STMicroelectronics Reports 2013 Fourth Quarter and Full Year Financial Results
* Fourth quarter financial results in line with expectations
* Fourth quarter net revenues $2.01 billion, up 3.9% year-over-year excluding
ST-Ericsson
* Positive free cash flow of $91 million in the fourth quarter*
Geneva, January 27, 2014 - STMicroelectronics (NYSE: STM), a global
semiconductor leader serving customers across the spectrum of electronics
applications, reported financial results for the fourth quarter and full year
ended December 31, 2013.
Fourth quarter net revenues totaled $2.01 billion, gross margin was 32.9%, and
net loss was $0.04 per share. For the full year net revenues totaled $8.08
billion, gross margin was 32.3%, and net loss was $0.56 per share.
"Fourth quarter revenue and gross margin results were well in line with our
outlook range, coming in at the mid-point of our guidance, which translated into
positive operating income before impairment and restructuring and a substantial
positive free cash flow," said ST President and CEO Carlo Bozotti.
"In 2013, we grew 3.2% excluding the former ST-Ericsson products, a better
performance than our served market, with the main contributions coming from our
microcontrollers and automotive products. We also made good progress on our
customer diversification and mass market and distribution initiatives. In
addition, our leading-edge set-top box products and FD-SOI-based ASICs led to
important design wins and traction with major worldwide operators and OEM
customers.
"We made solid progress in executing the strategy we announced in December 2012
but we still have much to accomplish. We completed the split up of ST-Ericsson
in a timely manner and by adding some of their competencies we strengthened our
product development teams. Furthermore, we brought our quarterly operating
expenses down by about 25 percent compared to the year-ago quarter and our
fourth quarter net operating expenses within our target range. We also started
to make gradual structural changes to our manufacturing footprint which will
benefit our gross margin and we announced a key frame agreement with the French
government to support our R&D efforts for CMOS derivative technology."
(*) Free cash flow is a non-U.S. GAAP measure. Please refer to Attachment A for
additional information explaining why the Company believes this measure is
important and for reconciliation to U.S. GAAP.
Summary Financial Highlights
+----------------------------------------------+-----+-----+-----+-----+-------+
|U.S. GAAP | Q4 | Q3 | Q4 | FY | FY |
|(Million US$) |2013 |2013 |2012 |2013 | 2012 |
+----------------------------------------------+-----+-----+-----+-----+-------+
|Net Revenues (a) |2,015|2,013|2,162|8,082| 8,493 |
+----------------------------------------------+-----+-----+-----+-----+-------+
|Gross Margin |32.9%|32.4%|32.3%|32.3%| 32.8% |
+----------------------------------------------+-----+-----+-----+-----+-------+
|Operating Income (Loss), as reported |(11) |(66) |(730)|(465)|(2,081)|
+----------------------------------------------+-----+-----+-----+-----+-------+
|Net Income (Loss) attributable to parent |(36) |(142)|(428)|(500)|(1,158)|
|company | | | | | |
+----------------------------------------------+-----+-----+-----+-----+-------+
(a) Net revenues include sales recorded by ST-Ericsson as consolidated by ST.
ST-Ericsson was deconsolidated on September 1, 2013
+-------------------------------------------+-----+-----+------+------+--------+
|Non-U.S. GAAP* | Q4 | Q3 | Q4 | FY | FY |
|(Million US$) |2013 |2013 | 2012 | 2013 |2012 (b)|
+-------------------------------------------+-----+-----+------+------+--------+
|Operating Income (Loss) before impairment | 18 | 54 |(142) |(173) | (705) |
|and restructuring charges | | | | | |
+-------------------------------------------+-----+-----+------+------+--------+
|Operating Margin before impairment and |0.9% |2.7% |(6.5%)|(2.1%)| (8.3%) |
|restructuring charges  | | | | | |
+-------------------------------------------+-----+-----+------+------+--------+
|Â Â Â Â Â | Â | Â | Â | Â | Â |
+-------------------------------------------+-----+-----+------+------+--------+
|Net Revenues excluding Wireless (WPS) |1,882|1,878|1,811 |7,378 | 7,148 |
+-------------------------------------------+-----+-----+------+------+--------+
(b) FY2012 as reported includes a net charge of $54 million related to NXP
arbitration award
Fourth Quarter Review
Overall, net revenues as reported increased 0.1% sequentially and decreased
6.8% on a year-over-year basis. On a sequential basis by region of shipment,
Greater China & South Asia posted growth of 4.1%, while Japan & Korea, the
Americas, and EMEA decreased by 5.6%, 2.8%, and 1.0%, respectively.
ST's fourth quarter revenues, excluding WPS (former ST-Ericsson products), grew
0.2% on a sequential basis and 3.9% year-over-year. Sequential growth was driven
by Automotive and Microcontrollers while year-over-year growth was driven by
Imaging, Automotive, Microcontrollers, and Industrial and Power.
Fourth quarter gross profit was $662 million and gross margin was 32.9%. On a
sequential basis, gross margin increased 50 basis points, primarily due to
manufacturing efficiencies partially offset by negative currency effects and, as
anticipated, unsaturation charges.
R&D expenses were $407 million in the fourth quarter representing a sequential
decrease of $16 million or 3.7%, primarily due to ongoing cost reduction
initiatives partially offset by the unfavorable seasonality effect. R&D expenses
decreased 30% compared to $585 million in the year-ago period.
SG&A expenses were $249 million in the fourth quarter decreasing $4 million or
1.5% on a sequential basis mainly due to ongoing cost reduction initiatives
partially offset by the unfavorable seasonality effect. SG&A expenses decreased
14% compared to $291 million in the year-ago period.
Fourth quarter operating income, before impairment and restructuring charges,
was $18 million compared to $54 million in the prior quarter, which included an
$80 million gain from the sale of businesses. Operating margin in the fourth
quarter, before impairment and restructuring charges, was 0.9% with Sense &
Power and Automotive (SP&A) operating margin at 7.7% and Embedded Processing
Solutions (EPS) at negative 8.5%. Operating margin improved from negative 6.5%
in the year-ago quarter mainly due to the split up of ST-Ericsson.
Impairment, restructuring charges and other related closure costs for the fourth
quarter were $29 million incurred under the Company's existing plans, compared
to $120 million in the prior quarter.
-----
(*)Operating income (loss) before impairment and restructuring charges and
operating margin before impairment and restructuring charges are non-U.S. GAAP
measures. Please refer to Attachment A for additional information explaining why
the Company believes these measures are important and reconciliation to U.S.
GAAP.
Fourth quarter net loss was $36 million or $(0.04) per share, compared to a net
loss of $(0.16) and $(0.48) per share in the prior and year-ago quarter,
respectively. On an adjusted basis, ST reported a non-U.S. GAAP net loss per
share estimated at $(0.01) in the fourth quarter excluding impairment and
restructuring charges, net of estimated income tax effect, compared to a net
loss estimated at $(0.03) and $(0.11) per share in the prior and year-ago
quarter, respectively.*
For the fourth quarter of 2013, the effective average exchange rate for the
Company was approximately $1.34 to €1.00, compared to $1.31 to €1.00 for the
third quarter of 2013 and $1.30 to €1.00 for the fourth quarter of 2012.
Quarterly Net Revenues Summary
+-------------------------------------------------+-------+-------+-------+
|Net Revenues By Product Line and Segment |Q4 2013|Q3 2013|Q4 2012|
|(Million US$) | | | |
+-------------------------------------------------+-------+-------+-------+
|Analog & MEMS (AMS) | 337| 329| 396|
+-------------------------------------------------+-------+-------+-------+
|Automotive (APG) | 449| 418| 368|
+-------------------------------------------------+-------+-------+-------+
|Industrial & Power Discrete (IPD) | 447| 458| 420|
+-------------------------------------------------+-------+-------+-------+
|Other SP&A | -| -| -|
+-------------------------------------------------+-------+-------+-------+
|Sense & Power and Automotive Products (SP&A) | 1,233| 1,205| 1,184|
+-------------------------------------------------+-------+-------+-------+
|Digital Convergence Group (DCG) | 159| 163| 217|
+-------------------------------------------------+-------+-------+-------+
|Imaging, BiCMOS, ASIC and Silicon Photonics (IBP)| 127| 144| 100|
+-------------------------------------------------+-------+-------+-------+
|Microcontrollers, Memory & Security (MMS) | 357| 360| 293|
+-------------------------------------------------+-------+-------+-------+
|Wireless (WPS) | 133| 135| 351|
+-------------------------------------------------+-------+-------+-------+
|Other EPS | -| -| 3|
+-------------------------------------------------+-------+-------+-------+
|Embedded Processing Solutions (EPS) | 776| 802| 964|
+-------------------------------------------------+-------+-------+-------+
|Others | 6| 6| 14|
+-------------------------------------------------+-------+-------+-------+
|Total | 2,015| 2,013| 2,162|
+-------------------------------------------------+-------+-------+-------+
+-----------------------------------+---------+---------+---------+
| Net Revenues By Market Channel(%) | Q4 2013 | Q3 2013 | Q4 2012 |
+-----------------------------------+---------+---------+---------+
| Total OEM | 73% | 75% | 77% |
+-----------------------------------+---------+---------+---------+
| Distribution | 27% | 25% | 23% |
+-----------------------------------+---------+---------+---------+
-----
(*)Net revenues excluding Wireless (WPS), operating income (loss) before
impairment and restructuring charges and operating margin before impairment and
restructuring charges and adjusted net earnings per share are non-U.S. GAAP
measures. Please refer to Attachment A for additional information explaining why
the Company believes these measures are important and reconciliation to U.S.
GAAP.
Quarterly Revenues and Operating Results by ST Product Segment
+---------------------+--------+---------+--------+---------+--------+---------+
| Operating Segment |Q4 2013 | Q4 2013 |Q3 2013 | Q3 2013 |Q4 2012 | Q4 2012 |
| (Million US$) | Net |Operating| Net |Operating| Net |Operating|
| |Revenues| Income |Revenues| Income |Revenues| Income |
| | | (Loss) | | (Loss) | | (Loss) |
+---------------------+--------+---------+--------+---------+--------+---------+
|Sense & Power and | | | | | | |
|Automotive Products | 1,233| 96| 1,205| 75| 1,184| 106|
|(SP&A) | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+
|Embedded Processing | | | | | | |
|Solutions including | 776| (66)| 802| (18)| 964| (182)|
|Wireless product line| | | | | | |
|(EPS) (a) | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+
|Others (b) (c) | 6| (41)| 6| (123)| 14| (654)|
+---------------------+--------+---------+--------+---------+--------+---------+
|TOTAL | 2,015| (11)| 2,013| (66)| 2,162| (730)|
+---------------------+--------+---------+--------+---------+--------+---------+
(a) Embedded Processing Solutions includes the Wireless product line which
includes a portion of sales and operating results of ST-Ericsson as consolidated
in the Company's revenues and operating results until September 1, 2013, 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 $7 million, $0 million and $66 million of
unused capacity charges in the fourth and third quarters of 2013 and fourth
quarter of 2012, respectively; and $29 million, $120 million and $588 million of
impairment, restructuring charges and other related closure costs in the fourth
and third quarters of 2013 and fourth quarter of 2012, respectively.
Sense & Power and Automotive Products (SP&A) fourth quarter net revenues
increased 2.3% sequentially. SP&A revenues increased 4.2% compared to the year-
ago quarter driven by APG and IPD. SP&A operating margin was 7.7% in the 2013
fourth quarter compared to 6.2% and 9.0% in the prior and year-ago quarter,
respectively, with the sequential increase principally driven by product mix.
Embedded Processing Solutions (EPS) fourth quarter net revenues decreased 3.2%
sequentially. EPS decreased 19.4% on a year-over-year basis mainly reflecting
the progressive phase-out of WPS (former ST-Ericsson products). EPS segment
operating margin was a negative 8.5% in the 2013 fourth quarter compared to
negative 2.2% (or negative 11.5% excluding the gain from the sale of businesses)
and negative 18.9% in the prior and year-ago quarter, respectively.
Cash Flow and Balance Sheet Highlights
In the fourth quarter of 2013, as anticipated, the Company generated positive
free cash flow* of $91 million compared to negative $72 million in the prior
quarter.
Capital expenditure payments, net of proceeds from sales, were $531 million for
2013, compared to $476 million for 2012. In 2013, the ratio of capital
investment spending to revenues was about 6.6% compared to 5.6% in 2012.
Inventory increased sequentially by $20 million to $1.34 billion at quarter end.
Inventory in the fourth quarter of 2013 was at 4.0 turns or 90 days, compared to
4.3 turns or 84 days in the year-ago quarter.
Dividends paid to stockholders in the fourth quarter were $89 million and for
the full year were $346 million.
-----
(*)Free cash flow is a non-U.S. GAAP measure. For additional information and
reconciliation to U.S. GAAP, please refer to Attachment A.
ST's net financial position* was a net cash position of $741 million at December
31, 2013, compared to $739 million at September 28, 2013, and $1.19 billion at
December 31, 2012. ST's financial resources equaled $1.89 billion and total debt
was $1.15 billion at December 31, 2013, compared to $2.49 billion and $1.30
billion, respectively, at December 31, 2012.
Total equity, including non-controlling interest, was $5.73 billion at December
31, 2013, compared to $6.36 billion at December 31, 2012.
Full Year 2013 Results
During 2013, ST and Ericsson split up the ST-Ericsson joint venture, thus
exiting the wireless IC platform business.**
Net revenues for the full year 2013 decreased 4.8% to $8.08 billion from $8.49
billion in 2012 mainly reflecting lower WPS (former ST-Ericsson products) sales.
Net revenues for the full year 2013, excluding WPS, increased 3.2% to $7.38
billion.
Gross margin was 32.3% of net revenues for the full year 2013, compared to
32.8% of net revenues in 2012.
Sense & Power and Automotive revenues for the full year 2013 totaled $4.78
billion, up 3.3% compared to 2012 led by APG and IPD. SP&A operating margin
decreased to 5.7% in 2013 from 8.8% in 2012 principally due to increased R&D
efforts.
Embedded Processing Solutions revenues were $3.27 billion, down 14.6% compared
to 2012 mainly due to the wind down of ST-Ericsson. EPS revenues excluding WPS
increased 3.4% principally driven by strong growth in MMS. EPS operating margin
was negative 12.2% compared to negative 23.1% in 2012 mainly due to the wind
down of ST-Ericsson and higher sales in Microcontrollers.
Net loss, as reported, was $500 million in the full year 2013, or $(0.56) per
share, compared to a net loss of $1.16 billion, or $(1.31) per share in the full
year 2012. On an adjusted basis, ST reported a non-U.S. GAAP net loss per share
estimated at $(0.23) excluding impairment and restructuring charges and one-time
items, net of estimated income tax effect, in the full year 2013, compared to
$(0.33) in the full year 2012.*
The effective average exchange rate for the Company was approximately $1.31 to
€1.00 for the full year 2013, same as the effective average exchange rate for
the full year 2012.
-----
(*)Net financial position and adjusted net earnings per share are non-U.S. GAAP
measures. For additional information and reconciliation to U.S. GAAP, please
refer to Attachment A.
 (**) On August 2, 2013, ST and Ericsson completed the formal transfer of the
parts of ST-Ericsson to the respective parent companies. The split up of ST-
Ericsson has been completed with both parents having assumed equal funding of
the wind-down activities. As previously communicated, ST and Ericsson have taken
the expenses and the margin of their respective activities since March 2, 2013.
Effective as of September 1, 2013, ST has deconsolidated ST-Ericsson.
Full Year Net Revenues Summary
+---------------------------------------------------+---------+---------+
| Net Revenues By Product Line and Segment | FY 2013 | FY 2012 |
| (Million US$) | | |
+---------------------------------------------------+---------+---------+
| Analog & MEMS (AMS) | 1,306 | 1,320 |
+---------------------------------------------------+---------+---------+
| Automotive (APG) | 1,668 | 1,554 |
+---------------------------------------------------+---------+---------+
| Industrial & Power Discrete (IPD) | 1,801 | 1,747 |
+---------------------------------------------------+---------+---------+
| Other SP&A | - | 1 |
+---------------------------------------------------+---------+---------+
| Sense & Power and Automotive Products (SP&A) | 4,775 | 4,622 |
+---------------------------------------------------+---------+---------+
| Digital Convergence Group (DCG) | 735 | 888 |
+---------------------------------------------------+---------+---------+
| Imaging, BiCMOS, ASIC and Silicon Photonics (IBP) | 462 | 437 |
+---------------------------------------------------+---------+---------+
| Microcontrollers, Memory & Security (MMS) | 1,367 | 1,147 |
+---------------------------------------------------+---------+---------+
| Wireless (WPS) | 704 | 1,345 |
+---------------------------------------------------+---------+---------+
| Other EPS | 1 | 9 |
+---------------------------------------------------+---------+---------+
| Embedded Processing Solutions (EPS) | 3,269 | 3,826 |
+---------------------------------------------------+---------+---------+
| Others | 38 | 45 |
+---------------------------------------------------+---------+---------+
| Total | 8,082 | 8,493 |
+---------------------------------------------------+---------+---------+
Full Year Revenue and Operating Results by Product Segment
+--------------------------+-----------+-------------+-----------+-------------+
| Operating Segment |FY 2013 Net| FY 2013 |FY 2012 Net| FY 2012 |
| (In Million US$) | Revenues | Operating | Revenues | Operating |
| | |Income (Loss)| |Income (Loss)|
+--------------------------+-----------+-------------+-----------+-------------+
|Sense & Power and | | | | |
|Automotive Products | 4,775| 270| 4,622| 409|
|Â (SP&A) | | | | |
+--------------------------+-----------+-------------+-----------+-------------+
|Embedded Processing | | | | |
|Solutions including | 3,269| (399)| 3,826| (883)|
|Wireless product line | | | | |
|(EPS) | | | | |
+--------------------------+-----------+-------------+-----------+-------------+
|Â Others | 38| (336)| 45| (1,607)|
+--------------------------+-----------+-------------+-----------+-------------+
|Â TOTAL | 8,082| (465)| 8,493| (2,081)|
+--------------------------+-----------+-------------+-----------+-------------+
First Quarter 2014 Business Outlook
Mr. Bozotti stated, "In the first quarter, we expect overall revenues to
decrease sequentially by about 9.5% at the midpoint. First quarter revenues
reflect, on top of seasonality including the New Year holiday in Asia, a drop in
revenues from ST-Ericsson legacy products of more than half from the fourth
quarter of 2013 level.
"While the semiconductor market did not perform as expected in 2013, we are
encouraged by the positive macro-economic signs and by the market dynamics
expected in 2014. We are well positioned to capture opportunities and to
continue to grow faster than the market we serve as we focus on product
leadership in Sense, Power and Automotive and in Embedded Processing.
"We will continue to advance towards our operating margin target of about 10%,
expected by mid-2015, based on a combination of revenue growth, gross margin
improvement and reduction of net expenses towards the low end of our target
range.
The Company expects first quarter 2014 revenues to decrease about 9.5% on a
sequential basis, plus or minus 3.5 percentage points. As a result, gross margin
in the first quarter is expected to be about 32.4%, plus or minus 2.0 percentage
points.
Net operating expenses target in the range of $600 million to $650 million
average per quarter includes SG&A and R&D expenses net of R&D grants. The
Company expects the Nano2017 R&D grants to become effective in the first quarter
of 2014.
This outlook is based on an assumed effective currency exchange rate of
approximately $1.35 to €1.00 for the 2014 first quarter and includes the impact
of existing hedging contracts. The first quarter will close on March 29, 2014.
Recent Corporate Developments
On December 2, ST announced that all the resolutions proposed by the Supervisory
Board were approved at the Company's Extraordinary General Meeting of
Shareholders, which was held in Schiphol, The Netherlands. The resolutions
approved by the shareholders were:
* The distribution of a cash dividend of US$0.10 per common share for each of
the fourth quarter of 2013, paid in December 2013, and first quarter of
2014, to be paid in March 2014 to shareholders of record in the month of the
quarterly payment.
* An amendment of the Articles of Association of the Company authorizing the
Supervisory Board, in addition to the General Meeting of Shareholders, to
resolve upon the distribution of quarterly dividends from the reserves of
the Company.
Q4 2013 - Product and Technology Highlights
During the quarter, ST made strong progress with important new-product
introductions and significant design wins.
Embedded Processing Solutions (EPS)
Digital Convergence (DCG)
* Earned important design wins in Europe and the US in Ultra HD and HEVC video
technologies with major tier-one operators.
* Awarded multiple broadcast set-top box designs, with full certification from
major conditional-access system vendors, including Nagra and Viaccess. Over
50 location-specific part numbers are available to serve the worldwide
market.
* Captured set-top-box sockets from MultiChoice, South Africa's top pay-TV
provider to boost customers' access to high-definition services.
* Won design at a major consumer company in the Far East in 28nm FD-SOI.
Imaging, Bi-CMOS, ASIC and Silicon Photonics (IBP)
* Awarded several image-sensor and camera-module sockets for main and front-
facing camera applications by a leading smartphone manufacturer, to support
volume deliveries in new H1'14 smartphone programs.
Microcontroller, Memory and Secure MCU (MMS)
* Landed design wins for the STM32F4 as a sensor hub at several key smartphone
OEMs and in a smartwatch at one of them.
* Earned sockets for the STM32F1 with Java Virtual Machine for a heating-
control user interface with a French industrial OEM Â and for the STM32F0 for
input/output accessories with a major US Smartphone OEM.
* Achieved new ST31 dual-interface secure microcontroller certification for
Asia banking with two additional major payment smartcard players.
* Introduced a second-generation Secure Element that further improves
performance and security for mobile devices.
* Announced a family of "dynamic NFC tag" memories enabling NFC connectivity
with smartphones for a wide range of electronic devices.
Sense & Power and Automotive Products (SP&A)
Analog, MEMS and Sensors (AMS)
* Captured a socket for a smart 6-axis accelerometer/gyro combo in a new
generation of tablets and smartphones from a fast-rising Asian manufacturer.
Another top Asian manufacturer is qualifying a different 6-axis combo for a
smart watch.
* Selected by a global manufacturer for a high-gravity accelerometer for
predictive maintenance in transportation applications.
* Started volume shipments of high-performance digital microphones for tablets
at a top-tier manufacturer and of a high-performance top-port digital
microphone at a major Chinese smartphone manufacturer.
* Introduced a new family of 6-axis smart sensors that are fully compliant
with Android 4.4 KitKat.
* Earned qualification from a Chinese manufacturer for an automotive
accelerometer and a gyroscope module for navigation projects, increased
shipments for high-gravity accelerometers for airbags to a large Pac Rim
manufacturer, started production of a gyro for an American manufacturer for
a navigation application, and began sampling the first 24g accelerometer for
non-safety Automotive applications, such as car black boxes.
* Began volume shipments of a second-generation touch-screen controller to a
large Asian manufacturer and captured a design win for the third-generation
device with the same Asian manufacturer.
Automotive (APG)
* Confirmed leadership in automotive lighting by earning the strategic
platform from a major Japanese Tier1 manufacturer.
* Won an award as the sole supplier for VIPower products from a major Japanese
Tier1.
* Selected by a leading Japanese manufacturer of vehicle engine management and
climate-control systems for gasoline direct injection applications.
* Captured several design wins for airbag applications with Chinese customers.
* Registered many design wins for the 32-bit Power architecture
microcontrollers across a broad range of application domains.
* Announced the latest generation of industry-leading multi-constellation
satellite-location chips, which with the addition of capabilities to track
the Chinese BeiDou satellites, is able to receive signals from all of the
global navigation systems.
Industrial and Power Discrete (IPD)
* Captured design wins from a leading Korean manufacturer for its newest
switching battery charger.
* Began ramping  a new step-down monolithic switching regulator for an
Infotainment project by a major Japanese Automotive Tier1 Â for an American
car maker.
* Earned significant design wins for ultrafast IGBTs (Insulated-Gate Bipolar
Transistors) in power-factor correction applications with a major Chinese
appliance manufacturer.
* Continued to gain traction with E-Fuse in leading Hard Disk Drive and SSD
platforms from top-tier manufacturers.
* Landed big design wins for our high-efficiency MOSFETs with a leading Korean
TV Maker.
* Awarded the socket for field-effect rectifier diodes for mobile and tablet
chargers by a leading Asian OEM and won key EMIF filters & protection-device
sockets in high-visibility smartphone, tablet, notebook and other portable
applications.
* Introduced the world's first intelligent-gateway SoC, which combines a high-
performance processing subsystem with Powerline Communication (PLC),
security and peripheral features to support hybrid networks utilizing
popular wired and wireless standards.
* Leveraging expertise in PLC and smart-meter ICs in the launch of a unique
future-proof SoC that simplifies smart-meter design, reduces time-to-market,
and significantly reduces component count and bill-of-materials costs.
* Announced an advanced energy-harvesting and battery-charging chip that
enhances flexibility, simplifies design, and extends application reach.
Use of Supplemental Non-U.S. GAAP Financial Information
This press release contains supplemental non-U.S. GAAP financial information,
including net revenues excluding Wireless (WPS), operating income (loss) before
impairment and restructuring charges, operating margin before impairment and
restructuring charges, adjusted net earnings, adjusted net earnings per share,
free cash flow and net financial position.
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.
Forward-looking information
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:
* Uncertain macro-economic and industry trends;
* Customer demand and acceptance for the products which we design, manufacture
and sell;
* Unanticipated events or circumstances, which may either impact our ability
to execute the planned reductions in our net operating expenses and / or
meet the objectives of our R&D Programs, which benefit from public funding;
* Future events or circumstances, which may have an impact on the timing and
final cost of the wind down of the ST-Ericsson joint venture;
* The loading and the manufacturing performance of our production facilities;
* The functionalities and performance of our IT systems, which support our
critical operational activities including manufacturing, finance and sales;
* Variations in the foreign exchange markets and, more particularly, in the
rate of 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;
* Restructuring charges and associated cost savings that differ in amount or
timing from our estimates;
* Changes in our overall tax position as a result of changes in tax laws, the
outcome of tax audits or changes in international tax treaties which may
impact our results of operations as well as our ability to accurately
estimate tax credits, benefits, deductions and provisions and to realize
deferred tax assets;
* The outcome of ongoing litigation as well as the impact of any new
litigation to which we may become a defendant;
* Natural events such as severe weather, earthquakes, tsunami, volcano
eruptions or other acts of nature, health risks and epidemics in locations
where we, our customers or our suppliers operate;
* Changes in economic, social, political, or infrastructure conditions in the
locations where we, our customers, or our suppliers operate, including as a
result of macro-economic or regional events, military conflict, social
unrest, or terrorist activities;
* Availability and costs of raw materials, utilities, third-party
manufacturing services, or other supplies required by our operations.
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, 2012, as filed with the SEC on March
4, 2013. 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.
STMicroelectronics Conference Call and Webcast Information
On January 28, 2014, 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 2013.
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.
About STMicroelectronics
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)
For further information, please contact:
INVESTOR RELATIONS:
Tait Sorensen
Group VP, Investor Relations
STMicroelectronics
Tel: +1 602 485 2064
tait.sorensen@st.com
MEDIA RELATIONS:
Nelly Dimey
Director, Corporate Media and Public Relations
STMicroelectronics
Tel: +33 158 077 785
nelly.dimey@st.com
+------------------------------------------------------------------------------+
|STMicroelectronics N.V. Â Â |
| |
|Consolidated Statements of Income   |
| |
|(in millions of U.S. dollars, except per share data   |
|($)) |
| |
| Â Â Â |
| |
| Â Three Months Ended |
| |
| Â (Unaudited) (Unaudited) |
| --------------------------+
| Â December 31, December 31,|
| |
| Â 2013 2012|
| |
| Â Â Â |
| |
|Net sales 2,008 2,111|
| |
|Other revenues 7 51|
| --------------------------+
|Â NET REVENUES 2,015 2,162|
| |
|Cost of sales (1,353) (1,465)|
| --------------------------+
|Â GROSS PROFIT 662 697|
| |
|Selling, general and administrative (249) (291)|
| |
|Research and development (407) (585)|
| |
|Other income and expenses, net 12 37|
| |
|Impairment, restructuring charges and other related  (29) (588)|
|closure costs |
| --------------------------+
| Total Operating Expenses  (673)  (1,427)|
| --------------------------+
|Â OPERATING LOSS Â (11) Â (730)|
| |
|Interest expense, net  (3)  (9)|
| |
|Loss on equity-method investments  (12)  (11)|
| |
|LOSS BEFORE INCOME TAXES Â (26) Â (750)|
| |
|Â Â AND NONCONTROLLING INTEREST Â Â |
| |
|Income tax expense  (8)  (39)|
| --------------------------+
|Â NET LOSS Â (34) Â (789)|
| |
|Net loss (income) attributable to noncontrolling  (2) 361|
|interest |
| --------------------------+
|Â NET LOSS ATTRIBUTABLE TO PARENT COMPANY Â (36) Â (428)|
| --------------------------+
| Â Â Â |
| |
|Â EARNINGS PER SHARE (BASIC) Â (0.04) Â (0.48)|
|ATTRIBUTABLE TO PARENT |
|COMPANY STOCKHOLDERS |
| |
|Â EARNINGS PER SHARE (DILUTED) Â (0.04) Â (0.48)|
|ATTRIBUTABLE TO PARENT |
|COMPANY STOCKHOLDERS |
| |
| Â Â Â |
| |
|Â NUMBER OF WEIGHTED AVERAGE Â Â |
| |
|Â SHARES USED IN CALCULATING Â Â |
| |
|Â DILUTED EARNINGS PER SHARE 890.6 887.9|
+------------------------------------------------------------------------------+
+------------------------------------------------------------------------------+
|STMicroelectronics N.V. Â Â |
| |
|Consolidated Statements of Income   |
| |
|(in millions of U.S. dollars, except per share data   |
|($)) |
| |
| Â Â Â |
| |
| Â Twelve Months Ended |
| |
| Â (Unaudited) (Audited) |
| --------------------------+
| Â December 31, December 31,|
| |
| Â 2013 2012|
| |
| Â Â Â |
| |
|Net sales 8,050 8,380|
| |
|Other revenues 32 113|
| --------------------------+
|Â NET REVENUES 8,082 8,493|
| |
|Cost of sales  (5,468)  (5,710)|
| --------------------------+
|Â GROSS PROFIT 2,614 2,783|
| |
|Selling, general and administrative  (1,066)  (1,166)|
| |
|Research and development  (1,816)  (2,413)|
| |
|Other income and expenses, net 95 91|
| |
|Impairment, restructuring charges and other related  (292)  (1,376)|
|closure costs |
| --------------------------+
| Total Operating Expenses  (3,079)  (4,864)|
| --------------------------+
|Â OPERATING LOSS Â (465) Â (2,081)|
| |
|Interest expense, net  (5)  (35)|
| |
|Loss on equity-method investments  (122)  (24)|
| |
|Gain on financial instruments, net - 3|
| |
|Â LOSS BEFORE INCOME TAXES Â (592) Â (2,137)|
| |
|Â Â AND NONCONTROLLING INTEREST Â Â |
| |
|Income tax expense  (37)  (51)|
| --------------------------+
|Â NET LOSS Â (629) Â (2,188)|
| |
|Net loss (income) attributable to noncontrolling 129 1,030|
|interest |
| --------------------------+
|Â NET LOSS ATTRIBUTABLE TO PARENT COMPANY Â (500) Â (1,158)|
| --------------------------+
| Â Â Â |
| |
|Â EARNINGS PER SHARE (BASIC) Â (0.56) Â (1.31)|
|ATTRIBUTABLE TO PARENT |
|COMPANY STOCKHOLDERS |
| |
|Â EARNINGS PER SHARE (DILUTED) Â (0.56) Â (1.31)|
|ATTRIBUTABLE TO PARENT |
|COMPANY STOCKHOLDERS |
| |
| Â Â Â |
| |
|Â NUMBER OF WEIGHTED AVERAGE Â Â |
| |
|Â SHARES USED IN CALCULATING Â Â |
| |
|Â DILUTED EARNINGS PER SHARE 889.5 886.7|
+------------------------------------------------------------------------------+
+------------------------------------------------------------------------------+
|STMicroelectronics N.V. Â Â Â |
| |
|CONSOLIDATED BALANCE SHEETS Â Â Â |
| |
|As at December 31, September 28, December 31,|
| |
|In millions of U.S. dollars 2013 2013 2012 |
| ----------------------------------------+
| Â (Unaudited) (Unaudited) (Audited) |
+------------------------------------------------------------------------------+
|ASSETS Â Â Â |
| |
|Current assets: Â Â Â |
| |
|Cash and cash equivalents 1,836 1,434 2,250|
| |
|Short-term deposits 1 1 1|
| |
|Marketable securities 57 91 238|
| |
|Trade accounts receivable, net 1,049 1,181 1,005|
| |
|Inventories 1,336 1,316 1,353|
| |
|Deferred tax assets 123 221 137|
| |
|Assets held for sale 16 17 -|
| |
|Other current assets 401 539 518|
| ----------------------------------------+
|Total current assets 4,819 4,800 5,502|
| |
|Goodwill 90 99 141|
| |
|Other intangible assets, net 217 218 213|
| |
|Property, plant and equipment, net 3,156 3,193 3,481|
| |
|Non-current deferred tax assets 226 373 414|
| |
|Restricted cash - - 4|
| |
|Long-term investments 76 73 119|
| |
|Other non-current assets 600 568 560|
| ----------------------------------------+
| Â 4,365 4,524 4,932|
| ----------------------------------------+
|Total assets 9,184 9,324 10,434|
| |
| Â Â Â Â |
| |
|LIABILITIES AND EQUITY Â Â Â |
| |
|Current liabilities: Â Â Â |
| |
|Short-term debt 225 168 630|
| |
|Trade accounts payable 694 898 797|
| |
|Other payables and accrued liabilities 937 944 942|
| |
|Dividends payable to stockholders 89 - 89|
| |
|Deferred tax liabilities - - 11|
| |
|Accrued income tax 48 71 86|
| ----------------------------------------+
|Total current liabilities 1,993 2,081 2,555|
| |
|Long-term debt 928 619 671|
| |
|Post-retirement benefit obligations 366 449 477|
| |
|Long-term deferred tax liabilities 11 13 14|
| |
|Other long-term liabilities 158 356 353|
| ----------------------------------------+
| Â 1,463 1,437 1,515|
| |
|Total liabilities 3,456 3,518 4,070|
| |
|Commitment and contingencies    |
| |
|Equity    |
| |
|Parent company stockholders' equity    |
| |
|Common stock (preferred stock: 1,156 1,156 1,156|
|540,000,000 shares |
|authorized, not issued; common stock: |
|Euro 1.04 |
|nominal value, 1,200,000,000 shares |
|authorized, |
|910,703,305 shares issued, |
|890,606,763 shares |
|outstanding) |
| |
|Capital surplus 2,581 2,572 2,555|
| |
|Retained earnings 1,076 1,291 1,959|
| |
|Accumulated other comprehensive income 1,053 922 794|
| |
|Treasury stock (212) (213) (239)|
| ----------------------------------------+
|Total parent company stockholders' 5,654 5,728 6,225|
|equity |
| |
|Noncontrolling interest 74 78 139|
| ----------------------------------------+
|Total equity 5,728 5,806 6,364|
| |
|Total liabilities and equity 9,184 9,324 10,434|
|Â |
|Â |
|Â |
+------------------------------------------------------------------------------+
|STMicroelectronics N.V. Â Â Â |
| |
|Â Â Â Â |
| |
|SELECTED CASH FLOW DATA Â Â Â |
| |
|Â Â Â Â |
+--------------------------------------+------------+-------------+------------+
|Cash Flow Data (in US$ millions) | Q4 2013| Q3 2013| Q4 2012|
+--------------------------------------+------------+-------------+------------+
|Â Â Â Â |
+--------------------------------------+------------+-------------+------------+
|Net Cash from operating activities | 270| 14| 252|
+--------------------------------------+------------+-------------+------------+
|Net Cash used in investing activities | Â (145)| Â (7)| Â (107)|
+--------------------------------------+------------+-------------+------------+
|Net Cash from (used in) financing | 270| Â (164)| 406|
|activities | | | |
+--------------------------------------+------------+-------------+------------+
|Net Cash increase (decrease) | 402| Â (149)| 564|
+--------------------------------------+------------+-------------+------------+
|Â Â Â Â |
+--------------------------------------+------------+-------------+------------+
|Selected Cash Flow Data (in US$ | Q4 2013| Q3 2013| Q4 2012|
|millions) | | | |
+--------------------------------------+------------+-------------+------------+
|Â | Â | Â | Â |
+--------------------------------------+------------+-------------+------------+
|Depreciation & amortization | 225| 224| 272|
+--------------------------------------+------------+-------------+------------+
|Net payment for Capital expenditures | Â (133)| Â (166)| Â (78)|
+--------------------------------------+------------+-------------+------------+
|Dividends paid to stockholders | Â (89)| Â (93)| Â (89)|
+--------------------------------------+------------+-------------+------------+
|Change in inventories, net | - Â | Â (34)| 143|
+--------------------------------------+------------+-------------+------------+
(Attachment A)
STMicroelectronics
Supplemental Non-U.S. GAAP Financial Information
U. S. GAAP - Non-U.S. GAAP Reconciliation
In Million US$ Except Per Share Data
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 and restructuring charges 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.
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)Â the ability to make more meaningful period-to-period comparisons of the
Company's on-going operating results, (ii)Â the ability to better identify trends
in the Company's business and perform related trend analysis, and (iii)Â 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 2013 | | Operating | |Corresponding|
|(US$ millions and cents |Gross Profit|Income (loss)|Net Earnings| EPS |
|per share) | | | | |
+------------------------+------------+-------------+------------+-------------+
|U.S. GAAP | 662 | (11) | (36) | (0.04) |
+------------------------+------------+-------------+------------+-------------+
|Impairment & | Â | 29 | 29 | |
|Restructuring | | | | |
+------------------------+------------+-------------+------------+ Â |
|Estimated Income Tax | Â | Â | (6) | |
|Effect | | | | |
+------------------------+------------+-------------+------------+-------------+
|Non-U.S GAAP | 662 | 18 | (13) | (0.01) |
+------------------------+------------+-------------+------------+-------------+
+------------------------+------------+-------------+------------+-------------+
|Q3 2013 | | Operating |Net Earnings|Corresponding|
|(US$ millions and cents|Gross Profit|Income (loss)| Â | EPS |
|per share) | | | | |
+------------------------+------------+-------------+------------+-------------+
|U.S. GAAP | 652 | (66) | (142) | (0.16) |
+------------------------+------------+-------------+------------+-------------+
|Impairment & | Â | 120 | 117 | |
|Restructuring | | | | |
+------------------------+------------+-------------+------------+ |
|Loss on equity-method | | | | |
|investments | Â | Â | 4 | Â |
|(MicroOLED) | | | | |
+------------------------+------------+-------------+------------+ |
|Estimated Income Tax | Â | Â | (2) | |
|Effect | | | | |
+------------------------+------------+-------------+------------+-------------+
|Non-U.S GAAP | 652 | 54 | (23) | (0.03) |
+------------------------+------------+-------------+------------+-------------+
+-------------------+------------+--------------+------------+-----------------+
|Q4 2012 | | Operating |Net Earnings| |
|(US$ millions and|Gross Profit|Income (loss) | Â |Corresponding EPS|
|cents per share) | | | | |
+-------------------+------------+--------------+------------+-----------------+
|U.S. GAAP | 697 | (730) | (428) | (0.48) |
+-------------------+------------+--------------+------------+-----------------+
|Impairment & | Â | 588 | 307 | |
|Restructuring | | | | |
+-------------------+------------+--------------+------------+ Â |
|Estimated Income | Â | Â | (1) | |
|Tax Effect | | | | |
+-------------------+------------+--------------+------------+-----------------+
|Income Tax at ST | Â | Â | 26 | Â |
|Ericsson | | | | |
+-------------------+------------+--------------+------------+-----------------+
|Non-U.S GAAP | 697 | (142) | (96) | (0.11) |
+-------------------+------------+--------------+------------+-----------------+
(continued)
(Attachment A - 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 short-term
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 |December 31, 2013|September 28, 2013|December 31, 2012|
|(in US$ millions) | | | |
+-----------------------+-----------------+------------------+-----------------+
|Cash and cash | 1,836 | 1,434 | 2,250 |
|equivalents | | | |
+-----------------------+-----------------+------------------+-----------------+
|Marketable securities | 57 | 91 | 238 |
+-----------------------+-----------------+------------------+-----------------+
|Short-term deposits | 1 | 1 | 1 |
+-----------------------+-----------------+------------------+-----------------+
|Non-current restricted | - | - | 4 |
|cash | | | |
+-----------------------+-----------------+------------------+-----------------+
|Total financial | 1,894 | 1,526 | 2,493 |
|resources | | | |
+-----------------------+-----------------+------------------+-----------------+
|Short-term borrowings | | | |
|and current portion of | (225) | (168) | (630) |
|long-term debt | | | |
+-----------------------+-----------------+------------------+-----------------+
|Long-term debt | (928) | (619) | (671) |
+-----------------------+-----------------+------------------+-----------------+
|Total financial debt | (1,153) | (787) | (1,301) |
+-----------------------+-----------------+------------------+-----------------+
|Net financial position | 741 | 739 | 1,192 |
+-----------------------+-----------------+------------------+-----------------+
Free cash flow is defined as net cash from operating activities minus net cash
from (used in) investing activities, excluding purchase of and proceeds from the
sale of marketable securities, short term deposits and release of 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 2013|Q3 2013|Q4 2012|
+------------------------------------------------------+-------+-------+-------+
|Net cash from (used in) operating activities | 270 | 14 | 252 |
+------------------------------------------------------+-------+-------+-------+
|Net cash from (used in) investing activities | (145) | (7) | (107) |
+------------------------------------------------------+-------+-------+-------+
|Payment for purchases of (proceeds from sale of) | | | |
|marketable securities, short term deposits and | (34) | (79) | - |
|restricted cash, net and net variation for joint | | | |
|ventures deconsolidation | | | |
+------------------------------------------------------+-------+-------+-------+
|Free cash flow | 91 | (72) | 145 |
+------------------------------------------------------+-------+-------+-------+
--end---
ST Q4 2013 earnings:
http://hugin.info/152740/R/1757394/593998.pdf
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Source: STMicroelectronics via GlobeNewswire
[HUG#1757394]