UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



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

For the quarterly period ended ~~September 28, 2019~~June 27, 2020



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

For the transition period from _____to _____

Commission File Number 001-36801

Qorvo, Inc.

(Exact name of registrant as specified in its charter)



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

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

(336) 664-1233

Registrant's telephone number, including area code



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

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

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

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



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

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

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

As of ~~October 23, 2019,~~July 27, 2020, there were ~~116,174,131~~114,236,461 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 ~~September 28, 2019~~June 27, 2020 and March ~~30, 2019~~28, 2020	3
Condensed Consolidated Statements of Income for the three ~~and six~~ months ended ~~September 28,~~June 27, 2020 and June 29, 2019 ~~and September 29, 2018~~	4
Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the three ~~and six~~ months ended ~~September 28,~~June 27, 2020 and June 29, 2019 ~~and September 29, 2018~~	5
Condensed Consolidated Statements of Stockholders' Equity for the three ~~and six~~ months ended ~~September 28,~~June 27, 2020 and June 29, 2019 ~~and September 29, 2018~~	6
Condensed Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~September 28,~~June 27, 2020 and June 29, 2019 ~~and September 29, 2018~~	87
Notes to Condensed Consolidated Financial Statements	98

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.	3019
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	3826
Item 4. Controls and Procedures.	3826

PART II — OTHER INFORMATION	3826

Item 1A. Risk Factors.	3827
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	3928
Item 6. Exhibits.	4029

SIGNATURES	4130

PART I — FINANCIAL INFORMATION

ITEM 1.

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)


	September 28, 2019			March 30, 2019			June 27, 2020		March 28, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	586,794		$	711,035		$	1,136,302	$	714,939
Accounts receivable, less allowance of $43 and $40 as of September 28, 2019 and March 30, 2019, respectively	405,108			378,172
Inventories (Note 3)	485,284			511,793
Accounts receivable, net of allowance of $288 and $55 as of June 27, 2020 and March 28, 2020, respectively							325,993		367,172
Inventories							523,690		517,198
Prepaid expenses	27,286			25,766			43,795		37,872
Other receivables	14,137			21,934			11,369		15,016
Other current assets	33,205			36,141			38,180		38,305
Total current assets	1,551,814			1,684,841			2,079,329		1,690,502
Property and equipment, net of accumulated depreciation of $1,322,103 at September 28, 2019 and $1,218,507 at March 30, 2019	1,296,103			1,366,513
Goodwill (Note 4)	2,305,136			2,173,889
Intangible assets, net (Note 4)	451,788			408,210
Long-term investments (Note 5)	97,549			97,786
Other non-current assets (Note 6)	146,181			76,785
Property and equipment, net of accumulated depreciation of $1,459,728 and $1,415,397 as of June 27, 2020 and March 28, 2020, respectively							1,235,676		1,259,203
Goodwill							2,615,178		2,614,274
Intangible assets, net							738,346		808,892
Long-term investments							36,921		22,515
Other non-current assets							177,236		165,296
Total assets	$	5,848,571		$	5,808,024		$	6,882,686	$	6,560,682
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	213,936		$	233,307		$	225,905	$	246,954
Accrued liabilities	172,345			160,516			192,353		217,801
Current portion of long-term debt (Note 7)	4,233			80
Other current liabilities (Note 6)	59,115			41,711
Current portion of long-term debt							6,587		6,893
Other current liabilities							84,487		67,355
Total current liabilities	449,629			435,614			509,332		539,003
Long-term debt (Note 7)	1,016,063			920,935
Other long-term liabilities (Note 6)	117,385			91,796
Long-term debt							1,869,502		1,567,231
Other long-term liabilities							152,607		161,783
Total liabilities	1,583,077			1,448,345			2,531,441		2,268,017
Commitments and contingent liabilities (Note 9)
Stockholders’ equity:
Preferred stock, $.0001 par value; 5,000 shares authorized; no shares issued and outstanding	—			—			—		—
Common stock and additional paid-in capital, $.0001 par value; 405,000 shares authorized; 116,294 and 119,063 shares issued and outstanding at September 28, 2019 and March 30, 2019, respectively	4,471,656			4,687,455
Accumulated other comprehensive loss, net of tax	(7,658		)	(6,624		)
Accumulated deficit	(198,504		)	(321,152		)
Common stock and additional paid-in capital, $.0001 par value; 405,000 shares authorized; 114,354 and 114,625 shares issued and outstanding at June 27, 2020 and March 28, 2020, respectively							4,293,621		4,290,377
Accumulated other comprehensive income, net of tax							8,394		2,288
Retained earnings							49,230		—
Total stockholders’ equity	4,265,494			4,359,679			4,351,245		4,292,665
Total liabilities and stockholders’ equity	$	5,848,571		$	5,808,024		$	6,882,686	$	6,560,682

See accompanying Notes to Condensed Consolidated Financial Statements.

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)


	Three Months Ended						Six Months Ended						Three Months Ended
	September 28, 2019			September 29, 2018			September 28, 2019			September 29, 2018			June 27, 2020			June 29, 2019
Revenue	$	806,698		$	884,443		$	1,582,296		$	1,577,113		$	787,451		$	775,598
Cost of goods sold	483,116			530,929			964,425			986,866			461,662			481,309
Gross profit	323,582			353,514			617,871			590,247			325,789			294,289
Operating expenses:
Research and development	115,614			116,748			234,534			227,651			130,071			118,920
Selling, general and administrative	88,274			139,507			177,253			275,437			86,604			88,979
Other operating expense (Notes 4 and 10)	6,927			6,782			38,091			15,897
Other operating expense													16,402			31,164
Total operating expenses	210,815			263,037			449,878			518,985			233,077			239,063
Income from operations	112,767			90,477			167,993			71,262
Interest expense (Note 7)	(12,693		)	(9,689		)	(24,557		)	(24,042		)
Operating income													92,712			55,226
Interest expense													(18,849		)	(11,864		)
Interest income	2,292			1,580			5,238			4,974			1,190			2,946
Other expense (Note 7)	(300		)	(49,532		)	(1,411		)	(81,487		)
Other income (expense)													21,947			(1,111		)

Income (loss) before income taxes	102,066			32,836			147,263			(29,293		)
Income before income taxes													97,000			45,197

Income tax (expense) benefit (Note 12)	(19,028		)	(752		)	(24,684		)	31,384
Income tax expense													(78		)	(5,656		)
Net income	$	83,038		$	32,084		$	122,579		$	2,091		$	96,922		$	39,541

Net income per share (Note 13):
Net income per share:
Basic	$	0.71		$	0.26		$	1.04		$	0.02		$	0.85		$	0.33
Diluted	$	0.70		$	0.25		$	1.02		$	0.02		$	0.83		$	0.33

Weighted average shares of common stock outstanding (Note 13):
Weighted average shares of common stock outstanding:
Basic	117,294			125,643			117,945			125,859			114,585			118,756
Diluted	119,429			128,550			120,196			128,977			116,751			121,123

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						Six Months Ended						Three Months Ended
	September 28, 2019			September 29, 2018			September 28, 2019			September 29, 2018			June 27, 2020		June 29, 2019
Net income	$	83,038		$	32,084		$	122,579		$	2,091		$	96,922	$	39,541
Other comprehensive loss:
Unrealized gain on marketable securities, net of tax	—			85			—			90
Other comprehensive income (loss):
Foreign currency translation adjustment, including intra-entity foreign currency transactions that are of a long-term investment nature	(1,242		)	(181		)	(1,455		)	(2,394		)	6,087		(213		)
Reclassification adjustments, net of tax:
Foreign currency loss included in net income	231			—			353			—			—		122
Amortization of pension actuarial loss	34			24			68			48			19		34
Other comprehensive loss	(977		)	(72		)	(1,034		)	(2,256		)
Total comprehensive income (loss)	$	82,061		$	32,012		$	121,545		$	(165	)
Other comprehensive income (loss)													6,106		(57		)
Total comprehensive income													$	103,028	$	39,484

See accompanying Notes to Condensed Consolidated Financial Statements.

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands)

(Unaudited)


						Accumulated Other Comprehensive Loss				Accumulated Deficit													Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Accumulated Deficit)
	Common Stock												Common Stock
Three Months Ended	Shares		Amount						Total
Balance, June 29, 2019	117,943		$	4,625,566				$	(6,681			)		$	(281,542	)		$	4,337,343
																	Shares			Amount				Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Accumulated Deficit)				Total
Balance, March 28, 2020																	114,625			$	4,290,377					$				4,292,665
Net income																	—			—						96,922
Other comprehensive income																	—			—					6,106				—				6,106
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes																	232			(6,065		)	—			—				(6,065		)
Issuance of common stock in connection with employee stock purchase plan																	229			15,758			—			—				15,758
Cumulative-effect adoption of ASU 2016-13																	—			—			—			(38		)		(38		)
Repurchase of common stock, including transaction costs																	(732	)		(27,405		)	—			(47,634		)		(75,039		)
Stock-based compensation																	—			20,956			—			—				20,956
Other																	—			—			—			(20		)		(20		)
Balance, June 27, 2020																	114,354			$	4,293,621		$		8,394		$	49,230			$	4,351,245

Balance, March 30, 2019																	119,063			$	4,687,455		$	(6,624	)	$	(321,152	)		$	4,359,679
Net income	—		—					—						83,038				83,038			—		—			—				39,541				39,541
Other comprehensive loss	—		—			(977		)		—				(977		)	—			—			(57		)	—				(57		)
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	652		(12,033		)	—				—				(12,033		)	185			(3,576		)	—			—				(3,576		)
Issuance of common stock in connection with employee stock purchase plan																	239			14,948			—			—				14,948
Cumulative-effect adoption of ASU 2016-02																	—			—			—			69				69
Repurchase of common stock, including transaction costs	(2,301	)	(165,032		)	—				—				(165,032		)	(1,544	)		(100,073		)	—			—				(100,073		)
Stock-based compensation	—		23,155			—				—				23,155			—			26,812			—			—				26,812
Balance, September 28, 2019	116,294		$	4,471,656		$	(7,658	)		$	(198,504	)		$	4,265,494

Balance, June 30, 2018	125,598		$	5,167,311		$	(4,936	)		$	(484,270	)		$	4,678,105
Net income	—		—			—				32,084				32,084
Other comprehensive loss	—		—			(72		)		—				(72		)
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	552		(15,284		)	—				—				(15,284		)
Repurchase of common stock, including transaction costs	(1,104	)	(86,678		)	—				—				(86,678		)
Stock-based compensation	—		23,982			—				—				23,982
Balance, September 29, 2018	125,046		$	5,089,331		$	(5,008	)		$	(452,186	)		$	4,632,137
Balance, June 29, 2019																	117,943			$	4,625,566		$	(6,681	)	$	(281,542	)		$	4,337,343

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
Six Months Ended Shares Amount Total
Balance, March 30, 2019 119,063
$ 4,687,455
$ (6,624 ) $ (321,152 ) $ 4,359,679
Net income —
—
—
122,579
122,579
Other comprehensive loss —
—
(1,034 ) —
(1,034 )
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes 837
(15,609 ) —
—
(15,609 )
Issuance of common stock in connection with employee stock purchase plan 239
14,948
—
—
14,948
Cumulative-effect adoption of ASU 2016-02 —
—
—
69
69
Repurchase of common stock, including transaction costs (3,845 ) (265,105 ) —
—
(265,105 )
Stock-based compensation —
49,967
—
—
49,967
Balance, September 28, 2019 116,294
$ 4,471,656
$ (7,658 ) $ (198,504 ) $ 4,265,494

Balance, March 31, 2018 126,322
$ 5,237,085
$ (2,752 ) $ (458,769 ) $ 4,775,564
Net income —
—
—
2,091
2,091
Other comprehensive loss —
—
(2,256 ) —
(2,256 )
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes 818
(19,859 ) —
—
(19,859 )
Issuance of common stock in connection with employee stock purchase plan 249
14,282
—
—
14,282
Cumulative-effect adoption of ASU 2014-09

—
—
—
4,492
4,492
Repurchase of common stock, including transaction costs (2,343 ) (186,682 ) —
—
(186,682 )
Stock-based compensation —
44,505
—
—
44,505
Balance, September 29, 2018 125,046
$ 5,089,331
$ (5,008 ) $ (452,186 ) $ 4,632,137

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Six Months Ended

September 28, 2019 September 29, 2018
Cash flows from operating activities:
Net income $ 122,579
$ 2,091
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 118,622
90,214
Intangible assets amortization (Note 4)
114,837
266,708
Loss on debt extinguishment (Note 7)
—
82,152
Deferred income taxes (9,517 ) (42,962 )
Stock-based compensation expense 45,829
40,250
Other, net 5,153
(1,714 )
Changes in operating assets and liabilities:
Accounts receivable, net (20,990 ) (145,874 )
Inventories 41,874
556
Prepaid expenses and other current and non-current assets 8,380
1,589
Accounts payable and accrued liabilities (4,201 ) 23,980
Income tax payable and receivable 5,072
(20,965 )
Other liabilities 2,892
(6,229 )
Net cash provided by operating activities 430,530
289,796
Investing activities:
Purchase of property and equipment (88,338 ) (113,666 )
Purchase of available-for-sale debt securities —
(132,729 )
Purchase of a business, net of cash acquired (Note 4)
(299,673 ) —
Proceeds from sales and maturities of available-for-sale debt securities 1,950
133,132
Other investing activities (1,242 ) (19,492 )
Net cash used in investing activities (387,303 ) (132,755 )
Financing activities:
Repurchase of debt (Note 7)
—
(954,745 )
Proceeds from borrowings (Note 7)
100,000
—
Proceeds from debt issuances (Note 7)
—
631,300
Repurchase of common stock, including transaction costs (Note 8)
(265,105 ) (186,682 )
Proceeds from the issuance of common stock 20,205
18,406
Tax withholding paid on behalf of employees for restricted stock units (20,545 ) (24,181 )
Other financing activities (832 ) (7,057 )
Net cash used in financing activities (166,277 ) (522,959 )

Effect of exchange rate changes on cash (1,091 ) (2,216 )
Net decrease in cash, cash equivalents and restricted cash (124,141 ) (368,134 )
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 $ 587,241
$ 558,268
Non-cash investing information:
Capital expenditure adjustments included in accounts payable and accrued liabilities $ 30,052
$ 44,634

Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents $ 586,794
$ 557,924
Restricted cash included in "Other non-current assets" 447
344
Total cash, cash equivalents and restricted cash 587,241
558,268



	Three Months Ended
	June 27, 2020			June 29, 2019
Cash flows from operating activities:
Net income	$	96,922		$	39,541
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	49,987			63,904
Intangible assets amortization	72,128			58,366
Deferred income taxes	(15,705		)	(11,015		)
Stock-based compensation expense	21,859			24,953
Other, net	(8,728		)	8,296
Changes in operating assets and liabilities:
Accounts receivable, net	41,029			57,298
Inventories	(7,443		)	6,371
Prepaid expenses and other assets	(330		)	581
Accounts payable and accrued liabilities	(35,329		)	7,564
Income taxes payable and receivable	7,588			1,868
Other liabilities	(7,697		)	(609		)
Net cash provided by operating activities	214,281			257,118
Cash flows from investing activities:
Purchase of property and equipment	(29,832		)	(50,295		)
Purchase of businesses, net of cash acquired	155			(291,551		)
Proceeds from sales of available-for-sale debt securities	—			1,950
Other investing activities	6,330			(2,236		)
Net cash used in investing activities	(23,347		)	(342,132		)
Cash flows from financing activities:
Payment of debt	(1,250		)	—
Proceeds from borrowings and debt issuances	306,750			100,000
Repurchase of common stock, including transaction costs	(75,039		)	(100,073		)
Proceeds from the issuance of common stock	10,464			9,379
Tax withholding paid on behalf of employees for restricted stock units	(7,835		)	(4,806		)
Other financing activities	(3,249		)	(634		)
Net cash provided by financing activities	229,841			3,866

Effect of exchange rate changes on cash	507			(284		)
Net increase (decrease) in cash, cash equivalents and restricted cash	421,282			(81,432		)
Cash, cash equivalents and restricted cash at the beginning of the period	715,612			711,382
Cash, cash equivalents and restricted cash at the end of the period	$	1,136,894		$	629,950

Non-cash investing information:
Capital expenditure adjustments included in liabilities	$	19,530		$	25,270

Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	1,136,302		$	629,599
Restricted cash included in "Other current assets" and "Other non-current assets"	592			351
Total cash, cash equivalents and restricted cash	$	1,136,894		$	629,950

See accompanying Notes to Condensed Consolidated Financial Statements.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

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

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

The Company uses a 52- or 53-week fiscal year ending on the Saturday closest to March 31 of each year. The first fiscal quarter of each year ends on the Saturday closest to June 30, the second fiscal quarter of each year ends on the Saturday closest to September 30 and the third fiscal quarter of each year ends on the Saturday closest to December 31. Fiscal 2021 is a 53-week year and fiscal 2020 was a 52-week year; however, the first quarters of both fiscal years 2021 and 2020 ~~and 2019 are 52-week years.~~included 13 weeks.

2. RECENT ACCOUNTING PRONOUNCEMENTS

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

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

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

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

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

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

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

3. INVENTORIES

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


	September 28, 2019		March 30, 2019		June 27, 2020		March 28, 2020
Raw materials	$	106,500	$	118,608	$	117,868	$	112,671
Work in process	259,031		272,469		257,656		291,028
Finished goods	119,753		120,716		148,166		113,499
Total inventories	$	485,284	$	511,793	$	523,690	$	517,198

4. BUSINESS ~~ACQUISITION~~ACQUISITIONS

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

Active-Semi International, Inc.

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

During the three months ended June 27, 2020, the Company recognized an increase to goodwill of ~~$309.5~~approximately $0.1 million was allocated to Active-Semi's net tangible assets (approximately $19.8 million) and intangible assets (approximately $158.4 million) based on their estimated fair values as of May 6, 2019. The excess ofin connection with finalizing the purchase price ~~over~~allocation. The measurement period ended one year from the acquisition date.

Cavendish Kinetics Limited

Prior to fiscal 2020, the Company had an investment in preferred shares in 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 ~~net tangible assets~~measurement alternative in accordance with ASC 321, "Investments-Equity Securities."

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

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

During the three months ended June 27, 2020, the Company recognized an increase to goodwill of approximately ~~$131.2 million. The more significant intangible assets acquired included developed technology~~$1.5 million and a decrease to intangibles of ~~$76.7~~approximately $2.0 million ~~(being amortized over 5 to 9 years), customer relationships~~as a result of $40.9 million (being amortized over 5 years) and in-process research and development ("IPRD") of $40.6 million. During the six months ended September 28, 2019, $31.0 million of IPRD assets were completed, transferred to finite-lived intangible assets, and are being amortized over their useful lives of 5 to 7 years. The IPRD remaining as of September 28, 2019 is expected to be completed during fiscal 2021 with remaining costs to complete of less than $2.0 million.

purchase price allocation adjustments. The Company will continue to evaluate certain assets, liabilities, and tax estimates ~~that~~over the measurement period (up to one year from the October 4, 2019 acquisition date).

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Custom MMIC Design Services, Inc.

On February 6, 2020, the Company acquired all of the outstanding equity interests of Custom MMIC, a supplier of high-performance gallium arsenide ("GaAs") and gallium nitride ("GaN") monolithic microwave integrated circuits ("MMICs") for defense and commercial applications, for a total purchase price of $91.7 million. The acquisition expands the Company's millimeter wave ("mmWave") capabilities for product offerings in defense and commercial markets. On the acquisition date, the purchase price was comprised of cash consideration of $86.0 million and contingent consideration of $5.7 million (based on estimated fair value) which is payable to the sellers in the first quarter of fiscal 2022 if certain revenue targets are ~~subject~~achieved over a one-year period from the acquisition date. At June 27, 2020, the contingent consideration liability was remeasured to ~~change within~~fair value ($9.6 million, which is included in "Accrued liabilities") with changes recognized in "Other operating expense.” See Note 6 for further information related to the fair value measurement.

During the three months ended June 27, 2020, the Company recognized a decrease to goodwill of approximately $0.5 million as a result of purchase price allocation adjustments. The Company will continue to evaluate certain assets, liabilities, and tax estimates over the measurement period (up to one year from the acquisition date).

Decawave Limited

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

During the three months ended June 27, 2020, the Company recognized a decrease to goodwill of approximately $2.3 million as a result of purchase price allocation adjustments. The Company ~~recorded postcombination compensation expense as well as other~~will continue to evaluate certain assets, liabilities, and tax estimates over the measurement period (up to one year from the acquisition and integration related costs during the three and six months ended September 28, 2019 of $1.7 million and $23.0 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 six months ended September 28, 2019 of $3.5 million and $4.2 million, respectively, in "Cost of goods sold" in the Condensed Consolidated Statements of Income.date).

5. GOODWILL AND INTANGIBLE ASSETS

The ~~change~~changes in the carrying amount of goodwill for the ~~six~~three months ended ~~September 28, 2019, is~~June 27, 2020 are as follows (in thousands):

Mobile Products Infrastructure and Defense Products Total
Balance as of March 30, 2019 $ 1,751,503
$ 422,386
$ 2,173,889
Goodwill resulting from Active-Semi acquisition —
131,247
131,247
Balance as of September 28, 2019 $ 1,751,503
$ 553,633
$ 2,305,136



	Mobile Products			Infrastructure and Defense Products			Total
Balance as of March 28, 2020 (1)	$	2,005,432		$	608,842		$	2,614,274
Measurement period adjustments (Note 4)	(844		)	(346		)	(1,190		)
Effect of changes in foreign currency exchange rates (2)	2,094			—			2,094
Balance as of June 27, 2020 (1)	$	2,006,682		$	608,496		$	2,615,178

(1) The Company’s goodwill balance is presented net of accumulated impairment losses and write-offs of $621.6 million.

(2) Represents the impact of foreign currency translation when goodwill is recorded in foreign entities whose functional currency is also their local currency.

Goodwill is allocated to the reporting units that are expected to benefit from the synergies of the business combinations generating the underlying goodwill.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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


	September 28, 2019				March 30, 2019				June 27, 2020				March 28, 2020
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Intangible assets:
Developed technology	$	871,872	$	557,626	$	1,246,335	$	960,793	$	1,232,472	$	613,366	$	1,325,472	$	652,400
Customer relationships	426,522		309,864		1,272,725		1,161,735		458,150		360,649		463,772		346,799
Technology licenses									2,271		1,516		3,271		2,327
Backlog									1,600		667		1,600		267
Trade names	200		167		29,391		29,391		1,000		208		1,200		283
Technology licenses	3,205		1,954		14,704		13,026
Non-compete agreement	—		—		1,026		1,026
IPRD	19,600		N/A		10,000		N/A
In-process research and development									9,600		N/A		9,600		N/A
Effect of changes in foreign currency exchange rates (1)									9,773		114		6,064		11
Total	$	1,321,399	$	869,611	$	2,574,181	$	2,165,971	$	1,714,866	$	976,520	$	1,810,979	$	1,002,087

(1) Represents the impact of foreign currency translation when intangibles are recorded in foreign entities whose functional currency is also their local currency.

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

Total intangible assets amortization expense was ~~$56.4~~$72.1 million ~~and $114.8 million, respectively,~~ for the three ~~and six~~ months ended ~~September 28, 2019,~~June 27, 2020 and ~~$133.4~~$58.4 million ~~and $266.7 million, respectively,~~ for the three ~~and six~~ months ended ~~September~~June 29, ~~2018.~~2019.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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

~~Recurring~~Equity Method Investments

The Company invests in limited partnerships which are accounted for using the equity method. The carrying amounts of these investments as of June 27, 2020 and March 28, 2020 were $29.9 million and $14.2 million, respectively, and are classified as “Long-term investments” in the Condensed Consolidated Balance Sheets. During the three months ended June 27, 2020, the Company recorded $15.7 million of income based on its share of the limited partnerships' earnings. This amount is included in “Other income (expense)” in the Condensed Consolidated Statement of Income.

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

During fiscal 2020, the Company recorded an impairment of $18.3 million on an equity investment without a readily determinable fair value based on observable price changes present at the time. During the three months ended June 27, 2020, the Company recorded an additional impairment of $2.8 million to fully impair this investment.

Fair Value of Financial Instruments

The fair value of the financial assets and liabilities measured ~~at fair value~~ on a recurring basis was determined using the following levels of inputs as of ~~September 28, 2019~~June 27, 2020 and March ~~30, 2019~~28, 2020 (in thousands):

Total Quoted Prices In
Active Markets For
Identical Assets
(Level 1) Significant Other
Observable Inputs
(Level 2)
September 28, 2019
Assets
Marketable equity securities $ 979
$ 979
$ —

Invested funds in deferred compensation plan (1)

20,541
20,541
—
Total assets measured at fair value $ 21,520
$ 21,520
$ —
Liabilities

Deferred compensation plan obligation (1)
$ 20,541
$ 20,541
$ —
Total liabilities measured at fair value $ 20,541
$ 20,541
$ —

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

Auction rate securities (2)

1,950
—
1,950

Invested funds in deferred compensation plan (1)

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

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



				Total		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 27, 2020
	Assets
		Marketable equity securities		$	657	$	657	$	—	$	—
		Invested funds in deferred compensation plan (1)		24,049		24,049		—		—
			Total assets measured at fair value	$	24,706	$	24,706	$	—	$	—
	Liabilities
		Deferred compensation plan obligation (1)		$	24,049	$	24,049	$	—	$	—
		Contingent earn-out liability (2)		9,600		—		—		9,600
			Total liabilities measured at fair value	$	33,649	$	24,049	$	—	$	9,600

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

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

(2) The ~~Company's Level 2 auction rate securities were debt instruments~~Company recorded a contingent earn-out liability in conjunction 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 September 28, 2019 and March 30, 2019, the Company did not have any Level 3 assets or liabilities.~~

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

As of September 28, 2019, the Company has invested $60.0 million to acquire preferred shares of Cavendish Kinetics Limited (“Cavendish”). This investment was determined to be an equity investment without a readily determinableCustom MMIC acquisition. The fair value of this liability is estimated using an option pricing model and is ~~accounted for using the measurement alternative in accordance with ASC 321,~~ ~~"Investments - Equity Securities~~." As of September 28, 2019, 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. See Note 15 ~~for additional disclosures related~~remeasured to ~~the subsequent acquisition of the entire issued and outstanding capital of Cavendish.~~

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

~~Fair Value of Financial Instruments~~

~~Marketable securities are measured at~~ fair value ~~and recorded~~each period with changes in ~~"Cash and cash equivalents," "Other current assets" and "Long-term investments"~~fair value reported 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)"“Other operating expense” in the Condensed Consolidated Statements of ~~Income (equity securities).~~

~~Other Fair Value Disclosures~~

~~The carrying values~~ Income. As of ~~cash and cash equivalents, accounts receivable, accounts payable and other accrued liabilities approximate fair values because of~~June 27, 2020, no payments have been made for the ~~relatively short-term maturities of these instruments. See Note 7 for further disclosures related to~~contingent liability as the ~~fair value of the Company's 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.

~~In fiscal 2018, the Company entered into a finance lease which~~earn-out assessment period is still ongoing. Any anticipated payments are expected to ~~commence in~~be settled during the first quarter of fiscal 2021 and is not recorded in the Condensed Consolidated Balance Sheet as of September 28, 2019. The Company’s other finance lease, which is classified in "Property and equipment" in the Condensed Consolidated Balance Sheets, is immaterial for disclosure.

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 six months ended September 28, 2019, are as follows:~~

September 28, 2019
Three Months Ended Six Months Ended
Operating lease expense $ 3,963
$ 7,417
Short-term lease expense 1,187
3,152
Variable lease expense 1,181
1,595
Total lease expense $ 6,331
$ 12,164

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

Six Months Ended
September 28, 2019
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases $ 8,377

Non-cash activities:
Operating lease assets obtained in exchange for new lease liabilities $ 2,486

2022.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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

   Classification on the Condensed Consolidated Balance Sheet September 28, 2019
Assets
Operating lease assets Other non-current assets $ 61,693

Liabilities
Operating lease current liabilities    Other current liabilities $ 12,965
Operating lease non-current liabilities    Other long-term liabilities $ 56,923

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



	~~September 28, 2019~~
~~Weighted-average remaining lease term (years) - operating leases~~	~~8.70~~
~~Weighted-average discount rate - operating leases~~	~~4.24~~	%

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

September 28, 2019
2020 $ 7,575
2021 14,980
2022 11,823
2023 9,167
2024 7,802
Thereafter 32,011
Total lease payments 83,358
Less imputed interest (13,470 )
Present value of lease liabilities $ 69,888

7. DEBT

Long-term debt as of ~~September 28, 2019~~June 27, 2020 and March ~~30, 2019~~28, 2020 is as follows (in thousands):


	September 28, 2019			March 30, 2019			June 27, 2020			March 28, 2020
Term loan	$	100,000		$	—		$	98,750		$	100,000
7.00% senior notes due 2025	23,404			23,404			23,404			23,404
5.50% senior notes due 2026	900,000			900,000			900,000			900,000
4.375% senior notes due 2029							850,000			550,000
Finance leases	2,123			1,745			1,816			2,252
Less unamortized premium and issuance costs	(5,231		)	(4,134		)
Unamortized premium and issuance costs, net							2,119			(1,532		)
Less current portion of long-term debt	(4,233		)	(80		)	(6,587		)	(6,893		)
Total long-term debt	$	1,016,063		$	920,935		$	1,869,502		$	1,567,231

Credit Agreement

On December 5, 2017, the Company and the Guarantors entered into a five-year unsecured senior credit facility pursuant to a credit agreement with Bank of America, N.A., as administrative agent (in such capacity, the “Administrative Agent”), swing line lender and L/C issuer, and a syndicate of lenders (the "Credit Agreement"). The Credit Agreement included a senior delayed draw term loan of up to $400.0 million (the "Term Loan") and a $300.0 million senior revolving line of credit (the "Revolving Facility"). In addition, the Company may request one or more additional tranches of term loans or increases in the Revolving Facility, up to an aggregate of $300.0 million and subject to securing additional funding commitments from the existing or new lenders (the “Incremental Facility,” together with the Term Loan and the Revolving Facility, the “Credit Facility”). On the closing date, $100.0 million of the Term Loan was funded (and subsequently repaid in March 2018). On June 17, 2019, the Company drew $100.0 million of the Term Loan. The delayed draw availability period for the remaining $200.0 million of the Term Loan expired on December 31, 2019. The Revolving Facility includes a $25.0 million sublimit for the issuance of standby letters of credit and a $10.0 million sublimit for swing line loans. The Credit Facility is available to finance working capital, capital expenditures and other corporate purposes. Outstanding amounts are due in full on the maturity date of December 5, 2022 (with amounts borrowed under the swing line option due in full no later than ten business days after such loan is made), subject to scheduled amortization of the Term Loan principal prior to the maturity date as set forth in the Credit Agreement. During the three months ended June 27, 2020, there were 0 borrowings under the Revolving Facility. Principal paid on the Term Loan during the three months ended June 27, 2020 was $1.3 million. Interest paid on the Term Loan during the three months ended June 27, 2020 was $0.5 million.

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 June 27, 2020, the Company was in compliance with these covenants.

Senior Notes due ~~2023 and~~ 2025

On November 19, 2015, the Company issued ~~$450.0~~$550.0 million aggregate principal amount ~~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~~Interest on the 2025 Notes ~~were,~~is payable on June 1 and ~~the~~December 1 of each year. The 2025 Notes are senior unsecured obligations of the Company and guaranteed, jointly and severally, by ~~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.

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

In fiscal years 2018 and 2019, the Company retired ~~all of the issued and outstanding 2023 Notes and~~ $526.6 million of the 2025 Notes. During the three and six months ended September 29, 2018, the Company recognized a loss on debt extinguishment of $48.8 million and $82.2 million, respectively, as "Other expense" in the Condensed Consolidated Statements of Income in connection with certain purchases of the 2023 Notes and the 2025 Notes. As of ~~September 28, 2019,~~June 27, 2020, an aggregate principal amount of $23.4 million of the 2025 Notes 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. The CompanyInterest paid ~~0 interest~~ on the 2025 Notes during both the three months ended ~~September 28,~~June 27, 2020 and June 29, 2019 ~~and paid interest of~~was $0.8 million on the 2025 Notes during the six months ended September 28, 2019. Interest paid on the 2023 Notes and the 2025 Notes during the three and six months ended September 29, 2018 was $7.3 million and $41.5 million, respectively.million.

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Senior Notes due 2026

On July 16, 2018, the Company issued $500.0 million aggregate principal amount of its 5.50% senior notes due 2026 (the “Initial 2026 Notes”). On August 28, 2018 and March 5, 2019, the Company issued an additional $130.0 million and $270.0 million, respectively, aggregate principal amount of such notes (together, the "Additional 2026 Notes" and together with the Initial 2026 Notes, the "2026 Notes"). Interest is payable on the 2026 Notes on January 15 and July 15 of each year. 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 the Guarantors.

The Initial 2026 Notes were issued pursuant to an indenture, dated as of July 16, 2018, by and among the Company, the Guarantors and MUFG Union Bank, N.A., as trustee, and the Additional 2026 Notes were issued pursuant to supplemental indentures, dated as of August 28, 2018 and March 5, 2019 ~~respectively~~ (such indenture and supplemental indentures, collectively, the "2018 Indenture"). 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 25, 2019, the Company completed the exchange offer, in which all of the privately placed 2026 Notes were exchanged for new notes that have been registered under the Securities Act of 1933, as amended (the "Securities Act").

~~Interest is payable on the 2026 Notes on January 15 and July 15 of each year at a rate of 5.50% per annum. Interest~~There was 0 interest paid on the 2026 Notes during the three ~~and six~~ months ended ~~September 28, 2019 was $24.8 million.~~June 27, 2020 or June 29, 2019.

~~Credit Agreement~~Senior Notes due 2029

On September 30, 2019, the Company issued $350.0 million aggregate principal amount of its 4.375% senior notes due 2029 (the “Initial 2029 Notes”). On December ~~5, 2017,~~20, 2019 and June 11, 2020, the Company issued an additional $200.0 million and $300.0 million, respectively, aggregate principal amount of such notes (together, the "Additional 2029 Notes" and together with the Initial 2029 Notes, the "2029 Notes"). Interest is payable on the 2029 Notes on April 15 and October 15 of each year. The 2029 Notes will mature on October 15, 2029, unless earlier redeemed in accordance with their terms. The 2029 Notes are senior unsecured obligations of the Company and are initially guaranteed, jointly and severally, by the Guarantors.

The Initial 2029 Notes were issued pursuant to an indenture, dated as of September 30, 2019, by and among the Company, the Guarantors and MUFG Union Bank, N.A., as trustee, and the Additional 2029 Notes were issued pursuant to supplemental indentures, dated as of December 20, 2019 and June 11, 2020 (such indenture and supplemental indentures, collectively, 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 and also contains customary negative covenants.

In connection with the offering of the Initial 2029 Notes, the Company entered into a registration rights agreement, dated as of September 30, 2019, by and among the Company and the Guarantors, ~~entered into a five-year unsecured senior credit facility~~on the one hand, and the representative of the initial purchasers of the Initial 2029 Notes, on the other hand, and substantially similar agreements, dated as of December 20, 2019 and June 11, 2020, with respect to the Additional 2029 Notes (collectively, the "Registration Rights Agreements").

On June 24, 2020, pursuant to ~~a credit agreement with Bank of America, N.A., as administrative agent (in such capacity,~~their obligations under the ~~“Administrative Agent”), swing line lender~~Registration Rights Agreements, the Company and L/C issuer, and a syndicate of lenders (the "Credit Agreement"). The Credit Agreement includes a senior delayed draw term loan of up to $400.0 million (the "Term Loan") and a $300.0 million senior revolving line of credit (the "Revolving Facility", togetherthe Guarantors filed with the ~~Term Loan,~~Securities and Exchange Commission a registration statement relating to the ~~"Credit Facility"~~registered exchange offer (the “Exchange Offer”)~~. On~~ to exchange the ~~closing date, $100.0 million~~2029 Notes for a new series of the ~~Term Loan was funded (and subsequently repaid~~Company’s exchange notes having terms substantially identical in ~~March 2018).~~all material respects to, and in the same aggregate principal amount as, the 2029 Notes. On ~~June 17, 2019,~~July 15, 2020, the Company ~~drew $100.0 million of~~and the ~~Term Loan, with~~Guarantors commenced the ~~remaining $200.0 million available, at the discretion of the Company, in a final draw. Subsequent amendments~~Exchange Offer, which is scheduled to the Credit Agreement have, among other things, extended the delayed draw availability period to 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 fullexpire on the maturity date of December 5, 2022 (with amounts borrowed under the swingline option due in full no later than ten business days after such loan is made), subject to scheduled amortization of the Term Loan principal as set forth in the Credit Agreement prior to the maturity date. During the six months ended September 28, 2019, there were 0 borrowings under the Revolving Facility. August 13, 2020.

Interest paid on the ~~Term Loan~~2029 Notes during the three ~~and six~~ months ended ~~September 28, 2019~~June 27, 2020 was ~~$0.9~~$13.0 million.

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

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 September 28, 2019, the Company was in compliance with these covenants.

Fair Value of Debt

The Company's debt is carried at amortized cost and is measured at fair value quarterly for disclosure purposes. The estimated fair value of the 2025 Notes, 2026 Notes and ~~the 2026~~2029 Notes as of ~~September 28, 2019~~June 27, 2020 was ~~$25.1~~$23.9 million, $941.6 million, and ~~$954.8~~$867.0 million, respectively (compared to a carrying value of $23.4 million, $900.0 million, and ~~$900.0~~$850.0 million, respectively). The estimated fair value of the 2025 Notes, 2026 Notes and the ~~2026~~2029 Notes as of March ~~30, 2019~~28, 2020 was ~~$25.8~~$23.9 million, $962.8 million, and ~~$929.3~~$489.5 million, ~~respectively.~~respectively (compared to a carrying value of $23.4 million, $900.0 million, and $550.0 million, respectively). The Company considers its debt to be Level 2 in the fair value hierarchy. Fair values are estimated based on quoted market prices for identical or similar instruments. The 2025 Notes, 2026 Notes 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 Company had no outstanding amounts under the Revolving Facility as of September 28, 2019.~~

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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 ~~September 28, 2019.~~June 27, 2020.

Interest Expense

During the three ~~and six~~ months ended ~~September 28, 2019,~~June 27, 2020, the Company recognized ~~$13.6~~$19.9 million ~~and $26.5 million, respectively,~~ of interest expense primarily related to ~~the 2025 Notes,~~ the 2026 Notes and the ~~Term Loan,~~2029 Notes, which was partially offset by ~~$1.3~~$1.1 million ~~and $3.0 million, respectively,~~ of interest capitalized to property and equipment. During the three ~~and six~~ months ended ~~September~~June 29, ~~2018,~~2019, the Company recognized ~~$10.9~~$13.6 million ~~and $28.0 million, respectively,~~ of interest expense primarily related to ~~the 2023 Notes, the 2025 Notes and~~ the 2026 Notes, which was partially offset by ~~$1.8~~$1.7 million ~~and $5.3 million, respectively,~~ of interest capitalized to property and equipment.

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 the prior program which was terminated concurrent with the new authorization. Under this program, share repurchases are made in accordance with applicable securities laws on the open market or in privately negotiated transactions. The extent to which the Company repurchases its shares, the number of shares and the timing of any repurchases depends on general market conditions, regulatory requirements, alternative investment opportunities and other considerations. The program does not require the Company to repurchase a minimum number of shares, does not have a fixed term, and may be modified, suspended or terminated at any time without prior notice.

During the three ~~and six~~ months ended ~~September 28, 2019,~~June 27, 2020, the Company repurchased approximately ~~2.3~~0.7 million shares ~~and 3.8 million shares, respectively,~~ of its common stock for approximately ~~$165.0~~$75.0 million ~~and $265.1 million, respectively.~~under the current share repurchase program. As of ~~September 28, 2019, $132.8~~June 27, 2020, approximately $690.9 million ~~remains~~remained available for repurchases under the current share repurchase program. ~~See Note~~ 15 ~~for information regarding the new share repurchase program which was announced by the Company on October 31, 2019.~~

During the three ~~and six~~ months ended ~~September~~June 29, ~~2018,~~2019, the Company repurchased approximately ~~1.1~~1.5 million shares ~~and 2.3 million shares, respectively,~~ of its common stock for approximately ~~$86.7~~$100.1 million under the prior share repurchase program.

9. COMMITMENTS AND CONTINGENT LIABILITIES

Legal Matters

The Company accrues a liability for legal contingencies when it believes that it is both probable that a liability has been incurred and ~~$186.7 million, respectively.~~that it can reasonably estimate the amount of the loss. The Company reviews these accruals and adjusts them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel and other relevant information. To the extent new information is obtained and the Company's views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in the Company's accrued liabilities would be recorded in the period in which such determination is made.

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

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

910. REVENUE

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



	Three Months Ended
	June 27, 2020		June 29, 2019
China	$	387,222	$	361,143
United States	248,246		267,496
Other Asia	58,097		70,009
Taiwan	53,328		40,989
Europe	40,558		35,961
Total revenue	$	787,451	$	775,598

Three Months Ended Six Months Ended
September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018
United States $ 452,926
$ 423,844
$ 720,422
$ 693,298
China 199,945
304,115
561,088
588,273
Other Asia 78,606
60,438
148,615
113,930
Taiwan 38,044
54,199
79,033
106,895
Europe 37,177
41,847
73,138
74,717
Total revenue $ 806,698
$ 884,443
$ 1,582,296
$ 1,577,113

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 September 29, 2018 information above has been reclassified to reflect this change. The Company believes that the disaggregation of revenue based on the location of the customers' headquarters is more representative of how its revenue and cash flows are impacted by geographically-sensitive changes in economic factors.

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

1011. RESTRUCTURING

~~In the third quarter of~~During fiscal 2019, the Company initiated restructuring actions to reduce operating expenses and improve its manufacturing cost structure, including the phased closure of a wafer fabrication facility in Florida and idling production at a wafer fabrication facility in Texas. As a result of these restructuring actions, the Company ~~expects to record total~~has recorded cumulative restructuring related charges totaling $92.9 million as of ~~approximately $95.0 million,~~the end of the first quarter of fiscal 2021, including accelerated depreciation of ~~$49.0~~$47.4 million (to reflect changes in estimated useful lives of certain property and equipment), impairment charges of ~~$16.0~~$15.9 million (to adjust the carrying value of certain property and equipment to reflect its fair value), employee termination benefits of ~~$16.0~~$13.9 million and other exit costs of ~~$14.0~~$15.7 million. ~~As of the end of the second quarter of fiscal 2020, the~~The Company ~~has recorded cumulative~~expects to record additional expenses of approximately ~~$42.9~~$0.4 million ~~$16.0 million, $12.3 million and $6.9 million~~ for ~~accelerated depreciation, impairment charges,~~ employee termination benefits and other exit costs ~~respectively,~~ as a result of these ~~restructuring actions (which are expected to be substantially completed by the end of fiscal 2020).~~

During fiscal 2018, the Company initiated restructuring actions to improve operating efficiencies. As of the end of the second quarter of fiscal 2020, the Company has recorded cumulative expenses of $46.3 million, $23.4 million and $0.2 million for impairment charges, employee termination benefits and other exit costs, respectively, as a result of these restructuring actions. ~~The Company believes these amounts approximate the total costs to be recognized as these restructuring actions are substantially complete.~~

In addition, the Company recorded immaterial restructuring expenses in the three and six months ended September 28, 2019 and September 29, 2018, related to exited leased facilities associated with other restructuring events.

The ~~Company does not allocate~~following table summarizes the restructuring ~~costs~~charges resulting from this restructuring event (in thousands):



	Three Months Ended June 27, 2020						Three Months Ended June 29, 2019
	Cost of Goods Sold		Other Operating Expense		Total		Cost of Goods Sold		Other Operating Expense		Total
One-time employee termination benefits	$	—	$	248	$	248	$	—	$	3,395	$	3,395
Contract termination and other associated costs	—		690		690		1,835		2,801		4,636
Accelerated depreciation	—		—		—		15,938		—		15,938
Total	$	—	$	938	$	938	$	17,773	$	6,196	$	23,969

The following table summarizes the activity related to ~~its reportable segments.~~the Company's restructuring liabilities for the three months ended June 27, 2020 (in thousands):



	One-Time Employee Termination Benefits			Contract Termination and Other Associated Costs			Total
Accrued restructuring balance as of March 28, 2020	$	1,728		$	270		$	1,998
Costs incurred and charged to expense	248			690			938
Cash payments	(206		)	(631		)	(837		)
Non-cash activity	—			(86		)	(86		)
Accrued restructuring balance as of June 27, 2020	$	1,770		$	243		$	2,013

QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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

Three Months Ended September 28, 2019 Three Months Ended September 29, 2018
Cost of Goods Sold Other Operating Expense Total Cost of Goods Sold Other Operating Expense Total
One-time employee termination benefits $ —
$ 1,414
$ 1,414
$ —
$ 497
$ 497
Contract termination and other associated costs 1,035
1,414
2,449
—
13
13
Accelerated depreciation 5,578
—
5,578
—
—
—
Total $ 6,613
$ 2,828
$ 9,441
$ —
$ 510
$ 510

Six Months Ended September 28, 2019 Six Months Ended September 29, 2018
Cost of Goods Sold Other Operating Expense Total Cost of Goods Sold Other Operating Expense Total
One-time employee termination benefits $ —
$ 4,809
$ 4,809
$ —
$ 3,135
$ 3,135
Contract termination and other associated costs 2,870
4,215
7,085
—
177
177
Accelerated depreciation 21,516
—
21,516
—
—
—
Total $ 24,386
$ 9,024
$ 33,410
$ —
$ 3,312
$ 3,312

~~The following table presents a roll-forward of the Company's restructuring liabilities for the six months ended September 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 4,809
21,516
7,085
33,410
Transfer to right-of-use asset —
—
(1,248 ) (1,248 )
Cash payments (5,115 ) —
(4,269 ) (9,384 )
Non-cash activity —
(21,516 ) (2,870 ) (24,386 )
Accrued restructuring balance as of September 28, 2019 $ 6,682
$ —
$ 324
$ 7,006

~~11.~~12. OPERATING SEGMENT INFORMATION

The Company's operating and reportable segments as of ~~September 28, 2019~~June 27, 2020 are Mobile Products ~~(MP)~~("MP") and Infrastructure and Defense Products ~~(IDP)~~("IDP") based on the organizational structure and information reviewed by the Company's Chief Executive Officer, who is the Company's chief operating decision maker ("CODM"), and these segments are managed separately based on the end markets and applications they support. The CODM allocates resources and assesses the performance of each operating segment primarily based on non-GAAP operating income.

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

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

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

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

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


	Three Months Ended						Six Months Ended						Three Months Ended
	September 28, 2019			September 29, 2018			September 28, 2019			September 29, 2018			June 27, 2020			June 29, 2019
Revenue:
MP	$	623,106		$	666,539		$	1,179,359		$	1,152,618		$	468,404		$	556,253
IDP	183,592			217,904			402,937			424,495			319,047			219,345
Total revenue	$	806,698		$	884,443		$	1,582,296		$	1,577,113		$	787,451		$	775,598
Operating income (loss):
MP	$	193,431		$	196,948		$	333,366		$	286,119		$	109,983		$	139,935
IDP	14,969			56,311			65,093			111,515			93,755			50,124
All other	(95,633		)	(162,782		)	(230,466		)	(326,372		)	(111,026		)	(134,833		)
Operating income	112,767			90,477			167,993			71,262			92,712			55,226
Interest expense	(12,693		)	(9,689		)	(24,557		)	(24,042		)	(18,849		)	(11,864		)
Interest income	2,292			1,580			5,238			4,974			1,190			2,946
Other expense (Note 7)	(300		)	(49,532		)	(1,411		)	(81,487		)
Income (loss) before income taxes	$	102,066		$	32,836		$	147,263		$	(29,293	)
Other income (expense)													21,947			(1,111		)
Income before income taxes													$	97,000		$	45,197

Three Months Ended Six Months Ended
September 28,
2019 September 29,
2018 September 28,
2019 September 29,
2018
Reconciliation of “All other” category:
Stock-based compensation expense $ (20,876 ) $ (20,905 ) $ (45,829 ) $ (40,250 )
Amortization of intangible assets (56,288 ) (133,116 ) (114,470 ) (266,291 )
Acquisition and integration related costs (7,549 ) (1,098 ) (30,679 ) (2,180 )
Restructuring costs (3,863 ) (510 ) (11,894 ) (3,312 )
Start-up costs (4 ) (5,883 ) (100 ) (11,244 )
Asset impairment and accelerated depreciation (6,635 ) —
(22,573 ) —
Other (including (loss) gain on assets and other miscellaneous corporate overhead) (418 ) (1,270 ) (4,921 ) (3,095 )
Loss from operations for “All other” $ (95,633 ) $ (162,782 ) $ (230,466 ) $ (326,372 )
QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)



	Three Months Ended
	June 27, 2020			June 29, 2019
Reconciliation of “All other” category:
Stock-based compensation expense	$	(21,859	)	$	(24,953	)
Amortization of intangible assets	(71,944		)	(58,182		)
Acquisition and integration related costs	(12,663		)	(23,130		)
Restructuring related charges	(938		)	(8,031		)
Accelerated depreciation	—			(15,938		)
Other (including (loss) gain on assets, start-up costs and other miscellaneous corporate overhead)	(3,622		)	(4,599		)
Loss from operations for “All other”	$	(111,026	)	$	(134,833	)

1213. INCOME TAXES

~~Income Tax Expense~~

The Company’s provision for income taxes for the three ~~and six~~ months ended ~~September 28,~~June 27, 2020 and June 29, 2019 ~~and September 29, 2018~~ was calculated by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss ~~(pre-~~

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

~~tax~~(pre-tax income or loss excluding unusual or infrequently occurring discrete items) for the three ~~and six~~ months ended ~~September 28, 2019~~June 27, 2020 and ~~September~~June 29, ~~2018.~~2019.

The Company’s income tax expense was ~~$19.0~~$0.1 million and ~~$24.7 million, respectively, for the three and six months ended September 28, 2019, and the Company’s income tax expense was $0.8 million and income tax benefit was $31.4~~$5.7 million for the three ~~and six~~ months ended ~~September~~June 27, 2020 and June 29, ~~2018,~~2019, respectively. The Company’s effective tax rate was ~~18.6%~~0.1% and ~~16.8%~~12.5% for the three ~~and six~~ months ended ~~September 28,~~June 27, 2020 and June 29, 2019, ~~respectively, and 2.3% and 107.1% for the three and six months ended September 29, 2018,~~ respectively.

The Company's effective tax rate for the three ~~and six~~ months ended ~~September 28, 2019~~June 27, 2020 differed from the statutory rate primarily due to tax rate differences in foreign jurisdictions, global intangible low tax income (“GILTI”), domestic tax credits generated foreign permanent differences, the discrete treatment of postcombination compensation expenses related to the Active-Semi acquisition, and a discrete expense related to the Company’s change in its permanent reinvestment assertion for certain unrepatriated foreign earnings previously subject to U.S. federal taxation. The Company's effective tax rate for the three and six months ended September 29, 2018 differed from the statutory rate primarily due to tax rate differences in foreign jurisdictions, foreign permanent differences, state income taxes, domestic tax credits generated, changes in unrecognized tax benefits, GILTI, a discrete tax benefit for changes in provisional estimates related to the one-time transition tax on certain unrepatriated earnings of foreign subsidiaries enacted in the Tax Cuts and Jobs Act and a discrete tax benefit resulting from a retroactive incentive allowing previously non-deductible payments to be amortized.

~~Management has concluded that it can no longer support an assertion that certain earnings which have previously been subject~~ The Company's effective tax rate for the three months ended June 29, 2019 differed from the statutory rate primarily due to ~~U.S. federal taxation at its~~tax rate differences in foreign ~~subsidiaries are permanently reinvested. During~~jurisdictions, GILTI, domestic tax credits generated, foreign permanent differences and the ~~second quarter~~discrete treatment of ~~fiscal 2020,~~post-combination compensation related expenses due to the Company updated forecasts of cash balances and cash flow outside the U.S. and began to implement a more centralized approach to cash management. As a result, the Company recorded $4.0 million discrete tax expense during the second quarter of fiscal 2020. The Company had previously released in the third quarter of fiscal 2018 its permanent reinvestment assertion on its operating subsidiary in Singapore, Qorvo International Pte. Ltd.Active-Semi acquisition.

1314. NET INCOME PER SHARE

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


	Three Months Ended				Six Months Ended				Three Months Ended
	September 28, 2019		September 29, 2018		September 28, 2019		September 29, 2018		June 27, 2020		June��29, 2019
Numerator:
Numerator for basic and diluted net income per share — net income available to common stockholders	$	83,038	$	32,084	$	122,579	$	2,091	$	96,922	$	39,541
Denominator:
Denominator for basic net income per share — weighted average shares	117,294		125,643		117,945		125,859		114,585		118,756
Effect of dilutive securities:
Stock-based awards	2,135		2,907		2,251		3,118		2,166		2,367
Denominator for diluted net income per share — adjusted weighted average shares and assumed conversions	119,429		128,550		120,196		128,977		116,751		121,123
Basic net income per share	$	0.71	$	0.26	$	1.04	$	0.02	$	0.85	$	0.33
Diluted net income per share	$	0.70	$	0.25	$	1.02	$	0.02	$	0.83	$	0.33

In the computation of diluted net income per share for the three ~~and six~~ months ended ~~September 28,~~June 27, 2020 and June 29, 2019, ~~approximately 0.4 million and 0.2~~less than 0.1 million outstanding shares respectively, were excluded because the effect of their inclusion would have been anti-dilutive. In the computation of diluted net income per share for the three and six months ended September 29, 2018,

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

~~approximately 0.3 million and 0.2 million outstanding shares, respectively,~~ were excluded because the effect of their inclusion would have been anti-dilutive.

14~~. CONDENSED CONSOLIDATING FINANCIAL INFORMATION~~

In accordance with the applicable indentures governing the 2025 Notes and 2026 Notes, the Company's obligations under the 2025 Notes and 2026 Notes are fully and unconditionally guaranteed on a joint and several basis by each Guarantor, each of which is 100% owned, directly or indirectly, by Qorvo, Inc. (the "Parent Company"). A Guarantor can be released in certain customary circumstances.

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


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


~~(ii)~~	~~Guarantor subsidiaries, on a combined basis, as specified in the 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 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
September 28, 2019
(in thousands) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations and Reclassifications Consolidated
ASSETS
Current assets:
Cash and cash equivalents $ —
$ 80,065
$ 506,729
$ —
$ 586,794
Accounts receivable, less allowance —
43,952
361,156
—
405,108
Intercompany accounts and notes receivable —
473,809
4,624
(478,433 ) —
Inventories —
165,456
341,741
(21,913 ) 485,284
Prepaid expenses —
20,793
6,493
—
27,286
Other receivables —
1,799
12,338
—
14,137
Other current assets —
29,930
3,275
—
33,205
Total current assets —
815,804
1,236,356
(500,346 ) 1,551,814
Property and equipment, net —
1,059,674
233,337
3,092
1,296,103
Goodwill —
1,122,629
1,182,507
—
2,305,136
Intangible assets, net —
154,482
297,306
—
451,788
Long-term investments —
5,537
92,012
—
97,549
Long-term intercompany accounts and notes receivable —
1,341,488
220,231
(1,561,719 ) —
Investment in subsidiaries 6,716,288
2,591,241
—
(9,307,529 ) —
Other non-current assets 6,635
101,258
43,286
(4,998 ) 146,181
Total assets $ 6,722,923
$ 7,192,113
$ 3,305,035
$ (11,371,500 ) $ 5,848,571
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ —
$ 70,435
$ 143,501
$ —
$ 213,936
Intercompany accounts and notes payable —
4,624
473,809
(478,433 ) —
Accrued liabilities 10,854
114,289
45,578
1,624
172,345
Current portion of long-term debt 3,750
—
483
—
4,233
Other current liabilities —
10,167
48,948
—
59,115
Total current liabilities 14,604
199,515
712,319
(476,809 ) 449,629
Long-term debt 1,014,423
—
1,640
—
1,016,063
Long-term intercompany accounts and notes payable 1,428,402
133,317
—
(1,561,719 ) —
Other long-term liabilities —
114,388
28,440
(25,443 ) 117,385
Total liabilities 2,457,429
447,220
742,399
(2,063,971 ) 1,583,077
Total stockholders’ equity 4,265,494
6,744,893
2,562,636
(9,307,529 ) 4,265,494
Total liabilities and stockholders’ equity $ 6,722,923
$ 7,192,113
$ 3,305,035
$ (11,371,500 ) $ 5,848,571

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

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

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

Condensed Consolidating Statement of Income and Comprehensive Income
Three Months Ended September 28, 2019
(in thousands) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations and Reclassifications Consolidated
Revenue $ —
$ 215,097
$ 749,581
$ (157,980 ) $ 806,698
Cost of goods sold —
193,994
423,834
(134,712 ) 483,116
Gross profit —
21,103
325,747
(23,268 ) 323,582
Operating expenses:
Research and development 7,113
(4,054 ) 113,453
(898 ) 115,614
Selling, general and administrative 13,763
44,710
51,819
(22,018 ) 88,274
Other operating expense —
4,497
2,418
12
6,927
Total operating expenses 20,876
45,153
167,690
(22,904 ) 210,815
Income (loss) from operations (20,876 ) (24,050 ) 158,057
(364 ) 112,767
Interest expense (12,496 ) (577 ) (103 ) 483
(12,693 )
Interest income —
648
2,128
(484 ) 2,292
Other (expense) income —
(679 ) 379
—
(300 )
Income (loss) before income taxes (33,372 ) (24,658 ) 160,461
(365 ) 102,066
Income tax (expense) benefit 7,359
(4,183 ) (22,204 ) —
(19,028 )
Income in subsidiaries 109,051
138,256
—
(247,307 ) —
Net income $ 83,038
$ 109,415
$ 138,257
$ (247,672 ) $ 83,038

Comprehensive income $ 82,061
$ 109,510
$ 136,942
$ (246,452 ) $ 82,061

Condensed Consolidating Statement of Income and Comprehensive Income
Three Months Ended September 29, 2018
(in thousands) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations and Reclassifications Consolidated
Revenue $ —
$ 236,631
$ 825,844
$ (178,032 ) $ 884,443
Cost of goods sold —
207,221
476,256
(152,548 ) 530,929
Gross profit —
29,410
349,588
(25,484 ) 353,514
Operating expenses:
Research and development 6,910
7,340
103,671
(1,173 ) 116,748
Selling, general and administrative 13,876
58,924
91,399
(24,692 ) 139,507
Other operating expense (income) 119
(2,192 ) 8,458
397
6,782
Total operating expenses 20,905
64,072
203,528
(25,468 ) 263,037
Income (loss) from operations (20,905 ) (34,662 ) 146,060
(16 ) 90,477
Interest expense (9,400 ) (522 ) (160 ) 393
(9,689 )
Interest income —
477
1,495
(392 ) 1,580
Other (expense) income (48,779 ) 798
(1,551 ) —
(49,532 )
Income (loss) before income taxes (79,084 ) (33,909 ) 145,844
(15 ) 32,836
Income tax (expense) benefit 25,920
(20,470 ) (6,202 ) —
(752 )
Income in subsidiaries 85,248
139,642
—
(224,890 ) —
Net income $ 32,084
$ 85,263
$ 139,642
$ (224,905 ) $ 32,084

Comprehensive income $ 32,012
$ 85,347
$ 139,472
$ (224,819 ) $ 32,012

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

Condensed Consolidating Statement of Income and Comprehensive Income
Six Months Ended September 28, 2019
(in thousands) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations and Reclassifications Consolidated
Revenue $ —
$ 472,039
$ 1,474,695
$ (364,438 ) $ 1,582,296
Cost of goods sold —
437,864
843,949
(317,388 ) 964,425
Gross profit —
34,175
630,746
(47,050 ) 617,871
Operating expenses:
Research and development 14,002
11,529
210,721
(1,718 ) 234,534
Selling, general and administrative 31,827
94,992
95,643
(45,209 ) 177,253
Other operating expense —
19,321
18,960
(190 ) 38,091
Total operating expenses 45,829
125,842
325,324
(47,117 ) 449,878
Income (loss) from operations (45,829 ) (91,667 ) 305,422
67
167,993
Interest expense (24,085 ) (1,069 ) (278 ) 875
(24,557 )
Interest income —
1,406
4,707
(875 ) 5,238
Other expense —
(107 ) (1,304 ) —
(1,411 )
Income (loss) before income taxes (69,914 ) (91,437 ) 308,547
67
147,263
Income tax (expense) benefit 15,165
(1,443 ) (38,406 ) —
(24,684 )
Income in subsidiaries 177,328
270,140
—
(447,468 ) —
Net income $ 122,579
$ 177,260
$ 270,141
$ (447,401 ) $ 122,579

Comprehensive income $ 121,545
$ 177,355
$ 268,833
$ (446,188 ) $ 121,545

Condensed Consolidating Statement of Income and Comprehensive (Loss) Income
Six Months Ended September 29, 2018
(in thousands) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations and Reclassifications Consolidated
Revenue $ —
$ 468,570
$ 1,451,805
$ (343,262 ) $ 1,577,113
Cost of goods sold —
397,532
885,953
(296,619 ) 986,866
Gross profit —
71,038
565,852
(46,643 ) 590,247
Operating expenses:
Research and development 13,311
10,619
206,119
(2,398 ) 227,651
Selling, general and administrative 26,671
116,880
177,778
(45,892 ) 275,437
Other operating expense 269
5,748
9,512
368
15,897
Total operating expenses 40,251
133,247
393,409
(47,922 ) 518,985
Income (loss) from operations (40,251 ) (62,209 ) 172,443
1,279
71,262
Interest expense (23,442 ) (1,059 ) (321 ) 780
(24,042 )
Interest income —
2,883
2,870
(779 ) 4,974
Other (expense) income (82,152 ) 1,126
(461 ) —
(81,487 )
(Loss) income before income taxes (145,845 ) (59,259 ) 174,531
1,280
(29,293 )
Income tax benefit (expense) 37,374
(3,666 ) (2,324 ) —
31,384
Income in subsidiaries 110,562
172,207
—
(282,769 ) —
Net income $ 2,091
$ 109,282
$ 172,207
$ (281,489 ) $ 2,091

Comprehensive (loss) income $ (165 ) $ 109,371
$ 169,727
$ (279,098 ) $ (165 )

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

Condensed Consolidating Statement of Cash Flows
Six Months Ended September 28, 2019
(in thousands) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations and Reclassifications Consolidated
Net cash provided by (used in) operating activities $ 166,127
$ (144,146 ) $ 408,549
$ —
$ 430,530
Investing activities:
Purchase of property and equipment —
(75,365 ) (12,973 ) —
(88,338 )
Purchase of a business, net of cash acquired —
—
(299,673 ) —
(299,673 )
Proceeds from sale of available-for-sale debt securities —
1,950
—
—
1,950
Other investing activities —
(1,748 ) 506
—
(1,242 )
Net transactions with related parties —
28,086
—
(28,086 ) —
Net cash used in investing activities —
(47,077 ) (312,140 ) (28,086 ) (387,303 )
Financing activities:
Proceeds from borrowings 100,000
—
—
—
100,000
Repurchase of common stock, including transaction costs (265,105 ) —
—
—
(265,105 )
Proceeds from the issuance of common stock 20,205
—
—
—
20,205
Tax withholding paid on behalf of employees for restricted stock units (20,545 ) —
—
—
(20,545 )
Other financing activities (682 ) —
(150 ) —
(832 )
Net transactions with related parties —
39,423
(67,509 ) 28,086
—
Net cash (used in) provided by financing activities (166,127 ) 39,423
(67,659 ) 28,086
(166,277 )
Effect of exchange rate changes on cash —
—
(1,091 ) —
(1,091 )
Net (decrease) increase in cash, cash equivalents and restricted cash —
(151,800 ) 27,659
—
(124,141 )
Cash, cash equivalents and restricted cash at the beginning of the period —
231,865
479,517
—
711,382
Cash, cash equivalents and restricted cash at the end of the period $ —
$ 80,065
$ 507,176
$ —
$ 587,241

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

Condensed Consolidating Statement of Cash Flows
Six Months Ended September 29, 2018
(in thousands) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations and Reclassifications Consolidated
Net cash provided by (used in) operating activities $ 522,959
$ (548,315 ) $ 315,152
$ —
$ 289,796
Investing activities:
Purchase of property and equipment —
(95,897 ) (17,769 ) —
(113,666 )
Purchase of available-for-sale debt securities —
(132,729 ) —
—
(132,729 )
Proceeds from maturities and sales of available-for-sale debt securities —
133,132
—
—
133,132
Other investing activities —
(1,086 ) (18,406 ) —
(19,492 )
Net transactions with related parties —
110,047
—
(110,047 ) —
Net cash (used in) provided by investing activities —
13,467
(36,175 ) (110,047 ) (132,755 )
Financing activities:
Repurchase of debt (954,745 ) —
—
—
(954,745 )
Proceeds from debt issuances 631,300
—
—
—
631,300
Repurchase of common stock, including transaction costs (186,682 ) —
—
—
(186,682 )
Proceeds from the issuance of common stock 18,406
—
—
—
18,406
Tax withholding paid on behalf of employees for restricted stock units (24,181 ) —
—
—
(24,181 )
Other financing activities (7,057 ) —
—
—
(7,057 )
Net transactions with related parties —
686
(110,733 ) 110,047
—
Net cash (used in) provided by financing activities (522,959 ) 686
(110,733 ) 110,047
(522,959 )
Effect of exchange rate changes on cash —
—
(2,216 ) —
(2,216 )
Net (decrease) increase in cash, cash equivalents and restricted cash —
(534,162 ) 166,028
—
(368,134 )
Cash, cash equivalents and restricted cash at the beginning of the period —
629,314
297,088
—
926,402
Cash, cash equivalents and restricted cash at the end of the period $ —
$ 95,152
$ 463,116
$ —
$ 558,268

15~~. SUBSEQUENT EVENTS~~

~~Senior Notes due 2029~~

On September 30, 2019, the Company issued $350.0 million aggregate principal amount of its 4.375% senior notes due 2029 (the “2029 Notes”). The 2029 Notes pay interest semi-annually on April 15 and October 15 at a rate of 4.375% per annum. The 2029 Notes will mature on October 15, 2029, unless earlier redeemed in accordance with their terms.

The 2029 Notes were sold in a private offering to certain institutions that then resold the 2029 Notes in the United States to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act, and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The Company intends to use the net proceeds of the offering for general corporate purposes. The 2029 Notes are senior unsecured obligations of the Company and are initially guaranteed, jointly and severally, by each of the Guarantors.

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

The 2029 Notes were issued pursuant to an indenture, dated as of September 30, 2019 (the “2019 Indenture”), by and among the Company, the Guarantors and MUFG Union Bank, N.A., as trustee. 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.

At any time prior to October 15, 2024, the Company may redeem all or part of the 2029 Notes, at a redemption price equal to their principal amount, plus a “make-whole” premium as of the redemption date, and accrued and unpaid interest. In addition, at any time prior to October 15, 2024, the Company may redeem up to 35% of the original aggregate principal amount of the 2029 Notes with the proceeds of one or more equity offerings, at a redemption price equal to 104.375%, plus accrued and unpaid interest. Furthermore, at any time on or after October 15, 2024, the Company may redeem the 2029 Notes, in whole or in part, at the redemption prices specified in the 2019 Indenture, plus accrued and unpaid interest.

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 2029 Notes, the Company entered into a Registration Rights Agreement, dated as of September 30, 2019 (the “Registration Rights Agreement”), by and among the Company and the Guarantors, on the one hand, and BofA Securities, Inc., as representative of the initial purchasers of the 2029 Notes, on the other hand.

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

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

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

~~Cavendish Kinetics Limited Acquisition~~

On October 4, 2019, the Company completed the acquisition of the entire issued and outstanding capital of Cavendish for a cash purchase price of approximately $203.0 million, subject to customary purchase price adjustments. Cavendish is a private supplier of high-performance RF microelectromechanical system ("MEMS") technology for antenna tuning applications and will become part of the Company's MP operating segment. As a result of the acquisition, RF MEMS technology will be advanced for applications across the Company's products and the technology will be transitioned into high-volume manufacturing for mobile devices and other markets.

~~Share Repurchase Program~~

On October 31, 2019, the Company announced that its Board of Directors authorized a new share repurchase program to repurchase up to $1.0 billion of the Company's outstanding common stock, which includes approximately $117.0 million authorized under the prior program terminated concurrent with the new authorization. Under this new program, share

~~QORVO, INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

repurchases will be 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 will depend 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.

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

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, representations and contentions, and are not historical facts and typically are identified by use of terms such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" and similar words, although some forward-looking statements are expressed differently. You should be aware that the forward-looking statements included herein represent management's current judgment and expectations, but our actual results, events and performance could differ materially from those expressed or implied by forward-looking statements. We do not intend to update any of these forward-looking statements or publicly announce the results of any revisions to these forward-looking statements, other than as is required under U.S. federal securities laws. Our business is subject to numerous risks and uncertainties, including those relating to fluctuations in our operating results; our substantial dependence on developing new products and achieving design wins; our dependence on a few large customers for a substantial portion of our revenue; a loss of revenue if contracts with the United States government or defense and aerospace contractors are canceled or delayed or if defense spending is reduced; the COVID-19 outbreak, which has and will likely continue to negatively impact the global economy and disrupt normal business activities, and which may have an adverse effect on our results of operations; our dependence on third parties; risks related to sales through distributors; risks associated with the operation of our manufacturing facilities; business disruptions; poor manufacturing yields; increased inventory risks and costs due to timing of customer forecasts; our inability to effectively manage or maintain evolving relationships with platform providers; risks from international sales and operations; economic regulation in China; changes in government trade policies, including imposition of tariffs and export restrictions; our ability to implement innovative technologies; underutilization of manufacturing facilities as a result of industry overcapacity; we may not be able to borrow funds under our credit facility or secure future financing; we may not be able to generate sufficient cash to service all of our debt; restrictions imposed by the agreements governing our debt; volatility in the price of our common stock; damage to our reputation or brand; fluctuations in the amount and frequency of our stock repurchases; our recent and future acquisitions and other strategic investments ~~including our recent acquisitions of Active-Semi International, Inc. ("Active-Semi") and Cavendish Kinetics Limited ("Cavendish"),~~ could fail to achieve financial or strategic objectives; our ability to attract, retain and motivate key employees; our reliance on our intellectual property portfolio; claims of infringement of third-party intellectual property rights; security breaches and other similar disruptions compromising our information; theft, loss or misuse of personal data by or about our employees, customers or third parties; warranty claims, product recalls and product liability; and risks associated with environmental, health and safety regulations and climate change. Many of the foregoing risks and uncertainties are, and will continue to be exacerbated by the COVID-19 outbreak and any worsening of the global business and economic environment as a result. These and other risks and uncertainties, which are described in more detail in our most recent Annual Report on Form 10-K and in other reports and statements that we file with the SEC, could cause actual results and developments to be materially different from those expressed or implied by any of these forward-looking statements.

OVERVIEW

~~Company~~

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

~~Qorvo~~^®Qorvo® is a ~~product~~leader in the development and ~~technology leader at the forefront~~commercialization of ~~the growing global demand~~technologies and products for ~~always-on~~wireless and wired connectivity. We combine a broad portfolio of innovative radio frequency ("RF") solutions, highly differentiated semiconductor technologies, systems-level expertise and global manufacturing scale to supply a diverse ~~group~~set of customers in expanding markets, including smartphones and other mobile devices, defense and aerospace, Wi-Fi customer premises equipment, cellular base stations, and multiple Internet of Things ("IoT") applications including the smart home and connected car. Within these markets, our products enable a broad range of ~~leading-edge applications –~~products that enable a more connected world.

Our financial results for the quarter ended June 27, 2020 were not materially impacted by the COVID-19 outbreak; however, we are not able to estimate the long-term impact of the COVID-19 outbreak on our business (including our supply chain), financial condition, results of operations, and/or cash flow. We believe we have sufficient liquidity available from ~~very-high-power wired~~operating cash flow, cash on hand (including from our recently issued senior notes), and ~~wireless infrastructure solutions~~availability under our revolving credit facility. However, as the situation evolves, we will continue to ~~ultra-low-power smart home solutions. Our products~~assess our liquidity needs, evaluate available alternatives and ~~technologies help transform how people around the world access their data, transact commerce and interact with their communities.~~take appropriate actions.

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

•

~~Mobile Products (MP)~~ ~~- MP is a global supplier of cellular RF and Wi-Fi solutions for a variety of mobile devices, including smartphones, wearables, laptops, tablets and cellular-based applications for the IoT.~~

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


•	~~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 and other wireless communications, defense, automotive and multiple analog power management applications.

AsIDP is a global supplier of ~~September 28, 2019, our reportable segments are MP~~RF, system-on-a-chip and ~~IDP.~~ power management solutions for wireless infrastructure, defense, smart home, automotive and other IoT and biosensor applications.

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

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

Quarterly revenue ~~decreased 8.8%~~increased 1.5% as compared to the ~~second~~first quarter of fiscal ~~2019,~~2020, primarily due to higher demand for our base station products as a result of strength in 5G sub-6 GHz massive Multiple-Input/Multiple-Output ("MIMO") base station deployments (primarily in Asia) and higher demand for our mobile products in support of customers based in China, partially offset by lower shipments of our mobile ~~products and base station~~ products to Huawei Technologies Co., Ltd. and ~~its~~ affiliates ("Huawei") as well as lower demand ~~for our mobile products in support of our customers based in China. These decreases were partially offset by increased revenue resulting~~ from ~~higher demand for marquee smartphones experienced by~~ our largest end ~~customer as well as higher demand from a Korea-based~~ customer.

Gross margin for the ~~second~~first quarter of fiscal 2021 was 41.4% as compared to 37.9% for the first quarter of fiscal 2020, ~~was 40.1% as compared~~primarily due to ~~40.0% for the second quarter of fiscal 2019, with gross margin improvements related to lower intangible amortization expense and~~ favorable changes in product mix ~~being~~and lower restructuring charges, partially offset by ~~lower factory utilization~~higher intangible amortization expense and ~~increased restructuring charges.~~higher manufacturing costs.

Operating income was ~~$112.8~~$92.7 million for the ~~second~~first quarter of fiscal ~~2020~~2021 as compared to ~~operating income of $90.5~~$55.2 million for the ~~second~~first quarter of fiscal ~~2019.~~2020. This increase was primarily due to higher gross margin, lower operating expenses, ~~partially offset by lower~~and higher revenue.

•

~~Capital expenditures decreased to~~ ~~$38.0 million~~ for the second quarter of fiscal 2020 as compared to $70.1 million for the second quarter of fiscal 2019. Our capital expenditures in the second quarter of fiscal 2020 were primarily strategic investments in premium filter capacity and gallium nitride ("GaN") technology capabilities.

Net income per diluted share was $0.83 for the first quarter of fiscal 2021 as compared to $0.33 for the first quarter of fiscal 2020.

Capital expenditures were $29.8 million for the first quarter of fiscal 2021 as compared to $50.3 million for the first quarter of fiscal 2020.

During the ~~second~~first quarter of fiscal ~~2020,~~2021, we issued an additional $300.0 million aggregate principal amount of our 4.375% senior notes due 2029.

During the first quarter of fiscal 2021, we repurchased approximately ~~2.3~~0.7 million shares of our common stock for approximately ~~$165.0~~$75.0 million.

RESULTS OF OPERATIONS

Consolidated

The following table presents a summary of our results of operations for the three ~~and six~~ months ended ~~September 28,~~June 27, 2020 and June 29, 2019 ~~and~~ ~~September 29, 2018~~ (in thousands, except percentages):


	Three Months Ended													Three Months Ended
	September 28, 2019		% of Revenue		September 29, 2018		% of Revenue		Increase (Decrease)			Percentage Change		June 27, 2020		% of Revenue		June 29, 2019		% of Revenue		Increase (Decrease)			Percentage Change
Revenue	$	806,698	100.0	%	$	884,443	100.0	%	$	(77,745	)	(8.8	)%	$	787,451	100.0	%	$	775,598	100.0	%	$	11,853		1.5	%
Cost of goods sold	483,116		59.9		530,929		60.0		(47,813		)	(9.0	)	461,662		58.6		481,309		62.1		(19,647		)	(4.1	)
Gross profit	323,582		40.1		353,514		40.0		(29,932		)	(8.5	)	325,789		41.4		294,289		37.9		31,500			10.7
Research and development	115,614		14.3		116,748		13.2		(1,134		)	(1.0	)	130,071		16.5		118,920		15.3		11,151			9.4
Selling, general and administrative	88,274		10.9		139,507		15.8		(51,233		)	(36.7	)	86,604		11.0		88,979		11.5		(2,375		)	(2.7	)
Other operating expense	6,927		0.9		6,782		0.8		145			2.1		16,402		2.1		31,164		4.0		(14,762		)	(47.4	)
Operating income	$	112,767	14.0	%	$	90,477	10.2	%	$	22,290		24.6	%	$	92,712	11.8	%	$	55,226	7.1	%	$	37,486		67.9	%

	Six Months Ended
	September 28, 2019		% of Revenue		September 29, 2018		% of Revenue		Increase (Decrease)			Percentage Change
Revenue	$	1,582,296	100.0	%	$	1,577,113	100.0	%	$	5,183		0.3	%
Cost of goods sold	964,425		61.0		986,866		62.6		(22,441		)	(2.3	)
Gross profit	617,871		39.0		590,247		37.4		27,624			4.7
Research and development	234,534		14.8		227,651		14.4		6,883			3.0
Selling, general and administrative	177,253		11.2		275,437		17.5		(98,184		)	(35.6	)
Other operating expense	38,091		2.4		15,897		1.0		22,194			139.6
Operating income	$	167,993	10.6	%	$	71,262	4.5	%	$	96,731		135.7	%

Revenue ~~decreased for the three months ended~~ ~~September 28, 2019, as compared to the three months ended September 29, 2018,~~increased primarily due to ~~lower shipments of~~higher demand for our ~~mobile products and~~ base station products ~~to Huawei~~ as ~~well as lower demand for our mobile products~~a result of strength in ~~support of our customers based~~5G sub-6 GHz massive MIMO base station deployments (primarily in ~~China. These decreases were partially offset by increased revenue resulting from~~Asia) and higher ~~demand for marquee smartphones experienced by our largest end customer as well as higher demand from a Korea-based customer.~~

Revenue was flat for the six months ended September 28, 2019, as compared to the six months ended September 29, 2018, with increased revenue resulting from higher demand for marquee smartphones experienced by our largest end customer as well as higher demand from a Korea-based customer, being offset by lower demand for our mobile products in support of customers based in ~~China.~~

~~During the six months ended September 28, 2019, we temporarily suspended~~China, partially offset by lower shipments of our mobile products to Huawei ~~after~~as well as lower demand from our largest end customer.

On May 16, 2019, 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. Eventually,~~List, which caused us to temporarily suspend the shipment of all products to Huawei. Subsequently, we restarted shipments from outside the U.S. of certain ~~foreign-made~~ 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.

~~Consistent with our prior disclosure, we recognized significantly lower~~ Our sales to Huawei ~~in the three months ended September 28, 2019 (approximately 5.0% of our total revenue) as compared~~are expected to ~~the three months ended June 29, 2019 (approximately 22.0% of our total revenue).~~continue to be impacted by trade restrictions.

Gross margin was flat for the three months ended September 28, 2019 as compared to the three months ended September 29, 2018, with gross margin improvements related to lower intangible amortization expense and favorable changes in product mix being offset by lower factory utilization and increased restructuring charges.

Gross margin ~~for the six months ended September 28, 2019 was 39.0%, as compared to 37.4% the six months ended September 29, 2018. This increase was~~increased primarily due to ~~lower intangible amortization expense,~~ favorable changes in product mix and lower ~~manufacturing costs,~~restructuring charges, partially offset by ~~increased restructuring charges, average selling price erosion~~higher intangible amortization expense and ~~lower factory utilization.~~

~~Operating Expenses~~higher manufacturing costs.

Research and development expense was relatively flat for the three months ended September 28, 2019 as compared to the three months ended September 29, 2018, with lower product development spend being partially offset by the addition of Active-Semi expenses. Research and development expense increased ~~$6.9 million, or 3.0%, for the six months ended September 28, 2019 as compared to the six months ended September 29, 2018,~~ primarily due to higher personnel costs and ~~the addition of Active-Semi expenses, partially offset by lower~~increased product development ~~spend.~~spend as a result of our recent acquisitions.

Selling, general and administrative expense decreased ~~$51.2 million, or 36.7%, for the three months ended September 28, 2019 as compared to the three months ended September 29, 2018,~~ primarily due to lower intangible amortization. Selling, general and administrative expense decreased $98.2 million, or 35.6%, for the six months ended September 28, 2019 as compared to the six months ended September 29, 2018, primarily due to lower intangible amortization,personnel costs, partially offset by higher ~~personnel costs and the addition of Active-Semi expenses.~~intangible amortization expense.

Other operating expense ~~was flat for~~decreased primarily due to lower acquisition related costs and lower restructuring related charges. In the three months ended ~~September 28,~~June 29, 2019, as compared to the three months ended September 29, 2018. Other operating expense increased $22.2 million for the six months ended September 28, 2019 as compared to the six months ended September 29, 2018, primarily due to expenseswe incurred acquisition related ~~to the acquisition of~~costs associated with Active-Semi International, Inc. ("Active-Semi") as well as restructuring ~~expenses. These costs were partially offset by lower start-up costs as compared to the six months ended September 29, 2018.~~charges resulting from our fiscal 2019 restructuring actions.

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)	September 28, 2019			September 29, 2018			Decrease			Percentage Change		June 27, 2020			June 29, 2019			Decrease			Percentage Change
Revenue	$	623,106		$	666,539		$	(43,433	)	(6.5	)%	$	468,404		$	556,253		$	(87,849	)	(15.8	)%
Operating income	193,431			196,948			(3,517		)	(1.8	)	109,983			139,935			(29,952		)	(21.4	)
Operating income as a % of revenue	31.0		%	29.5		%						23.5		%	25.2		%

	Six Months Ended
(In thousands, except percentages)	September 28, 2019			September 29, 2018			Increase			Percentage Change
Revenue	$	1,179,359		$	1,152,618		$	26,741		2.3	%
Operating income	333,366			286,119			47,247			16.5
Operating income as a % of revenue	28.3		%	24.8		%

MP revenue decreased ~~$43.4 million, or 6.5%, for the three months ended September 28, 2019 as compared to the three months ended September 29, 2018,~~ primarily due to lower shipments to Huawei as well as lower demand ~~for~~from our ~~mobile products in support of customers based in China.~~largest end customer. These decreases were partially offset by increased revenue resulting from higher ~~demand for marquee smartphones experienced by our largest end customer as well as higher demand from a Korea-based customer.~~

MP revenue increased $26.7 million, or 2.3%, for the six months ended September 28, 2019 as compared to the six months ended September 29, 2018, primarily due to increased revenue resulting from higher demand for marquee smartphones experienced by our largest end customer as well as higher demand from a Korea-based customer as well as higher demand from Huawei (which resulted from content expansion). These increases were partially offset by lower demand for our mobile products in support of customers based in China.

MP operating income ~~as a percentage of~~decreased primarily due to lower revenue ~~was relatively flat for~~and higher operating expenses, partially offset by higher gross margin. Operating expenses increased in the three months ended ~~September 28, 2019~~June 27, 2020 primarily as ~~compared to the three months ended September 29, 2018.~~

MP operating income increased $47.2 million, or 16.5%, for the six months ended September 28, 2019 as compared to the six months ended September 29, 2018, primarily due to higher gross margin, lower operating expenses and higher revenue.a result of our recent acquisitions. Gross margin was positively impacted by ~~favorable~~changes in product mix, partially offset by lower factory utilization and average selling price erosion.

Infrastructure and Defense Products



	Three Months Ended
(In thousands, except percentages)	June 27, 2020			June 29, 2019			Increase		Percentage Change
Revenue	$	319,047		$	219,345		$	99,702	45.5	%
Operating income	93,755			50,124			43,631		87.0
Operating income as a % of revenue	29.4		%	22.9		%

IDP revenue increased primarily due to higher demand for our base station products as a result of strength in 5G sub-6 GHz massive MIMO base station deployments (primarily in Asia), as well as increased revenue resulting from our recent acquisitions.

IDP operating income increased primarily due to higher revenue, partially offset by lower gross margin. Gross margin was negatively impacted by changes in product mix and lower manufacturing costs, partially offset by average selling price erosion and lower factory utilization. Operating expenses decreased primarily due to lower personnel related costs and lower product development spend.

~~Infrastructure and Defense Products~~

Three Months Ended
(In thousands, except percentages)
September 28,
2019
September 29,
2018
Decrease
Percentage
Change
Revenue
$ 183,592

$ 217,904

$ (34,312 )
(15.7 )%
Operating income
14,969

56,311

(41,342 )
(73.4 )
Operating income as a % of revenue
8.2 %
25.8 %

Six Months Ended
(In thousands, except percentages) September 28,
2019 September 29,
2018 Decrease Percentage
Change
Revenue $ 402,937
$ 424,495
$ (21,558 ) (5.1 )%
Operating income 65,093
111,515
(46,422 ) (41.6 )
Operating income as a % of revenue 16.2 % 26.3 %

IDP revenue decreased $34.3 million, or 15.7%, for the three months ended September 28, 2019 as compared to the three months ended September 29, 2018, primarily due to lower demand for our base station products from Huawei as well as lower demand for our Wi-Fi products. These decreases were partially offset by sales of our programmable power management products as a result of the acquisition of Active-Semi.

IDP revenue decreased $21.6 million, or 5.1%, for the six months ended September 28, 2019 as compared to the six months ended September 29, 2018, primarily due to lower demand for our Wi-Fi products, partially offset by sales of our programmable power management products as a result of the acquisition of Active-Semi.

IDP operating income decreased $41.3 million, or 73.4%, for the three months ended September 28, 2019 as compared to the three months ended September 29, 2018, primarily due to lower revenue, lower gross margin and higher operating expenses. Gross margin was negatively impacted by inventory charges and lower factory utilization. The increase in operating expenses was primarily due to higher personnel costs and the addition of Active-Semi expenses.

IDP operating income decreased $46.4 million, or 41.6%, for the six months ended September 28, 2019 as compared to the six months ended September 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 inventory charges and lower factory utilization.

See Note 1112 of the Notes to Condensed Consolidated Financial Statements for a reconciliation of segment operating income to the consolidated operating income for the three ~~and six~~ months ended ~~September 28, 2019~~June 27, 2020 and ~~September~~June 29, ~~2018.~~2019.

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


	Three Months Ended						Six Months Ended						Three Months Ended
(In thousands)	September 28, 2019			September 29, 2018			September 28, 2019			September 29, 2018			June 27, 2020			June 29, 2019
Interest expense	$	(12,693	)	$	(9,689	)	$	(24,557	)	$	(24,042	)	$	(18,849	)	$	(11,864	)
Interest income	2,292			1,580			5,238			4,974			1,190			2,946
Other expense	(300		)	(49,532		)	(1,411		)	(81,487		)
Income tax (expense) benefit	(19,028		)	(752		)	(24,684		)	31,384
Other income (expense)													21,947			(1,111		)
Income tax expense													(78		)	(5,656		)

Interest ~~Expense~~expense

During the three ~~and six~~ months ended ~~September 28, 2019,~~June 27, 2020, we recorded interest expense of ~~$14.0~~$19.9 million ~~and $27.6 million, respectively,~~ primarily related to ~~the~~our 5.50% senior notes due July 15, 2026 (the "2026 Notes") and our 4.375% senior notes due October 15, 2029 (the "2029 Notes"), which was partially offset by ~~$1.3~~$1.1 million ~~and $3.0 million, respectively,~~ of capitalized interest.

During the three ~~and six~~ months ended ~~September~~June 29, ~~2018,~~2019, we recorded interest expense of ~~$11.5~~$13.6 million ~~and $29.3 million, respectively,~~ primarily related to ~~the 6.75% senior notes due December 1, 2023 (the "2023 Notes"), the 7.00% senior notes due December 1, 2025 (the "2025 Notes") and~~ the 2026 Notes, which was partially offset by ~~$1.8 million and $5.3~~$1.7 million of capitalized interest.

Other ~~Expense~~income (expense)

During the three ~~and six~~ months ended ~~September 29, 2018,~~June 27, 2020, we recorded ~~a loss~~income of $15.7 million based on ~~debt extinguishment~~our share of ~~$48.8 million and $82.2 million, respectively,~~investments in ~~connection with certain purchases of the 2023 Notes and the 2025 Notes.~~limited partnerships' earnings.

Income ~~Taxes~~tax expense

Our provision for income taxes for the three ~~and six~~ months ended ~~September 28,~~June 27, 2020 and June 29, 2019 ~~and September 29, 2018 was~~has been calculated by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pre-tax income or loss excluding unusual or ~~infrequently occurring~~ discrete items) for those respective periods.

For the three ~~and six~~ months ended ~~September 28, 2019,~~June 27, 2020, we recorded an income tax expense of ~~$19.0~~$0.1 million, ~~and $24.7 million, respectively,~~ which was comprised primarily of tax expense related to international operations generating pre-tax book income, ~~and the reversal of the permanent reinvestment assertion with regards to unrepatriated foreign earnings,~~partially offset by a tax benefit related to domestic and international operations generating pre-tax book losses and domestic tax ~~credits.~~credits, and the recognition of a discrete tax benefit resulting from a retroactive incentive allowing previously non-deductible payments to be amortized. For the three ~~and six~~ months ended ~~September~~June 29, ~~2018,~~2019, we recorded an income tax expense of ~~$0.8~~$5.7 million, ~~and income tax benefit of $31.4 million, respectively,~~ which was comprised primarily of tax expense related to international operations generating pre-tax book income, partially offset by a tax benefit related to domestic and international operations generating pre-tax book losses aand domestic tax incentive granted in Singapore and adjustments in the provisional estimates required by the Tax Cuts and Jobs Act, offset by a tax expense related to international operations generating pre-tax book income.credits.

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.

During the second quarter of fiscal 2020, we determined that we could no longer support a permanent reinvestment position on certain earnings previously subject to U.S. federal taxation at our foreign subsidiaries. This change was primarily a result of future cash flow projections outside the U.S. and implementation of a more centralized approach to cash management.

LIQUIDITY AND CAPITAL RESOURCES

Cash generated by operations is our primary source of liquidity. As of ~~September 28, 2019,~~June 27, 2020, we had working capital of approximately ~~$1,102.2~~$1,570.0 million, including ~~$586.8~~$1,136.3 million in cash and cash equivalents, compared to working capital of approximately ~~$1,249.2~~$1,151.5 million, ~~at March 30, 2019,~~ including ~~$711.0~~$714.9 million in cash and cash ~~equivalents.~~equivalents as of March 28, 2020. The ~~decrease~~increase in working capital was primarily due to the ~~acquisition~~issuance of ~~Active-Semi. This decrease in working capital was partially offset by~~an additional $300.0 million aggregate principal amount of the ~~$100.0 million draw on the Term Loan in the first quarter of fiscal 2020.~~2029 Notes for general corporate purposes.

Our ~~$586.8~~$1,136.3 million of total cash and cash equivalents as of ~~September 28, 2019~~June 27, 2020 includes approximately ~~$503.5~~$542.2 million held by our foreign subsidiaries, of which ~~$424.0~~$431.9 million is held by Qorvo International Pte. Ltd. in Singapore. If the undistributed earnings of our foreign subsidiaries are needed in the U.S., we may be required to pay state income and/or foreign local withholding taxes to repatriate these earnings.

Stock Repurchases

During the ~~six~~three months ended ~~September 28, 2019,~~June 27, 2020, we repurchased approximately ~~3.8~~0.7 million shares of our common stock for approximately ~~$265.1~~$75.0 million under our share repurchase program. As of ~~September 28, 2019, $132.8~~June 27, 2020, approximately $690.9 million remained available for repurchases under the program.

~~On October 31, 2019, we announced that our Board of Directors authorized a new share repurchase program. See Note~~ 15 ~~of the Notes to Condensed Consolidated Financial Statements for information regarding the new share repurchase program.~~

Cash Flows from Operating Activities

Operating activities for the ~~six~~three months ended ~~September 28, 2019~~June 27, 2020 generated cash of ~~$430.5~~$214.3 million, compared to ~~$289.8~~$257.1 million for the ~~six~~three months ended ~~September~~June 29, ~~2018,~~2019, primarily due to ~~favorable~~ changes in working capital driven by ~~improvements in days sales outstanding as well as the timing of sales during the six months ended September 28, 2019.~~accounts payable and accounts receivable. These changes were partially offset by increased profitability.

Cash Flows from Investing Activities

Net cash used in investing activities was ~~$387.3~~$23.3 million for the ~~six~~three months ended ~~September 28, 2019,~~June 27, 2020, compared to ~~$132.8~~$342.1 million for the ~~six~~three months ended ~~September~~June 29, ~~2018,~~2019, primarily due to the acquisition of ~~Active-Semi.~~Active-Semi during the three months ended June 29, 2019.

Cash Flows from Financing Activities

Net cash ~~used in~~provided by financing activities was ~~$166.3~~$229.8 million for the ~~six~~three months ended ~~September 28, 2019,~~June 27, 2020, compared to ~~$523.0~~$3.9 million for the ~~six~~three months ended ~~September~~June 29, ~~2018. During~~2019. This increase was primarily due to the ~~six months ended September 29, 2018, cash disbursed in connection with the retirement of all of the 2023 Notes and a majority of the 2025 Notes was partially offset by cash~~ proceeds received from the issuance of an additional $300.0 million aggregate principal amount of 2029 Notes during the ~~2026 Notes. During the six~~three months ended ~~September 28, 2019, we drew $100.0 million on our Term Loan.~~June 27, 2020.

COMMITMENTS AND CONTINGENCIES

~~2023 Notes and 2025 Notes~~On November 19, 2015, we issued $450.0 million aggregate principal amount of the 2023 Notes and $550.0 million aggregate principal amount of 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"). 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. We paid no interest on the 2025 Notes during the three months ended September 28, 2019 and we paid interest of $0.8 million on the 2025 Notes during the six months ended September 28, 2019. Interest paid on the 2023 Notes and the 2025 Notes during the three and six months ended September 29, 2018 was $7.3 million and $41.5 million, respectively.

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

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

~~2026 Notes~~ On July 16, 2018, we issued $500.0 million aggregate principal amount of the 2026 Notes (the "Initial 2026 Notes"). On August 28, 2018 and March 5, 2019, we completed offerings of an additional $130.0 million and $270.0 million, respectively, aggregate principal amount of such notes (together, the "Additional 2026 Notes", and together with the Initial 2026 Notes, the "2026 Notes"). The 2026 Notes are senior unsecured obligations of the Company and are guaranteed, jointly and severally, by each of the Guarantors. Interest on the 2026 Notes is payable on January 15 and July 15 of each year at a rate of 5.50% per annum. Interest paid on the 2026 Notes during the three and six months ended September 28, 2019 was $24.8 million.

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

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

~~2029 Notes~~ On September 30, 2019, we issued $350.0 million aggregate principal amount of the 4.375% senior notes due October 15, 2029 (the "2029 Notes"). The 2029 Notes were sold in a private offering to certain institutions that then resold the 2029 Notes in the United States to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. We intend to use the net proceeds of the offering for general corporate purposes. The 2029 Notes are senior unsecured obligations of the Company and are guaranteed, jointly and severally, by each of the Guarantors.

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

~~See Note~~ 15 ~~of the Notes to Condensed Consolidated Financial Statements for additional information regarding the 2029 Notes.~~

Credit Agreement On December 5, 2017, we and ~~the Guarantors~~certain of our U.S. subsidiaries (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.~~

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, 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, with~~Loan. The delayed draw availability period for the remaining $200.0 million ~~available, at our discretion, in a final draw. Subsequent amendments to~~of the ~~Credit Agreement have, among other things, extended the delayed draw availability period to~~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. ~~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). During the three ~~and six~~ months ended ~~September 28, 2019,~~June 27, 2020, there were no borrowings under the Revolving Facility. ~~Interest~~Principal paid on the Term Loan during the three ~~and six~~ months ended ~~September 28, 2019~~June 27, 2020 was ~~$0.9~~$1.3 million.

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 ~~September 28, 2019,~~June 27, 2020, we were in compliance with ~~all the financial covenants under the Credit Agreement.~~these covenants.

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

2025 NotesOn November 19, 2015, we issued $550.0 million aggregate principal amount of our 7.00% senior notes due December 1, 2025 (the "2025 Notes"). Interest on the 2025 Notes is payable on June 1 and December 1 of each year. The 2025 Notes are senior unsecured obligations of the Company and guaranteed, jointly and severally, by the Guarantors.

In fiscal years 2018 and 2019, we retired $526.6 million of the 2025 Notes. As of June 27, 2020, an aggregate principal amount of $23.4 million of the 2025 Notes remained outstanding.

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

2026 Notes On July 16, 2018, we issued $500.0 million aggregate principal amount of the 2026 Notes. On August 28, 2018 and March 5, 2019, we issued an additional $130.0 million and $270.0 million, respectively, aggregate principal amount of the 2026 Notes. 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 2026 Notes are senior unsecured obligations of the Company and are guaranteed, jointly and severally, by the Guarantors.

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

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

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

Capital Commitments At ~~September 28, 2019,~~June 27, 2020, we had capital commitments of approximately ~~$52.2~~$69.0 million primarily for projects related to ~~GaN technology capabilities,~~ premium filter capacity, ~~and~~ manufacturing cost savings initiatives, as well as for equipment ~~replacements~~upgrades and general corporate purposes.

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

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

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

SUPPLEMENTAL PARENT AND GUARANTOR FINANCIAL INFORMATION

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

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



Summarized Balance Sheet
(in thousands)	June 27, 2020
Current assets (1)	$	1,344,363
Non-current assets	$	2,484,738

Current liabilities	$	217,883
Long-term liabilities (2)	$	2,497,116

(1) Includes current receivable from Non-Guarantors of $523.2 million.

(2) Includes non-current payable to Non-Guarantors of $540.9 million.



Summarized Statement of Income (Loss)	Three Months Ended
(in thousands)	June 27, 2020
Revenue	$	242,838
Gross profit	$	37,204
Net loss	$	(42,713	)

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

ITEM 4. CONTROLS AND PROCEDURES.

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

There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended ~~September 28, 2019~~June 27, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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

PART II — OTHER INFORMATION

ITEM 1A. RISK FACTORS.

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 ~~30, 2019,~~28, 2020, which could materially affect our business, financial condition or future results. The risks described in Qorvo's Annual Report on Form 10-K for the fiscal year ended March ~~30, 2019~~28, 2020 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
June 30, 2019 to July 27, 2019 173
$ 70.15
173
$285.7 million
July 28, 2019 to August 24, 2019 1,342
$ 71.26
1,342
$190.1 million
August 25, 2019 to September 28, 2019 786
$ 72.78
786
$132.8 million
Total 2,301
$ 71.70
2,301
$132.8 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
March 29, 2020 to April 25, 2020	137	$	82.26	137	$754.6 million
April 26, 2020 to May 23, 2020	118	$	96.73	118	$743.2 million
May 24, 2020 to June 27, 2020	477	$	109.72	477	$690.9 million
Total	732	$	102.48	732	$690.9 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 ~~stock.~~common stock, which included approximately $117.0 million authorized under the prior program which was terminated concurrent with the new authorization. Under this program, share repurchases ~~will be~~are made in accordance with applicable securities laws on the open market or in privately negotiated transactions. The extent to which we repurchase our shares, the number of shares and the timing of any repurchases ~~will depend~~depends on general market conditions, regulatory requirements, alternative investment opportunities and other considerations. The program does not require us to repurchase a minimum number of shares, does not have a fixed term, and may be modified, suspended or terminated at any time without prior notice.

ITEM 6. EXHIBITS.



4.1		Second Supplemental Indenture, dated as of June 11, 2020, among Qorvo, Inc., the Guarantors party thereto and MUFG Union Bank, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on June 11, 2020)

4.2		Registration Rights Agreement, dated as of June 11, 2020, among Qorvo, Inc., the Guarantors named therein and Citigroup Global Markets 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 June 11, 2020)

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 ~~September 28, 2019,~~June 27, 2020, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets as of ~~September 28, 2019~~June 27, 2020 and March ~~30, 2019;~~28, 2020; (ii) the Condensed Consolidated Statements of Income for the three ~~and six~~ months ended ~~September 28, 2019~~June 27, 2020 and ~~September~~June 29, ~~2018;~~2019; (iii) the Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the three ~~and six~~ months ended ~~September 28, 2019~~June 27, 2020 and ~~September~~June 29, ~~2018;~~2019; (iv) the Condensed Consolidated Statements of Stockholders' Equity for the three ~~and six~~ months ended ~~September 28, 2019~~June 27, 2020 and ~~September~~June 29, ~~2018;~~2019; (v) the Condensed Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~September 28, 2019~~June 27, 2020 and ~~September~~June 29, ~~2018;~~2019; and (vi) the Notes to Condensed Consolidated Financial Statements

104		The cover page from our Quarterly Report on Form 10-Q for the quarter ended ~~September 28, 2019,~~June 27, 2020, formatted in iXBRL

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

SIGNATURES

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



		Qorvo, Inc.

Date:	~~November 1, 2019~~July 30, 2020	/s/ Mark J. Murphy
		Mark J. Murphy
		Chief Financial Officer

4130



	Six Months Ended
	September 28, 2019
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	8,377

Non-cash activities:
Operating lease assets obtained in exchange for new lease liabilities	$	2,486



	September 28, 2019
2020	$	7,575
2021	14,980
2022	11,823
2023	9,167
2024	7,802
Thereafter	32,011
Total lease payments	83,358
Less imputed interest	(13,470		)
Present value of lease liabilities	$	69,888



	Three Months Ended September 28, 2019						Three Months Ended September 29, 2018
	Cost of Goods Sold		Other Operating Expense		Total		Cost of Goods Sold		Other Operating Expense		Total
One-time employee termination benefits	$	—	$	1,414	$	1,414	$	—	$	497	$	497
Contract termination and other associated costs	1,035		1,414		2,449		—		13		13
Accelerated depreciation	5,578		—		5,578		—		—		—
Total	$	6,613	$	2,828	$	9,441	$	—	$	510	$	510

	Six Months Ended September 28, 2019						Six Months Ended September 29, 2018
	Cost of Goods Sold		Other Operating Expense		Total		Cost of Goods Sold		Other Operating Expense		Total
One-time employee termination benefits	$	—	$	4,809	$	4,809	$	—	$	3,135	$	3,135
Contract termination and other associated costs	2,870		4,215		7,085		—		177		177
Accelerated depreciation	21,516		—		21,516		—		—		—
Total	$	24,386	$	9,024	$	33,410	$	—	$	3,312	$	3,312



	Condensed Consolidating Balance Sheet
	September 28, 2019
(in thousands)	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations and Reclassifications			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	80,065	$	506,729	$	—		$	586,794
Accounts receivable, less allowance	—		43,952		361,156		—			405,108
Intercompany accounts and notes receivable	—		473,809		4,624		(478,433		)	—
Inventories	—		165,456		341,741		(21,913		)	485,284
Prepaid expenses	—		20,793		6,493		—			27,286
Other receivables	—		1,799		12,338		—			14,137
Other current assets	—		29,930		3,275		—			33,205
Total current assets	—		815,804		1,236,356		(500,346		)	1,551,814
Property and equipment, net	—		1,059,674		233,337		3,092			1,296,103
Goodwill	—		1,122,629		1,182,507		—			2,305,136
Intangible assets, net	—		154,482		297,306		—			451,788
Long-term investments	—		5,537		92,012		—			97,549
Long-term intercompany accounts and notes receivable	—		1,341,488		220,231		(1,561,719		)	—
Investment in subsidiaries	6,716,288		2,591,241		—		(9,307,529		)	—
Other non-current assets	6,635		101,258		43,286		(4,998		)	146,181
Total assets	$	6,722,923	$	7,192,113	$	3,305,035	$	(11,371,500	)	$	5,848,571
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	—	$	70,435	$	143,501	$	—		$	213,936
Intercompany accounts and notes payable	—		4,624		473,809		(478,433		)	—
Accrued liabilities	10,854		114,289		45,578		1,624			172,345
Current portion of long-term debt	3,750		—		483		—			4,233
Other current liabilities	—		10,167		48,948		—			59,115
Total current liabilities	14,604		199,515		712,319		(476,809		)	449,629
Long-term debt	1,014,423		—		1,640		—			1,016,063
Long-term intercompany accounts and notes payable	1,428,402		133,317		—		(1,561,719		)	—
Other long-term liabilities	—		114,388		28,440		(25,443		)	117,385
Total liabilities	2,457,429		447,220		742,399		(2,063,971		)	1,583,077
Total stockholders’ equity	4,265,494		6,744,893		2,562,636		(9,307,529		)	4,265,494
Total liabilities and stockholders’ equity	$	6,722,923	$	7,192,113	$	3,305,035	$	(11,371,500	)	$	5,848,571