Earnings Release • Jan 30, 2013
Earnings Release
Open in ViewerOpens in native device viewer
PR No. C2705C
Geneva, January 30, 2013 - STMicroelectronics (NYSE: STM) reported financial results for the fourth quarter and full year ended December 31, 2012.
Fourth quarter net revenues totaled \$2.16 billion and gross margin was 32.3%. Net loss attributable to parent company was \$428 million, mainly due to a charge of \$544 million for the impairment of Wireless goodwill and other intangible assets following the Company's decision to exit the ST-Ericsson joint venture after the communicated transition period as part of the Company's new strategic plan announced on December 10, 2012.
President and CEO Carlo Bozotti commented, "In the fourth quarter, both revenue and gross margin results came in above the midpoint of our guidance despite the ongoing softness in the semiconductor market. We extended our leadership in key areas. Thanks to new product momentum, revenues from our wholly-owned businesses increased 0.2% and 1.6% on a sequential and year-ago basis driven by a very strong ramp of our MEMS products in the fourth quarter.
"Looking at 2012 overall, we improved our net financial position compared to 2011 despite the significant cash used by ST-Ericsson as well as the impact of weak business conditions. We were able to end the year with significant financial flexibility and strong cash balances while providing shareholders with the same level of dividend compared to 2011.
"Important decisions were made in 2012 that are shaping a new, more focused, higherperforming ST. In December, we announced our new strategic plan targeting leadership in two product segments: Sense & Power and Automotive Products and Embedded Processing Solutions. This new strategy includes a sharper focus on five growth drivers: MEMS and sensors, Smart Power, automotive products, microcontrollers, and application processors including digital consumer products. Importantly, from a financial model perspective, we are targeting an operating margin of 10% or more. A key component to achieving this objective is bringing our net operating expenses to an average quarterly rate in the range of \$600 million to \$650 million by the beginning of 2014.
"In connection with our strategic plan, we decided to exit ST-Ericsson after a transition period and our actions this past quarter, including the further impairment charge, are aligned with moving this decision forward."
-----
(*) ST net financial position is a non-U.S. GAAP measure. Please refer to Attachment A for additional information explaining why the Company believes this measure is important and for reconciliation to U.S. GAAP.
| Q4 2012 | Q3 2012 | Q4 2011 |
|---|---|---|
| 2,162 | 2,166 | 2,191 |
| 32.3% | 34.8% | 33.4% |
| (730) | (792) | (132) |
| (428) | (478) | (11) |
(a) Net revenues include sales recorded by ST-Ericsson as consolidated by ST
| Non-U.S. GAAP* Before impairment, restructuring and one-time items (In Million US\$) |
Q4 2012 | Q3 2012 | Q4 2011 |
|---|---|---|---|
| Operating Income (Loss) | (142) | (79) | (123) |
| Operating Margin | (6.5%) | (3.6%) | (5.6%) |
| Operating Margin – attributable to ST | (3.3%) | 0.3% | (0.2%) |
In the fourth quarter, ST's wholly-owned businesses' revenue increased 0.2% and 1.6% on a sequential and year-ago basis, respectively. Wireless product-segment revenues decreased by 2.2% sequentially, and included revenue from IP licensing of \$43 million compared to \$35 million in the prior quarter. The Japan & Korea and Greater China & South Asia regions grew sequentially 16% and 1%, respectively, while the Americas and EMEA decreased 0.4% and 13%, respectively.
Fourth quarter gross margin decreased 250 basis points sequentially to 32.3% mainly due to negative price effect, lower volumes that were associated with the planned reduction in inventory that resulted in the underloading of ST's wafer fabs partially offset by favorable product mix; as a result of the inventory reduction unsaturation charges in the fourth quarter of 2012 were \$66 million compared to \$19 million and \$99 million in the prior and year-ago quarters, respectively.
Combined SG&A and R&D expenses increased 3% to \$876 million compared to \$852 million in the prior quarter mainly due to unfavorable seasonal effects. Combined operating expenses as a percentage of sales were 40.5% in the 2012 fourth quarter compared to 39.3% in the prior quarter.
Restructuring and impairment charges for the fourth and third quarters were \$588 million and \$713 million, respectively, principally reflecting non-cash impairment charges on Wireless goodwill and other intangible assets bringing the investment value of ST-Ericsson on our books to a negligible amount.
Operating margin before impairment, restructuring and one-time items attributable to ST decreased to negative 3.3% in the 2012 fourth quarter compared to positive 0.3% in the prior quarter.*
Income tax expense in the fourth quarter was \$39 million mainly due to the write-off of ST-Ericsson deferred tax assets following ST's decision to exit from the joint venture after a transition period.
In the fourth quarter of 2012, net loss attributable to non-controlling interests was \$361 million, which mainly included the 50% owned by Ericsson in the ST-Ericsson joint venture, as consolidated by ST. In the third quarter of 2012, the corresponding amount was \$351 million.
----- (*)Operating income (loss) before impairment, restructuring and one-time items, operating margin before impairment, restructuring and onetime items, operating margin before impairment, restructuring and one-time items attributable to ST and adjusted net earnings per share are non-U.S. GAAP measures. For additional information and reconciliation to U.S. GAAP, please refer to Attachment A.
Fourth quarter net loss attributable to parent company was \$428 million or \$(0.48) per share, compared to a net loss of \$(0.54) and \$(0.01) per share in the prior and year-ago quarters, respectively. On an adjusted basis, net of related taxes, ST reported a non-U.S. GAAP net loss per share of \$(0.11), excluding impairment, restructuring charges and one-time items in the fourth quarter, compared to a net loss of \$(0.03) and \$(0.01) per share in the prior and year-ago quarters, respectively.*
For the fourth quarter of 2012, the effective average exchange rate for the Company was approximately \$1.30 to €1.00, compared to \$1.29 to €1.00 for the third quarter of 2012, and \$1.36 to €1.00 for the fourth quarter of 2011.
| Net Revenues By Market Channel (In %) |
Q4 2012 | Q3 2012 | Q4 2011 |
|---|---|---|---|
| Total OEM | 77% | 76% | 80% |
| Distribution | 23% | 24% | 20% |
| Operating Segment (In Million US\$) |
Q4 2012 Net |
Q4 2012 Operating |
Q3 2012 Net |
Q3 2012 Operating |
Q4 2011 Net |
Q4 2011 Operating |
|---|---|---|---|---|---|---|
| Revenues | Income | Revenues | Income | Revenues | Income | |
| (Loss) | (Loss) | (Loss) | ||||
| Automotive (APG) | 368 | 20 | 391 | 34 | 383 | 41 |
| Analog, MEMS & Microcontrollers (AMM) |
864 | 120 | 804 | 101 | 747 | 116 |
| Digital | 320 | (51) | 325 | (30) | 388 | 9 |
| Power Discrete (PDP) | 245 | 3 | 275 | 18 | 253 | 16 |
| Wireless (a) | 351 | (168) | 359 | (184) | 409 | (211) |
| Others (b)(c) | 14 | (654) | 12 | (731) | 11 | (103) |
| TOTAL | 2,162 | (730) | 2,166 | (792) | 2,191 | (132) |
(a) Wireless includes the portion of sales and operating results of ST-Ericsson as consolidated in the Company's revenues and operating results, as well as other items affecting operating results related to the wireless business.
(b) Net revenues of "Others" includes revenues from sales of Subsystems, assembly services and other revenues.
(c) Operating income (loss) of "Others" includes items such as unused capacity charges, impairment, restructuring charges and other related closure costs, phase out and start-up costs and other unallocated expenses such as: strategic or special research and development programs, certain corporate-level operating expenses, patent claims and litigations, and other costs that are not allocated to product groups, as well as operating earnings of the Subsystems and Other Products Group. "Others" includes \$66 million, \$19 million and \$99 million of unused capacity charges in the fourth and third quarters of 2012 and fourth quarter of 2011, respectively; and \$588 million, \$713 million and \$9 million of impairment, restructuring charges and other related closure costs in the fourth and third quarters of 2012 and fourth quarter of 2011, respectively.
Automotive (APG) fourth quarter net revenues decreased 6.0% sequentially, mainly driven by difficult market conditions. APG fourth quarter operating margin was 5.6%, compared to 8.6% in the prior quarter due to lower revenues.
Analog, MEMS and Microcontrollers (AMM) fourth quarter net revenues increased 7.4% sequentially driven by MEMS, secure microcontrollers and analog applications. AMM operating margin increased to 13.9% in the 2012 fourth quarter, compared to 12.6% in the prior quarter mainly due to higher volumes of motion MEMS.
(*)Operating income (loss) before impairment, restructuring and one-time items, operating margin before impairment, restructuring and onetime items, operating margin before impairment, restructuring and one-time items attributable to ST and adjusted net earnings per share are non-U.S. GAAP measures. For additional information and reconciliation to U.S. GAAP, please refer to Attachment A.
Digital fourth quarter net revenues decreased 1.7% sequentially principally due to weak demand for digital consumer products. Digital operating margin was negative 15.8% in the 2012 fourth quarter mainly due to manufacturing efficiencies related to a sharp decrease in loadings, compared to negative 9.0% in the prior quarter.
Power Discrete (PDP) fourth quarter net revenues decreased 11.0% sequentially due to weak market demand. PDP operating margin decreased to 1.1% in the 2012 fourth quarter compared to 6.4% in the prior quarter due to lower revenues.
Wireless net revenues in the fourth quarter decreased 2.2%, compared to the prior quarter. Revenue results reflected ST-Ericsson's continued ramp of NovaThor platforms as well as \$43 million from IP licensing, which was more than offset by the decrease in legacy products sales. Wireless operating loss, excluding ST-Ericsson impairment and restructuring charges, was \$168 million in the fourth quarter, compared to a loss of \$184 million in the prior quarter. For additional information, see ST-Ericsson's Q4 2012 earnings results press release at www.st.com and at www.stericsson.com
The Company significantly reduced capital expenditures, net of proceeds from sales, in 2012, at \$476 million compared to \$1.26 billion in 2011. During the fourth quarter capital expenditures net of proceeds from sales were \$78 million in line with the year-ago period and, as expected, significantly below the prior quarter.
Managing inventory levels during 2012 was a key priority with inventory at December 31, 2012, of \$1.35 billion, compared to \$1.53 billion at December 31, 2011. Inventory in the fourth quarter of 2012 was at 4.3 turns or 84 days, compared to the year-ago period of 3.8 turns or 95 days.
During 2012, dividends paid to stockholders totaled \$355 million, including the fourth quarter dividend of \$89 million.
For the full year, free cash flow* was slightly positive. Reversing two quarters of negative cash flow and despite significant cash still used at ST-Ericsson, free cash flow in the fourth quarter was \$145 million compared to negative \$80 million in the prior quarter and positive \$47 million in the year-ago period.
ST continued to maintain a solid attributable net financial position* with a net cash position of \$1.19 billion at December 31, 2012, compared to \$1.17 billion, adjusted to balance out the 50% of ST-Ericsson's debt, at December 31, 2011. ST's cash and cash equivalents, marketable securities, shortterm deposits and restricted cash equaled \$2.49 billion and total debt was \$1.30 billion. During the fourth quarter, ST and Ericsson waived their loan to ST-Ericsson for an amount of \$1,546 million. As a consequence, the Ericsson portion of \$773 million was recorded as a contribution from noncontrolling interest and reduced ST's consolidated debt.
Total equity, including non-controlling interest, was \$6.36 billion at year end.
(*)Free cash flow and net financial position are non-U.S. GAAP measures. For additional information and reconciliation to U.S. GAAP, please refer to Attachment A.
Net revenues for 2012 decreased 12.8% to \$8.49 billion mainly due to lower unit volumes which were driven by a significant drop in sales at our former largest customer and weaker market conditions.
Gross profit and gross margin decreased 22% to \$2.78 billion and 390 basis points to 32.8% respectively. The principal components of the gross margin decrease were negative price effect and unused capacity charges of \$172 million compared to \$149 million in 2011, as well as a onetime \$53 million charge to ST's cost of sales due to an arbitration award recorded in the first quarter 2012, partially offset by positive currency effects.
ST's income taxes for the full year 2012 in part reflected the write-off of ST-Ericsson deferred tax assets in the fourth quarter. Excluding the ST-Ericsson impact and certain discrete items, ST's annual effective tax rate in 2012 would have been about 16%.
Net loss as reported was \$1.16 billion in 2012, or \$(1.31) per share. On an adjusted basis, net of related taxes, ST reported a non-U.S. GAAP net loss per share of \$(0.33) excluding impairment, restructuring charges and one-time items. In 2011, net income was \$650 million, or \$0.72 diluted earnings per share, and on an adjusted basis was \$0.41 non-GAAP diluted earnings per share.*
The effective average exchange rate for the Company was approximately \$1.31 to €1.00 for 2012, compared to \$1.37 to €1.00 for 2011.
| Operating Segment (In Million US\$) |
FY 2012 Net Revenues |
FY 2012 Operating Income (Loss) |
FY 2011 Net Revenues |
FY 2011 Operating Income (Loss) |
|---|---|---|---|---|
| Automotive (APG) | 1,554 | 129 | 1,678 | 227 |
| Analog, MEMS & Microcontrollers(AMM) |
3,200 | 418 | 3,377 | 606 |
| Digital | 1,334 | (154) | 1,839 | 108 |
| Power Discrete (PDP) | 1,015 | 18 | 1,240 | 139 |
| Wireless | 1,345 | (885) | 1,552 | (812) |
| Others | 45 | (1,607) | 49 | (222) |
| TOTAL | 8,493 | (2,081) | 9,735 | 46 |
Mr. Bozotti stated, "In the first quarter, we expect our wholly-owned businesses to deliver a better than seasonal revenue performance, with a sequential decrease of about 3% at the midpoint, despite weak macro-economic conditions. Including Wireless, we expect an overall revenue decrease of about 7% at the midpoint of our guidance as ST-Ericsson anticipates a very significant sequential decrease in net sales.
(*) Adjusted net earnings per share are a non-U.S. GAAP measure. For additional information and reconciliation to U.S. GAAP, please refer to Attachment A.
"More broadly, semiconductor market conditions are expected to improve in 2013, driven by a more favorable economic environment. Even today, there are initial signs of a mild recovery. At ST, we expect to outperform the market with our Sense & Power and Automotive Products and Embedded Processing Solutions segments. In particular, we expect imaging, microcontrollers, analog and MEMS to be the highest contributors to our revenue performance.
"With respect to ST-Ericsson, we are finalizing our decision regarding available strategic options. While we do not underestimate the challenges related to the transition, we are committed to ensure a smooth and timely exit.
"Overall, ST will be a much stronger Company with a re-sized cost base, sharpened product focus and stronger market position."
The Company expects first quarter 2013 revenues to decrease sequentially in the range of about -7%, plus or minus 3.5 percentage points. Reflecting lower unsaturation charges but no revenues from licensing compared to the fourth quarter, gross margin in the first quarter is expected to be about 31.4%, plus or minus 2.0 percentage points.
ST, following its announcement to exit ST-Ericsson after a transition period that is expected to end during the third quarter of 2013, is finalizing its decision regarding available strategic options. Our current best estimate is that ST could have funding requirements, including the ongoing operations of ST-Ericsson during the transition period and restructuring costs, in the range of approximately \$300 million to \$500 million during 2013, taking into account the impact of the strategic options.
This outlook is based on an assumed effective currency exchange rate of approximately \$1.31 = €1.00 for the 2013 first quarter and includes the impact of existing hedging contracts. The first quarter will close on March 30, 2013.
• On December 10, ST announced its new strategic plan, vision and financial model. The outcome of a strategic review started more than a year ago as the company saw major changes in the dynamics of the wireless market. The plan is aimed at making the new ST more focused, leaner and better positioned to deliver value to customers and shareholders. The plan emphasizes two product-segment organizations that together address a growing \$140 billion market shared roughly equally: Sense & Power and Automotive Products and Embedded Processing Solutions.
The Sense & Power and Automotive Products Sector builds on ST's leading positions in MEMS and sensors, power discrete and advanced analog products, as well as automotive powertrain, safety, body and infotainment products. The Embedded Processing Solutions Sector focuses on the core of the electronics systems rather than on wireless broadband access and includes microcontrollers, imaging products, digital consumer products, application processors and digital ASICs.
As part of the new plan, ST said it would exit its investment in ST-Ericsson after a transition period. ST emphasized that it would continue to pursue significant growth opportunities in wireless through its leading product portfolio and would continue to support ST-Ericsson as its supply-chain partner, advanced process-technology partner (FD-SOI) and applicationprocessor IP provider.
In the announcement, ST also revealed its new financial model, in which the company is targeting an operating margin of 10 percent or more. In order to achieve the new financial model, ST is targeting a reduction in quarterly net operating expenses to an average quarterly rate in the range of \$600 million to \$650 million by the beginning of 2014.
• On December 11, ST announced its progress in making available its 28nm FD-SOI Technology Platform from its Crolles (France) 300mm manufacturing facility. The siliconverified process technology has now proven that it can deliver 30% higher speed at the same power and up to 50% greater power efficiency at the same performance as bulk processes at comparable cost. Ready for pre-production, this step confirms ST's ability to provide its planar fully-depleted technology from the 28nm technology node, essential to meeting the industry's highest performance and lowest power demands.
During the quarter, ST made strong progress with important new-product introductions and significant design wins.
iNEMO, IPAD, Orly, Sound Terminal, STM8 and STM32 are trademarks of STMicroelectronics. NovaThor is a trademark of ST-Ericsson. All other trademarks are the property of their respective owners.
This press release contains supplemental non-U.S. GAAP financial information, including operating income (loss) before impairment, restructuring and one-time items, operating margin before impairment, restructuring and one-time items, operating margin before impairment, restructuring and one-time items attributable to ST, adjusted net earnings, adjusted net earnings per share, free cash flow, net financial position and net financial position, adjusted to account for 50% investment in ST-Ericsson.
Readers are cautioned that these measures are unaudited and not prepared in accordance with U.S. GAAP and should not be considered as a substitute for U.S. GAAP financial measures. In addition, such non-U.S. GAAP financial measures may not be comparable to similarly titled information by other companies.
See Attachment A of this press release for a reconciliation of the Company's non-U.S. GAAP financial measures to their corresponding U.S. GAAP financial measures. To compensate for these limitations, the supplemental non-U.S. GAAP financial information should not be read in isolation, but only in conjunction with the Company's consolidated financial statements prepared in accordance with U.S. GAAP.
Some of the statements contained in this release that are not historical facts are statements of future expectations and other forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended) that are based on management's current views and assumptions, and are conditioned upon and also involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those anticipated by such statements, due to, among other factors:
our ability to maintain or improve our competitiveness especially in light of volatility in the foreign exchange markets and, more particularly, in the U.S. dollar exchange rate as compared to the Euro and the other major currencies we use for our operations;
the impact of intellectual property ("IP") claims by our competitors or other third parties, and our ability to obtain required licenses on reasonable terms and conditions;
Such forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of our business to differ materially and adversely from the forward-looking statements. Certain forward-looking statements can be identified by the use of forward looking terminology, such as "believes," "expects," "may," "are expected to," "should," "would be," "seeks" or "anticipates" or similar expressions or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans or intentions.
Some of these risk factors are set forth and are discussed in more detail in "Item 3. Key Information — Risk Factors" included in our Annual Report on Form 20-F for the year ended December 31, 2011, as filed with the SEC on March 5, 2012. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this release as anticipated, believed or expected. We do not intend, and do not assume any obligation, to update any industry information or forward-looking statements set forth in this release to reflect subsequent events or circumstances.
On January 31, 2013, the management of STMicroelectronics will host an earnings presentation in Paris and will also conduct a conference call to discuss performance for the fourth quarter and full year of 2012.
The earnings presentation will be held at 5:00 a.m. U.S. Eastern Time / 11:00 a.m. CET and the conference call at 9:00 a.m. U.S. Eastern Time / 3:00 p.m. CET. Both the earnings presentation and conference call will be available live via the Internet by accessing http://investors.st.com. Those accessing the webcast should go to the Web site at least 15 minutes prior to the call, in order to register, download and install any necessary audio software.
ST is a global leader in the semiconductor market serving customers across the spectrum of sense and power and automotive products and embedded processing solutions. From energy management and savings to trust and data security, from healthcare and wellness to smart consumer devices, in the home, car and office, at work and at play, ST is found everywhere microelectronics make a positive and innovative contribution to people's life. By getting more from technology to get more from life, ST stands for life.augmented.
Further information on ST can be found at www.st.com
(tables attached)
INVESTOR RELATIONS: Tait Sorensen Group VP, Investor Relations Tel: +1 602 485 2064 [email protected]
MEDIA RELATIONS: Maria Grazia Prestini Group VP, Corporate Media and Public Relations STMicroelectronics Tel: + 41 22 929 6945
The supplemental non-U.S. GAAP information presented in this press release is unaudited and subject to inherent limitations. Such non-U.S. GAAP information is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for U.S. GAAP measurements. Also, our supplemental non-U.S. GAAP financial information may not be comparable to similarly titled non-U.S. GAAP measures used by other companies. Further, specific limitations for individual non-U.S. GAAP measures, and the reasons for presenting non-U.S. GAAP financial information, are set forth in the paragraphs below. To compensate for these limitations, the supplemental non-U.S. GAAP financial information should not be read in isolation, but only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP.
Operating income (loss) before, impairment, restructuring and one-time items is used by management to help enhance an understanding of ongoing operations and to communicate the impact of the excluded items, such as impairment, restructuring charges and other related closure costs. Adjusted net earnings and earnings per share (EPS) are used by management to help enhance an understanding of ongoing operations and to communicate the impact of the excluded items like impairment, restructuring charges and other related closure costs attributable to ST, and other one-time items net of the relevant tax impact.
Operating income (loss) before impairment, restructuring and one-time items attributable to ST is calculated as operating income (loss) before impairment, restructuring and one-time items excluding 50% of ST-Ericsson operating income (loss) before impairment, restructuring and one-time items as consolidated by ST. Operating margin before impairment, restructuring and one-time items attributable to ST is calculated as operating income (loss) before restructuring attributable to ST divided by reported revenues excluding 50% of ST-Ericsson revenues as consolidated by ST.
The Company believes that these non-GAAP financial measures provide useful information for investors and management because they measure the Company's capacity to generate profits from its business operations, excluding the effect of acquisitions and expenses related to the rationalizing of its activities and sites that it does not consider to be part of its on-going operating results, thereby offering, when read in conjunction with the Company's GAAP financials, (i) the ability to make more meaningful period-to-period comparisons of the Company's on-going operating results, (ii) the ability to better identify trends in the Company's business and perform related trend analysis, and (iii) an easier way to compare the Company's results of operations against investor and analyst financial models and valuations, which usually exclude these items.
| Q4 2012 (US\$ millions and cents per share) |
Gross Profit | Operating Income (loss) |
Net Earnings | Corresponding EPS |
|---|---|---|---|---|
| U.S. GAAP | 697 | (730) | (428) | (0.48) |
| Impairment & Restructuring | 588 | 307 | ||
| Estimated Income Tax Effect | (1) | |||
| Income Tax at ST Ericsson | 26 | |||
| Non-U.S GAAP | 697 | (142) | (96) | (0.11) |
| Q3 2012 (US\$ millions and cents per share) |
Gross Profit | Operating Income (loss) |
Net Earnings | Corresponding EPS |
|---|---|---|---|---|
| U.S. GAAP | 753 | (792) | (478) | (0.54) |
| Impairment & Restructuring | 713 | 456 | ||
| Estimated Income Tax Effect | (7) | |||
| Non-U.S GAAP | 753 | (79) | (29) | (0.03) |
| Q4 2011 (US\$ millions and cents per share) |
Gross Profit | Operating Income (loss) |
Net Earnings | Corresponding EPS |
|---|---|---|---|---|
| U.S. GAAP | 732 | (132) | (11) | (0.01) |
| Impairment & Restructuring | 9 | 5 | ||
| Estimated Income Tax Effect | (2) | |||
| Non-U.S GAAP | 732 | (123) | (8) | (0.01) |
(continued)
Net financial position: resources (debt), represents the balance between our total financial resources and our total financial debt. Our total financial resources include cash and cash equivalents, marketable securities, short-term deposits and restricted cash, and our total financial debt includes shortterm borrowings, current portion of long-term debt and long-term debt, all as reported in our consolidated balance sheet. We believe our net financial position provides useful information for investors because it gives evidence of our global position either in terms of net indebtedness or net cash position by measuring our capital resources based on cash, cash equivalents and marketable securities and the total level of our financial indebtedness. Net financial position is not a U.S. GAAP measure.
| Net Financial Position (in US\$ millions) | December 31, 2012 |
September 29, 2012 |
December 31, 2011 |
|---|---|---|---|
| Cash and cash equivalents | 2,250 | 1,686 | 1,912 |
| Marketable securities | 238 | 237 | 413 |
| Short-term deposits | 1 | - | - |
| Restricted cash | - | - | 3 |
| Non-current restricted cash | 4 | 4 | 5 |
| Total financial resources | 2,493 | 1,927 | 2,333 |
| Short-term borrowings and current portion of long-term debt |
(630) | (1,260) | (740) |
| Long-term debt | (671) | (298) | (826) |
| Total financial debt | (1,301) | (1,558) | (1,566) |
| Net financial position | 1,192 | 369 | 767 |
| Net financial position, adjusted to account for 50% investment in ST-Ericsson |
1,192 | 1,064 | 1,167 |
Free cash flow is defined as net cash from operating activities minus net cash used in investing activities, excluding payment for purchases of and proceeds from the sale of marketable securities, short-term deposits and restricted cash. We believe free cash flow provides useful information for investors and management because it measures our capacity to generate cash from our operating and investing activities to sustain our operating activities. Free cash flow is not a U.S. GAAP measure and does not represent total cash flow since it does not include the cash flows generated by or used in financing activities. In addition, our definition of free cash flow may differ from definitions used by other companies.
| Free cash flow (in US\$ millions) | Q4 2012 | Q3 2012 | Q4 2011 |
|---|---|---|---|
| Net cash from (used in) operating activities | 252 | 148 | 137 |
| Net cash from (used in) investing activities | (107) | (203) | 43 |
| Payment for purchases of (proceeds from sale of) marketable securities, short-term deposits and restricted cash, net |
- | (25) | (133) |
| Free cash flow | 145 | (80) | 47 |
--end---
STMicroelectronics N.V.
Consolidated Statements of Income
(in millions of U.S. dollars, except per share data (\$))
| Three Months Ended | ||
|---|---|---|
| (Unaudited) | (Unaudited) | |
| December 31, | December 31, | |
| 2012 | 2011 | |
| Net sales | 2,111 | 2,170 |
| Other revenues | 51 | 21 |
| NET REVENUES | 2,162 | 2,191 |
| Cost of sales | (1,465) | (1,459) |
| GROSS PROFIT | 697 | 732 |
| Selling, general and administrative | (291) | (280) |
| Research and development | (585) | (614) |
| Other income and expenses, net | 37 | 39 |
| Impairment, restructuring charges and other related closure costs | (588) | (9) |
| Total Operating Expenses | (1,427) | (864) |
| OPERATING LOSS | (730) | (132) |
| Interest expense, net | (9) | (5) |
| Income (loss) on equity-method investments | (11) | (6) |
| Gain on financial instruments, net | - | 3 |
| LOSS BEFORE INCOME TAXES | (750) | (140) |
| AND NONCONTROLLING INTEREST | ||
| Income tax expense | (39) | (70) |
| NET LOSS | (789) | (210) |
| Net loss (income) attributable to noncontrolling interest | 361 | 199 |
| NET LOSS ATTRIBUTABLE TO PARENT COMPANY | (428) | (11) |
| EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS |
(0.48) | (0.01) |
| EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS |
(0.48) | (0.01) |
| NUMBER OF WEIGHTED AVERAGE | ||
| SHARES USED IN CALCULATING | ||
| DILUTED EARNINGS PER SHARE | 887.9 | 885.0 |
| Twelve Months Ended | ||
|---|---|---|
| (Unaudited) | (Audited) | |
| December 31, | December 31, | |
| 2012 | 2011 | |
| Net sales | 8,380 | 9,630 |
| Other revenues | 113 | 105 |
| NET REVENUES | 8,493 | 9,735 |
| Cost of sales | (5,710) | (6,161) |
| GROSS PROFIT | 2,783 | 3,574 |
| Selling, general and administrative | (1,166) | (1,210) |
| Research and development | (2,413) | (2,352) |
| Other income and expenses, net | 91 | 109 |
| Impairment, restructuring charges and other related closure costs | (1,376) | (75) |
| Total Operating Expenses | (4,864) | (3,528) |
| OPERATING INCOME (LOSS) | (2,081) | 46 |
| Other-than-temporary impairment charge and realized gain on financial assets | - | 318 |
| Interest expense, net | (35) | (25) |
| Loss on equity-method investments | (24) | (28) |
| Gain on financial instruments, net | 3 | 25 |
| INCOME (LOSS) BEFORE INCOME TAXES | (2,137) | 336 |
| AND NONCONTROLLING INTEREST | ||
| Income tax expense | (51) | (181) |
| NET INCOME (LOSS) | (2,188) | 155 |
| Net loss (income) attributable to noncontrolling interest | 1,030 | 495 |
| NET INCOME (LOSS) ATTRIBUTABLE TO PARENT COMPANY | (1,158) | 650 |
| EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS |
(1.31) | 0.74 |
| EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS |
(1.31) | 0.72 |
| NUMBER OF WEIGHTED AVERAGE | ||
| SHARES USED IN CALCULATING | ||
| DILUTED EARNINGS PER SHARE | 886.7 | 904.5 |
| STMicroelectronics N.V. | |||
|---|---|---|---|
| CONSOLIDATED BALANCE SHEETS | |||
| As at In millions of U.S. dollars |
December 31, 2012 |
September 29, 2012 |
December 31, 2011 |
| (Unaudited) | (Unaudited) | (Audited) | |
| ASSETS | |||
| Current assets: | |||
| Cash and cash equivalents | 2,250 | 1,686 | 1,912 |
| Restricted cash | - | - | 3 |
| Short-term deposits | 1 | - | - |
| Marketable securities | 238 | 237 | 413 |
| Trade accounts receivable, net | 1,005 | 1,040 | 1,046 |
| Inventories, net | 1,353 | 1,484 | 1,531 |
| Deferred tax assets | 137 | 155 | 141 |
| Assets held for sale | - | - | 28 |
| Other current assets | 518 | 612 | 506 |
| Total current assets | 5,502 | 5,214 | 5,580 |
| Goodwill | 141 | 370 | 1,059 |
| Other intangible assets, net | 213 | 554 | 645 |
| Property, plant and equipment, net | 3,481 | 3,611 | 3,920 |
| Non-current deferred tax assets | 414 | 365 | 332 |
| Restricted cash | 4 | 4 | 5 |
| Long-term investments | 119 | 114 | 121 |
| Other non-current assets | 560 | 480 | 432 |
| 4,932 | 5,498 | 6,514 | |
| Total assets | 10,434 | 10,712 | 12,094 |
| LIABILITIES AND EQUITY Current liabilities: |
|||
| Bank overdrafts | - | - | 7 |
| Short-term debt | 630 | 1,260 | 733 |
| Trade accounts payable | 797 | 864 | 656 |
| Other payables and accrued liabilities | 942 | 934 | 976 |
| Dividends payable to stockholders | 89 | 178 | 88 |
| Deferred tax liabilities | 11 | 1 | 14 |
| Accrued income tax | 86 | 84 | 95 |
| Total current liabilities Long-term debt |
2,555 671 |
3,321 298 |
2,569 826 |
| Post-retirement benefit obligations | 477 | 426 | 409 |
| Long-term deferred tax liabilities | 14 | 23 | 21 |
| Other long-term liabilities | 353 | 315 | 273 |
| 1,515 | 1,062 | 1,529 | |
| Total liabilities | 4,070 | 4,383 | 4,098 |
| Commitment and contingencies | |||
| Equity | |||
| Parent company stockholders' equity | |||
| Common stock (preferred stock: 540,000,000 shares | 1,156 | 1,156 | 1,156 |
| authorized, not issued; common stock: Euro 1.04 | |||
| nominal value, 1,200,000,000 shares authorized, | |||
| 910,559,805 shares issued, 887,953,202 shares | |||
| outstanding) | |||
| Capital surplus | 2,555 | 2,549 | 2,544 |
| Retained earnings | 1,959 | 2,388 | 3,504 |
| Accumulated other comprehensive income | 794 | 743 | 670 |
| Treasury stock | (239) | (240) | (271) |
| Total parent company stockholders' equity | 6,225 | 6,596 | 7,603 |
| Noncontrolling interest | 139 | (267) | 393 |
| Total equity Total liabilities and equity |
6,364 10,434 |
6,329 10,712 |
7,996 12,094 |
| STMicroelectronics N.V. | |||
|---|---|---|---|
| SELECTED CASH FLOW DATA | |||
| Cash Flow Data (in US\$ millions) | Q4 2012 | Q3 2012 | Q4 2011 |
| Net Cash from operating activities | 252 | 148 | 137 |
| Net Cash from (used in) investing activities | (107) | (203) | 43 |
| Net Cash from (used in) financing activities | 406 | (80) | (213) |
| Net Cash increase (decrease) | 564 | (120) | (61) |
| Selected Cash Flow Data (in US\$ millions) | Q4 2012 | Q3 2012 | Q4 2011 |
| Depreciation & amortization | 272 | 266 | 315 |
| Net payment for Capital expenditures | (78) | (203) | (76) |
| Dividends paid to stockholders | (89) | (89) | (89) |
| Change in inventories, net | 143 | 24 | 139 |
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.