ON Semiconductor Corp. Files 10-Q for Period Ending March 29, 2024

TL;DR

<b>ON Semiconductor Corp. filed its Q1 2024 10-Q report, detailing financial positions and debt instruments.</b>

AI Summary

ON SEMICONDUCTOR CORP (ON) filed a Quarterly Report (10-Q) with the SEC on April 29, 2024. The filing is a 10-Q report for ON Semiconductor Corp. for the period ending March 29, 2024. The company's fiscal year ends on December 31. The filing includes data related to common stock, additional paid-in capital, accumulated other comprehensive income, retained earnings, treasury stock, and noncontrolling interest. Specific convertible debt notes, including 'A0NotesMember' and 'A1.625NotesMember', are referenced for the periods ending March 29, 2024, and March 31, 2023. The filing references US GAAP standards for various financial statement items.

Why It Matters

For investors and stakeholders tracking ON SEMICONDUCTOR CORP, this filing contains several important signals. This 10-Q provides a snapshot of ON Semiconductor's financial health and capital structure as of the end of Q1 2024, crucial for investors assessing performance and stability. The detailed breakdown of equity and debt components, including specific convertible notes, offers insights into the company's financing strategies and potential future obligations.

Risk Assessment

Risk Level: low — ON SEMICONDUCTOR CORP shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain unusual or high-risk information, indicating a routine disclosure.

Analyst Insight

Review the detailed balance sheet and debt disclosures in the 10-Q to understand ON Semiconductor's current financial standing and leverage.

Key Numbers

• 2024-03-29 — Period End Date (Conformed Period of Report)
• 2024-04-29 — Filing Date (Filed as of Date)
• 12-31 — Fiscal Year End (Company fiscal year end)
• 2024-01-01 — Quarter Start Date (Reporting period start date)
• 2023-12-31 — Previous Year End Date (Balance sheet date)
• 2023-01-01 — Prior Year Quarter Start Date (Prior year reporting period start date)

Key Players & Entities

• ON SEMICONDUCTOR CORP (company) — Filer name
• 0001628280-24-018814 (other) — Accession Number
• 20240329 (date) — Conformed Period of Report
• 20240429 (date) — Filed as of Date
• 3674 (other) — Standard Industrial Classification (Semiconductors & Related Devices)
• DE (other) — State of Incorporation
• 1934 Act (regulatory) — SEC Act
• 001-39317 (other) — SEC File Number

FAQ

Key Dates

• 2024-03-29: Quarterly Period End — End of the reporting period for the 10-Q filing.
• 2024-04-29: Filing Date — Date the 10-Q report was officially filed with the SEC.
• 2023-12-31: Previous Year End — Date of the prior fiscal year-end balance sheet.
• 2023-03-31: Prior Year Quarter End — End date for the comparative period in the prior year.

Key Financial Figures

• $0.01 — ich registered Common Stock, par value $0.01 per share ON The Nasdaq Stock Market LL
• $1.5 billion — echnology Revolving Credit Facility A $1.5 billion senior revolving credit facility create

Filing Documents

• on-20240329.htm (10-Q) — 1197KB
• q124ex311certificationceo.htm (EX-31.1) — 10KB
• q124ex312certificationcfo.htm (EX-31.2) — 10KB
• q124ex32certificationceoan.htm (EX-32) — 6KB
• 0001628280-24-018814.txt (&nbsp;) — 7405KB
• on-20240329.xsd (EX-101.SCH) — 47KB
• on-20240329_cal.xml (EX-101.CAL) — 90KB
• on-20240329_def.xml (EX-101.DEF) — 269KB
• on-20240329_lab.xml (EX-101.LAB) — 633KB
• on-20240329_pre.xml (EX-101.PRE) — 473KB
• on-20240329_htm.xml (XML) — 1124KB

: Financial Information

Part I: Financial Information

Financial Statements (unaudited) 4

Item 1. Financial Statements (unaudited) 4

Management's Discussion and Analysis of Financial Condition and Results of Operations 24

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 24

Quantitative and Qualitative Disclosures About Market Risk 29

Item 3. Quantitative and Qualitative Disclosures About Market Risk 29

Controls and Procedures 29

Item 4. Controls and Procedures 29

: Other Information

Part II: Other Information

Legal Proceedings 30

Item 1. Legal Proceedings 30

Risk Factors 30

Item 1A. Risk Factors 30

Unregistered Sales of Equity Securities and Use of Proceeds 31

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 31

Defaults Upon Senior Securities 31

Item 3. Defaults Upon Senior Securities 31

Mine Safety Disclosures 31

Item 4. Mine Safety Disclosures 31

Other Information 31

Item 5. Other Information 31

Exhibits 32

Item 6. Exhibits 32 Signatures 33 (See the glossary of selected terms immediately following this table of contents for definitions of certain abbreviated terms.) Table of Contents ON SEMICONDUCTOR CORPORATION FORM 10-Q GLOSSARY OF SELECTED ABBREVIATED TERMS* Abbreviated Term Defined Term 0% Notes 0% Convertible Senior Notes due 2027 0.50% Notes 0.50% Convertible Senior Notes due 2029 1.625% Notes 1.625% Convertible Senior Notes due 2023 3.875% Notes 3.875% Senior Notes due 2028 ADAS Advanced driver-assistance systems Amended and Restated SIP ON Semiconductor Corporation Amended and Restated Stock Incentive Plan, as amended ASU Accounting Standards Update Commission or SEC Securities and Exchange Commission New Credit Agreement Credit agreement, dated as of June 22, 2023, by and among the Company, as borrower, the several lenders party thereto, JP Morgan Chase Bank, N.A., as administrative agent, and certain other parties, providing for the Revolving Credit Facility EFK East Fishkill, New York fabrication facility ESPP ON Semiconductor Corporation 2000 Employee Stock Purchase Plan, as amended Exchange Act Securities Exchange Act of 1934, as amended IP Intellectual property IRS United States Internal Revenue Service IT Information Technology Revolving Credit Facility A $1.5 billion senior revolving credit facility created pursuant to the New Credit Agreement ROU Right-of-use RSU Restricted stock unit SiC Silicon carbide Securities Act Securities Act of 1933, as amended U.S. or United States United States of America * Terms used, but not defined, within the body of the Form 10-Q are defined in this Glossary. Table of Contents

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION

Financial Statements (unaudited)

Item 1. Financial Statements (unaudited) ON SEMICONDUCTOR CORPORATION CONSOLIDATED BALANCE SHEETS (in millions, except share and per share data) (unaudited) March 29, 2024 December 31, 2023 Assets Cash and cash equivalents $ 2,614.4 $ 2,483.0 Receivables, net 873.3 935.4 Inventories 2,147.1 2,111.8 Other current assets 514.1 382.1 Total current assets 6,148.9 5,912.3 Property, plant and equipment, net 4,384.3 4,401.5 Goodwill 1,577.6 1,577.6 Intangible assets, net 289.4 299.3 Deferred tax assets 648.4 600.8 ROU financing lease assets 41.8 42.4 Other assets 392.5 381.3 Total assets $ 13,482.9 $ 13,215.2 Liabilities and Stockholders' Equity Accounts payable $ 665.8 $ 725.6 Accrued expenses and other current liabilities 678.1 663.2 Current portion of financing lease liabilities 0.3 0.8 Current portion of long-term debt 794.8 794.0 Total current liabilities 2,139.0 2,183.6 Long-term debt 2,544.1 2,542.6 Deferred tax liabilities 37.3 38.7 Long-term financing lease liabilities 21.3 22.4 Other long-term liabilities 598.6 627.3 Total liabilities 5,340.3 5,414.6 Commitments and contingencies (Note 8) ON Semiconductor Corporation stockholders' equity: Common stock ($ 0.01 par value, 1,250,000,000 shares authorized, 621,590,872 and 616,281,996 issued, 429,934,333 and 426,386,426 outstanding, respectively) 6.2 6.2 Additional paid-in capital 5,243.9 5,210.9 Accumulated other comprehensive loss ( 52.2 ) ( 45.2 ) Accumulated earnings 7,001.1 6,548.1 Less: Treasury stock, at cost: 191,656,539 and 189,895,570 shares, respectively ( 4,075.1 ) ( 3,937.4 ) Total ON Semiconductor Corporation stockholders' equity 8,123.9 7,782.6 Non-controlling interest 18.7 18.0 Total stockholders' equity 8,142.6 7,800.6 Total liabilities and stockholders' equity $ 13,482.9 $ 13,215.2 See accompanying notes to consolidated financial statements 4 Table of Contents ON SEMICONDUCTOR CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE IN

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 1: Background and Basis of Presentation ON Semiconductor Corporation ("onsemi," "we," "us," "our," or the "Company"), with its wholly and majority-owned subsidiaries, operates under the onsemi TM brand. The Company is organized into three operating and reportable segments: the Power Solutions Group ("PSG"), the Analog & Mixed-Signal Group ("AMG"), and the Intelligent Sensing Group ("ISG"). During the quarter ended March 29, 2024, onsemi reorganized the existing divisions within certain of its operating and reportable segments and renamed the Advanced Solutions Group ("ASG") reportable segment to AMG. See Note 2: ''Revenue and Segment Information'' for additional information regarding the segment reorganization. The Company's fiscal calendar year begins on January 1 and ends on December 31, with each fiscal quarter containing a thirteen-week accounting period. The quarters ended March 29, 2024 and March 31, 2023 contained 89 and 90 days, respectively. The accompanying unaudited financial statements as of and for the quarter ended March 29, 2024 have been prepared following generally accepted accounting principles in the United States of America ("GAAP") for interim financial reporting and the rules and regulations of the SEC for interim reporting. 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, 2023 was derived from the Company's audited financial statements but does not include all disclosures required by GAAP for annual financial statements. In management's opinion, the interim information contains all adjustments, which include normal recurring adjustments necessary for a fair statement of the results for the interim periods. The footnote disclosures related to the interim financial information contained herein are also unaudited. Such financial information s

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (unaudited) Note 2: Revenue and Segment Information Revenue disaggregated by product sales, manufacturing services and product development agreements was as follows (in millions): Quarters Ended March 29, 2024 March 31, 2023 Revenue: Product sales $ 1,804.3 $ 1,895.1 Manufacturing services 54.0 62.1 Product development agreements 4.4 2.5 Total $ 1,862.7 $ 1,959.7 A significant portion of the Company's orders are firm commitments that are non-cancellable, including certain orders or contracts with a duration of less than one year. Certain of the Company's customer contracts are multi-year agreements that include firmly committed amounts ("Long-term Supply Agreements" or "LTSAs") for which the remaining performance obligations as of March 29, 2024 are approximately $ 15.6 billion (excluding the remaining performance obligations for contracts having a duration of one year or less). The Company expects to recognize approximately 30 % of this amount as revenue during the next twelve months upon shipment of products under these contracts. Total revenue estimates are based on negotiated contract prices and demand quantities, and could be influenced by risks and uncertainties, including manufacturing or supply chain constraints, modifications to customer agreements and regulatory changes, among other factors. Accordingly, the actual revenue recognized for the remaining performance obligation in future periods may significantly fluctuate from these estimates. Certain LTSAs include non-cancellable capacity payments from the customer, which are generally due within 30 days of the agreement. These payments reserve production availability or are prepayments for the same purpose and are not recognized as revenue until the performance obligations are satisfied. The Company fulfilled certain performance obligations and recognized revenue of $ 12.1 million and $ 14.8 million for the quarters ended March 29, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (unaudited) Revenue and gross profit for the operating and reportable segments were as follows (in millions): PSG (1) AMG (1) ISG Total For the quarter ended March 29, 2024: Revenue from external customers $ 874.2 $ 697.0 $ 291.5 $ 1,862.7 Gross profit $ 365.4 $ 338.8 $ 149.4 $ 853.6 For the quarter ended March 31, 2023: Revenue from external customers $ 860.9 $ 744.7 $ 354.1 $ 1,959.7 Gross profit $ 396.4 $ 344.0 $ 177.1 $ 917.5 (1) During the first quarter of 2024, the Company reorganized certain reporting units and its segment reporting structure. As a result of the reorganization of divisions within PSG and AMG, the prior-period amounts have been reclassified to conform to current-period presentation. The Company had one customer, a distributor, whose revenue accounted for approximately 10 % of the total revenue for the quarters ended March 29, 2024 and March 31, 2023, respectively. Revenue for the operating and reportable segments disaggregated into geographic locations based on sales billed from the respective country and sales channel was as follows (in millions): Quarter Ended March 29, 2024 PSG AMG ISG Total Geographic Location: Hong Kong $ 203.4 $ 149.7 $ 52.3 $ 405.4 Singapore 206.7 186.1 40.4 433.2 United Kingdom 202.5 133.8 107.7 444.0 United States 205.3 159.5 54.2 419.0 Other 56.3 67.9 36.9 161.1 Total $ 874.2 $ 697.0 $ 291.5 $ 1,862.7 Sales Channel: Distributors $ 450.4 $ 343.6 $ 112.0 $ 906.0 Direct customers 423.8 353.4 179.5 956.7 Total $ 874.2 $ 697.0 $ 291.5 $ 1,862.7 10 Table of Contents ON SEMICONDUCTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (unaudited) Quarter Ended March 31, 2023 PSG (1) AMG (1) ISG Total Geographic Location: Hong Kong $ 241.9 $ 184.7 $ 63.8 $ 490.4 Singapore 244.1 148.4 58.2 450.7 United Kingdom 168.8 163.4 81.1 413.3 United States 135.9 151.7 101.5 389.1 Other 70.2 96.5 49.5 216.2 Total $ 860.9 $ 744.7 $ 354.1 $ 1,959.7 Sales Channel: Distributors $ 521.3 $ 312.4 $ 187.1 $ 1,020.8 Direct customers 339.6 432.3 167.0 938.9 Total $ 860.9 $ 744.7 $ 354.1 $ 1,959.7 (1) During the first quarter of 2024, the Company reorganized certain reporting units and its segment reporting structure. As a result of the reorganization of divisions within PSG and AMG, the prior-period amounts have been reclassified to conform to current-period presentation. The Company operates in various geographic locations. Sales to external customers have little correlation to where products are manufactured or the location of the end-customers. It is, therefore, not meaningful to present operating profit by geographical location. The Company's revenue disaggregated into end-markets and product technologies was as follows (in millions): Quarters Ended March 29, 2024 March 31, 2023 End-Markets: Automotive $ 1,017.2 $ 986.0 Industrial 476.1 556.2 Other* 369.4 417.5 Total $ 1,862.7 $ 1,959.7 * - Other primarily includes the end-markets of computing, consumer, networking and communications. Product Technologies: Intelligent Power $ 953.4 $ 927.3 Intelligent Sensing 362.9 428.2 Other 546.4 604.2 Total $ 1,862.7 $ 1,959.7 The Company does not discretely allocate assets to its operating segments, nor does management evaluate operating segments using discrete asset information. The consolidated assets used in manufacturing are generally shared and are not specifically ascribed to operating and reportable segments. In situations where the carrying amounts assigned to an asset group need to be evaluated for recoverability, judgment

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (unaudited) Property, plant and equipment, net by geographic location, is summarized below (in millions): As of March 29, 2024 December 31, 2023 United States $ 1,458.1 $ 1,456.5 South Korea 1,349.9 1,360.8 Czech Republic 569.5 559.7 Philippines 242.1 252.9 China 251.9 252.2 Malaysia 199.8 199.3 Vietnam 160.0 164.3 Other 153.0 155.8 Total $ 4,384.3 $ 4,401.5 Note 3: Recent Accounting Pronouncements and Other Developments Pending Adoption Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07") In November 2023, the FASB issued ASU 2023-07 to enhance disclosures about significant segment expenses. The amendments in this ASU require a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment's profit or loss and assets that are currently required annually. The amendments in this ASU also clarify circumstances in which an entity can disclose multiple segment measures of profit or loss and provide new segment disclosure requirements for entities with a single reportable segment. For public business entities, the provisions of ASU 2023-07 are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance will be applied retrospectively to all periods presented in the financial statements. ASU 2023-07 will be applicable for the Company's financial statements for the year ended December 31, 2024. Management is currently evaluating and understanding the requirements under this new standard. Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09") In December 2023, the FASB issued ASU 2023-09 to enhance disclosures about income taxes. The amendments in this ASU require a public entity to disclo

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (unaudited) Note 4: Balance Sheet Information and Other Supplemental Disclosures Goodwill 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 fair value of a reporting unit below its carrying value. As a result of the segment reorganization discussed in Note 2: ''Revenue and Segment Information,'', management performed a goodwill impairment analysis on the divisions (which were the reporting units) prior to and after the reorganization and did not identify an impairment. In connection with the reorganization, the Company changed its reporting units structure, which resulted in the reallocation of $ 25.9 million of goodwill, presented on a prospective basis, from PSG to AMG based on the relative fair values of the businesses transferred. There was no change in the overall balance of goodwill from December 31, 2023 to March 29, 2024. The following table summarizes goodwill by operating and reportable segments (in millions): As of March 29, 2024 December 31, 2023 Goodwill Accumulated Impairment Losses Reallocation Carrying Value Goodwill Accumulated Impairment Losses Carrying Value Operating and Reportable Segments: PSG $ 708.0 $ ( 31.9 ) $ ( 25.9 ) $ 650.2 $ 708.0 $ ( 31.9 ) $ 676.1 AMG 1,536.4 ( 748.9 ) 25.9 813.4 1,536.4 ( 748.9 ) 787.5 ISG 114.0 — — 114.0 114.0 — 114.0 Total $ 2,358.4 $ ( 780.8 ) $ — $ 1,577.6 $ 2,358.4 $ ( 780.8 ) $ 1,577.6 Inventories Details of inventories included in the Consolidated B

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