* Adjusted EBITDA represents net income before interest expense, interest income, provision for income taxes, depreciation and amortization expense and special items. We use the adjusted EBITDA measure for internal managerial evaluation purposes, as a means to evaluate period-to-period comparisons and as a performance metric for the vesting/releasing of certain of our performance-based equity awards. Adjusted EBITDA is a non-GAAP financial measure. Regulation G and other provisions of the securities laws regulate the use of financial measures that are not prepared in accordance with generally accepted accounting principles. We believe this measure provides important supplemental information to investors. However, we do not, and you should not, rely on non-GAAP financial measures alone as measures of our performance.

We believe that non-GAAP financial measures reflect an additional way of viewing aspects of our operations that – when taken together with GAAP results and the reconciliations to corresponding GAAP financial measures that we also provide in our press releases – provide a more complete understanding of factors and trends affecting our business. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with non-GAAP financial measures used by our company or other companies, even if they have similar names.

ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
ANALYSIS OF GAAP VERSUS NON-GAAP DISCLOSURES
(in millions, except per share and percentage data)
				Quarter Ended												Nine Months Ended
				September 26, 2014				June 27, 2014				September 27, 2013				September 26, 2014				September 27, 2013
Reconciliation of GAAP gross profit to non-GAAP gross profit:
GAAP gross profit				$	284.1			$	273.0			$	249.2			$	807.9			$	685.5
	Special items:
	a)	Actuarial (gains) losses on pension plans and other pension benefits		—				—				—				—				6.7
	b)	Expensing of appraised inventory at fair market value step up		12.9				1.3				—				14.2				—
		Total special items		12.9				1.3				—				14.2				6.7
Non-GAAP gross profit				$	297.0			$	274.3			$	249.2			$	822.1			$	692.2
Reconciliation of GAAP gross margin to non-GAAP gross margin:
GAAP gross margin				34.1		%		36.0		%		34.8		%		35.2		%		33.2		%
	Special items:
	a)	Actuarial (gains) losses on pension plans and other pension benefits		—		%		—		%		—		%		—		%		0.3		%
	b)	Expensing of appraised inventory at fair market value step up		1.5		%		0.2		%		—		%		0.6		%		—		%
		Total special items		1.5		%		0.2		%		—		%		0.6		%		0.3		%
Non-GAAP gross margin				35.6		%		36.2		%		34.8		%		35.8		%		33.5		%
Reconciliation of GAAP operating expenses to non-GAAP operating expenses:
GAAP operating expenses				$	226.5			$	191.3			$	181.9			595.3				529.6
	Special items:
	a)	Amortization of acquisition related intangible assets		(23.4		)		(10.4		)		(8.2		)		(42.0		)		(24.8		)
	b)	Actuarial gains (losses) on pension plans and other pension benefits		—				—				—				—				(6.9		)
	c)	Restructuring, asset impairments and other, net		(10.1		)		(4.1		)		(11.0		)		(20.0		)		(11.1		)
	d)	Third party acquisition related costs		(4.0		)		(3.7		)		—				(8.0		)		—
		Total special items		(37.5		)		(18.2		)		(19.2		)		(70.0		)		(42.8		)
Non-GAAP operating expenses				$	189.0			$	173.1			$	162.7			$	525.3			$	486.8
Reconciliation of GAAP operating income to non-GAAP operating income:
GAAP operating income				$	57.6			$	81.7			$	67.3			$	212.6			$	155.9
	Special items:
	a)	Actuarial (gains) losses on pension plans and other pension benefits (cost of revenues)		—				—				—				—				6.7
	b)	Expensing of appraised inventory at fair market value step up		12.9				1.3				—				14.2				—
	c)	Amortization of acquisition related intangible assets		23.4				10.4				8.2				42.0				24.8
	d)	Actuarial (gains) losses on pension plans and other pension benefits (operating expenses)		—				—				—				—				6.9
	e)	Restructuring, asset impairments and other, net		10.1				4.1				11.0				20.0				11.1
	f)	Third party acquisition related costs		4.0				3.7				—				8.0				—
		Total special items		50.4				19.5				19.2				84.2				49.5
Non-GAAP operating income				$	108.0			$	101.2			$	86.5			$	296.8			$	205.4
Reconciliation of GAAP operating margin to non-GAAP operating margin (operating income / revenues) :
GAAP operating margin				6.9		%		10.8		%		9.4		%		9.3		%		7.6		%
	Special items:
	a)	Actuarial (gains) losses on pension plans and other pension benefits (cost of revenues)		—		%		—		%		—		%		—		%		0.3		%
	b)	Expensing of appraised inventory at fair market value step up		1.5		%		0.2		%		—		%		0.6		%		—		%
	c)	Amortization of acquisition related intangible assets		2.8		%		1.4		%		1.1		%		1.8		%		1.2		%
	d)	Actuarial (gains) losses on pension plans and other pension benefits (operating expenses)		—		%		—		%		—		%		—		%		0.3		%
	e)	Restructuring, asset impairments and other, net		1.2		%		0.5		%		1.5		%		0.9		%		0.5		%
	f)	Third party acquisition related costs		0.5		%		0.5		%		—		%		0.3		%		—		%
		Total special items		6.0		%		2.6		%		2.7		%		3.7		%		2.4		%
Non-GAAP operating margin				13.0		%		13.4		%		12.1		%		12.9		%		9.9		%
Reconciliation of GAAP net income to non-GAAP net income:
GAAP net income attributable to ON Semiconductor Corporation				$	41.6			$	88.0			$	51.8			$	188.0			$	122.1
	Special items:
	a)	Actuarial (gains) losses on pension plans and other pension benefits (cost of revenues)		—				—				—				—				6.7
	b)	Expensing of appraised inventory at fair market value step up		12.9				1.3				—				14.2				—
	c)	Amortization of acquisition related intangible assets (operating expenses)		23.4				10.4				8.2				42.0				24.8
	d)	Actuarial (gains) losses on pension plans and other pension benefits (operating expenses)		—				—				—				—				6.9
	e)	Restructuring, asset impairments and other, net		10.1				4.1				11.0				20.0				11.1
	f)	Third party acquisition related costs		4.0				3.7				—				8.0				—
	g)	Loss on debt exchange		—				—				—				—				3.1
	h)	Non-cash interest on convertible notes		1.8				1.7				2.7				5.1				8.5
	i)	Adjustment to reflect cash taxes		(0.6		)		(19.5		)		1.7				(19.2		)		(5.9		)
		Total special items		51.6				1.7				23.6				70.1				55.2
Non-GAAP net income				$	93.2			$	89.7			$	75.4			$	258.1			$	177.3
Non-GAAP net income per share:
		Basic		$	0.21			$	0.20			$	0.17			$	0.59			$	0.39
		Diluted		$	0.21			$	0.20			$	0.17			$	0.58			$	0.39
Weighted average common shares outstanding:
		Basic		440.7				441.1				449.3				440.7				449.8
		Diluted		444.9				444.5				452.1				444.6				452.6

« Previous Page 1 | 2 | 3 | 4 | 5 | 6  Next Page »