SKYWORKS SOLUTIONS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND OPERATING RESULTS. (kind 10-Ok)

The next dialogue and evaluation of our monetary situation and outcomes of
operations must be learn along with our consolidated monetary
statements and associated notes that seem elsewhere on this Annual Report on Kind
10-Ok. Along with historic data, the next dialogue comprises
forward-looking statements which can be topic to dangers and uncertainties. Precise
outcomes might differ considerably and adversely from these referred to herein due
to various components, together with, however not restricted to, these described beneath and
in Merchandise 1A "Threat Components" and elsewhere on this Annual Report on Kind 10-Ok.

PREVIEW

We, along with our consolidated subsidiaries, are empowering the wi-fi
networking revolution. Our extremely progressive analog semiconductors are
connecting individuals, locations, and issues spanning various new and beforehand
unimagined functions inside the aerospace, automotive, broadband, mobile
infrastructure, related residence, leisure and gaming, industrial, medical,
navy, smartphone, pill, and wearable markets.

Influence of COVID-19
The COVID-19 pandemic and the ensuing financial downturn are affecting enterprise
circumstances in our business. The length, severity, and future affect of the
pandemic, together with because of extra contagious variants of the virus that
causes COVID-19, proceed to be extremely unsure and will nonetheless lead to
vital disruptions to our enterprise operations, in addition to unfavorable impacts
to our monetary situation. The semiconductor business is experiencing varied
provide constraints because of the pandemic. Whereas we're working with our world
provide chain companions to mitigate this danger, the length and extent of the
provide chain disruptions stay unsure.

RESULTS OF OPERATIONS

Fiscal Years Ended October 1, 2021, October 2, 2020, and September 27, 2019.
The next desk units forth the outcomes of our operations expressed as a
share of internet income. See Half II, Merchandise 7 of our Annual Report on Kind 10-Ok
for the fiscal yr ended October 2, 2020, filed with the SEC on November 17,
2020, as amended by Modification No. 1 to such Annual Report on Kind 10-Ok, filed
with the SEC on January 29, 2021 (the "2020 10-Ok"), for Administration's Discussions
and Evaluation of Monetary Situation and Outcomes of Operations for the fiscal
yr ended September 27, 2019.
                                                  October 1,      October 2,      September 27,
                                                     2021            2020             2019
Internet income                                          100.0  %        100.0  %           100.0  %
Value of products bought                                    50.8            51.9               52.5
Gross revenue                                          49.2            48.1               47.5
Working bills:
Analysis and growth                              10.3            13.7               12.5
Promoting, normal, and administrative                   6.3             6.9                5.9
Amortization of intangibles                            0.7             0.4                0.7
Restructuring, impairment, and different prices           0.2             0.4                0.2
Complete working bills                              17.6            21.5               19.3
Working earnings                                      31.6            26.6               28.2
Curiosity expense                                      (0.3)              -                  -
Different earnings (expense), internet                              -               -                0.3
Earnings earlier than earnings taxes                            31.3            26.6               28.5
Provision for earnings taxes                             2.0             2.3                3.2
Internet earnings                                            29.3  %         24.3  %            25.3  %




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Common

Through the fiscal yr ended October 1, 2021, the next key components
contributed to our general outcomes of operations, monetary place, and money
flows:
•Internet income elevated 52.3% to $5,109.1 million, as in comparison with fiscal 2020.
This enhance in income was pushed primarily by a rise in general demand
for wi-fi connectivity merchandise coupled with the onset of expertise improve
cycles, together with for 5G and Wi-Fi 6 options. Moreover, our common
content material per gadget for these next-generation options elevated.
•Our ending money, money equivalents, and marketable securities stability elevated
4.8% to $1,027.2 million as of October 1, 2021, from $980.0 million as of
October 2, 2020. The rise in money, money equivalents, and marketable
securities throughout fiscal 2021 was primarily as a result of money generated from
operations of $1,772.0 million, the borrowing of $1,000.0 million in Time period Loans,
$500.0 million of Senior Notes due 2023 (the "2023 Notes"), $500.0 million of
Senior Notes due 2026 (the "2026 Notes"), and $500.0 million of Senior Notes due
2031 (the "2031 Notes" and, along with the 2023 Notes and the 2026 Notes, the
"Notes"), partially offset by funds for acquisitions of $2,751.0 million,
capital expenditures of $637.8 million, dividend funds of $340.6 million,
repayments of Time period Loans of $250.0 million, and the repurchase of 1.4 million
shares of frequent inventory for $195.6 million.

Internet Income
                                             Fiscal Years Ended
                         October 1,            October 2,            September 27,
                            2021      Change      2020      Change        2019
({dollars} in thousands and thousands)
Internet income             $  5,109.1    52.3%   $  3,355.7    (0.6)%  $      3,376.8



We market and promote our merchandise on to OEMs of communications and
electronics merchandise, third-party unique design producers and contract
producers, and not directly via digital elements distributors. We
typically expertise seasonal peaks throughout our fourth and first fiscal quarters
(which correspond to the second half of the calendar yr), primarily as a
results of elevated worldwide manufacturing of client electronics in anticipation
of elevated vacation gross sales, whereas our second and third fiscal quarters are
usually decrease and consistent with seasonal business developments.
The rise in internet income in fiscal 2021, as in comparison with fiscal 2020, was
pushed by a rise in general demand for wi-fi connectivity merchandise
coupled with the onset of expertise improve cycles, together with for 5G and Wi-Fi
6 options. Moreover, our common content material per gadget for these
next-generation options elevated.
For data concerning internet income by geographic area and buyer
focus, see Be aware 15 to Merchandise 8 of this Annual Report on Kind 10-Ok.

Gross Revenue
                                             Fiscal Years Ended
                         October 1,            October 2,            September 27,
                            2021      Change      2020      Change        2019
({dollars} in thousands and thousands)
Gross revenue            $ 2,512.4     55.8%   $ 1,612.9      0.6%   $     1,603.8
% of internet income             49.2  %               48.1  %                   47.5  %



Gross revenue represents internet income much less price of products bought. Our price of products
bought consists primarily of bought supplies, labor, and overhead (together with
depreciation and share-based compensation expense) related to product
manufacturing. As a part of our regular course of enterprise, we intend to enhance
gross revenue with efforts to extend unit volumes, enhance manufacturing
efficiencies, decrease manufacturing prices of present merchandise, and by introducing
new and better value-added merchandise.

The rise in gross revenue in fiscal 2021, as in comparison with fiscal 2020, was
primarily the results of a positive product combine and better unit volumes with a
gross revenue affect of $950.2 million, partially offset by decrease common promoting
costs and a rise in amortization of acquisition intangibles, together with
stock step-up, because of the Acquisition accomplished in the course of the interval.
Gross revenue as a share of internet income is estimated to lower in fiscal
2022 as a result of amortization of intangibles acquired throughout fiscal 2021.
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Analysis and Improvement
                                                Fiscal Years Ended
                            October 1,             October 2,             September 27,
                               2021       Change      2020       Change       2019
({dollars} in thousands and thousands)
Analysis and growth   $    532.3     14.7%   $    464.1      9.4%   $      424.1
% of internet income                 10.4  %                13.8  %                  12.6  %



Analysis and growth bills consist primarily of direct personnel prices
together with share-based compensation expense, prices for pre-production analysis
and testing of recent gadgets, masks, engineering prototypes, and design device
prices.

The rise in analysis and growth expense in fiscal 2021, as in comparison with
fiscal 2020, was primarily associated to headcount-related bills, together with
share-based compensation, because of our elevated funding in growing
new applied sciences and merchandise.
Promoting, Common, and Administrative
                                                                       Fiscal Years Ended
                                                October 1,                October 2,                September 27,
                                                   2021        Change        2020        Change         2019
({dollars} in thousands and thousands)
Promoting, normal, and administrative           $    322.5       39.4%    $    231.4       16.7%    $      198.3
% of internet income                                      6.3  %                    6.9  %                      5.9  %



Promoting, normal, and administrative bills embrace authorized and associated prices,
accounting, treasury, human sources, data techniques, customer support,
dangerous debt expense, gross sales commissions, share-based compensation expense,
promoting, advertising, prices related to enterprise mixtures accomplished or
contemplated in the course of the interval, and different prices.

The rise in promoting, normal, and administrative bills in fiscal 2021, as
in comparison with fiscal 2020, was primarily associated to will increase in prices related
with the Acquisition accomplished in the course of the interval and will increase in
headcount-related bills, together with share-based compensation.

Amortization of intangible property

                                                    Fiscal Years Ended
                               October 1,             October 2,              September 27,
                                  2021       Change      2020       Change        2019
({dollars} in thousands and thousands)
Amortization of intangibles   $     36.0     205.1%  $     11.8     (47.8)%  $       22.6
% of internet income                     0.7  %                 0.4  %                    0.7  %



The rise in amortization expense for fiscal 2021, as in comparison with fiscal
2020, was primarily as a result of extra intangible property acquired throughout fiscal
2021. See Be aware 3 to Merchandise 8 of this Annual Report on Kind 10-Ok for an in depth
dialogue of intangible property acquired. Amortization expense is estimated to
enhance in fiscal 2022 as a result of amortization of intangibles acquired throughout
fiscal 2021.

Restructuring, depreciation and different prices

                                                                        Fiscal Years Ended
                                                October 1,                  October 2,                September 27,
                                                   2021         Change         2020        Change         2019
({dollars} in thousands and thousands)
Restructuring, impairment, and different prices  $       8.9      (35.5)%    $      13.8      102.9%    $        6.8
% of internet income                                      0.2  %                      0.4  %                      0.2  %



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Restructuring, impairment and different prices incurred throughout fiscal yr 2021 had been primarily associated to impairment of property, plant and gear.

Restructuring, depreciation and different prices incurred throughout fiscal yr 2020 had been primarily associated to the abandonment of an ongoing analysis and growth (“IPR & D”) venture beforehand capitalized.

Curiosity Expense

                                              Fiscal Years Ended
                         October 1,            October 2,              September 27,
                            2021      Change      2020       Change        2019
({dollars} in thousands and thousands)
Curiosity expense        $   (13.4)    100.0%  $      -         -%    $         -
% of internet income             (0.3) %                 -    %                    -     %



The rise in curiosity expense for fiscal 2021, as in comparison with fiscal 2020,
was because of the issuance of the Notes in Could 2021 and the borrowing of the Time period
Loans (as outlined beneath) in July 2021. Curiosity expense is estimated to extend
in fiscal 2022 as our common borrowings excellent are anticipated to be greater
than in fiscal 2021.

Provision for Earnings Taxes
                                                    Fiscal Years Ended
                               October 1,             October 2,              September 27,
                                  2021       Change      2020       Change        2019
({dollars} in thousands and thousands)
Provision for earnings taxes    $    100.4     30.6%   $     76.9     (28.4)%  $      107.4
% of internet income                     2.0  %                 2.3  %                    3.2  %



The annual efficient tax fee for fiscal 2021 of 6.3% was lower than the United
States federal statutory fee of 21.0% ensuing primarily from overseas earnings
taxed at charges decrease than the federal statutory fee, a profit associated to a
change within the reserve for unsure tax positions, a profit from
foreign-derived intangible earnings deduction ("FDII"), windfall tax deductions,
analysis and growth credit, and overseas tax credit, partially offset by a
tax on world intangible low-taxed earnings ("GILTI").

The lower within the efficient tax fee for fiscal yr 2021, in comparison with the efficient fee of 11.2% for fiscal yr 2020, is especially defined by the advantages related to favorable modifications in reserves for unsure tax positions.

Throughout fiscal 2021, we concluded an IRS examination of our federal earnings tax
returns for fiscal 2015 and 2016. With the conclusion of the audit, we decreased
the reserve for unsure tax positions, together with curiosity and penalties, which
resulted within the recognition of an earnings tax advantage of $34.8 million in fiscal
2021. As well as, the statute of limitations expired on the federal earnings tax
return for fiscal 2017 and, because of this, we decreased the associated reserve for
unsure tax positions of $25.5 million.

The rise in earnings tax expense in fiscal 2021, as in comparison with fiscal 2020,
was primarily as a result of elevated earnings from operations, partially offset by a
lower within the reserve for unsure tax positions.

See word 9 in part 8 of this annual report on Kind 10-Ok for added data concerning earnings taxes.

LIQUIDITY AND CAPITAL RESOURCES

Under is a abstract of our money flows for the durations indicated:

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                                                                             Fiscal Years Ended
                                                          October 1,            October 2,           September 27,
(in thousands and thousands)                                                2021                  2020                  2019

Money and money equivalents firstly of the interval $ 566.7

   $     851.3          $        733.3
Internet money offered by working actions                    1,772.0              1,204.5                 1,367.4
Internet money utilized in investing actions                       (3,133.2)              (581.4)                 (336.9)

Internet money offered by (utilized in) financing actions 1,677.4

        (907.7)                 (912.5)
Money and money equivalents at finish of interval              $      882.9        

$ 566.7 $ 851.3



Money offered by working actions:
Money offered by working actions consists of internet earnings for the interval
adjusted for sure non-cash objects and modifications in sure working property and
liabilities. The $567.5 million enhance in money offered by working
actions for fiscal 2021, as in comparison with fiscal 2020, was primarily associated to
a $683.5 million enhance in internet earnings, partially offset by $170.4 million of
unfavorable modifications in working capital, due primarily to a rise in accounts
receivable which resulted from greater income in the course of the interval.

Money utilized in investing actions:
Money utilized in investing actions consists primarily of money paid for
acquisitions, capital expenditures, bought intangibles, and marketable
securities, offset by money obtained associated to the sale or maturity of
marketable securities. The $2,551.8 million enhance in money utilized in investing
actions for fiscal 2021, as in comparison with fiscal 2020, was primarily associated to
a $2,751.0 million enhance in money paid for acquisitions and a $248.4 million
enhance in money used for capital expenditures, partially offset by $452.8
million money offered by the web gross sales of marketable securities.

Money offered by financing actions:
Money offered by financing actions consists primarily of proceeds and
funds associated to our long-term borrowings and money transactions associated to
fairness. The $2,585.1 million enhance in money offered by financing actions
for fiscal 2021, as in comparison with fiscal 2020, was primarily associated to an
enhance of $2,488.1 million in long-term debt issued and a lower of $451.9
million in inventory repurchase exercise, partially offset by repayments of Time period
Loans of $250.0 million, a lower of $45.5 million in internet proceeds from
worker inventory choice workout routines, a rise of $33.6 million in dividend
funds, and a rise of $22.1 million associated to the minimal statutory
payroll tax withholdings upon vesting of worker efficiency and restricted
inventory awards.

Liquidity:

Money, money equivalents, and marketable securities totaled $1,027.2 million as of
October 1, 2021, representing a rise of $47.3 million from October 2, 2020.
We now have excellent $500.0 million of Notes Due 2023, $500.0 million of Notes
Due 2026, and $500.0 million of Notes Due 2031. We now have a time period credit score settlement
(the "Time period Credit score Settlement") offering for a $1.0 billion time period mortgage facility
(the "Time period Mortgage Facility"). On July 26, 2021, the Firm borrowed $1.0 billion
in mixture principal quantity of time period loans (the "Time period Loans") below the Time period
Mortgage Facility to finance a portion of the acquisition worth for the Acquisition and
to pay charges and bills incurred in connection therewith. Throughout fiscal 2021,
the Firm repaid $250.0 million of excellent borrowings below the Time period
Loans. As of October 1, 2021, there have been $750.0 million of borrowings
excellent below the Time period Credit score Settlement. We now have a Revolving Credit score
Settlement (the "Revolving Credit score Settlement") below which we might borrow as much as
$750.0 million for normal company functions and dealing capital wants of the
Firm and its subsidiaries. As of October 1, 2021, there have been no borrowings
excellent below the revolving credit score facility (the "Revolver"). The Revolving
Credit score Settlement expires July 26, 2026.

For an outline of contractual obligations, similar to taxes, leases, and debt,
see Be aware 9, Be aware 11, and Be aware 17 to Merchandise 8 of this Annual Report on Kind 10-Ok,
respectively.

Primarily based on our historic outcomes of operations, we count on that our money, money
equivalents, and marketable securities readily available, and the money we count on to
generate from operations, and funds from our Revolver, shall be enough to
fund our short-term and long-term liquidity necessities primarily arising from:
analysis and growth, capital expenditures, potential acquisitions, working
capital, quarterly money dividend funds (if such dividends are declared by the
Board of Administrators), excellent commitments, and different liquidity necessities
related to present operations. Nevertheless, we can't be sure that our money
readily available, money generated from operations, and funds from our Revolver shall be
obtainable sooner or later to fund all of our capital and working necessities.
As well as, any future strategic investments and vital acquisitions might
require extra
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liquidity and capital sources. If we’re unable to acquire enough liquidity or capital to satisfy our wants on a well timed foundation and on favorable phrases, our enterprise and operations might be materially and adversely affected.

Our invested money balances primarily encompass extremely liquid marketable securities which can be obtainable to satisfy short-term money wants, together with: time period deposits, certificates of deposit, cash market funds, we Treasury
securities, company securities, company debt securities and industrial paper.

CRITICAL ACCOUNTING ESTIMATES

The dialogue and evaluation of our monetary situation and outcomes of operations
are based mostly upon our consolidated monetary statements, which have been ready
in accordance with typically accepted accounting ideas ("GAAP"). The
preparation of those monetary statements requires us to make estimates and
judgments in making use of our most crucial accounting insurance policies that may have a
vital affect on the outcomes we report in our monetary statements. The SEC
has outlined important accounting insurance policies as these which can be each most necessary
to the portrayal of our monetary situation and outcomes and which require our
most tough, advanced, or subjective judgments or estimates. Primarily based on this
definition, our most crucial accounting insurance policies embrace income recognition,
which impacts the recording of internet income; stock valuation, which impacts
the price of items bought and gross margin; enterprise mixtures, which impacts
the truthful worth of acquired property and assumed liabilities; and earnings taxes,
which impacts the earnings tax provision. These insurance policies and vital judgments
concerned are mentioned additional beneath. We now have different vital accounting
insurance policies that don't typically require subjective estimates or judgments or
wouldn't have a fabric affect on our outcomes of operations. Our vital
accounting insurance policies are described in Be aware 2 to Merchandise 8 of this Annual Report on
Kind 10-Ok.

Income Recognition. We acknowledge income in accordance with the Monetary
Accounting Requirements Board's ("FASB") Accounting Requirements Codification ("ASC")
606 Income from Contracts with Prospects internet of estimated reserves. Our income
reserves comprise uncertainties as a result of they require administration to make
assumptions and to use judgment to estimate the worth of future credit to
clients for product returns, worth safety, worth changes, and inventory
rotation for merchandise bought to sure digital part distributors. We base
these estimates on the anticipated worth methodology contemplating all fairly
obtainable data, together with our historic expertise and present
expectations, and are mirrored within the transaction worth when gross sales are
recorded.

Stock Valuation. We worth our stock on the decrease of price or internet
realizable worth. Reserves for extra and out of date stock are established on
a quarterly foundation and are based mostly on an in depth evaluation of aged materials,
salability of our stock, market circumstances, and product life cycles. As soon as
reserves are established, write-downs of stock are thought of everlasting
changes to the price foundation of stock. Our reserves comprise uncertainties
as a result of the calculation requires administration to make assumptions and to use
judgment concerning historic expertise, market circumstances, and technological
obsolescence. Adjustments in precise demand or market circumstances may adversely
affect our reserve calculations.

Earnings Taxes. The applying of tax legal guidelines and laws to calculate our tax
liabilities is topic to authorized and factual interpretation, judgment, and
uncertainty in a large number of jurisdictions. Tax legal guidelines and laws themselves
are topic to vary because of modifications in fiscal coverage, modifications in
laws, the evolution of laws, and court docket rulings. We acknowledge
potential liabilities for anticipated tax audit points in america and
different tax jurisdictions based mostly on our estimate of whether or not, and the extent to
which, extra taxes and curiosity shall be due. We file an quantity as an
estimate of possible extra earnings tax legal responsibility on the largest quantity that
we really feel is extra seemingly than not, based mostly upon the technical deserves of the
place, to be sustained upon audit by the related tax authority.

Enterprise Combos. We allocate the truthful worth of the acquisition consideration
of a enterprise acquisition to the tangible property, liabilities, and intangible
property acquired, together with IPR&D, based mostly on their estimated truthful values. The
extra of the truthful worth of buy consideration over the truthful values of those
identifiable property and liabilities is recorded as goodwill. IPR&D is initially
capitalized at truthful worth as an intangible asset with an indefinite life and
assessed for impairment thereafter. When an IPR&D venture is accomplished, the
IPR&D is reclassified as an amortizable bought intangible asset and amortized
over the asset's estimated helpful life. Our valuation of acquired property and
assumed liabilities requires vital estimates, particularly with respect to
intangible property. The valuation of intangible property, specifically, requires
that we use valuation methods such because the earnings strategy. The earnings
strategy contains the usage of a reduced money move mannequin, which incorporates
discounted money move situations and requires the next vital estimates:
future anticipated income, bills, capital expenditures and different prices, and
low cost charges. We estimate the truthful worth based mostly upon assumptions we consider to
be cheap, however that are inherently unsure and unpredictable and, as a
outcome, precise outcomes might differ from estimates. For finite-lived intangible
property valued throughout fiscal 2021, a hypothetical change of ten p.c to our
valuation estimate would affect amortization of acquisition intangibles by
$106.0 million over a weighted-average amortization interval of 4.4 years.
Estimates related to
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accounting for acquisitions might change as extra data turns into obtainable concerning the property acquired and the liabilities assumed. Prices associated to the acquisition are acknowledged individually from the enterprise mixture and are expensed as they’re incurred.

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