Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 27, 2019 | Oct. 23, 2019 | |
Document And Entity Information [Abstract] | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Entity Incorporation, State or Country Code | DE | |
Document Transition Report | false | |
Document Quarterly Report | true | |
Entity Registrant Name | ON SEMICONDUCTOR CORP | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 27, 2019 | |
Entity File Number | 000-30419 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 410,722,135 | |
Entity Tax Identification Number | 36-3840979 | |
Entity Address, Address Line One | 5005 E. McDowell Road | |
Entity Address, City or Town | Phoenix | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 85008 | |
City Area Code | 602 | |
Local Phone Number | 244-6600 | |
Trading Symbol | ON | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Central Index Key | 0001097864 | |
Current Fiscal Year End | --12-31 | |
Document Fiscal Period | Q3 | |
Document Fiscal Year | 2019 | |
Amendment | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 27, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 928.7 | $ 1,069.6 |
Receivables, net | 716.6 | 686 |
Inventories | 1,240.7 | 1,225.2 |
Other current assets | 187 | 187 |
Total current assets | 3,073 | 3,167.8 |
Property, plant and equipment, net | 2,602.1 | 2,549.6 |
Goodwill | 1,659.2 | 932.5 |
Intangible assets, net | 622.6 | 566.4 |
Deferred tax assets | 291.5 | 266.2 |
Other assets | 273.9 | 105.1 |
Total assets | 8,522.3 | 7,587.6 |
Liabilities, Non-Controlling Interest and Stockholders’ Equity | ||
Accounts payable | 534.1 | 671.7 |
Accrued expenses and other current liabilities | 730.9 | 659.1 |
Current portion of long-term debt | 736.6 | 138.5 |
Total current liabilities | 2,001.6 | 1,469.3 |
Long-term debt | 2,878.8 | 2,627.6 |
Deferred tax liabilities | 59.8 | 54.8 |
Other long-term liabilities | 342.5 | 241.8 |
Total liabilities | 5,282.7 | 4,393.5 |
Commitments and contingencies (Note 11) | ||
ON Semiconductor Corporation stockholders’ equity: | ||
Common stock ($0.01 par value, 1,250,000,000 shares authorized, 564,323,095 and 558,701,620 issued, 410,171,176 and 413,834,227 outstanding, respectively) | 5.6 | 5.6 |
Additional paid-in capital | 3,779.1 | 3,702.3 |
Accumulated other comprehensive loss | (55.6) | (37.9) |
Accumulated earnings | 1,134.8 | 979.6 |
Less: Treasury stock, at cost: 154,151,919 and 144,867,393 shares, respectively | (1,648.6) | (1,478) |
Total ON Semiconductor Corporation stockholders’ equity | 3,215.3 | 3,171.6 |
Non-controlling interest | 24.3 | 22.5 |
Total stockholders' equity | 3,239.6 | 3,194.1 |
Total liabilities and stockholders' equity | $ 8,522.3 | $ 7,587.6 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,250,000,000 | 1,250,000,000 |
Common stock, shares issued (in shares) | 564,323,095 | 558,701,620 |
Common stock, shares outstanding (in shares) | 410,171,176 | 413,834,227 |
Treasury stock, shares (in shares) | 154,151,919 | 144,867,393 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 27, 2019 | Sep. 28, 2018 | |
Income Statement [Abstract] | ||||
Revenue | $ 1,381.8 | $ 1,541.7 | $ 4,116.1 | $ 4,375.2 |
Cost of revenue (exclusive of amortization shown below) | 906.6 | 945.1 | 2,628.2 | 2,706.2 |
Gross profit | 475.2 | 596.6 | 1,487.9 | 1,669 |
Operating expenses: | ||||
Research and development | 172.8 | 166.2 | 471.6 | 488.5 |
Selling and marketing | 74.7 | 83.1 | 225.4 | 242.6 |
General and administrative | 67.8 | 73.3 | 214.8 | 218.8 |
Litigation settlement (Note 11) | 169.5 | 0 | 169.5 | 0 |
Amortization of acquisition-related intangible assets | 29.9 | 28 | 83.1 | 83.3 |
Restructuring, asset impairments and other, net | 4.4 | 4.4 | 28.1 | 8 |
Goodwill and intangible asset impairment | 0 | 0 | 1.6 | 3.3 |
Total operating expenses | 519.1 | 355 | 1,194.1 | 1,044.5 |
Operating income (loss) | (43.9) | 241.6 | 293.8 | 624.5 |
Other income (expense), net: | ||||
Interest expense | (40.7) | (31.2) | (106.1) | (95.3) |
Interest income | 2.3 | 1.3 | 7.8 | 3.3 |
Loss on debt refinancing and prepayment | (5.8) | (0.6) | (6.2) | (4.6) |
Gain on divestiture of business | 0 | 0.4 | 0 | 5 |
Licensing income | 0 | 1 | 0 | 32.9 |
Other income (expense) | 3.5 | 3.5 | 4.6 | 0.5 |
Other income (expense), net | (40.7) | (25.6) | (99.9) | (58.2) |
Income (loss) before income taxes | (84.6) | 216 | 193.9 | 566.3 |
Income tax (provision) benefit | 24.6 | (48.9) | (36.9) | (102.4) |
Net income (loss) | (60) | 167.1 | 157 | 463.9 |
Less: Net income attributable to non-controlling interest | (0.7) | (0.2) | (1.8) | (2.1) |
Net income (loss) attributable to ON Semiconductor Corporation | (60.7) | 166.9 | 155.2 | 461.8 |
Comprehensive income (loss), net of tax: | ||||
Net income (loss) | (60) | 167.1 | 157 | 463.9 |
Foreign currency translation adjustments | (0.1) | (0.7) | 0.5 | 0.2 |
Effects of cash flow hedges | (2.1) | 0.1 | (18.2) | 4.9 |
Other comprehensive income (loss), net of tax | (2.2) | (0.6) | (17.7) | 5.1 |
Comprehensive income (loss) | (62.2) | 166.5 | 139.3 | 469 |
Comprehensive income attributable to non-controlling interest | (0.7) | (0.2) | (1.8) | (2.1) |
Comprehensive income (loss) attributable to ON Semiconductor Corporation | $ (62.9) | $ 166.3 | $ 137.5 | $ 466.9 |
Net income (loss) per common share attributable to ON Semiconductor Corporation: | ||||
Basic (in dollars per share) | $ (0.15) | $ 0.39 | $ 0.38 | $ 1.08 |
Diluted (in dollars per share) | $ (0.15) | $ 0.38 | $ 0.37 | $ 1.05 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 410.4 | 425.5 | 411 | 426.1 |
Diluted (in shares) | 410.4 | 435.3 | 415.3 | 441.2 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated (Deficit) Earnings | Treasury Stock | Non-Controlling Interest in Consolidated Subsidiary |
Balance, beginning (in shares) at Dec. 31, 2017 | 551,873,115 | (126,754,921) | |||||
Balance, beginning at Dec. 31, 2017 | $ 2,801 | $ 5.5 | $ 3,593.5 | $ (40.6) | $ 351.5 | $ (1,131.1) | $ 22.2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock option exercises (in shares) | 630,281 | ||||||
Stock option exercises | 4.4 | 4.4 | |||||
Shares issued pursuant to the ESPP (in shares) | 710,137 | ||||||
Shares issued pursuant to the ESPP | 13 | 13 | |||||
RSUs and stock grant awards issued (in shares) | 3,930,708 | ||||||
RSUs and stock grant awards issued | 0.1 | $ 0.1 | |||||
Shares withheld for employee taxes on RSUs (in shares) | (1,207,441) | ||||||
Shares withheld for employee taxes on RSUs | (29.2) | $ (29.2) | |||||
Share-based compensation expense | 59.4 | 59.4 | |||||
Repurchase of common stock (in shares) | (5,297,014) | ||||||
Repurchase of common stock | (115) | $ (115) | |||||
Comprehensive (loss) income | 469 | 5.1 | 461.8 | 2.1 | |||
Balance, ending (in shares) at Sep. 28, 2018 | 557,144,241 | (133,259,376) | |||||
Balance, ending at Sep. 28, 2018 | 3,203.4 | $ 5.6 | 3,670.3 | (35.5) | 814 | $ (1,275.3) | 24.3 |
Balance, beginning (in shares) at Jun. 29, 2018 | 555,619,904 | (129,259,916) | |||||
Balance, beginning at Jun. 29, 2018 | 3,096.8 | $ 5.6 | 3,646.1 | (34.9) | 646.9 | $ (1,191) | 24.1 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock option exercises (in shares) | 15,605 | ||||||
Stock option exercises | 0.1 | 0.1 | |||||
Shares issued pursuant to the ESPP (in shares) | 326,090 | ||||||
Shares issued pursuant to the ESPP | 6.2 | 6.2 | |||||
RSUs and stock grant awards issued (in shares) | 1,182,642 | ||||||
RSUs and stock grant awards issued | 0 | $ 0 | |||||
Shares withheld for employee taxes on RSUs (in shares) | (415,576) | ||||||
Shares withheld for employee taxes on RSUs | (9.3) | $ (9.3) | |||||
Share-based compensation expense | 17.9 | 17.9 | |||||
Repurchase of common stock (in shares) | (3,583,884) | ||||||
Repurchase of common stock | (75) | $ (75) | |||||
Other | 0.2 | 0.2 | |||||
Comprehensive (loss) income | 166.5 | (0.6) | 166.9 | 0.2 | |||
Balance, ending (in shares) at Sep. 28, 2018 | 557,144,241 | (133,259,376) | |||||
Balance, ending at Sep. 28, 2018 | 3,203.4 | $ 5.6 | 3,670.3 | (35.5) | 814 | $ (1,275.3) | 24.3 |
Balance, beginning (in shares) at Dec. 31, 2018 | 558,701,620 | (144,867,393) | |||||
Balance, beginning at Dec. 31, 2018 | 3,194.1 | $ 5.6 | 3,702.3 | (37.9) | 979.6 | $ (1,478) | 22.5 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock option exercises (in shares) | 208,097 | ||||||
Stock option exercises | 1.3 | 1.3 | |||||
Shares issued pursuant to the ESPP (in shares) | 898,399 | ||||||
Shares issued pursuant to the ESPP | 13.8 | 13.8 | |||||
RSUs and stock grant awards issued (in shares) | 4,514,979 | ||||||
RSUs and stock grant awards issued | 0 | ||||||
Shares withheld for employee taxes on RSUs (in shares) | (1,522,519) | ||||||
Shares withheld for employee taxes on RSUs | (31.6) | $ (31.6) | |||||
Share-based compensation expense | 61.7 | 61.7 | |||||
Repurchase of common stock (in shares) | (7,762,007) | ||||||
Repurchase of common stock | (139) | $ (139) | |||||
Comprehensive (loss) income | 139.3 | (17.7) | 155.2 | 1.8 | |||
Balance, ending (in shares) at Sep. 27, 2019 | 564,323,095 | (154,151,919) | |||||
Balance, ending at Sep. 27, 2019 | 3,239.6 | $ 5.6 | 3,779.1 | (55.6) | 1,134.8 | $ (1,648.6) | 24.3 |
Balance, beginning (in shares) at Jun. 28, 2019 | 563,192,019 | (153,141,121) | |||||
Balance, beginning at Jun. 28, 2019 | 3,297.9 | $ 5.6 | 3,757.6 | (53.4) | 1,195.5 | $ (1,631) | 23.6 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock option exercises (in shares) | 50,900 | ||||||
Stock option exercises | 0.4 | 0.4 | |||||
Shares issued pursuant to the ESPP (in shares) | 370,910 | ||||||
Shares issued pursuant to the ESPP | 6.4 | 6.4 | |||||
RSUs and stock grant awards issued (in shares) | 709,266 | ||||||
RSUs and stock grant awards issued | 0 | ||||||
Shares withheld for employee taxes on RSUs (in shares) | (246,870) | ||||||
Shares withheld for employee taxes on RSUs | (4.4) | $ (4.4) | |||||
Share-based compensation expense | 14.7 | 14.7 | |||||
Repurchase of common stock (in shares) | (763,928) | ||||||
Repurchase of common stock | (13.2) | $ (13.2) | |||||
Comprehensive (loss) income | (62.2) | (2.2) | (60.7) | 0.7 | |||
Balance, ending (in shares) at Sep. 27, 2019 | 564,323,095 | (154,151,919) | |||||
Balance, ending at Sep. 27, 2019 | $ 3,239.6 | $ 5.6 | $ 3,779.1 | $ (55.6) | $ 1,134.8 | $ (1,648.6) | $ 24.3 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 27, 2019 | Sep. 28, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 157 | $ 463.9 |
Adjustments to reconcile net income to net cash provided by operating activities and other adjustments: | ||
Depreciation and amortization | 431.1 | 372.5 |
Loss on sale or disposal of fixed assets | 0.5 | 3.6 |
Gain on divestiture of business | 0 | (5) |
Loss on debt refinancing and prepayment | 6.2 | 4.6 |
Amortization of debt discount and issuance costs | 9.9 | 9.8 |
Payments for term debt modification | 0 | (1.1) |
Share-based compensation expense | 61.7 | 59.4 |
Non-cash interest on convertible notes | 27.9 | 26.6 |
Non-cash asset impairment charges | 2.9 | 4.6 |
Goodwill and intangible asset impairment charges | 1.6 | 3.3 |
Change in deferred tax balances | 10.8 | 79.9 |
Other | (1.5) | (5.8) |
Changes in assets and liabilities (exclusive of the impact of acquisition and divestiture): | ||
Receivables | (6.3) | (67.7) |
Inventories | 26.4 | (105.1) |
Other assets | (29.5) | (25.3) |
Accounts payable | (78) | 19.3 |
Accrued expenses and other current liabilities | (5.7) | 28.2 |
Other long-term liabilities | (12) | (12.5) |
Net cash provided by operating activities | 603 | 853.2 |
Cash flows from investing activities: | ||
Purchase of property, plant and equipment | (422.2) | (382.8) |
Proceeds from sales of property, plant and equipment | 1.5 | 6.3 |
Deposits made for purchase of property, plant and equipment | (0.2) | (5.6) |
Purchase of business, net of cash acquired | (888) | (70.9) |
Purchase of license and deposit made for manufacturing facility | (100) | 0 |
Proceeds from divestiture of business and release of escrow | 5 | 7.3 |
Proceeds from repayment of note receivable | 0 | 10.2 |
Equity method investment | 0 | (19.8) |
Net cash used in investing activities | (1,403.9) | (455.3) |
Cash flows from financing activities: | ||
Proceeds for the issuance of common stock under the ESPP | 19.6 | 18.7 |
Proceeds from exercise of stock options | 1.3 | 4.4 |
Payment of tax withholding for RSUs | (31.6) | (29.2) |
Repurchase of common stock | (139) | (115) |
Borrowings under debt agreements | 1,404.8 | 8.2 |
Payment of debt issuance and other financing costs | (21.9) | 0 |
Repayment of long-term debt | (580.1) | (279.9) |
Release of escrow related to prior acquisition | (10.4) | 0 |
Payment of finance lease obligations | (0.6) | (3.3) |
Net cash provided by (used in) financing activities | 642.1 | (396.1) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0.4 | 0.1 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (158.4) | 1.9 |
Cash, cash equivalents and restricted cash, beginning of period | 1,087.1 | 966.6 |
Cash, cash equivalents and restricted cash, end of period | $ 928.7 | $ 968.5 |
Supplemental Disclosures - (Not
Supplemental Disclosures - (Notes) | 9 Months Ended |
Sep. 27, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosures | Note 16: Supplemental Disclosures Supplemental Disclosure of Cash Flow Information Certain of the Company's cash and non-cash activities are as follows (in millions): Nine Months Ended September 27, 2019 September 28, 2018 Non-cash financing activity: Liability incurred for purchase of business $ 17.9 $ — Non-cash activities: Capital expenditures in accounts payable and other liabilities $ 146.7 $ 204.5 Right-of-use assets obtained in exchange of lease liabilities (1) 15.0 Cash (received) paid for: Interest income $ (7.8) $ (3.3) Interest expense 61.9 56.2 Income taxes 46.2 45.0 Operating lease payments in operating cash flows (1) 28.0 (1) These disclosures are not applicable for the nine months ended September 28, 2018 due to the method of adoption of the New Leasing Standard, which is applicable for periods after December 31, 2018. The following is a reconciliation of the captions in the Consolidated Balance Sheets to the Consolidated Statements of Cash Flows (in millions): As of September 27, 2019 December 31, 2018 September 28, 2018 December 31, 2017 Consolidated Balance Sheets: Cash and cash equivalents $ 928.7 $ 1,069.6 $ 951.0 $ 949.2 Restricted cash (included in other current assets) — 17.5 17.5 17.4 Cash, cash equivalents and restricted cash in Consolidated Statements of Cash Flows $ 928.7 $ 1,087.1 $ 968.5 $ 966.6 The restricted cash balance, which included the consideration held in escrow for the acquisition of Aptina in 2014, was released during the quarter ended September 27, 2019 upon satisfaction of certain outstanding items contained in the merger agreement for such acquisition. |
Supplemental Disclosures - (Tab
Supplemental Disclosures - (Tables) | 9 Months Ended |
Sep. 27, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Non-Cash Financing Activities And Cash Payments | Certain of the Company's cash and non-cash activities are as follows (in millions): Nine Months Ended September 27, 2019 September 28, 2018 Non-cash financing activity: Liability incurred for purchase of business $ 17.9 $ — Non-cash activities: Capital expenditures in accounts payable and other liabilities $ 146.7 $ 204.5 Right-of-use assets obtained in exchange of lease liabilities (1) 15.0 Cash (received) paid for: Interest income $ (7.8) $ (3.3) Interest expense 61.9 56.2 Income taxes 46.2 45.0 Operating lease payments in operating cash flows (1) 28.0 (1) These disclosures are not applicable for the nine months ended September 28, 2018 due to the method of adoption of the New Leasing Standard, which is applicable for periods after December 31, 2018. |
Summary of Restrictions on Cash and Cash Equivalents | The following is a reconciliation of the captions in the Consolidated Balance Sheets to the Consolidated Statements of Cash Flows (in millions): As of September 27, 2019 December 31, 2018 September 28, 2018 December 31, 2017 Consolidated Balance Sheets: Cash and cash equivalents $ 928.7 $ 1,069.6 $ 951.0 $ 949.2 Restricted cash (included in other current assets) — 17.5 17.5 17.4 Cash, cash equivalents and restricted cash in Consolidated Statements of Cash Flows $ 928.7 $ 1,087.1 $ 968.5 $ 966.6 |
Supplemental Disclosures - Non-
Supplemental Disclosures - Non-Cash Financing Activities And Cash Payments (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 27, 2019 | Sep. 28, 2018 | |
Non-cash financing activities | ||
Liability incurred for purchase of business | $ 17.9 | $ 0 |
Non-cash activities | ||
Capital expenditures in accounts payable and other liabilities | 146.7 | 204.5 |
Right-of-use assets obtained in exchange of lease liabilities | 15 | |
Cash (received) paid for: | ||
Interest income | (7.8) | (3.3) |
Interest expense | 61.9 | 56.2 |
Income taxes | 46.2 | $ 45 |
Operating lease payments in operating cash flows | $ 28 |
Supplemental Disclosures - Summ
Supplemental Disclosures - Summary of Restrictions on Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Sep. 27, 2019 | Dec. 31, 2018 | Sep. 28, 2018 | Dec. 31, 2017 |
Supplemental Cash Flow Elements [Abstract] | ||||
Cash and cash equivalents | $ 928.7 | $ 1,069.6 | $ 951 | $ 949.2 |
Restricted Cash and Cash Equivalents | 0 | 17.5 | 17.5 | 17.4 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Total | $ 928.7 | $ 1,087.1 | $ 968.5 | $ 966.6 |
Background and Basis of Present
Background and Basis of Presentation (Notes) | 9 Months Ended |
Sep. 27, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | Note 1: Background and Basis of Presentation ON Semiconductor Corporation, together with its wholly and majority-owned subsidiaries ("ON Semiconductor," "we," “us,” “our,” or the "Company"), uses a thirteen-week fiscal quarter accounting period for the first three fiscal quarters of each year, with the third quarter of 2019 having ended on September 27, 2019 and each fiscal year ending on December 31. The quarters ended September 27, 2019 and September 28, 2018 each contained 91 days. The nine months ended September 27, 2019 and September 28, 2018 contained 270 and 271 days, respectively. As of September 27, 2019, the Company was organized into the following three operating and reporting segments: the Power Solutions Group ("PSG"), the Analog Solutions Group ("ASG") and the Intelligent Sensing Group ("ISG"). Additional details on the Company’s operating and reporting segments are included in Note 2: ''Revenue and Segment Information.'' The accompanying unaudited financial statements as of and for the quarter and nine months ended September 27, 2019 have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for unaudited interim financial information. Accordingly, the unaudited financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. The balance sheet as of December 31, 2018 was derived from the Company's audited financial statements but does not include all disclosures required by GAAP for audited financial statements. In the opinion of the Company's management, the interim information includes all adjustments, which includes normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The footnote disclosures related to the interim financial information included herein are also unaudited. Such financial information should be read in conjunction with the consolidated financial statements and related notes thereto for the year ended December 31, 2018 included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, which was filed with the SEC on February 20, 2019 (the “2018 Form 10-K”). Financial results for interim periods are not necessarily indicative of the results of operations that may be expected for a full fiscal year. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Management evaluates these estimates and judgments on an ongoing basis and bases its estimates on experience, current and expected future conditions, third-party evaluations and various other assumptions that management believes are reasonable under the circumstances. Significant estimates have been used by management in conjunction with the following: (i) future payouts for customer incentives and amounts subject to allowances, returns and warranties; (ii) measurement of valuation allowances relating to inventories; (iii) fair values of share-based compensation; (iv) assumptions used in business combinations; and (v) measurement of valuation allowances against deferred tax assets and evaluations of unrecognized tax benefits. Additionally, during periods where it becomes applicable, significant estimates will be used by management in determining the future cash flows used to assess and test for impairment of goodwill, indefinite-lived intangible assets and long-lived assets. Actual results may differ from the estimates and assumptions used in the consolidated financial statements and related notes. |
Revenue and Segment Information
Revenue and Segment Information (Notes) | 9 Months Ended |
Sep. 27, 2019 | |
Segment Reporting [Abstract] | |
Revenue and Segment Information | Note 2: Revenue and Segment Information The Company is organized into three operating and reporting segments consisting of PSG, ASG and ISG. Because many products are sold into different end-markets, the total revenue reported for a segment is not indicative of actual sales in the end-market associated with that segment, but rather is the sum of the revenue from the product lines assigned to that segment. These segments represent the Company’s view of the business and as such are used to evaluate progress of major initiatives and allocation of resources. Revenue and gross profit for the Company’s operating and reporting segments were as follows (in millions): PSG ASG ISG Total For the quarter ended September 27, 2019: Revenue from external customers $ 687.9 $ 508.9 $ 185.0 $ 1,381.8 Gross profit $ 226.7 $ 207.7 $ 67.6 $ 502.0 For the quarter ended September 28, 2018: Revenue from external customers $ 810.2 $ 531.7 $ 199.8 $ 1,541.7 Gross profit $ 297.9 $ 224.3 $ 80.7 $ 602.9 For the nine months ended September 27, 2019: Revenue from external customers $ 2,093.0 $ 1,465.0 $ 558.1 $ 4,116.1 Gross profit $ 731.4 $ 592.5 $ 208.4 $ 1,532.3 For the nine months ended September 28, 2018: Revenue from external customers $ 2,251.0 $ 1,541.1 $ 583.1 $ 4,375.2 Gross profit $ 804.2 $ 650.4 $ 245.0 $ 1,699.6 Gross profit is exclusive of the amortization of acquisition-related intangible assets. Depreciation expense is included in segment gross profit. Reconciliations of segment gross profit to consolidated gross profit are as follows (in millions): Quarters Ended Nine Months Ended September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018 Gross profit for reporting segments $ 502.0 $ 602.9 $ 1,532.3 $ 1,699.6 Less: Unallocated manufacturing costs (26.8) (6.3) (44.4) (30.6) Consolidated gross profit $ 475.2 $ 596.6 $ 1,487.9 $ 1,669.0 Revenue for the Company's operating and reporting segments disaggregated into geographic locations and sales channels were as follows (in millions): Quarter Ended September 27, 2019 PSG ASG ISG Total Geographic Location Singapore $ 207.7 $ 195.7 $ 43.4 $ 446.8 Hong Kong 216.2 105.8 34.9 356.9 United Kingdom 111.4 77.3 34.3 223.0 United States 92.2 73.4 27.7 193.3 Other 60.4 56.7 44.7 161.8 Total $ 687.9 $ 508.9 $ 185.0 $ 1,381.8 Sales Channel Distributors $ 430.6 $ 248.8 $ 113.7 $ 793.1 OEM/ODM 206.9 228.2 61.5 496.6 Electronic Manufacturing Service Providers 50.4 31.9 9.8 92.1 Total $ 687.9 $ 508.9 $ 185.0 $ 1,381.8 Nine Months Ended September 27, 2019 PSG ASG ISG Total Geographic Location Singapore $ 646.0 $ 479.2 $ 126.7 $ 1,251.9 Hong Kong 623.0 326.1 94.2 1,043.3 United Kingdom 355.2 233.2 110.9 699.3 United States 280.7 259.0 90.7 630.4 Other 188.1 167.5 135.6 491.2 Total $ 2,093.0 $ 1,465.0 $ 558.1 $ 4,116.1 Sales Channel Distributors $ 1,287.8 $ 713.7 $ 336.8 $ 2,338.3 OEM/ODM 666.4 647.0 191.7 1,505.1 Electronic Manufacturing Service Providers 138.8 104.3 29.6 272.7 Total $ 2,093.0 $ 1,465.0 $ 558.1 $ 4,116.1 Quarter Ended September 28, 2018 PSG ASG ISG Total Geographic Location Singapore $ 332.8 $ 191.7 $ 48.6 $ 573.1 Hong Kong 201.9 124.1 35.0 361.0 United Kingdom 124.9 81.9 34.8 241.6 United States 102.3 87.8 31.5 221.6 Other 48.3 46.2 49.9 144.4 Total $ 810.2 $ 531.7 $ 199.8 $ 1,541.7 Sales Channel Distributors $ 565.1 $ 280.4 $ 122.2 $ 967.7 OEM/ODM 198.6 213.1 65.1 476.8 Electronic Manufacturing Service Providers 46.5 38.2 12.5 97.2 Total $ 810.2 $ 531.7 $ 199.8 $ 1,541.7 Nine Months Ended September 28, 2018 PSG ASG ISG Total Geographic Location Singapore $ 805.3 $ 510.7 $ 123.8 $ 1,439.8 Hong Kong 636.5 379.7 110.6 1,126.8 United Kingdom 368.0 243.4 106.2 717.6 United States 295.0 251.9 91.4 638.3 Other 146.2 155.4 151.1 452.7 Total $ 2,251.0 $ 1,541.1 $ 583.1 $ 4,375.2 Sales Channel Distributors $ 1,499.7 $ 792.0 $ 352.4 $ 2,644.1 OEM/ODM 616.5 640.7 198.6 1,455.8 Electronic Manufacturing Service Providers 134.8 108.4 32.1 275.3 Total $ 2,251.0 $ 1,541.1 $ 583.1 $ 4,375.2 The Company operates in various geographic locations. Sales to unaffiliated customers have little correlation with the location of manufacturers. It is, therefore, not meaningful to present operating profit by geographical location. The Company’s consolidated assets are not specifically ascribed to its individual reporting segments. Rather, assets used in operations are generally shared across the Company’s operating and reporting segments. Property, plant and equipment, net by geographic location, is summarized as follows (in millions): As of September 27, 2019 December 31, 2018 United States $ 608.3 $ 616.9 Korea 460.7 383.1 Philippines 443.6 474.5 China 244.1 248.4 Czech Republic 231.3 194.5 Japan 220.7 205.0 Malaysia 212.6 229.1 Other 180.8 198.1 Total $ 2,602.1 $ 2,549.6 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 27, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note 3: Recent Accounting Pronouncements ASU Adopted: ASU No. 2016-02 - Leases (Topic 842) (“ASU 2016-02”), ASU No. 2018-10 - Codification improvements to Topic 842, Leases (“ASU 2018-10”), ASU No. 2018-11 - Leases (Topic 842) (“ASU 2018-11”) (collectively, the “New Leasing Standard”) In February 2016, the FASB issued ASU 2016-02, which amended the accounting treatment for leases. ASU 2016 -02 requires that a lessee should recognize on its balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. Lessees must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. In July 2018, the FASB issued ASU 2018-10 and ASU 2018-11. ASU 2018-10 provides certain areas for improvement in ASU 2016-02 and ASU 2018-11 provides an additional optional transition method by allowing entities to initially apply the New Leasing Standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption (the "effective date method"). The New Leasing Standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted the New Leasing Standard as of January 1, 2019 using the effective date method by recording right-of-use assets of $112.3 million, net of deferred rent liabilities of $5.1 million that were reclassified to right-of-use assets, and lease liabilities of $117.4 million. Under this method, periods prior to 2019 remain unchanged. The Company applied the practical expedients relating to the leases that commenced before January 1, 2019 whereby the Company elected to not reassess the following: (i) whether any expired or existing contracts contain leases; (ii) the lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases. See Note 7: ''Balance Sheet Information'' for further information and disclosures relating to the New Leasing Standard. |
Acquisitions - (Notes)
Acquisitions - (Notes) | 9 Months Ended |
Sep. 27, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Note 4: Acquisitions Acquisition of Quantenna On June 19, 2019, the Company acquired 100% of the outstanding shares of Quantenna Communications, Inc. ("Quantenna"), a global leader and innovator of high performance Wi-Fi solutions, whereby Quantenna became a wholly-owned subsidiary of the Company. The acquisition of Quantenna creates a strong platform for addressing connectivity solutions for industrial IoT by combining the Company's expertise in power management and bluetooth technologies with Quantenna's Wi-Fi technologies and software capabilities. Following the acquisition, Quantenna changed its name to ON Semiconductor Connectivity Solutions, Inc. The purchase price consideration for the acquisition totaled $1,039.3 million, of which $21.0 million and $1,000.4 million were paid in cash during the quarters ended September 27, 2019 and June 28, 2019, respectively. The remaining amount of $17.9 million will be paid in multiple installments through 2023. The acquisition was funded by a combination of a draw of $900.0 million against the Revolving Credit Facility and cash on hand. See Note 8: ''Long-Term Debt'' for further information on the Revolving Credit Facility. From the closing date of the Quantenna acquisition through September 27, 2019, the Company recognized approximately $44.7 million in revenue and $51.3 million in net loss relating to Quantenna, which included the amortization of fair market value step-up of inventory and intangible assets and restructuring charges. During the third quarter of 2019, the Company recorded certain measurement period adjustments to the initial estimated purchase price allocation. These adjustments were made based on information obtained during the measurement period and are properly reflected in the Company’s consolidated balance sheet as of September 27, 2019. These adjustments would not have resulted in a material impact to the results of operations during the quarter ended June 28, 2019 as Quantenna was in the Company’s combined results for only ten days. The following table presents the updated provisional allocation of the purchase price of Quantenna for the assets acquired and liabilities assumed based on their relative fair values (in millions): Initial Estimate Measurement Period Adjustments Updated Allocation Cash and cash equivalents $ 133.4 $ — $ 133.4 Receivables 21.2 1.0 22.2 Inventories 45.0 (3.2) 41.8 Other current assets 4.3 — 4.3 Property, plant and equipment 16.3 0.6 16.9 Goodwill 620.0 106.7 726.7 Intangible assets (excluding IPRD) 180.9 (93.8) 87.1 IPRD 55.5 (31.7) 23.8 Deferred tax assets 3.3 25.9 29.2 Other non-current assets 10.5 2.2 12.7 Total assets acquired 1,090.4 7.7 1,098.1 Accounts payable 22.6 — 22.6 Other current liabilities 16.8 0.7 17.5 Deferred tax liabilities 3.9 (0.6) 3.3 Other non-current liabilities 7.8 7.6 15.4 Total liabilities assumed 51.1 7.7 58.8 Net assets acquired/purchase price $ 1,039.3 $ — $ 1,039.3 Acquired intangible assets of $110.9 million include developed technology of $58.3 million (which are estimated to have an useful life of ten years). The total weighted average amortization period for the acquired intangibles is ten years. IPRD assets are amortized over the estimated useful life of the assets upon successful completion of the related projects. The value assigned to IPRD was determined by estimating the net cash flows from the projects when completed and discounting the net cash flows to their present value using a discount rate of approximately 12%. The cash flows from IPRD’s significant products are expected to commence from 2021 onwards. The acquisition produced $726.7 million of goodwill, which has been assigned to a reporting unit within ASG. The goodwill is attributable to a combination of Quantenna's assembled workforce, expectations regarding a more meaningful engagement by the customers due to the scale of the combined company and other product and operating synergies. Goodwill arising from the Quantenna acquisition is not deductible for tax purposes. The updated purchase price allocation is subject to change as the Company finalizes its determination relating to the valuation of assets and liabilities and finalizes key assumptions, approaches and judgments with respect to intangible assets acquired from Quantenna and the related tax effects. Accordingly, future adjustments may impact the updated amount of goodwill and other allocated amounts represented in the table above. Pro-Forma Results of Operations The following unaudited pro-forma consolidated results of operation for the quarters and nine months ended September 27, 2019 and September 28, 2018 have been prepared as if the acquisition of Quantenna had occurred on January 1, 2018 and includes adjustments for amortization of intangibles, interest expense from financing, restructuring, and the effect of purchase accounting adjustments including the step-up of inventory (in millions): Quarters Ended Nine Months Ended September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018 Revenue $ 1,381.8 $ 1,601.0 $ 4,211.4 $ 4,533.1 Net income (loss) (43.1) 160.1 160.9 407.8 Net income (loss) attributable to ON Semiconductor Corporation (43.8) 159.9 159.1 405.7 Net income (loss) per common share attributable to ON Semiconductor Corporation: Basic $ (0.11) $ 0.38 $ 0.39 $ 0.95 Diluted $ (0.11) $ 0.37 $ 0.38 $ 0.92 Pending Acquisition of Manufacturing Facility and Related Assets On April 22, 2019, through SCI LLC, the Company entered into an Asset Purchase Agreement (the "Asset Purchase Agreement") with GLOBALFOUNDRIES U.S. Inc. (“GFUS”) and GLOBALFOUNDRIES Inc. pursuant to which the Company will acquire GFUS’s East Fishkill, New York site and fabrication facilities, including a post-fabrication facility, support buildings and related assets (the “Transferred Assets”), and assume certain liabilities, including those relating to Company's ownership and operation of the Transferred Assets (collectively, the “Asset Purchase”). The closing of the Asset Purchase is expected to occur on or around December 31, 2022, subject to the satisfaction or waiver of the conditions to closing as specified in the Asset Purchase Agreement. The aggregate purchase price for the Asset Purchase is $400.0 million in cash, subject to adjustment as described in the Asset Purchase Agreement, of which a non-refundable deposit of $70.0 million, subject to downward adjustment, was paid by SCI LLC to GFUS in cash on April 22, 2019. The remaining $330.0 million will be paid on or around the closing date of the Asset Purchase. In connection with the Asset Purchase Agreement, the parties entered into certain ancillary agreements (the "Ancillary Agreements") pursuant to which SCI LLC will be provided with technology transfer and development services as well as foundry services prior to the closing date, and GFUS will be provided foundry services for a limited period of time following the closing date. Pursuant to the Ancillary Agreements, on April 22, 2019, SCI LLC paid GFUS a license fee in the amount of $30.0 million in cash, subject to upward adjustment, for certain technology. This amount has been recorded as an intangible asset in our Consolidated Balance Sheet as of September 27, 2019 and will be amortized when the revenue from the sale of products under the Ancillary Agreement commences. The Company incurred approximately $4.0 million of expenses in connection with these transactions and expects to incur an additional $5.0 million in legal fees, advisory fees and other third party costs on or around the closing date. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets - (Notes) | 9 Months Ended |
Sep. 27, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 5: Goodwill and Intangible Assets Goodwill The following table summarizes goodwill by operating and reporting segments (in millions): As of September 27, 2019 December 31, 2018 Goodwill Accumulated Impairment Losses Carrying Value Goodwill Accumulated Impairment Losses Carrying Value Operating and Reporting Segments: PSG $ 432.2 $ (31.9) $ 400.3 $ 432.2 $ (31.9) $ 400.3 ASG 1,563.4 (418.9) 1,144.5 836.7 (418.9) 417.8 ISG 114.4 — 114.4 114.4 — 114.4 $ 2,110.0 $ (450.8) $ 1,659.2 $ 1,383.3 $ (450.8) $ 932.5 The following table summarizes the change in goodwill from December 31, 2018 through September 27, 2019 (in millions): Net balance as of December 31, 2018 $ 932.5 Addition due to business combination 726.7 Net balance as of September 27, 2019 $ 1,659.2 Goodwill is tested for impairment annually on the first day of the fourth quarter or more frequently if events or changes in circumstances (each, a "triggering event") would more likely than not reduce the carrying value of goodwill below its fair value. Management did not identify any triggering events during the quarter ended September 27, 2019 that would require an interim impairment analysis. Intangible Assets Intangible assets, net, were as follows (in millions): As of September 27, 2019 Original Accumulated Accumulated Impairment Losses Carrying Customer relationships $ 585.2 $ (379.2) $ (20.1) $ 185.9 Developed technology 760.8 (416.6) (2.6) 341.6 IPRD 83.4 — (24.1) 59.3 Licenses 30.0 — — 30.0 Other intangibles 82.6 (61.6) (15.2) 5.8 Total intangible assets $ 1,542.0 $ (857.4) $ (62.0) $ 622.6 As of December 31, 2018 Original Accumulated Accumulated Impairment Losses Carrying Customer relationships $ 556.7 $ (359.1) $ (20.1) $ 177.5 Developed technology 698.0 (356.4) (2.6) 339.0 IPRD 64.1 — (22.5) 41.6 Other intangibles 82.3 (58.8) (15.2) 8.3 Total intangible assets $ 1,401.1 $ (774.3) $ (60.4) $ 566.4 During the quarter ended September 27, 2019, there were no impairment losses on capitalized IPRD projects. During the nine months ended September 27, 2019, the Company abandoned two previously capitalized IPRD projects under ISG and recorded aggregate impairment losses for such projects in the amount of $1.6 million. Amortization expense for acquisition-related intangible assets amounted to $29.9 million and $83.1 million for the quarter and nine months ended September 27, 2019, respectively, and $28.0 million and $83.3 million for the quarter and nine months ended September 28, 2018, respectively. Amortization expense for intangible assets, with the exception of the $59.3 million of IPRD assets that will be amortized once the corresponding projects have been completed, is expected to be as follows for the remainder of 2019, each of the next four years and thereafter (in millions): Period Amortization Expense Remainder of 2019 $ 31.6 2020 111.9 2021 93.0 2022 77.9 2023 61.9 Thereafter 187.0 Total $ 563.3 |
Restructuring, Asset Impairment
Restructuring, Asset Impairments and Other, Net - (Notes) | 9 Months Ended |
Sep. 27, 2019 | |
Restructuring Charges [Abstract] | |
Restructuring, Asset Impairments and Other, Net | Note 6: Restructuring, Asset Impairments and Other, Net Summarized activity included in the “Restructuring, asset impairments and other, net” caption on the Company's Consolidated Statement of Operations and Comprehensive Income is as follows (in millions): Restructuring Asset Impairments Other Total Quarter ended September 27, 2019 General workforce reduction $ 0.6 $ — $ — $ 0.6 Post-Quantenna acquisition restructuring 1.8 — — 1.8 Other 0.8 — 1.2 2.0 Total $ 3.2 $ — $ 1.2 $ 4.4 Restructuring Asset Impairments (1) Other Total Nine months ended September 27, 2019 General workforce reduction $ 8.4 $ — $ — $ 8.4 Post-Quantenna acquisition restructuring 15.6 — — 15.6 Other 0.8 2.9 0.4 4.1 Total $ 24.8 $ 2.9 $ 0.4 $ 28.1 (1) Includes, among others, charges for the impairment of right-of-use assets of $2.5 million. Changes in accrued restructuring charges from December 31, 2018 to September 27, 2019 are summarized as follows (in millions): As of As of December 31, 2018 Charges Usage September 27, 2019 Estimated employee separation charges $ 0.3 $ 24.8 $ (22.6) $ 2.5 Other 0.2 — (0.1) 0.1 Total $ 0.5 $ 24.8 $ (22.7) $ 2.6 General workforce reduction During the first quarter of 2019, the Company approved and began to implement certain restructuring actions aimed at cost savings, primarily through workforce reductions. As of September 27, 2019, the Company had notified approximately 143 employees of their employment termination, 139 of whom had exited by September 27, 2019. During the quarter and nine months ended September 27, 2019, the expense for this program amounted to $0.6 million and $8.4 million, respectively, of which $0.3 million remained accrued as of September 27, 2019. As of September 27, 2019, no further expenses were expected to be incurred for this program. Post-Quantenna acquisition restructuring Following the acquisition of Quantenna and during the quarter ended June 28, 2019, the Company implemented a cost-reduction plan resulting in the elimination of approximately eight executive positions from Quantenna’s workforce, primarily as a result of redundancies. During the quarter ended September 27, 2019, the Company terminated an additional nine employees. The total restructuring expense of $15.6 million was attributable to the accelerated vesting of stock awards previously issued by Quantenna, executive retention and other severance benefits. As of September 27, 2019, $1.1 million of this restructuring expense remained accrued, and such amount will be paid during the fourth quarter of 2019. The Company will continue to evaluate positions for redundancies and may incur additional charges in the future. |
Balance Sheet Information - (No
Balance Sheet Information - (Notes) | 9 Months Ended |
Sep. 27, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Information | Note 7: Balance Sheet Information Certain significant amounts included in the Company's Consolidated Balance Sheet consist of the following (in millions): As of September 27, 2019 December 31, 2018 Inventories: Raw materials $ 145.0 $ 137.3 Work in process 782.4 760.7 Finished goods 313.3 327.2 $ 1,240.7 $ 1,225.2 Defined Benefit Plans The Company maintains defined benefit plans for certain of its foreign subsidiaries. The Company recognizes the aggregate amount of all overfunded plans as assets and the aggregate amount of all underfunded plans as liabilities in its financial statements. As of September 27, 2019, the total accrued pension liability for underfunded plans was $116.0 million, of which the current portion of $0.3 million was classified as accrued expenses and other current liabilities. As of December 31, 2018, the total accrued pension liability for underfunded plans was $115.9 million, of which the current portion of $0.2 million was classified as accrued expenses and other current liabilities. The components of the Company's net periodic pension expense are as follows (in millions): Quarters Ended Nine Months Ended September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018 Service cost $ 2.4 $ 2.4 $ 7.1 $ 7.3 Interest cost 1.3 1.2 3.8 3.6 Expected return on plan assets (1.5) (1.5) (4.5) (4.6) Total net periodic pension cost $ 2.2 $ 2.1 $ 6.4 $ 6.3 Leases The Company determines if an arrangement is a lease at its inception. Operating lease arrangements are comprised primarily of real estate and equipment agreements for which the right-of-use assets are included in other assets and the corresponding lease liabilities, depending on their maturity, are included in accrued expenses and other current liabilities or other long-term liabilities in the Consolidated Balance Sheet. There are certain immaterial finance leases recorded in the Consolidated Balance Sheet. The Company has elected to account for the lease and non-lease components as a single lease component. Right-of-use assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate in determining the present value of lease payments considering the term of the lease, which is derived from information available at the lease commencement date, giving consideration to publicly available data for instruments with similar characteristics. The Company's existing leases do not contain significant restrictive provisions; however, certain leases contain renewal options and provisions for payment of real estate taxes, insurance and maintenance costs by the Company. The lease term includes options to extend the lease when it is reasonably certain that that the option will be exercised. Leases with a term of 12 months or less are not recorded on the Consolidated Balance Sheet. The lease agreements do not contain any residual value guarantees. The components of lease expense are as follows (in millions): Quarter Ended Nine Months Ended September 27, 2019 September 27, 2019 Operating lease $ 9.2 $ 25.8 Variable lease 1.0 3.1 Short-term lease 0.6 1.9 Total lease expense $ 10.8 $ 30.8 The lease liabilities recognized in the Consolidated Balance Sheet are as follows (in millions): As of September 27, 2019 Accrued expenses and other current liabilities $ 27.6 Other long-term liabilities 91.0 $ 118.6 Operating lease assets of $115.6 million are included in other assets in the Consolidated Balance Sheet as of September 27, 2019. As of September 27, 2019, the weighted-average remaining lease-term was 6.4 years and the weighted-average discount rate was 5.4%. As of September 27, 2019, there are additional operating lease commitments of approximately $2.3 million that have not yet commenced. The reconciliation of the maturities of the operating leases to the lease liabilities recorded in the Consolidated Balance Sheet as of September 27, 2019 are as follows (in millions): Remainder of 2019 $ 7.9 2020 31.3 2021 24.7 2022 20.4 2023 14.7 Thereafter 50.2 Total lease payments (1) $ 149.2 Less: Interest (30.6) Amounts recorded in the Consolidated Balance Sheet $ 118.6 The following represents future minimum lease obligations under non-cancelable operating leases as of December 31, 2018 (in millions): 2019 $ 36.8 2020 27.6 2021 21.9 2022 16.8 2023 12.3 Thereafter 45.4 Total (1) $ 160.8 (1) Excludes $12.3 million of expected sublease income. |
Long-Term Debt - (Notes)
Long-Term Debt - (Notes) | 9 Months Ended |
Sep. 27, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 8: Long-Term Debt The Company's long-term debt consists of the following (annualized interest rates, in millions): As of September 27, 2019 December 31, 2018 Amended Credit Agreement: Revolving Credit Facility due 2024, interest payable monthly at 3.54% and 3.77%, respectively $ 800.0 $ 400.0 Term Loan “B” Facility due 2026, interest payable monthly at 4.04% and 4.27%, respectively 1,635.0 1,134.5 1.00% Notes due 2020 (1) 690.0 690.0 1.625% Notes due 2023 (2) 575.0 575.0 Other long-term debt (3) 64.6 139.5 Gross long-term debt, including current maturities $ 3,764.6 $ 2,939.0 Less: Debt discount (4) (113.1) (139.4) Less: Debt issuance costs (5) (36.1) (33.5) Net long-term debt, including current maturities $ 3,615.4 $ 2,766.1 Less: Current maturities (736.6) (138.5) Net long-term debt $ 2,878.8 $ 2,627.6 _______________________ (1) Interest is payable on June 1 and December 1 of each year at 1.00% annually. (2) Interest is payable on April 15 and October 15 of each year at 1.625% annually. (3) Consists of U.S. real estate mortgages, term loans, revolving lines of credit and other facilities at certain international locations where interest is payable weekly, monthly or quarterly, with interest rates ranging between 1.00% and 4.00% and maturity dates between 2019 and 2020. (4) Debt discount of $26.0 million and $41.6 million for the 1.00% Notes, $76.3 million and $88.5 million for the 1.625% Notes and $10.8 million and $9.3 million for the Term Loan "B" Facility, in each case as of September 27, 2019 and December 31, 2018, respectively. (5) Debt issuance costs of $3.6 million and $5.8 million for the 1.00% Notes, $7.3 million and $8.5 million for the 1.625% Notes and $25.2 million and $19.2 million for the Term Loan "B" Facility, in each case as of September 27, 2019 and December 31, 2018, respectively. Amendments to the Amended Credit Agreement On September 19, 2019, the Company entered into the Seventh Amendment to the Amended Credit Agreement (the “Seventh Amendment”). The Seventh Amendment provided for, among other things, modifications to the Amended Credit Agreement to (i) increase the amount that may be borrowed pursuant to the Term Loan “B” Facility by approximately $500.5 million, up to an aggregate principal amount of $1.635 billion; (ii) extend the maturity date of borrowings under the Term Loan “B” Facility to September 19, 2026; (iii) for any interest period ending after the date of the Seventh Amendment, increase the interest rate for borrowings under the Term Loan “B” Facility to (a) with respect to eurocurrency loans, a base rate per annum equal to the Adjusted LIBO Rate (as defined in the Amended Credit Agreement) plus an applicable margin of 2.00% and (b) with respect to alternate base rate loans, a base rate per annum equal to the Alternate Base Rate (as defined in the Amended Credit Agreement) plus an applicable margin equal to 1.00%; and (iv) make certain amendments providing for the determination of an alternate interest rate to the Adjusted LIBO Rate and/or the LIBO Rate (as defined in the Amended Credit Agreement) in the event of certain circumstances that result in the inability to adequately and reasonably determine such rates or such rates no longer adequately and fairly reflecting the cost of the applicable loans. In addition, pursuant to the Fifth Amendment (defined below), as a result of the extension described in (ii) above, the maturity date of borrowings under the Revolving Credit Facility was extended to June 12, 2024. The Company utilized the additional borrowings pursuant to the Seventh Amendment to repay $500.0 million of the outstanding balance under the Revolving Credit Facility. In connection with the Seventh Amendment, the Company incurred fees to lenders, third parties, legal and other costs amounting to $17.5 million, of which a significant portion was capitalized. Management performed an analysis and recorded a loss on debt refinancing amounting to $5.8 million related to the Seventh Amendment, which included a proportionate write-off of the unamortized debt discount and issuance costs represented by the exited lenders, and the third party fees incurred for the transaction. The remaining costs will be amortized over the term of the loan using the effective interest method. On August 15, 2019, the Company entered into the Sixth Amendment to the Amended Credit Agreement (the “Sixth Amendment”), which increased amounts that may be borrowed under the Revolving Credit Facility by $70.0 million to $1.97 billion. The Company did not incur significant costs in connection with the Sixth Amendment. On June 12, 2019, the Company entered into the Fifth Amendment to the Amended Credit Agreement (the “Fifth Amendment”), with the subsidiary guarantors party thereto, Deutsche Bank AG New York Branch, as administrative agent, collateral agent and issuing lender, the “2019 Incremental Revolving Lenders” party thereto, and the “New Required Lenders” party thereto. The Fifth Amendment provided for, among other things, modifications to the Amended Credit Agreement to: (i) increase the amount that may be borrowed pursuant to the Revolving Credit Facility to $1.9 billion; (ii) extend the maturity date of borrowings under the Revolving Credit Facility to the later of (x) December 30, 2022 or (y) June 12, 2024 so long as the borrowings under the Term Loan “B” Facility have been fully repaid or otherwise redeemed, discharged or defeased on or prior to December 30, 2022, or if the maturity date of borrowings under the Term Loan “B” Facility has been extended prior to December 30, 2022, to a date no earlier than June 12, 2024; and (iii) amend certain financial covenants, including deleting the minimum Interest Coverage Ratio and increasing the maximum Consolidated Total Net Leverage Ratio (as such terms are defined in the Amended Credit Agreement) from 4.00 to 1.00 to 4.50 to 1.00 during any period of four consecutive fiscal quarters commencing after a Permitted Acquisition (as defined in the Amended Credit Agreement) with consideration in excess of $250.0 million. The Company incurred third party, legal and other fees of $6.6 million and recorded $0.4 million as loss on extinguishment of debt related to the Fifth Amendment. The remaining unamortized debt issuance costs along with the additional costs incurred for the Fifth Amendment will be amortized straight-line over the term of the Revolving Credit Facility. 1.00% Notes due 2020 On June 8, 2015, the Company completed a private placement of $690.0 million of its 1.00% Notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The 1.00% Notes are governed by an indenture between the Company, as the issuer, the guarantors named therein and Wells Fargo Bank, National Association, as trustee (the “1.00% Indenture”). The 1.00% Notes are convertible by holders into cash and shares of the Company’s common stock at a conversion rate of 54.0643 shares of common stock per $1,000 principal amount of notes (subject to adjustment in certain events), which is equivalent to an initial conversion price of $18.50 per share of common stock. Pursuant to the 1.00% Indenture, among other conditions for conversion, the holders may submit their 1.00% Notes for conversion on or after September 1, 2020. Accordingly, the Company has reclassified the outstanding balance of the 1.00% Notes, net of discount and issuance costs, of $660.4 million, as a current portion of long-term debt. The Company will settle conversion of all 1.00% Notes validly tendered for conversion in cash, shares of the Company’s common stock or a combination of cash and shares to be determined by the Company. Expected maturities relating to the Company’s gross long-term debt (including current maturities) as of September 27, 2019 are as follows (in millions): Period Expected Maturities Remainder of 2019 $ 14.5 2020 760.4 2021 16.4 2022 16.4 2023 591.4 Thereafter 2,365.5 Total $ 3,764.6 The Company was in compliance with its covenants under all debt agreements as of September 27, 2019. |
Earnings Per Share and Equity -
Earnings Per Share and Equity - (Notes) | 9 Months Ended |
Sep. 27, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share and Equity | Note 9: Earnings Per Share and Equity Earnings Per Share Calculations of net income (loss) per common share attributable to ON Semiconductor Corporation are as follows (in millions, except per share data): Quarters Ended Nine Months Ended September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018 Net income (loss) attributable to ON Semiconductor Corporation $ (60.7) $ 166.9 $ 155.2 $ 461.8 Basic weighted-average common shares outstanding 410.4 425.5 411.0 426.1 Dilutive effect of share-based awards — 3.9 1.7 4.7 Dilutive effect of convertible notes — 5.9 2.6 10.4 Diluted weighted-average common shares outstanding 410.4 435.3 415.3 441.2 Net income (loss) per common share attributable to ON Semiconductor Corporation: Basic $ (0.15) $ 0.39 $ 0.38 $ 1.08 Diluted $ (0.15) $ 0.38 $ 0.37 $ 1.05 Basic income (loss) per common share is computed by dividing net income (loss) attributable to the Company by the weighted average number of common shares outstanding during the period. To calculate the diluted weighted-average common shares outstanding, the number of incremental shares from the assumed exercise of stock options and assumed issuance of shares relating to RSUs is calculated by applying the treasury stock method. Share-based awards whose impact is considered to be anti-dilutive under the treasury stock method were excluded from the diluted net income per share calculation. The excluded number of anti-dilutive share-based awards was 2.1 million and 0.1 million for the quarters ended September 27, 2019 and September 28, 2018, respectively, and 2.1 million and 0.2 million for the nine months ended September 27, 2019 and September 28, 2018, respectively. The increase in the anti-dilutive share-based awards for the quarter and nine months ended September 27, 2019 was due to the net loss for the quarter ended September 27, 2019, as the inclusion would have the effect of decreasing the net loss per common share attributable to the Company. The dilutive impact related to the 1.00% Notes and 1.625% Notes is determined in accordance with the net share settlement requirements, under which the Company's convertible notes are assumed to be convertible into cash up to the par value, with the excess of par value being convertible into common stock. During the quarter ended September 27, 2019, although the average share price exceeded the conversion price for the 1.00% Notes, the impact of the excess over par value was excluded in calculating the dilutive effect of the convertible notes as the impact would be anti-dilutive due to the net loss for the quarter ended September 27, 2019. Equity Share Repurchase Program Under the Company's share repurchase program announced on November 15, 2018 (the “Share Repurchase Program”), the Company may repurchase up to $1.5 billion (exclusive of fees, commissions and other expenses) of the Company’s common stock over a period of four years from December 1, 2018, subject to certain contingencies. The Share Repurchase Program expires on December 31, 2022. There were $13.1 million and $138.9 million in repurchases of the Company's common stock under the Share Repurchase Program during the quarter and nine months ended September 27, 2019, respectively. As of September 27, 2019, the authorized amount remaining under the Share Repurchase Program was $1,361.1 million. Also, under a previous share repurchase program, there were $75.0 million and $115.0 million in repurchases during the quarter and nine months ended September 28, 2018, respectively. Information relating to the Share Repurchase Program during the quarter and nine months ended September 27, 2019 is as follows (in millions, except per share data): Quarter Ended Nine Months Ended September 27, 2019 September 27, 2019 Number of repurchased shares (1) 0.8 7.8 Aggregate purchase price $ 13.1 $ 138.9 Fees, commissions and other expenses 0.1 0.1 Total cash used for share repurchases $ 13.2 $ 139.0 Weighted-average purchase price per share (2) $ 17.18 $ 17.89 (1) None of these shares had been reissued or retired as of September 27, 2019, but may be reissued or retired by the Company at a later date. (2) Exclusive of fees, commissions and other expenses. Shares for Restricted Stock Units Tax Withholding Shares with a fair market value equal to the applicable amount of the employee withholding taxes due are withheld by the Company upon the vesting of RSUs to pay the applicable amount of employee withholding taxes and are considered common stock repurchases. The Company then pays the applicable amount of withholding taxes in cash. The amount remitted in the quarter and nine months ended September 27, 2019 was $4.4 million and $31.6 million, respectively, for which the Company withheld approximately 0.2 million and 1.5 million shares of common stock, respectively, that were underlying the RSUs that vested. The amount remitted in the quarter and nine months ended September 28, 2018 was $9.3 million and $29.2 million, respectively, for which the Company withheld approximately 0.4 million and 1.2 million shares of common stock, respectively, that were underlying the RSUs that vested. Treasury stock is recorded at cost and is presented as a reduction of stockholders' equity in the accompanying consolidated financial statements. None of these shares had been reissued or retired as of September 27, 2019, but may be reissued or retired by the Company at a later date. These repurchases in connection with tax withholding upon vesting were not made under the Share Repurchase Program, and the amounts spent in connection with such deemed repurchases did not reduce the authorized amount remaining under the Share Repurchase Program. Non-Controlling Interest The Company owns 80% of the outstanding equity interests in a joint venture, Leshan-Phoenix Semiconductor Company Limited (“Leshan”), which operates assembly and test operations in Leshan, China. The results of Leshan have been consolidated in the Company's financial statements. As of December 31, 2018, the non-controlling interest balance was $22.5 million. This balance increased to $24.3 million as of September 27, 2019, resulting from the non-controlling interest’s $1.8 million share of the earnings for the nine months ended September 27, 2019. |
Share-Based Compensation - (Not
Share-Based Compensation - (Notes) | 9 Months Ended |
Sep. 27, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Note 10: Share-Based Compensation Total share-based compensation expense related to the Company's stock options, RSUs, stock grant awards and the ESPP were recorded within the Consolidated Statements of Operations and Comprehensive Income as follows (in millions): Quarters Ended Nine Months Ended September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018 Cost of revenue $ 2.3 $ 1.7 $ 7.7 $ 5.1 Research and development 3.4 3.4 12.4 10.6 Selling and marketing 2.7 3.3 11.1 10.5 General and administrative 6.3 9.5 30.5 33.2 Share-based compensation expense $ 14.7 $ 17.9 $ 61.7 $ 59.4 Related income tax benefits at federal rate of 21% (3.1) (3.8) (13.0) (12.5) Share-based compensation expense, net of taxes $ 11.6 $ 14.1 $ 48.7 $ 46.9 At September 27, 2019, total unrecognized share-based compensation expense, net of estimated forfeitures, related to non-vested RSUs with time-based service conditions, market-based and performance-based vesting criteria was $77.6 million, which is expected to be recognized over a weighted-average period of 1.4 years. The total intrinsic value of stock options exercised during the quarter and nine months ended September 27, 2019 was $0.7 million and $3.1 million, respectively. The Company received cash of $0.4 million and $1.3 million, respectively, during the quarter and nine months ended September 27, 2019 from the exercise of stock options. Upon option exercise, vesting of RSUs, stock grant awards or completion of a purchase under the ESPP, the Company issues new shares of common stock. Share-based compensation expense is based on awards that are ultimately expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The annualized pre-vesting forfeiture rate for RSUs was estimated to be 5% during the quarters and nine months ended September 27, 2019 and September 28, 2018. Shares Available As of September 27, 2019 and December 31, 2018, there was an aggregate of 26.4 million and 33.7 million shares of common stock, respectively, available for grant under the Amended and Restated SIP. As of September 27, 2019 and December 31, 2018, there was an aggregate of 5.6 million and 6.5 million shares of common stock, respectively, available for issuance under the ESPP. Restricted Stock Units RSUs generally vest ratably over three years for service-based equity awards and over two years for performance-based equity awards and market-based equity awards, or a combination thereof, and are settled in shares of the Company's common stock upon vesting. A summary of the RSU transactions for the nine months ended September 27, 2019 is as follows (in millions, except per share data): Number of Shares Weighted-Average Grant Date Fair Value Per Share Non-vested RSUs at December 31, 2018 8.6 $ 16.59 Granted 4.7 21.69 Achieved 0.2 24.46 Released (4.4) 14.28 Forfeited (0.4) 19.61 Non-vested RSUs at September 27, 2019 8.7 20.56 |
Commitments and Contingencies -
Commitments and Contingencies - (Notes) | 9 Months Ended |
Sep. 27, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11: Commitments and Contingencies Environmental Contingencies The Company’s headquarters in Phoenix, Arizona are located on property that is a “Superfund” site, which is a property listed on the National Priorities List and subject to clean-up activities under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”). Motorola and Freescale (acquired by NXP Semiconductors N.V.) have been involved in the clean-up activities of on-site solvent contaminated soil and groundwater and off-site contaminated groundwater pursuant to consent decrees with the State of Arizona. As part of the Company’s separation from Motorola in 1999, Motorola retained responsibility for this contamination, and Motorola and Freescale have agreed to indemnify the Company with respect to remediation costs and other costs or liabilities related to this matter. Any costs to the Company in connection with this matter have not been, and, based on the information available, are not expected to be, material. The Company’s former front-end manufacturing location in Aizu, Japan is located on property where soil and ground water contamination was detected. The Company believes that the contamination originally occurred during a time when the facility was operated by a prior owner. The Company worked with local authorities to implement a remediation plan and has completed remaining remediation. The majority of the cost of remediation was covered by insurance. Any costs to the Company in connection with this matter have not been, and, based on the information available, are not expected to be, material. The Company’s manufacturing facility in the Czech Republic has undergone remediation to respond to releases of hazardous substances that occurred during the years that this facility was operated by government-owned entities. The remediation projects consisted primarily of monitoring groundwater wells located on-site and off-site with additional action plans developed to respond in the event certain levels of contamination are exceeded. The government of the Czech Republic has agreed to indemnify the Company and its respective subsidiaries, subject to specified limitations, for remediation costs associated with this historical contamination. The Company has completed remediation on this project and, accordingly, has ceased all related monitoring efforts. Any costs to the Company in connection with this matter have not been, and, based on the information available, are not expected to be, material. The Company’s design center in East Greenwich, Rhode Island is located on property that has localized soil contamination. In connection with the purchase of the facility, the Company entered into a Settlement Agreement and Covenant Not to Sue with the State of Rhode Island. This agreement requires that remedial actions be undertaken and a quarterly groundwater monitoring program be initiated by the former owners of the property. Any costs to the Company in connection with this matter have not been, and, based on the information available, are not expected to be, material. As a result of the acquisition of AMIS in 2008, the Company is a “primary responsible party” to an environmental remediation and clean-up plan at AMIS’s former corporate headquarters in Santa Clara, California. Costs incurred by AMIS include implementation of the clean-up plan, operations and maintenance of remediation systems, and other project management costs. However, AMIS’s former parent company, a subsidiary of Nippon Mining, contractually agreed to indemnify AMIS and the Company for any obligations relating to environmental remediation and clean-up activities at this location. Any costs to the Company in connection with this matter have not been, and, based on the information available, are not expected to be, material. Through its acquisition of Fairchild, the Company acquired a facility in South Portland, Maine. This facility has ongoing environmental remediation projects to respond to certain releases of hazardous substances that occurred prior to the leveraged recapitalization of Fairchild from its former parent company, National Semiconductor Corporation, which is now owned by Texas Instruments Incorporated. Although the Company may incur certain liabilities with respect to these remediation projects, pursuant to a 1997 asset purchase agreement entered into in connection with the Fairchild recapitalization, National Semiconductor Corporation agreed to indemnify Fairchild, without limitation and for an indefinite period of time, for all future costs related to these projects. Under a 1999 asset purchase agreement pursuant to which Fairchild purchased the power device business of Samsung, Samsung agreed to indemnify Fairchild in an amount up to $150.0 million for remediation costs and other liabilities related to historical contamination at Samsung’s Bucheon, South Korea operations. Any costs to the Company in connection with this matter have not been, and, based on the information available, are not expected to be, material. Under a 2001 asset purchase agreement pursuant to which Fairchild purchased a manufacturing facility in Mountain Top, Pennsylvania, Intersil Corp. (subsequently acquired by Renesas Electronics Corporation) agreed to indemnify Fairchild for remediation costs and other liabilities related to historical contamination at the facility. Any costs to the Company incurred to respond to the above conditions and projects have not been, and are not expected to be, material and any future payments the Company makes in connection with such liabilities are not expected to be material. The Company was notified by the Environmental Protection Agency (“EPA”) that it has been identified as a “potentially responsible party” (“PRP”) under CERCLA in the Chemetco Superfund matter. Chemetco, a defunct reclamation services supplier that operated in Hartford, Illinois, which is now a Superfund site, has performed reclamation services for the Company in the past. The EPA is pursuing Chemetco customers for contribution to the site clean-up activities. The Company has joined a PRP group, which is cooperating with the EPA in the evaluation and funding of the clean-up activities. Any costs to the Company in connection with this matter have not been, and, based on the information available, are not expected to be, material. Financing Contingencies In the ordinary course of business, the Company provides standby letters of credit or other guarantee instruments to certain parties initiated by either the Company or its subsidiaries, as required for transactions, including, but not limited to, material purchase commitments, agreements to mitigate collection risk, leases, utilities or customs guarantees. As of September 27, 2019, the Revolving Credit Facility included $15.0 million of availability for the issuance of letters of credit. As of September 27, 2019, there were letters of credit in the amount of $1.0 million outstanding under the Revolving Credit Facility, which reduces the Company's borrowing capacity. As of September 27, 2019, the Company also had outstanding guarantees and letters of credit outside of its Revolving Credit Facility totaling $11.5 million. As part of obtaining financing in the ordinary course of business, the Company issued guarantees related to certain of its subsidiaries' finance lease obligations, equipment financing, lines of credit and real estate mortgages, which totaled $12.2 million as of September 27, 2019. Based on historical experience and information currently available, the Company believes that it will not be required to make payments under the standby letters of credit or guarantee arrangements for the foreseeable future. Indemnification Contingencies The Company is a party to a variety of agreements entered into in the ordinary course of business pursuant to which it may be obligated to indemnify the other parties for certain liabilities that arise out of or relate to the subject matter of the agreements. Some of the agreements entered into by the Company require it to indemnify the other party against losses due to IP infringement, property damage (including environmental contamination), personal injury, failure to comply with applicable laws, the Company’s negligence or willful misconduct or breach of representations and warranties and covenants related to such matters as title to sold assets. The Company faces risk of exposure to warranty and product liability claims in the event that its products fail to perform as expected or such failure of its products results, or is alleged to result, in economic damage, bodily injury or property damage. In addition, if any of the Company’s designed products are alleged to be defective, the Company may be required to participate in their recall. Depending on the significance of any particular customer and other relevant factors, the Company may agree to provide more favorable rights to such customer for valid defective product claims. The Company and its subsidiaries provide for indemnification of directors, officers and other persons in accordance with limited liability company operating agreements, certificates of incorporation, by-laws, articles of association or similar organizational documents, as the case may be. Section 145 of the Delaware General Corporation Law (“DGCL”) authorizes a court to award, or a corporation’s board of directors to grant, indemnity to directors and officers under certain circumstances and subject to certain limitations. The terms of Section 145 of the DGCL are sufficiently broad to permit indemnification under certain circumstances for liabilities, including reimbursement of expenses incurred, arising under the Exchange Act. As permitted by the DGCL, the Company’s Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), contains provisions relating to the limitation of liability and indemnification of directors and officers. The Certificate of Incorporation eliminates the personal liability of each of the Company’s directors to the fullest extent permitted by Section 102(b)(7) of the DGCL, as it may be amended or supplemented, and provides that the Company will indemnify its directors and officers to the fullest extent permitted by Section 145 of the DGCL, as amended from time to time. The Company has entered into indemnification agreements with each of its directors and executive officers. The form of agreement (the “Indemnification Agreement”) provides, subject to certain exceptions and conditions specified in the Indemnification Agreement, that the Company will indemnify each indemnitee to the fullest extent permitted by Delaware law against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with a proceeding or claim in which such person is involved because of his or her status as one of the Company’s directors or executive officers. In addition, the Indemnification Agreement provides that the Company will, to the extent not prohibited by law and subject to certain exceptions and repayment conditions, advance specified indemnifiable expenses incurred by the indemnitee in connection with such proceeding or claim. The foregoing description of the Indemnification Agreement does not purport to be complete and is qualified in its entirety by reference to the full and complete terms of the Indemnification Agreement, which is filed as Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on February 25, 2016 and is incorporated by reference herein. The Company also maintains directors’ and officers’ insurance policies that indemnify its directors and officers against various liabilities, including certain liabilities under the Exchange Act that might be incurred by any director or officer in his or her capacity as such. The agreement and plan of merger relating to the acquisition of Fairchild (the “Fairchild Agreement”) provides for indemnification and insurance rights in favor of Fairchild’s then current and former directors, officers and employees. Specifically, the Company has agreed that, for no fewer than six years following the Fairchild acquisition, the Company will: (a) indemnify and hold harmless each such indemnitee against losses and expenses (including advancement of attorneys’ fees and expenses) in connection with any proceeding asserted against the indemnified party in connection with such person’s servings as a director, officer, employee or other fiduciary of Fairchild or its subsidiaries prior to the effective time of the acquisition; (b) maintain in effect all provisions of the certificate of incorporation or bylaws of Fairchild or any of its subsidiaries or any other agreements of Fairchild or any of its subsidiaries with any indemnified party regarding elimination of liability, indemnification of officers, directors and employees and advancement of expenses in existence on the date of the Fairchild Agreement for acts or omissions occurring prior to the effective time of the acquisition; and (c) subject to certain qualifications, deliver to Fairchild’s then current directors and officers an insurance and indemnification policy that provides coverage for events occurring prior to the effective time of the acquisition that is no less favorable than Fairchild’s then-existing policy; or, if insurance coverage that is no less favorable is unavailable, the best available coverage. Similarly, the agreement and plan of merger relating to the acquisition of Quantenna (the “Quantenna Agreement”) provides for indemnification and insurance rights in favor of Quantenna’s then current and former directors, officers, employees and agents. Specifically, the Company has agreed that, for no fewer than six years following the Quantenna acquisition, the Company will: (a) indemnify and hold harmless each such indemnified party to the fullest extent permitted by Delaware law in the event of any threatened or actual claim suit, action, proceeding or investigation against the indemnified party based in whole or in part on, or pertaining to, such person’s serving as a director, officer, employee or agent of Quantenna or its subsidiaries or predecessors prior to the effective time of the acquisition or in connection with the Quantenna Agreement; (b) maintain in effect provisions of the certificate of incorporation and bylaws of Quantenna and each of its subsidiaries regarding the elimination of liability of directors and indemnification of officers, directors and employees that are no less advantageous to the intended beneficiaries than the corresponding provisions in the certificate of incorporation and bylaws of Quantenna and each of its subsidiaries in existence on the date of the Quantenna Agreement; and (c) obtain and fully pay the premium for a non-cancelable extension of directors’ and officers’ liability coverage of Quantenna’s directors’ and officers’ policies and Quantenna’s fiduciary liability insurance policies in effect as of the date of the Quantenna Agreement. While the Company’s future obligations under certain agreements may contain limitations on liability for indemnification, other agreements do not contain such limitations and under such agreements it is not possible to predict the maximum potential amount of future payments due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under any of these indemnities have not had a material effect on the Company’s business, financial condition, results of operations or cash flows. Additionally, the Company does not believe that any amounts that it may be required to pay under these indemnities in the future will be material to the Company’s business, financial position, results of operations, or cash flows. Legal Matters From time to time, the Company is party to various legal proceedings arising in the ordinary course of business, including indemnification claims, claims of alleged infringement of patents, trademarks, copyrights and other intellectual property rights, claims of alleged non-compliance with contract provisions and claims related to alleged violations of laws and regulations. The Company regularly evaluates the status of the legal proceedings in which it is involved to assess whether a loss is probable or there is a reasonable possibility that a loss, or an additional loss, may have been incurred and determines if accruals are appropriate. If accruals are not appropriate, the Company further evaluates each legal proceeding to assess whether an estimate of possible loss or range of possible loss can be made for disclosure. Although litigation is inherently unpredictable, the Company believes that it has adequate provisions for any probable and estimable losses. Nevertheless, it is possible that the Company’s consolidated financial position, results of operations or liquidity could be materially and adversely affected in any particular period by the resolution of a legal proceeding. The Company’s estimates do not represent its maximum exposure. Legal expenses related to defense, negotiations, settlements, rulings and advice of outside legal counsel are expensed as incurred. The Company is currently involved in a variety of legal matters that arise in the ordinary course of business. Based on information currently available, except as disclosed below, the Company is not involved in any pending or threatened legal proceedings that it believes could reasonably be expected to have a material adverse effect on its financial condition, results of operations or liquidity. The litigation process and the administrative process at the United States Patent and Trademark Office (the “USPTO”) are inherently uncertain, and the Company cannot guarantee that the outcome of these matters will be favorable to it. Patent Litigation with Power Integrations, Inc. As of September 27, 2019, there were eleven outstanding civil litigation proceedings with Power Integrations, Inc. (“PI”), five of which were pending between PI and various Fairchild entities (including Fairchild Semiconductor International, Inc., Fairchild Semiconductor Corporation, and Fairchild (Taiwan) Corporation, f/k/a System General Corporation (collectively referred to in this sub-section as “Fairchild”), prior to the acquisition of Fairchild. There were also numerous outstanding administrative proceedings between the parties at the USPTO in which each party challenged the validity of the other party’s patents. On October 19, 2019, the Company and PI entered into a Settlement Agreement (the “Settlement Agreement”) pursuant to which the parties agreed to withdraw all outstanding legal and administrative disputes on the terms set forth in a binding term sheet previously entered into by and among the Company, SCI LLC and PI on October 4, 2019 (the “Term Sheet”). Pursuant to the Settlement Agreement, the Company paid PI $175.0 million in cash on October 22, 2019. In addition, each party agreed to release the other party from any claims to damages or monetary relief for alleged acts of patent infringement across the various patent infringement litigations and not to file any additional action for legal or equitable relief until June 30, 2023. Neither party granted any licenses to the other. The Company believes that the settlement will likely result in meaningful cost savings due to the elimination of litigation costs related to the pending civil litigation proceedings with PI. Further, the Company believes that the settlement will eliminate distractions to management resulting from uncertainty of the pending court actions and ensuing appeals, allowing management to focus more fully on pursuing business opportunities. See also Note 17: “Subsequent Events.” Power Integrations, Inc. v. Fairchild Semiconductor International, Inc. et al. (October 20, 2004, Delaware, 1:04-cv-01371-LPS): PI filed this lawsuit in 2004 in the U.S. District Court for the District of Delaware against Fairchild, alleging that certain of Fairchild’s pulse width modulation (“PWM”) integrated circuit products infringed U.S. patents owned by PI. The lawsuit sought a permanent injunction as well as money damages for Fairchild’s alleged infringement. In October 2006, a jury returned a willful infringement verdict and assessed damages against Fairchild. Fairchild voluntarily stopped U.S. sales and importation of those products in 2007 and has been offering replacement products since 2006. In December 2008, the judge overseeing the case reduced the jury’s 2006 damages award from $34.0 million to approximately $6.1 million and ordered a new trial on the issue of willfulness. Following the new trial held in June 2009, the court found Fairchild’s infringement to have been willful, and in January 2011 the court awarded PI final damages in the amount of $12.2 million. Fairchild appealed the final damages award, willfulness finding, and other issues to the U.S. Court of Appeals for the Federal Circuit. In March 2013, the Court of Appeals vacated substantially all of the damages award, ruling that there was no basis upon which a reasonable jury could find Fairchild liable for induced infringement. The Court of Appeals also vacated the earlier judgment of willful patent infringement. The full Court of Appeals and the Supreme Court of the United States later denied PI’s request to review the Court of Appeals ruling. The Court of Appeals instructed the lower court to conduct further proceedings to determine damages based on approximately $0.8 million worth of sales and imports of affected products, and to re-assess its finding that the infringement was willful. In December 2017, the lower court reinstated the willfulness finding but stayed resolution of the other outstanding issues, including damages. In June 2018, the Supreme Court of the United States decided WesternGeco LLC v. ION Geophysical Corp. , in which the Court determined that certain extraterritorial conduct may be relevant to some United States patent litigation. On October 4, 2018, the lower court issued an order finding that WesternGeco implicitly overruled the Court of Appeals’ 2013 decision in this case and stated that PI would be allowed to seek recovery of worldwide damages in a future retrial on damages. The lower court also, however, certified its October 4, 2018 order for interlocutory review by the Court of Appeals. The Court of Appeals has accepted the interlocutory appeal. As of September 27, 2019, briefing in that appeal was completed, and the parties were awaiting oral argument. Power Integrations, Inc. v. Fairchild Semiconductor International, Inc. et al. (May 23, 2008, Delaware, 1:08-cv-00309-LPS): This lawsuit was initiated by PI in 2008 in the U.S. District Court for the District of Delaware against Fairchild, alleging that certain other PWM products infringed several U.S. patents owned by PI. On October 14, 2008, Fairchild filed a patent infringement lawsuit against PI in the U.S. District Court for the District of Delaware, alleging that certain PI products infringed U.S. patents owned by Fairchild. Each lawsuit included claims for money damages and a request for a permanent injunction. These two lawsuits were consolidated and heard together in a jury trial in April 2012, during which the jury found that PI infringed one of the two U.S. patents owned by Fairchild and upheld the validity of both of the Fairchild patents. In the same verdict, the jury found that Fairchild infringed two of four U.S. patents asserted by PI and that Fairchild had induced its customers to infringe the asserted patents. (The court later ruled that Fairchild infringed one other asserted PI patent that the jury found was not infringed.) The jury also upheld the validity of the asserted PI patents, and the court entered a permanent injunction against Fairchild. Willfulness and damages were not considered in the April 2012 trial but were reserved for subsequent proceedings. Fairchild and PI appealed the liability phase of this litigation to the U.S. Court of Appeals for the Federal Circuit, which heard arguments in July 2016 and issued a decision in December 2016. In the decision, the appeals court vacated the jury’s finding that Fairchild induced infringement of PI’s patents, held that one of PI’s patents was invalid, vacated the permanent injunction against Fairchild, reversed the jury’s finding that PI infringed the Fairchild patent, and remanded the case back to the lower court for further proceedings consistent with these rulings. A second jury trial was held in this matter in November 2018, with the jury finding that Fairchild induced infringement of both remaining PI patents and that Fairchild’s infringement was willful. The jury also awarded PI damages in the amount of $24.3 million. In the parties’ post-trial motions, PI sought a trebling of the jury verdict in view of the jury’s willfulness finding, pre- and post-judgment interest, and its attorneys’ fees, whereas Fairchild sought judgment as a matter of law in its favor, or a new trial, on inducement, willfulness, and damages. On July 22, 2019, the court denied all post-trial motions other than PI’s request for pre-judgment interest, which the court granted and awarded PI $7.1 million, resulting in a total judgment for PI in the amount of approximately $32.0 million. As of September 27, 2019, the Company disagreed with the court’s denial of the Company’s post-trial motions and was preparing an appeal. Power Integrations, Inc. v. Fairchild Semiconductor International Inc. et al. (November 4, 2009, Northern District of California, 3:09-cv-05235-MMC): In 2009, PI sued Fairchild in the U.S. District Court for the Northern District of California, alleging that several of Fairchild’s products infringe three of PI’s patents. Fairchild filed counterclaims asserting that PI infringed two Fairchild patents. During the initial trial on this matter in 2014, a jury found that Fairchild willfully infringed two PI patents, awarded PI $105.0 million in damages and found that PI did not infringe any Fairchild patent. In September 2014, the court granted a motion filed by Fairchild that sought to set aside the jury’s determination that it acted willfully, and held that, as a matter of law, Fairchild’s actions were not willful. In November 2014, in response to another post-trial motion filed by Fairchild, the trial court ruled that the jury lacked sufficient evidence on which to base its damages award and, consequently, vacated the $105.0 million verdict and ordered a second trial on damages. The second damages trial was held in December 2015, in which a jury awarded PI $139.8 million in damages. Fairchild filed a number of post-trial motions challenging the second damages verdict, but the court ruled against Fairchild on these motions and awarded PI approximately $7.0 million in pre-judgment interest. Following the court’s rulings on these issues, PI moved the court to reinstate the jury’s willfulness finding and sought enhanced damages and attorneys’ fees. On January 23, 2017, the court reinstated the jury’s willful infringement finding, but denied PI’s motion for enhanced damages and attorneys’ fees in its entirety. The Company appealed the infringement and damages judgments, and in July 2018, the U.S. Court of Appeals for the Federal Circuit affirmed the judgment with respect to infringement of both PI patents but vacated the damages judgment because PI had presented legally insufficient evidence to support its damages claim. The appellate court thus remanded the case back to the lower court for a new trial on damages. In August 2018, PI requested that the Federal Circuit rehear, en banc , the issues of the vacated damages award, but this request was denied in September 2018. In December 2018, PI filed a petition for certiorari in the Supreme Court of the United States for review of the Federal Circuit's decision, but that request was denied in February 2019. All claims of the two PI patents found to be infringed by Fairchild were previously determined to be unpatentable in several inter partes review administrative proceedings ("IPRs") described below. The unpatentability findings, however, were recently vacated by the Court of Appeals for the Federal Circuit, as also described below. Fairchild Semiconductor International Inc. et al. v. Power Integrations, Inc. (May 1, 2012, Delaware, 1:12-cv-00540-LPS): In May 2012, Fairchild sued PI in the U.S. District Court for the District of Delaware, and alleged that various PI products infringe Fairchild’s U.S. patents. PI filed counterclaims of patent infringement against Fairchild, asserting five PI patents. Of those five patents, the court granted Fairchild summary judgment of no infringement on one, and PI voluntarily withdrew a second and was forced to remove a third during the trial, which began in May 2015. In that trial, the jury found that PI induced infringement of Fairchild’s patent rights and awarded Fairchild $2.4 million in damages. The same jury found that Fairchild infringed a PI patent and awarded PI damages of $0.1 million. Based on the December 2016 appellate court decision in the litigation filed in Delaware in 2008 (described above), on July 13, 2017, the District Court vacated the jury’s finding that PI infringed Fairchild’s patent. A jury trial was held in November 2018 to resolve several outstanding issues prior to appeal in this case. The jury in that trial found that Fairchild induced infringement of the sole PI patent Fairchild had previously been found to infringe and awarded PI damages in the amount of $0.7 million. In the parties’ post-trial motions, PI sought pre- and post-judgment interest and a permanent injunction, whereas Fairchild sought judgment as a matter of law in its favor, or a new trial, on inducement and damages. On July 22, 2019, the court denied all post-trial motions. As of September 27, 2019, the Company disagreed with the court’s denial of the Company’s post-trial motions and was preparing an appeal. Power Integrations, Inc. v. Fairchild Semiconductor International Inc. et al. (October 21, 2015, Northern District of California, 3:15-cv-04854 MMC): In 2015, PI filed another complaint for patent infringement against Fairchild in the U.S. District Court for the Northern District of California, alleging Fairchild's products willfully infringe two PI patents. In the complaint, PI sought a permanent injunction, unspecified damages, a trebling of damages, and an accounting of costs and fees. Fairchild answered and counterclaimed, alleging infringement by PI of four Fairchild patents related to aspects of PI’s products, and also seeking damages and a permanent injunction. The lawsuit is in its earliest stages, and had previously been stayed pending the outcome of the Company’s administrative challenges, which are described below, to the two PI patents asserted against Fairchild. In March 2019, however, the stay was lifted and this case was set for trial in November 2020. As of September 27, 2019, fact discovery was ongoing in this lawsuit, and PI had also filed administrative challenges to Fairchild’s asserted patents. Power Integrations, Inc. v. ON Semiconductor Corporation, and Semiconductor Components Industries, LLC (November 1, 2016, Northern District of California, 5:16-cv-06371-BLF and 5:17-cv-03189): On August 11, 2016, ON Semiconductor Corporation and SCI LLC (collectively referred to in this sub-section as “ON Semi”) filed a lawsuit against PI in the U.S. District Court for the District of Arizona, alleging that PI infringed six patents and seeking a permanent injunction and money damages for the alleged infringement. The lawsuit also sought a claim for a declaratory judgment that ON Semi does not infringe several of PI’s patents. Rather than responding to ON Semi’s lawsuit in Arizona, PI filed a separate lawsuit in the U.S. District Court for the Northern District of California in November 2016, alleging that ON Semi infringes six PI patents, including two of the three PI patents in ON Semi’s declaratory judgment claims from Arizona. PI also moved the Arizona court to dismiss ON Semi’s lawsuit, or in the alternative to transfer the lawsuit to California. Following various procedural motions, ON Semi’s Arizona action has been transferred to the U.S. District Court for the Northern District of California and consolidated with PI’s November 2016 lawsuit, in which PI has subsequently asserted a claim for infringement on the last of the three PI patents in ON Semi’s |
Fair Value Measurements - (Note
Fair Value Measurements - (Notes) | 9 Months Ended |
Sep. 27, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 12: Fair Value Measurements Fair Value of Financial Instruments The following table summarizes the Company's financial assets and liabilities, excluding pension assets, measured at fair value on a recurring basis (in millions): As of Fair Value Hierarchy Description September 27, 2019 Level 1 Level 2 Level 3 Assets: Cash and cash equivalents: Demand and time deposits $ 26.0 $ 26.0 $ — $ — Money market funds 0.4 0.4 — — As of Fair Value Hierarchy Description December 31, 2018 Level 1 Level 2 Level 3 Assets: Cash and cash equivalents: Demand and time deposits $ 21.2 $ 21.2 $ — $ — Money market funds 0.2 0.2 — — Other The carrying amounts of other current assets and liabilities, such as accounts receivable and accounts payable, approximate fair value based on the short-term nature of these instruments. Fair Value of Long-Term Debt, Including Current Portion The carrying amounts and fair values of the Company’s long-term borrowings (excluding finance lease obligations, real estate mortgages and equipment financing) are as follows (in millions): As of September 27, 2019 December 31, 2018 Carrying Fair Value Carrying Fair Value Long-term debt, including current portion Convertible notes $ 1,151.8 $ 1,491.1 $ 1,120.6 $ 1,368.5 Long-term debt 2,463.2 2,431.3 1,615.1 1,585.9 The fair values of the Company's 1.00% Notes and 1.625% Notes were estimated based on market prices in active markets (Level 1). The fair value of other long-term debt was estimated based on discounting the remaining principal and interest payments using current market rates for similar debt (Level 2) at September 27, 2019 and December 31, 2018. |
Financial Instruments - (Notes)
Financial Instruments - (Notes) | 9 Months Ended |
Sep. 27, 2019 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments Disclosure [Text Block] | Note 13: Financial Instruments Foreign Currencies As a multinational business, the Company’s transactions are denominated in a variety of currencies. When appropriate, the Company uses forward foreign currency contracts to reduce its overall exposure to the effects of currency fluctuations on its results of operations and cash flows. The Company’s policy prohibits trading in currencies for which there are no underlying exposures and entering into trades for any currency to intentionally increase the underlying exposure. The Company primarily hedges existing assets and liabilities associated with transactions currently on its balance sheet, which are undesignated hedges for accounting purposes. As of September 27, 2019 and December 31, 2018, the Company had net outstanding foreign exchange contracts with notional amounts of $188.9 million and $157.3 million, respectively. Such contracts were obtained through financial institutions and were scheduled to mature within one to three months from the time of purchase. Management believes that these financial instruments should not subject the Company to increased risks from foreign exchange movements because gains and losses on these contracts should offset losses and gains on the underlying assets, liabilities and transactions to which they are related. The following summarizes the Company’s net foreign exchange positions in U.S. Dollars (in millions): As of September 27, 2019 December 31, 2018 Buy (Sell) Notional Amount Buy (Sell) Notional Amount Japanese Yen 46.9 46.9 29.9 29.9 Philippine Peso 35.6 35.6 30.1 30.1 Chinese Yuan 29.6 29.6 20.4 20.4 Korean Won 19.3 19.3 20.8 20.8 Czech Koruna 13.7 13.7 9.2 9.2 Other Currencies - Buy 39.5 39.5 39.4 39.4 Other Currencies - Sell (4.3) 4.3 (7.5) 7.5 $ 180.3 $ 188.9 $ 142.3 $ 157.3 Amounts receivable or payable under the contracts are included in other current assets or accrued expenses and other current liabilities in the accompanying Consolidated Balance Sheet. For the quarters ended September 27, 2019 and September 28, 2018, realized and unrealized foreign currency transactions totaled a gain of $0.3 million and $0.8 million, respectively. For the nine months ended September 27, 2019 and September 28, 2018, realized and unrealized foreign currency transactions totaled a loss of $3.8 million and $5.8 million, respectively. The realized and unrealized foreign currency transactions are included in other income and expenses in the Company's Consolidated Statement of Operations and Comprehensive Income. Cash Flow Hedges All derivatives are recognized on the Company’s Consolidated Balance Sheet at their fair value and classified based on the instrument's maturity date. Interest rate risk The Company uses interest rate swap contracts to mitigate its exposure to interest rate fluctuations. On February 25, 2019, the Company entered into additional interest rate swap agreements for notional amounts totaling $1.0 billion (effective as of December 31, 2019) and $750.0 million (effective as of December 31, 2020) with expiry dates of December 31, 2020 and December 31, 2021, respectively. The notional amounts of the interest rate swap agreements outstanding as of September 27, 2019 and September 28, 2018 amounted to $1.0 billion and $750.0 million, respectively. The Company performed effectiveness assessments and concluded that there was no ineffectiveness during the quarters ended September 27, 2019 and September 28, 2018. A number of the Company’s current debt agreements, including the Amended Credit Agreement, have an interest rate tied to LIBOR, which is expected to be discontinued after 2021. While some of the Company’s debt agreements provide procedures for determining an alternative base rate in the event that LIBOR is discontinued, but not all do so. Regardless, there can be no assurances as to what alternative base rates may be and whether such base rate will be more or less favorable than LIBOR and any other unforeseen impacts of the potential discontinuation of LIBOR. The Company intends to monitor the developments with respect to the potential phasing out of LIBOR after 2021 and work with its lenders to ensure any transition away from LIBOR will have minimal impact on its financial condition, but can provide no assurances regarding the impact of the discontinuation of LIBOR. Foreign currency risk The purpose of the Company's foreign currency hedging activities is to protect the Company from the risk that the eventual cash flows resulting from transactions in foreign currencies will be adversely affected by changes in exchange rates. The Company enters into forward contracts that are designated as foreign currency cash flow hedges of selected forecasted payments denominated in currencies other than U.S. Dollars. For the quarters and nine months ended September 27, 2019 and September 28, 2018, the Company did not have outstanding derivatives for its foreign currency exposure designated as cash flow hedges. Convertible Note Hedges The Company entered into convertible note hedges in connection with the issuance of the 1.00% Notes and 1.625% Notes. Other At September 27, 2019, the Company had no outstanding commodity derivatives, currency swaps or options relating to either its debt instruments or investments. The Company does not hedge the value of its equity investments in its subsidiaries or affiliated companies. The Company is exposed to credit-related losses if counterparties to hedge contracts fail to perform their obligations. As of September 27, 2019, the counterparties to the Company’s hedge contracts were held at financial institutions that the Company believes to be highly-rated, and no credit-related losses are anticipated. |
Income Taxes - (Notes)
Income Taxes - (Notes) | 9 Months Ended |
Sep. 27, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 14: Income Taxes The Company determines its interim income tax provision by applying the estimated effective income tax rate expected to be applicable for the full fiscal year to the income before income taxes for the period. In determining the full year estimate, the Company does not include the estimated impact of unusual and/or infrequent items, which may cause significant variations in the customary relationship between income tax expense and income before income taxes. Significant judgment is exercised in determining the income tax provision due to transactions, credits and calculations where the ultimate tax determination is uncertain. The Company’s effective tax rate for the quarter ended September 27, 2019 was a benefit of 29.1%, which differs from the U.S. federal income tax rate of 21.0%, primarily due to the benefit from the release of reserves and interest for uncertain tax positions in foreign jurisdictions. The Company’s effective tax rate for the nine months ended September 27, 2019 was 19.0%, which differs from the U.S. federal income tax rate of 21.0%, primarily due to the benefit from the release of reserves and interest related to uncertain tax positions in foreign jurisdictions partially offset by foreign taxes for which the Company will not receive a U.S. tax credit. The Company recognizes interest and penalties related to unrecognized tax benefits in tax expense on the Company's Consolidated Statement of Operations and Comprehensive Income. The Company had approximately $4.5 million and $5.1 million of net interest and penalties accrued at September 27, 2019 and September 28, 2018, respectively. Although the Company cannot predict the timing of resolution with taxing authorities, if any, it believes it is reasonably possible that $1.5 million of its unrecognized tax benefits will be reduced in the next 12 months due to settlement with tax authorities or expiration of the applicable statute of limitations. Tax years prior to 2016 are generally not subject to examination by the Internal Revenue Service (the “IRS”) except for items involving tax attributes that have been carried forward to tax years whose statute of limitations remains open. The Company is not currently under IRS examination. For state tax returns, the Company is generally not subject to income tax examinations for tax years prior to 2015. The Company is also subject to routine examinations by various foreign jurisdictions in which it operates. With respect to jurisdictions outside the United States, the Company's subsidiaries are generally no longer subject to income tax audits for tax years prior to 2008. The Company is currently under audit in certain jurisdictions, including, but not limited to, China, the Czech Republic, the Philippines and the United Kingdom. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss - (Notes) | 9 Months Ended |
Sep. 27, 2019 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss | Note 15: Changes in Accumulated Other Comprehensive Loss Amounts comprising the Company's accumulated other comprehensive loss and reclassifications are as follows (in millions): Currency Translation Adjustments Effects of Cash Flow Hedges Total Balance as of December 31, 2018 $ (42.5) $ 4.6 $ (37.9) Other comprehensive income prior to reclassifications 0.5 (21.2) (20.7) Amounts reclassified from accumulated other comprehensive loss — 3.0 3.0 Net current period other comprehensive income (1) 0.5 (18.2) (17.7) Balance as of September 27, 2019 $ (42.0) $ (13.6) $ (55.6) (1) Effects of cash flow hedges are net of $4.8 million of tax benefit for the nine months ended September 27, 2019. Amounts which were reclassified from accumulated other comprehensive loss to the Company's Consolidated Statement of Operations and Comprehensive Income are as follows (net of tax of $0.1 million and $0.6 million for the quarter and nine months ended September 27, 2019, respectively, and $0.2 million and $0.4 million for the quarter and nine months ended September 28, 2018, respectively, in millions): Amounts Reclassified from Accumulated Other Comprehensive Loss Quarters Ended Nine Months Ended September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018 Statements of Operations and Comprehensive Income Line Item Interest rate swaps $ (0.3) $ (1.0) $ (3.0) $ (1.8) Interest expense Total reclassifications $ (0.3) $ (1.0) $ (3.0) $ (1.8) |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 27, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 17: Subsequent Event On October 19, 2019, the Company and PI entered into the Settlement Agreement pursuant to which the parties agreed to withdraw all outstanding legal and administrative disputes on the terms set forth in the Term Sheet. Pursuant to the Settlement Agreement, the Company paid PI $175.0 million in cash on October 22, 2019. For more information about the Settlement Agreement, see Note 11: “Commitments and Contingencies.” |
Background and Basis of Prese_2
Background and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 27, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Management evaluates these estimates and judgments on an ongoing basis and bases its estimates on experience, current and expected future conditions, third-party evaluations and various other assumptions that management believes are reasonable under the circumstances. Significant estimates have been used by management in conjunction with the following: (i) future payouts for customer incentives and amounts subject to allowances, returns and warranties; (ii) measurement of valuation allowances relating to inventories; (iii) fair values of share-based compensation; (iv) assumptions used in business combinations; and (v) measurement of valuation allowances against deferred tax assets and evaluations of unrecognized tax benefits. Additionally, during periods where it becomes applicable, significant estimates will be used by management in determining the future cash flows used to assess and test for impairment of goodwill, indefinite-lived intangible assets and long-lived assets. Actual results may differ from the estimates and assumptions used in the consolidated financial statements and related notes. |
Recent Accounting Pronouncements | Note 3: Recent Accounting Pronouncements ASU Adopted: ASU No. 2016-02 - Leases (Topic 842) (“ASU 2016-02”), ASU No. 2018-10 - Codification improvements to Topic 842, Leases (“ASU 2018-10”), ASU No. 2018-11 - Leases (Topic 842) (“ASU 2018-11”) (collectively, the “New Leasing Standard”) In February 2016, the FASB issued ASU 2016-02, which amended the accounting treatment for leases. ASU 2016 -02 requires that a lessee should recognize on its balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. Lessees must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. In July 2018, the FASB issued ASU 2018-10 and ASU 2018-11. ASU 2018-10 provides certain areas for improvement in ASU 2016-02 and ASU 2018-11 provides an additional optional transition method by allowing entities to initially apply the New Leasing Standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption (the "effective date method"). The New Leasing Standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted the New Leasing Standard as of January 1, 2019 using the effective date method by recording right-of-use assets of $112.3 million, net of deferred rent liabilities of $5.1 million that were reclassified to right-of-use assets, and lease liabilities of $117.4 million. Under this method, periods prior to 2019 remain unchanged. The Company applied the practical expedients relating to the leases that commenced before January 1, 2019 whereby the Company elected to not reassess the following: (i) whether any expired or existing contracts contain leases; (ii) the lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases. See Note 7: ''Balance Sheet Information'' for further information and disclosures relating to the New Leasing Standard. |
New Accounting Pronouncements | ASU Adopted: ASU No. 2016-02 - Leases (Topic 842) (“ASU 2016-02”), ASU No. 2018-10 - Codification improvements to Topic 842, Leases (“ASU 2018-10”), ASU No. 2018-11 - Leases (Topic 842) (“ASU 2018-11”) (collectively, the “New Leasing Standard”) In February 2016, the FASB issued ASU 2016-02, which amended the accounting treatment for leases. ASU 2016 -02 requires that a lessee should recognize on its balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. Lessees must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. In July 2018, the FASB issued ASU 2018-10 and ASU 2018-11. ASU 2018-10 provides certain areas for improvement in ASU 2016-02 and ASU 2018-11 provides an additional optional transition method by allowing entities to initially apply the New Leasing Standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption (the "effective date method"). The New Leasing Standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted the New Leasing Standard as of January 1, 2019 using the effective date method by recording right-of-use assets of $112.3 million, net of deferred rent liabilities of $5.1 million that were reclassified to right-of-use assets, and lease liabilities of $117.4 million. Under this method, periods prior to 2019 remain unchanged. The Company applied the practical expedients relating to the leases that commenced before January 1, 2019 whereby the Company elected to not reassess the following: (i) whether any expired or existing contracts contain leases; (ii) the lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases. See Note 7: ''Balance Sheet Information'' for further information and disclosures relating to the New Leasing Standard. |
Revenue and Segment Informati_2
Revenue and Segment Information (Tables) | 9 Months Ended |
Sep. 27, 2019 | |
Segment Reporting [Abstract] | |
Revenues and Gross Profit From Reportable Segments | Revenue and gross profit for the Company’s operating and reporting segments were as follows (in millions): PSG ASG ISG Total For the quarter ended September 27, 2019: Revenue from external customers $ 687.9 $ 508.9 $ 185.0 $ 1,381.8 Gross profit $ 226.7 $ 207.7 $ 67.6 $ 502.0 For the quarter ended September 28, 2018: Revenue from external customers $ 810.2 $ 531.7 $ 199.8 $ 1,541.7 Gross profit $ 297.9 $ 224.3 $ 80.7 $ 602.9 For the nine months ended September 27, 2019: Revenue from external customers $ 2,093.0 $ 1,465.0 $ 558.1 $ 4,116.1 Gross profit $ 731.4 $ 592.5 $ 208.4 $ 1,532.3 For the nine months ended September 28, 2018: Revenue from external customers $ 2,251.0 $ 1,541.1 $ 583.1 $ 4,375.2 Gross profit $ 804.2 $ 650.4 $ 245.0 $ 1,699.6 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | Reconciliations of segment gross profit to consolidated gross profit are as follows (in millions): Quarters Ended Nine Months Ended September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018 Gross profit for reporting segments $ 502.0 $ 602.9 $ 1,532.3 $ 1,699.6 Less: Unallocated manufacturing costs (26.8) (6.3) (44.4) (30.6) Consolidated gross profit $ 475.2 $ 596.6 $ 1,487.9 $ 1,669.0 |
Disaggregation of Revenue | Revenue for the Company's operating and reporting segments disaggregated into geographic locations and sales channels were as follows (in millions): Quarter Ended September 27, 2019 PSG ASG ISG Total Geographic Location Singapore $ 207.7 $ 195.7 $ 43.4 $ 446.8 Hong Kong 216.2 105.8 34.9 356.9 United Kingdom 111.4 77.3 34.3 223.0 United States 92.2 73.4 27.7 193.3 Other 60.4 56.7 44.7 161.8 Total $ 687.9 $ 508.9 $ 185.0 $ 1,381.8 Sales Channel Distributors $ 430.6 $ 248.8 $ 113.7 $ 793.1 OEM/ODM 206.9 228.2 61.5 496.6 Electronic Manufacturing Service Providers 50.4 31.9 9.8 92.1 Total $ 687.9 $ 508.9 $ 185.0 $ 1,381.8 Nine Months Ended September 27, 2019 PSG ASG ISG Total Geographic Location Singapore $ 646.0 $ 479.2 $ 126.7 $ 1,251.9 Hong Kong 623.0 326.1 94.2 1,043.3 United Kingdom 355.2 233.2 110.9 699.3 United States 280.7 259.0 90.7 630.4 Other 188.1 167.5 135.6 491.2 Total $ 2,093.0 $ 1,465.0 $ 558.1 $ 4,116.1 Sales Channel Distributors $ 1,287.8 $ 713.7 $ 336.8 $ 2,338.3 OEM/ODM 666.4 647.0 191.7 1,505.1 Electronic Manufacturing Service Providers 138.8 104.3 29.6 272.7 Total $ 2,093.0 $ 1,465.0 $ 558.1 $ 4,116.1 Quarter Ended September 28, 2018 PSG ASG ISG Total Geographic Location Singapore $ 332.8 $ 191.7 $ 48.6 $ 573.1 Hong Kong 201.9 124.1 35.0 361.0 United Kingdom 124.9 81.9 34.8 241.6 United States 102.3 87.8 31.5 221.6 Other 48.3 46.2 49.9 144.4 Total $ 810.2 $ 531.7 $ 199.8 $ 1,541.7 Sales Channel Distributors $ 565.1 $ 280.4 $ 122.2 $ 967.7 OEM/ODM 198.6 213.1 65.1 476.8 Electronic Manufacturing Service Providers 46.5 38.2 12.5 97.2 Total $ 810.2 $ 531.7 $ 199.8 $ 1,541.7 Nine Months Ended September 28, 2018 PSG ASG ISG Total Geographic Location Singapore $ 805.3 $ 510.7 $ 123.8 $ 1,439.8 Hong Kong 636.5 379.7 110.6 1,126.8 United Kingdom 368.0 243.4 106.2 717.6 United States 295.0 251.9 91.4 638.3 Other 146.2 155.4 151.1 452.7 Total $ 2,251.0 $ 1,541.1 $ 583.1 $ 4,375.2 Sales Channel Distributors $ 1,499.7 $ 792.0 $ 352.4 $ 2,644.1 OEM/ODM 616.5 640.7 198.6 1,455.8 Electronic Manufacturing Service Providers 134.8 108.4 32.1 275.3 Total $ 2,251.0 $ 1,541.1 $ 583.1 $ 4,375.2 |
Summary of Property, Plant and Equipment by Geographic Location | Property, plant and equipment, net by geographic location, is summarized as follows (in millions): As of September 27, 2019 December 31, 2018 United States $ 608.3 $ 616.9 Korea 460.7 383.1 Philippines 443.6 474.5 China 244.1 248.4 Czech Republic 231.3 194.5 Japan 220.7 205.0 Malaysia 212.6 229.1 Other 180.8 198.1 Total $ 2,602.1 $ 2,549.6 |
Acquisitions - (Tables)
Acquisitions - (Tables) | 9 Months Ended |
Sep. 27, 2019 | |
Business Combinations [Abstract] | |
Assets Acquired and Liabilities Assumed | Initial Estimate Measurement Period Adjustments Updated Allocation Cash and cash equivalents $ 133.4 $ — $ 133.4 Receivables 21.2 1.0 22.2 Inventories 45.0 (3.2) 41.8 Other current assets 4.3 — 4.3 Property, plant and equipment 16.3 0.6 16.9 Goodwill 620.0 106.7 726.7 Intangible assets (excluding IPRD) 180.9 (93.8) 87.1 IPRD 55.5 (31.7) 23.8 Deferred tax assets 3.3 25.9 29.2 Other non-current assets 10.5 2.2 12.7 Total assets acquired 1,090.4 7.7 1,098.1 Accounts payable 22.6 — 22.6 Other current liabilities 16.8 0.7 17.5 Deferred tax liabilities 3.9 (0.6) 3.3 Other non-current liabilities 7.8 7.6 15.4 Total liabilities assumed 51.1 7.7 58.8 Net assets acquired/purchase price $ 1,039.3 $ — $ 1,039.3 |
Pro Forma Information | Pro-Forma Results of Operations The following unaudited pro-forma consolidated results of operation for the quarters and nine months ended September 27, 2019 and September 28, 2018 have been prepared as if the acquisition of Quantenna had occurred on January 1, 2018 and includes adjustments for amortization of intangibles, interest expense from financing, restructuring, and the effect of purchase accounting adjustments including the step-up of inventory (in millions): Quarters Ended Nine Months Ended September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018 Revenue $ 1,381.8 $ 1,601.0 $ 4,211.4 $ 4,533.1 Net income (loss) (43.1) 160.1 160.9 407.8 Net income (loss) attributable to ON Semiconductor Corporation (43.8) 159.9 159.1 405.7 Net income (loss) per common share attributable to ON Semiconductor Corporation: Basic $ (0.11) $ 0.38 $ 0.39 $ 0.95 Diluted $ (0.11) $ 0.37 $ 0.38 $ 0.92 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - (Tables) | 9 Months Ended |
Sep. 27, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill by Reportable Segment | The following table summarizes goodwill by operating and reporting segments (in millions): As of September 27, 2019 December 31, 2018 Goodwill Accumulated Impairment Losses Carrying Value Goodwill Accumulated Impairment Losses Carrying Value Operating and Reporting Segments: PSG $ 432.2 $ (31.9) $ 400.3 $ 432.2 $ (31.9) $ 400.3 ASG 1,563.4 (418.9) 1,144.5 836.7 (418.9) 417.8 ISG 114.4 — 114.4 114.4 — 114.4 $ 2,110.0 $ (450.8) $ 1,659.2 $ 1,383.3 $ (450.8) $ 932.5 The following table summarizes the change in goodwill from December 31, 2018 through September 27, 2019 (in millions): Net balance as of December 31, 2018 $ 932.5 Addition due to business combination 726.7 Net balance as of September 27, 2019 $ 1,659.2 |
Summary of Intangible Assets, Net | Intangible assets, net, were as follows (in millions): As of September 27, 2019 Original Accumulated Accumulated Impairment Losses Carrying Customer relationships $ 585.2 $ (379.2) $ (20.1) $ 185.9 Developed technology 760.8 (416.6) (2.6) 341.6 IPRD 83.4 — (24.1) 59.3 Licenses 30.0 — — 30.0 Other intangibles 82.6 (61.6) (15.2) 5.8 Total intangible assets $ 1,542.0 $ (857.4) $ (62.0) $ 622.6 As of December 31, 2018 Original Accumulated Accumulated Impairment Losses Carrying Customer relationships $ 556.7 $ (359.1) $ (20.1) $ 177.5 Developed technology 698.0 (356.4) (2.6) 339.0 IPRD 64.1 — (22.5) 41.6 Other intangibles 82.3 (58.8) (15.2) 8.3 Total intangible assets $ 1,401.1 $ (774.3) $ (60.4) $ 566.4 |
Summary of Amortization Expense | Amortization expense for intangible assets, with the exception of the $59.3 million of IPRD assets that will be amortized once the corresponding projects have been completed, is expected to be as follows for the remainder of 2019, each of the next four years and thereafter (in millions): Period Amortization Expense Remainder of 2019 $ 31.6 2020 111.9 2021 93.0 2022 77.9 2023 61.9 Thereafter 187.0 Total $ 563.3 |
Restructuring, Asset Impairme_2
Restructuring, Asset Impairments and Other, Net - (Tables) | 9 Months Ended |
Sep. 27, 2019 | |
Restructuring Charges [Abstract] | |
Schedule of Activity Included in Restructuring, Asset Impairments, and Other, Net | Summarized activity included in the “Restructuring, asset impairments and other, net” caption on the Company's Consolidated Statement of Operations and Comprehensive Income is as follows (in millions): Restructuring Asset Impairments Other Total Quarter ended September 27, 2019 General workforce reduction $ 0.6 $ — $ — $ 0.6 Post-Quantenna acquisition restructuring 1.8 — — 1.8 Other 0.8 — 1.2 2.0 Total $ 3.2 $ — $ 1.2 $ 4.4 Restructuring Asset Impairments (1) Other Total Nine months ended September 27, 2019 General workforce reduction $ 8.4 $ — $ — $ 8.4 Post-Quantenna acquisition restructuring 15.6 — — 15.6 Other 0.8 2.9 0.4 4.1 Total $ 24.8 $ 2.9 $ 0.4 $ 28.1 |
Schedule of Changes in Accrued Restructuring Reserve | Changes in accrued restructuring charges from December 31, 2018 to September 27, 2019 are summarized as follows (in millions): As of As of December 31, 2018 Charges Usage September 27, 2019 Estimated employee separation charges $ 0.3 $ 24.8 $ (22.6) $ 2.5 Other 0.2 — (0.1) 0.1 Total $ 0.5 $ 24.8 $ (22.7) $ 2.6 |
Balance Sheet Information - (Ta
Balance Sheet Information - (Tables) | 9 Months Ended |
Sep. 27, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental Balance Sheet Information | Certain significant amounts included in the Company's Consolidated Balance Sheet consist of the following (in millions): As of September 27, 2019 December 31, 2018 Inventories: Raw materials $ 145.0 $ 137.3 Work in process 782.4 760.7 Finished goods 313.3 327.2 $ 1,240.7 $ 1,225.2 |
Pension expense | The components of the Company's net periodic pension expense are as follows (in millions): Quarters Ended Nine Months Ended September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018 Service cost $ 2.4 $ 2.4 $ 7.1 $ 7.3 Interest cost 1.3 1.2 3.8 3.6 Expected return on plan assets (1.5) (1.5) (4.5) (4.6) Total net periodic pension cost $ 2.2 $ 2.1 $ 6.4 $ 6.3 |
Lease expense | The components of lease expense are as follows (in millions): Quarter Ended Nine Months Ended September 27, 2019 September 27, 2019 Operating lease $ 9.2 $ 25.8 Variable lease 1.0 3.1 Short-term lease 0.6 1.9 Total lease expense $ 10.8 $ 30.8 The lease liabilities recognized in the Consolidated Balance Sheet are as follows (in millions): As of September 27, 2019 Accrued expenses and other current liabilities $ 27.6 Other long-term liabilities 91.0 $ 118.6 |
Summary of Operating Leases Future Minimum Payments Receivable | The reconciliation of the maturities of the operating leases to the lease liabilities recorded in the Consolidated Balance Sheet as of September 27, 2019 are as follows (in millions): Remainder of 2019 $ 7.9 2020 31.3 2021 24.7 2022 20.4 2023 14.7 Thereafter 50.2 Total lease payments (1) $ 149.2 Less: Interest (30.6) Amounts recorded in the Consolidated Balance Sheet $ 118.6 The following represents future minimum lease obligations under non-cancelable operating leases as of December 31, 2018 (in millions): 2019 $ 36.8 2020 27.6 2021 21.9 2022 16.8 2023 12.3 Thereafter 45.4 Total (1) $ 160.8 (1) Excludes $12.3 million of expected sublease income. |
Long-Term Debt - (Tables)
Long-Term Debt - (Tables) | 9 Months Ended |
Sep. 27, 2019 | |
Debt Disclosure [Abstract] | |
Annual Maturities Relating To Long-Term Debt | Expected maturities relating to the Company’s gross long-term debt (including current maturities) as of September 27, 2019 are as follows (in millions): Period Expected Maturities Remainder of 2019 $ 14.5 2020 760.4 2021 16.4 2022 16.4 2023 591.4 Thereafter 2,365.5 Total $ 3,764.6 |
Earnings Per Share and Equity_2
Earnings Per Share and Equity - (Tables) | 9 Months Ended |
Sep. 27, 2019 | |
Earnings Per Share [Abstract] | |
Summary of Earnings Per Share | Calculations of net income (loss) per common share attributable to ON Semiconductor Corporation are as follows (in millions, except per share data): Quarters Ended Nine Months Ended September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018 Net income (loss) attributable to ON Semiconductor Corporation $ (60.7) $ 166.9 $ 155.2 $ 461.8 Basic weighted-average common shares outstanding 410.4 425.5 411.0 426.1 Dilutive effect of share-based awards — 3.9 1.7 4.7 Dilutive effect of convertible notes — 5.9 2.6 10.4 Diluted weighted-average common shares outstanding 410.4 435.3 415.3 441.2 Net income (loss) per common share attributable to ON Semiconductor Corporation: Basic $ (0.15) $ 0.39 $ 0.38 $ 1.08 Diluted $ (0.15) $ 0.38 $ 0.37 $ 1.05 |
Schedule of Share Repurchase Program | Information relating to the Share Repurchase Program during the quarter and nine months ended September 27, 2019 is as follows (in millions, except per share data): Quarter Ended Nine Months Ended September 27, 2019 September 27, 2019 Number of repurchased shares (1) 0.8 7.8 Aggregate purchase price $ 13.1 $ 138.9 Fees, commissions and other expenses 0.1 0.1 Total cash used for share repurchases $ 13.2 $ 139.0 Weighted-average purchase price per share (2) $ 17.18 $ 17.89 (1) None of these shares had been reissued or retired as of September 27, 2019, but may be reissued or retired by the Company at a later date. (2) Exclusive of fees, commissions and other expenses. |
Share-Based Compensation - (Tab
Share-Based Compensation - (Tables) | 9 Months Ended |
Sep. 27, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary Of Share-Based Compensation Expense | Total share-based compensation expense related to the Company's stock options, RSUs, stock grant awards and the ESPP were recorded within the Consolidated Statements of Operations and Comprehensive Income as follows (in millions): Quarters Ended Nine Months Ended September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018 Cost of revenue $ 2.3 $ 1.7 $ 7.7 $ 5.1 Research and development 3.4 3.4 12.4 10.6 Selling and marketing 2.7 3.3 11.1 10.5 General and administrative 6.3 9.5 30.5 33.2 Share-based compensation expense $ 14.7 $ 17.9 $ 61.7 $ 59.4 Related income tax benefits at federal rate of 21% (3.1) (3.8) (13.0) (12.5) Share-based compensation expense, net of taxes $ 11.6 $ 14.1 $ 48.7 $ 46.9 |
Summary Of Restricted Stock Units Transactions | summary of the RSU transactions for the nine months ended September 27, 2019 is as follows (in millions, except per share data): Number of Shares Weighted-Average Grant Date Fair Value Per Share Non-vested RSUs at December 31, 2018 8.6 $ 16.59 Granted 4.7 21.69 Achieved 0.2 24.46 Released (4.4) 14.28 Forfeited (0.4) 19.61 Non-vested RSUs at September 27, 2019 8.7 20.56 |
Fair Value Measurements - (Tabl
Fair Value Measurements - (Tables) | 9 Months Ended |
Sep. 27, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value of Assets and Liabilities | The following table summarizes the Company's financial assets and liabilities, excluding pension assets, measured at fair value on a recurring basis (in millions): As of Fair Value Hierarchy Description September 27, 2019 Level 1 Level 2 Level 3 Assets: Cash and cash equivalents: Demand and time deposits $ 26.0 $ 26.0 $ — $ — Money market funds 0.4 0.4 — — As of Fair Value Hierarchy Description December 31, 2018 Level 1 Level 2 Level 3 Assets: Cash and cash equivalents: Demand and time deposits $ 21.2 $ 21.2 $ — $ — Money market funds 0.2 0.2 — — |
Summary of Fair Value, by Balance Sheet Grouping | The carrying amounts and fair values of the Company’s long-term borrowings (excluding finance lease obligations, real estate mortgages and equipment financing) are as follows (in millions): As of September 27, 2019 December 31, 2018 Carrying Fair Value Carrying Fair Value Long-term debt, including current portion Convertible notes $ 1,151.8 $ 1,491.1 $ 1,120.6 $ 1,368.5 Long-term debt 2,463.2 2,431.3 1,615.1 1,585.9 |
Financial Instruments - (Tables
Financial Instruments - (Tables) | 9 Months Ended |
Sep. 27, 2019 | |
Investments, All Other Investments [Abstract] | |
Schedule of Net Foreign Exchange Positions | The following summarizes the Company’s net foreign exchange positions in U.S. Dollars (in millions): As of September 27, 2019 December 31, 2018 Buy (Sell) Notional Amount Buy (Sell) Notional Amount Japanese Yen 46.9 46.9 29.9 29.9 Philippine Peso 35.6 35.6 30.1 30.1 Chinese Yuan 29.6 29.6 20.4 20.4 Korean Won 19.3 19.3 20.8 20.8 Czech Koruna 13.7 13.7 9.2 9.2 Other Currencies - Buy 39.5 39.5 39.4 39.4 Other Currencies - Sell (4.3) 4.3 (7.5) 7.5 $ 180.3 $ 188.9 $ 142.3 $ 157.3 |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Loss - (Tables) | 9 Months Ended |
Sep. 27, 2019 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | Amounts comprising the Company's accumulated other comprehensive loss and reclassifications are as follows (in millions): Currency Translation Adjustments Effects of Cash Flow Hedges Total Balance as of December 31, 2018 $ (42.5) $ 4.6 $ (37.9) Other comprehensive income prior to reclassifications 0.5 (21.2) (20.7) Amounts reclassified from accumulated other comprehensive loss — 3.0 3.0 Net current period other comprehensive income (1) 0.5 (18.2) (17.7) Balance as of September 27, 2019 $ (42.0) $ (13.6) $ (55.6) (1) Effects of cash flow hedges are net of $4.8 million of tax benefit for the nine months ended September 27, 2019. Amounts which were reclassified from accumulated other comprehensive loss to the Company's Consolidated Statement of Operations and Comprehensive Income are as follows (net of tax of $0.1 million and $0.6 million for the quarter and nine months ended September 27, 2019, respectively, and $0.2 million and $0.4 million for the quarter and nine months ended September 28, 2018, respectively, in millions): Amounts Reclassified from Accumulated Other Comprehensive Loss Quarters Ended Nine Months Ended September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018 Statements of Operations and Comprehensive Income Line Item Interest rate swaps $ (0.3) $ (1.0) $ (3.0) $ (1.8) Interest expense Total reclassifications $ (0.3) $ (1.0) $ (3.0) $ (1.8) |
Background and Basis of Prese_3
Background and Basis of Presentation (Details) - segment | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 27, 2019 | Sep. 28, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Fiscal Period Duration | 91 days | 91 days | 270 days | 271 days |
Number of operating segments | 3 | |||
Number of reportable segments | 3 |
Revenue and Segment Informati_3
Revenue and Segment Information Additional Information (Details) | 9 Months Ended |
Sep. 27, 2019segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Number of reportable segments | 3 |
Revenue and Segment Informati_4
Revenue and Segment Information - Segment Information Of Revenues, Gross Profit And Operating Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 27, 2019 | Sep. 28, 2018 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 1,381.8 | $ 1,541.7 | $ 4,116.1 | $ 4,375.2 |
Gross profit for reporting segments | 502 | 602.9 | 1,532.3 | 1,699.6 |
PSG | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 687.9 | 810.2 | 2,093 | 2,251 |
Gross profit for reporting segments | 226.7 | 297.9 | 731.4 | 804.2 |
ASG | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 508.9 | 531.7 | 1,465 | 1,541.1 |
Gross profit for reporting segments | 207.7 | 224.3 | 592.5 | 650.4 |
ISG | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 185 | 199.8 | 558.1 | 583.1 |
Gross profit for reporting segments | $ 67.6 | $ 80.7 | $ 208.4 | $ 245 |
Revenue and Segment Informati_5
Revenue and Segment Information - Reconciliations Of Segment Gross Profit And Segment Operating Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 27, 2019 | Sep. 28, 2018 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Gross profit for reporting segments | $ 502 | $ 602.9 | $ 1,532.3 | $ 1,699.6 |
Consolidated gross profit | 475.2 | 596.6 | 1,487.9 | 1,669 |
Operating Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Gross profit for reporting segments | 502 | 602.9 | 1,532.3 | 1,699.6 |
Less: unallocated manufacturing costs | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Less: Unallocated manufacturing costs | $ (26.8) | $ (6.3) | $ (44.4) | $ (30.6) |
Revenue and Segment Informati_6
Revenue and Segment Information - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 27, 2019 | Sep. 28, 2018 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 1,381.8 | $ 1,541.7 | $ 4,116.1 | $ 4,375.2 |
Distributor | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 793.1 | 967.7 | 2,338.3 | 2,644.1 |
OEM | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 496.6 | 476.8 | 1,505.1 | 1,455.8 |
Electronic Manufacturing Service Provider | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 92.1 | 97.2 | 272.7 | 275.3 |
SINGAPORE | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 446.8 | 573.1 | 1,251.9 | 1,439.8 |
HONG KONG | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 356.9 | 361 | 1,043.3 | 1,126.8 |
UNITED KINGDOM | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 223 | 241.6 | 699.3 | 717.6 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 193.3 | 221.6 | 630.4 | 638.3 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 161.8 | 144.4 | 491.2 | 452.7 |
PSG | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 687.9 | 810.2 | 2,093 | 2,251 |
PSG | Distributor | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 430.6 | 565.1 | 1,287.8 | 1,499.7 |
PSG | OEM | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 206.9 | 198.6 | 666.4 | 616.5 |
PSG | Electronic Manufacturing Service Provider | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 50.4 | 46.5 | 138.8 | 134.8 |
PSG | SINGAPORE | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 207.7 | 332.8 | 646 | 805.3 |
PSG | HONG KONG | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 216.2 | 201.9 | 623 | 636.5 |
PSG | UNITED KINGDOM | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 111.4 | 124.9 | 355.2 | 368 |
PSG | United States | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 92.2 | 102.3 | 280.7 | 295 |
PSG | Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 60.4 | 48.3 | 188.1 | 146.2 |
ASG | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 508.9 | 531.7 | 1,465 | 1,541.1 |
ASG | Distributor | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 248.8 | 280.4 | 713.7 | 792 |
ASG | OEM | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 228.2 | 213.1 | 647 | 640.7 |
ASG | Electronic Manufacturing Service Provider | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 31.9 | 38.2 | 104.3 | 108.4 |
ASG | SINGAPORE | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 195.7 | 191.7 | 479.2 | 510.7 |
ASG | HONG KONG | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 105.8 | 124.1 | 326.1 | 379.7 |
ASG | UNITED KINGDOM | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 77.3 | 81.9 | 233.2 | 243.4 |
ASG | United States | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 73.4 | 87.8 | 259 | 251.9 |
ASG | Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 56.7 | 46.2 | 167.5 | 155.4 |
ISG | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 185 | 199.8 | 558.1 | 583.1 |
ISG | Distributor | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 113.7 | 122.2 | 336.8 | 352.4 |
ISG | OEM | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 61.5 | 65.1 | 191.7 | 198.6 |
ISG | Electronic Manufacturing Service Provider | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 9.8 | 12.5 | 29.6 | 32.1 |
ISG | SINGAPORE | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 43.4 | 48.6 | 126.7 | 123.8 |
ISG | HONG KONG | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 34.9 | 35 | 94.2 | 110.6 |
ISG | UNITED KINGDOM | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 34.3 | 34.8 | 110.9 | 106.2 |
ISG | United States | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 27.7 | 31.5 | 90.7 | 91.4 |
ISG | Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 44.7 | $ 49.9 | $ 135.6 | $ 151.1 |
Revenue and Segment Informati_7
Revenue and Segment Information - Summary of Property, Plant and Equipment by Geographic Location (Details) - USD ($) $ in Millions | Sep. 27, 2019 | Dec. 31, 2018 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | $ 2,602.1 | $ 2,549.6 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 608.3 | 616.9 |
Korea | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 460.7 | 383.1 |
Philippines | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 443.6 | 474.5 |
China | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 244.1 | 248.4 |
Czech Republic | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 231.3 | 194.5 |
Japan | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 220.7 | 205 |
Malaysia | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 212.6 | 229.1 |
Other | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | $ 180.8 | $ 198.1 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Details) - USD ($) $ in Millions | Sep. 27, 2019 | Jan. 01, 2019 |
Accounting Changes and Error Corrections [Abstract] | ||
Operating lease assets | $ 115.6 | $ 112.3 |
Deferred rent, reclassified as right-of-use asset | 5.1 | |
Lease liabilities | $ 118.6 | $ 117.4 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 19, 2019 | Jun. 19, 2019 | Jun. 12, 2019 | Apr. 22, 2019 | Sep. 27, 2019 | Jun. 28, 2019 | Jun. 28, 2019 | Sep. 27, 2019 | Dec. 31, 2018 | Sep. 28, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||||||||||
Acquired intangible assets | $ 110.9 | $ 110.9 | |||||||||
Developed technology | $ 58.3 | $ 58.3 | |||||||||
Discount rate (as a percent) | 12.00% | 12.00% | |||||||||
Goodwill | $ 1,659.2 | $ 1,659.2 | $ 932.5 | ||||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Net assets acquired/purchase price | $ 1,039.3 | ||||||||||
Net Cash | $ 928.7 | $ 928.7 | $ 1,087.1 | $ 968.5 | $ 966.6 | ||||||
Legal Fees | $ 17.5 | $ 6.6 | |||||||||
Business Combination, Consideration Cash | 21 | $ 1,000.4 | |||||||||
Business Combination, Consideration Transferred, Other | 17.9 | ||||||||||
Proceeds from Lines of Credit | $ 900 | ||||||||||
Business Combination, Separately Recognized Transactions, Revenues and Gains Recognized | 44.7 | ||||||||||
Business Combination, Separately Recognized Transactions, Net Gains and Losses | (51.3) | ||||||||||
GFUS | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Net assets acquired/purchase price | $ 400 | ||||||||||
Down Payment | 70 | ||||||||||
Contingent Consideration Liability | 330 | ||||||||||
License Fees Paid | 30 | ||||||||||
Business Combination, Separately Recognized Transactions, Additional Disclosures, Acquisition Cost Expensed | 4 | ||||||||||
Legal Fees | $ 5 | ||||||||||
Quantenna | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Goodwill | $ 726.7 | $ 620 | $ 620 | 726.7 | |||||||
Net assets acquired/purchase price | $ 1,039.3 | $ 1,039.3 | |||||||||
Developed technology | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Useful life (in years) | 10 years | ||||||||||
Intangible Assets | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Useful life (in years) | 10 years |
Acquisitions - Assets Acquired
Acquisitions - Assets Acquired and Liabilities Assumed (Details) - USD ($) | Jun. 19, 2019 | Sep. 27, 2019 | Jun. 28, 2019 | Sep. 27, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 1,659,200,000 | $ 1,659,200,000 | $ 932,500,000 | ||
Net assets acquired/purchase price | $ 1,039,300,000 | ||||
Quantenna | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | 133,400,000 | $ 133,400,000 | 133,400,000 | ||
Receivables | 22,200,000 | 21,200,000 | 22,200,000 | ||
Inventories | 41,800,000 | 45,000,000 | 41,800,000 | ||
Other current assets | 4,300,000 | 4,300,000 | 4,300,000 | ||
Property, plant and equipment | 16,900,000 | 16,300,000 | 16,900,000 | ||
Goodwill | 726,700,000 | 620,000,000 | 726,700,000 | ||
Intangible assets (excluding IPRD) | 87,100,000 | 180,900,000 | 87,100,000 | ||
IPRD | 23,800,000 | 55,500,000 | 23,800,000 | ||
Deferred tax assets | 29,200,000 | 3,300,000 | 29,200,000 | ||
Other non-current assets | 12,700,000 | 10,500,000 | 12,700,000 | ||
Total assets acquired | 1,098,100,000 | 1,090,400,000 | 1,098,100,000 | ||
Accounts payable | 22,600,000 | 22,600,000 | 22,600,000 | ||
Other current liabilities | 17,500,000 | 16,800,000 | 17,500,000 | ||
Deferred tax liabilities | 3,300,000 | 3,900,000 | 3,300,000 | ||
Other non-current liabilities | 15,400,000 | 7,800,000 | 15,400,000 | ||
Total liabilities assumed | 58,800,000 | 51,100,000 | 58,800,000 | ||
Net assets acquired/purchase price | $ 1,039,300,000 | $ 1,039,300,000 | |||
Measurement Period Adjustments | |||||
Receivables | 1,000,000 | ||||
Inventories | (3,200,000) | ||||
Property, plant and equipment | 600,000 | ||||
Goodwill | 106,700,000 | ||||
Intangible assets (excluding IPRD) | (93,800,000) | ||||
IPRD | (31,700,000) | ||||
Deferred tax assets | 25,900,000 | ||||
Other non-current assets | 2,200,000 | ||||
Total assets acquired | 7,700,000 | ||||
Other current liabilities | 700,000 | ||||
Deferred tax liabilities | (600,000) | ||||
Other non-current liabilities | 7,600,000 | ||||
Total liabilities assumed | 7,700,000 | ||||
Net assets acquired/purchase price | $ 0 |
Acquisitions - Pro Forma Inform
Acquisitions - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 27, 2019 | Sep. 28, 2018 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Revenue | $ 1,381.8 | $ 1,601 | $ 4,211.4 | $ 4,533.1 |
Net income | (43.1) | 160.1 | 160.9 | 407.8 |
ON Semiconductor Corporation | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income | $ (43.8) | $ 159.9 | $ 159.1 | $ 405.7 |
Basic (in USD per share) | $ (0.11) | $ 0.38 | $ 0.39 | $ 0.95 |
Diluted (in USD per share) | $ (0.11) | $ 0.37 | $ 0.38 | $ 0.92 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Goodwill by Reportable Segment (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 27, 2019 | Dec. 31, 2018 | |
Goodwill | ||
Goodwill | $ 2,110 | $ 1,383.3 |
Accumulated Impairment Losses | (450.8) | (450.8) |
Carrying Value | 1,659.2 | 932.5 |
Addition due to business combination | 726.7 | |
PSG | ||
Goodwill | ||
Goodwill | 432.2 | 432.2 |
Accumulated Impairment Losses | (31.9) | (31.9) |
Carrying Value | 400.3 | 400.3 |
ASG | ||
Goodwill | ||
Goodwill | 1,563.4 | 836.7 |
Accumulated Impairment Losses | (418.9) | (418.9) |
Carrying Value | 1,144.5 | 417.8 |
ISG | ||
Goodwill | ||
Goodwill | 114.4 | 114.4 |
Accumulated Impairment Losses | 0 | 0 |
Carrying Value | $ 114.4 | $ 114.4 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 27, 2019 | Sep. 28, 2018 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | $ 1,542 | $ 1,542 | $ 1,401.1 | ||
Amortization of acquisition-related intangible assets | 29.9 | $ 28 | 83.1 | $ 83.3 | |
Intangible assets, net | 622.6 | 622.6 | 566.4 | ||
IPRD | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible impairment | 1.6 | ||||
Finite-Lived Intangible Assets, Gross | 83.4 | 83.4 | 64.1 | ||
Intangible assets, net | $ 59.3 | $ 59.3 | $ 41.6 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Summary of Intangible Assets, Net (Details) - USD ($) $ in Millions | Sep. 27, 2019 | Dec. 31, 2018 |
Intangible Assets, Net | ||
Original Cost | $ 1,542 | $ 1,401.1 |
Accumulated Amortization | (857.4) | (774.3) |
Accumulated Impairment Losses | (62) | (60.4) |
Carrying Value | 622.6 | 566.4 |
Customer relationships | ||
Intangible Assets, Net | ||
Original Cost | 585.2 | 556.7 |
Accumulated Amortization | (379.2) | (359.1) |
Accumulated Impairment Losses | (20.1) | (20.1) |
Carrying Value | 185.9 | 177.5 |
Developed technology | ||
Intangible Assets, Net | ||
Original Cost | 760.8 | 698 |
Accumulated Amortization | (416.6) | (356.4) |
Accumulated Impairment Losses | (2.6) | (2.6) |
Carrying Value | 341.6 | 339 |
IPRD | ||
Intangible Assets, Net | ||
Original Cost | 83.4 | 64.1 |
Accumulated Amortization | 0 | 0 |
Accumulated Impairment Losses | (24.1) | (22.5) |
Carrying Value | 59.3 | 41.6 |
Licenses | ||
Intangible Assets, Net | ||
Original Cost | 30 | |
Accumulated Amortization | 0 | |
Accumulated Impairment Losses | 0 | |
Carrying Value | 30 | |
Other intangibles | ||
Intangible Assets, Net | ||
Original Cost | 82.6 | 82.3 |
Accumulated Amortization | (61.6) | (58.8) |
Accumulated Impairment Losses | (15.2) | (15.2) |
Carrying Value | $ 5.8 | $ 8.3 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets - Summary of Amortization Expense (Details) $ in Millions | Sep. 27, 2019USD ($) |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule | |
Remainder of 2019 | $ 31.6 |
2020 | 111.9 |
2021 | 93 |
2022 | 77.9 |
2023 | 61.9 |
Thereafter | 187 |
Total | $ 563.3 |
Restructuring, Asset Impairme_3
Restructuring, Asset Impairments and Other, Net - Schedule of Activity Included in Restructuring, Asset Impairments, and Other, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 27, 2019 | Sep. 28, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring | $ 3.2 | $ 24.8 | ||
Non-cash asset impairment charges | 0 | 2.9 | $ 4.6 | |
Other | 1.2 | 0.4 | ||
Restructuring, asset impairments and other, net | 4.4 | $ 4.4 | 28.1 | $ 8 |
Impairment of right-of-use assets | 2.5 | |||
Quantenna | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring | 1.8 | 15.6 | ||
Non-cash asset impairment charges | 0 | 0 | ||
Other | 0 | 0 | ||
Restructuring, asset impairments and other, net | 1.8 | 15.6 | ||
Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring | 0.8 | 0.8 | ||
Non-cash asset impairment charges | 0 | 2.9 | ||
Other | 1.2 | 0.4 | ||
Restructuring, asset impairments and other, net | 2 | 4.1 | ||
General workforce reduction | General workforce reduction | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring | 0.6 | 8.4 | ||
Non-cash asset impairment charges | 0 | 0 | ||
Other | 0 | 0 | ||
Restructuring, asset impairments and other, net | $ 0.6 | $ 8.4 |
Restructuring, Asset Impairme_4
Restructuring, Asset Impairments and Other, Net - Summary of Changes in Accrued Restructuring Charges (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 27, 2019USD ($) | Sep. 27, 2019USD ($)employee | |
Restructuring Reserve [Roll Forward] | ||
Balance at Beginning of Period | $ 0.5 | |
Charges | 24.8 | |
Usage | (22.7) | |
Balance at End of Period | $ 2.6 | 2.6 |
Estimated employee separation charges | ||
Restructuring Reserve [Roll Forward] | ||
Balance at Beginning of Period | 0.3 | |
Charges | 24.8 | |
Usage | (22.6) | |
Balance at End of Period | 2.5 | 2.5 |
Other | ||
Restructuring Reserve [Roll Forward] | ||
Balance at Beginning of Period | 0.2 | |
Charges | 0 | |
Usage | (0.1) | |
Balance at End of Period | 0.1 | 0.1 |
Cost Reduction Plan | Employee severance | ||
Restructuring Reserve [Roll Forward] | ||
Charges | 0.6 | 8.4 |
Balance at End of Period | $ 0.3 | $ 0.3 |
Expected Number of Positions Eliminated | employee | 143 | |
Number of Positions Eliminated | employee | 139 |
Restructuring, Asset Impairme_5
Restructuring, Asset Impairments and Other, Net - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | |
Sep. 27, 2019USD ($)employee | Jun. 28, 2019employee | Sep. 27, 2019USD ($)employee | Dec. 31, 2018USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||
Charges | $ 24.8 | |||
Accrued restructuring expense | $ 2.6 | $ 2.6 | $ 0.5 | |
Post-Quantenna Acquisition Restructuring | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 15.6 | |||
Employee severance | Cost Reduction Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expected Number of Positions Eliminated | employee | 143 | |||
Number of Positions Eliminated | employee | 139 | |||
Charges | 0.6 | $ 8.4 | ||
Accrued restructuring expense | $ 0.3 | 0.3 | ||
Employee severance | Post-Quantenna Acquisition Restructuring | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Number of Positions Eliminated | employee | 9 | 8 | ||
Accrued restructuring expense | $ 1.1 | $ 1.1 |
Balance Sheet Information - Sup
Balance Sheet Information - Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 27, 2019 | Sep. 28, 2018 | Dec. 31, 2018 | |
Inventories: | |||||
Raw materials | $ 145 | $ 145 | $ 137.3 | ||
Work in process | 782.4 | 782.4 | 760.7 | ||
Finished goods | 313.3 | 313.3 | 327.2 | ||
Inventories | 1,240.7 | 1,240.7 | 1,225.2 | ||
Property, plant and equipment, net: | |||||
Property, plant and equipment, net | 2,602.1 | 2,602.1 | 2,549.6 | ||
Accrued expenses and other current liabilities: | |||||
Accrued expenses and other current liabilities: | 730.9 | 730.9 | $ 659.1 | ||
Litigation settlement (Note 11) | $ 169.5 | $ 0 | $ 169.5 | $ 0 |
Balance Sheet Information - Nar
Balance Sheet Information - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Mar. 29, 2019 | Sep. 27, 2019 | Dec. 31, 2018 | Jan. 01, 2019 | |
Balance Sheet Related Disclosures [Abstract] | ||||
Accrued pension liability | $ 116 | $ 115.9 | ||
Current portion accrued pension liability | 0.3 | 0.2 | ||
Operating lease assets | $ 115.6 | $ 112.3 | ||
Remaining Lease Term (in years) | 6 years 4 months 24 days | |||
Discount Rate (as a percent) | 5.40% | |||
Expected sublease income | $ 12.3 | $ 12.3 | $ 12.3 | |
Value of Underlying Asset | $ 2.3 |
Balance Sheet Information - Pen
Balance Sheet Information - Pension Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 27, 2019 | Sep. 28, 2018 | |
Balance Sheet Related Disclosures [Abstract] | ||||
Service Cost | $ 2.4 | $ 2.4 | $ 7.1 | $ 7.3 |
Interest Cost | 1.3 | 1.2 | 3.8 | 3.6 |
Expected Return (Loss) on Plan Assets | (1.5) | (1.5) | (4.5) | (4.6) |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Total | $ 2.2 | $ 2.1 | $ 6.4 | $ 6.3 |
Balance Sheet Information - Lea
Balance Sheet Information - Lease expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 27, 2019 | Sep. 27, 2019 | Jan. 01, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |||
Operating lease | $ 9.2 | $ 25.8 | |
Variable lease | 1 | 3.1 | |
Short-term lease | 0.6 | 1.9 | |
Total lease expense | 10.8 | 30.8 | |
Accrued expenses and other current liabilities | 27.6 | 27.6 | |
Other long-term liabilities | 91 | 91 | |
Accrued Liabilities and Other Liabilities | $ 118.6 | $ 118.6 | $ 117.4 |
Balance Sheet Information - Sum
Balance Sheet Information - Summary of Operating Leases Future Minimum Payments Receivable (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Mar. 29, 2019 | Sep. 27, 2019 | Dec. 31, 2018 | Jan. 01, 2019 | |
Maturities of the operating lease liabilities | ||||
Remainder of 2019 | $ 7.9 | |||
2020 | 31.3 | |||
2021 | 24.7 | |||
2022 | 20.4 | |||
2023 | 14.7 | |||
Thereafter | 50.2 | |||
Total lease payments | 149.2 | |||
Interest | (30.6) | |||
Total lease payments net interest | 118.6 | $ 117.4 | ||
Non-cancelable operating leases | ||||
2019 | $ 36.8 | |||
2020 | 27.6 | |||
2021 | 21.9 | |||
2022 | 16.8 | |||
2023 | 12.3 | |||
Thereafter | 45.4 | |||
Total | 160.8 | |||
Expected sublease income | $ 12.3 | $ 12.3 | $ 12.3 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Millions | Sep. 19, 2019 | Jun. 12, 2019 | Sep. 27, 2019 | Sep. 27, 2019 | Sep. 28, 2018 | Aug. 15, 2019 | Dec. 31, 2018 | Jun. 08, 2015 |
Debt Instrument [Line Items] | ||||||||
Carrying Amount | $ 3,764.6 | $ 3,764.6 | $ 2,939 | |||||
Debt discount | (113.1) | (113.1) | (139.4) | |||||
Debt issuance costs | (36.1) | (36.1) | (33.5) | |||||
Net long-term debt, including current maturities | 3,615.4 | 3,615.4 | 2,766.1 | |||||
Less: Current maturities | (736.6) | (736.6) | (138.5) | |||||
Net long-term debt | 2,878.8 | 2,878.8 | 2,627.6 | |||||
Debt discount | 113.1 | 113.1 | 139.4 | |||||
Debt issuance costs | 36.1 | 36.1 | 33.5 | |||||
Maximum Borrowing Capacity | $ 1,635 | $ 1,900 | $ 1,970 | |||||
Legal Fees | 17.5 | $ 6.6 | ||||||
Gains (Losses) on Restructuring of Debt | (5.8) | 0 | $ 1.1 | |||||
Debt, Current | 660.4 | 660.4 | ||||||
Debt and Lease Obligation | 12.2 | 12.2 | ||||||
Revolving Credit Facility due 2024, interest payable monthly at 3.54% and 3.77%, respectively | ||||||||
Debt Instrument [Line Items] | ||||||||
Carrying Amount | $ 800 | $ 800 | $ 400 | |||||
Debt instrument, interest rate (as a percent) | 3.54% | 3.54% | 3.77% | |||||
Term Loan “B” Facility due 2026, interest payable monthly at 4.04% and 4.27%, respectively | ||||||||
Debt Instrument [Line Items] | ||||||||
Carrying Amount | $ 1,635 | $ 1,635 | $ 1,134.5 | |||||
Debt discount | $ (10.8) | $ (10.8) | $ (9.3) | |||||
Debt instrument, interest rate (as a percent) | 4.04% | 4.04% | 4.27% | |||||
Debt discount | $ 10.8 | $ 10.8 | $ 9.3 | |||||
Other long-term debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt and Lease Obligation | 64.6 | 64.6 | 139.5 | |||||
1.00% Notes | Term Loan “B” Facility due 2026, interest payable monthly at 4.04% and 4.27%, respectively | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt issuance costs | (25.2) | (25.2) | (19.2) | |||||
Debt issuance costs | 25.2 | 25.2 | 19.2 | |||||
Line of Credit Facility, Increase (Decrease), Net | 500.5 | |||||||
Repayments of Lines of Credit | $ 500 | |||||||
Increase in borrowing capacity, revolving credit facility | $ 70 | |||||||
1.00% Notes | Convertible Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Carrying Amount | 690 | 690 | 690 | |||||
Debt discount | (26) | (26) | (41.6) | |||||
Debt issuance costs | $ (3.6) | $ (3.6) | (5.8) | |||||
Debt instrument, interest rate (as a percent) | 1.00% | 1.00% | 1.00% | |||||
Debt discount | $ 26 | $ 26 | 41.6 | |||||
Debt issuance costs | 3.6 | 3.6 | 5.8 | |||||
1.625% Notes | Convertible Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Carrying Amount | 575 | 575 | 575 | |||||
Debt discount | (76.3) | (76.3) | (88.5) | |||||
Debt issuance costs | $ (7.3) | $ (7.3) | (8.5) | |||||
Debt instrument, interest rate (as a percent) | 1.625% | 1.625% | ||||||
Debt discount | $ 76.3 | $ 76.3 | 88.5 | |||||
Debt issuance costs | $ 7.3 | $ 7.3 | $ 8.5 | |||||
Minimum | Other long-term debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate (as a percent) | 1.00% | 1.00% | ||||||
Maximum | Other long-term debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate (as a percent) | 4.00% | 4.00% |
Long-Term Debt Annual Maturitie
Long-Term Debt Annual Maturities Relating To Long-Term Debt (Details) $ in Millions | Sep. 27, 2019USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
Remainder of 2019 | $ 14.5 |
2020 | 760.4 |
2021 | 16.4 |
2022 | 16.4 |
2023 | 591.4 |
Thereafter | 2,365.5 |
Total | $ 3,764.6 |
Long-Term Debt Narrative (Detai
Long-Term Debt Narrative (Details) - USD ($) $ in Millions | Sep. 19, 2019 | Jun. 12, 2019 | Sep. 27, 2019 | Sep. 28, 2018 | Sep. 27, 2019 | Sep. 28, 2018 | Aug. 15, 2019 | Dec. 31, 2018 | Jun. 08, 2015 |
Debt Instrument [Line Items] | |||||||||
Debt issuance costs | $ 36.1 | $ 36.1 | $ 33.5 | ||||||
Long-term debt | 3,764.6 | 3,764.6 | |||||||
Debt, principal balance outstanding | 3,764.6 | 3,764.6 | 2,939 | ||||||
Maximum Borrowing Capacity | $ 1,635 | $ 1,900 | $ 1,970 | ||||||
Legal Fees | $ 17.5 | 6.6 | |||||||
Loss on debt refinancing and prepayment | $ 0.4 | (5.8) | $ (0.6) | (6.2) | $ (4.6) | ||||
1.00% Notes | Convertible Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt issuance costs | $ 3.6 | $ 3.6 | 5.8 | ||||||
Debt instrument, interest rate (as a percent) | 1.00% | 1.00% | 1.00% | ||||||
Debt, principal balance outstanding | $ 690 | $ 690 | $ 690 | ||||||
One Percent Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt, principal balance outstanding | $ 690 |
Earnings Per Share and Equity_3
Earnings Per Share and Equity - Summary of earnings per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 27, 2019 | Sep. 28, 2018 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to ON Semiconductor Corporation | $ (60.7) | $ 166.9 | $ 155.2 | $ 461.8 |
Basic weighted average common shares outstanding (in shares) | 410.4 | 425.5 | 411 | 426.1 |
Dilutive effect of share-based awards (in shares) | 0 | 3.9 | 1.7 | 4.7 |
Dilutive effect of convertible notes (in shares) | 0 | 5.9 | 2.6 | 10.4 |
Diluted weighted average common shares outstanding (in shares) | 410.4 | 435.3 | 415.3 | 441.2 |
Net income (loss) per common share attributable to ON Semiconductor Corporation: | ||||
Basic (in dollars per share) | $ (0.15) | $ 0.39 | $ 0.38 | $ 1.08 |
Diluted (in dollars per share) | $ (0.15) | $ 0.38 | $ 0.37 | $ 1.05 |
Earnings Per Share and Equity_4
Earnings Per Share and Equity - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 27, 2019 | Sep. 28, 2018 | Mar. 29, 2019 | Dec. 31, 2018 | Jun. 08, 2015 | |
Dividends Payable [Line Items] | |||||||
Anti-dilutive shares | 2,100,000 | 100,000 | 2,100,000 | 200,000 | |||
Aggregate purchase price | $ 139,000,000 | $ 115,000,000 | |||||
Common stock repurchased, amount | $ 13,200,000 | $ 75,000,000 | 139,000,000 | 115,000,000 | |||
Payments of tax withholding for restricted shares | $ 4,400,000 | $ 9,300,000 | $ 31,600,000 | $ 29,200,000 | |||
Common stock withheld underlying restricted stock units (less than) | 200,000 | 400,000 | 1,500,000 | 1,200,000 | |||
Treasury stock, shares, reissued or retired during period | 0 | ||||||
Non-controlling interest | $ 24,300,000 | $ 24,300,000 | $ 22,500,000 | $ 22,500,000 | |||
Non-controlling interest share of earnings | 700,000 | $ 200,000 | 1,800,000 | $ 2,100,000 | |||
Comprehensive (loss) income | $ (62,200,000) | 166,500,000 | $ 139,300,000 | 469,000,000 | |||
Convertible Debt | 1.00% Notes | |||||||
Dividends Payable [Line Items] | |||||||
Debt instrument, interest rate (as a percent) | 1.00% | 1.00% | 1.00% | ||||
Convertible Debt | 1.625% Notes | |||||||
Dividends Payable [Line Items] | |||||||
Debt instrument, interest rate (as a percent) | 1.625% | 1.625% | |||||
Leshan | |||||||
Dividends Payable [Line Items] | |||||||
Percentage of ownership on domestic subsidiaries | 80.00% | 80.00% | |||||
Share Repurchase Program | |||||||
Dividends Payable [Line Items] | |||||||
Stock repurchase program, authorized amount | $ 1,500,000,000 | $ 1,500,000,000 | |||||
Stock repurchase program period | 4 years | ||||||
Aggregate purchase price | 13,100,000 | 75,000,000 | $ 138,900,000 | 115,000,000 | |||
Remaining authorized amount available for repurchase | 1,361,100,000 | 1,361,100,000 | |||||
Non-Controlling Interest in Consolidated Subsidiary | |||||||
Dividends Payable [Line Items] | |||||||
Comprehensive (loss) income | $ 700,000 | $ 200,000 | $ 1,800,000 | $ 2,100,000 |
Earnings Per Share and Equity_5
Earnings Per Share and Equity - Schedule of Share Repurchase Program (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 27, 2019 | Sep. 28, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate purchase price | $ 139 | $ 115 | ||
Fees, commissions and other expenses | $ 0.1 | 0.1 | ||
Total cash used for share repurchases | $ 13.2 | $ 139 | ||
Share Repurchase Program | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of repurchased shares | 0.8 | 7.8 | ||
Aggregate purchase price | $ 13.1 | $ 75 | $ 138.9 | $ 115 |
Weighted-average purchase price per share ( in USD per share ) | $ 17.18 | $ 17.89 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary Of Share-Based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 27, 2019 | Sep. 28, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 14.7 | $ 17.9 | $ 61.7 | $ 59.4 |
Related income tax benefits at federal rate of 21% | (3.1) | (3.8) | (13) | (12.5) |
Share-based compensation expense, net of taxes | 11.6 | 14.1 | 48.7 | 46.9 |
Cost of revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 2.3 | 1.7 | 7.7 | 5.1 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 3.4 | 3.4 | 12.4 | 10.6 |
Selling and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 2.7 | 3.3 | 11.1 | 10.5 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 6.3 | $ 9.5 | $ 30.5 | $ 33.2 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2019 | Sep. 27, 2019 | Sep. 28, 2018 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Cash received from exercise of stock options | $ 1.3 | $ 4.4 | ||
Amended And Restated Stock Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate of common stock available for grant | 26.4 | 26.4 | 33.7 | |
Employee Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total intrinsic value of stock options exercised | $ 0.7 | $ 3.1 | ||
Cash received from exercise of stock options | $ 0.4 | $ 1.3 | ||
Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate of common stock available for grant | 5.6 | 5.6 | 6.5 | |
Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized share-based compensation expense on non-vested stock options | $ 77.6 | $ 77.6 | ||
Period For Recognition (in years) | 1 year 4 months 24 days | |||
Options pre-vesting forfeitures estimated | 5.00% | |||
Maximum award vesting period (in years) | 3 years |
Share-Based Compensation - Su_2
Share-Based Compensation - Summary Of Restricted Stock Units Transactions (Details) - Restricted Stock Units | 9 Months Ended |
Sep. 27, 2019$ / sharesshares | |
Number of Shares | |
Nonvested shares restricted stock units, beginning (in shares) | shares | 8,600,000 |
Restricted stock units granted (in shares) | shares | 4,700,000 |
Restricted stock units achieved (in shares) | shares | 200,000 |
Restricted stock units released (in shares) | shares | (4,400,000) |
Restricted stock units forfeited (in shares) | shares | (400,000) |
Nonvested shares restricted stock units, ending (in shares) | shares | 8,700,000 |
Weighted-Average Grant Date Fair Value Per Share | |
Weighted Average Grant Date Fair Value, Nonvested, beginning (in dollars per share) | $ / shares | $ 16.59 |
Weighted Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares | 21.69 |
Weighted Average Grant Date Fair Value, Achieved (in dollars per share) | $ / shares | 24.46 |
Weighted-Average Grant Date Fair Value, Released (in dollars per share) | $ / shares | 14.28 |
Weighted Average Grant Date Fair Value, Forfeited (in dollars per share) | $ / shares | 19.61 |
Weighted Average Grant Date Fair Value, Nonvested, ending (in dollars per share) | $ / shares | $ 20.56 |
Commitments and Contingencies_2
Commitments and Contingencies - Narrative (Details) $ in Millions | Oct. 22, 2019USD ($) | Jul. 23, 2019USD ($) | Jul. 22, 2019USD ($) | Nov. 09, 2018USD ($) | Mar. 09, 2017patent | Aug. 11, 2016patent | Jan. 31, 2019patent | Nov. 30, 2018USD ($) | Nov. 30, 2017patent | Dec. 31, 2016claim | Nov. 30, 2016patent | Dec. 31, 2015USD ($) | May 31, 2015USD ($) | Nov. 30, 2014USD ($) | Mar. 31, 2013USD ($) | May 31, 2012patent | Apr. 30, 2012claim | Jan. 31, 2011USD ($) | Dec. 31, 2008USD ($) | Mar. 29, 2019patent | Apr. 01, 2016patent | Apr. 03, 2015USD ($)patent | Mar. 31, 2010patent | Mar. 31, 2009claim | Sep. 27, 2019USD ($)reviewclaimappeals | Dec. 31, 2015patent | Dec. 31, 2006USD ($) |
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Outstanding guarantees and letters of credit | $ | $ 11.5 | ||||||||||||||||||||||||||
Number of patents requiring declaratory judgment | claim | 2 | ||||||||||||||||||||||||||
Patents reviewed and found unpatentable | review | 2 | ||||||||||||||||||||||||||
Appeals filed | appeals | 1 | ||||||||||||||||||||||||||
Debt and Lease Obligation | $ | $ 12.2 | ||||||||||||||||||||||||||
Revolving Credit Facility | Line of Credit | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Current borrowing capacity | $ | 15 | ||||||||||||||||||||||||||
Letter of Credit | Line of Credit | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Credit commitment outstanding | $ | $ 1 | ||||||||||||||||||||||||||
Power Integrations, Inc. | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of outstanding proceedings | claim | 11 | ||||||||||||||||||||||||||
Patents reviewed and found unpatentable | review | 1 | ||||||||||||||||||||||||||
Power Integrations, Northern District of California, 2016 | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of patents allegedly infringed upon | patent | 6 | ||||||||||||||||||||||||||
Number of patents requiring declaratory judgment | patent | 2 | ||||||||||||||||||||||||||
Power Integrations, Arizona, 2016 | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of patents allegedly infringed upon | patent | 6 | ||||||||||||||||||||||||||
Number of patents requiring declaratory judgment | patent | 3 | ||||||||||||||||||||||||||
Power Integrations, Delaware, 2017 | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of patents allegedly infringed upon | patent | 7 | ||||||||||||||||||||||||||
Patents found not infringed upon | patent | 2 | ||||||||||||||||||||||||||
Patent claims dropped | patent | 1 | 2 | |||||||||||||||||||||||||
Number of patents allegedly infringed upon | patent | 6 | 4 | |||||||||||||||||||||||||
Power Integrations, November 2017 | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of patents allegedly infringed upon | patent | 3 | ||||||||||||||||||||||||||
Power Integrations, Inc., USPTO | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of patents found infringed upon | claim | 7 | ||||||||||||||||||||||||||
Patents reviewed and found unpatentable | review | 2 | ||||||||||||||||||||||||||
Inter party review | review | 6 | ||||||||||||||||||||||||||
Admin Power Integrations, Inc. [Member] | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of outstanding proceedings | claim | 8 | ||||||||||||||||||||||||||
Fairchild | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Maximum remediation cost recoveries receivable | $ | $ 150 | ||||||||||||||||||||||||||
Fairchild | Power Integrations, Inc. | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of outstanding proceedings | claim | 5 | ||||||||||||||||||||||||||
Fairchild | Power Integrations, Delaware, 2004 | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Amount awarded by judge | $ | $ 12.2 | $ 6.1 | $ 34 | ||||||||||||||||||||||||
Number of patents allegedly infringed upon | claim | 2 | ||||||||||||||||||||||||||
Fairchild | Power Integrations, Delaware, 2004 | Maximum | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Value of sales and imports of affected products | $ | $ 0.8 | ||||||||||||||||||||||||||
Fairchild | Power Integrations, Delaware, 2008 | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Amount awarded by judge | $ | $ 32 | $ 7.1 | $ 24.3 | ||||||||||||||||||||||||
Number of patents allegedly infringed upon | claim | 4 | ||||||||||||||||||||||||||
Number of patents found infringed upon | claim | 1 | ||||||||||||||||||||||||||
Number of patents infringed upon | claim | 2 | ||||||||||||||||||||||||||
Number of patents found not infringed upon | claim | 1 | ||||||||||||||||||||||||||
Fairchild | Power Integrations, Northern District of California, 2009 | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Amount awarded by judge | $ | $ 139.8 | $ 105 | |||||||||||||||||||||||||
Number of patents allegedly infringed upon | patent | 3 | ||||||||||||||||||||||||||
Number of patents allegedly infringed upon | patent | 2 | ||||||||||||||||||||||||||
Number of patents infringed upon | patent | 2 | ||||||||||||||||||||||||||
Amount vacated | $ | $ 105 | ||||||||||||||||||||||||||
Fairchild | Prejudgement | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Amount awarded by judge | $ | $ 7 | ||||||||||||||||||||||||||
Fairchild | Power Integrations, Delaware, 2012 | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Amount awarded by judge | $ | $ 0.7 | ||||||||||||||||||||||||||
Number of patents allegedly infringed upon | patent | 5 | ||||||||||||||||||||||||||
Number of patents found not infringed upon | patent | 1 | ||||||||||||||||||||||||||
Amount awarded from other party | $ | $ 2.4 | ||||||||||||||||||||||||||
Fairchild | Power Integrations, Delaware, 2012, 2 | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Amount awarded by judge | $ | $ 0.1 | ||||||||||||||||||||||||||
Fairchild | Power Integrations, Northern District of California, 2015 | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of patents allegedly infringed upon | patent | 2 | ||||||||||||||||||||||||||
Number of patents allegedly infringed upon | patent | 4 | ||||||||||||||||||||||||||
Subsequent Event | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Payment for legal settlement | $ | $ 175 | ||||||||||||||||||||||||||
Subsequent Event | Power Integrations, Inc. | |||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Payment for legal settlement | $ | $ 175 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Fair Value of Assets and Liabilities (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Sep. 27, 2019 | Dec. 31, 2018 |
Level 1 | Demand and time deposits | ||
Assets: | ||
Cash and cash equivalents | $ 26 | $ 21.2 |
Level 1 | Money market funds | ||
Assets: | ||
Cash and cash equivalents | 0.4 | 0.2 |
Level 2 | Demand and time deposits | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Level 2 | Money market funds | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Level 3 | Demand and time deposits | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Level 3 | Money market funds | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Estimate of Fair Value | Demand and time deposits | ||
Assets: | ||
Cash and cash equivalents | 26 | 21.2 |
Estimate of Fair Value | Money market funds | ||
Assets: | ||
Cash and cash equivalents | $ 0.4 | $ 0.2 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Fair Value, by Balance Sheet Grouping (Details) - USD ($) $ in Millions | Sep. 27, 2019 | Dec. 31, 2018 |
Carrying Amount | $ 3,764.6 | $ 2,939 |
Convertible notes | ||
Carrying Amount | 1,151.8 | 1,120.6 |
Fair Value | 1,491.1 | 1,368.5 |
Long-term debt | ||
Carrying Amount | 2,463.2 | 1,615.1 |
Fair Value | $ 2,431.3 | $ 1,585.9 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - Convertible Debt | Sep. 27, 2019 | Jun. 08, 2015 |
1.00% Notes | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (as a percent) | 1.00% | 1.00% |
1.625% Notes | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (as a percent) | 1.625% |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 27, 2019 | Sep. 28, 2018 | Feb. 25, 2019 | Dec. 31, 2018 | Jun. 08, 2015 | |
Derivatives, Fair Value [Line Items] | |||||||
Foreign currency transaction gain (loss) realized | $ 300,000 | $ 800,000 | $ (3,800,000) | $ (5,800,000) | |||
Hedge ineffectiveness | 0 | ||||||
Foreign currency exchange contracts | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Notional Amount | 188,900,000 | 188,900,000 | $ 157,300,000 | ||||
Buy (Sell) | 180,300,000 | $ 180,300,000 | $ 142,300,000 | ||||
Foreign currency exchange contracts | Maximum | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Derivative, term of contract (in months) | 3 months | ||||||
Interest Rate Swap 1 | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Notional Amount | $ 1,000,000,000 | $ 750,000,000 | $ 1,000,000,000 | $ 750,000,000 | $ 1,000,000,000 | ||
Interest Rate Swap 2 | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Notional Amount | $ 750,000,000 | ||||||
Convertible Debt | 1.00% Notes | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Debt instrument, interest rate (as a percent) | 1.00% | 1.00% | 1.00% | ||||
Convertible Debt | 1.625% Notes | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Debt instrument, interest rate (as a percent) | 1.625% | 1.625% |
Financial Instruments - Schedul
Financial Instruments - Schedule of Net Foreign Exchange Positions (Details) - Foreign currency exchange contracts - USD ($) $ in Millions | Sep. 27, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 188.9 | $ 157.3 |
Buy (Sell) | 180.3 | 142.3 |
Other Currencies - Buy | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 39.5 | 39.4 |
Buy (Sell) | 39.5 | 39.4 |
Other Currencies - Sell | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 4.3 | 7.5 |
Buy (Sell) | (4.3) | (7.5) |
Japanese Yen | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 46.9 | 29.9 |
Buy (Sell) | 46.9 | 29.9 |
Philippine Peso | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 35.6 | 30.1 |
Buy (Sell) | 35.6 | 30.1 |
Chinese Yuan | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 29.6 | 20.4 |
Buy (Sell) | 29.6 | 20.4 |
Korean Won | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 19.3 | 20.8 |
Buy (Sell) | 19.3 | 20.8 |
Czech Koruna | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 13.7 | 9.2 |
Buy (Sell) | $ 13.7 | $ 9.2 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 27, 2019 | Sep. 27, 2019 | Sep. 28, 2018 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate (as a percent) | 29.10% | 19.00% | |
Unrecognized tax benefits, income tax penalties and interest accrued | $ 4.5 | $ 4.5 | $ 5.1 |
Possible reduction in unrecognized tax benefits in next twelve months | $ 1.5 | $ 1.5 |
Changes in Accumulated Other _3
Changes in Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 27, 2019 | Sep. 28, 2018 | |
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance, beginning | $ 3,297.9 | $ 3,096.8 | $ 3,194.1 | $ 2,801 |
Other comprehensive income (loss) prior to reclassifications | (20.7) | |||
Amounts reclassified from accumulated other comprehensive loss | 3 | |||
Other comprehensive income (loss), net of tax | (2.2) | (0.6) | (17.7) | 5.1 |
Balance, ending | 3,239.6 | 3,203.4 | 3,239.6 | 3,203.4 |
Effects of cash flow hedges | (2.1) | 0.1 | (18.2) | 4.9 |
Other Comprehensive Income Loss, Tax | 4.8 | |||
A.O.C.I. Tax | 0.1 | 0.2 | 0.6 | 0.4 |
Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance, beginning | (42.5) | |||
Other comprehensive income (loss) prior to reclassifications | 0.5 | |||
Amounts reclassified from accumulated other comprehensive loss | 0 | |||
Other comprehensive income (loss), net of tax | 0.5 | |||
Balance, ending | (42) | (42) | ||
Effects of Cash Flow Hedges | ||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance, beginning | 4.6 | |||
Other comprehensive income (loss) prior to reclassifications | (21.2) | |||
Amounts reclassified from accumulated other comprehensive loss | 3 | |||
Other comprehensive income (loss), net of tax | (18.2) | |||
Balance, ending | (13.6) | (13.6) | ||
Accumulated Other Comprehensive Loss | ||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance, beginning | (53.4) | (34.9) | (37.9) | (40.6) |
Balance, ending | $ (55.6) | $ (35.5) | $ (55.6) | $ (35.5) |
Changes in Accumulated Other _4
Changes in Accumulated Other Comprehensive Loss - Reclassifications from Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 27, 2019 | Sep. 28, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Nonoperating Income (Expense) | $ (40.7) | $ (25.6) | $ (99.9) | $ (58.2) |
Net income (loss) | (60) | 167.1 | 157 | 463.9 |
Reclassification out of Accumulated Other Comprehensive Income | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Net income (loss) | (0.3) | (1) | (3) | (1.8) |
Effects of Cash Flow Hedges | Reclassification out of Accumulated Other Comprehensive Income | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Nonoperating Income (Expense) | $ (0.3) | $ (1) | $ (3) | $ (1.8) |
Changes in Accumulated Other _5
Changes in Accumulated Other Comprehensive Loss - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2019 | Sep. 28, 2018 | Sep. 27, 2019 | Sep. 28, 2018 | |
Equity [Abstract] | ||||
A.O.C.I. Tax | $ 0.1 | $ 0.2 | $ 0.6 | $ 0.4 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Oct. 22, 2019USD ($) |
Subsequent Event | |
Subsequent Event [Line Items] | |
Settlement agreement | $ 175 |
Uncategorized Items - d820042d1
Label | Element | Value |
Accounting Standards Update 2016-16 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (1,400,000) |
Accounting Standards Update 2016-16 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (1,400,000) |
Accounting Standards Update 2014-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 2,100,000 |
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 2,100,000 |