Infineon Reports Increased Revenues and Earnings for Fourth Quarter and Fiscal Year 2004
MUNICH, Germany--Nov. 9, 2004--Infineon :-- Fourth quarter revenues were Euro 1.99 billion, up 4 percent sequentially, reflecting higher sales in all segments, except Memory Products.
-- Net income in the fourth quarter was Euro 44 million, up from a net loss of Euro 56 million sequentially; fourth quarter EBIT increased to Euro 113 million, up from Euro 2 million in the prior quarter. EBIT was negatively affected by impairment and antitrust related charges of Euro 132 million in the fourth quarter compared to Euro 186 million in the prior quarter.
-- Fiscal year 2004 revenues were Euro 7.19 billion, up 17 percent year-on-year, reflecting higher demand in all segments but Wireline Communications.
-- Net income for fiscal year 2004 was Euro 61 million, up from a net loss of Euro 435 million last year; EBIT increased to Euro 256 million in fiscal year 2004, up from an EBIT loss of Euro 299 million in 2003, despite impairment and antitrust related charges of Euro 345 million in fiscal year 2004 compared to Euro 126 million in fiscal year 2003.
-- For fiscal year 2004, cash flow from operations increased to Euro 1.86 billion, up from Euro 730 million in 2003. Free cash flow in 2004 was Euro 206 million, significantly improved from a negative Euro 53 million in 2003.
In Euro million 3 3 + /- in % 3 +/-
months months sequential months in %
ended ended ended year-
Sep 30, June Sep 30, on-
2004 30, 2003 year
2004
----------------------------- ------- ------- ---------- ------- -----
Revenues 1,993 1,908 +4% 1,756 +13%
----------------------------- ------- ------- ---------- ------- -----
Net income (loss) 44 (56) +++ 49 -10%
----------------------------- ------- ------- ---------- ------- -----
EBIT 113 2 +++ 67 +69%
----------------------------- ------- ------- ---------- ------- -----
Earnings (loss) per share
(in Euro) 0.06 (0.08) +++ 0.07 -14%
----------------------------- ------- ------- ---------- ------- -----
In the fourth quarter of fiscal year 2004, revenues increased in all logic segments. Growth was primarily driven by strong seasonal demand for mobile solution products of the Secure Mobile Solutions segment, as well as continued strength in the Automotive & Industrial segment. All Infineon segments other than Wireline Communications recorded improved EBIT for the quarter, due to increased productivity and higher sales volumes.
In Euro million Year ended Year ended +/- in %
Sep 30, 2004 Sep 30, 2003
-------------------- ------------------- ------------------- ---------
Revenues 7,195 6,152 +17%
-------------------- ------------------- ------------------- ---------
Net income (loss) 61 (435) +++
-------------------- ------------------- ------------------- ---------
EBIT 256 (299) +++
-------------------- ------------------- ------------------- ---------
Earnings (loss) per
share (in Euro) 0.08 (0.60) +++
-------------------- ------------------- ------------------- ---------
In fiscal year 2004, Infineon increased revenues sequentially in each quarter. This improvement was driven by steadily increasing sales volumes combined with a more stable pricing environment in all segments except Wireline Communications. In addition, significant manufacturing cost reductions were achieved, resulting in the EBIT improvement of Euro 555 million despite charges of Euro 209 million in connection with US and European DRAM antitrust investigations and related potential civil claims, and impairment charges of Euro 136 million. Corresponding charges for these items in fiscal year 2003 were Euro 126 million, principally for impairment.
In fiscal year 2004, the company's effective tax rate increased mainly due to higher non-deductible expenses and additional valuation allowances.
"We were able to strongly increase revenues and operating cash flow during the last fiscal year but are not satisfied with the earnings," said Dr. Wolfgang Ziebart, CEO and President of Infineon Technologies AG. "Our primary goal for the upcoming years is to improve productivity and increase efficiency while containing our cost base. I am convinced of Infineon's extraordinary know-how, innovational strengths, and the competence of our employees. These factors, combined with the competitive position we currently have, provide a solid base to achieve this goal."
Improved cash flow in fiscal year 2004
Free cash flow in fiscal year 2004 significantly improved to Euro 206 million, increasing from a negative Euro 53 million in the previous year. The improved free cash flow reflected an increase in cash flows generated from operations in fiscal year 2004 to Euro 1.86 billion compared to Euro 730 million in 2003, partially offset by cash used for investing activities increasing to Euro 1.65 billion (excluding net purchases of marketable securities) in fiscal year 2004, up from Euro 783 million in 2003. Infineon's net cash position at the end of fiscal year 2004 amounted to Euro 548 million, increasing from Euro 261 million as of September 30, 2003. During the year, the company redeemed a notional amount of Euro 360 million of the subordinated convertible bonds, due 2007.
In the fourth quarter of fiscal year 2004, free cash flow decreased to Euro 70 million from Euro 146 million in the previous quarter, principally reflecting increased capital expenditures.
Employee Data
As of September 30, 2004, Infineon had approximately 35,600 employees worldwide, including approximately 7,200 engaged in Research and Development.
Outlook for the first quarter of fiscal year 2005
Infineon sees signs of a slowdown in several of its application segments during the first quarter of fiscal year 2005. In these markets, inventory levels have gone up as compared to the previous quarters. On average, industry experts forecast a reduction of the rate of growth of the worldwide semiconductor market from nearly 30 percent based on US dollars during calendar year 2004 to a single-digit rate of growth during calendar year 2005. This projection implies stagnation in the industry when looking at sequential average growth for the quarters of fiscal year 2005.
"During fiscal year 2004, we were able to benefit from the improved market conditions in the worldwide semiconductor industry. Without the impairment and antitrust related charges, fiscal year 2004 would have been more profitable for Infineon," commented Dr. Ziebart. "In fiscal year 2004, we showed a revenue improvement for every quarter. But now we have to prepare ourselves for a slowdown."
Business groups fourth quarter and fiscal year performance as well as outlook
Automotive & Industrial (AI)
3 months 3 months + /- in % 3 months +/- in %
In Euro ended ended sequential ended year-on-year
million Sep 30, June 30, Sep 30,
2004 2004 2003
---------- ----------- ----------- ---------- ----------- ------------
Revenues 501 473 +6% 414 +21%
---------- ----------- ----------- ---------- ----------- ------------
EBIT 76 64 +19% 39 +95%
---------- ----------- ----------- ---------- ----------- ------------
The sequential revenue increase resulted in another all-time high in revenues, and was mostly due to increased sales of products for power management & supply, high power applications and sensors. The sequential EBIT increase reflected primarily higher sales volumes in absolute figures. These results include the silicon discretes and tuner IC business transferred from the Secure Mobile Solutions segment as of the fourth quarter of fiscal year 2004.
In Euro million Year ended Year ended +/- in %
Sep 30, 2004 Sep 30, 2003
--------------- ---------------- ------------------- ----------
Revenues 1,820 1,634 +11%
--------------- ---------------- ------------------- ----------
EBIT 244 187 +30%
--------------- ---------------- ------------------- ----------
In fiscal year 2004, revenues increased in both the Automotive business, with growth in sales of power semiconductors and sensors, as well as in the areas of high power and power management & supply in the Industrial business. EBIT in fiscal year 2004 improved, mostly due to higher sales volumes and improved productivity.
Automotive & Industrial segment outlook for the first quarter of fiscal year 2005
In the automotive industry, Infineon anticipates continuing price pressure and no major market changes in demand for semiconductors. For the Industrial segment, the company sees a slightly weaker market. Due to these developments in combination with seasonal effects, Infineon expects a slight reduction in revenues and earnings in the first quarter of fiscal year 2005.
Wireline Communications (COM)
In Euro million 3 months 3 months + /- in % 3 months +/- in %
ended ended sequential ended year-on-
Sep 30, June 30, Sep 30, year
2004 2004 2003
---------------- ----------- ---------- ---------- ---------- --------
Revenues 114 104 +10% 122 -7%
---------------- ----------- ---------- ---------- ---------- --------
EBIT (110) (35) --- (8) ---
---------------- ----------- ---------- ---------- ---------- --------
The sequential revenue increase was mainly driven by higher sales of broadband access ADSL products. The EBIT loss increased sequentially mainly due to impairment charges of Euro 80 million, predominantly related to the company's acquisition of Catamaran Communications, Inc. in August 2001.
In Euro million Year ended Year ended +/- in %
Sep 30, 2004 Sep 30, 2003
--------------- -------------------- --------------------- ---------
Revenues 434 459 -5%
--------------- -------------------- --------------------- ---------
EBIT (179) (188) +5%
--------------- -------------------- --------------------- ---------
In fiscal year 2004, higher sales in the broadband access ADSL business did not fully offset lower revenues from VDSL products, the traditional telecom business and fiber optics. The EBIT increase was mainly due to continuing cost reductions. Both fiscal years were impacted significantly by impairment charges.
COM segment outlook for the first quarter of fiscal year 2005
Due to continuing pricing pressure and marketplace inventory corrections, especially in the Asian market, Infineon does not expect growth in the first quarter of fiscal year 2005. EBIT loss of Wireline Communications is expected to be significantly reduced if and when the sale of the fiber optics business to Finisar Corporation is closed.
Secure Mobile Solutions (SMS)
In Euro million 3 months 3 months + /- in % 3 months +/- in %
ended ended sequential ended year-on-
Sep 30, June 30, Sep 30, year
2004 2004 2003
--------------- ---------- ---------- ---------- ---------- ----------
Revenues 508 467 +9% 409 +24%
--------------- ---------- ---------- ---------- ---------- ----------
EBIT 47 41 +15% 9 +++
--------------- ---------- ---------- ---------- ---------- ----------
The sequential revenue improvement was mainly driven by higher demand for mobile solutions. Mobile phone manufacturers have aggressively purchased components in anticipation of a strong holiday season. The sequential EBIT increase was mostly due to higher sales volumes, especially of chips for mobile solutions. In the fourth quarter, Infineon's silicon discretes and tuner IC business was transferred to the Automotive & Industrial segment.
In Euro million Year ended Year ended +/- in %
Sep 30, 2004 Sep 30, 2003
--------------- -------------------- ------------------- ---------
Revenues 1,790 1,403 +28%
--------------- -------------------- ------------------- ---------
EBIT 124 (65) +++
--------------- -------------------- ------------------- ---------
In fiscal year 2004, revenues increased significantly, mainly due to higher demand for mobile solutions and security products, combined with a slower rate of price decline compared to the prior fiscal year. EBIT improved strongly, mostly due to higher revenues compared to the prior year, and because of the strong reduction of losses of the Microelectronics business, which Infineon acquired from Ericsson in 2002 and restructured in 2003.
Secure Mobile Solutions segment outlook for the first quarter of fiscal year 2005
With signs of a slowdown and higher marketplace inventories, especially in the Asian mobile phone market, customers have started to significantly slow down new orders. Infineon therefore anticipates a significant reduction in revenues for the first quarter of fiscal year 2005 resulting in lower capacity utilization and margin pressure. As market research institutes predict a slowdown in growth of the mobile phone market for the calendar year 2005, Infineon is cautious about the development of sales volumes and expects lower utilization rates in manufacturing throughout the 2005 fiscal year.
Memory Products (MP)
In Euro million 3 months 3 months + /- in % 3 months +/- in %
ended ended sequential ended year-on-
Sep 30, June 30, Sep 30, year
2004 2004 2003
--------------- ---------- ---------- ---------- ---------- ----------
Revenues 807 811 --- 765 +5%
--------------- ---------- ---------- ---------- ---------- ----------
EBIT 149 (50) +++ 134 +11%
--------------- ---------- ---------- ---------- ---------- ----------
The slight sequential revenue decrease of the Memory Products segment was mainly caused by lower average chip prices and a weakening of the US dollar compared to the previous quarter, which could not be completely compensated by higher sales volumes. The significant sequential EBIT increase in the fourth quarter of fiscal year 2004 was partly driven by higher bit shipments in combination with cost reductions attributable to the implementation of 110-nanometer technology that exceeded the price decline during the quarter. In the third quarter of fiscal year 2004, the EBIT loss included charges of Euro 184 million in connection with DRAM antitrust investigations.
On September 15, 2004, the company agreed to pay a fine of US dollar 160 million as part of the settlement of an antitrust investigation by the US Department of Justice, which had been accrued for in the third quarter of fiscal year 2004. The company is also subject to an inquiry by the European Commission with respect to practices in the European market for DRAM memory products. In accordance with US GAAP, the company has established additional reserves in the fourth quarter of fiscal year 2004 of Euro 18 million to cover mainly legal costs and the minimum fine that the company believes the European Commission might impose. In total, Infineon had to absorb charges in the amount of Euro 209 million in fiscal year 2004, to cover settlement payments as well as legal expenses for the antitrust matters.
In Euro million Year ended Year ended +/- in %
Sep 30, 2004 Sep 30, 2003
--------------- ------------------ ------------------- -----------
Revenues 2,926 2,485 +18%
--------------- ------------------ ------------------- -----------
EBIT 169 31 +++
--------------- ------------------ ------------------- -----------
In fiscal year 2004, the significant increase of revenues was mostly due to higher sales volumes compared to the previous year. The year-on-year EBIT increase was primarily achieved by further cost reductions as well as higher bit shipments, despite an increase in charges in connection with DRAM antitrust investigations by Euro 181 million and a lower average US dollar-to-euro exchange rate during fiscal year 2004 compared to the previous fiscal year.
Memory Products segment outlook for the first quarter of fiscal year 2005
For the first quarter of fiscal year 2005, Infineon expects business in line with normal seasonal demand. Based on additional capacities from its Inotera joint venture, and foundry partners, Infineon anticipates an increase of bit production.
Other Operating Segments
In Euro million 3 months 3 months + /- in % 3 months +/- in %
ended ended sequential ended year-on-
Sep 30, June 30, Sep 30, year
2004 2004 2003
--------------- ---------- ---------- ---------- ---------- ----------
Revenues 54 45 +20% 40 +35%
--------------- ---------- ---------- ---------- ---------- ----------
EBIT (33) (3) --- (26) -27%
--------------- ---------- ---------- ---------- ---------- ----------
In Euro million Year ended Year ended +/- in %
Sep 30, 2004 Sep 30, 2003
---------------- ------------------ ------------------- -----------
Revenues 196 139 +41%
---------------- ------------------ ------------------- -----------
EBIT (58) (49) -18%
---------------- ------------------ ------------------- -----------
The increase of the EBIT loss in the fourth quarter of fiscal year 2004, compared to the third quarter, was mainly due to higher impairment charges for terminated venture capital activities.
Corporate and Reconciliation
In Euro million 3 months 3 months + /- in % 3 months +/- in %
ended ended sequential ended year-on-
Sep 30, June 30, Sep 30, year
2004 2004 2003
--------------- ---------- ---------- ---------- ---------- ----------
Revenues 9 8 +13% 6 +50%
--------------- ---------- ---------- ---------- ---------- ----------
EBIT (16) (15) -7% (81) +80%
--------------- ---------- ---------- ---------- ---------- ----------
In Euro million Year ended Year ended +/- in %
Sep 30, 2004 Sep 30, 2003
---------------- ------------------ ------------------- ---------
Revenues 29 32 -9%
---------------- ------------------ ------------------- ---------
EBIT (44) (215) +80%
---------------- ------------------ ------------------- ---------
The significant year-on-year increase of both quarterly and yearly EBIT was mainly due to improved capacity utilization.
For major business highlights of Infineon's segments in the fourth quarter and fiscal year 2004, click http://www.infineon.com/news/
FINANCIAL INFORMATION
According to US GAAP - Unaudited
Consolidated Statements of Operations
--------- --------- --------- --------- ---------
3 months ended 12 months ended
in Euro million 30.09.03 30.06.04 30.09.04 30.09.03 30.09.04
------------------- --------- --------- --------- --------- ---------
Net sales 1,756 1,908 1,993 6,152 7,195
Cost of goods sold (1,208) (1,213) (1,238) (4,614) (4,670)
------------------- --------- --------- --------- --------- ---------
Gross profit 548 695 755 1,538 2,525
------------------- --------- --------- --------- --------- ---------
Research and
development
expenses (297) (308) (331) (1,089) (1,219)
Selling, general
and administrative
expenses (185) (194) (174) (679) (718)
Restructuring
charges, net (13) (5) (2) (29) (17)
Other operating
expense, net (17) (183) (75) (85) (257)
------------------- --------- --------- --------- --------- ---------
Operating (loss)
income 36 5 173 (344) 314
------------------- --------- --------- --------- --------- ---------
Interest (expense)
income, net (32) (24) 14 (52) (41)
Equity in (losses)
earnings of
associated
companies (6) - (18) 18 (14)
Gain (loss) on
associated company
share issuance - - 1 (2) 2
Other income
(expense), net 32 (6) (54) 21 (64)
Minority interests 5 3 11 8 18
------------------- --------- --------- --------- --------- ---------
Loss (income)
before income
taxes 35 (22) 127 (351) 215
------------------- --------- --------- --------- --------- ---------
Income tax benefit
(expense) 14 (34) (83) (84) (154)
------------------- --------- --------- --------- --------- ---------
Net income (loss) 49 (56) 44 (435) 61
------------------- --------- --------- --------- --------- ---------
Earnings (loss) per
share (EPS)
Shares in million
------------------- --------- --------- --------- --------- ---------
Weighted average
shares outstanding
- basic 721 748 748 721 735
------------------- --------- --------- --------- --------- ---------
Weighted average
shares outstanding
- diluted 732 748 748 721 737
------------------- --------- --------- --------- --------- ---------
Earnings (loss) per
share - basic and
diluted (in Euro) 0.07 (0.08) 0.06 (0.60) 0.08
------------------- --------- --------- --------- --------- ---------
EBIT
Infineon defines EBIT as earnings (loss) before interest and taxes.
Infineon management uses EBIT among other measures to establish
budgets and operational goals, to manage the Company's business and to
evaluate its performance. Infineon reports EBIT information because it
believes that it provides investors with meaningful information about
the operating performance of the company and especially about the
performance of its separate business segments.
EBIT is determined as follows from the statement of operations,
without adjustment to the US GAAP amounts presented:
--------- ---------- ---------- --------- ---------
3 months ended 12 months ended
in Euro million 30.09.03 30.06.04 30.09.04 30.09.03 30.09.04
----------------- --------- ---------- ---------- --------- ---------
Net (loss) income 49 (56) 44 (435) 61
- Income tax
(benefit)
expense (14) 34 83 84 154
- Interest
expense
(income), net 32 24 (14) 52 41
----------------- --------- ---------- ---------- --------- ---------
EBIT 67 2 113 (299) 256
----------------- --------- ---------- ---------- --------- ---------
Segment Results
-------- --------- --------
3 months ended
Net sales in Euro million 30.09.03* 30.09.04 +/- in %
-------------------------------- -------- --------- --------
Wireline Communications 122 114 (7)
Secure Mobile Solutions 409 508 24
Automotive and Industrial 414 501 21
Memory Products 765 807 5
Other 40 54 35
Corporate and Reconciliation 6 9 50
-------------------------------- -------- --------- --------
Infineon consolidated 1,756 1,993 13
-------------------------------- -------- --------- --------
-------- --------- --------
12 months ended
Net sales in Euro million 30.09.03* 30.09.04 +/- in %
-------------------------------- -------- --------- --------
Wireline Communications 459 434 (5)
Secure Mobile Solutions 1,403 1,790 28
Automotive and Industrial 1,634 1,820 11
Memory Products 2,485 2,926 18
Other 139 196 41
Corporate and Reconciliation 32 29 (9)
-------------------------------- -------- --------- --------
Infineon consolidated 6,152 7,195 17
-------------------------------- -------- --------- --------
-------- --------- --------
3 months ended
EBIT in Euro million 30.09.03* 30.09.04 +/- in %
-------------------------------- -------- --------- --------
Wireline Communications (8) (110) ----
Secure Mobile Solutions 9 47 +++
Automotive and Industrial 39 76 95
Memory Products 134 149 11
Other (26) (33) (27)
Corporate and Reconciliation (81) (16) 80
-------------------------------- -------- --------- --------
Infineon consolidated ** 67 113 69
-------------------------------- -------- --------- --------
-------- --------- --------
12 months ended
EBIT in Euro million 30.09.03* 30.09.04 +/- in %
-------------------------------- -------- --------- --------
Wireline Communications (188) (179) 5
Secure Mobile Solutions (65) 124 +++
Automotive and Industrial 187 244 30
Memory Products 31 169 +++
Other (49) (58) (18)
Corporate and Reconciliation (215) (44) 80
-------------------------------- -------- --------- --------
Infineon consolidated ** (299) 256 +++
-------------------------------- -------- --------- --------
* Prior period segment results are reclassified to be consistent with
the current period presentation and organizational structure.
** Includes acquisition related expenses (amortization of acquired
intangible assets, deferred compensation and in-process R&D) of
Euro 13 million and Euro 78 million for the three months ended
30.09.2003 and 30.09.2004 (primarily SMS and COM), respectively,
as well as Euro 112 million and Euro 111 million for financial
years ended 30.09.2003 and 30.09.2004, respectively (primarily SMS
and COM).
--------------------------------
3 months ended
Net sales in Euro million 30.06.04* 30.09.04 +/- in %
------------------------------------- --------- ----------------------
Wireline Communications 104 114 10
Secure Mobile Solutions 467 508 9
Automotive and Industrial 473 501 6
Memory Products 811 807 ---
Other 45 54 20
Corporate and Reconciliation 8 9 13
------------------------------------- --------- ----------------------
Infineon consolidated 1,908 1,993 4
------------------------------------- --------- ----------------------
--------------------------------
3 months ended
EBIT in Euro million 30.06.04* 30.09.04 +/- in %
------------------------------------- --------- ----------------------
Wireline Communications (35) (110) ---
Secure Mobile Solutions 41 47 15
Automotive and Industrial 64 76 19
Memory Products (50) 149 +++
Other (3) (33) ---
Corporate and Reconciliation (15) (16) (7)
------------------------------------- --------- ----------------------
Infineon consolidated ** 2 113 +++
------------------------------------- --------- ----------------------
* Prior period segment results are reclassified to be consistent with
the current period presentation and organizational structure.
** Includes acquisition related expenses of Euro 17 million and Euro
78 million for the three months ended 30.06.2004 and 30.09.2004,
respectively (primarily SMS and COM).
Regional Sales Development
------------- ---------------
12 months ended
Regional sales in % 30.09.03 30.09.04
--------------------- ------------- ---------------
Germany 25% 23%
Other Europe 18% 18%
North America 23% 21%
Asia / Pacific 29% 32%
Japan 4% 5%
Other 1% 1%
--------------------- ------------- ---------------
Total 100% 100%
--------------------- ------------- ---------------
--------------------- ------------- ---------------
Europe 43% 41%
--------------------- ------------- ---------------
--------------------- ------------- ---------------
Outside-Europe 57% 59%
--------------------- ------------- ---------------
Consolidated Balance Sheets
--------- ---------
in Euro million 30.09.03 30.09.04
-------------------------------------------------- --------- ---------
Assets
Current assets:
Cash and cash equivalents 969 608
Marketable securities 1,784 1,938
Trade accounts receivable, net 876 1,056
Inventories 959 960
Deferred income taxes 113 140
Other current assets 675 590
-------------------------------------------------- --------- ---------
Total current assets 5,376 5,292
-------------------------------------------------- --------- ---------
Property, plant and equipment, net 3,817 3,587
Long-term investments, net 425 708
Restricted cash 67 109
Deferred income taxes 705 541
Other assets 485 627
-------------------------------------------------- --------- ---------
Total assets 10,875 10,864
-------------------------------------------------- --------- ---------
--------- ---------
in Euro million 30.09.03 30.09.04
-------------------------------------------------- --------- ---------
Liabilities and shareholders' equity
Current liabilities:
Short-term debt and current maturities of long-
term debt 149 571
Trade accounts payable 877 1,098
Accrued liabilities 577 555
Deferred income taxes 39 16
Other current liabilities 562 630
-------------------------------------------------- --------- ---------
Total current liabilities 2,204 2,870
-------------------------------------------------- --------- ---------
Long-term debt 2,343 1,427
Deferred income taxes 32 21
Other liabilities 630 568
-------------------------------------------------- --------- ---------
Total liabilities 5,209 4,886
-------------------------------------------------- --------- ---------
-------------------------------------------------- --------- ---------
Total shareholders' equity 5,666 5,978
-------------------------------------------------- --------- ---------
-------------------------------------------------- --------- ---------
Total liabilities and shareholders' equity 10,875 10,864
-------------------------------------------------- --------- ---------
Consolidated Statements of Cash Flows
--------- --------- --------- --------- ---------
3 months ended 12 months ended
in Euro million 30.09.03 30.06.04 30.09.04 30.09.03 30.09.04
------------------- --------- --------- --------- --------- ---------
Net cash provided
by operating
activities 442 506 568 730 1,857
------------------- --------- --------- --------- --------- ---------
------------------- --------- --------- --------- --------- ---------
Net cash used in
investing
activities (255) (34) (900) (1,522) (1,809)
------------------- --------- --------- --------- --------- ---------
------------------- --------- --------- --------- --------- ---------
Net cash provided
by (used in)
financing
activities (45) (334) (154) 562 (409)
------------------- --------- --------- --------- --------- ---------
------------------- --------- --------- --------- --------- ---------
Net increase
(decrease) in cash
and cash
equivalents 142 138 (486) (230) (361)
------------------- --------- --------- --------- --------- ---------
------------------- --------- --------- --------- --------- ---------
Depreciation and
amortization 364 329 334 1,437 1,320
------------------- --------- --------- --------- --------- ---------
------------------- --------- --------- --------- --------- ---------
Purchases of
property, plant
and equipment (195) (271) (423) (872) (1,163)
------------------- --------- --------- --------- --------- ---------
Gross and Net Cash Position
Infineon defines gross cash position as cash and cash equivalents and
marketable securities, and net cash position as gross cash position
less short and long-term debt. Since restricted cash no longer
includes amounts for the repayment of debt, the gross and net cash
positions exclude restricted cash.
Since Infineon holds a substantial portion of its available monetary
resources in the form of readily marketable securities, which for US
GAAP purposes are not considered to be "cash", it reports its gross
and net cash positions to provide investors with an understanding of
the company's overall liquidity.
The gross and net cash position is determined as follows from the
balance sheet, without adjustment to the US GAAP amounts presented:
---------- ----------- -----------
in Euro million 30.09.03 30.06.04 30.09.04
----------------------------------- ---------- ----------- -----------
Cash and cash equivalents 969 1,094 608
Marketable securities 1,784 1,536 1,938
----------------------------------- ---------- ----------- -----------
Gross Cash Position 2,753 2,630 2,546
----------------------------------- ---------- ----------- -----------
Less: short-term debt 149 174 571
long-term debt 2,343 2,060 1,427
----------------------------------- ---------- ----------- -----------
Net Cash Position 261 396 548
----------------------------------- ---------- ----------- -----------
Free Cash Flow
Infineon defines free cash flow as cash from operating and investing
activities excluding purchases or sales of marketable securities.
Since Infineon holds a substantial portion of its available monetary
resources in the form of readily marketable securities, and operates
in a capital intensive industry, it reports free cash flow to provide
investors with a measure to evaluate changes in liquidity after taking
capital expenditures into account, which ultimately requires
financing.
The free cash flow is determined as follows from the cash flow
statement, without adjustment to the US GAAP amounts presented:
---------- --------- --------- --------- ---------
3 months ended 12 months ended
in Euro million 30.09.03 30.06.04 30.09.04 30.09.03 30.09.04
----------------- ---------- --------- --------- --------- ---------
Net cash provided
by operating
activities 442 506 568 730 1,857
Net cash used in
investing
activities (255) (34) (900) (1,522) (1,809)
Thereof: Purchase
(sale) of
marketable
securities, net 201 (326) 402 739 158
----------------- ---------- --------- --------- --------- ---------
Free cash flow 388 146 70 (53) 206
----------------- ---------- --------- --------- --------- ---------
Press and Analyst telephone conferences information
Infineon Technologies will host a press conference on November 9, 2004, 11:30 a.m. Central European Standard Time (CET), 5:30 a.m. Eastern Standard Time (U.S. EST). It can be followed in German and English over the Internet. In addition, the Infineon Management Board will conduct a telephone conference (English only) with analysts and investors at 1:30 p.m. (CET), 7:30 a.m. (U.S. EST), to discuss operating performance of the fourth quarter and fiscal year 2004. Both the conferences will be available live and for download on Infineon's web site at http://www.infineon.com.
D I S C L A I M E R
This discussion includes forward-looking statements about our future business. These forward-looking statements include statements relating to future developments of the world semiconductor market, especially the market for memory products, Infineon's future growth, the benefits of research and development alliances and activities, our planned levels of future investment in the expansion and modernization of our production capacity, the introduction of new technology at our facilities, the transitioning of our production processes to smaller structures, cost savings related to such transitioning and other initiatives, our successful development of technology based on industry standards, our ability to offer commercially viable products based on our technology, and our ability to achieve our cost savings and growth targets. These forward-looking statements are subject to a number of uncertainties, including trends in demand and prices for semiconductors generally and for our products in particular, the success of our development efforts, both alone and with our partners, the success of our efforts to introduce new production processes at our facilities and the actions of our competitors, the availability of funds for planned expansion efforts, the outcome of antitrust investigations and litigation matters, as well as the other factors mentioned herein. As a result, our actual results could differ materially from those contained in the forward-looking statements.
Infineon, the stylized Infineon Technologies design are trademarks and servicemarks of Infineon Technologies AG. All other trademarks are the property of their respective owners. For the Finance and Business Press: INFXX200411.013e