Press Release

NXP Semiconductors Reports Fourth Quarter and Full-year 2019 Results

February 3, 2020 at 5:00 PM EST

EINDHOVEN, The Netherlands, Feb. 03, 2020 (GLOBE NEWSWIRE) -- NXP Semiconductors N.V. (NASDAQ: NXPI) today reported financial results for the fourth quarter and full year 2019, ended December 31, 2019.

“NXP delivered full-year revenue of $8.88 billion, a decline of 6 percent year-on-year, against a very challenging semiconductor industry backdrop. As we look forward to 2020, we are increasingly confident that the demand trends within our end markets are beginning to moderately improve.  Notwithstanding the operating environment we experienced in 2019, NXP drove improved profitability, strong free cash flow generation, and continued to successfully execute our strategy within our target markets. During 2019, we returned $1.76 billion to our shareholders.  Over the course of the year, we significantly enhanced our product portfolio. We successfully acquired the Marvell wireless connectivity assets, and introduced new, innovative products and solutions. Our customers have already begun to adopt many of these new solutions, and as they continue to ramp into volume production, we anticipate new products will help to underpin NXP’s long-term growth, financial and capital return targets,” said Richard Clemmer, NXP Chief Executive Officer.

Key Highlights

  • Fourth-quarter revenue was $2.3 billion, down 4 percent year-on-year;
  • Fourth quarter GAAP gross margin was 52.5 percent, and GAAP operating margin was 8.6 percent;
  • Fourth-quarter non-GAAP gross margin was 54.2 percent, and non-GAAP operating margin was 29.9 percent;
  • Full-year cash flow from operations was $2.37 billion, with net capex investments of $503 million, resulting in non-GAAP free cash flow of $1.87 billion;
  • On November 19, 2019, the NXP Board of Directors approved the payment of an interim dividend for the fourth quarter 2019 of $0.375 per ordinary share. Additionally, the NXP Board of Directors authorized to resume the share buy-back program in 2020, authorizing up to $2 billion of share repurchases to be executed at times and manners determined by the company management;
  • On December 2, 2019, NXP retired the $1.15 billion outstanding principal amount of the 1.0% Cash Convertible Senior Notes at maturity;
  • On December 6, 2019, NXP announced the completion of the acquisition of the wireless connectivity assets of Marvell, pursuant to the terms of the previously announced agreement from May 2019;
  • In 2019 NXP, returned $1.76 billion to shareholders through previously announced share repurchases and dividend payments. 


Summary of Reported Fourth Quarter and Full-year 2019 ($ millions, unaudited) (1)

  Q4 2019 Q3 2019 Q4 2018 Q - Q Y - Y 2019   2018 Y - Y
Total Revenue $ 2,301   $ 2,265   $ 2,403   2 % -4 % $ 8,877   $ 9,407   -6 %
GAAP Gross Profit $ 1,209   $ 1,186   $ 1,243   2 % -3 % $ 4,618   $ 4,851   -5 %
Gross Profit Adjustments (i) $ (39 ) $ (30 ) $ (32 )     (131 ) $ (129 )  
Non-GAAP Gross Profit $ 1,248   $ 1,216   $ 1,275   3 % -2 % $ 4,749   $ 4,980   -5 %
GAAP Gross Margin 52.5 % 52.4 % 51.7 %     52.0 % 51.6 %  
Non-GAAP Gross Margin 54.2 % 53.7 % 53.1 %     53.5 % 52.9 %  
GAAP Operating Income / (Loss) $ 197   $ 233   $ 224   -15 % -12 % $ 641   $ 2,710   -76 %
Operating Income Adjustments (i) $ (490 ) $ (454 ) $ (507 )     $ (1,932 ) $ 11    
Non-GAAP Operating Income $ 687   $ 687   $ 731   % -6 % $ 2,573   $ 2,699   -5 %
GAAP Operating Margin 8.6 % 10.3 % 9.3 %     7.2 % 28.8 %  
Non-GAAP Operating Margin 29.9 % 30.3 % 30.4 %     29.0 % 28.7 %  
                           


Additional information                
Automotive $ 1,097   $ 1,048   $ 1,112   5 % -1 % $ 4,212   $ 4,507   -7 %
Industrial & IoT $ 415   $ 426   $ 435   -3 % -5 % $ 1,599   $ 1,813   -12 %
Mobile $ 332   $ 321   $ 344   3 % -3 % $ 1,191   $ 1,164   2 %
Comm. Infra. & Other $ 457   $ 470   $ 483   -3 % -5 % $ 1,875   $ 1,787   5 %
Manufacturing Services ("MSA") $   $   $ 29   NM   NM   $   $ 136   NM  
DIO   102     98     102            
DPO   81     74     80            
DSO   26     32     30            
Cash Conversion Cycle   47     56     52            
Channel Inventory (months)   2.3     2.3     2.4            
Financial Leverage (ii)   2.0x     1.6x     1.4x            
                             


1.   
Additional Information for the Fourth Quarter and Full-year 2019:

  1. For an explanation of GAAP to non-GAAP adjustments, please see “Non-GAAP Financial Measures”.
  2. Financial leverage is defined as net debt divided by trailing twelve months adjusted EBITDA.


  • During the fourth quarter of 2019, NXP repurchased 0.7 million shares for a total cost of $74 million and paid cash dividends of $105 million. Full year 2019, NXP repurchased 15.9 million shares for a total cost of $1,443 million, paid cash dividends of $319 million.
  • Weighted average number of diluted shares for the three-month period ended December 31, 2019 was 285.5 million. Weighted average number of diluted shares for the twelve-month period ended December 31, 2019 was 285.9 million.
  • Cash paid for income taxes related to on-going operations was $34 million. Full year 2019 $120 million.


Guidance for the First Quarter 2020: ($ millions) (1)

  Guidance Range
  GAAP   Reconciliation   non-GAAP
  Low   Mid   High       Low   Mid   High
Total Revenue $ 2,195     $ 2,225     $ 2,255         $ 2,195     $ 2,225     $ 2,255  
Q-Q -5 %   -3 %   -2 %       -5 %   -3 %   -2 %
Y-Y 5 %   6 %   8 %       5 %   6 %   8 %
Gross Profit $ 1,114     $ 1,137     $ 1,160     $ (47 )   $ 1,161     $ 1,184     $ 1,207  
Gross Margin 50.8 %   51.1 %   51.4 %       52.9 %   53.2 %   53.5 %
Operating Income (loss) $ 165     $ 179     $ 193     $ (434 )   $ 599     $ 613     $ 627  
Operating Margin 7.5 %   8.0 %   8.6 %       27.3 %   27.6 %   27.8 %
Financial Income (expense) $ (80 )   $ (80 )   $ (80 )   $ (2 )   $ (78 )   $ (78 )   $ (78 )
                                                       

Note (1) Additional Information:

  1. GAAP Gross Profit is expected to include Purchase Price Accounting (“PPA”) effects, $(36) million; Stock Based Compensation, $(11) million;
  2. GAAP Operating Income (loss) is expected to include PPA effects, $(418) million; Stock Based Compensation, $(93) million; Merger related costs $(3) million; Restructuring and Other Incidentals, $80 million;
  3. GAAP Financial Income (expense) is expected to include Other financial expense $(2) million;
  4. Net cash paid for income taxes related to on-going operations is expected to be approximately $(32) million;
  5. Non-controlling interest is expected to be approximately $(6) million;
  6. Weighted average diluted share count is expected to be approximately 284.5 million.

NXP has based the guidance included in this release on judgments and estimates that management believes are reasonable given its assessment of historical trends and other information reasonably available as of the date of this release. Please note, the guidance included in this release consists of predictions only, and is subject to a wide range of known and unknown risks and uncertainties, many of which are beyond NXP's control. The guidance included in this release should not be regarded as representations by NXP that the estimated results will be achieved. Actual results may vary materially from the guidance we provide today. In relation to the use of non-GAAP financial information see the note regarding "Non-GAAP Financial Measures" below. For the factors, risks, and uncertainties to which judgments, estimates and forward-looking statements generally are subject see the note regarding "Forward-looking Statements." We undertake no obligation to publicly update or revise any forward-looking statements, including the guidance set forth herein, to reflect future events or circumstances.

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 https://investors.nxp.com 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) adjusted net income, adjusted EBITDA and trailing 12 month adjusted EBITDA, and (xi) 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, and foreign exchange gains and losses.

Conference Call and Webcast Information

NXP will host a conference call on February 4, 2020 at 8:00 a.m. U.S. Eastern Time (2:00 p.m. Central European Time) to discuss its fourth quarter and full-year 2019 results and provide an outlook for the first quarter of 2020.

Interested parties may join the conference call by dialing 1 – 888 – 603 – 7644 (within the U.S.) or 1 – 484 – 747 - 6631 (outside of the U.S.). The participant pass-code is 3286469. To listen to a webcast of the event, please visit the Investor Relations section of the NXP website at https://investors.nxp.com. The webcast will be recorded and available for replay shortly after the call concludes.

About NXP Semiconductors

NXP Semiconductors N.V. (NASDAQ: NXPI) enables secure connections for a smarter world, advancing solutions that make lives easier, better, and safer. As the world leader in secure connectivity solutions for embedded applications, NXP is driving innovation in the automotive, industrial & IoT, mobile, and communication infrastructure markets. Built on more than 60 years of combined experience and expertise, the company has approximately 30,000 employees in more than 30 countries and posted revenue of $8.88 billion in 2019. Find out more at www.nxp.com.

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; including the requirement to suspend activities with customers or suppliers because of changing import and export regulations; 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 achieve targeted efficiencies and cost savings; the ability to successfully hire and retain key management and senior product architects; and, the ability to maintain good relationships with our suppliers. In addition, this document contains information concerning the semiconductor industry and NXP’s business generally, which is forward-looking in nature and is based on a variety of assumptions regarding the ways in which the semiconductor industry, NXP’s markets and product areas may develop. NXP has based these assumptions on information currently available, if any one or more of these assumptions turn out to be incorrect, actual results may differ from those predicted. While NXP does not know what impact any such differences may have on its business, if there are such differences, its future results of operations and its financial condition could be materially adversely affected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak to results only as of the date the statements were made. Except for any ongoing obligation to disclose material information as required by the United States federal securities laws, NXP does not have any intention or obligation to publicly update or revise any forward-looking statements after we distribute this document, whether to reflect any future events or circumstances or otherwise. For a discussion of potential risks and uncertainties, please refer to the risk factors listed in our SEC filings. Copies of our SEC filings are available on our Investor Relations website, https://investors.nxp.com or from the SEC website, www.sec.gov.

   
For further information, please contact: 
   
Investors:    Media:
Jeff Palmer      Jacey Zuniga
jeff.palmer@nxp.com  jacey.zuniga@nxp.com
+1 408 518 5411    +1 512 895 7398
   

NXP-Corp


NXP Semiconductors
Table 1: Condensed consolidated statement of operations (unaudited)

($ in millions except share data) Three months ended   Full-year
  December 31,
2019
  September 29,
2019
  December 31,
2018
  2019   2018
                   
Revenue $ 2,301     $ 2,265     $ 2,403     $ 8,877     $ 9,407  
Cost of revenue (1,092 )   (1,079 )   (1,160 )   (4,259 )   (4,556 )
Gross profit 1,209     1,186     1,243     4,618     4,851  
Research and development (424 )   (396 )   (403 )   (1,643 )   (1,700 )
Selling, general and administrative (225 )   (221 )   (251 )   (924 )   (993 )
Amortization of acquisition-related intangible assets (365 )   (358 )   (364 )   (1,435 )   (1,449 )
Total operating expenses (1,014 )   (975 )   (1,018 )   (4,002 )   (4,142 )
Other income (expense) 2     22     (1 )   25     2,001  
Operating income (loss) 197     233     224     641     2,710  
Financial income (expense):                  
Extinguishment of debt     (1 )       (11 )   (26 )
Other financial income (expense) (93 )   (84 )   (77 )   (339 )   (309 )
Income (loss) before income taxes 104     148     147     291     2,375  
Benefit (provision) for income taxes 20     (28 )   141     (20 )   (176 )
Results relating to equity-accounted investees (1 )   (1 )   1     1     59  
Net income (loss) 123     119     289     272     2,258  
Less: Net income (loss) attributable to non-controlling interests 9     10     13     29     50  
Net income (loss) attributable to stockholders 114     109     276     243     2,208  
                   
Earnings per share data:                  
Net income (loss) per common share attributable to stockholders  in $        
Basic $ 0.41     $ 0.39     $ 0.94     $ 0.86     $ 6.78  
Diluted $ 0.40     $ 0.38     $ 0.94     $ 0.85     $ 6.72  
                   
Weighted average number of shares of common stock outstanding during the period (in thousands):        
Basic 280,766     279,074     293,170     282,056     325,781  
Diluted 285,518     283,518     294,947     285,911     328,606  
                   
                   


NXP Semiconductors
Table 2: Condensed consolidated balance sheet (unaudited)

  ($ in millions) As of
    December 31,
 2019
  September 29,
 2019
  December 31,
 2018
ASSETS          
Current assets:          
  Cash and cash equivalents $ 1,045     $ 3,537     2,789  
  Accounts receivable, net 667     786     792  
  Assets held for sale 50     61      
  Inventories, net 1,192     1,134     1,279  
  Other current assets 313     426     365  
Total current assets 3,267     5,944     5,225  
             
Non-current assets:          
  Other non-current assets 732     712     545  
  Property, plant and equipment, net 2,448     2,401     2,436  
  Identified intangible assets, net 3,620     3,406     4,467  
  Goodwill 9,949     8,791     8,857  
Total non-current assets 16,749     15,310     16,305  
             
Total assets 20,016     21,254     21,530  
             
LIABILITIES AND EQUITY          
Current liabilities:          
  Accounts payable 944     862     999  
  Restructuring liabilities-current 32     41     60  
  Other current liabilities 815     1,081     1,219  
  Short-term debt     1,142     1,107  
Total current liabilities 1,791     3,126     3,385  
             
Non-current liabilities:          
  Long-term debt 7,365     7,363     6,247  
  Restructuring liabilities         5  
  Deferred tax liabilities 282     285     450  
  Other non-current liabilities 923     885     753  
Total non-current liabilities 8,570     8,533     7,455  
             
  Non-controlling interests 214     205     185  
  Stockholders’ equity 9,441     9,390     10,505  
Total equity 9,655     9,595     10,690  
           
Total liabilities and equity 20,016     21,254     21,530  
             
             


NXP Semiconductors
Table 3: Condensed consolidated statement of cash flows (unaudited)

($ in millions) Three months ended   Full-year
  December 31,
 2019
  September 29,
 2019
  December 31,
 2018
  2019   2018
Cash flows from operating activities:                  
Net income (loss) $ 123     $ 119     $ 289     $ 272     $ 2,258  
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:                  
Depreciation and amortization 522     517     503     2,047     1,987  
Stock-based compensation 89     84     93     346     314  
Amortization of discount on debt 8     12     11     42     42  
Amortization of debt issuance costs 3     2     3     11     10  
Net (gain) loss on sale of assets     (21 )       (20 )    
(Gain) loss on extinguishment of debt     1         11     26  
Results relating to equity-accounted investees 1     1     (1 )   (1 )   (54 )
Deferred tax expense (benefit) (49 )   (33 )   (52 )   (175 )   (211 )
Changes in operating assets and liabilities:                  
(Increase) decrease in receivables and other current assets 144     (17 )   51     116     187  
(Increase) decrease in inventories (7 )   13     5     128     (65 )
Increase (decrease) in accounts payable and other liabilities (35 )   43     (188 )   (460 )   (129 )
(Increase) decrease in other non-current assets 7     30     4     43     (22 )
Exchange differences 9     (1 )   13     15     14  
Other items (1 )   (4 )       (2 )   12  
Net cash provided by (used for) operating activities 814     746     731     2,373     4,369  
                   
Cash flows from investing activities:                  
Purchase of identified intangible assets (30 )   (21 )   (4 )   (102 )   (50 )
Capital expenditures on property, plant and equipment (138 )   (138 )   (170 )   (526 )   (611 )
Proceeds from the disposals of property, plant and equipment     23         23     1  
Purchase of interests in businesses, net of cash acquired (1,698 )           (1,698 )   (18 )
Proceeds from sale of interests in businesses             37     159  
Proceeds from return of equity investment                 4  
Purchase of available-for-sale securities     (2 )   (2 )   (19 )   (9 )
Proceeds from the sale of securities         2     1     2  
Net cash provided by (used for) investing activities (1,866 )   (138 )   (174 )   (2,284 )   (522 )
                   
Cash flows from financing activities:                  
Payment of cash convertible note (1,150 )           (1,150 )    
Proceeds from settlement of cash convertible note hedge 144             144      
Payment of bond hedge derivatives - convertible option (144 )   (1 )       (145 )    
Repayment of Bridge Loan         (1,000 )       (1,000 )
Proceeds from Bridge Loan                 1,000  
Repurchase of long-term debt     (47 )       (600 )   (1,273 )
Principal payments on long-term debt                 (1 )
Proceeds from the issuance of long-term debt         1,997     1,750     1,997  
Cash paid for debt issuance costs     (1 )   (12 )   (24 )   (23 )
Cash paid for terminated acquisition adjustment event         (60 )       (60 )
Dividends paid to non-controlling interests                 (54 )
Dividends paid to common stockholders (105 )   (70 )   (74 )   (319 )   (74 )
Proceeds from issuance of common stock through stock plans 14     33     3     84     39  
Purchase of treasury shares and restricted stock unit withholdings (74 )   (9 )   (424 )   (1,443 )   (5,006 )
Cash paid on behalf of shareholders for tax on repurchased shares (128 )       (142 )   (128 )   (142 )
Net cash provided by (used for) financing activities (1,443 )   (95 )   288     (1,831 )   (4,597 )
                   
Effect of changes in exchange rates on cash positions 3     (6 )       (2 )   (8 )
Increase (decrease) in cash and cash equivalents (2,492 )   507     845     (1,744 )   (758 )
Cash and cash equivalents at beginning of period 3,537     3,030     1,944     2,789     3,547  
Cash and cash equivalents at end of period 1,045     3,537     2,789     1,045     2,789  
                   
Net cash paid during the period for:                  
Interest 95     44     74     242     177  
Income tax 34     59     61     368     188  
Non-cash adjustment related to the adoption of ASC 606:                  
Receivables and other current assets                 (36 )
Inventories                 22  
                             


NXP Semiconductors
Table 4: Financial Reconciliation of GAAP to non-GAAP Results (unaudited)

($ in millions) Three months ended   Full-year
  December 31,
 2019
  September 29,
 2019
  December 31,
 2018
  2019   2018
Revenue $ 2,301     $ 2,265     $ 2,403     $ 8,877     $ 9,407  
GAAP Gross Profit $ 1,209     $ 1,186     $ 1,243     $ 4,618     $ 4,851  
PPA Effects (28 )   (19 )   (19 )   (84 )   (78 )
Restructuring     1         (3 )    
Stock Based Compensation (11 )   (11 )   (12 )   (42 )   (40 )
Merger-related costs     (1 )   (1 )   (2 )   (11 )
Non-GAAP Gross Profit $ 1,248     $ 1,216     $ 1,275     $ 4,749     $ 4,980  
GAAP Gross margin 52.5 %   52.4 %   51.7 %   52.0 %   51.6 %
Non-GAAP Gross margin 54.2 %   53.7 %   53.1 %   53.5 %   52.9 %
GAAP Research and development $ (424 )   $ (396 )   $ (403 )   $ (1,643 )   $ (1,700 )
Restructuring             (16 )    
Stock based compensation (38 )   (34 )   (36 )   (141 )   (133 )
Merger-related costs (1 )   (1 )   (3 )   (7 )   (24 )
Non-GAAP Research and development $ (385 )   $ (361 )   $ (364 )   $ (1,479 )   $ (1,543 )
GAAP Selling, general and administrative $ (225 )   $ (221 )   $ (251 )   $ (924 )   $ (993 )
PPA effects (1 )   (5 )   (2 )   (9 )   (8 )
Restructuring 1         (1 )   (9 )   (7 )
Stock based compensation (40 )   (39 )   (45 )   (163 )   (141 )
Merger-related costs (3 )   (4 )   (11 )   (24 )   (78 )
Other incidentals (4 )   (3 )   (13 )   (16 )   (21 )
Non-GAAP Selling, general and administrative $ (178 )   $ (170 )   $ (179 )   $ (703 )   $ (738 )
GAAP amortization of acquisition-related intangible assets $ (365 )   $ (358 )   $ (364 )   $ (1,435 )   $ (1,449 )
PPA effects (365 )   (358 )   (364 )   (1,435 )   (1,449 )
Non-GAAP amortization of acquisition-related intangible assets $     $     $     $     $  
GAAP Other income (expense) $ 2     $ 22     $ (1 )   $ 25     $ 2,001  
Restructuring                 1  
Merger-related costs                 1,961  
Other incidentals     20         19     39  
Non-GAAP Other income (expense) $ 2     $ 2     $ (1 )   $ 6     $  
GAAP Operating income (loss) $ 197     $ 233     $ 224     $ 641     $ 2,710  
PPA effects (394 )   (382 )   (385 )   (1,528 )   (1,535 )
Restructuring 1     1     (1 )   (28 )   (6 )
Stock based compensation (89 )   (84 )   (93 )   (346 )   (314 )
Merger-related costs (4 )   (6 )   (15 )   (33 )   1,848  
Other incidentals (4 )   17     (13 )   3     18  
Non-GAAP Operating income (loss) $ 687     $ 687     $ 731     $ 2,573     $ 2,699  
GAAP Operating margin 8.6 %   10.3 %   9.3 %   7.2 %   28.8 %
Non-GAAP Operating margin 29.9 %   30.3 %   30.4 %   29.0 %   28.7 %
GAAP Financial Income (expense) $ (93 )   $ (85 )   $ (77 )   $ (350 )   $ (335 )
Non-cash interest expense on convertible notes (8 )   (12 )   (11 )   (42 )   (44 )
Foreign exchange gain (loss) (4 )   (2 )   (5 )   (17 )   (11 )
Gain (loss) on extinguishment of long-term debt     (1 )       (11 )   (26 )
Other financial expense (4 )   (4 )   (1 )   (15 )   (78 )
Non-GAAP Financial income (expense) $ (77 )   $ (66 )   $ (60 )   $ (265 )   $ (176 )
                   
                   



NXP Semiconductors
Table 5: Adjusted EBITDA and Free Cash Flow (unaudited)

($ in millions) Three months ended   Full-year
  December 31,
 2019
  September 29,
 2019
  December 31,
 2018
  2019   2018
Net income (loss) $ 123     $ 119     $ 289     $ 272     $ 2,258  
Reconciling items to adjusted net income                  
Financial (income) expense 93     85     77     350     335  
(Benefit) provision for income taxes (20 )   28     (141 )   20     176  
Depreciation 131     135     124     518     478  
Amortization 391     382     379     1,529     1,509  
Adjusted net income $ 718     $ 749     $ 728     $ 2,689     $ 4,756  
Reconciling items to adjusted EBITDA                  
Results of equity-accounted investees 1     1     (1 )   (1 )   (59 )
Purchase accounting effect on inventory 8             8      
Restructuring (1 )   (1 )   1     28     6  
Stock based costs 89     84     93     346     314  
Merger-related costs 4     6     15     33     (1,848 )
Other incidental items 4     (17 )   13     (3 )   (18 )
Adjusted EBITDA $ 823     $ 822     $ 849     $ 3,100     $ 3,151  
Trailing twelve month adjusted EBITDA $ 3,100     $ 3,126     $ 3,151     $ 3,100     $ 3,151  
                   
                   
($ in millions) Three months ended   Full-year
  December 31,
 2019
  September 29,
 2019
  December 31,
 2018
  2019   2018
Net cash provided by (used for) operating activities $ 814     $ 746     $ 731     $ 2,373     $ 4,369  
Net capital expenditures on property, plant and equipment (138 )   (115 )   (170 )   (503 )   (610 )
Non-GAAP free cash flow $ 676     $ 631     $ 561     $ 1,870     $ 3,759  
Non-GAAP free cash flow as percent of Revenue 29 %   28 %   23 %   21 %   40 %
                   

NXPJPEGLOGO.jpg

Source: NXP USA, Inc.