• On October 27, 2016 Qualcomm, Incorporated (NASDAQ:QCOM) and NXP Semiconductors N.V. (NASDAQ:NXPI) announced a definitive agreement, unanimously approved by the boards of directors of both companies, under which Qualcomm will acquire NXP. Under the terms of the definitive agreement, a subsidiary of Qualcomm will commence a tender offer to acquire all the issued and outstanding shares of NXP for $110.00 per share in cash. The tender offer commenced on November 18, 2016.
• As of December 31, 2016, SSMC, NXP’s consolidated joint-venture wafer fab with TSMC, reported fourth quarter 2016 operating income of $46 million, EBITDA of $59 million and a closing cash balance of $316 million. For the full year 2016, SSMC reported operating income of $151 million and EBITDA of $206 million.
• During the fourth quarter of 2016
  - NXP combined wafer-fab utilization averaged 92 percent, as compared to 93 percent in the prior quarter.
  - Working capital metrics inclusive of assets and liabilities held for sale on the balance sheet were:
  -- Days of inventory was 101 days, flat sequentially versus the third quarter;
  -- Days payable was 83 days, an increase from 74 days in the third quarter;
  -- Days sales was 39 days, a decline from 43 days in the third quarter; and
  -- The cash conversion cycle was 57 days, a decline from the 70 days in the third quarter.
  - Channel inventory held by NXP’s distribution partners was 2.4 months as compared to 2.5 months in the third quarter.  Sales into the channel were down 1 percent, sales out of the channel were up 4 percent and total channel inventory on a dollar basis was down 1 percent.
  - Cash flow from operations was $737 million, an increase from the $718 million in the third quarter. Net capital expenditures on property, plant and equipment was $131 million, an increase from the $98 million in the third quarter. Non-GAAP free cash flow, defined as cash flow from operations, less net capital expenditures on property, plant and equipment was $606 million, a decline from the $620 million in the third quarter.
  - Total gross debt was $9.19 billion, a decline from the $9.38 billion in the third quarter. Cash was $1.89 billion, an increase from the $1.57 billion in the third quarter, resulting in net debt of $7.29 billion, a decline from the $7.81 billion in the third quarter. Trailing twelve months, adjusted EBITDA was $2.98 billion, an increase from $2.66 billion in the third quarter. Financial leverage, defined as net debt divided by trailing twelve months, adjusted EBITDA was 2.45x, an improvement from 2.93x in the third quarter.
  - NXP repurchased 0.6 million shares for a total cost of $62 million.  Weighted average number of diluted shares (after deduction of treasury shares) for the three-month period ended December 31, 2016 was 343.5 million. For the full year 2016, ended December 31, 2016, NXP repurchased 15.54 million shares for a total cost of $1.28 billion.  The weighted average number of diluted shares (after deduction of treasury shares) was 338.5 million. As the company reported a full-year GAAP net loss, it excludes the incremental impact of dilutive potential common shares of 9.4 million.  Due to the pending acquisition by Qualcomm, NXP has suspended its open market share repurchases.
  - Net cash paid for interest was $109 million and the net cash paid for income taxes was $16 million. For the full year 2016, ended December 31, 2016 net cash paid for interest was $348 million, and net cash paid for income taxes was $67 million.

Supplemental Information ($ millions, unaudited) ^{(1, 2, 3, 4)}