NXP Semiconductors Announces Realignment of Business Segments

NXP Semiconductors Announces Realignment of Business Segments 
EINDHOVEN, THE NETHERLANDS -- (Marketwired) -- 04/11/13 --  NXP
Semiconductors N.V. (NASDAQ: NXPI) today announced the realignment of
several product lines to better reflect underlying market dynamics,
product complexity and the management of the business. The changes
include: 


 
--  Movement of product line General Purpose Logic (GPL) from segment High
    Performance Mixed Signal (HPMS), end-market Portable & Computing
    to segment Standard Products.
--  Movement of product line NXP Software from Corporate and Other to
    segment HPMS, end-market Industrial & Infrastructure.

  
In addition, to enable improved comparisons of underlying operating
performance relative to industry peers, the company will exclude
stock-based compensation from its GAAP to non-GAAP reconciliation.  
The impact of these changes are reflected in the summary tables below
and detailed in the attached tables based on the company's most
recent reported financial results for the fourth quarter and
full-year 2012, ended December 31, 2012. A full reconciliation of the
impact of the changes to reported historical financial results is
provided on NXP's investor relations website, under the "Financial
Results" section at http://investors.nxp.com.  
Reclassified Results for the Fourth Quarter and Full Year 2012 ($
millions, except EPS, unaudited) 


 
                  Q4      Q3      Q4                                        
                 2012    2012    2011   Q - Q  Y - Y   2012    2011   Y - Y 
                ------  ------  ------  -----  -----  ------  ------  ----- 
                                                                            
Product Revenue $1,072  $1,120  $  868   -4.3%  23.5% $4,144  $3,869    7.1%
Manufacturing                                                               
 Operations     $   43  $   49  $   62  -12.2% -30.6% $  211  $  316  -33.2%
Corporate &                                                                 
 Other          $    1  $    1  $    1    0.0%   0.0% $    3  $    9  -66.7%
                ------  ------  ------                ------  ------        
Total Revenue   $1,116  $1,170  $  931   -4.6%  19.9% $4,358  $4,194    3.9%
GAAP Gross                            
                                      
 Profit         $  490  $  536  $  389   -8.6%  26.0% $1,988  $1,906    4.3%
  Gross Profit                                                              
   Adjustments                                                              
   (1)          $  (25) $   (7) $  (34)               $   (8) $  (81)       
Non-GAAP Gross                                                              
 Profit         $  515  $  543  $  423   -5.2%  21.7% $1,996  $1,987    0.5%
  GAAP Gross                                                                
   Margin         43.9%   45.8%   41.8%                 45.6%   45.4%       
  Non-GAAP                                                                  
   Gross Margin   46.1%   46.4%   45.4%                 45.8%   47.4%       
GAAP Operating                                                              
 Income         $   33  $  168  $    7  -80.4% 371.4% $  412  $  357   15.4%
  Operating                                                                 
   Income                                                                   
   Adjustments                                                              
   (1)          $ (192) $  (76) $ (150)               $ (422) $ (476)       
Non-GAAP                                                                    
 Operating                                                                  
 Income         $  225  $  244  $  157   -7.8%  43.3% $  834  $  833    0.1%
  GAAP                                                                      
   Operating                                                                
   Margin          3.0%   14.4%    0.8%                  9.5%    8.5%       
  Non-GAAP                                                                  
   Operating                                                                
   Margin         20.2%   20.9%   16.9%                 19.1%   19.9%       
GAAP Net Income                                                             
 / (Loss)       $ (116) $  115  $ (182)    NM     NM  $ (115) $  390     NM 
  Net Income                                                                
   Adjustments                                                              
   (1)          $ (258) $  (39) $ (250)               $ (592) $  (65)       
Non-GAAP Net                                                                
 Income /                                                                   
 (Loss)         $  142  $  154  $   68   -7.8% 108.8% $  477  $  455    4.8%
GAAP EPS        $(0.47) $ 0.45  $(0.73)    NM     NM  $(0.46) $ 1.57     NM 
  EPS                                                                       
   Adjustments                                                              
   (1)          $(1.03) $(0.16) $(1.00)               $(2.34) $(0.23)       
Non-GAAP EPS    $ 0.56  $ 0.61  $ 0.27   -8.2% 107.4% $ 1.88  $ 1.80    4.4%

 
1) Please see "Discussion of GAAP to non-GAAP Reconciliation"  
Reclassified Supplemental Information (revenue, $ millions,
unaudited)  


 
                                   Percent                                  
                  Q4     Q3    Q4     Q4                                    
                 2012   2012  2011  Total  Q - Q Y - Y   2012   2011  Y - Y 
                ------ ------ ---- ------- ----- -----  ------ ------ ----- 
                                                                            
 Automotive     $  227 $  239 $218      20%   -5%    4% $  939 $  930     1%
 Identification $  290 $  275 $155      26%    5%   87% $  986 $  698    41%
 Infrastructure                                                             
  & Industrial  $  162 $  171 $160      15%   -5%    1% $  634 $  655    -3%
 Portable &                                                                 
  Computing     $  106 $  119 $ 75       9%  -11%   41% $  417 $  370    13%
                ------ ------ ---- ------- ----- -----  ------ ------       
High Performance                                                            
 Mixed Signal                                                               
 (HPMS)         $  785 $  804 $608      70%   -2%   29% $2,976 $2,653    12%
Standard                                                                    
 Products (STDP)$  287 $  316 $260      26%   -9%   10% $1,168 $1,216    -4%
                ------ ------ ---- ------- ----- -----  ------ ------       
Product Revenue $1,072 $1,120 $868      96%   -4%   24% $4,144 $3,869     7%
Manufacturing                                                               
 Operations     $   43 $   49 $ 62       4%  -12%  -31% $  211 $  316   -33%
Corporate &                                                                 
 Other          $    1 $    1 $  1       0%    0%    0% $    3 $    9   -67%
                ------ ------ ---- ------- ----- -----  ------ ------       
Total Revenue   $1,116 $1,170 $931     100%   -5%   20% $4,358 $4,194     4%

 
Product Revenue is the combination of revenue from the High
Performance Mixed Signal (HPMS) and S
tandard Products (STDP)
segments.  
Reconciliation of Supplemental and Segment Information (revenue, $
millions, unaudited) 


 
                                                                            
                                                                    High    
     Infrastructure                                             Performance 
            &         Portable &                                Mixed Signal
       Industrial +   Computing  +  Automotive + Identification =  (HPMS)   
     Prior Current  Prior Current Prior Current Prior Current  Prior Current 
     ----- -------  ----- ------  ----- ------  ----- -------  ------ ------    
                                                                        
4Q12 $ 156 $   162  $ 195 $  106  $ 227 $  227  $ 290 $   290  $  868 $  785
                                                                            
3Q12 $ 165 $   171  $ 222 $  119  $ 239 $  239  $ 275 $   275  $  901 $  804
                                                                            
4Q11 $ 149 $   160  $ 137 $   75  $ 218 $  218  $ 155 $   155  $  659 $  608
                                                                            
2012 $ 604 $   634  $ 753 $  417  $ 939 $  939  $ 986 $   986  $3,282 $2,976
                                                                            
2011 $ 617 $   655  $ 661 $  370  $ 930 $  930  $ 698 $   698  $2,906 $2,653
                                                                            
                                                                            
         High Performance                                                   
           Mixed Signal       Standard       Manufacturing     Corporate &  
              (HPMS)       Products (STDP)    Operations          Other     
          Prior   Current  Prior   Current  Prior   Current  Prior   Current
         ------- -------- ------- -------- ------- -------- ------- --------
                                                                            
4Q12     $   868 $    785 $   198 $    287 $    43 $     43 $     7 $      1
3Q12     $   901 $    804 $   213 $    316 $    49 $     49 $     7 $      1
4Q11     $   659 $    608 $   198 $    260 $    62 $     62 $    12 $      1
2012     $ 3,282 $  2,976 $   832 $  1,168 $   211 $    211 $    33 $      3
2011     $ 2,906 $  2,653 $   925 $  1,216 $   316 $    316 $    47 $      9

 
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) "Stock based compensation", (xii) "Other incidental
items," (xiii) "non-GAAP Financial Income (expense)," (xiv) "non-GAAP
Results relating to equity-accounted investees," (xv) "non-GAAP Cash
tax (expense)," (xvi) "non-GAAP EPS," (xvii) "EBITDA", "adjusted
EBITDA" and "trailing 12 month adjusted EBITDA" and (xviii) "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. "Stock based compensation" consists of incentive
    expense granted to eligible employees in the form of equity based
    instruments. "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 provides insight into our core operating results, our ability
    to generate cash and underlying business trends affecting our
    performance.
    
    
--  "non-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 understan
d 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," "stock based compensation," "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. 
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 $4.36 billion in 2012.
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              Full year      
                      -------------------------------  -------------------- 
                       Dec 31,    Sept 30,   Dec 31,                        
                         2012       2012       2011       2012       2011   
                      ---------  ---------  ---------  ---------  --------- 
                                                                            
Revenue               $   1,116  $   1,170  $     931  $   4,358  $   4,194 
                                                                            
Cost of revenue            (626)      (634)      (542)    (2,370)    (2,288)
                      ---------  ---------  ---------  ---------  --------- 
                                                                            
Gross profit                490        536        389      1,988      1,906 
                                                                            
Research and                                                                
 development               (171)      (153)      (151)      (628)      (635)
Selling, general and                                                        
 administrative            (288)      (236)      (236)      (977)      (918)
                      ---------  ---------  ---------  ---------  --------- 
Total operating                                                             
 expenses                  (459)      (389)      (387)    (1,605)    (1,553)
                                                                            
Other income                                                                
 (expense)                    
2         21          5         29          4 
                      ---------  ---------  ---------  ---------  --------- 
                                                                            
Operating income                                                            
 (loss)                      33        168          7        412        357 
                                                                            
Financial income                                                            
 (expense):                                                                 
    Interest income                                                         
     (expense) - net        (55)       (65)       (74)      (266)      (307)
  Foreign exchange                                                          
   gain (loss)               31         48        (65)        28        128 
  Gain (loss) on                                                            
   extinguishment of                                                        
   long term debt          (114)       (11)        (7)      (161)       (32)
  Other financial                                                           
   expense                  (15)        (5)       (19)       (38)       (46)
                      ---------  ---------  ---------  ---------  --------- 
                                                                            
Income (loss) before                                                        
 taxes                     (120)       135       (158)       (25)       100 
                                                                            
Benefit (provision)                                                         
 for income taxes             7         (6)        (2)        (1)       (21)
Results relating to                                                         
 equity-accounted                                                           
 investees                   15          2        (15)       (27)       (77)
                      ---------  ---------  ---------  ---------  --------- 
                                                                            
Income (loss) from                                                          
 continuing                                                                 
 operations                 (98)       131       (175)       (53)         2 
Income (loss) on                                                            
 discontinued                                                               
 operations, net of                                                         
 tax                          -          -          2          1        434 
                      ---------  ---------  ---------  ---------  --------- 
Net income (loss)           (98)       131       (173)       (52)       436 
Net (income) loss                                                           
 attributable to non-                                                       
 controlling                                                                
 interests                  (18)       (16)        (9)       (63)       (46)
                      ---------  ---------  ---------  ---------  --------- 
Net income (loss)                                                           
 attributable to                                                            
 stockholders              (116)       115       (182)      (115)       390 
                                                                            
Earnings per share                                                          
 data:                                                                      
Net income (loss)                                                           
 attributable to                                                            
 stockholders per                                                           
 common share                                                               
                                                                            
Basic earnings per                                                          
 common share in $                                                          
  Income (loss) from                                                        
   continuing                                                               
   operations         $   (0.47) $    0.46  $   (0.74) $   (0.46) $   (0.17)
  Income (loss) from                                                        
   discontinued                                                             
   operations         $       -  $       -  $    0.01  $       -  $    1.74 
                      ---------  ---------  ---------  ---------  --------- 
Net income (loss)     $   (0.47) $    0.46  $   (0.73) $   (0.46) $    1.57 
                                                                            
Diluted earnings per                                                        
 common share                                                               
  Income (loss) from                                                        
   continuing                                                               
   operations         $   (0.47) $    0.45  $   (0.74) $   (0.46) $   (0.17)
  Income (loss) on                                                          
   discontinued                                                             
   operations         $       -  $       -  $    0.01  $       -  $    1.74 
                      ---------  ---------  ---------  ---------  --------- 
Net income (loss)     $   (0.47) $    0.45  $   (0.73) $   (0.46) $    1.57 
                                                                            
Weighted average                                                            
 number of shares of                                                        
 common stock (in                                                           
 thousands):                                                                
Basic                   248,505    247,498    247,586    248,064    248,812 
Diluted                 248,505    253,060    247,586    248,064    248,812 
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 2: Reconciliation of GAAP to non-GAAP Segment Results (unaudited)     
                                                                            
($ in millions)                 Three Months Ended            Full year     
                           ----------------------------  ------------------ 
                            Dec 31,  Sept 30,   Dec 31,                     
                             2012      2012      2011      2012      2011   
                           --------  --------  --------  --------  -------- 
                                                                            
High Performance Mixed                                                      
 Signal (HPMS)                  785       804       608     2,976     2,653 
Standard Products               287       316       260     1,168     1,216 
                           --------  --------  --------  --------  -------- 
  Product Revenue             1,072     1,120       868     4,144     3,869 
    Manufacturing                                                           
     Operations                  43        49        62       211       316 
    Corporate and Other           1         1         1         3         9 
                           --------  --------  --------  --------  -------- 
Total Revenue              $  1,116  $  1,170  $    931  $  4,358  $  4,194 
                           ========  ========  ========  ========  ======== 
                                
                                            
HPMS Revenue               $    785  $    804  $    608  $  2,976  $  2,653 
  Percent of Total Revenue     70.3%     68.7%     65.3%     68.3%     63.3%
  HPMS segment GAAP gross                                                   
   profit                       427       433       309     1,656     1,486 
    PPA effects                   -        (1)       (4)       (9)      (16)
    Restructuring                (1)        -       (17)       (1)      (17)
    Stock based                                                             
     compensation                 -        (1)        -        (1)        1 
    Other incidentals             -        (1)        -        (3)        - 
    Other adjustments             -         -         -        46         - 
                           --------  --------  --------  --------  -------- 
HPMS segment non-GAAP                                                       
 gross profit              $    428  $    436  $    330  $  1,624  $  1,518 
                           ========  ========  ========  ========  ======== 
  HPMS segment GAAP gross                                                   
   margin                      54.4%     53.9%     50.8%     55.6%     56.0%
  HPMS segment non-GAAP                                                     
   gross margin                54.5%     54.2%     54.3%     54.6%     57.2%
HPMS segment GAAP                                                           
 operating profit               105       157        18       479       288 
  PPA effects                   (45)      (45)      (51)     (190)     (206)
  Restructuring                 (26)        1       (35)      (24)      (40)
  Stock based compensation      (12)       (9)       (7)      (37)      (15)
  Other incidentals              (3)       16         -         2        (2)
  Other adjustments               -         -         -        46         - 
                           --------  --------  --------  --------  -------- 
HPMS segment non-GAAP                                                       
 operating profit          $    191  $    194  $    111  $    682  $    551 
                           ========  ========  ========  ========  ======== 
  HPMS segment GAAP                                                         
   operating margin            13.4%     19.5%      3.0%     16.1%     10.9%
  HPMS segment non-GAAP                                                     
   operating margin            24.3%     24.1%     18.3%     22.9%     20.8%
Standard Products Revenue  $    287  $    316  $    260  $  1,168  $  1,216 
  Percent of Total Revenue     25.7%     27.0%     27.9%     26.8%     29.0%
  Standard Products                                                         
   segment GAAP gross                                                       
   profit                        70       107        86       346       449 
    PPA effects                   -        (1)       (1)       (3)       (3)
    Restructuring               (15)        1        (7)      (15)       (8)
    Stock based                                                             
     compensation                (1)        -         -        (1)        - 
    Other incidentals            (1)        -         -        (1)        - 
                           --------  --------  --------  --------  -------- 
Standard Products segment                                                   
 non-GAAP gross profit     $     87  $    107  $     94  $    366  $    460 
                           ========  ========  ========  ========  ======== 
  Standard Products                                                         
   segment GAAP gross                                                       
   margin                      24.4%     33.9%     33.1%     29.6%     36.9%
  Standard Products                                                         
   segment non-GAAP gross                                                   
   margin                      30.3%     33.9%     36.2%     31.3%     37.8%
Standard Products segment                                                   
 GAAP operating profit            2        43        22        89       200 
  PPA effects                   (15)      (15)      (16)      (60)      (69)
  Restructuring                 (19)        -        (8)      (19)       (9)
  Stock based compensation       (4)       (2)       (2)      (11)       (6)
  Other incidentals              (1)        2        (1)        -         - 
                           --------  --------  --------  --------  -------- 
Standard Products segment                                                   
 non-GAAP operating profit $     41  $     58  $     49  $    179  $    284 
                           ========  ========  ========  ========  ======== 
  Standard Products                                                         
   segment GAAP operating                                                   
   margin                       0.7%     13.6%      8.5%      7.6%     16.4%
  Standard Products                                                         
   segment non-GAAP                                                         
   operating margin            14.3%     18.4%     18.8%     15.3%     23.4%
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 2: Reconciliation of GAAP to non-GAAP Segment Results (unaudited)     
 (con't)                                                                    
                                                                            
($ in millions)                 Three Months Ended            Full year     
                           ----------------------------  ------------------ 
                            Dec 31,  Sept 30,   Dec 31,                     
                             2012      2012      2011      2012      2011   
                           --------  --------  --------  --------  -------- 
Manufacturing Operations                                                    
 Revenue                   $     43  $     49  $     62  $    211  $    316 
  Percent of Total Revenue      3.9%      4.2%      6.7%      4.8%      7.5%
  Manufacturing Operations                                                  
   segment GAAP gross                                                       
   profit                       (10)       (2)       (7)      (22)      (48)
    PPA effects                  (2)       (2)       (1)       (8)       (8)
    Restructuring                (4)       (1)        1        (7)      (10)
    Stock based                                                             
     compensation                 -         -         -         -        (2)
    Other incidentals            (1)       (1)       (5)       (5)      (18)
                           --------  --------  --------  --------  -------- 
  Manufacturing Operations                                                  
   segment non-GAAP gross                                                   
   profit                  $     (3) $      2  $     (2) $     (2) $    (10)
                           ========  ========  ========  ========  ======== 
    Manufacturing                                                           
     Operations segment                                                     
     GAAP gross margin        -23.3%     -4.1%    -11.3%    -10.4%    -15.2%
    Manufacturing                                                           
     Operations segment                                                     
     non-GAAP gross margin     -7.0%      4.1%     -3.2%     -0.9%     -3.2%
  Manufacturing Operations                                                  
   segment GAAP operating         
                                          
   profit                       (15)       (6)      (10)      (36)      (60)
    PPA effects                  (6)       (5)       (6)      (23)      (26)
    Restructuring                (4)       (1)        2        (7)      (10)
    Stock based                                                             
     compensation                 -         -         -         -        (2)
    Other incidentals            (1)       (2)       (4)       (3)      (17)
                           --------  --------  --------  --------  -------- 
  Manufacturing Operations                                                  
   segment non-GAAP                                                         
   operating profit        $     (4) $      2  $     (2) $     (3) $     (5)
                           ========  ========  ========  ========  ======== 
    Manufacturing                                                           
     Operations segment                                                     
     GAAP operating margin    -34.9%    -12.2%    -16.1%    -17.1%    -19.0%
    Manufacturing                                                           
     Operations segment                                                     
     non-GAAP operating                                                     
     margin                    -9.3%      4.1%     -3.2%     -1.4%     -1.6%
                                                                            
Corporate and Other                                                         
 Revenue                   $      1  $      1  $      1  $      3  $      9 
  Percent of Total Revenue      0.1%      0.1%      0.1%      0.1%      0.2%
  Corporate and Other                                                       
   segment GAAP gross                                                       
   profit                         3        (2)        1         8        19 
    PPA effects                   -         -         -         -         - 
    Restructuring                 -         -         -         -         - 
    Stock based                                                             
     compensation                 -         -         -         -         - 
    Other incidentals             -         -         -         -         - 
                           --------  --------  --------  --------  -------- 
  Corporate and Other                                                       
   segment non-GAAP gross                                                   
   profit                  $      3  $     (2) $      1  $      8  $     19 
                           ========  ========  ========  ========  ======== 
  Corporate and Other                                                       
   segment GAAP gross                                                       
   margin                        NM        NM        NM        NM        NM 
  Corporate and Other                                                       
   segment non-GAAP gross                                                   
   margin                        NM        NM        NM        NM        NM 
  Corporate and Other                                                       
   segment GAAP operating                                                   
   profit                       (59)      (26)      (23)     (120)      (71)
    PPA effects                   -         -         -         -         - 
    Restructuring               (49)       (4)      (18)      (61)      (22)
    Stock based                                                             
     compensation                 -        (1)        -        (4)       (8)
    Other incidentals            (7)      (11)       (4)      (31)      (44)
                           --------  --------  --------  --------  -------- 
  Corporate and Other                                                       
   segment non-GAAP                                                         
   operating profit        $     (3) $    (10) $     (1) $    (24) $      3 
                           ========  ========  ========  ========  ======== 
  Corporate and Other                                                       
   segment GAAP operating                                                   
   margin                        NM        NM        NM        NM        NM 
  Corporate and Other                                                       
   segment non-GAAP                                                         
   operating margin              NM        NM        NM        NM        NM 
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 3: Financial Reconciliation of GAAP to non-GAAP Results (unaudited)   
                                                                            
($ in millions                                                              
 except share data)         Three Months Ended              Full year       
                     -------------------------------  --------------------- 
                      Dec 31,     Sept 30,   Dec 31,                        
                       2012         2012      2011      2012         2011   
                     --------     --------  --------  --------     -------- 
                                                                            
Revenue              $  1,116     $  1,170  $    931  $  4,358     $  4,194 
                                                                            
GAAP Gross profit    $    490     $    536  $    389  $  1,988     $  1,906 
  PPA effects              (2)          (4)       (6)      (20)         (27)
  Restructuring           (20)           -       (23)      (23)         (35)
  Stock Based                                                               
   Compensation            (1)          (1)        -        (2)          (1)
  Other incidentals        (2)          (2)       (5)       (9)         (18)
  Other adjustments         -            -         -        46            - 
                     --------     --------  --------  --------     -------- 
Non-GAAP Gross                                                              
 profit              $    515     $    543  $    423  $  1,996     $  1,987 
                     ========     ========  ========  ========     ======== 
GAAP Gross margin        43.9%        45.8%     41.8%     45.6%        45.4%
Non-GAAP Gross                                                              
 margin                  46.1%        46.4%     45.4%     45.8%        47.4%
  GAAP Research and                                                         
   development       $   (171)    $   (153) $   (151) $   (628)    $   (635)
    PPA effects             -            -         -         -            - 
    Restructuring         (23)           -       (18)      (22)         (22)
    Stock based                                                             
     compensation          (2)          (1)       (1)       (5)          (2)
    Other                                                                   
     incidentals           (1)          (3)        -       (12)          (2)
                     --------     --------  --------  --------     -------- 
  Non-GAAP Research                                                         
   and development   $   (145)    $   (149) $   (132) $   (589)    $   (609)
                     ========     ========  ========  ========     ======== 
                                                                            
  GAAP Selling,                                                             
   general and                                                              
   administrative    $   (288)    $ 
  (236) $   (236) $   (977)    $   (918)
    PPA effects           (64)         (61)      (67)     (253)        (274)
    Restructuring         (55)          (4)      (18)      (67)         (24)
    Stock based                                                             
     compensation         (13)         (10)       (8)      (45)         (28)
    Other                                                                   
     incidentals           (8)         (10)       (7)      (32)         (30)
                     --------     --------  --------  --------     -------- 
  Non-GAAP Selling,                                                         
   general and                                                              
   administrative    $   (148)    $   (151) $   (136) $   (580)    $   (562)
                     ========     ========  ========  ========     ======== 
                                                                            
  GAAP Other income                                                         
   (expense)         $      2     $     21  $      5  $     29     $      4 
    PPA effects             -            -         -         -            - 
    Restructuring           -            -         -         1            - 
    Other                                                                   
     incidentals           (1)          20         3        21          (13)
                     --------     --------  --------  --------     -------- 
  Non-GAAP Other                                                            
   income (expense)  $      3     $      1  $      2  $      7     $     17 
                     ========     ========  ========  ========     ======== 
GAAP Operating                                                              
 income (loss)       $     33     $    168  $      7  $    412     $    357 
  PPA effects             (66)         (65)      (73)     (273)        (301)
  Restructuring           (98)          (4)      (59)     (111)         (81)
  Stock based                                                               
   compensation           (16)         (12)       (9)      (52)         (31)
  Other incidentals       (12)           5        (9)      (32)         (63)
  Other adjustments         -            -         -        46            - 
                     --------     --------  --------  --------     -------- 
Non-GAAP Operating                                                          
 income (loss)       $    225     $    244  $    157  $    834     $    833 
                     ========     ========  ========  ========     ======== 
GAAP Operating                                                              
 margin                   3.0%        14.4%      0.8%      9.5%         8.5%
Non-GAAP Operating                                                          
 margin                  20.2%        20.9%     16.9%     19.1%        19.9%
GAAP Financial                                                              
 income (expense)    $   (153)    $    (33) $   (165) $   (437)    $   (257)
  Foreign exchange                                                          
   gain (loss) on                                                           
   debt                    31           48       (65)       28          128 
  Gain (loss) on                                                            
   extinguishment of                                                        
   long term debt        (114)         (11)       (7)     (161)         (32)
  Other financial                                                           
   expense                (15)          (5)      (19)      (38)         (46)
                     --------     --------  --------  --------     -------- 
Non-GAAP Financial                                                          
 income (expense)    $    (55)    $    (65) $    (74) $   (266)    $   (307)
                     ========     ========  ========  ========     ======== 
GAAP Income tax                                                             
 benefit (provision) $      7     $     (6) $     (2) $     (1)    $    (21)
  Other adjustments        17            3         4        27            4 
                     --------     --------  --------  --------     -------- 
Non-GAAP Cash tax                                                           
 (expense)           $    (10)    $     (9) $     (6) $    (28)    $    (25)
                     ========     ========  ========  ========     ======== 
GAAP Results                                                                
 relating to equity-                                                        
 accounted investees $     15     $      2  $    (15) $    (27)    $    (77)
  Other adjustments        15            2       (15)      (27)         (77)
                     --------     --------  --------  --------     -------- 
Non-GAAP Results                                                            
 relating to equity-                                                        
 accounted investees $      -     $      -  $      -  $      -     $      - 
                     ========     ========  ========  ========     ======== 
GAAP Income (loss)                                                          
 from continuing                                                            
 operations          $    (98)    $    131  $   (175) $    (53)    $      2 
  PPA effects             (66)         (65)      (73)     (273)        (301)
  Restructuring           (98)          (4)      (59)     (111)         (81)
  Stock based                                                               
   compensation           (16)         (12)       (9)      (52)         (31)
  Other incidentals       (12)           5        (9)      (32)         (63)
  Other adjustments       (66) 1)       37      (102)     (125) 1)      (23)
                     --------     --------  --------  --------     -------- 
Non-GAAP Income                                                             
 (loss) from                                                                
 continuing                                                                 
 operations          $    160     $    170  $     77  $    540     $    501 
                     ========     ========  ========  ========     ======== 
GAAP Income (loss)                                                          
 on discontinued                                                            
 operations - net of                                                        
 tax                 $      -     $      -  $      2  $      1     $    434 
  Other adjustments         -            -         2         1          434 
                     --------     --------  --------  --------     -------- 
Non-GAAP Income                                                             
 (loss) from                                                                
 discontinued                                                               
 operations          $      -     $      -  $      -  $      -     $      - 
                     ========     ========  ========  ========     ======== 
GAAP Net income                                                             
 (loss) attributable                                                        
 to stockholders     $   (116)    $    115  $   (182) $   (115)    $    390 
  PPA effects             (66)         (65)      (73)     (273)        (301)
  Restructuring           (98)          (4)      (59)     (111)         (81)
  Stock based                                                               
   compensation           (16)         (12)       (9)      (52)         (31)
  Other incidentals       (12)           5        (9)      (32)         (63)
  Other adjustments       (66)          37      (100)     (124)         411 
                     --------     --------  --------  --------     -------- 
Non-GAAP Net income                   
                                      
 (loss) attributable                                                        
 to stockholders     $    142     $    154  $     68  $    477     $    455 
                     ========     ========  ========  ========     ======== 
                                                                            
GAAP Weighted                                                               
 average shares -                                                           
 diluted              248,505      253,060   247,586   248,064      248,812 
  Non-GAAP                                                                  
   Adjustment           5,474            -     2,329     5,007        4,086 
                     --------     --------  --------  --------     -------- 
Non-GAAP Weighted                                                           
 average shares -                                                           
 diluted              253,979      253,060   249,915   253,071      252,898 
                     ========     ========  ========  ========     ======== 
                                                                            
GAAP Diluted net                                                            
 income (loss)                                                              
 attributable to                                                            
 stockholders per                                                           
 share               $  (0.47)    $   0.45  $  (0.73) $  (0.46)    $   1.57 
Non-GAAP Diluted net                                                        
 income (loss)                                                              
 attributable to                                                            
 stockholders per                                                           
 share               $   0.56     $   0.61  $   0.27  $   1.88     $   1.80 
                                                                            
1) Includes: During 4Q12: Foreign exchange gain on debt: $31 million; Loss  
 on extinguishment of long-term debt: ($114) million; Other financial       
 expense: ($15) million; Results relating to equity-accounted investees:    
 $15 million; and difference between book and cash income taxes: $17        
 million; for the full year 2012: Other adjustments Cost of Revenue $46     
 million; Foreign exchange gain on debt: $28 million; Loss on               
 extinguishment of long-term debt: $(161) million; Other financial expense: 
 $(38) million; Results relating to equity-accounted investees: $(27)       
 million; and difference between book and cash income taxes: $27 million.   
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 4: Adjusted EBITDA (unaudited)                                        
                                                                            
($ in millions)                 Three Months Ended            Full year     
                           ----------------------------  -------------------
                            Dec 31,  Sept 30,   Dec 31,                     
                             2012      2012      2011      2012       2011  
                           --------  --------  --------  --------  ---------
                                                                            
Net Income                 $    (98) $    131  $   (173) $    (52) $     436
  Income (loss) on                                                          
   discontinued operations        -         -         2         1        434
                           --------  --------  --------  --------  ---------
Income (loss) from                                                          
 continuing operations     $    (98) $    131  $   (175) $    (53) $       2
                           ========  ========  ========  ========  =========
                                                                            
Reconciling items to                                                        
 EBITDA                                                                     
  Financial (income)                                                        
   expense                      153        33       165       437        257
  Benefit (provision) for                                                   
   income taxes                  (7)        6         2         1         21
  Depreciation                   63        59        78       247        290
  Amortization                   69        69        73       286        301
                           --------  --------  --------  --------  ---------
EBITDA                     $    180  $    298  $    143  $    918  $     871
                           ========  ========  ========  ========  =========
                                                                            
Reconciling items to                                                        
 adjusted EBITDA                                                            
  Results of equity-                                                        
   accounted investees          (15)       (2)       15        27         77
  Restructuring 1)               98         3        55       109         76
  Stock based compensation       16        12         9        52         31
  Other incidental items                                                    
   1)                            11        (5)        8        30         62
  Other adjustments               -         -         -       (46)         -
                           --------  --------  --------  --------  ---------
Adjusted EBITDA            $    290  $    306  $    230  $  1,090  $   1,117
                    
       ========  ========  ========  ========  =========
                                                                            
Trailing twelve month                                                       
 adjusted EBITDA           $  1,090  $  1,030  $  1,117  $  1,090  $   1,117
                                                                            
                                                                            
1) Excluding depreciation property,                                         
 plant and equipment related to:                                            
                                                                            
    Restructuring                 -         1         4         2          5
    Other incidental items        1         -         1         2          1

  
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