01—Abstract
Summary
Summary of the 20-F filed March 13, 2012. Cited figures are marked; the original filing is the authoritative source.
NXP Semiconductors N.V.
(NXPI) filed its annual report on Form 20-F for the fiscal year ended December 31, 2011, highlighting a return to profitability driven significantly by the divestment of its Sound Solutions business and improved operational performance. The company reported a net income attributable to stockholders of $390 milliona for 2011, a substantial turnaround from a net loss of $456 million in 2010. This was largely due to a significant gain of $414 million from the sale of its Sound Solutions business, which was classified as discontinued operations, contributing $434 million to net income.
Revenue for the year decreased slightly to $4.194 billionb from $4.402 billion in 2010, primarily due to the expiration of contractual obligations with divested businesses and a decline in the Manufacturing Operations segment. However, the core High Performance Mixed Signal (HPMS) and Standard Products (SP) segments showed combined revenue growth, driven by strong performance in Identification and the SP portfolio.
02—Key points
Key Highlights
- NXP Semiconductors reported a net income of $390 million in 2011, a significant improvement from a net loss of $456 million in 2010, primarily driven by the $855 million sale of its Sound Solutions business which resulted in a $414 million gain.
- Total revenue for 2011 was $4.194 billion, a slight decrease of 4.7% year-over-year, impacted by the expiration of contractual obligations with divested businesses and a downturn in Manufacturing Operations.
- The High Performance Mixed Signal (HPMS) segment saw a 2.1% nominal revenue increase to $2.906 billion, driven by the Identification business and high-performance RF products.
- The Standard Products (SP) segment reported a 9.1% nominal revenue increase to $925 million, reflecting strong performance across its portfolio, though growth moderated in Q4 due to economic uncertainty.
- The company's focus on restructuring and cost optimization, including the Redesign Program which achieved $928 million in annualized savings by the end of 2011, contributed to improved gross margins.
- Total debt was reduced significantly from $4.551 billion in 2010 to $3.799 billion in 2011 through debt buybacks and redemptions, partially offset by new borrowings.
- Despite operational improvements and a return to profitability, the company indicated no intention to pay dividends in the foreseeable future, planning to retain earnings for business operations and debt repayment.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, NXP Semiconductors N.V. kept $0.09.
- Revenue$4.17B100.0%
- Cost of revenue−$2.26B54.3%
- Gross profit$1.91B45.7%
- Operating costs−$1.55B37.1%
- Operating income$357.0M8.6%
- Interest, other & tax$33.0M0.8%
- Net income$390.0M9.4%
Where FY2011 revenue went
$4.17B- Cost of revenue: $2.29B, 55% of revenue
- SG&A: $918.0M, 22% of revenue
- R&D: $635.0M, 15% of revenue
- Operating income: $357.0M, 8.6% of revenue
Kept 8.6% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2011filed March 13, 2012Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $4.17B$4.39B | −5.1% |
| Cost of Revenue | $2.29B$2.58B | −11.3% |
| Gross Profit | $1.91B$1.82B | +4.6% |
| R&D Expenses | $635.00M$568.00M | +11.8% |
| SG&A Expenses | $918.00M$966.00M | −5.0% |
| Operating Income | $357.00M$273.00M | +30.8% |
| Interest Expense | $312.00M$320.00M | −2.5% |
| Net Income | $390.00M-$456.00M | +185.5% |
| EPS (Basic) | $1.57$-1.99 | +178.9% |
| EPS (Diluted) | $1.57— | — |
| Shares Outstanding (Basic) | 248.81M229.28M | +8.5% |
| Shares Outstanding (Diluted) | 248.81M— | — |
05—Questions
Frequently Asked Questions
What was NXP's financial performance in 2011 compared to 2010?
NXP Semiconductors reported a net income of $390 million in 2011, a substantial turnaround from a net loss of $456 million in 2010. This improvement was largely driven by the sale of its Sound Solutions business, which generated a significant gain. Revenue saw a slight decrease to $4.194 billion from $4.402 billion, primarily impacted by divestitures and the Manufacturing Operations segment, though core HPMS and SP segments showed resilience.
What were the key drivers for the improved profitability in 2011?
The primary driver for improved profitability was the divestment of the Sound Solutions business, which resulted in a substantial gain of $414 million. Additionally, the company benefited from ongoing cost-saving initiatives, such as the Redesign Program, which yielded significant annualized savings, and a more favorable product mix in its core HPMS and SP segments.
How did the company manage its debt levels in 2011?
NXP Semiconductors actively managed its debt in 2011, reducing its total debt from $4.551 billion to $3.799 billion. This was achieved through a combination of debt buybacks, redemptions, and strategic refinancing, partially offset by new borrowings to manage its capital structure.
What is NXP's outlook on dividend payments?
The company stated that it does not intend to pay cash dividends in the foreseeable future. NXP plans to retain all future earnings to reinvest in business operations, support growth initiatives, and further reduce its debt.
06—Continue