PR No: C3403C
Q226 et eve ues at $3.49 billio G oss ma gi at 34.8% ( o -U.S. GAAP 1 g oss ma gi at 35.2%) Ope ati g i come at $187 millio ( o -U.S. GAAP 1 ope ati g i come at $269 millio ) Busi ess outlook at mid-poi t: Q326 et eve ues of $3.70 billio a d g oss ma gi of 37.0 %
ST epo ted seco d qua te et eve ues of $3.49 billio , g oss ma gi of 34.8%, ope ati g i come of $187 millio , a d et i come of $222 millio o $0.24 diluted ea i gs pe sha e ( o -U.S. GAAP1 g oss ma gi of 35.2%, o -U.S. GAAP1 ope ati g i come of $269 millio , a d o -U.S. GAAP1 et i come of $291 millio o $0.31 diluted ea i gs pe sha e).
Jea -Ma c Che y, ST P eside t & CEO, comme ted:
“Q2 et eve ues came above the mid-poi t of ou busi ess outlook a ge, d ive by highe eve ues i CECP a d Automotive . G oss ma gi was i li e with the mid-poi t of ou busi ess outlook a ge. ” “O a yea -ove -yea basis, Q2 et eve ues i c eased 26.0% . Q2 g oss ma gi was 34.8%, ope ati g ma gi was 5.4% a d et i come was $222 millio . O a o -U.S. GAAP 1 basis g oss ma gi was 35.2%, ope ati g ma gi was 7.7% a d et i come was $291 millio .” “Du i g the qua te dema d i c eased fu the , with st o g booki gs i all e d ma kets. We saw imp oved visibility a d sig s of tight supply i seve al p oduct catego ies. I ve to y i dist ibutio is ow below ou sta da d ta get.” “Ou thi d qua te busi ess outlook, at the mid-poi t, is fo et eve ues of $3.70 billio , i c easi g about 6.2% seque tially a d about 16.2% yea -ove -yea . G oss ma gi is expected to be about 37.0%, i cludi g about 70 basis poi ts of u used capacity cha ges .”“We a ticipate a eve ue g owth accele atio i Q4, mai ly d ive by ou e gaged custome p og ams i AI datace te s a d LEO satellite commu icatio . We expect Q4 eve ues to be above $4 billio , this t a slates i to a H2 vs H1 g owth above ou o mal 15% seaso ality.” “D ive by co ti ued st o g dema d i AI datace te s, we a e aisi g ou eve ue ambitio fo datace te s. Reve ues a e ow expected above $1 billio i 2026 a d, assumi g the cu e t dy amic co ti ues a d with the cu e t e gageme ts we have, well above $2 billio i 2027. This co fi ms ST’s st o g positio i the evolvi g AI datace te s.”
| G oss P ofit | $1,215 | $1,045 | $926 | 16.3% | 31.1% | Ope ati g I come (Loss) | $187 | $70 | $(133) | 165.5% | – | Net I come (Loss) | $222 | $37 | $(97) | 496.8% | – | G oss P ofit | Ope ati g I come | $269 | $171 | $57 | 57.3% | 371.9% | Net I come | $291 | $122 | $57 | 138.5% | 410.5% |
| A alog p oducts, MEMS a d Se so s (AM&S) segme t | 1,426 | 1,318 | 1,133 | 8.2% | 26.0% | Powe a d disc ete p oducts (P&D) segme t | 464 | 389 | 447 | 19.2% | 3.7% | Embedded P ocessi g (EMP) segme t | 1,147 | 975 | 847 | 17.7% | 35.5% | RF Optical Commu icatio s (RFOC) segme t | 445 | 409 | 336 | 8.6% | 32.0% | Othe s | 5 | 4 | 3 | – | – |
By
I A alog, Powe & Disc ete, MEMS a d Se so s (APMS) P oduct G oup:
A alog p oducts, MEMS a d Se so s (AM&S)2 segme t:
- Reve ue i c eased 26.0% mai ly due to Imagi g a d MEMS a d, to a lesse exte t, A alog.
- Ope ati g p ofit i c eased by 69.2% to $144 millio . Ope ati g ma gi was 10.1% compa ed to 7.5%.
Powe a d Disc ete p oducts (P&D) segme t:
- Reve ue i c eased 3.7%.
- Ope ati g esult dec eased f om a loss of $56 millio to a loss of $99 millio . Ope ati g ma gi was -21.4% compa ed to -12.5%.
I Mic oco t olle s, Digital ICs a d RF p oducts (MDRF) P oduct G oup:
Embedded P ocessi g (EMP) segme t:
- Reve ue i c eased 35.5% mai ly due to Ge e al Pu pose MCU a d, to a lesse exte t, Custom P ocessi g a d Co ected Secu ity.
- Ope ati g p ofit i c eased by 97.8% to $226 millio . Ope ati g ma gi was 19.7% compa ed to 13.5%.
RF Optical Commu icatio s (RFOC) segme t:
- Reve ue i c eased 32.0%.
- Ope ati g p ofit i c eased by 56.3% to $94 millio . Ope ati g ma gi was 21.2% compa ed to 17.9%.
| (US$ m) | Net cash f om ope ati g activities | 502 | 534 | 354 | 2,259 | 2,332 | -3.1% | F ee cash flow ( o -U.S. GAAP1) | 75 | (723)2 | (152) | (261) | 142 | -283.8% |
Net cash f om ope ati g activities was $502 millio i the seco d qua te , afte app oximately $44 millio outflow elated to est uctu i g, compa ed to $354 millio i the yea -ago qua te .
Net Capex ( o -U.S. GAAP1), was $409 millio i the seco d qua te compa ed to $465 millio i the yea -ago qua te .
F ee cash flow ( o -U.S. GAAP1) was positive at $75 millio i the seco d qua te compa ed to egative $152 millio i the yea -ago qua te .
I ve to y at the e d of the seco d qua te was $3.19 billio , compa ed to $3.17 billio i the p evious qua te a d $3.27 billio i the yea -ago qua te . Days sales of i ve to y at qua te -e d was 126 days, compa ed to 140 days fo the p evious qua te a d 166 days fo the yea -ago qua te .
I the seco d qua te , ST paid cash divide ds to its stockholde s totali g $75 millio .
ST’s et fi a cial positio ( o -U.S. GAAP3) emai ed st o g at $2.01 billio as of Ju e 27, 2026, compa ed to $2.00 billio as of Ma ch 28, 2026, a d eflected total liquidity of $6.03 billio a d total fi a cial debt of $4.02 billio . Adjusted et fi a cial positio ( o -U.S. GAAP1), taki g i to co side atio the effect o total liquidity of adva ces f om capital g a ts fo which capital expe ditu es have ot bee i cu ed yet, stood at $1.70 billio as of Ju e 27, 2026.
Du i g the qua te , ST issued a ew $1.5 billio dual-t a che se io u secu ed co ve tible bo d (T a che A a d T a che B fo $750 millio each) due 2031 a d 2033 a d a ou ced the ea ly edemptio of its $750 millio co ve tible bo d due i 2027.
O May 27, 2026, STMic oelect o ics held its 2026 A ual Ge e al Meeti g of Sha eholde s i Amste dam, the Nethe la ds. All p oposed esolutio s we e app oved by the Sha eholde s.
ST’s guida ce, at the mid-poi t, fo the 2026 thi d qua te is:
- Net eve ues a e expected to be $3.70 billio , a i c ease of 6.2% seque tially, plus o mi us 350 basis poi ts.
- G oss ma gi of 37.0%, plus o mi us 200 basis poi ts.
- This outlook is based o a assumed effective cu e cy excha ge ate of app oximately $1.14 = €1.00 fo the 2026 thi d qua te a d i cludes the impact of existi g hedgi g co t acts.
- The thi d qua te will close o Septembe 26, 2026.
This busi ess outlook does ot i clude a y impact of pote tial fu the cha ges to global t ade ta iffs compa ed to the cu e t situatio .
ST will co duct a co fe e ce call with a alysts, i vesto s a d epo te s to discuss its seco d qua te 2026 fi a cial esults a d cu e t busi ess outlook today at 9:30 a.m. Ce t al Eu opea Time (CET) / 3:30 a.m. U.S. Easte Time (ET). A live webcast (liste -o ly mode) of the co fe e ce call will be accessible at ST’s website, https://i vesto s.st.com, a d will be available fo eplay u til August 7, 2026.
This p ess elease co tai s suppleme tal o -U.S. GAAP fi a cial i fo matio .
Reade s a e cautio ed that these measu es a e u audited a d ot p epa ed i acco da ce with U.S. GAAP a d should ot be co side ed as a substitute fo U.S. GAAP fi a cial measu es. I additio , such o -U.S. GAAP fi a cial measu es may ot be compa able to simila ly titled i fo matio f om othe compa ies. To compe sate fo these limitatio s, the suppleme tal o -U.S. GAAP fi a cial i fo matio should ot be ead i isolatio , but o ly i co ju ctio with ST’s co solidated fi a cial stateme ts p epa ed i acco da ce with U.S. GAAP.
See the Appe dix of this p ess elease fo a eco ciliatio of ST’s o -U.S. GAAP fi a cial measu es to thei co espo di g U.S. GAAP fi a cial measu es.
Some of the stateme ts co tai ed i this elease that a e ot histo ical facts a e stateme ts of futu e expectatio s a d othe fo wa d-looki g stateme ts (withi the mea i g of Sectio 27A of the Secu ities Act of 1933 o Sectio 21E of the Secu ities Excha ge Act of 1934, each as ame ded) that a e based o ma ageme t’s cu e t views a d assumptio s, a d a e co ditio ed upo a d also i volve k ow a d u k ow isks a d u ce tai ties that could cause actual esults, pe fo ma ce o eve ts to diffe mate ially f om those a ticipated by such stateme ts due to, amo g othe facto s:
- cha ges i global t ade policies, i cludi g the co ti uatio , adoptio a d expa sio of ta iffs a d t ade ba ie s a d sa ctio s, that a e affecti g a d could fu the affect the mac o-eco omic e vi o me t a d a e adve sely impacti g a d could fu the adve sely impact the dema d fo ou p oducts;
- u ce tai mac o-eco omic a d i dust y t e ds (such as i flatio a d fluctuatio s i supply chai s), which a e impacti g a d may fu the impact p oductio capacity a d e d-ma ket dema d fo ou p oducts;
- custome dema d that diffe s f om p ojectio s which may equi e us to u de take t a sfo matio measu es that may ot be successful i ealizi g the expected be efits i full o at all;
- the ability to desig , ma ufactu e a d sell i ovative p oducts i a apidly cha gi g tech ological e vi o me t;
- cha ges i eco omic, social, public health, labo , political, o i f ast uctu e co ditio s i the locatio s whe e we, ou custome s, o ou supplie s ope ate, i cludi g as a esult of mac o-eco omic o egio al eve ts, geopolitical a d milita y co flicts, social u est, labo actio s, o te o ist activities;
- u a ticipated eve ts o ci cumsta ces, which may impact ou ability to execute ou pla s a d/o meet the objectives of ou esea ch a d developme t a d ma ufactu i g p og ams, which be efit f om public fu di g;
- fi a cial difficulties with a y of ou majo dist ibuto s o sig ifica t cu tailme t of pu chases by key custome s;
- the loadi g, p oduct mix, a d ma ufactu i g pe fo ma ce of ou p oductio facilities a d/o ou equi ed volume to fulfill capacity ese ved with supplie s o thi d-pa ty ma ufactu i g p ovide s;
- availability a d costs of equipme t, aw mate ials, utilities, thi d-pa ty ma ufactu i g se vices a d tech ology, o othe supplies equi ed by ou ope atio s (i cludi g i c easi g costs esulti g f om i flatio );
- the fu ctio alities a d pe fo ma ce of ou IT systems, which a e subject to cybe secu ity th eats a d which suppo t ou c itical ope atio al activities i cludi g ma ufactu i g, fi a ce a d sales, a d a y b eaches of ou IT systems o those of ou custome s, supplie s, pa t e s a d p ovide s of thi d-pa ty lice sed tech ology;
- theft, loss, o misuse of pe so al data about ou employees, custome s, o othe thi d pa ties, a d b eaches of data p ivacy legislatio ;
- the impact of i tellectual p ope ty claims by ou competito s o othe thi d pa ties, a d ou ability to obtai equi ed lice ses o easo able te ms a d co ditio s;
- cha ges i ou ove all tax positio as a esult of cha ges i tax ules, ew o evised legislatio , the outcome of tax audits o cha ges i i te atio al tax t eaties which may impact ou esults of ope atio s as well as ou ability to accu ately estimate tax c edits, be efits, deductio s a d p ovisio s a d to ealize defe ed tax assets;
- va iatio s i the fo eig excha ge ma kets a d, mo e pa ticula ly, the U.S. dolla excha ge ate as compa ed to the Eu o a d the othe majo cu e cies we use fo ou ope atio s;
- the outcome of o goi g litigatio as well as the impact of a y ew litigatio to which we may become a defe da t;
- p oduct liability o wa a ty claims, claims based o epidemic o delive y failu e, o othe claims elati g to ou p oducts, o ecalls by ou custome s fo p oducts co tai i g ou pa ts;
- atu al eve ts such as seve e weathe , ea thquakes, tsu amis, volca o e uptio s o othe acts of atu e, the effects of climate cha ge, health isks a d epidemics o pa demics i locatio s whe e we, ou custome s o ou supplie s ope ate;
- i c eased egulatio a d i itiatives i ou i dust y, i cludi g those co ce i g climate cha ge a d sustai ability matte s a d ou goal to become ca bo eut al i all di ect a d i di ect emissio s (scopes 1 a d 2), p oduct t a spo tatio , busi ess t avel, a d employee commuti g emissio s (ou scope 3 focus), a d to achieve ou 100% e ewable elect icity sou ci g goal by the e d of 2027;
- epidemics o pa demics, which may egatively impact the global eco omy i a sig ifica t ma e fo a exte ded pe iod of time, a d could also mate ially adve sely affect ou busi ess a d ope ati g esults;
- i dust y cha ges esulti g f om ve tical a d ho izo tal co solidatio amo g ou supplie s, competito s, a d custome s;
- the ability to successfully amp up ew p og ams that could be impacted by facto s beyo d ou co t ol, i cludi g the availability of c itical thi d-pa ty compo e ts a d pe fo ma ce of subco t acto s i li e with ou expectatio s; a d
- i dividual custome use of ce tai p oducts, which may diffe f om the a ticipated uses of such p oducts a d esult i diffe e ces i pe fo ma ce, i cludi g e e gy co sumptio , may lead to a failu e to achieve ou disclosed emissio – eductio goals, adve se legal actio o additio al esea ch costs.
Such fo wa d-looki g stateme ts a e subject to va ious isks a d u ce tai ties, which may cause actual esults a d pe fo ma ce of ou busi ess to diffe mate ially a d adve sely f om the fo wa d-looki g stateme ts. Ce tai fo wa d-looki g stateme ts ca be ide tified by the use of fo wa d-looki g te mi ology, such as “believes”, “expects”, “may”, “a e expected to”, “should”, “would be”, “seeks” o “a ticipates” o simila exp essio s o the egative the eof o othe va iatio s the eof o compa able te mi ology, o by discussio s of st ategy, pla s o i te tio s.
Some of these isk facto s a e set fo th a d a e discussed i mo e detail i “Item 3. Key I fo matio — Risk Facto s” i cluded i ou A ual Repo t o Fo m 20-F fo the yea e ded Decembe 31, 2025 as filed with the Secu ities a d Excha ge Commissio (“SEC”) o Feb ua y 26, 2026. Should o e o mo e of these isks o u ce tai ties mate ialize, o should u de lyi g assumptio s p ove i co ect, actual esults may va y mate ially f om those desc ibed i this p ess elease as a ticipated, believed o expected. We do ot i te d, a d do ot assume a y obligatio , to update a y i dust y i fo matio o fo wa d-looki g stateme ts set fo th i this elease to eflect subseque t eve ts o ci cumsta ces.
U favo able cha ges i the above o othe facto s listed u de “Item 3. Key I fo matio — Risk Facto s” f om time to time i ou SEC fili gs, could have a mate ial adve se effect o ou busi ess a d/o fi a cial co ditio .
At ST, we a e 49,000 c eato s a d make s of semico ducto tech ologies maste i g the semico ducto supply chai with state-of-the-a t ma ufactu i g facilities. A i teg ated device ma ufactu e , we wo k with mo e tha 200,000 custome s a d thousa ds of pa t e s to desig a d build p oducts, solutio s, a d ecosystems that add ess thei challe ges a d oppo tu ities, a d the eed to suppo t a mo e sustai able wo ld. Ou tech ologies e able sma te mobility, mo e efficie t powe a d e e gy ma ageme t, a d the wide-scale deployme t of cloud-co ected auto omous thi gs. We a e o t ack to be ca bo eut al i all di ect a d i di ect emissio s (scopes 1 a d 2), p oduct t a spo tatio , busi ess t avel, a d employee commuti g emissio s (ou scope 3 focus), a d to achieve ou 100% e ewable elect icity sou ci g goal by the e d of 2027. Fu the i fo matio ca be fou d at www.st.com.
| Ju e 27, | Ju e 28, | 2026 | 2025 | (U audited) | (U audited) | Net sales | 3,481 | 2,745 | Othe eve ues | 6 | 21 | Cost of sales | (2,272) | (1,840) | Selli g, ge e al a d admi ist ative expe ses | (444) | (420) | Resea ch a d developme t expe ses | (551) | (514) | Othe i come a d expe ses, et | 25 | 65 | Impai me t, est uctu i g cha ges a d othe elated phase-out costs | (58) | (190) | Total ope ati g expe ses | (1,028) | (1,059) | I te est i come | 41 | 60 | I te est expe se | (15) | (15) | Othe compo e ts of pe sio be efit costs | (4) | (5) | Gai (loss) o fi a cial i st ume ts, et | 46 | (19) | I come tax be efit (expe se) | (30) | 18 | Net i come att ibutable to o co t olli g i te est | (3) | (3) |
| Ju e 27, | Ju e 28, | 2026 | 2025 | (U audited) | (U audited) | Net sales | 6,570 | 5,257 | Othe eve ues | 12 | 26 | Cost of sales | (4,322) | (3,516) | Selli g, ge e al a d admi ist ative expe ses | (873) | (810) | Resea ch a d developme t expe ses | (1,071) | (1,004) | Othe i come a d expe ses, et | 70 | 115 | Impai me t, est uctu i g cha ges a d othe elated phase-out costs | (129) | (198) | Total ope ati g expe ses | (2,003) | (1,897) | I te est i come | 80 | 122 | I te est expe se | (28) | (29) | Othe compo e ts of pe sio be efit costs | (8) | (9) | Gai o fi a cial i st ume ts, et | 7 | 6 | I come tax be efit (expe se) | (40) | 4 | Net i come att ibutable to o co t olli g i te est | (9) | (5) |
| Ju e 27, | Ma ch 28, | Decembe 31, | 2026 | 2026 | 2025 | (U audited) | (U audited) | (Audited) | Cash a d cash equivale ts | 3,096 | 1,889 | 2,837 | Sho t-te m deposits | 1,800 | 1,850 | 1,100 | Ma ketable secu ities | 1,136 | 832 | 985 | T ade accou ts eceivable, et | 2,067 | 1,820 | 1,745 | I ve to ies | 3,188 | 3,173 | 3,136 | Othe cu e t assets | 1,410 | 1,263 | 1,468 | Goodwill | 705 | 707 | 315 | Othe i ta gible assets, et | 747 | 750 | 324 | P ope ty, pla t a d equipme t, et | 10,895 | 10,959 | 11,058 | No -cu e t defe ed tax assets | 435 | 436 | 408 | Lo g-te m i vestme ts | 144 | 113 | 152 | Othe o -cu e t assets | 1,409 | 1,338 | 1,272 | Sho t-te m debt | 1,063 | 319 | 298 | T ade accou ts payable | 1,774 | 1,436 | 1,487 | Othe payables a d acc ued liabilities | 1,406 | 1,438 | 1,440 | Divide ds payable to stockholde s | 265 | 18 | 89 | Acc ued i come tax | 62 | 57 | 37 | Lo g-te m debt | 2,962 | 2,250 | 1,835 | Post-employme t be efit obligatio s | 382 | 380 | 403 | Lo g-te m defe ed tax liabilities | 58 | 58 | 60 | Othe lo g-te m liabilities | 1,010 | 1,003 | 926 | Commitme t a d co ti ge cies | Pa e t compa y stockholde s’ equity | Commo stock (p efe ed stock: 540,000,000 sha es autho ized, ot issued; commo stock: Eu o 1.04 pa value, 1,200,000,000 sha es autho ized, 911,281,920 sha es issued, 892,545,207 sha es outsta di g as of Ju e 27, 2026) | 1,157 | 1,157 | 1,157 | Additio al Paid-i Capital | 3,373 | 3,331 | 3,281 | Retai ed ea i gs | 12,888 | 13,118 | 13,082 | Accumulated othe comp ehe sive i come | 732 | 798 | 945 | T easu y stock | (506) | (636) | (637) | Total pa e t compa y stockholde s’ equity | 17,644 | 17,768 | 17,828 | No co t olli g i te est | 406 | 403 | 397 |
| Net Cash f om ope ati g activities | 502 | 534 | 354 | Net Cash used i i vesti g activities | (686) | (1,874) | (332) | Net Cash f om (used i ) fi a ci g activities | 1,392 | 398 | (191) | Net Cash i c ease (dec ease) | 1,207 | (948) | (165) | Dep eciatio & amo tizatio | 492 | 454 | 464 | Net payme t fo Capital expe ditu es | (419) | (379) | (481) | Payme t fo busi ess acquisitio | – | (895) | – | Net p oceeds f om issua ce of co ve tible bo ds | 1,490 | – | – | Divide ds paid to stockholde s | (75) | (71) | (81) | Cha ge i i ve to ies, et | (42) | (3) | (140) |
| Total OEM | 70% | 72% | 73% | 73% | 72% | Dist ibutio | 30% | 28% | 27% | 27% | 28% | 1.16 | 1.16 | 1.14 | 1.14 | 1.09 | A alog p oducts, MEMS a d Se so s (AM&S) segme t | – Net Reve ues | 1,426 | 1,318 | 1,449 | 1,434 | 1,133 | – Ope ati g I come | 144 | 161 | 235 | 221 | 85 | Powe a d Disc ete p oducts (P&D) segme t | – Net Reve ues | 464 | 389 | 412 | 429 | 447 | – Ope ati g I come (Loss) | (99) | (84) | (124) | (67) | (56) | Embedded P ocessi g (EMP) segme t | – Net Reve ues | 1,147 | 975 | 1,015 | 976 | 847 | – Ope ati g I come | 226 | 164 | 195 | 161 | 114 | RF Optical Commu icatio s (RFOC) segme t | – Net Reve ues | 445 | 409 | 449 | 345 | 336 | – Ope ati g I come | 94 | 61 | 105 | 57 | 60 | – Net Reve ues | 5 | 4 | 4 | 3 | 3 | – Ope ati g I come (Loss) | (178) | (232) | (286) | (192) | (336) |
(a) Net eve ues of Othe s i clude eve ues f om sales of assembly se vices a d othe eve ues. Ope ati g i come (loss) of Othe s i clude items such as u used capacity cha ges, i cludi g i cide ts leadi g to powe outage, impai me t, est uctu i g cha ges a d othe elated phase-out costs, ma ageme t eo ga izatio costs, sta t-up costs, a d othe u allocated i come (expe ses) such as: st ategic o special esea ch a d developme t p og ams, ce tai co po ate-level ope ati g expe ses, pate t claims a d litigatio s, a d othe costs that a e ot allocated to epo table segme ts, ope ati g ea i gs of othe p oducts as well as PPA effects f om the acquisitio of NXP’s MEMS se so busi ess. With additio al cost eleme ts i cluded i the table below:
| (US$ m) |
The suppleme tal o -U.S. GAAP i fo matio p ese ted i this p ess elease is u audited a d subject to i he e t limitatio s. Such o -U.S. GAAP i fo matio is ot based o a y comp ehe sive set of accou ti g ules o p i ciples a d should ot be co side ed as a substitute fo U.S. GAAP measu es. Also, ou suppleme tal o -U.S. GAAP fi a cial i fo matio may ot be compa able to simila ly titled o -U.S. GAAP measu es used by othe compa ies. Fu the , specific limitatio s fo i dividual o -U.S. GAAP measu es, a d the easo s fo p ese ti g o -U.S. GAAP fi a cial i fo matio , a e set fo th i the pa ag aphs below. To compe sate fo these limitatio s, the suppleme tal o -U.S. GAAP fi a cial i fo matio should ot be ead i isolatio , but o ly i co ju ctio with ou co solidated fi a cial stateme ts p epa ed i acco da ce with U.S. GAAP.
ST believes that these o -U.S. GAAP fi a cial measu es p ovide useful i fo matio fo i vesto s a d ma ageme t because they offe , whe ead i co ju ctio with ST’s U.S. GAAP fi a cials, (i) the ability to make mo e mea i gful pe iod-to-pe iod compa iso s of ST’s o -goi g ope ati g esults, (ii) the ability to bette ide tify t e ds i ST’s busi ess a d pe fo m elated t e d a alysis, a d (iii) to facilitate a compa iso of ST’s esults of ope atio s agai st i vesto a d a alyst fi a cial models a d valuatio s, which may exclude these items.
Ope ati g i come befo e impai me t, est uctu i g cha ges a d othe elated phase-out costs, a d othe ce tai items, is used by ma ageme t to help e ha ce a u de sta di g of o goi g ope atio s a d to commu icate the impact of the excluded items, such as impai me t, est uctu i g cha ges a d othe elated phase-out costs, a d PPA effects. No -U.S. GAAP g oss p ofit is also used by ma ageme t to commu icate the impact of PPA effects o g oss ma gi . Adjusted et ea i gs a d ea i gs pe sha e (EPS) a e used by ma ageme t to help e ha ce a u de sta di g of o goi g ope atio s a d to commu icate the impact of the excluded items like impai me t, est uctu i g cha ges a d othe elated phase-out costs a d othe ce tai items, such as PPA effects, et of the eleva t tax impact.
| Impai me t, est uctu i g cha ges a d othe elated phase-out costs | – | 58 | 58 | PPA effects of NXP’s MEMS se so busi ess acquisitio | 14 | 24 | 24 | Estimated i come tax effect | – | – | (13) |
Net Fi a cial Positio , a o -U.S. GAAP measu e, ep ese ts the diffe e ce betwee ou total liquidity a d ou total fi a cial debt. Ou total liquidity i cludes cash a d cash equivale ts, est icted cash, if a y, sho t-te m deposits, a d ma ketable secu ities, a d ou total fi a cial debt i cludes sho t-te m debt a d lo g-te m debt, as epo ted i ou Co solidated Bala ce Sheets. ST also p ese ts adjusted et fi a cial positio as a o -U.S. GAAP measu e, to take i to co side atio the effect o total liquidity of adva ces eceived o capital g a ts fo which capital expe ditu es have ot bee i cu ed yet.
ST believes its Net Fi a cial Positio a d Adjusted Net Fi a cial Positio p ovide useful i fo matio fo i vesto s a d ma ageme t because they give evide ce of ou global positio eithe i te ms of et i debted ess o et cash by measu i g ou capital esou ces based o cash a d cash equivale ts, est icted cash, if a y, sho t-te m deposits a d ma ketable secu ities a d the total level of ou fi a cial debt. Ou defi itio s of Net Fi a cial Positio a d Adjusted Net Fi a cial Positio may diffe f om defi itio s used by othe compa ies, a d the efo e, compa ability may be limited.
| (US$ m) | Cash a d cash equivale ts | 3,096 | 1,889 | 2,837 | 1,999 | 1,616 | Sho t te m deposits | 1,800 | 1,850 | 1,100 | 1,450 | 1,650 | Ma ketable secu ities | 1,136 | 832 | 985 | 1,327 | 2,363 | Sho t-te m debt (b) | (1,063) | (319) | (298) | (256) | (1,006) | Lo g-te m debt (a) (b) | (2,962) | (2,250) | (1,835) | (1,910) | (1,951) | Adva ces eceived o capital g a ts | (306) | (316) | (333) | (345) | (361) |
(a) Total liquidity a d lo g-te m debt i c eased followi g the issua ce of a ew $1.5 billio dual-t a che se io u secu ed co ve tible bo ds.(b) Lo g-te m debt co tai s sta da d co ditio s but does ot impose mi imum fi a cial atios. Committed c edit facilities fo $1,191 millio equivale t a e cu e tly u d aw . Sho t-te m debt i cludes $750 millio afte the a ou ceme t of the ea ly edemptio of the co ve tible bo ds due 2027.
ST p ese ts Net Capex as a o -U.S. GAAP measu e, which is epo ted as pa t of ou F ee Cash Flow ( o -U.S. GAAP measu e), to take i to co side atio the effect of adva ces f om capital g a ts eceived o p io pe iods allocated to p ope ty, pla t a d equipme t i the epo ti g pe iod.
Net Capex, a o -U.S. GAAP measu e, is defi ed as (i) Payme t fo pu chase of ta gible assets, as epo ted plus (ii) P oceeds f om sale of ta gible assets, as epo ted plus (iii) P oceeds f om capital g a ts a d othe co t ibutio s, as epo ted plus (iv) Adva ces f om capital g a ts allocated to p ope ty, pla t a d equipme t i the epo ti g pe iod.
ST believes Net Capex p ovides useful i fo matio fo i vesto s a d ma ageme t because a ual capital expe ditu es budget i cludes the effect of capital g a ts. Ou defi itio of Net Capex may diffe f om defi itio s used by othe compa ies, a d the efo e, compa ability may be limited.
| (US$ m) | Payme t fo pu chase of ta gible assets, as epo ted | (453) | (549) | (518) | (431) | (574) | P oceeds f om sale of ta gible assets, as epo ted | – | 3 | – | 3 | 4 | P oceeds f om capital g a ts a d othe co t ibutio s, as epo ted | 34 | 167 | 111 | 11 | 89 | Adva ces f om capital g a ts allocated to p ope ty, pla t a d equipme t | 10 | 17 | 12 | 16 | 16 |
F ee Cash Flow, which is a o -U.S. GAAP measu e, is defi ed as (i) et cash f om ope ati g activities plus (ii) Net Capex plus (iii) payme t fo pu chase (a d p oceeds f om sale) of i ta gible a d fi a cial assets a d (iv) et cash paid fo busi ess acquisitio s, if a y.
ST believes F ee Cash Flow p ovides useful i fo matio fo i vesto s a d ma ageme t because it measu es ou capacity to ge e ate cash f om ou ope ati g a d i vesti g activities to sustai ou ope atio s.
F ee Cash Flow eco ciles with the total cash flow a d the et cash i c ease (dec ease) by i cludi g the payme t fo pu chases of (a d p oceeds f om matu ed) ma ketable secu ities a d et i vestme t i (a d p oceeds f om) sho t-te m deposits, the et cash f om (used i ) fi a ci g activities a d the effect of cha ges i excha ge ates, a d by excludi g the adva ces f om capital g a ts eceived o p io pe iods allocated to p ope ty, pla t a d equipme t i the epo ti g pe iod. Ou defi itio of F ee Cash Flow may diffe f om defi itio s used by othe compa ies, a d the efo e, compa ability may be limited.
| (US$ m) | Net cash f om ope ati g activities | 502 | 534 | 674 | 549 | 354 | Net Capex | (409) | (362) | (395) | (401) | (465) | Payme t fo pu chase of i ta gible assets, et of p oceeds f om sale | (31) | (17) | (20) | (18) | (41) | P oceeds f om (payme t fo ) fi a cial assets | 13 | 17 | (2) | – | – | Payme t fo busi ess acquisitio s(a) | – | (895) | – | – | – |
(a) Q126 F ee cash flow i cludes $895 millio cash-out elated to the acquisitio of NXP MEMS se so busi ess.
1 No -U.S. GAAP. See Appe dix fo eco ciliatio to U.S. GAAP a d i fo matio explai i g why the Compa y believes these measu es a e impo ta t.1 No -U.S. GAAP. See Appe dix fo eco ciliatio to U.S. GAAP a d i fo matio explai i g why the Compa y believes these measu es a e impo ta t.2 Q226 A alog p oducts, MEMS a d Se so s (AM&S) segme t i cluded eve ues associated with NXP’s MEMS se so busi ess.
3 No -U.S. GAAP. See Appe dix fo eco ciliatio to U.S. GAAP a d i fo matio explai i g why the Compa y believes these measu es a e impo ta t.2 Q126 F ee cash flow i cludes $895 millio cash-out elated to the acquisitio of NXP MEMS se so busi ess.
