SOURCE: NXP Semiconductors

NXP Semiconductors

April 26, 2012 16:15 ET

NXP Semiconductors Reports First Quarter 2012 Results

EINDHOVEN, THE NETHERLANDS--(Marketwire - Apr 26, 2012) - NXP Semiconductors N.V. (NASDAQ: NXPI) today reported financial results for the first quarter of 2012, ended April 1, 2012, and provided guidance for the second quarter 2012.

Q1 2012
Revenue $ 978 million
GAAP Gross margin 43.4 %
GAAP Operating margin 5.6 %
GAAP Earnings/(Loss) per share $ (0.10 )
Non-GAAP Gross margin 44.3 %
Non-GAAP Operating margin 14.4 %
Non-GAAP Earnings per share $ 0.19
  • Trailing twelve month adjusted EBITDA $1,004 million
  • Net debt reduced $707 million year-on-year to $3,047 million
  • Ratio of net debt to trailing 12-month adjusted EBITDA at 3.0x

"We are pleased with our performance in the first quarter of 2012 as we delivered revenue of $978 million, which was near the upper end of our original guidance range. We believe NXP is in the early stages of a positive cyclical rebound, but more importantly we are beginning to see tangible acceleration of company specific design-wins driven by the material adoption of our technology. This has resulted in an improvement in order rates with many of our customers and across nearly all product lines. We are encouraged that our efforts over the last few years are delivering tangible results as demonstrated by a combination of our first quarter results and our outlook for the second quarter. We continue to believe the combination of our unique product portfolio, applications knowledge and customer focus should enable NXP to grow in excess of the overall semiconductor industry," said Richard Clemmer, NXP Chief Executive Officer.

First Quarter 2012 GAAP Results ($ millions, except EPS)

Q1 2011 Q4 2011 Q1 2012 Q - Q Y - Y
Product Revenue $ 979 $ 857 $ 912 6.4 % -6.8 %
Mfg. & Other Revenue $ 103 $ 74 $ 66 -10.8 % -35.9 %
Total Revenue $ 1,082 $ 931 $ 978 5.0 % -9.6 %
Gross Profit $ 506 $ 389 $ 424 9.0 % -16.2 %
Gross Margin 46.8 % 41.8 % 43.4 %
Operating Income $ 108 $ 7 $ 55 685.7 % -49.1 %
Operating Margin 10.0 % 0.8 % 5.6 %
Net Income / (Loss) $ 187 $ (182 ) $ (24 ) NM NM
GAAP EPS $ 0.73 $ (0.73 ) $ (0.10 ) NM NM

First Quarter 2012 non-GAAP Results ($ millions, except EPS)

Q1 2011 Q4 2011 Q1 2012 Q - Q Y - Y
Total Revenue $ 1,082 $ 931 $ 978 5.0 % -9.6 %
Gross Profit $ 517 $ 423 $ 433 2.4 % -16.2 %
Gross Margin 47.8 % 45.4 % 44.3 %
Operating Income $ 223 $ 148 $ 141 -4.7 % -36.8 %
Operating Margin 20.6 % 15.9 % 14.4 %
Net Income / (Loss) $ 117 $ 59 $ 48 -18.6 % -59.0 %
Non - GAAP EPS $ 0.46 $ 0.24 $ 0.19 -20.8 % -58.7 %

Supplemental Information ($ millions)

Q1 2011 Q4 2011 Q1 2012 Q1 % Total Q - Q Y - Y
AUTO $ 238 $ 218 $ 229 23 % 5.0 % -4 %
IDEN $ 189 $ 155 $ 187 19 % 20.6 % -1 %
WILI $ 135 $ 122 $ 121 12 % -0.8 % -10 %
MCC $ 180 $ 164 $ 173 18 % 5.5 % -4 %
HPMS $ 742 $ 659 $ 710 73 % 7.7 % -4 %
STDP $ 237 $ 198 $ 202 21 % 2.0 % -15 %
Product Revenue $ 979 $ 857 $ 912 93 % 6.4 % -7 %
MFG & OTHER $ 103 $ 74 $ 66 7 % -10.8 % -36 %
Total Revenue $ 1,082 $ 931 $ 978 100 % 5.0 % -10 %

Note:
AUTO is the HPMS Automotive business; IDEN is the HPMS Identification business; WILI is the HPMS Wireless Infrastructure, Lighting and Industrial business; MCC is the HPMS Mobile, Consumer and Computing business; HPMS is the High Performance Mixed Signal segment; STDP is the Standard Products segment; MFG & OTHER is the combination of Manufacturing Services and Other Corporate revenue.

Product Revenue is the combination of revenue from the High Performance Mixed Signal (HPMS) and Standard Products segments. The decline in the Manufacturing Operations and Other segment is due to the expiration of contractual obligations to provide manufacturing services for previously divested businesses.

Additional Information for the First Quarter of 2012:

  • During the first quarter 2012, NXP completed a new $475 million Senior Secured Term Loan Facility due 2019. The new term loan has a seven year maturity, with margin of LIBOR + 400bps, a LIBOR floor of 1.25% and was priced at 98.5% of par. The covenants of the term loan substantially correspond to those contained in NXP's existing secured notes and credit facilities. Utilizing the net proceeds from the new $475 million term loan and drawing on its existing revolving credit facility, NXP redeemed $509.8 million of its U.S. dollar-denominated Senior Secured Floating Rate Notes due 2015 and EUR 203.4 million of its Euro-denominated Senior Secured Floating Rate Notes due 2015.
  • The total debt balance at the end of the first quarter 2012 was $3,829 million, an increase of $30 million from the $3,799 million in the prior quarter primarily due a combination of currency fluctuations on NXPs euro-based debt and refinancing costs associated with the new 2019 term loan.
  • Net cash interest paid in the first quarter of 2012 was $115 million.
  • SSMC, NXP's consolidated joint-venture wafer fab with TSMC, reported first quarter 2012 operating income of $34 million, EBITDA of $45 million and a closing cash balance of $274 million.
  • Utilization in NXP wafer fabs averaged 84 percent in the first quarter 2012 compared to 97 percent in the year ago period and 71 percent in the prior quarter.

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

Guidance Range
Low Mid High
Product Revenue $ 976 $ 994 $ 1,012
Q-Q 7 % 9 % 11 %
Mfg. & Other Revenue $ 59 $ 59 $ 59
Total Revenue $ 1,035 $ 1,053 $ 1,071
Q-Q 6 % 8 % 10 %
Non-GAAP Gross Profit $ 490 $ 499 $ 509
Gross Margin 47.3 % 47.4 % 47.5 %
Non-GAAP Operating Income $ 191 $ 196 $ 202
Operating Margin 18.5 % 18.6 % 18.9 %
Interest Expense $ 71 $ 71 $ 71
Cash Taxes $ 10 $ 9 $ 8
Non-controlling Interest $ 13 $ 14 $ 15
Non-GAAP Net Income $ 97 $ 102 $ 108
Ave. Diluted Shares 254 254 254
Non - GAAP EPS $ 0.38 $ 0.40 $ 0.43

Discussion of GAAP to non-GAAP Reconciliations

NXP provides financial information on both a U.S. generally accepted accounting principles (GAAP) and non-GAAP basis. Reconciliations of these non-GAAP measures to the most comparable measures calculated in accordance with GAAP are provided in this release.

Non-GAAP information should not be considered a substitute for any information derived or calculated in accordance with GAAP. NXP provides this information as an additional insight as to how management assesses the performance and allocation of resources among its various segments and because the financial community uses it in its analysis of NXP's operating performance, historical results and projections of NXP's future operating results.

The non-GAAP measures used herein are not intended to be measures of financial performance or condition, liquidity or profitability 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.

Certain information referred to in this release, including "non-GAAP gross margin", "non-GAAP operating margin", "EBITDA", "Adjusted EBITDA" and "Trailing 12 month adjusted EBITDA", have not been derived in accordance with GAAP and can vary from other participants in the semiconductor industry. These measures have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of NXP's financial results as reported under GAAP. In this release the use of the terms:

  • "Non-GAAP gross profit", "non-GAAP gross margin", "non-GAAP operating margin", "non-GAAP operating income", "non-GAAP net income" and "non-GAAP EPS" are all non-GAAP financial measure that reflect the underlying operating and profit structure of NXP operations net of purchase price accounting ("PPA"), restructuring, other incidental items and the impact of other non-cash adjustments.

  • "EBITDA", "Adjusted EBITDA" and " Trailing 12 month adjusted EBITDA", are not intended to be a measure of free cash flow for management's discretionary use, as these metrics do not consider certain cash requirements such as interest payments, tax payments, debt service requirements and replacement of fixed assets.

  • "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. The PPA effect on the Company's gross profit refers to additional depreciation charges on tangible fixed assets, resulting from the step-up in fair values. The amortization charges related to long-lived intangible assets are primarily reflected in general and administrative expenses.

  • "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). NXP presents other incidental items in its analysis of results of operations because these costs, gains and losses, have affected the comparability of the company's results over the years.

  • "Net debt" refers to the sum total of long and short term debt less total cash and cash equivalents, as reflected on the balance sheet.

Conference Call and Webcast Information
NXP will host a conference call on April 26, 2012 at 4:45 p.m. U.S. Eastern Daylight Time (10:45 p.m. Central European Time) to discuss its first quarter 2012 results and provide an outlook for the second quarter of 2012.

Interested parties may join the conference call by dialing 1-866-804-6924 (within the U.S.) or 1-857-350-1670 (outside the U.S.). The participant passcode is 52164375. To listen to the webcast, please visit the Investor Relations section of the NXP website at www.nxp.com/investor. The webcast will be recorded and available for replay shortly after the call concludes.

About NXP Semiconductors
NXP Semiconductors N.V. (NASDAQ: NXPI) provides High Performance Mixed Signal and Standard Product solutions that leverage its leading RF, Analog, Power Management, Interface, Security and Digital Processing expertise. These innovations are used in a wide range of automotive, identification, wireless infrastructure, lighting, industrial, mobile, consumer and computing applications. A global semiconductor company with operations in more than 25 countries, NXP posted revenue of $4.2 billion in 2011. Additional information can be found by visiting www.nxp.com.

Forward-looking Statements
This document includes forward-looking statements which include statements regarding NXP's business strategy, financial condition, results of operations, and market data, as well as any other statements which are not historical facts. By their nature, forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors, risks and uncertainties include the following: market demand and semiconductor industry conditions; the ability to successfully introduce new technologies and products; the end-market demand for the goods into which NPX's products are incorporated; the ability to generate sufficient cash, raise sufficient capital or refinance corporate debt at or before maturity; the ability to meet the combination of corporate debt service, research and development and capital investment requirements; the ability to accurately estimate demand and match manufacturing production capacity accordingly or obtain supplies from third-party producers; the access to production capacity from third-party outsourcing partners; any events that might affect third-party business partners or NXP's relationship with them; the ability to secure adequate and timely supply of equipment and materials from suppliers; the ability to avoid operational problems and product defects and, if such issues were to arise, to correct them quickly; the ability to form strategic partnerships and joint ventures and to successfully cooperate with alliance partners; the ability to win competitive bid selection processes to develop products for use in customers' equipment and products; the ability to successfully establish a brand identity; the ability to successfully hire and retain key management and senior product architects; and, the ability to maintain good relationships with our suppliers. In addition, this document contains information concerning the semiconductor industry and NXP's business segments generally, which is forward-looking in nature and is based on a variety of assumptions regarding the ways in which the semiconductor industry, NXP's market segments and product areas may develop. NXP has based these assumptions on information currently available, if any one or more of these assumptions turn out to be incorrect, actual market results may differ from those predicted. While NXP does not know what impact any such differences may have on its business, if there are such differences, its future results of operations and its financial condition could be materially adversely affected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak to results only as of the date the statements were made. Except for any ongoing obligation to disclose material information as required by the United States federal securities laws, NXP does not have any intention or obligation to publicly update or revise any forward-looking statements after we distribute this document, whether to reflect any future events or circumstances or otherwise. For a discussion of potential risks and uncertainties, please refer to the risk factors listed in our SEC filings. Copies of our SEC filings are available on our Investor Relations website, www.nxp.com/investor or from the SEC website, www.sec.gov.

NXP Semiconductors
Condensed consolidated statements of operations (unaudited)
Table 1
($ in millions except share data) Q1 2011 Q4 2011 Q1 2012
Revenue 1,082 931 978
Cost of revenue (576 ) (542 ) (554 )
Gross profit 506 389 424
Research and development (154 ) (151 ) (148 )
Selling, general and administrative (234 ) (236 ) (222 )
Total operating expenses (388 ) (387 ) (370 )
Other income (expense) (10 ) 5 1
Operating income (loss) 108 7 55
Financial income (expense):
Interest income (expense) - net (81 ) (74 ) (76 )
Foreign exchange gain (loss) on debt 190 (65 ) 53
Gain (loss) on extinguishment of long term debt - (7 ) (36 )
Other financial expense (8 ) (19 ) (14 )
Income (loss) before taxes 209 (158 ) (18 )
Benefit (provision) for income taxes 1 (2 ) 5
Results relating to equity-accounted investees 1) (22 ) (15 ) 1
Income (loss) from continuing operations 188 (175 ) (12 )
Income (loss) on discontinued operations, net of tax 13 2 1
Net income (loss) 201 (173 ) (11 )
Net (income) loss attributable to non-controlling interests (14 ) (9 ) (13 )
Net income (loss) attributable to stockholders 187 (182 ) (24 )
Earnings per share data:
Net income (loss) attributable to stockholders per common share in $:
Basic earnings per common share in $
Income (loss) from continuing operations 0.70 (0.74 ) (0.10 )
Income (loss) from discontinued operations 0.05 0.01 -
Net income (loss) 0.75 (0.73 ) (0.10 )
Diluted earnings per common share in $
Income (loss) from continuing operations 0.68 (0.74 ) (0.10 )
Income (loss) from discontinued operations 0.05 0.01 -
Net income (loss) 0.73 (0.73 ) (0.10 )
Weighted average number of shares of common stock used in computing per share amounts (in thousands):
- Basic 250,402 247,586 247,979
- Diluted 256,589 247,586 247,979
NXP Semiconductors
Condensed consolidated balance sheets (unaudited)
Table 2
($ in millions unless otherwise stated) April 3, 2011 Dec. 31, 2011 April 1, 2012
Current assets:
Cash and cash equivalents 879 743 782
Receivables:
Accounts receivable - net 431 441 410
Other receivables 32 38 23
Total receivables 463 479 433
Assets held for sale 45 39 38
Current assets of discontinued operations 102 - -
Inventories 537 618 619
Other current assets 129 87 117
Total current assets 2,155 1,966 1,989
Non-current assets:
Investments in equity-accounted investees 110 37 38
Non-current assets of discontinued operations 290 - -
Other non-current assets 175 144 145
Property, plant and equipment 1,148 1,063 1,049
Intangible assets excluding goodwill 1,466 1,171 1,173
Goodwill 2,409 2,231 2,288
Total non-current assets 5,598 4,646 4,693
Total assets 7,753 6,612 6,682
Current liabilities:
Accounts payable 539 455 462
Liabilities held for sale 21 21 22
Current liabilities of discontinued operations 59 - -
Accrued liabilities 445 332 359
Short-term provisions 67 130 123
Other current liabilities 115 59 56
Short-term debt 435 52 382
Total current liabilities 1,681 1,049 1,404
Non-current liabilities:
Long-term debt 4,198 3,747 3,447
Long-term provisions 370 347 342
Non-current liabilities of discontinued operations 22 - -
Other non-current liabilities 105 112 135
Total non-current liabilities 4,695 4,206 3,924
Non-controlling interests 246 212 186
Stockholder's equity 1,131 1,145 1,168
Total equity 1,377 1,357 1,354
Total liabilities and equity 7,753 6,612 6,682
NXP Semiconductors
Condensed consolidated statements of cash flows (unaudited)
Table 3
($ in millions unless otherwise stated) Q1 2011 Q4 2011 Q1 2012
Cash Flows from operating activities
Net income (loss) 201 (173 ) (11 )
(Income) loss from discontinued operations, net of tax (13 ) (2 ) (1 )
Adjustments to reconcile net income (loss):
Depreciation and amortization 145 151 134
Net (gain) loss on sale of assets 15 (2 ) -
(Gain) loss on extinguishment of debt - 7 36
Results relating to equity accounted investees 22 15 (1 )
Changes in operating assets and liabilities:
(Increase) decrease in trade receivables (16 ) (45 ) 41
(Increase) decrease in inventories (10 ) (14 ) 12
Increase (decrease) in trade payables (66 ) (70 ) 1
(Increase) decrease in other receivables (13 ) 28 (7 )
Increase (decrease) in other payables (15 ) (41 ) (49 )
Increase (decrease) in provisions (98 ) 30 (16 )
Changes in deferred taxes 17 4 (5 )
Exchange differences (190 ) 65 (53 )
Other items 18 13 16
Net cash provided by (used for) operating activities (3 ) (34 ) 97
Cash flows from investing activities:
Purchase of intangible assets (2 ) (5 ) (7 )
Capital expenditures on property, plant and equipment (64 ) (41 ) (39 )
Proceeds from disposals of property, plant and equipment 11 1 -
Proceeds from disposals of assets held for sale - 11 -
Proceeds from the sale of other non-current financial assets 1 1 1
Net cash (used for) provided by investing activities (54 ) (33 ) (45 )
Cash flows from financing activities:
Net (repayments) borrowings of short-term debt 10 (1 ) (5 )
Amounts drawn under the revolving credit facility - - 330
Repurchase of long-term debt - (1,089 ) (815 )
Principal payments on long-term debt (2 ) (5 ) (4 )
Net proceeds from the issuance of long-term debt - 1,082 464
Cash proceeds from exercise of stock options - 1 2
Net cash provided by (used for) financing activities 8 (12 ) (28 )
Net cash provided by (used for) continuing operations (49 ) (79 ) 24
Cash flows from discontinued operations:
Net cash provided by (used for) operating activities 16 - -
Net cash provided by (used for) investing activities (10 ) (31 ) -
Net cash provided by (used for) financing activities - - -
Net cash provided by (used for) discontinued operations 6 (31 ) -
Net cash from continuing and discontinued operations (43 ) (110 ) 24
Effect of changes in exchange rates on cash positions 30 (12 ) 15
Increase (decrease) in cash and cash equivalents (13 ) (122 ) 39
Cash and cash equivalents at beginning of period 908 865 743
Cash and cash equivalents at end of period 895 743 782
Less: cash and cash equivalents at end of period-discontinued operations 16 - -
Cash and cash equivalents at end of period-continuing operations 879 743 782

For a number of reasons, principally the effects of translation differences and consolidation changes, certain items in the statements of cash flows do not correspond to the differences between the balance sheet amounts for the respective items.

NXP Semiconductors
Segment Results

Segment Revenue
Table 4
($ in millions)
Q1 2011

Q4 2011

Q1 2012
High Performance Mixed Signal 742 659 710
Standard Products 237 198 202
Product Revenue 979 857 912
Manufacturing Operations 92 62 57
Corporate and Other 11 12 9
Total NXP revenue 1,082 931 978
High Performance Mixed Signal Segment Results
Table 5
($ in millions, unless otherwise stated)
Q1 2011

Q4 2011

Q1 2012
Revenue 742 659 710
% of Product Revenue 75.8 % 76.9 % 77.9 %
GAAP gross profit 422 321 364
% of revenue 56.9% 48.7 % 51.3 %
Non-GAAP gross profit 423 345 366
% of revenue 57.0 % 52.4 % 51.5 %
Operating income (loss) 121 20 71
% of revenue 16.3 % 3.0 % 10.0 %
Non-GAAP operating income 175 111 123
% of revenue 23.6 % 16.8 % 17.3 %
Standard Products Segment Results
Table 6
($ in millions, unless otherwise stated)
Q1 2011

Q4 2011

Q1 2012
Revenue 237 198 202
% of Product Revenue 24.2 % 23.1 % 22.1 %
GAAP gross profit 87 67 58
% of revenue 36.7 % 33.8 % 28.7 %
Non-GAAP gross profit 87 72 59
% of revenue 36.7 % 36.4 % 29.2 %
Operating income (loss) 35 17 9
% of revenue 14.8 % 8.6 % 4.5 %
Non-GAAP operating income (loss) 49 37 22
% of revenue 20.7 % 18.7 % 10.9 %

NXP Semiconductors
Segments Reconciliation

Q1 2012
Table 7
($ in millions)
GAAP
PPA
effects

Restructuring
Other Incidentals
Non-GAAP
Gross profit
HPMS 364 (2 ) - - 366
Standard Products 58 (1 ) - - 59
Manufacturing Operations (7 ) (2 ) (2 ) (2 ) (1 )
Corporate and Other 9 - - - 9
Total NXP 424 (5 ) (2 ) (2 ) 433
Operating income (loss)
HPMS 71 (50 ) - (2 ) 123
Standard Products 9 (13 ) - - 22
Manufacturing Operations (10 ) (6 ) (2 ) (2 ) -
Corporate and Other (15 ) - (6 ) (5 ) (4 )
Total NXP 55 (69 ) (8 ) (9 ) 141
Q4 2011
Table 8
($ in millions)
GAAP
PPA effects
Restructuring
Other Incidentals
Non-GAAP
Gross profit
HPMS 321 (4 ) (20 ) - 345
Standard Products 67 (1 ) (4 ) - 72
Manufacturing Operations (7 ) (1 ) 1 (5 ) (2 )
Corporate and Other 8 - - - 8
Total NXP 389 (6 ) (23 ) (5 ) 423
Operating income (loss)
HPMS 20 (53 ) (38 ) - 111
Standard Products 17 (14 ) (5 ) (1 ) 37
Manufacturing Operations (10 ) (6 ) 2 (4 ) (2 )
Corporate and Other (20 ) - (18 ) (4 ) 2
Total NXP 7 (73 ) (59 ) (9 ) 148
Q1 2011
Table 9
($ in millions)
GAAP
PPA
effects

Restructuring
Other Incidentals
Non-GAAP
Gross profit
HPMS 422 (1 ) - - 423
Standard Products 87 - - - 87
Manufacturing Operations (14 ) (2 ) (6 ) (2 ) (4 )
Corporate and Other 11 - - - 11
Total NXP 506 (3 ) (6 ) (2 ) 517
Operating income (loss)
HPMS 121 (52 ) (1 ) (1 ) 175
Standard Products 35 (14 ) - - 49
Manufacturing Operations (16 ) (7 ) (6 ) (1 ) (2 )
Corporate and Other (32 ) - (9 ) (24 ) 1
Total NXP 108 (73 ) (16 ) (26 ) 223

NXP Semiconductors
Financial Reconciliation - GAAP to non-GAAP (unaudited)

Q1 2012
Table 10
($ in millions)
GAAP
PPA effects
Restructuring
Other Incidental Other Adjustments Non-GAAP
Revenue 978 - - - - 978
Gross profit 424 (5 ) (2 ) (2 ) - 433
% of revenue 43.4 % 44.3 %
Research and development (148 ) - - (2 ) - (146 )
Selling, general and administrative (222 ) (64 ) (6 ) (5 ) - (147 )
Total operating expense (370 ) (64 ) (6 ) (7 ) - (293 )
Other income (expense) 1 - - - - 1
Operating income (loss) 55 (69 ) (8 ) (9 ) - 141
% of revenue 5.6 % 14.4 %
Interest income (expense) net (76 ) (76 )
Benefit (provision) for income taxes 5 (4 ) 1)
Income (loss) from continuing operations
(12

)

(69

)

(8

)

(9

)

13
2)

61
Income (loss) on discontinued operations, net of tax
1

1

-
Net (income) loss attributable to non- controlling interests
(13

)

(13

)
Net income (loss) attributable to stockholders
(24

)

(69

)

(8

)

(9

)

14

48
3)
Weighted average diluted shares outstanding (in thousands):
247,979

252,844
Diluted earnings (loss) per common share attributable to stockholders
(0.10

)

0.19

1) Cash income taxes paid during the period.
2) Includes: Foreign exchange gain on debt: $53 million; Loss on extinguishment of long-term debt: $(36) million; Other financial expense: $(14) million; Results relating to equity-accounted investees: $1 million; and difference between book and cash income taxes: $9 million.
3) Includes stock-based compensation expense of $9 million.

NXP Semiconductors
Financial Reconciliation - GAAP to non-GAAP (unaudited)

Q4 2011
Table 11
($ in millions)
GAAP
PPA effects
Restructuring
Other Incidental Other Adjustments Non-GAAP
Revenue 931 - - - - 931
Gross profit 389 (6 ) (23 ) (5 ) - 423
% of revenue 41.8 % 45.4 %
Research and development (151 ) - (18 ) - - (133 )
Selling, general and administrative (236 ) (67 ) (18 ) (7 ) - (144 )
Total operating expense (387 ) (67 ) (36 ) (7 ) - (277 )
Other income (expense) 5 - - 3 - 2
Operating income (loss) 7 (73 ) (59 ) (9 ) - 148
% of revenue 0.8 % 15.9 %
Interest income (expense) net (74 ) (74 )
Benefit (provision) for income taxes (2 ) (6 ) 1)
Income (loss) from continuing operations
(175

)

(73

)

(59

)

(9

)

(102

)
2)
68
Income (loss) on discontinued operations, net of tax
2

2

-
Net (income) loss attributable to non- controlling interests
(9

)

(9

)
Net income (loss) attributable to stockholders
(182

)

(73

)

(59

)

(9

)

(100

)

59
3)
Weighted average diluted shares outstanding (in thousands):
247,586

249,915
Diluted earnings (loss) per common share attributable to stockholders
(0.73

)

0.24

1) Cash income taxes paid during the period.
2) Includes: Foreign exchange loss on debt: $(65) million; Loss on extinguishment of long-term debt: $(7) million; Other financial expense: $(19) million; Results relating to equity-accounted investees: $(15) million; and difference between book and cash income taxes: $4 million.
3) Includes stock-based compensation expense of $9 million.

NXP Semiconductors
Financial Reconciliation - GAAP to non-GAAP (unaudited)

Q1 2011
Table 12
($ in millions)
GAAP
PPA effects
Restructuring
Other Incidental Other Adjustments Non-GAAP
Revenue 1,082 - - - - 1,082
Gross profit 506 (3 ) (6 ) (2 ) - 517
% of revenue 46.8 % 47.8 %
Research and development (154 ) - - - - (154 )
Selling, general and administrative (234 ) (70 ) (10 ) (6 ) - (148 )
Total operating expense (388 ) (70 ) (10 ) (6 ) - (302 )
Other income (expense) (10 ) - - (18 ) - 8
Operating income (loss) 108 (73 ) (16 ) (26 ) - 223
% of revenue 10.0 % 20.6 %
Interest income (expense) net (81 ) (81 )
Benefit (provision) for income taxes 1 (11 ) 1)
Income (loss) from continuing operations
188

(73

)

(16

)

(26

)

172

2)

131
Income (loss) on discontinued operations, net of tax
13

13

-
Net (income) loss attributable to non- controlling interests
(14

)

(14

)
Net income (loss) attributable to stockholders
187

(73

)

(16

)

(26

)

185

117
3)
Weighted average diluted shares outstanding (in thousands):
256,589

256,589
Diluted earnings (loss) per common share attributable to stockholders
0.73

0.46

1) Cash income taxes.
2) Includes: Foreign exchange gain on debt: $190 million; Other financial expense: $(8) million; Results relating to equity-accounted investees: $(22) million; and difference between book and cash income taxes: $12 million.
3) Includes stock based compensation expense of $6 million.

NXP Semiconductors
Adjusted EBITDA

Table 13
($ in millions)
Q1 2011

Q4 2011

Q1 2012
Net Income 201 (173 ) (11 )
Income (loss) on discontinued operations 13 2 1
Income (loss) on continuing operations 188 (175 ) (12 )
Reconciling items to EBITDA:
Financial (income) expense (101 ) 165 73
Benefit (provision) for income taxes (1 ) 2 (5 )
Depreciation 72 78 63
Amortization 73 73 71
EBITDA 231 143 190
Results of equity-accounted investees 22 15 (1 )
Restructuring1) 16 55 7
Other incidental items1) 26 8 9
Adjusted EBITDA 295 221 205
Trailing twelve month adjusted EBITDA 1,108 1,094 1,004
1) Excluding depreciation property, plant and equipment related to: - 4 1
Restructuring - 1 -
Other incidental items