Stockholders' Equity and Earnings per Share

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

Stockholders' Equity and Earnings per Share

Stockholders’ Equity and Earnings per Share

The share capital of the Company as of December 31, 2023 consists of 1,076,257,500 authorized shares, including 430,503,000 authorized shares of common stock, and 645,754,500 authorized but unissued shares of preferred stock.

For repurchases of shares in 2021 and 2022, the board of directors of NXP ("the Board") made use of the authorizations renewed by the annual general meeting of shareholders on June 17, 2019, May 27, 2020, May 26, 2021 and June 1, 2022, respectively. The Board has approved the purchase of shares from participants in NXP's equity programs to satisfy participants' tax withholding obligations and this authorization will remain in effect until terminated by the Board. In November 2019, the Board approved the repurchase of shares up to a maximum of $2 billion (the "2019 Share Repurchase Program"). In March 2021, the Board approved the repurchase of shares up to a maximum of $2 billion (the "2021 Share Repurchase Program"), and in August 2021, the Board increased the 2021 Share Repurchase Program authorization by $2 billion, for a total of $4 billion approved for the repurchase of shares under the 2021 Share Repurchase Program. In January 2022, the Board approved the repurchase of shares up to a maximum of $2 billion (the "2022 Share Repurchase Program").

During the fiscal year-ended December 31, 2023, NXP repurchased 5.5 million shares, for a total of approximately $1 billion, and during the year-ended December 31, 2022, NXP repurchased 8.3 million shares, for a total of approximately $1.4 billion. As approved by the board of directors, on December 15, 2020, NXP canceled some 26 million shares and on November 30, 2021, NXP canceled 15 million shares. As a result, the number of issued NXP shares as per December 31, 2022 is 274,519,638 shares and as per December 31, 2023, the Company has issued and paid up 274,519,638 shares of common stock each having a par value of €0.20 or a nominal stock capital of €55 million (2022: €55 million).

Cash dividends

The following dividends were declared in 2023, 2022 and 2021 under NXP’s quarterly dividend program which was introduced as of the third quarter of 2018:

	2023	2022	2021
Dividends declared (in millions)	1,048	885	606
Dividends declared (per share)	4.056	3.38	2.25

Share-based awards

The Company has granted share-based awards to the members of our board of directors, management team, our other executives, selected other key employees/talents of NXP and selected new hires to receive the Company’s shares in the future. See Note 17, “Share-based Compensation.”

Treasury shares

From time to time, last on May 24, 2023, the General Meeting of Shareholders authorizes the Board of Directors to repurchase shares of our common stock. On that basis, the Board of Directors has approved various share repurchase programs. In accordance with the Company’s policy to provide share-based awards from its treasury share inventory, shares which have been repurchased and are held in treasury for delivery upon exercise of options and under restricted and performance share programs, are accounted for as a reduction of stockholders’ equity. Treasury shares are recorded at cost, representing the market price on the acquisition date. When issued, shares are removed from treasury shares on a first-in, first-out (FIFO) basis.

Differences between the cost and the proceeds received when treasury shares are reissued, are recorded in capital in excess of par value. Deficiencies in excess of net gains arising from previous treasury share issuances are charged to retained earnings.

The following transactions took place resulting from employee option and share plans:

	2023	2022	2021
Total shares in treasury at beginning of year	15,056,232	9,569,359	9,044,952
Total cost	2,799	1,932	1,037
Shares acquired under repurchase program	5,460,135	8,330,021	20,628,901
Average price in $ per share	192.16	171.59	194.63
Total cost of repurchases	1,049	1,429	4,015
Shares delivered	3,186,782	2,843,148	5,104,494
Average price in $ per share	200.38	197.83	102.88
Amount received	71	59	62
Shares retired	—	—	15,000,000
Total shares in treasury at end of year	17,329,585	15,056,232	9,569,359
Total cost	3,210	2,799	1,932

Shareholder tax on repurchased shares

Under Dutch tax law, the repurchase of a company’s shares by an entity in the Netherlands is a taxable event (unless exemptions apply). The tax on the repurchased shares is attributed to the shareholders, with NXP making the payment on the shareholders’ behalf. As such, the tax on the repurchased shares is accounted for within stockholders’ equity.

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

	2023	2022	2021
Net income (loss)	2,822	2,833	1,906
Less: Net income (loss) attributable to non-controlling interests	25	46	35
Net income (loss) attributable to stockholders	2,797	2,787	1,871
Weighted average number of shares outstanding (after deduction of treasury shares) during the year (in thousands)	258,381	261,879	270,687
Plus incremental shares from assumed conversion of:
Options 1)	188	276	386
Restricted Share Units, Performance Share Units and Equity Rights 2)	2,801	1,898	4,573
Dilutive potential common share	2,989	2,174	4,959
Adjusted weighted average number of shares outstanding (after deduction of treasury shares) during the year (in thousands) 1)	261,370	264,053	275,646
EPS attributable to stockholders in $:
Basic net income (loss)	10.83	10.64	6.91
Diluted net income (loss)	10.70	10.55	6.79

1)No stock options to purchase shares of NXP’s common stock that were outstanding in 2023 (2022: none; 2021: none) 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)No unvested RSU’s, PSU’s and equity rights that were outstanding in 2023 (2022: 0.3 shares; 2021: 0.1 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 RSU’s, PSU’s and equity rights or the performance goal has not been met.