Additional Information for the Second Quarter 2017:
- 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.
- Total gross debt was $6.55 billion, an increase from the $6.51 billion in the first quarter. Cash was $2.64 billion, an increase from the $2.24 billion in the first quarter, resulting in net debt of $3.91 billion, a decline from the $4.27 billion in the first quarter. Trailing twelve months, adjusted EBITDA was $3.07 billion, an increase from $3.06 billion in the first quarter. Financial leverage, defined as net debt divided by trailing twelve months adjusted EBITDA was 1.27x, an improvement from 1.40x in the first quarter.
- Cash flow from operations was $441 million, a decline from the $625 million in the first quarter. Net capital expenditures on property, plant and equipment was $96 million, a decline from the $161 million in the first quarter. Non-GAAP free cash flow, defined as cash flow from operations, less net capital expenditures on property, plant and equipment was $345 million, a decline from the $464 million in the first quarter.
- NXP repurchased 96 thousand shares for a total cost of $10 million. Weighted average number of diluted shares (after deduction of treasury shares) for the three-month period ended July 2, 2017 was 345 million. Due to the pending acquisition by Qualcomm, NXP has suspended its open market share repurchases. Shares are currently only repurchased in relation to employee equity award transactions.
- Net cash paid for interest was $84 million.
- Net cash paid for income taxes related to on-going operations was $32 million, with an additional $87 million paid related to the divestment of the Standard Products business, for a total of $119 million.
- SSMC, NXP’s consolidated joint-venture wafer fab with TSMC, reported second quarter 2017 operating income of $36million, EBITDA of $49 million and a closing cash balance of $410 million.
- NXP combined wafer-fab utilization averaged 94 percent, as compared to 95 percent in the prior quarter.
- Working capital metrics inclusive of assets and liabilities held for sale on the balance sheet were:
- Days of inventory was 103 days, an increase of 6 days sequentially versus the first quarter;
- Days payable was 93 days, an increase of 10 days sequentially from the first quarter
- Days sales was 38 days a decline of 3 days sequentially from the first quarter; and
- The cash conversion cycle was 48 days, a decline of 7 days from the first quarter. - Channel inventory held by NXP’s distribution partners was 2.3 months as compared to 2.2 months in the first quarter. Reconciling for the divestment of the Standard Products business, sales into the distribution channel was up 12 percent, sales out of the distribution channel was up 4 percent and total distribution channel inventory on a dollar basis was up 11 percent.
Supplemental Information ($ millions, unaudited)
| Q2 2017 | Q1 2017 | Q2 2016 | Q-Q | Y-Y | |||||||||||||||
| Automotive | $ | 938 | $ | 906 | $ | 858 | 4 | % | 9 | % | |||||||||
| Secure Identification Solutions (SIS) | $ | 134 | $ | 114 | $ | 200 | 18 | % | -33 | % | |||||||||
| Secure Connected Devices (SCD) | $ | 588 | $ | 541 | $ | 514 | 9 | % | 14 | % | |||||||||
| Secure Interface & Infrastructure (SI&I) | $ | 438 | $ | 450 | $ | 442 | -3 | % | -1 | % | |||||||||
| High Performance Mixed Signal (HPMS) | $ | 2,098 | $ | 2,011 | $ | 2,014 | 4 | % | 4 | % | |||||||||
| Standard Products (STDP) | $ | - | $ | 118 | $ | 303 | -100 | % | -100 | % | |||||||||
| Product Revenue | $ | 2,098 | $ | 2,129 | $ | 2,317 | -1 | % | -9 | % | |||||||||
| Corporate & Other | $ | 104 | $ | 82 | $ | 48 | 27 | % | 117 | % | |||||||||
| Total Revenue | $ | 2,202 | $ | 2,211 | $ | 2,365 | 0 | % | -7 | % | |||||||||
