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NXP Semiconductors Reports First Quarter 2013 Results


NXP Semiconductors Reports First Quarter 2013 Results

EINDHOVEN, THE NETHERLANDS -- (Marketwired) -- 04/22/13 -- NXP Semiconductors N.V. (NASDAQ: NXPI)


 
                                                                            
                                                                Q1 2013     
                                                          ------------------
Revenue                                                     $1,085 million  
GAAP Gross margin                                                44.5%      
GAAP Operating margin                                            10.6%      
GAAP Diluted earnings per share                                 ($0.06)     
                                                                            
Non-GAAP Gross margin                                            49.5%      
Non-GAAP Operating margin                                        23.5%      
Non-GAAP Earnings per share                                      $0.72      
                                                                            

 
--  Trailing twelve month adjusted EBITDA $1,195 million
--  Net debt reduced $202 million year-on-year to $2,845 million
--  NXP realized a $43.5 million net benefit related to the release of a
    legal provision

NXP Semiconductors N.V. (NASDAQ: NXPI) today reported financial results for the first quarter of 2013, ended March 31, 2013, and provided guidance for the second quarter 2013.

"Our revenue results for the first quarter of 2013 came in at the higher end of our guidance, as NXP delivered Product revenue of $1,055 million, a two percent sequential decline, and a fifteen percent increase from the comparable year ago period. Total NXP revenue in the first quarter was $1,085 million, a three percent sequential decline, and an eleven percent increase from the comparable year ago period," said Richard Clemmer, NXP Chief Executive Officer.

"Our revenue performance during the quarter reflected continued momentum in our Identification business, in addition to more normal seasonal demand trends in our Automotive OEM business. We were pleased with the progress in our Infrastructure & Industrial and our Portable & Computing business but clearly the weak demand environment conti nues to create headwinds to sustainable growth in our Standard Products segment. From an earnings perspective, and excluding the net benefit of the release of the legal provision our results were in line with the mid-point of our guidance with better than expected performance in our HPMS segment offset by weaker than expected financial performance in our Standard Products segment due to weaker mix, increased pricing pressure and poor factory performance resulting from a slower recovery than expected from our recent quality issues.

"We continue to be focused on improving our overall profitability, and feel good about the overall performance of HPMS, delivering improved earnings and maximizing shareholder value. We are making good progress in our efforts to control our operating expenses although we will accelerate some investments in ID that had been planned for later in the year to assure our continued technology leadership, and will take the necessary actions to improve the performance of Standard Products. Our strategy continues to be focused on providing unique and differentiated product solutions to enable our customers' success, which over the longer-term should allow NXP to outpace the cyclical growth of the overall semiconductor market," said Clemmer.

First Quarter 2013 Results ($ millions, except EPS, unaudited)


 
                                                                            
                                   Q1 2013   Q4 2012   Q1 2012  Q - Q Y - Y 
                                  --------  --------  --------  ----- ----- 
                                                                            
Product Revenue                   $  1,055  $  1,072  $    920     -2%   15%
Manufacturing Operations          $     29  $     43  $     57    -33%  -49%
Corporate & Other                 $      1  $      1  $      1      0%    0%
                                  --------  --------  --------              
Total Revenue                     $  1,085  $  1,116  $    978     -3%   11%
GAAP Gross Profit                 $    483  $    490  $    424     -1%   14%
  Gross Profit Adjustments (1)    $    (54) $    (25) $     (9)             
Non-GAAP Gross Profit             $    537  $    515  $    433      4%   24%
  GAAP Gross Margin                     45%       44%       43%             
  Non-GAAP Gross Margin                 50%       46%       44%             
GAAP Operating Income             $    115  $     33  $     55    248%  109%
  Operating Income Adjustments                                              
   (1)                                (140)     (192)      (95)             
Non-GAAP Operating Income         $    255  $    225  $    150     13%   70%
  GAAP Operating Margin                 11%        3%        6%             
  Non-GAAP Operating Margin             24%       20%       15%             
GAAP Net Income / (Loss)          $    (14) $   (116) $    (24)    NM    NM 
  Net Income Adjustments (1)          (200)     (258)      (81)             
Non-GAAP Net Income / (Loss)      $    186  $    142  $     57     31%  226%
GAAP EPS                          $  (0.06) $  (0.47) $  (0.10)    NM    NM 
  EPS Adjustments (1)             $  (0.78) $  (1.03) $  (0.33)             
Non-GAAP EPS                      $   0.72  $   0.56  $   0.23     29%  213%

(1) Please see "Discussion of GAAP to non-GAAP Reconciliation" on page 3 of this release.

Supplemental Information ($ millions, unaudited)


 
                                                                            
                                                      Percent               
                           Q1 2013  Q4 2012  Q1 2012  Q1 Total  Q - Q Y - Y 
                          -------- -------- -------- ---------  ----- ----- 
                                                                            
 Automotive               $    230 $    227 $    229        21%     1%    0%
 Identification           $    300 $    290 $    187        28%     3%   60%
 Infrastructure &                                                           
  Industrial              $    153 $    162 $    145        14%    -6%    6%
 Portable & Computing     $     93 $    106 $     85         8%   -12%    9%
                          -------- -------- -------- ---------  ----- ----- 
High Performance Mixed                                                      
 Signal (HPMS)            $    776 $    785 $    646        71%    -1%   20%
Standard Products (STDP)  $    279 $    287 $    274        26%    -3%    2%
                          -------- -------- -------- ---------  ----- ----- 
Product Revenue           $  1,055 $  1,072 $    920        97%    -2%   15%
Manufacturing Operations  $     29 $     43 $     57         3%   -33%  -49%
Corporate & Other         $      1 $      1 $      1         0%     0%    0%
                          -------- -------- -------- ---------  ----- ----- 
Total Revenue             $  1,085 $  1,116 $    978       100%    -3%   11%

Product Revenue is the combination of revenue from the High Performance Mixed Signa l (HPMS) and Standard Products (STDP) segments.

Additional and Subsequent Information for the First Quarter of 2013:


 
--  On April 11, 2013, NXP announced the realignment of certain product
    lines during the first quarter of 2013 to better reflect underlying
    market dynamics, product complexity and management of the business.
    Additionally NXP announced stock-based compensation would be excluded
    from non-GAAP financial results to improve peer group comparability.
    Stock based compensation was $17 million in the first quarter of 2013
    and a reconciliation of the impact to reported historical financial
    results is provided on NXP's investor relations website at
    www.nxp.com/investor.
--  On March 5, 2013, NXP issued $500 million senior unsecured notes due
    March 2023, with a coupon of 5.75%. NXP has used the net proceeds of
    the offering to repay its outstanding $471 million of U.S.
    dollar-denominated Senior Secured notes due April 2019 ("Term Loan
    B").
--  On February 1, 2013, NXP issued $500 million senior unsecured notes
    due February 2021, with a coupon of 5.75%. NXP has used the net
    proceeds of the offering to repay its outstanding $494 million of U.S.
    dollar-denominated Senior Secured notes due April 2017 ("Term Loan
    A2").
--  Total gross debt at the end of the first quarter 2013 was $3,440
    million, a $52 million reduction from the prior quarter. Cash at the
    end of the first quarter of 2013 was $595 million, resulting in a
    net-debt position of $2,845 million, a $30 million reduction from the
    prior quarter.
--  Net cash interest paid in the first quarter of 2013 was $54 million.
--  NXP repurchased 1.1M shares for a total cost of approximately $35
    million.
--  SSMC, NXP's consolidated joint-venture wafer fab with TSMC, reported
    first quarter 2013 operating income of $34 million, EBITDA of $45
    million and a closing cash balance of $327 million.
--  Utilization in NXP wafer fabs averaged 83 percent in the first quarter
    2013 compared to 84 percent in the year ago period and 85 percent in
    the prior quarter.

Guidance for the Second Quarter 2013: ($ millions, except share count and EPS) (1)


 
                                                                            
                                                  Guidance Range            
                                                                            
                                          Low          Mid          High    
                                      -----------  -----------  ----------- 
Product Revenue                       $     1,121  $     1,153  $     1,184 
  Q-Q                                           6%           9%          12%
Mfg. & Other Revenue                  $        26  $        26  $        26 
                                      -----------  -----------  ----------- 
Total Revenue                         $     1,147  $     1,179  $     1,210 
  Q-Q                                           6%           9%          12%
Non-GAAP Gross Profit                 $       531  $       546  $       562 
  Non-GAAP Gross Margin                        46%          46%          46%
Non-GAAP Operating Income             $       237  $       247  $       258 
  Non-GAAP Operating Margin                    21%          21%          21%
  Interest Expense                    $        48  $        48  $        48 
  Cash Taxes                          $        12  $        12  $        12 
  Non-controlling Interest            $        17  $        17  $        17 
                                      -----------  -----------  ----------- 
Non-GAAP Net Income                   $       160  $       170  $       181 
Ave. Diluted Shares                           259          259          259 
  Non - GAAP EPS                      $      0.62  $      0.66  $      0.70 

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) "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; 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," "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. E xcept 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 operations (unaudited)         
                                                                            
--------------------------------------------------------------------------- 
                                                                            
($ in millions except                                                       
 share data)                              Three Months Ended                
                          ------------------------------------------------- 
                           March 31, 2013    Dec 31, 2012    April 1, 2012  
                          ---------------  ---------------  --------------- 
Revenue                   $         1,085  $         1,116  $           978 
                                                                            
Cost of revenue                      (602)            (626)            (554)
                          ---------------  ---------------  --------------- 
                                                                            
Gross profit                          483              490              424 
                                                                            
Research and development             (153)            (171)            (148)
Selling, general and                                                        
 administrative                      (222)            (288)            (222)
                          ---------------  ---------------  --------------- 
Total operating expenses             (375)            (459)            (370)
                                                                            
Other income (expense)                  7                2                1 
                          ---------------  ---------------  --------------- 
                                                                            
Operating income (loss)               115               33               55 
                                                                            
Financial income                                                            
 (expense):                                                                 
  Interest income                                                           
   (expense) - net                    (49)             (55)             (76)
  Foreign exchange gain                                                     
   (loss)                             (53)              31               53 
  Gain (loss) on                                                            
   extinguishment of long                                                   
   term debt                          (37)            (114)             (36)
  Other financial expense             (13)             (15)             (14)
                          ---------------  ---------------  --------------- 
                                                                            
Income (loss) before                                                        
 taxes                                (37)            (120)             (18)
                                                                            
Benefit (provision) for                                                     
 income taxes                         (11)               7                5 
Results relating to                                                         
 equity-accounted                                                           
 investees                             47               15                1 
                          ---------------  ---------------  --------------- 
                                                                            
Income (loss) from                                                          
 continuing operations                 (1)             (98)             (12)
Income (loss) on                                                            
 discontinued operations,                                                   
 net of tax                             -                -                1 
                          ---------------  ---------------  --------------- 
Net income (loss)                      (1)             (98)             (11)
Net (income) loss                                                           
 attributable to non-                                                       
 controlling interests                (13)             (18)             (13)
                          ---------------  ---------------  --------------- 
Net income (loss)                                                           
 attributable to                                                            
 stockholders                         (14)            (116)             (24)
                                                                            
Earnings per share data:                                                    
Net income (loss)                                                           
 attributable to                                                            
 stockholders per common                                                    
 share                                                                      
                                                                            
Basic and diluted                                                           
 earnings per common                                                        
 share in $                                                                 
  Income (loss) from                                                        
   continuing operations  $         (0.06) $         (0.47) $         (0.10)
  Income (loss) from                                                        
   discontinued                                                             
   operations             $             -  $             -  $             - 
                          ---------------  ---------------  --------------- 
Net income (loss)         $         (0.06) $         (0.47) $         (0.10)
                                                                            
Weighted average number                                                     
 of shares of common                                                        
 stock (in thousands):                                                      
Basic and diluted                 249,668          248,505          247,979 
                                                                            
--------------------------------------------------------------------------- 
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 2: Condensed consolidated balance sheet (unaudited)                   
                                                                            
----------------------------------------------------------------------------
                                                                            
($ in millions)            
                      As of                      
                           -------------------------------------------------
                            March 31, 2013    Dec 31, 2012    April 1, 2012 
                           ---------------  ---------------  ---------------
                                                                            
Current assets:                                                             
  Cash and cash                                                             
   equivalents             $           595  $           617  $           782
  Accounts receivable -                                                     
   net                                 464              459              410
  Other receivables                     48               51               23
  Assets held for sale                  10               10               38
  Inventories                          730              715              619
  Other current assets                 109              102              117
                           ---------------  ---------------  ---------------
Total current assets                 1,956            1,954            1,989
                                                                            
Non-current assets:                                                         
  Investments in equity-                                                    
   accounted investees                  46               45               38
  Other non-current assets             131              128              145
  Property, plant and                                                       
   equipment                         1,039            1,070            1,049
  Identified intangible                                                     
   assets                              888              965            1,173
  Goodwill                           2,221            2,277            2,288
                           ---------------  ---------------  ---------------
Total non-current assets             4,325            4,485            4,693
                                                                            
Total assets                         6,281            6,439            6,682
                                                                            
Current liabilities:                                                        
  Accounts payable                     513              562              462
  Liabilities held for                                                      
   sale                                  -                -               22
  Accrued liabilities                  599              627              538
  Short-term debt                      291              307              382
                           ---------------  ---------------  ---------------
Total current liabilities            1,403            1,496            1,404
                                                                            
Non-current liabilities:                                                    
  Long-term debt                     3,149            3,185            3,447
  Other non-current                                                         
   liabilities                         454              474              477
                           ---------------  ---------------  ---------------
Total non-current                                                           
 liabilities                         3,603            3,659            3,924
                                                                            
Non-controlling interests              248              235              186
Stockholders' equity                 1,027            1,049            1,168
                           ---------------  ---------------  ---------------
Total equity                         1,275            1,284            1,354
                                                                            
Total liabilities and                                                       
 equity                              6,281            6,439            6,682
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 3: Condensed consolidated statement of cash flows (unaudited)         
                                                                            
--------------------------------------------------------------------------- 
                                                                            
($ in millions)                           Three Months Ended                
                          ------------------------------------------------- 
                           March 31, 2013    Dec 31, 2012    April 1, 2012  
                          ---------------  ---------------  --------------- 
                                                                            
Cash Flows from operating                                                   
 activities                                                                 
Net income (loss)         $            (1) $           (98) $           (11)
(Income) loss from                                                          
 discontinued operations,                                                   
 net of tax                             -                -               (1)
Adjustments to reconcile                                                    
 net income (loss):                                                         
  Depreciation and                                                          
   amortization                       132              132              134 
  Stock-based                                                               
   compensation                        17               16                9 
  Net (gain) loss on sale                                                   
   of assets                           (1)              (1)               - 
  (Gain) loss on                                                            
   extinguishment of debt              37              114               36 
  Results relating to                                                       
   equity accounted                                                         
   investees                          (47)             (15)              (1)
Changes in operating                                                        
 assets and liabilities:                                                    
  (Increase) decrease in                                                    
   trade receivables                  (15)              18               41 
  (Increase) decrease in                                                    
   inventories                        (20)             (41)              12 
  Increase (decrease) in                                                    
   trade payables                     (44)              10                1 
  (Increase) decrease in                                                    
   other receivables                   (8)              33               (7)
  Increase (decrease) in                                                    
   other payables                      17               34              (65)
  Changes in deferred                                                       
   taxes                                1               (8)              (5)
Exchange differences                   53              (31)             (53)
Other items                            (2)               1                7 
                          ---
------------  ---------------  --------------- 
Net cash provided by                                                        
 (used for) operating                                                       
 activities                           119              164               97 
                                                                            
Cash flows from investing                                                   
 activities:                                                                
  Purchase of identified                                                    
   intangible assets                   (6)              (8)              (7)
  Capital expenditures on                                                   
   property, plant and                                                      
   equipment                          (41)             (46)             (39)
  Proceeds from disposals                                                   
   of property, plant and                                                   
   equipment                            2                1                - 
  Proceeds from sale of                                                     
   interests in                                                             
   businesses                           -               (1)               - 
  Proceeds from return of                                                   
   equity investment                    -               12                - 
  Other                                 2               (3)               1 
                          ---------------  ---------------  --------------- 
Net cash (used for)                                                         
 provided by investing                                                      
 activities                           (43)             (45)             (45)
                                                                            
Cash flows from financing                                                   
 activities:                                                                
  Net (repayments)                                                          
   borrowings of short-                                                     
   term debt                           (1)               -               (5)
  Repayments under the                                                      
   revolving credit                                                         
   facility                          (280)               -                - 
  Amounts drawn under the                                                   
   revolving credit                                                         
   facility                           180              100              330 
  Repurchase of long-term                                                   
   debt                              (980)            (802)            (815)
  Principal payments on                                                     
   long-term debt                      (4)              (6)              (4)
  Net proceeds from the                                                     
   issuance of long-term                                                    
   debt                               990              493              464 
  Cash proceeds from                                                        
   exercise of stock                                                        
   options                             40                6                2 
  Purchase of treasury                                                      
   shares                             (35)               -                - 
                          ---------------  ---------------  --------------- 
Net cash provided by                                                        
 (used for) financing                                                       
 activities                           (90)            (209)             (28)
                                                                            
Effect of changes in                                                        
 exchange rates on cash                                                     
 positions                             (8)               5               15 
                          ---------------  ---------------  --------------- 
Increase (decrease) in                                                      
 cash and cash                                                              
 equivalents                          (22)             (85)              39 
Cash and cash equivalents                                                   
 at beginning of period               617              702              743 
                          ---------------  ---------------  --------------- 
Cash and cash equivalents                                                   
 at end of period                     595              617              782 
                                                                            
--------------------------------------------------------------------------- 
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 4: Reconciliation of GAAP to non-GAAP Segment Results (unaudited)     
                                                                            
--------------------------------------------------------------------------- 
                                                                            
($ in millions)                           Three Months Ended                
                          ------------------------------------------------- 
                           March 31, 2013    Dec 31, 2012    April 1, 2012  
                          ---------------  ---------------  --------------- 
                                                                            
High Performance Mixed                                                      
 Signal (HPMS)                        776              785              646 
Standard Products                     279              287              274 
                          ---------------  ---------------  --------------- 
  Product Revenue                   1,055            1,072              920 
    Manufacturing                                                           
     Operations                        29               43               57 
    Corporate and Other                 1                1                1 
                          ---------------  ---------------  --------------- 
Total Revenue             $         1,085  $         1,116  $           978 
                          ===============  ===============  =============== 
                                                                            
--------------------------------------------------------------------------- 
                                                                            
HPMS Revenue              $           776  $           785  $           646 
  Percent of Total                                                          
   Revenue                           71.5%            70.3%            66.1%
  HPMS segment GAAP gross                                                   
   profit                             417              427              347 
    PPA effects                         -                -               (2)
    Restructuring                      (1)              (1)               - 
    Stock based                                                             
     compensation                      (1)               -                - 
    Other incidentals                   -                -                - 
    Other adjustments          
       (46)               -                - 
                          ---------------  ---------------  --------------- 
  HPMS segment non-GAAP                                                     
   gross profit           $           465  $           428  $           349 
                          ===============  ===============  =============== 
                                                                            
    HPMS segment GAAP                                                       
     gross margin                    53.7%            54.4%            53.7%
    HPMS segment non-GAAP                                                   
     gross margin                    59.9%            54.5%            54.0%
                                                                            
  HPMS segment GAAP                                                         
   operating profit                   123              105               63 
    PPA effects                       (46)             (45)             (48)
    Restructuring                      (1)             (26)               - 
    Stock based                                                             
     compensation                     (12)             (12)              (7)
    Other incidentals                  (1)              (3)              (2)
    Other adjustments                 (46)               -                - 
                          ---------------  ---------------  --------------- 
  HPMS segment non-GAAP                                                     
   operating profit       $           229  $           191  $           120 
                          ===============  ===============  =============== 
                                                                            
    HPMS segment GAAP                                                       
     operating margin                15.9%            13.4%             9.8%
    HPMS segment non-GAAP                                                   
     operating margin                29.5%            24.3%            18.6%
                                                                            
--------------------------------------------------------------------------- 
                                                                            
Standard Products Revenue $           279  $           287  $           274 
  Percent of Total                                                          
   Revenue                           25.7%            25.7%            28.0%
  Standard Products                                                         
   segment GAAP gross                                                       
   profit                              70               70               81 
    PPA effects                        (1)               -               (1)
    Restructuring                      (1)             (15)               - 
    Stock based                                                             
     compensation                       -               (1)               - 
    Other incidentals                  (1)              (1)               - 
                          ---------------  ---------------  --------------- 
  Standard Products                                                         
   segment non-GAAP gross                                                   
   profit                 $            73  $            87  $            82 
                          ===============  ===============  =============== 
                                                                            
    Standard Products                                                       
     segment GAAP gross                                                     
     margin                          25.1%            24.4%            29.6%
    Standard Products                                                       
     segment non-GAAP                                                       
     gross margin                    26.2%            30.3%            29.9%
                                                                            
  Standard Products                                                         
   segment GAAP operating                                                   
   profit                               7                2               18 
    PPA effects                       (15)             (15)             (15)
    Restructuring                      (1)             (19)               - 
    Stock based                                                             
     compensation                      (4)              (4)              (2)
    Other incidentals                  (1)              (1)               - 
                          ---------------  ---------------  --------------- 
  Standard Products                                                         
   segment non-GAAP                                                         
   operating profit       $            28  $            41  $            35 
                          ===============  ===============  =============== 
                                                                            
    Standard Products                                                       
     segment GAAP                                                           
     operating margin                 2.5%             0.7%             6.6%
    Standard Products                                                       
     segment non-GAAP                                                       
     operating margin                10.0%            14.3%            12.8%
                                                                            
--------------------------------------------------------------------------- 
                                                                            
Manufacturing Operations                                                    
 Revenue                  $            29  $            43  $            57 
  Percent of Total                                                          
   Revenue                            2.7%             3.9%             5.8%
  Manufacturing                                                             
   Operations segment                                                       
   GAAP gross profit                   (5)             (10)              (7)
    PPA effects                        (2)              (2)              (2)
    Restructuring                       -               (4)              (2)
    Stock based                                                             
     compensation                       -                -                - 
    Other incidentals                  (1)              (1)              (2)
                          ---------------  ---------------  --------------- 
  Manufacturing                                                             
   Operations segment                                                       
   non-GAAP gross profit  $            (2) $            (3) $            (1)
                          ===============  ===============  =============== 
                                                                            
    Manufacturing                                                           
     Operations segment                                                     
     GAAP gross margin              -17.2%           -23.3%           -12.3%
    Manufacturing                                                           
     Operations segment                                                     
     non-GAAP gross                                                         
     margin                          -6.9%            -7.0%            -1.8%
                                                                            
  Manufacturing                                                             
   Operations segment            
                                           
   GAAP operating profit               (7)             (15)             (10)
    PPA effects                        (6)              (6)              (6)
    Restructuring                       -               (4)              (2)
    Stock based                                                             
     compensation                       -                -                - 
    Other incidentals                  (1)              (1)              (2)
                          ---------------  ---------------  --------------- 
  Manufacturing                                                             
   Operations segment                                                       
   non-GAAP operating                                                       
   profit                 $             -  $            (4) $             - 
                          ===============  ===============  =============== 
                                                                            
    Manufacturing                                                           
     Operations segment                                                     
     GAAP operating                                                         
     margin                         -24.1%           -34.9%           -17.5%
    Manufacturing                                                           
     Operations segment                                                     
     non-GAAP operating                                                     
     margin                           0.0%            -9.3%             0.0%
                                                                            
--------------------------------------------------------------------------- 
                                                                            
Corporate and Other                                                         
 Revenue                  $             1  $             1  $             1 
  Percent of Total                                                          
   Revenue                            0.1%             0.1%             0.1%
  Corporate and Other                                                       
   segment GAAP gross                                                       
   profit                               1                3                3 
    PPA effects                         -                -                - 
    Restructuring                       -                -                - 
    Stock based                                                             
     compensation                       -                -                - 
    Other incidentals                   -                -                - 
                          ---------------  ---------------  --------------- 
  Corporate and Other                                                       
   segment non-GAAP gross                                                   
   profit                 $             1  $             3  $             3 
                          ===============  ===============  =============== 
                                                                            
    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)             (59)             (16)
    PPA effects                         -                -                - 
    Restructuring                      (2)             (49)              (6)
    Stock based                                                             
     compensation                      (1)               -                - 
    Other incidentals                  (3)              (7)              (5)
                          ---------------  ---------------  --------------- 
  Corporate and Other                                                       
   segment non-GAAP                                                         
   operating profit       $            (2) $            (3) $            (5)
                          ===============  ===============  =============== 
                                                                            
    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 Reconciliation of GAAP to non-GAAP Results (unaudited)   
                                                                            
--------------------------------------------------------------------------- 
                                                                            
($ in millions except                                                       
 share data)                             Three Months Ended                 
                         -------------------------------------------------- 
                          March 31, 2013     Dec 31, 2012    April 1, 2012  
                         ---------------   ---------------  --------------- 
                                                                            
Revenue                  $         1,085   $         1,116  $           978 
                                                                            
GAAP Gross profit        $           483   $           490  $           424 
  PPA effects                         (3)               (2)              (5)
  Restructuring                       (2)              (20)              (2)
  Stock Based                                                               
   Compensation                       (1)               (1)               - 
  Other incidentals                   (2)               (2)              (2)
  Other adjustments                  (46)                -                - 
                         ---------------   ---------------  --------------- 
Non-GAAP Gross profit    $           537   $           515  $           433 
                         ===============   ===============  =============== 
                                                                            
GAAP Gross margin                   44.5%             43.9%            43.4%
                                                                            
Non-GAAP Gross margin               49.5%             46.1%            44.3%
                                                                            
  GAAP Research and                                                         
   development           $          (153)  $          (171) $          (148)
    PPA effects                    
    -                 -                - 
    Restructuring                      -               (23)               - 
    Stock based                                                             
     compensation                     (3)               (2)              (1)
    Other incidentals                 (1)               (1)              (2)
                         ---------------   ---------------  --------------- 
  Non-GAAP Research and                                                     
   development           $          (149)  $          (145) $          (145)
                         ===============   ===============  =============== 
                                                                            
  GAAP Selling, general                                                     
   and administrative    $          (222)  $          (288) $          (222)
    PPA effects                      (64)              (64)             (64)
    Restructuring                     (2)              (55)              (6)
    Stock based                                                             
     compensation                    (13)              (13)              (8)
    Other incidentals                 (3)               (8)              (5)
                         ---------------   ---------------  --------------- 
  Non-GAAP Selling,                                                         
   general and                                                              
   administrative        $          (140)  $          (148) $          (139)
                         ===============   ===============  =============== 
                                                                            
  GAAP Other income                                                         
   (expense)             $             7   $             2  $             1 
    PPA effects                        -                 -                - 
    Restructuring                      -                 -                - 
    Other incidentals                  -                (1)               - 
                         ---------------   ---------------  --------------- 
  Non-GAAP Other income                                                     
   (expense)             $             7   $             3  $             1 
                         ===============   ===============  =============== 
                                                                            
GAAP Operating income                                                       
 (loss)                  $           115   $            33  $            55 
  PPA effects                        (67)              (66)             (69)
  Restructuring                       (4)              (98)              (8)
  Stock based                                                               
   compensation                      (17)              (16)              (9)
  Other incidentals                   (6)              (12)              (9)
  Other adjustments                  (46)                -                - 
                         ---------------   ---------------  --------------- 
Non-GAAP Operating                                                          
 income (loss)           $           255   $           225  $           150 
                         ===============   ===============  =============== 
                                                                            
GAAP Operating margin               10.6%              3.0%             5.6%
                                                                            
Non-GAAP Operating                                                          
 margin                             23.5%             20.2%            15.3%
                                                                            
GAAP Financial income                                                       
 (expense)               $          (152)  $          (153) $           (73)
  Foreign exchange gain                                                     
   (loss) on debt                    (53)               31               53 
  Gain (loss) on                                                            
   extinguishment of                                                        
   long term debt                    (37)             (114)             (36)
  Other financial                                                           
   expense                           (13)              (15)             (14)
                         ---------------   ---------------  --------------- 
Non-GAAP Financial                                                          
 income (expense)        $           (49)  $           (55) $           (76)
                         ===============   ===============  =============== 
                                                                            
GAAP Income tax benefit                                                     
 (provision)             $           (11)  $             7  $             5 
  Other adjustments                   (4)               17                9 
                         ---------------   ---------------  --------------- 
Non-GAAP Cash tax                                                           
 (expense)               $            (7)  $           (10) $            (4)
                         ===============   ===============  =============== 
                                                                            
GAAP Results relating to                                                    
 equity-accounted                                                           
 investees               $            47   $            15  $             1 
  Other adjustments                   47                15                1 
                         ---------------   ---------------  --------------- 
Non-GAAP Results                                                            
 relating to equity-                                                        
 accounted investees     $             -   $             -  $             - 
                         ===============   ===============  =============== 
                                                                            
GAAP Income (loss) from                                                     
 continuing operations   $            (1)  $           (98) $           (12)
  PPA effects                        (67)              (66)             (69)
  Restructuring                       (4)              (98)              (8)
  Stock based                                                               
   compensation                      (17)              (16)              (9)
  Other incidentals                   (6)              (12)              (9)
  Other adjustments                 (106)(1)           (66)              13 
                         ---------------   ---------------  --------------- 
Non-GAAP Income (loss)                                                      
 from continuing                                                            
 operations              $           199   $           160  $            70 
                         ===============   ===============  =============== 
                                                                            
GAAP Income (loss) on                                                       
 discontinued operations                                                    
 - net of tax            $             -   $             -  $             1 
  Other adjustments                    -                 -                1 
                         ---------------   ---------------  --------------- 
Non-GAAP Income (loss)                                                      
 from discontinued                                                          
 operations              $             -   $             -  $             - 
                         ============
===   ===============  =============== 
                                                                            
GAAP Net income (loss)                                                      
 attributable to                                                            
 stockholders            $           (14)  $          (116) $           (24)
  PPA effects                        (67)              (66)             (69)
  Restructuring                       (4)              (98)              (8)
  Stock based                                                               
   compensation                      (17)              (16)              (9)
  Other incidentals                   (6)              (12)              (9)
  Other adjustments                 (106)              (66)              14 
                         ---------------   ---------------  --------------- 
Non-GAAP Net income                                                         
 (loss) attributable to                                                     
 stockholders            $           186   $           142  $            57 
                         ===============   ===============  =============== 
                                                                            
  GAAP Weighted average                                                     
   shares - diluted              249,668           248,505          247,979 
    Non-GAAP Adjustment            8,157             5,474            4,865 
                         ---------------   ---------------  --------------- 
  Non-GAAP Weighted                                                         
   average shares -                                                         
   diluted                       257,825           253,979          252,844 
                         ===============   ===============  =============== 
                                                                            
GAAP Diluted net income                                                     
 (loss) attributable to                                                     
 stockholders per share  $         (0.06)  $         (0.47) $         (0.10)
Non-GAAP Diluted net                                                        
 income (loss)                                                              
 attributable to                                                            
 stockholders per share  $          0.72   $          0.56  $          0.23 
                                                                            
--------------------------------------------------------------------------- 
                                                                            
(1) Includes: During 1Q13: Other adjustments Cost of Revenue ($46) million; 
Foreign exchange loss on debt: ($53) million; Loss on extinguishment of     
long-term debt: ($37) million; Other financial expense: ($13) million;      
Results relating to equity-accounted investees: $47 million; and difference 
between book and cash income taxes: ($4) million.                           
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 6: Adjusted EBITDA (unaudited)                                        
                                                                            
--------------------------------------------------------------------------- 
                                                                            
($ in millions)                           Three Months Ended                
                          ------------------------------------------------- 
                           March 31, 2013    Dec 31, 2012    April 1, 2012  
                          ---------------  ---------------  --------------- 
                                                                            
Net Income                $            (1) $           (98) $           (11)
  Income (loss) on                                                          
   discontinued                                                             
   operations                           -                -                1 
                          ---------------  ---------------  --------------- 
Income (loss) from                                                          
 continuing operations    $            (1) $           (98) $           (12)
                          ===============  ===============  =============== 
                                                                            
Reconciling items to                                                        
 EBITDA                                                                     
  Financial (income)                                                        
   expense                            152              153               73 
  Benefit (provision) for                                                   
   income taxes                        11               (7)              (5)
  Depreciation                         61               63               63 
  Amortization                         71               69               71 
                          ---------------  ---------------  --------------- 
EBITDA                    $           294  $           180  $           190 
                          ===============  ===============  =============== 
                                                                            
Reconciling items to                                                        
 adjusted EBITDA                                                            
  Results of equity-                                                        
   accounted investees                (47)             (15)              (1)
  Restructuring (1)                     4               98                7 
  Stock based                                                               
   compensation                        17               16                9 
  Other incidental items                                                    
   (1)                                  5               11                9 
  Other adjustments                    46                -                - 
                          ---------------  ---------------  --------------- 
Adjusted EBITDA           $           319  $           290  $           214 
                          ===============  ===============  =============== 
                                                                            
Trailing twelve month                                                       
 adjusted EBITDA          $         1,195  $         1,090  $         1,030 
                                                                            
-----------------------------
---------------------------------------------- 
                                                                            
(1) Excluding                                                               
depreciation property,                                                      
plan and equipment                                                          
related to:                                                                 
                                                                            
    Restructuring                       -                -                1 
    Other incidental                                                        
     items                              1                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

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