8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

July 19, 2012

Date of report (Date of earliest event reported)

Integrated Device Technology, Inc.

(Exact name of registrant as specified in its charter)

Delaware	0-12695	94-2669985
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

6024 Silver Creek Valley Road, San Jose, California 95138

(Address of principal executive offices) (Zip Code)

(408) 284-8200

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01 Completion of Acquisition or Disposition of Assets.

This Current Report on Form 8-K/A (the “Amendment”) amends and supplements the Current Report on Form 8-K filed by Integrated Device Technology, Inc., a Delaware corporation (“IDT”), on July 20, 2012 (the “Initial 8-K”), in which IDT reported the completion of its acquisition (the “Transaction”) of certain assets related to technology and products developed for communications analog mixed-signal market applications (the “High Speed Data Converter Business”) from NXP B.V. (“NXP”). This Amendment is being filed to include the historical financial statements and pro forma financial information described in Item 9.01 below. The information previously reported in the Initial Form 8-K is incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

Historical audited statements of revenues and direct expenses of the High Speed Data Converter Business of NXP for the years ended December 31, 2010 and 2011, and historical audited statements of assets acquired and liabilities assumed of the High Speed Data Converter Business of NXP as of December 31, 2010 and 2011, and the notes related thereto, are filed as Exhibit 99.2 to this Amendment and are incorporated by reference herein. Pursuant to a request filed by IDT with the Securities and Exchange Commission (the “SEC”), the Staff of the SEC has noted that it would not object to the filing of these financial statements in satisfaction of Rule 3-05 of Regulation S-X.

(b) Pro Forma Financial Information.

Unaudited Pro Forma Condensed Combined Balance Sheet as of July 1, 2012 and Pro Forma Condensed Combined Statements of Operations for the year ended April 1, 2012 and the three months ended July 1, 2012, and the notes related thereto (collectively, the “Pro Forma Financials”), with respect to the Transaction referred to above are filed as Exhibit 99.3 to this Amendment and incorporated by reference herein. The Pro Forma Financials also include pro forma adjustments for IDT’s pending acquisition of PLX Technology, Inc., previously announced by IDT.

(d) Exhibits.

Exhibit No.	Description
2.1*	Business Purchase Agreement, dated as of February 22, 2012, by and between Integrated Device Technology, Inc. and NXP B.V.1,2
2.2*	Amendment No. 1 to Business Purchase Agreement, dated as of June 21, 2012, by and between Integrated Device Technology, Inc. and NXP B.V.1
2.3*	Amendment No. 2 to Business Purchase Agreement, dated as of July 19, 2012, by and between Integrated Device Technology, Inc. and NXP B.V.1,2
23.1	Consent of KPMG Accountants N.V., independent public registered accounting firm.
99.1*	Press Release, issued by Integrated Device Technology, Inc. on July 19, 2012, announcing the completion of the acquisition.
99.2	Historical audited Statements of Net Revenues and Direct Expenses of the High Speed Data Converter Business for the years ended December 31, 2010 and 2011, and historical audited Statement of Assets Acquired and Liabilities Assumed of the High Speed Data Converter Business as of December 31, 2010 and 2011, and the notes related thereto.
99.3	Unaudited Pro Forma Condensed Combined Balance Sheet as of July 1, 2012 and Unaudited Pro Forma Condensed Combined Statements of Operations for the year ended April 1, 2012 and the three months ended July 1, 2012, and the notes related thereto.

* Previously filed.

¹  Pursuant to Regulation S-K, Item 601(b)(2), certain schedules (and similar attachments) to this exhibit have not been filed herewith. A list of omitted schedules is included in the agreement. The registrant agrees to furnish a supplemental copy of any such omitted schedule (or similar attachment) to the Securities and Exchange Commission upon request; provided, however, that the registrant may request confidential treatment of omitted items.

²  Certain portions have been omitted pursuant to a confidential treatment request. Omitted information has been filed separately with the Securities and Exchange Commission.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 9, 2012	INTEGRATED DEVICE TECHNOLOGY, INC.
	By:	/s/ RICHARD D. CROWLEY, JR.
		Richard D. Crowley, Jr.
		Sr. Vice President, Chief Financial Officer
		(duly authorized officer)

EXHIBIT INDEX

Exhibit No.	Description
2.1*	Business Purchase Agreement, dated as of February 22, 2012, by and between Integrated Device Technology, Inc. and NXP B.V.1,2
2.2*	Amendment No. 1 to Business Purchase Agreement, dated as of June 21, 2012, by and between Integrated Device Technology, Inc. and NXP B.V.1
2.3*	Amendment No. 2 to Business Purchase Agreement, dated as of July 19, 2012, by and between Integrated Device Technology, Inc. and NXP B.V.1,2
23.1	Consent of KPMG Accountants N.V., independent public registered accounting firm.
99.1*	Press Release, issued by Integrated Device Technology, Inc. on July 19, 2012, announcing the completion of the acquisition.
99.2	Historical audited Statements of Net Revenues and Direct Expenses of the High Speed Data Converter Business for the years ended December 31, 2010 and 2011, and historical audited Statement of Assets Acquired and Liabilities Assumed of the High Speed Data Converter Business as of December 31, 2010 and 2011, and the notes related thereto.
99.3	Unaudited Pro Forma Condensed Combined Balance Sheet as of July 1, 2012 and Unaudited Pro Forma Condensed Combined Statements of Operations for the year ended April 1, 2012 and the three months ended July 1, 2012, and the notes related thereto.

* Previously filed.

¹  Pursuant to Regulation S-K, Item 601(b)(2), certain schedules (and similar attachments) to this exhibit have not been filed herewith. A list of omitted schedules is included in the agreement. The registrant agrees to furnish a supplemental copy of any such omitted schedule (or similar attachment) to the Securities and Exchange Commission upon request; provided, however, that the registrant may request confidential treatment of omitted items.

²  Certain portions have been omitted pursuant to a confidential treatment request. Omitted information has been filed separately with the Securities and Exchange Commission.

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the registration statements (Nos. 333-170748, 333-160687, 333-160501, 333-154776, 333-149751, 333-138205, 333-131423, 333-128376, 333-122231, 333-112148, 333-100978, 333-61742, 333-59162, 333-42446, 333-35124, 333-77559, 333-64279, 333-45245, 333-36601, 033-63133, and 033-54937) on Form S-8 of Integrated Device Technology Inc. (“IDT”) of our report dated August 8, 2012, with respect to the combined statements of assets acquired and liabilities assumed of the High Speed Data Converter Business, a component of NXP Semiconductors N.V., as of December 31, 2011 and 2010, and the related combined statements of revenues and direct expenses for the years then ended, which report appears in the Form 8-K/A of IDT dated July 19, 2012 and filed on August 9, 2012.

/s/ KPMG Accountants N.V.

Amstelveen, the Netherlands

August 8, 2012

EX-99.2

Exhibit 99.2

High Speed Data Converter Business,

a component of NXP Semiconductors N.V.

Combined Financial Statements

for the years December 31, 2010 and 2011

Table of Contents

	Page
Report of Independent Registered Public Accounting Firm		3
Statement of Revenues and Direct Expenses for the years ended December 31, 2010 and December 31, 2011		4
Statement of Assets Acquired and Liabilities Assumed as of December 31, 2010 and December 31, 2011		5
Notes to the Combined Financial Statements		6

2

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

of NXP Semiconductors N.V.

We have audited the accompanying statements of assets acquired and liabilities assumed of the High Speed Data Converter Business (“the Business”), a component of NXP Semiconductors N.V. (“the Company”) as of December 31, 2011, and 2010, and the related statements of revenues and direct expenses for the years then ended. These combined financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these combined financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

The accompanying combined financial statements were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, as described in Note 1 to the combined financial statements, and is not intended to be a complete presentation of the Business’ assets, liabilities, revenues, expenses, and cash flows.

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the assets acquired and liabilities assumed of the Business as of December 31, 2011, and 2010, and its revenues and direct expenses for the years then ended on the basis of accounting described in Note 1 and in conformity with U.S. generally accepted accounting principles.

/s/KPMG Accountants N.V.

Amstelveen, the Netherlands

August 8, 2012

3

Statement of Revenues and Direct Expenses for the years ended December 31, 2010 and December 31, 2011

in thousands of USD unless stated otherwise

		2010			2011
4	Revenue		3,798			2,378
	Cost of revenue		(2,093	)		(2,398	)
	Gross Profit (loss)		1,705			(20	)
4	Selling expenses		(1,669	)		(2,741	)
4	General and administrative expenses		(4,956	)		(4,671	)
4	Research and development expenses		(16,997	)		(17,962	)
	Direct expenses in excess of revenues		(21,917	)		(25,394	)

The accompanying notes are an integral part of these combined financial statements.

4

Statement of Assets Acquired and Liabilities Assumed as of December 31, 2010 and December 31, 2011

in thousands of USD unless stated otherwise

		2010			2011
	Current assets
5	Inventories		402			1,055
	Other current assets		11			18
	Total current assets		413			1,073
	Non-current assets
6	Intangible assets
	- At cost		196			204
	- Less accumulated amortization		(74	)		(95	)
	Intangible assets (net)		122			109
7	Property, plant and equipment:
	- At cost		2,860			3,174
	- Less accumulated depreciation		(1,570	)		(1,824	)
	Property, plant and equipment (net)		1,290			1,350
	Total non-current assets		1,412			1,459
	Total assets acquired		1,825			2,532
	Current liabilities
8	Accrued liabilities		(6	)
8	Employee related accruals		(1,851	)		(1,191	)
9	Pension liability					(15	)
	Total current liabilities		(1,857	)		(1,206	)
	Non-current liabilities
9	Pension liability		(107	)		(134	)
10	Jubilee provision		(195	)		(202	)
	Total non-current liabilities		(302	)		(336	)
	Total liabilities assumed		(2,159	)		(1,542	)

The accompanying notes are an integral part of these combined financial statements.

5

Notes to the Combined Financial Statements

All amounts are in thousands of USD unless stated otherwise.

1 Description of Transactions and Basis of Presentation

Description of Transactions

On February 22, 2012, Integrated Device Technology, Inc. (IDT) and NXP B.V, (NXP) entered into a Business Purchase Agreement (BPA), providing the sale of the High Speed Data Converter Business (the “Business”), mainly located in France. The transaction was closed July 19, 2012. These financial statements represent the High Speed Converters Product Group (HSC Product Group) (the Company) and have been prepared for a special purpose. The HSC Product Group operated as a part of NXP and consists of high-speed Analog to Digital Converters (ADCs) and Digital to Analog Converters (DACs).

NXP provides High Performance Mixed Signal and Standard Product solutions that leverage its leading RF, Analog, Power Management, Interface, Security and Digital Processing expertise. These innovations are used in a wide range of automotive, identification, wireless infrastructure, lighting, industrial, mobile, consumer and computing applications. NXP is a global semiconductor company with operations in more than 25 countries and posted revenue of USD 4.2 billion in 2011 (USD 4.4 billion in 2010).

The accompanying combined financial statements of assets acquired and liabilities assumed and the statements of revenue and direct expenses of the business were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and are not intended to be a complete presentation of the Business’ assets, liabilities, revenues, expenses and cash flows.

Basis of Presentation

The combined financial statements contain a statement of assets acquired and liabilities assumed and a statement of revenues and direct expenses containing third party revenues pertaining to the HSC Product Group and direct expenses hereto, since it is impracticable to prepare full financial statements as required by Regulation S-X. The Business is a component of NXP Semiconductors N.V. The operations are financed by NXP and recharged by the business to NXP at the legal entity level. The funding of this business is not being transferred, and the recharge is not presented in the statement of revenues and direct expenses as it is not reflective of the business being acquired.

The combined financial statements represent the HSC Product Group of NXP and have been derived from the consolidated financial statements and accounting records of NXP. For the periods presented, certain assets, liabilities, revenue and expenses in the combined financial statements include allocations from NXP. To the extent that an asset, liability, revenue or expense is identifiable and directly related to the HSC Product Group, it is reflected in the HSC Product Groups financial statements. Certain expenses reflect NXP corporate allocations attributable to the business, including freight and distribution costs, employee benefits, manufacturing costs, marketing and selling costs, research and development costs, and human resource expenses. For other asset, liability, revenue or expense items which are not identifiable and not directly related to the business line are not allocated to the HSC Product Group financial position. Allocations used relate to the following statement of revenues and direct expenses and statement of assets acquired and liabilities assumed positions.

Statement of revenues and direct expenses

• selling expenses, allocated based on revenue;

• general and administrative expenses, allocated based on payroll expenses;

Statement of assets acquired and liabilities assumed

• property, plant and equipment

• intangible fixed assets;

• inventory allowance;

• pension liabilities;

• jubilee provision;

• accrued expenses related to personnel expenses, allocated based on payroll expenses and other accrued expenses, allocated based on revenue.

In the ordinary course of business NXP uses allocation keys to allocate corporate cost and cost of sales to each Product Line of which the HSC Product Group is a subgroup.

Management believes that the assumptions underlying the allocations in these financial statements are reasonable. However, the financial statements included herein may not necessarily reflect the HSC Product Group’s results of operations and financial position in the future or what its results of operations, financial position would have been if the HSC Product Group had been a stand-alone HSC Product Group during the periods presented, or will be in the future due to changes in the business model and the omission of among others certain non-operating expenses, interest and income taxes.

6

All cash flow requirements of the HSC Product Group were funded by NXP and cash management functions were not performed at the HSC Product Group level. Therefore it will be impracticable to prepare a statement of cash flows, including cash flows from operating and financing as the HSC Product Group did not maintain a separate cash balance. It is management’s best estimate that the operating cash flow for the years are equal to the statement of operations minus the non cash items such as amortization and depreciation. The investing cash flows are according to management’s best estimate properly represented by the change in these line items at cost in the statement of assets acquired and liabilities assumed.

The statement of the HSC Products Group’s financial position only include the specific assets and liabilities that were sold in accordance with terms of the agreement. The statement of revenues and direct expenses related to the HSC Product Group’s assets acquired and liabilities assumed include primarily the revenues and expenses, attributable to HSC Product Group’s assets and liabilities.

The statements of revenues and direct expenses do not include interest income and expense, other non-operating income and expenses, income taxes or any other indirect expenses not noted in note 2 and note 4.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the combined financial statements and the reported amounts of revenue and direct expenses during the reporting period. Actual results could differ from those estimates.

2 Summary of significant Accounting policies

Accounting policies

The combined financial statements are prepared in accordance with accounting principles generally accepted in the United States (US GAAP). Historical cost is used as the measurement basis unless otherwise indicated.

Principles for financial statements

The combined financial statements include the assets and liabilities of the HSC Product Group’s business relating to the HSC Product Group. All intercompany balances and transactions within the HSC Product Group have been eliminated in the combined financial statements.

Foreign currencies

The Company uses the U.S. dollar as its reporting currency. The functional currency of the Holding Company is the Euro. For combination purposes, the financial statements of the entities within the Company with a functional currency other than the U.S. dollar are translated into U.S. dollars. Assets and liabilities are translated using the exchange rates on the applicable balance sheet dates. Income and expense items in the statements of revenues and direct expenses are translated at monthly exchange rates in the periods involved.

Inventories

Inventories are stated at the lower of cost or market, less advance payments on work in progress. The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The costs of conversion of inventories include direct labor and fixed and variable production overheads, taking into account the stage of completion. The cost of inventories is determined using the first-in, first-out (FIFO) method. An allowance is made for the estimated losses due to obsolescence. This allowance is determined for groups of products based on purchases in the recent past and/or expected future demand and market conditions. Abnormal amounts of idle facility expense and waste are not capitalized in inventory. The allocation of fixed production overheads to the inventory cost is based on the normal capacity of the production facilities.

7

Property, plant and equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and impairment losses, if any. Assets constructed by the Company include direct costs, overheads and interest charges incurred during the construction period. Government investment grants are deducted from the cost of the related asset. Depreciation is calculated using the straight-line method over the expected economic life of the asset. Costs related to repair and maintenance activities are expensed in the period in which they are incurred.

Intangible assets

Intangible assets with definitive lives arising from acquisitions are amortized using the straight-line method over their estimated useful lives. Remaining useful lives are evaluated every year to determine whether events and circumstances warrant a revision to the remaining period of amortization. The Company considers renewal and extension options in determining the useful life. However, based on experience the Company concluded that these assets have no extension or renewal possibilities. Patents, trademarks and other intangible assets acquired from third parties are capitalized at cost and amortized over their estimated remaining useful lives.

Impairment or disposal of intangible assets and tangible fixed assets

The Company accounts for intangible assets and tangible fixed assets in accordance with the provisions of ASC 360 “Property, Plant and Equipment”. Long-lived assets other than goodwill are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset with future undiscounted net cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. The Company determines the fair value based on discounted projected cash flows. The review for impairment is carried out at the level where discrete cash flows occur that are largely independent of other cash flows in the absence of other observable inputs such as quoted prices.

Benefit accounting

The Company accounts for the cost of pension plans and postretirement benefits other than pensions in accordance with ASC 715 “Compensation-Retirement Benefits”.

The Company’s employees participate in pension and other postretirement benefit plans mainly in France and in the Netherlands. The costs of pension and other postretirement benefits and related assets and liabilities with respect to the Company’s employees participating in defined-benefit plans have been recognized within the combined financial statements based upon actuarial valuations. Some of the Company’s defined-benefit pension plans are funded with plan assets that have been segregated and restricted in a trust, foundation or insurance company to provide for the pension benefits to which the Company has committed itself.

The net pension liability or asset recognized in the balance sheet in respect of defined benefit pension plans is the present value of the projected defined-benefit obligation less the fair value of plan assets at the balance sheet date.

The projected defined-benefit obligation is calculated annually by qualified actuaries using the projected unit credit method. For the Company’s major plans, the discount rate is derived from market yields on high quality corporate bonds. Plans in countries without a deep corporate bond market use a discount rate based on the local government bond rates.

Pension costs in respect of defined-benefit pension plans primarily represent the increase in the actuarial present value of the obligation for pension benefits based on employee service during the year and the interest on this obligation in respect of employee service in previous years, net of the expected return on plan assets and net of employee contributions.

Actuarial gains and losses arise mainly from changes in actuarial assumptions and differences between actuarial assumptions and what has actually occurred. They are recognized in the statement of operations, over the expected average remaining service periods of the employees only to the extent that their net cumulative amount exceeds 10% of the greater of the present value of the obligation or of the fair value of plan assets at the end of the previous year (the corridor). Events which invoke a curtailment or a settlement of a benefit plan will be recognized in our statement of operations.

Unrecognized prior-service costs related to pension plans and postretirement benefits other than pensions are amortized to the statements of operations over the average remaining service period of the active employees.

Contributions to defined-contribution and multi-employer pension plans are recognized as an expense in the statements of operations as incurred.

In accordance with the requirements of ASC 715, if the projected benefit obligation exceeds the fair value of plan assets, we recognize in the consolidated balance sheet a liability that equals the excess. If the fair value of plan assets exceeds the projected benefit obligation, we recognize in the balance sheet an asset that equals the excess.

8

The Company determines the fair value based on quoted prices for the plan assets or comparable prices for non-quoted assets. For a defined-benefit pension plan, the benefit obligation is the projected benefit obligation; for any other postretirement defined benefit plans it is the accumulated postretirement benefit obligation.

For all of the Company’s defined pension benefit plans, the measurement date is year-end.

Revenue recognition

The Company’s revenue is primarily derived from made-to-order sales to Original Equipment Manufacturers (“OEMs”) and similar customers. The Company’s revenue is also derived from sales to distributors.

The Company applies the guidance in SEC Staff Accounting Bulletin (SAB) Topic 13 ‘Revenue Recognition’ and recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or the service has been provided, the sales price is fixed or determinable, and collection is reasonably assured, based on the terms and conditions of the sales contract. For made-to-order sales, these criteria are met at the time the product is shipped and delivered to the customer and title and risk have passed to the customer. Examples of delivery conditions typically meeting these criteria are “Free on board point of delivery” and “Costs, insurance paid point of delivery”. Generally, the point of delivery is the customer’s warehouse. Acceptance of the product by the customer is generally not contractually required, since, for made-to-order customers, design approval occurs before manufacturing and subsequently delivery follows without further acceptance protocols. Payment terms used are those that are customary in the particular geographic market. When management has established that all aforementioned conditions for revenue recognition have been met and no further post-shipment obligations exist, revenue is recognized.

For sales to distributors, the same recognition principles apply and similar terms and conditions as for sales to other customers are applied. However, for some distributors contractual arrangements are in place, which allow these distributors to return products if certain conditions are met. These conditions generally relate to the time period during which return is allowed and reflect customary conditions in the particular geographic market. Other return conditions relate to circumstances arising at the end of a product life cycle, when certain distributors are permitted to return products purchased during a pre-defined period after the Company has announced a product’s pending discontinuance. Long notice periods associated with these announcements prevent significant amounts of product from being returned, however. Repurchase agreements with OEMs or distributors are not entered into by the Company.

For sales where return rights exist, the Company has determined, based on historical data, that only a very small percentage of the sales to this type of distributors is actually returned. In accordance with these historical data, a pro rata portion of the sales to these distributors is not recognized but deferred until the return period has lapsed or the other return conditions no longer apply.

Revenue is recorded net of sales taxes, customer discounts, rebates and other contingent discounts granted to distributors. Shipping and handling costs billed to customers are recognized as revenue. Expenses incurred for shipping and handling costs of internal movements of goods are recorded as cost of revenue. Shipping and handling costs related to revenue to third parties are reported as selling expenses.

Cost of Revenue

Our cost of revenue consists primarily of the cost of semiconductor wafers and other materials, and the cost of assembly and test. Cost of revenue also includes personnel costs and overhead related to our manufacturing and manufacturing engineering operations, related occupancy and equipment costs, manufacturing quality, order fulfillment and inventory adjustments, including write-downs for inventory obsolescence and other expenses.

Research and development

Costs of research and development are expensed in the period in which they are incurred. Subsidies are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the subsidy relates to an expense item, it is recognized as reduction of costs over the period necessary to match the subsidy on a systematic basis to the costs that it is intended to compensate. When the subsidy relates to an asset, it is deducted from the acquisition price and decreases the depreciation of the asset in equal amounts over the expected useful life of the related asset. When the HSC Product Group receives non-monetary grants, the asset and the subsidies are recorded gross at nominal amounts and released to the income statement over the expected useful life and pattern of consumption of the benefit of the underlying asset by equal annual installments.

Advertising

Advertising costs are expensed when incurred.

9

Provisions and accrued liabilities

The Company recognizes provisions for liabilities and probable losses that have been incurred as of the consolidated balance sheet dates and for which the amount is uncertain but can be reasonably estimated.

Provisions of a long-term nature are stated at present value when the amount and timing of related cash payments are fixed or reliably determinable unless discounting is prohibited under U.S. GAAP. Short-term provisions are stated at undiscounted values.

3 Relationship with NXP and other related parties

Revenue

The HSC Product Group designs, purchases from and sells semiconductors to external parties.

Cost of Revenue

Cost of revenue comprises the direct cost of goods sold and any inventory write-downs to lower market value. Indirect costs and manufacturing results from over and under utilization of production capacity are allocated to cost of revenue.

Cost of services and corporate functions

The HSC Product Group participates in a variety of corporate-wide programs administered by NXP in areas such as cash management, insurance, employee benefits, information technology, and intellectual property.

Furthermore, the HSC Product Group utilizes various NXP shared services organizations for services such as:

• Human Resource services such as payroll processing, benefits administration, recruitment and training

• Accounting services

• Information technology such as the cost of hardware, network and standard software applications

• Purchasing of non-product related items

The costs of these services for the year 2011 amount to USD 6,355 (2010: USD 4,951) have been charged to the HSC Product Group based on Service Level Agreements and agreed upon contract prices.

Furthermore research and development expenses were charged by NXP amounting to USD 3,255 for year 2011 (2010: USD 3,401) based on Service level agreement and agreed upon contract prices.

4 Revenues and Direct Expenses

Revenue composition for the period of twelve months ended December 31

	2010		2011
Goods sold to external customers		3,798		2,378
		3,798		2,378

The external revenues can be split into the following countries (based on customer location):

	2010		2011
Asia		2,376		1,480
Europe		636		319
North America		5		544
Other countries		781		35
		3,798		2,378

10

Salaries and wages for the year ended December 31

	2010			2011
Salaries and wages		(6,358	)		(6,366	)
Pension and other postemployment costs		(302	)		(374	)
Other social security and similar		(2,319	)		(2,405	)
		(8,979	)		(9,145	)

The salary and wages relate to the following:

	2010			2011
Research and Development expenses		(7,622	)		(7,739	)
General and administrative expenses		(1,357	)		(1,406	)
		(8,979	)		(9,145	)

Depreciation and amortization for the year ended December 31

Depreciation of property, plant and equipment, amortization of intangibles assets are as follows:

	2010			2011
Depreciation of property, plant and equipment		(216	)		(313	)
Amortization of intangible assets		(17	)		(17	)
		(233	)		(330	)

Depreciation of property, plant and equipment and amortization of intangibles assets are primarily included in selling and research and development expenses.

Selling expenses

Selling expenses incurred for the year ended December 31, 2011 totaled USD 2,741 (2010: USD 1,669).

The selling expenses mainly relate to the cost of the sales and marketing organization. This mainly consists of allocated costs in relation to account management, marketing, first and second line support and order processing.

General and administrative expenses

General and administrative expenses incurred for the year ended December 31, 2011 totaled USD 4,671 (2010: USD 4,956).

General and administrative expenses consists primarily of compensation for management, finance, human resources and other administrative personnel, allocated facilities costs and other corporate expenses.

11

Research and Development expenses

The research and development expenses contain related subsidies and tax credits.

	2010			2011
R&D expenses gross		(18,541	)		(19,222	)
Related subsidies and tax credits		1,544			1,260
Net R&D expenses		(16,997	)		(17,962	)

The subsidies and tax credits relate to specific subsidy arrangements in France and in the Netherlands.

5 Inventories

Inventories are summarized as follows:

	2010		2011
Work in process		289		865
Finished goods		113		190
		402		1,055

The amounts recorded above are net of an allowance for obsolescence of USD 762 (2010: USD 646).

6 Intangible assets

Included in the Deed of Transfers, an exhibit to the Business Purchase Agreement between NXP and IDT, the Company agreed to sell 10 patent families specifically pertaining to the Data Converter Business. These patents were initially recorded at fair value when acquired by the Business and subsequently amortized over their estimated useful lives. The Business currently incurs research and development costs relating to these patents in the development of future marketable products.

All intangible assets are subject to amortization and have no assumed residual value.

The estimated amortization expense for these intangible assets as of December 31, 2011, for each of the six succeeding years is:

2012	17
2013	17
2014	17
2015	17
>2015	41

The expected weighted average remaining life of intangible assets is 6 years as of December 31, 2011

12

7 Property, plant and equipment

	2010			2011
Property Plant and Equipment at Cost
Machinery and Installations		1,431			1,421
Other equipment		1,429			1,753
Total Costs		2,860			3,174
Accumulated Depreciation		(1,570	)		(1,824	)
Net Property Plant and Equipment at Cost		1,290			1,350

The expected economic lives as of December 31, 2011 are as follows:

Machinery and installations from 5 to 8 years

Other equipment from 5 to 7 years.

8 Accrued liabilities and Employee related accruals

Accrued liabilities and employee related accruals are summarized as follows:

	2010			2011
Personnel-related costs:
- Salaries and wages		(50	)		(50	)
- Accrued vacation entitlements		(961	)		(936	)
- Other personnel-related costs		(846	)		(205	)
		(1,857	)		(1,191	)

9 Pensions

Our employees participate in employee pension plans in accordance with the legal requirements, customs and the local situation in the respective countries. These are defined-benefit pension plans, defined-contribution plans and multi-employer plans.

The costs of pension benefits and related liabilities for the employees that will be transferred to IDT, were determined based on actuarial calculations.

The Company’s employees in The Netherlands participate in a multi-employer plan, implemented for the employees of the Metal and Electrical Engineering Industry (“Bedrijfstakpensioenfonds Metalelektro or PME”) in accordance with the mandatory affiliation to PME effective for the industry in which the HSC Product Group operates. As this affiliation is a legal requirement for the Metal and Electrical Engineering Industry it has no expiration date. This PME multi-employer plan (a career average plan) covers approximately 1,230 companies and 680,000 participants. The plan monitors its risk on an aggregate basis, not by company or participant and can therefore not be accounted for as a defined benefit plan. The pension fund rules state that the only obligation for affiliated companies will be to pay the annual plan contributions. There is no obligation for affiliated companies for additional funding to recover from plan deficits. Affiliated companies will also have no entitlements to any possible surpluses in the pension fund.

Every participating company contributes the same fixed percentage of its total pension base, being pensionable salary minus an individual offset. The Company’s pension cost for any period is the amount of contributions due for that period.

The coverage ratio of the PME plan was 90% as of December 31, 2011. Regulations require PME to have a coverage ratio (ratio of the plan’s assets to its obligations) of 104.3 % for the total plan as of December 31, 2012, which should be achieved via a Recovery Plan. As the coverage ratio as of December 31, 2011 is below the path indicated in the Recovery Plan, PME has announced their intention to reduce pension rights by approximately 6% as of April 1, 2013 should the coverage ratio as of December 31, 2012 remain below the required level. The contribution rate will increase from 25.0% (2011) to 26.5% (2012) to meet the funding requirements for the accrual of new pension rights.

13

PME multi-employer plan:

	2010		2011
HSC Product group contributions to the plan (Including employee contributions)		228		282
Number of HSC Product group active employees participating in the plan		13		13
HSC Product group contribution to plan exceeded more than 5 percent of total contribution (as of December 31 of the plan’s year end)		No		No

The HSC Product Group also participates in NXP sponsored defined-contribution and similar types of plans for a significant number of salaried employees. The amount included in the statement of operations for the year 2011 was USD 346 (2010: USD 288) of which USD 77 (2010: USD 72) represents defined-contribution plans and USD 269 (2010: USD 217) represents the PME multi-employer plans.

Defined-benefit plans

The benefits provided by defined-benefit plans are based on employees’ years of service and compensation levels. Contributions are made by the Company, as necessary, to provide assets sufficient to meet the benefits payable to defined-benefit pension plan participants.

These contributions are determined based upon various factors, including funded status, legal and tax considerations as well as local customs. The Company funds certain defined-benefit pension plans as claims are incurred.

The total cost of defined-benefit plans amounted to USD 28 in 2011 (2010: USD 14)

14

The table below provides a summary of the changes in the pension benefit obligations and defined-benefit pension plan assets for 2011 and 2010, associated with the Company’s dedicated plans, and a reconciliation of the funded status of these plans to the amounts recognized in the consolidated balance sheets.

	2010			2011
Projected benefit obligation
Projected benefit obligation at beginning of year		342			471
Additions		—			—
Service cost		23			32
Interest cost		17			21
Actuarial gains and (losses)		103			(49	)
Curtailments and settlements		—			—
Plan amendments		—			39
Benefits paid		—			—
Exchange rate differences		(14	)		(18	)
Projected benefit obligation at end of year		471			496
Plan assets
Fair value of plan assets at beginning of year		338			364
Actual return on plan assets		40			11
Employer contributions		—			—
Curtailments and settlements		—			—
Benefits paid		—			—
Exchange rate differences		(14	)		(13	)
Fair value of plan assets at end of year		364			362
Funded status		(107	)		(134	)
Classification of the funded status is as follows
- Prepaid pension cost within other non-current assets		—			15
- Accrued pension cost within other non-current liabilities		(107	)		(149	)
- Provisions for pensions within provisions		—			—
Total		(107	)		(134	)
Accumulated benefit obligation
Accumulated benefit obligation for all Company-dedicated benefit pension plans		286			325
Amounts recognized in accumulated other comprehensive income (before tax)
Total AOCI at beginning of year		(200	)		(103	)
- Net actuarial loss (gain)		88			(35	)
- Prior service cost (credit)		—			39
- Exchange rate differences		9			4
Total AOCI at end of year		(103	)		(95	)
Changes in accumulated other comprehensive income (before tax) consist of
Total net actuarial loss (gain) at beginning of year		(200	)		(103	)
- Net actuarial loss (gain) arising during the year		99			(28	)
- Net actuarial (loss) gain recognized in income during the year		(11	)		(7	)
- Exchange rate difference		9			4
Total net actuarial loss (gain) at end of year		(103	)		(134	)
Total prior service cost (credit) at beginning of year		—			—
- Prior service cost (credit) arising during the year		—			39
Total prior service cost (credit) at end of year		—			39

15

The weighted average assumptions used to calculate the projected benefit obligations as of December 31 were as follows:

	2010			2011
Discount rate		4.25	%		4.90	%
Rate of compensation increase		2.71	%		2.47	%

Expected returns per asset class are based on the assumption that asset valuations tend to return to their respective long-term equilibria. The Expected Return on Assets for any funded plan equals the average of the expected returns per asset class weighted by their portfolio weights in accordance with the fund’s strategic asset allocation.

The weighted-average assumptions used to calculate the net periodic pension cost for the period of year ended December 31, 2011.

	2010			2011
Discount rate		5.50	%		4.25	%
Expected returns on plan assets		4.61	%		4.64	%
Rate of compensation in crease		2.78	%		2.71	%

The components of net periodic pension costs for the year in the respective period were as follows:

	2010			2011
Service cost		23			32
Interest cost on the projected benefit		17			21
Expected return on plan assets		(15	)		(18	)
Net actuarial gain / (loss) recognized		(11	)		(7	)
Net periodic costs		14			28

Plan assets

It is our policy that the defined-benefit pension plans are funded through investments in “insurance contracts” managed by qualified insurance companies. We do not have control over the target allocation or visibility of the investment strategies of those investments. The insurance contracts are classified as “level 3” insurance contracts. The determination of the fair value of the insurance contracts was based on information provided by the insurer. The insurance companies are using unobservable inputs to the valuation methodology that are significant to the measurement of the fair value. These inputs include unobservable input from qualified insurance companies that we were unable to corroborate with observable market data.

The plan assets have been allocated to the HSC Product Group on a pro-rata basis of individual PBO’s related to the aggregate PBO of the insurance contract.

Within three months after the closing, NXP will deliver to IDT the projected benefit obligation amount that is calculated at the closing date in accordance with US GAAP ASC 715 “Compensation-Retirement Benefits” as consistently applied in NXP’s Group’s financial statement accounting policy.

Estimated future contributions expected to be paid is USD 360.

16

Estimated future pension benefit payments

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

2012	15
2013	—
2014	11
2015	9
2016	21
Years 2017-2021	145

10 Jubilee provision

In certain countries the HSC Group also provides post employment benefits other than pensions. These are in the nature of one time payouts in relation to the number of service years of the employee.

The amount of the obligation per employee has been determined by actuarial calculation indicating the degree of likelihood that the individual employee will actually complete the required number of service years to be entitled to his jubilee payment.

11 Other commitments and contingent liabilities

Litigation

The HSC Product Group is not involved in any material claims. Although the ultimate disposition of asserted claims and proceedings cannot be predicted with certainty, it is the opinion of the HSC Product Group’s management that the outcome of any such claims, either individually or on an aggregate basis, will not have a material adverse effect on the HSC Product Group’s financial position, but could be material to the results of operations of the HSC Product Groups’ for a particular period.

Guarantees

At the end of 2011 and 2010 there were no guarantees recognized by the HSC Product Group.

Other commitments

In the periods presented in these combined financial statements no commitments have been made by the HSC Product Group.

17

EX-99.3

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma condensed combined financial statements are based on the separate historical financial statements of Integrated Device Technology, Inc., or “IDT,” PLX Technology, Inc., or “PLX,” and the NXP DC Business (defined below) and the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial statements, after giving effect to (a) the offer to exchange (i) 0.525 of a share of IDT common stock and (ii) $3.50 in cash, subject to adjustment for stock splits, stock dividends and similar events, without interest thereon and less any applicable withholding taxes, for each share of common stock of PLX, referred to as the “offer,” and the subsequent merger of Pinewood Acquisition Corp., IDT’s wholly-owned subsidiary, with and into PLX, referred to as the “merger,” and (b) the completion by IDT on July 19, 2012 of the acquisition of certain assets related to technology and products developed for communications analog mixed-signal market applications, referred to as the “NXP DC Business,” from NXP B.V., or “NXP,” for $31.2 million in cash. The unaudited pro forma condensed combined statements of operations for the three months ended July 1, 2012 and the year ended April 1, 2012, are presented as if the offer had been completed and the merger with PLX had occurred on April 4, 2011 with recurring transaction-related adjustments reflected in the period, and as if the acquisition of the NXP DC Business by IDT had occurred on April 4, 2011. The unaudited pro forma condensed combined balance sheet as of July 1, 2012, is presented as if the offer had been completed and the merger with PLX had occurred on July 1, 2012, and as if the acquisition of the NXP DC Business by IDT had occurred on July 1, 2012.

It should be noted that IDT has a different fiscal year end than PLX and the NXP DC Business. Accordingly, the unaudited pro forma condensed combined balance sheet combines IDT’s historical consolidated balance sheet as of July 1, 2012 with PLX’s historical consolidated balance sheet as of March 31, 2012 and the NXP DC Business’s statement of net assets and liabilities assumed as of March 31, 2012. The selected unaudited pro forma condensed combined statement of operations for the fiscal year ended April 1, 2012 combines IDT’s historical consolidated statement of operations for the fiscal year ended April 1, 2012 with PLX’s historical consolidated statement of operations for the fiscal year ended December 31, 2011 and the NXP DC Business’s statement of revenues and expenses for the fiscal year ended December 31, 2011. The selected unaudited pro forma condensed combined statement of operations for the three month period ended July 1, 2012 combines IDT’s unaudited historical consolidated statement of operations for the three months ended July 1, 2012 with PLX’s unaudited historical consolidated statement of operations for the three months ended March 31, 2012 and NXP DC Business unaudited statement of revenues and expenses for the three months ended March 31, 2012.

The completion of the offer and the merger with PLX and the acquisition of the NXP DC Business will be accounted for under the acquisition method of accounting in accordance with Accounting Standards Codification, or ASC, Topic 805, Business Combinations, or “ASC 805.” In business combination transactions in which the consideration given is not in the form of cash (that is, in the form of non-cash assets, liabilities incurred, or equity interests issued), measurement of the acquisition consideration is based on the fair value of the consideration given or the fair value of the asset (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. The acquisition consideration for the NXP DC Business was $31.2 million in cash.

Under ASC 805, all of the assets acquired and liabilities assumed in a business combination are recognized at their acquisition-date fair value, while transaction costs and restructuring costs associated with the business combination are expensed as incurred. The excess of the acquisition consideration over the fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill. Acquired in-process research and development is recorded at fair value as an indefinite-lived intangible asset at the acquisition date until the completion or abandonment of the associated research and development efforts. Upon completion of development, acquired in-process research and development assets are considered amortizable, finite-lived assets. Changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally affect income tax expense. The integration of the NXP DC Business into IDT may result in changes that may affect how the assets acquired from NXP, including intangible assets, will be utilized by IDT. In addition, subsequent to the completion of the offer and the merger with PLX, IDT and PLX will finalize an integration plan, which may affect how the assets acquired, including intangible assets, will be utilized by the combined company. For those assets in the combined company that will be phased out or will no longer be used, additional amortization, depreciation and possibly impairment charges will be recorded after management completes the integration plan.

For purposes of these unaudited pro forma condensed combined financial statements, IDT and PLX have made preliminary allocations of the preliminary estimated acquisition consideration based on the consideration to be paid to PLX stockholders in the offer and the merger, which is equal to, per share of PLX common stock, (i) 0.525 of a share of IDT common stock and (ii) $3.50 in cash. For the NXP DC Business, the purchase consideration paid by IDT was $31.2 million in cash. The acquisition consideration for the acquisition of the NXP DC Business and the preliminary estimated acquisition consideration of the offer and the merger with PLX have been allocated to the tangible and intangible assets to be acquired and liabilities to be assumed based on preliminary estimates of their fair value as described in the accompanying notes. This preliminary allocation of the acquisition consideration for the acquisition of the NXP DC Business and the preliminary estimated acquisition consideration of the offer and the merger with PLX is based on available public information and is dependent upon certain estimates, assumptions, valuations and other studies which have not progressed to a stage where there is sufficient information to make a definitive allocation. Accordingly, the estimated acquisition consideration allocation and related pro forma adjustments are preliminary and have been made solely for the purpose of developing such pro forma combined condensed financial statements. In connection with the plan to integrate the operations of the NXP DC Business into IDT and of IDT and PLX following the completion of the offer and the merger, IDT anticipates that non-recurring charges, such as costs associated with systems implementation, relocation expenses, severance, and other costs related to exit or disposal activities, will be incurred. IDT is not able to determine the timing, nature and amount of these charges as of the date hereof. However, these charges could affect the combined results of operations of IDT, PLX and the NXP DC Business, as well as those of the combined company following the completion of the offer and the merger with PLX, in the period in which they are recorded. The unaudited pro forma condensed combined financial statements do not include the effects of the costs associated with any restructuring or integration activities resulting from the transaction, as they are non-recurring in nature and not factually supportable at the time that the unaudited pro forma condensed combined financial statements were prepared. Additionally, these adjustments do not give effect to any synergies that may be realized as a result of the completion of the offer and the merger with PLX, nor do they give effect to any nonrecurring or unusual restructuring charges that may be incurred as a result of the integration of the three companies or any anticipated disposition of assets or business wind-down, such as with respect to PLX’s 10GBase-T PHY business, that may result from such integration. Transaction related expenses estimated at $0.4 million and $11.6 million for the acquisition of the NXP DC Business and the completion of the offer and the merger with PLX, respectively, are not included in the unaudited pro forma condensed combined statements of operations for the year ended April 1, 2012 or three month period ended July 1, 2012.

A final determination of the acquisition consideration and fair values of PLX’s assets and liabilities, which cannot be made prior to the completion of the offer and the merger with PLX, will be based on the actual net tangible and intangible assets of PLX that exist as of the date of completion of the offer and the merger. A final determination of the fair values of the assets and liabilities of the NXP DC Business, which has not yet been completed, will be based on the actual net tangible and intangible assets of the NXP DC Business that exist as of July 19, 2012, the date the acquisition was completed. Consequently, amounts preliminarily allocated to goodwill and identifiable intangibles could change significantly from those allocations used in the pro forma combined condensed financial statements presented below and could result in a material change in amortization of acquired intangible assets.

The actual amounts recorded as of the completion of the acquisition of the NXP DC Business and as of the completion of the offer and the merger with PLX, respectively, may differ materially from the information presented in these unaudited pro forma condensed combined financial statements as a result of:

• changes in the trading price for IDT’s common stock;

• net cash used by or generated in PLX’s operations between the signing of the merger agreement and completion of the offer and the merger with PLX;

• changes in the net assets attributable to the NXP DC Business between the date of the financial information presented for the NXP DC Business and the completion of the acquisition;

• the timing of the completion of the offer and the merger with PLX;

• other changes in PLX’s net assets that occur prior to completion of the offer and the merger with PLX, which could cause material differences in the information presented below; and

• changes in the financial results of the combined company, which could change the future discounted cash flow projections.

The unaudited pro forma condensed combined financial statements are provided for informational purposes only. The unaudited pro forma condensed combined financial statements are not necessarily and should not be assumed to be an indication of the results that would have been achieved had the acquisition of the NXP DC Business or the offer and the merger with PLX, respectively, been completed as of the dates indicated or that may be achieved in the future. Furthermore, the preparation of the unaudited pro forma condensed combined financial statements and related adjustments required management to make certain assumptions and estimates, and no effect has been given in the unaudited pro forma condensed combined statement of income for synergistic benefits and potential cost savings, if any, that may be realized through the combination of PLX and IDT and/or the acquisition of the NXP DC Business, the costs that may be incurred in integrating their operations or any anticipated disposition of assets or business wind-down, such as with respect to PLX’s 10GBase-T PHY business, that may result from such integration. The unaudited pro forma condensed combined financial statements should be read together with the accompanying notes to the unaudited pro forma condensed combined financial statements, the unaudited historical consolidated financial statements of IDT and accompanying notes included in the IDT Quarterly Report on Form 10-Q for the three months ended July 1, 2012, the historical consolidated financial statements of IDT and accompanying notes included in the IDT Annual Report on Form 10-K for the year ended April 1, 2012, the historical combined financial statements of the NXP DC Business and accompanying notes filed with IDT’s Current Report on Form 8-K/A filed on August 9, 2012, the unaudited historical consolidated financial statements of PLX and accompanying notes included in the PLX Quarterly Report on Form 10-Q for the three months ended March 31, 2012, and the historical consolidated financial statements of PLX and accompanying notes included in the PLX Annual Report on Form 10-K for the year ended December 31, 2011.

Unaudited Pro Forma Condensed Combined Balance Sheet at July 1, 2012

(in thousands)

	Historical as of								Pro Forma Adjustments
	Jul. 1, 2012 IDT			Mar. 31, 2012 PLX			Mar. 31, 2012 NXP DC Business Assets		PLX Acquisition			Other Adjustments			Pro Forma Combined
ASSETS
Current assets:
Cash and cash equivalents		108,776			11,591			—		(85,306	)A		(31,162	)O		3,899
Restricted cash		—			—			—		143,100	A					143,100
Short-term investments		176,408			4,540			—		(30,000	)A					150,948
Accounts receivable, net		64,278			13,942			—		—						78,220
Inventories		66,938			8,192			1,055		5,899	J		745	P		82,829
Prepaid and other current assets		24,189			2,655			18		—						26,862
Total current assets		440,589			40,920			1,073		33,693			(30,417	)		485,858
Property, plant and equipment, net		73,600			12,663			1,350		—						87,613
Goodwill		132,109			21,338			—		126,574	D		17,336	R		297,357
Acquisition-related intangibles		51,758			19,114			109		85,086	C		12,091	Q		168,158
Other assets		34,329			1,041			—		—						35,370
TOTAL ASSETS	$	732,385		$	95,076		$	2,532	$	245,353		$	(990	)	$	1,074,356
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	25,061		$	9,935		$	—	$	—						34,996
Accrued compensation and related expenses		26,753			3,914			1,191		7,550	E		255	S		39,663
Deferred income on shipments to distributors		12,861			—			—		—						12,861
Other current liabilities		16,609			3,985			15		—						20,609
Total current liabilities		81,284			17,834			1,206		7,550			255			108,129
Deferred income taxes and other long term liabilities		30,084			—			336		—	N					30,420
Long term debt		—			9,000			—		185,000	B					194,000
Total liabilities		111,368			26,834			1,542		192,550			255			332,549
Common stock of IDT		1,406,335			—			—		128,595	L					1,534,930
Common stock of PLX		—			185,867			—		(185,867	)K					—
NXP net assets sold								990					(990	)U		—
Accumulated and other comprehensive income		1,133			(183	)		—		183	F					1,133
Accumulated deficit		(786,451	)		(117,442	)		—		109,892	G		(255	)		(794,256	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	732,385		$	95,076		$	2,532	$	245,353		$	(990	)	$	1,074,356

See accompanying notes to unaudited pro forma condensed combined financial statements.

Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended April 1, 2012

(in thousands, except per share data)

	Fiscal Year Ended									Pro Forma Adjustments
	Apr. 1, 2012 IDT			Dec. 31, 2011 PLX			Dec. 31, 2011 NXP DC Business Assets			PLX Acquisition			Other Adjustments			Pro Forma Combined
Revenues	$	526,696		$	115,789		$	2,378								$	644,863
Cost of revenues		246,190			49,650			2,398			24,519	H,J		1,665	T,P		324,422
Gross profit		280,506			66,139			(20	)		(24,519	)		(1,665	)		320,441
Operating expenses:
Research and development		158,749			49,236			17,962									225,947
Selling, general and administrative		100,907			41,432			7,412			(6,499	)H		1,254	T		144,506
Total operating expenses		259,656			90,668			25,374			(6,499	)		1,254			370,453
Operating income (loss)		20,850			(24,529	)		(25,394	)		(18,020	)		(2,919	)		(50,012	)
Other-than temporary impairment loss on investments		(2,797	)		—												(2,797	)
Gain on sale of manufacturing facility		20,656			—												20,656
Interest income and other, net		(1,118	)		(148	)		—			(4,563	)I		—			(5,829	)
Income (loss) from continuing operations before income taxes		37,591			(24,677	)		(25,394	)		(22,583	)		(2,919	)		(37,982	)
Provision (benefit) for income taxes		268			146			—				N					414
Net income (loss) from continuing operations		37,323			(24,823	)		(25,394	)		(22,583	)		—			(38,396	)
Basic net income (loss) per share - continuing operations	$	0.26		$	(0.56	)										$	(0.23	)
Diluted net income (loss) per share - continuing operations	$	0.26		$	(0.56	)										$	(0.23	)
Weighted average shares:
Basic		143,958			44,559						(20,978	)M					167,539
Diluted		145,848			44,559						(18,312	)M					167,539

See accompanying notes to unaudited pro forma condensed combined financial statements.

Unaudited Pro Forma Condensed Combined Statement of Operations for the

Three Months Ended July 1, 2012

(in thousands, except per share data)

	Three Months Ended									Pro Forma Adjustments
	July 1, 2012 IDT			Mar. 31, 2012 PLX			Mar. 31, 2012 NXP DC Business Assets			PLX Acquisition			Other Adjustments			Pro Forma Combined
Revenues	$	130,161		$	25,417		$	298								$	155,876
Cost of revenues		57,648			11,404			298			4,655	H		230	T		74,235
Gross profit		72,513			14,013			—			(4,655	)		(230	)		81,641
Operating expenses:
Research and development		41,544			11,063			3,517									56,124
Selling, general and administrative		36,412			10,356			1,451			(1,296	)H		165	T		47,088
Total operating expenses		77,956			21,419			4,968			(1,296	)		165			103,212
Operating income (loss)		(5,443	)		(7,406	)		(4,968	)		(3,359	)		(395	)		(21,571	)
Other-than temporary impairment loss on investments		—			—												—
Gain on sale of manufacturing facility		—			—												—
Interest income and other, net		2,000			(5	)		—			(1,141	)I		—			854
Income (loss) from continuing operations before income taxes		(3,443	)		(7,411	)		(4,968	)		(4,500	)		(395	)		(20,716	)
Provision (benefit) for income taxes		(3,986	)		29							N					(3,957	)
Net income (loss) from continuing operations		543			(7,440	)		(4,968	)		(4,500	)		—			(16,759	)
Basic net income (loss) per share - continuing operations	$	—		$	(0.17	)										$	(0.10	)
Diluted net income (loss) per share - continuing operations	$	—		$	(0.17	)										$	(0.10	)
Weighted average shares:
Basic		142,595			44,729						(21,148	)M					166,176
Diluted		143,984			44,729						(18,539	)M					166,176

See accompanying notes to unaudited pro forma condensed combined financial statements.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

1. Basis of Pro Forma Presentation

The unaudited pro forma condensed combined balance sheet as of July 1, 2012 and the unaudited pro forma condensed combined statements of operations for the three months ended July 1, 2012 and the year ended April 1, 2012 are based on the historical financial statements of IDT, PLX and the NXP DC Business, and the assumptions and adjustments described in the accompanying notes, after giving effect to (a) the offer and the merger with PLX and (b) the completion by IDT on July 19, 2012 of the acquisition of the NXP DC Business from NXP for $31.2 million in cash. The unaudited pro forma condensed combined financial statements do not reflect cost savings, operating synergies or revenue enhancements expected to result from the merger with PLX or the acquisition of the NXP DC Business or the costs to achieve these cost savings, operating synergies or revenue enhancements or any anticipated disposition of assets or business wind-down, such as with respect to PLX’s 10GBase-T PHY business, that may result from the integration of the operations of the NXP DC Business into IDT and of IDT and PLX following the completion of the offer and the merger.

The completion of the offer and the merger with PLX and the acquisition of the NXP DC Business will be accounted for under the acquisition method of accounting in accordance with Accounting Standards Codification, or ASC, Topic 805, Business Combinations, or “ASC 805.” In business combination transactions in which the consideration given is not in the form of cash (that is, in the form of non-cash assets, liabilities incurred, or equity interests issued), measurement of the acquisition consideration is based on the fair value of the consideration given or the fair value of the asset (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. The acquisition consideration for the NXP DC Business was $31.2 million in cash.

Under ASC 805, all of the assets acquired and liabilities assumed in a business combination are recognized at their acquisition-date fair value, while transaction costs and restructuring costs associated with the business combination are expensed as incurred. The excess of the acquisition consideration over the fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill. Acquired in-process research and development is recorded at fair value as an indefinite-lived intangible asset at the acquisition date until the completion or abandonment of the associated research and development efforts. Upon completion of development, acquired in-process research and development assets are generally considered amortizable, finite-lived assets. Changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally affect income tax expense. The integration of the NXP DC Business into IDT may result in changes that may affect how the assets acquired from NXP, including intangible assets, will be utilized by IDT. In addition, subsequent to the completion of the offer and the merger with PLX, IDT and PLX will finalize an integration plan, which may affect how the assets acquired, including intangible assets, will be utilized by the combined company. For those assets in the combined company that will be phased out or will no longer be used, additional amortization, depreciation and possibly impairment charges will be recorded after management completes the integration plan.

The pro forma information is presented solely for informational purposes and is not necessarily indicative of the combined results of operations or financial position that might have been achieved for the periods or dates indicated, nor is it necessarily indicative of the future results of the combined company.

2. Preliminary Estimated Acquisition Consideration for PLX

On April 30, 2011, IDT, Pinewood, Pinewood LLC and PLX entered into the merger agreement pursuant to which Pinewood, a wholly-owned subsidiary of IDT, has commenced an exchange offer for all of the outstanding shares of PLX, par value $0.001 per share, in exchange for consideration, per share of PLX common stock, comprised of (i) $3.50 in cash plus (ii) 0.525 of a share of IDT common stock, without interest and less any applicable withholding taxes. After completion of the exchange offer, IDT will cause Pinewood to complete a merger with and into PLX, with PLX continuing as the surviving corporation, in which each outstanding share of PLX common stock (except for shares beneficially owned, directly or indirectly, by IDT for its own account, shares held in treasury by PLX and shares held by PLX stockholders who have properly preserved their appraisal

rights, if any, under Delaware law) will be converted into the right to receive the same consideration paid in exchange for each share of PLX common stock in the exchange offer, subject to appraisal rights to the extent applicable under Delaware law.

Immediately prior to the effective time of the merger, each outstanding and unexercised option to acquire shares of PLX common stock, including options granted to PLX officers and employee directors, with an exercise price per share less than $9.00 that is held by an employee of PLX who continues as an employee of IDT or an affiliate of IDT after the effective time will be converted into an option to acquire a number of shares of IDT common stock equal to the number of shares of PLX common stock for which such option was exercisable at the effective time of the merger multiplied by the equity exchange ratio, rounded down to the nearest whole share. The exercise price per share of each such assumed option will be equal to the exercise price per share set forth in the option agreement for such option at the effective time of the merger, divided by the “equity exchange ratio” (rounded up to the nearest whole cent). The “equity exchange ratio” will be calculated as a fraction, the numerator of which is the sum of (A) $3.50 plus (B) the product of 0.525 and the average closing sales price for a share of IDT common stock as reported on NASDAQ for the 20 consecutive trading days ending with and including the trading day that is two trading days before the closing date of the merger, and the denominator of which is the average closing sales price for a share of IDT common stock as reported on NASDAQ for the 20 consecutive trading days ending with and including the trading day that is two trading days before the closing date of the merger.

Immediately prior to the effective time of the merger, each then outstanding option that is not converted into an option to acquire shares of IDT common stock will be cancelled and converted into a right to receive an amount in cash (subject to all applicable withholding and other taxes), if any, equal to (a) the total number of shares of PLX common stock subject to each such stock option that were vested as of the effective time of the merger (including, with respect to employees of PLX who cease to be employees or other service providers immediately prior to the effective time or otherwise in connection with the merger, shares that vested in connection with the merger), multiplied by (b) an amount equal to the excess, if any, of (i) $3.50 plus (ii) the product of the closing price of a share of IDT common stock on the closing date of the merger multiplied by 0.525, over the exercise price per share subject to such option immediately prior to cancellation.

Immediately prior to the effective time of the merger, each restricted stock unit, or “RSU,” representing a right to receive shares of PLX common stock held by an employee of PLX who continues as an employee of IDT or an affiliate of IDT after the effective time will be converted into an RSU representing a right to receive a number of shares of IDT common stock equal to the number of shares of PLX common stock subject to each RSU as of the effective time of the merger multiplied by the equity exchange ratio described above, rounded down to the nearest whole share. All other RSUs will be cancelled and terminated for no additional consideration.

Based on PLX’s estimated shares of common stock and equity awards outstanding as of July 27, 2012, and assuming that all equity awards remain outstanding as of the Closing, the preliminary estimated acquisition consideration is as follows (in thousands):

Preliminary Estimated Acquisition Consideration

Number of shares of PLX common stock outstanding at July 27, 2012		44,916
Per share exchange ratio		0.525
Number of shares of IDT common stock—as exchanged		53,581
Multiplied by IDT common stock price on July 27, 2012	$	5.03
Estimated fair value of IDT common stock issued			$	118,612
Fair value of the vested portion of PLX employee stock options outstanding—5.0 million at July 27, 2012(1)			$	8,492
Fair value of the restricted stock of PLX outstanding—0.2 million at July 27, 2012(2)			$	1,492
Estimated cash distribution to PLX common stockholders				157,206
Total Preliminary Estimated Acquisition Consideration			$	285,801

(1) Under ASC 805, the fair value of equity awards attributed to pre-combination services is accounted for as purchase price consideration. Estimated fair value of PLX employee stock options outstanding at July 27, 2012 was $16.8 million, of which an estimated $8.5 million is attributed to pre-combination (merger) related services and accounted for as purchase price consideration under ASC 805.

(2) On May 1, 2012, PLX granted 199,000 RSUs to certain PLX employees. The RSUs will vest on January 1, 2013 and will convert into RSUs convertible into shares of IDT common stock immediately prior to the effective time of the merger. The RSUs are also subject to accelerated vesting upon involuntary termination without cause. The estimated fair value of such RSUs granted is approximately $1.5 million, a portion of which (depending on the effective date of the merger) will be attributed to pre-combination (merger) related services and accounted for as purchase price consideration under ASC 805.

Based on IDT’s preliminary estimates used for purposes of the unaudited pro forma condensed combined financial statements, IDT will issue approximately 23.6 million shares of IDT common stock, issue approximately 6.1 million options to acquire shares of IDT common stock (based on an estimated equity exchange ratio of 1.0322) and pay approximately $157.2 million in cash to PLX stockholders.

3. Preliminary Estimated Purchase Price Allocation

Under the acquisition method of accounting, the total acquisition consideration for each of the acquisition of the NXP DC Business and the completion of the offer and the merger with PLX is allocated to the acquired tangible and intangible assets and assumed liabilities of the NXP DC Business and PLX, respectively, based on their estimated fair values as of July 19, 2012, the completion date of the acquisition of the NXP DC Business, and the closing of offer and the merger with PLX, respectively. The excess of the acquisition consideration over the fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill.

The allocation of the estimated acquisition consideration for PLX is preliminary because the proposed offer and merger with PLX have not yet been completed. The preliminary allocation for each of PLX and the NXP DC Business is based on estimates, assumptions, valuations and other studies which have not progressed to a stage where there is sufficient information to make a definitive allocation. Accordingly, the acquisition consideration allocation pro forma adjustments will remain preliminary until IDT management determines the final acquisition consideration and the fair values of assets acquired and liabilities assumed. The final determination of the acquisition consideration allocation is anticipated to be completed as soon as practicable after the completion of the offer and the merger with PLX and will be based on the value of the IDT share price at the closing of the transaction, and the final determination of the acquisition consideration allocation for the acquisition of the NXP

DC Business will be completed as soon as practicable hereafter. The final amounts allocated to assets acquired and liabilities assumed could differ significantly from the amounts presented in the unaudited pro forma condensed combined financial statements.

The total preliminary estimated acquisition consideration as shown in the table above is allocated to PLX’s and NXP DC Business tangible and intangible assets and liabilities based on their preliminary estimated fair values as follows (in thousands):

Preliminary Estimated Purchase Price Allocation

		PLX				NXP DC Business
Cash and Equivalents		$	16,131			$	—
Accounts Receivable and Other Current Assets			16,597				—
Accounts Payable			(9,935	)			—
Accrued Expenses			(7,899	)			(1,542	)
Inventory			14,091				1,800
Property, Plant and Equipment			12,663				1,350
Debt			(9,000	)			—
Other LT Assets			1,041				18
Intangible Assets:
Existing Technology	93,100				4,600
In-process R&D					1,600
Customer Relationship	8,700				5,400
Backlog	700				—
Trade Name and Trademarks	1,700				—
Other intangible assets	—				600
Total Intangible Assets			104,200				12,200
Goodwill			147,912				17,336
Preliminary estimated acquisition consideration		$	285,801			$	31,162

Approximately $12.2 million and $104.2 million has been preliminarily allocated to amortizable intangible assets acquired in each of the acquisition of the NXP DC Business and the offer and the merger with PLX, respectively. The amortization related to the preliminary fair value of net amortizable intangible assets is reflected as a pro forma adjustment to the unaudited condensed combined pro forma financial statements.

Identifiable intangible assets. The preliminary fair values of intangible assets were determined based on the provisions of ASC 805, which defines fair value in accordance with ASC Topic 820, Fair Value Measurements and Disclosures, or “ASC 820.” ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or most advantageous market at the measurement date. Intangible assets were identified that met either the separability criterion or the contractual-legal criterion described in ASC 805. Intangible assets include existing technology, customer relationships, backlog and trade name/trademarks. Preliminary fair values for the intangible assets were determined based on the income approach method. The intangible assets (i.e., existing technology, customer relationships, and trade names/trademarks) are amortized on a straight-line basis over useful lives ranging from one to five years.

Goodwill. Goodwill represents the excess of the preliminary estimated acquisition consideration over the preliminary fair value of the underlying net tangible and intangible assets. Among the factors that contributed to a purchase price in excess of the fair value of the net tangible and intangible assets was the acquired workforce of experienced semiconductor engineers, synergies in products, technologies, skill sets, operations, customer base, and organizational cultures that can be leveraged to enable us to build an enterprise greater than the sum of its parts. In accordance with ASC Topic 350, Intangibles—Goodwill and Other, goodwill will not be amortized, but

instead will be tested for impairment at least annually and whenever events or circumstances have occurred that may indicate a possible impairment. In the event management determines that the value of goodwill has become impaired, the combined company will incur an accounting charge for the amount of the impairment during the period in which the determination is made.

4. Preliminary Pro Forma and Acquisition Accounting Adjustments

The pro forma adjustments are as follows (in thousands):

A    Adjustment to cash
To reflect cash used to purchase outstanding shares of PLX	(157,206	)
To reflect cash from financing facilities	185,000
To reflect restricted cash	(143,100	)
To reflect short-term investments converted to cash	30,000
	(85,306	)
B    Adjustment to debt
To reflect funding from financing facilities	185,000
	185,000
C    Adjustments in acquired intangibles assets, net
To eliminate PLX historical acquired intangible assets	(19,114	)
To record the fair value of PLX identifiable intangible assets	104,200
	85,086
D    Adjustment to goodwill
To eliminate PLX historical acquired goodwill	(21,338	)
To record the goodwill associated with the PLX acquisition	147,912
	126,574
E    Adjustments to record accrued expenses
IDT transaction expenses	2,857
PLX transaction expenses	4,693
	7,550
F    Adjustments in accumulated other comprehensive income
To eliminate PLX historical accumulated other comprehensive loss	183
	183
G    Adjustments in accumulated deficit
To eliminate PLX accumulated deficit	117,442
Adjustments to record accrued expenses	(7,550	)
	109,892
H    Adjustments to amortization of intangibles from acquisitions
For the year ended April 1, 2012
To eliminate historical amortization from intangibles from acquisitions
Selling, general and administrative	(10,639	)
To record amortization of identified intangibles acquired from PLX
Cost of revenues	18,620
Selling, general and administrative	4,140
For the three months ended July 1, 2012
To eliminate historical amortization from intangibles from acquisitions
Selling, general and administrative	(1,731	)
To record amortization of identified intangibles acquired from PLX
Cost of revenues	4,655
Selling, general and administrative	435
I    To reflect interest expense on financing facilities used to fund the acquisition of PLX
For the year ended April 1, 2012	(4,563	)
For the three months ended July 1, 2012	(1,141	)
J    Adjustment for step-up in fair value of inventory acquired as part of PLX	5,899
	5,899
K    Adjustment to eliminate PLX common stock	(185,867	)
	(185,867	)
L    To record the fair value of the portion of the purchase price expected to be paid in IDT stock	118,612
To record the fair value of the portion of the purchase price expected to be paid in form of IDT stock options	9,983
	128,595

M   To eliminate the balances of PLX shares used in computing basic and diluted net income (loss) per share, and to reflect       expected exchange of PLX common stock into IDT common stock	(44,559	)
For the year ended April 1, 2012
Reflect effect of shares of IDT common stock issued in exchange for PLX shares of common stock	23,581
Estimated impact on weighted average shares outstanding—basic	(20,978	)
Reflect dilutive effect of PLX stock options and RSUs converted to IDT stock options and RSUs	2,666
Estimated impact on weighted average shares outstanding—diluted	(18,312	)
For the three months ended July 1, 2012
Reflect and to reflect expected exchange of PLX common stock into IDT common stock	(44,729	)
Reflect effect of shares of IDT common stock issued in exchange for PLX shares of common stock	23,581
Estimated impact on weighted average shares outstanding—basic	(21,148	)
Reflect dilutive effect of PLX stock options and RSUs converted to IDT stock options and RSUs	2,609
Estimated impact on weighted average shares outstanding—diluted	(18,539	)
N    To record adjustments to deferred tax balances related to changes in fair value in connection with the purchase price       allocation and the recording of the purchased intangible assets. The result of this change is the recording of a net deferred tax       liability of approximately $37.1 million and a commensurate reduction of PLX’s valuation allowance	—
O    Adjustment to cash
To reflect cash used to purchase NXP’s DC Business	(31,162	)
P    Adjustment for step-up in fair value of inventory acquired as part of NXP DC Business purchase	745
	745
Q    Adjustments in acquired intangibles assets, net
To eliminate NXP DC Business historical acquired intangible assets	(109	)
To record the fair value of NXP DC Business identifiable intangible assets	12,299
	12,091
R    Adjustment to goodwill
To record the goodwill associated with the NXP DC Business acquisition	17,336
	17,336
S    Adjustments to record accrued expenses related to NXP DC Business acquistion
IDT transaction expenses	225
	225
T    Adjustments to amortization of intangibles from acquisitions
For the year ended April 1, 2012
To eliminate historical amortization from intangibles from acquisitions
Selling, general and administrative	(21	)
To record amortization of identified intangibles acquired from PLX and NXP DC Business
Cost of revenues	920
Selling, general and administrative	1,275
For the three months ended July 1, 2012
To eliminate historical amortization from intangibles from acquisitions
Selling, general and administrative	(4	)
To record amortization of identified intangibles acquired from PLX and NXP DC Business
Cost of revenues	230
Selling, general and administrative	169
U    Adjustments in NXP DC Business Net Asset to be Sold
To eliminate NXP DC Business net asset to be sold	(990	)
Adjustments to record accrued expenses	(255	)
	(1,245	)

As noted previously, these unaudited condensed combined financial statements were based on estimates of the consideration to be paid to PLX stockholders in the offer and the merger with PLX, which is equal to, per share of PLX common stock, (i) 0.525 of a share of IDT common stock and (ii) $3.50 in cash. Based upon a closing price of $5.03 for IDT common stock on July 27, 2012, the total preliminary estimated acquisition consideration is estimated to be $285.8 million, consisting of the value of 23.6 million shares of IDT common stock to be issued to PLX stockholders in the offer and the merger with PLX, $10.0 million for the fair value of the vested portion of PLX employee stock options outstanding and RSUs outstanding at July 27, 2012 and assumed by IDT in the merger, and $157.2 million in cash to be paid to PLX stockholders in the offer and the merger. The ultimate acquisition consideration will be impacted by the price of IDT’s common stock immediately prior to the effective time of the merger. For example, if IDT’s common stock price increases or decreases by a factor of 20% from $5.03 a share from July 27, 2012, the acquisition consideration will increase or decrease respectively by $23.7 million.

The pro forma information is presented solely for informational purposes and is not necessarily indicative of the combined results of operations or financial position that might have been achieved for the periods or dates indicated, nor is it necessarily indicative of the future results of the combined company.

5. IDTI Financing

IDT has secured commitments from J.P. Morgan to provide senior secured credit facilities in connection with the offer and merger with PLX, which include (a) a revolving credit facility in an initial aggregate principle amount of $50 million, or the “revolving credit facility,” and (b) a term loan facility in an aggregate principal amount of up to $25 million, or the “term loan facility” and together with the revolving credit facility, the “credit facilities.” The revolving credit facility will be available on a revolving basis during the period commencing on the closing date of the merger and ending on the fifth anniversary thereof. IDT may only borrow amounts under the credit facilities if the offer is successful, all of the conditions to the offer are satisfied or, where permissible, amended or waived in a manner that is not material and adverse to J.P. Morgan, prior to October 30, 2012. The term loan facility is only available in a single drawing on the closing date of the merger, and the term loan facility is only available to IDT on the closing date of the merger if certain financial conditions are met. If drawn, the term loan facility will mature on the one year anniversary of the closing date of the merger with PLX. The proceeds of the revolving credit facility and the term loan facility can be used to finance all or a portion of the consideration for the offer and the merger and fees and expenses related thereto, and the revolving credit facility can be used for general corporate purposes of IDT and its subsidiaries in the ordinary course of business. Loans under both the revolving credit facility and the term loan facility are expected to bear interest, at IDT’s option, at a rate equal to either (a) the “ABR,” defined as the greatest of (i) J.P. Morgan’s prime rate, (ii) the federal funds effective rate plus 0.5% and (iii) the adjusted one-month LIBO rate plus 1.0%, plus the applicable margin, or (b) the adjusted LIBO rate plus the applicable margin. For purposes of the revolving credit facility and term loan facility, “applicable margin” means 2.5% in respect of loans bearing interest based upon the adjusted LIBO rate and 1.5% in respect of loans bearing interest based upon the ABR.

On June 13, 2011, IDT entered into a Master Repurchase Agreement, or the “repurchase agreement,” with Bank of America, N.A., or “Bank of America,” pursuant to which IDT has the right, subject to the terms and conditions of the Repurchase Agreement, to sell to Bank of America up to 1,431 shares of Class A Preferred Stock in one or more transactions prior to December 13, 2012, which we refer to as the “purchased securities,” for an aggregate purchase price of $135 million in cash with respect to all such shares of preferred stock. Pursuant to the repurchase agreement, IDT is obligated to repurchase from Bank of America, and Bank of America is obligated to resell to the Company, the purchased securities on June 13, 2016 for an aggregate repurchase price equal to the aggregate purchase price paid by Bank of America for such purchased securities plus any accrued and unpaid “price differential,” as described in the repurchase agreement. Under the repurchase agreement , the Company is obligated to make monthly “price differential” payments (as defined in the repurchase agreement) to Bank of America based on the outstanding purchase price of the purchased securities at a floating interest rate of LIBOR plus 2.125%, which are calculated and accrue on a daily basis, and Bank of America is required to remit to the Company any dividends and other distributions that it receives on the purchased securities, unless an event of default with respect to the Company has occurred and is continuing under the repurchase agreement. No draw has taken place on this facility to date. When drawn, the payments of “price differential” to Bank of America under the repurchase agreement will be expensed as interest expense, and $143.1 million of IDT cash will become restricted.

The unaudited pro forma condensed combined financial data assumes that IDT will finance the cash portion of the merger transaction through the full draw of the J.P. Morgan revolving credit facility of $50 million, combined with borrowing $135 million through the Bank of America master repurchase agreement. For purposes of adjusting interest expense in the pro forma financial data, IDT has estimated the weighted average interest on the anticipated borrowings to be LIBOR plus 2.23% or approximately 2.47%. Actual amounts borrowed, and interest rates payable, will depend upon IDT’s cash balances at the time of the merger and conditions in the capital markets, principally prevailing interest rates, at the time the offer and the merger is completed and prevailing interest rates over the period of time when any such amounts borrowed remain outstanding under such facilities. The effect on interest expense and income of a 0.125% variance in LIBOR is not material.