STMicroelectronics Reports 2014 Fourth Quarter and Full Year Financial Results
(Thomson Reuters ONE) -
* Fourth quarter in line with expectations with net revenues of $1.83 billion
and gross margin of 33.8%
* Net income turnaround to positive $128 million in 2014
* Free cash flow turnaround to positive $197 million in 2014*
Geneva, January 28, 2015 - 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, 2014.
Fourth quarter net revenues totaled $1.83 billion, gross margin was 33.8%, and
net income per share was $0.05. For the full year 2014, net revenues totaled
$7.40 billion, gross margin was 33.7%, and net income per share was $0.14.
"Overall, 2014 was a year in which we made significant steps forward," commented
Carlo Bozotti, STMicroelectronics President and Chief Executive Officer.
"Thanks to the talent and product leadership drive of our employees, we have
built a more focused, market-driven portfolio of sense, power, automotive
products and embedded processing solutions. New flagship products during this
past year included our 32-bit microcontrollers for general purpose and
automotive applications, MEMS microphones, touch-screen controllers, ultra-HD
products for set-top box and low voltage power MOSFETs and IGBTs. On a year-
over-year basis, revenues in 2014 for the Microcontrollers and Automotive Groups
increased by 10% and 8% respectively, with the Industrial & Power Discrete Group
growing as well.
"We captured numerous key design wins for new products and functionality at
existing customers. We also enlarged our customer base, through an expansion of
market reach and our ability to seize opportunities for application
diversification, including the Internet of Things. Our customer base expansion
was demonstrated by the strong performance from distribution that grew to 31% of
revenues in 2014 from 26% in 2013.
"ST is making solid progress on key performance and financial metrics. We met
our operating expense target levels earlier than planned, achieved a significant
turnaround in operating income, net income and cash flow, improved gross margin
and operating margin and maintained our financial flexibility."
-----
(*)Free cash flow is a non-U.S. GAAP measure. Please refer to Attachment A for
additional information explaining why the Company believes these measures are
important and reconciliation to U.S. GAAP.
Summary Financial Highlights
+---------------------------------+-------+-------+-------+-------+------------+
|U.S. GAAP |Q4 2014|Q3 2014|Q4 2013|FY 2014|FY 2013((a))|
|(Million US$) | | | | | |
+---------------------------------+-------+-------+-------+-------+------------+
|Net Revenues | 1,829 | 1,886 | 2,015 | 7,404 | 8,082 |
+---------------------------------+-------+-------+-------+-------+------------+
|Gross Margin | 33.8% | 34.3% | 32.9% | 33.7% | 32.3% |
+---------------------------------+-------+-------+-------+-------+------------+
|Operating Income (Loss), as | 38 | 37 | (11) | 168 | (465) |
|reported | | | | | |
+---------------------------------+-------+-------+-------+-------+------------+
|Net Income (Loss) attributable to| 43 | 72 | (36) | 128 | (500) |
|parent 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 2014|Q3 2014|Q4 2013|FY 2014|FY 2013|
|Before impairment and restructuring | | | | | |
|charges (Million US$) | | | | | |
+--------------------------------------+-------+-------+-------+-------+-------+
|Operating Income (Loss) | 58 | 75 | 18 | 258 | (173) |
+--------------------------------------+-------+-------+-------+-------+-------+
|Operating Margin | 3.2% | 4.0% | 0.9% | 3.5% |(2.1%) |
+--------------------------------------+-------+-------+-------+-------+-------+
Fourth Quarter Review
Net revenues decreased 3.0% sequentially. By region of shipment, Greater China &
South Asia increased 3.2%, while the Americas, Japan & Korea, and EMEA decreased
by 6.8%, 8.1%, and 8.9%, respectively, on a sequential basis. As anticipated,
net revenues in the fourth quarter benefited from a one-time $13 million
licensing payment.
On a year-over-year basis, net revenues decreased 9.2%, reflecting the
combination of the phase-out of legacy ST-Ericsson products as well as lower DCG
sales, specifically set-top box, and AMS sales on product pruning and product
generation transition.
Fourth quarter gross profit was $619 million and gross margin was 33.8%. On a
sequential basis, gross margin decreased 50 basis points, primarily reflecting
price pressure and higher unused capacity charges in digital technology
partially offset by manufacturing efficiencies and favorable currency effects.
On a year-over-year basis, gross margin improved 90 basis points, reflecting the
combined benefits of manufacturing efficiencies and favorable currency effects,
offset in part by price pressure and unused capacity charges.
Combined R&D and SG&A in the fourth quarter increased 1.3% to $611 million from
$603 million in the third quarter, principally due to a longer calendar. On a
year-over-year basis, combined R&D and SG&A expenses decreased 6.9% mainly
reflecting the ST-Ericsson wind-down, cost reduction initiatives and favorable
currency effects.
Other income and expenses, net in the fourth quarter, increased to $50 million
from $32 million in the third quarter, with the $18 million increase mainly
reflecting the catch-up of R&D funding.
Impairment, restructuring and other related closure costs for the fourth quarter
were $20 million, compared to $38 million and $29 million in the prior and year-
ago quarter.
Earnings on equity investments in the fourth quarter were $17 million and mostly
related to the sale of certain patents by ST-Ericsson SA, in liquidation.
-----
(*)Operating income (loss) before impairment and restructuring charges and
operating margin before impairment and restructuring charges are non-U.S. GAAP
measures. For additional information and reconciliation to U.S. GAAP, please
refer to Attachment A.
Fourth quarter net income was $43 million or $0.05 per share, compared to a net
income of $0.08 and a net loss of $(0.04) per share in the prior and year-ago
quarter, respectively. On an adjusted basis, net of related taxes, ST reported
non-U.S. GAAP net income per share of $0.07 in the fourth quarter excluding
impairment and restructuring charges, compared to a net income per share of
$0.13 and a net loss of $(0.01) per share in the prior and year-ago quarter,
respectively.*
For the fourth quarter of 2014, the effective average exchange rate for the
Company was approximately $1.29 to ?1.00, compared to $1.34 to ?1.00 for the
third quarter of 2014 and $1.34 to ?1.00 for the fourth quarter of 2013.
Also, during the fourth quarter of 2014, ST notified IBM of its intention to end
participation in the IBM Technology Development Alliance.
Quarterly Net Revenues Summary
As previously announced, in the fourth quarter of 2014 the Digital Convergence
Group (DCG) and Imaging, Bi-CMOS and Silicon Photonics (IBP) Group have been
combined under one single organization, called Digital Product Group (DPG).
DPG's focus is on ASSPs addressing home gateway and set-top box, as well as FD-
SOI ASICs for consumer applications; FD-SOI and mixed process ASICs, including
silicon photonics, addressing communication infrastructure; and differentiated
imaging products. Effective in the first quarter of 2015, DPG will be reported
as a standalone product group.
+------------------------------------------------------+-------+-------+-------+
|Net Revenues By Product Line and Segment |Q4 2014|Q3 2014|Q4 2013|
|(Million US$) | | | |
+------------------------------------------------------+-------+-------+-------+
|Analog & MEMS (AMS) | 266| 268| 337|
+------------------------------------------------------+-------+-------+-------+
|Automotive (APG) | 436| 464| 449|
+------------------------------------------------------+-------+-------+-------+
|Industrial & Power Discrete (IPD) | 462| 486| 447|
+------------------------------------------------------+-------+-------+-------+
|Sense & Power and Automotive Products (SP&A) | 1,164| 1,218| 1,233|
+------------------------------------------------------+-------+-------+-------+
|Digital Convergence Group (DCG) ((a)) | 166| 202| 307|
+------------------------------------------------------+-------+-------+-------+
|Imaging, Bi-CMOS ASIC and Silicon Photonics (IBP) | 93| 84| 112|
|((a)) | | | |
+------------------------------------------------------+-------+-------+-------+
|Microcontroller, Memory & Secure MCU (MMS) | 388| 377| 357|
+------------------------------------------------------+-------+-------+-------+
|Other EPS | 13| -| -|
+------------------------------------------------------+-------+-------+-------+
|Embedded Processing Solutions (EPS) | 660| 663| 776|
+------------------------------------------------------+-------+-------+-------+
|Others | 5| 5| 6|
+------------------------------------------------------+-------+-------+-------+
|Total | 1,829| 1,886| 2,015|
+------------------------------------------------------+-------+-------+-------+
((a)) Reflecting the transfer of Wireless (legacy ST-Ericsson products) and the
Image Signal Processor business unit from IBP to DCG as of January 1, 2014, the
Company has reclassified prior period revenues.
+------------------------------------+---------+---------+---------+
| Net Revenues By Market Channel (%) | Q4 2014 | Q3 2014 | Q4 2013 |
+------------------------------------+---------+---------+---------+
| Total OEM | 68% | 68% | 73% |
+------------------------------------+---------+---------+---------+
| Distribution | 32% | 32% | 27% |
+------------------------------------+---------+---------+---------+
-----
(*) Adjusted net earnings per share is a non-U.S. GAAP measure. For additional
information and reconciliation to U.S. GAAP, please refer to Attachment A.
Quarterly Revenues and Operating Results by ST Product Segment
+---------------------+--------+---------+--------+---------+--------+---------+
|Operating Segment |Q4 2014 | Q4 2014 |Q3 2014 | Q3 2014 |Q4 2013 | Q4 2013 |
|(Million US$) | Net |Operating| Net |Operating| Net |Operating|
| |Revenues| Income |Revenues| Income |Revenues| Income |
| | | (Loss) | | (Loss) | | (Loss) |
+---------------------+--------+---------+--------+---------+--------+---------+
|Sense & Power | | | | | | |
|andAutomotive | 1,164 | 102 | 1,218 | 114 | 1,233 | 96 |
|Products (SP&A) | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+
|Embedded Processing | 660 | (10) | 663 | (27) | 776 | (66) |
|Solutions (EPS) | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+
|Others ((a)(b)) | 5 | (54) | 5 | (50) | 6 | (41) |
+---------------------+--------+---------+--------+---------+--------+---------+
|TOTAL | 1,829 | 38 | 1,886 | 37 | 2,015 | (11) |
+---------------------+--------+---------+--------+---------+--------+---------+
( (a)) Net revenues of "Others" include revenues from sales of Subsystems,
assembly services, and other revenues.
((b)) 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 $29 million, $14 million, and $7 million of
unused capacity charges in the fourth and third quarters of 2014 and fourth
quarter of 2013, respectively; and $20 million, $38 million, and $29 million of
impairment, restructuring charges, and other related closure costs in the fourth
and third quarters of 2014 and fourth quarter of 2013, respectively.
Sense & Power and Automotive Products (SP&A) fourth quarter net revenues
decreased 4.4% sequentially, reflecting the market slowdown in IPD, and a
temporary manufacturing delay which affected APG sales. In addition, AMS
revenues were substantially flat with growth in acoustic MEMS microphones offset
by a decrease in prior-generation motion MEMS and in analog products. SP&A
revenues decreased 5.7% compared to the year-ago quarter reflecting lower AMS
sales. SP&A operating margin was 8.8% in the 2014 fourth quarter compared to
9.4% and 7.7% in the prior and year-ago quarter, respectively.
Embedded Processing Solutions (EPS) fourth quarter net revenues decreased 0.4%
sequentially mainly due to lower DCG sales largely offset by growth in IBP and
MMS. EPS decreased 14.9% on a year-over-year basis mainly reflecting the
decrease in ST-Ericsson legacy products. Excluding ST-Ericsson, EPS net revenues
decreased 2.6% compared to the year-ago quarter. EPS segment operating margin
improved to a negative 1.5% in the 2014 fourth quarter compared to negative
4.1% and negative 8.5% in the prior and year-ago quarter, respectively.
Fourth Quarter and Full Year Cash Flow and Balance Sheet Highlights
Net cash from operating activities was $311 million in the fourth quarter
compared to $281 million and $270 million in the prior and year-ago quarter. For
the full year, net cash from operating activities was $715 million in 2014,
compared to $366 million in 2013.
Capital expenditure payments, net of proceeds from sales, were $108 million in
the fourth quarter, compared to $137 million and $133 million in the prior and
year-ago quarter. Capital expenditure payments, net of proceeds from sales, were
$496 million for 2014, compared to $531 million for 2013. The ratio of capital
investment spending to net revenues was stable at 6.7% for 2014 compared to
6.6% for 2013.
Free cash flow was $208 million in the fourth quarter, compared to $140 million
in the prior quarter and $91 million in the year-ago quarter. For the full year
2014, free cash flow significantly improved by $376 million to positive $197
million in 2014 from negative $179 million in 2013.*
-----
(*)Free cash flow is a non-U.S. GAAP measure. For additional information and
reconciliation to U.S. GAAP, please refer to Attachment A.
Inventory increased by $6 million sequentially to $1.27 billion at quarter end.
Inventory in the fourth quarter of 2014 was at 3.8 turns or 95 days, compared to
3.9 turns or 92 days in the prior quarter.
In the fourth quarter, the Company paid cash dividends to shareholders of $90
million and used cash of $63 million to repurchase shares. For the full year, ST
paid cash dividends to shareholders totaling $354 million and used cash of $156
million to repurchase 20 million shares of common stock.
ST's net financial position improved to $546 million at December 31, 2014
compared to $494 million at September 27, 2014.* ST's financial resources
equaled $2.35 billion and total debt was $1.80 billion at December 31, 2014.
Total equity, including non-controlling interest, was $5.06 billion at quarter
end.
Full Year 2014 Results
Net revenues of $7.40 billion for the full year 2014, represented a decrease of
8.4% in total and a decrease of 1.8% excluding the phase-out of legacy ST-
Ericsson products, with solid growth experienced in MMS and APG supported by
IPD.
Gross margin improved 140 basis points to 33.7% of net revenues for the full
year 2014, compared to 32.3% of net revenues in 2013, with the margin expansion
reflecting manufacturing efficiencies and favorable currency effects.
Operating income in 2014 improved significantly to positive $168 million from
negative $465 million in 2013 mainly driven by lower operating expenses as a
result of the exit of the ST-Ericsson joint venture and cost savings
initiatives.
Sense & Power and Automotive revenues for the full year 2014 totaled $4.77
billion, flat compared to 2013 with growth in APG and IPD offset by lower AMS
sales principally reflecting portfolio pruning and product generation
transition. SP&A operating margin increased to 9.4% in 2014 from 5.7% in 2013
principally reflecting significant improvement across a number of product
families.
Embedded Processing Solutions revenues were $2.61 billion, a decrease of 20.2%
in total and a decrease of 4.4% excluding the phase-out of ST-Ericsson legacy
products, with a strong increase in MMS product sales offset by a significant
decline of DCG and IBP revenues. EPS operating margin in 2014 improved to a
negative 3.9% compared to negative 12.2% in 2013 mainly due to the wind down of
ST-Ericsson, cost reduction initiatives and funding for Nano2017.
Net income, as reported, was $128 million in the full year 2014, or $0.14 per
share, compared to a net loss of $500 million, or $(0.56) per share in the full
year 2013. On an adjusted basis, ST reported a non-U.S. GAAP net income per
share estimated at $0.29 excluding impairment and restructuring charges and one-
time items, net of estimated income tax effect, in the full year 2014, compared
to $(0.23) in the full year 2013.*
The effective average exchange rate for the Company was approximately $1.34 to
?1.00 for the full year 2014, compared to $1.31 to ?1.00 for the full year 2013.
-----
(*)Net financial position and adjusted net earnings per share are non-U.S. GAAP
measures. For additional information and reconciliation to U.S. GAAP, please
refer to Attachment A.
Full Year Net Revenues Summary
+---------------------------------------------------+---------+---------+
| Net Revenues By Product Line and Segment | FY 2014 | FY 2013 |
| (Million US$) | | |
+---------------------------------------------------+---------+---------+
| Analog & MEMS (AMS) | 1,102 | 1,306 |
+---------------------------------------------------+---------+---------+
| Automotive (APG) | 1,807 | 1,668 |
+---------------------------------------------------+---------+---------+
| Industrial & Power Discrete (IPD) | 1,865 | 1,801 |
+---------------------------------------------------+---------+---------+
| Sense & Power and Automotive Products (SP&A) | 4,774 | 4,775 |
+---------------------------------------------------+---------+---------+
| Digital Convergence Group (DCG) | 756 | 1,492 |
+---------------------------------------------------+---------+---------+
| Imaging, BiCMOS, ASIC and Silicon Photonics (IBP) | 330 | 409 |
+---------------------------------------------------+---------+---------+
| Microcontroller, Memory & Secure MCU (MMS) | 1,507 | 1,367 |
+---------------------------------------------------+---------+---------+
| Other EPS | 15 | 1 |
+---------------------------------------------------+---------+---------+
| Embedded Processing Solutions (EPS) | 2,608 | 3,269 |
+---------------------------------------------------+---------+---------+
| Others | 22 | 38 |
+---------------------------------------------------+---------+---------+
| Total | 7,404 | 8,082 |
+---------------------------------------------------+---------+---------+
Full Year Revenue and Operating Results by Product Segment
+------------------+-----------+-----------------+-----------+-----------------+
|Operating Segment |FY 2014 Net|FY 2014 Operating|FY 2013 Net|FY 2013 Operating|
|(In Million US$) | Revenues | Income (Loss) | Revenues | Income (Loss) |
+------------------+-----------+-----------------+-----------+-----------------+
|Sense & Power and | | | | |
|Automotive | 4,774| 447| 4,775| 270|
|Products (SP&A) | | | | |
+------------------+-----------+-----------------+-----------+-----------------+
|Embedded | | | | |
|Processing | 2,608| (103)| 3,269| (399)|
|Solutions (EPS) | | | | |
|((a)) | | | | |
+------------------+-----------+-----------------+-----------+-----------------+
|Others | 22| (176)| 38| (336)|
+------------------+-----------+-----------------+-----------+-----------------+
|TOTAL | 7,404| 168| 8,082| (465)|
+------------------+-----------+-----------------+-----------+-----------------+
((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.
First Quarter 2015 Business Outlook
Mr. Bozotti commented, "Based upon our backlog, current plans of customers as
well as the overall semiconductor market environment, we expect revenues in the
first quarter of 2015 to decrease sequentially by about 5% at the mid-point,
which is better than our normal seasonal evolution.
"Our main objective during 2015 is to continue to deliver year-over-year
improvement, by returning to revenue growth and by continuing to improve our
cost structure."
First quarter 2015 revenues are expected to decrease about 5% on a sequential
basis, plus or minus 3.5 percentage points, and reflect no one-time licensing
revenue compared to the fourth quarter, ST's high exposure to New-Year holidays
in Asia as well as its shorter accounting calendar for the first quarter. Gross
margin in the first quarter is expected to be about 33.2%, plus or minus 2.0
percentage points and reflects still high unsaturation charges negatively
impacting gross margin by about 120 basis points.
This outlook is based on an assumed effective currency exchange rate of
approximately $1.24 = ?1.00 for the 2015 first quarter and includes the impact
of existing hedging contracts. The first quarter will close on March 28, 2015.
Recent Corporate Developments
* On November 10, ST announced the completion of the repurchase of 20 million
shares of its common stock for a total of $156 million under the share buy-
back program it announced on June 26, 2014. The repurchased shares will be
held as treasury shares and used to meet the Company's obligations in
relation to its employee stock award plans.
* On November 20, ST was recognized as among the world's most innovative
companies, as it was named a Thomson Reuters Top 100 Global Innovator for
the third consecutive year. This prestigious award recognizes companies
around the world for their outstanding commitment to innovation, the
protection of ideas and the commercialization of inventions.
* On December 4, the Supervisory Board of ST declared a cash dividend of $0.10
per common share for each of the fourth quarter of 2014 and the first
quarter of 2015, paid in December 2014 and to be paid in March 2015,
respectively, to shareholders of record of each quarter.
Q4 2014 - 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)
* Presented complete UltraHD ecosystem, necessary for the emerging 4Kp60
market, running on latest Cannes/Monaco SoC;
* Embraced and demonstrated successful integration of a new RDK software
stack, which is currently under development for broadband devices, running
on ST's Alicante chipset;
* Demonstrated real-time hardware-prototype of DOCSIS 3.1 modem with key Cable
Modem Termination System (CMTS) provided by major US OEMs;
* Launched world's first Android TV 5.0 Lollipop platform based on
Cannes/Monaco family.
Microcontroller, Memory and Secure MCU (MMS)
* Captured design wins with multiple customers for the STM32F4 as a sensor
hub;
* Ramped production of the ultra-low-power STM32 in numerous IoT and wearable
applications, including the August Smart Lock home-access control system and
the PulseOn wearable heart-rate monitor;
* Launched Open Development Environment and Open.MEMS licensing to speed
development of applications around STM32 microcontrollers with advanced
sensing, control, connectivity, power-management and other components;
* Extended industry-leading STM32 family with new high-performance devices
with compact Flash memories in the F4 series and larger memories for cost-
sensitive applications in the F0 series;
* Landed a slot for an NFC EEPROM in a home gateway at a key Chinese OEM;
* Began big roll-out of secure microcontroller for EuroPay, Mastercard, Visa
chip-card migration in the US;
* Announced Sony's selection of ST31 secure microcontroller for next-
generation payment cards with unique auto-detection RF capabilities in
Japan.
Sense & Power and Automotive Products (SP&A)
Analog, MEMS and Sensors (AMS)
* Ramped production of a UV sensor for the flagship wearable device from
Samsung;
* Began production ramp of world's smallest, highest-performance, and lowest-
power 6-axis motion sensor for a leading Chinese customer;
* Started ramping production of a digital microphone for a TV remote control
from a European manufacturer;
* Earned sockets for a combo motion MEMS product for vehicle active-safety
applications with an important European supplier;
* Won the slot for a power comparator for smoke detectors with a key global
consumer products manufacturer;
* Presented the industry's smallest 6-axis IMU, qualified for automotive
applications, including car navigation;
* Announced THELMA 60 technology to optimize sensitivity and cost-
effectiveness in inertial sensors ideally suited to implantable medical and
seismic-exploration applications.
Automotive (APG)
* Awarded the Electronic Stability Control for a braking application at a
leading Japanese tier 1;
* Won a key platform that includes the car radio processor, the analog tuner
and the digital radio co-processor at an important European tier 1;
* Captured an integrated solution for an engine management-control socket at a
leading Chinese tier 1;
* Earned a socket for a throttle control motor driver with a leading Japanese
tier 1;
* Received an award from a leading European manufacturer for a stepper-motor
driver for a front lighting application;
* Earned an ASIC design for a door zone application from a key Korean
manufacturer;
* Won 100% share for a switching (Class-D) amplifier for a high-end Japanese
automaker;
* Announced cooperation with Autotalks to deliver a mass market-optimized
Vehicle-to-Vehicle and Vehicle-to-Infrastructure chipset for widespread
deployment by 2017.
Industrial & Power Discrete (IPD)
* Received awards for RF integrated passives and discretes (IPADs) from a key
module-making customer;
* Won designs for the smallest industry-standard protection device in portable
devices from important American brands;
* Awarded sockets for a diode in the charger of the next-generation smartphone
of a global manufacturer;
* Earned a win for energy-saving high-voltage power converters (VIPerPlus)
from a major EMEA manufacturer for a washing-machine application;
* Landed an award on several platforms for isolated power supplies, galvanic
isolated products, and gate drivers from a major industrial market leader;
* Secured sockets in server power-supply applications from leading
manufacturers in Taiwan for high-voltage MOSFETs;
* Gained several design wins for low-voltage MOSFETs for door-module and glow-
plug applications with automotive EMEA customers;
* Landed a win for high-voltage IGBTs for a welding application with a major
Chinese customer.
Use of Supplemental Non-U.S. GAAP Financial Information
This press release contains supplemental non-U.S. GAAP financial information,
including operating income (loss) before impairment and restructuring charges,
operating margin before impairment and restructuring charges, 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;
* 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, 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, tsunamis, 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, 2013, as filed with the SEC on March
5, 2014. 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, 2015, the management of STMicroelectronics will conduct a live
webcast of its conference call to discuss the Company's operating performance
for the fourth quarter and full year of 2014.
The conference call will be held at 9:30 a.m. CET / 8:30 a.m. BST / 3:30 a.m.
U.S. Eastern Time (ET) / 12:30 a.m. U.S. Pacific Time (PT). The live webcast and
presentation materials will be available 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. The webcast will be available until February 13, 2015.
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.
(tables attached)
For further information, please contact:
STMicroelectronics
INVESTOR RELATIONS:
Tait Sorensen
Group VP, Investor Relations
Tel: +1 602 485 2064
tait.sorensen(at)st.com
MEDIA RELATIONS:
Nelly Dimey
Director, Corporate Media and Public Relations
Tel: + 33 1 58 07 77 85
nelly.dimey(at)st.com
+------------------------------------------------------------------------------+
|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,|
| |
| 2014 2013|
| |
| |
| |
|Net sales 1,806 2,008|
| |
|Other revenues 23 7|
| --------------------------+
| NET REVENUES 1,829 2,015|
| |
|Cost of sales (1,210) (1,353)|
| --------------------------+
| GROSS PROFIT 619 662|
| |
|Selling, general and administrative (235) (249)|
| |
|Research and development (376) (407)|
| |
|Other income and expenses, net 50 12|
| |
|Impairment, restructuring charges and other related (20) (29)|
|closure costs |
| --------------------------+
| Total Operating Expenses (581) (673)|
| --------------------------+
| OPERATING INCOME (LOSS) 38 (11)|
| |
|Interest expense, net (6) (3)|
| |
|Income (loss) on equity-method investments 17 (12)|
| |
|Loss on financial instruments, net (3) -|
| |
|INCOME (LOSS) BEFORE INCOME TAXES 46 (26)|
| |
| AND NONCONTROLLING INTEREST |
| |
|Income tax expense (3) (8)|
| --------------------------+
| NET INCOME (LOSS) 43 (34)|
| |
|Net loss (income) attributable to noncontrolling - (2)|
|interest |
| --------------------------+
| NET INCOME (LOSS) ATTRIBUTABLE TO PARENT COMPANY 43 (36)|
| --------------------------+
| |
| |
| EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT 0.05 (0.04)|
|COMPANY STOCKHOLDERS |
| |
| EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO 0.05 (0.04)|
|PARENT COMPANY STOCKHOLDERS |
| |
| |
| |
| NUMBER OF WEIGHTED AVERAGE |
| |
| SHARES USED IN CALCULATING |
| |
| DILUTED EARNINGS PER SHARE 878.8 890.6|
+------------------------------------------------------------------------------+
+------------------------------------------------------------------------------+
|STMicroelectronics N.V. |
| |
|Consolidated Statements of Income |
| |
|(in millions of U.S. dollars, except per share data |
|($)) |
| |
| |
| |
| Twelve Months Ended |
| |
| (Unaudited) (Audited) |
| --------------------------+
| December 31, December 31,|
| |
| 2014 2013|
| |
| |
| |
|Net sales 7,335 8,050|
| |
|Other revenues 69 32|
| --------------------------+
| NET REVENUES 7,404 8,082|
| |
|Cost of sales (4,906) (5,468)|
| --------------------------+
| GROSS PROFIT 2,498 2,614|
| |
|Selling, general and administrative (927) (1,066)|
| |
|Research and development (1,520) (1,816)|
| |
|Other income and expenses, net 207 95|
| |
|Impairment, restructuring charges and other related (90) (292)|
|closure costs |
| --------------------------+
| Total Operating Expenses (2,330) (3,079)|
| --------------------------+
| OPERATING INCOME (LOSS) 168 (465)|
| |
|Interest expense, net (18) (5)|
| |
|Loss on equity-method investments (43) (122)|
| |
|Loss on financial instruments, net (1) -|
| |
| INCOME (LOSS) BEFORE INCOME TAXES 106 (592)|
| |
| AND NONCONTROLLING INTEREST |
| |
|Income tax benefit (expense) 23 (37)|
| --------------------------+
| NET INCOME (LOSS) 129 (629)|
| |
|Net loss (income) attributable to noncontrolling (1) 129|
|interest |
| --------------------------+
| NET INCOME (LOSS) ATTRIBUTABLE TO PARENT COMPANY 128 (500)|
| --------------------------+
| |
| |
| EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT 0.14 (0.56)|
|COMPANY STOCKHOLDERS |
| |
| EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO 0.14 (0.56)|
|PARENT COMPANY STOCKHOLDERS |
| |
| |
| |
| NUMBER OF WEIGHTED AVERAGE |
| |
| SHARES USED IN CALCULATING |
| |
| EARNINGS PER SHARE 889.8 889.5|
+------------------------------------------------------------------------------+
+------------------------------------------------------------------------------+
|STMicroelectronics N.V. |
| |
|CONSOLIDATED BALANCE SHEETS |
| |
|As at December 31, September 27, December 31,|
| |
|In millions of U.S. dollars 2014 2014 2013 |
| ----------------------------------------+
| (Unaudited) (Unaudited) (Audited) |
| |
|ASSETS |
| |
|Current assets: |
| |
|Cash and cash equivalents 2,017 2,130 1,836|
| |
|Short-term deposits - - 1|
| |
|Marketable securities 334 330 57|
| |
|Trade accounts receivable, net 911 1,046 1,049|
| |
|Inventories 1,269 1,263 1,336|
| |
|Deferred tax assets 97 168 123|
| |
|Assets held for sale 33 31 16|
| |
|Other current assets 390 508 389|
| ----------------------------------------+
|Total current assets 5,051 5,476 4,807|
| |
|Goodwill 82 85 90|
| |
|Other intangible assets, net 193 199 217|
| |
|Property, plant and equipment, net 2,647 2,785 3,156|
| |
|Non-current deferred tax assets 386 242 227|
| |
|Long-term investments 69 60 76|
| |
|Other non-current assets 580 564 600|
| ----------------------------------------+
| 3,957 3,935 4,366|
| |
|Total assets 9,008 9,411 9,173|
| ----------------------------------------+
| |
| |
|LIABILITIES AND EQUITY |
| |
|Current liabilities: |
| |
|Short-term debt 202 223 225|
| |
|Trade accounts payable 597 632 694|
| |
|Other payables and accrued liabilities 841 883 937|
| |
|Dividends payable to stockholders 87 4 89|
| |
|Accrued income tax 39 39 48|
| ----------------------------------------+
|Total current liabilities 1,766 1,781 1,993|
| |
|Long-term debt 1,603 1,743 928|
| |
|Post-employment benefit obligations 392 342 366|
| |
|Long-term deferred tax liabilities 10 9 11|
| |
|Other long-term liabilities 182 136 158|
| ----------------------------------------+
| 2,187 2,230 1,463|
| |
|Total liabilities 3,953 4,011 3,456|
| |
|Commitment and contingencies |
| |
|Equity |
| |
|Parent company stockholders' equity |
| |
|Common stock (preferred stock: 1,157 1,157 1,156|
|540,000,000 shares authorized, not |
|issued; common stock: Euro 1.04 |
|nominal value, 1,200,000,000 shares |
|authorized, 910,797,305 shares issued, |
|873,939,583 shares outstanding) |
| |
|Capital surplus 2,741 2,727 2,581|
| |
|Retained earnings 817 950 1,076|
| |
|Accumulated other comprehensive income 613 781 1,042|
| |
|Treasury stock (334) (278) (212)|
| ----------------------------------------+
|Total parent company stockholders' 4,994 5,337 5,643|
|equity |
| |
|Noncontrolling interest 61 63 74|
| ----------------------------------------+
|Total equity 5,055 5,400 5,717|
| |
|Total liabilities and equity 9,008 9,411 9,173|
+------------------------------------------------------------------------------+
+----------------------------------------------------------------------------+
| STMicroelectronics N.V. |
| |
| |
| |
| SELECTED CASH FLOW DATA |
| |
| |
+----------------------------------------------+---------+---------+---------+
| Cash Flow Data (in US$ millions) | Q4 2014 | Q3 2014 | Q4 2013 |
+----------------------------------------------+---------+---------+---------+
| |
+----------------------------------------------+---------+---------+---------+
| Net Cash from operating activities | 311 | 281 | 270 |
+----------------------------------------------+---------+---------+---------+
| Net Cash used in investing activities | (103) | (424) | (145) |
+----------------------------------------------+---------+---------+---------+
| Net Cash from (used in) financing activities | (317) | 776 | 270 |
+----------------------------------------------+---------+---------+---------+
| Net Cash increase (decrease) | (113) | 628 | 402 |
+----------------------------------------------+---------+---------+---------+
| |
+----------------------------------------------+---------+---------+---------+
| Selected Cash Flow Data
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