Freescale Semiconductor Announces

AUSTIN, Texas--Freescale Semiconductor, Inc. today announced preliminary financial results for the fourth quarter and full-year 2006.

Highlights for the quarter and full-year include:

• Net sales of $1.62 billion for the fourth quarter 2006;
• Full–year 2006 net sales of $6.36 billion;
• Fourth quarter 2006 EBITDA of $401 million or 25% of net sales;
• Full-year 2006 EBITDA of $1.63 billion or 26% of net sales.

"Freescale delivered solid performance in the fourth quarter and throughout 2006," said Michel Mayer, chairman and CEO. “Our diversified business model continues to provide stability in a challenging market.”

The company expects to provide audited GAAP results for the full-year 2006, which will include material purchase accounting adjustments, during the first quarter of 2007. The financial results included herein are un-audited and presented on a non-GAAP basis, as they exclude all merger-related costs and the impact of purchase accounting associated with the company’s acquisition by a private equity consortium completed in December 2006.

Net Sales

Net sales for the fourth quarter of 2006 were $1.62 billion, in-line with third quarter 2006 sales of $1.62 billion, and 9% above the $1.48 billion reported in the fourth quarter of 2005. Full-year 2006 net sales were $6.36 billion, an increase of 9% over the prior year total of $5.84 billion.

Earnings Before Interest, Taxes, Depreciation and Amortization

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for the fourth quarter of 2006 were $401 million or 25% of net sales, compared to $433 million, or 27% of net sales, for the third quarter of 2006 and $362 million, or 24% of net sales, for the fourth quarter of 2005. EBITDA for full-year 2006 was $1.63 billion or 26% of net sales, representing growth of 22% on a year-over-year basis.

Segment Results

The Transportation and Standard Products segment reported net sales of $677 million in the fourth quarter of 2006, compared to $683 million in the third quarter of 2006 and $649 million in the fourth quarter of 2005. Revenues for 2006 were $2.71 billion, a 6% increase over the prior year total of $2.57 billion.

The Wireless and Mobile Solutions segment reported net sales of $578 million in the fourth quarter of 2006, compared to $539 million in the third quarter of 2006 and $476 million in the fourth quarter of 2005. Revenues for 2006 were $2.14 billion, a 20% increase over the prior year.

The Networking and Computing Systems segment reported net sales of $343 million, compared to $369 million in the third quarter of 2006 and $338 million in the fourth quarter of 2005. Revenues for 2006 were $1.43 billion, essentially flat with the prior year. Excluding the impact of discontinued businesses, revenues increased 15% and 14%, respectively, for the fourth quarter and full-year 2006.

Liquidity Highlights

Cash, cash equivalents and marketable securities were $710 million at December 31, 2006. Capital expenditures were $149 million and $714 million, respectively, for the fourth quarter and for full-year 2006.

Conference Call and Webcast

Freescale's quarterly earnings call is scheduled to begin at 4:30 p.m. Central Standard Time (USA) on Thursday, February 1, 2007. The company will offer a live webcast of the conference call over the Internet at www.freescale.com/investor.

About Freescale Semiconductor

Freescale Semiconductor, Inc. is a global leader in the design and manufacture of embedded semiconductors for the automotive, consumer, industrial, networking and wireless markets. The privately held company is based in Austin, Texas, and has design, research and development, manufacturing or sales operations in more than 30 countries. Freescale is one of the world's largest semiconductor companies with 2006 sales of $6.4 billion (USD). www.freescale.com

Freescale™ and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc. 2007.

Freescale Semiconductor, Inc. and Subsidiaries
Summary Financial Information
(Unaudited)
(amounts in millions)
		Quarter Ended December 31, 2006(1)		Quarter Ended September 29, 2006		Quarter Ended December 31, 2005		Year Ended December 31,
								2006(1)		2005
Net sales
Transportation and Standard Products		$ 677		$ 683		$ 649		$ 2,710		$ 2,567
Networking and Computing Systems		343		369		338		1,433		1,434
Wireless and Mobile Solutions		578		539		476		2,137		1,774
Other		21		28		16		83		68
Total net sales		$ 1,619(2)		$ 1,619		$ 1,479		$ 6,363(2)		$ 5,843
EBITDA(3)		$ 401(1)		$ 433		$ 362		$ 1,625(1)		$ 1,328
(1) Excludes the effect of all purchase accounting adjustments, Merger expenses and all non-cash charges associated with our acquisition by a private equity consortium completed in December 2006. The excluded items will be material.
(2) Excludes a $2 million reduction in revenue caused by purchase accounting adjustments to reflect deferred revenue at December 1, 2006 at its estimated fair value.
(3) We believe that earnings before interest, income taxes, depreciation and amortization (EBITDA) is a useful financial metric to assess our ability to generate cash from operations sufficient to pay taxes, to service debt and to undertake capital expenditures. Given the significant investments that we have made in the past in property, plant and equipment, depreciation and amortization expense comprises a meaningful portion of our cost structure. We believe that EBITDA will provide investors with a useful tool for assessing the comparability between periods of our ability to generate cash from operations sufficient to pay taxes, to service debt and to undertake capital expenditures because it eliminates depreciation and amortization expense attributable to our historically higher levels of capital expenditures. The term EBITDA is not defined under generally accepted accounting principles in the U.S., or U.S. GAAP, and EBITDA is not a measure of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. In addition, EBITDA is impacted by reorganization of businesses and other restructuring-related charges. When assessing our operating performance or our liquidity, you should not consider this data in isolation, or as a substitute for, our net cash from operating activities or other cash flow data that is calculated in accordance with U.S. GAAP. In addition, our EBITDA may not be comparable to EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate EBITDA in the same manner as we do. Note that as indicated in Note 1 above, the quarter and year ended December 31, 2006 amounts exclude all Merger expenses and the impact of purchase accounting associated with our acquisition by a private equity consortium completed in December 2006.
Note that certain prior period amounts with regard to EBITDA and our segment net sales have been reclassified to conform to the current periods presentation.