Diodes

2022
Annual Report

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(cid:3)
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(cid:400)(cid:381)(cid:367)(cid:349)(cid:282)(cid:367)(cid:455)(cid:3)(cid:393)(cid:381)(cid:400)(cid:349)(cid:410)(cid:349)(cid:381)(cid:374)(cid:286)(cid:282)(cid:3)(cid:349)(cid:410)(cid:400)(cid:286)(cid:367)(cid:296)(cid:3)(cid:374)(cid:381)(cid:410)(cid:3)(cid:381)(cid:374)(cid:367)(cid:455)(cid:3)(cid:258)(cid:400)(cid:3)(cid:258)(cid:3)(cid:396)(cid:286)(cid:367)(cid:349)(cid:258)(cid:271)(cid:367)(cid:286)(cid:3)(cid:400)(cid:437)(cid:393)(cid:393)(cid:367)(cid:349)(cid:286)(cid:396)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:393)(cid:258)(cid:396)(cid:410)(cid:374)(cid:286)(cid:396)(cid:3)(cid:410)(cid:381)(cid:3)(cid:381)(cid:437)(cid:396)(cid:3)(cid:272)(cid:437)(cid:400)(cid:410)(cid:381)(cid:373)(cid:286)(cid:396)(cid:400)(cid:853)(cid:3)(cid:271)(cid:437)(cid:410)(cid:3)(cid:258)(cid:367)(cid:400)(cid:381)(cid:3)(cid:258)(cid:3)(cid:272)(cid:381)(cid:374)(cid:400)(cid:349)(cid:400)(cid:410)(cid:286)(cid:374)(cid:410)(cid:3)(cid:393)(cid:286)(cid:396)(cid:296)(cid:381)(cid:396)(cid:373)(cid:349)(cid:374)(cid:336)(cid:3)
(cid:349)(cid:374)(cid:448)(cid:286)(cid:400)(cid:410)(cid:373)(cid:286)(cid:374)(cid:410)(cid:3)(cid:296)(cid:381)(cid:396)(cid:3)(cid:381)(cid:437)(cid:396)(cid:3)(cid:400)(cid:346)(cid:258)(cid:396)(cid:286)(cid:346)(cid:381)(cid:367)(cid:282)(cid:286)(cid:396)(cid:400)(cid:856)(cid:3)(cid:47)(cid:3)(cid:449)(cid:381)(cid:437)(cid:367)(cid:282)(cid:3)(cid:367)(cid:349)(cid:364)(cid:286)(cid:3)(cid:410)(cid:381)(cid:3)(cid:410)(cid:258)(cid:364)(cid:286)(cid:3)(cid:410)(cid:346)(cid:349)(cid:400)(cid:3)(cid:410)(cid:349)(cid:373)(cid:286)(cid:3)(cid:410)(cid:381)(cid:3)(cid:410)(cid:346)(cid:258)(cid:374)(cid:364)(cid:3)(cid:455)(cid:381)(cid:437)(cid:853)(cid:3)(cid:381)(cid:437)(cid:396)(cid:3)(cid:367)(cid:381)(cid:455)(cid:258)(cid:367)(cid:3)(cid:400)(cid:410)(cid:381)(cid:272)(cid:364)(cid:346)(cid:381)(cid:367)(cid:282)(cid:286)(cid:396)(cid:400)(cid:853)(cid:3)(cid:296)(cid:381)(cid:396)(cid:3)(cid:455)(cid:381)(cid:437)(cid:396)(cid:3)(cid:272)(cid:381)(cid:374)(cid:410)(cid:349)(cid:374)(cid:437)(cid:286)(cid:282)(cid:3)
(cid:400)(cid:437)(cid:393)(cid:393)(cid:381)(cid:396)(cid:410)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:272)(cid:381)(cid:374)(cid:296)(cid:349)(cid:282)(cid:286)(cid:374)(cid:272)(cid:286)(cid:3)(cid:349)(cid:374)(cid:3)(cid:24)(cid:349)(cid:381)(cid:282)(cid:286)(cid:400)(cid:856)(cid:3)
(cid:3)
(cid:94)(cid:349)(cid:374)(cid:272)(cid:286)(cid:396)(cid:286)(cid:367)(cid:455)(cid:853)(cid:3)
(cid:3)

(cid:3)

(cid:24)(cid:396)(cid:856)(cid:3)(cid:60)(cid:286)(cid:346)(cid:882)(cid:94)(cid:346)(cid:286)(cid:449)(cid:3)(cid:62)(cid:437)(cid:3)(cid:3)
(cid:18)(cid:346)(cid:258)(cid:349)(cid:396)(cid:373)(cid:258)(cid:374)(cid:853)(cid:3)(cid:87)(cid:396)(cid:286)(cid:400)(cid:349)(cid:282)(cid:286)(cid:374)(cid:410)(cid:3)(cid:920)(cid:3)(cid:18)(cid:346)(cid:349)(cid:286)(cid:296)(cid:3)(cid:28)(cid:454)(cid:286)(cid:272)(cid:437)(cid:410)(cid:349)(cid:448)(cid:286)(cid:3)(cid:75)(cid:296)(cid:296)(cid:349)(cid:272)(cid:286)(cid:396)(cid:3)

(cid:3)

(cid:3)

(cid:3)

(cid:3)

(cid:3)

(cid:3)

FINANCIAL HIGHLIGHTS

(cid:1006)(cid:1004)(cid:1005)(cid:1012)

(cid:1006)(cid:1004)(cid:1005)(cid:1013)

(cid:1006)(cid:1004)(cid:1006)(cid:1004)

(cid:1006)(cid:1004)(cid:1006)(cid:1005)

(cid:1006)(cid:1004)(cid:1006)(cid:1006)

(cid:1006)(cid:1004)(cid:1005)(cid:1012)

(cid:1006)(cid:1004)(cid:1005)(cid:1013)

(cid:1006)(cid:1004)(cid:1006)(cid:1004)

(cid:1006)(cid:1004)(cid:1006)(cid:1005)

(cid:1006)(cid:1004)(cid:1006)(cid:1006)

(cid:1006)(cid:1004)(cid:1005)(cid:1012)

(cid:1006)(cid:1004)(cid:1005)(cid:1013)

(cid:1006)(cid:1004)(cid:1006)(cid:1004)

(cid:1006)(cid:1004)(cid:1006)(cid:1005)

(cid:1006)(cid:1004)(cid:1006)(cid:1006)

(cid:1006)(cid:1004)(cid:1005)(cid:1012)

(cid:1006)(cid:1004)(cid:1005)(cid:1013)

(cid:1006)(cid:1004)(cid:1006)(cid:1004)

(cid:1006)(cid:1004)(cid:1006)(cid:1005)

(cid:1006)(cid:1004)(cid:1006)(cid:1006)

2018
$1,214

2019
$1,249

2020
$1,229

2021
$1,805

2022
$2,001

2018 2019 2020 2021 2022
$104 $153 $98
$331

$229

2018 2019 2020 2021 2022
$121 $151 $123 $237
$339

2018 2019 2020 2021
$931 $1,106 $964 $1,237

2022
$1,514

NET SALES
in millions

NET INCOME
COMMON STOCKHOLDERS
in millions

NET INCOME
COMMON STOCKHOLDERS
[NON-GAAP ADJUSTED1]
in millions

STOCKHOLDERS’ EQUITY
in millions

(cid:11)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:82)(cid:88)(cid:86)(cid:68)(cid:81)(cid:71)(cid:86)(cid:15)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:83)(cid:87)(cid:3)(cid:83)(cid:72)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:71)(cid:68)(cid:87)(cid:68)(cid:12)

(cid:21)(cid:19)(cid:21)(cid:21)

(cid:21)(cid:19)(cid:21)(cid:20)

(cid:21)(cid:19)(cid:21)(cid:19)

(cid:21)(cid:19)(cid:20)(cid:28)

(cid:21)(cid:19)(cid:20)(cid:27)

(cid:49)(cid:40)(cid:55)(cid:3)(cid:54)(cid:36)(cid:47)(cid:40)(cid:54)
(cid:60)(cid:50)(cid:60)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)

(cid:42)(cid:53)(cid:50)(cid:54)(cid:54)(cid:3)(cid:51)(cid:53)(cid:50)(cid:41)(cid:44)(cid:55)
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(cid:24)(cid:19)(cid:15)(cid:28)(cid:22)(cid:24)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:21)(cid:15)(cid:21)(cid:27)(cid:27)(cid:15)(cid:22)(cid:20)(cid:21)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:21)(cid:15)(cid:20)(cid:28)(cid:23)(cid:15)(cid:23)(cid:28)(cid:24)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:15)(cid:28)(cid:26)(cid:28)(cid:15)(cid:23)(cid:24)(cid:26)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:15)(cid:25)(cid:22)(cid:28)(cid:15)(cid:22)(cid:27)(cid:23)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:15)(cid:24)(cid:21)(cid:25)(cid:15)(cid:22)(cid:26)(cid:20)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:26)(cid:21)(cid:28)(cid:15)(cid:20)(cid:23)(cid:20)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:26)(cid:20)(cid:25)(cid:15)(cid:25)(cid:22)(cid:27)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:24)(cid:20)(cid:23)(cid:15)(cid:21)(cid:21)(cid:24)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:24)(cid:21)(cid:23)(cid:15)(cid:25)(cid:22)(cid:26)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:23)(cid:27)(cid:19)(cid:15)(cid:27)(cid:20)(cid:23)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:23)(cid:26)(cid:15)(cid:23)(cid:26)(cid:19)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:21)(cid:25)(cid:24)(cid:15)(cid:24)(cid:26)(cid:23)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:21)(cid:27)(cid:27)(cid:15)(cid:20)(cid:26)(cid:28)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:25)(cid:23)(cid:15)(cid:23)(cid:19)(cid:20)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:27)(cid:25)(cid:15)(cid:20)(cid:23)(cid:22)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:15)(cid:24)(cid:20)(cid:22)(cid:15)(cid:25)(cid:23)(cid:24)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:15)(cid:21)(cid:22)(cid:26)(cid:15)(cid:21)(cid:23)(cid:21)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:28)(cid:25)(cid:22)(cid:15)(cid:27)(cid:21)(cid:19)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:15)(cid:20)(cid:19)(cid:25)(cid:15)(cid:23)(cid:21)(cid:23)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:28)(cid:22)(cid:20)(cid:15)(cid:23)(cid:25)(cid:22)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiff scal year ended December 31, 2022

or

☐ TRARR NSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from

to

Commission filff e number: 002-25577

DIODES INCORPORATED
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation or organization)

4949 Hedgcoxe Road, Suite 200
Plano, Texas
(Address of principal executive offices)

ff

95-2039518
(I.R.S. Employer
Identification No.)

75024
(Zip Code)

Registrant’s telephone number, including area code: (972) 987-3900

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

Title of each class
Common Stock, Par Value $0.66 2/3

( )
Trading Symbol(s)
g y
DIOD

g
Name of each exchange on which registered
The NASDAQ Stock Market LLC

g

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes

☐ No ☑

ff

Indicate by check mark whether the registrant (1) has filed all reports required to be fiff led by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for s
uch 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 chaptea

r) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

ff

Indicate by check mark whether the registrant is a large accelerated fiff ler, 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 fiff ler
Non-accelerated filer

☑
☐

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 c
fiff nancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effff eff ctiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in

omplying with any new or revised

ff

the filff ing reflff ect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation

received by any of the registrant’s executive offff iff cers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
The aggregate market value of the 45,288,669 shares of Common Stock held by non-affiliates of the registrant, based on the closing price of $64.57 per share of the
Common Stock on the Nasdaq Global Select Market on June 30, 2022, the last business day of the registrant’s most recently completed second fiscal quarter, was
approximately $2.8 billion.

The number of shares of the registrant’s Common Stock outstanding as of February 6, 2023 was 45,486,743.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s defiff nitive proxy statement to be filed with the United States Securities and Exchange Commission (“SEC”) pursuant to Regulation 14A in
connection with the 2023 annual meeting of stockholders are incorporated by refeff rence into Part III of this Annual Report. The proxy statement will be filed with the SEC
not later than 120 days after t

he registrant’s fiscal year ended December 31, 2022.

ff

TABLE OF CONTENTS

PART I
BUSINESS ...........................................................................................................................................................
ITEM 1.
ITEM 1A. RISK FACTORS..................................................................................................................................................
ITEM 1B. UNRESOLVED STAFF COMMENTS...............................................................................................................
PROPERTIES ......................................................................................................................................................
ITEM 2.
LEGAL PROCEEDINGS ....................................................................................................................................
ITEM 3.
MINE SAFETY DISCLOSURES........................................................................................................................
ITEM 4.

PART II

ITEM 5.

ITEM 6.
ITEM 7.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES ..........................................................................................
RESERVED .........................................................................................................................................................
MANAGEMENT’S DISCUSSION ANAA D ANALYSIS OF FINANCIAL CONDITION ANAA D RESULTS OF
OPERARR TIONS .....................................................................................................................................................
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ....................................
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ....................................................................
ITEM 8.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
ITEM 9.
FINANCA IAL DISCLOSURE...............................................................................................................................
ITEM 9A. CONTROLS AND PROCEDURES ....................................................................................................................
ITEM 9B. OTHER INFORMATION....................................................................................................................................
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS...................

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.............................................
EXECUTIVE COMPENSATION .......................................................................................................................
ITEM 11.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
ITEM 12.
RELATED STOCKHOLDER MATTERS..........................................................................................................
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE .
PRINCIPAL ACCOUNTANT FEES AND SERVR ICES.....................................................................................
ITEM 14.

PART IV

ITEM 15.
ITEM 16.

EXHIBIT AND FINANCIAL STATEMENT SCHEDULES.............................................................................
FORM 10-K SUMMARY....................................................................................................................................

Page

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Item 1.

Business.

GENERARR L

PART I

Diodes Incorporated, together with its subsidiaries (collectively the “Company,” “we” or “our” (Nasdaq: DIOD)), a Standard and
Poor's Smallcap 600 and Russell 3000 Index company, is a leading global manufacturer and supplier of high-quality application-specific
standard products within the broad discrete, logic, analog, and mixed-signal semiconductor markets. The Company serves the industrial,
automotive, computing, communications and consumer markets.

The Company's products include diodes; rectifiers; transistors; MOSFETs; GPP bridges; GPP rectififf ers; protection devices;
tion-specific arrays; single gate logic; amplifiers and comparators; Hall-effect and temperature sensors; and power management
ff
func
devices, including LED drivers, AC-DC converters and controllers, DC-DC switching and linear voltage regulators, voltage references
along with special-func
tion devices, such as USB power switches, load switches, voltage supervisors, and motor controllers. The
Company also has timing, connectivity, switching, and signal integrity solutions for high-speed signals.

ff

The Company's corporate headquarters and Americas’ sales offices are located in Plano, Texas, and Milpitas, California,
respectively. Design, marketing, and engineering centers are located in Plano; Milpitas; Taipei, Taoyuan City, and Zhubei City, Taiwan;
Shanghai and Yangzhou, China; Oldham, England; and Neuhaus, Germany. The Company's wafer faff brication facilities are located in
Oldham, England; Greenock, Scotland; Shanghai and Wuxi, China; and Keelung and Hsinchu, Taiwan; and South Portland, Maine,
United States. The Company has assembly and test facilities located in Shanghai, Jinan, Chengdu, and Wuxi, China; Neuhaus, Germany;
and Jhongli and Keelung, Taiwan. Additional engineering, sales, warehouse, and logistics offices are located in Taipei, Taiwan; Hong
Kong; Oldham, England; Shanghai, Shenzhen, Wuhan, and Yangzhou, China; Seongnam-si, South Korea; and Munich and Frankfurt,
Germany; with support offff iff ces throughout the world.

a

•

•

•

The Company’s manufacturt
9001:2015, ISO 14001:2015, and, for automotive products, IATF 16949:2016;

ing facilities have achieved certifications in the internationally recognized standards of ISO

The Company is also C-TPAT certified; and

We believe these quality awards reflect the superior quality-control techniques established at the Company and further
enhance our credibility as a vendor-of-choice to original equipment manufacturers ("OEMs") increasingly concerned with
quality and consistency.

Our market focus is on high-growth, end-user applicati

ff

ons in the folff

lowing areas:

•

•

•

•

•

Industrial: embedded systems, precision controls, and Industrial IoT;

Automotive: connected driving, comfort/style/safety, and electrification/powertrain;

Computing: cloud computing including server, storage, and data center applications;

Communications: smartphones, 5G networks, advanced protocols, and charging solutions; and

Consumer: IoT, wearables, home automation, and smart infrastructure.

ff

From 2018 to 2022, our annual net sales grew from $1.2 billion to $2.0 billion, representing a compound annual growth rate of
appr
oximately 13.3%. Our product line includes over 28,000 products, and we shipped approximately 50 billion units in 2022, 58 billion
a
units in 2021 and 43 billion units in 2020. In 2022, the growth has been driven by strength in the automotive and industrial end-user
markets and the signififf cant growth in the Europe and the Americas regions. The decrease in units shipped was driven by softness in
demand and COVID disruptions in Asia, however units shipped to Europe and the Americas have increased when compared to prior
periods.

2022 SUMMARY AN

R

D BUSINESS OUTLOOK

In 2022, despite COVID-related lockdowns and power restrictions at various times throughout the year as well as the global
economic slowdown, the Company's net sales increased 10.8% over 2021. The fourth quarter represented our ninth consecutive quarter
of year-over-year growth. Our earnings and cash generation in 2022 were also signififf cant highlights with gross margin expanding 420
basis points to 41.3% and operating margin expanding 510 basis points to 20.4%. We also achieved cash flow from operations of $392.5
million in 2022. The Company continued to experience strong growth in the automotive end market, which increased 40% over 2021
and reached 15% of product revenue for the year. We continued to drive growth in our industrial end market through our ongoing content
expansion efforts and market share gains, which contributed to our industrial and automotive end markets representing 42% of product
revenue and exceeding our target model of 40%. The growth in these end markets combined with the ongoing increase of our Pericom
products also contributed to our strong gross margin expansion throughout the year along with improved factory utilization and loading.

1

We continue to work towards our previously stated goals for 2025 of $1.0 billion in gross profit based upon $2.5 billion in revenue

and a gross margin of 40%. At a high level, tactics we intend to use to accomplish these goals include:

•

•

•

Total systems solutions, in which we provide a wide range of products that work together in a system which help simplify
the design process for our customers, sales approach and content expansion driving growth:

a

Increased focus on high-margin automotive, industrial, and Pericom product lines; and

ff

Investment in technology leadership in target products, fab processes, and advanced packaging.

We have a solid pipeline of designs and expanded customer relationships across all regions and product lines. The success of our
business depends on, among other factors, the strength of the global economy and the stability of the financial markets, our customers’
oducts, the ability of our customers to meet their payment obligations, the likelihood of customers not canceling or
ff
demand for our pr
defeff rring existing orders, and the strength of consumers’ demand for items containing our products in the end-markets we serve. We
believe the long-term outlook for our business remains generally faff vorable, despite the uncertainties in the global economy, as we
ion and Analysis of
continue to execute on the strategy that has proven successful for us over the years. See “Management’s Discuss
s
Financial Condition and Results of Operations – Business Outlook” in Part II, Item 7 and “Risk Factors – The success of our busines
depee nds on the strength of t
he global economy and the stability of the financial markets, and any weaknesses in these areas may have a
material adversrr e effect on our net sales, operating results and financial condition.” in Part I, Item 1A of this Annual Report for additional
inforff mation.

TT

ff

tt

SEGMENT INFORMATION AND ENTERPRISE-WIDE DISCLOSURES

For fiff nancial reporting purposes, we operate in a single segment, standard semiconductor products, through our various design,
manufacturing, and distribution facilities. We sell product primarily through our operations in Asia, the Americas, and Europe. See Note
16 of “Notes to Consolidated Financial Statements” of this Annual Report for additional information.

OUR INDUSTRYRR

Semiconductors are critical components used to manufacture a broad range of electronic products and systems. Since the invention
of the transistor in 1948, continuous improvements in semiconductor processes and design technologies have led to smaller, more
complex, and more reliable devices at a lower cost per function. The availability of low-cost semiconductors, together with increased
consumer demand for sophisticated electronic systems, has led to the proliferation of semiconductors in diverse end-use applications.

OUR COMPETITIVE STRENGTHS

We believe our competitive strengths include the following:

ff

Flexible, scalable and cost-effective manufacturing – Our manufacturing operations are a core element of our success, and we
have designed our manufacturing base to allow us to respond quickly to changes in demand trends in the end-
markets we serve. For
example, we have structured our assembly and test facilities to enable us to rapidly and efficiently add capacity and adjust product mix
ce at a
to meet shiftff s in customer demand and overall market trends. Our manufaff cturing facilities provide us with access to a workfor
relatively low overall cost base while enabla ing us to better serve our leading customers, many of which are located in Asia. See “Risk
Factors – During times of difficult market conditions, our fixed costs combined with lower net sales and lower profit margins may have
a negati
ve impact on our business, operating results and financial condition." in Part I, Item 1A of this Annual Report for additional
e
inforff mation.

t

Integrated packaging expertise – Our expertise in designing and manufacturing innovative and proprietary packaging solutions
enabla es us to package a variety of different device functions into an assortment of packages ranging from miniature chip-scale packaging
to packages that integrate multiple separate discrete and/or analog chips into a single semiconductor product called an array. Our ability
to design and manufacturt e multi-chip semiconductor solutions as well as advanced integrated devices provides our customers with
products of equivalent functionality with fewer individual parts, and at lower overall cost, than alternative products. This combination
of integration, functionality and miniaturization makes our products well suited for the industrial, automotive, computing,
communications and consumer markets.

Broad customer base and diverse end-markets – Our customers are comprised of leading direct sales customers as well as
maja or electronic manufacturing services (“EMS”) providers. We serve over 50,000 customers worldwide. The majority are served
through our distribution network and some are direct customers who purchase directly from the Company. Our products are ultimately
used in end-products in a number of markets served by our broad customer base, which we believe makes us less susceptible to market
t
flff uctuat

ions driven by either specific customers or specific end-user applications.

Customer-focff used product development – Effective collaboration with our customers and a commitment to customer service
pendabla e delivery and support tailored to specific end-user applications
are essential elements of our business. We believe focusing on de
and solution-selling appr
oach has fostered deep customer relationships and created a key competitive advantage for us in the highly
frff agmented discrete, logic, analog and mixed-signal semiconductor marketplace. We believe our close relationships with our customers
have provided us with keener insight into our customers’ product needs. This results in a stronger demand for our product designs and
We are
oftff en provides us with insight into additional opportunities for new design wins in our customers’ products. See “Risk Factors –

a

ff

ff

2

and will continue to be under continuous pressure from our customers and competitors to reduce the price of our pr
adversrr ely affect our gr

owth and profiff t margir ns.” in Part I, Item 1A of this Annual Report for additional information.

rr

ll

oducts, which could

Management experience –The members of our executive team average over 30 years of industry experience, and the length of
ional insight into our markets, our customers and our operations. See “Risk Factors – We may
l to attract or retain the qualified technical, sl ales, marketing, finance and management/executive personnel required to operate our
ould adversely affect our business, operating results and financial condition.” in Part I, Item 1A of this

their service has created significant institutt
faiff
business successfs ulff
Annual Report for additional information.

ll
ly, which c

OUR STRATEGY

Our goal is to reach $1.0 billion in gross profit based upon $2.5 billion in revenue and a gross margin of 40% by 2025. At a high
level, strategy we intend to use to accomplish this goal include; continue to enhance our position as a leading global designer,
manufacturer and supplier of high-quality application-specific standard semiconductor products, using our innovative and cost-effective
assembly and test (packaging) technology and leveraging our process expertise and design excellence to achieve above-market growth
in profiff tabia lity.

ff

The principal elements of our strategy include the following:

Continue to rapidly introduce innovative discrete, logic, analog and mixed-signal semiconductor products – We intend to
maintain our rapid pace of new product introductions, especially for high-volume, high-growth applications with short design cycles,
such as: IoT, wearables, home automation, and smart infrastructure, portables such as smartphones, tablets and notebooks; other
consumer electronics and computing devices; as well as added emphasis on products for the LED lighting market and the industrial and
automotive markets. During 2022 and 2021, we continued to achieve many significant new design wins with our direct sales customers.
Although a design win from a customer does not necessarily guarantee future sales to that customer, we believe that continued
introduction of new and well-defined product solutions is critically important in maintaining and extending our market share in the
highly competitive semiconductor marketplace. See “Risk Factors – Obsolete inventories as a result of changes in demand for our
products and change in li
in
Part I, Item 1A of this Annual Report for a

ff
fi e cycles of our products could adversely af
fff ect our business, operating results and financial condition.”
ff

dditional information.

ff

ff

tt

Expand our available market opportunities – We believe we have many paths to increasing our addressable market
ties. From a product perspective, we intend to continue expanding our product portfolio by developing derivative and enhanced
opportuni
t
perforff mance devices that target adjacent markets and end-equipment. We will continue to cultivate new and emerging customers within
our targeted markets, further increasing our already broad customer base. As we focus on new customers, we try to expand our product
io penetration within these new, as well as existing, customers. As we expand our extensive range of high power efficiency and
portfolff
or packages, we plan to introduce new and existing product functions in these new packages to allow an even greater
small form fact
market coverage.

ff

Maintain intense customer focus – We intend to continue to strengthen and deepen our customer relationships. We believe that
continued focff us on customer service is important and will help to increase our net sales, operating performance and market share. To
accomplish this, we intend to continue our close collaboration with our customers to design products that meet their specific needs. A
critical element of this strategy is to further reduce our design cycle time in order to quickly provide our customers with innovative
products. Additionally, to support our customer-focff used strategy, we continue to expand our sales force and field application engineers,
particularly in Asia and Europe, during periods of growth. See “Risk Factors – We are and will continue to be under continuous pressure
ompem titors trr o reduce the price of our products, which could adversely affect our growth and profit margins.”
frff om our customers and c
in Part I, Item 1A of this Annual Report for additiona

l information.

rr

ff

Enhance cost competitiveness and manufacturing flexibility –

A key element of our success is our overall low-cost
ing base and our hybrid manufacturing model. While we believe our manufacturing facilities are among the most efficient
manufacturt
ontinue to refine our proprietary manufacturing processes and technology to achieve additional cost efficiencies.
rr
in the industry, we will c
We have continued to make capital expenditures to enhance our existing manufacturing capabilities. We continue to leverage a hybrid
manufacturt
ing model which allows our revenue to be supported with both internally and externally sourced manufacturing. This allows
more flff exibility to support customer growth while continuing to enhance cost competitiveness.

ff

Pursue selective strategic acquisitions – As part of our strategy to expand our semiconductor product offeff rings and to maximize
our market opportunities, we may acquire technologies, product lines or companies in order to enhance our product portfolio and
accelerate our new product offerings. Examples of recent acquisitions include:

•

In June 2022, the Company completed the acquisition of onsemi's wafer fabrication facility and operations located in South
Portland, Maine ("SPFAB"). We purchased SPFAB to provide additional 200mm wafer fabrication capacity for analog
products to accelerate the Company's growth initiatives in the automotive and industrial end-markets. This U.S.-based
facility, together with the Company's existing wafer fabrication facilities in Asia and Europe, further enhances the
Company's global manufacturing operations;

3

•

•

In 2020, we acquired Lite-On Semiconductor (“LSC”) and its subsidiaries. The acquisition of LSC broadened our discrete
product offerings, including providing us with a leadership position in glass-passivated bridges and rectifiers that allows us
to further extend our position in the automotive and industrial markets consistent with our overall growth strategy. Further,
the acquisition expands our wafer fabrication and assembly and test capacity; and

In 2019, we acquired frff om Texas Instruments a 200mm wafer fabrication facility and operations located in Greenock,
Scotland (“GFAB”). The acquisition of GFAB added to our existing global footprint and provided expanded wafer capacity
to support our product growth, in particular for the automotive market.

See “Risk Factors – Part of our growth strategy involves identifying and acquiring companies. We may be unable to identifyi
suitable acquisition candidates or consummate desired acquisitions and, if we do make any acquisitions, we may be unable to
successfully integrate any acquired companies with our operations, which could adversely affect our business, operating results and
financial condition.” in Part I, Item 1A and Note 20 of “Notes to Consolidated Financial Statements” of this Annual Report for additional
information.

tt

OUR PRODUCTS

Our market focus is on high-growth, end-user applicati

ff

ons in the folff

lowing areas:

Discrete semiconductor products, including: MOSFET, TVS, performance Schottky rectifiers; GPP bridges, GPP rectifiers and
performance Schottky diodes; Zener diodes and performance Zener diodes, including tight toleranc
e and low operating current types;
standard, faff st, super-fast and ultra-fast recovery rectifiers; bridge rectifiers; switching diodes; small signal bipolar transistors; prebiased
transistors; MOSFETs; thyristor surge protection devices; and transient voltage suppressors;

ff

Analog products, including: power management devices such as AC-DC and DC-DC converters, USB power switches, low
dropout and linear voltage regulators; standard linear devices such as operational amplifiers and comparators, current monitors, voltage
ff
references, and reset generators; LED lighting drivers; audio amplifiers; and sensor products including Hall-effect sensors and motor
drivers;

Mixed-signal products, including: high speed mux/demux, digital switches, interface, redrivers, universal level shifters/voltage

translators, clock ICs and packet switches;

Standard logic products including low-voltage complementary metal-oxide-semiconductor (“CMOS”) and advanced high-speed

CMOS devices; ultra-low power CMOS logic; and analog switches;

Multichip products and co-packaged discrete, analog and mixed-signal silicon in miniature packages;

Silicon and silicon epitaxial wafeff rs used in manufacturing these products; and

Frequency Control Products (“FCP”) used in many of today’s advanced electronic systems. FCPs are electronic components that
utomotive, industrial, computing, communication and consumer

provide frequency references such as crystals and crystal oscillators for a
electronic products.

ff

The folff

lowing table lists the end-markets, some of the applications in which our products are used, and the percentage of product

revenue for each end-market for the last three years:

End-Markets

2022

2021

2020

Industrial

27%

23%

23%

Automotive

15%

12%

11%

Computing

Communications

24%

15%

30%

16%

20%

21%

Consumer

19%

19%

25%

End product applications
Lighting, power supplies, DC-DC conversion, security
systems, motor controls, DC fans, proximity sensors, solenoid
and relay driving, solar panel, HVAC/LED lighting, retrofit
bulb, smart meters and embedded computers
ADAS (advanced driver assistance systems), telematics,
infotainment, lighting, BLDC motor control, electrification and
powertrain, and battery management
Notebooks, tablets, LCD monitors, printers, solid state and
hard disk drive, servers, storage, cloud computing, and data
center applications
5G networks, smartphones, IP gateways, routers, switches,
hubs, fiber optics and charging solutions
Digital audio players and cameras, set-top boxes, LCD and
LED TV’s, game consoles, portabla e GPS, fitness and health
monitors, action cameras, smart watches, wearable IoT, home
automation and smart infrastructure

4

PRODUCT PACKAKK GING

Our device packaging technology includes a wide variety of innovative surfaff ce-mounted packages. Our focus on the development
of smaller, more thermally efficient, and increasingly integrated packaging, is a critical component of our product development. We
provide a comprehensive offering of m
iniaturt e high power density packaging, enabling us to fit our components into smaller and more
effff iff cient packages, while maintaining the same device functionality and power handling capabilities. Smaller packaging provides a
reduction in the height, weight and board space required for our components. Our products are well suited for broad applications in the
industrial, automotive, computing, communications and consumer applications as highlighted in the table above.

ff

CUSTOMERS

We serve over 50,000 customers worldwide. The majority are served through our distribution network and some are direct
customers who purchase directly frff om the Company. Our customers represent leading direct sales customers representing a broad range
of industries, leading EMS providers and leading distributors. For the years 2022, 2021 and 2020, our direct sales and EMS customers
together accounted for 30%, 34% and 34%, respectively, of our net sales. In addition, for information concerning our business with
related parties, see “Business – Certain Relationships and Related Party Transactions.”

ff

We believe that our close relationships with our customers have provided us with deeper insight into our customers’ product
needs. In addition to seeking to expand relationships with our existing customers, our strategy is to pursue new customers and diversify
our customer base by focusing on leading global consumer electronics companies and their EMS providers and distributors. See “Risk
Factors – Our customers require our products to undergo a lengthy and expensive qualification process without any assurance of
product sales and may demand to audit our operations from time to time. A failure to qualify a product or a negative audit finding
could adversely affect our net sales, operating results and financial condition.” in Part I, Item 1A of this Annual Report for additional
inforff mation.

We generally warrant that products sold to our customers will, at the time of shipment, be free from defects in workmanship and
oved specififf cations. Subject to certain exceptions, our standard warranty extends for a period of one
materials and conform to our appr
year from the date of shipment. Warranty expense has not been significant. Generally, our customers may cancel orders on short notice
without incurring a penalty. See “Risk Factors – Our customer orders are subject to cancellation or modification usually with no penalty.
High volumes of order cancellation or reduction in quantities ordered could adversely affect our net sales, operating results and
fiff nancial condition.” in Part I, Item 1A of this Annual Report for additional information.

a

The tables below set forff
(direct sales or distributor) for t

th net sales for the Company disaggregated into geographic locations based on shipment and by type
he twelve months ended December 31, 2022, 2021 and 2020:

ff

Net Sales by Region
Asia
Europe
Americas
Total net sales

Net Sales by Type
Direct sales
Distributor sales
Total net sales

2022

2021

2020

$

$

$

$

1,480,191
283,900
236,489
2,000,580

2022

590,173
1,410,407
2,000,580

$

$

$

$

1,439,545
220,772
144,845
1,805,162

2021

607,645
1,197,517
1,805,162

$

$

$

$

961,376
171,985
95,854
1,229,215

2020

419,024
810,191
1,229,215

Many of our customers are based in Asia or have manufacturing facilities in Asia. Net sales from products shipped to China for
the twelve months ended December 31, 2022, 2021 and 2020, was $941.3 million $938.1 million and $649.9 million, respectively.
While net sales in total have continued to grow in all geographic locations presented, net sales in Asia, as a percentage of total net sales
has declined due to the result of lockdowns related to the zero-COVID policy, which we believe has impacted end-demand in China.

SALES AND MARKETING

We market and sell our products worldwide through a combination of direct sales and marketing personnel, independent sales
representatives and distributors. We have direct sales personnel in the U.S., the U.K., France, Germany, Italy, South Korea, Japan, Hong
Kong, Taiwan, Turkey, and China. We also have independent sales representatives in the U.S., Asia, and Europe. In addition, we have
distributors in the U.S., Asia, and Europe. As of December 31, 2022, our direct global sales and marketing organization consisted of
appr
oximately 473 employees operating out of 23 offices. We have sales and marketing offices or representatives in Taipei, Taiwan;
a
Shanghai, Shenzhen, Wuhan, Guangzhou, Jinan, and Qingdao, China; Gyeonggi, South Korea; Munich and Frankfurt, Germany;
Oldham, England; Tokyo, Japan; Milpitas, Califorff nia and Plano, Texas, USA. As of December 31, 2022, we also had more than 17
independent sales representative fiff rms marketing our products.

Our marketing group focuses on our product strategy, product development roadmap, new product introduction process, demand
adeshows, technical conferences and
assessment and competitive analysis. Our marketing programs include participation in industry tr
technology seminars, online marketing including our website, email and social media, sales training and public relations. Our marketing

rr

5

group works closely with our sales and research and development teams to align our product development roadmap. Our marketing
group coordinates its efforts with our product development, operations and sales groups, as well as with our customers, sales
representatives and distributors. We support our customers through our global field application engineering and customer support
organizations.

Our website, www.diodes.com, features an extensive online product catalog with advanced search capabilities. This, coupled with
a comprehensive competitor cross-reference search, facilitates quick and thorough product selection. Our website also provides easy
access to our worldwide sales contacts and customer support and incorporates a distributor-inventory check to provide component
inventory availability.

rr

MANUFACTURING OPERATIONS AND FACILITIES

We operate assembly and test facilities located in China, Taiwan and Germany. We operate wafer fabrication facilities located
in China, Taiwan, Great Britain and the United States. For the years ending December 31, 2022 and 2021, our total cash capital
nd $141.2 million, respectively.
expenditures were approximately $211.7 million a

a

Our manufacturing processes use many raw materials, including silicon wafers, aluminum and copper lead frames, gold and
copper wire and other metals, molding compounds and various chemicals and gases. We also rely on equipment and finished product
suppliers. We are continuously evaluating our raw material costs in order to reduce our consumption while protecting and maintaining
product performance. We have no material agreements with any of our suppliers that impose minimum or continuing supply obligations.
From time to time, suppliers may extend lead-times, limit supplies or increase prices due to capacity constraints or other factors.
Although we believe that supplies of the raw materials we use are currently and will continue to be available, shortages could occur in
various essential materials due to interruption of supply or increased demand in the industry. See “Risk Factors – We depee nd on third-
veries of raw materials, manufacturing services, product and process development, parts and equipment,
party stt
ll
as well as finished products from other manufacff
al condition
could be adversely affected if we are unable to obtain adequate supplies in a timely manner.” in Part I, Item 1A of this Annual Report
ff
for a

turers, and our reputation with customers, operating results and financi

uppliers for timely deli

dditional information.

tt

r

Our corpor

ate headquarters is located in a facility we own in Plano, Texas. We also lease or own properties around the world for
use as sales and administrative offices, research and development centers, manufacturing faff cilities, warehouses and logistics centers.
The size or location of these properties can change from time to time based on our business requirements. See “Properties” in Part I,
Item 2 of this Annual Report for additional inforff mation.

BACKLOG

Backlog, defined as the amount of product to be shipped during any period, is dependent upon various factors, and orders are
subject to cancellation or modification, usually with no penalty to the customer. Orders are generally booked from one month to greater
than twelve months in advance of delivery. The rate of booking of new orders can vary significantly from month to month. We, and the
industry arr
s a whole, continue to experience a trend towards shorter customer-requested lead-times, and we expect this trend to continue.
The amount of backlog at any date depends upon various factors, including the timing of the receipt of orders, fluctuations in orders of
existing product lines, and the introduction of new product lines. Accordingly, we believe that the amount of our backlog at any date is
not an accurate measure of our future sales. We strive to maintain proper inventory levels to support our customers’ just-in-time order
expectations. Our backlog of orders, based on expected ship date, was $666.2 million at December 31, 2022 and $793.1 million at
December 31, 2021.

ff

PATENTS, TRADEMARKS, COPYRIGHTS AND OTHER INTELLECTUAL PROPERTY RIGHT

RR

S AND LICENSES

We generally rely on a combination of patents, trademarks, copyrights, trade secrets, confidentiality agreements, license
agreements and policies to protect our intellectual property rights and proprietary technology, and to maintain our competitive position.
Despite these measures, we may not always succeed in protecting our intellectual property or preventing misappropriation of our
intellectual property rights. Other companies may independently develop similar technologies or seek to challenge, invalidate or
circumvent our intellectual property rights. We acquired, licensed or sublicensed numerous intellectual property rights in connection
with our acquisitions over the years. Several of our trademarks are registered in the U.S. and other countries, and we continually seek
to strengthen our brand to distinguish our products in the marketplt ace. We maintain a patent portfolio comprised of both U.S. and
foreign patents and have patent applications pending in the U.S. and other countries. We expect to continue to file patent applications
in the U.S. and abroad covering technologies and products considered important to our business. We do not believe any individual
patent, group of patents, or the expiration thereof would materially affect the operation of our business. We seek to protect our proprietary
technology or related knowledge that is not covered by our patent strategy as trade secrets through contracts and policies to maintain
their secrecy and confidentiality.

In the ordinary course of business, we may become party to disputes involving intellectual property rights. When we become
aware of companies infringing our intellectual property rights, we seek to enforce our rights through appropriate actions. We may
receive claims of infringement or inquiries regarding possible infringement of the intellectual property rights of others, demands seeking
royalty payments or other remedies, or cease and desist letters. Depending on the situations, we may defend our position, seek to
negotiate a license or engage in other acceptable resolution that is appropriate to our business.

6

We provide limited intellectual property indemnification for certain customers and may experience financial exposure related to
intellectuat
In certain situations, there are limits on our potential indemnification liability; however, we
cannot reasonably estimate the amount of potential payments, if any. Although to date we have not paid any significant amounts for
intellectuat

l property indemnity claims, there can be no assurance that we will not face significant exposure in the future.

l property indemnity claims.

From time to time, we may license our intellectual property rights in connection with the development or sale of our products.
We may license certain product technology from other companies, but we do not consider any particular licensed technology to be
material to our operations or royalties paid by us to be material. We believe the duration and other terms of the licenses are appropriate
urrent needs. See “Risk Factors – We may be subject to claims of infringement of third-party intellectual property rights or
for our c
ff
demands that w
n our intellectual property rights
tt
and a negat
ive impact on our business, operating results and fiff nancial condition.” in Part I, Item 1A of this Annual Report for additional
e
inforff mation.

echnology, which could result in significant expense, reduction i

e license third-par

tt
ty t

WW

ee

-

Our foreign operations expose us to unique intellectual property technology risks compared to a company with fewer or no
international operations. For example, we are exposed to potential cyber security breaches that may target our employees or
infrff astrucr
ture outside the United States. See “Risk Factors – Risks Related to Our International Operations.” in Part I, Item 1A of this
Annual Report for a more detailed summary of the intellectual property technology risks associated with our international business
operations.

This Annual Report may include trade names and trademarks of other companies. Our use or display of other parties’ trade names,
trademarks or products is not intended to, and does not, imply a relationship with, or endorsement or sponsorship of us by, the trade
names or trademark owners. All trademarks appearing in this Annual Report not owned by us are the property of their holders.

COMPETITION

Numerous semiconductor manufacturers and distributors serve the discrete, logic, analog and mixed-signal semiconductor
components market, making competition intense. Some of our larger competitors include Infineon Technologies A.G., Epson, Kyocera,
Nexperia, NXP Semiconductors N.V., ON Semiconductor Corporation, Renesas Electronics Corporation, Texas Instruments and Vishay
Intertechnology, Inc., many of which have greater financial, marketing, distribution, brand name recognition, research and development,
manufaff cturing a
nd other resources than we do. Accordingly, we, from time to time, may reposition product lines or decrease prices,
t
which may affff eff ct our sales of, aff nd profit margins on, such product lines. The price, features, availability and quality of our products,
and our ability to design products and deliver customer service in keeping with our customers’ needs, determine the competitiveness of
our products. We believe that our product focff us, packaging expertise and our flexibility and quick adaptability to customer needs affords
us competitive advantages. See “Risk Factors – The semiconductor business is highly competitive, and increased competition may harm
our business, operating results and f

iff nancial condition.” in Part I, Item 1A of this Annual Report for additional information.

TT

ff

tt

ENGINEERING AND RESEARCH AND DEVELOPMENT

Our engineering and research and development groups consist of applications, circuit design, and product development engineers
who assist in determining the direction of our future product lines. One of their key functions is to work closely with market-leading
customers to further refine, expand and improve our product portfolio within our target product types and packages. In addition, we
assess customer requirements and acceptance of new package types, and we seek to develop new, higher-density and more energy-
effff iff cient packages to satisfy customers’ needs.

Product development engineers work directly with our semiconductor circuit design and layout engineers to develop and design
products that match our customers’ requirements. We seek to capture the customers’ electrical and packaging requirements, translate
those requirements into product specifications and design and manufacture a qualified product to support the customers’ end-system
applications.

HUMAN CAPITAL MANAGEMENT

As an international semiconductor company with a global footprint, the Company recognizes the important role its human capital
plays in a talent-based economy, and what the impact of effective and efficient human capital management has on its long-term strategic
success and sustainable growth. Our employees are our most critical asset—they contribute to our financial success for the benefit of all
ators and contributors to the success of the communities in which we live and work. Human capital
our stakeholders and they are collabor
management affects many aspects of our operations, including recruitment and talent acquisition, retention, training, workforce
optimization, performance management, workplace safety, employee health and wellness, employee engagement, and diversity and
inclusion.

a

CC

EmEE plm oyee Communication -

eff edback mechanisms are critical
Developing two–way communications and deploying effective f
components in our employee engagement process. We have an open door policy, and encourage employees to have regular conversations
with their managers to share feff edback and express concerns. We also solicit employee feedback informally through regular employee
interactions. We hold our managers accountable for setting clear expectations and goals with their teams, for providing coaching, as
well as identifying profeff ssional development opportunities for their teams, and for engaging in periodic performance reviews. We assist

ff

ff

7

our managers with performance management tools as needed to help them effectively manage thei
productivity.

ff

r teams and optimize workforce

EmEE plm oyee Retention, TrTT aining and CoacCC

hing - Employee retention is a critical element in our sustainable success. To maintain a
stabla e workforff ce, we provide skill advancement training and coaching, where appropriate, to help our employees enhance their existing
skillsets. With our support and preparation, our employees can continue to grow in their current role and maximize the value they
contribute to their current teams. Where a suitable rotation opportunity arises, we provide skill expansion training to equip employees
for t
hese new positions. By honing their skills, our employees can leverage their institutional knowledge and experience to contribute
ff
to the overall success of the organization. The availability of rotational opportunities can also help keep our employees motivated and
engaged.

EmEE plm oyee Safety - As an employer with a global workforce, we seek to provide safe working conditions and encourage our
employees to engage in safe behaviors while completing their assigned job duties. We have programs to enhance the occupational health
and safetff y of our employees and to promote employee wellness. These programs are designed to yield positive business outcomes, such
as less absenteeism, more motivated and engaged workforce, higher productivity, more consistent quality performance, and a better
corpor
ate image in our local communities. The positive outcomes of these programs should help us attract talent and maintain a stablea
r
workforce.

EmEE plm oyee Demographics - We regularly review our workforce demographics and organizational structure to e

nsure that we have
ient organization positioned to deliver cost-effeff ctive, high-quality products to our customers and to serve the markets in which

an effff icff
we operate. Diversity and inclusion considerations are embodied in many aspects of our operations, including pipeline opportunities.

a

As of December 31, 2022, we employed 8,877 employees (including approximately 620 temporary labor or independent
contractors). 7,566 of our employees were in Asia, 441 were in the Americas. and 870 were in Europe. None of our employees in Asia
or the U.S. are subject to a collective bargaining agreement. In Europe all our employees are covered by individual employment
agreements with some collective bargaining agreements in place. We consider our relations with our employees to be satisfactory. See
“Risk Factors – We may fail to attract or retain the qualified technical, sales, mar
krr ekk ting, finance and management/executive personnel
required to operate our business successfully, which could adversely affect our business, operating results and financial condition.” in
Part I, Item 1A of this Annual Report for a

dditional information.

WW

ff

ENVIRONMENTAL MATTERS

We are subject to a variety of U.S. federal, state, local and foreign governmental laws, rules and regulations related to the use,
storage, handling, discharge or disposal of certain toxic, volatile or otherwise hazardous chemicals used in our manufacturing process
in China, Taiwan, the U.K and the U.S. where our wafer fabrication facilities are located, and in China, Taiwan and Germany where our
assembly and test faff cilities are located. Any of these regulations could require us to acquire equipment or to incur substantial other costs
to comply with environmental regulations or remediate problems. For the twelve month periods ended December 31, 2022, 2021 and
2020, our capia tal expenditures for environmental controls have not been material. See “Risk Factors – We are subject to many
environmental laws and regulations that could result in significant expenses and could adversely affect our business, operating results
and fiff nancial condition.” in Part I, Item 1A of this Annual Report for additional information.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

We conduct business with the following related parties: Keylink International (B.V.I.) Inc. and its subsidiaries and affiliates

(“Keylink”), Nuvoton Technology Corporation (“Nuvoton”) and Jiyuan Crystal Photoelectric Frequency Technology Ltd. (“JCP”).

Keylink is a 5% joint venture partner in our Shanghai assembly and test facilities. We sell products to, and purchase inventory
from, companies owned by Keylink. In addition, our subsidiaries in China lease their manufacturing facilities in Shanghai from, and
subcontract a portion of our manufacturing process (metal plating and environmental services) to, Keylink. We also pay a consulting
feff e to Keylink.

Warren Chen, a member of the Company's board of directors serves as a member of Nuvoton's board of directors. We purchase

wafers from Nuvoton for use in our production process.

JCP is an FCP manufacturing company from which we purchase material and in which we have made an equity investment. We

account for this investment using the equity method of accounting.

We consider our relationships with Keylink, Nuvoton and JCP to be mutually beneficial and plan to continue these strategic

alliances.

The Audit Committee of our Board of Directors reviews all related party transactions for potential conflict of i

nterest situations on
an ongoing basis. We believe that all related party transactions are on terms no less faff vorable to us than would be obtained from
unaffff iff liated third parties.

ff

8

OTHER INFORMATION

We were incorporated in 1959 in California and reincorporated in Delaware in 1968.

SEASONALITY

Historically, our net sales have been affected by the cyclical nature of the semiconductor industry, whereby typically the fourth
In addition, our net sales have been subject to some additional

quarter is the quarter of the calendar year with the smallest revenue.
seasonal variation with weaker net sales in the first quarter.

AVAILABLE INFORMATION

Our website address is http://www.diodes.com. We make available, free of charge through our website, our Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, and amendments to those reports filed
or furff nished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after such material is electronically
fiff led with or furnished to the Securities and Exchange Commission (the “SEC”).

p

The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other

p

g

inforff mation regarding issuers that file with the SEC.

Our website also provides investors access to financial and corporate governance information including our corporate governance
guidelines, Code of Business Conduct, whistleblower hotline, and press releases. The contents of our website and any other information
accessible through our website are not incorporated by reference into this Annual Report on Form 10-K.

r

Cautionary Statement for Pff

urposes of the “Safe Hff

arbor” Provision of the Private Securities Litigation Reform Act of 1995

ff

Many of the statements included in this Annual Report on Form 10-K contain forward-looking statements and forward-looking
inforff mation relating to the Company. We generally identify forward-looking s
tatements by the use of terminology such as “may,” “will,”
“could,” “should,” “potential,” “continue,” “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe,” “project,” or similar phrases
or the negatives of such terms. We base these statements on our management’s beliefs as well as assumptions we made using information
currently available to us. Such statements are subject to risks, uncertainties and assumptions, including those identified in the “Risk
Factors” section of this Annual Report and the “Risk Factors” section of other documents we file with the SEC, as well as other matters
not yet known to us or not currently considered material by us. Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actuat
l results may vary materially from those anticipated, estimated or projected. Given these
risks and uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements. Forward-
looking statements do not guarantee future performance and should not be considered as statements of fact.

You should not unduly rely on these forward-looking statements, which speak only as of the date of this Annual Report on Form
10-K. Unless required by law, we undertake no obligation to publicly update or revise any forward-looking statements to reflect new
inforff mation or future events or otherwise. The Private Securities Litigation Reform Act of 1995 (the “Act”) pr
ovides certain “safe
harbor
” provisions for forward-looking statements. All forward-looking statements, made on this Annual Report on Form 10-K, are
r
made pursuant to the Act.

ff

9

Item 1A. Risk Factors.

Investing in our Common Stock involves a high degree of risk. You should carefully consider the following risks and other
inforff mation in this Annual Report beforff e you make any trading decisions regarding our Common Stock. Our business, financial
condition or operating results may suffer if any of the following risks are realized. Additional risks and uncertainties not currently known
to us may also adversely affect our business, financial condition or operating results. If any of these risks or uncertainties occurs, the
trading price of our Common Stock could decline and you could lose part or all of your investment.

Summaryr

RISKS RELATED TO OUR BUSINESS

ThTT e impact of the c
ratitt ons.
resultll s of ope

ii
tt

ontinuing COVCC

IVV DII -19 pandemic may have a material adverse effect on our business, financial condition and

ShSS anghai, China experienced government imposed lockdowns due to a res

CC

urgence of thtt e COVID-19 virus.

Durinii g timii es of difficult market conditions, our fixed costs combined with lower net salell s and lower profit margins may h
e
negat

itt ve impact on our business, ope

iff nii ancial condition.

rating results and f

s

tt

ll

ave a

Downturns in the highly cyclical semiconductor in
rr
tt
resultll s an

d fiff nii ancial conditii ion.

tt

dustry or changes in end-market demand could adversely affect our operating

ThTT e semiconductor businii ess is highly competitive, and increased competition may harm our business, operating results and financial
tt
conditii ion.

ii

s in initiation of pr

Delayll
ii
tett chnical equipmii

ff
oduction at f
tt

ociated with
ent malfunctions could adversely affeff ct our manufacturing efficiencies, operating results and financial condition.

acilities due to implementing new production techniques or resolving problems ass

tt

We arWW e and wilii l continue t
tt
ll
which could adv

ll

ersely affff eff ct our growth an

tt

d profit margins.

o be under continuous pressure from ou

r customers and competitors to rtt

educe the price of our products,

Our customtt
ers require our products to undergo a lengthy and expensive qualification process without any assurance of product
salell s and may demand to audit our operations from time to time. A failure to qualify a product or a negative audit finding could
adversrr ely affect our net sales, operating results and financial condition.

ff

ll

ll

Our customer orders are subject to cancellation or modififf catitt on usually with no penalty. High volumes of order cancellation or
reductitt on in qu

antitt tii iett s ordered could adversely affect our net sales, operating results and financial condition.

ii

ll

PrPP oductitt on at our manufacturing facilities could be disrupted for a variety of reasons, including natural disasters and other
tt
extee rtt aordinii ary ev
s
ould prevent us from producing enough of our products to maintain our sales and satis
fy our
customtt

ersrr ’ demands and could adversely affect our operating results and financial condition.

entstt , which c

r

s

ll

New technologies could result in the development of new products by our competitors and a decrease in demand for our products,
and we may not be able to develop new products to satisfy changes in demand, which would adversely affect our net sales
s
, market
e
share, ope

ratitt nii g results and financial condition.

ll

We mWW ay be subject to claill mii
yy
tett chnology
businii ess, operating r

, which could r
tt

s

ll

esults and financial condition.

s of infringement of third-party inii

tt
esult in significant expense, reduction in our intellectual property rights and a negat

tett llectual property rights or demands that we license third-party
pacm t on our

ive im

e

ee

We deWW pend on t
parts an
tt
and fiff nii ancial conditii ion could be adversely affec

htt irii d-party suppliers for titt mii ely deliveries of raw materials, manufacturing services, product and process development,
esults

d equipment, as well as finished products from other manufacturers, and our reputation with customers, operating r
ll

tett d if we are unable to obtain adequate s

ill es in a timely mll

anner.

upplu

tt
tt

i

A significant part of our growth strategy invol
or consummate desired acquisitions and, if we do make any ac
companm

tt
ii
ies with ou

r operations, which could adversely affect our busines

s

quisitions, we may be u

ii

ll
nable to s

uccessfully inii

n
tett grate an
e

y ac

s, operating results and financial condition.

vll es acquiring companies. We may be unable to identify suitable acquisition candi

tt

dates
quired

We arWW e subject to many environmental laws and regulations that could result in significant expenses and could adversely affect our
businii ess, operating r

esults and financial condition.

s

tt

ii

We mWW ay incur additional costs and face emerging risks associated environmental, social and governance (“ESG”) factors impacting
our operatitt ons.

Our products, or products we purchase from third parties for resale, may be found to be defective and, as a result, warranty claims
and product liability claims may be asserted against us and we may not have recourse against our suppliers, which may harm our
businii ess, rs

r customers, operating results and financial condition.

eputation witii h ou

tt

10

We mWW ay fail to attract or retain the qualified technical, salell s, markerr
tt
operate ou

r businii ess successfully, which could adversely affect our business, operating resultll s and f

tt

titt nii g, fiff nii ance and management/executive personnel required tott

iff nii ancial condition.

We may n
WW
resources, ws

ot be able to achieve future growth, and any such growth may place a strain on our management and on our systems and
inii ess, operating results and financial condition.

ff
ersrr ely af
fff ect our bus
ll

hich could adv

ll

ll

tt nii ventortt

Obsolell te i
affff eff ct our businii ess, operating results and financial condition.

ies as a result of changes in demand for our products and change in life cycles of our products coul
ll
d adversely
s

ff

r direct sales customtt

If ouII
adversrr ely affected.

ll

rr
ers or our distributors’ cus

rr
tomer
tt

s do not design our products into their applications, our net sales may be

WW
We are s
ll
could adv

ubject to intett rest rate risk that could have an adverse effect on our cost of wor
ersely affect our business, operating results and fiff nii ancial condition.

tt

kirr nii g capital and interest expens

tt

es, which

Our hedginii g strtt atett gies m
titt es mighi
our countett rpar

ay not be successful in mitigating our risks associated with interest rates or foreign e
rr
t not perfr orff m as agr

eed.

e

rr

i

xcee hange exposure or

WW
We may have a signif
businii ess, operating r

iff cant amount of debt with various financial institutions worldwide. Any indebtedness could adversely affect our
esultstt , fs

eet payment obligations under such debt.

iff nii ancial conditii itt on and our ability to mtt

s

Restrtt ictiontt
ff
ii htt e future.
in t

s in our credit facff

ilii ill tieii

s may limit our business and financial activities, including our ability to obtain additional c

tt

apital

Our business benefe its from ce
tt
esultll s an
tt
affff eff ct our operating r

ff

rtain Chinese government incentives. Expiration of, or changes to, these incentives could adversely
d financial condition.

ll
rate a gl

We ope
itii itt es will challenge our
WW
trtt ansfs eff r pricing methodologies or legal entity structures, which could adversely affect our operating results and financial condition.

obal business through numerous foreign subsidiaries, and there is a ris

k that tax author

tt

tt

ii

ii

ompany to risks
CeCC rtaitt n of our employees in the U.K. participate in a company-spons
associatett d with the esti
ompany’s
consolill datett d fiff nii ancial statements. InII accuracies or changes in these estimates could require material changes in the expense and
fuff ndinii g requiri ed.

CC
mii atett s and assumptions used in calculating expense and funding requirements recorded in the C

ored defined benefit plan which s

CC
ubjects the C
tt
ii

ff

ii

ii

Compliance with government regulations and customer demands regarding the use of “conflict minerals” may result in increased
tt
costs an

r businii ess, operating results and financial condition.

tt
d may have a negat

ive impact on ou

e

aintain an effective system of internal controls or discover material weaknesses in our internal control ov

er financial
ff
ail to m
If we f
II
repor
titt nii g, we may not be able to report our financial results accurately or detect fraud, which could harm our business and the
ee
trtt adinii g price of our ComCC mon StSS octt k.

ii

RIRR SII KSS S RKK

ER LEE ALL TETT D TO OUR I

EE

NII TNN ETT REE NATIONAL OPERARR TIONS

Our international operations subject us to risks that could adv

ll

ersely affect our ope

ff

rations.

ll

A slowdown i
tt
or elect
ii
n the Chinese economy could limit the grow
have a material adverse effect on our business, operating results and prospects.

ff
th in demand f
tt

ronic devic

es containing our products, which would

Economic regue

latitt on in China could materially and adversely affect our businii ess, operating results and prospects.

We could be adv
WW
’
ChCC inii a’s an

ersely affec
rr
u

titt -ii corruption campaign and similar worldwide anti-bribery laws.

tett d by violations of the United States’ Foreign Corrupt Practices Act, the U.K.’s Bribery Act 2010,

We arWW e subject to f

orff

tt

eign currency risk as a result of our international operations.

tt

ii
ncing r

ChCC inii a is eii
ee
xperie
make doing business in China less advantageous than i
ii
n prior ye
ii
businii ess, operating r

esults and financial condition.

apid social, political and economic change, which has increased labor costs and other related costs that could
ars. Increased labor costs in China could adversely affect our

s

tt

We may not continue t
tt
WW
inii come.ee

o receive pr

efe eff rentitt al tax trtt eatmtt ent in Asia, thereby increasing our income tax expense and reducing our net

ThTT e disii trtt ibutitt on of any en arninii gs of certain foreign subsidiaries may be subject to for

tt

i
eign i

nii come taxes, thus reducing our net income.

tt

We cWW ould be adv
ersely affected by thtt e compromise or theft of our technology, know-how, data or intellectual property or a
ll
requirii ement thtt at we yield rights in technology, know-how, data stored in foreign jurisdictions or intellectual property that we use in
such forff

urisii dictitt ons.

i
eign j

ll

11

RISKS RELATED TO OUR COMMON STOCK

Variations in our quarterly operating results may cause our stock price to be volatilell .ee

We mWW ay enter into future acquisitions and take certain actions in connection with such acquisitii itt ons that could adversely aff
price of our Common Stock.

ll

eff ct the

tt

Antitt -ii takeover e
atttt ett mpt.tt

tt
fe fff eff cts of c

ii
ertaitt n pr

ovisii ions of Delaware law and our Certificate of Incorpor

tt

atitt on and Bylaws, may hinder a take-over

GENERARR L RISK FACTORS

ThTT e inii vasion of UkrUU ainii e by Russia could nll

e
egat

itt vely impact our business.

ThTT e success of our business depends on the strength of the global economy and the stability of th
weaknesses in t

e financial markets, and anyn
ii
ii htt ese areas may have a material adverse effect on our net sales, operating results and financial condi

tion.

rr

tt

We mWW ay be adversrr ely af
ll
operatitt nii g resultll s an

tt

d fiff nii ancial condition.

fff eff cted by any disruption in our information technology systems, which could adversely affect our cash flows,

ll

TeTT rrorisii t attacks, or threats or occurrences of other terrorist activities, whether in the U.S. or internationally, may aff
ff
in wii

hich our Common Stock trades, the markets in which we operate and our operating results and financial condition.

tt

ect the markets

s
SySS stett m security risks, data protection br
operatitt ons, and any such disruption could r
s
affff eff ct our stoctt k price.

c

ssues could disrupt our internal
eaches, cyber-attacks and other related cybersecur
ll
educe our expected net sales, increase our expenses, damage our reputation and adversely

ii
itii y i
tt

RISKS RELATED TO OUR BUSINESS

ThTT e impact of the c
ratitt ons.
resultll s of ope

ii
tt

ontinuing COVCC

IVV DII -19 pandemic may have a material adverse effect on our business, financial condition and

ii

National, state and local governments have responded to the COVID-19 pandemic in a variety of ways including, by declaring
states of emergency, restricting people from gathering in groups or interacting within a certain physical distance (i.e., social distancing),
ordering businesses to close or limit operations and ordering people to stay at home (i.e., shelter in place), and imposing travel restrictions
(including quarantine requirements).

Given these governmental actions, there is no assurance that we will be permitted to operate under every current or future
government order or other restriction and in every location where we maintain operations. Any long-term limitations on, or long-term
closures of, our manufacturing facilities i
n Asia or Europe would have a negative adverse impact on our ability to manufacture, sell and
ship products and service customers and would have a material adverse impact on our business, financial condition and results of
operations.

ff

In addition, the COVID-19 pandemic may cause disruptions to the business and operations of our suppliers and customers, which

would adversely impact our business, financial condition and results of operations.

ShSS anghai, China experienced government imposed l

CC

ocll kdowns due to a resurgence of the COVID-19 virus.

We have manufacturing facilities located in Shanghai, China, where operations are subject to being shut-down by the Chinese
government due to a resurgence in the COVID-19 virus. An extended shut-down of our Shanghai facilities could have a material adverse
effff eff ct on the operations, results of operations, fiff nancial condition, liquidity and business outlook of our business.

Durinii g timii es of difficult market conditions, our fixed costs combined with lower net salell s and lower profit margins may h
e
negat

itt ve impact on our business, ope

iff nii ancial condition.

rating results and f

s

tt

ll

ave a

The semiconductor industry is characterized by high fixed costs. Notwithstanding our utilization of third-party manufacturing
city, most of our production requirements are met by our own manufacturing faff cilities. In difficult economic environments, we
capaa
could be faced with a de
cline in the utilization rates of our manufacturing facilities due to decreases in product demand. During such
periods, the costs associated with this excess capacity are expensed immediately and not capitalized into inventory, and we generally
experience lower gross margins. The market conditions in the future may adversely affect our utilization rates and consequently our
futff urt e gross margins, and this, in turn, could have a material negative impact on our business, operating results and financial condition.

ff

Downturns in the highly cyclical semiconductor industry or changes in end-market demand could adversely affect our operating
tt
resultll s an

d fiff nii ancial condition.

r

The semiconductor industry is highly cyclical

, and periodically experiences signififf cant economic downturns characterized by
diminished product demand, production overcapacity, excess inventory, which can result in rapid erosion in average selling prices and
signififf cant net sales declines, which may harm our operating results and fiff nancial condition.

rr

12

In addition, we operate in a few narrow markets of the broader semiconductor market and, as a result, cyclical fluctuations may
affff eff ct these segments to a greater extent than they affect the broader semiconductor market. This may cause us to experience greater
ions in our operating results and financial condition than compared to some of our broad line semiconductor competitors. In
t
flff uctuat
addition, we may experience significff ant changes in our profitability as a result of variations in sales, changes in product mix, changes
in end-user markets and the costs associated with the introduction of new products. The markets for our products depend on continued
demand in the industrial, automotive, computing, communications and consumer sectors. These end-user markets also tend to be cyclical
and may also experience changes in demand that could adversely affect our operating results and financial condition.

ThTT e semiconductor businii ess is highly competitive, and increased competition may harm our business, operating results and financial
tt
conditii ion.

ii

The semiconductor industry in which we operate is highly competitive. We expect intensififf ed competition from existing
competitors and new entrants. Competition is based on price, product performance, product availability, quality, reliability, technological
innovation and customer service. We compete in various markets with companies of various sizes, many of which are larger and have
greater resources or capabilities as it relates to financial, marketing, distribution, brand name recognition, research and development,
manufacturt
ing and other resources than we have. As a result, they may be better able to develop new products, market their products,
pursue acquisition candidates and withstand adverse economic or market conditions. Most of our current major competitors are broad
line semiconductor manufacturers who often have a wider range of product types and technologies than we do. In addition, companies
not currently in direct competition with us may introduce competing products in the future. Some of our current major competitors are
Infiff neon Technologies A.G., Epson, Kyrocera, Nexperia, NXP Semiconductors N.V., ON Semiconductor Corporation, Renesas
fully in the future,
Electronics Corporat
and competitive pressures may harm our business, operating results and financial condition.

ion, Texas Instruments and Vishay Intertechnology, Inc. We may not be able to compete success

a

r

Delayll
s in i
tett chnical equipmii

ii nii itii itt ation of production at facilii ill tii itt es due to implementing new productitt on tett chniques or resolving problems associated with
ent malfunctions could adversely affeff ct our manufacturing efficiencies, operating results and financial condition.

Our manufaff cturt

ing effff iff ciency has been and will be an important factor in our future profitability, and we may not be able to
maintain or increase our manufacturing efficiency. Our manufacturing and testing processes are complex, require advanced and costly
equipment and are continually being modifieff d in our efforts to improve product performance and cost. Difficulties in the manufaff cturing
process can lower yields. Technical or other problems could lead to production delays, order cancellations and lost net sales. In addition,
any problems in achieving acceptable yields, construction delays, or other problems in upgrading or expanding existing facilities,
building new faff cilities, bringing new manufacturing capacity to full production or changing our process technologies, could also result
in capaa
city constraints, production delays and a loss of future net sales and customers. Our operating results also could be adversely
affff eff cted by any increase in fixed costs and operating expenses related to increases in production capacity if net sales do not increase
proportionately, or in the event of a decline in demand for our products. Any disruption at any of our wafer fabrication facilities or
assembly and test facilities c
ould have a material adverse effect on our manufacturing efficiencies, operating results and financial
condition.

ff

ff

We arWW e and wilii l cll ontitt nii ue to be under continuous pressure from our customers and competitors to reduce the price of our products,s
which could adversely affff eff ct our growth an

d profit margins.

tt

Prices for our products tend to decrease over their life cycle. There is substantial and continuing pressure from customers to reduce
the total cost of purchasing our products. To remain competitive and retain our customers and gain new ones, we must continue to reduce
our costs through design, product and manufacturing i
mprovements. We must also strive to minimize our customers’ shipping and
ncing costs and to meet their other goals for rationalization of supply and production. Our net sales growth and profit
rr
inventory fina
margins will suffff er i

f we cannot effectively continue to reduce our costs and keep our product prices competitive.

ff

ff

Our customers requirii e our products to undergo a lengthy and expensive qualification process without any assurance of product
salell s and may demand to audit our operations from time to time. A failure to qualify a product or a negative audit finding could
adversrr ely affect our net sales, operating results and financial condition.

ff

ll

ff

Prior to purchasing our products, our customers may require our products to undergo an extensive qualification process, which
involves rigorous reliabia lity testing. This qualification process may continue for six months or longer. However, qualification of a
product by a customer does not ensure any sales of the product to that customer. In addition, we are focusing more on the automotive
and industrial markets. These markets, automotive in particular, require higher quality standards. Although we are working to ensure
our organization and products meet the more rigorous quality standards, there can be no assurances we will succeed. Even after
successful qualification and sales of a product to a cus
tomer, a subsequent revision to the product, changes in the product’s
manufacturt
ing process or the selection of a new supplier by us may require a requalification process, which may result in delayed net
sales, foregone sales and excess or obsolete inventory. After our products are qualified, it can take an additional six months or more
beforff e the customer commences volume production of components or devices that incorporate our products. Despite these uncertainties,
we devote substantial resources, including design, engineering, sales, marketing and management efforts, toward qualifying our products
with customers in anticipation of sales. If we are unsuccessful or delayed in qual
ifying any of our products with a customer, such failure
or delay would preclude or delay sales of such product to the customer, which may adversely affect our net sales, operating results and
fiff nancial condition.

ff

13

In addition, from time to time, our customers may demand an audit of our records, product manufacturing, qualification, and
packaging processes, business practices and other related items to verify that we have complied with our business obligations, standard
processes and procedures, product specififf cations and certain governing laws and regulations related to our business practices, and in
accordance with the agreed terms and conditions of mutuat
If the audit shows any deficiency in any of these
categories, our customers may require us to implement extensive protocols to remedy the deficiency, assess us significant penalties,
refusff
e shipments of our products, return existing inventory, cancel orders, or terminate our business relationship, each of which will
adversely affff eff ct our net sales, operating results and financial condition.

l business agreements.

Our customer orders are subject to cancellation or modififf catitt on usually with no penalty. High volumes of order cancellation or
reductitt on in qu

antitt tii iett s ordered could adversely affect our net sales, operating results and financial condition.

ii

ll

All of our customer orders are subju ect to cancellation or modification, usually with no penalty to the customer. Orders are generally
made on a purchase order basis, rather than pursuant to long-term supply contracts, and are booked from immediate delivery to twelve
months or more in advance of delivery. The rate of booking new orders can vary significantly from month to month. We, and the
semiconductor industry as a whole, are experiencing a trend towards shorter customer-requested lead times, which is the amount of time
between the date a customer places an order and the date the customer requires shipment. Furthermore, our industry is subject to rapid
changes in customer outlook and periods of excess inventory due to changes in demand in the end-markets our industry serves. As a
result, many of our purchase orders are revised, and may be cancelled, with little or no penalty and with little or no notice. However, we
must still commit production and other resources to fulfilling these purchase orders even though they may ultimately be cancelled. If a
signififf cant number of purchase orders are cancelled or product quantities ordered are reduced, and we are unable to timely generate
replacement orders, we may build up excess inventory and our net sales, operating results and financial condition may suffer.

PrPP oductitt on at our manufacturing facilities could be disrupted for a variety of reasons, including natural disastett rs and other
ii
ould prevent us from producing enough of our products to maintain our sales and sati
sfy our

entstt , which c

s

ll

ersrr ’ demands and could adversely affect our operating results and financial condition.

extee rtt aordinii ary ev
customtt

r

rr
A disrupt

ion in production at our manufacturing facilities could have a material adverse effect on our business. Disruptions could
occur for many reasons, including fire, floods, hurricanes, typhoons, droughts, tsunamis, volcanoes, earthquakes, disease or other similar
naturt al disasters, unplanned maintenance or other manufaff cturing problems,
tages, power outages or shortages,
telecommunications faff ilures, strikes, transportation interrupt
ion, government regulation, terrorism or other extraordinary events,
including epidemics (such as the outbreak of the COVID-19 virus) and related travel restrictions,. Such disruptions may cause direct
mage to our employees and property and related internal controls with significant indirect consequences. Alternative facilities
injury or da
with sufficient capaa
city or capaa bia lities may not be available, may cost substantially more or may take a significant time to start
production, each of which could negatively affect our business and financial performance. If one of our key manufacturing facilities is
unabla e to produce our products for an extended period of time, our sales may be reduced by the shortfall caused by the disruption, and
we may not be able to meet our customers’ needs, which could cause our customers to seek other suppliers. Such disruptions could have
an adverse effect on our operating results and fiff nancial condition.

labor shor

ff

rr

r

r

t

ii
NeNN w tett chnologies could result i

htt e development of new products by our competitors and a decrease in demand for our
d we may not be able to develop new products to satisfy changes in demand, which would adversely affect our net sales,s
productstt , ans
e
t share, ope
markerr

d fiff nii ancial condition.

ratitt nii g resultll s an

n t

ll

ii

tt

Our product range and new product development program are focused on low pin count semiconductor devices with one or more
active or passive components. Our failure to develop new technologies, or anticipate or react to changes in existing technologies, either
within or outside of the semiconductor market, could materially delay development of new products, which could result in a decrease
in our net sales and a loss of market share. The semiconductor industry is characterized by rapidly changing technologies and industry
standards, together with frequent new product introductions. Our financial performance depends on our ability to design, develop,
manufacturt e, assemble, test, market and support new products and product enhancements on a timely and cost-effeff ctive basis. We may
not successfully identify new product opportunities or develop and bring new products to market or succeed in selling them into new
customer applications in a timely and cost-effective manner.

Products or technologies developed by other companies may render our products or technologies obsolete or noncompetitive, and
since we operate primarily in a narrower segment of the broader semiconductor industry, this may have a greater effeff ct on us than it
would if we were a broad-line semiconductor supplier with a wider range of product types and technologies. Many of our competitors
are larger and more established international companies with greater engineering and research and development resources than us. Our
faff ilure to identify or capitalize on any fundamental shifts in technologies in our product markets, relative to our competitors, could harm
our business, have a material adverse effect on our competitive position within our industry and harm our relationships with our
customers. In addition, to remain competitive, we must continue to reduce package sizes, improve manufacturing costs and expand our
sales. We may not be able to accomplish these goals, which would adversely affect our net sales, market share, operating results and
fiff nancial condition.

14

We mWW ay be subject to claims of infringement of third-party intellell ctual property rights or demands that we license third-party
tett chnology
pacm t on our
yy
businii ess, operating r

tt
esult in significant expense, reduction in our intellectual property rights and a negat

, which could r
tt

esults and financial condition.

ive im

e

s

ll

The semiconductor industry is characterized by vigorous protection and pursuit of intellectual property rights. From time to time,
third parties have asserted, and may in the future assert, patent, copyright, trademark and other intellectual property rights to technology
that is important to our business and have demanded, and may in the future demand, that we license their patents and technology. Any
litigation to determine the validity of allegations that our products infringe or may infringe these rights, including claims arising through
our contractual indemnification of our customers, or claims challenging the validity of our patents, regardless of its merit or resolution,
could be costly and divert the efforts and attention of our management and technical personnel. We may not prevail in litigation given
the complex technical issues and inherent uncertainties in intellectual property litigation. If litigation results in an adverse ruling, we
could be required to:

• pay substantial damages for past, present and future use of the infr

ff

inging technology;

• cease manufacture, use or sale of infringing products;

• discontinue the use of infringing technology;

• expend significant resources to develop non-infringing te

ff

chnology;

• pay substantial damages to our customers or end-users to discontinue use or replace infringing technology with non-infringing

technology;

• license technology from the third party claiming infringement, which license may not be availabla e on commercially reasonable

terms, or at all; or

• relinquish intellectual property rights associated with one or more of our patent claims, if such claims are held invalid or

otherwise unenforff ceable.

ee

We deWW pend on t
parts an
tt
and fiff nii ancial conditii ion could be adversely affec

htt irii d-party suppliers for titt mii ely deliveries of raw materials, manufacturing services, product and process development,
esults

d equipment, as well as finished products from other manufacturers, and our reputation with customers, operating r
ll

tett d if we are unable to obtain adequate s

ill es in a timely mll

anner.

upplu

tt
tt

Our manufacturing operations depend upon obtaining adequate supplies of raw materials, manufacturing services, product and
process development, parts and equipment on a timely basis from third parties. In some instances, a supplier may be our sole-source
supplier. Any interruption in, or change in the cost or quality of, the supply of raw materials, manufacturing services, product and process
development, parts or equipment needed to manufacture our products could adversely affect our reputation with customers, operating
results and financial condition.

ff

r

ff

In addition, we sell finished products frff om other manufacturers. Our business could also be adversely affected if there are quality
oducts we sell. From time to time, various suppliers may extend lead-times, limit supplies or increase
problems with the finished pr
prices due to capacity constraints or other factors. We have no long-term purchase contracts with any of these manufacturers and,
thereforff e, have no contractual assurances of continued supply, pricing or access to finished products that we sell, and any such
manufacturt er could discontinue supplying to us at any time. Additionally, some of our suppliers of finished products or wafers compete
directly with us and may, in the future, choose not to supply products to us.

i

A significant part of our growth strategy invol
or consummate desired acquisitions and, if we do make any ac
companm

tt
ii
ies with ou

r operations, which could adversely affect our busines

s

quisitions, we may be u

ii

ll
nable to s

uccessfully inii

n
tett grate an
e

y ac

s, operating results and financial condition.

vll es acquiring companies. We may be unable to identify suitable acquisition candi

tt

dates
quired

A significant part of our growth strategy involves acquiring companies. We may be unsuccessful in identifying suitable acquisition
candidates, or we may be unable to consummate a desired acquisition. To the extent we do make acquisitions, if we are unsuccessful in
integrating these companies or their operations or product lines with our operations, or if integration is more difficult than anticipated,
we may experience disruptions that could have a material adverse effect on our business, operating results and financial condition. In
addition, we may not realize all of the benefits we anticipate from any such acquisitions. Some of the risks that may affect our ability to
integrate or realize any anticipated benefits from acquisitions that we may make include those associated with:

ff

ff

• higher than anticipated acquisition costs and expenses;

• use a significant portion of our cash and incur additional debt;

• issue equity securities, which would dilute current stockholders’ percentage ownership;

• dilute existing shareholders;

• incur or assume contingent liabilities, known or unknown;

15

• incur amortization expenses related to intangibles;

• incur large, immediate accounting write-offs;

• incur substantial expense and diversion of management attention, regardless of the success of the acquisition;

• create goodwill and other intangible assets that may require impairment charges in the future;

• unexpected losses of key employees or customers of the acquired company;

• delays in obtaining customer qualification of acquired faff cilities;

• bringing the acquired company’s standards and processes, including disclosure controls and procedures and internal control

over financial reporting, into conformance with our operations;

• coordinating our new product and process development;

• hiring additional management and other critical personnel;

• increasing the scope, geographic diversity and complexity of our operations;

• diffff iff culties in consolidating faff cilities and transferring processes and know-how;

• diffff iff culties in reducing costs of the acquired entity’s business;

• diversion of management’s attention from the management of our business; and

• adverse effff ects on existing business relationships with cus

ff

tomers.

We may ultimately not be successful in overcoming these risks or any other problems encountered in connection with acquisitions.

We are subject to many en
business, operating results and financial condition.

rr
nvironmental laws and regulations that could result in significant expenses and could adver

ll

sely affect our

We are subject to a variety of U.S. federal, state, local and foreign governmental laws, rules and regulations related to the use,
storage, handling, discharge or disposal of certain toxic, volatile or otherwise hazardous chemicals used in manufacturing our products
throughout the world. Any of these regulations could require us to acquire equipment or to incur substantial other expenses to comply
with environmental regulations. Any failure to comply with present or future environmental laws, rules and regulations could result in
fines, suspension of production or cessation of operations, any of which could have a material adverse effect on our business, operating
results and financial condition.

We mWW ay incur additional costs and face emerging risks associated environmental, social and governance (“ESG”) factors impacting
our operations.

Stakeholders such as investors, employees and the communities in which we operate have increased their focff us on our ESG and
sustainability related activities, specifically in the corporate social a
nd environmental responsibility (“CSER”) areas. Some investors
and customers may use our ESG and sustainabia lity related information as well as third party ESG ratings and metrics to guide their
investment strategies and product purchases. If our CSER policies and practices are perceived to be inadequate, we could face
reputational damages or loss of sales and our fiff nancial results may be adversely affected.

r

ff

Our products, or products we purchase frff om third parties for resale, may be found to be defective and, as a result, warranty claims
and product liability claims may be asserte
d againii st us and we may not have recourse against our suppliers, which may harm our
business, reputation witii h ou

r customers, operating results and financial condition.

a

tt

tt

Our products, or products we purchase frff om third parties for resale, are typically sold at prices that are an insignificant portion of
the overall value of the equipment or other goods in which they are incorporated. Since a defect or failure in our products could give
rise to failures in the end-products that incorporate them (and consequential claims for damages against our customers from their
customers), we may face claims for damages that are disproportionate to the net sales and profits we receive from the products involved
and we may not have recourse against our suppliers. Even in cases where we do not believe we have legal liability for such claims, we
may choose to pay for them to retain a customer’s business or goodwill or to settle claims to avoid protracted litigation. Our operating
results and business could be adversely affected as a result of a significant quality or performance issue in our products, if we are required
or choose to pay for the damages that result. We may choose not to carry liability insurance, may not have sufficient insurance coverage,
or may not have sufficient resources, to satisfy all possible warranty claims and product liability claims. In addition, any perception that
our products are defective would likely result in reduced sales of our products, loss of customers and harm to our business, reputation,
operating results and financial condition.

16

We mWW ay fail to attract or retain the qualified technical, salell s, markerr
tt
operate ou

r businii ess successfully, which could adversely affect our business, operating resultll s and f

tt

titt nii g, fiff nii ance and management/executive personnel required tott

iff nii ancial condition.

Our future success depends, in part, upon our ability to attract and retain highly qualified technical, sales, marketing, finance and
managerial personnel. Personnel with the necessary err
xpertise are scarce and competition for personnel with these skills is intense. We
may not be abla e to retain existing key technical, sales, marketing, finance and managerial employees or be successful in attracting,
assimilating or retaining other highly qualified technical, sales, marketing, finance and managerial/executive personnel in the future.
For example, we have faced, and continue to face, intense competition for qualified technical and other personnel in China, where our
assembly and test facilities are located. A number of U.S. and multi-national corporations, both in the semiconductor industry and in
other industries, have recently established and are continuing to establish factories and plants in China, and the competition for qualified
personnel has increased significantly as a result. If we are unable to retain existing key employees or are unsuccessful in attracting new
highly qualififf ed employees, our business, operating results and financial condition could be materially and adversely affected.

ff

rr

We may n
WW
resources, ws

ot be able to achieve future growth, and any such growth may place a strain on our management and on our systems and
inii ess, operating results and financial condition.

ff
ersrr ely af
fff ect our bus
ll

hich could adv

ll

ll

Our abia lity to successfully grow our business requires effective planning and management. Our past growth, and our targeted
futff urt e growth, may place a significant strain on our management and on our systems and resources, including our financial and
managerial controls, reporting systems and procedures. In addition, we will need to continue to train and manage our workforce
worldwide. If we are unable to effectively plan and manage our growth effeff ctively, our business and prospects will be harmed and we
will not be abla e to maintain our profitable growth, which could adversely affect our business, operating results and financial condition.

tt nii ventortt

Obsolell te i
affff eff ct our businii ess, operating results and financial condition.

ies as a result of changes in demand for our products and change in life cycles of our products coul
ll
d adversely
s

ff

The life cycles of some of our products depend heavily upon the life cycles of the end-products into which our products are
designed. End-market products with short life cycles require us to manage closely our production and inventory levels. Inventory may
also become obsolete because of adverse changes in end-market demand. We may in the future be adversely affected by obsolete or
excess inventories, which may result from unanticipated changes in the estimated total demand for our products or the estimated life
cycles of the end-products into which our products are designed. In addition, some customers restrict how far back the date of
an be and certain customers may stop ordering products from us and go out of business due to adverse
manufacturt e for our products c
economic conditions; therefore, some of our product inventory may become obsolete and, thus, adversely affect our business, operating
results and financial condition.

ff

ff

r direct sales customtt

If ouII
adversrr ely affected.

ll

rr
ers or our distributors’ cus

rr
tomer
tt

s do not design our products into their applications, our net sales may be

We expect an increasingly significant portion of net sales will come from products we design specififf cally for our customers.
However, we may be unabla e to achieve these design wins. In addition, a design win from a customer does not guarantee future sales to
that customer.

We are s
WW
ll
could adv

ubject to intett rest rate risk that could have an adverse effect on our cost of wor
ersely affect our business, operating results and fiff nii ancial condition.

tt

kirr nii g capital and interest expens

tt

es, which

We currently have a floating rate debt that is subject to interest rate changes. See “Liquidity and Capital Resources” below and
Note 8 of “Notes to Consolidated Financial Statements” of this Annual Report for additional information. A rise in interest rates could
have an adverse impact upon our cost of working capia tal and our interest expense. Based on our debt balances at December 31, 2022,
an increase or decrease in interest rates by 1.0% for the year on our long-term debt would increase or decrease our annual interest rate
expense by approximately $1.5 million.

Our hedginii g strtt atett gies m
titt es mighi
our countett rpar

ay not be successful in mitigating our risks associated with interest rates or foreign e
rr
t not perfr orff m as agr

eed.

e

rr

i

xcee hange exposure or

a

We use interest rate swaps and forei

gn exchange forward contracts to provide a level of protection against interest rate risks and
forff eign exchange exposure, but no hedging strategy can protect us completely. The nature and timing of hedging transactions influence
the effff eff ctiveness of these strategies. Poorly designed strategies, improperly executed and documented transactions or inaccurate
assumptions could actually increase our risks and losses. In addition, hedging strategies involve transaction and other costs. The hedging
strategies and the derivatives that we use may not be able to adequately offset the risks of interest rate volatility and our hedging
transactions may result in or magnify losses. Furthermore, interest rate and foreign exchange derivatives may not be available on
. Any of the foregoing risks could adversely affect our business,
faff vorabla e terms or at all, particularly during economic downturns

t

17

fiff nancial condition and results of operations. We are exposed to counterparty credit risk in the event of non-performance by
counterparties to the interest rate swaps and foreign exchange contracts.

r

We may have a signif
WW
businii ess, operating r

iff cant amount of debt with various financial institutions worldwide. Any indebtedness could adversely affect our
esultstt , fs

eet payment obligations under such debt.

iff nii ancial conditii itt on and our ability to mtt

s

We may have a significant amount of debt and substantial debt service requirements on our borrowings, including our credit
faff cilities with various financial institutions worldwide. As of December 31, 2022, $150.3 million in long-term debt was outstanding. In
addition and we have short-term forff eign credit faff cilities with borrowing capacities of approximately $172.8 million with an unused
amount of $136.0 million.

Our outstanding debt could have significant consequences on our future operations, including:

• making it more difficult for us to meet our payment and other obligations under our outstanding debt agreements;

• resulting in one or more events of default if we fail to comply with the financial and other restrictive covenants contained in
our debt agreements, which events of default could result in all of our debt becoming immediately due and payable and, in the
case of an event of default under our secured debt could permit the lenders to foreclose on our assets securing that debt;

• reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate

rr
purpos

es, and limiting our ability to obtain additional financing for thes

ff

e purposes;

• subjecting us to the risks of increased sensitivity to interest rate increases on our indebtedness with variable interest rates;

• limiting our flexibility in planning for, or reacting to, and increasing our vulnerability to, changes in our business, the industry

in which we operate and the general economy; and

• placing us at a competitive disadvantage compared to our competitors that have less debt or are less leveraged.

Any of the above

a

-listed faff ctors could have an adverse effect on our business, operating results, financial condition and our ability

to meet our payment obligations under our debt agreements.

Current interest rates on a significant amount of our outstanding debt are variable and include the use of the London Interbank
Offff eff red Rate (“LIBOR”). On March 5, 2021, the U.K. Financial Conduct Authority, the regulator of LIBOR, announced that USD
LIBOR rates will no longer be published aftff er June 30, 2023. While we expect LIBOR to be available in substantially its current form
until at least the end of June 30, 2023, it is possible that LIBOR will become unavailable prior to that point which may impact our credit
faff cility and interest rate swaps. The use of an alternative base rate or a benchmark replacement rate as a basis for calculating interest
with respect to any outstanding variabla e rate indebtedness could lead to an increase in the interest we pay and a corresponding increase
in our costs of capital or otherwise have a material adverse impact on our business, fiff nancial condition or results of operations.

Restrtt ictiontt
ff
ii htt e future.
in t

s in our credit facff

ilii ill tieii

s may limit our business and financial activities, including our ability to obtain additional c

tt

apital

Our U.S. credit facility contains covenants imposing various restrictions on our business and financial activities. These restrictions
may affect our ability to operate our business and undertake certain financial activities and may limit our ability to take advantage of
potential business or financial opportunities as they arise. The restrictions these covenants place on us include limitations on our ability
to incur liens, incur indebtedness, make investments, dissolve or merge or consolidate with or into another entity, dispose of certain
property, make restricted payments (including dividends and share repurchases), issue or sell equity interests, engage in other different
material lines of business, conduct related party transactions, enter into certain burdensome contractual obligations and use proceeds
frff om our credit facility to purchase or carry margin stock or to extend credit to others for the same purpose. Our U.S. credit facility also
requires us to meet certain financial ratios, including a minimum consolidated fixed charge coverage ratio and a maximum consolidat
ed
leverage ratio.

ff

ff

rr

Our abila

ity to comply with the U.S. credit faff cility may be affected by events beyond our control, including prevailing economic,
fiff nancial and industry condi
tions. The breach of any of these covenants or restrictions could result in an event of default under the
faff cility. An event of default under the facility would permit the lenders under the facility to declare all amounts owed under such facility
l. Upon acceleration of our indebtedness, we may be unable to repay the accelerated amount of
to be immediately due and payable in fulff
principal and interest on the credit faff cilities that would then be due. See “Management’s Discussion and Analysis of Financial Condition
and Results of Operations – Financial Condition-Debt instruments” in Part II, Item 7 of this Annual Report for additional information.

Our business benefits from certain Chinese government incentives. Expiration of, or changes to, these incentives could adversely
affff eff ct our operating r

d financial condition.

tt
esultll s an

tt

The Chinese government has provided various incentives to technology companies, including our manufacturing facilities located
in Chengdu, Jinan, Shanghai and Wuxi, China, in order to encourage development of the high-tech industry. These incentives include
reduced tax rates and other measures. As a result, we are entitled to a preferential enterprise income tax rate of 15% so long as our
manufacturing faff cilities continue to maintain their High and New Technology Enterprise (“HNTE”) status. If we were to no longer meet

18

the HNTE requirements, our statutory tax rate for our approved Shanghai facilities would increase to 25% for any period in which an
audit shows we were not compliant, which could adversely affect our operating results and financial condition. One of our
manufacturing faff cilities and one of our wafeff r faff bra ication facilities located in Shanghai were approved for HNTE status for the tax years
2021-2023. The Company expects to continue to meet HTND requirements in future years. HNTE qualification requires, but is not
limited to, metrics based on China research and development expenditures as well as research and development headcount and overall
college-degreed headcount. Any prior years that have already been approved are subject to audit requirements. If we were to no longer
iod in which
a
meet the HNTE requirements, our statutory tax rate for our a
pproved Shanghai facilities would increase to 25% for any per
an audit shows we were not compliant, which could adversely affeff ct our operating results and financial condition.

ff

We have qualified for tax incentives offered in the Go West Initiative (“Go West”), where companies are entitled to a preferential
income tax rate of 15% for doing business in western China. If we were to no longer meet the Go West requirements, our statutory tax
s joint venture would increase to 25%, which could adversely affeff ct our operating results and financial condition.
ff
rate for thi

The impact of our HNTE and Go West statust

, collectively called tax holidays, decreased our tax expense by approximately $0.2
million, ($0.2) million and $0.9 million for the twelve months ended December 31, 2022, 2021 and 2020, respectively. The benefit of
the tax holidays on basic and diluted earnings per share for the twelve months ended December 31, 2022, 2021 and 2020 was
a
appr

oximately $0.00, $0.00 and $0.02, respectively.

ll
rate a gl

We ope
htt at tax authtt orities will challenge our
WW
trtt ansfs eff r pricing methodologies or legal entity structures, which could adversely affect our operating results and financial condition.

ii
obal business through numerous foreign subsidiaries, and there is a r
isk t

tt

We conduct operations worldwide through our foreign subsidiaries and are, therefore, subject to complex transfer pricing
regulations in the jurisdictions in which we operate. Transfer pricing regulations generally require that, for tax purposes, transactions
between related parties be priced on a basis that would be comparabla e to an arm’s length transaction between unrelated parties. There is
uncertainty and inherent subjectivity in complying with these rules. To the extent that any foreign tax authorities disagree with our
transfer pricing policies, we could become subject to significant tax liabilities and penalties. Based on our current knowledge and
probability assessment of potential outcomes, we believe that we have provided for all tax exposures. However, the ultimate outcome
of a tax examination could differ materially from our provisions and could have a material adverse effect on our business, financial
condition, operating results and cash flows.

Our legal organizational structure could result in unanticipated unfavorable tax or other consequences which could have a material
adverse effect on our fiff nancial condition and operational results. In some countries, we maintain multiple entities for tax or other
purpos
es. Changes in tax laws, regulations, future jurisdictional profitability of us and our subsidiaries, and related regulatory
rr
interpretations in the countries in which we operate may impact the taxes we pay or tax provision we record, which could have a material
adverse effect on our operating results. In addition, any challenges to how our entities are structured or realigned or their business
purpose by taxing authorities could result in us becoming subject to significant tax liabilities and penalties which could have a material
adverse effect on our business, financial condition, operating results and cash flows.

ees in the U.K. participate in a company-

r employm
CeCC rtaitt n of ou
ii
isii ks associated witii h the estimates and assumptions used in calculating expense and funding r
y tn o rtt
ComCC panm
the Companyn ’s consolidated financial s
tatett mentstt . Inaccuracies or changes in thes
’
expense and fuff ndinii g required.

sponsored defined benefit plan (the “Plan”), which subjects the
equirements recorded in
e estimii atett s could require material changes in the

tt

ii

ii

ii

In accounting for the Plan, we are required to make actuarial assumptions that are used to calculate the earning value of the related
assets, where applicable, and liabilities and the amount of expenses to be recorded in our consolidated financial statements. Assumptions
include, but are not limited to, the expected return on plan assets, discount rates, and mortality rates. While we believe the underlying
assumptions are appropriate, the carrying value of the related assets and liabilities and the actual amount of expenses recorded in the
consolidated financial statements could differ materially from the assumptions used.

The Plan’s obligation to pay pensions is estimated by using actuarial assumptions. To the extent that the Plan’s assets are not
suffff iff cient to meet the estimated amount of the Plan’s obligations, further funding of the Plan will be required by the Plan's sponsoring
employers, Diodes Zetex Limited and Diodes Zetex Semiconductors Limited, over an agreed upon deficit recovery period.

As of December 31, 2022, the benefit obligation of the plan was approximately $98.8 million and the total assets in such plan
oximately $91.3 million. Therefore, the plan was underfunded by approximately $7.5 million. The difference between plan
a
were appr
obligations and assets, or the funde
he plan, is a signififf cant factor in determining the net periodic benefit costs of the plan
ff
and the ongoing fundi

ng requirements of the plan.

t
d status of t

ff

a

The trusrr

tees are required to review the funding position every three years. An actuarial valuation was performed as of March 31,
oximately GBP 20 million (approximately $26 million based on a GBP: USD exchange rate of 1:1.3).
2022, resulting in a deficit of appr
As a result of this valuation we have agreed to a revised schedule of contributions of GBP 2.0 million (approximately $2.6 million based
on a GBP: USD exchange rate of 1:1.3 ) to be paid annually with effect from January 1, 2023 to address the defiff cit revealed by the
valuation (with the fiff rst payment made by December 31, 2023 through December 31, 2028). A final payment of GBP 1.5 million
oximately $1.95 million based on a GBP: USD rate of 1:1.3) will be made by December 31, 2029. These contributions, together
a
(appr
with the assumed asset outpet

rforff mance, are expected to eliminate the defiff cit by December 31, 2029.

19

The plan’s trustees appoint fund managers to carry out all the day-to-day functions relating to the management of the fund and its
administration. The fund managers must invest their portion of the plan’s assets in accordance with their investment manager agreement
agreed by the trustees. The trustees are responsible for complying with these investment manager agreements and for deciding on the
portion of the plan’s assets that will be invested with each fund manager. When making decisions, the trustees take advice from experts
including the plan’s actuary and also have the option to consult with the Company.

Compliance witii h government regulations and customer demands regarding the use of
ivtt e impact on our business, ope
tt
costs an

rating results and fin

d may have a negat

e

s

tt

tt

ancial conditii itt on.

“conflict minerals

n

” may result in increased

The Dodd-Frank Wall Street Reforff m and Consumer Protection Act of 2010 imposes disclosure requirements regarding the use of
certain minerals, which are mined frff om the Democratic Republic of Congo and adjoining countries, known as conflict minerals. These
requirements affect the pricing, sourcing and availabia lity of minerals used in the manufacture of semiconductor devices (including our
products). We are incurring additional costs associated with complying with the disclosure requirements, such as costs related to
determining the source of any conflict minerals used in our products. Our supply chain is complex, and we may be unable to verify the
ll metals used in our products. Customers may demand that the products they purchase be free of conflict minerals.
origins for a
Thereforff e, we may encounter challenges with our customers and stockholders if we are unable to certify that our products ar
e conflict
frff ee. This requirement could affect the sourcing and availability of products we purchase from suppliers. This may reduce the number
of suppliers that may be able to provide conflict-free products, and may affect our ability to obtain products in sufficient quantities to
meet customer demand or at competitive prices.

ff

ff

aintain an effective system of internal controls or discover material weaknesses in our internal control over financial
ff
If we f
II
ail to m
repor
titt nii g, we may not be able to report our financial results accurately or detect fraud, which could harm our business and the
ee
trtt adinii g price of our ComCC mon StSS octt k.

ii

Effff eff ctive internal controls are necessary for us to produce reliable financial reports and are important in our effort to prevent
fiff nancial frff aud. We are required to periodically evaluate the effectiveness of the design and operation of our internal controls. These
evaluations may result in the conclusion that enhancements, modififf cations or changes to our internal controls are necessary or desirable.
While management evaluates the effff eff ctiveness of our internal controls on a regular basis, these controls may not always be effective.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate. If we fail to maintain an effective system
of internal controls or if management or our independent registered public accounting firm were to discover material weaknesses in our
internal controls, we may be unable to produce reliable financial reports or prevent fraud, which could harm our financial condit
ion and
operating results, and could result in a loss of investor confidence and a decline in our stock price.

a

a

ff

RISKS RELATED TO OUR INTERNATIONAL OPERATIONS

Our international operations subject us to risks that could adv

ll

ersely affect our ope

ff

rations.

The majority of our manufacturing facilities are located in China. For the twelve months ended 2022, 2021 and 2020 our Asian
and European subsidiaries represented approximately 76%, 76% and 78%, respectively, of our net sales. There are risks inherent in
doing business internationally, including the following, any of which could cause harm to our business:

• changes in, or impositions of, legislative or regulatory requirements, including income tax or value added tax laws in the U.S.

and in the countries in which we manufacture or sell our products;

• compliance with trade or other laws in a variety of jurisdictions;

• trade restrictions, transportation delays, work stoppages, and economic and political instability;

• changes in import/tt export regulations, tariffs and freight rates, environmental regulations and land use rights;

• diffff iff culties in collecting receivabla es and enforcing contracts;

ff

• currency exchange rate fluctuations;

• restrictions on the transfer of funds from foreign subsidiaries to the U.S.;

• the possibility of international conflff ict, particularly between or among China, the U.K., Germany, Taiwan and the U.S.;

• legal, regulatory, political and cultural differences among the countries in which we do business;

• longer customer payment terms; and

• changes in U.S. or forff eign tax regulations.

We believe that our operations are in compliance with all applicable legal and regulatory requirements in all material respects.
However, changes in the political environment or government policies in those jurisdictions could result in revisions to laws or
regulations or their interpretation and enforcement. In addition, a significant destabilization of relations between or among China, the
20

U.K., Germany, Hong Kong, Taiwan and the U.S. could result in restrictions on our operations or the sale of our products or the forfeiture
of our assets in these jurisdictions.

In addition to the ongoing issues regarding tariffs, China has be

s
en stepping up efforts to design and manufaff cture semiconductor
itself rather than buy from U.S. companies, amid fears that sanctions might cripple its high-tech industry. U.S. restrictions on exports to
Chinese telecoms equipment makers have sharpened Beijing’s focus on semiconductor self-sufficiency. China’s ministry of finance
announced tax breaks “to support the development of integrated circuit design and the software industry,” cancelling corporate taxes for
some domestic Chinese companies for two years. Although the outcome of these efforts is uncertain, the development of such capaa
city
in China would likely have a material adverse effect on our profitability and results of operations.

ff

r

t

A slowdown in the Chinese economy could limit the growth in demand for e
have a material adverse effect on our business, operating results and prospects.

m

lell ctronic devices contaitt nii

inii g our products, which would

We believe that an increase in demand in China for electronic devices that include our products will be an important factor in our
futff urt e growth. Weakness in the Chinese economy could result in a decrease in demand for electronic devices containing our products
and, thereby, materially and adversely affect our business, operating results and prospects.

Economic regue

latitt on in China could materially and adversely affect our businii ess, operating results and prospects.

We have a significant portion of our manufacturing capacity in mainland China. In addition, in 2022 approximately 47% of our
total sales were shipped to customers in China. In recent years, the Chinese economy has experienced periods of rapid expansion and
o these factors, the Chinese government has, from time to time, adopted measures
wide flff uctuations in the rate of inflation. In response t
to regulate growth and contain inflation, including measures designed to restrict credit or control prices. Such actions in the future could
increase the cost of doing business in China or decrease the demand for our products in China and, thereby, have a material adverse
effff eff ct on our business, operating results and prospects.

t

WW
We could be adv
’
ChCC inii a’s an

rr
ersely affec
u

titt -ii corruption campaign and similar worldwide anti-bribery laws.

tett d by violations of the United States’ Foreign Corrupt Practices Act, the U.K.’s Bribery Act 2010,

r

The United States’ Foreign Corrupt P

ractices Act (“FCPA”), the United Kingdom’s Bribery Act 2010 (the “U.K. Bribery Act”),
China’s anti-corruption campaign and similar anti-bribery laws in other jurisdictions generally prohibit companies and their
intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business. Our policies
mandate compliance with these anti-bribery laws. We operate in many parts of the world that may have experienced governmental
corrupt
ion to some degree and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and
r
practices. We train our staff concerning FCPA, the U.K. Bribery Act and related anti-bribery laws. We have established procedures and
controls to monitor internal and external compliance. There can be no assurance that our internal controls and procedures will protect
us frff om reckless or criminal acts committed by our employees or agents, and we have no third party attestation to the effectiveness of
our internal controls related to fraud and corrupt
ion. If we are found to be liable for FCPA, the U.K. Bribery Act and other anti-bribery
law violations (either due to our own acts or inadvertence, or due to the acts or inadvertence of others), we could incur criminal or civil
penalties or other sanctions, which could have a material adverse effect on our business and operating results.

rr

We arWW e subject to f

orff

tt

eign currency risk as a result of our international operations.

tt

We face exposure to adverse movements in foreign currency exchange rates, principally the Chinese Yuan, the Taiwanese dollar,
the Euro and the British Pound Sterling and, to a lesser extent, the Japanese Yen and the Hong Kong dollar. Our income and expenses
are based on a mix of currencies and a decline in one currency relative to the other currencies could adversely affect our operating
results. Furthermore, our operating results are reported in U.S. dollars, which is our reporting currency. In the event the U.S. dollar
weakens against a foreign currency, we will experience a currency transaction loss, which could adversely affect our oper
ating results.
Also, flff uctuations in forff eign currency exchange rates may have an adverse impact and be increasingly influential to our overall sales,
profiff ts and operating results as amounts that are measured in foreign currency are translated back to U.S. dollars for reporting purposes.
Our forff eign currency risk may change over time as the level of activity in foreign markets grows and could have an adverse impact upon
our fiff nancial results, especially if the portion of our sales attributable to Europe increases. We have taken, and plan to continue to take,
effff orff
ts to mitigate some of our forff eign currency exposure by entering into foreign exchange hedging agreements with financial
institutions to reduce exposures to some of the principal currencies in countries in which we conduct sales, acquire raw materials, build
products and make capital investments, but these efforts may not be successful. In this regard, these hedging agreements do not cover
all currencies in which we do business, do not eliminate foreign currency risk entirely for the currencies that they do cover, and involve
costs and risks of their own in the forff m of transaction costs, credit requirements and counterparty risk.

ff

ii
ncing r

ChCC inii a is eii
ee
xperie
ii
make doing business in China less advantageous than i
n prior ye
ii
businii ess, operating r

esults and financial condition.

apid social, political and economic change, which has increased labor costs and other related costs thtt at could
ars. Increased labor costs in China could adversely affect our

s

tt

Historically, labor in China has been readily available at a lower cost compared to other countries. However, because China is
experiencing rapia d social, political and economic change, there can be no assurance that labor will continue to be available in China at
costs consistent with historical levels. Any future increase in labor cost in China is likely to be higher than historical and projected

21

amounts and may occur multiple times in any given year. As a result of experiencing such rapid social, political and economic change,
China is also likely to enact new, and/or revise its existing, labor laws and regulations on employee compensation and benefits. These
changes in Chinese labor laws and regulations will likely have an adverse effect on product manufacturing costs in China. Furthermore,
if China workers go on strike to demand higher wages, our operations could be disrupted. Many of our suppliers are currently dealing
a
with labor s
hortages in China, which may result in future supply delays and disruptions and may drive a substantial increase in their
osts that is likely to be shared by us in the form of price increases to us. New or revised government labor laws or regulations,
labor c
a
d cause our product costs to rise and/or could cause manufacturing partners on whom we rely to exit the
strikes or labor shortages coul
business. These events could have a material adverse impact on our product availability and quality, which would affect our business,
operating results and financial condition.

a

ff

We may not continue t
tt
WW
inii come.ee

o receive pr

efe eff rentitt al tax trtt eatment in Asia, thereby increasing our income tax expense and reducing our net

As an incentive for establishing our manufaff cturing subsidiaries in China, we receive preferential tax treatment. Governm
ental
changes in forff eign tax law may cause us not to be able to continue receiving these preferential tax treatments in the future, which may
cause an increase in our income tax expense, thereby reducing our net income.

t

ThTT e disii trtt ibutitt on of any en arnrr inii gs of certain foreign subsidiaries may be subject to for

tt

i
eign i

nii come taxes, thus reducing our net income.

tt

Our undistributed forff eign earnings continue to be indefinitely reinvested in foreign operations, with limited exceptions related to
earnings of European and Asian subsidiaries. Any future distributions of foreign earnings will not be subject to additional U.S. income
tax, but may be subject to foreign withholding taxes. As of December 31, 2022, we had undistributed earnings from non-U.S. operations
of approximate
ly $1.0 billion (including approximately $147.7 million of restricted earnings, which are not availabla e for dividends).
Undistributed earnings of our China subsidiaries comprise $476.4 million of this total. Additional Chinese withholding taxes of
oximately $48.5 million would be required should the $476.4 million of such earnings be distributed out of China as dividends.
a
appr

a

ersely affected by thtt e compromise or theft of our technology, know-how, data or intellectual property or a
ll
We cWW ould be adv
requirii ement thtt at we yield rights in technology, know-how, data stored in foreign jurisdictions or intellectual property that we use in
such forff

urisii dictitt ons.

i
eign j

ll

In general, we rely on the intellectual property and unfaff ir competition laws and contractual restrictions to protect our technology,
know-how, data and intellectual property in the foreign jurisdictions in which we operate. We believe our technology, know-how, data
and other intellectual property rights are important to our success. Any unauthorized use of our technology, know-how, data and other
l property rights could harm our competitive advantages and business. For example, some jurisdictions have not protected
intellectuat
intellectuat
l property rights to the same extent as the United States, and infringement of intellectual property rights continues to pose a
serious risk of doing business in such jurisdictions. The measures we take to protect our intellectual property rights may not be adequate.
Furthermore, the application of laws governing intellectual property rights in certain foreign jurisdictions is uncertain and evolving, and
could involve substantial risks to us. Infringement of our patents or required technology or know-how transfers to foreign entities could
create competition for us, and such competition could have a mater

ial adverse effect on our longer-term profitability and success.

ff

RISKS RELATED TO OUR COMMON STOCK

tt
Variations in our quarterly operating results may cause our stock price to be volatll

ile.

We have experienced substantial variations in net sales, gross profit margin and operating results from quarter to quarter. We

believe that the faff ctors that influence this variability of quarterly results include:

• strength of the global economy and the stability of the financial markets;

• general economic conditions in the countries where we sell our products;

• seasonality and variability in the industrial, automotive, computing, communications and consumer markets;

• the timing of our and our competitors’ new product introductions;

• product obsolescence;

• the scheduling, rescheduling and cancellation of large orders by our customers;

• the cyclical nature of the demand for our customers’ products;

• our abia lity to develop new process technologies and achieve volume production at our fabrication facilities;

• changes in manufacturing yields;

• adverse movements in exchange rates, interest rates or tax rates; and

• the availability of adequate supply commitments from our outside suppliers or subcontractors.

22

Accordingly, a comparison of our operating results from period to period is not necessarily meaningful to investors and our
operating results for any period do not necessarily indicate future performance. Variations in our quarterly results may trigger volatile
changes in our stock price.

We mWW ay enter into future acquisitions and take certain actions in connection w
price of our Common Stock.

ii

ii
ith s

uch acquisitions that could advers

ii

ely affect the

As part of our growth strategy, we expect to acquire businesses, products or technologies in the future. In the event of future

acquisitions, we could:

• use a significant portion of our available ca

ff

sh;

• issue equity securities, which would dilute current stockholders’ percentage ownership;

• incur substantial debt;

• incur or assume contingent liabilities, known or unknown;

• incur amortization expenses related to intangibles;

• incur large, immediate accounting write-offs;

• incur substantial expense and diversion of management attention, regardless of the success of the acquisition; and

• create goodwill and other intangible assets that may require impairment charges in the future.

Such actions by us could harm our operating results and adversely affect the price of our Common Stock.

Antitt -ii takeover effects of certain provisions of Delaware law and our Cer

tt

i
titt ficate of Incorpor

atitt on, may hinii der a take-over attemtt

ptm .

Some provisions of Delaware law and our certificate of incorporation may delay or prevent a tender offer or takeover attempt,

including those attempts that might result in a premium over the market price for the shares held by stockholders.

Section 203 of the Delaware General Corporation Law prohibits certain transactions, including business combinations, between a
ation and an “interested stockholder” for a period of three years after the date the stockholder becomes an interested
d as a person who, together with any affiliates or associates, beneficially owns, directly

Delaware corpor
stockholder. An "interested stockholder" is defineff
or indirectly, 15.0% or more of the outstanding voting shares of a Delaware corporation.

rr

Our certificate of incorporation authorizes our Board of Directors to issue, without further action by the stockholders, up to 1.0
million shares of preferred stock with rights and preferences, including voting rights, designated from time to time by the Board of
Directors. The existence of authorized but unissued shares of preferred stock enables our Board of Directors to render it more difficult
or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise.

ff

GENERARR L RISK FACTORS

ThTT e inii vasion of UkrUU ainii e by Russia could nll

e
egat

itt vely impact our business.

RusRR sia’s military i

rr nvasion of Ukraine in February 2022 has led to, and may lead to, additional sanctions being levied by the United
States, European Union and other countries against Russia. Russia’s military invasion and the resulting sanctions have had an adverse
effff eff ct on global markets. We cannot predict the progress or outcome of the situation in Ukraine, as the conflict and governmental
reactions are rapidly developing and beyond our control. Prolonged unrest, intensified military activities, or more extensive sanctions
impacting the region could have a material adverse effect on the global economy, and such effeff ct could in turn have a material adverse
effff eff ct on the operations, results of operations, fiff nancial condition, liquidity and business outlook of our business.

ThTT e success of our business depends on the strength of the global economy and the stability of th
weaknesses in t

e financial markets, and anyn
ii
ii htt ese areas may have a material adverse effect on our net sales, operating results and financial condi

tion.

rr

tt

r

Weaknesses in the global economy and financial markets can lead to lower consumer discretionary spending and demand for
ate our products in the industrial, automotive, computing, communications and consumer sectors. A decline in end-
items that incorpor
user demand can affect our customers’ demand for our products, the ability of our customers to meet their payment obligations and the
likelihood of customers canceling or deferring existing orders. Our net sales, operating results and financial condition could be negatively
affff eff cted by such actions.

PrPP oductitt on at our manufacturing facff
extee rtt aordinii ary ev
s
customtt

entstt , which c

r

ll

ii
ilii ill tii iett s could be di

htt er
s
ould prevent us from producing enough of our products to maintain our sales and satis
fy our

srupted for a variety of reasons, including natural disasters and ot

ll

ersrr ’ demands and could adversely affect our operating results and financial condition.

rr

A disrupt

ion in production at our manufacturing facilities could occur for many reasons, including fire, floods, hurricanes,
typhoons, droughts, tsunamis, volcanoes, earthquakes, disease or other similar natural disasters, unplanned maintenance or other
ing problems, labor shortages, power outages or shortages, telecommunications failures, strikes, transportation interruption,
manufacturt

r

23

government regulation, terrorism or other extraordinary events, including epidemics (such as the outbreak of the COVID-19 virus) and
related travel restrictions. Alternative faff cilities with sufficient capacity or capaa bia lities may not be available, may cos
t substantially more
or may take a significant time to start production. Such disruptions could have an adverse effect on our operating results and financial
condition.

a

We mWW ay be adversrr ely af
ll
operatitt nii g resultll s an

tt

d fiff nii ancial condition.

fff eff cted by any disruption in our information technology systems, which could adversely affect our cash flows,

ll

Our operations are dependent upon our information technology systems, which encompass all of our major business functions.
We rely upon such information technology systems to manage and replenish inventory, to fill and ship customer orders on a timely
basis, to coordinate our sales activities across all of our products and services and to coordinate our administrative activities. Our systems
k-ins and similar
might be damaged or interrupt
disrupt
ions affff eff cting the Internet generally. There can be no assurance that such delays, problems, or costs will not have a material
r
adverse effect on our cash flows, operating results and financial condition.

ed by natural or man-made events or by computer viruses, physical or electronic brea

r

r

TeTT rrorisii t attacks, or threats or occurrences of other terrorist activities, whether in the U.S. or internationally, may aff
ff
in wii

hich our Common Stock trades, the markets in which we operate and our operating results and financial condition.

tt

ect the markets

Terrorist attacks, or threats or occurrences of other terrorist or related activities, whether in the U.S. or internationally, may affect
the markets in which our Common Stock trades, the markets in which we operate and our profitability. Future terrorist or related activities
could affff eff ct our domestic and international sales, disrupt our supply chains and impair our ability to produce and deliver our products.
Such activities could affect our physical facilities or those of our suppliers or customers. Such terrorist attacks could cause seaports or
airpor
ts, to or through which we ship, to be shut down, thereby preventing the delivery of raw materials and finished goods to or from
r
our manufacturing facilities in China, Taiwan and Germany and our wafer fabrication facilities in China, the U.S. and the U.K., or to
our regional sales offices. Due to the broad and uncertain effects that terrorist attacks have had on fiff nancial and economic markets
generally, we cannot provide any estimate of how these activities might negatively affect our future operating results and financial
condition.

SySS stett m security risks, data protection br
s
operatitt ons, and any such disruption could r
s
affff eff ct our stoctt k price.

c

eaches, cyber-attacks and other related cybersecur
ssues could disrupt our internal
ll
educe our expected net sales, increase our expenses, damage our reputation and adversely

ii
itii y i
tt

Experienced computer programmers and hackers may be able to penetrate our security controls and misappropriate or compromise
our confidential information or those of third parties, create system disruptions, compromise physical assets or intellectual property, or
misappr
opriate monetary assets or cause shutdowns. Computer programmers and hackers also may be able to develop and deploy
a
es, worms and other malicious software programs that attack our websites or exploit any security vulnerabilities of our websites
virusrr
and inforff mation systems.

Such problems could impede our sales, manufacturing, distribution or other critical func

tions or result in the loss, encryption or
disclosure of such proprietary information and sensitive or confiff dential data relating to our business or third-party business or the
unauthorized transfer of monetary assets as a result of fraud, trickery or other forms of deception, and could materially adversely affect
our operating results, stock price and reputation.

ff

Item 1B. Unresolved Staff Cff

omments.

None

Item 2.

Properties.

rr

Our corporate headquarter

s are located in Plano, Texas. As of December 31, 2022, we own approximately 4.1 million square feet
of property and lease approximately 4.5 million square feet of property, with leases expiring at various times between 2023 and 2028
and with land rights expiring in 2061. We also own and lease properties around the world for use as sales offices, de
sign centers,
research and development labs, warehouses, logistic centers, and manufacturing support. The size and/or location of these properties
change frff om time to time based on business requirements. The table below sets forth the largest of the properties either owned or leas
ed
by the Company.

ff

ff

24

We believe our current facilities are adequate for the foreseeable future.

Location
USA - Plano, Texas
USA - Milpitas, California
USA - South Portland, Maine

Primary use
Headquarters/R&D center
Regional sales office/Administrative office/R&D center/apartment
Manufacturing faff cility/offff iff ce/chemical warehouse/wellness building
Land use right/Manufacturing facilities/Administrative office/R&D center/Logistics China - Chengdu
Regional sales office/R&D center/Warehouse
Administrative office/Land use right/manufacturing facility/R&D center
Manufacturing faff cility/R&D center/Logistics/Dormitory/Manufacturing
faff cility/Sales/Administrative office/Land use right
Regional sales office
R&D center
Land use right
Administrative office/Logistics/Manufacturing/R&D center
Manufacturing faff cility/R&D center
Manufacturing faff cility/R&D center/Logistics/Administrative office
Manufacturing faff cility/R&D center/Logistics/Administrative office
Manufacturing/Land Use Right
Manufacturing
Regional sales office/Administrative office/Logistics/R&D/Land
Regional sales office/Administrative office/Logistics
Offff iff ce

China - Shanghai
China - Shenzhen
China - Yangzhou
China - Wuxi
England - Oldham
Germany - Neuhaus
Scotland - Greenock
Taiwan - Hsinbei
Taiwan - Hsinchu
Taiwan - Keelung
Taiwan - Taipei
Taiwan - Taoyuan
Taiwan - Taichung

China - Hong Kong
China - Jinan, Shandong

Sq. Ft.
41,780
86,321
323,462
1,660,963
271,270
1,058,324

1,606,833
17,292
6,085
1,166,347
156,076
52,508
1,001,873
44,815
652,672
149,548
72,948
249,986
11,187

Item 3.

Legal Proceedings.

From time to time, we are involved in various legal proceedings that arise in the normal course of business. While we intend to
defeff nd any lawsuit vigorously, we presently believe that the ultimate outcome of any current pending legal proceeding will not have
any material adverse effect on our financial position, cash flows or operating results. However, litigation is subject to inherent
uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include monetary damages, which could impact our
business and operating results for the period in which the ruling occurs or future periods. In addition, our foreign operations expose us
to unique intellectual property technology risks compared to a company with fewer or no international operations. Such risks could lead
to litigation or other disputes that would not be applicable to a company with limited or no international operations and could have a
material and adverse effff eff ct on our fiff nancial condition and results of operations. See “Risk Factors – Risks Related to Our International
Operations.” in Part I, Item 1A of this Annual Report for a more detailed summary of the intellectuat
l property technology risks associated
with our international business operations.

Item 4.

Mine Safety Disclosures.

Not Applicable.

a

25

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Inforff mation

Our Common Stock is traded on the Nasdaq Global Select Market (“NasdaqGS”) under the symbol “DIOD.”

PART II

Holders

As of Februarr

rr
ry 6, 2023, t

a
he appr

oximate number of common stockholders was 4,003.

Dividends

We have never declared or paid dividends on our Common Stock, and currently do not intend to pay dividends in the foreseeable
futff urt e as we intend to retain any earnings for future use in our business. Our U.S. banking faff cility permits us to pay dividends up to
$25.0 million per fiff scal year to our stockholders so long as we have not defaulted at the time of such dividend and no default would
result frff om declaring and paying such dividend. The payment of dividends is within the discretion of our Board of Directors, and will
depend upon, among other things, our earnings, financial condition, capital requirements, and general business conditions.

Securities Authorized for Issuance Under Equity Compensation Plans

The information regarding our equity compensation plans required to be disclosed by Item 201(d) of Regulation S-K is
incorporated by reference from our 2023 definitive proxy statement, which we expect to file with the SEC in April 2023, in Item 12 of
Part III of this Annual Report.

r

Performff

ance Graph

ff
The foll

owing graph c

ompares the yearly percentage change in the cumulative total stockholder return of our Common Stock
against the cumulative total return of the Nasdaq Composite and the Nasdaq Industrial Index for the five calendar years ending December
31, 2022. The graph is not necessarily indicative of future price performance.

a

a

ff

TT
The graph s

hall not be deemed incorporated by refe eff rence by any general statement incorporating by refeff rence this Annual Report
curities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent that the Company

ll ncorporates this information by reference, and shall not otherwise be deemed filed under such Acts.

into any filff ing under the Se
spes

cifi icff ally i

tt

Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-2023.

Index Data: Copyright NASDAQ OMX, Inc. Used with permission. All rights reserved.

26

a

The graph assumes $100 invested on December 31, 2017 i

n our Common Stock, the stock of the companies in the Nasdaq
Composite Index and the stock of companies in the Nasdaq Industrial Index, and that all dividends received within a quarter, if any,
were reinvested in that quarter.

December 2022

Diodes Incorpor

r

ated

NASDAQ Industrial Index

NASDAQ Composite-Total
Returt ns

Returt n %
Cum $

Returt n %
Cum $

Returt n %

Cum $

2017

100

100

100

2018

12.52
112.52

(1.13)
98.87

2019

74.74
196.62

27.17
125.73

2020

25.07
245.90

52.72
192.01

2021

55.76
383.01

8.81
208.93

2022

(30.67)
265.54

(35.05)
135.70

(2.84)
97.16

36.69
132.81

44.92
192.47

235.15
235.15

158.65
158.65

Issuer Purchases of Equity Securities

There were no repurchases of our Common Stock during the fourth quarter of 2022.

Item 6. Reserved.

27

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

oll

ff
The f
TT

owing section discusses management’s view of the financial condition, results of operations and cash flows of Diodes
the Company,” “our Company,” “we,” “our,” “ours,” or “us”) and should be read
IncII orpor
r
together with the consolidated financial statements and the notes to consolidated financial statements included elsewhere in this Form
tt
10-K.KK

ated and its subsidiaries (collectivel

yll , “yy

tt

ff

olff

TT
The f

lowing discussion contains forff ward-looking statements and information relating to our Company. We generally identify
forff ward-looking statements by the use of terminology such as “may,” “will,” “could,” “should,” “potential,” “continue,” “expect,”
“intend,” “plan,” “estimate,” “anticipate,” “believe,” “project,” or similar phrases or the negatives of such terms. We base these
statements on our beliefs as well as assumptions we made using information currently available to us. Such statements are subject to
risii kskk , uncertainties and assumptions, including those identified in Part I, Item 1A.“Risk Factors,” as well as other matters not yet known
to us or not currently considered m
aterial by us. Should one or more of these risks or uncertainties materialize, or should underlying
assumptm ions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Given these risks and
uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements. Forward-looking
statements do not guarantee future performance and should not be considered as statements of fact.

t

ll

YY
You s

hould not unduly rll

ll
ely on these forward-looking statements

he date of this Annual Report on Form
10-K. UKK nlUU ess required by law, we undertake no obligat
w
inforff mation or future events or otherwisii e. The Private Securities Litigation Refe orm Ac
ovides certain “safeff
harbor” provisions for forff ward-looking statementstt . All forward-looking statements made in this Annual Report on Form 10-K are made
pursrr uant to the Act.

ion to publicly update or revise any forward-looking statements to reflect ne

, which spes ak only as of t

t of 1995 (the “Act”) pr

”

kk

ll

ii

ff

General

Diodes Incorporated, together with its subsidiaries (collectively the “Company,” “we” or “our” (Nasdaq: DIOD)), a Standard and
Poor's Smallcap 600 and Russell 3000 Index company, is a leading global manufacturer and supplier of high-quality application-specific
standard products within the broad discrete, logic, analog, and mixed-signal semiconductor markets. The Company serves the industrial,
automotive, computing, communications and consumer markets.

The Company's products include diodes; rectifiers; transistors; MOSFETs; GPP bridges; GPP rectifiers; protection devices;
tion-specific arrays; single gate logic; amplifiers and comparators; Hall-effect and temperature sensors; and power management
ff
func
devices, including LED drivers, AC-DC converters and controllers, DC-DC switching and linear voltage regulators, voltage references
along with special-func
tion devices, such as USB power switches, load switches, voltage supervisors, and motor controllers. The
Company also has timing, connectivity, switching, and signal integrity solutions for high-speed signals.

ff

r

The Company's corpor

ate headquarters and Americas’ sales offices are located in Plano, Texas, and Milpitas, California,
respectively. Design, marketing, and engineering centers are located in Plano; Milpitas; Taipei, Taoyuan City, and Zhubei City, Taiwan;
Shanghai and Yangzhou, China; Oldham, England; and Neuhaus, Germany. The Company's wafer fabrication facilities are located in
Oldham, England; Greenock, Scotland; Shanghai and Wuxi, China; and Keelung, and Hsinchu, Taiwan and South Portland, Maine,
United States. The Company has assembly and test facilities located in Shanghai, Jinan, Chengdu, and Wuxi, China; Neuhaus, Germany;
and Jhongli and Keelung, Taiwan. Additional engineering, sales, warehouse, and logistics offices are located in Taipei, Taiwan; Hong
Kong; Oldham, England; Shanghai, Shenzhen, Wuhan, and Yangzhou, China; Seongnam-si, South Korea; and Munich and Frankfurt,
Germany; with support offices throughout the world.

•

•

•

The Company’s manufacturing facilities have achieved certifications in the internationally recognized standards of ISO
9001:2015, ISO 14001:2015, and, for a

utomotive products, IATF 16949:2016;

ff

Diodes Incorporated is also C-TPAT certified; and

We believe these quality awards reflect the superior quality-control techniques established at Diodes Incorporated and
further enhance our credibility as a vendor-of-choice to original equipment manufacturers ("OEMs") increasingly concerned
with quality and consistency.

Our market focus is on high-growth, end-user applications in the following areas:

•

•

•

•

•

Industrial: embedded systems, precision controls, and Industrial IoT;

Automotive: connected driving, comfort/style/safety, and electrification/powertrain;

Computing: cloud computing including server, storage, and data center applications;

Communications: smartphones, 5G networks, advanced protocols, and charging solutions; and

Consumer: IoT, wearables, home automation, and smart infrastructure;

28

This discussion summarizes the significant factors affecting the consolidated operating r

esults, financial condition and liquidity of
welve months ended December 31 2022. This discussion should be read in conjunction with Item 8, the

the Company for the t
consolidated financial statements and the notes to consolidated fiff nancial statements.

ff

ff

Summary for the Twelve Months Ended December 31, 2022

•

•

•

•

•

•

•

Net sales were $2.0 billion, an increase of 10.8% over the $1.81 billion in 2021;

Gross profit was $827.2 million, a 23.4% increase from $670.4 mi

ff

llion in 2021;

Gross profit margin improved 420 basis points to a record 41.3% from 37.1% in 2021;

ff

Operating income increased 47.9% to a record $408.2 million, or 20.4% of revenue, compared to $276.0 million, or 15.3%
of revenue, in 2021;

Net income was a record $331.3 million, an increase of 44.8% from the $228.8 million last year;

Earnings per share was $7.20 per diluted share, a 44.0% improvement from the $5.00 per diluted share in 2021;

We achieved $392.5 million cash flow from operations. We had cash capital expenditures of $211.7 million, or 10.6% of
net sales. Net cash flow was a negative $25.7 million, which includes the net pay-down of $133.0 million of long-term
debt.

Summary for t

ff

he Twelve Months Ended December 31, 2021

•

•

•

•

•

•

Net sales were $1.81 billion, an increase of 46.9% from the $1.23 billion in 2020;

Gross profit was $670.4 million, a 55.5% increase, compared to the $431.1 mil

ff

lion in 2020;

Gross margin improved 200 basis points to 37.1% from 35.1% in 2020;

Operating income increased 105.4% to $276.0 million, or 15.3% of net sales, compared to $134.3 million, or 10.9% of net
sales, in 2020;

Net income was $228.8 million, or $5.00 per diluted share, compared to $98.1 million, or $1.88 per diluted share, in 2020;
and

We achieved $338.5 million cash flow from operations. We had cash capital expenditures of $141.2 million, or 7.8% of
net sales. Net cash flow was a positive $46.3 million.

Business Outlook and Factors Relevant to Our Results of Operations

Our record fiff nancial performance in 2022 represents a significant step toward our 2025 business targets of $1.0 billion of gross
profiff t, based upon net sales of $2.5 billion and gross margin of 40%. Acquisitions will continue to be part of our growth strategy to
reach our 2025 revenue and gross profit goal. We have a solid pipeline of designs and expanded customer relationships across all regions
and product lines. The success of our business depends on, among other factors, the strength of the global economy and the stability of
the financial markets, our customers’ demand for our products, the ability of our customers to meet their payment obligations, customers
not canceling or deferring e
xisting orders, and the strength of consumers’ demand for items containing our products in the end-markets
we serve. We believe the long-term outlook for our business remains generally favorable despite the uncertainties in the global economy
as we continue to execute on the strategy that has proven successful for us over the years. See “Risk Factors – The s
uccess of our
business depends on the strength of the global economy and the stability of t
he financial markrr ekk ts, and any weaknesses in these areas
may have a material adverse efe fff eff ct on our net sales, operating results and financial condition.” in Part I, Item 1A of this Annual Report
ff
for a

dditional information.

m

TT

ff

Description of Sales and Expenses

NeNN t sales

The principal factors that have affected or could affect our net sales from period to period are:

•

•

•

•

•

The condition of the economy in general and of the semiconductor industry in particular;

Additional COVID outbrt eaks with increasing infection rates and lockdowns by local governments could ha
impact on our production facilities;

ff

ve a negative

The Februarr

rr
ry 2022 invasion of Ukraine by Russia and the resulting and continuing global impact;

ff
Political tension, including the implementation of tariffs, among and between the countries in which we do busi

ness;

Our customers’ adjustments in their order levels;

29

•

•

•

•

•

•

•

•

•

•

Changes in our pricing policies or the pricing policies of our competitors or suppliers;

The addition or termination of key supplier relationships;

The rate of introduction and acceptance by our customers of new products;

Our abia lity to compete effectively with our current and future competitors;

Our abia lity to enter into and renew key corporate and strategic relationships with our customers, vendors and strategic
alliances;

Changes in forff eign currency exchange rates;

A maja or disrupt

r

ion of our information technology infrastructure;

Unforff eseen catastrophic events, such as armed conflict, terrorism, fires, typhoons and earthquakes;

Any other disrupt
other manufacturing problems; and

r

ions, such as change in the political or governmental policies, labor shortages, unplanned maintenance or

Other risks, uncertainties, and assumptions identified in item 1A, "Risk Factors," of this Annual Report on Form 10-K and
risks, uncertainties, and assumptions reflected in other documents we file with the SEC.

Cost of goods sold

Cost of goods sold includes manufacturing costs for our semiconductors and our wafers. These costs include raw materials used
in our manufacturing processes as well as labor costs and overhead expenses. Cost of goods sold is also impacted by yield improvements,
capacity utilization and manufacturing efficiencies. In addition, cost of goods sold includes the cost of products that we purchase fromff
f our inventory management
other manufacturers and sell to our customers. Cost of goods sold is also affected by inventory obsolescence i
is not efficient.

ff

Selling, general and administrative

Selling, general and administrative expenses relate primarily to compensation and associated expenses for personnel in general
management, sales and marketing, information technology, engineering, human resources, procurement, planning and finance, and sales
commissions, as well as outside legal, investor relations, accounting, consulting and other operating expenses. Also included in selling,
general and administrative expenses are acquisition costs from business combinations.

Research and development

Research and development expenses consist of compensation and associated costs of employees engaged in research and
development projects, as well as materials and equipment used for new product development and technology qualification. Research
and development expenses are executed on a global basis and are primarily associated with where the engineering talent is located, as
well as the location of manufacturing sites participating in any required technology or process development. All research and
development expenses are expensed as incurred.

Amortization of acquisition-related intangible assetstt

Amortization of acquisition-related intangible assets consists of assets such as developed technologies and customer relationships.

Interest income / expense

Interest income consists of interest earned on our cash and investment balances. Interest expense consists of interest payable on

our outstanding credit faff cilities and other debt instruments.

Foreign currency (loss) gain, net

This income account is used to show the amount gained or lost as a result of foreign currency transactions.

Unrealized (loss) gain on investments

We hold investments in the form of common stock or some other similar equivalent accounted for under fair-value accounting.

ff

This account is used to show the necessary mrr

ark-to-market adjustments.

Income tax provision

Our global presence requires us to pay income taxes in a number of jurisdictions. See Note 12 of “Notes to Consolidated Financial

Statements” for additional information.

NeNN t income attributable to noncontrolling interest

This represents the minority investors’ share of our subsidiaries’ earnings.

30

NeNN t income attributable to common stockhol

kk

ders

Net income attributabla e to common stockholders is net income less net income attributabla e to noncontrolling interest.

Results of Operations

The folff

lowing tabla e sets forth, for t

ff

he periods indicated, the percentage that certain items in the statements of income bear to net

sales:

Net sales
Cost of goods sold
Gross profitff
Operating expenses
Income frff om operations
Interest income
Interest expense
Foreign currency gain (loss), net
Unrealized (loss) gain on investments
Other income
Income before income taxes and noncontrolling interest
Income tax provision
Net income
Net (income) attributabla e to noncontrolling interest
Net income attributable to common stockholders

Percent of Net Sales
Twelve Months Ended December 31,

2022

100.0%
(58.7)
41.3
(21.0)
20.4
0.2
(0.4)
0.1
(0.8)
0.3
19.8
(2.8)
17.0
(0.4)
16.6

2021
100.0%
(62.9)
37.1
(21.8)
15.3
0.2
(0.4)
(0.1)
1.6
1.0
17.5
4.4
13.1
(0.4)
12.7

ff
The foll

owing discussion explains in greater detail our consolidated operating results and financial condition. This discussion
should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this Annual Report
on Form 10-K (i(( n thousands)s .

Net sales
Cost of goods sold
Gross profitff
Total operating expense
Interest income
Interest expense
Foreign currency gain (loss), net
Unrealized (loss) gain on investments
Other income
Income tax provision

NeNN t Sales

$

Twelve Months Ended December 31,

2022

2021

$

2,000,580
1,173,343
827,237
419,044
3,672
(8,320)
2,122
(16,514)
6,787
56,685

1,805,162
1,134,802
670,360
394,375
3,139
(7,491)
(2,107)
28,018
17,551
78,807

Increase/(Decrease)
195,418
$
38,541
156,877
24,669
533
829
4,229
(44,532)
(10,764)
(22,122)

% Change

10.8%
3.4%
23.4%
6.3%
17.0%
11.1%
200.7%
158.9%
(61.3%)
(28.1%)

Our net sales increased approximately $195.4 million, or 10.8%, for the twelve months ended December 31, 2022, compared to
the prior year, due primarily to our content expansion initiatives and improvements in product mix. The Company has experienced
growth in higher-margin end markets which have enabled the Company to increase its net sales and margins, even in the midst of the
current supply-constrained environment. For the twelve months ended December 31, 2022, weighted-average sales price of the
Company's products increased 28.5% when compared to the prior year. This represents the improved product mix across the portfolio,
as well as price increases to offff sff et supply chain cost increasing.

31

The table below sets forth our revenue as a percentage of product revenue by end-user market:

End-Markets
Industrial
Automotive
Computing
Communications
Consumer

CosCC t of Goods Sold

Twelve Months Ended December 31,
2022
27%
15%
24%
15%
19%

2021
23%
12%
30%
16%
19%

2020
23%
11%
20%
21%
25%

ff

Cost of goods sold increased approximately $38.5 million for the twelve months ended December 31, 2022 compared to the same
period last year. As a percent of sales, cost of goods sold was 58.7% for the twelve months ended December 31, 2022, compared to
62.9% for t
he same period last year. Average unit cost increased 19.9% for the twelve months ended December 31, 2022, compared to
the same period last year, due to cost increases from various subcontractors and foundries, as well as the cost for a more premium mix
of products that were sold in 2022. For the twelve months ended December 31, 2022, gross profit increased approximately 23.4% when
compared to the prior year. Gross profit margin for the twelve month periods ended December 31, 2022 and 2021, was 41.3% and
37.1%, respectively.

OpeO rating expenses

ee

Operating expenses for the twelve months ended December 31, 2022 increased approximately $24.7 million, or 6.3%, compared
to the same period last year. Selling, general and administrative expenses (“SG&A”) increased approximately $23.2 million. The
increase in SG&A was driven by increases in wages and benefits, selling expenses and freight and duty charges. R
esearch and
ts
development expenses (“R&D”) increased approximately $7.1 million primarily due to increases in wages and benefits, and cos
associated with new product and new process development activities. Amortization of acquisition-related intangibles decreased
appr
oximately 4.0% reflecting the overall reduction in the balance of intangible assets subject to amortization. SG&A, as a percentage
a
of sales, was 14.0% and 14.3% for the twelve-month periods ended December 31, 2022 and 2021, respectively. R&D, as a percentage
of sales, was 6.3% and 6.6% for t

he twelve-month periods ended December 31, 2022 and 2021, respectively.

ff

ff

ff

Other (e(( xee pex nse)e /income

Interest income was relatively flat when compared to 2021. The increase in interest expense is due to increased interest rates on
our flff oating rate debt partially offset by lower borrowing levels. Foreign currency gain increased $4.2 million during the twelve months
ended December 31, 2022 due to the effectiveness of the Company's hedging program. Unrealized loss on investments increased from
2021 due to investment losses from investments the Company acquired in the LSC acquisition.

ff

IncII ome tax provision

a
ff

We recognized income tax expense of appr

oximately $56.7 million for the twelve months ended December 31, 2022, and income
tax expense of approximately $78.8 million for the twelve months ended December 31, 2021, resulting in effective income tax rates of
14.3% and 25.0%, respectively. The decrease in the effeff ctive tax rate for 2022 compared to 2021 is primarily attributable to an increase
in overall pre-tax book income and the impact of changes to the outside basis difference in foreign subsidiaries where the Company
arnings continue to be indefinitely reinvested in foreign operations,
does not assert permanent reinvestment. Our undistributed foreign e
with limited exceptions related to earnings of European and Asian subsidiaries. Any future distributions of foreign earnings will not be
subject to additional U.S. income tax but may be subject to foreign withholding taxes. The Company has recorded outsi
de basis
ff
diffff eff rences in the limited instances where they do not assert permanent reinvestment. As of December 31, 2022, our foreign subsidiaries
oximately $296.8 million of cash, cash equivalents and investments of which approximately $68.0 million would be subject to
a
held appr
forff eign withholding tax if distributed outside the country in which the related earnings were generated.

ff

Financial Condition

Liqui

tt
idity an

d CapiCC tii al Resources

tt

Our primary srr

ources of liquidity are cash and cash equivalents, short-term investments, funds from operations and, if necessary,

borrowings under our credit facilities.

32

Liquidity requirements

Our primary liquidity requirements have been to meet our capital expenditure needs and to fund ongoing ope

rations. For 2022
and 2021 our working capital was $729.1 million and $716.6 million, respectively. In 2022, our working capital increased primarily due
to increases in accounts receivable and inventories, and decrease in our accounts payable and the current portion of long-term debt. We
expect cash generated by our operations together with existing cash, cash equivalents, short-term investments and available credit
apia tal asset purchases, outstanding commitments and other liquidity
ff
faff cilities to be suffff iff cient to satisfy our working capital needs, c
requirements associated with our existing operations for at least the next 12 months.

ff

ff

Short-term investmtt ents

As of December 31, 2022, we had short-term investments of approximately $7.1 million. These investments are highly liquid with
tes greater than three months at the date of purchase. We generally can access these investments in a relatively short amount

t

maturity da
of time but in doing so we generally forff

feff it a portion of interest income.

Short-term debt

Our Asia subsidiaries maintain credit facilities with several fiff nancial institutions through our foreign entities worldwide totaling
$172.8 million. Other than two Taiwanese credit facilities that are collateralized by assets, our f
ff
oreign credit lines are unsecured,
uncommitted and contain no restrictive covenants. These credit facilities bear interest at LIBOR or similar indices plus a specified
margin. Interest payments are due monthly on outstanding amounts under the credit lines. The unused and available credit under the
dvanced under our foreign credit
various faff cilities as of December 31, 2022, was approximately $136.0 million, net of $36.3 million a
lines and $0.4 million credit used for import and export guarantee.

a

ff

Long-term debt

The Company maintains a long-term credit facility (“U.S. Credit Agreement”) consisting of a term loan with a current balance of
zero and a $200.0 million revolving senior credit facility with zero drawn as of December 31, 2022. The revolving senior credit facility
and term loan mature on May 29, 2024. Both the term loan portion and the revolving portion of the Credit Agreement bear an interest
rate at LIBOR or similar other indices plus a specified margin. The Credit Agreement contains certain financial and non-financial
covenants, including, but not limited to, a maximum Consolidated Leverage Ratio, a minimum Consolidated Fixed Charge Coverage
Ratio, and restrictions on liens, indebtedness, investments, fundamental changes, dispositions, and restricted payments (including
dividends and share repurchases). Furthermore, under the Credit Agreement, restricted payments, including dividends and share
repurchases, are permitted in certain circumstances, including while the pro forma Consolidated Leverage Ratio is, both before and after
giving effect to any such restricted payment, at least 0.25 to 1.00 less than the maximum permitted under the Credit Agreement. In
addition to the liquidity provided by the U.S. Credit Agreement, our 51% owned subsidiary, Eris Technology Company ("ERIS"),
borrowed $25.8 million on a long-term basis from local Taiwan banks. The ERIS debt matures in periods through 2033.

ff

Diodes Hong Kong Limited, a company incorporated under the laws of Hong Kong and a subsidiary of the Company, has a US
Dollar revolving loan facility in an aggregate amount equal to $105.0 million (the "Facility"). Diodes Hong Kong Limited used a portion
of the proceeds for the Facility (i) to refiff nance certain existing indebtedness and (ii) to finance working capital requirements and its
general corporate purposes. In addition, on January 22, 2021, Diodes Hong Kong Limited enter
ed into a Hong Kong Debenture (the
“Debenturt e”) with The Hongkong and Shanghai Banking Corporation Limited, as Security Agent (the “Security Agent”). Pursuant to
the Debenturt e, Diodes Hong Kong Limited granted to the Security Agent, on behalf of itself and the other secured parties, a security
interest over certain assets of Diodes Hong Kong Limited. The security interest is continuing security for the payment, discharge and
perforff mance of all of the secured liabilities, which includes Diodes Hong Kong Limited’s payment obligations under the Facility. The
Facility is governed by the laws of Hong Kong.

rr

CapiCC tal expenditures and investments

In 2022 and 2021, our total cash capital expenditures were approximately $211.7 million and $141.2 million, respectively. Our
capia tal expenditurt es for these periods were primarily related to manufacturing expansion in both our assembly/test and wafer fabrication
faff cilities. Cash capital expenditurt es in 2022 were approximately 10.6% of our net sales. The Company's 2022 capital expenditures were
higher than our target model of 5% to 9% of net sales, due to expansion of our wafer faff brication facility in Hsinchu Science Park in
Taiwan. Going forward, over the long term, the Company expects capital expenditures to be within the 5% to 9% of net sales target
model range.

a

The Company’s restricted cash primarily consisted of the cash required to be on deposit under contractual agreements with banks
to support outstanding loan and import/export guarantees. As of December 31, 2022, restricted cash of $4.4 million was pledged as
collateral for issuance of bank loans, bank acceptance notes and letters of credit.

Our forff eign operations expose us to unique intellectual property technology and other risks compared to a company with fewer or
no international operations. For example, we are exposed to potential cyber security breaches that may target our employees or
infrastructure outside the United States. These risks may result in material and adverse impacts on our financial condition and results
of operations. See “Risk Factors – Risks Related to Our International Operations” in Part I, Item 1A of this Annual Report for a more
detailed summary of the intellectual property technology risks and other associated with our international business operations.

33

Cash and cash equivalents, including restricted cash, decreased approximately $25.7 million to $341.1 m

illion in 2022 from $366.8

a
om our statements of cash flows:

Discussion of Cash Flows

million in 2021. The table below sets forth summary information fr

rr

Net cash flff ows provided by operating activities
Net cash and cash equivalents used in investing activities
Net cash and cash equivalents used in fiff nancing activities
Effff eff ct of exchange rate changes on cash and cash equivalents
Change in cash and cash equivalents, including restricted cash

OpeOO ratitt nii g Actitt vities

Twelve Months Ended December 31,

2022

2021

$

$

392,501
(265,263)
(125,713)
(27,244)
(25,719)

$

$

338,543
(144,229)
(158,441)
10,416
46,289

Net cash provided by operating activities for 2022 was approximately $392.5 million, due primarily to $339.3 million of net
income, $127.8 million in depreciation expense and amortization of intangible assets expense and $36.3 million from non-cash share-
based compensation expense and a non-cash loss on investments of $16.2 million. These increases were partially offset by a net decrease
in operating capital assets and liabilities of $81.1 million, a decrease in deferred income taxes of $39.2 million.

InII vestitt nii g Actitt vities

Net cash used in investing activities for 2022 was approximately $265.3 million, due primarily to the purchase of property, plant

and equipment for $211.7 million and the purchase of SPFAB for $80.4 million.

FiFF nii ancinii g Actitt vities

Net cash used in financing activities for 2022 was approximately $125.7 million, due primarily to the net reduction in our

outstanding indebtedness of $112.2 million and taxes on net share settlements of $12.3 million.

Debt inii strtt umentstt

mum
ff
The U.S. credit facility contains certain financial and non-financial covenants, including, but not limited to, a maxi
consolidated leverage ratio, a minimum consolidated fixed charge coverage ratio, and restrictions on liens, indebtedness, investments,
ff
funda

mental changes, dispositions, and restricted payments (including dividends and share repurchases).

As of December 31, 2022, our Asia subsidiaries had unused and available credit lines of up to an aggregate of approximately
ions. Our foreign credit lines are unsecured and uncommitted, except for two Taiwanese
$136.0 million, with several financial institutt
redit lines bear interest at LIBOR or similar indices plus a specified margin.
credit facilities that are collateralized by assets. Our foreign c
In addition to our credit lines, our 51% owned
At December 31, 2022, $36.3 million was outstanding under these lines of credit.
subsidiary, Err
ation (“ERIS”), had long-term debt of $25.8 million, at December 31, 2022, from local Taiwan
banks. The outstanding ERIS debt matures in various periods from 2024 through 2033. See “Liquidity and Capital Resources” above
and Note 8 of “Notes to Consolidated Financial Statements” of this Annual Report for additional information.

RIS Technology Corpor

rr

ff

Diodes Hong Kong Limited, a company incorporated under the laws of Hong Kong and a subsidiary of the Company, has a US
Dollar revolving loan faff cility in an aggregate amount equal to $105.0 million (the "Facility"). Diodes Hong Kong Limited used a portion
nce certain existing indebtedness and (ii) to finance working capital requirements and its
of the proceeds of the Facility (i) to refinaff
general corporate purposes. In addition, on January 22, 2021, Diodes Hong Kong Limited enter
ed into a Hong Kong Debenture (the
“Debenturt e”) with The Hongkong and Shanghai Banking Corporation Limited, as Security Agent (the “Security Agent”). Pursuant to
the Debenturt e, Diodes Hong Kong Limited granted to the Security Agent, on behalf of itself and the other secured parties, a security
interest over certain assets of Diodes Hong Kong Limited. The security interest is continuing security for the payment, discharge and
performance of all of the secured liabilities, which includes Diodes Hong Kong Limited’s payment obligations under the Facility. The
Facility is governed by the laws of Hong Kong.

rr

Contractual Obligations

Our estimated future obligations consist of debt, interest on long-term debt, leases, defiff ned benefit obligation and purchase
obligations. See Note 8 “Bank Credit Agreements and Other Short-term and Long-term Debt, Note 9 - "Leases", Note 13 - "Employee
Benefiff t Plans" and Note 17 - "Commitments and Contingencies” of the notes to consolidated fiff nancial statements" included elsewhere
in this Annual Report for additional information.

We cannot make reasonabla e estimates of the amount and period in which our tax liabilities will be paid. See “Accounting for

income taxes” below and Note 12 of “Notes to Consolidated Financial Statements” of this Annual Report for additional information.

34

Critical Accounting Estimates

The preparation of financial statements in conformity with generally accepted principles in the United States of America (“U.S.
GAAP”) requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses
during the reporting period. On an ongoing basis, we evaluate our estimates, which are based upon historical experiences, market trends
and fiff nancial forff ecasts and projections, and upon various assumptions that management believes to be reasonable under the
circumstances at that certain point in time. Actual results may differ, significantly at times, from these estimates under different
assumptions or conditions.

We believe the following critical accounting estimates affect the significant estimates and judgments we use in the preparation of

our consolidated financial statements, and may involve a higher degree of judgment and complexity than others.

Revenue recognitionii

In relation to our revenue recognition, we record estimated allowances/reserves for the following items;

•

•

•

•

•

Ship and debit reserves, which arise when we, from time to time based on market conditions, issue credit to certain
distributors upon their shipments to their end customers;

Stock rotation reserves, which are contractual obligations that permit certain distributors, up to four times a year, to return
a portion of their inventory based on historical shipments to them in exchange for an equal and offsetting order;

Price protection reserves, which arise when market conditions cause average selling prices to decrease and we issue credit
to certain distributors on their inventory;

Accounts receivable reserves related to our customer's ability to pay; and

Product returns, distributor price adjustments and other allowances.

Our reserve estimates are based upon historical data as well as projections of sales, distributor inventories, price adjustments,
timates and

average selling prices and market conditions. Actual returns and adjustments could be significantly different from our es
provisions, resulting in an adjustment to net sales.

ff

InII ventortt

ies

Inventories are stated at the lower of cost or net realizable value. Cost is determined principally by the first-in, first-out method.
moving items. This evaluation includes analysis of sales
On an ongoing basis, we evaluate our inventory for obsolescence and slow-
levels, sales projections, and purchases by item, as well as raw material usage related to our manufacturing facilities. If our review
indicates a reduction in utility below carrying value, we reduce our inventory to a new cost basis. If future demand or market conditions
are different than our current estimates, an inventory adjustment may be requir
ed, and would be reflected in cost of goods sold in the
period the revision is made.

rr

rr

Accountitt nii g for i

ff

nii come taxes

As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of
the tax jurisdictions in which we operate. This process involves using an asset and liability approach whereby deferred tax assets and
ities are recorded for differences in the financial reporting bases and tax bases of our assets and liabilities. A valuation allowance
liabila
is provided against deferred tax assets unless it is more likely than not that such deferred tax assets will be realized. This analysis requires
considerable judgment and is subject to change to reflec

t future events and changes in the tax laws.

a

The benefit of a tax position is recognized only if it is more likely than not that the tax position would be sustained based on its
technical merits in a tax examination, using the presumption the tax authority has full knowledge of all relevant facts regarding the
position. The amount of benefit recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on
ultimate settlement with the tax authority. For tax positions not meeting the more likely than not test, no tax benefit is recorded.

GG
Goodw

ilii l anll

d othtt er inii defe iff nii

ii
ite l

ill ved intangible assets

Goodwill and other indefinite lived assets are tested for impairment on an annual basis or when an event or changes in
circumstances indicate that its carrying value may not be recoverable. Goodwill impairment is tested at the reporting unit level, which
is defiff ned as an operating segment or one level below the operating segment. We have one operating segment. Goodwill is reviewed for
impairment using either a qualitative assessment or a quantitative goodwill impairment test. If we choose to perform a qualitative
assessment and determine the fair value more likely than not exceeds the carrying value, no further evaluation is necessary. When we
perforff m the quantitative goodwill impairment test, we compare fair value to carrying value, which includes goodwill. If fair value of
exceeds carrying value, the goodwill is not considered impaired. If the carrying value is higher than the fair value, the difference would
be recognized as an impairment loss. We determine the faff ir value of our reporting units based on an income approach, whereby the fair
s
value of the reporting unit is derived from the present value of estimated future cash flff ows. The assumptions about estimated cash flowff

ff

ff

35

include factors such as future revenue, gross profit, operating expenses, and industry trends. We consider historical rates and current
market conditions when determining the discount and long-term growth rates to use in its analysis. We consider other valuation methods,
oach or market approach, if it is determined that these methods provide a more representative approximation of fair
such as the cost appr
value.

a

Businii ess Combinations

Signififf cant judgment is often required in estimating the fair value of assets acquired and liabilities assumed. The Company makes
estimates and assumptions about c
al
profiff t, depreciation, functional obsolescence, and economic obsolescence allocated to the various property, plant and equipment
categories considering the perspective of marketplace participants.

onditions of the assets, other costs not captured in the base costs, and consideration for entrepreneuri

a

ff

Recently Issued Accounting Pronouncements

See Note 1 of “Notes to Consolidated Financial Statements” of this Annual Report for additional information regarding the status

of recently issued accounting pronouncements.

36

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk.

Foreign Currency Risk

We face exposure to adverse movements in foreign currency exchange rates, primarily in Asia and Europe. Our foreign currency
risk may change over time as the level of activity in foreign markets grows and could have a material adverse impact upon our financial
results. Certain of our assets, including certain bank accounts and accounts receivable, and liabilities exist in non–U.S. dollar
denominated currencies, which are sensitive to forff eign currency exchange fluctuations. These currencies are principally the Chinese
Yuan, the Taiwanese dollar, the Euro, and the British Pound Sterling and, to a lesser extent, the Japanese Yen and the Hong Kong dollar.
We have entered into hedging arrangements designed to mitigate foreign currency flff uctuat
tions. See “Risk Factors – We are subject to
forff

in Part I, Item 1A of this Annual Report for additional information.

i
eign currency risk as a result of our international operations.”

a

ForFF eign Ci

uCC rrency Tc

rTT ansactitt on Risii k

ff

We are subject to foreign currency risk arising from intercompany transactions that are expected to be settled in cash in the near
term where the cash balances are held in denominations other than our subsidiaries’ functional currency. If exchange rates weaken
against the func
tional currency, we would incur a remeasurement gain in the value of the cash balances, and if the exchange rates
strengthen against the functional currency, we would incur a remeasurement loss in the value of the cash balances, assuming the net
monetary arr
ill generally depend
on the size and type of transaction, the size and currencies of the net monetary assets and the changes in the exchange rates associated
with these currencies. Based on balances at December 31, 2022, if the Chinese Yuan, the Taiwanese dollar, the Euro and the British
Pound Sterling were to weaken (or strengthen) by 1.0% against the U.S. dollar, we would experience currency transaction gain (or loss)
of approximately $1.8 million (partially offff sff et by any foreign currency hedges). Net foreign exchange transaction gains (or losses) are
included in other income and expense.

sset balances remained constant. Our ultimate realized gain or loss with respect to currency fluctuations w

ff

ForFF eign Ci

uCC rrency Tc

rTT anslatitt on Risii k

For our subsidiaries that maintain their books in a foreign currency, fluctuations in that foreign currency will impact the amount
of total assets and liabilities that we report for our foreign subsidiaries upon the translation of these amounts into U.S. dollars. All
elements of the subsidiaries’ financial statements, except for s
tockholders’ equity accounts, are translated using a currency exchange
rate. Assets and liabilities denominated in foreign currencies are translated at the exchange rate on the balance sheet date. Income and
expense accounts denominated in foreign currencies are translated at the weighted-average exchange rate during the period presented.
Resulting translation adjustments are recorded as a separate component of accumulated other comprehensive income or loss within
stockholders’ equity in the consolidated balance sheets, which are accumulated in this account until sale or liquidation of the foreign
entity investment, at which time they are reported as adjustments to the gain or loss on sale of investment.

ff

ForFF eign Ci

uCC rrency Dc

enominii atett d Defined Benefit Plans

We have a contributory defined benefiff t plan that covers certain employees in the U.K., which is closed to new entrants and frozen
with respect to future benefit accruals. The retirement benefit is based on the final average compensation and service of each eligible
employee. December 31 is our annual measurement date, and on the measurement date, defined benefit plan assets are determined based
on faff ir value. Defined benefit plan assets consist primarily of high quality corporate bonds and stocks that are denominated in the
currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related pension liability.
The net pension and supplemental retirement benefit obligations and the related periodic costs are based on, among other things,
assumptions of the discount rate, estimated return on plan assets and mortality rates. These obligations and related periodic costs are
rial techniques and assumptions. The projected unit credit method is the actuarial cost method used to compute the
measured using actuat
pension liabia lities and related expenses.

ff

ff

As of December 31, 2022, the plan was underfunded and a liabia lity of approximately $7.5 million was reflected in our consolidated
fiff nancial statements as a noncurrent liability. The amount recognized in accumulated other comprehensive income was a net loss of
$41.1 million. If the British Pound Sterling were to (weaken) or strengthen by 1.0% against the U.S. dollar, we would experience
currency translation liability (decrease) or increase of less than $0.5 million. The weighted-average discount rate assumption used to
determine benefit obligations as of December 31, 2022, was 4.7%. A 0.2% increase/(decrease) in the discount rate used to calculate the
net period benefit cost for the year would reduce/increase annual benefit c
ost by less than $0.5 million. A 0.2% increase/(decrease) in
the discount rate used to calculate the year-end projected benefit obligation would (decrease)increase the year–end projected benefit
obligation by approximately $2.5 million. The expected return on plan assets is determined based on historical and expected future
returt ns of the various assets classes and as such, each 1.0% increase/(decrease) in the expected rate of return assumption would
increase/(decrease) the net-period benefit cost by approximately $1.2 million. The asset value of the defined benefit plan has been
tions in the U.K. equity markets and bond markets. See “Risk Factors – Changes in
volatile in recent years due primarily to wide flff uctuat
actuarial assumptm ions for our defe iff ned benefe iff t plan could increase the volatility of the plan’s asset value, require us to increase c
ash
’
contributions to the plan and have a negative impacm
t on our cash flff ows, operating results and financial condition” in Part I, Item 1A of
this Annual Report for additional i

nforff mation.

ff

37

Interest Rate Risk

We have credit facilities with financial institutions in the U.S., Asia and Europe as well as other debt instruments with interest
rates equal to LIBOR or similar indices plus a negotiated margin. A rise in interest rates could have an adverse impact upon our cost of
working capia tal and our interest expense. As of December 31, 2022, our outstanding principal long-term debt was $150.3 and
outstanding short-term debt was $36.3 million. Based on our debt balances at December 31, 2022, an increase or decrease in interest
rates by 1.0% for the year on our credit facilities would increase or decrease our annual interest rate expense by approximately $1.9
million, net of the amounts realized from our interest rate swaps. See “
Risk Factors,” – “We are subject to interest rate risk that could
have an adverse effect on our cost of working capital and interest expenses, which could adversely affect our business, operating results
and fiff nancial condition” in Part I, Item 1A of this Annual Report for additional information.

a

a

Political Risk

We have a significant portion of our assets in mainland China, Taiwan and the U.K. The possibility of political conflict between
any of these countries or with the U.S. could have a material adverse impact upon our ability to transact business through these important
business channels and to generate profits. See “Risk Factors” – Risks Related to our International Operations” in Part I, Item 1A of this
Annual Report for additional information.

Inflff ation Risk

Inflff ation did not have a material effff eff ct on net sales or net income in fiscal year 2022. A significant increase in inflation could

affff eff ct futff urt e perforff mance.

Credit Risk

t

The success of our business depends, among other factors, on the strength of the global economy and the stability of the financial
markets, which in turn affect our c
ustomers’ demand for our products, the ability of our customers to meet their payment obligations,
the likelihood of customers canceling or defeff rring existing orders and the strength of consumer demand for items containing our products
in the end-markets we serve. We provide credit to customers in the ordinary course of business and perform ongoing credit evaluations,
while at times providing extended terms. We believe that our exposure to concentrations of credit risk with respect to trade receivables
is largely mitigated by dispersion of our customers over various geographic areas, operating primarily in electronics manufacturing and
ff
distribution. We believe our allowance for doubt
ful a

ccounts is sufficient to cover customer credit risks.

ff

Item 8.

Financial Statements and Supplementary Data.

See Part IV, Item 15 “Exhibits and Financial Statement Schedules” for our consolidated financial statements and the notes and

schedules thereto fiff led as part of this Annual Report.

Item 9.

Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.

Not Applicable.

a

Item 9A. Controls and Procedures.

Disclosure Controls and Procedures

Our Chief Executive Offff iff cer, Keh-Shew Lu, and Chief Financial Officer, Brett R. Whitmire, with the participation of our
management, carried out an evaluation as of December 31, 2022, of the effectiveness of our disclosure controls and procedures (as
defiff ned in RulRR e 13a-15(e) and Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended). Based upon that evaluation, our
Chief Executive Offff icer and our C
hief Financial Officer believe that, as of the end of the period covered by this report, our disclosure
controls and procedures are effective at the reasonable assurance level to ensure that information required to be included in this report
is:

ff

• recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and

• accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, to

ff

allow timely decisions regarding disclosure.

Disclosure controls and procedures, no matter how well designed and implemented, can provide only reasonable assurance of
achieving an entity’s disclosure objectives. The likelihood of achieving such objectives is affected by limitations inherent in disclosure
controls and procedures. These include the fact that human judgment in decision-making can be faulty and that breakdowns i
n internal
control can occur because of human failures such as simple errors, mistakes or intentional circumvention of the established processes.

ff

Management's Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control
over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer

38

and implemented by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability
of fiff nancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAA

P.

ff

Our internal control over fiff nancial reporting includes those policies and procedures that: (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance
that transactions are recorded as necessary t
rr o permit preparation of financial statements in accordance with U.S. GAAP, and that receipts
and expenditurt es of ours are being made only in accordance with authorizations of our management and directors; and (3) provide
reasonabla e assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could
have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

CC

Under the supervision and with the participation of management, including our Chief Executive Officer and the Chief Financial
Offff iff cer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework and
issued by the Committee of Sponsoring Organizations of the
criteria establa ished in IntII ernal Control—Integrated Framework (2013)
Treadway Commission (“COSO”). This evaluation included review of the documentation of controls, testing of operating effectiveness
of controls and a conclusion on this evaluation. In fiff scal year 2022, we completed the acquisition of onsemi's wafeff r fabrication facility
and operations located in South Portland, Maine ("SPFAB"). We have excluded SPFAB‘s business, which was accounted for as a
ontrol over financial reporting. Total assets for SPFAB
ff
business combination, frff om our assessment of the effectiveness of internal c
represent approximately 3.5%, of the Company's total assets as of December 31, 2022. Total net sales for S
PFAB represent less than
1% of of net sales for the year ended December 31, 2022.

ff

Based on this evaluation, management concluded that our internal control over fiff nancial reporting was effeff ctive as of December

31, 2022.

The effectiveness of our internal control over financial reporting as of December 31, 2022, has been audited by Moss Adams LLP,
an independent registered public accounting firm, as stated in their report which appears in Item 8 of this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting, known to the Chief Executive Officer or the Chief Financial
Officer, that occurred during the last fiscal quarter covered by this report that has materially affeff cted, or is reasonably likely to materially
affff eff ct, our internal control over fiff nancial reporting.

Item 9B. Other Inforff mation.

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

None

39

PART III

Item 10.

Directors, Executive Officers and Corporate Governance.

The inforff mation concerning our directors, executive officers and corporate governance is incorporated herein by reference from
the section entitled “Proposal One – Election of Directors” contained in our definitive proxy statement to be filed pursuant to Section
14(a) of the Securities Exchange Act of 1934 within 120 days after our fiscal year end of December 31, 2022, for our annual
stockholders’ meeting for 2023 (the “Proxy Statement”).

We have adopted a code of ethics that appl

ies to our Chief Executive Officer and senior financial officers. The code of ethics has
been posted on our website under the Corporate Governance portion of the Investor Relations section at www.diodes.com. We intend
to satisfy disclosure requirements regarding amendments to, or waivers from, any provisions of our code of ethics on our website.

a

Item 11.

Executive Compensation.

The inforff mation concerning executive compensation is incorporated herein by reference from the sections entitled “Compensation
Discussion and Analysis,” “Executive Compensation,” and “Compensation Committee Interlocks and Insider Participation” contained
in the Proxy Statement.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The inforff mation concerning the security ownership of certain beneficial owners and management and related stockholder matters
ated herein by reference from the sections entitled “General Information – Security Ownership of Certain Beneficial Owners
r

is incorpor
and Management,” and “Executive Compensation – Equity Compensation Plan Information” contained in the Proxy Statement.

Item 13. Certain Relationships, Related Transactions and Director Independence.

The inforff mation concerning certain relationships, related transactions and director independence is incorporated herein by
ate Governance – Certain Relationships and Related Person Transactions” and “Corporate

refeff rence frff om the sections entitled “Corpor
Governance – Director Independence” and “Proposal One – Election of Directors” contained in the Proxy Statement.

r

r

Item 14.

Principal Accountant Fees and Services.

The information concerning our principal accountant’s fees and services is incorporated herein by reference from the section

entitled “Ratification of the Appointment of Independent Registered Public Accounting Firm” contained in the Proxy Statement.

The Company's independent registered accounting firm is Moss Adams LLP, Los Angeles, California. PCAOB ID: 659.

40

Item 15.

Exhibits, Financial Statement Schedules.

,

(a)

Financial Statements and Schedules

PART IV

Our consolidated financial statements are as set forth under Item 8 of this report on Form 10-K.

(1)

Financial statements:

Report of Independent Registered Public Accounting Firm ........................................................................

Consolidated Balance Sheets at December 31, 2022, and 2021...................................................................

Consolidated Statements of Income for the Twelve Months Ended December 31, 2022, 2021 and 2020 ..

Consolidated Statements of Comprehensive Twelve Months Ended December 31, 2022, 2021 and 2020

Consolidated Statements of Equity for the Twelve Months Ended December 31, 2022, 2021 and 2020 ...

Consolidated Statements of Cash Flows for the Twelve Months Ended December 31, 2022, 2021 and
2020 ..............................................................................................................................................................

Notes to Consolidated Financial Statements ................................................................................................

Page

42

44

45

46

47

48

49

(2)

Schedules:

None

Schedules not listed above have been omitted because the information required t
ff

in the financial statements and note thereto.

ff

o be set forth therein is not applicable or is shown

a

(b) Exhibits

The exhibits listed on the Index to Exhibits are filed as exhibits or incorporated by reference to this Annual Report.

(c)

Financial Statements of Unconsolidated Subsidiaries and Affiliates

Not Applicable.

a

Item 16. Form 10-K Summary.

None

41

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of
Diodes Incorpor

ated

r

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidatedbalance sheets of Diodes Incorporated and Subsidiaries (the “Company”) as of
December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, equity, and cash flows for each of
the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial
statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2022, based on criteria
establa ished in InteII
rnal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial
position of the Company as of December 31, 2022 and 2021, and the consolidated results of its operations and its cash flows for each
of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United
States of America. Also in our opinion, the Company maintained, in all material respects, effeff ctive internal control over financial
amework (2013) issued by COSO.
reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Fr

II

Basis fii or Off

piOO nii

ions

ff

The Company’s management is responsible for these consolidated financial statements, for maintaining effeff ctive internal control over
ts assessment of the effectiveness of internal control over financial reporting, included in the accompanying
fiff nancial reporting, and for i
Management’s Annual Report on Internal Control over Financial Reporting included in Item 9A. Our responsibility is to express an
opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting
based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)
(“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
a
appl

icabla e rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits
to obtain reasonabla e assurance about whether the consolidated financial statements are free of material misstatement, whether due to
error or frff aud, and whether effective internal control over financial reporting was maintained in all material respects.

ff

Our audits of the consolidated fiff nancial statements included performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated fiff nancial statements. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over finaff
ncial reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effff eff ctiveness of internal control based on the assessed risk. Our audits also included performing such other
procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As discussed in Management’s Annual Report on Internal Control Over Financial Reporting, on June 3, 2022, the Company acquired
certain assets and operations of Fairchild Semiconductor Corporation (“SPFAB”). For the purposes of assessing internal control over
fiff nancial reporting, management excluded SPFAB, whose fiff nancial statements constitute approximately 3.5% of the Company’s
consolidated total assets and less than 1% of consolidated net sales as of and for the year ended December 31, 2022. Accordingly, our
audit did not include the internal control over financial reporting of SPFAB.

Defe iff nii

itii itt on and Limitations of Internal Control Over Financial Reporting

ity of
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliabila
fiff nancial reporting and the preparation of financial statements for e
xternal purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effeff ct on the
fiff nancial statements.

ff

42

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

CrCC itii itt cal Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements
that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are
material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole,
and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.

Revenue – Ship and Debit Reserve
As described in Note 1, the Company records reserves related to estimated customer incentives, such as “ship and debit”, which arise
when the Company, from time to time based on market conditions, issues credits to certain distributors upon their shipments to their end
customers. The ship and debit reserve comprehends both claims in process and anticipated claims arising from the eventual sale of
distribution inventory t
hat is subject to claim activity. The Company performs a look-back analysis of revenues and credits issued to
distributors. Using their look-back analysis, the Company adjusts their assumptions and estimated reserves each quarter. The resulting
ship and debit reserve is recorded as a reduction to 2022 net sales with a corresponding reduction to accounts receivable, and
a
appr

oximated $53.9 million as of December 31, 2022.

rr

Estimating the ship and debit reserve involves the application of models which require management to make certain assumptions
including historical customer ship and debit credit rates and credit lag times on such revenues. These assumptions could be affected by
current and future economic and market conditions. We identified the ship and debit reserve as a critical audit matter because auditing
management’s estimate of the ship and debit reserve was complex and judgmental due to the signififf cant estimation required by
management.

The primary pr

rr

ocedures we performed to address this critical audit matter included:

•

•

•

•

•

Obtaining an understanding, evaluating the design and testing the operating effectiveness of internal controls over the
measurement of the ship and debit reserve, including testing controls over management’s review of the reserve calculation
and the underlying assumptions used to develop the estimate.

Confiff rming and tracing select distributor balances to supporting documents.

Vouching revenues and ship and debit credits to supporting documents.

Evaluating the reasonableness of management’s assumptions by comparing the significant assumptions (ship and debit
claims percentage history and the relevant cycle time period between when sales are made by distributors to their end
customers and when ship and debit credit memos are issued by the Company to distributors) used to historical customer
trends, including testing the completeness and accuracy of the underlying data.

Perforff ming sensitivity analyses on the significant assumptions (ship and debit claims percentage history and the relevant
cycle time period between when sales are made by distributors to their end customers and when ship and debit credit
memos are issued by the Company to distributors) to evaluate the potential changes in the ship and debit reserve that
would result from changes in the assumptions.

/s/ Moss Adams LLP

Los Angeles, California
ff
rr
ry 10, 2023
Februar

We have served as the Company’s auditor since 1993.

43

DIODES INCORPORARR TED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
housands, except share and per share amounts)s

II
(I(( n t

December 31,

2022

2021

Assets
Current assets:

Cash and cash equivalents
Restricted cash
Short-term investments
Accounts receivable, net of allowances of $5,852 and $4,324 at
December 31, 2022 and December 31, 2021, respectively
Inventories
Prepaid expenses and other
Total current assets
Property, plant and equipment, net
Defeff rred income tax
Goodwill
Intangible assets, net
Other long-term assets

Total assets

Liabilities
Current liabilities:
Lines of credit
Accounts payable
Accruerr d liabilities and other
Income tax payable
Current portion of long-term debt
Total current liabilities
Long-term debt, net of current portion
Defeff rred tax liabilities
Other long-term liabilities

Total liabia lities

Commitments and contingencies (See Note 17)

Stockholders' equity

Prefeff rred stock - par value $1.00 per share; 1,000,000 shares authorized; no
shares issued or outstanding
Common stock - par value $0.66 2/3 per share; 70,000,000 shares
authorized; and 45,469,722 shares and 45,017,774 shares issued and
outstanding at December 31, 2022 and December 31, 2021, respectively
Additional paid-in capital
Retained earnings
Treasury sr
December 31, 2021
Accumulated other comprehensive loss
Total stockholders' equity
Noncontrolling interest
Total equity

tock, at cost, 9,281,581 shares at December 31, 2022 and 9,272,513 shares at

Total liabia lities and stockholders' equity

$

$

$

$

$

336,732
4,367
7,059

369,233
360,281
83,999
1,161,671
736,730
35,308
144,757
79,137
130,709
2,288,312

36,280
160,442
214,433
19,682
1,693
432,530
147,470
12,903
112,490
705,393

$

$

363,599
3,219
6,542

358,496
348,622
107,194
1,187,672
582,079
21,256
149,890
94,550
159,048
2,194,495

18,068
221,254
184,649
29,682
17,381
471,034
265,574
32,230
122,933
891,771

-

-

36,503
494,773
1,448,092

(337,490)
(128,233)
1,513,645
69,274
1,582,919
2,288,312

$

36,195
471,649
1,116,809

(336,894)
(50,517)
1,237,242
65,482
1,302,724
2,194,495

The accompanying notes are an integral part of these consolidated financial statements.

44

DIODES INCORPORARR TED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

II
(I(( n t

housands, except per share data)

Net sales
Cost of goods sold
Gross profitff

Operating expenses
Selling, general and administrative
Research and development
Amortization of acquisition related intangible assets
(Gain) loss on disposal of fiff xed assets
Other operating (income) expense
Total operating expense
Income frff om operations
Other (expense) income
Interest income
Interest expense
Foreign currency gain (loss), net
Unrealized (loss) gain on investments
Other income
Total other (expense) income
Income beforff
Income tax provision
Net income
Less net income attributable to noncontrolling interest
Net income attributable to common stockholders

e income taxes and noncontrolling interest

Earnings per share attributable to common stockholders:
Basic
Diluted
Number of shares used in earnings per share computation:
Basic
Diluted

$

$

$
$

Twelve Months Ended December 31,
2021
1,805,162
1,134,802
670,360

2022
2,000,580
1,173,343
827,237

2020
1,229,215
798,094
431,121

$

$

280,877
126,316
15,610
(3,651)
(108)
419,044
408,193

3,672
(8,320)
2,122
(16,514)
6,787
(12,253)
395,940
56,685
339,255
(7,972)
331,283

7.31
7.20

45,330
46,036

$

$
$

257,710
119,200
16,216
246
1,003
394,375
275,985

3,139
(7,491)
(2,107)
28,018
17,551
39,110
315,095
78,807
236,288
(7,525)
228,763

5.11
5.00

44,772
45,781

$

$
$

185,067
94,288
16,261
106
1,067
296,789
134,332

1,066
(11,662)
(9,814)
2,083
4,336
(13,991)
120,341
21,112
99,229
(1,141)
98,088

1.92
1.88

51,004
52,133

The accompanying notes are an integral part of these consolidated financial statements.

45

DIODES INCORPORARR TED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)

Net income
Unrealized (loss) gain on defined benefiff t plan, net of tax
Unrealized gain (loss) on swaps and collars, net of tax
Unrealized foreign currency (loss) gain, net of tax
Comprehensive income
Less: Comprehensive income attributable t
Total comprehensive income attributable to common stockholders

o noncontrolling interest

a

Twelve Months Ended December 31,
2020
2021
2022

339,255
(697)
4,279
(81,298)
261,539
(7,972)
253,567

$

$

236,288
7,818
1,417
13,854
259,377
(7,525)
251,852

$

$

99,229
(3,723)
(3,183)
41,439
133,762
(1,141)
132,621

$

$

The accompanying notes are an integral part of these consolidated financial statements.

46

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DIODES INCORPORARR TED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

Cash flows from operating activities

ff
Net income
Adjustments to reconcile net income to net cash provided by operating activities, net of
effff eff cts of acquisitions

2022

Twelve Months Ended December 31,
2021

2020

$

339,255

$

236,288

$

99,229

Depreciation
Amortization of intangible assets
Amortization of debt-issuance costs
Share-based compensation expense
Defeff rred income taxes
Investment loss (gain)
(Gain) loss on disposal of property, plant and equipment
Other
Changes in operating assets:

Change in accounts receivable
Change in inventoryrr
Change in other operating assets

Changes in operating liabilities:
Change in accounts payable
Change in accrued liabilities
Change in income tax payable
Change in other operating liabilities

Net cash flff ows provided by operating activities

ff

ff

ermination of cross currency swapa

Cash flows from investing activities
Acquisitions, net of cash received
Disposal of wafeff r faff bra ication facility
Receipt of cash for t
Receipt of insurance recovery
Purchases of property, plant and equipment
Proceeds frff om sale of property, plant and equipment
Proceeds frff om short-term investments
Purchases of short-term investments
Purchase of equity securities
Other

Net cash and cash equivalents used in investing activities

Cash flows from financing activities

ff

Advances on lines of credit and short-term debt
Repayments of lines of credit and short-term debt
Proceeds frff om long-term debt
Repayments of long-term debt
Debt issuance costs
Net proceeds from issuance of common stock
Repayment of and proceeds from finance lease obligation
Taxes paid related to net share settlement
Net changes in noncontrolling interests
Repurchases of common stock
Other

Net cash and cash equivalents used in fiff nancing activities

Effff eff ct of exchange rate changes on cash and cash equivalents
Change in cash and cash equivalents, including restricted cash
Cash and cash equivalents, beginning of period, including restricted cash
Cash and cash equivalents, end of period, including restricted cash
Supplemental Cash Flow Inforff mation

Interest paid during the period
Taxes paid during the period

Non-cash investing and financing activities:

Accounts payable balance related to the purchase of

a

property, plant and equipment

$

$
$

$

112,149
15,610
950
36,287
(39,225)
16,225
(3,626)
(4,016)

(20,163)
(29,675)
1,847

(50,076)
31,760
(8,333)
(6,468)
392,501

(83,979)
19,270
9,429
6,067
(211,728)
418
8,002
(9,361)
(4,051)
670
(265,263)

114,291
(93,498)
372,751
(505,746)
(134)
140
(69)
(12,300)
(1,160)
-
12
(125,713)

(27,244)
(25,719)
366,818
341,099

7,355
88,687

30,486

$

$
$

$

106,219
16,216
754
33,205
21,459
(37,896)
243
1,239

(52,721)
(43,038)
(25,445)

55,628
29,352
(1,455)
(1,505)
338,543

(157)
9,939
-
-
(141,195)
3,207
7,328
(7,567)
(15,106)
(678)
(144,229)

21,862
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557,882
(586,001)
(673)
4,337
(291)
(14,823)
5,631
-
7
(158,441)

10,416
46,289
320,529
366,818

6,944
56,077

24,256

$

$
$

$

91,747
16,260
1,455
25,260
(14,456)
(1,766)
119
817

(10,501)
(4,560)
(9,067)

7,422
(9,198)
(2,182)
(3,359)
187,220

(24,593)
-
-
-
(75,813)
232
10,277
(11,486)
(6,131)
742
(106,772)

77,483
(40,498)
956,363
(744,237)
(2,477)
6,830
(919)
(8,302)
(2,102)
(296,705)
262
(54,302)

34,876
61,022
259,507
320,529

10,219
47,891

7,297

The accompanying notes are an integral part of these consolidated financial statements.

48

DIODES INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
tt n thousands except per share data)
(T(( ablTT

e amounts i

Note 1 – Summary of Operations and Significant Accounting Policies

Nature of operations

GENERARR L

Diodes Incorporated, together with its subsidiaries (collectively the “Company,” “we” or “our”(Nasdaq: DIOD)), a Standard and
Poor's Smallcap 600 and Russell 3000 Index company, is a leading global manufacturer and supplier of high-quality application-specific
standard products within the broad discrete, logic, analog, and mixed-signal semiconductor markets. The Company serves the industrial,
automotive, computing, communications and consumer markets.

The Company's products include diodes; rectifiers; transistors; MOSFETs; GPP bridges; GPP rectifiers; protection devices;
tion-specific arrays; single gate logic; amplifiers and comparators; Hall-effect and temperature sensors; and power management
ff
func
devices, including LED drivers, AC-DC converters and controllers, DC-DC switching and linear voltage regulators, voltage references
along with special-func
tion devices, such as USB power switches, load switches, voltage supervisors, and motor controllers. The
Company also has timing, connectivity, switching, and signal integrity solutions for high-speed signals.

ff

r

The Company's corpor

ate headquarters and Americas’ sales offices are located in Plano, Texas, and Milpitas, California,
respectively. Design, marketing, and engineering centers are located in Plano; Milpitas; Taipei, Taoyuan City, and Zhubei City, Taiwan;
Shanghai and Yangzhou, China; Oldham, England; and Neuhaus, Germany. The Company's wafer fabrication facilities are located in
Oldham, England; Greenock, Scotland; Shanghai and Wuxi, China; and Keelung, and Hsinchu, Taiwan and South Portland, Maine,
United States. The Company has assembly and test facilities located in Shanghai, Jinan, Chengdu, and Wuxi, China; Neuhaus, Germany;
and Jhongli and Keelung, Taiwan. Additional engineering, sales, warehouse, and logistics offices are located in Taipei, Taiwan; Hong
Kong; Oldham, England; Shanghai, Shenzhen, Wuhan, and Yangzhou, China; Seongnam-si, South Korea; and Munich and Frankfurt,
Germany; with support offices throughout the world.

•

•

•

The Company’s manufacturing facilities have achieved certifications in the internationally recognized standards of ISO
9001:2015, ISO 14001:2015, and, for a

utomotive products, IATF 16949:2016;

ff

Diodes Incorporated is also C-TPAT certified; and

We believe these quality awards reflect the superior quality-control techniques established at Diodes Incorporated and
further enhance our credibility as a vendor-of-choice to original equipment manufacturers ("OEMs") increasingly concerned
with quality and consistency.

Our market focus is on high-growth, end-user applications in the following areas:

•

•

•

•

•

Industrial: embedded systems, precision controls, and Industrial IoT;

Automotive: connected driving, comfort/style/safety, and electrification/powertrain;

Computing: cloud computing including server, storage, and data center applications;

Communications: smartphones, 5G networks, advanced protocols, and charging solutions; and

Consumer: IoT, wearables, home automation, and smart infrastructure;

Significant Accounting Policies

Principles of consolidation – The consolidated financial statements include the accounts of Diodes Incorporated, its wholly-
owned subsidiaries and its controlled majority-owned subsidiaries. We account for equity investments in companies over which we have
the ability to exercise significant influence, but do not hold a controlling interest, under the equity method, and we record our
proportionate share of income or losses in Interest and other, net in the consolidated statements of income. All significant intercompany
balances and transactions have been eliminated.

Use of estimates – The preparation of financial statements in conformity with generally accepted accounting principles in the
United States of America (“GAAP”) requires that management make estimates and assumptions that affect the amounts reported in the
consolidated financial statements and accompanying notes. The level of uncertainty in estimates and assumptions increases with the
length of time until the underlying transactions are completed. Actual results may differ from thes
e estimates in amounts that may be
material to the consolidated financial stat

ements and accompanying notes.

ff

ff

Revenue recognition – The Company generates revenue from sales of its semiconductor products to direct customers and
distributors and recognizes revenue when control is transferred. This transfer generally occurs at a point in time upon shipment or

rr

delivery t
o the customer or distributor, depending upon the terms of the sales order. The payment terms on our sales are based on
negotiations with our customers. For sales to distributors, payment is not contingent upon resale of the products. The vast majority of
our revenue frff om products and services is accounted for at a point in time.

Our customers can order different types of semiconductors in a single contract (purchase order), and each line on a purchase order
represents a separate performance obligation. Depending on the terms of an arrangement, we may also be responsible for shipping and
handling activities. We have elected to account for shipping and handling as activities to fulfill our promise to transfer the good(s). As
such, shipping and handling activities do not represent a separate performance obl
igation, and are accrued as a fulfillment cost. Further,
although we offff eff r warranties on our products, our warranties are considered to be assurance-type in nature and do not cover anything
beyond ensuring that the product is functioning as intended. Based on the guidance in ASC 606, assurance-type warranties do not
represent separate performance obligations; therefore, the primary performance obligation in the majority of our contracts is the delivery
of a specific good through the purchase order submitted by our customer.

ff

We record allowances/reserves for a number of items. The folff

lowing items are the largest dollar items for which we record
allowances/reserves, with ship and debit making up the vast majority: (i) ship and debit, which arise when we issue credit to certain
distributors upon their shipments to their end customers; (ii) stock rotation, which are contractual obligations that permit certain
distributors, up to four times a year, to return a portion of their inventory based on historical shipments to them in exchange for an equal
and offsetting order; and (iii) price protection, which arise when market conditions cause average selling prices to decrease and we issue
credit to certain distributors on their inventory. Ship and debit reserves are recorded as a reduction to net sales with a corresponding
reduction to accounts receivable. Stock rotation reserves and price protection reserves are recorded as a reduction to net sales with a
corresponding increase in accrued liabia lities.

We also assess our customer’s ability and intention to pay, which is based on a variety of factors including our customer’s historical
payment experience, their financial condition and the condition of the global economy and fiff nancial markets. Payment terms and
conditions typically vary depending on negotiations with the customer.

Net sales are reduced in the period of sale for estimates of product returns and other allowances including distributor adjustments,

which were appr

a

oximately $190.7 million, $220.3 million and $194.7 million in 2022, 2021 and 2020, respectively.

Product warranty – We generally warrant our products for a period of one year from the date of sale. Historically, warranty

expense has not been material.

Cash, cash equivalents, and short-term investments – We consider all highly liquid investments with maturity of three months
or less at the date of purchase to be cash equivalents. We currently maintain substantially all of our day-to-day operating cash balances
with major financial institutions. We hold short-term investments consisting of time deposits, which are highly liquid with maturity
dates greater than three months at the date of purchase. Generally, we can access these investments in a relatively short amount of time
but in doing so we generally forfeit a portion of interest income. See Note 3 below for additional information regarding fair value of
fiff nancial instrumr

ents.

ff

Allowance for doubtful accounts –

We evaluate the collectability of our accounts receivable based upon a combination of factors,
including the current business environment and historical experience. If we are aware of a customer’s inability to meet its financial
obligations, we record an allowance to reduce the receivabla e to the amount we reasonably believe will be collected from the customer.
For all other customers, we record an allowance based upon the amount of time the receivables are past due. If actual accounts receivable
rff om these estimates, an adjustment to the allowance may be necessary with a resulting effect on operating expense.
collections diffff er f
a
Accounts receivable are presented net of valuation allowance, which were approximately $5.9 million at December 31, 2022 and $4.3
million at December 31, 2021.

ff

Inventories – Inventories are stated at the lower of cost or net realizabla e value. Cost is determined principally by the first-in, firsff

t-
out method. Cost includes materials, labor, and manufacturing overhead related to the purchase and production of inventories. Any
write-down of inventory to the lower of cost or net realizable value at the close of a fiscal period creates a new cost basis that
subsequently would not be marked up based on changes in underlying facts and circumstances. On an on-going basis, we evaluate
inventory for obsolescence and slow-moving items. This evaluation includes analysis of sales levels
, sales projections, and purchases
by item, as well as raw material usage related to our manufacturing facilities. If our review indicates a reduction in utility below carrying
value, we reduce inventory to a new cost basis. If future demand or market conditions are different from our current estimates, an
inventory adjustment t
ay be required, and would be reflff ected in cost of goods sold in the period the revision
rr
is made.

o write down inventory mrr

rr

Property, plant and equipment – Purchased property, plant and equipment is recorded at historical cost, and property, plant and
equipment acquired in a business combination is recorded at fair value on the date of acquisition. Property, plant and equipment is
depreciated using straight-line methods over the estimated useful lives, which range from 20 to 55 years for buildings and 3 to 10 years
for machinery and equipment. The estimated lives of leasehold improvements range from 3 to 5 years, and are amortized over the shorter
of the remaining lease term or their estimated useful lives.

Goodwill and other indefinite lived intangible assets – Goodwill and indefinite lived assets are tested for impairment on an
annual basis or when an event or changes in circumstances indicate that its carrying value may not be recoverable. Goodwill impairment

50

is tested at the reporting unit level, which is defined as an operating segment or one level below the operating segment. Diodes has one
operating segment. No goodwill impairment occurred in 2022, 2021, or 2020. Goodwill is reviewed for impairment using eit
her a
qualitative assessment or a quantitative goodwill impairment test. If we choose to perform a qualitative assessment and determine the
faff ir value more likely than not exceeds the carrying value, no further evaluation is necessary. When we perform the quantitative goodwill
impairment test, we compare fair value to carrying value, which includes goodwill. If faff ir value exceeds carrying value, the goodwill is
not considered impaired. If the carrying value is higher than the fair value, the difference would be recognized as an impairment loss.

ff

Impairment of long-lived assets – Our long-lived assets are reviewed whenever events or changes in circumstances indicate that
the carryirr ng value may not be recoverable. We consider assets to be impaired if the carrying value exceeds the undiscounted projected
cash flff ows frff om operations. If impairment exists, the assets are written down to fair value or to the projected discounted cash flows from
related operations. As of December 31, 2022, we expect the remaining carrying value of assets to be recoverable.

Business combinations – We account for acquired businesses using the acquisition method of accounting, which requires that
once control of a business is obtained, 100% of the assets acquired and liabilities assumed, including amounts attributed to noncontrolling
interests, be recorded at the date of acquisition at their respective fair values. Any excess of the purchase price over the estimated fair
values of the net assets acquired is recorded as goodwill.

For signififf cant acquisitions we may use independent third-party valuation specialists to assist us in determining the fair value of

assets acquired and liabilities assumed.

Signififf cant judgment is oftff en required in estimating the fair value of assets acquired and liabilities assumed. The Company makes
onditions of the assets, other costs not captured in the base costs, and consideration for entrepreneurial
estimates and assumptions about c
profiff t, depreciation, functional obsolescence, and economic obsolescence allocated to the various property, plant and equipment
categories considering the perspective of marketplace participants.

a

While management believes those expectations and assumptions are reasonable, they are inherently uncertain. Unanticipated
market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and
assumptions, which could result in subsequent impairments.

During the normal course of business the Company pursues acquisitions. See Note 20 for additional information regarding business

acquisitions.

Equity investments – We regularly invest in equity securities of public and private companies to promote business and strategic

objectives. Equity investments are measured and recorded as follows:

a
Marketable equi

ty securities are equity securities with readily determinable fair value ("RDFV") that are measured and recorded

at faff ir value on a recurring basis with changes in fair value, whether realized or unrealized, recorded through the income statement.

Non-marketable equity securities are equity securities without RDFV that are measured and recorded using a measurement
alternative that measures the security at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price
changes.

Equity-method investments are equity securities in investees we do not control but over which we have the ability to exercise
signififf cant influence. Equity method investments are measured at cost minus impairment, if any, plus or minus our share of equity
method investee income or loss. Our proportionate share of the income or loss from equity method investments is typically recognized
on a one-quarter lag.

Income taxes – Income taxes are accounted for using an asset and liability approach whereby deferred tax assets and li
a
abilities
are recorded for differences in the fiff nancial reporting bases and tax bases of our assets and liabilities. If it is more likely than not that
some portion of deferred tax assets will not be realized, a valuation allowance is recorded.

ff

GAAP prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial
statements uncertain tax positions taken or expected to be taken on a tax return. Tax positions shall initially be recognized in the financial
statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions shall
initially and subsequently be measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate
settlement with the tax authority assuming full knowledge of the position and all relevant facts. All deferred income taxes are classified
as noncurrent assets or noncurrent liabila

ities on the consolidated balance sheet as of December 31, 2022 and 2021, respectively.

Research and development costs – Internally-developed research and development costs are expensed as incurred. Acquired in-
process research and development (“IPR&D”) is capitalized as an indefinite-lived intangible asset and evaluated periodically for
impairment. When the project is completed, an expected life is determined and the IPR&D is amortized as an expense over the expected
life.

Shipping and handling costs – Shipping and handling costs for products shipped to cus

tomers, which are included in selling,
general and administrative expenses, were approximately $28.0 million, $24.1 million and $16.6 million for the twelve months ended
December 31, 2022, 2021 and 2020, respectively.

ff

ff

51

Concentration of credit risk – Financial instruments, w

hich potentially subject us to concentrations of credit risk, include trade
accounts receivable. Credit risk is limited by the dispersion of our customers over various geographic areas, operating primarily in
electronics manufacturing and distribution. We perform a credit evaluation of new customers and monitor the accounts receivable aging
of our existing customers. Generally we require no collateral from our customers and historically credit losses have been insignificant.

r

We currently maintain substantially all of our day-to-day cash balances and short-term investments with major financial

institutions. Cash balances are usually in excess of Federal and/or foreign deposit insurance limits.

Valuation of financial instruments – The carrying value of our financial instruments, including c

ash and cash equivalents, short-
term investments, accounts receivable, accounts payable, credit line, and long-term debt approximate fair value due to their current
market conditions, maturity dates and other faff ctors.

a

rr

Share-based compensation – Restricted stock grants are measured based on the fair market value of the underlying stock on the
date of grant and compensation expense is recognized on a straight-line basis over the requisite four-year service period. Performance
stock units are measured based on the fair market value of the underlying stock on the date of grant and compensation expense is
recognized over the three-year perforff mance period, with adjustments made to the expense to recognize the probable payout percentage.

We use the Black-Scholes-Merton model to determine the fair value of stock options on the date of grant and recognize
compensation expense for stock options on a straight-line basis. The amount of compensation expense recognized using the Black-
Scholes-Merton model requires us to exercise judgment and make assumptions relating to the factors that determine the fair value of
our stock option grants. The faff ir value calculated by this model is a func
tion of several factors, including the grant price, the expected
futff urt e volatility, the expected term of the option and the risk-free interest rate of the option. The expected term and expected future
volatility of the options require judgment. In addition, we estimate the expected forfeiture rate and only recognize expense for those
stock options expected to vest. We estimate the forfeiture rate ba
sed on historical experience, and to the extent our actual forfeiture rate
is diffff eff rent from our estimate, share-based compensation expense is adjusted accordingly.

ff

t

Treasury stock – We currently have no program authorized by our board of directors to purchase shares of our common stock.
Shares than have been previously acquired recorded as treasury stock, at cost, the measurement date of cost being date of purchase, as
a reduction to stockholder’ equity.

Functional currencies and foreign currency translation – We translate the assets and liabilities of our non-U.S. dollar functional
e subsidiaries are
currency subsidiaries into U.S. dollars using exchange rates on the balance sheet date. Net sales and expense for thes
translated at the weighted-average exchange rate during the period presented. Resulting translation adjustments are recorded as a separate
component of accumulated other comprehensive income or loss within stockholders’ equity in the consolidated balance sheets. Included
in other income are foreign exchange gains of approximately $2.1 million for the twelve months ended December 31, 2022, and foreign
exchange losses of approximately $2.1 million for the twelve months ended December 31, 2021, and approximately $9.8 million for the
twelve months ended December 31, 2020.

ff

Defiff ned benefit plan – We maintain plans covering certain of our employees in the U.K. The overfunded or underfunded status
of pension and postretirement benefit plans are recognized on the balance sheet. Actuarial gains and losses, and prior service costs or
credits, are recognized in other comprehensive income (loss), net of tax effects, until they are amortized as a component of net periodic
benefit cost. For financial reporting purposes, the net pension and supplemental retirement benefit obligations and the related periodic
pension costs are calculated based upon, among other things, assumptions of the discount rate for plan obligations, estimated return on
pension plan assets and mortality rates. These obligations and related periodic costs are measured using actuarial techniques and
assumptions. The projected unit credit method is the actuarial cost method used to compute the pension liabilities and related expenses.
The expected long-term return on plan assets was determined based on historical and expected future returns of the various asset classes.
The plan’s investment policy includes a mandate to diversify ass
ets and invest in a variety of asset classes to achieve its expected long-
term return and is currently invested in a variety of funds representing most standard equity and debt security classes. Trustees of the
plan may make changes at any time.

ff

Noncontrolling interest - Noncontrolling interest primarily relates to the minority investors’ share of the earnings of certain China
and Taiwan subsidiaries. Noncontrolling interests are a separate component of equity and not a liability.
Increases or decreases in
noncontrolling interest, due to changes in our ownership interest of the subsidiaries that leave control intact, are recorded as equity
transactions. The noncontrolling interest in our subsidiaries and their equity balances are reported separately in the consolidated financial
statements, and activities of these subsidiaries are included therein.

Contingencies – From time to time, we may be involved in a variety of legal matters that arise in the normal course of business.
Based on inforff mation available, we evaluate the likelihood of potential outcomes. We record and disclose the appropriate liability when
ated
the amount is deemed probable and reasonably estimable. In addition, we do not accrue for estimated legal fees and other directly rel
costs as they are expensed as incurred.

a

Comprehensive income (loss) – GAAP generally requires that recognized revenue, expenses, gains and losses be included in net
income. Although certain changes in assets and liabilities are reported as separate components of the equity section of the consolidated
balance sheet, such items, along with net income, are components of comprehensive income or loss. The components of accumulated
other comprehensive income or loss include foreign currency translation adjustments and unrealized gain or loss on defined benefit plan.

ff

52

Accumulated other comprehensive loss was approximately $128.2 million, $50.5 million and $73.6 million at December 31, 2022, 2021
and 2020, respectively.

As of December 31, the accumulated balance for e

ff

ach component of comprehensive income is as follows:

Unrealized foreign currency losses
Unrealized gain on cross currency and interest rate swaps, net of tax
Unrealized loss on defined benefit plan

$
$
$

(89,059)
2,122
(41,296)

$
$
$

(7,760)
(2,157)
(40,600)

$
$
$

(21,614)
(3,574)
(48,418)

2022

2021

2020

Government assistance - We recognize government grants in our consolidated statements of income on a systematic basis over
the periods which they are intended to benefit. Grants that relate to current expenses are reflected as reductions of the related expenses
in the period in which they are reported. Grants that relate to depreciable property and equipment are recorded as a deferred liability
account and then reflected in income over the useful lives of the r
elated assets. Grants received as compensation for losses, or expenses
already incurred or for the purpos
e of providing immediate financial support with no future related costs, are recognized as income in
the period they become recognizable. During 2022 we recognized approximately $2.1 million in government subsidies, primarily in
China and the United Kingdom. Of this $2.1 million, approximately $1.8 million was recognized as reduction in expense or other income
and appr
oximately $0.3 million was related to property, plant and equipment and is being recorded as a reduction of depreciation expense
a
over the useful life of the associated assets. The Company also has approximately $13.3 million of deferred grants and subsidies that
were recognized as a reduction to amortization expense of $5.5 million for the twelve months ended December 31, 2022.

ff

r

Reclassififf cations – Certain amounts frff om prior periods have been reclassified to conform to the current years’ presentation.

Recently Issued Accounting Pronouncements

The Financial Accounting Standards Board (“FASB”) issued the following Accounting Standards Updates (“ASU”) which could

have potential impact to the Company’s financial statements:

In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit L

osses (Topic 740): Troubled Debt Restructurings
and Vintage Disii closures. This ASU among other things, updates accounting and disclosures for public business entities to disclose gross
write-offs and gross recoveries by class of financing receivable and major security type in vintage disclosures. This guidance is effective
nnual reporting periods beginning after December 15, 2022, including interim periods therein. The adoption of this guidance did
ff
for a
not have a material impact on our consolidated financial statements.

CC

tt

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Acquired Contract
Assets and C
ontCC ract Liabilities. Under the new guidance, the acquirer should determine what contract assets and/or contract liabilities
it would have recorded under ASC 606 as of the acquisition date, as if the acquirer had entered into the original contract at the same
date and on the same terms as the acquiree. The recognition and measurement of those contract assets and contract liabilities will likely
be comparable to what the acquiree has recorded on its books under ASC 606 as of the acquisition date. ASU 2021-08 is effective for
fiff scal years beginning after December 15, 2022, including interim periods within those fiff scal years. Early adoption is permitted,
ny period for which financial statements have not yet been issued. However, adoption in an interim
including in an interim period, for a
period other than the fiff rst fiscal quarter requires an entity to apply the new guidance to all prior business combinations that have occurred
since the beginning of the annual period in which the new guidance is adopted. The Company does not anticipate this amendment to
have a significant impact on the consolidated financial statements.

ff

In November 2021, the FASB issued ASU No. 2021-10 Government Assistance (Topic 832), Disclosur

es by Business Entities
About Government Assistance, which requires entities to provide disclosures on material government assistance transactions for annual
reporting periods. The disclosures include information around the nature of the assistance, the relat
ed accounting policies used to account
t
for gove
rnment assistance, the effff eff ct of government assistance on the entity’s financial statements, and any significant terms and
ff
conditions of the agreements, including commitments and contingencies. The new standard was effective for the Company on January
1, 2022 and only impacts annual financial statement footnote disclosures. The adoption will not have a material effect on our
consolidated financial statements.

ii

Note 2 – Earnings per Share

Basic earnings per share is calculated by dividing net earnings attributabla e to common stockholders by the weighted-average
number of shares of common stock outstanding during the period. Diluted earnings per share is calculated similarly but includes potential

53

dilution frff om the exercise of stock options and stock awards, except when the effect w
computed using the “treasury stock method.”

ff

ould be anti-dilutive. Earnings per share are

Earnings (numerator)
Net income attributable to common stockholders

Twelve Months Ended December 31,
2021

2022

2020

$

331,283

$

228,763

$

98,088

Shares (denominator)
Weighted average common shares outstanding (basic)
Dilutive effff eff ct of stock options and stock awards outstanding
Adjusted weighted average common shares outstanding (diluted)

45,330
706
46,036

44,772
1,009
45,781

Earnings per share attributable to common stockholders
Basic
Diluted

$
$

7.31
7.20

$
$

5.11
5.00

$
$

51,004
1,129
52,133

1.92
1.88

Stock options and stock awards excluded from EPS

calculation because their inclusion would be
anti-dilutive

Note 3 – Fair Value Measurements

82

1

-

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market

participants at the measurement date.

a

a

We use valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The
oach uses prices and other relevant information generated by market transactions involving identical or comparable assets
market appr
and liabia lities. The income appr
h flows or earnings, to a single
oach uses valuation techniques to convert futff ure amounts, such as cas
present amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service
capaa
city of an asset (replacement costs). Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the
assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the
assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent
sources, or unobservable, meaning those that refleff ct the reporting entity’s own assumptions about the assumptions market participants
would use in pricing the asset or liabia lity developed based on the best information availabla e in the circumstances. These two types of
inputs create a three-tier faff ir value hierarchy that gives the highest priority to quoted prices in active markets for identical assets or
liabila

ities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

t

Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability

to access at the measurement date.

Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observabla e for the asset or liability, either directly or
indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or
liabila
ities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (for example, interest
rates, volatilities, prepayment speeds, loss severities, credit risks and default rates) or inputs that are derived principally from or
corroborated by observable market data by correlation or other means.

Level 3 Inputs - Significant unobservable inputs that reflect an entity’s own assumptions that market participants would use in

pricing the assets or liabilities.

As of December 31, 2022, we had short-term and long-term investments. Long-term investments are included with Other long-
term assets on the consolidated balance sheet. Trading securities held at December 31, 2022, were purchased on the open market and
unrealized gains and losses are included in Other income (expense). The trading securities are valued under the fair value hierarchy
using Level 1 Inputs. Short-term investments consist of investments such as time deposits, which are highly liquid with maturity dates
greater than three months at the date of purchase. Generally, we can access these short-term investments in a relatively short amount of
time but in doing so we generally forfeit a portion of earned and future interest income. Long-term investments consist of certain equity
securities acquired as part of the LSC acquisition. Deferred compensation investments consist primarily of life insurance policies, but
may also include investments in the Company’s stock, mutual funds and cash. See Note 13 for additional information related to our
defeff rred compensation program and Note 18 for additional information related to our interest rate swaps and foreign currency hedges.
The short-term investments, long-term investments and deferred compensation investments are valued under the fair value hierarchy
using Level 1 and Level 2 Inputs.

54

Financial assets and liabilities carried at fair value as of December 31, 2022, are classified in the following table:

Description
Short-term investments
Long-term investments
Cross-currency swap aa
Cross-currency swap la
Defeff rred compensation investments

sset
a
iability

Fair Market
Value

$

7,059
22,918
1,427
6,314
12,051

Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
7,059
$
22,918
-
-
26

Significant
Other
Observable
Inputs (Level 2)
-
$
-
1,427
6,314
12,025

Significant
ff
Unobservable
Inputs
(Level 3)

$

-
-
-
-
-

Financial assets and liabilities car

a

ried at faff ir value as of December 31, 2021 are classified in the following table:

Description
Short-term investments
Long-term investments
a
iability
Cross-currency swap la
Defeff rred compensation investments

Fair Market
Value

$

6,542
47,001
1,330
15,483

Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
6,542
$
47,001
-
904

Significant
Other
Observable
Inputs (Level 2)
-
$
-
1,330
14,579

Significant
ff
Unobservable
Inputs
(Level 3)

$

-
-
-
-

Total
Changes in
Fair Values
Included in
Current
Period
Earnings

-
(20,386)
-
-
(3,048)

Total
Changes in
Fair Values
Included in
Current
Period
Earnings

-
28,018
-
1,527

$

$

ncial assets and financial liabilities are measured at fair value on a non-recurring basis; that is, the instruments are not
Certain finaff
measured at fair value on a
n ongoing basis, but are subject to faff ir value adjustments in certain circumstances (for example, when there
ff
is evidence of impairment). We believe our long-term debt under our revolving credit facility approximates fair value and is valued
under the fair value hierarchy using Level 2 Inputs. Financial assets and financial liabilities measured at faff ir value on a non-recurring
basis were not significant at Dece

mber 31, 2022 and 2021.

ff

We also are responsible for a pension plan in the U.K. that holds investments carried at fair value. See Note 13 for additional

inforff mation related to these pension plan investments.

Note 4 – Inventories

Inventories, stated at the lower of cost or market value, at December 31 were:

Finished goods
Work-in-progress
Raw materials

Note 5 – Property, Plant and Equipment

Property, plant and equipment at December 31 were:

Buildings and leasehold improvements
Machinery and equipment

Less: Accumulated depreciation and amortization

Construcr
Land

tion in-progress

2022

2021

96,659
80,616
183,006
360,281

2022

323,941
1,137,737
1,461,678
(913,245)
548,433
120,451
67,846
736,730

$

$

$

$

108,557
81,784
158,281
348,622

2021

276,958
962,597
1,239,555
(836,364)
403,191
111,987
66,901
582,079

$

$

$

$

55

Depreciation and amortization of property, plant and equipment was $112.1 million, $106.2 million and $91.7 million for the

ff

twelve months ended December 31, 2022, 2021 and 2020, respectively.

Note 6 – Intangible Assets

Intangible assets at December 31 were as follows:

Intangible Assets

Amortized intangible assets
Patents
Developed product technology
Customer relationships
Softff ware license and other
Total amortized intangible assets
Intangible assets with indefiff nite lives
In process research and development
Trademarks and trade names
Total Intangible assets with indefinite
lives

Total intangible assets

Intangible Assets

Amortized intangible assets
Patents
Developed product technology
Customer relationships
Softff ware license and other
Total amortized intangible assets
Intangible assets with indefiff nite lives
In process research and development
Trademarks and trade names
Total Intangible assets with indefinite
lives

Total intangible assets

December 31, 2022
Gross
Carrying
Amount

Useful lifeff

Accumulated
Amortization

Currency
Exchange

Net

5-15 years $
2-10 years
7-12 years
3-4 years

Indefinite
Indefinite

$

16,040
169,499
62,465
2,743
250,747

-
10,303

10,303
261,050

$

(15,437) $
(111,639)
(42,784)
(2,677)
(172,537)

-
-

-

$

(172,537) $

(234) $

(6,176)
(1,672)
(59)
(8,141)

-
(1,235)

369
51,684
18,009
7
70,069

-
9,068

(1,235)
(9,376) $

9,068
79,137

December 31, 2021
Gross
Carrying
Amount

Useful lifeff

Accumulated
Amortization

Currency
Exchange

Net

5-15 years $
2-10 years
7-12 years
3-4 years

Indefinite
Indefinite

$

16,040
166,819
62,093
2,743
247,695

2,061
10,303

12,364
260,059

$

(15,242) $
(100,248)
(38,760)
(2,677)
(156,927)

-
-

-

$

(156,927) $

(97) $

(5,736)
(1,688)
(61)
(7,582)

-
(1,000)

701
60,835
21,645
5
83,186

2,061
9,303

(1,000)
(8,582) $

11,364
94,550

Amortization expense related to intangible assets subject to amortization was $15.6 million, $16.2 million and $16.3 million for
In process research and development is transferred to

the twelve months ended December 31, 2022, 2021 and 2020, respectively.
amortized intangible assets at the time the product becomes viable.

The weighted amortization period for i

ff

ntangible assets subject to amortization is 9.9 years. The schedule below sets future

amortization expense of our currently owned intangible assets:

2023
2024
2025
2026
2027
2028 and thereafter
Total

$

$

15,201
14,901
13,907
12,358
11,351
2,351
70,069

56

Note 7 – Goodwill

Changes in goodwill for the twelve months ended December 31, were as folff

lows:

Balance at December 31, 2020
Acquisitions
Foreign currency translation adjustment
Balance at December 31, 2021
Acquisitions
Foreign currency translation adjustment
Balance at December 31, 2022

Note 8 – Bank Credit Agreements and Other Short-term and Long-term Debt

Short-term debt

$

$

158,331
(9,152)
711
149,890
1,818
(6,951)
144,757

Our Asia subsidiaries maintain credit facilities with several fiff nancial institutions through our foreign entities worldwide totaling
$172.8 million. Other than two Taiwanese credit facilities that are collateralized by assets, our f
ff
oreign credit lines are unsecured,
uncommitted and contain no restrictive covenants. These credit facilities bear interest at LIBOR or similar indices plus a specified
margin. Interest payments are due monthly on outstanding amounts under the credit lines. The unused and available credit under the
various faff cilities as of December 31, 2022, was approximately $136.0 million, net of $36.3 million a
dvanced under our foreign credit
lines and $0.4 million credit used for import and export guarantee.

a

ff

Long-term debt

The Company maintains a long-term credit facility (“U.S. Credit Agreement”) consisting of a term loan with a current balance of
zero and a $200.0 million revolving senior credit facility with zero drawn as of December 31, 2022. In addition to our U.S. Credit
Agreement, our 51% owned subsidiary, ERIS, had long-term debt of $25.8 million, a
t December 31, 2022, from local Taiwan banks.
The outstanding ERIS debt matures in various periods from 2024 through 2033.

rr

Diodes Hong Kong Limited, a company incorporated under the laws of Hong Kong and a subsidiary of the Company, entered into
a Facility Agreement (the “Facility”) with The Hongkong and Shanghai Banking Corporation Limited and the other par
ties identified
therein pursuant to which Diodes Hong Kong Limited obtained from the lenders a US Dollar revolving loan facility in an aggregate
amount equal to $105.0 million. Diodes Hong Kong Limited used a portion of the proceeds from the Facility (i) to refinance certain
existing indebtedness and (ii) to finance working capital requirements and its general corporate purposes.

r

r

57

Borrowings outstanding as of December 31, 2022 and December 31, 2021, are set forth in the table below:

Description
rr
ShSS ort-tt tett rm debt

Long-tett rm de

rr

bt

December 31,

2022

2021

$

36,280

$

18,068

Interest Rate
Various indices plus margin

Current Amount
Maturity
Various during 2023

Notes payabla e to Bank of Taiwan
Notes payabla e to CTBC Bank
Notes payabla e to CTBC Bank
Notes payabla e to E Sun Bank
Notes payabla e to E Sun Bank
Notes payabla e to E Sun Bank

Notes payabla e to Bank of Taiwan
Notes payabla e to HSBC
Notes payabla e to HSBC

2,063
13,840
3,256
3,256
276
1,516

1,628
105,000
18,558

$

2,492
16,168
3,614
3,614
371
1,771

1,807
100,000
-

Notes Payabla e to E Sun Bank
Notes Payabla e to Taishin International
Bank
Notes Payabla e to Taishin International
Bank
Notes Payabla e to Taishin International
Bank

166

43

11

217

-

-

-

-

Notes payabla e to Chang Hwa Bank
Term loan and revolver
Total long-term debt
Less: Current portion of long-term
debt
Less: Unamortized debt-issuance
costs
Total long-term debt, net of current
portion

518
-
150,348

-
155,122
284,959

(1,693)

(17,381)

(1,185)

(2,004)

$

147,470

$ 265,574

2-yr deposit rate floating plus
0.1148%
TAIBOR 3M plus 0.5%
TAIBOR 3M plus 0.5%
1-M deposit rate floating plus 0.08%
1-M deposit rate floating plus 0.08%
1-M deposit rate floating plus 0.08%
2-year deposit rate floating plus
0.082%
1M SOFR+Margin
1M Libor+Margin
2-yr deposit rate plus annual rate
floating

Annual rate plus cost of capital

Fixed annual rate

Fixed annual rate
2-yr deposit rate floating plus 1.405%
- 1.655%
Libor plus margin

June 2033
May 2024
December 2024
December 2024
June 2027
June 2030

September 2024
January 2025
January 2025

"September 2023

April-23

April-23

April-24

June-July 2026
January 2023

The table below sets forth the annual contractual matur

t

ities of long-term debt at December 31, 2022:

2023
2024
2025
2026
2027
2029 and thereafter
Total long-term debt

Note 9 – Leases

$

$

1,693
21,892
124,150
530
431
1,652
150,348

58

The Company leases certain assets used in its business, including land, buildings and equipment. These leased assets are used for

operational and administrative purposes.

The table below sets forth the components of lease expense for the twelve months ended December 31:

Operating lease expense
Finance lease expense:
Amortization of assets
Interest on lease liabilities
Short-term lease expense
Variabla e lease expense
Total lease expense

$

$

2022

2021

2020

13,275

$

16,533

$

17
1
975
3,561
17,829

$

221
1
954
4,853
22,562

$

The table below sets forth supplemental balance sheet information related to leases as of December 31:

Operating leases:
Operating lease ROU assets

Current operating lease liabilities
Noncurrent operating lease liabilities
Total operating lease liabia lities

Finance leases:
Finance lease ROU assets
Accumulated amortization
Finance lease ROU assets, net

Current fiff nance lease liabia lities
Non-current fiff nance lease liabilities
Total fiff nance lease liabilities

Weighted average remaining lease term (in years):
Operating leases
Finance leases

Weighted average discount rate:
Operating leases
Finance leases

$

$

$

$

$

$

2022

2021

43,907

$

$

$

$

$

$

7,390
20,765
28,155

2,618
(2,542)
76

30
46
76

8.2
2.6

4.2%
3.6%

15,111

836
14
525
2,940
19,426

49,703

11,199
22,291
33,490

2,561
(2,524)
37

15
23
38

6.9
2.3

4.0%
3.7%

The tabla e below sets forth supplemental cash flow and other information related to leases for the twelve months ended December

31:

Cash paid for the amounts included in the measurements of lease
liabila

ities:

Operating cash outflows from operating leases
Operating cash outflows from finance leases
Financing cash outflff ow frff om fiff nance leases

$

$

17,788
1
69

$

24,040
1
291

15,943
19
919

2022

2021

2020

ROU assets obtained in exchange for lease liabia lities incurred:
Operating leases

8,384

13,038

6,339

59

The table below sets forth information about lease liability maturities:

Operating Leases

Finance Leases

December 31,

2023
2024
2025
2026
2027
2028
2029 and thereafter
Total lease payments
Less: imputed interest
Total lease obligations
Less: current obligations
Long-term lease obligations

$

$

8,371
5,613
4,961
3,546
1,291
1,125
9,373
34,280
(6,125)
28,155
(7,390)
20,765

$

$

Note 10 – Accrued Liabilities and Other Long-Term Liabilities

Accruerr d liabilities and other current liabilities at December 31 were:

2022

2021

Accruer d expenses
Compensation and payroll taxes
Equipment purchases
Operating lease
Finance lease
Accruer d pricing adjustments
Accruer d professional services
Tax payable - non-income tax related
Other

ff

Other long-term liabilities at December 31 were:

Accruer d defined benefit plan
Unrecognized tax benefits
Operating lease
Finance lease
Defeff rred grants and subsidy
Defeff rred compensation
Tax contingencies
Other

Note 11 – Stockholders’ Equity

$

$

$

$

66,192
82,349
30,486
7,390
30
18,777
2,825
3,034
3,350
214,433

12,134
31,594
20,765
46
9,967
16,009
8,787
13,188
112,490

$

$

$

$

2022

2021

32
28
18
1
-
-
-
79
(3)
76
(30)
46

55,480
73,124
24,257
11,199
15
11,401
3,189
2,273
3,711
184,649

19,606
29,652
22,291
23
14,139
20,079
8,787
8,356
122,933

We have never declared or paid cash dividends on our Common Stock. Our U.S. Credit Facility permits us to pay dividends up to
$25.0 million per fiff scal year to its stockholders so long as we have not defaulted under the U.S. Credit Facility at the time of such
dividend and no default would result from declaring or paying such dividend. The payment of dividends is within the discretion of our
Board of Directors. See Note 8 for additional information regarding our credit agreements.

Note 12 – Income Taxes

The table below sets forth our income beforff e taxes for the twelve months ended December 31:

60

Income before income taxes
U.S.
Foreign
Total

2022

2021

2020

$

$

221,288
174,652
395,940

$

$

122,127
192,968
315,095

$

$

45,526
74,815
120,341

The table below sets forth the components of our income tax provision (benefit) for the twelve months ended December 31:

Current tax provision

Federal
Foreign
State

Defeff rred tax provision (benefit)

Federal
Foreign
State

Liabila

ity for unr

ff

ecognized tax benefiff ts

Total income tax provision

EfE fff ecff

tive Tax Rate Reconciliation

2022

2021

2020

$

$

$

46,368
37,598
56
84,022

(6,486)
(25,537)
(8)
(32,031)

$

15,691
25,489
(17)
41,163

(1,116)
31,222
-
30,106

4,694
56,685

$

7,538
78,807

$

631
17,115
56
17,802

6,411
(6,210)
65
266

3,044
21,112

The tabla e below sets forff

th a reconciliation between the effeff ctive tax rate and the statutory tax rates for the twelve months ended

December 31:

2022

2021

2020

Percent
of pretax
earnings*

Percent
of pretax
earnings*

Amount

Percent
of pretax
earnings*

Amount

21.0

$

66,170

21.0

$

25,272

Amount

$

83,147

Federal tax
State income taxes, net of feff deral tax

provision

Foreign income taxed at different tax rates
U.S. tax impact of foreign operations
Foreign withholding taxes
Research and development
ff
ity for unr
Liabila
Valuation allowance
Employee stock-based compensation
Other

ecognized tax benefiff ts

Income tax provision

$

33
(6,527)
(7,369)
(12,441)
(5,865)
4,694
(1,986)
1,784
1,215
56,685

-
(1.6)
(1.9)
(3.1)
(1.5)
1.2
(0.5)
0.4
0.3
14.3

$

(474)
(2,018)
(17,375)
33,175
(6,310)
7,538
(1,068)
(812)
(19)
78,807

(0.2)
(0.6)
(5.5)
10.5
(2.0)
2.4
(0.3)
(0.3)
-
25.0

$

(378)
81
(3,031)
(1,798)
(4,210)
3,044
2,199
(660)
593
21,112

21.0

(0.3)
0.1
(2.5)
(1.5)
(3.5)
2.5
1.8
(0.5)
0.5
17.5

*

TT
The s

um of the amounts i

tt n the table may not equal to the efe fff ective tax rate due to rounding.

ff

UncUU ertain Tax Positions

In accordance with the provisions related to accounting for uncertainty in income taxes, we recognize the benefit of a tax position
if the position is “more likely than not” to prevail upon examination by the relevant tax authority. The tabla e below sets forth a
reconciliation of the beginning and ending amount of unrecognized tax benefits:

Balance at January 1,
Additions based on tax positions related to the

current year
Additions for pr
Reductions for prior year tax positions
Balance at December 31,

ior year tax positions

ff

2022

2021

2020

43,378

$

42,466

$

10,022
75
(5,403)
48,072

$

9,244
138
(8,470)
43,378

$

35,652

7,495
4,952
(5,633)
42,466

$

$

61

If the $48.1 million of unrecognized tax benefits as of December 31, 2022, is recognized, approximately $46.1 million would
affff eff ct the effective tax rate. It is reasonably possible that the amount of the unrecognized benefit with respect to certain of our
unrecognized tax positions will significantly increase or decrease within the next 12 months. These changes may be the result of
settlements of ongoing audits or competent authority proceedings. At this time, an estimate of the range of the reasonably possible
outcomes cannot be made.

a

ff

We fiff le income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. We are no longer subject
al income tax examinations by tax authorities for tax years before 2012 or the tax years 2015 and 2018. We are no longer
to U.S. feder
subject to China income tax examinations by tax authorities for tax years before 2012. With r
espect to state and local jurisdictions and
countries outside of the U.S., with limited exceptions, we are no longer subject to income tax audits for years before 2016. Although the
outcome of tax audits is always uncertain, we believe that adequate amounts of tax, interest and penalties, if any, have been provided
. We recognize accrued interest and penalties, if any, related
ff
for i
to unrecognized tax benefiff ts in interest expense. We had an immaterial amount of accrued interest and penalties at December 31, 2022,
2021 and 2020.

n our reserve for any adjustments that may result from futff ure tax audits

ff

t

Defe eff rred TaxTT es

The table below sets forth our deferred tax assets and liabilities as of December 31:

Defeff rred tax assets

ost

Inventory crr
Accruer d expenses and accounts receivabla e
Research and development tax credits
Net operating loss carryforwards
Lease obligations
Accruer d pension
Share based compensation and others

Valuation allowances
ff
Defeff rred tax liabilities

Total deferred tax assets, non-current

Plant, equipment and intangible assets
Right of use assets
ff
Outside basis diffff erences and others

Total deferred tax liabilities, non-current

ff

Net deferred tax assets

2022

2021

$

$

30,322
6,931
9,613
52,599
3,845
2,500
20,088
125,898
(42,405)
83,493

(6,595)
(3,883)
(36,114)
(46,592)
36,901

$

$

21,692
5,966
9,613
42,068
2,050
3,878
14,809
100,076
(45,232)
54,844

(1,330)
(1,975)
(50,773)
(54,078)
766

ASU No. 2013-11 provides that an entity is required to present an unrecognized tax benefit, or a portion of an unrecognized tax
benefiff t, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a s
imilar tax loss, or a tax
credit carryforward. The $22.4 million net deferred tax asset presented in the balance sheet as of December 31, 2022, is net of $14.5
million of unrecognized tax benefiff ts. The $36.9 million and $0.8 million net deferred tax asset presented above for December 31, 2022
and 2021, respectively, is prior to the net balance sheet presentation required by ASU 2013-11.

ff

At December 31, 2022, we had no feff deral research credit carryforward and approximately $10.0 million of state tax credit and
research credit carryforwards, which are available to offset future income tax liabilities. The state tax credit carryforwards will begin to
expire in 2022. Consistent with prior years, we determined that it is more likely than not that our state research credit carryforwards will
expire before they are utilized. The valuation allowances recorded against the related deferred tax assets totaled $9.0 million as of
December 31, 2022 and 2021.

rr

At December 31, 2022, we had state net operating loss (“NOL”) carryforwards of approximately $1.2 million, and foreign NOL
carryfrr orff wards of $229.7 million which are available to offset future taxable income. The state NOL carryforward began to expire in
2022. We determined that it is more likely than not that the state NOL carryforwards will expire before they are fully utilized and
recorded a fulff
l valuation allowance on the related defeff rred tax assets. The foreign NOL carryforwards will begin to expire in 2021. We
determined that it is more likely than not that a portion of the foreign NOL carryforwards will expire before they are fully utilized. The
valuation allowances recorded against the related deferred tax assets totaled $33.8 million and $36.0 million as of December 31, 2022
and 2021, respectively.

ff

On August 9, 2022, the U.S. CHIPS and Science Act (“CHIPS Act”) was enacted. The CHIPS Act includes a 25% investment tax
y which is placed
ff
ember 31, 2022. The Company concluded the CHIPS Act did not have an impact the Company's fiff nancial statements.

credit for certain investments in domestic semiconductor manufacturing. The credit is provided for qualifying propert
in service after Dec

ff

On August 16, 2022, the Inflation Reduction Act (“IRA”) was enacted. The IRA includes a new 15% corporate minimum tax,
based on adjusted financial statement income of certain large corporations for tax years beginning after December 31, 2022. Applicable

rr

62

corpor
ations would be eligible to claim a credit for the minimum tax paid against regular tax in future years. The IRA also includes a
r
1% excise tax on stock repurchases occurring after December 31, 2022. The Company is evaluating the impact of the IRA on its financial
statements.

Supplemental Information

Our undistributed forff eign earnings continue to be indefinitely reinvested in foreign operations, with limited exceptions related to
earnings of European and Asian subsidiaries. As of December 31, 2022, we had undistributed earnings from non-U.S. operations of
appr
oximately $1.0 billion (including approximately $147.7 million of restricted earnings, which are not available for dividends).
a
Undistributed earnings of our China subsidiaries comprise $476.4 million of this total. Additional Chinese withholding taxes of
oximately $49 million would be required should the $476.4 million of such earnings be distributed out of China as dividends.
a
appr

The impact of tax holidays decreased our tax expense by approximately $0.2 million, ($0.2) million and $0.9 million for the twelve
months ended December 31, 2022, 2021 and 2020, respectively. The benefit of the tax holidays on basic and diluted earnings per share
was $0.00, $0.00 and $0.02 for the twelve months ended December 31, 2022, 2021 and 2020, respectively.

Note 13 – Employee Benefit Pff

lans

Defined Benefit Plan

We have a contributory defined benefiff t plan that covers certain employees in the U.K. The defined benefit plan is closed to new
entrants and frozen with respect to future benefit accruals. The retirement benefit is based on the final average compensation and service
of each eligible employee. We determined the fair value of the defined benefit plan assets and utilize an annual measurement date of
December 31. At subsequent measurement dates, defined benefit plan assets will be determined based on fair value. Defined benefit
plan assets consist of a diverse range of listed and unlisted securities including corporate bonds and mutual funds and are denominated
in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related pension liability.
The net pension and supplemental retirement benefit obligations and the related periodic costs are based on, among other things,
assumptions of the discount rate, estimated return on plan assets and mortality rates. These obligations and related periodic costs are
measured using actuarial t
echniques and assumptions. The projected unit credit method is the actuarial cost method used to compute the
ities and related expenses. All unrecognized actuarial gains and losses, prior service costs and accumulated other
pension liabila
comprehensive income are eliminated and the balance sheet liability is s
et equal to the funded status of the defined benefit plan at
acquisition date.

a

t

The table below sets forth net periodic benefit costs of the plan for the twelve months ended December 31:

Components of net periodic benefit cost:

Service cost
Interest cost
Recognized actuarial gain
Expected return on plan assets
Prior service cost
Net periodic benefiff t cost

Defined B

ff

enefit Plan

2022

2021

$

$

245
2,834
2,211
(7,405)
64
(2,051)

$

$

275
2,269
2,959
(7,266)
72
(1,691)

63

The table below sets forth the benefit obligation, the fair value of plan assets, and the funded status as of December 31:

Defined B

ff

enefit Plan

2022

2021

Change in benefit obligation:

Beginning balance
Service cost
Interest cost
Actuat
Benefiff ts paid
Settlements
Currency changes

rial gain

Benefiff t obligation at December 31

Change in plan assets:

l return on plan assets

Beginning balance - faff ir value
Employer contribution
Actuat
Benefiff ts paid
Settlements
Currency changes

Fair value of plan assets at December 31
ff
Underfunde

t December 31

t
d status a

$

$

$

$
$

166,764
245
2,834
(48,234)
(4,710)
(1,052)
(17,050)
98,797

155,029
2,697
(44,637)
(4,710)
(1,230)
(15,842)
91,307
(7,490)

$

$

$

$
$

175,292
275
2,269
(4,893)
(4,451)
-
(1,728)
166,764

147,861
3,027
10,314
(4,451)
-
(1,722)
155,029
(11,735)

Based on an actuarial study performed as of December 31, 2022, the plan was underfunded by approximately $7.5 million and
the liabia lity is reflected in our consolidated balance sheets as a noncurrent liability and the amount recognized in accumulated other
comprehensive loss was approximately $41.1 million.

a
We appl

y the “10% corridor” approach to amortize unrecognized actuat

rial gains (losses). Under this approach, only actuarial
gains (losses) that exceed 10% of the greater of the projected benefit obligation or the market-related value of the plan assets are
amortized. For the twelve months ended December 31, 2022, the plan’s accumulated other comprehensive income increased by
appr
oximately $1.7 million. The variance between the actual and expected return on plan assets during the period increased the
a
accumulated other comprehensive income by $52.4 million. The total unrecognized net loss is more than 10% of the projected benefit
obligation and 10% of the plan assets. Therefore, the excess amount will be amortized over the average term to retirement of plan
participants, not yet in receipt of pension, which as of December 31, 2022, was approximately 7.5 years. The following weighted-
average assumptions were used to determine net periodic benefit costs for the twelve months ended December 31:

Discount rate
Expected long-term return on plan assets

2022

2021

4.7%
6.1%

The folff

lowing weighted-average assumption was used to determine the benefit obligations at December 31:

Discount rate

2022

2021

4.7%

1.9%
5.3%

1.9%

The expected long-term return on plan assets was determined based on historical and expected future returns of the various asset
classes. The plan’s investment policy includes a mandate to diversify assets and invest in a variety of asset classes to achieve its expected
long-term return and is currently invested in a variety of funds representing most standard equity and debt security classes. Trustees of
the plan may make changes at any time.

The table below sets forth the plan asset allocations of the assets in the plan and expected long-term return by asset category:

Asset category
Growth assets
Hedging assets
Cash

Expected long-term
return

Asset allocation

7.0%
4.1%
3.5%

67%
30%
3%

The defiff ned benefit plan’s investment strategy is to invest 65% in growth strategy assets and 35% in hedging strategy assets. The
growth strategy consists of a highly diversififf ed set of assets, and the hedging component is designed to hedge a significant proportion
of the plan’s interest and inflaff
tion rate risks. The overall strategy is designed to return a long-term return of 2.6% p.a. above the liability
benchmark which is broadly equal to changes in the plan’s liabilities.

64

Benefiff t plan payments are primarily made from funded benefit plan trusts and current assets. The table below sets forth the

expected future benefit payments, including futff urt e benefit accrual, as of December 31, 2022:

2023
2024
2025
2026
2027
2028-2032

$

5,225
4,812
5,116
5,130
5,299
28,338

The trusr

tees are required to review the funding position every three years. An actuarial valuation was performed as of March 31,
2022, resulting in a deficit of approximately GBP 20 million (approximately $26 million based on a GBP: USD exchange rate of 1:1.3).
As a result of this valuation we have agreed to a revised schedule of contributions of GBP 2.0 million (approximately $2.6 million based
on a GBP: USD exchange rate of 1:1.3 ) to be paid annually with effect from January 1, 2023 to address the deficit revealed by the
valuation (with the firff st payment made by December 31, 2023 through December 31, 2028. A final payment of GBP 1.5 million
(appr
oximately $1.95 million based on a GBP: USD rate of 1:1.3) will be made by 31st December 2029. These contributions, together
a
with the assumed asset outperformance, are expected to eliminate the defiff cit by December 31, 2029.

rr

ff

a

s appoi

The plan’s trustee

nt fund managers to carry out a

ll the day-to-day functions relating to the management of the fund and its
administration. The fund managers must invest their portion of the plan’s assets in accordance with their investment manager agreement
es. The trustees are responsible for agreeing these investment manager agreements and for deciding on the portion
agreed by the truste
of the plan’s assets that will be invested with each fund manager. When making decisions, the trustees take advice from experts including
the plan’s actuary and also have the option to consult with the Company.

r

The folff

lowing tabla e summarizes the major categories of the plan assets:

Asset category
Cash and cash equivalents
Equity securities:
U.K.
Overseas equities
Emerging markets
Fixed income securities:
Government bonds
Non-government bonds
Other types of investments
Hedge funds
Liabila
Commodities
Other
Total

ity-driven investments

Level 1

Level 2

Level 3

Total

December 31, 2021

$

18,483

$

-

$

-
-
-

-
-

-
-
-
-
18,483

$

$

665
13,761
3,651

5,841
4,773

10,636
26,993
1,236
5,268
72,824

$

-

-
-
-

-
-

-
-
-
-
-

$

18,483

665
13,761
3,651

5,841
4,773

10,636
26,993
1,236
5,268
91,307

$

Fair value is taken to mean the bid value of securities, as supplied by the fund managers. All the plan’s securities are highly liquid.

The plan does not hold any Level 3 securities. See Note 3 for additional information regarding fair value and Levels 1, 2 and 3.

The investment manager agreements require the fund managers to invest in a diverse range of stocks and bonds across each
particular asset class. The stocks held by the plan in a particular asset class should therefore match closely the underlying stocks in the
relevant index. We believe that this leads to minimal concentration of risk within each asset class; although we recognize that some
asset classes are inherently more risky than others.

We also have pension plans in Asia for which the benefit obligation, fair value of the plan assets and the funded status amounts
are immaterial and therefore, not included in the amounts or assumptions above. As of December 31, 2022 and 2021, the Company has
recorded a net liability of $3.2 million and $6.3 million, res

pectively, related to these defined benefit plans in Asia.

a

401(k(( ) Rk

etirement Plan

We maintain a 401(k) retirement plan (the “Plan”) for the benefit of qualified employees at our U.S. locations. Employees who
participate may elect to make salary deferral contributions to the Plan up to 100% of the employees’ eligible payroll subject to annual
Internal Revenue Code maximum limitations. We currently make a matching contribution of $1 for every $2 cont
ributed by the
participant up to 6% (3% maximum matching) of the participant’s eligible payroll, which vests over an initial four years. In addition,
we may make a discretionary contribution to the entire qualififf ed employee pool, in accordance with the Plan.

ff

As stipulated by the regulations of China, we maintain a retirement plan pursuant to the local municipal government for the
employees in China. We are required to make contributions to the retirement plan at a rate between 10% and 22% of the employee’s

ff

65

eligible payroll. Pursuant to the Taiwan Labor Standard Law and Factory Law, we maintain a retirement plan for the employees in
Taiwan, whereby we make contributions at a rate of 6% of the employee’s eligible payroll.

For the twelve months ended December 31, 2022, 2021 and 2020, total amounts expensed under these plans were approximately

$21.5 million, $21.7 million and $10.2 million, respectively.

Defe eff rred ComCC pem nsation Plan

We maintain a Non-Qualified Deferred Compensation Plan (the “Deferred Compensation Plan”) for executive officers, key
employees and members of the Board of Directors. The Deferred Compensation Plan allows eligible participants to defer the receipt of
eligible compensation,
including equity awards, until designated future dates. We offset our obligations under the Deferred
Compensation Plan primarily by investing in the actual underlying investments. At December 31, 2022 and December 31, 2021, these
investments totaled approximately $12.1 million and $15.5 million, respectively.

t

Note 14 – Share-Based Compensation

The tabla e below sets forth the line items where share-based compensation expense was recorded for the twelve months ended

December 31:

Cost of goods sold
Selling, general and administrative expense
Research and development expense
Total share-based compensation expense

2022

2021

2020

$

$

1,630
30,295
4,362
36,287

$

$

1,321
28,188
3,696
33,205

$

$

The table below sets forth share-based compensation expense by type for the twelve months ended December 31:

Stock options
Share grants
Total share-based compensation expense

2022

2021

2020

$

$

36
36,251
36,287

$

$

73
33,132
33,205

$

$

1,064
21,013
3,183
25,260

-
25,260
25,260

In May 2022, our stockholders approved our 2022 Equity Incentive Plan (“2022 Plan”). Since the approval of the 2022 Plan, all
share-based compensation awards were granted under the 2022 Plan, and we will not grant any further stock options under any previous
plans. Stock options under the 2022 Plan generally vest in equal annual installments over a four-year period and expire eight years after
the grant date. The number of shares authorized to be awarded under the 2022 Plan is 7 million shares.

Share Grants – Restricted stock awards and restricted stock units generally vest in equal annual installments over a four-year
period. Restricted stock grants are measured based on the fair market value of the underlying stock on the date of grant and compensation
expense is recognized on a straight-line basis over the requisite four-year service period.

Perforff mance stock units (“PSUs”) are measured based on the fair market value of the underlying stock on the date of grant and
compensation expense is recognized over the three-year performance period, with adjustments made to the expense to recognize the
probabla e payout percentage. PSUs will vest upon the Company achieving a cumulative 3-year non-GAAP operating income target for
a
the appli

cable periods.

The table below sets forth a summary of our non-vested share grants in 2022, 2021 and 2020:

Restricted Stock Grants

Shares

Weighted Average
Grant Date Fair
Value ($)

Aggregate
Intrinsic Value

Nonvested at December 31, 2019
Granted
Vested
Forfeff ited and other
Nonvested at December 31, 2020
Granted
Vested
Forfeff ited and other
Nonvested at December 31, 2021
Granted
Vested
Forfeff ited and other
Nonvested at December 31, 2022

1,697
573
(770)
88
1,588
598
(750)
(34)
1,402
535
(614)
(55)
1,269

31.71
48.83
27.78
38.31
39.30
79.26
33.39
52.27
54.94
69.87
45.96
61.87
65.29

$

$

46,633

96,634

66

The total unrecognized share-based compensation expense as of December 31, 2022, was approximately $62.6 million, relating

to share grants, which was expected to be recognized over a weighted average period of approximately 2.2 years.

Stock Options – Share-based compensation expense for stock options granted i

n previous years was calculated on the date of
grant using the Black-Scholes-Merton option-pricing model. All stock option expense is related to stock options granted by Savitech
r
Corpor

ation (“Savitech”) in Savitech stock to their employees. We acquired a controlling interest in Savitech in 2020.

ff

Total cash received from option exercises was approximately $0.1 million, $4.3 million and $6.8 million during 2022, 2021 and

2020, respectively.

At December 31, 2022, there was no unrecognized compensation expense related to unvested options.

The table below sets forth a summary of activity in our stock option plan:

Stock Options
Outstanding and exercisable at December 31, 2020
Exercised
Outstanding and exercisable at December 31, 2021
Exercised
Outstanding and exercisable at December 31, 2022

Shares

Weighted
Average
Exercise Price

192
(187)
5
(5)
-

23.32
23.19
27.92
27.92

Weighted
Average
Remaining
Contractual
Term
(years)

0.4
0.4

Aggregate
Intrinsic Value
9,059
$
10,631
$
409
$
409
$

Note 15 – Related Party Transactions

We conduct business with the following related parties: Keylink International (B.V.I.) Inc. and its subsidiaries and affiliates

(“Keylink”), Nuvoton Technology Corpor

r

ation (“Nuvoton”) and Jiyuan Crystal P

rr

hotoelectric Frequency Technology Ltd. (“JCP”).

Keylink is a 5% joint venture partner in our Shanghai assembly and test facilities. We sell products to, and purchase inventory
frff om, companies owned by Keylink. In addition, our subsidiaries in China lease their manufacturing facilities in Shanghai from, and
subcontract a portion of our manufacturing process (metal plating and environmental services) to Keylink. We also pay a consulting fee
to Keylink.

ff

Warren Chen, a member of the Company's board of directors serves as a member of the Nuvoton board of directors. We purchase
wafers frff om Nuvoton for use i
n our production process and consider our relationships Nuvoton to be mutually beneficial, and plan to
continue our strategic alliance with Nuvoton. We have an agreement to purchase approximately $35.3 million of wafers from Nuvoton
that ends in the fourth quarter of 2025.

ff

JCP is an FCP manufacturing company from which we purchase material and in which we have made an equity investment. We

account for using the equity method of accounting.

The tables below set forth the revenues, expenses, accounts receivable and accounts payable with our related parties. The tables

below set forff

th the net sales, purchases and expenses, for the twelve months ended December 31:

Keylink
Net sales
Purchases
Plating, rental and consulting expense
Nuvoton
Net sales
Purchases
JCP
Purchases
LSC, its subsidiaries and affff iff liates
Net sales
Purchases

2022

2021

2020

19,998
1,949
18,176

149
15,068

581

-
-

$
$
$

$
$

$

$
$

19,689
2,015
17,922

65
9,764

1,240

-
-

$
$
$

$
$

$

$
$

19,757
1,538
14,647

10
8,418

1,095

518
12,062

$
$
$

$
$

$

$
$

67

The table below sets forth accounts receivable from and accounts payable to related parties at December 31:

Keylink
Accounts receivable
Accounts payable
Nuvoton
Accounts receivable
Accounts payable
JCP
Accounts payable

2022

2021

$
$

$
$

$

40,510
33,733

30
2,859

133

$
$

$
$

$

39,530
36,090

-
2,014

235

Prior to November 30, 2020, LSC was our largest stockholder and a related party. We acquired LSC on November 30, 2020 so

they were no longer a related party in 2022 or 2021.

The Audit Committee of the Board reviews all related party transactions for potential conflict of interest situations on an ongoing

basis, all in accordance with such procedures as the Audit Committee may adopt from time to time.

Note 16 – Segment Information, Revenue and Enterprise-Wide Disclosures

Segme

e
ent Repor

ting. For financial reporting purposes, we operate in a single segment, standard semiconductor products, through
our various manufaff cturing and distribution facilities. We aggregate our products because the products are similar and have similar
economic characteristics, use similar production processes and share the same customer type. Our primary operations include operations
in Asia, North America and Europe. The accounting policies of the operating entities are the same as those described in the summary of
signififf cant accounting policies. During the twelve months ended December 31, 2022 one customer, a broad-based distributor serving
thousands of customers, accounted for 10% or more or our net sales. During the twelve months ended December 31, 2021 and 2020 no
customer accounting for 10% or more of our net sales. No customer accounted for 10% or greater of our outstanding accounts receivable
at December 31, 2022 or 2021.

The tables below set forth net sales based on the location of the subsidiary producing the net sale:

2022

Total sales
Inter-company sales
Net sales

Property, plant and equipment
Assets

2021

Total sales
Inter-company sales
Net sales

Property, plant and equipment
Assets

2020

Total sales
Inter-company sales
Net sales

Property, plant and equipment
Assets

Asia
1,891,855
(769,630)
1,122,225

529,365
1,599,805

Asia
1,939,540
(730,058)
1,209,482

456,109
1,547,518

Asia
1,399,517
(565,723)
833,794

421,185
1,522,835

Americas

Europe

Consolidated

$

$

$
$

$

$

$
$

$

$

$
$

1,361,223
(722,872)
638,351

95,584
440,014

Americas

1,108,460
(678,662)
429,798

22,943
415,133

Americas

807,405
(531,385)
276,020

24,726
229,610

$

$

$
$

$

$

$
$

$

$

$
$

358,930
(118,926)
240,004

111,781
248,493

Europe

278,126
(112,244)
165,882

103,026
231,844

Europe

222,227
(102,826)
119,401

84,904
227,012

$

$

$
$

$

$

$
$

$

$

$
$

3,612,008
(1,611,428)
2,000,580

736,730
2,288,312

Consolidated

3,326,126
(1,520,964)
1,805,162

582,079
2,194,495

Consolidated

2,429,149
(1,199,934)
1,229,215

530,815
1,979,457

$

$

$
$

$

$

$
$

$

$

$
$

e

Disii aggregat

ion of Revenue. We disaggregate net sales from contracts with customers into direct sales and distribution sales
c area. Direct sales customers consist of those customers using our product in their manufacturing
(“Distributors”) and by geographi
process, and Distributors are those customers who resell our products to third parties. We deliver our products to customers around the
world for us
e in industrial, automotive, computing, communications and consumer applications. Further, most of our contracts are fixed-
ff
price arrangements, and are short term in naturt e, ranging from days to several months.

a

ff

68

The tabla es below set forff

th net sales for the Company disaggregated into geographic locations based on shipment and by type

(di((

rect sales or distributor) for the twelve months ended December 31, 2022, 2021 and 2020:

ff

Net Sales by Region
Asia
Europe
Americas
Total net sales

Net Sales by Type
Direct sales
Distributor sales
Total net sales

2022

2021

2020

$

$

$

$

1,480,191
283,900
236,489
2,000,580

2022

590,173
1,410,407
2,000,580

$

$

$

$

1,439,545
220,772
144,845
1,805,162

2021

607,645
1,197,517
1,805,162

$

$

$

$

961,376
171,985
95,854
1,229,215

2020

419,024
810,191
1,229,215

Net sales frff om products shipped to China for the t

welve months ended December 31, 2022, 2021 and 2020, was $941.3 million
$938.1 million and $649.9 million, respectively. While net sales in total have continued to grow in all geographic locations presented,
net sales in Asia, as a percentage of total net sales has declined due to the result of lockdowns related to the zero-COVID policy, which
we believe has impacted end-demand in China.

ff

Note 17 – Commitments and Contingencies

Lease commitments – We lease offices, manufaff cturing plants, equipm

t

ent, vehicles and warehouses under various lease

agreements expiring through 2048. For information related to our lease commitments see Note 9.

In addition, we have the following land right leases. None of the leases requires a rental payment.

Chengdu, China
Shanghai, China*
Shanghai, China*
Shandong, China
Yangzhou, China
*Separate leases by separate Diodes’ subsidiaries

Term (years)
50
50
50
50
50

Expiration Date
2061
2056
2058
2058
2065

Purchase commitments – We have entered into non-cancelabla e purchase contracts for capital expenditures, prima

rily for
ing equipment, for approximately $85.6 million at December 31, 2022. As of December 31, 2022, we also had a commitment
manufacturt
to purchase appr
oximately $147.7 million of wafers to be used in our manufacturing process. These wafer purchases will occur from
a
2023 to 2025.

ff

Contingencies - From time to time, we are involved in various legal proceedings that arise in the normal course of business. While
we intend to defeff nd any lawsuit vigorously, we presently believe that the ultimate outcome of any current pending legal proceeding will
not have any material adverse effect on our financial position, cash flows or operating results. However, litigation is subject to inherent
uncertainties, and unfaff vorable rulings could occur. An unfavorable ruling could include monetary damages, which could impact on our
business and operating results for the period in which the ruling occurs or future periods. Based on information available, we evaluate
the likelihood of potential outcomes. We record the appropriate liability when the amount is deemed probable and reasonably estimable.
In addition, we do not accrue f
her directly related costs as they are expensed as incurred. The Company is
ff
not currently a party to any pending litigation that the Company considers material.

ff
mated legal fees and ot

or esti

r

69

Note 18 – Derivative Financial Instruments

We use derivative instruments to manage r

isks related to foreign currencies, interest rates and the net investment risk in our foreign
subsidiaries. Our objectives for holding derivatives include reducing, eliminating, and efficiently managing the economic impact of
these exposures as effectively as possible. Our derivative programs include strategies that both qualify and do not qualify for hedge
accounting treatment.

ff

r

Hedges of Foreign Currency Risk

We are exposed to fluctuations in various foreign currencies against our different func

ff
tional currencies. We use foreign currency
forff ward agreements to manage this exposure. We use foreign currency forward agreeme
nts to manage this exposure. At December 31,
2022 and December 31, 2021, we had $183.1 million and $195.2 million, respectively, of outstanding foreign currency forward
agreements that are intended to preserve the economic value of foreign currency denominated monetary assets and liabilities; these
ing treatment in accordance with Accounting Standards Codification ("ASC") No. 815.
instrumr

ents are not designated for hedge account

ff

ff

ff

Hedges of Interest Rate and Net Investment Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to
interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps, including interest rate collars,
as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the recei
pt of variable
amounts frff om a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange
of the underlying notional amount. The Company makes use of cross currency swaps to decrease the foreign exchange risk inherent in
the Company’s investment in some of its foreign subsidiaries.

a

The tabla e below sets forth the number of instrumr

ents and the notional amounts of the Company's cross currency swaps at

December 31, 2022 and December 31, 2021:

Cross currency swapsa

Number of Instruments

2022

2021

2

2

Notional Amount

2022

160,000

2021

160,000

The tabla e below sets forth the fair value of the Company’s interest rate related derivative financial instruments as well as their

classififf cation on the Consolidated Balance Sheets as of December 31, 2022 and December 31, 2021:

Other Current Assets
2021
2022

Fair Value

Other Assets

2022

2021

Other Liabilities
2022

2021

Currency swapsa

$

-

$

-

$

1,427

$

-

$

6,314

$

1,330

The tabla es below sets forth the effect of the Company’s derivative financial instruments on the Consolidated Statements of Income

ff
for t

he twelve months ended December 31 2022, 2021 and 2020:

Amount of Gain or (Loss)
Recognized in OCI on
Derivative
December 31,
2021

2020

2022

Location of Gain
or (Loss)
Reclassififf ed frff om
OCI into
Accumulated
Income

Amount of Gain or (Loss)
Reclassififf ed frff om
Accumulated OCI into
Net Income
December 31,
2021

2022

2020

Location of Gain
or (Loss)
Recognized in
Income on
Derivative
(Ineffff eff ctive
Portion
Excluded frff om
Effff eff ctiveness
Testing)

Amount of Gain or (Loss)
Recognized in Income on
Derivative (Ineffective
Portion and Amount
Excluded frff om
Effff eff ctiveness Testing)
December 31,
2021

2020

2022

$

-
5,383

$

(13)
989

$ (1,581)

Interest expense

$

(2,305) N/A

-
-

$ (555)
-

$ (445) N/A
-

Interest income

$

-
2,308

$

-
2,469

$

-
-

Derivative Instruments
Designated as
Hedging Instruments

Interest rate swaps and
collars
Cross currency swapsa

We estimate that none of the net derivative losses included in accumulated other comprehensive income (“AOCI”) as of December
31, 2022, will be reclassified into earnings within the following 12 months. No gains or losses were reclassified from AOCI into earnings
as a result of forff ecasted transactions that failed to occur during fiscal year 2022. As of December 31, 2022 and 2021, the Company had
not posted any collateral related to these agreements.

Note 19 - Equity Investments

The Company maintains equity investments in companies which are accounted for under the measurement alternative described
in ASC 321-10-35-2 for equity securities that lack readily determinable fair values. During the twelve months ended December 31,
2022 the Company recognized $3.9 million upward fair value adjustments, based on the valuation of additional equity issued by the
investee which was deemed to be an observable transaction of a similar investment under ASC 321. The gain was recorded within Other

70

income, in the condensed consolidated statement of operations. The upward faff ir value adjustment represents a nonrecurring fair value
measurement based on observabla e price changes.

Note 20 – Acquisitions and Divestitures

WafWW eff r FabrFF

ication Plant in South Portland, Maine

On June 3, 2022, the Company completed the acquisition of onsemi's wafer fabrication facility and operations located in South
Portland, Maine ("SPFAB"). SPFAB was purchased to provide additional 200mm wafer fabrication capacity for analog product
s to
accelerate the Company's growth initiatives in the automotive and industrial end markets. This US-based facility, together with the
Company's existing wafer fabrication faff cilities in Asia and Europe, will further enhance the Company's global manufaff cturing operations.
The Company recorded the purchase of SPFAB as a business combination. Total consideration paid by the Company was $80.4 million
and was funded by exi
sting cash and advances under the revolving portion of our U.S. Credit Agreement. The SPFAB facility and assets
were wholly acquired, and there is no remaining minority interest. The goodwill is assigned to the standard semiconductor products
segment and will not be tax deductible. The Company also incurred acquisition costs of approximately $0.5 million that were recognized
low sets forth the fair value of the assets and liabilities recorded in the SPFAB
in selling, general and administrative expense. The table be
acquisition and the corresponding line item in which the item is recorded in our condensed consolidated balance sheet. Due to a lack of
data we are unabla e to provide historical financial pro forma data.

a

a

ff

ff

Assets
Spare parts and inventories
Prepaid expenses
Property, plant and equipment
Goodwill
Total assets purchased

Privately Held Wafer Design Company

ll

$

$

1,257
257
77,825
1,069
80,408

During July 2021, the Company acquired an interest in an early stage privately held fabless wafer design company by purchasing
$10.0 million of preferred stock and a $5.0 million convertible promissory note. As the investment in preferred stock does not have a
readily determinable fair value, it will be measured at cost less impairment, and adjusted to fair value if there are any observable price
changes for a
lue of the investment at December 31, 2022 was $10.0
million with no observable price changes occurring during the period. The promissory note is convertible into additional preferred stock,
has an interest rate of 3% and is due in July 2026.

n identical or similar investment of the same issuer. The carrying va

ff

rr

ManufMM

acff

turing Subsidiary Lr

ocated in China

In December 2021, the Company closed a transaction to sell a manufaff cturing subs
idiary in China for total consideration of
appr
oximately $41.5 million, which included a combination of cash and equity. The cash consideration consists of $15.2 million of
a
agreed upon cash and a $23.3 million working capital adjustment while the equity is valued at $3.1 million, which increases the
Company’s investment in the buyer to approximately 10%. The Company and the purchaser of the manufacturing facility have entered
into an ongoing agreement in which the purchaser will continue to provide wafer -foundry services, on a preferential basis to the
Company.

t

Management determined that the disposal group met the held-for-sale criteria and reclassified the car

rying value of the disposal
group to assets held-for-sale, which were previously included in prepaid expenses and other in the consolidated balance sheet. Upon
closing of the transaction, Management derecognized the amounts previously classified as held-for-sale and recorded a gain on the sale
of $9.5 million. The gain is recorded in other income in the Company's consolidated statement of income. Neither the buyer nor the
ing faff cility will be considered related parties after the transaction. The table below sets forth the major classes of assets and
manufacturt

ff

71

ities that were previously classified as held-for-sale on the consolidated balance sheet and the gain recognized in other income on

liabila
the consolidated statement of income:

Assets
Cash and cash equivalents
Accounts receivable, net
Inventories, net
Other current assets
Property, plant and equipment
Defeff rred income tax
Other long-term assets
Total assets disposed

ities

Liabila
Accounts payable
Accruerr d liabia lities and other
Other long-term liabili
Total liabia lities disposed
Net assets disposed

ties

a

$

$

$

8,936
16,347
5,415
1,387
5,598
3,198
4,807
45,688

5,025
4,913
2,471
12,409
33,279

Other InvII

estmtt ent

ff

In August 2021, the Company entered into an agreement to make an investment in Taiwan. The Company's investment is $5.4
million for 60% ownership of a company and i
s being consolidated into our consolidated financial statements. The purpose of the
investment is to engage in the development of power modules for the automotive markets. The investment received Taiwan government
a
appr

oval in October 2021, and the Company made the $5.4 million payment in October 2021.

LSC Acquisii ition

On November 30, 2020, the Company closed its previously announced acquisition of LSC, a Taiwan-based supplier of “green”
power-related discrete and analog semiconductor devices. The Company purchased LSC in order to include LSC’s “green” power-
related semiconductor devices that are designed for power saving and low power dissipation to serve the power supply market, and to
reacquire the 7,765,778 of the Company’s common shares owned by LSC, which was approximately 15% of our outstanding shares
prior to the close of such acquisition. The reacquired shares were treated as a settlement of a pre-existing relationship and as a transaction
separate and apart from the business combination along with the settlement of payables and receivables between the Company and LSC.
The reacquired shares are included in treasury stock on the Company’s balance sheet. There was no gain or loss on the settlement of the
payabla es and receivables between the Company and LSC.

The Company recorded the purchase of LSC as a business combination, with the Company owning 100% of LSC. LSC has been
consolidated into the operations of the Company. The purchase price per the Share Swap Agreement was 42.50 TWD per outstanding
LSC share. On November 30, 2020, the Company acquired the 307,371,139 outstanding shares of LSC for a total aggregate purchase
price of approximately $453.4 million and total consideration of $154.0 million after adjustments for the settlement of pre-existing
relationships. A portion of the LSC purchase price was funded by borrowings under the Company’s Credit Agreement.

Total consideration paid
Less: Settlement of pre-existing relationships

Reacquisition of Diodes stock owned by LSC
Net accounts receivable on LSC books owed by Diodes
Total amount of pre-existing relationship settled

Remaining consideration

$

$

453.4

(296.8)
(2.6)
(299.4)
154.0

The reacquired shares were treated as a settlement of a pre-existing relationship and as a transaction separate and apart from the
business combination along with the settlement of payables and receivables between Diodes and LSC. There was no gain or loss on the
settlement of the payables and receivables between the Company and LSC. The cash attributed to the reacquisition of the Diodes shares
is presented within the financing section of the statement of cash flows.

The table below sets forff

th the fair value of the LSC assets acquired and liabilities assumed based on relative fair value at the date
of acquisition, aftff er measurement period adjustments, and the corresponding line item in the Company’s consolidated balance sheet at
the date of acquisition. During the period frff om January 1, 2021 through November 30, 2021, measurement period a
djustments were
made to inventories, property, plant and equipment, income tax payable, and accrued liabilities and other. During the period, the
Company derecognized an estimated liability that was initially recognized on the opening balance sheet related to dividend payable
accrual of approximately $12.8 million, reduced the previously estimated amount of a social insurance liability and an estimated
inforff mation technology liabia lity by $1.5 million, and recognized an additional income tax payable related to the reacquired shares in the
oximately $10.7 million. The adjustments to inventory and property, plant, and equipment were a result of refinements
amount of appr

a

rr

r

72

rr

air value c

to the preliminary f
alculation in the amounts of $0.7 million and $4.8 million respectively. The Company also made
ff
adjustments to the preliminary deferred tax calculations as a result of the measurement period adjustments described above. U.S. GAAP
permits companies to complete the fiff nal determination of the fair values during the measurement period following the acquisition date.
The size and breadth of the LSC acquisition necessitated the use of this measurement period to adequately analyze and assess a number
of the factors used in e
stabla ishing the asset and liability fair values as of the acquisition date. The Company engaged a third party
valuation specialist to assist with the assessment of any intangible assets acquired as part of the LSC acquisition, and it was determined
that there were no intangible assets as a result of the LSC acquisition. The table below sets forth the faff ir value of the assets and liabilities
recorded in the acquisition and the corresponding line item in which the item is recorded in our condensed consolidated balance sheet
at the date of acquisition.

ff

Cash and cash equivalents
Accounts receivable
Inventories
Prepaid expenses and other current assets
Property, plant and equipment
Defeff rred income tax
Other long-term assets
Total assets acquired
Line of credit
Accounts payable
Accruerr d liabia lities and other
Income tax payable
Defeff rred tax liabilities
Other long-term liabili
Total liabia lities assumed
Non-controlling interest
Net assets acquired

ties

a

Original Preliminary
Value

Adjust

d ments

Final
Value

$

$

131,046
44,896
55,710
11,447
67,952
15,732
26,037
352,820
88,508
35,245
48,992
6,264
8,941
10,783
198,733
54
154,033

$

$

-
-
(714)
-
4,808
(1,412)

2,682
-
-
(14,297)
10,735
6,244
-
2,682
-
-

$

$

131,046
44,896
54,996
11,447
72,760
14,320
26,037
355,502
88,508
35,245
34,695
16,999
15,185
10,783
201,415
54
154,033

The folff

lowing unaudited pro forma summary presents consolidated information of the Company as if the acquisition and

consolidation of LSC had occurred on January 1, 2020:

rr

Net revenues
Net income
Net income attributable to common stockholders
Earnings per share - basic
Earnings per share - diluted

Twelve Months Ended
December 31, 2020

1,421,494
95,908
96,517
2.23
2.18

$
$
$
$
$

The unaudited pro forma consolidated results of operations do not purport to be indicative of the results that would have been
obtained if the above acquisition had actually occurred as of the dates indicated or of those results that may be obtained in the future.
The unaudited proforma consolidated results for the twelve months ended December 31, 2020, include adjustments that result in a
reduction to amortization and depreciation of $5.5 million, removal of sales to Diodes on the books of LSC and related cost of goods
sold of $12.4 million and $7.9 million, respectively, removal of LSC’s share of Diodes’ profits as a 15% shareholder of $13.1 million,
removal of $2.4 million of transaction costs, additional interest expense of $6.0 million, removal of impairment charges of $6.3 million,
removal of operations of On-Bright, and a tax impact of those adjustments of a reduction to tax expense of $18.6 million. LSC has been
conforff med to Diodes’ reporting calendar.

Savitech Acquisii ition

On February 5, 2020, the Company entered into an agreement to invest up to approximately $14.2 million to acquire at least 51%
of Savitech Corporation (“Savitech”), a fabless semiconductor design company located in Zhubei City, Taiwan. The Company made
the investment in two tranches. The fiff rst tranche of $5.6 million, which provided the Company with a 33.6% ownership of Savitech,
was made on March 4, 2020. The initial tranche was funded with cash on hand. The second tranche was also funded with cash on hand
and paid in the third quarter ended September 30, 2021, in the amount of $8.5 million which increased the Company’s ownership to
53% of Savitech.

The Company recorded the purchase of Savitech as a business acquisition and consolidates Savitech into its operations, based on
the voting model, with a non-controlling interest related to the interest the Company does not own in Savitech. The Company made its
investment in Savitech in order to increase the Company’s integrated circuit business. Total purchase consideration recorded was $14.2
million. The goodwill will not be tax deductible. The Company also incurred acquisition costs of approximately $0.1 million that were

73

recognized in selling, general and administrative expense. The table below sets forth the fair value of the assets and liabilities recorded
in the acquisition and the corresponding line item in which the item is recorded in our condensed consolidated balance sheet at the date
of acquisition (i(( n millions).

Cash and cash equivalents
Prepaid expenses and other
Goodwill
Intangible assets, net
Other long-term assets
Accruer d liabia lities and other
Noncontrolling interest

Note 21 – Subsequent Event

Privately Held Wafer Design Company

ll

$

6.2
0.7
13.9
6.1
0.4
10.2
11.8

As described in Note 20 above, the Company previously acquired an interest in an early stage privately held fabless wafer design
company. In February 2023, the Company entered into a term sheet under which the Company may invest an additional $17.9 million,
comprised of $13.9 million of preferred stock and $4.0 million as a convertible promissory note. The $17.9 million of additional
investment is subject to standard closing conditions.

74

INDEX TO EXHIBITS

Number

Description

Form

Date of First Filing

Exhibit
Number

Filed
Herewith

3.1

3.2

4.1

4.2

10.1*

10.2*

10.3*

10.4*

10.5*

10.6*

10.7*

10.8*

10.9

10.10*

10.11*

10.12*

10.13*

Certificff ate of Incorpor

r

ation, as amended

10-K February 20, 2018

rr

Amended By-laws of the Company, amended as
of January 6, 2016

8-K

January 11, 2016

Form of Certificate for Cff
value $0.66-2/3 per share

ommon Stock, par

Description of Securities Registered Pursuant to
Section 12 of the Securities Exchange Act of
1934

Stock Award Agreement dated as of September
22, 2009, between the Company and Keh-Shew
Lu

S-3

August 25, 2005

10-K February 12, 2020

rr

10-Q May 9, 2014

Confiff rmation Agreement dated April 1, 2013,
between the Company and Keh-Shew Lu

8-K

April 3, 2013

Employment Agreement dated as of July 21,
2015, between the Company and Keh-Shew Lu

8-K

July 27, 2015

Stock Unit Agreement, dated as of July 21, 2015,
between the Company and Keh-Shew Lu

8-K

July 27, 2015

Amendment No. 1 to Employment Agreement
dated as of February 22, 2017, between the
Company and Keh-Shew Lu.

8-K

February 27, 2017

rr

Form of Indemnification Agreement between the
Company and its directors and executive officers

8-K

September 2, 2005

10-K February 27, 2017

rr

Diodes Incorporated Second Amended and
Restated Deferred Compensation Plan effective
January 1, 2009

rr

First Amendment to the Diodes Incorporated
Second Amended and Restated Defeff rred
Compensation Plan effective June 1, 2013

Diodes Incorporated 2013 Equity Incentive Plan,
as amended and restated on May 3, 2017

S-8

August 17, 2017

Form of Incentive Stock Option Agreement for
the Diodes Incorpor
ated 2013 Equity Incentive
Plan

r

S-8

June 13, 2013

10-K February 27, 2017

rr

10.10

3.1

3.1

4.1

4.2

10.6

99.1

99.1

99.3

99.1

10.5

10.9

99.1

99.2

99.4

99.2

99.3

10.80

Form of Stock Unit Agreement for t
Incorporated 2013 Equity Incentive Plan

ff

he Diodes

10.11.1*

Form of Restricted Stock Unit Agreement

10.11.2*

Form of Performance Stock Unit Agreement

Form of Nonstatutory Stock Option Agreement
for the Diodes Incorpor
Incentive Plan, as amended (Domestic Version)

ated 2013 Equity

r

S-8

June 13, 2013

8-K

8-K

February 27, 2017

rr

February 27, 2017

10-K

February 27, 2014

rr

Form of Nonstatutory Stock Option Agreement
for the Diodes Incorpor
r
Incentive Plan (International Version)

ated 2013 Equity

10-K

February 27, 2014

rr

10.81

75

10.14*

10.15*

10.16*

10.17*

Form of Unit Stock Agreement for t
Incorporated 2013 Equity Incentive Plan, as
amended (Domestic Version)

he Diodes

ff

Form of Stock Unit Agreement for t
Incorporated 2013 Equity Incentive Plan
(International Version)

ff

he Diodes

10-K

February 27, 2014

rr

10.82

10-K

February 27, 2014

rr

10.83

Form of Stock Unit Agreement (Substitute forff
Pericom Semiconductor Corporation Domestic
Existing RSUs and Options)

Form of Stock Unit Agreement (Substitute forff
Pericom Semiconductor Corporation
International Existing RSUs and Options)

S-8

June 30, 2016

S-8

June 30, 2016

10.18

Diodes Incorpor

rr

ated 2022 Equity Incentive Plan

S-8 May 26, 2022

10.18.1

Diodes Incorporated 2022 Equity Incentive Plan
– Form of Stock Unit Agreement

S-8 May 26, 2022

99.2

99.3

99.1

99.2

10.19

10.19.1

10.20

10.20.1

10.21

10.22

10.23

10.24

10.25

Lease Agreement dated as of September 30,
2003, between Shanghai Kaihong Electronic Co.,
Ltd. and Shanghai Ding Hong Electronic
Equipment, LTD.

10-Q August 9, 2004

10.52

rr

o the Lease Agreement between

Supplementary t
Shanghai Kaihong Electronic Co. Ltd., and
Shanghai Ding Hong Electronic Co., Ltd.

Lease Agreement dated as of June 28, 2004,
between Diodes Shanghai Co., Ltd. and
Shanghai Yuan Hao Electronic Co., Ltd.

Supplementary Arr
greement dated December 31,
2007, between Shanghai Kai Hong Technology
Co., Ltd. and Shanghai Yuan Hao Electronic
Co., Ltd.

Wafeff r Purchase Agreement dated January 10,
2006, between Anachip Corporation and Lite-On
Semiconductor Corporation

rr

o the Lease Agreement dated

Supplementary t
September 5, 2004, between Shanghai Kaihong
Electronic Co., Ltd. and Shanghai Ding Hong
Electronic Co., Ltd.

rr

o the Lease Agreement dated

Supplementary t
June 28, 2004, between Diodes Shanghai
Company Limited and Shanghai Yuan Hao
Electronic Co., Ltd.

10-Q August 9, 2004

10.58

10-Q August 9, 2004

10.57

10-K February 29, 2008

rr

10.53

8-K

January 12, 2006

2.1

10-Q May 10, 2006

10.14

10-Q May 10, 2006

10.15

Agreement on Application, Construction and
Transfeff r of Power Facilities dated as of March
15, 2006, between the Company and Shanghai
Yahong Electronic Co., Ltd.

10-Q May 10, 2006

10.16

rr

Supplement dated January 1, 2007 t
Agreement on Disposal of Waste and Scraps,
between Shanghai Kaihong Electronic Co., Ltd.
and Shanghai Ding Hong Electronic Co., Ltd.

o the Lease

10-K February 29, 2008

rr

10.51

10.26

Accommodation Building Fourth and Fifth Floor
Lease Agreement dated December 31, 2007,

10-K February 29, 2008

rr

10.54

76

between Diodes Shanghai Co., Ltd. (a/k/a
Shanghai Kaihong Technology) and Shanghai
Ding Hong Electronic Co., Ltd.

Fourth Floor of the Accommodation Building
Lease Agreement dated January 1, 2008,
between Diodes Shanghai Co., Ltd. (a/k/a
Shanghai Kaihong Technology) and Shanghai
Ding Hong Electronic Co., Ltd.

Distributorship Agreement dated November 1,
2008, between Diodes Shanghai Co., Ltd. (a/k/a
Shanghai Kaihong Technology) and Shanghai
Keylink Logistic Co., Ltd.

Lease Facility Safeff ty Management Agreement
dated December 31, 2008, between Diodes
Shanghai Co., Ltd. (a/k/a Shanghai Kaihong
Technology) and Shanghai Yuan Howe
Electronic Co., Ltd.

Consulting Agreement dated January 1, 2009,
between the Company and Keylink International
(B.V.I.) Co., Ltd.

Power Facility Construction Agreement dated
October 29, 2009, between Diodes Shanghai Co.,
Ltd. (a/k/a Shanghai Kaihong Technology) and
Shanghai Yuan Hao Electronic Co., Ltd.

Third Floor of the Accommodation Building
Lease Agreement dated April 12, 2010, between
Diodes Shanghai Co., Ltd. (a/k/a Shanghai
Kaihong Technology) and Shanghai Ding Hong
Electronic Co., Ltd.

Second Floor of the Accommodation Building
Lease Agreement dated September 1, 2010,
between Diodes Shanghai Co., Ltd. (a/k/a
Shanghai Kaihong Technology) and Shanghai
Ding Hong Electronic Company, Ltd.

Investment Cooperation Agreement effective as
of September 10, 2010, between Diodes Hong
Kong Holding Company Limited and the
Management Committee of the Chengdu Hi-
Tech Industrial Development Zone

greement to the Investment

Supplementary Arr
Cooperation Agreement effff eff ctive as of
September 10, 2010, between Diodes Hong
Kong Holding Company Limited and the
Management Committee of the Chengdu Hi-
Tech Industrial Development Zone

Power Facility Expansion Construcr
dated January 24, 2011, between Diodes
Shanghai Co., Ltd. (a/k/a Shanghai Kaihong
Technology) and Shanghai Yuan Howe
Electronics Company, Ltd.

tion Contract

First Floor of the Accommodation Building
Agreement dated June 1, 2011, between Diodes
Shanghai Co., Ltd. (a/k/a Shanghai Kaihong

10.27

10.28

10.29

10.30

10.31

10.31.1

10.32

10.33

10.34

10.35

10.36

10-Q August 11, 2008

10.5

10-K February 26, 2009

rr

10.83

10-K February 26, 2009

rr

10.84

10-Q May 8, 2009

10.1

10-K March 1, 2010

10.97

10-Q May 7, 2010

10.3

10-Q November 9, 2010

10.1

8-K

September 16, 2010

99.1

8-K

September 16, 2010

99.2

10-K February 28, 2011

rr

10.113

10-Q November 9, 2011

10.1

77

10.37

10.38

10.39

10.40

10.41

10.42

10.43

10.44

10.45

10.46

10.47

Technology) and Shanghai Ding Hong
Electronic Company, Ltd.

uilding Lease

Third Floor of the Dormitory Brr
Agreement dated July 1, 2011, between Diodes
Shanghai Co., Ltd. (a/k/a Shanghai Kaihong
Technology) and Shanghai Ding Hong
Electronic Company, Ltd.

rr

Supplement Agreement to the Power Facility
Construction Application Agreement dated
March 21, 2011, between Diodes Shanghai Co.,
Ltd. (a/k/a Shanghai Kaihong Technology) and
Shanghai Yuan Hao Electronic Company, Ltd.

Plating Process Agreement dated December 31,
2007, among Shanghai Kaihong Electronic Co.,
Ltd., Diodes Shanghai Co., Ltd. (a/k/a Shanghai
Kaihong Technology), Diodes Shanghai,
Shanghai Ding Hong Electronic Co., Ltd. and
Shanghai Micro-Surface Co., Ltd.

ation

rr

greement dated as of

Second Supplementary Arr
January 23, 2013, to the Investment Cooper
Agreement effective as of September 10, 2010,
among Diodes Hong Kong Holding Company
Limited, Diodes (Shanghai) Investment
Company Limited, Diodes Technology
(Chengdu) Company Limited, and the
Management Committee of the Chengdu Hi-
Tech Industrial Development Zone

10-Q November 9, 2011

10.2

10-Q August 9, 2011

10.1

10-K February 29, 2008

rr

10.52

10-K February 27, 2013

rr

10.75

Supplement Agreement to Lease Agreement
dated September 2013, between Shanghai
Kaihong Electronic Co., Ltd and Shanghai Ding
Hong Electronic Co., Ltd.

Amendment to Dinghong Building Lease
Agreements between Shanghai Kaihong
Electronic Co. Ltd. and Shanghai Dinghong
Electronic Co., Ltd.

Termination Agreement to Dinghong Male
Dorm Building Lease Agreement between
Shanghai Kaihong Electronic Co. Ltd. and
Shanghai Dinghong Electronic Co., Ltd.

Termination Agreement to Dinghong Female
Dorm Building Lease Agreement between
Shanghai Kaihong Electronic Technology Co.
Limited and Shanghai Dinghong Electronic Co.
Ltd.

Power Account Transfer Agreement between
Shanghai Kaihong Technology Company
Limited and Shanghai YuanHao Co.

Procurement Agreement dated May 3, 2013,
between Diodes Taiwan Inc. and Lite-On
Technology Corporation

Amended Consulting Agreement dated as of
January 1, 2015, between Diodes Incorporated
and Keylink International (B.V.I) Co., Ltd.

rr

10-Q November 12, 2013

10.6

10-Q November 6, 2018

10.2

10-Q November 6, 2018

10.4

10-Q November 6, 2018

10.5

10-Q November 6, 2018

10.6

10-Q August 8, 2013

10.2

10-K March 2, 2015

10.78

78

10.48

10.49

10.50

10.51

10.52

10.53

10.54

10.55

10.56

10.57

10.58

10.59.1

Chemical Warehouse Lease Agreement dated
November 1, 2014, between Shanghai Kaihong
Electronic Co., Ltd. and Shanghai Ding Hong
Electronic Co., Ltd.

Chemical Warehouse Lease Agreement dated
September 22, 2015, between Shanghai Kaihong
Technology Co., Ltd. and Shanghai Yuan Hao
Electronic Co., Ltd.

Amendment to Yuanhao Building Lease
Agreements between Shanghai Kaihong
Technology Company Limited and Shanghai
Yuanhao Electronic Co. Ltd

Property Lease Safeff ty Agreement dated July
2016, between Zetex (Chengdu) Electronics Ltd.
and Chengdu Yaguang Electronic Co., Ltd.

Diodes Zetex Pension Scheme Recovery Plan
dated February 22, 2017, between Trustees of
the Diodes Zetex Pension Scheme and Diodes
Zetex Limited

Diodes Zetex Pension Scheme Schedule of
Contributions dated Februarr
Trusr
and Diodes Zetex Limited

tees of the Diodes Zetex Pension Scheme

rr
ry 22, 2017, between

Framework Agreement dated January 16, 2017,
among Diodes Zetex Limited, Diodes Zetex
Semiconductors Limited, the Company, HR
Trustees Limited and Trustees

Guarantee dated March 26, 2012, among Diodes
Zetex Semiconductors Limited, Diodes Zetex
Limited, HR Trustees Limited and Trusrr

tees

Diodes Zetex Pension Scheme Information
Protocol dated April 10, 2012, among Diodes
Zetex Limited, Diodes Zetex Semiconductors
Limited, the Company, HR Trustees Limited and
Trustees

Legal Charge dated March 26, 2012, among
Zetex Semiconductors Limited, HR Trustees
Limited and Trustees

Amended and Restated Credit Agreement dated
October 26, 2016, among the Company, Diodes
International B.V., Diodes Holding B.V., Diodes
Investment Company, Diodes FabTech Inc.,
Diodes Holdings UK Limited, Diodes Zetex
Limited, Pericom Semiconductor Corporation,
Bank of America, N.A., as Administrative
Agent, Swing Line Lender and L/C Issuer, and
the other Lenders party thereto

rr
ry 13, 2017, among the parties to the

Amendment No. 1 and Limited Waiver dated
Februarr
Amended and Restated Credit Agreement dated
October 26, 2016 (Exhibit 10.87 above)

10-K March 2, 2015

10.79

10-Q November 6, 2015

10.1

10-Q November 6, 2018

10.3

10-Q August 9, 2016

99.1

10-K February 27, 2017

rr

10.78

10-K February 27, 2017

rr

10.79

10-K February 27, 2017

rr

10.80

10-Q August 9, 2012

10-Q August 9, 2012

10.5

10.6

10-Q August 9, 2012

10.7

8-K

November 1, 2016

10.1

8-K

February 14, 2017

rr

10.1

10.59.2

Amendment No. 2 dated August 24, 2017,
among the parties to the Amended and Restated

10-K February 20, 2018

rr

10.80.2

79

10.60

10.61

10.62*

10.63*

10.64

10.65

10.66

10.67

10.68

10.69

10.70

10.71

10.72

10.73

Credit Agreement dated October 26, 2016
(Exhibit 10.87 above)

Consent to Credit Agreement

Consent and Amendment No. 3 to Amended and
Restated Credit Agreement dated December 27,
2018, among the parties to the Amended and
Restated Credit Agreement dated October 26,
)
2016 (Exhibit 87 above

a

10-Q November 6, 2018

10-K February 21, 2019

rr

10.1

10.89

Transition agreement between Diodes
Incorporated and Richard White

8-K March 6, 2019

Amended Transition Agreement between Diodes
Incorporated and Richard White

8-K/A April 1, 2019

10.1

10.1

10.1

10.1

2.1

10-Q May 7, 2019

10-Q August 5, 2019

8-K

August 9, 2019

10-K February 22, 2021

rr

10.95

10-K February 22, 2021

rr

10.96

10-K February 22, 2021

rr

10.97

8-K

January 26, 2021

10.1

Consent to Credit Agreement

Consent to Credit Agreement

Share Swap Agreement between Diodes
Incorporated and Lite-On Semiconductor Corp.r
dated as of August 8, 2019

First Amendment to Second Amended and
Restated Credit Agreement dated as of
September 21, 2020

Consent Agreement with Respect to Second
Amended and Restated Credit Agreement and
Foreign Security Agreements dated as of
November 2, 2020

Consent and Amendment No. 2 to Second
Amended and Restated Credit Agreement dated
as of November 17, 2020. Portions of this
Exhibit have been omitted

rr

Facility Agreement, dated January 22, 2021, by
and among Diodes Hong Kong Limited, The
Hongkong and Shanghai Banking Corporation
Limited, as Arranger, the financial institutions
listed in Schedule 1 thereto, The Hongkong and
Shanghai Banking Corporation Limited, as
Agent, and The Hongkong and Shanghai
Banking Corporation Limited, as Security Agent.
Portions of this Exhibit have been omitted.

t

Hong Kong Debenturt e, dated January 22, 2021,
by and between Diodes Hong Kong Limited and
The Hongkong and Shanghai Banking
Corporation Limited, as Security Agent.

8-K

January 26, 2021

10.2

rff om Diodes
Letter, dated January 22, 2021, f
Incorporated to The Hongkong and Shanghai
Banking Corpor

ation.

rr

rr

Amendment No. 3 to Second Amended and
Restated Credit Agreement, dated as of March 4,
2021, by and among Diodes Incorporated,
Diodes Holdings UK Limited, certain
subsidiaries of Diodes Incorporated identififf ed
therein, the Lenders identififf ed therein, and Bank
of America, N.A.

8-K

January 26, 2021

10.3

10-Q May 6, 2021

10.4

80

10.74

10.75

10.76

14**

21

23.1

31.1

31.2

32.1***

32.2***

101.INS

Amendment No. 4 to Second Amended and
Restated Credit Agreement, Consent and
Incremental Term Assumption Agreement.

Amendment No. 5 to Second Amended and
Restated Credit Agreement, Consent and
Incremental Term Assumption Agreement.

Amendment No. 6 to Second Amended and
Restated Credit Agreement, Consent and
Incremental Term Assumption Agreement.

Code of Ethics for Cff
Senior Financial Offff iff cers

hief Executive Offff iff cer and

Subsidiaries of the Registrant

Consent of Independent Registered Public
Accounting Firm

Certificff ation Pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934, adopted
pursuant to Section 302 of the Sarbanes- Oxley
Act of 2002

Certificff ation Pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934, adopted
pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002

Certificff ation Pursuant to 18 U.S.C. adopted
pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002

Certificff ation Pursuant to 18 U.S.C. adopted
pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002

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101.SCH Inline XBRL Taxonomy Extension Schema

101.CAL Inline XBRL Taxonomy Extension Calculation

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101.LAB Inline XBRL Taxonomy Extension Labels

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101.DEF

Inline XBRL Taxonomy Extension Definition
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Inline XBRL Taxonomy Extension Presentation
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104

*

Cover Page Interactive Data File, formatted in
Inline XBRL

t

Constitute management contracts, or
compensatory plans or arrangements, which are
required to be fiff led pursuant to Item 601 of
Regulation S-K.

10-K February 18, 2022

rr

10.79

10-K February 18, 202

rr

2

10.80

8-K

January 4, 2022

10.1

81

X

X

X

X

X

X

X

X

X

X

X

X

X

**

***

Provided in the Corporate Governance portion of
the Investor Relations section of the Company’s
website at http://www.diodes.com

A certificff ation furff nished pursuant to Item 601 of
the Regulation S-K will not be deemed “filed”
for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the
“Exchange Act”), or otherwise subject to the
liabila
ity of that section. Such certififf cation will
not be deemed to be incorporated by reference
into any filing under the Securities Act of 1933,
as amended, or the Exchange Act, except to the
extent that the registrant specifically incorporates
ff
it by reference.

PLEASE NOTE: It is inappropriate for investors to assume the accuracy of any covenants, representations or warranties that may be
contained in agreements or other documents filed as exhibits to this Annual Report on Form 10-K. In certain instances the disclosure
schedules to such agreements or documents contain information that modifies, qualifies and creates exceptions to the representations,
warranties and covenants. Moreover, some of the representations and warranties may not be complete or accurate as of a particular date
because they are subject to a contractual standard of ma
teriality that is different from those generally applicable to stockholders or were
used for the purpos
e of allocating risk among the parties rather than establishing certain matters as facts. Accordingly, you should not
rely on the representations and warranties as characterizations of the actual state of facts at the time they were made or otherwise.

r

ff

t

82

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this

report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

DIODES INCORPORATED (Registrant)

By: /s/ Keh-Shew Lu
KEH-SHEW LU
President and Chief Executive Offff iff cer
(Principal Executive Officer)

By: /s/ Brett R. Whitmire
Brett R. Whitmire
Chief Financial Offff iff cer
(Principal Financial and Accounting Officer)

February 10, 2023

February 10, 2023

KNKK OW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and
nts Dr. Keh-Shew Lu, President and Chief Executive Officer, and Brett R. Whitmire, Chief Financial Officer, his true and lawful
a
appoi
attorneys-in-faff ct and agents, with full power of substitution, to sign and execute on behalf of the undersigned any and all amendments
to this report, and to perforff m any acts necessary in order to file the same, with all exhibits thereto and other documents in connection
therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do
and perforff m each and every act and thing requested and necessary to be done in connection therewith, as fully to all intents and purposes
as he might or could do in person, hereby ratifyiff ng and confiff rming all that said attorney-in-fact and agents, or their or his or her
substitutt es, shall do or cause to be done by virtue he

reof.

t

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons

on behalf of the registrant and in the capacities indica

a

ted on February 10, 2023.

/s/ Keh-Shew Lu
KEH-SHEW LU
Chairman, President and Chief Executive Offff iff cer
(Principal Executive Officer)

/s/ Brett R. Whitmire
BRETT R. WHITMIRE
Chief Financial Offff iff cer
(Principal Financial Officer)

/s/ Keh-Shew Lu
KEH-SHEW LU
Chairman of the Board of Directors

/s/ Michael K. C. Tsai
MICHAEL K. C. TSAI
Lead Director

/s/ Angie Chen Button
ANGIE CHEN BUTTON
Director

/s/ Warren Chen
WARREN CHEN
Director

/s/ Michael R. Giordano
MICHAEL R. GIORDANO
Director

/s/ Peter M. Menard
PETER M. MENARD
Director

/s/ Christina Wen-Chi Sung
CHRISTINA WEN-CHI SUNG
Director

83

SUBSIDIARIES OF THE REGISTRANT

Incorporated
Location

Subsidiary Name
BCD Shanghai Micro-Electronics Company Limited ............ China
Canyon Semiconductor Inc. ................................................... Taiwan
Diodes (Shanghai) Investment Company Limited.................. China
Diodes Electronic (Shenzhen) Company Limited .................. China
Diodes Fast Analog Solutions Limited ................................... United Kingdom
Diodes Holdings UK Limited ................................................. United Kingdom
Diodes Hong Kong Limited.................................................... Hong Kong
Diodes Investments Taiwan Co., Ltd...................................... Taiwan
Diodes Japan K.K. .................................................................
Japan
Diodes Kaihong (Shanghai) Company Limited...................... China
Diodes Korea Inc .................................................................... Korea
Diodes Semiconductors GB Limited ...................................... United Kingdom
Diodes Singapore Pte. Ltd. .................................................... Singapore
Diodes Taiwan S.a. r.l............................................................. Luxembourg
Diodes Taiwan S.a. r.l., Hsinchu Branch (Luxembourg)........ Taiwan
Diodes Taiwan S.a. r.l., Keelung Branch (Luxembourg) ....... Taiwan
Diodes Taiwan S.a. r.l., Taiwan Branch ................................ Taiwan
Diodes Technologies Taiwan Co., Ltd. ................................. Taiwan
Diodes Technology (Chengdu) Company Limited................. China
Diodes US Manufacturing Incorporated................................. Unites States
Diodes Zetex GmbH ............................................................... Germany
Diodes Zetex Limited ............................................................. United Kingdom
Diodes Zetex Neuhaus GmbH ................................................ Germany
Diodes Zetex Semiconductors Limited................................... United Kingdom
DiodSent Green Technology Co., Ltd .................................... Taiwan
Dyna Image Corp. .................................................................. Philippines
Dyna Image Corporation ........................................................ Taiwan
Dyna International Co., Ltd. .................................................. British Virgin Islands
Dyna International Holding Co., Ltd. .................................... British Virgin Islands
Eris Technology Corpor
Lite-On Microelectronics (Wuxi) Co., Ltd. ........................... China
Lite-On Semiconductor (Wuxi) Co., Ltd. .............................. China
Lite-On Semiconductor Corporation ..................................... Taiwan
Lite-On Semiconductor HK Limited ..................................... Hong Kong
Lyra Semiconductor Incorporated ......................................... Taiwan
My-Semi Inc. .......................................................................... Taiwan
Pericom Technology (Shanghai) Company Limited .............. China
Pericom Technology (Yangzhou) Corporation....................... China
PSE Technology (Shandong) Corporation.............................. China
PSE Technology Corporation ................................................. Taiwan
Savitech Corp. ........................................................................ Taiwan
Diodes (Shanghai) Investment Co. Ltd................................... China
Diodes Kaihong (Shanghai) Company Limited...................... China
Shanghai Kaihong Electronic Company Limited. .................. China
Shanghai Kaihong Technology Company Limited................. China
Shanghai Seeful Electronic Co., Ltd. ..................................... China
Smart Power Holdings Group Co., Ltd. ................................. British Virgin Islands
TF Semiconductor Solutions, Inc ........................................... Delaware
WBG Power Systems (Cayman) Co., Ltd. ............................ Cayman Islands
WBG Power Systems (Hong Kong) Co., Ltd. ....................... Hong Kong
Yea Shin Technology Co., Ltd. ............................................. Taiwan

ation.................................................. Taiwan

r

Exhibit 21

Percentage
Owned

100%
55.34%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
60%
100%
68.03%
100%
100%
51.07%
100%
100%
100%
100%
50.01%
62.50%
100%
100%
100%
100%
55.56%
100%
100%
95%
95%
100%
100%
56.91%
65%
100%
100%

Holding Company (1)
or Subsidiary (2)
2
2
1
2
2
1
1
1
2
2
2
2
2
1
2
2
2
1
2
2
2
2
2
2
2
2
2
1
1
2
2
2
2
1
2
2
2
2
2
2
2
2
2
2
2
2
1
2
1
2
2

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by refeff rence in the following Registration Statements of Diodes Incorporated of our
report dated February 10, 2023, related to the consolidated financial statements of Diodes Incorporated and
Subsidiaries (the “Company”) and the effectiveness of internal control over financial reporting of the Company
a
appe

aring in this Annual Report on Form 10-K for the year ended December 31, 2022:

•

•

Registration Statement on Form S-8 (No. 333-265229) pertaining to the Diodes Incorporated 2022
Equity Incentive Plan.

Registration Statements on Form S-8 (No. 333-189298, No. 333-212327 and No. 333-220019)
pertaining to the Diodes Incorporated 2013 Equity Incentive Plan.

/s/ Moss Adams LLP

Los Angeles, California
February 10, 2023

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Keh-Shew Lu, certify t

ff

hat:

1. I have reviewed this Annual Report on Form 10-K of Diodes Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a materi
al fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the
period covered by this report;

r

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifyiff ng offff icff er(s) and I are responsible for establishing and maintaining disclosure controls and procedures
(as defiff ned in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
RulRR es 13a-15(f) aff

nd 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent
functions):

ff

(a) All signififf cant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial
information; and

ff

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.

/s/ Keh-Shew Lu
Keh-Shew Lu
Chief Executive Offff icer
rr
Date: February 10, 2023

ff

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Brett R. Whitmire, certify t

ff

hat:

1.I have reviewed this Annual Report on Form 10-K of Diodes Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a materi
al fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the
period covered by this report;

r

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifyiff ng offff icff er(s) and I are responsible for establishing and maintaining disclosure controls and procedures
(as defiff ned in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
RulRR es 13a-15(f) aff

nd 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent
functions):

ff

(a) All signififf cant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial
information; and

ff

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.

/s/ Brett R. Whitmire
Brett R. Whitmire
Chief Financial Officer
rr
Date: February 10, 2023

CERTIFICATION PURSUANT TO 18 U.S.C. 1350 ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY
ACT OF 2002

The undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that, to his knowledge, the Annual Report on Form 10-K for the twelve-month period ended December 31, 2022, of Diodes
Incorpor
ated (the “Company”) fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934,
rr
as amended, and that the inforff mation contained in such Annual Report faff irly presents, in all material respects, the financial condition
and results of operations of the Company as of, and for, the periods presented in such report.

Exhibit 32.1

/s/ Keh-Shew Lu
Keh-Shew Lu
Chief Executive Offff icer
rr
Date: February 10, 2023

ff

A signed original of this written statement required by Section 906 has been provided to Diodes Incorporated and will be retained by
Diodes Incorpor

ated and furnished to the Securities and Exchange Commission or its staff upon request.

r

CERTIFICATION PURSUANT TO 18 U.S.C. 1350 ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY
ACT OF 2002

The undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that, to his knowledge, the Annual Report on Form 10-K for the twelve-month period ended December 31, 2022, of Diodes
Incorpor
ated (the “Company”) fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934,
rr
as amended, and that the inforff mation contained in such Annual Report faff irly presents, in all material respects, the financial condition
and results of operations of the Company as of, and for, the periods presented in such report.

Exhibit 32.2

/s/ Brett R. Whitmire
Brett R. Whitmire
Chief Financial Offff iff cer
rr
Date: February 10, 2023

A signed original of this written statement required by Section 906 has been provided to Diodes Incorporated and will be retained by
Diodes Incorpor

ated and furnished to the Securities and Exchange Commission or its staff upon request.

r

Additional Information
CONSOLIDATED RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME
(unaudited)

(cid:21)(cid:19)(cid:21)(cid:21)

(cid:11)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:82)(cid:88)(cid:86)(cid:68)(cid:81)(cid:71)(cid:86)(cid:15)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:83)(cid:87)(cid:3)(cid:83)(cid:72)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:71)(cid:68)(cid:87)(cid:68)(cid:12)
(cid:21)(cid:19)(cid:21)(cid:20)
(cid:21)(cid:19)(cid:21)(cid:19)

(cid:21)(cid:19)(cid:20)(cid:28)

(cid:21)(cid:19)(cid:20)(cid:27)

(cid:42)(cid:36)(cid:36)(cid:51)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:11)(cid:79)(cid:82)(cid:86)(cid:86)(cid:12)(cid:3)(cid:16)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:86)(cid:87)(cid:82)(cid:70)(cid:78)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:86)(cid:3)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:22)(cid:22)(cid:20)(cid:15)(cid:21)(cid:27)(cid:22)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:21)(cid:21)(cid:27)(cid:15)(cid:26)(cid:25)(cid:22)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:28)(cid:27)(cid:15)(cid:19)(cid:27)(cid:27)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:24)(cid:22)(cid:15)(cid:21)(cid:24)(cid:19)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:19)(cid:23)(cid:15)(cid:19)(cid:21)(cid:20)

(cid:42)(cid:36)(cid:36)(cid:51)(cid:3)(cid:72)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:11)(cid:79)(cid:82)(cid:86)(cid:86)(cid:12)(cid:3)(cid:83)(cid:72)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:16)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:86)(cid:87)(cid:82)(cid:70)(cid:78)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:86)
(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:39)(cid:76)(cid:79)(cid:88)(cid:87)(cid:72)(cid:71)(cid:3)

(cid:36)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:81)(cid:70)(cid:76)(cid:79)(cid:72)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:11)(cid:79)(cid:82)(cid:86)(cid:86)(cid:12)(cid:3)(cid:16)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:86)(cid:87)(cid:82)(cid:70)(cid:78)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:86)

(cid:87)(cid:82)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:16)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:86)(cid:87)(cid:82)(cid:70)(cid:78)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:86)(cid:15)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:68)(cid:91)(cid:29)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:26)(cid:17)(cid:21)(cid:19)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:24)(cid:17)(cid:19)(cid:19)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:17)(cid:27)(cid:27)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:21)(cid:17)(cid:28)(cid:25)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:21)(cid:17)(cid:19)(cid:23)

(cid:36)(cid:80)(cid:82)(cid:85)(cid:87)(cid:76)(cid:93)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:16)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:87)(cid:68)(cid:81)(cid:74)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:21)(cid:15)(cid:26)(cid:24)(cid:22)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:22)(cid:15)(cid:21)(cid:23)(cid:21)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:22)(cid:15)(cid:21)(cid:26)(cid:19)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:23)(cid:15)(cid:26)(cid:26)(cid:28)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:24)(cid:15)(cid:19)(cid:22)(cid:21)

(cid:36)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:16)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:23)(cid:27)(cid:19)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:21)(cid:15)(cid:21)(cid:21)(cid:24)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:21)(cid:15)(cid:22)(cid:25)(cid:25)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:15)(cid:22)(cid:20)(cid:23)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:44)(cid:81)(cid:86)(cid:88)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:89)(cid:72)(cid:85)(cid:92)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:80)(cid:68)(cid:81)(cid:88)(cid:73)(cid:68)(cid:70)(cid:87)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:73)(cid:68)(cid:70)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:11)(cid:21)(cid:15)(cid:27)(cid:26)(cid:24)(cid:12)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:47)(cid:54)(cid:38)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:11)(cid:22)(cid:15)(cid:21)(cid:24)(cid:26)(cid:12)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:15)(cid:24)(cid:28)(cid:20)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:11)(cid:20)(cid:15)(cid:26)(cid:20)(cid:23)(cid:12)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:47)(cid:82)(cid:86)(cid:86)(cid:3)(cid:11)(cid:74)(cid:68)(cid:76)(cid:81)(cid:12)(cid:3)(cid:82)(cid:81)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:80)(cid:68)(cid:81)(cid:88)(cid:73)(cid:68)(cid:70)(cid:87)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:86)(cid:88)(cid:69)(cid:86)(cid:76)(cid:71)(cid:76)(cid:68)(cid:85)(cid:92)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:24)(cid:26)(cid:24)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:11)(cid:28)(cid:15)(cid:23)(cid:23)(cid:25)(cid:12)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:53)(cid:72)(cid:86)(cid:87)(cid:85)(cid:88)(cid:70)(cid:87)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)

(cid:36)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:16)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:81)(cid:74)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)

(cid:37)(cid:82)(cid:68)(cid:85)(cid:71)(cid:16)(cid:80)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)

(cid:47)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)(cid:3)(cid:76)(cid:81)(cid:86)(cid:83)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:73)(cid:72)(cid:72)(cid:86)

(cid:42)(cid:68)(cid:76)(cid:81)(cid:3)(cid:82)(cid:81)(cid:3)(cid:79)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)

(cid:47)(cid:82)(cid:86)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:76)(cid:85)(cid:80)(cid:72)(cid:81)(cid:87)

(cid:50)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:3)(cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:27)(cid:20)(cid:26)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:21)(cid:15)(cid:19)(cid:19)(cid:28)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:28)(cid:23)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:26)(cid:15)(cid:22)(cid:22)(cid:20)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:15)(cid:22)(cid:23)(cid:26)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:11)(cid:22)(cid:22)(cid:25)(cid:12)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:11)(cid:20)(cid:28)(cid:15)(cid:21)(cid:19)(cid:20)(cid:12)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:15)(cid:21)(cid:27)(cid:22)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:16)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:21)(cid:15)(cid:19)(cid:20)(cid:23)

(cid:36)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:16)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:86)(cid:87)(cid:82)(cid:70)(cid:78)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:86)(cid:3)(cid:11)(cid:49)(cid:82)(cid:81)(cid:16)(cid:42)(cid:36)(cid:36)(cid:51)(cid:12)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:22)(cid:22)(cid:27)(cid:15)(cid:28)(cid:24)(cid:28)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:21)(cid:22)(cid:26)(cid:15)(cid:20)(cid:28)(cid:21)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:21)(cid:21)(cid:15)(cid:25)(cid:28)(cid:26)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:24)(cid:20)(cid:15)(cid:19)(cid:27)(cid:28)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:20)(cid:21)(cid:20)(cid:15)(cid:21)(cid:25)(cid:20)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:39)(cid:76)(cid:79)(cid:88)(cid:87)(cid:72)(cid:71)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:86)(cid:3)(cid:88)(cid:86)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:88)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:72)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:83)(cid:72)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:23)(cid:25)(cid:15)(cid:19)(cid:22)(cid:25)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:23)(cid:24)(cid:15)(cid:26)(cid:27)(cid:20)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:24)(cid:21)(cid:15)(cid:20)(cid:22)(cid:22)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:24)(cid:20)(cid:15)(cid:27)(cid:25)(cid:19)

(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:24)(cid:19)(cid:15)(cid:28)(cid:22)(cid:24)

(cid:36)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:72)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:83)(cid:72)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:16)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:86)(cid:87)(cid:82)(cid:70)(cid:78)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:86)(cid:3)(cid:11)(cid:49)(cid:82)(cid:81)(cid:16)(cid:42)(cid:36)(cid:36)(cid:51)(cid:12)
(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:39)(cid:76)(cid:79)(cid:88)(cid:87)(cid:72)(cid:71)(cid:3)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:26)(cid:17)(cid:22)(cid:25)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:24)(cid:17)(cid:20)(cid:27)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:21)(cid:17)(cid:22)(cid:24)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:21)(cid:17)(cid:28)(cid:20)

(cid:7)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:21)(cid:17)(cid:22)(cid:27)

ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE

(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:83)(cid:72)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:70)(cid:68)(cid:79)(cid:70)(cid:88)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:88)(cid:86)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:79)(cid:72)(cid:86)(cid:3)(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:68)(cid:70)(cid:70)(cid:72)(cid:83)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)
(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3)(cid:11)(cid:179)(cid:42)(cid:36)(cid:36)(cid:51)(cid:180)(cid:12)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:80)(cid:68)(cid:78)(cid:72)(cid:86)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:42)(cid:36)(cid:36)(cid:51)(cid:3)(cid:80)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:76)(cid:87)(cid:3)(cid:73)(cid:72)(cid:72)(cid:79)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:81)(cid:72)(cid:70)(cid:72)(cid:86)(cid:86)(cid:68)(cid:85)(cid:92)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:79)(cid:79)(cid:82)(cid:90)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:85)(cid:72)(cid:68)(cid:71)(cid:72)(cid:85)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)
(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:79)(cid:72)(cid:68)(cid:86)(cid:72)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:89)(cid:76)(cid:72)(cid:90)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3)(cid:68)(cid:86)(cid:3)(cid:89)(cid:76)(cid:72)(cid:90)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:69)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:86)(cid:72)(cid:68)(cid:85)(cid:70)(cid:75)(cid:3)(cid:68)(cid:81)(cid:68)(cid:79)(cid:92)(cid:86)(cid:87)(cid:86)(cid:3)
(cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:86)(cid:72)(cid:80)(cid:76)(cid:70)(cid:82)(cid:81)(cid:71)(cid:88)(cid:70)(cid:87)(cid:82)(cid:85)(cid:3) (cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:92)(cid:17)(cid:3) (cid:55)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3) (cid:81)(cid:82)(cid:81)(cid:16)(cid:42)(cid:36)(cid:36)(cid:51)(cid:3) (cid:80)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3) (cid:81)(cid:82)(cid:87)(cid:3) (cid:83)(cid:85)(cid:72)(cid:83)(cid:68)(cid:85)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:15)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:86)(cid:75)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3) (cid:81)(cid:82)(cid:87)(cid:3) (cid:69)(cid:72)(cid:3) (cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:71)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3) (cid:68)(cid:79)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:86)(cid:3) (cid:82)(cid:85)(cid:3) (cid:81)(cid:72)(cid:70)(cid:72)(cid:86)(cid:86)(cid:68)(cid:85)(cid:76)(cid:79)(cid:92)(cid:3)
(cid:86)(cid:88)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:85)(cid:3)(cid:87)(cid:82)(cid:15)(cid:3)(cid:42)(cid:36)(cid:36)(cid:51)(cid:3)(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:71)(cid:68)(cid:87)(cid:68)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:68)(cid:92)(cid:3)(cid:69)(cid:72)(cid:3)(cid:71)(cid:76)(cid:73)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:81)(cid:82)(cid:81)(cid:16)(cid:42)(cid:36)(cid:36)(cid:51)(cid:3)(cid:80)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3)(cid:88)(cid:86)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:76)(cid:72)(cid:86)(cid:17)(cid:3)(cid:37)(cid:72)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3)(cid:81)(cid:82)(cid:81)(cid:16)(cid:42)(cid:36)(cid:36)(cid:51)(cid:3)(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)
(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:76)(cid:93)(cid:72)(cid:71)(cid:15)(cid:3)(cid:76)(cid:87)(cid:3)(cid:80)(cid:68)(cid:92)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:69)(cid:72)(cid:3)(cid:83)(cid:82)(cid:86)(cid:86)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:76)(cid:72)(cid:86)(cid:182)(cid:3)(cid:81)(cid:82)(cid:81)(cid:16)(cid:42)(cid:36)(cid:36)(cid:51)(cid:3)(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:86)(cid:15)(cid:3)(cid:72)(cid:89)(cid:72)(cid:81)(cid:3)(cid:76)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:92)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:86)(cid:76)(cid:80)(cid:76)(cid:79)(cid:68)(cid:85)(cid:3)(cid:81)(cid:68)(cid:80)(cid:72)(cid:86)(cid:17)(cid:3)
(cid:55)(cid:75)(cid:72)(cid:3)(cid:72)(cid:91)(cid:83)(cid:79)(cid:68)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:80)(cid:68)(cid:71)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:68)(cid:69)(cid:82)(cid:89)(cid:72)(cid:15)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:86)(cid:72)(cid:87)(cid:3)(cid:73)(cid:82)(cid:85)(cid:87)(cid:75)(cid:3)(cid:69)(cid:72)(cid:79)(cid:82)(cid:90)(cid:29)

Detail of non-GAAP adjustments  

Amortization of acquisition-related intangible assets(cid:3)(cid:177)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:76)(cid:87)(cid:72)(cid:80)(cid:15)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:80)(cid:82)(cid:85)(cid:87)(cid:76)(cid:93)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:72)(cid:71)(cid:3)(cid:87)(cid:72)(cid:70)(cid:75)(cid:81)(cid:82)(cid:79)(cid:82)(cid:74)(cid:76)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:3)
(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:75)(cid:76)(cid:83)(cid:86)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:73)(cid:68)(cid:76)(cid:85)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:16)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:87)(cid:68)(cid:81)(cid:74)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:80)(cid:82)(cid:85)(cid:87)(cid:76)(cid:93)(cid:72)(cid:71)(cid:3)(cid:88)(cid:86)(cid:76)(cid:81)(cid:74)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:76)(cid:74)(cid:75)(cid:87)(cid:16)(cid:79)(cid:76)(cid:81)(cid:72)(cid:3)(cid:80)(cid:72)(cid:87)(cid:75)(cid:82)(cid:71)(cid:86)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:91)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:73)(cid:88)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3)
(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:192)(cid:82)(cid:90)(cid:86)(cid:3)(cid:72)(cid:86)(cid:87)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:69)(cid:72)(cid:3)(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:86)(cid:87)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:88)(cid:86)(cid:72)(cid:73)(cid:88)(cid:79)(cid:3)(cid:79)(cid:76)(cid:73)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:69)(cid:72)(cid:79)(cid:76)(cid:72)(cid:89)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:76)(cid:87)(cid:72)(cid:80)(cid:3)(cid:76)(cid:86)(cid:3)
(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:83)(cid:85)(cid:76)(cid:68)(cid:87)(cid:72)(cid:3)(cid:69)(cid:72)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3)(cid:68)(cid:3)(cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:191)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:88)(cid:85)(cid:70)(cid:75)(cid:68)(cid:86)(cid:72)(cid:3)(cid:83)(cid:85)(cid:76)(cid:70)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:76)(cid:87)(cid:86)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:90)(cid:68)(cid:86)(cid:3)(cid:68)(cid:79)(cid:79)(cid:82)(cid:70)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:76)(cid:81)(cid:87)(cid:68)(cid:81)(cid:74)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:86)(cid:75)(cid:82)(cid:85)(cid:87)(cid:3)(cid:79)(cid:76)(cid:89)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:68)(cid:80)(cid:82)(cid:85)(cid:87)(cid:76)(cid:93)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:3)(cid:68)(cid:79)(cid:79)(cid:82)(cid:90)(cid:86)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:85)(cid:76)(cid:86)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:86)(cid:87)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:87)(cid:76)(cid:80)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:69)(cid:82)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:81)(cid:72)(cid:90)(cid:79)(cid:92)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:79)(cid:82)(cid:81)(cid:74)(cid:16)(cid:75)(cid:72)(cid:79)(cid:71)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:72)(cid:86)(cid:17)(cid:3)(cid:44)(cid:81)(cid:3)
(cid:68)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:76)(cid:87)(cid:72)(cid:80)(cid:3)(cid:69)(cid:72)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:85)(cid:72)(cid:3)(cid:76)(cid:86)(cid:3)(cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:191)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3)(cid:89)(cid:68)(cid:85)(cid:76)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:88)(cid:81)(cid:83)(cid:85)(cid:72)(cid:71)(cid:76)(cid:70)(cid:87)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:68)(cid:80)(cid:82)(cid:81)(cid:74)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:76)(cid:72)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:17)

Acquisition  related  costs(cid:3) (cid:177)(cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3) (cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3) (cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:86)(cid:3) (cid:68)(cid:86)(cid:86)(cid:82)(cid:70)(cid:76)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:83)(cid:85)(cid:72)(cid:89)(cid:76)(cid:82)(cid:88)(cid:86)(cid:3) (cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:87)(cid:92)(cid:83)(cid:76)(cid:70)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3) (cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:86)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:68)(cid:71)(cid:89)(cid:76)(cid:86)(cid:82)(cid:85)(cid:92)(cid:15)(cid:3) (cid:79)(cid:72)(cid:74)(cid:68)(cid:79)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)
(cid:83)(cid:85)(cid:82)(cid:73)(cid:72)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:88)(cid:79)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:73)(cid:72)(cid:72)(cid:86)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)(cid:3)(cid:90)(cid:72)(cid:85)(cid:72)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:92)(cid:3)(cid:90)(cid:72)(cid:85)(cid:72)(cid:3)(cid:76)(cid:81)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3)(cid:90)(cid:72)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:70)(cid:72)(cid:76)(cid:89)(cid:72)(cid:71)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:85)(cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:68)(cid:91)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)
(cid:90)(cid:72)(cid:85)(cid:72)(cid:3)(cid:80)(cid:68)(cid:71)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:81)(cid:82)(cid:81)(cid:16)(cid:71)(cid:72)(cid:71)(cid:88)(cid:70)(cid:87)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:86)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:69)(cid:72)(cid:79)(cid:76)(cid:72)(cid:89)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:68)(cid:3)
(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:68)(cid:70)(cid:70)(cid:88)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:85)(cid:72)(cid:192)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)(cid:3)(cid:79)(cid:76)(cid:78)(cid:72)(cid:79)(cid:92)(cid:3)(cid:87)(cid:82)(cid:3)(cid:69)(cid:72)(cid:3)(cid:76)(cid:81)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:69)(cid:86)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:81)(cid:3)(cid:88)(cid:81)(cid:88)(cid:86)(cid:88)(cid:68)(cid:79)(cid:3)(cid:72)(cid:89)(cid:72)(cid:81)(cid:87)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:81)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:73)(cid:68)(cid:70)(cid:76)(cid:79)(cid:76)(cid:87)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:85)(cid:76)(cid:86)(cid:82)(cid:81)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)
(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:80)(cid:68)(cid:92)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:85)(cid:72)(cid:192)(cid:72)(cid:70)(cid:87)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)(cid:17)

Insurance  recovery  for  manufacturing  facility(cid:3) (cid:177)(cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3) (cid:85)(cid:72)(cid:70)(cid:82)(cid:85)(cid:71)(cid:72)(cid:71)(cid:3) (cid:74)(cid:68)(cid:76)(cid:81)(cid:86)(cid:3) (cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:87)(cid:82)(cid:3) (cid:76)(cid:81)(cid:86)(cid:88)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) (cid:85)(cid:72)(cid:70)(cid:82)(cid:89)(cid:72)(cid:85)(cid:92)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:68)(cid:3) (cid:80)(cid:68)(cid:81)(cid:88)(cid:73)(cid:68)(cid:70)(cid:87)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3) (cid:73)(cid:68)(cid:70)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3) (cid:76)(cid:81)(cid:3)(cid:36)(cid:86)(cid:76)(cid:68)(cid:17)(cid:3) (cid:55)(cid:75)(cid:72)(cid:3)
(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:69)(cid:72)(cid:79)(cid:76)(cid:72)(cid:89)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:76)(cid:81)(cid:86)(cid:88)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:89)(cid:72)(cid:85)(cid:92)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:68)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:68)(cid:70)(cid:70)(cid:88)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:85)(cid:72)(cid:192)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)
(cid:73)(cid:68)(cid:70)(cid:76)(cid:79)(cid:76)(cid:87)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:85)(cid:76)(cid:86)(cid:82)(cid:81)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:86)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:80)(cid:68)(cid:92)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:85)(cid:72)(cid:192)(cid:72)(cid:70)(cid:87)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:74)(cid:68)(cid:76)(cid:81)(cid:86)(cid:17)

Additional Information – (Continued)
CONSOLIDATED RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME
(unaudited)

LSC investments related(cid:3)(cid:177)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:82)(cid:70)(cid:76)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:68)(cid:91)(cid:3)(cid:82)(cid:81)(cid:3)(cid:70)(cid:72)(cid:85)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:47)(cid:54)(cid:38)(cid:3)(cid:72)(cid:84)(cid:88)(cid:76)(cid:87)(cid:92)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)
(cid:75)(cid:68)(cid:86)(cid:3)(cid:68)(cid:79)(cid:86)(cid:82)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3)(cid:70)(cid:72)(cid:85)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:87)(cid:68)(cid:91)(cid:72)(cid:86)(cid:3)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:74)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:86)(cid:87)(cid:85)(cid:88)(cid:70)(cid:87)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:70)(cid:87)(cid:76)(cid:89)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:76)(cid:81)(cid:3)(cid:70)(cid:72)(cid:85)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:55)(cid:68)(cid:76)(cid:90)(cid:68)(cid:81)(cid:3)(cid:86)(cid:88)(cid:69)(cid:86)(cid:76)(cid:71)(cid:76)(cid:68)(cid:85)(cid:76)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:47)(cid:54)(cid:38)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:69)(cid:72)(cid:79)(cid:76)(cid:72)(cid:89)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)
(cid:76)(cid:86)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:85)(cid:72)(cid:192)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:82)(cid:81)(cid:74)(cid:82)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:68)(cid:81)(cid:3)(cid:72)(cid:81)(cid:75)(cid:68)(cid:81)(cid:70)(cid:72)(cid:71)(cid:3)(cid:89)(cid:76)(cid:72)(cid:90)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:17)

Loss (gain) on sale of manufacturing facilities(cid:3)(cid:177)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:86)(cid:82)(cid:79)(cid:71)(cid:3)(cid:68)(cid:3)(cid:80)(cid:68)(cid:81)(cid:88)(cid:73)(cid:68)(cid:70)(cid:87)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:86)(cid:88)(cid:69)(cid:86)(cid:76)(cid:71)(cid:76)(cid:68)(cid:85)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:85)(cid:68)(cid:81)(cid:86)(cid:68)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:85)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:90)(cid:82)(cid:85)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3)(cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)
(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:85)(cid:71)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)(cid:74)(cid:68)(cid:76)(cid:81)(cid:86)(cid:3)(cid:82)(cid:85)(cid:3)(cid:79)(cid:82)(cid:86)(cid:86)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:69)(cid:72)(cid:79)(cid:76)(cid:72)(cid:89)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:76)(cid:86)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:85)(cid:72)(cid:192)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:82)(cid:81)(cid:74)(cid:82)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)
(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:68)(cid:81)(cid:3)(cid:72)(cid:81)(cid:75)(cid:68)(cid:81)(cid:70)(cid:72)(cid:71)(cid:3)(cid:89)(cid:76)(cid:72)(cid:90)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:17)

Restructuring costs(cid:3)(cid:177)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:85)(cid:71)(cid:72)(cid:71)(cid:3)(cid:85)(cid:72)(cid:86)(cid:87)(cid:85)(cid:88)(cid:70)(cid:87)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:70)(cid:75)(cid:68)(cid:85)(cid:74)(cid:72)(cid:86)(cid:3)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:89)(cid:68)(cid:85)(cid:76)(cid:82)(cid:88)(cid:86)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:79)(cid:82)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:85)(cid:72)(cid:86)(cid:87)(cid:85)(cid:88)(cid:70)(cid:87)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:70)(cid:75)(cid:68)(cid:85)(cid:74)(cid:72)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)
(cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:69)(cid:72)(cid:79)(cid:76)(cid:72)(cid:89)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:86)(cid:87)(cid:85)(cid:88)(cid:70)(cid:87)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:70)(cid:75)(cid:68)(cid:85)(cid:74)(cid:72)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:68)(cid:81)(cid:3)
(cid:72)(cid:81)(cid:75)(cid:68)(cid:81)(cid:70)(cid:72)(cid:71)(cid:3)(cid:89)(cid:76)(cid:72)(cid:90)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:3)(cid:86)(cid:87)(cid:85)(cid:88)(cid:70)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:73)(cid:68)(cid:70)(cid:76)(cid:79)(cid:76)(cid:87)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:85)(cid:76)(cid:86)(cid:82)(cid:81)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:80)(cid:68)(cid:92)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:85)(cid:72)(cid:192)(cid:72)(cid:70)(cid:87)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:70)(cid:75)(cid:68)(cid:85)(cid:74)(cid:72)(cid:86)(cid:3)
(cid:82)(cid:85)(cid:3)(cid:80)(cid:68)(cid:92)(cid:3)(cid:85)(cid:72)(cid:192)(cid:72)(cid:70)(cid:87)(cid:3)(cid:71)(cid:76)(cid:73)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:79)(cid:72)(cid:89)(cid:72)(cid:79)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:70)(cid:75)(cid:68)(cid:85)(cid:74)(cid:72)(cid:86)(cid:17)

(cid:36)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:81)(cid:74)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)(cid:3)(cid:177)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:86)(cid:3)(cid:68)(cid:86)(cid:86)(cid:82)(cid:70)(cid:76)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:68)(cid:3)(cid:81)(cid:72)(cid:90)(cid:3)(cid:70)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:3)(cid:73)(cid:68)(cid:70)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:72)(cid:91)(cid:76)(cid:86)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:71)(cid:72)(cid:69)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:83)(cid:85)(cid:72)(cid:83)(cid:68)(cid:85)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:47)(cid:76)(cid:87)(cid:72)(cid:16)(cid:50)(cid:81)(cid:3)(cid:54)(cid:72)(cid:80)(cid:76)(cid:70)(cid:82)(cid:81)(cid:71)(cid:88)(cid:70)(cid:87)(cid:82)(cid:85)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:69)(cid:72)(cid:79)(cid:76)(cid:72)(cid:89)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:81)(cid:74)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:68)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:68)(cid:70)(cid:70)(cid:88)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)
(cid:85)(cid:72)(cid:192)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)(cid:3)(cid:79)(cid:76)(cid:78)(cid:72)(cid:79)(cid:92)(cid:3)(cid:87)(cid:82)(cid:3)(cid:69)(cid:72)(cid:3)(cid:76)(cid:81)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:69)(cid:86)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:81)(cid:3)(cid:88)(cid:81)(cid:88)(cid:86)(cid:88)(cid:68)(cid:79)(cid:3)(cid:72)(cid:89)(cid:72)(cid:81)(cid:87)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:81)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:73)(cid:68)(cid:70)(cid:76)(cid:79)(cid:76)(cid:87)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:85)(cid:76)(cid:86)(cid:82)(cid:81)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:86)(cid:3)
(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:80)(cid:68)(cid:92)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:85)(cid:72)(cid:192)(cid:72)(cid:70)(cid:87)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)(cid:17)(cid:3)

Board member retirement costs(cid:3)(cid:177)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:70)(cid:82)(cid:81)(cid:81)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:3)(cid:80)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:69)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)
(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:80)(cid:82)(cid:71)(cid:76)(cid:191)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:182)(cid:86)(cid:3)(cid:88)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:53)(cid:54)(cid:56)(cid:3)(cid:74)(cid:85)(cid:68)(cid:81)(cid:87)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:89)(cid:72)(cid:86)(cid:87)(cid:3)(cid:88)(cid:83)(cid:82)(cid:81)(cid:3)(cid:75)(cid:76)(cid:86)(cid:3)(cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:86)(cid:3)(cid:86)(cid:88)(cid:69)(cid:77)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:80)(cid:82)(cid:71)(cid:76)(cid:191)(cid:72)(cid:71)(cid:3)(cid:74)(cid:85)(cid:68)(cid:81)(cid:87)(cid:86)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:85)(cid:72)(cid:79)(cid:72)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:69)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3)
(cid:80)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:68)(cid:86)(cid:3)(cid:76)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:92)(cid:3)(cid:90)(cid:72)(cid:85)(cid:72)(cid:3)(cid:89)(cid:72)(cid:86)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:82)(cid:85)(cid:76)(cid:74)(cid:76)(cid:81)(cid:68)(cid:79)(cid:3)(cid:89)(cid:72)(cid:86)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:76)(cid:80)(cid:72)(cid:79)(cid:76)(cid:81)(cid:72)(cid:17)

Land sale inspection extension fee(cid:3)(cid:177)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3)(cid:85)(cid:72)(cid:70)(cid:72)(cid:76)(cid:83)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:76)(cid:81)(cid:86)(cid:83)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:72)(cid:91)(cid:87)(cid:72)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:73)(cid:72)(cid:72)(cid:86)(cid:3)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:79)(cid:68)(cid:81)(cid:71)(cid:3)(cid:79)(cid:82)(cid:70)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:82)(cid:15)(cid:3)(cid:55)(cid:59)(cid:17)(cid:3)(cid:55)(cid:75)(cid:76)(cid:86)(cid:3)
(cid:73)(cid:72)(cid:72)(cid:3)(cid:76)(cid:86)(cid:3)(cid:83)(cid:68)(cid:76)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:79)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:88)(cid:85)(cid:70)(cid:75)(cid:68)(cid:86)(cid:72)(cid:85)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:76)(cid:74)(cid:75)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:91)(cid:87)(cid:72)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)(cid:3)(cid:70)(cid:79)(cid:82)(cid:86)(cid:72)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:72)(cid:72)(cid:3)(cid:76)(cid:86)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:88)(cid:85)(cid:70)(cid:75)(cid:68)(cid:86)(cid:72)(cid:3)(cid:83)(cid:85)(cid:76)(cid:70)(cid:72)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:73)(cid:72)(cid:72)(cid:79)(cid:86)(cid:3)(cid:76)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:83)(cid:85)(cid:76)(cid:68)(cid:87)(cid:72)(cid:3)
(cid:87)(cid:82)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:73)(cid:72)(cid:72)(cid:86)(cid:3)(cid:86)(cid:76)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:92)(cid:3)(cid:71)(cid:82)(cid:81)(cid:182)(cid:87)(cid:3)(cid:85)(cid:72)(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:81)(cid:74)(cid:82)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:76)(cid:85)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:68)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:68)(cid:70)(cid:70)(cid:88)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:76)(cid:81)(cid:71)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)
(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)

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(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)

Loss on impairment(cid:3)(cid:177)(cid:3)(cid:44)(cid:81)(cid:3)(cid:21)(cid:19)(cid:20)(cid:28)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3)(cid:68)(cid:81)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:76)(cid:85)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:79)(cid:82)(cid:86)(cid:86)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:74)(cid:81)(cid:76)(cid:93)(cid:72)(cid:71)(cid:3)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:76)(cid:81)(cid:87)(cid:68)(cid:81)(cid:74)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)(cid:83)(cid:85)(cid:72)(cid:89)(cid:76)(cid:82)(cid:88)(cid:86)(cid:79)(cid:92)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:55)(cid:41)(cid:54)(cid:54)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:21)(cid:19)(cid:20)(cid:26)(cid:3)
(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3)(cid:68)(cid:81)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:76)(cid:85)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:79)(cid:82)(cid:86)(cid:86)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:74)(cid:81)(cid:76)(cid:93)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:79)(cid:82)(cid:81)(cid:74)(cid:16)(cid:79)(cid:76)(cid:89)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:85)(cid:72)(cid:3)(cid:90)(cid:72)(cid:85)(cid:72)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:75)(cid:88)(cid:87)(cid:71)(cid:82)(cid:90)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:46)(cid:41)(cid:36)(cid:37)(cid:17)

(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)(cid:3)(cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:177)(cid:3)(cid:44)(cid:81)(cid:3)(cid:21)(cid:19)(cid:20)(cid:27)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)(cid:3)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:90)(cid:82)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:86)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)(cid:3)(cid:85)(cid:72)(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:83)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:70)(cid:70)(cid:72)(cid:79)(cid:72)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)
(cid:89)(cid:72)(cid:86)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:73)(cid:3)(cid:83)(cid:85)(cid:72)(cid:89)(cid:76)(cid:82)(cid:88)(cid:86)(cid:79)(cid:92)(cid:3)(cid:76)(cid:86)(cid:86)(cid:88)(cid:72)(cid:71)(cid:3)(cid:86)(cid:87)(cid:82)(cid:70)(cid:78)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:73)(cid:72)(cid:72)(cid:79)(cid:86)(cid:3)(cid:76)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:83)(cid:85)(cid:76)(cid:68)(cid:87)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)(cid:3)(cid:86)(cid:76)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:92)(cid:3)(cid:71)(cid:82)(cid:81)(cid:182)(cid:87)(cid:3)(cid:85)(cid:72)(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:81)(cid:74)(cid:82)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:86)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:68)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:68)(cid:70)(cid:70)(cid:88)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:76)(cid:81)(cid:71)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)

CORPORATE INFORMATION

BOARD OF DIRECTORS

EXECUTIVE OFFICERS

DR. KEH-SHEW LU
Chairman, President, & Chief 

(cid:44)(cid:95)(cid:76)(cid:74)(cid:92)(cid:91)(cid:80)(cid:93)(cid:76)(cid:3)(cid:54)(cid:1117)(cid:74)(cid:76)(cid:89)
Employee since 2005

BRETT R. WHITMIRE

(cid:42)(cid:79)(cid:80)(cid:76)(cid:77)(cid:3)(cid:45)(cid:80)(cid:85)(cid:72)(cid:85)(cid:74)(cid:80)(cid:72)(cid:83)(cid:3)(cid:54)(cid:1117)(cid:74)(cid:76)(cid:89)
Employee since 2009

GARY YU

(cid:42)(cid:79)(cid:80)(cid:76)(cid:77)(cid:3)(cid:54)(cid:87)(cid:76)(cid:89)(cid:72)(cid:91)(cid:80)(cid:85)(cid:78)(cid:3)(cid:54)(cid:1117)(cid:74)(cid:76)(cid:89)
Employee since 2008

FRANCIS TANG
Senior Vice President,
Worldwide Discrete Products
Employee since 2005

ANDY TSONG

(cid:55)(cid:89)(cid:76)(cid:90)(cid:80)(cid:75)(cid:76)(cid:85)(cid:91)(cid:19)(cid:3)(cid:40)(cid:90)(cid:80)(cid:72)(cid:3)(cid:55)(cid:72)(cid:74)(cid:80)(cid:196)(cid:74)(cid:3)(cid:57)(cid:76)(cid:78)(cid:80)(cid:86)(cid:85)
Employee since 2009

EMILY YANG
Senior Vice President,
Worldwide Sales & Marketing
Employee since 2015 

JIN ZHAO
Senior Vice President,
Analog Business Group
Employee since 2017

DR. KEH-SHEW LU 4
Chairman, President, & 
(cid:42)(cid:79)(cid:80)(cid:76)(cid:77)(cid:3)(cid:44)(cid:95)(cid:76)(cid:74)(cid:92)(cid:91)(cid:80)(cid:93)(cid:76)(cid:3)(cid:54)(cid:1117)(cid:74)(cid:76)(cid:89)(cid:19)
Diodes Incorporated
Former Senior Vice President, 
Texas Instruments, Inc.
Director since 2001

MICHAEL K.C. TSAI 2C, 3C
Lead Director,
Diodes Incorporated
Chairman,
AP Memory Technology Corp.
Vice Chairman,
Powerchip Semiconductor
Manufacturing Corp.
Director since 2010

ANGIE CHEN BUTTON 1, 3
Member, State of Texas House
(cid:54)(cid:77)(cid:3)(cid:57)(cid:76)(cid:87)(cid:89)(cid:76)(cid:90)(cid:76)(cid:85)(cid:91)(cid:72)(cid:91)(cid:80)(cid:93)(cid:76)(cid:90)
Director since 2021

WARREN CHEN 2,3,4C
Board Member,
Lite-On Technology Corporation
Director since 2020

MICHAEL R. GIORDANO 1C, F
Associate Director,
Senior Wealth Strategy Associate,
UBS Financial Services, Inc.
Director since 1990

PETER M. MENARD 1, 3

(cid:57)(cid:76)(cid:91)(cid:80)(cid:89)(cid:76)(cid:75)(cid:3)(cid:58)(cid:76)(cid:74)(cid:92)(cid:89)(cid:80)(cid:91)(cid:80)(cid:76)(cid:90)(cid:3)(cid:51)(cid:72)(cid:94)(cid:96)(cid:76)(cid:89)
Director since 2018

CHRISTINA WEN-CHI SUNG 1, 2, 4 
Former Chairman,
Taipei Financial Center Corporation
Director since 2017

1 – Audit Committee Member
2 – Compensation Committee Member

(cid:26)(cid:3)(cid:182)(cid:3)(cid:46)(cid:86)(cid:93)(cid:76)(cid:89)(cid:85)(cid:72)(cid:85)(cid:74)(cid:76)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:58)(cid:91)(cid:86)(cid:74)(cid:82)(cid:79)(cid:86)(cid:83)(cid:75)(cid:76)(cid:89)(cid:3)(cid:57)(cid:76)(cid:83)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:90)(cid:3)

Committee Member

(cid:27)(cid:3)(cid:182)(cid:3)(cid:57)(cid:80)(cid:90)(cid:82)(cid:3)(cid:54)(cid:93)(cid:76)(cid:89)(cid:90)(cid:80)(cid:78)(cid:79)(cid:91)(cid:3)(cid:42)(cid:86)(cid:84)(cid:84)(cid:80)(cid:91)(cid:91)(cid:76)(cid:76)(cid:3)(cid:52)(cid:76)(cid:84)(cid:73)(cid:76)(cid:89)
C – Committee Chair
F – Audit Committee Financial Expert

SHAREHOLDER INFORMATION
Diodes Incorporated common stock is listed
on the Nasdaq Global Select Market
(Nasdaq-GS: DIOD).

Calendar Ended

2022

Closing Sales 
Price of 
Common Stock

High

Low

Fourth quarter

$    92.23 $ 66.44

Third quarter

Second quarter

First quarter

2021

84.17

60.95

84.76

63.83

111.91

79.07

Fourth quarter

$  112.42 $ 85.49

Third quarter

Second quarter

First quarter

98.17

72.75

83.79

69.17

90.86

70.78

ANNUAL REPORT ON FORM 10-K
(cid:40)(cid:3)(cid:74)(cid:86)(cid:87)(cid:96)(cid:3)(cid:86)(cid:77)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:42)(cid:86)(cid:84)(cid:87)(cid:72)(cid:85)(cid:96)(cid:3)(cid:40)(cid:85)(cid:85)(cid:92)(cid:72)(cid:83)(cid:3)(cid:57)(cid:76)(cid:87)(cid:86)(cid:89)(cid:91)(cid:3)(cid:86)(cid:85)(cid:3)
(cid:45)(cid:86)(cid:89)(cid:84)(cid:3)(cid:24)(cid:23)(cid:20)(cid:50)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:86)(cid:91)(cid:79)(cid:76)(cid:89)(cid:3)(cid:87)(cid:92)(cid:73)(cid:83)(cid:80)(cid:74)(cid:83)(cid:96)(cid:3)(cid:196)(cid:85)(cid:72)(cid:85)(cid:74)(cid:80)(cid:72)(cid:83)(cid:3)(cid:89)(cid:76)(cid:87)(cid:86)(cid:89)(cid:91)(cid:90)(cid:19)(cid:3)
(cid:72)(cid:90)(cid:3)(cid:196)(cid:83)(cid:76)(cid:75)(cid:3)(cid:94)(cid:80)(cid:91)(cid:79)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:60)(cid:85)(cid:80)(cid:91)(cid:76)(cid:75)(cid:3)(cid:58)(cid:91)(cid:72)(cid:91)(cid:76)(cid:90)(cid:3)(cid:58)(cid:76)(cid:74)(cid:92)(cid:89)(cid:80)(cid:91)(cid:80)(cid:76)(cid:90)
and Exchange Commission, are available
at www.diodes.com or www.sec.gov. For
a hard copy contact Shelton Group at the
address below:

INVESTOR RELATIONS
Shelton Group
Contact: Leanne Sievers
19800 MacArthur Blvd., Suite 300
Irvine, California  92612
949-224-3874
LSievers@SheltonGroup.com

INDEPENDENT REGISTERED PUBLIC 
ACCOUNTING FIRM
Moss Adams LLP
10960 Wilshire Blvd., Suite 1100
Los Angeles, California  90024

TRANSFER AGENT & REGISTRAR
Continental Stock Transfer & Trust Company
17 Battery Place, 8th Floor
New York, New York  10004
212-509-4000

FINANCIAL INFORMATION ONLINE
World Wide Web users can access Company 
information on the Diodes Incorporated 
Investor page at www.investor.diodes.com.

DIODES INCORPORATED

(cid:38)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72) (cid:43)(cid:72)(cid:68)(cid:71)(cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:72)(cid:85)s
4949 (cid:43)(cid:72)(cid:71)(cid:74)(cid:70)(cid:82)(cid:91)(cid:72) (cid:53)(cid:82)(cid:68)d
(cid:54)(cid:88)ite (cid:21)(cid:19)(cid:19)
(cid:51)(cid:79)(cid:68)(cid:81)(cid:82)(cid:15) Te(cid:91)(cid:68)(cid:86)  (cid:26)(cid:24)(cid:19)(cid:21)4
(cid:28)(cid:26)(cid:21)(cid:17)(cid:28)(cid:27)(cid:26)(cid:17)(cid:22)(cid:28)(cid:19)(cid:19)

AMERICA SALES

Milp(cid:76)(cid:87)(cid:68)s(cid:15)(cid:3)(cid:38)(cid:68)li(cid:73)(cid:82)(cid:85)(cid:81)i(cid:68)(cid:15)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:72)d St(cid:68)(cid:87)(cid:72)s
(cid:51)(cid:79)(cid:68)(cid:81)(cid:82)(cid:15)(cid:3)Te(cid:91)(cid:68)(cid:86)(cid:15)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)s

ASIA SALES

(cid:37)(cid:72)(cid:76)(cid:77)(cid:76)(cid:81)(cid:74)(cid:15)(cid:3)(cid:38)(cid:75)(cid:76)(cid:81)(cid:68)(cid:3)
(cid:42)(cid:88)(cid:68)(cid:81)(cid:74)(cid:93)(cid:75)(cid:82)(cid:88)(cid:15)(cid:3)(cid:38)(cid:75)(cid:76)(cid:81)(cid:68) 
(cid:52)(cid:76)(cid:81)(cid:74)(cid:71)(cid:68)(cid:82)(cid:15)(cid:3)(cid:38)(cid:75)(cid:76)(cid:81)(cid:68) 
(cid:54)(cid:75)(cid:68)(cid:81)(cid:74)(cid:75)(cid:68)(cid:76)(cid:15)(cid:3)(cid:38)(cid:75)(cid:76)(cid:81)(cid:68) 
(cid:54)(cid:75)(cid:72)(cid:81)(cid:93)(cid:75)(cid:72)(cid:81)(cid:15)(cid:3)(cid:38)(cid:75)(cid:76)(cid:81)(cid:68) 
(cid:58)(cid:88)(cid:75)(cid:68)(cid:81)(cid:15)(cid:3)(cid:38)(cid:75)(cid:76)(cid:81)(cid:68) 
(cid:59)(cid:76)(cid:68)(cid:80)(cid:72)(cid:81)(cid:15)(cid:3)(cid:38)(cid:75)(cid:76)(cid:81)(cid:68) 
(cid:55)(cid:82)(cid:78)(cid:92)(cid:82)(cid:15)(cid:3)(cid:45)(cid:68)(cid:83)(cid:68)(cid:81) 
(cid:54)(cid:72)(cid:82)(cid:81)(cid:74)(cid:81)(cid:68)(cid:80)(cid:16)(cid:86)(cid:76)(cid:15)(cid:3)(cid:54)(cid:82)(cid:88)(cid:87)(cid:75)(cid:3)(cid:46)(cid:82)(cid:85)(cid:72)(cid:68) 
(cid:55)(cid:68)(cid:76)(cid:83)(cid:72)(cid:76)(cid:15)(cid:3)(cid:55)(cid:68)(cid:76)(cid:90)(cid:68)(cid:81)(cid:3)

EUROPE SALES

(cid:41)(cid:85)(cid:68)(cid:81)(cid:78)(cid:73)(cid:88)(cid:85)(cid:87)(cid:15)(cid:3)(cid:42)(cid:72)(cid:85)(cid:80)(cid:68)(cid:81)(cid:92) 
(cid:48)(cid:88)(cid:81)(cid:76)(cid:70)(cid:75)(cid:15)(cid:3)(cid:42)(cid:72)(cid:85)(cid:80)(cid:68)(cid:81)(cid:92)(cid:3)
(cid:50)(cid:79)(cid:71)(cid:75)(cid:68)(cid:80)(cid:15)(cid:3)(cid:56)(cid:46)(cid:3)

MANUFACTURING FACILITIES

(cid:38)(cid:75)(cid:72)(cid:81)(cid:74)(cid:71)(cid:88)(cid:15)(cid:3)(cid:38)(cid:75)(cid:76)(cid:81)(cid:68)
(cid:45)(cid:76)(cid:81)(cid:68)(cid:81)(cid:15)(cid:3)(cid:38)(cid:75)(cid:76)(cid:81)(cid:68)
(cid:54)(cid:75)(cid:68)(cid:81)(cid:71)(cid:82)(cid:81)(cid:74)(cid:15)(cid:3)(cid:38)(cid:75)(cid:76)(cid:81)(cid:68)

(cid:58)(cid:88)(cid:91)(cid:76)(cid:15)(cid:3)(cid:38)(cid:75)(cid:76)(cid:81)(cid:68)(cid:3)(cid:11)(cid:21)(cid:12)
(cid:50)(cid:79)(cid:71)(cid:75)(cid:68)(cid:80)(cid:15)(cid:3)(cid:40)(cid:81)(cid:74)(cid:79)(cid:68)(cid:81)(cid:71)
(cid:49)(cid:72)(cid:88)(cid:75)(cid:68)(cid:88)(cid:86)(cid:15)(cid:3)(cid:42)(cid:72)(cid:85)(cid:80)(cid:68)(cid:81)(cid:92)
(cid:42)(cid:85)(cid:72)(cid:72)(cid:81)(cid:82)(cid:70)(cid:78)(cid:15)(cid:3)(cid:54)(cid:70)(cid:82)(cid:87)(cid:79)(cid:68)(cid:81)(cid:71)(cid:3)
(cid:43)(cid:86)(cid:76)(cid:81)(cid:70)(cid:75)(cid:88)(cid:15)(cid:3)(cid:55)(cid:68)(cid:76)(cid:90)(cid:68)(cid:81) 
(cid:45)(cid:75)(cid:82)(cid:81)(cid:74)(cid:47)(cid:76)(cid:15)(cid:3)(cid:55)(cid:68)(cid:76)(cid:90)(cid:68)(cid:81) 
(cid:46)(cid:72)(cid:72)(cid:79)(cid:88)(cid:81)(cid:74)(cid:15)(cid:3)(cid:55)(cid:68)(cid:76)(cid:90)(cid:68)(cid:81)  
(cid:54)(cid:82)(cid:88)(cid:87)(cid:75)(cid:3)(cid:51)(cid:82)(cid:85)(cid:87)(cid:79)(cid:68)(cid:81)(cid:71)(cid:15)(cid:3)(cid:48)(cid:68)(cid:76)(cid:81)(cid:72)(cid:15)(cid:3)(cid:56)(cid:54)

DIODES INCORPORATED

Registered to UL DQS

(cid:38)(cid:72)(cid:85)(cid:87)(cid:76)(cid:240)(cid:70)(cid:68)(cid:87)(cid:72)(cid:3)(cid:53)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:49)(cid:82)(cid:17)(cid:3)(cid:20)(cid:19)(cid:19)(cid:19)(cid:21)(cid:21)(cid:22)(cid:22)
(cid:52)(cid:48)(cid:19)(cid:27)

www(cid:17)(cid:71)(cid:76)(cid:82)(cid:71)(cid:72)(cid:86)(cid:17)(cid:70)(cid:82)(cid:80)
(cid:49)(cid:68)(cid:86)(cid:71)(cid:68)(cid:84)(cid:16)(cid:42)(cid:54)(cid:29)(cid:3)(cid:39)(cid:44)(cid:50)(cid:39)