Item 8. Financial Statements and Supplementary Data

List of Financial Statements

Report of independent registered public accounting firm						59
- EY Accountants B.V.; Amsterdam, the Netherlands; PCAOB ID:			1396
Consolidated Statements of Operations						64
Consolidated Statements of Comprehensive Income						65
Consolidated Balance Sheets						66
Consolidated Statements of Cash Flows						67
Consolidated Statements of Changes in Equity						69
Notes to the Consolidated Financial Statements						70

Report of Independent Registered Public Accounting Firm

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 sheets of NXP Semiconductors N.V. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, cash flows and changes in equity for each of the three years in the period ended December 31, 2025, 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, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, 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, 2025, 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 19, 2026 expressed an unqualified opinion hereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. 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 audits 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 financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the 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 financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matters 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 matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

			Revenue recognition – Variable consideration under the distributor incentive programs
Description of the Matter			As described in Note 2 to the consolidated financial statements, revenue is recorded for customers based on the amount that is expected to be collected, which considers whether the price is subject to a refund or adjustment. This variable consideration is estimated and reflects the impact of distributor incentive programs. The Company’s policy is to estimate such variable consideration using the most likely amount method, which takes into account the contractual terms, historical experience of rebate rates and pricing for distributors who participate in a distributor incentive program. Auditing management’s estimate of variable consideration under the distributor incentive programs is complex, due to the uncertainty inherent to the estimate, the application of management judgment, and the significant assumptions as noted above utilized in estimating the variable consideration.
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 for estimating the variable consideration of the distributor incentive programs. For example, we tested controls over management’s review of the assumptions used, results of calculations and assessment of the underlying data. To test management’s estimate of the variable consideration of the distributor incentive programs, our audit procedures included, among others, evaluating the estimation methodology used, the significant assumptions described above, and the underlying data used by the Company. We evaluated the estimation methodology used by management against the requirements of ASC 606. To evaluate the significant assumptions used by management, we compared them to the historical results and practices of the Company. Our audit procedures to test the completeness and accuracy of data inputs used by the Company included vouching distributor inventory on hand, rebate rates used and amounts of unclaimed distributor resales to contractual agreements, external confirmations and historical price and claim data, as appropriate. We also assessed the accuracy of management’s estimates by testing a sample of actual claimed allowances subsequent to year-end, against the period-end estimate.

			Valuation of certain intangible assets acquired in business combinations
Description of the Matter			As described in Notes 2 and 3 to the consolidated financial statements, during 2025, the Company completed the acquisitions of TTTech Auto, Aviva Links and Kinara, Inc., for net considerations of $766 million, $248 million and $284 million, respectively. The fair value of identified intangible assets acquired, totaled $798 million and principally consisted of software, existing technology and in-process research and development (collectively, the “intangible assets”). The Company used the excess earnings method to estimate the fair values of the intangible assets acquired. The significant assumption management used to estimate the fair values of the intangible assets was the revenue growth rate for each acquired business. Auditing the Company’s valuation of the intangible assets was complex and required a high degree of auditor judgment, due to the significant estimation uncertainty inherent in assessing the revenue growth rates used by management, particularly because of the relatively limited market data about software-defined vehicle and AI-powered edge systems, on which to base the revenue growth rates.
How We Addressed the Matter in Our Audit			We obtained an understanding, evaluated the design and tested the operating effectiveness of the controls over the Company’s accounting for business combination transactions. For example, we tested controls over the identification of intangible assets and the determination of the revenue growth rates. To audit the Company’s valuation of the intangible assets acquired, among other procedures, we read the purchase agreements and involved our valuation specialists to assist with our evaluation of whether the valuation methodology used by the Company was consistent with common valuation practice. Other procedures we performed, included assessing the reasonableness of the revenue growth rates by comparison to relevant third-party industry reports and, where possible, to historical revenues of the acquired business and anticipated and confirmed design-in and contract wins.

/s/ EY Accountants B.V.

We have served as the Company’s auditor since 2020.

Amsterdam, the Netherlands

February 19, 2026

Report of Independent Registered Public Accounting Firm

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

Opinion on Internal Control Over Financial Reporting

We have audited NXP Semiconductors N.V.’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, NXP Semiconductors N.V. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, cash flows and changes in equity for each of the three years in the period ended December 31, 2024 and the related notes (collectively referred to as the “consolidated financial statements”) and our report dated February 20, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial 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 internal control over financial reporting 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 effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial 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 generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ EY Accountants B.V.

Eindhoven, the Netherlands

February 19, 2026

NXP Semiconductors N.V.

Consolidated Statements of Operations

($ in millions, unless otherwise stated)			For the years ended December 31,
			2025						2024						2023
Revenue			12,269						12,614						13,276
Cost of revenue			(5,553)						(5,495)						(5,723)
Gross profit			6,716						7,119						7,553
Research and development			(2,360)						(2,347)						(2,418)
Selling, general and administrative			(1,204)						(1,164)						(1,159)
Amortization of acquisition-related intangible assets			(117)						(136)						(300)
Total operating expenses			(3,681)						(3,647)						(3,877)
Other income (expense)			12						(55)						(15)
Operating income (loss)			3,047						3,417						3,661
Financial income (expense):
Other financial income (expense)			(384)						(318)						(309)
Income (loss) before income taxes			2,663						3,099						3,352
Benefit (provision) for income taxes			(525)						(545)						(523)
Results relating to equity-accounted investees			(70)						(12)						(7)
Net income (loss)			2,068						2,542						2,822
Less: Net income (loss) attributable to non-controlling interests			47						32						25
Net income (loss) attributable to stockholders			2,021						2,510						2,797
Earnings per share data:
Net income (loss) per common share attributable to stockholders in $:
– Basic			8.00						9.84						10.83
– Diluted			7.95						9.73						10.70
Weighted average number of shares of common stock outstanding during the year (in thousands):
– Basic			252,703						255,208						258,381
– Diluted			254,331						257,848						261,370

See accompanying notes to the Consolidated Financial Statements.

NXP Semiconductors N.V.

Consolidated Statements of Comprehensive Income

($ in millions, unless otherwise stated)			For the years ended December 31,
			2025						2024						2023
Net income (loss)			2,068						2,542						2,822
Other comprehensive income (loss), net of tax:
Change in fair value cash flow hedges			7						(6)						2
Change in foreign currency translation adjustment			181						(111)						42
Change in net actuarial gain (loss)			42						10						(30)
Total other comprehensive income (loss)			230						(107)						14
Total comprehensive income (loss)			2,298						2,435						2,836
Less: Comprehensive income (loss) attributable to non-controlling interests			47						32						25
Total comprehensive income (loss) attributable to stockholders			2,251						2,403						2,811

See accompanying notes to the Consolidated Financial Statements.

NXP Semiconductors N.V.

Consolidated Balance Sheets

($ in millions, unless otherwise stated)			As of December 31,
			2025						2024
Assets
Current assets:
Cash and cash equivalents			3,267						3,292
Accounts receivables, net			1,055						1,032
Assets held for sale			372						—
Inventories, net			2,577						2,356
Other current assets			669						625
Total current assets			7,940						7,305
Non-current assets:
Deferred tax assets			1,213						1,251
Other non-current assets			2,584						1,796
Property, plant and equipment, net			2,977						3,267
Identified intangible assets, net			1,547						836
Goodwill			10,299						9,930
Total non-current assets			18,620						17,080
Total assets			26,560						24,385
Liabilities and equity
Current liabilities:
Accounts payable			997						1,017
Restructuring liabilities			189						147
Other current liabilities			1,445						1,434
Short-term debt			1,250						500
Total current liabilities			3,881						3,098
Non-current liabilities:
Long-term debt			10,972						10,354
Restructuring liabilities			81						10
Other non-current liabilities			1,175						1,392
Total non-current liabilities			12,228						11,756
Equity:
Non-controlling interests			395						348
Stockholders’ equity:
Preferred stock, par value €0.20 per share:
Authorized: 645,754,500 (2024: 645,754,500 shares)
Issued: none
Common stock, par value €0.20 per share:
Authorized: 430,503,000 shares (2024: 430,503,000 shares)
Issued and fully paid: 274,519,638 shares (2024: 274,519,638 shares)			56						56
Capital in excess of par value			15,424						14,962
Treasury shares, at cost: 21,664,934 shares (2024: 20,195,011 shares)			(4,283)						(4,004)
Accumulated other comprehensive income (loss)			213						(17)
Accumulated deficit			(1,354)						(1,814)
Total Stockholders’ equity			10,056						9,183
Total equity			10,451						9,531
Total liabilities and equity			26,560						24,385

See accompanying notes to the Consolidated Financial Statements.

NXP Semiconductors N.V.

Consolidated Statements of Cash Flows

($ in millions, unless otherwise stated)			For the years ended December 31,
			2025						2024						2023
Cash flows from operating activities:
Net income (loss)			2,068						2,542						2,822
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation, amortization and impairment			832						925						1,106
Share-based compensation			462						461						411
Amortization of discount (premium) on debt, net			3						3						2
Amortization of debt issuance costs			7						7						8
Net (gain) loss on sale of assets			(29)						(3)						(1)
Results relating to equity-accounted investees			70						12						7
(Gain) loss on equity securities, net			2						18						(1)
Deferred tax expense (benefit)			(8)						(272)						(267)
Changes in operating assets and liabilities:
(Increase) decrease in receivables and other current assets			(43)						(207)						(138)
(Increase) decrease in inventories			(308)						(222)						(353)
Increase (decrease) in accounts payable and accrued liabilities			(50)						(188)						(119)
Decrease (increase) in other non-current assets			(212)						(306)						16
Exchange differences			24						14						22
Other items			2						(2)						(2)
Net cash provided by (used for) operating activities			2,820						2,782						3,513
Cash flows from investing activities:
Purchase of identified intangible assets			(140)						(149)						(179)
Capital expenditures on property, plant and equipment			(397)						(727)						(827)
Insurance recoveries received for equipment damage			—						2						—
Proceeds from disposals of property, plant and equipment			2						4						1
Advance payment from sale of property, plant and equipment			—						30						—
Purchase of interests in businesses, net of cash acquired			(1,175)						—						—
Investment in short-term deposits			(500)						—						(409)
Proceeds of short-term deposits			500						409						—
Purchase of investments			(649)						(260)						(94)
Proceeds from the sale of investments			2						5						—
Net cash provided by (used for) investing activities			(2,357)						(686)						(1,508)
Cash flows from financing activities:
Repurchase of long-term debt			(500)						(1,000)						—
Proceeds from the issuance of long-term debt			1,868						670						—
Cash paid for debt issuance costs			(8)						(1)						—
Proceeds from the issuance of commercial paper notes			2,426						—						—
Repayment of commercial paper notes			(2,426)						—						—
Dividends paid to common stockholders			(1,025)						(1,038)						(1,006)
Proceeds from issuance of common stock through stock plans			83						82						71

NXP Semiconductors N.V. Consolidated Statements of Cash Flows (Continued)
Purchase of treasury shares and restricted stock unit withholdings			(899)						(1,373)						(1,053)
Other, net			(13)						(2)						(2)
Net cash provided by (used for) financing activities			(494)						(2,662)						(1,990)
Effect of changes in exchange rates on cash positions			6						(4)						2
Increase (decrease) in cash and cash equivalents			(25)						(570)						17
Cash and cash equivalents at beginning of period			3,292						3,862						3,845
Cash and cash equivalents at end of period			3,267						3,292						3,862
Supplemental disclosures to the consolidated cash flows
Net cash paid during the period for:
Interest			306						243						261
Income taxes, net of refunds			581						867						919
Net gain (loss) on sale of assets:
Cash proceeds from the sale of assets			38						4						1
Book value of these assets			(9)						(1)						—
Non-cash investing activities:
Non-cash capital expenditures			110						161						266

See accompanying notes to the Consolidated Financial Statements.

NXP Semiconductors N.V.

Consolidated Statements of Changes in Equity

For the years ended December 31, 2025, 2024 and 2023

($ in millions, unless otherwise stated)						Out-standing number of shares (in thousands)						Common stock						Capital in excess of par value						Treasury shares at cost						Accumu-lated other compre-hensive income (loss)						Accumu-lated deficit						Total stock-holders’ equity						Non- con-trolling interests						Total equity
Balance as of January 1, 2023						259,463						56						14,091						(2,799)						76						(3,975)						7,449						291						7,740
Net income (loss)																																				2,797						2,797						25						2,822
Other comprehensive income																														14												14												14
Share-based compensation plans																		410																								410												410
Shares issued pursuant to stock awards						3,187																		638												(567)						71												71
Treasury shares repurchased and retired						(5,460)																		(1,049)																		(1,049)												(1,049)
Dividends common stock																																				(1,048)						(1,048)												(1,048)
Balance as of December 31, 2023						257,190						56						14,501						(3,210)						90						(2,793)						8,644						316						8,960
Net income (loss)																																				2,510						2,510						32						2,542
Other comprehensive income																														(107)												(107)												(107)
Share-based compensation plans																		461																								461												461
Shares issued pursuant to stock awards						2,861																		579												(497)						82												82
Treasury shares repurchased and retired						(5,727)																		(1,373)												—						(1,373)												(1,373)
Dividends common stock																																				(1,034)						(1,034)												(1,034)
Balance as of December 31, 2024						254,324						56						14,962						(4,004)						(17)						(1,814)						9,183						348						9,531
Net income (loss)																																				2,021						2,021						47						2,068
Other comprehensive income																														230												230												230
Share-based compensation plans																		462																								462												462
Shares issued pursuant to stock awards						2,888																		620												(536)						84												84
Treasury shares repurchased and retired						(4,358)																		(899)																		(899)												(899)
Dividends common stock																																				(1,025)						(1,025)												(1,025)
Balance as of December 31, 2025						252,854						56						15,424						(4,283)						213						(1,354)						10,056						395						10,451

See accompanying notes to the Consolidated Financial Statements.

NXP Semiconductors N.V.

Notes to the Consolidated Financial Statements

All amounts in millions of $ unless otherwise stated

Note 1 – Basis of Presentation and Overview

The Consolidated Financial Statements include the Company and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. Net income (loss) includes the portion of the earnings of subsidiaries applicable to non-controlling interests. The income (loss) and equity attributable to non-controlling interests are disclosed separately in the Consolidated Statements of Operations and in the Consolidated Balance Sheets under non-controlling interests. We have reclassified certain prior period amounts to conform to current period presentation.

Segment reporting

NXP has one reportable segment representing the entity as a whole and reflects the way in which our chief operating decision maker, who is our Chief Executive Officer, executes operating decisions, allocates resources, and manages the growth and profitability of the Company.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Note 2 - Significant Accounting Policies

Revenue recognition

The Company recognizes revenue under the core principle to depict the transfer of control to customers in an amount reflecting the consideration to which the Company expects to be entitled. In order to achieve that core principle, the Company applies the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied.

The vast majority of the Company’s revenue is derived from the sale of semiconductor products to distributors and direct customers. In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment to determine the consideration to which the Company expects to be entitled. Variable consideration is estimated and includes the impact of discounts, price protection, product returns and distributor incentive programs. The estimate of variable consideration is dependent on a variety of factors, including contractual terms, analysis of historical data, current economic conditions, industry demand and both the current and forecasted pricing environments. The process of evaluating these factors is subjective and requires estimates including, but not limited to, forecasted demand, returns, pricing assumptions and inventory levels. The estimate of variable consideration is not typically constrained because the Company has extensive experience with these contracts.

Revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs at shipment. In determining whether control has transferred, the Company considers if there is a present right to payment and legal title, and whether risks and rewards of ownership having transferred to the customer.

The Company applies the practical expedient to not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which the Company has the right to invoice for services performed. The Company applies the practical expedient to expense sales commissions when incurred because the amortization period would have been one year or less.

For sales to distributors, revenue is recognized upon transfer of control to the distributor. For some distributors, contractual arrangements are in place which allow these distributors to return products if certain conditions are met. These conditions generally relate to the time period during which a return is allowed and reflect customary conditions in the particular geographic market. Other return conditions relate to circumstances arising at the end of a product life cycle, when certain distributors are permitted to return products purchased during a pre-defined period after the Company has announced a product’s pending discontinuance. These return rights are a form of variable consideration and are estimated using the most likely method based on historical return rates in order to reduce revenues recognized. However, long notice periods associated with these announcements prevent significant amounts of product from being returned. For sales where return rights exist, the Company has determined, based on historical data, that only a small percentage of the sales of this type to distributors is actually returned. Repurchase agreements with direct customers or distributors are not entered into by the Company.

Sales to most distributors are made under programs common in the semiconductor industry whereby distributors receive certain price adjustments to meet individual competitive opportunities. These programs may include credits granted to distributors, or allow distributors to return or scrap a limited amount of product in accordance with contractual terms agreed upon with the distributor, or receive price protection credits when our standard published prices are lowered from the price the distributor paid for product still in its inventory. In determining the transaction price, the Company considers the price adjustments from these programs to be variable consideration that reduce the amount of revenue recognized. The Company’s policy is to estimate such price adjustments using the most likely amount method based on rolling historical experience rates, as well as pricing in the distribution channel for distributors who participate in our volume rebate incentive program. We continually monitor the actual claimed allowances against our estimates, and we adjust our estimates as

appropriate to reflect trends in pricing environments and inventory levels. The estimates are also adjusted when recent historical data does not represent anticipated future activity. Historically, actual price adjustments for these programs relative to those estimated have not materially differed.

Cash and cash equivalents

Cash and cash equivalents include all cash balances and short-term highly liquid investments with a maturity of three months or less at acquisition that are readily convertible into known amounts of cash. Cash and cash equivalents are stated at face value which approximates fair value. Short-term deposits representing cash equivalents with original maturity beyond three months are reported as current assets in the line “Short-term deposits” of the consolidated balance sheets.

Receivables

Receivables are carried at amortized cost, net of allowances for credit loss and net of rebates and other contingent discounts granted to distributors. When circumstances indicate a specific customer’s ability to meet its financial obligation to us is impaired, we record an allowance against amounts due and value the receivable at the amount reasonably expected to be collected. For all other customers, we evaluate our trade accounts receivable risk of credit loss based on numerous factors including historical loss rates, credit-risk concentration, and specific circumstances such as serious adverse economic conditions in a specific country or region.

Inventories

Inventories are stated at the lower of cost or net realizable value. The cost of inventories is determined using the first-in, first-out (FIFO) method. An allowance is made for the estimated losses due to obsolescence. This allowance is determined for groups of products based on purchases in the recent past and/or expected future demand and market conditions. Abnormal amounts of idle facility expense and waste are not capitalized in inventory. The allocation of fixed production overheads to the inventory cost is based on the normal capacity of the production facilities.

Government assistance

Government grants, other than those relating to purchases of assets, are recognized as a reduction of expenditure as qualified expenditures are made.

Property, plant and equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and impairment losses. Government investment grants are deducted from the cost of the related asset. Depreciation is calculated using the straight-line method over the expected economic life of the asset. Depreciation of special tooling is also based on the straight-line method unless a depreciation method other than the straight-line method better represents the consumption pattern. Gains and losses on the sale of property, plant and equipment are included in other income and expense. Plant and equipment under finance leases are initially recorded at the lower of the fair value of the leased property or the present value of minimum lease payments. These assets and leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful life of the asset.

Leases

We determine if an arrangement is a lease at inception of the arrangement. Once it is determined that an arrangement is, or contains, a lease, that determination should only be reassessed if the legal arrangement is modified. Changes to assumptions such as market-based factors do not trigger a reassessment. Determining whether a contract contains a lease requires judgment. In general, arrangements are considered to be a lease when all of the following apply:

–It conveys the right to control the use of an identified asset for a period of time in exchange for consideration;

–We have substantially all economic benefits from the use of the asset; and

–We can direct the use of the identified asset.

The terms of a lease arrangement determine how a lease is classified and the resulting income statement recognition. When the terms of a lease effectively transfer control of the underlying asset, the lease represents an in substance financed purchase (sale) of an asset and the lease is classified as a finance lease by the lessee and a sales-type lease by the lessor. When a lease does not effectively transfer control of the underlying asset to the lessee, but the lessor obtains a guarantee for the value of the asset from a third party, the lessor would classify a lease as a direct financing lease. All other leases are classified as operating leases.

Lease assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at January 1, 2019, the date of the adoption of ASC 842, or commencement date, if later, in determining the present value of future payments. The lease payments that are included in the lease liability are comprised of fixed payments (including in-substance fixed payments), less any lease incentives receivable; variable lease payments that depend on an index or rate; amounts expected to be payable by the lessee under residual value guarantees; the exercise price of a purchase option that the lessee is reasonably certain to exercise; and payments for terminating the lease unless it is reasonably certain that early termination will not occur. The lease right-of-use (ROU) asset includes any lease payment made and initial direct costs incurred. Our lease terms include the non-cancelable period for which a lessee has the right to use an underlying asset, together with both periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option; and the periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise the option.

For operating leases, the lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. For finance leases, each lease payment is allocated between the liability and finance cost. The finance cost is charged to the consolidated statement of operations over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The finance lease asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.

We have lease agreements with lease and non-lease components. Except for gas and chemical contracts, NXP did not make the election to treat the lease and non-lease components as a single component and considers the non-lease components as a separate unit of account.

Equity investments

NXP’s equity investments include equity method investments, marketable equity investments and non-marketable equity investments.

Equity method investments: NXP’s investments over which it has significant influence, but not control, are accounted for using the equity method. Under the equity method, the investment is initially recognized at cost. The carrying amount of the investment is adjusted to recognize changes in NXP’s share of net assets of the equity-accounted investee since the acquisition date. NXP’s share of the results of operations of the equity-accounted investees are recognized in ‘Results relating to equity-accounted investees’ on a one-quarter lag.

Marketable equity investments: all equity investments with a readily determinable fair value, other than equity-method investments, in unconsolidated entities are measured at fair value through earnings in the statement of operations on a recurring basis. We classify marketable securities as current or non-current based on the nature of the securities and their availability for use in current operations. Gains and losses on investments in marketable equity securities, realized and unrealized, are recognized in ‘Financial income (expense)’.

Non-marketable equity investments: all equity investments without a readily determinable fair value, other than equity-method investments, in unconsolidated entities are recorded at cost, less impairments, adjusted for observable price changes in orderly transactions for identical or similar securities. All gains and losses on investments in non-marketable equity investments, realized and unrealized, are recognized in ‘Financial income (expense)’.

We monitor our equity method investments and non-marketable equity securities for events or changes in circumstances which may indicate the investments are impaired. If an assessment indicates an investment is

impaired, we recognize a charge for the difference between the estimated fair value and the carrying value. For equity method investments, we record impairment losses in earnings only when impairments are considered other-than-temporary.

Business combinations

We allocate the purchase price paid for assets acquired and liabilities assumed in connection with our acquisitions based on their estimated fair values at the time of acquisition. This allocation involves a number of assumptions, estimates and judgments that could materially affect the timing or amounts recognized in our financial statements.

Significant judgment is required in estimating the fair value of acquired intangible assets, including the valuation methodology, estimations of future cash flows, discount rates, market segment growth rates, and our assumed market segment share, as well as the estimated useful life of intangible assets. Further judgment is required in estimating the fair values of deferred tax assets and liabilities, uncertain tax positions and tax-related valuation allowances, which are initially estimated as of the acquisition date, as well as inventory, property, plant and equipment, pre-existing liabilities or legal claims and contingent consideration, each as may be applicable.

The fair value estimates are based on available historical information and on future expectations and assumptions deemed reasonable by management but are inherently uncertain. Our assumptions and estimates are based upon comparable market data and information obtained from our management and the management of the acquired companies as well as the amount and timing of future cash flows (including expected revenue growth rates and profitability), the underlying product or technology life cycles, the economic barriers to entry and the discount rate applied to the cash flows. As such, acquired tangible and identified intangible assets are classified as Level 3 assets. Unanticipated market or macroeconomic events and circumstances may occur that could affect the accuracy or validity of the estimates and assumptions.

Goodwill

We record goodwill when the purchase price of an acquisition exceeds the fair value of the net tangible and identified intangible assets acquired. We assign the goodwill to our reporting unit based on the relative expected fair value provided by the acquisition. We perform an impairment assessment at least once annually, or more frequently if indicators of potential impairment exist, which includes evaluating qualitative and quantitative factors to assess the likelihood of an impairment of the reporting unit’s goodwill. We perform impairment tests using a fair value approach when necessary. The reporting unit’s carrying value used in an impairment test represents the assignment of various assets and liabilities, excluding certain corporate assets and liabilities, such as cash, investments and debt.

Identified intangible assets

Licensed technology and patents are generally amortized on a straight-line basis over the periods of benefit. We amortize all acquisition-related intangible assets that are subject to amortization over their estimated useful life based on economic benefit. Acquisition-related in-process R&D assets represent the fair value of incomplete R&D projects that had not reached technological feasibility as of the date of acquisition; initially, these assets are not subject to amortization. Assets related to projects that have been completed are subject to amortization, while assets related to projects that have been abandoned are impaired and expensed to R&D.

We perform an impairment assessment for indefinite-lived intangible assets at least once annually, or more frequently if indicators of potential impairment exist, to determine whether it is more likely than not that the carrying value of the assets may not be recoverable. If necessary, a quantitative impairment test is performed to compare the fair value of the indefinite-lived intangible asset with its carrying value. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets.

Impairment or disposal of identified long-lived assets

We perform reviews of long-lived assets including property, plant and equipment, ROU assets, and intangible assets subject to amortization, whenever facts and circumstances indicate that the useful life is shorter than what we had originally estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances exist, we assess the recoverability of the long-lived assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. In the event such cash flows are not expected to be sufficient to recover the recorded value of the assets, the assets are written down to their estimated fair values based on the expected discounted future cash flows attributable to the assets or based on appraisals. Impairment losses, if any, are based on the excess of the carrying amount over the fair value of those assets. If an asset’s useful life is shorter than originally estimated, we accelerate the rate of amortization and amortize the remaining carrying value over the new shorter useful life. Long-lived assets to be disposed of by sale are reported at the lower of their carrying amounts or their estimated fair values less costs to sell and are not depreciated.

Fair value measurements

Fair value is the price we would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. In the absence of active markets for an identical asset or liability, we develop assumptions based on market observable data and, in the absence of such data, utilize internal information that we consider to be consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Priority is given to observable inputs. These two types of inputs form the basis for the following fair value hierarchy.

• Level 1: Quoted prices for identical assets or liabilities in active markets.

• Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for similar or identical assets or liabilities in markets that are not active; and valuations based on models where the inputs or significant value drivers are observable, either directly or indirectly.

• Level 3: Significant inputs to the valuation model are unobservable.

Foreign currencies

The Company uses the U.S. dollar as its reporting currency. The functional currency of the Company is the U.S. dollar. For consolidation purposes, the financial statements of the entities within the Company with a functional currency other than the U.S. dollar are translated into U.S. dollars. Assets and liabilities are translated using the exchange rates on the applicable balance sheet dates. Income and expense items in the statements of operations, statements of comprehensive income and statements of cash flows are translated at monthly exchange rates in the periods involved.

The effects of translating the financial position and results of operations from functional currencies to reporting currency are recognized in other comprehensive income and presented as a separate component of accumulated other comprehensive income (loss) within stockholders’ equity. If the operation is a non-wholly owned subsidiary, then the relevant proportionate share of the translation difference is recorded under non-controlling interests.

The following table sets out the exchange rates for U.S. dollars from euros applicable for translation of NXP’s financial statements for the periods specified.

			$ per € 1
			period end						average**(1)**						high						low
Year ended December 31, 2025			1.1738						1.1242						1.0400						1.1745
Year ended December 31, 2024			1.0404						1.0811						1.0551						1.1144
Year ended December 31, 2023			1.1073						1.0829						1.0540						1.1073

(1) The average of the noon-buying rate at the end of each fiscal month during the period presented.

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transaction or the date of valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of operations, except when the foreign exchange exposure is part of a qualifying cash flow or net investment hedge accounting relationship, in which case the related foreign exchange gains and losses are recognized directly in other comprehensive income to the extent that the hedge is effective and presented as a separate component of accumulated other comprehensive income (loss) within stockholders’ equity. To the extent that the hedge is ineffective, such differences are recognized in the statement of operations. Currency gains and losses on intercompany loans that have the nature of a permanent investment are recognized as translation differences in other comprehensive income and are presented as a separate component of accumulated other comprehensive income (loss) within equity.

Derivative financial instruments including hedge accounting

The Company uses derivative financial instruments in the management of its foreign currency risks and the input costs of gold for a portion of our anticipated purchases within the next 12 months.

The Company measures all derivative financial instruments based on fair values derived from market prices of the instruments or from option pricing models, as appropriate, and records these as assets or liabilities in the balance sheet. Changes in the fair values are immediately recognized in the statement of operations unless cash flow hedge accounting is applied. The cash flows associated with these derivative instruments are classified in the consolidated statements of cash flows in the same category as the hedged transaction.

Changes in the fair value of a derivative that is highly effective and designated and qualifies as a cash flow hedge are recorded in accumulated other comprehensive income (loss), until earnings are affected by the variability in cash flows of the designated hedged item. The cash flows associated with these derivative instruments are classified in the consolidated statements of cash flows in the same category as the hedged transaction. The application of cash flow hedge accounting for foreign currency risks is limited to transactions that represent a substantial currency risk that could materially affect the financial position of the Company.

Foreign currency gains or losses arising from the translation of a financial liability designated as a hedge of a net investment in a foreign operation are recognized directly in other comprehensive income, to the extent that the hedge is effective, and are presented as a separate component of accumulated other comprehensive income (loss) within stockholders’ equity.

To the extent that a hedge is ineffective, the ineffective portion of the fair value change is recognized in the statements of operations. When the hedged net investment is disposed of, the corresponding amount in the accumulated other comprehensive income is transferred to the statement of operations as part of the profit or loss on disposal.

On initial designation of the hedge relationship between the hedging instrument and hedged item, the Company documents this relationship, including the risk management objectives, strategy in undertaking the hedge transaction and the hedged risk, and the methods that will be used to assess the effectiveness of the hedging relationship. The Company makes an assessment, both at the inception of the hedge relationship as well as on an ongoing basis, of whether the hedging instruments are expected to be “highly effective” in offsetting the changes in the fair value or cash flows of the respective hedged items attributable to the hedged risk.

When cash flow hedge accounting is discontinued because it is not probable that a forecasted transaction will occur within a period of two months from the originally forecasted transaction date, the Company continues to carry the derivative on the balance sheet at its fair value, and gains and losses that were accumulated in other comprehensive income are recognized immediately in earnings. In situations in which hedge accounting is discontinued, the Company continues to carry the derivative at its fair value on the balance sheet and recognizes any changes in its fair value in earnings.

The gross notional amounts of the Company’s foreign currency derivatives by currency for the years ended December 31, 2025, and December 31, 2024, were as follows:

			2025						2024
Euro			1,052						922
Chinese renminbi			222						221
Great Britain pound			27						21
Indian rupee			7						53
Japanese yen			42						40
Malaysian ringgit			59						90
Mexican peso			31						22
Romanian leu			55						31
Swiss franc			36						33
New Taiwan dollar			172						170
Thai baht			113						110
Other			50						62

Dividends to shareholders

Dividends to the Company’s shareholders are charged to retained earnings when the dividends are approved.

Stock repurchases and retirement

For each repurchase of common stock, the number of shares and the acquisition price for those shares is added to the existing treasury stock count and total value. When treasury shares are retired, the Company's policy is to allocate the excess of the repurchase price over the par value of shares acquired to both Retained Earnings and Capital in Excess of Par. The portion allocated to Capital in Excess of Par is calculated by applying a percentage, determined by dividing the number of shares to be retired by the number of shares issued, to the balance of Capital in Excess of Par as of the retirement date.

Research and development

Costs of research and development (R&D) are expensed in the period in which they are incurred, except for in-process research and development (IPR&D) assets acquired in business combinations, which are capitalized and, after completion, are amortized over their estimated useful lives.

Advertising

Advertising costs are expensed when incurred.

Debt issuance costs

Direct costs incurred to obtain financings are capitalized and subsequently amortized over the term of the debt using the effective interest rate method. Upon extinguishment of any related debt, any unamortized debt issuance costs are expensed immediately.

Restructuring

The provision for restructuring relates to the estimated costs of initiated restructurings that have been approved by Management. When such plans require discontinuance and/or closure of lines of activities, the anticipated costs of closure or discontinuance are recorded at fair value when the liability has been incurred. The Company determines the fair value based on discounted projected cash flows in the absence of other observable inputs such as quoted prices. The restructuring liability includes the estimated cost of termination benefits provided to former or inactive employees after employment but before retirement, costs to terminate leases and other contracts, and selling costs associated with assets held for sale and other costs related to the closure of facilities. One-time employee termination benefits are recognized ratably over the future service period when those employees are required to render services to the Company, if that period exceeds 60 days or a longer legal notification period. However, generally, employee termination benefits are covered by a contract or an ongoing benefit arrangement and are recognized when it is probable that the employees will be entitled to the benefits and the amounts can be reasonably estimated.

Other income (expense)

Other income (expense) primarily consists of gains and losses related to divestment of activities and subsidiaries, as well as gains and losses related to the sale of long-lived assets and other non-core operating items. This includes income derived from manufacturing service arrangements (MSA) and transitional service arrangements (TSA) that are put in place when we divest a business or activity as well as related expenditures.

Financial income and expense

Financial income and expense is comprised of interest income on cash and cash equivalent balances, the interest expense on borrowings, the accretion of the discount or premium on issued debt, the gain or loss on the disposal of financial assets, impairment losses on financial assets and gains or losses on hedging instruments recognized in the statement of operations.

Borrowing costs that are not directly attributable to the acquisition, construction or production of property, plant and equipment are recognized in the statement of operations using the effective interest method.

Income taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts. Measurement of deferred tax assets and liabilities is based upon the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax liabilities for income taxes or withholding taxes on dividends from subsidiaries are recognized in situations where the Company does not consider the earnings indefinitely reinvested and to the extent that the withholding taxes are not expected to be refundable.

Deferred tax assets, including assets arising from loss carryforwards, are recognized, net of a valuation allowance, if based upon the available evidence it is more likely than not that the asset will be realized.

The income tax benefit from an uncertain tax position is recognized only if it is more likely than not that the tax position will be sustained upon examination by the relevant taxing authorities. The income tax benefit recognized is measured based on the largest benefit that is greater than 50% likely to be realized upon resolution of the uncertainty. Unrecognized tax benefits are presented as a reduction to the deferred tax asset for related temporary differences, tax credits or net operating loss carryforwards, unless these would not be available, in which case the uncertain tax benefits are presented together with the related interest and penalties as a liability, under accrued liabilities and other non-current liabilities based on the timing of the expected payment. Penalties related to income taxes are recorded as income tax expense, whereas interest is reported as financial expense in the statement of operations.

Taxes due on Global Intangible Low-Taxed Income (GILTI) inclusions in the U.S. are recognized as a current period expense when incurred.

Postretirement benefits

The Company’s employees participate in pension and other postretirement benefit plans in many countries. The costs of pension and other postretirement benefits and related assets and liabilities with respect to the Company’s employees participating in the various plans are based upon actuarial valuations.

Some of the Company’s defined benefit pension plans are funded with plan assets that have been segregated and restricted in a trust, foundation or insurance company to provide for the pension benefits to which the Company has committed itself.

The net liability or asset recognized in the balance sheet in respect of the postretirement plans is the present value of the projected benefit obligation less the fair value of plan assets at the balance sheet date. Most of the Company’s plans are unfunded and result in a provision or a net liability.

For the Company’s major plans, the discount rate is derived from market yields on high quality corporate bonds. Plans in countries without a deep corporate bond market use a discount rate based on the local government bond rates.

Benefit plan costs primarily represent the increase in the actuarial present value of the obligation for benefits based on employee service during the year and the interest on this obligation in respect of employee service in previous years, net of the expected return on plan assets and net of employee contributions.

Actuarial gains and losses arise mainly from changes in actuarial assumptions and differences between actuarial assumptions and what has actually occurred. They are recognized in the statement of operations, over the expected average remaining service periods of the employees only to the extent that their net cumulative amount exceeds 10% of the greater of the present value of the obligation or of the fair value of plan assets at the end of the previous year (the corridor). Events which invoke a curtailment or a settlement of a benefit plan will be recognized in our statement of operations.

In calculating obligation and expense, the Company is required to select actuarial assumptions. These assumptions include discount rate, expected long-term rate of return on plan assets, assumed health care trend rates and rates of increase in compensation costs determined based on current market conditions, historical information and consultation with and input from our actuaries. Changes in the key assumptions can have a significant impact to the projected benefit obligations, funding requirements and periodic cost incurred.

Unrecognized prior-service costs related to the plans are amortized to the statements of operations over the average remaining service period of the active employees.

Contributions to defined contribution and multi-employer pension plans are recognized as an expense in the statements of operations as incurred.

The Company determines the fair value of plan assets based on quoted prices or comparable prices for non-quoted assets. For a defined benefit pension plan, the benefit obligation is the projected benefit obligation; for any other postretirement defined benefit plan it is the accumulated postretirement benefit obligation.

The Company recognizes as a component of other comprehensive income, net of taxes, the gains or losses and prior service costs that arise during the year but are not recognized as a component of net periodic benefit cost. Amounts recognized in accumulated other comprehensive income, including the gains or losses and the prior services costs are adjusted as they are subsequently recognized as components of net periodic benefit costs.

For all the Company’s postretirement benefit plans, the measurement date is December 31, our year-end.

Share-based compensation

We recognize compensation expense for all share-based awards based on the grant-date estimated fair values, net of an estimated forfeiture rate. NXP’s grants through the incentive plan are equity settled. Share-based compensation cost for restricted share units (RSUs) with time-based vesting is measured based on the closing fair market value of our common stock on the date of the grant, reduced by the present value of the estimated expected future dividends, and then multiplied by the number of RSUs granted. Share-based compensation cost for performance-based share units (PSUs) granted with performance or market conditions is measured using a Monte-Carlo simulation model on the date of grant.

The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service periods in our statements of operations. For stock options, PSUs and RSUs, the grant-date value, less estimated pre-vest forfeitures, is expensed on a straight-line basis over the vesting period. The vesting period for stock options is generally four years, for RSUs and PSUs it is generally three years.

Earnings per share

Basic earnings per share attributable to stockholders is calculated by dividing net income or loss attributable to stockholders of the Company by the weighted average number of common shares outstanding during the period.

To determine diluted share count, we apply the treasury stock method to determine the dilutive effect of outstanding stock option shares, RSUs, PSUs, Employee Stock Purchase Plan (“ESPP”) shares and MT Annual Incentive Plan. Under the treasury stock method, the amount the employee must pay for exercising share-based awards and the amount of compensation cost for future service that the Company has not yet recognized are assumed to be used to repurchase shares.

Concentration of risk

Financial instruments, including derivative financial instruments, that may potentially subject NXP to concentrations of credit risk, consist principally of cash and cash equivalents, short-term deposits, short-term investments, long-term investments, accounts receivable and forward contracts.

We sell our products to direct customers and to distributors in various markets, who resell these products to direct customers or to their subcontract manufacturers. One of our distributors accounted for 23% of our revenue in 2025, 22% in 2024 and 21% in 2023. No other distributor accounted for greater than 10% of our revenue for 2025, 2024 or 2023. No direct customers accounted for more than 10% of our revenue for 2025, 2024 or 2023.

Credit exposure related to NXP’s foreign currency forward contracts is limited to the realized and unrealized gains on these contracts.

The Company uses outside suppliers or foundries for a portion of its manufacturing capacity.

We have operations in Europe and Asia subject to collective bargaining agreements which could pose a risk to the Company but we do not expect that our operations will be disrupted if such is the case.

Recent accounting standards

Accounting Standards Adopted in 2025

In December 2023, the FASB issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in ASU 2023-09 require greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid. In addition, the amendments require disclosure of income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign; and disclosure of income tax expense (or benefit) from continuing operations disaggregated. We adopted the new standard retrospectively for the fiscal year ending December 31, 2025.

New Accounting Standards Not Yet Adopted

In December 2025, the FASB issued Accounting Standards Update (ASU) 2025-10, Accounting for Government Grants Received by Business Entities. The amendments in ASU 2025-10 add guidance on the recognition, measurement, and presentation of government grants, leveraging the principles in IAS 20. ASU 2025-10 is effective for fiscal years beginning after December 15, 2028, with early adoption permitted. We are currently evaluating the effect of this new guidance and do not expect it to have a material impact on our consolidated financial statements.

In November 2024, the FASB issued Accounting Standards Update (ASU) 2024-03, Disaggregation of Income Statement Expenses. The standard requires disaggregated disclosure of income statement expenses. It requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. We are currently evaluating the effect of this new guidance on our consolidated financial statements.

No other new accounting pronouncements were issued or became effective in the period that had, or are expected to have, a material impact on our Consolidated Financial Statements.

Note 3 – Acquisitions and Divestments

2025

TTTech Auto acquisition

On June 17, 2025, NXP announced the closing of the acquisition of 100% of TTTech Auto for $766 million in cash ($675 million net of cash acquired). TTTech Auto is a leader in innovating unique safety-critical systems and middleware for software-defined vehicles (SDVs). The TTTech Auto acquisition complements and expands NXP’s system and software offerings in the Automotive and Industrial & IoT end markets.

The fair values of the assets acquired, and liabilities assumed in the TTTech Auto acquisition, by major class, were recognized as follows:

Cash			91
Other assets			74
Other liabilities			(52)
Identified intangible assets			347
Goodwill			306
Net assets acquired			766

The purchase price allocation contains valuations related to certain assets and liabilities as some of the estimates and assumptions are subject to change within the measurement period as additional information becomes available.

Goodwill arising from the TTTech Auto acquisition is attributed to the anticipated growth from new product sales, sales to new customers, the assembled workforce, and synergies expected from the combination. The goodwill recognized is non-deductible for income tax purposes.

The identified intangible assets assumed were recognized as follows:

						Fair value						Weighted Average Estimated Useful Life (in Years)
Software						267						11.5
Technology						25						11.5
Customer relationships						50						8.5
Order backlog						5						3.5
Total identified intangible assets						347						10.9

The income approach was applied to estimate the fair values of the intangible assets acquired. Software, technology, customer relationships, and order backlog were valued using the excess earnings method, which reflects the present values of the projected cash flows that are expected to be generated by the software, technology, customer relationships, and order backlog less charges representing the contribution of other assets to those cash flows.

Aviva Links acquisition

On October 24, 2025, NXP closed the previously announced acquisition of 100% of Aviva Links for $222 million in cash ($202 million net of cash acquired) and $26 million through the settlement of previously held investments in Aviva Links. Aviva Links is a provider of Automotive SerDes Alliance (ASA) compliant in-vehicle connectivity solutions. The Aviva Links acquisition complements and expands NXP’s automotive networking solutions in the

Automotive and Industrial & IoT end markets.

The fair values of the assets acquired, and liabilities assumed in the Aviva Links acquisition, by major class, were recognized as follows:

Other assets			20
Other liabilities			(64)
IPR&D			197
Goodwill			95
Net assets acquired			248

The purchase price allocation contains valuations related to certain assets and liabilities as some of the estimates and assumptions are subject to change within the measurement period as additional information becomes available.

Goodwill arising from the Aviva Links acquisition is attributed to the value related to new technological innovations from future product sales, sales to new customers, the assembled workforce, and synergies expected from the combination. The goodwill recognized is non-deductible for income tax purposes.

Acquired IPR&D is an intangible asset classified as an indefinite lived asset until the completion or abandonment of the associated research and development effort. IPR&D will be amortized over an estimated useful life to be determined at the date the associated research and development effort is completed, or expensed immediately when, and if, the project is abandoned. Acquired IPR&D is not amortized during the period that it is considered indefinite lived, but rather is subject to annual testing for impairment or when there are indicators for impairment.

The excess earnings method, a variant of the income approach, was applied to estimate the fair value of the IPR&D acquired. The fair value represents the present value of the projected cash flows that are expected to be generated by the IPR&D, adjusted for contributory asset charges related to other acquired assets.

Kinara, Inc. acquisition

On October 27, 2025, NXP closed the previously announced acquisition of 100% of Kinara, Inc. for $284 million in cash ($283 million net of cash acquired). Kinara is an industry leader in high performance, energy-efficient and programmable discrete neural processing units (NPUs). The Kinara acquisition complements and expands NXP’s solutions for AI-powered edge systems in the Industrial & IoT and Automotive end markets.

The fair values of the assets acquired, and liabilities assumed in the Kinara acquisition, by major class, were recognized as follows:

Other assets			6
Other liabilities			(59)
Identified intangible assets			254
Goodwill			83
Net assets acquired			284

The purchase price allocation contains valuations related to certain assets and liabilities as some of the estimates and assumptions are subject to change within the measurement period as additional information becomes available.

Goodwill arising from the Kinara acquisition is attributed to the value related to new technological innovations from future product sales, sales to new customers, the assembled workforce, and synergies expected from the combination. The goodwill recognized is non-deductible for income tax purposes.

The identified intangible assets assumed were recognized as follows:

						Fair value						Weighted Average Estimated Useful Life (in Years)
Existing Technology						191						9.2
IPR&D1						56						N/A
Customer relationships						7						8.2
Total identified intangible assets						254						9.2

1 IPR&D is an intangible asset classified as an indefinite lived asset until the completion or abandonment of the associated research and development effort. IPR&D will be amortized over an estimated useful life to be determined at the date the associated research and development effort is completed, or expensed immediately when, and if, the project is abandoned. Acquired IPR&D is not amortized during the period that it is considered indefinite lived, but rather is subject to annual testing for impairment or when there are indicators for impairment.

The excess earnings method, a variant of the income approach, was applied to estimate the fair values of the technology and IPR&D. The fair values represent the present values of the projected cash flows that are expected to be generated by the technology or IPR&D, adjusted for contributory asset charges related to other acquired assets. In addition, the existing customer relationships are valued using the distributor method, a variant of the income approach, in which a market-based distributor profit margin is used to allocate profits to this intangible asset.

Divestments

There were no material divestments during 2025.

2024

There were no material acquisitions or divestments during 2024.

Note 4 – Assets Held for Sale

In the second quarter of 2025, NXP management, in reviewing its portfolio, concluded that certain activities related to our MEMS sensors business line no longer fit the NXP strategic portfolio and took actions that resulted in the business line meeting the criteria to be classified as held for sale. On July 24, 2025, NXP reached a definitive agreement with STMicroelectronics International N.V., under which NXP will sell the business for an amount up to $950 million in cash, including $900 million at closing and up to an additional $50 million subject to the achievement of technical milestones. The carrying value of these assets held for sale as of December 31, 2025, are comprised of current assets of $91 million and non-current assets of $207 million, which consists primarily of goodwill of $170 million. On February 2, 2026, NXP completed the sale of the Company’s MEMS sensors business line under the aforementioned conditions.

During the fourth quarter of 2025, NXP management committed to selling the buildings and land at our Oak Hill site in Austin, Texas. The carrying amount of the site of $74 million has been classified as held for sale and is presented within current assets. The asset is available for immediate sale, is being actively marketed and management expects the sale to be completed within the next twelve months.

Note 5 - Supplemental Financial Information

Statement of Operations Information

Disaggregation of revenue

The following table presents revenue disaggregated by sales channel:

			2025						2024						2023
Distributors			7,051						7,203						7,195
Direct			5,084						5,291						5,963
Other			134						120						118
Total			12,269						12,614						13,276

Government assistance

The Company primarily benefits from country specific R&D tax credits ("RTC") (for the period ending December 31, 2025: $83 million; 2024: $82 million; 2023: $80 million) as well as direct grants in different jurisdictions (for the period ending December 31, 2025: $102 million; 2024: $100 million; 2023: $43 million).

The government assistance recorded in operating income are included in the following line items in the statement of operations:

			2025						2024						2023
Cost of revenue			7						4						5
Research and development			175						175						116
Selling, general and administrative			3						3						2
			185						182						123

The assets and liabilities related to the government assistance are classified in the following line items in the balance sheets:

			2025						2024
Other current assets			132						94
Other non-current assets			74						69
Other current liabilities			18						14
Other non-current liabilities			15						8

The duration of our RTC is indefinite while subject to future policy changes in the respective countries. RTC amounts received are subject to regular audits by the relevant governments. RTC receivables are, depending on their jurisdiction, settled against income or payroll taxes, or paid in cash within a maximum period of three years.

Our direct grants include those awarded under the European 2nd Important Project of Common European Interest on Microelectronics and Communication Technologies (“IPCEI ME/CT”) in multiple EU member states, the duration of which is planned to run until the end of 2029. The conditions to receive the IPCEI ME/CT government assistance include restrictions on eligible expenditures, employment retention, annual budget appropriations by the member states, compliance with member states’ regulations and project objectives and results, as well as repayment conditions.

Depreciation, amortization and impairment

Depreciation and amortization, including impairment charges, are as follows:

			2025						2024						2023
Depreciation of property, plant and equipment			560						630						652
Amortization of internal use software			43						30						20
Amortization of other identified intangible assets			229						265						434
Total			832						925						1,106

Depreciation of property, plant and equipment is primarily included in cost of revenue.

Other income (expense)

Income derived from manufacturing service arrangements (MSA) and transitional service arrangements (TSA) that are put in place when we divest a business or activity, is included in other income (expense). These arrangements are expected to decrease as the divested business or activity becomes more established.

The following table presents the split of other income (expense):

			2025						2024						2023
Result from MSA and TSA arrangements			(9)						(10)						(11)
Other, net			21						(45)						(4)
Total			12						(55)						(15)

Financial income (expense)

			2025						2024						2023
Interest income			145						160						187
Interest expense			(466)						(398)						(438)
Total other financial income (expense)			(63)						(80)						(58)
Total			(384)						(318)						(309)

Balance Sheet Information

Cash and cash equivalents

At December 31, 2025, and December 31, 2024, our cash balance was $3,267 million and $3,292 million, respectively, of which $361 million and $261 million was held by SSMC, our consolidated joint venture company with TSMC. Under the terms of our joint venture agreement with TSMC, a portion of this cash can be distributed by way of a dividend to us, but 38.8% of the dividend will be paid to our joint venture partner. During 2025 and 2024, no dividend was paid by SSMC. During the first quarter of 2026, SSMC declared a dividend of $150 million, of which $75 million is scheduled for distribution in the first quarter, with 38.8% being paid to our joint venture partner.

Equity Investments

At December 31, 2025, and December 31, 2024, the total carrying value of investments in equity securities is summarized as follows:

			2025						2024
Marketable equity securities			1						1
Non-marketable equity securities			118						71
Equity-accounted investments			826						300
			945						372

The total carrying value of investments in equity-accounted investees is summarized as follows:

						2025												2024
						Shareholding %						Amount						Shareholding %						Amount
VisionPower Semiconductor Manufacturing Company Pte. Ltd. (VSMC)						40.00		%				623						40.00		%				134
European Semiconductor Manufacturing Company (ESMC) GmbH 1)						10.00		%				180						10.00		%				77
SMART Growth Fund, L.P.						—		%				—						8.41		%				39
SigmaSense, LLC						9.40		%				—						10.64		%				28
Others						—						23						—						22
												826												300
1) NXP accounts for its investment in ESMC under the equity method due to our ability to exercise significant influence over ESMC’s operations, primarily through representation on ESMC’s board of directors and other operational arrangements.

Results related to equity-accounted investees at the end of each period were as follows:

			2025						2024						2023
Company’s share in income (loss)			(8)						(13)						(7)
Other results1			(62)						1						—
			(70)						(12)						(7)

1 For the year ended December 31, 2025, other results includes the impairment of our equity method investment SigmaSense and the loss on the sale of our equity method investment Smart Growth Fund.

Other current liabilities

Other current liabilities at December 31, 2025, and December 31, 2024, consisted of the following:

			2025						2024
Accrued compensation and benefits			393						371
Dividend payable			256						258
Customer programs			57						131
Income taxes payable			83						114
Other			656						560
			1,445						1,434

Note 6 - Restructuring Charges

At each reporting date, we evaluate our restructuring liabilities, which consist primarily of termination benefits, to ensure that our accruals are still appropriate.

The following table presents the changes in the position of restructuring liabilities in 2025:

			Balance January 1, 2025						Additions						Utilized						Released						Other changes**(1)**						Balance December 31, 2025
Restructuring liabilities			157						265						(153)						(5)						6						270

(1) Other changes primarily related to translation differences.

The total restructuring liability as of December 31, 2025, of $270 million is classified in the balance sheets under current liabilities ($189 million) and non-current liabilities ($81 million). During 2025, we have initiated and executed restructuring initiatives to streamline manufacturing capacity, reduce costs and align resources with our strategic priorities. The plans include workforce reductions, facility consolidations, and other cost-saving measures. The restructuring additions for 2025 were $265 million, primarily related to the following new programs:

–Involuntary restructuring programs: $167 million

–Hybrid manufacturing strategy: $63 million

–Other: $35 million

The following table presents the changes in the position of restructuring liabilities in 2024:

			Balance January 1, 2024						Additions						Utilized						Released						Other changes**(1)**						Balance December 31, 2024
Restructuring liabilities			101						147						(68)						(22)						(1)						157

(1) Other changes primarily related to translation differences.

The total restructuring liability as of December 31, 2024, of $157 million is classified in the balance sheets under current liabilities ($147 million) and non-current liabilities ($10 million). The restructuring charges for 2024 consist of $146 million for personnel related costs for specific targeted actions under new global restructuring programs, offset by a $22 million release for an earlier program. The utilization of the restructuring liabilities mainly reflects the execution of ongoing restructuring programs the Company initiated in earlier years.

During 2023, the restructuring charges consist of $106 million for personnel related costs for specific targeted actions under new global restructuring programs, offset by an $8 million release for an earlier program.

The components of restructuring charges recorded in 2025, 2024 and 2023 are as follows:

			2025						2024						2023
Personnel lay-off costs			265						146						104
Other exit costs			1						1						2
Release of provisions/accruals			(5)						(22)						(8)
Net restructuring charges			261						125						98

The restructuring charges recorded in operating income are included in the following line items in the statement of operations:

			2025						2024						2023
Cost of revenue			79						28						11
Research & development			100						57						59
Selling, general and administrative			82						40						28
Net restructuring charges			261						125						98

Note 7 - Income Taxes

In 2025, NXP generated income before income taxes of $2,663 million (2024: income of $3,099 million; 2023: income of $3,352 million). The components of income (loss) before income taxes are as follows:

Income (or loss) from continuing operations before income tax expense (or benefit)			2025						2024						2023
Domestic			1,263						1,444						1,398
Foreign			1,400						1,655						1,954
			2,663						3,099						3,352

The components of income tax benefit (expense) are as follows:

Income tax expense (or benefit) from continuing operations			2025						2024						2023
Current taxes:
Domestic			(232)						(305)						(271)
Foreign			(301)						(512)						(519)
			(533)						(817)						(790)
Deferred taxes:
Domestic			(17)						6						4
Foreign			25						266						263
			8						272						267
Total benefit (expense) for income taxes			(525)						(545)						(523)

NXP Semiconductors N.V. is domiciled in the Netherlands and therefore the federal statutory corporate income tax rate of 25.8% of the Netherlands as a percentage of income (loss) before income taxes is used as the starting point of the effective income tax rate reconciliation and is as follows:

			2025												2024												2023
			$						%						$						%						$						%
Statutory income tax rate in the Netherlands			687						25.8						800						25.8						865						25.8
Foreign tax effects
United States
Statutory tax rate difference between United States and the Netherlands			(34)						(1.3)						(52)						(1.7)						(66)						(2.0)
R&D tax credits			(47)						(1.8)						(59)						(1.9)						(66)						(2.0)
Foreign-derived intangible income			(67)						(2.5)						(127)						(4.1)						(148)						(4.4)
Other			20						0.8						10						0.3						7						0.2
Taiwan			25						0.9						*						*						*						*
Other foreign jurisdictions			16						0.6						27						0.9						9						0.3
Effect of Cross-border Tax Laws			16						0.6						23						0.7						—						—
Tax Credits			(8)						(0.3)						(8)						(0.3)						(7)						(0.2)
Changes in Valuation Allowances			1						—						(2)						(0.1)						(2)						(0.1)
Nontaxable or Nondeductible Items
Netherlands tax incentive			(99)						(3.7)						(113)						(3.6)						(112)						(3.3)
Other			13						0.5						19						0.6						15						0.4
Changes in Unrecognized Tax Benefits			7						0.3						28						0.9						28						0.8
Other Adjustments			(5)						(0.2)						(1)						—						1						0.1
Effective Tax Rate			525						19.7						545						17.6						523						15.6

• The amount of the individual reconciling item during the year does not meet the 5% disaggregation threshold and is included in "Other foreign jurisdictions".

The effective income tax rate for 2025 was 19.7% compared to 17.6% for 2024. The increase was primarily driven by a different mix of income tax expense across our operating jurisdictions, as well as lower U.S. and NL tax incentives in 2025 due to a decrease in qualifying income and R&D expenses. In addition, the One Big Beautiful Bill Act was enacted in the U.S., which reduced the amount of claimable R&D tax credits. Taiwan also had higher tax expense in 2025 due to less undistributed earnings being considered indefinitely reinvested due to changes in the supply chain. These increases were partially offset by tax benefits from settlements with tax authorities.

The effective income tax rate for 2024 was 17.6% compared to 15.6% for 2023. The increase in the effective income tax rate was primarily due to a different mix of the benefit (provision) for income taxes in our operating

locations, newly enacted alternative minimum tax law (also known as Pillar Two) that is applicable in the Netherlands as per 2024, and lower U.S. tax incentives in 2024 as a result of a decrease in qualifying income. In addition, in 2023 new guidance was released by the Internal Revenue Service to clarify the treatment of specified research and experimental expenditures under Section 174.

The Company benefits from income tax holidays in certain jurisdictions which provide that we pay reduced income taxes in those jurisdictions for a fixed period of time that varies depending on the jurisdiction. The predominant income tax holiday is expected to expire at the end of 2026. The impact of this tax holiday decreased foreign income taxes by $13 million in 2025 (2024: $7 million; 2023: $13 million). The benefit of this tax holiday on net income per share (diluted) was $0.05 in 2025 (2024: $0.03; 2023: $0.05).

Deferred tax assets and liabilities

The principal components of deferred tax assets and liabilities are presented below:

			2025						2024
Operating loss and tax credit carryforwards			343						250
Disallowed interest and tax incentive carryforwards			5						37
Identified intangible assets, net			769						791
Property, plant and equipment, net			28						20
Other accrued liabilities			162						211
Pensions			38						53
Other non-current liabilities			65						72
Share-based compensation			10						11
Restructuring liabilities			52						29
Receivables			70						90
Inventories			12						15
Total Deferred Tax Assets			1,554						1,579
Valuation allowance			(176)						(140)
Total Deferred Tax Assets, net of valuation allowance			1,378						1,439
Undistributed earnings of foreign subsidiaries			(51)						(35)
Goodwill			(147)						(132)
Other current and non-current assets			(65)						(70)
Total Deferred Tax Liabilities			(263)						(237)
Net Deferred Tax Position			1,115						1,202

The classification of the deferred tax assets and liabilities in the Company’s Consolidated Balance Sheets is as follows:

			2025						2024
Deferred tax assets within non-current assets			1,213						1,251
Deferred tax liabilities within other non-current liabilities			(98)						(49)
			1,115						1,202

The Company has significant deferred tax assets resulting from net operating loss carryforwards, tax credit carryforwards and deductible temporary differences that may reduce taxable income or income taxes payable in future periods. Valuation allowances have been established for deferred tax assets based on a “more likely than not” threshold. The realization of our deferred tax assets depends on our ability to generate sufficient taxable income within the carryback or carryforward periods provided for in the tax law for each applicable tax jurisdiction. The valuation allowance increased by $36 million during 2025 (2024: $4 million decrease). The valuation allowance increased due to acquisitions for an amount of $16 million, due to a current year

unrecognized tax benefit of $12 million and the remainder of the increase relates to changes in estimates of prior years' income taxes.

We consider all available evidence in forming a judgment regarding the valuation allowance as of December 31, 2025, including events that occur subsequent to year end but prior to the issuance of the financial statements. The deferred tax assets are recognized to the extent that we consider it more likely than not that these assets will be realized. In making such a determination, we consider all available positive and negative evidence, including reversal of existing temporary differences, projected future taxable income and tax planning strategies.

At December 31, 2025, tax loss carryforwards of $759 million (inclusive of $132 million of U.S. state tax losses) will expire as follows:

						Balance						Scheduled expiration
						December 31,
						2025						2026						2027						2028						2029						2030						2031-2035						later						unlimited
Tax loss carryforwards						759						3						4						—						28						34						34						68						588

This overview is excluding carried forward tax incentives of $22 million which have an unlimited expiration date.

The Company also has tax credit carryforwards of $229 million (excluding the effect of unrecognized tax benefits), which are available to offset future tax, if any, and which will expire as follows:

						Balance						Scheduled expiration
						December 31,
						2025						2026						2027						2028						2029						2030						2031-2035						later						unlimited
Tax credit carryforwards						229						22						7						7						10						11						51						50						71

The net income tax payable (excluding the liability for unrecognized tax benefits) as of December 31, 2025, amounted to $16 million (2024: net income tax payable of $56 million) and includes amounts directly receivable from or payable to tax authorities. The amounts of cash paid for income taxes (net of refunds) by the Company are as follows:

Income taxes, net of refunds			2025						2024						2023
Federal (National)			225						255						258
Foreign
United States			178						449						463
Japan			*						*						64
China			42						*						*
Taiwan			42						*						*
Other			94						163						134
Total			581						867						919

• The amount of cash paid for income taxes (net of refunds) during the year does not meet the 5% disaggregation threshold and is included in "Other".

The Company does not indefinitely reinvest the majority of the undistributed earnings of its subsidiaries. Consequently, the Company has recognized a deferred tax liability of $51 million at December 31, 2025 (2024: $35 million) for the additional income taxes and withholding taxes payable upon the future remittances of these earnings of foreign subsidiaries. No deferred tax liability has been recorded by the Company for the undistributed earnings which are considered to be indefinitely reinvested although the timing of the reversal can

be controlled. Upon repatriation of those earnings, the Company would be subject to tax of $73 million, which is not recognized as deferred tax liability at December 31, 2025.

A reconciliation of the beginning and ending amount of unrecognized tax benefits excluding interest and penalties is as follows:

			2025						2024						2023
Balance as of January 1			203						186						173
Translation differences			(1)						(1)						—
Lapse of statute of limitations			(7)						(2)						(3)
Increases from tax positions taken during prior periods			5						11						13
Decreases from tax positions taken during prior periods			—						—						(3)
Increases from tax positions taken during current period			11						9						11
Decreases relating to settlements with the tax authorities			(18)						—						(5)
Balance as of December 31			193						203						186

Of the total unrecognized tax benefits at December 31, 2025, $174 million, if recognized, would impact the effective tax rate. All other unrecognized tax benefits, if recognized, would not affect the effective tax rate as these would be offset by compensating adjustments in the Company’s deferred tax assets that would be subject to valuation allowance based on conditions existing at the reporting date.

The Company classifies interest related to an underpayment of income taxes as financial expense and penalties as income tax expense. The total related interest and penalties recorded during the year 2025 amounted to a $20 million expense (2024: $24 million expense; 2023: $16 million expense). As of December 31, 2025, the Company has recognized a liability for related interest and penalties of $74 million (2024: $55 million; 2023: $32 million).

The Company files income tax returns in the Netherlands, the United States and in various other foreign jurisdictions. Tax filings of our subsidiaries are routinely audited in the normal course of business by tax authorities around the world. Tax years that remain subject to examination by major tax jurisdictions: the Netherlands (2021-2024), Germany (2017-2024), United States (2005-2024), China (2015-2024), Taiwan (2020-2024), Thailand (2020-2024), Malaysia (2018-2024) and India (2004, 2006-2024).

Note 8 - Accounts Receivable, net

Accounts receivable, net are summarized as follows:

			2025						2024
Accounts receivable from third parties			1,055						1,032
Allowance for credit loss			—						—
			1,055						1,032

The following table presents accounts receivable, net disaggregated by sales channel:

			2025						2024
Distributors			276						119
Direct			753						894
Other			26						19
			1,055						1,032

Note 9 - Inventories, net

Inventories are summarized as follows:

			2025						2024
Raw materials			92						109
Work in process			1,778						1,576
Finished goods			707						671
			2,577						2,356

The portion of finished goods stored at customer locations under consignment amounted to $18 million as of December 31, 2025 (2024: $20 million).

The amounts recorded above are net of an allowance for obsolescence of $152 million as of December 31, 2025 (2024: $150 million).

Note 10 - Property, Plant and Equipment, net

The following table presents details of the Company’s property, plant and equipment, net of accumulated depreciation:

			Useful Life (in years)						2025						2024
Land									175						189
Buildings			9 to 50						1,767						1,884
Machinery and installations			2 to 10						5,664						5,575
Other Equipment			1 to 10						1,108						1,030
Prepayments and construction in progress									629						734
									9,343						9,412
Less accumulated depreciation									(6,366)						(6,145)
Property, plant and equipment, net of accumulated depreciation									2,977						3,267

Note 11 - Identified Intangible Assets

The changes in identified intangible assets were as follows:

			Total
Balance as of January 1, 2024
Cost			2,264
Accumulated amortization/impairment			(1,342)
Book value			922
Changes in book value:
Acquisitions/additions			210
Amortization			(295)
Translation differences			(1)
Total changes			(86)
Balance as of December 31, 2024
Cost			1,873
Accumulated amortization/impairment			(1,037)
Book value			836
Changes in book value:
Acquisitions/additions			980
Transfer to assets held for sale			(8)
Amortization			(272)
Translation differences			11
Total changes			711
Balance as of December 31, 2025
Cost			2,367
Accumulated amortization/impairment			(820)
Book value			1,547

Identified intangible assets as of December 31, 2025, and 2024 respectively were composed of the following:

			December 31, 2025												December 31, 2024
			Gross carrying amount						Accumulated amortization						Gross carrying amount						Accumulated amortization
IPR&D(1)			276						—						24						—
Customer-related			835						(428)						790						(400)
Technology-based			1,256						(392)						1,059						(637)
Identified intangible assets			2,367						(820)						1,873						(1,037)

(1) IPR&D is not subject to amortization until completion or abandonment of the associated research and development effort.

The estimated amortization expense for these identified intangible assets for each of the five succeeding years is:

2026			263
2027			239
2028			179
2029			129
2030			124
Thereafter			613

All intangible assets, excluding IPR&D and goodwill, are subject to amortization and have no assumed residual value.

The expected weighted average remaining life of identified intangibles is 7 years as of December 31, 2025.

Note 12 - Goodwill

The changes in goodwill in 2025 and 2024 were as follows:

			2025						2024
Balances as of January 1
Cost			10,044						10,069
Accumulated impairment			(114)						(114)
Book value			9,930						9,955
Changes in book value:
Acquisitions			488						—
Transfer to assets held for sale			(170)						—
Translation differences			51						(25)
Total changes			369						(25)
Balances as of December 31
Cost			10,413						10,044
Accumulated impairment			(114)						(114)
Book value			10,299						9,930

No goodwill impairment charges were required to be recognized in 2025 or 2024.

The fair value of the reporting unit substantially exceeds the carrying value of the reporting unit.

Note 13 - Postretirement Benefit Plans

Pensions

Our employees participate in employee pension plans in accordance with legal requirements, customs and the related matters in the respective countries. These are defined benefit pension plans, defined contribution plans and multi-employer plans.

The Company’s employees in The Netherlands participate in a multi-employer plan, implemented for the employees of the Metal and Electrical Engineering Industry ("Bedrijfstakpensioenfonds Metalektro" or "PME") in accordance with the mandatory affiliation to PME effective for the industry in which NXP operates. As this affiliation is a legal requirement for the Metal and Electrical Engineering Industry, it has no expiration date. This PME multi-employer plan (a career average plan) covers 1,566 companies and 629,500 participants. The plan monitors its risk on an aggregate basis, not by company or participant and can therefore not be accounted for as a defined benefit plan. The pension fund rules state that the only obligation for affiliated companies will be to pay the annual plan contributions. There is no obligation for affiliated companies to fund plan deficits. Affiliated companies are also not entitled to any possible surpluses in the pension fund.

Every participating company contributes the same fixed percentage of its total pension base, being pensionable salary minus an individual offset. The Company’s pension cost for any period is the amount of contributions due for that period.

The contribution rate for the mandatory scheme will remain 27.98% in 2026, same as 2025.

PME multi-employer plan			2025						2024						2023
NXP’s contributions to the plan			40						38						33
(including employees’ contributions)			8						7						8
Average number of NXP’s active employees participating in the plan			2,323						2,351						2,338
NXP’s contribution to the plan exceeded more than 5 percent of the total contribution (as of December 31 of the plan’s year end)			No						No						No

The amount for pension costs included in the statement of operations for the year 2025 was $123 million (2024: $125 million; 2023: $123 million) of which $61 million (2024: $67 million; 2023: $69 million) represents defined contribution plans and $32 million (2024: $31 million; 2023: $30 million) represents the PME multi-employer plans.

Defined benefit plans

The benefits provided by defined benefit plans are based on employees’ years of service and compensation levels. Contributions are made by the Company, as necessary, to provide assets sufficient to meet the benefits payable to defined benefit pension plan participants.

These contributions are determined based upon various factors, including funded status, legal and tax considerations as well as local customs. The Company funds certain defined benefit pension plans as claims are incurred.

The total ongoing cost of defined benefit plans amounted to $30 million in 2025 (2024: a cost of $27 million; 2023: a cost of $24 million).

The table below provides a summary of the changes in the pension benefit obligations and defined benefit pension plan assets for 2025 and 2024, associated with the Company’s dedicated plans, and a reconciliation of the funded status of these plans to the amounts recognized in the balance sheets.

			2025						2024
Projected benefit obligation
Projected benefit obligation at beginning of year			561						605
Service cost			15						14
Interest cost			19						18
Actuarial (gains) and losses			(45)						(11)
Curtailments and settlements			(5)						—
Benefits paid			(27)						(30)
Exchange rate differences			54						(35)
Projected benefit obligation at end of year			572						561
Plan assets
Fair value of plan assets at beginning of year			201						213
Actual return on plan assets			13						6
Employer contributions			26						26
Curtailments and settlements			(1)						—
Benefits paid			(26)						(29)
Exchange rate differences			17						(15)
Fair value of plan assets at end of year			230						201
Funded status			(342)						(360)
Classification of the funded status is as follows
– Prepaid pension cost within non-current assets			26						8
– Accrued pension cost within other non-current liabilities			(354)						(356)
– Accrued pension cost within accrued liabilities			(14)						(12)
Total			(342)						(360)
Accumulated benefit obligation
Accumulated benefit obligation for all Company-dedicated benefit pension plans			545						535
Plans with assets less than accumulated benefit obligation (including unfunded plans)
– Fair value of plan assets			58						88
– Accumulated benefit obligations			400						431
Amounts recognized in accumulated other comprehensive income (before tax)
Total AOCI at beginning of year			46						60
– Net actuarial loss (gain)			(58)						(11)
– Exchange rate differences			1						(3)
Total AOCI at end of year			(11)						46

The net amount of projected benefit obligation and plan assets for all underfunded (including unfunded) pension plans was $342 million and $360 million at December 31, 2025, and 2024, respectively, and was classified as liabilities and non-current assets in the balance sheets.

For the year ended December 31, 2025, actuarial gains were primarily related to increases in discount rates of approximately 60 basis points on a weighted basis offset by experience losses related to salary and pension indexation adjustments being higher than our long-term assumptions. For the year ended December 31, 2024, actuarial gains were primarily related to increases in discount rates of approximately 10 basis points on a weighted basis offset by experience losses related to salary and pension indexation adjustments being higher than our long-term assumptions.

The weighted average assumptions used to calculate the projected benefit obligations were as follows:

			2025						2024
Discount rate			3.9		%				3.3		%
Rate of compensation increase			2.2		%				2.2		%

The weighted average assumptions used to calculate the net periodic pension cost were as follows:

			2025						2024						2023
Discount rate			3.3		%				3.2		%				3.3		%
Expected returns on plan assets			3.1		%				3.4		%				2.9		%
Rate of compensation increase			2.2		%				2.2		%				2.2		%

For the Company’s major plans, the discount rate used is based on high quality corporate bonds (iBoxx Corporate Euro AA 10+).

Plans in certain Asian countries without a deep corporate bond market use a discount rate based on the local sovereign rate and the plans' maturities (Bloomberg Government Bond Yields).

Expected returns per asset class are based on the assumption that asset valuations tend to return to their respective long-term equilibria. The expected return on assets for any funded plan equals the average of the expected returns per asset class weighted by their portfolio weights in accordance with the fund’s strategic asset allocation.

The components of net periodic pension costs were as follows:

			2025						2024						2023
Service cost			15						14						12
Interest cost on the projected benefit obligation			19						18						18
Expected return on plan assets			(7)						(7)						(6)
Amortization of net (gain) loss			3						2						0
Net periodic cost			30						27						24

The components of net periodic pension cost other than the service cost component are included in Other financial income (expense) in the statements of operations.

Plan assets

The actual pension plan asset allocation at December 31, 2025, and 2024 is as follows:

			2025						2024
Asset category:
Equity securities			30		%				27		%
Debt securities			34		%				35		%
Insurance contracts			7		%				7		%
Other			29		%				31		%
			100		%				100		%

We met our target plan asset allocation. The investment objectives for the pension plan assets are designed to generate returns that, along with the future contributions, will enable the pension plans to meet their future obligations. The investments in our major defined benefit plans largely consist of government bonds, “Level 2” Corporate Bonds and cash to mitigate the risk of interest fluctuations. The asset mix of equity, bonds, cash and other categories is evaluated by an asset-liability modeling study for our largest plan. The assets of funded plans in other countries mostly have a large proportion of fixed income securities with return characteristics that are aligned with changes in the liabilities caused by discount rate volatility. Total pension plan assets of $230 million include $182 million related to the German and Japanese pension funds.

The following table summarizes the classification of these assets.

			2025																		2024
			Level I						Level II						Level III						Level I						Level II						Level III
Equity securities			—						56						—						—						48						—
Debt securities			16						34						—						11						33						—
Insurance contracts			—						15						—						—						13						—
Other			6						28						27						7						26						23
			22						133						27						18						120						23

The Company currently expects to make $8 million of employer contributions to defined benefit pension plans and $13 million of expected cash payments in relation to unfunded pension plans in 2026.

Estimated future pension benefit payments

The following benefit payments are expected to be made (including those for funded plans):

2026			30
2027			30
2028			32
2029			35
2030			37
Years 2031-2035			203

Postretirement health care benefits

In addition to providing pension benefits, NXP provides retiree healthcare benefits in the U.S. which are accounted for as defined benefit plans.

The accumulated postretirement benefit obligation at the end of 2025 equals $1 million (2024: $1 million).

Note 14 - Debt

Commercial Paper

We have a $2 billion Commercial Paper Program to support general corporate purposes. As of December 31, 2025, we had no commercial paper notes outstanding.

Long-term debt

The following table summarizes the outstanding long-term debt as of December 31, 2025, and 2024:

			2025																		2024
			Maturities						Amount						Interest rate						Amount						Interest rate
Fixed-rate 2.7% senior unsecured notes			May, 2025						—						2.700						500						2.700
Fixed-rate 5.35% senior unsecured notes			Mar, 2026						500						5.350						500						5.350
Fixed-rate 3.875% senior unsecured notes			Jun, 2026						750						3.875						750						3.875
Fixed-rate 3.15% senior unsecured notes			May, 2027						500						3.150						500						3.150
Fixed-rate 4.40% senior unsecured notes			Jun, 2027						500						4.400						500						4.400
Fixed-rate 4.30% senior unsecured notes			Aug, 2028						500						4.300						—						—
Fixed-rate 5.55% senior unsecured notes			Dec, 2028						500						5.550						500						5.550
Fixed-rate 4.3% senior unsecured notes			Jun, 2029						1,000						4.300						1,000						4.300
Fixed-rate 3.4% senior unsecured notes			May, 2030						1,000						3.400						1,000						3.400
Fixed-rate 2.5% senior unsecured notes			May, 2031						1,000						2.500						1,000						2.500
Fixed-rate 2.65% senior unsecured notes			Feb, 2032						1,000						2.650						1,000						2.650
Fixed-rate 4.85% senior unsecured notes			Aug, 2032						300						4.850						—						—
Fixed-rate 5.0% senior unsecured notes			Jan, 2033						1,000						5.000						1,000						5.000
Fixed-rate 5.25% senior unsecured notes			Aug, 2035						700						5.250						—						—
Fixed-rate 3.25% senior unsecured notes			May, 2041						1,000						3.250						1,000						3.250
Fixed-rate 3.125% senior unsecured notes			Feb, 2042						500						3.125						500						3.125
Fixed-rate 3.25% senior unsecured notes			Nov, 2051						500						3.250						500						3.250
Floating-rate revolving credit facility (RCF)			Aug, 2027						—						—						—						—
Fixed-rate 4.45% EIB Facility A Loan			Dec, 2030						670						4.450						670						4.450
Fixed-rate 4.709% EIB Facility B Loan			Feb, 2031						370						4.709						—						—
Total principal									12,290												10,920
Unamortized discounts, premiums and debt issuance costs									(68)												(66)
Total debt, including unamortized discounts, premiums, debt issuance costs and fair value adjustments									12,222												10,854
Current portion of long-term debt									(1,250)												(500)
Long-term debt									10,972												10,354

			Range of interest rates						Average rate of interest						Principal amount outstanding 2025						Due in 2026						Due after 2026						Due after 2030						Average remaining term (in years)						Principal amount outstanding 2024
USD notes			2.50%- 5.55%						3.9		%				11,250						1,250						10,000						6,000						6.8						10,250
Revolving Credit Facility (RCF) (1)			—		%				—		%				—						—						—						—						0						—
Bank borrowings			4.45%- 4.71%						4.5		%				1,040						—						1,040						370						5.0						670
									3.9		%				12,290						1,250						11,040						6,370						6.6						10,920

(1)We do not have any borrowings under the $2,500 million RCF as of December 31, 2025.

As of December 31, 2025, the following principal amounts of long-term debt are due in the next 5 years:

2026			1,250
2027			1,000
2028			1,000
2029			1,000
2030			1,670
Due after 5 years			6,370
			12,290

As of December 31, 2025, the book value of our outstanding long-term debt was 12,290 less debt issuance costs of $40 million and original issuance/debt discount of $28 million.

As of December 31, 2025, we had no aggregate principal amount of variable interest rate indebtedness under our loan agreements. The remaining tenor of unsecured debt is on average 6.6 years.

Accrued interest as of December 31, 2025, is $102 million (December 31, 2024: $76 million).

2025 Financing Activities

On January 13, 2025, NXP B.V. entered into a facility agreement with the European Investment Bank, (“EIB Facility B”), which provides for a €360 million unsecured senior loan facility. The proceeds from borrowings under the EIB Facility B are expected to be used to fund the research, development and innovation of semiconductor devices, technologies and solutions in five European countries.

On May 1, 2025, we repaid the $500 million aggregate principal amount of outstanding 2.7% senior unsecured notes due 2025 at maturity using available cash.

On August 19, 2025, NXP B.V., together with NXP Funding LLC and NXP USA, Inc., issued $500 million of 4.3% senior unsecured notes due August 19, 2028, $300 million of 4.85% senior unsecured notes due August 19, 2032, and $700 million of 5.25% senior unsecured notes due August 19, 2035.

Subsequent events On January 5, 2026, we repaid the $500 million aggregate principal amount of outstanding 5.35% senior unsecured notes due March 1, 2026, using available cash.

On February 6, 2026, NXP B.V., together with NXP Funding LLC and NXP USA, Inc., amended and restated its revolving credit agreement entered into on August 26, 2022. The second amended and restated revolving credit agreement provides for $3 billion of senior unsecured revolving credit commitments and is scheduled to mature on February 6, 2031.

2024 Financing activities

On November 21, 2024, NXP B.V., NXP Funding LLC and NXP USA Inc. entered into definitive documentation to establish an unsecured Commercial Paper Program under which, on a joint and several basis, short-term, unsecured commercial paper notes may be issued. Amounts available under the Commercial Paper Program may be borrowed, repaid, and re-borrowed from time to time, with the aggregate principal amount of commercial paper notes outstanding under the Commercial Paper Program at any time not to exceed

$2,000 million. The net proceeds of issuances of the commercial paper notes are expected to be used for general corporate purposes.

On November 22, 2024, NXP B.V. entered into a facility agreement with the European Investment Bank, (“EIB Facility A”), which provides for a €640 million unsecured senior loan facility. The proceeds from borrowings under the EIB Facility A are expected to be used to fund the research, development and innovation of semiconductor devices, technologies and solutions in five European countries.

Certain terms and Covenants

The Company is not required to make mandatory redemption payments or sinking fund payments with respect to the notes and facilities.

The indentures governing the notes and facilities contain covenants that, among other things, limit the Company’s ability and that of restricted subsidiaries to incur additional indebtedness, create liens, pay dividends, redeem capital stock or make certain other restricted payments or investments; enter into agreements that restrict dividends from restricted subsidiaries; sell assets, including capital stock of restricted subsidiaries; engage in transactions with affiliates; and effect a consolidation or merger. The Company has been in compliance with any such indentures and financing covenants.

No portion of long-term and short-term debt as of December 31, 2025, and December 31, 2024, has been secured by collateral on substantially all of the Company’s assets and of certain of its subsidiaries.

We are in compliance with all covenants under our debt agreements as of December 31, 2025.

Note 15 – Leases

Operating and finance lease assets relate to buildings (corporate offices, research and development and manufacturing facilities and datacenters), land, machinery and installations and other equipment (vehicles and certain office equipment). These leases, except for land leases, have remaining lease terms of 1 to 16 years (land leases 3 to 73 years), some of which may include options to extend the leases for up to 6 years, and some of which may include options to terminate the leases within 1 year. As of December 31, 2025, assets recorded under finance leases amounted to $92 million and accumulated depreciation associated with finance leases was $28 million (December 31, 2024: $82 million and $25 million, respectively). Finance lease liabilities amounted to $15 million as of December 31, 2025 (December 31, 2024: $17 million).

Operating lease expense for each year was as follows:

			2025						2024						2023
Operating lease cost			66						66						68
Supplemental cash flows information related to operating lease as follow:
Operating cash flows from operating leases			64						64						66
Right-of-use assets obtained in exchange for lease obligations			28						78						55
Weighted average remaining lease term			7 years						7 years						6 years
Weighted average discount rate			4		%				4		%				4		%

Future minimum lease payments for operating leases as of December 31, 2025, were as follows:

			As of
			December 31, 2025
2026			69
2027			58
2028			51
2029			38
2030			29
Thereafter			70
Total future minimum lease payments			315
Less: imputed interest			41
Total			274

Rent expense amounted to $15 million in 2025 compared to $12 million in 2024 and $11 million in 2023 (containing services related to leased assets as well as short-term leases).

Lease liabilities related to operating leases are split between current and non-current as follows:

			As of December 31,
			2025						2024
Other current liabilities			59						52
Other non-current liabilities			215						223
Total			274						275

Operating lease right-of-use assets are $256 million as of December 31, 2025 (December 31, 2024: $265 million) and are included in other non-current assets in the balance sheets.

Note 16 - Commitments and Contingencies

Purchase Commitments

The Company maintains purchase commitments with certain suppliers, primarily for raw materials, semi-finished goods and manufacturing services and for some non-production items. Purchase commitments for inventory materials are generally restricted to a forecasted time-horizon as mutually agreed upon between the parties. This forecasted time horizon can vary for different suppliers. As of December 31, 2025, other than commitments directly with our foundry joint ventures, the Company had purchase commitments of $3,087 million, which are due through 2044.

Foundry Joint Venture Commitments

Driven by our investment in VSMC, NXP has committed to invest an additional $969 million in equity through 2027. NXP has committed to contribute an additional $345 million to support the long-term capacity infrastructure that is expected to be paid through 2026. In addition, NXP has an agreed purchase commitment with VSMC that over the lifetime of the factory the minimal loading will be between 80% - 90%, resulting in a total purchase commitment of approximately $14,096 million that is expected to be purchased over 37 years once wafer production starts.

Related to our investment in ESMC, NXP has committed to invest an additional $404 million in equity through 2029.

Legal Proceedings

We are regularly involved as plaintiffs or defendants in claims and litigation relating to a variety of matters such as contractual disputes, personal injury claims, employee grievances and intellectual property litigation. In addition, our acquisitions, divestments and financial transactions sometimes result in, or are followed by, claims or litigation. Some of these claims may possibly be recovered from insurance reimbursements. Although the ultimate disposition of asserted claims cannot be predicted with certainty, it is our belief that the outcome of any such claims, either individually or on a combined basis, will not have a material adverse effect on our consolidated financial position. However, such outcomes may be material to our consolidated statement of operations for a particular period. The Company records an accrual for any claim that arises whenever it considers that it is probable that it is exposed to a loss contingency, and the amount of the loss contingency can be reasonably estimated. The Company does not record a gain contingency until the period in which all contingencies are resolved, and the gain is realized or realizable. Legal fees are expensed when incurred.

Impinj Patent Litigation

On March 13, 2024, the Company and Impinj, Inc. (“Impinj”) entered into a settlement agreement with the Company paying Impinj an immaterial cash consideration, resolving all outstanding litigation and other proceedings between the parties, with all previously pending litigation and administrative proceedings being dismissed. In addition, each party agreed to release the other party from any claims to damages or monetary relief for alleged acts of patent infringement across the various patent infringement litigations and not to file any additional action for legal or equitable relief. Prior to the settlement, Impinj had initiated a number of lawsuits alleging infringement of their IP rights by certain of our products and we initiated a lawsuit and countersuit alleging infringement of our IP rights by certain products of Impinj.

Motorola Personal Injury Lawsuits

The Company has assisted Motorola in the defense of personal injury lawsuits pursuant to indemnity obligations under the agreement that separated Freescale from Motorola in 2004. At the beginning of 2025, there were lawsuits pending in the Circuit Court of Cook County, Illinois, alleging a connection between work in semiconductor manufacturing clean room facilities and birth defects in 21 individuals, with alleged exposures occurring between 1980 and 2005. During the year ended December 31, 2025, and subsequent to year end prior to the date of this report, the Company reached agreements to resolve all previously disclosed clean room cases, and there are no pending lawsuits related to these matters. Accordingly, the Company does not anticipate any further financial impact arising from these claims once settled. A portion of any indemnity due to Motorola will be reimbursed to NXP if Motorola receives an indemnification payment from its insurance coverage.

Legal Proceedings Related Accruals and Insurance Coverage

The Company reevaluates at least on a quarterly basis the claims that have arisen to determine whether any new accruals need to be made or whether any accruals made need to be adjusted based on the most current information available to it and based on its best estimate. Based on the procedures described above, the Company has an aggregate amount of $75 million accrued for potential and current legal proceedings pending as of December 31, 2025, compared to $281 million accrued at December 31, 2024 (without reduction for any related insurance reimbursements). The accruals are included in “Other current liabilities.” As of December 31, 2025, the Company’s balance related to insurance reimbursements was $56 million (December 31, 2024: $259 million) and is included in “Other current assets.”

The Company also estimates the aggregate range of reasonably possible losses in excess of the amount accrued based on currently available information for those cases for which such estimate can be made. Given that the known pending legal proceedings with a potentially material aggregate exposure of possible losses were either settled during the year ended December 31, 2025, or subsequent to year end prior to the date of this report, the Company does not reasonably anticipate any additional potential aggregate exposure of possible loss in excess of the amount accrued.

Environmental remediation

In each jurisdiction in which we operate, we are subject to many environmental, health and safety laws and regulations that govern, among other things, emissions of pollutants into the air, wastewater discharges, the use and handling of hazardous substances, waste disposal, the investigation and remediation of soil and ground water contamination and the health and safety of our employees. We are also required to obtain environmental permits from governmental authorities for certain of our operations.

As with other companies engaged in similar activities or that own or operate real property, the Company faces inherent risks of environmental liability at our current and legacy manufacturing facilities. Certain environmental laws impose liability on current or previous owners or operators of real property for the cost of removal or remediation of hazardous substances. Some specific laws also assess liability on persons who arrange for hazardous substances to be sent to disposal or treatment facilities when such facilities are found to be a contributor or responsible party for environmental contamination.

Soil and groundwater contamination has been identified at our property near Phoenix, Arizona, United States. The remediation processes at this location are expected to continue for many years.

As of December 31, 2025, we have recorded $95 million for environmental remediation costs (2024: $95 million), which are primarily included in other non-current liabilities in the accompanying balance sheets. This amount represents the undiscounted future cash flows of our estimated share of costs incurred in environmental cleanup sites without considering recovery of costs from any other party or insurer, since in most cases potentially responsible parties other than us may exist and be held responsible.

Note 17 - Stockholders’ Equity and Earnings per Share

The share capital of the Company as of December 31, 2025, consists of 1,076,257,500 authorized shares, including 430,503,000 authorized shares of common stock, and 645,754,500 authorized but unissued shares of preferred stock.

For repurchases of shares in 2023, 2024 and 2025, the board of directors of NXP ("the Board") made use of the authorizations renewed by the annual general meeting of shareholders on June 1, 2022, May 24, 2023, May 29, 2024, and June 11, 2025, respectively. The Board has approved the purchase of shares from participants in NXP's equity programs to satisfy participants' tax withholding obligations and this authorization will remain in effect until terminated by the Board. In March 2021, the Board approved the repurchase of shares up to a maximum of $2 billion (the "2021 Share Repurchase Program"), and in August 2021, the Board increased the 2021 Share Repurchase Program authorization by $2 billion, for a total of $4 billion approved for the repurchase of shares under the 2021 Share Repurchase Program. In January 2022, the Board approved the repurchase of shares up to a maximum of $2 billion (the "2022 Share Repurchase Program"). In August 2024, the Board approved the repurchase of shares up to a maximum of $2 billion (the "2024 Share Repurchase Program").

During the fiscal year ended December 31, 2025, NXP repurchased 4.4 million shares, for a total of approximately $0.9 billion, and during the year ended December 31, 2024, NXP repurchased 5.7 million shares, for a total of approximately $1.4 billion. The number of issued NXP shares is 274,519,638 as per December 31, 2024, and 274,519,638 as per December 31, 2025, with each share of common stock having a par value of €0.20 or a nominal stock capital of €55 million (2024: €55 million).

Cash dividends

The following dividends were declared in 2025, 2024 and 2023 under NXP’s quarterly dividend program:

			2025						2024						2023
Dividends declared (in millions)			1,025						1,035						1,048
Dividends declared (per share)			4.056						4.056						4.056

Share-based awards

The Company has granted share-based awards to the members of our board of directors, management team, our other executives, selected other key employees/talents of NXP and selected new hires to receive the Company’s shares in the future. See Note 18, “Share-based Compensation.”

Treasury shares

From time to time, last on June 11, 2025, the General Meeting of Shareholders authorizes the Board of Directors to repurchase shares of our common stock. On that basis, the Board of Directors has approved various share repurchase programs. In accordance with the Company’s policy to provide share-based awards from its treasury share inventory, shares which have been repurchased and are held in treasury for delivery upon exercise of options and under restricted and performance share programs, are accounted for as a reduction of stockholders’ equity. Treasury shares are recorded at cost, representing the market price on the acquisition date. When issued, shares are removed from treasury shares on a first-in, first-out (FIFO) basis.

Differences between the cost and the proceeds received when treasury shares are reissued, are recorded in capital in excess of par value. Deficiencies in excess of net gains arising from previous treasury share issuances are charged to retained earnings.

The following transactions took place resulting from employee option and share plans:

			2025						2024						2023
Total shares in treasury at beginning of year			20,195,011						17,329,585						15,056,232
Total cost			4,004						3,210						2,799
Shares acquired under repurchase program			4,357,898						5,726,770						5,460,135
Average price in $ per share			206.29						239.74						192.16
Total cost of repurchases			899						1,373						1,049
Shares delivered			2,887,975						2,861,344						3,186,782
Average price in $ per share			214.63						202.22						200.38
Amounts received from contributions and option proceeds			83						82						71
Total shares in treasury at end of year			21,664,934						20,195,011						17,329,585
Total cost			4,283						4,004						3,210

s

Shareholder tax on repurchased shares

Under Dutch tax law, the repurchase of a company’s shares by an entity in the Netherlands is a taxable event (unless exemptions apply). The tax on the repurchased shares is attributed to the shareholders, with NXP making the payment on the shareholders’ behalf. As such, the tax on the repurchased shares is accounted for within stockholders’ equity.

Earnings per share

The computation of earnings per share (EPS) is presented in the following table:

			2025						2024						2023
Net income (loss)			2,068						2,542						2,822
Less: Net income (loss) attributable to non-controlling interests			47						32						25
Net income (loss) attributable to stockholders			2,021						2,510						2,797
Weighted average number of shares outstanding (after deduction of treasury shares) during the year (in thousands)			252,703						255,208						258,381
Plus incremental shares from assumed conversion of:
Options 1)			69						141						188
Restricted Share Units, Performance Share Units and Equity Rights 2)			1,559						2,499						2,801
Dilutive potential common share			1,628						2,640						2,989
Adjusted weighted average number of shares outstanding (after deduction of treasury shares) during the year (in thousands) 1)			254,331						257,848						261,370
EPS attributable to stockholders in $:
Basic net income (loss)			8.00						9.84						10.83
Diluted net income (loss)			7.95						9.73						10.70

1)There were no stock options to purchase shares of NXP’s common stock that were outstanding in 2025 (2024: none; 2023: none) that were anti-dilutive and were not included in the computation of diluted EPS because the exercise price was greater than the average fair market value of the common stock or the number of shares assumed to be repurchased using the proceeds of unrecognized compensation expense and exercise prices was greater than the weighted average number of shares underlying outstanding stock options.

2)There were 0.3 million unvested RSUs, PSUs and equity rights that were outstanding in 2025 (2024: 0.1 million; 2023: no shares) that were anti-dilutive and were not included in the computation of diluted EPS because the number of shares assumed to be repurchased using the proceeds of unrecognized compensation expense was greater than the weighted average number of outstanding unvested RSUs, PSUs and equity rights or the performance goal has not been met.

Note 18 - Share-based Compensation

Share-based compensation expense is included in the following line items in our statement of operations:

			2025						2024						2023
Cost of revenue			59						59						54
Research and development			237						234						211
Selling, general and administrative			166						168						146
			462						461						411

The income tax (expense) benefit recognized in net income related to share-based compensation expenses was $36 million (includes $5 million of excess tax benefits), $46 million (includes $15 million of excess tax benefits) and $36 million (includes $9 million of excess tax benefits) for the years ended December 31, 2025, 2024 and 2023, respectively.

Long Term Incentive Plan (LTIP)

The LTIP was introduced in 2010 and is a broad-based long-term retention program to attract, retain and motivate talented employees as well as align stockholder and employee interests. The LTIP provides share-based compensation (“awards”) to both our eligible employees and non-employee directors. Awards that may be granted include performance shares, stock options and restricted shares. Awards granted generally will become fully vested upon a termination event occurring within one year following a change in control, as defined. A termination event is defined as either termination of employment or services other than for cause or constructive termination resulting from a significant reduction in either the nature or scope of duties and responsibilities, a reduction in compensation or a required relocation. The number of shares authorized and available for awards at December 31, 2025, was 14.4 million.

A charge of $450 million was recorded in 2025 for the LTIP (2024: $448 million; 2023: $398 million).

A summary of the activity for our LTIP during 2025 is presented below.

Stock options

At December 31, 2025, there were no (2024: none) unrecognized compensation cost related to non-vested stock options.

			Stock options						Weighted average exercise price in USD						Weighted average remaining contractual term						Aggregate intrinsic value
Outstanding at January 1, 2025			143,867						74.01
Exercised			126,121						73.74
Forfeited			2,370						73.00
Outstanding at December 31,2025			15,376						76.31						0.1						2
Exercisable at December 31,2025			15,376						76.31						0.1						2

No options were granted in 2025, 2024 and 2023.

The intrinsic value of the exercised options was $18 million (2024: $21 million; 2023: $13 million), whereas the amount received by NXP was $9 million (2024: $7 million; 2023: $5 million). The tax benefit realized from stock options exercised during fiscal 2025, 2024, and 2023 was $36 million, $45 million, and $36 million, respectively.

Performance share units

Market performance conditions

The Company grants PSU awards to certain executives of the Company with a performance measure of Relative Total Shareholder Return (“Relative TSR”). Each PSU, which generally cliff vests on the third anniversary of the date of grant, entitles the grant recipient to receive from 0 to 2 common shares for each of the target units awarded based on the Relative TSR of the Company's share price as compared to a set of peer companies.

The fair value of the PSUs is calculated using a Monte Carlo valuation model, utilizing assumptions underlying the Black-Scholes methodology:

PSU grant assumptions			2025						2024						2023
Expected life (years)			3						3						3
Risk-free interest rate			3.47%						4.07%						4.59%
Dividend yield			1.9%						1.8%						2.2%
NXP share price volatility			39%						39%						39%
Initial TSR			(3.5)%						(5.7)%						(0.2)%

			Shares						Weighted average grant date fair value in USD
Outstanding at January 1, 2025			970,348						218.85
Granted			255,721						236.69
Performance based adjustment 1)			(167,034)						188.49
Vested			166,929						188.64
Forfeited			158,068						234.25
Outstanding at December 31, 2025			734,038						235.53
1) The amount shown represents performance adjustments for performance-based awards granted on November 1, 2022. These units vested at 50.00% during 2025 based on the achievement of Relative TSR performance conditions.

In 2025, the weighted average grant date fair value of performance share units granted was $236.69 (2024: $258.20; 2023: $214.02). The fair value of the performance share units at the time of vesting was $34 million (2024: $38 million; 2023: $83 million).

At December 31, 2025, there was a total of $97 million (2024: $118 million; 2023: $109 million) of unrecognized compensation cost related to non-vested performance share units. This cost is expected to be recognized over a weighted-average period of 2.2 years (2024: 1.8 years; 2023: 2.0 years).

Restricted share units

			Shares						Weighted average grant date fair value in USD
Outstanding at January 1, 2025			4,411,640						190.76
Granted			1,982,993						205.23
Vested			2,226,724						178.97
Forfeited			309,920						195.23
Outstanding at December 31, 2025			3,857,989						204.64

The weighted average grant date fair value of restricted share units granted in 2025 was $205.23 (2024: $218.60; 2023: $178.69). The fair value of the restricted share units at the time of vesting was $461 million (2024: $526 million; 2023: $372 million).

At December 31, 2025, there was a total of $672 million (2024: $700 million; 2023: $685 million) of unrecognized compensation cost related to non-vested restricted share units. This cost is expected to be recognized over a weighted-average period of 1.6 years (2024: 1.6 years; 2023: 1.6 years).

Note 19 - Accumulated Other Comprehensive Income (Loss)

Total comprehensive income (loss) represents net income (loss) plus the results of certain equity changes not reflected in the statements of operations. The after-tax components of accumulated other comprehensive income (loss) and their corresponding changes are shown below:

			Currency translation differences						Change in fair value cash flow hedges						Net actuarial gain/(losses)												Accumulated Other Comprehensive Income (loss)
As of December 31, 2023			177						1						(88)												90
Other comprehensive income (loss) before reclassifications			(111)						(18)						14												(115)
Amounts reclassified out of accumulated other comprehensive income (loss)			—						10						—												10
Income tax effects			—						2						(4)												(2)
Other comprehensive income (loss)			(111)						(6)						10												(107)
As of December 31, 2024			66						(5)						(78)												(17)
Other comprehensive income (loss) before reclassifications			181						11						58												250
Amounts reclassified out of accumulated other comprehensive income (loss)			—						(2)						—												(2)
Income tax effects			—						(2)						(16)												(18)
Other comprehensive income (loss)			181						7						42												230
As of December 31, 2025			247						2						(36)												213

Note 20 - Related-party Transactions

The Company’s related parties are the members of the board of directors of NXP Semiconductors N.V., the executive officers of NXP Semiconductors N.V. and equity-accounted investees.

The following table presents the amounts related to revenue and other income and purchase of goods and services incurred in transactions with these related parties:

			2025						2024						2023
Revenue and other income			3						4						4
Purchase of goods and services			2						4						3

The following table presents the amounts related to receivable and payable balances with these related parties:

			2025						2024
Receivables			1						1
Payables			3						3

Driven by our investment in VSMC, NXP has committed to contribute $1,200 million to support the long-term capacity infrastructure, and in exchange NXP secures a capacity commitment over the lifetime of the factory. As of December 31, 2025, NXP has contributed $855 million (December 31, 2024: $275 million), which is recorded in other non-current assets.

Refer to Note 5 - Supplemental Financial Information for information on the total carrying value of investments in equity-accounted investees, and to Note 16 - Commitments and Contingencies for NXP's related party commitments.

Note 21 - Fair Value of Financial Assets and Liabilities

The following table summarizes the estimated fair value of our financial instruments, which are measured at fair value on a recurring basis:

									Estimated fair value
			Fair value hierarchy						December 31, 2025						December 31, 2024
Assets:
Money market funds			1						1,757						2,398
Marketable equity securities			1						1						2
Derivative instruments-assets			2						9						2
Liabilities:
Derivative instruments-liabilities			2						(11)						(10)

The following methods and assumptions were used to estimate the fair value of financial instruments:

Assets and liabilities measured at fair value on a recurring basis

Money market funds (as part of our cash and cash equivalents) and marketable equity securities (as part of other non-current assets) have fair value measurements which are all based on quoted prices in active markets for identical assets or liabilities. For derivatives (as part of other current assets or accrued liabilities), the fair value is based upon significant other observable inputs depending on the nature of the derivative.

Assets and liabilities recorded at fair value on a non-recurring basis

We measure and record our non-marketable equity securities, equity method investments and non-financial assets, such as intangible assets and property, plant and equipment, at fair value when an impairment charge is required.

Assets and liabilities not recorded at fair value on a recurring basis

Financial instruments not recorded at fair value on a recurring basis include non-marketable equity securities and equity method investments that have not been remeasured or impaired in the current period and debt.

As of December 31, 2025, the estimated fair value of current and non-current debt was $11.6 billion ($9.8 billion as of December 31, 2024). The fair value is estimated on the basis of broker-dealer quotes, which are Level 2 inputs. Accrued interest is included under accrued liabilities and not within the carrying amount or estimated fair value of debt.

Note 22 - Other Financial Instruments, Derivatives and Currency Risk

We conduct business in diverse markets around the world and employ a variety of risk management strategies and techniques to manage foreign currency exchange rate and interest rate risks. Our risk management program focuses on the unpredictability of financial markets and seeks to minimize the potentially adverse effects that the volatility of these markets may have on our operating results. One way we achieve this is through the active hedging of risks through the selective use of derivative instruments.

Derivatives are recorded on our balance sheets at fair value which fluctuates based on changing market conditions.

The Company does not purchase or hold financial derivative instruments for trading purposes.

Currency risk

The Company’s transactions are denominated in a variety of currencies. The Company uses financial instruments to reduce its exposure to the effects of currency fluctuations. Accordingly, the Company’s organizations identify and measure their exposures from transactions denominated in other than their own functional currency. We calculate our net exposure on a cash flow basis considering balance sheet items, actual orders received or made and anticipated revenue and expenses. The Company generally hedges foreign currency exposures in relation to transaction exposures, such as receivables/payables resulting from such transactions and part of anticipated sales and purchases. The Company generally uses forwards to hedge these exposures. As of January 1, 2016, as a result of the acquisition of Freescale, NXP concluded that the functional currency of the Company is USD. Beginning from January 1, 2016, our U.S. dollar-denominated notes and short term loans no longer needed to be re-measured. Prior to January 1, 2016, the U.S. dollar-denominated debt held by our Dutch subsidiary (which had at that time a euro functional currency) could have generated adverse currency results in financial income and expenses depending on the exchange rate movement between the euro and the U.S. dollar. The U.S. dollar exposure of the net investment in U.S. dollar functional currency subsidiaries was hedged by certain of our U.S. dollar denominated debt. The hedging relationship was assumed to be highly effective. Foreign currency gains or losses on this U.S. dollar debt that were recorded in a euro functional currency entity that were designated as, and to the extent they were effective, as a hedge of the net investment in our U.S. dollar foreign entities, were reported as a translation adjustment in other comprehensive income within equity, and offset in whole or in part the foreign currency changes to the net investment that were also reported in other comprehensive income. Absent the application of net investment hedging, these amounts would have been recorded as a loss within financial income (expense) in the statement of operations.

Note 23 - Segments and Geographical Information

NXP has one reportable segment representing the entity as a whole, aligning with our organizational structure and with the way our chief operating decision maker ("CODM"), who is our Chief Executive Officer, makes operating decisions, allocates resources, and manages the growth and profitability of the Company.

Our CODM regularly reviews income and expense items at the consolidated company (reporting segment) level and uses net income to evaluate income generated from total assets to evaluate whether and how to reinvest profits into the entity’s operations, shareholder return, acquisitions or otherwise. Net income is also used to monitor budget versus actual results, forecasted information and in competitive analysis. These income and expense items are as included on the statements of operations and in our notes to the financial statements.

Geographical Information

Revenue attributed to geographic areas is based on the location where the sale originated. 1)

			Revenue
			2025						2024						2023
United States			3,221						3,309						3,281
Germany			2,369						2,435						2,917
China 2)			2,036						1,921						1,765
Japan			1,059						1,229						1,172
South Korea			889						925						1,089
Taiwan			874						833						735
Singapore			714						758						861
Netherlands			83						52						47
Other countries			1,024						1,152						1,409
			12,269						12,614						13,276
1) As of December 31, 2025, and applied retrospectively for all the periods presented, the Company revised its methodology for attributing revenue to geographic areas to reflect the location where sales originate, which represents where critical commercial decisions are made. This may differ from the customer's shipped-to location. The change in reporting basis was made to more appropriately reflect how we manage our business. For 2025, the largest impacts from the change were to the United States, Germany, and China, which reflected changes of approximately 174.4%, 135.7%, and (57.0)%, respectively.
2) China includes Mainland China and Hong Kong

Long-lived assets include property, plant and equipment, net, which were based on the physical location of the assets as of the end of each year.

			Property, plant and equipment, net
			2025						2024						2023
United States			981						1,058						992
Singapore 1)			595						583						549
China 2)			214						296						386
Netherlands			321						371						340
Malaysia			296						328						327
Thailand			178						225						278
Taiwan			206						235						275
Other countries			186						171						176
			2,977						3,267						3,323
1) Mainly consists of property and equipment of SSMC, our consolidated joint venture with TSMC
2) China includes Mainland China and Hong Kong