| (a) Net revenues of Others includes revenues from sales assembly services and other revenue. Operating income (loss) of Others includes items such as unused capacity charges, impairment, restructuring charges and other related closure costs, management reorganization costs, phase out and start-up costs, and other unallocated expenses such as: strategic or special research and development programs, certain corporate-level operating expenses, patent claims and litigations, and other costs that are not allocated to product groups, as well as operating earnings of other products. Others includes: |
| (US$ m) | Q1 2019 | Q4 2018 | Q3 2018 | Q2 2018 | Q1 2018 |
| Unused Capacity Charges | 1 | - | - | - | 1 |
| Impairment & Restructuring Charges | - | 2 | - | - | 21 |
(Appendix - continued)
STMicroelectronics
Supplemental Non-U.S. GAAP Financial Information
U. S. GAAP - Non-U.S. GAAP Reconciliation
The supplemental non-U.S. GAAP information presented in this press release is unaudited and subject to inherent limitations. Such non-U.S. GAAP information is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for U.S. GAAP measurements. Also, our supplemental non-U.S. GAAP financial information may not be comparable to similarly titled non-U.S. GAAP measures used by other companies. Further, specific limitations for individual non-U.S. GAAP measures, and the reasons for presenting non-U.S. GAAP financial information, are set forth in the paragraphs below. To compensate for these limitations, the supplemental non-U.S. GAAP financial information should not be read in isolation, but only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP.
Operating income (loss) before impairment and restructuring charges and one-time items is used by management to help enhance an understanding of ongoing operations and to communicate the impact of the excluded items, such as impairment, restructuring charges and other related closure costs. Adjusted net earnings and earnings per share (EPS) are used by management to help enhance an understanding of ongoing operations and to communicate the impact of the excluded items like impairment, restructuring charges and other related closure costs attributable to ST and other one-time items, net of the relevant tax impact.
The Company believes that these non-U.S. GAAP financial measures provide useful information for investors and management because they measure the Company's capacity to generate profits from its business operations, excluding the effect of acquisitions and expenses related to the rationalizing of its activities and sites that it does not consider to be part of its on-going operating results, thereby offering, when read in conjunction with the Company's U.S. GAAP financials, (i) the ability to make more meaningful period-to-period comparisons of the Company's on-going operating results, (ii) the ability to better identify trends in the Company's business and perform related trend analysis, and (iii) an easier way to compare the Company's results of operations against investor and analyst financial models and valuations, which usually exclude these items.
| (US$ m, except earnings per share data) | Q1 2019 | Q4 2018 | Q3 2018 | Q2 2018 | Q1 2018 |
| U.S. GAAP Net Earnings | 178 | 418 | 369 | 261 | 239 |
| U.S. GAAP Earnings Per Share | 0.20 | 0.46 | 0.41 | 0.29 | 0.26 |
| Impairment & Restructuring | - | 2 | - | - | 21 |
| Estimated Income Tax Effect | - | - | - | - | (3) |
| Non-U.S. GAAP Net Earnings | 178 | 420 | 369 | 261 | 257 |
| Non-U.S. GAAP Earnings Per Share | 0.20 | 0.46 | 0.41 | 0.29 | 0.28 |
(Appendix - continued)
Net financial position (non-U.S. GAAP measure): resources (debt), represents the balance between our total liquidity and our total financial debt. Our total liquidity includes cash and cash equivalents, restricted cash, short-term deposits and marketable securities, and our total financial debt includes short-term borrowings, current portion of long-term debt and long-term debt, all as reported in our consolidated balance sheet. We believe our net financial position provides useful information for investors and management because it gives evidence of our global position either in terms of net indebtedness or net cash position by measuring our capital resources based on cash and cash equivalents, restricted cash, short-term deposits and marketable securities and the total level of our financial indebtedness.
| (US$ m) | Mar 30 2019 | Dec 31 2018 | Sep 29
2018 | Jun 30
2018 | Mar 31 2018 |
| Cash and cash equivalents | 2,307 | 2,266 | 1,835 | 1,683 | 1,791 |
| Restricted Cash | 60 | - | - | - | - |
| Short term deposits | - | - | 8 | 15 | 14 |
| Marketable securities | 331 | 330 | 328 | 429 | 429 |
| Total liquidity | 2,698 | 2,596 | 2,171 | 2,127 | 2,234 |
| Short-term debt | (173) | (146) | (117) | (118) | (119) |
| Long-term debt | (2,015) | (1,764) | (1,607) | (1,598) | (1,593) |
| Total financial debt | (2,188) | (1,910) | (1,724) | (1,716) | (1,712) |
| Net financial position | 510 | 686 | 447 | 411 | 522 |
Free cash flow (non-U.S. GAAP measure) is defined as net cash from operating activities minus net cash from (used in) investing activities, excluding payment for purchases (proceeds from the sale of) marketable securities and short-term deposits. We believe free cash flow provides useful information for investors and management because it measures our capacity to generate cash from our operating and investing activities to sustain our operating activities. Free cash flow does not represent total cash flow since it does not include the cash flows generated by or used in financing activities. In addition, our definition of free cash flow may differ from definitions used by other companies.
