Supplemental Guarantor Condensed Consolidating Financial Statements | 3 Months Ended |
Apr. 04, 2014 |
Disclosure Supplemental Guarantor Condensed Consolidating Financial Statements Additional Information [Abstract] | ' |
Supplemental Guarantor Condensed Consolidating Financial Statements | ' |
10) Supplemental Guarantor Condensed Consolidating Financial Statements |
Pursuant to the terms of our acquisition by a consortium of private equity funds (“Sponsors”) in a transaction referred to as the “Merger” in December 2006, Freescale Inc. continues as a wholly-owned indirect subsidiary of Freescale Ltd. The reporting entity subsequent to the Merger is Freescale Ltd. |
As a result of the Merger and subsequent debt redemption and refinancing transactions, we had $2,313 million aggregate principal amount of Senior Notes outstanding as of April 4, 2014, as further discussed in Note 4, “Debt.” The senior secured notes are jointly and severally guaranteed on a secured, senior basis; the senior unsecured notes are jointly and severally guaranteed on an unsecured, senior basis; and, the senior subordinated notes are jointly and severally guaranteed on an unsecured, senior subordinated basis, in each case, subject to certain exceptions, by Freescale Ltd., its wholly owned direct and indirect subsidiaries created in connection with the Merger, and SigmaTel, LLC (together, the “Guarantors”). Each Guarantor fully and unconditionally guarantees, jointly and severally with the other Guarantors, as a primary obligor and not merely as a surety, the due and punctual payment and performance of the obligations. As of April 4, 2014, other than SigmaTel, LLC, none of Freescale Inc.’s domestic or foreign subsidiaries (“Non-Guarantors”) guarantee the Senior Notes or Credit Facility. In the future, other subsidiaries may be required to guarantee all or a portion of the Senior Notes, if and to the extent they guarantee the Credit Facility. (The relationship between the Company and the parent companies is defined and discussed in Note 1, “Basis of Presentation and Principles of Consolidation,” to our consolidated financial statements in the Annual Report.) |
The following tables present our results of operations, financial position and cash flows of Freescale Ltd., the Guarantors, Freescale Inc., the Non-Guarantors and eliminations for the three months ended April 4, 2014 and March 29, 2013 and as of April 4, 2014 and December 31, 2013, to arrive at the information on a consolidated basis: |
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Supplemental Condensed Consolidating Statement of Operations |
For the Three Months Ended April 4, 2014 |
(in millions) | Freescale Ltd. | | Guarantors | | Freescale Inc. | | Non-Guarantors | | Eliminations | | Consolidated |
Net sales | $ | — | | | $ | — | | | $ | 1,396 | | | $ | 1,505 | | | $ | (1,774 | ) | | $ | 1,127 | |
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Cost of sales | — | | | — | | | 1,030 | | | 1,366 | | | (1,774 | ) | | 622 | |
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Gross margin | — | | | — | | | 366 | | | 139 | | | — | | | 505 | |
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Selling, general and administrative | 2 | | | — | | | 166 | | | 58 | | | (100 | ) | | 126 | |
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Research and development | — | | | — | | | 135 | | | 75 | | | — | | | 210 | |
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Amortization expense for acquired intangible assets | — | | | — | | | 3 | | | — | | | — | | | 3 | |
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Reorganization of business and other | — | | | — | | | 1 | | | 10 | | | — | | | 11 | |
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Operating (loss) earnings | (2 | ) | | — | | | 61 | | | (4 | ) | | 100 | | | 155 | |
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Loss on extinguishment or modification of long-term debt | — | | | — | | | (59 | ) | | — | | | — | | | (59 | ) |
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Other (expense) income, net | (21 | ) | | (21 | ) | | (19 | ) | | 101 | | | (143 | ) | | (103 | ) |
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(Loss) earnings before income taxes | (23 | ) | | (21 | ) | | (17 | ) | | 97 | | | (43 | ) | | (7 | ) |
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Income tax expense | — | | | — | | | 4 | | | 12 | | | — | | | 16 | |
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Net (loss) earnings | $ | (23 | ) | | $ | (21 | ) | | $ | (21 | ) | | $ | 85 | | | $ | (43 | ) | | $ | (23 | ) |
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Supplemental Condensed Consolidating Statement of Comprehensive Earnings (Loss) |
For the Three Months Ended April 4, 2014 |
(in millions) | Freescale Ltd. | | Guarantors | | Freescale Inc. | | Non-Guarantors | | Eliminations | | Consolidated |
Net (loss) earnings | $ | (23 | ) | | $ | (21 | ) | | $ | (21 | ) | | $ | 85 | | | $ | (43 | ) | | $ | (23 | ) |
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Other comprehensive earnings, net of tax: | | | | | | | | | | | |
Foreign currency translation adjustments | — | | | — | | | — | | | — | | | — | | | — | |
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Derivative instrument adjustments: | | | | | | | | | | | |
Unrealized gains arising during the period | — | | | — | | | 3 | | | — | | | — | | | 3 | |
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Reclassification adjustment for items included in net (loss) earnings | — | | | — | | | 1 | | | — | | | — | | | 1 | |
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Post-retirement adjustments: | | | | | | | | | | | |
Gains arising during the period | — | | | — | | | — | | | — | | | — | | | — | |
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Amortization of actuarial gains (losses) included in net (loss) earnings | — | | | — | | | — | | | — | | | — | | | — | |
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Other comprehensive earnings | — | | | — | | | 4 | | | — | | | — | | | 4 | |
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Comprehensive (loss) earnings | $ | (23 | ) | | $ | (21 | ) | | $ | (17 | ) | | $ | 85 | | | $ | (43 | ) | | $ | (19 | ) |
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Supplemental Condensed Consolidating Statement of Operations |
For the Three Months Ended March 29, 2013 |
(in millions) | Freescale Ltd. | | Guarantors | | Freescale Inc. | | Non-Guarantors | | Eliminations | | Consolidated |
Net sales | $ | — | | | $ | — | | | $ | 1,194 | | | $ | 1,244 | | | $ | (1,457 | ) | | $ | 981 | |
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Cost of sales | — | | | — | | | 901 | | | 1,139 | | | (1,457 | ) | | 583 | |
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Gross margin | — | | | — | | | 293 | | | 105 | | | — | | | 398 | |
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Selling, general and administrative | 2 | | | — | | | 140 | | | 42 | | | (73 | ) | | 111 | |
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Research and development | — | | | — | | | 116 | | | 66 | | | — | | | 182 | |
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Amortization expense for acquired intangible assets | — | | | — | | | 3 | | | — | | | — | | | 3 | |
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Reorganization of business and other | — | | | — | | | 5 | | | (7 | ) | | — | | | (2 | ) |
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Operating (loss) earnings | (2 | ) | | — | | | 29 | | | 4 | | | 73 | | | 104 | |
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Loss on extinguishment or modification of long-term debt | — | | | — | | | (22 | ) | | — | | | — | | | (22 | ) |
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Other income (expense), net | 54 | | | 54 | | | 48 | | | 76 | | | (352 | ) | | (120 | ) |
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Earnings (loss) before income taxes | 52 | | | 54 | | | 55 | | | 80 | | | (279 | ) | | (38 | ) |
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Income tax expense | — | | | — | | | 1 | | | 9 | | | — | | | 10 | |
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Net earnings (loss) | $ | 52 | | | $ | 54 | | | $ | 54 | | | $ | 71 | | | $ | (279 | ) | | $ | (48 | ) |
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Supplemental Condensed Consolidating Statement of Comprehensive Earnings (Loss) |
For the Three Months Ended March 29, 2013 |
(in millions) | Freescale Ltd. | | Guarantors | | Freescale Inc. | | Non-Guarantors | | Eliminations | | Consolidated |
Net earnings (loss) | $ | 52 | | | $ | 54 | | | $ | 54 | | | $ | 71 | | | $ | (279 | ) | | $ | (48 | ) |
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Other comprehensive loss, net of tax: | | | | | | | | | | | |
Foreign currency translation adjustments | — | | | — | | | — | | | (4 | ) | | — | | | (4 | ) |
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Derivative instrument adjustments: | | | | | | | | | | | |
Unrealized losses arising during the period | — | | | — | | | (1 | ) | | — | | | — | | | (1 | ) |
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Reclassification adjustment for items included in net earnings (loss) | — | | | — | | | — | | | — | | | — | | | — | |
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Post-retirement adjustments: | | | | | | | | | | | |
Gains arising during the period | — | | | — | | | — | | | 2 | | | — | | | 2 | |
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Amortization of actuarial gains included in net earnings (loss) | — | | | — | | | — | | | 1 | | | — | | | 1 | |
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Other comprehensive loss | — | | | — | | | (1 | ) | | (1 | ) | | — | | | (2 | ) |
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Comprehensive earnings (loss) | $ | 52 | | | $ | 54 | | | $ | 53 | | | $ | 70 | | | $ | (279 | ) | | $ | (50 | ) |
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Supplemental Condensed Consolidating Balance Sheet |
4-Apr-14 |
(in millions) | Freescale Ltd. | | Guarantors | | Freescale Inc. | | Non-Guarantors | | Eliminations | | Consolidated |
Assets | | | | | | | | | | | |
Cash and cash equivalents | $ | 3 | | | $ | — | | | $ | 147 | | | $ | 559 | | | $ | — | | | $ | 709 | |
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Inter-company receivable | 171 | | | — | | | 410 | | | 473 | | | (1,054 | ) | | — | |
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Accounts receivable, net | — | | | — | | | 124 | | | 340 | | | — | | | 464 | |
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Inventory, net | — | | | — | | | 288 | | | 436 | | | — | | | 724 | |
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Other current assets | — | | | — | | | 80 | | | 67 | | | — | | | 147 | |
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Total current assets | 174 | | | — | | | 1,049 | | | 1,875 | | | (1,054 | ) | | 2,044 | |
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Property, plant and equipment, net | — | | | — | | | 333 | | | 360 | | | — | | | 693 | |
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Investment in affiliates | (3,986 | ) | | (3,986 | ) | | 1,448 | | | — | | | 6,524 | | | — | |
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Intangible assets, net | — | | | — | | | 51 | | | — | | | — | | | 51 | |
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Inter-company note receivable | — | | | 119 | | | — | | | 162 | | | (281 | ) | | — | |
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Other assets, net | 4 | | | — | | | 149 | | | 159 | | | — | | | 312 | |
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Total Assets | $ | (3,808 | ) | | $ | (3,867 | ) | | $ | 3,030 | | | $ | 2,556 | | | $ | 5,189 | | | $ | 3,100 | |
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Liabilities and Shareholders’ (Deficit) Equity | | | | | | | | | | | |
Current portion of long-term debt and capital lease obligations | $ | — | | | $ | — | | | $ | 35 | | | $ | — | | | $ | — | | | $ | 35 | |
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Inter-company payable | — | | | — | | | 552 | | | 502 | | | (1,054 | ) | | — | |
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Accounts payable | — | | | — | | | 271 | | | 176 | | | — | | | 447 | |
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Accrued liabilities and other | — | | | — | | | 192 | | | 126 | | | — | | | 318 | |
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Total current liabilities | — | | | — | | | 1,050 | | | 804 | | | (1,054 | ) | | 800 | |
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Long-term debt | — | | | — | | | 5,758 | | | — | | | — | | | 5,758 | |
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Inter-company note payable | 43 | | | 119 | | | — | | | 119 | | | (281 | ) | | — | |
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Other liabilities | — | | | — | | | 208 | | | 185 | | | — | | | 393 | |
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Total liabilities | 43 | | | 119 | | | 7,016 | | | 1,108 | | | (1,335 | ) | | 6,951 | |
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Total shareholders’ (deficit) equity | (3,851 | ) | | (3,986 | ) | | (3,986 | ) | | 1,448 | | | 6,524 | | | (3,851 | ) |
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Total Liabilities and Shareholders’ (Deficit) Equity | $ | (3,808 | ) | | $ | (3,867 | ) | | $ | 3,030 | | | $ | 2,556 | | | $ | 5,189 | | | $ | 3,100 | |
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Supplemental Condensed Consolidating Balance Sheet |
31-Dec-13 |
(in millions) | Freescale Ltd. | | Guarantors | | Freescale Inc. | | Non-Guarantors | | Eliminations | | Consolidated |
Assets | | | | | | | | | | | |
Cash and cash equivalents | $ | 1 | | | $ | — | | | $ | 235 | | | $ | 511 | | | $ | — | | | $ | 747 | |
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Inter-company receivable | 169 | | | — | | | 445 | | | 504 | | | (1,118 | ) | | — | |
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Accounts receivable, net | — | | | — | | | 91 | | | 297 | | | — | | | 388 | |
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Inventory, net | — | | | — | | | 276 | | | 457 | | | — | | | 733 | |
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Other current assets | — | | | — | | | 74 | | | 53 | | | — | | | 127 | |
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Total current assets | 170 | | | — | | | 1,121 | | | 1,822 | | | (1,118 | ) | | 1,995 | |
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Property, plant and equipment, net | — | | | — | | | 327 | | | 354 | | | — | | | 681 | |
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Investment in affiliates | (4,721 | ) | | (4,721 | ) | | 1,364 | | | — | | | 8,078 | | | — | |
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Intangible assets, net | — | | | — | | | 52 | | | — | | | — | | | 52 | |
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Inter-company note receivable | — | | | 118 | | | — | | | 161 | | | (279 | ) | | — | |
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Other assets, net | — | | | — | | | 156 | | | 163 | | | — | | | 319 | |
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Total Assets | $ | (4,551 | ) | | $ | (4,603 | ) | | $ | 3,020 | | | $ | 2,500 | | | $ | 6,681 | | | $ | 3,047 | |
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Liabilities and Shareholders’ (Deficit) Equity | | | | | | | | | | | |
Current portion of long-term debt and capital lease obligations | $ | — | | | $ | — | | | $ | 93 | | | $ | — | | | $ | — | | | $ | 93 | |
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Inter-company payable | — | | | — | | | 565 | | | 553 | | | (1,118 | ) | | — | |
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Accounts payable | — | | | — | | | 241 | | | 157 | | | — | | | 398 | |
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Accrued liabilities and other | — | | | — | | | 245 | | | 126 | | | — | | | 371 | |
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Total current liabilities | — | | | — | | | 1,144 | | | 836 | | | (1,118 | ) | | 862 | |
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Long-term debt | — | | | — | | | 6,386 | | | — | | | — | | | 6,386 | |
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Inter-company note payable | 43 | | | 118 | | | — | | | 118 | | | (279 | ) | | — | |
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Other liabilities | — | | | — | | | 211 | | | 182 | | | — | | | 393 | |
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Total liabilities | 43 | | | 118 | | | 7,741 | | | 1,136 | | | (1,397 | ) | | 7,641 | |
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Total shareholders’ (deficit) equity | (4,594 | ) | | (4,721 | ) | | (4,721 | ) | | 1,364 | | | 8,078 | | | (4,594 | ) |
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Total Liabilities and Shareholders’ (Deficit) Equity | $ | (4,551 | ) | | $ | (4,603 | ) | | $ | 3,020 | | | $ | 2,500 | | | $ | 6,681 | | | $ | 3,047 | |
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Supplemental Condensed Consolidating Statement of Cash Flows |
For the Three Months Ended April 4, 2014 |
(in millions) | Freescale Ltd. | | Guarantors | | Freescale Inc. | | Non-Guarantors | | Eliminations | | Consolidated |
Cash flow provided by (used for) operating activities | $ | 12 | | | $ | — | | | $ | (73 | ) | | $ | 87 | | | $ | — | | | $ | 26 | |
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Cash flows from investing activities: | | | | | | | | | | | |
Purchases of property, plant and equipment | — | | | — | | | (26 | ) | | (30 | ) | | — | | | (56 | ) |
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Proceeds from the sale of property, plant and equipment | — | | | — | | | — | | | — | | | — | | | — | |
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Payments for purchased licenses and other assets | — | | | — | | | (10 | ) | | (10 | ) | | — | | | (20 | ) |
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Sales and purchases of short-term and other investments, net | — | | | — | | | 1 | | | — | | | — | | | 1 | |
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Inter-company loans and capital transactions | (750 | ) | | (751 | ) | | — | | | (1 | ) | | 1,502 | | | — | |
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Cash flow used for investing activities | (750 | ) | | (751 | ) | | (35 | ) | | (41 | ) | | 1,502 | | | (75 | ) |
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Cash flows from financing activities: | | | | | | | | | | | |
Retirements of and payments for long-term debt and capital lease obligations | — | | | — | | | (1,324 | ) | | — | | | — | | | (1,324 | ) |
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Debt issuance proceeds, net of debt issuance costs | — | | | — | | | 590 | | | — | | | — | | | 590 | |
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Proceeds from equity offering, net of offering costs | 717 | | | — | | | — | | | — | | | — | | | 717 | |
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Proceeds from stock option exercises and ESPP share purchases | 23 | | | — | | | — | | | — | | | — | | | 23 | |
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Excess tax benefits from share-based compensation plans | — | | | — | | | 4 | | | — | | | — | | | 4 | |
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Inter-company loans, dividends and capital transactions | — | | | 751 | | | 750 | | | 1 | | | (1,502 | ) | | — | |
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Cash flow provided by financing activities | 740 | | | 751 | | | 20 | | | 1 | | | (1,502 | ) | | 10 | |
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Effect of exchange rate changes on cash and cash equivalents | — | | | — | | | — | | | 1 | | | — | | | 1 | |
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Net increase (decrease) in cash and cash equivalents | 2 | | | — | | | (88 | ) | | 48 | | | — | | | (38 | ) |
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Cash and cash equivalents, beginning of period | 1 | | | — | | | 235 | | | 511 | | | — | | | 747 | |
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Cash and cash equivalents, end of period | $ | 3 | | | $ | — | | | $ | 147 | | | $ | 559 | | | $ | — | | | $ | 709 | |
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Supplemental Condensed Consolidating Statement of Cash Flows |
For the Three Months Ended March 29, 2013 |
(in millions) | Freescale Ltd. | | Guarantors | | Freescale Inc. | | Non-Guarantors | | Eliminations | | Consolidated |
Cash flow (used for) provided by operating activities | $ | (4 | ) | | $ | — | | | $ | 47 | | | $ | 127 | | | $ | (100 | ) | | $ | 70 | |
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Cash flows from investing activities: | | | | | | | | | | | |
Purchases of property, plant and equipment | — | | | — | | | (11 | ) | | (11 | ) | | — | | | (22 | ) |
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Proceeds from the sale of property, plant and equipment | — | | | — | | | — | | | 5 | | | — | | | 5 | |
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Payments for purchased licenses and other assets | — | | | — | | | (8 | ) | | (8 | ) | | — | | | (16 | ) |
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Sales and purchases of short-term and other investments, net | — | | | — | | | — | | | — | | | — | | | — | |
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Inter-company loans and capital transactions | (15 | ) | | (16 | ) | | — | | | (1 | ) | | 32 | | | — | |
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Cash flow used for investing activities | (15 | ) | | (16 | ) | | (19 | ) | | (15 | ) | | 32 | | | (33 | ) |
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Cash flows from financing activities: | | | | | | | | | | | |
Retirements of and payments for long-term debt and capital lease obligations | — | | | — | | | (2,711 | ) | | — | | | — | | | (2,711 | ) |
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Debt issuance proceeds, net of debt issuance costs | — | | | — | | | 2,707 | | | — | | | — | | | 2,707 | |
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Proceeds from stock option exercises and ESPP share purchases | 27 | | | — | | | — | | | — | | | — | | | 27 | |
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Inter-company loans, dividends and capital transactions | — | | | 16 | | | 15 | | | (99 | ) | | 68 | | | — | |
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Cash flow provided by (used for) financing activities | 27 | | | 16 | | | 11 | | | (99 | ) | | 68 | | | 23 | |
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Effect of exchange rate changes on cash and cash equivalents | — | | | — | | | — | | | (4 | ) | | — | | | (4 | ) |
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Net increase in cash and cash equivalents | 8 | | | — | | | 39 | | | 9 | | | — | | | 56 | |
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Cash and cash equivalents, beginning of period | 1 | | | — | | | 104 | | | 606 | | | — | | | 711 | |
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Cash and cash equivalents, end of period | $ | 9 | | | $ | — | | | $ | 143 | | | $ | 615 | | | $ | — | | | $ | 767 | |
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