NXP Semiconductors Announces Third Quarter 2008 Results

EINDHOVEN, The Netherlands — NXP Semiconductors today announced third quarter sales in line with expectations of USD 1,336 million, a comparable decrease of 4.2% on the third quarter of 2007 and a comparable increase of 1.0% over the second quarter of 2008. Adjusted EBITDA improved sequentially in the third quarter to USD 147 million, down from USD 310 million in the third quarter of 2007 and up from USD 114 million in the second quarter of 2008. Adjusted EBITA showed a profit of USD 15 million this quarter compared to a profit of USD 136 million in the same period last year and a loss of USD 29 million in the previous quarter.

Home

Sales, on a comparable year-on-year basis, decreased 20.5% mainly caused by the continued decline in the CRT TV market. Sequentially, on a comparable basis, the sales declined by 0.7%, reflecting the current weak economic environment and the limited seasonal uptake. The sales development is caused by the continued decline in the CRT market and the weakness in the mainstream (retail) STB and Can Tuner markets. Improvements were achieved particularly in the Digital TV System on Chip market where the Home business won market share after having started mass production for a major Japanese OEM.

EBIT in the 3rd quarter of 2008 amounted to a loss of USD 704 million compared to a loss of USD 60 million in the same period last year. Included are PPA effects of USD 39 million (2007: USD 28 million) and incidental items of a profit of USD 5 million (2007: a loss of USD 6 million). The 2008 incidental items were mainly related to the merger result in connection with the formation of the NuTune joint venture. Incidental items in 2007 were related to restructuring charges in the R&D organization. An impairment loss of USD 656 million is recognized in the 3rd quarter of 2008.

Adjusted EBIT improved from a loss of USD 26 million in the 3rd quarter of 2007 to a loss of USD 14 million in the reporting period. Despite lower sales, the adjusted EBIT improved due to better margins and lower operational expenditures resulting from the ongoing restructuring in the Home business. The translation difference on adjusted EBIT was a loss of USD 6 million compared to the same quarter of last year.

Sequentially the adjusted EBIT improved from a loss of USD 19 million in the 2nd quarter of 2008 to a loss of USD 14 million, attributable to the higher sales and improved product mix.

NXP successfully completed the acquisition of Conexant’s Broadband Media Processing (BMP), with industry leading products for satellite, cable and IPTV applications, with effect of August 8, 2008. The BMP business is consolidated within BU Home.

Effective September 1, 2008, NXP completed the formation of a joint venture for can tuner module
operations with Thomson, called NuTune. NXP owns 55% in this JV, Thomson owns the remaining 45%. The JV is consolidated in NXP’s BU Home as per September 1, 2008.

Both activities contributed to sales in the quarter.

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