AMKOR TECHNOLOGY INC

Previous wording

We are an industry leader in developing and commercializing advanced packaging and test technologies, which we believe provide substantial value to our customers. Advanced packages, which account for a significant portion of mobile phone semiconductor value, are the preferred choice in the high-end smartphone market. The use of advanced packages in automotive applications is also growing, largely due to new, data-intensive applications which require increased pin count and performance. With the continuing trend towards cloud-based computing and the expanding use of artificial intelligence, innovative advanced packaging solutions are needed to achieve the increased performance and power consumption requirements for this market. In consumer devices, further miniaturization and increasing functionality within IoT devices also require advanced packaging. We believe that demand for advanced packaging services will continue to grow as our customers and leading electronics original equipment manufacturers strive for smaller device geometries, higher levels of integration and performance and lower power consumption. We intend to continue to leverage our investments in advanced technology to meet the demand for these services in high growth markets.

Current wording

We are an industry leader in developing and commercializing advanced packaging and test technologies, which we believe provide substantial value to our customers. Advanced packages, which account for a significant portion of mobile phone semiconductor value, are the preferred choice in the high-end smartphone market. The use of advanced packages in automotive applications is also growing, largely due to new, data-intensive applications which require increased pin count and performance. With the continuing trend towards cloud-based computing and the expanding use of artificial intelligence, innovative advanced packaging solutions are needed to achieve the increased performance and power consumption requirements for the computing end market. In consumer devices, further miniaturization and increasing functionality within IoT devices also require advanced packaging. We believe that demand for advanced packaging services will continue to grow as our customers and leading electronics original equipment manufacturers strive for smaller device geometries, higher levels of integration and performance and lower power consumption. We intend to continue to leverage our investments in advanced technology to meet the demand for these services in high growth markets.

Previous wording

Our broad geographic footprint, including our manufacturing presence in multiple countries across Asia, in Portugal and our headquarters in the United States, is a key differentiator and positions us to continue to support global supply chains and to participate in initiatives to regionalize supply chains. We are preparing to deliver advanced system-in-package (“SiP”) modules and other advanced packages from our Vietnam Facility beginning in the second half of 2024. In addition, we are progressing plans to build an advanced packaging and test facility in Arizona. We believe our unique geographic footprint provides customers with multiple options to mitigate risk and diversify their supply chains.

Current wording

Our broad geographic footprint, including our manufacturing presence in multiple countries across Asia, in Portugal and our headquarters in the United States, is a key differentiator and positions us to continue to support global supply chains and to participate in initiatives to regionalize supply chains. We are preparing to deliver advanced system-in-package (“SiP”) modules and other advanced packages from our Vietnam Facility beginning in the third quarter of 2024. In addition, we are progressing plans to build an advanced packaging and test facility in Arizona. We believe our unique geographic footprint provides customers with multiple options to mitigate risk and diversify their supply chains.

Previous wording

As a supplier in the semiconductor industry, our business is cyclical and impacted by broad economic factors. Historical trends indicate there has been a strong correlation between worldwide gross domestic product levels, consumer spending and semiconductor industry cycles. We believe that the general semiconductor market is currently going through a cyclical correction. The semiconductor industry has experienced significant and sometimes prolonged cyclical upturns and downturns in the past. We cannot predict the timing, strength or duration of any correction, economic slowdown, recession or subsequent economic recovery.

Current wording

As a supplier in the semiconductor industry, our business is cyclical and impacted by broad economic factors. Historical trends indicate there has been a strong correlation between worldwide gross domestic product levels, consumer spending and semiconductor industry cycles. We believe the general semiconductor market is currently going through a cyclical correction. The semiconductor industry has experienced significant and sometimes prolonged cyclical upturns and downturns in the past. We cannot predict the timing, strength or duration of any correction, economic slowdown, recession or subsequent economic recovery.

Previous wording

We operate in a capital-intensive industry. Servicing our current and future customers requires that we incur significant operating expenses and continue to make significant capital expenditures, which are generally made in advance of the related revenues and without firm customer commitments. We fund our operations, including capital expenditures and debt service requirements, with cash flows from operations, existing cash and cash equivalents, short-term investments, borrowings under available credit facilities and proceeds from any additional financing. Maintaining an appropriate level of liquidity is important to our business and depends on, among other considerations, the performance of our business, our capital expenditure levels, our ability to repay debt out of our operating cash flows or proceeds from debt or equity financings and our investment strategy. As of March 31, 2024, we had cash and cash equivalents and short-term investments of $1,118.0 million and $454.7 million, respectively.

Current wording

We operate in a capital-intensive industry. Servicing our current and future customers requires that we incur significant operating expenses and continue to make significant capital expenditures, which are generally made in advance of expected revenues and without firm customer commitments. We fund our operations, including capital expenditures and debt service requirements, with cash flows from operations, existing cash and cash equivalents, short-term investments, borrowings under available credit facilities and proceeds from any additional financing. Maintaining an appropriate level of liquidity is important to our business and depends on, among other considerations, the performance of our business, our capital expenditure levels, our ability to repay debt out of our operating cash flows or proceeds from debt or equity financings and our investment strategy. As of June 30, 2024, we had cash and cash equivalents and short-term investments of $1,079.7 million and $465.8 million, respectively.

Previous wording

Our net sales, gross profit, operating income, cash flows, liquidity and capital resources have historically fluctuated significantly from quarter to quarter due to many factors, including the seasonality of our business, the cyclical nature of the semiconductor industry and other factors discussed in the “Risk Factors” section in Part II, Item 1A of this Form 10-Q. We expect macroeconomic conditions to be challenging in the first half of 2024. To prepare for future growth, we will continue to make prudent investments, and we will closely manage capacity expansion and control costs in response to changes in market conditions.

Current wording

Our net sales, gross profit, operating income, cash flows, liquidity and capital resources have historically fluctuated significantly from quarter to quarter due to many factors, including the seasonality of our business, the cyclical nature of the semiconductor industry and other factors discussed in the “Risk Factors” section in Part II, Item 1A of this Form 10-Q. We will continue to make prudent investments, and we will closely manage capacity expansion and control costs in response to any changes in market conditions.

Previous wording

Gross margin for the three months ended March 31, 2024 increased to 14.8% compared to 13.2% for the three months ended March 31, 2023. The increase in gross margin was primarily due tothe extension of the estimated useful life of our test equipment from five years to seven years, a decrease in the mix of products sold with higher material content and net favorable foreign currency exchange rate movements, partially offset by a decrease in net sales and resulting lower factory utilization.

Current wording

Gross margin for the three months ended June 30, 2024 increased to 14.5% compared to 12.8% for the three months ended June 30, 2023. The increase in gross margin was primarily due to the extension of the estimated useful life of our test equipment from five years to seven years and net favorable foreign currency exchange rate movements.

Previous wording

Operating income margin increased 70 basis points to 5.4% for the three months ended March 31, 2024 from 4.7% for the three months ended March 31, 2023. The increase in our operating income margin was primarily due to the increase in our gross margin discussed above and recovery of bad debt expense, partially offset by costs associated with the opening of the Vietnam Facility and increased employee compensation costs.

Current wording

Operating income margin increased 40 basis points to 5.6% for the three months ended June 30, 2024 from 5.2% for the three months ended June 30, 2023. The increase in our operating income margin was primarily due to the increase in our gross margin discussed above and recovery of bad debt expense, partially offset by costs incurred during start-up at the Vietnam Facility and increased employee compensation costs.

Previous wording

Our capital expenditures totaled $96.2 million for the three months ended March 31, 2024 compared to $98.2 million for the three months ended March 31, 2023. Our spending was primarily focused on investments in advanced packaging and test equipment.

Current wording

Our capital expenditures totaled $262.5 million for the six months ended June 30, 2024 compared to $282.3 million for the six months ended June 30, 2023. Our spending was primarily focused on investments in advanced packaging and test equipment.

Previous wording

Net cash provided by operating activities was $162.3 million for the three months ended March 31, 2024 compared to $175.7 million for the three months ended March 31, 2023. This decrease was primarily due to changes in working capital, offset by higher operating profits.

Current wording

Net cash provided by operating activities was $387.1 million for the six months ended June 30, 2024 compared to $422.6 million for the six months ended June 30, 2023. This decrease was primarily due to changes in working capital, offset by higher operating profits.

Previous wording

The decrease in net sales for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily due to lower sales in our automotive and industrial end market. This end market decreased 22% compared to 2023, mainly due to elevated customer inventories.

Current wording

-24- industrial and consumer end markets. The decrease in net sales for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily due to lower sales in our automotive and industrial and consumer end markets, partially offset by growth in our communications end market. The automotive and industrial and consumer end markets decreased 19% and 12%, respectively, for the six months ended June 30, 2024 compared to 2023, primarily due to elevated customer inventories and weaker demand. Communications, our largest end market, grew 7% for the six months ended June 30, 2024 compared to 2023, primarily due to strength within premium tier smartphones.

Previous wording

Gross profit and gross margin increased for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to the extension of the estimated useful life of our test equipment from five years to seven years, a decrease in the mix of products sold with higher material content and net favorable foreign currency exchange rate movements, partially offset by a decrease in net sales and resulting lower factory utilization.

Current wording

Gross profit and gross margin increased for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023, primarily due to the extension of the estimated useful life of our test equipment from five years to seven years and net favorable foreign currency exchange rate movements.

Previous wording

Selling, general and administrative expenses increased for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to costs associated with the opening of the Vietnam Facility and increased employee compensation costs, partially offset by the recovery of bad debt expense.

Current wording

Selling, general and administrative expenses increased for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023, primarily due to costs incurred during start-up at the Vietnam Facility and increased employee compensation costs, partially offset by the recovery of bad debt expense. For the three and six months ended June 30, 2024, the costs incurred during start-up at the Vietnam Facility increased approximately $13 million and $25 million, respectively, compared to 2023.

Previous wording

Research and development expenses decreased for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to utilization mix of assets shared with manufacturing and projects moving into production, partially offset by incremental research and development costs in our Portugal facility.

Current wording

Research and development expenses decreased for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023, primarily due to the utilization mix of assets shared with manufacturing and

Previous wording

Interest income increased for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to increases in our cash and cash equivalent and available-for-sale debt investment balances and higher interest rates.

Current wording

Interest income increased for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023, primarily due to increases in our cash and cash equivalent and available-for-sale debt investment balances and higher interest rates.

Previous wording

The changes in foreign currency loss (gain), net for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 were primarily due to managing more of our net monetary exposure with foreign exchange forward contracts and the strengthening of the U.S. dollar compared to the foreign currencies of our subsidiaries, mainly the Japanese yen, and the associated impact on our net monetary exposure.

Current wording

The changes in foreign currency loss (gain), net for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 were primarily due to lower net costs associated with foreign exchange forward contracts.

Previous wording

Income tax expense, which includes foreign withholding taxes and minimum taxes, reflects the applicable tax rates in effect in the various countries where our income is earned and is subject to volatility depending on the relative mix of earnings in each location. Income tax expense increased for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to an increase in income before income taxes.

Current wording

Income tax expense, which includes foreign withholding taxes and minimum taxes, reflects the applicable tax rates in effect in the various countries where our income is earned and is subject to volatility depending on the relative mix of earnings in each location. Income tax expense increased for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 primarily due to an increase in income before income taxes.

Previous wording

During the three months ended March 31, 2024 and 2023, our subsidiaries in Korea and Singapore operated under various conditional reduced tax rates. Beginning in 2024, our subsidiary in Vietnam also operated under various conditional reduced tax rates. As these conditional reduced tax rates expire, income earned in these jurisdictions will be subject to higher statutory income tax rates, which may cause our effective tax rate to increase.

Current wording

During the six months ended June 30, 2024 and 2023, our subsidiaries in Korea and Singapore operated under various conditional reduced tax rates. Beginning in 2024, our subsidiary in Vietnam also operated under various conditional reduced tax rates. As these conditional reduced tax rates expire, income earned in these jurisdictions will be subject to higher statutory income tax rates, which may cause our effective tax rate to increase.

Previous wording

Our liquidity is affected by, among other factors, volatility in the global economy and credit markets, the performance of our business, our capital expenditure levels, other uses of our cash including any dividends and purchases of stock or debt under any repurchase program, any acquisitions, joint ventures or other investments and our ability to either repay debt out of operating cash flow or refinance it at or prior to maturity with the proceeds from debt or equity offerings. There can be no assurance that we will generate the necessary net income or operating cash flows, or be able to borrow sufficient funds, to meet the funding needs of our business beyond the next twelve months due to a variety of factors,

Current wording

Our liquidity is affected by, among other factors, volatility in the global economy and credit markets, the performance of our business, our capital expenditure levels, other uses of our cash including any dividends and purchases of stock or debt under any repurchase program, any acquisitions, joint ventures or other investments and our ability to either repay debt out of operating cash flow or refinance it at or prior to maturity with the proceeds from debt or equity offerings.

Previous wording

As of March 31, 2024, we had cash and cash equivalents and short-term investments of $1,572.7 million. Included in our cash and short-term investments balances as of March 31, 2024 is$1,393.1 million held offshore by our foreign subsidiaries. We have the ability to access cash held offshore by our foreign subsidiaries primarily through the repayment of intercompany debt obligations. If we were to distribute this offshore cash to the U.S. as dividends from our foreign subsidiaries, the dividends generally would not be subject to U.S. federal income tax, but the distributions may be subject to foreign withholding and state income taxes.

Current wording

As of June 30, 2024, we had cash and cash equivalents and short-term investments of $1,545.5 million. Included in our cash and short-term investments balances as of June 30, 2024 is$1,354.0 million held offshore by our foreign subsidiaries. We have the ability to access cash held offshore by our foreign subsidiaries primarily through the repayment of intercompany debt obligations. If we were to distribute this offshore cash to the U.S. as dividends from our foreign subsidiaries, the dividends generally would not be subject to U.S. federal income tax, but the distributions may be subject to foreign withholding and state income taxes.

Previous wording

As of March 31, 2024, our net liability associated with unrecognized tax benefits is $26.7 million. Due to the uncertainty regarding the amount and timing of any future cash outflows associated with our unrecognized tax benefits, we are unable to reasonably estimate the amount and timing of ultimate settlement, if any, with the various taxing authorities.

Current wording

As of June 30, 2024, our net liability associated with unrecognized tax benefits is $26.8 million. Due to the uncertainty regarding the amount and timing of any future cash outflows associated with our unrecognized tax benefits, we are unable to reasonably estimate the amount and timing of ultimate settlement, if any, with the various taxing authorities.

Previous wording

For certain accounts receivable, we use non-recourse factoring arrangements with third party financial institutions to manage our working capital and cash flows. Under these arrangements, we sell receivables to a financial institution for cash at a discount to the face amount. Available capacity under these arrangements is dependent on the level of our trade accounts receivable eligible to be sold, the financial institutions’ willingness to purchase such receivables and the limits provided by the financial institutions. These factoring arrangements can be reduced or eliminated at any time due to market conditions and changes in the creditworthiness of customers. For the three months ended March 31, 2024 and 2023, we sold accounts receivable totaling $24.4 million and $78.0 million, respectively, net of discounts and fees. Discounts and fees were insignificant for the three months ended March 31, 2024, and $0.2 million for the three months ended March 31, 2023.

Current wording

For certain accounts receivable, we use non-recourse factoring arrangements with third party financial institutions to manage our working capital and cash flows. Under these arrangements, we sell receivables to a financial institution for cash at a discount to the face amount. Available capacity under these arrangements is dependent on the level of our trade accounts receivable eligible to be sold, the financial institutions’ willingness to purchase such receivables and the limits provided by the financial institutions. These factoring arrangements can be reduced or eliminated at any time due to market conditions and changes in the creditworthiness of customers. For the six months ended June 30, 2024 and 2023, we sold accounts receivable totaling $36.1 million and $127.4 million, net of discounts and fees. Discounts and fees were insignificant for the six months ended June 30, 2024, and $0.3 million for the six months ended June 30, 2023.

Previous wording

The maximum borrowing capacity under the 2022 Singapore Revolver is limited to a base amount equal to the lesser of: (1) $600.0 million; or (2) $250.0 million plus a variable amount equal to 37.5% of our consolidated accounts receivable balance. As of March 31, 2024, we had availability of $600.0 million. As of March 31, 2024, our foreign subsidiaries had $615.0 million available for future borrowings under revolving credit facilities, including the 2022 Singapore Revolver, and $62.3 million available to be borrowed under term loan credit facilities for working capital purposes and capital expenditures. For additional information regarding the 2022 Singapore Revolver, please refer to Note 11 to our Consolidated Financial Statements in Part 1, Item 1 of this Form 10-Q.

Current wording

The maximum borrowing capacity under the 2022 Singapore Revolver is limited to a base amount equal to the lesser of: (1) $600.0 million; or (2) $250.0 million plus a variable amount equal to 37.5% of our consolidated accounts receivable balance. As of June 30, 2024, we had availability of $600.0 million. As of June 30, 2024, our foreign subsidiaries had $615.0 million available for future borrowings under revolving credit facilities, including the 2022 Singapore Revolver, and $62.0 million available to be borrowed under term loan credit facilities for working capital purposes and capital expenditures. For additional information regarding the 2022 Singapore Revolver, please refer to Note 11 to our Consolidated Financial Statements in Part 1, Item 1 of this Form 10-Q.

Previous wording

As of March 31, 2024, we had debt of $1,151.3 million, with $113.0 million payable within 12 months. As of March 31, 2024, the interest payment obligations, based on stated coupon rates for fixed rate debt and interest rates applicable at March 31, 2024 for variable rate debt, were $160.4 million during the remaining term of the debt. Interest payment obligations payable within 12 months is $51.4 million. We were in compliance with all debt covenants as of March 31, 2024, and we expect to remain in compliance with these covenants for at least the next twelve months. For additional information regarding our debt arrangements, please refer to Note 11 to our Consolidated Financial Statements in Part 1, Item 1 of this Form 10-Q.

Current wording

As of June 30, 2024, we had debt of $1,103.7 million, with $154.4 million payable within 12 months. As of June 30, 2024, the interest payment obligations, based on stated coupon rates for fixed rate debt and interest rates applicable at June 30, 2024 for variable rate debt, were $155.1 million during the remaining term of the debt. Interest payment obligations payable within 12 months is $50.9 million. We were in compliance with all debt covenants as of June 30, 2024, and we expect to remain in compliance with these covenants for at least the next twelve months. For additional information regarding our debt arrangements, please refer to Note 11 to our Consolidated Financial Statements in Part 1, Item 1 of this Form 10-Q.

Previous wording

Our subsidiary in Korea maintains an unfunded severance plan that covers certain employees who were employed prior to August 1, 2015. As of March 31, 2024, the severance liability was $44.3 million, with $7.5 million payable within 12 months. Accrued severance benefits are estimated assuming all eligible employees were to terminate their employment at the balance sheet date. For service periods subsequent to August 1, 2015, employees participate in either a defined benefit pension plan or a defined contribution pension plan. From time to time, we may offer employees the option to convert from the severance plan to the defined contribution plan, which would require us to fund the converted portion of the liability. In addition, as of March 31, 2024, we had foreign pension plan obligations of $42.7 million, for which the timing and actual amount of impact on our future cash flow is uncertain. For additional information regarding our pension and severance plans, please refer to Note 12 to our Consolidated Financial Statements in Part 1, Item 1 of this Form 10-Q and in Note 12 to the 2023 Form 10-K.

Current wording

Our subsidiary in Korea maintains an unfunded severance plan that covers certain employees who were employed prior to August 1, 2015. As of June 30, 2024, the severance liability was $44.0 million, with $7.4 million payable within 12 months. Accrued severance benefits are estimated assuming all eligible employees were to terminate their employment at the balance sheet date. For service periods subsequent to August 1, 2015, employees participate in either a defined benefit pension plan or a defined contribution pension plan. From time to time, we may offer employees the option to convert from the severance plan to the defined contribution plan, which would require us to fund the converted portion of the liability. In addition, as of June 30, 2024, we had foreign pension plan obligations of $41.6 million, for which the timing and actual amount of impact on our future cash flow is uncertain. For additional information regarding our pension and severance plans, please refer to Note 12 to our Consolidated Financial Statements in Part 1, Item 1 of this Form 10-Q and in Note 12 to the 2023 Form 10-K.

Previous wording

We lease certain machinery and equipment, office space and manufacturing facilities. As of March 31, 2024, our total remaining operating lease obligations and finance lease obligations were $93.7 million and $114.7 million, respectively, with $30.3 million and $57.4 million payable within 12 months, respectively. The lease obligations represent our future minimum lease payments including interest payments.

Current wording

We lease certain machinery and equipment, office space and manufacturing facilities. As of June 30, 2024, our total remaining operating lease obligations and finance lease obligations were $92.2 million and $149.8 million, respectively, with $27.5 million and $64.3 million payable within 12 months, respectively. The lease obligations represent our future minimum lease payments including interest payments.

Previous wording

We had off-balance sheet purchase obligations for capital expenditures, long-term supply contracts and other contractual commitments. As of March 31, 2024, the purchase obligations were $441.6 million, with $394.9 million payable within 12 months.

Current wording

We had off-balance sheet purchase obligations for capital expenditures, long-term supply contracts and other contractual commitments. As of June 30, 2024, the purchase obligations were $295.4 million, with $243.4 million payable within 12 months.

Previous wording

During the three months ended March 31, 2024, we paid total quarterly cash dividends of $19.4 million, and we currently anticipate that we will continue to pay quarterly cash dividends in the future. However, the payment, amount and timing of future dividends remain within the discretion of our Board of Directors and will depend upon our results of operations, financial condition, cash requirements, debt restrictions and other factors.

Current wording

During the six months ended June 30, 2024, we paid total quarterly cash dividends of $38.8 million, and we currently anticipate that we will continue to pay quarterly cash dividends in the future. However, the payment, amount and timing of future dividends remain within the discretion of our Board of Directors and will depend upon our results of operations, financial condition, cash requirements, debt restrictions and other factors.

Previous wording

We make significant capital expenditures in order to service the demand of our customers, which are primarily focused on investments in advanced packaging and test equipment. During the three months ended March 31, 2024, our capital expenditures totaled $96.2 million.

Current wording

We make significant capital expenditures in order to service the demand of our customers, which are primarily focused on investments in advanced packaging and test equipment. During the six months ended June 30, 2024, our capital expenditures totaled $262.5 million.

Previous wording

Net cash provided by (used in) operating, investing and financing activities for the three months ended March 31, 2024 and 2023, was as follows:

Current wording

Net cash provided by (used in) operating, investing and financing activities for the six months ended June 30, 2024 and 2023, was as follows:

Previous wording

Operating activities: Our cash flow provided by operating activities for the three months ended March 31, 2024 decreased by $13.4 million compared to the three months ended March 31, 2023, primarily due to changes in working capital, offset by higher operating profits.

Current wording

Operating activities: Our cash flow provided by operating activities for the six months ended June 30, 2024 decreased by $35.5 million compared to the six months ended June 30, 2023, primarily due to changes in working capital, offset by higher operating profits.

Previous wording

Investing activities: Our cash flow used in investing activities for thethree months ended March 31, 2024 decreased by $69.6 million compared to the three months ended March 31, 2023, primarily due to lower payments for short-term investments and higher proceeds from maturities of short-term investments, offset by higher net payments for foreign exchange forward contracts.

Current wording

Investing activities: Our cash flow used in investing activities for thesix months ended June 30, 2024 decreased by $143.8 million compared to the six months ended June 30, 2023, primarily due to net proceeds from short-term investment activity in the current year, offset by higher net payments for foreign exchange forward contracts.

Previous wording

Financing activities: The net cash used in financing activities for the three months ended March 31, 2024 and 2023 was primarily due to net debt repayments, the payments of our quarterly dividend and finance lease obligations.

Current wording

Financing activities: The net cash used in financing activities for the six months ended June 30, 2024 and 2023 was primarily due to net debt repayments, the payments of our quarterly dividend and finance lease obligations.