• Analog revenue increased primarily due to Power Management. Silicon Valley Analog and High Performance Analog also increased while High Volume Analog & Logic declined. Operating profit increased primarily due to higher gross profit, which benefited from higher revenue and lower manufacturing costs. This higher gross profit was partially offset by higher operating expenses.
• Embedded Processing revenue increased primarily due to Microcontrollers. Processors and Connectivity also increased. Operating profit increased due to higher revenue and associated gross profit, which was partially offset by higher operating expenses.
• Other revenue declined primarily due to legacy wireless products. Operating profit increased due to lower operating expenses and Restructuring charges/other, partially offset by lower revenue and associated gross profit.

Non-GAAP financial information

This release includes references to free cash flow and various ratios based on that measure.  These are financial measures that were not prepared in accordance with GAAP.  Free cash flow was calculated by subtracting Capital expenditures from the most directly comparable GAAP measure of Cash flow from operating activities (also referred to as Cash flow from operations). 

The free cash flow measures were compared to the following GAAP items to determine the various non-GAAP ratios presented below and referred to in the release:  Revenue, Dividends paid and Stock repurchases.  Reconciliation to the most directly comparable GAAP-based ratios is provided in the table below.

The company believes these non-GAAP measures provide insight into its liquidity, its cash-generating capability and the amount of cash available to return to investors, as well as insight into its financial performance.  These non-GAAP measures are supplemental to the comparable GAAP measures.