Item 8. Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

			Page
Report of Independent Registered Public Accounting Firm (PCAOB ID No.34)			55
Consolidated Balance Sheets as of January 29, 2022 and January 30, 2021			58
Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended January 29, 2022, January 30, 2021 and February 1, 2020			59
Consolidated Statements of Stockholders’ Equity for the years ended January 29, 2022, January 30, 2021 and February 1, 2020			60
Consolidated Statements of Cash Flows for the years ended January 29, 2022, January 30, 2021 and February 1, 2020			61
Notes to Consolidated Financial Statements			62

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Marvell Technology, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Marvell Technology, Inc. and subsidiaries (the “Company”) as of January 29, 2022, and January 30, 2021, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended January 29, 2022, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of January 29, 2022, and January 30, 2021, and the results of its operations and its cash flows for each of the three years in the period ended January 29, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of January 29, 2022, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 10, 2022, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Business Combinations – Fair Value of Acquired Intangible Assets — Refer to Notes 2 and 4 to the financial statements

Critical Audit Matter Description

The Company completed the acquisitions of Inphi Corporation for $9.9 billion on April 20, 2021, and Innovium, Inc. for $1.0 billion on October 5, 2021. The Company accounted for the transactions under the acquisition method of accounting for business combinations. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values, including intangible assets of $4.4 billion for Inphi and $433 million for Innovium. Intangible assets acquired primarily related to developed technology, in process research and development (“IPR&D”) and customer relationships. Management estimated the fair value of the intangible assets using valuation techniques which includes the use of a discounted cash flow model. The fair value determination of the intangible assets required management to make significant estimates and assumptions, including future expected revenue, expenses, capital expenditures and other costs, as well as discount rates.

We identified the fair value of acquired intangible assets as a critical audit matter because of the significant business assumptions and estimates used in the valuation of the Inphi and Innovium acquired entity intangible assets that possess higher degrees of complexity and sensitivity to the valuations. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s assumptions related to each acquisition. The significant assumptions and estimates used to estimate the fair value of Inphi intangible assets relate primarily to the forecasted revenue growth rates, the expected period over which the intangible assets are expected to produce cash flows (“technology obsolescence rates”), the period required for customers revenues to mature (“customer ramp periods”) and the discount rates applied to these future cash flows. The significant assumptions and estimates used to estimate the fair value of Innovium intangible assets relate primarily to the annual revenue growth rates that form the basis of future cash flows.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the fair value of the Inphi acquired intangible assets, specifically as they relate to significant assumptions and estimates including forecasted revenue growth rates, technology obsolescence rates, customer ramp periods, and discount rates, included the following, among others:

• We tested the effectiveness of internal controls over the valuation and accounting for the acquired intangible assets, including management’s controls related to the forecasted revenue growth rate and selection of technology obsolescence rates, customer ramp periods, and discount rate.

• We assessed the reasonableness of management’s forecast of future revenues by comparing the projections to historical results, certain peer companies, and industry data.

• We evaluated whether the estimated future revenues were consistent with evidence obtained in other areas of the audit.

• We evaluated the reasonableness of management’s selection of technology obsolescence rates and customer ramp periods by understanding the development status and life cycle of each product and comparing management’s assumptions to historical product and customer data and information obtained in other areas of the audit.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology and (2) discount rate by:

◦Testing the source information underlying the determination of the discount rate and testing the mathematical accuracy of the calculation

◦Developing a range of independent estimates and comparing those to the discount rate selected by management.

Our audit procedures related to the fair value of the Innovium acquired intangible assets, specifically as they relate to significant assumptions and estimates including forecasted revenue growth rates by product, included the following, among others:

• We tested the effectiveness of internal controls over the valuation and accounting for the acquired intangible assets, including management’s controls related to the forecasted revenue growth rates by product.

• We assessed the reasonableness of management’s forecasts of future revenues by comparing the projections to contracted future sales, certain peer companies, and industry data.

• We evaluated whether the estimated future revenues were consistent with evidence obtained in other areas of the audit.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology used by the Company.

Inventories - Management Judgements Regarding Excess and Obsolete Inventory Reserves — Refer to Note 2 to the financial statements

Critical Audit Matter Description

Management writes down excess inventories based upon a regular analysis of inventory on hand compared to historical and forecasted demand. Management’s estimates of forecasted demand are based upon analysis and assumptions including, but not limited to, expected product lifecycles and development plans, expected customer orders, projected market conditions, and historical usage by product. As of January 29, 2022, the Company's consolidated inventories balance was $720 million.

We identified the valuation of inventory as a critical audit matter because of the significant assumptions management makes with regards to estimating the excess write downs and the potential amplification of those judgments in periods of market uncertainty. Specifically, due to the ongoing market uncertainty, including the business impacts of the global supply chain shortage, performing audit procedures to evaluate the reasonableness of management’s estimates of forecasted demand, required a high degree of auditor judgment and an increased extent of effort.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s estimates of forecasted demand used in the valuation of inventory included the following, among others:

• We tested the effectiveness of internal controls over management’s provisions for excess inventories, including internal controls designed to review and approve forecasted demand and the underlying assumptions regarding expected product lifecycles, product development plans, expected customer orders, projected market conditions, and historical usage by product.

• We evaluated management’s ability to accurately estimate forecasted demand by comparing estimates made in prior periods to the historical actual results for those same periods.

• We made inquiries of business unit managers throughout the period as well as executives, sales, and operations personnel about the expected product lifecycles and product development plans and historical usage by product and compared expectations to actual developments over the period.

• We selected a sample of inventory products (both on-hand and from committed open purchase orders) and tested the forecasted demand by comparing internal and external information (e.g., historical usage, contracts, communications with customers, macroeconomic conditions, etc.) with the Company’s forecast.

• We considered, when relevant, the existence of contradictory evidence based on reading of internal communications to management and the board of directors, Company press releases, and analysts' reports, as well as our observations and inquires as to changes within the business and evidence obtained through other areas of the audit.

/s/ DELOITTE & TOUCHE LLP

San Jose, California

March 10, 2022

We have served as the Company’s auditor since 2016.

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MARVELL TECHNOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except par value per share)

			January 29, 2022						January 30, 2021
ASSETS
Current assets:
Cash and cash equivalents			$	613,533					$	748,467
Accounts receivable, net			1,048,583						536,668
Inventories			720,331						268,228
Prepaid expenses and other current assets			111,003						63,782
Total current assets			2,493,450						1,617,145
Property and equipment, net			462,773						326,125
Goodwill			11,511,129						5,336,961
Acquired intangible assets, net			6,153,422						2,270,700
Deferred tax assets			493,508						672,424
Other non-current assets			994,315						541,569
Total assets			$	22,108,597					$	10,764,924
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable			$	461,509					$	252,419
Accrued liabilities			622,561						435,616
Accrued employee compensation			241,306						189,421
Short-term debt			63,166						199,641
Total current liabilities			1,388,542						1,077,097
Long-term debt			4,484,811						993,170
Other non-current liabilities			533,147						258,853
Total liabilities			6,406,500						2,329,120
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock, $0.002 par value; 8,000 shares authorized; no shares issued and outstanding			—						—
Common stock, $0.002 par value; 1,250,000 shares authorized; 846,695 and 675,402 shares issued and outstanding in fiscal 2022 and 2021, respectively			1,692						1,350
Additional paid-in capital			14,209,047						6,331,013
Retained earnings			1,491,358						2,103,441
Total stockholders’ equity			15,702,097						8,435,804
Total liabilities and stockholders’ equity			$	22,108,597					$	10,764,924

See accompanying Notes to Consolidated Financial Statements.

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MARVELL TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share amounts)

			Year Ended
			January 29, 2022						January 30, 2021						February 1, 2020
Net revenue			$	4,462,383					$	2,968,900					$	2,699,161
Cost of goods sold			2,398,158						1,480,550						1,342,220
Gross profit			2,064,225						1,488,350						1,356,941
Operating expenses:
Research and development			1,424,306						1,072,740						1,080,391
Selling, general and administrative			955,245						467,240						464,580
Legal settlement			—						36,000						—
Restructuring related charges			32,342						170,759						55,328
Total operating expenses			2,411,893						1,746,739						1,600,299
Operating loss			(347,668)						(258,389)						(243,358)
Interest income			750						2,599						4,816
Interest expense			(139,341)						(69,264)						(85,631)
Other income (loss), net			2,764						2,886						1,122,555
Interest and other income (loss), net			(135,827)						(63,779)						1,041,740
Income (loss) before income taxes			(483,495)						(322,168)						798,382
Benefit for income taxes			(62,461)						(44,870)						(786,009)
Net income (loss)			$	(421,034)					$	(277,298)					$	1,584,391
Comprehensive income (loss), net of tax			$	(421,034)					$	(277,298)					$	1,584,391
Net income (loss) per share - basic			$	(0.53)					$	(0.41)					$	2.38
Net income (loss) per share - diluted			$	(0.53)					$	(0.41)					$	2.34
Weighted-average shares:
Basic			796,855						668,772						664,709
Diluted			796,855						668,772						676,094

See accompanying Notes to Consolidated Financial Statements.

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MARVELL TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except per share amounts)

			Common Stock												Additional Paid-in Capital												Retained Earnings						Total
Shares						Amount
Balance at February 2, 2019			658,514						$	1,317					$	6,188,598											$	1,116,495					$	7,306,410
Issuance of common stock in connection with equity incentive plans			19,453						40						147,013												—						147,053
Tax withholdings related to net share settlement of restricted stock units			—						—						(98,293)												—						(98,293)
Stock-based compensation			—						—						243,937												—						243,937
Issuance of warrant for common stock			—						—						3,407												—						3,407
Replacement equity awards attributable to pre-acquisition service			—						—						15,520												—						15,520
Repurchase of common stock			(14,486)						(29)						(364,243)												—						(364,272)
Cash dividends declared and paid (cumulatively $0.24 per share)			—						—						—												(159,573)						(159,573)
Net income			—						—						—												1,584,391						1,584,391
Balance at February 1, 2020			663,481						1,328						6,135,939												2,541,313						8,678,580
Issuance of common stock in connection with equity incentive plans			13,172						25						86,648												—						86,673
Tax withholdings related to net share settlement of restricted stock units			—						—						(108,089)												—						(108,089)
Stock-based compensation			—						—						241,714												—						241,714
Repurchase of common stock			(1,251)						(3)						(25,199)												—						(25,202)
Cash dividends declared and paid (cumulatively $0.24 per share)			—						—						—												(160,574)						(160,574)
Net loss			—						—						—												(277,298)						(277,298)
Balance at January 30, 2021			675,402						1,350						6,331,013												2,103,441						8,435,804
Issuance of common stock in connection with equity incentive plans			11,646						22						84,501												—						84,523
Tax withholdings related to net share settlement of restricted stock units			—						—						(299,851)												—						(299,851)
Stock-based compensation			—						—						473,517												—						473,517
Issuance of common stock in connection with acquisitions			146,163						293						6,889,786												—						6,890,079
Equity related issuance cost			—						—						(8,177)												—						(8,177)
Replacement equity awards attributable to pre-acquisition service			—						—						115,570												—						115,570
Conversion feature of convertible notes			—						—						244,155												—						244,155
Impact of repurchase of convertible notes			7,115						14						234,333												—						234,347
Conversion of convertible notes to common stock			6,369						13						144,200												—						144,213
Cash dividends declared and paid (cumulatively $0.24 per share)			—						—						—												(191,049)						(191,049)
Net loss			—						—						—												(421,034)						(421,034)
Balance at January 29, 2022			846,695						$	1,692					$	14,209,047											$	1,491,358					$	15,702,097

See accompanying Notes to Consolidated Financial Statements.

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MARVELL TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

			Year Ended
			January 29, 2022						January 30, 2021						February 1, 2020
Cash flows from operating activities:
Net income (loss)			$	(421,034)					$	(277,298)					$	1,584,391
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			265,934						197,912						156,658
Stock-based compensation			460,679						241,539						242,207
Amortization of acquired intangible assets			979,377						443,616						368,082
Amortization of inventory fair value adjustment associated with acquisitions			194,273						17,284						55,826
Amortization of deferred debt issuance costs and debt discounts			21,557						10,026						6,763
Restructuring related impairment charges			6,200						130,903						17,571
Deferred income taxes			(93,894)						(39,491)						(785,158)
Gain on sale of business			—						—						(1,121,709)
Other expense, net			69,163						24,923						26,448
Changes in assets and liabilities, net of acquisitions:
Accounts receivable			(409,079)						(44,322)						11,244
Inventories			(291,886)						29,913						12,759
Prepaid expenses and other assets			(161,806)						(41,634)						(54,138)
Accounts payable			93,157						39,663						1,658
Accrued liabilities and other non-current liabilities			77,148						44,612						(182,893)
Accrued employee compensation			29,579						39,641						20,588
Net cash provided by operating activities			819,368						817,287						360,297
Cash flows from investing activities:
Sales of available-for-sale securities			—						—						18,832
Purchases of technology licenses			(17,797)						(12,708)						(4,712)
Purchases of property and equipment			(169,324)						(106,798)						(81,921)
Acquisitions, net of cash acquired			(3,554,936)						—						(1,071,079)
Net proceeds from sale of business			—						—						1,698,783
Other, net			(3,073)						(138)						(1,057)
Net cash provided by (used in) investing activities			(3,745,130)						(119,644)						558,846
Cash flows from financing activities:
Repurchases of common stock			—						(25,202)						(364,272)
Proceeds from employee stock plans			84,484						86,635						147,276
Tax withholding paid on behalf of employees for net share settlement			(305,657)						(108,094)						(98,302)
Dividend payments to stockholders			(191,049)						(160,574)						(159,573)
Payments on technology license obligations			(134,435)						(100,018)						(72,266)
Proceeds from issuance of debt			3,896,096						—						950,000
Principal payments of debt			(526,876)						(250,000)						(1,250,000)
Payment for repurchases and settlement of convertible notes			(181,207)						—						—
Proceeds from capped calls			160,319						—						—
Payment of equity and debt financing costs			(11,850)						(38,023)						—
Other, net			1,003						(1,504)						(6,812)
Net cash provided by (used in) in financing activities			2,790,828						(596,780)						(853,949)
Net increase (decrease) in cash and cash equivalents			(134,934)						100,863						65,194
Cash and cash equivalents at beginning of the year			748,467						647,604						582,410
Cash and cash equivalents at end of the year			$	613,533					$	748,467					$	647,604

See accompanying Notes to Consolidated Financial Statements.

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MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Basis of Presentation

The Company

Marvell Technology, Inc., and its subsidiaries (the “Company”), is a leading supplier of infrastructure semiconductor solutions, spanning the data center core to network edge. The Company is a fabless semiconductor supplier of high-performance standard and semi-custom products with core strengths in developing and scaling complex System-on-a-Chip architectures, integrating analog, mixed-signal, and digital signal processing functionality. The Company also leverages leading intellectual property and deep system-level expertise, as well as highly innovative security firmware. The Company's solutions are empowering the data economy and enabling the data center, carrier infrastructure, enterprise networking, consumer, and automotive/industrial end markets. The Company is incorporated in Delaware, United States.

Basis of Presentation

The Company’s fiscal year is the 52- or 53-week period ending on the Saturday closest to January 31. Accordingly, every fifth or sixth fiscal year will have a 53-week period. The additional week in a 53-week year is added to the fourth quarter, making such quarter consist of 14 weeks. Fiscal 2022, fiscal 2021 and fiscal 2020 each had a 52-week period. Certain prior period amounts have been reclassified to conform to current year presentation.

On April 20, 2021, the Company completed its acquisition of Inphi Corporation (“Inphi”) in a cash and stock transaction. Inphi is a global leader in high-speed data movement enabled by optical interconnects. In conjunction with the acquisition transaction, Marvell Technology Group Ltd. and Inphi became wholly owned subsidiaries of the new parent company, Marvell Technology, Inc., on April 20, 2021. The parent company is domiciled in and subject to taxation in the United States. See “Note 4 - Business Combinations”, “Note 5 - Goodwill and Acquired Intangible Assets, Net”, and “Note 14 - Income Taxes” for more information.

On October 5, 2021, the Company completed its acquisition of Innovium, Inc. (“Innovium”), a leading provider of networking solutions for cloud and edge data centers, in an all-stock transaction. See “Note 4 - Business Combinations” and “Note 5 - Goodwill and Acquired Intangible Assets, Net” for more information.

Note 2 — Significant Accounting Policies

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to performance-based compensation, revenue recognition, provisions for sales returns and allowances, inventory excess and obsolescence, investment fair values, goodwill and other intangible assets, restructuring, income taxes, litigation and other contingencies. Actual results could differ from these estimates, and such differences could affect the results of operations reported in future periods. In the current macroeconomic environment affected by COVID-19, these estimates require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, these estimates may change materially in future periods.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated. The functional currency of the Company and its subsidiaries is the U.S. dollar.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less from the date of purchase to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and time deposits.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Investments in Equity Securities

The Company has equity investments in privately-held companies. If the Company has the ability to exercise significant influence over the investee, but not control, the Company accounts for the investment under the equity method. If the Company does not have the ability to exercise significant influence over the operations of the investee, the Company accounts for the investment under the measurement alternative method. Investments in privately-held companies are included in other non-current assets and subject to impairment review on an ongoing basis. Investments are considered impaired when the fair value is below the investment’s cost basis. This assessment is based on a qualitative and quantitative analysis, including, but not limited to, the investee’s revenue and earnings trends, available cash and liquidity, and the status of the investee’s products and the related market for such products.

Concentration of Credit Risk and Significant Customers

Financial instruments that potentially subject the Company to a significant concentration of credit risk consist principally of cash equivalents and accounts receivable. Cash and cash equivalents are maintained with high-quality financial institutions, the composition and maturities of which are regularly monitored by management. The Company believes that the concentration of credit risk in its trade receivables is substantially mitigated by the Company’s credit evaluation process, relatively short collection terms and the high level of credit worthiness of its customers. For customers including distributors, the Company performs ongoing credit evaluations of their financial conditions and limits the amount of credit extended when deemed necessary based upon payment history and their current credit worthiness, but generally requires no collateral. The Company regularly reviews the allowance for bad debt and doubtful accounts by considering factors such as historical experience, credit quality, reasonable and supportable forecasts, age of the accounts receivable balances and current economic conditions that may affect a customer’s ability to pay.

The Company’s accounts receivable was concentrated with six customers at January 29, 2022, who comprise a total of 52% of gross accounts receivable, compared with four customers at January 30, 2021, who represented 53% of gross accounts receivable, respectively. This presentation is at the customer consolidated level.

During fiscal 2022, 2021 and 2020, there was no net revenue attributable to a customer, other than one distributor, whose revenues as a percentage of net revenue was 10% or greater of total net revenues. Net revenue attributable to significant distributors whose revenues as a percentage of net revenue was 10% or greater of total net revenues is presented in the following table:

			Year Ended
			January 29, 2022						January 30, 2021						February 1, 2020
Distributor:
Distributor A			15		%				13		%				12		%

The Company continuously monitors the creditworthiness of its distributors and believes these distributors’ sales to diverse end customers and to diverse geographies further serve to mitigate the Company’s exposure to credit risk.

Inventories

Inventory is stated at the lower of cost or net realizable value, cost being determined under the first-in, first-out method. The total carrying value of the Company’s inventory is reduced for any difference between cost and estimated net realizable value of inventory that is determined to be excess, obsolete or unsellable inventory based upon assumptions about future demand and market conditions. If actual future demand for the Company’s products is less than currently forecasted, the Company may be required to write inventory down below the current carrying value. Once the carrying value of inventory is reduced, it is maintained until the product to which it relates is sold or otherwise disposed. Inventoriable shipping and handling costs are classified as a component of cost of goods sold in the consolidated statements of operations.

Property and Equipment, Net

Property and equipment, net, are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which ranges from 2 to 7 years for machinery and equipment, and 3 to 4 years for computer software, and furniture and fixtures. Buildings are depreciated over an estimated useful life of 30 years and building improvements are depreciated over estimated useful lives of 15 years. Leasehold improvements are depreciated over the shorter of the remaining lease term or the estimated useful life of the asset.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Goodwill

Goodwill is recorded when the consideration paid for a business acquisition exceeds the fair value of net tangible and intangible assets acquired. Goodwill is measured and tested for impairment annually on the last business day of the fiscal fourth quarter and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount or the Company may determine to proceed directly to the quantitative impairment test.

If the Company assesses qualitative factors and concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount or if the Company determines not to use the qualitative assessment, then a quantitative impairment test is performed. The quantitative impairment test requires comparing the fair value of the reporting unit to its carrying value, including goodwill. The Company has identified that its business operates as a single operating segment and as a single reporting unit for the purpose of goodwill impairment testing. An impairment exists if the fair value of the reporting unit is lower than its carrying value. If the fair value of the reporting unit is lower than its carrying value, the Company would record an impairment loss in the fiscal quarter in which the determination is made.

Long-Lived Assets and Intangible Assets

The Company assesses the impairment of long-lived assets and intangible assets whenever events or changes in circumstances indicate that the carrying amount of long-lived assets may not be recoverable. The Company estimates the future cash flows, undiscounted and without interest charges, expected to be generated by the assets from its use or eventual disposition. If the sum of the expected undiscounted future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Please see “Note 5 - Goodwill and Acquired Intangible Assets, Net” for further details regarding impairment of acquisition-related identified intangible assets.

Acquisition-related identified intangible assets are amortized on a straight-line basis over their estimated economic lives, except for certain customer contracts and related relationships, which are amortized using an accelerated method of amortization over the expected customer lives. In-process research and development (“IPR&D”) is not amortized until the completion of the related development.

Leases

The Company determines if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Operating lease ROU assets also include any initial direct costs and prepayments less lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. As the Company's leases do not provide an implicit rate, the Company uses its collateralized incremental borrowing rate based on the information available at the lease commencement date, including lease term, in determining the present value of lease payments. Lease expense for these leases is recognized on a straight line basis over the lease term.

Foreign Currency Transactions

The functional currency of all of the Company’s non-United States (“U.S.”) operations is the U.S. dollar. Monetary accounts maintained in currencies other than the U.S. dollar are re-measured using the foreign exchange rate at the balance sheet date. Operational accounts and nonmonetary balance sheet accounts are measured and recorded at the exchange rate in effect at the date of the transaction. The effects of foreign currency re-measurement are reported in current operations.

Revenue Recognition

Product revenue is recognized at a point in time when control of the asset is transferred to the customer. Substantially all of the Company's revenue is derived from product sales. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a product to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For product revenue, the performance obligation is deemed to be the delivery of the product and therefore, the revenue is generally recognized upon shipment to customers, net of accruals for estimated sales returns and rebates. These estimates are based on historical returns analysis and other known factors. The Company accounts for rebates by recording reductions to revenue for rebates in the same period that the related revenue is recorded. The amount of these reductions is based upon the terms agreed to with the customer. Product revenue on sales made to distributors is recognized upon shipment, net of estimated variable consideration. Variable consideration primarily consists of price discounts, price protection, rebates, and stock rotation programs and is estimated based on a portfolio approach using the expected value method derived from historical data, current economic conditions, and contractual terms.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A portion of the Company's net revenue is derived from sales through third-party logistics providers who maintain warehouses in close proximity to our customer’s facilities. Revenue from sales through these third-party logistics providers is not recognized until the product is pulled from stock by the customer.

The Company’s products are generally subject to warranty, which provides for the estimated future costs of replacement upon shipment of the product. The Company’s products carry a standard one-year warranty, with certain exceptions in which the warranty period can extend to more than one year based on contractual agreements. The warranty accrual is estimated primarily based on historical claims compared to historical revenues and assumes that the Company will have to replace products subject to a claim. From time to time, the Company becomes aware of specific warranty situations, and it records specific accruals to cover these exposures. Warranty expenses were not material for the periods presented.

Business Combinations

The Company allocates the fair value of the purchase consideration of its acquisitions to the tangible assets, liabilities, and intangible assets acquired, including IPR&D, based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. IPR&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter. When an IPR&D project is completed, the IPR&D is reclassified as an amortizable purchased intangible asset and amortized over the asset’s estimated useful life. Acquisition-related expenses and related restructuring costs are recognized separately from the business combination and are expensed as incurred.

Advertising Expense

Advertising costs are expensed as incurred. The Company recorded $0.8 million, $0.6 million and $0.8 million of advertising costs for fiscal 2022, 2021 and 2020, respectively, included in selling, general and administrative expenses in the consolidated statements of operations.

Stock-Based Compensation

Stock-based compensation is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite service vesting period. The Company amortizes stock-based compensation expense for time-based awards under the straight-line attribution method over the vesting period. Stock-based compensation expense for performance-based awards is recognized when it becomes probable that the performance conditions will be met. The Company amortizes stock-based compensation expense for performance-based awards using the accelerated method.

The fair value of each restricted stock unit is estimated based on the market price of the Company’s common stock on the date of grant less the expected dividend yield.

The Company estimates the fair value of stock purchase awards on the date of grant using the Black Scholes option-pricing model. The fair value of performance-based awards based on total shareholder return (“TSR”) and value creation (“VCA”) awards are estimated on the date of grant using a Monte Carlo simulation model.

Forfeitures are recorded when they occur. Previously recognized expense is reversed for the portion of awards forfeited prior to vesting as and when forfeitures occur.

Comprehensive Income (Loss)

Comprehensive income (loss), net of tax is comprised of net income and net change in unrealized gains and losses on cash flow hedges. For fiscal 2022, 2021 and 2020, there were no reconciling differences between net income (loss) and comprehensive income (loss).

Accounting for Income Taxes

The Company estimates its income taxes in the jurisdictions in which it operates. This process involves estimating the Company's actual tax exposure together with assessing temporary differences resulting from the differing treatment of certain items for tax return and financial statement purposes. These differences result in deferred tax assets and liabilities, which are included in the Company's consolidated balance sheets.

The Company recognizes income taxes using an asset and liability approach. This approach requires the recognition of taxes payable or refundable for the current year, and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company's consolidated financial statements or tax returns. The measurement of current and deferred taxes is based on provisions of the enacted tax law and the effects of future changes in tax laws or rates are not anticipated.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Evaluating the need for a valuation allowance on deferred tax assets requires judgment and analysis of all available positive and negative evidence, including recent earnings history and cumulative losses in recent years, reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies to determine whether all or some portion of the deferred tax assets will not be realized. We establish a valuation allowance for deferred tax assets, when it is determined that it is more likely than not that they will not be realized. Valuation allowances have been provided primarily against U.S. and state research and development credits and certain acquired net operating losses and deferred tax assets of foreign subsidiaries. A change in the assessment of the realizability of deferred tax assets may materially impact the Company's tax provision in the period in which a change occurs. Taxes due on Global Intangible Low-Taxed Income (GILTI) inclusions in U.S. are recognized as a current period expense when incurred.

As a multinational corporation, the Company conducts its business in many countries and is subject to taxation in many jurisdictions. The taxation of the business is subject to the application of various and sometimes conflicting tax laws and regulations as well as multinational tax conventions. The Company's effective tax rate is highly dependent upon the geographic distribution of the Company's worldwide earnings or losses, the tax laws and regulations in various localities, the availability of tax incentives, tax credits and loss carryforwards, and the effectiveness of the Company's tax planning strategies, including the Company's estimates of the fair value of its intellectual property. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws themselves are subject to change as a result of changes in fiscal policy, changes in legislation, and the evolution of regulations and court rulings. Consequently, taxing authorities may impose tax assessments or judgments against us that could materially affect the Company's tax liability and/or effective income tax rate.

The Company is subject to income tax audits by tax authorities in the jurisdictions in which it operates. The Company recognizes the effect of income tax positions only if these positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is more than 50% likely to be realized. Changes in judgment regarding the recognition or measurement of uncertain tax positions are reflected in the period in which the change occurs. The Company records interest and penalties related to unrecognized tax benefits in income tax expense. The calculation of the Company's tax liabilities involves the inherent uncertainty associated with complex tax laws. The Company believes it has adequately provided for in its financial statements additional taxes that it estimates may be required to be paid as a result of such examinations. While the Company believes that it has adequately provided for all tax positions, amounts asserted by tax authorities could be greater or less than its accrued position. Unpaid tax liabilities, including the interest and penalties, are released pursuant to a final settlement with tax authorities, completion of audit or expiration of various statutes of limitations. The material jurisdictions in which the Company may be subject to potential examination by tax authorities throughout the world include China, India, Israel, Singapore, Germany, and the United States.

The recognition and measurement of current taxes payable or refundable, and deferred tax assets and liabilities require that the Company make certain estimates and judgments. Changes to these estimates or judgments may have a material effect on the Company's tax provision in a future period.

Recent Accounting Pronouncements

Accounting Pronouncements Recently Adopted

In December 2019, the FASB issued an accounting standards update that simplifies the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation and modified the methodology for calculating income taxes in an interim period. It also clarifies and simplifies other aspects of the accounting for income taxes. The new standard was adopted by the Company on January 31, 2021 on a prospective basis and did not have a material effect on the Company's consolidated financial statements.

Accounting Pronouncements Not Yet Effective

In August 2020, the FASB issued an accounting standards update that simplifies the accounting for convertible debt instruments by reducing the number of accounting models and the number of embedded conversion features that could be recognized separately from the primary contract. The standard requires a convertible debt instrument to be accounted for as a single liability measured at its amortized cost as long as no other features require bifurcation and recognition as derivatives. It also made changes to the disclosures for convertible instruments and earnings-per-share guidance, among other updates. The guidance is effective for the Company beginning in the first quarter of fiscal year 2023, with early adoption permitted and permits the use of either the modified retrospective or fully retrospective method of transition. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial statements.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In October 2021, the FASB issued an accounting standards update that requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. The guidance is effective for the Company beginning in the first quarter of fiscal year 2024, with early adoption permitted. The guidance should be applied prospectively to acquisitions occurring on or after the effective date. The adoption impact of this new standard on the Company's consolidated financial statements will depend on the magnitude of future acquisitions.

Note 3 — Revenue

Disaggregation of Revenue

The majority of the Company's revenue is generated from sales of the Company’s products.

The following table summarizes net revenue disaggregated by end market (in thousands, except percentages):

			Year Ended January 29, 2022						% of Total						Year Ended January 30, 2021						% of Total						Year Ended February 1, 2020						% of Total
Net revenue by end market:
Data center			$	1,784,644					40		%				$	1,040,726					35		%				$	823,841					31		%
Carrier infrastructure			820,377						18		%				599,527						20		%				369,901						14		%
Enterprise networking			907,736						20		%				636,032						22		%				569,574						21		%
Consumer			699,985						16		%				574,627						19		%				845,825						31		%
Automotive/industrial			249,641						6		%				117,988						4		%				90,020						3		%
			$	4,462,383					100		%				$	2,968,900					100		%				$	2,699,161					100		%

The following table summarizes net revenue disaggregated by primary geographical market based on destination of shipment (in thousands, except percentages):

			Year Ended January 29, 2022						% of Total						Year Ended January 30, 2021						% of Total						Year Ended February 1, 2020						% of Total
Net revenue based on destination of shipment:
China			$	1,970,544					44		%				$	1,268,820					43		%				$	1,071,028					40		%
United States			484,042						11		%				321,448						11		%				258,827						10		%
Thailand			355,296						8		%				251,408						8		%				230,218						9		%
Malaysia			275,967						6		%				254,053						9		%				226,358						8		%
Japan			222,831						5		%				142,554						5		%				162,399						6		%
Singapore			220,809						5		%				107,573						4		%				80,120						3		%
Philippines			213,393						5		%				166,734						6		%				221,566						8		%
Others			719,501						16		%				456,310						14		%				448,645						16		%
			$	4,462,383											$	2,968,900											$	2,699,161

These destinations of shipment are not necessarily indicative of the geographic location of the Company's end customers or the country in which the Company's end customers sell devices containing the Company's products. For example, a substantial majority of the shipments made to China relate to sales to non-China based customers that have factories or contract manufacturing operations located within China.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes net revenue disaggregated by customer type (in thousands, except percentages):

			Year Ended January 29, 2022						% of Total						Year Ended January 30, 2021						% of Total						Year Ended February 1, 2020						% of Total
Net revenue by customer type:
Direct customers			$	3,314,497					74		%				$	2,213,645					75		%				$	2,041,089					76		%
Distributors			1,147,886						26		%				755,255						25		%				658,072						24		%
			$	4,462,383											$	2,968,900											$	2,699,161

Contract Liabilities

Contract liabilities consist of the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration or the amount is due from the customer. Contract liability balances are comprised of deferred revenue. The amount of revenue recognized during the year ended January 29, 2022, that was included in deferred revenue balance at January 30, 2021 was not material.

As of the end of a reporting period, some of the performance obligations associated with contracts will have been unsatisfied or only partially satisfied. In accordance with the practical expedients available in the guidance, the Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less.

Sales Commissions

The Company has elected to apply the practical expedient to expense commissions when incurred as the amortization period is typically one year or less. These costs are recorded in selling, general and administrative expenses in the consolidated statements of operations.

Note 4 — Business Combinations

Innovium

On October 5, 2021, the Company completed the acquisition of Innovium, Inc. (“Innovium”), a leading provider of networking solutions for cloud and edge data centers, in an all-stock transaction for total purchase consideration of $1.0 billion attributable to stock consideration of $994.2 million and the fair value of a previously held equity interest of $10.0 million. The Innovium acquisition was primarily intended to allow the Company to immediately participate in the fastest growing segment of the switch market with a cloud-optimized solution. In accordance with the terms of the Agreement and Plan of Merger dated August 2, 2021 (the “Innovium merger agreement”), the Company’s common stock was issued in exchange for all outstanding equity of Innovium, including shares of Innovium’s preferred and common stock, employee equity awards and warrants.

The factors contributing to the recognition of goodwill were based upon the Company’s conclusion that there are strategic and synergistic benefits that are expected to be realized from the acquisition. Goodwill recorded for the Innovium acquisition is not expected to be deductible for tax purposes.

The following table summarized the total merger consideration (in thousands):

Common stock issued or to be issued			$	971,022
Stock consideration for replacement equity awards attributable to pre-combination service			33,224
Total merger consideration			$	1,004,246

The merger consideration allocation set forth herein is preliminary and may be revised with adjustment to goodwill as additional information becomes available during the measurement period from the closing date of the acquisition to finalize such preliminary estimates. Any such revisions or changes may be material.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In accordance with U.S. GAAP requirements for business combinations, the Company allocated the fair value of the purchase consideration to the tangible assets, liabilities and intangible assets acquired, including in-process research and development (“IPR&D”), generally based on their estimated fair values. The excess purchase price over those fair values is recorded as goodwill. IPR&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter. When an IPR&D project is completed, the IPR&D is reclassified as an amortizable purchased intangible asset and amortized over the asset’s estimated useful life. The Company’s valuation assumptions of acquired assets and assumed liabilities require significant estimates, especially with respect to intangible assets. Acquisition-related costs are expensed in the periods in which such costs are incurred. See “Note 5 - Goodwill and Acquired Intangible Assets, Net” for additional information.

The purchase price allocation is as follows (in thousands):

			Previously Reported October 30, 2021 (Provisional)						Measurement Period Adjustment						January 29, 2022
Cash and cash equivalents			$	60,436					$	—					$	60,436
Inventories			69,991						—						69,991
Goodwill			470,000						(7,612)						462,388
Acquired intangible assets, net			433,000						—						433,000
Other, net			(29,181)						7,612						(21,569)
Total merger consideration			$	1,004,246					$	—					$	1,004,246

The previously reported provisional amounts presented in the table above pertained to the purchase price allocation reported in the Company’s Form 10-Q for the third quarter ended October 30, 2021. The measurement period adjustment was associated with a change in the estimate of realizability of certain deferred tax assets. The Company does not believe that the measurement period adjustment had a material impact on its consolidated statements of operations, balance sheets, or cash flows in any periods previously reported.

The Company incurred total acquisition related costs of $11.9 million which were recorded in selling, general and administrative expense in the consolidated statements of operations.

Inphi

On April 20, 2021, the Company completed the acquisition of Inphi (the “Inphi acquisition”). Inphi is a global leader in high-speed data movement enabled by optical interconnects. The Inphi acquisition was primarily intended to create an opportunity for the combined company to be uniquely positioned to serve the data-driven world, addressing high growth, attractive end markets such as cloud data center and 5G. In accordance with the terms of the Agreement and Plan of Merger and Reorganization dated as of October 29, 2020, by and among the Company and Inphi (the “Inphi merger agreement”), the Company acquired all outstanding shares of common stock of Inphi for $66 per share in cash and 2.323 shares of the Company’s common stock exchanged for each share of Inphi common stock. The merger consideration paid in cash was funded with a combination of cash on hand and funds from the Company’s debt financing. See “Note 8 - Debt” for additional information.

The factors contributing to the recognition of goodwill were based upon the Company’s conclusion that there are strategic and synergistic benefits that are expected to be realized from the acquisition. Goodwill recorded for the Inphi acquisition is not expected to be deductible for tax purposes.

The following table summarized the total merger consideration (in thousands):

Cash consideration			$	3,673,217
Common stock issued			5,917,811
Stock consideration for replacement equity awards attributable to pre-combination service			82,346
Equity component of convertible debt			244,155
Total merger consideration			$	9,917,529

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The merger consideration allocation set forth herein is preliminary and may be revised with adjustment to goodwill as additional information becomes available during the measurement period from the closing date of the acquisition to finalize such preliminary estimates. Any such revisions or changes may be material.

In accordance with U.S. GAAP requirements for business combinations, the Company allocated the fair value of the purchase consideration to the tangible assets, liabilities and intangible assets acquired, including IPR&D, generally based on their estimated fair values. The excess purchase price over those fair values is recorded as goodwill. IPR&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter. When an IPR&D project is completed, the IPR&D is reclassified as an amortizable purchased intangible asset and amortized over the asset’s estimated useful life. The Company’s valuation assumptions of acquired assets and assumed liabilities require significant estimates, especially with respect to intangible assets. Acquisition-related costs are expensed in the periods in which such costs are incurred. See “Note 5 - Goodwill and Acquired Intangible Assets, Net” for additional information.

The purchase price allocation is as follows (in thousands):

			Previously Reported May 1, 2021 (Provisional)						Measurement Period Adjustment						January 29, 2022
Cash and cash equivalents			$	72,251					$	—					$	72,251
Accounts receivable, net			99,728						—						99,728
Inventories			270,382						—						270,382
Prepaid expenses and other current assets			213,292						—						213,292
Property and equipment, net			98,528						—						98,528
Acquired intangible assets, net			4,420,000						—						4,420,000
Other non-current assets			145,856						(47,073)						98,783
Goodwill			5,628,705						57,528						5,686,233
Accounts payable and accrued liabilities			(189,807)												(189,807)
Convertible debt - short-term			(313,664)						—						(313,664)
Convertible debt - long-term			(240,317)						—						(240,317)
Other non-current liabilities			(287,425)						(10,455)						(297,880)
Total merger consideration			$	9,917,529					$	—					$	9,917,529

The previously reported provisional amounts presented in the table above pertained to the purchase price allocation reported in the Company’s Form 10-Q for the first quarter ended May 1, 2021. The measurement period adjustments were associated with deferred tax liabilities on certain purchased intangible assets, in addition to deferred tax assets as a result of changes in estimates related to finalizing Inphi’s 2020 U.S. tax return. The Company does not believe that the measurement period adjustment had a material impact on its consolidated statements of operations, balance sheets, or cash flows in any periods previously reported.

The Company incurred $50.8 million in acquisition related costs which were recorded in selling, general and administrative expense in the consolidated statements of operations. The Company also incurred $39.8 million of aggregate debt financing costs. As of January 29, 2022, $2.5 million is included in short-term debt, and $30.2 million is included in long-term debt on the accompanying consolidated balance sheets. See “Note 8 - Debt” for additional information. Additionally, the Company incurred $8.2 million of equity issuance costs, which were recorded in additional paid-in capital in the consolidated balance sheets.

Post acquisition revenue and income (loss) on a standalone basis is impracticable to determine as the Company integrated Inphi into its existing financial systems and operations in the second quarter ended July 31, 2021.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Avera

On November 5, 2019, the Company completed the acquisition of Avera, the ASIC business of GlobalFoundries. Avera is a leading provider of ASIC semiconductor solutions. The Company acquired Avera to expand its ASIC design capabilities. Total purchase consideration consisted of cash consideration paid to GlobalFoundries of $593.5 million, net of working capital and other adjustments. An additional $90 million in cash would have been paid to acquire additional assets if certain conditions were satisfied. In July 2020, GlobalFoundries and the Company agreed to terminate this requirement to acquire the additional assets.

The factors contributing to the recognition of goodwill were based upon the Company's conclusion that there are strategic and synergistic benefits that are expected to be realized from the acquisition. A portion of the goodwill recorded for the Avera acquisition is deductible for tax purposes.

The purchase price allocation is as follows (in thousands):

Inventories												$	106,465
Prepaid expenses and other current assets												17,495
Property and equipment, net												25,677
Acquired intangible assets, net												379,000
Other non-current assets												6,870
Goodwill												129,998
Accrued liabilities												(64,155)
Deferred tax liabilities												(7,200)
Other non-current liabilities												(650)
												$	593,500

In fiscal year 2020, the Company incurred total acquisition related costs of $5.7 million which were recorded in selling, general and administrative expense in the consolidated statements of operations.

Aquantia Corp

On September 19, 2019, the Company completed the acquisition of Aquantia. Aquantia is a manufacturer of high-speed transceivers which includes copper and optical physical layer products. The Company acquired Aquantia to further its position in automotive in-vehicle networking and strengthen its multi-gig ethernet PHY portfolio for enterprise infrastructure, data center and access applications. In accordance with the terms of the Agreement and Plan of Merger dated May 6, 2019, by and among the Company and Aquantia (the “Aquantia merger agreement”), the Company acquired all outstanding shares of common stock of Aquantia (the “Aquantia shares”) for $13.25 per share in cash. The merger consideration was funded with a combination of cash on hand and funds from the Company's revolving line of credit (“2018 Revolving Credit Facility”). See “Note 8 - Debt” for additional information.

The following table summarizes the total merger consideration (in thousands):

Cash consideration						$	486,669
Stock consideration for replacement equity awards attributable to pre-combination service						15,520
Total merger consideration						$	502,189

The factors contributing to the recognition of goodwill were based upon the Company's conclusion that there are strategic and synergistic benefits that are expected to be realized from the acquisition. Goodwill recorded for the Aquantia acquisition is not expected to be deductible for tax purposes.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The purchase price allocation is as follows (in thousands):

Cash and short-term investments												$	27,914
Inventory												33,900
Goodwill												226,545
Acquired intangible assets												193,000
Other non-current assets												36,172
Accrued liabilities												(21,813)
Other, net												6,471
												$	502,189

In fiscal year 2020, the Company incurred total acquisition related costs of $5.3 million which were recorded in selling, general and administrative expense in the consolidated statements of operations.

Unaudited Supplemental Pro Forma Information

The unaudited supplemental pro forma financial information presented below is for illustrative purposes only and is not necessarily indicative of the financial position or results of operations that would have been realized if the acquisitions had been completed on the date indicated, does not reflect synergies that might have been achieved, nor is it indicative of future operating results or financial position. The pro forma adjustments are based upon currently available information and certain assumptions the Company believe are reasonable under the circumstances.

The following unaudited supplemental pro forma information presents the combined results of operations for each of the periods presented, as if Innovium and Inphi had been acquired as of beginning of fiscal year 2021 and Avera and Aquantia had been acquired as of the beginning of fiscal year 2019. The unaudited supplemental pro forma information includes adjustments to amortization and depreciation for acquired intangible assets and property and equipment, adjustments to stock-based compensation expense, the purchase accounting effect on inventories acquired, interest expense, and transaction costs. For fiscal year 2021, non-recurring pro forma adjustments directly attributable to the Innovium and Inphi acquisitions in the pro forma information presented below included (i) stock-based compensation expense of $46.7 million, (ii) the purchase accounting effect of inventories acquired of $233.0 million, (iii) interest expense of $11.4 million, and (iv) transaction costs of $65.7 million. The unaudited supplemental pro forma information presented below is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the Inphi and Innovium acquisitions actually occurred at the beginning of fiscal year 2021 and the Avera and Aquantia acquisitions actually occurred at the beginning of fiscal year 2019 or of the results of our future operations of the combined business.

The unaudited supplemental pro forma financial information for the periods presented is as follows (in thousands):

						Year Ended
						January 29, 2022			January 30, 2021			February 1, 2020
Pro forma net revenue						$	4,638,476		$	3,686,021		$	3,011,550
Pro forma net income (loss)						$	(211,900)		$	(1,351,400)		$	1,532,594

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 5 — Goodwill and Acquired Intangible Assets, Net

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. In connection with the Innovium and Inphi acquisitions on October 5, 2021 and April 20, 2021, respectively, the Company recorded goodwill of $6.1 billion. In January 2022, the Company completed the acquisition of a consulting services entity located in Canada, specialized in providing ASIC/SoC IP core expertise, for purchase consideration of $41.8 million, primarily for the purpose of expanding engineering resources to address customer design opportunities, of which $25.5 million was allocated to goodwill. The carrying value of total goodwill as of January 29, 2022 and January 30, 2021 was $11.5 billion and $5.3 billion, respectively. See “Note 4 - Business Combinations” for discussion of the acquisitions and changes to the carrying value of goodwill.

The Company has identified that its business operates as a single operating segment and as a single reporting unit for the purpose of goodwill impairment testing. The Company’s annual test for goodwill impairment as of the last day of the fourth quarter of fiscal 2022 did not result in any impairment charge.

There was no activity from acquisitions or divestitures recorded to goodwill in fiscal 2022 and 2021 other than those described above.

Acquired Intangible Assets, Net

In connection with the Innovium acquisition on October 5, 2021, the Company acquired $433.0 million of intangible assets as follows (in thousands, except for weighted-average useful life as of acquisition date):

						Preliminary Estimated Asset Fair Value						Weighted-Average Useful Life (Years)
Developed technology						$	274,000					8.00
Customer contracts and related relationships						66,000						8.00
IPR&D						93,000						n/a
						$	433,000

In connection with the Inphi acquisition on April 20, 2021, the Company acquired $4.4 billion of intangible assets as follows (in thousands, except for weighted-average useful life as of acquisition date):

						Preliminary Estimated Asset Fair Value						Weighted-Average Useful Life (Years)
Developed technology						$	2,010,000					6.00
Customer contracts and related relationships						1,470,000						6.00
Order backlog						70,000						0.80
Trade name						50,000						5.00
IPR&D						820,000						n/a
						$	4,420,000

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of January 29, 2022 and January 30, 2021, net carrying amounts are as follows (in thousands, except for weighted-average remaining amortization period):

						January 29, 2022
						Gross Carrying Amounts						Accumulated Amortization and Write-Offs						Net Carrying Amounts						Weighted -Average Remaining Amortization Period (Years)
Developed technologies						$	4,744,100					$	(1,333,696)					$	3,410,404					5.17
Customer contracts and related relationships						2,184,000						(519,622)						1,664,378						5.21
Trade names						73,000						(26,198)						46,802						3.95
Order backlog						70,000						(67,162)						2,838						0.03
Total acquired amortizable intangible assets						7,071,100						(1,946,678)						5,124,422						5.17
IPR&D						1,029,000						—						1,029,000						n/a
Total acquired intangible assets						$	8,100,100					$	(1,946,678)					$	6,153,422

						January 30, 2021
						Gross Carrying Amounts						Accumulated Amortization and Write-Offs						Net Carrying Amounts						Weighted-Average Remaining Amortization Period (Years)
Developed technologies						$	2,454,000					$	(724,215)					$	1,729,785					5.54
Customer contracts and related relationships						643,000						(228,845)						414,155						5.62
Trade names						23,000						(14,240)						8,760						2.20
Total acquired amortizable intangible assets						3,120,000						(967,300)						2,152,700						5.54
IPR&D						118,000						—						118,000						n/a
Total acquired intangible assets						$	3,238,000					$	(967,300)					$	2,270,700

The Company regularly analyzes the results of its business to determine whether events or circumstances exist that indicate whether the carrying amount of the intangible assets may not be recoverable. During the second quarter of fiscal 2021, impairment charges of $50.3 million related to certain intangible assets acquired from Cavium were recognized as part of restructuring actions. The gross carrying amounts and the accumulated amortization of those impaired intangible assets were excluded from the table above. See “Note 10 - Restructuring” for additional information.

The intangible assets are amortized on a straight-line basis over the estimated useful lives, except for certain Cavium customer contracts and related relationships, which are amortized using an accelerated method of amortization over the expected customer lives in order to more closely align with the pattern of realization of economic benefits expected to be obtained. The IPR&D will be accounted for as an indefinite-lived intangible asset and will not be amortized until the underlying projects reach technological feasibility and commercial production at which point the IPR&D will be amortized over the estimated useful life. Useful lives for these IPR&D projects are expected to range between 3 to 10 years. In the event the IPR&D is abandoned, the related assets will be written off.

Amortization for acquired intangible assets was $979.4 million, $443.6 million and $368.1 million during the years ended January 29, 2022, January 30, 2021 and February 1, 2020 respectively.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table presents the estimated future amortization expense of acquired amortizable intangible assets as of January 29, 2022 (in thousands):

Fiscal Year						Amount
2023						$	1,050,897
2024						1,039,160
2025						987,134
2026						938,966
2027						787,975
Thereafter						320,290
						$	5,124,422

Note 6 — Supplemental Financial Information (in thousands)

Consolidated Balance Sheets

			January 29, 2022						January 30, 2021
Cash and cash equivalents:
Cash			$	435,885					$	633,822
Cash equivalents:
Time deposits			177,648						114,645
Cash and cash equivalents			$	613,533					$	748,467

Short-term, highly liquid investments of $177.6 million and $114.6 million as of January 29, 2022 and January 30, 2021, respectively, included in cash and cash equivalents on the accompanying consolidated balance sheets are not considered as investments because of the short-term maturity of such investments.

			January 29, 2022						January 30, 2021
Accounts receivable, net:
Accounts receivable			$	1,051,543					$	538,739
Less: Doubtful accounts			(2,960)						(2,071)
Accounts receivable, net			$	1,048,583					$	536,668

			January 29, 2022						January 30, 2021
Inventories:
Work-in-process			$	578,897					$	187,351
Finished goods			141,434						80,877
Inventories			$	720,331					$	268,228

The inventory balance at January 29, 2022 includes $38.7 million related to the remaining inventory fair value adjustment from the Innovium acquisition.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

			January 29, 2022						January 30, 2021
Property and equipment, net:
Machinery and equipment			$	895,309					$	693,689
Land, buildings, and leasehold improvements			293,579						284,532
Computer software			109,135						103,789
Furniture and fixtures			30,136						26,990
			1,328,159						1,109,000
Less: Accumulated depreciation			(865,386)						(782,875)
Property and equipment, net			$	462,773					$	326,125

The Company recorded depreciation expense of $113.5 million, $95.9 million and $83.4 million for fiscal 2022, 2021 and 2020, respectively.

			January 29, 2022						January 30, 2021
Other non-current assets:
Technology and other licenses (1)			$	490,178					$	242,244
Prepaid ship and debit			215,931						131,657
Operating right-of-use assets			142,029						101,411
Prepayments on supply capacity reservation agreements			54,587						—
Non-marketable equity investments			30,679						7,646
Other			60,911						58,611
Other non-current assets			$	994,315					$	541,569

(1)Amortization of technology and other licenses was $149.5 million, $99.3 million and $70.4 million in fiscal 2022, 2021 and 2020, respectively.

			January 29, 2022						January 30, 2021
Accrued liabilities:
Variable consideration estimates (1)			$	258,614					$	180,995
Technology license obligations			84,185						71,130
Deferred non-recurring engineering credits			71,169						37,300
Deferred revenue			38,962						16,146
Lease liabilities - current			38,151						32,461
Accrued income tax payable			23,348						2,246
Accrued interest payable			20,116						8,709
Accrued royalty			17,429						12,740
Accrued legal reserve			8,537						50,101
Other			62,050						23,788
Accrued liabilities			$	622,561					$	435,616

(1) Variable consideration estimates consist of estimated customer returns, price discounts, price protection, rebates, and stock rotation programs.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

			January 29, 2022						January 30, 2021
Other non-current liabilities:
Technology license obligations			$	304,343					$	86,241
Lease liabilities - non current			140,349						104,417
Non-current income taxes payable			34,963						22,526
Deferred tax liabilities			34,508						22,359
Other			18,984						23,310
Other non-current liabilities			$	533,147					$	258,853

Accumulated other comprehensive income (loss):

During the year ended January 29, 2022, there was no change in accumulated other comprehensive income. The changes in accumulated other comprehensive income (loss) by components for the comparative period are presented in the following table (in thousands):

															Unrealized Gain (Loss) on Cash Flow Hedges
Balance at February 1, 2020															$	—
Other comprehensive income (loss) before reclassifications															1,214
Amounts reclassified from accumulated other comprehensive income (loss)															(1,214)
Net current-period other comprehensive loss, net of tax															$	—
Balance at January 30, 2021															$	—

Consolidated Statements of Operations

			Year Ended
			January 29, 2022						January 30, 2021						February 1, 2020
Other income, net:
Gain on sale of business (1)			$	—					$	—					$	1,121,709
Currency remeasurement loss			(1,113)						(1,914)						(2,817)
Other income			3,877						4,800						3,663
Other Income, net			$	2,764					$	2,886					$	1,122,555

(1)On December 6, 2019, the Company completed the divestiture of the Wi-Fi Connectivity business to NXP USA, Inc, a subsidiary of NXP Semiconductors. Based on the terms of the agreement, the Company received sale consideration of $1.7 billion in cash proceeds. In fiscal year 2020, the Company recognized a pre-tax gain on sale of $1.1 billion in conjunction with the divestiture of the Wi-Fi Connectivity business.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Consolidated Statements of Cash Flows

			Year Ended
			January 29, 2022						January 30, 2021						February 1, 2020
Supplemental Cash Flow Information:
Cash paid for interest			$	91,202					$	54,575					$	76,506
Cash paid for income taxes, net			$	7,929					$	14,203					$	117,529
Non-Cash Investing and Financing Activities:
Non-cash consideration paid for the acquisitions			$	7,231,823					$	—					$	15,520
Purchase of software and intellectual property under license obligations			$	325,459					$	68,807					$	193,149
Unpaid purchase of property and equipment at end of year			$	20,696					$	10,061					$	23,015
Unpaid equity and debt financing costs			$	—					$	1,729					$	—

Note 7 — Fair Value Measurements

Fair value is an exit price representing the amount that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1 — Observable inputs that reflect quoted prices for identical assets or liabilities in active markets.

Level 2 — Other inputs that are directly or indirectly observable in the marketplace.

Level 3 — Unobservable inputs that are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The Company’s Level 1 assets include marketable equity investments that are classified as other non-current assets and which are valued primarily using quoted market prices. The Company’s Level 2 assets include time deposits, as the market inputs used to value these instruments consist of market yield. In addition, the severance pay fund is classified as Level 2 assets as the valuation inputs are based on quoted prices and market observable data of similar instruments.

The tables below set forth, by level, the Company’s assets and liabilities that are measured at fair value on a recurring basis. The tables do not include assets and liabilities that are measured at historical cost or any basis other than fair value (in thousands):

			Fair Value Measurements at January 29, 2022
			Level 1						Level 2						Level 3						Total
Items measured at fair value on a recurring basis:
Assets
Cash equivalents:
Time deposits			$	—					$	177,648					$	—					$	177,648
Other non-current assets:
Marketable equity investments			1,234						—						—						1,234
Severance pay fund			—						703						—						703
Total assets			$	1,234					$	178,351					$	—					$	179,585

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The carrying value of investments in non-marketable equity securities recorded to fair value on a non-recurring basis is adjusted for observable transactions for identical or similar investments of the same issuer or for impairment. These securities relate to equity investments in privately-held companies. These items measured at fair value on a non-recurring basis are classified as Level 3 in the fair value hierarchy because the value is estimated based on valuation methods using the observable transaction price at the transaction date and other unobservable inputs such as volatility, rights and obligations of the securities held. As of January 29, 2022, non-marketable equity investments had a carrying value of $30.7 million and are included in other non-current assets in the Company’s consolidated balance sheets.

			Fair Value Measurements at January 30, 2021
			Level 1						Level 2						Level 3						Total
Items measured at fair value on a recurring basis:
Assets
Cash equivalents:
Time deposits			$	—					$	114,645					$	—					$	114,645
Other non-current assets:
Severance pay fund			—						623						—						623
Total assets			$	—					$	115,268					$	—					$	115,268

There were no transfers of assets between levels in either fiscal 2022 or 2021.

Fair Value of Debt

The Company classified the 2018 Term Loan, the 2020 Term Loans, the 2023 Senior Notes, 2026 Senior Notes, 2028 Senior Notes and 2031 Senior Notes under Level 2 of the fair value measurement hierarchy. The carrying value of the 2020 Term Loans and 2018 Term Loan approximates their fair value as the 2020 Term Loans and 2018 Term Loan are carried at a market observable interest rate that resets periodically. The estimated aggregate fair value of the unsecured senior notes was $3.0 billion at January 29, 2022 and $1.1 billion as at January 30, 2021, and were classified as Level 2 as there are quoted prices from less active markets for the notes. See “Note 8 - Debt” for additional information.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 8 — Debt

Summary of Borrowings and Outstanding Debt

The following table summarizes the Company's outstanding debt at January 29, 2022 and January 30, 2021 (in thousands):

						January 29, 2022						January 30, 2021
Face Value Outstanding:
2018 Term Loan						$	—					$	200,000
2020 Term Loan - 3 Year Tranche						735,000						—
2020 Term Loan - 5 Year Tranche						853,125						—
Term Loan Total						1,588,125						200,000
4.200% MTG/MTI 2023 Senior Notes						499,952						500,000
4.875% MTG/MTI 2028 Senior Notes						499,915						500,000
1.650% 2026 Senior Notes						500,000						—
2.450% 2028 Senior Notes						750,000						—
2.950% 2031 Senior Notes						750,000						—
Senior Notes Total						2,999,867						1,000,000
Total borrowings						$	4,587,992					$	1,200,000
Less: Unamortized debt discount and issuance cost						(40,015)						(7,189)
Net carrying amount of debt						$	4,547,977					$	1,192,811
Less: Current portion (1)						63,166						199,641
Non-current portion						$	4,484,811					$	993,170

(1)As of January 29, 2022, the current portion of outstanding debt includes the 2020 Term Loan - 5 Year Tranche, which is due within twelve months. The Company intends to repay the amount with operating cash flow.

On April 20, 2021, the Company completed its acquisition of Inphi. As part of the acquisition, the Company assumed $15.7 million principal amount of Inphi’s 0.75% convertible senior notes due 2021 (the “Inphi 2021 Convertible Notes”) and $506.0 million principal amount of Inphi’s 0.75% convertible senior notes due 2025 (the “Inphi 2025 Convertible Notes,” and together with the 2021 Notes, the “Inphi Convertible Notes”). As of January 29, 2022, the Inphi Convertible Notes have been settled. See “Note 4 - Business Combinations” for more information. In connection with the acquisition, the Company entered into a series of financing arrangements from December 2020 through April 2021 as summarized below. In April 2021, the Company also terminated a $2.5 billion bridge loan commitment. This bridge loan commitment was provided by the underwriting bankers at the time of the Inphi merger agreement execution in October 2020. The bridge loan was never drawn upon. The Company recognized a write-off of $11.4 million in capitalized debt issuance costs related to the termination of the bridge loan commitment during the year ended January 29, 2022.

In December 2020, the Company executed a debt agreement to obtain a 3-year $875.0 million term loan and a 5-year $875.0 million term loan. The Company also executed a debt agreement to obtain a 5-year $750.0 million revolving credit facility in December 2020, replacing its previous $500 million revolving credit facility. On April 12, 2021, the Company completed a debt offering and issued (i) $500.0 million of Senior Notes with a 5-year term due in 2026, (ii) $750.0 million of Senior Notes with a 7-year term due in 2028, and (iii) $750.0 million of Senior Notes with a 10-year term due in 2031.

On May 4, 2021, in conjunction with the U.S. domiciliation, the Company exchanged certain existing senior notes due in 2023 and 2028 that were previously issued by the Bermuda-domiciled Marvell Technology Group Ltd. (the “MTG Senior Notes”) with like notes that are now issued by the Delaware-domiciled Marvell Technology, Inc. (the “MTI Senior Notes”). Below is further discussion of the terms of the various debt agreements.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2020 Term Loan Agreement

On December 7, 2020, the Company entered into a term loan credit agreement with a lending syndicate led by JP Morgan Chase Bank, N.A (the “2020 Term Loan Agreement”) in order to finance the merger with Inphi. The 2020 Term Loan Agreement provides for borrowings of $1.75 billion consisting of: (i) $875 million loan with a three-year term from the funding date (the “3-Year Tranche Loan”) and (ii) $875 million loan with a five-year term from the funding date (the “5-Year Tranche Loan” and, together with the 3-Year Tranche Loan, the "2020 Term Loans").

The 3-Year Tranche Loan has a stated floating interest rate which equates to reserve-adjusted LIBOR + 125 bps. The effective interest rate for the 3-Year Tranche Loan was 1.675% as of January 29, 2022. The 5-Year Tranche Loan has a stated floating interest rate which equates to reserve-adjusted LIBOR + 137.5 bps. The effective interest rate for the 5-Year Tranche Loan was 1.798% as of January 29, 2022. The 3-Year Tranche Loan does not require any scheduled principal payments prior to final maturity but does permit the Company to make early principal payments without premium or penalty. During the year ended January 29, 2022, the Company repaid $140 million of the principal outstanding of the 3-Year Tranche Loan, and wrote off $1.1 million of associated unamortized debt issuance costs. The 5-year Tranche Loan requires scheduled principal payments at the end of each fiscal quarter equal to (i) 1.25% of the aggregate principal amount on the term funding date for the first four full fiscal quarters following the term loan funding date, (ii) 2.50% of the aggregate principal amount on the term funding date for the fifth through twelfth full fiscal quarters following the term loan funding date, and (iii) 3.75% of the aggregate principal amount on the term funding date for each fiscal quarter following the twelfth full fiscal quarter following the term loan funding date. During the year ended January 29, 2022, the Company repaid $21.9 million of the principal outstanding of the 5-Year Tranche Loan.

The 2020 Term Loan Agreement requires that the Company and its subsidiaries comply with covenants relating to customary matters, including with respect to creating or permitting certain liens, entering into sale and leaseback transactions, and consolidating, merging, liquidating or dissolving. It also prohibits subsidiaries of the Company from incurring additional indebtedness, subject to certain exceptions, and requires that the Company maintain a leverage ratio financial covenant as of the end of any fiscal quarter. As of January 29, 2022, the Company has $1.6 billion Term Loan borrowings outstanding, and is in compliance with its debt covenants.

2020 Revolving Credit Facility

On December 7, 2020, the Company entered into a revolving line of credit agreement (“2020 Revolving Credit Facility”) with a lending syndicate led by JP Morgan Chase Bank, N.A for borrowings of up to $750 million. Borrowings from the 2020 Revolving Credit Facility are intended for general corporate use, which may include among other things, the financing of acquisitions, the refinancing of other indebtedness and the payment of transaction expenses related to the foregoing. The 2020 Revolving Credit Facility has a five-year term and a stated floating interest rate which equates to reserve-adjusted LIBOR plus an applicable margin. The Company may prepay any borrowings at any time without premium or penalty. As of January 29, 2022, the 2020 Revolving Credit Facility is undrawn and will be available for draw down through December 7, 2025. An unused commitment fee is payable quarterly based on unused balances at a rate that is based on the ratings of the Company's senior unsecured long-term indebtedness. This annual rate was 0.175% at January 29, 2022.

On May 4, 2021, the Company drew down $75.0 million on the 2020 Revolving Credit Facility. On July 6, 2021, the Company repaid the outstanding balance of the 2020 Revolving Credit Facility in full. On November 22, 2021, the Company drew down $90.0 million on the 2020 Revolving Credit Facility. On January 24, 2022, the Company repaid the outstanding balance of the 2020 Revolving Credit Facility in full. As of January 29, 2022, the 2020 Revolving Credit Facility is undrawn.

The 2020 Revolving Credit Facility requires that the Company and its subsidiaries comply with covenants relating to customary matters. The covenants are consistent with the 2020 Term Loan covenants discussed above.

The Company currently carries debt that relies on one-month LIBOR as the benchmark rate. The one-month LIBOR is expected to cease publication after June 30, 2023. To the extent the one-month LIBOR ceases to exist, the 2020 Term Loans and 2020 Revolving Credit Facility agreements contemplate an alternative benchmark rate without the need for any amendment thereto.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2026, 2028, and 2031 Senior Unsecured Notes

On April 12, 2021, the Company completed an offering of (i) $500.0 million aggregate principal amount of the Company’s 1.650% Senior Notes due 2026 (the “2026 Senior Notes”), (ii) $750.0 million aggregate principal amount of the Company’s 2.450% Senior Notes due 2028 (the “2028 Senior Notes”) and (iii) $750.0 million aggregate principal amount of the Company’s 2.950% Senior Notes due 2031 (the “2031 Senior Notes,” and, together with the 2026 Senior Notes and the 2028 Senior Notes, the “Senior Notes”). On October 8, 2021, the Senior Notes issued on April 12, 2021 were exchanged for new notes. The terms of the new notes issued in the exchange are substantially identical to the notes issued in April 2021, except that the new notes are registered under the Securities Act of 1933 and the transfer restrictions and registration rights applicable to the Senior Notes issued in April 2021 do not apply to the new notes.

The 2026 Senior Notes mature on April 15, 2026, the 2028 Senior Notes mature on April 15, 2028, and the 2031 Senior Notes mature on April 15, 2031. The stated and effective interest rates for the 2026 Senior Notes are 1.650% and 1.839%, respectively. The stated and effective interest rates for the 2028 Senior Notes are 2.450% and 2.554%, respectively. The stated and effective interest rates for the 2031 Senior Notes are 2.950% and 3.043%, respectively. The Company may redeem the Senior Notes, in whole or in part, at any time prior to their respective maturity at the redemption prices set forth in the indenture governing the Senior Notes. In addition, upon the occurrence of a change of control repurchase event (which involves the occurrence of both a change of control and a ratings event involving the Senior Notes being rated below investment grade), the Company will be required to make an offer to repurchase the Senior Notes at a price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest to, but excluding, the repurchase date. The indenture governing the Senior Notes also contains certain limited covenants restricting the Company’s ability to incur certain liens, enter into certain sale and leaseback transactions and merge or consolidate with any other entity or convey, transfer or lease all or substantially all of the Company’s properties or assets to another person, which, in each case, are subject to certain qualifications and exceptions. As of January 29, 2022, the Company had $2.0 billion Senior Notes borrowings outstanding.

2023 and 2028 Senior Unsecured Notes

On June 22, 2018, the Company’s Bermuda-based parent company Marvell Technology Group, Ltd. (“MTG”) completed a public offering of (i) $500.0 million aggregate principal amount of 4.200% Senior Notes due 2023 (the “MTG 2023 Notes”) and (ii) $500.0 million aggregate principal amount of 4.875% Senior Notes due 2028 (the “MTG 2028 Notes” and, together with the 2023 Notes, the “MTG Senior Notes”).

In April 2021, in conjunction with the Company’s U.S. domiciliation, the Company commenced Exchange Offers on April 19, 2021 for the outstanding $1.0 billion in aggregate principal amount of MTG Senior Notes outstanding in exchange for corresponding senior notes to be issued by the Company’s new U.S. domiciled parent Marvell Technology, Inc. (“MTI”). MTI made an offer to (i) exchange any and all of the outstanding MTG 2023 Notes for up to an aggregate principal amount of $500.0 million of new 4.200% Senior Notes due 2023 issued by MTI (the “MTI 2023 Notes”) and to (ii) exchange any and all of the outstanding MTG 2028 Notes for up to an aggregate principal amount of $500.0 million of new 4.875% Senior Notes due 2028 issued by MTI (the “MTI 2028 Notes” and, together with the MTI 2023 Notes, the “MTI Senior Notes”). Each new series of MTI Senior Notes have the same interest rate, maturity date, redemption terms and interest payment dates and are subject to substantially similar covenants as the corresponding series of the MTG Senior Notes for which they were offered in exchange.

The settlement of the Exchange Offers occurred on May 4, 2021 with $433.9 million aggregate principal amount of the MTG 2023 Notes and $479.5 million aggregate principal amount of the MTG 2028 Notes. The exchange was accounted for as a debt modification in accordance with applicable accounting guidance. On December 16, 2021, the MTI Senior Notes issued on May 4, 2021 were exchanged for new notes. The terms of the new notes issued in the exchange are substantially identical to the notes issued in May 2021, except that the new notes are registered under the Securities Act of 1933 and the transfer restrictions and registration rights applicable to the MTI Senior Notes issued in May 2021 do not apply to the new notes.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The MTI 2023 Notes mature on June 22, 2023 and the MTI 2028 Notes mature on June 22, 2028. The stated and effective interest rates for the MTI 2023 Notes are 4.200% and 4.502%, respectively. The stated and effective interest rates for the MTI 2028 Notes are 4.875% and 4.988%, respectively. The Company may redeem the MTI Senior Notes, in whole or in part, at any time prior to their maturity at the redemption prices set forth in MTI Senior Notes. In addition, upon the occurrence of a change of control repurchase event (which involves the occurrence of both a change of control and a ratings event involving the MTI Senior Notes being rated below investment grade), the Company will be required to make an offer to repurchase the MTI Senior Notes at a price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest to, but excluding, the repurchase date. The indenture governing the MTI Senior Notes also contains certain limited covenants restricting the Company’s ability to incur certain liens, enter into certain sale and leaseback transactions and merge or consolidate with any other entity or convey, transfer or lease all or substantially all of the Company’s properties or assets to another person, which, in each case, are subject to certain qualifications and exceptions.

The MTG 2023 Notes mature on June 22, 2023 and the MTG 2028 Notes mature on June 22, 2028. The stated and effective interest rates for the MTG 2023 Notes are 4.200% and 4.360%, respectively. The stated and effective interest rates for the MTG 2028 Notes are 4.875% and 4.940%, respectively. The Company may redeem the MTG Senior Notes, in whole or in part, at any time prior to their maturity at the redemption prices set forth in MTG Senior Notes.

As of January 29, 2022, the Company had $1.0 billion MTG/MTI Senior Notes borrowings outstanding.

Inphi Convertible Notes

As a result of the Inphi acquisition, the Company assumed all of Inphi’s outstanding convertible notes.

Inphi 2021 Convertible Notes

In September 2016, Inphi issued $287.5 million of 0.75% convertible senior notes due 2021. The Inphi 2021 Convertible Notes are governed by the terms of an indenture dated September 12, 2016 (the “Inphi 2021 Convertible Notes Indenture”). The Inphi 2021 Convertible Notes matured on September 1, 2021, unless earlier converted or repurchased. Interest on the Inphi 2021 Convertible Notes was payable on March 1 and September 1 of each year.

Under the Inphi 2021 Convertible Notes Indenture, on or after March 1, 2021, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes at any time. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election. The Inphi 2021 Convertible Notes are not redeemable at the Company’s option prior to maturity.

The initial conversion rate at issuance in September 2016 was 17.7508 shares of Inphi common stock per $1,000 principal amount of Inphi 2021 Convertible Notes, which represented an initial conversion price of approximately $56.34 per Inphi share. The conversion rate for the Inphi 2021 Convertible Notes is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain fundamental changes that occur prior to the maturity date, the Company will increase the conversion rate of the Inphi 2021 Convertible Notes for a holder who elects to convert in connection with such a fundamental change in certain circumstances. Upon the occurrence of certain fundamental changes, the holders of the Inphi 2021 Convertible Notes may require the Company to repurchase all or a portion of their Inphi 2021 Convertible Notes for cash at a price equal to 100% of the principal amount of the Inphi 2021 Convertible notes, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The Inphi 2021 Convertible Notes are not redeemable at the Company’s option prior to maturity.

As part of the Inphi acquisition, the Company assumed $15.7 million principal amount of Inphi’s 2021 Convertible Notes with a fair value of $48.0 million. The Inphi acquisition constituted a fundamental change under the Inphi 2021 Convertible Notes Indenture. As a result, the Inphi 2021 Convertible Notes were convertible into Inphi conversion units of 17.7522 per $1,000 in principal amount of such notes from April 20, 2021 through June 3, 2021. Based on the terms of the Inphi merger agreement, the holders of the Inphi 2021 Convertible Notes received 41.2384 shares of the Company’s common stock and $1,171.65 in cash per $1,000 in principal amount of such notes upon conversion. From June 4, 2021 through August 31, 2021, the Inphi 2021 Convertible Notes were convertible into Inphi conversion units of 17.7508 per $1,000 in principal amount of such notes. Based on the terms of the Inphi merger agreement, the holders of the Inphi 2021 Convertible Notes would receive 41.2351 shares of the Company’s common stock and $1,171.55 in cash per $1,000 in principal amount of such notes upon conversion. The Company has elected to measure the Inphi 2021 Convertible Notes at fair value.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A total of $9.6 million in aggregate principal of the Inphi 2021 Convertible Notes was settled pursuant to the Exchange Agreements (discussed below). Between April 20 and September 1, 2021, $6.1 million in aggregate principal of the Inphi 2021 Convertible Notes was converted into 0.2 million shares of the Company’s common stock and $7.1 million in cash pursuant to the contractual terms of the Inphi 2021 Convertible Notes Indenture.

The Inphi 2021 Convertible Notes matured on September 1, 2021 and the Company settled the remaining outstanding balance.

Inphi 2025 Convertible Notes

In April 2020, Inphi issued $506.0 million 0.75% convertible senior notes due 2025. The Inphi 2025 Convertible Notes are governed by an indenture dated April 24, 2020 (the “Inphi 2025 Notes Indenture”). The Inphi 2025 Convertible Notes will mature on April 15, 2025, unless earlier converted or repurchased. Interest on the Inphi 2025 Convertible Notes is payable on April 15 and October 15 of each year.

Under the Inphi 2025 Notes Indenture, the Inphi 2025 Convertible Notes are convertible at the option of the holders at any time, prior to the close of business on the business day immediately preceding October 15, 2024, only under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on June 30, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the Inphi 2025 Notes on each applicable trading day; (ii) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading per $1,000 principal amount of Inphi 2025 Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the common stock and the conversion rate on each such trading day; (iii) if the Company calls any or all of the Inphi 2025 Convertible Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (iv) upon the occurrence of specified corporate events. On or after October 15, 2024 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Inphi 2025 Convertible Notes at any time, regardless of the foregoing circumstances.

Under the Inphi 2025 Notes Indenture, upon the occurrence of certain fundamental changes, the holders of the Inphi 2025 Convertible Notes may require the Company to repurchase all or a portion of the Inphi 2025 Convertible Notes for cash at a price equal to 100% of the principal amount of the Inphi 2025 Convertible Notes, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The initial conversion rate at issuance in April 2020 was 8.0059 shares of Inphi common stock per $1,000 principal amount of Inphi 2025 Convertible Notes, which represented an initial conversion price of approximately $124.91 per Inphi share. The conversion rate for the Inphi 2025 Convertible Notes is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain fundamental changes that occur prior to the maturity date or following the Company’s issuance of a notice of redemption, the Company will, in certain circumstances, increase the conversion rate of the Inphi 2025 Convertible Notes for a holder who elects to convert in connection with such a fundamental change or notice of redemption, as the case may be.

As part of the Inphi acquisition, the Company assumed $506.0 million in principal of Inphi 2025 Convertible Notes with a fair value of $750.2 million. The Inphi acquisition constituted a fundamental change under the Inphi 2025 Convertible Notes Indenture. As a result, the Inphi 2025 Convertible Notes were convertible into Inphi conversion units of 8.595 per $1,000 in principal amount of such notes. Based on the terms of the Inphi merger agreement, the holders of the Inphi 2025 Convertible Notes would receive 19.9662 shares of the Company’s common stock and $567.27 in cash per $1,000 in principal amount of such notes upon conversion.

A total of $199.5 million in aggregate principal of the Inphi 2025 Convertible Notes was settled pursuant to the Exchange Agreements (discussed below). Between April 20 and May 1, 2021, $114.0 million in aggregate principal of the Inphi 2025 Convertible Notes was converted pursuant to the contractual terms of the Inphi 2025 Convertible Notes Indenture into 2.3 million shares of the Company’s common stock and $64.7 million in cash. Between May 2, 2021 and June 3, 2021, $192.5 million in aggregate principal of the Inphi 2025 Convertible Notes was converted pursuant to the contractual terms of the Inphi 2025 Convertible Notes Indenture into 3.8 million shares of the Company’s common stock and $109.2 million in cash.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In accounting for the Inphi 2025 Convertible Notes as of April 20, 2021, the Company separated the Inphi 2025 Convertible Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the estimated fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the fair value of the Inphi 2025 Convertible Notes as a whole. The fair value of $750.2 million was accordingly allocated between debt for $506.0 million and stockholders’ equity for $244.2 million.

As of January 29, 2022, there was no outstanding balance of Inphi 2025 Convertible Notes.

Inphi Capped Calls

In connection with the issuance of each of the Inphi Convertible Notes, Inphi entered into capped call transactions (the “Inphi 2021 Capped Calls” and the “Inphi 2025 Capped Calls,” collectively, the “Inphi Capped Calls”) in private transactions. Under the Inphi Capped Calls, Inphi purchased capped call options that in aggregate relate to 100% of the total number of shares of the Company’s common stock underlying the Inphi Convertible Notes, with a strike price approximately equal to the conversion price of the Inphi 2021 Convertible Notes and the Inphi 2025 Convertible Notes, respectively, and with a capped price equal to $73.03 per Inphi share and $188.54 per Inphi share, respectively.

The purchased Inphi Capped Calls allowed Inphi to receive shares of its common stock and/or cash from counterparties equal to the amounts of common stock and/or cash related to the excess of the market price per share of the common stock, as measured under the terms of the Inphi Capped Calls, over the strike prices of the Inphi Capped Calls during the relevant valuation period. The purchased Inphi Capped Calls were intended to reduce the potential dilution to common stock upon future conversion of the Inphi 2021 Convertible Notes and Inphi 2025 Convertible Notes by effectively increasing the initial conversion price to approximately $73.03 and $188.54, respectively, as well as to offset potential cash payments that Inphi would be required to make in excess of the principal amount of the Inphi Convertible Notes in applicable events.

The Inphi Capped Calls were separate transactions entered into by Inphi with the option counterparties, are not part of the terms of the Inphi Convertible Notes, and will not change the holders’ rights under the Inphi Convertible Notes.

In connection with the Inphi acquisition, the Company entered into unwind agreements related to the Inphi Capped Calls. Based on the terms of the unwind agreements, the Inphi Capped Calls do not qualify for equity classification. As such, the Company has classified the Inphi Capped Calls as assets and included in “prepaid expenses and other current assets” in the consolidated balance sheet. Under the unwind agreements, the Company and the counterparties agreed to settle a portion of Inphi Capped Calls for a fixed payment of $74.1 million, which were settled on April 23, 2021. The remaining Inphi Capped Calls provide for variable cash settlement based on the Company’s stock price. These capped calls qualify as derivatives and, accordingly, the Company measures these capped calls at fair value, with changes in fair value reported in earnings. The Company reports cash flows from capped calls in cash flows from financing activities. In connection with the Exchange Agreements (discussed below), a portion of the remaining Inphi Capped Calls were settled for $35.5 million on April 29, 2021. As of January 29, 2022, there was no outstanding balance of Inphi Capped Calls.

Exchange Agreements

On April 20, 2021, the Company entered into separate, privately negotiated exchange agreements (the “Exchange Agreements”) with a limited number of holders (“Noteholders”) of the Inphi Convertible Notes. Under the terms of the Exchange Agreements, the Noteholders agreed to exchange approximately $9.6 million in aggregate principal amount of Inphi 2021 Convertible Notes and $199.5 million in aggregate principal amount of Inphi 2025 Convertible Notes for a number of shares of the Company’s common stock that was partially based on a trailing daily volume-weighted average of the Company’s stock price.

The Exchange Agreements were accounted for as liabilities and measured at fair value, with changes in fair value recorded in earnings. For the three months ended May 1, 2021, the Company recognized interest expense of $5.0 million on the remeasurement of the Exchange Agreements in its consolidated statements of operations.

The Exchange Agreements were settled on April 29, 2021. In exchange for $9.6 million and $199.5 million in aggregate principal of the Inphi 2021 Convertible Notes and Inphi 2025 Convertible Notes, respectively, the Company issued a total of 7.1 million shares of its common stock to the Noteholders.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2018 Term Loan and 2018 Revolving Credit Facility

On June 13, 2018, the Company entered into a credit agreement (“2018 Credit Agreement”) with twelve lenders. The Credit Agreement provided for borrowings of: (i) up to $500.0 million in the form of a revolving line of credit (the “2018 Revolving Credit Facility”) and (ii) $900.0 million in the form of a term loan (the “2018 Term Loan”). On December 7, 2020, the 2018 Revolving Credit Facility under the 2018 Credit Agreement was terminated and replaced by the 2020 Revolving Credit Facility. On April 6, 2021, the 2018 Term Loan borrowings were repaid in full.

Interest Expense and Future Contractual Maturities

During fiscal 2022 and fiscal 2021, the Company recognized $119.0 million and $56.8 million of interest expense, respectively, in its consolidated statements of operations related to interest, amortization of debt issuance costs and accretion of discount associated with the outstanding term loans and senior notes.

As of January 29, 2022, the aggregate future contractual maturities of the Company's outstanding debt, at face value, were as follows (in thousands):

Fiscal Year						Amount
2023						$	65,625
2024						587,452
2025						844,375
2026						131,250
2027						959,375
Thereafter						1,999,915
Total						$	4,587,992

Note 9 — Leases

The Company's leases primarily include facility leases and data center leases, which are all classified as operating leases. For data center leases, the Company elected the practical expedient to account for the lease and non-lease component as a single lease component.

Lease expense and supplemental cash flow information are as follows (in thousands):

						Year Ended
						January 29, 2022						January 30, 2021						February 1, 2020
Operating lease expense						$	61,700					$	47,819					$	49,679
Cash paid for amounts included in the measurement of operating lease liabilities						$	45,078					$	36,849					$	33,161
Right-of-use assets obtained in exchange for lease obligation						$	95,363					$	26,605					$	28,928

The effect of operating lease right-of-use asset amortization of $28.9 million, $21.6 million and $20.4 million is included in changes in Other expense, net in the cash provided by operating activities section on the consolidated statements of cash flows for the fiscal year ended January 29, 2022, January 30, 2021, and February 1, 2020, respectively.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The aggregate future lease payments for operating leases as of January 29, 2022 are as follows (in thousands):

Fiscal Year						Operating Leases						Sublease Income
2023						$	43,673					$	(4,770)
2024						35,285						(5,386)
2025						26,042						(5,547)
2026						22,059						(5,714)
2027						20,822						(5,885)
Thereafter						40,924						(10,444)
Total lease payments						188,805						(37,746)
Less: imputed interest						10,305
Present value of lease liabilities						$	178,500

Average lease terms and discount rates were as follows:

						Year Ended
						January 29, 2022						January 30, 2021
Weighted-average remaining lease term (years)						5.95						5.11
Weighted-average discount rate						2.47		%				3.85%

Note 10 — Restructuring

The following table provides a summary of restructuring related charges as presented in the consolidated statements of operations (in thousands):

			Year Ended
			January 29, 2022						January 30, 2021						February 1, 2020
Cost of goods sold			$	(753)					$	9,594					$	—
Restructuring related charges			32,342						170,759						55,328
			$	31,589					$	180,353					$	55,328

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table presents details related to the restructuring related charges as presented in the consolidated statements of operations (in thousands):

			Year Ended
			January 29, 2022						January 30, 2021						February 1, 2020
Employee severance			$	24,078					$	38,499					$	31,205
Other			7,511						141,854						24,123
			$	31,589					$	180,353					$	55,328

Fiscal 2022. The Company recorded $31.6 million of restructuring related charges during its evaluation of its existing operations to increase operational efficiency, decrease costs and increase profitability. A restructuring plan was initiated during the first quarter of fiscal 2022 (the “Fiscal 2022 Plan”) in order to realign the organization and enable further investment in key priority areas as part of the integration of the acquisitions as described in “Note 4 - Business Combinations.” Restructuring charges are mainly comprised of severance and other one-time termination benefits, facility closures where sites may be redundant within the same region or no longer suitably sized for the local employee base, and other costs. The charges include $24.1 million related to the Fiscal 2022 Plan primarily from severance costs. The Company expects to complete these restructuring actions by the end of fiscal 2023.

Fiscal 2021. The Company recorded $180.4 million of restructuring and other related charges during its evaluation of its existing operations to increase operational efficiency, decrease costs and increase profitability. The charges include $119.0 million associated with the server processor product line described below and $61.4 million recorded in connection with prior acquisitions.

During the second quarter of fiscal 2021, the Company made changes to the scope of its server processor product line in response to changes in the associated market. The Company transitioned its product offering from standard server processors to the broad server market to focus only on customized server processors for a few targeted customers. This change in strategy required the Company to assess whether the carrying value of the associated assets would be recoverable. As a result of the assessment, the Company determined the carrying amount of certain impacted assets were not recoverable, which resulted in recognition of $119.0 million of restructuring related charges associated with the server processor product line during the second quarter of fiscal 2021. The charges included $50.3 million in impairment of acquired intangibles, $36.0 million in impairment of purchased IP licenses and $32.7 million in equipment and inventory impairment and other related restructuring charges.

The remaining restructuring charges of $61.4 million include approximately $36.9 million in severance and related costs and $24.5 million in other costs. The severance costs primarily relate to the employee separation costs in connection with the acquisitions. The other costs primarily relate to the remaining payments under lease obligations upon vacating certain worldwide office locations, and ongoing operating expenses of vacated facilities.

Fiscal 2020. The Company recorded $55.3 million of restructuring and other related charges in connection with the acquisitions as described in “Note 4 - Business Combinations.” Following the acquisition of Avera, the Company reviewed its financial position and operating results against the Company's strategic objectives, long-term operating targets and other operational priorities and initiated a restructuring plan in an effort to increase operational efficiency, decrease costs and increase profitability. The charges include $15.4 million recorded in connection with the Avera acquisition and $39.9 million recorded in connection with the other acquisitions.

The charges include approximately $31.2 million in severance and related costs and $24.1 million in other costs. The severance costs primarily relate to the employee separation costs in connection with the acquisitions. The other costs primarily relate to the remaining payments under lease obligations upon vacating certain worldwide office locations, and ongoing operating expenses of vacated facilities.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table sets forth a reconciliation of the beginning and ending restructuring liability balances by each major type of costs associated with the restructuring charges (in thousands):

									July 2018 Restructuring												November 2019 Restructuring												July 2020 Restructuring												Fiscal 2022 Restructuring
																					Employee Severance						Other						Employee Severance						Other						Employee Severance						Other						Employee Severance						Other																		Total
Balance at February 1, 2020																					$	916					$	993					$	12,312					$	207					$	—					$	—					$	—					$	—																	$	14,428
Charges																					24,158						23,928						3,170						(23)						12,423						117,955						—						—																		181,611
Net Cash payments																					(22,751)						(6,655)						(15,323)						(184)						(9,309)						(2,792)						—						—																		(57,014)
Non-cash Items																					—						(16,097)						—						—						—						(112,128)						—						—																		(128,225)
Balance at January 30, 2021																					2,323						2,169						159						—						3,114						3,035						—						—																		10,800
Charges																					(518)						8,558						(23)						—						(316)						(1,047)						24,137						798																		31,589
Net Cash payments																					(1,417)						(3,323)						—						—						(2,536)						(509)						(22,041)						(798)																		(30,624)
Non-cash items																					—						(6,200)						—						—						—						—												—																		(6,200)
Balance at January 29, 2022																					388						1,204						136						—						262						1,479						2,096						—																		5,565
Less: non-current portion																					—						947						—						—						—						294						—						—																		1,241
Current portion																					$	388					$	257					$	136					$	—					$	262					$	1,185					$	2,096					$	—																	$	4,324

The current and non-current portions of the restructuring liability at January 29, 2022 of $4.3 million and $1.2 million are included as a component of accrued liabilities and other non-current liabilities respectively in the accompanying consolidated balance sheets.

Note 11 — Commitments and Contingencies

Warranty Obligations

The Company’s products carry a standard one-year warranty with certain exceptions in which the warranty period can extend to more than one year based on contractual agreements. The Company’s warranty expense has not been material in the periods presented.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Commitments

The Company’s commitments primarily consist of wafer purchase obligations with foundry partners, supply capacity reservation payment commitments with foundries and test & assembly partners, and technology license fee payment obligations.

Total future unconditional purchase commitments as of January 29, 2022, are as follows (in thousands):

Fiscal Year						Purchase Commitments to Foundries and Test & Assembly Partners						Technology License Fees
2023						$	1,087,564					$	171,120
2024						453,609						149,807
2025						521,485						106,340
2026						484,100						32,533
2027						301,937						34,490
Thereafter						326,393						193,501
Total unconditional purchase commitments						$	3,175,088					$	687,791

Technology license fees include the liabilities under agreements for technology licenses between the Company and various vendors.

Under the Company’s manufacturing relationships with its foundry partners, cancellation of outstanding purchase orders is allowed but requires payment of all costs and expenses incurred through the date of cancellation.

The Company entered into manufacturing supply capacity reservation agreements with foundries and test & assembly suppliers this fiscal year due to the current global supply shortage environment. Under these arrangements, the Company agreed to pay capacity fees or refundable deposits to the suppliers in exchange for reserved manufacturing production capacity over the term of the agreements, which ranges from four to ten years. In addition, the Company committed to certain purchase levels that were in line with the capacity reserved. If the Company does not meet the purchase level commitments, the agreements either require the Company to pay a fee for the difference between the actual purchases and the purchase commitment or lose priority to reserved capacity for a period of time. The Company currently estimates that it has agreed to purchase level commitments of at least $2.3 billion of wafers, substrates, and other manufacturing products for the fiscal years 2023 through 2032 under the capacity reservation agreements. In addition, total fees and refundable deposits payable under these arrangements are $218.8 million in fiscal years 2023 through 2026. Such purchase commitments are summarized in the preceding table.

In September 2021, the Company entered into an IP licensing agreement with a vendor which provides complete access to the vendor’s IP portfolio for 10 years. The arrangement provides access to IP over the term of the contract, including existing IP, as well as IP in development, and to be developed in the future. The contract provides support and maintenance over the term of the contract as well. Aggregate fees of $354 million are payable quarterly over the contract term.

Contingencies and Legal Proceedings

The Company currently is, and may from time to time become, a party to claims, lawsuits, governmental inquiries, inspections or investigations and other legal proceedings (collectively, “Legal Matters”) arising in the course of its business. Such Legal Matters, even if not meritorious, could result in the expenditure of significant financial and managerial resources.

The Company is currently unable to predict the final outcome of its pending Legal Matters and therefore cannot determine the likelihood of loss or estimate a range of possible loss, except with respect to amounts where it has determined a loss is both probable and estimable and has made an accrual. The Company evaluates, at least on a quarterly basis, developments in its Legal Matters that could affect the amount of any accrual, as well as any developments that would result in a loss contingency to become both probable and reasonably estimable. The ultimate outcome of any Legal Matter involves judgments, estimates and inherent uncertainties. An unfavorable outcome in a Legal Matter, particularly in a patent dispute, could require the Company to pay damages or could prevent the Company from selling some of its products in certain jurisdictions. While the Company cannot predict with certainty the results of the Legal Matters in which it is currently involved, the Company does not expect that the ultimate costs to resolve these Legal Matters will individually or in the aggregate have a material adverse effect on its financial condition, however, there can be no assurance that the current or any future Legal Matters will be resolved in a manner that is not adverse to the Company’s business, financial condition, results of operations or cash flows.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In the fourth quarter of fiscal 2021, the Company became involved in discussions with another party to resolve disputes that ultimately concluded with settlement by the Company in the amount of $36.0 million which was accrued at the time such offer of settlement was determined by management. Such amount is presented separately on the accompanying consolidated statement of operations for the fiscal year ended January 30, 2021.

Indemnities, Commitments and Guarantees

During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities may include indemnities for general commercial obligations, indemnities to various lessors in connection with facility leases for certain claims arising from such facility or lease, and indemnities to directors and officers of the Company to the maximum extent permitted under the laws of Delaware. In addition, the Company has contractual commitments to various customers, which could require the Company to incur costs to repair an epidemic defect with respect to its products outside of the normal warranty period if such defect were to occur. The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite. Some of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential future payments that the Company could be obligated to make. In general, the Company does not record any liability for these indemnities, commitments and guarantees in the accompanying consolidated balance sheets as the amounts cannot be reasonably estimated and are not considered probable. The Company does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable and estimable.

Intellectual Property Indemnification

In addition to the above indemnities, the Company has agreed to indemnify certain customers for claims made against the Company’s products where such claims allege infringement of third-party intellectual property rights, including, but not limited to, patents, registered trademarks, and/or copyrights. Under the aforementioned indemnification clauses, the Company may be obligated to defend the customer and pay for the damages awarded against the customer as well as the attorneys’ fees and costs under an infringement claim. The Company’s indemnification obligations generally do not expire after termination or expiration of the agreement containing the indemnification obligation. Generally, but not always, there are limits on and exceptions to the Company’s potential liability for indemnification. Historically the Company has not made significant payments under these indemnification obligations and the Company cannot estimate the amount of potential future payments, if any, that it might be required to make as a result of these agreements. The maximum potential amount of any future payments that the Company could be required to make under these indemnification obligations could be significant.

Note 12 — Stockholders’ Equity

Preferred and Common Stock

Under the terms of the Company’s Certificate of Incorporation, the Board of Directors may determine the rights, preferences, and terms of the Company’s authorized but unissued shares of preferred stock.

As of January 29, 2022, the Company is authorized to issue 8.0 million shares of $0.002 par value preferred stock and 1.25 billion shares of $0.002 par value common stock. As of January 29, 2022, and January 30, 2021, no shares of preferred stock were outstanding.

In June 2019, the Company executed a funded research and development agreement with a business partner. In conjunction with the agreement, the Company issued a warrant to purchase 9.0 million of the Company's common stock, subject to certain vesting and exercise conditions.

Restricted Stock Unit Withholdings

For the years ended January 29, 2022 and January 30, 2021, the Company withheld approximately 4.8 million and 3.1 million shares, or $299.9 million and $108.1 million, of common stock, respectively, in settlement of employee tax withholding obligations due upon the vesting of restricted stock.

Cash Dividends on Shares of Common Stock

During fiscal 2022, the Company declared and paid cash dividends of $0.24 per common stock, or $191.0 million, on the Company’s outstanding common stock. During fiscal 2021, the Company declared and paid cash dividends of $0.24 per common stock, or $160.6 million, on the Company’s outstanding common stock.

Any future dividends will be subject to the approval of the Company's Board of Directors.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On March 2, 2022, the Company announced that its Board of Directors declared a cash dividend of $0.06 per share payable on April 27, 2022 to stockholders of record as of April 8, 2022.

Stock Repurchase Program

On November 17, 2016, the Company announced that its Board of Directors authorized a $1.0 billion stock repurchase plan. The newly authorized stock repurchase program replaced in its entirety the prior $3.25 billion stock repurchase program. On October 16, 2018, the Company announced that its Board of Directors authorized a $700 million addition to the balance of its existing stock repurchase plan. The Company intends to effect stock repurchases in accordance with the conditions of Rule 10b-18 under the Exchange Act, but may also make repurchases in the open market outside of Rule 10b-18 or in privately negotiated transactions. The stock repurchase program is subject to market conditions, legal rules and regulations, and other factors, and does not obligate the Company to repurchase any dollar amount or number of shares of its common stock and the repurchase program may be extended, modified, suspended or discontinued at any time.

The Company temporarily suspended the stock repurchase program in late March 2020 to preserve cash during the COVID-19 pandemic. The Company is focused on reducing its debt and de-levering its balance sheet. As a result, the Company did not repurchase any stock during fiscal 2022. The Company repurchased 1.3 million shares of its common stock for $25.2 million and 14.5 million shares of its common stock for $364.3 million in cash during fiscal 2021 and 2020, respectively. The repurchased shares of stock were retired immediately after the repurchases were completed. The Company records all repurchases, as well as investment purchases and sales, based on their trade date. As of January 29, 2022, a total of 308.1 million shares of stock have been repurchased to date under the Company’s stock repurchase program for a total $4.3 billion in cash and there was $564.5 million remaining available for future stock repurchases.

A summary of the stock repurchase activity under the stock repurchase program, reported based on the trade date, is summarized as follows (in thousands, except per-share amounts):

			Shares Repurchased						Weighted- Average Price per Share						Amount Repurchased
Cumulative balance at February 2, 2019			292,406						$	13.27					$	3,880,531
Repurchase of common stock under the stock repurchase program			14,486						$	25.15					$	364,272
Cumulative balance at February 1, 2020			306,892						$	13.83					$	4,244,803
Repurchase of common stock under the stock repurchase program			1,251						$	20.14					$	25,202
Cumulative balance at January 30, 2021			308,143						$	13.86					$	4,270,005
Repurchase of common stock under the stock repurchase program			—						$	—					$	—
Cumulative balance at January 29, 2022			308,143						$	13.86					$	4,270,005

Note 13— Employee Benefit Plans

Employee Stock Compensation Plans

1995 Stock Option Plan

In April 1995, the Company adopted the 1995 Stock Option Plan (the “Option Plan”). The Option Plan, as amended from time to time, had 383.4 million common stock reserved for issuance thereunder as of January 29, 2022. Options granted under the Option Plan generally have a term of 10 years and generally must be issued at prices equal to the fair market value of the stock on the date of grant and such options may be subject to vesting The Company can also grant other types of stock awards, which may be subject to vesting. Generally, the Company grants restricted stock unit (“RSU”) awards. RSU awards are denominated in shares of stock, but may be settled in cash or shares upon vesting, as determined by the Company at the time of grant. Awards under the Option Plan generally vest over 3 to 4 years.

As of January 29, 2022, approximately 74.6 million shares remained available for future grants under the Option Plan.

Equity awards granted under the Option Plan include time-based RSUs as well as RSUs that vest based on the achievement of performance-based criteria i.e. Company financial goals (“Financial Performance RSU”), or based on achievement of market-based goals i.e. relative total shareholder return (“TSR RSUs”), or stock price goals (“Value Creation Awards” or “VCA RSUs”).

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Prior to fiscal year 2020, the Company granted Financial Performance RSUs to each of its executive officers when they joined the Company, and as an annual refresh grant to all executive officers and other Vice Presidents in April of each fiscal year. The Financial Performance RSUs had a three-year service requirement. The number of shares to be earned could be 0% to 200% of target and was based on the achievement of certain financial operating metrics to be measured as of the end of the second fiscal year of the three-year vesting term. Shares granted under these Financial Performance RSUs are reported in the table presented below as “Performance-Based” based on 100% expected achievement.

In addition, the Company grants TSR RSUs to its executive officers that newly join the Company, and as an annual refresh grant to all executive officers and other Vice Presidents, usually in April of each fiscal year. Prior to fiscal year 2020, TSR RSUs were measured based on stock performance as compared to that of companies on the Philadelphia Semiconductor Sector over a performance period defined in the award. The number of shares to be earned can be 0% to 150% of target and is based on the achievement of performance objectives relating to relative total shareholder return of the Company’s common stock. Beginning in fiscal year 2020, the S&P 500 Index serves as the benchmark index. The TSR RSUs have a three year service vesting requirement. The number of shares to be earned can be 0% to 200% of target and is based on the achievement of performance objectives relating to relative total shareholder return of the Company's common stock. These TSR RSUs are reported in the table presented below as “Market-Based” awards based on 100% expected achievement.

In fiscal year 2020, the Company issued Value Creation Awards that are based on achievement of the Company's stock price target over a specified performance period, also referred to as VCA RSUs. The VCA RSU will be earned if the Company's average closing trading stock price over 100-calendar days equals or exceeds a certain target price. 100% of the award will vest on the 1-year anniversary of the achievement. The grant will be forfeited if the market-based condition is not achieved. These VCA RSUs are reported in the table presented below as “Market-Based” awards based on 100% expected achievement. During fiscal year 2021, the performance metrics were achieved. The awards vested on the 1-year anniversary of the achievement in November 2021.

In December 2017, the Company’s Executive Compensation Committee approved a deferred stock program, whereby executives of the Company have the option, beginning in 2018, to defer the settlement of time-based and performance-based restricted stock units granted under the Option Plan to a future date. In June 2021, the Company extended the stock deferral program to members of the Board of Directors. A deferral election is irrevocable after the annual submission deadline. The shares of common stock underlying the deferred grants will be distributed at the earliest of the employee’s specified future settlement date, not to be earlier than 2023, or upon separation from service, a change in control, or death or disability.

Cavium Acquisition

Following the Cavium acquisition and in accordance with the Cavium merger agreement, certain outstanding options to purchase shares of Cavium common stock and certain restricted stock units with respect to Cavium common stock, each granted under Cavium 2016 Equity Incentive Plan (“Cavium 2016 EIP”), Cavium 2007 Equity Incentive Plan (“Cavium 2007 EIP”) and QLogic 2005 Performance Incentive Plan, as assumed by Cavium effective August 16, 2016 (“QLogic 2005 Plan”), (and collectively, with the Cavium 2016 EIP and the Cavium 2007 EIP, the “Cavium Plans”), were assumed by the Company and converted into options to purchase common stock of the Company and restricted stock units with respect to common stock of the Company, respectively. Marvell Technology Group Ltd. filed a registration statement on July 6, 2018 to register 15,824,555 common stock of the Company, issuable under the Cavium Plans, comprised of 2,535,940 common stock issuable pursuant to outstanding but unexercised options under the Cavium Plans and 13,288,615 common stock issuable pursuant to outstanding unvested restricted stock units under the Cavium Plans. On April 20, 2021, Marvell Technology, Inc. filed a new registration statement to cover any shares remaining under the plan.

Cavium 2016 EIP

The Cavium 2016 EIP was adopted by Cavium on June 15, 2016 and was intended as the successor to and continuation of Cavium 2007 EIP. The Cavium 2016 EIP provided for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards and other stock awards, which may be granted to employees, directors and consultants. Awards under the Cavium 2016 EIP generally vest over four years and expire seven to ten years from the date of grant. Following the effective date, no additional awards were granted under the Cavium 2007 EIP.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Cavium 2007 EIP

Cavium adopted the Cavium 2007 EIP in May 2007 upon completion of its initial public offering. The Cavium 2007 EIP provided for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards, and other forms of equity compensation and performance cash awards, all of which may be granted to employees (including officers), directors, and consultants or affiliates. Awards granted under the Cavium 2007 EIP vest at the rate specified by the plan administrator, for stock options, typically with 1/8th of the shares vesting six months after the date of grant and 1/48th of the shares vesting monthly thereafter over the next three and one half years and for restricted stock unit awards typically with quarterly vesting over four years. Awards expire seven to ten years from the date of grant.

QLogic 2005 Plan

The QLogic 2005 Plan was assumed and registered by Cavium upon its completion of acquisition of QLogic Corporation on August 16, 2016. The QLogic 2005 Plan provided for the issuance of restricted stock unit awards, incentive and non-qualified stock options, and other stock-based incentive awards. Restricted stock unit awards granted pursuant to the QLogic 2005 Plan to employees subject to a service condition generally vest over four years from the date of grant. Stock options granted pursuant to the QLogic 2005 Plan to employees have ten-year terms and generally vest over four years from the date of grant.

Cavium Acquisition-related Equity Awards

The awards under the Cavium Plans assumed by the Company in the Cavium acquisition were measured at the acquisition date based on the estimated fair value of $357.1 million. A portion of that fair value, $68.9 million, which represented the pre-acquisition service provided by employees to Cavium, was included in the total consideration transferred as part of the acquisition. As of the acquisition date, the remaining portion of the fair value of those awards was $288.2 million, representing post-acquisition stock-based compensation expense that will be recognized as these employees provide service over the remaining vesting periods.

Aquantia Plans Assumed

In accordance with the Aquantia merger agreement, certain outstanding options to purchase shares of Aquantia common stock and certain restricted stock units with respect to Aquantia common stock, each granted under Aquantia 2017 Equity Incentive Plan (“Aquantia 2017 EIP”), Aquantia 2015 Equity Incentive Plan (“Aquantia 2015 EIP”) and Aquantia 2004 Equity Incentive Plan (“Aquantia 2004 EIP”), the “Aquantia Plans” were assumed by the Company and converted into options to purchase common stock of the Company and restricted stock units with respect to common stock of the Company, respectively. Marvell Technology Group Ltd. filed a registration statement on September 19, 2019 to register 2,128,823 common stock of the Company, issuable under the Aquantia plans, comprised of 805,965 common stock issuable pursuant to outstanding but unexercised options under the Aquantia Plans and 1,322,858 common stock issuable pursuant to outstanding unvested restricted stock units under the Aquantia Plans. On April 20, 2021, Marvell Technology, Inc. filed a new registration statement to cover any shares remaining under the plan.

Aquantia Acquisition-related Equity Awards

The awards under the Aquantia Plans assumed by the Company in the Aquantia acquisition were measured at the acquisition date based on the estimated fair value of $54.1 million. A portion of that fair value, $21.5 million, which represented the pre-acquisition service provided by employees to Aquantia, was included in the total consideration transferred as part of the acquisition. As of the acquisition date, the remaining portion of the fair value of those awards was $32.6 million, representing post-acquisition stock-based compensation expense that will be recognized as these employees provide service over the remaining vesting periods.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Inphi Acquisition-related Equity Awards and the Inphi 2010 EIP

Following the Inphi acquisition and in accordance with the Inphi merger agreement, certain outstanding options to purchase shares of Inphi common stock and certain restricted stock units with respect to Inphi common stock, each granted under the Inphi Amended and Restated 2010 Stock Incentive Plan (“Inphi 2010 EIP”), were assumed by the Company and converted into options to purchase common stock of the Company and restricted stock units with respect to common stock of the Company, respectively. The Company filed a registration statement on April 20, 2021 to register 10,301,589 common stock of the Company, issuable under the Inphi 2010 EIP, comprised of 127,249 common stock issuable pursuant to outstanding but unexercised options under the Inphi 2010 EIP, 10,040,693 common stock issuable pursuant to outstanding unvested restricted stock units under the Inphi 2010 EIP, and 133,647 common stock issuable pursuant to outstanding unvested performance stock units under the Inphi 2010 EIP.

The Inphi 2010 EIP was adopted by Inphi on June 7, 2010. The 2010 Plan provided for the grants of restricted stock, stock appreciation rights and stock unit awards to employees, non-employee directors, advisors and consultants. Awards under the Inphi 2010 EIP generally vest over 3 to 4 years.

The awards under the Inphi 2010 EIP assumed by the Company in the Inphi acquisition were measured at the acquisition date based on the estimated fair value of $589.7 million. A portion of that fair value, $161.7 million, which represented the pre-acquisition service provided by employees to Inphi, was included in the total consideration transferred as part of the acquisition. As of the acquisition date, the remaining portion of the fair value of those awards was $428.0 million, representing post-acquisition stock-based compensation expense that will be recognized as these employees provide service over the remaining vesting periods.

Innovium Acquisition-related Equity Awards and the Innovium 2015 EIP

Following the Innovium acquisition and in accordance with the Innovium merger agreement, certain outstanding options to purchase shares of Innovium common stock and certain restricted stock units with respect to Innovium common stock, each granted under the Innovium Amended and Restated 2015 Stock Incentive Plan (“Innovium 2015 EIP”), were assumed by the Company and converted into options to purchase common stock of the Company and restricted stock units with respect to common stock of the Company, respectively. The Company filed a registration statement on October 5, 2021 to register 1,232,805 common stock of the Company, issuable under the Innovium 2015 EIP, comprised of 421,648 common stock issuable pursuant to outstanding but unexercised options under the Innovium 2015 EIP and 811,157 common stock issuable pursuant to outstanding unvested restricted stock units under the Innovium 2015 EIP.

The Innovium 2015 EIP was adopted by Innovium on January 2015 and amended and restated in September 2020. The Innovium 2015 EIP provided for the grants of restricted stock, stock appreciation rights and stock unit awards to employees, non-employee directors, advisors and consultants. Awards under the Innovium 2015 EIP generally vest over 3 to 4 years.

The awards under the Innovium 2015 EIP assumed by the Company in the Innovium acquisition were measured at the acquisition date based on the estimated fair value of $80.9 million. A portion of that fair value, $39.8 million, which represented the pre-acquisition service provided by employees to Innovium, was included in the total consideration transferred as part of the acquisition. As of the acquisition date, the remaining portion of the fair value of those awards was $41.1 million, representing post-acquisition stock-based compensation expense that will be recognized as these employees provide service over the remaining vesting periods.

Outside Director Equity Compensation Policy

In September 2016, the Company’s Board of Directors approved the termination of the 2007 Directors’ Stock Incentive Plan, that was initially adopted in October 2007, and it approved a new Outside Director Equity Compensation Policy that governs the grant of equity awards to non-employee directors under the Option Plan. At the annual meeting of stockholders held in June 2015, the stockholders approved an amendment to the Option Plan to enable a full range of awards to be granted to non-employee directors. Under the current Outside Director Compensation Policy, each outside director, upon appointment to fill a vacancy on the board or in connection with election at an annual meeting of stockholders, will be granted an RSU award under the Option Plan for a number of shares with an aggregate fair market value equal to $235,000 on the grant date. In no event shall an outside director be awarded an annual RSU award for more than 20,000 shares. The RSU award vests 100% on the earlier of the date of the next annual meeting of stockholders or the one-year anniversary of the date of grant.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Employee Stock Purchase Plan

Under the 2000 Employee Stock Purchase Plan, as amended and restated on April 2, 2021 (the “ESPP”), participants purchase the Company’s stock using payroll deductions, which may not exceed 15% of their total cash compensation. Pursuant to the terms of the current ESPP, the “look-back” period for the stock purchase price is 24 months. Offering and purchase periods begin on December 8 and June 8 of each year. Participants enrolled in a 24-month offering period will continue in that offering period until the earlier of the end of the offering period or the reset of the offering period. A reset occurs if the fair market value of the Company’s common stock on any purchase date is less than it was on the first day of the offering period. Participants in a 24-month offering period will be granted the right to purchase common stock at a price per share that is 85% of the lesser of the fair market value of the shares at (i) the participant’s entry date into the two-year offering period or (ii) the end of each six-month purchase period within the offering period.

Under the ESPP, a total of 2.4 million shares were issued in fiscal 2022 at a weighted-average price of $31.96 per share, a total of 5.0 million shares were issued in fiscal 2021 at a weighted-average price of $14.36 per share, and a total of 5.2 million shares were issued in fiscal 2020 at a weighted-average price of $13.25 per share. As of January 29, 2022, there was $52.1 million of unamortized compensation cost related to the ESPP.

As of January 29, 2022, approximately 46.2 million shares remained available for future issuance under the ESPP.

Summary of Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense (in thousands):

			Year Ended
			January 29, 2022						January 30, 2021						February 1, 2020
Cost of goods sold			$	31,081					$	16,320					$	13,759
Research and development			273,247						150,867						157,054
Selling, general and administrative			173,217						74,352						71,996
Total stock-based compensation			$	477,545					$	241,539					$	242,809

The income tax benefit recognized from stock-based compensation expense was $71.8 million for the year ended January 29, 2022. There were no income tax benefits recognized from stock-based compensation expense in the year ended January 30, 2021 and February 1, 2020, respectively. Stock-based compensation capitalized in inventory was $18.4 million at January 29, 2022, $3.8 million at January 30, 2021 and $4.1 million at February 1, 2020.

The income tax benefit related to equity awards vested or exercised was $63.0 million during the year ended January 29, 2022. There were no income tax benefits related to equity awards vested or exercised in the year ended January 30, 2021 and February 1, 2020, respectively.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Restricted Stock and Stock Unit Awards

A summary of restricted stock unit activity, which includes time-based and performance-based or market-based restricted stock units, is as follows (in thousands, except per-share amounts):

			Time-Based												Performance-Based															Market-Based												Total
			Number of Shares						Weighted- Average Grant Date Fair Value						Number of Shares									Weighted- Average Grant Date Fair Value						Number of Shares						Weighted- Average Grant Date Fair Value						Number of Shares						Weighted- Average Grant Date Fair Value
Balance at February 2, 2019			19,045						$	19.15					948									$	16.58					1,178						$	15.40					21,171						$	18.82
Assumed upon acquisition [3]			1,341						$	25.61					—									$	—					—						$	—					1,341						$	25.61
Granted			9,340						$	23.36					288			[1]						$	13.90					3,621			[2]			$	15.39					13,249						$	20.98
Vested			(10,781)						$	20.01					(576)									$	13.90					(713)						$	11.62					(12,070)						$	19.23
Canceled/Forfeited			(3,661)						$	20.57					(149)									$	17.86					(173)						$	21.12					(3,983)						$	20.49
Balance at February 1, 2020			15,284						$	21.34					511									$	17.71					3,913						$	15.83					19,708						$	20.15
Granted			7,437						$	26.18					143			[1]						$	14.13					989			[2]			$	33.35					8,569						$	26.80
Vested			(9,287)						$	21.28					(390)									$	14.11					(328)						$	14.60					(10,005)						$	20.79
Canceled/Forfeited			(2,090)						$	22.89					(4)									$	21.32					(296)						$	18.86					(2,390)						$	22.39
Balance at January 30, 2021			11,344						$	24.27					260									$	21.06					4,278						$	19.77					15,882						$	23.00
Assumed upon acquisition [3]			10,851						$	46.40					134									$	45.67					—						$	—					10,985						$	46.39
Granted			6,717						$	55.47					145			[1]						$	65.36					733			[2]			$	51.85					7,595						$	55.31
Vested			(9,687)						$	32.34					(134)									$	45.67					(2,908)						$	12.50					(12,729)						$	27.95
Canceled/Forfeited			(2,027)						$	36.61					(260)									$	21.06					(63)						$	35.19					(2,350)						$	34.84
Balance at January 29, 2022			17,198						$	44.42					145									$	65.36					2,040						$	41.18					19,383						$	44.23

[1] Amount represents the number of restricted stock unit goal shares.

[2] Amount represents the target number of restricted stock units at grant date and restricted stock unit goal shares, including 733 TSR RSU shares in fiscal 2022, 989 TSR RSU shares in fiscal 2021 and 824 TSR RSU shares and 2,797 VCA RSU shares in fiscal 2020.

[3] See “Note 4 - Business Combinations” for additional information.

The aggregate intrinsic value of restricted stock units expected to vest as of January 29, 2022 was $1.3 billion. The number of restricted stock units that are expected to vest is 19.4 million shares. The Company’s closing stock price of $66.32 as reported on the Nasdaq Global Select Market as of January 29, 2022 was used to calculate the aggregate intrinsic value for the restricted stock units.

As of January 29, 2022, unamortized compensation expense related to restricted stock units was $606.0 million. The unamortized compensation expense for restricted stock units will be amortized on a straight-line basis and is expected to be recognized over a weighted-average period of 1.67 years.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Stock Option Awards

Option Plan and Stock Award Activity

Stock option activity under the Company’s Option Plan and other stock incentive plans mentioned above (excluding the ESPP) is included in the following table (in thousands, except for per share amounts):

			Number of Shares						Weighted- Average Exercise Price
Balance at February 2, 2019			9,624						$	12.87
Assumed upon acquisition*			808						$	9.20
Granted			—						$	—
Exercised			(6,178)						$	12.67
Canceled/Forfeited			(37)						$	13.57
Balance at February 1, 2020			4,217						$	12.44
Granted			—						$	—
Exercised			(1,301)						$	11.63
Canceled/Forfeited			(21)						$	12.88
Balance at January 30, 2021			2,895						$	12.81
Assumed upon acquisition*			549						$	6.97
Granted			—						$	—
Exercised			(889)						$	10.43
Canceled/Forfeited			(110)						$	9.80
Balance at January 29, 2022			2,445						$	12.51
Vested or expected to vest at January 29, 2022			2,445						$	—

• See “Note 4 - Business Combinations” for more information.

For stock options vested and expected to vest at January 29, 2022, the aggregate intrinsic value was $131.5 million. For stock options exercisable at January 29, 2022, the aggregate intrinsic value was $129.2 million. The aggregate intrinsic value of stock options exercised during fiscal 2022, 2021 and 2020 was $43.3 million, $25.1 million and $70.5 million respectively. The Company’s closing stock price of $66.32 as reported on the Nasdaq Global Select Market as of January 29, 2022 was used to calculate the aggregate intrinsic value for all in-the-money options.

Outstanding options and exercisable options information by range of exercise prices as of January 29, 2022 was as follows:

												Outstanding Options																		Exercisable Options
Range of Exercise Prices												Number of Shares (in thousands)						Weighted- Average Remaining Contractual Term (in years)						Weighted- Average Exercise Price						Number of Shares (in thousands)						Weighted- Average Exercise Price
$	2.38					$	10.31					312						4.11						$	6.75					284						$	6.83
$	10.76					$	10.76					767						1.24						$	10.76					767						$	10.76
$	10.89					$	13.96					234						2.79						$	12.55					229						$	12.52
$	14.35					$	14.35					496						3.28						$	14.35					496						$	14.35
$	14.45					$	22.27					636						2.74						$	16.01					629						$	15.98
Total												2,445						2.56						$	12.51					2,405						$	12.57

As of January 29, 2022, the unamortized compensation expense for stock options was $0.4 million. The unamortized compensation expense for options will be amortized on a straight-line basis and is expected to be recognized over a weighted-average period of 0.61 years.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Valuation of Employee Stock-Based Awards

The expected volatility for awards granted during fiscal 2022, 2021 and 2020 was based on historical stock price volatility.

The expected dividend yield is calculated by dividing the current annualized dividend by the closing stock price on the date of grant of the option.

There were no options granted in fiscal 2022, 2021 and 2020 except for the ones the Company assumed from the Inphi and Innovium acquisitions as described above.

The following weighted-average assumptions were used for each respective period to calculate the fair value of common stock to be issued under the ESPP on the date of grant using the Black-Scholes option pricing model:

			Year Ended
			January 29, 2022						January 30, 2021						February 1, 2020
Employee Stock Purchase Plan:
Estimated fair value			$	24.14					$	15.12					$	7.06
Expected volatility			46		%				48		%				35		%
Expected term (in years)			1.3						1.2						1.2
Risk-free interest rate			0.2		%				0.1		%				1.8		%
Expected dividend yield			0.4		%				0.6		%				1.0		%

The following weighted-average assumptions were used for each respective period to calculate the fair value of common stock to be issued under Total Shareholder Return performance awards on the date of grant using the Monte Carlo pricing model:

			Year Ended
			January 29, 2022						January 30, 2021						February 1, 2020
Total Shareholder Return Awards:
Expected term (in years)			3.0						3.0						3.0
Expected volatility			44		%				40		%				32		%
Average correlation coefficient of peer companies			0.6						0.7						0.5
Risk-free interest rate			0.3		%				0.2		%				2.4		%
Expected dividend yield			0.5		%				0.9		%				1.0		%

The correlation coefficients are calculated based upon the price data used to calculate the historical volatilities and is used to model the way in which each entity tends to move in relation to its peers.

There were no Value Creation Awards granted in fiscal 2022 and 2021. The following weighted-average assumptions were used for estimating the fair value of common stock to be issued under VCA RSUs on the date of grant using the Monte Carlo pricing model:

			Year Ended
			February 1, 2020
Value Creation Awards:
Expected term (in years)			4.66
Expected volatility			35		%
Risk-free interest rate			1.8		%
Expected dividend yield			1.0		%

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Employee 401(k) Plans

The Company sponsors a 401(k) savings and investment plan that allows eligible U.S. employees to participate by making pre-tax and Roth contributions to the 401(k) plan ranging from 1% to 75% of eligible earnings subject to a required annual limit. The Company currently matches 100% of 5% of eligible salary to a $5,000 maximum contribution effective from January 1, 2022. The Company made matching contributions to employees of $14.5 million in fiscal 2022, $11.1 million in fiscal 2021 and $11.0 million in fiscal 2020. As of January 29, 2022, the 401(k) plan offers a variety of investment alternatives, representing different asset classes. Employees may not invest in the Company’s common stock through the 401(k) plan.

The Company also has voluntary defined contribution plans in various non-U.S. locations. In connection with these plans, the Company made contributions on behalf of employees totaling $11.0 million, $11.3 million and $9.6 million during fiscal 2022, 2021 and 2020, respectively.

Note 14 — Income Taxes

The U.S. and non-U.S. components of income (loss) from continuing operations before income taxes consist of the following (in thousands):

			Year Ended
			January 29, 2022						January 30, 2021						February 1, 2020
U.S. operations			$	(621,193)					$	(18,201)					$	(95,884)
Non-U.S. operations			137,698						(303,967)						894,266
			$	(483,495)					$	(322,168)					$	798,382

The provision (benefit) for income taxes consists of the following (in thousands):

			Year Ended
			January 29, 2022						January 30, 2021						February 1, 2020
Current income tax provision (benefit):
Federal			$	—					$	3,210					$	5,223
State			711						3,439						(1,937)
Foreign			30,722						(12,028)						(4,137)
Total current income tax provision (benefit)			31,433						(5,379)						(851)
Deferred income tax provision (benefit):
Federal			(83,423)						(14,401)						(125,892)
State			(9,220)						870						(9,382)
Foreign			(1,251)						(25,960)						(649,884)
Total deferred income tax provision (benefit)			(93,894)						(39,491)						(785,158)
Total provision (benefit) for income taxes			$	(62,461)					$	(44,870)					$	(786,009)

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

During fiscal 2022 a new Delaware corporation became the parent of the Company. Prior to that, the Company consisted of a Bermuda parent holding company with various foreign and U.S. subsidiaries. The applicable statutory rate in U.S. is 21% for the Company for fiscal 2022. The applicable statutory rate in Bermuda was zero for the Company for fiscal 2021 and 2020. For purposes of the reconciliation between the provision (benefit) for income taxes at the statutory rate and the effective tax rate, a U.S. statutory tax rate of 21% for fiscal years 2022, 2021 and 2020 is applied as follows:

			Year Ended
			January 29, 2022						January 30, 2021						February 1, 2020
Provision at U.S. statutory rate			$	(101,535)					$	(67,655)					$	167,660
State taxes, net of federal benefit			(8,136)						327						(9,878)
Difference in U.S. and non-U.S. tax rates			1,719						38,118						(181,625)
Foreign income inclusion in U.S.			54,125						861						13,736
Non-deductible compensation			47,889						4,108						6,196
Tax benefits of stock-based compensation			(70,888)						—						—
Intellectual property transaction			—						—						(762,933)
Federal research and development credits			(60,709)						(49,315)						(42,604)
Uncertain tax positions			(1,532)						(19,957)						(3,913)
Change in federal valuation allowance			62,660						49,315						26,971
Transaction costs			5,671						—						—
Other			8,275						(672)						381
Income tax provision (benefit)			$	(62,461)					$	(44,870)					$	(786,009)

The income tax benefit for fiscal 2022 differs from the U.S. federal statutory rate of 21% primarily due to tax benefits of stock-based compensation, offset by foreign income inclusions in the U.S. and non-deductible compensation. The tax benefits from stock-based compensation and increased foreign income inclusions in fiscal 2022 were primarily the result of the parent company being a US-based company during fiscal 2022, as opposed to a Bermuda-based company in prior years. The income tax benefit for fiscal 2021 differed from the U.S. federal statutory rate of 21% primarily due to pretax losses of subsidiaries with income tax rates that differ from the U.S. statutory tax rate, combined with a net reduction of unrecognized tax benefits inclusive of interest and penalties, offset by tax expense attributable to non-deductible compensation. The income tax benefit for fiscal 2020 was primarily the result of the recognition of a tax benefit of $763.0 million for the intra-entity transfer of the majority of the Company’s intellectual property to a subsidiary in Singapore, which resulted in the recognition of a deferred tax asset and tax benefit of $659.0 million related to the Singapore tax basis in the intellectual property and a tax benefit from the reversal of deferred tax liabilities primarily related to previously acquired intangible assets of $104.0 million.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Deferred tax assets consist of the following (in thousands):

			January 29, 2022						January 30, 2021
Deferred tax assets:
Net operating losses			$	281,399					$	78,253
Federal and California income tax credits			935,729						713,799
Intangible assets			639,369						629,290
Reserves and accruals			52,354						69,654
Stock-based compensation			35,104						4,798
Lease liabilities			37,716						28,176
Gross deferred tax assets			1,981,671						1,523,970
Valuation allowance			(1,003,419)						(749,468)
Total deferred tax assets			978,252						774,502
Deferred tax liabilities:
Intangible assets			(455,883)						(50,557)
Fixed assets			(8,088)						(27,549)
Unremitted earnings of non-U.S. subsidiaries			(21,448)						(20,173)
Right of use assets			(33,833)						(26,158)
Total deferred tax liabilities			(519,252)						(124,437)
Net deferred tax assets (liabilities)			$	459,000					$	650,065

The deferred tax assets and liabilities based on tax jurisdictions are presented on our consolidated balance sheet as follows:

			January 29, 2022						January 30, 2021
Non-current deferred tax assets			$	493,508					$	672,424
Non-current deferred tax liabilities			(34,508)						(22,359)
Net deferred tax assets (liabilities)			$	459,000					$	650,065

The ultimate realization of deferred tax assets depends upon the generation of future taxable income during the periods in which those assets become deductible or creditable. The Company evaluates the recoverability of its deferred tax assets, weighing all positive and negative evidence, and provides or maintains a valuation allowance for these assets if it is more likely than not that some, or all, of the deferred tax assets will not be realized. If negative evidence exists, sufficient positive evidence is necessary to support a conclusion that a valuation allowance is not needed. The Company considers all available evidence such as its earnings history including the existence of cumulative income or losses, reversals of taxable temporary differences, projected future taxable income, and tax planning strategies. In jurisdictions where the Company has cumulative losses, the Company has provided for a full valuation allowance on deferred tax assets. In the U.S. and in certain foreign jurisdictions, the Company has deferred tax assets for which partial valuation allowances have been established. After weighing all available evidence, particularly the earnings history and forecasts of future taxable income in each respective jurisdiction, as well as its history of tax credits expiring unused, the Company determined that negative evidence outweighed positive evidence with respect to the ability to realize federal, state, and foreign research and development and other tax credits, as well as certain other foreign deferred tax assets. The valuation allowance increased by $253.9 million from fiscal 2021, a portion of which is related to acquired deferred tax assets. In future periods, it is possible that significant positive or negative evidence could arise that results in a change in the Company’s judgment with respect to the need for a valuation allowance, which could result in a tax benefit, or adversely affect the Company's income tax provision, in the period of such change in judgment.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of January 29, 2022, the Company had net operating loss carryforwards available to offset future taxable income of approximately $1.74 billion, $969.6 million, $269.0 million and $89.5 million for U.S. federal, state of California, other U.S. states, and foreign purposes, respectively. If not utilized, the federal loss carryforwards begin to expire in fiscal year 2023, and the California carryforwards begin to expire in fiscal year 2028. The majority of the Company’s foreign losses carry forward indefinitely. The Company also had federal research and other tax credit carryforwards of approximately $514.5 million which begin to expire in fiscal 2023. As of January 29, 2022, the Company also had California research tax credit carryforwards of approximately $596.5 million, which can be carried forward indefinitely. In addition, the Company has research and other tax credit carryforwards of approximately $33.2 million in other U.S. states which begin to expire in fiscal 2023. The Company also has research and other tax credit carryforwards of approximately $15.6 million in foreign jurisdictions which begin to expire in fiscal 2024.

Utilization of the Company's U.S. federal and state net operating loss and credit carryforwards may be subject to annual limitations due to ownership change provisions of the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization. Future changes in the Company's stock ownership, some of which are generally outside of the Company's control, could result in an ownership change under Section 382 and Section 383 and result in a limitation on U.S. tax attributes. As of January 29, 2022, the Company had approximately $1.46 billion and $188.3 million of federal net operating loss and tax credit carryforwards, respectively, in the U.S. subject to an annual limitation. The Company does not expect these limitations to result in any permanent loss of tax benefits.

The following table reflects changes in the unrecognized tax benefits (in thousands):

			Year Ended
			January 29, 2022						January 30, 2021						February 1, 2020
Unrecognized tax benefits as of the beginning of the period			$	242,150					$	166,828					$	158,323
Increases related to acquired tax positions			94,579						—						9,215
Increases related to prior year tax positions			1,536						77,878						1,789
Decreases related to prior year tax positions			—						(1,106)						(6,747)
Increases related to current year tax positions			7,701						5,603						7,614
Settlements			(5,858)						(476)						(443)
Lapse in the statute of limitations			(5,557)						(8,193)						(4,044)
Foreign exchange (gain) loss			(589)						1,616						1,121
Gross amounts of unrecognized tax benefits as of the end of the period			$	333,962					$	242,150					$	166,828

Included in the balances as of January 29, 2022 is $198.8 million of unrecognized tax benefits that would affect the effective income tax rate if recognized. During the year ended January 29, 2022, the Company increased its unrecognized tax benefits by $91.8 million primarily as a result of unrecognized tax benefits recorded as part of the current year business combinations. Of the gross unrecognized tax benefits in the table above, $296.7 million, $221.7 million and $146.6 million are offset against deferred tax assets in the consolidated balance sheets as of January 29, 2022, January 30, 2021 and February 1, 2020, respectively.

The amounts in the table above do not include related interest and penalties. The amount of interest and penalties accrued was approximately $3.9 million, $4.0 million, and $12.4 million as of January 29, 2022, January 30, 2021, and February 1, 2020, respectively. The Company’s policy is to recognize interest and penalties as a component of income tax expense. The consolidated statements of operations for fiscal 2022, 2021, and 2020 included $0.6 million, $1 million, and $1.4 million, respectively, of interest and penalties related to unrecognized tax benefits.

The Company's major tax jurisdictions are the United States, the states of California and Massachusetts, Singapore, China, India, Germany, and Israel. The Company is subject to income tax audits by the respective tax authorities in all of the jurisdictions in which it operates. The examination of tax liabilities in each of these jurisdictions requires the interpretation and application of complex and sometimes uncertain tax laws and regulations. As of January 29, 2022, the Company is subject to examination in material jurisdictions including China, India, Israel, Singapore, Germany, and the United States for fiscal years 2003 through 2022.

During the next 12 months, it is reasonably possible that the amount of unrecognized tax benefits could increase or decrease significantly due to changes in tax law in various jurisdictions, new tax audits and changes in the U.S. dollar as compared to foreign currencies within the next 12 months. Excluding these factors, uncertain tax positions may decrease by $2.0 million from the lapse of the statutes of limitations in various jurisdictions during the next 12 months.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Singapore Economic Development Board (“EDB”) initially granted a 10-year Pioneer Status in July 1999 to the Company’s Singapore subsidiary. In October 2004, the Company’s subsidiary in Singapore was granted a second incentive known as the Development and Expansion Incentive (“DEI”), and in June 2006, the EDB agreed to extend the Pioneer status for 15 years to June 2014. In fiscal 2015, the EDB extended the DEI tax incentives until June 2019, and during the second quarter of fiscal 2020, the EDB extended the DEI tax incentives until June 2024. The Company is currently in discussions with the EDB regarding further extension of the DEI tax incentive beyond June 2024. As a result of scheduling of the reversals of Singapore deferred tax assets, the majority are measured at the Singapore statutory tax rate of 17% for periods after June 2024. If the DEI is extended, in the period of such extension, the Company will be required to remeasure these Singapore deferred tax assets at a lower incentive tax rate, and this will result in a material reduction to our net deferred tax assets in Singapore and a corresponding material increase in our deferred income tax expense in that period. At this time, it is impracticable to estimate the amount of such potential adjustment, as the DEI extension negotiations for periods after June 2024 are in process. To retain the current DEI tax benefits through June 2024 in Singapore, the Company must meet certain operating conditions, headcount and investment requirements, as well as maintain certain activities in Singapore. In fiscal 2022, tax savings associated with this tax incentive were approximately $11.8 million, which if paid would impact the Company’s earnings per share by $0.01 per share in fiscal 2022. There was no such benefit in fiscal 2021 or 2020.

Under the Israeli Encouragement law of “approved or benefited enterprise,” Marvell Israel (M.I.S.L) Ltd., is entitled to approved and benefited tax programs that include reduced tax rates and exemption of certain income with respect to its Galileo switches activity, subject to various operating and other conditions. Income from the approved or benefited enterprises, with the exception of capital gains, is eligible up to fiscal 2027. There was no tax benefit in fiscal 2022, 2021, and 2020.

The Company’s principal source of liquidity as of January 29, 2022 consisted of approximately $613.5 million of cash and cash equivalents, of which approximately $498.0 million was held by subsidiaries outside of the United States. The Company has not recognized a deferred tax liability on $275.7 million of these assets as such amounts are deemed to be indefinitely reinvested. The Company manages its worldwide cash requirements by, among other things, reviewing available funds held by its foreign subsidiaries and the cost effectiveness by which those funds can be accessed in the United States.

Note 15 — Net Income (Loss) Per Share

The Company reports both basic net income (loss) per share, which is based on the weighted-average number of common stock outstanding during the period, and diluted net income (loss) per share, which is based on the weighted-average number of common stock outstanding and potentially dilutive shares outstanding during the period. The computations of basic and diluted net income (loss) per share are presented in the following table (in thousands, except per share amounts):

			Year Ended
			January 29, 2022						January 30, 2021						February 1, 2020
Numerator:
Net income (loss)			$	(421,034)					$	(277,298)					$	1,584,391
Denominator:
Weighted-average shares — basic			796,855						668,772						664,709
Effect of dilutive securities:
Stock-based awards			—						—						11,385
Weighted-average shares — diluted			796,855						668,772						676,094
Net income (loss) per share:
Basic			$	(0.53)					$	(0.41)					$	2.38
Diluted			$	(0.53)					$	(0.41)					$	2.34

Potential dilutive securities include dilutive common stock from stock-based awards attributable to the assumed exercise of stock options, restricted stock units and employee stock purchase plan shares using the treasury stock method. Potential dilutive securities include dilutive common stock from stock-based awards attributable to the shares that could be issued upon conversion of the Company's convertible debt using the if-converted method. Under the treasury stock method and if-converted method, potential common stock outstanding are not included in the computation of diluted net income per share, if their effect is anti-dilutive.

MARVELL TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Anti-dilutive potential shares are presented in the following table (in thousands):

			Year Ended
			January 29, 2022						January 30, 2021						February 1, 2020
Weighted-average shares outstanding:
stock-based awards			16,094						11,268						1,124
Convertible debt			549						—						—

Anti-dilutive potential shares from stock-based awards are excluded from the calculation of diluted earnings per share for all periods reported above because either their exercise price exceeded the average market price during the period or the stock-based awards were determined to be anti-dilutive based on applying the treasury stock method. Anti-dilutive potential shares from convertible debt are excluded from the calculation of diluted earnings per share for all periods reported above because the shares that would be issued upon conversion of the Company’s convertible debt were determined to be anti-dilutive based on applying the if-converted method. Anti-dilutive potential shares from stock-based awards are excluded from the calculation of diluted earnings per share for the years ended January 29, 2022 and January 30, 2021 due to the net losses reported in those periods.

Note 16 — Segment and Geographic Information

The Company operates in one reportable segment — the design, development and sale of integrated circuits. The chief executive officer was identified as the chief operating decision maker (“CODM”) and is ultimately responsible for and actively involved in the allocation of resources and the assessment of the Company’s performance. The fact that the Company operates in only one reportable segment is based on the following:

• The Company uses a highly-integrated approach in developing its products in that discrete technologies developed by the Company are frequently integrated across many of its products. Substantially all of the Company’s integrated circuits are manufactured under similar manufacturing processes.

• The Company’s organizational structure is based along functional lines. Each of the functional department heads reports directly to the CODM. Shared resources in the Company also report directly to the CODM or to a direct report of the CODM.

• The assessments of performance across the Company, including assessment of the Company’s incentive compensation plan, are based largely on operational performance and consolidated financial performance.

• The decisions on allocation of resources and other operational decisions are made by the CODM based on his direct involvement with the Company’s operations and product development.

The following table presents long-lived asset information based on the physical location of the assets by geographic region (in thousands):

			January 29, 2022						January 30, 2021
Property and equipment, net:
United States			$	319,030					$	245,471
Singapore			83,382						29,603
Israel			23,678						14,152
India			16,089						18,832
China			11,567						12,810
Others			9,027						5,257
			$	462,773					$	326,125