onsemi Exceeds Fourth Quarter Expectations and Announces $3 Billion Share Repurchase Program

onsemi (Nasdaq: ON) is driving disruptive innovations to help build a better future. With a focus on automotive and industrial end-markets, the company is accelerating change in megatrends such as vehicle electrification and safety, sustainable energy grids, industrial automation, and 5G and cloud infrastructure. onsemi offers a highly differentiated and innovative product portfolio, delivering intelligent power and sensing technologies that solve the world’s most complex challenges and leads the way to creating a safer, cleaner, and smarter world. onsemi is recognized as a Fortune 500® company and included in the S&P 500® index. Learn more about onsemi at www.onsemi.com.

onsemi, and the onsemi logo are trademarks of Semiconductor Components Industries, LLC. All other brand and product names appearing in this document are registered trademarks or trademarks of their respective holders. Although the Company references its website in this news release, information on the website is not to be incorporated herein.

This document includes “forward-looking statements,” as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included or incorporated in this document could be deemed forward-looking statements, particularly statements about the future financial performance of onsemi, including financial guidance for the first fiscal quarter of 2023, and statements regarding our new share repurchase program. Forward-looking statements are often characterized by the use of words such as “believes,” “estimates,” “expects,” “projects,” “may,” “will,” “intends,” “plans,” “anticipates,” “should” or similar expressions or by discussions of strategy, plans or intentions. All forward-looking statements in this document are made based on our current expectations, forecasts, estimates and assumptions and involve risks, uncertainties, and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements. Certain factors that could affect our future results or events are described under Part I, Item 1A “Risk Factors” in our 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 14, 2022 (our “2021 Form 10-K”) and Part II, Item IA “Risk Factors” in each of our Quarterly Reports on Form 10-Q filed with the SEC for the quarters ended April 1, 2022, July 1, 2022, and September 30, 2022, and from time-to-time in our other SEC reports (including in our 2022 Form 10-K). Readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update such information, except as may be required by law. Investing in our securities involves a high degree of risk and uncertainty, and you should carefully consider the trends, risks, and uncertainties described in this document, our 2021 Form 10-K and other reports filed with or furnished to the SEC before making any investment decision with respect to our securities. If any of these trends, risks, or uncertainties actually occurs or continues, our business, financial condition or operating results could be materially adversely affected, the trading prices of our securities could decline, and you could lose all or part of your investment. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement. 

ON SEMICONDUCTOR CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share and percentage data)

 

 

 

Quarter Ended

 

Year Ended

 

 

December 31, 2022

 

September 30, 2022

 

December 31, 2021

 

December 31, 2022

 

December 31, 2021

Revenue

 

$

2,103.6

 

 

$

2,192.6

 

 

$

1,846.1

 

 

$

8,326.2

 

 

$

6,739.8

 

Cost of revenue

 

 

1,083.1

 

 

 

1,134.3

 

 

 

1,013.9

 

 

 

4,249.0

 

 

 

4,025.5

 

Gross profit

 

 

1,020.5

 

 

 

1,058.3

 

 

 

832.2

 

 

 

4,077.2

 

 

 

2,714.3

 

Gross margin

 

 

48.5

%

 

 

48.3

%

 

 

45.1

%

 

 

49.0

%

 

 

40.3

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

136.4

 

 

 

145.4

 

 

 

160.6

 

 

 

600.2

 

 

 

655.0

 

Selling and marketing

 

 

74.2

 

 

 

69.5

 

 

 

70.2

 

 

 

287.9

 

 

 

293.6

 

General and administrative

 

 

97.2

 

 

 

84.9

 

 

 

83.5

 

 

 

343.2

 

 

 

304.8

 

Amortization of acquisition-related intangible assets

 

 

16.1

 

 

 

21.9

 

 

 

24.5

 

 

 

81.2

 

 

 

99.0

 

Restructuring, asset impairments and other charges, net

 

 

(7.7

)

 

 

40.3

 

 

 

13.1

 

 

 

17.9

 

 

 

71.4

 

Goodwill and intangible asset impairment

 

 

 

 

 

271.8

 

 

 

 

 

 

386.8

 

 

 

2.9

 

Total operating expenses

 

 

316.2

 

 

 

633.8

 

 

 

351.9

 

 

 

1,717.2

 

 

 

1,426.7

 

Operating income

 

 

704.3

 

 

 

424.5

 

 

 

480.3

 

 

 

2,360.0

 

 

 

1,287.6

 

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(27.5

)

 

 

(23.7

)

 

 

(32.0

)

 

 

(94.9

)

 

 

(130.4

)

Interest income

 

 

9.1

 

 

 

4.9

 

 

 

0.3

 

 

 

15.5

 

 

 

1.4

 

Gain (loss) on debt refinancing and prepayment

 

 

0.2

 

 

 

 

 

 

(2.8

)

 

 

(7.1

)

 

 

(29.0

)

Gain on divestiture of business

 

 

64.9

 

 

 

0.2

 

 

 

 

 

 

67.0

 

 

 

10.2

 

Other income

 

 

12.3

 

 

 

0.9

 

 

 

20.4

 

 

 

21.7

 

 

 

18.0

 

Other income (expense), net

 

 

59.0

 

 

 

(17.7

)

 

 

(14.1

)

 

 

2.2

 

 

 

(129.8

)

Income before income taxes

 

 

763.3

 

 

 

406.8

 

 

 

466.2

 

 

 

2,362.2

 

 

 

1,157.8

 

Income tax provision

 

 

(159.0

)

 

 

(94.9

)

 

 

(39.8

)

 

 

(458.4

)

 

 

(146.6

)

Net income

 

 

604.3

 

 

 

311.9

 

 

 

426.4

 

 

 

1,903.8

 

 

 

1,011.2

 

Less: Net income attributable to non-controlling interest

 

 

 

 

 

 

 

 

(0.5

)

 

 

(1.6

)

 

 

(1.6

)

Net income attributable to ON Semiconductor Corporation

 

$

604.3

 

 

$

311.9

 

 

$

425.9

 

 

$

1,902.2

 

 

$

1,009.6

 

Net income per share of common stock attributable to ON Semiconductor Corporation:

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.40

 

 

$

0.72

 

 

$

0.99

 

 

$

4.39

 

 

$

2.37

 

Diluted

 

$

1.35

 

 

$

0.70

 

 

$

0.96

 

 

$

4.24

 

 

$

2.27

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

 

 

432.2

 

 

 

432.9

 

 

 

431.1

 

 

 

433.2

 

 

 

425.7

 

Diluted

 

 

447.9

 

 

 

448.7

 

 

 

445.3

 

 

 

448.2

 

 

 

443.8

 

ON SEMICONDUCTOR CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in millions)

   

 

 

December 31,
2022

 

September 30,
2022

 

December 31,
2021

Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,919.0

 

 

$

2,450.2

 

 

$

1,352.6

 

Receivables, net

 

 

842.3

 

 

 

857.3

 

 

 

809.4

 

Inventories

 

 

1,616.8

 

 

 

1,575.4

 

 

 

1,379.5

 

Assets held-for-sale

 

 

 

 

 

135.0

 

 

 

 

Other current assets

 

 

351.3

 

 

 

291.5

 

 

 

240.1

 

Total current assets

 

 

5,729.4

 

 

 

5,309.4

 

 

 

3,781.6

 

Property, plant and equipment, net

 

 

3,450.7

 

 

 

2,762.1

 

 

 

2,524.3

 

Goodwill

 

 

1,577.6

 

 

 

1,600.4

 

 

 

1,937.5

 

Intangible assets, net

 

 

359.7

 

 

 

373.8

 

 

 

495.7

 

Deferred tax assets

 

 

376.7

 

 

 

409.9

 

 

 

366.3

 

Right-of-use financing lease

 

 

45.8

 

 

 

46.4

 

 

 

22.3

 

Other assets

 

 

438.6

 

 

 

598.7

 

 

 

498.3

 

Total assets

 

$

11,978.5

 

 

$

11,100.7

 

 

$

9,626.0

 

Liabilities, Non-Controlling Interest and Stockholders’ Equity

 

 

 

 

 

 

Accounts payable

 

$

852.1

 

 

$

791.7

 

 

$

635.1

 

Accrued expenses and other current liabilities

 

 

1,047.3

 

 

 

755.1

 

 

 

734.9

 

Liabilities held-for-sale

 

 

 

 

 

37.3

 

 

 

 

Current portion of financing lease liabilities

 

 

14.2

 

 

 

11.6

 

 

 

12.7

 

Current portion of long-term debt

 

 

147.8

 

 

 

165.3

 

 

 

160.7

 

Total current liabilities

 

 

2,061.4

 

 

 

1,761.0

 

 

 

1,543.4

 

Long-term debt

 

 

3,045.7

 

 

 

3,046.5

 

 

 

2,913.9

 

Deferred tax liabilities

 

 

34.1

 

 

 

30.5

 

 

 

43.2

 

Long-term financing lease liabilities

 

 

23.0

 

 

 

20.6

 

 

 

10.2

 

Other long-term liabilities

 

 

607.3

 

 

 

565.5

 

 

 

510.9

 

Total liabilities

 

 

5,771.5

 

 

 

5,424.1

 

 

 

5,021.6

 

ON Semiconductor Corporation stockholders’ equity:

 

 

 

 

 

 

Common stock

 

 

6.1

 

 

 

6.1

 

 

 

6.0

 

Additional paid-in capital

 

 

4,670.9

 

 

 

4,598.8

 

 

 

4,633.3

 

Accumulated other comprehensive loss

 

 

(23.2

)

 

 

(23.4

)

 

 

(40.6

)

Accumulated earnings

 

 

4,364.4

 

 

 

3,760.1

 

 

 

2,435.1

 

Less: Treasury stock, at cost

 

 

(2,829.7

)

 

 

(2,685.6

)

 

 

(2,448.4

)

Total ON Semiconductor Corporation stockholders’ equity

 

 

6,188.5

 

 

 

5,656.0

 

 

 

4,585.4

 

Non-controlling interest

 

 

18.5

 

 

 

20.6

 

 

 

19.0

 

Total stockholders' equity

 

 

6,207.0

 

 

 

5,676.6

 

 

 

4,604.4

 

Total liabilities and stockholders' equity

 

$

11,978.5

 

 

$

11,100.7

 

 

$

9,626.0

 

ON SEMICONDUCTOR CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

   

 

 

Quarter Ended

 

Year Ended

 

 

December 31,
2022

 

September 30,
2022

 

December 31,
2021

 

December 31,
2022

 

December 31,
2021

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

Net income

 

$

604.3

 

 

$

311.9

 

 

$

426.4

 

 

$

1,903.8

 

 

$

1,011.2

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

133.2

 

 

 

139.6

 

 

 

140.3

 

 

 

551.8

 

 

 

596.7

 

(Gain) loss on sale or disposal of fixed assets

 

 

0.5

 

 

 

(16.5

)

 

 

 

 

 

(32.6

)

 

 

 

Gain on divestiture of businesses

 

 

(64.9

)

 

 

(0.2

)

 

 

 

 

 

(67.0

)

 

 

(10.2

)

(Gain) loss on debt refinancing and prepayment

 

 

(0.2

)

 

 

 

 

 

2.8

 

 

 

7.1

 

 

 

29.0

 

Amortization of debt discount and issuance costs

 

 

2.4

 

 

 

2.6

 

 

 

2.7

 

 

 

11.0

 

 

 

10.7

 

Share-based compensation

 

 

24.3

 

 

 

26.9

 

 

 

27.2

 

 

 

100.8

 

 

 

101.3

 

Non-cash interest on convertible notes

 

 

 

 

 

 

 

 

7.1

 

 

 

 

 

 

24.7

 

Non-cash asset impairment charges

 

 

 

 

 

11.9

 

 

 

 

 

 

18.6

 

 

 

10.8

 

Goodwill and intangible asset impairment charges

 

 

 

 

 

271.8

 

 

 

 

 

 

386.8

 

 

 

 

Change in deferred tax balances

 

 

67.7

 

 

 

(71.3

)

 

 

22.9

 

 

 

3.1

 

 

 

62.4

 

Other

 

 

(0.5

)

 

 

(0.7

)

 

 

1.8

 

 

 

0.1

 

 

 

4.3

 

Changes in assets and liabilities

 

 

(35.5

)

 

 

326.4

 

 

 

(4.6

)

 

 

(250.4

)

 

 

(58.9

)

Net cash provided by operating activities

 

$

731.3

 

 

$

1,002.4

 

 

$

626.6

 

 

$

2,633.1

 

 

$

1,782.0

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

Purchase of Property, Plant and Equipment ("PP&E")

 

$

(342.0

)

 

$

(271.1

)

 

$

(169.6

)

 

$

(1,005.0

)

 

$

(444.6

)

Deposits and proceeds from sale of PP&E

 

 

0.1

 

 

 

20.8

 

 

 

7.4

 

 

 

59.1

 

 

 

14.0

 

Deposits utilized (made) for purchase of PP&E

 

 

22.7

 

 

 

(22.3

)

 

 

(25.9

)

 

 

(31.0

)

 

 

(47.4

)

Divestiture of business, net of cash transferred

 

 

172.6

 

 

 

 

 

 

3.6

 

 

 

263.1

 

 

 

7.0

 

Purchase of business, net of cash acquired

 

 

 

 

 

 

 

 

(399.4

)

 

 

(2.4

)

 

 

(399.4

)

Purchase of available-for-sale securities

 

 

 

 

 

(1.7

)

 

 

(5.1

)

 

 

(18.0

)

 

 

(48.9

)

Proceeds from sale or maturity of available-for-sale securities

 

 

4.8

 

 

 

10.2

 

 

 

1.4

 

 

 

28.8

 

 

 

4.2

 

Net cash used in investing activities

 

$

(141.8

)

 

$

(264.1

)

 

$

(587.6

)

 

$

(705.4

)

 

$

(915.1

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

Proceeds for the issuance of common stock under the ESPP

 

$

4.7

 

 

$

5.7

 

 

$

5.0

 

 

$

22.9

 

 

$

23.5

 

Payment of tax withholding for RSUs

 

 

(10.7

)

 

 

(4.1

)

 

 

(4.7

)

 

 

(78.1

)

 

 

(38.9

)

Repurchase of common stock

 

 

(92.9

)

 

 

(77.2

)

 

 

 

 

 

(259.8

)

 

 

 

Issuance and borrowings under debt agreements

 

 

 

 

 

 

 

 

 

 

 

500.0

 

 

 

787.3

 

Reimbursement of debt issuance costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.7

 

Payment of debt issuance costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3.8

)

Repayment of borrowings under debt agreements

 

 

(20.5

)

 

 

(2.7

)

 

 

(51.7

)

 

 

(530.0

)

 

 

(1,270.5

)

Payment for purchase of bond hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(160.3

)

Proceeds from issuance of warrants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

93.8

 

Payments related to prior acquisition

 

 

(9.2

)

 

 

 

 

 

(0.2

)

 

 

(9.2

)

 

 

(3.2

)

Payment of finance lease obligations

 

 

1.0

 

 

 

(1.6

)

 

 

 

 

 

(11.5

)

 

 

 

Dividend to non-controlling shareholder

 

 

(2.1

)

 

 

 

 

 

 

 

 

(4.3

)

 

 

 

Net cash used in financing activities

 

$

(129.7

)

 

$

(79.9

)

 

$

(51.6

)

 

$

(370.0

)

 

$

(569.4

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

0.8

 

 

 

(0.6

)

 

 

(0.3

)

 

 

(2.4

)

 

 

(1.3

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

460.6

 

 

 

657.8

 

 

 

(12.9

)

 

 

1,555.3

 

 

 

296.2

 

Beginning cash, cash equivalents and restricted cash

 

 

2,472.4

 

 

 

1,814.6

 

 

 

1,390.6

 

 

 

1,377.7

 

 

 

1,081.5

 

Ending cash, cash equivalents and restricted cash

 

$

2,933.0

 

 

$

2,472.4

 

 

$

1,377.7

 

 

$

2,933.0

 

 

$

1,377.7

 

ON SEMICONDUCTOR CORPORATION

RECONCILIATION OF GAAP VERSUS NON-GAAP DISCLOSURES

(in millions, except per share and percentage data)

   

 

 

 

Quarter Ended

 

Year Ended

 

 

 

December 31,
2022

 

September 30,
2022

 

December 31,
2021

 

December 31,
2022

 

December 31,
2021

Reconciliation of GAAP to non-GAAP gross profit:

 

 

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

1,020.5

 

 

$

1,058.3

 

 

$

832.2

 

 

$

4,077.2

 

 

$

2,714.3

 

Special items:

 

 

 

 

 

 

 

 

 

 

a)

Non-recurring facility costs

 

 

 

 

 

 

 

 

2.3

 

 

 

 

 

 

5.5

 

b)

Impact of business wind down

 

 

(3.6

)

 

 

23.1

 

 

 

 

 

 

19.5

 

 

 

 

c)

Amortization of acquisition-related intangible assets

 

 

1.6

 

 

 

 

 

 

 

 

 

1.6

 

 

 

 

 

Total special items

 

 

(2.0

)

 

 

23.1

 

 

 

2.3

 

 

 

21.1

 

 

 

5.5

 

Non-GAAP gross profit

 

$

1,018.5

 

 

$

1,081.4

 

 

$

834.5

 

 

$

4,098.3

 

 

$

2,719.8

 

Reconciliation of GAAP to non-GAAP gross margin:

 

 

 

 

 

 

 

 

 

 

GAAP gross margin

 

 

48.5

%

 

 

48.3

%

 

 

45.1

%

 

 

49.0

%

 

 

40.3

%

Special items:

 

 

 

 

 

 

 

 

 

 

a)

Non-recurring facility costs

 

 

%

 

 

%

 

 

0.1

%

 

 

%

 

 

0.1

%

b)

Impact of business wind down

 

 

(0.2

)%

 

 

1.1

%

 

 

 

 

 

0.2

%

 

 

 

c)

Amortization of acquisition-related intangible assets

 

 

0.1

%

 

 

%

 

 

%

 

 

0.1

%

 

 

%

 

Total special items

 

 

(0.1

)%

 

 

1.1

%

 

 

0.1

%

 

 

0.3

%

 

 

0.1

%

Non-GAAP gross margin

 

 

48.4

%

 

 

49.3

%

 

 

45.2

%

 

 

49.2

%

 

 

40.4

%

Reconciliation of GAAP to non-GAAP operating expenses:

 

 

 

 

 

 

 

 

 

 

GAAP operating expenses

 

$

316.2

 

 

$

633.8

 

 

$

351.9

 

 

$

1,717.2

 

 

$

1,426.7

 

Special items:

 

 

 

 

 

 

 

 

 

a)

Amortization of acquisition-related intangible assets

 

 

(16.1

)

 

 

(21.9

)

 

 

(24.5

)

 

 

(81.2

)

 

 

(99.0

)

b)

Restructuring, asset impairments and other, net

 

 

7.7

 

 

 

(40.3

)

 

 

(13.1

)

 

 

(17.9

)

 

 

(71.4

)

c)

Goodwill and intangible asset impairment

 

 

 

 

 

(271.8

)

 

 

 

 

 

(386.8

)

 

 

(2.9

)

d)

Third party acquisition and divestiture related costs

 

 

(7.4

)

 

 

(2.3

)

 

 

(7.9

)

 

 

(12.9

)

 

 

(11.9

)

e)

Impact of business wind down

 

 

 

 

 

6.8

 

 

 

 

 

 

6.8

 

 

 

 

 

Total special items

 

 

(15.8

)

 

 

(329.5

)

 

 

(45.5

)

 

 

(492.0

)

 

 

(185.2

)

Non-GAAP operating expenses

 

$

300.4

 

 

$

304.3

 

 

$

306.4

 

 

$

1,225.2

 

 

$

1,241.5

 

Reconciliation of GAAP to non-GAAP operating income:

 

 

 

 

 

 

 

 

 

 

GAAP operating income

 

$

704.3

 

 

$

424.5

 

 

$

480.3

 

 

$

2,360.0

 

 

$

1,287.6

 

Special items:

 

 

 

 

 

 

 

 

 

 

a)

Non-recurring facility costs

 

 

 

 

 

 

 

 

2.3

 

 

 

 

 

 

5.5

 

b)

Amortization of acquisition-related intangible assets

 

 

17.7

 

 

 

21.9

 

 

 

24.5

 

 

 

82.8

 

 

 

99.0

 

c)

Restructuring, asset impairments and other, net

 

 

(7.7

)

 

 

40.3

 

 

 

13.1

 

 

 

17.9

 

 

 

71.4

 

d)

Goodwill and intangible asset impairment

 

 

 

 

 

271.8

 

 

 

 

 

 

386.8

 

 

 

2.9

 

e)

Third party acquisition and divestiture related costs

 

 

7.4

 

 

 

2.3

 

 

 

7.9

 

 

 

12.9

 

 

 

11.9

 

f)

Impact of business wind down

 

 

(3.6

)

 

 

16.3

 

 

 

 

 

 

12.7

 

 

 

 

 

Total special items

 

 

13.8

 

 

 

352.6

 

 

 

47.8

 

 

 

513.1

 

 

 

190.7

 

Non-GAAP operating income

 

$

718.1

 

 

$

777.1

 

 

$

528.1

 

 

$

2,873.1

 

 

$

1,478.3

 

Reconciliation of GAAP to non-GAAP operating margin (operating income / revenue) :

 

 

 

 

 

 

 

 

 

 

GAAP operating margin

 

 

33.5

%

 

 

19.4

%

 

 

26.0

%

 

 

28.3

%

 

 

19.1

%

Special items:

 

 

 

 

 

 

 

 

 

 

a)

Non-recurring facility costs

 

 

%

 

 

%

 

 

0.1

%

 

 

%

 

 

0.1

%

b)

Amortization of acquisition-related intangible assets

 

 

0.8

%

 

 

1.0

%

 

 

1.3

%

 

 

1.0

%

 

 

1.5

%

c)

Restructuring, asset impairments and other, net

 

 

(0.4

)%

 

 

1.8

%

 

 

0.7

%

 

 

0.2

%

 

 

1.1

%

d)

Goodwill and intangible asset impairment

 

 

%

 

 

12.4

%

 

 

%

 

 

4.6

%

 

 

%

e)

Third party acquisition and divestiture related costs

 

 

0.4

%

 

 

0.1

%

 

 

0.4

%

 

 

0.2

%

 

 

0.2

%

f)

Impact of business wind down

 

 

(0.2

)%

 

 

0.7

%

 

 

%

 

 

0.2

%

 

 

%

 

Total special items

 

 

0.7

%

 

 

16.0

%

 

 

2.6

%

 

 

6.2

%

 

 

2.8

%

Non-GAAP operating margin

 

 

34.1

%

 

 

35.4

%

 

 

28.6

%

 

 

34.5

%

 

 

21.9

%

Reconciliation of GAAP to non-GAAP income before income taxes:

 

 

 

 

 

 

 

 

 

 

GAAP income before income taxes

 

$

763.3

 

 

$

406.8

 

 

$

466.2

 

 

$

2,362.2

 

 

$

1,157.8

 

Special items:

 

 

 

 

 

 

 

 

 

 

a)

Non-recurring facility costs

 

 

 

 

 

 

 

 

2.3

 

 

 

 

 

 

5.5

 

b)

Amortization of acquisition-related intangible assets

 

 

17.7

 

 

 

21.9

 

 

 

24.5

 

 

 

82.8

 

 

 

99.0

 

c)

Restructuring, asset impairments and other, net

 

 

(7.7

)

 

 

40.3

 

 

 

13.1

 

 

 

17.9

 

 

 

71.4

 

d)

Goodwill and intangible asset impairment

 

 

 

 

 

271.8

 

 

 

 

 

 

386.8

 

 

 

2.9

 

e)

Third party acquisition and divestiture related costs

 

 

7.4

 

 

 

2.3

 

 

 

7.9

 

 

 

12.9

 

 

 

11.9

 

f)

Impact of business wind down

 

 

(3.6

)

 

 

16.3

 

 

 

 

 

 

12.7

 

 

 

 

g)

Actuarial gains on pension plans and other pension benefits

 

 

(22.0

)

 

 

 

 

 

(22.2

)

 

 

(22.0

)

 

 

(16.7

)

h)

Loss on debt refinancing and prepayment

 

 

(0.2

)

 

 

 

 

 

2.8

 

 

 

7.1

 

 

 

29.0

 

i)

Non-cash interest on convertible notes

 

 

 

 

 

 

 

 

7.1

 

 

 

 

 

 

24.7

 

j)

Gain on divestiture of businesses

 

 

(64.9

)

 

 

(0.2

)

 

 

 

 

 

(67.0

)

 

 

(10.2

)

 

Total special items

 

 

(73.3

)

 

 

352.4

 

 

 

35.5

 

 

 

431.2

 

 

 

217.5

 

Non-GAAP income before income taxes

 

$

690.0

 

 

$

759.2

 

 

$

501.7

 

 

$

2,793.4

 

 

$

1,375.3

 

Reconciliation of GAAP to non-GAAP net income attributable to ON Semiconductor Corporation:

 

 

 

 

 

 

 

 

 

 

GAAP net income attributable to ON Semiconductor Corporation

 

$

604.3

 

 

$

311.9

 

 

$

425.9

 

 

$

1,902.2

 

 

$

1,009.6

 

Special items:

 

 

 

 

 

 

 

 

 

 

a)

Non-recurring facility costs

 

 

 

 

 

 

 

 

2.3

 

 

 

 

 

 

5.5

 

b)

Amortization of acquisition-related intangible assets

 

 

17.7

 

 

 

21.9

 

 

 

24.5

 

 

 

82.8

 

 

 

99.0

 

c)

Restructuring, asset impairments and other, net

 

 

(7.7

)

 

 

40.3

 

 

 

13.1

 

 

 

17.9

 

 

 

71.4

 

d)

Goodwill and intangible asset impairment

 

 

 

 

 

271.8

 

 

 

 

 

 

386.8

 

 

 

2.9

 

e)

Third party acquisition and divestiture related costs

 

 

7.4

 

 

 

2.3

 

 

 

7.9

 

 

 

12.9

 

 

 

11.9

 

f)

Impact of business wind down

 

 

(3.6

)

 

 

16.3

 

 

 

 

 

 

12.7

 

 

 

 

g)

Actuarial gains on pension plans and other pension benefits

 

 

(22.0

)

 

 

 

 

 

(22.2

)

 

 

(22.0

)

 

 

(16.7

)

h)

Loss on debt refinancing and prepayment

 

 

(0.2

)

 

 

 

 

 

2.8

 

 

 

7.1

 

 

 

29.0

 

i)

Non-cash interest on convertible notes

 

 

 

 

 

 

 

 

7.1

 

 

 

 

 

 

24.7

 

j)

Gain on divestiture of businesses

 

 

(64.9

)

 

 

(0.2

)

 

 

 

 

 

(67.0

)

 

 

(10.2

)

k)

Adjustment of income taxes

 

 

49.4

 

 

 

(24.9

)

 

 

16.6

 

 

 

14.3

 

 

 

58.4

 

 

Total special items

 

 

(23.9

)

 

 

327.5

 

 

 

52.1

 

 

 

445.5

 

 

 

275.9

 

Non-GAAP net income attributable to ON Semiconductor Corporation

 

$

580.4

 

 

$

639.4

 

 

$

478.0

 

 

$

2,347.7

 

 

$

1,285.5

 

Adjustment of income taxes:

 

 

 

 

 

 

 

 

 

 

Tax adjustment for special items (1)

 

$

15.4

 

 

$

(74.0

)

 

$

(7.5

)

 

$

(90.6

)

 

$

(45.7

)

Other non-GAAP tax adjustment (2)

 

 

34.0

 

 

 

49.1

 

 

 

24.1

 

 

 

104.9

 

 

 

104.1

 

 

Total adjustment of income taxes

 

$

49.4

 

 

$

(24.9

)

 

$

16.6

 

 

$

14.3

 

 

$

58.4

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income for diluted earnings per share

 

$

604.7

 

 

$

312.4

 

 

$

425.9

 

 

$

1,904.1

 

 

$

1,009.6

 

Non-GAAP net income for diluted earnings per share

 

$

580.8

 

 

$

639.9

 

 

$

478.0

 

 

$

2,349.6

 

 

$

1,285.5

 

Reconciliation of GAAP to non-GAAP diluted shares outstanding:

 

 

 

 

 

 

 

 

 

 

GAAP diluted shares outstanding

 

 

447.9

 

 

 

448.7

 

 

 

445.3

 

 

 

448.2

 

 

 

443.8

 

Special items:

 

 

 

 

 

 

 

 

 

 

a)

Less: dilutive shares attributable to convertible notes

 

 

(8.0

)

 

 

(7.9

)

 

 

(6.9

)

 

 

(7.0

)

 

 

(8.6

)

 

Total special items

 

 

(8.0

)

 

 

(7.9

)

 

 

(6.9

)

 

 

(7.0

)

 

 

(8.6

)

Non-GAAP diluted shares outstanding

 

 

439.9

 

 

 

440.8

 

 

 

438.4

 

 

 

441.2

 

 

 

435.2

 

Non-GAAP diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income attributable to ON Semiconductor Corporation

 

$

580.8

 

 

$

639.9

 

 

$

478.0

 

 

$

2,349.6

 

 

$

1,285.5

 

Non-GAAP diluted shares outstanding

 

 

439.9

 

 

 

440.8

 

 

 

438.4

 

 

 

441.2

 

 

 

435.2

 

Non-GAAP diluted earnings per share

 

$

1.32

 

 

$

1.45

 

 

$

1.09

 

 

$

5.33

 

 

$

2.95

 

Reconciliation of net cash provided by operating activities to free cash flow:

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

731.3

 

 

$

1,002.4

 

 

$

626.6

 

 

$

2,633.1

 

 

$

1,782.0

 

Special items:

 

 

 

 

 

 

 

 

 

 

a)

Purchase of property, plant and equipment

 

 

(342.0

)

 

 

(271.1

)

 

 

(169.6

)

 

 

(1,005.0

)

 

 

(444.6

)

 

Total special items

 

 

(342.0

)

 

 

(271.1

)

 

 

(169.6

)

 

 

(1,005.0

)

 

 

(444.6

)

Free cash flow

 

$

389.3

 

 

$

731.3

 

 

$

457.0

 

 

$

1,628.1

 

 

$

1,337.4

 

(1)

 

Tax impact of non-GAAP special items (a-j) is calculated using the federal statutory rate of 21% for all periods presented.

(2)

 

The income tax adjustment primarily represents the use of the net operating loss, non-cash impact of not asserting indefinite reinvestment on earnings of our foreign subsidiaries, deferred tax expense not affecting taxes payable, and non-cash expense (benefit) related to uncertain tax positions.


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