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NXP Semiconductors Reports First Quarter 2014 Results

EINDHOVEN, THE NETHERLANDS -- (Marketwired) -- Apr 23, 2014 -- NXP Semiconductors N.V. (NASDAQ: NXPI)

                                                                  Q1 2014   
                                                              --------------
Revenue                                                       $1,246 million
GAAP Gross margin                                                  47.0%    
GAAP Operating margin                                              14.7%    
GAAP Diluted earnings per share                                    $0.43    
                                                                            
Non-GAAP Gross margin                                              49.5%    
Non-GAAP Operating margin                                          24.2%    
Non-GAAP Diluted earnings per share                                $0.98    

NXP Semiconductors N.V. (NASDAQ: NXPI) today reported financial results for the first quarter of 2014, ended March 30, 2014, and provided guidance for the second quarter 2014.

"Our results for the first quarter of 2014 were very good, above the mid-point of our guidance, as NXP delivered Product revenue of $1,207 million, a 14 percent increase from the prior year period and a 4 percent sequential decline. Total NXP revenue in the first quarter was $1,246 million, a 15 percent increase year-on-year, and a 4 percent sequential decline, slightly better than typical seasonal decline," said Richard Clemmer, NXP Chief Executive Officer.

"Our HPMS segment performed better than expected during the first quarter, resulting in 18 percent year-on-year growth, though declining about 5 percent sequentially -- this after a better than seasonally strong fourth quarter. Performance within our Automotive business was better than our initial expectations, resulting in 20 percent year-on-year growth primarily due to better than expected demand for in-vehicle networking solutions. Similarly, within our Identification business, revenue performance was better than planned resulting in 6 percent year-on-year growth due to improved demand for infrastructure and mobile payment products. In our Portable & Computing business, our results were near the high end of expectations, reflecting 45 percent growth versus the prior year. Within our Industrial & Infrastructure business, revenue performance was slightly below plan but still up 19 percent year-on-year. Within our Standard products segment, revenue performance was incrementally better than originally planned.

"During the quarter, non-GAAP, diluted earnings per share were $0.98, above the mid-point of guidance due to the combination of better product revenue; positive product mix; and offset by slightly higher operating expenses. Taken together, NXP generated $223 million in free cash flow during the quarter, representing 18 percent non-GAAP free cash flow margin. Additionally, we repurchased 8.3 million shares during the quarter, executing on our commitment to aggressively and opportunistically return cash to shareholders via our share repurchase program. In summary the first quarter results were better than anticipated, and we believe NXP is ideally positioned to continue to deliver solid revenue growth, strong earnings and robust free cash flow in future periods," said Clemmer.

                                                                            
Summary of First Quarter 2014 Results ($ millions, except EPS, unaudited)   
                                                                            
----------------------------------------------------------------------------
                                                                            
                                  Q1 2014  Q4 2013  Q1 2013   Q - Q   Y - Y 
                                  -------  -------  -------  ------  ------ 
                                                                            
Product Revenue                   $ 1,207  $ 1,251  $ 1,055      -4%     14%
                                                                            
Corporate & Other                 $    39  $    42  $    30      -7%     30%
                                  -------  -------  -------                 
                                                                            
Total Revenue                     $ 1,246  $ 1,293  $ 1,085      -4%     15%
                                                                            
GAAP Gross Profit                 $   585  $   589  $   483      -1%     21%
                                                                            
  Gross Profit Adjustments (1)    $   (32) $   (47) $   (54)                
                                                                            
Non-GAAP Gross Profit             $   617  $   636  $   537      -3%     15%
                                                                            
  GAAP Gross Margin                    47%      46%      45%                
                                                                            
  Non-GAAP Gross Margin                50%      49%      50%                
                                                                            
GAAP Operating Income             $   183  $   198  $   115      -8%     59%
                                                                            
  Operating Income Adjustments                                              
   (1)                               (118)    (126)    (140)                
                                                                            
Non-GAAP Operating Income         $   301  $   324  $   255      -7%     18%
                                                                            
  GAAP Operating Margin                15%      15%      11%                
                                                                            
  Non-GAAP Operating Margin            24%      25%      24%                
                                                                            
GAAP Net Income / (Loss)          $   110  $    96  $   (14)     15%     NM 
                                                                            
  Net Income Adjustments (1)         (139)    (157)    (200)                
                                                                            
Non-GAAP Net Income / (Loss)      $   249  $   253  $   186      -2%     34%
                                                                            
GAAP EPS                          $  0.43  $  0.37  $ (0.06)     16%     NM 
  EPS Adjustments (1)             $ (0.55) $ (0.62) $ (0.78)                
Non-GAAP EPS                      $  0.98  $  0.99  $  0.72      -1%     36%
                                                                            
----------------------------------------------------------------------------
                                                                            
1. Please see "Discussion of GAAP to non-GAAP Reconciliation" following in  
this release.                                                               
                                                                            
                                                                            
Supplemental Information ($ millions, unaudited)                            
                                                                            
----------------------------------------------------------------------------
                                                                            
                                  Q1     Q4     Q1    Percent               
                                 2014   2013   2013  Q1 Total  Q - Q  Y - Y 
                                ------ ------ ------ --------  -----  ----- 
                                                                            
 Automotive                     $  276 $  275 $  230       22%     0%    20%
                                                                            
 Identification                 $  319 $  329 $  300       26%    -3%     6%
                                                                            
 Infrastructure & Industrial    $  182 $  194 $  153       15%    -6%    19%
                                                                            
 Portable & Computing           $  135 $  159 $   93       11%   -15%    45%
                                ------ ------ ------ --------               
                                                                            
High Performance Mixed Signal                                               
 (HPMS)                         $  912 $  957 $  776       73%    -5%    18%
                                                                            
Standard Products (STDP)        $  295 $  294 $  279       24%     0%     6%
                                ------ ------ ------ --------               
                                                                            
Product Revenue                 $1,207 $1,251 $1,055       97%    -4%    14%
                                                                            
Corporate & Other               $   39 $   42 $   30        3%    -7%    30%
                                ------ ------ ------ --------               
                                                                            
Total Revenue                   $1,246 $1,293 $1,085      100%    -4%    15%
                                                                            
----------------------------------------------------------------------------
                                                                            
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 First Quarter of 2014:

                                                                            
Guidance for the Second Quarter 2014: ($ millions, except share count and   
 EPS)(1)                                                                    
                                                                            
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                        Guidance            
                                                         Range              
                                               Low        Mid        High   
                                            ---------  ---------  --------- 
                                                                            
Product Revenue                             $   1,261  $   1,286  $   1,310 
                                                                            
  Q-Q                                               4%         7%         9%
                                                                            
Other Revenue                               $      40  $      40  $      40 
                                            ---------  ---------  --------- 
                                                                            
Total Revenue                               $   1,301  $   1,326  $   1,350 
                                                                            
  Q-Q                                               4%         6%         8%
                                                                            
Non-GAAP Gross Profit                       $     622  $     639  $     656 
                                                                            
  Non-GAAP Gross Margin                            48%        48%        49%
                                                                            
Non-GAAP Operating Income                   $     312  $     324  $     337 
                                                                            
  Non-GAAP Operating Margin                        24%        24%        25%
                                                                            
  Interest Expense                          $      35  $      35  $      35 
                                                                            
  Cash Taxes                                $       8  $       8  $       8 
                                                                            
  Non-controlling Interest                  $      17  $      17  $      17 
                                            ---------  ---------  --------- 
                                                                            
  Non-GAAP Net Income                       $     252  $     264  $     277 
                                                                            
Ave. Diluted Shares                               252        252        252 
                                                                            
  Non - GAAP EPS                            $    1.00  $    1.05  $    1.10 
                                                                            
----------------------------------------------------------------------------
                                                                            
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:

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 April 24, 2014 at 8:00 a.m. U.S. Eastern Daylight Time (2:00 p.m. Central European Time) to discuss its first quarter 2014 financial results and provide an outlook for the second quarter of 2014.

Interested parties may join the conference call by dialing 1 - 800 - 638 - 4817 (within the U.S.) or 1 - 617 - 614 - 3943 (outside the U.S.). The participant pass-code is 49614953. 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       
                                            ------------------------------- 
                                            March 30,   Dec. 31,  March 31, 
                                               2014       2013       2013   
                                            ---------  ---------  --------- 
                                                                            
Revenue                                     $   1,246  $   1,293  $   1,085 
                                                                            
Cost of revenue                                  (661)      (704)      (602)
                                            ---------  ---------  --------- 
                                                                            
Gross profit                                      585        589        483 
                                                                            
Research and development                         (189)      (168)      (153)
Selling, general and administrative              (213)      (224)      (222)
                                            ---------  ---------  --------- 
Total operating expenses                         (402)      (392)      (375)
                                                                            
Other income (expense)                              -          1          7 
                                            ---------  ---------  --------- 
                                                                            
Operating income (loss)                           183        198        115 
                                                                            
Financial income (expense):                                                 
  Interest income (expense) - net                 (34)       (39)       (49)
  Foreign exchange gain (loss)                     (2)        31        (53)
  Gain (loss) on extinguishment of long                                     
   term debt                                       (3)       (54)       (37)
  Other financial expense                          (6)       (17)       (13)
                                            ---------  ---------  --------- 
                                                                            
Income (loss) before taxes                        138        119        (37)
                                                                            
Benefit (provision) for income taxes              (15)       (10)       (11)
Results relating to equity-accounted                                        
 investees                                          1          6         47 
                                            ---------  ---------  --------- 
                                                                            
Net income (loss)                                 124        115         (1)
Net (income) loss attributable to non-                                      
 controlling interests                            (14)       (19)       (13)
                                            ---------  ---------  --------- 
Net income (loss) attributable to                                           
 stockholders                                     110         96        (14)
                                                                            
Earnings per share data:                                                    
Net income (loss) attributable to                                           
 stockholders per common share                                              
                                                                            
Basic earnings per common share in $        $    0.45  $    0.39  $   (0.06)
Diluted earnings per common share in $      $    0.43  $    0.37  $   (0.06)
                                                                            
Weighted average number of shares of common                                 
 stock (in thousands):                                                      
Basic                                         245,300    246,842    249,668 
Diluted                                       255,167    256,162    249,668 
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 2: Condensed consolidated balance sheet (unaudited)                   
                                                                            
($ in millions)                                            As of            
                                               -----------------------------
                                               March 30,  Dec. 31, March 31,
                                                  2014      2013      2013  
                                               --------- --------- ---------
                                                                            
Current assets:                                                             
  Cash and cash equivalents                    $     720 $     670 $     595
  Accounts receivable - net                          556       501       464
  Other receivables                                   34        41        48
  Assets held for sale                                11        13        10
  Inventories                                        740       740       730
  Other current assets                               126       127       109
                                               --------- --------- ---------
Total current assets                               2,187     2,092     1,956
                                                                            
Non-current assets:                                                         
  Investments in equity-accounted investees           53        52        46
  Other non-current assets                           143       144       131
  Property, plant and equipment                    1,045     1,048     1,039
  Identified intangible assets                       707       755       888
  Goodwill                                         2,354     2,358     2,221
                                               --------- --------- ---------
Total non-current assets                           4,302     4,357     4,325
                                                                            
Total assets                                       6,489     6,449     6,281
                                                                            
Current liabilities:                                                        
  Accounts payable                                   558       544       513
  Liabilities held for sale                            1         1         -
  Accrued liabilities                                639       608       599
  Short-term debt                                     37        40       291
                                               --------- --------- ---------
Total current liabilities                          1,235     1,193     1,403
                                                                            
Non-current liabilities:                                                    
  Long-term debt                                   3,546     3,281     3,149
  Other non-current liabilities                      425       429       454
                                               --------- --------- ---------
Total non-current liabilities                      3,971     3,710     3,603
                                                                            
Non-controlling interests                            259       245       248
Stockholders' equity                               1,024     1,301     1,027
                                               --------- --------- ---------
Total equity                                       1,283     1,546     1,275
                                                                            
Total liabilities and equity                       6,489     6,449     6,281
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 3: Condensed consolidated statement of cash flows (unaudited)         
                                                                            
($ in millions)                                    Three Months Ended       
                                            ------------------------------- 
                                            March 30,   Dec. 31,  March 31, 
                                               2014       2013       2013   
                                            ---------  ---------  --------- 
                                                                            
Cash Flows from operating activities                                        
Net income (loss)                           $     124  $     115  $      (1)
Adjustments to reconcile net income (loss):                                 
  Depreciation and amortization                   102        113        132 
  Stock-based compensation                         28         31         17 
  Net (gain) loss on sale of assets                 -          -         (1)
  (Gain) loss on extinguishment of debt             3         54         37 
  Results relating to equity accounted                                      
   investees                                       (1)        (6)       (47)
Changes in operating assets and                                             
 liabilities:                                                               
  (Increase) decrease in trade receivables        (55)        37        (15)
  (Increase) decrease in inventories                1         13        (20)
  Increase (decrease) in trade payables            14         (4)       (44)
  (Increase) decrease in other receivables         12         10         (8)
  Increase (decrease) in other payables            35        (21)        17 
  Changes in deferred taxes                         3          1          1 
Exchange differences                                2        (31)        53 
Other items                                         5          2         (2)
                                            ---------  ---------  --------- 
Net cash provided by (used for) operating                                   
 activities                                       273        314        119 
                                                                            
Cash flows from investing activities:                                       
  Purchase of identified intangible assets         (9)        (8)        (6)
  Capital expenditures on property, plant                                   
   and equipment                                  (51)       (71)       (41)
  Proceeds from disposals of property,                                      
   plant and equipment                              1          1          2 
  Proceeds from disposals of assets held                                    
   for sale                                         3          -          - 
  Proceeds from sale of interests in                                        
   businesses                                       -          3          - 
  Proceeds from return of equity investment         -          3          - 
  Other                                             -         (3)         2 
                                            ---------  ---------  --------- 
Net cash (used for) provided by investing                                   
 activities                                       (56)       (75)       (43)
                                                                            
Cash flows from financing activities:                                       
  Net (repayments) borrowings of short-term                                 
   debt                                            (1)        (2)        (1)
  Repayments under the revolving credit                                     
   facility                                      (100)         -       (280)
  Amounts drawn under the revolving credit                                  
   facility                                       450        150        180 
  Repurchase of long-term debt                    (92)      (575)      (980)
  Principal payments on long-term debt             (1)        (7)        (4)
  Net proceeds from the issuance of long-                                   
   term debt                                        -          1        990 
  Dividends paid to non-controlling                                         
   interests                                        -         (1)         - 
  Purchase of non-controlling interests                                     
   (shares)                                         -        (12)         - 
  Cash proceeds from exercise of stock                                      
   options                                         40         98         40 
  Purchase of treasury shares                    (458)      (163)       (35)
                                            ---------  ---------  --------- 
Net cash provided by (used for) financing                                   
 activities                                      (162)      (511)       (90)
                                                                            
Effect of changes in exchange rates on cash                                 
 positions                                         (5)         1         (8)
                                            ---------  ---------  --------- 
Increase (decrease) in cash and cash                                        
 equivalents                                       50       (271)       (22)
Cash and cash equivalents at beginning of                                   
 period                                           670        941        617 
                                            ---------  ---------  --------- 
Cash and cash equivalents at end of period        720        670        595 
                                                                            
Non-Cash Financing                                                          
Exchange of Term Loan C for Term Loan D             -        400          - 
Exchange of Term Loan A1 for Term Loan E          400          -          - 
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 4: Reconciliation of GAAP to non-GAAP Segment Results (unaudited)     
                                                                            
($ in millions)                                    Three Months Ended       
                                            ------------------------------- 
                                            March 30,   Dec. 31,  March 31, 
                                               2014       2013       2013   
                                            ---------  ---------  --------- 
                                                                            
High Performance Mixed Signal (HPMS)              912        957        776 
Standard Products                                 295        294        279 
                                            ---------  ---------  --------- 
  Product Revenue                               1,207      1,251      1,055 
Corporate and Other                                39         42         30 
                                            ---------  ---------  --------- 
    Total Revenue                           $   1,246  $   1,293  $   1,085 
                                            =========  =========  ========= 
                                                                            
HPMS Revenue                                $     912  $     957  $     776 
  Percent of Total Revenue                       73.2%      74.0%      71.5%
  HPMS segment GAAP gross profit                  508        523        417 
    PPA effects                                    (1)        (3)         - 
    Restructuring                                   -         (3)        (1)
    Stock based compensation                       (2)        (2)        (1)
    Other incidentals                               -        (10)         - 
    Other adjustments                               -          -        (46)
                                            ---------  ---------  --------- 
  HPMS segment non-GAAP gross profit        $     511  $     541  $     465 
                                            =========  =========  ========= 
                                                                            
    HPMS segment GAAP gross margin               55.7%      54.6%      53.7%
    HPMS segment non-GAAP gross margin           56.0%      56.5%      59.9%
                                                                            
  HPMS segment GAAP operating profit              200        227        123 
    PPA effects                                   (24)       (26)       (46)
    Restructuring                                  (2)        (2)        (1)
    Stock based compensation                      (22)       (24)       (12)
    Other incidentals                              (1)       (11)        (1)
    Other adjustments                               -          -        (46)
                                            ---------  ---------  --------- 
  HPMS segment non-GAAP operating profit    $     249  $     290  $     229 
                                            =========  =========  ========= 
                                                                            
    HPMS segment GAAP operating margin           21.9%      23.7%      15.9%
    HPMS segment non-GAAP operating margin       27.3%      30.3%      29.5%
                                                                            
  Standard Products Revenue                 $     295  $     294  $     279 
  Percent of Total Revenue                       23.7%      22.7%      25.7%
  Standard Products segment GAAP gross                                      
   profit                                          85         66         70 
    PPA effects                                     -         (1)        (1)
    Restructuring                                  (7)       (18)        (1)
    Stock based compensation                       (1)        (1)         - 
    Other incidentals                              (5)        (6)        (1)
                                            ---------  ---------  --------- 
  Standard Products segment non-GAAP gross                                  
   profit                                   $      98  $      92  $      73 
                                            =========  =========  ========= 
                                                                            
    Standard Products segment GAAP gross                                    
     margin                                      28.8%      22.4%      25.1%
    Standard Products segment non-GAAP                                      
     gross margin                                33.2%      31.3%      26.2%
                                                                            
  Standard Products segment GAAP operating                                  
   profit                                          12          2          7 
    PPA effects                                   (15)       (15)       (15)
    Restructuring                                 (15)       (18)        (1)
    Stock based compensation                       (6)        (7)        (4)
    Other incidentals                              (5)        (6)        (1)
                                            ---------  ---------  --------- 
  Standard Products segment non-GAAP                                        
   operating profit                         $      53  $      48  $      28 
                                            =========  =========  ========= 
                                                                            
    Standard Products segment GAAP                                          
     operating margin                             4.1%       0.7%       2.5%
    Standard Products segment non-GAAP                                      
     operating margin                            18.0%      16.3%      10.0%
                                                                            
  Corporate and Other Revenue               $      39  $      42  $      30 
  Percent of Total Revenue                        3.1%       3.3%       2.8%
  Corporate and Other segment GAAP gross                                    
   profit                                          (8)         -         (4)
    PPA effects                                    (2)        (2)        (2)
    Restructuring                                 (16)         -          - 
    Stock based compensation                        -          -          - 
    Other incidentals                               2         (1)        (1)
                                            ---------  ---------  --------- 
  Corporate and Other segment non-GAAP                                      
   gross profit                             $       8  $       3  $      (1)
                                            =========  =========  ========= 
                                                                            
    Corporate and Other segment GAAP gross                                  
     margin                                     -20.5%       0.0%     -13.3%
    Corporate and Other segment non-GAAP                                    
     gross margin                                20.5%       7.1%      -3.3%
                                                                            
  Corporate and Other segment GAAP                                          
   operating profit                               (29)       (31)       (15)
    PPA effects                                    (7)        (6)        (6)
    Restructuring                                 (16)        (3)        (2)
    Stock based compensation                        -          -         (1)
    Other incidentals                              (5)        (8)        (4)
                                            ---------  ---------  --------- 
  Corporate and Other segment non-GAAP                                      
   operating profit                         $      (1) $     (14) $      (2)
                                            =========  =========  ========= 
                                                                            
    Corporate and Other segment GAAP                                        
     operating margin                           -74.4%     -73.8%     -50.0%
    Corporate and Other segment non-GAAP                                    
     operating margin                            -2.6%     -33.3%      -6.7%
                                                                            
                                                                            
                                                                            
NXP Semiconductors                                                          
Table 5: Financial Reconciliation of GAAP to non-GAAP Results (unaudited)   
                                                                            
($ in millions except share data)                Three Months Ended         
                                         ---------------------------------- 
                                         March 30,      Dec. 31,  March 31, 
                                            2014          2013       2013   
                                         ---------     ---------  --------- 
                                                                            
Revenue                                  $   1,246     $   1,293  $   1,085 
                                                                            
GAAP Gross profit                        $     585     $     589  $     483 
  PPA effects                                   (3)           (6)        (3)
  Restructuring                                (23)          (21)        (2)
  Stock Based Compensation                      (3)           (3)        (1)
  Other incidentals                             (3)          (17)        (2)
  Other adjustments                              -             -        (46)
                                         ---------     ---------  --------- 
Non-GAAP Gross profit                    $     617     $     636  $     537 
                                         =========     =========  ========= 
                                                                            
GAAP Gross margin                             47.0%         45.6%      44.5%
                                                                            
Non-GAAP Gross margin                         49.5%         49.2%      49.5%
                                                                            
  GAAP Research and development          $    (189)    $    (168) $    (153)
    PPA effects                                  -             -          - 
    Restructuring                               (9)            1          - 
    Stock based compensation                    (3)           (5)        (3)
    Other incidentals                           (1)           (1)        (1)
                                         ---------     ---------  --------- 
  Non-GAAP Research and development      $    (176)    $    (163) $    (149)
                                         =========     =========  ========= 
                                                                            
  GAAP Selling, general and                                                 
   administrative                        $    (213)    $    (224) $    (222)
    PPA effects                                (41)          (41)       (64)
    Restructuring                               (1)           (3)        (2)
    Stock based compensation                   (22)          (23)       (13)
    Other incidentals                           (8)           (7)        (3)
                                         ---------     ---------  --------- 
  Non-GAAP Selling, general and                                             
   administrative                        $    (141)    $    (150) $    (140)
                                         =========     =========  ========= 
                                                                            
  GAAP Other income (expense)            $       -     $       1  $       7 
    PPA effects                                 (2)            -          - 
    Restructuring                                -             -          - 
    Other incidentals                            1             -          - 
                                         ---------     ---------  --------- 
  Non-GAAP Other income (expense)        $       1     $       1  $       7 
                                         =========     =========  ========= 
                                                                            
GAAP Operating income (loss)             $     183     $     198  $     115 
  PPA effects                                  (46)          (47)       (67)
  Restructuring                                (33)          (23)        (4)
  Stock based compensation                     (28)          (31)       (17)
  Other incidentals                            (11)          (25)        (6)
  Other adjustments                              -             -        (46)
                                         ---------     ---------  --------- 
Non-GAAP Operating income (loss)         $     301     $     324  $     255 
                                         =========     =========  ========= 
                                                                            
GAAP Operating margin                         14.7%         15.3%      10.6%
                                                                            
Non-GAAP Operating margin                     24.2%         25.1%      23.5%
                                                                            
GAAP Financial income (expense)          $     (45)    $     (79) $    (152)
  Foreign exchange gain (loss) on debt          (2)           31        (53)
  Gain (loss) on extinguishment of long                                     
   term debt                                    (3)          (54)       (37)
  Other financial expense                       (6)          (17)       (13)
                                         ---------     ---------  --------- 
Non-GAAP Financial income (expense)      $     (34)    $     (39) $     (49)
                                         =========     =========  ========= 
                                                                            
GAAP Income tax benefit (provision)      $     (15)    $     (10) $     (11)
  Other adjustments                            (11)            3         (4)
                                         ---------     ---------  --------- 
Non-GAAP Cash tax (expense)              $      (4)    $     (13) $      (7)
                                         =========     =========  ========= 
                                                                            
GAAP Results relating to equity-                                            
 accounted investees                     $       1     $       6  $      47 
  Other adjustments                              1             6         47 
                                         ---------     ---------  --------- 
Non-GAAP Results relating to equity-                                        
 accounted investees                     $       -     $       -  $       - 
                                         =========     =========  ========= 
                                                                            
GAAP Net income (loss)                   $     124     $     115  $      (1)
  PPA effects                                  (46)          (47)       (67)
  Restructuring                                (33)          (23)        (4)
  Stock based compensation                     (28)          (31)       (17)
  Other incidentals                            (11)          (25)        (6)
  Other adjustments                            (21) 1)       (31)      (106)
                                         ---------     ---------  --------- 
 Non-GAAP Net income (loss)              $     263     $     272  $     199 
                                         =========     =========  ========= 
                                                                            
 GAAP Net income (loss) attributable to                                     
 stockholders                            $     110     $      96  $     (14)
  PPA effects                                  (46)          (47)       (67)
  Restructuring                                (33)          (23)        (4)
  Stock based compensation                     (28)          (31)       (17)
  Other incidentals                            (11)          (25)        (6)
  Other adjustments                            (21)          (31)      (106)
                                         ---------     ---------  --------- 
Non-GAAP Net income (loss) attributable                                     
 to stockholders                         $     249     $     253  $     186 
                                         =========     =========  ========= 
                                                                            
GAAP Weighted average shares - diluted     255,167       256,162    249,668 
  Non-GAAP Adjustment                            -             -      8,157 
                                         ---------     ---------  --------- 
Non-GAAP Weighted average shares -                                          
 diluted                                   255,167       256,162    257,825 
                                         =========     =========  ========= 
                                                                            
GAAP Diluted net income (loss)                                              
 attributable to stockholders per share  $    0.43     $    0.37  $   (0.06)
Non-GAAP Diluted net income (loss)                                          
 attributable to stockholders per share  $    0.98     $    0.99  $    0.72 
                                                                            
1) Includes: During 1Q14: Foreign exchange loss on debt: ($2) million; Loss on extinguishment of long-term debt: ($3) million; Other financial
expense: ($6) million; Results relating to equity-accounted investees: $1 million; and difference between book and cash income taxes: ($11)   
million.                                                                                                                                      
                                                                                                                                              
                                                                                                                                              
                                                                            
NXP Semiconductors                                                          
Table 6: Adjusted EBITDA and Free Cash Flow (unaudited)                     
                                                                            
($ in millions)                                    Three Months Ended       
                                            ------------------------------- 
                                            March 30,   Dec. 31,  March 31, 
                                               2014       2013       2013   
                                            ---------  ---------  --------- 
                                                                            
Net Income                                  $     124  $     115  $      (1)
                                            =========  =========  ========= 
                                                                            
Reconciling items to EBITDA                                                 
  Financial (income) expense                       45         79        152 
  (Benefit) provision for income taxes             15         10         11 
  Depreciation                                     52         61         61 
  Amortization                                     50         52         71 
                                            ---------  ---------  --------- 
EBITDA                                      $     286  $     317  $     294 
                                            =========  =========  ========= 
                                                                            
Reconciling items to adjusted EBITDA                                        
  Results of equity-accounted investees            (1)        (6)       (47)
  Restructuring 1)                                 33         21          4 
  Stock based compensation                         28         31         17 
  Other incidental items 1)                        11         24          5 
  Other adjustments                                 -          -         46 
                                            ---------  ---------  --------- 
Adjusted EBITDA                             $     357  $     387  $     319 
                                            =========  =========  ========= 
                                                                            
Trailing twelve month adjusted EBITDA       $   1,414  $   1,376  $   1,195 
                                                                            
1) Excluding depreciation property, plant and equipment and amortization    
 software related to:                                                       
                                                                            
    Restructuring                                   -          2          - 
    Other incidental items                          -          1          1 
                                                                            
                                                                            
($ in millions)                                    Three Months Ended       
                                            ------------------------------- 
                                            March 30,   Dec. 31,  March 31, 
                                               2014       2013       2013   
                                            ---------  ---------  --------- 
                                                                            
Net cash provided by (used for) operating                                   
 activities                                 $     273  $     314  $     119 
                                            =========  =========  ========= 
Net capital expenditures on property, plant                                 
 and equipment                                    (50)       (70)       (39)
                                            ---------  ---------  --------- 
                                                                            
Non-GAAP free cash flow                     $     223  $     244  $      80 
Non-GAAP free cash flow as a percent of                                     
 Revenue                                           18%        19%         7%
                                                                            
                                                                            

For further information, please contact:

Investors:
Jeff Palmer

jeff.palmer@nxp.com
+1 408 518 5411

Media:
Joon Knapen

joon.knapen@nxp.com
+31 619 303 857