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NXP Semiconductors Reports Second Quarter 2012 Results

NXP Semiconductors Reports Second Quarter 2012 Results 
Operational Results Ahead of Expectations 
EINDHOVEN, THE NETHERLANDS -- (Marketwire) -- 07/24/12 --  NXP
Semiconductors N.V. (NASDAQ: NXPI) 


 
                                                              
                                                   Q2 2012    
                                              ----------------
             Revenue                           $1,094 million 
             GAAP Gross margin                      49.2%     
             GAAP Operating margin                  14.3%     
             GAAP Loss per share                   ($0.36)    
                                                              
             Non-GAAP Gross margin                  46.2%     
             Non-GAAP Operating margin              18.6%     
             Non-GAAP Earnings per share            $0.45     
                                                              

 
--  Trailing twelve month adjusted EBITDA $974 million
--  Net debt reduced $865 million year-on-year to $2,982 million
--  Product revenue growth of 12 percent sequentially

  
NXP Semiconductors N.V. (NASDAQ: NXPI) today reported financial results
for the second quarter of 2012, ended July 1, 2012, and provided
guidance for the third quarter 2012.  
"We are very pleased with our performance during the second quarter
of 2012 as we delivered revenue of $1,094 million, which was above
the upper end of our guidance range. We experienced growth in every
one of our target end markets, notwithstanding the uncertain macro
environment we find ourselves operating within. Furthermore, our
results during the quarter are a positive indication of the company
specific opportunities we have previously communicated. The growth
drivers that contributed to our second quarter results are in the
early stages and we anticipate further contribution in future
periods. We are committed to further investments in our product
portfolio that should enable future top-line growth in our core
target markets, and when combined with our deep applications
knowledge and customer focus should enable NXP to grow in excess of
the overall semiconductor industry," said Richard Clemmer, NXP Chief
Executive Officer. 
Second Quarter 2012 Results
 ($ millions, except EPS, unaudited) 


 
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                                            
                                Q2 2011  Q1 2012  Q2 2012   Q - Q    Y - Y  
                                -------  -------  -------  -------  ------- 
                                                                            
Product Revenue                 $ 1,025  $   912  $ 1,022     12.1%    -0.3%
                                                                            
Mfg. & Other Revenue            $    96  $    66  $    72      9.1%   -25.0%
                                -------  -------  -------                   
                                                                            
Total Revenue                   $ 1,121  $   978  $ 1,094     11.9%    -2.4%
                                                                            
GAAP Gross Profit               $   523  $   424  $   538     26.9%     2.9%
                                                                            
  Gross Profit Adjustments (1)  $   (13) $    (9) $    33                   
                                                                            
Non-GAAP Gross Profit           $   536  $   433  $   505     16.6%    -5.8%
                                                                            
  GAAP Gross Margin                46.7%    43.4%    49.2%                  
                                                                            
  Non-GAAP Gross Margin            47.8%    44.3%    46.2%                  
                                                                            
GAAP Operating Income           $   133  $    55  $   156    183.6%    17.3%
                                                                            
  Operating Income Adjustments                                              
   (1)                          $   (96) $   (86) $   (48)                  
                                                                            
Non-GAAP Operating Income       $   229  $   141  $   204     44.7%   -10.9%
                                                                            
  GAAP Operating Margin            11.9%     5.6%    14.3%                  
                                                                            
  Non-GAAP Operating Margin        20.4%    14.4%    18.6%                  
                                                                            
GAAP Net Income / (Loss)        $    84  $   (24) $   (90)      NM       NM 
                                                                            
  Net Income Adjustments (1)    $   (46) $   (72) $  (203)                  
                                                                            
Non-GAAP Net Income / (Loss)    $   130  $    48  $   113    135.4%   -13.1%
                                                                            
GAAP EPS                        $  0.33  $ (0.10) $ (0.36)      NM       NM 
  EPS Adjustments (1)           $ (0.18) $ (0.29) $ (0.81)                  
Non-GAAP EPS                    $  0.51  $  0.19  $  0.45    136.8%   -11.8%
                                                                            
                                                                            
----------------------------------------------------------------------------
 1) Please see "Discussion of GAAP to non-GAAP Reconciliation" below.       

 
Supplemental Information ($ millions, unaudited) 


 
                                                                            
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                    Q2 %                    
                        Q2 2011  Q1 2012  Q2 2012  Total    Q - Q    Y - Y  
                       -------- -------- -------- -------  -------  ------- 
                                                                            
  Automotive           $    251 $    229 $    244    22.3%     6.6%    -2.8%
                                                                            
  Identification       $    194 $    187 $    234    21.4%    25.1%    20.6%
                                                                            
  Infrastructure &                                                          
   Industrial          $    157 $    137 $    146    13.3%     6.6%    -7.0%
                                                                            
  Portable & Computing $    177 $    157 $    179    16.4%    14.0%     1.1%
                       -------- -------- -------- -------  -------  ------- 
                                                                            
High Performance Mixed          
                                            
 Signal (HPMS)         $    779 $    710 $    803    73.4%    13.1%     3.1%
                                                                            
Standard Products                                                           
 (STDP)                $    246 $    202 $    219    20.0%     8.4%   -11.0%
                       -------- -------- -------- -------  -------  ------- 
                                                                            
Product Revenue        $  1,025 $    912 $  1,022    93.4%    12.1%    -0.3%
                                                                            
Manufacturing & Other  $     96 $     66 $     72     6.6%     9.1%   -25.0%
                       -------- -------- -------- -------  -------  ------- 
                                                                            
Total Revenue          $  1,121 $    978 $  1,094   100.0%    11.9%    -2.4%
                                                                            
----------------------------------------------------------------------------

 
Product Revenue is the combination of revenue from the High
Performance Mixed Signal (HPMS) and Standard Products (STDP)
segments. As of the second quarter of 2012 certain end market
designations within the HPMS segment have been redefined to better
align with the overall market focus of the segment. The changes only
effect the end market designations previously known as "Wireless
Infrastructure, Industrial and Lighting (WILI)" and "Mobile Consumer
and Computing (MCC)" end market designations. All prior periods have
been restated, in addition to the product category changes and a full
historical reconciliation is included in the accompanying
supplemental presentation available in the investors section on the
NXP website (www.nxp.com).  
Additional Information for the Second Quarter of 2012: 


 
--  The total debt balance at the end of the second quarter 2012 was
    $3,819 million, a decline of $10 million from the $3,829 million in
    the prior quarter.
--  NXP repurchased 1.6M shares for a total cost of approximately $37
    million.
--  Net cash interest paid in the second quarter of 2012 was $30 million.
--  SSMC, NXP's consolidated joint-venture wafer fab with TSMC, reported
    second quarter 2012 operating income of $38 million, EBITDA of $49
    million and a closing cash balance of $192 million. During the second
    quarter SSMC paid a dividend of $100 million, of which $39 million was
    paid to TSMC.
--  Utilization in NXP wafer fabs averaged 92 percent in the second
    quarter 2012 compared to 94 percent in the year ago period and 84
    percent in the prior quarter.

  
Guidance for the Third Quarter 2012: ($ millions, except share count
and EPS) (1) 


 
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                     Guidance Range         
                                               Low        Mid        High   
                                            ---------  ---------  --------- 
                                                                            
Product Revenue                             $   1,083  $   1,114  $   1,145 
                                                                            
  Q-Q                                               6%         9%        12%
                                                                            
Mfg. & Other Revenue                        $      60  $      60  $      60 
                                            ---------  ---------  --------- 
                                                                            
Total Revenue                               $   1,143  $   1,174  $   1,205 
                                                                            
  Q-Q                                               4%         7%        10%
                                                                            
Non-GAAP Gross Profit                       $     526  $     546  $     567 
                                                                            
  Non-GAAP Gross Margin                          46.0%      46.5%      47.0%
                                                                            
Non-GAAP Operating Income                   $     217  $     235  $     253 
                                                                            
  Non-GAAP Operating Margin                      19.0%      20.0%      21.0%
                                                                            
  Interest Expense                          $      68  $      68  $      68 
                                                                            
  Cash Taxes                                $       9  $      11  $      12 
                                                                            
  Non-controlling Interest                  $      12  $      14  $      16 
                                            ---------  ---------  --------- 
                                                                            
Non-GAAP Net Income                         $     128  $     142  $     157 
                                                                            
Ave. Diluted Shares                               254        254        254 
                                                                            
  Non - GAAP EPS                            $    0.50  $    0.56  $    0.62 
                                                                            
----------------------------------------------------------------------------

 
Note (1): NXP has based the guidance included in this release on
judgments and estimates that management believes are reasonable given
its assessment of historical trends and other information reasonably
available as of the date of this release. The guidance included in
this release consists of predictions only, and is subject to a wide
range of known and unknown risks and uncertainties, many of which are
beyond NXP's control. The guidance included in this release should
not be regarded as representations by NXP that the estimated results
will be achieved. Actual results may vary materially from the
guidance we provide today. In relation to the use of non-GAAP
financial information see the note regarding "Use of Non-GAAP
Financial Information" elsewhere in this release. For the factors,
risks and uncertainties to which judgments, estimates and
forward-looking statements generally are subject see the note
regarding "Forward-looking Statements." We undertake no obligation to
publicly update or revise any forward-looking statements, including
the guidance set forth herein, to reflect future events or
circumstances. Considering the uncertain magnitude and variability of
the foreign exchange consequences upon "PPA effects," "restructuring
costs," "other incidental items" and any interest expense or taxes in
future periods, management believes that GAAP financial measures are
not available for NXP on a forward looking basis. 
Discussion of GAAP to non-GAAP Reconciliations
 In addition to
providing financial information on a basis consistent with U.S.
generally accepted accounting principles ("GAAP"), NXP also provides
the following selected financial measures on a non-GAAP basis: (i)
"non-GAAP gross profit," (ii) "non-GAAP gross margin," (iii)
"non-GAAP Research and development," (iv) "non-GAAP Selling, general
and administrative," (v) "non-GAAP Other income," (vi) "non-GAAP
operating income (loss)," (vii) "non-GAAP operating margin," (viii)
"non-GAAP net income/ (loss)," (ix) "PPA effects," (x) "Restructuring
costs," (xi) "Other incidental items," (xii) "non-GAAP Financial
Income (expense)," (xiii) "non-GAAP Results relating to
equity-accounted investees," (xiv) "non-GAAP Cash tax (expense),"
(xv) "non-GAAP EPS," (xvi) "EBITDA," "adjusted EBITDA" and "trailing
12 month adjusted EBITDA" and (xvii) "net debt."  
In this release, references to: 


 
--  "non-GAAP gross profit,
" "non-GAAP research and development,"
    "non-GAAP Selling, general and administrative," "non-GAAP Other
    income," "non-GAAP operating income (loss)" and "non-GAAP net income/
    (loss)" are to NXP's gross profit, research and development, selling
    general and administrative, operating income and net income/ (loss)
    calculated on a basis consistent with GAAP, net of the effects of
    purchase price accounting ("PPA"), restructuring costs and certain
    other incidental items. "PPA effects" reflect the fair value
    adjustments impacting acquisition accounting and other acquisition
    adjustments charged to the income statement applied to the formation
    of NXP on September 29, 2006 and all subsequent acquisitions.
    "Restructuring costs" consist of costs related to restructuring
    programs and gains and losses resulting from divestment activities and
    impairment charges. "Other incidental items" consist of process and
    product transfer costs (which refer to the costs incurred in
    transferring a production process and products from one manufacturing
    site to another) and certain charges related to acquisitions and
    divestitures. "Other adjustments" include or exclude certain items
    that management believes provide insight into our core operating
    results, our ability to generate cash and underlying business trends
    affecting our performance.
    
    
--  "n
on-GAAP gross margin" and "non-GAAP operating margin" are to our
    non-GAAP gross profit or our non-GAAP operating income as a percentage
    of our sales, respectively;
    
    
--  "non-GAAP Financial Income (expense)" is the interest income or
    expense net of impacts due foreign exchange changes on our
    Euro-denominated debt, gains or losses due to the extinguishment of
    long-term debt and less other financial expenses deemed to be one-time
    in nature;
    
    
--  "non-GAAP Cash tax (expense)" is the difference between our GAAP tax
    provision and the cash taxes paid during the period;
    
    
--  "non-GAAP EPS" attributable to stockholders are to non-GAAP net income
    or loss attributable to NXP's stockholders, divided by the weighted
    average number of common shares outstanding during the period,
    adjusted for treasury shares held;
    
    
--  "EBITDA" are to NXP's earnings before interest, taxes, depreciation
    and amortization. "EBITDA" excludes certain tax payments that may
    represent a reduction in cash available to us, does not reflect any
    cash capital expenditure requirements for the assets being depreciated
    and amortized that may have to be replaced in the future, does not
    reflect changes in, or cash requirements for, our working capital
    needs and does not reflect the significant financial expense, or the
    cash requirements necessary to service interest payments, on our
    debts;
    
    
--  "adjusted EBITDA" are to EBITDA after adjustments for "restructuring
    costs," "other incidental items" and results related to equity
    accounted investees.
    
    
--  "trailing 12 month adjusted EBITDA" are to adjusted EBITDA for the
    last 12 months from the date of this release; and
    
    
--  "net debt" is to the sum total of long and short term debt less total
    cash and cash equivalents, as reflected on the balance sheet.

  
Reconciliations of these non-GAAP measures to the most comparable
measures calculated in accordance with GAAP are provided in the
financial statements portion of this release in a schedule entitled
"Financial Reconciliation of GAAP to non-GAAP Results (unaudited)." 
NXP provides non-GAAP measures because management believes that they
are helpful to understand the underlying operating and profit
structure of NXP's operations, to provide additional insight as to
how management assesses the performance and allocation of resources
among its various segments and because the financial community uses
them in its analysis of NXP's operating and/or financial performance,
historical results and projections of NXP's future operating results.
NXP presents "non-GAAP gross profit," "non-GAAP research and
development," "non-GAAP Selling, general and administrative,"
"non-GAAP Other income,
" "non-GAAP operating income," "non-GAAP net
income/ (loss)," "non-GAAP gross margin," "non-GAAP operating margin"
and "non-GAAP EPS" because these financials measures are net of "PPA
effects," "restructuring costs," "other incidental items," and "other
adjustments" which have affected the comparability of NXP's results
over the years. NXP presents "EBITDA," "adjusted EBITDA" and
"trailing 12 month adjusted EBITDA" because these financials measures
enhance an investor's understanding of NXP's financial performance.  
Non-GAAP measures should not be considered a substitute for any
information derived or calculated in accordance with GAAP, are not
intended to be measures of financial performance or condition,
liquidity, profitability or operating cash flows in accordance with
GAAP, and should not be considered as alternatives to net income
(loss), operating income or any other performance measures determined
in accordance with GAAP. These non-GAAP measures can vary from other
participants in the semiconductor industry. They have limitations as
analytical tools and should not be considered in isolation for
analysis of NXP's financial results as reported under GAAP. 
Conference Call and Webcast Information
 NXP will host a conference
call on July 24, 2012 at 7:30 a.m. U.S. Eastern Daylight Time (1:30
p.m. Central European Time) to discuss its second quarter 2012
results and provide an outlook for the third quarter of 2012.  
Interested parties may join the conference call by dialing 1 - 866 -
788 - 0542 (within the U.S.) or 1 - 857 - 350 - 1680 (outside the
U.S.). The participant passcode is 32812713. To listen to a webcast
of the event, please visit the Investor Relations section of the NXP
website at www.nxp.com/investor. The webcast will be recorded and
available for replay shortly after the call concludes.  
About NXP Semiconductors
 NXP Semiconductors N.V. (NASDAQ: NXPI)
provides High Performance Mixed Signal and Standard Product solutions
that leverage its leading RF, Analog, Power Management, Interface,
Security and Digital Processing expertise. These innovations are used
in a wide range of automotive, identification, wireless
infrastructure, lighting, industrial, mobile, consumer and computing
applications. A global semiconductor company with operations in more
than 25 countries, NXP posted revenue of $4.2 billion in 2011.
Additional information can be found by visiting www.nxp.com. 
Forward-looking Statements
 This document includes forward-looking
statements which include statements regarding NXP's business
strategy, financial condition, results of operations, and market
data, as well as any other statements which are not historical facts.
By their nature, forward-looking statements are subject to numerous
factors, risks and uncertainties that could cause actual outcomes and
results to be materially different from those projected. These
factors, risks and uncertainties include the following: market demand
and semiconductor industry conditions; the ability to successfully
introduce new technologies and products; the end-market demand for
the goods into which NPX's products are incorporated; the ability to
generate sufficient cash, raise sufficient capital or refinance
corporate debt at or before maturity; the ability to meet the
combination of corporate debt service, research and development and
capital investment requirements; the ability to accurately estimate
demand and match manufacturing production capacity accordingly or
obtain supplies from third-party producers; the access to production
capacity from third-party outsourcing partners; any events that might
affect third-party business partners or NXP's relationship with them;
the ability to secure adequate and timely supply of equipment and
materials from suppliers; the ability to avoid operational problems
and product defects and, if such issues were to arise, to correct
them quickly; the ability to form strategic partnerships and joint
ventures and to successfully cooperate with alliance partners; the
ability to win competitive bid selection processes to develop
products for use in customers' equipment and products; the ability to
successfully establish a brand identity; the ability to successfully
hire and retain key management and senior product architects; and,
the ability to maintain good relationships with our suppliers. In
addition, this document contains information concerning the
semiconductor industry and NXP's business segments generally, which
is forward-looking in nature and is based on a variety of assumptions
regarding the ways in which the semiconductor industry, NXP's market
segments and product areas may develop. NXP has based these
assumptions on information currently available, if any one or more of
these assumptions turn out to be incorrect, actual market results may
differ from those predicted. While NXP does not know what impact any
such differences may have on its business, if there are such
differences, its future results of operations and its financial
condition could be materially adversely affected. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak to results only as of the date the statements
were made. Except for any ongoing obligation to disclose material
information as required by the United States federal securities laws,
NXP does not have any intention or obligation to publicly update or
revise any forward-looking statements after we distribute this
document, whether to reflect any future events or circumstances or
otherwise. For a discussion of potential risks and uncertainties,
please refer to the risk factors listed in our SEC filings. Copies of 
our SEC filings are available on our Investor Relations website,
www.nxp.com/investor or from the SEC website, www.sec.gov. 


 
                                                                            
NXP Semiconductors                                                          
Table 1: Condensed consolidated statement of operation (unaudited)          
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                                            
($ in millions except share data)                Three Months Ended         
                                         ---------------------------------- 
                                           July 3,    April 1,     July 1,  
                                            2011        2012        2012    
                                         ----------  ----------  ---------- 
                                                                            
Revenue                                  $    1,121  $      978  $    1,094 
                                                                            
Cost of revenue                                (598)       (554)       (556)
                                         ----------  ----------  ---------- 
                                                                            
Gross profit                                    523         424         538 
                                                                            
Research and development                       (165)       (148)       (156)
Selling, general and administrative            (229)       (222)       (231)
                                         ----------  ----------  ---------- 
Total operating expenses                       (394)       (370)       (387)
                                                                            
Other income (expense)                            4           1           5 
                                         ----------  ----------  ---------- 
                                                                            
Operating income (loss)                         133          55         156 
                                                                            
Financial income (expense):                                                 
  Interest income (expense) - net               (79)        (76)        (70)
  Foreign exchange gain (loss) on debt           85          53        (104)
  Gain (loss) on extinguishment of long                                     
   term debt                                    (14)        (36)          - 
  Other financial expense                       (11)        (14)         (4)
                                         ----------  ----------  ---------- 
                                                                            
Income (loss) before taxes                      114         (18)        (22)
                                                                            
Benefit (provision) for income taxes              -           5          (7)
Results relating to equity-accounted                                        
 investees                                      (15)          1         (45)
                                         ----------  ----------  ---------- 
                                                                            
Income (loss) from continuing operations         99         (12)        (74)
Income (loss) on discontinued                                               
 operations, net of tax                          (2)          1           - 
                                         ----------  ----------  ---------- 
Net income (loss)                                97         (11)        (74)
Net (income) loss attributable to non-                                      
 controlling interests                          (13)        (13)        (16)
                                         ----------  ----------  ---------- 
Net income (loss) attributable to                                           
 stockholders                                    84         (24)        (90)
                                                                            
Earnings per share data:                                                    
Net income (loss) attributable to                                           
 stockholders per common share                                              
                                                                            
Basic earnings per common share in $                                        
  Income (loss) from continuing                                             
   operations                            $     0.35  $    (0.10) $    (0.36)
  Income (loss) from discontinued                                           
   operations                            $    (0.01) $        -  $        - 
                                         ----------  ----------  ---------- 
Net income (loss)                        $     0.34  $    (0.10) $    (0.36)
                                                                            
Diluted earnings per common share                                           
  Income (loss) from continuing                                             
   operations                            $     0.34  $    (0.10) $    (0.36)
  Income (loss) on discontinued                                             
   operations                            $    (0.01) $        -  $        - 
                                         ----------  ----------  ---------- 
Net income (loss)                        $     0.33  $    (0.10) $    (0.36)
                                                                            
Weighted average number of shares of                                        
 common stock (in thousands):                                               
Basic                                       249,957     247,979     248,272 
Diluted                                     256,273     247,979     248,272 
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 2: Condensed consolidated balance sheet (unaudited)                   
                                                                            
----------------------------------------------------------------------------
                                                                            
($ in millions)                                   Three Months Ended        
                                       
  -----------------------------------
                                           July 3,     April 1,    July 1,  
                                             2011        2012        2012   
                                         ----------- ----------- -----------
                                                                            
Current assets:                                                             
  Cash and cash equivalents              $       859 $       782 $       837
  Accounts receivable - net                      424         410         451
  Other receivables                               46          23          16
  Assets held for sale                            45          38          17
  Current assets of discontinued                                            
   operations                                     92           -           -
  Inventories                                    571         619         644
  Other current assets                           122         117          96
                                         ----------- ----------- -----------
Total current assets                           2,159       1,989       2,061
                                                                            
Non-current assets:                                                         
  Investments in equity-accounted                                           
   investees                                      95          38          39
  Non-current assets of discontinued                                        
   operations                                    302           -           -
  Other non-current assets                       192         145         145
  Property, plant and equipment                1,156       1,049       1,044
  Identified intangible assets                 1,426       1,173       1,061
  Goodwill                                     2,468       2,288       2,186
                                         ----------- ----------- -----------
Total non-current assets                       5,639       4,693       4,475
                                                                            
Total assets                                   7,798       6,682       6,536
                                                                            
Current liabilities:                                                        
  Accounts payable                               561         462         524
  Liabilities held for sale                       21          22           5
  Current liabilities of discontinued                                       
   operations                                     36           -           -
  Accrued liabilities                            576         538         524
  Short-term debt                                641         382          52
                                         ----------- ----------- -----------
Total current liabilities                      1,835       1,404       1,105
                                                                            
Non-current liabilities:                                                    
  Long-term debt                               4,065       3,447       3,767
  Non-current liabilities of                                                
   discontinued operations                        21           -           -
  Other non-current liabilities                  466         477         447
                                         ----------- ----------- -----------
Total non-current liabilities                  4,552       3,924       4,214
                                                                            
Non-controlling interests                        193         186         201
Stockholders' equity                           1,218       1,168       1,016
                                         ----------- ----------- -----------
Total equity                                   1,411       1,354       1,217
                                                                            
Total liabilities and equity                   7,798       6,682       6,536
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 3: Condensed consolidated statement of cash flow (unaudited)          
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                                            
($ in millions)                                    Three Months Ended       
                                            ------------------------------- 
                                             July 3,    April 1,   July 1,  
                                               2011       2012       2012   
                                            ---------  ---------  --------- 
                                                                            
Cash Flows from operating activities                                        
Net income (loss)                           $      97  $     (11) $     (74)
(Income) loss from discontinued operations,                                 
 net of tax                                         2         (1)         - 
Adjustments to reconcile net income (loss):                                 
  Depreciation and amortization                   143        134        139 
  Net (gain) loss on sale of assets                (2)         -          - 
  (Gain) loss on extinguishment of debt            14         36          - 
  Results relating to equity accounted                                      
   investees                                       15         (1)        45 
Changes in operating assets and                                             
 liabilities:                                                               
  (Increase) decrease in trade receivables         16         41        (57)
  (Increase) decrease in inventories              (30)        12        (12)
  Increase (decrease) in trade payables            17          1         71 
  (Increase) decrease in other receivables          1         (7)        18 
  Increase (decrease) in other payables          (113)       (65)        18 
  Changes in deferred taxes                        (5)        (5)        (5)
Exchange differences                              (85)       (53)       104 
Other items                                        11         16         22 
                                            ---------  ---------  --------- 
Net cash provided by (used for) operating                                   
 activities                                        81         97        269 
                                                                            
Cash flows from investing activities:                                       
  Purchase of identified intangible assets         (2)        (7)        (7)
  Capital expenditures on property, plant                                   
   and equipment                                  (71)       (39)       (74)
  Proceeds from disposals of property,                                      
   plant and equipment                              2          -          1 
  Purchase of other non-current financial                                   
   assets                                          (1)         -          - 
  Proceeds from the sale of other non-                                      
   current financial assets              
           1          1          - 
  Purchase of interests in businesses               -          -         (2)
                                            ---------  ---------  --------- 
Net cash (used for) provided by investing                                   
 activities                                       (71)       (45)       (82)
                                                                            
Cash flows from financing activities:                                       
  Net (repayments) borrowings of short-term                                 
   debt                                             2         (5)         1 
  Amounts drawn under the revolving credit                                  
   facility                                       200        330          - 
  Repayments under the revolving credit                                     
   facility                                         -          -       (330)
  Repurchase of long-term debt                   (678)      (815)         - 
  Principal payments on long-term debt             (1)        (4)        (5)
  Net proceeds from the issuance of long-                                   
   term debt                                      496        464        331 
  Dividends paid to non-controlling                                         
   interests                                      (67)         -        (39)
  Cash proceeds from exercise of stock                                      
   options                                          9          2          - 
  Purchase of treasury shares                       -          -        (37)
                                            ---------  ---------  --------- 
Net cash provided by (used for) financing                                   
 activities                                       (39)       (28)       (79)
                                                                            
Net cash provided by (used for) continuing                                  
 operations                                       (29)        24        108 
                                                                            
Cash flows from discontinued operations:                                    
  Net cash provided by (used for) operating                                 
   activities                                       4          -          - 
  Net cash provided by (used for) investing                                 
   activities                                     (10)         -        (45)
  Net cash provided by (used for) financing                                 
   activities                                      (2)         -          - 
                                            ---------  ---------  --------- 
Net cash provided by (used for)                                             
 discontinued operations                           (8)         -        (45)
                                                                            
Net cash from continuing and discontinued                                   
 operations                                       (37)        24         63 
Effect of changes in exchange rates on cash                                 
 positions                                          9         15         (8)
                                            ---------  ---------  --------- 
Increase (decrease) in cash and cash                                        
 equivalents                                      (28)        39         55 
Cash and cash equivalents at beginning of                                   
 period                                           895        743        782 
                                            ---------  ---------  --------- 
Cash and cash equivalents at end of period        867        782        837 
Less: cash and cash equivalents at end of                                   
 period-discontinued operations                    (8)         -          - 
                                            ---------  ---------  --------- 
Cash and cash equivalents at end of period-                                 
 continuing operations                            859        782        837 
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 4: Reconcilliation of GAAP to non-GAAP Segment Results (unaudited)    
                                                                            
----------------------------------------------------------------------------
                                                                            
($ in millions)                                    Three Months Ended       
                                            ------------------------------- 
                                             July 3,    April 1,   July 1,  
                                               2011       2012       2012   
                                            ---------  ---------  --------- 
                                                                            
High Performance Mixed Signal (HPMS)              779        710        803 
Standard Products                                 246        202        219 
                                            ---------  ---------  --------- 
  Product Revenue                               1,025        912      1,022 
    Manufacturing Operations                       83         57         62 
    Corporate and Other                            13          9         10 
                                            ---------  ---------  --------- 
Total Revenue                               $   1,121  $     978  $   1,094 
                                            =========  =========  ========= 
                                                                            
                                                                            
----------------------------------------------------------------------------
                                                                            
HPMS Revenue                                $     779  $     710  $     803 
  Percent of Total Revenue                       69.5%      72.6%      73.4%
  HPMS segment GAAP gross profit                  433        364        465 
    PPA effects                                     -         (2)        (7)
    Restructuring                                   -          -          - 
    Other incidentals                               -          -         (2)
    Other adjustments                               -          -         46 
                                            ---------  ---------  --------- 
  HPMS segment non-GAAP gross profit        $     433  $     366  $     428 
                                            =========  =========  ========= 
                                                                            
    HPMS segment GAAP gross margin               55.6%      51.3%      57.9%
    HPMS segment non-GAAP gross margin           55.6%      51.5%      53.3%
                                                                            
  HPMS segment GAAP operating profit              112         71        159 
    PPA effects                                   (50)       (50)       (54)
    Restructuring                                  (3)         -          1 
    Other incidentals                              (1)        (2)       (10)
    Other adjustments                                                    46 
                                            ---------  ---------  --------- 
  HPMS segment non-GAAP operating profit   
 $     166  $     123  $     176 
                                            =========  =========  ========= 
                                                                            
    HPMS segment GAAP operating margin           14.4%      10.0%      19.8%
    HPMS segment non-GAAP operating margin       21.3%      17.3%      21.9%
                                                                            
                                                                            
----------------------------------------------------------------------------
                                                                            
Standard Products Revenue                   $     246  $     202  $     219 
  Percent of Total Revenue                       21.9%      20.7%      20.0%
  Standard Products segment GAAP gross                                      
   profit                                          92         58         66 
    PPA effects                                     -         (1)         - 
    Restructuring                                  (1)         -         (1)
    Other incidentals                               -          -          - 
                                            ---------  ---------  --------- 
  Standard Products segment non-GAAP gross                                  
   profit                                   $      93  $      59  $      67 
                                            =========  =========  ========= 
                                                                            
    Standard Products segment GAAP gross                                    
     margin                                      37.4%      28.7%      30.1%
    Standard Products segment non-GAAP                                      
     gross margin                                37.8%      29.2%      30.6%
                                                                            
  Standard Products segment GAAP operating                                  
   profit                                          47          9         18 
    PPA effects                                   (15)       (13)       (13)
    Restructuring                                  (1)         -          - 
    Other incidentals                               -          -         (1)
                                            ---------  ---------  --------- 
  Standard Products segment non-GAAP                                        
   operating profit                         $      63  $      22  $      32 
                                            =========  =========  ========= 
                                                                            
    Standard Products segment GAAP                                          
     operating margin                            19.1%       4.5%       8.2%
    Standard Products segment non-GAAP                                      
     operating margin                            25.6%      10.9%      14.6%
                                                                            
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 4: Reconcilliation of GAAP to non-GAAP Segment Results (unaudited)    
 (con't)                                                                    
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                                            
($ in millions)                                    Three Months Ended       
                                            ------------------------------- 
                                             July 3,    April 1,   July 1,  
                                               2011       2012       2012   
                                            ---------  ---------  --------- 
Manufacturing Operations Revenue            $      83  $      57  $      62 
  Percent of Total Revenue                        7.4%       5.8%       5.7%
  Manufacturing Operations segment GAAP                                     
   gross profit                                   (15)        (7)        (3)
    PPA effects                                    (3)        (2)        (2)
    Restructuring                                  (3)        (2)         - 
    Other incidentals                              (6)        (2)        (1)
                                            ---------  ---------  --------- 
  Manufacturing Operations segment non-GAAP                                 
   gross profit                             $      (3) $      (1) $       - 
                                            =========  =========  ========= 
                                                                            
    Manufacturing Operations segment GAAP                                   
     gross margin                               -18.1%     -12.3%      -4.8%
    Manufacturing Operations segment non-                                   
     GAAP gross margin                           -3.6%      -1.8%       0.0%
                                                                            
  Manufacturing Operations segment GAAP                                     
   operating profit                               (18)       (10)        (5)
    PPA effects                                    (7)        (6)        (6)
    Restructuring                                  (3)        (2)         - 
    Other incidentals                              (7)        (2)         2 
                                            ---------  ---------  --------- 
  Manufacturing Operations segment non-GAAP                                 
   operating profit                         $      (1) $       -  $      (1)
                                            =========  =========  ========= 
                                                                            
    Manufacturing Operations segment GAAP                                   
     operating margin                           -21.7%     -17.5%      -8.1%
    Manufacturing Operations segment non-                                   
     GAAP operating margin                       -1.2%       0.0%      -1.6%
                                                                            
                                                                            
----------------------------------------------------------------------------
                                                                            
Corporate and Other Revenue                 $      13  $       9  $      10 
  Percent of Total Revenue                        1.2%       0.9%       0.9%
  Corporate and Other segment GAAP gross                                    
   profit                                          13          9         10 
    PPA effects                                     -          -          - 
    Restructuring                                   -          -          - 
    Other incidentals                               -          -          - 
                                            ---------  ---------  --------- 
  Corporate and Other segment non-GAAP                                      
   gross profit                             $      13  $       9  $      10 
                                            =========  =========  ========= 
                                                                            
  Corporate and Other segment GAAP gross                                    
   margin                                    
      NM         NM         NM 
  Corporate and Other segment non-GAAP                                      
   gross margin                                    NM         NM         NM 
                                                                            
  Corporate and Other segment GAAP                                          
   operating profit                                (8)       (15)       (16)
    PPA effects                                     -          -          - 
    Restructuring                                  (1)        (6)        (2)
    Other incidentals                              (8)        (5)       (11)
                                            ---------  ---------  --------- 
  Corporate and Other segment non-GAAP                                      
   operating profit                         $       1  $      (4) $      (3)
                                            =========  =========  ========= 
                                                                            
  Corporate and Other segment GAAP                                          
   operating margin                                NM         NM         NM 
  Corporate and Other segment non-GAAP                                      
   operating margin                                NM         NM         NM 
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 5: Financial Reconcilliation of GAAP to non-GAAP Results (unaudited)  
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                                            
($ in millions except share data)              Three Months Ended           
                                        -------------------------------     
                                         July 3,    April 1,   July 1,      
                                           2011       2012       2012       
                                        ---------  ---------  ---------     
                                                                            
Revenue                                 $   1,121  $     978  $   1,094     
                                                                            
GAAP Gross profit                       $     523  $     424  $     538     
  PPA effects                                  (3)        (5)        (9)    
  Restructuring                                (4)        (2)        (1)    
  Other incidentals                            (6)        (2)        (3)    
  Other adjustments                             -          -         46     
                                        ---------  ---------  ---------     
Non-GAAP Gross profit                   $     536  $     433  $     505     
                                        =========  =========  =========     
                                                                            
GAAP Gross margin                            46.7%      43.4%      49.2%    
                                                                            
Non-GAAP Gross margin                        47.8%      44.3%      46.2%    
                                                                            
  GAAP Research and development         $    (165) $    (148) $    (156)    
    PPA effects                                 -          -          -     
    Restructuring                              (3)         -          1     
    Other incidentals                          (2)        (2)        (6)    
                                        ---------  ---------  ---------     
  Non-GAAP Research and development     $    (160) $    (146) $    (151)    
                                        =========  =========  =========     
                                                                            
  GAAP Selling, general and                                                 
   administrative                       $    (229) $    (222) $    (231)    
    PPA effects                               (69)       (64)       (64)    
    Restructuring                              (1)        (6)        (2)    
    Other incidentals                          (8)        (5)       (13)    
                                        ---------  ---------  ---------     
  Non-GAAP Selling, general and                                             
   administrative                       $    (151) $    (147) $    (152)    
                                        =========  =========  =========     
                                                                            
  GAAP Other income (expense)           $       4  $       1  $       5     
    PPA effects                                 -          -          -     
    Restructuring                               -          -          1     
    Other incidentals                           -          -          2     
                                        ---------  ---------  ---------     
  Non-GAAP Other income (expense)       $       4  $       1  $       2     
                                        ---------  ---------  ---------     
                                                                            
GAAP Operating income (loss)            $     133  $      55  $     156     
  PPA effects                                 (72)       (69)       (73)    
  Restructuring                                (8)        (8)        (1)    
  Other incidentals                           (16)        (9)       (20)    
  Other adjustments                             -          -         46     
                                        ---------  ---------  ---------     
Non-GAAP Operating income (loss)        $     229  $     141  $     204     
                                        =========  =========  =========     
                                                                            
GAAP Operating margin                        11.9%       5.6%      14.3%    
                                                                            
Non-GAAP Operating margin                    20.4%      14.4%      18.6%    
                                                                            
GAAP Financial income (expense)         $     (19) $     (73) $    (178)    
  Foreign exchange gain (loss) on debt         85         53       (104)    
  Gain (loss) on extinguishment of long                                     
   term debt                                  (14)       (36)         -     
  Other financial expense                     (11)       (14)        (4)    
                                        ---------  ---------  ---------     
Non-GAAP Financial income (expense)     $     (79) $     (76) $     (70)    
                                        =========  =========  =========     
                                                                            
GAAP Income tax benefit (provision)     $       -  $       5  $      (7)    
  Other adjustments                             7          9         (2)    
                                        ---------  ---------  ---------     
Non-GAAP Cash tax (expense)             $      (7) $      (4) $      (5)    
                                        =========  =========  =========     
                                                                            
GAAP Results relating to equity-                                            
 accounted investees                    $     (15) $       1  $     (45)    
  Other adjustments                           (15)         1        (45)    
                                        ---------  ---------  ---------     
Non-GAAP Results relating to equity-                                        
 accounted investees                    $       -  $       -  $       -     
                                        ---------  ---------  ---------     
                                                                            
GAAP Income (loss) from continuing                                          
 operations                             $      99  $     (12) $     (74)    
  PPA effects                                 (72)       (69)       (73)    
  Restructuring                                (8)        (8)        (1)    
  Other incidentals                           (16)        (9)       (20)    
  Other adjustments                            52         13       (109)  1)
                                        ---------  ---------  ---------     
Non-GAAP Income (loss) from continuing                                      
 operations                             $     143  $      61  $     129     
                                        =========  =========  =========     
                                                                            
GAAP Income (loss) on discontinued                                          
 operations - net of tax                $      (2) $       1  $       -     
  Other adjustments                            (2)         1          -     
                                        ---------  ---------  ---------     
Non-GAAP Income (loss) from                                                 
 discontinued operations                $       -  $       -  $       -     
                                        =========  =========  =========     
                                                                            
GAAP Net income (loss) attributable to                                      
 stockholders                           $      84  $     (24) $     (90)    
  PPA effects                                 (72)       (69)       (73)    
  Restructuring                                (8)        (8)        (1)    
  Other incidentals                           (16)        (9)       (20)    
  Other adjustments                            50         14       (109)  1)
                                        ---------  ---------  ---------     
Non-GAAP Net income (loss) attributable                                     
 to stockholders                        $     130  $      48  $     113   2)
                                        =========  =========  =========     
                                                                            
GAAP Weighted average shares - diluted    256,273    247,979    248,272     
  Non-GAAP Adjustment                           -      4,865      5,115     
                                        ---------  ---------  ---------     
Non-GAAP Weighted average shares -                                          
 diluted                                  256,273    252,844    253,387     
                                        =========  =========  =========     
                                                                            
GAAP Diluted net income (loss)                                              
 attributable to stockholders per share $    0.33  $   (0.10) $   (0.36)    
Non-GAAP Diluted net income (loss)                                          
 attributable to stockholders per share $    0.51  $    0.19  $    0.45     
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                                            
1)  Includes: Other adjustments Cost of Revenue $46 million; Foreign        
    exchange loss on debt: $(104) million; Other financial expense: $(4)    
    million; Results relating to equity-accounted investees: $(45) million; 
    and difference between book and cash income taxes: $(2) million.        
                                                                            
2)  Includes stock based compensation expense of $11 million. Stock based   
    compensation expense of $4 million, which resulted from a modification, 
    is not included in the non-GAAP results.                                
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 6: Adjusted EBITDA (unaudited)                                        
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                                            
($ in millions)                                    Three Months Ended       
                                            ------------------------------- 
                                             July 3,    April 1,   July 1,  
                                               2011       2012       2012   
                                            ---------  ---------  --------- 
                                                                            
Net Income                                  $      97  $     (11) $     (74)
  Income (loss) on discontinued operations         (2)         1          - 
                                            ---------  ---------  --------- 
Income (loss) from continuing operations    $      99  $     (12) $     (74)
                                            =========  =========  ========= 
                                                                            
Reconciliing items to EBITDA                                                
  Financial (income) expense                       19         73        178 
  Benefit (provision) for income taxes              -         (5)         7 
  Depreciation                                     72         63         62 
  Amortization                                     71         71         77 
                                            ---------  ---------  --------- 
EBITDA                                      $     261  $     190  $     250 
                                            =========  =========  ========= 
                                                                            
Reconciling items to adjusted EBITDA                                        
  Results of equity-accounted investees            15         (1)        45 
  Restructuring 1)                                  7          7          1 
  Other incidental items 1)                        16          9         19 
  Other adjustments                                 -          -        (46)
                                            ---------  ---------  --------- 
Adjusted EBITDA                             $     299  $     205  $     269 
                                            =========  =========  ========= 
                                                                            
Trailing twelve month adjusted EBITDA       $   1,164  $   1,004  $     974 
                                                                            
----------------------------------------------------------------------------
                                                                            
1) Excluding depreciation property, pland                                   
 and equipment related to:                                                  
                                                 
                           
    Restructuring                                   1          1          - 
    Other incidental items                          -          -          1 

  
For further information, please contact:
Investors:
Jeff Palmer
jeff.palmer@nxp.com
+1 408 518 5411 
Media:
Lieke de Jong-Tops
lieke.de.jong-tops@nxp.com
+31(0)40 272 5202