Additional financial information
During the fourth quarter Ericsson and ST waived their credit of $1546millionunder the parents' loan.
Non-GAAP net income in the fourth quarter 2012 was $71 million, includinggainfrom the debt forgiveness, impairment of intangible assets and writeoff ofcertain deferred tax assets.
The net financial position(2) )at the end of the fourth quarter waspositive $37million, reflecting the cancellation of the parents' loan facility.
Inventory decreased by $33 million reaching $147 million at the endof thefourth quarter.Net operating cash flow decreased slightly, reaching a negative $152million.
The fourth quarter 2012 closing is based on a going concern assumption. Inthemonth of December 2012 ST-Ericsson shareholders issued press releases abouttheir future intent with respect to ST-Ericsson. Following the uncertaintyresulting from these announcements we cannot exclude that the ST-EricssonFinancial Statements could be further negatively affected by ST-Ericsson'sfuture scenario.
Outlook
For the first quarter 2013, ST-Ericsson expects a very significantsequentialdecline in net sales, mainly resulting, in addition to the firstquarterseasonality, from a combination of no revenues from licensing expectedin thequarter and further weakening of legacy product sales.
Highlights - Recent products, technology and wins* Products * Samples of ST-Ericsson's first FD-SOI product became available in December and the NovaThor L8580 ModAp platform was announced on January 7, 2013. The NovaThor L8580 ModAp is a multimode LTE-enabled integrated smartphone platform which features an eQuad-powered application processor running at up to 2.5Ghz and includes a full connectivity suite.* Customers * Samsung GALAXY S III mini is powered by an ST-Ericsson NovaThor ModAp, making it the fourth Samsung smartphone using the NovaThor platform.* Partners/technology * With the new NovaThor L8580 ModAp ST-Ericsson introduced eQuad technology. eQuad is a CPU architecture in which each processor core can operate as an industry-leading high performance core or a very low-power core for less computing-intensive tasks running at 0.6V. This is achieved by transistor-level electrical bias switching to allow each of two physical cores to run in two different modes, creating an electrically-enabled quad core. The eQuad processor delivers both the fastest processor speed at 2.5Ghz as well as by far the industry leading power efficiency with cores running at 1Ghz at only 0.65V. * ST-Ericsson tested and demonstrated its VoLTE (Voice over LTE) technology with key operators during the quarter. A white paper was published discussing VoLTE battery life and the benefits to be expected in upcoming modem generations such as ST-Ericsson solutions. * ST-Ericsson published a white paper on IMS Fusion. Through the invention of IMS Fusion, ST-Ericsson makes it possible for mobile devices to support an arbitrary number of downloaded or pre-installed IMS apps. This solves the problem of multiple IMS registrations without the need for a new modem API. * ST-Ericsson announced that it is ready to support Jolla's Sailfish OS in its NovaThor platforms.Financial results appendix (unaudited)Annual financial results 2012 2011 $ million ACTUAL ACTUAL Income Statement * NET SALES 1351 1650 OPERATING INCOME/(LOSS) ADJUSTED(1)) for: (814) (732) - amortization of acquisition-related intangibles (75) (101) - restructuring charges (89) (34) OPERATING INCOME / (LOSS) as reported (978) (867) NON-GAAP NET INCOME / (LOSS) (749)** (841)--------------------------------------------------------------------------2012 financial results by quarter $ million Q4 2012 Q3 2012 Q2 2012 Q1 2012 Income Statement * NET SALES 358 359 344 290 OPERATING INCOME/(LOSS) ADJUSTED(1)) for: (133) (148) (235) (297) - amortization of acquisition-related intangibles (19) (19) (19) (19) - restructuring charges (17) (7) (56) (10) OPERATING INCOME / (LOSS) as reported (169) (174) (309) (326) NON-GAAP NET INCOME / (LOSS) 71** (190) (318) (312)---------------------------------------------------------------------------* Please refer to footnote n. 4 on page 6** Includes $1531 million gain from shareholders' debt forgiveness and$1060 million charges for impairment of goodwill and intangible assetsConsolidated balance sheet * In $ million December 31, 2012 December 31, 2011 ASSETS Current assets: Cash and cash equivalents 37 9 Trade accounts receivable, net 35 97 Inventories, net 147 223 Deferred tax assets 1 8 Other receivables and assets 90 102 --------------------- Total current assets 309 439 Goodwill 0 745 Other intangible assets, net 12 437 Property, plant and equipment, net 286 364 Long-term deferred tax assets 8 188 Other investments and other non-current assets 44 70 --------------------- 349 1,804 Total assets 659 2,243 --------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term borrowings and current portion of long-term debt 0 807 Trade accounts payable 155 175 Other payables and accrued liabilities 253 292 Deferred tax liabilities 0 0 Accrued income tax 6 8 --------------------- Total current liabilities 414 1,282 Reserve for pension and termination indemnities 85 87 Long-term deferred tax liabilities 0 3 Other non-current liabilities 29 25 --------------------- 114 115 Total liabilities 528 1,397 Total equity 131 846 --------------------- Total equity and liabilities 659 2,243 --------------------- ------------------------------------------------* Please refer to footnote n. 4 on page 6
