NXP Semiconductors Reports Fourth Quarter and Full-Year 2015

NXP Semiconductors Reports Fourth Quarter and Full-Year 2015 Results

NXP Semiconductors
Table 5: Financial Reconciliation of GAAP to non-GAAP Results (unaudited)



($ in millions except share data)	Three Months Ended											Full Year
	Dec. 31, 2015					Oct. 4, 2015			Dec. 31, 2014				2015			2014

Revenue	$	1,606				$	1,522		$	1,537		$	6,101		$	5,647

GAAP Gross profit	$	619				$	740		$	704		$	2,787		$	2,640
PPA effects ¹⁾		(167	)				(3	)		(3	)		(178	)		(12	)
Restructuring ²⁾		(13	)				(4	)		(5	)		(18	)		(43	)
Stock Based Compensation ²⁾		(7	)				(3	)		(3	)		(15	)		(10	)
Other incidentals		-					2			(1	)		(1	)		(8	)
Non-GAAP Gross profit	$	806				$	748		$	716		$	2,999		$	2,713

GAAP Gross margin		38.5	%				48.6	%		45.8	%		45.7	%		46.8	%

Non-GAAP Gross margin		50.2	%				49.1	%		46.6	%		49.2	%		48.0	%

GAAP Research and development	$	(318	)			$	(178	)	$	(198	)	$	(890	)	$	(763	)
Restructuring ²⁾		(79	)				1			(4	)		(91	)		(9	)
Stock based compensation ²⁾		(21	)				(7	)		(7	)		(45	)		(20	)
Other incidentals		1					-			-			1			(1	)
Non-GAAP Research and development	$	(219	)			$	(172	)	$	(187	)	$	(755	)	$	(733	)

GAAP Selling, general and administrative	$	(413	)			$	(162	)	$	(167	)	$	(922	)	$	(686	)
Restructuring ²⁾		(147	)				(1	)		(3	)		(155	)		(5	)
Stock based compensation ²⁾		(83	)				(24	)		(24	)		(156	)		(103	)
Merger-related costs		(27	)				(3	)		-			(42	)		-
Other incidentals		(1	)				(3	)		3			(4	)		(7	)
Non-GAAP Selling, general and administrative	$	(155	)			$	(131	)	$	(143	)	$	(565	)	$	(571	)

GAAP amortization of acquisition-related intangible assets	$	(133	)			$	(29	)	$	(31	)	$	(223	)	$	(152	)
PPA effects		(133	)				(29	)		(31	)		(223	)		(152	)
Non-GAAP amortization of acquisition-related intangible assets	$	-				$	-		$	-		$	-		$	-

GAAP Other income (expense)	$	1,258				$	4		$	2		$	1,263		$	10
PPA effects		-					-			-			-			(3	)
Other incidentals ³⁾		1,257					-			(1	)		1,257			8
Non-GAAP Other income (expense)	$	1				$	4		$	3		$	6		$	5

GAAP Operating income (loss)	$	1,013				$	375		$	310		$	2,015		$	1,049
PPA effects ¹⁾		(300	)				(32	)		(34	)		(401	)		(167	)
Restructuring ²⁾		(239	)				(4	)		(12	)		(264	)		(57	)
Stock based compensation ²⁾		(111	)				(34	)		(34	)		(216	)		(133	)
Merger-related costs		(27	)				(3	)		-			(42	)		-
Other incidentals ³⁾		1,257					(1	)		1			1,253			(8	)
Non-GAAP Operating income (loss)	$	433				$	449		$	389		$	1,685		$	1,414

GAAP Operating margin		63.1	%				24.6	%		20.2	%		33.0	%		18.6	%

Non-GAAP Operating margin		27.0	%				29.5	%		25.3	%		27.6	%		25.0	%

GAAP Financial income (expense)	$	(174	)			$	16		$	(137	)	$	(529	)	$	(410	)
Non-cash interest expense on convertible notes		(10	)				(9	)		(3	)		(38	)		(3	)
Foreign exchange gain (loss) on debt		(31	)				6			(91	)		(193	)		(246	)
Gain (loss) on extinguishment of long term debt		-					-			-			-			(3	)
Changes in fair value of warrant liability		(1	)				67			(2	)		(31	)		(2	)
Other financial expense		(76	)				(4	)		(4	)		(95	)		(17	)
Non-GAAP Financial income (expense)	$	(56	)			$	(44	)	$	(37	)	$	(172	)	$	(139	)

GAAP Income tax benefit (provision)	$	148				$	(15	)	$	(9	)	$	104		$	(40	)
Other adjustments		167					(8	)		(2	)		144			(16	)
Non-GAAP Cash tax (expense)	$	(19	)			$	(7	)	$	(7	)	$	(40	)	$	(24	)

GAAP Results relating to equity-accounted investees	$	2				$	3		$	3		$	9		$	8
Other adjustments		2					3			3			9			8
Non-GAAP Results relating to equity-accounted investees	$	-				$	-		$	-		$	-		$	-

GAAP Net income (loss)	$	989				$	379		$	167		$	1,599		$	607
PPA effects ¹⁾		(300	)				(32	)		(34	)		(401	)		(167	)
Restructuring ²⁾		(239	)				(4	)		(12	)		(264	)		(57	)
Stock based compensation ²⁾		(111	)				(34	)		(34	)		(216	)		(133	)
Merger-related costs		(27	)				(3	)		-			(42	)		-
Other incidentals ³⁾		1,257					(1	)		1			1,253			(8	)
Other adjustments		51		4	)		55			(99	)		(204	)		(279	)
Non-GAAP Net income (loss)	$	358				$	398		$	345		$	1,473		$	1,251

GAAP Net income (loss) attributable to stockholders	$	972				$	361		$	149		$	1,526		$	539
PPA effects ¹⁾		(300	)				(32	)		(34	)		(401	)		(167	)
Restructuring ²⁾		(239	)				(4	)		(12	)		(264	)		(57	)
Stock based compensation ²⁾		(111	)				(34	)		(34	)		(216	)		(133	)
Merger-related costs		(27	)				(3	)		-			(42	)		-
Other incidentals ³⁾		1,257					(1	)		1			1,253			(8	)
Other adjustments		51		4	)		55			(99	)		(204	)		(279	)
Non-GAAP Net income (loss) attributable to stockholders	$	341				$	380		$	327		$	1,400		$	1,183

GAAP Weighted average shares - diluted		272,785					242,122			242,901			250,116			248,609
Non-GAAP Adjustment		-					-			-			-			-
Non-GAAP Weighted average shares - diluted		272,785					242,122			242,901			250,116			248,609

GAAP Diluted net income (loss) attributable to stockholders per share	$	3.56				$	1.49		$	0.61		$	6.10		$	2.17
Non-GAAP Diluted net income (loss) attributable to stockholders per share	$	1.25				$	1.57		$	1.35		$	5.60		$	4.76


¹⁾ Includes Purchase Accounting effect on inventory that will be amortized over 4 months.

²⁾ Includes severance, contract termination costs and accelerated vesting charges related to the acquisition of Freescale.

³⁾ Includes the recognition of the gain on the sale of the RF Power and Bipolar businesses.

⁴⁾ Includes: During 4Q15: Non-cash interest expense on convertible Notes: ($10) million; Foreign exchange loss on debt: ($31) million; Changes in fair value of warrant liability: ($1) million; Other financial expense: ($76) million; Results relating to equity-accounted investees: $2 million; and difference between book and cash income taxes: $167 million.

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