Guarantor and Non-Guarantor Statements

ON Semiconductor is the sole issuer of the 2.625% Notes, Series B. ON Semiconductor’s 100% owned domestic subsidiaries, except those domestic subsidiaries acquired through the acquisitions of AMIS, Catalyst, PulseCore, CMD, SDT, SANYO Semiconductor and Truesense (collectively, the “Guarantor Subsidiaries”), fully and unconditionally guarantee, subject to customary releases, on a joint and several basis ON Semiconductor’s obligations under the 2.625% Notes, Series B. The Guarantor Subsidiaries include SCI LLC, Semiconductor Components Industries of Rhode Island, Inc., as well as other holding companies whose net assets consist primarily of investments in the joint venture in Leshan, China and equity interests in the Company’s other foreign subsidiaries. ON Semiconductor’s other remaining subsidiaries (collectively, the “Non-Guarantor Subsidiaries”) are not guarantors of the 2.625% Notes, Series B. The repayment of the unsecured 2.625% Notes, Series B is subordinated to the senior indebtedness of ON Semiconductor and the Guarantor Subsidiaries on the terms described in the indenture for the 2.625% Notes, Series B.

Condensed consolidating financial information for the issuer of the 2.625% Notes, Series B, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries is as follows (in millions):

CONDENSED CONSOLIDATING BALANCE SHEET AS OF JUNE 27, 2014 (in millions)

	Issuer			Guarantor
	ON Semiconductor Corporation			SCI LLC			Other Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total

Cash and cash equivalents	$	—		$	302.8		$	—		$	296.1		$	—		$	598.9
Short-term investments	—			2.3			—			—			—			2.3
Receivables, net	—			59.2			—			378.1			—			437.3
Inventories	—			47.5			—			582.3			2.8			632.6
Short-term intercompany receivables	—			—			4.7			67.6			(72.3		)	—
Other current assets	—			24.0			—			66.5			—			90.5
Total current assets	—			435.8			4.7			1,390.6			(69.5		)	1,761.6
Property, plant and equipment, net	—			255.9			3.1			884.3			(1.6		)	1,141.7
Goodwill	—			111.6			37.3			62.7			—			211.6
Intangible assets, net	—			105.5			—			159.7			(19.7		)	245.5
Long-term intercompany receivables	—			—			—			1.8			(1.8		)	—
Other assets	1,945.6			1,921.0			136.3			831.6			(4,776.5		)	58.0
Total assets	$	1,945.6		$	2,829.8		$	181.4		$	3,330.7		$	(4,869.1	)	$	3,418.4
Accounts payable	$	—		$	37.2		$	0.1		$	268.1		$	—		$	305.4
Accrued expenses	0.3			61.5			0.5			169.6			—			231.9
Deferred income on sales to distributors	—			38.6			—			124.0			—			162.6
Current portion of long-term debt	—			67.8			—			101.6			—			169.4
Short-term intercompany payables	—			72.3			—			—			(72.3		)	—
Total current liabilities	0.3			277.4			0.6			663.3			(72.3		)	869.3
Long-term debt	338.6			372.3			—			24.6			—			735.5
Other long-term liabilities	—			20.5			0.1			153.5			—			174.1
Long-term intercompany payables	—			1.8			—			—			(1.8		)	—
Total liabilities	338.9			672.0			0.7			841.4			(74.1		)	1,778.9
Common stock	5.2			24.6			50.9			173.9			(249.4		)	5.2
Additional paid-in capital	3,250.6			2,370.6			260.1			1,497.7			(4,128.4		)	3,250.6
Accumulated other comprehensive loss	(45.3		)	(46.9		)	—			(39.2		)	86.1			(45.3		)
Accumulated deficit	(995.7		)	(190.5		)	(130.3		)	856.9			(536.1		)	(995.7		)
Less: treasury stock, at cost	(608.1		)	—			—			—			—			(608.1		)
Total ON Semiconductor Corporation stockholders’ equity	1,606.7			2,157.8			180.7			2,489.3			(4,827.8		)	1,606.7
Non-controlling interest in consolidated subsidiary	—			—			—			—			32.8			32.8
Total equity	1,606.7			2,157.8			180.7			2,489.3			(4,795.0		)	1,639.5
Total liabilities and equity	$	1,945.6		$	2,829.8		$	181.4		$	3,330.7		$	(4,869.1	)	$	3,418.4

CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2013 (in millions)

	Issuer			Guarantor
	ON Semiconductor Corporation			SCI LLC			Other Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total

Cash and cash equivalents	$	—		$	267.9		$	—		$	241.6		$	—		$	509.5
Short-term investments	—			116.2			—			—			—			116.2
Receivables, net	—			49.8			—			333.6			—			383.4
Inventories	—			46.7			—			562.1			3.0			611.8
Short-term intercompany receivables	—			—			4.1			7.6			(11.7		)	—
Other current assets	—			17.8			—			71.5			—			89.3
Total current assets	—			498.4			4.1			1,216.4			(8.7		)	1,710.2
Property, plant and equipment, net	—			252.3			3.1			820.6			(1.8		)	1,074.2
Goodwill	—			111.5			37.3			35.8			—			184.6
Intangible assets, net	—			113.0			—			132.2			(21.8		)	223.4
Long-term intercompany receivables	—			—			—			3.3			(3.3		)	—
Other assets	1,790.2			1,600.6			136.1			837.3			(4,299.6		)	64.6
Total assets	$	1,790.2		$	2,575.8		$	180.6		$	3,045.6		$	(4,335.2	)	$	3,257.0
Accounts payable	$	—		$	39.1		0.5			237.2			—			$	276.8
Accrued expenses	1.0			50.8			0.2			168.3			—			220.3
Deferred income on sales to distributors	—			32.3			—			108.2			—			140.5
Current portion of long-term debt	—			79.3			—			102.3			—			181.6
Short-term intercompany payables	—			11.7			—			—			(11.7		)	—
Total current liabilities	1.0			213.2			0.7			616.0			(11.7		)	819.2
Long-term debt	335.2			396.1			—			29.3			—			760.6
Other long-term liabilities	—			42.2			0.1			148.1			—			190.4
Long-term intercompany payables	—			3.3			—			—			(3.3		)	—
Total liabilities	336.2			654.8			0.8			793.4			(15.0		)	1,770.2
Common stock	5.2			0.3			50.9			201.6			(252.8		)	5.2
Additional paid-in capital	3,210.8			2,335.1			259.8			1,402.6			(3,997.5		)	3,210.8
Accumulated other comprehensive loss	(47.4		)	(49.2		)	—			(38.6		)	87.8			(47.4		)
Accumulated deficit	(1,142.1		)	(365.2		)	(130.9		)	686.6			(190.5		)	(1,142.1		)
Less: treasury stock, at cost	(572.5		)	—			—			—			—			(572.5		)
Total ON Semiconductor Corporation stockholders’ equity	1,454.0			1,921.0			179.8			2,252.2			(4,353.0		)	1,454.0
Non-controlling interest in consolidated subsidiary	—			—			—			—			32.8			32.8
Total equity	1,454.0			1,921.0			179.8			2,252.2			(4,320.2		)	1,486.8
Total liabilities and equity	$	1,790.2		$	2,575.8		$	180.6		$	3,045.6		$	(4,335.2	)	$	3,257.0

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE QUARTER ENDED JUNE 27, 2014 (in millions)

	Issuer			Guarantor Subsidiaries
	ON Semiconductor Corporation			SCI LLC			Other Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total

Revenues	$	—		$	177.2		$	4.0		$	1,050.1		$	(473.7	)	$	757.6
Cost of revenues	—			142.9			0.3			816.3			(474.9		)	484.6
Gross profit	—			34.3			3.7			233.8			1.2			273.0
Operating expenses:
Research and development	—			13.2			2.9			68.1			—			84.2
Selling and marketing	—			20.9			0.2			26.8			—			47.9
General and administrative	—			17.3			0.3			27.1			—			44.7
Amortization of acquisition related intangible assets	—			3.8			—			7.6			(1.0		)	10.4
Restructuring, asset impairments and other, net	—			0.9			—			3.2			—			4.1
Total operating expenses	—			56.1			3.4			132.8			(1.0		)	191.3
Operating income (loss)	—			(21.8		)	0.3			101.0			2.2			81.7
Other income (expense), net:
Interest expense	(4.2		)	(3.1		)	—			(0.6		)	—			(7.9		)
Interest income	—			—			—			0.2			—			0.2
Other	—			1.5			—			(2.7		)	—			(1.2		)
Equity in earnings	92.2			97.1			2.3			—			(191.6		)	—
Other income (expense), net	88.0			95.5			2.3			(3.1		)	(191.6		)	(8.9		)
Income before income taxes	88.0			73.7			2.6			97.9			(189.4		)	72.8
Income tax benefit (provision)	—			18.9			(0.3		)	(2.4		)	—			16.2
Net income	88.0			92.6			2.3			95.5			(189.4		)	89.0
Net income attributable to non-controlling interest	—			—			—			—			(1.0		)	(1.0		)
Net income attributable to ON Semiconductor Corporation	$	88.0		$	92.6		$	2.3		$	95.5		$	(190.4	)	$	88.0
Comprehensive income attributable to ON Semiconductor Corporation	$	89.1		$	93.9		$	2.3		$	95.3		$	(191.5	)	$	89.1

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE QUARTER ENDED JUNE 28, 2013 (in millions)

	Issuer			Guarantor Subsidiaries
	ON Semiconductor Corporation			SCI LLC			Other Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total

Revenues	$	—		$	150.2		$	3.2	$	1,086.3		$	(551.4	)	$	688.3
Cost of revenues	—			121.2			—		891.8			(556.5		)	456.5
Gross profit	—			29.0			3.2		194.5			5.1			231.8
Operating expenses:
Research and development	—			12.3			2.7		68.1			—			83.1
Selling and marketing	—			18.0			0.2		25.1			—			43.3
General and administrative	—			11.0			0.2		29.0			—			40.2
Amortization of acquisition related intangible assets	—			3.8			—		5.4			(1.0		)	8.2
Restructuring, asset impairments and other, net	—			—			—		6.1			—			6.1
Total operating expenses	—			45.1			3.1		133.7			(1.0		)	180.9
Operating income (loss)	—			(16.1		)	0.1		60.8			6.1			50.9
Other income (expense), net:
Interest expense	(5.6		)	(2.5		)	—		(1.2		)	—			(9.3		)
Interest income	—			—			—		0.4			—			0.4
Other	—			(13.3		)	—		17.4			—			4.1
Equity in earnings	53.3			79.8			2.5		0.1			(135.7		)	—
Other income (expense), net	47.7			64.0			2.5		16.7			(135.7		)	(4.8		)
Income before income taxes	47.7			47.9			2.6		77.5			(129.6		)	46.1
Income tax (provision) benefit	—			(3.1		)	—		5.7			—			2.6
Net income	47.7			44.8			2.6		83.2			(129.6		)	48.7
Net income attributable to non-controlling interest	—			—			—		—			(1.0		)	(1.0		)
Net income attributable to ON Semiconductor Corporation	$	47.7		$	44.8		$	2.6	$	83.2		$	(130.6	)	$	47.7
Comprehensive income attributable to ON Semiconductor Corporation	$	47.0		$	43.2		$	2.6	$	85.7		$	(131.5	)	$	47.0

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED JUNE 27, 2014 (in millions)

	Issuer			Guarantor Subsidiaries
	ON Semiconductor Corporation			SCI LLC			Other Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total

Revenues	$	—		$	347.2		$	7.9		$	2,024.2		$	(915.2	)	$	1,464.1
Cost of revenues	—			282.3			0.5			1,573.0			(915.5		)	940.3
Gross profit	—			64.9			7.4			451.2			0.3			523.8
Operating expenses:
Research and development	—			25.4			5.9			131.0			—			162.3
Selling and marketing	—			40.2			0.4			51.7			—			92.3
General and administrative	—			30.5			0.6			54.6			—			85.7
Amortization of acquisition related intangible assets	—			7.5			—			13.1			(2.0		)	18.6
Restructuring, asset impairments and other, net	—			1.3			—			8.6			—			9.9
Total operating expenses	—			104.9			6.9			259.0			(2.0		)	368.8
Operating income (loss)	—			(40.0		)	0.5			192.2			2.3			155.0
Other income (expense), net:
Interest expense	(8.2		)	(6.6		)	—			(1.2		)	—			(16.0		)
Interest income	—			0.1			—			0.3			—			0.4
Other	—			0.9			—			(2.7		)	—			(1.8		)
Equity in earnings	154.6			195.7			2.9			—			(353.2		)	—
Other income (expense), net	146.4			190.1			2.9			(3.6		)	(353.2		)	(17.4		)
Income before income taxes	146.4			150.1			3.4			188.6			(350.9		)	137.6
Income tax benefit (provision)	—			24.6			(0.3		)	(14.3		)	—			10.0
Net income	146.4			174.7			3.1			174.3			(350.9		)	147.6
Net income attributable to non-controlling interest	—			—			—			—			(1.2		)	(1.2		)
Net income attributable to ON Semiconductor Corporation	$	146.4		$	174.7		$	3.1		$	174.3		$	(352.1	)	$	146.4
Comprehensive income attributable to ON Semiconductor Corporation	$	148.5		$	177.2		$	3.1		$	173.7		$	(354.0	)	$	148.5

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED JUNE 28, 2013 (in millions)

	Issuer			Guarantor Subsidiaries
	ON Semiconductor Corporation			SCI LLC			Other Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total

Revenues	$	—		$	328.3		$	6.4	$	2,034.1		$	(1,019.5	)	$	1,349.3
Cost of revenues	—			233.5			0.2		1,711.0			(1,031.7		)	913.0
Gross profit	—			94.8			6.2		323.1			12.2			436.3
Operating expenses:
Research and development	—			53.9			5.2		112.4			—			171.5
Selling and marketing	—			34.7			0.3		48.1			—			83.1
General and administrative	—			16.1			0.4		59.9			—			76.4
Amortization of acquisition related intangible assets	—			7.6			—		11.0			(2.0		)	16.6
Restructuring, asset impairments and other, net	—			1.0			—		(0.9		)	—			0.1
Total operating expenses	—			113.3			5.9		230.5			(2.0		)	347.7
Operating income (loss)	—			(18.5		)	0.3		92.6			14.2			88.6
Other income (expense), net:
Interest expense	(11.7		)	(4.9		)	—		(2.8		)	—			(19.4		)
Interest income	—			0.2			—		0.5			—			0.7
Other	—			(5.5		)	—		10.5			—			5.0
Loss on debt exchange	(3.1		)	—			—		—			—			(3.1		)
Equity in earnings	85.1			104.7			4.1		—			(193.9		)	—
Other income (expense), net	70.3			94.5			4.1		8.2			(193.9		)	(16.8		)
Income before income taxes	70.3			76.0			4.4		100.8			(179.7		)	71.8
Income tax (provision) benefit	—			(0.9		)	—		1.1			—			0.2
Net income	70.3			75.1			4.4		101.9			(179.7		)	72.0
Net income attributable to non-controlling interest	—			—			—		—			(1.7		)	(1.7		)
Net income attributable to ON Semiconductor Corporation	$	70.3		$	75.1		$	4.4	$	101.9		$	(181.4	)	$	70.3
Comprehensive income attributable to ON Semiconductor Corporation	$	60.3		$	63.0		$	4.4	$	95.8		$	(163.2	)	$	60.3

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 27, 2014 (in millions)

	Issuer			Guarantor Subsidiaries
	ON Semiconductor Corporation			SCI LLC			Other Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total

Net cash provided by operating activities	$	—		$	14.1		$	0.7		$	215.2		$	(3.5	)	$	226.5
Cash flows from investing activities:
Purchases of property, plant and equipment	—			(29.0		)	(0.7		)	(66.8		)	—			(96.5		)
Proceeds from sales of property, plant and equipment	—			—			—			0.2			—			0.2
Deposits utilized for purchases of property, plant and equipment	—			—			—			1.3			—			1.3
Purchase of businesses, net of cash acquired	—			—			—			(90.9		)	—			(90.9		)
Proceeds from held-to maturity securities	—			116.2			—			—			—			116.2
Purchases of held-to-maturity securities	—			(2.3		)	—			—			—			(2.3		)
Contribution from subsidiaries	18.3			—			—			—			(18.3		)	—
Net cash provided by (used in) investing activities	18.3			84.9			(0.7		)	(156.2		)	(18.3		)	(72.0		)
Cash flows from financing activities:
Intercompany loans	—			(65.3		)	—			65.3			—			—
Intercompany loan repayments to guarantor	—			65.5			—			(65.5		)	—			—
Payments to parent	—			(23.0		)	—			—			23.0			—
Proceeds from issuance of common stock under the employee stock purchase plan	2.5			—			—			—			—			2.5
Proceeds from exercise of stock options	15.4			—			—			—			—			15.4
Payments of tax withholding for restricted shares	(5.4		)	—			—			—			—			(5.4		)
Repurchase of common stock	(30.8		)	—			—			—			—			(30.8		)
Proceeds from debt issuance	—			—			—			15.0			—			15.0
Payment of capital leases obligations	—			(19.2		)	—			(1.8		)	—			(21.0		)
Repayment of long-term debt	—			(22.1		)	—			(18.6		)	—			(40.7		)
Dividend to non-controlling shareholder of consolidated subsidiary	—			—			—			—			(1.2		)	(1.2		)
Net cash used in financing activities	(18.3		)	(64.1		)	—			(5.6		)	21.8			(66.2		)
Effect of exchange rate changes on cash and cash equivalents	—			—			—			1.1			—			1.1
Net increase in cash and cash equivalents	—			34.9			—			54.5			—			89.4
Cash and cash equivalents, beginning of period	—			267.9			—			241.6			—			509.5
Cash and cash equivalents, end of period	$	—		$	302.8		$	—		$	296.1		$	—		$	598.9

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 28, 2013 (in millions)

	Issuers			Guarantor Subsidiaries
	ON Semiconductor Corporation			SCI LLC			Other Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total

Net cash (used in) provided by operating activities	$	—		$	(5.5	)	$	—	$	151.5		$	(5.6	)	$	140.4
Cash flows from investing activities:
Purchases of property, plant and equipment	—			(16.3		)	—		(68.4		)	—			(84.7		)
Proceeds from sales of property, plant and equipment	—			0.1			—		8.3			—			8.4
Deposits utilized for purchases of property, plant and equipment	—			—			—		(1.5		)	—			(1.5		)
Proceeds from held-to maturity securities	—			124.2			—		—			—			124.2
Purchase of held-to-maturity securities	—			(162.3		)	—		—			—			(162.3		)
Contribution from subsidiaries	80.4			—			—		—			(80.4		)	—
Net cash provided by (used in) investing activities	80.4			(54.3		)	—		(61.6		)	(80.4		)	(115.9		)
Cash flows from financing activities:
Intercompany loans	—			(403.7		)	—		403.7			—			—
Intercompany loan repayments to guarantor	—			539.6			—		(539.6		)	—			—
Payments to parent	—			(86.0		)	—		—			86.0			—
Proceeds from issuance of common stock under the employee stock purchase plan	2.1			—			—		—			—			2.1
Proceeds from exercise of stock options	6.6			—			—		—			—			6.6
Payments of tax withholding for restricted shares	(2.2		)	—			—		—			—			(2.2		)
Repurchase of common stock	(9.4		)	—			—		—			—			(9.4		)
Proceeds from debt issuance	—			—			—		26.2			—			26.2
Payment of capital leases obligations	—			(19.7		)	—		(2.1		)	—			(21.8		)
Repayment of long-term debt	(77.5		)	(3.0		)	—		(27.1		)	—			(107.6		)
Net cash (used in) provided by financing activities	(80.4		)	27.2			—		(138.9		)	86.0			(106.1		)
Effect of exchange rate changes on cash and cash equivalents	—			—			—		(9.2		)	—			(9.2		)
Net increase (decrease) in cash and cash equivalents	—			(32.6		)	—		(58.2		)	—			(90.8		)
Cash and cash equivalents, beginning of period	—			212.1			—		274.8			—			486.9
Cash and cash equivalents, end of period	$	—		$	179.5		$	—	$	216.6		$	—		$	396.1

See also Note 10: “Commitments and Contingencies—Financing Contingencies” for discussion certain of the Company’s guarantees.