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Supplemental Financial Information
 3 Months Ended
Mar. 29, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Supplemental Financial Information Supplemental Financial Information

Statement of Operations Information:

Disaggregation of revenue

The following table presents revenue disaggregated by sales channel:

 
For the three months ended
 
March 29,
2020

 
March 31,
2019

Distributors
984

 
962

Original Equipment Manufacturers and Electronic Manufacturing Services
1,000

 
1,114

Other
37

 
18

Total
2,021

 
2,094



Depreciation, amortization and impairment

 
For the three months ended
 
March 29,
2020

 
March 31,
2019

Depreciation of property, plant and equipment
132

 
124

Amortization of internal use software
2

 
2

Amortization of other identified intangible assets
406

 
376

Total - Depreciation, amortization and impairment
540

 
502





Other income (expense)

Income derived from manufacturing service arrangements (“MSA”) and transitional service arrangements (“TSA”) that are put in place when we divest a business or activity, is included in other income (expense). These arrangements are short-term in nature and are expected to decrease as the divested business or activity becomes more established.

The following table presents the split of other income (expense):

 
For the three months ended
 
For the three months ended
 
March 29,
2020

 
March 31,
2019

Income from MSA and TSA arrangements
33

 
26

Expenses from MSA and TSA arrangements
(33
)
 
(24
)
Result from MSA and TSA arrangements
—

 
2

Other, net
110
 
—

Total
110
 
2



Financial income and expense

 
For the three months ended
 
March 29,
2020

 
March 31,
2019

Interest income
4

 
13

Interest expense
(82
)
 
(87
)
Total interest expense, net
(78
)
 
(74
)
Foreign exchange rate results
4

 
(6
)
Miscellaneous financing costs/income and other, net
(4
)
 
(3
)
Total other financial income/ (expense)
—

 
(9
)
Total - Financial income and expenses
(78
)
 
(83
)


Earnings per share

The computation of earnings per share (EPS) is presented in the following table:

 
For the three months ended
 
March 29,
2020

 
March 31,
2019

Net income (loss)
(13
)
 
(16
)
Less: net income (loss) attributable to non-controlling interests
8

 
5

Net income (loss) attributable to stockholders
(21
)
 
(21
)
 
 
 
 
Weighted average number of shares outstanding (after deduction of treasury shares) during the year (in thousands)
279,933

 
287,227

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)
279,933

 
287,227

 
 
 
 
EPS attributable to stockholders in $:
 
 
 
Basic net income (loss)
(0.08
)
 
(0.07
)
Diluted net income (loss)
(0.08
)
 
(0.07
)

1)    Stock options to purchase up to 1.1 million shares of NXP’s common stock that were outstanding in Q1 2020 (Q1 2019: 1.8 million shares) were anti-dilutive and were not included in the computation of diluted EPS because the exercise price was greater than the average fair market value of the common stock or the number of shares assumed to be repurchased using the proceeds of unrecognized compensation expense and exercise prices was greater than the weighted average number of shares underlying outstanding stock options.

2)    Unvested RSUs, PSUs and equity rights of 7.9 million shares that were outstanding in Q1 2020 (Q1 2019: 7.8 million shares) were anti-dilutive and were not included in the computation of diluted EPS because the number of shares assumed to be repurchased using the proceeds of unrecognized compensation expense was greater than the weighted average number of outstanding unvested RSUs, PSUs and equity rights or the performance goal has not been met yet.

3)    Warrants to purchase up to 7.6 million shares of NXP’s common stock at a price of $130.46 per share were outstanding in Q1 (Q1 2019: 11.3 million shares at a price of $132.19). Upon exercise, the warrants will be net share settled. At the end of both Q1 2020 and Q1 2019, the warrants were not included in the computation of diluted EPS because the warrants exercise price was greater than the average fair market value of the common shares.

Balance Sheet Information

Cash and cash equivalents

At March 29, 2020 and December 31, 2019, our cash balance was $1,079 million and $1,045 million, respectively, of which $201 million and $188 million was held by SSMC, our consolidated joint venture company with TSMC. Under the terms of our joint venture agreement with TSMC, a portion of this cash can be distributed by way of a dividend to us, but 38.8% of the dividend will be paid to our joint venture partner.
 
Inventories

The portion of finished goods stored at customer locations under consignment amounted to $49 million as of March 29, 2020 (December 31, 2019: $41 million).

Inventories are summarized as follows:
 
March 29,
2020

 
December 31,
2019

Raw materials
64

 
52

Work in process
920

 
894

Finished goods
243

 
246

 
1,227

 
1,192



The amounts recorded above are net of allowance for obsolescence of $118 million as of March 29, 2020 (December 31, 2019: $114 million).

Accumulated other comprehensive income (loss)

Total comprehensive income (loss) represents net income (loss) plus the results of certain equity changes not reflected in the condensed consolidated statements of operations. The after-tax components of accumulated other comprehensive income (loss) and their corresponding changes are shown below:

 
Currency 
translation
differences

 
Change in fair 
value
cash flow hedges

 
Net actuarial
gain/(losses)

 
Accumulated 
Other
Comprehensive
Income (loss)

As of December 31, 2019
203

 
2

 
(130
)
 
75

Other comprehensive income (loss) before
reclassifications
(49
)
 
(16
)
 
7

 
(58
)
Amounts reclassified out of accumulated other
comprehensive income (loss)
—

 
3

 
—

 
3

Tax effects
—

 
3

 
(9
)
 
(6
)
Other comprehensive income (loss)
(49
)
 
(10
)
 
(2
)
 
(61
)
As of March 29, 2020
154

 
(8
)
 
(132
)
 
14



Cash dividends

The following dividends were declared during the first quarter 2020 and 2019 under NXP’s quarterly dividend program:

 
First Quarter 2020
 
First Quarter 2019
 
Dividend per share
 
Amount
 
Dividend per share
 
Amount

First quarter
0.375
 
105
 
0.25
 
71



The dividend declared (not yet paid) is classified in the condensed consolidated balance sheet in other current liabilities as of March 29, 2020 and subsequently paid on April 6, 2020.