Fourth quarter of 2008 cash flow data are estimated following a delayed calendar for the final closing of the cash flow statement due to the purchase accounting of business combinations.
Capital expenditures were $204 million during the fourth quarter of 2008, compared to $247 million in the prior quarter and $405 million in the year-ago quarter. For the full year, capital expenditures were $981 million, or 10.0% of net sales, compared to $1.14 billion or 11.4% of net sales in 2007.
In the 2008 fourth quarter, ST completed its authorized share repurchase plan and repurchased $82 million of common stock, as well as paid $79 million in dividends. For the first quarter 2009 the global ex-dividend date will be February 23, 2009 and the dividend of $0.09 is planned to be paid on or after this date, in accordance with the schedule previously announced on April 2, 2008.
Inventory was $1.84 billion at quarter end and reflected increased levels due to the sharp decrease in sales volumes in the fourth quarter 2008 and differences in the anticipated mix of products sold.
At December 31, 2008, ST's cash and cash equivalents, marketable securities (current and non-current), short-term deposits and restricted cash equaled $2.15 billion. Total debt was $2.70 billion. ST's net financial position* was a net debt of $0.55 billion. Shareholders' equity was $8.16 billion.
*Non-US GAAP metrics used above and below are defined as:
Net operating cash flow is utilized by the Company's management as a measure of cash-generation capability. It is defined as net cash from operating activities ($388 million in the fourth quarter of 2008) minus net cash used in investing activities (-$171 million in the fourth quarter of 2008) excluding payments for purchase of and proceeds from the sale of marketable securities ($64 million in the fourth quarter of 2008) and the proceeds from matured short-term deposits and restricted cash.
Clean earnings per share is used by the Company's management to help enhance an understanding of ongoing operations and to communicate the impact of the excluded items. Clean earnings in full year 2008 ($356 million or $0.40 per share) excludes restructuring and impairment charges ($481 million), the impact of purchase accounting (such as in-process R&D costs ($97 million) and inventory step-up charges ($88 million)), other-than-temporary impairment charges on financial assets ($138 million) and impairment related to equity investments ($480 million), net of the relevant tax impact ($141 million).
Net financial position is used by the Company's management to help assess financial flexibility. It is defined as cash and cash equivalents, marketable securities (current and non-current), short-term deposits and restricted cash ($2,152 million) minus total debt (current portion of long-term debt $143 million plus long-term debt $2,554 million).
Net Revenues by Market Segment for Q4 2008
The following table estimates, within a variance of 5% to 10% in the absolute dollar amount, the relative weighting of each of the Company's target market segments for the 2008 fourth quarter.
As % of Net Revenues Q4 2008 Market Segment Automotive 12.6% Consumer 17.0% Computer 15.5% Telecom 38.2% Industrial & Other 16.7%
Both sequentially and year-over-year, all market segments posted declines reflecting the global economic slowdown. On a sequential basis, Automotive was lower by 21% and Telecom by 20%, followed by Computer which decreased 14%, Industrial by 10% and Consumer by 8%. In comparison to the year-ago quarter, Automotive declined 27%, followed by Computer which decreased by 20%, Telecom by 17%, Consumer by 12% and Industrial by 8%.
Q4 2008 Financial and Operating Data by Product Segment
The following table provides a breakdown of revenues and operating income by product segment.
In Million US$ and % Q4 2008 Product Segment ----------------------------------- Net % of Net Operating Revenues Revenues income (loss) ACCI (Auto/Cons./Comp./Telecom Infra. Product Groups) 899 39.5% (3) IMS (Industrial and Multisegment Product Sector) 791 34.8% 85 WPS (Wireless Product Sector) 575 25.2% (82) Others (a) (b) 11 0.5% (139) TOTAL 2,276 100% (139) (a) Net revenues of "Others" include revenues from sales of Subsystems and other revenues. (b) Operating income (loss) of "Others" includes items such as impairment, restructuring charges, and other related closure costs, start-up costs, and other unallocated expenses such as: strategic or special research and development programs, acquired in-process R&D and other purchase accounting impacts, certain corporate-level operating expenses, patent claims and litigations, and the other costs that are not allocated to product groups, as well as operating earnings or losses of the Subsystems and Other Products Group. The fourth quarter 2008 "Others" include a $31 million charge due to purchase accounting items and $91 million of impairment and restructuring charges.