| Key Statistics (Dollars in millions) | Q3 16 | Q2 16 | Q3 15 | |||||||||
| Cash from operations | $ | 963 | $ | 622 | $ | 592 | ||||||
| Depreciation | $ | 117 | $ | 107 | $ | 59 | ||||||
| Amortization of intangible assets | $ | 939 | $ | 933 | $ | 197 | ||||||
| Capital expenditures | $ | 232 | $ | 158 | $ | 148 | ||||||
| Days sales outstanding ("DSO") | 52 | 48 | 43 | |||||||||
| Inventory days on hand ("DOH") | 66 | 59 | 64 | |||||||||
| Non-GAAP DSO | 52 | 47 | 42 | |||||||||
| Non-GAAP Inventory DOH | 74 | 72 | 67 | |||||||||
Fourth Quarter Fiscal Year 2016 Business Outlook
Based on current business trends and conditions, the outlook for continuing operations for the fourth quarter of fiscal year 2016, ending October 30, 2016, is expected to be as follows:
| GAAP | Reconciling Items | Non-GAAP | ||||
| Net revenue | $4,090M +/- $75M | $10M | $4,100M +/- $75M | |||
| Gross margin | 52.25% +/- 1% | $341M | 60.50% +/- 1% | |||
| Operating expenses | $1,450M | $642M | $808M | |||
| Interest expense and other | $153M | $49M | $104M | |||
| Provision for (benefit from) income taxes | ($295)M | ($366)M | $71M | |||
| Diluted share count | 434M | 14M | 448M | |||
- Non-GAAP net revenue includes $10 million of licensing revenue not included in GAAP revenue, as a result of the effects of purchase accounting for acquisitions;
- Non-GAAP gross margin includes the effects of $10 million of licensing revenue, and excludes the effects of $86 million of inventory step-up charges to record BRCM inventory at fair value, as part of the purchase accounting for the Acquisition, $224 million of amortization of intangible assets, $14 million of share-based compensation expense, and $7 million of restructuring charges;
- Non-GAAP operating expenses exclude $356 million of amortization of intangible assets, $199 million of share-based compensation expense, $46 million of restructuring charges, and $41 million of acquisition-related costs;
- Non-GAAP interest expense and other excludes $49 million of losses on extinguishment of long-term debt;
- Non-GAAP tax provision excludes $366 million tax benefit representing the tax effects of the reconciling items noted above; and
- Non-GAAP diluted share count excludes the impact of share-based compensation expense expected to be incurred in future periods and not yet recognized in the Company’s financial statements, which would otherwise be assumed to be used to repurchase shares under the GAAP treasury stock method.
