Freescale Semiconductor Announces Third Quarter 2010 Results

Highlights for the third quarter include:

· Net sales of $1.15 billion;

· Trailing twelve month Adjusted EBITDA of $1.06 billion;

· Cash and cash equivalents of $1.07 billion at October 1, 2010.

“Third quarter results continued our momentum with growth in revenues and profitability for Freescale,” said Rich Beyer, chairman and CEO. “All of our core businesses grew sequentially and year over year, and we continued to solidify our embedded processing solutions leadership with consecutive record quarterly design wins.”

Operating Results

Net sales for the third quarter of 2010 were $1.15 billion, compared to $1.11 billion in the second quarter of 2010 and $893 million in the third quarter last year.

Income from operations for the three months ended October 1, 2010 was $1 million, compared to a loss of $18 million in the second quarter of 2010 and a loss of $261 million in the third quarter of 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 October 1, 2010, were $158 million, compared to earnings of $136 million in the second quarter of 2010 and $12 million in the third quarter of 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) were $253 million for the third quarter of 2010, compared to $229 million in the second quarter of 2010 and $119 million in the third quarter of 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 third quarter of 2010 are as follows:

Microcontroller net sales were $418 million in the third quarter of 2010, compared to $387 million in the second quarter of 2010 and $294 million in the third quarter of 2009.


RF, Analog and Sensor net sales were $272 million in the third quarter of 2010, compared to $254 million in the second quarter of 2010 and $208 million in the third quarter of 2009.


Networking and Multimedia net sales were $338 million in the third quarter of 2010, compared to $303 million in the second quarter of 2010 and $234 million in the third quarter of 2009.


Cellular net sales were $90 million in the third quarter of 2010, compared to $133 million in the second quarter of 2010 and $122 million in the third quarter of 2009.


· Other net sales were $30 million in the third quarter of 2010 compared to $31 million in the second quarter of 2010 and $35 million in the third quarter of 2009.

Financial Position

Cash and cash equivalents were $1.07 billion on October 1, 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 Daylight Time on October 21, 2010. 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.