AUSTIN, Texas, July 22, 2008 -- Freescale Semiconductor Holdings I, Ltd. today announced financial results for the second quarter ended June 27, 2008.

Highlights for the second quarter of 2008 include:

• Net sales of $1.47 billion;
• Adjusted EBITDA of $416 million;
• Cash, cash equivalents and short-term investments of $1.20 billion at June 27, 2008.

A description of Adjusted EBITDA and the reconciliations to our GAAP results are included in this press release and the accompanying tables.

Net Sales

Net sales for the second quarter of 2008 were $1.47 billion, compared to $1.41 billion in the first quarter of 2008 and $1.38 billion in the second quarter of 2007. “Our revenue growth, operating efficiencies and improved margins represent solid execution on the part of the Freescale team,” said Rich Beyer, Chairman and CEO. 

Operating Highlights

Operating earnings, net earnings (loss) and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) include reorganization of business charges and non-cash purchase accounting expenses related to the company’s acquisition by a private equity consortium in December 2006.

The company believes that providing operating earnings and EBITDA exclusive of these expenses, and certain other items, is a more meaningful representation of the company’s ongoing financial performance. Including these expenses, the operating loss and net loss for the second quarter of 2008 were $137 million and $184 million, respectively, compared to $268 million and $288 million, respectively, during the second quarter of 2007. 

Excluding the aforementioned expenses, operating earnings were $234 million and EBITDA was $368 million in the second quarter of 2008. This compares to operating earnings of $159 million and EBITDA of $311 million in the second quarter of 2007.

The company also uses Adjusted EBITDA to measure compliance with certain of its debt covenants. Adjusted EBITDA is defined as EBITDA adjusted to add back non-cash, non-recurring and other items included in EBITDA and net earnings (loss), as required by various covenants in the company’s debt agreements. Adjusted EBITDA was $416 million for the second quarter of 2008 and $1.63 billion for the latest 12 months ended June 27, 2008.

Tables describing EBITDA, Adjusted EBITDA and reconciling net income to these measures are included in this press release.

Product Revenues

The company’s net sales figures for the second quarter of 2008 are as follows:

• Microcontroller net sales were $460 million in the second quarter of 2008, compared to $458 million in the first quarter of 2008 and $472 million in the second quarter of 2007.
• RF, Analog and Sensor net sales were $280 million in the second quarter of 2008, compared to $259 million in the first quarter of 2008 and $273 million in the second quarter of 2007.
• Networking and Multimedia net sales were $312 million in the second quarter of 2008, compared to $269 million in the first quarter of 2008 and $263 million in the second quarter of 2007. 
• Cellular net sales were $337 million in the second quarter of 2008, compared to $318 million in the first quarter of 2008 and $239 million in the second quarter of 2007.

• Other net sales were $83 million in the second quarter of 2008, compared to $101 million in the first quarter of 2008 and $129 million in the second quarter of 2007.

 
Liquidity Highlights

Cash, cash equivalents and short-term investments were $1.20 billion on June 27, 2008, compared to $1.25 billion on March 28, 2008. Capital expenditures were $74 million or five percent of net sales for the second quarter of 2008.

Conference Call and Webcast

Freescale's quarterly earnings call is scheduled to begin at 4 p.m. Central Daylight Time on July 22, 2008. The company will offer a live webcast of the conference call over the Internet at: www.freescale.com/investor.

Caution Regarding Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to our business strategy, goals and expectations concerning our market position, future operations, margins, profitability, liquidity and capital resources. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Actual results and trends in the future may differ materially from those suggested or implied by the forward-looking statements depending on a variety of factors. Some of the factors that we believe could affect our results include our substantial indebtedness; our ability to service our outstanding indebtedness and the impact such indebtedness may have on the way we operate our business; the loss of one or more of our significant customers or strategic relationships; general economic and business conditions and any downturns in the cyclical industry in which we operate; our competitive environment and our ability to make technological advances; interruptions in our production or manufacturing capacity and our ability to obtain supplies; economic conditions in the industries in which our products are sold; maintenance and protection of our intellectual property; political and economic conditions in the countries where we conduct business; integration of future acquisitions into our business; the costs of environmental compliance and/or the imposition of liabilities under environmental laws and regulations; potential product liability claims; inability to make necessary capital expenditures; loss of key personnel; and our ability to achieve cost savings  as well as other matters described under "Risk Factors" in our Annual Report on Form 10-K and other filings with the SEC. We undertake no obligation to update any information contained in this press release.

About Freescale Semiconductor

Freescale Semiconductor 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 2007 sales of $5.7 billion (USD). www.freescale.com

Click here for Second Quarter 2008 Results and Tables

CONTACT:

Investors:
Mitch Haws, 512-895-2454
mitch.haws@freescale.com

Media:
Andy North, 512-996-4418
andy.north@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. 2008.