STMicroelectronics Reports 2014 First Quarter Financial Results

STMicroelectronics Reports 2014 First Quarter Financial Results    oFirst quarter financial results in line with expectations; year-over-year     operating income improvement of $188 million before impairment and     restructuring charges   oStrategic agreement for 28nm FD-SOI technology signed with a top-tier     foundry   oStable cash dividend of US$0.10 per share for both the second and third     quarters of 2014 to be proposed to the 2014 Annual General Meeting of     Shareholders  GENEVA, April 28, 2014 (GLOBE NEWSWIRE) -- STMicroelectronics (NYSE:STM), a global semiconductor leader serving customers across the spectrum of electronics applications, reported financial results for the first quarter ended March 29, 2014.  First quarter net revenues totaled $1.83 billion, gross margin was 32.8%, and net loss was $0.03 per share.  "First quarter revenue and gross margin results were well aligned with our guidance," commented ST President and CEO Carlo Bozotti. "The combination of a positive macro-economic environment and our leading-edge product portfolio helped to drive higher year-over-year revenues in Microcontrollers, Automotive, Industrial and Power, as well as in the Distribution channel. Our general-purpose microcontroller business enjoyed the fourth consecutive quarter of record revenues and today, ST is the second largest player worldwide in microcontrollers, including both general-purpose and secure.*  "During the first quarter, ST posted an operating profit before impairment and restructuring charges of $8 million, improving by $188 million year-over-year, driven by the exit from ST-Ericsson as well as operating expenses well in line with our financial model. Additionally, our strong and growing product momentum in our Sense & Power and Automotive segment translated into an operating margin improvement of 360 basis points in this segment compared to the year-ago quarter.  "In our Digital Convergence business, we made progress in building the pipeline to sustain its future turnaround; design-win momentum for our latest ARM-based client and server portfolio for HEVC and ultra-HD set-top-box continued during the quarter, as well as for our FD-SOI based IC solutions."  ----- (*) Source: IHS Technology Competitive Landscaping Tool, March 2014  Summary Financial Highlights  U.S. GAAP                                        Q1 2014 Q4 2013 Q1 2013^(a) (Million US$) Net Revenues                                     1,825   2,015   2,009 Gross Margin                                     32.8%   32.9%   31.3% Operating Income (Loss), as reported             (4)     (11)    (281) Net Income (Loss) attributable to parent company (24)    (36)    (171)  ^(a) Net revenues include sales recorded by ST-Ericsson as consolidated by ST. ST-Ericsson was deconsolidated on September 1, 2013  Non-U.S. GAAP*                                         Q1 2014 Q4 2013 Q1 2013 (Million US$) Operating Income (Loss) before impairment and          8       18      (180) restructuring charges Operating Margin before impairment and restructuring   0.4%    0.9%    (8.9%) charges  First Quarter Review  ST's first quarter revenues, excluding legacy ST-Ericsson products, grew 0.7% on a year-over-year basis and decreased 6.4% sequentially. First quarter total revenues, including legacy ST-Ericsson products, decreased year-over-year and sequentially by 9.2% and 9.4%, respectively.  Microcontroller, Memory, and Secure MCU (MMS) and Automotive (APG) led the product lines with year-over-year revenue growth of 15.6% and 15.5%, respectively.  On a year-over-year basis by region of shipment, Greater China & South Asia posted total revenue growth of 1.4% while EMEA and the Americas decreased by 4.4% and 8.6%, respectively. Japan & Korea revenues decreased 34.9% driven by a significant decrease in legacy ST-Ericsson products.  In the first quarter, ST and InvenSense settled all pending proceedings and have entered into a patent cross-license agreement. Under the terms of the settlement, InvenSense made a one-time $15 million payment in the first quarter of 2014. ST will collect royalties under the terms of the patent cross license in the future. The expected royalties will not be material to ST's financial results.  First quarter gross profit was $599 million and gross margin was 32.8%. Gross margin improved 150 basis points year-over-year, benefiting from the one-time licensing payment, manufacturing efficiencies and lower unsaturation charges partially offset by price pressure. Gross margin decreased 10 basis points sequentially due to usual price pressure and manufacturing inefficiencies partially offset by product mix and the one-time licensing payment.  Combined R&D and SG&A expenses decreased 25.4% to $606 million compared to $812 million in the year-ago quarter mainly due to the exit from ST-Ericsson and ongoing cost reduction activities and on a sequential basis decreased 7.8% benefiting from ongoing cost reduction initiatives and a lower number of days in the quarter. R&D expenses in the first quarter were $378 million decreasing by 29.1% and 7.2% on a year-over-year and sequential basis, respectively. SG&A expenses totaled $228 million in the first quarter, a reduction of 18.4% and 8.8% compared to the year-ago and prior quarter, respectively. ----- (*)Operating income (loss) before impairment and restructuring charges and operating margin before impairment and restructuring charges are non-U.S. GAAP measures. Please refer to Attachment A for reconciliation to U.S. GAAP and additional information explaining why the Company believes these measures are important.  First quarter other income & expenses, net, registered income of $15 million mainly benefiting from the sale of assets totaling $13 million and $21 million of R&D grants. These R&D grants do not include the Nano2017 R&D grants, pending European Union approval now expected in the second quarter of 2014.  First quarter operating income and operating margin before impairment and restructuring charges improved to $8 million and 0.4%, respectively, compared to a loss of $180 million or negative 8.9% in the year-ago quarter principally due to the exit from ST-Ericsson and ongoing cost reduction activities. Impairment and restructuring charges were significantly reduced in the first quarter at $12 million compared to $101 million in the year-ago quarter and $29 million in the prior quarter.  First quarter net loss attributable to parent company was $24 million or $(0.03) per share, compared to a net loss per share of $(0.19) and $(0.04) in the year-ago and prior quarter, respectively. On an adjusted basis, ST's non-U.S. GAAP net loss per share was $(0.01) in the first quarter compared to a net loss per share of $(0.13) and $(0.01) in the year-ago and prior quarter, respectively.*  For the first quarter of 2014, the effective average exchange rate for the Company was approximately $1.35 to €1.00 compared to $1.31 to €1.00 for the first quarter of 2013 and $1.34 to €1.00 for the fourth quarter of 2013.  ----- (*)Adjusted net earnings per share is a non-U.S. GAAP measure. For additional information and reconciliation to U.S. GAAP, please refer to Attachment A.  Quarterly Net Revenues Summary  Commencing January 1, 2014, the Company transferred the former Wireless Product Group (legacy ST-Ericsson products) into the Digital Convergence Group.  Net Revenues By Product Line and Segment               Q1 2014 Q4 2013 Q1 2013 (Million US$) Analog & MEMS (AMS)                                    304     337     313 Automotive (APG)                                       445     449     385 Industrial & Power Discrete (IPD)                      442     447     429 Sense & Power and Automotive Products (SP&A)           1,191   1,233   1,127 Digital Convergence Group (DCG) ^(a)                   205     307     496 Imaging, Bi-CMOS ASIC and Silicon Photonics (IBP) ^(a) 77      112     72 Microcontroller, Memory & Secure MCU (MMS)             346     357     299 Embedded Processing Solutions (EPS)                    628     776     867 Others                                                 6       6       15 Total                                                  1,825   2,015   2,009  (a) Reflecting the transfer of Wireless (legacy ST-Ericsson products) and the Image Signal Processor business unit from IBP to DCG as of January 1, 2014, the Company has reclassified prior- period revenues.  Net Revenues By Market Channel (%) Q1 2014 Q4 2013 Q1 2013 Total OEM                          70%     73%     75% Distribution                       30%     27%     25%  Quarterly Revenues and Operating Results by ST Product Segment                       Q1 2014  Q1 2014   Q4 2013  Q4 2013   Q1 2013  Q1 2013 Operating Segment    Net      Operating Net      Operating Net      Operating (Million US$)        Revenues Income    Revenues Income    Revenues Income                               (Loss)             (Loss)             (Loss) Sense & Power and Automotive Products  1,191    104       1,233    96        1,127    58 (SP&A) Embedded Processing  628      (80)      776      (66)      867      (210) Solutions (EPS) ^(a) Others ^(b)(c)       6        (28)      6        (41)      15       (129) TOTAL                1,825    (4)       2,015    (11)      2,009    (281)  ^(a) Embedded Processing Solutions includes the Wireless product line which includes a portion of sales and operating results of ST-Ericsson as consolidated in the Company's revenues and operating results until September 1, 2013, as well as other items affecting operating results related to the wireless business. ^(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 $5 million, $7 million, and $24 million of unused capacity charges in the first quarter of 2014 and fourth and first quarters of 2013, respectively; and $12 million, $29 million, and $101 million of impairment, restructuring charges, and other related closure costs in the first quarter of 2014 and fourth and first quarters of 2013, respectively.  Sense & Power and Automotive Products (SP&A) first quarter net revenues increased 5.7% compared to the year-ago quarter driven by APG and IPD. SP&A revenues decreased 3.5% sequentially. SP&A operating margin improved to 8.7% in the 2014 first quarter compared to 5.1% in year-ago quarter reflecting leverage on revenue growth, product innovation and manufacturing performance. SP&A operating margin in the prior quarter was 7.7%.  Embedded Processing Solutions (EPS) first quarter net revenues, including $63 million from legacy ST-Ericsson products, decreased 27.6% on a year-over-year basis mainly due to the phasing out of legacy ST-Ericsson products and lower sales of set-top-box products, despite strong growth in microcontrollers. Revenues decreased 19.1% sequentially mainly due to the decrease in ST-Ericsson legacy products and lower sales of set-top-box and imaging products. EPS segment operating margin was negative 12.7% in the 2014 first quarter, compared to negative 24.2% and negative 8.5% in the year-ago and prior quarter, respectively.  "We have just signed a strategic agreement with a top-tier foundry for 28nm FD-SOI technology. This agreement expands the ecosystem, assures the industry of high-volume production of ST's FD-SOI based IC solutions for faster, cooler, and simpler devices and strengthens the business and financial prospects of the Embedded Processing Solutions Segment," said Jean-Marc Chery, Executive Vice President and General Manager, Embedded Processing Solutions.  Cash Flow and Balance Sheet Highlights  Free cash flow was negative $51 million in the first quarter compared to negative $65 million in the year-ago quarter and positive $91 million in the prior quarter.*  Capital expenditure payments, net of proceeds from sales, were $112 million during the first quarter of 2014 compared to $111 million and $133 million in the year-ago and prior quarter, respectively.  Inventory was $1.33 billion at quarter end, substantially flat with the prior quarter. Inventory in the first quarter of 2014 was at 3.7 turns or 97 days.  In the first quarter, the Company paid cash dividends totaling $85 million.  ST's net financial position was $612 million at March 29, 2014 compared to $741 million at December 31, 2013.* ST's financial resources equaled $1.75 billion and total debt was $1.13 billion at March 29, 2014.  Total equity, including non-controlling interest, was $5.68 billion at quarter 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.  Second Quarter 2014 Business Outlook  Mr. Bozotti stated, "In the second quarter, we expect overall revenues to increase sequentially by about 2% at the midpoint. As anticipated, ST-Ericsson's legacy products are winding down and revenues are expected to be less than half of the $63 million recorded in the first quarter.  "We are encouraged by the signs of improvement in the macro-economic environment generally and by specific product dynamics expected in the next several quarters. In the second quarter, we see opportunities to continue to expand our customer base, driven by strength in microcontrollers, automotive and industrial, and power applications and by the initial recovery of the Embedded Processing Solutions segment.  "In addition, we see opportunities to further advance ST's leadership in key embedded processing solutions and technologies with the approval of the Nano2017 R&D program, now expected this quarter.  "Finally, based upon our financial position, performance and market outlook, the Supervisory Board is recommending to shareholders the approval of a $0.10 per share cash dividend for the second and third quarters of this year, stable with prior periods and in line with our intention to continue to return value to shareholders."  Reflecting no one-time licensing revenues compared to the first quarter, the Company expects second quarter 2014 revenues to increase about 2% on a sequential basis, plus or minus 3.5 percentage points. As a result, gross margin in the second quarter is expected to be about 33.6%, plus or minus 2.0 percentage points.  This outlook is based on an assumed effective currency exchange rate of approximately $1.36 = €1.00 for the 2014 second quarter and includes the impact of existing hedging contracts. The second quarter will close on June 28, 2014.  Key Summary Financial Information  Reflecting the transfer of Wireless (legacy ST-Ericsson products) and the Image Signal Processor business unit from IBP to DCG as of January 1, 2014, the Company has reclassified prior period revenues.  Revenues      Q1 2013 Q2 2013 Q3 2013 Q4 2013 FY 2013 Q1 2014 (Million US$) DCG           496     375     314     307     1,491   205 IBP           72      98      128     112     410     77  Recent Corporate Developments    oOn February 10, ST and InvenSense announced that they had settled all     pending proceedings between them and have entered into a patent     cross-license agreement. Under the terms of the settlement, InvenSense     made a one-time $15 million payment in the first quarter of 2014 but     neither ST nor InvenSense has made any admission of liability. ST will     collect royalties under the terms of the patent cross license in the     future. The expected royalties will not be material to ST's financial     results. Other terms between the parties are confidential.        oOn April 9, the European Commission approved €34 million in aid for the     TOURS 2015 research program led by ST; the aid, granted by France to ST     for the development of new technologies in the Nanoelectronics sector, was     in line with EU state-aid rules. In particular, the Commission considers     that the project will help achieve EU scientific and environmental targets     without unduly distorting competition.  Q1 2014 - Product and Technology Highlights  During the quarter, ST made strong progress with important new-product introductions and significant design wins.  Embedded Processing Solutions (EPS)  Digital Convergence (DCG)    oContinued building global momentum in set-top boxes, collecting several     design wins including HEVC HD, HEVC UHD, and DOCSIS 3.0 sockets across     Cannes, Alicante, Liege, and all product families.   oAnnounced expansion of offering in set-top box, including new devices in     the Liege family and cooperation with third-party partners to provide     complete and seamless solutions for the worldwide broadcast markets.   oContinued to see strong momentum for 28nm FD-SOI, collecting two     additional design wins.   oPreviewed groundbreaking next-generation computing architecture for the     Digital Home that builds on current ARM-based SoCs while leveraging 64-bit     ARM cores to support the increasing performance and memory requirements of     future SoCs.  Imaging, Bi-CMOS, ASIC and Silicon Photonics (IBP)    oWon new silicon-photonics project and transceiver chipset for FibreChannel     high-speed data-storage applications with a key customer.   oCaptured design win for analog switch for cell-phone-antenna chipset.   oAwarded a major socket for time-of-flight photonic sensor for an     innovative camera system by a leading smart-phone manufacturer.   oBegan shipping dedicated imaging-processing chip to a leading Asian     smart-phone manufacturer for their flagship phone.  Microcontroller, Memory and Secure MCU (MMS)    oRamped production of STM32 microcontrollers for three new Samsung     smartwatches that were unveiled at MWC2014.   oEarned wins for lower-end ARM^® Cortex^®-M STM32F0 in several sensors,     lighting applications, and gaming accessories.   oCaptured Flash-based Secure MCU win for a major smartcard health program     in Europe.   oAnnounced new platforms (STM32 Nucleo) and software (STM32Cube) to enhance     the development ecosystem and make STM32s even easier to design with.   oExtended the industry's broadest portfolio of ARM Cortex-M     microcontrollers with the introduction of STM32L0 ultra-low power series     featuring ARM Cortex M0+ core.   oAwarded high-density standard-EEPROM socket for parameter storage in an     NFC module from a worldwide key player.   Sense & Power and Automotive Products (SP&A)  Analog, MEMS and Sensors (AMS)    oRamped production of touch-screen controllers for new Samsung smartphone     that was launched in the first quarter of 2014. Touch-screen controller     also gained momentum with additional big wins in tablets in Asia.   oCaptured 100% share in all pressure sensors with a leading consumer brand     in Asia.   oIntroduced 2x2mm pressure-sensor in unique package technology that     protects the sensing element, making it ideal for wearable applications.   oIncreased penetration with multiple 6-axis sensor wins across Greater     China region in leading manufacturers.   oExpanded presence of accelerometers in automotive-infotainment market with     design awards from top players across the globe.   oRevealed 9-axis movement and position sensor that delivers enhanced     performance with reduced power demand in a package almost 35% smaller than     previous generations.   oLeveraged outstanding low-power performance of Bluetooth Low Energy and     Spirit1 sub-gigahertz radios with multiple design wins and orders.   oReconfirmed leadership in automotive-grade high-precision op amp with     design-win at a leading Americas manufacturer.   oAnnounced broad portfolio of analog devices that comprise the industry's     most complete set of building blocks for creating innovative wearable     applications.  Automotive (APG)    oSigned an exclusive agreement to supply audio amplifiers to a     market-leading manufacturer of audio sound systems.   oCaptured the win for the EyeQ4 next-generation advanced driver assist     system (ADAS) vision processor from Mobileye, the top supplier of such     systems.   oEarned breakthrough for car audio processor with a win with a major     manufacturer in the Japanese market.   oLaunched third-generation single-chip standalone positioning family     capable of receiving signals from all of the major satellite navigation     systems.  Industrial and Power Discrete (IPD)    oSecured qualifications from several power-supply manufacturers for     low-voltage MOSFETS.   oLaunched complete and configurable plug-and-play street-lighting solution     for efficient control of dimmable, high-brightness LED strings to optimize     dimming and minimize power in idle conditions.   oEarned first win from a large Chinese manufacturer for high-voltage IGBT     for a telecom application.   oSecured wins in smartphone and GPS applications for tunable integrated RF     capacitor and ultraminiature balun with leading manufacturers.   oLanded a design win for a SmartGrid platform in an Eastern Europe pilot     program.   oWon sockets in key mobile applications from global players for     ultra-miniature filtering and protection devices.   oRevealed high-voltage silicon carbide power MOSFETs that help save at     least 50% of previously wasted energy.  Use of Supplemental Non-U.S. GAAP Financial Information  This press release contains supplemental non-U.S. GAAP financial information, including operating income (loss) before impairment and restructuring charges, operating margin before impairment and restructuring charges, adjusted net earnings per share, free cash flow and net financial position.  Readers are cautioned that these measures are unaudited and not prepared in accordance with U.S. GAAP and should not be considered as a substitute for U.S. GAAP financial measures. In addition, such non-U.S. GAAP financial measures may not be comparable to similarly titled information by other companies.  See Attachment A of this press release for a reconciliation of the Company's non-U.S. GAAP financial measures to their corresponding U.S. GAAP financial measures. To compensate for these limitations, the supplemental non-U.S. GAAP financial information should not be read in isolation, but only in conjunction with the Company's consolidated financial statements prepared in accordance with U.S. GAAP.  Forward-looking information  Some of the statements contained in this release that are not historical facts are statements of future expectations and other forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended) that are based on management's current views and assumptions, and are conditioned upon and also involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those anticipated by such statements, due to, among other factors:    oUncertain macro-economic and industry trends;   oCustomer demand and acceptance for the products which we design,     manufacture and sell;   oUnanticipated 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;   oThe loading and the manufacturing performance of our production     facilities;   oThe functionalities and performance of our IT systems, which support our     critical operational activities including manufacturing, finance and     sales;   oVariations in the foreign exchange markets and, more particularly, the     U.S. dollar exchange rate as compared to the Euro and the other major     currencies we use for our operations;   oThe 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;   oRestructuring charges and associated cost savings that differ in amount or     timing from our estimates;   oChanges 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;   oThe outcome of ongoing litigation as well as the impact of any new     litigation to which we may become a defendant;   oNatural 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;   oChanges 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;   oAvailability and costs of raw materials, utilities, third-party     manufacturing services, or other supplies required by our operations.  Such forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of our business to differ materially and adversely from the forward-looking statements. Certain forward-looking statements can be identified by the use of forward looking terminology, such as "believes," "expects," "may," "are expected to," "should," "would be," "seeks" or "anticipates" or similar expressions or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans or intentions.  Some of these risk factors are set forth and are discussed in more detail in "Item 3. Key Information - Risk Factors" included in our Annual Report on Form 20-F for the year ended December 31, 2013, as filed with the SEC on March 5, 2014. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this release as anticipated, believed, or expected. We do not intend, and do not assume any obligation, to update any industry information or forward-looking statements set forth in this release to reflect subsequent events or circumstances.  STMicroelectronics Conference Call and Webcast Information  On April 29, 2014, the management of STMicroelectronics will conduct a conference call to discuss the Company's operating performance for the first quarter of 2014.  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 May 9, 2014.  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 2013, the Company's net revenues were $8.08 billion. Further information on ST can be found at www.st.com.                                (tables attached)  STMicroelectronics                                 N.V. Consolidated                                       Statements of Income (in millions of U.S. dollars, except per                                share data ($))                                                                        Three Months Ended                      (Unaudited)                  (Unaudited)                      March 29,                    March 30,                      2014                         2013                                                   Net sales              1,801    2,003 Other revenues         24  6  NET REVENUES         1,825    2,009 Cost of sales          (1,226)    (1,381)  GROSS PROFIT         599   628 Selling, general and   (228)   (279) administrative Research and           (378)   (533) development Other income and       15  4 expenses, net Impairment, restructuring charges  (12)  (101) and other related closure costs  Total Operating      (603)   (909) Expenses  OPERATING LOSS           (281)                       (4) Interest expense, net                            (2)                          (7) Loss on equity-method      (13) investments           (8) Gain on financial        instruments, net      1                            - LOSS BEFORE INCOME     (13)  (301) TAXES  AND NONCONTROLLING                              INTEREST Income tax benefit         4 (expense)             (9)  NET LOSS             (22)  (297) Net loss (income) attributable to            126 noncontrolling        (2) interest  NET LOSS ATTRIBUTABLE TO        (24)  (171) PARENT COMPANY                                                    EARNINGS PER SHARE (BASIC) ATTRIBUTABLE   (0.03)   (0.19) TO PARENT COMPANY STOCKHOLDERS  EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO        (0.03)   (0.19) PARENT COMPANY STOCKHOLDERS                                                    NUMBER OF WEIGHTED                               AVERAGE  SHARES USED IN                                   CALCULATING  DILUTED EARNINGS    890.7                        888.0 PER SHARE  STMicroelectronics N.V.                                           CONSOLIDATED BALANCE SHEETS                                       As at                                     March 29,   December 31, March 30, In millions of U.S. dollars               2014        2013         2013                                          (Unaudited) (Audited)    (Unaudited) ASSETS                                                            Current assets:                                                   Cash and cash equivalents                 1,744       1,836        1,718 Short-term deposits                       1           1            1 Marketable securities                     -           57           187 Trade accounts receivable, net            1,112       1,049        1,025 Inventories                               1,331       1,336        1,306 Deferred tax assets                       130         123          141 Assets held for sale                      -           16           37 Other current assets                      382         389          501 Total current assets                      4,700       4,807        4,916 Goodwill                                  90          90           140 Other intangible assets, net              228         217          208 Property, plant and equipment, net        3,066       3,156        3,275 Non-current deferred tax assets           222         227          439 Restricted cash                           -           -            4 Long-term investments                     72          76           110 Other non-current assets                  639         600          540                                          4,317       4,366        4,716 Total assets                              9,017       9,173        9,632                                                                  LIABILITIES AND EQUITY                                            Current liabilities:                                              Short-term debt                           225         225          250 Trade accounts payable                    764         694          862 Other payables and accrued liabilities    866         937          997 Dividends payable to stockholders         4           89           - Deferred tax liabilities                  -           -            11 Accrued income tax                        51          48           77 Total current liabilities                 1,910       1,993        2,197 Long-term debt                            908         928          647 Post-employment benefit obligations       366         366          474 Long-term deferred tax liabilities        10          11           15 Other long-term liabilities               148         158          351                                          1,432       1,463        1,487 Total liabilities                         3,342       3,456        3,684 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   1,156       1,156        1,156 value, 1,200,000,000 shares authorized, 910,710,805 shares issued, 890,689,950 shares outstanding) Capital surplus                           2,587       2,581        2,559 Retained earnings                         1,052       1,076        1,788 Accumulated other comprehensive income    1,024       1,042        673 Treasury stock                            (212)       (212)        (239) Total parent company stockholders' equity 5,607       5,643        5,937 Noncontrolling interest                   68          74           11 Total equity                              5,675       5,717        5,948 Total liabilities and equity              9,017       9,173        9,632    STMicroelectronics                                            N.V.                                                              SELECTED CASH FLOW                                            DATA                                                              Cash Flow Data (in Q1 2014               Q4 2013               Q1 2013 US$ millions)                                                              Net Cash from                               operating          53                     270 66 activities Net Cash used in                               investing          (39)                   (145) (81) activities Net Cash from (used in)           (105)  270  financing                                                      (481) activities Net Cash increase        402  (decrease)         (92)                                        (532)                                                              Selected Cash Flow Data (in US$       Q1 2014               Q4 2013               Q1 2013 millions)                                                              Depreciation &         225                   237 amortization       205 Net payment for                                                 Capital             (112)  (133)  (111) expenditures Dividends paid to        (89)  stockholders       (85)                                        (89) Change in             inventories, net   6                     -                   30  (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 and restructuring charges 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.  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.  Q1 2014                        Gross  Operating     Net (US$ millions and cents per    Profit Income (loss) Earnings Corresponding EPS share) U.S. GAAP                      599    (4)           (24)     (0.03) Impairment & Restructuring           12            12        Estimated Income Tax Effect                       (1) Non-U.S GAAP                   599    8             (13)     (0.01)  Q4 2013                        Gross  Operating     Net (US$ millions and cents per    Profit Income (loss) Earnings Corresponding EPS share) U.S. GAAP                      662    (11)          (36)     (0.04) Impairment & Restructuring           29            29        Estimated Income Tax Effect                       (6) Non-U.S GAAP                   662    18            (13)     (0.01)  Q1 2013                        Gross  Operating     Net (US$ millions and cents per    Profit Income (loss) Earnings Corresponding EPS share) 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)                                                                     (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$ March 29, 2014 December 31, 2013 March 30, 2013 millions) Cash and cash equivalents      1,744          1,836             1,718 Marketable securities          -              57                187 Short-term deposits            1              1                 1 Non-current restricted cash    -              -                 4 Total financial resources      1,745          1,894             1,910 Short-term debt               (225)          (225)             (250) Long-term debt                 (908)          (928)             (647) Total financial debt           (1,133)        (1,153)           (897) Net financial position         612            741               1,013  Free cash flow is defined as net cash from operating activities minus net cash from (used in) investing activities, excluding proceeds from the sale of marketable securities and net cash variation for joint ventures deconsolidation. 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)                       Q1 2014 Q4 2013 Q1 2013 Net cash from operating activities                     53      270     66 Net cash used in investing activities                  (39)    (145)   (81) Proceeds from sale of marketable securities and net    (65)    (34)    (50) cash variation for joint ventures deconsolidation Free cash flow                                         (51)    91      (65)                                     --end---  ST Q1 2014 press release http://hugin.info/152740/R/1780642/608865.pdf  HUG#1780642  CONTACT: STMicroelectronics          INVESTOR RELATIONS:          Tait Sorensen          Group VP, Investor Relations          Tel: +1 602 485 2064          tait.sorensen@st.com           MEDIA RELATIONS:          Nelly Dimey          Director, Corporate Media and Public Relations          Tel: + 33 1 58 07 77 85          nelly.dimey@st.com  STMicroelectronics logo  
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