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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 3, 2020
Or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
(Commission File Number) 000-30419 
ON SEMICONDUCTOR CORPORATION
(Exact name of registrant as specified in its charter)  
Delaware 36-3840979
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
5005 E. McDowell Road
Phoenix, AZ 85008
(602244-6600

(Address, zip code and telephone number, including area code, of principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareONThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act
Large Accelerated Filer
  
Accelerated filer 

Non-accelerated filer 
  
Smaller reporting company
Emerging growth company

If emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  x

The number of shares outstanding of the issuer's class of common stock as of the close of business on May 6, 2020:
Title of Each ClassNumber of Shares
Common Stock, par value $0.01 per share410,020,679




ON SEMICONDUCTOR CORPORATION FORM 10-Q

TABLE OF CONTENTS
 
Part I: Financial Information
Item 1. Financial Statements (unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II: Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
Signatures

(See the glossary of selected terms immediately following this table of contents for definitions of certain abbreviated terms)


ON SEMICONDUCTOR CORPORATION
FORM 10-Q

GLOSSARY OF SELECTED ABBREVIATED TERMS*

Abbreviated TermDefined Term
1.00% Notes1.00% Convertible Senior Notes due 2020
1.625% Notes1.625% Convertible Senior Notes due 2023
Amended Credit AgreementCredit Agreement, dated as of April 15, 2016, as subsequently amended, by and among the Company, as borrower, the several lenders party thereto, Deutsche Bank AG, New York Branch, as administrative agent and collateral agent, and certain other parties, providing for the Revolving Credit Facility and the Term Loan “B” Facility
Amended and Restated SIPON Semiconductor Corporation Amended and Restated Stock Incentive Plan, as amended
AMISAMIS Holdings, Inc.
AptinaAptina, Inc.
ASICApplication specific integrated circuit
ASUAccounting Standards Update
DSPDigital signal processing
EPAEnvironmental Protection Agency
ESPPON Semiconductor Corporation 2000 Employee Stock Purchase Plan, as amended
Exchange ActSecurities Exchange Act of 1934, as amended
FairchildFairchild Semiconductor International, Inc.
FASBFinancial Accounting Standards Board
FreescaleFreescale Semiconductor, Inc.
ICIntegrated circuit
IoTInternet-of-Things
IPIntellectual property
LEDLight-emitting diode
LIBO RateA base rate per annum equal to the London Interbank Offered Rate as administered by the International Exchange Benchmark Administration
LiDARLight detection and ranging
MCUMicrocontroller unit
MOSFETMetal oxide semiconductor field effect transistor
MotorolaMotorola Inc.
ODMOriginal device manufacturers
OEMOriginal equipment manufacturers
PRPPotentially Responsible Party
QuantennaQuantenna Communications, Inc.
Revolving Credit FacilityA $1.97 billion revolving credit facility created pursuant to the Amended Credit Agreement
RSURestricted stock unit
SECSecurities and Exchange Commission
SoCSystem on chip
Securities ActSecurities Act of 1933, as amended
Term Loan “B” FacilityA $2.4 billion term loan “B” facility created pursuant to the Amended Credit Agreement
Wi-FiWireless radio technologies compliant with Institute of Electrical and Electronics Engineers Standard 802.11b and commonly used in wireless local area networking devices
WSTSWorld Semiconductor Trade Statistics

* Terms used, but not defined, within the body of the Form 10-Q are defined in this Glossary.



PART I: FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)
ON SEMICONDUCTOR CORPORATION
CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share data)
(unaudited)

April 3,
2020
December 31,
2019
Assets
Cash and cash equivalents$1,982.0  $894.2  
Receivables, net652.0  705.0  
Inventories1,251.9  1,232.4  
Other current assets146.4  188.4  
Total current assets4,032.3  3,020.0  
Property, plant and equipment, net2,579.9  2,591.6  
Goodwill1,663.4  1,659.2  
Intangible assets, net558.2  590.5  
Deferred tax assets331.0  307.8  
Other assets256.0  256.4  
Total assets$9,420.8  $8,425.5  
Liabilities, Non-Controlling Interest and Stockholders’ Equity
Accounts payable$503.9  $543.6  
Accrued expenses and other current liabilities542.6  538.8  
Current portion of long-term debt689.6  736.0  
Total current liabilities1,736.1  1,818.4  
Long-term debt4,043.0  2,876.5  
Deferred tax liabilities60.8  60.2  
Other long-term liabilities343.3  346.3  
Total liabilities6,183.2  5,101.4  
Commitments and contingencies (Note 9)
ON Semiconductor Corporation stockholders’ equity:
Common stock ($0.01 par value, 1,250,000,000 shares authorized, 568,774,542 and 565,562,607 issued, 410,004,566 and 411,312,664 outstanding, respectively)
5.7  5.7  
Additional paid-in capital3,830.3  3,809.5  
Accumulated other comprehensive loss(66.5) (54.3) 
Accumulated earnings1,177.3  1,191.3  
Less: Treasury stock, at cost: 158,769,976 and 154,249,943 shares, respectively
(1,731.9) (1,650.5) 
Total ON Semiconductor Corporation stockholders’ equity3,214.9  3,301.7  
Non-controlling interest22.7  22.4  
Total stockholders' equity3,237.6  3,324.1  
Total liabilities and stockholders' equity$9,420.8  $8,425.5  

See accompanying notes to consolidated financial statements
4

ON SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(in millions, except per share data)
(unaudited)
 Quarters Ended
 April 3,
2020
March 29,
2019
Revenue$1,277.9  $1,386.6  
Cost of revenue (exclusive of amortization shown below)875.2  872.9  
Gross profit402.7  513.7  
Operating expenses:
Research and development171.0  151.8  
Selling and marketing76.8  77.1  
General and administrative71.2  72.9  
Amortization of acquisition-related intangible assets32.3  25.7  
Restructuring, asset impairments and other charges, net32.8  5.6  
Intangible asset impairment  1.2  
Total operating expenses384.1  334.3  
Operating income18.6  179.4  
Other income (expense), net:
Interest expense(42.5) (31.7) 
Interest income1.9  2.5  
Other income0.1  2.1  
Other income (expense), net(40.5) (27.1) 
Income (loss) before income taxes(21.9) 152.3  
Income tax (provision) benefit8.2  (38.2) 
Net income (loss)(13.7) 114.1  
Less: Net income attributable to non-controlling interest(0.3)   
Net income (loss) attributable to ON Semiconductor Corporation$(14.0) $114.1  
Comprehensive income (loss), net of tax:
Net income (loss)$(13.7) $114.1  
Foreign currency translation adjustments0.6  0.1  
Effects of cash flow hedges(12.8) (5.9) 
Other comprehensive loss, net of tax(12.2) (5.8) 
Comprehensive income (loss)(25.9) 108.3  
Comprehensive income attributable to non-controlling interest(0.3)   
Comprehensive income (loss) attributable to ON Semiconductor Corporation$(26.2) $108.3  
Net income (loss) per common share attributable to ON Semiconductor Corporation:
Basic$(0.03) $0.28  
Diluted$(0.03) $0.27  
Weighted-average common shares outstanding:
Basic410.6  410.6  
Diluted410.6  417.7  

See accompanying notes to consolidated financial statements
5

ON SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in millions, except share data) 
(unaudited)
Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive LossTreasury StockNon-Controlling Interest
Number of sharesAt Par ValueAccumulated EarningsNumber of sharesAt CostTotal Equity
Balance at December 31, 2019565,562,607  $5.7  $3,809.5  $(54.3) $1,191.3  (154,249,943) $(1,650.5) $22.4  $3,324.1  
Shares issued pursuant to the ESPP487,438  —  5.1  —  —  —  —  —  5.1  
RSUs and stock grant awards issued2,724,497  —  —  —  —  —  —  —    
Shares withheld for employee taxes on RSUs—  —  —  —  —  (908,620) (16.0) —  (16.0) 
Share-based compensation expense—  —  15.7  —  —  —  —  —  15.7  
Repurchase of common stock—  —  —  —  —  (3,611,413) (65.4) —  (65.4) 
Comprehensive (loss) income—  —  —  (12.2) (14.0) —  —  0.3  (25.9) 
Balance at April 3, 2020568,774,542  $5.7  $3,830.3  $(66.5) $1,177.3  (158,769,976) $(1,731.9) $22.7  $3,237.6  

Balance at December 31, 2018558,701,620  $5.6  $3,702.3  $(37.9) $979.6  (144,867,393) $(1,478.0) $22.5  $3,194.1  
Stock option exercises70,717  —  0.5  —  —  —  —  —  0.5  
RSUs and stock grant awards issued3,544,754    —  —  —  —  —  —    
Shares withheld for employee taxes on RSUs—  —  —  —  —  (1,224,929) (26.1) —  (26.1) 
Share-based compensation expense—  —  19.7  —  —  —  —  —  19.7  
Repurchase of common stock—  —  —  —  —  (4,410,189) (75.8) —  (75.8) 
Comprehensive (loss) income—  —  —  (5.8) 114.1  —  —    108.3  
Balance at March 29, 2019562,317,091  $5.6  $3,722.5  $(43.7) $1,093.7  (150,502,511) $(1,579.9) $22.5  $3,220.7  

See accompanying notes to consolidated financial statements

6

ON SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions) 
(unaudited)
 Quarters Ended
 April 3,
2020
March 29,
2019
Cash flows from operating activities:
Net income (loss)$(13.7) $114.1  
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization161.2  135.8  
Loss on sale or disposal of fixed assets0.2  0.4  
Amortization of debt discount and issuance costs3.0  3.2  
Share-based compensation expense15.7  19.7  
Non-cash interest on convertible notes9.5  9.1  
Non-cash asset impairment charges1.4    
Intangible asset impairment charges  1.2  
Change in deferred tax balances(19.0) 29.0  
Other  (4.3) 
Changes in assets and liabilities:
Receivables52.7  (17.4) 
Inventories(19.5)   
Other assets5.9  (0.4) 
Accounts payable(12.4) (58.8) 
Accrued expenses and other current liabilities(17.6) (98.4) 
Other long-term liabilities(1.4) 5.0  
Net cash provided by operating activities166.0  138.2  
Cash flows from investing activities:
Purchase of property, plant and equipment(132.3) (157.0) 
Deposits utilized (made) for purchase of property, plant and equipment2.2  (10.1) 
Purchase of business, net of cash acquired(4.5)   
Settlement of purchase price from previous acquisition26.0    
Net cash used in investing activities(108.6) (167.1) 
Cash flows from financing activities:
Proceeds for the issuance of common stock under the ESPP7.5  7.4  
Proceeds from exercise of stock options  0.5  
Payment of tax withholding for RSUs(16.0) (26.1) 
Repurchase of common stock(65.4) (75.0) 
Borrowings under debt agreements1,165.0  4.5  
Repayment of long-term debt(56.0) (12.2) 
Acquisition related payments(4.9)   
Payment of finance lease obligations  (0.2) 
Net cash provided by (used in) financing activities1,030.2  (101.1) 
Effect of exchange rate changes on cash, cash equivalents and restricted cash0.2    
Net increase (decrease) in cash, cash equivalents and restricted cash1,087.8  (130.0) 
Cash, cash equivalents and restricted cash, beginning of period (Note 5)894.2  1,087.1  
Cash, cash equivalents and restricted cash, end of period (Note 5)$1,982.0  $957.1  

See accompanying notes to consolidated financial statements
7

ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 1: Background and Basis of Presentation

ON Semiconductor Corporation, together with its wholly and majority-owned subsidiaries ("ON Semiconductor," "we," “us,” “our,” or the "Company"), uses a thirteen-week fiscal quarter accounting period for the first three fiscal quarters of each year, with the first quarter of 2020 having ended on April 3, 2020 and each fiscal year ending on December 31. The quarter ended April 3, 2020 and March 29, 2019 contained 94 and 88 days, respectively. As of April 3, 2020, the Company was organized into the following three operating and reportable segments: the Power Solutions Group ("PSG"), the Advanced Solutions Group ("ASG") and the Intelligent Sensing Group ("ISG"). Additional details on the Company’s operating and reportable segments are included in Note 2: ''Revenue and Segment Information.''

The accompanying unaudited financial statements as of and for the quarter ended April 3, 2020 have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for unaudited interim financial information. Accordingly, the unaudited financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. The balance sheet as of December 31, 2019 was derived from the Company's audited financial statements but does not include all disclosures required by GAAP for audited financial statements. In the opinion of the Company's management, the interim information includes all adjustments, which includes normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The footnote disclosures related to the interim financial information included herein are also unaudited. Such financial information should be read in conjunction with the consolidated financial statements and related notes thereto for the year ended December 31, 2019 included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which was filed with the SEC on February 19, 2020 (the “2019 Form 10-K”).

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Management evaluates these estimates and judgments on an ongoing basis and bases its estimates on experience, current and expected future conditions, third-party evaluations and various other assumptions that management believes are reasonable under the circumstances. Significant estimates have been used by management in conjunction with the following: (i) future payouts for customer incentives and amounts subject to allowances, returns and warranties; (ii) measurement of valuation allowances relating to inventories; (iii) fair values of share-based compensation; and (iv) measurement of valuation allowances against deferred tax assets and evaluations of unrecognized tax benefits. Even though the novel coronavirus disease 2019 (“COVID-19”) pandemic impacted the demand for the Company's products and gross margin, it did not have a significant impact on these estimates. Additionally, during periods where it becomes applicable, significant estimates will be used by management in determining the future cash flows used to assess and test for impairment of indefinite-lived intangible assets, long-lived assets and goodwill and in assumptions used in connection with business combinations. Actual results may differ from the estimates and assumptions used in the consolidated financial statements and related notes.

The Company assessed certain accounting matters that generally require consideration of forecasted financial information in the context of the information reasonably available and the unknown future impact of the COVID-19 pandemic as of April 3, 2020, and through the date of this Form 10-Q. The accounting matters assessed included, but were not limited to, the allowance for doubtful accounts, share based compensation, inventory valuation and corresponding reserves, carrying value of indefinite-lived assets, other long-lived assets and goodwill, valuation allowance for tax assets, contingencies and revenue recognition. While there was not a material impact to the consolidated financial statements as of and for the quarter ended April 3, 2020, resulting from these assessments, future assessment of the current expectations, including of the magnitude and duration of the COVID-19 pandemic, as well as other factors, could result in a material adverse impact to the consolidated financial statements in future reporting periods.

8

ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)

Note 2: Revenue and Segment Information

The Company is organized into three operating and reportable segments consisting of PSG, ASG and ISG. Because many products are sold into different end-markets, the total revenue reported for a segment is not indicative of actual sales in the end-market associated with that segment, but rather is the sum of the revenue from the product lines assigned to that segment. These segments represent the Company’s view of the business and its gross profit is used to evaluate progress of major initiatives and allocation of resources.

Revenue and gross profit for the Company’s operating and reportable segments are as follows (in millions):
PSGASGISGTotal
For the quarter ended April 3, 2020:  
Revenue from external customers$623.9  $467.1  $186.9  $1,277.9  
Gross profit$178.6  $174.8  $62.8  $416.2  
For the quarter ended March 29, 2019:  
Revenue from external customers$704.2  $494.1  $188.3  $1,386.6  
Gross profit$249.0  $200.1  $74.9  $524.0  

Gross profit is exclusive of the amortization of acquisition-related intangible assets. Depreciation expense is included in segment gross profit. Reconciliation of segment gross profit to consolidated gross profit is provided below (in millions):
Quarters Ended
April 3, 2020March 29, 2019
Gross profit for reportable segments$416.2  $524.0  
Less: Unallocated manufacturing costs(13.5) (10.3) 
Consolidated gross profit$402.7  $513.7  

Revenue for the Company's operating and reportable segments disaggregated into geographic locations based on sales billed from the respective country and sales channels are as follows (in millions):
Quarter Ended April 3, 2020
PSGASGISGTotal
Geographic Location
Singapore$194.3  $172.6  $41.4  $408.3  
Hong Kong192.0  91.9  32.3  316.2  
United Kingdom105.1  76.8  45.1  227.0  
United States72.7  77.3  34.5  184.5  
Other59.8  48.5  33.6  141.9  
Total$623.9  $467.1  $186.9  $1,277.9  
Sales Channel
Distributors$386.3  $213.6  $103.4  $703.3  
OEM/ODM194.2  219.4  73.5  487.1  
Electronic Manufacturing Service Providers43.4  34.1  10.0  87.5  
Total$623.9  $467.1  $186.9  $1,277.9  

9

ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)

Quarter Ended March 29, 2019
PSGASGISGTotal
Geographic Location
Singapore$225.0  $153.0  $47.2  $425.2  
Hong Kong200.6  112.0  25.4  338.0  
United Kingdom125.8  79.5  41.6  246.9  
United States88.9  92.6  32.1  213.6  
Other63.9  57.0  42.0  162.9  
Total$704.2  $494.1  $188.3  $1,386.6  
Sales Channel
Distributors$423.7  $234.8  $106.3  $764.8  
OEM236.2  221.1  71.5  528.8  
Electronic Manufacturing Service Providers44.3  38.2  10.5  93.0  
Total$704.2  $494.1  $188.3  $1,386.6  

The Company operates in various geographic locations. Sales to unaffiliated customers have little correlation with the location of manufacturers. It is, therefore, not meaningful to present operating profit by geographical location.

The Company does not discretely allocate assets to its operating segments, nor does management evaluate operating segments using discrete asset information. The Company’s consolidated assets are not specifically ascribed to its individual reportable segments. Rather, assets used in operations are generally shared across the Company’s operating and reportable segments.

Property, plant and equipment, net by geographic location, is summarized as follows (in millions):
As of
April 3, 2020December 31, 2019
United States$633.3  $616.7  
South Korea487.4  485.4  
Philippines426.4  433.5  
China238.1  243.6  
Japan216.3  218.1  
Czech Republic213.8  213.4  
Malaysia195.4  204.4  
Other169.2  176.5  
Total$2,579.9  $2,591.6  

Note 3: Recent Accounting Pronouncements

Adopted:

ASU 2020-04 – Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”)

In March 2020, the FASB issued ASU 2020-04 to address constituents’ concerns about certain accounting consequences that could result from the global markets’ anticipated transition away from the use of the LIBO Rate and other interbank offered rates to alternative reference rates. ASU 2020-04 includes optional expedients and the relief provided is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBO Rate or another reference rate expected to be discontinued because of reference rate reform. These amendments are effective for entities as of March 12, 2020 through December 31, 2022. The Company has elected to apply the provisions of
10

ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)

ASU 2020-04 for its contracts and hedging relationships as of March 12, 2020. The adoption of ASU 2020-04 did not have a material impact on its consolidated financial statements.

ASU 2019-12 – Income taxes (Topic 740): Simplifying the accounting for income taxes (“ASU 2019-12”)

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company early adopted ASU 2019-12 during the quarter ended April 3, 2020. The adoption of ASU 2019-12 did not have a material impact on its consolidated financial statements.

Note 4: Restructuring, Asset Impairments and Other, Net

Details of restructuring, asset impairments and other charges are as follows (in millions):  
RestructuringAsset Impairments (1)OtherTotal
Quarter ended April 3, 2020
Voluntary separation program$27.5  $  $  $27.5  
General workforce reduction3.4      3.4  
Post-Quantenna acquisition restructuring0.4      0.4  
Other  1.4  0.1  1.5  
Total$31.3  $1.4  $0.1  $32.8  
(1) Impairment of lease right-of-use assets.

Summary of changes in accrued restructuring from December 31, 2019 to April 3, 2020 is as follows (in millions):
As ofAs of
December 31, 2019ChargesUsageApril 3, 2020
Employee separation charges$0.1  $31.3  $(3.6) $27.8  
Other0.1      0.1  
Total$0.2  $31.3  $(3.6) $27.9  

Voluntary Separation Program and Involuntary Separation Program

During the first quarter of 2020, the Company offered a voluntary separation program (the "VSP") to employees that met certain criteria. Participation was subject to management review and approval. The purpose of the VSP was to allow employees to voluntarily separate employment during a specific time and with enhanced separation compensation and benefits, thereby enabling the Company to optimize its cost structure and progress towards its target financial model. Management approved 243 employees for participation in the VSP during the quarter ended April 3, 2020, after which the VSP was terminated. The aggregate expense for the VSP amounted to $27.5 million, which remained accrued as of April 3, 2020 and is expected to be paid during the second quarter of 2020 when the employees exit.

The Company will also implement an involuntary separation program (the “ISP”) during the second quarter of 2020. Under the ISP, the Company expects to notify an estimated 215 additional employees of their employment termination, with aggregate severance costs amounting to approximately $15.0 million.

Other General Workforce Reduction

In addition to the VSP and the ISP, the Company took other general workforce reduction measures during the first quarter of 2020. In connection with such measures, the Company notified approximately 88 employees of their employment termination, all of whom exited by April 3, 2020. During the quarter ended April 3, 2020, the aggregate expense for these other general workforce reduction measures amounted to $3.4 million.

11

ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)

Post-Quantenna acquisition restructuring

Following the acquisition of Quantenna, the Company implemented a cost-reduction plan resulting in the elimination of positions, primarily as a result of redundancies. During the quarter ended April 3, 2020, the Company terminated an additional ten employees and severance costs amounted to $0.4 million. All employees have exited and severance benefits have been paid out. This program has closed and no further expenses are expected to be incurred.

Note 5: Balance Sheet Information and Other

Goodwill
Changes in the goodwill balance from December 31, 2019 through April 3, 2020 were as follows (in millions):

Net balance as of December 31, 2019$1,659.2  
Addition due to business combination4.2  
Net balance as of April 3, 2020$1,663.4  

Goodwill is tested for impairment annually on the first day of the fourth quarter or more frequently if events or changes in circumstances (each, a "triggering event") would more likely than not reduce the carrying value of goodwill below its fair value. Management considered the general economic decline and the impact of the COVID-19 pandemic, but did not identify any triggering events during the quarter ended April 3, 2020 that would require an interim impairment analysis.

Inventory

Details of Inventory included in the Company’s Consolidated Balance Sheets are as follows (in millions):
As of
April 3, 2020