed from the statutory rate primarily due to a net discrete provisional tax expense of $95.9 million resulting from the enactment of the Tax Act, tax rate differences in foreign jurisdictions, foreign permanent differences, state income taxes, domestic tax credits generated, changes in unrecognized tax benefits, a discrete tax benefit for excess stock compensation deductions in accordance with ASU 2016-09, ~~"Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting"~~ ~~(adopted in the first~~second quarter of fiscal ~~2018),~~2020, the Company updated forecasts of cash balances and ~~for~~cash flow outside the ~~nine months only,~~U.S. and began to implement a more centralized approach to cash management. As a result, the Company recorded $4.0 million of discrete tax expense ~~associated with intra-entity transfers in accordance with ASU 2016-16,~~ ~~"Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory"~~ ~~(adopted in~~during the ~~first~~second quarter of fiscal ~~2018).~~

~~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.~~

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.

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

~~Uncertain Tax Positions~~

~~The Company’s gross unrecognized tax benefits decreased from $122.8 million as of the end of fiscal 2018 to $116.4 million as of the end of~~2020. During the third quarter of fiscal ~~2019, primarily due~~2020, the Company recorded an additional $9.3 million of discrete deferred tax expense related to ~~lapses~~outside tax basis differences realized on the Company's investment in Cavendish. The Company had previously released in the third quarter of ~~statutes of limitations and the impact of the Tax Act reduction~~fiscal 2018 its permanent reinvestment assertion on its operating subsidiary in ~~tax rates.~~Singapore, Qorvo International Pte. Ltd.

~~12.~~13. NET INCOME ~~(LOSS)~~ PER SHARE

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



	Three Months Ended				Nine Months Ended
	December 28, 2019		December 29, 2018		December 28, 2019		December 29, 2018
Numerator:
Numerator for basic and diluted net income per share — net income available to common stockholders	$	161,356	$	69,517	$	283,935	$	71,608
Denominator:
Denominator for basic net income per share — weighted average shares	116,129		124,308		117,436		125,437
Effect of dilutive securities:
Stock-based awards	2,326		2,534		2,276		2,923
Denominator for diluted net income per share — adjusted weighted average shares and assumed conversions	118,455		126,842		119,712		128,360
Basic net income per share	$	1.39	$	0.56	$	2.42	$	0.57
Diluted net income per share	$	1.36	$	0.55	$	2.37	$	0.56

Three Months Ended Nine Months Ended
December 29, 2018 December 30, 2017 December 29, 2018 December 30, 2017
Numerator:
Numerator for basic and diluted net income (loss) per share — net income (loss) available to common stockholders $ 69,517
$ (33,082 ) $ 71,608
$ (27,787 )
Denominator:
Denominator for basic net income (loss) per share — weighted average shares 124,308
127,034
125,437
127,084
Effect of dilutive securities:
Stock-based awards 2,534
—
2,923
—
Denominator for diluted net income (loss) per share — adjusted weighted average shares and assumed conversions 126,842
127,034
128,360
127,084
Basic net income (loss) per share $ 0.56
$ (0.26 ) $ 0.57
$ (0.22 )
Diluted net income (loss) per share $ 0.55
$ (0.26 ) $ 0.56
$ (0.22 )

In the computation of diluted net income per share for the three and nine months ended December ~~29, 2018,~~28, 2019, less than 0.1 million and approximately 0.1 million outstanding ~~options to purchase 0.5 million shares and 0.3 million~~ shares, respectively, were excluded because the effect of their inclusion would have been anti-dilutive. In the computation of diluted net ~~loss~~income per share for the three and nine months ended

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

December ~~30, 2017,~~29, 2018, approximately 0.5 million and 0.3 million outstanding ~~options to purchase 3.4 million shares and 3.8 million~~ shares, respectively, were excluded because the effect of their inclusion would have been anti-dilutive.

~~13.~~14. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

In accordance with the applicable indentures governing the 2025 Notes, the 2026 Notes and ~~2026~~the 2029 Notes, the Company's obligations under the 2025 Notes, the 2026 Notes and ~~2026~~the 2029 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 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 accounting to reflect ownership interests in subsidiaries that are eliminated upon consolidation. The financial information may

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

not necessarily be indicative of the financial position, results of operations, comprehensive (loss) income, and cash flows, had the Parent Company, Guarantor or non-guarantor subsidiaries operated as independent entities.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)


	Condensed Consolidating Balance Sheet											Condensed Consolidating Balance Sheet
	December 29, 2018											December 28, 2019
(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	$	—	$	43,695	$	606,016	$	—		$	649,711	$	—	$	520,845	$	576,879	$	—		$	1,097,724
Accounts receivable, less allowance	—		64,962		355,941		—			420,903		—		57,798		352,037		—			409,835
Intercompany accounts and notes receivable	—		368,130		70,924		(439,054		)	—		—		499,432		6,319		(505,751		)	—
Inventories	—		226,781		259,394		(21,226		)	464,949		—		158,751		342,900		(21,766		)	479,885
Prepaid expenses	—		18,245		5,716		—			23,961		—		22,713		4,407		—			27,120
Other receivables	—		4,730		17,169		—			21,899		—		1,695		14,925		—			16,620
Other current assets	—		30,618		4,556		(1,061		)	34,113		—		33,382		3,106		—			36,488
Total current assets	—		757,161		1,319,716		(461,341		)	1,615,536		—		1,294,616		1,300,573		(527,517		)	2,067,672
Property and equipment, net	—		1,114,250		276,093		7,246			1,397,589		—		1,041,282		232,906		4,800			1,278,988
Goodwill	—		1,122,629		1,051,260		—			2,173,889		—		1,122,629		1,293,173		—			2,415,802
Intangible assets, net	—		245,049		218,310		—			463,359		—		125,346		469,961		—			595,307
Long-term investments	—		4,970		85,726		—			90,696		—		5,537		35,359		—			40,896
Long-term intercompany accounts and notes receivable	—		1,135,377		124,264		(1,259,641		)	—		—		864,935		236,904		(1,101,839		)	—
Investment in subsidiaries	6,352,350		2,460,118		—		(8,812,468		)	—		6,901,231		2,819,038		—		(9,720,269		)	—
Other non-current assets	122,683		33,278		30,065		(120,804		)	65,222		6,567		97,717		22,375		(5,821		)	120,838
Total assets	$	6,475,033	$	6,872,832	$	3,105,434	$	(10,647,008	)	$	5,806,291	$	6,907,798	$	7,371,100	$	3,591,251	$	(11,350,646	)	$	6,519,503
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	—	$	96,252	$	133,014	$	—		$	229,266	$	—	$	75,812	$	163,368	$	—		$	239,180
Intercompany accounts and notes payable	—		70,924		368,130		(439,054		)	—		—		6,318		499,432		(505,750		)	—
Accrued liabilities	16,505		69,780		50,546		742			137,573		28,794		102,294		55,177		752			187,017
Current portion of long-term debt												5,000		—		302		—			5,302
Other current liabilities	—		—		48,154		(1,061		)	47,093		—		10,354		49,352		—			59,706
Total current liabilities	16,505		236,956		599,844		(439,373		)	413,932		33,794		194,778		767,631		(504,998		)	491,205
Long-term debt	714,402		—		—		—			714,402		1,566,905		—		1,649		—			1,568,554
Deferred tax liabilities	—		39,235		939		(33,196		)	6,978
Long-term intercompany accounts and notes payable	1,166,806		92,835		—		(1,259,641		)	—		967,722		134,117		—		(1,101,839		)	—
Other long-term liabilities	—		48,607		45,052		—			93,659		—		112,369		31,538		(23,540		)	120,367
Total liabilities	1,897,713		417,633		645,835		(1,732,210		)	1,228,971		2,568,421		441,264		800,818		(1,630,377		)	2,180,126
Total stockholders’ equity	4,577,320		6,455,199		2,459,599		(8,914,798		)	4,577,320		4,339,377		6,929,836		2,790,433		(9,720,269		)	4,339,377
Total liabilities and stockholders’ equity	$	6,475,033	$	6,872,832	$	3,105,434	$	(10,647,008	)	$	5,806,291	$	6,907,798	$	7,371,100	$	3,591,251	$	(11,350,646	)	$	6,519,503

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)



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

Condensed Consolidating Balance Sheet
March 31, 2018
(in thousands) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations and Reclassifications Consolidated
ASSETS
Current assets:
Cash and cash equivalents $ —
$ 629,314
$ 296,723
$ —
$ 926,037
Accounts receivable, less allowance —
76,863
269,094
—
345,957
Intercompany accounts and notes receivable —
272,409
53,363
(325,772 ) —
Inventories —
154,651
339,434
(21,793 ) 472,292
Prepaid expenses —
17,530
6,379
—
23,909
Other receivables —
5,959
38,836
—
44,795
Other current assets —
29,627
1,188
—
30,815
Total current assets —
1,186,353
1,005,017
(347,565 ) 1,843,805
Property and equipment, net —
1,085,255
289,146
(289 ) 1,374,112
Goodwill —
1,121,941
1,051,948
—
2,173,889
Intangible assets, net —
395,317
465,019
—
860,336
Long-term investments —
1,847
61,918
—
63,765
Long-term intercompany accounts and notes receivable —
543,127
116,494
(659,621 ) —
Investment in subsidiaries 6,198,885
2,388,222
—
(8,587,107 ) —
Other non-current assets 72,122
31,011
32,516
(70,037 ) 65,612
Total assets $ 6,271,007
$ 6,753,073
$ 3,022,058
$ (9,664,619 ) $ 6,381,519
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ —
$ 78,278
$ 134,915
$ —
$ 213,193
Intercompany accounts and notes payable —
53,363
272,409
(325,772 ) —
Accrued liabilities 23,102
101,286
43,163
(369 ) 167,182
Other current liabilities —
3,882
57,022
—
60,904
Total current liabilities 23,102
236,809
507,509
(326,141 ) 441,279
Long-term debt 983,290
—
—
—
983,290
Deferred tax liabilities —
83,449
16,366
(36,731 ) 63,084
Long-term intercompany accounts and notes payable 489,051
116,494
54,076
(659,621 ) —
Other long-term liabilities —
62,417
55,885
—
118,302
Total liabilities 1,495,443
499,169
633,836
(1,022,493 ) 1,605,955
Total stockholders’ equity 4,775,564
6,253,904
2,388,222
(8,642,126 ) 4,775,564
Total liabilities and stockholders’ equity $ 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 Income and Comprehensive Income															Condensed Consolidating Statement of Income and Comprehensive Income
	Three Months Ended December 29, 2018															Three Months Ended December 28, 2019
(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	$	—		$	271,671		$	762,484		$	(201,825	)	$	832,330		$	—		$	246,326		$	789,083		$	(166,336	)	$	869,073
Cost of goods sold	—			225,156			447,084			(178,273		)	493,967			—			218,639			426,940			(144,617		)	500,962
Gross profit	—			46,515			315,400			(23,552		)	338,363			—			27,687			362,143			(21,719		)	368,111
Operating expenses:
Research and development	8,122			10,218			94,114			(2,469		)	109,985			9,078			11,434			105,216			(2,877		)	122,851
Selling, general and administrative	10,327			53,131			82,581			(20,435		)	125,604			7,258			41,140			51,993			(19,186		)	81,205
Other operating expense	173			21,477			499			(532		)	21,617			45			7,164			3,919			(142		)	10,986
Total operating expenses	18,622			84,826			177,194			(23,436		)	257,206			16,381			59,738			161,128			(22,205		)	215,042
Income (loss) from operations	(18,622		)	(38,311		)	138,206			(116		)	81,157			(16,381		)	(32,051		)	201,015			486			153,069
Interest expense	(9,235		)	(516		)	(206		)	395			(9,562		)	(16,691		)	(930		)	(124		)	845			(16,900		)
Interest income	—			269			2,941			(396		)	2,814			—			1,337			2,381			(844		)	2,874
Other (expense) income	(1,852		)	(2,566		)	898			—			(3,520		)
Other income																—			2,136			42,012			—			44,148
Income (loss) before income taxes	(29,709		)	(41,124		)	141,839			(117		)	70,889			(33,072		)	(29,508		)	245,284			487			183,191
Income tax (expense) benefit	6,147			(23,051		)	15,532			—			(1,372		)	9,832			(10,714		)	(20,953		)	—			(21,835		)
Income in subsidiaries	93,079			157,371			—			(250,450		)	—			184,595			224,332			—			(408,927		)	—
Net income	$	69,517		$	93,196		$	157,371		$	(250,567	)	$	69,517		$	161,355		$	184,110		$	224,331		$	(408,440	)	$	161,356

Comprehensive income	$	68,455		$	92,520		$	156,974		$	(249,494	)	$	68,455		$	162,171		$	184,015		$	225,389		$	(409,404	)	$	162,171


	Condensed Consolidating Statement of Income and Comprehensive (Loss) Income															Condensed Consolidating Statement of Income and Comprehensive Income
	Three Months Ended December 30, 2017															Three Months Ended December 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	$	—		$	301,077		$	751,995		$	(207,333	)	$	845,739		$	—		$	271,671		$	762,484		$	(201,825	)	$	832,330
Cost of goods sold	—			212,574			473,330			(177,092		)	508,812			—			225,156			447,084			(178,273		)	493,967
Gross profit	—			88,503			278,665			(30,241		)	336,927			—			46,515			315,400			(23,552		)	338,363
Operating expenses:
Research and development	7,101			6,842			97,842			(5,374		)	106,411			8,122			10,218			94,114			(2,469		)	109,985
Selling, general and administrative	6,381			57,166			88,016			(25,008		)	126,555			10,327			53,131			82,581			(20,435		)	125,604
Other operating expense	234			15,799			7,466			142			23,641			173			21,477			499			(532		)	21,617
Total operating expenses	13,716			79,807			193,324			(30,240		)	256,607			18,622			84,826			177,194			(23,436		)	257,206
Income (loss) from operations	(13,716		)	8,696			85,341			(1		)	80,320			(18,622		)	(38,311		)	138,206			(116		)	81,157
Interest expense	(16,001		)	(557		)	(393		)	613			(16,338		)	(9,235		)	(516		)	(206		)	395			(9,562		)
Interest income	—			614			2,214			(613		)	2,215			—			269			2,941			(396		)	2,814
Other expense	—			(549		)	(208		)	—			(757		)
Other (expense) income																(1,852		)	(2,566		)	898			—			(3,520		)
Income (loss) before income taxes	(29,717		)	8,204			86,954			(1		)	65,440			(29,709		)	(41,124		)	141,839			(117		)	70,889
Income tax expense	(30,116		)	(59,974		)	(8,432		)	—			(98,522		)
Income tax (expense) benefit																6,147			(23,051		)	15,532			—			(1,372		)
Income in subsidiaries	26,751			78,522			—			(105,273		)	—			93,079			157,371			—			(250,450		)	—
Net (loss) income	$	(33,082	)	$	26,752		$	78,522		$	(105,274	)	$	(33,082	)
Net income																$	69,517		$	93,196		$	157,371		$	(250,567	)	$	69,517

Comprehensive (loss) income	$	(32,185	)	$	28,630		$	82,312		$	(110,942	)	$	(32,185	)
Comprehensive income																$	68,455		$	92,520		$	156,974		$	(249,494	)	$	68,455

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)


	Condensed Consolidating Statement of Income and Comprehensive (Loss) Income															Condensed Consolidating Statement of Income and Comprehensive Income
	Nine Months Ended December 29, 2018															Nine Months Ended December 28, 2019
(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	$	—		$	740,241		$	2,214,289		$	(545,087	)	$	2,409,443		$	—		��	$	718,365		$	2,263,778		$	(530,774	)	$	2,451,369
Cost of goods sold	—			622,688			1,333,037			(474,892		)	1,480,833			—				656,503			1,270,889			(462,005		)	1,465,387
Gross profit	—			117,553			881,252			(70,195		)	928,610			—				61,862			992,889			(68,769		)	985,982
Operating expenses:
Research and development	21,433			20,837			300,233			(4,867		)	337,636			23,080				22,963			315,937			(4,595		)	357,385
Selling, general and administrative	36,998			170,011			260,359			(66,327		)	401,041			39,085				136,132			147,636			(64,395		)	258,458
Other operating expense	442			27,225			10,011			(164		)	37,514			45				26,485			22,879			(332		)	49,077
Total operating expenses	58,873			218,073			570,603			(71,358		)	776,191			62,210				185,580			486,452			(69,322		)	664,920
Income (loss) from operations	(58,873		)	(100,520		)	310,649			1,163			152,419			(62,210		)		(123,718		)	506,437			553			321,062
Interest expense	(32,677		)	(1,575		)	(527		)	1,175			(33,604		)	(40,776		)		(1,999		)	(402		)	1,720			(41,457		)
Interest income	—			3,152			5,811			(1,175		)	7,788			—				2,743			7,088			(1,719		)	8,112
Other (expense) income	(84,004		)	(1,440		)	437			—			(85,007		)
Other income																—				2,029			40,708			—			42,737
Income (loss) before income taxes	(175,554		)	(100,383		)	316,370			1,163			41,596			(102,986		)		(120,945		)	553,831			554			330,454
Income tax benefit (expense)	43,521			(26,717		)	13,208			—			30,012
Income tax (expense) benefit																24,997				(12,157		)	(59,359		)	—			(46,519		)
Income in subsidiaries	203,641			329,578			—			(533,219		)	—			361,923				494,472			—			(856,395		)	—
Net income	$	71,608		$	202,478		$	329,578		$	(532,056	)	$	71,608		$	283,934			$	361,370		$	494,472		$	(855,841	)	$	283,935

Comprehensive income	$	68,290		$	201,891		$	326,701		$	(528,592	)	$	68,290		$	283,716			$	361,370		$	494,222		$	(855,592	)	$	283,716



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

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

Condensed Consolidating Statement of Income and Comprehensive (Loss) Income
Nine Months Ended December 30, 2017
(in thousands) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations and Reclassifications Consolidated
Revenue $ —
$ 829,625
$ 2,108,231
$ (629,703 ) $ 2,308,153
Cost of goods sold —
592,928
1,346,505
(525,606 ) 1,413,827
Gross profit —
236,697
761,726
(104,097 ) 894,326
Operating expenses:
Research and development 20,600
34,728
292,926
(13,946 ) 334,308
Selling, general and administrative 37,252
190,336
268,072
(90,807 ) 404,853
Other operating expense 448
39,659
12,764
239
53,110
Total operating expenses 58,300
264,723
573,762
(104,514 ) 792,271
Income (loss) from operations (58,300 ) (28,026 ) 187,964
417
102,055
Interest expense (42,367 ) (1,689 ) (1,161 ) 1,830
(43,387 )
Interest income —
1,439
4,430
(1,830 ) 4,039
Other (expense) income —
207
(2,090 ) —
(1,883 )
Income (loss) before income taxes (100,667 ) (28,069 ) 189,143
417
60,824
Income tax (expense) benefit 5,657
(76,149 ) (18,119 ) —
(88,611 )
Income in subsidiaries 67,223
171,024
—
(238,247 ) —
Net (loss) income $ (27,787 ) $ 66,806
$ 171,024
$ (237,830 ) $ (27,787 )

Comprehensive (loss) income $ (26,563 ) $ 68,783
$ 172,528
$ (241,311 ) $ (26,563 )

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 29, 2018															Nine Months Ended December 28, 2019
(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 (used in) operating activities	$	691,479		$	(688,262	)	$	619,802		$	—		$	623,019		$	(279,501	)	$	322,496		$	688,256		$	—		$	731,251
Investing activities:
Purchase of property and equipment	—			(155,006		)	(30,621		)	—			(185,627		)	—			(102,781		)	(26,223		)	—			(129,004		)
Purchase of debt securities	—			(132,729		)	—			—			(132,729		)
Proceeds from sales and maturities of debt securities	—			133,132			—			—			133,132
Purchase of businesses, net of cash acquired																—			—			(494,783		)	—			(494,783		)
Proceeds from sale of available-for-sale debt securities																—			1,950			—			—			1,950
Other investing activities	—			(3,829		)	(16,409		)	—			(20,238		)	—			(1,772		)	509			—			(1,263		)
Net transactions with related parties	—			260,047			—			(260,047		)	—			—			28,086			—			(28,086		)	—
Net cash (used in) provided by investing activities	—			101,615			(47,030		)	(260,047		)	(205,462		)
Net cash used in investing activities																—			(74,517		)	(520,497		)	(28,086		)	(623,100		)
Financing activities:
Payment of debt	(977,498		)	—			—			—			(977,498		)
Proceeds from debt issuances	631,300			—			—			—			631,300
Proceeds from borrowings and debt issuances																659,000			—			—			—			659,000
Repurchase of common stock, including transaction costs	(338,675		)	—			—			—			(338,675		)	(390,117		)	—			—			—			(390,117		)
Proceeds from the issuance of common stock	25,452			—			—			—			25,452			37,530			—			—			—			37,530
Tax withholding paid on behalf of employees for restricted stock units	(24,595		)	—			—			—			(24,595		)	(21,013		)	—			—			—			(21,013		)
Other financing activities	(7,463		)	—			(47		)	—			(7,510		)	(5,899		)	—			(353		)	—			(6,252		)
Net transactions with related parties	—			1,028			(261,075		)	260,047			—			—			41,001			(69,087		)	28,086			—
Net cash (used in) provided by financing activities	(691,479		)	1,028			(261,122		)	260,047			(691,526		)
Net cash provided by (used in) financing activities																279,501			41,001			(69,440		)	28,086			279,148
Effect of exchange rate changes on cash	—			—			(2,369		)	—			(2,369		)	—			—			(501		)	—			(501		)
Net (decrease) increase in cash, cash equivalents and restricted cash	—			(585,619		)	309,281			—			(276,338		)
Net increase in cash, cash equivalents and restricted cash																—			288,980			97,818			—			386,798
Cash, cash equivalents and restricted cash at the beginning of the period	—			629,314			297,088			—			926,402			—			231,865			479,517			—			711,382
Cash, cash equivalents and restricted cash at the end of the period	$	—		$	43,695		$	606,369		$	—		$	650,064		$	—		$	520,845		$	577,335		$	—		$	1,098,180

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)



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

15. SUBSEQUENT EVENTS

Custom MMIC Design Services, Inc. Acquisition

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

Decawave Limited Acquisition

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

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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
Repurchase of common stock, including transaction costs (168,935 ) —
—
—
(168,935 )
Proceeds from the issuance of common stock 42,121
—
—
—
42,121
Tax withholding paid on behalf of employees for restricted stock units (24,343 ) —
—
—
(24,343 )
Other financing activities (1,903 ) —
—
—
(1,903 )
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

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

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

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q ~~contains forward-looking statements~~includes "forward-looking statements" within the meaning of ~~Section 27A~~the safe harbor provisions 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~~These forward-looking statements include, but are not limited to, statements about our plans, objectives, representations and contentions, and are not historical facts and typically are identified by use of terms such as "may," "will," "should," "could," "expect," ~~"anticipate,~~"plan," ~~"intend," "plan,~~"anticipate," "believe," "estimate," ~~"forecast," and~~ "predict," ~~and variations of such words~~"potential," "continue" and similar ~~expressions, identify such~~words, although some forward-looking statements are expressed differently. You should be aware that the forward-looking statements included herein represent management's current judgment and expectations, but our actual results, events and performance could differ materially from those expressed or implied by forward-looking statements. We do not intend to update any of these forward-looking statements or publicly announce the results of any revisions to these forward-looking statements, other than as is required under U.S. federal securities laws. Our business is subject to numerous risks and uncertainties, including ~~but not limited~~those relating to ~~the factors listed below:~~

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

our ~~ability to introduce new products that are competitive and can be manufactured at lower costs or that command higher prices based~~operating results; our substantial dependence on ~~superior performance;~~

~~our ability to forecast our customers' demand for our 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 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~~developing new products and ~~achieve~~achieving design ~~wins as our industry's product life cycles are short and our customers’ requirements change rapidly;~~

wins; our dependence on a ~~limited number of~~few large customers for a substantial portion of our revenue;

~~our reliance on~~ a loss of revenue if contracts with the ~~U.S.~~United States government ~~and on U.S. government sponsored programs (principally for~~or 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, assembly and test and tape and reel facilities;~~

~~variability in manufacturing yields and product quality;~~

~~variability in raw material costs and availability of raw materials;~~

contractors are canceled or delayed or if defense spending is reduced; our dependence on third ~~parties,~~parties; risks related to sales through distributors; risks associated with the operation of our manufacturing facilities; business disruptions; poor manufacturing yields; increased inventory risks and costs due to timing of customer forecasts; our inability to effectively manage or maintain evolving relationships with platform providers; risks from international sales and operations; economic regulation in China; changes in government trade policies, including ~~distributors, wafer foundries, wafer starting material suppliers, passive component manufacturers, assembly~~imposition of tariffs and ~~packaging suppliers and test and tape and reel suppliers;~~

export restrictions; our ability to ~~manage platform provider~~implement innovative technologies; underutilization of manufacturing facilities as a result of industry overcapacity; we may not be able to borrow funds under our credit facility or secure future financing; we may not be able to generate sufficient cash to service all of our debt; restrictions imposed by the agreements governing our debt; volatility in the price of our common stock; damage to our reputation or brand; fluctuations in the amount and ~~customer relationships;~~

frequency of our stock repurchases; our acquisitions and other strategic investments, including our recent acquisitions of Active-Semi International, Inc. ("Active-Semi") and Cavendish Kinetics Limited ("Cavendish") and our pending acquisitions of Custom MMIC Design Services, Inc. ("Custom MMIC") and Decawave Limited (“Decawave”), could fail to achieve financial or strategic objectives; our ability to ~~procure, commercialize~~attract, retain and ~~enforce~~motivate key employees; our reliance on our intellectual property ~~rights ("IPR") and to operate our business without infringing on the unlicensed IPR~~portfolio; claims of ~~others;~~

~~the risks associated with~~infringement of third-party intellectual property rights; security breaches and other similar disruptions ~~or events, which could compromise~~compromising 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~~information; theft, loss or misuse of personal data by or about our employees, customers or ~~other~~ third parties;

~~currency fluctuations, tariffs, trade barriers, tax~~ warranty claims, product recalls and ~~export license requirements~~product liability; and ~~health and security issues~~risks associated with ~~our foreign operations;~~

~~the impact of~~ environmental, health and safety 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 (the "Tax Act");~~

~~the impact of the Organisation for Economic Co-operation and Development Base Erosion and Profit Shifting initiative on tax policy and enacted laws in the countries in which we operate;~~

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

change. 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~~Qorvo^® is a product and technology leader at the forefront of the growing global demand for always-on ~~broadband~~ connectivity. We combine a broad portfolio of innovative radio frequency ("RF") solutions, highly differentiated semiconductor technologies, ~~deep~~ systems-level expertise and global manufacturing 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 multiple Internet of Things ("IoT") applications including the 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.connected car.

We employ more than 8,300 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 Florida, North Carolina, Oregon and Texas, and our primary assembly and test facilities are in China, Costa Rica, Germany and 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 global supplier of cellular RF and Wi-Fi solutions for a variety of mobile devices, including smartphones, wearables, laptops, tablets and cellular-based applications for the IoT.

~~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 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


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

factors, improved signal quality, less heat and longer talk and standby times. New wireless communications standards are being deployed, and new frequency bands are being added. Carrier aggregation, Multiple Input Multiple Output ("MIMO") and 5G are 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 ~~29, 2018,~~28, 2019, our reportable segments are MP and IDP. These business segments are based on the organizational structure and information reviewed by our Chief Executive Officer, who is our chief operating decision maker ("CODM"), and are managed separately based on the end markets and applications they support. The CODM allocates resources and evaluates the performance of each operating segment primarily based on non-GAAP operating income ~~from operations~~ (see Note 1011 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report for additional information regarding our operating segments).

THIRD QUARTER FISCAL ~~2019~~2020 FINANCIAL HIGHLIGHTS:

Quarterly revenue ~~decreased 1.6%~~increased 4.4% as compared to the third quarter of fiscal ~~2018,~~2019, primarily due to ~~lower~~higher demand for our ~~cellular RF solutions~~mobile products in support of customers based in China and higher demand from a Korea-based customer, partially offset by lower demand from our largest end customer ~~and our customers based in Asia, partially offset by higher~~as well as lower demand for our base station ~~products.~~products as a result of trade restrictions.

Gross margin for the third quarter of fiscal ~~2019~~2020 was ~~40.7%~~42.4% as compared to ~~39.8%~~40.7% for the third quarter of fiscal ~~2018. The increase was~~2019, primarily due to gross margin improvements related to lower intangible amortization expense and favorable changes in product mix, partially offset by average selling price erosion and lower factory ~~utilization in our SAW wafer fabrication facilities.~~utilization.

~~During~~Operating income was $153.1 million for the third quarter of fiscal ~~2019, we recognized impairment charges on certain property and equipment of $14.9 million related~~2020 as compared to ~~our planned closure of a wafer fabrication facility in Florida.~~

~~Operating income was~~ $81.2 million for the third quarter of fiscal ~~2019 as compared~~2019. This increase was primarily due to lower operating ~~income of $80.3~~expenses, higher revenue and higher gross margin.

Capital expenditures decreased to $40.7 million for the third quarter of fiscal ~~2018.~~

~~Cash flow from operations was $333.2~~2020 as compared to $72.0 million for the third quarter of fiscal ~~2019 as compared to $270.1 million for~~2019. Our capital expenditures in the third quarter of fiscal ~~2018. The increase was primarily due to improved profitability and favorable changes~~2020 included strategic investments in ~~working capital.~~

~~Capital expenditures were~~ ~~$72.0 million~~ ~~for the third quarter of fiscal 2019 as compared to $45.4 million for the third quarter of fiscal 2018. The increase was primarily related to projects to increase our~~ premium filter capacity and ~~GaN capacities.~~

gallium nitride ("GaN") technology capabilities.

During the third quarter of fiscal ~~2019,~~2020, we repurchased approximately ~~2.3~~1.3 million shares of our common stock for approximately ~~$152.0~~$125.0 million.

During the third quarter of fiscal 2020, we completed the acquisition of the remaining issued and outstanding capital of Cavendish for a total purchase price of $305.9 million. On the October 4, 2019 acquisition date, our previously held equity interest was remeasured, which resulted in the recognition of a gain of $43.0 million.

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

RESULTS OF OPERATIONS

Consolidated

The following table presents a summary of our results of operations for the three and nine months ended December 28, 2019 and December 29, 2018 ~~and~~ ~~December 30, 2017~~ (in thousands, except percentages):


	Three Months Ended													Three Months Ended
	December 29, 2018		% of Revenue		December 30, 2017		% of Revenue		Increase (Decrease)			Percentage Change		December 28, 2019		% of Revenue		December 29, 2018		% of Revenue		Increase (Decrease)			Percentage Change
Revenue	$	832,330	100.0	%	$	845,739	100.0	%	$	(13,409	)	(1.6	)%	$	869,073	100.0	%	$	832,330	100.0	%	$	36,743		4.4	%
Cost of goods sold	493,967		59.3		508,812		60.2		(14,845		)	(2.9	)	500,962		57.6		493,967		59.3		6,995			1.4
Gross profit	338,363		40.7		336,927		39.8		1,436			0.4		368,111		42.4		338,363		40.7		29,748			8.8
Research and development	109,985		13.2		106,411		12.6		3,574			3.4		122,851		14.1		109,985		13.2		12,866			11.7
Selling, general and administrative	125,604		15.1		126,555		14.9		(951		)	(0.8	)	81,205		9.4		125,604		15.1		(44,399		)	(35.3	)
Other operating expense	21,617		2.6		23,641		2.8		(2,024		)	(8.6	)	10,986		1.3		21,617		2.6		(10,631		)	(49.2	)
Operating income	$	81,157	9.8	%	$	80,320	9.5	%	$	837		1.0	%	$	153,069	17.6	%	$	81,157	9.8	%	$	71,912		88.6	%

	Nine Months Ended													Nine Months Ended
	December 29, 2018		% of Revenue		December 30, 2017		% of Revenue		Increase (Decrease)			Percentage Change		December 28, 2019		% of Revenue		December 29, 2018		% of Revenue		Increase (Decrease)			Percentage Change
Revenue	$	2,409,443	100.0	%	$	2,308,153	100.0	%	$	101,290		4.4	%	$	2,451,369	100.0	%	$	2,409,443	100.0	%	$	41,926		1.7	%
Cost of goods sold	1,480,833		61.5		1,413,827		61.3		67,006			4.7		1,465,387		59.8		1,480,833		61.5		(15,446		)	(1.0	)
Gross profit	928,610		38.5		894,326		38.7		34,284			3.8		985,982		40.2		928,610		38.5		57,372			6.2
Research and development	337,636		14.0		334,308		14.5		3,328			1.0		357,385		14.6		337,636		14.0		19,749			5.8
Selling, general and administrative	401,041		16.6		404,853		17.5		(3,812		)	(0.9	)	258,458		10.5		401,041		16.6		(142,583		)	(35.6	)
Other operating expense	37,514		1.6		53,110		2.3		(15,596		)	(29.4	)	49,077		2.0		37,514		1.6		11,563			30.8
Operating income	$	152,419	6.3	%	$	102,055	4.4	%	$	50,364		49.3	%	$	321,062	13.1	%	$	152,419	6.3	%	$	168,643		110.6	%

Revenue ~~decreased~~increased for the three months ended December ~~29, 2018~~,28, 2019, as compared to the three months ended December ~~30, 2017,~~29, 2018, primarily due to ~~lower~~higher demand for our ~~cellular RF solutions~~mobile products in support of customers based in China and higher demand from a Korea-based customer, partially offset by lower demand from our largest end customer ~~and our customers based in Asia, partially offset by higher~~as well as lower demand for our base station ~~products.~~ products as a result of trade restrictions.

Revenue increased for the nine months ended December ~~29, 2018,~~28, 2019, as compared to the nine months ended December ~~30, 2017,~~29, 2018, primarily due to higher demand from a Korea-based customer, higher demand for our ~~cellular RF solutions in support~~mobile products from Huawei Technologies Co., Ltd. and its affiliates ("Huawei") and sales of our ~~customers based in China~~programmable power management products as ~~well as higher~~a result of the acquisition of Active-Semi. This increase was offset by lower demand for our base station products as a result of trade restrictions and lower demand for our Wi-Fi products.

On May 16, 2019, we suspended shipments of products to Huawei after the Bureau of Industry and Security ("BIS") of the U.S. Department of Commerce added Huawei Technologies Co., Ltd. and over 100 of its affiliates to the BIS's Entity List. Subsequently, we restarted shipments from outside the U.S. of certain products that are not subject to the Export Administration Regulations ("EAR") to Huawei in compliance with the BIS order. We have also applied for a license to ship other products that are subject to the EAR, as required by the rules governing the Entity List. Our sales to Huawei will continue to be impacted by trade restrictions.

Gross margin for the three months ended December ~~29, 2018~~28, 2019 was ~~40.7%~~42.4%, as compared to ~~39.8%~~40.7% for the three months ended December ~~30, 2017. The~~29, 2018. This increase was primarily due to gross margin improvements related to lower intangible amortization expense and favorable changes in product mix, partially offset by average selling price erosion and lower factory ~~utilization in our SAW wafer fabrication facilities.~~utilization.

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

Operating Expenses

Research and development expense increased $12.9 million, or 11.7%, for the three months ended December 28, 2019 as compared to the three months ended December 29, 2018, primarily due to higher personnel costs as well as the addition of Active-Semi and Cavendish expenses. Research and development expense increased $19.7 million, or 5.8%, for the nine months ended December 28, 2019 as compared to the nine months ended December ~~30, 2017, with favorable changes in product mix within our cellular RF solutions being offset by lower factory utilization in our SAW wafer fabrication facilities.~~29, 2018, primarily due to higher personnel costs and the addition of Active-Semi and Cavendish expenses.

~~Operating Expenses~~

~~Research~~Selling, general and ~~development~~administrative expense ~~increased~~decreased $44.4 million, or 35.3%, for the three months ended December ~~29, 2018,~~28, 2019 as compared to the three months ended December ~~30, 2017,~~29, 2018, primarily due to lower intangible amortization, partially offset by higher personnel ~~related costs. Research~~costs and ~~development~~the addition of Active-Semi expenses. Selling, general and administrative expense ~~increased~~decreased $142.6 million, or 35.6%, for the nine months ended December ~~29, 2018,~~28, 2019 as compared to the nine months ended December ~~30, 2017,~~29, 2018, primarily due to ~~higher personnel related costs,~~lower intangible amortization, partially offset by higher personnel costs and the ~~timing~~addition of ~~product development spend.~~Active-Semi expenses.

~~Selling, general and administrative~~Other operating expense decreased $10.6 million for the three months ended December 28, 2019 as compared to the three months ended December 29, 2018, primarily due to lower restructuring expenses and lower start-up costs as compared to the three months ended December 29, 2018, partially offset by expenses related to the acquisitions of Active-Semi and Cavendish. Other operating expense increased $11.6 million for the nine months ended December 28, 2019 as compared to the nine months ended December 29, 2018, primarily due to expenses related to the acquisitions of Active-Semi and Cavendish. These costs were partially offset by lower start-up costs and restructuring expenses as compared to the ~~three and nine months ended December 30, 2017, with lower intangible amortization being offset by higher personnel related costs.~~

~~Other operating expense decreased for the three and~~ nine months ended December 29, 2018, as compared to the three and nine months ended December 30, 2017. We recognized an asset impairment charge in December 2018 related to restructuring actions initiated in December 2018 to reduce operating expenses and improve our manufacturing cost structure. In the three and nine months ended December 30, 2017, we recognized restructuring charges (primarily related to employee termination benefits and impairment charges on held for sale assets) associated with the cost reduction actions initiated in the second quarter of fiscal 2018.

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 29, 2018			December 30, 2017			Decrease			Percentage Change		December 28, 2019			December 29, 2018			Increase		Percentage Change
Revenue	$	602,312		$	642,089		$	(39,777	)	(6.2	)%	$	662,109		$	602,312		$	59,797	9.9	%
Operating income	180,394			190,990			(10,596		)	(5.5	)	219,778			180,394			39,384		21.8
Operating income as a % of revenue	30.0		%	29.7		%						33.2		%	30.0		%

	Nine Months Ended											Nine Months Ended
(In thousands, except percentages)	December 29, 2018			December 30, 2017			Increase			Percentage Change		December 28, 2019			December 29, 2018			Increase		Percentage Change
Revenue	$	1,754,930		$	1,728,709		$	26,221		1.5	%	$	1,841,468		$	1,754,930		$	86,538	4.9	%
Operating income	466,513			451,689			14,824			3.3		553,144			466,513			86,631		18.6
Operating income as a % of revenue	26.6		%	26.1		%						30.0		%	26.6		%

MP revenue ~~decreased~~increased $59.8 million, or 9.9%, for the three months ended December ~~29, 2018,~~28, 2019 as compared to the three months ended December ~~30, 2017,~~29, 2018, primarily due to ~~lower~~higher demand for our ~~cellular RF solutions~~mobile products in support of customers based in China, higher demand from a Korea-based customer and higher demand from Huawei. These increases were partially offset by lower demand from our largest end ~~customer and our customers based in Asia.~~ customer.

MP revenue increased $86.5 million, or 4.9%, for the nine months ended December ~~29, 2018,~~28, 2019 as compared to the nine months ended December ~~30, 2017,~~29, 2018, primarily due to higher demand ~~for our cellular RF solutions in support of customers based in China.~~from a Korea-based customer and higher demand from Huawei.

MP operating income ~~decreased $10.6~~increased $39.4 million, or ~~5.5%~~21.8%, for the three months ended December ~~29, 2018,~~28, 2019 as compared to the three months ended December ~~30, 2017,~~29, 2018, primarily due to ~~lower~~higher revenue ~~partially offset by~~and higher gross margin. Gross margin was positively impacted by favorable changes in product mix, ~~within our cellular RF solutions,~~ partially offset by average selling price ~~erosion.~~erosion and lower factory utilization.

MP operating income increased ~~$14.8~~$86.6 million, or ~~3.3%~~18.6%, for the nine months ended December ~~29, 2018,~~28, 2019 as compared to the nine months ended December ~~30, 2017,~~29, 2018, primarily due to higher ~~revenue~~gross margin and higher revenue. Gross margin was positively impacted by favorable changes in product mix and lower ~~operating expenses. Operating expenses decreased primarily due to timing of product development spend.~~manufacturing costs, partially offset by average selling price erosion and lower factory utilization.

Infrastructure and Defense Products


	Three Months Ended										Three Months Ended
(In thousands, except percentages)	December 29, 2018			December 30, 2017			Increase		Percentage Change		December 28, 2019			December 29, 2018			Decrease			Percentage Change
Revenue	$	230,018		$	202,680		$	27,338	13.5	%	$	206,964		$	230,018		$	(23,054	)	(10.0	)%
Operating income	80,861			63,281			17,580		27.8		32,628			80,861			(48,233		)	(59.6	)
Operating income as a % of revenue	35.2		%	31.2		%					15.8		%	35.2		%

	Nine Months Ended										Nine Months Ended
(In thousands, except percentages)	December 29, 2018			December 30, 2017			Increase		Percentage Change		December 28, 2019			December 29, 2018			Decrease			Percentage Change
Revenue	$	654,513		$	576,534		$	77,979	13.5	%	$	609,901		$	654,513		$	(44,612	)	(6.8	)%
Operating income	192,376			170,516			21,860		12.8		97,721			192,376			(94,655		)	(49.2	)
Operating income as a % of revenue	29.4		%	29.6		%					16.0		%	29.4		%

IDP revenue ~~increased~~decreased $23.1 million, or 10.0%, for the three months ended December ~~29, 2018,~~28, 2019 as compared to the three months ended December ~~30, 2017,~~29, 2018, primarily due to ~~higher~~lower demand for our base station ~~products.~~ products as a result of trade restrictions, partially offset by higher demand for our defense and aerospace products as well as sales of our programmable power management products as a result of the acquisition of Active-Semi.

IDP revenue ~~increased~~decreased $44.6 million, or 6.8%, for the nine months ended

December ~~29, 2018,~~28, 2019 as compared to the nine months ended December ~~30, 2017,~~29, 2018, primarily due to ~~higher~~lower demand for our base station products as a result of trade restrictions and lower demand for our Wi-Fi ~~products.~~products, partially offset by sales of our programmable power management products as a result of the acquisition of Active-Semi.

IDP operating income ~~increased $17.6~~decreased $48.2 million, or ~~27.8%~~59.6%, for the three months ended December ~~29, 2018,~~28, 2019 as compared to the three months ended December ~~30, 2017,~~29, 2018, primarily due to higher operating expenses, lower gross margin and lower revenue. The increase in operating expenses was primarily due to higher personnel costs and the addition of Active-Semi expenses. Gross margin was negatively impacted by lower factory utilization, unfavorable changes in product mix and inventory charges.

IDP operating income ~~increased $21.9~~decreased $94.7 million, or ~~12.8%~~49.2%, for the nine months ended December ~~29, 2018,~~28, 2019 as compared to the nine months ended December ~~30, 2017,~~29, 2018, primarily due to higher ~~revenue, partially offset by higher~~ operating expenses, lower gross margin and lower ~~gross margin. Operating~~revenue. The increase in operating expenses ~~increased~~was primarily due to higher personnel ~~related costs.~~costs and the addition of Active-Semi expenses. Gross margin was negatively impacted by lower factory ~~utilization.~~utilization, inventory charges and average selling price erosion.

See Note 1011 of the Notes to ~~the~~ Condensed Consolidated Financial Statements for a reconciliation of segment operating income to the consolidated operating income ~~(loss)~~ for the three and nine months ended December ~~29, 2018~~28, 2019 and December ~~30, 2017.~~29, 2018.

OTHER (EXPENSE) INCOME AND INCOME TAXES


	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
(In thousands)	December 29, 2018			December 30, 2017			December 29, 2018			December 30, 2017			December 28, 2019			December 29, 2018			December 28, 2019			December 29, 2018
Interest expense	$	(9,562	)	$	(16,338	)	$	(33,604	)	$	(43,387	)	$	(16,900	)	$	(9,562	)	$	(41,457	)	$	(33,604	)
Interest income	2,814			2,215			7,788			4,039			2,874			2,814			8,112			7,788
Other expense	(3,520		)	(757		)	(85,007		)	(1,883		)
Other income (expense)													44,148			(3,520		)	42,737			(85,007		)
Income tax (expense) benefit	(1,372		)	(98,522		)	30,012			(88,611		)	(21,835		)	(1,372		)	(46,519		)	30,012

Interest Expense

During the three and nine months ended December 28, 2019, we recorded interest expense of $18.3 million and $45.8 million, respectively, primarily related to the 5.50% senior notes due July 15, 2026 (the "2026 Notes") and the 2029 Notes, which was partially offset by $1.4 million and $4.4 million, respectively, of capitalized interest.

During the three months ended December 29, 2018, we recorded interest expense of ~~$10.8~~$11.5 million primarily related to the 7.00% senior notes due December 1, 2025 ~~Notes~~(the "2025 Notes") and the 2026 Notes, ~~(which~~which was partially offset by $1.9 million of capitalized ~~interest).~~interest. During the nine months ended December 29, 2018, we recorded interest expense of ~~$38.8~~$40.8 million primarily related to the 6.75% senior notes due December 1, 2023 ~~Notes,~~(the "2023 Notes"), the 2025 Notes and the 2026 Notes, ~~(which~~which was partially offset by $7.2 million of capitalized ~~interest).~~ interest.

Other Income (Expense)

During the three and nine months ended December ~~30, 2017,~~28, 2019, we recorded ~~interest expense~~a gain of ~~$17.7~~$43.0 million ~~and $52.3 million, respectively,~~ related to the ~~2023 Notes and 2025 Notes (which was partially offset by $2.0 million and $10.8 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~~remeasurement of our ~~2023 Notes and 2025 Notes, respectively, and we redeemed~~previously held equity interest in Cavendish in connection with our purchase of the remaining ~~$15.3 million aggregate principal amount~~issued and outstanding capital of ~~our 2023 Notes. In addition, during~~ the ~~second quarter~~entity (see Note 4 of ~~fiscal 2019, we completed~~ the ~~issuance of $630.0 million aggregate principal amount of our 2026 Notes. During~~Notes to Condensed Consolidated Financial Statements for information regarding the third quarter of fiscal 2019, we repurchased $21.1 million of our 2025 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 $27.4 million.

~~Other Expense~~

Cavendish acquisition). During the three and nine months ended December 29, 2018, we recorded a loss on debt extinguishment of $1.8 million and $84.0 million, ~~respectively (see Note 6 of the Notes to the Condensed Consolidated Financial Statements for additional information regarding our debt extinguishment activity).~~respectively.

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. During the third quarter of fiscal 2019, in accordance with current SEC guidance, we finalized our accounting for the impact of the Tax Act within the SAB 118 measurement period of one year from the date of enactment of the Tax Act.

As of December 29, 2018, we completed accounting for the tax effects of the Tax Act described above, and in the first three quarters of fiscal 2019, we recorded discrete income tax benefits of $17.7 million related to our fiscal 2018 estimated

provisional tax expense, consisting of $2.6 million to reduce the tax expense related to the previously recorded provisional amount for the Transitional Repatriation Tax and a $15.1 million increase in U.S. deferred tax assets. In addition, the new GILTI and limitations on compensation provisions enacted by the Tax Act became effective for the Company in fiscal 2019 and have been accounted for in the calculation of current year taxes. The GILTI provisions result in income earned by certain foreign subsidiaries being included in the gross income of its direct and indirect U.S. shareholders.

Our provision for income taxes for the three and nine months ended December ~~29, 2018~~28, 2019 and December ~~30, 2017~~29, 2018 was calculated by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pre-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 29, 2018 and December 30, 2017.~~those respective periods.

For the three and nine months ended December ~~29, 2018,~~28, 2019, we recorded an income tax expense of ~~$1.4~~$21.8 million and ~~income tax benefit of $30.0~~$46.5 million, respectively, which was comprised primarily of tax ~~benefits~~expense related to international operations generating pre-tax book income and the reversal of the permanent reinvestment assertion with regards to unrepatriated foreign earnings, offset by a tax benefit related to domestic and international operations generating pre-tax book losses and domestic tax credits. For the three months ended December 29, 2018, we recorded income tax expense of $1.4 million, which was comprised primarily of tax expense related to international operations generating pre-tax book income, partially offset by tax benefit related to domestic and international operations generating pre-tax book losses. For the nine months ended December 29, 2018, we recorded income tax benefit of $30.0 million, which was comprised primarily of tax benefit related to domestic and international operations generating pre-tax book losses, a tax incentive granted in Singapore and adjustments in the provisional estimates required by the Tax Cuts and Jobs Act, ~~estimates and a Singapore tax incentive granted during the second quarter,~~partially offset by a tax expense related to international operations generating pre-tax book income.

For the three and nine months ended December 30, 2017, we had income tax expense of $98.5 million and $88.6 million, respectively, which was comprised primarily of tax expenses related to the Transitional Repatriation Tax, international operations generating pre-tax book income and the adoption of new accounting guidance related to intra-entity transfers of assets, offset by tax benefits from a provisional remeasurement of U.S. deferred tax assets and liabilities for the decrease in the U.S. federal corporate income tax rate from 35% to 21% upon enactment of the Tax Act, domestic operations generating pre-tax book losses and, for the nine months only, tax benefit from the adoption of new accounting guidance related to stock compensation.

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 ~~29, 2018,~~28, 2019, we had working capital of approximately ~~$1,201.6~~$1,576.5 million, including ~~$649.7~~$1,097.7 million in cash and cash equivalents, compared to working capital of approximately ~~$1,402.5~~$1,249.2 million at March ~~31, 2018,~~30, 2019, including ~~$926.0~~$711.0 million in cash and cash equivalents. The ~~decrease~~increase in working capital was primarily due to the ~~retirement~~issuance of $550.0 million aggregate principal amount of the ~~2023~~2029 Notes in the third quarter of fiscal 2020 and ~~a majority~~the $100.0 million draw on the Term Loan (as defined in “Commitments and Contingencies” below) in the first quarter of ~~the 2025 Notes.~~fiscal 2020. These ~~amounts~~increases to working capital were partially offset by the ~~issuance~~acquisition of Active-Semi in the ~~2026 Notes as well as an increase~~first quarter of fiscal 2020 and the acquisition of Cavendish in ~~accounts receivable as~~the third quarter of ~~December 29, 2018 as compared to March 31, 2018.~~fiscal 2020.

Our ~~$649.7~~$1,097.7 million of total cash and cash equivalents as of December ~~29, 2018~~28, 2019 includes approximately ~~$603.7~~$573.1 million held by our foreign subsidiaries, of which ~~$476.7~~$485.1 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 these earnings. ~~Under our current plans, we may repatriate the foreign earnings of Qorvo International Pte. Ltd. and expect to permanently reinvest the undistributed earnings of our other foreign subsidiaries.~~

Stock Repurchases

On October 31, 2019, we announced that our Board of Directors authorized a new share repurchase program (see Note 8 of the Notes to Condensed Consolidated Financial Statements for information regarding the new share repurchase program). During the nine months ended December ~~29, 2018,~~28, 2019, we repurchased approximately ~~4.6~~5.1 million shares of our common stock for approximately ~~$338.7~~$390.1 million under ~~the~~our prior and current ~~and prior~~ share repurchase programs. As of December ~~29, 2018, $697.2~~28, 2019, $890.9 million ~~remains~~remained available for repurchases under ~~our~~the current ~~share repurchase~~ program.

Cash Flows from Operating Activities

Operating activities for the nine months ended December ~~29, 2018~~28, 2019 generated cash of ~~$623.0~~$731.3 million, compared to ~~$593.6~~$623.0 million for the nine months ended December ~~30, 2017. This year-over-year increase was attributable~~29, 2018, primarily due to ~~improved profitability, primarily as a result of higher revenue.~~favorable changes in working capital driven by improvements in days sales outstanding during the nine months ended December 28, 2019.

Cash Flows from Investing Activities

Net cash used in investing activities was $623.1 million for the nine months ended December 28, 2019, compared to $205.5 million for the nine months ended December 29, 2018, ~~compared to $246.4 million for the nine months ended December 30, 2017. This year-over-year decrease was~~ primarily due to ~~lower capital expenditures in fiscal 2019.~~the acquisitions of Active-Semi and Cavendish.

Cash Flows from Financing Activities

Net cash provided by financing activities was $279.1 million for the nine months ended December 28, 2019, compared to net cash used in financing activities ~~was~~of $691.5 million for the nine months ended December 29, ~~2018, compared to $53.1 million for~~2018. During the nine months ended December ~~30, 2017. This year-over-year increase was primarily due to~~29, 2018, cash disbursed in connection with the retirement of all of the 2023 Notes and a majority of the 2025 Notes ~~and higher share repurchase activity in the nine months ended December 29, 2018. The increase~~ was partially offset by ~~the~~cash proceeds received from the issuance of the 2026 ~~Notes in~~Notes. During the nine months ended December ~~29, 2018.~~28, 2019, we received cash proceeds of $559.0 million from the issuance of the 2029 Notes and $100.0 million from the draw on the Term Loan.

COMMITMENTS AND CONTINGENCIES

2023 Notes ~~Offering 2015~~and 2025 NotesOn 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 our 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 2025 Notes during the three and nine months ended December 28, 2019 was $0.8 million and $1.6 million, respectively. Interest paid on the 2025 Notes during the three months ended December 29, 2018 was $4.0 ~~million. Interest~~million, and interest paid on the 2023 Notes and ~~the~~ 2025 Notes during the nine months ended December 29, 2018 was $45.5 million. ~~Interest paid on~~

In fiscal years 2018 and 2019, we retired all of the issued and outstanding 2023 Notes and ~~the 2025 Notes during the three and nine months ended December 30, 2017 was $34.5~~$526.6 million ~~and $68.9 million, respectively.~~

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.

In November 2018 and December 2018, we repurchased $1.1 million and $20.0 million, respectively, of the 2025 Notes, at prices equal to 107.25% and 107.63%, respectively, of the principal amount of the 2025 Notes purchased, plus accrued and unpaid interest.Notes. As of December ~~29, 2018, 2025 Notes with~~28, 2019, an aggregate principal amount of ~~$91.0~~$23.4 million of the 2025 Notes remained outstanding.

See Note 67 of the Notes to ~~the~~ Condensed Consolidated Financial Statements for additional information regarding the 2023 Notes and the 2025 Notes.

2026 Notes ~~Offering 2018~~ On July 16, 2018, we ~~completed an offering of~~issued $500.0 million aggregate principal amount of ~~our~~the 2026 ~~Notes (the "Initial 2026 Notes").~~Notes. On August 28, 2018 and March 5, 2019, we completed ~~an offering~~offerings of an additional $130.0 million and $270.0 million, respectively, 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 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.Notes. The 2026 Notes are senior unsecured obligations of the Company and are guaranteed, jointly and severally, by each of the Guarantors. Interest on the 2026 Notes is payable on January 15 and July 15 of each year at a rate of 5.50% per annum.

~~The Initial~~ We paid no interest on the 2026 Notes ~~were issued pursuant to an indenture dated as~~during the three months ended December 28, 2019 and paid interest of ~~July 16, 2018 by and among~~$24.8 million on 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~~during the nine months ended December 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 (see2019.

See Note 67 of the Notes to ~~the~~ Condensed Consolidated Financial ~~Statements).~~Statements for additional information regarding the 2026 Notes.

2029 Notes On September 30, 2019, we issued $350.0 million aggregate principal amount of the 2029 Notes. On December 20, 2019, we completed an offering of an additional $200.0 million aggregate principal amount of the 2029 Notes. The ~~2026~~2029 Notes ~~have not been registered under~~are senior unsecured obligations of the ~~Securities Act or any state securities laws~~Company and ~~may not be offered or sold in~~are guaranteed, jointly and severally, by each of the ~~United States absent registration or an applicable exemption from such registration requirements.~~Guarantors.

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

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

Credit AgreementOn December 5, 2017, we and the Guarantors entered into a five-year unsecured senior credit facility with Bank of America, N.A., as administrative agent, swing line lender, and L/C issuer, and a syndicate of lenders (the “Credit Agreement”). On the same date, in connection with the 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 "First Amendment") to the Credit Agreement, and on December 17, 2018, we and the Guarantors entered into the Second Amendment (the "Second Amendment") to the Credit Agreement.

The Credit Agreement ~~includes~~included 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",). In addition, we may request one or more additional tranches of term loans or increases in the Revolving Facility, up to an aggregate of $300.0 million and subject to securing additional funding commitments from the existing or new lenders (the “Incremental Facility,” together with the Term Loan and the ~~"Credit Facility"~~Revolving Facility, the “Credit Facility”). On the closing date, $100.0 million of the Term Loan was funded, and this amount was subsequently repaid in March 2018. On June 17, 2019, we drew $100.0 million of the Term Loan. The ~~remainder~~delayed draw availability period for the remaining $200.0 million of the Term Loan is available, at our discretion, in up to two draws. The First Amendment, among other things, extended the delayed draw availability period from June 5, 2018 to January 3, 2019, and the Second Amendment, among other things, further extended such period to June 30,expired on December 31, 2019. The Revolving Facility includes a $25.0 million sublimit for the issuance of standby letters of credit and a $10.0 million sublimit for swing line loans. ~~We may request at any time that the Credit Facility be increased up to $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~~During the three and nine months ended December 28, 2019, there were no ~~outstanding amounts~~borrowings under the ~~Credit Facility as of~~Revolving Facility. Interest paid on the Term Loan during the three and nine months ended December ~~29, 2018.~~28, 2019 was $0.7 million and $1.6 million, respectively.

The Credit Agreement contains various conditions, covenants and representations with which we must be in compliance in order to borrow funds and to avoid an event of default. As of December ~~29, 2018,~~28, 2019, we were in compliance with all the financial covenants under the Credit Agreement.

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

Capital Commitments At December ~~29, 2018,~~28, 2019, we had capital commitments of approximately ~~$89.0~~$47.5 million primarily for projects related to ~~projects to increase our~~GaN technology capabilities, premium filter capacity ~~projects for~~and manufacturing cost savings initiatives, as well as for equipment replacements and general corporate purposes.

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

See Note 15 of the Notes to Condensed Consolidated Financial Statements for additional information regarding the pending business acquisitions.

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 quarter of fiscal ~~2019~~2020. For a discussion of our exposure to market risk, refer to Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” contained in Qorvo's Annual Report on Form 10-K for the fiscal year ended March ~~31, 2018~~30, 2019.

ITEM 4. CONTROLS AND PROCEDURES.

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

There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended December ~~29, 2018~~28, 2019 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 March ~~31, 2018,~~30, 2019, which could materially affect our business, financial condition or future results. The risks described in Qorvo's Annual Report on Form 10-K for the fiscal year ended March ~~31, 2018~~30, 2019 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
September 30, 2018 to October 27, 2018 197
$ 74.07
197
$834.7 million
October 28, 2018 to November 24, 2018 706
$ 66.97
706
$787.4 million
November 25, 2018 to December 29, 2018 1,401
$ 64.32
1,401
$697.2 million
Total 2,304
$ 65.97
2,304
$697.2 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
September 29, 2019 to October 26, 2019	167	$	75.91	167	$120.2 million
October 27, 2019 to November 23, 2019	486	$	100.49	486	$954.3 million
November 24, 2019 to December 28, 2019	606	$	104.81	606	$890.9 million
Total	1,259	$	99.30	1,259	$890.9 million

On ~~May 23, 2018,~~October 31, 2019, we announced that our Board of Directors authorized a new share repurchase program to repurchase up to $1.0 billion of ~~our~~the Company's outstanding common stock, which included approximately ~~$126.3~~$117.0 million authorized under athe prior ~~share repurchase~~ program which was 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, 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		~~Second 2018~~Indenture, dated as of September 30, 2019, among Qorvo, Inc., the Guarantors party thereto and MUFG Union Bank, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on October 1, 2019)

4.2		Registration Rights Agreement, dated as of September 30, 2019, among Qorvo, Inc., the Guarantors named therein and BofA Securities, Inc., as representative of the several Initial Purchasers named therein (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on October 1, 2019)

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

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

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

10.2		2019 Declaration of Amendment to Qorvo, Inc. Nonqualified Deferred Compensation Plan, dated as of October ~~8, 2018~~30, 2019

~~10.2~~		Second Amendment to Credit Agreement, dated as of December 17, 2018, by and between Qorvo, Inc., certain of its material domestic subsidiaries, the lenders party thereto, and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on December 18, 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) 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 ~~29, 2018,~~28, 2019, formatted in ~~XBRL (eXtensible~~iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets as of December ~~29, 2018~~28, 2019 and March ~~31, 2018;~~30, 2019; (ii) the Condensed Consolidated Statements of ~~Operations~~Income for the three and nine months ended December ~~29, 2018~~28, 2019 and December ~~30, 2017;~~29, 2018; (iii) the Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the three and nine months ended December ~~29, 2018~~28, 2019 and December ~~30, 2017;~~29, 2018; (iv) the Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended December 28, 2019 and December 29, 2018; (v) the Condensed Consolidated Statements of Cash Flows for the nine months ended December ~~29, 2018~~28, 2019 and December ~~30, 2017;~~29, 2018; and ~~(v)~~(vi) the Notes to Condensed Consolidated Financial Statements

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

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

SIGNATURES

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



		Qorvo, Inc.

Date:	~~February 7, 2019~~January 30, 2020	/s/ Mark J. Murphy
		Mark J. Murphy
		Chief Financial Officer

3841



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



	December 29, 2018			March 31, 2018
6.75% Senior Notes due 2023	$	—		$	444,464
7.00% Senior Notes due 2025	91,009			548,500
5.50% Senior Notes due 2026	630,000			—
Less unamortized premium and issuance costs	(6,607		)	(9,674		)
Total long-term debt	$	714,402		$	983,290



	Condensed Consolidating Statement of Income and Comprehensive (Loss) Income
	Nine Months Ended December 30, 2017
(in thousands)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations and Reclassifications			Consolidated
Revenue	$	—		$	829,625		$	2,108,231		$	(629,703	)	$	2,308,153
Cost of goods sold	—			592,928			1,346,505			(525,606		)	1,413,827
Gross profit	—			236,697			761,726			(104,097		)	894,326
Operating expenses:
Research and development	20,600			34,728			292,926			(13,946		)	334,308
Selling, general and administrative	37,252			190,336			268,072			(90,807		)	404,853
Other operating expense	448			39,659			12,764			239			53,110
Total operating expenses	58,300			264,723			573,762			(104,514		)	792,271
Income (loss) from operations	(58,300		)	(28,026		)	187,964			417			102,055
Interest expense	(42,367		)	(1,689		)	(1,161		)	1,830			(43,387		)
Interest income	—			1,439			4,430			(1,830		)	4,039
Other (expense) income	—			207			(2,090		)	—			(1,883		)
Income (loss) before income taxes	(100,667		)	(28,069		)	189,143			417			60,824
Income tax (expense) benefit	5,657			(76,149		)	(18,119		)	—			(88,611		)
Income in subsidiaries	67,223			171,024			—			(238,247		)	—
Net (loss) income	$	(27,787	)	$	66,806		$	171,024		$	(237,830	)	$	(27,787	)

Comprehensive (loss) income	$	(26,563	)	$	68,783		$	172,528		$	(241,311	)	$	(26,563	)