UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 6-K

 

Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16
of  the
Securities Exchange Act of 1934

 

July 24, 2009
Commission File Number: 333-142287

 


 

NXP B.V.

(Exact name of registrant as specified in charter)

 

The Netherlands

(Jurisdiction of  incorporation or organization)

 

60 High Tech Campus, 5656 AG, Eindhoven, The Netherlands
(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F

 

x

Form 40-F

 

o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1).

 

Yes

 

o

No

 

x

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7).

 

Yes

 

o

No

 

x

 

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes

 

o

No

 

x

 

Name and address of person authorized to receive notices
and communications from the Securities and Exchange Commission

 

Dr. Jean A.W. Schreurs
60 High Tech Campus
5656 AG Eindhoven – The Netherlands

 

 

 



 

This report contains the quarterly report of NXP B.V. (the “Company”) for the three months ended June 30, 2009, as furnished to the holders of the Company’s debt securities on July 24, 2009. This report also contains a copy of the press release entitled “NXP Semiconductors Announces Second Quarter 2009 Results”, dated July 24, 2009.

 

Exhibits

 

 

 

1.

 

Quarterly report of NXP Semiconductors Group for the three months ended June 30, 2009

 

 

 

2.

 

Press release, dated July 24, 2009

 

2



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized at Eindhoven, on the 24th day of July 2009.

 

 

 

NXP B.V.

 

 

 

 

 

 

 

 

/s/ K.-H. Sundström

 

 

K.-H. Sundström, CFO

 

 

3



Exhibit 1

 

NXP Semiconductors

 

Forward-looking statements

 

This document includes forward-looking statements which include statements regarding our business strategy, financial condition, results of operations, and market data, as well as any other statements which are not historical facts. By their nature, forward- looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors, risks and uncertainties include the following: market demand and semiconductor industry conditions, our ability to successfully introduce new technologies and products, the demand for the goods into which our products are incorporated, our ability to generate sufficient cash or raise sufficient capital to meet both our debt service and research and development and capital investment requirements, our ability to accurately estimate demand and match our production capacity accordingly or obtain supplies from third-party producers, our access to production from third-party outsourcing partners, and any events that might affect their business or our relationship with them, our ability to secure adequate and timely supply of equipment and materials from suppliers, our ability to avoid operational problems and product defects and, if such issues were to arise, to rectify them quickly, our ability to form strategic partnerships and joint ventures and successfully cooperate with our alliance partners, our ability to win competitive bid selection processes to develop products for use in our customers’ equipment and products, our ability to successfully establish a brand identity, our ability to successfully hire and retain key management and senior product architects; and, our ability to maintain good relationships with our suppliers.

 

Except for any ongoing obligation to disclose material information as required by the United States federal securities laws, we do not have any intention or obligation to update forward-looking statements after we distribute this document. In addition, this document contains information concerning the semiconductor industry, our market segments and business units generally, which is forward-looking in nature and is based on a variety of assumptions regarding the ways in which the semiconductor industry, our market segments and product areas will develop. We have based these assumptions on information currently available to us, if any one or more of these assumptions turn out to be incorrect, actual market results may differ from those predicted. While we do not know what impact any such differences may have on our business, if there are such differences, our future results of operations and financial condition, and the market price of the notes, could be materially adversely affected.

 

Use of non-US GAAP information

 

In presenting and discussing the NXP Group’s financial position, operating results and cash flows, management uses certain non-US GAAP financial measures. These non-US GAAP financial measures should not be viewed in isolation as alternatives to the equivalent US GAAP measure(s) and should be used in conjunction with the most directly comparable US GAAP measure(s)

 

A discussion of the non-US GAAP measures included in this document and a reconciliation of such measures to the most directly comparable US GAAP measure(s) are contained in this document.

 

Use of fair value measurements

 

In presenting the NXP Group’s financial position, fair values are used for the measurement of various items in accordance with the applicable accounting standards. These fair values are based on market prices, where available, and are obtained from sources that we consider to be reliable. Users are cautioned that these values are subject to changes over time and are only valid as of the balance sheet date. When a readily determinable market value does not exist, we estimate fair values using valuation models which we believe are appropriate for their purpose. These require management to make significant assumptions with respect to future developments which are inherently uncertain and may therefore deviate from actual developments. In certain cases independent valuations are obtained to support management’s determination of fair values.

 

Quarterly report of the NXP Group

for the 2nd quarter ended June, 2009

 

·                  Second quarter sales at USD 857* million versus USD 1,200 million in the second quarter of 2008 (excl. wireless activities) and USD 673** million in the first quarter of 2009

 

·                  Comparable sequential sales increased by 26.2%

 

·                  Adjusted EBITDA (excluding effects of Purchase Price Accounting and incidental items) was a profit of USD 89 million, compared to a profit of USD 114 million in the second quarter of 2008 and a loss of USD 71 million in the first quarter of 2009

 

·                  Net income amounted to profit of USD 344 million compared to loss of USD 319 million in the second quarter of 2008 and a loss in the first quarter of 2009 of USD 568 million

 

·                  Cash position of USD 1,373 million at the end of the second quarter of 2009 compared to USD 1,706 million at the end of the first quarter of 2009

 

·                  Factory loading of 53% in the second quarter of 2009 compared to 78% in the second quarter of 2008 and 36% in the first quarter of 2009

 

·                  Book to bill ratio at 1.20 in the second quarter of 2009 compared to 1.18 in the first quarter of 2009

 


*) Excluding USD 46 million wafer sales to ST-E Wireless in the second quarter of 2009

**)  Excluding USD 29 million wafer sales to ST-NXP Wireless JV in the first quarter of 2009

 



 

Table of Contents

 

 

 

Page

 

 

 

Introduction

 

3

 

 

 

Report on the performance of the NXP Group:

 

 

Second quarter 2009 compared to second quarter 2008

 

4

Management Summary

 

4

Group performance

 

5

Performance by segment

 

9

Liquidity and capital resources

 

14

Subsequent events

 

15

Outlook

 

15

 

 

 

Group Financial Statements:

 

 

Consolidated statements of operations

 

16

Consolidated balance sheets

 

17

Consolidated statements of cash flows

 

18

Consolidated statements of changes in shareholder’s equity

 

19

Information by segments

 

20

Main countries

 

21

Reconciliation of non-US GAAP information

 

22

Supplemental Guarantor information

 

25

Quarterly statistics

 

28

 

 

2



 

Introduction

 

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), which are presented in footnote 4 of NXP’s Annual Report 2008.

 

During 2008, the Company was organized into four business units and two other segments.

 

On July 28, 2008 the wireless operations of NXP from the former segment Mobile & Personal were contributed to a new joint venture ST-NXP Wireless, and as such all assets and liabilities involved in this transaction have been deconsolidated from this segment. The operations until July 28, 2008 remained consolidated in the consolidated accounts under a new segment named “Divested Wireless activities”.

 

The Mobile & Personal segment has been regrouped as from 2009. The remaining part of the business unit, after the contribution of activities into the joint venture ST-NXP Wireless and subsequent deconsolidation, have been moved into the segments MultiMarket Semiconductors and Corporate and Other. All previous periods reported have been restated accordingly.

 

As from January 1, 2009, five segments are distinguished as reportable segments in compliance with SFAS 131. The Company is structured in three market-oriented business units: Automotive & Identification, MultiMarket Semiconductors and Home, which each represent a reportable operating segment. The two other reportable segments are Manufacturing Operations and Corporate and Other.

 

The Company has decided to enhance the assessment of the performance of its three business units by allocating certain costs that were previously unallocated and were reported in the segments Corporate and Other and Manufacturing Operations, to these operating segments. This allocation better reflects the performance of the operating segments and enables among others a better assessment of the contribution of these segments to the Company’s cash flows. The allocated costs include among others costs related to corporate activities that are for the benefit of the business units and the capacity costs of the segment Manufacturing Operations. Also, the elimination of unrealized results on intercompany transactions is allocated to the related operating segments.

 

The segment information for prior periods has been restated to reflect this reallocation as from the earliest period presented in this report.

 

The presentation of minority interests has been brought in line with SFAS 160, which Statement became effective on January 1, 2009 for the Company.

 

3



 

Second quarter 2009 compared to second quarter 2008

 

·                  all amounts in millions of US dollars unless otherwise stated; data included are unaudited

 

·                  financial reporting is in accordance with US GAAP

 

·                  the impact on the 2009 financial results of the purchase price accounting (“PPA”) used in connection with acquisitions and related effects on subsequent divestments has been separately provided to demonstrate the impact of these accounting effects. This presentation does not comply with US GAAP; however, the Company believes it provides investors with a useful basis of comparison with the Company’s cash flows

 

·                  earnings before Interest and Taxes (“EBIT”) as applied by the Company, has the same meaning as income from operations as presented in the accompanying consolidated financial statements

 

·                  adjusted EBIT refers to EBIT adjusted for incidental items such as restructuring, litigation, IT system reorganization costs, exit of product lines, other non operations-related items, impairments and the effects of purchase price accounting

 

·                  comparable sales growth reflects relative changes in sales between periods adjusted for the effects of currency exchange rate changes, material acquisitions, divestments and reclassified product lines (consolidation changes)

 

Management Summary

 

Economic and financial crisis

 

The effects of the economic financial crisis continued to have an impact in the second quarter of 2009 on both sales and profitability. Sales are significantly lower than the same period last year, which still included the sales of our divested wireless activities. On comparable basis the sales declined by 29.0%. On a sequential basis, however, comparable sales increased by 26.2%. An increase across all segments was visible. The uptake in sales is mainly driven by supply chain replenishment after a soft first quarter of 2009 and demand increase in China.

 

NXP Redesign Program

 

During the period significant progress was made on the execution of our Redesign Program, announced in the third quarter of 2008. The wafer fab in Caen, France, was sold in June 2009 and the wafer fab in Fishkill, USA, has stopped production early July 2009. The process and product transfer programs related to the redesign of fabs in Hamburg and Nijmegen are on track. The program is forecast to have restructuring costs of no greater than USD 700 million and is expected to achieve higher annual savings than those initially projected (USD 550 million) by the end of 2010.

 

Capital structure

 

In the second quarter of 2009 we reduced our overall debt level by USD 517 million through a private offer to exchange existing unsecured and secured notes for new U.S. dollar and Euro-denominated super priority notes. Consequently, our annual cash interest expense is expected to reduce by approximately USD 30 million. The super priority notes are recorded in the balance sheet at a USD 50 million discount, which is subject to accretion to par value over the term of these notes using the effective interest method. The super priority notes are initially fair valued based upon the public trading prices of the existing notes exchanged immediately prior to the launch of the debt exchange.

 

Early in the third quarter of 2009, our overall debt level reduced further by USD 744 million and the related annual cash interest expense by approximately USD 49 million. This is the result of our offer to purchase unsecured and secured notes for cash, a privately negotiated transaction to purchase secured notes for cash, and a privately negotiated transaction in which a purchase of secured notes for cash is combined with a purchase of unsecured notes against issuance of new super priority notes for a nominal amount of USD 131 million. These new super priority notes will be recorded in the balance sheet at a discount of USD 29 million. These transactions will negatively impact our cash position in the third quarter of 2009 by an amount of USD 244 million in total. The overall impact of these capital restructuring transactions is that our overall debt level is reduced by USD 1,261 million and the annual cash interest expense by USD 79 million, while the net cash spent for purchase amounts to USD 244 million in total.

 

4


 

 


 

The following table represents income elements for the 2nd quarters of 2009 and 2008:

 

 

 

Q2 2008

 

Q2 2009

 

In millions of USD unless otherwise
stated

 

As
published

 

Effects
of PPA

 

Incidental
items

 

Impairment
charges

 

As
adjusted

 

As
published

 

Effects
of PPA

 

Incidental
items

 

Impairment
charges

 

As
adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

1,524

 

 

 

 

 

 

 

1,524

 

857

 

 

 

 

 

 

 

857

 

Wireless business wafer sales

 

 

 

 

 

 

 

 

 

46

 

 

 

 

 

 

 

46

 

Total group sales

 

1,524

 

 

 

 

1,524

 

903

 

 

 

 

903

 

% nominal growth

 

(0.9

)

 

 

 

 

 

 

(0.9

)

(40.7

)

 

 

 

 

 

 

(40.7

)

% comparable growth

 

(1.9

)

 

 

 

 

 

 

(1.9

)

(29.0

)

 

 

 

 

 

 

(29.0

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

507

 

(27

)

(22

)

 

556

 

186

 

(54

)

(37

)

 

277

 

Selling expenses

 

(111

)

 

 

 

 

(111

)

(59

)

 

(1

)

 

(58

)

General and administrative expenses

 

(327

)

(168

)

(22

)

 

(137

)

(164

)

(77

)

(18

)

 

(69

)

Research and development expenses

 

(345

)

 

(6

)

 

(339

)

(188

)

 

(14

)

 

(174

)

Write-off of acquired In Process Research and Development

 

(1

)

(1

)

 

 

 

 

 

 

 

 

Other income and expenses

 

(7

)

 

 

 

(7

)

8

 

 

8

 

 

 

EBIT

 

(284

)

(196

)

(50

)

 

(38

)

(217

)

(131

)

(62

)

 

(24

)

Financial income and (expenses)

 

(174

)

 

 

 

 

 

 

 

 

582

 

 

 

 

 

 

 

 

 

Income tax benefit (expense)

 

146

 

 

 

 

 

 

 

 

 

(21

)

 

 

 

 

 

 

 

 

Results equity-accounted investees

 

(7

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

(319

)

 

 

 

 

 

 

 

 

344

 

 

 

 

 

 

 

 

 

 

Certain non-US GAAP financial measures have been used when discussing the NXP Group’s financial position. The following table represents a reconciliation of EBIT to Adjusted EBIT and Adjusted EBITDA:

 

EBIT to Adjusted EBITDA

 

In millions of USD

 

Q2
2008

 

Q2
2009

 

 

 

 

 

 

 

EBIT

 

(284

)

(217

)

 

 

 

 

 

 

Exclude:

 

 

 

 

 

PPA effects amortization intangible fixed assets

 

(169

)

(77

)

PPA effects depreciation tangible fixed assets

 

(27

)

(54

)

Exit of product lines

 

(6

)

(30

)

Restructuring costs

 

(19

)

(26

)

Other incidental items

 

(25

)

(6

)

 

 

 

 

 

 

Adjusted EBIT

 

(38

)

(24

)

 

 

 

 

 

 

Exclude:

 

 

 

 

 

Remaining amortization intangible fixed assets

 

(9

)

(6

)

Remaining depreciation tangible fixed assets

 

(143

)

(116

)

 

 

 

 

 

 

Reverse:

 

 

 

 

 

Depreciation included in restructuring costs

 

 

9

 

 

 

 

 

 

 

Adjusted EBITDA

 

114

 

89

 

 

5



 

The following table represents income elements excluding PPA, incidental items and impairment charges for the 2nd quarter of 2009 compared to the 1st quarter of 2009 and the year-to-date comparison of the 2nd quarter of 2009 with 2008:

 

 

 

Year-to-date

 

Sequential

 

In millions of USD unless otherwise
stated

 

Q2 2008

 

Q2 2009

 

Q1 2009

 

Q2 2009

 

 

 

 

 

 

 

 

 

 

 

Sales

 

3,043

 

1,530

 

673

 

857

 

Wireless business wafer sales

 

 

75

 

29

 

46

 

Total group sales

 

3,043

 

1,605

 

702

 

903

 

 

 

 

 

 

 

 

 

 

 

Sales growth % excl. wafer sales:

 

 

 

 

 

 

 

 

 

% nominal growth

 

1.5

 

(49.7

)

(31.3

)

27.3

 

% comparable growth

 

(0.5

)

(36.1

)

(29.4

)

26.2

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

1,146

 

390

 

113

 

277

 

As % of sales

 

 

 

 

 

 

 

 

 

(excl. wafer sales)

 

37.7

 

25.5

 

16.8

 

32.3

 

Selling expenses

 

(218

)

(119

)

(61

)

(58

)

General and administrative expenses

 

(262

)

(140

)

(71

)

(69

)

Research and development expenses

 

(681

)

(353

)

(179

)

(174

)

Other income

 

9

 

1

 

1

 

 

Adjusted EBIT

 

(6

)

(221

)

(197

)

(24

)

 

 

 

 

 

 

 

 

 

 

Adjusted EBITA

 

12

 

(206

)

(188

)

(18

)

Adjusted EBITDA

 

297

 

18

 

(71

)

89

 

 

Sales

 

Sales by segment

 

 

 

Year-on-year

 

Sequential

 

 

 

 

 

 

 

% change

 

 

 

 

 

% change

 

In millions of USD unless otherwise
stated

 

Q2
2008

 

Q2
2009

 

Nom.

 

Comp.

 

Q1
2009

 

Q2
2009

 

Nom.

 

Comp.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive & Identification

 

359

 

200

 

(44.3

)

(40.9

)

179

 

200

 

11.7

 

10.1

 

MultiMarket Semiconductors

 

566

 

418

 

(26.1

)

(23.1

)

315

 

418

 

32.7

 

31.4

 

Home

 

196

 

181

 

(7.7

)

(25.5

)

135

 

181

 

34.1

 

33.7

 

Manufacturing Operations

 

61

 

91

 

·

(1)

·

(1)

61

 

91

 

·

(1)

·

(1)

Corporate and Other

 

18

 

13

 

·

(1)

·

(1)

12

 

13

 

·

(1)

·

(1)

Divested Wireless activities

 

324

 

 

 

 

 

 

 

 

 

 

1,524

 

903

 

(40.7

)

(29.0

)

702

 

903

 

28.6

 

27.5

 

 


(1) Not meaningful

 

Sales

 

Sales in the 2nd quarter of 2009 were USD 857 million, excluding wafer sales of USD 46 million to ST-Ericsson Wireless. Sales in the 2nd quarter of 2008 amounted to USD 1,524 million, which included USD 324 million of sales from the divested wireless activities. On a nominal basis sales

 

6



 

decreased by 40.7% and on a comparable basis sales declined by 29.0%. The comparable sales decline was mainly due to the global economic crisis that commenced during the second half of last year. Furthermore, sales for the 2nd quarter of 2009 were affected by unfavorable currency effects of USD 35 million compared to the same quarter last year.

 

The weak economic environment affected sales of all business segments. The Automotive & Identification business showed a 40.9% decline on a comparable basis, which was in line with the market development. The automotive market was affected by the continued low demand and related car production. Sales in Identification were also weak following a slowdown in government related projects. Sales in the MultiMarket segment declined by 23.1% on a comparable basis. Home segment sales decreased on a comparable basis by 25.5% as the market continued to be weak especially for Analog CRT, partly compensated by improvements in Digital TV. The market for mainstream Set Top Boxes also showed a decline.

 

Sequential comparison

 

Nominal sales excluding wafer sales increased by 27.3% in the 2nd quarter of 2009 compared to the 1st quarter of 2009 and 26.2% on a comparable basis. The increase in sales is mainly attributable to the supply chain replenishment, following a soft 1st quarter of 2009 and demand increase in China.

 

EBIT

 

 

 

Q2 2008

 

Q2 2009

 

In millions of USD unless otherwise
stated

 

EBIT

 

Adjusted
EBIT

 

As a %
of sales

 

EBIT

 

Adjusted
EBIT

 

As a %
of sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive & Identification

 

2

 

47

 

13.1

 

(56

)

(17

)

(8.5

)

MultiMarket Semiconductors

 

(8

)

46

 

8.1

 

(9

)

33

 

7.9

 

Home

 

(71

)

(37

)

(18.9

)

(53

)

(41

)

(22.7

)

Manufacturing Operations

 

(32

)

1

 

·

(1)

(78

)

5

 

·

(1)

Corporate and Other

 

(19

)

3

 

·

(1)

(21

)

(4

)

·

(1)

Divested Wireless activities

 

(156

)

(98

)

(30.2

)

 

 

 

 

 

(284

)

(38

)

(2.5

)

(217

)

(24

)

(2.7

)

 


(1) Not meaningful

 

EBIT

 

EBIT in the 2nd quarter of 2009 was a loss of USD 217 million, including a favorable currency effect of USD 10 million, compared to a loss of USD 284 million in the same quarter last year. PPA effects were USD 131 million compared to USD 196 million in the 2nd quarter of 2008. The lower PPA effect is mainly due to divestment of the wireless activities, partly offset by a write-down arising from the closure of the Fishkill fab. Incidental items amounted to a loss of USD 62 million (2008: loss of USD 50 million), of which USD 30 million related to the sale of the Caen fab and closure of the Fishkill fab and additional non-personnel related restructuring costs of USD 26 million.

 

The EBIT of the 2nd quarter of 2009 was affected by a lower gross margin of USD 321 million (USD 224 million excluding the wireless activities) and offset by lower operating expenses of USD 372 million (USD 98 million excluding the wireless activities). The factory loading was 53% compared to 78% in the 2nd quarter of 2008.

 

Adjusted EBIT for the 2nd quarter of 2009 was a loss of USD 24 million compared to a loss of USD 38 million in the same quarter last year. The decline in sales resulted in lower EBIT, which was partly offset by lower operating expenses due to the ongoing Redesign Program. The gross margin in the 2nd quarter of 2009 was 32.3% compared to 36.5% in the 2nd quarter of 2008. The EBIT of the 2nd quarter of 2008 included a loss from the divested wireless activities of USD 98 million.

 

7



 

Sequential comparison

 

Adjusted EBIT for the 2nd quarter of 2009 was a loss of USD 24 million, including a favorable currency effect of USD 9 million, compared to a loss of USD 197 million in the 1st quarter of 2009. This improvement is related to the higher sales resulting in an increase in gross margin of USD 164 million. The gross margin as percentage of sales improved to 32.3% in the 2nd quarter of 2009, compared to 16.8% in the 1st quarter of 2009. Operating expenses were reduced by USD 10 million.

 

Financial income and expense

 

Financial income and expense amounted to an income of USD 582 million in the 2nd quarter of 2009 compared to an expense of USD 174 million in the same quarter last year. The 2nd quarter of 2009 included the gain on the bond exchange offer completed in April 2009 amounting to USD 517 million. Also included is a profit of USD 172 million (2nd quarter of 2008: loss of USD 22 million) as a result of changes in currency rates, predominantly related to our USD denominated notes and cash position. Net interest expense amounted to USD 91 million in the 2nd quarter of 2009 compared to USD 120 million in the corresponding quarter last year.

 

Income tax benefit (expense)

 

Tax benefits, in connection with losses the Company incurred during the 2nd quarter, were more than offset by a current tax charge of USD 132 million related to the debt exchange offer completed in April. As a result the valuation allowance against our deferred tax assets decreased by USD 61 million. The valuation allowances in Germany, France and USA increased, while the valuation allowance against our deferred tax assets in the Netherlands decreased.

 

The Company recognized an income tax expense of USD 21 million compared to a tax benefit of USD 146 million in the same quarter last year.

 

Result relating to equity-accounted investees

 

Results to equity-accounted investees were nil in the 2nd quarter of 2009 compared to a loss of USD 7 million in the same quarter last year. The result relating to equity-accounted investees in the 2nd quarter of 2008 was mainly related to our shareholding in ASMC.

 

Net income

 

Net income for the 2nd quarter of 2009 was a profit of USD 344 million compared to a loss of USD 319 million in the 2nd quarter of 2008. The increase in net income is attributable to higher financial income resulting from debt conversion and supported by the improved EBIT, partly offset by higher tax expenses.

 

Adjusted EBITA

 

Adjusted EBITA for the 2nd quarter of 2009 was a loss of USD 18 million compared to a loss of USD 29 million in the same quarter last year.

 

Adjusted EBITDA

 

Adjusted EBITDA amounted to a gain of USD 89 million in the 2nd quarter of 2009 compared to a gain of USD 114 million in the corresponding quarter last year. Adjusted EBITDA is mainly driven by the development in EBIT.

 

The EBITDA of SSMC amounted to USD 40 million in the 2nd quarter of 2009.

 

8



 

Performance by segment

 

Automotive & Identification

 

Key data

 

In millions of USD unless otherwise

 

Year-on-year

 

Sequential

 

stated

 

Q2 2008

 

Q2 2009

 

Q1 2009

 

Q2 2009

 

 

 

 

 

 

 

 

 

 

 

Sales

 

359

 

200

 

179

 

200

 

% nominal growth

 

(0.3

)

(44.3

)

(31.9

)

11.7

 

% comparable growth

 

(0.5

)

(40.9

)

(30.9

)

10.1

 

EBIT

 

2

 

(56

)

(86

)

(56

)

Effects of PPA

 

(40

)

(34

)

(33

)

(34

)

Incidental items

 

(5

)

(5

)

(9

)

(5

)

Adjusted EBIT

 

47

 

(17

)

(44

)

(17

)

as a % of sales

 

13.1

 

(8.5

)

(24.6

)

(8.5

)

 

Sales

 

Sales for the 2nd quarter of 2009 were USD 200 million compared to USD 359 million in the same quarter last year, resulting in a 44.3% nominal decline and 40.9% on a comparable basis. This decline reflects the continuous weakness in the automotive market. The Identification sales were affected by a slow down of various government projects and competitive prices in the banking card business. Furthermore, unfavorable currency translation effects of USD 13 million impacted the sales compared to the 2nd quarter of 2008.

 

On a sequential basis, sales increased to USD 200 million in the 2nd quarter of 2009 from USD 179 million in the 1st quarter of 2009, a comparable increase of 10.1%. The increase in sales is mainly attributable to the supply chain replenishment and stimulus packages provided by some governments for the automotive industry.

 

EBIT

 

Adjusted EBIT in the 2nd quarter of 2009 was a loss of USD 17 million compared to a profit of USD 47 million in the corresponding quarter last year. This decline was mainly due to the reduced sales and related lower gross margin contribution, partly offset by the lower operating expenses. Incidental items for the 2nd quarter of 2009 are related to process transfer costs and non personnel related restructuring costs.

 

On a sequential basis, adjusted EBIT was a loss of USD 17 million in the 2nd quarter of 2009, which was an improvement from a loss of USD 44 million in the 1st quarter of 2009. This was mainly due to higher sales combined with a reduced cost base.

 

9



 

MultiMarket Semiconductors

 

Key data

 

In millions of USD unless otherwise

 

Year-on-year

 

Sequential

 

stated

 

Q2 2008

 

Q2 2009

 

Q1 2009

 

Q2 2009

 

 

 

 

 

 

 

 

 

 

 

Sales

 

566

 

418

 

315

 

418

 

% nominal growth

 

(6.5

)

(26.1

)

(25.7

)

32.7

 

% comparable growth

 

(4.7

)

(23.1

)

(25.0

)

31.4

 

EBIT

 

(8

)

(9

)

(101

)

(9

)

Effects of PPA

 

(52

)

(40

)

(39

)

(40

)

Incidental items

 

(2

)

(2

)

(2

)

(2

)

Adjusted EBIT

 

46

 

33

 

(60

)

33

 

as a % of sales

 

8.1

 

7.9

 

(19.0

)

7.9

 

 

Sales

 

Sales in the 2nd quarter of 2009 amounted to USD 418 million compared to USD 566 million in the corresponding period of 2008, reflecting a 26.1% nominal sales decline. On a comparable basis the sales declined by 23.1% compared to the same quarter in 2008 reflecting the significant decline in the overall market. Sales across the entire product portfolio were lower except for sales of components for radio base stations. Furthermore, sales in the 2nd quarter of 2009 were impacted by unfavorable currency translation effects of USD 19 million compared to the 2nd quarter of 2008.

 

On a sequential basis sales increased by 31.4% on a comparable basis to USD 418 million in the 2nd quarter of 2009 from USD 315 million in the 1st quarter of 2009. Sales were particularly strong in Asia, and largely attributable to the replenishment of the supply chain.

 

EBIT

 

Adjusted EBIT in the 2nd quarter of 2009 was a profit of USD 33 million compared to a profit of USD 46 million in the corresponding period of 2008. The decrease in adjusted EBIT was largely due to lower sales volume and the related lower factory utilization, resulting in lower gross margin partly offset by lower operating expenses.

 

On a sequential basis, adjusted EBIT improved to a profit of USD 33 million in the 2nd quarter of 2009 from a loss of USD 60 million in the 1st quarter of 2009. The increase in profit was mainly due to a higher sales volume and increased utilization of the fabs.

 

10



 

Home

 

Key data

 

 

 

Year-on-year

 

Sequential

 

In millions of USD unless otherwise stated

 

Q2 2008

 

Q2 2009

 

Q1 2009

 

Q2 2009

 

 

 

 

 

 

 

 

 

 

 

Sales

 

196

 

181

 

135

 

181

 

% nominal growth

 

(9.3

)

(7.7

)

(39.5

)

34.1

 

% comparable growth

 

(8.6

)

(25.5

)

(37.5

)

33.7

 

EBIT

 

(71

)

(53

)

(88

)

(53

)

Effects of PPA

 

(30

)

1

 

(6

)

1

 

Incidental items

 

(4

)

(13

)

(3

)

(13

)

Impairment goodwill and other intangibles

 

 

 

 

 

Adjusted EBIT

 

(37

)

(41

)

(79

)

(41

)

as a % of sales

 

(18.9

)

(22.7

)

(58.5

)

(22.7

)

 

Sales

 

Sales for the 2nd quarter of 2009 were USD 181 million compared to USD 196 million in the same quarter in 2008, a nominal sales decline of 7.7%. The 2008 acquisitions of Conexant and NuTune contributed to the 2nd quarter sales of 2009. On a comparable basis sales declined by 25.5%, mainly due to the general economic downturn, especially in the analog TV market.

 

On a sequential basis sales increased to USD 181 million in the 2nd quarter of 2009 from USD 135 million in the 1st quarter of 2009 resulting in a nominal increase of 34.1%, and 33.7% on a comparable basis. The increase in sales is attributable to the replenishment of the supply chain.

 

EBIT

 

Adjusted EBIT in the 2nd quarter of 2009 was a loss of USD 41 million compared to a loss of USD 37 million in the corresponding quarter last year. The decrease in adjusted EBIT is mainly driven by lower margins as a result of lower sales, partly compensated by lower operating expenses resulting from the restructuring efforts.

 

The incidental items for the 2nd quarter of 2009 were a loss of USD 13 million mainly due to the restructuring cost related to the NuTune venture.

 

On a sequential basis, the adjusted EBIT loss decreased from USD 79 million in the 1st quarter of 2009 to a loss of USD 41 million in the 2nd quarter of 2009. The reduced loss was mainly due to higher sales and a lower cost base.

 

11



 

Manufacturing Operations

 

Key data

 

In millions of USD unless otherwise

 

Year-on-year

 

Sequential

 

stated

 

Q2 2008

 

Q2 2009

 

Q1 2009

 

Q2 2009

 

 

 

 

 

 

 

 

 

 

 

Sales(2)

 

61

 

45

 

32

 

45

 

Wireless business wafer sales

 

 

46

 

29

 

46

 

Total sales

 

61

 

91

 

61

 

91

 

% nominal growth

 

·

(1)

·

(1)

·

(1)

·

(1)

% comparable growth

 

·

(1)

·

(1)

·

(1)

·

(1)

EBIT

 

(32

)

(78

)

(50

)

(78

)

Effects of PPA

 

(24

)

(58

)

(7

)

(58

)

Incidental items

 

(9

)

(25

)

(34

)

(25

)

Adjusted EBIT

 

1

 

5

 

(9

)

5

 

as a % of sales

 

·

 

·

 

·

 

·

 

 


(1) Percentage not meaningful.

(2) Excluding internal sales to other Business Units

 

Sales

 

Nominal sales increased from USD 61 million in the 2nd quarter of 2008 to USD 91 million in the 2nd quarter of 2009, of which USD 46 million is from the supply of wafers to ST-Ericsson Wireless. The reduction of the remaining wafer sales from USD 61 million to USD 45 million is due to the general economic down turn.

 

On a sequential basis, the combined sales increased from USD 61 million in the 1st quarter of 2009 to USD 91 million in the 2nd quarter of 2009 as a result of an uptake in demand in the 2nd quarter of 2009.

 

EBIT

 

Adjusted EBIT in the 2nd quarter of 2009 was a profit of USD 5 million compared to a profit of USD 1 million in the corresponding quarter last year. The adjusted EBIT reflects the result of SSMC sales to third party customers.  Incidental items for the 2nd quarter of 2009 were a loss of USD 25 million mainly related to the sale of the Caen fab and the closure of the Fishkill fab.

 

On a sequential basis, adjusted EBIT increased from a loss of USD 9 million in the 1st quarter of 2009 to a profit of USD 5 million in the 2nd quarter of 2009 due to increased sales.

 

12



 

Corporate and Other

 

Key data

 

 

 

Year-on-year

 

Sequential

 

In millions of USD unless otherwise stated

 

Q2 2008

 

Q2 2009

 

Q1 2009

 

Q2 2009

 

 

 

 

 

 

 

 

 

 

 

Sales

 

18

 

13

 

12

 

13

 

% nominal growth

 

·

(1)

·

(1)

·

(1)

·

(1)

% comparable growth

 

·

(1)

·

(1)

·

(1)

·

(1)

EBIT

 

(19

)

(21

)

(22

)

(21

)

Effects of PPA

 

 

 

 

 

Incidental items

 

(22

)

(17

)

(17

)

(17

)

Impairment goodwill and other intangibles

 

 

 

 

 

Adjusted EBIT

 

3

 

(4

)

(5

)

(4

)

as a % of sales

 

·

 

·

 

·

 

·

 

 


(1) Percentage not meaningful.

 

Sales

 

Sales in Corporate and Other segment mainly relate to IP licensing and NXP Software sales.

 

EBIT

 

Adjusted EBIT for the 2nd quarter of 2009 was a loss of USD 4 million compared to a profit of USD 3 million in the same quarter last year. The loss was mainly due to currency effects. Incidental items in the 2nd quarter of 2009 were a loss of USD 17 million mainly related to non-personnel related restructuring activities.

 

Divested Wireless activities

 

Key data

 

In millions of USD unless otherwise

 

Year-on-year

 

Sequential

 

stated

 

Q2 2008

 

Q2 2009

 

Q1 2009

 

Q2 2009

 

 

 

 

 

 

 

 

 

 

 

Sales

 

324

 

 

 

 

% nominal growth

 

 

 

 

 

 

% comparable growth

 

 

 

 

 

 

EBIT

 

(156

)

 

 

 

Effects of PPA

 

(50

)

 

 

 

Incidental items

 

(8

)

 

 

 

Adjusted EBIT

 

(98

)

 

 

 

as a % of sales

 

(30.2

)

 

 

 

 

The divested wireless activities have been included in the Group consolidated accounts for the period January – July 2008.

 

13



 

Liquidity and capital resources

 

At the end of the 2nd quarter of 2009, cash and cash equivalents amounted to USD 1,373 million (of which USD 156 million was held by SSMC) compared to USD 1,706 million at the end of the 1st quarter of 2009. Including the cash position and the unused senior secured revolving credit facility, NXP had in total access to liquidity resources of USD 1,467 million as at end of the 2nd quarter of 2009.

 

Debt

 

The carrying amount of total debt at the end of June 2009 is USD 6,050 million, compared to USD 6,367 million at the end of December 2008.

 

The estimated fair value of total debt is USD 2,757 million and USD 2,065 million, respectively. This fair value is estimated on the basis of the quoted market prices for certain bonds outstanding or on the basis of discounted cash flow analysis based upon incremental borrowing rates for similar types of borrowing arrangements with comparable terms and maturities.

 

In the 2nd quarter of 2009 we reduced our overall debt by USD 517 million through a private offer to exchange existing unsecured and secured notes for new U.S. dollar and Euro-denominated super priority notes. Consequently, our annual cash interest expense is expected to reduce by approximately USD 30 million. The super priority notes are recorded in the balance sheet at a USD 50 million discount, which is subject to accretion to par value over the term of these notes using the effective interest method. The super priority notes are initially fair valued based upon the public trading prices of the existing notes exchanged immediately prior to the launch of the debt exchange.

 

Given the ongoing crisis in the financial markets and based on our risk assessment we have deposited almost all our cash with at least A-rated financial organizations.

 

Net cash used for operating activities amounted to USD 349 million in the 2nd quarter of 2009, mainly due to the semi-annual year coupon payments of interest paid of USD 168 million, USD 96 million cash payout in connection with restructuring programs, USD 50 million due to an increase in accounts receivable and USD 15 million due to higher inventories, both in line with an increased sales level.

 

Net cash provided by investing activities was USD 2 million. The gross Capex for the 2nd quarter of 2009 amounted to USD 7 million. The proceeds from disposals of property, plant and equipment amounted to USD 6 million.

 

Net cash used for financing activities was USD 4 million.

 

In relation to the divestment of our wireless activities we recognized gross proceeds of USD 1,550 million in 2008. The table below represents adjustments made towards the excess proceeds at the end of the 2nd quarter of 2009.  The excess proceeds of USD 34 million, as shown in the table, are below the threshold amount of EUR 50 million, as defined in the financing agreements.

 

In millions of USD

 

 

 

Gross cash proceeds

 

1,550

 

Transaction-related expenses and accruals incl. taxes *

 

(517

)

Cash divested

 

(33

)

Net available cash

 

1,000

 

Use of proceeds since divestment date::

 

 

 

Relevant Capex 2008/2009

 

105

 

Conexant STB acquisition in 2008

 

111

 

Repayment revolving credit facility in 2008/2009

 

750

 

Total use of proceeds during 2008/2009

 

966

 

Excess proceeds

 

34

 

 


*    Any provisions, accruals and expenses related to the divestment of the wireless activities can be deducted from the gross proceeds.

 

In addition, cash proceeds resulting from the sale of our shareholding in the ST-NXP Wireless JV, received in the 1st quarter of 2009, amounted to USD 92 million.

 

14



 

Subsequent events

 

On July 2, 2009, we announced the expiration and final results of our offer to purchase unsecured and secured notes for cash. The purpose of the tender offer, announced on June 4, 2009, was to reduce our overall debt level and related interest expense. This is the result of our offer to purchase unsecured and secured notes for cash, a privately negotiated transaction to purchase secured notes for cash, and a privately negotiated transaction in which a purchase of secured notes for cash is combined with a purchase of unsecured notes against issuance of new super priority notes. We have funded the payment of the notes purchased in the tender offer and the privately negotiated transactions with available cash. As a result of the tender offer and the privately negotiated transactions, our overall debt level is reduced by USD 744 million and the related annual cash interest expense by approximately USD 49 million. These transactions will negatively impact our cash position in the third quarter of 2009 by an amount of USD 244 million in total.

 

We may from time to time continue to seek to retire or purchase our outstanding debt through cash purchases and/or exchanges, in open market purchases, privately negotiated transactions or otherwise.

 

As part of the NXP Redesign Program, announced in September 2008, the wafer fab in Fishkill, USA, has stopped production early July 2009.

 

Outlook

 

The weak macro-economic conditions are still continuing. Although we have recently experienced positive order book developments, we believe this may be driven mainly by supply chain replenishment and not by a fundamental improvement of the semiconductors market, apart from China where we have seen real demand increase and recent improvements in other Asian countries. Considering the current business development we expect a sequential sales increase between 10% and 20% in the third quarter on a business and currency comparable basis (excluding wafer sales to ST-Ericsson). However, visibility beyond the third quarter is still limited.

 

Eindhoven, July 24, 2009

Board of Management

 

15



 

Consolidated statements of operations

 

all amounts in millions of USD

 

 

 

2nd quarter

 

January to June

 

 

 

2008

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

 

 

 

 

Sales

 

1,524

 

903

 

3,043

 

1,605

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

(1,017

)

(717

)

(1,980

)

(1,351

)

 

 

 

 

 

 

 

 

 

 

Gross margin

 

507

 

186

 

1,063

 

254

 

 

 

 

 

 

 

 

 

 

 

Selling expenses

 

(111

)

(59

)

(218

)

(120

)

General and administrative expenses:

 

 

 

 

 

 

 

 

 

- Impairment goodwill and other intangibles

 

 

 

 

 

- Other general and administrative expenses

 

(327

)

(164

)

(622

)

(337

)

Research and development expenses

 

(345

)

(188

)

(691

)

(375

)

Write-off of acquired in-process research and development

 

 

(1

)

 

 

 

(13

)

 

 

Other income (expense)

 

(7

)

8

 

30

 

14

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

(284

)

(217

)

(451

)

(564

)

 

 

 

 

 

 

 

 

 

 

Financial income (expense)

 

(174

)

582

 

(115

)

273

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before taxes

 

(458

)

365

 

(566

)

(291

)

 

 

 

 

 

 

 

 

 

 

Income tax (expense) benefit

 

146

 

(21

)

192

 

(8

)

 

 

 

 

 

 

 

 

 

 

Income (loss) after taxes

 

(312

)

344

 

(374

)

(299

)

 

 

 

 

 

 

 

 

 

 

Results relating to equity-accounted investees

 

(7

)

 

(11

)

75

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

(319

)

344

 

(385

)

(224

)

 

 

 

 

 

 

 

 

 

 

Attribution of net income:

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to shareholder

 

(330

)

339

 

(408

)

(219

)

Net income (loss) attributable to minority interests

 

11

 

5

 

23

 

(5

)

Net income (loss)

 

(319

)

344

 

(385

)

(224

)

 

16



 

Consolidated balance sheets

 

all amounts in millions of USD

 

 

 

June 29,
 2008

 

December
31, 2008

 

June 28,
2009

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

660

 

1,796

 

1,373

 

Securities

 

 

33

 

 

Receivables

 

858

 

517

 

544

 

Inventories

 

1,009

 

630

 

614

 

Other current assets

 

299

 

212

 

209

 

Total current assets

 

2,826

 

3,188

 

2,740

 

 

 

 

 

 

 

 

 

Non-current assets:

 

 

 

 

 

 

 

Investments in equity-accounted investees

 

70

 

158

 

48

 

Other non-current financial assets

 

58

 

18

 

20

 

Other non-current assets

 

637

 

469

 

610

 

Property, plant and equipment

 

2,490

 

1,807

 

1,549

 

Intangible assets excluding goodwill

 

3,814

 

2,384

 

2,206

 

Goodwill

 

3,994

 

2,661

 

2,651

 

Total non-current assets

 

11,063

 

7,497

 

7,084

 

 

 

 

 

 

 

 

 

Total assets

 

13,889

 

10,685

 

9,824

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts and notes payable

 

856

 

619

 

483

 

Accrued liabilities

 

751

 

983

 

751

 

Short-term provisions

 

50

 

129

 

107

 

Other current liabilities

 

93

 

120

 

178

 

Short-term debt

 

464

 

403

 

608

 

Total current liabilities

 

2,214

 

2,254

 

2,127

 

 

 

 

 

 

 

 

 

Non-current liabilities:

 

 

 

 

 

 

 

Long-term debt

 

6,215

 

5,964

 

5,442

 

Long-term provisions

 

745

 

1,072

 

1,122

 

Other non-current liabilities

 

113

 

107

 

105

 

Total non-current liabilities

 

7,073

 

7,143

 

6,669

 

 

 

 

 

 

 

 

 

Minority interests

 

260

 

213

 

179

 

Shareholder’s equity

 

4,342

 

1,075

 

849

 

Total equity

 

4,602

 

1,288

 

1,028

 

 

 

 

 

 

 

 

 

Total liabilities and equity

 

13,889

 

10,685

 

9,824

 

 

17



 

Consolidated statements of cash flows

 

all amounts in millions of USD

 

 

 

2nd quarter

 

January to June

 

 

 

2008

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net income (loss)

 

(319

)

344

 

(385

)

(224

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

347

 

253

 

680

 

464

 

Write-off of in-process research and development

 

1

 

 

13

 

 

Net (gain) loss on sale of assets

 

8

 

(12

)

(16

)

(88

)

Gain on debt exchange

 

 

(517

)

 

(517

)

Results relating to equity-accounted investees

 

7

 

 

11

 

 

Dividends paid to minority shareholders

 

(20

)

 

(20

)

(29

)

Decrease (increase) in receivables and other current assets

 

(41

)

(12

)

(115

)

(23

)

Decrease (increase) in inventories

 

28

 

(15

)

(36

)

17

 

Increase (decrease) in accounts payable, accrued and other liabilities

 

(218

)

(166

)

(363

)

(276

)

Decrease (increase) in non-current receivables/other assets

 

(107

)

(28

)

(124

)

(109

)

Increase (decrease) in provisions

 

(32

)

(35

)

(87

)

23

 

Other items

 

65

 

(161

)

(107

)

45

 

Net cash provided by (used for) operating activities

 

(281

)

(349

)

(549

)

(717

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Purchase of intangible assets

 

(4

)

(2

)

(8

)

(3

)

Capital expenditures on property, plant and equipment

 

(139

)

(7

)

(282

)

(44

)

Proceeds from disposals of property, plant and equipment

 

139

 

6

 

160

 

11

 

Proceeds from the sale of securities

 

 

 

 

20

 

Purchase of other non-current financial assets

 

(13

)

 

(13

)

 

Proceeds from the sale of other non-current financial assets

 

6

 

 

6

 

 

Purchase of interest in businesses

 

(4

)

 

(92

)

 

Proceeds from the sale of businesses

 

 

5

 

16

 

123

 

Net cash provided by (used for) investing activities

 

(15

)

2

 

(213

)

107

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

(Decrease) increase in debt

 

458

 

(4

)

459

 

204

 

Net cash provided by (used for) financing activities

 

458

 

(4

)

459

 

204

 

 

 

 

 

 

 

 

 

 

 

Effect of changes in exchange rates on cash positions

 

(21

)

18

 

(78

)

(17

)

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

141

 

(333

)

(381

)

(423

)

Cash and cash equivalents at beginning of period

 

519

 

1,706

 

1,041

 

1,796

 

Cash and cash equivalents at end of period

 

660

 

1,373

 

660

 

1,373

 

 

18



 

Consolidated statements of changes in shareholder’s equity

 

all amounts in millions of USD

 

 

 

January to June 2009

 

 

 

 

 

 

 

 

 

Accumulated other comprehensive income
(loss)

 

 

 

 

 

 

 

Common
stock

 

Capital
in
excess
of par
value

 

Accumulated
deficit

 

Currency
translation
differences

 

Unrealized
gain (loss) on
available-for-
sale securities

 

Pension
(SFAS No.
158)

 

Minority
interests

 

Total
equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2008

 

 

5,569

 

(5,044

)

527

 

6

 

17

 

213

 

1,288

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

 

 

 

(219

)

 

 

 

 

 

 

(5

)

(224

)

Current period change

 

 

 

 

 

 

 

56

 

 

 

 

 

(29

)

27

 

Reclassifications into income

 

 

 

 

 

 

 

(72

)

(6

)

 

 

 

 

(78

)

Differences due to translating the parent’s functional currency into Group reporting currency

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income (loss), net of tax

 

 

 

 

 

(219

)

(16

)

(6

)

 

 

(34

)

(275

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation plans

 

 

 

15

 

 

 

 

 

 

 

 

 

 

 

15

 

Balance as of June 28, 2009

 

 

 

5,584

 

(5,263

)

511

 

 

17

 

179

 

1,028

 

 

19



 

Information by segments

 

all amounts in millions of USD unless otherwise stated

 

Sales, R&D expenses and income from operations

 

 

 

2nd quarter

 

 

 

2008

 

2009

 

 

 

Sales

 

Research
and
development
expenses

 

Income (loss)
from operations

 

Sales

 

Research
and
development
expenses

 

Income (loss)
from operations

 

 

 

 

 

 

 

amount

 

as a % of
sales

 

 

 

 

 

amount

 

as a
%
of
sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive & Identification

 

359

 

72

 

2

 

0.6

 

200

 

52

 

(56

)

(28.0

)

MultiMarket Semiconductors

 

566

 

53

 

(8

)

(1.4

)

418

 

49

 

(9

)

(2.2

)

Home

 

196

 

59

 

(71

)

(36.2

)

181

 

82

 

(53

)

(29.3

)

Manufacturing Operations (2)

 

61

 

13

 

(32

)

·

(1)

91

 

1

 

(78

)

·

(1)

Corporate and Other

 

18

 

20

 

(19

)

·

(1)

13

 

4

 

(21

)

·

(1)

Divested Wireless activities

 

324

 

128

 

(156

)

(48.1

)

 

 

 

 

Total

 

1,524

 

345

 

(284

)

(18.6

)

903

 

188

 

(217

)

(24.0

)

 

 

 

January to June

 

 

 

2008

 

2009

 

 

 

Sales

 

Research
and
development
expenses

 

Income (loss)
from operations

 

Sales

 

Research
and
development
expenses

 

Income (loss)
from operations

 

 

 

 

 

 

 

amount

 

as a % of
sales

 

 

 

 

 

amount

 

as a
%

of
sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive & Identification

 

696

 

139

 

4

 

0.6

 

379

 

108

 

(142

)

(37.5

)

MultiMarket Semiconductors

 

1,115

 

118

 

25

 

2.2

 

733

 

90

 

(110

)

(15.0

)

Home

 

401

 

125

 

(137

)

(34.2

)

316

 

150

 

(141

)

(44.6

)

Manufacturing Operations (2)

 

123

 

27

 

(62

)

·

(1)

152

 

6

 

(128

)

·

(1)

Corporate and Other

 

36

 

41

 

(25

)

·

(1)

25

 

21

 

(43

)

·

(1)

Divested Wireless activities

 

672

 

241

 

(256

)

(38.1

)

 

 

 

 

Total

 

3,043

 

691

 

(451

)

(14.8

)

1,605

 

375

 

(564

)

(35.1

)

 


(1)

Percentage not meaningful

(2)

For the six months ended June 28, 2009, Manufacturing Operations supplied USD 241 million to other segments (for the six months ended June 29, 2008: USD 1,166 million), which have been eliminated in the above presentation.

 

20



 

Main countries

 

all amounts in millions of USD

 

Sales

 

 

 

January to June

 

 

 

2008

 

2009

 

 

 

 

 

 

 

China

 

523

 

290

 

Netherlands

 

498

 

327

 

Taiwan

 

216

 

110

 

United States

 

248

 

138

 

Singapore

 

275

 

202

 

Germany

 

195

 

106

 

South Korea

 

396

 

99

 

Other Countries

 

692

 

333

 

Total

 

3,043

 

1,605

 

 

The allocation is based on invoicing organization.

 

21



 

Reconciliation of non-US GAAP information

 

all amounts in millions of USD unless otherwise stated

 

Certain non-US GAAP financial measures are presented when discussing the NXP Group’s financial position. In the following tables, a reconciliation to the most directly comparable US GAAP financial measure is made for each non-US GAAP performance measure.

 

Sales growth composition (in %)

 

 

 

Comparable
growth

 

Currency
effects

 

Consolidation
changes

 

Nominal
growth

 

Q2 2009 versus Q2 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive & Identification

 

(40.9

)

(3.4

)

 

(44.3

)

MultiMarket Semiconductors

 

(23.1

)

(3.0

)

 

(26.1

)

Home

 

(25.5

)

(0.8

)

18.6

 

(7.7

)

Manufacturing Operations (1)

 

·

 

·

 

·

 

·

 

Corporate and Other (1)

 

·

 

·

 

·

 

·

 

 

 

 

 

 

 

 

 

 

 

NXP Group

 

(29.0

)

(2.7

)

(9.0

)

(40.7

)

 

 

 

Comparable
growth

 

Currency
effects

 

Consolidation
changes

 

Nominal
growth

 

Q2 2008 versus Q2 2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive & Identification

 

(0.5

)

7.1

 

(6.9

)

(0.3

)

MultiMarket Semiconductors

 

(4.7

)

3.5

 

(5.3

)

(6.5

)

Home

 

(8.6

)

1.2

 

(1.9

)

(9.3

)

Manufacturing Operations (1)

 

·

 

·

 

·

 

·

 

Corporate and Other (1)

 

·

 

·

 

·

 

·

 

 

 

 

 

 

 

 

 

 

 

NXP Group

 

(1.9

)

3.4

 

(2.4

)

(0.9

)

 


(1) Not meaningful

 

Adjusted EBITA to EBITA to Net income (loss)

 

 

 

 

 

Q2
2008

 

Q2
2009

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITA

 

 

 

(29

)

(18

)

 

 

Add back:

 

 

 

 

 

 

 

 

 

Exit of product lines

 

 

 

(6

)

(30

)

 

 

Restructuring costs

 

 

 

(19

)

(26

)

 

 

Other incidental items

 

 

 

(25

)

(6

)

 

 

Effects of PPA

 

 

 

(27

)

(54

)

 

 

Results of equity-accounted investees

 

 

 

(7

)

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITA

 

 

 

(113

)

(134

)

 

 

 

 

 

 

 

 

 

 

 

 

Include:

 

 

 

 

 

 

 

 

 

Amortization intangible assets

 

 

 

(178

)

(83

)

 

 

Financial income (expenses)

 

 

 

(174

)

582

 

 

 

Income tax (expense) benefit

 

 

 

146

 

(21

)

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

 

(319

)

344

 

 

 

 

22



 

Adjusted EBITDA to EBITDA to Net income (loss)

 

 

 

 

 

Q2
2008

 

Q2
2009

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

 

114

 

89

 

 

 

Add back:

 

 

 

 

 

 

 

 

 

Exit of product lines

 

 

 

(6

)

(30

)

 

 

Restructuring costs

 

 

 

(19

)

(17

)*

 

 

Other incidental items

 

 

 

(25

)

(6

)

 

 

Results of equity-accounted investees

 

 

 

(7

)

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

 

57

 

36

 

 

 

 

 

 

 

 

 

 

 

 

 

Include:

 

 

 

 

 

 

 

 

 

Amortization intangible assets

 

 

 

(178

)

(83

)

 

 

Depreciation property, plant and equipment

 

 

 

(170

)

(170

)

 

 

Financial income (expenses)

 

 

 

(174

)

582

 

 

 

Income tax (expense) benefit

 

 

 

146

 

(21

)

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

 

(319

)

344

 

 

 

 


* Excluding USD 9 million depreciation property, plant and equipment arising from restructuring.

 

Adjusted EBIT to EBIT (=IFO)

 

 

 

NXP
Group

 

Automotive &
Identification

 

MultiMarket
Semiconductors

 

Home

 

Manufacturing
Operations

 

Corporate
and Other

 

Divested
Wireless
activities

 

Q2 2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBIT

 

(24

)

(17

)

33

 

(41

)

5

 

(4

)

 

Add back:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exit of product lines

 

(30

)

 

 

 

 

 

 

(30

)

 

 

 

 

Restructuring costs

 

(26

)

(2

)

 

 

(11

)

 

 

(13

)

 

 

Other incidental items

 

(6

)

(3

)

(2

)

(2

)

5

 

(4

)

 

 

Effects of PPA

 

(131

)

(34

)

(40

)

1

 

(58

)

 

 

 

 

EBIT

 

(217

)

(56

)

(9

)

(53

)

(78

)

(21

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q2 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBIT

 

(38

)

47

 

46

 

(37

)

1

 

3

 

(98

)

Add back:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exit of product lines

 

(6

)

 

 

 

 

 

 

 

 

 

 

(6

)

Restructuring costs

 

(19

)

(1

)

(2

)

(4

)

(9

)

(3

)

 

Other incidental items

 

(25

)

(4

)

 

 

 

 

 

 

(19

)

(2

)

Effects of PPA

 

(196

)

(40

)

(52

)

(30

)

(24

)

 

(50

)

EBIT

 

(284

)

2

 

(8

)

(71

)

(32

)

(19

)

(156

)

 

23



 

Composition of net debt to total equity

 

 

 

December 31,
2008

 

June 28,
2009

 

 

 

 

 

 

 

Long-term debt

 

5,964

 

5,442

 

Short-term debt

 

403

 

608

 

Total debt

 

6,367

 

6,050

 

Cash and cash equivalents

 

(1,796

)

(1,373

)

Net debt (total debt less cash and cash equivalents)

 

4,571

 

4,677

 

 

 

 

 

 

 

Minority interests

 

213

 

179

 

Shareholder’s equity

 

1,075

 

849

 

Total equity

 

1,288

 

1,028

 

 

 

 

 

 

 

Net debt and total equity

 

5,859

 

5,705

 

Net debt divided by net debt and total equity (in %)

 

78

 

82

 

Total equity divided by net debt and total equity (in %)

 

22

 

18

 

 

24



 

Supplemental consolidated statement of operations for the period January to June, 2009

 

all amounts in millions of USD

 

 

 

NXP
B.V.

 

Guarantors

 

Non-guarantors
(restricted)

 

Sub-
total

 

Non-guarantors (unrestricted)

 

Eliminations/
reclassifications

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

 

1,202

 

360

 

1,562

 

43

 

 

1,605

 

Intercompany sales

 

 

274

 

143

 

417

 

84

 

(501

)

 

Total sales

 

 

1,476

 

503

 

1,979

 

127

 

(501

)

1,605

 

Cost of sales

 

(32

)

(1,141

)

(447

)

(1,620

)

(130

)

399

 

(1,351

)

Gross margin

 

(32

)

335

 

56

 

359

 

(3

)

(102

)

254

 

Selling expenses

 

 

(88

)

(41

)

(129

)

 

9

 

(120

)

General and administrative expenses

 

(168

)

(212

)

(3

)

(383

)

1

 

45

 

(337

)

Research and development expenses

 

7

 

(321

)

(112

)

(426

)

3

 

48

 

(375

)

Write-off of acquired in-process   research and development

 

 

 

 

 

 

 

 

Other business income (loss)

 

(64

)

(28

)

109

 

17

 

(3

)

 

14

 

Income (loss) from operations

 

(257

)

(314

)

9

 

(562

)

(2

)

 

(564

)

Financial income and expenses

 

341

 

(72

)

4

 

273

 

 

 

273

 

Income subsidiaries

 

(349

)

 

 

 

(349

)

 

349

 

 

Income (loss) before taxes

 

(265

)

(386

)

13

 

(638

)

(2

)

349

 

(291

)

Income tax benefit (expense)

 

(29

)

17

 

4

 

(8

)

 

 

(8

)

Income (loss) after taxes

 

(294

)

(369

)

17

 

(646

)

(2

)

349

 

(299

)

Results relating to equity-accounted   investees

 

75

 

 

 

75

 

 

 

75

 

Net income (loss)

 

(219

)

(369

)

17

 

(571

)

(2

)

349

 

(224

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NXP
B.V.

 

Guarantors

 

Non-guarantors
(restricted)

 

Sub-
total

 

Non-guarantors
(unrestricted)

 

Eliminations/
 reclassifications

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attribution of net income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to   shareholder

 

(219

)

(369

)

21

 

(567

)

(1

)

349

 

(219

)

Net income (loss) attributable to   minority interests

 

 

 

(4

)

(4

)

(1

)

 

(5

)

Net income (loss)

 

(219

)

(369

)

17

 

(571

)

(2

)

349

 

(224

)

 

25



 

Supplemental consolidated balance sheet at June 28, 2009

 

all amounts in millions of USD

 

 

 

NXP
B.V.

 

Guarantors

 

Non-
guarantors

(restricted)

 

Sub-
total

 

Non-
guarantors
(unrestricted)

 

Eliminations/
reclassifications

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

893

 

241

 

79

 

1,213

 

160

 

 

1,373

 

Securities

 

 

 

 

 

 

 

 

Receivables

 

5

 

370

 

159

 

534

 

10

 

 

544

 

Intercompany accounts receivable

 

552

 

207

 

73

 

832

 

53

 

(885

)

 

Inventories

 

 

533

 

54

 

587

 

27

 

 

614

 

Other current assets

 

20

 

158

 

28

 

206

 

3

 

 

209

 

Total current assets

 

1,470

 

1,509

 

393

 

3,372

 

253

 

(885

)

2,740

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in equity-accounted investees

 

48

 

 

 

48

 

 

 

48

 

Investments in affiliated companies

 

961

 

 

 

961

 

 

(961

)

 

Other non-current financial assets

 

2

 

16

 

2

 

20

 

 

 

20

 

Other non-current assets

 

244

 

314

 

50

 

608

 

2

 

 

610

 

Property, plant and equipment:

 

174

 

1,008

 

140

 

1,322

 

227

 

 

1,549

 

Intangible assets excluding goodwill

 

2,161

 

37

 

7

 

2,205

 

1

 

 

2,206

 

Goodwill

 

2,651

 

 

 

2,651

 

 

 

2,651

 

Total non-current assets

 

6,241

 

1,375

 

199

 

7,815

 

230

 

(961

)

7,084

 

Total assets

 

7,711

 

2,884

 

592

 

11,187

 

483

 

(1,846

)

9,824

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholder’s equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts and notes payable

 

7

 

385

 

73

 

465

 

18

 

 

483

 

Intercompany accounts payable

 

3

 

668

 

209

 

880

 

5

 

(885

)

 

Accrued liabilities

 

217

 

378

 

136

 

731

 

20

 

 

751

 

Short-term provisions

 

 

105

 

2

 

107

 

 

 

107

 

Other current liabilities

 

3

 

124

 

51

 

178

 

 

 

178

 

Short-term debt

 

600

 

 

7

 

607

 

1

 

 

608

 

Intercompany financing

 

 

3,325

 

(83

)

3,242

 

14

 

(3,256

)

 

Total current liabilities

 

830

 

4,985

 

395

 

6,210

 

58

 

(4,141

)

2,127

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

5,435

 

3

 

4

 

5,442

 

 

 

5,442

 

Long-term provisions

 

594

 

441

 

82

 

1,117

 

5

 

 

1,122

 

Other non-current liabilities

 

3

 

81

 

13

 

97

 

8

 

 

105

 

Total non-current liabilities

 

6,032

 

525

 

99

 

6,656

 

13

 

 

6,669

 

Minority interests

 

 

 

18

 

18

 

161

 

 

179

 

Shareholder’s equity

 

849

 

(2,626

)

80

 

(1,697

)

251

 

2,295

 

849

 

Total equity

 

849

 

(2,626

)

98

 

(1,679

)

412

 

2,295

 

1,028

 

Total liabilities and equity

 

7,711

 

2,884

 

592

 

11,187

 

483

 

(1,846

)

9,824

 

 

26



 

Supplemental consolidated statement of cash flows for the period January to June, 2009

 

all amounts in millions of USD

 

 

 

NXP B.V.

 

Guarantors

 

Non-
guarantors
(restricted)

 

Sub-
Total

 

Non-
guarantors
(unrestricted)

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

(219

)

(369

)

17

 

(571

)

(2

)

349

 

(224

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Elimination (income) loss subsidiaries

 

349

 

 

 

349

 

 

(349

)

 

Depreciation and amortization

 

216

 

171

 

27

 

414

 

50

 

 

464

 

Net gain on sale of assets

 

(86

)

(6

)

4

 

(88

)

 

 

(88

)

Gain on debt exchange

 

(517

)

 

 

(517

)

 

 

(517

)

Results relating to equity-accounted investees

 

 

 

 

 

 

 

 

Dividends paid to minority shareholders

 

 

 

 

 

(29

)

 

(29

)

Decrease (increase) in receivables and other current assets

 

35

 

(42

)

(9

)

(16

)

(7

)

 

(23

)

Decrease in inventories

 

 

5

 

17

 

22

 

(5

)

 

17

 

Increase (decrease) in accounts payable, accrued and other liabilities

 

(88

)

(207

)

11

 

(284

)

8

 

 

(276

)

Decrease (increase) intercompany current accounts

 

(433

)

498

 

(63

)

2

 

(2

)

 

 

Increase in non-current receivables/other assets

 

50

 

(137

)

(22

)

(109

)

 

 

(109

)

Increase (decrease) in provisions

 

(34

)

85

 

(28

)

23

 

 

 

23

 

Other items

 

36

 

12

 

(3

)

45

 

 

 

45

 

Net cash provided by (used for) operating activities

 

(691

)

10

 

(49

)

(730

)

13

 

 

(717

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase of intangible assets

 

 

(1

)

(2

)

(3

)

 

 

(3

)

Capital expenditures on property, plant and equipment

 

 

(37

)

(6

)

(43

)

(1

)

 

(44

)

Proceeds from disposals of property, plant and equipment

 

 

11

 

 

11

 

 

 

11

 

Proceeds from the sale of securities

 

20

 

 

 

20

 

 

 

20

 

Purchase of interest in businesses

 

 

 

 

 

 

 

 

Proceeds from sale of interests in businesses

 

105

 

 

18

 

123

 

 

 

123

 

Net cash (used for) provided by investing activities

 

125

 

(27

)

10

 

108

 

(1

)

 

107

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in debt

 

200

 

(1

)

5

 

204

 

 

 

204

 

Net changes in intercompany financing

 

(117

)

52

 

63

 

(2

)

2

 

 

 

Net changes in intercompany equity

 

281

 

(199

)

(36

)

46

 

(46

)

 

 

Net cash provided by (used for) financing activities

 

364

 

(148

)

32

 

248

 

(44

)

 

204

 

Effect of changes in exchange rates on cash positions

 

(15

)

1

 

(3

)

(17

)

 

 

(17

)

Increase (decrease) in cash and cash equivalents

 

(217

)

(164

)

(10

)

(391

)

(32

)

 

(423

)

Cash and cash equivalents at beginning of period

 

1,110

 

405

 

89

 

1,604

 

192

 

 

1,796

 

Cash and cash equivalents at end of period

 

893

 

241

 

79

 

1,213

 

160

 

 

1,373

 

 

27



 

Quarterly statistics

 

all amounts in millions of USD unless otherwise stated

 

 

 

2008

 

2009

 

 

 

1st quarter

 

2nd quarter

 

3rd quarter

 

4th quarter

 

1st quarter

 

2nd quarter

 

3rd quarter

 

4th quarter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

1,519

 

1,524

 

1,374

 

1,026

 

702

 

903

 

 

 

 

 

% increase

 

4.0

 

(0.9

)

(16.4

)

(38.9

)

(53.8

)

(40.7

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBIT

 

(167

)

(284

)

(1,937

)

(258

)

(347

)

(217

)

 

 

 

 

as a % of sales

 

(11.0

)

(18.6

)

(141.0

)

(25.1

)

(49.4

)

(24.0

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITA

 

6

 

(113

)

(1,089

)

(402

)

(182

)

(134

)

 

 

 

 

as a % of sales

 

0.4

 

(7.4

)

(79.3

)

(39.2

)

(25.9

)

(14.8

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

174

 

57

 

(869

)

(267

)

(61

)

36

 

 

 

 

 

as a % of sales

 

11.5

 

3.7

 

(63.2

)

(26.0

)

(8.7

)

4.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITA

 

41

 

(29

)

15

 

(84

)

(188

)

(18

)

 

 

 

 

as a % of sales

 

2.7

 

(1.9

)

1.1

 

(8.2

)

(26.8

)

(2.0

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

183

 

114

 

147

 

41

 

(71

)

89

 

 

 

 

 

as a % of sales

 

12.0

 

7.5

 

10.7

 

4.0

 

(10.1

)

9.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

(66

)

(319

)

(2,540

)

(649

)

(568

)

344

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

January-
March

 

January-
June

 

January-
September

 

January-
December

 

January-
March

 

January-
June

 

January-
September

 

January-
December

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

1,519

 

3,043

 

4,417

 

5,443

 

702

 

1,605

 

 

 

 

 

% increase

 

4.0

 

1.5

 

(4.9

)

(13.9

)

(53.8

)

(47.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBIT

 

(167

)

(451

)

(2,388

)

(2,646

)

(347

)

(564

)

 

 

 

 

as a % of sales

 

(11.0

)

(14.8

)

(54.1

)

(48.6

)

(49.4

)

(35.1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITA

 

6

 

(107

)

(1,196

)

(1,598

)

(182

)

(316

)

 

 

 

 

as a % of sales

 

0.4

 

(3.5

)

(27.1

)

(29.4

)

(25.9

)

(19.7

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

174

 

231

 

(638

)

(905

)

(61

)

(25

)

 

 

 

 

as a % of sales

 

11.5

 

7.6

 

(14.4

)

(16.6

)

(8.7

)

(1.6

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITA

 

41

 

12

 

27

 

(57

)

(188

)

(206

)

 

 

 

 

as a % of sales

 

2.7

 

0.4

 

0.6

 

(1.0

)

(26.8

)

(12.8

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

183

 

297

 

444

 

485

 

(71

)

18

 

 

 

 

 

as a % of sales

 

12.0

 

9.8

 

10.1

 

8.9

 

(10.1

)

1.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

(66

)

(385

)

(2,925

)

(3,574

)

(568

)

(224

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

period ending 2008

 

Period ending 2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventories as a % of sales

 

16.3

 

15.9

 

12.0

 

11.6

 

12.8

 

15.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net debt: total equity ratio

 

54 : 46

 

57 : 43

 

70 : 30

 

78 : 22

 

88 : 12

 

82:18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employees (in FTE)

 

36,800

 

36,576

 

33,622

 

30,174

 

28,029

 

29,012

 

 

 

 

 

 

28



Exhibit 2

 

 

NXP Semiconductors Announces Second Quarter 2009 Results

 

Q2 Highlights

 

·                  Q2 sales at USD 857* M versus USD 1,200 M in Q2 2008 (excl. wireless activities) and USD 673** M in Q1 2009.

 

·                  Comparable QoQ sales increased by 26.2%. The increase in sales is largely attributable to supply chain replenishment and increased demand in China.

 

·                  Q2 adjusted EBITDA (excluding effects of Purchase Price Accounting and incidental items) was a profit of USD 89 M, compared to a profit of USD 114 M in Q2 2008 and a loss of USD 71 M in Q1 2009.

 

·                  Q2 Net income amounted to profit of USD 344 M compared to loss of USD 319 M in Q2 2008 and a loss in Q1 2009 of USD 568 M.

 

·                  Cash position of USD 1,373 M at the end of Q2 compared to USD 1,706 M at the end of Q1 2009.

 

·                  Factory loading of 53% in Q2 compared to 78% in Q2 2008 and 36% in Q1 2009.

 

·                  Book to bill ratio at 1.20 in Q2 2009 compared to 1.18 in Q1 2009.

 


*) Excluding USD 46 million wafer sales to ST-Ericsson in Q2 2009

**) Excluding USD 29 million wafer sales to ST-NXP Wireless JV in Q1 2009

 

 

Eindhoven, The Netherlands, July 24, 2009 – NXP Semiconductors today announced second quarter sales of USD 857 million, a comparable increase of 26.2% from the first quarter of 2009. The increase in sales is mainly attributable to supply chain replenishment following a soft first quarter of 2009 and the continued impact of various, mainly Chinese, stimulus packages.

 

Adjusted EBITDA in the second quarter amounted to a profit of USD 89 million, down from a profit of USD 114 million in the second quarter of 2008 and up from a loss of USD 71 million in the first quarter of 2009. Adjusted EBITA was a loss of USD 18 million this quarter compared to a loss of USD 29 million in the same period last year and a loss of USD 188 million in the previous quarter.

 

Net income for the second quarter of 2009 was a profit of USD 344 million compared to a loss of USD 319 million in the second quarter of 2008 and a loss of USD 568 in the first quarter of 2009. The increase in net income is largely attributable to higher financial income as a result of the bond exchanges.

 

The cash position was USD 1,373 million at the end of the second quarter compared with USD 1,706 million at the end of the first quarter of 2009.

 

The execution of the Redesign Program is on track. The fab in Caen was sold during the second quarter of 2009. The fab in Fishkill stopped production in early July 2009.

 

 

1



 

Outlook: The weak macro-economic conditions are still continuing. Although we have recently experienced positive order book developments, we believe this may be driven mainly by supply chain replenishment and not by a fundamental improvement of the semiconductors market, apart from China where we have seen real demand increase and recent improvements in other Asian countries. Considering the current business development we expect a sequential sales increase between 10% and 20% in the third quarter on a business and currency comparable basis (excluding wafer sales to ST-Ericsson). However, visibility beyond the third quarter is still limited.

 

The full report is available on NXP website (www.nxp.com/investor).

 

About NXP Semiconductors

 

NXP is a leading semiconductor company founded by Philips more than 50 years ago. Headquartered in Europe, the company has about 29,000 employees working in more than 30 countries and posted sales of USD 5.4 billion (including the Mobile & Personal business) in 2008. NXP creates semiconductors, system solutions and software that deliver better sensory experiences in TVs, set-top boxes, identification applications, mobile phones, cars and a wide range of other electronic devices. News from NXP is located at www.nxp.com.

 

For further information, please contact:

 

Media:

Lieke de Jong-Tops

Tel. +31 40 27 25202

lieke.de.jong-tops@nxp.com

 

Investors:

Jan Maarten Ingen Housz

Tel. +31 40 27 28685

janmaarten.ingen.housz@nxp.com

 

2