NXP Semiconductors Reports Second Quarter 2013 Results

NXP Semiconductors Reports Second Quarter 2013 Results 
EINDHOVEN, THE NETHERLANDS -- (Marketwired) -- 07/31/13 --  NXP
Semiconductors N.V. (NASDAQ: NXPI) 


 
                                                              
                                                    Q2 2013   
                                                --------------
             Revenue                            $1,188 million
             GAAP Gross margin                       45.0%    
             GAAP Operating margin                   14.3%    
             GAAP Diluted earnings per share         $0.43    
                                                              
             Non-GAAP Gross margin                   45.5%    
             Non-GAAP Operating margin               21.5%    
             Non-GAAP Diluted Earnings per share     $0.71    
                                                              

 
--  Trailing twelve month adjusted EBITDA $1,235 million
--  Net debt reduced $170 million year-on-year to $2,812 million
--  Announced new 10 million share repurchase program

  
NXP Semiconductors N.V. (NASDAQ: NXPI) today reported financial results
for the second quarter of 2013, ended June 30, 2013, and provided
guidance for the third quarter 2013.  
"Our revenue results for the second quarter of 2013 came in at the
higher end of our guidance, as NXP delivered Product revenue of
$1,159 million, a ten percent sequential increase, and a twelve
percent increase from the comparable year ago period. Total NXP
revenue in the second quarter was $1,188 million, just over a nine
percent sequential increase, and nearly a nine percent increase from
the comparable year ago period," said Richard Clemmer, NXP Chief
Executive Officer.  
"Our revenue performance during the quarter reflected robust double
digit sequential growth across all of our HPMS end-markets with a
strong rebound in growth in our Infrastructure & Industrial and our
Portable & Computing business. Our Identification business continues
to perform very well, as a result of strong ongoing demand for our
banking and transit products, offset slightly by product transitions
in our mobile payments business. Our Automotive business delivered
strong sequential growth due to better than s
easonal demand, combined
with the launch of a new customer entertainment program and the
continued ramp of major keyless entry programs. During the second
quarter both the Identification and Automotive business' achieved
historic revenue record levels -- a positive reflection of the
intense passion and customer focus both teams demonstrate in managing
their business. The revenue performance of the Standard products
segment was slightly below our expectations as a result of weaker
than expected demand for certain Logic products within the mobile
end-market. From an earnings perspective, we exceeded guidance
primarily as a result of better operating expense control combined
with strong revenue growth in our HPMS segment. 
"Our focus continues to be delivering top-line growth in excess of
our peers, while delivering best in class operating profitability.
The overall performance of HPMS is very good, with operating margin
solidly within our long-term target, and we are comfortable
delivering on our intermediate profitability goals. Our strategy of
providing unique and differentiated product solutions continues to
resonate with our customers, and should result in continued long-term
growth in excess of the overall end market," said Clemmer. 
Summary of Second Quarter 2013 Results ($ millions, except EPS,
unaudited) 


 
                                                                            
                                                                            
                                  Q2 2013   Q1 2013  Q2 2012    Q - Q  Y - Y
                                  -------   -------  -------   ------ ------
                                                                            
Product Revenue                   $ 1,159   $ 1,055  $ 1,032     10%    12% 
Manufacturing Operations          $    29   $    29  $    62     0%    -53% 
Corporate & Other                 $   -     $   1    $   -       NM     NM  
                                  -------   -------  -------                
Total Revenue                     $ 1,188   $ 1,085  $ 1,094     9%     9%  
GAAP Gross Profit                 $   535   $   483  $   538     11%    -1% 
  Gross Profit Adjustments (1)    $    (5)  $   (54) $    33                
Non-GAAP Gross Profit             $   540   $   537  $   505     1%     7%  
  GAAP Gross Margin                                                         
                
                       45%       45%      49%               
  Non-GAAP Gross Margin                                                     
                                       46%       50%      46%               
GAAP Operating Income             $   170   $   115  $   156     48%    9%  
  Operating Income Adjustments                                              
   (1)                                (86)     (140)     (59)               
Non-GAAP Operating Income         $   256   $   255  $   215     0%     19% 
  GAAP Operating Margin                                                     
                                       14%       11%      14%               
  Non-GAAP Operating Margin                                                 
                                       22%       24%      20%               
GAAP Net Income / (Loss)          $   111   $   (14) $   (90)    NM     NM  
  Net Income Adjustments (1)          (71)     (200)    (214)               
Non-GAAP Net Income / (Loss)      $   182   $   186  $   124     -2%    47% 
GAAP EPS                          $  0.43   $ (0.06) $ (0.36)    NM     NM  
  EPS Adjustments (1)             $ (0.28)  $ (0.78) $ (0.85)               
Non-GAAP EPS                      $  0.71   $  0.72  $  0.49     -1%    45% 

 
1. Please see "Discussion of GAAP to non-GAAP Reconciliation" on page
3 of this release.  
Supplemental Information ($ millions, unaudited) 


 
                                                                            
                                                                            
                                                     Percent                
                            Q2 2013 Q1 2013 Q2 2012 Q2 Total  Q - Q   Y - Y 
                            ------- ------- ------- -------- ------- -------
                                                                            
  Automotive                $   253 $   230 $   244    21%     10%      4%  
  Identification            $   339 $   300 $   234    29%     13%     45%  
  Infrastructure &                                                          
   Industrial               $   180 $   153 $   156    15%     18%     15%  
  Portable & Computing      $   106 $    93 $   107    9%      14%     -1%  
                            ------- ------- ------- --------                
High Performance Mixed                                                      
 Signal (HPMS)              $   878 $   776 $   741    74%     13%     18%  
Standard Products (STDP)    $   281 $   279 $   291    24%      1%     -3%  
                            ------- ------- ------- --------                
Product Revenue             $ 1,159 $ 1,055 $ 1,032    98%     10%     12%  
Manufacturing Operations    $    29 $    29 $    62    2%       0%     -53% 
Corporate & Other       
    $     - $     1 $     -    0%       NM      NM  
                            ------- ------- ------- --------                
Total Revenue               $ 1,188 $ 1,085 $ 1,094   100%      9%      9%  

 
Product Revenue is the combination of revenue from the High
Performance Mixed Signal (HPMS) and Standard Products (STDP)
segments.  
Additional and Subsequent Information for the Second Quarter of 2013: 


 
--  Effective August 1, 2013, NXP adopted a stock repurchase program to
    repurchase shares to cover in part employee stock options and equity
    rights under its long term incentive plans. Under the new repurchase
    program approved by the Board of Directors, NXP may repurchase up to
    ten (10) million shares of its common stock from time to time in both
    privately negotiated and open market transactions, subject to
    management's evaluation of market conditions, terms of private
    transactions, the best interests of NXP shareholders, applicable legal
    requirements and other factors. There is no guarantee as to the exact
    number of shares that will be repurchased under the stock repurchase
    program, and NXP may terminate the repurchase program at any time.
    Repurchased shares would be returned to the status of authorized but
    un-issued shares of common stock of NXP.
--  On May 20, 2013, NXP issued senior unsecured notes in the aggregate
    principal amount of $750 million, due June 2018, with a coupon of
    3.75%. NXP has used the net proceeds of the offering together with
    cash on hand to repay its outstanding $616 million of U.S.
    dollar-denominated Senior Secured notes due November 2016 and the
    outstanding $243 million equivalent of Euro and U.S.
    dollar-denominated Floating Rate Notes due October 2013.
--  Total gross debt at the end of the second quarter of 2013 was $3,381
    million, a $59 million reduction from the prior quarter. Cash at the
    end of the second quarter of 2013 was $569 million, resulting in a
    net-debt position of $2,812 million, a $33 million reduction from the
    prior quarter.
--  Net cash interest paid in the second quarter of 2013 was $25 million.
--  NXP repurchased 1.7M shares in the second quarter of 2013 for a total
    cost of approximately $48 million.
--  SSMC, NXP's consolidated joint-venture wafer fab with TSMC, reported
    second quarter 2013 operating income of $45 million, EBITDA of $57
    million and a closing cash balance of $360 million.
--  Utilization in NXP wafer fabs averaged 90 percent in the second
    quarter of 2013 compared to 92 percent in the year ago period and 83
    percent in the prior quarter.

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


 
                                                                            
                                                     Guidance Range         
                                               Low        Mid        High   
                                            ---------  ---------  --------- 
                                                                            
Product Revenue                             $   1,205  $   1,229  $   1,252 
  Q-Q                                               4%         6%         8%
Mfg. & Other Revenue                        $      34  $      34  $      34 
                                            ---------  ---------  --------- 
Total Revenue                               $   1,239  $   1,263  $   1,286 
  Q-Q                                               4%         6%         8%
Non-GAAP Gross Profit                       $     564  $     581  $     598 
  Non-GAAP Gross Margin                            46%        46%        47%
Non-GAAP Operating Income                   $     268  $     278  $     288 
  Non-GAAP Operating Margin                        22%        22%        22%
  Interest Expense                          $      44  $      44  $      44 
  Cash Taxes                                $       7  $       7  $       7 
  Non-controlling Interest                  $      16  $      16  $      16 
                                            ---------  ---------  --------- 
Non-GAAP Net Income                         $     201  $     211  $     221 
Ave. Diluted Shares                               258        258        258 
  Non - GAAP EPS                            $    0.78  $    0.82  $    0.86 

 
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" elsewh
ere 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 without unreasonable efforts 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, operat
ing 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. 
Conference Call and Webcast Information 
NXP will host a conference call on August 1, 2013 at 8:00 a.m. U.S.
Eastern Daylight Time (2:00 p.m. Central European Central Time) to
discuss its second quarter 2013 financial results and provide an
outlook for the third quarter of 2013.  
Interested parties may join the conference call by dialing 1 - 800 -
901 - 5213 (within the U.S.) or 1 - 617 - 786 - 2962 (outside the
U.S.). The participant pass-code is 70452866. To listen to a webcast
of the event, please visit the Investor Relations section of the NXP
website at www.nxp.com/investor. The webcast will be recorded and
available for replay shortly after the call concludes. 
About NXP Semiconductors
 NXP Semiconductors N.V. (NASDAQ: NXPI)
provides High Performance Mixed Signal and Standard Product solutions
that leverage its leading RF, Analog, Power Management, Interface,
Security and Digital Processing expertise. These innovations are used
in a wide range of automotive, identification, wireless
infrastructure, lighting, industrial, mobile, consumer and computing
applications. A global semiconductor company with operations in more
than 25 countries, NXP posted revenue of $4.36 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 NXP'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 operations (unaudited)         
                                                                            
--------------------------------------------------------------------------- 
                                                                            
                                                                            
($ in millions except share                                                 
 data)                                     Three Months Ended               
                             ---------------------------------------------- 
                              June 30, 2013  March 31, 2013   July 1, 2012  
                             --------------  --------------  -------------- 
                                                                            
Revenue                      $        1,188  $        1,085  $        1,094 
                                                                            
Cost of revenue                        (653)           (602)           (556)
                             --------------  --------------  -------------- 
                                                                            
Gross profit                            535             483             538 
                                                                            
Research and development               (155)           (153)           (156)
Selling, general and                                                        
 administrative                        (211)           (222)           (231)
                             --------------  --------------  -------------- 
Total operating expenses               (366)           (375)           (387)
                                                                            
Other income (expense)                    1               7               5 
                             --------------  --------------  -------------- 
                                                                            
Operating income (loss)                 170             115             156 
                                                                            
Financial income (expense):                                                 
  Interest income (expense)                                                 
   - net                                (47)            (49)            (70)
  Foreign exchange gain                                                     
   (loss)                                32             (53)           (104)
  Gain (loss) on                                                            
   extinguishment of long                                                   
   term debt                            (23)            (37)              - 
  Other financial expense                (8)            (13)             (4)
                             --------------  --------------  -------------- 
                                                                            
Income (loss) before taxes              124             (37)            (22)
                                                                            
Benefit (provision) for                                                     
 income taxes                             2             (11)             (7)
Results relating to equity-                                                 
 accounted investees                      3              47             (45)
                             --------------  --------------  -------------- 
                                                                            
Income (loss) from                                                          
 continuing operations                  129              (1)            (74)
Income (loss) on                                                    
        
 discontinued operations,                                                   
 net of tax                               -               -               - 
                             --------------  --------------  -------------- 
Net income (loss)                       129              (1)            (74)
Net (income) loss                                                           
 attributable to non-                                                       
 controlling interests                  (18)            (13)            (16)
                             --------------  --------------  -------------- 
Net income (loss)                                                           
 attributable to                                                            
 stockholders                           111             (14)            (90)
                                                                            
Earnings per share data:                                                    
Net income (loss)                                                           
 attributable to                                                            
 stockholders per common                                                    
 share                                                                      
                                                                            
Basic earnings per common                                                   
 share in $                  $         0.44  $        (0.06) $        (0.36)
Diluted earnings per common                                                 
 share in $                  $         0.43  $        (0.06) $        (0.36)
                                                                            
Weighted average number of                                                  
 shares of common stock (in                                                 
 thousands):                                                                
Basic     
                          249,449         249,668         248,272 
Diluted                             255,265         249,668         248,272 
                                                                            
--------------------------------------------------------------------------- 
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 2: Condensed consolidated balance sheet (unaudited)                   
                                                                            
----------------------------------------------------------------------------
                                                                            
($ in millions)                                    As of                    
                              ----------------------------------------------
                               June 30, 2013  March 31, 2013   July 1, 2012 
                              --------------  --------------  --------------
                                                                            
Current assets:                                                             
  Cash and cash equivalents   $          569  $          595  $          837
  Accounts receivable - net              495             464             451
  Other receivables                       49              48              16
  Assets held for sale                    10              10              17
  Inventories                            742             730             644
  Other current assets                   132             109              96
                              --------------  --------------  --------------
Total current assets                   1,997           1,956           2,061
                                                                            
Non-current assets:                                                         
  Investments in equity-                                                    
   accounted investees                    47              46              39
  Other non-current assets               128             131             145
  Property, plant and                                                       
   equipment                           1,030           1,039           1,044
  Identified intangible                                                     
   assets                                841             888           1,061
  Goodwill                             2,253           2,221           2,186
                              --------------  --------------  --------------
Total non-current assets               4,299           4,325           4,475
                                                                            
Total assets                           6,296           6,281           6,536
                                                                            
Current liabilities:                                                        
  Accounts payable                       521             513             524
  Liabilities held for sale                -               -               5
  Accrued liabilities                    610             599             524
  Short-term debt                         50             291              52
                              --------------  --------------  --------------
Total current liabilities              1,181           1,403           1,105
                                                                            
Non-current liabilities:                                                    
  Long-term debt                       3,331           3,149           3,767
  Other non-current                                                         
   liabilities                           451             454             447
                              --------------  --------------  --------------
Total non-current                                                           
 liabilities                           3,782           3,603           4,214
                                                                            
Non-controlling interests                219             248             201
Stockholders' equity                   1,114           1,027           1,016
                              --------------  --------------  --------------
Total equity                           1,333           1,275           1,217
                                                                            
Total liabilities and equity           6,296           6,281           6,536
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 3: Condensed consolidated statement of cash flows (unaudited)         
                                                                            
--------------------------------------------------------------------------- 
                                                                            
                                                                            
($ in millions)                            Three Months Ended               
                             ---------------------------------------------- 
                              June 30, 2013  March 31, 2013   July 1, 2012  
                             --------------  --------------  -------------- 
                                                                            
Cash Flows from operating                                                   
 activities                                                                 
Net income (loss)            $          129  $           (1) $          (74)
Adjustments to reconcile net                                                
 income (loss):                                                             
  Depreciation and                                                          
   amortization                         132             132             139 
  Stock-based compensation               20              17              15 
  Net (gain) loss on sale of                                                
   assets                                (1)             (1)              - 
  (Gain) loss on                                                            
   extinguishment of debt                23              37               - 
  Results relating to equity                                                
   accounted investees                   (3)            (47)             45 
Changes in operating assets                                                 
 and liabilities:                                                           
  (Increase) decrease in                                                    
   trade receivables                    (26)            (15)            (57)
  (Increase) decrease in                                                    
   inventories                          (10)            (20)            (12)
  Increase (decrease) in                                                    
   trade payables                         6             (44)             71 
  (Increase) decrease in                                                    
   other receivables                     (4)             (8)             18 
  Increase (decrease) in                                                    
   other payables                       (78)             17              18 
  Changes in deferred taxes               1               1              (5)
Exchange dif
ferences                    (32)             53             104 
Other items                               3              (2)              7 
                             --------------  --------------  -------------- 
Net cash provided by (used                                                  
 for) operating activities              160             119             269 
                                                                            
Cash flows from investing                                                   
 activities:                                                                
  Purchase of identified                                                    
   intangible assets                    (11)             (6)             (7)
  Capital expenditures on                                                   
   property, plant and                                                      
   equipment                            (49)            (41)            (74)
  Proceeds from disposals of                                                
   property, plant and                                                      
   equipment                              3               2               1 
  Proceeds from sale of                                                     
   interests in businesses                -               -               - 
  Purchase of interests in                                                  
   businesses                             -               -              (2)
  Proceeds from return of                                                   
   equity investment                      1               -               - 
  Other                                   -               2               - 
                             --------------  --------------  -------------- 
Net cash (used for) provided                                                
 by investing activities                (56)            (43)            (82)
                                                                            
Cash flows from financing                                                   
 activities:                                                                
  Net (repayments)                                                          
   borrowings of short-term                                                 
   debt                                  (1)             (1)              1 
  Repayments under the                                                      
   revolving credit facility           (155)           (280)           (330)
  Amounts drawn under the                                                   
   revolving credit facility            200             180             330 
  Repurchase of long-term                                                   
   debt                                (874)           (980)              - 
  Principal payments on                                                     
   long-term debt                        (5)             (4)             (5)
  Net proceeds from the                                                     
   issuance of long-term                                                    
   debt                                 742             990               1 
  Dividends paid to non-                                                    
   controlling interests                  -               -             (39)
  Cash proceeds from                                                        
   exercise of stock options             10              40               - 
  Purchase of treasury                                                      
   shares                               (48)            (35)            (37)
                             --------------  --------------  -------------- 
Net cash provided by (used                                                  
 for) financing activities             (131)            (90)            (79)
                                                                            
Net cash provided by (used                                                  
 for) continuing operations             (27)            (14)            108 
                                                                            
Cash flows from discontinued                                                
 operations:                                                                
  Net cash provided by (used                                                
   for) operating activities              -               -               - 
  Net cash provided by (used                                                
   for) investing activities              -               -             (45)
  Net cash provided by (used                                                
   for) financing activities              -               -               - 
                             --------------  --------------  -------------- 
Net cash provided by (used                                                  
 for) discontinued                                                          
 operations                               -               -             (45)
                                                                            
Net cash from continuing and                                                
 discontinued operations                (27)            (14)             63 
                                                                            
Effect of changes in                                                        
 exchange rates on cash                                                     
 positions                                1              (8)             (8)
                             --------------  --------------  -------------- 
Increase (decrease) in cash                                                 
 and cash equivalents                   (26)            (22)             55 
Cash and cash equivalents at                                                
 beginning of period                    595             617             782 
                             --------------  --------------  -------------- 
Cash and cash equivalents at                                                
 end of period                          569             595             837 
                                                                            
--------------------------------------------------------------------------- 
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 4: Reconciliation of GAAP to non-GAAP Segment Results (unaudited)     
                                                                            
--------------------------------------------------------------------------- 
                                                                            
($ in millions)                            Three Months Ended               
                             ---------------------------------------------- 
                              June 30, 2013  March 31, 2013   July 31, 2012 
                             --------------  --------------  -------------- 
                                                                            
High Performance Mixed                                                      
 Signal (HPMS)                          878             776             741 
Standard Products                       281             279             291 
                             --------------  --------------  -------------- 
  Product Revenue                     1,159           1,055           1,032 
    Manufacturing Operations             29              29              62 
    Corporate and Other                   -               1               - 
              
               --------------  --------------  -------------- 
Total Revenue                $        1,188  $        1,085  $        1,094 
                             ==============  ==============  ============== 
                                                                            
--------------------------------------------------------------------------- 
                                                                            
HPMS Revenue                 $          878  $          776  $          741 
  Percent of Total Revenue             73.9%           71.5%           67.7%
  HPMS segment GAAP gross                                                   
   profit                               472             417             449 
    PPA effects                           -               -              (6)
    Restructuring                         3              (1)              - 
    Stock based compensation             (2)             (1)              - 
    Other incidentals                    (1)              -              (2)
    Other adjustments                     -             (46)             46 
                             --------------  --------------  -------------- 
  HPMS segment non-GAAP                                                     
   gross profit              $          472  $          465  $          411 
                             ==============  ==============  ============== 
                                                                            
    HPMS segment GAAP gross                                                 
     margin                            53.8%           53.7%           60.6%
    HPMS segment non-GAAP                                                   
     gross margin                      53.8%           59.9%           55.5%
                                                                            
  HPMS segment GAAP                                                         
   operating profit                     178             123             154 
    PPA effects                         (45)            (46)            (52)
    Restructuring                         3              (1)              1 
    Stock based compensation            (16)            (12)             (9)
    Other incidentals                    (2)             (1)             (9)
    Other adjustments                     -             (46)             46 
                             --------------  --------------  -------------- 
  HPMS segment non-GAAP                                                     
   operating profit          $          238  $          229  $          177 
                             ==============  ==============  ============== 
                                                                            
    HPMS segment GAAP                                                       
     operating margin                  20.3%           15.9%           20.8%
    HPMS segment non-GAAP                                                   
     operating margin                  27.1%           29.5%           23.9%
                                                                            
                                                                            
--------------------------------------------------------------------------- 
                                                                            
Standard Products Revenue    $          281  $          279  $          291 
  Percent of Total Revenue             23.7%           25.7%           26.6%
  Standard Products segment                                                 
   GAAP gross profit                     68              70              88 
    PPA effects                           -              (1)             (1)
    Restructuring                         5              (1)             (1)
    Stock based compensation             (1)              -               - 
    Other incidentals                    (3)             (1)                
                             --------------  --------------  -------------- 
  Standard Products segment                                                 
   non-GAAP gross profit     $           67  $           73  $           90 
                             ==============  ==============  ============== 
                                                                            
    Standard Products                                                       
     segment GAAP gross                                                     
     margin                            24.2%           25.1%           30.2%
    Standard Products                                                       
     segment non-GAAP gross                                                 
     margin                            23.8%           26.2%           30.9%
                                                                            
  Standard Products segment                                                 
   GAAP operating profit                  9               7              26 
    PPA effects                         (15)            (15)            (15)
    Restructuring                         5              (1)              - 
    Stock based compensation             (4)             (4)             (3)
    Other incidentals                    (3)             (1)             (1)
                             --------------  --------------  -------------- 
  Standard Products segment                                                 
   non-GAAP operating profit $           26  $           28  $           45 
                             ==============  ==============  ============== 
                                                                            
    Standard Products                                                       
     segment GAAP operating                                                 
     margin                             3.2%            2.5%            8.9%
    Standard Products                                                       
     segment non-GAAP                                                       
     operating margin                   9.3%           10.0%           15.5%
                                                                            
                                                                            
--------------------------------------------------------------------------- 
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 4: Reconciliation of GAAP to non-GAAP Segment Results (unaudited)     
(con't)                                                                     
                                                                            
--------------------------------------------------------------------------- 
                                                                            
                                                                            
($ in millions)                            Three Months Ended               
                             ---------------------------------------------- 
                              June 30, 2013  March 31, 2013   July 1, 2012  
                             --------------  --------------  -------------- 
Manufacturing Operations                                                    
 Revenue                     $           29  $           29  $           62 
  Percent of Total Revenue              2.4%            2.7%            5.7%
  Manufacturing Operations                                                  
   segment GAAP gross profit             (6)             (5)             (3)
    PPA effects                          (3)             (2)             (2)
    Restructuring                        (2)              -               - 
    Stock based 
compensation              -               -               - 
    Other incidentals                    (1)             (1)             (1)
                             --------------  --------------  -------------- 
  Manufacturing Operations                                                  
   segment non-GAAP gross                                                   
   profit                    $            -  $           (2) $            - 
                             ==============  ==============  ============== 
                                                                            
    Manufacturing Operations                                                
     segment GAAP gross                                                     
     margin                           -20.7%          -17.2%           -4.8%
    Manufacturing Operations                                                
     segment non-GAAP gross                                                 
     margin                             0.0%           -6.9%            0.0%
                                                                            
  Manufacturing Operations                                                  
   segment GAAP operating                                                   
   profit                               (10)             (7)             (5)
    PPA effects                          (6)             (6)             (6)
    Restructuring                        (2)              -               - 
    Stock based compensation              -               -               - 
    Other incidentals                    (1)             (1)              2 
                             --------------  --------------  -------------- 
  Manufacturing Operations                                                  
   segment non-GAAP                                                         
   operating profit          $           (1) $            -  $           (1)
                             ==============  ==============  ============== 
                                                                            
    Manufacturing Operations                                                
     segment GAAP operating                                                 
     margin                           -34.5%          -24.1%           -8.1%
    Manufacturing Operations                                                
     segment non-GAAP                                                       
     operating margin                  -3.4%            0.0%           -1.6%
                                                                            
                                                                            
--------------------------------------------------------------------------- 
                                                                            
Corporate and Other Revenue  $            -  $            1  $            - 
  Percent of Total Revenue              0.0%            0.1%            0.0%
  Corporate and Other                                                       
   segment GAAP gross profit              1               1               4 
    PPA effects                           -               -               - 
    Restructuring                         -               -               - 
    Stock based compensation              -               -               - 
    Other incidentals                     -               -               - 
                             --------------  --------------  -------------- 
  Corporate and Other                                                       
   segment non-GAAP gross                                                   
   profit                    $            1  $            1  $            4 
                             ==============  ==============  ============== 
                                                                            
  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                                (7)             (8)            (19)
    PPA effects                           -               -               - 
    Restructuring                         4              (2)             (2)
    Stock based compensation              -              (1)             (3)
    Other incidentals                    (4)             (3)             (8)
                             --------------  --------------  -------------- 
  Corporate and Other                                                       
   segment non-GAAP                                                         
   operating profit          $           (7) $           (2) $           (6)
                             ==============  ==============  ============== 
                                                                            
  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                
                          ------------------------------------------------- 
                           June 30, 2013     March 31, 2013   July 1, 2012  
                          --------------     --------------  -------------- 
                                                                            
Revenue                   $        1,188     $        1,085  $        1,094 
                                                                            
GAAP Gross profit         $          535     $          483  $          538 
  PPA effects                         (3)                (3)             (9)
  Restructuring                        6                 (2)             (1)
  Stock Based                                                               
   Compensation                       (3)                (1)              - 
  Other incidentals                   (5)                (2)             (3)
  Other adjustments                    -                (46)             46 
                          --------------     --------------  -------------- 
Non-GAAP Gross profit     $          540     $          537  $          505 
                          ==============     ==============  ============== 
                                                                            
GAAP Gross margin                   45.0%              44.5%           49.2%
                                                                            
Non-GAAP Gross margin               45.5%              49.5%           46.2%
                                                                            
  GAAP Research and                                                         
   development            $         (155)    $         (153) $         (156)
    PPA effects                        -                  -               - 
    Restructuring                      -                  -               1 
    Stock based                                                             
     compensation                     (2)                (3)             (1)
    Other incidentals                 (1)                (1)             (6)
                          --------------     --------------  -------------- 
  Non-GAAP Research and                                                     
   development            $         (152)    $         (149) $         (150)
                          ==============     ==============  ============== 
                                                                            
  GAAP Selling, general                                                     
   and administrative     $         (211)    $         (222) $         (231)
    PPA effects                      (63)               (64)            (64)
    Restructuring                      4                 (2)             (2)
    Stock based                                                             
     compensation                    (15)               (13)            (14)
    Other incidentals                 (4)                (3)             (9)
                          --------------     --------------  -------------- 
  Non-GAAP Selling,                                                         
   general and                                                              
   administrative         $         (133)    $         (140) $         (142)
                          ==============     ==============  ============== 
                                                                            
  GAAP Other income                                                         
   (expense)              $            1     $            7  $            5 
    PPA effects                        -                  -               - 
    Restructuring                      -                  -               1 
    Other incidentals                  -                  -               2 
                          --------------     --------------  -------------- 
  Non-GAAP Other income                                                     
   (expense)              $            1     $            7  $            2 
                          ==============     ==============  ============== 
                                                                            
GAAP Operating income                                                       
 (loss)                   $          170     $          115  $          156 
  PPA effects                        (66)               (67)            (73)
  Restructuring                       10                 (4)             (1)
  Stock based                                                               
   compensation                      (20)               (17)            (15)
  Other incidentals                  (10)                (6)            (16)
  Other adjustments                    -                (46)             46 
                          --------------     --------------  -------------- 
Non-GAAP Operating income                                                   
 (loss)                   $          256     $          255  $          215 
                          ==============     ==============  ============== 
                                                                            
GAAP Operating margin               14.3%              10.6%           14.3%
                                                                            
Non-GAAP Operating margin           21.5%              23.5%           19.7%
                                                                            
GAAP Financial income                                                       
 (expense)                $          (46)    $         (152) $         (178)
  Foreign exchange gain                                                     
   (loss) on debt                     32                (53)           (104)
  Gain (loss) on                                                            
   extinguishment of long                                                   
   term debt                         (23)               (37)              - 
  Other financial expense             (8)               (13)             (4)
                          --------------     --------------  -------------- 
Non-GAAP Financial income                                                   
 (expense)                $          (47)    $          (49) $          (70)
                          ==============     ==============  ============== 
                                                                            
GAAP Income tax benefit                                                     
 (provision)              $            2     $          (11) $           (7)
  Other adjustments                   11                 (4)             (2)
                          --------------     --------------  -------------- 
Non-GAAP Cash tax                                                           
 (expense)                $           (9)    $           (7) $           (5)
                          ==============     ==============  ============== 
                                                                            
GAAP Results relating to                                                    
 equity-accounted                                                           
 investees                $            3     $           47  $          (45)
  Other adjustments                    3                 47             (45)
Non-GAAP Results relating                                                   
 to equity-accounted                                                        
 investees                $            -     $            -  $            - 
                                                                            
GAAP Income (loss) from                                                     
 continuing operations    $          129     $           (1) $          (74)
  PPA effects                        (66)               (67)            (73)
  Restructuring                       10                 (4)             (1)
  Stock based                                                               
   compensation                      (20)               (17)            (15)
  Other incidentals                  (10)                (6)            (16)
  Other adjustments                   15  1)           (106)           (109)
                          --------------     --------------  -------------- 
Non-GAAP Income (loss)                                                      
 from continuing                                                            
 operations               $          200     $          199  $          140 
                          ==============     ==============  ============== 
                                                                            
GAAP Income (loss) on                                                       
 discontinued operations                                                    
 - net of tax             $            -     $            -  $            - 
  Other adjustments       $            -                  -               - 
Non-GAAP Income (loss)                                                      
 from discontinued                                                          
 operations               $            -     $            -  $            - 
                                                                            
GAAP Net income (loss)                                                      
 attributable to                                                            
 stockholders             $          111     $          (14) $          (90)
  PPA effects                        (66)               (67)            (73)
  Restructuring                       10                 (4)             (1)
  Stock based                                                               
   compensation                      (20)               (17)            (15)
  Other incidentals                  (10)                (6)            (16)
  Other adjustments                   15               (106)           (109)
                          --------------     --------------  -------------- 
Non-GAAP Net income                                                         
 (loss) attributable to                                                     
 stockholders             $          182     $          186  $          124 
                          ==============     ==============  ============== 
                                                                            
GAAP Weighted average                                                       
 shares - diluted                255,265            249,668         248,272 
  Non-GAAP Adjustment                  -              8,157           5,115 
                          --------------     --------------  -------------- 
Non-GAAP Weighted average                                                   
 shares - diluted                255,265            257,825         253,387 
                          ==============     ==============  ============== 
                                                                            
GAAP Diluted net income                                                     
 (loss) attributable to                                                     
 stockholders per share   $         0.43     $        (0.06) $        (0.36)
Non-GAAP Diluted net                                                        
 income (loss)                                                              
 attributable to                                                            
 stockholders per share   $         0.71     $         0.72  $         0.49 
                                                                            
--------------------------------------------------------------------------- 
                                                                            
                                                                            
1) Includes: During 2Q13: Foreign exchange gain on debt: $32 million; Loss  
 on extinguishment of long-term debt: ($23) million; Other financial        
 expense: ($8) million; Results relating to equity-accounted investees: $3  
 million; and difference between book and cash income taxes: $11 million.   
                                                                            
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 6: Adjusted EBITDA (unaudited)                                        
                                                                            
--------------------------------------------------------------------------- 
                                                                            
                                                                            
($ in millions)                            Three Months Ended               
                             ---------------------------------------------- 
                              June 30, 2013  March 31, 2013   July 1, 2012  
                             --------------  --------------  -------------- 
                                                                            
                             --------------  --------------  -------------- 
Net Income                   $          129  $           (1) $          (74)
                             ==============  ==============  ============== 
                                                                            
Reconciling items to EBITDA                                                 
  Financial (income) expense             46             152             178 
  (Benefit) provision for                                                   
   income taxes                          (2)             11               7 
  Depreciation                           61              61              62 
  Amortization                           71              71              77 
                             --------------  --------------  -------------- 
EBITDA                       $          305  $          294  $          250 
                             ==============  ==============  ============== 
                                                                            
Reconciling items to                                                        
 adjusted EBITDA                                                            
  Results of equity-                                                        
   accounted investees                   (3)            (47)             45 
  Restructuring 1)                      (11)              4               1 
  Stock based compensation               20              17              15 
  Other incidental items 1)               9               5              15 
  Other adjustments                       -              46             (46)
                             --------------  --------------  -------------- 
Adjusted EBITDA              $          320  $          319  $          280 
                             ==============  ==============  ============== 
                                                                            
Trailing twelve month                                                       
 adjusted EBITDA             $        1,235  $        1,195  $        1,007 
                                                                            
--------------------------------------------------------------------------- 
                                                                            
  1) Excluding depreciation                                                 
   property, plant and                                                      
   equipment related to:                                                    
                                                                            
    Restructuring                         1               -               - 
    Other incidental items                1               1               1 

  
For further information, please contact: 
Investors:
Jeff Palmer
jeff.palmer@nxp.com
+1 408 518 5411 
Media:
Pieter van Nuenen
pieter.van.nuenen@nxp.com
+31 402 725 398 
 
 
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