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NXP Semiconductors Reports Fourth Quarter and Full-Year 2013 Results

EINDHOVEN, THE NETHERLANDS -- (Marketwired) -- 02/05/14 -- NXP Semiconductors N.V. (NASDAQ: NXPI)


                                             Q4 2013            FY 2013
                                        -----------------  -----------------
Revenue                                   $1,293 million     $4,815 million
GAAP Gross margin                             45.6%              45.2%
GAAP Operating margin                         15.3%              13.5%
GAAP Diluted earnings per share               $0.37              $1.36

Non-GAAP Gross margin                         49.2%              47.7%
Non-GAAP Operating margin                     25.1%              23.3%
Non-GAAP Diluted earnings per share           $0.99              $3.29

NXP Semiconductors N.V. (NASDAQ: NXPI) today reported financial results for the fourth quarter and the full-year of 2013, ended December 31, 2013, and provided guidance for the first quarter 2014.

"Our results for the fourth quarter of 2013 again came in near the high-end of our guidance, as NXP delivered Product revenue of $1,251 million, approximately a 3 percent sequential increase, and nearly a 17 percent increase from the prior year period -- very good performance when considering the fourth quarter is usually a seasonality declining quarter for NXP. Total NXP revenue in the fourth quarter was $1,293 million, nearly a 4 percent sequential increase, and nearly a 16 percent increase from the prior year period," said Richard Clemmer, NXP Chief Executive Officer.

"On a full-year basis, NXP delivered Product revenue of $4,678 million, a 13 percent year-on-year growth, as demand associated with key HPMS design opportunities continued to accelerate. Specifically, full-year revenue in our core HPMS segment increased 19 percent year-on-year due to very strong and better than industry growth across all our HPMS end markets. In our Standard product segment full-year revenue declined 2 percent year-on-year, reflecting flat growth in our discrete components business, and a decline in our logic business. Taken together, total NXP revenue increased greater than 10 percent year-on-year to $4,815 million.

"Growth in our HPMS segment during the fourth quarter was strong, resulting in growth of 22 percent year-on-year growth and about 4 percent sequentially. We experienced record revenue levels in both our Automotive and Portable & Computing end markets -- both in excess of guidance. Our Automotive business delivered better than seasonal growth due to sales of entertainment and keyless-entry products. With sales up 21 percent year-on-year, our Automotive business is firmly established on a sales run-rate of greater than $1 billion per year. Within our Portable & Computing business, revenue was up 50 percent versus the prior year driven by strong demand for our MCU and high-speed interface products for strategic design wins in the high-end smartphone and tablet market. Performance in our Identification business was in-line with expectations and up 13 percent year on year. The results in our Industrial & Infrastructure were slightly below our expectations as a result of weaker than expected demand for PC notebook power supply and silicon tuner products, but still up nearly 20 percent year-on-year.

"From an earnings per share perspective, we exceeded the mid-point of guidance due to stronger overall product revenue. Additionally, as planned we continued to realize an improvement in gross margin within our Standard Products segment and demonstrated good overall operating expense control. Taken together, our above market growth and ongoing improving margin performance resulted in a 19 percent non-GAAP free cash flow margin during the quarter. In summary, 2013 was a very good year for NXP -- a year our strategy of providing differentiated product solutions was confirmed by strong support from our customers resulting in significant revenue and earnings growth. We would like to thank all of the NXP team for their efforts in helping to deliver our performance. We believe our strategy will continue to deliver robust results," said Clemmer.

Summary of Fourth Quarter and Full-year 2013 Results ($ millions, except EPS, unaudited)



----------------------------------------------------------------------------

                                 Q4 2013  Q3 2013  Q4 2012   Q - Q    Y - Y
                                 -------  -------  -------  -------  -------

Product Revenue                  $ 1,251  $ 1,213  $ 1,072     3%      17%

Corporate & Other                $    42  $    36  $    44    17%      -5%
                                 -------  -------  -------

Total Revenue                    $ 1,293  $ 1,249  $ 1,116     4%      16%

GAAP Gross Profit                $   589  $   570  $   490     3%      20%

  Gross Profit Adjustments (1)   $   (47) $   (15) $   (25)

Non-GAAP Gross Profit            $   636  $   585  $   515     9%      23%

  GAAP Gross Margin                  46%      46%      44%

  Non-GAAP Gross Margin              49%      47%      46%

GAAP Operating Income            $   198  $   168  $    33    18%      500%

  Operating Income Adjustments
   (1)                              (126)    (117)    (192)

Non-GAAP Operating Income        $   324  $   285  $   225    14%      44%

  GAAP Operating Margin              15%      14%       3%

  Non-GAAP Operating Margin          25%      23%      20%

GAAP Net Income / (Loss)         $    96  $   155  $  (116)   -38%      NM

  Net Income Adjustments (1)        (157)     (64)    (258)

Non-GAAP Net Income / (Loss)     $   253  $   219  $   142    16%      78%

GAAP EPS                         $  0.37  $  0.60  $ (0.47)   -38%      NM
  EPS Adjustments (1)            $ (0.62) $ (0.25) $ (1.03)
Non-GAAP EPS                     $  0.99  $  0.85  $  0.56    16%      77%

----------------------------------------------------------------------------



---------------------------------------------------------

                                   2013     2012    Y - Y
                                 -------  -------  ------

Product Revenue                  $ 4,678  $ 4,144    13%

Corporate & Other                $   137  $   214   -36%
                                 -------  -------

Total Revenue                    $ 4,815  $ 4,358    10%

GAAP Gross Profit                $ 2,177  $ 1,988    10%

  Gross Profit Adjustments (1)   $  (121) $    (8)

Non-GAAP Gross Profit            $ 2,298  $ 1,996    15%

  GAAP Gross Margin                  45%      46%

  Non-GAAP Gross Margin              48%      46%

GAAP Operating Income            $   651  $   412    58%

  Operating Income Adjustments
   (1)                              (469)    (422)

Non-GAAP Operating Income        $ 1,120  $   834    34%

  GAAP Operating Margin              14%      10%

  Non-GAAP Operating Margin          23%      19%

GAAP Net Income / (Loss)         $   348  $  (115)   NM

  Net Income Adjustments (1)        (492)    (592)

Non-GAAP Net Income / (Loss)     $   840  $   477    76%

GAAP EPS                         $  1.36  $ (0.46)   NM
  EPS Adjustments (1)            $ (1.93) $ (2.34)
Non-GAAP EPS                     $  3.29  $  1.88    75%

---------------------------------------------------------

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

Supplemental Information ($ millions, unaudited)


------------------------------------------------------------------------

                                                                 Percent
                                   Q4 2013   Q3 2013   Q4 2012  Q4 Total
                                  --------  --------  --------  --------

  Automotive                      $    275  $    261  $    227     21%

  Identification                  $    329  $    329  $    290     25%

  Infrastructure & Industrial     $    194  $    202  $    162     15%

  Portable & Computing            $    159  $    130  $    106     12%
                                  --------  --------  --------  --------

High Performance Mixed Signal
 (HPMS)                           $    957  $    922  $    785     74%

Standard Products (STDP)          $    294  $    291  $    287     23%
                                  --------  --------  --------  --------

Product Revenue                   $  1,251  $  1,213  $  1,072     97%

Corporate & Other                 $     42  $     36  $     44     3%
                                  --------  --------  --------  --------

Total Revenue                     $  1,293  $  1,249  $  1,116    100%

------------------------------------------------------------------------



---------------------------------------------------------------------------

                                   Q - Q    Y - Y     2013    2012    Y - Y
                                  -------  -------  ------- -------  ------

  Automotive                         5%      21%    $ 1,019 $   939    9%

  Identification                     0%      13%    $ 1,297 $   986    32%

  Infrastructure & Industrial       -4%      20%    $   729 $   634    15%

  Portable & Computing              22%      50%    $   488 $   417    17%
                                                    ------- -------

High Performance Mixed Signal
 (HPMS)                              4%      22%    $ 3,533 $ 2,976    19%

Standard Products (STDP)             1%       2%    $ 1,145 $ 1,168    -2%
                                                    ------- -------

Product Revenue                      3%      17%    $ 4,678 $ 4,144    13%

Corporate & Other                   17%      -5%    $   137 $   214   -36%


Total Revenue                        4%      16%    $ 4,815 $ 4,358    10%

---------------------------------------------------------------------------

Product Revenue is the combination of revenue from the High Performance Mixed Signal (HPMS) and Standard Products (STDP) segments. Percent of quarterly total amounts may not add to 100 percent due to rounding.

Additional and Subsequent Information for the Fourth Quarter of 2013:

  • Effective February 6, 2014, NXP expanded its existing stock repurchase program. Under the expanded stock repurchase program, NXP may repurchase shares to cover in part employee stock options and equity rights under its long term incentive plans. The new repurchase program approved by the Board of Directors enables NXP to repurchase up to twenty-five (25) million shares of its common stock from time to time in both privately negotiated and open market transactions, subject to management's evaluation of market conditions, terms of private transactions, the best interests of NXP shareholders, applicable legal requirements and other factors. There is no guarantee as to the exact number of shares that will be repurchased under the stock repurchase program, and NXP may terminate the repurchase program at any time. Repurchased shares are held in treasury and are accounted for as a reduction of stockholders' equity.
  • On December 11, 2013, NXP entered into a new $400 million aggregate principal amount senior secured term loan facility due January 11, 2020. Concurrently, NXP called the $496 million principal amount senior secured term loan facility due January 11, 2020. A $100 million draw-down under our existing revolving credit facility and approximately $6 million of cash on hand were used to settle the combined transactions, as well as pay the related call premium of $5 million and accrued interest of $5 million.
  • On October 15, 2013, NXP used the net proceeds from the $500 million senior unsecured notes issued on September 24, 2013 to repay its outstanding $422 million 9.75% senior secured notes due August 2018. As a result of the extinguishment, capitalized issue costs related to the 9.75% senior secured notes in the amount of $9 million were written off in the fourth quarter of 2013.
  • During the fourth quarter of 2013, NXP determined that, under U.S. GAAP a change to our reportable segments was warranted due to the significant decline in external revenue and cost reported under the Manufacturing Operations segment. On an ongoing basis the results of the Manufacturing Operations segment will be reflected within Corporate and Other.
  • NXP repurchased approximately 4 million shares in the fourth quarter of 2013 for a total cost of approximately $163 million. For the full-year 2013, NXP repurchased approximately 11 million shares for a total cost of approximately $405 million.
  • Net cash interest paid in the fourth quarter of 2013 was $44 million, and for the full-year 2013 was $174 million.
  • SSMC, NXP's consolidated joint-venture wafer fab with TSMC, reported fourth quarter 2013 operating income of $46 million, EBITDA of $59 million and a closing cash balance of $353 million. For the full-year 2013 SSMC reported operating income of $169 million and EBITDA of $217 million.
  • Utilization in NXP wafer fabs averaged 95 percent in the fourth quarter of 2013 compared to 85 percent in the prior year period and 90 percent in the prior quarter.

Guidance for the First Quarter 2014: ($ millions, except share count and EPS) (1)


----------------------------------------------------------------
                                        Guidance Range
                                 Low         Mid         High
                              ---------   ---------   ---------

Product Revenue               $   1,175   $   1,195   $   1,215

  Q-Q                                -6%         -4%         -3%

Other Revenue                 $      35   $      35   $      35
                              ---------   ---------   ---------

Total Revenue                 $   1,210   $   1,230   $   1,250

  Q-Q                                -6%         -5%         -3%

Non-GAAP Gross Profit         $     583   $     598   $     612

  Non-GAAP Gross Margin              48%         49%         49%

Non-GAAP Operating Income     $     276   $     290   $     306

  Non-GAAP Operating Margin          23%         24%         24%

  Interest Expense            $      35   $      35   $      35

  Cash Taxes                  $       8   $       8   $       8

  Non-controlling Interest    $      18   $      18   $      18
                              ---------   ---------   ---------

Non-GAAP Net Income           $     215   $     229   $     245

Ave. Diluted Shares                 256         256         256

  Non - GAAP EPS              $    0.84   $    0.90   $    0.96

----------------------------------------------------------------

Note (1): NXP has based the guidance included in this release on judgments and estimates that management believes are reasonable given its assessment of historical trends and other information reasonably available as of the date of this release. The guidance included in this release consists of predictions only, and is subject to a wide range of known and unknown risks and uncertainties, many of which are beyond NXP's control. The guidance included in this release should not be regarded as representations by NXP that the estimated results will be achieved. Actual results may vary materially from the guidance we provide today. In relation to the use of non-GAAP financial information see the note regarding "Use of Non-GAAP Financial Information" elsewhere in this release. For the factors, risks and uncertainties to which judgments, estimates and forward-looking statements generally are subject see the note regarding "Forward-looking Statements." We undertake no obligation to publicly update or revise any forward-looking statements, including the guidance set forth herein, to reflect future events or circumstances. Considering the uncertain magnitude and variability of the foreign exchange consequences upon "PPA effects", "restructuring costs", "other incidental items" and any interest expense or taxes in future periods, management believes that GAAP financial measures are not available for NXP without unreasonable efforts on a forward looking basis.

Discussion of GAAP to non-GAAP Reconciliations
In addition to providing financial information on a basis consistent with U.S. generally accepted accounting principles ("GAAP"), NXP also provides the following selected financial measures on a non-GAAP basis: (i) "non-GAAP gross profit," (ii) "non-GAAP gross margin," (iii) "non-GAAP Research and development," (iv) "non-GAAP Selling, general and administrative," (v) non-GAAP Other income," (vi) "non-GAAP operating income (loss)," (vii) "non-GAAP operating margin," (viii) "non-GAAP net income/ (loss)," (ix) "PPA effects," (x) "Restructuring costs," (xi) "Stock based compensation," (xii) "Other incidental items," (xiii) "non-GAAP Financial Income (expense)," (xiv) "non-GAAP Results relating to equity-accounted investees," (xv) "non-GAAP Cash tax (expense)," (xvi) "diluted non-GAAP EPS," (xvii) "EBITDA," "adjusted EBITDA" and "trailing 12 month adjusted EBITDA," (xviii) "net debt" and (xix) "non-GAAP free cash flow."

In this release, references to:

  • "non-GAAP gross profit," "non-GAAP research and development," "non-GAAP Selling, general and administrative," "non-GAAP Other income," "non-GAAP operating income (loss)," and "non-GAAP net income/ (loss)" are to NXP's gross profit, research and development, selling general and administrative, operating income and net income/ (loss) calculated on a basis consistent with GAAP, net of the effects of purchase price accounting ("PPA"), restructuring costs, stock-based compensation, other incidental items and certain other adjustments. "PPA effects" reflect the fair value adjustments impacting acquisition accounting and other acquisition adjustments charged to the income statement applied to the formation of NXP on September 29, 2006 and all subsequent acquisitions. "Restructuring costs" consist of costs related to restructuring programs and gains and losses resulting from divestment activities and impairment charges. "Stock based compensation" consists of incentive expense granted to eligible employees in the form of equity based instruments. "Other incidental items" consist of process and product transfer costs (which refer to the costs incurred in transferring a production process and products from one manufacturing site to another) and certain charges related to acquisitions and divestitures. "Other adjustments" include or exclude certain items that management believes provides insight into our core operating results, our ability to generate cash and underlying business trends affecting our performance.

  • "non-GAAP gross margin" and "non-GAAP operating margin" are to our non-GAAP gross profit or our non-GAAP operating income as a percentage of our sales, respectively;

  • "non-GAAP Financial Income (expense)" is the interest income or expense net of impacts due to foreign exchange changes on our Euro-denominated debt, gains or losses due to the extinguishment of long-term debt and less other financial expenses deemed to be one-time in nature;

  • "non-GAAP Cash tax (expense)" is the difference between our GAAP tax provision and the cash taxes paid during the period;

  • "diluted non-GAAP EPS" attributable to stockholders are to non-GAAP net income or loss attributable to NXP's stockholders, divided by the diluted weighted average number of common shares outstanding during the period, adjusted for treasury shares held;

  • "EBITDA" are to NXP's earnings before financial income (expense), taxes, depreciation and amortization. "EBITDA" excludes certain tax payments that may represent a reduction in cash available to us, does not reflect any cash capital expenditure requirements for the assets being depreciated and amortized that may have to be replaced in the future, does not reflect changes in, or cash requirements for, our working capital needs and does not reflect the significant financial expense, or the cash requirements necessary to service interest payments, on our debts;

  • "adjusted EBITDA" is to EBITDA after adjustments for "restructuring costs," "stock-based compensation," "other incidental items," "other adjustments" and results related to equity accounted investees;

  • "trailing 12 month adjusted EBITDA" are to adjusted EBITDA for the last 12 months;

  • "net debt" is to the sum total of long and short term debt less total cash and cash equivalents, as reflected on the balance sheet; and

  • "non-GAAP free cash flow" is the sum of our Net cash provided by (used for) operating activities and our net Capital expenditure on property, plant and equipment, as reflected on the cash flow statement.

Reconciliations of these non-GAAP measures to the most comparable measures calculated in accordance with GAAP are provided in the financial statements portion of this release in a schedule entitled "Financial Reconciliation of GAAP to non-GAAP Results (unaudited)."

NXP provides non-GAAP measures because management believes that they are helpful to understand the underlying operating and profit structure of NXP's operations, to provide additional insight as to how management assesses the performance and allocation of resources among its various segments and because the financial community uses them in its analysis of NXP's operating and/or financial performance, historical results and projections of NXP's future operating results. NXP presents "non-GAAP gross profit," "non-GAAP research and development," "non-GAAP Selling, general and administrative," "non-GAAP Other income," "non-GAAP operating income," "non-GAAP net income/ (loss)," "non-GAAP gross margin," "non-GAAP operating margin" and "non-GAAP EPS" because these financials measures are net of "PPA effects," "restructuring costs," "stock based compensation," "other incidental items," and "other adjustments" which have affected the comparability of NXP's results over the years. NXP presents "EBITDA," "adjusted EBITDA" and "trailing 12 month adjusted EBITDA" because these financials measures enhance an investor's understanding of NXP's financial performance.

Non-GAAP measures should not be considered a substitute for any information derived or calculated in accordance with GAAP, are not intended to be measures of financial performance or condition, liquidity, profitability or operating cash flows in accordance with GAAP, and should not be considered as alternatives to net income (loss), operating income or any other performance measures determined in accordance with GAAP. These non-GAAP measures can vary from other participants in the semiconductor industry. They have limitations as analytical tools and should not be considered in isolation for analysis of NXP's financial results as reported under GAAP.

Conference Call and Webcast Information

NXP will host a conference call on February 6, 2014 at 8:00 a.m. U.S. Eastern Daylight Time (2:00 p.m. Central European Time) to discuss its fourth quarter 2013 financial results and provide an outlook for the first quarter of 2014.

Interested parties may join the conference call by dialing 1 - 877 - 703 - 6108 (within the U.S.) or 1 - 857 - 244 - 7307 (outside the U.S.). The participant pass-code is 40268473. To listen to a webcast of the event, please visit the Investor Relations section of the NXP website at www.nxp.com/investor. The webcast will be recorded and available for replay shortly after the call concludes.

About NXP Semiconductors
NXP Semiconductors N.V. (NASDAQ: NXPI) creates solutions that enable secure connections for a smarter world. Building on its expertise in High Performance Mixed Signal electronics, NXP is driving innovation in the automotive, identification and mobile industries, and in application areas including wireless infrastructure, lighting, healthcare, industrial, consumer tech and computing. NXP has operations in more than 25 countries, and posted revenue of $4.82 billion in 2013. Find out more at www.nxp.com.

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


NXP Semiconductors
Table 1: Condensed consolidated statement of operations (unaudited)

($ in millions
 except share
 data)                   Three Months Ended                 Full Year
                 ----------------------------------  ----------------------
                  Dec. 31,    Sept. 29,   Dec. 31,
                    2013        2013        2012        2013        2012
                 ----------  ----------  ----------  ----------  ----------

Revenue          $    1,293  $    1,249  $    1,116  $    4,815  $    4,358

Cost of revenue        (704)       (679)       (626)     (2,638)     (2,370)
                 ----------  ----------  ----------  ----------  ----------

Gross profit            589         570         490       2,177       1,988

Research and
 development           (168)       (163)       (171)       (639)       (628)
Selling, general
 and
 administrative        (224)       (239)       (288)       (896)       (977)
                 ----------  ----------  ----------  ----------  ----------
Total operating
 expenses              (392)       (402)       (459)     (1,535)     (1,605)

Other income
 (expense)                1           -           2           9          29
                 ----------  ----------  ----------  ----------  ----------

Operating income
 (loss)                 198         168          33         651         412

Financial income
 (expense):
  Interest income
   (expense) -
   net                  (39)        (44)        (55)       (179)       (266)
  Foreign
   exchange gain
   (loss)                31          52          31          62          28
  Gain (loss) on
   extinguishment
   of long term
   debt                 (54)          -        (114)       (114)       (161)
  Other financial
   expense              (17)         (5)        (15)        (43)        (38)
                 ----------  ----------  ----------  ----------  ----------

Income (loss)
 before taxes           119         171        (120)        377         (25)

Benefit
 (provision) for
 income taxes           (10)         (1)          7         (20)         (1)
Results relating
 to equity-
 accounted
 investees                6           2          15          58         (27)
                 ----------  ----------  ----------  ----------  ----------

Income (loss)
 from continuing
 operations             115         172         (98)        415         (53)
Income (loss) on
 discontinued
 operations, net
 of tax                   -           -           -           -           1
                 ----------  ----------  ----------  ----------  ----------
Net income (loss)       115         172         (98)        415         (52)
Net (income) loss
 attributable to
 non-controlling
 interests              (19)        (17)        (18)        (67)        (63)
                 ----------  ----------  ----------  ----------  ----------
Net income (loss)
 attributable to
 stockholders            96         155        (116)        348        (115)

Earnings per
 share data:
Net income (loss)
 attributable to
 stockholders per
 common share

Basic earnings
 per common share
 in $            $     0.39  $     0.62  $    (0.47) $     1.40  $    (0.46)
Diluted earnings
 per common share
 in $            $     0.37  $     0.60  $    (0.47) $     1.36  $    (0.46)

Weighted average
 number of shares
 of common stock
 (in thousands):
Basic               246,842     248,794     248,505     248,526     248,064
Diluted             256,162     256,777     248,505     255,050     248,064



NXP Semiconductors
Table 2: Condensed consolidated balance sheet (unaudited)

($ in millions)                                          As of
                                          ----------------------------------
                                           Dec. 31,    Sept. 29,   Dec. 31,
                                             2013        2013        2012
                                          ----------  ----------  ----------

Current assets:
  Cash and cash equivalents               $      670  $      941  $      617
  Accounts receivable - net                      501         530         459
  Other receivables                               41          52          51
  Assets held for sale                            13           9          10
  Inventories                                    740         754         715
  Other current assets                           127         127         102
                                          ----------  ----------  ----------
Total current assets                           2,092       2,413       1,954

Non-current assets:
  Investments in equity-accounted
   investees                                      52          50          45
  Other non-current assets                       144         139         128
  Property, plant and equipment                1,048       1,032       1,070
  Identified intangible assets                   755         792         965
  Goodwill                                     2,358       2,318       2,277
                                          ----------  ----------  ----------
Total non-current assets                       4,357       4,331       4,485

Total assets                                   6,449       6,744       6,439

Current liabilities:
  Accounts payable                               544         545         562
  Liabilities held for sale                        1           -           -
  Accrued liabilities                            608         595         627
  Short-term debt                                 40         465         307
                                          ----------  ----------  ----------
Total current liabilities                      1,193       1,605       1,496

Non-current liabilities:
  Long-term debt                               3,281       3,232       3,185
  Other non-current liabilities                  429         469         474
                                          ----------  ----------  ----------
Total non-current liabilities                  3,710       3,701       3,659

Non-controlling interests                        245         236         235
Stockholders' equity                           1,301       1,202       1,049
                                          ----------  ----------  ----------
  Total equity                                 1,546       1,438       1,284
  Total liabilities and equity                 6,449       6,744       6,439



NXP Semiconductors
Table 3: Condensed consolidated statement of cash flows (unaudited)

($ in millions)              Three Months Ended              Full Year
                      -------------------------------  --------------------
                       Dec. 31,  Sept. 29,   Dec. 31,
                         2013       2013       2012       2013       2012
                      ---------  ---------  ---------  ---------  ---------

Cash Flows from
 operating activities
Net income (loss)     $     115  $     172  $     (98) $     415  $     (52)
(Income) loss from
 discontinued
 operations, net of
 tax                  $       -          -          -  $       -         (1)
Adjustments to
 reconcile net income
 (loss):
  Depreciation and
   amortization             113        137        132        514        533
  Stock-based
   compensation              31         20         16         88         52
  Net (gain) loss on
   sale of assets             -          -         (1)        (2)       (20)
  (Gain) loss on
   extinguishment of
   debt                      54          -        114        114        161
  Results relating to
   equity accounted
   investees                 (6)        (2)       (15)       (58)        27
Changes in operating
 assets and
 liabilities:
  (Increase) decrease
   in trade
   receivables               37        (20)        18        (24)        (6)
  (Increase) decrease
   in inventories            13         (5)       (41)       (22)       (61)
  Increase (decrease)
   in trade payables         (4)        17         10        (25)       101
  (Increase) decrease
   in other
   receivables               10          3         33          1         47
  Increase (decrease)
   in other payables        (21)        29         34        (53)       (35)
  Changes in deferred
   taxes                      1          -         (8)         3        (18)
Exchange differences        (31)       (52)       (31)       (62)       (28)
Other items                   2         (1)         1          2         22
                      ---------  ---------  ---------  ---------  ---------
Net cash provided by
 (used for) operating
 activities                 314        298        164        891        722

Cash flows from
 investing
 activities:
  Purchase of
   identified
   intangible assets         (8)       (10)        (8)       (35)       (29)
  Capital
   expenditures on
   property, plant
   and equipment            (71)       (54)       (46)      (215)      (251)
  Proceeds from
   disposals of
   property, plant
   and equipment              1          -          1          6          2
  Proceeds from sale
   of interests in
   businesses                 3          -         (1)         3         26
  Purchase of
   interests in
   businesses                 -         (1)         -         (1)        (2)
  Proceeds from
   return of equity
   investment                 3          -         12          4         12
  Other                      (3)        (1)        (3)        (2)        (1)
                      ---------  ---------  ---------  ---------  ---------
Net cash (used for)
 provided by
 investing activities       (75)       (66)       (45)      (240)      (243)

Cash flows from
 financing
 activities:
  Net (repayments)
   borrowings of
   short-term debt           (2)        (7)         -        (11)         -
  Repayments under
   the revolving
   credit facility            -       (175)         -       (610)      (530)
  Amounts drawn under
   the revolving
   credit facility          150          -        100        530        760
  Repurchase of long-
   term debt               (575)         -       (802)    (2,429)    (1,676)
  Principal payments
   on long-term debt         (7)        (2)        (6)       (18)       (20)
  Net proceeds from
   the issuance of
   long-term debt             1        495        493      2,228        958
  Dividends paid to
   non-controlling
   interests                 (1)       (47)         -        (48)       (40)
  Purchase of non-
   controlling
   interests (shares)       (12)         -          -        (12)         -
  Cash proceeds from
   exercise of stock
   options                   98         29          6        177         14
  Purchase of
   treasury shares         (163)      (159)         -       (405)       (40)
                      ---------  ---------  ---------  ---------  ---------
Net cash provided by
 (used for) financing
 activities                (511)       134       (209)      (598)      (574)

Net cash provided by
 (used for)
 continuing
 operations                (272)       366        (90)        53        (95)

Cash flows from
 discontinued
 operations:
  Net cash provided
   by (used for)
   operating
   activities                 -          -          -          -          -
  Net cash provided
   by (used for)
   investing
   activities                 -          -          -          -        (45)
  Net cash provided
   by (used for)
   financing
   activities                 -          -          -          -          -
                      ---------  ---------  ---------  ---------  ---------
Net cash provided by
 (used for)
 discontinued
 operations                   -          -          -          -        (45)
                      ---------  ---------  ---------  ---------  ---------
Net cash provided by
 (used for) contining
 and discontinued
 operations                (272)       366        (90)        53       (140)

Effect of changes in
 exchange rates on
 cash positions               1          6          5          -         14
                      ---------  ---------  ---------  ---------  ---------
Increase (decrease)
 in cash and cash
 equivalents               (271)       372        (85)        53       (126)
Cash and cash
 equivalents at
 beginning of period        941        569        702        617        743
                      ---------  ---------  ---------  ---------  ---------
Cash and cash
 equivalents at end
 of period                  670        941        617        670        617


Non-Cash Financing
Exchange of Term Loan
 C for Term Loan D          400          -          -        400          -



NXP Semiconductors
Table 4: Reconciliation of GAAP to non-GAAP Segment Results (unaudited)

($ in millions)                 Three Months Ended            Full Year
                          -----------------------------  ------------------
                          Dec. 31,  Sept. 29,  Dec. 31,
                            2013       2013      2012      2013      2012
                          --------  ---------  --------  --------  --------

High Performance Mixed
 Signal (HPMS)                 957        922       785     3,533     2,976
Standard Products              294        291       287     1,145     1,168
                          --------  ---------  --------  --------  --------
  Product Revenue            1,251      1,213     1,072     4,678     4,144
    Corporate and Other         42         36        44       137       214
                          --------  ---------  --------  --------  --------
Total Revenue             $  1,293  $   1,249  $  1,116  $  4,815  $  4,358
                          ========  =========  ========  ========  ========



HPMS Revenue              $    957  $     922  $    785  $  3,533  $  2,976
  Percent of Total Revenue    74.0%      73.8%     70.3%     73.4%     68.3%
  HPMS segment GAAP gross
   profit                      523        493       427     1,905     1,656
    PPA effects                 (3)         -         -        (3)       (9)
    Restructuring               (3)        (4)       (1)       (5)       (1)
    Stock based
     compensation               (2)        (1)        -        (6)       (1)
    Other incidentals          (10)        (1)        -       (12)       (3)
    Other adjustments            -          -         -       (46)       46
                          --------  ---------  --------  --------  --------
  HPMS segment non-GAAP
   gross profit           $    541  $     499  $    428  $  1,977  $  1,624
                          ========  =========  ========  ========  ========

    HPMS segment GAAP
     gross margin             54.6%      53.5%     54.4%     53.9%     55.6%
    HPMS segment non-GAAP
     gross margin             56.5%      54.1%     54.5%     56.0%     54.6%

  HPMS segment GAAP
   operating profit            227        184       105       712       479
    PPA effects                (26)       (46)      (45)     (163)     (190)
    Restructuring               (2)        (4)      (26)       (4)      (24)
    Stock based
     compensation              (24)       (16)      (12)      (68)      (37)
    Other incidentals          (11)        (1)       (3)      (15)        2
    Other adjustments            -          -         -       (46)       46
                          --------  ---------  --------  --------  --------
  HPMS segment non-GAAP
   operating profit       $    290  $     251  $    191  $  1,008  $    682
                          ========  =========  ========  ========  ========

    HPMS segment GAAP
     operating margin         23.7%      20.0%     13.4%     20.2%     16.1%
    HPMS segment non-GAAP
     operating margin         30.3%      27.2%     24.3%     28.5%     22.9%



Standard Products Revenue $    294  $     291  $    287  $  1,145  $  1,168
  Percent of Total Revenue    22.7%      23.3%     25.7%     23.8%     26.8%
  Standard Products
   segment GAAP gross
   profit                       66         81        70       285       346
    PPA effects                 (1)         -         -        (2)       (3)
    Restructuring              (18)        (2)      (15)      (16)      (15)
    Stock based
     compensation               (1)         -        (1)       (2)       (1)
    Other incidentals           (6)        (2)       (1)      (12)       (1)
                          --------  ---------  --------  --------  --------
  Standard Products
   segment non-GAAP gross
   profit                 $     92  $      85  $     87  $    317  $    366
                          ========  =========  ========  ========  ========

    Standard Products
     segment GAAP gross
     margin                   22.4%      27.8%     24.4%     24.9%     29.6%
    Standard Products
     segment non-GAAP
     gross margin             31.3%      29.2%     30.3%     27.7%     31.3%

  Standard Products
   segment GAAP operating
   profit                        2         21         2        39        89
    PPA effects                (15)       (14)      (15)      (59)      (60)
    Restructuring              (18)        (2)      (19)      (16)      (19)
    Stock based
     compensation               (7)        (4)       (4)      (19)      (11)
    Other incidentals           (6)        (2)       (1)      (12)        -
                          --------  ---------  --------  --------  --------
  Standard Products
   segment non-GAAP
   operating profit       $     48  $      43  $     41  $    145  $    179
                          ========  =========  ========  ========  ========

    Standard Products
     segment GAAP
     operating margin          0.7%       7.2%      0.7%      3.4%      7.6%
    Standard Products
     segment non-GAAP
     operating margin         16.3%      14.8%     14.3%     12.7%     15.3%



Corporate and Other
 Revenue                  $     42  $      36  $     44  $    137  $    214
  Percent of Total Revenue     3.3%       2.9%      4.0%      2.8%      4.9%
  Corporate and Other
   segment GAAP gross
   profit                        -         (4)       (7)      (13)      (14)
    PPA effects                 (2)        (2)       (2)       (9)       (8)
    Restructuring                -         (1)       (4)       (3)       (7)
    Stock based
     compensation                -          -         -         -         -
    Other incidentals           (1)        (2)       (1)       (5)       (5)
                          --------  ---------  --------  --------  --------
  Corporate and Other
   segment non-GAAP gross
   profit                 $      3  $       1  $      -  $      4  $      6
                          ========  =========  ========  ========  ========

    Corporate and Other
     segment GAAP gross
     margin                    0.0%     -11.1%    -15.9%     -9.5%     -6.5%
    Corporate and Other
     segment non-GAAP
     gross margin              7.1%       2.8%      0.0%      2.9%      2.8%

  Corporate and Other
   segment GAAP operating
   profit                      (31)       (37)      (74)     (100)     (156)
    PPA effects                 (6)        (6)       (6)      (24)      (23)
    Restructuring               (3)       (17)      (53)      (20)      (68)
    Stock based
     compensation                -          -         -        (1)       (4)
    Other incidentals           (8)        (5)       (8)      (22)      (34)
                          --------  ---------  --------  --------  --------
  Corporate and Other
   segment non-GAAP
   operating profit       $    (14) $      (9) $     (7) $    (33) $    (27)
                          ========  =========  ========  ========  ========

    Corporate and Other
     segment GAAP
     operating margin        -73.8%    -102.8%   -168.2%    -73.0%    -72.9%
    Corporate and Other
     segment non-GAAP
     operating margin        -33.3%     -25.0%    -15.9%    -24.1%    -12.6%



NXP Semiconductors
Table 5: Financial Reconciliation of GAAP to non-GAAP Results (unaudited)

($ in millions
 except share data)        Three Months Ended               Full Year
                    --------------------------------  ---------------------
                    Dec. 31,     Sept. 29,  Dec. 31,
                      2013          2013      2012      2013         2012
                    --------     ---------  --------  --------     --------

Revenue             $  1,293     $   1,249  $  1,116  $  4,815     $  4,358

GAAP Gross profit   $    589     $     570  $    490  $  2,177     $  1,988
  PPA effects             (6)           (2)       (2)      (14)         (20)
  Restructuring          (21)           (7)      (20)      (24)         (23)
  Stock Based
   Compensation           (3)           (1)       (1)       (8)          (2)
  Other incidentals      (17)           (5)       (2)      (29)          (9)
  Other adjustments        -             -         -       (46)          46
                    --------     ---------  --------  --------     --------
Non-GAAP Gross
 profit             $    636     $     585  $    515  $  2,298     $  1,996
                    ========     =========  ========  ========     ========

GAAP Gross margin       45.6%         45.6%     43.9%     45.2%        45.6%

Non-GAAP Gross
 margin                 49.2%         46.8%     46.1%     47.7%        45.8%

  GAAP Research and
   development      $   (168)    $    (163) $   (171) $   (639)    $   (628)
    PPA effects            -             -         -         -            -
    Restructuring          1             -       (23)        1          (22)
    Stock based
     compensation         (5)           (3)       (2)      (13)          (5)
    Other
     incidentals          (1)            -        (1)       (3)         (12)
                    --------     ---------  --------  --------     --------
  Non-GAAP Research
   and development  $   (163)    $    (160) $   (145) $   (624)    $   (589)
                    ========     =========  ========  ========     ========

  GAAP Selling,
   general and
   administrative   $   (224)    $    (239) $   (288) $   (896)    $   (977)
    PPA effects          (41)          (64)      (64)     (232)        (253)
    Restructuring         (3)          (16)      (55)      (17)         (67)
    Stock based
     compensation        (23)          (16)      (13)      (67)         (45)
    Other
     incidentals          (7)           (3)       (8)      (17)         (32)
                    --------     ---------  --------  --------     --------
  Non-GAAP Selling,
   general and
   administrative   $   (150)    $    (140) $   (148) $   (563)    $   (580)
                    ========     =========  ========  ========     ========

  GAAP Other income
   (expense)        $      1     $       -  $      2  $      9     $     29
    PPA effects            -             -         -         -            -
    Restructuring          -             -         -         -            1
    Other
     incidentals           -             -        (1)        -           21
                    --------     ---------  --------  --------     --------
  Non-GAAP Other
   income (expense) $      1     $       -  $      3  $      9     $      7
                    ========     =========  ========  ========     ========

GAAP Operating
 income (loss)      $    198     $     168  $     33  $    651     $    412
  PPA effects            (47)          (66)      (66)     (246)        (273)
  Restructuring          (23)          (23)      (98)      (40)        (111)
  Stock based
   compensation          (31)          (20)      (16)      (88)         (52)
  Other incidentals      (25)           (8)      (12)      (49)         (32)
  Other adjustments        -             -         -       (46)          46
                    --------     ---------  --------  --------     --------
Non-GAAP Operating
 income (loss)      $    324     $     285  $    225  $  1,120     $    834
                    ========     =========  ========  ========     ========

GAAP Operating
 margin                 15.3%         13.5%      3.0%     13.5%         9.5%

Non-GAAP Operating
 margin                 25.1%         22.8%     20.2%     23.3%        19.1%

GAAP Financial
 income (expense)   $    (79)    $       3  $   (153) $   (274)    $    437
  Foreign exchange
   gain (loss) on
   debt                   31            52        31        62           28
  Gain (loss) on
   extinguishment of
   long term debt        (54)            -      (114)     (114)        (161)
  Other financial
   expense               (17)           (5)      (15)      (43)         (38)
                    --------     ---------  --------  --------     --------
Non-GAAP Financial
 income (expense)   $    (39)    $     (44) $    (55) $   (179)    $   (266)
                    ========     =========  ========  ========     ========

GAAP Income tax
 benefit (provision)$    (10)    $      (1) $      7  $    (20)    $     (1)
  Other adjustments        3             4        17        14           27
                    --------     ---------  --------  --------     --------
Non-GAAP Cash tax
 (expense)          $    (13)    $      (5) $    (10) $    (34)    $    (28)
                    ========     =========  ========  ========     ========

GAAP Results
 relating to equity-
 accounted investees$      6     $       2  $     15  $     58     $    (27)
  Other adjustments        6             2        15        58          (27)
                    --------     ---------  --------  --------     --------
Non-GAAP Results
 relating to equity-
 accounted investees$      -     $       -  $      -  $      -            -
                    ========     =========  ========  ========     ========

GAAP Income (loss)
 from continuing
 operations         $    115     $     172  $    (98) $    415     $    (53)
  PPA effects            (47)          (66)      (66)     (246)        (273)
  Restructuring          (23)          (23)      (98)      (40)        (111)
  Stock based
   compensation          (31)          (20)      (16)      (88)         (52)
  Other incidentals      (25)           (8)      (12)      (49)         (32)
  Other adjustments      (31)(1)        53       (66)      (69)(1)     (125)
                    --------     ---------  --------  --------     --------
Non-GAAP Income
 (loss) from
 continuing
 operations         $    272     $     236  $    160  $    907     $    540
                    ========     =========  ========  ========     ========


GAAP income (loss)
 on discontinued
 operations of tax  $      -             -         -  $      -     $      1
  Other adjustments $      -             -         -  $      -     $      1
                    --------     ---------  --------  --------     --------
Non-GAAP income
 (loss) on
 discontinued
 operations                -             -         -         -            -
                           -
GAAP Net income
 (loss) attributable
 to stockholders    $     96     $     155  $   (116) $    348     $   (115)
  PPA effects            (47)          (66)      (66)     (246)        (273)
  Restructuring          (23)          (23)      (98)      (40)        (111)
  Stock based
   compensation          (31)          (20)      (16)      (88)         (52)
  Other incidentals      (25)           (8)      (12)      (49)         (32)
  Other adjustments      (31)           53       (66)      (69)        (124)
                    --------     ---------  --------  --------     --------
Non-GAAP Net income
 (loss) attributable
 to stockholders    $    253     $     219  $    142  $    840     $    477
                    ========     =========  ========  ========     ========

GAAP Weighted
 average shares -
 diluted             256,162       256,777   248,505   255,050      248,526
  Non-GAAP
   Adjustment              -             -     5,474         -        5,007
                    --------     ---------  --------  --------     --------
Non-GAAP Weighted
 average shares -
 diluted             256,162       256,777   253,979   255,050      253,071
                    ========     =========  ========  ========     ========

GAAP Diluted net
 income (loss)
 attributable to
 stockholders per
 share              $   0.37     $    0.60  $  (0.47) $   1.36     $  (0.46)
Non-GAAP Diluted net
 income (loss)
 attributable to
 stockholders per
 share              $   0.99     $    0.85  $   0.56  $   3.29     $   1.88

(1)  Includes: During 4Q13: Foreign exchange gain on debt: $31 million; Loss
     on extinguishment of long-term debt: ($54) million; Other financial
     expense: ($17) million; Results relating to equity-accounted investees:
     $6 million; and difference between book and cash income taxes: $3
     million; for the full year 2013: Other adjustments Cost of Revenue
     ($46) million; Foreign exchange gain on debt: $62 million; Loss on
     extinguishment of long-term debt: ($114) million; Other financial
     expense: ($43) million; Results relating to equity-accounted investees:
     $58 million; and difference between book and cash income taxes: $14
     million.



NXP Semiconductors
Table 6: Adjusted EBITDA and Free Cash Flow (unaudited)

($ in millions)                 Three Months Ended            Full Year
                          -----------------------------  ------------------
                          Dec. 31,  Sept. 29,  Dec. 31,
                            2013       2013      2012      2013      2012
                          --------  ---------  --------  --------  --------

Net Income                $    115  $     172  $    (98) $    415  $    (52)
                          ========  =========  ========  ========  ========
                                                         $      -
Income (loss) from
 discontinued operations  $      -          -         -  $      -  $      1
                          --------  ---------  --------  --------  --------
Income (loss) from
 continuing operations    $    115  $     172  $    (98) $    415  $    (53)

Reconciling items to
 EBITDA
  Financial (income)
   expense                      79         (3)      153       274       437
  (Benefit) provision for
   income taxes                 10          1        (7)       20         1
  Depreciation                  61         63        63       246       247
  Amortization                  52         74        69       268       286
                          --------  ---------  --------  --------  --------
EBITDA                    $    317  $     307  $    180  $  1,223  $    918
                          ========  =========  ========  ========  ========

Reconciling items to
 adjusted EBITDA
  Results of equity-
   accounted investees          (6)        (2)      (15)      (58)       27
  Restructuring (1)             21         17        98        31       109
  Stock based
   compensation                 31         20        16        88        52
  Other incidental items
   (1)                          24          8        11        46        30
  Other adjustments              -          -         -        46       (46)
                          --------  ---------  --------  --------  --------
Adjusted EBITDA           $    387  $     350  $    290  $  1,376  $  1,090
                          ========  =========  ========  ========  ========

Trailing twelve month
 adjusted EBITDA          $  1,376  $   1,279  $  1,090  $  1,376  $  1,090


(1) Excluding depreciation property, plant and equipment and amortization
 software related to:
  Restructuring                  2          6         -         9         2
  Other incidental items         1          -         1         3         2



Net cash provided by
 (used for) operating
 activities               $    314  $     298  $    164  $    891  $    722
                          ========  =========  ========  ========  ========
Net capital expenditures
 on property, plant and
 equipment                     (70)       (54)      (45)     (209)     (249)
                          --------  ---------  --------  --------  --------

Non-GAAP free cash flow   $    244  $     244  $    119  $    682  $    473
Non-GAAP free cash flow
 as a percent of Revenue        19%        20%       11%       14%       11%

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The IETF draft standard for M2M certificates is a security solution specifically designed for the demanding needs of IoT/M2M applications. In his session at @ThingsExpo, Brian Romansky, VP of Strategic Technology at TrustPoint Innovation, will explain how M2M certificates can efficiently enable confidentiality, integrity, and authenticity on highly constrained devices.
In the world of DevOps there are ‘known good practices’ – aka ‘patterns’ – and ‘known bad practices’ – aka ‘anti-patterns.' Many of these patterns and anti-patterns have been developed from real world experience, especially by the early adopters of DevOps theory; but many are more feasible in theory than in practice, especially for more recent entrants to the DevOps scene. In this power panel at @DevOpsSummit at 18th Cloud Expo, moderated by DevOps Conference Chair Andi Mann, panelists will dis...
See storage differently! Storage performance problems have only gotten worse and harder to solve as applications have become largely virtualized and moved to a cloud-based infrastructure. Storage performance in a virtualized environment is not just about IOPS, it is about how well that potential performance is guaranteed to individual VMs for these apps as the number of VMs keep going up real time. In his session at 18th Cloud Expo, Dhiraj Sehgal, in product and marketing at Tintri, will discu...
trust and privacy in their ecosystem. Assurance and protection of device identity, secure data encryption and authentication are the key security challenges organizations are trying to address when integrating IoT devices. This holds true for IoT applications in a wide range of industries, for example, healthcare, consumer devices, and manufacturing. In his session at @ThingsExpo, Lancen LaChance, vice president of product management, IoT solutions at GlobalSign, will teach IoT developers how t...
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, will provide tips on how to be successful in large scale machine lear...
SYS-CON Events announced today that Peak 10, Inc., a national IT infrastructure and cloud services provider, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Peak 10 provides reliable, tailored data center and network services, cloud and managed services. Its solutions are designed to scale and adapt to customers’ changing business needs, enabling them to lower costs, improve performance and focus inter...