(Appendix – continued)
Net Capex and Free Cash Flow (non-U.S. GAAP measures)
ST presents Net Capex as a non-U.S. GAAP measure, which is reported as part of our Free Cash Flow (non-US GAAP measure), to take into consideration the effect of advances from capital grants received on prior periods allocated to property, plant and equipment in the reporting period.
Net Capex, a non-U.S. GAAP measure, is defined as (i) Payment for purchase of tangible assets, as reported plus (ii) Proceeds from sale of tangible assets, as reported plus (iii) Proceeds from capital grants and other contributions, as reported plus (iv) Advances from capital grants allocated to property, plant and equipment in the reporting period.
ST believes Net Capex provides useful information for investors and management because annual capital expenditures budget includes the effect of capital grants. Our definition of Net Capex may differ from definitions used by other companies.
| (US$ m) |
Q2
2024 |
Q1
2024 |
Q4
2023 | Q3 2023 | Q2 2023 |
| Payment for purchase of tangible assets, as reported | (690) | (1,145) | (1,076) | (1,158) | (1,111) |
| Proceeds from sale of tangible assets, as reported | 1 | 2 | - | 1 | 5 |
| Proceeds from capital grants and other contributions, as reported | 143 | 149 | 278 | 5 | 34 |
| Advances from capital grants allocated to property, plant and equipment | 18 | 27 | - | - | - |
| Net Capex | (528) | (967) | (798) | (1,152) | (1,072) |
Free Cash Flow, which is a non-U.S. GAAP measure, is defined as (i) net cash from operating activities plus (ii) Net Capex plus (iii) payment for purchase (and proceeds from sale) of intangible and financial assets and (iv) net cash paid for business acquisitions, if any.
