NXP Semiconductors NV (NXPI), $4.85bb market cap

at price range mid-point of $19.5

$663mm IPO scheduled to price Friday, July 30

Another IPO analyst said "NXP's shares would come to market at about 10 or 11 times earnings calculated on an annualized basis, and when certain one-time charges are excluded" IPOdesktop cannot duplicate that result. See this link from page 12 in NXPI's July 22 sec filing this link from page 12 in NXPI’s July 22 sec filing In any case, enterprise value (see below) comparisons are most appropriate for NXPI

SUMMARY

Post IPO NXPI has a negative net worth post-IPO of at least $3bb (?)

SEC filing issues

. Interest charges aren’t broken out in the sec filing (haven’t seen this before) . EBITDA is not broken out in the sec filing (haven’t seen this before) NXPI is another KKR company seeking IPO money to repay debt, probably used to pay dividends to KKR, etc.

Week financials (see financials below) . Never earned money. In the March 2010 quarter revenue jumped up 65% & gross margin increased to 37% from 10% . But operating profit was zero and net loss was 29% of revenue . Post IPO total debt will almost equal the projected market cap of $4.8bb Doesn’t look like a good deal for investors at the current price range

Compare/contrast with other semiconductor companies

ENTERPRISE VALUE (EV) NXPI overpriced on an EV/Earnings & EV/Tangible Bk Value

Enterprise Value =	Mrk Cap	+Total	-Cash	=Enterprise	Price
annualizing Mrch or recent qtr	($mm)	debt*		Value (EV)	July 30
NXP Semi NV (NXPI)	$4,856	$4,534	-$870	$8,520
Texas Instum (TXN)	$29,650	$0	-$2,350	$27,300	$24.69
STMicroelect (STM)	$7,260	$2,029	-$2,887	$6,402	$8.19
National Semi (NSM)	$3,270	$1,278	-$1,027	$3,521	$13.80
ON Semi (ONNN)	$2,930	$1,478	-$561	$3,847	$6.75
source: Google Finance
ENTERPRISE VALUE	Enterprise	EV /	EV /	EV /	EV /
annualizing Mrch or recent qtr	Vle, $mm	Sales	Earnings	BookValue	TangibleBV
NXP Semi NV (NXPI)	$8,520	1.83	-7.0	6.7	-2.9
Texas Instum (TXN)	$27,300	1.95	8.9	2.8	3.2
STMicroelect (STM)	$6,402	0.63	4.5	0.9	1.3
National Semi (NSM)	$3,521	2.21	11.1	8.3	9.8
ON Semi (ONNN)	$3,847	1.75	15.3	3.6	7.0

COMPARE & CONTRAST
"standard ratios"	IPO Mrkt	Price /	Price /	Price /	Price /
annualizing Mrch or recent qtr	Cap (mm)	Sales	Earnings*	BookValue	TangibleBV
NXP Semi NV (NXPI)	$4,856	1.0	-4	3.8	-1.6
Texas Instum (TXN)	$29,650	2.1	10	3.0	3.5
STMicroelect (STM)	$7,260	0.7	5	1.1	1.5
National Semi (NSM)	$3,270	2.0	10	7.7	9.1
ON Semi (ONNN)	$2,930	1.3	12	2.7	5.4

BUSINESS

. Global semiconductor company and a long-standing supplier in the industry, with over 50 years of innovation and operating history. . Provides leading High-Performance Mixed-Signal and Standard Products solutions

CYCLICAL

. Historically, the relationship between supply and demand in the semiconductor industry has caused a high degree of cyclicality in the semiconductor market. . Semiconductor supply is partly driven by manufacturing capacity, which in the past has demonstrated alternating periods of substantial capacity additions and periods in which no or limited capacity was added.

LEVERAGED BUYOUT

On August 2, 2006 Philips sold 80.1% of its semiconductor business to a consortium of funds advised by Kohlberg Kravis Roberts & Co. L.P. ("KKR"), Bain Capital Partners, LLC ("Bain"), Silver Lake Management Company, L.L.C. ("Silver Lake"), Apax Partners LLP ("Apax") and AlpInvest Partners N.V.

INTELLECTUAL PROPERTY

14,000 patents and patent applications, as well as our royalty-free licenses to patents held by Philips, give us the benefit of one of the largest patent portfolios positions in the High-Performance Mixed-Signal and Standard Products markets

COMPETITION

Key competitors in alphabetical order include AAC Acoustic Technologies Holdings Inc., Analog Devices Inc., Atmel Corporation, Entropic Communications Inc., Fairchild Semiconductors International Inc., Freescale, Infineon, International Rectifier Corporation, Linear Technology Corporation, Maxim Integrated Products, Inc., MaxLinear, Inc., Microtune Inc., National Semiconductor, NEC Corporation, ON Semiconductor Corporation, Power Integrations Inc., ROHM Co., Ltd., Samsung, Silicon Laboratories Inc., STMicroelectronics, and Texas Instruments Incorporated.

USE OF IPO PROCEEDS

. $629mm . Repay debt

NXP Semis NV	NXPI, C, 6					Post-IPO shares: 249mm
Semiconductors
Eindhoven NL	2007	2008	2009	Mrch '09qtr	Mrch '10qtr	IPO Mkt
Revenue ($mm)	$6,321	$5,443	$3,843	$702	$1,165	Cap (mm)
Gross margin %	32%	22%	25%	10%	37%	$4,856
Operating income %	-12%	-49%	-23%	-49%	0%	@$19.5
Net loss	-$603.0	-$3,574.0	-$161.0	-$589.0	-$336.0
Net loss % of rev	-10%	-66%	-4%	-84%	-29%
VALUATION RATIOS
	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
annualizing March qtr	Cap (mm)	Sales	Earnings*	BookValue	TangibleBV	in IPO
NXP Semi NV (NXPI)	$4,856	1.0	-4	3.8	-1.6	14%
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		1	2	2	1	6

COMPARE & CONTRAST
	IPO Mrkt	Price /	Price /	Price /	Price /
annualizing Mrch or recent qtr	Cap (mm)	Sales	Earnings*	BookValue	TangibleBV
NXP Semi NV (NXPI)	$4,856	1.0	-4	3.8	-1.6
Texas Instum (TXN)	$29,650	2.1	10	3.0	3.5
STMicroelect (STM)	$7,260	0.7	5	1.1	1.5
National Semi (NSM)	$3,270	2.0	10	7.7	9.1
ON Semi (ONNN)	$2,930	1.3	12	2.7	5.4
Enterprise Value =	Mrk Cap	+Total	-Cash	=Enterprise	Price
annualizing Mrch or recent qtr	($mm)	debt*		Value (EV)	July 30
NXP Semi NV (NXPI)	$4,856	$4,534	-$870	$8,520
Texas Instum (TXN)	$29,650	$0	-$2,350	$27,300	$24.69
STMicroelect (STM)	$7,260	$2,029	-$2,887	$6,402	$8.19
National Semi (NSM)	$3,270	$1,278	-$1,027	$3,521	$13.80
ON Semi (ONNN)	$2,930	$1,478	-$561	$3,847	$6.75
source: Google Finance
*post IPO for MUSA
ENTERPRISE VALUE	Enterprise	EV /	EV /	EV /	EV /
annualizing Mrch or recent qtr	Vle, $mm	Sales	Earnings	BookValue	TangibleBV
NXP Semi NV (NXPI)	$8,520	1.83	-7.0	6.7	-2.9
Texas Instum (TXN)	$27,300	1.95	8.9	2.8	3.2
STMicroelect (STM)	$6,402	0.63	4.5	0.9	1.3
National Semi (NSM)	$3,521	2.21	11.1	8.3	9.8
ON Semi (ONNN)	$3,847	1.75	15.3	3.6	7.0