fy16q2 earnings presentation

Fiscal 2016 Second Quarter ResultsJanuary 21st, 2016

Safe Harbor

2

This presentation contains forward-looking statements within the meaning of Section 27A of the

Securities act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

These forward-looking statements include, without limitation, the Company’s projections and statements

regarding revenue, gross margin, earnings per share, capital expenditures and other financial and business

metrics. These statements involve risks and uncertainties that could cause actual results to differ

materially from expectations. Please refer to the Company’s Annual Report on Form 10-K for the fiscal

year ended June 27, 2015 for a description of some of the risk factors that could cause actual results to

differ materially from such forward-looking statements.

All forward-looking statements included in this presentation are made as of the date hereof, based on the

information available to the Company as of the date hereof, and the Company assumes no obligation to

update any forward-looking statement.

Fiscal 2016 Second Quarter Results Summary

• Net Revenue of $511 million

• Gross Margin of 60.5% (excluding special items); 57.2% (GAAP)

• Earnings Per Share of $0.32 profit (excluding special items); $0.23 profit (GAAP)

• Returned $109 million to shareholders

• Dividend payout: $86 million

• Stock repurchases: $23 million

• TTM1 Free Cash Flow of $703 million, 32% of TTM revenue

3

1TTM: Trailing Twelve MonthsNote: Free Cash Flow = Cash Flow from Operations – Net Capital Expenditures

Net Capital Expenditures = Gross Capital Expenditures – Asset Sales

Results and Guidance

4

$662M$703M

Fiscal 2016 Second Quarter Results vs. Last Year

5

$567M

$511M

-10%

FY15 Q2 FY16 Q2

Revenue

$0.33$0.32

-3%

FY15 Q2 FY16 Q2

Earnings per Share(Excluding Special Items2)

TTM1 Free Cash Flow3

1TTM: Trailing Twelve Months2Special Items definition in appendixNote: Free Cash Flow: Cash Flow from Operations – Net Capital Expenditures

Net Capital Expenditures: Gross Capital Expenditures – Asset Sales

FY15 Q2 FY16 Q2

+6%

Comms &Data Center

Computing Consumer Industrial Automotive

-18%

-5%

FY15 Q2 vs. FY16 Q2 Revenue

-19%

-23%

Fiscal 2016 Second Quarter Results by End Market

6

+34%28%

29%

21%

17%5%

FY16 Q2 Revenue: $511M

Consumer

Automotive

Industrial

Communications & Data CenterComputing

Note: Due to nature of our general purpose products, estimates by Major Markets are imprecise

Fiscal 2016 Third Quarter Guidance

FY16 Q3 Guidance

Revenue $535M – $575M

Gross Margin60% – 63% GAAP excl. Special Items2

(57% – 60% GAAP)

Earnings Per Share

$0.38 – $0.44 GAAP excl. Special Items2

($0.35 – $0.41 GAAP)

Capital Expenditures

Target range of 1 – 3% of revenue

7

1”Strongly up” is normalized for impact of energy meter business divestiture; revenue guidance includes impact of divestiture2Special Items definition in AppendixNote: Maxim Integrated’s business outlook does not include the potential impact of any restructuring activity, acquisitions, or other business combinations that

may be completed during the quarter.

FY16 Q3 End Market Guidance vs. FY16 Q2

Automotive strongly up

Industrial strongly up1

Data Center & Comms strongly up

Consumer strongly up

Computing down

Key Metrics

8

0%

10%

20%

30%

$0

$300

$600

$900

FY11Q2

FY12Q2

FY13Q2

FY14Q2

FY15Q2

FY16Q2

TTM1 Free Cash Flow

9

1TTM: Trailing Twelve MonthsNote: Free Cash Flow: Cash from Operations – Net Capital Expenditures

Net Capital Expenditures: Gross Capital Expenditures – Asset Sales

$M As % of Revenue

32%

$0

$300

$600

$900

FY11Q2

FY12Q2

FY13Q2

FY14Q2

FY15Q2

FY16Q2

Free Cash Flow, TTM

Net Income (ex-SI), TTM

TTM1 Free Cash Flow vs. Net Income (excluding Special Items)

10

1TTM: Trailing Twelve MonthNote: Free Cash Flow = Cash from Operations – Net Capital Expenditures

Net Capital Expenditures = Gross Capital Expenditures – Asset Sales

$M

0%

3%

6%

9%

12%

15%

FY11Q2

FY12Q2

FY13Q2

FY14Q2

FY15Q2

FY16Q2

Series3

Depreciation

Capital Expenditures

Capital Expenditures vs. Depreciation (excluding Special Items)

11

% of Revenue

CapEx Target: 1 to 3%

of Revenue

Accelerated Depreciation

$0.20

$0.22

$0.24

$0.26

$0.28

$0.30

FY12 Q1 FY14Q1 FY16 Q1

Quarterly Cash Dividend Per Share

12

$0

$50

$100

$150

$200

$250

FY12 Q2 FY14 Q2 FY16 Q2

Dividends & Share Repurchases

Dividend

Return of Cash to Shareholders

Buyback

+5%

+9%

+8%

+8%

$504M remaining in share repurchase program as of FY16 Q2 end

$0.30

+7%

14

Appendix2Special Items: intangible asset amortization; accelerated depreciation; acquisition-related inventory write-up; impairment of long-lived assets; impairment of goodwill and intangible assets; severance and restructuring; acquisition-related costs; contingent consideration adjustments relating to certain acquisitions; expected loss on rent expense for vacated office space; loss related to sale of land and buildings; impairment of investments in privately-held companies; tax provision impacts due to fixed asset tax basis adjustment relating to prior year depreciation expense.

Reconciliation of GAAP vs. GAAP Excluding Special Items (Unaudited)

15

December 26, September 26, December 27,

2015 2015 2014

Reconciliation of GAAP gross profit to GAAP gross profit excluding special items:

GAAP gross profit 292,169$ 286,351$ 314,077$

GAAP gross profit % 57.2% 50.9% 55.4%

Special items:

Intangible asset amortization 14,734 16,638 18,750

Accelerated depreciation (1) 2,032 43,631 8,895

Total special items 16,766 60,269 27,645

GAAP gross profit excluding special items 308,935$ 346,620$ 341,722$

GAAP gross profit % excluding special items 60.5% 61.6% 60.3%

Reconciliation of GAAP operating expenses to GAAP operating expenses excluding

special items:

GAAP operating expenses 202,636$ 362,116$ 378,153$

Special items:


Impairment of long-lived assets (2) 1,950 157,697 50,745

Impairment of goodwill and intangible assets (3) - - 93,010

Severance and restructuring (4) 10,652 7,126 13,635

Other operating expenses (income), net (247) 315 885


GAAP operating expenses excluding special items 186,743$ 193,387$ 215,723$

Reconciliation of GAAP net income (loss) to GAAP net income excluding special

items:

GAAP net income (loss) 67,469$ (72,143)$ (72,034)$

Special items:







Interest and other expense (income), net 595 (109) (217)

Pre-tax total special items 33,254 228,889 189,858

Fiscal year 2015 & 2014 research & development tax credits (2,475) - (2,863)

Other income tax effects and adjustments (5) (5,428) (36,434) (21,283)

GAAP net income excluding special items 92,820$ 120,312$ 93,678$

GAAP net income per share excluding special items:

Basic 0.33$ 0.42$ 0.33$

Diluted 0.32$ 0.42$ 0.33$

Shares used in the calculation of earnings per share excluding special items:

Basic 285,526 284,588 282,992

Diluted (6) 290,521 288,897 287,954

ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES

(Unaudited)

(in thousands, except per share data)

Three Months Ended

(2) Includes impairment charges related to the San Antonio wafer manufacturing facility, MEMS wafer manufacturing equipment, end of line test

equipment and certain research and development equipment.

(4) Includes severance charges associated with several reorganizations, primarily various business units and manufacturing operations.

(1) Building and equipment accelerated depreciation related to San Jose and Dallas manufacturing facilities.

(5) Includes tax effect of pre-tax special items and miscellaneous tax adjustments.

(3) Includes impairment of goodwill and write-off of in-process research and development related to MEMS business unit.

(6) Shares used in diluted earnings per share excluding special items differs from GAAP loss per share due to net income on a non-GAAP basis.

December 26, September 26, December 27,

2015 2015 2014

Reconciliation of GAAP gross profit to GAAP gross profit excluding special items:

GAAP gross profit 292,169$ 286,351$ 314,077$

GAAP gross profit % 57.2% 50.9% 55.4%

Special items:




GAAP gross profit excluding special items 308,935$ 346,620$ 341,722$

GAAP gross profit % excluding special items 60.5% 61.6% 60.3%

Reconciliation of GAAP operating expenses to GAAP operating expenses excluding

special items:

GAAP operating expenses 202,636$ 362,116$ 378,153$

Special items:







GAAP operating expenses excluding special items 186,743$ 193,387$ 215,723$

Reconciliation of GAAP net income (loss) to GAAP net income excluding special

items:

GAAP net income (loss) 67,469$ (72,143)$ (72,034)$

Special items:







Interest and other expense (income), net 595 (109) (217)

Pre-tax total special items 33,254 228,889 189,858

Fiscal year 2015 & 2014 research & development tax credits (2,475) - (2,863)

Other income tax effects and adjustments (5) (5,428) (36,434) (21,283)

GAAP net income excluding special items 92,820$ 120,312$ 93,678$

GAAP net income per share excluding special items:

Basic 0.33$ 0.42$ 0.33$

Diluted 0.32$ 0.42$ 0.33$

Shares used in the calculation of earnings per share excluding special items:

Basic 285,526 284,588 282,992

Diluted (6) 290,521 288,897 287,954

ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES

(Unaudited)

(in thousands, except per share data)

Three Months Ended

(2) Includes impairment charges related to the San Antonio wafer manufacturing facility, MEMS wafer manufacturing equipment, end of line test

equipment and certain research and development equipment.

(4) Includes severance charges associated with several reorganizations, primarily various business units and manufacturing operations.

(1) Building and equipment accelerated depreciation related to San Jose and Dallas manufacturing facilities.

(5) Includes tax effect of pre-tax special items and miscellaneous tax adjustments.

(3) Includes impairment of goodwill and write-off of in-process research and development related to MEMS business unit.

(6) Shares used in diluted earnings per share excluding special items differs from GAAP loss per share due to net income on a non-GAAP basis.

fy16q2 earnings presentation

Investor Relations