STMicroelectronics Reports 2021 Second Quarter Financial Results
STMicroelectronics Reports 2021 Second
Quarter Financial Results
- Q2 net revenues $2.99 billion; gross margin 40.5%;
operating margin 16.3%; net income $412 million
- H1 net revenues $6.01 billion; gross margin 39.7%;
operating margin 15.5%; net income $776 million
- Business outlook at the mid-point: Q3 net revenues of
$3.20 billion and gross margin of 41.0%
Geneva, July 29, 2021 -
STMicroelectronics (NYSE: STM), a global semiconductor
leader serving customers across the spectrum of electronics
applications, reported U.S. GAAP financial results for the second
quarter ended July 3, 2021. This press release also contains
non-U.S. GAAP measures (see Appendix for additional
information).
ST reported second quarter net revenues of $2.99
billion, gross margin of 40.5%, operating margin of 16.3%, and net
income of $412 million or $0.44 diluted earnings per share.
Jean-Marc Chery, STMicroelectronics President
& CEO, commented:
- “Q2 net revenues and gross margin came in at the
high-end of our business outlook range driven by continued strong
demand globally.
- “On a year-over-year basis, Q2 net revenues increased
43.4%. Q2 gross margin of 40.5% and operating margin of 16.3%
improved 550 and 1,120 basis points, respectively, and net income
increased 357.2% to $412 million.
- “First half net revenues increased 39.1%
year-over-year, driven by growth in all product groups,
except the RF Communications sub-group.
Operating margin was 15.5% and net income $776
million.
- “ST’s third quarter outlook, at the mid-point, is for
net revenues of $3.20 billion, increasing year-over-year and
sequentially by 20.0% and 7.0%, respectively; gross margin is
expected to be about 41.0%.
- “We will now drive the Company based on a plan for FY21
revenues of $12.5 billion, plus or minus $100 million, a
year-over-year increase of 22.3% at the mid-point. This growth is
expected to be driven by strong dynamics in all the end markets we
address and our engaged customer programs. Our CAPEX plan will now
be about $2.1 billion for 2021.
Quarterly Financial Summary (U.S. GAAP)
(US$ m, except per share data) |
Q2 2021 |
Q1 2021 |
Q2 2020 |
Q/Q |
Y/Y |
Net Revenues |
$2,992 |
$3,016 |
$2,087 |
-0.8% |
43.4% |
Gross Profit |
$1,212 |
$1,175 |
$730 |
3.1% |
66.1% |
Gross Margin |
40.5% |
39.0% |
35.0% |
150 bps |
550 bps |
Operating Income |
$489 |
$440 |
$106 |
11.1% |
358.8% |
Operating Margin |
16.3% |
14.6% |
5.1% |
170 bps |
1,120 bps |
Net Income |
$412 |
$364 |
$90 |
13.1% |
357.2% |
Diluted Earnings Per Share |
$0.44 |
$0.39 |
$0.10 |
12.8% |
340.0% |
Second Quarter 2021 Summary Review
Net Revenues By Product Group (US$ m) |
Q2 2021 |
Q1 2021 |
Q2 2020 |
Q/Q |
Y/Y |
Automotive and Discrete Group (ADG) |
1,077 |
1,043 |
727 |
3.3% |
48.2% |
Analog, MEMS and Sensors Group (AMS) |
1,013 |
1,083 |
624 |
-6.5% |
62.3% |
Microcontrollers and Digital ICs Group (MDG) |
897 |
886 |
733 |
1.2% |
22.3% |
Others |
5 |
4 |
3 |
- |
- |
Total Net Revenues |
2,992 |
3,016 |
2,087 |
-0.8% |
43.4% |
Net revenues totaled $2.99
billion, a year-over-year increase of 43.4%. On a year-over-year
basis, the Company recorded higher net sales in all product groups
except the RF Communications sub-group. Year-over-year net sales to
OEMs and Distribution increased 38.4% and 53.1%, respectively. On a
sequential basis, net revenues decreased 0.8% but were 300 basis
points above the mid-point of the Company’s guidance. ADG and MDG
reported increases in net revenues on a sequential basis while AMS
decreased.
Gross profit totaled $1.21
billion, a year-over-year increase of 66.1%. Gross
margin of 40.5% increased 550 basis points year-over-year,
mainly driven by lower unloading charges, manufacturing
efficiencies, favorable pricing and improved product mix partially
offset by negative currency effects, net of hedging. Second quarter
gross margin was 100 basis points above the mid-point of the
Company’s guidance mainly due to more favorable pricing and
improved product mix.
Operating income increased
358.8% to $489 million, compared to $106 million in the year-ago
quarter. The Company’s operating margin increased
1,120 basis points on a year-over-year basis to 16.3% of net
revenues, compared to 5.1% in the 2020 second quarter.
By product group, compared with
the year-ago quarter:
Automotive and Discrete Group (ADG):
- Revenue increased in both Automotive and in Power
Discrete.
- Operating profit increased by 523.8% to $102 million. Operating
margin was 9.5% compared to 2.3%.
Analog, MEMS and Sensors Group (AMS):
- Revenue increased in Analog, MEMS and Imaging.
- Operating profit increased by 234.2% to $189 million. Operating
margin was 18.6% compared to 9.0%.
Microcontrollers and Digital ICs Group
(MDG):
- Revenue increased in Microcontrollers and decreased in RF
Communications.
- Operating profit increased by 76.5% to $206 million. Operating
margin was 22.9% compared to 15.9%.
Net income and diluted
earnings per share increased to $412 million and $0.44,
respectively, compared to $90 million and $0.10, respectively, in
the year-ago quarter.
Cash Flow and Balance Sheet Highlights
|
|
|
|
Trailing 12 Months |
(US$ m) |
Q2 2021 |
Q1 2021 |
Q2 2020 |
Q2 2021 |
Q2 2020 |
TTM Change |
Net cash from operating activities |
602 |
682 |
387 |
2,591 |
1,990 |
30.2% |
Free cash flow (non-U.S. GAAP) |
125 |
261 |
28 |
873 |
772 |
13.1% |
Capital expenditure payments, net of proceeds
from sales, were $438 million in the second quarter. In the
year-ago quarter, capital expenditures, net, were $312 million.
Inventory at the end of the second quarter was
$1.97 billion, compared to $1.96 billion in the year-ago quarter.
Day sales of inventory at quarter-end was 101 days compared to 130
days in the year-ago quarter.
Free cash flow (non-U.S. GAAP) was $125 million
in the second quarter, up from $28 million in the year-ago
quarter.
In the second quarter, the Company paid cash
dividends to its shareholders totaling $52 million and executed a
$156 million share buy-back, completing its $750 million share
repurchase program launched on November 5, 2018. On July 1, 2021,
the Company announced the launch of a new share buy-back program of
up to $1,040 million to be executed within a 3-year
period.
ST’s net financial position (non-U.S. GAAP) was
$1.08 billion at July 3, 2021 compared to $1.19 billion at April 3,
2021 and reflected total liquidity of $4.25 billion and total
financial debt of $3.17 billion.
During the second quarter, ST exercised the call
option for the early redemption of its 2024 Tranche B of the
convertible bond issued in 2017. The settlement of the $750 million
principal amount bond is expected to be completed in the third
quarter.
Business Outlook
The Company’s guidance, at the mid-point, for
the 2021 third quarter is:
- Net revenues are expected to be $3.20 billion, an increase of
7.0% sequentially, plus or minus 350 basis points;
- Gross margin of about 41.0%, plus or minus 200 basis
points;
- This outlook is based on an assumed effective currency exchange
rate of approximately $1.19 = €1.00 for the 2021 third quarter and
includes the impact of existing hedging contracts.
- The third quarter will close on October 2, 2021.
Conference Call and Webcast Information
STMicroelectronics will conduct a conference
call with analysts, investors and reporters to discuss its second
quarter 2021 financial results and current business outlook today
at 9:30 a.m. Central European Time (CET) / 3:30 a.m. U.S. Eastern
Time (ET). A live webcast (listen-only mode) of the conference call
will be accessible at ST’s website, http://investors.st.com, and
will be available for replay until August 13, 2021.
Use of Supplemental Non-U.S. GAAP Financial
Information
This press release contains supplemental
non-U.S. GAAP financial information.
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 from other companies. 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.
See the Appendix 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.
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:
- changes in global trade policies, including the adoption and
expansion of tariffs and trade barriers, that could affect the
macro-economic environment and adversely impact the demand for our
products;
- uncertain macro-economic and industry trends, which may impact
end-market demand for our products;
- customer demand that differs from projections;
- the ability to design, manufacture and sell innovative products
in a rapidly changing technological environment;
- changes in economic, social, public health, labor, political,
or infrastructure conditions in the locations where we, our
customers, or our suppliers operate, including as a result of
macroeconomic or regional events, military conflicts, social
unrest, labor actions, or terrorist activities;
- unanticipated events or circumstances, which may impact our
ability to execute our plans and/or meet the objectives of our
R&D and manufacturing programs, which benefit from public
funding;
- legal, political and economic uncertainty surrounding Brexit
may be a continued source of instability in international markets
and currency exchange rate volatility and may adversely affect
business activity, political stability and economic conditions and
while we do not have material operations in the U.K. and have not
experienced any material impact from Brexit on our underlying
business to date, we cannot predict its future implications;
- financial difficulties with any of our major distributors or
significant curtailment of purchases by key customers;
- the loading, product mix, and manufacturing performance of our
production facilities and/or our required volume to fulfill
capacity reserved with suppliers or third party manufacturing
providers;
- availability and costs of equipment, raw materials, utilities,
third-party manufacturing services and technology, or other
supplies required by our operations;
- the functionalities and performance of our IT systems, which
are subject to cybersecurity threats and which support our critical
operational activities including manufacturing, finance and sales,
and any breaches of our IT systems or those of our customers or
suppliers;
- theft, loss, or misuse of personal data about our employees,
customers, or other third parties, and breaches of global and local
privacy legislation, including the EU’s General Data Protection
Regulation (“GDPR”);
- 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;
- changes in our overall tax position as a result of changes in
tax rules, new or revised legislation, 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;
- variations 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;
- the outcome of ongoing litigation as well as the impact of any
new litigation to which we may become a defendant;
- product liability or warranty claims, claims based on epidemic
or delivery failure, or other claims relating to our products, or
recalls by our customers for products containing our parts;
- natural events such as severe weather, earthquakes, tsunamis,
volcano eruptions or other acts of nature, the effects of climate
change, health risks and epidemics such as the COVID-19 in
locations where we, our customers or our suppliers operate;
- the duration and the severity of the global outbreak of
COVID-19 may continue to negatively impact the global economy in a
significant manner for an extended period of time, and also could
materially adversely affect our business and operating
results;
- industry changes resulting from vertical and horizontal
consolidation among our suppliers, competitors, and customers;
and
- the ability to successfully ramp up new programs that could be
impacted by factors beyond our control, including the availability
of critical third party components and performance of
subcontractors in line with our expectations.
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, 2020, as filed with the SEC on February 24,
2021. 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.
About STMicroelectronics
At ST, we are 46,000 creators and makers of
semiconductor technologies mastering the semiconductor supply chain
with state-of-the-art manufacturing facilities. An independent
device manufacturer, we work with more than 100,000 customers and
thousands of partners to design and build products, solutions, and
ecosystems that address their challenges and opportunities, and the
need to support a more sustainable world. Our technologies enable
smarter mobility, more efficient power and energy management, and
the wide-scale deployment of the Internet of Things and 5G
technology. Further information can be found at www.st.com.
For further information, please contact:
INVESTOR RELATIONS:Céline BerthierGroup VP,
Investor RelationsTel: +41 22 929 58 12celine.berthier@st.com
MEDIA RELATIONS:Alexis BretonCorporate External
CommunicationsTel: + 33 6 59 16 79 08alexis.breton@st.com
STMicroelectronics N.V. |
|
|
|
CONSOLIDATED STATEMENTS OF INCOME |
|
|
|
(in millions of U.S. dollars, except per share data
($)) |
|
|
|
|
|
|
|
|
Three months ended |
|
|
July 3, |
June 27, |
|
|
2021 |
2020 |
|
|
(Unaudited) |
(Unaudited) |
|
|
|
|
|
Net sales |
2,985 |
2,084 |
|
Other revenues |
7 |
3 |
|
NET
REVENUES |
2,992 |
2,087 |
|
Cost of sales |
(1,780) |
(1,357) |
|
GROSS
PROFIT |
1,212 |
730 |
|
Selling, general and
administrative |
(323) |
(259) |
|
Research and
development |
(444) |
(373) |
|
Other income and
expenses, net |
42 |
12 |
|
Impairment,
restructuring charges and other related closure costs |
2 |
(4) |
|
Total operating
expenses |
(723) |
(624) |
|
OPERATING
INCOME |
489 |
106 |
|
Interest expense,
net |
(8) |
(4) |
|
Other components of
pension benefit costs |
(3) |
(3) |
|
INCOME BEFORE
INCOME TAXES AND NONCONTROLLING INTEREST |
478 |
99 |
|
Income tax expense |
(65) |
(8) |
|
NET
INCOME |
413 |
91 |
|
Net income attributable
to noncontrolling interest |
(1) |
(1) |
|
NET INCOME
ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS |
412 |
90 |
|
|
|
|
|
EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY
STOCKHOLDERS |
0.46 |
0.10 |
|
EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY
STOCKHOLDERS |
0.44 |
0.10 |
|
|
|
|
|
NUMBER OF WEIGHTED AVERAGE SHARES USED IN CALCULATING
DILUTED EPS |
927.4 |
911.1 |
|
|
|
|
|
STMicroelectronics N.V. |
|
|
|
CONSOLIDATED STATEMENTS OF INCOME |
|
|
|
(in millions of U.S. dollars, except per share data
($)) |
|
|
|
|
|
|
|
|
Six months ended |
|
|
July 3, |
June 27, |
|
|
2021 |
2020 |
|
|
(Unaudited) |
(Unaudited) |
|
|
|
|
|
Net sales |
5,995 |
4,312 |
|
Other revenues |
13 |
6 |
|
NET REVENUES |
6,008 |
4,318 |
|
Cost of sales |
(3,621) |
(2,743) |
|
GROSS PROFIT |
2,387 |
1,575 |
|
Selling, general and administrative |
(648) |
(529) |
|
Research and development |
(888) |
(748) |
|
Other income and expenses, net |
76 |
48 |
|
Impairment, restructuring charges and other related closure
costs |
2 |
(9) |
|
Total operating expenses |
(1,458) |
(1,238) |
|
OPERATING INCOME |
929 |
337 |
|
Interest expense, net |
(16) |
(3) |
|
Other components of pension benefit costs |
(5) |
(6) |
|
Gain (loss) on financial instruments, net |
2 |
- |
|
INCOME BEFORE INCOME TAXES AND NONCONTROLLING
INTEREST |
910 |
328 |
|
Income tax expense |
(131) |
(47) |
|
NET INCOME |
779 |
281 |
|
Net (income) loss attributable to noncontrolling interest |
(3) |
1 |
|
NET INCOME ATTRIBUTABLE TO PARENT COMPANY
STOCKHOLDERS |
776 |
282 |
|
|
|
|
|
EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY
STOCKHOLDERS |
0.86 |
0.32 |
|
EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY
STOCKHOLDERS |
0.84 |
0.31 |
|
|
|
|
|
NUMBER OF WEIGHTED AVERAGE SHARES USED IN CALCULATING
DILUTED EPS |
929.5 |
913.9 |
|
|
|
|
|
|
|
|
|
STMicroelectronics N.V. |
|
|
|
CONSOLIDATED BALANCE SHEETS |
|
|
|
As at |
July 3, |
April 3, |
December 31, |
In millions of U.S. dollars |
2021 |
2021 |
2020 |
|
(Unaudited) |
(Unaudited) |
(Audited) |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
3,749 |
3,454 |
3,006 |
Short-term deposits |
500 |
573 |
581 |
Marketable securities |
- |
132 |
133 |
Trade accounts receivable, net |
1,571 |
1,418 |
1,465 |
Inventories |
1,970 |
1,843 |
1,841 |
Other current assets |
650 |
550 |
584 |
Total current assets |
8,440 |
7,970 |
7,610 |
Goodwill |
322 |
320 |
330 |
Other intangible assets, net |
442 |
434 |
445 |
Property, plant and equipment, net |
5,037 |
4,743 |
4,596 |
Non-current deferred tax assets |
688 |
717 |
739 |
Long-term investments |
10 |
10 |
10 |
Other non-current assets |
576 |
784 |
724 |
|
7,075 |
7,008 |
6,844 |
Total assets |
15,515 |
14,978 |
14,454 |
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current liabilities: |
|
|
|
Short-term debt |
872 |
837 |
795 |
Trade accounts payable |
1,366 |
1,281 |
1,166 |
Other payables and accrued liabilities |
975 |
1,003 |
966 |
Dividends payable to stockholders |
168 |
4 |
42 |
Accrued income tax |
95 |
75 |
84 |
Total current liabilities |
3,476 |
3,200 |
3,053 |
Long-term debt |
2,296 |
2,137 |
1,826 |
Post-employment benefit obligations |
497 |
490 |
506 |
Long-term deferred tax liabilities |
57 |
74 |
75 |
Other long-term liabilities |
473 |
461 |
488 |
|
3,323 |
3,162 |
2,895 |
Total liabilities |
6,799 |
6,362 |
5,948 |
Commitment and contingencies |
|
|
|
Equity |
|
|
|
Parent company stockholders' equity |
|
|
|
Common stock (preferred stock: 540,000,000 shares authorized, not
issued; common stock: Euro 1.04 par value, 1,200,000,000 shares
authorized, 911,264,420 shares issued, 903,271,713 shares
outstanding) |
1,157 |
1,157 |
1,157 |
Additional Paid-in Capital |
3,174 |
3,127 |
3,062 |
Retained earnings |
4,053 |
3,963 |
3,599 |
Accumulated other comprehensive income |
571 |
559 |
723 |
Treasury stock |
(300) |
(249) |
(93) |
Total parent company stockholders' equity |
8,655 |
8,557 |
8,448 |
Noncontrolling interest |
61 |
59 |
58 |
Total equity |
8,716 |
8,616 |
8,506 |
Total liabilities and equity |
15,515 |
14,978 |
14,454 |
|
|
|
|
|
|
|
|
STMicroelectronics N.V. |
|
|
|
|
|
|
|
SELECTED CASH FLOW DATA |
|
|
|
|
|
|
|
Cash Flow Data (in US$ millions) |
Q2 2021 |
Q1 2021 |
Q2 2020 |
|
|
|
|
Net Cash from operating activities |
602 |
682 |
387 |
Net Cash used in investing activities |
(272) |
(413) |
(509) |
Net Cash from (used in) financing activities |
(35) |
182 |
(117) |
Net Cash increase (decrease) |
295 |
448 |
(238) |
|
|
|
|
Selected Cash Flow Data (in US$ millions) |
Q2 2021 |
Q1 2021 |
Q2 2020 |
|
|
|
|
Depreciation & amortization |
258 |
256 |
223 |
Net payment for Capital expenditures |
(438) |
(405) |
(312) |
Dividends paid to stockholders |
(52) |
(38) |
(37) |
Change in inventories, net |
(122) |
(32) |
(175) |
|
|
|
|
AppendixSTMicroelectronicsSupplemental
Financial Information
|
Q2 2021 |
Q1 2021 |
Q4 2020 |
Q3 2020 |
Q2 2020 |
Net Revenues By Market Channel (%) |
|
|
|
|
|
Total OEM |
64% |
67% |
74% |
74% |
66% |
Distribution |
36% |
33% |
26% |
26% |
34% |
|
|
|
|
|
|
€/$ Effective Rate |
1.19 |
1.19 |
1.16 |
1.13 |
1.10 |
|
|
|
|
|
|
Product Group Data (US$ m) |
|
|
|
|
|
Automotive & Discrete Group (ADG) |
|
|
|
|
|
- Net Revenues |
1,077 |
1,043 |
953 |
851 |
727 |
- Operating Income |
102 |
85 |
94 |
49 |
16 |
Analog, MEMS & Sensors Group (AMS) |
|
|
|
|
|
- Net Revenues |
1,013 |
1,083 |
1,419 |
997 |
624 |
- Operating Income |
189 |
187 |
402 |
175 |
56 |
Microcontrollers & Digital ICs Group
(MDG) |
|
|
|
|
|
- Net Revenues |
897 |
886 |
859 |
815 |
733 |
- Operating Income |
206 |
172 |
174 |
142 |
117 |
Others (a) |
|
|
|
|
|
- Net Revenues |
5 |
4 |
4 |
3 |
3 |
- Operating Income (Loss) |
(8) |
(4) |
(13) |
(37) |
(83) |
Total |
|
|
|
|
|
- Net Revenues |
2,992 |
3,016 |
3,235 |
2,666 |
2,087 |
- Operating Income |
489 |
440 |
657 |
329 |
106 |
- Net revenues of Others include revenues from sales assembly
services and other revenues. Operating income (loss) of Others
includes items such as unused capacity charges, including reduced
manufacturing activity due to COVID-19, impairment, restructuring
charges and other related closure costs, management reorganization
costs, phase out and start-up costs of certain manufacturing
facilities, 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 other products. Others includes:
|
(US$ m) |
Q2 2021 |
Q1 2021 |
Q4 2020 |
Q3 2020 |
Q2 2020 |
Unused Capacity Charges |
- |
2 |
17 |
38 |
64 |
Impairment & Restructuring Charges |
(2) |
- |
(1) |
2 |
4 |
(Appendix –
continued)STMicroelectronicsSupplemental
Non-U.S. GAAP Financial InformationU. S. GAAP –
Non-U.S. GAAP Reconciliation
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.
The Company believes that these non-U.S. GAAP
financial measures provide useful information for investors and
management because they offer, when read in conjunction with the
Company’s U.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) to facilitate a comparison of the Company’s results of
operations against investor and analyst financial models and
valuations, which may exclude these items.
Net Financial Position
(non-U.S. GAAP measure)
Net Financial Position, a non-U.S. GAAP measure,
represents the difference between our total liquidity and our total
financial debt. Our total liquidity includes cash and cash
equivalents, restricted cash, short-term deposits, and marketable
securities, and our total financial debt includes short-term debt
and long-term debt, as represented in our Consolidated Balance
Sheets.
We believe our Net Financial Position provides
useful information for investors and management because it gives
evidence of our global position either in terms of net indebtedness
or net cash by measuring our capital resources based on cash and
cash equivalents, restricted cash, short-term deposits and
marketable securities and the total level of our financial
indebtedness. Our definition of Net Financial Position may differ
from definitions used by other companies and therefore
comparability may be limited.
(US$ m) |
Jul 3 2021 |
Apr 3 2021 |
Dec 31 2020 |
Sep 26 2020 |
Jun 27 2020 |
Cash and cash equivalents |
3,749 |
3,454 |
3,006 |
2,714 |
1,800 |
Short term deposits |
500 |
573 |
581 |
679 |
687 |
Marketable securities |
- |
132 |
133 |
134 |
134 |
Total liquidity |
4,249 |
4,159 |
3,720 |
3,527 |
2,621 |
Short-term debt |
(872) |
(837) |
(795) |
(983)(2) |
(879)(1) |
Long-term debt(3) |
(2,296) |
(2,137) |
(1,826) |
(1,882) |
(1,172) |
Total financial debt |
(3,168) |
(2,974) |
(2,621) |
(2,865) |
(2,051) |
Net Financial Position |
1,081 |
1,185 |
1,099 |
662 |
570 |
(1) 2022 Tranche A of the convertible bond issued in 2017 was
reclassified to short-term debt in line with contractual terms.(2)
2024 Tranche B of the convertible bond issued in 2017 was
reclassified to short-term debt in line with contractual terms.(3)
Long-term debt contains standard conditions but does not impose
minimum financial ratios. Also, committed credit facilities for
$0.8 billion equivalent, are currently undrawn.
(Appendix –
continued)STMicroelectronics
Free Cash Flow
(non-U.S. GAAP measure)
Free Cash Flow, which is a non-U.S. GAAP
measure, is defined as (i) net cash from operating activities plus
(ii) net cash used in investing activities, excluding payment for
purchases of (and proceeds from matured) marketable securities and
net investment in short-term deposits, which are considered as
temporary financial investments. The result of this definition is
ultimately net cash from operating activities plus payment for
purchase (and proceeds from sale) of tangible, intangible and
financial assets and net cash paid for business acquisitions.
We believe Free Cash Flow provides useful
information for investors and management because it measures our
capacity to generate cash from our operating and investing
activities to sustain our operations. Free Cash Flow does not
represent total cash flow since it does not include the cash flows
generated by or used in financing activities.
Free Cash Flow reconciles with the total cash
flow and the net cash increase (decrease) by including the payment
for purchases of (and proceeds from matured) marketable securities
and net investment in short-term deposits, the net cash from (used
in) financing activities and the effect of changes in exchange
rates. Our definition of Free Cash Flow may differ from definitions
used by other companies.
(US$ m) |
Q2 2021 |
Q1 2021 |
Q4 2020 |
Q3 2020 |
Q2 2020 |
Net cash from operating activities |
602 |
682 |
922 |
385 |
387 |
Net cash used in investing activities |
(272) |
(413) |
(312) |
(400) |
(509) |
Payment for purchase of (and proceeds from matured) marketable
securities and net investment in short-term deposits |
(205) |
(8) |
(98) |
(10) |
150 |
Free Cash Flow |
125 |
261 |
512 |
(25) |
28 |
- STMicroelectronics Q2 21 results
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