STMicroelectronics : ST reports 2012 Fourth Quarter and Full Year Financial Results

STMicroelectronics : ST reports 2012 Fourth Quarter and Full Year Financial 
Results 
GENEVA, SWITZERLAND -- (Marketwire) -- 01/30/13 -- 
STMicroelectronics (NYSE: STM) 
PR No. C2705C 


 
--  Fourth quarter net revenues at $2.16 billion; above the midpoint of
    guidance
--  Net financial position* at $1.19 billion; up from 2011 despite
    challenging environment
--  Fourth quarter impairment charge of $544 million for Wireless goodwill
    and other intangible assets

  
STMicroelectronics (NYSE: STM) reported financial results for the
fourth quarter and full year ended December 31, 2012.  
Fourth quarter net revenues totaled $2.16 billion and gross margin
was 32.3%. Net loss attributable to parent company was $428 million,
mainly due to a charge of $544 million for the impairment of Wireless
goodwill and other intangible assets following the Company's decision
to exit the ST-Ericsson joint venture after the communicated
transition period as part of the Company's new strategic plan
announced on December 10, 2012.  
President and CEO Carlo Bozotti commented, "In the fourth quarter,
both revenue and gross margin results came in above the midpoint of
our guidance despite the ongoing softness in the semiconductor
market. We extended our leadership in key areas. Thanks to new
product momentum, revenues from our wholly-owned businesses increased
0.2% and 1.6% on a sequential and year-ago basis driven by a very
strong ramp of our MEMS products in the fourth quarter.  
"Looking at 2012 overall, we improved our net financial position
compared to 2011 despite the significant cash used by ST-Ericsson as
well as the impact of weak business conditions. We were able to end
the year with significant financial flexibility and strong cash
balances while providing shareholders with the same level of dividend
compared to 2011. 
"Important decisions were made in 2012 that are shaping a new, more
focused, higher-performing ST. In December, we announced our new
strategic plan targeting leadership in two product segments: Sense &
Power and Automotive Products and Embedded Processing Solutions. This
new strategy includes a sharper focus on five growth drivers: MEMS
and sensors, Smart Power, automotive products, microcontrollers, and
application processors including d
igital consumer products.
Importantly, from a financial model perspective, we are targeting an
operating margin of 10% or more. A key component to achieving this
objective is bringing our net operating expenses to an average
quarterly rate in the range of $600 million to $650 million by the
beginning of 2014. 
"In connection with our strategic plan, we decided to exit
ST-Ericsson after a transition period and our actions this past
quarter, including the further impairment charge, are aligned with
moving this decision forward." 
-----
 (*) ST net financial position
is a non-U.S. GAAP measure. Please refer to Attachment A for
additional information explaining why the Company believes this
measure is important and for reconciliation to U.S. GAAP. 
Summary Financial Highlights 


 
                                                                            
----------------------------------------------------------------------------
U.S. GAAP                                                                   
(In Million US$)                                   Q4 2012  Q3 2012  Q4 2011
----------------------------------------------------------------------------
Net Revenues (a)                                    2,162    2,166    2,191 
----------------------------------------------------------------------------
Gross Margin                                        32.3%    34.8%    33.4% 
----------------------------------------------------------------------------
Operating Income (Loss), as reported                (730)    (792)    (132) 
----------------------------------------------------------------------------
Net Income (Loss) attributable to parent company    (428)    (478)    (11)  
----------------------------------------------------------------------------

 
(a) Net revenues include sales recorded by ST-Ericsson as consolidated
by ST 


 
                                                                            
----------------------------------------------------------------------------
Non-U.S. GAAP*                                                              
Before impairment, restructuring and one-time                               
 items                                                                      
(In Million US$)                                   Q4 2012  Q3 2012  Q4 2011
----------------------------------------------------------------------------
Operating Income (Loss)                             (142)    (79)     (123) 
----------------------------------------------------------------------------
Operating Margin                                   (6.5%)   (3.6%)   (5.6%) 
----------------------------------------------------------------------------
Operating Margin - attributable to ST              (3.3%)    0.3%    (0.2%) 
----------------------------------------------------------------------------

 
Fourth Quarter Review
 In the fourth quarter, ST's wholly-owned
businesses' revenue increased 0.2% and 1.6% on a sequential and
year-ago basis, respectively. Wireless product-segment revenues
decreased by 2.2% sequentially, and included revenue from IP
licensing of $43 million compared to $35 million in the prior
quarter. The Japan & Korea and Greater China & South Asia regions
grew sequentially 16% and 1%, respectively, while the Americas and
EMEA decreased 0.4% and 13%, respectively. 
Fourth quarter gross margin decreased 250 basis points sequentially
to 32.3% mainly due to negative price effect, lower volumes that were
associated with the planned reduction in inventory that resulted in
the underloading of ST's wafer fabs partially offset by favorable
product mix; as a result of the inventory reduction unsaturation
charges in the fourth quarter of 2012 were $66 million compared to
$19 million and $99 million in the prior and year-ago quarters,
respectively. 
Combined SG&A and R&D expenses increased 3% to $876 million compared
to $852 million in the prior quarter mainly due to unfavorable
seasonal effects. Combined operating expenses as a percentage of
sales were 40.5% in the 2012 fourth quarter compared to 39.3% in the
prior quarter. 
Restructuring and impairment charges for the fourth and third
quarters were $588 million and $713 million, respectively,
principally reflecting non-cash impairment charges on Wireless
goodwill and other intangible assets bringing the investment value of
ST-Ericsson on our books to a negligible amount. 
Operating margin before impairment, restructuring and one-time items
attributable to ST decreased to negative 3.3% in the 2012 fourth
quarter compared to positive 0.3% in the prior quarter.*  
Income tax expense in the fourth quarter was $39 million mainly due
to the write-off of ST-Ericsson deferred tax assets following ST's
decision to exit from the joint venture after a transition period.  
In the fourth quarter of 2012, net loss attributable to
non-controlling interests was $361 million, which mainly included the
50% owned by Ericsson in the ST-Ericsson joint venture, as
consolidated by ST. In the third quarter of 2012, the corresponding
amount was $351 mill
ion. 
-----
 (*)Operating income (loss) before
impairment, restructuring and one-time items, operating margin before
impairment, restructuring and one-time items, operating margin before
impairment, restructuring and one-time items attributable to ST and
adjusted net earnings per share are non-U.S. GAAP measures. For
additional information and reconciliation to U.S. GAAP, please refer
to Attachment A. 
Fourth quarter net loss attributable to parent company was $428
million or $(0.48) per share, compared to a net loss of $(0.54) and
$(0.01) per share in the prior and year-ago quarters, respectively.
On an adjusted basis, net of related taxes, ST reported a non-U.S.
GAAP net loss per share of $(0.11), excluding impairment,
restructuring charges and one-time items in the fourth quarter,
compared to a net loss of $(0.03) and $(0.01) per share in the prior
and year-ago quarters, respectively.*  
For the fourth quarter of 2012, the effective average exchange rate
for the Company was approximately $1.30 to EUR 1.00, compared to
$1.29 to EUR 1.00 for the third quarter of 2012, and $1.36 to EUR
1.00 for the fourth quarter of 2011. 
Net Revenues by Market Channel 


 
                                                                            
----------------------------------------------------------------------------
Net Revenues By Market Channel (In %)              Q4 2012  Q3 2012  Q4 2011
----------------------------------------------------------------------------
Total OEM                                            77%      76%      80%  
----------------------------------------------------------------------------
Distribution                                         23%      24%      20%  
----------------------------------------------------------------------------

 
Revenues and Operating Results by ST Product Segment 


 
                                                                            
----------------------------------------------------------------------------
                              Q4 2012            Q3 2012            Q4 2011 
                     Q4 2012 Operating  Q3 2012 Operating  Q4 2011 Operating
 Operating Segment     Net     Income     Net     Income     Net     Income 
  (In Million US$)  Revenues   (Loss)  Revenues   (Loss)  Revenues   (Loss) 
----------------------------------------------------------------------------
Automotive (APG)       368       20       391       34       383       41   
----------------------------------------------------------------------------
Analog, MEMS &                                                              
 Microcontrollers                                                           
 (AMM)                 864      120       804      101       747      116   
----------------------------------------------------------------------------
Digital                320      (51)      325      (30)      388       9    
----------------------------------------------------------------------------
Power Discrete                                                              
 (PDP)                 245       3        275       18       253       16   
----------------------------------------------------------------------------
Wireless (a)           351     (168)      359     (184)      409     (211)  
----------------------------------------------------------------------------
Others (b)(c)          14      (654)      12      (731)      11      (103)  
----------------------------------------------------------------------------
TOTAL                 2,162    (730)     2,166    (792)     2,191    (132)  
----------------------------------------------------------------------------

 
(a) Wireless includes the portion of sales and operating results of
ST-Ericsson as consolidated in the Company's revenues and operating
results, as well as other items affecting operating results related
to the wireless business. 
 (b) Net revenues of "Others" includes
revenues from sales of Subsystems, assembly services and other
revenues.
 (c) Operating income (loss) of "Others" includes items such
as unused capacity charges, impairment, restructuring charges and
other related closure costs, phase out and start-up costs and other
unallocated expenses such as: strategic or special research and
development programs, certain corporate-level operating expenses,
patent claims and litigations, and other costs that are not allocated
to product groups, as well as operating earnings of the Subsystems
and Other Products Group. "Others" includes $66 million, $19 million
and $99 million of unused capacity charges in the fourth and third
quarters of 2012 and fourth quarter of 2011, respectively; and $588
million, $713 million and $9 million of impairment, restructuring
charges and other related closure costs in the fourth and third
quarters of 2012 and fourth quarter of 2011, respectively. 
Automotive (APG) fourth quarter net revenues decreased 6.0%
sequentially, mainly driven by difficult market conditions. APG
fourth quarter operating margin was 5.6%, compared to 8.6% in the
prior quarter due to lower revenues. 
Analog, MEMS and Microcontrollers (AMM) fourth quarter net revenues
increased 7.4% sequentially driven by MEMS, secure microcontrollers
and analog applications. AMM operating margin increased to 13.9% in
the 2012 fourth quarter, compared to 12.6% in the prior quarter
mainly due to higher volumes of motion MEMS. 
-----
 (*)Operating
income (loss) before impairment, restructuring and one-time items,
operating margin before impairment, restructuring and one-time items,
operating margin before impairment, restructuring and one-time items
attributable to ST and adjusted net earnings per share are non-U.S.
GAAP measures. For additional information and reconciliation to U.S.
GAAP, please refer to Attachment A. 
Digital fourth quarter net revenues decreased 1.7% sequentially
principally due to weak demand for digital consumer products. Digital
operating margin was negative 15.8% in the 2012 fourth quarter mainly
due to manufacturing efficiencies related to a sharp decrease in
loadings, compared to negative 9.0% in the prior quarter.  
Power Discrete (PDP) fourth quarter net revenues decreased 11.0%
sequentially due to weak market demand. PDP operating margin
decreased to 1.1% in the 2012 fourth quarter compared to 6.4% in the
prior quarter due to lower revenues. 
Wireless net revenues in the fourth quarter decreased 2.2%, compared
to the prior quarter. Revenue results reflected ST-Ericsson's
continued ramp of NovaThor platforms as well as $43 million from IP
licensing, which was more than offset by the decrease in legacy
products sales. Wireless operating loss, excluding ST-Ericsson
impairment and restructuring charges, was $168 million in the fourth
quarter, compared to a loss of $184 million in the prior quarter. For
additional information, see ST-Ericsson's Q4 2012 earnings results
press release at www.st.com and at www.stericsson.com 
Cash Flow and Balance Sheet Highlights 
The Company significantly reduced capital expenditures, net of
proceeds from sales, in 2012, at $476 million compared to $1.26
billion in 2011. During the fourth quarter capital expenditures n
et
of proceeds from sales were $78 million in line with the year-ago
period and, as expected, significantly below the prior quarter.  
Managing inventory levels during 2012 was a key priority with
inventory at December 31, 2012, of $1.35 billion, compared to $1.53
billion at December 31, 2011. Inventory in the fourth quarter of 2012
was at 4.3 turns or 84 days, compared to the year-ago period of 3.8
turns or 95 days. 
During 2012, dividends paid to stockholders totaled $355 million,
including the fourth quarter dividend of $89 million.  
For the full year, free cash flow* was slightly positive. Reversing
two quarters of negative cash flow and despite significant cash still
used at ST-Ericsson, free cash flow in the fourth quarter was $145
million compared to negative $80 million in the prior quarter and
positive $47 million in the year-ago period. 
ST continued to maintain a solid attributable net financial position*
with a net cash position of $1.19 billion at December 31, 2012,
compared to $1.17 billion, adjusted to balance out the 50% of
ST-Ericsson's debt, at December 31, 2011. ST's cash and cash
equivalents, marketable securities, short-term deposits and
restricted cash equaled $2.49 billion and total debt was $1.30
billion. During the fourth quarter, ST and Ericsson waived their loan
to ST-Ericsson for an amount of $1,546 million. As a consequence, the
Ericsson portion of $773 million was recorded as a contribution from
noncontrolling interest and reduced ST's consolidated debt. 
Total equity, including non-controlling interest, was $6.36 billion
at year end.  
----------
 (*)Free cash flow and net financial
position are non-U.S. GAAP measures. For additional information and
reconciliation to U.S. GAAP, please refer to Attachment A. 
2012 Full Year Results 
Net revenues for 2012 decreased 12.8% to $8.49 billion mainly due to
lower unit volumes which were driven by a significant drop in sales
at our former largest customer and weaker market conditions.  
Gross profit and gross margin decreased 22% to $2.78 billion and 390
basis points to 32.8% respectively. The principal components of the
gross margin decrease were negative price effect and unused capacity
charges of $172 million compared to $149 million in 2011, as well as
a one-time $53 million charge to ST's cost of sales due to an
arbitration award recorded in the first quarter 2012, partially
offset by positive currency effects. 
ST's income taxes for the full year 2012 in part reflected the
write-off of ST-Ericsson deferred tax assets in the fourth quarter.
Excluding the ST-Ericsson impact and certain discrete items, ST's
annual effective tax rate in 2012 would have been about 16%. 
Net loss as reported was $1.16 billion in 2012, or $(1.31) per share.
On an adjusted basis, net of related taxes, ST reported a non-U.S.
GAAP net loss per share of $(0.33) excluding impairment,
restructuring charges and one-time items. In 2011, net income was
$650 million, or $0.72 diluted earnings per share, and on an adjusted
basis was $0.41 non-GAAP diluted earnings per share.* 
The effective average exchange rate for the Company was approximately
$1.31 to EUR 1.00 for 2012, compared to $1.37 to EUR 1.00 for 2011. 
Full Year Revenue and Operating Results by ST Product Segment 


 
                                                                            
----------------------------------------------------------------------------
                                                 FY 2012            FY 2011 
                                        FY 2012 Operating  FY 2011 Operating
                                          Net     Income     Net     Income 
  Operating Segment (In Million US$)   Revenues   (Loss)  Revenues   (Loss) 
----------------------------------------------------------------------------
Automotive (APG)                         1,554     129      1,678     227   
----------------------------------------------------------------------------
Analog, MEMS & Microcontrollers(AMM)     3,200     418      3,377     606   
----------------------------------------------------------------------------
Digital                                  1,334    (154)     1,839     108   
----------------------------------------------------------------------------
Power Discrete (PDP)                     1,015      18      1,240     139   
----------------------------------------------------------------------------
Wireless                                 1,345    (885)     1,552    (812)  
----------------------------------------------------------------------------
Others                                    45     (1,607)     49      (222)  
----------------------------------------------------------------------------
TOTAL                                    8,493   (2,081)    9,735      46   
----------------------------------------------------------------------------

 
First Quarter 2013 Business Outlook  
Mr. Bozotti stated, "In the first quarter, we expect our wholly-owned
businesses to deliver a better than seasonal revenue performance,
with a sequential decrease of about 3% at the midpoint, despite weak
macro-economic conditions. Including Wireless, we expect an overall
revenue decrease of about 7% at the midpoint of our guidance as
ST-Ericsson anticipates a very significant sequential decrease in net
sales.  
-----
 (*) Adjusted net earnings per share are a non-U.S.
GAAP measure. For additional information and reconciliation to U.S.
GAAP, please refer to Attachment A. 
"More broadly, semiconductor market conditions are expected to
improve in 2013, driven by a more favorable economic environment.
Even today, there are initial signs of a mild recovery. At ST, we
expect to outperform the market with our Sense & Power and Automotive
Products and Embedded Processing Solutions segments. In particular,
we expect imaging, microcontrollers, analog and MEMS to be the
highest contributors to our revenue performance. 
"With respect to ST-Ericsson, we are finalizing our decision
regarding available strategic options. While we do not underestimate
the challenges related to the transition, we are committed to ensure
a smooth and timely exit.  
"Overall, ST will be a much stronger Company with a re-sized cost
base, sharpened product focus and stronger market position." 
The Company expects first quarter 2013 revenues to decrease
sequentially in the range of about -7%, plus or minus 3.5 percentage
points. Reflecting lower unsaturation charges but no revenues from
licensing compared to the fourth quarter, gross margin in the first
quarter is expected to be about 31.4%, plus or minus 2.0 percentage
points. 
ST, following its announcement to exit ST-Ericsson after a transition
period that is expected to end during the third quarter of 2013, is
finalizing its decision regarding available strategic options. Our
current best estimate is that ST could have funding requirements,
including the ongoing operations of ST-Ericsson during the transition
period and restructuring costs, in the range of approximately $300
million to $500 million during 2013, taking into account the impact
of the strategic options. 
This outlook is based on an assumed effective currency exchange rate
of approximately $1.31 = EUR 1.00 for the 2013 first quarter and
includes the impact of existing hedging contracts. The first quarter
will close on March 30, 2013. 
Recent Corporate Developments  


 
--  On December 10, ST announced its new strategic plan, vision and
    financial model. The outcome of a strategic review started more than a
    year ago as the company saw major changes in the dynamics of the
    wireless market. The plan is aimed at making the new ST more focused,
    leaner and better positioned to deliver value to customers and
    shareholders. The plan emphasizes two product-segment organizations
    that together address a growing $140 billion market shared roughly
    equally: Sense & Powe
r and Automotive Products and Embedded
    Processing Solutions.

  
The Sense & Power and Automotive Products Sector builds on ST's leading
positions in MEMS and sensors, power discrete and advanced analog
products, as well as automotive powertrain, safety, body and
infotainment products. The Embedded Processing Solutions Sector
focuses on the core of the electronics systems rather than on
wireless broadband access and includes microcontrollers, imaging
products, digital consumer products, application processors and
digital ASICs. 
As part of the new plan, ST said it would exit its investment in
ST-Ericsson after a transition period. ST emphasized that it would
continue to pursue significant growth opportunities in wireless
through its leading product portfolio and would continue to support
ST-Ericsson as its supply-chain partner, advanced process-technology
partner (FD-SOI) and application-processor IP provider.  
In the announcement, ST also revealed its new financial model, in
which the company is targeting an operating margin of 10 percent or
more. In order to achieve the new financial model, ST is targeting a
reduction in quarterly net operating expenses to an average quarterly
rate in the range of $600 million to $650 million by the beginning of
2014. 


 
--  On December 11, ST announced its progress in making available its 28nm
    FD-SOI Technology Platform from its Crolles (France) 300mm
    manufacturing facility. The silicon-verified process technology has
    now proven that it can deliver 30% higher speed at the same power and
    up to 50% greater power efficiency at the same performance as bulk
    processes at comparable cost. Ready for pre-production, this step
    confirms ST's ability to provide its planar fully-depleted technology
    from the 28nm technology node, essential to meeting the industry's
    highest performance and lowest power demands.

  
Q4 2012 - Product and Technology Highlights  
During the quarter, ST made strong progress with important
new-product introductions and significant design wins. 
Automotive 


 
--  Confirmed its leadership position in car-door electronics with an
    exclusive-supplier contract for a new generation of door-zone modules
    at a major equipment manufacturer.
--  Became a long-term supplier of audio amplifiers in car infotainment
    systems for the world's largest automotive players.
--  Awarded a design win in the next-generation braking platform at a
    leading automotive equipment maker.
--  Secured design wins for a multi-standard digital-radio chipset with
    several large car-manufacturing groups.
--  Collected multiple design wins in China for 32-bit automotive
    microcontrollers that manage transmission control, vehicle
    diagnostics, and steering systems in the car.

  
Digital Sector 
Digital Convergence 


 
--  Earned multiple design wins for broadcast set-top box chips at leading
    Chinese set-top box makers Jiuzhou and Inspur.
--  Collected a design win for the world's most powerful set-top box
    system-on-chip (Orly) in an IPTV set-top box platform at a major Asian
    equipment producer.
--  Saw increased traction for high-resolution multimedia-monitor
    controllers in premium monitors and public displays: ST's innovative
    systems-on-chip power, among others, LG's new 29-inch cinema display
    and 27-inch ultra-high-resolution monitor, and a public display from
    Samsung.
--  Earned multiple design wins for high-speed media-routing devices for
    docking stations and dongles at several top PC OEMs.
--  Earned an important design win for a 32nm digital ASIC for
    software-defined networks from a global networking giant.

  
Imaging, Bi-CMOS, ASIC and Silicon Photonics 


 
--  Provided cutting-edge image-sensing technology for a new optical
    navigation device at a leading consumer and PC peripherals maker.
--  Ramped volume production of innovative high-performance image sensors
    for mobile applications, using ST's proprietary backside-illumination
    (BSI) technology.

  
Analog, MEMS and Microcontrollers  


 
--  Announced that ST and PNI sensors are selected for Nintendo's Wii
    U(TM).
    
    
--  Ramped production of extreme high-accuracy analog chips to monitor the
    battery state in a range of smartphones from a worldwide leader.
--  Volume shipments to 1st-tier Chinese manufacturers contributed to a
    rebound in market share for Sound-Terminal audio devices for
    flat-panel TV.
--  Started production of Motion MEMS and iNEMO-Engine Sensor Fusion
    Software for Windows 8(TM) based tablets and smartphones.
--  Collected numerous design wins for the low-power SPIRIT1 radio
    transceivers that transmit sensor data in industrial applications.
--  Shipped 60 million MEMS microphones by the end of 2012 across a broad
    range of applications, including mobile phones, tablets and laptops.
--  Earned a design win for a pressure sensor with a major phone
    manufacturer.
--  Awarded a design win for high-efficiency switching regulators in car
    infotainment systems from a major European manufacturer.
--  Collected multiple wins for electronic fuses in hard-disk drives,
    set-top boxes and DVD players from major Asian OEMs.
--  ST's smart-power (BCD8) device selected by a major Japanese
    manufacturer for the next-generation 5mm and 7mm hard-disk drive
    platforms.
--  Built further STM32 momentum with an important design win for the
    STM32F4 at a major Chinese telecom-infrastructure OEM. The STM32
    design-win run rate has seen a steady increase with the new product
    series introduced in 2012.
--  Won the main controller slot for the STM8 low-power microcontroller
    from a leading Japanese entertainment device manufacturer.
--  Collected multiple design wins for a dual-interface secure
    microcontroller in the new EMV(R) (Europay/MasterCard/Visa)
    migration program in China.
--  Awarded a design win from a key European industrial OEM for the
    dual-interface wireless memory in an energy-management application.

  
Power Discretes 


 
--  Collected multiple wins for MOSFET devices in power supplies and
    adapters for leading PC makers.
--  Increased share of IGBT devices at large automotive customers in EMEA
    and Japan for electronic ignition, air conditioning, and High
    Intensity Discharge lamps.
--  Collected multiple design wins for dedicated rectifiers and protection
    devices in various automotive applications at leading Asian OEMs.
--  Won new sockets for Integrated Passive & Active Devices (IPAD) at
    major Chinese smartphone makers.
--  Secured multiple wins for power diodes in high-power industrial
    welding equipment and TV adapters.

  
ST-Ericsson  


 
--  Samples of ST-Ericsson's first FD-SOI product, manufactured by ST,
    became available in December and the NovaThor L8580 ModAp platform was
    announced on January 7, 2013.
--  Samsung GALAXY S III mini is powered by an ST-Ericsson NovaThor ModAp,
    making it the fourth Samsung smartphone using the NovaThor platform.
--  With the new NovaThor L8580 ModAp ST-Ericsson introduced eQuad
    technology. eQuad is a CPU architecture in which each processor core
    can operate as an industry-leading high performance core or a very
    low-power core for less computing-intensive tasks running at 0.6 V.
--  ST-Ericsson tested and demonstrated its VoLTE (Voice over LTE)
    technology with key operators during the quarter.
--  ST-Ericsson announced that it is ready to support Jolla's Sailfish OS
    in its NovaThor platforms.

  
iNEMO, IPAD, Orly, Sound Terminal, STM8 and STM32 are trademarks of
STMicroelectronics. NovaThor is a trademark of ST-Ericsson. All other
trademarks are the property of their respective owners. 
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,
restructuring and one-time items, operating margin before impairment,
restructuring and one-time items, operating margin before impairment,
restructuring and one-time items attributable to ST, adjusted net
earnings, adjusted net earnings per share, free cash flow, net
financial position and net financial position, adjusted to account
for 50% investment in ST-Ericsson. 
Readers are cautioned that these measures are unaudited and not
prepared in accordance with U.S. GAAP and should not be considered as
a substitute for U.S. GAAP financial measures. In addition, such
non-U.S. GAAP financial measures may not be comparable to similarly
titled information by other companies. 
See Attachment A of this press release for a reconciliation of the
Company's non-U.S. GAAP financial measures to their corresponding
U.S. GAAP financial measures. To compensate for these limitations,
the supplemental non-U.S. GAAP financial information should not be
read in isolation, but only in conjunction with the Company's
consolidated financial statements prepared in accordance with U.S.
GAAP. 
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: 


 
--  future risks to our core business as well as our ability to accurately
    estimate our share of costs and the required cash resources which
    ensue from our decision to exit ST-Ericsson;
--  our ability to competitively address market demand for the products
    which we design manufacture and sell;
--  changes in the market for our products, including the actual demand
    for products where we have achieved design wins and/or demand for
    applications where we are targeting growth, which is also dependent on
    our customers' ability to successfully compete in the application
    markets they serve with our products;
--  our ability in periods of reduced market demand or visibility, to
    reduce our expenses as required, as well as our ability to operate our
    manufacturing facilities at sufficient levels with existing process
    technologies to cover our fixed operating costs;
--  our ability, in an intensively competitive environment, to identify
    and allocate necessary design resources to successfully develop and
    secure customer acceptance for new products meeting their
    expectations;
--  our ability to achieve our pricing expectations for high-volume
    supplies of new products in whose development we have been, or are
    currently, investing;
--  the financial impact of obsolete or excess inventories if actual
    demand differs from our expectations;
--  our ability to maintain or improve our competitiveness especially in
    light of volatility in the foreign exchange markets and, more
    particularly, in the U.S. dollar exchange rate as compared to the Euro
    and the other major currencies we use for our operations;
--  the impact of intellectual property ("IP") claims by our competitors
    or other third parties, and our ability to obtain required licenses on
    reasonable terms and conditions;
--  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;
--  natural events such as severe weather, earthquakes, tsunami, volcano
    eruptions or other acts of nature, health risks and epidemics in
    locations where we, our customers or our suppliers operate;
--  changes in economic, social, political or infrastructure conditions in
    the locations where we, our customers or our suppliers operate
    including as a result of macro-economic or regional events, military
    conflict, social unrest or terrorist activities;
--  availability and costs of raw materials, utilities, third-party
    manufacturing services, or other supplies required by our operations;
--  the outcome of ongoing litigation as well as any new litigation to
    which we may become a defendant;
--  product warranty or liability claims based on epidemic, security or
    delivery failures or recalls by our customers for a product containing
    one of our parts or claims arising out of breaches of our information
    technology systems.

  
Such forward-looking statements are subject to various risks and
uncertainties, which may cause actual results and performance of our
business to differ materially and adversely from the forward-looking
statements. Certain forward-looking statements can be identified by
the use of forward looking terminology, such as "believes,"
"expects," "may," "are expected to," "should," "would be," "seeks" or
"anticipates" or similar expressions or the negative thereof or other
variations thereof or comparable terminology, or by discussions of
strategy, plans or intentions.  
Some of these risk factors are set forth and are discussed in more
detail in "Item 3. Key Information - Risk Factors" included in our
Annual Report on Form 20-F for the year ended December 31, 2011, as
filed with the SEC on March 5, 2012. Should one or more of these
risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those
described in this release as anticipated, believed or expected. We do
not intend, and do not assume any obligation, to update any industry
information or forward-looking statements set forth in this release
to reflect subsequent events or circumstances. 
STMicroelectronics Conference Call and Webcast Information  
On January 31, 2013, the management of STMicroelectronics will host
an earnings presentation in Paris and will also conduct a conference
call to discuss performance for the fourth quarter and full year of
2012. 
The earnings presentation will be held at 5:00 a.m. U.S. Eastern Time
/ 11:00 a.m. CET and the conference call at 9:00 a.m. U.S. Eastern
Time / 3:00 p.m. CET. Both the earnings presentation and conference
call will be available live via the Internet by accessing
http://investors.st.com. Those accessing the webcast should go to the
Web site at least 15 minutes prior to the call, in order to register,
download and install any necessary audio software. 
About STMicroelectronics 
ST is a global leader in the semiconductor market serving customers
across the spectrum of sense and power and automotive products and
embedded processing solutions. From energy management and savings to
trust and data security, from healthcare and wellness to smart
consumer devices, in the home, car and office, at work and at play,
ST is found everywhere microelectronics make a positive and
innovative contribution to people's life. By getting more from
technology to get more from life, ST stands for life.augmented.  
Further information on ST can be found at www.st.com 
(tables attached) 
(Attachment A)
STMicroelectronics 
Supplemental Non-U.S. GAAP Financial Information 
U. S. GAAP - Non-U.S. GAAP Reconciliation
 In Million US$ Except Per
Share Data 
The supplemental non-U.S. GAAP information presented in this press
release is unaudited and subject to inherent limitations. Such
non-U.S. GAAP information is not based on any comprehensive set of
accounting rules or principles and should not be considered as a
substitute for U.S. GAAP measurements. Also, our supplementa
l
non-U.S. GAAP financial information may not be comparable to
similarly titled non-U.S. GAAP measures used by other companies.
Further, specific limitations for individual non-U.S. GAAP measures,
and the reasons for presenting non-U.S. GAAP financial information,
are set forth in the paragraphs below. To compensate for these
limitations, the supplemental non-U.S. GAAP financial information
should not be read in isolation, but only in conjunction with our
consolidated financial statements prepared in accordance with U.S.
GAAP. 
Operating income (loss) before, impairment, restructuring and
one-time items is used by management to help enhance an understanding
of ongoing operations and to communicate the impact of the excluded
items, such as impairment, restructuring charges and other related
closure costs. Adjusted net earnings and earnings per share (EPS) are
used by management to help enhance an understanding of ongoing
operations and to communicate the impact of the excluded items like
impairment, restructuring charges and other related closure costs
attributable to ST, and other one-time items net of the relevant tax
impact. 
Operating income (loss) before impairment, restructuring and one-time
items attributable to ST is calculated as operating income (loss)
before impairment, restructuring and one-time items excluding 50% of
ST-Ericsson operating income (loss) before impairment, restructuring
and one-time items as consolidated by ST. Operating margin before
impairment, restructuring and one-time items attributable to ST is
calculated as operating income (loss) before restructuring
attributable to ST divided by reported revenues excluding 50% of
ST-Ericsson revenues as consolidated by ST.  
The Company believes that these non-GAAP financial measures provide
useful information for investors and management because they measure
the Company's capacity to generate profits from its business
operations, excluding the effect of acquisitions and expenses related
to the rationalizing of its activities and sites that it does not
consider to be part of its on-going operating results, thereby
offering, when read in conjunction with the Company's GAAP
financials, (i) the ability to make more meaningful period-to-period
comparisons of the Company's on-going operating results, (ii) the
ability to better identify trends in the Company's business and
perform related trend analysis, and (iii) an easier way to compare
the Company's results of operations against investor and analyst
financial models and valuations, which usually exclude these items. 


 
                                                                            
----------------------------------------------------------------------------
Q4 2012                                    Operating                        
(US$ millions and cents per        Gross     Income     Net    Corresponding
 share)                            Profit    (loss)   Earnings      EPS     
----------------------------------------------------------------------------
U.S. GAAP                           697      (730)     (428)       (0.48)   
----------------------------------------------------------------------------
Impairment & Restructuring                    588       307                 
--------------------------------------------------------------              
Estimated Income Tax Effect                             (1)                 
----------------------------------------------------------------------------
Income Tax at ST Ericsson                                26                 
----------------------------------------------------------------------------
Non-U.S GAAP                        697      (142)      (96)       (0.11)   
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
Q3 2012                                    Operating                        
(US$ millions and cents per        Gross     Income     Net    Corresponding
 share)                            Profit    (loss)   Earnings      EPS     
----------------------------------------------------------------------------
U.S. GAAP                           753      (792)     (478)       (0.54)   
----------------------------------------------------------------------------
Impairment & Restructuring                    713       456                 
--------------------------------------------------------------              
Estimated Income Tax Effect                             (7)                 
----------------------------------------------------------------------------
Non-U.S GAAP                        753       (79)      (29)       (0.03)   
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
Q4 2011                                    Operating                        
(US$ millions and cents per        Gross     Income     Net    Corresponding
 share)                            Profit    (loss)   Earnings      EPS     
----------------------------------------------------------------------------
U.S. GAAP                           732      (132)      (11)       (0.01)   
----------------------------------------------------------------------------
Impairment & Restructuring                     9         5                  
--------------------------------------------------------------              
Estimated Income Tax Effect                             (2)                 
----------------------------------------------------------------------------
Non-U.S GAAP                        732      (123)      (8)        (0.01)   
----------------------------------------------------------------------------

 
(continued) 
(Attachment A - continued)  
Net financial position: resources (debt), represents the balance
between our total financial resources and our total financial debt.
Our total financial resources include cash and cash equivalents,
marketable securities, short-term deposits and restricted cash, and
our total financial debt includes short-term borrowings, current
portion of long-term debt and long-term debt, all as reported in our
consolidated balance sheet. We believe our net financial position
provides useful information for investors because it gives evidence
of our global position either in terms of net indebtedness or net
cash position by measuring our capital resources based on cash, cash
equivalents and marketable securities and the total level of our
financial indebtedness. Net financial position is not a U.S. GAAP
measure. 


 
                                                                            
----------------------------------------------------------------------------
Net Financial Position (in US$      December 31, September 29,  December 31,
 millions)                              2012          2012          2011    
----------------------------------------------------------------------------
Cash and cash equivalents              2,250         1,686         1,912    
----------------------------------------------------------------------------
Marketable securities                   238           237           413     
----------------------------------------------------------------------------
Short-term deposits                      1             -             -      
----------------------------------------------------------------------------
Restricted cash                          -             -             3      
----------------------------------------------------------------------------
 
Non-current restricted cash              4             4             5      
----------------------------------------------------------------------------
Total financial resources              2,493         1,927         2,333    
----------------------------------------------------------------------------
Short-term borrowings and current                                           
 portion of long-term debt             (630)        (1,260)        (740)    
----------------------------------------------------------------------------
Long-term debt                         (671)         (298)         (826)    
----------------------------------------------------------------------------
Total financial debt                  (1,301)       (1,558)       (1,566)   
----------------------------------------------------------------------------
Net financial position                 1,192          369           767     
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Net financial position, adjusted                                            
 to account for 50% investment in                                           
 ST-Ericsson                           1,192         1,064         1,167    
----------------------------------------------------------------------------

 
Free cash flow is defined as net cash from operating activities minus
net cash used in investing activities, excluding payment for
purchases of and proceeds from the sale of marketable securities,
short-term deposits and restricted cash. We believe free cash flow
provides useful information for investors and management because it
measures our capacity to generate cash from our operating and
investing activities to sustain our operating activities. Free cash
flow is not a U.S. GAAP measure and does not represent total cash
flow since it does not include the cash flows generated by or used in
financing activities. In addition, our definition of free cash flow
may differ from definitions used by other companies.  


 
                                                                            
----------------------------------------------------------------------------
Free cash flow (in US$ millions)              Q4 2012    Q3 2012    Q4 2011 
----------------------------------------------------------------------------
Net cash from (used in) operating                                           
 activities                                     252        148        137   
----------------------------------------------------------------------------
Net cash from (used in) investing                                           
 activities                                    (107)      (203)       43    
----------------------------------------------------------------------------
Payment for purchases of (proceeds from                                     
 sale of) marketable securities, short-term                                 
 deposits and restricted cash, net               -        (25)       (133)  
----------------------------------------------------------------------------
Free cash flow                                  145       (80)        47    
----------------------------------------------------------------------------

 
--end--- 


 
                                                                            
STMicroelectronics N.V.                                                     
Consolidated Statements of Income                                           
(in millions of U.S. dollars, except per share                              
 data ($))                                                                  
                                                                            
                                                     Three Months Ended     
                                                 -------------------------- 
                                                  (Unaudited)   (Unaudited) 
                                                 ------------  ------------ 
                                                 December 31,  December 31, 
                                                     2012          2011     
                                                 ------------  ------------ 
                                                                            
Net sales                                               2,111         2,170 
Other revenues                                             51            21 
                                                 ------------  ------------ 
  NET REVENUES                                          2,162         2,191 
Cost of sales                                          (1,465)       (1,459)
                                                 ------------  ------------ 
  GROSS PROFIT                                            697           732 
Selling, general and administrative                      (291)         (280)
Research and development                                 (585)         (614)
Other income and expenses, net                             37            39 
Impairment, restructuring charges and other                                 
 related closure costs                                   (588)           (9)
                                                 ------------  ------------ 
  Total Operating Expenses                             (1,427)         (864)
                                                 ------------  ------------ 
  OPERATING LOSS                                         (730)         (132)
Interest expense, net                                      (9)           (5)
Income (loss) on equity-method investments                (11)           (6)
Gain on financial instruments, net                          -             3 
LOSS BEFORE INCOME TAXES AND NONCONTROLLING                                 
 INTEREST                                                (750)         (140)
Income tax expense                                        (39)          (70)
                                                 ------------  ------------ 
  NET LOSS                                               (789)         (210)
Net loss (income) attributable to noncontrolling                            
 interest                                                 361           199 
                                                 ------------  ------------ 
  NET LOSS ATTRIBUTABLE TO PARENT COMPANY                (428)          (11)
                                                 ============  ============ 
                                                                            
  EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO                                
   PARENT COMPANY STOCKHOLDERS                          (0.48)        (0.01)
  EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO                              
   PARENT COMPANY STOCKHOLDERS                          (0.48)        (0.01)
                                                                            
  NUMBER OF WEIGHTED AVERAGE SHARES USED IN                                 
   CALCULATING DILUTED EARNINGS PER SHARE               887.9         885.0 
                                                 ------------  ------------ 
                                                                            
                                                                            
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, 
                                                     2012          2011     
                                                 ------------  ------------ 
                                                                            
Net sales                                               8,380         9,630 
Other revenues                                            113           105 
                                                 ------------  ------------ 
  NET REVENUES                                          8,493         9,735 
Cost of sales                                          (5,710)       (6,161)
                                                 ------------  ------------ 
  GROSS PROFIT                                          2,783         3,574 
Selling, general and administrative                    (1,166)       (1,210)
Research and development                               (2,413)       (2,352)
Other income and expenses, net                             91           109 
Impairment, restructuring charges and other                                 
 related closure costs                                 (1,376)          (75)
                                                 ------------  ------------ 
  Total Operating Expenses                             (4,864)       (3,528)
                                                 ------------  ------------ 
  OPERATING INCOME (LOSS)                              (2,081)           46 
Other-than-temporary impairment charge and                                  
 realized gain on financial assets                          -           318 
Interest expense, net                                     (35)          (25)
Loss on equity-method investments                         (24)          (28)
Gain on financial instruments, net                          3            25 
  INCOME (LOSS) BEFORE INCOME TAXES AND                                     
   NONCONTROLLING INTEREST                             (2,137)          336 
Income tax expense                                        (51)         (181)
                                                 ------------  ------------ 
  NET INCOME (LOSS)                                    (2,188)          155 
Net loss (income) attributable to noncontrolling                            
 interest                                               1,030           495 
                                                 ------------  ------------ 
  NET INCOME (LOSS) ATTRIBUTABLE TO PARENT                                  
   COMPANY                                             (1,158)          650 
                                                 ============  ============ 
                                                                            
  EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO                                
   PARENT COMPANY STOCKHOLDERS                          (1.31)         0.74 
  EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO                              
   PARENT COMPANY STOCKHOLDERS                          (1.31)         0.72 
                                                                            
  NUMBER OF WEIGHTED AVERAGE SHARES USED IN                                 
   CALCULATING DILUTED EARNINGS PER SHARE               886.7         904.5 
                                                 ------------  ------------ 
                                                                            
                                                                            
STMicroelectronics N.V.                                                     
CONSOLIDATED BALANCE SHEETS                                                 
As at                            December 31,  September 29,   December 31, 
In millions of U.S. dollars          2012           2012           2011     
                                -------------  -------------  ------------- 
                                 (Unaudited)    (Unaudited)     (Audited)   
                                -------------  -------------  ------------- 
ASSETS                                                                      
Current assets:                                                             
Cash and cash equivalents               2,250          1,686          1,912 
Restricted cash                             -              -              3 
Short-term deposits                         1              -              - 
Marketable securities                     238            237            413 
Trade accounts receivable, net          1,005          1,040          1,046 
Inventories, net                        1,353          1,484          1,531 
Deferred tax assets                       137            155            141 
Assets held for sale                        -              -             28 
Other current assets                      518            612            506 
                                -------------  -------------  ------------- 
Total current assets                    5,502          5,214          5,580 
Goodwill                                  141            370          1,059 
Other intangible assets, net              213            554            645 
Property, plant and equipment,                                              
 net                                    3,481          3,611          3,920 
Non-current deferred tax assets           414            365            332 
Restricted cash                             4              4              5 
Long-term investments                     119            114            121 
Other non-current assets                  560            480            432 
                                -------------  -------------  ------------- 
                                        4,932          5,498          6,514 
Total assets                           10,434         10,712         12,094 
                                -------------  -------------  ------------- 
                                                                            
LIABILITIES AND EQUITY                                                      
Current liabilities:                                                        
Bank overdrafts                             -              -              7 
Short-term debt                           630          1,260            733 
Trade accounts payable                    797            864            656 
Other payables and accrued                                                  
 liabilities                              942            934            976 
Dividends payable to                                                        
 stockholders                              89            178             88 
Deferred tax liabilities                   11              1             14 
Accrued income tax                         86             84             95 
                                -------------  -------------  ------------- 
Total current liabilities               2,555          3,321          2,569 
Long-term debt                            671            298            826 
Post-retirement benefit                                                     
 obligations                              477            426            409 
Long-term deferred tax                                                      
 liabilities                               14             23             21 
Other long-term liabilities               353            315            273 
                                -------------  -------------  ------------- 
                                        1,515          1,062          1,529 
Total liabilit
ies                       4,070          4,383          4,098 
Commitment and contingencies                                                
Equity                                                                      
Parent company stockholders'                                                
 equity                                                                     
Common stock (preferred stock:                                              
 540,000,000 shares authorized,                                             
 not issued; common stock: Euro                                             
 1.04 nominal value,                                                        
 1,200,000,000 shares                                                       
 authorized, 910,559,805 shares                                             
 issued, 887,953,202 shares                                                 
 outstanding)                           1,156          1,156          1,156 
Capital surplus                         2,555          2,549          2,544 
Retained earnings                       1,959          2,388          3,504 
Accumulated other comprehensive                                             
 income                                   794            743            670 
Treasury stock                           (239)          (240)          (271)
                                -------------  -------------  ------------- 
Total parent company                                                        
 stockholders' equity                   6,225          6,596          7,603 
Noncontrolling interest                   139           (267)           393 
                                -------------  -------------  ------------- 
Total equity                            6,364          6,329          7,996 
Total liabilities and equity           10,434         10,712         12,094 
                                -------------  -------------  ------------- 
                                                                            
                                                                            
----------------------------------------------------------------------------
STMicroelectronics N.V.                                                     
                                                                            
SELECTED CASH FLOW DATA                                                     
                                                                            
----------------------------------------------------------------------------
Cash Flow Data (in US$ millions)                   Q4 2012  Q3 2012  Q4 2011
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Net Cash from operating activities                     252      148      137
----------------------------------------------------------------------------
Net Cash from (used in) investing activities         (107)    (203)       43
----------------------------------------------------------------------------
Net Cash from (used in) financing activities           406     (80)    (213)
----------------------------------------------------------------------------
Net Cash increase (decrease)                           564    (120)     (61)
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Selected Cash Flow Data (in US$ millions)          Q4 2012  Q3 2012  Q4 2011
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Depreciation & amortization                            272      266      315
----------------------------------------------------------------------------
Net payment for Capital expenditures                  (78)    (203)     (76)
----------------------------------------------------------------------------
Dividends paid to stockholders                        (89)     (89)     (89)
----------------------------------------------------------------------------
Change in inventories, net                             143       24      139
----------------------------------------------------------------------------

 
ST FY 2012 Q4: http://hugin.info/152740/R/1674373/545188.pdf  
For further information, please contact: 
INVESTOR RELATIONS:
Tait Sorensen 
Group VP, Investor Relations 
Tel: +1 602 485 2064
tait.sorensen@st.com 
MEDIA RELATIONS:
Maria Grazia Prestini 
Group VP, Corporate Media and Public Relations
STMicroelectronics
Tel: + 41 22 929 6945