Onsemi — Oct 28, 2024 release

  4 ON SEMICONDUCTOR CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data)        Quarters Ended     Nine Months Ended        September 27, 2024     June 28, 2024     September 29, 2023     September 27, 2024     September 29, 2023   Revenue    $ 1,761.9     $ 1,735.2     $ 2,180.8     $ 5,359.8     $ 6,234.9   Cost of revenue      962.5       951.2       1,150.1       2,922.8       3,293.3                                            Gross profit      799.4       784.0       1,030.7       2,437.0       2,941.6   Gross margin      45.4 %      45.2 %      47.3 %      45.5 %      47.2 %  Operating expenses:            Research and development      151.0       156.5       143.4       457.5       427.1   Selling and marketing      65.4       68.6       68.2       203.1       211.6   General and administrative      95.5       85.0       110.7       275.8       273.8   Amortization of acquisition-related intangible assets      13.0       12.9       12.0       38.5       39.0   Restructuring, asset impairments and other charges, net      29.1       72.5       9.4       103.0       63.5                                            Total operating expenses      354.0       395.5       343.7       1,077.9       1,015.0                                            Operating income      445.4       388.5       687.0       1,359.1       1,926.6                                            Other income (expense), net:            Interest expense      (15.7 )      (15.7 )      (16.2 )      (47.0 )      (59.0 )  Interest income      28.6       27.4       25.7       83.6       66.8   Loss on debt prepayment      —        —        —        —        (13.3 )  Loss on divestiture of business      —        —        (0.1 )      —        (0.7 )  Other income (expense)      (3.7 )      1.9       1.1       (0.8 )      4.5                                            Other income (expense), net      9.2       13.6       10.5       35.8       (1.7 )                                           Income before income taxes      454.6       402.1       697.5       1,394.9       1,924.9   Income tax provision      (51.9 )      (63.7 )      (114.6 )      (200.1 )      (302.7 )                                           Net income      402.7       338.4       582.9       1,194.8       1,622.2   Less: Net income attributable to non-controlling interest      (1.0 )      (0.2 )      (0.2 )      (1.9 )      (1.2 )                                           Net income attributable to ON Semiconductor Corporation    $ 401.7     $ 338.2     $ 582.7     $ 1,192.9     $ 1,621.0                                            Net income for diluted earnings per share of common stock    $ 401.7     $ 338.2     $ 583.1     $ 1,192.9     $ 1,622.2                                            Net income per share of common stock:            Basic    $ 0.94     $ 0.79     $ 1.35     $ 2.79     $ 3.76                                            Diluted    $ 0.93     $ 0.78     $ 1.29     $ 2.75     $ 3.61                                            Weighted average common shares outstanding:            Basic      427.0       429.1       431.2       428.1       431.6                                            Diluted      431.7       433.2       450.7       433.8       449.3                                              5 ON SEMICONDUCTOR CORPORATION UNAUDITED CONSOLIDATED BALANCE SHEETS (in millions)        September 27, 2024     June 28, 2024     December 31, 2023   Assets        Cash and cash equivalents    $ 2,470.2     $ 2,231.0     $ 2,483.0   Short-term investments      300.0       450.0       —    Receivables, net      1,070.6       887.2       935.4   Inventories      2,242.8       2,224.6       2,111.8   Other current assets      461.1       532.2       382.1                            Total current assets      6,544.7       6,325.0       5,912.3   Property, plant and equipment, net      4,383.7       4,372.5       4,401.5   Goodwill      1,587.9       1,577.6       1,577.6   Intangible assets, net      273.1       275.0       299.3   Deferred tax assets      725.8       679.1       600.8   ROU financing lease assets      41.1       41.7       42.4   Other assets      367.3       387.9       381.3                            Total assets    $ 13,923.6     $ 13,658.8     $ 13,215.2                            Liabilities and Stockholders’ Equity        Accounts payable    $ 597.5     $ 617.7     $ 725.6   Accrued expenses and other current liabilities      734.3       684.3       663.2   Current portion of financing lease liabilities      0.4       0.4       0.8   Current portion of long-term debt      796.4       795.6       794.0                            Total current liabilities      2,128.6       2,098.0       2,183.6   Long-term debt      2,547.2       2,545.7       2,542.6   Deferred tax liabilities      42.8       39.6       38.7   Long-term financing lease liabilities      22.4       21.7       22.4   Other long-term liabilities      578.6       595.4       627.3                            Total liabilities      5,319.6       5,300.4       5,414.6                            ON Semiconductor Corporation stockholders’ equity:        Common stock      6.2       6.2       6.2   Additional paid-in capital      5,321.9       5,283.3       5,210.9   Accumulated other comprehensive loss      (49.1 )      (56.8 )      (45.2 )  Accumulated earnings      7,741.0       7,339.3       6,548.1   Less: Treasury stock, at cost      (4,435.9 )      (4,232.5 )      (3,937.4 )                           Total ON Semiconductor Corporation stockholders’ equity      8,584.1       8,339.5       7,782.6   Non-controlling interest      19.9       18.9       18.0                            Total stockholders’ equity      8,604.0       8,358.4       7,800.6                            Total liabilities and stockholders’ equity    $ 13,923.6     $ 13,658.8     $ 13,215.2                              6 ON SEMICONDUCTOR CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions)        Quarters Ended     Nine Months Ended        September 27, 2024     June 28, 2024     September 29, 2023     September 27, 2024     September 29, 2023   Cash flows from operating activities:            Net income    $ 402.7     $ 338.4     $ 582.9     $ 1,194.8     $ 1,622.2   Adjustments to reconcile net income to net cash provided by operating activities:            Depreciation and amortization      161.8       159.6       155.4       476.3       449.2   Loss on sale and disposal of fixed assets      4.1       0.9       2.5       5.1       7.3   Loss on divestiture of businesses      —        —        0.1       —        0.7   Loss on debt prepayment      —        —        —        —        13.3   Amortization of debt discount and issuance costs      3.6       2.9       2.9       9.2       8.7   Share-based compensation      32.7       32.3       31.1       98.0       90.4   Non-cash asset impairment charges      —        15.7       —        15.7       12.7   Change in deferred tax balances      (45.6 )      (27.9 )      (79.4 )      (122.1 )      (109.0 )  Other      1.7       3.5       10.8       7.0       1.5   Changes in assets and liabilities      (95.2 )      (163.2 )      (139.7 )      (357.3 )      (730.7 )                                           Net cash provided by operating activities      465.8       362.2       566.6       1,326.7       1,366.3                                            Cash flows from investing activities:            Purchase of Property, Plant and Equipment (“PP&E”)      (172.2 )      (154.5 )      (433.0 )      (549.1 )      (1,185.1 )  Deposits and proceeds from sale of PP&E      0.3       0.2       0.2       0.6       2.8   Deposits utilized for purchase of PP&E      10.5       13.4       12.9       12.4       32.4   Purchase of short-term investments      (300.0 )      (450.0 )      —        (750.0 )      —    Proceeds from sale or maturity of short-term investments and            available-for-sale securities      450.0       —        12.7       450.0       33.5   Purchase of a business, net of cash acquired      (20.5 )      —        —        (20.5 )      —    Payments related to acquisition of business      —        —        —        —        (236.3 )  Other      —        —        —        (1.5 )      —                                             Net cash used in investing activities      (31.9 )      (590.9 )      (407.2 )      (858.1 )      (1,352.7 )                                           Cash flows from financing activities:            Proceeds for the issuance of common stock under the ESPP      6.5       5.5       6.7       19.6       19.9   Payment of tax withholding for RSUs      (3.1 )      (7.7 )      (5.9 )      (48.3 )      (62.4 )  Repurchase of common stock      (200.0 )      (150.0 )      (100.0 )      (450.0 )      (264.0 )  Issuance and borrowings under debt agreements      —        —        —        —        1,845.0   Reimbursement of debt issuance costs      —        —        —        —        4.5   Payment of debt issuance and other financing costs      —        —        (0.3 )      —        (11.7 )  Repayment of borrowings under debt agreements      —        —        (0.1 )      —        (1,603.8 )  Payment for purchase of bond hedges      —        —        —        —        (414.0 )  Proceeds from issuance of warrants      —        —        —        —        242.5   Payment of finance lease obligations      (0.4 )      (0.5 )      (1.7 )      (1.8 )      (10.3 )                                           Net cash used in financing activities      (197.0 )      (152.7 )      (101.3 )      (480.5 )      (254.3 )                                           Effect of exchange rate changes on cash, cash equivalents and restricted cash      2.4       (2.2 )      (0.5 )      (0.7 )      (1.5 )                                           Net increase (decrease) in cash, cash equivalents and restricted cash      239.3       (383.6 )      57.6       (12.6 )      (242.2 )  Beginning cash, cash equivalents and restricted cash      2,233.1       2,616.7       2,633.2       2,485.0       2,933.0                                            Ending cash, cash equivalents and restricted cash    $ 2,472.4     $ 2,233.1     $ 2,690.8     $ 2,472.4     $ 2,690.8                                              7 ON SEMICONDUCTOR CORPORATION RECONCILIATION OF GAAP VERSUS NON-GAAP DISCLOSURES (Continued) (in millions, except per share and percentage data)          Quarters Ended     Nine Months Ended        September 27, 2024     June 28, 2024     September 29, 2023     September 27, 2024     September 29, 2023   Reconciliation of GAAP to non-GAAP gross profit:            GAAP gross profit    $ 799.4     $ 784.0     $ 1,030.7     $ 2,437.0     $ 2,941.6                                            Special items:            a)  Impact of business wind down      —        —        —        —        (3.9 )  b)  Amortization of acquisition-related intangible assets      1.6       1.6       1.4       4.7       4.2                                            Total special items      1.6       1.6       1.4       4.7       0.3                                            Non-GAAP gross profit    $ 801.0     $ 785.6     $ 1,032.1     $ 2,441.7     $ 2,941.9                                            Reconciliation of GAAP to non-GAAP gross margin:            GAAP gross margin      45.4 %      45.2 %      47.3 %      45.5 %      47.2 %                                           Special items:            a)  Impact of business wind down      —  %      —  %      —  %      —  %      (0.1 )%  b)  Amortization of acquisition-related intangible assets      0.1 %      0.1 %      0.1 %      0.1 %      0.1 %                                           Total special items      0.1 %      0.1 %      0.1 %      0.1 %      — %                                           Non-GAAP gross margin      45.5 %      45.3 %      47.3 %      45.6 %      47.2 %                                           Reconciliation of GAAP to non-GAAP operating expenses:            GAAP operating expenses    $ 354.0     $ 395.5     $ 343.7     $ 1,077.9     $ 1,015.0                                            Special items:            a)  Amortization of acquisition-related intangible assets      (13.0 )      (12.9 )      (12.0 )      (38.5 )      (39.0 )  b)  Restructuring, asset impairments and other, net      (29.1 )      (72.5 )      (9.4 )      (103.0 )      (63.5 )  c)  Third party acquisition and divestiture-related costs      (7.4 )      (1.