Additional Information for the Second Quarter 2018 :

• Total gross debt was $5.34 billion, down from the $6.58 billion at the end of the first quarter of 2018, and down from the $6.55 billion at the end of the second quarter of 2017. Cash was $2.98 billion, a decrease from the $3.98 billion at the end of the first quarter of 2018, and an increase from the $2.64 billion at the end of the second quarter of 2017.  The decrease in gross debt and cash was due to the redemption of the 3.75 percent June 2018 $750 million and the 5.75 percent March 2023 $500 million senior unsecured notes.  Net debt at the end of the second quarter was $2.36 billion, an improvement from the $2.60 billion at the end of the first quarter of 2018, and from the $3.91 billion at the end of the second quarter of 2017. Trailing twelve months, adjusted EBITDA was $3.18 billion, flat sequentially from $3.18 billion at the end of the first quarter of 2018, and an increase from $3.07 billion at the end of the second quarter of 2017. Financial leverage, defined as net debt divided by trailing twelve months adjusted EBITDA was 0.74x, an improvement from 0.82x at the end of the first quarter of 2018, and an improvement from 1.27x reported at the end of the second quarter of 2017.
   
• Cash flow from operations was $403 million, a decrease from the $620 million at the end of the first quarter of 2018, driven by annual cash bonus payments, interest coupon on retired debt and income tax payments.  Cash flow from operations in the second quarter 2018 declined $38 million versus the second quarter of 2017 primarily due to lower receivables, higher inventory, and accounts payable differences. Net capital expenditures on property, plant and equipment was $129 million, a decrease from the $156 million at the end of the first quarter of 2018. Non-GAAP free cash flow, defined as cash flow from operations, less net capital expenditures on property, plant and equipment was $274 million, a decrease from the $464 million at the end of the first quarter of 2018.  
   
• During the second quarter NXP repurchased 0.02 million shares for a total cost of $2.3 million. Weighted average number of diluted shares (after deduction of treasury shares) for the three-month period ended July 1, 2018 was 347 million. Due to the pending acquisition by Qualcomm, NXP had suspended its open market share repurchases. Shares were only repurchased in relation to employee equity award transactions. 
   
• Net cash paid for interest was $75 million in the second quarter.
   
• Net cash paid for incomes taxes for the quarter was $3 million.  Cash paid for income taxes related to on-going operations was $56 million. Items not related to on-going operations resulted in cash received for income taxes of $53 million, which was from a refund of the 2017 pre-payments made for the divestment of the Standard Products business.
   
• In March 2018, NXP announced it had entered into a definitive agreement to sell its 40 percent equity interest of Suzhou ASEN Semiconductors Co., Ltd. to J&R Holding Limited. NXP completed the sale of its equity interest on July 10, 2018, receiving $127 million in cash proceeds.   
   
• SSMC, NXP’s consolidated joint-venture wafer fab with TSMC, reported second quarter 2018 operating income of $31 million, EBITDA of $44 million and a closing cash balance of $250 million. 
   
• NXP combined wafer-fab utilization averaged 92 percent, as compared to 93 percent in the prior quarter, and 94 percent in the second quarter of 2017.
   
• Working capital metrics and channel inventory was:
  • Days of inventory held by NXP was 111 days, up 5 days sequentially versus the first quarter;
  • Days payable was 90 days, up 7 days sequentially from the first quarter;
  • Days sales was 31 days a decline of 1 day sequentially from the first quarter;
  • The cash conversion cycle was 52 days, an improvement of 3 days versus the first quarter;
  • Channel inventory held by NXP’s distribution partners was 2.4 months, flat on a sequential basis, and in line with NXPs long-term channel target of 2.5 months, plus or minus a half month;
    
    

Supplemental Information  for the Second Quarter 2018 ($ millions, unaudited)