SOURCE: NXP Semiconductors

NXP Semiconductors

February 15, 2011 07:29 ET

NXP Semiconductors Reports Fourth Quarter and Full Year 2010 Results

Product Revenue From Continuing Operations up 43% in 2010

EINDHOVEN, THE NETHERLANDS--(Marketwire - February 15, 2011) -


                                    Q4 2010       Year 2010
                                   ---------      ---------
      GAAP Gross margin                45.9%          41.4%
      GAAP Operating margin             9.8%           6.2%
      GAAP Loss per share            ($0.47)        ($1.99)

      Non-GAAP Gross margin            47.1%          42.6%
      Non-GAAP Operating margin        19.3%          15.6%
      Non-GAAP Earnings per share      $0.37          $1.28

      --  Trailing twelve month adjusted EBITDA $1,021 million
      --  Net debt reduced $604 million this year to $3,653 million
      --  $1 billion in maturities extended to 2018
      --  Announced sale of Sound Solutions business for $855 million
          in cash

In this release NXP presents financial performance on both a GAAP and non-GAAP basis (defined later in this release). A reconciliation of GAAP to non-GAAP numbers can be found later in this release.

NXP Semiconductors N.V. (NASDAQ: NXPI) today reported financial results for the fourth quarter 2010, ended December 31, 2010, and provided guidance for the first quarter 2011.

Note: As announced on December 22, 2010, NXP and Dover Corporation (NYSE: DOV) have reached a definitive agreement under which Dover's affiliate Knowles Electronics will purchase NXP's Sound Solutions business. As a result, comparative figures throughout this report have been restated to reflect Sound Solutions as a discontinued business. This business had previously been reported within the Standard Products segment.

"NXP had a very successful year in 2010, as we delivered full year Product Revenue growth of 43 percent, and exited the year with non-GAAP operating margin of over 19 percent in the fourth quarter, outpacing the growth of the broader semiconductor market as well as that of our immediate peers," said Richard Clemmer, NXP Chief Executive Officer. "We continue to execute on our strategy to invest in product differentiation within the High Performance Mixed Signal business and are delivering significant margin expansion through a combination of our redesign efforts as well as ongoing improvements in product mix, operational efficiency, and continued deliberate actions to improve our capital structure. The HPMS segment represented 77 percent of our Product Revenue in 2010.

"Within our HPMS segment full-year revenue grew 42 percent during 2010, while we expanded the segment operating margin by over 15 percentage points, resulting in full-year non-GAAP operating margin of 21 percent in this segment. We experienced robust growth across all of our focused end markets in HPMS, with particular strength in our Automotive, Identification and Wireless Infrastructure, Lighting and Industrial segments, which grew in aggregate at better than 50 percent on a year-on-year basis. We were able to achieve this success even as we experienced headwinds in the computing and television end-markets late in the year, a validation of the importance of successfully servicing a broad range of diverse end-market segments.

"We continue to make significant progress improving our capital structure. Our fourth quarter annualized adjusted EBITDA was $1.2 billion, lowering our implied net debt-to-adjusted EBITDA ratio to approximately 3 times. Additionally, during the fourth quarter, we announced the divesture of our Sound Solutions business. The divesture will enable continued improvement in our capital structure by providing additional capital to reduce our indebtedness and further demonstrates our focus on the HPMS market, which we believe will lead to increased long-term shareholder value," Clemmer said.

Fourth Quarter 2010 GAAP Results

Revenue from continuing operations was $1,078 million, an increase of 1.0 percent from the $1,067 million reported in fourth quarter of 2009 and a decrease of 3.8 percent from the $1,120 million reported in the third quarter of 2010. Revenue in our Manufacturing Operations and Corporate and Other segments declined $44 million sequentially due to lower revenue in our breakeven manufacturing services business and the previously disclosed sale of our Nutune business. Fourth quarter of 2009 revenue included $130 million related to our divested Home segment. Ongoing support for this divested business is now included in our Manufacturing Operations segment. All current and all prior periods have been restated to reflect the divesture of the Sound Solutions business.

Gross profit from continuing operations for the fourth quarter of 2010 was $495 million, or 45.9 percent of revenue. This compares to $370 million, or 34.7 percent of revenue reported in the fourth quarter of 2009 and $476 million, or 42.5 percent of revenue reported in the third quarter of 2010.

Operating income from continuing operations for the fourth quarter of 2010 was $106 million, or 9.8 percent of revenue. This compares to a loss of $216 million reported in the fourth quarter of 2009, or 20.2 percent of revenue, and an operating income of $106 million, or 9.5 percent of revenue as reported in the third quarter of 2010.

Net income for the fourth quarter of 2010 was a loss of $118 million, or a loss of $0.47 per share. This compares to a net loss of $368 million, or a loss of $1.71 per share reported in the fourth quarter of 2009, and net income of $369 million or $1.55 per share (diluted) reported in the third quarter of 2010.

Fourth Quarter 2010 non-GAAP Results

Revenue from continuing operations was $1,078 million, an increase of 1.0 percent from the $1,067 million reported in fourth quarter of 2009 and a decrease of 3.8 percent from the $1,120 million reported in the third quarter of 2010. Product Revenue from continuing operations was $938 million in the fourth quarter of 2010 compared to $820 million in the fourth quarter of 2009 and $936 million in the third quarter of 2010. Current and prior period Product Revenue has been restated to reflect the divesture of the Sound Solutions business in the amounts of $99 million for the fourth quarter of 2010, $94 million for the fourth quarter of 2009 and $93 million for the third quarter of 2010. Product Revenue from continuing operations is the combination of revenue from High Performance Mixed Signal (HPMS) and Standard Products segments.

Non-GAAP gross profit from continuing operations was $508 million, or 47.1 percent of revenue. This compares to $413 million, or 38.7 percent of revenue reported in the fourth quarter of 2009 and $488 million, or 43.6 percent of revenue reported in the third quarter of 2010.

Non-GAAP operating income from continuing operations was $208 million, or 19.3 percent of revenue. This compares to non-GAAP operating income of $59 million, or 5.5 percent of revenue, reported in the fourth quarter of 2009 and non-GAAP operating income of $185 million, or 16.5 percent of revenue reported in the third quarter of 2010.

Non-GAAP net income for the fourth quarter of 2010 was $95 million, or a $0.37 per share (diluted). This compares to a loss of $54 million, or a loss of $0.25 per share reported in the fourth quarter of 2009, and a profit of $94 million or $0.39 per share (diluted) reported in the third quarter of 2010.

2010 Full-Year GAAP Results

Revenue from continuing operations was $4,402 million, an increase of 25.1 percent from the $3,519 million reported for the full year of 2009.

Gross profit from continuing operations was $1,823 million, or 41.4 percent of revenue. This compares to $898 million, or 25.5 percent of revenue reported in 2009.

Operating income from continuing operations was $273 million, or 6.2 percent of revenue. This compares to a loss of $931 million a year ago, or 26.5 percent of revenue reported in 2009.

Net income was a loss of $456 million or a loss of $1.99 per share, as compared to a loss of $167 million or a loss of $0.78 per share reported in 2009.

2010 Full-Year non-GAAP Results

Revenue from continuing operations was $4,402 million, an increase of 25.1 percent from the $3,519 million reported for the full year of 2009.

Product Revenue from continuing operations was $3,694 million compared to $2,578 million reported in 2009. Current and prior period Product Revenue has been restated to reflect the divesture of the Sound Solutions business in the amounts of $354 million for 2010 and $324 million for 2009. Product Revenue from continuing operations is the combination of revenue from HPMS and Standard Products segments.

Non-GAAP gross profit from continuing operations was $1,875 million, or 42.6 percent of revenue. This compares to $1,125 million, or 32.0 percent of revenue reported in 2009.

Non-GAAP operating income from continuing operations was $685 million, or 15.6 percent of revenue. This compares to a loss of $147 million, or 4.2 percent of revenue reported in 2009.

Non-GAAP net income was $298 million or $1.28 per share (diluted), as compared to a loss of $570 million or a loss of $2.65 per share reported in 2009.

Additional Information

--  Utilization in our wafer fabs averaged 97 percent in the fourth quarter
    2010 compared to 76 percent a year ago and 99 percent in the prior
    quarter. Capacity expansion plans began in the fourth quarter of 2010
    and will continue throughout 2011. The largest investments are in our
    SSMC wafer fab in Singapore which primarily supports the high growth
    areas of our HPMS business.
--  Cash balance at the end of the year was $898 million.
--  For the full year 2010, NXP generated $359 million of operating cash
    flow from continuing operations, net of $223 million in payments
    related to the Redesign Program, the Company's ongoing restructuring
    program, which began in September 2008.  During 2010 net purchases of
    property, plant and equipment were $227 million.
--  Cash paid out for the Redesign Program was $42 million in the fourth
    quarter, bringing the cumulative total since the beginning of the
    program to $656 million. We continue to estimate that total program
    costs through its expected completion at the end of 2011 will be no
    greater than $725 million.
--  SSMC, our consolidated joint-venture wafer fab with TSMC, reported
    fourth quarter operating income of $40 million, EBITDA of $50 million
    and had an ending cash balance of $338 million.
--  Stock-based compensation was a $9 million benefit in the fourth quarter
    of 2010, as a result of an adjustment of estimated forfeitures to
    actual forfeitures, and a $12 million expense for full year 2010. None
    of the fourth quarter benefit is included in the non-GAAP results.
--  NXP announced during the fourth quarter of 2010 the signing of a
    definitive agreement whereby Knowles Electronics will purchase NXP's
    Sound Solutions business for $855 million in cash.
--  NXP completed its initial public offering (IPO) of 34 million shares on
    the NASDAQ Global Select Market during the third quarter of 2010.
--  NXP completed a bond transaction during the year to extend the
    maturities of approximately $1 billion of debt to 2018.
--  Proceeds from the IPO and the bond transaction, plus cash generated
    from operations, were used to repurchase $461 million of outstanding
    debt from a limited number of holders in privately negotiated
    transactions and to repay $200 million on our revolving credit
    facility.

First Quarter 2011 Outlook

--  Product Revenue from continuing operations for the first quarter of
    2011 is anticipated to be relatively flat as compared to the fourth
    quarter of 2010. Product Revenue from continuing operations is the
    combination of revenue from HPMS and Standard Products segments.

--  Revenue in our Manufacturing Operations and Corporate and Other
    segments is anticipated to decline about $50 million in the first
    quarter due to lower revenue in our breakeven manufacturing services
    business and, to a lesser degree, the sale of our Nutune business in
    the fourth quarter.

--  Non-GAAP operating income from continuing operations is anticipated
    to be flat to slightly up compared to the fourth quarter of 2010.

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 measure 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 "comparable growth", "non-GAAP gross margin", "non-GAAP operating margin", "EBITDA" and "Adjusted EBITDA", has not been derived in accordance with GAAP and can vary from other participants in our 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:

--  "Comparable growth" is a non-GAAP financial measure that reflects the
    relative changes in revenue growth between periods adjusted for the
    effects of foreign currency exchange rate changes, material
    acquisitions and divestments. NXP revenue is translated from foreign
    currencies into our reporting currency, the U.S. dollar, at monthly
    exchange rates and is impacted by significant foreign currency movement
    on a period to period basis. In addition, reported revenue may be
    impacted by material acquisitions and divestments. NXP believe that an
    understanding of our underlying sales performance on a comparable basis
    year over year is enhanced after these effects are excluded.

--  "Non-GAAP gross profit," "non-GAAP gross margin," "non-GAAP operating
    margin," "non-GAAP operating income" and "non-GAAP net income" are all
    non-GAAP financial measures 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" and "Adjusted EBITDA" are not intended to be a measure of free
    cash flow for management's discretionary use, as it does 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.

--  "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), gains and losses
    resulting from our divestment activities.  We present other incidental
    items in our analysis of our results of operations because these costs,
    gains and losses, have affected the comparability of our results over
    the years.

Conference Call and Webcast Information

NXP will host a conference call to discuss its fourth quarter 2010 results and outlook for the first quarter of 2011 today at 8:00 a.m. U.S. Eastern Time (2:00 p.m. Central European Time). 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 $4.4 billion in 2010. For more information visit www.nxp.com.

Forward-looking Statements

This document includes forward-looking statements which include statements regarding our 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, our ability to successfully introduce new technologies and products, the demand for the goods into which our products are incorporated, our ability to generate sufficient cash, raise sufficient capital or refinance our debt at or before maturity to meet both our debt service and research and development and capital investment requirements, our ability to accurately estimate demand and match our production capacity accordingly or obtain supplies from third-party producers, our access to production from third-party outsourcing partners, and any events that might affect their business or our relationship with them, our ability to secure adequate and timely supply of equipment and materials from suppliers, our ability to avoid operational problems and product defects and, if such issues were to arise, to correct them quickly, our ability to form strategic partnerships and joint ventures and successfully cooperate with our alliance partners, our ability to win competitive bid selection processes to develop products for use in our customers' equipment and products, our ability to successfully establish a brand identity, our ability to successfully hire and retain key management and senior product architects, and, our ability to maintain good relationships with our suppliers. In addition, this document contains information concerning the semiconductor industry and our 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, our market segments and product areas will develop. We have based these assumptions on information currently available to us. If any one or more of these assumptions turn out to be incorrect, actual market results may differ from those predicted. While we do not know what impact any such differences may have on our business, if there are such differences, our future results of operations and our 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, we do 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           For the three months      For the twelve
 share data)                             ended              months ended
                               -------------------------  ----------------
                               Q4 2009  Q3 2010  Q4 2010    2009     2010
                               -------  -------  -------  -------  -------

Revenue                          1,067    1,120    1,078    3,519    4,402
Cost of revenue                   (697)    (644)    (583)  (2,621)  (2,579)
                               -------  -------  -------  -------  -------

Gross profit                       370      476      495      898    1,823

Research and development
 expenses                         (227)    (146)    (138)    (764)    (568)
Selling expenses                   (73)     (63)     (73)    (271)    (265)
General and administrative
 expenses                         (296)    (162)    (178)    (781)    (701)
                               -------  -------  -------  -------  -------
Total operating expenses          (596)    (371)    (389)  (1,816)  (1,534)

Other income (expense)              10        1        -      (13)     (16)
                               -------  -------  -------  -------  -------

Operating income (loss)           (216)     106      106     (931)     273

Financial income (expense):
  Interest income (expense),
   net                             (83)     (80)     (80)    (359)    (318)
  Foreign exchange gain
   (loss)                          (74)     323     (102)      39     (331)
  Gain on extinguishment of
   long term debt                    -       55        -    1,020       57
  Other financial expense           (4)     (19)     (10)     (18)     (36)
                               -------  -------  -------  -------  -------

Income (loss) before income
 taxes                            (377)     385      (86)    (249)    (355)

Provision for income taxes          12      (27)       5      (10)     (24)
                               -------  -------  -------  -------  -------

Income (loss) after income
 taxes                            (365)     358      (81)    (259)    (379)

Results relating to
 equity-accounted investees         (1)      (5)     (26)      74      (86)
                               -------  -------  -------  -------  -------


Income (loss) from continuing
 operations                       (366)     353     (107)    (185)    (465)
Income (loss) on discontinued
 operations, net of tax              7       23       11       32       59
                               -------  -------  -------  -------  -------
Net income (loss)                 (359)     376      (96)    (153)    (406)

Net income (loss) attributable     
 to non-controlling interests       (9)      (7)     (22)     (14)     (50)
                               -------  -------  -------  -------  -------
Net income (loss) attributable
 to stockholders                  (368)     369     (118)    (167)    (456)

Earnings per share data: (1)
Net income (loss) attributable
 to stockholders per common
 share in $:
Basic earnings per common
 share in $
Income (loss) from continuing
 operations                      (1.74)    1.46    (0.51)   (0.93)   (2.25)
Income (loss) from
 discontinued operations          0.03     0.10     0.04     0.15     0.26
Net income (loss)                (1.71)    1.56    (0.47)   (0.78)   (1.99)
Diluted earnings per common
 share in $
Income (loss) from continuing
 operations                      (1.74)    1.45    (0.51)   (0.93)   (2.25)
Income (loss) from
 discontinued operations          0.03     0.10     0.04     0.15     0.26
Net income (loss)                (1.71)    1.55    (0.47)   (0.78)   (1.99)

Weighted average number of
 shares of common stock used
 in computing per share
 amounts (in thousands):
 Basic                         215,252  237,295  250,246  215,252  229,280
 Diluted                       215,252  238,735  250,246  215,252  229,280
                               -------  -------  -------  -------  -------

(1) As adjusted for the impact of the 1:20 reverse stock split.





NXP Semiconductors
Condensed consolidated balance sheets (unaudited)
Table 2
--------------------------------------------------------------------------
($ in millions)                                   Dec 31,  Oct 3,   Dec 31,
                                                   2009     2010     2010
                                                  -------  -------  -------
Assets
Current assets:
Cash and cash equivalents                           1,026      947      898
Receivables:
  Accounts receivable - net                           393      449      396
  Other receivables                                    55       48       42
                                                  -------  -------  -------
Total receivables                                     448      497      438
Assets held for sale                                  144       47       48
Current assets of discontinued operations             103      109      110
Inventories                                           522      486      513
Other current assets                                  270      137      129
                                                  -------  -------  -------
Total current assets                                2,513    2,223    2,136

Non-current assets:
Investments in equity-accounted investees              43      159      132
Other non-current financial assets                     35       20       19
Non-current assets of discontinued operations         297      275      266
Other non-current assets                               85      140      135
Property, plant and equipment                       1,328    1,175    1,164
Intangible assets excluding goodwill                1,886    1,585    1,486
Goodwill                                            2,392    2,334    2,299
                                                  -------  -------  -------
Total non-current assets                            6,066    5,688    5,501

Total assets                                        8,579    7,911    7,637

Liabilities and equity
Current liabilities:
Accounts payable                                      556      589      593
Liabilities held for sale                               2       29       21
Current liabilities of discontinued operations         64       67       60
Accrued liabilities                                   666      524      461
Short-term provisions                                 268      132       95
Other current liabilities                              87       47       95
Short-term debt                                       610      509      423
                                                  -------  -------  -------
Total current liabilities                           2,253    1,897    1,748

Non-current liabilities:
Long-term debt                                      4,673    4,140    4,128
Long-term provisions                                  423      432      415
Non-current liabilities of discontinued
 operations                                            30       26       20
Other non-current liabilities                         159      111      107
                                                  -------  -------  -------
Total non-current liabilities                       5,285    4,709    4,670

Non-controlling interests                             198      226      233
Stockholder's equity                                  843    1,079      986
                                                  -------  -------  -------
Total equity                                        1,041    1,305    1,219

Total liabilities and equity                        8,579    7,911    7,637
                                                  -------  -------  -------





NXP Semiconductors --
Condensed consolidated statements of cash flows (unaudited)
Table 3
--------------------------------------------------------------------------
($ in millions)                  For the three months      For the twelve
                                         ended              months ended
                               -------------------------  ----------------
                               Q4 2009  Q3 2010  Q4 2010    2009     2010
                               -------  -------  -------  -------  -------
Cash Flows from operating
 activities
Net income (loss)                 (359)     376      (96)    (153)    (406)

(Income) loss from
 discontinued operations, net
 of tax                             (7)     (23)     (11)     (32)     (59)
Adjustments to reconcile net
 income (loss) to net cash
 provided (used for):
Depreciation and amortization      188      155      184      818      684
Impairment assets held for
 sale                               69        -        -       69        -
Net (gain) loss on sale of
 assets                             (8)      (7)       2      (58)      21
Gain on extinguishment of debt       -      (55)       -   (1,045)     (57)
Results relating to equity
 accounted investees                 -        6       26        -       86
Dividends paid to
 non-controlling interests           -       (1)      (1)     (29)      (2)

Changes in operating assets
 and Liabilities:
(Increase) decrease in trade
 receivables                        34       49       33       32      (46)
(Increase) decrease in
 inventories                        12      (26)     (38)      31        8
Increase (decrease) in trade
 payables                           78      (20)      19      (41)      60

(Increase) decrease in other
 receivables                       (57)      64       20      (29)      79
Increase (decrease) in other
 payables                          (34)     (20)     (26)    (153)    (177)
Increase (decrease) in
 provisions                         10      (29)     (24)    (136)    (128)
Changes in deferred taxes           (4)      53      (46)      (6)     (73)

Exchange differences                86     (382)     113      (39)     353
Other items                         20       11       (5)      41       16
                               -------  -------  -------  -------  -------

Net cash provided by (used
 for) operating activities          28      151      150     (730)     359

Cash flows from investing
 activities:
Purchase of intangible assets       (2)      (2)      (3)      (8)      (7)
Capital expenditures on
 property, plant and equipment     (39)     (61)     (77)     (92)    (258)
Proceeds from disposals of
 property, plant and equipment       8        2        1       21       31
Proceeds from disposals of
 assets held for sale                -        -        8        -        8
Proceeds from the sale of
 securities                          -        -        -       20        -
Purchase of other non-current
 financial assets                   (2)      (1)      (1)      (2)      (2)
Proceeds from the sale of
 other non-current financial
 assets                              1       27        -        1       27
Purchase of interests in
 businesses                          -       (8)       -        -       (8)
Proceeds from (cash payments
 related to) sale of interests
 in businesses                      15        -      (13)     123      (60)
                               -------  -------  -------  -------  -------
Net cash (used for) provided
 by investing activities           (19)     (43)     (85)      63     (269)

Cash flows from financing
 activities:
Net (repayments) borrowings of
 short-term debt                     -        -        9        7        8
Amounts drawn under the
 revolving credit facility           -        -        -      400        -
Repayments under the revolving
 credit facility                     -     (100)    (100)    (200)    (200)
Repurchase of long-term debt         -   (1,370)       -     (286)  (1,383)
Net proceeds from the issuance
 of long-term debt                   -      974        -        -      974
Principal payments on
 long-term debt                      -       (1)      (1)      (1)      (2)
Net proceeds from the issuance
 of common stock                     -      450       (2)       -      448
                               -------  -------  -------  -------  -------

Net cash provided by (used
 for) financing activities           -      (47)     (94)     (80)    (155)

Net cash provided by (used
 for) continuing operations          9       61      (29)    (747)     (65)
Cash flows from discontinued
 operations:
Net cash provided by (used
 for) operating activities          (5)       7       (5)     (15)      10
Net cash provided by (used
 for) investing activities          (1)      (8)      (2)      15      (17)
Net cash provided by (used
 for) financing activities           -        -        2        -        2
                               -------  -------  -------  -------  -------
Net cash provided by (used
 for) discontinued operations       (6)      (1)      (5)       -       (5)
Net cash provided by (used
 for) continuing and
 discontinued operations             3       60      (34)    (747)     (70)

Effect of changes in exchange
 rates on cash positions           (23)      60      (20)      (8)     (63)

Increase (decrease) in cash
 and cash equivalents              (20)     120      (54)    (755)    (133)
Cash and cash equivalents at
 beginning of period             1,061      842      962    1,796    1,041
Cash and cash equivalents at
 end of period                   1,041      962      908    1,041      908
Less: cash and cash
 equivalents at end of period --
 discontinued operations            15       15       10       15       10
                               -------  -------  -------  -------  -------
Cash and cash equivalents at
 end of period -- continuing
 operations                      1,026      947      898    1,026      898
                               -------  -------  -------  -------  -------

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.





Financial Reconciliation -- GAAP to non-GAAP (unaudited)
NXP Semiconductors
Q4 2010
Table 4
-----------------------------------------------------------------------
($ in millions,                                        Other
 unless otherwise                                     Non-cash
 stated)                   PPA    Restru-    Other     Adjust-
                  GAAP   effects  cturing  Incidental   ments  Non-GAAP
                -------  -------  -------  ----------  ------  --------

Revenue           1,078        -        -           -       -     1,078

Gross profit        495       (3)      (7)         (3)      -       508
  % of revenue     45.9%                                           47.1%

Research and
 development       (138)       -       (1)          1       -      (138)
Selling             (73)       -        -           -       -       (73)
General and
 administrative    (178)     (66)     (12)         (9)      -       (91)
                -------  -------  -------  ----------  ------  --------
Total operating
 expense           (389)     (66)     (13)         (8)      -      (302)

Other income
 (expense)            -        -        5          (7)      -         2
                -------  -------  -------  ----------  ------  --------

Operating income
 (loss)             106      (69)     (15)        (18)      -       208
  % of revenue      9.8%                                           19.3%

Interest income
 (expense) net      (80)                                            (80)

Provisions for
 income taxes         5                                             (11)(1)

Income (loss)
 from continuing
 operations        (107)     (69)     (15)        (18)   (122)(2)   117

Income (loss) on
 discontinued
 operations,
 net of tax          11                                    11         -

Net income (loss)
 attributable to
 non-controlling
 interests          (22)                                            (22)
                -------                                        --------

Net income (loss)
 attributable to
 stockholders      (118)     (69)     (15)        (18)   (111)       95(3)

Weighted average
 diluted shares
 outstanding
 (in
 thousands):    250,246                                         253,761

Diluted earnings
 (loss)
 attributable
 to stockholders
 per common
 share in $       (0.47)                                           0.37
                -------  -------  -------  ----------  ------  --------

(1) Cash income taxes.
(2) Includes: Foreign exchange loss on debt: $(102) million; Other
    financial expense: $(10) million; Results relating to equity-accounted
    investees: $(26) million; and difference between book and cash income
    taxes: $16 million.
(3) Stock based compensation benefit of $9 million, which resulted from an
    adjustment of estimated forfeitures to actual forfeitures, is not
    included in the non-GAAP results.





Financial Reconciliation -- GAAP to non-GAAP (unaudited)
NXP Semiconductors
Q3 2010
Table 5
-----------------------------------------------------------------------
($ in millions,                                        Other
 unless otherwise                                     Non-cash
 stated)                   PPA    Restru-    Other     Adjust-
                  GAAP   effects  cturing  Incidental   ments  Non-GAAP
                -------  -------  -------  ----------  ------  --------

Revenue           1,120        -        -           -       -     1,120

Gross profit        476       (3)      (7)         (2)      -       488
  % of revenue     42.5%                                           43.6%

Research and
 development       (146)       -        7          (1)      -      (152)
Selling             (63)       -        -           -       -       (63)
General and
 administrative    (162)     (66)      (1)        (11)      -       (84)
                -------  -------  -------  ----------  ------  --------
Total operating
 expense           (371)     (66)       6         (12)      -      (299)

Other income
 (expense)            1        -        -           5       -        (4)
                -------  -------  -------  ----------  ------  --------

Operating income
 (loss)             106      (69)      (1)         (9)      -       185
  % of revenue      9.5%                                           16.5%

Interest income
 (expense) net      (80)                                            (80)

Provisions for
 income taxes       (27)                                             (4)(1)

Income (loss)
 from continuing
 operations         353      (69)      (1)         (9)    331(2)      101

Income (loss) on
 discontinued
 operations,
 net of tax          23                                    23         -

Net income (loss)
 attributable to
 non-controlling
 interests           (7)                                             (7)
                -------                                        --------

Net income (loss)
 attributable to
 stockholders       369     (69)       (1)         (9)    354        94(3)

Weighted average
 diluted shares
 outstanding
 (in
 thousands):    238,735                                         238,735

Diluted earnings
 (loss)
 attributable
 to stockholders
 per common
 share in $        1.55                                            0.39
                -------  -------  -------  ----------  ------  --------

(1) Cash income taxes.
(2) Includes: Foreign exchange gain on debt: $323 million; Gain on
    extinguishment of long term debt: $55 million; Other financial expense:
    $(19) million; Results relating to equity-accounted investees:
    $(5) million; and difference between book and cash income taxes:
    $(23) million.
(3) Includes stock based compensation expense $7 million.





Financial Reconciliation -- GAAP to non-GAAP (unaudited)
NXP Semiconductors
Q4 2009
Table 6
-----------------------------------------------------------------------
($ in millions,                                        Other Non-
 unless otherwise                       Other   Impair-  cash
 stated)                  PPA   Restru-  Inci-   ment   Adjust-   Non-
                  GAAP  effects cturing dental  charges  ments    GAAP
                ------- ------- ------- ------- ------- ------  -------

Revenue           1,067       -       -       -       -      -    1,067

Gross profit        370      (8)     12     (47)      -      -      413
  % of revenue     34.7%                                           38.7%

Research and
 development       (227)      -     (41)     (4)      -      -     (182)
Selling             (73)      -      (9)      -       -      -      (64)
General and
 administrative    (296)    (73)     (7)    (35)    (69)     -     (112)
                ------- ------- ------- ------- ------- ------  -------
Total operating
 expense           (596)    (73)    (57)    (39)    (69)     -     (358)

Other income
 (expense)           10       -       1       5       -      -        4
                ------- ------- ------- ------- ------- ------  -------

Operating income
 (loss)            (216)    (81)    (44)    (81)    (69)     -       59
  % of revenue    (20.2)%                                           5.5%

Interest income
 (expense) net      (83)                                            (83)

Provisions for
 income taxes        12                                             (21)(1)

Income (loss)
 from continuing
 operations        (366)    (81)    (44)    (81)    (69)   (46)(2)  (45)

Income (loss) on
 discontinued
 operations,
 net of tax           7                                      7        -

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

Net income (loss)
 attributable to
 stockholders      (368)    (81)    (44)    (81)    (69)   (39)     (54)(3)

Weighted average
 diluted shares
 outstanding
 (in
 thousands):    215,252                                         215,252

Diluted earnings
 (loss)
 attributable
 to stockholders
 per common
 share in $       (1.71)                                          (0.25)
                ------- ------- ------- ------- ------- ------  -------

(1) Cash income taxes.
(2) Includes: Foreign exchange loss on debt: $(74) million; Other financial
    expense: $(4) million; Results relating to equity-accounted investees:
    $(1) million; and difference between book and cash income taxes:
    $33 million.
(3) Includes stock based compensation expense $8 million.





Financial Reconciliation -- GAAP to non-GAAP (unaudited)
NXP Semiconductors
Full year 2010
Table 7
-----------------------------------------------------------------------
($ in millions,                                        Other
 unless otherwise                                     Non-cash
 stated)                   PPA    Restru-    Other     Adjust-
                  GAAP   effects  cturing  Incidental   ments  Non-GAAP
                -------  -------  -------  ----------  ------  --------

Revenue           4,402        -        -           -       -     4,402

Gross profit      1,823      (21)     (12)        (19)      -     1,875
  % of revenue     41.4%                                           42.6%

Research and
 development       (568)       -        7          (1)      -      (574)
Selling            (265)       -        2           -       -      (267)
General and
 administrative    (701)    (281)     (22)        (46)      -      (352)
                -------  -------  -------  ----------  ------  --------
Total operating
 expense         (1,534)    (281)     (13)        (47)      -    (1,193)

Other income
 (expense)          (16)       -        5         (24)      -         3
                -------  -------  -------  ----------  ------  --------

Operating income
 (loss)             273     (302)     (20)        (90)      -       685
  % of revenue      6.2%                                           15.6%

Interest income
 (expense) net     (318)                                           (318)

Provisions for
 income taxes       (24)                                            (19)(1)

Income (loss)
 from continuing
 operations        (465)    (302)     (20)        (90)   (401)(2)   348

Income (loss) on
 discontinued
 operations,
 net of tax          59                                    59         -

Net income (loss)
 attributable to
 non-controlling
 interests          (50)                                            (50)
                -------                                        --------

Net income (loss)
 attributable to
 stockholders      (456)    (302)     (20)        (90)   (342)    298(3)

Weighted average
 diluted shares
 outstanding
 (in
 thousands):    229,280                                         232,795

Diluted earnings
 (loss)
 attributable
 to stockholders
 per common
 share in $       (1.99)                                           1.28
                -------  -------  -------  ----------  ------  --------

(1) Cash income taxes.
(2) Includes: Foreign exchange loss on debt: $(331) million; Gain on
    extinguishment of long term debt: $57 million; Other financial
    expense: $(36) million; Results relating to equity-accounted investees:
    $(86) million; and difference between book and cash income taxes:
    $(5) million.
(3) Includes stock based compensation expense $21 million.





Financial Reconciliation -- GAAP to non-GAAP (unaudited)
NXP Semiconductors
Full year 2009
Table 8
--------------------------------------------------------------------------
($ in millions,                                        Other Non-
 unless otherwise                       Other   Impair-  cash
 stated)                  PPA   Restru-  Inci-   ment   Adjust-   Non-
                  GAAP  effects cturing dental  charges  ments    GAAP
                ------- ------- ------- ------- ------- ------  -------

Revenue           3,519       -       -       -       -      -    3,519

Gross profit        898     (69)      5    (163)      -      -    1,125
  % of revenue     25.5%                                           32.0%

Research and
 development       (764)      -     (61)     (8)      -      -     (695)
Selling            (271)      -     (11)      2       -      -     (262)
General and
 administrative    (781)   (302)    (36)    (52)    (69)     -     (322)
                ------- ------- ------- ------- ------- ------  -------
Total operating
 expense         (1,816)   (302)   (108)    (58)    (69)     -   (1,279)

Other income
 (expense)          (13)      -       -     (20)      -      -        7
                ------- ------- ------- ------- ------- ------  -------

Operating income
 (loss)            (931)   (371)   (103)   (241)    (69)     -     (147)
  % of revenue    (26.5)%                                          (4.2)%

Interest income
 (expense) net     (359)                                           (359)

Provisions for
 income taxes       (10)                                            (50)(1)

Income (loss)
 from continuing
 operations        (185)   (371)   (103)   (241)    (69) 1,155(2)  (556)

Income (loss) on
 discontinued
 operations,
 net of tax          32                                     32        -

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

Net income (loss)
 attributable to
 stockholders      (167)   (371)   (103)   (241)    (69) 1,187     (570)(3)

Weighted average
 diluted shares
 outstanding
 (in
 thousands):    215,252                                         215,252

Diluted earnings
 (loss)
 attributable
 to stockholders
 per common
 share in $       (0.78)                                          (2.65)
                ------- ------- ------- ------- ------- ------  -------

(1) Cash income taxes.
(2) Includes: Foreign exchange gain on debt: $39 million; Gain on
    extinguishment of long term debt: $1,020 million; Other financial
    expense: $(18) million; Results relating to equity-accounted investees:
    $74 million; and difference between book and cash income taxes:
    $40 million.
(3) Includes stock based compensation expense $28 million.


Segment Results



Segment Revenue
Table 9
--------------------------------------------------------------------------
($ in millions)                Q4 2009  Q3 2010  Q4 2010   2009     2010
                               -------  -------  -------  -------  -------

High Performance Mixed Signal      637      715      717    2,011    2,846
Standard Products                  183      221      221      567      848
                               -------  -------  -------  -------  -------
  Product Revenue                  820      936      938    2,578    3,694

Manufacturing Operations            77      148      114      324      525
Corporate and Other                 40       36       26      165      136
Divested Home Activities           130        -        -      452       47
                               -------  -------  -------  -------  -------
  Total NXP revenue              1,067    1,120    1,078    3,519    4,402
                               -------  -------  -------  -------  -------





High Performance Mixed Signal Segment Results
Table 10
--------------------------------------------------------------------------
($ in millions, unless
 otherwise stated)             Q4 2009  Q3 2010  Q4 2010    2009     2010
                               -------  -------  -------  -------  -------

Revenue                            637      715      717    2,011    2,846
  % of Product Revenue            77.7%    76.4%    76.4%    78.0%    77.0%

GAAP gross profit                  271      403      413      785    1,525
  % of revenue                    42.5%    56.4%    57.6%    39.0%    53.6%
Non-GAAP gross profit              307      404      413      848    1,535
  % of revenue                    48.2%    56.5%    57.6%    42.2%    53.9%

Operating income (loss)            (21)     120      119     (187)     387
  % of revenue                    (3.3)%   16.8%    16.6%    (9.3)%   13.6%
Non-GAAP operating income           91      165      168      115      597
  % of revenue                    14.3%    23.1%    23.4%     5.7%    21.0%
                               -------  -------  -------  -------  -------





Standard Products Segment Results
Table 11
--------------------------------------------------------------------------
($ in millions, unless
 otherwise stated)             Q4 2009  Q3 2010  Q4 2010    2009     2010
                               -------  -------  -------  -------  -------

Revenue                            183      221      221     567       848
  % of Product Revenue            22.3%    23.6%    23.6%   22.0 %    23.0%

GAAP gross profit                   39       78       84      74       280
  % of revenue                    21.3%    35.3%    38.0%   13.1 %    33.0%
Non-GAAP gross profit               44       79       85      88       282
  % of revenue                    24.0%    35.7%    38.5%   15.5 %    33.3%

Operating income (loss)            (17)      31       39    (120)       91
  % of revenue                    (9.3)%   14.0%    17.6%  (21.2)%    10.7%
Non-GAAP operating income
 (loss)                              2       44       52     (44)      147
  % of revenue                     1.1%    19.9%    23.5%   (7.8)%    17.3%
                               -------  -------  -------  -------  -------


Segments Reconciliation



Table 12
Q4 2010
--------------------------------------------------------------------------
                               PPA                      Other
($ in millions)        GAAP  effects  Restructuring  Incidentals  Non-GAAP
                       ----  -------  -------------  -----------  --------

Gross profit
  HPMS                  413       (1)             2           (1)      413
  Standard Products      84        -             (1)           -        85
  Manufacturing
   Operations           (11)      (2)            (9)          (2)        2
  Corporate and Other     9        -              1            -         8
  Divested Home
   Activities             -        -              -            -         -
                       ----  -------  -------------  -----------  --------
Total NXP               495       (3)            (7)          (3)      508

Operating income
 (loss)
  HPMS                  119      (53)             4            -       168
  Standard Products      39      (12)            (1)           -        52
  Manufacturing
   Operations           (20)      (5)           (10)          (3)       (2)
  Corporate and Other   (32)       1             (8)         (15)      (10)
  Divested Home
   Activities             -        -              -            -         -
                       ----  -------  -------------  -----------  --------
Total NXP               106      (69)           (15)         (18)      208
                       ----  -------  -------------  -----------  --------





Q3 2010
Table 13
--------------------------------------------------------------------------
                               PPA                      Other
($ in millions)        GAAP  effects  Restructuring  Incidentals  Non-GAAP
                       ----  -------  -------------  -----------  --------

Gross profit
  HPMS                  403       (1)             -            -       404
  Standard Products      78        -             (1)           -        79
  Manufacturing
   Operations             2       (2)            (6)          (2)       12
  Corporate and Other    (7)       -              -            -        (7)
  Divested Home
   Activities             -        -              -            -         -
                       ----  -------  -------------  -----------  --------
Total NXP               476       (3)            (7)          (2)      488

Operating income
 (loss)
  HPMS                  120      (48)             5           (2)      165
  Standard Products      31      (12)            (1)           -        44
  Manufacturing
   Operations            (8)      (7)            (6)          (2)        7
  Corporate and Other   (37)      (2)             1           (5)      (31)
  Divested Home
   Activities             -        -              -            -         -
                       ----  -------  -------------  -----------  --------
Total NXP               106      (69)            (1)          (9)      185
                       ----  -------  -------------  -----------  --------





Q4 2009
Table 14
--------------------------------------------------------------------------
($ in millions)        PPA                    Other
                GAAP effects Restructuring Incidentals Impairment Non-GAAP
                ---- ------- ------------- ----------- ---------- --------

Gross profit
  HPMS           271       1           (27)        (10)         -      307
  Standard
   Products       39       1            (6)          -          -       44
  Manufacturing
   Operations     30      (8)           37         (19)         -       20
  Corporate
   and Other     (15)     (2)            8         (18)         -       (3)
  Divested
   Home
   Activities     45       -             -           -          -       45
                ---- ------- ------------- ----------- ---------- --------
Total NXP        370      (8)           12         (47)         -      413

Operating
 income (loss)
  HPMS           (21)    (54)          (43)        (15)         -       91
  Standard
   Products      (17)    (13)           (6)          -          -        2
  Manufacturing
   Operations     13     (12)           37         (22)         -       10
  Corporate
   and Other     (79)      -           (20)        (49)         -      (10)
  Divested
   Home
   Activities   (112)     (2)          (12)          5        (69)     (34)
                ---- ------- ------------- ----------- ---------- --------
Total NXP       (216)    (81)          (44)        (81)       (69)      59
                ---- ------- ------------- ----------- ---------- --------





2010
Table 15
--------------------------------------------------------------------------
                               PPA                      Other
($ in millions)        GAAP  effects  Restructuring  Incidentals  Non-GAAP
                      -----  -------  -------------  -----------  --------

Gross profit
  HPMS                1,525      (13)             5           (2)    1,535
  Standard Products     280        -             (1)          (1)      282
  Manufacturing
   Operations           (24)      (8)           (20)         (16)       20
  Corporate and Other    26        -              4            -        22
  Divested Home
   Activities            16        -              -            -        16
                      -----  -------  -------------  -----------  --------
Total NXP             1,823      (21)           (12)         (19)    1,875

Operating income
 (loss)
  HPMS                  387     (222)            15           (3)      597
  Standard Products      91      (54)            (1)          (1)      147
  Manufacturing
   Operations           (57)     (25)           (20)         (15)        3
  Corporate and Other  (117)      (1)           (10)         (45)      (61)
  Divested Home
   Activities           (31)       -             (4)         (26)       (1)
                      -----  -------  -------------  -----------  --------
Total NXP               273     (302)           (20)         (90)      685
                      -----  -------  -------------  -----------  --------





2009
Table 16
--------------------------------------------------------------------------
($ in millions)        PPA                    Other
                GAAP effects Restructuring Incidentals Impairment Non-GAAP
                ---- ------- ------------- ----------- ---------- --------

Gross profit
  HPMS           785      (2)          (32)        (29)         -      848
                ---- ------- ------------- ----------- ---------- --------
  Standard
   Products       74       -            (8)         (6)         -       88
  Manufacturing
   Operations    (70)    (65)           45        (114)         -       64
  Corporate
   and Other     (21)     (2)            -         (14)         -       (5)
  Divested
   Home
   Activities    130       -             -           -          -      130
                ---- ------- ------------- ----------- ---------- --------
Total NXP        898     (69)            5        (163)         -    1,125

Operating
 income (loss)
  HPMS          (187)   (218)          (53)        (31)         -      115
                ---- ------- ------------- ----------- ---------- --------
  Standard
   Products     (120)    (61)           (9)         (6)         -      (44)
  Manufacturing
   Operations   (175)    (83)           43        (144)         -        9
  Corporate
   and Other    (188)     (2)          (65)        (62)         -      (59)
  Divested
   Home
   Activities   (261)     (7)          (19)          2        (69)    (168)
                ---- ------- ------------- ----------- ---------- --------
Total NXP       (931)   (371)         (103)       (241)       (69)    (147)
                ---- ------- ------------- ----------- ---------- --------





NXP Semiconductors -- EBITDA and Adjusted EBITDA
Table 17
--------------------------------------------------------------------------
($ in millions)                Q4 2009  Q3 2010  Q4 2010    2009     2010
                               -------  -------  -------  -------  -------

Net Income                        (359)     376      (96)    (153)    (406)
    Income (loss) on
     discontinued operations         7       23       11       32       59
                               -------  -------  -------  -------  -------
Income (loss) on continuing
 operations                       (366)     353     (107)    (185)    (465)

  Reconciling items to EBITDA:
    Financial income (expense)     161     (279)     192     (682)     628
    Provision for income taxes     (12)      27       (5)      10       24
    Depreciation                   110       86      115      490      389
    Amortization                   147       69       69      397      295
                               -------  -------  -------  -------  -------

EBITDA                              40      256      264       30      871

    Results of equity-accounted
     investees                       1        5       26      (74)      86
    Restructuring(1)                41        -       (5)      99      (20)
    Other incidental items(1)       65        9       15      199       84
                               -------  -------  -------  -------  -------

Adjusted EBITDA                    147      270      300      254    1,021
Adjusted EBITDA - last 12
 months                            254      868    1,021      254    1,021
                               -------  -------  -------  -------  -------

(1) Excluding depreciation property, plant and equipment related to:
    restructuring                    3        1       20        4       40
    other incidental items          16        -        3       42        6





Comparable revenue growth calculation
Table 18
--------------------------------------------------------------------------
                                         Q4 2010 versus Q4 2009
                              --------------------------------------------
                              Nominal  Currency  Consolidation  Comparable
Percent                        growth   effects     changes       growth
                              -------  --------  -------------  ----------

HPMS                             12.6       2.3              -        14.9
Standard Products                20.8       3.0              -        23.8
  Product Revenue                14.4       2.5              -        16.9
Manufacturing Operations         48.1         -          (70.1)      (22.0)
Corporate and Other             (35.0)      0.2           18.9       (15.9)
  Total NXP                       1.0       2.2            9.3        12.5
                              -------  --------  -------------  ----------


                                         Q4 2010 versus Q3 2010
                              --------------------------------------------
                              Nominal  Currency  Consolidation  Comparable
Percent                        growth   effects     changes       growth
                              -------  --------  -------------  ----------

HPMS                              0.3     (1.8)              -        (1.5)
Standard Products                 0.0     (2.1)              -        (2.1)
  Product Revenue                 0.2     (1.9)              -        (1.7)
Manufacturing Operations        (23.0)       -               -       (23.0)
Corporate and Other             (27.8)    (0.4)           44.4        16.2
  Total NXP                      (3.8)    (1.6)            1.0        (4.4)
                              -------  --------  -------------  ----------





Table 19
--------------------------------------------------------------------------
                                            2010 versus 2009
                              --------------------------------------------
                              Nominal  Currency  Consolidation  Comparable
Percent                        growth   effects     changes       growth
                              -------  --------  -------------  ----------

HPMS                             41.5       1.9              -        43.4
Standard Products                49.6       2.4              -        52.0
  Product Revenue                43.3       2.0              -        45.3
Manufacturing Operations         62.0         -          (75.3)      (13.3)
Corporate and Other             (17.6)      0.1            4.8       (12.7)
  Total NXP                      25.1       1.7            9.3        36.1
                              -------  --------  -------------  ----------