nxpi-6k_20190430.htm

 

 

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

April 30, 2019

 

NXP Semiconductors N.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  ¨

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  ¨             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  ¨             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  ¨            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 interim report of NXP Semiconductors N.V. for the period ended March 31, 2019.

Exhibits

 

1.

  

Interim report of NXP Semiconductors N.V. for the period ended March 31, 2019.

 

 


 

 

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 30th of April 2019.

 

NXP Semiconductors N.V.

 

 

/s/ P. Kelly

Name: P. Kelly, CFO

 

 


 

 

NXP Semiconductors

 

INTERIM REPORT

NXP SEMICONDUCTORS N.V.

 

PERIOD ENDED

March 31, 2019

 

 

 


 

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 achieve targeted efficiencies and cost savings; 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 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 markets 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 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

 

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.

 

Use of non-U.S. GAAP information

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

  

 

 

 

 

 

 

 

 

 

Table of Contents

 

 

 

 

 

 

 

 

Page

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

3

Introduction

 

3

Results of Operations

 

3

Employees

 

6

Liquidity and Capital Resources

 

7

Contractual Obligations

 

8

Off-balance Sheet Arrangements

 

8

Condensed consolidated financial statements:

 

 

Condensed consolidated statements of operations for the three months ended March 31, 2019 and April 1, 2018 (unaudited)

 

9

Condensed consolidated statements of comprehensive income for the three months ended March 31, 2019 and April 1, 2018 (unaudited)

 

10

Condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018 (unaudited)

 

11

Condensed consolidated statements of cash flows for the three months ended March 31, 2019 and April 1, 2018 (unaudited)

 

12

Condensed consolidated statements of changes in equity for the three months ended March 31, 2019 and April 1, 2018 (unaudited)

 

13

Notes to the condensed consolidated financial statements (unaudited)

 

14

 

 

[-2]


 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

This interim Management’s Discussion and Analysis should be read in conjunction with the MD&A in our Annual Report on Form 20‑F for the year ended December 31, 2018. The various sections of this MD&A contain a number of forward-looking statements that involve a number of risks and uncertainties, including any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, uncertain events or assumptions, and other characterizations of future events or circumstances. Such statements are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this filing and particularly in “Risk Factors” in Part I, Item 3D of our Annual Report on Form 20-F, and as may be updated in our subsequent Quarterly Reports on Form 6-K. Our actual results may differ materially, and these forward-looking statements do not reflect the potential impact of any divestitures, mergers, acquisitions, or other business combinations that had not been completed as of April 30, 2019.

 

Introduction

 

The Company

NXP Semiconductors N.V. (including our subsidiaries, referred to collectively herein as “NXP”, “NXP Semiconductors” and the “Company”) is a global semiconductor company incorporated in the Netherlands as a Dutch public company with limited liability (naamloze vennootschap). NXP provides secure connectivity solutions for embedded applications, driving innovation in the secure connected vehicle, end-to-end security, and the smart connected solutions markets. Our products leverage our deep application and technology insight, with particular expertise in embedded digital processing, precision analog-mixed signal design, radio frequency, power management, high-speed interface, and end-to-end security. Our hardware and software product solutions are adapted by market leaders in the end-markets of automotive, industrial and IoT, mobile and communications infrastructure.

 

Our corporate seat is in Eindhoven, the Netherlands. Our principal executive office is at High Tech Campus 60, 5656 AG Eindhoven, the Netherlands, and our telephone number is +31 40 2729999. Our registered agent in the United States is NXP USA, Inc., 6501 William Cannon Dr. West, Austin, Texas 78735, United States of America, phone number +1 512 895 2000.

 

Results of Operations

 

The following table presents the composition of operating income (loss):

 

($ in millions, unless otherwise stated)

 

Q1 2019

 

 

Q1 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

2,094

 

 

 

2,269

 

 

% nominal growth

 

 

(7.7

)

 

 

2.6

 

 

Gross profit

 

 

1,072

 

 

 

1,172

 

 

Research and development

 

 

(415

)

 

 

(426

)

 

Selling, general and administrative

 

 

(248

)

 

 

(248

)

 

Amortization of acquisition-related intangible assets

 

 

(357

)

 

 

(360

)

 

Other income (expense)

 

 

2

 

 

-

 

 

Operating income (loss)

 

 

54

 

 

 

138

 

 

 

Q1 2019 compared to Q1 2018

In the quarter ended March 31, 2019, revenue declined by $175 million as compared to the quarter ended April 1, 2018. Included in the latter is $38 million of revenue related to divested businesses or activities. As of January 1, 2019, income and expenses derived from manufacturing service arrangements (“MSA”) and transitional service arrangements (“TSA”) that are put into place when we divest a business or activity, are included in other income (expense). Gross profit decreased in the first quarter of 2019 as compared to the first quarter of 2018 primarily as a result of the decline in sales. Operating expenses in the first quarter of 2019 decreased slightly as compared to the first quarter of 2018 as a result of decreased research and development costs. Other income (expense) in the first quarter of 2019 includes the net result of income and expenses derived from divested businesses or activities as discussed above.

 

[-3]


 

The table below depicts the Purchase Price Accounting (“PPA”) effects (reflecting the amortization related to the fair value adjustments resulting from the acquisition of Freescale in addition to the formation of NXP) for each of the three month periods ended March 31, 2019 and April 1, 2018, respectively, per line item in the statement of operations:

 

($ in millions, unless otherwise stated)

 

Q1 2019

 

 

Q1 2018

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

(17

)

 

 

(19

)

 

Selling, general and administrative

 

 

(1

)

 

 

(3

)

 

Amortization of acquisition-related intangible assets

 

 

(357

)

 

 

(360

)

 

Operating income (loss)

 

 

(375

)

 

 

(382

)

 

 

Prior to January 1, 2019, HPMS was our sole reportable segment. Corporate and Other represented the remaining portion to reconcile to the Consolidated Financial Statements. Effective January 1, 2019, NXP removed the reference to HPMS in its organizational structure in acknowledgement of the one reportable segment representing the entity as a whole.

 

Revenue

 

The following table presents revenue and revenue growth for each of the three month periods ended March 31, 2019 and April 1, 2018, respectively:

 

($ in millions, unless otherwise stated)

 

Q1 2019

 

 

Q1 2018

 

 

 

 

Revenue

 

 

Growth %

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

2,094

 

 

 

(7.7

)

 

 

2,269

 

 

 

Q1 2019 compared to Q1 2018

Revenue decreased $175 million to $2,094 million in the first quarter of 2019 compared to $2,269 million in the first quarter of 2018, a year-on-year decrease of 7.7%. Included in the first quarter of 2018 is the revenue related to divested businesses or activities, $38 million. The decline is mainly related to lower sales to distributors due to lower end-customer demand, in particular in the Greater China region.

 

Gross Profit

 

The following table presents gross profit for each of the three month periods ended March 31, 2019 and April 1, 2018, respectively:

 

($ in millions, unless otherwise stated)

 

Q1 2019

 

 

Q1 2018

 

 

 

 

Gross profit

 

 

% of revenue

 

 

Gross profit

 

 

% of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

1,072

 

 

 

51.2

 

 

 

1,172

 

 

 

51.7

 

 

 

Q1 2019 compared to Q1 2018

Gross profit in the first quarter of 2019 was $1,072 million, or 51.2% of revenue compared to $1,172 million, or 51.7% of revenue in the first quarter of 2018, a decrease of $100 million. The decrease was primarily driven by lower revenue resulting from lower demand.

 

[-4]


 

Operating expenses

 

The following table presents operating expenses for each of the three month periods ended March 31, 2019 and April 1, 2018:

 

($ in millions, unless otherwise stated)

 

Q1 2019

 

 

Q1 2018

 

 

 

 

Operating

expenses

 

 

% of revenue

 

 

Operating

expenses

 

 

% of  revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

1,020

 

 

 

48.7

 

 

 

1,034

 

 

 

45.6

 

 

 

The following table below presents the composition of operating expenses by line item in the statement of operations:

 

($ in millions, unless otherwise stated)

 

Q1 2019

 

 

Q1 2018

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

415

 

 

 

426

 

 

Selling, general and administrative

 

 

248

 

 

 

248

 

 

Amortization of acquisition-related intangible assets

 

 

357

 

 

 

360

 

 

Operating expenses

 

 

1,020

 

 

 

1,034

 

 

 

Q1 2019 compared to Q1 2018

Operating expenses decreased $14 million to $1,020 million in the first quarter of 2019, compared to $1,034 million in the first quarter of 2018. The decrease in operating expenses is mainly the result of ongoing cost control, resulting in lower expenditures in materials and personnel-related cost, specifically in research and development.

 

Operating income (loss)

 

The following table presents operating income (loss) for each of the three month periods ended March 31, 2019 and April 1, 2018:

 

($ in millions, unless otherwise stated)

 

Q1 2019

 

 

Q1 2018

 

 

 

 

Operating

income (loss)

 

 

% of revenue

 

 

Operating

income (loss)

 

 

% of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

54

 

 

 

2.6

 

 

 

138

 

 

 

6.1

 

 

 

Q1 2019 compared to Q1 2018

Operating income (loss) decreased $84 million to $54 million in the first quarter of 2019, compared to $138 million in the first quarter of 2018. The decrease is the result of the items discussed above.

 

Financial income (expense)

 

The following table presents the details of financial income and expenses:

 

($ in millions, unless otherwise stated)

 

Q1 2019

 

 

Q1 2018

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

13

 

 

 

13

 

 

Interest expense

 

 

(87

)

 

 

(75

)

 

Total interest expense, net

 

 

(74

)

 

 

(62

)

 

Foreign exchange rate results

 

 

(6

)

 

 

(5

)

 

Miscellaneous financing costs/income and other, net

 

 

(3

)

 

 

(1

)

 

Total other financial income (expense)

 

 

(9

)

 

 

(6

)

 

Total

 

 

(83

)

 

 

(68

)

 

 

[-5]


 

Q1 2019 compared to Q1 2018

Financial income (expense) was an expense of $83 million in the first quarter of 2019, compared to an expense of $68 million in the first quarter of 2018. As a result of entering into $2,000 million of debt in the fourth quarter of 2018, interest expense increased.

 

Benefit (provision) for income taxes

 

Q1 2019 compared to Q1 2018

Our effective tax rate reflects the impact of tax incentives, non-deductible expenses, change in valuation allowance, a portion of our earnings being taxed in foreign jurisdictions at rates different than the Netherlands statutory tax rate, and the mix of income and losses in various jurisdictions. Our effective tax rate for the first quarter of 2019 was a benefit of 31.0% on a pre-tax loss compared with an expense of 2.9% on a pre-tax profit for the first quarter of 2018. The movement in our effective tax rate reflects mainly the increase in the change in valuation allowance and non-deductible expenses which is partly offset by higher tax incentive benefits in the first three months of 2019 compared to the first three months of 2018.

 

Net income (loss)

 

The following table presents the composition of net income for the periods reported:

 

($ in millions, unless otherwise stated)

 

Q1 2019

 

 

Q1 2018

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

54

 

 

 

138

 

 

Financial income (expense)

 

 

(83

)

 

 

(68

)

 

Benefit (provision) for income taxes

 

 

9

 

 

 

(2

)

 

Result equity-accounted investees

 

 

4

 

 

 

2

 

 

Net income (loss)

 

 

(16

)

 

 

70

 

 

 

Non-controlling interests

 

Q1 2019 compared to Q1 2018

Non-controlling interests are related to the third party share in the results of consolidated companies, predominantly SSMC. Their share of non-controlling interests amounted to a profit of $5 million in the first quarter of 2019, compared to $12 million in the first quarter of 2018.

 

Employees

 

As of March 31, 2019 we had 29,200 full-time equivalent employees (as of December 31, 2018: 30,000 full-time equivalent employees). The following table indicates the percentage of full-time equivalent employees per geographic area:

 

% as of

 

March 31, 2019

 

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

Europe and Africa

 

 

20

 

 

 

20

 

 

Americas

 

 

19

 

 

 

20

 

 

Greater China

 

 

25

 

 

 

25

 

 

Asia Pacific

 

 

36

 

 

 

35

 

 

Total

 

 

100

 

 

 

100

 

 

 

 

[-6]


 

Liquidity and Capital Resources

 

We derive our liquidity and capital resources primarily from our cash flows from operations. We continue to generate strong positive operating cash flows. At the end of the first quarter of 2019, our cash balance was $2,192 million, a decrease of $597 million compared to December 31, 2018. Taking into account the available amount of the Secured Revolving Credit Facility of $600 million, we had access to $2,792 million of liquidity as of March 31, 2019.

 

We currently use cash to fund operations, meet working capital requirements, for capital expenditures and for potential common stock repurchases, dividends and strategic investments. Based on past performance and current expectations, we believe that our current available sources of funds (including cash and cash equivalents, RCF Agreement, plus anticipated cash generated from operations) will be adequate to finance our operations, working capital requirements, capital expenditures and potential dividends for at least the next year. Our capital expenditures were $144 million in the first three months of 2019, compared to $156 million in the first three months of 2018. During the three month period ended March 31, 2019, we repurchased $715 million, or 8.5 million shares of our common stock pursuant to our share buyback program at a weighted average price of $84.31 per share.

 

Our total debt amounted to $7,340 million as of March 31, 2019, a decrease of $14 million compared to December 31, 2018 ($7,354 million).

 

At  March 31, 2019 our cash balance was $2,192 million of which $136 million was held by SSMC, our consolidated joint venture company with TSMC. Under the terms of our joint venture agreement with TSMC, a portion of this cash can be distributed by way of a dividend to us, but 38.8% of the dividend will be paid to our joint venture partner.

 

Cash flows

 

Our cash and cash equivalents during the first three months of 2019 decreased by $596 million (excluding the effect of changes in exchange rates on our cash position of $1 million) as follows:

 

($ in millions, unless otherwise stated)

 

Q1 2019

 

 

Q1 2018

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used for) operating activities

 

 

296

 

 

 

620

 

 

Net cash provided by (used for) investing activities

 

 

(136

)

 

 

(174

)

 

Net cash provided by (used for) financing activities

 

 

(756

)

 

 

(10

)

 

Net cash increase (decrease) in cash and cash equivalents

 

 

(596

)

 

 

436

 

 

 

During the three months ended March 31, 2019, cash generated by operating activities of $296 million was primarily the result of $16 million of net loss, non-cash adjustments to net income of $535 million and a decrease in the net change in operating assets and liabilities of $234 million. Cash used in investing activities of $136 million during the three months ended March 31, 2019, consisted of cash used to acquire property, plant and equipment of $144 million, cash used to acquire intangible assets of $28 million, offset by cash provided by the sale of our remaining equity interest in WeEn, net of tax for $37 million. Cash used in financing activities of $756 million during the three months ended March 31, 2019, consisted of dividends paid to shareholders of $73 million, cash used to repurchase common stock of $715 million, offset by proceeds from the exercise of stock options of $32 million.

 

During the three months ended April 1, 2018, cash generated by operating activities of $620 million was primarily the result of $70 million of net income, non-cash adjustments to net income of $529 million and an increase in the net change in operating assets and liabilities of $19 million. Cash used in investing activities of $174 million during the three months ended April 1, 2018 consisted of cash used to acquire property, plant and equipment of $156 million and cash used to acquire intangible assets of $18 million. Cash used in financing activities of $10 million during the three months ended April 1, 2018 consisted of cash used to repurchase common stock of $30 million, offset by proceeds from the exercise of stock options of $20 million.

 

[-7]


 

YTD 2019 Financing Activities

 

There were no financing activities attributable to the first quarter of 2019.

 

YTD 2018 Financing Activities

 

There were no financing activities attributable to the first quarter of 2018.

 

Contractual Obligations

 

During the first three months of 2019, our contractual obligations decreased by $1 million resulting from normal business operations.

 

 

Off-balance Sheet Arrangements

 

At the end of the first quarter of 2019, we had no off-balance sheet arrangements other than commitments resulting from normal business operations.

 

 

[-8]


 

Condensed consolidated statements of operations of NXP Semiconductors N.V. (unaudited)

($ in millions, unless otherwise stated)

 

 

 

For the three months ended

 

 

 

 

March 31, 2019

 

 

April 1, 2018

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

2,094

 

 

 

2,269

 

 

Cost of revenue

 

 

(1,022

)

 

 

(1,097

)

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

1,072

 

 

 

1,172

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

(415

)

 

 

(426

)

 

Selling, general and administrative

 

 

(248

)

 

 

(248

)

 

Amortization of acquisition-related intangible assets

 

 

(357

)

 

 

(360

)

 

Other income (expense)

 

 

2

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

54

 

 

 

138

 

 

 

 

 

 

 

 

 

 

 

 

Financial income (expense):

 

 

 

 

 

 

 

 

 

Other financial income (expense)

 

 

(83

)

 

 

(68

)

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

(29

)

 

 

70

 

 

 

 

 

 

 

 

 

 

 

 

Benefit (provision) for income taxes

 

 

9

 

 

 

(2

)

 

Results relating to equity-accounted investees

 

 

4

 

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

(16

)

 

 

70

 

 

 

 

 

 

 

 

 

 

 

 

Less: Net income (loss) attributable to non-controlling interests

 

 

5

 

 

 

12

 

 

Net income (loss) attributable to stockholders

 

 

(21

)

 

 

58

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share data:

 

 

 

 

 

 

 

 

 

Net income (loss) per common share attributable to Stockholders in $

 

 

 

 

 

 

 

 

 

-     Basic

 

 

(0.07

)

 

 

0.17

 

 

-     Diluted

 

 

(0.07

)

 

 

0.17

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares of common stock outstanding during the period (in

   thousands):

 

 

 

 

 

 

 

 

 

-     Basic

 

 

287,227

 

 

 

343,661

 

 

-     Diluted

 

 

287,227

 

 

 

346,899

 

 

 

The accompanying notes to the condensed consolidated financial statements are an integral part of these statements

[-9]


 

Condensed consolidated statements of comprehensive income of NXP Semiconductors N.V. (unaudited)

($ in millions, unless otherwise stated)

 

 

 

For the three months ended

 

 

 

 

March 31, 2019

 

 

April 1, 2018

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

(16

)

 

 

70

 

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

Change in fair value cash flow hedges

 

 

-

 

 

 

4

 

 

Change in foreign currency translation adjustment

 

 

(12

)

 

 

30

 

 

Change in net actuarial gain (loss)

 

 

(2

)

 

 

(2

)

 

Change in unrealized gains/losses available-for-sale securities

 

 

-

 

 

 

3

 

 

Total other comprehensive income (loss)

 

 

(14

)

 

 

35

 

 

Total comprehensive income (loss)

 

 

(30

)

 

 

105

 

 

 

 

 

 

 

 

 

 

 

 

Less: Comprehensive income (loss) attributable to non-controlling interests

 

 

5

 

 

 

12

 

 

Total comprehensive income (loss) attributable to stockholders

 

 

(35

)

 

 

93

 

 

 

The accompanying notes to the condensed consolidated financial statements are an integral part of these statements

[-10]


 

Condensed consolidated balance sheets of NXP Semiconductors N.V. (unaudited)

($ in millions, unless otherwise stated)

 

 

 

 

March 31, 2019

 

 

December 31, 2018

 

 

Assets

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

2,192

 

 

 

2,789

 

 

 

Accounts receivable, net

 

 

800

 

 

 

792

 

 

 

Inventories, net

 

 

1,241

 

 

 

1,279

 

 

 

Other current assets

 

 

387

 

 

 

365

 

 

 

Total current assets

 

 

4,620

 

 

 

5,225

 

 

 

Non-current assets:

 

 

 

 

 

 

 

 

 

 

Other non-current assets

 

 

699

 

 

 

545

 

 

 

Property, plant and equipment, net of accumulated depreciation of

 

 

 

 

 

 

 

 

 

 

  $3,407 and $3,299

 

 

2,407

 

 

 

2,436

 

 

 

Identified intangible assets, net of accumulated amortization of

 

 

 

 

 

 

 

 

 

 

  $5,089 and $4,716

 

 

4,094

 

 

 

4,467

 

 

 

Goodwill

 

 

8,852

 

 

 

8,857

 

 

 

Total non-current assets

 

 

16,052

 

 

 

16,305

 

 

 

Total assets

 

 

20,672

 

 

 

21,530

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

815

 

 

 

999

 

 

 

Restructuring liabilities-current

 

 

66

 

 

 

60

 

 

 

Other current liabilities

 

 

1,264

 

 

 

1,219

 

 

 

Short-term debt

 

 

1,117

 

 

 

1,107

 

 

 

Total current liabilities

 

 

3,262

 

 

 

3,385

 

 

 

Non-current liabilities:

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

6,223

 

 

 

6,247

 

 

 

Restructuring liabilities

 

 

4

 

 

 

5

 

 

 

Deferred tax liabilities

 

 

390

 

 

 

450

 

 

 

Other non-current liabilities

 

 

862

 

 

 

753

 

 

 

Total non-current liabilities

 

 

7,479

 

 

 

7,455

 

 

 

Equity:

 

 

 

 

 

 

 

 

 

 

Non-controlling interests

 

 

190

 

 

 

185

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

Preferred stock, par value €0.20 per share:

 

 

 

 

 

 

 

 

 

 

- Authorized: 645,754,500 shares (2018: 645,754,500 shares)

 

 

 

 

 

 

 

 

 

 

- Issued: none

 

 

 

 

 

 

 

 

 

 

Common stock, par value €0.20 per share:

 

 

 

 

 

 

 

 

 

 

- Authorized: 430,503,000 shares (2018: 430,503,000 shares)

 

 

 

 

 

 

 

 

 

 

- Issued and fully paid: 328,702,719 shares (2018: 328,702,719 shares)

 

 

67

 

 

 

67

 

 

 

Capital in excess of par value

 

 

15,547

 

 

 

15,460

 

 

 

Treasury shares, at cost:

 

 

 

 

 

 

 

 

 

 

- 43,527,815 shares (2018: 35,913,021 shares)

 

 

(3,870

)

 

 

(3,238

)

 

 

Accumulated other comprehensive income (loss)

 

 

109

 

 

 

123

 

 

 

Accumulated deficit

 

 

(2,112

)

 

 

(1,907

)

 

 

Total Stockholders’ equity

 

 

9,741

 

 

 

10,505

 

 

 

Total equity

 

 

9,931

 

 

 

10,690

 

 

 

Total liabilities and equity

 

 

20,672

 

 

 

21,530

 

 

 

The accompanying notes to the condensed consolidated financial statements are an integral part of these statements

[-11]


 

Condensed consolidated statements of cash flows of NXP Semiconductors N.V. (unaudited)

($ in millions, unless otherwise stated)

 

 

 

 

For the three months ended

 

 

 

 

 

March 31, 2019

 

 

April 1, 2018

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

(16

)

 

 

70

 

 

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

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

502

 

 

 

491

 

 

 

Share-based compensation

 

 

86

 

 

 

69

 

 

 

Amortization of discount on debt

 

 

11

 

 

 

10

 

 

 

Amortization of debt issuance costs

 

 

3

 

 

 

3

 

 

 

Results relating to equity-accounted investees

 

 

(4

)

 

 

(2

)

 

 

Deferred tax expense (benefit)

 

 

(63

)

 

 

(42

)

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in receivables and other current assets

 

 

(42

)

 

 

81

 

 

 

(Increase) decrease in inventories

 

 

38

 

 

 

(36

)

 

 

Increase (decrease) in accounts payable and other liabilities

 

 

(250

)

 

 

(26

)

 

 

Decrease (increase) in other non-current assets

 

 

20

 

 

-

 

 

Exchange differences

 

 

6

 

 

 

5

 

 

Other items

 

 

5

 

 

 

(3

)

 

Net cash provided by (used for) operating activities

 

 

296

 

 

 

620

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Purchase of identified intangible assets

 

 

(28

)

 

 

(18

)

 

Capital expenditures on property, plant and equipment

 

 

(144

)

 

 

(156

)

 

Proceeds from sale of interests in businesses

 

 

37

 

 

-

 

 

Purchase of available-for-sale securities

 

 

(2

)

 

 

-

 

 

Proceeds from the sale of securities

 

 

1

 

 

 

-

 

 

Net cash provided by (used for) investing activities

 

 

(136

)

 

 

(174

)

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Dividends paid to common stockholders

 

 

(73

)

 

-

 

 

Proceeds from issuance of common stock through stock plans

 

 

32

 

 

 

20

 

 

Purchase of treasury shares and restricted stock unit withholdings

 

 

(715

)

 

 

(30

)

 

Net cash provided by (used for) financing activities

 

 

(756

)

 

 

(10

)

 

Effect of changes in exchange rates on cash positions

 

 

(1

)

 

-

 

 

Increase (decrease) in cash and cash equivalents

 

 

(597

)

 

 

436

 

 

Cash and cash equivalents at beginning of period

 

 

2,789

 

 

 

3,547

 

 

Cash and cash equivalents at end of period

 

 

2,192

 

 

 

3,983

 

 

 

 

 

For the three months ended

 

 

 

 

March 31, 2019

 

 

April 1, 2018

 

 

Supplemental disclosures to the condensed consolidated cash flows

 

 

 

 

 

 

 

 

 

Net cash paid during the period for:

 

 

 

 

 

 

 

 

 

Interest

 

 

25

 

 

 

21

 

 

Income taxes

 

 

209

 

 

 

44

 

 

Non-cash adjustment related to the adoption of ASC 606:

 

 

 

 

 

 

 

 

 

Receivables and other current assets

 

 

-

 

 

 

(36

)

 

Inventories

 

 

-

 

 

 

22

 

 

 

The accompanying notes to the condensed consolidated financial statements are an integral part of these statements

 

[-12]


 

Condensed consolidated statements of changes in equity of NXP Semiconductors N.V. (unaudited)

($ in millions, unless otherwise stated)

 

 

 

Outstanding

number of

shares (in

thousands)

 

 

Common

stock

 

 

Capital in

excess of

par value

 

 

Treasury

shares at

cost

 

 

Accumulated

other

comprehensive

income (loss)

 

 

Accumulated

deficit

 

 

Total

Stock-

holders’

equity

 

 

Non-

controlling

interests

 

 

Total

equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2018

 

 

292,790

 

 

 

67

 

 

 

15,460

 

 

 

(3,238

)

 

 

123

 

 

 

(1,907

)

 

 

10,505

 

 

 

185

 

 

 

10,690

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(21

)

 

 

(21

)

 

 

5

 

 

 

(16

)

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14

)

 

 

 

 

 

 

(14

)

 

 

 

 

 

 

(14

)

 

Share-based compensation plans

 

 

 

 

 

 

 

 

 

 

87

 

 

 

 

 

 

 

 

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