STMicroelectronics (NYSE: STM) reported financial results for the 2009 fourth quarter and full year ended December 31, 2009.
President and CEO Carlo Bozotti commented, “ST’s fourth quarter financial results reflect a positive finish to a very difficult year for ST, the semiconductor industry and the global economy.
“Our fourth quarter net revenues increased 13.6% sequentially, above our outlook range and our gross margin came in at 37%, above the midpoint of our outlook range. Excluding restructuring charges, ST returned to an operating income of $90 million for the quarter.*
“The Company’s stronger than forecasted quarterly sequential revenue performance was thanks to growth in all regions and market segments, with all segments, except Telecom, posting double-digit growth.
“Despite the challenging economic environment, ST made significant
progress over the course of 2009 by successfully delivering on key actions
announced earlier in the year. First, we protected and then enhanced our cash
position, improving our net financial position by $965 million to end the year
with a net cash position of $420 million.* Second, we made excellent progress
in lowering our cost base with a $1 billion savings plan to be completed by
about mid-2010. As a result, we improved our financial performance having generated,
as anticipated, some points of operating margin and net operating cash flow
equal to 8.6% of sales despite an unfavorable currency environment.*
“2009 has been a year of severe losses for ST but we are encouraged by
the progress we made throughout the year. 2010 will be a year of great opportunities
for ST. Our efforts to strengthen our product portfolio will allow us to grow
organically and to participate in new markets and the completion of our major
restructuring program will continue to substantially improve our cost structure
and competitiveness.”
(*) Net operating cash flow, net financial position and operating
income excluding 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 for a reconciliation to U.S. GAAP.
Fourth Quarter Review
ST’s net revenues for the fourth quarter of 2009 total $2,583
million and include sales recorded by ST-Ericsson as consolidated by ST. Net
revenues increased 13.6% sequentially, reflecting an increase in demand across
all of ST’s served market segments, as well as in all regions, with particular
strength in Japan, Greater China and the Americas. Net revenues increased in
comparison to the year-ago quarter in all market segments except Consumer and
Industrial, and in all regions except Japan, reflecting the broad-based recovery
in the semiconductor market.
| Net Revenues By Market Segment / Channel (a) (In %) | Q4 2009 | Q3 2009 | Q4 2008 |
| Market Segment / Channel: | |||
| Automotive | 13% | 12% | 12% |
| Computer |
14% | 13% | 11% |
| Consumer | 11% | 11% | 14% |
| Industrial & Other | 7% | 7% | 9% |
| Telecom | 36% | 41% | 35% |
|
|
|
|
|
| Total OEM | 81% | 84% | 81% |
| Distribution | 19% | 16% | 19% |
(a) Sales recorded by ST-Ericsson and consolidated by ST are
included in Telecom and Distribution.
On a sequential basis, all market segments posted growth, with Computer
increasing by 22%, Industrial by 19%, Automotive by 19%, Consumer by 12% and
Telecom by 1%. Distribution increased 35%, reflecting strong demand and improving
market conditions. In comparison to the year-ago quarter, all segments increased
except for Consumer and Industrial, down by 11% and 7%, respectively. Automotive
was up by 23%, Telecom by 17% and Computer by 37%. Distribution increased 12%
in comparison to the year-ago period reflecting the realignment of stock with
demand and improved industry conditions.
Gross margin in the fourth quarter of 2009 was 37.0%, significantly higher than the 31.3% reported in the third quarter of 2009, due to higher volumes, increased fab loading and improved efficiencies. As anticipated, ST’s manufacturing performance improved in the fourth quarter as the company continued to ramp towards, but has not yet reached full capacity. Gross margin in the year-ago period was 36.1%.
Combined SG&A and R&D expenses were $906 million in the fourth quarter of 2009, compared to $885 million in the prior quarter and $876 million in the year-ago quarter, which did not include the activities related to Ericsson Mobile Platforms. As anticipated, combined SG&A and R&D expenses in the fourth quarter increased reflecting a longer quarter as well as a negative currency impact but were partially offset by ongoing cost-savings. Combined operating expenses, as a percentage of sales, posted better than expected results as that ratio in the fourth quarter improved to 35.1% from 38.9% in the prior quarter.
In the fourth quarter, ST continued certain ongoing restructuring activities and headcount-reduction programs to streamline its cost structure. The Company’s $1 billion savings and productivity plan, encompassing manufacturing, the rationalization of sites and capturing synergies in wireless, is about three-fourths complete at the end of the year. On December 3, 2009, ST-Ericsson expanded its restructuring plan, targeting additional annualized savings of $115 million in operating expenses and spending, along with an extensive R&D efficiency program. The targeted time of completion of this new plan is the end of 2010.
Related to the Company’s cost-realignment initiatives, ST posted fourth quarter restructuring and impairment charges of $96 million, of which $61 million are related to ST-Ericsson. ST posted restructuring and impairment charges of $53 million and $91 million in the prior quarter and year-ago period, respectively.
Revenue and Operating Results by Product Segment
The following table provides a breakdown of revenues and operating results
by product segment. Unused capacity charges are reflected in the segment “Others” in
the respective quarters.
| Operating Segment (In Million US$ and %) |
Q4 2009 Net Revenues |
Q4 2009 Operating Income (Loss) |
Q3 2009 Net Revenues |
Q3 2009 Operating Income (Loss) |
Q4 2008 Net Revenues |
Q4 2008 Operating Income (Loss) |
| ACCI | 997 | 57 | 852 | (36) | 899 | 18 |
| IMS | 854 | 90 | 694 | 27 | 791 | 101 |
| Wireless(a) | 712 | (48) | 704 | (75) | 575 | (77) |
| Others (b) (c) | 20 | (105) | 25 | (112) | 11 | (181) |
| TOTAL | 2,583 | (6) | 2,275 | (196) | 2,276 | (139) |
(a) As of February 3, 2009, “Wireless” includes
the portion of sales and operating results of the ST-Ericsson joint venture
as consolidated in the Company’s revenues and operating results, as well
as other items affecting operating results related to the wireless business.
(b) Net revenues of “Others” includes revenues from sales
of Subsystems, assembly services and other revenues.
(c) Operating income (loss) of “Others” includes items
such as unused capacity charges, impairment, restructuring charges, and other
related closure costs, 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 the other costs that
are not allocated to product groups, as well as operating earnings or losses
of the Subsystems and Other Products Group. “Others” includes $13
million, $47 million and $57 million of unused capacity charges in the fourth
and third quarters of 2009 and fourth quarter of 2008, respectively and $96
million, $53 million and $91 million of impairment and restructuring charges
in the fourth and third quarters of 2009 and fourth quarter of 2008, respectively.
ACCI (Automotive/Consumer/Computer/Communication Infrastructure Product Groups)
fourth quarter net revenues increased 17% sequentially to $997 million, mainly
driven by automotive, set-top box and computer peripherals and reflected solid
holiday sales and continuing improvement in industry conditions. In a significant
turnaround, ACCI returned to profitability in the fourth quarter, posting operating
income of $57 million, compared to a loss of $36 million in the prior quarter
and a profit of $18 million in the year-ago quarter.
IMS (Industrial and Multisegment Product Sector) fourth quarter net revenues increased 23% sequentially to $854 million, driven by strong growth in microcontrollers, analog, smartcards and power discretes and reflected improved market conditions and solid growth in the multi-segment market and in distribution. IMS operating income returned to a double-digit margin, and increased significantly to $90 million in the fourth quarter, and compares to income of $27 million in the prior quarter and income of $101 million in the year-ago quarter.
Wireless net revenues in the fourth quarter increased 1% sequentially to $712 million. Net revenues were driven by continued demand in China. Wireless operating loss in the fourth quarter narrowed to $48 million benefiting from the ongoing cost restructuring plans, compared to an operating loss of $75 million in the prior quarter. Wireless operating results in the fourth quarter of 2009 exclude $61 million in restructuring charges related to ST-Ericsson, as consolidated by ST.
In the fourth quarter of 2009, ST booked $59 million of income, reflecting the net loss attributable to non-controlling interest, mainly related to the ST-Ericsson joint venture. This amount is posted below operating results in ST’s Consolidated Income Statement and reflects Ericsson’s 50% share in the joint venture’s loss, as consolidated by ST.
For additional information on ST-Ericsson, see www.stericsson.com
In the fourth quarter of 2009, ST’s loss on equity investments was $13
million including a charge of $5 million that represents ST’s proportional
share of the loss reported by Numonyx in its third quarter of 2009. As of December
31, 2009, Numonyx held approximately $572 million in cash on its balance sheet.
The fourth quarter of 2009 income statement includes a pre-tax non-cash loss
of $68 million related to the sale of certain asset-backed securities. These
securities were purchased by Credit Suisse Securities (USA) LLC without ST's
authorization and were the subject of a favorable ruling by the Financial Industry
Regulatory Authority issued on February 12, 2009, which ordered Credit Suisse
Securities (USA) LLC to pay ST approximately $406 million plus interest against
restitution of the securities. ST sold a part of the securities portfolio pursuant
to correspondence from Credit Suisse Securities (USA) LLC, while the collection
of the related award is still pending. As a result, the Company collected $75
million as a partial payment towards the collection of the awarded amount and
posted the difference of $68 million as an Income Statement loss. Such amount
comes in addition to the $245 million impairment that had been taken as of September
30, 2009 with respect to our portfolio of auction rate securities. These amounts
should be recovered upon collection of the award. The Company is seeking confirmation
of the award from the United States District Court of the Southern District
of New York.
Income tax expense in the fourth quarter was $48 million, largely reflecting valuation allowances taken on loss carryforwards in certain jurisdictions and a year-end true-up on the final earnings distribution among jurisdictions.
ST’s net loss narrowed to $70 million in the fourth quarter of 2009, or $-0.08 per share, compared to a net loss of $201 million and $366 million in the prior quarter and year-ago period, respectively. On an adjusted basis, ST reported a fourth quarter of 2009 net income, excluding impairment and restructuring and Other-Than-Temporary-Impairment (OTTI) charges and losses on financial assets attributable to parent Company’s shareholders, of $36 million, or $0.04 per share.*
For the 2009 fourth quarter, the effective average exchange rate for the Company was approximately $1.43 to €1.00 compared to $1.38 to €1.00 for the 2009 third quarter and $1.40 to €1.00 for the 2008 fourth quarter.
Cash Flow and Balance Sheet Highlights
Net operating cash flow, excluding M&A transactions, was $221 million
for the fourth quarter of 2009 compared to $100 million in the prior quarter
and $161 million in the year-ago quarter*.
Capital expenditures were $190 million during the fourth quarter of 2009,
compared to $98 million in the prior quarter and $206 million in the year-ago
quarter. For the full year 2009, capital expenditures totaled $451 million,
compared to $983 million in 2008 and were consistent with the Company’s
expectations and to the Company’s new asset lighter model.
Inventory was $1.28 billion at quarter end, down from $1.30 billion at September 26, 2009 and $1.84 billion at December 31, 2008. Inventory turns in the fourth quarter improved to a record 5.1 turns compared to 4.8 turns sequentially and 3.1 turns in the year-ago quarter.
ST’s net financial position improved significantly to a net cash position
of $420 million at December 31, 2009 compared to a net debt position of $545
million at December 31, 2008*. ST’s cash and cash equivalents, marketable
securities (current and non-current), short-term deposits and restricted cash
equaled $2.91 billion. Excluding cash and cash equivalents and marketable securities
of $226 million related to ST-Ericsson, a $250 million restricted cash deposit
as collateral for the Hynix-Numonyx loan and $42 million of non-current securities,
the Company’s liquidity totaled $2.39 billion. Total debt was $2.49 billion.
On January 14, 2010, ST completed a program to repurchase about 30.6% of its
2016 convertible bonds. ST paid $314.6 million in outstanding cash to repurchase
the bonds out of which $103 million was paid in the fourth quarter. Total equity
was $8.36 billion, including non-controlling interest of $1.22 billion.
(*)Adjusted earnings per share, net operating cash flow and net financial
position are non-U.S. GAAP measures. For additional information please refer
to Attachment A.
Mr. Bozotti said, “Our focus on strong capital management is
clearly evidenced from our cash flow and balance sheet metrics. We took aggressive
actions to generate cash by accelerating our cash conversion cycle, resulting
in a $565 million reduction in inventory and record inventory turns above 5
times. We reduced capital expenditures to a capex-to-sales ratio of 5.3%, in
line with our asset lighter strategy. We repurchased approximately 30% of our
outstanding convertible bonds with no need of refinancing. And we closed the
year with $2.9 billion in cash and marketable securities.”
Full Year 2009 Results
Net revenues, as reported, for the full year 2009 were $8.51 billion compared
to 2008 revenues of $9.84 billion, which included $299 million in Flash revenues
that were deconsolidated on March 30, 2008.
Gross margin for the full year 2009 was 30.9% of net revenues, lower than
the 36.2% reported in 2008, due to industry conditions that resulted in significant
fab under-loading, operating inefficiencies and above normal price pressure.
Unused capacity charges negatively impacted full year 2009 gross margin by approximately
4 percentage points in addition to the severe impact of an unprecedented volume
discontinuity on fab operations and efficiency.
Combined SG&A and R&D expenses in 2009 were $3,524 million compared
to $3,339 million in 2008, reflecting the expansion of the Company’s activities
through M&A and now in the ST-Ericsson joint venture owned 50% by ST, as
consolidated by ST under the integral method.
Equity in earnings of joint ventures registered a net loss of $337 million in 2009, compared to $553 million in 2008, principally reflecting impairment charges related to Numonyx for both periods. In 2009, ST booked $270 million as income for losses attributable to non-controlling interests, but consolidated in ST’s financial results.
Net loss, as reported, was $1,131 million in 2009, or $-1.29 per share, compared
to a net loss of $786 million, or $-0.88 per share in 2008. On an adjusted basis,
ST reported in 2009 a net loss, excluding impairment, restructuring and Other-Than-Temporary-Impairment
(OTTI) charges and losses on financial assets attributable to parent Company’s
shareholders, of $627 million, or $-0.72 per share.*
In 2009, the effective average exchange rate for the Company was approximately
$1.37 to €1.00, compared to $1.49 to €1.00 for 2008. The Company estimates
the strengthening of the U.S. dollar against the Euro to have had a positive
impact of approximately $380 million for the full year 2009 operating results.
Full Year 2009 Revenue and Operating Results by Product Segment
The following table provides a breakdown of revenues and operating results
by product segment. Unused capacity charges are reflected in the segment “Others”.
| In Million US$ & % | Full Year 2009 | Full Year 2008 | ||
| Product Segment | Net Revenues | Operating Income (Loss) |
Net Revenues | Operating Income (Loss) |
| ACCI | 3,198 | (91) | 4,129 | 136 |
| IMS | 2,641 | 113 | 3,329 | 482 |
| Wireless | 2,585 | (356) | 2,030 | (65) |
| FMG (Flash Memories Group) | 0 | 0 | 299 | 16 |
| Others | 86 | (689) | 55 | (767) |
| TOTAL | 8,510 | (1,023) | 9,842 | (198) |
(*)Adjusted earnings per share is a non-U.S. GAAP measure. For additional
information please refer to Attachment A.
First Quarter 2010 Business Outlook
Mr. Bozotti stated, “We started the first quarter with a solid backlog
and we are working to serve our customers’ demand. In-line with historical
trends, we expect to register a sequential net revenue decrease between about
-7% and -13% which equates to a positive 35% to 45% when compared to the year-over-year
period. However, we expect a better than historical evolution in our gross margin
to about 37.5%, plus or minus 1 percentage point thanks to better manufacturing
loading and efficiency and an improved product mix.
“Looking forward, we believe ST is well positioned to benefit
from the industry upturn because of the important work we have done in product
and technology innovation. We plan to deliver the benefits of our innovation
to our customers and we also expect ST-Ericsson to execute on its plan to transition
to the new portfolio strategy they have devised for their next generation offering.
ST’s recent design-wins for digital consumer platforms, ASICs, and automotive
products and our many promising offerings including 32-bit microcontrollers,
MEMS, with our new families of gyroscopes and active microphones, and low-power
sensors for healthcare and building automation applications support our efforts
to continuously improve our product portfolio.
“In summary, we are excited about the many opportunities ahead of us.
While we continue to make solid progress on reducing our cost structure, our
innovative product portfolio is positioning us well to achieve sustainable profitability
and cash flow generation.”
This outlook is based on an assumed effective currency exchange rate of
approximately $1.42 = €1.00 for the 2010 first quarter, which reflects
an assumed exchange rate of $1.44 = €1.00 combined with the impact of existing
hedging contracts averaging a hedged rate of about $1.41 = €1.00. In addition,
the first quarter will close on March 27, 2010.
Recent Corporate Developments
On December 3, 2009, ST announced changes to its global sales and marketing
organization, aimed at better serving its customers and improving the overall
effectiveness of its sales and marketing structure. The moves, which became
effective January 1, 2010, included the consolidation of ST’s regions
in Asia to two regions from three: Greater China & South Asia and Japan & Korea.
The Greater China and South Asia region is now led by Corporate
Vice President Francois Guibert and the Japan and Korea region
is led by Corporate Vice
President Marco Cassis . Corporate
Vice President Bob Krysiak , moving from Greater China, is now
leading the Americas region.
On January 4, 2010, ST, Enel Green Power and Sharp signed an agreement for the manufacture of triple-junction thin-film photovoltaic panels in Italy. The factory, located in Catania in the existing M6 facility to be contributed by STMicroelectronics, is expected to have an initial production capacity of 160 MW per year. The plant’s capacity is targeted to be gradually increased to 480 MW per annum over the next years and right from its start will represent the single most important production facility for solar panels in Italy.
On January 14, 2010, ST completed a program to repurchase a portion of its outstanding Zero Coupon Senior Convertible Bonds due 2016 (“2016 Bonds”). A total of $298,174,000 nominal value of 2016 Bonds were repurchased representing approximately 30.6% of the total amount originally issued. The Company paid $314.6 million from outstanding cash to repurchase 2016 Bonds with an accreted value of $316.0 million. The repurchased Bonds have been cancelled in accordance with their terms.
Q4 2009 Products, Technology and Design Wins
Automotive, Consumer, Computer and Communication Infrastructure (ACCI)
Product Highlights
Industrial and Multisegment (IMS) Product Highlights
Technology Highlights
ST-Ericsson Highlights
Nokia and ST-Ericsson announced a long-term partnership for technology and solutions in the area of TD-SCDMA, a 3G mobile communications standard in China. The partnership will see Nokia using ST-Ericsson as a key supplier of chipset platforms in its Symbian-based TD-SCDMA devices and solutions portfolio.
ST-Ericsson, together with Ericsson, also announced the companies successfully achieved first mobility between LTE (Long Term Evolution) and HSPA networks, using a multimode LTE/HSPA device powered by ST-Ericsson’s M710 platform.
ST-Ericsson announced its cooperation with ARM to accelerate innovation
in mobile user experience. ST-Ericsson’s U8500 is the first smartphone
platform to integrate a Mali-400 graphics processing unit providing access
to a leading-edge environment for graphics developers.
All of STMicroelectronics' press releases are available at http://www.st.com/stonline/press/news/latest.htm.
All of ST-Ericsson's press releases are available at http://www.stericsson.com/press/press_releases.jsp
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Use of Supplemental Non-U.S. GAAP Financial Information
This press release contains supplemental non-U.S. GAAP financial information,
including adjusted operating income (loss), adjusted net earnings (loss), adjusted
net earnings (loss) per share, net operating 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 in such
statements due to, among other factors:
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,” “will,” “will continue,” “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, 2008, as filed with the SEC on May 13, 2009. 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 Earnings Presentation and Conference Call
On January 27, 2010, the management of STMicroelectronics will host
its annual earnings presentation in Paris at 5:00 a.m. U.S. Eastern Time / 11:00
a.m. CET, and will also conduct a conference call at 9:00 a.m. U.S. Eastern
Time / 3:00 p.m. CET, to discuss its operating performance for the fourth quarter
and full year of 2009
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. The webcast will be available until February 5, 2010.
About STMicroelectronics
STMicroelectronics is a global leader serving customers across the spectrum
of electronics applications with innovative semiconductor solutions. ST aims
to be the undisputed leader in multimedia convergence and power applications
leveraging its vast array of technologies, design expertise and combination
of intellectual property portfolio, strategic partnerships and manufacturing
strength. Further information on ST can be found at www.st.com
STMicroelectronics
Supplemental Non-U.S. GAAP Financial Information
U. S. GAAP – Non-U.S. GAAP Reconciliation
In Million US$ Except Per Share Data
Readers are cautioned that 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.
Adjusted operating income (loss) is used by our management to help enhance an understanding of ongoing operations and to communicate the impact of the excluded items. Adjusted operating income (loss) excludes impairment, restructuring charges and other related closure costs, the impact of purchase accounting (such as in-process R&D costs and inventory step-up charges) and related tax effects.
Adjusted net earnings and earnings per share are used by our management to help enhance an understanding of ongoing operations and to communicate the impact of the excluded items. Adjusted earnings exclude impairment, restructuring charges and other related closure costs attributable to parent Company’s shareholders, the impact of purchase accounting (such as in-process R&D costs and inventory step-up charges), other-than-temporary impairment (OTTI) charges on financial assets, and impairment related to equity investments, 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 profitability from its business operations, excluding the effect of acquisitions and expenses related to the rationalizing of its activities and sites that it does not consider to be part of its on-going operating results, thereby offering, when read in conjunction with the Company’s GAAP financials, (i) the ability to make more meaningful period-to-period comparisons of the Company’s on-going operating results, (ii) the ability to better identify trends in the Company’s business and perform related trend analysis, and (iii) an easier way to compare the Company’s results of operations against investor and analyst financial models and valuations, which usually exclude these items.
| Q4 2009 (US$ millions and cents per share) | Gross Profit | Operating Income (Loss) |
Net Earnings (Loss) |
Corresponding EPS |
| U.S. GAAP | 957 | (6) | (70) | (0.08) |
| Impairment & Restructuring | 96 | 65 | ||
| Realized losses on financial assets | 68 | |||
| Estimated Income Tax Effect | (27) | |||
| Non-U.S GAAP | 957 | 90 | 36 | (0.04) |
| Q3 2009 (US$ millions and cents per share) | Gross Profit | Operating Income (Loss) |
Net Earnings (Loss) |
Corresponding EPS |
| U.S. GAAP | 713 | (196) | (201) | (0.23) |
| Impairment & Restructuring | 53 | 45 | ||
| Estimated Income Tax Effect | 3 | |||
| Non-U.S GAAP | 713 | (143) | (153) | (0.17) |
| Q4 2008 (US$ millions and cents per share) | Gross Profit | Operating Income (Loss) |
Net Earnings (Loss) |
Corresponding EPS |
| U.S. GAAP | 822 | (139) | (366) | (0.42) |
| NXP Wireless Inventory Step-Up | 31 | 31 | 31 | |
| Impairment & Restructuring | 91 | 91 | ||
| Other-Than-Temporary-Impairment | 55 | |||
| Numonyx Impairment | 180 | |||
| Estimated Income Tax Effect | (48) | |||
| Non-U.S GAAP | 853 | (17) | (57) | 0.06 |
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, current and non-current marketable securities, short-term deposits and restricted cash, and our total financial debt include bank overdrafts, the current portion of long-term debt and long-term debt, all as represented 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 by measuring our capital resources based on cash, cash equivalents and marketable securities and the total level of our financial indebtedness. Net financial position is not a U.S. GAAP measure.
| Net Financial Position (in US$ millions) | December 31, 2009 | September 26, 2009 | December 31, 2008 |
| Cash and cash equivalents, net of bank overdrafts | 1,588 | 1,576 | 989 |
| Restricted cash | 1,032 | 955 | 651 |
| Marketable securities, current | 250 | 250 | 250 |
| Marketable securities, non-current | 42 | 170 | 242 |
| Total financial resources | 2,912 | 2,951 | 2,132 |
| Current portion of long-term debt | (176) | (230) | (123) |
| Long-term debt | (2,316) | (2,455) | (2,554) |
| Total financial debt | (2,492) | (2,685) | (2,677) |
| Net financial position | 420 | 266 | (545) |
Net operating cash flow is defined as net cash from operating activities minus net cash used in investing activities, excluding payment for purchases of and proceeds from the sale of marketable securities (both current and non-current), short-term deposits and restricted cash. We believe net operating 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. Net operating 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 net operating cash flow may differ from definitions used by other companies.
| Net Operating Cash Flow (in US$ millions) | Q4 2009 | Q3 2009 | Q4 2008 |
| Net cash from operating activities | 449 | 225 | 390 |
| Net cash from used in investing activities | (207) | (311) | (172) |
| Payment for purchases of / proceeds from sale of current and non-current marketable securities, short-term deposits and restricted cash, net | 5 | 181 | (64) |
| Net operating cash flow | 247 | 95 | (154) |
| Net operating cash flow (ex M&A) | 221 | 100 | 161 |
