Item 1. Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

($ in millions, unless otherwise stated)

									For the three months ended
															March 30, 2025						March 31, 2024
Revenue															2,835						3,126
Cost of revenue															(1,275)						(1,343)
Gross profit															1,560						1,783
Research and development															(547)						(564)
Selling, general and administrative															(281)						(306)
Amortization of acquisition-related intangible assets															(27)						(51)
Total operating expenses															(855)						(921)
Other income (expense)															18						(6)
Operating income (loss)															723						856
Financial income (expense):
Other financial income (expense)															(92)						(70)
Income (loss) before income taxes															631						786
Benefit (provision) for income taxes															(130)						(141)
Results relating to equity-accounted investees															(4)						(1)
Net income (loss)															497						644
Less: Net income (loss) attributable to non-controlling interests															7						5
Net income (loss) attributable to stockholders															490						639
Earnings per share data:
Net income (loss) per common share attributable to stockholders in $
Basic															1.93						2.49
Diluted															1.92						2.47
Weighted average number of shares of common stock outstanding during the period (in thousands):
Basic															253,709						256,567
Diluted															255,018						258,954

See accompanying notes to the Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

($ in millions, unless otherwise stated)

									For the three months ended
															March 30, 2025						March 31, 2024
Net income (loss)															497						644
Other comprehensive income (loss), net of tax:
Change in fair value cash flow hedges															3						(8)
Change in foreign currency translation adjustment															43						(38)
Total other comprehensive income (loss)															46						(46)
Total comprehensive income (loss)															543						598
Less: Comprehensive income (loss) attributable to non-controlling interests															7						5
Total comprehensive income (loss) attributable to stockholders															536						593

See accompanying notes to the Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

($ in millions, unless otherwise stated)

						March 30, 2025						December 31, 2024
ASSETS
Current assets:
			Cash and cash equivalents			3,988						3,292
			Accounts receivable, net			1,060						1,032
			Inventories, net			2,350						2,356
			Other current assets			627						625
Total current assets						8,025						7,305
Non-current assets:
			Deferred tax assets			1,284						1,251
			Other non-current assets			1,942						1,796
			Property, plant and equipment, net of accumulated depreciation of $6,269 and $6,145			3,210						3,267
			Identified intangible assets, net of accumulated amortization of $952 and $1,037			777						836
			Goodwill			9,942						9,930
			Total non-current assets			17,155						17,080
Total assets						25,180						24,385
LIABILITIES AND EQUITY
Current liabilities:
			Accounts payable			863						1,017
			Restructuring liabilities-current			75						147
			Other current liabilities			1,412						1,434
			Short-term debt			1,499						500
Total current liabilities						3,849						3,098
Non-current liabilities:
			Long-term debt			10,226						10,354
			Restructuring liabilities			4						10
			Other non-current liabilities			1,424						1,392
Total non-current liabilities						11,654						11,756
Total liabilities						15,503						14,854
Equity:
			Non-controlling interests			355						348
			Stockholders’ equity:
			Common stock, par value €0.20 per share:			56						56
			Capital in excess of par value			15,093						14,962
			Treasury shares, at cost:
			21,370,235 shares (2024: 20,195,011 shares)			(4,253)						(4,004)
			Accumulated other comprehensive income (loss)			29						(17)
			Accumulated deficit			(1,603)						(1,814)
			Total stockholders’ equity			9,322						9,183
Total equity						9,677						9,531
Total liabilities and equity						25,180						24,385

See accompanying notes to the Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

($ in millions, unless otherwise stated)

			For the three months ended
			March 30, 2025						March 31, 2024
Cash flows from operating activities:
Net income (loss)			497						644
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization			209						235
Share-based compensation			127						115
Amortization of discount (premium) on debt, net			1						1
Amortization of debt issuance costs			1						2
Net (gain) loss on sale of assets			(22)						(2)
(Gain) loss on equity security, net			6						2
Results relating to equity-accounted investees			4						1
Deferred tax expense (benefit)			(27)						(64)
Changes in operating assets and liabilities:
(Increase) decrease in receivables and other current assets			(29)						(25)
(Increase) decrease in inventories			6						32
Increase (decrease) in accounts payable and other liabilities			(110)						(102)
Decrease (increase) in other non-current assets			(106)						6
Exchange differences			4						3
Other items			4						3
Net cash provided by (used for) operating activities			565						851
Cash flows from investing activities:
Purchase of identified intangible assets			(25)						(32)
Capital expenditures on property, plant and equipment			(139)						(226)
Insurance recoveries received for equipment damage			—						2
Proceeds from disposals of property, plant and equipment			1						2
Proceeds of short-term deposits			—						9
Purchase of investments			(53)						(34)
Proceeds from sale of investments			—						5
Net cash provided by (used for) investing activities			(216)						(274)
Cash flows from financing activities:
Repurchase of long-term debt			—						(1,000)
Proceeds from the issuance of long-term debt			370						—
Proceeds from issuance of commercial paper notes			646						—
Repayment of commercial paper notes			(146)						—
Dividends paid to common stockholders			(258)						(261)
Proceeds from issuance of common stock through stock plans			37						37
Purchase of treasury shares and restricted stock unit withholdings			(303)						(303)
Other, net			(1)						(1)
Net cash provided by (used for) financing activities			345						(1,528)
Effect of changes in exchange rates on cash positions			2						(3)
Increase (decrease) in cash and cash equivalents			696						(954)
Cash and cash equivalents at beginning of period			3,292						3,862
Cash and cash equivalents at end of period			3,988						2,908

Supplemental disclosures to the Condensed Consolidated Cash flows
Net cash paid during the period for:
Interest			41						38
Income taxes, net of refunds			96						198
Net gain (loss) on sale of assets:
Cash proceeds from the sale of assets			31						2
Book value of these assets			(9)						—
Non-cash investing activities:
Non-cash capital expenditures			108						223

See accompanying notes to the Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)

($ in millions, unless otherwise stated)

						Outstanding 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 December 31, 2024						254,324						56						14,962						(4,004)						(17)						(1,814)						9,183						348						9,531
Net income (loss)																																				490						490						7						497
Other comprehensive income (loss)																														46												46												46
Share-based compensation plans																		131																								131												131
Shares issued pursuant to stock awards						238																		54												(22)						32												32
Treasury shares repurchased and retired						(1,413)																		(303)																		(303)												(303)
Dividends common stock ($1.014 per share)																																				(257)						(257)												(257)
Balance as of March 30, 2025						253,149						56						15,093						(4,253)						29						(1,603)						9,322						355						9,677

						Outstanding 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 December 31, 2023						257,190						56						14,501						(3,210)						90						(2,793)						8,644						316						8,960
Net income (loss)																																				639						639						5						644
Other comprehensive income (loss)																														(46)												(46)												(46)
Share-based compensation plans																		118																								118												118
Shares issued pursuant to stock awards						228																		44												(7)						37												37
Treasury shares repurchased and retired						(1,323)																		(303)																		(303)												(303)
Dividends common stock ($1.014 per share)																																				(260)						(260)												(260)
Balance as of March 31, 2024						256,095						56						14,619						(3,469)						44						(2,421)						8,829						321						9,150

See accompanying notes to the Condensed Consolidated Financial Statements

NXP SEMICONDUCTORS N.V.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

All amounts in millions of $ unless otherwise stated

1 Basis of Presentation and Overview

We prepared our interim Condensed Consolidated Financial Statements that accompany these notes in conformity with U.S. generally accepted accounting principles, consistent in all material respects with those applied in our Annual Report on Form 10-K for the year ended December 31, 2024.

Segment reporting

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"), Kurt Sievers, 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 interim income and expense items are as included on the Consolidated Statements of Operations and in our notes to the Consolidated Financial Statements.

Use of estimates

We have made estimates and judgments affecting the amounts reported in our Condensed Consolidated Financial Statements and the accompanying notes. The actual results that we experience may differ materially from our estimates. The interim financial information is unaudited, but reflects all normal adjustments that are, in our opinion, necessary to provide a fair statement of results for the interim periods presented. This interim information should be read in conjunction with the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2024.

2 Significant Accounting Policies and Recent Accounting Pronouncements

Significant Accounting Policies

For a discussion of our significant accounting policies, see Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – “Significant Accounting Policies” of our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no changes to our significant accounting policies since our Annual Report on Form 10-K for the year ended December 31, 2024.

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 have adopted ASU 2023-09 and will implement the applicable disclosure for our fiscal year ending December 31, 2025.

Accounting standards not yet adopted

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.

3 Acquisitions and Divestments

On December 17, 2024, NXP entered into a definitive agreement to acquire Aviva Links for $242.5 million in cash. Subject to customary closing conditions, including regulatory approvals, the transaction is expected to close in the first half of 2025.

On January 7, 2025, NXP entered into a definitive agreement to acquire TTTech Auto for $625 million in cash. Subject to customary closing conditions, including regulatory approvals, the transaction is expected to close in the second half of 2025 with a possibility for an accelerated closing timeline.

On February 10, 2025, NXP entered into a definitive agreement to acquire Kinara, Inc. for $307 million in cash. Subject to customary closing conditions, including regulatory approvals, the transaction is expected to close in the first half of 2025.

2025

There were no material acquisitions or divestments during the first three months of 2025.

2024

There were no material acquisitions or divestments during the first three months of 2024.

4 Supplemental Financial Information

Statement of Operations Information:

Disaggregation of revenue

The following table presents revenue disaggregated by sales channel:

									For the three months ended
															March 30, 2025						March 31, 2024
Distributors															1,524						1,739
Original Equipment Manufacturers and Electronic Manufacturing Services															1,284						1,355
Other															27						32
Total Revenue															2,835						3,126

Depreciation, amortization and impairment

									For the three months ended
															March 30, 2025						March 31, 2024
Depreciation of property, plant and equipment															143						145
Amortization of internal use software															8						7
Amortization of other identified intangible assets															58						83
Total - Depreciation, amortization and impairment															209						235

Financial income and expense

									For the three months ended
															March 30, 2025						March 31, 2024
Interest income															35						50
Interest expense															(106)						(105)
Total other financial income/ (expense)															(21)						(15)
Total															(92)						(70)

Earnings per share

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

									For the three months ended
															March 30, 2025						March 31, 2024
Net income (loss)															497						644
Less: net income (loss) attributable to non-controlling interests															7						5
Net income (loss) attributable to stockholders															490						639
Weighted average number of shares outstanding (after deduction of treasury shares) during the year (in thousands)															253,709						256,567
Plus incremental shares from assumed conversion of:
Options 1)															94						172
Restricted Share Units, Performance Share Units and Equity Rights 2)															1,215						2,215
Dilutive potential common shares															1,309						2,387
Adjusted weighted average number of shares outstanding (after deduction of treasury shares) during the year (in thousands)															255,018						258,954
EPS attributable to stockholders in $:
Basic net income (loss)															1.93						2.49
Diluted net income (loss)															1.92						2.47

1. There were no stock options to purchase shares of NXP’s common stock that were outstanding in Q1 2025 (Q1 2024: no shares) 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 were greater than the weighted average number of shares underlying outstanding stock options.

2. There were no unvested RSUs, PSUs and equity rights that were outstanding in Q1 2025 (Q1 2024: 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 were greater than the weighted average number of outstanding unvested RSUs, PSUs and equity rights or the performance goal has not been met yet.

Balance Sheet Information

Cash and cash equivalents

At March 30, 2025 and December 31, 2024, our cash balance was $3,988 million and $3,292 million, respectively, of which $275 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 both first three months of 2025 and 2024, no dividends were declared by SSMC.

Inventories

Inventories are summarized as follows:

			March 30, 2025						December 31, 2024
Raw materials			102						109
Work in process			1,638						1,576
Finished goods			610						671
			2,350						2,356

The amounts recorded above are net of allowance for obsolescence of $131 million as of March 30, 2025 (December 31, 2024: $150 million).

Equity Investments

At March 30, 2025 and December 31, 2024, the total carrying value of investments in equity securities is summarized as follows:

			March 30, 2025						December 31, 2024
Marketable equity securities			—						1
Non-marketable equity securities			76						71
Equity-accounted investments			336						300
			412						372

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

			March 30, 2025												December 31, 2024
			Shareholding %						Amount						Shareholding %						Amount
VisionPower Semiconductor Manufacturing Company Pte. Ltd. (VSMC)			40.00		%				154						40.00		%				134
European Semiconductor Manufacturing Company (ESMC) GmbH 1)			10.00		%				95						10.00		%				77
SMART Growth Fund, L.P.			8.41		%				37						8.41		%				39
SigmaSense, LLC			9.40		%				27						10.64		%				28
Others			—						23						—						22
									336												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:

									For the three months ended
															March 30, 2025						March 31, 2024
Company's share in income (loss)															(4)						(2)
Other results															—						1
															(4)						(1)

Other current liabilities

Other current liabilities at March 30, 2025 and December 31, 2024 consisted of the following:

			March 30, 2025						December 31, 2024
Accrued compensation and benefits			354						371
Customer programs			139						131
Income taxes payable			157						114
Dividend payable			257						258
Other			505						560
			1,412						1,434

Accumulated other comprehensive income (loss)

Total comprehensive income (loss) represents net income (loss) plus the results of certain equity changes not reflected in the Condensed Consolidated 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, 2024			66						(5)						(78)						(17)
Other comprehensive income (loss) before reclassifications			43						3						—						46
Amounts reclassified out of accumulated other comprehensive income (loss)			—						1						—						1
Tax effects			—						(1)						—						(1)
Other comprehensive income (loss)			43						3						—						46
As of March 30, 2025			109						(2)						(78)						29

Cash dividends

The following dividends were declared during the first three months of 2025 and 2024 under NXP’s quarterly dividend program:

			Fiscal Year 2025												Fiscal Year 2024
			Dividend per share						Amount						Dividend per share						Amount
First quarter			1.014						257						1.014						260

The dividend declared in the first quarter (not yet paid) is classified in the Condensed Consolidated Balance Sheet in other current liabilities as of March 30, 2025 and was subsequently paid on April 9, 2025.

5 Restructuring

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 restructuring liabilities in 2025:

			As of January 1, 2025						Additions						Utilized						Released						Other changes						As of March 30, 2025
Restructuring liabilities			157						14						(93)						—						1						79

The total restructuring liability as of March 30, 2025 of $79 million is classified in the Consolidated Balance Sheet under current liabilities ($75 million) and non-current liabilities ($4 million).

The restructuring charges for the three-month period ending March 30, 2025 primarily consist of $14 million for personnel related costs for specific targeted actions. The restructuring charges for the three-month period ending March 31, 2024 consist of $7 million for personnel related costs for specific targeted actions.

These restructuring charges recorded in operating income, for the periods indicated, are included in the following line items in the statement of operations:

									For the three months ended
															March 30, 2025						March 31, 2024
Cost of revenue															4						3
Research and development															7						3
Selling, general and administrative															3						1
Net restructuring charges															14						7

6 Income Tax

Each year NXP makes an estimate of its annual effective tax rate. This estimated annual effective tax rate ("EAETR") is then applied to the year-to-date Income (loss) before income taxes excluding discrete items, to determine the year-to-date benefit (provision) for income taxes. The income tax effects of any discrete items are recognized in the interim period in which they occur. As the year progresses, the Company continually refines the EAETR based upon actual events and the apportionment of our earnings (loss). This continual estimation process periodically may result in a change to our EAETR for the year. When this occurs, we adjust on an accumulated basis the benefit (provision) for income taxes during the quarter in which the change occurs.

Our provision for income taxes for 2025 is based on our EAETR of 18.8%, which is lower than the Netherlands statutory tax rate of 25.8%, primarily due to tax benefits from the Netherlands and foreign tax incentives.

									For the three months ended
															March 30, 2025						March 31, 2024
Tax benefit (provision) calculated at EAETR															(119)						(139)
Discrete tax benefit (provision) items															(11)						(2)
Benefit (provision) for income taxes															(130)						(141)
Effective tax rate															20.6		%				17.9		%

The effective tax rate of 20.6% for the first quarter of 2025 was higher than the EAETR due to the income tax expense for discrete items of $11 million. The discrete items are primarily related to the impact of foreign currency on income tax related items, and changes in estimates for previous years.

The effective tax rate of 20.6% for the first three months of 2025 was higher compared to the rate for the first three months ended 2024 of 17.9% due to a different mix of the benefit (provision) for income taxes in our operating locations, lower foreign tax incentives in the current period as a result of a decrease in qualifying income, and also due to the impact of the discrete items in the respective periods.

7 Identified Intangible Assets

Identified intangible assets as of March 30, 2025 and December 31, 2024, respectively, were composed of the following:

			March 30, 2025												December 31, 2024
			Gross carrying amount						Accumulated amortization						Gross carrying amount						Accumulated amortization
In-process R&D (IPR&D) 1)			24						—						24						—
Customer-related			790						(411)						790						(400)
Technology-based			915						(541)						1,059						(637)
Identified intangible assets			1,729						(952)						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:

2025 (remaining)			166
2026			157
2027			133
2028			66
2029			56
Thereafter			199

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 5 years as of March 30, 2025 (December 31, 2024: 5 years).

8 Debt

Commercial Paper

We have a $2 billion Commercial Paper Program to support general corporate purposes. As of March 30, 2025, we had $500 million commercial paper notes outstanding with a duration of up to 96 days. The weighted-average interest rate of the Company's outstanding commercial paper notes is 4.65%.

Long-term debt

The following table summarizes the outstanding debt as of March 30, 2025 and December 31, 2024:

									March 30, 2025												December 31, 2024
			Maturities						Amount						Interest rate						Amount						Interest rate
Fixed-rate 2.7% senior unsecured notes			May, 2025						500						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 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 5.0% senior unsecured notes			Jan, 2033						1,000						5.000						1,000						5.000
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 Loan			Dec, 2030						670						4.450						670						4.450
Fixed-rate 4.709% EIB Facility Loan			Feb, 2031						370						4.709						—						—
Total principal									11,290												10,920
Unamortized discounts, premiums and debt issuance costs									(65)												(66)
Total debt, including unamortized discounts, premiums, debt issuance costs and fair value adjustments									11,225												10,854
Current portion of long-term debt									(999)												(500)
Long-term debt									10,226												10,354

9 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:

									For the three months ended
															March 30, 2025						March 31, 2024
Revenue and other income															1						1
Purchase of goods and services															1						1

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

			March 30, 2025						December 31, 2024
Receivables			—						1
Payables			2						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. NXP has contributed $125 million during the three months ended March 30, 2025 and $400 million to-date, which is recorded in other non-current assets.

Refer to Note 4 – Supplemental Financial Information for information on the total carrying value of investments in equity-accounted investees, and to Note 11 – Commitments and Contingencies for NXP’s related party commitments.

10 Fair Value Measurements

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						March 30, 2025						December 31, 2024
Assets:
Money market funds			1						3,396						2,398
Marketable equity securities			1						—						2
Derivative instruments-assets			2						3						2
Liabilities:
Derivative instruments-liabilities			2						(9)						(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 March 30, 2025, the estimated fair value of current and non-current debt was $10.3 billion ($9.8 billion as of December 31, 2024). The fair value is estimated on the basis of broker-dealer quotes and other observable inputs, which are Level 2 inputs. Accrued interest is included under accrued liabilities and not within the carrying amount or estimated fair value of debt. Given the short tenure of the Company’s commercial paper notes, the carrying value of the outstanding commercial paper notes approximates the fair values, and therefore are excluded from the values above ($0.5 billion as of March 30, 2025 and no outstanding commercial paper notes as of December 31, 2024).

11 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 March 30, 2025, other than foundry joint venture commitments, the Company had purchase commitments of $3,239 million, which are due through 2044.

Foundry Joint Venture Commitments

Driven by our investment in VSMC, NXP has committed to invest an additional $1,440 million in equity through 2026. NXP has committed to contribute an additional $800 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 $14,242 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 $442 million in equity through 2028.

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 Condensed 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.

Motorola Personal Injury Lawsuits

The Company is currently assisting Motorola in the defense of personal injury lawsuits due to indemnity obligations included in the agreement that separated Freescale from Motorola in 2004. The multi-plaintiff Motorola lawsuits are pending in the Circuit Court of Cook County, Illinois. These claims allege a link between working in semiconductor manufacturing clean room facilities and birth defects in 21 individuals. The Motorola suits allege exposures between 1980 and 2005. Each claim seeks an unspecified amount of damages for the alleged injuries; however, legal counsel representing the plaintiffs has indicated they will seek substantial compensatory and punitive damages from Motorola for the entire inventory of claims which, if proven and recovered, the Company considers to be material. A portion of any indemnity due to Motorola will be reimbursed to NXP if Motorola receives an indemnification payment from its insurance coverage. Motorola has potential insurance coverage for many of the years indicated above, but with differing types and levels of coverage, self-insurance retention amounts and deductibles. We are in discussions with Motorola and their insurers regarding the availability of applicable insurance coverage for each of the individual cases. Motorola and NXP have denied liability for these alleged injuries based on numerous defenses.

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 $306 million accrued for potential and current legal proceedings pending as of March 30, 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” and in “Other non-current liabilities”. As of March 30, 2025, the Company’s related balance of insurance reimbursements was $272 million (December 31, 2024: $259 million) and is included in “Other non-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. The estimated aggregate range requires significant judgment, given the varying stages of the proceedings, the existence of multiple defendants (including the Company) in such claims whose share of liability has yet to be determined, the numerous yet-unresolved issues in many of the claims, and the attendant uncertainty of the various potential outcomes of such claims. Accordingly, the Company’s estimate will change from time to time, and actual losses may be more than the current estimate. As at March 30, 2025, the Company believes that for all litigation pending its potential aggregate exposure to loss in excess of the amount accrued (without reduction for any amounts that may possibly be recovered under insurance programs) could range between $0 and $304 million. Based upon our past experience with these matters, the Company would expect to receive additional insurance reimbursement of up to $274 million on certain of these claims that would partially offset the potential aggregate exposure to loss in excess of the amount accrued.