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 July 4, 2021

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: 001-34841

NXP Semiconductors N.V.

(Exact name of registrant as specified in its charter)

Netherlands	98-1144352
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification number)
60 High Tech Campus	5656 AG
Eindhoven
Netherlands
(Address of principal executive offices)	(Zip code)

	+31	40	2729999
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common shares, EUR 0.20 par value	NXPI	The Nasdaq Global Select Market

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  ☒    No  ☐

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 such files).

Yes  ☒    No  ☐

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 an 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. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ☐    No  ☒

As of July 30, 2021, there were 265,134,880 shares of our common stock, €0.20 par value per share, issued and outstanding.

NXP Semiconductors N.V.

Form 10-Q

For the Fiscal Quarter Ended July 4, 2021

TABLE OF CONTENTS

		Page
Part I
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
Part II
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 5.	Other Information	25
Item 6.	Exhibits	26

PART I — FINANCIAL INFORMATION

Item 1.    Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

($ in millions, unless otherwise stated)

	For the three months ended		For the six months ended
	July 4, 2021	June 28, 2020	July 4, 2021	June 28, 2020
Revenue	2,596	1,817	5,163	3,838
Cost of revenue	(1,174)	(957)	(2,386)	(1,981)
Gross profit	1,422	860	2,777	1,857
Research and development	(476)	(402)	(937)	(827)
Selling, general and administrative	(234)	(222)	(456)	(455)
Amortization of acquisition-related intangible assets	(139)	(380)	(319)	(761)
Total operating expenses	(849)	(1,004)	(1,712)	(2,043)
Other income (expense)	—	(1)	—	109
Operating income (loss)	573	(145)	1,065	(77)
Financial income (expense):
Other financial income (expense)	(100)	(96)	(187)	(174)
Income (loss) before income taxes	473	(241)	878	(251)
Benefit (provision) for income taxes	(65)	33	(105)	31
Results relating to equity-accounted investees	(2)	(1)	(3)	(2)
Net income (loss)	406	(209)	770	(222)
Less: Net income (loss) attributable to non-controlling interests	9	5	20	13
Net income (loss) attributable to stockholders	397	(214)	750	(235)
Earnings per share data:
Net income (loss) per common share attributable to stockholders in $
Basic	1.46	(0.77)	2.73	(0.84)
Diluted	1.42	(0.77)	2.67	(0.84)
Weighted average number of shares of common stock outstanding during the period (in thousands):
Basic	272,686	279,142	275,145	279,533
Diluted	278,735	279,142	281,063	279,533

See accompanying notes to the Condensed Consolidated Financial Statements

1

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

($ in millions, unless otherwise stated)

	For the three months ended		For the six months ended
	July 4, 2021	June 28, 2020	July 4, 2021	June 28, 2020
Net income (loss)	406	(209)	770	(222)
Other comprehensive income (loss), net of tax:
Change in fair value cash flow hedges	—	11	(14)	1
Change in foreign currency translation adjustment	9	26	(33)	(23)
Change in net actuarial gain (loss)	—	(1)	—	(3)
Total other comprehensive income (loss)	9	36	(47)	(25)
Total comprehensive income (loss)	415	(173)	723	(247)
Less: Comprehensive income (loss) attributable to non-controlling interests	9	5	20	13
Total comprehensive income (loss) attributable to stockholders	406	(178)	703	(260)

See accompanying notes to the Condensed Consolidated Financial Statements

2

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

($ in millions, unless otherwise stated)

		July 4, 2021	December 31, 2020
ASSETS
Current assets:
	Cash and cash equivalents	2,910	2,275
	Accounts receivable, net	991	765
	Inventories, net	1,116	1,030
	Other current assets	274	254
Total current assets		5,291	4,324
Non-current assets:
	Other non-current assets	1,094	1,013
	Property, plant and equipment, net of accumulated depreciation of $4,461 and $4,237	2,375	2,284
	Identified intangible assets, net of accumulated amortization of $7,277 and $7,007	1,891	2,242
	Goodwill	9,971	9,984
	Total non-current assets	15,331	15,523
Total assets		20,622	19,847
LIABILITIES AND EQUITY
Current liabilities:
	Accounts payable	1,167	991
	Restructuring liabilities-current	36	60
	Other current liabilities	1,133	966
Total current liabilities		2,336	2,017
Non-current liabilities:
	Long-term debt	9,591	7,609
	Restructuring liabilities	12	14
	Deferred tax liabilities	90	85
	Other non-current liabilities	924	971
Total non-current liabilities		10,617	8,679
Total liabilities		12,953	10,696
Equity:
	Non-controlling interests	227	207
	Stockholders’ equity:
	Common stock, par value €0.20 per share:	59	59
	Capital in excess of par value	14,312	14,133
	Treasury shares, at cost:
	19,809,463 shares (2020: 9,044,952 shares)	(3,102)	(1,037)
	Accumulated other comprehensive income (loss)	70	117
	Accumulated deficit	(3,897)	(4,328)
	Total stockholders’ equity	7,442	8,944
Total equity		7,669	9,151
Total liabilities and equity		20,622	19,847

See accompanying notes to the Condensed Consolidated Financial Statements

3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

($ in millions, unless otherwise stated)

	For the six months ended
	July 4, 2021	June 28, 2020
Cash flows from operating activities:
Net income (loss)	770	(222)
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization	646	1,083
Share-based compensation	184	212
Amortization of discount (premium) on debt, net	1	(1)
Amortization of debt issuance costs	3	4
Net (gain) loss on sale of assets	—	(110)
(Gain) loss on equity security, net	2	—
Results relating to equity-accounted investees	3	2
Deferred tax expense (benefit)	12	(156)
Changes in operating assets and liabilities:
(Increase) decrease in receivables and other current assets	(230)	251
(Increase) decrease in inventories	(86)	(35)
Increase (decrease) in accounts payable and other liabilities	124	(96)
Decrease (increase) in other non-current assets	(60)	(7)
Exchange differences	—	1
Other items	(1)	—
Net cash provided by (used for) operating activities	1,368	926
Cash flows from investing activities:
Purchase of identified intangible assets	(72)	(73)
Capital expenditures on property, plant and equipment	(300)	(218)
Proceeds from disposals of property, plant and equipment	—	1
Purchase of interests in businesses, net of cash acquired	(1)	(21)
Proceeds from sale of interests in businesses, net of cash divested	—	161
Purchase of investments	(6)	—
Proceeds from sale of investments	8	—
Proceeds from return of equity investment	1	—
Net cash provided by (used for) investing activities	(370)	(150)
Cash flows from financing activities:
Proceeds from the issuance of long-term debt	2,000	2,000
Cash paid for debt issuance costs	(22)	(15)
Dividends paid to common stockholders	(260)	(210)
Proceeds from issuance of common stock through stock plans	31	37
Purchase of treasury shares and restricted stock unit withholdings	(2,108)	(358)
Other, net	(1)	—
Net cash provided by (used for) financing activities	(360)	1,454
Effect of changes in exchange rates on cash positions	(3)	(9)
Increase (decrease) in cash and cash equivalents	635	2,221
Cash and cash equivalents at beginning of period	2,275	1,045
Cash and cash equivalents at end of period	2,910	3,266

Supplemental disclosures to the condensed consolidated cash flows
Net cash paid during the period for:
Interest	160	157
Income taxes, net of refunds	161	64
Net gain (loss) on sale of assets:
Cash proceeds from the sale of assets	—	161
Book value of these assets	—	(51)
Non-cash investing activities:
Non-cash capital expenditures	167	54

See accompanying notes to the Condensed Consolidated Financial Statements

4

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)

($ in millions, unless otherwise stated)

	Outstanding number of shares (in thousands)	Common stock	Capital in excess of par value	Treasury shares at cost	Accumulated other comprehensive income (loss)	Accumulated deficit	Total stock- holders’ equity	Non- controlling interests	Total equity
Balance as of December 31, 2020	280,475	59	14,133	(1,037)	117	(4,328)	8,944	207	9,151
Net income (loss)						353	353	11	364
Other comprehensive income					(56)		(56)		(56)
Share-based compensation plans			91				91		91
Shares issued pursuant to stock awards	361			37		(6)	31		31
Treasury shares repurchased and retired	(5,087)			(905)			(905)		(905)
Dividends common stock ($0.5625 per share)						(155)	(155)		(155)
Balance as of April 4, 2021	275,749	59	14,224	(1,905)	61	(4,136)	8,303	218	8,521
Net income (loss)						397	397	9	406
Other comprehensive income					9		9		9
Share-based compensation plans			88				88		88
Shares issued pursuant to stock awards	64			6		(6)	—		—
Treasury shares and restricted stock unit withholdings	(6,103)			(1,203)			(1,203)		(1,203)
Dividends common stock ($0.5625 per share)						(152)	(152)		(152)
Balance as of July 4, 2021	269,710	59	14,312	(3,102)	70	(3,897)	7,442	227	7,669

	Outstanding number of shares (in thousands)	Common stock	Capital in excess of par value	Treasury shares at cost	Accumulated other comprehensive income (loss)	Accumulated deficit	Total stock- holders’ equity	Non- controlling interests	Total equity
Balance as of December 31, 2019	281,437	64	15,184	(3,037)	75	(2,845)	9,441	214	9,655
Net income (loss)						(21)	(21)	8	(13)
Other comprehensive income					(61)		(61)		(61)
Share-based compensation plans			108				108		108
Shares issued pursuant to stock awards	497			47		(18)	29		29
Treasury shares repurchased and retired	(2,933)			(355)			(355)		(355)
Expiration of stock purchase warrants			(56)			56	—		—
Dividends common stock ($0.375 per share)						(105)	(105)		(105)
Balance as of March 29, 2020	279,001	64	15,236	(3,345)	14	(2,933)	9,036	222	9,258
Net income (loss)						(214)	(214)	5	(209)
Other comprehensive income					36		36		36
Share-based compensation plans			104				104		104
Shares issued pursuant to stock awards	252			23		(15)	8		8
Treasury shares and restricted stock unit withholdings	(40)			(3)			(3)		(3)
Expiration of stock purchase warrants			(112)			112	—		—
Dividends non-controlling interests								(34)	(34)
Dividends common stock ($0.375 per share)						(105)	(105)		(105)
Balance as of June 28, 2020	279,213	64	15,228	(3,325)	50	(3,155)	8,862	193	9,055

See accompanying notes to the Condensed Consolidated Financial Statements

5

NXP SEMICONDUCTORS N.V.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

All amounts in millions of $ unless otherwise stated

1 Basis of Presentation and Overview

We prepared our interim condensed consolidated financial statements that accompany these notes in conformity with U.S. generally accepted accounting principles, consistent in all material respects with those applied in our Annual Report on Form 10-K for the year ended December 31, 2020.

We have made estimates and judgments affecting the amounts reported in our condensed consolidated financial statements and the accompanying notes. The actual results that we experience may differ materially from our estimates. The interim financial information is unaudited, but reflects all normal adjustments that are, in our opinion, necessary to provide a fair statement of results for the interim periods presented. This interim information should be read in conjunction with the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020.

2 Significant Accounting Policies and Recent Accounting Pronouncements

Significant Accounting Policies

Except for the changes below, no material changes have been made to the Company's significant accounting policies disclosed in Note 2 Significant Accounting Policies in our Annual Report, 10-K for the year ended December 31, 2020. The accounting policy information below is to aid in the understanding of the financial information disclosed.

Accounting standards recently adopted

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 modifies ASC 740 to simplify the accounting for income taxes, removing certain exceptions to the general principles in ASC 740 and amending existing guidance to improve consistent application. ASU 2019-12 became effective for us on January 1, 2021. We have assessed our current positions and the interrelation to the amendments and the adoption of this update did not have a material impact on the Company's consolidated financial statements and related disclosures.

No other new accounting pronouncements were issued or became effective in the period that had, or are expected to have, a material impact on our Consolidated Financial Statements.

3 Acquisitions and Divestments

2021

There were no material acquisitions or divestments during the first six months of 2021.

2020

There were no material acquisitions during the first six months of 2020. On February 3, 2020, we completed the sale of the Company's Voice and Audio Solutions (VAS) assets, pursuant to the definitive agreement dated August 16, 2019 and which was previously classified as held for sale, with Shenzhen Goodix Technology Co., Ltd. ("Goodix") from China, for a net cash amount of $161 million inclusive of final working capital adjustments. This resulted in a gain of $110 million recorded in Other income (expense) on the Consolidated Statements of Operations.

4 Supplemental Financial Information

Statement of Operations Information:

Disaggregation of revenue

The following table presents revenue disaggregated by sales channel:

	For the three months ended		For the six months ended
	July 4, 2021	June 28, 2020	July 4, 2021	June 28, 2020
Distributors	1,518	1,059	2,986	2,043
Original Equipment Manufacturers and Electronic Manufacturing Services	1,040	712	2,104	1,712
Other	38	46	73	83
Total	2,596	1,817	5,163	3,838

6

Depreciation, amortization and impairment

	For the three months ended		For the six months ended
	July 4, 2021	June 28, 2020	July 4, 2021	June 28, 2020
Depreciation of property, plant and equipment	135	136	267	269
Amortization of internal use software	2	1	4	3
Amortization of other identified intangible assets 1)	168	406	375	811
Total - Depreciation, amortization and impairment	305	543	646	1,083

1) For the six month period ending July 4, 2021, the amount includes an impairment charge as a result of the discontinuation of an IPR&D project for an amount of $36 million.

Other income (expense)

Income derived from manufacturing service arrangements (“MSA”) and transitional service arrangements (“TSA”) that are put in place when we divest a business or activity, is included in other income (expense). These arrangements are short-term in nature and are expected to decrease as the divested business or activity becomes more established.

The following table presents the split of other income (expense):

	For the three months ended		For the six months ended
	July 4, 2021	June 28, 2020	July 4, 2021	June 28, 2020
Result from MSA and TSA arrangements	(1)	(1)	(2)	(1)
Other, net	1	—	2	110
Total - Other income (expense)	—	(1)	—	109

Financial income and expense

	For the three months ended		For the six months ended
	July 4, 2021	June 28, 2020	July 4, 2021	June 28, 2020
Interest income	1	4	2	8
Interest expense	(90)	(94)	(177)	(176)
Total interest expense, net	(89)	(90)	(175)	(168)
Foreign exchange rate results	(1)	(5)	—	(1)
Miscellaneous financing costs/income and other, net	(10)	(1)	(12)	(5)
Total other financial income/ (expense)	(11)	(6)	(12)	(6)
Total - Financial income and expenses	(100)	(96)	(187)	(174)

7

Earnings per share

The computation of earnings per share (EPS) is presented in the following table:

	For the three months ended		For the six months ended
	July 4, 2021	June 28, 2020	July 4, 2021	June 28, 2020
Net income (loss)	406	(209)	770	(222)
Less: net income (loss) attributable to non-controlling interests	9	5	20	13
Net income (loss) attributable to stockholders	397	(214)	750	(235)
Weighted average number of shares outstanding (after deduction of treasury shares) during the year (in thousands)	272,686	279,142	275,145	279,533
Plus incremental shares from assumed conversion of:
Options 1)	394	—	406	—
Restricted Share Units, Performance Share Units and Equity Rights 2)	5,655	—	5,512	—
Dilutive potential common shares	6,049	—	5,918	—
Adjusted weighted average number of shares outstanding (after deduction of treasury shares) during the year (in thousands)	278,735	279,142	281,063	279,533
EPS attributable to stockholders in $:
Basic net income (loss)	1.46	(0.77)	2.73	(0.84)
Diluted net income (loss)	1.42	(0.77)	2.67	(0.84)

1)    There were no stock options to purchase shares of NXP’s common stock that were outstanding in Q2 2021 and YTD 2021 (Q2 2020: 0.9 million shares; YTD 2020: 0.9 million shares) that were anti-dilutive and were not included in the computation of diluted EPS because the exercise price was greater than the average fair market value of the common stock or the number of shares assumed to be repurchased using the proceeds of unrecognized compensation expense and exercise prices was greater than the weighted average number of shares underlying outstanding stock options.

2)    There were no unvested RSUs, PSUs and equity rights that were outstanding in Q2 2021 and YTD 2021 (Q2 2020: 7.7 million shares; YTD 2020: 7.7 million shares) that were anti-dilutive and were not included in the computation of diluted EPS because the number of shares assumed to be repurchased using the proceeds of unrecognized compensation expense was greater than the weighted average number of outstanding unvested RSUs, PSUs and equity rights or the performance goal has not been met yet.

Balance Sheet Information

Cash and cash equivalents

At July 4, 2021 and December 31, 2020, our cash balance was $2,910 million and $2,275 million, respectively, of which $206 million and $185 million was held by SSMC, our consolidated joint venture company with TSMC. Under the terms of our joint venture agreement with TSMC, a portion of this cash can be distributed by way of a dividend to us, but 38.8% of the dividend will be paid to our joint venture partner. During the first six months of 2021, no dividend was declared by SSMC. In 2020, $90 million has been declared by SSMC, distributed subsequent to the end of the second quarter of 2020, with 38.8% being paid to our joint venture partner.

Inventories

The portion of finished goods stored at customer locations under consignment amounted to $19 million as of July 4, 2021 (December 31, 2020: $31 million).

Inventories are summarized as follows:

	July 4, 2021	December 31, 2020
Raw materials	91	66
Work in process	882	786
Finished goods	143	178
	1,116	1,030

The amounts recorded above are net of allowance for obsolescence of $117 million as of July 4, 2021 (December 31, 2020: $122 million).

Equity Investments

At July 4, 2021 and December 31, 2020, the total carrying value of investments in equity securities is summarized as follows:

8

	July 4, 2021	December 31, 2020
Marketable equity securities	20	19
Non-marketable equity securities	22	40
Equity-accounted investments	69	61
	111	120

The total carrying value of investments in equity-accounted investees is summarized as follows:

	July 4, 2021			December 31, 2020
	Shareholding %		Amount	Shareholding %		Amount
Wise Road Industry Investment Fund I, L.P.	9.66	%	32	10.17	%	29
Others	—		37	—		32
			69			61

Results related to equity-accounted investees at the end of each period were as follows:

	For the three months ended		For the six months ended
	July 4, 2021	June 28, 2020	July 4, 2021	June 28, 2020
Company’s share in income (loss)	(2)	(1)	(3)	(2)
Other results	—	—	—	—
	(2)	(1)	(3)	(2)

Other current liabilities

Other current liabilities at July 4, 2021 and December 31, 2020 consisted of the following:

	July 4, 2021	December 31, 2020
Accrued compensation and benefits	411	286
Income taxes payable	70	140
Dividend payable	152	105
Other	500	435
	1,133	966

Accumulated other comprehensive income (loss)

9

Total comprehensive income (loss) represents net income (loss) plus the results of certain equity changes not reflected in the condensed consolidated statements of operations. The after-tax components of accumulated other comprehensive income (loss) and their corresponding changes are shown below:

	Currency  translation differences	Change in fair  value cash flow hedges	Net actuarial gain/(losses)	Accumulated  Other Comprehensive Income (loss)
As of December 31, 2020	281	11	(175)	117
Other comprehensive income (loss) before    reclassifications	(33)	(9)	—	(42)
Amounts reclassified out of accumulated other    comprehensive income (loss)	—	(10)	—	(10)
Tax effects	—	5	—	5
Other comprehensive income (loss)	(33)	(14)	—	(47)
As of July 4, 2021	248	(3)	(175)	70

Cash dividends

The following dividends were declared during the first quarters of 2021 and 2020 under NXP’s quarterly dividend program:

	Fiscal year 2021		Fiscal year 2020
	Dividend per share	Amount	Dividend per share	Amount
First quarter	0.5625	155	0.375	105
Second quarter	0.5625	152	0.375	105

The dividend declared in the second quarter (not yet paid) is classified in the condensed consolidated balance sheet in other current liabilities as of July 4, 2021 and was subsequently paid on July 6, 2021.

5 Restructuring

At each reporting date, we evaluate our restructuring liabilities, which consist primarily of termination benefits, to ensure that our accruals are still appropriate.

The following table presents the changes in restructuring liabilities in 2021:

	As of January 1, 2021	Additions	Utilized	Released	Other changes	As of July 4, 2021
Restructuring liabilities	74	—	(25)	—	(1)	48

The restructuring charges consist of personnel lay-off costs of $1 million restructuring costs incurred for the six month period ended July 4, 2021 (June 28, 2020: $19 million).

These restructuring charges recorded in operating income, for the periods indicated, are included in the following line items in the statement of operations:

	For the three months ended		For the six months ended
	July 4, 2021	June 28, 2020	July 4, 2021	June 28, 2020
Cost of revenue	—	—	—	3
Research and development	1	6	1	10
Selling, general and administrative	—	2	—	6
Net restructuring charges	1	8	1	19

6 Income Taxes

Benefit/provision for income taxes:

	For the three months ended				For the six months ended
	July 4, 2021		June 28, 2020		July 4, 2021		June 28, 2020
Tax expense (benefit)	65		(33)		105		(31)
Effective tax rate	13.7	%	13.7	%	12.0	%	12.4	%

10

Our provision for income taxes for the first six months of 2021 was $105 million (12.0% effective tax rate) compared to a benefit from income taxes of ($31 million) ((12.4%) effective tax rate) for the first six months of 2020. The increase in the income tax expense was due to higher income before income taxes, offset by the net change in the valuation allowance between the two periods and by an increase in tax incentives (both as a result of the improved operational performance of the company).

The Company benefits from income tax incentives in certain jurisdictions which provide that we pay reduced income taxes in those jurisdictions for a fixed period of time that varies depending on the jurisdiction. The predominant income tax holiday is expected to expire at the end of 2026. The impact of this tax holiday decreased foreign income taxes for the second quarter of 2021 by $3 million and decreased by $2 million for the second quarter 2020 (YTD 2021: a decrease of $7 million and YTD 2020: a decrease of $5 million). The benefit of this tax holiday on net income per share (diluted) was $0.02 for the second quarter of 2021 (YTD 2021: $0.03) and $0.01 for the second quarter of 2020 (YTD 2020: $0.02).

7 Identified Intangible Assets

Identified intangible assets as of July 4, 2021 and December 31, 2020, respectively, were composed of the following:

	July 4, 2021		December 31, 2020
	Gross carrying amount	Accumulated amortization	Gross carrying amount	Accumulated amortization
In-process R&D (IPR&D) 1)	111	—	147	—
Marketing-related	81	(81)	81	(81)
Customer-related	911	(360)