STMicroelectronics Reports 2013 Second Quarter and First Half Financial Results

STMicroelectronics Reports 2013 Second Quarter and First Half Financial Results 
GENEVA -- (Marketwired) -- 07/22/13 --  STMicroelectronics (NYSE:
STM) 


 
--  Second quarter net revenues $2.05 billion, gross margin 32.8%
--  ST revenues excluding Wireless product line increased 6.8%
    sequentially, in line with expectations
--  Second quarter operating expenses excluding restructuring charges $736
    million; down from $808 million and $887 million in the sequential and
    year-ago periods, respectively
--  ST-Ericsson transaction to close in early August

  
STMicroelectronics (NYSE: STM), a global semiconductor leader serving
customers across the spectrum of electronics applications, reported
financial results for the second quarter and first half ending June
29, 2013. 
Second quarter net revenues totaled $2.05 billion and gross margin
was 32.8%. Net loss attributable to ST was $152 million. 
"In the second quarter we saw sequential progress towards our
objectives of sales growth, gross margin improvement and expense
reduction," said ST President and CEO Carlo Bozotti.  
"Sales were in line with our guidance, despite an accelerated decline
of ST-Ericsson's existing product revenues. Gross margin came in
above the midpoint of our guidance due to manufacturing efficiencies
and increased volumes. Our quarterly operating expense run rate
continues to decrease substantially both on a sequential and
year-over-year basis. 
"Our strong sequential increase in sales of 6.8%, excluding Wireless
product line, came from growth in several key product areas including
Microcontrollers, Industrial and Power, Automotive and Imaging. These
results are due to both the introduction of new products and the
changes we made last year to expand our geographic and customer
coverage, with new major accounts and distributors, with the latter
further increasing as a percentage of sales. 
"We again made solid progress towards our quarterly net operating
expenses target range as we exited the second quarter with operating
expenses excluding restructuring charges of $736 million, or $72
million and $151 million lower than the prior and year-ago quarters." 
Summary Financial Highlights 


 
                                                                           
 
----------------------------------------------------------------------------
U.S. GAAP                                                                   
(Million US$)                                        Q2 2013 Q1 2013 Q2 2012
----------------------------------------------------------------------------
Net Revenues (a)                                      2,045   2,009   2,148 
----------------------------------------------------------------------------
Gross Margin                                          32.8%   31.3%   34.3% 
----------------------------------------------------------------------------
Operating Income (Loss), as reported                  (107)   (281)   (207) 
----------------------------------------------------------------------------
Net Income (Loss) attributable to parent company (b)  (152)   (171)    (75) 
----------------------------------------------------------------------------

 
(a) Net revenues include sales recorded by ST-Ericsson as consolidated
by ST
 (b) Includes a loss on equity-method investment of $89
million, $13 million and $2 million in the second and first quarters
of 2013 and the second quarter of 2012, respectively 


 
                                                                            
----------------------------------------------------------------------------
Non-U.S. GAAP*                                                              
Before impairment, restructuring and one-time items                         
(Million US$)                                        Q2 2013 Q1 2013 Q2 2012
----------------------------------------------------------------------------
Operating Income (Loss)                                (64)   (180)   (151) 
----------------------------------------------------------------------------
Operating Margin                                      (3.1%)  (8.9%)  (7.0%)
----------------------------------------------------------------------------
Operating Margin - Attributable to ST                 (2.6%)  (5.3%)  (1.3%)
----------------------------------------------------------------------------

 
ST-Ericsson Information 
As announced on March 18, 2013, ST and Ericsson have agreed to the
transfer of certain ST-Ericsson employees and assets to the
respective parent companies and to the wind-down of the remaining
joint venture. The formal transfer of the parts of ST-Ericsson to the
parent companies is expected to be completed in early August, 2013.
As already communicated, from March 2, 2013 and until completion of
the wind-down, Ericsson is taking on the expenses of the LTE Modem
activities, and ST is taking on the existing products and related
business as well as expenses for resources working on ST programs.
Both parents are assuming equal funding of the wind-down activities.  
During the first half of 2013, ST funded $145 million under the
ST-Ericsson parent facility. Based upon its latest review, ST
estimates its total cash costs from beginning 2013 thru the end of
the JV, including covering its share of ST-Ericsson's ongoing
operations during the transition period and restructuring costs in
ST-Ericsson and ST related to the exit from the JV, at between $300
million and $350 million. This is lower than the previous estimate as
a result of the timely restructuring and the transfer of certain
teams to third-party companies.  
ST-Ericsson's net revenues in the second quarter of 2013 decreased
31% sequentially to $176 million reflecting, as anticipated, the
decline of legacy products.  
Second Quarter Review 
Net revenues increased 1.8% sequentially and decreased 4.8% on a
year-over-year basis. Greater China & South Asia led all regions with
6.0% sequential revenue growth while the Americas increased by 5.6%
and EMEA increased 5.2%. Japan & Korea was lower by 12.8% driven by
business dynamics at certain key wireless global accounts. 
ST's second quarter revenues, excluding the Wireless product line,
increased 6.8% on a sequential basis and 3.6% on a year-over-year
basis, reflecting better than normal seasonality.  
Second quarter gross profit was $672 million and gross margin was
32.8%. On a sequential basis, gross margin improved 150 basis points
reflecting lower unsaturation charges, manufacturing efficiencies and
higher volumes partially offset by price pressure.  
----- 
(*)Operating income (loss) before impairment, restructuring and
one-time items, operating margin before impairment, restructuring and
one-time items and operating margin before impairment, restructuring
and one-time items attributable to ST are non-U.S. GAAP measures.
Please refer to Attachment A for additional information explaining
why the Company believes these measures are important and
reconciliation to U.S. GAAP. 
R&D expenses were $453 million representing a sequential decrease of
$80 million or 15%, benefiting principally from the ongoing
restructuring initiatives at ST-Ericsson as well as the charge back
to Ericsson of the LTE Modem expenses of $102 million partially
offset by seasonality. R&D expenses declined by 27% compared to the
year-ago period. 
SG&A 
expenses totaled $285 million in the second quarter, and on a
sequential basis, SG&A expenses increased by 2% mainly due to
seasonality. SG&A expenses decreased 2% compared to the year-ago
period mainly due to cost-reduction initiatives. 
Impairment, restructuring and other related closure costs for the
second quarter were $43 million compared to $101 million in the prior
quarter mainly due to restructuring initiatives within the ST
organization.  
Operating margin before impairment, restructuring and one-time items
attributable to ST was a negative 2.6% in the 2013 second quarter
compared to negative 5.3% in the prior quarter.* 
In the second quarter of 2013, net loss attributable to
non-controlling interest was $21 million, which mainly included the
50% owned by Ericsson in the ST-Ericsson joint venture, as
consolidated by ST. In the first quarter of 2013, the corresponding
amount was $126 million. 
ST recorded in the second quarter a charge of $89 million on
equity-method investments largely due to a one-time non-cash charge
of $69 million on ST's equity value in 3Sun due to impairment charges
reported by the 3Sun joint venture. 3Sun is a joint initiative
between Enel Green Power, Sharp and the Company for the manufacture
of thin film photovoltaic panels in Catania, Italy. Each partner owns
a third of the common shares of the entity. 
Second quarter net loss was $152 million or $(0.17) per share,
compared to a net loss of $(0.19) and $(0.08) per share in the prior
and year-ago quarter, respectively. On an adjusted basis, net of
related taxes, ST reported non-U.S. GAAP net loss per share of
$(0.06) in the second quarter, excluding impairment and restructuring
charges and one-time items, compared to a net loss of $(0.13) and
$(0.05) per share in the prior and year-ago quarter, respectively.* 
For the second quarter of 2013, the effective average exchange rate
for the Company was approximately $1.30 to EUR 1.00 compared to $1.31
to EUR 1.00 for the first quarter of 2013 and $1.32 to EUR 1.00 for
the second quarter of 2012. 
Net Revenues by Market Channel 


 
                                                                            
----------------------------------------------------------------------------
Net Revenues By Market Channel(%)                    Q2 2013 Q1 2013 Q2 2012
----------------------------------------------------------------------------
Total OEM                                              74%     75%     78%  
----------------------------------------------------------------------------
Distribution                                           26%     25%     22%  
----------------------------------------------------------------------------

 
----- 
(*)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. 
Revenues and Operating Results by ST Product Segment 


 
                                                                            
----------------------------------------------------------------------------
 Operating Segment   Q2 2013  Q2 2013   Q1 2013  Q1 2013   Q2 2012  Q2 2012 
    Million US$)       Net   Operating    Net   Operating    Net   Operating
                    Revenues   Income  Revenues   Income  Revenues   Income 
                               (Loss)             (Loss)             (Loss) 
----------------------------------------------------------------------------
Sense & Power and                                                           
 Automotive                                                                 
 Products(SPA)        1,209      42      1,127      58      1,156      97   
----------------------------------------------------------------------------
Embedded Processing                                                         
 Solutions                                                                  
 including Wireless                                                         
 product line                                                               
 (EPS)(a)              824     (106)      867     (210)      981     (233)  
----------------------------------------------------------------------------
Others (b)(c)          12       (43)      15      (129)      11       (71)  
----------------------------------------------------------------------------
TOTAL                 2,045    (107)     2,009    (281)     2,148    (207)  
----------------------------------------------------------------------------

 
(a) Embedded Processing Solutions includes the Wireless product line
which includes a portion of sales and operating results of
ST-Ericsson as consolidated in the Company's revenues and operating
results, 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 $2 million, $24 million
and $16 million of unused capacity charges in the second and first
quarters of 2013 and second quarter of 2012, respectively; and $43
million, $101 million and $56 million of impairment, restructuring
charges and other related closure costs in the second and first
quarters of 2013 and second quarter of 2012, respectively. 
Sense & Power and Automotive Products (SPA) second quarter net
revenues increased 7.3% sequentially, mainly driven by Industrial and
Power products and Automotive. SPA revenues increased 4.6% compared
to the year-ago quarter driven by MEMS. SPA operating margin was 3.5%
in the 2013 second quarter compared to 5.1% and 8.3% in the prior and
year-ago quarter, respectively, with the decrease principally driven
by resources deployed from ST-Ericsson to strengthen R&D activities
and price pressure within the Analog, MEMS and Sensors (AMS) group.  
Embedded Processing Solutions (EPS) second quarter net revenues
decreased 5.0% and 16.0% on a sequential and year-over-year basis,
respectively, due to a significant decrease in ST-Ericsson sales and
to a lesser extent, Digital Convergence (DCG). EPS segment operating
margin improved to negative 12.8% in the 2013 second quarter, from
negative 24.2% and negative 23.7% in the prior and year-ago quarter,
respectively, mainly due to a significant reduction in expenses. 
Cash Flow and Balance Sheet Highlights 
Free cash flow* was negative $134 million in the second quarter,
principally reflecting anticipated cash resources to fund
ST-Ericsson, compared to negative $65 million in the prior quarter. 
Capital expenditure payments, net of proceeds from sales, were $121
mill
ion during the second quarter of 2013 compared to $111 million in
the prior quarter. 
Inventory increased by $30 million to $1.34 billion at quarter end.
Inventory in the second quarter of 2013 was at 4.1 turns or 88 days,
substantially flat compared to the prior quarter. 
As expected, ST's net financial position* decreased in the second
quarter to a net cash position of $954 million at June 29, 2013,
adjusted by $145 million of ST-Ericsson's debt to our joint venture
partner, compared to $1.1 billion at March 30, 2013. ST's financial
resources equaled $1.77 billion and total debt was $964 million at
June 29, 2013. 
-----
 (*)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.
 Total
equity, including non-controlling interest, was $5.68 billion at
quarter end. 
First Half 2013 Results 
Net revenues decreased 2.6% to $4.05 billion from $4.16 billion in
the year-ago period mainly reflecting lower ST-Ericsson sales. Net
revenues for the first half of 2013, excluding the Wireless product
line, increased 2.5% to $3.62 billion.  
Gross margin was 32.1% of net revenues, compared to 32.0% of net
revenues for the 2012 first half. The first half 2013 gross margin
was impacted by unsaturation charges of $26 million compared to $87
million in the year-ago period. Net loss, as reported, was $322
million in the first half of 2013, or $(0.36) per share, compared to
a net loss of $252 million, or $(0.28) per share in the first half of
2012. On an adjusted basis, net of related taxes, ST reported a
non-U.S. GAAP net loss per share of $(0.19) excluding impairment,
restructuring charges and one-time items in the first half of 2013,
the same as in the first half of 2012.* 
The effective average exchange rate for the Company was approximately
$1.30 to EUR 1.00 for the first half of 2013, compared to $1.32 to
EUR 1.00 for the first half of 2012. 
First Half Revenue and Operating Results by Product Segment 


 
                                                                            
----------------------------------------------------------------------------
          Operating Segment            First     First     First     First  
          (In Million US$)           Half 2013 Half 2013 Half 2012 Half 2012
                                        Net    Operating    Net    Operating
                                      Revenues   Income   Revenues   Income 
                                                 (Loss)              (Loss) 
----------------------------------------------------------------------------
Sense & Power and Automotive                                                
 Products (SPA)                        2,337       99      2,263      190   
----------------------------------------------------------------------------
Embedded Processing Solutions                                               
 includingWireless product line        1,692     (316)     1,882     (527)  
 (EPS)                                                                      
----------------------------------------------------------------------------
  Others                                 26      (171)       20      (222)  
----------------------------------------------------------------------------
  TOTAL                                4,055     (388)     4,165     (559)  
----------------------------------------------------------------------------

 
Third Quarter 2013 Business Outlook 
Mr. Bozotti stated, "Macro trends remain uncertain but excluding
ST-Ericsson, we have seen a progressive improvement in bookings in
the second quarter, although, towards the end of the second quarter,
we experienced a softening in the smartphone market also impacting ST
products. 
  "We continue to expect the ramp of key products in MEMS,
Automotive, Microcontrollers and Imaging in the second half of this
year, leading to higher sequential revenue results for both the third
and fourth quarters of this year. 
"In combination, we expect third quarter net revenues, excluding
Wireless product line, to increase about 3.5% at the midpoint.
Including Wireless product line, we expect overall revenues to be
about flat sequentially at the midpoint of our guidance. We again
expect significant reductions in operating expenses in the third
quarter and we are well aligned to achieve our net operating expenses
target range of $600 million to $650 million in the first quarter of
2014. Furthermore, with the closing of the ST-Ericsson transaction in
early August, the remaining ST-Ericsson activities will be
deconsolidated.  
-----
 * Adjusted net earnings per share is a
non-US GAAP measure. For additional information and reconciliation to
U.S. GAAP, please refer to Attachment A.  
"As we look ahead, we anticipate progressive improvement in our gross
margin. First, with fab utilization at a more stable and optimal
level we plan to continue to grow our business in our targeted growth
drivers. Second, we are focused on better utilizing and optimizing
our technology portfolio. Third, we are now in a position to more
aggressively manage our product mix in order to prune lower margin
products from our portfolio. To successfully achieve this, we will
make gradual structural changes to our manufacturing footprint to
ensure that it matches our needs, complemented by our foundry
sourcing. As a result, we plan to gradually expand 8-inch capacity
while winding down certain 6-inch manufacturing lines in Singapore
and Catania, Italy and consolidate our back-end activities in China
to Shenzhen." 
"Finally, to support our proprietary R&D activities for CMOS
derivative technology investments, we recently signed an important
frame agreement with the French Government for the 'Nano2017'
program." 
The Company expects third quarter 2013 revenues to be about flat on a
sequential basis, plus or minus 3.5 percentage points. Gross margin
in the third quarter is expected to be about 33.5%, plus or minus 2.0
percentage points. 
This outlook is based on an assumed effective currency exchange rate
of approximately $1.30 = EUR 1.00 for the 2013 third quarter and
includes the impact of existing hedging contracts. The third quarter
will close on September 28, 2013. 
Recent Corporate Developments 
On April 22, ST announced the appointment of Martine Verluyten as
Chair of the Audit Committee of the ST Supervisory Board, succeeding
Tom de Waard. Verluyten has been a member of the ST Supervisory Board
and has served on its Audit Committee since May 2012.  
On May 22, the Company announced that Executive Vice President
Jean-Marc Chery had been appointed General Manager of the Embedded
Processing Solutions Segment, a new position, and Vice-Chairman of
the Corporate Strategic Committee where he has been a Member since
2008. Chery continues to lead the Packaging and Test Manufacturing
and Quality functions for ST. 
On May 28, ST announced that ST-Ericsson, a 50-50 joint venture with
Ericsson that the parent Companies are winding down, had sold the
assets and intellectual property rights (IPR) associated with its
mobile connectivity Global Navigation Satellite System (GNSS) to a
leading semiconductor company. 
On June 17, ST announced that it had signed a comprehensive agreement
with Rambus Inc. expanding existing licenses between the two
Companies, settling all outstanding claims, and committing both
organizations to explore additional opportunities for collaboration.
The multifaceted agreement gives Rambus access to ST's Fully-Depleted
Silicon On Insulator (FD-SOI) process-technology design environment
while giving ST secured license terms from the Cryptography Research,
Inc. (CRI) division of Rambus that makes it possible for ST to expand
deployment of security technology for banking, identity, PayTV, video
gaming, smartphones, and government, across a wider range of
products. 
On June 21, ST a
nnounced that all the resolutions proposed by the
Supervisory Board were approved at the Company's Annual General
Meeting (AGM), which was held in Amsterdam. 
The main resolutions approved by the shareholders were: 


 
--  The adoption of the Company's 2012 Statutory Annual Accounts prepared
    in accordance with International Financial Reporting Standards (IFRS);
--  The distribution, in line with the Dividend Policy of the Company, of
    a semi-annual cash dividend per common share of US$0.10 in the second
    quarter of 2013 and US$0.10 in the third quarter of 2013, to be paid
    in June and September of 2013, respectively, to shareholders of record
    in the month of each quarterly payment;
--  The appointment of Ms. Janet Davidson as a new member of the
    Supervisory Board for a three-year term, expiring at the 2016 AGM, as
    a replacement for Mr. Raymond Bingham, whose mandate has expired;
--  The reappointment of Mr. Alessandro Ovi as member of the Supervisory
    Board for a three-year term, expiring at the 2016 AGM;
--  The amendment of the compensation scheme of the Supervisory Board;
--  The approval of a new four-year Unvested Stock Award Plan for
    Management and Key Employees.

  
On May 21, ST announced its leadership of Places2Be, a 3-year, EUR 360M
advanced-technology pilot-line project with the participation of 18
other leading European companies and academic institutions to support
the industrialization of Fully-Depleted Silicon-On-Insulator (FD-SOI)
microelectronics technology. Places2Be ("Pilot Lines for Advanced
CMOS Enhanced by SOI in 2x nodes, Built in Europe") aims to support
the deployment of an FD-SOI pilot line at 28nm and the subsequent
node, as well as a dual source that will enable volume manufacturing
in Europe. Places2Be will drive the creation of a European
microelectronics design ecosystem using this FD-SOI platform and
explore the path towards the next step for this technology (14/10nm). 
Q2 2013 - Product and Technology Highlights  
During the quarter, ST made strong progress with important
new-product introductions and significant design wins. 
Sense & Power and Automotive Products (SPA) 
Analog, MEMS and Sensors (AMS) 


 
--  Deployment of the SPIRIT1, sub-GHz RF transceiver-based application
    for remote control of street lights has begun along the river Seine in
    Paris.
--  Earned design-ins for Pulser IC in portable ultrasound imaging
    equipment.
--  Passed security certification by NDS for ST8034 smart-card interface,
    a necessary step in the expansion of ST's smart-card presence in the
    set-top box market.
--  Captured a major socket in a 1st-tier customer in the glucose-metering
    market with a dedicated op amp, reinforcing our best-in-class
    capabilities and positioning in the analog segment.
--  Collected a win for a high-end digital top-port microphone in a new
    tablet to be launched this fall.
--  Achieved milestone shipment rate of 10Munits/quarter for Fuel-Gauge
    battery-monitor IC.
--  Ramping production of 6-axis accelerometer and gyroscope for a
    high-profile launch by a major phone manufacturer.
--  Achieved significant qualifications for 6-axis accelerometer and
    gyroscope and 6-axis accelerometer and compass for important phone
    manufacturers.
--  In production with 9-axis inertial module for several innovative
    navigation-related applications from top-tier Americas manufacturers.

  
Industrial and Power Discretes (IPD) 


 
--  Building momentum for MOSFETs with a qualification from a top
    switched-mode power supply (SMPS) maker and captured design wins with
    important leaders for lighting and charger applications in China and
    South Asia.
--  Achieved big wins for IGBTs (Insulated Gate Bipolar Transistors) with
    a large Asian welding customer and with Intelligent Power Modules for
    air-conditioning and motor-control applications.
--  Earned design wins in several server SMPS platforms with ViperPlus
    high-voltage converters from a major Taiwanese SMPS manufacturer.
--  Gaining market traction with the innovative digital-power STLUX385x
    platform for various projects with wins in major EMEA lighting
    customers.
--  Captured design wins from major German factory automation customers
    with newest octal intelligent power switch.
--  Earned wins for RF antenna-tuner solution for smartphones from a
    leading Taiwanese OEM.
--  Won new socket for the new field-effect rectifier diodes for mobile
    and tablet chargers at a leading Asian OEM.

  
Automotive (APG) 


 
--  Earned an important award for a microcontroller companion chip that
    integrates all key functions for stability-control systems for the
    Korean market from a leading Korean supplier.
--  Captured a design win from a global leader in the braking market for a
    fully integrated electronic parking-brake solution.
--  Reinforced leadership in Infotainment with the awarding of a
    multi-standard digital terrestrial tuner from a leading European Tier
    1.
--  Won several awards for VIPower smart-power technology in Body Control
    Modules from leading global Tier 1s and earned a socket from another
    leading European Tier 1 for our 32-bit automotive microcontrollers for
    an airbag application.

  
Embedded Processing Solutions (EPS) 
Microcontroller, Memory and Secure MCU (MMS) 


 
--  Continued STM32 momentum with several design wins for the STM32 family
    for smart-watch applications at major global OEMs, as a sensor-hub in
    various mobile applications at a major manufacturer, and in a
    next-generation low-power fitness-monitoring system at a key Americas
    OEM.
--  Ramped production of STM32 controllers for Wi-Fi modules for Internet
    of Things applications at various customers.
--  Earned a win from a leading home-appliance manufacturer for our
    dual-interface memory / dynamic NFC RFID tag in a washing machine.
--  Captured the prestigious 'Electron d'Or 2013' award from ElectroniqueS
    Magazine for the ST31, the first 32-bit Contactless Secure
    Microcontroller.

  
Digital Convergence (DCG) 


 
--  Continued building momentum for ASICs to be manufactured in 28nm
    FD-SOI technology, with two new design wins for networking and
    consumer applications.
--  Maintained success with worldwide customers of awards for new set-top
    box Class2 product family, which has now also obtained the full
    certification from Nagra and Viaccess.
--  Began an important design at a key customer for the US cable modem
    based on the Orly/STiD platform.
--  Captured multiple design-ins of DisplayPort smart connectivity
    products in various applications, including 4Kx2K TV, the first TV
    with DisplayPort input, at a large global consumer manufacturer.

  
Imaging, Bi-CMOS, ASIC and Silicon Photonics (IBP) 


 
--  Won a slot for the Image Signal Processor from a leading phone
    manufacturer.
--  Secured design wins for ASICs using Silicon Photonics with two of the
    world's top optical communications manufacturers.
--  Collected a broad range of design wins from many customers that use ST
    BiCMOS or Silicon Photonics process technology in almost 30 new ASIC
    projects.

  
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: 


 
--  uncertain macro-economic and industry trends;
--  customer demand and acceptance for the products which we design,
    manufacture and sell;
--  unanticipated events or circumstances which may either impact our
    ability to execute the planned reductions in our net operating
    expenses and / or meet the objectives of our R&D Programs which
    benefit from public funding;
--  future events or circumstances which may require us to reassess our
    current plans concerning the break up and wind down of our ST-Ericsson
    joint venture;
--  the loading and the manufacturing performances of our production
    facilities;
--  the functionalities and performance of our IT systems, which support
    our critical operational activities including manufacturing, finance
    and sales;
--  variations in the foreign exchange markets and, more particularly, in
    the rate of the U.S. dollar exchange rate as compared to the Euro and
    the other major currencies we use for our operations;
--  the impact of intellectual property ("IP") claims by our competitors
    or other third parties, and our ability to obtain required licenses on
    reasonable terms and conditions;
--  restructuring charges and associated cost savings that differ in
    amount or timing from our estimates;
--  changes in our overall tax position as a result of changes in tax
    laws, the outcome of tax audits or changes in international tax
    treaties which may impact our results of operations as well as our
    ability to accurately estimate tax credits, benefits, deductions and
    provisions and to realize deferred tax assets;
--  the outcome of ongoing litigation as well as the impact of any new
    litigation to which we may become a defendant;
--  natural events such as severe weather, earthquakes, tsunami, volcano
    eruptions or other acts of nature, health risks and epidemics in
    locations where we, our customers or our suppliers operate;
--  changes in economic, social, political or infrastructure conditions in
    the locations where we, our customers or our suppliers operate
    including as a result of macro-economic or regional events, military
    conflict, social unrest or terrorist activities;
--  availability and costs of raw materials, utilities, third-party
    manufacturing services, or other supplies required by our operations;

  
Such forward-looking statements are subject to various risks and
uncertainties, which may cause actual results and performance of our
business to differ materially and adversely from the forward-looking
statements. Certain forward-looking statements can be identified by
the use of forward looking terminology, such as "believes,"
"expects," "may," "are expected to," "should," "would be," "seeks" or
"anticipates" or similar expressions or the negative thereof or other
variations thereof or comparable terminology, or by discussions of
strategy, plans or intentions. 
Some of these risk factors are set forth and are discussed in more
detail in "Item 3. Key Information - Risk Factors" included in our
Annual Report on Form 20-F for the year ended December 31, 2012, as
filed with the SEC on March 4, 2013. Should one or more of these
risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those
described in this release as anticipated, believed or expected. We do
not intend, and do not assume any obligation, to update any industry
information or forward-looking statements set forth in this release
to reflect subsequent events or circumstances. 
STMicroelectronics Conference Call and Webcast Information  
On July 23, 2013, the management of STMicroelectronics will conduct a
conference call to discuss the Company's operating performance for
the second quarter of 2013. 
The conference call will be held at 9:00 a.m. U.S. Eastern Time /
3:00 p.m. CET. The 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 August 2, 2013. 
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. 
In 2012, the Company's net revenues were $8.49 billion. Further
information on ST can be found at www.st.com. 
(tables attached) 


 
                                                                            
----------------------------------------------------------------------------
STMicroelectronics N.V.                                                     
Consolidated Statements of Income                                           
(in millions of U.S. dollars, except per share                              
 data ($))                                                                  
                                                                            
                                                       Three Months Ended   
                                                    (Unaudited)  (Unaudited)
                                                   -------------------------
                                                       June 29,     June 30,
                                                           2013         2012
                                                   -------------------------
                                                                            
Net sales                                                 2,034        2,140
Other revenues                                               11            8
                                                   -------------------------
  NET REVENUES                                            2,045        2,148
Cost of sales                                           (1,373)      (1,412)
                                                   -------------------------
  GROSS PROFIT                                              672          736
Selling, general and administrative                       (285)        (292)
Research and development                                  (453)        (617)
Other income and expenses, net                                2           22
Impairment, restructuring charges and other                                 
 related closure costs                                     (43)         (56)
  
                                                 -------------------------
  Total Operating Expenses                                (779)        (943)
                                                   -------------------------
  OPERATING LOSS                                          (107)        (207)
Interest income (expense), net                                7          (6)
Income (loss) on equity-method investments                 (89)          (2)
LOSS BEFORE INCOME TAXES                                  (189)        (215)
  AND NONCONTROLLING INTEREST                                               
Income tax benefit (expense)                                 16         (20)
                                                   -------------------------
  NET LOSS                                                (173)        (235)
Net loss (income) attributable to noncontrolling                            
 interest                                                    21          160
                                                   -------------------------
  NET LOSS ATTRIBUTABLE TO PARENT COMPANY                 (152)         (75)
                                                   =========================
                                                                            
  EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO                                
   PARENT COMPANY STOCKHOLDERS                           (0.17)       (0.08)
  EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO                              
   PARENT COMPANY STOCKHOLDERS                           (0.17)       (0.08)
                                                                            
  NUMBER OF WEIGHTED AVERAGE                                                
  SHARES USED IN CALCULATING                                                
  EARNINGS PER SHARE                                      889.0        886.1
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
STMicroelectronics N.V.                                                     
Consolidated Statements of Income                                           
(in millions of U.S. dollars, except per share                              
 data ($))                                                                  
                                                                            
                                                        Six Months Ended    
                                                    (Unaudited)  (Unaudited)
                                                   -------------------------
                                                       June 29,     June 30,
                                                           2013         2012
                                                   -------------------------
                                                                            
Net sales                                                 4,037        4,150
Other revenues                                               18           15
                                                   -------------------------
  NET REVENUES                                            4,055        4,165
Cost of sales                                           (2,755)      (2,833)
                                                   -------------------------
  GROSS PROFIT                                            1,300        1,332
Selling, general and administrative                       (564)        (602)
Research and development                                  (986)      (1,250)
Other income and expenses, net                                6           35
Impairment, restructuring charges and other                                 
 related closure costs                                    (144)         (74)
                                                   -------------------------
  Total Operating Expenses                              (1,688)      (1,891)
                                                   -------------------------
  OPERATING LOSS                                          (388)        (559)
Interest expense, net                                         -         (19)
Loss on equity-method investments                         (102)          (9)
Gain on financial instruments, net                            -            3
  LOSS BEFORE INCOME TAXES                                (490)        (584)
    AND NONCONTROLLING INTEREST                                             
Income tax benefit                                           21           14
                                                   -------------------------
  NET LOSS                                                (469)        (570)
Net loss (income) attributable to noncontrolling                            
 interest                                                   147          318
                                                   -------------------------
  NET LOSS ATTRIBUTABLE TO PARENT COMPANY                 (322)        (252)
                                                   =========================
                                                                            
  EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO                                
   PARENT COMPANY STOCKHOLDERS                           (0.36)       (0.28)
  EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO                              
   PARENT COMPANY STOCKHOLDERS                           (0.36)       (0.28)
                                                                            
  NUMBER OF WEIGHTED AVERAGE                                                
  SHARES USED IN CALCULATING                                                
  EARNINGS PER SHARE                                      888.5        885.5
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
STMicroelectronics N.V.                                                     
CONSOLIDATED BALANCE SHEETS                                                 
As at                                   June 29,     March 30,  December 31,
In millions of U.S. dollars               2013         2013         2012    
                                      --------------------------------------
                                       (Unaudited)  (Unaudited)    Audited  
----------------------------------------------------------------------------
ASSETS                                                                      
Current assets:                                                             
Cash and cash equivalents                    1,583        1,718        2,250
Short-term deposits                              1            1            1
Marketable securities                          189          187          238
Trade accounts receivable, net               1,118        1,025        1,005
Inventories                                  1,336        1,306        1,353
Deferred tax assets                            224          141          137
Assets held for sale                            28           37            -
Other current assets                           567          501          518
                                      --------------------------------------
Total current assets                         5,046        4,916        5,502
Goodwill                                       135          140          141
Other intangible assets, net                   250          208          213
Property, plant and equipment, net           3,276        3,275        3,481
Non-
current deferred tax assets                395          439          414
Restricted cash                                  -            4            4
Long-term investments                           29          110          119
Other non-current assets                       512          540          560
                                      --------------------------------------
                                             4,597        4,716        4,932
                                      --------------------------------------
Total assets                                 9,643        9,632       10,434
                                                                            
LIABILITIES AND EQUITY                                                      
Current liabilities:                                                        
Short-term debt                                313          250          630
Trade accounts payable                         985          862          797
Other payables and accrued                                                  
 liabilities                                   993          997          942
Dividends payable to stockholders               94            -           89
Deferred tax liabilities                         1           11           11
Accrued income tax                              65           77           86
                                      --------------------------------------
Total current liabilities                    2,451        2,197        2,555
Long-term debt                                 651          647          671
Post-retirement benefit obligations            492          474          477
Long-term deferred tax liabilities              15           15           14
Other long-term liabilities                    357          351          353
                                      --------------------------------------
                                             1,515        1,487        1,515
Total liabilities                            3,966        3,684        4,070
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, 910,622,305 shares                                             
 issued, 890,459,183 shares                                                 
 outstanding)                                1,156        1,156        1,156
Capital surplus                              2,564        2,559        2,555
Retained earnings                            1,433        1,788        1,959
Accumulated other comprehensive                                             
 income                                        749          673          794
Treasury stock                               (213)        (239)        (239)
                                      --------------------------------------
Total parent company stockholders'                                          
 equity                                      5,689        5,937        6,225
Noncontrolling interest                       (12)           11          139
                                      --------------------------------------
Total equity                                 5,677        5,948        6,364
Total liabilities and equity                 9,643        9,632       10,434
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
STMicroelectronics N.V.                                                     
                                                                            
SELECTED CASH FLOW DATA                                                     
                                                                            
----------------------------------------------------------------------------
Cash Flow Data (in US$ millions)               Q2 2013    Q1 2013    Q2 2012
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Net Cash from (used in) operating                   15         66       (37)
 activities                                                                 
----------------------------------------------------------------------------
Net Cash used in investing activities            (146)       (81)      (199)
----------------------------------------------------------------------------
Net Cash from (used in) financing                 (12)      (481)         33
 activities                                                                 
----------------------------------------------------------------------------
Net Cash decrease                                (135)      (532)      (253)
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Selected Cash Flow Data (in US$ millions)      Q2 2013    Q1 2013    Q2 2012
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Depreciation & amortization                        224        237        281
----------------------------------------------------------------------------
Net payment for Capital expenditures             (121)      (111)       (70)
----------------------------------------------------------------------------
Dividends paid to stockholders*                   (75)       (89)       (89)
----------------------------------------------------------------------------
Change in inventories, net                        (18)         30       (21)
----------------------------------------------------------------------------
                                                                            
* The amount paid in Q2 2013 does not include the American                  
 investors, paid in July 2013.                                              

 
((Attachment A) 
STMicroelectronics
  Supplemental Non-U.S. GAAP
Financial Information
  U. S. GAAP - Non-U.S. GAAP Reconciliation 
In Million US$ Except Per Share Data 
The supplemental non-U.S. GAAP information presented in this press
release is unaudited and subject to inherent limitations. Such
non-U.S. GAAP information is not based on any comprehensive set of
accounting rules or principles and should not be considered as a
substitute for U.S. GAAP measurements. Also, our supplemental
non-U.S. GAAP financial information may not be comparable to
similarly titled non-U.S. GAAP measures used by other companies.
Further, specific limitations for individual non-U.S. GAAP measures,
and the reasons for presenting non-U.S. GAAP financial information,
are set forth in the paragraphs below. To compensate for these
limitations, the supplemental non-U.S. GAAP financial information
should not be read in isolation, but only in conjunction with our
consolidated financial statements prepared in accordance with U.S.
GAAP. 
Operating income (loss) before, impairment, 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. 


 
                                                                            
----------------------------------------------------------------------------
Q2 2013                                  Operating                          
(US$ millions and cents per     Gross     Income       Net     Corresponding
 share)                        Profit     (loss)    Earnings        EPS     
----------------------------------------------------------------------------
U.S. GAAP                        672       (107)      (152)       (0.17)    
----------------------------------------------------------------------------
Impairment & Restructuring                  43         41                   
-------------------------------------------------------------               
Loss on equity-method                                                       
 investments (3Sun)                                    69                   
-------------------------------------------------------------               
Estimated Income Tax Effect                           (11)                  
----------------------------------------------------------------------------
Non-U.S GAAP                     672       (64)       (53)        (0.06)    
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
Q1 2013                                  Operating                          
(US$ millions and cents per     Gross     Income       Net     Corresponding
 share)                        Profit     (loss)    Earnings        EPS     
----------------------------------------------------------------------------
U.S. GAAP                        628       (281)      (171)       (0.19)    
----------------------------------------------------------------------------
Impairment & Restructuring                  101        58                   
-------------------------------------------------------------               
Estimated Income Tax Effect                            (3)                  
----------------------------------------------------------------------------
Non-U.S GAAP                     628       (180)      (116)       (0.13)    
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
Q2 2012                                  Operating                          
(US$ millions and cents per     Gross     Income       Net     Corresponding
 share)                        Profit     (loss)    Earnings        EPS     
----------------------------------------------------------------------------
U.S. GAAP                        736       (207)      (75)        (0.08)    
----------------------------------------------------------------------------
Impairment & Restructuring                  56         28                   
-------------------------------------------------------------               
Estimated Income Tax Effect                             -                   
----------------------------------------------------------------------------
Non-U.S GAAP                     736       (151)      (47)        (0.05)    
----------------------------------------------------------------------------

 
(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$          June 29,     March 30,  December 31,
 millions)                                2013         2013         2012    
----------------------------------------------------------------------------
Cash and cash equivalents                 1,583        1,718        2,250   
----------------------------------------------------------------------------
Marketable securities                      189          187          238    
----------------------------------------------------------------------------
Short-term deposits                         1            1            1     
----------------------------------------------------------------------------
Non-current restricted cash                 -            4            4     
----------------------------------------------------------------------------
Total financial resources                 1,773        1,910        2,493   
----------------------------------------------------------------------------
Short-term borrowings and current                                           
 portion of long-term debt                (313)        (250)        (630)   
----------------------------------------------------------------------------
Long-term debt                            (651)        (647)        (671)   
----------------------------------------------------------------------------
Total financial debt                    
  (964)        (897)       (1,301)  
----------------------------------------------------------------------------
Net financial position                     809         1,013        1,192   
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Net financial position, adjusted to                                         
 account for 50%investment in ST-          954         1,096        1,192   
 Ericsson                                                                   
----------------------------------------------------------------------------

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


 
                                                                            
----------------------------------------------------------------------------
Free cash flow (in US$ millions)              Q2 2013    Q1 2013    Q2 2012 
----------------------------------------------------------------------------
Net cash from (used in) operating                                           
 activities                                     15         66        (37)   
----------------------------------------------------------------------------
Net cash from (used in) investing                                           
 activities                                    (146)      (81)       (199)  
----------------------------------------------------------------------------
Payment for purchases of (proceeds from                                     
 sale of) marketable securities, short term     (3)       (50)        107   
 deposits and restricted cash, net                                          
----------------------------------------------------------------------------
Free cash flow                                 (134)      (65)       (129)  
----------------------------------------------------------------------------

 
ST Q2 2013 results: http://hugin.info/152740/R/1717945/571375.pdf  
For further information, please contact: 
INVESTOR RELATIONS:
Tait Sorensen 
Group VP, Investor Relations
STMicroelectronics
Tel: +1 602 485 2064
tait.sorensen@st.com 
MEDIA RELATIONS:
Nelly Dimey 
Director, Corporate Media and Public Relations
STMicroelectronics
Tel: +33 158 077 785
nelly.dimey@st.com