|
·
|
Operating and Financial Review and Prospects;
|
|
·
|
Unaudited Interim Consolidated Statements of Income, Statements of Comprehensive Income, Balance Sheets, Statements of Cash Flow, and Statements of Equity and related Notes for the three months and six months ended June 27, 2015; and
|
|
·
|
Certifications pursuant to Sections 302 (Exhibits 12.1 and 12.2) and 906 (Exhibit 13.1) of the Sarbanes-Oxley Act of 2002, submitted to the Commission on a voluntary basis.
|
|
·
|
Critical Accounting Policies using Significant Estimates.
|
|
·
|
Business Overview, a discussion of our business and overall analysis of financial and other relevant highlights of the three months and six months ended June 27, 2015 designed to provide context for the other sections of the MD&A, including our expectations for selected financial items for the third quarter of 2015.
|
|
·
|
Other Developments in the second quarter 2015.
|
|
·
|
Results of Operations, containing a year-over-year and sequential analysis of our financial results for the three months and six months ended June 27, 2015, as well as segment information.
|
|
·
|
Legal Proceedings.
|
|
·
|
Discussion of the impact of changes in exchange rates, interest rates and equity prices on our activity and financial results.
|
|
·
|
Liquidity and Capital Resources, presenting an analysis of changes in our balance sheets and cash flows, and discussing our financial condition and potential sources of liquidity.
|
|
·
|
Impact of Recently Issued U.S. Accounting Standards.
|
|
·
|
Backlog and Customers, discussing the level of backlog and sales to our key customers.
|
|
·
|
Disclosure Controls and Procedures.
|
|
·
|
Cautionary Note Regarding Forward-Looking Statements.
|
Three Months Ended
|
% Variation
|
|||||||||||||||||||
June 27,
2015
|
March 28,
2015
|
June 28,
2014
|
Sequential
|
Year-Over-Year
|
||||||||||||||||
(Unaudited, in millions, except per share amounts)
|
||||||||||||||||||||
Net revenues
|
$ | 1,760 | $ | 1,705 | $ | 1,864 | 3.2 | % | (5.6 | )% | ||||||||||
Gross profit
|
595 | 566 | 634 | 5.1 | (6.3 | ) | ||||||||||||||
Gross margin as percentage of net revenues.
|
33.8 | % | 33.2 | % | 34.0 | % | - | - | ||||||||||||
Operating income (loss)
|
12 | (19 | ) | 98 | - | - | ||||||||||||||
Net income (loss) attributable to parent company
|
35 | (22 | ) | 38 | - | - | ||||||||||||||
Earnings per share
|
$ | 0.04 | $ | (0.03 | ) | $ | 0.04 | - | - |
|
·
|
The adoption of our statutory Annual Accounts for the year ended December 31, 2014, prepared in accordance with International Financial Reporting Standards (IFRS) as adopted in the European Union;
|
|
·
|
The distribution of a cash dividend of US$0.40 per outstanding share of the common stock, to be distributed in quarterly installments of US$0.10 in each of the second, third and fourth quarters of 2015 and first quarter of 2016 to shareholders of record in the month of each quarterly payment;
|
|
·
|
The appointment of Mr. Nicolas Dufourcq as a new member of the Supervisory Board, for a three-year term expiring at the 2018 AGM, in replacement of Mr. Jean d’Arthuys whose mandate terminated as of the 2015 AGM;
|
|
·
|
The reappointment of Ms. Martine Verluyten as a member of the Supervisory Board, for a three-year term expiring at the 2018 AGM; and
|
|
·
|
The appointment of Ernst & Young Accountants LLP as the external auditor for the 2016-2019 financial years, as required by the new Dutch law which currently imposes an eight-year audit firm rotation period.
|
|
·
|
Sense & Power and Automotive Products (SP&A), including the following product lines:
|
|
o
|
Automotive (APG);
|
|
o
|
Industrial & Power Discrete (IPD);
|
|
o
|
Analog & MEMS (AMS); and
|
|
o
|
Other SP&A;
|
|
·
|
Embedded Processing Solutions (EPS), comprised of the following product lines:
|
|
o
|
Digital Product Group (DPG);
|
|
o
|
Microcontrollers, Memory & Secure MCU (MMS); and
|
|
o
|
Other EPS.
|
Three Months Ended
(unaudited)
|
||||||||||||||||||||||||
June 27, 2015
|
March 28, 2015
|
June 28, 2014
|
||||||||||||||||||||||
$ million
|
% of net revenues
|
$ million
|
% of net revenues
|
$ million
|
% of net revenues
|
|||||||||||||||||||
Net sales
|
$ | 1,754 | 99.7 | % | $ | 1,693 | 99.3 | % | $ | 1,858 | 99.7 | % | ||||||||||||
Other revenues
|
6 | 0.3 | 12 | 0.7 | 6 | 0.3 | ||||||||||||||||||
Net revenues
|
1,760 | 100 | 1,705 | 100.0 | 1,864 | 100 | ||||||||||||||||||
Cost of sales
|
(1,165 | ) | (66.2 | ) | (1,139 | ) | (66.8 | ) | (1,230 | ) | (66.0 | ) | ||||||||||||
Gross profit
|
595 | 33.8 | 566 | 33.2 | 634 | 34 | ||||||||||||||||||
Selling, general and administrative
|
(226 | ) | (12.9 | ) | (222 | ) | (13.0 | ) | (237 | ) | (12.7 | ) | ||||||||||||
Research and development
|
(373 | ) | (21.2 | ) | (369 | ) | (21.7 | ) | (389 | ) | (20.9 | ) | ||||||||||||
Other income and expenses, net
|
37 | 2.1 | 35 | 2.1 | 110 | 5.9 | ||||||||||||||||||
Impairment, restructuring charges and other related closure costs
|
(21 | ) | (1.1 | ) | (29 | ) | (1.7 | ) | (20 | ) | (1.1 | ) | ||||||||||||
Operating income (loss)
|
12 | 0.7 | (19 | ) | (1.1 | ) | 98 | 5.2 | ||||||||||||||||
Interest expense, net
|
(6 | (0.3 | ) | (5 | ) | (0.3 | ) | (3 | ) | (0.1 | ) | |||||||||||||
Income (loss) on equity‑method investments
|
(1 | ) | (0.1 | ) | 4 | 0.2 | (52 | ) | (2.8 | ) | ||||||||||||||
Income (loss) before income taxes and noncontrolling interest
|
5 | 0.3 | (20 | ) | (1.2 | ) | 43 | 2.3 | ||||||||||||||||
Income tax benefit (expense)
|
31 | 1.7 | (1 | ) | (0.1 | ) | (7 | ) | (0.4 | ) | ||||||||||||||
Net income (loss)
|
36 | 2.0 | (21 | ) | (1.3 | ) | 36 | 1.9 | ||||||||||||||||
Net loss (income) attributable to noncontrolling interest
|
(1 | ) | - | (1 | ) | - | 2 | 0.1 | ||||||||||||||||
Net income (loss) attributable to parent company
|
$ | 35 | 2.0 | % | $ | (22 | ) | (1.3 | )% | $ | 38 | 2.0 | % | |||||||||||
|
Three Months Ended
|
% Variation
|
||||||||||||||||||
|
June 27, 2015
|
March 28, 2015
|
June 28, 2014
|
Sequential
|
Year‑Over‑Year
|
|||||||||||||||
(Unaudited, in millions)
|
||||||||||||||||||||
Net sales
|
$ | 1,754 | $ | 1,693 | $ | 1,858 | 3.6 | % | (5.6 | )% | ||||||||||
Other revenues
|
6 | 12 | 6 | (52.8 | ) | (3.3 | ) | |||||||||||||
Net revenues
|
$ | 1,760 | $ | 1,705 | $ | 1,864 | 3.2 | % | (5.6 | )% |
Three Months Ended
|
% Variation
|
|||||||||||||||||||
|
June 27, 2015
|
March 28, 2015
|
June 28, 2014
|
Sequential
|
Year-Over-Year
|
|||||||||||||||
(Unaudited, in millions)
|
||||||||||||||||||||
Automotive (APG)
|
$ | 438 | $ | 434 | $ | 463 | 1.0 | % | (5.4 | )% | ||||||||||
Industrial & Power Discrete (IPD)
|
448 | 430 | 475 | 4.2 | (5.7 | ) | ||||||||||||||
Analog & MEMS (AMS)
|
273 | 255 | 264 | 7.0 | 3.4 | |||||||||||||||
Sense & Power and Automotive Products (SP&A)
|
1,159 | 1,119 | 1,202 | 3.6 | (3.6 | ) | ||||||||||||||
Digital Product Group (DPG)
|
207 | 207 | 260 | (0.1 | ) | (20.1 | ) | |||||||||||||
Microcontrollers, Memory & Secure MCU (MMS)
|
388 | 374 | 396 | 3.8 | (2.0 | ) | ||||||||||||||
Other EPS
|
- | - | 1 | - | (100.0 | ) | ||||||||||||||
Embedded Processing Solutions (EPS)
|
595 | 581 | 657 | 2.4 | (9.3 | ) | ||||||||||||||
Others
|
6 | 5 | 5 | 1.9 | (1.8 | ) | ||||||||||||||
Total consolidated net revenues
|
$ | 1,760 | $ | 1,705 | $ | 1,864 | 3.2 | % | (5.6 | )% |
Three Months Ended
|
||||||||||||
June 27, 2015
|
March 28, 2015
|
June 28, 2014
|
||||||||||
(Unaudited, in %)
|
||||||||||||
OEM
|
67 | % | 70 | % | 69 | % | ||||||
Distribution
|
33 | 30 | 31 | |||||||||
Total
|
100 | % | 100 | % | 100 | % |
(1)
|
Original Equipment Manufacturers (“OEM”) are the end-customers to which we provide direct marketing application engineering support, while Distribution customers refers to the distributors and representatives that we engage to distribute our products around the world.
|
Three Months Ended
|
% Variation
|
|||||||||||||||||||
|
June 27, 2015
|
March 28, 2015
|
June 28, 2014
|
Sequential
|
Year-Over-Year
|
|||||||||||||||
(Unaudited, in millions)
|
||||||||||||||||||||
EMEA
|
$ | 464 | $ | 451 | $ | 508 | 2.9 | % | (8.6 | )% | ||||||||||
Americas
|
280 | 267 | 276 | 4.6 | 1.2 | |||||||||||||||
Greater China-South Asia
|
786 | 773 | 820 | 1.6 | (4.1 | ) | ||||||||||||||
Japan-Korea
|
230 | 214 | 260 | 7.5 | (11.7 | ) | ||||||||||||||
Total
|
$ | 1,760 | $ | 1,705 | $ | 1,864 | 3.2 | % | (5.6 | )% |
(1)
|
Net revenues by location of shipment are classified by location of customer invoiced or reclassified by shipment destination in line with customer demand. For example, products ordered by U.S.-based companies to be invoiced to Greater China-South Asia affiliates are classified as Greater China-South Asia revenues. Furthermore, the comparison among the different periods may be affected by shifts in shipment from one location to another, as requested by our customers.
|
Three Months Ended
|
Variation
|
|||||||||||||||||||
|
June 27, 2015
|
March 28, 2015
|
June 28, 2014
|
Sequential
|
Year‑Over‑Year
|
|||||||||||||||
(Unaudited, in millions)
|
||||||||||||||||||||
Cost of sales
|
$ | (1,165 | ) | $ | (1,139 | ) | $ | (1,230 | ) | (2.2 | )% | 5.2 | % | |||||||
Gross profit
|
595 | 566 | 634 | 5.1 | % | (6.3 | )% | |||||||||||||
Gross margin (as percentage of net revenues)
|
33.8 | % | 33.2 | % | 34.0 | % |
+60bps
|
-20bps
|
Three Months Ended
|
Variation
|
|||||||||||||||||||
|
June 27, 2015
|
March 28, 2015
|
June 28, 2014
|
Sequential
|
Year‑Over‑Year
|
|||||||||||||||
(Unaudited, in millions)
|
||||||||||||||||||||
Selling, general and administrative expenses
|
$ | (226 | ) | $ | (222 | ) | $ | (237 | ) | (2.3 | )% | 4.60 | % | |||||||
Research and development expenses
|
$ | (373 | ) | $ | (369 | ) | $ | (389 | ) | (0.9 | )% | 4.30 | % | |||||||
As percentage of net revenues
|
(34.1 | )% | (34.6 | )% | (33.6 | )% |
+50bps
|
-50bps
|
|
Three Months Ended
|
|||||||||||
|
June 27, 2015
|
March 28, 2015
|
June 28, 2014
|
|||||||||
(Unaudited, in millions)
|
||||||||||||
Research and development funding
|
$ | 35 | $ | 36 | $ | 130 | ||||||
Phase-out and start-up costs
|
(1 | ) | (1 | ) | (3 | ) | ||||||
Exchange gain (loss), net
|
2 | (3 | ) | 2 | ||||||||
Patent costs
|
- | - | (16 | ) | ||||||||
Gain on sale of businesses and non‑current assets
|
1 | - | 1 | |||||||||
Other, net
|
- | 3 | (4 | ) | ||||||||
Other income and expenses, net
|
$ | 37 | $ | 35 | $ | 110 | ||||||
As percentage of net revenues
|
2.1 | % | 2.1 | % | 5.9 | % |
|
Three Months Ended
|
|||||||||||
|
June 27, 2015
|
March 28, 2015
|
June 28, 2014
|
|||||||||
(Unaudited, in millions)
|
||||||||||||
Impairment, restructuring charges and other related closure costs
|
$ | (21 | ) | $ | (29 | ) | $ | (20 | ) |
|
Three Months Ended
|
|||||||||||
|
June 27, 2015
|
March 28, 2015
|
June 28, 2014
|
|||||||||
(Unaudited, in millions)
|
||||||||||||
Operating income (loss)
|
$ | 12 | $ | (19 | ) | $ | 98 | |||||
In percentage of net revenues
|
0.7 | % | (1.1 | )% | 5.2 | % |
|
Three Months Ended (unaudited)
|
|||||||||||||||||||||||
June 27, 2015
|
March 28, 2015
|
June 28, 2014
|
||||||||||||||||||||||
$ million
|
% of net
revenues
|
$ million
|
% of net
revenues
|
$ million
|
% of net
revenues
|
|||||||||||||||||||
Sense & Power and Automotive Products (SP&A)
|
$ | 76 | 6.6 | % | $ | 72 | 6.4 | % | $ | 125 | 10.4 | % | ||||||||||||
Embedded Processing Solutions (EPS)
|
(42 | ) | (7 | ) | (64 | ) | (11.1 | ) | 10 | 1.5 | ||||||||||||||
Total operating income (loss) of product segments (2)
|
34 | 2.0 | 8 | 0.5 | 135 | 7.2 | ||||||||||||||||||
Others(1) (2)
|
(22 | ) | - | (27 | ) | - | (37 | ) | - | |||||||||||||||
Total consolidated operating income (loss)
|
$ | 12 | 0.7 | % | $ | (19 | ) | (1.1 | )% | $ | 98 | 5.2 | % |
(1)
|
Operating loss of “Others” includes items such as impairment, restructuring charges and other related closure costs, phase-out and start-up costs of certain manufacturing facilities, certain one-time corporate items and other unallocated expenses such as: strategic or special R&D programs, certain corporate-level operating expenses and other costs that are not allocated to the product segments, as well as operating earnings of the Subsystems and Other Products Group.
|
(2)
|
The segment operating results of the prior periods have been restated following our internal policy on unallocated costs being amended as of Q1 2015 to allocate unused capacity charges to our product lines instead of allocating it to “Others”. In 2015, for certain technologies, wafer costs are charged to product groups based on market price.
|
Three Months Ended
|
||||||||||||
|
June 27, 2015
|
March 28, 2015
|
June 28, 2014
|
|||||||||
(Unaudited, in millions)
|
||||||||||||
Total operating income of product segments
|
$ | 34 | $ | 8 | $ | 135 | ||||||
Impairment, restructuring charges and other related closure costs
|
(21 | ) | (29 | ) | (20 | ) | ||||||
Strategic and other research and development programs
|
(2 | ) | (1 | ) | (2 | ) | ||||||
Phase-out and start-up costs
|
(1 | ) | (1 | ) | (3 | ) | ||||||
Other non-allocated provisions(1)
|
2 | 4 | (12 | ) | ||||||||
Total operating loss Others
|
(22 | ) | (27 | ) | (37 | ) | ||||||
Total consolidated operating income (loss)
|
$ | 12 | $ | (19 | ) | $ | 98 |
(1)
|
Includes unallocated income and expenses such as certain corporate-level operating expenses and other costs/income that are not allocated to the product segments.
|
|
Three Months Ended
|
|||||||||||
|
June 27, 2015
|
March 28, 2015
|
June 28, 2014
|
|||||||||
(Unaudited, in millions)
|
||||||||||||
Interest expense, net
|
$ | (6 | ) | $ | (5 | ) | $ | (3 | ) |
|
Three Months Ended
|
|||||||||||
|
June 27, 2015
|
March 28, 2015
|
June 28, 2014
|
|||||||||
(Unaudited, in millions)
|
||||||||||||
Income (loss) on equity-method investments
|
$ | (1 | ) | $ | 4 | $ | (52 | ) |
|
Three Months Ended
|
|||||||||||
|
June 27, 2015
|
March 28, 2015
|
June 28, 2014
|
|||||||||
(Unaudited, in millions)
|
||||||||||||
Income tax benefit (expense)
|
$ | 31 | $ | (1 | ) | $ | (7 | ) |
Three Months Ended
|
||||||||||||
|
June 27, 2015
|
March 28, 2015
|
June 28, 2014
|
|||||||||
(Unaudited, in millions)
|
||||||||||||
Net loss (income) attributable to noncontrolling interest
|
$ | (1 | ) | $ | (1 | ) | $ | 2 |
|
Three Months Ended
|
|||||||||||
|
June 27, 2015
|
March 28, 2015
|
June 28, 2014
|
|||||||||
(Unaudited, in millions)
|
||||||||||||
Net income (loss) attributable to parent company
|
$ | 35 | $ | (22 | ) | $ | 38 | |||||
As percentage of net revenues
|
2.0 | % | (1.3 | )% | 2.0 | % |
Six Months Ended
|
Six Months Ended
|
|||||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
June 27, 2015
|
June 27, 2015
|
June 28, 2014
|
June 28, 2014
|
|||||||||||||
$ million
|
% of net
revenues
|
$ million
|
% of net
revenues
|
|||||||||||||
Net sales
|
$ | 3,447 | 99.5 | % | $ | 3,658 | 99.2 | % | ||||||||
Other revenues
|
18 | 0.5 | 31 | 0.8 | ||||||||||||
Net revenues
|
3,465 | 100.0 | 3,689 | 100.0 | ||||||||||||
Cost of sales
|
(2,305 | ) | (66.5 | ) | (2,456 | ) | (66.6 | ) | ||||||||
Gross profit
|
1,160 | 33.5 | 1,233 | 33.4 | ||||||||||||
Selling, general and administrative
|
(448 | ) | (12.9 | ) | (465 | ) | (12.6 | ) | ||||||||
Research and development
|
(742 | (21.4 | (768 | ) | (20.8 | ) | ||||||||||
Other income and expenses, net
|
73 | 2.1 | 125 | 3.4 | ||||||||||||
Impairment, restructuring charges and other related closure costs
|
(50 | ) | (1.5 | ) | (32 | ) | (0.9 | ) | ||||||||
Operating income (loss)
|
(7 | ) | (0.2 | ) | 93 | 2.5 | ||||||||||
Interest expense, net
|
(11 | ) | (0.3 | ) | (4 | ) | (0.1 | ) | ||||||||
Income (loss) on equity-method investments
|
3 | 0.1 | (60 | ) | (1.6 | ) | ||||||||||
Gain on financial instruments, net
|
- | - | 1 | - | ||||||||||||
Income (loss) before income taxes and noncontrolling interest
|
(15 | ) | (0.4 | ) | 30 | 0.8 | ||||||||||
Income tax benefit (expense)
|
30 | 0.8 | (16 | ) | (0.4 | ) | ||||||||||
Net income
|
15 | 0.4 | 14 | 0.4 | ||||||||||||
Net loss (income) attributable to noncontrolling interest
|
(3 | ) | - | - | - | |||||||||||
Net income attributable to parent company
|
$ | 12 | 0.4 | % | $ | 14 | 0.4 | % |
Six Months Ended
|
||||||||||||
June 27, 2015
|
June 28, 2014
|
% Variation
|
||||||||||
(Unaudited, in millions)
|
||||||||||||
Net sales
|
$ | 3,447 | $ | 3,658 | (5.8 | )% | ||||||
Other revenues
|
18 | 31 | (39.7 | ) | ||||||||
Net revenues
|
$ | 3,465 | $ | 3,689 | (6.1 | )% |
Six Months Ended
|
||||||||||||
June 27, 2015
|
June 28, 2014
|
% Variation
|
||||||||||
(Unaudited, in millions)
|
||||||||||||
Automotive (APG)
|
$ | 872 | $ | 907 | (3.9 | )% | ||||||
Industrial & Power Discrete (IPD)
|
878 | 917 | (4.3 | ) | ||||||||
Analog & MEMS (AMS)
|
528 | 568 | (7.1 | ) | ||||||||
Sense & Power and Automotive Products (SP&A)
|
2,278 | 2,392 | (4.8 | ) | ||||||||
Digital Products Group (DPG)
|
415 | 542 | (23.4 | ) | ||||||||
Microcontrollers, Memory & Secure MCU (MMS)
|
761 | 742 | 2.7 | |||||||||
Other EPS
|
- | 1 | - | |||||||||
Embedded Processing Solutions (EPS)
|
1,176 | 1,285 | (8.4 | ) | ||||||||
Others
|
11 | 12 | (10.8 | ) | ||||||||
Total consolidated net revenues
|
$ | 3,465 | $ | 3,689 | (6.1 | )% |
Six Months Ended
|
||||||||
June 27, 2015
|
June 28, 2014
|
|||||||
(Unaudited, in %)
|
||||||||
OEM
|
68 | % | 69 | % | ||||
Distribution
|
32 | 31 | ||||||
Total
|
100 | % | 100 | % |
(1)
|
Original Equipment Manufacturers (“OEM”) are the end-customers to which we provide direct marketing application engineering support, while Distribution customers refers to the distributors and representatives that we engage to distribute our products around the world.
|
Six Months Ended
|
||||||||||||
June 27, 2015
|
June 28, 2014
|
% Variation
|
||||||||||
(Unaudited, in millions)
|
||||||||||||
EMEA
|
$ | 914 | $ | 976 | (6.3 | )% | ||||||
Americas
|
547 | 555 | (1.3 | ) | ||||||||
Greater China-South Asia
|
1,560 | 1,623 | (3.9 | ) | ||||||||
Japan-Korea
|
444 | 535 | (17.1 | ) | ||||||||
Total
|
$ | 3,465 | $ | 3,689 | (6.1 | )% |
(1)
|
Net revenues by location of shipment are classified by location of customer invoiced or reclassified by shipment destination in line with customer demand. For example, products ordered by U.S.-based companies to be invoiced to Greater China-South Asia affiliates are classified as Greater China-South Asia revenues. Furthermore, the comparison among the different periods may be affected by shifts in shipment from one location to another, as requested by our customers.
|
|
Six Months Ended
|
|||||||||||
|
June 27, 2015
|
June 28, 2014
|
% Variation
|
|||||||||
(Unaudited, in millions)
|
||||||||||||
Cost of sales
|
$ | (2,305 | ) | $ | (2,456 | ) | 6.2 | % | ||||
Gross profit
|
1,160 | 1,233 | (5.9 | ) | ||||||||
Gross margin (as percentage of net revenues)
|
33.5 | % | 33.4 | % |
+10 bps
|
Six Months Ended
|
|
|||||||||||
June 27, 2015
|
June 28, 2014
|
% Variation
|
||||||||||
(Unaudited, in millions)
|
||||||||||||
Selling, general and administrative expenses
|
$ | (448 | ) | $ | (465 | ) | 3.6 | % | ||||
Research and development expenses
|
(742 | ) | (768 | ) | 3.3 | |||||||
As percentage of net revenues
|
34.3 | % | 33.4 | % |
+90 bps
|
Six Months Ended
|
||||||||
|
June 27, 2015
|
June 28, 2014
|
||||||
(Unaudited, in millions)
|
||||||||
Research and development funding
|
$ | 71 | $ | 152 | ||||
Phase-out and start-up costs
|
(2 | ) | (6 | ) | ||||
Exchange gain (loss), net
|
(1 | ) | 1 | |||||
Patent costs
|
- | (29 | ) | |||||
Gain on sale of businesses and non‑current assets
|
2 | 13 | ||||||
Other, net
|
3 | (6 | ) | |||||
Other income and expenses, net
|
$ | 73 | $ | 125 | ||||
As percentage of net revenues
|
2.1 | % | 3.4 | % |
Six Months Ended
|
||||||||
|
June 27, 2015
|
June 28, 2014
|
||||||
(Unaudited, in millions)
|
||||||||
Impairment, restructuring charges and other related closure costs
|
$ | (50 | ) | $ | (32 | ) |
Six Months Ended
|
||||||||
|
June 27, 2015
|
June 28, 2014
|
||||||
(Unaudited, in millions)
|
||||||||
Operating income (loss)
|
$ | (7 | ) | $ | 93 | |||
As percentage of net revenues
|
(0.2 | )% | 2.5 | % |
Six Months Ended (unaudited)
|
||||||||||||||||
June 27, 2015
|
June 28, 2014
|
|||||||||||||||
$ million
|
% of net revenues
|
$ million
|
% of net revenues
|
|||||||||||||
Sense & Power and Automotive Products (SP&A)
|
$ | 148 | 6.5 | % | $ | 227 | 9.5 | % | ||||||||
Embedded Processing Solutions (EPS)
|
(106 | ) | (9.0 | )% | (73 | ) | (5.6 | ) | ||||||||
Total operating income (loss) of product segments(2)
|
42 | 1.2 | % | 154 | 4.2 | % | ||||||||||
Others(1) (2)
|
(49 | ) | - | (61 | ) | - | ||||||||||
Total consolidated operating income (loss)
|
$ | (7 | ) | (0.2 | )% | $ | 93 | 2.5 | % |
(1)
|
Operating loss of “Others” includes items such as impairment, restructuring charges and other related closure costs, phase-out and start-up costs of certain manufacturing facilities, certain one-time corporate items and other unallocated expenses such as: strategic or special R&D programs, certain corporate-level operating expenses and other costs that are not allocated to the product segments, as well as operating earnings of the Subsystems and Other Products Group.
|
(2)
|
The segment operating results of the prior periods have been restated following our internal policy on unallocated costs being amended as of Q1 2015 to allocate unused capacity charges to our product lines instead of allocating it to “Others”.
|
Six Months Ended
|
||||||||
June 27, 2015
|
June 28, 2014
|
|||||||
(Unaudited, in millions)
|
||||||||
Total operating income (loss) of product segments
|
$ | 42 | $ | 154 | ||||
Impairment, restructuring charges and other related closure costs
|
(50 | ) | (32 | ) | ||||
Strategic and other research and development programs
|
(3 | ) | (3 | ) | ||||
Phase-out and start-up costs
|
(2 | ) | (6 | ) | ||||
Other non-allocated provisions(1)
|
6 | (20 | ) | |||||
Total operating loss Others
|
(49 | ) | (61 | ) | ||||
Total consolidated operating income (loss)
|
$ | (7 | ) | $ | 93 |
(1)
|
Includes unallocated income and expenses such as certain corporate-level operating expenses and other costs/income that are not allocated to the product segments.
|
Six Months Ended
|
||||||||
|
June 27, 2015
|
June 28, 2014
|
||||||
(Unaudited, in millions)
|
||||||||
Interest expense, net
|
$ | (11 | ) | $ | (4 | ) |
Six Months Ended
|
||||||||
June 27, 2015
|
June 28, 2014
|
|||||||
(Unaudited, in millions)
|
||||||||
Income (loss) on equity-method investments
|
$ | 3 | $ | (60 | ) |
Six Months Ended
|
||||||||
June 27, 2015
|
June 28, 2014
|
|||||||
(Unaudited, in millions)
|
||||||||
Income tax benefit (expense)
|
$ | 30 | $ | (16 | ) |
Six Months Ended
|
||||||||
June 27, 2015
|
June 28, 2014
|
|||||||
(Unaudited, in millions)
|
||||||||
Net loss (income) attributable to noncontrolling interest
|
$ | (3 | ) | $ | – |
Six Months Ended
|
||||||||
June 27, 2015
|
June 28, 2014
|
|||||||
(Unaudited, in millions)
|
||||||||
Net income attributable to parent company
|
$ | 12 | $ | 14 | ||||
As percentage of net revenues
|
0.4 | % | 0.4 | % |
Six Months Ended
|
||||||||
June 27, 2015
|
June 28, 2014
|
|||||||
(Unaudited, in millions)
|
||||||||
Net cash from operating activities
|
$ | 372 | $ | 123 | ||||
Net cash used in investing activities
|
(298 | ) | (258 | ) | ||||
Net cash used in financing activities
|
(196 | ) | (196 | ) | ||||
Effect of changes in exchange rates
|
(8 | ) | (3 | ) | ||||
Net cash decrease
|
$ | (130 | ) | $ | (334 | ) |
Three Months Ended
|
Six Months Ended
|
|||||||||||
June 27, 2015
|
June 27, 2015
|
June 28, 2014
|
||||||||||
(In millions)
|
(In millions)
|
|||||||||||
Net cash from operating activities
|
$ | 223 | $ | 372 | $ | 123 | ||||||
Net cash used in investing activities
|
(190 | ) | (298 | ) | (258 | ) | ||||||
Excluding:
|
||||||||||||
Proceeds from sale of marketable securities, change in short term deposits, restricted cash, net and net variation for JV deconsolidation
|
20 | 20 | (16 | ) | ||||||||
Payment for purchase and proceeds from sale of tangible and intangible assets (1)
|
(170 | ) | (278 | ) | (274 | ) | ||||||
Free Cash Flow (non U.S. GAAP measure)
|
$ | 53 | $ | 94 | $ | (151 | ) |
(1)
|
Reflects the total of the following line items reconciled with our Consolidated Statements of Cash Flows relating to the investing activities: Payment for purchase of tangible assets, Proceeds from sale of tangible assets, Payment for purchase of intangible assets, Payment for purchase of financial assets, Payment for disposal of equity investment, Proceeds from sale of financial assets, Proceeds received in sale of businesses.
|
|
As at
|
|||||||||||
|
June 27, 2015
|
December 31, 2014(1)
|
June 28, 2014
|
|||||||||
(Unaudited, in millions)
|
||||||||||||
Cash and cash equivalents
|
$ | 1,887 | $ | 2,017 | $ | 1,502 | ||||||
Restricted cash
|
20 | - | - | |||||||||
Marketable securities
|
334 | 334 | - | |||||||||
Short-term deposits
|
- | - | 51 | |||||||||
Total financial resources
|
2,241 | 2,351 | 1,553 | |||||||||
Short-term debt
|
(201 | ) | (202 | ) | (225 | ) | ||||||
Long‑term debt
|
(1,581 | ) | (1,599 | ) | (905 | ) | ||||||
Total financial debt
|
(1,782 | ) | (1,801 | ) | (1,130 | ) | ||||||
Net Financial Position
|
$ | 459 | $ | 550 | $ | 423 |
(1)
|
The December 31, 2014 net financial position was restated following the early adoption of ASU 2015-03, consisting in a balance sheet reclassification of debt issuance costs (now reported as deduction of issued debt and not as non-current assets).
|
Payments Due by Period
|
||||||||||||||||||||||||||||
Total
|
2015
|
2016
|
2017
|
2018
|
2019
|
Thereafter
|
||||||||||||||||||||||
(Unaudited, in millions)
|
||||||||||||||||||||||||||||
Long-term debt (including current portion)
|
$ | 1,888 | $ | 179 | $ | 191 | $ | 116 | $ | 115 | $ | 714 | $ | 573 |
|
·
|
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;
|
|
·
|
the loading and the manufacturing performance 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, 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, tsunamis, 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; and
|
|
·
|
availability and costs of raw materials, utilities, third-party manufacturing services, or other supplies required by our operations.
|
Pages
|
|
Consolidated Statements of Income for the Three and Six Months Ended June 27, 2015 and June 28, 2014 (unaudited)
|
F-1
|
Consolidated Statements of Comprehensive Income for Three and Six Months Ended June 27, 2015 and June 28, 2014 (unaudited)
|
F-3
|
Consolidated Balance Sheets as of June 27, 2015 (unaudited) and December 31, 2014 (audited)
|
F-5
|
Consolidated Statements of Cash Flows for the Six Months Ended June 27, 2015 and June 28, 2014 (unaudited)
|
F-6
|
Consolidated Statements of Equity (unaudited)
|
F-7
|
Notes to Interim Consolidated Financial Statements (unaudited)
|
F-8
|
STMicroelectronics N.V.
|
CONSOLIDATED STATEMENTS OF INCOME
|
Three months ended
|
||||||||
(Unaudited)
|
||||||||
June 27,
|
June 28,
|
|||||||
In million of U.S. dollars except per share amounts
|
2015
|
2014
|
||||||
Net sales
|
1,754 | 1,858 | ||||||
Other revenues
|
6 | 6 | ||||||
Net revenues
|
1,760 | 1,864 | ||||||
Cost of sales
|
(1,165 | ) | (1,230 | ) | ||||
Gross profit
|
595 | 634 | ||||||
Selling, general and administrative
|
(226 | ) | (237 | ) | ||||
Research and development
|
(373 | ) | (389 | ) | ||||
Other income and expenses, net
|
37 | 110 | ||||||
Impairment, restructuring charges and other related closure costs
|
(21 | ) | (20 | ) | ||||
Operating income
|
12 | 98 | ||||||
Interest expense, net
|
(6 | ) | (3 | ) | ||||
Loss on equity-method investments
|
(1 | ) | (52 | ) | ||||
Income before income taxes and noncontrolling interest
|
5 | 43 | ||||||
Income tax benefit (expense)
|
31 | (7 | ) | |||||
Net income
|
36 | 36 | ||||||
Net loss (income) attributable to noncontrolling interest
|
(1 | ) | 2 | |||||
Net income attributable to parent company
|
35 | 38 | ||||||
Earnings per share (Basic) attributable to parent company stockholders
|
0.04 | 0.04 | ||||||
Earnings per share (Diluted) attributable to parent company stockholders
|
0.04 | 0.04 |
STMicroelectronics N.V.
|
CONSOLIDATED STATEMENTS OF INCOME
|
Six months ended
|
||||||||
(Unaudited)
|
||||||||
June 27,
|
June 28,
|
|||||||
In million of U.S. dollars except per share amounts
|
2015
|
2014
|
||||||
Net sales
|
3,447 | 3,658 | ||||||
Other revenues
|
18 | 31 | ||||||
Net revenues
|
3,465 | 3,689 | ||||||
Cost of sales
|
(2,305 | ) | (2,456 | ) | ||||
Gross profit
|
1,160 | 1,233 | ||||||
Selling, general and administrative
|
(448 | ) | (465 | ) | ||||
Research and development
|
(742 | ) | (768 | ) | ||||
Other income and expenses, net
|
73 | 125 | ||||||
Impairment, restructuring charges and other related closure costs
|
(50 | ) | (32 | ) | ||||
Operating income (loss)
|
(7 | ) | 93 | |||||
Interest expense, net
|
(11 | ) | (4 | ) | ||||
Income (loss) on equity-method investments
|
3 | (60 | ) | |||||
Gain on financial instruments, net
|
- | 1 | ||||||
Income (loss) before income taxes and noncontrolling interest
|
(15 | ) | 30 | |||||
Income tax benefit (expense)
|
30 | (16 | ) | |||||
Net income
|
15 | 14 | ||||||
Net loss (income) attributable to noncontrolling interest
|
(3 | ) | - | |||||
Net income attributable to parent company
|
12 | 14 | ||||||
Earnings per share (Basic) attributable to parent company stockholders
|
0.01 | 0.02 | ||||||
Earnings per share (Diluted) attributable to parent company stockholders
|
0.01 | 0.02 |
STMicroelectronics N.V.
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
Three months ended
|
||||||||
(Unaudited)
|
||||||||
June 27,
|
June 28,
|
|||||||
In million of U.S. dollars
|
2015
|
2014
|
||||||
Net income
|
36 | 36 | ||||||
Other comprehensive income (loss), net of tax :
|
||||||||
Currency translation adjustments arising during the period
|
54 | (33 | ) | |||||
Foreign currency translation adjustments
|
54 | (33 | ) | |||||
Unrealized gains (losses) arising during the period
|
(4 | ) | - | |||||
Unrealized gains (losses) on securities
|
(4 | ) | - | |||||
Unrealized gains (losses) arising during the period
|
45 | (3 | ) | |||||
Less : reclassification adjustment for (income) losses included in net income
|
57 | (10 | ) | |||||
Unrealized gains (losses) on derivatives
|
102 | (13 | ) | |||||
Net gains (losses) arising during the period
|
2 | - | ||||||
Defined benefit pension plans
|
2 | - | ||||||
Other comprehensive income (loss), net of tax
|
154 | (46 | ) | |||||
Comprehensive income (loss)
|
190 | (10 | ) | |||||
Less : comprehensive income (loss) attributable to noncontrolling interest
|
1 | (1 | ) | |||||
Comprehensive income (loss) attributable to the company's stockholders
|
189 | (9 | ) |
STMicroelectronics N.V.
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
Six months ended
|
||||||||
(Unaudited)
|
||||||||
June 27,
|
June 28,
|
|||||||
In million of U.S. dollars
|
2015
|
2014
|
||||||
Net income
|
15 | 14 | ||||||
Other comprehensive income (loss), net of tax :
|
||||||||
Currency translation adjustments arising during the period
|
(150 | ) | (36 | ) | ||||
Less: reclassification adjustment for gains on disposal of equity investment
|
(10 | ) | - | |||||
Foreign currency translation adjustments
|
(160 | ) | (36 | ) | ||||
Unrealized gains (losses) arising during the period
|
- | - | ||||||
Unrealized gains (losses) on securities
|
- | - | ||||||
Unrealized gains (losses) arising during the period
|
(84 | ) | (8 | ) | ||||
Less : reclassification adjustment for (income) losses included in net income
|
114 | (21 | ) | |||||
Unrealized gains (losses) on derivatives
|
30 | (29 | ) | |||||
Net gains (losses) arising during the period
|
2 | 1 | ||||||
Defined benefit pension plans
|
2 | 1 | ||||||
Other comprehensive income (loss), net of tax
|
(128 | ) | (64 | ) | ||||
Comprehensive income (loss)
|
(113 | ) | (50 | ) | ||||
Less : comprehensive income (loss) attributable to noncontrolling interest
|
2 | 1 | ||||||
Comprehensive income (loss) attributable to the company's stockholders
|
(115 | ) | (51 | ) |
STMicroelectronics N.V.
|
CONSOLIDATED BALANCE SHEETS
|
As at
|
||||||||
June 27,
|
December 31,
|
|||||||
In million of U.S. dollars
|
2015
|
2014
|
||||||
(Unaudited)
|
(Audited)
|
|||||||
Assets
|
||||||||
Current assets :
|
||||||||
Cash and cash equivalents
|
1,887 | 2,017 | ||||||
Restricted cash
|
20 | - | ||||||
Marketable securities
|
334 | 334 | ||||||
Trade accounts receivable, net
|
983 | 911 | ||||||
Inventories
|
1,242 | 1,269 | ||||||
Deferred tax assets
|
83 | 97 | ||||||
Assets held for sale
|
33 | 33 | ||||||
Other current assets
|
469 | 390 | ||||||
Total current assets
|
5,051 | 5,051 | ||||||
Goodwill
|
78 | 82 | ||||||
Other intangible assets, net
|
179 | 193 | ||||||
Property, plant and equipment, net
|
2,518 | 2,647 | ||||||
Non-current deferred tax assets
|
452 | 386 | ||||||
Long-term investments
|
57 | 69 | ||||||
Other non-current assets
|
505 | 576 | ||||||
3,789 | 3,953 | |||||||
Total assets
|
8,840 | 9,004 | ||||||
Liabilities and equity
|
||||||||
Current liabilities:
|
||||||||
Short-term debt
|
201 | 202 | ||||||
Trade accounts payable
|
785 | 597 | ||||||
Other payables and accrued liabilities
|
791 | 841 | ||||||
Dividends payable to stockholders
|
271 | 87 | ||||||
Accrued income tax
|
26 | 39 | ||||||
Total current liabilities
|
2,074 | 1,766 | ||||||
Long-term debt
|
1,581 | 1,599 | ||||||
Post-employment benefit obligations
|
376 | 392 | ||||||
Long-term deferred tax liabilities
|
10 | 10 | ||||||
Other long-term liabilities
|
187 | 182 | ||||||
2,154 | 2,183 | |||||||
Total liabilities
|
4,228 | 3,949 | ||||||
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, 910,949,920 shares issued, 878,465,288 shares outstanding)
|
1,157 | 1,157 | ||||||
Capital surplus
|
2,760 | 2,741 | ||||||
Retained earnings
|
435 | 817 | ||||||
Accumulated other comprehensive income
|
486 | 613 | ||||||
Treasury stock
|
(289 | ) | (334 | ) | ||||
Total parent company stockholders' equity
|
4,549 | 4,994 | ||||||
Noncontrolling interest
|
63 | 61 | ||||||
Total equity
|
4,612 | 5,055 | ||||||
Total liabilities and equity
|
8,840 | 9,004 |
STMicroelectronics N.V.
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Six Months Ended
|
||||||||
(Unaudited)
|
(Unaudited)
|
|||||||
June 27,
|
June 28,
|
|||||||
In million of U.S. dollars
|
2015
|
2014
|
||||||
Cash flows from operating activities:
|
||||||||
Net income
|
15 | 14 | ||||||
Items to reconcile net income and cash flows from operating activities:
|
||||||||
Depreciation and amortization
|
356 | 413 | ||||||
Interests and amortization of issuance costs on convertible bonds
|
10 | - | ||||||
Gain on financial instruments, net
|
- | (1 | ) | |||||
Gain on sale of businesses
|
- | (12 | ) | |||||
Non-cash stock-based compensation
|
18 | 14 | ||||||
Other non-cash items
|
(63 | ) | (73 | ) | ||||
Deferred income tax
|
(50 | ) | (12 | ) | ||||
Loss (income) on equity-method investments
|
(3 | ) | 60 | |||||
Impairment, restructuring charges and other related closure costs, net of cash payments
|
27 | (25 | ) | |||||
Changes in assets and liabilities:
|
||||||||
Trade receivables, net
|
(81 | ) | (49 | ) | ||||
Inventories
|
(14 | ) | 8 | |||||
Trade payables
|
147 | 47 | ||||||
Other assets and liabilities, net
|
10 | (261 | ) | |||||
Net cash from operating activities
|
372 | 123 | ||||||
Cash flows from investing activities:
|
||||||||
Payment for purchase of tangible assets
|
(251 | ) | (253 | ) | ||||
Proceeds from sale of tangible assets
|
1 | 2 | ||||||
Proceeds from sale of marketable securities
|
- | 57 | ||||||
Investment in short-term deposits
|
- | (50 | ) | |||||
Restricted cash
|
(20 | ) | - | |||||
Net cash variation for joint ventures deconsolidation
|
- | 9 | ||||||
Payment for purchase of intangible assets
|
(15 | ) | (34 | ) | ||||
Payment for purchase of financial assets
|
- | (9 | ) | |||||
Payment for disposal of equity investment
|
(13 | ) | - | |||||
Proceeds from sale of financial assets
|
- | 1 | ||||||
Proceeds received in sale of businesses
|
- | 19 | ||||||
Net cash used in investing activities
|
(298 | ) | (258 | ) | ||||
Cash flows from financing activities:
|
||||||||
Repayment of long-term debt
|
(21 | ) | (22 | ) | ||||
Capital increase
|
- | 1 | ||||||
Dividends paid to stockholders
|
(175 | ) | (175 | ) | ||||
Net cash used in financing activities
|
(196 | ) | (196 | ) | ||||
Effect of changes in exchange rates
|
(8 | ) | (3 | ) | ||||
Net cash decrease
|
(130 | ) | (334 | ) | ||||
Cash and cash equivalents at beginning of the period
|
2,017 | 1,836 | ||||||
Cash and cash equivalents at end of the period
|
1,887 | 1,502 |
STMicroelectronics N.V.
|
CONSOLIDATED STATEMENTS OF EQUITY
|
In million of U.S. dollars, except per share amounts
|
Accumulated
|
|||||||||||||||||||||||||||
Other
|
||||||||||||||||||||||||||||
Common
|
Capital
|
Treasury
|
Retained
|
Comprehensive
|
Noncontrolling
|
Total
|
||||||||||||||||||||||
Stock
|
Surplus
|
Stock
|
Earnings
|
Income (Loss)
|
Interest
|
Equity
|
||||||||||||||||||||||
Balance as of December 31, 2013 (Audited)
|
1,156 | 2,581 | (212 | ) | 1,076 | 1,042 | 74 | 5,717 | ||||||||||||||||||||
Capital increase
|
1 | 1 | ||||||||||||||||||||||||||
Repurchase of common stock
|
(156 | ) | (156 | ) | ||||||||||||||||||||||||
Issuance of senior unsecured convertible bonds
|
121 | 121 | ||||||||||||||||||||||||||
Stock-based compensation expense
|
39 | 34 | (34 | ) | 39 | |||||||||||||||||||||||
Joint ventures and other subsidiaries deconsolidation
|
(12 | ) | (12 | ) | ||||||||||||||||||||||||
Comprehensive income (loss):
|
||||||||||||||||||||||||||||
Net income
|
128 | 1 | 129 | |||||||||||||||||||||||||
Other comprehensive income (loss), net of tax
|
(429 | ) | 1 | (428 | ) | |||||||||||||||||||||||
Comprehensive income (loss)
|
(299 | ) | ||||||||||||||||||||||||||
Dividends to noncontrolling interest
|
(3 | ) | (3 | ) | ||||||||||||||||||||||||
Dividends, $0.40 per share
|
(353 | ) | (353 | ) | ||||||||||||||||||||||||
Balance as of December 31, 2014 (Audited)
|
1,157 | 2,741 | (334 | ) | 817 | 613 | 61 | 5,055 | ||||||||||||||||||||
Stock-based compensation expense
|
19 | 45 | (45 | ) | 19 | |||||||||||||||||||||||
Comprehensive income (loss):
|
||||||||||||||||||||||||||||
Net income
|
12 | 3 | 15 | |||||||||||||||||||||||||
Other comprehensive income (loss), net of tax
|
(127 | ) | (1 | ) | (128 | ) | ||||||||||||||||||||||
Comprehensive income (loss)
|
(113 | ) | ||||||||||||||||||||||||||
Dividends, $0.40 per share
|
(349 | ) | (349 | ) | ||||||||||||||||||||||||
Balance as of June 27, 2015 (Unaudited)
|
1,157 | 2,760 | (289 | ) | 435 | 486 | 63 | 4,612 |
|
1.
|
The Company
|
|
2.
|
Fiscal Year
|
|
3.
|
Basis of Presentation
|
|
4.
|
Use of Estimates
|
|
·
|
sales returns and allowances,
|
|
·
|
inventory obsolescence reserves and normal manufacturing capacity thresholds to determine costs capitalized in inventory,
|
|
·
|
recognition and measurement of loss contingencies,
|
|
·
|
valuation at fair value of assets acquired, exchanged or sold, including intangibles, goodwill, investments and tangible assets,
|
|
·
|
annual and trigger-based impairment review of goodwill and intangible assets, as well as an assessment, in each reporting period, of events, which could trigger interim impairment testing on long-lived assets,
|
|
·
|
estimated value of the consideration to be received and used as fair value for asset groups classified as assets held for sale and the assessment of probability of realizing the sale,
|
|
·
|
assessment of other-than-temporary impairment charges on financial assets, including equity-method investments,
|
|
·
|
recognition and measurement of restructuring charges and other related exit costs,
|
|
·
|
assumptions used in assessing the number of awards expected to vest on stock-based compensation plans,
|
|
·
|
assumptions used in calculating pension obligations and other long-term employee benefits, and
|
|
·
|
determination of the income tax expenses estimated on the basis of the projected tax amount for the full year, including deferred income tax assets, valuation allowance and provisions for uncertain tax positions and claims.
|
|
5.
|
Recent Accounting Pronouncements
|
|
6.
|
Other Income and Expenses, Net
|
Three months ended
|
Six months ended
|
|||
June 27, 2015
|
June 28, 2014
|
June 27, 2015
|
June 28, 2014
|
|
Research and development funding
|
35
|
130
|
71
|
152
|
Phase-out and start-up costs
|
(1)
|
(3)
|
(2)
|
(6)
|
Exchange gain (loss), net
|
2
|
2
|
(1)
|
1
|
Patent costs
|
-
|
(16)
|
-
|
(29)
|
Gain on sale of businesses and non-current assets
|
1
|
1
|
2
|
13
|
Other, net
|
-
|
(4)
|
3
|
(6)
|
Total
|
37
|
110
|
73
|
125
|
|
7.
|
Impairment, Restructuring Charges and Other Related Closure Costs
|
Three months ended on June 27, 2015 | ||||
Impairment
|
Restructuring charges
|
Other related
closure costs |
Total impairment,
restructuring charges and other related closure costs |
|
Manufacturing consolidation plan
|
-
|
-
|
(1)
|
(1)
|
EPS restructuring plan
|
-
|
(20)
|
-
|
(20)
|
Total
|
-
|
(20)
|
(1)
|
(21)
|
Six months ended on June 27, 2015 | ||||
Impairment
|
Restructuring charges
|
Other related
closure costs |
Total impairment,
restructuring charges and other related closure costs |
|
Manufacturing consolidation plan
|
-
|
(1)
|
(11)
|
(12)
|
EPS restructuring plan
|
-
|
(35)
|
(3)
|
(38)
|
Total
|
-
|
(36)
|
(14)
|
(50)
|
|
Three months ended on June 28, 2014
|
|||
In millions of U.S. dollars
|
Impairment
|
Restructuring charges
|
Other related
closure costs |
Total impairment,
restructuring charges and other related closure costs |
$600-650 million net opex plan
|
-
|
(9)
|
(7)
|
(16)
|
Manufacturing consolidation
|
-
|
(3)
|
(1)
|
(4)
|
Total
|
-
|
(12)
|
(8)
|
(20)
|
|
Six months ended on June 28, 2014
|
|||
In millions of U.S. dollars
|
Impairment
|
Restructuring charges
|
Other related
closure costs |
Total impairment,
restructuring charges and other related closure costs |
$600-650 million net opex plan
|
-
|
(18)
|
(7)
|
(25)
|
Manufacturing consolidation
|
-
|
(6)
|
(1)
|
(7)
|
Total
|
-
|
(24)
|
(8)
|
(32)
|
$600 million
net opex plan |
Manufacturing
consolidation plan |
EPS
restructuring plan |
Other
restructuring initiatives |
Total
|
|
Provision as at December 31, 2014
|
11
|
5
|
15
|
11
|
42
|
Charges incurred in 2015
|
-
|
12
|
42
|
-
|
54
|
Adjustments for unused provisions
|
-
|
-
|
(4)
|
-
|
(4)
|
Receivables not collected upon contract termination
|
-
|
(4)
|
-
|
-
|
(4)
|
Amounts paid
|
(1)
|
(6)
|
(12)
|
(4)
|
(23)
|
Currency translation effect
|
-
|
-
|
(1)
|
(1)
|
|
Provision as at June 27, 2015
|
10
|
7
|
41
|
6
|
64
|
|
·
|
Manufacturing consolidation plan
|
|
·
|
EPS restructuring plan
|
|
8.
|
Interest expense, Net
|
Three months ended
|
Six months ended
|
|||
June 27, 2015
|
June 28, 2014
|
June 27, 2015
|
June 28, 2014
|
|
Income
|
4
|
2
|
9
|
5
|
Expense
|
(10)
|
(5)
|
(20)
|
(9)
|
Total
|
(6)
|
(3)
|
(11)
|
(4)
|
|
9.
|
Income Taxes
|
Three months ended
|
Six months ended
|
|||
June 27, 2015
|
June 28, 2014
|
June 27, 2015
|
June 28, 2014
|
|
Income tax benefit (expense)
|
31
|
(7)
|
30
|
(16)
|
|
10.
|
Earnings per share
|
Three months ended
|
Six months ended
|
|||
June 27, 2015
|
June 28, 2014
|
June 27, 2015
|
June 28, 2014
|
|
Basic EPS
|
||||
Net income attributable to parent company
|
35
|
38
|
12
|
14
|
Weighted average shares outstanding
|
874,832,408
|
891,236,827
|
874,413,301
|
890,949,311
|
Basic EPS
|
0.04
|
0.04
|
0.01
|
0.02
|
Diluted EPS
|
||||
Net income attributable to parent company
|
35
|
38
|
12
|
14
|
Convertible debt interest
|
-
|
-
|
-
|
-
|
Net income attributable to parent company adjusted
|
35
|
38
|
12
|
14
|
Weighted average shares outstanding
|
874,832,408
|
891,236,827
|
874,413,301
|
890,949,311
|
Dilutive effect of stock awards
|
5,373,096
|
4,144,386
|
5,182,382
|
3,913,718
|
Dilutive effect of convertible debt
|
-
|
-
|
-
|
-
|
Number of shares used in calculating diluted earnings per share
|
880,205,504
|
895,381,213
|
879,595,683
|
894,863,029
|
Diluted EPS
|
0.04
|
0.04
|
0.01
|
0.02
|
|
11.
|
Accumulated Other Comprehensive Income (“AOCI”)
|
Gains (Losses)
on Cash Flow Hedges |
Gains (Losses) on
Available-For-Sale Securities |
Defined
Benefit Pension Plan Items |
Foreign Currency
Translation Adjustments (“CTA”) |
Total
|
|
December 31, 2014
|
(76)
|
2
|
(159)
|
813
|
580
|
Cumulative tax impact
|
-
|
-
|
33
|
-
|
33
|
December 31, 2014, net of tax
|
(76)
|
2
|
(126)
|
813
|
613
|
OCI before reclassifications
|
(84)
|
-
|
-
|
(150)
|
(234)
|
Amounts reclassified from AOCI
|
114
|
-
|
4
|
(10)
|
108
|
OCI for the six months ended June 27, 2015
|
30
|
-
|
4
|
(160)
|
(126)
|
Cumulative tax impact
|
-
|
-
|
(1)
|
-
|
(1)
|
OCI for the six months ended June 27, 2015, net of tax
|
30
|
-
|
3
|
(160)
|
(127)
|
June 27, 2015
|
(46)
|
2
|
(155)
|
653
|
454
|
Cumulative tax impact
|
-
|
-
|
32
|
-
|
32
|
June 27, 2015, net of tax
|
(46)
|
2
|
(123)
|
653
|
486
|
Details about AOCI components
|
Amounts reclassified from AOCI
|
Affected line item in the statement where net income (loss) is presented
|
||
Gains (losses) on cash flow hedges
|
||||
Foreign exchange derivative contracts
|
(68)
|
Cost of sales
|
||
Foreign exchange derivative contracts
|
(10)
|
Selling, general and administrative
|
||
Foreign exchange derivative contracts
|
(36)
|
Research and development
|
||
-
|
Income tax expense
|
|||
(114)
|
Net of tax
|
|||
Defined benefit pension plan items
|
||||
Amortization of prior service costs
|
-
|
(1)
|
||
Amortization of actuarial gains (losses)
|
-
|
(1)
|
||
-
|
Income tax benefit (expense)
|
|||
-
|
Net of tax
|
|||
Foreign currency translation adjustment
|
||||
Realized gain on disposal of investments
|
10
|
Income (loss) on equity-method investments
|
||
-
|
Income tax benefit (expense)
|
|||
10
|
Net of tax
|
|||
Total reclassifications for the period attributable to the Company’s stockholders
|
(104)
|
Net of tax
|
|
(1)
|
These items are included in the computation of net periodic pension cost, as described in Note 21.
|
|
12.
|
Marketable Securities
|
December 31, 2014
|
Purchase
|
Sale /
Settlement |
Change in
fair value included in OCI* for available-for -sale marketable securities |
Change in
fair value recognized in earnings |
Foreign
exchange result through OCI* |
June 27, 2015
|
|
U.S. Treasury Bonds
|
334
|
-
|
-
|
-
|
-
|
334
|
|
Total
|
334
|
-
|
-
|
-
|
-
|
334
|
|
13.
|
Trade Accounts Receivable, Net
|
As at June 27, 2015
|
As at December 31, 2014
|
|
Trade accounts receivable
|
989
|
919
|
Allowance for doubtful accounts
|
(6)
|
(8)
|
Total
|
983
|
911
|
|
14.
|
Inventories
|
As at June 27, 2015
|
As at December 31, 2014
|
|
Raw materials
|
71
|
73
|
Work-in-process
|
766
|
795
|
Finished products
|
405
|
401
|
Total
|
1,242
|
1,269
|
|
15.
|
Goodwill
|
Sense & Power and Automotive (SP&A)
|
Embedded Processing Solutions (EPS)
|
Total
|
|
December 31, 2014
|
2
|
80
|
82
|
Foreign currency translation
|
-
|
(4)
|
(4)
|
June 27, 2015
|
2
|
76
|
78
|
|
16.
|
Other intangible assets
|
June 27, 2015
|
Gross Cost
|
Accumulated Amortization
|
Net Cost
|
Technologies & licences
|
622
|
(532)
|
90
|
Contractual customer relationships
|
4
|
(4)
|
-
|
Purchased software
|
380
|
(309)
|
71
|
Construction in progress
|
18
|
-
|
18
|
Other intangible assets
|
66
|
(66)
|
-
|
Total
|
1,090
|
(911)
|
179
|
December 31, 2014
|
Gross Cost
|
Accumulated Amortization
|
Net Cost
|
Technologies & licences
|
619
|
(519)
|
100
|
Contractual customer relationships
|
4
|
(4)
|
-
|
Purchased software
|
373
|
(302)
|
71
|
Construction in progress
|
22
|
-
|
22
|
Other intangible assets
|
66
|
(66)
|
-
|
Total
|
1,084
|
(891)
|
193
|
Year
|
||||
Remainder of 2015
|
35 | |||
2016
|
58 | |||
2017
|
40 | |||
2018
|
24 | |||
2019
|
12 | |||
Thereafter
|
10 | |||
Total
|
179 |
|
17.
|
Property, plant and equipment
|
June 27, 2015
|
Gross
Cost
|
Accumulated
Depreciation |
Net
Cost
|
|||||||||
Land
|
76 | - | 76 | |||||||||
Buildings
|
837 | (399 | ) | 438 | ||||||||
Facilities & leasehold improvements
|
2,785 | (2,506 | ) | 279 | ||||||||
Machinery and equipment
|
13,048 | (11,447 | ) | 1,601 | ||||||||
Computer and R&D equipment
|
390 | (349 | ) | 41 | ||||||||
Other tangible assets
|
110 | (104 | ) | 6 | ||||||||
Construction in progress
|
77 | - | 77 | |||||||||
Total
|
17,323 | (14,805 | ) | 2,518 | ||||||||
|
||||||||||||
December 31, 2014
|
Gross
Cost
|
Accumulated
Depreciation |
Net
Cost
|
|||||||||
Land
|
80 | - | 80 | |||||||||
Buildings
|
886 | (411 | ) | 475 | ||||||||
Facilities & leasehold improvements
|
2,946 | (2,629 | ) | 317 | ||||||||
Machinery and equipment
|
13,491 | (11,822 | ) | 1,669 | ||||||||
Computer and R&D equipment
|
410 | (371 | ) | 39 | ||||||||
Other tangible assets
|
118 | (109 | ) | 9 | ||||||||
Construction in progress
|
58 | - | 58 | |||||||||
Total
|
17,989 | (15,342 | ) | 2,647 |
|
18.
|
Long-Term Investments
|
June 27, 2015
|
December 31, 2014
|
|
Equity-method investments
|
44
|
56
|
Cost-method investments
|
13
|
13
|
Total
|
57
|
69
|
June 27, 2015
|
December 31, 2014
|
|||
Carrying value
|
Ownership percentage
|
Carrying value
|
Ownership percentage
|
|
ST-Ericsson SA, in liquidation
|
43
|
50.0%
|
43
|
50.0%
|
Incard do Brazil Ltda
|
1
|
50.0%
|
3
|
50.0%
|
3Sun S.r.l.
|
-
|
-
|
-
|
-
|
Other Investment
|
-
|
-
|
10
|
-
|
Total
|
44
|
56
|
|
19.
|
Other Non-current Assets
|
As at June 27, 2015
|
As at December 31, 2014
|
|
Available-for-sale equity securities
|
11
|
11
|
Trading equity securities
|
8
|
8
|
Long-term State receivables
|
438
|
513
|
Long-term receivables from third parties
|
4
|
5
|
Prepaid for pension
|
12
|
9
|
Derivatives designated as a hedge
|
5
|
-
|
Deposits and other non-current assets
|
27
|
30
|
Total
|
505
|
576
|
|
20.
|
Long-term debt
|
June 27, 2015
|
December 31, 2014
|
|
Funding program loans from European Investment Bank:
|
||
0.30% due 2015, floating interest rate at Libor + 0.026%
|
9
|
9
|
0.33% due 2016, floating interest rate at Libor + 0.052%
|
19
|
39
|
0.75% due 2016, floating interest rate at Libor + 0.477%
|
52
|
52
|
0.65% due 2016, floating interest rate at Libor + 0.373%
|
57
|
57
|
1.48% due 2020, floating interest rate at Libor + 1.199%
|
75
|
75
|
1.33% due 2020, floating interest rate at Libor + 1.056%
|
165
|
165
|
0.92% due 2020, floating interest rate at Euribor + 0.917%
|
84
|
91
|
0.93% due 2021, floating interest rate at Libor + 0.525%
|
210
|
210
|
0.99% due 2021, floating interest rate at Libor + 0.572%
|
202
|
202
|
Dual tranche senior unsecured convertible bonds
|
||
Zero-coupon, due 2019 (Tranche A)
|
543
|
537
|
1.0% due 2021 (Tranche B)
|
351
|
347
|
Other funding program loans:
|
||
0.42% (weighted average), due 2015-2023, fixed interest rate
|
5
|
6
|
Other long-term loans:
|
||
1.95% (weighted average), due 2017, fixed interest rate
|
5
|
6
|
0.72% (weighted average), due 2018, fixed interest rate
|
1
|
1
|
0.87% (weighted average), due 2020, fixed interest rate
|
3
|
3
|
Capital leases:
|
||
6.34% (weighted average), due 2015-2017, fixed interest rate
|
1
|
1
|
Total long-term debt
|
1,782
|
1,801
|
Less current portion
|
(201)
|
(202)
|
Total long-term debt, less current portion
|
1,581
|
1,599
|
|
21.
|
Post Employment and Other Long-term Employee Benefits
|
Pension Benefits
|
Pension Benefits
|
|||
Three months ended
|
Six months ended
|
|||
June 27, 2015
|
June 28, 2014
|
June 27, 2015
|
June 28, 2014
|
|
Service cost
|
(7)
|
(7)
|
(14)
|
(14)
|
Interest cost
|
(6)
|
(8)
|
(12)
|
(15)
|
Expected return on plan assets
|
5
|
6
|
10
|
12
|
Recognition of prior service cost
|
-
|
-
|
-
|
(1)
|
Amortization of actuarial net (loss) gain
|
(2)
|
-
|
(4)
|
(1)
|
Settlement
|
-
|
-
|
-
|
1
|
Net periodic benefit cost
|
(10)
|
(9)
|
(20)
|
(18)
|
Other long-term benefits
|
Other long-term benefits
|
|||
Three months ended
|
Six months ended
|
|||
June 27, 2015
|
June 28, 2014
|
June 27, 2015
|
June 28, 2014
|
|
Service cost
|
(1)
|
(2)
|
(2)
|
(3)
|
Interest cost
|
-
|
(1)
|
(1)
|
(2)
|
Net periodic benefit cost
|
(1)
|
(3)
|
(3)
|
(5)
|
|
22.
|
Dividends
|
|
23.
|
Treasury Stock
|
|
24.
|
Contingencies, Claims and Legal proceedings
|
|
25.
|
Derivative Instruments and Hedging Activities
|
In millions of Euros
|
Notional amount for hedge on
forecasted R&D and other operating expenses |
Notional amount for hedge on
forecasted manufacturing costs |
Forward contracts
|
273
|
447
|
Currency collars
|
268
|
480
|
In millions of Singapore dollars
|
Notional amount for hedge on
forecasted R&D and other operating expenses |
Notional amount for hedge on
forecasted manufacturing costs |
Forward contracts
|
-
|
131
|
As at June 27, 2015
|
As at December 31, 2014
|
|||||||
Asset Derivatives
|
Balance sheet location
|
Fair value
|
Balance sheet location
|
Fair value
|
||||
Derivatives designated as a hedge:
|
||||||||
Foreign exchange forward contracts
|
Other current assets
|
7
|
Other current assets
|
-
|
||||
Foreign exchange forward contracts
|
Other non-current assets
|
3
|
Other non-current assets
|
-
|
||||
Currency collars
|
Other current assets
|
4
|
Other current assets
|
-
|
||||
Currency collars
|
Other non-current assets
|
2
|
Other non-current assets
|
-
|
||||
Total derivatives designated as a hedge:
|
16
|
-
|
||||||
Derivatives not designated as a hedge:
|
||||||||
Foreign exchange forward contracts
|
Other current assets
|
2
|
Other current assets
|
1
|
||||
Total derivatives not designated as a hedge:
|
2
|
1
|
||||||
Total Derivatives
|
18
|
1
|
As at June 27, 2015
|
As at December 31, 2014
|
|||||||
Liability Derivatives
|
Balance sheet location
|
Fair value
|
Balance sheet location
|
Fair value
|
||||
Derivatives designated as a hedge:
|
||||||||
Foreign exchange forward contracts
|
Other payables and accrued liabilities
|
(30)
|
Other payables and accrued liabilities
|
(43)
|
||||
Foreign exchange forward contracts
|
Other long-term liabilities
|
(1)
|
Other long-term liabilities
|
-
|
||||
Currency collars
|
Other payables and accrued liabilities
|
(22)
|
Other payables and accrued liabilities
|
(28)
|
||||
Currency collars
|
Other long-term liabilities
|
-
|
Other long-term liabilities
|
-
|
||||
Total derivatives designated as a hedge:
|
(53)
|
(71)
|
||||||
Derivatives not designated as a hedge:
|
||||||||
Foreign exchange forward contracts
|
Other payables and accrued liabilities
|
(1)
|
Other payables and accrued liabilities
|
(2)
|
||||
Total derivatives not designated as a hedge:
|
(1)
|
(2)
|
||||||
Total Derivatives
|
(54)
|
(73)
|
Gain (loss) deferred in
OCI on derivative |
Location of gain (loss)
reclassified from OCI into earnings |
Gain (loss) reclassified from OCI
into earnings |
||||||||||||
Three months ended
|
Six months ended
|
|||||||||||||
June 27, 2015
|
December 31, 2014
|
June 27, 2015
|
June 28, 2014
|
June 27, 2015
|
June 28, 2014
|
|||||||||
Foreign exchange forward contracts
|
(18)
|
(30)
|
Cost of sales
|
(22)
|
7
|
(42)
|
14
|
|||||||
Foreign exchange forward contracts
|
(1)
|
(5)
|
Selling, general and administrative
|
(4)
|
-
|
(6)
|
1
|
|||||||
Foreign exchange forward contracts
|
(7)
|
(10)
|
Research and development
|
(10)
|
1
|
(20)
|
4
|
|||||||
Currency options
|
-
|
-
|
Cost of sales
|
-
|
(1)
|
-
|
(1)
|
|||||||
Currency collars
|
(14)
|
(20)
|
Cost of sales
|
(13)
|
2
|
(26)
|
2
|
|||||||
Currency collars
|
(1)
|
(4)
|
Selling, general and administrative
|
(2)
|
1
|
(4)
|
1
|
|||||||
Currency collars
|
(5)
|
(7)
|
Research and development
|
(6)
|
1
|
(16)
|
2
|
|||||||
Total
|
(46)
|
(76)
|
(57)
|
11
|
(114)
|
23
|
Location of gain (loss)
recognized in earnings |
Gain recognized in earnings
|
||||
Three months ended
|
Six months ended
|
||||
June 27, 2015
|
June 28, 2014
|
June 27, 2015
|
June 28, 2014
|
||
Foreign exchange forward contracts
|
Other income and expenses, net
|
1
|
3
|
6
|
5
|
Total
|
1
|
3
|
6
|
5
|
|
26.
|
Fair Value Measurements
|
Fair Value Measurements using
|
||||
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
Significant Other
Observable Inputs (Level 2)
|
Significant
Unobservable Inputs (Level 3)
|
||
June 27, 2015
|
||||
Marketable securities – U.S. Treasury Bonds
|
334
|
334
|
-
|
-
|
Equity securities classified as available-for-sale
|
11
|
11
|
-
|
-
|
Equity securities classified as held-for-trading
|
8
|
8
|
-
|
-
|
Derivative instruments designated as cash flow hedge
|
(37)
|
-
|
(37)
|
-
|
Derivative instruments not designated as a hedge
|
1
|
-
|
1
|
-
|
Total
|
317
|
353
|
(36)
|
-
|
Fair Value Measurements using
|
||||
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
Significant Other
Observable Inputs (Level 2)
|
Significant
Unobservable Inputs (Level 3)
|
||
December 31, 2014
|
||||
Marketable securities – U.S. Treasury Bonds
|
334
|
334
|
-
|
-
|
Equity securities classified as available-for-sale
|
11
|
11
|
-
|
-
|
Equity securities classified as held-for-trading
|
8
|
8
|
-
|
-
|
Derivative instruments designated as cash flow hedge
|
(71)
|
-
|
(71)
|
-
|
Derivative instruments not designated as a hedge
|
(1)
|
-
|
(1)
|
-
|
Total
|
281
|
353
|
(72)
|
-
|
In millions of U.S. dollars
|
Fair Value Measurements using Significant
Unobservable Inputs (Level 3) |
January 1, 2014
|
16
|
Sale of Veredus asset group
|
(16)
|
June 28, 2014
|
-
|
Amount of total losses for the period included in earnings attributable to assets still held at the reporting date
|
-
|
As at June 27, 2015
|
As at December 31, 2014
|
||||
Level
|
Carrying Amount
|
Estimated Fair Value
|
Carrying Amount
|
Estimated Fair Value
|
|
Cash equivalents (1)
|
1
|
1,135
|
1,135
|
1,271
|
1,271
|
Long-term debt
|
|||||
- Bank loans (including current portion)
|
2
|
888
|
888
|
917
|
917
|
- Senior unsecured convertible bonds (2)
|
1
|
894
|
1,045
|
884
|
967
|
|
(1)
|
Cash equivalents primarily correspond to deposits at call with banks.
|
|
(2)
|
The carrying amount of the senior unsecured convertible bonds as reported above corresponds to the liability component only, since, at initial recognition, an amount of $121 million was recorded directly in shareholders’ equity as the value of the equity instrument embedded in the issued convertible bonds. The carrying value of the bonds are net of $4 million debt issuance costs presented as a deduction of debt and not as a deferred charge, since the Company early adopted in 2015 the new guidance on presentation of debt issuance costs.
|
|
27.
|
Segment Reporting
|
|
·
|
Sense & Power and Automotive Products (SP&A), including:
|
|
o
|
Automotive (APG),
|
|
o
|
Industrial & Power Discrete (IPD),
|
|
o
|
Analog & MEMS (AMS), and
|
|
o
|
Other SP&A;
|
|
·
|
Embedded Processing Solutions (EPS), comprised of:
|
|
o
|
Digital Product Group (DPG),
|
|
o
|
Microcontrollers, Memory & Secure MCU (MMS), and
|
|
o
|
Other EPS.
|
Three months ended
|
Six months ended
|
|||
June 27, 2015
|
June 28, 2014
|
June 27, 2015
|
June 28, 2014
|
|
Net revenues by product lines:
|
||||
Automotive (APG)
|
438
|
463
|
872
|
907
|
Industrial & Power Discrete (IPD)
|
448
|
475
|
878
|
917
|
Analog & MEMS (AMS)
|
273
|
264
|
528
|
568
|
Sense & Power and Automotive Products (SP&A)
|
1,159
|
1,202
|
2,278
|
2,392
|
Digital Product Group (DPG)
|
207
|
260
|
415
|
542
|
Microcontrollers, Memory & Secure MCU (MMS)
|
388
|
396
|
761
|
742
|
Other EPS
|
-
|
1
|
-
|
1
|
Embedded Processing Solutions (EPS)
|
595
|
657
|
1,176
|
1,285
|
Others
|
6
|
5
|
11
|
12
|
Total consolidated net revenues
|
1,760
|
1,864
|
3,465
|
3,689
|
Three months ended
|
Six months ended
|
|||
June 27, 2015
|
June 28, 2014
|
June 27, 2015
|
June 28, 2014
|
|
Operating income (loss) by product segment:
|
||||
Sense & Power and Automotive Products (SP&A)
|
76
|
125
|
148
|
227
|
Embedded Processing Solutions (EPS)
|
(42)
|
10
|
(106)
|
(73)
|
Total operating income (loss) of product segments
|
34
|
135
|
42
|
154
|
Others(1)
|
(22)
|
(37)
|
(49)
|
(61)
|
Total consolidated operating income (loss)
|
12
|
98
|
(7)
|
93
|
|
(1)
|
Operating loss of “Others” includes items such as impairment, restructuring charges and other related closure costs, phase-out and start-up costs of certain manufacturing facilities, certain one-time corporate items and other unallocated expenses such as: strategic or special research and development programs, certain corporate-level operating expenses and other costs that are not allocated to the product segments, as well as operating earnings of the Subsystems and Other Products Group.
|
Three months ended
|
Six months ended
|
|||
June 27, 2015
|
June 28, 2014
|
June 27, 2015
|
June 28, 2014
|
|
Reconciliation to consolidated operating income (loss):
|
||||
Total operating income (loss) of product segments
|
34
|
135
|
42
|
154
|
Strategic and other research and development programs
|
(2)
|
(2)
|
(3)
|
(3)
|
Phase-out and start-up costs
|
(1)
|
(3)
|
(2)
|
(6)
|
Impairment, restructuring charges and other related closure costs
|
(21)
|
(20)
|
(50)
|
(32)
|
Other non-allocated provisions(1)
|
2
|
(12)
|
6
|
(20)
|
Total operating loss Others
|
(22)
|
(37)
|
(49)
|
(61)
|
Total consolidated operating income (loss)
|
12
|
98
|
(7)
|
93
|
|
(1)
|
Includes unallocated income and expenses such as certain corporate-level operating expenses and other costs/income that are not allocated to the product segments.
|
|
28.
|
Subsequent events
|
STMicroelectronics N.V.
|
|||
Date: August 5, 2015
|
By:
|
/s/ Carlo Bozotti
|
|
Name:
|
Carlo Bozotti
|
||
Title:
|
President and Chief Executive Officer and Sole Member of our Managing Board
|