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Freescale Semiconductor Announces Fourth Quarter and Full-Year 2010 Results

AUSTIN, Texas, January 27, 2011 -- Freescale Semiconductor Holdings I, Ltd. today announced financial results for the fourth quarter and fiscal year ended December 31, 2010.

Highlights for the fourth quarter and calendar year include:

  • Net sales of $1.18 billion for the fourth quarter;
  • Net sales of $4.46 billion for fiscal year 2010;
  • Trailing twelve month Adjusted EBITDA of $1.15 billion;
  • Cash and cash equivalents of $1.04 billion at December 31, 2010.

Our fourth quarter results cap off a solid performance in 2010 with revenue growth, margin expansion and record design wins,” said Rich Beyer, chairman and CEO.  “The momentum we saw throughout the year positions us for continued improvement in 2011.”

Operating Results

Net sales for the fourth quarter of 2010 were $1.18 billion, compared to $1.15 billion in the third quarter of 2010 and $951 million in the fourth quarter last year.  Net sales for calendar year 2010 were $4.46 billion, compared to $3.51 billion in calendar year 2009.

Income from operations for the three months ended December 31, 2010 was $17 million, compared to $1 million in the third quarter of 2010 and a loss of $261 million in the fourth quarter of 2009. Income from operations for calendar year 2010 was a loss of $61 million compared to a loss of $1.22 billion in calendar year 2009.

Adjusted operating earnings (defined in Note 1 to the Notes to the Consolidated Financial Information attached to this press release) for the three months ended December 31, 2010, were $177 million compared to earnings of $158 million in the third quarter of 2010 and $59 million in the fourth quarter of 2009. Adjusted operating earnings for calendar year 2010 were $566 million compared to a loss of $144 million in calendar year 2009.

Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) (defined in Note 1 to the Notes to the Consolidated Financial Information attached to this press release) was $280 million for the fourth quarter of 2010, compared to $253 million in the third quarter of 2010 and $168 million in the fourth quarter of 2009. EBITDA for calendar year 2010 was $957 million compared to $304 million in calendar year 2009.

Descriptions of adjusted gross margin, EBITDA, Adjusted EBITDA and adjusted operating earnings (loss) and the reconciliations to our GAAP results are included in the tables and notes attached to this press release.

Product Revenues

The company’s net sales figures for the fourth quarter and full year 2010 are as follows:

  • Microcontroller net sales were $415 million in the fourth quarter of 2010, compared to $418 million in the third quarter of 2010 and $333 million in the fourth quarter of 2009. Microcontroller net sales for calendar 2010 were $1.59 billion compared to $1.11 billion in calendar year 2009.
  • RF, Analog and Sensor net sales were $285 million in the fourth quarter of 2010, compared to $272 million in the third quarter of 2010 and $221 million in the fourth quarter of 2009. RF, Analog and Sensor net sales for calendar year 2010 were $1.06 billion compared to $814 million in calendar year 2009.
  • Networking and Multimedia net sales were $338 million in the fourth quarter of 2010, compared to $338 million in the third quarter of 2010 and $251 million in the fourth quarter of 2009.  Networking and Multimedia net sales for calendar year 2010 were $1.23 billion compared to $929 million in calendar year 2009.
  • Cellular net sales were $111 million in the fourth quarter of 2010, compared to $90 million in the third quarter of 2010 and $116 million in the fourth quarter of 2009. Cellular net sales for calendar year 2010 were $455 million compared to $471 million in calendar year 2009.
  • Other net sales were $33 million in the fourth quarter of 2010 compared to $30 million in the third quarter of 2010 and $30 million in the fourth quarter of 2009.  Other net sales for calendar year 2010 were $120 million, compared to $180 million in calendar year 2009.

Financial Position

Cash and cash equivalents were $1.04 billion at December 31, 2010, inclusive of interest payments, bond repurchases and capital expenditures.

Conference Call and Webcast

Freescale's quarterly earnings call is scheduled to begin at 4 p.m. Central Time on January 27, 2011. The company will offer a live webcast of the conference call over the Internet at www.freescale.com/investor.

Caution Regarding Forward Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to our business strategy, goals and expectations concerning our market position, future operations, margins, profitability, liquidity and capital resources. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Actual results and trends in the future may differ materially from those suggested or implied by the forward-looking statements depending on a variety of factors. Some of the factors that we believe could affect our results include our substantial indebtedness; our ability to service our outstanding indebtedness and the impact such indebtedness may have on the way we operate our business; the loss of one or more of our significant customers or strategic relationships; general economic and business conditions and any downturns in the cyclical industry in which we operate; our competitive environment and our ability to make technological advances; interruptions in our production or manufacturing capacity and our ability to obtain supplies; economic conditions in the industries in which our products are sold; maintenance and protection of our intellectual property; political and economic conditions in the countries where we conduct business; integration of future acquisitions into our business; the costs of environmental compliance and/or the imposition of liabilities under environmental laws and regulations; potential product liability claims; inability to make necessary capital expenditures; loss of key personnel; the financial viability of our customers, distributors or suppliers; and our ability to achieve cost savings  as well as other matters described under "Risk Factors" in our Annual Report on Form 10-K and other filings with the SEC. We undertake no obligation to update any information contained in this press release.

Non-GAAP Financial Measures
Included within this press release and the accompanying tables and notes are non-GAAP financial measures that supplement the company's consolidated financial information prepared under GAAP. The company describes these non-GAAP financial measures and reconciles them to the most directly comparable GAAP measures in the tables and notes attached to this press release. The company's management believes that these non-GAAP measures provide a more meaningful representation of the company’s ongoing financial performance. In addition, the company uses Adjusted EBITDA to measure compliance with certain of its debt covenants. These non-GAAP measures are included solely for informational and comparative purposes and are not meant as a substitute for GAAP. You should consider them together with the consolidated financial information located in the tables attached to this press release.

About Freescale Semiconductor
Freescale Semiconductor is a global leader in the design and manufacture of embedded semiconductors for the automotive, consumer, industrial and networking markets. The privately held company is based in Austin, Texas, and has design, research and development, manufacturing or sales operations around the world. http://www.freescale.com/.

4Q and Full-Year 2010 Non-GAAP Reconciliations
4Q and FY10 Earnings Results and Financial Tables

CONTACT:

Investors:
Mitch Haws, 512-895-2454
mitch.haws@freescale.com

Media:
Rob Hatley, 512-996-5134
robert.hatley@freescale.com

Freescale™ and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc. 2011.

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