1995 ANNUAL REPORT
SGS-THOMSON Microelectronics N.V.
Notes to Consolidated Financial Statements
As of December 31, 1995, 1994 and 1993
(Currency -- Thousands of U.S. dollars)
1. THE
COMPANY
2. SUMMARY OF ACCOUNTING POLICIES
3. CONSOLIDATED ENTITIES
4.
CASH AND CASH EQUIVALENTS
5.
TRADE ACCOUNTS AND NOTES RECEIVABLE
6. INVENTORIES
7.
OTHER RECEIVABLES AND CURRENT ASSETS
8. GOODWILL
9.
OTHER INTANGIBLE ASSETS
10. PROPERTY, PLANT AND EQUIPMENT
11. INVESTMENTS AND OTHER NON-CURRENT ASSETS
12. SHAREHOLDERS' EQUITY
13. RESERVES FOR PENSION AND TERMINATION
INDEMNITIES
14. OTHER NON-CURRENT LIABILITIES
15.
LONG-TERM DEBT
16. OTHER PAYABLES AND ACCRUED LIABILITIES
17. OTHER REVENUES
18. PERSONNEL
19. RESTRUCTURING COSTS
20. OTHER INCOME AND EXPENSES
21.
NET INTEREST EXPENSES
22. INCOME TAX
23. CREDIT FACILITIES
24. CAPITAL AND OPERATING LEASES
25. FINANCIAL INSTRUMENTS
26. OTHER COMMITMENTS AND CONTINGENCIES
27. RELATED PARTY TRANSACTIONS
28. SEGMENT INFORMATION
1. THE COMPANY
SGS-THOMSON Microelectronics N.V. (the "Company")
was formed in 1987 by the combination of the semicon- ductor business of SGS
Microelettronica (then owned by Società Finanziaria Telefonica S.p.A.
(S.T.E.T.), an Italian corporation) and the non-military business of Thomson
Semiconducteurs (then owned by Thomson-CSF, a French corporation), whereby each
company contributed their respective semiconductor businesses in exchange for a
50% interest in the Company.
The Company is registered in the Netherlands
with its statutory domicile in Amsterdam.
As of December 31, 1995, the Company was
69.36% (December 31, 1994: 80.89%) owned by
SGS-THOMSON Microelectronics
Holding II B.V., 0% by Thorn EMI plc (December 31, 1994: 2.78%) and 30.64% by
the public (December 31, 1994: 16.33%).
At December 31, 1995, SGS-THOMSON
Microelectronics Holding II B.V. was 100% owned by SGS-THOMSON Microelectronics
Holding N.V.
At December 31, 1995 and at December 31, 1994,
SGS-THOMSON Microelectronics Holding N.V. was owned:
50% by FT2CI, a French holding
company, whose shareholders in turn are FT1CI (50.1%) and Thomson-CSF
(49.9%); FT1CI, a French holding company, is owned by CEA-Industrie
(51%) and France Télécom (49%);
50%, (48.14% in 1993) by
M.E.I.-Microelettronica Italiana s.r.l. ("M.E.I."), an Italian
Holding company, whose shareholders are Comitato per l'intervento nella
SIR ed in settori ad alta tecnologia ("Comitato SIR")
(49.9%) and Istituto per la Ricostruzione Industriale S.p.A. (I.R.I.)
(50.1%).
The Company operates in an environment
subjected to the following risks and factors:
the highly cyclical nature of the
semiconductor industry,
the need for significant amounts of
capital and funding to undertake the research and development necessary
to meet the rapidly changing technological needs of customers,
intense competition,
costs of obtaining, protecting and
enforcing essential patents and other intellectual property rights,
a high sensibility to the U.S. dollar
exchange rate,
a certain dependence toward raw
material suppliers, mainly for silicium purchases.
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