(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification number) | |
(Address of principal executive offices) | (Zip code) | |
(Registrant’s telephone number, including area code) | |||
Title of each class | Trading symbol(s) | Name of each exchange on which registered |
☒ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | Smaller reporting company | |
Emerging growth company | |||
Page | ||
For the three months ended | For the nine months ended | ||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | ||||||||
Revenue | |||||||||||
Cost of revenue | ( | ) | ( | ) | ( | ) | ( | ) | |||
Gross profit | |||||||||||
Research and development | ( | ) | ( | ) | ( | ) | ( | ) | |||
Selling, general and administrative | ( | ) | ( | ) | ( | ) | ( | ) | |||
Amortization of acquisition-related intangible assets | ( | ) | ( | ) | ( | ) | ( | ) | |||
Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | |||
Other income (expense) | |||||||||||
Operating income (loss) | |||||||||||
Financial income (expense): | |||||||||||
Extinguishment of debt | ( | ) | ( | ) | ( | ) | |||||
Other financial income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | |||
Income (loss) before income taxes | |||||||||||
Benefit (provision) for income taxes | ( | ) | ( | ) | ( | ) | ( | ) | |||
Results relating to equity-accounted investees | ( | ) | |||||||||
Net income (loss) | |||||||||||
Less: Net income (loss) attributable to non-controlling interests | |||||||||||
Net income (loss) attributable to stockholders | |||||||||||
Earnings per share data: | |||||||||||
Net income (loss) per common share attributable to stockholders in $ | |||||||||||
Basic | |||||||||||
Diluted | |||||||||||
Weighted average number of shares of common stock outstanding during the period (in thousands): | |||||||||||
Basic | |||||||||||
Diluted | |||||||||||
For the three months ended | For the nine months ended | ||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | ||||||||
Net income (loss) | |||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||
Change in fair value cash flow hedges | ( | ) | ( | ) | ( | ) | |||||
Change in foreign currency translation adjustment | ( | ) | ( | ) | ( | ) | |||||
Change in net actuarial gain (loss) | ( | ) | ( | ) | ( | ) | ( | ) | |||
Change in unrealized gains/losses available-for-sale securities | |||||||||||
Total other comprehensive income (loss) | ( | ) | ( | ) | ( | ) | |||||
Total comprehensive income (loss) | |||||||||||
Less: Comprehensive income (loss) attributable to non-controlling interests | |||||||||||
Total comprehensive income (loss) attributable to stockholders | |||||||||||
September 29, 2019 | December 31, 2018 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | ||||||
Accounts receivable, net | ||||||
Assets held for sale | ||||||
Inventories, net | ||||||
Other current assets | ||||||
Total current assets | ||||||
Non-current assets: | ||||||
Other non-current assets | ||||||
Property, plant and equipment, net of accumulated depreciation of $3,632 and $3,299 | ||||||
Identified intangible assets, net of accumulated amortization of $5,729 and $4,716 | ||||||
Goodwill | ||||||
Total non-current assets | ||||||
Total assets | ||||||
LIABILITIES AND EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | ||||||
Restructuring liabilities-current | ||||||
Other current liabilities | ||||||
Short-term debt | ||||||
Total current liabilities | ||||||
Non-current liabilities: | ||||||
Long-term debt | ||||||
Restructuring liabilities | ||||||
Deferred tax liabilities | ||||||
Other non-current liabilities | ||||||
Total non-current liabilities | ||||||
Total liabilities | ||||||
Equity: | ||||||
Non-controlling interests | ||||||
Stockholders’ equity: | ||||||
Common stock, par value €0.20 per share: | ||||||
Capital in excess of par value | ||||||
Treasury shares, at cost: | ||||||
49,224,336 shares (2018: 35,913,021 shares) | ( | ) | ( | ) | ||
Accumulated other comprehensive income (loss) | ||||||
Accumulated deficit | ( | ) | ( | ) | ||
Total stockholders’ equity | ||||||
Total equity | ||||||
Total liabilities and equity | ||||||
For the nine months ended | |||||
September 29, 2019 | September 30, 2018 | ||||
Cash flows from operating activities: | |||||
Net income (loss) | |||||
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | |||||
Depreciation and amortization | |||||
Share-based compensation | |||||
Amortization of discount on debt | |||||
Amortization of debt issuance costs | |||||
Net (gain) loss on sale of assets | ( | ) | |||
(Gain) loss on extinguishment of debt | |||||
Results relating to equity-accounted investees | ( | ) | ( | ) | |
Deferred tax expense (benefit) | ( | ) | ( | ) | |
Changes in operating assets and liabilities: | |||||
(Increase) decrease in receivables and other current assets | ( | ) | |||
(Increase) decrease in inventories | ( | ) | |||
Increase (decrease) in accounts payable and other liabilities | ( | ) | |||
Decrease (increase) in other non-current assets | ( | ) | |||
Exchange differences | |||||
Other items | ( | ) | |||
Net cash provided by (used for) operating activities | |||||
Cash flows from investing activities: | |||||
Purchase of identified intangible assets | ( | ) | ( | ) | |
Capital expenditures on property, plant and equipment | ( | ) | ( | ) | |
Proceeds from disposals of property, plant and equipment | |||||
Purchase of interests in businesses, net of cash acquired | ( | ) | |||
Proceeds from sale of interests in businesses | |||||
Proceeds from return of equity investment | |||||
Purchase of available-for-sale securities | ( | ) | ( | ) | |
Proceeds from the sale of securities | |||||
Net cash provided by (used for) investing activities | ( | ) | ( | ) | |
Cash flows from financing activities: | |||||
Proceeds from Bridge Loan | |||||
Repurchase of long-term debt | ( | ) | ( | ) | |
Principal payments on long-term debt | ( | ) | |||
Proceeds from the issuance of long-term debt | |||||
Cash paid for debt issuance costs | ( | ) | ( | ) | |
Cash paid for Notes hedge derivatives | ( | ) | |||
Dividends paid to non-controlling interests | ( | ) | |||
Dividends paid to common stockholders | ( | ) | |||
Proceeds from issuance of common stock through stock plans | |||||
Purchase of treasury shares and restricted stock unit withholdings | ( | ) | ( | ) | |
Net cash provided by (used for) financing activities | ( | ) | ( | ) | |
Effect of changes in exchange rates on cash positions | ( | ) | ( | ) | |
Increase (decrease) in cash and cash equivalents | ( | ) | |||
Cash and cash equivalents at beginning of period | |||||
Cash and cash equivalents at end of period | |||||
For the nine months ended | |||||
September 29, 2019 | September 30, 2018 | ||||
Supplemental disclosures to the condensed consolidated cash flows | |||||
Net cash paid during the period for: | |||||
Interest | |||||
Income taxes | |||||
Non-cash adjustment related to the adoption of ASC 606: | |||||
Receivables and other current assets | ( | ) | |||
Inventories | |||||
Outstanding number of shares (in thousands) | Common stock | Capital in excess of par value | Treasury shares at cost | Accumulated other comprehensive income (loss) | Accumulated deficit | Total stock- holders’ equity | Non- controlling interests | Total equity | |||||||||||||||||||
Balance as of December 31, 2018 | ( | ) | ( | ) | |||||||||||||||||||||||
Net income (loss) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Other comprehensive income | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Share-based compensation plans | |||||||||||||||||||||||||||
Shares issued pursuant to stock awards | ( | ) | |||||||||||||||||||||||||
Treasury shares and restricted stock unit withholdings | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
Shareholder tax on repurchased shares | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Dividends common stock ($0.25 per share) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Balance as of March 31, 2019 | ( | ) | ( | ) | |||||||||||||||||||||||
Net income (loss) | |||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||
Share-based compensation plans | |||||||||||||||||||||||||||
Shares issued pursuant to stock awards | ( | ) | |||||||||||||||||||||||||
Treasury shares and restricted stock unit withholdings | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
Shareholder tax on repurchased shares | |||||||||||||||||||||||||||
Dividends common stock ($0.25 per share) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Balance as of June 30, 2019 | ( | ) | ( | ) | |||||||||||||||||||||||
Net income (loss) | |||||||||||||||||||||||||||
Other comprehensive income | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Share-based compensation plans | |||||||||||||||||||||||||||
Shares issued pursuant to stock awards | ( | ) | |||||||||||||||||||||||||
Treasury shares and restricted stock unit withholdings | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
Shareholder tax on repurchased shares | |||||||||||||||||||||||||||
Dividends common stock ($0.375 per share) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Balance as of September 29, 2019 | ( | ) | ( | ) | |||||||||||||||||||||||
Outstanding number of shares (in thousands) | Common stock | Capital in excess of par value | Treasury shares at cost | Accumulated other comprehensive income (loss) | Accumulated deficit | Total stock- holders’ equity | Non- controlling interests | Total equity | |||||||||||||||||||
Balance as of December 31, 2017 | ( | ) | ( | ) | |||||||||||||||||||||||
Net income (loss) | |||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||
Share-based compensation plans | |||||||||||||||||||||||||||
Shares issued pursuant to stock awards | ( | ) | |||||||||||||||||||||||||
Treasury shares and restricted stock unit withholdings | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
Cumulative effect adjustments | |||||||||||||||||||||||||||
Balance as of April 1, 2018 | ( | ) | ( | ) | |||||||||||||||||||||||
Net income (loss) | |||||||||||||||||||||||||||
Other comprehensive income | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Share-based compensation plans | |||||||||||||||||||||||||||
Shares issued pursuant to stock awards | ( | ) | |||||||||||||||||||||||||
Treasury shares and restricted stock unit withholdings | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
Dividends non-controlling interests | ( | ) | ( | ) | |||||||||||||||||||||||
Balance as of July 1, 2018 | ( | ) | ( | ) | |||||||||||||||||||||||
Net income (loss) | |||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||
Share-based compensation plans | |||||||||||||||||||||||||||
Shares issued pursuant to stock awards | ( | ) | |||||||||||||||||||||||||
Treasury shares and restricted stock unit withholdings | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
Tax on repurchased shares | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Dividends common stock ($0.25 per share) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Cumulative effect adjustments | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Balance as of September 30, 2018 | ( | ) | ( | ) | |||||||||||||||||||||||
• | we have recognized right-of-use (ROU) assets (within other non-current assets) and lease liabilities of $ |
• | the short-term portion of the lease liabilities of $ |
• | the long-term portion of the lease liabilities of $ |
• | it conveys the right to control the use of an identified asset for a period of time in exchange for consideration; |
• | we have substantially all economic benefits from the use of the asset; and |
• | we can direct the use of the identified asset. |
September 29, 2019 | ||
Inventories | ||
Identified intangible assets, net | ||
Goodwill | ||
Assets held for sale | ||
For the three months ended | For the nine months ended | ||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | ||||||||
Distributors | |||||||||||
Original Equipment Manufacturers and Electronic Manufacturing Services | |||||||||||
Other 1) | |||||||||||
Total | |||||||||||
1) Represents revenue for other services as of January 1, 2019 and represents revenue classified in Corporate and Other for prior periods. | |||||||||||
For the three months ended | For the nine months ended | ||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | ||||||||
Depreciation of property, plant and equipment | |||||||||||
Amortization of internal use software | |||||||||||
Amortization of other identified intangible assets | |||||||||||
Total | |||||||||||
For the three months ended | For the nine months ended | ||||
September 29, 2019 | September 29, 2019 | ||||
Income from MSA and TSA arrangements | |||||
Expenses from MSA and TSA arrangements | ( | ) | ( | ) | |
Result from MSA and TSA arrangements | ( | ) | |||
Other, net | |||||
Total | |||||
For the three months ended | For the nine months ended | ||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | ||||||||
Interest income | |||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | |||
Total interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | |||
Foreign exchange rate results | ( | ) | ( | ) | ( | ) | |||||
Extinguishment of debt | ( | ) | ( | ) | ( | ) | |||||
Miscellaneous financing costs/income and other, net | ( | ) | ( | ) | ( | ) | ( | ) | |||
Total other financial income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | |||
Total | ( | ) | ( | ) | ( | ) | ( | ) | |||
For the three months ended | For the nine months ended | ||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | ||||||||
Net income (loss) | |||||||||||
Less: net income (loss) attributable to non-controlling interests | |||||||||||
Net income (loss) attributable to stockholders | |||||||||||
Weighted average number of shares outstanding (after deduction of treasury shares) during the year (in thousands) | |||||||||||
Plus incremental shares from assumed conversion of: | |||||||||||
Options 1) | |||||||||||
Restricted Share Units, Performance Share Units and Equity Rights 2) | |||||||||||
Warrants 3) | |||||||||||
Dilutive potential common shares | |||||||||||
Adjusted weighted average number of shares outstanding (after deduction of treasury shares) during the year (in thousands) | |||||||||||
EPS attributable to stockholders in $: | |||||||||||
Basic net income (loss) | |||||||||||
Diluted net income (loss) | |||||||||||
September 29, 2019 | December 31, 2018 | ||||
Raw materials | |||||
Work in process | |||||
Finished goods | |||||
Currency translation differences | Change in fair value cash flow hedges | Net actuarial gain/(losses) | Accumulated Other Comprehensive Income (loss) | ||||||||
As of December 31, 2018 | ( | ) | ( | ) | |||||||
Other comprehensive income (loss) before reclassifications | ( | ) | ( | ) | ( | ) | ( | ) | |||
Amounts reclassified out of accumulated other comprehensive income (loss) | |||||||||||
Tax effects | |||||||||||
Other comprehensive income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | |||
As of September 29, 2019 | ( | ) | ( | ) | |||||||
Fiscal year 2019 | Fiscal year 2018 | ||||||
Dividend per share | Amount | Dividend per share | Amount | ||||
First quarter | |||||||
Second quarter | |||||||
Third quarter | |||||||
Balance January 1, 2019 | Additions | Utilized | Released | Other changes | Balance September 29, 2019 | ||||||||||||
Restructuring liabilities | ( | ) | ( | ) | ( | ) | |||||||||||
For the three months ended | For the nine months ended | ||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | ||||||||
Personnel lay-off costs | ( | ) | |||||||||
Other exit costs | |||||||||||
Net restructuring charges | ( | ) | |||||||||
For the three months ended | For the nine months ended | ||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | ||||||||
Cost of revenue | ( | ) | |||||||||
Selling, general and administrative | |||||||||||
Research and development | |||||||||||
Other income (expense) | ( | ) | |||||||||
Net restructuring charges | ( | ) | |||||||||
For the three months ended | For the nine months ended | ||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | ||||||||
Tax expense (benefit) | |||||||||||
Effective tax rate | % | % | % | % | |||||||
September 29, 2019 | December 31, 2018 | ||||||||||
Gross carrying amount | Accumulated amortization | Gross carrying amount | Accumulated amortization | ||||||||
In-process R&D (IPR&D) 1) | — | — | |||||||||
Marketing-related | ( | ) | ( | ) | |||||||
Customer-related | ( | ) | ( | ) | |||||||
Technology-based | ( | ) | ( | ) | |||||||
Identified intangible assets | ( | ) | ( | ) | |||||||
1) IPR&D is not subject to amortization until completion or abandonment of the associated research and development effort. | |||||||||||
2019 (remaining) | |
2020 | |
2021 | |
2022 | |
2023 | |
Thereafter | |
September 29, 2019 | December 31, 2018 | ||||||||||
Maturities | Amount | Effective rate | Amount | Effective rate | |||||||
Fixed-rate 4.125% senior unsecured notes | Jun, 2020 | ||||||||||
Fixed-rate 4.125% senior unsecured notes | Jun, 2021 | ||||||||||
Fixed-rate 4.625% senior unsecured notes | Jun, 2022 | ||||||||||
Fixed-rate 3.875% senior unsecured notes | Sep, 2022 | ||||||||||
Fixed-rate 4.625% senior unsecured notes | Jun, 2023 | ||||||||||
Fixed-rate 4.875% senior unsecured notes | Mar, 2024 | ||||||||||
Fixed-rate 5.35% senior unsecured notes | Mar, 2026 | ||||||||||
Fixed-rate 3.875% senior unsecured notes | Jun, 2026 | ||||||||||
Fixed-rate 5.55% senior unsecured notes | Dec, 2028 | ||||||||||
Fixed-rate 4.3% senior unsecured notes | Jun, 2029 | ||||||||||
Fixed-rate 1% cash convertible notes | Dec, 2019 | ||||||||||
Floating-rate revolving credit facility (RCF) | Jun, 2024 | ||||||||||
Total principal | |||||||||||
Liabilities arising from capital lease transactions | |||||||||||
Unamortized discounts, premiums and debt issuance costs | ( | ) | ( | ) | |||||||
Fair value of embedded cash conversion option | ( | ) | ( | ) | |||||||
Total debt, including unamortized discounts, premiums, debt issuance costs and fair value adjustments | |||||||||||
Current portion of long-term debt | ( | ) | ( | ) | |||||||
Long-term debt | |||||||||||
For the three months ended | For the nine months ended | ||||
September 29, 2019 | September 29, 2019 | ||||
Operating lease cost | |||||
Finance lease cost: | |||||
Amortization of right-of-use assets | |||||
Interest on lease liabilities | |||||
Total finance lease cost | |||||
For the three months ended | For the nine months ended | ||||
September 29, 2019 | September 29, 2019 | ||||
Supplemental cash flows information: | |||||
Operating cash flows from operating leases | |||||
Operating cash flows from finance leases | ( | ) | |||
Financing cash flows from finance leases | |||||
Right-of-use assets obtained in exchange for lease obligations: | |||||
Operating leases 1) | |||||
Finance leases | |||||
1) $188 million recorded on January 1, 2019 in accordance with the adoption of ASC 842. | |||||
Weighted average remaining lease term: | |||||
Operating leases | |||||
Finance leases | |||||
Weighted average discount rate: | |||||
Operating leases | % | ||||
Finance leases | % | ||||
As of | |||||
September 29, 2019 | |||||
Operating leases | Finance leases | ||||
2019 (remaining) | |||||
2020 | |||||
2021 | |||||
2022 | |||||
2023 | |||||
Thereafter | |||||
Total future minimum lease payments | |||||
Less: imputed interest | ( | ) | ( | ) | |
Total | |||||
As of | |||||
September 29, 2019 | |||||
Operating leases | Finance leases | ||||
Other current liabilities | |||||
Other non-current liabilities | |||||
Total | |||||
For the three months ended | For the nine months ended | ||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | ||||||||
Revenue and other income | |||||||||||
Purchase of goods and services | |||||||||||
September 29, 2019 | December 31, 2018 | ||||
Receivables | |||||
Payables | |||||
September 29, 2019 | December 31, 2018 | ||||||||||||
Fair value hierarchy | Carrying amount | Estimated fair value | Carrying amount | Estimated fair value | |||||||||
Assets: | |||||||||||||
Money market funds | 1 | ||||||||||||
Notes hedges | 3 | ||||||||||||
Other financial assets | 2 | ||||||||||||
Derivative instruments – assets | 2 | ||||||||||||
Liabilities: | |||||||||||||
Short-term debt | 2 | ( | ) | ( | ) | ||||||||
Short-term debt (2019 Cash Convertible Senior Notes) | 2 | ( | ) | ( | ) | ( | ) | ( | ) | ||||
Long-term debt (bonds) | 2 | ( | ) | ( | ) | ( | ) | ( | ) | ||||
Other long-term debt | 2 | ( | ) | ( | ) | ||||||||
Notes Embedded Conversion Derivative | 3 | ( | ) | ( | ) | ( | ) | ( | ) | ||||
Derivative instruments – liabilities | 2 | ( | ) | ( | ) | ( | ) | ( | ) | ||||
($ in millions, unless otherwise stated) | Q3 2019 | Q3 2018 | YTD 2019 | YTD 2018 | |||||||
Revenue | 2,265 | 2,445 | 6,576 | 7,004 | |||||||
% nominal growth | (7.4 | ) | 2.4 | (6.1 | ) | 3.0 | |||||
Gross profit | 1,186 | 1,256 | 3,409 | 3,608 | |||||||
Research and development | (396 | ) | (433 | ) | (1,219 | ) | (1,297 | ) | |||
Selling, general and administrative | (221 | ) | (252 | ) | (699 | ) | (742 | ) | |||
Amortization of acquisition-related intangible assets | (358 | ) | (362 | ) | (1,070 | ) | (1,085 | ) | |||
Other income (expense) | 22 | 2,002 | 23 | 2,002 | |||||||
Operating income (loss) | 233 | 2,211 | 444 | 2,486 | |||||||
($ in millions, unless otherwise stated) | Q3 2019 | Q3 2018 | YTD 2019 | YTD 2018 | |||||||
Gross profit | (19 | ) | (20 | ) | (56 | ) | (59 | ) | |||
Selling, general and administrative | (5 | ) | (2 | ) | (8 | ) | (6 | ) | |||
Amortization of acquisition-related intangible assets | (358 | ) | (362 | ) | (1,070 | ) | (1,085 | ) | |||
Operating income (loss) | (382 | ) | (384 | ) | (1,134 | ) | (1,150 | ) | |||
($ in millions, unless otherwise stated) | Q3 2019 | Q3 2018 | YTD 2019 | YTD 2018 | |||||||||||||
Revenue | Growth % | Revenue | Revenue | Growth % | Revenue | ||||||||||||
Revenue | 2,265 | (7.4 | ) | 2,445 | 6,576 | (6.1 | ) | 7,004 | |||||||||
($ in millions, unless otherwise stated) | Q3 2019 | Q3 2018 | YTD 2019 | YTD 2018 | |||||||||||||||
Gross profit | % of revenue | Gross profit | % of revenue | Gross profit | % of revenue | Gross profit | % of revenue | ||||||||||||
Gross Profit | 1,186 | 52.4 | 1,256 | 51.4 | 3,409 | 51.8 | 3,608 | 51.5 | |||||||||||
($ in millions, unless otherwise stated) | Q3 2019 | Q3 2018 | YTD 2019 | YTD 2018 | |||||||||||||||
Operating expenses | % of revenue | Operating expenses | % of revenue | Operating expenses | % of revenue | Operating expenses | % of revenue | ||||||||||||
Operating expenses | 975 | 43.0 | 1,047 | 42.8 | 2,988 | 45.4 | 3,124 | 44.6 | |||||||||||
($ in millions, unless otherwise stated) | Q3 2019 | Q3 2018 | YTD 2019 | YTD 2018 | |||||||
Research and development | 396 | 433 | 1,219 | 1,297 | |||||||
Selling, general and administrative | 221 | 252 | 699 | 742 | |||||||
Amortization of acquisition-related intangible assets | 358 | 362 | 1,070 | 1,085 | |||||||
Operating expenses | 975 | 1,047 | 2,988 | 3,124 | |||||||
($ in millions, unless otherwise stated) | Q3 2019 | Q3 2018 | YTD 2019 | YTD 2018 | |||||||||||||||
Operating income (loss) | % of revenue | Operating income (loss) | % of revenue | Operating income (loss) | % of revenue | Operating income (loss) | % of revenue | ||||||||||||
Operating income (loss) | 233 | 10.3 | 2,211 | 90.4 | 444 | 6.8 | 2,486 | 35.5 | |||||||||||
($ in millions, unless otherwise stated) | Q3 2019 | Q3 2018 | YTD 2019 | YTD 2018 | |||||||
Interest income | 17 | 13 | 42 | 38 | |||||||
Interest expense | (98 | ) | (61 | ) | (274 | ) | (197 | ) | |||
Total interest expense, net | (81 | ) | (48 | ) | (232 | ) | (159 | ) | |||
Foreign exchange rate results | 1 | (1 | ) | (6 | ) | (1 | ) | ||||
Extinguishment of debt | (1 | ) | — | (11 | ) | (26 | ) | ||||
Miscellaneous financing costs/income and other, net | (4 | ) | (70 | ) | (8 | ) | (72 | ) | |||
Total other financial income (expense) | (4 | ) | (71 | ) | (25 | ) | (99 | ) | |||
Total | (85 | ) | (119 | ) | (257 | ) | (258 | ) | |||
($ in millions, unless otherwise stated) | Q3 2019 | Q3 2018 | YTD 2019 | YTD 2018 | |||||||
Operating income (loss) | 233 | 2,211 | 444 | 2,486 | |||||||
Financial income (expense) | (85 | ) | (119 | ) | (257 | ) | (258 | ) | |||
Benefit (provision) for income taxes | (28 | ) | (311 | ) | (40 | ) | (317 | ) | |||
Results relating to equity-accounted investees | (1 | ) | 52 | 2 | 58 | ||||||
Net income (loss) | 119 | 1,833 | 149 | 1,969 | |||||||
($ in millions, unless otherwise stated) | YTD 2019 | YTD 2018 | |||
Net cash provided by (used for) operating activities | 1,559 | 3,638 | |||
Net cash provided by (used for) investing activities | (418 | ) | (348 | ) | |
Net cash provided by (used for) financing activities | (388 | ) | (4,885 | ) | |
Net cash increase (decrease) in cash and cash equivalents | 753 | (1,595 | ) | ||
Period | Total Number of Shares Purchased | Average Price Paid per Share | Number of Shares Purchased as Part of Publicly Announced Buy Back Programs | Maximum Number of Shares That May Yet Be Purchased Under the Buy Back Program (1) | Number of Shares Purchased as Trade for Tax (1) | |||||||||
July 1, 2019 – August 4, 2019 | 84,865 | $101.81 | — | — | 84,865 | |||||||||
August 5, 2019 – September 1, 2019 | 3,829 | $100.78 | — | — | 3,829 | |||||||||
September 2, 2019 – September 29, 2019 | 200 | $106.00 | — | — | 200 | |||||||||
Total | 88,894 | — | 88,894 | |||||||||||
Exhibit Number | Exhibit Description | ||
3.1 | |||
3.2 | |||
10.1* + | |||
10.2* + | |||
10.3* + | |||
31.1* | |||
31.2* | |||
32.1** | |||
101 | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 29, 2019, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations for the three and nine months ended September 29, 2019 and September 30, 2018; (ii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 29, 2019 and September 30, 2018; (iii) Condensed Consolidated Balance Sheets as of September 29, 2019 and December 31, 2018; (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended September 29, 2019 and September 30, 2018; (v) Condensed Consolidated Statements of Changes in Equity for the three and nine months ended September 29, 2019 and September 30, 2018; and (vi) Notes to the Unaudited Condensed Consolidated Financial Statements. | ||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | ||
+ | Indicates management contract or compensatory plan or arrangement. |
* | Filed herewith. |
** | Furnished herewith. |
NXP Semiconductors N.V. | |
/s/ P. Kelly | |
Name: P. Kelly, CFO | |
1. | I have reviewed this quarterly report on Form 10-Q of NXP Semiconductors N.V.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
4. | The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
5. | The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize, and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
By: | /s/ Richard L. Clemmer | |
Richard L. Clemmer | ||
Chief Executive Officer | ||
1. | I have reviewed this quarterly report on Form 10-Q of NXP Semiconductors N.V.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
4. | The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
5. | The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize, and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
By: | /s/ Peter Kelly | |
Peter Kelly | ||
Chief Financial Officer | ||
By: | /s/ Richard L. Clemmer | |
Richard L. Clemmer | ||
Chief Executive Officer | ||
By: | /s/ Peter Kelly | |
Peter Kelly | ||
Chief Financial Officer | ||
(i). | “Bad Leaver” shall mean a Director whose service on the Company’s Board of Directors is terminated (A) following the Director committing an act of theft, fraud, serious misconduct or deliberate falsification of records in relation to his duties for the Company ; (B) following the Director being convicted of or pleading guilty to a serious criminal offence (misdrijf) relating to his or her duties for the Company (excluding any motoring or non-duty related minor offence), which act or criminal offence referred to in (A) and/or (B) has a material adverse effect upon the Company; or (C) a Director materially violates the Company Code of Conduct or similarly significant rule or policy of the Company. |
(i). | “Bad Leaver” shall mean a Participant whose employment with an Employing Company is terminated (A) following the Participant committing an act of theft, fraud, serious misconduct or deliberate falsification of records in relation to his duties for the Company or the Employing Company; (B) following the Participant being convicted of or pleading guilty to a serious criminal offence (misdrijf) relating to his or her duties for the Company or the Employing Company (excluding any motoring or non-duty related minor offence), which act or criminal offence referred to in (A) and/or (B) has a material adverse effect upon the Company or the Employing Company; (C) with immediate effect because of an urgent cause (dringende reden) as referred to in article 7:678 of the Dutch Civil Code for cause; (D) a Participant materially violates the Company Code of Conduct or similarly significant rule or policy of the Company or the Employing Company; or (E) a Participant within the twelve (12) month period following the termination of employment, directly or indirectly and in any capacity whatsoever, engages in any activities in competition with the activities of any of the Company, its Subsidiaries or its Affiliates, including the Participant personally actively soliciting or personally actively endeavoring to entice away or personally actively recruiting any employees of the Company, its Subsidiaries or its Affiliates in said period. |
(ii). | “Good Reason” shall have the meaning in the employment agreement between the Participant and the Employing Company. If the Participant does not have an employment agreement with the Employing Company in which Good Reason is defined, “Good Reason” means, in the absence of the Participant’s written consent, any of the following: (i) a material reduction by the Employing Company in the Participant’s net base salary or target bonus (taking into account applicable taxes and mandatory withholdings in the event of Participant’s geographical relocation at the request of the Employing Company) unless the base salary or target bonus of other employees or officers of the Company, any of its Subsidiaries or the applicable Employing Company in a similar position is reduced by a similar percentage or amount as part of cost reductions, restructuring, or job grade alignment affecting all of the company or the Participant’s Employing Company or business unit; or (ii) a material diminution in the Participant’s duties or responsibilities (other than as a result of the Participant’s physical or mental incapacity which impairs his or her ability to materially perform his or her duties or responsibilities as confirmed by a doctor reasonably acceptable to the Participant or his or her representative and such diminution lasts only for so long as such doctor determines such incapacity impairs the Participant’s ability to materially perform his or her duties or responsibilities). |
(iii). | “Pro-Rata Portion” shall mean, for the period commencing on the Date of Grant and ending on each applicable Vesting Date occurring after the date of termination of employment, a number of shares of Common Stock equal to the product of (x) a fraction, the numerator of which is the number of days the Participant was employed by the Employing Company on and after the Date of Grant and the denominator of which is the number of days between the Date of Grant and the applicable Vesting Date, multiplied by (y) the number of RSUs that would have otherwise vested on the applicable Vesting Date absent the Participant’s termination of employment, with any fractional shares rounded to the nearest whole number of shares. |
(iv). | “Retirement” shall mean the Participant’s termination of employment with the Company or the Employing Company where a Participant is eligible to receive an immediate (early) retirement benefit under an (early) retirement plan of the Employing Company in which the Participant was eligible to participate and in accordance with the terms, conditions or guidelines of such plan or the Company or the Employing Company applicable to the Participant; provided, that if the Participant |
(i). | “Bad Leaver” shall mean a Participant whose employment with an Employing Company is terminated (A) following the Participant committing an act of theft, fraud, serious misconduct or deliberate falsification of records in relation to his duties for the Company or the Employing Company; (B) following the Participant being convicted of or pleading guilty to a serious criminal offence (misdrijf) relating to his or her duties for the Company or the Employing Company (excluding any motoring or non-duty related minor offence), which act or criminal offence referred to in (A) and/or (B) has a material adverse effect upon the Company or the Employing Company; (C) with immediate effect because of an urgent cause (dringende reden) as referred to in article 7:678 of the Dutch Civil Code for cause; (D) a Participant materially violates the Company Code of Conduct or similarly significant rule or policy of the Company or the Employing Company; or (E) a Participant within the twelve (12) month period following the termination of employment, directly or indirectly and in any capacity whatsoever, engages in any activities in competition with the activities of any of the Company, its Subsidiaries or its Affiliates, including the Participant personally actively soliciting or personally actively endeavoring to entice away or personally actively recruiting any employees of the Company, its Subsidiaries or its Affiliates in said period. |
(ii). | “Good Reason” shall have the meaning in the employment agreement between the Participant and the Employing Company. If the Participant does not have an employment agreement with the Employing Company in which Good Reason is defined, “Good Reason” means, in the absence of the Participant’s written consent, any of the following: (i) a material reduction by the Employing Company in the Participant’s net base salary or target bonus (taking into account applicable taxes and mandatory withholdings in the event of Participant’s geographical relocation at the request of the Employing Company) unless the base salary or target bonus of other employees or officers of the Company, any of its Subsidiaries or the applicable Employing Company in a similar position is reduced by a similar percentage or amount as part of cost reductions, restructuring, or job grade alignment affecting all of the company or the Participant’s Employing Company or business unit; or (ii) a material diminution in the Participant’s duties or responsibilities (other than as a result of the Participant’s physical or mental incapacity which impairs his or her ability to materially perform his or her duties or responsibilities as confirmed by a doctor reasonably acceptable to the Participant or his or her representative and such diminution lasts only for so long as such doctor determines such incapacity impairs the Participant’s ability to materially perform his or her duties or responsibilities). |
(iii). | “Pro-Rata Portion” shall mean a number of PSUs equal to the product of (x) a fraction, the numerator of which is the number of days the Participant was employed by the Employing Company on and after the Date of Grant and the denominator of which is the number of days between the Date of Grant and the third anniversary of the Date of Grant, multiplied by (y) the number of PSUs that would have otherwise vested on the applicable Vesting Date absent the Participant’s termination of employment, with any fractional shares rounded to the nearest whole number of shares. |
(iv). | “Retirement” shall mean the Participant’s termination of employment with the Company or the Employing Company where a Participant is eligible to receive an immediate (early) retirement benefit under an (early) retirement plan of the Employing Company in which the Participant was eligible to participate and in accordance with the terms, conditions or guidelines of such plan or the Company or the Employing Company applicable to the Participant; provided, that if the Participant is resident in a country where neither the Company nor the Employing Company sponsor such a plan, then “Retirement” shall be determined by the Administrator in the context of local practice, including, but not limited to, eligibility to participate in a retirement plan sponsored by a governmental entity; provided, further, that if the Participant is resident in the United States and is not party to an employment contract or agreement with the Company or the Employing Company that provides for the terms and conditions of “Retirement,” “Retirement” shall mean the Participant’s termination of employment with the Company or the Employing Company following having both attained five (5) years of service with the Employing Company and age fifty-five (55). |
1. | Share Delivery Factor. |
Relative TSR Percentile Rank | Share Delivery Factor |
<25% | 0 |
25% | .5 |
50% | 1.0 |
75% | 2.0 |
>75% | 2.0 |
Basis of Presentation and Overview (Details) $ in Millions |
May 29, 2019
USD ($)
|
|---|---|
| Marvell | |
| Business Acquisition [Line Items] | |
| Payment to acquire business unit | $ 1,760 |
Assets Held for Sale - Summary of carrying value of assets deld for sale (Details) - USD ($) $ in Millions |
Sep. 29, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
| Assets held for sale | $ 61 | $ 0 |
| Voice and Audio Solutions | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||
| Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
| Inventories | 11 | |
| Identified intangible assets, net | 1 | |
| Goodwill | 49 | |
| Assets held for sale | $ 61 |
Related-Party Transactions |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Related-Party Transactions | Related-Party Transactions The Company's related parties are the members of the board of directors of NXP, the executive officers of NXP and equity-accounted investees and, up to July 26, 2018, Qualcomm Incorporated ("Qualcomm"). As of the divestment of the SP business on February 7, 2017, the newly formed Nexperia has become a related party. We have a number of strategic alliances and joint ventures. We have relationships with certain of our alliance partners in the ordinary course of business whereby we enter into various sale and purchase transactions, generally on terms comparable to transactions with third parties. However, in certain instances upon divestment of former businesses where we enter into supply arrangements with the former owned business, sales are conducted at cost. The following table presents the amounts related to revenue and other income and purchase of goods and services incurred in transactions with these related parties:
The following table presents the amounts related to receivable and payable balances with these related parties:
We have entered into lease commitments and related services to Nexperia, which are $48 million as of September 29, 2019, and committed $50 million to an investment fund affiliated with Nexperia’s owners. The lease commitments are reflected in our recorded lease liabilities in other current and non-current liabilities.
|
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Income Taxes |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Taxes | Income Taxes Benefit/provision for income taxes:
Our effective tax rate reflects the impact of tax incentives, non-deductible expenses, change in valuation allowance, a portion of our earnings being taxed in foreign jurisdictions at rates different than the Netherlands statutory tax rate, and the mix of income and losses in various jurisdictions. Our effective tax rate for the first nine months of 2019 was 21.4% compared with an expense of 14.2% on a pre-tax profit for the first nine months of 2018. The movement in our effective tax rate reflects mainly the decrease in tax incentives ($152 million), the increase in the prior year adjustments ($19 million) and the increase in the change in valuation allowance ($32 million). |
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Acquisitions and Divestments |
9 Months Ended |
|---|---|
Sep. 29, 2019 | |
| Business Combinations [Abstract] | |
| Acquisitions and Divestments | Acquisitions and Divestments There were no material acquisitions during the first nine months of 2019. On March 27, 2019, we sold our remaining equity interest in WeEn, receiving net cash proceeds of $37 million. There were no material acquisitions during 2018. On July 10, 2018, NXP completed the sale of its 40% equity interest in Suzhou ASEN Semiconductors Co., Ltd. to J&R Holding Limited, receiving $127 million in cash proceeds. The net gain realized on the sale of $51 million is included in the statement of operations in the line item "Results relating to equity-accounted investees". In June 2018, NXP completed the sale of 24% of its equity interest in WeEn to Tianjin Ruixin Semiconductor Industry Investment Centre LLP, receiving $32 million in cash proceeds. At December 31, 2018, due to the intended sale of the remaining interest in WeEn, NXP transferred the remaining holding to other current assets.
|
Leases - Narrative (Details) - USD ($) $ in Millions |
9 Months Ended | |
|---|---|---|
Sep. 29, 2019 |
Jan. 01, 2019 |
|
| Lessee, Lease, Description [Line Items] | ||
| Operating lease, remaining lease term | 6 years | |
| Finance lease, remaining lease term | 12 years 8 months 12 days | |
| Operating lease, option to extend term | 5 years | |
| Finance lease, option to extend term | 5 years | |
| Operating lease, termination period | 1 year | |
| Finance lease, termination period | 1 year | |
| Assets under finance leases, gross | $ 29 | |
| Accumulated depreciation under finance leases | 4 | |
| Right-of-use assets | $ 220 | $ 188 |
| Minimum | ||
| Lessee, Lease, Description [Line Items] | ||
| Operating lease, remaining lease term | 1 year | |
| Finance lease, remaining lease term | 1 year | |
| Maximum | ||
| Lessee, Lease, Description [Line Items] | ||
| Operating lease, remaining lease term | 30 years | |
| Finance lease, remaining lease term | 30 years |
Leases - Lease Liabilities (Details) - USD ($) $ in Millions |
Sep. 29, 2019 |
Jan. 01, 2019 |
|---|---|---|
| Leases [Abstract] | ||
| Other current liabilities, operating leases | $ 55 | $ 53 |
| Other non-current liabilities, operating leases | 168 | 135 |
| Total | 223 | 188 |
| Other current liabilities, finance leases | 2 | |
| Other non-current liabilities, finance leases | 24 | |
| Total | $ 26 | $ 30 |
Supplemental Financial Information - Cash and cash equivalents (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||||
|---|---|---|---|---|---|---|---|
Sep. 29, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Sep. 30, 2018 |
Sep. 29, 2019 |
Sep. 30, 2018 |
Dec. 31, 2018 |
|
| Cash and Cash Equivalents [Line Items] | |||||||
| Cash and cash equivalents | $ 3,537,000,000 | $ 3,537,000,000 | $ 2,789,000,000 | ||||
| Dividend distribution | 105,000,000 | $ 70,000,000 | $ 71,000,000 | $ 74,000,000 | 246,000,000 | $ 74,000,000 | |
| SSMC [Member] | |||||||
| Cash and Cash Equivalents [Line Items] | |||||||
| Cash and cash equivalents | $ 169,000,000 | 169,000,000 | $ 140,000,000 | ||||
| Dividend distribution | $ 0 | $ 139,000,000 | |||||
| TSMC [Member] | |||||||
| Cash and Cash Equivalents [Line Items] | |||||||
| Ownership percentage by noncontrolling owners | 38.80% | 38.80% | |||||
Supplemental Financial Information - Shareholder tax on repurchased shares (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
|---|---|---|---|---|---|
Sep. 29, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Sep. 30, 2018 |
Sep. 29, 2019 |
|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
| Shareholder tax on repurchased shares | $ 2 | $ 155 | $ (62) | $ (353) | $ 127 |
Identified Intangible Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Identified Intangible Assets | Identified intangible assets as of September 29, 2019 and December 31, 2018, respectively, were composed of the following:
|
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| Schedule of Estimated Amortization Expense | The estimated amortization expense for these identified intangible assets for each of the five succeeding years is:
|
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Assets Held for Sale (Tables) |
9 Months Ended | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 29, 2019 | ||||||||||||||||||||||
| Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||
| Schedule of Assets Held for Sale | The following table summarizes the carrying value of these assets held for sale:
|
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Related-Party Transactions (Details) - USD ($) $ in Millions |
Sep. 29, 2019 |
Jan. 01, 2019 |
|---|---|---|
| Related Party Transaction [Line Items] | ||
| Lease liabilities | $ 223 | $ 188 |
| Nexperia | ||
| Related Party Transaction [Line Items] | ||
| Lease liabilities | 48 | |
| Commitment to affiliated investment funds | $ 50 |
Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Millions |
Sep. 29, 2019 |
Jan. 01, 2019 |
|---|---|---|
| Operating leases | ||
| 2019 (remaining) | $ 16 | |
| 2020 | 57 | |
| 2021 | 46 | |
| 2022 | 32 | |
| 2023 | 27 | |
| Thereafter | 67 | |
| Total future minimum lease payments | 245 | |
| Less: imputed interest | (22) | |
| Total | 223 | $ 188 |
| Finance leases | ||
| 2019 (remaining) | 1 | |
| 2020 | 3 | |
| 2021 | 3 | |
| 2022 | 3 | |
| 2023 | 3 | |
| Thereafter | 22 | |
| Total future minimum lease payments | 35 | |
| Less: imputed interest | (9) | |
| Total | $ 26 | $ 30 |
Supplemental Financial Information - Inventories (Details) - USD ($) $ in Millions |
Sep. 29, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
| Finished goods under consignment | $ 47 | $ 52 |
| Raw materials | 64 | 74 |
| Work in process | 858 | 949 |
| Finished goods | 212 | 256 |
| Inventory, Net | 1,134 | 1,279 |
| Allowance for obsolescence | $ 114 | $ 111 |
Restructuring - Change in Restructuring Reserve (Details) $ in Millions |
9 Months Ended |
|---|---|
|
Sep. 29, 2019
USD ($)
| |
| Restructuring Reserve [Roll Forward] | |
| Restructuring liability, beginning balance | $ 65 |
| Additions | 30 |
| Utilized | (48) |
| Released | (4) |
| Other changes | (2) |
| Restructuring liability, ending balance | $ 41 |
Income Taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Income Tax Expense (Benefits) and Effective Tax Rates | Benefit/provision for income taxes:
|
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Significant Accounting Policies and Recent Accounting Pronouncements (Policies) |
9 Months Ended | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 29, 2019 | |||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||
| Recently adopted accounting pronouncements | In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), followed in July 2018 by ASU 2018-10, Codification Improvements to Topic 842 Leases, and ASU 2018-11, Leases (Topic 842): Targeted Improvements. Under the new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of this adoption and the required disclosures, the Company revised its accounting policy for leases as stated below. The new standard became effective for us on January 1, 2019. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. See also Note 10, Leases. Leases As of January 1, 2019, our impact resulting from operating leases is as follows:
We elected to adopt the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs, along with the practical expedient to use hindsight when determining the lease term. We determine if an arrangement is a lease at inception of the arrangement. Once it is determined that an arrangement is, or contains, a lease, that determination should only be reassessed if the legal arrangement is modified. Changes to assumptions such as market-based factors do not trigger a reassessment. Determining whether a contract contains a lease requires judgement. In general, arrangements are considered to be a lease when all of the following apply:
The terms of a lease arrangement determine how a lease is classified and the resulting income statement recognition. When the terms of a lease effectively transfer control of the underlying asset, the lease represents an in substance financed purchase (sale) of an asset and the lease is classified as a finance lease by the lessee and a sales-type lease by the lessor. When a lease does not effectively transfer control of the underlying asset to the lessee, but the lessor obtains a guarantee for the value of the asset from a third party, the lessor would classify a lease as a direct financing lease. All other leases are classified as operating leases. With the exception of two instances (with a combined value of approximately $30 million), the Company’s lease arrangements were all operating leases. Lease assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at January 1, 2019 or commencement date, if later, in determining the present value of future payments. The lease ROU asset includes any lease payment made and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease which are included in the measurement of the ROU assets and lease liabilities when it is reasonably certain that we will exercise that option. For operating leases the lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. For finance leases each lease payment is allocated between the liability and finance cost. The finance cost is charged to the condensed consolidated statement of operations over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The finance lease asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. We have lease agreements with lease and non-lease components. Except for gas and chemical contracts, NXP did not make the election to treat the lease and non-lease components as a single component, and considers the non-lease components as a separate unit of account. Accounting standards adopted in 2019 In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvement to Accounting for Hedging Activities. ASU 2017-12 simplifies certain aspects of hedge accounting and improves disclosures of hedging arrangements through the elimination of the requirement to separately measure and report hedge ineffectiveness. The ASU generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. Entities must apply the amendments to cash flow and net investment hedge relationships that exist on the date of adoption using a modified retrospective approach. The presentation and disclosure requirements must be applied prospectively. ASU 2017-12 became effective for us on January 1, 2019. The adoption of this guidance did not have a material impact on our financial position or results of operations. Recently issued accounting standards In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Instead, the one step quantitative impairment test calculates goodwill impairment as the excess of the carrying value of a reporting unit over its fair value, up to the carrying value of the goodwill. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted. The ASU should be applied on a prospective basis. The Company does not expect the adoption of this guidance to have a material impact on our financial position or results of operations. In August 2018, the FASB issued ASU 2018-13, Fair Value measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 removes certain disclosure requirements, including the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 also adds disclosure requirements, including changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. ASU 2018-13 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2019, with early adoption permitted. The amendments on changes in unrealized gains and losses, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company does not expect the adoption of this guidance to have a material impact on our financial statement disclosures. In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans. ASU 2018-14 removes disclosures that no longer are considered cost beneficial, clarifies the specific requirements of disclosures, and adds disclosure requirements identified as relevant. ASU 2018-14 should be applied on a retrospective basis to all periods presented and is effective for annual reporting periods beginning after December 15, 2020, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on our financial statement disclosures. In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 requires a customer in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. Therefore, a customer in a hosting arrangement that is a service contract determines which project stage an implementation activity relates to. Costs for implementation activities in the application development stage are capitalized depending on the nature of the costs, while costs incurred during the preliminary project and post-implementation stages are expensed as the activities are performed. ASU 2018-15 also requires the customer to expense the capitalized implementation costs over the term of the hosting arrangement, and to apply the existing impairment guidance in Subtopic 350-40 to the capitalized implementation costs as if the costs were long-lived assets. ASU 2018-15 can be applied either retrospectively or prospectively and is effective for annual reporting periods beginning after December 15, 2019, and interim periods therein, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on our financial position or results of operations.
|
Significant Accounting Policies and Recent Accounting Pronouncements (Details) - USD ($) $ in Millions |
Sep. 29, 2019 |
Jan. 01, 2019 |
|---|---|---|
| Accounting Policies [Abstract] | ||
| Right-of-use assets | $ 220 | $ 188 |
| Lease liabilities | 223 | 188 |
| Short term lease liabilities | 55 | 53 |
| Long term lease liabilities | 168 | 135 |
| Liabilities arising from capital lease transactions | $ 26 | $ 30 |
Supplemental Financial Information - Disaggregation of revenue (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 29, 2019 |
Sep. 30, 2018 |
Sep. 29, 2019 |
Sep. 30, 2018 |
|
| Disaggregation of Revenue [Line Items] | ||||
| Revenue | $ 2,265 | $ 2,445 | $ 6,576 | $ 7,004 |
| Distributors | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Revenue | 1,145 | 1,270 | 3,190 | 3,595 |
| Original Equipment Manufacturers and Electronic Manufacturing Services | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Revenue | 1,082 | 1,081 | 3,308 | 3,115 |
| Other | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Revenue | $ 38 | $ 94 | $ 78 | $ 294 |
Restructuring |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring | Restructuring At each reporting date, we evaluate our restructuring liabilities, which consist primarily of termination benefits, to ensure that our accruals are still appropriate. The following table presents the changes in restructuring liabilities in 2019:
The components of restructuring charges recorded for each of the three and nine month periods ended September 29, 2019 and September 30, 2018 are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies and Recent Accounting Pronouncements |
9 Months Ended | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 29, 2019 | |||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||
| Significant Accounting Policies and Recent Accounting Pronouncements | Significant Accounting Policies and Recent Accounting Pronouncements Significant Accounting Policies Except for the changes below, no material changes have been made to the Company's significant accounting policies disclosed in Note 2 Significant Accounting Policies in our Annual Report on Form 20-F for the year ended December 31, 2018. The accounting policy information below is to aid in the understanding of the financial information disclosed. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), followed in July 2018 by ASU 2018-10, Codification Improvements to Topic 842 Leases, and ASU 2018-11, Leases (Topic 842): Targeted Improvements. Under the new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of this adoption and the required disclosures, the Company revised its accounting policy for leases as stated below. The new standard became effective for us on January 1, 2019. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. See also Note 10, Leases. Leases As of January 1, 2019, our impact resulting from operating leases is as follows:
We elected to adopt the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs, along with the practical expedient to use hindsight when determining the lease term. We determine if an arrangement is a lease at inception of the arrangement. Once it is determined that an arrangement is, or contains, a lease, that determination should only be reassessed if the legal arrangement is modified. Changes to assumptions such as market-based factors do not trigger a reassessment. Determining whether a contract contains a lease requires judgement. In general, arrangements are considered to be a lease when all of the following apply:
The terms of a lease arrangement determine how a lease is classified and the resulting income statement recognition. When the terms of a lease effectively transfer control of the underlying asset, the lease represents an in substance financed purchase (sale) of an asset and the lease is classified as a finance lease by the lessee and a sales-type lease by the lessor. When a lease does not effectively transfer control of the underlying asset to the lessee, but the lessor obtains a guarantee for the value of the asset from a third party, the lessor would classify a lease as a direct financing lease. All other leases are classified as operating leases. With the exception of two instances (with a combined value of approximately $30 million), the Company’s lease arrangements were all operating leases. Lease assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at January 1, 2019 or commencement date, if later, in determining the present value of future payments. The lease ROU asset includes any lease payment made and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease which are included in the measurement of the ROU assets and lease liabilities when it is reasonably certain that we will exercise that option. For operating leases the lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. For finance leases each lease payment is allocated between the liability and finance cost. The finance cost is charged to the condensed consolidated statement of operations over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The finance lease asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. We have lease agreements with lease and non-lease components. Except for gas and chemical contracts, NXP did not make the election to treat the lease and non-lease components as a single component, and considers the non-lease components as a separate unit of account. Accounting standards adopted in 2019 In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvement to Accounting for Hedging Activities. ASU 2017-12 simplifies certain aspects of hedge accounting and improves disclosures of hedging arrangements through the elimination of the requirement to separately measure and report hedge ineffectiveness. The ASU generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. Entities must apply the amendments to cash flow and net investment hedge relationships that exist on the date of adoption using a modified retrospective approach. The presentation and disclosure requirements must be applied prospectively. ASU 2017-12 became effective for us on January 1, 2019. The adoption of this guidance did not have a material impact on our financial position or results of operations. Recently issued accounting standards In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Instead, the one step quantitative impairment test calculates goodwill impairment as the excess of the carrying value of a reporting unit over its fair value, up to the carrying value of the goodwill. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted. The ASU should be applied on a prospective basis. The Company does not expect the adoption of this guidance to have a material impact on our financial position or results of operations. In August 2018, the FASB issued ASU 2018-13, Fair Value measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 removes certain disclosure requirements, including the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 also adds disclosure requirements, including changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. ASU 2018-13 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2019, with early adoption permitted. The amendments on changes in unrealized gains and losses, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company does not expect the adoption of this guidance to have a material impact on our financial statement disclosures. In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans. ASU 2018-14 removes disclosures that no longer are considered cost beneficial, clarifies the specific requirements of disclosures, and adds disclosure requirements identified as relevant. ASU 2018-14 should be applied on a retrospective basis to all periods presented and is effective for annual reporting periods beginning after December 15, 2020, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on our financial statement disclosures. In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 requires a customer in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. Therefore, a customer in a hosting arrangement that is a service contract determines which project stage an implementation activity relates to. Costs for implementation activities in the application development stage are capitalized depending on the nature of the costs, while costs incurred during the preliminary project and post-implementation stages are expensed as the activities are performed. ASU 2018-15 also requires the customer to expense the capitalized implementation costs over the term of the hosting arrangement, and to apply the existing impairment guidance in Subtopic 350-40 to the capitalized implementation costs as if the costs were long-lived assets. ASU 2018-15 can be applied either retrospectively or prospectively and is effective for annual reporting periods beginning after December 15, 2019, and interim periods therein, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on our financial position or results of operations.
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Leases |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases | Leases Operating and finance lease assets relate to buildings (corporate offices, research and development and manufacturing facilities and datacenters), land, machinery and installations and other equipment (vehicles and certain office equipment). These leases have remaining lease terms of 1 to 30 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to terminate the leases within 1 year. As of September 29, 2019, assets recorded under finance leases were $29 million and accumulated depreciation associated with finance leases was $4 million. The components of lease expense were as follows:
Other information related to leases was as follows:
Future minimum lease payments as of September 29, 2019 were as follows:
Lease liabilities related to leases are split between current and non-current:
Operating lease right-of-use assets are $220 million as of September 29, 2019 and are included in other non-current assets in the condensed consolidated balance sheet.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases | Leases Operating and finance lease assets relate to buildings (corporate offices, research and development and manufacturing facilities and datacenters), land, machinery and installations and other equipment (vehicles and certain office equipment). These leases have remaining lease terms of 1 to 30 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to terminate the leases within 1 year. As of September 29, 2019, assets recorded under finance leases were $29 million and accumulated depreciation associated with finance leases was $4 million. The components of lease expense were as follows:
Other information related to leases was as follows:
Future minimum lease payments as of September 29, 2019 were as follows:
Lease liabilities related to leases are split between current and non-current:
Operating lease right-of-use assets are $220 million as of September 29, 2019 and are included in other non-current assets in the condensed consolidated balance sheet.
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 29, 2019 |
Sep. 30, 2018 |
Sep. 29, 2019 |
Sep. 30, 2018 |
|
| Statement of Comprehensive Income [Abstract] | ||||
| Net income (loss) | $ 119 | $ 1,833 | $ 149 | $ 1,969 |
| Other comprehensive income (loss), net of tax: | ||||
| Change in fair value cash flow hedges | 0 | (16) | ||
| Change in fair value cash flow hedges | (9) | (4) | ||
| Change in foreign currency translation adjustment | (41) | 8 | (47) | (33) |
| Change in net actuarial gain (loss) | (1) | (2) | (5) | (5) |
| Change in unrealized gains/losses available-for-sale securities | 0 | 0 | 0 | 3 |
| Total other comprehensive income (loss) | (51) | 6 | (56) | (51) |
| Total comprehensive income (loss) | 68 | 1,839 | 93 | 1,918 |
| Less: Comprehensive income (loss) attributable to non-controlling interests | 10 | 13 | 20 | 37 |
| Total comprehensive income (loss) attributable to stockholders | $ 58 | $ 1,826 | $ 73 | $ 1,881 |
Income Taxes (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 29, 2019 |
Sep. 30, 2018 |
Sep. 29, 2019 |
Sep. 30, 2018 |
|
| Income Tax Disclosure [Abstract] | ||||
| Effective tax rate | 18.90% | 14.90% | 21.40% | 14.20% |
| Decrease in tax incentives | $ 152 | |||
| Prior year adjustments | 19 | |||
| Chane in valuation allowance | 32 | |||
| Foreign income tax change due to impact of tax holiday | $ 4 | $ 5 | $ 8 | $ 15 |
| Benefit of tax holiday on net income per share (diluted) (in dollars per share) | $ 0.01 | $ 0.02 | $ 0.03 | $ 0.04 |
Supplemental Financial Information - Cash dividends (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | ||||
|---|---|---|---|---|---|---|
Sep. 29, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Sep. 30, 2018 |
Sep. 29, 2019 |
Sep. 30, 2018 |
|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
| Dividend per share (USD per share) | $ 0.375 | $ 0.250 | $ 0.250 | $ 0.250 | $ 0.875 | $ 0.250 |
| Amount | $ 105 | $ 70 | $ 71 | $ 74 | $ 246 | $ 74 |
Restructuring - Schedule of Components of Restructuring Charges (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 29, 2019 |
Sep. 30, 2018 |
Sep. 29, 2019 |
Sep. 30, 2018 |
|
| Restructuring Cost and Reserve [Line Items] | ||||
| Net restructuring charges | $ (1) | $ 5 | $ 29 | $ 5 |
| Personnel lay-off costs | ||||
| Restructuring Cost and Reserve [Line Items] | ||||
| Net restructuring charges | (1) | 4 | 29 | 4 |
| Other exit costs | ||||
| Restructuring Cost and Reserve [Line Items] | ||||
| Net restructuring charges | $ 0 | $ 1 | $ 0 | $ 1 |
Fair Value of Financial Assets and Liabilities (Details) |
Sep. 29, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Level 3 | Measurement Input, Price Volatility | ||
| Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
| Fair value assumptions unobservable inputs | 0.391 | 0.348 |