ARM Holdings plc Consolidated balance sheet - IFRS

Transcription

1 ARM Holdings plc Consolidated balance sheet - IFRS 31 December Unaudited Audited m m Assets Current assets: Cash and cash equivalents Short-term deposits Fair value of currency exchange contracts Embedded derivatives Accounts receivable Prepaid expenses and other assets Other debtors (see note 4) Current tax assets Inventories: finished goods Total current assets Non-current assets: Available-for-sale financial assets Long-term deposits Loans and receivables Prepaid expenses and other assets Property, plant and equipment Goodwill Other intangible assets Deferred tax assets Total non-current assets Total assets 1, ,299.8 Liabilities and shareholders equity Current liabilities: Accounts payable Fair value of currency exchange contracts Embedded derivatives Accrued and other liabilities (see note 3) Current tax liabilities Obligations under finance leases Borrowings (see note 4) Deferred revenue Total current liabilities Non-current liabilities: Obligations under finance leases Deferred revenue Total non-current liabilities Total liabilities Net assets 1, ,061.2 Capital and reserves attributable to equity holders of the Company Share capital Share premium account Capital reserve Share option reserve Retained earnings Revaluation reserve Cumulative translation adjustment Total equity 1, , of 18

2 ARM Holdings plc Consolidated income statement IFRS Quarter Quarter Nine months Nine months Unaudited Unaudited Unaudited Unaudited m m m m Revenues Cost of revenues (8.3) (6.9) (23.3) (21.1) Gross profit Research and development (39.6) (37.4) (120.0) (122.4) Sales and marketing (17.6) (18.0) (51.7) (52.4) General and administrative (27.4) (17.0) (66.3) (56.2) Total operating expenses, net (84.6) (72.4) (238.0) (231.0) Profit from operations Investment income, net Profit before tax Tax (14.0) (11.6) (43.3) (27.7) Profit for the period Earnings per share Basic and diluted earnings Number of shares (millions) Basic weighted average number of shares 1, , , ,343.1 Effect of dilutive securities: Share options and awards Diluted weighted average number of shares 1, , , ,374.2 Basic EPS (pence) Diluted EPS (pence) Diluted earnings per ADS (cents) All activities relate to continuing operations. All of the profit for the period is attributable to the equity shareholders of the parent. 9 of 18

3 ARM Holdings plc Consolidated statement of comprehensive income - IFRS Quarter Quarter Nine months Nine months Unaudited Unaudited Unaudited Unaudited m m m m Profit for the period Other comprehensive income: Unrealised holding loss on available-for-sale investments (net of tax of nil) (1.0) Currency translation adjustment (16.7) 13.6 (22.9) 0.6 Other comprehensive income /(loss) for the period (17.7) 13.6 (22.9) 0.6 Total comprehensive income for the period of 18

4 ARM Holdings plc Consolidated statement of changes in shareholders equity IFRS Share Share Reval- Cumulative Share premium Capital option Retained -uation translation capital account reserve reserve earnings reserve adjustment Total m m m m m m m m At 1 January 2011 (audited) Profit for the period Other comprehensive income: Currency translation adjustment Total comprehensive income for the nine month period Shares issued on exercise of share options and awards Dividends (23.4) (23.4) Credit in respect of employee share schemes Movement on tax arising on share options and awards Proceeds from sale of own shares At 2011 (unaudited) ,027.3 At 1 January 2012 (audited) ,061.2 Profit for the period Other comprehensive income: Currency translation adjustment (22.9) (22.9) Total comprehensive income/(loss) for nine month period (22.9) 95.4 Shares issued on exercise of share options and awards Dividends (28.8) (28.8) Credit in respect of employee share schemes Movement on tax arising on share options and awards Refund of costs related to share issue At 2012 (unaudited) , of 18

5 Notes to the Financial Information (1) Basis of preparation The financial information prepared in accordance with the Group's IFRS accounting policies (consistent with those stated in the financial statements for the year 31 December 2011 with the exception of finance leases as described below) comprises the consolidated balance sheets at 2012 and 31 December 2011, consolidated income statements and consolidated statements of comprehensive income for the three months and nine months 2012 and 2011, and consolidated statements of changes in shareholders equity for the nine months 2012 and 2011, together with related notes. This condensed set of consolidated interim financial information for the nine months 2012 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority. This financial information should be read in conjunction with the annual financial statements for the year 31 December 2011, which have been prepared in accordance with IFRSs as adopted by the European Union. Finance leases Leases of property, plant and equipment, where the Group has substantially all the risks and rewards of ownership, are classified as finance leases. Finance leases are capitalised at the lease s commencement at the lower of the fair value of the leased property and the present value of the minimum lease. Each lease payment is allocated between the liability and finance charges. The corresponding rental obligations, net of finance charges, are included in liabilities. The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease term. (2) Share-based payment costs and acquisition-related expenses Included within the consolidated income statement for the quarter 2012 are total share-based payment costs (including related payroll taxes) of 11.1 million (2011: 11.7 million), allocated 0.5 million (2011: 0.8 million) in cost of revenues, 6.1 million (2011: 7.0 million) in research and development expenses, 1.8 million (2011: 2.3 million) in sales and marketing expenses and 2.7 million (2011: 1.6 million) in general and administrative expenses. Included within the consolidated income statement for the nine months 2012 are total share-based payment costs (including related payroll taxes) of 29.2 million (2011: 43.6 million), allocated 1.4 million (2011: 2.5 million) in cost of revenues, 17.6 million (2011: 26.3 million) in research and development expenses, 5.1 million (2011: 8.6 million) in sales and marketing expenses and 5.1 million (2011: 6.2 million) in general and administrative expenses. Included within operating expenses for the quarter 2012 are total acquisition-related charges of 1.0 million (including retention bonuses on acquisitions amounting to 0.7 million) (2011: 0.3 million), allocated 0.7 million (2011: nil) in research and development expenses, 0.1 million (2011: 0.1 million) in sales and marketing expenses and 0.2 million (2011: 0.2 million) in general and administrative expenses. Included within operating expenses for the nine months 2012 are total acquisition-related charges of 4.3 million (including retention bonuses on acquisitions amounting to 3.5 million) (2011: 0.8 million), allocated 3.5 million (2011: nil) in research and development expenses, 0.3 million (2011: 0.3 million) in sales and marketing expenses and 0.5 million (2011: 0.5 million) in general and administrative expenses. (3) Accrued and other liabilities Included within accrued and other liabilities at 2012 are 11.4 million (31 December 2011: 22.6 million) relating to the provision for payroll taxes on share awards, and 12.2 million (31 December 2011: 23.7 million) relating to employee bonus and sales commission provisions. (4) Other debtors and borrowings ARM regularly evaluates strategic opportunities and, in pursuance of one such opportunity, had conditionally committed million as of This amount, which is classified as Other Debtors, represents the entire investment being contemplated and in the event a transaction is not completed, the amount will be returned to ARM. To avoid early termination of term deposits, 99.1 million of the amount was financed through a short term bank facility. 12 of 18

6 (5) Non-GAAP measures The following non-gaap measures, including reconciliations to the IFRS measures, have been used in this earnings release. These measures have been presented as they allow a clearer comparison of operating results that exclude acquisition-related charges, sharebased payment costs, profit or loss on disposal and impairment of available-for-sale investments, and Linaro-related charges. Full reconciliations of Q3 2012, Q3 2011, 9M 2012 and 9M 2011, are shown in notes 5.13 to All figures in millions unless otherwise stated. Summary normalised figures Q Q Q M M 2011 Revenues Revenues ($m) Gross margin 94.6% 94.9% 95.1% 94.7% 94.7% Operating expenses Profit from operations Operating margin 44.6% 44.6% 46.4% 45.2% 43.9% Profit before tax Earnings per share (diluted) 3.71p 3.05p 3.58p 10.63p 8.75p Net cash Cash generation (5.1) (5.2) (5.3) (5.4) (5.5) Q Q Q M M 2011 Revenues ( m) ARM s effective exchange rate ($/ ) Revenues ($m) (5.6) (5.7) September December Cash and cash equivalents Short-term deposits Long-term deposits Less: Interest accrued (7.1) 83.1 (5.0) Less: Borrowings (99.1) - Total net cash (5.8) (5.9) (5.10) (5.11) (5.12) Q Q Q M M 2011 cash at end of period (as above) Less: cash at beginning of period (495.9) (353.8) (469.2) (424.0) (290.1) Add back: Cash outflow from conditional investment (see note 4) Add back: Cash (inflow)/outflow from investments and acquisitions (net of cash acquired) (10.0) (9.0) 11.5 Add back: Cash outflow from acquisition costs Add back: Cash outflow from payment of dividends Add back: Cash outflow from share-based payroll taxes Add back: Cash outflow from related to Linaro Less: Cash inflow from exercise of share options (2.5) (3.3) (0.1) (4.8) (7.7) cash generation of 18

7 (5.13) income statement for Q incl sharebased Intangible amortisation Acquisition -related charges Share-based IFRS m m m m m m Revenues Cost of revenues (7.8) (0.5) (8.3) - - (8.3) Gross profit (0.5) Research and development (32.2) (6.1) (38.3) (0.6) (0.7) (39.6) Sales and marketing (15.6) (1.8) (17.4) (0.1) (0.1) (17.6) General and administrative (24.5) (2.7) (27.2) - (0.2) (27.4) Total operating expenses (72.3) (10.6) (82.9) (0.7) (1.0) (84.6) Profit from operations 64.5 (11.1) 53.4 (0.7) (1.0) 51.7 Investment income, net Profit before tax 68.1 (11.1) 57.0 (0.7) (1.0) 55.3 Tax (16.3) 1.8 (14.5) (14.0) Profit for the period 51.8 (9.3) 42.5 (0.5) (0.7) 41.3 Earnings per share (assuming dilution) Shares outstanding (millions) 1, , ,395.9 Earnings per share pence ADSs outstanding (millions) Earnings per ADS cents of 18

8 (5.14) income statement for Q Sharebased incl sharebased Intangible amortisation Acquisition -related charges IFRS m m m m m m Revenues Cost of revenues (6.1) (0.8) (6.9) - - (6.9) Gross profit (0.8) Research and development (29.8) (7.0) (36.8) (0.6) - (37.4) Sales and marketing (15.5) (2.3) (17.8) (0.1) (0.1) (18.0) General and administrative (15.2) (1.6) (16.8) - (0.2) (17.0) Total operating expenses (60.5) (10.9) (71.4) (0.7) (0.3) (72.4) Profit from operations 53.6 (11.7) 41.9 (0.7) (0.3) 40.9 Investment income, net Profit before tax 55.7 (11.7) 44.0 (0.7) (0.3) 43.0 Tax (13.8) 2.0 (11.8) (11.6) Profit for the period 41.9 (9.7) 32.2 (0.6) (0.2) 31.4 Earnings per share (assuming dilution) Shares outstanding (millions) 1, , ,376.0 Earnings per share pence ADSs outstanding (millions) Earnings per ADS cents of 18

9 (5.15) income statement for 9M 2012 Sharebased incl sharebased Intangible amortisation Acquisitionrelated charges Profit on sale of investment, net of impairment IFRS m m m m m m m Revenues Cost of revenues (21.9) (1.4) (23.3) (23.3) Gross profit (1.4) Research and development (97.2) (17.6) (114.8) (1.7) (3.5) - (120.0) Sales and marketing (45.9) (5.1) (51.0) (0.4) (0.3) - (51.7) General and administrative (61.3) (5.1) (66.4) - (0.5) 0.6 (66.3) Total operating expenses (204.4) (27.8) (232.2) (2.1) (4.3) 0.6 (238.0) Profit from operations (29.2) (2.1) (4.3) Investment income, net Profit before tax (29.2) (2.1) (4.3) Tax (48.4) 2.8 (45.6) (43.3) Profit for the period (26.4) (1.4) (2.9) Earnings per share (assuming dilution) Shares outstanding (millions) 1, , ,393.6 Earnings per share pence ADSs outstanding (millions) Earnings per ADS cents of 18

10 (5.16) income statement for 9M 2011 Sharebased incl sharebased Intangible amortisation Acquisition -related charges Linaro - related charges IFRS m m m m m m m Revenues Cost of revenues (18.6) (2.5) (21.1) (21.1) Gross profit (2.5) Research and development (87.4) (26.3) (113.7) (1.8) - (6.9) (122.4) Sales and marketing (43.2) (8.6) (51.8) (0.3) (0.3) - (52.4) General and administrative (49.5) (6.2) (55.7) - (0.5) - (56.2) Total operating expenses (180.1) (41.1) (221.2) (2.1) (0.8) (6.9) (231.0) Profit from operations (43.6) (2.1) (0.8) (6.9) Investment income, net Profit before tax (43.6) (2.1) (0.8) (6.9) Tax (40.5) 10.3 (30.2) (27.7) Profit for the period (33.3) 86.9 (1.6) (0.6) (5.1) 79.6 Earnings per share (assuming dilution) Shares outstanding (millions) 1, , ,374.2 Earnings per share pence ADSs outstanding (millions) Earnings per ADS cents of 18

11 Notes The results shown for Q3 2012, Q2 2012, Q3 2011, 9M 2012, and 9M 2011 are unaudited. The results shown for FY 2011 are audited. The consolidated financial information contained in this announcement does not constitute statutory accounts within the meaning of Section 434 of the Companies Act Statutory accounts of the Company in respect of the financial year 31 December 2011 were approved by the Board of directors on 27 February 2012 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified and did not contain an emphasis of matter paragraph nor any statement under Section 498 of the Companies Act The results for ARM for Q and previous quarters as shown reflect the accounting policies as stated in Note 1 to the financial statements in the Annual Report and Accounts filed with Companies House in the UK for the fiscal year 31 December 2011 and in the Annual Report on Form 20-F for the fiscal year 31 December This document contains forward-looking statements as defined in section 102 of the Private Securities Litigation Reform Act of These statements are subject to risk factors associated with the semiconductor and intellectual property businesses. When used in this document, the words anticipates, may, can, believes, expects, projects, intends, likely, similar expressions and any other statements that are not historical facts, in each case as they relate to ARM, its management or its businesses and financial performance and condition are int to identify those assertions as forward-looking statements. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a number of variables, many of which are beyond our control. These variables could cause actual results or trends to differ materially and include, but are not limited to: failure to realize the benefits of acquisitions, unforeseen liabilities arising from acquisitions, price fluctuations, actual demand, the availability of software and operating systems compatible with our intellectual property, the continued demand for products including ARM s intellectual property, delays in the design process or delays in a customer s project that uses ARM s technology, the success of our semiconductor partners, loss of market and industry competition, exchange and currency fluctuations, any future strategic investments or acquisitions, rapid technological change, regulatory developments, ARM s ability to negotiate, structure, monitor and enforce agreements for the determination and payment of royalties, actual or potential litigation, changes in tax laws, interest rates and access to capital markets, political, economic and financial market conditions in various countries and regions and capital expenditure requirements. More information about potential factors that could affect ARM s business and financial results is included in ARM s Annual Report on Form 20-F for the fiscal year 31 December 2011 including (without limitation) under the captions, Risk Factors (on pages 4 to 11) which is on file with the Securities and Exchange Commission (the SEC ) and available at the SEC s website at About ARM ARM designs the technology that lies at the heart of advanced digital products, from wireless, networking and consumer entertainment solutions to imaging, automotive, security and storage devices. ARM s comprehensive product offering includes 32-bit RISC microprocessors, graphics processors, video engines, enabling software, cell libraries, embedded memories, high-speed connectivity products, peripherals and development tools. Combined with comprehensive design services, training, support and maintenance, and the company s broad Partner community, they provide a total system solution that offers a fast, reliable path to market for leading electronics companies. More information on ARM is available at ARM is a registered trademark of ARM Limited. ARM7, ARM9, ARM11, Cortex and Mali are trademarks of ARM Limited. All other brands or product names are the property of their respective holders. ARM is used to represent ARM Holdings plc; its operating company ARM Limited; and the regional subsidiaries: ARM Inc.; ARM KK; ARM Korea Ltd.; ARM Taiwan Limited; ARM France SAS; ARM Consulting (Shanghai) Co. Ltd.; ARM Belgium Services BVBA; ARM Germany GmbH; ARM Embedded Technologies Pvt. Ltd.; ARM Norway AS; and ARM Sweden AB. 18 of 18