Item 1. Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

($ in millions, unless otherwise stated)

			For the three months ended												For the six months ended
			June 29, 2025						June 30, 2024						June 29, 2025						June 30, 2024
Revenue			2,926						3,127						5,761						6,253
Cost of revenue			(1,364)						(1,335)						(2,639)						(2,678)
Gross profit			1,562						1,792						3,122						3,575
Research and development			(573)						(594)						(1,120)						(1,158)
Selling, general and administrative			(278)						(270)						(559)						(576)
Amortization of acquisition-related intangible assets			(25)						(28)						(52)						(79)
Total operating expenses			(876)						(892)						(1,731)						(1,813)
Other income (expense)			1						(4)						19						(10)
Operating income (loss)			687						896						1,410						1,752
Financial income (expense):
Other financial income (expense)			(86)						(75)						(178)						(145)
Income (loss) before income taxes			601						821						1,232						1,607
Benefit (provision) for income taxes			(116)						(154)						(246)						(295)
Results relating to equity-accounted investees			(28)						(3)						(32)						(4)
Net income (loss)			457						664						954						1,308
Less: Net income (loss) attributable to non-controlling interests			12						6						19						11
Net income (loss) attributable to stockholders			445						658						935						1,297
Earnings per share data:
Net income (loss) per common share attributable to stockholders in $
Basic			1.76						2.58						3.69						5.07
Diluted			1.75						2.54						3.67						5.01
Weighted average number of shares of common stock outstanding during the period (in thousands):
Basic			252,418						255,478						253,057						256,023
Diluted			253,844						258,732						254,433						258,963

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												For the six months ended
			June 29, 2025						June 30, 2024						June 29, 2025						June 30, 2024
Net income (loss)			457						664						954						1,308
Other comprehensive income (loss), net of tax:
Change in fair value cash flow hedges			7						—						10						(8)
Change in foreign currency translation adjustment			136						(16)						179						(54)
Change in net actuarial gain (loss)			(2)						2						(2)						2
Total other comprehensive income (loss)			141						(14)						187						(60)
Total comprehensive income (loss)			598						650						1,141						1,248
Less: Comprehensive income (loss) attributable to non-controlling interests			12						6						19						11
Total comprehensive income (loss) attributable to stockholders			586						644						1,122						1,237

See accompanying notes to the Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

($ in millions, unless otherwise stated)

						June 29, 2025						December 31, 2024
ASSETS
Current assets:
			Cash and cash equivalents			3,170						3,292
			Accounts receivable, net			1,071						1,032
			Assets held for sale			294						—
			Inventories, net			2,361						2,356
			Other current assets			790						625
Total current assets						7,686						7,305
Non-current assets:
			Deferred tax assets			1,306						1,251
			Other non-current assets			1,909						1,796
			Property, plant and equipment, net of accumulated depreciation of $6,327 and $6,145			3,130						3,267
			Identified intangible assets, net of accumulated amortization of $916 and $1,037			1,121						836
			Goodwill			10,098						9,930
			Total non-current assets			17,564						17,080
Total assets						25,250						24,385
LIABILITIES AND EQUITY
Current liabilities:
			Accounts payable			892						1,017
			Restructuring liabilities-current			65						147
			Other current liabilities			1,471						1,434
			Short-term debt			1,999						500
Total current liabilities						4,427						3,098
Non-current liabilities:
			Long-term debt			9,479						10,354
			Restructuring liabilities			60						10
			Other non-current liabilities			1,348						1,392
Total non-current liabilities						10,887						11,756
Total liabilities						15,314						14,854
Equity:
			Non-controlling interests			367						348
			Stockholders’ equity:
			Common stock, par value €0.20 per share:			56						56
			Capital in excess of par value			15,206						14,962
			Treasury shares, at cost:
			22,405,067 shares (2024: 20,195,011 shares)			(4,441)						(4,004)
			Accumulated other comprehensive income (loss)			170						(17)
			Accumulated deficit			(1,422)						(1,814)
			Total stockholders’ equity			9,569						9,183
Total equity						9,936						9,531
Total liabilities and equity						25,250						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 six months ended
			June 29, 2025						June 30, 2024
Cash flows from operating activities:
Net income (loss)			954						1,308
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization			416						448
Share-based compensation			244						229
Amortization of discount (premium) on debt, net			1						2
Amortization of debt issuance costs			3						3
Net (gain) loss on sale of assets			(28)						(2)
(Gain) loss on equity security, net			3						5
Results relating to equity-accounted investees			32						4
Deferred tax expense (benefit)			(24)						(87)
Changes in operating assets and liabilities:
(Increase) decrease in receivables and other current assets			(135)						(15)
(Increase) decrease in inventories			(84)						(14)
Increase (decrease) in accounts payable and other liabilities			(77)						(322)
Decrease (increase) in other non-current assets			25						46
Exchange differences			13						8
Other items			1						(1)
Net cash provided by (used for) operating activities			1,344						1,612
Cash flows from investing activities:
Purchase of identified intangible assets			(62)						(87)
Capital expenditures on property, plant and equipment			(222)						(411)
Insurance recoveries received for equipment damage			—						2
Proceeds from disposals of property, plant and equipment			1						3
Purchase of interests in businesses, net of cash acquired			(679)						—
Proceeds of short-term deposits			—						9
Purchase of investments			(146)						(34)
Proceeds from sale of investments			—						5
Net cash provided by (used for) investing activities			(1,108)						(513)
Cash flows from financing activities:
Repurchase of long-term debt			(500)						(1,000)
Proceeds from the issuance of long-term debt			370						—
Proceeds from issuance of commercial paper notes			2,211						—
Repayment of commercial paper notes			(1,461)						—
Dividends paid to common stockholders			(515)						(521)
Proceeds from issuance of common stock through stock plans			39						40
Purchase of treasury shares and restricted stock unit withholdings			(507)						(613)
Other, net			(1)						(1)
Net cash provided by (used for) financing activities			(364)						(2,095)
Effect of changes in exchange rates on cash positions			6						(7)
Increase (decrease) in cash and cash equivalents			(122)						(1,003)
Cash and cash equivalents at beginning of period			3,292						3,862
Cash and cash equivalents at end of period			3,170						2,859

Supplemental disclosures to the Condensed Consolidated Cash flows
Net cash paid during the period for:
Interest			150						124
Income taxes, net of refunds			263						391
Net gain (loss) on sale of assets:
Cash proceeds from the sale of assets			37						3
Book value of these assets			(9)						(1)
Non-cash investing activities:
Non-cash capital expenditures			103						166

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
Net income (loss)																																				445						445						12						457
Other comprehensive income (loss)																														141												141												141
Share-based compensation plans																		113																								113												113
Shares issued pursuant to stock awards						70																		16												(9)						7												7
Treasury shares repurchased and retired						(1,105)																		(204)																		(204)												(204)
Dividends common stock ($1.014 per share)																																				(255)						(255)												(255)
Balance as of June 29, 2025						252,114						56						15,206						(4,441)						170						(1,422)						9,569						367						9,936

						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
Net income (loss)																																				658						658						6						664
Other comprehensive income (loss)																														(14)												(14)												(14)
Share-based compensation plans																		111																								111												111
Shares issued pursuant to stock awards						89																		17												(14)						3												3
Treasury shares repurchased and retired						(1,208)																		(310)																		(310)												(310)
Dividends common stock ($1.014 per share)																																				(259)						(259)												(259)
Balance as of June 30, 2024						254,976						56						14,730						(3,762)						30						(2,036)						9,018						327						9,345

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.

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.

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"), the 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.

Chief Executive Officer Succession

On April 23, 2025, Kurt Sievers, the CEO and President of the Company, provided notice that he would voluntarily retire as CEO and executive director of the Company on October 28, 2025. Following its CEO succession planning process, NXP’s board of directors has unanimously appointed Rafael Sotomayor to succeed as President, effective April 28, 2025. Furthermore, Mr. Sotomayor has been designated as CEO upon Mr. Sievers’s retirement from his CEO role. Mr. Sievers will remain a strategic advisor to NXP through December 31, 2025.

Acquisitions

On June 17, 2025, NXP announced the acquisition of 100% of TTTech Auto for $766 million in cash ($679 million net of cash acquired). The results of their operations and the estimated fair value of the assets acquired and liabilities assumed in the business combination will be included in our financial statements from the date of acquisition forward.

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, net of closing adjustments, subject to customary closing conditions, including regulatory approvals.

On February 10, 2025, NXP entered into a definitive agreement to acquire Kinara, Inc. for $307 million in cash, net of closing adjustments, subject to customary closing conditions, including regulatory approvals.

2025

On June 17, 2025, NXP announced the acquisition of 100% of TTTech Auto for $766 million in cash ($679 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 preliminary fair values of the assets acquired and liabilities assumed in the acquisition, by major class, were recognized as follows:

Cash			87
Other assets			80
Other liabilities			(48)
Identified intangible assets			351
Goodwill			296
Net assets acquired			766

The final determination of the fair values of certain assets and liabilities will be completed in the quarters subsequent to the acquisition date.

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						268						11.5
Technology						37						5.5
Customer relationships						44						9.5
Order backlog						2						3.5
Total identified intangible assets						351

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.

There were no material divestments during the first six months of 2025.

2024

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

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. Subject to customary closing conditions, the transaction is expected to close during 2026. The carrying value of these assets held for sale as of June 29, 2025, are comprised of current assets of $81 million and non-current assets of $213 million, which consists primarily of goodwill of $177 million.

5 Supplemental Financial Information

Statement of Operations Information:

Disaggregation of revenue

The following table presents revenue disaggregated by sales channel:

			For the three months ended												For the six months ended
			June 29, 2025						June 30, 2024						June 29, 2025						June 30, 2024
Distributors			1,636						1,804						3,160						3,543
Original Equipment Manufacturers and Electronic Manufacturing Services			1,257						1,294						2,541						2,649
Other			33						29						60						61
Total Revenue			2,926						3,127						5,761						6,253

Depreciation, amortization and impairment

			For the three months ended												For the six months ended
			June 29, 2025						June 30, 2024						June 29, 2025						June 30, 2024
Depreciation of property, plant and equipment			143						146						286						291
Amortization of internal use software			8						7						16						14
Amortization of other identified intangible assets			56						60						114						143
Total - Depreciation, amortization and impairment			207						213						416						448

Financial income and expense

			For the three months ended												For the six months ended
			June 29, 2025						June 30, 2024						June 29, 2025						June 30, 2024
Interest income			39						39						74						89
Interest expense			(115)						(97)						(221)						(202)
Other financial income/ (expense)			(10)						(17)						(31)						(32)
Total			(86)						(75)						(178)						(145)

Earnings per share

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

			For the three months ended												For the six months ended
			June 29, 2025						June 30, 2024						June 29, 2025						June 30, 2024
Net income (loss)			457						664						954						1,308
Less: net income (loss) attributable to non-controlling interests			12						6						19						11
Net income (loss) attributable to stockholders			445						658						935						1,297
Weighted average number of shares outstanding (after deduction of treasury shares) during the year (in thousands)			252,418						255,478						253,057						256,023
Plus incremental shares from assumed conversion of:
Options 1)			80						157						87						165
Restricted Share Units, Performance Share Units and Equity Rights 2)			1,346						3,097						1,289						2,775
Dilutive potential common shares			1,426						3,254						1,376						2,940
Adjusted weighted average number of shares outstanding (after deduction of treasury shares) during the year (in thousands)			253,844						258,732						254,433						258,963
EPS attributable to stockholders in $:
Basic net income (loss)			1.76						2.58						3.69						5.07
Diluted net income (loss)			1.75						2.54						3.67						5.01

1. There were no stock options to purchase shares of NXP’s common stock that were outstanding in Q2 2025 and YTD 2025 (Q2 2024 and YTD 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 0.1 million unvested RSUs, PSUs and equity rights that were outstanding in Q2 2025 and YTD 2025 (Q2 2024 and YTD 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 June 29, 2025 and December 31, 2024, our cash balance was $3,170 million and $3,292 million, respectively, of which $302 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 six months of 2025 and 2024, no dividends were declared by SSMC.

Inventories

Inventories are summarized as follows:

			June 29, 2025						December 31, 2024
Raw materials			91						109
Work in process			1,647						1,576
Finished goods			623						671
			2,361						2,356

The amounts recorded above are net of allowance for obsolescence of $124 million as of June 29, 2025 (December 31, 2024: $150 million).

Equity Investments

At June 29, 2025 and December 31, 2024, the total carrying value of investments in equity securities is summarized as follows:

			June 29, 2025						December 31, 2024
Marketable equity securities			—						1
Non-marketable equity securities			113						71
Equity-accounted investments			385						300
			498						372

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

			June 29, 2025												December 31, 2024
			Shareholding %						Amount						Shareholding %						Amount
VisionPower Semiconductor Manufacturing Company Pte. Ltd. (VSMC)			40.00		%				204						40.00		%				134
European Semiconductor Manufacturing Company (ESMC) GmbH 1)			10.00		%				121						10.00		%				77
SMART Growth Fund, L.P.			8.41		%				37						8.41		%				39
SigmaSense, LLC			9.40		%				—						10.64		%				28
Others			—						23						—						22
									385												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												For the six months ended
			June 29, 2025						June 30, 2024						June 29, 2025						June 30, 2024
Company's share in income (loss)			(2)						(3)						(6)						(5)
Other results 1)			(26)						—						(26)						1
			(28)						(3)						(32)						(4)
1) For the three and six months periods ending June 29, 2025, other results includes the impairment of our equity method investment SigmaSense.

Other current liabilities

Other current liabilities at June 29, 2025 and December 31, 2024 consisted of the following:

			June 29, 2025						December 31, 2024
Accrued compensation and benefits			327						371
Customer programs			124						131
Income taxes payable			105						114
Dividend payable			256						258
Other			659						560
			1,471						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			179						13						(2)						190
Amounts reclassified out of accumulated other comprehensive income (loss)			—						—						—						—
Tax effects			—						(3)						—						(3)
Other comprehensive income (loss)			179						10						(2)						187
As of June 29, 2025			245						5						(80)						170

Cash dividends

The following dividends were declared during the first six 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
Second quarter			1.014						256						1.014						259

The dividend declared in the second quarter (not yet paid) is classified in the Condensed Consolidated Balance Sheet in other current liabilities as of June 29, 2025 and was subsequently paid on July 9, 2025.

6 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 June 29, 2025
Restructuring liabilities			157						86						(118)						(5)						5						125

The total restructuring liability as of June 29, 2025 of $125 million is classified in the Consolidated Balance Sheet under current liabilities ($65 million) and non-current liabilities ($60 million).

The restructuring charges for the six-month period ending June 29, 2025 primarily consist of $86 million for personnel related costs for specific targeted actions, offset by a $5 million release for an earlier program. The restructuring charges for the six-month period ending June 30, 2024 consist of $17 million for personnel related costs for specific targeted actions, offset by a $4 million release for an earlier program.

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												For the six months ended
			June 29, 2025						June 30, 2024						June 29, 2025						June 30, 2024
Cost of revenue			61						4						65						7
Research and development			3						4						10						7
Selling, general and administrative			3						(2)						6						(1)
Net restructuring charges			67						6						81						13

7 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												For the six months ended
			June 29, 2025						June 30, 2024						June 29, 2025						June 30, 2024
Tax benefit (provision) calculated at EAETR			(112)						(147)						(231)						(286)
Discrete tax benefit (provision) items			(4)						(7)						(15)						(9)
Benefit (provision) for income taxes			(116)						(154)						(246)						(295)
Effective tax rate			19.3		%				18.8		%				20.0		%				18.4		%

The effective tax rate of 19.3% for the second quarter of 2025 was higher than the EAETR due to the income tax expense for discrete items of $4 million. The discrete items are primarily related to the impact of changes in the litigation accrual and related insurance reimbursements relating to the Motorola Personal Injury Lawsuits regarding previous years.

For the first six months ended 2025, the effective tax rate of 20.0% was higher than 18.8% due to a net result of unfavorable discrete items of $15 million.

The effective tax rate of 20.0% for the first six months of 2025 was higher compared to the rate for the first six months ended 2024 of 18.4% 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.

Subsequent event

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented as of 2026. We are currently assessing its impact on our consolidated financial statements. We also note that there is unclarity about what the G7 statement in relation to the US on global minimum taxes, as announced on June 28, 2025, could mean for the Company.

8 Identified Intangible Assets

Identified intangible assets as of June 29, 2025 and December 31, 2024, respectively, were composed of the following:

			June 29, 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			838						(422)						790						(400)
Technology-based			1,175						(494)						1,059						(637)
Identified intangible assets			2,037						(916)						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)			129
2026			212
2027			189
2028			116
2029			94
Thereafter			381

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 June 29, 2025 (December 31, 2024: 5 years).

9 Debt

Commercial Paper

We have a $2 billion Commercial Paper Program to support general corporate purposes. As of June 29, 2025, we had $750 million commercial paper notes outstanding with a duration of up to 98 days. The weighted-average interest rate of the Company's outstanding commercial paper notes is 4.67%.

Long-term debt

The following table summarizes the outstanding debt as of June 29, 2025 and December 31, 2024:

									June 29, 2025												December 31, 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 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									10,790												10,920
Unamortized discounts, premiums and debt issuance costs									(62)												(66)
Total debt, including unamortized discounts, premiums, debt issuance costs and fair value adjustments									10,728												10,854
Current portion of long-term debt									(1,249)												(500)
Long-term debt									9,479												10,354

10 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												For the six months ended
			June 29, 2025						June 30, 2024						June 29, 2025						June 30, 2024
Revenue and other income			1						1						2						2
Purchase of goods and services			—						1						1						2

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

			June 29, 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 $160 million during the six months ended June 29, 2025 and $435 million to-date, 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 12 – Commitments and Contingencies for NXP’s related party commitments.

11 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						June 29, 2025						December 31, 2024
Assets:
Money market funds			1						2,056						2,398
Marketable equity securities			1						—						2
Derivative instruments-assets			2						18						2
Liabilities:
Derivative instruments-liabilities			2						(2)						(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 June 29, 2025, the estimated fair value of current and non-current debt was $9.8 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 ($750 million as of June 29, 2025 and no outstanding commercial paper notes as of December 31, 2024).

12 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 June 29, 2025, other than foundry joint venture commitments, the Company had purchase commitments of $3,501 million, which are due through 2044.

Foundry Joint Venture Commitments

Driven by our investment in VSMC, NXP has committed to invest an additional $1,390 million in equity through 2026. NXP has committed to contribute an additional $765 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 $463 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 Company has reached agreements to resolve 12 of the 21 cases. 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 $246 million accrued for potential and current legal proceedings as of June 29, 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 June 29, 2025, the Company’s related balance of insurance reimbursements was $208 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 June 29, 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 $245 million. Based upon our past experience with these matters, the Company would expect to receive additional insurance reimbursement of up to $208 million on certain of these claims that would partially offset the potential aggregate exposure to loss in excess of the amount accrued.