onsemi Reports Third Quarter 2024 Results

RECONCILIATION OF GAAP VERSUS NON-GAAP DISCLOSURES (Continued)
(in millions, except per share and percentage data)

			Quarters Ended									Nine Months Ended
			September 27, 2024			June 28, 2024			September 29, 2023			September 27, 2024			September 29, 2023
Reconciliation of GAAP to non-GAAP gross profit:
GAAP gross profit			$	799.4		$	784.0		$	1,030.7		$	2,437.0		$	2,941.6
	Special items:
	a)	Impact of business wind down		—			—			—			—			(3.9	)
	b)	Amortization of acquisition-related intangible assets		1.6			1.6			1.4			4.7			4.2
		Total special items		1.6			1.6			1.4			4.7			0.3
Non-GAAP gross profit			$	801.0		$	785.6		$	1,032.1		$	2,441.7		$	2,941.9
Reconciliation of GAAP to non-GAAP gross margin:
GAAP gross margin				45.4	%		45.2	%		47.3	%		45.5	%		47.2	%
	Special items:
	a)	Impact of business wind down		—	%		—	%		—	%		—	%		(0.1	)%
	b)	Amortization of acquisition-related intangible assets		0.1	%		0.1	%		0.1	%		0.1	%		0.1	%
		Total special items		0.1	%		0.1	%		0.1	%		0.1	%		—	%
Non-GAAP gross margin				45.5	%		45.3	%		47.3	%		45.6	%		47.2	%
Reconciliation of GAAP to non-GAAP operating expenses:
GAAP operating expenses			$	354.0		$	395.5		$	343.7		$	1,077.9		$	1,015.0
	Special items:
	a)	Amortization of acquisition-related intangible assets		(13.0	)		(12.9	)		(12.0	)		(38.5	)		(39.0	)
	b)	Restructuring, asset impairments and other, net		(29.1	)		(72.5	)		(9.4	)		(103.0	)		(63.5	)
	c)	Third party acquisition and divestiture-related costs		(7.4	)		(1.7	)		(0.1	)		(9.2	)		1.2
		Total special items		(49.5	)		(87.1	)		(21.5	)		(150.7	)		(101.3	)
Non-GAAP operating expenses			$	304.5		$	308.4		$	322.2		$	927.2		$	913.7
Reconciliation of GAAP to non-GAAP operating income:
GAAP operating income			$	445.4		$	388.5		$	687.0		$	1,359.1		$	1,926.6
	Special items:
	a)	Impact of business wind down		—			—			—			—			(3.9	)
	b)	Amortization of acquisition-related intangible assets		14.6			14.5			13.4			43.2			43.2
	c)	Restructuring, asset impairments and other, net		29.1			72.5			9.4			103.0			63.5
	d)	Third party acquisition and divestiture-related costs		7.4			1.7			0.1			9.2			(1.2	)
		Total special items		51.1			88.7			22.9			155.4			101.6
Non-GAAP operating income			$	496.5		$	477.2		$	709.9		$	1,514.5		$	2,028.2
*Reconciliation of GAAP to non-GAAP operating margin (operating income / revenue)* :**
GAAP operating margin				25.3	%		22.4	%		31.5	%		25.4	%		30.9	%
	Special items:
	a)	Impact of business wind down		—	%		—	%		—	%		—	%		(0.1	)%
	b)	Amortization of acquisition-related intangible assets		0.8	%		0.8	%		0.6	%		0.8	%		0.7	%
	c)	Restructuring, asset impairments and other, net		1.7	%		4.2	%		0.4	%		1.9	%		1.0	%
	d)	Third party acquisition and divestiture-related costs		0.4	%		0.1	%		—	%		0.2	%		—	%
		Total special items		2.9	%		5.1	%		1.1	%		2.9	%		1.6	%
Non-GAAP operating margin				28.2	%		27.5	%		32.6	%		28.3	%		32.5	%
Reconciliation of GAAP to non-GAAP income before income taxes:
GAAP income before income taxes			$	454.6		$	402.1		$	697.5		$	1,394.9		$	1,924.9
	Special items:
	a)	Impact of business wind down		—			—			—			—			(3.9	)
	b)	Amortization of acquisition-related intangible assets		14.6			14.5			13.4			43.2			43.2
	c)	Restructuring, asset impairments and other, net		29.1			72.5			9.4			103.0			63.5
	d)	Third party acquisition and divestiture-related costs		7.4			1.7			0.1			9.2			(1.2	)
	e)	Loss on debt prepayment		—			—			—			—			13.3
	f)	Loss on divestiture of business		—			—			0.1			—			0.7
		Total special items		51.1			88.7			23.0			155.4			115.6
Non-GAAP income before income taxes			$	505.7		$	490.8		$	720.5		$	1,550.3		$	2,040.5
Reconciliation of GAAP to non-GAAP net income attributable to ON Semiconductor Corporation:
GAAP net income attributable to ON Semiconductor Corporation			$	401.7		$	338.2		$	582.7		$	1,192.9		$	1,621.0
	Special items:
	a)	Impact of business wind down		—			—			—			—			(3.9	)
	b)	Amortization of acquisition-related intangible assets		14.6			14.5			13.4			43.2			43.2
	c)	Restructuring, asset impairments and other, net		29.1			72.5			9.4			103.0			63.5
	d)	Third party acquisition and divestiture-related costs		7.4			1.7			0.1			9.2			(1.2	)
	e)	Loss on debt prepayment		—			—			—			—			13.3
	f)	Loss on divestiture of a business		—			—			0.1			—			0.7
	g)	Income taxes		(29.0	)		(14.8	)		2.7			(47.9	)		(21.2	)
		Total special items		22.1			73.9			25.7			107.5			94.4
Non-GAAP net income attributable to ON Semiconductor Corporation			$	423.8		$	412.1		$	608.4		$	1,300.4		$	1,715.4

GAAP net income for diluted earnings per share			$	401.7		$	338.2		$	583.1		$	1,192.9		$	1,622.2
Non-GAAP net income for diluted earnings per share			$	423.8		$	412.1		$	608.8		$	1,300.4		$	1,716.6

Reconciliation of GAAP to non-GAAP diluted shares outstanding:
GAAP diluted shares outstanding				431.7			433.2			450.7			433.8			449.3
	Special items:
	a)	Less: dilutive shares attributable to convertible notes		(4.1	)		(3.7	)		(11.4	)		(4.2	)		(10.2	)
		Total special items		(4.1	)		(3.7	)		(11.4	)		(4.2	)		(10.2	)
Non-GAAP diluted shares outstanding				427.6			429.5			439.3			429.6			439.1
Non-GAAP diluted earnings per share:
Non-GAAP net income for diluted earnings per share			$	423.8		$	412.1		$	608.8		$	1,300.4		$	1,716.6
Non-GAAP diluted shares outstanding				427.6			429.5			439.3			429.6			439.1
Non-GAAP diluted earnings per share			$	0.99		$	0.96		$	1.39		$	3.03		$	3.91
Reconciliation of net cash provided by operating activities to free cash flow:
Net cash provided by operating activities			$	465.8		$	362.2		$	566.6		$	1,326.7		$	1,366.3
	Special items:
	a)	Purchase of property, plant and equipment		(172.2	)		(154.5	)		(433.0	)		(549.1	)		(1,185.1	)
		Total special items		(172.2	)		(154.5	)		(433.0	)		(549.1	)		(1,185.1	)
Free cash flow			$	293.6		$	207.7		$	133.6		$	777.6		$	181.2

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