NXP Semiconductors (NXPI) 10-K risk factor changes: FY2020 vs FY2019

Risks related to our [removed: business][added: business operations]

As a general matter, semiconductor companies are more likely to add [added: capacity in periods when current or expected future demand is strong and margins are, or are expected to be, high.]

In 2008 and 2009, Europe, the United States and international markets experienced increased volatility and [removed: instability.][added: instability related to the global financial crisis.]

We may be unable to accurately predict the extent or duration of cycles or their effect on our financial condition or result of operations and can give no assurance as to the timing, extent or duration of the current or future business [removed: cycles.][added: cycles generally, or specific to the markets in which we participate.]

Accordingly, the success of our business depends to a significant extent on our ability to develop new technologies and products that are [removed: ultimately successful in the market.]

As a result of these competitive pressures, we may face declining sales volumes or lower prevailing prices for our products, and we may not be able to reduce our total [added: costs in line with this declining revenue.]

As our business is global, we need to comply with laws and regulations in countries across the [removed: world and are exposed to international business risks that could adversely affect our business.][added: world.]

As a result, we are subject to environmental, [added: data privacy,] labor and health and safety laws and regulations in each jurisdiction in which we operate.

[removed: | • |] [added: -] negative economic developments in economies around the world and the instability of governments and international trade arrangements, such as the [removed: withdrawal of the United Kingdom from the European Union, the sovereign debt crisis in certain European countries and the] increase of barriers to international [removed: trade, such as] [added: trade including] the recent imposition of tariffs on imports by the United States and [removed: China; |][added: China, the withdrawal of the United Kingdom from the European Union and the sovereign debt crisis in certain European countries;]

[removed: | • | social and political instability in a number of countries around the world, including continued hostilities and civil unrest in the Middle East.] The instability may have a negative effect on our business, financial condition and operations via our customers and volatility in energy prices and the financial markets; [removed: |]

[removed: | • |] [added: -] potential terrorist attacks; [removed: |]

[removed: | • |] [added: -] epidemics and pandemics, such as the [removed: recent] coronavirus outbreak, which may adversely affect our workforce, as well as our suppliers and [removed: customers, in particular in Asia; |][added: customers;]

[removed: | • |] [added: -] adverse changes in governmental policies, especially those affecting trade and investment; [removed: |]

[removed: | • |] [added: -] volatility in foreign currency exchange rates, in particular with respect to the U.S. dollar, and transfer restrictions, in particular in China; and [removed: |]

[removed: | • |] [added: -] threats that our operations or property could be subject to nationalization and expropriation. [removed: |]

[added: For example, import and export regulations, such as the U.S.] Export Administration Regulations administered by the U.S. Department of Commerce, are complex, change frequently, have generally become more stringent over time and have intensified [removed: under the current U.S. administration.][added: in recent years.]

[removed: In this case, or if] [added: If] any of the [added: following] international business risks were to materialize or become worse, they could have a material adverse effect on our business, financial condition and results of [removed: operations.][added: operations:]

[removed: The reliability and security of our information technology] infrastructure and software, and our ability to expand and continually update technologies in response to our changing needs is critical to our business.

[removed: There] [added: While this IT system compromise did not result in a material adverse effect on our business or any material damage to us, there] can be no assurance that this or any other breach or incident will not have a material impact on our operations and financial results in the future.

Such breaches could result in, for example, unauthorized access to, disclosure, modification, misuse, loss, or destruction of our, our customer, or other third party data or systems, theft of sensitive or confidential data including personal information [added: (including personal data about our employees, customers or other third parties)] and intellectual property, system disruptions, and denial of service.

[removed: Global privacy legislation, enforcement, and policy activity in this area are rapidly] expanding and creating a complex regulatory compliance environment.

[removed: In addition, even] [added: Even] our inadvertent failure to comply with [removed: federal, state, or international] [added: applicable] privacy-related or data protection laws and regulations could result in proceedings against us by governmental entities or others.

The semiconductor industry is characterized by high fixed costs and, notwithstanding our utilization of third-party manufacturing capacity, [removed: most of] our production requirements are [added: in part] met by our own manufacturing facilities.

In less favorable industry environments, like we faced in the [removed: second] [added: first] half [removed: in 2011,] [added: of 2020,] we are generally faced with a decline in the utilization rates of our manufacturing facilities due to decreases in demand for our products.

[removed: While we hold a] significant number of patents, there can be no assurances that additional patents will be issued or that any rights granted under our patents will provide meaningful protection against misappropriation of our intellectual property.

[added: Consequently, operating in some countries may] subject us to an increased risk that unauthorized parties may attempt to copy or otherwise use our intellectual property or the intellectual property of our suppliers or other parties with whom we engage.

We [removed: plan to] [added: have previously executed restructuring initiatives and] continue to [added: assess,] restructure and make changes to parts of the processes in our organization.

[removed: Furthermore, if] [added: If] the global economy remains [removed: volatile or if the global economy reenters a recession,] [added: volatile,] our revenues could [removed: decline,] [added: decline] and we may be forced to take additional cost savings steps that could result in additional charges and materially affect our business.

[added: Moreover, since the cost of replacing defective] semiconductor devices is often much higher than the value of the devices themselves, we may at times face damage claims from customers in excess of the amounts they pay us for our products, including consequential damages.

We may be named in product liability claims even if there is no evidence that our products caused the damage in question, and such claims could result in significant costs [removed: and expenses relating to attorneys’ fees and damages.]

As of December 31, [removed: 2019,] [added: 2020,] we had recognized a net accrued benefit liability of [removed: $462] [added: $566] million, representing the unfunded benefit obligations of our defined pension plans.

Additionally, in December of 2017, the United States enacted a budget reconciliation act amending the Internal Revenue Code of 1986 (the “Tax Cuts and Jobs Act”) and, [removed: in] [added: as from] 2018, the U.S. Treasury Department issued regulations to clarify certain provisions of the Tax Cuts and Jobs Act.

Certain environmental laws impose strict, and in certain circumstances, joint and several liability on current or previous owners or operators of real property for the cost of investigation, removal or remediation of hazardous [added: substances as well as liability for related damages to natural resources.]

The market price for our common stock has varied between a high of [removed: $129.50] [added: $167.27] on December [removed: 26, 2019] [added: 7, 2020] and a low of [removed: $71.56] [added: $58.41] on [removed: January 2, 2019] [added: March 18, 2020] in the twelve-month period ending on December 31, [removed: 2019.][added: 2020.]

The market price of our common stock is likely to continue to be volatile and subject to significant price and volume fluctuations for many reasons, including in response to the risks described in this section, changes in our dividend or share repurchase policies, [added: variations between our actual financial results] or [added: guidance and expectations of securities analysts or investors or] for reasons unrelated to our operations, such as reports by industry analysts, investor perceptions or negative announcements by our customers, competitors, peer companies or suppliers regarding their own performance, or announcements by our competitors of significant contracts, strategic partnerships, joint ventures, joint marketing relationships or capital commitments, the passage of legislation or other regulatory developments affecting us or our industry, as well as industry conditions and general financial, economic and political instability.

[added: In the past, following periods of] market volatility, shareholders have instituted securities class action litigation.

As of December 31, [removed: 2019,] [added: 2020,] we had outstanding indebtedness with an aggregate principal amount of [removed: $7,400] [added: $7,650] million.

[removed: | • |] [added: -] increasing our vulnerability to adverse economic, industry or competitive developments; [removed: |]

[removed: | • |] [added: -] requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities; [removed: |]

[removed: | • |] [added: -] exposing us to the risk of increased interest rates in the event we have borrowings under our $1,500 million revolving credit facility agreement (the “RCF Agreement”) because loans under the RCF Agreement bear interest at a variable rate; [removed: |]

Risks related to the coronavirus (COVID-19) pandemic

The extent to which the coronavirus (COVID-19) outbreak and measures taken in response thereto could materially adversely affect our financial condition and results of operations will depend on future developments, which are highly uncertain and are difficult to predict.

The COVID-19 pandemic and measures taken in response have adversely impacted the Company's financial condition and results of operations.

The novel strain of the coronavirus identified in China in late 2019 has globally spread throughout other areas such as Asia, Europe, the Middle East, and North America and has resulted in authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place orders, and shutdowns.

These measures have adversely impacted and may further impact our workforce and operations, the operations of our customers, and those of our respective vendors and suppliers.

We have significant manufacturing operations in China, Malaysia, Thailand, Singapore, Taiwan, The Netherlands and the U.S., and each of these countries has been affected by the outbreak and taken measures to try to contain it.

There is considerable uncertainty regarding such measures and potential future measures, and restrictions on our access to our manufacturing facilities or on our support operations or workforce, or similar limitations for our vendors and suppliers, and restrictions or disruptions of transportation, such as reduced availability of air transport, port closures, and increased border controls or closures, could limit our capacity to meet customer demand and have a material adverse effect on our financial condition and results of operations.

The outbreak has significantly increased economic and demand uncertainty.

We experienced significant decline in revenue in the first half of 2020 related to the COVID-19 outbreak.

Although we experienced improvements in the business environment in the second half of 2020, the situation remains uncertain and the continued spread of COVID-19 may result in another economic slowdown similar or worse than what we experienced in the first half of 2020, including the possibility that it could lead to a global recession.

Risks

related to a slowdown or recession are described in our risk factor titled “Significantly increased volatility and instability and unfavorable economic conditions may adversely affect our business” below.

The spread of COVID-19 has caused us to modify our business practices (including employee travel, employee work locations, and cancellation of physical participation in meetings, events and conferences), and we may take further actions as may be required by government authorities or that we determine are in the best interests of our employees, customers, partners, and suppliers.

There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus, and our ability to perform critical functions could be harmed.

The degree to which COVID-19 adversely impacts our future results will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume.

Even after the COVID-19 outbreak has subsided, we may experience material adverse impacts to our business as a result of the global economic impact and any recession that has occurred or may occur in the future.

To the extent the COVID-19 pandemic adversely affects our business, results of operations, financial condition and cash flows, it may also heighten many of the other risks described below.

There are no comparable recent events that provide guidance as to the effect the spread of COVID-19 as a global pandemic may have, and, as a result, the ultimate impact of the outbreak on our operations and financial results is highly uncertain and subject to change.

Risks related to the semiconductor industry and the markets in which we participate

In the first half of 2020, demand in the automotive market steeply declined as a result of manufacturing shutdowns by automotive OEMs due to the coronavirus pandemic, resulting in an unforeseen negative impact to our results of operations.

In the event of a future decline in global economic conditions, our business, financial condition and results of operations could be materially adversely affected, and the resulting economic decline might disproportionately affect the markets in which we participate, further exacerbating a decline in our results of operations.

ultimately successful in the market.

Our global business operations expose us to international business risks that could adversely affect our business.

- social and political instability in a number of countries around the world, including continued hostilities and civil unrest in the Middle East.

and expenses relating to attorneys’ fees and damages.

Risks related to regulatory or legal challenges

Our results of operations could be negatively impacted if are required to suspend activities with certain customers or suppliers due to future changes in regulations.

In 2020, due to regulations imposed by the U.S. government, we ceased shipments of our products to Huawei pending approval of export licenses.

Furthermore, global privacy legislation, enforcement, and policy activity, such as the EU General Data Privacy Regulation, are rapidly

Risks related to cybersecurity and IT systems

The reliability and security of our information technology

Risks related to intellectual property

While we hold a

Risks related to human capital management

Actual or anticipated changes or downgrades in our credit ratings, including any

General risk factors

capacity in periods when current or expected future demand is strong and margins are, or are expected to be, high.

In 2015, volatility and instability in financial markets continued following renewed investor concerns related to the economic situation in parts of the world, a decline in the growth rate of the Chinese economy, increased hostilities in the Middle East, and other world events.

These, or other events, could further adversely affect the economies of the European Union, the United States and those of other countries and may exacerbate the cyclicality of our business.

Among other factors, we face risks attendant to unfavorable changes related to interest rates, rates of economic growth, fiscal, monetary and trade policies of governments, tax rates and policy and changes in demand for end-user products and changes in interest rates.

There is a significant risk that the global economy could fall into recession again.

If economic conditions remain uncertain or deteriorate, our business, financial condition and results of operations could be materially adversely affected.

A recurrent decline in demand or the failure of demand to return to prior levels could place pressure on our results of operations.

The timing and extent of any changes to currently prevailing market conditions is uncertain and supply and demand may be unbalanced at any time.

costs in line with this declining revenue.

Additionally, a significant portion of our products is made to order.

In addition, the business environment is also subject to many economic and political uncertainties, including the following international business risks:

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| • | our customers or other groups of stakeholders might impose requirements that are more stringent than the laws in the countries in which we are active; |

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For example, import and export regulations, such as the U.S.

If our customers or suppliers fail to comply with these regulations, we may be required to suspend activities with these customers or suppliers, which could negatively impact our results of operations.

Additionally, we may be required to incur significant expense to comply with, or to remedy violations of, these regulations.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, further increasing legal and financial compliance costs.

These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.

This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure.

We are taking steps to identify the malicious activity and are implementing remedial measures to increase the security of our systems and networks to respond to evolving threats and new information.

As of the date of this filing, we do not believe that this IT system compromise has resulted in a material adverse effect on our business or any material damage to us.

However, the investigation is ongoing, and we are continuing to evaluate the amount and type of data compromised.

In addition, we may be subject to theft, loss, or misuse of personal data about our employees, customers, or other third parties, which could increase our expenses, damage our reputation, or result in legal or regulatory proceedings.

The theft, loss, or misuse of personal data collected, used, stored, or transferred by us to run our business could result in significantly increased business and security costs or costs related to defending legal claims.

The semiconductor industry is capital intensive and if we are unable to invest the necessary capital to operate and grow our business, we may not remain competitive.

*Management’s discussion and analysis of financial condition and results of operations (MD&A) should be read in conjunction with the financial statements and the related notes that appear elsewhere in this [removed: document.* *This section of this Form 10-K generally discusses* *2019* *and* *2018* *items and year-to-year comparisons between* *2019* *and* *2018.][added: document.]

Discussions [removed: of* *2017* *items] [added: of 2018 items] and year-to-year comparisons [removed: between* *2018* *and* *2017* *that] [added: between 2019 and 2018 that] are not included in this Form 10-K can be found in [added: "Management's Discussion and Analysis of Financial Condition and Results of Operations" in] Part [removed: I,] [added: II,] Item [removed: 5.A.][added: 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 as filed with the SEC on February 27, 2020.*]

[removed: | • |] [added: -] *Overview* - Overall analysis of financial and other highlights to provide context for the MD&A [removed: |]

[removed: | • |] [added: -] *Results of Operations* - An analysis of our financial results [removed: |]

[removed: | • |] [added: -] *Financial Condition, Liquidity and Capital Resources* - An analysis of changes in our balance sheets and cash flows and a discussion of our financial condition and potential sources of liquidity [removed: |]

[removed: | • |] [added: -] *Critical Accounting Estimates* - Accounting estimates that management believes are the most important to understanding the assumptions and judgments incorporated in our financial results and forecasts [removed: |]

[removed: | • |] [added: -] *Use of Certain Non-GAAP Financial Measures* \- A discussion of the non-GAAP measures used [removed: |]

See Note 1 to the [added: consolidated] financial statements for more information regarding our segment.

| ($ in millions, unless otherwise stated) | [added: | |] Three Months Ended | | | | | | | | | [added: | | | | | | | | |] Years Ended | | | | | | | | [added: | | | | | | |]

| | [added: | |] December 31, [removed: 2019] [added: 2020] | | | [added: | | |] September [removed: 29, 2019] [added: 27, 2020] | | | [added: | | |] Increase/(decrease) | | | [added: | | |] December 31, [removed: 2019] [added: 2020] | | | [added: | | |] December 31, [removed: 2018] [added: 2019] | | | [added: | | |] Increase/(decrease) | | [added: |]

| Operating income (loss) | [removed: 197] | | [removed: | 233] [added: 418] | | | [removed: (36] | [removed: )] | | 641 | | | [removed: 2,710 | | | (2,069 | ) |]

[removed: | Cash flow] [added: - Cash Flow] from [removed: operating activities | 814 | | | 746 | | | 68 | | | 2,373 | | | 4,369 | | | (1,996 | ) |][added: Operating Activities]

| Diluted weighted average number of shares outstanding | [removed: 285,518] | | [added: 285,258] | [removed: 283,518] | | | [removed: 2,000] | | [added: 279,467] | [added: | | | | | 5,791 | | | | | | 283,809 | | | | | |] 285,911 | | | [removed: 328,606] | | | [removed: (42,695] [added: (2,102)] | [removed: )] | [added: |]

| Dividends per common share | [added: | |] 0.375 | | | [added: | | |] 0.375 | | | [added: | | |] — | | | [added: | | | 1.500 | | | | | |] 1.25 | | | [removed: 0.50] | | | [removed: 0.75] [added: 0.25] | | [added: |]

When aggregating all end markets, the decrease in revenue was mostly related to lower sales to [removed: distributors due to lower end customer demand, in particular in Greater China (including Asia Pacific).][added: OEMs.]

We continue to generate strong operating cash flows, with [removed: $2,373] [added: $2,482] million in cash flows from operations for [removed: 2019.][added: 2020.]

We returned [removed: $1,762] [added: $1,047] million to our shareholders during the year in dividends and repurchases of common stock.

Our cash position at the end of [removed: 2019] [added: 2020] was [removed: $1,045] [added: $2,275] million.

On November 19, [removed: 2019,] [added: 2020,] the NXP Board of Directors approved a cash dividend of $0.375 per common share for the fourth quarter of [removed: 2019.][added: 2020.]

The following table presents the composition of operating income for the years ended December 31, [removed: 2019] [added: 2020] and December 31, [removed: 2018.][added: 2019.]

| ($ in millions, unless otherwise stated) | [removed: 2019] | | [added: 2020] | [removed: 2018] | | [added: | | | 2019 | | |]

| Revenue | [removed: 8,877] | | [added: 8,612] | [removed: 9,407] | | [added: | | | 8,877 | | |]

| % nominal growth | [removed: (5.6] | [removed: )] | [added: (3.0)] | [removed: 1.6] | | [added: | | | (5.6) | | |]

| Gross profit | [removed: 4,618] | | [added: 4,235] | [removed: 4,851] | | [added: | | | 4,618 | | |]

| Research and development | [removed: (1,643] | [removed: )] | [added: (1,725)] | [removed: (1,700] | [removed: )] | [added: | | | (1,643) | | |]

| Selling, general and administrative (SG&A) | [removed: (924] | [removed: )] | [added: (879)] | [removed: (993] | [removed: )] | [added: | | | (924) | | |]

| Amortization of acquisition-related intangible assets | [removed: (1,435] | [removed: )] | [added: (1,327)] | [removed: (1,449] | [removed: )] | [added: | | | (1,435) | | |]

| Other income (expense) | [removed: 25] | | [added: 114] | [removed: 2,001] | | [added: | | | 25 | | |]

| Operating income (loss) | [added: | | 463 | | | | | | 32 | | | | | | 431 | | | | | | 418 | | | | | |] 641 | | | [removed: 2,710] | | [added: | (223) | | |]

Revenue for the year-ended December 31, [removed: 2019] [added: 2020] was [removed: $8,877] [added: $8,612] million compared to [removed: $9,407] [added: $8,877] million for the year-ended December 31, [removed: 2018,] [added: 2019,] a decrease of [removed: $530] [added: $265] million or [removed: 5.6%.][added: 3%.]

[removed: As of January 1, 2019, income] [added: Income] and expenses derived from manufacturing service arrangements (“MSA”) and transitional service arrangements (“TSA”) that are put into [added: place when we divest a business or activity, are included in other income (expense).]

| ($ in millions, unless otherwise stated) | [added: | | 2020 | | | | | |] 2019 | | | [removed: 2018] | | | Increase/(decrease) | | | [added: | | |] % | | [added: |]

| Communication Infrastructure & Other | [added: | | 1,703 | | | | | |] 1,875 | | | [removed: 1,787] | | | [removed: 88] [added: (172)] | | | [removed: 4.9] | [added: | | (9.2) | |] % |

| ($ in millions, unless otherwise stated) | [added: | | 2020 | | | | | |] 2019 | | | [removed: 2018] | | | Increase/(decrease) | | | [added: | | |] % | | [added: |]

Revenue by geographic region, which is based on the customer’s shipped-to [removed: location (except for intellectual property license revenue which is attributable to the Netherlands)] [added: location,] was as follows:

| ($ in millions, unless otherwise stated) | [added: | | 2020 | | | | | |] 2019 | | | [removed: 2018] | | | Increase/(decrease) | | | [added: | | |] % | | [added: |]

| Greater China (including Asia Pacific) | [added: | | 5,124 | | | | | |] 4,934 | | | [removed: 5,287] | | | [removed: (353] [added: 190] | [removed: )] | | [removed: (6.7] | [removed: )%] | [added: | 3.9 | | % |]

| EMEA (Europe, the Middle East and Africa) | [added: | | 1,538 | | | | | |] 1,760 | | | [removed: 1,882] | | | [removed: (122] [added: (222)] | [removed: )] | | [removed: (6.5] | [removed: )%] | [added: | (12.6) | | % |]

| South Korea | [added: | | 326 | | | | | |] 327 | | | [removed: 357] | | | [removed: (30] [added: (1)] | [removed: )] | | [removed: (8.4] | [removed: )%] | [added: | (0.3) | | % |]

[removed: ][added: ]

This section of this Form 10-K generally discusses 2020 and 2019 items and year-to-year comparisons between 2020 and 2019.

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| Revenue | | | 2,507 | | | | | | 2,267 | | | | | | 240 | | | | | | 8,612 | | | | | | 8,877 | | | | | | (265) | | |

| Gross profit | | | 1,288 | | | | | | 1,090 | | | | | | 198 | | | | | | 4,235 | | | | | | 4,618 | | | | | | (383) | | |

| Cash flow from operating activities | | | 1,029 | | | | | | 527 | | | | | | 502 | | | | | | 2,482 | | | | | | 2,373 | | | | | | 109 | | |

| Total debt | | | 7,609 | | | | | | 9,356 | | | | | | (1,747) | | | | | | 7,609 | | | | | | 7,365 | | | | | | 244 | | |

| Net debt | | | 5,334 | | | | | | 5,790 | | | | | | (456) | | | | | | 5,334 | | | | | | 6,320 | | | | | | (986) | | |

| Diluted net income per share | | | 1.08 | | | | | | (0.08) | | | | | | 1.16 | | | | | | 0.18 | | | | | | 0.85 | | | | | | (0.67) | | |

Revenue for 2020 was $8,612 million, down 3% from 2019 against a very challenging economic environment, caused by the COVID-19 pandemic.

By end market, Automotive revenue was $3,825 million, a decrease of 9% versus the year ago period.

Within the Communication Infrastructure & Other end market, revenue was $1,703 million, a decline of 9% year-on-year.

These annual declines were partly offset by good year-on-year performance in the Industrial & IoT and Mobile end-markets.

Revenue in the Industrial & IoT end market was $1,836 million, a 15% increase, while revenue in the Mobile end market was $1,248 million, a 5% increase.

The revenue achieved in both the Industrial & IoT and the Mobile end markets represent new all-time highs.

From a regional perspective, revenue declined in EMEA, Americas and Japan, offset partly by Greater China.

Our gross profit percentage for 2020 decreased to 49.2% from 52.0%, primarily due to the significant deceleration of revenue and the associated reduced manufacturing activity during the second and third quarters, further amplified by the absorption of excess manufacturing fixed costs as a result of abnormal under-loading in our front-end factories due to the COVID-19 pandemic.

Revenue for the fourth quarter of 2020 was $2,507 million, an increase of 11% sequentially from revenue for the third quarter of 2020, as the improving business environment emerging at the end of the third quarter continued into the fourth quarter.

From an end market perspective, the increase sequentially was driven primarily by Automotive with an

increase of 24% and by Mobile with an increase of 21%.

These increases were slightly offset by a decline of 13% in Communication Infrastructure & Other and a decrease of 0.6% in Industrial & IoT.

Our global communities continue to face unprecedented challenges posed by the COVID-19 pandemic, but NXP has continued to respond actively by addressing the COVID-19 situation and its impact globally with global crisis response teams, working to mitigate the potential impacts to our people and our business.

With our strong business model and with demonstrated financial discipline, which is a keystone of our culture, we continue to believe that we will emerge from this time well positioned for long-term growth as we continue to see strong customer interest in the breadth of our product portfolio, combined with solid design win awards.

However, we cannot reasonably estimate the duration and severity of this global pandemic or its ultimate impact on the global economy and our business and results.

Demand has come back more rapidly than we expected and our current focus is to look after our customers and ensure we ship as much product to them as possible.

While we are encouraged by the rapid rebound in demand, we are still challenged by the impact of the global pandemic.

We are still of the view that the best course of action is to continue to focus on enabling our customers success while simultaneously assuring the safety and health of all our employees.

The decrease is attributed to the impact of the COVID-19 pandemic in our primary end-markets, including year-on-year decreases in the Automotive and in the Communication Infrastructure & Other end markets.

These declines were partly offset by increases in the Industrial & IoT and Mobile end markets.

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| Automotive | | | 3,825 | | | | | | 4,212 | | | | | | (387) | | | | | | (9.2) | | % |

| Industrial & IoT | | | 1,836 | | | | | | 1,599 | | | | | | 237 | | | | | | 14.8 | | % |

| Mobile | | | 1,248 | | | | | | 1,191 | | | | | | 57 | | | | | | 4.8 | | % |

| Revenue | | | 8,612 | | | | | | 8,877 | | | | | | (265) | | | | | | (3.0) | | % |

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| Distributors | | | 4,720 | | | | | | 4,409 | | | | | | 311 | | | | | | 7.1 | | % |

| OEM/EMS | | | 3,728 | | | | | | 4,352 | | | | | | (624) | | | | | | (14.3) | | % |

| Other | | | 164 | | | | | | 116 | | | | | | 48 | | | | | | 41.4 | | % |

"Operating Results" of our Form 20-F for the fiscal year ended* *December 31, 2018* *as filed with the SEC on March 1, 2019.*

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| Revenue | 2,301 | | | 2,265 | | | 36 | | | 8,877 | | | 9,407 | | | (530 | ) |

| Gross profit | 1,209 | | | 1,186 | | | 23 | | | 4,618 | | | 4,851 | | | (233 | ) |

| Total debt | 7,365 | | | 8,505 | | | (1,140 | ) | | 7,365 | | | 7,354 | | | 11 | |

| Net debt | 6,320 | | | 4,968 | | | 1,352 | | | 6,320 | | | 4,565 | | | 1,755 | |

| Diluted net income per share | 0.40 | | | 0.38 | | | 0.02 | | | 0.85 | | | 6.72 | | | (5.87 | ) |

Revenue for 2019 was down 5.6% from 2018 against a very challenging semiconductor industry backdrop.

Revenues decreased by 7% in our largest end market, Automotive, and 12% in our Industrial and IOT end market which were slightly offset by an increase of 5% in the Communications & Infrastructure end market and a 2% increase in the Mobile end market.

Notwithstanding the challenging operating environment, we continue to successfully execute our strategy within our target markets and focus on driving profitability.

Our gross profit percentage for 2019 increased from 51.6% to 52.0%, due to a slightly more favorable end-market and customer mix and also due to the benefit of certain manufacturing cost controls.

NXP’s fourth quarter revenue of $2,301 million increased 1.6% sequentially from the third quarter of 2019.

This was driven primarily by an increase of 5% in the Automotive end-market and a 3% increase in the mobile end-market, these increases were offset by a 3% decline in each of the other two end markets.

We continue to believe that the demand trends within our end markets are beginning to improve.

Over the course of 2019, we significantly enhanced our product portfolio.

At the end of the year, we announced the completion of the acquisition of the Marvell wireless connectivity assets and with that introduced new product solutions.

Our customers have already begun to adopt many of the new solutions which we anticipate will help to underpin NXP's long-term growth.

On August 29, 2019, we announced an increase in our quarterly dividend by $0.125, or 50%, to $0.375 per common share.

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place when we divest a business or activity, are included in other income (expense).

In 2018, revenue related to these divested activities was $136 million The remaining decrease is essentially related to lower sales in our Automotive and in our Industrial & IOT end markets, which were in particular impacted by the trade tensions between the United States and China.

| Automotive | 4,212 | | | 4,507 | | | (295 | ) | | (6.5 | )% |

| Industrial & IoT | 1,599 | | | 1,813 | | | (214 | ) | | (11.8 | )% |

| Mobile | 1,191 | | | 1,164 | | | 27 | | | 2.3 | % |

| Manufacturing Service Agreements | — | | | 136 | | | (136 | ) | | NM | |

| Revenue | 8,877 | | | 9,407 | | | (530 | ) | | (5.6 | )% |

| Distributors | 4,409 | | | 4,891 | | | (482 | ) | | (9.9 | )% |

| OEM/EMS | 4,352 | | | 4,229 | | | 123 | | | 2.9 | % |

If we do not have operating or financing activities to sufficiently offset these exposures, from time to time, we may employ derivative financial instruments such as swaps, collars, forwards, options or other instruments to limit the [removed: volatility to earnings and cash flows generated by these exposures.]

[added: Counterparties to our derivatives] contracts are all major banking institutions.

At December 31, [removed: 2019] [added: 2020] our net asset related to foreign currency forward contracts designated as hedges of foreign currency risk on certain operating expenditure transactions was [removed: $9] [added: $18] million.

volatility to earnings and cash flows generated by these exposures.

Counterparties to our derivatives

For the year ended December 31, [removed: 2019,] [added: 2020,] we generated revenue of [removed: $8,877] [added: $8,612] million, compared to [removed: $9,407] [added: $8,877] million for the year ended December 31, [removed: 2018.][added: 2019.]

Our legal name is NXP Semiconductors N.V. and our commercial name is “NXP” or “NXP Semiconductors.” [added: We were incorporated in the Netherlands in 2006 as a Dutch public company with limited liability (naamloze vennootschap).]

The semiconductor market totaled [removed: $412] [added: $440.4] billion in [removed: 2019.][added: 2020.]

The four end-markets are Automotive, Industrial & IoT, Mobile, and Communication Infrastructure & [removed: Others.][added: Other.]

| | [added: | |] Automotive | [added: | |] Industrial & IoT | [added: | |] Mobile | [added: | |] Comm Infra & [removed: Others] [added: Other] | | [added: |]

| Key Applications | [added: | |] ADAS/Radar Connected Infotainment Vehicle Networks Electrification Secure Car Access eCockpit Body Comfort & Convenience Powertrain | [added: | |] Factory and Building Automation Smart Home and Building Control Home Entertainment Power and Energy Medical Smart Retail Smart Appliances | [added: | |] Smartphones Wearables Tablets Mobile Accessories | [added: | |] Wireless Basestations Enterprise Data Center Network & Security Wired and Wireless Service Provider Infrastructure Banking Cards [removed: eGovernment] [added: Government ID documents] Transit Cards RFID Tagging | | [added: |]

| Growth Drivers | [added: | |] Vehicle electrification and automation Government requirements & consumer demands for increased safety, reliability, comfort and efficiency Increase need of security across all applications | [added: | |] Shift from mechanical to electronic equipment Increasing processing and connectivity Increasing use of low-power nodes Energy efficiency Predictive maintenance Automation Machine Learning | [added: | |] Mobile Wallet/Mobile Transit Custom Interface/Power solutions | [added: | |] 5G development/Massive MiMo and mmwave Increasing demand for bandwidth, cloud computing IoT | | [added: |]

[removed: | i. | Automotive |][added: i.Automotive]

[removed: Two] [added: We believe two] mega-trends will drive the semiconductor content increase in the future: Electrification and autonomy.

[removed: | ii. | Industrial] [added: ii.Industrial] & IoT [removed: |]

In IoT, growth is driven by the increasing use of high-performance edge and media devices (e.g. home [added: entertainment, connected home assistants, home control and security) and low power IoT nodes (e.g. smart]

[removed: entertainment, connected home assistants, home control and security) and low power IoT nodes (e.g. smart] home, hearables, health trackers) where NXP scalable solutions across the entire embedded processing spectrum are ideally suited.

[removed: | iii. | Mobile |][added: iii.Mobile]

[removed: | iv. | Communication] [added: iv.Communication] Infrastructure & [removed: Others |][added: Other]

Growth in the network communication market is driven by strong demand for digital content, ubiquitous access, security, increased enterprise adoption of advanced video [removed: communications] [added: communication] and the trend towards an increasingly global and mobile workforce.

As more and more data is being exchanged and consumed by billions of connected devices, 5G, the new mobile communication technology, enables [removed: very] fast data transfer, low latency and reliability.

More bandwidth and higher frequencies are [removed: needed] [added: needed,] requiring more compute power.

More base stations are needed and massive [removed: MIMO] [added: multi-chip modules (MIMO)] - which provides better throughput and better spectrum efficiency - will greatly expand the number of [removed: antenna’s needed to maximize coverage in combination with small cells densification.][added: antennas needed.]

We offer customers a broad portfolio of semiconductor products including microcontrollers, application processors, communication processors, connectivity chipsets, analog and interface devices, RF power amplifiers, [added: security controllers and sensors.]

[removed: security controllers and sensors.][added: vii.Security Controllers]

We believe we have the broadest ARM processor portfolio in the industry from microcontrollers to crossover [removed: processors,] [added: processors and] from application processors to communication processors.

[removed: | i. | Microcontrollers |][added: i.Microcontrollers]

[removed: We also recently introduced our] [added: Our] new i.MX RT crossover processors [removed: that] are built using applications processors chassis, delivering a high level of integration, high speed peripherals, enhanced security, and engines for enhanced user experience (for example, 2D/3D graphics), but powered by a low-power MCU core running a real-time operating system like Amazon Free RTOS or Zephyr RTOS.

[removed: | ii. | Application] [added: ii.Application] Processors [removed: |]

[removed: | iii. | Communication] [added: iii.Communication] Processors [removed: |]

Within service-provider communications infrastructure, our processors are used in cellular base stations, fixed wireless access Customer Premises Equipment (CPE), residential gateways, [removed: broadband aggregation systems, and core networking equipment.]

[added: We also offer Layerscape Access processors,] which implement baseband functions, principally for wireless systems such as 5G fixed wireless access, using programmable vector signal processors.

[removed: | iv. | Wireless] [added: iv.Wireless] Connectivity [removed: |]

These products are integrated into a wide variety of end devices, such as mobile phones, wearables, enterprise access points, home gateways, voice assistants, multimedia devices, [removed: gaming,] [added: gaming consoles,] printers, automotive infotainment and smart industrial devices.

[removed: | v. | Analog] [added: v.Analog] and Interface Products [removed: |]

[removed: | vi. | Radio] [added: vi.Radio] Frequency Devices [removed: |]

Our security controller ICs are embedded in smart cards (ePassports, electronic ID credentials, payment [removed: cards,] [added: cards and] transportation cards), as well as in consumer electronic and smart devices, for example in smartphones, tablets and wearables.

Our solutions are developed to provide extreme levels of security of user information, undergoing stringent and continued global governmental and banking certification processes, and to deliver [added: a] high level of device performance enabling significant throughput and productivity to our customers.

[removed: | viii. | Sensors |][added: viii.Sensors]

We provide several categories of semiconductor-based environmental and inertial sensors for the Automotive market, including [added: pressure, inertial, magnetic and gyroscopic sensors that provide orientation detection, gesture recognition, tilt to scroll functionality and position detection.]

| Site | | [added: | | | |] Ownership | | | [added: | | |] Wafer sized used | | | [added: | | |] Line widths used (vm) | | | [added: | | |] Technology/Products | [added: | |]

| | | | | | | | [added: | | | | | | | |] (Microns) | | | | | [added: | | | | | | |]

| Front-end | | | | | | | | | | | | [added: | | | | | | | | | | | | | | |]

| Singapore (SSMC)¹⁾ | | [added: | | | |] 61.2 | [added: |] % | | [added: | |] 8” | | | [added: | | |] 0.14-0.25 | | | [removed: CMOS] | [added: | | CMOS, eNVM, Power, BCDMOS, RF | | |]

| Nijmegen, the Netherlands | | [added: | | | |] 100 | [added: |] % | | [added: | |] 8” | | | [removed: 0.14-0.80] | | | [added: 0.14-1.00 | | | | | |] CMOS, [removed: BiCMOS, LDMOS] [added: BCDMOS, RF, Power MOSFET] | [added: | |]

For additional information regarding the general development of the Company's business, see Part I, Item I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 as filed with the SEC on February 27, 2020.

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Despite the decline in vehicles sales and production in 2020 due to the outbreak of the COVID-19 (the "COVID-19 Pandemic"), the increase in semiconductor content per vehicle continued.

Working from home strongly increased in 2020 due to the COVID-19 outbreak and this had a positive impact on some applications (e.g. smart home devices, home entertainment and gaming consoles) within our Industrial & IoT business.

Small cells will also be deployed to improve coverage and capacity of wireless networks.

The COVID-19 pandemic is showing the critical role of digital networking in today’s society.

Workplaces have changed en masse from office to home.

Consumers and enterprise need to adapt to changing working conditions, leading to increasing demand for better digital communication capabilities.

broadband aggregation systems, and core networking equipment.

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| Chandler RF, United States | | | | | | 100 | | % | | | | 6” | | | | | | 0.25-0.40 | | | | | | GaN | | |

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Due to the COVID-19 pandemic, semiconductor supply chains have been under more pressure.

As a result, there has been a tendency towards longer term contracts with suppliers in exchange for capacity.

From an operational perspective, all of our manufacturing facilities continue to operate around the world in accordance with guidance issued by local and national government authorities.

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- Kurt Sievers (1969, German). Mr. Sievers is executive director, president and chief executive officer since May 2020, after a successful track record as the president of NXP, overseeing all the company’s business lines, since 2018.

Mr. Sievers joined NXP in 1995, and rapidly moved through a series of Marketing & Sales, Product Definition & Development, Strategy and General Management leadership positions across a broad number of market segments.

He has been a member of the executive management team since 2009, where he has been instrumental in the definition and implementation of the NXP High-Performance Mixed Signal strategy.

In 2015, Mr. Sievers was influential in the merger of NXP and Freescale Semiconductor.

Mr. Sievers serves on the Board of the German National Electrical and Electronics Industry Association (ZVEI) and chairs the Advisory Board of the international trade-fair Electronica.

He also serves as a board member of AENEAS, the cluster for application and technology research in Europe on nano-electronics.

Mr. Sievers serves as a member of the Asia-Pacific-Committee of German Business (APA) and as a member of the Board at the German Asia-Pacific Business Association (OAV), acting as the spokesperson for the Republic of Korea.

Mr. Sievers earned a master’s degree in physics and information technology from Augsburg University, Germany.

- Sir Peter Bonfield CBE FREng (1944, British). Sir Peter was appointed a non-executive director and the chairman of our board of directors in August 2010.

Prior to that, Sir Peter was the chairman of the supervisory board of NXP B.V. from September 29, 2006.

Sir Peter served as chief executive officer and chairman of the executive committee for British Telecom plc from 1996 to 2002 and prior to that was chairman and chief executive officer of ICL plc (now Fujitsu Services Holdings Ltd.).

Sir Peter also worked in the semiconductor industry during his tenure as a divisional director at Texas Instruments Incorporated, for whom he held a variety of senior management positions around the world.

In addition, Sir Peter has served as a director of twelve large technology companies.

Sir Peter currently holds non-executive directorships at Taiwan Semiconductor Manufacturing Company Limited and Imagination Technologies, is Chair of Council and Senior Pro-Chancellor at Loughborough University, Board Director at East West Institute USA and Board Mentor at CMi in London.

He is Advisor to Longreach LLP in Hong Kong, Alix Partners UK LLP in London and is a Fellow of The Royal Academy of Engineering.

Sir Peter is named Outstanding Director for 2019 by the Financial Times.

- Kenneth A.

Goldman (1949, American). Mr. Goldman was appointed a non-executive director of our board of directors effective August 6, 2010.

Mr. Goldman is former chief financial officer of Yahoo!, Inc. Prior to October 2012, Mr. Goldman served as senior vice president, finance and administration, and chief financial officer of Fortinet, Inc, a provider of unified threat management solutions, from September 2007 to September 2012.

From November 2006 to August 2007, Mr. Goldman served as

executive vice president and chief financial officer of Dexterra, Inc. From August 2000 until March 2006, Mr. Goldman served as senior vice president, finance and administration, and chief financial officer of Siebel Systems, Inc., and from December 1999 to December 2003, Mr. Goldman served on the Financial Accounting Standards Board’s primary advisory group.

We were incorporated in the Netherlands in 2006 as a Dutch public company with limited liability (naamloze vennootschap).

On August 5, 2010, we made an initial public offering of 34 million shares of our common stock and listed our common stock on Nasdaq.

Business Combinations

On December 6, 2019, NXP acquired Marvell Technology Group Ltd.'s ("Marvell") Wireless WiFi Connectivity Business Unit, Bluetooth technology portfolio and related assets, for total consideration of $1.7 billion, net of closing adjustments.

The financial results from the acquisition date through December 31, 2019, are included in NXP’s Consolidated Statement of Operations, as discussed herein.

NXP accounted for the acquisition under the acquisition method of accounting in accordance with Financial Accounting Standards

Board Accounting Standards Topic 805, Business Combinations, with NXP treated as the accounting acquirer, see further discussion below.

On October 27, 2016, NXP entered into a purchase agreement (the “Purchase Agreement”) with Qualcomm River Holdings B.V. (“Buyer”), a wholly-owned, indirect subsidiary of QUALCOMM Incorporated (“Qualcomm”).

Pursuant to the Purchase Agreement, Buyer commenced a tender offer to acquire all of the issued and outstanding common shares of NXP for $110 per share in cash, for estimated total cash consideration of $38 billion.

On February 20, 2018, NXP entered into an amendment (the “Purchase Agreement Amendment”) to the Purchase Agreement with Buyer.

Pursuant to the Purchase Agreement Amendment, Buyer agreed to revise the terms of its tender offer to acquire all of the issued and outstanding common shares of NXP and increase the offer price from $110 per share to $127.50 per share, for estimated total cash consideration of $44 billion.

On April 19, 2018, NXP and Buyer further amended the Purchase Agreement to extend the date that either Buyer or NXP would have the right to terminate the Purchase Agreement to July 25, 2018, subject to the terms of the Purchase Agreement.

On July 26, 2018, NXP received notice from Qualcomm that it had terminated, effective immediately, the Purchase Agreement, as amended, between NXP and Buyer following the inability to obtain the required approval for the transaction from the State Administration for Market Regulation (SAMR) of the People’s Republic of China prior to the end date stipulated by the parties under the Purchase Agreement.

On July 26, 2018, NXP received $2 billion termination compensation per the terms of the Purchase Agreement.

Other Significant Transactions

On August 16, 2019, NXP reached a definitive agreement with Shenzhen Goodix Technology Co., Ltd. from China, under which it will acquire all assets related to our Voice and Audio Solutions (VAS) activities for an amount of $165 million.

These assets have met the held for sale criteria as of December 31, 2019.

On July 10, 2018, NXP completed the sale of its 40% equity interest of Suzhou ASEN Semiconductors Co., Ltd. to J&R Holding Limited, receiving $127 million in cash proceeds.

In June 2018, NXP completed the sale of 24% of its equity interest in WeEn to Tianjin Ruixin Semiconductor Industry Investment Centre LLP, receiving $32 million in cash proceeds.

At December 31, 2018, due to the intended sale of the remaining interest in WeEn, NXP transferred the remaining holding to other current assets.

On March 27, 2019, we sold our remaining equity interest in WeEn, receiving net cash proceeds of $37 million.

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We also offer Layerscape Access processors,

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[removed: FORM 10-K][added: FORM 10-K]

For the fiscal year ended December 31, [removed: 2019][added: 2020]

| Netherlands | | [added: | | | |] 98-1144352 | [added: | |]

| (State or other jurisdiction of incorporation or organization) | | [added: | | | |] (I.R.S. employer identification number) | [added: | |]

| 60 High Tech Campus | | | [added: | | | | | |]

| Eindhoven | | | [added: | | | | | |]

| Netherlands | | [added: | | | |] 5656 AG | [added: | |]

| (Address of principal executive offices) | | [added: | | | |] (Zip Code) | [added: | |]

| | [added: | |] +31 | [added: | |] 40 | [added: | |] 2729999 | [added: | |]

| (Registrant’s telephone number, including area code) | | | | [added: | | | | | | | |]

| Title of each class | [added: | |] Trading symbol(s) | [added: | |] Name of each exchange on which registered | [added: | |]

| Common shares, EUR 0.20 par value | [added: | |] NXPI | [added: | |] The Nasdaq Global Select Market | [added: | |]

| Large accelerated filer | [added: | |] ☒ | [added: | |] Accelerated filer | [added: | |] ☐ | [added: | |]

| Non-accelerated filer | [added: | |] ☐ | [added: | |] Smaller reporting company | [added: | |] ☐ | [added: | |]

| | | [added: | | | |] Emerging growth company | [added: | |] ☐ | [added: | |]

The aggregate market value of the voting stock held by non-affiliates of the Registrant, based upon the closing sale price of our ordinary shares on June [removed: 28, 2019] [added: 26, 2020] as reported on the Nasdaq Global Select Market, was [removed: $27.2] [added: $30.2] billion.

As of February [removed: 21, 2020,] [added: 19, 2021,] the Registrant had [removed: 279,750,659] [added: 277,008,199] outstanding ordinary shares, excluding shares held in treasury.

Portions of the Registrant’s definitive proxy statement relating to its [removed: 2020] [added: 2021] Annual General Meeting of shareholders (the [removed: “2020] [added: “2021] Proxy Statement”) are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated.

The [removed: 2020] [added: 2021] Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

| [Introduction and Forward Looking [removed: Statements](#sC642AB53298B9272CA4F72ABBCBBCA0E)] [added: Statements](#i3a0bef55a4854c91b58b82665982b65b_10)] | [removed: [1](#sC642AB53298B9272CA4F72ABBCBBCA0E)] | [added: | [1](#i3a0bef55a4854c91b58b82665982b65b_10) | | |]

| [Item 1. [removed: Business](#s65FC8C7D6EEC73D84D4472ABBD0ECE07)] [added: Business](#i3a0bef55a4854c91b58b82665982b65b_16)] | [removed: [3](#s65FC8C7D6EEC73D84D4472ABBD0ECE07)] | [added: | [3](#i3a0bef55a4854c91b58b82665982b65b_16) | | |]

| [Item 1A. Risk [removed: Factors](#s12FD4C3F71ED2E44C84472ABBD414DB1)] [added: Factors](#i3a0bef55a4854c91b58b82665982b65b_19)] | [removed: [16](#s12FD4C3F71ED2E44C84472ABBD414DB1)] | [added: | [18](#i3a0bef55a4854c91b58b82665982b65b_19) | | |]

| [Item 1B. Unresolved Staff [removed: Comments](#s45EBDA60013161EB509572ABBD647FA8)] [added: Comments](#i3a0bef55a4854c91b58b82665982b65b_22)] | [removed: [32](#s45EBDA60013161EB509572ABBD647FA8)] | [added: | [31](#i3a0bef55a4854c91b58b82665982b65b_22) | | |]

| [Item 2. [removed: Propert](#sD6B488FFCC13E3C08DDA72ABBD969BF3)ies] [added: Propert](#i3a0bef55a4854c91b58b82665982b65b_25)ies] | [removed: [32](#sD6B488FFCC13E3C08DDA72ABBD969BF3)] | [added: | [31](#i3a0bef55a4854c91b58b82665982b65b_25) | | |]

| [Item 3. Legal [removed: Proceedings](#s57B7A66DB8D839FFD23572ABBDB6ABC4)] [added: Proceedings](#i3a0bef55a4854c91b58b82665982b65b_28)] | [removed: [33](#s57B7A66DB8D839FFD23572ABBDB6ABC4)] | [added: | [32](#i3a0bef55a4854c91b58b82665982b65b_28) | | |]

| [Item 4. Mine Safety [removed: Disclosures](#s6B3623BB92FE7B40C8A972ABBDE710D5)] [added: Disclosures](#i3a0bef55a4854c91b58b82665982b65b_31)] | [removed: [33](#s6B3623BB92FE7B40C8A972ABBDE710D5)] | [added: | [32](#i3a0bef55a4854c91b58b82665982b65b_31) | | |]

| [Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#sA4099A21AF651071BEAA72ABBE3BA8DD)] [added: Securities](#i3a0bef55a4854c91b58b82665982b65b_37)] | [removed: [33](#sA4099A21AF651071BEAA72ABBE3BA8DD)] | [added: | [32](#i3a0bef55a4854c91b58b82665982b65b_37) | | |]

| [Item 6. Selected Financial [removed: Data](#s9C1271AF30AABD32E33772ABBE5CAD15)] [added: Data](#i3a0bef55a4854c91b58b82665982b65b_40)] | [removed: [35](#s9C1271AF30AABD32E33772ABBE5CAD15)] | [added: | [34](#i3a0bef55a4854c91b58b82665982b65b_40) | | |]

| [Item 7. Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s58BB10670FC9F7B2B6E272ABBE8F2A8B)] [added: Operations](#i3a0bef55a4854c91b58b82665982b65b_43)] | [removed: [38](#s58BB10670FC9F7B2B6E272ABBE8F2A8B)] | [added: | [38](#i3a0bef55a4854c91b58b82665982b65b_43) | | |]

| [Item 7A. Quantitative and Qualitative Disclosures About Market [removed: Risk](#sFFB435A002BD729B126172ABBEAF96A9)] [added: Risk](#i3a0bef55a4854c91b58b82665982b65b_67)] | [removed: [55](#sFFB435A002BD729B126172ABBEAF96A9)] | [added: | [55](#i3a0bef55a4854c91b58b82665982b65b_67) | | |]

| [Item 8. Financial Statements and Supplementary [removed: Data](#sF8CBC7EF881A01C1139A72ABBBC3DF86)] [added: Data](#i3a0bef55a4854c91b58b82665982b65b_91)] | [removed: [57](#s36363b1cd0384487978176870b8ce643)] | [added: | [57](#i3a0bef55a4854c91b58b82665982b65b_70) | | |]

| [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#sE812A86728204F6036E872ABBF353C5A)] [added: Disclosure](#i3a0bef55a4854c91b58b82665982b65b_196)] | [removed: [110](#sE812A86728204F6036E872ABBF353C5A)] | [added: | [109](#i3a0bef55a4854c91b58b82665982b65b_196) | | |]

| [Item 9A. Controls and [removed: Procedures](#s128AB4AD8848E77F678A72ABBF57EAF7)] [added: Procedures](#i3a0bef55a4854c91b58b82665982b65b_199)] | [removed: [110](#s128AB4AD8848E77F678A72ABBF57EAF7)] | [added: | [109](#i3a0bef55a4854c91b58b82665982b65b_199) | | |]

| [Item 9B. Other [removed: Information](#s8021005B1C4F319E1D7872ABBF8823FC)] [added: Information](#i3a0bef55a4854c91b58b82665982b65b_202)] | [removed: [111](#s8021005B1C4F319E1D7872ABBF8823FC)] | [added: | [110](#i3a0bef55a4854c91b58b82665982b65b_202) | | |]

| [Item 10. Directors, Executive Officers and Corporate [removed: Governance](#s01B5BCAFB5EEB3FA532372ABBFDBFF3D)] [added: Governance](#i3a0bef55a4854c91b58b82665982b65b_208)] | [removed: [111](#s01B5BCAFB5EEB3FA532372ABBFDBFF3D)] | [added: | [110](#i3a0bef55a4854c91b58b82665982b65b_208) | | |]

| [Item 11. Executive [removed: Compensation](#sC8D7E5ECA9D9EBDD8F1072ABBFFC51F5)] [added: Compensation](#i3a0bef55a4854c91b58b82665982b65b_211)] | [removed: [112](#sC8D7E5ECA9D9EBDD8F1072ABBFFC51F5)] | [added: | [110](#i3a0bef55a4854c91b58b82665982b65b_211) | | |]

| [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s8AE486835362A8B5904A72ABC02EDD15)] [added: Matters](#i3a0bef55a4854c91b58b82665982b65b_214)] | [removed: [112](#s8AE486835362A8B5904A72ABC02EDD15)] | [added: | [111](#i3a0bef55a4854c91b58b82665982b65b_214) | | |]

| [Item 13. Certain Relationships and Related Transactions, and Director [removed: Independence](#sB78FDDE72ED8C0EB357F72ABC05268C1)] [added: Independence](#i3a0bef55a4854c91b58b82665982b65b_217)] | [removed: [112](#sB78FDDE72ED8C0EB357F72ABC05268C1)] | [added: | [111](#i3a0bef55a4854c91b58b82665982b65b_217) | | |]

| [Item 14. Principal Accounting Fees and [removed: Services](#s979E7E781E81FC10111072ABC0830DE9)] [added: Services](#i3a0bef55a4854c91b58b82665982b65b_220)] | [removed: [112](#s979E7E781E81FC10111072ABC0830DE9)] | [added: | [111](#i3a0bef55a4854c91b58b82665982b65b_220) | | |]

| [Item 15. Exhibits and Financial Statement [removed: Schedules](#sA3F8AFF92F2F0804A7D272ABC0D5EE0B)] [added: Schedules](#i3a0bef55a4854c91b58b82665982b65b_226)] | [removed: [112](#sA3F8AFF92F2F0804A7D272ABC0D5EE0B)] | [added: | [111](#i3a0bef55a4854c91b58b82665982b65b_226) | | |]

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Indicate by check mark whether the Registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

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| [Part I](#i3a0bef55a4854c91b58b82665982b65b_13) | | | [3](#i3a0bef55a4854c91b58b82665982b65b_13) | | |

| [Part II](#i3a0bef55a4854c91b58b82665982b65b_34) | | | [32](#i3a0bef55a4854c91b58b82665982b65b_34) | | |

| [PART III](#i3a0bef55a4854c91b58b82665982b65b_205) | | | [110](#i3a0bef55a4854c91b58b82665982b65b_205) | | |

| [Part IV](#i3a0bef55a4854c91b58b82665982b65b_223) | | | [111](#i3a0bef55a4854c91b58b82665982b65b_223) | | |

- potential impacts of the COVID-19 pandemic;

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| [Part I](#s875FFD5663D852D260B272ABBCEDD445) | [3](#s875FFD5663D852D260B272ABBCEDD445) |

| [Part II](#s83F27CB4ED376C6B68E672ABBE08E099) | [33](#s83F27CB4ED376C6B68E672ABBE08E099) |

| [PART III](#sE189120AAC191282AFF072ABBFA9D45E) | [111](#sE189120AAC191282AFF072ABBFA9D45E) |

| [Part IV](#s2D9A5527BCFC279F803272ABC0A5A5CF) | [112](#s2D9A5527BCFC279F803272ABC0A5A5CF) |

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The Company's headquarters are located in Eindhoven, the Netherlands.

As of February 25, 2021, the Company owned or leased facilities for commercial office space, manufacturing and other purposes at locations in the Netherlands, the U.S. and multiple other countries.

The company believes its existing facilities and equipment are in good operating condition and adequate to meet our need for the near future.

NXP uses 100 sites in 32 countries with 11.2 million square feet of total owned and leased building space of which 9.7 million square feet is owned property.

The following table sets out our principal real property holdings as of December 31, 2019:

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| Location | | Use | | Owned/leased | | Building space (square feet) |

| Eindhoven, the Netherlands | | Headquarters | | Leased | | 163,188 |

| Nijmegen, the Netherlands | | Manufacturing | | Owned | | 1,515,550 |

| Singapore (SSMC) * | | Manufacturing | | Owned | | 971,936 |

| Bangkok, Thailand | | Manufacturing | | Owned | | 547,882 |

| Kaohsiung, Taiwan | | Manufacturing | | Owned | | 636,400 |

| Tianjin, China | | Manufacturing | | Owned | | 447,624 |

| Kuala Lumpur, Malaysia | | Manufacturing | | Owned | | 828,858 |

| Chandler, United States | | Manufacturing | | Owned | | 1,173,196 |

| Austin (Oak Hill), United States | | Manufacturing | | Owned | | 1,511,861 |

| Austin (Ed Bluestein), United States | | Manufacturing | | Owned | | 1,158,731 |

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| * | Joint venture between TSMC and NXP. |

The [removed: shares of] [added: Company's] common stock [removed: of the Company are listed] [added: is traded] on the [added: Nasdaq] stock market [removed: of Nasdaq in New York] under the [removed: ticker] symbol [removed: “NXPI”.][added: NXPI.]

On February [removed: 20, 2020] [added: 19, 2021] there were [removed: 12] [added: 15] shareholders of record and [removed: 393,191] [added: 514,298] beneficial shareholders of our common stock.

| First Quarter | [removed: 0.250] | | [added: 0.375] | [removed: \-] | | [added: | | | 0.250 | | |]

| Second Quarter | [removed: 0.250] | | [added: 0.375] | [removed: \-] | | [added: | | | 0.250 | | |]

| Third Quarter | [added: | |] 0.375 | | | [removed: 0.250] | | [added: | 0.375 | | |]

| Fourth Quarter | [added: | |] 0.375 | | | [removed: 0.250] | | [added: | 0.375 | | |]

Information regarding our equity compensation plans, including both stockholder approved plans and non-stockholder approved plans, will be contained in our Proxy Statement for our [removed: 2020] [added: 2021] Annual Meeting of Stockholders under the caption “Equity Compensation Plan Information” and is incorporated by reference into this report.

During the fiscal year-ended December 31, [removed: 2019,] [added: 2020,] NXP repurchased [removed: no] shares [added: for an amount of $0.6 billion (representing 4.8 million shares)] under the 2019 Share Repurchase [removed: Program.][added: Program and as trade for tax.]

Under Dutch tax law, the repurchase of a company’s shares by an entity domiciled in the Netherlands results in a taxable [removed: event.][added: event, unless exemptions apply.]

| Period | | [added: | | | |] Total Number of Shares Purchased | | | [added: | | |] Average Price Paid per Share | | [added: | | | |] Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | [added: | | |] Maximum Number of Shares That May Yet Be Purchased Under the Plans or Program | | | [added: | | |] Number of Shares Purchased as Trade for Tax (1) | | [added: |]

[removed: |] (1) [removed: |] Reflects shares surrendered by participants to satisfy tax withholding obligations in connection with the Company's equity programs. [removed: |]

The following graph shows a comparison, since December 31, [removed: 2014] [added: 2015] of cumulative total return for NXP, the Standard & Poor's 500 Index, and the Philadelphia Stock Exchange Semiconductor Index.

The graph assumes $100 (not in millions) invested on December 31, [removed: 2014] [added: 2015] in our common stock and each of the indices.

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| | | | 2020 | | | | | | 2019 | | |

The following table provides a summary of share repurchase activity during the three months ended December 31, 2020:

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| September 28, 2020 – November 1, 2020 | | | | | | 427,399 | | | | | | $133.26 | | | | | | 14,913 | | | | | | 12,195,431 | | | | | | 412,486 | | |

| November 2, 2020 – November 29, 2020 | | | | | | 864,280 | | | | | | $145.43 | | | | | | 656,724 | | | | | | 9,753,343 | | | | | | 207,556 | | |

| November 30, 2020 – December 31, 2020 | | | | | | 468,879 | | | | | | $158.09 | | | | | | 435,898 | | | | | | 9,309,434 | | | | | | 32,981 | | |

| Total | | | | | | 1,760,558 | | | | | | | | | | | | 1,107,535 | | | | | | | | | | | | 653,023 | | |

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| | 2019 | | | 2018 | |

The following table provides a summary of shares repurchased by the Company in 2019:

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| January 1, 2019 – February 3, 2019 | | 5,323,164 | | | $80.18 | | 5,254,300 | | | 9,776,779 | | | 68,864 | |

| February 4, 2019 – March 3, 2019 | | 3,158,779 | | | $91.28 | | 3,134,759 | | | 6,618,000 | | | 24,020 | |

| March 4, 2019 – March 31, 2019 | | 454 | | | $93.30 | | — | | | 6,617,546 | | | 454 | |

| April 1, 2019 – May 5, 2019 | | 3,099,582 | | | $100.35 | | 3,096,600 | | | 3,517,964 | | | 2,982 | |

| May 6, 2019 – June 2, 2019 | | 3,516,432 | | | $94.98 | | 3,500,000 | | | 1,532 | | | 16,432 | |

| June 3, 2019 – June 30, 2019 | | — | | | $0.00 | | — | | | 1,532 | | | — | |

| July 1, 2019 – August 4, 2019 | | 84,865 | | | $101.81 | | — | | | — | | | 84,865 | |

| August 5, 2019 – September 1, 2019 | | 3,829 | | | $100.78 | | — | | | — | | | 3,829 | |

| September 2, 2019 – September 29, 2019 | | 200 | | | $106.00 | | — | | | — | | | 200 | |

| September 30, 2019 – November 3, 2019 | | 678,473 | | | $108.56 | | — | | | — | | | 678,473 | |

| November 4, 2019 – December 1, 2019 | | (60 | ) | | $108.27 | | — | | | 17,304,032 | | | (60 | ) |

| December 2, 2019 – December 31, 2019 | | — | | | $0.00 | | — | | | 15,715,857 | | | — | |

| Total | | 15,865,718 | | | | | 14,985,659 | | | | | | 880,059 | |

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The information set forth below for the five years ended December 31, [removed: 2019,] [added: 2020,] is not necessarily indicative of results of future operations, and should be read in conjunction with Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and accompanying notes thereto included in Part II, Item 8 of this Form 10-K to fully understand factors that may affect the comparability of the information presented below.

| | [added: | |] As of and for the years ended December 31, | | | | | | | | | | | | | | [added: | | | | | | | | | | | | |]

| ($ in millions unless otherwise stated) | [added: | | 2020 | | | | | |] 2019 | | | [added: | | |] 2018 | | | [added: | | |] 2017⁽¹⁾ | | | [removed: 2016] | | | [removed: 2015] [added: 2016] | | [added: |]

| Consolidated statements of operations data: | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | |]

| Revenue(2) | [added: | | 8,612 | | | | | |] 8,877 | | | [added: | | |] 9,407 | | | [added: | | |] 9,256 | | | [removed: 9,498] | | | [removed: 6,101] [added: 9,498] | | [added: |]

| Gross profit(3) | [added: | | 4,235 | | | | | |] 4,618 | | | [added: | | |] 4,851 | | | [added: | | |] 4,619 | | | [removed: 4,069] | | | [removed: 2,787] [added: 4,069] | | [added: |]

| Total operating expenses(4) | [removed: (4,002] | [removed: )] | [added: (3,931)] | [removed: (4,142] | [removed: )] | | [removed: (4,092] | [removed: )] | [added: (4,002)] | [removed: (4,228] | [removed: )] | | [removed: (2,035] | [removed: )] | [added: (4,142) | | | | | | (4,092) | | | | | | (4,228) | | |]

| Other income (expense)(5) | [added: | | 114 | | | | | |] 25 | | | [added: | | |] 2,001 | | | [added: | | |] 1,575 | | | [removed: 9] | | | [removed: 1,263] [added: 9] | | [added: |]

| Operating income (loss) | [added: | | 418 | | | | | |] 641 | | | [added: | | |] 2,710 | | | [added: | | |] 2,102 | | | [removed: (150] | [removed: )] | | [removed: 2,015] [added: (150)] | | [added: |]

| Financial income (expense) | [removed: (350] | [removed: )] | [added: (417)] | [removed: (335] | [removed: )] | | [removed: (366] | [removed: )] | [added: (350)] | [removed: (453] | [removed: )] | | [removed: (529] | [removed: )] | [added: (335) | | | | | | (366) | | | | | | (453) | | |]

| Net income (loss) attributable to stockholders | [added: | | 52 | | | | | |] 243 | | | [added: | | |] 2,208 | | | [added: | | |] 2,215 | | | [removed: 200] | | | [removed: 1,526] [added: 200] | | [added: |]

| Earnings per share data: | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | |]

| Net income per common share attributable to stockholders in $ | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | |]

| [removed: • Basic] [added: •Basic] | [added: | | 0.19 | | | | | |] 0.86 | | | [added: | | |] 6.78 | | | [added: | | |] 6.54 | | | [removed: 0.59] | | | [removed: 6.36] [added: 0.59] | | [added: |]

| [removed: • Diluted] [added: •Diluted] | [added: | | 0.18 | | | | | |] 0.85 | | | [added: | | |] 6.72 | | | [added: | | |] 6.41 | | | [removed: 0.58] | | | [removed: 6.10] [added: 0.58] | | [added: |]

| Weighted average number of shares of common stock outstanding during the year (in thousands) | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | |]

| Cash dividends declared per share(6) | [added: | | 1.50 | | | | | |] 1.25 | | | [added: | | |] 0.50 | | | [removed: —] | | | — | | | [added: | | |] — | | [added: |]

| Cash dividends declared per share in EUR(6) | [added: | | 1.29 | | | | | |] 1.12 | | | [added: | | |] 0.43 | | | [removed: —] | | | — | | | [added: | | |] — | | [added: |]

| Consolidated balance sheet data(7): | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | |]

| Cash and cash equivalents | [added: | | 2,275 | | | | | |] 1,045 | | | [added: | | |] 2,789 | | | [added: | | |] 3,547 | | | [removed: 1,894] | | | [removed: 1,614] [added: 1,894] | | [added: |]

| Total assets | [added: | | 19,847 | | | | | |] 20,016 | | | [added: | | |] 21,530 | | | [added: | | |] 24,049 | | | [removed: 24,898] | | | [removed: 26,354] [added: 24,898] | | [added: |]

| Net assets | [added: | | 9,151 | | | | | |] 9,655 | | | [added: | | |] 10,690 | | | [added: | | |] 13,716 | | | [removed: 11,156] | | | [removed: 11,803] [added: 11,156] | | [added: |]

| Working capital(8) | [added: | | 2,307 | | | | | |] 1,476 | | | [added: | | |] 2,947 | | | [added: | | |] 4,077 | | | [removed: 3,386] | | | [removed: 2,820] [added: 3,386] | | [added: |]

| Total debt(9), (10) | [added: | | 7,609 | | | | | |] 7,365 | | | [added: | | |] 7,354 | | | [added: | | |] 6,565 | | | [removed: 9,187] | | | [removed: 9,212] [added: 9,187] | | [added: |]

| Total stockholders’ equity | [added: | | 8,944 | | | | | |] 9,441 | | | [added: | | |] 10,505 | | | [added: | | |] 13,527 | | | [removed: 10,935] | | | [removed: 11,515] [added: 10,935] | | [added: |]

| Common stock | [added: | | 59 | | | | | |] 64 | | | [added: | | |] 67 | | | [removed: 71] | | | 71 | | | [removed: 68] | | [added: | 71 | | |]

| Other operating data: | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | |]

| Capital expenditures | [removed: (526] | [removed: )] | [added: (392)] | [removed: (611] | [removed: )] | | [removed: (552] | [removed: )] | [added: (526)] | [removed: (389] | [removed: )] | | [removed: (341] | [removed: )] | [added: (611) | | | | | | (552) | | | | | | (389) | | |]

| Depreciation and amortization(11) | [added: | | 1,988 | | | | | |] 2,047 | | | [added: | | |] 1,987 | | | [added: | | |] 2,173 | | | [removed: 2,205] | | | [removed: 517] [added: 2,205] | | [added: |]

| Consolidated statements of cash flows data: | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | |]

| Net cash provided by (used for): | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | |]

| Operating activities | [added: | | 2,482 | | | | | |] 2,373 | | | [added: | | |] 4,369 | | | [added: | | |] 2,447 | | | [removed: 2,303] | | | [removed: 1,330] [added: 2,303] | | [added: |]

| Investing activities | [removed: (2,284] | [removed: )] | [added: (418)] | [removed: (522] | [removed: )] | | [added: | | (2,284) | | | | | | (522) | | | | | |] 2,072 | | | [removed: (627] | [removed: )] | | [removed: (430] [added: (627)] | [removed: )] | [added: |]

| Financing activities(12) | [removed: (1,831] | [removed: )] | [added: (835)] | [removed: (4,597] | [removed: )] | | [removed: (2,886] | [removed: )] | [added: (1,831)] | [removed: (1,392] | [removed: )] | | [removed: (449] | [removed: )] | [added: (4,597) | | | | | | (2,886) | | | | | | (1,392) | | |]

| Increase (decrease) in cash and cash equivalents | [removed: (1,742] | [removed: )] | [added: 1,229] | [removed: (750] | [removed: )] | | [added: | | (1,742) | | | | | | (750) | | | | | |] 1,633 | | | [removed: 284] | | | [removed: 451] [added: 284] | | [added: |]

[removed: |] (1) [removed: |] Reflects the results of the SP business up to the February 6, 2017 divestment. [removed: |]

[removed: |] (2) [removed: |] Under the modified retrospective method, revenue amounts before January 1, 2018 have not been adjusted for the impact of adopting ASC 606. [removed: |]

[removed: | (3) | Gross profit in 2019 includes a charge of $8 million resulting from the purchase accounting effect on the inventory acquired from Marvell.] In 2016 gross profit includes a charge of $448 [removed: million (2015: $149 million),] [added: million,] resulting from the purchase accounting effect on the inventory acquired from Freescale. [removed: |]

[removed: | (4) | In 2019, total operating expenses include charges related to the acquisition of Marvell as follows - $7 million for the amortization of acquisition-related intangibles and $5 million of acquisition related costs.] Total operating expenses in 2016 include charges related to the acquisition of Freescale as follows - $1,430 million for the amortization of acquisition-related intangibles, which includes an impairment charge of $89 million relative to [removed: in-process research and development (IPR&D)] [added: IPR&D] that was acquired from Freescale, and $53 million of merger and integration related costs. [removed: In 2015, total operating expenses include charges related to the acquisition of Freescale as follows - $226 million in restructuring charges, $105 million for the amortization of acquisition-related intangibles, $49 million of share-based compensation charges related to employees terminated as a result of the Merger and $42 million of merger related costs. |]

[removed: |] (6) [removed: |] Reflects the interim dividends declared under the previously announced Quarterly Dividend Program. [removed: |]

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| •Basic | | | 279,763 | | | | | | 282.056 | | | | | | 325.781 | | | | | | 338.646 | | | | | | 338.477 | | |

| •Diluted | | | 283,809 | | | | | | 285.911 | | | | | | 328.606 | | | | | | 345.802 | | | | | | 347.607 | | |

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(3) Gross profit in 2020 includes a charge of $17 million and in 2019 includes a charge of $8 million resulting from the purchase accounting effect on the inventory acquired from Marvell.

(4) In 2020, total operating expenses include charges related to an impairment charge of $36 million relative to in-process research and development (IPR&D) that was acquired from Freescale.

In 2019, total operating expenses include charges related to the acquisition of Marvell as follows - $7 million for the amortization of acquisition-related intangibles and $5 million of acquisition related costs.

(5) Other income (expense) in 2020 includes the net gain on the sale of the Voice and Audio Solutions (VAS) assets of $110 million and in 2018 includes the termination compensation received from Qualcomm ($2 billion).

Other income (expense) in 2017 includes the recognition of the gain on the sale of our SP business ($1,597 million).

(9) On May 1, 2020, NXP entered into three new senior unsecured notes, which are due in 2025 ($500 million), 2027 ($500 million) and 2030 ($1 billion).

NXP used the net proceeds for general corporate purposes as well as the repayment of the $1,350 million aggregate principal amount of outstanding notes due 2021 and the $400 million aggregate principal amount of outstanding notes due 2022.

On June 18, 2019, NXP entered into two new senior unsecured notes, which are due in 2026 ($750 million) and 2029 ($1 billion).

NXP used the net proceeds for general corporate purposes as well as the repayment of the $600 million outstanding aggregate principal amount of 2020 senior notes.

In addition, in December 2019 NXP fully repaid the $1.15 billion 2019 cash convertible senior notes.

On December 6, 2018, NXP entered into 3 new senior unsecured notes, which are due in 2024 ($1 billion), 2026 ($500 million) and 2028 ($500 million).

NXP used the net proceeds for general corporate purposes as well as the repayment of the $1 billion senior unsecured bridge term credit facility agreement (the “Bridge Loan”), which was entered into on September 19, 2018 for general corporate purposes as well as to finance parts of the announced equity buy-back program.

In April 2018, NXP fully repaid the $750 million senior unsecured notes on the due date.

In addition, NXP fully repaid the $500 million senior unsecured notes due in 2023.

In February 2017, NXP repaid all term loans, including Term Loan B (defined below), with the funds from the proceeds of the divestment of the SP business.

Additionally, $500 million was repaid on the 2021 unsecured senior notes in March 2017.

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(11) Depreciation and amortization includes the effect of purchase accounting related to acquisitions in certain years.

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The results of their operations and the estimated fair value of the assets acquired and liabilities assumed in the business combination are included in our financial statements from the date of acquisition forward.

On December 7, 2015, we acquired Freescale Semiconductor, Ltd. (“Freescale”) for a total consideration of $11.6 billion (the “Merger”).

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| • Basic | 282,056 | | | 325,781 | | | 338,646 | | | 338,477 | | | 239,764 | |

| • Diluted | 285,911 | | | 328,606 | | | 345,802 | | | 347,607 | | | 250,116 | |

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| (5) | Other income (expense) in 2018 includes the termination compensation received from Qualcomm ($2 billion). Other income (expense) in 2017 includes the recognition of the gain on the sale of our SP business ($1,597 million). Other income (expense) in 2015 includes the recognition of the gains from the sale of our Bipolar business on November 9, 2015 and the sale of our RF Power business on December 7, 2015. See the section on *Other Significant Transactions* in Part I, Item 1. Business. |

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| (9) | On June 18, 2019, NXP entered into two new senior unsecured notes, which are due in 2026 ($750 million) and 2029 ($1 billion). NXP used the net proceeds for general corporate purposes as well as the repayment of the $600 million outstanding aggregate principal amount of 2020 senior notes. In addition, in December 2019 NXP fully repaid the $1.15 billion 2019 cash convertible senior notes. On December 6, 2018, NXP entered into 3 new senior unsecured notes, which are due in 2024 ($1 billion), 2026 ($500 million) and 2028 ($500 million). NXP used the net proceeds for general corporate purposes as well as the repayment of the $1 billion senior unsecured bridge term credit facility agreement (the “Bridge Loan”), which was entered into on September 19, 2018 for general corporate purposes as well as to finance parts of the announced equity buy-back program. In April 2018, NXP fully repaid the $750 million senior unsecured notes on the due date. In addition, NXP fully repaid the $500 million senior unsecured notes due in 2023. In February 2017, NXP repaid all term loans, including Term Loan B (defined below), with the funds from the proceeds of the divestment of the SP business. Additionally, $500 million was repaid on the 2021 unsecured senior notes in March 2017. On December 7, 2015, in connection with the Merger, NXP entered into a $2.7 billion secured term loan (“Term Loan B”). Proceeds from Term Loan B, among others, were used to (i) pay the cash consideration in connection with the Merger, (ii) effect the repayment of certain amounts under Freescale’s outstanding credit facility and (iii) pay certain transaction costs. |

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[removed: | Report] [added: Report] of [removed: independent registered public accounting firm | [57](#sbfe9b771abe44885b255ed40b5b6396c) |][added: Independent Registered Public Accounting Firm]

| Consolidated Statements of Operations | [removed: [60](#s637ae32319874182be9e21c448c72215)] | [added: | [62](#i3a0bef55a4854c91b58b82665982b65b_76) | | |]

| Consolidated Statements of Comprehensive Income | [removed: [61](#s0f7ae66161084446bd0304c826dd7266)] | [added: | [63](#i3a0bef55a4854c91b58b82665982b65b_79) | | |]

| Consolidated Balance Sheets | [removed: [62](#sb66d1b2b982b4b1c87712ce90eb70528)] | [added: | [64](#i3a0bef55a4854c91b58b82665982b65b_82) | | |]

| Consolidated Statements of Cash Flows | [removed: [63](#s05e6b7dc3da44b6186acb71d464bfdaa)] | [added: | [65](#i3a0bef55a4854c91b58b82665982b65b_88) | | |]

| Consolidated Statements of Changes in Equity | [removed: [65](#sF8CBC7EF881A01C1139A72ABBBC3DF86)] | [added: | [67](#i3a0bef55a4854c91b58b82665982b65b_91) | | |]

| Notes to the Consolidated Financial Statements | [removed: [66](#s230b574e26804da68aa4e2ea5ded5b06)] | [added: | [68](#i3a0bef55a4854c91b58b82665982b65b_94) | | |]

| Supplementary Financial Data (unaudited) | [removed: [110](#s32af4285ab134f06bd8aac06741c90e3)] | [added: | [109](#i3a0bef55a4854c91b58b82665982b65b_190) | | |]

[removed: *Opinions on the Consolidated Financial Statements] [added: Definition] and [added: Limitations of] Internal Control [removed: over] [added: Over] Financial [removed: Reporting*][added: Reporting]

We have audited the accompanying consolidated balance [removed: sheets] [added: sheet] of NXP Semiconductors N.V. and subsidiaries (the Company) as of December 31, [removed: 2019 and 2018,] [added: 2019,] the related consolidated statements of operations, comprehensive income, cash flows and changes in equity for each of the years in the [removed: three-year] [added: two‑year] period ended December 31, 2019, and the related notes (collectively, the consolidated financial statements).

We [removed: also] have audited [removed: the Company’s] [added: NXP Semiconductors N.V.’s] internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in [removed: *Internal Control - Integrated Framework* *(2013)*] [added: Internal Control—Integrated Framework] issued by the Committee of Sponsoring Organizations of the Treadway [removed: Commission.][added: Commission (2013 framework) (the COSO criteria).]

In our opinion, the consolidated financial statements [removed: referred to above] present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2019 and 2018,] [added: 2019,] and the results of its operations and its cash flows for each of the years in the [removed: three-year] [added: two‑year] period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.

[removed: Also in] [added: In] our opinion, [removed: the Company] [added: NXP Semiconductors N.V. (the Company)] maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2019] [added: 2020,] based on [removed: criteria established in *Internal Control - Integrated Framework (2013)* issued by] the [removed: Committee of Sponsoring Organizations of the Treadway Commission.][added: COSO criteria.]

[removed: *Basis] [added: Basis] for [removed: Opinions*][added: Opinion]

The Company’s management is responsible for [removed: these consolidated financial statements, for] maintaining effective internal control over financial [removed: reporting,] [added: reporting] and for its assessment of the effectiveness of internal control over financial [removed: reporting,] [added: reporting] included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s [removed: consolidated financial statements and an opinion on the Company’s] internal control over financial reporting based on our [removed: audits.][added: audit.]

Those standards require that we plan and perform the [removed: audits] [added: audit] to obtain reasonable assurance about whether [removed: the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether] effective internal control over financial reporting was maintained in all material respects.

Our audits [removed: of the consolidated financial statements] included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

[added: Our audit also included evaluating the accounting] principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit [removed: of internal control over financial reporting] included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, [removed: and] testing and evaluating the design and operating effectiveness of internal control based on the assessed [removed: risk.][added: risk, and performing such other procedures as we considered necessary in the circumstances.]

We believe that our audits provide a reasonable basis for our [removed: opinions.][added: opinion.]

[removed: *Definition and Limitations of] [added: Opinion on] Internal Control [removed: over] [added: Over] Financial [removed: Reporting*][added: Reporting]

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with [removed: U.S.] generally accepted accounting principles.

[removed: *Critical] [added: Critical] Audit [removed: Matters*][added: Matter]

The critical audit [removed: matters] [added: matter] communicated below [removed: are matters] [added: is a matter] arising from the current period audit of the [removed: consolidated] financial statements that [removed: were] [added: was] communicated or required to be communicated to the audit committee and that: (1) [removed: relate] [added: relates] to accounts or disclosures that are material to the [removed: consolidated] financial statements and (2) involved our especially challenging, [removed: subjective,] [added: subjective] or complex judgments.

The communication of [added: the] critical audit [removed: matters] [added: matter] does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matters] [added: matter] below, providing [added: a] separate [removed: opinions] [added: opinion] on the critical audit [removed: matters] [added: matter] or on the accounts or disclosures to which [removed: they relate.][added: it relates.]

[removed: As discussed in Note 3 to the consolidated financial statements, on] [added: On] December 6, 2019, [added: we completed] the [removed: Company acquired] [added: acquisition of] Marvell’s Wireless WiFi Connectivity Business Unit, Bluetooth technology portfolio and related assets [removed: (“Marvell”) in a business combination] for [removed: net] [added: total] consideration of [removed: $1,705 million.][added: $1.7 billion, net of closing adjustments.]

These [removed: personal injury] claims allege a link between working in semiconductor manufacturing clean room facilities and birth [removed: defects.][added: defects in 18 individuals.]

We have served as the Company’s auditor since [removed: 2009*.*][added: 2020.]

| ($ in millions, unless otherwise stated) | [added: | |] For the years ended December 31, | | | | | | | | [added: | | | | | | |]

| | [added: | |] 2019 | | | [removed: 2018] | | | [removed: 2017] [added: 2018] | | [added: |]

| Revenue | [added: | | 8,612 | | | | | |] 8,877 | | | [removed: 9,407] | | | [removed: 9,256] [added: 9,407] | | [added: |]

| Cost of revenue | [removed: (4,259] | [removed: )] | [added: (4,377)] | [removed: (4,556] | [removed: )] | | [removed: (4,637] | [removed: )] | [added: (4,259) | | | | | | (4,556) | | |]

| Gross profit | [added: | | 4,235 | | | | | |] 4,618 | | | [removed: 4,851] | | | [removed: 4,619] [added: 4,851] | | [added: |]

| Research and development | [removed: (1,643] | [removed: )] | [added: (1,725)] | [removed: (1,700] | [removed: )] | | [removed: (1,554] | [removed: )] | [added: (1,643) | | | | | | (1,700) | | |]

| Selling, general and administrative | [removed: (924] | [removed: )] | [added: (879)] | [removed: (993] | [removed: )] | | [removed: (1,090] | [removed: )] | [added: (924) | | | | | | (993) | | |]

| Amortization of acquisition-related intangible assets | [removed: (1,435] | [removed: )] | [added: (1,327)] | [removed: (1,449] | [removed: )] | | [removed: (1,448] | [removed: )] | [added: (1,435) | | | | | | (1,449) | | |]

| Total operating expenses | [removed: (4,002] | [removed: )] | [added: (3,931)] | [removed: (4,142] | [removed: )] | | [removed: (4,092] | [removed: )] | [added: (4,002) | | | | | | (4,142) | | |]

| Other income (expense) | [added: | | 114 | | | | | |] 25 | | | [removed: 2,001] | | | [removed: 1,575] [added: 2,001] | | [added: |]

| Operating income (loss) | [added: | | 418 | | | | | |] 641 | | | [removed: 2,710] | | | [removed: 2,102] [added: 2,710] | | [added: |]

| Report of independent registered public accounting firm | | | [58](#i3a0bef55a4854c91b58b82665982b65b_73) | | |

To the Shareholders and the Board of Directors of NXP Semiconductors N.V.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of NXP Semiconductors N.V. (the Company) as of December 31, 2020, the related consolidated statement of operations, comprehensive income, changes in equity and cash flows for the year ended December 31, 2020, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020, and the results of its operations and its cash flows for the period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission “(2013 framework)”, and our report dated February 25, 2021 expressed an unqualified opinion thereon.

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

We believe that our audit provides a reasonable basis for our opinion.

| Uncertain tax positions | | | | | | | | |

| *Description of the Matter* | | | | | | As discussed in Note 7, at December 31, 2020, the Company had approximately $161 million of unrecognized tax benefits associated with uncertain tax positions. Uncertainty in a tax position may arise as tax laws are subject to interpretation. The Company uses significant judgment in (1) determining whether a tax position’s technical merits are more-likely-than-not to be sustained and (2) measuring the amount of tax benefit that qualifies for recognition. | | |

| | | | | | | As part of our initial audit, auditing the recognition and measurement of tax positions related to uncertain tax positions involved significant auditor judgment and use of tax professionals with specialized skills and knowledge because both the recognition and measurement of the tax positions are complex, highly judgmental and based on interpretations of tax laws and legal rulings. | | |

| *How We Addressed the Matter in Our Audit* | | | | | | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process to record the reserve for uncertain tax positions. For example, we tested controls over management’s evaluation of the technical merits of tax positions and identification of uncertain tax positions and the controls to measure the benefit of those tax positions, including management’s review of the inputs and calculations of unrecognized tax benefits resulting from uncertain tax positions. | | |

| | | | | | | To test the amounts recorded as uncertain tax positions we involved our tax professionals with specialized skills and knowledge to evaluate the technical merits of the Company’s tax positions. Our procedures included, among others, inspecting correspondence, assessments and settlements from the relevant tax authorities and evaluating income tax opinions or other third-party advice obtained by the Company. We also applied our knowledge and experience with the application of federal, foreign and state income tax laws to evaluate the Company’s accounting for those tax positions. We analyzed the Company’s assumptions and data used to determine the amount of tax benefit to recognize and tested the accuracy of the calculations. We also evaluated the Company’s income tax disclosures included in Note 7 in relation to these matters. | | |

/s/ Ernst & Young Accountants LLP

Eindhoven, the Netherlands

To the Shareholders and the Board of Directors of NXP Semiconductors N.V.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2020, the related consolidated statements of operations, comprehensive income, cash flows and changes in equity for the year ended December 31, 2020 and the related notes and our report dated February 25, 2021 expressed an unqualified opinion thereon.

Basis for Opinion

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Ernst & Young Accountants LLP

Eindhoven, the Netherlands

February 25, 2021

Report of Independent Registered Public Accounting Firm

*Opinion on the Consolidated Financial Statements*

*Basis for Opinion*

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We served as the Company’s auditor from 2009 to 2019.

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Our audits also included evaluating the accounting

Our audits also included performing such other procedures as we considered necessary in the circumstances.

*Evaluation of fair value of certain intangible assets acquired in Marvell business acquisition*

The assets acquired included amongst others $324 million of developed technology and $170 million of in-process R&D.

Management valued these intangible assets on a preliminary basis using the multi-period excess earnings method under the income approach.

This method reflects the present values of the projected cash flows that are expected to be generated by the developed technology and in-process R&D less charges representing the contribution of other assets to those cash flows.

We identified the evaluation of the preliminary acquisition date fair values of the developed technology and in-process R&D as a critical audit matter.

There was a high degree of subjectivity in evaluating the discounted cash flow models used to calculate the acquisition-date fair value of these intangible assets including the allocation of projected cash flows between developed technology and in-process R&D.

In addition, the discounted cash flow models included internally-developed assumptions such as expected revenue growth rates, profitability and discount rates, and the calculated fair values of such assets were sensitive to possible changes to these assumptions.

The primary procedures we performed to address this critical audit matter included the following.

We tested certain internal controls over the Company’s acquisition-date valuation process including controls related to the development of the assumptions based on comparable market data.

We compared the assumptions, including the Company’s forecasted growth rates and profitability, to those of market participants.

We also involved valuation professionals with specialized skills and knowledge, who assisted in developing an estimate of the fair value of the acquired business using the Company’s cash flow forecast and an independently developed discount rate, and

evaluating the Company’s discount rate by comparing it against a discount rate range that was independently developed using publicly available market data for comparable entities and transactions.

*Evaluation of the accrued liability and disclosure of range of reasonably possible losses related to personal injury claims*

As discussed in Note 16 to the consolidated financial statements, the Company is involved as a defendant in personal injury claims.

Specifically, the Company is involved in legal proceedings claiming personal injuries to the children of former employees as a result of the employees’ alleged exposure to chemicals used in semiconductor manufacturing clean room environments operated by the Company or former parent companies Philips and Motorola.

As at December 31, 2019, the Company has accrued $44 million and disclosed the aggregate range of reasonably possible losses in excess of the amount accrued between $0 million and $66 million for potential and current legal proceedings, of which a portion relates to personal injury claims.

We identified the evaluation of the accrued liability and the disclosure of the aggregate range of reasonably possible losses in excess of the amount accrued related to personal injury claims as a critical audit matter, because it required subjective auditor judgment.

This is due to the nature of the estimate resulting from the varying stages of the proceedings, the existence of multiple defendants in such claims whose share of liability has yet to be determined, the numerous unresolved issues in many of the claims, and the attendant uncertainty of the various potential outcomes of such claims.

The primary procedures we performed to address this critical audit matter included the following.

We tested certain internal controls over the Company’s personal injury claims accrual and disclosure process, including controls related to the evaluation of information from external and internal legal counsel and controls related to the development of assumptions and review of other information used in the Company’s calculations.

We inspected letters received directly from the Company’s external legal counsel to confirm underlying information used by the Company in its calculation of the accrual and the range of reasonably possible losses.

We inquired of management and its internal legal counsel and evaluated key inputs and assumptions used in its calculation.

We evaluated the Company’s ability to estimate its monetary exposure to personal injury claims by comparing historically recorded liabilities to actual amounts incurred through settlement agreements.

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Our management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2019] [added: 2020] based on the criteria established in “*Internal Control* - *Integrated Framework (2013)*” by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on that assessment our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2019.][added: 2020.]

The Company’s independent registered public accounting firm, [removed: KPMG] [added: Ernst & Young] Accountants [removed: N.V.,] [added: LLP,] has issued an audit report on the Company’s internal control over financial reporting, which appears in Part II, Item 8 of this Form 10-K.

There were no changes in the Company's internal control over financial reporting during the three and twelve month periods ended December 31, [removed: 2019,] [added: 2020,] which were identified in connection with management's evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Information regarding certain corporate governance and other matters appearing under the captions "Corporate Governance," "How our Board Governs and Is Governed" and [removed: "Proposal] [added: "Item] 3: (Re-)appointment of Directors," in the [removed: 2020] [added: 2021] Proxy Statement to be filed with the SEC within 120 days after December 31, [removed: 2019] [added: 2020] in connection with the solicitation of proxies for the Company’s [removed: 2020] [added: 2021] annual meeting of shareholders, are incorporated herein by reference.

The sections entitled “Executive Compensation” and “Non-Employee Director Compensation” in our [removed: 2020] [added: 2021] Proxy Statement to be filed with the SEC within 120 days after December 31, [removed: 2019,] [added: 2020,] are incorporated herein by reference.

The sections entitled “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in our [removed: 2020] [added: 2021] Proxy Statement to be filed with the SEC within 120 days after December 31, [removed: 2019,] [added: 2020,] are incorporated herein by reference.