ARM Holdings PLC
06 February 2007
ARM HOLDINGS PLC REPORTS RESULTS FOR THE FOURTH QUARTER AND FULL YEAR ENDED 31
DECEMBER 2006
Company presentation of the results will be webcast today at 09:30 GMT at
www.arm.com/ir
CAMBRIDGE, UK, 6 February 2007-ARM Holdings plc ((LSE: ARM); (Nasdaq: ARMHY))
announces its unaudited financial results to 31 December 2006
Highlights (US GAAP unless otherwise stated)
• Q4 and H2 dollar revenues both up 20% year-on-year
• Physical IP Division (PIPD) Q4 revenues up 27%
• Processor Division (PD) Q4 revenues up 21%
• Record bookings quarter in Q4. Order backlog up c.20% sequentially
• Strong licensing of latest technology across the Group in Q4
• Five CortexTM family licenses (including first license of
next-generation Cortex processor)
• 45nm physical IP licensed to IBM, Samsung and Chartered
• First two licenses for new Graphics processor
• Good momentum in FY 06 royalty revenues
• PD up 25% to $164m on 2.45bn shipments
• PIPD up 26% to $35m
• Normalised* income before tax in Q4 of £21.3m (US GAAP £9.4m), after
£1.3m of non-recurring net operating expenses
• Normalised* EPS in Q4 of 1.49p (US GAAP 0.87p), benefiting from net tax
credit in the quarter
• FY 06 effective tax rate of 17%
• FY 06 normalised* EPS up 19% (US GAAP EPS up by 10%)
• Increasing cash returns to shareholders
• 4.6% of issued share capital purchased by Company in 2006 for £76.5m
• FY 2006 dividend up 19%
Commenting on the results, Warren East, Chief Executive Officer, said:
'2006 was another year of consistent execution and significant investment in our
business, and we are encouraged to have grown revenues ahead of our targets. We
go into 2007 in good shape, with a strong portfolio of products and a record
level of order backlog. Last year the number of ARM(R) technology-based
electronic products shipped grew by 47% to more than 2.4 billion.'
FY 2006 - Revenue Analysis
Revenue ($M)*** Revenue (£M)
---------------------------------------------------------------
FY 2006 FY 2005 % Change FY 2006 FY 2005 % Change
-------------------------------------------------------------------------------
PD
Licensing 138.3 124.0 +12% 75.7 69.4 +9%
Royalties 164.1 131.1 +25% 88.7 72.5 +22%
Total PD 302.4 255.1 +19% 164.4 141.9 +16%
PIPD
Licensing 64.2 63.0 +2% 34.9 34.9 +0%
Royalties 34.9(1) 27.6(1) +26% 19.1(1) 15.3(1) +25%
Total PIPD 99.1 90.6 +9% 54.0 50.2 +8%
Development
Systems 53.0 46.5 +14% 28.8 25.6 +13%
Services 29.1 26.5 +10% 16.1 14.7 +10%
Total Revenue 483.6 418.7 +16% 263.3 232.4 +13%
-------------------------------------------------------------------------------
(1) Includes catch-up royalties in 2006 of $3.1m (£1.7m) and in 2005 of $2.4m
(£1.3m).
Q4 2006 - Revenue Analysis
Revenue ($M)*** Revenue (£M)
--------------------------------------------------------------
Q4 2006 Q4 2005 % Change Q4 2006 Q4 2005 % Change
-------------------------------------------------------------------------------
PD
Licensing 37.4 30.3 +23% 19.5 17.7 +10%
Royalties 42.8 36.2 +18% 22.2 20.7 +7%
Total PD 80.2 66.5 +21% 41.7 38.4 +9%
PIPD
Licensing 18.1 13.8 +31% 9.4 8.0 +18%
Royalties 9.6(1) 8.0(1) +20% 5.1(1) 4.6(1) +11%
Total PIPD 27.7 21.8 +27% 14.5 12.6 +15%
Development
Systems 14.1 13.5 +4% 7.3 7.8 -6%
Services 8.3 7.2 +15% 4.5 4.1 +10%
Total Revenue 130.3 109.0 +20% 68.0 62.9 +8%
-------------------------------------------------------------------------------
(1) Includes catch-up royalties in Q4 2006 of $0.7m (£0.4m) and in Q4 2005 of
$1.6m (£0.9m).
FY 2006 - Financial Summary
Normalised* US GAAP*****
-----------------------------------------------------
£M FY 2006 FY 2005 % Change FY 2006 FY 2005
-------------------------------------------------------------------------------
Revenue 263.3 232.4 +13% 263.3 232.4
Income before income tax 90.1 81.3 +11% 57.0 53.2
Operating margin 31.7% 32.7% 17.1% 20.6%
Earnings per share
(pence) 5.08 4.28 +19% 3.22 2.93
Net cash generation** 50.3 51.0
Effective fx rate ($/£) 1.84 1.80
-------------------------------------------------------------------------------
Q4 2006 - Financial Summary
Normalised* US GAAP
-----------------------------------------------------
£M Q4 2006 Q4 2005 % Change Q4 2006 Q4 2005
-------------------------------------------------------------------------------
Revenue 68.0(1) 62.9 +8% 68.0 62.9
Income before income tax 21.3 23.7 -10% 9.4 15.8
Operating margin 29.0% 35.0% 11.4% 22.4%
Earnings per share
(pence) 1.49 1.23 +21% 0.87 0.91
Net cash generation** 13.3 14.8
Effective fx rate ($/£) 1.92 1.73
-------------------------------------------------------------------------------
(1) Equivalent to £75.2m at Q4 2005 effective $/£ rate
* Normalised figures are based on US GAAP, adjusted for acquisition-related
charges and other share-based remuneration charges and profit on disposal of
available-for-sale securities. For reconciliation of GAAP measures to normalised
non-GAAP measures detailed in this document, see notes 7.1 to 7.27.
** Before dividends and share buybacks, net cash flows from share option
exercises, acquisition consideration and proceeds from the disposal of
available-for-sale securities - see notes 7.14 to 7.18.
*** Dollar revenues are based on the group's actual dollar invoicing, where
applicable, and using the rate of exchange applicable on the date of the
transaction for invoicing in currencies other than dollars. Approximately 95% of
invoicing is in dollars.
**** Each American Depositary Share (ADS) represents three shares.
***** Comparative results under IFRS for FY 2006 are revenue £263.3m (2005:
£232.4m), profit before tax £56.7m (2005: £40.5m), operating margin 19.0% (2005:
15.1%) and fully diluted EPS 3.5p (2005: 2.1p).
Current trading and prospects
Based on a strong portfolio of products for licensing, an order backlog at
record levels and the prospect of a full year's productivity from the investment
in new employees in 2006, we are confident of achieving full-year dollar revenue
growth in 2007 in line with expectations.
Given short-term industry conditions (including lower foundry utilization),
which are generally anticipated to improve during the year, dollar revenues in
Q1 2007 are expected to be at similar levels to Q4 2006.
CONTACTS:
Tom Buchanan/Fiona Laffan Tim Score/Bruce Beckloff
Brunswick ARM Holdings plc
+44 (0) 207 404 5959 +44 (0)1628 427800
Financial review
(US GAAP unless otherwise stated)
Total revenues
Total dollar revenues in Q4 were $130.3 million, up 20% versus Q4 2005 and up 8%
sequentially. Sterling revenues of £68.0 million were up 8% year-on-year after
an 11% weakening of the dollar against sterling ($1.92 in Q4 2006 compared to
$1.73 in Q4 2005). At the Q4 2005 effective rate, Q4 2006 sterling revenues
would have been £75.2 million.
Full-year dollar revenues in 2006 amounted to $483.6m, up 16% on 2005.
License revenues
Total dollar license revenues in Q4 2006 grew by 26% to $55.5 million,
representing 43% of group revenues, compared to $44.1 million in Q4 2005.
License revenues comprised $37.4 million from PD and $18.1 million from PIPD,
representing the highest ever quarterly licensing revenue for that division.
Full-year license revenues were up 8%, comprising 12% growth in PD and 2% growth
in PIPD. Order backlog in both PD and PIPD was approximately 20% higher at the
end of 2006 than at the end of 2005.
Royalty revenues
Total dollar royalty revenues in Q4 2006 grew by 19% to $52.4m, representing 40%
of group revenues, compared to $44.2 million in Q4 2005. Royalty revenues
comprised $42.8 million from PD and $9.6 million from PIPD. Total PIPD royalties
of $9.6 million included $0.7 million of catch-up royalties. PIPD underlying
royalty revenues were up 39% in Q4 2006 compared to Q4 2005.
Full-year dollar PD royalty revenues grew by 25% to $164.1 million on unit
shipments of 2.449 billion, up 47% on 2005. Full-year PIPD royalty revenues grew
by 26% to $34.9 million. Excluding catch-up royalties in both years, underlying
PIPD royalties also grew by 26%.
Development Systems and Service revenues
Sales of development systems in Q4 2006 were at a record level of $14.1 million,
representing 11% of group revenue, compared to $13.5 million in Q4 2005. Service
revenues in Q4 2006 were $8.3 million, representing 6% of group revenues,
compared to $7.2 million in Q4 2005.
Full-year Development Systems revenues were $53.0 million, up 14% on 2005.
Service revenues were up by 10% to $29.1 million.
Gross margins
Gross margins in Q4 2006, excluding the FAS123(R) charge of £0.4 million (see
below), were 89.0% compared to 87.7% in Q3 2006 and 90.6% in Q4 2005. The
sequential increase in gross margin arises from a lower allocation of PIPD
engineering time to cost of sales in Q4 compared to Q3, reflecting a higher
proportion of engineering effort being allocated to research and development
activities (treated as operating expenses) in Q4 as opposed to customization
work carried out to convert order backlog into revenue (treated as cost of
sales).
Gross margins for the year, excluding share-based remuneration charges of £1.1
million, were 88.7% compared to 89.1% in 2005.
Operating expenses and operating margin
Total operating expenses in Q4 2006 were £52.4 million (£42.9 million in Q4
2005) and include amortisation of intangible assets and other
acquisition-related charges of £4.7 million (Q4 2005: £4.8 million) and £5.8
million in relation to the fair value of share-based remuneration in accordance
with FAS123(R) - 'Share-Based Payment'. The total FAS123(R) charge of £6.2
million in Q4 2006 is included within cost of revenues (£0.4 million), research
and development (£3.6 million), sales and marketing (£1.2 million) and general
and administrative (£1.0 million). As FAS123(R) was effective for the first time
in Q1 2006 and as ARM is applying the standard on the 'modified prospective'
basis, there is no directly equivalent charge in Q4 2005. Total operating
expenses of £42.9 million in Q4 2005 did, however, include a deferred
stock-based compensation charge of £2.5 million as calculated under the
previously applicable standard. Normalised income statements for Q4 2006, Q4
2005, FY 2006 and FY 2005 are set out in notes 7.24 through 7.27 below which
reconcile US GAAP to the normalised non-GAAP measures referred to in this
earnings release.
The commentary on operating expenses below excludes acquisition-related and
share-based remuneration charges.
Operating expenses in Q4 2006 were £40.8 million compared to £37.4 million in Q3
2006 and £35.0 million in Q4 2005. Operating expenses in Q4 2006 include
non-recurring expenses of £1.3 million. Excluding these, operating expenses in
Q4 2006 were £39.5 million. In 2007, operating expenses will reflect a full
year's cost for those employees who joined the Group during 2006.
Research and development expenses were £18.2 million in Q4 2006, representing
27% of revenues, compared to £15.5 million in Q3 2006 and £15.5 million in Q4
2005. Sales and marketing costs in Q4 2006 were £11.4 million, being 17% of
revenues, compared to £10.0 million in Q3 2006 and £8.9 million in Q4 2005.
General and administrative expenses in Q4 2006 were £11.2 million, representing
16% of revenues, compared to £11.9 million in Q3 2006 and £10.6 million in Q4
2005.
Normalised operating margin in Q4 2006 was 29.0% (7.1) compared to 30.1% (7.2)
in Q3 2006 and 35.0% (7.3) in Q4 2005. Operating margins in Q4 2006 were lower
than Q4 2005 due to the 11% weakening of the US dollar against sterling, the
investment in headcount made in 2006 and the non-recurring expenses of £1.3
million. Excluding the non-recurring expenses, the operating margin would have
been 30.9% at the Q4 2006 effective exchange rate (equivalent to 34.2% at the Q4
2005 effective rate of 1.73).
Total operating expenses in 2006 were £187.4 million, including
acquisition-related and share-based remuneration charges of £20.1 million and
£17.2 million respectively. Excluding these charges, operating expenses in 2006
were £150.1 million, compared to £131.1 million in 2005, reflecting the net
addition of 335 people to the Group during the year.
Full-year research and development expenses were £63.8 million in 2006,
representing 24% of revenues. Full year sales and marketing expenses were £40.5
million or 15% of revenues. Total general and administrative expenses were £45.7
million, representing 17% of revenues.
Normalised operating margin for 2006 was 31.7% (7.4) versus 32.7% (7.5) for
2005. At constant currencies (applying ARM's 2005 full-year effective rate of
$1.80), the normalised operating margin for 2006 would have been 32.3%.
Earnings and taxation
Income before income tax in Q4 2006 was £9.4 million compared to £15.8 million
in Q4 2005. After adjusting for acquisition-related and share-based remuneration
charges, normalised income before income tax in Q4 2006 was £21.3 million (7.6)
compared to £23.7 million (7.8) in Q4 2005.
The Group's effective tax rate in 2006 is 17%, primarily due to a non-recurring
tax credit in Q4 arising from a tax-deductible foreign exchange loss. Given the
expected distribution of the Group's profits, the Group's effective tax rate for
2007 is expected to be approximately 28%.
In Q4 2006, fully diluted earnings per share prepared under US GAAP were 0.9
pence (5.1 cents per ADS****) compared to earnings per share of 0.9 pence (4.7
cents per ADS****) in Q4 2005. Normalised fully diluted earnings per share in Q4
2006 were 1.49 pence (7.19, 7.24) per share (8.7 cents per ADS****) compared to
1.23 pence (7.21, 7.25) (6.3 cents per ADS****) in Q4 2005.
Full-year 2006 fully diluted earnings per share prepared under US GAAP were 3.2
pence (18.9 cents per ADS****) compared to earnings per share of 2.9 pence (15.1
cents per ADS****) in 2005. Normalised earnings per fully diluted share for 2006
were 5.08 pence (7.22, 7.26) per share (29.9 cents per ADS****) compared to 4.28
pence (7.23, 7.27) (22.0 cents per ADS****) in 2005.
Balance sheet
Intangible assets at 31 December 2006 were £405.3 million, comprising goodwill
of £349.3 million and other intangible assets of £56.0 million, compared to
£364.0 million and £58.6 million respectively at 30 September 2006. A regular
review of the carrying value of assets arising on acquisition was performed at
31 December 2006 and it was concluded that no impairment charge was required.
Total accounts receivable decreased to £69.6 million at 31 December 2006,
comprising £45.8 million of trade receivables and £23.8 million of amounts
recoverable on contracts, from £73.1 million at 30 September 2006, comprising
£46.6 million of trade receivables and £26.5 million of amounts recoverable on
contracts. Days sales outstanding (DSOs) reduced to 43 at 31 December 2006 from
52 at 30 September 2006 and 54 at 31 December 2005.
Cash flow, share buyback program and 2006 final dividend
Net cash at 31 December 2006 was £128.5(7.11) million compared to £147.4(7.12)
million at 30 September 2006. Normalised net cash generation in Q4 2006 was
£13.3 million after taking into account £31.3 million returned to shareholders
by way of share buyback (£25.8 million) and dividend (£5.5 million) and a net
cash outflow of £3.3 million in relation to acquisitions.
Since introducing dividend payments in 2004 and commencing the Company's share
buyback program in July 2005, £125 million has been returned to shareholders and
77.5 million shares, being 5.6% of issued share capital, have been bought back.
This has contributed to a net reduction in the fully diluted shares in issue
from 1,431 million in Q4 2005 to 1,381 million in Q4 2006. It is anticipated
that the share buyback program will resume after these results.
The directors recommend payment of a final dividend in respect of 2006 of 0.60
pence per share, which taken together with the interim dividend of 0.40 pence
per share paid in October 2006, gives a total dividend in respect of 2006 of 1.0
pence per share, an increase of 19% on the total dividend of 0.84 pence per
share in 2005. Subject to shareholder approval, the final dividend will be paid
on 21 May 2007 to shareholders on the register on 4 May 2007.
International Financial Reporting Standards (IFRS)
ARM reports results quarterly in accordance with US GAAP. At 30 June and 31
December each year, in addition to the US GAAP results, ARM is also required to
publish results under IFRS. The operating and financial review commentary
included in this release on the US GAAP numbers is for the most part applicable
to the IFRS numbers and, in particular, revenues, dividends and share buybacks
are recorded in the same way under both sets of accounting rules. A summary of
the accounting differences between IFRS and US GAAP and reconciliations of IFRS
and US GAAP profit and shareholders' equity are set out in note 6 to the
financial tables below.
The most significant difference between the two income statements arises on the
accounting for share-based payments, including related tax effects. Total
operating expenses under IFRS include compensation charges in respect of
share-based payments of £17.4 million in 2006 compared to £20.9 million in 2005.
The decrease is primarily due to reduced compensation charges relating to
options assumed on the Artisan acquisition which are reducing over time as those
options vest, offset by increased charges on new schemes.
Operating review
Backlog
Group order backlog at the end of Q4 was approximately 20% higher than at the
end of Q3. Licensing in Q4 2006 was strong across the ARM business with the
backlog increasing in PD, PIPD and Development Systems.
PD licensing
In 2006, ARM continued to see significant demand for the full range of its
microprocessors with PD order backlog at the end of Q4 up approximately 30%
sequentially. Having licensed Cortex family products to lead partners prior to
2006, the current portfolio of three Cortex family products became available for
more general licensing as the year progressed. In 2007, all three products will
be available for licensing for a full year for the first time. During 2006, 13
Cortex family licenses were signed, with five being signed in Q4. This brings
the accumulated total of Cortex family licenses to 23, signed by 18
semiconductor companies. As well as being a year of gathering momentum for
Cortex family licensing, 2006 also saw the first Cortex-A8 processor-based
products being announced with the Texas Instruments' OMAP 3 line of products.
ARM also received the first royalties for Cortex products following the rapid
deployment of the Cortex-M3 product by Luminary Microelectronics.
In addition, 2006 continued to be a year of strong licensing of the ARM11TM
family of products. In the year we signed 15 ARM11 family licenses bringing the
total number to 52 from 36 semiconductor companies. This year signified a shift
in ARM11 family licensing activity from the traditional first-mover mobile
companies with the majority of the licenses being taken for applications outside
of the mobile segment. Based on the opportunity pipeline, we expect ARM11 family
licensing to continue to be a meaningful contributor to license revenues in
2007.
As part of the Cortex family licensing in Q4 2006, we signed our first lead
partner for the next-generation Cortex microprocessor. Although, as usual, we
would expect to sign a small number of lead licensees for this product, we do
not expect it to be available for mainstream licensing until 2008.
Q4 2006 PD Licensing Analysis - 463 cumulative processor licenses
Multi-use Term Per-use
--------------------------------------------------
U D N U D N U D N Total
---------------------------------------------------------------------------
ARM7 1 1 2
ARM9 1 1 1 1 1 5
ARM11 1 1 1 3
Cortex-A8 1 1 2
Cortex-R4 1 1 2
Next Gen 1 1
---------------------------------------------------------------------------
Total 15
--------------
U:Upgrade D:Derivative N: New
PD royalties
In 2006, ARM achieved a significant milestone with more than 2 billion ARM
technology-based products being shipped in the year. Total shipments were 2.45
billion, up 47% year-on-year. Total Q3 shipments of 700 million units (our
partners report royalties one quarter in arrears) equate to 7.6 million units
being shipped every day. ARM continued to benefit from significant growth in the
mobile segment (which includes mobile handsets, Bluetooth devices and portable
media players, such as the Apple iPod), with this segment accounting for 66% of
the units shipped by the ARM partnership. We also saw significant growth across
a myriad of applications outside of the mobile segment including smartcards,
microcontrollers, automotive, connectivity devices, hard disk drives and many
others. Total non-mobile shipments in 2006 were 838 million units, higher than
total shipments into all applications as recently as 2003, illustrating ARM's
increasing penetration across the full range of consumer electronics products.
ARM's royalties are typically based on a percentage of the average selling price
(ASP) of the chips which incorporate our technology. As the penetration of ARM
technology-based chips grows across a wide range of end-market applications, the
range of ASPs gets wider. The average royalty rate (ARR) earned by ARM in any
one reporting period is dependent on the mix of the ASPs of the chips shipped in
that period. In 2006, significant unit volume growth was driven by products
which incorporate chips with lower ASPs including ultra low cost handsets,
smartcards, microcontrollers and Bluetooth chips. As a result, the ARR in 2006
was 6.7 cents compared to 7.9 cents in 2005. For ARM, unit volume growth more
than compensated for the reduction in ARR and royalty revenues grew by 25%
year-on-year. Irrespective of the ARR, all royalty revenues earned are
effectively at 100% margin and thus represent incremental return on the
development cost of the ARM technology on which the royalty is earned.
In Q4, we continued to see an increase in the proportion of royalties earned
from newer ARM technology. The ARM9(TM) family of products accounted for 40% of
unit shipments with the ARM926EJ-S(TM) product accounting for 15% of total
shipments. Although, ARM11 technology-based shipments continued to grow, they
still comprise less than 1% of total shipments. The continued strength of
ARM7(TM) family shipments demonstrates the long revenue-earning lifespan of ARM
technology with approximately 70% of units shipped in 2006 being earned from
licenses that were signed before 2001.
PIPD licensing
ARM continued to make progress in 2006 towards achieving the long term strategic
goal of providing our physical IP to leading Integrated Device Manufacturer
(IDM) and Fabless semiconductor companies. Licensing momentum for our 65nm
physical IP products grew, with 12 new licenses signed in the year. By the end
of 2006, we had signed a total of 22 65nm licenses to 10 companies, including
TSMC, UMC, Fujitsu, IBM, Chartered and Samsung. Further, we also signed seven
licenses for physical IP with four foundries (TSMC, IBM, Samsung, and Chartered)
at the most advanced process of 45nm.
With acceleration of technology development progressing in PIPD, we continue
regularly to sign synergistic licenses that we believe have been enabled by the
combination of ARM and Artisan technologies. Synergistic licenses signed in 2006
included those for leading-edge technology with Fujitsu and Samsung, whereby the
physical IP licensed can be used both as part of their foundry activities and in
their internal chip development activities, and with UMC the license was taken
to satisfy a physical IP design win with a large fabless semiconductor company.
Q4 PIPD Licensing Analysis - 287 cumulative physical IP licenses
180nm 130nm 90nm 65nm 45nm Total
----------------------------------------------------------------------------
Platform Licenses
Classic(TM) 1 1
Metro(TM) 1 1 3 5
Advantage(TM) 1 1 3 5
----------------------------------------------------------------------------
Standard Cell Libraries
Classic 2 2
Metro 3 3
Advantage 3 3
----------------------------------------------------------------------------
Memory Compilers
Classic 2 2 4
----------------------------------------------------------------------------
Velocity PHYs 1 1
----------------------------------------------------------------------------
Total 24
--------------
PIPD royalties
PIPD continued to see strong momentum in royalties with a 26% growth in both
total and underlying royalties. Sales at the 130nm and 90nm process nodes
continued to be the fastest growing segments for PIPD, although more than half
of royalties received in 2006 came from older geometries.
Total catch-up royalties in 2006 were $3.1 million, 30% up on 2005. Since
establishing an enhanced process internally in mid 2005 to improve the
timeliness and visibility of PIPD royalty revenues, we have seen catch-up
royalties being reported on a regular basis. Whilst we expect this process to
improve the quality of royalty reporting over time, there is still much work to
do and we would expect catch-up royalties to continue to be reported in 2007.
Development Systems
Q4 was a record quarter for Development Systems both in terms of revenue and
bookings, with continued strong bookings reflecting the desire of a growing
number of customers to enter into long-term commercial and technical
relationships for Development Systems products. For example, during the year ARM
saw a 65% increase in the bookings for Electronic System Level (ESL) tools that
were derived from the acquisition of Axys in 2004, reflecting the increasing
importance that our partners are attaching to the fast-growing ESL tools market.
Emerging Business Units
Today, ARM generates most of its revenues from PD, PIPD, Development Systems and
Services. We are, however, also investing in four emerging business units -
Fabric, Graphics, Data Engines and Embedded Software - which we believe are
complementary to our more developed businesses and in each case offer
opportunity for profitable growth in the medium term. In 2006, these business
units generated a small proportion of total group revenues but accounted in
aggregate for some 10% of total group costs. By 2010, we anticipate that these
businesses will generate more than 10% of total group revenues.
In 2006, a number of significant milestones were reached in these business
units. In the Data Engines group, Toshiba announced that they had licensed our
Optimode technology and Broadcom introduced a new line of Bluetooth products
incorporating ARM AudioDE IP. In the Fabric IP division, Broadcom and Toshiba
licensed our Fabric IP solutions, reinforcing AMBA as the world's leading
interconnect standard. In the Embedded Software group, our TrustZone(R)
technology was licensed by Texas Instruments and it was announced that Samsung
had licensed and would incorporate Jazelle in their first commercially available
Blue-Ray disc players. Further, in Q4 we signed the first two licenses for the
graphics IP derived from the acquisition of Falanx Microsystems in May 2006. We
understand that one of these licenses is intended for use in mobile
applications, the other in non-mobile applications.
People
2006 has been a year of investment in headcount for ARM, with a net increase of
335 employees in the year. The focus of our investment has been in PIPD, where
we have invested in engineering resources in order to accelerate the development
of leading-edge physical IP products, and in our emerging business units (see
above). We anticipate headcount growth will be lower in 2007 as our investment
in people in 2006 yields productivity benefits. At the end of 2006 we had 1,659
full time employees compared to 1,324 at 31 December 2005. The group had 671
employees based in the UK, 582 in the US, 153 in Continental Europe, 203 in
India and 50 in the Asia Pacific Region.
We were delighted that the efforts of our people have been recognised recently
with the Company winning three prestigious awards available to businesses from
all sectors. In November 2006, ARM was chosen as UK Business of the Year at the
National Business Awards, an award taking account of market leadership,
innovation, growth and financial return. In January 2007, ARM was recognised as
European Business of the Year, competing against the other national award
winners within the European Union. Further, at the Management Today awards in
November 2006 for Britain's Most Admired Companies, ARM was recognised as the
company with the 'greatest capacity to innovate.' Whilst these awards were for
companies with headquarters in the UK or the European Union, they recognise the
efforts of all ARM employees worldwide.
Legal matters
Nazomi
In May 2002, Nazomi Communications, Inc. ('Nazomi') filed suit against ARM
alleging wilful infringement of Nazomi's US Patent No. 6,332,215 (''215
Patent'). ARM answered Nazomi's complaint in July 2002 denying infringement.
ARM moved for summary judgment and a ruling that the technology does not
infringe Nazomi's patent. The United States District Court for the Northern
District of California granted ARM's motion, and Nazomi appealed the District
Court's ruling. In September 2004, the Court of Appeals for the Federal Circuit
heard the appeal and issued its decision in April 2005. Because, in the opinion
of the Court of Appeals for the Federal Circuit, the District Court did not
construe the disputed claim term in sufficient detail for appellate review, the
Court of Appeals for the Federal Circuit remanded the dispute back to the
District Court for further analysis. A supplementary 'Markman' hearing was
held in October 2005 to decide the construction of a fundamental term in the
'215 Patent and a decision on claim construction was delivered on 6 September
2006. The decision emphatically supports ARM's construction of the relevant term
and consequently strongly supports ARM's non-infringement arguments. In December
2006, ARM filed a renewed motion for summary judgement and a ruling that the
accused technology does not infringe the '215 patent. On 17 January 2007 Nazomi
filed a response to ARM's renewed motion for summary judgement in which they
stipulated that, based on the claim construction delivered by the District
Court, the ARM technology accused in the suit does not infringe the '215 patent
but also objected to the claim construction delivered by the District Court and
indicated their intention to appeal the claim construction to the Court of
Appeals for the Federal Circuit.
TPL Group
In October 2005, Technology Properties Limited, Inc. ('TPL') filed suit, in the
United States District Court for the Eastern District of Texas (Marshall
Division), against certain companies in the Fujitsu, Matsushita, NEC and Toshiba
groups of companies alleging infringement of TPL's US Patents Nos. 5,809,336;
5,784,584 and 6,598,148 (the 'Litigation'). All of the defendants are licensees
of various ARM technologies. It was revealed as part of the preliminary
infringement contentions in the Litigation, filed in July 2006, that certain ARM
technology is alleged to infringe a single claim in US Patent No. 5,784,584 (the
''584 Patent'). In September 2006 ARM filed a motion to intervene in the
Litigation and that motion has been granted. ARM is now a defendant party in the
Litigation. The claim construction (or 'Markman') hearing is scheduled for May
2007 and the trial date is scheduled for November 2007. Based on legal advice
and written opinions received from external counsel, ARM is confident that the
accused ARM technology does not infringe any of the claims of the '584 Patent or
that the patent is invalid. ARM has voluntarily joined as a party to the
Litigation to proactively defend its technology against ill conceived and false
infringement allegations and fully expects to prove the case for
non-infringement or invalidity in the course of the Litigation.
ARM Holdings plc
Fourth Quarter and Annual Results - US GAAP
Quarter Quarter Year Year
ended ended ended ended
31 December 31 December 31 December 31 December
2006 2005 2006 2005
Unaudited Unaudited Unaudited Audited
--------- --------- --------- ---------
£'000 £'000 £'000 £'000
Revenues
Product revenues 63,582 58,828 247,194 217,711
Service revenues 4,462 4,065 16,060 14,728
--------- --------- --------- ---------
Total revenues 68,044 62,893 263,254 232,439
--------- --------- --------- ---------
Cost of revenues
Product costs (5,933) (4,313) (24,156) (19,265)
Service costs (1,946) (1,579) (6,721) (6,093)
--------- --------- --------- ---------
Total cost of revenues (7,879) (5,892) (30,877) (25,358)
--------- --------- --------- ---------
--------- --------- --------- ---------
Gross profit 60,165 57,001 232,377 207,081
--------- --------- --------- ---------
Research and development (22,868) (15,613) (75,498) (60,051)
Sales and marketing (12,638) (9,061) (44,198) (34,102)
General and administrative (12,189) (10,959) (48,643) (37,558)
Deferred stock-based
compensation - (2,465) - (9,727)
Amortization of intangibles
purchased through
business combination (4,700) (4,809) (19,018) (17,726)
--------- --------- --------- ---------
Total operating expenses (52,395) (42,907) (187,357) (159,164)
--------- --------- --------- ---------
Income from operations 7,770 14,094 45,020 47,917
Interest 1,581 1,684 6,758 5,317
Profit on disposal of
available-for-sale
security - - 5,270 -
--------- --------- --------- ---------
Income before income
tax and cumulative
effect of accounting
change 9,351 15,778 57,048 53,234
Provision for income
taxes 2,712 (2,801) (9,438) (11,354)
--------- --------- --------- ---------
Net income before
cumulative effect of
accounting change 12,063 12,977 47,610 41,880
Cumulative effect of
accounting change, net
of tax - - (2,447) -
--------- --------- --------- ---------
Net income after
cumulative effect of
accounting change 12,063 12,977 45,163 41,880
--------- --------- --------- ---------
Other comprehensive income:
Foreign currency adjustments (25,290) 16,538 (68,128) 58,561
Unrealized holding
gain/(loss) on
available-for-sale
securities, net of tax
benefit of £66,000 (Q4
2005: charge £236,000;
FY 2006: £476,000; FY
2005: £981,000) (156) 452 (1,090) (2,316)
--------- --------- --------- ---------
Total comprehensive
income / (loss) (13,383) 29,967 (24,055) 98,125
--------- --------- --------- ---------
Earnings per share (assuming
dilution)
Shares outstanding ('000) 1,380,581 1,431,084 1,404,751 1,427,036
Earnings per share - pence 0.9 0.9 3.2 2.9
Earnings per ADS (assuming
dilution)
ADSs outstanding ('000) 460,194 477,028 468,250 475,679
Earnings per ADS - cents 5.1 4.7 18.9 15.1
ARM Holdings plc
Consolidated balance sheet - US GAAP
31 December 31 December
2006 2005
Unaudited Audited
----------- -----------
£'000 £'000
Assets
Current assets:
Cash and cash equivalents 90,743 128,077
Short-term investments 18,600 23,990
Marketable securities 19,151 8,835
Accounts receivable, net of allowance of
£2,556,000 in 2006 and £2,173,000 in 2005 69,552 55,518
Inventory: finished goods 1,933 1,490
Income taxes receivable 5,761 -
Prepaid expenses and other assets 12,668 12,567
----------- -----------
Total current assets 218,408 230,477
Deferred income taxes 9,872 4,422
Prepaid expenses and other assets 1,328 1,674
Property and equipment, net 13,970 12,803
Goodwill 349,243 385,572
Other intangible assets 56,027 72,345
Investments 3,855 8,800
----------- -----------
Total assets 652,703 716,093
----------- -----------
Liabilities and shareholders' equity
Accounts payable 1,826 2,221
Income taxes payable 5,572 10,826
Personnel taxes 1,408 1,329
Accrued liabilities 33,021 25,024
Deferred revenue 31,485 20,354
----------- -----------
Total current liabilities 73,312 59,754
Deferred income taxes 4,744 7,289
----------- -----------
Total liabilities 78,056 67,043
----------- -----------
Shareholders' equity
Ordinary shares 694 693
Additional paid-in capital 444,711 425,252
Deferred compensation - (4,404)
Treasury stock, at cost (55,363) (16,315)
Retained earnings 196,287 183,913
Accumulated other comprehensive income:
Unrealized holding gain on available-for-sale
securities, net of tax of £230,000 (2005:
£1,096,000) 394 3,859
Cumulative translation adjustment (12,076) 56,052
----------- -----------
Total shareholders' equity 574,647 649,050
----------- -----------
Total liabilities and shareholders' equity 652,703 716,093
----------- -----------
ARM Holdings plc
Consolidated income statement - IFRS
Year Year
ended ended
31 December 31 December
2006 2005
Unaudited Audited
----------- -----------
£'000 £'000
Revenues
Product revenues 247,194 217,711
Service revenues 16,060 14,728
----------- -----------
Total revenues 263,254 232,439
----------- -----------
Cost of revenues
Product costs (24,156) (19,265)
Service costs (see note 2) (6,669) (7,345)
----------- -----------
Total cost of revenues (30,825) (26,610)
----------- -----------
----------- -----------
Gross profit 232,429 205,829
----------- -----------
Operating expenses
Research and development (see note 2) (84,494) (80,273)
Sales and marketing (see note 2) (53,180) (47,389)
General and administrative (see note 2) (50,127) (43,010)
Profit on disposal of available-for-sale security 5,270 -
----------- -----------
Total net operating expenses (182,531) (170,672)
----------- -----------
----------- -----------
Profit from operations 49,898 35,157
Investment income 6,758 5,317
----------- -----------
Profit before tax 56,656 40,474
Tax* (8,068) (10,827)
----------- -----------
Profit for the year 48,588 29,647
----------- -----------
Dividends
- final 2004 paid (on 6 May 2005) at 0.42 pence
per share - 5,759
- interim 2005 paid (on 7 October 2005) at 0.34
pence per share - 4,677
- final 2005 paid (on 5 May 2006) at 0.5 pence per
share 6,918 -
- interim 2006 paid (on 6 October 2006) at 0.4
pence per share 5,449 -
Earnings per share
Basic and diluted earnings 48,588 29,647
Number of shares ('000)
Basic weighted average number of shares 1,366,816 1,369,335
Effect of dilutive securities:
Share options 35,145 55,027
Diluted weighted average number of shares 1,401,961 1,424,362
Basic EPS 3.6p 2.2p
Diluted EPS 3.5p 2.1p
All activities relate to continuing operations.
All of the profit for the period is attributable to the equity shareholders of
the parent.
* Tax comprises £7.2 million of UK taxation and a credit of £0.9 million of
overseas taxation.
ARM Holdings plc
Consolidated balance sheet - IFRS
31 December 31 December
2006 2005
Unaudited Audited
---------- ----------
£'000 £'000
Assets
Current assets:
Cash and cash equivalents 90,743 128,077
Financial assets: Short-term investments 18,600 23,990
Short-term marketable securities 19,151 8,835
Fair value of currency exchange contracts 439 -
Accounts receivable 69,552 55,518
Prepaid expenses and other assets 12,229 12,567
Current tax assets 5,761 -
Inventories: finished goods 1,933 1,490
---------- ----------
Total current assets 218,408 230,477
---------- ----------
Non-current assets:
Financial assets: Available-for-sale investments 3,855 8,800
Prepaid expenses and other assets 1,328 1,674
Property, plant and equipment 10,296 8,990
Goodwill 428,366 474,430
Other intangible assets 62,913 79,743
Deferred tax assets 19,090 13,633
---------- ----------
Total non-current assets 525,848 587,270
---------- ----------
---------- ----------
Total assets 744,256 817,747
---------- ----------
Liabilities and shareholders' equity
Current liabilities:
Accounts payable 1,826 2,221
Current tax liabilities 5,572 10,826
Accrued and other liabilities 36,119 26,598
Financial liabilities: Fair value of currency
exchange contracts - 1,708
Deferred revenue 31,485 20,354
---------- ----------
Total current liabilities 75,002 61,707
---------- ----------
---------- ----------
Net current assets 143,406 168,770
---------- ----------
Non-current liabilities:
Deferred tax liabilities 6,050 9,193
---------- ----------
Total liabilities 81,052 70,900
---------- ----------
---------- ----------
Net assets 663,204 746,847
---------- ----------
Capital and reserves attributable to equity holders of
the Company
Share capital 694 693
Share premium account 447,901 447,091
Share option reserve 61,474 61,474
Retained earnings 165,026 166,656
Revaluation reserve (544) 2,921
Cumulative translation adjustment (11,347) 68,012
---------- ----------
Total equity 663,204 746,847
---------- ----------
ARM Holdings plc
Consolidated cash flow statement - IFRS
Year Year
ended ended
31 December 31 December
2006 2005
Unaudited Audited
---------- ----------
£'000 £'000
Operating activities
Profit from operations 49,898 35,157
Depreciation and amortisation of tangible and
intangible assets 26,726 28,608
Profit on disposal of available-for-sale security (5,270) -
Loss on disposal of property, plant and equipment 63 16
Impairment of available-for sale investments - 337
Compensation charge in respect of share-based
payments 17,437 20,863
Provision for doubtful debts 255 722
Provision for obsolescence of inventory 65 22
Changes in working capital:
Accounts receivable (18,082) (21,247)
Inventories (508) (519)
Prepaid expenses and other assets 1,015 (61)
Fair value of currency exchange contracts (2,147) 3,382
Accounts payable (672) (1,931)
Deferred revenue 10,844 (2,043)
Accrued and other liabilities 4,723 (7,199)
---------- ----------
Cash generated by operations before tax 84,347 56,107
Income taxes paid (21,147) (14,447)
---------- ----------
Net cash from operating activities 63,200 41,660
---------- ----------
Investing activities
Interest received 6,636 5,444
Purchases of property, plant and equipment (7,189) (5,492)
Proceeds on disposal of property, plant and
equipment 31 37
Purchases of other intangible assets (1,370) (572)
Purchases of available-for-sale investments (165) (274)
Proceeds on disposal of available-for-sale
investments 5,567 96
Purchase of short-term investments (4,926) (599)
Purchases of subsidiaries, net of cash acquired (17,270) (20,304)
---------- ----------
Net cash used in investing activities (18,686) (21,664)
---------- ----------
Financing activities
Issue of shares 811 13,921
Purchase of own shares (76,519) (16,211)
Issue of treasury shares 17,049 -
Dividends paid to shareholders (12,367) (10,436)
---------- ----------
Net cash used in financing activities (71,026) (12,726)
---------- ----------
Net (decrease) / increase in cash and cash
equivalents (26,512) 7,270
Cash and cash equivalents at beginning of year 128,077 110,561
Effect of foreign exchange rate changes (10,822) 10,246
---------- ----------
Cash and cash equivalents at end of year 90,743 128,077
---------- ----------
Notes to the Financial Information
(1) Basis of preparation
US GAAP
The financial information prepared in accordance with the Group's US GAAP
accounting policies comprises the consolidated balance sheets as of 31 December
2006 and 31 December 2005 and related income statements for the years then
ended, together with related notes. In preparing this financial information
management has used the principal accounting policies as set out in the Group's
annual financial statements and form 20-F for the year ended 31 December 2005,
except in relation to changes in respect of accounting for share-based payments
following the adoption of FAS123(R) on 1 January 2006. The Group has elected to
use the modified prospective methodology in its application of this standard.
In order to aid comparability, the 2005 income statement caption 'Deferred
stock-based compensation' has not been re-analysed between the functional
expenses categories in this press release. In the Group's financial statements
on form 20-F, it is expected that this item will be re-analysed as follows: £4.4
million within cost of sales, £1.4 million within research and development
costs, £1.6 million within sales and marketing costs and £2.3 million within
general and administrative costs.
International Financial Reporting Standards
The financial information prepared in accordance with the Group's IFRS
accounting policies comprises the consolidated balance sheets as of 31 December
2006 and 31 December 2005 and related consolidated statements of income and cash
flows for the years then ended, together with related notes. This financial
information has been prepared in accordance with the Listing Rules of the
Financial Services Authority. In preparing this financial information management
has used the principal accounting policies as set out in the Group's annual
financial statements for the year ended 31 December 2005.
(2) Share-based compensation charges and acquisition-related expenses
Included within the US GAAP income statement for the quarter ended 31 December
2006 are share-based compensation charges of £6.2 million: £0.4 million in cost
of revenues, £3.6 million in research and development costs, £1.2 million in
sales and marketing costs and £1.0 million in general and administrative costs.
Included within the US GAAP income statement for the year ended 31 December 2006
are share-based compensation charges of £21.8 million: £1.1 million in cost of
revenues, £10.6 million in research and development costs, £3.7 million in sales
and marketing costs, £2.9 million in general and administrative costs and £3.5
million within the cumulative effect of accounting change. This charge on
accounting change arises as a re-measurement adjustment for liability-classified
awards on cumulative share-based compensation for earlier years on adoption of
FAS123(R).
Included within the IFRS income statement for the year ended 31 December 2006
are total share-based payment costs of £17.4 million (year ended 31 December
2005: £20.9 million), allocated £1.0 million (2005: £1.3 million) in cost of
revenues, £10.1 million (2005: £12.1 million) in research and development costs,
£3.5 million (2005: £4.2 million) in sales and marketing costs and £2.8 million
(2005: £3.3 million) in general and administrative costs.
Also included within IFRS operating costs for the year ended 31 December 2006 is
amortization of intangibles acquired on acquisition of £19.3 million (year ended
31 December 2005: £17.9 million), allocated £9.5 million (2005: £8.1 million) in
research and development costs, £9.1 million (2005: £9.1 million) in sales and
marketing costs and £0.7 million (2005: £0.7 million) in general and
administrative costs.
(3) Accounts receivable
Included within accounts receivable at 31 December 2006 are £23.8 million (2005:
£20.5 million) of amounts recoverable on contracts.
(4) Consolidated statement of changes in shareholders' equity (US GAAP)
Additional Deferred Unrealized Cumulative
Share paid-in compen- Treasury Retained holding translation
capital capital -sation stock earnings gain adjustment Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2006 693 425,252 (4,404) (16,315) 183,913 3,859 56,052 649,050
Shares issued on exercise of
options 1 810 - - - - - 811
Net income - - - - 45,163 - - 45,163
Dividends - - - - (12,367) - - (12,367)
Realized gain on
available-for-sale security - - - - - (2,375) - (2,375)
Unrealized holding losses on
available-for-sale securities - - - - - (1,090) - (1,090)
Tax effect of option exercises - 3,682 - - - - - 3,682
Netting of deferred compensation* - (4,404) 4,404 - - - - -
Amortization of deferred
compensation - 19,371 - - - - - 19,371
Issuance of shares - - - 37,471 (20,422) - - 17,049
Purchase of own shares - - - (76,519) - - - (76,519)
Currency translation adjustment - - - - - - (68,128) (68,128)
-----------------------------------------------------------------------------------------------------------------------
At 31 December 2006 694 444,711 - (55,363) 196,287 394 (12,076) 574,647
-----------------------------------------------------------------------------------------------------------------------
* FAS123(R) requires that deferred stock-based compensation on the date of
adoption be netted against additional paid-in capital.
(5) Consolidated statement of changes in shareholders' equity (IFRS)
Share Share Reval- Cumulative
Share premium option Retained -uation translation
capital account reserve earnings reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2006 693 447,091 61,474 166,656 2,921 68,012 746,847
Shares issued on exercise of
options 1 810 - - - - 811
Profit for the period - - - 48,588 - - 48,588
Dividends - - - (12,367) - - (12,367)
Credit in respect of employee share
schemes - - - 17,437 - - 17,437
Movement on deferred tax arising on
outstanding share options - - - 4,182 - - 4,182
Purchase of own shares - - - (76,519) - - (76,519)
Proceeds from sale of own shares - - - 17,049 - - 17,049
Realized gain on available-for-sale
security - - - - (2,375) - (2,375)
Unrealized holding losses on
available-for-sale investments (net
of deferred tax of £477,000) - - - - (1,090) - (1,090)
Currency translation adjustment - - - - - (79,359) (79,359)
-----------------------------------------------------------------------------------------------------------------
At 31 December 2006 694 447,901 61,474 165,026 (544) (11,347) 663,204
-----------------------------------------------------------------------------------------------------------------
(6) Summary of significant differences between US GAAP and IFRS
Goodwill
Under both IFRS and US GAAP, goodwill is not subject to amortisation,
but is tested at least annually for impairment. As permitted by IFRS 1, the
Company's goodwill under IFRS has been frozen at the amount recorded under UK
GAAP as at 1 January 2004. Under US GAAP, following the provisions of SFAS 142,
'Goodwill and other intangible assets', the carrying value of goodwill was
frozen at the amount recorded under previous US GAAP as at 1 January 2002. Under
both previous US GAAP and UK GAAP, goodwill was amortised over its useful
economic life. Thus, while ongoing accounting policies in respect of goodwill
are similar under US GAAP and IFRS, the difference in the dates of transition
means that different amounts of goodwill are recorded.
Under US GAAP, certain costs to be incurred on restructuring on business
combination are treated as a fair value adjustment in the balance sheet
acquired. Under IFRS, these costs are expensed post-acquisition. Additionally,
under US GAAP, tax benefits arising from the exercise of options issued as part
of the consideration for a business combination become a deduction to goodwill,
only to the extent that those benefits do not exceed the fair value of the
consideration relating to those options at the appropriate tax rate. Any excess
tax benefits are a deduction to equity. Under IFRS, the full tax benefit is a
deduction to equity.
The 2004 annual report included a provisional assessment of the fair values of
assets and liabilities acquired on acquisition of Artisan Components Inc. on 23
December 2004. Where these provisional values were amended as estimates were
refined in 2005, adjustments to fair values were recorded as prior year
adjustments to goodwill for IFRS purposes in 2004. Under US GAAP, these were
recorded as amendments to goodwill in 2005.
Recognition and amortisation of intangibles
The Company has taken advantage of the exemption under IFRS 1 not to apply IFRS
retrospectively to business combinations occurring before 1 January 2004. This
means that for business combinations occurring before this date, the previously
reported UK GAAP treatment has continued to be followed. Under previous UK GAAP,
intangible assets were recognised separately from goodwill only where they could
be sold separately without disposing of a business of the entity. This
separability criterion does not apply under either IFRS or US GAAP. Thus, a
number of intangible assets which are required to be recognised separately from
goodwill under both IFRS 3 and SFAS 142, were subsumed within goodwill under UK
GAAP. Under both US GAAP and IFRS, such intangible assets are amortised over
their useful economic lives. Except in relation to in-process research and
development (see below), there is no difference in accounting policy for
intangible assets recognised as a result of business combinations entered into
after 1 January 2004.
In-process research and development
Under IFRS, in-process research and development projects purchased as part of a
business combination may meet the criteria set out in IAS 38, 'Intangible
assets', for recognition as intangible assets other than goodwill and are
amortised over their useful economic lives commencing when the asset is brought
into use. Under US GAAP, in-process research and development is immediately
written-off to the income statement. This accounting policy difference gives
rise to an associated difference in deferred taxation.
Valuation of consideration on business combination
Under both IFRS and US GAAP, the fair value of consideration in a business
combination includes the fair value of both equity issued and any share options
granted as part of that combination. Under IFRS, any equity issued is valued at
the fair value as of the date of completion, whilst under US GAAP, the equity is
valued at the date the terms of the combination were agreed to and announced.
For options, under US GAAP, the fair value is based upon the total number of
options granted, both vested and unvested, whilst under IFRS the fair value only
includes those that have vested, together with a pro-rata value for partially
vested options. Furthermore, where there is contingent consideration for an
acquisition, under IFRS this is recognized as part of the purchase consideration
if the contingent conditions are expected to be satisfied, whilst under US GAAP
it is only recognised if the conditions have actually been met, other than to
the extent to eliminate any potential negative goodwill under US GAAP.
Deferred compensation
Under US GAAP, the intrinsic value of unvested stock options issued by an
acquirer as part of a business combination in exchange for unvested share
options of the acquiree is recorded as a debit balance within shareholders'
funds. This amount is charged to the profit and loss account over the vesting
period of the share options in accordance with FIN 28. Under IFRS, no such
adjustment to shareholders' funds is made on acquisition. Following the adoption
of FAS123(R), the unamortised balance has been transferred to additional paid-in
capital.
Compensation charge in respect of share-based payments
The Company issues equity-settled share-based payments to certain employees. In
accordance with IFRS 2, equity-settled share-based payments are measured at fair
value at the date of grant, using the Black-Scholes pricing model. The fair
value determined at the grant date of the equity-settled share-based payments is
expensed on a straight-line basis over the vesting period, based on the
Company's estimate of the number of shares that will eventually vest. Under US
GAAP, the Company is required, effective as of 1 January 2006, to adopt FAS No.
123 (revised 2004) (FAS123(R)), 'Share-based payment'. FAS123(R) requires the
Company to expense share-based payments, including employee stock-options, based
on their fair value. The Company has elected to utilize the 'modified
prospective' method of adoption, such that compensation cost is recognized
beginning with the effective date (i) based on the requirements of FAS123(R) for
all share-based payments granted after the effective date and (ii) based on the
requirements of FAS123(R) for all awards granted to employees prior to the
effective date of FAS123(R) that remain unvested on the effective date.
Some awards made by the Company are liability-classified awards under FAS123(R)
as either: (i) there is an obligation to settle a fixed monetary amount in a
variable number of shares; or (ii) the award is indexed to a factor other than
performance, market or service condition. The fair value of these awards is
re-measured at each period end until the award has vested. Once the award has
vested, or for (i) above when number of shares becomes fixed, the award becomes
equity-classified.
In 2005 under US GAAP, the company had elected to use the intrinsic value-based
method to account for all its employee stock-based compensation plans, under the
recognition and measurement principles of APB Opinion No. 25, 'Accounting for
stock issued to employees', and related interpretations. Thus no compensation
expense was recorded in 2005 where the exercise price of the option was equal to
the share price on the date of grant.
In 2005 under US GAAP, the Company recognised a compensation charge in respect
of the UK SAYE plans. The compensation charge was calculated as the difference
between the market price of the shares at the date of grant and the exercise
price of the option and was recorded on a straight-line basis over the savings
period. In addition, certain options attracted a charge under variable plan
accounting under US GAAP. Under IFRS, this charge is calculated in the same
manner as other share-based payments, as detailed above.
In 2005 under US GAAP, the Company followed variable plan accounting for the
LTIP grants, measuring compensation expense as the difference between the
exercise price and the fair market value of the shares at each period end over
the vesting period of the options. Increases in fair market value of the shares
resulted in a charge and decreases in fair market value of the shares resulted
in a credit, subject to the cumulative amount previously expensed. Under IFRS,
this charge is calculated in the same manner as other share-based payments, as
detailed above.
Deferred tax on UK and US share options
In the US and the UK, the Company is entitled to a tax deduction for the amount
treated as employee compensation under US and UK tax rules on exercise of
certain employee share options. The compensation is equivalent to the difference
between the option exercise price and the fair market value of the shares at the
date of exercise.
Under IFRS, deferred tax assets are recognised and are calculated by comparing
the estimated amount of tax deduction to be obtained in the future (based on the
Company's share price at the balance sheet date) with the cumulative amount of
the compensation expense recorded in the income statement. If the amount of
estimated future tax deduction exceeds the cumulative amount of the remuneration
expense at the statutory tax rate, the excess is recorded directly in equity,
against the profit and loss reserve. In accordance with the transitional
provisions of IFRS 2, no compensation charge is recorded in respect of options
granted before 7 November 2002 or in respect of those options which have been
exercised or have lapsed before 31 December 2004. Nevertheless, tax deductions
have arisen and will continue to arise on these options. The tax effects arising
in relation to these options are recorded directly in equity, against retained
earnings.
Under US GAAP, deferred tax assets are recognised by multiplying the
compensation expense recorded by the prevailing tax rate in the relevant tax
jurisdiction. Where, on exercise of the relevant option, the tax benefit
obtained exceeds the deferred tax asset in relation to the relevant options, the
excess is recorded in additional paid-in capital. Where the tax benefit is less
than the deferred tax asset, the write-down of the deferred tax asset is
recorded against additional paid-in capital to the extent of previous excess tax
benefits recorded in this account, with any remainder recorded in the income
statement.
Employer taxes on share options
Under IFRS, employer's taxes that are payable on the exercise of share options
are provided for over the vesting period of the options. Under US GAAP, such
taxes are accounted for when the options are exercised.
Provisions for legal costs
Under IFRS, future legal fees that the Company is expecting to incur on current
cases are accrued when the obligating event giving rise to the legal costs has
occurred. Under US GAAP, such costs are charged to the income statement in the
period in which the costs are incurred.
Reconciliation of IFRS profit to US GAAP net income Year ended Year ended
31 December 31 December
2006 2005
Unaudited Audited
--------- ---------
£'000 £'000
Profit for financial period as reported under IFRS 48,588 29,647
Adjustments for:
Amortisation of intangibles 914 548
Write-off of in-process research and development (595) (335)
Deduct: US GAAP compensation charge in respect of
LTIP - (3,814)
Deduct : US GAAP compensation charge in respect of
SAYE schemes - (417)
Deduct : US GAAP deferred stock-based compensation
re acquisition - (5,496)
Deduct : US GAAP compensation charge in respect of
all share-based payments (21,787) -
Add: IFRS compensation charge in respect of all
share-based payments 17,437 20,863
Employer's taxes on share options 8 3
Utilisation of restructuring provision - 1,368
Provision for legal costs (net of tax) 715 -
Foreign exchange on contingent consideration (104) 40
Tax on share option exercises (2,204) (370)
Tax difference on amortisation of intangibles (378) (248)
Tax difference on share-based payments 2,569 91
--------- ---------
Net income as reported under US GAAP 45,163 41,880
--------- ---------
Reconciliation of shareholders' equity from IFRS 31 December 31 December
to US GAAP 2006 2005
Unaudited Audited
--------- ---------
£'000 £'000
Shareholders' equity as reported under IFRS 663,204 746,847
Adjustments for:
Employer's taxes on share options 38 30
Utilisation of restructuring provision 1,368 1,368
Provision for legal costs (net of tax) 715 -
Liability-classified share awards (2,416) -
Cumulative difference on amortisation of goodwill 2,713 2,713
Cumulative difference on amortisation of
intangibles 1,355 441
Cumulative write-off of in-process research and
development (4,692) (4,097)
Cumulative difference on deferred tax (642) (263)
Valuation of equity consideration on acquisition (82,435) (82,435)
Valuation of option consideration on acquisition 17,476 17,476
Deferred compensation on acquisition (9,579) (9,579)
Deferred tax on share-based payments (8,911) (8,775)
Portion of tax benefit arising on exercise of
options issued on acquisition taken to goodwill
under US GAAP (4,844) (4,844)
Foreign exchange on valuation of intangible assets
and deferred tax 1,358 (9,872)
Foreign exchange on valuation of contingent
consideration (61) 40
--------- ---------
Shareholders' equity as reported under US GAAP 574,647 649,050
--------- ---------
Reconciliation of goodwill from IFRS to US GAAP 31 December 31 December
2006 2005
Unaudited Audited
--------- ---------
£'000 £'000
Goodwill as reported under IFRS 428,366 474,430
Adjustments for:
Valuation of restructuring provision on
acquisition 1,235 1,235
Cumulative difference on amortisation of goodwill 2,713 2,713
Cumulative write-off of in-process research and
development (150) (150)
Separately identifiable intangible assets (302) (302)
Deferred tax on capitalised in-process research
and development (1,570) (1,570)
Portion of tax benefit arising on exercise of
options issued on (4,248) (4,248)
acquisition taken to goodwill under US GAAP
Valuation of equity consideration on acquisition (82,435) (82,435)
Valuation of option consideration on acquisition 17,476 17,476
Deferred compensation on acquisition (9,579) (9,579)
Contingent consideration (3,117) (1,864)
Foreign exchange on revaluation of goodwill 854 (10,134)
--------- ---------
Goodwill as reported under US GAAP 349,243 385,572
--------- ---------
(7) Non-GAAP measures
The following non-GAAP measures, including reconciliations to the US GAAP
measures, have been used in this earnings release. These measures have been
presented as they allow a clearer comparison of operating results that exclude
one-off non-recurring charges, acquisition-related charges and profit on
disposal of available-for-sale investments. All figures in £'000 unless
otherwise stated.
(7.1) (7.2) (7.3) (7.4) (7.5)
Q4 2006 Q3 2006 Q4 2005 FY 2006 FY 2005
Income from operations (US GAAP) 7,770 10,949 14,094 45,020 47,917
Acquisition-related charge - amortization of
intangibles 4,700 4,645 4,809 19,018 17,726
Acquisition-related charge - deferred
stock-based compensation - - 479 - 5,496
Acquisition-related charge - other payments 1,057 - - 1,057 -
Other stock-based compensation and related
payroll taxes 6,177 3,904 2,628 18,292 4,873
--------------------------------------------------------------------------------------------------
Normalised income from operations 19,704 19,498 22,010 83,387 76,012
--------------------------------------------------------------------------------------------------
As % of revenue 29.0% 30.1% 35.0% 31.7% 32.7%
(7.6) (7.7) (7.8) (7.9) (7.10)
Q4 2006 Q3 2006 Q4 2005 FY 2006 FY 2005
Income before income tax (US GAAP) 9,351 12,634 15,778 57,048 53,234
Acquisition-related charge - amortization
of intangibles 4,700 4,645 4,809 19,018 17,726
Acquisition-related charge - deferred
stock-based compensation - - 479 - 5,496
Acquisition-related charge - other payments 1,057 - - 1,057 -
Other stock-based compensation and related
payroll taxes 6,177 3,904 2,628 18,292 4,873
Profit on sale of available-for-sale
investment - - - (5,270) -
--------------------------------------------------------------------------------------------------
Normalised income before income tax 21,285 21,183 23,694 90,145 81,329
--------------------------------------------------------------------------------------------------
(7.11) (7.12) (7.13)
31 30 31
December September December
2006 2006 2005
Cash and cash equivalents 90,743 103,472 128,077
Short-term investments 18,600 26,427 23,990
Short-term marketable securities 19,151 17,520 8,835
--------------------------------------------------------------------------------------------------
Normalised cash 128,494 147,419 160,902
--------------------------------------------------------------------------------------------------
(7.14) (7.15) (7.16) (7.17) (7.18)
Q4 2006 Q3 2006 Q4 2005 FY 2006 FY 2005
Normalised cash at end of period (as above) 128,494 147,419 160,902 128,494 160,902
Less: Normalised cash at beginning of period (147,419) (148,806) (164,737) (160,902) (142,817)
Add back: Cash outflow from acquisitions
(net of cash acquired) 3,305 16 4,264 17,270 20,304
Add back: Cash outflow from payment of
dividends 5,449 - 4,677 12,367 10,436
Add back: Cash outflow from purchase of own
shares 25,840 21,593 10,773 76,519 16,211
Less: Cash inflow from exercise of share
options (2,349) (2,352) (1,033) (17,860) (13,921)
Less: Cash inflow from sale of
available-for-sale investments - - - (5,567) (96)
--------------------------------------------------------------------------------------------------
Normalised cash generation 13,320 17,870 14,846 50,321 51,019
--------------------------------------------------------------------------------------------------
(7.19) (7.20) (7.21) (7.22) (7.23)
Q4 2006 Q3 2006 Q4 2005 FY 2006 FY 2005
Net income (US GAAP) 12,063 9,391 12,977 45,163 41,880
Acquisition-related charge - amortization
of intangibles 4,700 4,645 4,809 19,018 17,726
Acquisition-related charge - deferred
stock-based compensation - - 479 - 5,496
Acquisition-related charge - other payments 1,057 - - 1,057 -
Other stock-based compensation and related
payroll taxes 6,177 3,904 2,628 21,788 4,873
Profit on sale of available-for-sale investment - - - (5,270) -
Estimated tax impact of above charges (3,477) (2,375) (3,346) (10,336) (8,912)
--------------------------------------------------------------------------------------------------
Normalised net income 20,520 15,565 17,547 71,420 61,063
--------------------------------------------------------------------------------------------------
Dilutive shares ('000) 1,380,581 1,395,642 1,431,084 1,404,751 1,427,036
Normalised diluted EPS 1.49p 1.12p 1.23p 5.08p 4.28p
(7.24) Normalised income statement for Q4 2006
Stock- Other
based Intangible acquisition
compens- amortisa- - related
Normalised ation tion charges US GAAP
---------- -------- ------- -------- -------
£'000 £'000 £'000 £'000 £'000
Revenues
Product
revenues 63,582 - - - 63,582
Service
revenues 4,462 - - - 4,462
-------- ------- ------- ------- --------
Total revenues 68,044 - - - 68,044
-------- ------- ------- ------- --------
Cost of
revenues
Product costs (5,933) - - - (5,933)
Service costs (1,575) (371) - - (1,946)
-------- ------- ------- ------- --------
Total cost of
revenues (7,508) (371) - - (7,879)
-------- ------- ------- ------- --------
-------- ------- ------- ------- --------
Gross profit 60,536 (371) - - 60,165
-------- ------- ------- ------- --------
Research and
development (18,242) (3,582) - (1,044) (22,868)
Sales and
marketing (11,403) (1,235) - - (12,638)
General and
administrative (11,187) (989) - (13) (12,189)
-------- ------- ------- ------- --------
Amortization
of intangibles
purchased
through
business
combination - - (4,700) - (4,700)
-------- ------- ------- ------- --------
Total
operating
expenses (40,832) (5,806) (4,700) (1,057) (52,395)
-------- ------- ------- ------- --------
Income from
operations 19,704 (6,177) (4,700) (1,057) 7,770
Interest 1,581 - - - 1,581
-------- ------- ------- ------- --------
Income before
income tax 21,285 (6,177) (4,700) (1,057) 9,351
Provision for
income taxes (765) 1,256 1,819 402 2,712
-------- ------- ------- ------- --------
Net income 20,520 (4,921) (2,881) (655) 12,063
-------- ------- ------- ------- --------
Earnings per
share
(assuming
dilution)
Shares
outstanding
('000) 1,380,581 1,380,581
Earnings per
share - pence 1.49 0.87
Earnings per
ADS (assuming
dilution)
ADSs
outstanding
('000) 460,194 460,194
Earnings per
ADS - cents 8.73 5.13
(7.25) Normalised income statement for Q4 2005
Stock-based Intangible
Normalised compensation amortisation US GAAP
---------- --------- --------- ---------
£'000 £'000 £'000 £'000
Revenues
Product revenues 58,828 - - 58,828
Service revenues 4,065 - - 4,065
-------- --------- --------- ---------
Total revenues 62,893 - - 62,893
-------- --------- --------- ---------
Cost of revenues
Product costs (4,313) - - (4,313)
Service costs (1,579) - - (1,579)
-------- --------- --------- ---------
Total cost of revenues (5,892) - - (5,892)
-------- --------- --------- ---------
-------- --------- --------- ---------
Gross profit 57,001 - - 57,001
-------- --------- --------- ---------
Research and development (15,454) (159) - (15,613)
Sales and marketing (8,925) (136) - (9,061)
General and administrative (10,612) (347) - (10,959)
Deferred stock-based
compensation - (2,465) - (2,465)
-------- --------- --------- ---------
Amortization
of intangibles
purchased through business
combination - - (4,809) (4,809)
-------- --------- --------- ---------
Total operating expenses (34,991) (3,107) (4,809) (42,907)
-------- --------- --------- ---------
Income from operations 22,010 (3,107) (4,809) 14,094
Interest 1,684 - - 1,684
-------- --------- --------- ---------
Income before income tax 23,694 (3,107) (4,809) 15,778
Provision for income taxes (6,147) 1,434 1,912 (2,801)
-------- --------- --------- ---------
Net income 17,547 (1,673) (2,897) 12,977
-------- --------- --------- ---------
Earnings per share (assuming
dilution)
Shares outstanding ('000) 1,431,084 1,431,084
Earnings per share - pence 1.23 0.91
Earnings per ADS (assuming
dilution)
ADSs outstanding ('000) 477,028 477,028
Earnings per ADS - cents 6.32 4.67
(7.26) Normalised income statement for FY 2006
Stock- Other
based Intangible acquisition
compens- amortisa- related Investment
Normalised ation tion* charges disposal US GAAP
--------- ------- ------- ------- ------- --------
£'000 £'000 £'000 £'000 £'000 £'000
Revenues
Product revenues 247,194 - - - - 247,194
Service revenues 16,060 - - - - 16,060
-------- ------- ------- ------- ------- --------
Total revenues 263,254 - - - - 263,254
-------- ------- ------- ------- ------- --------
Cost of revenues
Product costs (24,156) - - - - (24,156)
Service costs (5,623) (1,098) - - - (6,721)
-------- ------- ------- ------- ------- --------
Total cost of
revenues (29,779) (1,098) - - - (30,877)
-------- ------- ------- ------- ------- --------
-------- ------- ------- ------- ------- --------
Gross profit 233,475 (1,098) - - - 232,377
-------- ------- ------- ------- ------- --------
Research and
development (63,845) (10,609) - (1,044) - (75,498)
Sales and
marketing (40,540) (3,658) - - - (44,198)
General and
administrative (45,703) (2,927) - (13) - (48,643)
-------- ------- ------- ------- ------- --------
Amortization
of intangibles
purchased
through
business
combination - - (19,018) - - (19,018)
-------- ------- ------- ------- ------- --------
Total
operating
expenses (150,088) (17,194) (19,018) (1,057) - (187,357)
-------- ------- ------- ------- ------- --------
Income from
operations 83,387 (18,292) (19,018) (1,057) - 45,020
Interest 6,758 - - - - 6,758
Profit on
disposal of
available-for-
sale security - - - - 5,270 5,270
-------- ------- ------- ------- ------- --------
Income before
income tax
before
cumulative
effect of
accounting
change 90,145 (18,292) (19,018) (1,057) 5,270 57,048
Provision for
income taxes (18,725) 3,132 7,216 402 (1,463) (9,438)
-------- ------- ------- ------- ------- --------
Net income
before
cumulative
effect of
accounting
change 71,420 (15,160) (11,802) (655) 3,807 47,610
Cumulative
effect of
accounting
change, net of
tax - (2,447) - - - (2,447)
-------- ------- ------- ------- ------- --------
Net income
after
cumulative
effect of
accounting
change 71,420 (17,607) (11,802) (655) 3,807 45,163
-------- ------- ------- ------- ------- --------
Earnings per
share
(assuming dilution)
Shares outstanding
('000) 1,404,751 1,404,751
Earnings per
share - pence 5.08 3.22
Earnings per
ADS (assuming
dilution)
ADSs outstanding
('000) 468,250 468,250
Earnings per
ADS - cents 29.85 18.88
* intangible amortisation includes £595,000 of in-process research and
development write-off
(7.27) Normalised income statement for FY 2005
Stock-based Intangible
Normalised compensation amortisation* US GAAP
---------- --------- --------- ---------
£'000 £'000 £'000 £'000
Revenues
Product revenues 217,711 - - 217,711
Service revenues 14,728 - - 14,728
-------- --------- --------- ---------
Total revenues 232,439 - - 232,439
-------- --------- --------- ---------
Cost of revenues
Product costs (19,265) - - (19,265)
Service costs (6,093) - - (6,093)
-------- --------- --------- ---------
Total cost of revenues (25,358) - - (25,358)
-------- --------- --------- ---------
-------- --------- --------- ---------
Gross profit 207,081 - - 207,081
-------- --------- --------- ---------
Research and development (59,892) (159) - (60,051)
Sales and marketing (33,966) (136) - (34,102)
General and administrative (37,211) (347) - (37,558)
Deferred stock-based
compensation - (9,727) - (9,727)
-------- --------- --------- --------
Amortization of intangibles
purchased through business
combination - - (17,726) (17,726)
-------- --------- --------- ---------
Total operating expenses (131,069) (10,369) (17,726) (159,164)
-------- --------- --------- ---------
Income from operations 76,012 (10,369) (17,726) 47,917
Interest 5,317 - - 5,317
-------- --------- --------- ---------
Income before income tax 81,329 (10,369) (17,726) 53,234
Provision for income taxes (20,266) 1,992 6,920 (11,354)
-------- --------- --------- ---------
Net income 61,063 (8,377) (10,806) 41,880
-------- --------- --------- ---------
Earnings per share
(assuming dilution)
Shares outstanding ('000) 1,427,036 1,427,036
Earnings per share - pence 4.28 2.93
Earnings per ADS (assuming
dilution)
ADSs outstanding ('000) 475,679 475,679
Earnings per ADS - cents 22.04 15.12
* intangible amortisation includes £335,000 of in-process research and
development write-off
Note
The results shown for Q4 2006, Q3 2006, Q4 2005 and FY 2006 are unaudited. The
results shown for FY 20005 are audited. The financial information contained in
this announcement does not constitute statutory accounts within the meaning of
Section 240(3) of the Companies Act 1985. Statutory accounts of the Company in
respect of the financial year ended 31 December 2005, upon which the Company's
auditors have given a report which was unqualified and did not contain a
statement under Section 237(2) or Section 237(3) of that Act, have been
delivered to the Registrar of Companies.
Except for changes in accounting policy on the adoption of new accounting
standards, as disclosed, the results for ARM for Q4 2006 and previous quarters
as shown reflect the accounting policies as stated in Note 1 to the US GAAP
financial statements in the Annual Report and Accounts filed with Companies
House in the UK for the fiscal year ended 31 December 2005
and in the Annual Report on Form 20-F for the fiscal year ended 31 December
2005.
This document contains forward-looking statements as defined in section 102 of
the Private Securities Litigation Reform Act of 1995. 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 intended 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 realise the benefits of our recent acquisitions, unforeseen
liabilities arising from our recent 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 ended 31 December 2005 including (without limitation) under the captions,
'Risk Factors' and 'Management's Discussion and Analysis of Financial Condition
and Results of Operations,' which is on file with the Securities and Exchange
Commission (the 'SEC') and available at the SEC's website at www.sec.gov.
About ARM
ARM designs the technology that lies at the heart of advanced digital products,
from mobile, home and enterprise solutions to embedded and emerging
applications. ARM's comprehensive product offering includes 16/32-bit RISC
microprocessors, data engines, graphics processors, digital libraries, embedded
memories, peripherals, software and development tools, as well as analog
functions and high-speed connectivity products. Combined with 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 http://www.arm.com.
ARM, Jazelle and TrustZone are registered trademarks of ARM Limited. ARM7, ARM9,
ARM926EJ-S, ARM11, Cortex, Advantage, Classic, Metro and Velocity are trademarks
of ARM Limited. Artisan Components and Artisan are registered trademarks of ARM
Physical IP, Inc., a wholly owned subsidiary of ARM. All other brands or product
names are the property of their respective holders. ARM refers to ARM Holdings
plc (LSE: ARM and Nasdaq: ARMHY) together with its subsidiaries including ARM
Limited, ARM Inc., ARM Physical IP Inc., Axys Design Automation Inc., ARM
Germany GmbH, ARM KK, ARM Korea Ltd, ARM Taiwan Ltd, ARM France SAS, Soisic SA,
ARM Consulting (Shanghai) Co. Ltd., ARM Belgium NV., ARM Embedded Technologies
Pvt. Ltd., Keil Elektronik GmbH and ARM Norway AS.
This information is provided by RNS
The company news service from the London Stock Exchange
