Q3 2017 | ||||
Revenue | $2.387 billion | |||
GAAP Gross margin | 50.9 | % | ||
GAAP Operating margin | 6.8 | % | ||
Non-GAAP Gross margin | 53.7 | % | ||
Non-GAAP Operating margin | 30.8 | % |
EINDHOVEN,
NXP delivered revenue of
Within the Automotive group, third quarter revenue was
A year ago, NXP announced the transaction with
“We believe that working together with
“In the third quarter, our GAAP operating margin was 6.8 percent, a 20-basis
point decline from the third quarter of 2016 due to the divestment of our
Standard Products business. Our non-GAAP operating margin was 30.8 percent,
representing a 280-basis point improvement compared to the third quarter of
2016 and a 240-basis point improvement sequentially. And finally, due to lower
gross debt and cash generation in the quarter, our overall financial leverage
was reduced to 1.1x,” said
Summary of Reported Third Quarter 2017 Results ($ millions, unaudited)
Q3 2017 | Q2 2017 | Q3 2016 | Q - Q | Y - Y | |||||||||||||||||||
Product Revenue | $ | 2,288 | $ | 2,098 | $ | 2,419 | 9 | % | -5 | % | |||||||||||||
Corporate and Other | $ | 99 | $ | 104 | $ | 50 | -5 | % | 98 | % | |||||||||||||
Total Revenue | $ | 2,387 | $ | 2,202 | $ | 2,469 | 8 | % | -3 | % | |||||||||||||
GAAP Gross Profit | $ | 1,215 | $ | 1,083 | $ | 1,184 | 12 | % | 3 | % | |||||||||||||
Gross Profit Adjustments (1) | $ | (68 | ) | $ | (84 | ) | $ | (63 | ) | ||||||||||||||
Non-GAAP Gross Profit | $ | 1,283 | $ | 1,167 | $ | 1,247 | 10 | % | 3 | % | |||||||||||||
GAAP Gross Margin | 50.9 | % | 49.2 | % | 48.0 | % | |||||||||||||||||
Non-GAAP Gross Margin | 53.7 | % | 53.0 | % | 50.5 | % | |||||||||||||||||
GAAP Operating Income / (Loss) | $ | 163 | $ | 50 | $ | 174 | 226 | % | -6 | % | |||||||||||||
Operating Income Adjustments (1 ) | (572 | ) | (575 | ) | (517 | ) | |||||||||||||||||
Non-GAAP Operating Income | $ | 735 | $ | 625 | $ | 691 | 18 | % | 6 | % | |||||||||||||
GAAP Operating Margin | 6.8 | % | 2.3 | % | 7.0 | % | |||||||||||||||||
Non-GAAP Operating Margin | 30.8 | % | 28.4 | % | 28.0 | % | |||||||||||||||||
(1) For an explanation of GAAP to non-GAAP adjustments, please see “Non-GAAP Financial Measures” on page 3 of this release.
Additional Information for the Third Quarter 2017:
Supplemental Information ($ millions, unaudited)
Q3 2017 | Q2 2017 | Q3 2016 | Q-Q | Y-Y | |||||||||||||||
Automotive | $ | 948 | $ | 938 | $ | 853 | 1 | % | 11 | % | |||||||||
Secure Identification Solutions (SIS) | $ | 139 | $ | 134 | $ | 178 | 4 | % | -22 | % | |||||||||
Secure Connected Devices (SCD) | $ | 713 | $ | 588 | $ | 592 | 21 | % | 20 | % | |||||||||
Secure Interface and Infrastructure (SI&I) | $ | 488 | $ | 438 | $ | 476 | 11 | % | 3 | % | |||||||||
High Performance Mixed Signal (HPMS) | $ | 2,288 | $ | 2,098 | $ | 2,099 | 9 | % | 9 | % | |||||||||
Standard Products (STDP) | $ | - | $ | - | $ | 320 | NM | NM | |||||||||||
Product Revenue | $ | 2,288 | $ | 2,098 | $ | 2,419 | 9 | % | -5 | % | |||||||||
Corporate and Other | $ | 99 | $ | 104 | $ | 50 | -5 | % | 98 | % | |||||||||
Total Revenue | $ | 2,387 | $ | 2,202 | $ | 2,469 | 8 | % | -3 | % | |||||||||
Guidance and Conference Call
As previously announced, NXP will not hold an earnings call nor provide
forward guidance for the fourth quarter of 2017 due to the pending acquisition
of NXP by
Non-GAAP Financial Measures
In managing NXP's business on a consolidated basis, management develops an annual operating plan, which is approved by our Board of Directors, using non-GAAP financial measures. In measuring performance against this plan, management considers the actual or potential impacts on these non-GAAP financial measures from actions taken to reduce costs with the goal of increasing our gross margin and operating margin and when assessing appropriate levels of research and development efforts. In addition, management relies upon these non-GAAP financial measures when making decisions about product spending, administrative budgets, and other operating expenses. We believe that these non-GAAP financial measures, when coupled with the GAAP results and the reconciliations to corresponding GAAP financial measures, provide a more complete understanding of the Company’s results of operations and the factors and trends affecting NXP’s business. We believe that they enable investors to perform additional comparisons of our operating results, to assess our liquidity and capital position and to analyze financial performance excluding the effect of expenses unrelated to operations, certain non-cash expenses and share-based compensation expense, which may obscure trends in NXP's underlying performance. This information also enables investors to compare financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management.
These non-GAAP financial measures are provided in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The presentation of these and other similar items in NXP’s non-GAAP financial results should not be interpreted as implying that these items are non-recurring, infrequent, or unusual. Reconciliations of these non-GAAP measures to the most comparable measures calculated in accordance with GAAP are provided in the financial statements portion of this release in a schedule entitled “Financial Reconciliation of GAAP to non-GAAP Results (unaudited).” Please refer to the NXP Historic Financial Model file found on the Financial Information page of the Investor Relations section of our website at www.nxp.com/investor for additional information related to our rationale for using these non-GAAP financial measures, as well as the impact of these measures on the presentation of NXP's operations.
In addition to providing financial information on a basis consistent with U.S. generally accepted accounting principles (“GAAP”), NXP also provides the following selected financial measures on a non-GAAP basis: (i) Gross profit, (ii) Gross margin, (iii) Research and development, (iv) Selling, general and administrative, (v) Amortization of acquisition-related intangible assets, (vi) Other income, (vii) Operating income (loss), (viii) Operating margin, (ix) Financial Income (expense), (x) EBITDA, adjusted EBITDA and trailing 12 month adjusted EBITDA, and (xi) non-GAAP free cash flow and free cash flow as a percent of Revenue. The non-GAAP information excludes the amortization of acquisition related intangible assets, the purchase accounting effect on inventory and property, plant and equipment, merger related costs (including integration costs), certain items related to divestitures, share-based compensation expense, restructuring and asset impairment charges, non-cash interest expense on convertible notes, extinguishment of debt, changes in the fair value of the warrant liability prior to January 1, 2016 and foreign exchange gains and losses.
About
Forward-looking Statements
This document includes forward-looking statements which include statements
regarding NXP’s business strategy, financial condition, results of operations,
and market data, as well as any other statements which are not historical
facts. By their nature, forward-looking statements are subject to
numerous factors, risks and uncertainties that could cause actual outcomes and
results to be materially different from those projected. These factors,
risks and uncertainties include the following: market demand and semiconductor
industry conditions; the ability to successfully introduce new technologies
and products; the end-market demand for the goods into which NXP’s products
are incorporated; the ability to generate sufficient cash, raise sufficient
capital or refinance corporate debt at or before maturity; the ability to meet
the combination of corporate debt service, research and development and
capital investment requirements; the ability to accurately estimate demand and
match manufacturing production capacity accordingly or obtain supplies from
third-party producers; the access to production capacity from third-party
outsourcing partners; any events that might affect third-party business
partners or NXP’s relationship with them; the ability to secure adequate
and timely supply of equipment and materials from suppliers; the ability to
avoid operational problems and product defects and, if such issues were to
arise, to correct them quickly; the ability to form strategic partnerships and
joint ventures and to successfully cooperate with alliance partners; the
ability to win competitive bid selection processes to develop products for use
in customers’ equipment and products; the ability to successfully establish a
brand identity; the ability to successfully hire and retain key management and
senior product architects, our ability to complete merger and acquisition
related activity including risks and uncertainties associated with the pending
offer by
For further information, please contact: | |||
Investors: | Media: | ||
Jeff Palmer | Joon Knapen | ||
jeff.palmer@nxp.com | joon.knapen@nxp.com | ||
+1 408 518 5411 | +49 151 257 43 299 |
NXP Semiconductors | ||||||||||||||
Table 1: Condensed consolidated statement of operations (unaudited) | ||||||||||||||
($ in millions except share data) | Three Months Ended | |||||||||||||
Oct. 1, 2017 | July 2, 2017 | Oct. 2, 2016 | ||||||||||||
Revenue | $ | 2,387 | $ | 2,202 | $ | 2,469 | ||||||||
Cost of revenue | (1,172 | ) | (1,119 | ) | (1,285 | ) | ||||||||
Gross profit | 1,215 | 1,083 | 1,184 | |||||||||||
Research and development | (392 | ) | (381 | ) | (379 | ) | ||||||||
Selling, general and administrative | (292 | ) | (263 | ) | (270 | ) | ||||||||
Amortization of acquisition-related intangible assets | (363 | ) | (373 | ) | (361 | ) | ||||||||
Total operating expenses | (1,047 | ) | (1,017 | ) | (1,010 | ) | ||||||||
Other income (expense) | (5 | ) | (16 | ) | - | |||||||||
Operating income (loss) | 163 | 50 | 174 | |||||||||||
Financial income (expense): | ||||||||||||||
Extinguishment of debt | - | - | (6 | ) | ||||||||||
Other financial income (expense) | (76 | ) | (75 | ) | (109 | ) | ||||||||
Income (loss) before taxes | 87 | (25 | ) | 59 | ||||||||||
Benefit (provision) for income taxes | 30 | 54 | 44 | |||||||||||
Results relating to equity-accounted investees | 6 | 34 | 5 | |||||||||||
Net income (loss) | 123 | 63 | 108 | |||||||||||
Less: Net income (loss) attributable to non-controlling interests | 15 | 14 | 17 | |||||||||||
Net income (loss) attributable to stockholders | 108 | 49 | 91 | |||||||||||
Earnings per share data: | ||||||||||||||
Net income (loss) per common share attributable to stockholders in $: | ||||||||||||||
Basic | $ | 0.32 | $ | 0.15 | $ | 0.27 | ||||||||
Diluted | $ | 0.31 | $ | 0.14 | $ | 0.26 | ||||||||
Weighted average number of shares of common stock outstanding during the period (in thousands): | ||||||||||||||
Basic | 338,586 | 337,537 | 335,858 | |||||||||||
Diluted | 346,152 | 344,983 | 344,365 | |||||||||||
NXP Semiconductors | |||||||||||
Table 2: Condensed consolidated balance sheet (unaudited) | |||||||||||
($ in millions) | As of | ||||||||||
Oct. 1, 2017 | July 2, 2017 | Oct. 2, 2016 | |||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 3,065 | $ | 2,642 | $ | 1,569 | |||||
Accounts receivable, net | 915 | 915 | 1,157 | ||||||||
Assets held for sale | - | - | 1,092 | ||||||||
Inventories, net | 1,205 | 1,178 | 1,141 | ||||||||
Other current assets | 321 | 336 | 244 | ||||||||
Total current assets | 5,506 | 5,071 | 5,203 | ||||||||
Non-current assets: | |||||||||||
Other non-current assets | 862 | 785 | 657 | ||||||||
Property, plant and equipment, net | 2,288 | 2,306 | 2,366 | ||||||||
Identified intangible assets, net | 6,250 | 6,590 | 7,656 | ||||||||
Goodwill | 8,887 | 8,876 | 8,910 | ||||||||
Total non-current assets | 18,287 | 18,557 | 19,589 | ||||||||
Total assets | 23,793 | 23,628 | 24,792 | ||||||||
Current liabilities: | |||||||||||
Accounts payable | 1,052 | 1,068 | 889 | ||||||||
Liabilities held for sale | - | - | 182 | ||||||||
Restructuring liabilities-current | 79 | 87 | 159 | ||||||||
Accrued liabilities | 818 | 801 | 712 | ||||||||
Short-term debt | 754 | 758 | 621 | ||||||||
Total current liabilities | 2,703 | 2,714 | 2,563 | ||||||||
Non-current liabilities: | |||||||||||
Long-term debt | 5,802 | 5,790 | 8,761 | ||||||||
Restructuring liabilities | 20 | 18 | 28 | ||||||||
Deferred tax liabilities | 1,325 | 1,379 | 1,810 | ||||||||
Other non-current liabilities | 954 | 895 | 876 | ||||||||
Total non-current liabilities | 8,101 | 8,082 | 11,475 | ||||||||
Non-controlling interests | 174 | 248 | 204 | ||||||||
Stockholders’ equity | 12,815 | 12,584 | 10,550 | ||||||||
Total equity | 12,989 | 12,832 | 10,754 | ||||||||
Total liabilities and equity | 23,793 | 23,628 | 24,792 | ||||||||
NXP Semiconductors | ||||||||||||||
Table 3: Condensed consolidated statement of cash flows (unaudited) | ||||||||||||||
($ in millions) | Three Months Ended | |||||||||||||
Oct. 1, 2017 | July 2, 2017 | Oct, 2, 2016 | ||||||||||||
Cash Flows from operating activities | ||||||||||||||
Net income (loss) | $ | 123 | $ | 63 | $ | 108 | ||||||||
Adjustments to reconcile net income (loss): | ||||||||||||||
Depreciation and amortization | 537 | 560 | 526 | |||||||||||
Stock-based compensation | 68 | 67 | 77 | |||||||||||
Excess tax benefits from share-based compensation plans | - | - | (1 | ) | ||||||||||
Amortization of discount on debt | 10 | 10 | 9 | |||||||||||
Amortization of debt issuance costs | 3 | 3 | 3 | |||||||||||
Net gain on sale of assets | - | (14 | ) | - | ||||||||||
Loss on extinguishment of debt | - | - | 6 | |||||||||||
Results relating to equity accounted investees | (6 | ) | (3 | ) | (5 | ) | ||||||||
Changes in deferred taxes | (109 | ) | (120 | ) | (64 | ) | ||||||||
Changes in operating assets and liabilities: | ||||||||||||||
(Increase) decrease in receivables and other current assets | 3 | 49 | (57 | ) | ||||||||||
(Increase) decrease in inventories | (24 | ) | (37 | ) | 57 | |||||||||
Increase (decrease) in accounts payable and accrued liabilities | 36 | (137 | ) | 50 | ||||||||||
Decrease (Increase) in other non-current assets | (5 | ) | (2 | ) | (4 | ) | ||||||||
Exchange differences | 8 | 5 | 4 | |||||||||||
Other items | (1 | ) | (3 | ) | 9 | |||||||||
Net cash provided by (used for) operating activities | 643 | 441 | 718 | |||||||||||
Cash flows from investing activities: | ||||||||||||||
Purchase of identified intangible assets | (16 | ) | (16 | ) | (9 | ) | ||||||||
Capital expenditures on property, plant and equipment | (162 | ) | (96 | ) | (99 | ) | ||||||||
Proceeds from disposals of property, plant and equipment | 1 | - | 1 | |||||||||||
Purchase of interests in businesses, net of cash acquired | - | - | (200 | ) | ||||||||||
Proceeds from sale of interests in businesses, net of cash divested | 14 | 54 | 2 | |||||||||||
Net cash provided by (used for) investing activities | (163 | ) | (58 | ) | (305 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||
Amounts drawn under the revolving credit facility | - | - | 200 | |||||||||||
Repurchase of long-term debt | - | - | (1,219 | ) | ||||||||||
Principal payments on long-term debt | (4 | ) | (4 | ) | (7 | ) | ||||||||
Proceeds from the issuance of long-term debt | - | - | 1,509 | |||||||||||
Cash paid for debt issuance costs | - | - | (12 | ) | ||||||||||
Dividends paid to non-controlling interests | (89 | ) | (126 | ) | ||||||||||
Cash proceeds from exercise of stock options | 36 | 32 | 18 | |||||||||||
Purchase of treasury shares and restricted stock unit withholdings | (2 | ) | (10 | ) | (555 | ) | ||||||||
Excess tax benefits from share-based compensation plans | - | - | 1 | |||||||||||
Net cash provided by (used for) financing activities | (59 | ) | 18 | (191 | ) | |||||||||
Effect of changes in exchange rates on cash positions | 2 | 3 | 12 | |||||||||||
Increase (decrease) in cash and cash equivalents | 423 | 404 | 234 | |||||||||||
Cash and cash equivalents at beginning of period | 2,642 | 2,238 | 1,335 | |||||||||||
Cash and cash equivalents at end of period | 3,065 | 2,642 | 1,569 | |||||||||||
Net cash paid during the period for: | ||||||||||||||
Interest | 27 | 84 | 57 | |||||||||||
Income taxes | 114 | 119 | 19 | |||||||||||
NXP Semiconductors | ||||||||||||||||
Table 4: Reconciliation of GAAP to non-GAAP Segment Results (unaudited) | ||||||||||||||||
($ in millions) | Three Months Ended | |||||||||||||||
Oct. 1, 2017 | July 2, 2017 | Oct. 2, 2016 | ||||||||||||||
High Performance Mixed Signal (HPMS) | 2,288 | 2,098 | 2,099 | |||||||||||||
Standard Products | - | - | 320 | |||||||||||||
Product Revenue | 2,288 | 2,098 | 2,419 | |||||||||||||
Corporate and Other | 99 | 104 | 50 | |||||||||||||
Total Revenue | $ | 2,387 | $ | 2,202 | $ | 2,469 | ||||||||||
HPMS Revenue | $ | 2,288 | $ | 2,098 | $ | 2,099 | ||||||||||
Percent of Total Revenue | 95.9 | % | 95.3 | % | 85.0 | % | ||||||||||
HPMS segment GAAP gross profit | 1,203 | 1,066 | 1,059 | |||||||||||||
PPA effects | (58 | ) | (74 | ) | (63 | ) | ||||||||||
Stock based compensation | (7 | ) | (8 | ) | (10 | ) | ||||||||||
Merger-related costs | (1 | ) | - | - | ||||||||||||
HPMS segment non-GAAP gross profit | $ | 1,269 | $ | 1,148 | $ | 1,132 | ||||||||||
HPMS segment GAAP gross margin | 52.6 | % | 50.8 | % | 50.5 | % | ||||||||||
HPMS segment non-GAAP gross margin | 55.5 | % | 54.7 | % | 53.9 | % | ||||||||||
HPMS segment GAAP operating profit | 235 | 94 | 116 | |||||||||||||
PPA effects | (425 | ) | (453 | ) | (428 | ) | ||||||||||
Stock based compensation | (67 | ) | (67 | ) | (72 | ) | ||||||||||
Merger-related costs | (3 | ) | (2 | ) | - | |||||||||||
HPMS segment non-GAAP operating profit | $ | 730 | $ | 616 | $ | 616 | ||||||||||
HPMS segment GAAP operating margin | 10.3 | % | 4.5 | % | 5.5 | % | ||||||||||
HPMS segment non-GAAP operating margin | 31.9 | % | 29.4 | % | 29.3 | % | ||||||||||
Standard Products Revenue | $ | - | $ | - | $ | 320 | ||||||||||
Percent of Total Revenue | - | - | 13.0 | % | ||||||||||||
Standard Products segment GAAP gross profit | - | - | 123 | |||||||||||||
Other incidentals | - | - | 14 | |||||||||||||
Standard Products segment non-GAAP gross profit | $ | - | $ | - | $ | 109 | ||||||||||
Standard Products segment GAAP gross margin | - | - | 38.4 | % | ||||||||||||
Standard Products segment non-GAAP gross margin | - | - | 34.1 | % | ||||||||||||
Standard Products segment GAAP operating profit | - | - | 85 | |||||||||||||
Stock based compensation | - | - | (4 | ) | ||||||||||||
Other incidentals | - | - | 11 | |||||||||||||
Standard Products segment non-GAAP operating profit | $ | - | $ | - | $ | 78 | ||||||||||
Standard Products segment GAAP operating margin | - | - | 26.6 | % | ||||||||||||
Standard Products segment non-GAAP operating margin | - | - | 24.4 | % | ||||||||||||
Corporate and Other Revenue | $ | 99 | $ | 104 | $ | 50 | ||||||||||
Percent of Total Revenue | 4.1 | % | 4.7 | % | 2.0 | % | ||||||||||
Corporate and Other segment GAAP gross profit | 12 | 17 | 2 | |||||||||||||
PPA effects | (1 | ) | (2 | ) | (1 | ) | ||||||||||
Restructuring | (1 | ) | (1 | ) | (3 | ) | ||||||||||
Stock based compensation | - | 1 | - | |||||||||||||
Corporate and Other segment non-GAAP gross profit | $ | 14 | $ | 19 | $ | 6 | ||||||||||
Corporate and Other segment GAAP gross margin | 12.1 | % | 16.3 | % | 4.0 | % | ||||||||||
Corporate and Other segment non-GAAP gross margin | 14.1 | % | 18.3 | % | 12.0 | % | ||||||||||
Corporate and Other segment GAAP operating profit | (72 | ) | (44 | ) | (27 | ) | ||||||||||
PPA effects | (1 | ) | (2 | ) | (4 | ) | ||||||||||
Restructuring | (7 | ) | (2 | ) | (3 | ) | ||||||||||
Stock based compensation | (1 | ) | - | (1 | ) | |||||||||||
Merger-related costs | (39 | ) | (33 | ) | (14 | ) | ||||||||||
Other incidentals | (29 | ) | (16 | ) | (2 | ) | ||||||||||
Corporate and Other segment non-GAAP operating profit | $ | 5 | $ | 9 | $ | (3 | ) | |||||||||
Corporate and Other segment GAAP operating margin | -72.7 | % | -42.3 | % | -54.0 | % | ||||||||||
Corporate and Other segment non-GAAP operating margin | 5.1 | % | 8.7 | % | -6.0 | % | ||||||||||
NXP Semiconductors | ||||||||||||||||
Table 5: Financial Reconciliation of GAAP to non-GAAP Results (unaudited) | ||||||||||||||||
($ in millions except share data) | Three Months Ended | |||||||||||||||
Oct. 1, 2017 | July 2, 2017 | Oct. 2, 2016 | ||||||||||||||
Revenue | $ | 2,387 | $ | 2,202 | $ | 2,469 | ||||||||||
GAAP Gross profit | $ | 1,215 | $ | 1,083 | $ | 1,184 | ||||||||||
PPA effects | (59 | ) | (76 | ) | (64 | ) | ||||||||||
Restructuring | (1 | ) | (1 | ) | (3 | ) | ||||||||||
Stock Based Compensation | (7 | ) | (7 | ) | (10 | ) | ||||||||||
Merger-related costs | (1 | ) | - | - | ||||||||||||
Other incidentals | - | - | 14 | |||||||||||||
Non-GAAP Gross profit | $ | 1,283 | $ | 1,167 | $ | 1,247 | ||||||||||
GAAP Gross margin | 50.9 | % | 49.2 | % | 48.0 | % | ||||||||||
Non-GAAP Gross margin | 53.7 | % | 53.0 | % | 50.5 | % | ||||||||||
GAAP Research and development | $ | (392 | ) | $ | (381 | ) | $ | (379 | ) | |||||||
Stock based compensation | (30 | ) | (28 | ) | (29 | ) | ||||||||||
Non-GAAP Research and development | $ | (362 | ) | $ | (353 | ) | $ | (350 | ) | |||||||
GAAP Selling, general and administrative | $ | (292 | ) | $ | (263 | ) | $ | (270 | ) | |||||||
PPA effects | (4 | ) | (6 | ) | (6 | ) | ||||||||||
Restructuring | (6 | ) | (1 | ) | - | |||||||||||
Stock based compensation | (31 | ) | (32 | ) | (38 | ) | ||||||||||
Merger-related costs | (41 | ) | (35 | ) | (14 | ) | ||||||||||
Other incidentals | (23 | ) | (1 | ) | (5 | ) | ||||||||||
Non-GAAP Selling, general and administrative | $ | (187 | ) | $ | (188 | ) | $ | (207 | ) | |||||||
GAAP amortization of acquisition-related intangible assets | $ | (363 | ) | $ | (373 | ) | $ | (361 | ) | |||||||
PPA effects | (363 | ) | (373 | ) | (361 | ) | ||||||||||
Non-GAAP amortization of acquisition-related intangible assets | $ | - | $ | - | $ | - | ||||||||||
GAAP Other income (expense) | $ | (5 | ) | $ | (16 | ) | $ | - | ||||||||
PPA effects | - | - | (1 | ) | ||||||||||||
Other incidentals | (6 | ) | (15 | ) | - | |||||||||||
Non-GAAP Other income (expense) | $ | 1 | $ | (1 | ) | $ | 1 | |||||||||
GAAP Operating income (loss) | $ | 163 | $ | 50 | $ | 174 | ||||||||||
PPA effects | (426 | ) | (455 | ) | (432 | ) | ||||||||||
Restructuring | (7 | ) | (2 | ) | (3 | ) | ||||||||||
Stock based compensation | (68 | ) | (67 | ) | (77 | ) | ||||||||||
Merger-related costs | (42 | ) | (35 | ) | (14 | ) | ||||||||||
Other incidentals | (29 | ) | (16 | ) | 9 | |||||||||||
Non-GAAP Operating income (loss) | $ | 735 | $ | 625 | $ | 691 | ||||||||||
GAAP Operating margin | 6.8 | % | 2.3 | % | 7.0 | % | ||||||||||
Non-GAAP Operating margin | 30.8 | % | 28.4 | % | 28.0 | % | ||||||||||
GAAP Financial income (expense) | $ | (76 | ) | $ | (75 | ) | $ | (115 | ) | |||||||
Non-cash interest expense on convertible notes | (11 | ) | (10 | ) | (11 | ) | ||||||||||
Foreign exchange gain (loss) | (5 | ) | (3 | ) | (2 | ) | ||||||||||
Extinguishment on debt | - | - | (6 | ) | ||||||||||||
Other financial expense | (3 | ) | (3 | ) | (9 | ) | ||||||||||
Non-GAAP Financial income (expense) | $ | (57 | ) | $ | (59 | ) | $ | (87 | ) | |||||||
NXP Semiconductors | |||||||||||||||
Table 6: Adjusted EBITDA and Free Cash Flow (unaudited) | |||||||||||||||
($ in millions) | Three Months Ended | ||||||||||||||
Oct. 1, 2017 | July 2, 2017 | Oct. 2, 2016 | |||||||||||||
Net Income (loss) | $ | 123 | $ | 63 | $ | 108 | |||||||||
Reconciling items to EBITDA | |||||||||||||||
Financial (income) expense | 76 | 75 | 115 | ||||||||||||
(Benefit) provision for income taxes | (30 | ) | (54 | ) | (44 | ) | |||||||||
Depreciation | 157 | 155 | 146 | ||||||||||||
Amortization | 380 | 405 | 380 | ||||||||||||
EBITDA | $ | 706 | $ | 644 | $ | 705 | |||||||||
Reconciling items to adjusted EBITDA | |||||||||||||||
Results of equity-accounted investees | (6 | ) | (34 | ) | (5 | ) | |||||||||
Restructuring 1) | 7 | 2 | 3 | ||||||||||||
Stock-based compensation | 68 | 67 | 77 | ||||||||||||
Merger-related costs 1) | 42 | 35 | 14 | ||||||||||||
Other incidental items 1) | 29 | 16 | 6 | ||||||||||||
Adjusted EBITDA | $ | 846 | $ | 730 | $ | 800 | |||||||||
Trailing twelve month adjusted EBITDA | $ | 3,116 | $ | 3,070 | $ | 2,663 | |||||||||
1) Excluding depreciation property, plant and equipment and amortization of software related to: | |||||||||||||||
Other incidental items | - | - | (15 | ) | |||||||||||
($ in millions) | Three Months Ended | ||||||||||||||
Oct. 1, 2017 | July 2, 2017 | Oct. 2, 2016 | |||||||||||||
Net cash provided by (used for) operating activities | $ | 643 | $ | 441 | $ | 718 | |||||||||
Net capital expenditures on property, plant and equipment | (161 | ) | (96 | ) | (98 | ) | |||||||||
Non-GAAP free cash flow | $ | 482 | $ | 345 | $ | 620 | |||||||||
Non-GAAP free cash flow as a percent of Revenue | 20 | % | 16 | % | 25 | % | |||||||||