Principal amount of notes converted

[Table of Contents](#i43c0112b46aa4245817525f4da15c00d_7)THATIC Joint Ventures The Company holds equity interests in two joint ventures (collectively, the THATIC JV) with Higon Information Technology Co., Ltd. (THATIC), a third-party Chinese entity. As of both March 26, 2022 and December 25, 2021, the carrying value of the investment was zero. In February 2016, the Company licensed certain of its intellectual property (Licensed IP) to the THATIC JV, payable over several years upon achievement of certain milestones. The Company also receives a royalty based on the sales of the THATIC JV’s products developed on the basis of such Licensed IP. The Company classifies Licensed IP and royalty income associated with the February 2016 agreement as Licensing gain within operating income. During the three months ended March 26, 2022, the Company recognized $83 million of licensing gain from a milestone achievement and royalty income and during the three months ended March 27, 2021, the Company recognized $4 million of licensing gain from royalty income, both associated with Licensed IP. As of both March 26, 2022 and December 25, 2021, the Company had no receivables from the THATIC JV.In June 2019, the Bureau of Industry and Security of the United States Department of Commerce added certain Chinese entities to the Entity List, including THATIC and the THATIC JV. The Company is complying with U.S. law pertaining to the Entity List designation.NOTE 7 – Debt and Revolving Credit FacilityDebtThe Company’s total debt as of March 26, 2022 and December 25, 2021 consisted of the following:

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  | March 26,2022 |  | December 25,2021 |
|  | (In millions) |
| 2.95% Senior Notes Due 2024 (Xilinx 2024 Notes) | $ | 750  |  |  | $ | —  |  |
| 2.375% Senior Notes Due 2030 (Xilinx 2030 Notes) | 750  |  |  | —  |  |
| 7.50% Senior Notes Due August 2022 (7.50% Notes) | 312  |  |  | 312  |  |
| 2.125% Convertible Senior Notes Due 2026 (2.125% Notes) | 1  |  |  | 1  |  |
|  |  |  |  |
| Total debt (principal amount) | 1,813  |  |  | 313  |  |
| Unamortized debt discount and issuance costs | (26) |  |  | —  |  |
| Total debt (net) | 1,787  |  |  | 313  |  |
| Less: current portion of long-term debt | (312) |  |  | (312) |  |
| Total long-term debt | $ | 1,475  |  |  | $ | 1  |  |

Assumed Xilinx NotesIn connection with the acquisition of Xilinx, the Company assumed $1.5 billion in aggregate principal of Xilinx’s 2.95% and 2.375% Notes (Assumed Xilinx Notes) which were recorded at fair value as of the Acquisition Date. The difference between the fair value at the Acquisition Date and the principal outstanding of the Assumed Xilinx Notes will be amortized through interest expense over the remaining term of the debt. The Assumed Xilinx Notes are general unsecured senior obligations of the Company with semi-annual fixed interest payments due on June 1 and December 1. The indentures governing the Assumed Xilinx Notes contain various covenants which limit the Company’s ability to, among other things, create certain liens on principal property or the capital stock of certain subsidiaries, enter into certain sale and leaseback transactions with respect to principal property, and consolidate or merge with, or convey, transfer or lease all or substantially all of the Company’s assets to another person. 2.125% NotesDuring the three months ended March 26, 2022, the activity on the 2.125% Notes was immaterial. During the three months ended March 27, 2021, holders of the 2.125% Notes converted $25 million principal amount of notes in exchange for approximately 3 million shares of the Company’s common stock at the conversion price of $8.00 per share. The Company recorded a loss of $6 million from these conversions in Other expense, net on its condensed consolidated statements of operations.16
