XILINX, INC. OnOctober 27, 2020 , we entered into the Merger Agreement, datedOctober 26, 2020 , with AMD and Merger Sub, under which, subject to the satisfaction or (to the extent permissible) waiver of the conditions set forth therein, Merger Sub will merge with and into us, and we will survive the Merger as a wholly-owned subsidiary of AMD. Under the terms of the Merger Agreement, at the Effective Time of the Merger, each share of our common stock, par value$0.01 per share, issued and outstanding immediately prior to the Effective Time (other than treasury shares and any shares of our common stock held by AMD or Merger Sub) will be converted into the right to receive 1.7234 fully paid and non-assessable shares of common stock, par value$0.01 per share, of AMD (with cash being paid, without interest and less applicable withholding taxes, in lieu of any fractional shares of AMD common stock). The Merger has been approved by both our board of directors and the board of directors of AMD. The completion of the Merger is subject to customary closing conditions, including, among others, the approvals of our stockholders and AMD's stockholders and the receipt of various regulatory approvals. Subject to the satisfaction or (to the extent permissible) waiver of such conditions, the transaction is currently expected to close by the end of calendar year 2021. We cannot guarantee that the Merger will be completed on a timely basis or at all or that, if completed, it will be completed on the terms set forth in the Merger Agreement. The aggregate financial advisor fees associated with the Merger are$90.0 million in total,$9.0 million of which was paid upon the public announcement of the Merger, and the remainder is contingent upon the closing of the Merger. We are also obligated to pay up to an additional$40.0 million calculated based on the extent to which the value of our shares in the Merger at the time of closing exceeds a specified threshold. If the Merger is not completed, we could be required to pay a termination fee of$1.00 billion to AMD under certain circumstances as described in the Merger Agreement.
Impact of COVID-19
The social and economic impact of the COVID-19 outbreak has continued to increase exponentially since it was declared a pandemic by theWorld Health Organization inMarch 2020 . The governmental authorities throughout theU.S. and the world have continued to implement numerous measures to contain the virus, including travel bans and restrictions, quarantines, shelter-in-place orders, and business limitations and shutdowns. While COVID-19 did not have a significant impact on our financial results in the third quarter and the first nine months of fiscal 2021, it is difficult to accurately predict the full impact that COVID-19 will have on our future results from operations, financial condition, liquidity and cash flows due to numerous uncertainties, including the duration and severity of the pandemic and related containment measures. Our compliance with these measures has impacted, and could continue to impact, our business and operations, as well as those of our key customers, suppliers (including contract manufacturers) and other counterparties, for an indefinite period of time. During this unprecedented time, our priority has been to support our employees, customers, partners and communities, while positioningXilinx for the future. For example, almost all of our employees have been working remotely sinceMarch 16, 2020 . In addition, employees of many of our customers are also working remotely, which may delay the timing of some orders and deliveries expected in fiscal 2021 and fiscal 2022. As we continue to experience uncertainties and disruptions caused by COVID-19, it remains uncertain when we would eventually resume some degree of normalcy. Therefore, our business may in the future be adversely impacted as a result of the pandemic's global economic impact. We will continue to closely monitor the pandemic's associated effects, such as our ability to collect receivables from those customers significantly impacted by COVID-19 related closures and disruptions, as well as changes in orders in a given period likely to affect our revenues in future periods, particularly if experienced on a sustained basis.
We currently expect that current cash and cash equivalent balances and cash flows that are generated from operations will be sufficient to meet our domestic and international working capital needs and other capital and liquidity requirements in the foreseeable future.
Critical Accounting Policies and Estimates
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The methods, estimates and judgments we use in applying our most critical
accounting policies have a significant impact on the results we report in our
condensed consolidated financial statements. The SEC has defined critical
accounting policies as those that are most important to the portrayal of our
financial condition and results of operations and require us to make our most
difficult and subjective judgments, often as a result of the need to make
estimates of matters that are inherently uncertain. Based on this definition,
our critical accounting policies include: valuation of marketable securities,
which impacts losses on debt and equity securities when we record impairments;
revenue recognition, which impacts the recording of revenues; and valuation of
inventories, which impacts cost of revenues and gross margin. Our critical
accounting policies also include: the assessment of impairment of long-lived
assets, which impacts their valuation; the assessment of the recoverability of
goodwill, which impacts goodwill impairment; accounting for income taxes, which
impacts the provision or benefit recognized for income taxes, as well as the
valuation of deferred tax assets recorded on our condensed consolidated balance
sheet; and accounting for business combinations, which impacts the valuation of
tangible and intangible assets recognized and liabilities assumed. For
additional discussion, please refer to the information under the caption
"Critical Accounting Policies and Estimates" in "Item 7. Management's Discussion
and Analysis of Financial Condition and Results of Operations" included in our
Form 10-K for the year ended March 28, 2020 filed with the SEC , and to "Note 2.
Recent Accounting Changes and Accounting Pronouncements" to our condensed
consolidated financial statements, included in Part I. "Financial Information."
We also have other key accounting policies that are not as subjective, and
therefore, their application would not require us to make estimates or judgments
that are as difficult, but which nevertheless could significantly affect our
financial reporting.
Due to the ongoing COVID-19 pandemic, there has been uncertainty and disruption
in the global economy and financial markets. We have considered the potential
impact of the COVID-19 pandemic on the business operations, recognizing that
there is substantial uncertainty in the nature and degree of COVID-19's
continued effects over time. While we are not currently aware of any specific
event or circumstance that would require an update to our estimates or judgments
or a revision of the carrying value of our assets or liabilities as of
January 2, 2021 , these estimates may change as additional events occur and
information is obtained. Actual results could differ materially from these
estimates under different assumptions or conditions.
Results of Operations: third quarter and first nine months of fiscal 2021 compared to the third quarter and first nine months of fiscal 2020
The following table sets forth statement of income data as a percentage of net revenues for the periods indicated:
Three Months Ended Nine Months Ended
January 2, 2021 December 28, 2019 January 2, 2021 December 28, 2019
Net revenues 100.0 % 100.0 % 100.0 % 100.0 %
Cost of revenues:
Cost of products sold 31.0 32.3 30.2 33.4
Amortization of acquisition-related
intangibles 0.9 0.9 0.9 0.7
Total cost of revenues 31.9 33.2 31.1 34.1
Gross margin 68.1 66.8 68.9 65.9
Operating expenses:
Research and development 29.2 29.2 28.9 26.5
Selling, general and administrative 17.0 15.2 15.5 13.7
Amortization of acquisition-related
intangibles 0.4 0.4 0.4 0.2
Total operating expenses 46.6 44.8 44.8 40.4
Operating income 21.5 22.0 24.1 25.5
Interest and other income (expense), net 0.4 0.9 (0.8) 1.3
Income before income taxes 21.9 22.9 23.3 26.8
Provision for income taxes 0.6 0.5 3.3 0.6
Net income 21.3 % 22.4 % 20.0 % 26.2 %
Net Revenues
We sell our products to global manufacturers of electronic products in various
end markets. The vast majority of our net revenues is generated by sales of our
semiconductor products, but we also generate sales from support products. We
classify our product offerings into two categories: Advanced Products and Core
Products:
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•Advanced Products include our most recent product offerings and consist of the
UltraScale+, UltraScale and 7-series product families and our
•Core Products consist of all other product families.
These product categories are modified on a periodic basis to better reflect the maturity of the products and advances in technology. The most recent modification was made onApril 3, 2016 , which was the beginning of our fiscal 2017, whereby we reclassified our product categories to be consistent with how these categories are analyzed and reviewed internally. Specifically, we are grouping the products manufactured at the 28 nanometer (nm), 20nm, 16nm and 7nm nodes into the Advanced Products category while all other products are grouped in the Core Products category. Except for Avnet, no other distributor or end customer accounted for more than 10% of the Company's worldwide net revenues for the third quarter and the first nine months of fiscal 2021. No other distributor accounted for more than 10% of the Company's worldwide net revenues for the third quarter and the first nine months of fiscal 2020. One end customer accounted for 12% and 11% of the Company's worldwide net revenues for the third quarter and the first nine months of fiscal 2020, respectively. Net Revenues by Product
Net revenues by product categories for the third quarter and the first nine months of fiscal 2021 and 2020 were as follows:
Three Months Ended Nine Months Ended
December 28, January 2, December 28,
(In millions) January 2, 2021 % Change 2019 2021 % Change 2019
Advanced Products $ 582.2 15 $ 504.7 $ 1,615.2 (5) $ 1,709.2
Core Products 221.2 1 218.8 681.4 (2) 697.3
Total net revenues $ 803.4 11 $ 723.5 $ 2,296.6 (5) $ 2,406.5
Net revenues from Advanced Products increased in the third quarter but decreased
in the first nine months of fiscal 2021 compared to the comparable prior year
periods. The increase in the third quarter of fiscal 2021 was primarily due to
strong sales from Virtex UltraScale+ in our Test, Measurement & Emulation
business. The decrease in the first nine months of fiscal 2021 was primarily due
to lower sales from Virtex UltraScale+ and Zynq UltraScale+ MPSoC in our
Wireless business.
Net revenues from Core Products increased in the third quarter but decreased in
the first nine months of fiscal 2021 from the comparable prior year periods. The
increase in the third quarter of fiscal 2021 was a result of higher sales from
Virtex2 Pro products in our Aerospace & Defense business. The decrease in the
first nine months of fiscal 2021 was largely due to lower sales from Spartan-6
in our Audio, Video and Broadcast business and Virtex-4 in our Aerospace &
Defense business. Core Products are relatively mature products and, as a result,
sales are expected to decline over time.
Net Revenues by End Markets
Our end market revenue data is derived from our understanding of our end customers' primary markets, which is based on reports provided by distributors and our internal records. To provide additional visibility, startingApril 1, 2019 , we classify our end markets into businesses with similar market drivers: (i) Aerospace & Defense, Industrial and Test, Measurement & Emulation (AIT); (ii) Automotive, Broadcast & Consumer; (iii) Wired & Wireless; and (iv) Data Center. Additionally, we classify revenue recognized from shipments to distributors but not yet subsequently sold to the end markets as Channel Revenue. The Channel Revenue represents the difference between the shipments to distributors and what the distributors subsequently sold to the end customers within the same period. The percentage change calculation in the table below represents the year-to-year dollar change in each end market. 31 -------------------------------------------------------------------------------- Table of Contents Net revenues by end markets for the third quarter and the first nine months of fiscal 2021 and 2020 were as follows: Three Months Ended Nine Months Ended
(% of total net revenues)
December 28, 2019 January 2, 2021 % Change in Dollars December 28, 2019
AIT 45 % 25 40 % 44 % 11 39 %
Automotive, Broadcast and 19 14 19
Consumer 16 (7) 16
Wired and Wireless 29 2 31 29 (25) 37
Data Center 7 (15) 9 11 30 8
Channel Revenue - nm* 1 - nm* -
Total net revenues 100 % 11 100 % 100 % (5) 100 %
*nm=not meaningful
Net revenues from AIT increased, in terms of absolute dollar, in the third quarter and the first nine months of fiscal 2021 from the comparable prior year periods. The increases were primarily due to higher sales from our Test, Measurement & Emulation business.
Net revenues from Automotive, Broadcast and Consumer increased, in terms of
absolute dollar, in the third quarter but decreased in the first nine months of
fiscal 2021 from the comparable prior year periods. The increase for the third
quarter of fiscal 2021 was primarily due to higher sales from our Automotive
business. The decrease for the first nine months of fiscal 2021 was primarily
attribute to lower sales from our Automotive business, and to a lesser extent,
lower sales from our Audio, Video and Broadcast business.
Net revenues from Wired and Wireless increased, in terms of absolute dollar, in
the third quarter but decreased in the first nine months of fiscal 2021 from the
comparable prior year periods. The increase for the third quarter of fiscal 2021
was primarily due to higher sales from our Wired and Wireless businesses. The
decrease for the first nine months of fiscal 2021 was primarily due to lower
sales from Wireless business with an industry-wide global slowdown in the ramp
of 5G.
Net revenues from Data Center decreased, in terms of absolute dollar, in the
third quarter but increased the first nine months of fiscal 2021 from the
comparable prior year periods. The decrease for the third quarter of fiscal 2021
was primarily attribute to lower sales from Compute application. The increase
for the first nine months of fiscal 2021 was driven primarily by higher sales
from Compute application.
Net Revenues by Geography
Geographic revenue information reflects the geographic location of the
distributors, original equipment manufacturers (OEMs) or contract manufacturers
who purchased our products. This may differ from the geographic location of the
end customers. Net revenues by geography for the third quarter and the first
nine months of fiscal 2021 and 2020 were as follows:
Three Months Ended Nine Months Ended
December 28, January 2, December 28,
(In millions) January 2, 2021 % Change 2019 2021 % Change 2019
North America $ 236.2 16 $ 203.9 $ 646.3 2 $ 636.3
Asia Pacific 356.1 4 343.4 1,115.0 (7) 1,197.5
Europe 152.4 28 118.6 381.3 (4) 395.7
Japan 58.7 2 57.6 154.0 (13) 177.0
Total net revenues $ 803.4 11 $ 723.5 $ 2,296.6 (5) $ 2,406.5
Net revenues in North America increased in the third quarter and the first nine
months of fiscal 2021 from the comparable prior year periods. The increases were
primarily due to strong sales from our Test, Measurement & Emulation business.
Net revenues in Asia Pacific increased in the third quarter but decreased in the
first nine months of fiscal 2021 from the comparable prior year periods. The
increase for the third quarter of fiscal 2021 was primarily due to higher sales
from our Audio, Video and Broadcast and Automotive businesses. The decrease for
the nine months of fiscal 2021 was primarily due to lower sales from our
Wireless business with an industry-wide slowdown in the ramp of 5G wireless
networks.
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Net revenues inEurope increased in the third quarter but decreased in the first nine months of fiscal 2021 from the comparable prior year periods. The increase for the third quarter of fiscal 2021 was primarily due to higher sales from our Test, Measurement & Emulation business. The decrease for the first nine months of fiscal 2021 was primarily due to lower sales from our Wireless and Automotive businesses. Net revenues inJapan increased in the third quarter of fiscal 2021 but decreased in the first nine months of fiscal 2021 from the comparable prior year periods. The increase for the third quarter of fiscal 2021 was primarily due to higher sales from our Wireless business. The decrease for the first nine months of fiscal 2021 was primarily due to lower sales from our Automotive and Audio, Video and Broadcast businesses. Gross Margin Three Months Ended Nine Months Ended Change December 28, Change December 28, (In millions) January 2, 2021 2019 January 2, 2021 2019 Gross margin$ 547.0 13 %$ 483.5 $ 1,582.6 - %$ 1,586.6 Percentage of net revenues 68.1 % 66.8 % 68.9 % 65.9 % Gross margin as a percentage of net revenue was higher in both the third quarter and the first nine months of fiscal 2021 from the comparable prior year periods. The higher gross margin percentage for the third quarter of fiscal 2021 was driven primarily by favorable change in the customer mix within our Wireless business and favorable change in end market mix, as the percentage of revenue derived from our Test, Measurement & Emulation business, which has relatively higher gross margin, increased. The gross margin for the third quarter of fiscal 2021 was partially offset by the increase of revenue from our Automotive business with relatively lower gross margin. The higher gross margin percentage for the first nine months of fiscal 2021 was driven primarily by favorable changes in the end market mix, as the percentage of revenue derived from our Test, Measurement & Emulation business increased and revenue from our Wireless business, which has relatively lower gross margin, decreased. Gross margin may be affected in the future due to multiple factors, including but not limited to those set forth in Item 1A. "Risk Factors," included in Part II of this Form 10-Q, shifts in the mix of customers and products, the COVID-19 pandemic, competitive-pricing pressure, manufacturing-yield issues and wafer pricing. We expect to mitigate any adverse impacts from these factors by continuing to improve yields on our Advanced Products, manufacturing efficiencies, and average selling price management. However, continuing growth in our Wireless business driven by the global deployment ramp of 5G wireless networks would negatively impact gross margin in the future. Price erosion is common in the semiconductor industry, due to advances in product architecture and greater integration of functions that historically has been driven by process technology but increasingly will depend on other means of integration like advanced packaging. In order to compete effectively, we strive to strike a balance between manufacturing cost and price structure to maintain acceptable margins. Research and Development Three Months Ended Nine Months Ended January 2, 2021 Change December 28, January 2, 2021 Change December 28, (In millions) 2019 2019 Research and development$ 235.0 11 %$ 211.5 $ 664.8 4 %$ 638.6 Percentage of net revenues 29 % 29 % 29 % 27 % R&D spending increased by$23.5 million , or 11%, for the third quarter of fiscal 2021 from the comparable prior year period. The increase for the third quarter of fiscal 2021 was primarily due to increase in deferred compensation, higher stock-based compensation as well as 7nm product development. R&D spending increased by$26.2 million , or 4%, for the nine months of fiscal 2021 from the comparable prior year period. The increase for the first nine months of fiscal 2021 was primarily attributable to increases in employee compensation (including stock-based compensation) and deferred compensation. 33 -------------------------------------------------------------------------------- Table of Contents We plan to continue to selectively invest in R&D efforts in areas such as new products and more advanced process development, IP cores and software development environments. We may also consider acquisitions to complement our strategy for technology leadership and engineering resources in critical areas.
Selling, General and Administrative
Three Months Ended Nine Months Ended
January 2, 2021 Change December 28, January 2, 2021 Change December 28,
(In millions) 2019 2019
Selling, general and
administrative $ 136.7 25 % $ 109.6 $ 355.9 8 % $ 328.6
Percentage of net revenues 17 % 15 % 16 % 14 %
Selling, general and administrative expenses increased by
Stock-Based Compensation
Three Months Ended Nine Months Ended
January 2, 2021 Change December 28, January 2, 2021 Change December 28,
(In millions) 2019 2019
Stock-based compensation
included in:
Cost of revenues $ 3.5 17 % $ 3.0 $ 9.1 9 % $ 8.4
Research and development 40.2 28 % 31.5 106.8 24 % 86.1
Selling, general and
administrative 22.6 45 % 15.7 59.3 23 % 48.2
$ 66.3 32 % $ 50.2 $ 175.2 23 % $ 142.7
The stock-based compensation expense increased 32% for the third quarter and 23%
for the first nine months of fiscal 2021 as compared to the same prior year
periods. The increases were primarily related to higher expenses associated with
RSUs to remain competitive in compensation, as we granted more RSUs at a higher
fair value than in the prior years.
In order to retain our current workforce and maintain continuous business
operations during the pending period of the Merger, we implemented an employee
retention bonus program in December 2020 for certain employees consisting of
both cash bonuses and RSUs. The cash bonuses are payable in separate
installments through the later of December 2021 or the closing of the Merger,
and the RSUs will vest in equal annual installments over three years, with
payment and vesting contingent upon a participant employee's continuing
employment with us. The retention bonus program resulted in the issuance of 721
thousand RSUs. The stock-based compensation expense with respect to the
retention bonus program was immaterial for the third quarter of fiscal 2021.
Interest and Other Income (Expense), Net
Three Months Ended Nine Months Ended
Change December 28,
(In millions) January 2, 2021 December 28, 2019 January 2, 2021 Change 2019
Interest and other
income (expense), net $ 3.7 (42) % $ 6.4 $ (19.2) (163) % $ 30.4
Percentage of net
revenues - % 1 % (1) % 1 %
34-------------------------------------------------------------------------------- Table of Contents Interest and other income (expense) was a net other income of$3.7 million in the third quarter of fiscal 2021, as compared to$6.4 million in the same prior year period. For the first nine months of fiscal 2021, interest and other income (expense) was a net other expense of$19.2 million compared to a net other income of$30.4 million in the same prior year period. The decreases were primarily due to lower interest income from the investment portfolio, higher interest expenses, less gain from sale of investments, partially offset by higher gain on deferred compensation. Provision for Income Taxes Three Months Ended Nine Months Ended January 2, 2021 Change December 28, 2019 January 2, 2021 Change December 28, (In millions) 2019 Provision for income taxes$ 5.2 35 % $ 3.8 $ 75.5 448 %$ 13.8 Percentage of net revenues 1 % 1 % 3 % 1 % Effective tax rate 3 % 2 % 14 % 2 % The increase in the effective tax rate in the third quarter of fiscal 2021 as compared to the same prior year period was primarily due to net tax benefits recognized in the prior period for the intercompany transfer of intellectual property, the release of reserves for uncertain tax positions and the benefit of interest accrued on tax refunds, partially offset by an increase in the beneficial impact of income earned in lower tax rate jurisdictions for the current period. The increase in the effective tax rate in the first nine months fiscal 2021 as compared to the same prior year period was primarily due to the recognition of prior and current year impacts of including stock-based compensation in the intercompany R&D cost sharing arrangement as a result of a decision in the Altera tax case and a decrease in excess tax benefits with respect to stock-based compensation. The difference between theU.S. federal statutory tax rate of 21% and our effective tax rate in all periods presented was primarily due to the beneficial impact of income earned in lower tax rate jurisdictions and excess tax benefits with respect to stock-based compensation, which was partially offset by tax on GILTI. In addition, the first nine months of fiscal 2021 included the recognition of prior period tax and interest related to impacts of including stock-based compensation in the intercompany R&D cost sharing arrangement. OnJune 22, 2020 , theUnited States Supreme Court denied certiorari in the Altera tax case.Xilinx is not a party to the proceedings but is subject to the findings of the case. The Altera tax case concerns related party R&D cost sharing arrangements and whether stock-based compensation should be included in the pool of costs to be shared. With theSupreme Court's decision not to hear the Altera case, the decision of the 9th Circuit (which applies to taxpayers such asXilinx ) that stock-based compensation is to be included in the pool of costs to be shared remains in place. During the fiscal quarter endedJune 27, 2020 , we recorded a one-time charge of$56.8 million for prior year taxes and interest representing the cumulative adverse impact for fiscal 2017 through fiscal 2020. Despite the decision in the Altera case, we have concluded the related law remains unsettled and we will continue to monitor developments and the potential effect on our consolidated financial statements and tax filings.
Financial Condition, Liquidity and Capital Resources
We have historically used a combination of cash flows from operations and equity, as well as debt financing to support ongoing business activities, acquire or invest in critical or complementary technologies, purchase facilities and capital equipment, repurchase our common stock and debentures under our repurchase program, pay dividends and finance working capital. Additionally, our investments in debt securities are liquid and available for future business needs. To date, COVID-19 has not had a significant impact on our liquidity, cash flows or capital resources. However, the ongoing COVID-19 pandemic and the resulting disruption and volatility in the global capital markets may continue, which, depending on future developments, could impact our capital resources and liquidity in the future. As ofJanuary 2, 2021 , we had cash, cash equivalents and short-term investments of$3.32 billion and working capital of$2.85 billion . As ofMarch 28, 2020 , cash, cash equivalents and short-term investments were$2.27 billion and working capital was$1.82 billion . As ofJanuary 2, 2021 , we had$682.0 million of cash and cash equivalents and short-term investments held in our non-U.S. jurisdictions. Substantially all$682.0 million of cash, cash equivalents and short-term investments held by our non-U.S. entities is available for use in theU.S. without incurring additionalU.S federal income taxes. 35 --------------------------------------------------------------------------------
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Operating Activities -During the first nine months of fiscal 2021, our operations generated net positive cash flow of$853.2 million , which was$7.7 million higher than the$845.5 million generated during the first nine months of fiscal 2020. The positive cash flow from operations generated during the first nine months of fiscal 2021 was primarily from net income as adjusted for non-cash related items, increases in accrued liabilities and income tax payable. These items were partially offset by an increase in other assets. Accounts receivable decreased by$3.4 million and days sales outstanding increased to 33 days atJanuary 2, 2021 from 31 days atMarch 28, 2020 . The decrease was primarily due to timing of shipment and collection. We had no collectability issues and our accounts receivable remained current as ofJanuary 2, 2021 . Our inventory levels as ofJanuary 2, 2021 were$4.2 million lower at$300.1 million compared to$304.3 million atMarch 28, 2020 , but the inventory days increased to 118 days atJanuary 2, 2021 from 106 days atMarch 28, 2020 . Investing Activities -Net cash used in investing activities was$1.84 billion during the first nine months of fiscal 2021, as compared to$1.3 million net cash used during the first nine months of fiscal 2020. Net cash used in investing activities during the first nine months of fiscal 2021 consisted primarily of$1.78 billion purchases of available-for-sale securities net of proceeds from sale and maturity of available-for-sale securities,$36.8 million for purchases of property, plant and equipment and software and$16.1 million for other investing activities. Financing Activities -Net cash provided by financing activities was$339.3 million in the first nine months of fiscal 2021, as compared to$1,096.6 million of net cash used in the first nine months of fiscal 2020. Net cash provided by financing activities during the first nine months of fiscal 2021 consisted primarily of$744.4 million proceeds from issuance of the 2030 Notes, which was partially offset by$53.7 million of cash payment to repurchase shares of common stock,$278.7 million of dividend payment to stockholders,$34.9 million payment related to other financing activities and$58.0 million of payment for RSU withholdings.
Contractual Obligations
We lease some of our facilities, office buildings and land under non-cancelable operating leases that expire at various dates throughAugust 2029 . See "Note 15. Commitments" to our condensed consolidated financial statements, included in Part I. "Financial Information," for a schedule of our operating lease commitments as ofJanuary 2, 2021 and additional information about operating leases. Due to the nature of our business, we depend entirely upon subcontractors to manufacture our silicon wafers and provide assembly and some test services. The lengthy subcontractor lead times require us to order the materials and services in advance, and we are obligated to pay for the materials and services when completed. As ofJanuary 2, 2021 , we had$199.1 million of outstanding inventory and other non-cancelable purchase obligations to subcontractors. We expect to receive and pay for these materials and services in the next three to six months, as the products meet delivery and quality specifications. As ofJanuary 2, 2021 , we had$31.7 million commitments primarily related to open purchase orders from ordinary operations. These commitments expire at various dates throughAugust 2025 . As ofJanuary 2, 2021 , we had$472.5 million of liabilities classified as long-term income taxes payable in the condensed consolidated balance sheets. Of the$472.5 million ,$363.9 million was the remaining long-term portion of the one-time transition tax that resulted from the enactment of the Tax Cuts and Jobs Act (TCJA), which will be payable in five annual installments. The residual balance of$108.6 million in the long-term income taxes payable is for uncertain tax positions and related interest and penalties. Due to the inherent uncertainty with respect to the timing of future cash outflows associated with such liabilities, we are unable to reliably estimate the timing of cash settlement with the respective taxing authorities.
Off-Balance-Sheet Arrangements
As of
Liquidity and Capital Resources
Cash generated from operations is used as our primary source of liquidity and
capital resources. Additional sources of liquidity are cash, cash equivalents
and short-term investments. We believe our cash, cash equivalents and short-term
investments along with cash generated from operations will be sufficient to fund
operations, including capital expenditures, working capital needs, debt-related
payments and other business requirements over the next 12 months.
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Table of Contents During the first nine months of fiscal 2021, we repurchased 0.7 million shares of common stock in the open market for a total of$53.7 million . During the first nine months of fiscal 2020, we repurchased 7.2 million shares of common stock for a total of$738.2 million in the open market and through an accelerated share repurchase program with independent financial institutions. During the first nine months of fiscal 2021, we paid$278.7 million in cash dividends to stockholders, representing$0.38 per common share. During the first nine months of fiscal 2020, we paid$280.4 million in cash dividends to stockholders, representing$0.37 per common share. As required under the Merger Agreement, our quarterly dividends have been suspended until a date that is at least 12 months after the signing date of the Merger Agreement. Our common stock and debentures repurchase program and dividend policy could be impacted by, among other items, our views on potential future capital requirements relating to R&D, investments and acquisitions, legal risks, principal and interest payments on our debentures and other strategic investments. During the first nine months of fiscal 2021, we issued$750 million debt, which further strengthens our liquidity and capital resources. We anticipate that existing sources of liquidity and cash flows from operations will be sufficient to satisfy our cash needs for the foreseeable future. We will continue to evaluate opportunities for investments to obtain additional wafer capacity, to procure additional capital equipment and facilities, to develop new products, and to potentially acquire technologies or businesses that could complement our business. However, certain risks and other factors, including those discussed in Item 1A included in Part II. "Risk Factors" and below, could affect our cash positions adversely.
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