Q3 2011
--------------
Revenue $1,060 million
GAAP Gross margin 46.0%
GAAP Operating margin 10.3%
GAAP Earnings per share $1.21
Non-GAAP Gross margin 48.3%
Non-GAAP Operating margin 19.8%
Non-GAAP Earnings per share $0.50
- Trailing twelve month adjusted EBITDA $1,173 million
- Net debt reduced $746 million year-on-year to $2,956 million
- Ratio of net debt to trailing 12-month adjusted EBITDA at 2.5x
NXP Semiconductors N.V. (
Third Quarter 2011 GAAP Results
Product Revenue from continuing operations was $970 million, an increase of 3.6 percent from the $936 million reported in the third quarter of 2010, and a decrease of 5.4 percent from the $1,025 million reported in the second quarter of 2011. Product Revenue is the combination of revenue from the HPMS and Standard Products segments. Total revenue from continuing operations was $1,060 million, a decrease of 5.4 percent from the $1,120 million reported in third quarter of 2010 and a decrease of 5.4 percent from the $1,121 million reported in the second quarter of 2011.
Revenue attributable to the combination of the Manufacturing Operations and Corporate and Other segments was $90 million, a 51.1 percent decrease from the $184 million reported in the third quarter of 2010, and a 6.3 percent decrease from the $96 million reported in the second quarter of 2011. The anticipated decline was primarily due to lower revenue in the Manufacturing Operations segment, as contractual obligations to provide manufacturing services for previously divested businesses continue to expire. Included in the total revenue for the third quarter of 2010 was $24 million related to the divested NuTune business.
Gross profit from continuing operations for the third quarter of 2011 was $488 million, or 46.0 percent of revenue, as compared to $476 million, or 42.5 percent of revenue reported in the third quarter of 2010. This compares to the $523 million, or 46.7 percent of revenue reported in the second quarter 2011.
Operating income from continuing operations for the third quarter of 2011 was $109 million, or 10.3 percent of revenue, as compared to an operating income of $106 million reported in the third quarter of 2010, or 9.5 percent of revenue. This compares to an operating income of $133 million, or 11.9 percent of revenue as reported in the second quarter of 2011.
Net income for the third quarter of 2011 was $301 million or $1.21 per share. This compares to a net income of $369 million, or $1.55 per share (diluted) reported in the third quarter of 2010, and net income of $84 million or $0.33 per share (diluted) reported in the second quarter of 2011. Net income for the second quarter of 2011 and the third quarter of 2010 was positively impacted due to currency fluctuations on the company's U.S. dollar-denominated debt.
On July 4, 2011 NXP closed the previously announced sale of the Sound Solutions business and received gross proceeds of $855 million. During the third quarter of 2011 NXP realized $411 million of net profit, or $1.69 per share from the sale of the Sound Solutions business. All current and all prior period financial figures have been restated to reflect the divesture of the Sound Solutions business. The historical results of the Sound Solutions business are treated as a discontinued operation in NXP's financial statements.
Subsequent to the end of the third quarter, NXP entered into a private transaction whereby it will purchase $250.5 million principal amount of its U.S. dollar-denominated floating rate notes due 2013 and EUR 258.5 million principal amount of its euro-denominated floating rate notes due 2013 from an existing notes-holder in exchange for new U.S. dollar-denominated senior secured floating rate notes due 2016 with a principal amount of approximately $622 million, assuming a Euros-to-U.S. dollar exchange rate of 1.40. The new floating rates will bear interest at LIBOR + 550bps. The transaction is expected to close in November and is subject to customary closing conditions.
Third Quarter 2011 non-GAAP Results
Non-GAAP gross profit from continuing operations was $512 million, or 48.3 percent of revenue, an increase of 4.9 percent from the $488 million, or 43.6 percent of revenue reported in the third quarter of 2010. This compares to $536 million, or 47.8 percent of revenue, a 4.5 percent decline from amount reported in the second quarter of 2011.
Non-GAAP operating income from continuing operations was $210 million, or 19.8 percent of revenue, an increase of 13.5 percent from the $185 million, or 16.5 percent of revenue, reported in the third quarter of 2010. This compares to the non-GAAP operating income of $229 million, or 20.4 percent of revenue, an 8.3 percent decline from the amount reported in the second quarter of 2011.
Non-GAAP net income was $126 million, or $0.50 per share (diluted). This compares to non-GAAP net income of $94 million, or $0.39 per share (diluted) reported in the third quarter of 2010, and a net income of $130 million or $0.51 per share (diluted) reported in the second quarter of 2011.
"During the third quarter NXP delivered revenue around the lower end of our original guidance, as customer order-rates slowed in response to the uncertain macro-economic environment," said Richard Clemmer, NXP Chief Executive Officer. "As we have previously highlighted, our customers continue to actively manage their on-hand inventory exposure, with this trend most notable through our distribution channel. We do not anticipate a re-acceleration of orders to occur in the short-term until our customers have more confidence in the stability of end-market demand. As such, we anticipate order patterns over the next few quarters will continue to be volatile.
"Even as revenue came in at the lower end of our expectations, our overall profitability improved during the quarter as non-GAAP gross margin was just over 48 percent, a 470 basis point improvement versus the year ago period. Our non-GAAP operating profit was in-line with our original guidance, with non-GAAP operating margin just below 20 percent, a 330 basis point improvement versus the year ago period.
"We continued to actively deleverage our balance sheet as our net debt declined $746 million versus the year ago period to $2,956 million, resulting in a net debt to trailing-twelve month adjusted EBITDA of 2.5 times. Additionally we repurchased 3.4 million shares of our common stock for $57 million," said Clemmer.
Additional Information for the Third Quarter of 2011:
- NXP repaid $600 million of short term debt and $221 million of long-term debt. The change in total debt balance during the quarter, which includes the impact of currency fluctuations, was a decline of $885 million.
- Net cash interest paid was $82 million.
- On September 1, 2011 Moody's Investor Service raised NXP's corporate credit rating to "B2" from "B3". Additionally, Moody's upgraded the senior secured debt rating to "B2" from "B3"; upgraded the company's senior unsecured debt rating to "Caa1" from "Caa2", and upgraded its outlook on the company to a "Positive Outlook" from a "Stable Outlook".
- NXP repurchased a total of 3.4 million shares of common stock for a total cost of approximately $57 million.
- Annualized cost savings for the Redesign Program were $58 million in the third quarter of 2011, bringing the cumulative total since inception of the program to $889 million. NXP continues to estimate that the total annualized program savings since inception in September 2008 through its expected completion at the end of 2011 to be approximately $925 million.
- Cash paid out for the Redesign Program was $8 million in the third quarter of 2011, bringing the cumulative total since the beginning of the program to $720 million. NXP continues to estimate that total program costs since inception in 2008 through its expected completion at the end of 2011 will be no greater than $725 million.
- SSMC, NXP's consolidated joint-venture wafer fab with TSMC, reported third quarter 2011 operating income of $27 million, EBITDA of $38 million and had an ending cash balance of $227 million.
- Utilization in NXP wafer fabs averaged 79 percent in the third quarter 2011 compared to 99 percent in the year ago period and 94 percent in the prior quarter.
Guidance for the Fourth Quarter 2011:
- Product Revenue for the fourth quarter of 2011 is anticipated to be in a range of down 8 to14 percent sequentially as compared to the third quarter of 2011. Product Revenue is the combination of revenue from the HPMS and Standard Products segments.
- The combination of revenue from Manufacturing Operations and Corporate and Other segments is anticipated to be approximately $70 million.
- Non-GAAP gross profit from continuing operations is expected to be in a range of $397 million to $426 million.
- Non-GAAP operating expense is expected to be in a range of $268 million to $274 million.
- Non-GAAP operating income from continuing operations is expected to be in a range of $129 million to $152 million.
- Interest expense is anticipated to be in a range of $71 million, plus or minus $1 million.
- Cash income tax is anticipated to be approximately $5 million.
- Income attributable to non-controlling interests is anticipated to be approximately $2 million.
- Average diluted share count is anticipated to be approximately 251 million shares.
- Non-GAAP EPS is anticipated to be in a range of $0.20 to $0.30 per share.
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 "Adjusted EBITDA - last 12 months", 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" and "non-GAAP net income" 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 PPA effect in research and development expenses represents the write-off of in-process R&D. The amortization charges related to long-lived intangible assets are 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 November 1, 2011 at 8:00 a.m. U.S. Eastern Time (1:00 p.m. Central European Time) to discuss its third quarter 2011 results and provide an outlook for the fourth quarter of 2011. 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. (
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) Q3 2010 Q2 2011 Q3 2011
-------- -------- --------
Revenue 1,120 1,121 1,060
Cost of revenue (644) (598) (572)
-------- -------- --------
Gross profit 476 523 488
Research and development expenses (146) (165) (165)
Selling expenses (63) (73) (74)
General and administrative expenses (162) (156) (145)
-------- -------- --------
Total operating expenses (371) (394) (384)
Other income (expense) 1 4 5
-------- -------- --------
Operating income (loss) 106 133 109
Financial income (expense):
Interest income (expense) - net (80) (79) (73)
Foreign exchange gain (loss) on debt 323 85 (82)
Gain (loss) on extinguishment of long term
debt 55 (14) (11)
Other financial expense (19) (11) (8)
-------- -------- --------
Income (loss) before taxes 385 114 (65)
Provision for income taxes (27) - (20)
-------- -------- --------
Income (loss) after taxes 358 114 (85)
Results relating to equity-accounted investees
1) (5) (15) (25)
-------- -------- --------
Income (loss) from continuing operations 353 99 (110)
Income (loss) on discontinued operations, net
of tax 23 (2) 421
-------- -------- --------
Net income (loss) 376 97 311
Net (income) loss attributable to non-
controlling interests (7) (13) (10)
-------- -------- --------
Net income (loss) attributable to stockholders 369 84 301
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 1.46 0.35 (0.48)
Income (loss) from discontinued operations 0.10 (0.01) 1.69
Net income (loss) 1.56 0.34 1.21
Diluted earnings per common share in $
Income (loss) from continuing operations 1.45 0.34 (0.48)
Income (loss) from discontinued operations 0.10 (0.01) 1.69
Net income (loss) 1.55 0.33 1.21
Weighted average number of shares of common
stock used in computing per share amounts (in
thousands):
- Basic 237,295 249,957 248,318
- Diluted 238,735 256,273 248,318
----------------------------------------------------------------------------
1) During the third quarter 2011, the share in net income of NXP's equity-
accounted participation in Trident is not based on the actual reported
net income due to differences in reporting schedules between NXP and
Trident. NXP has estimated Trident's income based on our interpretation
of Trident's public guidance and statements made during the third
quarter 2011.
NXP Semiconductors
Condensed consolidated balance sheets (unaudited)
Table 2
----------------------------------------------------------------------------
($ in millions unless otherwise
stated) Oct 3, 2010 July 3, 2011 Oct 2, 2011
------------ ------------ -----------
Current assets:
Cash and cash equivalents 947 859 865
Receivables:
Accounts receivable - net 449 424 413
Other receivables 48 46 33
------------ ------------ -----------
Total receivables 497 470 446
Assets held for sale 47 45 45
Current assets of discontinued
operations 109 92 -
Inventories 486 571 610
Other current assets 137 122 111
------------ ------------ -----------
Total current assets 2,223 2,159 2,077
Non-current assets:
Investments in equity-accounted
investees 159 95 71
Other non-current financial assets 20 19 18
Non-current assets of discontinued
operations 275 302 -
Other non-current assets 140 173 151
Property, plant and equipment 1,175 1,156 1,107
Intangible assets excluding goodwill 1,585 1,426 1,274
Goodwill 2,334 2,468 2,316
------------ ------------ -----------
Total non-current assets 5,688 5,639 4,937
Total assets 7,911 7,798 7,014
Current liabilities:
Accounts payable 589 561 532
Liabilities held for sale 29 21 21
Current liabilities of discontinued
operations 67 36 -
Accrued liabilities 524 404 422
Short-term provisions 132 71 120
Other current liabilities 47 101 86
Short-term debt 509 641 49
------------ ------------ -----------
Total current liabilities 1,897 1,835 1,230
Non-current liabilities:
Long-term debt 4,140 4,065 3,772
Long-term provisions 432 366 348
Non-current liabilities of
discontinued operations 26 21 -
Other non-current liabilities 111 100 104
------------ ------------ -----------
Total non-current liabilities 4,709 4,552 4,224
Non-controlling interests 226 193 203
Stockholder's equity 1,079 1,218 1,357
------------ ------------ -----------
Total equity 1,305 1,411 1,560
Total liabilities and equity 7,911 7,798 7,014
----------------------------------------------------------------------------
NXP Semiconductors
Condensed consolidated statements of cash flows (unaudited)
Table 3
----------------------------------------------------------------------------
($ in millions unless otherwise stated) Q3 2010 Q2 2011 Q3 2011
------- ------- -------
Cash Flows from operating activities
-------------------------------------------------
Net income (loss) 376 97 311
(Income) loss from discontinued operations, net
of tax (23) 2 (421)
Adjustments to reconcile net income (loss) to net
cash provided by (used for) operating
activities:
Depreciation and amortization 155 143 152
Net (gain) loss on sale of assets (7) (2) (1)
(Gain) loss on extinguishment of debt (55) 14 11
Results relating to equity accounted investees 6 15 25
Changes in operating assets and liabilities:
(Increase) decrease in trade receivables 49 16 (15)
(Increase) decrease in inventories (26) (30) (50)
Increase (decrease) in trade payables (20) 17 (15)
(Increase) decrease in other receivables 64 1 9
Increase (decrease) in other payables (20) (108) 32
Increase (decrease) in provisions (29) (5) 7
Changes in deferred taxes 53 (5) (3)
Exchange differences (382) (85) 82
Other items 11 11 7
------- ------- -------
Net cash provided by (used for) operating
activities 152 81 131
-------------------------------------------------
Cash flows from investing activities:
-------------------------------------------------
Purchase of intangible assets (2) (2) (1)
Capital expenditures on property, plant and
equipment (61) (71) (45)
Proceeds from disposals of property, plant and
equipment 2 2 1
Purchase of other non-current financial assets (1) (1) -
Proceeds from the sale of other non-current
financial assets 27 1 1
Purchase of interest in businesses (8) - -
------- ------- -------
Net cash (used for) provided by investing
activities (43) (71) (44)
-------------------------------------------------
Cash flows from financing activities:
-------------------------------------------------
Net (repayments) borrowings of short-term debt - 2 6
Amounts drawn under the revolving credit facility - 200 -
Repayments under the revolving credit facility (100) - (600)
Repurchase of long-term debt (1,370) (678) (230)
Principal payments on long-term debt (1) (1) (2)
Net proceeds from the issuance of long-term debt 974 496 -
Dividends paid to non-controlling interests 1) (1) (67) -
Net proceeds from the issuance of common stock 450 - -
Cash proceeds from exercise of stock options - 9 -
Purchase of treasury shares - - (57)
------- ------- -------
Net cash provided by (used for) financing
activities (48) (39) (883)
-------------------------------------------------
Net cash provided by (used for) continuing
operations 61 (29) (796)
-------------------------------------------------
Cash flows from discontinued operations:
Net cash provided by (used for) operating
activities 7 4 -
Net cash provided by (used for) investing
activities (8) (10) 842
Net cash provided by (used for) financing
activities - (2) -
------- ------- -------
Net cash provided by (used for) discontinued
operations (1) (8) 842
-------------------------------------------------
Net cash provided by (used for) continuing and
discontinued operations 60 (37) 46
-------------------------------------------------
Effect of changes in exchange rates on cash
positions 60 9 (48)
------- ------- -------
Increase (decrease) in cash and cash equivalents 120 (28) (2)
Cash and cash equivalents at beginning of period 842 895 867
------- ------- -------
Cash and cash equivalents at end of period 962 867 865
Less: cash and cash equivalents at end of period-
discontinued operations 15 8 -
------- ------- -------
Cash and cash equivalents at end of period-
continuing operations 947 859 865
----------------------------------------------------------------------------
1) Dividends paid to non-controlling interests have been reclassified from
operating activities to financing activities to align with the guidance
provided by ASC Topic 810 that classifies non-controlling interests
within equity.
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) Q3 2010 Q2 2011 Q3 2011
--------- --------- ---------
High Performance Mixed Signal 715 779 726
Standard Products 221 246 244
--------- --------- ---------
Product Revenue 936 1,025 970
Manufacturing Operations 148 83 79
Corporate and Other 36 13 11
--------- --------- ---------
Total NXP revenue 1,120 1,121 1,060
----------------------------------------------------------------------------
High Performance Mixed Signal Segment Results
Table 5
----------------------------------------------------------------------------
($ in millions, unless otherwise stated) Q3 2010 Q2 2011 Q3 2011
-------- -------- --------
Revenue 715 779 726
% of Product Revenue 76.4% 76.0% 74.8%
GAAP gross profit 403 433 397
% of revenue 56.4% 55.6% 54.7%
Non-GAAP gross profit 404 433 410
% of revenue 56.5% 55.6% 56.5%
Operating income (loss) 120 112 86
% of revenue 16.8% 14.4% 11.8%
Non-GAAP operating income 165 166 149
% of revenue 23.1% 21.3% 20.5%
----------------------------------------------------------------------------
Standard Products Segment Results
Table 6
----------------------------------------------------------------------------
($ in millions, unless otherwise stated) Q3 2010 Q2 2011 Q3 2011
-------- -------- --------
Revenue 221 246 244
% of Product Revenue 23.6% 24.0% 25.2%
GAAP gross profit 78 92 90
% of revenue 35.3% 37.4% 36.9%
Non-GAAP gross profit 79 93 90
% of revenue 35.7% 37.8% 36.9%
Operating income (loss) 31 47 42
% of revenue 14.0% 19.1% 17.2%
Non-GAAP operating income (loss) 44 63 55
% of revenue 19.9% 25.6% 22.5%
----------------------------------------------------------------------------
NXP Semiconductors
Segments Reconciliation
Q3 2011
Table 7
----------------------------------------------------------------------------
PPA Other
($ in millions) GAAP effects Restructuring Incidentals Non-GAAP
---- ------- -------------- ----------- --------
Gross profit
HPMS 397 (13) - - 410
Standard Products 90 - - - 90
Manufacturing
Operations (12) (2) (4) (5) (1)
Corporate and Other 13 - - - 13
---- ------- -------------- ----------- --------
Total NXP 488 (15) (4) (5) 512
Operating income
(loss)
HPMS 86 (63) (1) 1 149
Standard Products 42 (14) - 1 55
Manufacturing
Operations (16) (6) (5) (5) -
Corporate and Other (3) - (1) (8) 6
---- ------- -------------- ----------- --------
Total NXP 109 (83) (7) (11) 210
----------------------------------------------------------------------------
Q2 2011
Table 8
----------------------------------------------------------------------------
PPA Other
($ in millions) GAAP effects Restructuring Incidentals Non-GAAP
----- ------- -------------- ----------- ---------
Gross profit
HPMS 433 - - - 433
Standard Products 92 - (1) - 93
Manufacturing
Operations (15) (3) (3) (6) (3)
Corporate and
Other 13 - - - 13
----- ------- -------------- ----------- ---------
Total NXP 523 (3) (4) (6) 536
Operating income
(loss)
HPMS 112 (50) (3) (1) 166
Standard Products 47 (15) (1) - 63
Manufacturing
Operations (18) (7) (3) (7) (1)
Corporate and
Other (8) - (1) (8) 1
----- ------- -------------- ----------- ---------
Total NXP 133 (72) (8) (16) 229
----------------------------------------------------------------------------
Q3 2010
Table 9
----------------------------------------------------------------------------
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)
----- ------- -------------- ----------- --------
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)
----- ------- -------------- ----------- --------
Total NXP 106 (69) (1) (9) 185
----------------------------------------------------------------------------
NXP Semiconductors
Financial Reconciliation - GAAP to non-GAAP (unaudited)
Q3 2011
Table 10
----------------------------------------------------------------------------
Other Other
PPA Restruc- Inciden- Adjust-
($ in millions) GAAP effects turing tal ments Non-GAAP
------- ------- -------- ------- ------ --------
Revenue 1,060 - - - - 1,060
Gross profit 488 (15) (4) (5) - 512
% of revenue 46.0% 48.3%
Research and
development (165) - (1) - - (164)
Selling (74) - - - - (74)
General and
administrative (145) (68) (2) (8) - (67)
------- ------- -------- ------- ------ --------
Total operating
expense (384) (68) (3) (8) - (305)
Other income
(expense) 5 - - 2 - 3
------- ------- -------- ------- ------ --------
Operating
income (loss) 109 (83) (7) (11) - 210
% of revenue 10.3% 19.8%
Interest income
(expense) net (73) (73)
Provisions for
income taxes (20) (1) 1)
Income (loss)
from
continuing
operations (110) (83) (7) (11) (145) 2) 136
Income (loss)
on
discontinued
operations,
net of tax 421 421 -
Net (income)
loss
attributable
to non-
controlling
interests (10) (10)
------- --------
Net income
(loss)
attributable
to
stockholders 301 126 3)
Weighted
average
diluted shares
outstanding
(in
thousands): 248,318 251,470
Diluted
earnings
(loss) per
common share
attributable
to
stockholders 1.21 0.50
----------------------------------------------------------------------------
1) Cash income taxes paid during the period.
2) Includes: Foreign exchange loss on debt: $(82) million; Loss on extinguishment of long-term debt: $(11) million; Other financial expense: $(8) million; Results relating to equity-accounted investees: $(25) million; and difference between book and cash income taxes: $(19) million.
3) Includes stock-based compensation expense of $4 million.
NXP Semiconductors
Financial Reconciliation - GAAP to non-GAAP (unaudited)
Q2 2011
Table 11
----------------------------------------------------------------------------
Other Other
PPA Restruc- Inciden- Adjust-
($ in millions) GAAP effects turing tal ments Non-GAAP
------- ------- -------- ------- ------ --------
Revenue 1,121 - - - - 1,121
Gross profit 523 (3) (4) (6) - 536
% of revenue 46.7% 47.8%
Research and
development (165) - (3) (2) - (160)
Selling (73) - - - - (73)
General and
administrative (156) (69) (1) (8) - (78)
------- ------- -------- ------- ------ --------
Total operating
expense (394) (69) (4) (10) - (311)
Other income
(expense) 4 - - - - 4
------- ------- -------- ------- ------ --------
Operating income
(loss) 133 (72) (8) (16) - 229
% of revenue 11.9% 20.4%
Interest income
(expense) net (79) (79)
Provisions for
income taxes - (7) 1)
Income (loss)
from continuing
operations 99 (72) (8) (16) 52 2) 143
Income (loss) on
discontinued
operations, net
of tax (2) (2) -
Net (income)
loss
attributable to
non-
controlling
interests (13) (13)
------- --------
Net income
(loss)
attributable to
stockholders 84 (72) (8) (16) 50 130 3)
Weighted average
diluted shares
outstanding (in
thousands): 256,273 256,273
Diluted earnings
(loss) per
common share
attributable to
stockholders 0.33 0.51
------------------------------------------------------------------------
1) Cash income taxes paid during the period.
2) Includes: Foreign exchange gain on debt: $85 million; Loss on extinguishment of long-term debt: $(14) million; Other financial expense: $(11) million; Results relating to equity-accounted investees: $(15) million; and difference between book and cash income taxes: $7 million.
3) Includes stock-based compensation expense of $4 million.
NXP Semiconductors
Financial Reconciliation - GAAP to non-GAAP (unaudited)
Q3 2010
Table 12
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Other Other
PPA Restruc- Inciden- Adjust-
($ in millions) GAAP effects turing tal 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) per
common share
attributable to
stockholders 1.55 0.39
----------------------------------------------------------------------------
1) Cash income taxes paid during the period.
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 of $7 million.
NXP Semiconductors
Adjusted EBITDA
Table 13
----------------------------------------------------------------------------
($ in millions) Q3 2010 Q2 2011 Q3 2011
------- ------- -------
Net Income 376 97 311
Income (loss) on discontinued operations 23 (2) 421
------- ------- -------
Income (loss) on continuing operations 353 99 (110)
Reconciling items to EBITDA:
Financial (income) expense (279) 19 174
Provision for income taxes 27 - 20
Depreciation 86 72 68
Amortization 69 71 84
------- ------- -------
EBITDA 256 261 236
Results of equity-accounted investees 5 15 25
Restructuring 1) - 7 7
Other incidental items 1) 9 16 11
------- ------- -------
Adjusted EBITDA 270 299 279
Trailing twelve month adjusted EBITDA 868 1,164 1,173
----------------------------------------------------------------------------
1) Excluding depreciation property, plant and equipment related to:
Restructuring 1 1 -