RF Micro Devices and TriQuint Semiconductor provide detailed Management's Discussion and Analysis (MD&A) sections in their financial reports. While there are some differences in format and level of detail, both reports aim to analyze financial performance, position the companies for future growth, and manage investor perceptions. RF Micro's MD&A contains more precise explanations of changes in revenue, expenses, cash flow, and other line items. TriQuint focuses more on revenue trends but is missing some details. The level of disclosure varies due to company complexity, competitive concerns, and management judgment about what information is most relevant for investors.

1. CALIFORNIA STATE UNIVERSITY, FULLERTON
MD&A
RF Micro Devices & TriQuintSemiconductor
DUNG LE
ACCT 301 A

2. INTRODUCTION:
RF Micro Devices also known as RFMD is an American company and a global leader in
designing and manufacturing high-performance radio frequency systems and solutions for
applications that drive wireless and broadband communications RF Micro. On February 22,
2014, RF Micro partnered with TriQuint under the Merger Agreement with a new holding
company named Rocky Holding, Inc. TriQuint (TQNT) Semiconductor is a semiconductor
company that supplies, designs and manufactures high performance modules and components for
wireless communications applications. TriQuint primarily works with the semiconductor gallium
arsenide, or GaAs, and is the number-three worldwide leader in GaAs devices and the world’s
largest commercial GaAs foundry. They provide customers with high-performance, low-cost RF
solutions in the mobile devices, networks, and defense & aerospace end markets.
COMPARISON:
In both companies’ MD&As they all disclose the main analysis of data assisting readers in
understanding our results of operations and financial condition through the view of management.
Those include company overview, results of operation, liquidity and capital resource, off balance
sheet arrangement, contractual obligations, share based compensation and quantitative and
qualitative disclosure about market risk with similar rules and measures. However each of them
has different order of items. For example, RF Micro has a whole fiscal 2014 management
summary on the top of the analysis which compares the changes in revenue, gross margin,
operating income, net income per share, cash flow, capital expenditure, common stock, other
expenses and impairment, and they explain those items more detailed in the part of result of
operation. However for TriQuint they analyze capital expenditure, repurchases, inventory,
account receivable, long term liability and common stock in liquidity and capital resources part
with short comparison and explanation.
There are several differences in the method of each company using to report. RF Micro takes
operation results from 2012 to 2014 when TriQuint use the amount from 2011 to 2013. They
both disclose their revenue from their own segment operation. However TriQuint compares two
years at the time such as 2013- 2012 and 2012 – 2011, when RF Micro display three years in a
row. MD&A of RF Micro seems more precise than TriQuint’s; each part of RF Micro’s is
explained very detailed such as how much change compared to last year and the year before, and
what cause those changes. Another difference is RF Micro reporting cash flow from operating,
investing and financing activities in Liquidity and Capital Resources when TriQuint does not.
TriQuint’s MD&A mentions interest expense very quick along with outstanding and lacks
feedback on it, when RF Micro makes whole explanation for interest expense for how it
decreased. RF Micro provides their information of goodwill and intangible asset but not
liabilities, when TriQuint does not have any number on intangible asset but exposes the decrease
in their long term liabilities.

3. Net income is missing on RF Micro’s MD&A but available on TriQuint’s analysis. While RF
Micro discloses most of aspects of operation results, TriQuint seems to focus more on revenue
despite their analysis is missing total revenue. The next difference is RF Micro’s MD&A
mentioning the impact of inflation, and TriQuint’s having source of liquidity and Precious Metals
Reclaim. Other than that on Item 7A about the market risk, for RF Micro there is financial risk
management including interest rate, available for sale securities, credit agreement, currency
exchange rates and commodity prices. For TriQuint they only have two risks which are cash
equivalent and foreign currency risk. Both companies carry net loss in prior years, and RF
Micro’s total obligation expenses are higher than TriQuint’s
REASONS:
Most of companies tend to disclose what are improved on their operation results to attract
investors, and either hide their concerns or impress a cursory glance at their concerns. For
instance, both companies try to focus on revenue and other improved aspects to cover for their
losses. Even though both companies are merged together, it seems obviously that RF Micro has
higher level of detail than TriQuint, and there are several reasons for it. Firstly perhaps the RF
Micro is more complex than TriQuint, so it requires more explanation. It could also be because
management at the company is very conservative, so they think the more explanation they give
the better they are protected from shareholder lawsuits. Other reason might be some concerns of
TriQuint’s operating results being unjustified, because they are afraid it would be less effective
in building marketplace understanding of and confidence in a company’s future prospects;
although it is actually more effective. Other reason is that they are worried that they might lose
maintaining competitive advantage in market. As mentioned RF Micro did not expose the total
net income/loss, and TriQuint does not provide exact amount on net loss since they use
percentage instead of dollar amount. Concerns about disclosing those information is for fear of
offending investors, or lacking gross profit amount like TriQuint might be due to fear of
compromising ongoing discussions with government agencies. A company with declining
revenues or slightly change in revenue such as TriQuint may be willing to make itself look like
being in a contracting industry but generally will not want to reveal that it is losing market share,
or explain the underlying causes with fear of loss of investors. As I mentioned above RF Micro
starts reporting 2014 information even though they have not pass the end of year yet, results in
operating income instead of loss like in prior year. The reason is that they want to make investors
feel secure that they have gain other than loss up to date.

4. Lacking intangible assets information on TriQuint MD&A might tell the fair value of their
goodwill and intangible assets is lower than their carrying value. Another reason is that many
companies prepare MD&A by copying the previous year’s and using it as a main template that
results in less modifications, little new information in MD&A, substantial boilerplate disclosures,
generic language, and immaterial detail without specific content. Due to the significant change in
operation after merging with TriQuint, RF Micro might modify MD&A to a larger degree and
higher level of detail.
CONCLUSION:
For investor the most valuable information in both companies’ MD&As is the proposed merger
which is expected to have a significant impact on the financial position or results of operations.
Merging can help accessing funds or valuable assets for new development, increase market share,
reduce costs and overheads through shared marketing budgets and increase revenue. Revenue,
gross margin, operating expenses, operating income help investors consider and compare past
and present results, and what they expect for the future. For instance, costs and revenues have
changed since last period, so investors will consider what drove those changes, and if they
should expect more. Liquidity and Capital Resources are also important; they tell how strong
company financial position is. Investors definitely cannot miss the market risk since it lets them
know the company is worth investing in or not. Cash flow from all the activities is the sign to
predict and evaluate stock price from investment. Growth in net income and revenue growth will
make a big impact on earnings per share to shareholders. Share based compensation is intended
to align employees' interests with those of the existing shareholders. Therefore, investors will be
cautioned that stock-based compensation is offered to employees as an incentive to continue
their contribution to the operating results of the company in future. Unless all the policies are
still the same with other companies, critical accounting estimates is important to understanding
2014 2013 2012
(In thousands, except
percentages) Dollars
% of
Revenue Dollars
% of
Revenue Dollars
% of
Revenue
Revenue $1,148,231 100.0% $964,147 100.0 % $ 871,352 100.0 %
Cost of goods sold 743,304 64.7 658,332 68.3 582,586 66.9
Gross profit 404,927 35.3 305,815 31.7 288,766 33.1
Research and
development 197,269 17.2 178,793 18.5 151,697 17.4
Marketing and
selling 74,672 6.5 68,674 7.1 63,217 7.3
General and
administrative 76,732 6.7 64,242 6.7 50,107 5.7
Other operating
expense (income) 28,913 2.5 9,786 1.0 (898) (0.1)
Operating income
(loss) $ 27,341 2.4% $ (15,680) (1.6)% 24,643 2.8 %

5. the assumptions and judgments incorporated in their reported financial results and forecasts. Off
balance sheet arrangements provide investors with management's insight into the impact of the
potential material risks that arise from material off-balance sheet arrangements. Disclosure of
contractual obligations provides a context for investors to assess the role of off-balance sheet
arrangements relating to liquidity and capital resources. Finally business segments, goodwill and
intangible assets, inventory reserve, precious metals reclaim, and impact of inflation are the least
valuable to investors. The remains are average important for investors to consider.