1995 ANNUAL REPORT
SGS-THOMSON Microelectronics N.V.
Financial Highlights
| Twelve months ended December 31, | |||||
| (in millions, except per share data) | 19911 | 1992 | 19931 | 19941 | 19951 |
| Consolidated Statement of Income Data: | |||||
| Net revenues | $1,374.0 | $ 1,568.1 | $2,037.5 | $2,644.9 | $3,554.4 |
| Cost of sales(2) | (995.2) | (1,051.6) | (1,248.4) | (1,528.7) | (2,096.0) |
| Gross profit(2) | 378.8 | 516.5 | 789.1 | 1,116.2 | 1,458.4 |
| Total operating expenses(3) | (410.7) | (464.7) | (573.6) | (683.2) | (807.4) |
| Operating profit (loss) | (31.9) | 51.8 | 215.5 | 433.0 | 651.0 |
| Net interest expenses/other(4) | (68.2) | (46.5) | (37.8) | (21.0) | (16.8) |
| Profit (loss) before tax | (100.1) | 5.3 | 177.7 | 412.0 | 634.2 |
| Income tax | (2.5) | (2.3) | (17.6) | (49.5) | (108.3) |
| Profit (loss) before minority interests | (102.6) | 3.0 | 160.1 | 362.5 | 525.9 |
| Minority interests(5) | 0 | 0 | 0 | 0 | 0.6 |
| Net earnings (loss) | $(102.6) | $3.0 | $160.1 | $362.5 | $526.5 |
| Net earnings (loss) per share(6) | $(1.93) | $0.06 | $1.92 | $04 | $ 4.03 |
| Weighed average shares outstanding | 53.3 | 53.6 | 83.5 | 119.4 | 130.6 |
| Consolidated Balance Sheet Data (end of period): | |||||
| Cash, cash equivalents and marketable securities | $48.4 | $99.5 | $327.4 | $461.5 | $ 758.4 |
| Working capital | 549.7 | 467.7 | 390.0 | 291.1 | 417.4 |
| Total assets | 1,896.5 | 1,842.3 | 2,240.9 | 3,224.7 | 4,486.0 |
| Short-term debt .(including current portion of long-term debt) | 340.8 | 360.6 | 231.1 | 322.5 | 492.8 |
| Long-term debt (excluding current portion)(1) | 612.6 | 547.6 | 374.8 | 277.2 | 200.7 |
| Shareholders' equity(1) | 479.9 | 412.9 | 1,004.0 | 1,680.0 | 2,661.7 |
(1)In October 1995, the Company completed a second public offering with net proceeds to the Company of approximately $371.6 million. In December 1994, the Company completed an Initial Public Offering with net proceeds to the Company of approximately $198.7 million. In 1993, the Company received a $500 million capital contribution that was effected in two steps, $250 million in May and $250 million in September. The Company also received a $100 million capital contribution in each of 1988, 1989 and 1991.
(2)Cost of sales is net of certain third-party funding for industrialization costs (which include certain costs incurred to bring prototype products to the production stage) included therein. See Note 20 to the Consolidated Financial Statements. For a discussion of certain significant charges reflected in cost of sales in 1993, 1994 and 1995, see "Management's Discussion and Analysis of Financial Condition and Results of Operations--Results of Operations."
(3)Includes, among other things, third-party funding for research and development, the expenses for which are reflected in research and development expenses, as well as foreign currency gains and losses, fab start-up costs, patent license payments received and patent costs incurred. For a discussion of third-party funding (principally by the French and Italian governments) and low interest financing for research and development and other matters, see "Description of Business--State Support for the Semiconductor Industry." The Company's reported research and development expenses do not include design center, process engineering, pre-production or industrialization costs.
(4)Includes mainly net interest expenses, plus a gain on disposal of an investment in 1992.
(5)In 1994, the Company created a joint venture with a subsidiary of the Shenzhen Electronics Group ("SEG"). the Company owns a 60% interest in the joint venture, with a subsidiary of SEG owning the remaining 40%.
(6)Net earnings (loss) per share amounts have been restated to reflect a 40:1 stock split effected in connection with the Initial Public Offering.
