- Fourth quarter net revenues up 13.6% sequentially to $2,583
million - Fourth quarter operating income, before restructuring,
returned to profitability - Fourth quarter net operating cash flow
increased to $221 million in the quarter* PARIS, Jan. 26
/PRNewswire-FirstCall/ -- 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 $91 million in the prior quarter and year-ago period,
respectively. Revenue and Operating Results by Product Segment The
following table provides a breakdown of revenues and operating
results by product segment. Unused capacity charges are reflected
in the segment "Others" in the respective quarters. Operating Q4
2009 Q3 2009 Q4 2008 Segment Q4 2009 Operating Q3 2009 Operating Q4
2008 Operating (In Million Net Income Net Income Net Income US$)
Revenues (Loss) Revenues (Loss) Revenues (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) 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 http://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. ______________ (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. 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 euro compared to
$1.38 to 1.00 euro for the 2009 third quarter and $1.40 to 1.00
euro 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 euro,
compared to $1.49 to 1.00 euro 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 -------------- --------------
-------------- Operating Operating Net Income Net Income Product
Segment Revenues (Loss) Revenues (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 euro for the 2010 first quarter, which
reflects an assumed exchange rate of $1.44 = 1.00 euro combined
with the impact of existing hedging contracts averaging a hedged
rate of about $1.41 = 1.00 euro. 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 -- In automotive electronics, ST gained a major design
win from a world-leading US car maker for a 32-bit microcontroller
(MCU) based automatic-transmission platform to be deployed across
all its models. The 32-bit Power Architecture MCU implements ST's
leading-edge proprietary embedded-Flash technology. Together with
Freescale, ST also introduced a dual-core Power Architecture MCU
family designed for functional safety applications. -- In the
powertrain arena, ST achieved a design win for a single-chip
smart-power actuator chip, manufactured in ST's proprietary BCD
technology, from a major tier-one OEM in Europe for deployment in
Europe and America. ST also gained important design wins from major
tier-one OEMs in Europe and Japan for smart-IGBT based Electronic
Ignition Drivers, satisfying the stringent requirements of space,
cost, and enhanced functionality and diagnostics. Market demand for
ST's world-leading expertise in smart power technology is
increasingly being driven by the CO2 reduction plans currently
being executed by car makers. -- In car body applications, ST
consolidated its leadership position in 'door zone' applications,
such as controls for windows, mirrors and side-impact airbags, with
a design win from a major OEM in Europe for the market's largest
generic platform, including all variants from low- to high-end
solutions. -- In automotive infotainment, ST gained an important
design win for its second generation of highly integrated car-radio
receiver ICs from a leading car-infotainment manufacturer in Japan,
with production to start in H2 2010. ST also achieved a key design
win, for its leading-edge multi-standard tuner DSP family, from a
leading infotainment OEM in Europe. Additionally, ST gained an
important design win for its GPS solutions for road-tolling
equipment in Germany from a leading European manufacturer. -- In
home entertainment applications, ST announced its adoption of the
ARM® Cortex(TM)-A9 MPCore(TM) processor, in addition to the
Mali®-400 graphics processor, for its upcoming set-top-box and
digital TV System-on-Chip (SoC) ICs. The Cortex-A9 processor will
provide the scalable high performance required to enable the
high-bandwidth broadband and broadcast content being streamed into
homes, while also enabling ST to leverage its expertise in mobile
markets, in close cooperation with ST-Ericsson, to deliver
world-class power efficiency. -- In set-top-box (STB) applications,
ST has several projects in development with key players, based on
the STi7105 HD decoder running middleware from NDS, allowing ST to
gain an important piece of this market. ST is also winning new
designs on the STi7105, including, most recently, a key broadcaster
in France. ST also announced that its highly integrated STi5197
cable STB decoder is now shipping in high volume to leading STB
makers in China. -- Also in STBs, ST's satellite front-end STB
demodulator ICs are now being used by a leading US broadcaster in
outdoor dish units, which gives it the potential to be installed in
every new subscriber's home in the US. ST also achieved EuroDOCSIS
2.0 certification for its production-ready reference design for
feature-rich cable STBs using the STi7141 SoC. -- In digital TV
chips, ST launched a new generation of high-performance, full
high-definition (HD) H.264/MPEG SoCs with world-class Faroudja(TM)
video/audio enhancements, delivering full high-definition
processing and accelerated Internet-TV support for the
next-generation of integrated broadcast and broadband digital TVs.
The new 'Freeman' SoCs will enable compelling services and new
business models for premium content, and will deliver a rich and
intuitive user experience. Additionally, ST gained a design win for
an advanced H.264/MPEG decoder to increase its penetration of the
emerging ISDB-T DTV market in Latin America. -- In multimedia
display chips, ST announced two new families of Faroudja-based LCD
controller SoCs with advanced color processing and DisplayPort and
HDMI receivers to support full-HD sources, such as Blu-ray. The
DisplayPort-based STDP8028 SoC is being designed into
multi-function monitors and public displays by leading OEMs around
the world, with two tier-one manufacturers starting mass production
in the quarter. In addition, two tier-one makers also started
production with the new STDP6000 SoC. -- Also in displays, ST, in
collaboration with LG Display, proposed the iDP (Internal
DisplayPort) interface standard, which is designed to replace the
current LVDS (Low Voltage Differential Signaling) standard, to the
Video Electronics Standards Association (VESA) TV Panel Task Group.
This new standard is being driven by the requirements for richer
graphics, 3D video and enhanced picture quality. -- In consumer
audio, ST announced its next-generation STA370BWS SoundTerminal(TM)
chip, which delivers increased performance at a highly competitive
price. The new chip employs ST's leading-edge Full Flexible
Amplifier (FFX(TM)) technology to deliver high-quality stereo audio
at 10W and above, in various consumer applications, including the
latest ultra-thin LED-backlit Flat TVs. ST's SoundTerminal family
is currently enjoying success with strong demand and increased
market share at leading OEMs in China, Taiwan, Korea and Japan. --
In imaging, ST unveiled details of its roadmap for 5M-pixel CMOS
image sensors in the standard quarter-inch optical format commonly
used in camera-phone handsets. ST's latest leading-edge sensors
offer a choice of features creating the richest portfolio of
sensors at the 5-megapixel resolution. -- In communications
infrastructure applications, a device in ST's SPEAr(TM) family of
customizable processors was selected and qualified by a major
telecoms company in China, making it ready for implementation in
new designs from the manufacturer. Industrial and Multisegment
Sector (IMS) Product Highlights -- In MEMS (Micro
Electro-Mechanical Systems), ST launched several new families of
motion sensors for multiple consumer and portable applications,
including: a broad range of thirteen new single- and two-axis
gyroscopes; a high-performance single-package three-axis analog
gyroscope; a motion-sensor combo module integrating a three-axis
digital accelerometer with a two-axis analog gyroscope; and a range
of three-axis accelerometers with digital output that can detect
accelerations up to 24g. ST also introduced a high-accuracy sensor
for smart applications in vehicles such as adaptive front lights
and advanced anti-theft systems. -- ST continued to gain numerous
design wins for motion sensors in various applications including:
two digital camera manufacturers, one in Korea and another in
Japan; an important mobile phone maker in Korea; several netbook
and laptop manufacturers for free-fall protection; and a customer
in Japan for next-generation gaming platforms. -- Also in MEMS, ST
expanded its portfolio with next-generation acoustic MEMS
microphones that use technology from OMRON to significantly improve
sound quality, reliability, and cost-effectiveness for existing and
emerging audio applications in mobile phones, wireless devices and
games that respond to voice inputs. -- In remote energy-metering
applications, ST announced that it has been chosen by Enel, Italy's
largest power company, to provide the semiconductor components for
new electronic power meters destined for distribution in Spain. The
power meters are key elements of the new remote management solution
to be installed by Endesa, the largest electricity supplier in
Spain. ST also achieved a design win for a powerline-modem based
smart-metering project in Africa from a leading meter manufacturer
in Egypt. -- In analog and mixed-signal ICs, ST introduced the
first single-chip audio subsystem IC to include 3D sound
enhancement for improved stereo effects in equipment such as
notebook PCs, mobile internet devices and gaming consoles. Also in
the audio field, ST gained a key design win from a world-leading
mobile phone maker for a headset audio amplifier. ST also announced
a smart-reset chip that allows mobile products experiencing 'system
freeze' to be restarted safely without removing the battery or
pushing the recessed reset button. Additionally, ST attained a
number of design wins for temperature sensor ICs in solid-state
disks drives, e-Books and other portable applications. -- In
advanced analog, ST introduced a series of highly accurate LED
drivers with automatic power saving, enabling electronic signage
such as road signs, advertising, stadium displays, battery or
solar-powered signs and similar equipment to deliver better
high-resolution viewing by ensuring consistent brightness across
the viewing area. -- In power conversion ICs, ST gained design wins
for controller and high-voltage converter chips in LED-backlit LCD
TV power supplies, most significantly with a major TV maker in
Korea. ST was also chosen to supply power management ICs for a PC
graphics-card platform and gained an important design win for the
ST1S10 DC-DC converter IC with an important STB maker in Europe.
Launched approximately two years ago, this converter IC has met
with considerable success in consumer applications with top-tier
OEMs and distributors. In addition, several designs were won for
power management ICs, on recently qualified devices, both for
linear and switching regulators, in various markets and
applications including netbooks, mobile phones, printers and
gaming. -- And in power transistors, ST introduced a series of
IGBTs that reduce the environmental impact of daily-use equipment
such as home appliances, industrial machines and HVAC
(Heating/Ventilating/Air Conditioning) systems. ST also gained
design wins for ignition IGBTs from several car manufacturers in
India. These IGBTs are optimized for pencil coil systems and can
help cut noxious emissions and reduce fuel consumption. ST also
achieved design wins for power MOSFETs in a range of applications,
primarily in consumer and lighting applications. Also, a leading
automotive OEM in Europe selected ST's latest STripFET(TM) VI
DeepGATE(TM) power MOSFETs for use in Antilock Braking Systems. --
In application-specific discrete devices, ST gained an increasing
number of design wins in areas such as telecom networking and solar
panels for its power Schottky diodes in PowerFlat halogen-free
packages, which offer a slim 1.05mm profile and very low thermal
resistance, ideal for power conversion applications. ST introduced
its first ultra-low Vf power Schoktty diodes for the 80 PLUS
power-supply market. In addition, ST introduced a family for
protection against 'electrical over-stress' and 'electrical static
discharge', specified to IEC 61000-4-5, which is applicable to most
telecom and industrial equipment. -- In standard microcontrollers,
ST achieved an industry first for MCUs based on ARM Cortex-M
processor cores with devices featuring 90nm embedded Flash,
leveraging ST's investment in leading-edge embedded-Flash
technology for its secure and automotive MCUs to realize
performance and cost advantages for the STM32 family. -- In secure
MCUs, ST announced its AuKey brand-protection solution, based on
ST's ST23 highly secure MCUs, to help brand owners authenticate
their products in various applications, including computer
accessories, printer consumables, gaming peripherals and disposable
medical equipment. ST also introduced a robust low-power processor
chip dedicated to managing SIM data for machine-to-machine (M2M)
cellular communications applications. -- In smart cards, ST
achieved the world's first security certification at level EAL6+
using Common Criteria 3.1 methodology, for a secure MCU that
targets security-demanding governmental applications such as
passports and identity cards. -- In memory ICs, ST introduced a
2-Kbit IC enabling applications for re-usable contactless tickets
for mass transit services, increasing user convenience and operator
efficiency. Technology Highlights -- ST announced its cooperation
with Mayo Clinic on a novel platform for the remote monitoring of
patients with chronic cardiovascular disease. The platform will
provide a comprehensive and unobtrusive solution that monitors
person-specific data and physiological parameters and influences
lifestyle and treatment choices. ST-Ericsson Highlights -- LG
Electronics selected ST-Ericsson's mobile HSPA (High Speed Packet
Access) broadband modem, M340, to power the LG GW990 mobile
internet device, which will be launched in the second half of 2010.
The M340 is part of the mobile platforms solution, together with
the Intel Moorestown solution. The M340 is a small, flexible modem
solution with low-power consumption enabling high speed internet
access. -- 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. Faroudja,
SoundTerminal, FFX, SPEAr, STripFET VI and DeepGATE are trademarks
of STMicroelectronics. All other trademarks or registered
trademarks are the property of their respective owners. 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: -- Significant changes in demand in the key application
markets and from key customers served by our products make it
extremely difficult to accurately forecast and plan our future
business activities. In particular following a period of
significant order cancellations, we recently experienced a strong
surge in customer demand, which is leading to capacity constraints
in certain applications; -- our ability to utilize and operate our
manufacturing facilities at sufficient levels to cover fixed
operating costs in periods of reduced customer demand as well as to
ramp up production efficiently and rapidly to respond to increased
customer demand, as well as the financial impact of obsolete or
excess inventories if actual demand differs from our expectations;
-- the impact of intellectual-property claims by our competitors or
other third parties, and our ability to obtain required licenses on
reasonable terms and conditions; -- our ability to successfully
integrate the acquisitions we pursue, in particular the successful
integration and operation of the ST-Ericsson joint venture; -- we
hold significant non-marketable equity investments in Numonyx, our
joint venture in the flash-memory market segment, and in the
ST-Ericsson joint venture. Additionally, we are a guarantor for
certain Numonyx debts. Therefore, further declines in these market
segments or the inability of Numonyx and /or ST-Ericsson to
successfully compete could result in further significant impairment
charges, restructuring charges and gains/losses on equity
investments; -- our ability to compete in our industry since a high
percentage of our costs are fixed and are incurred in currencies
other than U.S. dollars, especially in light of the volatility in
the foreign exchange markets and more particularly in the rate of
the U.S. Dollar compared to the other major currencies which we use
for our operations; -- our ability to execute our restructuring
initiatives in accordance with our plans if unforeseen events
require adjustments or delays in implementation or require new
plans; -- our ability in an intensively competitive environment to
secure customer acceptance and to achieve our pricing expectations
for high-volume supplies of new products in whose development we
have been, or are currently, investing; -- changes in the
political, social or economic environment, including as a result of
military conflict, social unrest and/or terrorist activities,
economic turmoil, as well as natural events such as severe weather,
health risks, epidemics or earthquakes in the countries in which
we, our key customers or our suppliers, operate; -- the outcome of
ongoing litigation as well as any new litigation to which we may
become a defendant; and -- changes in our overall tax position as a
result of changes in tax laws or the outcome of tax audits, and our
ability to accurately estimate tax credits, benefits, deductions
and provisions and to realize deferred tax assets. 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 http://www.st.com/. (tables
attached) (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 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 Operating and cents per Income Net Earnings Corresponding
share) Gross Profit (Loss) (Loss) 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 Operating and cents per Income Net
Earnings Corresponding share) Gross Profit (Loss) (Loss) 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 Operating and cents per Income Net Earnings
Corresponding share) Gross Profit (Loss) (Loss) 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$
December 31, September December 31, millions) 2009 26, 2009 2008
------------------------------ ------------ --------- ------------
Cash and cash equivalents, net of bank overdrafts 1,588 1,576 989
Marketable securities, current 1,032 955 651 Restricted cash 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 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 STMicroelectronics N.V. Consolidated
Statements of Income (in million of U.S. dollars, except per share
data ($)) Three Months Ended ------------------ (Unaudited)
(Audited) ----------- --------- December, December, 31 31 2009 2008
---- ---- Net sales 2,570 2,264 Other revenues 13 12 --- --- NET
REVENUES 2,583 2,276 Cost of sales (1,626) (1,454) ------ ------
GROSS PROFIT 957 822 Selling, general and administrative (303)
(304) Research and development (603) (572) Other income and
expenses, net 39 6 Impairment, restructuring charges and other
related closure costs (96) (91) --- --- Total Operating Expenses
(963) (961) ---- ---- OPERATING LOSS (6) (139) Oher-than-temporary
impairment charge and realized losses on financial assets (68) (55)
Interest income, net 3 3 Loss on equity investments (13) (204) Gain
on sale of financial assets - 15 Gain on convertible debt buyback 3
--- --- LOSS BEFORE INCOME TAXES (81) (380) AND NONCONTROLLING
INTEREST Income tax benefit (expense) (48) 9 --- --- LOSS BEFORE
NONCONTROLLING INTEREST (129) (371) Net loss attributable to
noncontrolling interest 59 5 --- --- NET LOSS ATTRIBUTABLE TO
PARENT COMPANY (70) (366) === ==== LOSS PER SHARE (BASIC)
ATTRIBUTABLE TO PARENT COMPANY SHAREHOLDERS (0.08) (0.42) LOSS PER
SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY SHAREHOLDERS (0.08)
(0.42) NUMBER OF WEIGHTED AVERAGE SHARES USED IN CALCULATING 878.3
878.1 LOSS PER SHARE STMicroelectronics N.V. Consolidated
Statements of Income (in million of U.S. dollars, except per share
data ($)) Twelve Months Ended ------------------- (Unaudited)
(Audited) ----------- --------- December, December, 31 31 2009 2008
---- ---- Net sales 8,465 9,792 Other revenues 45 50 --- --- NET
REVENUES 8,510 9,842 Cost of sales (5,884) (6,282) ------ ------
GROSS PROFIT 2,626 3,560 Selling, general and administrative
(1,159) (1,187) Research and development (2,365) (2,152) Other
income and expenses, net 166 62 Impairment, restructuring charges
and other related closure costs (291) (481) ---- ---- Total
Operating Expenses (3,649) (3,758) ------ ------ OPERATING LOSS
(1,023) (198) Oher-than-temporary impairment charge and realized
losses on financial assets (140) (138) Interest income, net 9 51
Loss on equity investments (337) (553) Gain (loss) on sale of
financial assets (8) 15 Gain on conv. debt buyback 3 - --- --- LOSS
BEFORE INCOME TAXES (1,496) (823) AND NONCONTROLLING INTEREST
Income tax benefit 95 43 --- --- LOSS BEFORE NONCONTROLLING
INTEREST (1,401) (780) Net loss (income) attributable to
noncontrolling interest 270 (6) --- --- NET LOSS ATTRIBUTABLE TO
PARENT COMPANY (1,131) (786) ====== ==== LOSS PER SHARE (BASIC)
ATTRIBUTABLE TO PARENT COMPANY SHAREHOLDERS (1.29) (0.88) LOSS PER
SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY SHAREHOLDERS (1.29)
(0.88) NUMBER OF WEIGHTED AVERAGE SHARES USED IN CALCULATING 876.9
892.0 LOSS PER SHARE STMicroelectronics N.V. CONSOLIDATED BALANCE
SHEETS December September December As at 31, 26, 31, In million of
U.S. dollars 2009 2009 2008 ---- ---- ---- (Unaudited) (Unaudited)
(Audited) ----------- ----------- --------- ASSETS ====== Current
assets: Cash and cash equivalents 1,588 1,576 1,009 Marketable
securities 1,032 955 651 Trade accounts receivable, net 1,367 1,422
1,064 Inventories, net 1,275 1,299 1,840 Deferred tax assets 298
252 252 Assets held for sale 31 33 - Other receivables and assets
753 1,054 685 --- ----- --- Total current assets 6,344 6,591 5,501
Goodwill 1,071 1,082 958 Other intangible assets, net 819 851 863
Property, plant and equipment, net 4,081 4,177 4,739 Long-term
deferred tax assets 333 360 373 Equity investments 273 286 510
Restricted cash 250 250 250 Non-current marketable securities 42
170 242 Other investments and other non-current assets 442 435 477
--- --- --- 7,311 7,611 8,412 Total assets 13,655 14,202 13,913
------ ------ ------ LIABILITIES AND SHAREHOLDERS' EQUITY
============================= Current liabilities: Bank overdrafts
0 0 20 Current portion of long-term debt 176 230 123 Trade accounts
payable 883 954 847 Other payables and accrued liabilities 1,049
1,058 996 Dividends payable to shareholders 26 53 79 Deferred tax
liabilities 20 8 28 Accrued income tax 126 136 125 --- --- ---
Total current liabilities 2,280 2,439 2,218 Long-term debt 2,316
2,455 2,554 Reserve for pension and termination indemnities 317 340
332 Long-term deferred tax liabilities 37 23 27 Other non-current
liabilities 342 375 350 --- --- --- 3,012 3,193 3,263 Total
liabilities 5,292 5,632 5,481 Commitment and contingencies Equity
Parent company shareholders' equity Common stock (preferred stock:
540,000,000 shares authorized, not issued; 1,156 1,156 1,156 common
stock: Euro 1.04 nominal value, 1,200,000,000 shares authorized,
910,319,305 shares issued, 878,333,566 shares outstanding) Capital
surplus 2,481 2,470 2,324 Accumulated result 2,723 2,793 4,064
Accumulated other comprehensive income 1,164 1,255 1,094 Treasury
stock (377) (377) (482) ---- ---- ---- Total parent company
shareholders' equity 7,147 7,297 8,156 Noncontrolling interest
1,216 1,273 276 ----- ----- --- Total equity 8,363 8,570 8,432
----- ----- ----- Total liabilities and equity 13,655 14,202 13,913
---------------------------- ------ ------ ------
STMicroelectronics N.V. SELECTED CASH FLOW DATA
----------------------- Cash Flow Data (in US$ millions) Q4 2009 Q3
2009 Q4 2008 -------------------------------- ------- -------
------- Net Cash from operating activities 449 225 390 Net Cash
used in investing activities (207) (311) (172) Net Cash from (used
in) financing activities (218) (36) 2 Net Cash increase (decrease)
12 (109) 141 Selected Cash Flow Data (in US$ millions) Q4 2009 Q3
2009 Q4 2008 ------------------------------- ------- -------
------- Depreciation & amortization 355 342 357 Payment for
Capital expenditures (190) (98) (206) Dividends paid (27) (26) (79)
Change in inventory, net 11 174 (166) DATASOURCE:
STMicroelectronics CONTACT: INVESTOR RELATIONS: Tait Sorensen,
Director, Investor Relations, +1-602-485-2064, ; or MEDIA
RELATIONS: Maria Grazia Prestini, Group VP, Corporate Media and
Public Relations, STMicroelectronics, + 41 22 929 6945, Web Site:
http://www.st.com/
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