SEC Filing - STMicroelectronics NV

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

Report on Form 6-K dated November 3, 2023

Commission File Number: 1-13546

STMicroelectronics N.V.
(Name of Registrant)

WTC Schiphol Airport
Schiphol Boulevard 265
1118 BH Schiphol Airport
The Netherlands
(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F T Form 40-F £

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes £ No T

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes ☐ No T

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes ☐ No T

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- __________

Enclosure: STMicroelectronics N.V.’s Third Quarter and Nine Months ended September 30, 2023:

•Operating and Financial Review and Prospects;

•Unaudited Interim Consolidated Statements of Income, Statements of Comprehensive Income, Balance Sheets, Statements of Cash Flows, and Statements of Equity and related Notes for the three and nine months ended September 30, 2023; and

•Certifications pursuant to Sections 302 (Exhibits 12.1 and 12.2) and 906 (Exhibit 13.1) of the Sarbanes-Oxley Act of 2002, submitted to the Commission on a voluntary basis.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Overview

The following discussion should be read in conjunction with our Unaudited Interim Consolidated Statements of Income, Statements of Comprehensive Income, Balance Sheets, Statements of Cash Flows and Statements of Equity for the three and nine months ended September 30, 2023 and Notes thereto included elsewhere in this Form 6-K, and our annual report on Form 20-F for the year ended December 31, 2022 as filed with the U.S. Securities and Exchange Commission (the “Commission” or the “SEC”) on February 23, 2023 (the “Form 20-F”). The following discussion contains statements of future expectations and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, or Section 21E of the Securities Exchange Act of 1934, each as amended, particularly in the sections “Business Overview” and “Liquidity and Capital Resources—Financial Outlook: Capital Investment”. Our actual results may differ significantly from those projected in the forward-looking statements. For a discussion of factors that might cause future actual results to differ materially from our recent results or those projected in the forward-looking statements in addition to the factors set forth below, see “Cautionary Note Regarding Forward-Looking Statements” and “Item 3. Key Information—Risk Factors” included in the Form 20-F. We assume no obligation to update the forward-looking statements or such risk factors.

Our Management’s Discussion and Analysis of Financial Position and Results of Operations (“MD&A”) is provided in addition to the accompanying Unaudited Interim Consolidated Financial Statements (“Consolidated Financial Statements”) and Notes to assist readers in understanding our results of operations, financial condition and cash flows. Our MD&A is organized as follows:

•Critical Accounting Policies using Significant Estimates.

•Business Overview, a discussion of our business and overall analysis of financial and other relevant highlights for the three and nine months ended September 30, 2023, designed to provide context for the other sections of the MD&A, including our expectations for selected financial items for the fourth quarter of 2023.

•Other Developments.

•Results of Operations, containing a year-over-year and sequential analysis of our financial results for the three and nine months ended September 30, 2023, as well as segment information.

•Legal Proceedings.

•Discussion on the impact of changes in exchange rates, interest rates and equity prices on our activity and financial results.

•Liquidity and Capital Resources, presenting an analysis of changes in our balance sheets and cash flows, and discussing our financial condition and potential sources of liquidity.

•Impact of Recently Issued U.S. Accounting Standards.

•Backlog and Customers, discussing the level of backlog and sales to our key customers.

•Disclosure Controls and Procedures.

•Other reviews.

•Cautionary Note Regarding Forward-Looking Statements.

At STMicroelectronics N.V. (“ST” or the “Company”), we are over 50,000 creators and makers of semiconductor technologies mastering the semiconductor supply chain with state-of-the-art manufacturing facilities. As an integrated device manufacturer, we work with more than 200,000 customers and thousands of partners to design and build products, solutions, and ecosystems that address their challenges and opportunities, and the need to support a more sustainable world. Our technologies enable smarter mobility, more efficient power and energy management, and the wide-scale deployment of the Internet of Things and connectivity. We are committed to achieving our goal to become carbon neutral on scope 1 and 2 and partially scope 3 by 2027.

Critical Accounting Policies Using Significant Estimates

There were no material changes in the first nine months of 2023 to the information provided under the heading “Critical Accounting Policies Using Significant Estimates” included in our Form 20-F for the year ended December 31, 2022, as described in Note 5, Recent Accounting Pronouncements, of the Consolidated Financial Statements for the three and nine months ended September 30, 2023.

Fiscal Year

Under Article 35 of our Articles of Association, our fiscal year extends from January 1 to December 31. The first quarter of 2023 ended on April 1, the second quarter ended on July 1 and the third quarter ended on September 30. The fourth quarter will end on December 31, 2023. Based on our fiscal calendar, the distribution of our revenues and expenses by quarter may be unbalanced due to a different number of days in the various quarters of the fiscal year and can also differ from equivalent prior years’ periods, as illustrated in the below table for the years 2023 and 2022.


	Q1	Q2	Q3	Q4
	Days
2022	92	91	91	91
2023	91	91	91	92

Business Overview

Our results of operations for each period were as follows:


	Three Months Ended									% Variation
	September 30, 2023			July 1, 2023			October 1, 2022			Sequential		Year Over Year
	(In millions, except per share amounts)
Net revenues	$	4,431		$	4,326		$	4,321		2.4	%	2.5	%
Gross profit	2,109			2,119			2,059			(0.5)		2.4
Gross margin (as percentage of net revenues)	47.6		%	49.0		%	47.6		%	-140 bps		—
Operating income	1,241			1,146			1,272			8.2		(2.4)
Operating margin	28.0		%	26.5		%	29.4		%	150 bps		-140 bps
Net income attributable to parent company	1,090			1,001			1,099			8.9		(0.8)
Diluted earnings per share	$	1.16		$	1.06		$	1.16		9.4	%	—	%

Our total available market is defined as “TAM”, while our serviceable available market is defined as “SAM” and represents the market for products sold by us (i.e., TAM excluding major devices such as microprocessors, DRAM and flash-memories, optoelectronics devices other than optical sensors, video processing and wireless application specific market products, such as baseband and application processors).

Based on industry data published by World Semiconductor Trade Statistics (“WSTS”), on a sequential basis, semiconductor industry revenues in the third quarter of 2023 increased by approximately 6% for our TAM and increased by approximately 4% for our SAM to reach approximately $135 billion and $76 billion, respectively. On a year-over-year basis, our TAM decreased by approximately 5% and our SAM increased by approximately 4%.

Our third quarter 2023 net revenues amounted to $4,431 million, increasing 2.4% sequentially, about 130 basis points better than the mid-point of our released guidance. On a sequential basis, Automotive and Discrete Group (ADG) revenues increased 3.6%, with both Power Discrete and Automotive revenues increasing. Analog, Micro-Electro-Mechanical Systems (“MEMS”) and Sensors Group (AMS) revenues increased 5.3%, driven by higher revenues in Imaging. Microcontrollers and Digital ICs Group (MDG) revenues decreased 1.0%.

On a year-over-year basis, third quarter net revenues increased 2.5% with higher sales in ADG and MDG, while AMS revenues decreased. ADG revenues increased 29.6% with both Automotive and Power Discrete contributing to the increase. AMS revenues decreased 28.3%, with all sub-groups revenues decreasing. MDG revenues increased 2.8% driven by higher sales in RF Communications and Connected Security.

Our revenue performance was below the SAM on a sequential and a year-over-year basis.

Our effective average exchange rate for the third quarter of 2023 was $1.09 for €1.00, compared to $1.08 in the second quarter of 2023 and the third quarter of 2022. For a more detailed discussion of our hedging arrangements and the impact of fluctuations in exchange rates, see “Impact of Changes in Exchange Rates”.

Our third quarter of 2023 gross profit was $2,109 million and gross margin was 47.6%, 10 bps better than the mid-point of our guidance. On a sequential basis, gross margin decreased 140 basis points, mainly due to higher unused capacity charges and the combination of sales price impact and product mix. Gross margin was stable year-over-year, as improved product mix was offset by higher manufacturing costs and unused capacity charges.

Our aggregated selling, general & administrative (“SG&A”) and research & development (“R&D”) expenses amounted to $926 million, compared to $969 million and $815 million in the prior and year-ago quarters, respectively. On a sequential basis, operating expenses decreased by $43 million, positively impacted by favorable seasonality associated with higher vacations days. On a year-over-year basis, operating expenses increased by $111 million, mainly due to higher cost of labor and negative currency effects.

Other income and expenses, net, amounted to $58 million income, increasing by $62 million sequentially and $30 million on a year-over-year basis, mainly due to higher income from public funding.

In the third quarter of 2023, our operating income was $1,241 million, equivalent to 28.0% of net revenues, compared to $1,146 million in the previous quarter (26.5% of net revenues), and to $1,272 million (29.4% of net revenues) in the year-ago quarter. On a sequential basis, operating income was positively impacted by the combination of higher sales, lower operating expenses and higher income from public funding. On a year-over-year basis, the decrease was mainly driven by higher operating expenses.

In the third quarter of 2023, our net cash from operating activities amounted to $1,881 million. Our net cash used in investing activities was at $1,756 million with capital expenditure payments, net of proceeds from sales, capital grants and other contributions at $1,152 million compared to $1,072 million and $955 million during prior and year-ago quarters, respectively.

Our free cash flow, a non-U.S. GAAP measure, amounted to $707 million in the third quarter of 2023 compared to $676 million in the third quarter of 2022. Refer to “Liquidity and Capital Resources” for the reconciliation of the free cash flow, a non U.S. GAAP measure, to our consolidated Statements of Cash Flows.

Looking at the fourth quarter, we expect a revenue decrease of approximately 3.0% sequentially, plus or minus 350 basis points. Gross margin is expected to be approximately 46%, plus or minus 200 basis points.

This outlook is based on an assumed effective currency exchange rate of approximately $1.08 = €1.00 for the fourth quarter of 2023 and includes the impact of existing hedging contracts. The fourth quarter will close on December 31, 2023.

These are forward-looking statements that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially; in particular, refer to those known risks and uncertainties described in “Cautionary Note Regarding Forward-Looking Statements” and Item 3. “Key Information — Risk Factors” in our Form 20-F as may be updated from time to time in our SEC filings.

Other Developments

On September 9, the ST Supervisory Board announced that it would propose for shareholder approval at ST’s 2024 Annual General Meeting of Shareholders, the reappointment of Jean-Marc Chery for a three-year mandate as the sole member of the Company’s Managing Board and its President and Chief Executive Officer, and that Mr. Chery had accepted the proposal.

On August 23, we published our IFRS 2023 Semi Annual Accounts for the six-month period ended July 1, 2023 on our website and filed them with the Netherlands Authority for the Financial Markets (Authoriteit Financiële Markten).

Results of Operations

Segment Information

We design, develop, manufacture and market a broad range of products, including discrete and standard commodity components, application-specific integrated circuits (“ASICs”), full-custom devices and semi-custom devices and application-specific standard products (“ASSPs”) for analog, digital and mixed-signal applications. In addition, we further participate in the manufacturing value chain of smartcard products, which includes the production and sale of both silicon chips and smartcards.

Our reportable segments are as follows:

•Automotive and Discrete Group (ADG), comprised of dedicated automotive integrated circuits (“ICs”), and discrete and power transistor products.

•Analog, MEMS and Sensors Group (AMS), comprised of analog, smart power, MEMS sensors and actuators, and optical sensing solutions.

•Microcontrollers and Digital ICs Group (MDG), comprised of general-purpose microcontrollers and microprocessors, connected security products (e.g. embedded secured elements and NFC readers), memories (e.g. serial and page EEPROM) and RF and Communications products.

For the computation of the segments’ internal financial measurements, we use certain internal rules of allocation for the costs not directly chargeable to the segments, including cost of sales, SG&A expenses and a part of R&D expenses. In compliance with our internal policies, certain costs are not allocated to the segments, but reported in “Others”. Net revenues of “Others” include revenues from sales assembly services and other revenues. Operating income (loss) of Others includes items such as unused capacity charges, including reduced manufacturing activity due to COVID-19 and incidents leading to power outage, impairment, restructuring charges and other related closure costs, management reorganization expenses, start-up and phase-out costs of certain manufacturing facilities, and other unallocated expenses such as: strategic or special R&D 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. In addition, depreciation and amortization expense is part of the manufacturing costs allocated to the segments and is neither identified as part of the inventory variation nor as part of the unused capacity charges; therefore, it cannot be isolated in cost of sales. Finally, public grants are allocated to our segments proportionally to the incurred expenses on the sponsored projects.

Wafer costs are allocated to the segments based on actual cost. From time to time, with respect to specific technologies, wafer costs are allocated to segments based on market price.

Third Quarter 2023 vs. Second Quarter 2023 and Third Quarter 2022

The following table sets forth certain financial data from our Unaudited Interim Consolidated Statements of Income:


	Three Months ended
	September 30, 2023				July 1, 2023				October 1, 2022
	$ million		% of net revenues		$ million		% of net revenues		$ million		% of net revenues
Net sales	$	4,416	99.7	%	$	4,320	99.9	%	$	4,305	99.6	%
Other revenues	15		0.3		6		0.1		16		0.4
Net revenues	4,431		100.0		4,326		100.0		4,321		100.0
Cost of sales	(2,322)		(52.4)		(2,207)		(51.0)		(2,262)		(52.3)
Gross profit	2,109		47.6		2,119		49.0		2,059		47.6
Selling, general and administrative expenses	(407)		(9.2)		(414)		(9.6)		(352)		(8.2)
Research and development expenses	(519)		(11.7)		(555)		(12.8)		(463)		(10.7)
Other income and expenses, net	58		1.3		(4)		(0.1)		28		0.6

Operating income	1,241		28.0		1,146		26.5		1,272		29.4
Interest income, net	44		1.0		33		0.8		16		0.4
Other components of pension benefit costs	(5)		(0.1)		(5)		(0.1)		(2)		—


Income before income taxes and noncontrolling interest	1,280		28.9		1,174		27.1		1,286		29.8
Income tax expense	(188)		(4.2)		(171)		(4.0)		(185)		(4.3)
Net income	1,092		24.6		1,003		23.2		1,101		25.5
Net income attributable to noncontrolling interest	(2)		—		(2)		—		(2)		—
Net income attributable to parent company	$	1,090	24.6	%	$	1,001	23.1	%	$	1,099	25.4	%

Net revenues


	Three Months Ended						% Variation
	September 30, 2023		July 1, 2023		October 1, 2022		Sequential		Year Over Year
	(In millions)
Net sales	$	4,416	$	4,320	$	4,305	2.2	%	2.6	%
Other revenues	15		6		16		160.3		(6.8)
Net revenues	4,431		4,326		4,321		2.4	%	2.5	%

Sequentially, our third quarter 2023 net revenues increased 2.4%, 130 basis points better than the mid-point of our released guidance. The sequential increase mainly resulted from higher volumes of approximately 7%, partially offset by lower average selling prices of approximately 5%, driven mostly by a less favorable product mix.

On a year-over-year basis, net revenues increased 2.5% mainly as a result of higher average selling prices of approximately 17%, driven by a more favorable product mix, partially offset by lower volumes of approximately 14%.

Net revenues by product group


	Three Months Ended						% Variation
	September 30, 2023		July 1, 2023		October 1, 2022		Sequential		Year Over Year
	(In millions)
ADG	$	2,025	$	1,955	$	1,563	3.6	%	29.6	%
AMS	990		940		1,380		5.3		(28.3)
MDG	1,412		1,427		1,374		(1.0)		2.8
Others	4		4		4		—		—
Total consolidated net revenues	$	4,431	$	4,326	$	4,321	2.4	%	2.5	%

On a sequential basis, ADG revenues increased 3.6%, driven by higher volumes of approximately 11%, partially offset by lower average selling prices of approximately 7%. AMS revenues increased 5.3%, due to higher volumes of approximately 5%. MDG revenues decreased 1.0%, driven by lower average selling prices of approximately 6%, partially offset by higher volumes of approximately 5%.

On a year-over-year basis, ADG revenues increased 29.6%, driven by higher average selling prices of approximately 47%, due to a better product mix and higher selling prices, partially offset by lower volumes of approximately 17%. AMS revenues decreased 28.3% compared to the year-ago period, driven by lower volumes of approximately 18% and lower average selling prices of 10%. MDG revenues increased 2.8%, due to higher average selling prices of approximately 6%, due to a better product mix, partially offset by lower volumes of approximately 3%.

Net Revenues by Market Channel (1)


	Three Months ended
	September 30, 2023		July 1, 2023		October 1, 2022

OEM	67	%	64	%	67	%
Distribution	33		36		33
Total consolidated net revenues	100	%	100	%	100	%

(1) Original Equipment Manufacturers (“OEM”) are the end-customers to which we provide direct marketing application engineering support, while Distribution refers to the distributors and representatives that we engage to distribute our products around the world.

By market channel, our third quarter net revenues in distribution amounted to 33% of our total consolidated net revenues, decreasing from 36% in the prior quarter while remaining consistent with the year-ago quarter.

Net Revenues by Location of Shipment (1)


	Three Months Ended						% Variation
	September 30, 2023		July 1, 2023		October 1, 2022		Sequential		Year Over Year
	(In millions)
Europe, Middle East, Africa ("EMEA")	$	1,231	$	1,244	$	936	(1.0)	%	31.5	%
Americas	685		698		586		(1.9)		16.9
Asia Pacific	2,515		2,384		2,799		5.5		(10.1)
Total consolidated net revenues	$	4,431	$	4,326	$	4,321	2.4	%	2.5	%

(1)Net revenues by location of shipment are classified by location of customer invoiced or reclassified by shipment destination in line with customer demand. For example, products ordered by U.S. based companies to be invoiced to Asia Pacific affiliates are classified as Asia Pacific revenues. Furthermore, the comparison among the different periods may be affected by shifts in shipments from one location to another, as requested by our customers.

On a sequential basis, EMEA revenues decreased 1.0%, mainly due to lower sales in General-Purpose Microcontrollers. Americas revenues decreased 1.9% due to lower sales in RF Communications. Asia Pacific revenues increased 5.5% thanks to higher revenues in Imaging and Connected Security.

On a year-over-year basis, EMEA revenues grew 31.5%, mainly driven by higher sales in Automotive. Americas revenues increased 16.9%, mainly due to higher sales in Power Discrete and RF Communications. Asia Pacific revenues decreased 10.1%, mainly due to lower sales in Imaging, Analog and MEMS.

Gross profit


	Three Months Ended									Variation
	September 30, 2023			July 1, 2023			October 1, 2022			Sequential		Year Over Year
	(In millions)
Gross profit	$	2,109		$	2,119		$	2,059		(0.5)	%	2.4	%
Gross margin (as percentage of net revenues)	47.6		%	49.0		%	47.6		%	-140 bps		—

In the third quarter of 2023, gross margin was 47.6%, 10 bps better than the mid-point of our guidance. On a sequential basis, gross margin decreased 140 basis points, mainly due to higher unused capacity charges and the combination of sales price impact and product mix.

Gross margin was stable year-over-year, as improved product mix was offset by higher manufacturing costs and unused capacity charges.

Operating expenses


	Three Months Ended									Variation
	September 30, 2023			July 1, 2023			October 1, 2022			Sequential		Year Over Year
	(In millions)
Selling, general and administrative expenses	$	(407)		$	(414)		$	(352)		(1.7)	%	15.4	%
Research and development expenses	(519)			(555)			(463)			(6.5)		12.2
Total operating expenses	$	(926)		$	(969)		$	(815)		(4.4)	%	13.5	%
As percentage of net revenues	20.9		%	22.4		%	19.0		%	-150 bps		200 bps

On a sequential basis, operating expenses decreased by $43 million, positively impacted by favorable seasonality associated with higher vacations days. On a year-over-year basis, operating expenses increased by $111 million, mainly due to higher cost of labor and negative currency effects.

As a percentage of net revenues, our operating expenses amounted to 20.9% in the third quarter of 2023, decreasing compared to 22.4% in the prior quarter and increasing compared to 19.0% in the year-ago quarter.

R&D expenses were net of research tax credits, which amounted to $31 million in the third quarter of 2023, compared to $36 million and $24 million, in the prior and year-ago quarters, respectively.

Other income and expenses, net


	Three Months Ended
	September 30, 2023			July 1, 2023			October 1, 2022
	(In millions)
Public funding	$	93		$	27		$	28
Exchange gains (losses), net	5			3			6
Start-up and phase-out costs	(33)			(34)			(1)
Patent costs	(3)			(2)			(3)
Gain on sale of non-current assets	1			4			—
COVID-19 incremental costs	—			—			(1)
Other, net	(5)			(2)			(1)
Other income and expenses, net	$	58		$	(4)		$	28
As percentage of net revenues	1.3		%	(0.1)		%	0.6		%

Other income and expenses, net, amounted to $58 million income, increasing by $62 million sequentially and $30 million on a year-over-year basis, mainly due to higher income from public funding.

Operating income


	Three Months Ended
	September 30, 2023			July 1, 2023			October 1, 2022
	(In millions)
Operating income	$	1,241		$	1,146		$	1,272
As percentage of net revenues	28.0		%	26.5		%	29.4		%

In the third quarter of 2023, operating income was $1,241 million, compared to an operating income of $1,146 million and $1,272 million in the prior and year-ago quarters, respectively.

On a sequential basis, operating income was positively impacted by the combination of higher sales, lower operating expenses and higher income from public funding.

On a year-over-year basis, the decrease was mainly driven by higher operating expenses.

Operating income by product group


	Three Months Ended
	September 30, 2023				July 1, 2023				October 1, 2022
	$ million		% of net revenues		$ million		% of net revenues		$ million		% of net revenues
ADG	$	638	31.5	%	$	624	31.9	%	$	404	25.9	%
AMS	186		18.8		139		14.8		376		27.2
MDG	496		35.1		505		35.4		504		36.7
Total operating income of product groups	1,320		29.8		1,268		29.3		1,284		29.7
Others(1)	(79)		—		(122)		—		(12)		—
Total consolidated operating income	$	1,241	28.0	%	$	1,146	26.5	%	$	1,272	29.4	%

(1)Operating income (loss) of Others includes items such as unused capacity charges, including unloading charges due to COVID-19 and incidents leading to power outage, impairment, restructuring charges and other related closure costs, management reorganization costs, start-up and phase-out costs, and other unallocated expenses such as: strategic or special R&D programs, certain corporate level operating expenses, patent claims and litigations, and other costs that are not allocated to product groups (e.g. urgent freight costs, changes in fair value measurement on contingent consideration liabilities), as well as operating earnings of other products.

For the third quarter of 2023, ADG operating income was $638 million, increasing sequentially by $14 million mainly driven by higher profitability in both Automotive and Power Discrete. AMS operating income was $186 million, increasing sequentially by $47 million, thanks to higher profitability in Imaging. MDG operating

income decreased by $9 million sequentially, mainly driven by General-Purpose Microcontrollers lower profitability.

ADG operating income increased by $234 million year-over-year reflecting higher profitability in both Automotive and Power Discrete. AMS operating income decreased by $190 million, with MEMS, Imaging and Analog decreasing. MDG operating income decreased by $8 million, mainly driven by General-Purpose Microcontrollers lower profitability.

Reconciliation to consolidated operating income


	Three Months Ended
	September 30, 2023		July 1, 2023		October 1, 2022
	(In millions)
Total operating income of product groups	$	1,320	$	1,268	$	1,284
Impairment loss on intangible assets acquired through business combinations	—		(36)		—
Start-up and phase-out costs	(33)		(34)		(1)
Unused capacity charges	(46)		(15)		—
Contingent consideration fair value measurement	—		5		—
Other unallocated manufacturing results	(3)		(9)		(8)
Gain on sale of non-current assets	—		3		—
Strategic and R&D programs and other non-allocated provisions(1)	3		(36)		(3)
Total operating income (loss) of Others	(79)		(122)		(12)
Total consolidated operating income	$	1,241	$	1,146	$	1,272

(1)Includes unallocated income and expenses such as certain corporate-level operating expenses and other income (costs) that are not allocated to the product segments.

Interest income, net


	Three Months Ended
	September 30, 2023		July 1, 2023		October 1, 2022
	(In millions)
Interest income, net	$	44	$	33	$	16

In the third quarter of 2023, we recorded a net interest income of $44 million, compared to a net interest income of $33 million in the prior quarter and a net interest income of $16 million in the year-ago quarter. Net interest income was composed of $57 million of interest income, partially offset by interest expense on borrowings and banking fees of $13 million. The year-over-year increase in interest income was mainly due to higher U.S dollar interest yields.

Income tax expense


	Three Months Ended
	September 30, 2023		July 1, 2023		October 1, 2022
	(In millions)
Income tax expense	$	(188)	$	(171)	$	(185)

During the third quarter of 2023, we registered an income tax expense of $188 million, reflecting a 14.8% estimated annual effective tax rate before discrete items at consolidated level, applied to the first nine months of 2023 consolidated income before income tax, consistent with the actual annual tax rate of 2022 before discrete items.

Net income attributable to parent company


	Three Months Ended
	September 30, 2023			July 1, 2023			October 1, 2022
	(In millions)
Net income attributable to parent company	$	1,090		$	1,001		$	1,099
As percentage of net revenues	24.6		%	23.1		%	25.4		%

For the third quarter of 2023, we reported net income of $1,090 million, representing diluted earnings per share of $1.16, compared to $1.06 in the prior quarter and $1.16 in the prior-year quarter.

Nine Months of 2023 vs. Nine Months of 2022

The following table sets forth certain financial data from our Unaudited Interim Consolidated Statements of Income:


	Nine Months ended
	September 30, 2023				October 1, 2022
	$ million		% of net revenues		$ million		% of net revenues
Net sales	$	12,977	99.8	%	$	11,675	99.8	%
Other revenues	27		0.2		29		0.2
Net revenues	13,004		100.0		11,704		100.0
Cost of sales	(6,666)		(51.3)		(6,171)		(52.7)
Gross profit	6,338		48.7		5,533		47.3
Selling, general and administrative expenses	(1,215)		(9.3)		(1,076)		(9.2)
Research and development expenses	(1,579)		(12.1)		(1,429)		(12.2)
Other income and expenses, net	44		0.3		125		1.1

Operating income	3,588		27.6		3,153		26.9
Interest income, net	114		0.9		24		0.2
Other components of pension benefit costs	(14)		(0.1)		(7)		(0.1)

Income before income taxes and noncontrolling interest	3,688		28.4		3,170		27.1
Income tax expense	(547)		(4.2)		(454)		(3.9)
Net income	3,141		24.2		2,716		23.2
Net income attributable to noncontrolling interest	(6)		—		(3)		—
Net income attributable to parent company	$	3,135	24.1	%	$	2,713	23.2	%

Net revenues


	Nine Months ended
	September 30, 2023		October 1, 2022		% Variation
	(In millions)
Net sales	$	12,977	$	11,675	11.2	%
Other revenues	27		29		(9.2)
Net revenues	$	13,004	$	11,704	11.1	%

Our first nine months 2023 net revenues increased 11.1% compared to the year-ago period, as a result of an approximate 24% increase in average selling prices, due to a more favorable product mix and higher selling prices, partially offset by a decrease in volumes of approximately 13%.

Net revenues by product group


	Nine Months ended
	September 30, 2023		October 1, 2022		% Variation
	(In millions)
ADG	$	5,788	$	4,273	35.4	%
AMS	2,998		3,572		(16.1)
MDG	4,206		3,845		9.4
Others	12		14		—
Total consolidated net revenues	$	13,004	$	11,704	11.1	%

By product group, ADG revenues were up 35.4%, with higher average selling prices of approximately 51%, due to more favorable product mix and higher selling prices, partially offset by a decrease in volumes of approximately 16%. AMS revenues decreased 16.1%, due to lower volumes of approximately 15%, and lower average selling prices of approximately 1%. MDG revenues increased 9.4% compared to the prior year period, driven by higher average selling prices of approximately 13%, due to more favorable product mix, partially offset by lower volumes of approximately 4%.

Net Revenues by Market Channel (1)


	Nine Months ended
	September 30, 2023		October 1, 2022
OEM	65	%	66	%
Distribution	35		34
Total	100	%	100	%

(1)Original Equipment Manufacturers (“OEM”) are the end-customers to which we provide direct marketing application engineering support, while Distribution refers to the distributors and representatives that we engage to distribute our products around the world.

By market channel, distribution reached a 35% share of total revenues in the first nine months of 2023, slightly increasing compared to 34% in the first nine months of 2022.

Net Revenues by Location of Shipment(1)


	Nine Months ended
	September 30, 2023		October 1, 2022		% Variation
	(In millions)
Europe, Middle East, Africa ("EMEA")	$	3,662	$	2,553	43.4	%
Americas	2,069		1,641		26.1
Asia Pacific	7,273		7,510		(3.2)
Total consolidated net revenues	$	13,004	$	11,704	11.1	%

By location of shipment, EMEA revenues grew 43.4%, mainly driven by higher sales in Automotive and General-Purpose Microcontrollers. Americas revenues increased 26.1%, mainly thanks to higher sales in RF Communications and Power Discrete. Asia Pacific revenues decreased 3.2%, mainly due to lower sales in Analog and MEMS.

Gross profit


	Nine Months ended
	September 30, 2023			October 1, 2022			Variation
	(In millions)
Gross profit	$	6,338		$	5,533		14.6	%
Gross margin (as percentage of net revenues)	48.7		%	47.3		%	140 bps

Gross margin was 48.7% for the first nine months of 2023, increasing by approximately 140 basis points compared to the year-ago period, mainly due to higher selling prices and a more favorable product mix, partially offset by higher manufacturing costs and higher unused capacity charges.

Operating expenses


	Nine Months ended
	September 30, 2023			October 1, 2022			Variation
	(In millions)
Selling, general and administrative expenses	$	(1,215)		$	(1,076)		12.9	%
Research and development expenses	(1,579)			(1,429)			10.5
Total operating expenses	$	(2,794)		$	(2,505)		11.5	%
As percentage of net revenues	21.5		%	21.4		%	10 bps

Our operating expenses increased compared to the year-ago period, mainly due to higher cost of labor and negative non-recurring non-cash items, partially offset by positive currency effects.

As a percentage of net revenues, our operating expenses amounted to 21.5%, slightly increasing from 21.4% in the year-ago period.

Total R&D expenses were net of research tax credits, which amounted to $96 million in the first nine months of 2023 compared to $77 million in the first nine months of 2022.

Other income and expenses, net


	Nine Months ended
	September 30, 2023			October 1, 2022
	(In millions)
Public funding	$	145		$	130
Exchange gains (losses), net	8			13
Start-up and phase-out costs	(99)			(2)
Patent costs	(8)			(7)
Gain on sale of non-current assets	6			3
COVID-19 incremental costs	—			(8)
Other, net	(8)			(4)
Other income and expenses, net	$	44		$	125
As percentage of net revenues	0.3		%	1.1		%

In the first nine months of 2023, other income and expenses, net, amounted to a $44 million income, decreasing by $81 million from $125 million income during the first nine months months of 2022, due to higher start-up costs mainly related to our Agrate 300mm fab.

Operating income


	Nine Months ended
	September 30, 2023			October 1, 2022
	(In millions)
Operating income	$	3,588		$	3,153
As percentage of net revenues	27.6		%	26.9		%

Operating income in the first nine months of 2023 increased by $435 million to $3,588 million, compared to the prior year period, mainly due to the combination of increased revenues and improved gross margin profitability, partially offset by increased operating expenses.

Operating income by product group


	Nine Months ended
	September 30, 2023				October 1, 2022
	$ million		% of net revenues		$ million		% of net revenues
ADG	$	1,839	31.8	%	$	999	23.4	%
AMS	543		18.1		891		24.9
MDG	1,496		35.6		1,335		34.7
Total operating income of product groups	3,878		29.8		3,225		27.6
Others(1)	(290)		—		(72)		—
Total consolidated operating income	$	3,588	27.6	%	$	3,153	26.9	%

In the first nine months of 2023, ADG operating income increased by $840 million to $1,839 million, with higher profitability in both Automotive and Power Discrete. AMS operating income was $543 million, decreasing by $348 million with Analog, MEMS and Imaging decreasing. MDG operating income was $1,496 million and increased by $161 million due to higher profitability from RF Communications and General-Purpose Microcontrollers.

Reconciliation to consolidated operating income


	Nine Months ended
	September 30, 2023		October 1, 2022
	(In millions)
Total operating income of product groups	$	3,878	$	3,225
Impairment loss on intangible assets acquired through business combinations	(36)		—
Start-up and phase-out costs	(99)		(2)
Unused capacity charges	(62)		(22)
Contingent consideration fair value measurement	5		—
Other unallocated manufacturing results	(64)		(58)
Gain on sale of non-current assets	4		2
Strategic and R&D programs and other non-allocated provisions(1)	(38)		8
Total operating income (loss) of Others	(290)		(72)
Total consolidated operating income	$	3,588	$	3,153

(1)Includes unallocated income and expenses such as certain corporate-level operating expenses and other income (costs) that are not allocated to the product segments.

Interest income, net


	Nine Months ended
	September 30, 2023		October 1, 2022
	(In millions)
Interest income, net	$	114	$	24

In the first nine months of 2023, we recorded a net interest income of $114 million, compared to $24 million of net interest income in the year-ago period. The first nine months of 2023 net interest income was composed of $155 million of interest income, partially offset by interest expense on borrowings and banking fees of $41 million. The increase in interest income was mainly due to higher U.S dollar interest yields.

Income tax expense


	Nine Months ended
	September 30, 2023		October 1, 2022
	(In millions)
Income tax expense	$	(547)	$	(454)

During the first nine months of 2023, we registered an income tax expense of $547 million, reflecting a 14.8% estimated annual effective tax rate before discrete items at consolidated level, applied to the first nine months of 2023 consolidated income before income tax.

In the first nine months of 2022, we registered an income tax expense of $454 million.

Our tax rate is variable and depends on changes in the level of operating results within various local jurisdictions and on changes in the applicable taxation rates of these jurisdictions, as well as changes in estimates on our tax provisions. Our income tax amounts and rates also depend on our loss carry-forwards and their relevant valuation allowance, which are based on estimated projected plans and available tax planning strategies. In the case of material changes in these plans, the valuation allowance could be adjusted accordingly, with an impact on our income tax expense (benefit). In addition, our annual income tax expense includes the estimated impact of provisions related to potential tax positions which have been considered as uncertain.

Net income attributable to parent company


	Nine Months ended
	September 30, 2023			October 1, 2022
	(In millions)
Net income attributable to parent company	$	3,135		$	2,713
As percentage of net revenues	24.1		%	23.2		%

For the first nine months of 2023, we reported net income of $3,135 million, representing diluted earnings per share of $3.32, compared to a net income of $2,713 million in the prior period, representing diluted earnings per share of $2.87.

Legal Proceedings

For a discussion of legal proceedings, see Note 27 Contingencies, Claims and Legal Proceedings to our Unaudited Interim Consolidated Financial Statements.

Impact of Changes in Exchange Rates

Our results of operations and financial condition can be significantly affected by material changes in the exchange rates between the U.S. dollar and other currencies, particularly the Euro.

As a market practice, the reference currency for the semiconductor industry is the U.S. dollar and the market prices of semiconductor products are mainly denominated in U.S. dollars. However, revenues for some of our products are quoted in currencies other than the U.S. dollar, such as Euro-denominated sales, and consequently are directly affected by fluctuations in the value of the U.S. dollar. As a result of currency variations, the appreciation of the Euro compared to the U.S. dollar could increase our level of revenues when translated into U.S. dollars or the depreciation of the Euro compared to the U.S. dollar could decrease our level of revenues when reported in U.S. dollars. Over time and depending on market conditions, the prices in the industry could align to the equivalent amount in U.S. dollars, except that there is a lag between the changes in the currency rate and the adjustment in the price paid in local currency, which is proportional to the amplitude of the currency swing, and such adjustment could be only partial and/or delayed, depending on market demand. Furthermore, certain significant costs incurred by us, such as manufacturing costs, SG&A expenses and R&D expenses, are largely incurred in the currency of the jurisdictions in which our operations are located. Given that most of our operations are located in the Eurozone and other non-U.S. dollar currency areas, including Singapore, our costs tend to increase when translated into U.S. dollars when the U.S. dollar weakens, or to decrease when the U.S. dollar strengthens.

Our principal strategy to reduce the risks associated with exchange rate fluctuations is to balance as much as possible the proportion of sales to our customers denominated in U.S. dollars with the amount of materials, purchases and services from our suppliers denominated in U.S. dollars, thereby reducing the potential exchange rate impact of certain variable costs relative to revenues. Moreover, in order to further reduce the exposure to U.S. dollar exchange fluctuations, we hedge certain line items on our Consolidated Statements of Income, in particular with respect to a portion of cost of sales, most of R&D expenses and certain SG&A expenses, located in the Eurozone, which we designate as cash flow hedge transactions. We use two different types of hedging instruments: forward contracts and currency options (including collars).

Our Unaudited Interim Consolidated Statement of Income for the nine months ended September 30, 2023 included income and expense items translated at the average U.S. dollar exchange rate for the period, plus the impact of the hedging contracts settled during the period. Our effective average exchange rate for the third quarter of 2023 was $1.09 for €1.00, compared to $1.08 for €1.00 in the second quarter of 2023 and the third quarter of 2022. These effective exchange rates reflect the actual exchange rates combined with the effect of cash flow hedge transactions impacting earnings in the period.

The time horizon of our cash flow hedging for manufacturing costs and operating expenses may run up to 24 months, for a limited percentage of our exposure to the Euro, depending on currency market circumstances. As of September 30, 2023, the outstanding hedged amounts were €1,534 million to cover manufacturing costs and €726 million to cover operating expenses, at an average exchange rate of approximately $1.10 for €1.00 (considering the collars at upper strike), maturing from October 4, 2023 to October 30, 2024. As of September 30, 2023, measured in respect to the exchange rate at period closing of about $1.06 to €1.00, these outstanding hedging contracts and certain settled contracts covering manufacturing expenses capitalized in inventory resulted in a deferred unrealized gain of approximately $38 million before tax, recorded in “Accumulated other comprehensive income (loss)” in the Consolidated Statement of Equity, compared to a deferred unrealized gain of approximately $17 million before tax on December 31, 2022.

We also hedge certain manufacturing costs denominated in Singapore dollars (SGD); as of September 30, 2023, the outstanding hedged amounts were SGD 236 million at an average exchange rate of approximately SGD 1.33 to $1.00 maturing from October 5, 2023 to August 29, 2024. As of September 30, 2023, these outstanding hedging contracts resulted in a deferred unrealized loss of approximately $3 million before tax, recorded in “Accumulated other comprehensive income (loss)” in the Consolidated Statement of Equity, compared to a deferred unrealized gain of $6 million dollars on December 31, 2022.

Our cash flow hedging policy is not intended to cover our full exposure and is based on hedging a declining portion of our exposure in the next four quarters. In the third quarter of 2023, as a result of our cash flow hedging, we recycled to earnings a loss of $6 million, of which approximately $3 million impacted cost of sales, and $3 million impacted R&D expenses, while in the comparable quarter of 2022, we recorded a loss of $60 million.

In addition to our cash flow hedging, in order to mitigate potential exchange rate risks on our commercial transactions, we purchase and enter into foreign exchange forward contracts and currency options to cover foreign currency exposure in payables or receivables at our affiliates, which we do not designate for hedge accounting. We may in the future purchase or sell similar types of instruments. See “Item 11. Quantitative and Qualitative Disclosures About Market Risk” in our Form 20-F. Furthermore, we may not predict on a timely basis the amount of future transactions in the volatile industry environment. No assurance may be given that our hedging activities will sufficiently protect us against fluctuations in the value of the U.S. dollar. Consequently, our results of operations have been and may continue to be impacted by fluctuations in exchange rates. The net effect of our consolidated foreign exchange exposure in payables and receivables at our affiliates resulted in a net gain of $5 million recorded in “Other income and expenses, net” in our Consolidated Statement of Income for the third quarter of 2023.

The assets and liabilities of subsidiaries whose functional currency is different from the U.S. dollar reporting currency are, for consolidation purposes, translated into U.S. dollars at the period-end exchange rate. Income and expenses, as well as cash flows, are translated at the average exchange rate for the period. These currency translation effects have been, and may be, significant from period to period since a large part of our assets and liabilities and activities are accounted for in Euros as they are located in jurisdictions where the Euro is the functional currency. Adjustments resulting from the currency translation are recorded directly in equity and are reported as “Accumulated other comprehensive income (loss)” in the Consolidated Statements of Equity. As of September 30, 2023, our outstanding indebtedness was denominated mainly in U.S. dollars and in Euros.

For a more detailed discussion, see Item 3. “Key Information — Risks Related to Our Operations” in our Form 20-F, which may be updated from time to time in our public filings.

Impact of Changes in Interest Rates

Interest rates may fluctuate upon changes in financial market conditions and material changes can affect our results of operations and financial condition, since these changes can impact the total interest income received on our cash and cash equivalents, short-term deposits and marketable securities, as well as the total interest expense paid on our financial debt.

Our interest income, net, as reported in our Unaudited Interim Consolidated Statements of Income, is the balance between interest income received from our cash and cash equivalents, short-term deposits and marketable securities, and interest expense recorded on our financial liabilities, including bank fees (including fees on committed credit lines or on the sale without recourse of receivables, if any). Our interest income is dependent upon fluctuations in interest rates, mainly in U.S. dollars and Euros, since we invest primarily on a short-term basis; any increase or decrease in the market interest rates would mean a proportional increase or decrease in our interest income. Our interest expenses are also dependent upon fluctuations in interest rates, since our financial liabilities include European Investment Bank (“EIB”) and Cassa Depositi e Prestiti SpA (“CDP SpA”) Floating Rate Loans at Euribor plus variable spreads. See Note 22 to our Unaudited Interim Consolidated Financial Statements.

As of September 30, 2023, our total financial resources, including cash and cash equivalents, short-term deposits and marketable securities generated an average annual interest rate of 5.06%. At the same date, the average annual interest rate on our outstanding debt was 1.87%.

Impact of Changes in Equity Prices

As of September 30, 2023, we did not hold any significant investments in equity securities with a material exposure to equity price risk. However, on these equity investments, carrying value could be reduced due to further losses or impairment charges. See Note 19 and Note 20 to our Unaudited Interim Consolidated Financial Statements.

Liquidity and Capital Resources

Treasury activities are regulated by our policies, which define procedures, objectives and controls. Our policies focus on the management of our financial risk in terms of exposure to currency rates and interest rates. Most treasury activities are centralized, with any local treasury activities subject to oversight from our head treasury office. The majority of our cash and cash equivalents are held in U.S. dollars and Euros and are placed with financial institutions rated at least as single A long-term rating, meaning at least A3 from Moody’s Investors Service (“Moody’s”) and A- from Standard & Poor’s (“S&P”) or Fitch Ratings (“Fitch”). Marginal amounts are held in other currencies. See “Item 11. Quantitative and Qualitative Disclosures About Market Risk” in our Form 20-F, which may be updated from time to time in our public filings.

Cash flow

We maintain an adequate cash position and a low debt-to-equity ratio, to provide us with adequate financial flexibility. As in the past, our cash management policy is to finance our investment needs mainly with net cash generated from operating activities.

During the first nine months of 2023, our cash and cash equivalents decreased by $247 million. The components of the net cash variation for the first nine months of 2023 and the comparable period are set forth below:


	Nine Months ended
	September 30, 2023		October 1, 2022
	(In millions)
Net cash from operating activities	$	4,512	$	3,653
Net cash used in investing activities	(4,157)		(3,668)
Net cash used in financing activities	(602)		(382)
Effect of changes in exchange rates	—		(16)
Net cash decrease	$	(247)	$	(413)

Net cash from operating activities. Net cash from operating activities is the sum of (i) net income adjusted for non-cash items and (ii) changes in net working capital. The net cash from operating activities for the first nine months of 2023 was $4,512 million, increasing compared to $3,653 million in the prior-year period mainly due to higher net income adjusted for non-cash items.

Net cash used in investing activities. Investing activities used $4,157 million of cash in the first nine months of 2023, increasing compared to $3,668 million used in the prior-year period, mainly due to increased payments for net purchase of tangible assets, which totaled $3,313 million in the first nine months of 2023 compared to $2,605 million in the prior-year period, higher purchases of marketable securities, partially offset by net proceeds from marketable securities and short-term deposits. Our net capital expenditures in the first nine months of 2023 primarily included investments related to 300mm wafer fabs in Crolles and Agrate, and our silicon carbide activities.

Net cash used in financing activities. Net cash used in financing activities was $602 million for the first nine months of 2023, compared to net cash used in financing activities of $382 million in the first nine months of 2022, and consisted mainly of $260 million repurchase of common stock, $163 million of dividends paid to stockholders and $127 million repayment of financial debt.

Free Cash Flow (non-U.S. GAAP measure)

We also present Free Cash Flow, which is a non-U.S. GAAP measure, defined as (i) net cash from operating activities plus (ii) net cash used in investing activities, excluding payment for purchase of (and proceeds from matured) marketable securities, and net investment in (and proceeds from) short-term deposits, which are considered as temporary financial investments. This definition ultimately results in net cash from operating activities plus payment for purchase (and proceeds from sale) of tangible, intangible and financial assets, proceeds from capital grants and other contributions, and net cash paid for business acquisitions, if any.

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 operations. Free Cash Flow does not represent total cash flow since it does not include the cash flows from, or used in, financing activities.

Free Cash Flow reconciles with the total cash flow and the net cash increase (decrease) by including the payment for purchases of (and proceeds from matured) marketable securities and net investment in (and proceeds from) short-term deposits, the net cash from (used in) financing activities and the effect of changes in exchange rates. Our definition of Free Cash Flow may differ from definitions used by other companies. Free Cash Flow is determined from our Unaudited Interim Consolidated Statements of Cash Flows as follows:


	Three Months ended		Nine Months ended
	September 30, 2023		September 30, 2023		October 1, 2022
	(In millions)
Net cash from operating activities	$	1,881	$	4,512	$	3,653
Payment for purchase of tangible assets, net of proceeds from sale and proceeds from capital grants and other contributions	(1,152)		(3,313)		(2,605)
Payment for purchase of intangible assets, net of proceeds from sale	(22)		(69)		(60)
Payment for purchase of financial assets, net of proceeds from sale	—		(8)		—

Free Cash Flow (non-U.S. GAAP measure)(1)	$	707	$	1,122	$	988

(1) Free Cash Flow can also be expressed as Net cash from operating and investing activities, excluding cash from (used in) marketable securities and short-term deposits.

Free Cash Flow was positive $1,122 million in the first nine months of 2023, compared to positive $988 million in the prior-year period.

Net Financial Position (non-U.S. GAAP measure)

Our Net Financial Position represents the difference between our total liquidity and our total financial debt. Our total liquidity includes cash and cash equivalents, short-term deposits and marketable securities, and our total financial debt includes short-term debt and long-term debt, as reported in our Consolidated Balance Sheets. Net Financial Position is not a U.S. GAAP measure, but we believe it provides useful information for investors and management because it gives evidence of our global position either in terms of net indebtedness or net cash by measuring our capital resources based on cash and cash equivalents, short-term deposits and marketable securities and the total level of our financial debt. Our definition of Net Financial Position may differ from definitions used by other companies and therefore comparability may be limited. Our Net Financial Position for each period is determined from our Consolidated Balance Sheets as follows:


	As of
	September 30, 2023		December 31, 2022		October 1, 2022
	(In millions)
Cash and cash equivalents	$	3,011	$	3,258	$	2,812

Short-term deposits	506		581		780
Marketable securities	1,537		679		496
Total liquidity	5,054		4,518		4,088
Short-term debt	(173)		(175)		(155)
Long-term debt	(2,418)		(2,542)		(2,476)
Total financial debt	(2,591)		(2,717)		(2,631)
Net Financial Position (non-U.S. GAAP measure)	$	2,463	$	1,801	$	1,457

Our Net Financial Position as of September 30, 2023, was $2,463 million, increasing compared to $1,801 million and $1,457 million as of December 31, 2022 and October 1, 2022 respectively.

Cash and cash equivalents amounted to $3,011 million as of September 30, 2023.

Short-term deposits amounted to $506 million as of September 30, 2023 and consisted of available liquidity with original maturity over three months.

Marketable securities amounted to $1,537 million and consisted of U.S. Treasury Bonds classified as available-for-sale financial assets.

Financial debt was $2,591 million as of September 30, 2023 and was composed of (i) $173 million of short-term debt and (ii) $2,418 million of long-term debt. The breakdown of our total financial debt included (i) $742 million in EIB loans, (ii) $285 million in CDP SpA loans, (iii) $1,496 million in our 2020 Senior Unsecured Convertible Bonds, (iv) $63 million in finance leases, and (v) $5 million in loans from other funding programs.

The EIB loans are comprised of three long-term amortizing credit facilities as part of public funding programs. The first, signed in August 2017, is a €500 million loan, in relation to R&D and capital expenditures in the European Union, fully drawn in Euros, of which $318 million was outstanding as of September 30, 2023. The second one, signed in 2020, is a €500 million credit facility agreement with EIB to support R&D and capital expenditure programs in Italy and France. The amount was fully drawn in Euros representing $424 million outstanding as of September 30, 2023. In 2022, we signed a third long-term amortizing credit facility with EIB of €600 million, out of which no amount had been drawn as of September 30, 2023.

The CDP SpA loans are comprised of two long-term credit facilities. The first, signed in 2021, is a €150 million loan, fully drawn in Euros, of which $106 million were outstanding as of September 30, 2023. The second one, signed in 2022, is a €200 million loan, fully drawn in Euros, of which $179 million were outstanding as of September 30, 2023.

On August 4, 2020, we issued a $1.5 billion offering of senior unsecured convertible bonds convertible into new or existing ordinary shares of the Company. The 2020 Senior Unsecured Convertible Bonds were issued in two $750 million principal amount tranches, Tranche A with a maturity of 5 years (47.5% conversion premium, negative 1.12% yield to maturity, 0% coupon) and Tranche B with a maturity of 7 years (52.5% conversion premium, negative 0.63% yield to maturity, 0% coupon). The conversion price is $43.62 on Tranche A and $45.10 on Tranche B. The 2020 Senior Unsecured Convertible Bonds are convertible by the bondholders if certain conditions are satisfied, on a net-share settlement basis, except if we elect a full-cash or a full-share conversion as an alternative settlement. Proceeds from the issuance of the bonds, net of $10 million transaction costs, amounted to $1,567 million. Long-term debt as of September 30, 2023, reflects the nominal value of the 2020 senior unsecured convertible bonds less $4 million unamortized debt issuance costs, at $1,496 million.

Our long-term debt contains standard conditions but does not impose minimum financial ratios. We had unutilized committed medium-term credit facilities with core relationship banks totaling $1,324 million as of September 30, 2023.

As of September 30, 2023, debt payments at redemption value by period were as follows:


	Payments Due by Period
	Total		2023		2024		2025		2026		2027		Thereafter
	(In millions)
Long-term debt (including current portion)	$	2,595	$	41	$	171	$	921	$	171	$	907	$	384

In the above table, our 2020 Senior Unsecured Convertible Bonds are presented at their nominal value with original maturity date of 2025 for Tranche A and 2027 for Tranche B, in line with contractual terms.

Our current ratings with the three major rating agencies that report on us on a solicited basis, are as follows: S&P: “BBB” with positive outlook; Moody’s: “Baa2” with positive outlook; Fitch: “BBB+” with stable outlook.

Financial Outlook: Capital Investment

Our policy is to modulate our capital spending according to the evolution of the semiconductor market and our financial performance. For 2023, we plan to invest about $4.0 billion in capital expenditures (net of proceeds from capital grants and other contributions) mainly to increase our 300mm wafer fabs and silicon carbide manufacturing capacity including, for silicon carbide, our substrate initiative.

A large portion of capital expenditures will be devoted to support capacity additions and mix change in our manufacturing footprint, in particular for our wafer fabs: (i) the ramp-up of our new 300mm wafer fab in Agrate, Italy, to support mixed signal technologies and then phase-in smart power technologies and embedded-non-volatile memory at a later stage; (ii) digital 300mm in Crolles, France, to extend the cleanroom and support production ramp-up of our main runner technologies; (iii) certain selected programs of capacity growth in some of our most advanced 200mm fabs, including the analog 200mm fab in Singapore; (iv) increase capacity for silicon carbide products in our Catania and Singapore fabs; and (v) ramping a new integrated silicon carbide substrate manufacturing facility for the production in volume of 150mm, moving to 200mm in the future, silicon carbide epitaxial substrates. The most important 2023 capital investments for our back-end facilities will be: (i) capacity growth on certain package families, including the SiC technology and automotive related packages, (ii) the new generation of Intelligent Power Modules for Automotive and Industrial applications, and (iii) specific investments in innovative assembly processes and test operations.

The remaining part of our capital investment plan covers the overall maintenance and efficiency improvements of our manufacturing operations and infrastructure, R&D activities, laboratories as well as the execution of our carbon neutrality programs.

We will continue to invest to support revenues growth and new products introduction, taking into consideration factors such as trends in the semiconductor industry, capacity utilization and our goal to become carbon neutral on scope 1 and 2 and partially scope 3 by 2027. We expect to need significant financial resources in the coming years for capital expenditures and for our investments in manufacturing and R&D. We plan to fund our capital requirements with cash provided by operating activities, available funds and support from third parties, and may have recourse to borrowings under available credit lines and, to the extent necessary or attractive based on market conditions prevailing at the time, the issuance of debt, convertible bonds or additional equity securities. A substantial deterioration of our economic results, and consequently of our profitability, could generate a deterioration of the cash generated by our operating activities. Therefore, there can be no assurance that, in future periods, we will generate the same level of cash as in prior years to fund our capital expenditure plans for expanding/upgrading our production facilities, our working capital requirements, our R&D and manufacturing costs.

We believe that we have the financial resources needed to meet our currently projected business requirements for the next twelve months, including capital expenditures for our manufacturing activities, working capital requirements, approved dividend payments, share buy-backs as part of our current repurchase program and the repayment of our debt in line with maturity dates.

We will drive the Company based on a plan that translates into full year 2023 revenues of about $17.3 billion, representing 7.3% year-over-year growth and a gross margin of about 48.1%.

Contractual Obligations, Commercial Commitments and Contingencies

Our contractual obligations, commercial commitments and contingencies are mainly comprised of: long-term purchase commitments for material, equipment and software license, take-or-pay type of agreements to outsource wafers from foundries, commercial agreements with customers, long term debt obligations, pension obligations and other long-term liabilities.

Off-Balance Sheet Arrangements

We had no material off-balance sheet arrangements as of September 30, 2023.

Impact of Recently Issued U.S. Accounting Standards

See Note 5 Recent Accounting Pronouncements to our Unaudited Interim Consolidated Financial Statements.

Backlog and Customers

During the third quarter of 2023, our booking plus net frame orders decreased compared to the second quarter of 2023. We entered the fourth quarter of 2023 with a backlog lower than the level we had when entering in the third quarter of 2023. Backlog (including frame orders) is subject to possible cancellation, push back and lower ratio of frame orders being translated into firm orders and, thus, it is not necessarily indicative of the amount of billings or growth to be registered in subsequent periods.

There is no guarantee that any customer will continue to generate revenues for us at the same levels as in prior periods. If we were to lose one or more of our key customers, or if they were to significantly reduce their bookings, not confirm planned delivery dates on frame orders in a significant manner or fail to meet their payment obligations, our operating results and financial condition could be adversely affected.

Disclosure Controls and Procedures

Evaluation

Our management, including the CEO and CFO, performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Disclosure Controls”) as of the end of the period covered by this report. Disclosure Controls are controls and procedures designed to reasonably assure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, (as amended, the “Exchange Act”), such as this periodic report, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure Controls are also designed to reasonably assure that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Our quarterly evaluation of Disclosure Controls includes an evaluation of certain components of our internal control over financial reporting, and internal control over financial reporting is also separately evaluated on an annual basis.

The evaluation of our Disclosure Controls included a review of the controls’ objectives and design, our implementation of the controls and their effect on the information generated for use in this periodic report. In the course of the controls evaluation, we reviewed identified data errors, errors in process flow or delay in communication, control problems and sought to confirm that appropriate corrective actions, including process improvements, were being undertaken. This type of evaluation is performed at least on a quarterly basis so that the conclusions of management, including the CEO and CFO, concerning the effectiveness of the Disclosure Controls can be reported in our periodic reports on Form 6 K and Form 20 F. The components of our Disclosure Controls are also evaluated on an ongoing basis by our Internal Audit Department, which reports directly to our Audit Committee. The overall goals of these various evaluation activities are to monitor our Disclosure Controls, and to modify them as necessary. Our intent is to maintain the Disclosure Controls as dynamic systems that change as conditions warrant.

Based upon the controls evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this periodic report, our Disclosure Controls were effective.

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls

No system of internal control over financial reporting, including one determined to be effective, may prevent or detect all misstatements. It can provide only reasonable assurance regarding financial statement preparation and presentation. Also, projections of the results of any evaluation of the effectiveness of internal control over financial reporting into future periods are subject to inherent risk that the relevant controls may become inadequate due to changes in circumstances or that the degree of compliance with the underlying policies or procedures may deteriorate.

Other Reviews

We have sent this report to our Audit Committee, which had an opportunity to raise questions with our management and independent auditors before we submitted it to the Securities and Exchange Commission.

Cautionary Note Regarding Forward-Looking Statements

Some of the statements contained in this Form 6-K that are not historical facts, particularly in “Business Overview” and in “Liquidity and Capital Resources—Financial Outlook: Capital Investment”, are statements of future expectations and other forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended) that are based on management’s current views and assumptions, and are conditioned upon and also involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those anticipated by such statements due to, among other factors:

•Changes in global trade policies, including the adoption and expansion of tariffs and trade barriers, that could affect the macro-economic environment and adversely impact the demand for our products;

•Uncertain macro-economic and industry trends (such as inflation and fluctuations in supply chains), which may impact production capacity and end-market demand for our products;

•Customer demand that differs from projections;

•The ability to design, manufacture and sell innovative products in a rapidly changing technological environment;

•Changes in economic, social, public health, labor, political, or infrastructure conditions in the locations where we, our customers, or our suppliers operate, including as a result of macroeconomic or regional events, geopolitical and military conflicts (including the ongoing conflict between Russia and Ukraine), social unrest, labor actions, or terrorist activities;

•Unanticipated events or circumstances, which may impact our ability to execute our plans and/or meet the objectives of our R&D and manufacturing programs, which benefit from public funding;

•Financial difficulties with any of our major distributors or significant curtailment of purchases by key customers;

•The loading, product mix, and manufacturing performance of our production facilities and/or our required volume to fulfill capacity reserved with suppliers or third party manufacturing providers;

•Availability and costs of equipment, raw materials, utilities, third-party manufacturing services and technology, or other supplies required by our operations (including increasing costs resulting from inflation);

•The functionalities and performance of our information technology (“IT”) systems, which are subject to cybersecurity threats and which support our critical operational activities including manufacturing, finance and sales, and any breaches of our IT systems or those of our customers, suppliers, partners and providers of third-party licensed technology;

•Theft, loss, or misuse of personal data about our employees, customers, or other third parties, and breaches of data privacy legislation;

•The impact of intellectual property claims by our competitors or other third parties, and our ability to obtain required licenses on reasonable terms and conditions;

•Changes in our overall tax position as a result of changes in tax rules, new or revised legislation, the outcome of tax audits or changes in international tax treaties which may impact our results of operations as well as our ability to accurately estimate tax credits, benefits, deductions and provisions and to realize deferred tax assets;

•Variations in the foreign exchange markets and, more particularly, the U.S. dollar exchange rate as compared to the Euro and the other major currencies we use for our operations;

•The outcome of ongoing litigation as well as the impact of any new litigation to which we may become a defendant;

•Product liability or warranty claims, claims based on epidemic or delivery failure, or other claims relating to our products, or recalls by our customers for products containing our parts;

•Natural events such as severe weather, earthquakes, tsunamis, volcano eruptions or other acts of nature, the effects of climate change, health risks and epidemics or pandemics such as the COVID-19 pandemic in locations where we, our customers or our suppliers operate;

•Increased regulation and initiatives in our industry, including those concerning climate change and sustainability matters and our goal to become carbon neutral on scope 1 and 2 and partially scope 3 by 2027;

•Potential loss of key employees and potential inability to recruit and retain qualified employees as a result of epidemics or pandemics such as the COVID-19 pandemic, remote-working arrangements and the corresponding limitation on social and professional interaction;

•The duration and the severity of the global outbreak of COVID-19 may continue to negatively impact the global economy in a significant manner for an extended period of time, and also could materially adversely affect our business and operating results;

•Industry changes resulting from vertical and horizontal consolidation among our suppliers, competitors, and customers; and

•The ability to successfully ramp up new programs that could be impacted by factors beyond our control, including the availability of critical third party components and performance of subcontractors in line with our expectations.

Such forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of our business to differ materially and adversely from the forward-looking statements. Certain forward-looking statements can be identified by the use of forward-looking terminology, such as “believes”, “expects”, “may”, “are expected to”, “should”, “would be”, “seeks” or “anticipates” or similar expressions or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans or intentions.

Some of these risks are set forth and are discussed in more detail in “Item 3. Key Information - Risk Factors” included in our Annual Report on Form 20-F for the year ended December 31, 2022 as filed with the Securities and Exchange Commission (“SEC”) on February 23, 2023. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in our Form 20-F as anticipated, believed or expected. We do not intend, and do not assume any obligation, to update any industry information or forward-looking statements set forth in this Form 6-K to reflect subsequent events or circumstances.

Unfavorable changes in the above or other risks or uncertainties listed under “Item 3. Key Information - Risk Factors” from time to time in our SEC filings, could have a material adverse effect on our business.

STMICROELECTRONICS N.V.

UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS


			Pages
Consolidated Statements of Income for the Three and Nine months ended Se ptember 30 , 2023, and Oc tober 1 , 2022 (unaudited)			F-1
Consolidated Statements of Comprehensive Income for the Three and Nine months ended September 30 , 2023, and October 1 , 2022 (unaudited)			F-3
Consolidated Balance Sheets as of September 30 , 2023 (unaudited) and December 31, 2022 (audited)			F-5
Consolidated Statements of Equity for the Three and Nine months ended September 30 , 2023 and October 1 , 2022 (unaudited)			F-6
Consolidated Statements of Cash Flows for the Nine months ended Septem ber 30 , 2023, and October 1 , 2022 (unaudited)			F-8
Notes to Interim Consolidated Financial Statements (unaudited)			F-9

STMicroelectronics N.V.

CONSOLIDATED STATEMENTS OF INCOME


	Three Months Ended
	(Unaudited)
In million of U.S. dollars except per share amounts	September 30, 2023	October 1, 2022
Net sales	4,416	4,305
Other revenues	15	16
Net revenues	4,431	4,321
Cost of sales	(2,322)	(2,262)
Gross profit	2,109	2,059
Selling, general and administrative expenses	(407)	(352)
Research and development expenses	(519)	(463)
Other income and expenses, net	58	28
Operating income	1,241	1,272
Interest income, net	44	16
Other components of pension benefit costs	(5)	(2)
Income before income taxes and noncontrolling interest	1,280	1,286
Income tax expense	(188)	(185)
Net income	1,092	1,101
Net income attributable to noncontrolling interest	(2)	(2)
Net income attributable to parent company stockholders	1,090	1,099

Earnings per share (Basic) attributable to parent company stockholders	1.20	1.21
Earnings per share (Diluted) attributable to parent company stockholders	1.16	1.16

The accompanying notes are an integral part of these unaudited consolidated financial statements

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F-1

STMicroelectronics N.V.

CONSOLIDATED STATEMENTS OF INCOME


	Nine Months ended
	(Unaudited)
In million of U.S. dollars except per share amounts	September 30, 2023	October 1, 2022
Net sales	12,977	11,675
Other revenues	27	29
Net revenues	13,004	11,704
Cost of sales	(6,666)	(6,171)
Gross profit	6,338	5,533
Selling, general and administrative expenses	(1,215)	(1,076)
Research and development expenses	(1,579)	(1,429)
Other income and expenses, net	44	125
Operating income	3,588	3,153
Interest income, net	114	24
Other components of pension benefit costs	(14)	(7)
Income before income taxes and noncontrolling interest	3,688	3,170
Income tax expense	(547)	(454)
Net income	3,141	2,716
Net income attributable to noncontrolling interest	(6)	(3)
Net income attributable to parent company stockholders	3,135	2,713

Earnings per share (Basic) attributable to parent company stockholders	3.47	2.99
Earnings per share (Diluted) attributable to parent company stockholders	3.32	2.87

The accompanying notes are an integral part of these unaudited consolidated financial statements

F-2

STMicroelectronics N.V.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	Three Months Ended
	(Unaudited)
In million of U.S. dollars	September 30, 2023	October 1, 2022
Net income	1,092	1,101
Other comprehensive income (loss), net of tax :
Currency translation adjustments arising during the period	(83)	(172)

Foreign currency translation adjustments	(83)	(172)
Net unrealized gains (losses) on available-for-sale debt securities arising during the period	(6)	(16)
Less: reclassification adjustment for (gains) losses included in net income	—	—
Net unrealized gains (losses) on debt securities	(6)	(16)
Net unrealized gains (losses) on derivatives arising during the period	(45)	(166)
Less: Reclassification adjustment for (gains) losses included in net income	5	52
Net unrealized gains (losses) on derivatives	(40)	(114)
Net gains (losses) on defined benefit pension plans arising during the period	—	—
Less: Amortization of actuarial gains and losses	1	1
Defined benefit pension plans	1	1
Other comprehensive income (loss), net of tax	(128)	(301)
Comprehensive income	964	800
Less: comprehensive income (loss) attributable to noncontrolling interest	3	2
Comprehensive income attributable to the company's stockholders	961	798

The accompanying notes are an integral part of these unaudited consolidated financial statements

F-3

STMicroelectronics N.V.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	Nine Months ended
	(Unaudited)
In million of U.S. dollars	September 30, 2023	October 1, 2022
Net income	3,141	2,716
Other comprehensive income (loss), net of tax :
Currency translation adjustments arising during the period	(22)	(382)

Foreign currency translation adjustments	(22)	(382)
Net unrealized gains (losses) on available-for-sale debt securities arising during the period	(11)	(17)
Less: reclassification adjustment for (gains) losses included in net income	—	—
Net unrealized gains (losses) on debt securities	(11)	(17)
Net unrealized gains (losses) on derivatives arising during the period	(34)	(313)
Less: Reclassification adjustment for (gains) losses included in net income	(22)	119
Net unrealized gains (losses) on derivatives	(56)	(194)
Net gains (losses) on defined benefit pension plans arising during the period	—	—
Less: Amortization of actuarial gains and losses	6	4
Defined benefit pension plans	6	4
Other comprehensive income (loss), net of tax	(83)	(589)
Comprehensive income	3,058	2,127
Less: comprehensive income (loss) attributable to noncontrolling interest	7	3
Comprehensive income attributable to the company's stockholders	3,051	2,124

The accompanying notes are an integral part of these unaudited consolidated financial statements

F-4

STMicroelectronics N.V.

CONSOLIDATED BALANCE SHEETS


In million of U.S. dollars, except share amounts	September 30, 2023	December 31, 2022
	(Unaudited)	(Audited)
ASSETS
Current assets:
Cash and cash equivalents	3,011	3,258
Short-term deposits	506	581
Marketable securities	1,537	679
Trade accounts receivable, net	1,837	1,970
Inventories	2,870	2,583
Other current assets	1,230	734
Total current assets	10,991	9,805
Goodwill	294	297
Other intangible assets, net	353	405
Property, plant and equipment, net	9,672	8,201
Non-current deferred tax assets	510	602
Long-term investments	21	11
Other non-current assets	721	661

Total assets	22,562	19,982

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt	173	175
Trade accounts payable	1,555	2,122
Other payables and accrued liabilities	1,517	1,385
Dividends payable to stockholders	115	60
Accrued income tax	377	95
Total current liabilities	3,737	3,837

Long-term debt	2,418	2,542
Post-employment benefit obligations	338	331
Long-term deferred tax liabilities	55	60
Other long-term liabilities	507	454

Total liabilities	7,055	7,224

Commitment and contingencies

Stockholders' equity:

Common stock (preferred stock: 540,000,000 shares authorized, not issued; common stock: Euro 1.04 par value, 1,200,000,000 shares authorized, 911,281,920 shares issued, 904,706,324 shares outstanding as of September 30, 2023)	1,157	1,157
Additional paid-in-capital	2,800	2,631
Retained earnings	11,395	8,713
Accumulated other comprehensive income	376	460
Treasury stock	(293)	(268)
Total parent company stockholders' equity	15,435	12,693
Noncontrolling interest	72	65
Total stockholders' equity	15,507	12,758

Total liabilities and stockholders' equity	22,562	19,982

The accompanying notes are an integral part of these unaudited consolidated financial statements

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F-5

STMicroelectronics N.V.

CONSOLIDATED STATEMENTS OF EQUITY


In million of U.S. dollars

	Common Stock	Additional Paid-In Capital	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Non controlling Interest	Total Equity
Balance as of July 2, 2022 (Unaudited)	1,157	2,520	(149)	6,421	208	65	10,222
Repurchase of common stock			(86)				(86)
Stock-based compensation expense		48	50	(50)			48
Comprehensive income:
Net income				1,099		2	1,101
Other comprehensive income (loss), net of tax					(301)		(301)
Comprehensive income							800
Dividends to noncontrolling interest						(6)	(6)

Balance as of October 1, 2022 (Unaudited)	1,157	2,568	(185)	7,470	(93)	61	10,978

	Common Stock	Additional Paid-In Capital	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Non controlling Interest	Total Equity
Balance as of July 1, 2023 (Unaudited)	1,157	2,743	(241)	10,340	505	69	14,573
Repurchase of common stock			(87)				(87)
Stock-based compensation expense		57	35	(35)			57
Comprehensive income:
Net income				1,090		2	1,092
Other comprehensive income (loss), net of tax					(129)	1	(128)
Comprehensive income							964


Balance as of September 30, 2023 (Unaudited)	1,157	2,800	(293)	11,395	376	72	15,507

The accompanying notes are an integral part of these unaudited consolidated financial statements

F-6

STMicroelectronics N.V.

CONSOLIDATED STATEMENTS OF EQUITY


In million of U.S. dollars

	Common Stock	Additional Paid-In Capital	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Non controlling Interest	Total Equity
Balance as of December 31, 2021 (Audited)	1,157	2,533	(200)	5,223	496	64	9,273
Repurchase of common stock			(259)				(259)
Transition effect of update in accounting standard		(117)		25			(92)
Stock-based compensation expense		152	274	(274)			152
Comprehensive income:
Net income				2,713		3	2,716
Other comprehensive income (loss), net of tax					(589)		(589)
Comprehensive income							2,127
Dividends to noncontrolling interest						(6)	(6)
Dividends, $0.24 per share				(217)			(217)
Balance as of October 1, 2022 (Unaudited)	1,157	2,568	(185)	7,470	(93)	61	10,978

	Common Stock	Additional Paid-In Capital	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Non controlling Interest	Total Equity
Balance as of December 31, 2022 (Audited)	1,157	2,631	(268)	8,713	460	65	12,758
Repurchase of common stock			(260)				(260)
Stock-based compensation expense		169	235	(235)			169
Comprehensive income:
Net income				3,135		6	3,141
Other comprehensive income (loss), net of tax					(84)	1	(83)
Comprehensive income							3,058
Dividends, $0.24 per share				(218)			(218)
Balance as of September 30, 2023 (Unaudited)	1,157	2,800	(293)	11,395	376	72	15,507

The accompanying notes are an integral part of these unaudited consolidated financial statements

F-7

STMicroelectronics N.V.

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine Months ended
	(Unaudited)
In million of U.S. dollars	September 30, 2023	October 1, 2022
Cash flows from operating activities:
Net income	3,141	2,716
Items to reconcile net income and cash flows from operating activities:
Depreciation and amortization	1,147	884
Amortization of issuance costs on convertible bonds	1	1


Non-cash stock-based compensation	169	152
Other non-cash items	(74)	(89)
Deferred income tax	102	101


Changes in assets and liabilities:
Trade receivables, net	115	(503)
Inventories	(290)	(525)
Trade payables	(225)	259
Other assets and liabilities, net	426	657
Net cash from operating activities	4,512	3,653

Cash flows used in investing activities:
Payment for purchase of tangible assets	(3,363)	(2,613)
Proceeds from capital grants and other contributions	43	5
Proceeds from sale of tangible assets	7	3
Payment for purchase of marketable securities	(1,292)	(511)
Proceeds from matured marketable securities	450	—
Net proceeds from (investment in) short-term deposits	75	(492)
Payment for purchase of intangible assets	(69)	(60)
Payment for purchase of financial assets	(8)	—



Net cash used in investing activities	(4,157)	(3,668)

Cash flows from (used in) financing activities:
Proceeds from long-term debt	2	200


Repayment of current portion of long-term debt	(127)	(96)

Repurchase of common stock	(260)	(259)
Dividends paid to stockholders	(163)	(158)

Payment for withholding tax on vested shares	(52)	(44)
Payment for deferred consideration on business acquisitions	—	(25)
Other financing activities	(2)	—
Net cash used in financing activities	(602)	(382)
Effect of changes in exchange rates	—	(16)
Net cash decrease	(247)	(413)
Cash and cash equivalents at beginning of the period	3,258	3,225
Cash and cash equivalents at end of the period	3,011	2,812

The accompanying notes are an integral part of these unaudited consolidated financial statements

F-8

STMicroelectronics N.V.

Notes to Interim Consolidated Financial Statements (Unaudited)

1.The Company

STMicroelectronics N.V. (the “Company”) is registered in the Netherlands with its corporate legal seat in Amsterdam, the Netherlands, and its corporate headquarters located in Geneva, Switzerland.

The Company is a global semiconductor company that designs, develops, manufactures and markets a broad range of products, including discrete and general-purpose components, application-specific integrated circuits (“ASICs”), full custom devices and semi-custom devices and application-specific standard products (“ASSPs”) for analog, digital and mixed-signal applications. In addition, the Company participates in the manufacturing value chain of smartcard products, which includes the production and sale of both silicon chips and smartcards.

2.Fiscal Year

The Company’s fiscal year ends on December 31. Interim periods are established for accounting purposes on a thirteen-week basis.

The Company’s first quarter ended on April 1, its second quarter ended on July 1, its third quarter ended on September 30, and its fourth quarter will end on December 31.

3.Basis of Presentation

The accompanying unaudited interim consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), consistent in all material respects with those applied for the year ended December 31, 2022. The interim financial information is unaudited but reflects all normal adjustments which are, in the opinion of management, necessary to provide a fair statement of results for the periods presented. The results of operations for the interim period are not necessarily indicative of the results to be expected for the entire year.

All balances and values in the current and prior periods are in millions of U.S. dollars, except share and per-share amounts.

The accompanying unaudited interim consolidated financial statements do not include certain footnotes and financial disclosures normally required on an annual basis under U.S. GAAP. Therefore, these unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 20-F for the year ended December 31, 2022, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 23, 2023.

4.Use of Estimates

The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions. The primary areas that require significant estimates and judgments by management include, but are not limited to:

•sales allowances and returns,

•inventory obsolescence reserves and normal manufacturing capacity thresholds to determine costs capitalized in inventory,

•recognition and measurement of loss contingencies,

•valuation at fair value of assets acquired and liabilities assumed on business acquisitions, and measurement of any contingent consideration,

•annual and trigger-based impairment review of goodwill and intangible assets, as well as the assessment of events which could trigger impairment testing on long-lived assets,

F-9

•assessment of the Company’s long-lived assets economic useful lives,

•assumptions used in measuring expected credit losses and impairment charges on financial assets,

•assumptions used in assessing the number of awards expected to vest on stock-based compensation plans,

•assumptions used in calculating net defined pension benefit obligations and other long-term employee benefits,

•determination of the amount of tax expected to be paid and tax benefit expected to be received, including deferred income tax assets, valuation allowance and provisions for uncertain tax positions and claims.

The Company bases the estimates and assumptions on historical experience and on various other factors such as market trends, market information used by market participants and the latest available business plans that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. While the Company regularly evaluates its estimates and assumptions, the actual results experienced by the Company could differ materially and adversely from those estimates.

5.Recent Accounting Pronouncements

The Company did not adopt in 2023 any new accounting guidance that would have a material impact on its financial position and results of operations. The Company’s financial statements are not expected to be significantly impacted by any accounting pronouncements that are not yet effective and not early adopted by the Company.

6.Other Income and Expenses, Net

Other income and expenses, net consisted of the following:


	Three Months ended		Nine Months ended
	September 30, 2023	October 1, 2022	September 30, 2023	October 1, 2022
Public funding	93	28	145	130
Start-up and phase-out costs	(33)	(1)	(99)	(2)
Exchange gains (losses), net	5	6	8	13
Patent costs	(3)	(3)	(8)	(7)
Gain on sale of non-current assets	1	—	6	3
COVID-19 incremental costs	—	(1)	—	(8)
Other, net	(5)	(1)	(8)	(4)
Total	58	28	44	125

The Company receives public funding from governmental bodies in several jurisdictions.

Start-up costs represent costs incurred in the ramp-up phase of the Company’s newly integrated manufacturing facilities. Phase-out costs are costs incurred during the closing stage of a Company’s manufacturing facility.

Exchange gains and losses, net represent the portion of exchange rate changes on transactions denominated in currencies other than a subsidiary’s functional currency and the changes in fair value of derivative instruments which are not designated as hedges, as described in Note 28.

Patent costs mainly include legal and attorney fees and payment for claims, patent pre-litigation consultancy and legal fees. They are reported net of settlements, if any, which primarily include reimbursements of prior patent litigation costs.

F-10

COVID-19 incremental costs were mainly composed of incremental expenses primarily related to sanitary measures undertaken to protect employees. Starting January 1, 2023, the Company no longer reports Covid-19 related expenses as a component of the line “Other income and expenses, net” in the consolidated statement of income.

7.Interest Income, Net

Interest income, net consisted of the following:


	Three Months ended		Nine Months ended
	September 30, 2023	October 1, 2022	September 30, 2023	October 1, 2022
Income	57	19	155	32
Expense	(13)	(3)	(41)	(8)
Total	44	16	114	24

Interest income is related to cash and cash equivalents, short-term deposits, and marketable securities held by the Company.

Interest expense included the financial cost of the convertible bonds issued by the Company in 2020, which is limited to the amortization expense of debt issuance costs. The amortization expense of debt issuance costs recorded in the first nine months of 2023 was $1 million compared to $1 million in the first nine months of 2022.

8.Income Taxes

Income tax expense is as follows:

Three Months ended

Nine Months ended

September 30,
2023

October 1,
2022

September 30,
2023

October 1,
2022

Income tax expense

(188)

(185)

(547)

(454)

The annual estimated effective tax rate method was applied, as management believes it provides a reliable estimate of the expected yearly income tax expense on an interim basis. The Company registered an income tax expense of $188 million and $547 million during the third quarter and first nine months of 2023, respectively, reflecting a 14.8% estimated annual effective tax rate before discrete items at consolidated level, applied to the consolidated profit before tax.

At each reporting date, the Company assesses the recoverability of deferred tax assets and all material open income tax positions in all tax jurisdictions to determine any uncertain tax position. The Company uses a two-step process for the evaluation of uncertain tax positions. The first step consists in assessing whether the tax benefit must be recognized. The second step consists in measuring the amount of tax benefit to be recognized on each uncertain tax position. In step one, only tax positions with a sustainability threshold higher than 50% are recognized. In step two, the Company determines the amount of recognizable tax benefit. The measurement methodology in step two is based on a “cumulative probability” approach, resulting in the recognition of the largest amount that is greater than 50% likely of being realized upon settlement with the tax authorities.

F-11

9.Earnings per Share

Basic earnings per share (“EPS”) is computed by dividing net income attributable to parent company stockholders by the weighted average number of common stock outstanding during the reporting period. Diluted EPS is computed using the weighted average number of common stock outstanding and the dilutive effect of equity instruments, such as employee stock awards and the shares underlying the Company’s convertible bonds. The following table shows the computation of basic and diluted EPS.


	Three Months ended		Nine Months ended
	September 30, 2023	October 1, 2022	September 30, 2023	October 1, 2022

Basic EPS

Net income attributable to parent company as reported	1,090	1,099	3,135	2,713
Weighted average number of shares outstanding	905,270,004	907,204,360	903,472,513	905,876,592

Basic EPS	1.20	1.21	3.47	2.99

Diluted EPS
Net income attributable to parent company as adjusted	1,090	1,099	3,135	2,713



Weighted average number of shares outstanding	905,270,004	907,204,360	903,472,513	905,876,592
Dilutive effect of stock awards	4,747,115	4,486,758	7,400,243