NXP Semiconductors Reports Second Quarter 2016 Results


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



	($ in millions except share data)	Three Months Ended
		July 3, 2016					April 3, 2016					July 5, 2015

	Revenue	$	2,365				$	2,224				$	1,506

	GAAP Gross profit	$	1,099				$	597				$	724
	PPA effects		(66	)				(496	)	1	)		(5	)
	Restructuring		(10	)				(4	)				-
	Stock Based Compensation		(12	)				(15	)				(3	)
	Other incidentals		4					-					(2	)
	Non-GAAP Gross profit	$	1,183				$	1,112				$	734

	GAAP Gross margin		46.5	%				26.8	%				48.1	%

	Non-GAAP Gross margin		50.0	%				50.0	%				48.7	%

	GAAP Research and development	$	(416	)			$	(403	)			$	(195	)
	Restructuring		(32	)				(11	)				(5	)
	Stock based compensation		(30	)				(32	)				(9	)
	Other incidentals		1					-					-
	Non-GAAP Research and development	$	(355	)			$	(360	)			$	(181	)

	GAAP Selling, general and administrative	$	(283	)			$	(296	)			$	(167	)
	PPA effects		(9	)				(1	)				-
	Restructuring		2					(5	)				(4	)
	Stock based compensation		(38	)				(52	)				(24	)
	Merger-related costs		(11	)				(5	)				(4	)
	Other incidentals		(5	)				-					1
	Non-GAAP Selling, general and administrative	$	(222	)			$	(233	)			$	(136	)

	GAAP amortization of acquisition-related intangible assets	$	(436	)			$	(367	)			$	(31	)
	PPA effects		(436	)				(367	)				(31	)
	Non-GAAP amortization of acquisition-related intangible assets	$	-				$	-				$	-

	GAAP Other income (expense)	$	10				$	(2	)			$	1
	PPA effects		(3	)				-					-
	Other incidentals		13					(2	)				-
	Non-GAAP Other income (expense)	$	-				$	-				$	1
			-
	GAAP Operating income (loss)	$	(26	)			$	(471	)			$	332
	PPA effects		(514	)				(864	)	1	)		(36	)
	Restructuring		(40	)				(20	)				(9	)
	Stock based compensation		(80	)				(99	)				(36	)
	Merger-related costs		(11	)				(5	)				(4	)
	Other incidentals		13					(2	)				(1	)
	Non-GAAP Operating income (loss)	$	606				$	519				$	418

	GAAP Operating margin		-1.1	%				-21.2	%				22.0	%

	Non-GAAP Operating margin		25.6	%				23.3	%				27.8	%

	GAAP Financial income (expense)	$	(126	)			$	(116	)			$	2
	PPA effects	$	3					3					-
	Non-cash interest expense on convertible notes		(10	)				(10	)				(9	)
	Foreign exchange gain (loss)		(2	)				(9	)				40
	Extinguishment on debt		(23	)				(3	)				-
	Changes in fair value of warrant liability		-					-					18
	Other financial expense		(6	)				(4	)				(11	)
	Non-GAAP Financial income (expense)	$	(88	)			$	(93	)			$	(36	)

	GAAP Income tax benefit (provision)	$	152				$	199				$	(14	)
	Other adjustments		170					213					(4	)
	Non-GAAP Cash tax (expense)	$	(18	)			$	(14	)			$	(10	)

	GAAP Results relating to equity-accounted investees	$	1				$	1				$	1
	Other adjustments		1					1					1
	Non-GAAP Results relating to equity-accounted investees	$	-				$	-				$	-

	GAAP Net income (loss)	$	1				$	(387	)			$	321
	PPA effects		(511	)				(861	)	1	)		(36	)
	Restructuring		(40	)				(20	)				(9	)
	Stock based compensation		(80	)				(99	)				(36	)
	Merger-related costs		(11	)				(5	)				(4	)
	Other incidentals		13					(2	)				(1	)
	Other adjustments		130		2	)		188					35
	Non-GAAP Net income (loss)	$	500				$	412				$	372

	GAAP Net income (loss) attributable to stockholders	$	(13	)			$	(398	)			$	300
	PPA effects		(511	)				(861	)	1	)		(36	)
	Restructuring		(40	)				(20	)				(9	)
	Stock based compensation		(80	)				(99	)				(36	)
	Merger-related costs		(11	)				(5	)				(4	)
	Other incidentals		13					(2	)				(1	)
	Other adjustments		130		2	)		188					35
	Non-GAAP Net income (loss) attributable to stockholders	$	486				$	401				$	351

	GAAP Weighted average shares - diluted		341,299					341,830					243,288
	Non-GAAP Adjustment		8,064					9,207					-
	Non-GAAP Weighted average shares - diluted		349,363					351,037					243,288

	GAAP Diluted net income (loss) attributable to stockholders per share	$	(0.04	)			$	(1.16	)			$	1.23
	Non-GAAP Diluted net income (loss) attributable to stockholders per share	$	1.39				$	1.14				$	1.44



1) Includes Purchase Accounting effect on inventory that was fully amortized as of April 3, 2016. 2) Includes: During 2Q16: Non-cash interest expense on convertible Notes: ($10) million; Foreign exchange losses: ($2) million; Extinguishment of debt: ($23) million; Other financial expense: ($6) million; Results relating to equity-accounted investees: $1 million; and the difference between book and cash income taxes: $170 million.

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