Skyworks Solutions (SWKS) 10-K risk factor changes: FY2018 vs FY2017

Uncertain worldwide economic [added: and political] conditions, together with other factors such as the volatility of the financial markets, continue to make it difficult for our customers and for us to accurately forecast and plan future business activities.

| • | changes in end-user demand for the products [removed: (principally smartphones)] manufactured and sold by our customers, |

| • | intellectual property disputes, including those concerning payments associated with the licensing and/or sale of intellectual [removed: property.] [added: property, and related remedies (e.g., monetary damages, injunctions, or exclusion orders affecting our or our customers’ products).] |

In fiscal 2017, three customers each accounted for ten percent [removed: of] [added: or] greater of our net revenue.

In fiscal 2016, two customers each accounted for [removed: greater than] ten percent [added: or greater] of our net revenue.

In fiscal [removed: 2015,] [added: 2018,] one customer accounted for greater than ten percent of our net revenue.

For further discussion see [Note [removed: 16](#sE9C8EBD98F325144AEFCAD53020F8FE3)] [added: 17](#s5EF058DE6E2A69852D96B460308E491E)] to Item 8 of this Annual Report on Form 10-K.

| • | domestic and international [removed: tax] [added: tax, fiscal,] and [removed: fiscal] [added: trade] policy decisions, and |

| • | [removed: the] [added: our] ability to successfully identify, acquire and integrate acquisition candidates. |

The wireless communications semiconductor [removed: industry] [added: industry,] in [removed: general] [added: general,] and the other analog markets in which we compete [removed: in particular] are very competitive.

This competition has resulted in, and is expected to continue to result in, declining average selling prices for our products and increased [added: challenges in maintaining or increasing revenue, gross margin and market share.]

Furthermore, additional competitors may enter our markets as a result of growth opportunities in communications electronics, the trend toward global expansion by foreign and domestic competitors and technological and public policy [removed: changes.][added: changes (including national or regional policies intended to develop and support localized competitors).]

| • | access [removed: to] [added: to,] and [added: the] protection [removed: of] [added: and enforcement of,] intellectual property, |

Many of our competitors [removed: enjoy the] benefit [removed: of:][added: from:]

[added: Furthermore, as a result of our lengthy product] development and sales cycle, we may incur significant research and development expenses, and selling, general and administrative expenses, without generating the anticipated revenue associated with these products.

A substantial majority of our net revenue is derived from [added: shipments to] customers located outside the United States, primarily in countries located in the Asia-Pacific region and Europe.

Finally, we maintain wafer fabrication facilities in Kadoma, [removed: Japan] [added: Japan,] and Osaka, Japan, as well as packaging, assembly and test facilities in Mexicali, [removed: Mexico] [added: Mexico,] and in Singapore.

| • | local economic and political conditions, including, but not limited to, social, economic and political instability related to the uncertainty regarding the relationships between the United States and [removed: Mexico, Russia,] China, [added: Russia, Mexico,] North Korea, Middle Eastern countries, other foreign countries, and the international community at large, and related to the United Kingdom’s pending withdrawal from the European Union, |

| • | restrictive governmental actions (such as restrictions on transfer of funds and trade protection measures, including export duties, quotas, customs duties, border taxes, increased import or export controls and tariffs) that could negatively impact trade between, or increase the cost of operating in, the countries in which [removed: Skyworks does] [added: we do] business, |

| • | withdrawal from, or renegotiation of, existing trade agreements by the United States (or other jurisdictions) potentially affecting Mexico, China, and other countries in which [removed: Skyworks does] [added: we do] business, |

| • | changes in current or future tax law or regulations or new interpretations thereof, by federal or state agencies or foreign governments (including changes [removed: proposed] in [removed: the U.S. regarding corporate taxes, the taxation of income earned outside the U.S., and the taxation of imported and exported goods and services, as well as changes in] certain countries in Europe and elsewhere regarding corporate taxes, transfer pricing, and tax treaty provisions), |

| • | the possibility of being exposed to legal proceedings [added: and potential penalties] in a foreign [removed: jurisdiction given] [added: jurisdiction, and/or increased compliance expense, as a result of] the numerous, and sometimes conflicting, legal regimes on matters as diverse as anti-corruption, [added: anti-bribery,] import/export controls, content requirements, trade restrictions, tariffs, taxation, sanctions, immigration, internal and disclosure control obligations, securities regulation, anti-competition, data privacy and [removed: protection,] [added: protection (including, but not limited to, the European Union’s General Data Protection Regulation),] employment and labor relations, |

| • | restrictions on our ability to repatriate foreign earnings [removed: and / or] [added: and/or] funds and the unfavorable tax impactions related to the same. |

Limitations or changes in policy on phone subsidies in the United States, South Korea, Japan, [removed: China] [added: China,] and other countries may have additional negative impacts on our revenues.

[removed: Our success in the Chinese markets may be adversely affected by China’s continuously evolving laws and regulations, including] those relating to taxation, import and export tariffs, currency controls, anti-corruption, environmental regulations, indigenous innovation, and intellectual property rights and enforcement of those rights.

Due to the highly specialized nature of the gallium arsenide integrated circuit manufacturing process, in the event of a disruption in production at our Newbury Park, [removed: California] [added: California,] or Woburn, [removed: Massachusetts] [added: Massachusetts,] semiconductor wafer fabrication facilities as well as our assembly and test facility in Mexicali, [removed: Mexico] [added: Mexico,] for any reason, alternative gallium arsenide production capacity would not be immediately available from third-party sources.

[added: Our manufacturing operations may also face pressures arising from the compression of product life cycles, which may] require us to manufacture new products faster and for shorter periods while maintaining acceptable manufacturing yields and quality without, in many cases, reaching the longer-term, high-volume manufacturing conducive to higher manufacturing yields and declining costs.

The semiconductor industry generally and, in particular, many of the markets into which we sell our products, are highly cyclical and characterized by constant and rapid technological change, continuous product evolution, price erosion, evolving technical standards, short product life [removed: cycles,] [added: cycles (including annual product refreshes in some cases),] increasing demand for higher levels of integration, increased miniaturization, reduced power consumption and wide fluctuations in product supply and demand.

We may not be able to develop and introduce new or enhanced wireless communications [added: and analog] semiconductor products in a timely and cost-effective manner, and our products may not satisfy customer requirements or achieve market acceptance or we may not be able to anticipate new industry standards and technological changes.

As smaller geometry processes become more prevalent, we expect to continue to integrate greater levels of functionality, as well as customer and [removed: third party] [added: third-party] intellectual property, into our products.

We may be subject to warranty claims, product [removed: recalls] [added: recalls,] and liability claims.

[added: The potential] liabilities associated with these, and similar, provisions in certain of our customer contracts are in some cases capped at significant amounts, and in other cases are uncapped.

These problems may divert our technical and other resources from other product development efforts and could result in claims against us by our customers or third parties, including liability for costs associated with product recalls, [removed: or other obligations under customer contracts.]

We rely [removed: upon] [added: on] foundries to provide silicon-based products and to supplement our gallium arsenide wafer manufacturing capacity.

| • | the inaccessibility of, or delays [removed: in,] [added: in] obtaining access to, key process [removed: technologies.] [added: technologies and IP blocks.] |

Uncertainties involving the ordering and shipment of, and payment for, our [removed: products] [added: products,] could adversely affect our business.

Additionally, we sell a portion of our products through [added: third-party] distributors, some of whom have rights to return [removed: unsold] products if the product is defective.

In addition, our customers [added: and/or distributors] may change their inventory practices on short notice for any reason.

In addition, if a customer [added: or distributor] encounters financial difficulties of its own as a result of a change in demand or for any other reason, the customer’s [added: or distributor’s] ability to make timely payments against our accounts receivable could be impaired.

[removed: Attempts] [added: Security breaches, phishing, spoofing, attempts] by others to gain unauthorized access to our information technology [removed: systems] [added: systems, and other cyberattacks] are becoming more sophisticated and are sometimes successful.

| • | vertical integration, |

| • | unauthorized transfers of our electronic information and breaches of our information systems, as well as the potential lack of adequate remedies in certain jurisdictions, |

Our success in the Chinese markets may be adversely affected by China’s continuously evolving laws and regulations, including

In particular, the imposition by the United States of tariffs on goods imported from China or deemed to be of Chinese origin and other government actions that restrict our ability to sell our products to Chinese customers or to manufacture or source components in China, and countermeasures imposed by China in response, could directly or indirectly adversely impact our manufacturing costs and the sales of our products in China and elsewhere.

Finally, China’s stated policy of reducing its dependence on foreign semiconductor manufacturers and other technology companies could result in reduced demand for our products in China and other key markets as well as reduced supply of critical materials for our products.

Likewise, lower-than-expected demand could lead to underutilized manufacturing facilities, which could negatively impact our financial results.

indemnification claims, or other obligations under customer contracts.

Some of our customers have implemented vendor-managed inventory, consignment or similar inventory programs which may result in an increase in the time between manufacture of, and payment for, our products.

However, we cannot ensure that our efforts will be sufficient to prevent or mitigate the damage caused by a cyberattack, cybersecurity incident or network disruption.

In addition, from time to time the Board of Directors approves stock repurchase programs, pursuant to which we are authorized to repurchase shares of common stock on the open market or in privately negotiated transactions.

The new tax legislation (the “Tax Reform Act”), enacted by the United States in December 2017, included several changes to U.S. tax laws that will have a significant impact on our operations, including a reduction in the U.S. corporate tax rate, base-erosion prevention measures on earnings of our non-U.S. subsidiaries, and a one-time mandatory deemed repatriation tax on earnings of certain foreign jurisdictions.

Because these changes require a number of complex calculations that previously were not required, our actual tax liability may differ materially from our income tax provisions, estimates, and accruals.

Changes in our interpretations and assumptions, as well as additional guidance issued, could increase income tax liabilities and/or reduce certain tax benefits.

| | |

| --- | --- |

challenges in maintaining or increasing revenue, gross margin and market share.

Furthermore, as a result of our lengthy product

Our manufacturing operations may also face pressures arising from the compression of product life cycles, which may

The potential

lose market share.

| • | no stockholder right to call a special meeting of stockholders, |

Actual results may differ substantially and adversely from those referred to herein due to a number of factors, including, but not limited to, those described below and in Item 1A “[Risk [removed: Factors](#sE227E7C57C2896472010AD530BE79D4B)”] [added: Factors](#s4EC3EB606B155BD10E96B4603E6D4828)”] and elsewhere in this Annual Report on Form 10-K.

Our highly innovative analog semiconductors are connecting people, places, and things spanning a number of new and previously unimagined applications within the [added: aerospace,] automotive, broadband, cellular infrastructure, connected home, industrial, medical, military, smartphone, tablet and wearable markets.

Our key customers include Amazon, [added: Apple,] Arris, Bose, Cisco, DJI, [added: Ericsson,] Foxconn, Garmin, [added: Gemalto,] General Electric, Google, Honeywell, HTC, Huawei, [removed: Landis & Gyr,] [added: Itron,] Lenovo, LG Electronics, Microsoft, Motorola, Netgear, Northrop Grumman, OPPO, Rockwell Collins, Samsung, Sierra Wireless, Sonos, Technicolor, VIVO, [removed: Xiaomi,] [added: Xiaomi] and ZTE.

FISCAL YEARS ENDED SEPTEMBER [added: 28, 2018, SEPTEMBER] 29, 2017, [added: AND] SEPTEMBER 30, [removed: 2016, AND OCTOBER 2, 2015.][added: 2016.]

| | September [added: 28, 2018 | | | September] 29, 2017 | | | September 30, 2016 | | [removed: | October 2, 2015 | |]

| Cost of goods sold | 49.6 | | | [removed: 49.4] [added: 49.6] | | | [removed: 52.3] [added: 49.4] | |

| Gross profit | 50.4 | | | [removed: 50.6] [added: 50.4] | | | [removed: 47.7] [added: 50.6] | |

| Research and development | [removed: 9.7] [added: 10.4] | | | [removed: 9.5] [added: 9.7] | | | [removed: 9.3] [added: 9.5] | |

| Selling, general and administrative | [removed: 5.6] [added: 5.4] | | | [removed: 6.0] [added: 5.6] | | | [removed: 5.9] [added: 6.0] | |

| Amortization of intangibles | [removed: 0.8] [added: 0.5] | | | [removed: 1.0] [added: 0.8] | | | 1.0 | |

| Restructuring and other charges | — | | | [removed: 0.1] [added: —] | | | 0.1 | |

| Total operating expenses | [removed: 16.1] [added: 16.3] | | | [removed: 16.6] [added: 16.1] | | | [removed: 16.3] [added: 16.6] | |

| Operating income | [removed: 34.3] [added: 34.1] | | | [removed: 34.0] [added: 34.3] | | | [removed: 31.4] [added: 34.0] | |

| Other income (expense), net | [removed: 0.1] [added: 0.3] | | | [removed: (0.2] [added: 0.1] | [removed: )] | | [removed: —] [added: (0.2] | [added: )] |

| Merger termination fee | — | | | [removed: 2.7] [added: —] | | | [removed: —] [added: 2.7] | |

| Income before income taxes | 34.4 | | | [removed: 36.5] [added: 34.4] | | | [removed: 31.4] [added: 36.5] | |

| Provision for income taxes | [removed: 6.7] [added: 10.7] | | | [removed: 6.2] [added: 6.7] | | | [removed: 6.9] [added: 6.2] | |

| Net income | [removed: 27.7] [added: 23.7] | % | | [removed: 30.3] [added: 27.7] | % | | [removed: 24.5] [added: 30.3] | % |

During the fiscal year ended September [removed: 29, 2017,] [added: 28, 2018,] the following key factors contributed to our overall results of operations, financial position and cash flows:

| • | Net revenue increased to approximately [removed: $3,651] [added: $3,868.0] million, an increase of [removed: 11%] [added: 6%] as compared to the prior fiscal year. This increase in revenue was primarily driven by our success in capturing a higher share of the increasing radio frequency and analog content per device as smartphone models continue to evolve, [removed: increased strength in emerging markets due to the adoption of evolving technologies,] increases in applications for the IoT, and the expanding analog product portfolio supporting new vertical markets including [added: aerospace,] automotive, industrial, medical and military. |

| • | Our ending [removed: cash and] [added: cash,] cash equivalents [added: and marketable securities] balance [removed: increased 49%] [added: decreased 35.0%] to [removed: $1,617] [added: $1,050.2] million in fiscal [removed: 2017] [added: 2018] from [removed: $1,084] [added: $1,616.8] million in fiscal [removed: 2016.] [added: 2017.] This was the result of a [removed: 34% increase] [added: 13% decrease] in cash from operations to [removed: $1,471] [added: $1,260.6] million in fiscal [removed: 2017] [added: 2018] from [removed: $1,096] [added: $1,456.3] million in fiscal [removed: 2016] [added: 2017] due to [removed: higher net income and changes] [added: a $221.9 million increase] in [removed: net] [added: cash used for] working capital. In addition, we returned [removed: $647] [added: $1,002.7] million to shareholders through repurchasing [removed: 4.7] [added: 7.7] million shares of our common stock for [removed: $432] [added: $759.5] million together with payments of [removed: $215] [added: $243.2] million in cash dividends. Lastly, we invested approximately [removed: $303] [added: $422.3] million in capital [removed: expenditures.] [added: expenditures and $404.0 million in payments for acquisitions.] |

| | September [removed: 29, 2017] [added: 28, 2018] | | | Change | September [removed: 30, 2016] [added: 29, 2017] | | | Change | [removed: October 2, 2015] [added: September 30, 2016] | | |

| Net revenue | $ | [removed: 3,651.4] [added: 3,868.0] | | [removed: 11.0%] [added: 5.9%] | $ | [removed: 3,289.0] [added: 3,651.4] | | [removed: 0.9%] [added: 11.0%] | $ | [removed: 3,258.4] [added: 3,289.0] | |

We generally experience seasonal peaks during the second half of the calendar year, primarily as a result of increased worldwide production of consumer electronics in anticipation of increased holiday sales, whereas our second [added: and third] fiscal quarter is typically lower and in line with seasonal industry trends.

The [added: $216.6 million increase in revenue in fiscal 2018 as compared to fiscal 2017 and the] $362.4 million increase in revenue in fiscal 2017 as compared to fiscal 2016 [removed: was] [added: were] primarily driven by our success in capturing a higher share of the increasing radio frequency and analog content per device as smartphones models continue to evolve, [removed: increased strength in emerging markets due to] the [removed: adoption of evolving technologies, the] increasing number of applications for the IoT, and our expanding analog product portfolio supporting new vertical markets including automotive, industrial, medical and military.

For information regarding net revenue by geographic region and customer concentration, see [Note [removed: 16](#sE9C8EBD98F325144AEFCAD53020F8FE3) of] [added: 17](#s5EF058DE6E2A69852D96B460308E491E) to] Item 8 of this Annual Report on Form 10-K.

| Gross profit | $ | [removed: 1,841.8] [added: 1,950.7] | | [removed: 10.6%] [added: 5.9%] | $ | [removed: 1,665.2] [added: 1,841.8] | | [removed: 7.1%] [added: 10.6%] | $ | [removed: 1,554.5] [added: 1,665.2] | |

| % of net revenue | 50.4 | | % | | [removed: 50.6] [added: 50.4] | | % | | [removed: 47.7] [added: 50.6] | | % |

These benefits were partially offset by the erosion of average selling price and changes in product mix that combined to [added: negatively impact gross profit by $130.0 million.]

Gross profit was [removed: $110.7] [added: $108.9] million [removed: greater] [added: higher] in fiscal [removed: 2016] [added: 2018] as compared to fiscal [removed: 2015.][added: 2017.]

The increase in gross profit was primarily the result of higher unit [removed: volumes and] [added: volumes,] lower overall per-unit material and manufacturing costs, [added: and favorable product mix,] with an aggregate gross profit benefit of [removed: $177.4] [added: $267.1] million.

These benefits were partially offset by the erosion of average selling price [removed: and changes in product mix] that [removed: combined to] negatively [removed: impact] [added: impacted] gross profit by [removed: $66.7] [added: $158.2] million.

[removed: As a result of these impacts, gross] [added: Gross] profit margin [removed: increased to 50.6%] [added: remained consistent at 50.4%] of net revenue for fiscal [removed: 2016.][added: 2018.]

| Research and development | $ | [removed: 355.2] [added: 404.5] | | [removed: 13.7%] [added: 13.9%] | $ | [removed: 312.4] [added: 355.2] | | [removed: 3.0%] [added: 13.7%] | $ | [removed: 303.2] [added: 312.4] | |

| % of net revenue | [removed: 9.7] [added: 10.4] | | % | | [removed: 9.5] [added: 9.7] | | % | | [removed: 9.3] [added: 9.5] | | % |

Research and development expense increased [removed: slightly] as a percentage of net revenue due to [added: increased development complexity and our efforts to increase] the [removed: aforementioned factors.][added: value of our future products.]

The increase in research and development expense in fiscal [removed: 2016] [added: 2018] as compared to fiscal [removed: 2015] [added: 2017] is primarily related to increased [removed: product development-related expenses partially offset by a decrease in variable] [added: headcount, overall employee-related] compensation expense, [removed: including share-based compensation.][added: and expenses associated with product development activity.]

| Selling, general and administrative | $ | [removed: 204.6] [added: 207.8] | | [removed: 4.4%] [added: 1.6%] | $ | [removed: 195.9] [added: 204.6] | | [removed: 2.4%] [added: 4.4%] | $ | [removed: 191.3] [added: 195.9] | |

| % of net revenue | [removed: 5.6] [added: 5.4] | | % | | [removed: 6.0] [added: 5.6] | | % | | [removed: 5.9] [added: 6.0] | | % |

The increase in selling, general and administrative expenses in fiscal 2017 as compared to fiscal 2016 was primarily related to increases in employee-related compensation expenses, including share-based compensation, partially offset by lower legal expenses and [removed: a] [added: the] net gain related to the fair value adjustment of contingent consideration [removed: recorded during the period.][added: of $1.3 million.]

| | September 28, 2018 | | | Change | September 29, 2017 | | | Change | September 30, 2016 | | |

| | September 28, 2018 | | | Change | September 29, 2017 | | | Change | September 30, 2016 | | |

| | September 28, 2018 | | | Change | September 29, 2017 | | | Change | September 30, 2016 | | |

| | September 28, 2018 | | | Change | September 29, 2017 | | | Change | September 30, 2016 | | |

| Amortization of capitalized software | 6.0 | | | 100.0% | — | | | —% | — | | |

| Total amortization of intangibles | 26.7 | | | | 27.6 | | | | 33.4 | | |

During fiscal 2018, $8.4 million and $18.3 million in amortization of intangibles were included in cost of goods sold and selling, general and administrative expense, respectively.

During fiscal 2017, $27.6 million in amortization of intangibles was included in selling, general and administrative expense.

| | September 28, 2018 | | | Change | September 29, 2017 | | | Change | September 30, 2016 | | |

Restructuring and other charges incurred in fiscal 2018 are related to charges on a leased facility.

| | September 28, 2018 | | | Change | September 29, 2017 | | | Change | September 30, 2016 | | |

| | September 28, 2018 | | | Change | September 29, 2017 | | | Change | September 30, 2016 | | |

See [Note 9](#sCB19CCCC855AFD0270ECB4602F2220EC) to Item 8 of this Annual Report on Form 10-K for a detailed discussion of the impact of the Tax Reform Act.

The decrease in cash from operating activities during fiscal 2018 was primarily related to a $221.9 million increase in cash used for working capital.

Specifically, the increase in uses of cash were: $156.7 million in accounts receivable due to the timing of customer collections and $273.8 million related to accounts payable, due to the timing of capital expenditures and vendor payments.

These increases in uses of cash were offset by increases in sources of cash of: $143.0 million related to changes in other current and long-term liabilities primarily related to the unpaid portion of the mandatory deemed repatriation tax on foreign earnings.

Based on our historical results of operations, we expect that our cash, cash equivalents and marketable securities

Our invested cash balances primarily consist of highly liquid marketable securities that are available to meet near-term cash requirements including: term deposits, certificate of deposits, money market funds, U.S. Treasury securities, agency securities, other government securities, corporate debt securities and commercial paper.

We had $300.6 million of cash and cash equivalents located in foreign jurisdictions at September 28, 2018.

| Other long-term liabilities (1) | | $ | 308.6 | | | $ | 5.5 | | | $ | 36.9 | | | $ | 36.9 | | | $ | 229.3 | |

| Operating lease obligations | | 86.8 | | | | 21.6 | | | | 32.5 | | | | 17.5 | | | | 15.2 | | |

| Other commitments (3) | | 15.0 | | | | 12.5 | | | | 2.5 | | | | — | | | | — | | |

| Total | | $ | 413.5 | | | $ | 42.7 | | | $ | 71.9 | | | $ | 54.4 | | | $ | 244.5 | |

Our revenue reserves contain uncertainties

Refer to [Note 2](#s530A89CA615F13E05338B4602E28665D) to Item 8 on this Annual Report on Form 10-K for information about the expected impact of our adoption of ASU 2014-09, Revenue from Contracts with Customers (“Topic 606”).

Compensation expense is recognized over the requisite service period of the underlying awards.

We record an amount as an estimate of probable additional income tax liability at the largest amount

Our competitors include Analog Devices, Broadcom, Maxim Integrated Products, Murata Manufacturing, NXP Semiconductors, QUALCOMM, and Qorvo.

| | |

| --- | --- |

The $30.6 million increase in revenue in fiscal 2016 as compared to fiscal 2015 was primarily driven by our ability to capture a higher share of the increasing radio frequency and analog content per device as smartphones continue to displace traditional cellular phones, increased strength in emerging markets due to the adoption of 3G and 4G technologies, the increasing number of applications for the IoT, and our expanding analog product portfolio supporting new vertical markets including automotive, industrial, medical and military.

These increases were partially offset due to a decrease in demand during fiscal 2016 for our components from a key smartphone customer as a result of a decline in overall market demand for certain products.

negatively impact gross profit by $130.0 million.

The decrease in amortization expense for fiscal 2016, as compared to fiscal 2015, is the result of intangible assets acquired during fiscal 2016, partially offset by the end of the estimated useful lives of certain fully amortized intangible assets that were acquired in prior fiscal years.

Restructuring and other charges incurred in fiscal 2016 are primarily related to restructuring plans to reduce redundancies associated with the acquisitions made during fiscal 2016.

We do not anticipate any further significant charges associated with these restructuring activities.

We concluded a Canadian examination of our federal income tax returns for fiscal years 2010 and 2011 during fiscal 2017.

As a result, we decreased the reserve for uncertain tax positions which resulted in the recognition of an income tax benefit of $1.2 million in fiscal 2017.

During fiscal 2016, we concluded an IRS examination of our federal income tax returns for fiscal years 2012 and 2013.

We agreed to various adjustments to our fiscal year 2012 and 2013 tax returns that resulted in the recognition of current year tax expense of $2.6 million during fiscal 2016.

With the conclusion of the audit, we decreased the reserve for uncertain tax positions, which resulted in the recognition of an income tax benefit of $24.0 million in fiscal 2016.

The increase in cash flow from operating activities during the fiscal year ended September 29, 2017, was related to higher net income combined with a net cash inflow from changes in operating assets and liabilities.

Specifically, the changes in operating assets and liabilities that were sources of cash were: $147.8 million related to accounts payable, due to the timing of capital expenditures and vendor payments, $96.3 million related to changes in other current and long-term liabilities primarily driven by changes in income taxes and $3.3 million in other current and long-term assets.

These sources of cash were offset by uses of cash of: $69.2 million related to increases in inventory primarily related to end customer demand and $37.1 million in accounts receivable due to the timing of customer collections.

These uses of cash were partially offset by the maturity of a $3.2 million investment during the period.

| • | $10.9 million in deferred payments related to deferred intangible asset purchases and contingent consideration payments. |

Our invested cash balances primarily consist of highly liquid term deposits with original maturities of 90 days or less and money market funds where the underlying securities primarily consist of United States treasury obligations, United States agency obligations and repurchase agreements collateralized by United States government and agency obligations.

Our cash and cash equivalent balance of $1,616.8 million at September 29, 2017, consisted of $770.9 million held domestically and $845.9 million held by foreign subsidiaries, which is considered by us to be indefinitely reinvested and would be subject to material tax effects if repatriated.

| Other long-term liabilities (1) | | $ | 94.3 | | | $ | 5.4 | | | $ | 4.0 | | | $ | 1.0 | | | $ | 83.9 | |

| Operating lease obligations | | 84.6 | | | | 21.2 | | | | 34.8 | | | | 15.4 | | | | 13.2 | | |

| Other commitments (3) | | 10.3 | | | | 10.2 | | | | 0.1 | | | | — | | | | — | | |

| Total | | $ | 201.1 | | | $ | 38.3 | | | $ | 49.3 | | | $ | 16.4 | | | $ | 97.1 | |

Historically, we have not experienced material differences between our estimated sales reserves and actual results.

Historically, we have not experienced material differences between our estimated inventory reserves and actual results.

Historically, we have not experienced material differences between our impairment calculations and actual results.

Historically, we have not experienced material differences in our assigned values and actual results.

Historically, we have not experienced material differences in our estimates and actual results.

Historically, we have not experienced material differences between our estimates and actual results.

We are subject to overall financial market risks, such as changes in market liquidity, credit [removed: quality] [added: quality,] investment risk, interest rate risk and foreign exchange rate risk as described below.

Credit risk associated with our investments is not material because our [removed: money market and deposits] [added: investments] are diversified across several [removed: financial institutions] [added: types of securities] with high credit ratings, which reduces the amount of credit exposure to any one [removed: counterparty.][added: investment.]

Based on our results of operations for the fiscal year ended September [removed: 29, 2017,] [added: 28, 2018,] a hypothetical reduction in the interest rates on our [added: cash,] cash [added: equivalents,] and [removed: cash equivalents] [added: other investments] to zero would result in an [removed: approximately $5.6 million] [added: immaterial] reduction of interest income with [removed: the resulting] [added: a de minimis] impact on income before taxes.

Given the low interest rate environment, the objectives of our investment activities, and the relatively low interest income generated from our [removed: cash and] [added: cash,] cash [removed: equivalents] [added: equivalents,] and other investments, we do not believe that investment or interest rate risks pose material exposures to our current business or results of operations.

For the fiscal years ended September [added: 28, 2018, September] 29, 2017, [added: and] September 30, 2016, [removed: and October 2, 2015,] we had foreign exchange [removed: (losses)/gains] [added: losses] of [removed: ($3.1)] [added: $5.5] million, [removed: ($5.6)] [added: $3.1] million and [removed: $1.4] [added: $5.6] million, respectively.

Our exposure to interest rate and general market risks relates principally to our investment portfolio, which consists of cash and cash equivalents (money market funds and marketable securities purchased with less than ninety days until maturity) that total approximately $733.3 million and marketable securities (U.S. Treasury and government securities, corporate bonds and notes, municipal bonds, other government securities) that total approximately $294.1 million and $22.8 million within short-term and long-term marketable securities, respectively, as of September 28, 2018.

Our marketable securities consist of short-term and long-term maturity periods between 90 days and two years.

For the fiscal year ended September 28, 2018, we had no outstanding foreign currency forward or option contracts with financial institutions.

Our exposure to interest rate and general market risks relates principally to our investment portfolio which consists of cash and cash equivalents (time deposits, certificates of deposit and money market funds) that total $1,616.8 million as of September 29, 2017.

Skyworks Solutions, Inc., together with its consolidated [removed: subsidiaries,] [added: subsidiaries (“Skyworks” or the “Company”),] is empowering the wireless networking revolution.

[removed: Our] [added: The Company’s] highly innovative analog semiconductors are connecting people, places, and things, spanning a number of new and previously unimagined applications within the [added: aerospace,] automotive, broadband, cellular infrastructure, connected home, industrial, medical, military, smartphone, tablet and wearable markets.

Our key customers include Amazon, [added: Apple,] Arris, Bose, Cisco, DJI, [added: Ericsson,] Foxconn, Garmin, [added: Gemalto,] General Electric, Google, Honeywell, HTC, Huawei, [removed: Landis & Gyr,] [added: Itron,] Lenovo, LG Electronics, Microsoft, Motorola, Netgear, Northrop Grumman, OPPO, Rockwell Collins, Samsung, Sierra Wireless, Sonos, Technicolor, VIVO, Xiaomi and ZTE.

With wireless platforms serving as virtual hubs for e-commerce, enterprise to the cloud, social media, gaming and entertainment, these devices are enabling a new, multi-trillion dollar [removed: economy as the traditional brick-and-mortar model gives way to mobile-centric business models.][added: economy.]

Popular apps including Amazon, Facebook, Netflix, Spotify, Uber, Waze and YouTube all require ultra-fast, highly secure, [removed: low-latency and] [added: low-latency,] always-on connectivity [removed: as well as] [added: plus] GPS location-based services.

As a result, semiconductor solutions are becoming increasingly relevant, [removed: particularly as they resolve] [added: resolving] the daunting analog and RF complexities that are challenging the capabilities of existing hardware and the supporting network infrastructure.

[removed: Within mobile,] Skyworks facilitates ubiquitous data creation, delivery and storage as smartphones transmit and receive immense amounts of content supporting multimedia streaming, social networking, [removed: gaming] [added: virtual reality] and emerging [removed: virtual reality.][added: frictionless commerce.]

To enable these applications, we deliver highly integrated solutions leveraging our amplification, filtering, tuning, power [removed: management] [added: management, audio processing] and packaging capabilities to continuously push the performance envelope.

According to The GSMA Foundation, there will be [removed: 5.7] [added: 5.9] billion mobile subscribers by [removed: 2020,] [added: 2025,] representing almost three-quarters of the world’s population.

From smart homes to the smart grid and from industrial to wearables, the number of connected devices is [removed: increasing exponentially.][added: rapidly proliferating.]

Skyworks is enabling these opportunities with highly customized system solutions supporting a broad set of wireless protocols including cellular LTE, Wi-Fi, Bluetooth®, [removed: LoRa,] [added: LoRa®,] Thread and Zigbee®.

By 2020 a single autonomous car is expected to consume 4,000 gigabytes of data per day in real-time diagnostics, positioning and vehicle-to-vehicle communications—that is equivalent to the daily data consumed by more than 2,000 smartphone users [removed: in 2017.][added: today.]

We expect the key catalysts for Skyworks to be the insatiable demand for data and the profitable usage model for both Mobile and IoT [removed: applications—as] [added: applications, as] each connection becomes more valuable and vital particularly as the world embraces 5G.

The transition to ubiquitous [removed: connectivity, however, does not come without] [added: connectivity creates] challenges to existing architectures.

We are at the forefront of advanced multi-chip module integration and offer unmatched technology breadth, providing deep expertise in CMOS, SOI, GaAs and filters, and maintain strategic partnerships with outside independent wafer fabrication [removed: facilities, called foundries.][added: facilities.]

[removed: Towards that] [added: To this] end, key elements of our strategy include:

We vertically integrate our supply chain where we can [added: differentiate] with highly specialized internal manufacturing capabilities, [removed: creating a competitive advantage,] or enter into alliances and strategic relationships for leading-edge technologies.

We create key performance indicators that align employee [removed: performance] [added: efforts] with corporate strategy and link responsibilities with performance measurement.

We strive to be an employer-of-choice among peer companies and have created a work environment in which turnover is [removed: well] below [removed: semiconductor] [added: geographic and] industry averages.

We seek to generate financial returns that are comparable to a highly diversified analog semiconductor [removed: company while delivering high growth rates representative of a mobile internet] company.

| • | Diversity Receive Modules: devices used to improve receiver sensitivity in high data rate [removed: LTE] applications |

Certain distributors have agreements with us which allow for certain sales returns, stock rotations and price protection on certain inventory if we lower the price of those products (see [removed: “[Critical] [added: “Critical] Accounting [removed: Estimates](#sD5B800C15D578E0CA445AD530E0D19F3)”] [added: Estimates”] in Part II, Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations and [removed: [Note 2](#s27E81CA161B18CA32A9FAD5300B12B3B)] [added: Note 2] to Item 8 of this Annual Report on Form 10-K for further detail on revenue reserves).

A small number of [removed: customers] [added: OEMs] historically has accounted for a significant portion of our net revenue.

In the fiscal year ended September 29, 2017 (“fiscal 2017”), three [removed: customers—Foxconn Technology Group (together with its affiliates and other suppliers to a large OEM for use in multiple applications including smartphones, tablets, routers, desktop and notebook computers, “Foxconn”),] [added: customers—Apple,] Samsung Electronics (“Samsung”), and Huawei Technology Co., [removed: Ltd.—each] [added: Ltd. (“Huawei”)—each] constituted ten percent or more of our net revenue.

In the fiscal year ended September 30, 2016 (“fiscal 2016”), two [removed: customers—Foxconn] [added: customers—Apple] and Samsung—each constituted more than ten percent of our net revenue.

For further information regarding customer concentrations see [Note [removed: 16](#sE9C8EBD98F325144AEFCAD53020F8FE3)] [added: 17](#s5EF058DE6E2A69852D96B460308E491E)] to Item 8 of this Annual Report on Form 10-K.

[removed: Our efforts may not meaningfully protect our intellectual] property, or others may independently develop substantially equivalent or superior proprietary technologies, designs, devices, algorithms, processes or other intellectual property.

[added: In addition, the laws of some foreign countries do not protect proprietary rights] to the same extent as the laws of the United States, and effective copyright, patent, trademark and trade secret protection may not be available in those jurisdictions.

We invested [removed: $355.2] [added: $404.5] million, [removed: $312.4] [added: $355.2] million and [removed: $303.2] [added: $312.4] million in research and development during fiscal [removed: 2017,] [added: 2018,] fiscal [removed: 2016] [added: 2017] and fiscal [removed: 2015,] [added: 2016,] respectively.

Certain of our suppliers consign raw materials to us at our manufacturing facilities to which we take title [removed: to] as needed in our manufacturing process.

Most of our customers have mandated that our products comply with various local, regional and national “green” initiatives initiated by [added: such customers or the locations in which they operate.]

The lowest demand for our handset products generally occurs in our second fiscal quarter ending in [removed: March.][added: March and the third fiscal quarter ending in June.]

As of September [removed: 29, 2017,] [added: 28, 2018,] we employed approximately [removed: 8,400] [added: 9,400] employees world-wide.

Approximately [removed: 1,000] [added: 1,150] of our employees in Mexico, [removed: 250] [added: 260] employees in Singapore, and [removed: 200] [added: 240] employees in Japan are covered by collective bargaining and other union agreements.

In August 2018, we acquired Avnera Corporation (“Avnera”) and expanded our leadership in wireless connectivity by adding ultra-low power analog circuits to enable smart interfaces via acoustic signal processing, sensors and integrated software.

We expect the acquisition of Avnera to enable us to capitalize on the rapid proliferation of audio functionality and its convergence with our advanced connectivity solutions.

With our global sales channels, strong customer relationships and operational scale, we plan to leverage Avnera’s innovative product portfolio and systems expertise to increase our footprint in automotive, industrial, home automation, enterprise and high-end consumer markets.

Mobile connectivity is exploding on a global basis.

| • | Antenna Tuners: aperture and impedance tuning products that improve antenna performance across frequencies |

| • | Front-end Modules: two or more functions co-packaged to optimize the performance, cost and application suitability in products, including intermediate or radio frequency signal paths |

| | |

| --- | --- |

In the fiscal year ended September 28, 2018 (“fiscal 2018”), Apple Inc. (“Apple”), through sales to multiple distributors, contract manufacturers and direct sales for multiple applications including smartphones, tablets, desktop and notebook computers, watches, and other devices) constituted more than ten percent of our net revenue.

Our efforts may not meaningfully protect our intellectual

You may read and copy materials that we have filed with the SEC at the SEC public reference room located at 100 F Street, N.E., Washington, D.C. 20549.

Please call the SEC at 1-800-SEC-0330 for further information on the public reference room.

Wireless connectivity is exploding, fueled by a powerful underlying demand to connect everyone and everything all the time.

Our expertise includes BiFET, CMOS, HBT, pHEMT, SOI and silicon germanium processes.

| • | Front-end Modules: power amplifiers that are integrated with switches, duplexers, filters and other components to create a single package front-end solution |

In the fiscal year ended October 2, 2015 (“fiscal 2015”), Foxconn constituted more than ten percent of our net revenue.

In addition, the laws of some foreign countries do not protect proprietary rights

such customers or the locations in which they operate.

GEOGRAPHIC INFORMATION

For information regarding net revenue by geographic region for each of the last three fiscal years, see [Note 16](#sE9C8EBD98F325144AEFCAD53020F8FE3) to Item 8 of this Annual Report on Form 10-K.

The information set forth under [Note [removed: 12](#sDE4DAA281F681968E724AD5301DDE6EB)] [added: 13](#s284895CED8527821F54AB460304056A1)] of Notes to Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K is incorporated herein by reference.

For the fiscal year ended September [removed: 29, 2017][added: 28, 2018]

Indicate by check mark whether the registrant has submitted electronically [removed: and posted on its corporate Web site, if any,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [added: a] smaller reporting company, or an emerging growth company.

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant (based on the closing price of the registrant’s common stock as reported on the [removed: NASDAQ] [added: Nasdaq] Global Select Market on the last business day of the registrant’s most recently completed second fiscal quarter March [removed: 31, 2017)] [added: 30, 2018)] was approximately [removed: $18,022,200,659.][added: $18.2 billion.]

The number of outstanding shares of the registrant’s common stock, par value $0.25 per share, as of November [removed: 3, 2017,] [added: 7, 2018,] was [removed: 183,189,590.][added: 177,531,995.]

FOR THE YEAR ENDED SEPTEMBER [removed: 29, 2017][added: 28, 2018]

| [ITEM 1: [removed: BUSINESS.](#s013636C0B336A8BBC92EAD530BC986E0)] [added: BUSINESS.](#sA3397E771434526476E1B4603E4682F2)] | [removed: [5](#s013636C0B336A8BBC92EAD530BC986E0)] [added: [5](#sA3397E771434526476E1B4603E4682F2)] |

| [ITEM 1A: RISK [removed: FACTORS.](#sE227E7C57C2896472010AD530BE79D4B)] [added: FACTORS.](#s4EC3EB606B155BD10E96B4603E6D4828)] | [removed: [10](#sE227E7C57C2896472010AD530BE79D4B)] [added: [10](#s4EC3EB606B155BD10E96B4603E6D4828)] |

| [ITEM 1B: UNRESOLVED STAFF [removed: COMMENTS.](#s40EF7C55E1C4D62802EBAD530C19A90F)] [added: COMMENTS.](#s7C43C6304C01E29E3565B4603E9B61EE)] | [removed: [21](#s40EF7C55E1C4D62802EBAD530C19A90F)] [added: [21](#s7C43C6304C01E29E3565B4603E9B61EE)] |

| [ITEM 2: [removed: PROPERTIES.](#sAE96A01CB26B077D0603AD530C37ECA3)] [added: PROPERTIES.](#sAC58972F18805B4EC036B4603ECA88C4)] | [removed: [21](#sAE96A01CB26B077D0603AD530C37ECA3)] [added: [21](#sAC58972F18805B4EC036B4603ECA88C4)] |

| [ITEM 3: LEGAL [removed: PROCEEDINGS.](#sCF6DF062C88D3E9DD93BAD530C69F237)] [added: PROCEEDINGS.](#sA44EFD838BB26B28D278B4603EEA5258)] | [removed: [21](#sCF6DF062C88D3E9DD93BAD530C69F237)] [added: [22](#sA44EFD838BB26B28D278B4603EEA5258)] |

| [ITEM 4: MINE SAFETY [removed: DISCLOSURES](#s5A7790A36FC83BF99633AD530C916C37).] [added: DISCLOSURES](#s1E584413BFFA31C82634B4603F191189).] | [removed: [22](#s5A7790A36FC83BF99633AD530C916C37)] [added: [22](#s1E584413BFFA31C82634B4603F191189)] |

| [ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES.](#s8CD6E6F8779371547D95AD530CE180FA)] [added: SECURITIES.](#sE19070BB048C009D231BB4603F86A6FD)] | [removed: [23](#s8CD6E6F8779371547D95AD530CE180FA)] [added: [23](#sE19070BB048C009D231BB4603F86A6FD)] |

| [ITEM 6: SELECTED FINANCIAL [removed: DATA.](#s1FFB096D1E866C55D756AD5306BFD312)] [added: DATA.](#sB14C564F5B88AE8B1C49B460371CD4F1)] | [removed: [24](#s1FFB096D1E866C55D756AD5306BFD312)] [added: [24](#sB14C564F5B88AE8B1C49B460371CD4F1)] |

| [ITEM 7: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF [removed: OPERATIONS.](#s9D96C2A1038C1C39EB42AD530D31C7D4)] [added: OPERATIONS.](#s06259CCBDD8509DCCED2B4603FC47FF5)] | [removed: [25](#s9D96C2A1038C1C39EB42AD530D31C7D4)] [added: [25](#s06259CCBDD8509DCCED2B4603FC47FF5)] |

| [ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET [removed: RISK.](#s402ECB202A615A45C463AD5309FD4F85)] [added: RISK.](#s38630D647B72929E1D7AB46040BFCDA1)] | [removed: [32](#s402ECB202A615A45C463AD5309FD4F85)] [added: [32](#s38630D647B72929E1D7AB46040BFCDA1)] |

| [ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY [removed: DATA.](#s1B658370DC6776E1C5F1AD53065B7A1D)] [added: DATA.](#s8C05C2885FCC1FF5E12FB4603509A819)] | [removed: [34](#s1B658370DC6776E1C5F1AD53065B7A1D)] [added: [33](#s8C05C2885FCC1FF5E12FB4603509A819)] |

| [ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL [removed: DISCLOSURE.](#s230A60492FB88C5B96EFAD5313B7EE33)] [added: DISCLOSURE.](#sCBCC4A956CE88EF39E5FB460464E8E9A)] | [removed: [62](#s230A60492FB88C5B96EFAD5313B7EE33)] [added: [64](#sCBCC4A956CE88EF39E5FB460464E8E9A)] |

| [ITEM 9A: CONTROLS AND [removed: PROCEDURES.](#s779181B8D3965FFD26BEAD5313F3DA98)] [added: PROCEDURES.](#s23D6EC877B0473CF4D09B460466D51B5)] | [removed: [62](#s779181B8D3965FFD26BEAD5313F3DA98)] [added: [64](#s23D6EC877B0473CF4D09B460466D51B5)] |

| [ITEM 9B: OTHER [removed: INFORMATION.](#sF85D6DDA62B73339708CAD531407D883)] [added: INFORMATION.](#s6DC8E0676FDFDA0C0244B460469CF31B)] | [removed: [63](#sF85D6DDA62B73339708CAD531407D883)] [added: [65](#s6DC8E0676FDFDA0C0244B460469CF31B)] |

| [PART [removed: III](#sE4E0095CB96797E2F6D6AD5314392D79)] [added: III](#sCC596B1FCDD264722AE9B46046BBBBDF)] | |

| [ITEM 10: DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE [removed: GOVERNANCE.](#s1A0B561ECF629A9A2956AD531461DE67)] [added: GOVERNANCE.](#sF05A9B56F7C5C6DD3ED3B46046EABF26)] | [removed: [63](#s1A0B561ECF629A9A2956AD531461DE67)] [added: [65](#sF05A9B56F7C5C6DD3ED3B46046EABF26)] |

| [ITEM 11: EXECUTIVE [removed: COMPENSATION.](#s0B5381B5A4C51002FD29AD5314932114)] [added: COMPENSATION.](#s74E1B27F374BBA962E97B4604709318E)] | [removed: [63](#s0B5381B5A4C51002FD29AD5314932114)] [added: [65](#s74E1B27F374BBA962E97B4604709318E)] |

| [ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER [removed: MATTERS.](#s1446B54F9CA9EF62D907AD5314B142EC)] [added: MATTERS.](#s924881DBA1A85956D93AB46047393E62)] | [removed: [63](#s1446B54F9CA9EF62D907AD5314B142EC)] [added: [65](#s924881DBA1A85956D93AB46047393E62)] |

| [ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR [removed: INDEPENDENCE.](#s4C819B0BEAF029F5D524AD5314E36093)] [added: INDEPENDENCE.](#sB687CFF9481D4C3B2660B46047577DF8)] | [removed: [63](#s4C819B0BEAF029F5D524AD5314E36093)] [added: [65](#sB687CFF9481D4C3B2660B46047577DF8)] |

| [ITEM 14: PRINCIPAL ACCOUNTING FEES AND [removed: SERVICES.](#sA103DA79CDE4C81AC0A8AD531501E08E)] [added: SERVICES.](#s65D58CD35FA67116BC67B4604796E8D6)] | [removed: [63](#sA103DA79CDE4C81AC0A8AD531501E08E)] [added: [65](#s65D58CD35FA67116BC67B4604796E8D6)] |

| [ITEM 15: EXHIBITS, FINANCIAL STATEMENT [removed: SCHEDULES.](#s53D570AAB04AB9D882FCAD53155BB27D)] [added: SCHEDULES.](#s9182C19436986F26B4C4B46047E4A8A4)] | [removed: [64](#s53D570AAB04AB9D882FCAD53155BB27D)] [added: [66](#s9182C19436986F26B4C4B46047E4A8A4)] |

| [ITEM 16: FORM 10-K [removed: SUMMARY](#sa3ef103b8a08454bb795b7f770e1475c)] [added: SUMMARY](#s3C0912E08A8772221A11B46048041BC1)] | [removed: [64](#s53D570AAB04AB9D882FCAD53155BB27D)] [added: [66](#s9182C19436986F26B4C4B46047E4A8A4)] |

10-K 1 fy1810k92818.htm 10-K

| [PART I](#sCAA68C864E806C740780B4603E2681BA) | |

| [PART II](#sD96551914C828505052CB4603F388602) | |

| [PART IV](#s27EB0FB27A13B51CD22DB46047B5508E) | |

| [SIGNATURES](#sB1E81B953A909C872A74B46048909D77) | [70](#sB1E81B953A909C872A74B46048909D77) |

10-K 1 fy1710k92917.htm 10-K

| | | (Do not check if a smaller reporting company) | | |

| [PART I](#s6EF612AED81AC84931D6AD530B97EF97) | |

| [PART II](#sB8F87A8A24836248986CAD530CC3FF77) | |

| [PART IV](#sC4ED8674870D1D2E0AD9AD5315331C48) | |

| [SIGNATURES](#s72FCCA23008A6A37EB72AD53158D5804) | [69](#s72FCCA23008A6A37EB72AD53158D5804) |

For information regarding property, plant and equipment by geographic region for each of the last three fiscal years, see [Note [removed: 16](#sE9C8EBD98F325144AEFCAD53020F8FE3)] [added: 17](#s5EF058DE6E2A69852D96B460308E491E)] to Item 8 of this Annual Report on Form 10-K.

| Osaka, Japan | | Leased | | [removed: 405,400] [added: 405,300] | | Filter manufacturing |

| Mexicali, Mexico | | Leased | | [removed: 200,600] [added: 179,000] | | Manufacturing and office space |

| Newbury Park, California | | Leased | | [removed: 114,100] [added: 115,700] | | Design center |

| Kadoma, Japan | | Leased | | [removed: 103,300] [added: 97,300] | | Filter manufacturing and office space |

| San Jose, California | | Leased | | [removed: 49,800] [added: 51,900] | | Design center [added: and office space] |

| Hillsboro, Oregon | | Leased | | 21,200 | | Design center and office space |

| Gyeonggi-Do, Korea | | Leased | | 20,800 | | Design center |

The number of stockholders of record of our common stock as of November [removed: 3, 2017] [added: 7, 2018,] was [removed: 14,389.][added: 12,404.]

On November [removed: 6, 2017,] [added: 8, 2018,] the [added: Company announced that the] Board of Directors [added: had] declared a cash dividend of [removed: $0.32] [added: $0.38] per share of common stock, payable on December [removed: 12, 2017,] [added: 18, 2018,] to stockholders of record as of November [removed: 21, 2017.][added: 27, 2018.]

The following table provides information regarding repurchases of common stock made during the fiscal quarter ended September [removed: 29, 2017:][added: 28, 2018:]

| Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | Maximum Number (or [removed: Approximately] [added: Approximate] Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (1) |

[removed: (1)The share] [added: (1) The stock] repurchase program approved by the Board of Directors on January [removed: 17, 2017, authorized] [added: 31, 2018, authorizes] the repurchase of up to [removed: $500.0 million] [added: $1.0 billion] of our common stock from time to time on the open market or in privately negotiated transactions as permitted by securities laws and other legal requirements.

[removed: (2) Represents] [added: (4) 1,000,000] shares [added: were] repurchased [added: at an average price of $87.12 per share as part of our stock repurchase program, and 2,162 shares were repurchased] by us at the fair market value of the common stock as of the applicable purchase date, in connection with the satisfaction of tax withholding obligations under [removed: restricted stock agreements.][added: equity award agreements with an average price of $93.02 per share.]

[removed: (3) 600,000] [added: (2) 828,483] shares were repurchased at an average price of [removed: $102.28] [added: $97.56] per share as part of our [removed: share] [added: stock] repurchase [removed: program] [added: program,] and [removed: 2,137] [added: 1,423] shares were [removed: withheld for] [added: repurchased by us at the fair market value of the common stock as of the applicable purchase date, in connection with the satisfaction of] tax [added: withholding] obligations under [removed: restricted stock] [added: equity award] agreements with an average price of [removed: $105.53.][added: $96.91 per share.]

[removed: (4) 400,000] [added: (3) 715,597] shares were repurchased at an average price of [removed: $101.08] [added: $93.62] per share as part of our [removed: share] [added: stock] repurchase [removed: program] [added: program,] and [removed: 2,615] [added: 2,919] shares were [removed: withheld for] [added: repurchased by us at the fair market value of the common stock as of the applicable purchase date, in connection with the satisfaction of] tax [added: withholding] obligations under [removed: restricted stock] [added: equity award] agreements with an average price of [removed: $101.54.][added: $91.52 per share.]

| 6/30/18-7/27/18 | 829,906 (2) | $97.56 | 828,483 | $567.1 million |

| 7/28/18-8/24/18 | 718,516(3) | $93.61 | 715,597 | $500.1 million |

| 8/25/18-9/28/18 | 1,002,162(4) | $87.13 | 1,000,000 | $413.0 million |

| Total | 2,550,584 | | 2,544,080 | |

The January 31, 2018, stock repurchase program replaces in its entirety the January 17, 2017, plan and is scheduled to expire on January 31, 2020.

On November 15, 2017, we agreed to potentially issue not more than 1% of our common stock to an unaffiliated third party as contingent consideration for its role under a multi-year collaboration agreement.

The shares are issuable for no cash payment but only upon the achievement of certain product sale milestones, certain terminations of the agreement or if the Company engages in certain competition with the third party.

Though the timing is not certain, the Company does not expect achievement of the product sale milestones to occur any time prior to mid-2020.

The transaction was made in reliance on the exemption from registration in Section 4(a)(2) of the Securities Act.

The Company has agreed to file a registration statement with the Securities and Exchange Commission registering the resale of any issued shares.

The following table sets forth the range of high and low closing prices for our common stock, as reported by NASDAQ, and the cash dividends announced per share of common stock for the periods indicated.

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | Fiscal Years Ended | | | | | | | | | | | | | | | | | | | | | | |

| | September 29, 2017 | | | | | | | | | | | | September 30, 2016 | | | | | | | | | | |

| | High | | | | Low | | | | Dividends | | | | High | | | | Low | | | | Dividends | | |

| First quarter | $ | 80.15 | | | $ | 71.78 | | | $ | 0.28 | | | $ | 87.92 | | | $ | 74.63 | | | $ | 0.26 | |

| Second quarter | $ | 99.11 | | | $ | 74.57 | | | $ | 0.28 | | | $ | 78.18 | | | $ | 55.85 | | | $ | 0.26 | |

| Third quarter | $ | 111.01 | | | $ | 95.95 | | | $ | 0.28 | | | $ | 78.21 | | | $ | 58.01 | | | $ | 0.26 | |

| Fourth quarter | $ | 109.55 | | | $ | 95.34 | | | $ | 0.32 | | | $ | 77.02 | | | $ | 58.82 | | | $ | 0.28 | |

| 7/01/17-7/28/17 | 4,909 (2) | $97.17 | — | $275.9 million |

| 7/29/17-8/25/17 | 602,137(3) | $102.29 | 600,000 | $214.6 million |

| 8/26/17-9/29/17 | 402,615(4) | $101.09 | 400,000 | $174.1 million |

| Total | 1,009,661 | | 1,000,000 | |

The share repurchase program is scheduled to expire on January 17, 2019.

The information set forth below for the five years ended September [removed: 29, 2017,] [added: 28, 2018,] is not necessarily indicative of results of future operations, and should be read in conjunction with Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and our consolidated financial statements and related notes included in Part II, Item 8 of this Annual Report on Form 10-K to fully understand factors that may affect the comparability of the information presented below.

Fiscal [added: 2018,] 2017, 2016, [removed: 2015,] and [removed: 2013] [added: 2015] each consisted of 52 weeks and ended on September [added: 28, 2018, September] 29, 2017, September 30, 2016, [added: and] October 2, 2015, [removed: and September 27, 2013,] respectively.

| Statement of Operations Data: | September [added: 28, 2018 (2) | | | | September] 29, 2017 | | | | September 30, 2016 (1) | | | | October 2, 2015 | | | | October 3, 2014 | | | [removed: | September 27, 2013 | | |]

| Net revenue | $ | [removed: 3,651.4] [added: 3,868.0] | | | $ | [removed: 3,289.0] [added: 3,651.4] | | | $ | [removed: 3,258.4] [added: 3,289.0] | | | $ | [removed: 2,291.5] [added: 3,258.4] | | | $ | [removed: 1,792.0] [added: 2,291.5] | |

| Operating income | $ | [removed: 1,253.8] [added: 1,319.3] | | | $ | [removed: 1,118.7] [added: 1,253.8] | | | $ | [removed: 1,023.1] [added: 1,118.7] | | | $ | [removed: 565.2] [added: 1,023.1] | | | $ | [removed: 345.1] [added: 565.2] | |

| Operating margin | [removed: 34.3] [added: 34.1] | | % | | [removed: 34.0] [added: 34.3] | | % | | [removed: 31.4] [added: 34.0] | | % | | [removed: 24.7] [added: 31.4] | | % | | [removed: 19.3] [added: 24.7] | | % |

| Net income | $ | [removed: 1,010.2] [added: 918.4] | | | $ | [removed: 995.2] [added: 1,010.2] | | | $ | [removed: 798.3] [added: 995.2] | | | $ | [removed: 457.7] [added: 798.3] | | | $ | [removed: 278.1] [added: 457.7] | |

| Basic | $ | [removed: 5.48] [added: 5.06] | | | $ | [removed: 5.27] [added: 5.48] | | | $ | [removed: 4.21] [added: 5.27] | | | $ | [removed: 2.44] [added: 4.21] | | | $ | [removed: 1.48] [added: 2.44] | |

| Diluted | $ | [removed: 5.41] [added: 5.01] | | | $ | [removed: 5.18] [added: 5.41] | | | $ | [removed: 4.10] [added: 5.18] | | | $ | [removed: 2.38] [added: 4.10] | | | $ | [removed: 1.45] [added: 2.38] | |

| Cash dividends declared per share | $ | [removed: 1.16] [added: 1.34] | | | $ | [removed: 1.06] [added: 1.16] | | | $ | [removed: 0.65] [added: 1.06] | | | $ | [removed: 0.22] [added: 0.65] | | | $ | [removed: —] [added: 0.22] | |

| Balance Sheet Data: | September [added: 28, 2018 (2) | | | | September] 29, 2017 | | | | September 30, 2016 (1) | | | | October 2, 2015 | | | | October 3, 2014 | | | [removed: | September 27, 2013 | | |]

| Working capital | $ | [removed: 2,245.8] [added: 1,872.5] | | | $ | [removed: 1,791.9] [added: 2,245.8] | | | $ | [removed: 1,450.8] [added: 1,791.9] | | | $ | [removed: 1,131.6] [added: 1,450.8] | | | $ | [removed: 893.6] [added: 1,131.6] | |

| Property, plant and equipment, net | $ | [removed: 882.3] [added: 1,140.9] | | | $ | [removed: 806.3] [added: 882.3] | | | $ | [removed: 826.4] [added: 806.3] | | | $ | [removed: 555.9] [added: 826.4] | | | $ | [removed: 328.6] [added: 555.9] | |

| Total assets | $ | [removed: 4,573.6] [added: 4,828.9] | | | $ | [removed: 3,855.4] [added: 4,573.6] | | | $ | [removed: 3,719.4] [added: 3,855.4] | | | $ | [removed: 2,973.8] [added: 3,719.4] | | | $ | [removed: 2,333.1] [added: 2,973.8] | |

| Stockholders’ equity | $ | [removed: 4,065.7] [added: 4,097.0] | | | $ | [removed: 3,541.4] [added: 4,065.7] | | | $ | [removed: 3,159.2] [added: 3,541.4] | | | $ | [removed: 2,532.4] [added: 3,159.2] | | | $ | [removed: 2,101.1] [added: 2,532.4] | |

(2) Fiscal 2018 net income and earnings per share include a one-time charge of $224.6 million related to the mandatory deemed repatriation tax on foreign earnings and a one-time charge of $18.3 million related to the revaluation of deferred tax assets and liabilities at the new corporate tax rate, as a result of the Tax Reform Act.

| (1) | [Report of Independent Registered Public Accounting [removed: Firm](#s033E4BB21A905A29B66FAD530E8553B1)] [added: Firm](#s88AB469818E21EE7CE22B460410D3659)] | Page [removed: [35](#s033E4BB21A905A29B66FAD530E8553B1)] [added: [34](#s88AB469818E21EE7CE22B460410D3659)] |

| (2) | [Consolidated Statements of Operations for the three years ended September [removed: 29, 2017](#s3E052F18C0BD092A004DAD53004D29A7)] [added: 28, 2018](#s13EE88FA0C64602A1FC3B4602D08A910)] | Page [removed: [36](#s3E052F18C0BD092A004DAD53004D29A7)] [added: [36](#s13EE88FA0C64602A1FC3B4602D08A910)] |

| (3) | [Consolidated Statements of Comprehensive Income for the three years ended September [removed: 29, 2017](#s4D9A9B70FF3998BE4FF7AD5300570789)] [added: 28, 2018](#s9E8D64E2696CC271273BB4602D364211)] | Page [removed: [37](#s4D9A9B70FF3998BE4FF7AD5300570789)] [added: [37](#s9E8D64E2696CC271273BB4602D364211)] |

| (4) | [Consolidated Balance Sheets at September [removed: 29, 2017,] [added: 28, 2018,] and September [removed: 30, 2016](#s45201E0F955681373D60AD5300611C25)] [added: 29, 2017](#s9B2605B3F8C0D03A0600B4602D487328)] | Page [removed: [38](#s45201E0F955681373D60AD5300611C25)] [added: [38](#s9B2605B3F8C0D03A0600B4602D487328)] |

| (5) | [Consolidated Statements of Cash Flows for the three years ended September [removed: 29, 2017](#s0B004C8A32B7D1C4D56AAD53006BE4F7)] [added: 28, 2018](#sE521504A6E010AADE194B4602D87D04F)] | Page [removed: [39](#s0B004C8A32B7D1C4D56AAD53006BE4F7)] [added: [39](#sE521504A6E010AADE194B4602D87D04F)] |

| (6) | [Consolidated Statements of Stockholders’ Equity for the three years ended September [removed: 29, 2017](#s7C98BC622084B7ECE4DBAD530089446E)] [added: 28, 2018](#s49805281E59A87302F8CB4602DCA5122)] | Page [removed: [40](#s7C98BC622084B7ECE4DBAD530089446E)] [added: [40](#s49805281E59A87302F8CB4602DCA5122)] |

| (7) | [Notes to Consolidated Financial [removed: Statements](#s25A2C69DE94FA14A9E3FAD530FC5ED06)] [added: Statements](#s4B214CAEA8C47925433AB460425A2061)] | Page [removed: [41](#s25A2C69DE94FA14A9E3FAD530FC5ED06)] [added: [41](#s4B214CAEA8C47925433AB460425A2061)] through [removed: [61](#sFF05920283B2B4FC4C59AD53022D85D6)] [added: [62](#s47916B9213DB6A4C265DB46030CC482E)] |

[removed: The] [added: To the Stockholders and] Board of Directors [removed: and Stockholders]

We have audited the accompanying consolidated balance sheets of Skyworks Solutions, Inc. and subsidiaries [added: (the Company)] as of September [removed: 29, 2017] [added: 28, 2018] and September [removed: 30, 2016, and] [added: 29, 2017,] the related consolidated statements of operations, comprehensive income, cash flows, and [removed: stockholders’] [added: stockholders'] equity for each of the years in the three-year period ended September [removed: 29, 2017.][added: 28, 2018, and the related notes (collectively, the “consolidated financial statements”).]

We also have audited [removed: Skyworks Solutions, Inc.’s] [added: the Company’s] internal control over financial reporting as of September [removed: 29, 2017,] [added: 28, 2018,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway [removed: Commission (COSO).][added: Commission.]

[removed: Skyworks Solutions, Inc.’s] [added: The Company’s] management is responsible for these consolidated financial [removed: statements and financial statement schedule,] [added: statements,] for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on [removed: these] [added: the Company’s] consolidated financial statements and [removed: financial statement schedule, and] an opinion on the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the [added: consolidated] financial statements are free of material [removed: misstatement] [added: misstatement, whether due to error or fraud,] and whether effective internal control over financial reporting was maintained in all material respects.

Our audits [removed: of the consolidated financial statements] [added: also] included [removed: examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing] [added: evaluating] the accounting principles used and significant estimates made by management, [removed: and] [added: as well as] evaluating the overall [added: presentation of the consolidated] financial [removed: statement presentation.][added: statements.]

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of [removed: Skyworks Solutions, Inc. and subsidiaries] [added: the Company] as of September [removed: 29, 2017] [added: 28, 2018] and September [removed: 30, 2016,] [added: 29, 2017,] and the results of its operations and its cash flows for each of the years in the three-year period ended September [removed: 29, 2017,] [added: 28, 2018,] in conformity with U.S. generally accepted accounting principles.

Also in our opinion, [removed: Skyworks Solutions, Inc.] [added: the Company] maintained, in all material respects, effective internal control over financial reporting as of September [removed: 29, 2017,] [added: 28, 2018,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway [removed: Commission (COSO) .][added: Commission.]

| | September [removed: 29, 2017] [added: 28, 2018] | | | | September [removed: 30, 2016] [added: 29, 2017] | | | | [removed: October 2, 2015] [added: September 30, 2016] | | |

| Net revenue | $ | [removed: 3,651.4] [added: 3,868.0] | | | $ | [removed: 3,289.0] [added: 3,651.4] | | | $ | [removed: 3,258.4] [added: 3,289.0] | |

| Cost of goods sold | [removed: 1,809.6] [added: 1,917.3] | | | | [removed: 1,623.8] [added: 1,809.6] | | | | [removed: 1,703.9] [added: 1,623.8] | | |

| Gross profit | [removed: 1,841.8] [added: 1,950.7] | | | | [removed: 1,665.2] [added: 1,841.8] | | | | [removed: 1,554.5] [added: 1,665.2] | | |

| Research and development | [removed: 355.2] [added: 404.5] | | | | [removed: 312.4] [added: 355.2] | | | | [removed: 303.2] [added: 312.4] | | |

| Selling, general and administrative | [removed: 204.6] [added: 207.8] | | | | [removed: 195.9] [added: 204.6] | | | | [removed: 191.3] [added: 195.9] | | |

| Amortization of intangibles | [removed: 27.6] [added: 18.3] | | | | [removed: 33.4] [added: 27.6] | | | | [removed: 33.5] [added: 33.4] | | |

| Restructuring and other charges | [removed: 0.6] [added: 0.8] | | | | [removed: 4.8] [added: 0.6] | | | | [removed: 3.4] [added: 4.8] | | |

| Total operating expenses | [removed: 588.0] [added: 631.4] | | | | [removed: 546.5] [added: 588.0] | | | | [removed: 531.4] [added: 546.5] | | |

| Operating income | [removed: 1,253.8] [added: 1,319.3] | | | | [removed: 1,118.7] [added: 1,253.8] | | | | [removed: 1,023.1] [added: 1,118.7] | | |

| Other [removed: income,] [added: income] (expense), net | [removed: 3.2] [added: 12.8] | | | | [removed: (6.6] [added: 3.2] | | [removed: )] | | [removed: 0.5] [added: (6.6] | | [added: )] |

| Merger termination fee | — | | | | [removed: 88.5] [added: —] | | | | [removed: —] [added: 88.5] | | |

| Income before income taxes | [removed: 1,257.0] [added: 1,332.1] | | | | [removed: 1,200.6] [added: 1,257.0] | | | | [removed: 1,023.6] [added: 1,200.6] | | |

| Provision for income taxes | [removed: 246.8] [added: 413.7] | | | | [removed: 205.4] [added: 246.8] | | | | [removed: 225.3] [added: 205.4] | | |

| Net income | $ | [removed: 1,010.2] [added: 918.4] | | | $ | [removed: 995.2] [added: 1,010.2] | | | $ | [removed: 798.3] [added: 995.2] | |

| Basic | $ | [removed: 5.48] [added: 5.06] | | | $ | [removed: 5.27] [added: 5.48] | | | $ | [removed: 4.21] [added: 5.27] | |

| Diluted | $ | [removed: 5.41] [added: 5.01] | | | $ | [removed: 5.18] [added: 5.41] | | | $ | [removed: 4.10] [added: 5.18] | |

| Basic | [removed: 184.3] [added: 181.3] | | | | [removed: 188.7] [added: 184.3] | | | | [removed: 189.5] [added: 188.7] | | |

| Diluted | [removed: 186.7] [added: 183.2] | | | | [removed: 192.1] [added: 186.7] | | | | [removed: 194.9] [added: 192.1] | | |

| Cash dividends declared and paid per share | $ | [removed: 1.16] [added: 1.34] | | | $ | [removed: 1.06] [added: 1.16] | | | $ | [removed: 0.65] [added: 1.06] | |

| Fair value of investments | [removed: 0.9] [added: (0.1] | | [added: )] | | [removed: —] [added: 0.9] | | | | — | | |

| Pension adjustments | [removed: 0.7] [added: —] | | | | [removed: (1.8] [added: 0.7] | | [removed: )] | | [removed: (0.2] [added: (1.8] | | ) |

| Foreign currency translation adjustment | [removed: 0.8] [added: (0.2] | | [added: )] | | [removed: (0.9] [added: 0.8] | | [removed: )] | | [removed: (3.1] [added: (0.9] | | ) |

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

Basis for Opinions

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (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.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated financial statements.

Definition and Limitations of Internal Control Over Financial Reporting

We have served as the Company’s auditor since 2002.

Irvine, California

November 14, 2018

| Net income | $ | 918.4 | | | $ | 1,010.2 | | | $ | 995.2 | |

| | September 28, 2018 | | | | September 29, 2017 | | |

| Marketable securities | 294.1 | | | | — | | |

| Marketable securities | 22.8 | | | | — | | |

| Net income | $ | 918.4 | | | $ | 1,010.2 | | | $ | 995.2 | |

| Changes in fair value of contingent consideration | (11.9 | | ) | | (1.3 | | ) | | — | | |

| Purchases of marketable securities | (683.7 | | ) | | — | | | | — | | |

| Sales and maturities of investments | 368.2 | | | | 3.2 | | | | — | | |

| Proceeds from employee stock purchase plan | 18.2 | | | | 15.0 | | | | 18.0 | | |

| Share repurchase program | (7.7 | ) | | (1.9 | | ) | | 7.7 | | | (759.5 | | ) | | 1.9 | | | | — | | | | — | | | | (759.5 | | ) |

| Pre-combination service on replacement awards | — | | | — | | | | — | | | — | | | | 0.2 | | | | — | | | | — | | | | 0.2 | | |

| Balance at September 28, 2018 | 177.4 | | | $ | 44.4 | | | 51.0 | | | $ | (2,732.5 | ) | | $ | 3,061.0 | | | $ | 3,732.9 | | | $ | (8.8 | ) | | $ | 4,097.0 | |

Reserves for excess and obsolete inventory are established on a quarterly basis and are based on a detailed analysis of aged material, forecasted demand in relation to on-hand inventory, salability of our inventory, general market conditions, and product life cycles.

Once reserves are established, write-downs of inventory are considered permanent adjustments to the cost basis of inventory.

GOODWILL AND INDEFINITE-LIVED INTANGIBLE ASSETS

If the calculated fair value is determined to be less than the book value of the reporting unit, an impairment loss is recognized equal to that excess; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.

Reserves for sales returns and allowances of $32.2 million and $14.7 million were recorded as of September 28, 2018 and September 29, 2017, respectively.

Forfeitures are recorded as incurred.

Contract exit costs include contract termination fees and future contractual commitments for lease payments.

A liability for contract exit costs is recognized in the period in which the Company terminates the contract or on the cease-use date for leased facilities.

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.

As a result of adoption, the Company recognized a discrete income tax benefit of $25.6 million to the income tax provision for excess tax benefits generated by the settlement of share-based awards during fiscal 2018.

The adoption also resulted in an increase in cash flow from operations and a decrease of cash flow from financing of $25.6 million during fiscal 2018.

Prior periods have not been adjusted.

The Company has elected to account for forfeitures as they occur and will no longer estimate future forfeitures.

The change in accounting for forfeitures was applied using a modified retrospective transition method and resulted in a cumulative-effect adjustment to retained earnings as of the beginning of the first quarter of fiscal 2018 in the amount of $1.9 million.

Forfeitures in the future will now be recorded as a benefit in the period they are realized.

The Company early adopted ASU 2017-04 during the second quarter of fiscal 2018 and applied it prospectively, as permitted by the standard.

The Company will adopt this guidance during the first quarter of fiscal 2019 and will apply the modified retrospective approach, with the cumulative effect of applying the new guidance recognized as an adjustment to the opening retained earnings balance.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”).

The Company will early adopt ASU 2016-15 during the first quarter of fiscal 2019 and does not expect it to have a material impact on the consolidated financial statements.

In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule listed in Item 15 of this Form 10-K.

Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

Boston, Massachusetts

November 13, 2017

| | | | | | | | | | | | |

| Contribution of common shares to savings and retirement plans | 15.0 | | | | 18.0 | | | | 20.9 | | |

| Maturity of investments | 3.2 | | | | — | | | | — | | |

| Balance at October 3, 2014 | 189.2 | | | $ | 47.3 | | | 25.0 | | | $ | (553.1 | ) | | $ | 2,248.2 | | | $ | 794.9 | | | $ | (4.9 | ) | | $ | 2,532.4 | |

| Share repurchase program | (2.9 | ) | | (0.7 | | ) | | 2.9 | | | (237.3 | | ) | | 0.7 | | | | — | | | | — | | | | (237.3 | | ) |

The Company has evaluated subsequent events through the date of issuance of the audited consolidated financial statements.

DERIVATIVES

The Company may utilize derivative financial instruments to manage market risks associated with fluctuations in foreign currency exchange rates on specific transactions that occur in the normal course of business.

The criteria the Company uses for designating

an instrument as a hedge is the instrument’s effectiveness in risk reduction.

To receive hedge accounting treatment, hedges must be highly effective at offsetting the impact of the hedge transaction.

All derivatives, whether designated as hedging relationships or not, are recorded at fair value and are included as either an asset or liability on the balance sheet.

would recognize an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the asset or asset group.

The goodwill impairment test is a two-step process.

If the calculated fair value is determined to be less than the book value of the Company, then the Company performs step two of the impairment analysis.

Step two of the analysis compares the implied fair value of the Company’s goodwill to its book value.

If the book value of the Company’s goodwill exceeds its implied fair value, an impairment loss is recognized equal to that excess.

Forfeitures are estimated at the time of grant and revised, if

necessary, in subsequent periods if actual forfeitures differ from those estimates.

The Company reviews actual forfeitures at least annually.

with respect to its ability to generate revenues, gross profits, operating income and taxable income in future periods.

In November 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-17, Balance Sheet Classification of Deferred Taxes, which eliminates the current requirement to present deferred tax assets and liabilities as current and non-current in a classified balance sheet.

Instead, entities will be required to classify all deferred tax assets and liabilities as non-current.

The Company adopted this accounting standard update early, on a prospective basis, at the beginning of the fourth quarter of fiscal year 2017.

All deferred tax assets and liabilities as of September 29, 2017, have been classified as non-current in the accompanying Consolidated Balance Sheets and the notes thereto.

The adoption at the beginning of the fourth quarter of fiscal 2017 resulted in a $13.6 million decrease in current deferred tax assets, a $12.6 million increase in other assets on the Balance Sheet and a $0.5 million decrease to both current and non-current deferred tax liabilities.

No prior periods were retrospectively adjusted.

The Company will adopt this guidance during the first quarter of fiscal year 2019.

The Company’s assessment will be completed during fiscal 2018 at which time the method of adoption will be selected.

The updated guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows.

fiscal 2018, and anticipates changes to its diluted share count, its tax provision, share-based compensation expense and cash flow from operations.

The amendments are to be applied on a prospective basis.

The effective date for adoption of this standard is for the first annual or interim goodwill impairment test in the fiscal year beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.

The Company does not anticipate the adoption of ASU 2017-04 to have a material effect on the consolidated financial statements or related disclosures.

In allocating the total purchase consideration for this acquisition based on the calculated fair value, the Company recorded $9.7 million of goodwill and $16.4 million of identifiable intangibles assets.

Intangible assets acquired primarily consisted of developed technology with a weighted average useful life of five years as of the acquisition date.

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of September [removed: 29, 2017.][added: 28, 2018.]

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as [removed: appropriate] [added: appropriate,] to allow timely decisions regarding required disclosure.

Based on management’s evaluation of our disclosure controls and procedures as of September [removed: 29, 2017,] [added: 28, 2018,] our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of September [removed: 29, 2017.][added: 28, 2018.]

Based on their assessment, management concluded that, as of September [removed: 29, 2017,] [added: 28, 2018,] the Company’s internal control over financial reporting is effective based on those criteria.

Changes in internal [removed: controls] [added: control] over financial reporting.

There are no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the period covered by this report that have materially affected or are [removed: reasonable] [added: reasonably] likely to materially affect, our internal control over financial reporting.

The information under the captions “Directors and Executive Officers”, “Corporate Governance─Committees of the Board of Directors” and “Other Matters─Section 16(a) Beneficial Ownership Reporting Compliance” in our definitive proxy statement for the [removed: 2018] [added: 2019] Annual Meeting of Stockholders is incorporated herein by reference.

The information to be included under the caption “Information about Executive and Director Compensation” in our definitive proxy statement for the [removed: 2018] [added: 2019] Annual Meeting of Stockholders is incorporated herein by reference.

The information to be included under the captions “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in our definitive proxy statement for the [removed: 2018] [added: 2019] Annual Meeting of Stockholders is incorporated herein by reference.

The information to be included under the captions “Certain Relationships and Related Transactions” and “Corporate Governance─Director Independence” in our definitive proxy statement for the [removed: 2018] [added: 2019] Annual Meeting of Stockholders is incorporated herein by reference.

The information to be included under the caption “Ratification of Independent Registered Public Accounting Firm—Audit Fees” in our definitive proxy statement for the [removed: 2018] [added: 2019] Annual Meeting of Stockholders is incorporated herein by reference.

| Report of Independent Registered Public Accounting Firm | | Page [removed: [35](#s033E4BB21A905A29B66FAD530E8553B1)] [added: [34](#s88AB469818E21EE7CE22B460410D3659)] |

| Consolidated Statements of Operations for the three years ended September [removed: 29, 2017] [added: 28, 2018] | | Page [removed: [36](#s3E052F18C0BD092A004DAD53004D29A7)] [added: [36](#s13EE88FA0C64602A1FC3B4602D08A910)] |

| Consolidated Statements of Comprehensive Income for the three years ended September [removed: 29, 2017] [added: 28, 2018] | | Page [removed: [38](#s4D9A9B70FF3998BE4FF7AD5300570789)] [added: [38](#s9E8D64E2696CC271273BB4602D364211)] |

| Consolidated Balance Sheets at September [removed: 29, 2017,] [added: 28, 2018,] and September [removed: 30, 2016] [added: 29, 2017] | | Page [removed: [38](#s45201E0F955681373D60AD5300611C25)] [added: [38](#s9B2605B3F8C0D03A0600B4602D487328)] |

| Consolidated Statements of Cash Flows for the three years ended September [removed: 29, 2017] [added: 28, 2018] | | Page [removed: [39](#s0B004C8A32B7D1C4D56AAD53006BE4F7)] [added: [39](#sE521504A6E010AADE194B4602D87D04F)] |

| Consolidated Statements of Stockholders’ Equity for the three years ended September [removed: 29, 2017] [added: 28, 2018] | | Page [removed: [40](#s7C98BC622084B7ECE4DBAD530089446E)] [added: [40](#s49805281E59A87302F8CB4602DCA5122)] |

| Notes to Consolidated Financial Statements | | Pages [removed: [41](#s25A2C69DE94FA14A9E3FAD530FC5ED06)] [added: [41](#s4B214CAEA8C47925433AB460425A2061)] through [removed: [61](#sFF05920283B2B4FC4C59AD53022D85D6)] [added: [62](#s47916B9213DB6A4C265DB46030CC482E)] |

| 2. | The schedule listed below is filed as part of this Annual Report on Form 10-K: | [removed: Page number in this report] |

| | All [removed: other] required schedule information is included in the Notes to Consolidated Financial Statements or is omitted because it is either not required or not applicable. | |

| | Schedule II-Valuation and Qualifying Accounts | Page [68](#sC0B1EBDE2DF5D2CEA962AD530237C934) |

| 3.2 | [Third Amended and Restated [removed: By-laws](http://www.sec.gov/Archives/edgar/data/4127/000000412717000010/skyworks-thirdamendedandre.htm)] [added: By-laws, as Amended](http://www.sec.gov/Archives/edgar/data/4127/000000412717000010/skyworks-thirdamendedandre.htm)] | [removed: 8-K] [added: 10-Q] | 001-05560 | 3.1 | [removed: 2/3/2017] [added: 2/5/2018] | |

| 10.9* | [Skyworks Solutions, Inc. Amended and Restated 2008 Director Long-Term Incentive Plan, as [removed: Amended](http://www.sec.gov/Archives/edgar/data/4127/000000412716000049/ex1012008dltip.htm)] [added: Amended](http://www.sec.gov/Archives/edgar/data/4127/000000412718000021/q218exhibit101amendedandre.htm)] | 10-Q | 001-05560 | 10.1 | [removed: 5/4/2016] [added: 5/4/2018] | |

| 10.18* | [Fiscal [removed: 2017] [added: Year 2018] Executive Incentive [removed: Plan](http://www.sec.gov/Archives/edgar/data/4127/000000412717000012/ex101fy17eip.htm)] [added: Plan, as Amended](http://www.sec.gov/Archives/edgar/data/4127/000000412718000011/exh101-fy18eipv1redacted.htm)] | 10-Q | 001-05560 | [removed: 10.1] [added: 10.2] | [removed: 2/7/2017] [added: 2/5/2018] | |

| 10.19* | [Skyworks Solutions, Inc. Cash Compensation Plan for [removed: Directors](http://www.sec.gov/Archives/edgar/data/4127/000000412716000049/ex1012008dltip.htm)] [added: Directors](http://www.sec.gov/Archives/edgar/data/4127/000000412718000032/exhibit101cashcompensation.htm)] | 10-Q | 001-05560 | 10.1 | [removed: 5/4/2016] [added: 7/20/2018] | |

| [removed: 10.21*] [added: 10.22*] | [removed: [Letter to the Company from David Aldrich,] [added: [Change in Control / Severance Agreement,] dated December 16, [removed: 2014](http://www.sec.gov/Archives/edgar/data/4127/000000412715000006/exihibit102davealdrichlett.htm)] [added: 2014, between the Company and Peter Gammel](http://www.sec.gov/Archives/edgar/data/4127/000000412715000037/fy1510-k1022015ex1031gamme.htm)] | [removed: 10-Q] [added: 10-K] | 001-05560 | [removed: 10.2] [added: 10.31] | [removed: 2/4/2015] [added: 11/24/2015] | |

| [removed: 10.22*] [added: 10.21*] | [Amended and Restated Change in Control / Severance Agreement, dated May 11, 2016, between the Company and Liam Griffin](http://www.sec.gov/Archives/edgar/data/4127/000000412716000062/q316exhibit102griffincicag.htm) | 10-Q | 001-05560 | 10.2 | 8/3/2016 | |

| 10.23* | [Change in Control / Severance Agreement, dated [removed: December 16, 2014,] [added: August 29, 2016,] between the Company and [removed: Peter Gammel](http://www.sec.gov/Archives/edgar/data/4127/000000412715000037/fy1510-k1022015ex1031gamme.htm)] [added: Kris Sennesael](http://www.sec.gov/Archives/edgar/data/4127/000000412716000068/fy1610k903016ex1032sennesa.htm)] | 10-K | 001-05560 | [removed: 10.31] [added: 10.32] | [removed: 11/24/2015] [added: 11/22/2016] | |

| 10.24* | [Change in Control / Severance Agreement, dated November [removed: 9, 2015,] [added: 10, 2016,] between the Company and [removed: Laura Gasparini](http://www.sec.gov/Archives/edgar/data/4127/000000412716000062/q316exhibit103gasparinicic.htm)] [added: Robert J. Terry](http://www.sec.gov/Archives/edgar/data/4127/000000412717000012/ex102terrycicagreement.htm)] | 10-Q | 001-05560 | [removed: 10.3] [added: 10.2] | [removed: 8/3/2016] [added: 2/7/2017] | |

| 10.25* | [Change in Control / Severance Agreement, dated [removed: August 29,] [added: November 9,] 2016, between the Company and [removed: Kris Sennesael](http://www.sec.gov/Archives/edgar/data/4127/000000412716000068/fy1610k903016ex1032sennesa.htm)] [added: Carlos S. Bori](http://www.sec.gov/Archives/edgar/data/4127/000000412717000033/fy1710k92917ex1027boricic.htm)] | 10-K | 001-05560 | [removed: 10.32] [added: 10.27] | [removed: 11/22/2016] [added: 11/13/2017] | |

| 10.26* | [removed: [Change in Control / Severance] [added: [International Assignment] Agreement, dated [removed: November 10, 2016,] [added: September 13, 2017,] between the Company and [removed: Robert J. Terry](http://www.sec.gov/Archives/edgar/data/4127/000000412717000012/ex102terrycicagreement.htm)] [added: Peter L. Gammel](http://www.sec.gov/Archives/edgar/data/4127/000000412717000033/fy1710k92917ex1028gammel.htm)] | [removed: 10-Q] [added: 10-K] | 001-05560 | [removed: 10.2] [added: 10.28] | [removed: 2/7/2017] [added: 11/13/2017] | |

| 21 | [Subsidiaries of the [removed: Company](https://www.sec.gov/Archives/edgar/data/4127/000000412717000033/fy1710k9292017ex21.htm)] [added: Company](https://www.sec.gov/Archives/edgar/data/4127/000000412718000046/fy1810k9282018ex21.htm)] | | | | | X |

| 23.1 | [Consent of KPMG [removed: LLP](https://www.sec.gov/Archives/edgar/data/4127/000000412717000033/fy1710k92917ex231kpmgconse.htm)] [added: LLP](https://www.sec.gov/Archives/edgar/data/4127/000000412718000046/fy1810k92818ex231kpmgconse.htm)] | | | | | X |

| 31.1 | [Certification of the Company’s Chief Executive Officer pursuant to Securities and Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/4127/000000412717000033/fy1710k92917ex311.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/4127/000000412718000046/fy1810k92818ex311.htm)] | | | | | X |

| 31.2 | [Certification of the Company’s Chief Financial Officer pursuant to Securities and Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/4127/000000412717000033/fy1710k92917ex312.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/4127/000000412718000046/fy1810k92818ex312.htm)] | | | | | X |

| 32.1 | [Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/4127/000000412717000033/fy1710k92917ex321.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/4127/000000412718000046/fy1810k92818ex321.htm)] | | | | | X |

| 32.2 | [Certification of the Company’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/4127/000000412717000033/fy1710k92917ex322.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/4127/000000412718000046/fy1810k92818ex322.htm)] | | | | | X |

Date: November [removed: 13, 2017][added: 14, 2018]

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on November [removed: 13, 2017.][added: 14, 2018.]

| Chief Executive Officer | | [removed: Executive] Chairman [removed: and Chairman] of the Board |

| 2.3 | [Agreement and Plan of Merger dated as of August 3, 2018, by and among the Company, Avnera Corporation, AI Acquisition Corp., and Shareholder Representative Services LLC, solely in its capacity as the representative and agent of the Equityholders](https://www.sec.gov/Archives/edgar/data/4127/000000412718000046/exhibit23-mergeragreement.htm) | | | | | X |

| | | /s/ Kimberly S. Stevenson |

| | | Kimberly S. Stevenson |

| | | Director |

| 10.27* | [Change in Control / Severance Agreement, dated November 9, 2016, between the Company and Carlos S. Bori](https://www.sec.gov/Archives/edgar/data/4127/000000412717000033/fy1710k92917ex1027boricic.htm) | | | | | X |

| 10.28* | [International Assignment Agreement, dated September 13, 2017, between the Company and Peter L. Gammel](https://www.sec.gov/Archives/edgar/data/4127/000000412717000033/fy1710k92917ex1028gammel.htm) | | | | | X |

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

(In millions)

| | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Description | Beginning balance | | | | Charged to assets or expenses | | | | Deductions | | | | Misc. (1) | | | | Ending balance | | |

| Year Ended October 2, 2015 | | | | | | | | | | | | | | | | | | | |

| Allowance for doubtful accounts | $ | 0.8 | | | $ | — | | | $ | (0.4 | ) | | $ | — | | | $ | 0.4 | |

| Reserve for sales returns | $ | 14.1 | | | $ | 16.0 | | | $ | (17.9 | ) | | $ | — | | | $ | 12.2 | |

| Valuation allowance on deferred tax assets | $ | 60.8 | | | $ | 3.6 | | | $ | — | | | $ | 0.8 | | | $ | 65.2 | |

| Year Ended September 30, 2016 | | | | | | | | | | | | | | | | | | | |

| Allowance for doubtful accounts | $ | 0.4 | | | $ | 0.1 | | | $ | — | | | $ | — | | | $ | 0.5 | |

| Reserve for sales returns | $ | 12.2 | | | $ | 16.1 | | | $ | (16.0 | ) | | $ | — | | | $ | 12.3 | |

| Valuation allowance on deferred tax assets | $ | 65.2 | | | $ | 13.9 | | | $ | — | | | $ | — | | | $ | 79.1 | |

| Year Ended September 29, 2017 | | | | | | | | | | | | | | | | | | | |

| Allowance for doubtful accounts | $ | 0.5 | | | $ | 0.2 | | | $ | (0.2 | ) | | $ | — | | | $ | 0.5 | |

| Reserve for sales returns | $ | 12.3 | | | $ | 10.8 | | | $ | (8.4 | ) | | $ | — | | | $ | 14.7 | |

| Valuation allowance on deferred tax assets | $ | 79.1 | | | $ | 11.8 | | | $ | — | | | $ | — | | | $ | 90.9 | |

(1) Includes acquired balances