Goodwill is allocated to the Group\u2019s CGUs. The recoverable amount of a CGU is determined based on value-in-use
calculations. These calculations use cash flow projections based on financial budgets and management\u2019s best
estimates about future developments, as well as market and customer assumptions.
The Group tests whether goodwill has suffered any impairment on an annual basis during the second half of each
year. In the 2022 and 2021 reporting periods, no goodwill impairment was recorded for any of the Group\u2019s CGUs.
For the annual impairment test, the key-assumptions used for value-in-use calculations are based on the most recent
five-year plan of each CGU tested. The average perpetuity growth rate was 1.5% (2021: 1.5%) and discount rate was
from 15% (2021: 10%) pre-tax and inferred from the observable volatility of share prices for comparable companies
in the semiconductor industry. These assumptions have been used, as applicable, for the analysis of each CGU within
the operating segments. Management determined budgeted gross margin based on past performance, and its
expectations for the market development. The average yearly growth rates used are consistent with the forecast
included in industry reports. The discount rates used are pre-tax and reflect specific risks relating to the relevant
\nCGUs. No reasonably possible change in key assumptions would lead to a significant impairment loss.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12307": {
"value": "7.6.12. Intangible assets
Development cost capitalized on projects that are still in progress and therefore not yet amortized amounted to
$738 million as of December 2022 (2021: $642 million). Following the annual impairment test performed in the
second half of 2022, no impairment was recorded on intangible assets not ready for use, excluding capitalized
development costs as detailed below, for any of the Group\u2019s CGUs. The key-assumptions used for value-in-use
calculations are based on the most recent budget of each CGU tested. Management determined budgeted gross
margin based on past performance, and its expectations for the market development.
The impairment and write-offs for 2022 amounted to $115 million, recorded in costs of sales for $77 million,
resulting from write-offs of capitalized development costs related to certain projects that were cancelled, and in
R&D for $38 million related to certain technologies acquired as part of the Group\u2019s recent business combinations.
The impairment and write-offs for 2021 amounted to $40 million, recorded in costs of sales for $39 million, resulting
from write-offs of capitalized development costs related to certain projects that were cancelled, and in R&D for
$1 million of acquired licenses and technologies with no alternative future use.
7.6.13. Goodwill
The Group tests whether goodwill has suffered any impairment on an annual basis during the second half of each
year. In the 2022 and 2021 reporting periods, no goodwill impairment was recorded for any of the Group\u2019s CGUs.
For the annual impairment test, the key-assumptions used for value-in-use calculations are based on the most recent
five-year plan of each CGU tested. The average perpetuity growth rate was 1.5% (2021: 1.5%) and discount rate was
from 15% (2021: 10%) pre-tax and inferred from the observable volatility of share prices for comparable companies
in the semiconductor industry. These assumptions have been used, as applicable, for the analysis of each CGU within
the operating segments. Management determined budgeted gross margin based on past performance, and its
expectations for the market development. The average yearly growth rates used are consistent with the forecast
included in industry reports. The discount rates used are pre-tax and reflect specific risks relating to the relevant
CGUs. No reasonably possible change in key assumptions would lead to a significant impairment loss.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12309": {
"value": "7.6.12. Intangible assets
The 2022 amortization expense included $213 million (2021: $205 million) in costs of sales, $57 million (2021: $54
million) in R&D and $27 million (2021: $23 million) in selling, general and administrative.
Development cost capitalized on projects that are still in progress and therefore not yet amortized amounted to
$738 million as of December 2022 (2021: $642 million). Following the annual impairment test performed in the
second half of 2022, no impairment was recorded on intangible assets not ready for use, excluding capitalized
development costs as detailed below, for any of the Group\u2019s CGUs. The key-assumptions used for value-in-use
calculations are based on the most recent budget of each CGU tested. Management determined budgeted gross
margin based on past performance, and its expectations for the market development.
The impairment and write-offs for 2022 amounted to $115 million, recorded in costs of sales for $77 million,
resulting from write-offs of capitalized development costs related to certain projects that were cancelled, and in
R&D for $38 million related to certain technologies acquired as part of the Group\u2019s recent business combinations.
The impairment and write-offs for 2021 amounted to $40 million, recorded in costs of sales for $39 million, resulting
from write-offs of capitalized development costs related to certain projects that were cancelled, and in R&D for
$1 million of acquired licenses and technologies with no alternative future use.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfResearchAndDevelopmentExpenseExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12563": {
"value": "7.6.13. Goodwill
In millions of U.S. dollars
As of December 31, 2022, the gross value of goodwill was $324 million (2021: $340 million) and the accumulated
impairment was $45 million (2021: $45 million).
\n
Goodwill is allocated to the Group\u2019s CGUs. The recoverable amount of a CGU is determined based on value-in-use
\n
calculations. These calculations use cash flow projections based on financial budgets and management\u2019s best
\n
estimates about future developments, as well as market and customer assumptions.
\n
The Group tests whether goodwill has suffered any impairment on an annual basis during the second half of each
\n
year. In the 2022 and 2021 reporting periods, no goodwill impairment was recorded for any of the Group\u2019s CGUs.
\n
For the annual impairment test, the key-assumptions used for value-in-use calculations are based on the most recent
\n
five-year plan of each CGU tested. The average perpetuity growth rate was 1.5% (2021: 1.5%) and discount rate was
\n
from 15% (2021: 10%) pre-tax and inferred from the observable volatility of share prices for comparable companies
\n
in the semiconductor industry. These assumptions have been used, as applicable, for the analysis of each CGU within
\n
the operating segments. Management determined budgeted gross margin based on past performance, and its
\n
expectations for the market development. The average yearly growth rates used are consistent with the forecast
\n
included in industry reports. The discount rates used are pre-tax and reflect specific risks relating to the relevant
\nCGUs. No reasonably possible change in key assumptions would lead to a significant impairment loss.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGoodwillExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12638": {
"value": "
7.6.14. Other financial assets and financial liabilities
\n
7.6.14.1.
Other financial assets
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Other financial assets (including derivatives)
\n
Other financial assets
\n
Quoted debt securities at FVOCI
\n
(1)
\n
679
\u2014
\n
Unquoted equity securities at FVOCI
\n
(1)
\n
10
10
\n
Quoted equity securities at FVPL
\n
(2)
\n
12
13
\n
Other trading financial assets at FVPL
\n
(2)
\n
14
16
\n
Total other financial assets
715
39
\n
Current
679
\u2014
\n
Non-current
36
39
\n
Derivative financial instruments
\n
Cash flow hedges
\n
Foreign exchange forward contracts
30
2
\n
Currency collars
8
1
\n
Derivatives not designated as hedges
\n
Foreign exchange forward contracts
25
3
\n
Currency collars
6
\u2014
\n
Embedded call option - Senior unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche A)
13
11
\n
Embedded call option - Senior unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche B)
20
15
\n
Total derivatives financial instruments
102
32
\n
Current
69
6
\n
Non-current
33
26
\n
Total other financial assets (including derivatives)
817
71
\n
Total current
748
6
\n
Total non-current
69
65
\n
(1)
FVOCI: Fair Value through Other Comprehensive Income
\n
(2)
FVPL: Fair Value through P&L
Risk management policies relating to credit risk exposure to derivatives counterparties are further described in Note
\n
7.6.35.
\n
Movements in other financial assets (excluding derivatives) recorded in 2022 are summarized as follows:
\n
In millions of U.S. dollars
Jan
1,
2022
\n
Change in
\n
fair value
\n
included in
\n
OCI*
\n
Change in
\n
fair value
\n
included in
\n
income
\n
statement
Purchase
\n
Proceeds at
\n
maturity
Accretion
\n
Realized
\n
gain
Dec
31,
2022
\n
Government bonds issued by
\n
the U.S. Treasury
\u2014
(16
)
\u2014
687
\u2014
8
\u2014
679
\n
Quoted equity
\n
instruments at FVPL
13
\u2014
(1
)
\u2014
\u2014
\u2014
\u2014
12
\n
Sub-total Quoted debt
\n
and equity securities
13
(16
)
(1
)
687
\u2014
8
\u2014
691
\n
Unquoted equity
\n
securities at FVOCI
10
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
10
\n
Other trading financial
\n
assets at FVPL
16
\u2014
(2
)
\u2014
\u2014
\u2014
\u2014
14
\n
Total other financial
\n
assets (excluding
\n
derivatives)
39
(16
)
(3
)
687
\u2014
8
\u2014
715
\n
*OCI: Other comprehensive income
\n
Movements in other financial assets (excluding derivatives) recorded in 2021 are summarized as follows:
\n
In millions of U.S. dollars
Jan
1,
2021
\n
Change in
\n
fair value
\n
included in
\n
OCI*
\n
Change in
\n
fair value
\n
included in
\n
income
\n
statement
Purchase
\n
Proceeds at
\n
maturity
\n
Foreign
\n
exchange
\n
result
\n
recognized in
\n
OCI*
\n
Realized
\n
gain
Dec
31,
2021
\n
Debt securities issued by
\n
the U.S. Treasury
133
(1
)
\u2014
\u2014
(132
)
\u2014
\u2014
\u2014
\n
Quoted equity
\n
instruments at FVPL
13
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
13
\n
Sub-total Quoted debt
\n
and equity securities
146
(1
)
\u2014
\u2014
(132
)
\u2014
\u2014
13
\n
Unquoted equity
\n
securities at FVOCI
10
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
10
\n
Other trading financial
\n
assets at FVPL
12
\u2014
4
\u2014
\u2014
\u2014
\u2014
16
\n
Total other financial
\n
assets (excluding
\n
derivatives)
168
(1
)
4
\u2014
(132
)
\u2014
\u2014
39
\n
*OCI: Other comprehensive income
\n
Investments held in debt securities
\n
As of December 31, 2022, the Group held $679 million of U.S. Treasury debt securities. The debt securities have an
\n
average rating of Aaa/AA+/AAA from Moody\u2019s, S&P and Fitch, respectively and an average maturity of 3.5 years. The
\n
debt securities were reported as current assets on the line \u201cOther current financial assets\u201d on the consolidated
\n
statement of financial position as of December 31, 2022, since they represented investments of funds available for
\n
current operations.
\n
Marketable securities totaling $750 million at principal amount were transferred to financial institutions as part of
\n
short-term securities lending transactions, in compliance with corporate policies. The Group, acting as the securities
\n
lender, does not hold any collateral in this unsecured securities lending transaction. The Group retains effective
\n
control on the transferred securities.
The Group applies a forward-looking expected credit loss (ECL) approach on all debt financial assets not held at FVPL.
\n
For debt securities at FVOCI, the ECL is based on a 12-month expected credit loss basis. The 12-month ECL is the
\n
portion of lifetime ECLs that results from default events on a financial instrument that are possible within 12 months
\n
after the reporting date. Since the Group\u2019s quoted debt instruments at FVOCI comprise solely U.S. Treasury debt
\n
securities, the Group has considered that the ECLs on these investments are insignificant.
\n
Investments held in equity securities
\n
As of December 31, 2022, the Group also had investments in quoted equity securities for an aggregate value of
\n
$12 million, measured at FVPL (December 31, 2021: $13 million).
\n
As of December 31, 2022, the Group also reported other trading financial assets for an aggregate value of $14 million
\n
(December 31, 2021: $16 million).
\n
The Group irrevocably elected to measure at FVOCI unquoted equity securities for an aggregate value of $10 million
\n
(December 31, 2021: $10 million). Since these are strategic investments, the Group considers this classification,
\n
which implies that changes in fair value are not subsequently recycled to earnings, to be more relevant.
\n
The changes in fair value reported on the Group\u2019s investments held in equity securities for the years ended
\n
December 31, 2022 and December 31, 2021 were immaterial.
\n
Short-term deposits
\n
To optimize the return yield on its short-term investments, the Group invested $581 million of available cash in
\n
short-term deposits as of December 31, 2022, compared to $291 million as of December 31, 2021. These short-term
\n
deposits had a maturity beyond three months and no significant risk of changes in fair value. They are reported in
\n
the line \u201cShort-term deposits\u201d of the consolidated statement of financial position.
\n
7.6.14.2.
Other financial liabilities
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Lease financial liabilities
250
203
\n
Deferred and contingent consideration on business acquisitions
31
97
\n
Derivative financial instruments
\n
Cash flow hedges
\n
Foreign exchange forward contracts
17
18
\n
Currency collars
6
7
\n
Derivatives not designated as hedges
\n
Foreign exchange forward contracts
12
12
\n
Currency collars
4
6
\n
Embedded conversion option - Senior unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche A)
110
255
\n
Embedded conversion option - Senior unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche B)
151
282
\n
Total other financial liabilities (including derivatives)
581
880
\n
Total current
204
125
\n
Total non-current
377
755
\n
Risk management policies relating to credit risk exposure to derivatives counterparties are further described in Note
\n
7.6.35. Lease financial liabilities are further described in Note 7.6.11.
7.6.14.3.
Interest-bearing loans and borrowings
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Funding program loans from European Investment Bank:
\n
2.67% due 2028, floating interest rate at Euribor + 0.589%
163
202
\n
1.20% due 2029, floating interest rate at Euribor + 0.564%
183
222
\n
1.31% due 2031, floating interest rate at Euribor + 0.583%
322
379
\n
0.89% due 2031, floating interest rate at Euribor + 0.660%
159
187
\n
Credit Facility from Cassa Depositi e Prestiti S.p.A.
\n
3.15% due 2027, floating interest rate at Euribor + 0.690%
120
156
\n
1.85% due 2027, floating interest rate at Euribor + 0.550%
107
\u2014
\n
2.15% due 2027, floating interest rate at Euribor + 0.850%
107
\u2014
\n
Dual tranche senior unsecured convertible bonds:
\n
Zero-coupon, due 2025 (Tranche A)
717
705
\n
Zero-coupon, due 2027 (Tranche B)
690
677
\n
Other Funding program loans:
\n
0.32% (weighted average), due 2023-2028, fixed interest rate
4
6
\n
Total interest-bearing loans and borrowings
2,572
2,534
\n
Total current
885
143
\n
Total non-current
1,687
2,391
\n
Interest-bearing loans and borrowings are denominated in the following currencies:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
U.S. Dollar
1,407
1,382
\n
Euro
1,165
1,152
\n
Total
2,572
2,534
\n
The European Investment Bank\u2019s loans denominated in Euros, but drawn in U.S. dollars, are classified as U.S. dollar
\n
denominated debt.
\n
Aggregate contractual maturities of interest-bearing loans and borrowings outstanding, excluding repayments of
\n
coupons and interests, are as follows:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
2022
\u2014
143
\n
2023
168
143
\n
2024
168
143
\n
2025
918
893
\n
2026
167
142
\n
2027
903
877
\n
Thereafter
341
311
\n
Total
2,665
2,652
\n
The difference between the total aggregated future maturities in the preceding table and the total carrying amount
\n
of long-term debt is due to unamortized debt discount and issuance costs on the dual tranche senior unsecured
\n
convertible bonds.
Senior convertible bonds
\n
On August 4, 2020, the Company issued $1,500 million in principal amount of dual tranche senior unsecured
\n
convertible bonds (Tranche A for $750 million and Tranche B for $750 million), due 2025 and 2027, respectively.
\n
Tranche A bonds were issued at 105.8% as zero-coupon bonds while Tranche B bonds were issued at 104.5% as zero-
\n
coupon bonds. The conversion price at issuance was $43.62 for Tranche A, equivalent to a 47.5% conversion
\n
premium and $45.10 for Tranche B, equivalent to a 52.5% conversion premium. These conversion features
\n
correspond to an equivalent of 4,585 shares per each Tranche A bond $200,000 par value and an equivalent of 4,435
\n
shares per each Tranche B bond $200,000 par value. The bonds are convertible by the bondholders or are callable
\n
by the issuer upon certain conditions, on a net-share settlement basis, except if the issuer elects a full-cash or full-
\n
share conversion as an alternative settlement. The net proceeds from the bond offering were $1,567 million, after
\n
deducting issuance costs payable by the Group.
\n
The issuer\u2019s call option and the holder\u2019s conversion option have been identified as embedded non-equity derivative
\n
instruments, resulting in the recognition of the options separately from the debt host contract. Upon initial
\n
recognition, the derivatives were measured at fair value based on the income approach, the debt being determined
\n
as a residual amount of the $1.5 billion total proceeds. The value of the issuer\u2019s call option was deemed to be nil at
\n
initial recognition. The value of the holder\u2019s conversion option was estimated at $219 million at issuance date, which
\n
determined the initial recognition of the liability component at $1,358 million before allocation of issuance costs.
\n
The fair value measurement of the embedded derivative instruments corresponded to a Level 3 fair value hierarchy
\n
measurement, which is further described in Note 7.6.14.5. The Group elected to allocate issuance costs, totaling
\n
$10 million, to the debt component. The debt was subsequently measured at amortized cost using the effective
\n
interest method.
\n
Starting August 2023 and August 2024 for Tranche A and Tranche B convertible bonds, respectively, the bondholders
\n
will have full conversion rights. Consequently, Tranche A non-equity embedded derivative instruments and Tranche
\n
A liability component were reported on the line Other current financial assets for an amount of $13 million, on the
\n
line Other current financial liabilities for an amount of $110 million and on the line Interest-bearing loans and
\n
borrowings \u2013 current portion for an amount of $717 million, respectively, of the consolidated statement of financial
\n
position as of December 31, 2022.
\n
Reconciliation of liabilities arising from financing activities
\n
The reconciliation for the year ended December 31, 2022 is as follows:
\n
In millions of U.S. dollars
\n
Interest-
\n
bearing
\n
loans and
\n
borrowings
\n
Other
\n
non-
\n
current
\n
financial
\n
liabilities*
\n
Interest-
\n
bearing
\n
loans and
\n
borrowings
\n
\u2013
current
\n
portion
\n
Other
\n
current
\n
financial
\n
liabilities**
Total
\n
December 31, 2021
2,391
685
143
55
3,274
\n
Cash flows
200
\u2014
(134
)
(58
)
8
\n
Non-cash changes:
\n
New leases
\u2014
112
\u2014
3
115
\n
Accreted finance costs
25
\u2014
\u2014
\u2014
25
\n
Fair value changes
\u2014
(276
)
\u2014
\u2014
(276
)
\n
Reclassification
(885
)
(169
)
885
169
\u2014
\n
Foreign currency translation
(44
)
(10
)
(9
)
\u2014
(63
)
\n
December 31, 2022
1,687
342
885
169
3,083
\n
* \u201dOther non-current financial liabilities\u201d reported above do not include deferred and contingent consideration, as they relate to business
\n
acquisitions.
** \u201dOther current financial liabilities\u201d reported above correspond to the current portion of the lease liability for an amount of $59 million and
\n
Tranche A on bondholder\u2019s conversion option for an amount $110 million. Derivatives are not reported in the above table as they relate to
\n
operating activities. Lease financial liabilities are further described in Note 7.6.11 and convertible bonds are further described in Note 7.6.14.3.
\n
The reconciliation for the year ended December 31, 2021 is as follows:
\n
In millions of U.S. dollars
\n
Interest-
\n
bearing
\n
loans and
\n
borrowings
\n
Other
\n
non-
\n
current
\n
financial
\n
liabilities*
\n
Interest-
\n
bearing
\n
loans and
\n
borrowings
\n
\u2013
current
\n
portion
\n
Other
\n
current
\n
financial
\n
liabilities**
Total
\n
December 31, 2020
1,821
482
796
730
3,829
\n
Cash flows
775
(10
)
(1,384
)
(54
)
(673
)
\n
Non-cash changes:
\n
New leases
\u2014
80
\u2014
\u2014
80
\n
Settlement
\u2014
\u2014
573
(744
)
(171
)
\n
Accreted finance costs
23
\u2014
13
\u2014
36
\n
Fair value changes
\u2014
197
\u2014
68
265
\n
Reclassification
(153
)
(55
)
153
55
\u2014
\n
Foreign currency translation
(75
)
(9
)
(8
)
\u2014
(92
)
\n
December 31, 2021
2,391
685
143
55
3,274
\n
* \u201dOther non-current financial liabilities\u201d and \u201cOther current financial liabilities\u201d reported above do not include deferred and contingent
\n
consideration, as they relate to business acquisitions.
\n
** \u201dOther current financial liabilities\u201d reported above correspond to the current portion of the lease liability for an amount of $55 million.
\n
Derivatives are not reported in the above table as they relate to operating activities. Lease financial liabilities are further described in Note 7.6.11
\n
and convertible bonds are further described in Note 7.6.14.3
\n
The Group\u2019s long-term debt contained standard conditions but does not impose minimum financial ratios. The Group
\n
had unutilized committed credit facilities with core relationship banks totaling $1,281 million as of December 31,
\n
2022.
\n
As of December 31, 2022 the Group also had three long-term amortizing credit facilities with the European
\n
Investment Bank (\u201cEIB\u201d) as part of R&D funding programs and two long-term facilities with CDP SpA.
\n
EIB facilities
\n
The first one, signed in August 2017, is a \u20ac500 million loan, in relation to R&D and capital expenditures in the
\n
European Union, fully drawn in Euros, of which $346 million was outstanding as of December 31, 2022. The second
\n
one, signed in 2020, is a \u20ac500 million facility agreement with EIB to support R&D and capital expenditure programs
\n
in Italy and France. It was fully drawn in 2021, representing $481 million outstanding as of December 31, 2022. In
\n
2022, the Company signed a third long-term amortizing credit facility with EIB of \u20ac600 million loan, out of which, no
\n
amount had been drawn as of December 31, 2022.
\n
CDP SpA facilities
\n
The first, signed in 2021, is a \u20ac150 million loan, fully drawn in Euros, of which $120 million were outstanding as of
\n
December 31, 2022. The second one, signed in 2022, is a \u20ac200 million loan, fully drawn in Euros, of which $214
\n
million was outstanding as of December 31, 2022.
\n
As of December 31, 2021 the Group had three long\u2010term amortizing credit facilities with the EIB as part of R&D
\n
funding programs and one long-term facility with CDP SpA.
EIB facilities
\n
The first one, signed in August 2017, is a \u20ac500 million loan, in relation to R&D and capital expenditures in the
\n
European Union, fully drawn in Euros, of which $424 million was outstanding as of December 31, 2021. The second
\n
one, signed in 2020, is a \u20ac500 million facility agreement with EIB to support R&D and capital expenditure programs
\n
in Italy and France. It was fully drawn in 2021, representing $566 million outstanding as of December 31, 2021. In
\n
June 2021, we signed a new Facility Agreement with CDP SpA for an amount of \u20ac150 million, fully drawn in Euros, of
\n
which $156 million was outstanding as of December 31, 2021.
\n
CDP SpA facilities
\n
In June 2021, we signed a Facility Agreement with CDP SpA for an amount of \u20ac150 million, fully drawn in Euros, of
\n
which $156 million was outstanding as of December 31, 2021.
\n
7.6.14.4.
Hedging activities and derivatives
\n
Derivative instruments not designated as hedge
\n
The Group conducts its business on a global basis in various major international currencies. As a result, the Group is
\n
exposed to adverse movements in foreign currency exchange rates, primarily with respect to the Euro. Foreign
\n
exchange risk mainly arises from future commercial transactions and recognized assets and liabilities at the Group\u2019s
\n
subsidiaries. The Group enters into currency forward contracts to reduce its exposure to changes in exchange rates
\n
and the associated risk arising from the denomination of certain assets and liabilities in foreign currencies at the
\n
Group\u2019s subsidiaries. These instruments do not qualify as hedging instruments and are marked-to-market at each
\n
period-end with the associated changes in fair value recognized in \u201cOther income\u201d or \u201cOther expenses\u201d of the
\n
consolidated income statement.
\n
To reduce its exposure to U.S. dollar exchange rate fluctuations, the Group also hedges certain Euro-denominated
\n
forecasted transactions that cover at reporting date a large part of its R&D and SG&A expenses through the use of
\n
currency forward contracts and currency options, including collars. These instruments do not qualify as hedging
\n
instruments and are marked-to-market at each period-end with the associated changes in fair value recognized in
\n
\u201cOther income\u201d or \u201cOther expenses\u201d of the consolidated income statement.
\n
The notional amount of these financial instruments amounted to $2,041 million in 2022 (2021: $1,244 million). The
\n
principal currencies covered at the end of the year 2022 are the Euro, the Singapore dollar, the Japanese yen, the
\n
China Yuan Renminbi, the Indian rupee, the Swiss franc, the Moroccan dirham, the Malaysian ringgit, the Philippines
\n
peso, the Taiwan dollar, the South Korean won and the Swedish krona.
\n
Foreign currency forward contracts and currency options, including collars, not designated as cash flow hedge
\n
outstanding as of December 31, 2022 had remaining terms of 4 days to 20 months, maturing on average after 144
\n
days.
\n
Foreign currency forward contracts and currency options, including collars, not designated as cash flow hedge
\n
outstanding as of December 31, 2021 had remaining terms of 4 days to 13 months, maturing on average after 106
\n
days.
\n
Derivative instruments designated as cash flow hedge
\n
To reduce its exposure to U.S. dollar exchange rate fluctuations, the Group hedges certain Euro-denominated
\n
forecasted transactions that cover at reporting date a portion of its front-end manufacturing costs of semi-finished
\n
goods through the use of currency forward contracts and currency options, including collars. The Group also hedges
\n
certain manufacturing transactions denominated in Singapore dollars.
\n
The principles regulating the hedging strategy for derivatives designated as cash flow hedge is to hedge up to 70%
\n
of the total forecasted transactions of the following quarter for these manufacturing costs. In order to follow a
\n
dynamic hedge strategy, the Group may change the percentage of the designated hedged item within the limit of
\n
100% of the forecasted transaction. The maximum length of time over which the Group could hedge its exposure to
\n
the variability of cash flows for forecasted transactions is 24 months.
These derivative instruments are designated and qualified as cash flow hedges. Hedge effectiveness is determined
\n
at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure
\n
that an economic relationship exists between the hedged item and the hedging instrument. The Group enters into
\n
hedge relationships where the critical terms of the hedging instrument match with the terms of the hedged item,
\n
which ensures a 1:1 hedge ratio on a monthly basis. The Group therefore performs a qualitative assessment of
\n
effectiveness. If changes in circumstances affect the terms of the hedged item such that the critical terms no longer
\n
match with the critical term of the hedging instrument, the Group uses the hypothetical derivative method to assess
\n
effectiveness. Ineffectiveness may arise if the timing of the forecast transaction changes from what was originally
\n
estimated, which cannot occur as the Group designates as hedged items forecasted intercompany transactions
\n
denominated in foreign currency over which the Group has full oversight, control, and visibility. Ineffectiveness may
\n
arise only if there are changes in the credit risk of the counterparty.
\n
The derivative instruments designated as cash flow hedges are reflected at fair value in the consolidated statement
\n
of financial position. The unrealized gain or loss from the effective portion of the hedge is reported in other
\n
comprehensive income and is reclassified into earnings in the same period in which the hedged transaction affects
\n
earnings, and within the same consolidated income statement line item as the impact of the hedged transaction.
\n
For the year ended December 31, 2022, the Group recorded an increase in cost of sales of $129 million (2021:
\n
decrease of $15 million) related to the realized loss incurred on such hedged transactions. No significant ineffective
\n
portion of the hedge was recorded on the lines \u201cOther income\u201d or \u201cOther expenses\u201d for the years ended
\n
December 31, 2022 and 2021.
\n
The notional amount of foreign currency forward contracts and currency options, including collars, designated as
\n
cash flow hedge amounted to $2,081 million (2021: $1,425 million). The forecasted transactions hedged at
\n
December 31, 2022 were determined to be highly probable of occurring.
\n
As of December 31, 2022, the amount of net deferred gains on derivative instruments included in the cash flow
\n
hedge reserve in equity was $15 million (2021: net deferred losses of $22 million), of which $10 million were
\n
expected to be reclassified as earnings during the next 12 months based on the monthly forecasted semi-finished
\n
manufacturing costs.
\n
Foreign currency forward contracts and currency options, including collars, designated as cash flow hedge
\n
outstanding as of December 31, 2022, had remaining terms of 4 days to 19 months, maturing on average after 228
\n
days.
\n
Foreign currency forward contracts and currency options, including collars, designated as cash flow hedge
\n
outstanding as of December 31, 2021, had remaining terms of 5 days to 13 months, maturing on average after 140
\n
days.
\n
As of December 31, 2022, the Group had the following outstanding derivative instruments that were entered into
\n
to hedge Euro-denominated and Singapore-Dollar-denominated forecasted transactions:
\n
Notional amount for hedge on
\n
forecasted manufacturing costs
\n
transactions
\n
In millions of
\n
Euros
\n
In millions of
\n
Singapore Dollars
\n
Forward contracts
986
247
\n
Currency collars
791
\u2014
As of December 31, 2021, the Group had the following outstanding derivative instruments that were entered into
\n
to hedge Euro-denominated and Singapore-Dollar-denominated forecasted transactions:
\n
Notional amount for hedge on
\n
forecasted manufacturing costs
\n
transactions
\n
In millions of
\n
Euros
\n
In millions of
\n
Singapore Dollars
\n
Forward contracts
604
214
\n
Currency collars
514
\u2014
\n
Cash flow and fair value interest rate risk
\n
The Group\u2019s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the
\n
Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate
\n
risk.
\n
The Group analyzes its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into
\n
consideration refinancing, renewal of existing positions, alternative financing and hedging. The Group invests
\n
primarily on a short-term basis and as such its liquidity is invested in floating interest rate instruments. As a
\n
consequence, the Group is exposed to interest rate risk due to potential mismatch between the return on its short-
\n
term floating interest rate investments and the portion of its long-term debt issued at fixed rate.
\n
Other market risk
\n
As part of its ongoing investing activities, the Group may invest in publicly traded equity securities and be exposed
\n
to equity security price. In order to hedge the exposure to this market risk, the Group may enter into certain
\n
derivative hedging transactions.
\n
Credit risk and the Group\u2019s impairment policies on financial assets are further described in Note 7.6.7.13 and Note
\n
7.6.35.
\n
Offsetting financial assets and financial liabilities
\n
The Group entered into currency collars as combinations of two options, which are reported, for accounting
\n
purposes, on a net basis.
As of December 31, 2022, the fair value of these collars represented assets for a net amount
\n
of $15 million (composed of $19 million assets offset with a $4 million liability) and liabilities for a net amount of $10
\n
million (composed of $15 million liabilities offset with a $5 million asset).
In addition, the Group entered into other
\n
derivative instruments, primarily forward contracts, which are governed by standard International Swaps and
\n
Derivatives Association (\u201cISDA\u201d) agreements and are compliant with Protocols of the European Market
\n
Infrastructure Regulation (\u201cEMIR\u201d), which are not offset in the statement of financial position and representing total
\n
assets of $54 million and liabilities of $29 million as of December 31, 2022.
\n
Risk management policies relating to credit risk exposure to derivatives counterparties is further described in Note
\n
7.6.35.
7.6.14.5.
Fair values
\n
Set out below is a comparison by class of the carrying amounts and fair value of the Group\u2019s financial instruments
\n
that are carried in the consolidated financial statements.
\n
Carrying amount
Fair value
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Financial assets
\n
Short-term deposits
581
291
581
291
\n
Trade accounts receivable
1,970
1,759
1,970
1,759
\n
Other receivables and assets
678
575
678
575
\n
Quoted financial instruments
705
29
705
29
\n
Unquoted equity securities
10
10
10
10
\n
Embedded call option - Senior unsecured
\n
convertible bonds issued on August 4, 2020
\n
(Tranche A)
13
11
13
11
\n
Embedded call option - Senior unsecured
\n
convertible bonds issued on August 4, 2020
\n
(Tranche B)
20
15
20
15
\n
Other financial assets
69
6
69
6
\n
Cash equivalents
\n
(1)
\n
2,996
2,883
2,996
2,883
\n
Financial liabilities
\n
Interest-bearing loans and borrowings
\n
(excluding senior unsecured convertible
\n
bonds)
1,165
1,152
1,165
1,152
\n
Senior unsecured convertible bonds issued
\n
on August 4, 2020
\n
(2)
\n
1,407
1,382
1,561
1,975
\n
Embedded conversion option - Senior
\n
unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche A)
\n
(2)
\n
110
255
\u2014
\u2014
\n
Embedded conversion option - Senior
\n
unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche B)
\n
(2)
\n
151
282
\u2014
\u2014
\n
Deferred consideration on business
\n
acquisitions
\u2014
19
\u2014
19
\n
Contingent consideration on business
\n
acquisitions
31
77
31
77
\n
Trade accounts payable
2,122
1,582
2,122
1,582
\n
Other payables and accrued liabilities
511
266
511
266
\n
Other financial liabilities
39
43
39
43
\n
(1)
Cash equivalents primarily correspond to deposits at call with banks.
\n
(2)
The carrying amount of the senior unsecured convertible bonds issued on August 4, 2020 and outstanding at December 31, 2022 and
\n
December 31, 2021 corresponds to the liability component only, since, at initial recognition, an amount of $219 million was separately
\n
recognized as embedded derivative financial instruments.
The fair value of financial assets and liabilities are included at the price at which the instrument could be sold in an
\n
orderly transaction between market participants at the measurement date. The following methods and assumptions
\n
were used to estimate fair value:
\n
\u2022
For trade accounts receivable, cash equivalents, short-term deposits, trade accounts payable, other
\n
payables and accrued liabilities, the carrying amounts reflected in the consolidated financial statements
\n
are reasonable estimates of fair value due to the relatively short period of time between the origination
\n
of the instruments and their expected realization.
\n
\u2022
Other receivables and assets approximate their carrying amounts due either to their short-term maturities
\n
or to the fact that they are recorded at their net present value.
\n
\u2022
Financial investments (debt and equity securities):
\n
-
The fair value quoted debt and equity securities is determined based upon quoted market prices for
\n
identical instruments.
\n
-
The fair value of unquoted equity securities is based on the valuation of the underlying instruments
\n
on a new round of third-party financing or upon liquidation.
\n
\u2022
The fair value of interest-bearing loans and borrowings, including lease liabilities but excluding senior
\n
unsecured convertible bonds, is determined by estimating future cash flows on a borrowing-by-borrowing
\n
basis and discounting these future cash flows using the Group\u2019s incremental borrowing rates for similar
\n
types of arrangements.
\n
\u2022
The senior unsecured convertible bonds issued on August 4, 2020, and outstanding as of December 31,
\n
2022, and December 31, 2021, have been trading on the open market segment on the Frankfurt Stock
\n
Exchange since issuance. The fair value of these instruments is the observable price of the bonds on that
\n
market.
\n
\u2022
The fair value of derivatives instruments is determined based upon quoted market prices for similar
\n
instruments.
\n
\u2022
The bondholders\u2019 conversion option and the issuer\u2019s soft call embedded in the senior unsecured
\n
convertible bonds are measured at fair value based on the income approach using Bloomberg\u2019s option
\n
pricing model, which can be assimilated to a Black & Scholes model for pricing stock options. This model
\n
was elected as the best indication of fair value since it maximized the use of observable market-based
\n
inputs.
\n
Fair value hierarchy
\n
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by
\n
valuation technique:
\n
\u2022
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
\n
\u2022
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are
\n
observable, either directly or indirectly.
\n
\u2022
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are
\n
not based on observable market data.
As of December 31, 2022, the Group held the following assets and liabilities measured at fair value:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
Level 1
Level 2
Level 3
\n
Assets measured at fair value
\n
Financial assets at FVPL
\n
Trading derivatives
\n
Foreign exchange forward contracts
25
\u2014
25
\u2014
\n
Currency collars
6
\u2014
6
\u2014
\n
Quoted equity securities at FVPL
12
12
\u2014
\u2014
\n
Other trading financial assets at FVPL
14
14
\u2014
\u2014
\n
Embedded call options
33
\u2014
\u2014
33
\n
Cash flow hedges
\n
Foreign exchange forward contracts
30
\u2014
30
\u2014
\n
Currency collars
8
\u2014
8
\u2014
\n
Quoted debt securities measured at FVOCI
\n
Government bonds issued by the U.S. Treasury
679
679
\u2014
\u2014
\n
Unquoted equity securities measured at FVOCI
10
\u2014
\u2014
10
\n
Short-term deposits
581
581
\u2014
\u2014
\n
Total assets
1,398
1,286
69
43
\n
Liabilities measured at fair value
\n
Derivative instruments
\n
Foreign exchange forward contracts
12
\u2014
12
\u2014
\n
Currency collars
4
\u2014
4
\u2014
\n
Cash flow hedges
\n
Foreign exchange forward contracts
17
\u2014
17
\u2014
\n
Currency collars
6
\u2014
6
\u2014
\n
Embedded conversion options
261
\u2014
\u2014
261
\n
Contingent consideration on business acquisitions
31
\u2014
\u2014
31
\n
Total liabilities
331
\u2014
39
292
\n
During the reporting period ending December 31, 2022, there was no transfer between Level 1 and Level 2 fair value
\n
measurements, and no transfer into and out of Level 3 fair value measurements.
As of December 31, 2021, the Group held the following assets and liabilities measured at fair value:
\n
In millions of U.S. dollars
\n
December
31,
\n
2021
Level 1
Level 2
Level 3
\n
Assets measured at fair value
\n
Financial assets at FVPL
\n
Trading derivatives
\n
Foreign exchange forward contracts
3
\u2014
3
\u2014
\n
Quoted equity securities at FVPL
13
13
\u2014
\u2014
\n
Other trading financial assets at FVPL
16
16
\u2014
\u2014
\n
Embedded call options
26
\u2014
\u2014
26
\n
Cash flow hedges
\n
Foreign exchange forward contracts
2
\u2014
2
\u2014
\n
Currency collars
1
\u2014
1
\u2014
\n
Unquoted equity securities measured at FVOCI
10
\u2014
\u2014
10
\n
Short-term deposits
291
291
\u2014
\u2014
\n
Total assets
362
320
6
36
\n
Liabilities measured at fair value
\n
Derivative instruments
\n
Foreign exchange forward contracts
12
\u2014
12
\u2014
\n
Currency collars
6
\u2014
6
\u2014
\n
Cash flow hedges
\u2014
\n
Foreign exchange forward contracts
18
\u2014
18
\u2014
\n
Currency collars
7
\u2014
7
\u2014
\n
Embedded conversion options
537
\u2014
\u2014
537
\n
Contingent consideration on business acquisitions
77
\u2014
\u2014
77
\n
Total liabilities
657
\u2014
43
614
\n
During the reporting period ending December 31, 2021, there was no transfer between Level 1 and Level 2 fair value
\n
measurements, and no transfer into and out of Level 3 fair value measurements.
\n
Financial instruments in Level 1
\n
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet
\n
date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer,
\n
broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly
\n
occurring market transactions on an arm\u2019s length basis. The quoted market price used for financial assets held by
\n
the Group is the current bid price. These instruments are included in Level 1.
\n
Financial instruments in Level 2
\n
The fair value of financial instruments that are not traded in active markets (for example over the counter
\n
derivatives) is determined by using valuation techniques. These valuation techniques maximize the use of observable
\n
market data when available and rely as little as possible on entity\u2019s specific estimates. If all significant inputs required
\n
to fair value an instrument are observable, the instrument is included in Level 2. If one or more of the significant
\n
inputs is not based on observable market data, the instrument is included in Level 3. Specific valuation techniques
\n
used to value financial instruments include:
\n
\u2022
Quoted market prices or dealer\u2019s quotes for similar instruments; and
\n
\u2022
The fair value of foreign exchange forward contracts when determined using forward exchange rates at
\n
the balance sheet date, with the resulting value discounted back to present value.
Financial instruments in Level 3
\n
For financial assets (liabilities) measured at fair value using significant unobservable inputs (Level 3), the
\n
reconciliation between January 1, 2022 and December 31, 2022 is presented as follows:
\n
In millions of U.S. dollars
\n
Fair value measurements using
\n
significant unobservable inputs (Level 3)
\n
As of January 1, 2022
(578
)
\n
Change in fair value of the embedded conversion option of the
\n
senior unsecured convertible bonds issued on August 4, 2020
\n
(Tranche A and Tranche B)
276
\n
Change in fair value of the embedded call option of the senior
\n
unsecured convertible bonds issued on August 4, 2020 (Tranche A
\n
and Tranche B)
7
\n
Change in fair value of the contingent consideration on business
\n
acquisitions
35
\n
Currency translation adjustment
4
\n
Payment of contingent consideration
7
\n
As of December 31, 2022
(249
)
\n
Amount of net gains included in the 2022 income statement
\n
attributable to assets (liabilities) still held at the reporting date
318
\n
The following table shows the impact on the income statement of the valuation of the embedded derivative
\n
instruments outstanding as of December 31, 2022:
\n
In millions of U.S. dollars
\n
Asset (liability) value as of December 31, 2021
(511
)
\n
Gains (losses) recognized in the consolidated income statement
283
\n
Asset (liability) value as of December 31, 2022
(228
)
\n
Contingent consideration reported as liabilities on the consolidated statement of financial position as of December
\n
31, 2022 and December 31, 2021 is based on the probability that the milestones defining the variable components
\n
of the consideration will be achieved. In 2022, the probability of achievement of these variable components was
\n
reassessed, resulting in a reduction of $35 million of the fair value of the contingent consideration related to the
\n
2020 acquisitions. The Group reported this change in fair value in the lines \u201cResearch and development\u201d and \u201cCost
\n
of sales\u201d of the consolidated statement of income, for $33 million and $2 million, respectively.
\n
The change in fair value amounting to $276 million on the embedded bondholders\u2019 conversion options was reported
\n
as \u201cFinance income\u201d in the consolidated income statement ended December 31, 2022. The change in fair value
\n
amounting to $7 million on the embedded issuer\u2019s call options was reported as \u201cFinance income\u201d in the consolidated
\n
income statement ended December 31, 2022.
\n
The model used to price the derivative instruments embedded in the senior unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche A and Tranche B) included the following inputs:
\n
\u2022
The risk-free interest rate for comparable maturities;
\n
\u2022
The reference price for the Company\u2019s ordinary shares as traded on the New York Stock Exchange;
\n
\u2022
The exercise price;
\n
\u2022
The dividend expected to be paid on the Company\u2019s ordinary shares over the life of the option;
\n
\u2022
The volatility of the Company\u2019s ordinary shares; and
\n
\u2022
The duration of the option.
Sensitivity to the share price variations is further described in Note 7.6.35. Implied volatility should be considered
\n
an unobservable input due to the lack of market data (stock exchange listing of the bond option) for a time horizon
\n
equal to the duration of the option. The figure is, therefore, an assumption based on the volatility implied by the
\n
price of the financial instrument, as negotiated at the issue stage, and market volatility for the nearest time horizon.
\n
The prices of the bondholders\u2019 conversion options are sensitive to implied volatility. The table below shows a
\n
sensitivity analysis of the net carrying amount of the embedded conversion options in relation to a series of changes
\n
expressed in percentage point terms of volatility.
\n
Change in volatility of the Company
\u2019
s ordinary
\n
shares
-10 p.p.
- 8 p.p.
-5 p.p.
+5 p.p.
+8 p.p.
+10 p.p.
\n
Change in the net carrying amount of the
\n
bondholders
\u2019
conversion options
(89
)
(71
)
(44
)
43
69
85
\n
Net carrying amount of the embedded
\n
conversion
\n
options
172
190
217
304
330
346
\n
For financial assets (liabilities) measured at fair value using significant unobservable inputs (Level 3), the
\n
reconciliation between January 1, 2021 and December 31, 2021 is presented as follows:
\n
In millions of U.S. dollars
\n
Fair value measurements using
\n
significant unobservable inputs (Level
3)
\n
As of January 1, 2021
(1,035
)
\n
Change in fair value of the embedded conversion option of the
\n
senior unsecured convertible bonds issued on July 3, 2017
\n
(Tranche B)
(68
)
\n
Change in fair value of the embedded call option of the senior
\n
unsecured convertible bonds issued on July 3, 2017 (Tranche B)
(121
)
\n
Extinguishment of the embedded conversion option of the senior
\n
unsecured convertible bonds issued on July 3, 2017 (Tranche B)
744
\n
Extinguishment of the embedded call option of the senior
\n
unsecured convertible bonds issued on July 3, 2017 (Tranche B)
60
\n
Change in fair value of the embedded conversion option of the
\n
senior unsecured convertible bonds issued on August 4, 2020
\n
(Tranche A and Tranche B)
(197
)
\n
Change in fair value of the embedded call option of the senior
\n
unsecured convertible bonds issued on August 4, 2020 (Tranche A
\n
and Tranche B)
(6
)
\n
Change in fair value of the contingent consideration on business
\n
acquisitions
38
\n
Currency translation adjustment
8
\n
As of December 31, 2021
(577
)
\n
Amount of net losses included in the 2021 income statement
\n
attributable to assets (liabilities) still held at the reporting date
(165
)
The following table shows the impact on the income statement of the valuation of the embedded derivative
\n
instruments outstanding as of December 31, 2021:
\n
In millions of U.S. dollars
\n
Asset (liability) value as of December 31, 2020
(922
)
\n
Settlement of Tranche B of the senior unsecured convertible
\n
bonds issued on July 3, 2017
804
\n
Gains (losses) recognized in the consolidated income statement
(393
)
\n
Asset (liability) value as of December 31, 2021
(511
)
\n
The change in fair value amounting to $265 million on the embedded bondholders\u2019 conversion option was reported
\n
as \u201cFinance costs\u201d in the consolidated income statement ended December 31, 2021. The change in fair value
\n
amounting to $127 million on the embedded issuer\u2019s call option was reported as \u201cFinance income\u201d in the
\n
consolidated income statement ended December 31, 2021.
\n
7.6.15. Other non-current assets
\n
Other non-current assets consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Receivables from government agencies
156
124
\n
French research tax credit receivable
294
376
\n
Prepayments and deposits to third parties
107
21
\n
Other non-current assets
56
75
\n
Total
613
596
\n
The Group holds long-term receivables with the objective to collect the contractual cash flows and therefore, these
\n
receivables are measured subsequently at amortized cost using the effective interest method.
\n
Prepayments and deposits to third parties include receivables related to long-term supply agreements involving
\n
purchase of raw materials, capacity commitments, cloud-hosting arrangements, and other services.
\n
In 2022 and 2021, the Group entered into factoring transactions to accelerate the realization in cash of certain long-
\n
term receivables. The Group sold without recourse $110 million and $118 million of these receivables in the years
\n
ended December 31, 2022 and 2021 respectively, with a financial cost of less than $1 million for both years.
\n
The major portion of other long-term receivables to which the expected credit loss model applies is long-term State
\n
receivables. Due to the existing history of zero-default on receivables originated by governments, the expected credit
\n
loss is assumed to be negligible as of December 31, 2022, and 2021. Other non-current assets presented in the table
\n
above on the line \"Other non-current assets\" are composed of individually not significant amounts not deemed to
\n
have exposure of default.
Consequently, no significant expected credit loss allowance was reported on other non-
\n
current assets at reporting date.
\n
The carrying amounts of the Group\u2019s non-current assets are denominated in the following currencies:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
U.S. dollars
114
41
\n
Euro
487
545
\n
Japanese Yen
2
2
\n
Other currencies
10
8
\n
Total
613
596
7.6.17. Trade accounts receivable
\n
Trade accounts receivable consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Trade accounts receivable
1,991
1,778
\n
Loss allowance
(21
)
(19
)
\n
Total
1,970
1,759
\n
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of
\n
business. Trade receivables are non-interest bearing with credit terms from 30 up to 90 day terms. They are all
\n
classified as current. The Group holds the trade receivables with the objective to collect the contractual cash flows
\n
and, therefore, trade receivables are measured subsequently at amortized cost. The Group does not expect to have
\n
any significant contracts where the period between the transfer of the promised goods or services to the customer
\n
and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction
\n
prices for the time value of money and no significant transaction with customers includes significant financing
\n
component. Due to the short-term nature of trade receivables, their carrying amount is considered to be the same
\n
as their fair value.
\n
As described in Note 7.6.35, the Group monitors the creditworthiness of its customers to which it grants credit terms
\n
in the normal course of business. If certain customers are independently rated, these ratings are used. Otherwise, if
\n
there is no independent rating, risk control assesses the credit quality of the customer, considering its financial
\n
position, past experience and other factors. Individual risk limits are set based on internal and external ratings in
\n
accordance with limits set by management. The utilization of credit limits is regularly monitored. Sales to customers
\n
are primarily settled in cash.
\n
The Group uses a lifetime expected loss allowance for all trade receivables based on failure rates, as applied to the
\n
gross amounts of trade accounts receivable. The model includes reasonable assumptions about future credit trends.
\n
The historical loss rates are adjusted to reflect current and forward-looking information on macro-economic factors
\n
affecting the ability of the Group\u2019s customers to settle the receivables. In addition to the factors already embedded
\n
in the failure rates, as applied on trade accounts receivable, the Group has identified cyclicality and uncertainties
\n
around continued growth for the semiconductor industry and its serviceable available market to be the most
\n
relevant factors. These macro-economic factors are weighted into different economic scenarios, in line with
\n
estimates and methodologies applied by other business entities, including financial institutions. These scenarios
range from upside scenario (above-trend economic growth) to severe downside (recession). On that basis, the loss
\n
allowance as of December 31, 2022 and December 31, 2021 was determined as follows:
\n
Past due
\n
In millions of U.S. dollars
Total
\n
No
\n
past-due
\n
Less than
\n
a month
\n
Between
\n
1 and 6
\n
months
\n
Over 6
\n
months
\n
December 31, 2022
\n
Expected loss rate
1
%
1
%
10
%
100
%
\n
Trade receivables
\u2013
Gross carrying amount
1,991
1,904
69
17
1
\n
Loss allowance
(21
)
(18
)
\u2014
(2
)
(1
)
\n
Trade receivables
\u2013
Net carrying amount
1,970
1,886
69
15
\u2014
\n
December 31, 2021
\n
Expected loss rate
1
%
1
%
10
%
100
%
\n
Trade receivables
\u2013
Gross carrying amount
1,778
1,736
39
\u2014
3
\n
Loss allowance
(19
)
(16
)
\u2014
\u2014
(3
)
\n
Trade receivables
\u2013
Net carrying amount
1,759
1,720
39
\u2014
\u2014
\n
The loss allowance for trade accounts receivable as of December 31, 2022 and December 31, 2021 reconcile to the
\n
opening loss allowance as follows:
\n
In millions of U.S. dollars
\n
As of December 31, 2020
16
\n
Additions
4
\n
Reversals
(1
)
\n
As of December 31, 2021
19
\n
Additions
5
\n
Reversals
(3
)
\n
As of December 31, 2022
21
\n
Trade accounts receivable are denominated in the following currencies:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
U.S. dollars
1,822
1,635
\n
Euro
35
37
\n
Japanese Yen
134
106
\n
Total
1,991
1,778
\n
The maximum exposure to credit risk was the fair value of trade accounts receivable, net of expected credit losses
\n
as of December 31, 2022 and December 31, 2021.
7.6.19. Cash and cash equivalents
\n
Cash and cash equivalents consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Cash at bank and on hand
262
342
\n
Deposits at call with banks
2,996
2,883
\n
Total
3,258
3,225
7.6.29. Finance income / costs
\n
Total finance income consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Change in fair value of the call option of Tranche A convertible bonds
\n
issued on August 4, 2020
2
\u2014
\n
Change in fair value of the call option of Tranche B convertible bonds
\n
issued on August 4, 2020
5
\u2014
\n
Change in fair value of the conversion option of Tranche A convertible
\n
bonds issued on August 4, 2020
145
\u2014
\n
Change in fair value of the conversion option of Tranche B convertible
\n
bonds issued on August 4, 2020
131
\u2014
\n
Interest income on quoted debt securities
1
1
\n
Other finance income
70
12
\n
Total finance income
354
13
\n
Total finance costs consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Interest on Senior Bonds
25
38
\n
2017 issued senior convertible bond net-share settlement (Tranche B)
\u2014
189
\n
Change in fair value of the conversion option of Tranche A convertible bonds
\n
issued on August 4, 2020
\u2014
98
\n
Change in fair value of the conversion option of Tranche B convertible bonds
\n
issued on August 4, 2020
\u2014
99
\n
Change in fair value of the call option of Tranche A convertible bonds issued
\n
on August 4, 2020
\u2014
2
\n
Change in fair value of the call option of Tranche B convertible bonds issued
\n
on August 4, 2020
\u2014
4
\n
Interests on lease liabilities
5
5
\n
Interests on long-term loans and borrowings
8
1
\n
Bank charges and commissions
4
3
\n
Other finance expense
\u2014
2
\n
Total finance costs
42
441
\n
No borrowing costs were capitalized in 2022 and 2021.
\n
As described in Note 7.6.14.3, the change in fair value of the non-equity derivative instruments corresponding to the
\n
bondholders\u2019 conversion option and the issuer\u2019s call option embedded in the unsecured senior convertible bonds
\n
issued on August 4, 2020, generated an income of $276 million and $7 million respectively, for the year ended
\n
December 31, 2022 compared to a cost of $197 million and gain of $6 million respectively, for the year ended
\n
December 31, 2021. Additionally, the net-share settlement of the Tranche B of the unsecured senior convertible
\n
bonds issued on July 3, 2017 generated a cost of $189 million for the year ended December 31, 2021.
\n
Other finance income is related to cash and cash equivalents and short-term deposits.
\n
Leases are further described in Note 7.6.11.
7.6.35. Financial risk management objectives and policies
\n
The Group is exposed to changes in financial market conditions in the normal course of business due to its operations
\n
in different foreign currencies and its on-going investing and financing activities. The Group\u2019s activities expose it to
\n
a variety of financial risks: market risk (including foreign exchange risk, fair value interest rate risk, cash flow interest
\n
rate risk and price risk), credit risk and liquidity risk. The Group\u2019s overall risk management program focuses on the
\n
unpredictability of financial markets and seeks to minimize potential adverse effects on the Group\u2019s financial
\n
performance. The Group uses derivative financial instruments to hedge certain risk exposures.
\n
Financial risk management is carried out by a central treasury department (Corporate Treasury). Additionally, a
\n
treasury committee, chaired by the Chief Financial Officer, steers treasury activities and ensures compliance with
\n
corporate policies. Treasury activities are thus regulated by the Group\u2019s policies, which define procedures, objectives
\n
and controls. The policies focus on the management of financial risk in terms of exposure to market risk, credit risk
\n
and liquidity risk. Treasury controls are subject to internal audits. Most treasury activities are centralized, with any
\n
local treasury activities subject to oversight from Corporate Treasury. Corporate Treasury identifies, evaluates and
\n
hedges financial risks in close cooperation with the Group\u2019s operating units. It provides written principles for overall
\n
risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk,
\n
price risk, credit risk, use of derivative financial instruments, and investments of excess liquidity. The majority of
\n
cash and cash equivalents is held in U.S. dollars and Euros and is placed with financial institutions rated at least a
\n
single \u201cA\u201d long-term rating from two of the major rating agencies, meaning at least A3 from Moody\u2019s Investors
\n
Service (\u201cMoody\u2019s\u201d) and A- from Standard & Poor\u2019s (\u201cS&P\u201d) or Fitch (\u201cFitch\u201d) Ratings, or better. These ratings are
\n
closely and continuously monitored in order to manage exposure to the counterparty\u2019s risk. Hedging transactions
\n
are performed only to hedge exposures deriving from operating, investing and financing activities conducted in the
\n
normal course of business.
Market risk
\n
Foreign exchange risk
\n
The Group conducts its business on a global basis in various major international currencies. As a result, the Group is
\n
exposed to adverse movements in foreign currency exchange rates, primarily with respect to the Euro. Foreign
\n
exchange risk mainly arises from future commercial transactions and recognized assets and liabilities at the
\n
Company\u2019s subsidiaries.
\n
Management has set up a policy to require subsidiaries to hedge their entire foreign exchange risk exposure with
\n
the Group through financial instruments transacted or overseen by Corporate Treasury. To manage their foreign
\n
exchange risk arising from foreign-currency-denominated assets and liabilities, subsidiaries use forward contracts
\n
and purchased currency options. Foreign exchange risk arises when recognized assets and liabilities are denominated
\n
in a currency that is not the entity\u2019s functional currency. These instruments do not qualify as hedging instruments
\n
for accounting purposes. Forward contracts and currency options, including collars, are also used by the Group to
\n
reduce its exposure to U.S. dollar fluctuations in Euro-denominated forecasted intercompany transactions that cover
\n
a large part of its R&D, selling general and administrative expenses as well as a portion of its front-end manufacturing
\n
production costs of semi-finished goods. The Group also hedges using currency forward contracts certain Singapore
\n
dollar-denominated manufacturing forecasted transactions. The derivative instruments used to hedge the
\n
forecasted transactions relating to front-end manufacturing production costs meet the criteria for designation as
\n
cash flow hedge. The hedged forecasted transactions have a high probability of occurring for hedge accounting
\n
purposes.
\n
It is the Group\u2019s policy to keep the foreign exchange exposures in all the currencies hedged month by month against
\n
the monthly standard rate. At each month end, the forecasted flows for the coming month are hedged together with
\n
the fixing of the new standard rate. For this reason, the hedging transactions will have an exchange rate very close
\n
to the standard rate at which the forecasted flows will be recorded on the following month. As such, the foreign
\n
exchange exposure of the Group, which consists in the balance sheet positions and other contractually agreed
\n
transactions, is always close to zero and any movement in the foreign exchange rates will not therefore influence
\n
the exchange effect on items of the consolidated income statement. Any discrepancy from the forecasted values
\n
and the actual results is constantly monitored and prompt actions are taken, if needed.
\n
The hedging activity of the Group and the impact on the financial statements is described in detail in Note 7.6.14.4.
\n
The following sensitivity analysis was based on recognized assets and liabilities, including non-monetary items, of
\n
the Company and its subsidiaries. Equity would have been approximately $81 million higher/lower (2021: $54 million
\n
higher/lower) if the Euro strengthened/weakened by 300 basis points against the U.S. dollar, arising mainly from
\n
translation of net assets from subsidiaries whose functional currency is the Euro.
\n
As of December 31, 2022 if the Euro/U.S. dollar exchange rate had strengthened by 300 basis points with all other
\n
variables held constant, net result for the year would have been $73 million higher (2021: $45 million higher), mainly
\n
as a result of foreign exchange gains on outstanding derivative instruments. If the Euro/U.S. dollar exchange rate
\n
had weakened by 300 basis points with all other variables held constant, impact in net income would have been $72
\n
million lower (2021: $50 million lower), mainly due to foreign exchange losses on outstanding derivative
\n
instruments.
\n
Cash flow and fair value interest rate risk
\n
The Group\u2019s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the
\n
Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate
\n
risk.
\n
The Group analyzes its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into
\n
consideration refinancing, renewal of existing positions, alternative financing and hedging. The Group invests
\n
primarily on a short-term basis and as such its liquidity is invested in floating interest rate instruments. As a
\n
consequence, the Group is exposed to interest rate risk due to potential mismatch between the return on its short-
\n
term floating interest rate investments and the portion of its long-term debt issued at fixed rate.
As of December 31, 2022 and 2021, if interest rates had been 20 basis points higher/lower with all other variables
\n
held constant, net income for the year would have been $2 million and $1 million higher/lower respectively, mainly
\n
as a result of a high level of liquid assets in relation to debt, with no material impact on equity.
\n
During 2022 and 2021, the Group\u2019s borrowings at variable rate were denominated in Euros and in U.S. dollars.
\n
Price risk
\n
As part of its on-going investing activities, the Group may be exposed to quoted security price risk for investments
\n
measured at fair value, as described in Note 7.6.14.1. The Group did not hold as of December 31, 2022 and 2021 any
\n
significant investments in quoted equity securities.
\n
The measurement for accounting purposes of the embedded derivative instruments of the senior unsecured
\n
convertible bonds issued on August 4, 2020 is dependent on various factors including the performance of
\n
STMicroelectronics ordinary shares. With respect to the valuation of the embedded issuer\u2019s call options as of
\n
December 31, 2022, if the price of the Company\u2019s ordinary shares, as measured on the New York Stock Exchange,
\n
with other valuation inputs remaining equal, increases by 10%, the value of the embedded call options would
\n
increase by $6 million (2021: increase of $2 million), whereas for a decrease of 10% in the share price, the value of
\n
the embedded call options would decrease by $6 million (2021: decrease of $4 million). With respect to the valuation
\n
of the embedded bondholders\u2019 conversion options as of December 31, 2022, if the price of the Company\u2019s ordinary
\n
shares, as measured on the New York stock exchange, with other valuation inputs remaining equal, increases by
\n
10%, the value of the embedded conversion options would increase by $71 million (2021: increase of $126 million),
\n
whereas for a decrease of 10% in the share price, the value of the embedded conversion options would decrease by
\n
$65 million (2021: decrease of $108 million). Details of the sensitivity of the other valuation factors, more specifically
\n
implied volatility, are presented in Note 7.6.14.5.
\n
Credit risk
\n
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer
\n
contract leading to a financial loss. Credit risk typically arises from cash and cash equivalents, contractual cash flows
\n
of debt investments carried at amortized cost, measured at FVOCI and at FVPL, the counterparty of derivative
\n
financial instruments and deposits with banks and financial institutions, as well as credit exposure to customers,
\n
including outstanding receivables.
\n
The Group is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing
\n
activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial
\n
instruments.
\n
Credit risk is managed on the Group basis. The Group selects banks and/or financial institutions that operate with
\n
the Group based on the criteria of long-term rating from at least two major Rating Agencies and keeping a maximum
\n
outstanding amount per instrument with each bank not to exceed 20% of the total. For derivative financial
\n
instruments, management has established limits so that, at any time, the fair value of contracts outstanding is not
\n
concentrated with any individual counterparty.
\n
The Group monitors the creditworthiness of its customers to which it grants credit terms in the normal course of
\n
business. If certain customers are independently rated, these ratings are used. Otherwise, if there is no independent
\n
rating, risk control assesses the credit quality of the customer, considering its financial position, past experience, and
\n
other factors. Individual risk limits are set based on internal and external ratings in accordance with limits set by
\n
management. The utilization of credit limits is regularly monitored. Sales to customers are primarily settled in cash,
\n
which mitigates credit risk. There is no major concentration of credit risk, whether through exposure to individual
\n
customers, specific industry sectors, or regions. As of December 31, 2022 and 2021, no customer represented more
\n
than 10% of total trade accounts receivable. Any remaining concentrations of credit risk with respect to trade
\n
receivables are limited due to the large number of customers and their dispersion across many geographic areas.
The Group\u2019s investments in debt instruments primarily include U.S. Treasury Bonds and long-term receivables
\n
towards government bodies. As such, they are investments with unmaterial credit loss. Any remaining receivable is
\n
of low credit risk and are individually not significant. The credit ratings of the investments are monitored for credit
\n
deterioration.
\n
The Group has three types of financial assets that are subject to the expected credit loss model:
\n
\u2022
Trade receivables for sales of goods and services, as described in Note 7.6.17;
\n
\u2022
Debt securities measured at FVOCI, as described in Note 7.6.14.1; and
\n
\u2022
Debt investments, primarily long-term receivables, carried at amortized cost, as described in Note 7.6.15
\n
and Note 7.6.18.
\n
The impairment methodology by category of financial assets is further described in each respective note. While cash
\n
and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified impairment loss is
\n
deemed to be immaterial. The maximum exposure for all financial assets is their carrying amount.
\n
Liquidity risk
\n
Prudent liquidity risk management includes maintaining enough cash and cash equivalents, short-term deposits and
\n
marketable securities, the availability of funding from committed credit facilities and the ability to close out market
\n
positions. The Group\u2019s objective is to maintain a significant cash position and a low debt-to-equity ratio, which
\n
ensure adequate financial flexibility. Liquidity management policy is to finance the Group\u2019s investments with net
\n
cash provided from operating activities.
\n
Management monitors rolling forecasts of the Group\u2019s liquidity reserve based on expected cash flows.
\n
A maturity analysis of interest-bearing loans and borrowings is shown in Note 7.6.14.3.
\n
Capital risk management
\n
The Group\u2019s objectives when managing capital are to safeguard the Group\u2019s ability to continue as a going concern in
\n
order to create value for shareholders and benefits and returns for other stakeholders, as to maintain an optimal
\n
capital structure. In order to maintain or adjust the capital structure, the Group may review the amount of dividends
\n
paid to shareholders, return capital to shareholders, or issue new shares.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12639": {
"value": "
7.6.14. Other financial assets and financial liabilities
\n
7.6.14.1.
Other financial assets
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Other financial assets (including derivatives)
\n
Other financial assets
\n
Quoted debt securities at FVOCI
\n
(1)
\n
679
\u2014
\n
Unquoted equity securities at FVOCI
\n
(1)
\n
10
10
\n
Quoted equity securities at FVPL
\n
(2)
\n
12
13
\n
Other trading financial assets at FVPL
\n
(2)
\n
14
16
\n
Total other financial assets
715
39
\n
Current
679
\u2014
\n
Non-current
36
39
\n
Derivative financial instruments
\n
Cash flow hedges
\n
Foreign exchange forward contracts
30
2
\n
Currency collars
8
1
\n
Derivatives not designated as hedges
\n
Foreign exchange forward contracts
25
3
\n
Currency collars
6
\u2014
\n
Embedded call option - Senior unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche A)
13
11
\n
Embedded call option - Senior unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche B)
20
15
\n
Total derivatives financial instruments
102
32
\n
Current
69
6
\n
Non-current
33
26
\n
Total other financial assets (including derivatives)
817
71
\n
Total current
748
6
\n
Total non-current
69
65
\n
(1)
FVOCI: Fair Value through Other Comprehensive Income
\n
(2)
FVPL: Fair Value through P&L
Risk management policies relating to credit risk exposure to derivatives counterparties are further described in Note
\n
7.6.35.
\n
Movements in other financial assets (excluding derivatives) recorded in 2022 are summarized as follows:
\n
In millions of U.S. dollars
Jan
1,
2022
\n
Change in
\n
fair value
\n
included in
\n
OCI*
\n
Change in
\n
fair value
\n
included in
\n
income
\n
statement
Purchase
\n
Proceeds at
\n
maturity
Accretion
\n
Realized
\n
gain
Dec
31,
2022
\n
Government bonds issued by
\n
the U.S. Treasury
\u2014
(16
)
\u2014
687
\u2014
8
\u2014
679
\n
Quoted equity
\n
instruments at FVPL
13
\u2014
(1
)
\u2014
\u2014
\u2014
\u2014
12
\n
Sub-total Quoted debt
\n
and equity securities
13
(16
)
(1
)
687
\u2014
8
\u2014
691
\n
Unquoted equity
\n
securities at FVOCI
10
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
10
\n
Other trading financial
\n
assets at FVPL
16
\u2014
(2
)
\u2014
\u2014
\u2014
\u2014
14
\n
Total other financial
\n
assets (excluding
\n
derivatives)
39
(16
)
(3
)
687
\u2014
8
\u2014
715
\n
*OCI: Other comprehensive income
\n
Movements in other financial assets (excluding derivatives) recorded in 2021 are summarized as follows:
\n
In millions of U.S. dollars
Jan
1,
2021
\n
Change in
\n
fair value
\n
included in
\n
OCI*
\n
Change in
\n
fair value
\n
included in
\n
income
\n
statement
Purchase
\n
Proceeds at
\n
maturity
\n
Foreign
\n
exchange
\n
result
\n
recognized in
\n
OCI*
\n
Realized
\n
gain
Dec
31,
2021
\n
Debt securities issued by
\n
the U.S. Treasury
133
(1
)
\u2014
\u2014
(132
)
\u2014
\u2014
\u2014
\n
Quoted equity
\n
instruments at FVPL
13
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
13
\n
Sub-total Quoted debt
\n
and equity securities
146
(1
)
\u2014
\u2014
(132
)
\u2014
\u2014
13
\n
Unquoted equity
\n
securities at FVOCI
10
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
10
\n
Other trading financial
\n
assets at FVPL
12
\u2014
4
\u2014
\u2014
\u2014
\u2014
16
\n
Total other financial
\n
assets (excluding
\n
derivatives)
168
(1
)
4
\u2014
(132
)
\u2014
\u2014
39
\n
*OCI: Other comprehensive income
\n
Investments held in debt securities
\n
As of December 31, 2022, the Group held $679 million of U.S. Treasury debt securities. The debt securities have an
\n
average rating of Aaa/AA+/AAA from Moody\u2019s, S&P and Fitch, respectively and an average maturity of 3.5 years. The
\n
debt securities were reported as current assets on the line \u201cOther current financial assets\u201d on the consolidated
\n
statement of financial position as of December 31, 2022, since they represented investments of funds available for
\n
current operations.
\n
Marketable securities totaling $750 million at principal amount were transferred to financial institutions as part of
\n
short-term securities lending transactions, in compliance with corporate policies. The Group, acting as the securities
\n
lender, does not hold any collateral in this unsecured securities lending transaction. The Group retains effective
\n
control on the transferred securities.
The Group applies a forward-looking expected credit loss (ECL) approach on all debt financial assets not held at FVPL.
\n
For debt securities at FVOCI, the ECL is based on a 12-month expected credit loss basis. The 12-month ECL is the
\n
portion of lifetime ECLs that results from default events on a financial instrument that are possible within 12 months
\n
after the reporting date. Since the Group\u2019s quoted debt instruments at FVOCI comprise solely U.S. Treasury debt
\n
securities, the Group has considered that the ECLs on these investments are insignificant.
\n
Investments held in equity securities
\n
As of December 31, 2022, the Group also had investments in quoted equity securities for an aggregate value of
\n
$12 million, measured at FVPL (December 31, 2021: $13 million).
\n
As of December 31, 2022, the Group also reported other trading financial assets for an aggregate value of $14 million
\n
(December 31, 2021: $16 million).
\n
The Group irrevocably elected to measure at FVOCI unquoted equity securities for an aggregate value of $10 million
\n
(December 31, 2021: $10 million). Since these are strategic investments, the Group considers this classification,
\n
which implies that changes in fair value are not subsequently recycled to earnings, to be more relevant.
\n
The changes in fair value reported on the Group\u2019s investments held in equity securities for the years ended
\n
December 31, 2022 and December 31, 2021 were immaterial.
\n
Short-term deposits
\n
To optimize the return yield on its short-term investments, the Group invested $581 million of available cash in
\n
short-term deposits as of December 31, 2022, compared to $291 million as of December 31, 2021. These short-term
\n
deposits had a maturity beyond three months and no significant risk of changes in fair value. They are reported in
\n
the line \u201cShort-term deposits\u201d of the consolidated statement of financial position.
7.6.15. Other non-current assets
\n
Other non-current assets consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Receivables from government agencies
156
124
\n
French research tax credit receivable
294
376
\n
Prepayments and deposits to third parties
107
21
\n
Other non-current assets
56
75
\n
Total
613
596
\n
The Group holds long-term receivables with the objective to collect the contractual cash flows and therefore, these
\n
receivables are measured subsequently at amortized cost using the effective interest method.
\n
Prepayments and deposits to third parties include receivables related to long-term supply agreements involving
\n
purchase of raw materials, capacity commitments, cloud-hosting arrangements, and other services.
\n
In 2022 and 2021, the Group entered into factoring transactions to accelerate the realization in cash of certain long-
\n
term receivables. The Group sold without recourse $110 million and $118 million of these receivables in the years
\n
ended December 31, 2022 and 2021 respectively, with a financial cost of less than $1 million for both years.
\n
The major portion of other long-term receivables to which the expected credit loss model applies is long-term State
\n
receivables. Due to the existing history of zero-default on receivables originated by governments, the expected credit
\n
loss is assumed to be negligible as of December 31, 2022, and 2021. Other non-current assets presented in the table
\n
above on the line \"Other non-current assets\" are composed of individually not significant amounts not deemed to
\n
have exposure of default.
Consequently, no significant expected credit loss allowance was reported on other non-
\n
current assets at reporting date.
\n
The carrying amounts of the Group\u2019s non-current assets are denominated in the following currencies:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
U.S. dollars
114
41
\n
Euro
487
545
\n
Japanese Yen
2
2
\n
Other currencies
10
8
\n
Total
613
596
7.6.18. Other receivables and assets
\n
Other receivables and assets consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Public funding receivables
190
296
\n
Advances and prepayments
125
118
\n
Taxes and other government receivables
270
119
\n
Other current assets
93
42
\n
Total
678
575
\n
Public funding receivables relate to R&D contracts, research tax credits, industrialization contracts and capital
\n
investment projects.
\n
The Group applies a forward-looking expected credit losses model on all financial assets measured at amortized cost,
\n
excluding trade accounts receivable. The major portion of other receivables and assets to which this expected credit
\n
loss model applies corresponds to governmental receivables. Due to the short maturity of these receivables and the
\n
existing history of zero-default on receivables originated by governments, the expected credit loss is assumed to be
\n
negligible. Other receivables, excluding receivables from government agencies, are composed of individually
\n
insignificant amounts at exposure of default. Consequently, no significant loss allowance was reported on other
\n
receivables and assets as of December 31, 2022 and December 31, 2021.
\n
Taxes and other government receivables include receivables related to value-added tax, primarily in European tax
\n
jurisdictions.
\n
The carrying amounts of the Group\u2019s other receivables and assets are denominated in the following currencies:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
U.S. dollars
245
104
\n
Euro
401
435
\n
Other currencies
32
36
\n
Total
678
575
\n
The maximum exposure to credit risk was the fair value of other receivables and assets, net of expected credit losses,
\n
as of December 31, 2022 and December 31, 2021.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12641": {
"value": "
7.6.14.1.
Other financial assets
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Other financial assets (including derivatives)
\n
Other financial assets
\n
Quoted debt securities at FVOCI
\n
(1)
\n
679
\u2014
\n
Unquoted equity securities at FVOCI
\n
(1)
\n
10
10
\n
Quoted equity securities at FVPL
\n
(2)
\n
12
13
\n
Other trading financial assets at FVPL
\n
(2)
\n
14
16
\n
Total other financial assets
715
39
\n
Current
679
\u2014
\n
Non-current
36
39
\n
Derivative financial instruments
\n
Cash flow hedges
\n
Foreign exchange forward contracts
30
2
\n
Currency collars
8
1
\n
Derivatives not designated as hedges
\n
Foreign exchange forward contracts
25
3
\n
Currency collars
6
\u2014
\n
Embedded call option - Senior unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche A)
13
11
\n
Embedded call option - Senior unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche B)
20
15
\n
Total derivatives financial instruments
102
32
\n
Current
69
6
\n
Non-current
33
26
\n
Total other financial assets (including derivatives)
817
71
\n
Total current
748
6
\n
Total non-current
69
65
\n
(1)
FVOCI: Fair Value through Other Comprehensive Income
\n
(2)
FVPL: Fair Value through P&L
Risk management policies relating to credit risk exposure to derivatives counterparties are further described in Note
\n
7.6.35.
\n
Movements in other financial assets (excluding derivatives) recorded in 2022 are summarized as follows:
\n
In millions of U.S. dollars
Jan
1,
2022
\n
Change in
\n
fair value
\n
included in
\n
OCI*
\n
Change in
\n
fair value
\n
included in
\n
income
\n
statement
Purchase
\n
Proceeds at
\n
maturity
Accretion
\n
Realized
\n
gain
Dec
31,
2022
\n
Government bonds issued by
\n
the U.S. Treasury
\u2014
(16
)
\u2014
687
\u2014
8
\u2014
679
\n
Quoted equity
\n
instruments at FVPL
13
\u2014
(1
)
\u2014
\u2014
\u2014
\u2014
12
\n
Sub-total Quoted debt
\n
and equity securities
13
(16
)
(1
)
687
\u2014
8
\u2014
691
\n
Unquoted equity
\n
securities at FVOCI
10
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
10
\n
Other trading financial
\n
assets at FVPL
16
\u2014
(2
)
\u2014
\u2014
\u2014
\u2014
14
\n
Total other financial
\n
assets (excluding
\n
derivatives)
39
(16
)
(3
)
687
\u2014
8
\u2014
715
\n
*OCI: Other comprehensive income
\n
Movements in other financial assets (excluding derivatives) recorded in 2021 are summarized as follows:
\n
In millions of U.S. dollars
Jan
1,
2021
\n
Change in
\n
fair value
\n
included in
\n
OCI*
\n
Change in
\n
fair value
\n
included in
\n
income
\n
statement
Purchase
\n
Proceeds at
\n
maturity
\n
Foreign
\n
exchange
\n
result
\n
recognized in
\n
OCI*
\n
Realized
\n
gain
Dec
31,
2021
\n
Debt securities issued by
\n
the U.S. Treasury
133
(1
)
\u2014
\u2014
(132
)
\u2014
\u2014
\u2014
\n
Quoted equity
\n
instruments at FVPL
13
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
13
\n
Sub-total Quoted debt
\n
and equity securities
146
(1
)
\u2014
\u2014
(132
)
\u2014
\u2014
13
\n
Unquoted equity
\n
securities at FVOCI
10
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
10
\n
Other trading financial
\n
assets at FVPL
12
\u2014
4
\u2014
\u2014
\u2014
\u2014
16
\n
Total other financial
\n
assets (excluding
\n
derivatives)
168
(1
)
4
\u2014
(132
)
\u2014
\u2014
39
\n
*OCI: Other comprehensive income
\n
Investments held in debt securities
\n
As of December 31, 2022, the Group held $679 million of U.S. Treasury debt securities. The debt securities have an
\n
average rating of Aaa/AA+/AAA from Moody\u2019s, S&P and Fitch, respectively and an average maturity of 3.5 years. The
\n
debt securities were reported as current assets on the line \u201cOther current financial assets\u201d on the consolidated
\n
statement of financial position as of December 31, 2022, since they represented investments of funds available for
\n
current operations.
\n
Marketable securities totaling $750 million at principal amount were transferred to financial institutions as part of
\n
short-term securities lending transactions, in compliance with corporate policies. The Group, acting as the securities
\n
lender, does not hold any collateral in this unsecured securities lending transaction. The Group retains effective
\n
control on the transferred securities.
The Group applies a forward-looking expected credit loss (ECL) approach on all debt financial assets not held at FVPL.
\n
For debt securities at FVOCI, the ECL is based on a 12-month expected credit loss basis. The 12-month ECL is the
\n
portion of lifetime ECLs that results from default events on a financial instrument that are possible within 12 months
\n
after the reporting date. Since the Group\u2019s quoted debt instruments at FVOCI comprise solely U.S. Treasury debt
\n
securities, the Group has considered that the ECLs on these investments are insignificant.
7.6.14.2.
Other financial liabilities
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Lease financial liabilities
250
203
\n
Deferred and contingent consideration on business acquisitions
31
97
\n
Derivative financial instruments
\n
Cash flow hedges
\n
Foreign exchange forward contracts
17
18
\n
Currency collars
6
7
\n
Derivatives not designated as hedges
\n
Foreign exchange forward contracts
12
12
\n
Currency collars
4
6
\n
Embedded conversion option - Senior unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche A)
110
255
\n
Embedded conversion option - Senior unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche B)
151
282
\n
Total other financial liabilities (including derivatives)
581
880
\n
Total current
204
125
\n
Total non-current
377
755
\n
Risk management policies relating to credit risk exposure to derivatives counterparties are further described in Note
\n
7.6.35. Lease financial liabilities are further described in Note 7.6.11.
Senior convertible bonds
\n
On August 4, 2020, the Company issued $1,500 million in principal amount of dual tranche senior unsecured
\n
convertible bonds (Tranche A for $750 million and Tranche B for $750 million), due 2025 and 2027, respectively.
\n
Tranche A bonds were issued at 105.8% as zero-coupon bonds while Tranche B bonds were issued at 104.5% as zero-
\n
coupon bonds. The conversion price at issuance was $43.62 for Tranche A, equivalent to a 47.5% conversion
\n
premium and $45.10 for Tranche B, equivalent to a 52.5% conversion premium. These conversion features
\n
correspond to an equivalent of 4,585 shares per each Tranche A bond $200,000 par value and an equivalent of 4,435
\n
shares per each Tranche B bond $200,000 par value. The bonds are convertible by the bondholders or are callable
\n
by the issuer upon certain conditions, on a net-share settlement basis, except if the issuer elects a full-cash or full-
\n
share conversion as an alternative settlement. The net proceeds from the bond offering were $1,567 million, after
\n
deducting issuance costs payable by the Group.
\n
The issuer\u2019s call option and the holder\u2019s conversion option have been identified as embedded non-equity derivative
\n
instruments, resulting in the recognition of the options separately from the debt host contract. Upon initial
\n
recognition, the derivatives were measured at fair value based on the income approach, the debt being determined
\n
as a residual amount of the $1.5 billion total proceeds. The value of the issuer\u2019s call option was deemed to be nil at
\n
initial recognition. The value of the holder\u2019s conversion option was estimated at $219 million at issuance date, which
\n
determined the initial recognition of the liability component at $1,358 million before allocation of issuance costs.
\n
The fair value measurement of the embedded derivative instruments corresponded to a Level 3 fair value hierarchy
\n
measurement, which is further described in Note 7.6.14.5. The Group elected to allocate issuance costs, totaling
\n
$10 million, to the debt component. The debt was subsequently measured at amortized cost using the effective
\n
interest method.
\n
Starting August 2023 and August 2024 for Tranche A and Tranche B convertible bonds, respectively, the bondholders
\n
will have full conversion rights. Consequently, Tranche A non-equity embedded derivative instruments and Tranche
\n
A liability component were reported on the line Other current financial assets for an amount of $13 million, on the
\n
line Other current financial liabilities for an amount of $110 million and on the line Interest-bearing loans and
\n
borrowings \u2013 current portion for an amount of $717 million, respectively, of the consolidated statement of financial
\n
position as of December 31, 2022.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12642": {
"value": "
7.6.14.1.
Other financial assets
The Group applies a forward-looking expected credit loss (ECL) approach on all debt financial assets not held at FVPL.
\n
For debt securities at FVOCI, the ECL is based on a 12-month expected credit loss basis. The 12-month ECL is the
\n
portion of lifetime ECLs that results from default events on a financial instrument that are possible within 12 months
\n
after the reporting date. Since the Group\u2019s quoted debt instruments at FVOCI comprise solely U.S. Treasury debt
\n
securities, the Group has considered that the ECLs on these investments are insignificant.
7.6.14.3.
Interest-bearing loans and borrowings
Aggregate contractual maturities of interest-bearing loans and borrowings outstanding, excluding repayments of
\n
coupons and interests, are as follows:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
2022
\u2014
143
\n
2023
168
143
\n
2024
168
143
\n
2025
918
893
\n
2026
167
142
\n
2027
903
877
\n
Thereafter
341
311
\n
Total
2,665
2,652
\n
The difference between the total aggregated future maturities in the preceding table and the total carrying amount
\n
of long-term debt is due to unamortized debt discount and issuance costs on the dual tranche senior unsecured
\n
convertible bonds.
Reconciliation of liabilities arising from financing activities
\n
The reconciliation for the year ended December 31, 2022 is as follows:
\n
In millions of U.S. dollars
\n
Interest-
\n
bearing
\n
loans and
\n
borrowings
\n
Other
\n
non-
\n
current
\n
financial
\n
liabilities*
\n
Interest-
\n
bearing
\n
loans and
\n
borrowings
\n
\u2013
current
\n
portion
\n
Other
\n
current
\n
financial
\n
liabilities**
Total
\n
December 31, 2021
2,391
685
143
55
3,274
\n
Cash flows
200
\u2014
(134
)
(58
)
8
\n
Non-cash changes:
\n
New leases
\u2014
112
\u2014
3
115
\n
Accreted finance costs
25
\u2014
\u2014
\u2014
25
\n
Fair value changes
\u2014
(276
)
\u2014
\u2014
(276
)
\n
Reclassification
(885
)
(169
)
885
169
\u2014
\n
Foreign currency translation
(44
)
(10
)
(9
)
\u2014
(63
)
\n
December 31, 2022
1,687
342
885
169
3,083
\n
* \u201dOther non-current financial liabilities\u201d reported above do not include deferred and contingent consideration, as they relate to business
\n
acquisitions.
** \u201dOther current financial liabilities\u201d reported above correspond to the current portion of the lease liability for an amount of $59 million and
\n
Tranche A on bondholder\u2019s conversion option for an amount $110 million. Derivatives are not reported in the above table as they relate to
\n
operating activities. Lease financial liabilities are further described in Note 7.6.11 and convertible bonds are further described in Note 7.6.14.3.
\n
The reconciliation for the year ended December 31, 2021 is as follows:
\n
In millions of U.S. dollars
\n
Interest-
\n
bearing
\n
loans and
\n
borrowings
\n
Other
\n
non-
\n
current
\n
financial
\n
liabilities*
\n
Interest-
\n
bearing
\n
loans and
\n
borrowings
\n
\u2013
current
\n
portion
\n
Other
\n
current
\n
financial
\n
liabilities**
Total
\n
December 31, 2020
1,821
482
796
730
3,829
\n
Cash flows
775
(10
)
(1,384
)
(54
)
(673
)
\n
Non-cash changes:
\n
New leases
\u2014
80
\u2014
\u2014
80
\n
Settlement
\u2014
\u2014
573
(744
)
(171
)
\n
Accreted finance costs
23
\u2014
13
\u2014
36
\n
Fair value changes
\u2014
197
\u2014
68
265
\n
Reclassification
(153
)
(55
)
153
55
\u2014
\n
Foreign currency translation
(75
)
(9
)
(8
)
\u2014
(92
)
\n
December 31, 2021
2,391
685
143
55
3,274
\n
* \u201dOther non-current financial liabilities\u201d and \u201cOther current financial liabilities\u201d reported above do not include deferred and contingent
\n
consideration, as they relate to business acquisitions.
\n
** \u201dOther current financial liabilities\u201d reported above correspond to the current portion of the lease liability for an amount of $55 million.
\n
Derivatives are not reported in the above table as they relate to operating activities. Lease financial liabilities are further described in Note 7.6.11
\n
and convertible bonds are further described in Note 7.6.14.3
\n
The Group\u2019s long-term debt contained standard conditions but does not impose minimum financial ratios. The Group
\n
had unutilized committed credit facilities with core relationship banks totaling $1,281 million as of December 31,
\n
2022.
\n
As of December 31, 2022 the Group also had three long-term amortizing credit facilities with the European
\n
Investment Bank (\u201cEIB\u201d) as part of R&D funding programs and two long-term facilities with CDP SpA.
\n
EIB facilities
\n
The first one, signed in August 2017, is a \u20ac500 million loan, in relation to R&D and capital expenditures in the
\n
European Union, fully drawn in Euros, of which $346 million was outstanding as of December 31, 2022. The second
\n
one, signed in 2020, is a \u20ac500 million facility agreement with EIB to support R&D and capital expenditure programs
\n
in Italy and France. It was fully drawn in 2021, representing $481 million outstanding as of December 31, 2022. In
\n
2022, the Company signed a third long-term amortizing credit facility with EIB of \u20ac600 million loan, out of which, no
\n
amount had been drawn as of December 31, 2022.
\n
CDP SpA facilities
\n
The first, signed in 2021, is a \u20ac150 million loan, fully drawn in Euros, of which $120 million were outstanding as of
\n
December 31, 2022. The second one, signed in 2022, is a \u20ac200 million loan, fully drawn in Euros, of which $214
\n
million was outstanding as of December 31, 2022.
\n
As of December 31, 2021 the Group had three long\u2010term amortizing credit facilities with the EIB as part of R&D
\n
funding programs and one long-term facility with CDP SpA.
EIB facilities
\n
The first one, signed in August 2017, is a \u20ac500 million loan, in relation to R&D and capital expenditures in the
\n
European Union, fully drawn in Euros, of which $424 million was outstanding as of December 31, 2021. The second
\n
one, signed in 2020, is a \u20ac500 million facility agreement with EIB to support R&D and capital expenditure programs
\n
in Italy and France. It was fully drawn in 2021, representing $566 million outstanding as of December 31, 2021. In
\n
June 2021, we signed a new Facility Agreement with CDP SpA for an amount of \u20ac150 million, fully drawn in Euros, of
\n
which $156 million was outstanding as of December 31, 2021.
\n
CDP SpA facilities
\n
In June 2021, we signed a Facility Agreement with CDP SpA for an amount of \u20ac150 million, fully drawn in Euros, of
\n
which $156 million was outstanding as of December 31, 2021.
\n
7.6.14.4.
Hedging activities and derivatives
\n
Derivative instruments not designated as hedge
\n
The Group conducts its business on a global basis in various major international currencies. As a result, the Group is
\n
exposed to adverse movements in foreign currency exchange rates, primarily with respect to the Euro. Foreign
\n
exchange risk mainly arises from future commercial transactions and recognized assets and liabilities at the Group\u2019s
\n
subsidiaries. The Group enters into currency forward contracts to reduce its exposure to changes in exchange rates
\n
and the associated risk arising from the denomination of certain assets and liabilities in foreign currencies at the
\n
Group\u2019s subsidiaries. These instruments do not qualify as hedging instruments and are marked-to-market at each
\n
period-end with the associated changes in fair value recognized in \u201cOther income\u201d or \u201cOther expenses\u201d of the
\n
consolidated income statement.
\n
To reduce its exposure to U.S. dollar exchange rate fluctuations, the Group also hedges certain Euro-denominated
\n
forecasted transactions that cover at reporting date a large part of its R&D and SG&A expenses through the use of
\n
currency forward contracts and currency options, including collars. These instruments do not qualify as hedging
\n
instruments and are marked-to-market at each period-end with the associated changes in fair value recognized in
\n
\u201cOther income\u201d or \u201cOther expenses\u201d of the consolidated income statement.
\n
The notional amount of these financial instruments amounted to $2,041 million in 2022 (2021: $1,244 million). The
\n
principal currencies covered at the end of the year 2022 are the Euro, the Singapore dollar, the Japanese yen, the
\n
China Yuan Renminbi, the Indian rupee, the Swiss franc, the Moroccan dirham, the Malaysian ringgit, the Philippines
\n
peso, the Taiwan dollar, the South Korean won and the Swedish krona.
\n
Foreign currency forward contracts and currency options, including collars, not designated as cash flow hedge
\n
outstanding as of December 31, 2022 had remaining terms of 4 days to 20 months, maturing on average after 144
\n
days.
\n
Foreign currency forward contracts and currency options, including collars, not designated as cash flow hedge
\n
outstanding as of December 31, 2021 had remaining terms of 4 days to 13 months, maturing on average after 106
\n
days.
\n
Derivative instruments designated as cash flow hedge
\n
To reduce its exposure to U.S. dollar exchange rate fluctuations, the Group hedges certain Euro-denominated
\n
forecasted transactions that cover at reporting date a portion of its front-end manufacturing costs of semi-finished
\n
goods through the use of currency forward contracts and currency options, including collars. The Group also hedges
\n
certain manufacturing transactions denominated in Singapore dollars.
\n
The principles regulating the hedging strategy for derivatives designated as cash flow hedge is to hedge up to 70%
\n
of the total forecasted transactions of the following quarter for these manufacturing costs. In order to follow a
\n
dynamic hedge strategy, the Group may change the percentage of the designated hedged item within the limit of
\n
100% of the forecasted transaction. The maximum length of time over which the Group could hedge its exposure to
\n
the variability of cash flows for forecasted transactions is 24 months.
These derivative instruments are designated and qualified as cash flow hedges. Hedge effectiveness is determined
\n
at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure
\n
that an economic relationship exists between the hedged item and the hedging instrument. The Group enters into
\n
hedge relationships where the critical terms of the hedging instrument match with the terms of the hedged item,
\n
which ensures a 1:1 hedge ratio on a monthly basis. The Group therefore performs a qualitative assessment of
\n
effectiveness. If changes in circumstances affect the terms of the hedged item such that the critical terms no longer
\n
match with the critical term of the hedging instrument, the Group uses the hypothetical derivative method to assess
\n
effectiveness. Ineffectiveness may arise if the timing of the forecast transaction changes from what was originally
\n
estimated, which cannot occur as the Group designates as hedged items forecasted intercompany transactions
\n
denominated in foreign currency over which the Group has full oversight, control, and visibility. Ineffectiveness may
\n
arise only if there are changes in the credit risk of the counterparty.
\n
The derivative instruments designated as cash flow hedges are reflected at fair value in the consolidated statement
\n
of financial position. The unrealized gain or loss from the effective portion of the hedge is reported in other
\n
comprehensive income and is reclassified into earnings in the same period in which the hedged transaction affects
\n
earnings, and within the same consolidated income statement line item as the impact of the hedged transaction.
\n
For the year ended December 31, 2022, the Group recorded an increase in cost of sales of $129 million (2021:
\n
decrease of $15 million) related to the realized loss incurred on such hedged transactions. No significant ineffective
\n
portion of the hedge was recorded on the lines \u201cOther income\u201d or \u201cOther expenses\u201d for the years ended
\n
December 31, 2022 and 2021.
\n
The notional amount of foreign currency forward contracts and currency options, including collars, designated as
\n
cash flow hedge amounted to $2,081 million (2021: $1,425 million). The forecasted transactions hedged at
\n
December 31, 2022 were determined to be highly probable of occurring.
\n
As of December 31, 2022, the amount of net deferred gains on derivative instruments included in the cash flow
\n
hedge reserve in equity was $15 million (2021: net deferred losses of $22 million), of which $10 million were
\n
expected to be reclassified as earnings during the next 12 months based on the monthly forecasted semi-finished
\n
manufacturing costs.
\n
Foreign currency forward contracts and currency options, including collars, designated as cash flow hedge
\n
outstanding as of December 31, 2022, had remaining terms of 4 days to 19 months, maturing on average after 228
\n
days.
\n
Foreign currency forward contracts and currency options, including collars, designated as cash flow hedge
\n
outstanding as of December 31, 2021, had remaining terms of 5 days to 13 months, maturing on average after 140
\n
days.
\n
As of December 31, 2022, the Group had the following outstanding derivative instruments that were entered into
\n
to hedge Euro-denominated and Singapore-Dollar-denominated forecasted transactions:
\n
Notional amount for hedge on
\n
forecasted manufacturing costs
\n
transactions
\n
In millions of
\n
Euros
\n
In millions of
\n
Singapore Dollars
\n
Forward contracts
986
247
\n
Currency collars
791
\u2014
As of December 31, 2021, the Group had the following outstanding derivative instruments that were entered into
\n
to hedge Euro-denominated and Singapore-Dollar-denominated forecasted transactions:
\n
Notional amount for hedge on
\n
forecasted manufacturing costs
\n
transactions
\n
In millions of
\n
Euros
\n
In millions of
\n
Singapore Dollars
\n
Forward contracts
604
214
\n
Currency collars
514
\u2014
\n
Cash flow and fair value interest rate risk
\n
The Group\u2019s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the
\n
Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate
\n
risk.
\n
The Group analyzes its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into
\n
consideration refinancing, renewal of existing positions, alternative financing and hedging. The Group invests
\n
primarily on a short-term basis and as such its liquidity is invested in floating interest rate instruments. As a
\n
consequence, the Group is exposed to interest rate risk due to potential mismatch between the return on its short-
\n
term floating interest rate investments and the portion of its long-term debt issued at fixed rate.
\n
Other market risk
\n
As part of its ongoing investing activities, the Group may invest in publicly traded equity securities and be exposed
\n
to equity security price. In order to hedge the exposure to this market risk, the Group may enter into certain
\n
derivative hedging transactions.
\n
Credit risk and the Group\u2019s impairment policies on financial assets are further described in Note 7.6.7.13 and Note
\n
7.6.35.
\n
Offsetting financial assets and financial liabilities
\n
The Group entered into currency collars as combinations of two options, which are reported, for accounting
\n
purposes, on a net basis.
As of December 31, 2022, the fair value of these collars represented assets for a net amount
\n
of $15 million (composed of $19 million assets offset with a $4 million liability) and liabilities for a net amount of $10
\n
million (composed of $15 million liabilities offset with a $5 million asset).
In addition, the Group entered into other
\n
derivative instruments, primarily forward contracts, which are governed by standard International Swaps and
\n
Derivatives Association (\u201cISDA\u201d) agreements and are compliant with Protocols of the European Market
\n
Infrastructure Regulation (\u201cEMIR\u201d), which are not offset in the statement of financial position and representing total
\n
assets of $54 million and liabilities of $29 million as of December 31, 2022.
\n
Risk management policies relating to credit risk exposure to derivatives counterparties is further described in Note
\n
7.6.35.
7.6.15. Other non-current assets
The major portion of other long-term receivables to which the expected credit loss model applies is long-term State
\n
receivables. Due to the existing history of zero-default on receivables originated by governments, the expected credit
\n
loss is assumed to be negligible as of December 31, 2022, and 2021. Other non-current assets presented in the table
\n
above on the line \"Other non-current assets\" are composed of individually not significant amounts not deemed to
\n
have exposure of default.
Consequently, no significant expected credit loss allowance was reported on other non-
\n
current assets at reporting date.
7.6.17. Trade accounts receivable
As described in Note 7.6.35, the Group monitors the creditworthiness of its customers to which it grants credit terms
\n
in the normal course of business. If certain customers are independently rated, these ratings are used. Otherwise, if
\n
there is no independent rating, risk control assesses the credit quality of the customer, considering its financial
\n
position, past experience and other factors. Individual risk limits are set based on internal and external ratings in
\n
accordance with limits set by management. The utilization of credit limits is regularly monitored. Sales to customers
\n
are primarily settled in cash.
\n
The Group uses a lifetime expected loss allowance for all trade receivables based on failure rates, as applied to the
\n
gross amounts of trade accounts receivable. The model includes reasonable assumptions about future credit trends.
\n
The historical loss rates are adjusted to reflect current and forward-looking information on macro-economic factors
\n
affecting the ability of the Group\u2019s customers to settle the receivables. In addition to the factors already embedded
\n
in the failure rates, as applied on trade accounts receivable, the Group has identified cyclicality and uncertainties
\n
around continued growth for the semiconductor industry and its serviceable available market to be the most
\n
relevant factors. These macro-economic factors are weighted into different economic scenarios, in line with
\n
estimates and methodologies applied by other business entities, including financial institutions. These scenarios
range from upside scenario (above-trend economic growth) to severe downside (recession). On that basis, the loss
\n
allowance as of December 31, 2022 and December 31, 2021 was determined as follows:
\n
Past due
\n
In millions of U.S. dollars
Total
\n
No
\n
past-due
\n
Less than
\n
a month
\n
Between
\n
1 and 6
\n
months
\n
Over 6
\n
months
\n
December 31, 2022
\n
Expected loss rate
1
%
1
%
10
%
100
%
\n
Trade receivables
\u2013
Gross carrying amount
1,991
1,904
69
17
1
\n
Loss allowance
(21
)
(18
)
\u2014
(2
)
(1
)
\n
Trade receivables
\u2013
Net carrying amount
1,970
1,886
69
15
\u2014
\n
December 31, 2021
\n
Expected loss rate
1
%
1
%
10
%
100
%
\n
Trade receivables
\u2013
Gross carrying amount
1,778
1,736
39
\u2014
3
\n
Loss allowance
(19
)
(16
)
\u2014
\u2014
(3
)
\n
Trade receivables
\u2013
Net carrying amount
1,759
1,720
39
\u2014
\u2014
\n
The loss allowance for trade accounts receivable as of December 31, 2022 and December 31, 2021 reconcile to the
\n
opening loss allowance as follows:
\n
In millions of U.S. dollars
\n
As of December 31, 2020
16
\n
Additions
4
\n
Reversals
(1
)
\n
As of December 31, 2021
19
\n
Additions
5
\n
Reversals
(3
)
\n
As of December 31, 2022
21
7.6.18. Other receivables and assets
The Group applies a forward-looking expected credit losses model on all financial assets measured at amortized cost,
\n
excluding trade accounts receivable. The major portion of other receivables and assets to which this expected credit
\n
loss model applies corresponds to governmental receivables. Due to the short maturity of these receivables and the
\n
existing history of zero-default on receivables originated by governments, the expected credit loss is assumed to be
\n
negligible. Other receivables, excluding receivables from government agencies, are composed of individually
\n
insignificant amounts at exposure of default. Consequently, no significant loss allowance was reported on other
\n
receivables and assets as of December 31, 2022 and December 31, 2021.
7.6.35. Financial risk management objectives and policies
\n
The Group is exposed to changes in financial market conditions in the normal course of business due to its operations
\n
in different foreign currencies and its on-going investing and financing activities. The Group\u2019s activities expose it to
\n
a variety of financial risks: market risk (including foreign exchange risk, fair value interest rate risk, cash flow interest
\n
rate risk and price risk), credit risk and liquidity risk. The Group\u2019s overall risk management program focuses on the
\n
unpredictability of financial markets and seeks to minimize potential adverse effects on the Group\u2019s financial
\n
performance. The Group uses derivative financial instruments to hedge certain risk exposures.
\n
Financial risk management is carried out by a central treasury department (Corporate Treasury). Additionally, a
\n
treasury committee, chaired by the Chief Financial Officer, steers treasury activities and ensures compliance with
\n
corporate policies. Treasury activities are thus regulated by the Group\u2019s policies, which define procedures, objectives
\n
and controls. The policies focus on the management of financial risk in terms of exposure to market risk, credit risk
\n
and liquidity risk. Treasury controls are subject to internal audits. Most treasury activities are centralized, with any
\n
local treasury activities subject to oversight from Corporate Treasury. Corporate Treasury identifies, evaluates and
\n
hedges financial risks in close cooperation with the Group\u2019s operating units. It provides written principles for overall
\n
risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk,
\n
price risk, credit risk, use of derivative financial instruments, and investments of excess liquidity. The majority of
\n
cash and cash equivalents is held in U.S. dollars and Euros and is placed with financial institutions rated at least a
\n
single \u201cA\u201d long-term rating from two of the major rating agencies, meaning at least A3 from Moody\u2019s Investors
\n
Service (\u201cMoody\u2019s\u201d) and A- from Standard & Poor\u2019s (\u201cS&P\u201d) or Fitch (\u201cFitch\u201d) Ratings, or better. These ratings are
\n
closely and continuously monitored in order to manage exposure to the counterparty\u2019s risk. Hedging transactions
\n
are performed only to hedge exposures deriving from operating, investing and financing activities conducted in the
\n
normal course of business.
Market risk
\n
Foreign exchange risk
\n
The Group conducts its business on a global basis in various major international currencies. As a result, the Group is
\n
exposed to adverse movements in foreign currency exchange rates, primarily with respect to the Euro. Foreign
\n
exchange risk mainly arises from future commercial transactions and recognized assets and liabilities at the
\n
Company\u2019s subsidiaries.
\n
Management has set up a policy to require subsidiaries to hedge their entire foreign exchange risk exposure with
\n
the Group through financial instruments transacted or overseen by Corporate Treasury. To manage their foreign
\n
exchange risk arising from foreign-currency-denominated assets and liabilities, subsidiaries use forward contracts
\n
and purchased currency options. Foreign exchange risk arises when recognized assets and liabilities are denominated
\n
in a currency that is not the entity\u2019s functional currency. These instruments do not qualify as hedging instruments
\n
for accounting purposes. Forward contracts and currency options, including collars, are also used by the Group to
\n
reduce its exposure to U.S. dollar fluctuations in Euro-denominated forecasted intercompany transactions that cover
\n
a large part of its R&D, selling general and administrative expenses as well as a portion of its front-end manufacturing
\n
production costs of semi-finished goods. The Group also hedges using currency forward contracts certain Singapore
\n
dollar-denominated manufacturing forecasted transactions. The derivative instruments used to hedge the
\n
forecasted transactions relating to front-end manufacturing production costs meet the criteria for designation as
\n
cash flow hedge. The hedged forecasted transactions have a high probability of occurring for hedge accounting
\n
purposes.
\n
It is the Group\u2019s policy to keep the foreign exchange exposures in all the currencies hedged month by month against
\n
the monthly standard rate. At each month end, the forecasted flows for the coming month are hedged together with
\n
the fixing of the new standard rate. For this reason, the hedging transactions will have an exchange rate very close
\n
to the standard rate at which the forecasted flows will be recorded on the following month. As such, the foreign
\n
exchange exposure of the Group, which consists in the balance sheet positions and other contractually agreed
\n
transactions, is always close to zero and any movement in the foreign exchange rates will not therefore influence
\n
the exchange effect on items of the consolidated income statement. Any discrepancy from the forecasted values
\n
and the actual results is constantly monitored and prompt actions are taken, if needed.
\n
The hedging activity of the Group and the impact on the financial statements is described in detail in Note 7.6.14.4.
\n
The following sensitivity analysis was based on recognized assets and liabilities, including non-monetary items, of
\n
the Company and its subsidiaries. Equity would have been approximately $81 million higher/lower (2021: $54 million
\n
higher/lower) if the Euro strengthened/weakened by 300 basis points against the U.S. dollar, arising mainly from
\n
translation of net assets from subsidiaries whose functional currency is the Euro.
\n
As of December 31, 2022 if the Euro/U.S. dollar exchange rate had strengthened by 300 basis points with all other
\n
variables held constant, net result for the year would have been $73 million higher (2021: $45 million higher), mainly
\n
as a result of foreign exchange gains on outstanding derivative instruments. If the Euro/U.S. dollar exchange rate
\n
had weakened by 300 basis points with all other variables held constant, impact in net income would have been $72
\n
million lower (2021: $50 million lower), mainly due to foreign exchange losses on outstanding derivative
\n
instruments.
\n
Cash flow and fair value interest rate risk
\n
The Group\u2019s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the
\n
Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate
\n
risk.
\n
The Group analyzes its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into
\n
consideration refinancing, renewal of existing positions, alternative financing and hedging. The Group invests
\n
primarily on a short-term basis and as such its liquidity is invested in floating interest rate instruments. As a
\n
consequence, the Group is exposed to interest rate risk due to potential mismatch between the return on its short-
\n
term floating interest rate investments and the portion of its long-term debt issued at fixed rate.
As of December 31, 2022 and 2021, if interest rates had been 20 basis points higher/lower with all other variables
\n
held constant, net income for the year would have been $2 million and $1 million higher/lower respectively, mainly
\n
as a result of a high level of liquid assets in relation to debt, with no material impact on equity.
\n
During 2022 and 2021, the Group\u2019s borrowings at variable rate were denominated in Euros and in U.S. dollars.
\n
Price risk
\n
As part of its on-going investing activities, the Group may be exposed to quoted security price risk for investments
\n
measured at fair value, as described in Note 7.6.14.1. The Group did not hold as of December 31, 2022 and 2021 any
\n
significant investments in quoted equity securities.
\n
The measurement for accounting purposes of the embedded derivative instruments of the senior unsecured
\n
convertible bonds issued on August 4, 2020 is dependent on various factors including the performance of
\n
STMicroelectronics ordinary shares. With respect to the valuation of the embedded issuer\u2019s call options as of
\n
December 31, 2022, if the price of the Company\u2019s ordinary shares, as measured on the New York Stock Exchange,
\n
with other valuation inputs remaining equal, increases by 10%, the value of the embedded call options would
\n
increase by $6 million (2021: increase of $2 million), whereas for a decrease of 10% in the share price, the value of
\n
the embedded call options would decrease by $6 million (2021: decrease of $4 million). With respect to the valuation
\n
of the embedded bondholders\u2019 conversion options as of December 31, 2022, if the price of the Company\u2019s ordinary
\n
shares, as measured on the New York stock exchange, with other valuation inputs remaining equal, increases by
\n
10%, the value of the embedded conversion options would increase by $71 million (2021: increase of $126 million),
\n
whereas for a decrease of 10% in the share price, the value of the embedded conversion options would decrease by
\n
$65 million (2021: decrease of $108 million). Details of the sensitivity of the other valuation factors, more specifically
\n
implied volatility, are presented in Note 7.6.14.5.
\n
Credit risk
\n
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer
\n
contract leading to a financial loss. Credit risk typically arises from cash and cash equivalents, contractual cash flows
\n
of debt investments carried at amortized cost, measured at FVOCI and at FVPL, the counterparty of derivative
\n
financial instruments and deposits with banks and financial institutions, as well as credit exposure to customers,
\n
including outstanding receivables.
\n
The Group is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing
\n
activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial
\n
instruments.
\n
Credit risk is managed on the Group basis. The Group selects banks and/or financial institutions that operate with
\n
the Group based on the criteria of long-term rating from at least two major Rating Agencies and keeping a maximum
\n
outstanding amount per instrument with each bank not to exceed 20% of the total. For derivative financial
\n
instruments, management has established limits so that, at any time, the fair value of contracts outstanding is not
\n
concentrated with any individual counterparty.
\n
The Group monitors the creditworthiness of its customers to which it grants credit terms in the normal course of
\n
business. If certain customers are independently rated, these ratings are used. Otherwise, if there is no independent
\n
rating, risk control assesses the credit quality of the customer, considering its financial position, past experience, and
\n
other factors. Individual risk limits are set based on internal and external ratings in accordance with limits set by
\n
management. The utilization of credit limits is regularly monitored. Sales to customers are primarily settled in cash,
\n
which mitigates credit risk. There is no major concentration of credit risk, whether through exposure to individual
\n
customers, specific industry sectors, or regions. As of December 31, 2022 and 2021, no customer represented more
\n
than 10% of total trade accounts receivable. Any remaining concentrations of credit risk with respect to trade
\n
receivables are limited due to the large number of customers and their dispersion across many geographic areas.
The Group\u2019s investments in debt instruments primarily include U.S. Treasury Bonds and long-term receivables
\n
towards government bodies. As such, they are investments with unmaterial credit loss. Any remaining receivable is
\n
of low credit risk and are individually not significant. The credit ratings of the investments are monitored for credit
\n
deterioration.
\n
The Group has three types of financial assets that are subject to the expected credit loss model:
\n
\u2022
Trade receivables for sales of goods and services, as described in Note 7.6.17;
\n
\u2022
Debt securities measured at FVOCI, as described in Note 7.6.14.1; and
\n
\u2022
Debt investments, primarily long-term receivables, carried at amortized cost, as described in Note 7.6.15
\n
and Note 7.6.18.
\n
The impairment methodology by category of financial assets is further described in each respective note. While cash
\n
and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified impairment loss is
\n
deemed to be immaterial. The maximum exposure for all financial assets is their carrying amount.
\n
Liquidity risk
\n
Prudent liquidity risk management includes maintaining enough cash and cash equivalents, short-term deposits and
\n
marketable securities, the availability of funding from committed credit facilities and the ability to close out market
\n
positions. The Group\u2019s objective is to maintain a significant cash position and a low debt-to-equity ratio, which
\n
ensure adequate financial flexibility. Liquidity management policy is to finance the Group\u2019s investments with net
\n
cash provided from operating activities.
\n
Management monitors rolling forecasts of the Group\u2019s liquidity reserve based on expected cash flows.
\n
A maturity analysis of interest-bearing loans and borrowings is shown in Note 7.6.14.3.
\n
Capital risk management
\n
The Group\u2019s objectives when managing capital are to safeguard the Group\u2019s ability to continue as a going concern in
\n
order to create value for shareholders and benefits and returns for other stakeholders, as to maintain an optimal
\n
capital structure. In order to maintain or adjust the capital structure, the Group may review the amount of dividends
\n
paid to shareholders, return capital to shareholders, or issue new shares.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12643": {
"value": "
7.6.14.1.
Other financial assets
Investments held in debt securities
The Group applies a forward-looking expected credit loss (ECL) approach on all debt financial assets not held at FVPL.
\n
For debt securities at FVOCI, the ECL is based on a 12-month expected credit loss basis. The 12-month ECL is the
\n
portion of lifetime ECLs that results from default events on a financial instrument that are possible within 12 months
\n
after the reporting date. Since the Group\u2019s quoted debt instruments at FVOCI comprise solely U.S. Treasury debt
\n
securities, the Group has considered that the ECLs on these investments are insignificant.
7.6.15. Other non-current assets
The major portion of other long-term receivables to which the expected credit loss model applies is long-term State
\n
receivables. Due to the existing history of zero-default on receivables originated by governments, the expected credit
\n
loss is assumed to be negligible as of December 31, 2022, and 2021. Other non-current assets presented in the table
\n
above on the line \"Other non-current assets\" are composed of individually not significant amounts not deemed to
\n
have exposure of default.
Consequently, no significant expected credit loss allowance was reported on other non-
\n
current assets at reporting date.
7.6.17. Trade accounts receivable
As described in Note 7.6.35, the Group monitors the creditworthiness of its customers to which it grants credit terms
\n
in the normal course of business. If certain customers are independently rated, these ratings are used. Otherwise, if
\n
there is no independent rating, risk control assesses the credit quality of the customer, considering its financial
\n
position, past experience and other factors. Individual risk limits are set based on internal and external ratings in
\n
accordance with limits set by management. The utilization of credit limits is regularly monitored. Sales to customers
\n
are primarily settled in cash.
\n
The Group uses a lifetime expected loss allowance for all trade receivables based on failure rates, as applied to the
\n
gross amounts of trade accounts receivable. The model includes reasonable assumptions about future credit trends.
\n
The historical loss rates are adjusted to reflect current and forward-looking information on macro-economic factors
\n
affecting the ability of the Group\u2019s customers to settle the receivables. In addition to the factors already embedded
\n
in the failure rates, as applied on trade accounts receivable, the Group has identified cyclicality and uncertainties
\n
around continued growth for the semiconductor industry and its serviceable available market to be the most
\n
relevant factors. These macro-economic factors are weighted into different economic scenarios, in line with
\n
estimates and methodologies applied by other business entities, including financial institutions. These scenarios
range from upside scenario (above-trend economic growth) to severe downside (recession). On that basis, the loss
\n
allowance as of December 31, 2022 and December 31, 2021 was determined as follows:
\n
Past due
\n
In millions of U.S. dollars
Total
\n
No
\n
past-due
\n
Less than
\n
a month
\n
Between
\n
1 and 6
\n
months
\n
Over 6
\n
months
\n
December 31, 2022
\n
Expected loss rate
1
%
1
%
10
%
100
%
\n
Trade receivables
\u2013
Gross carrying amount
1,991
1,904
69
17
1
\n
Loss allowance
(21
)
(18
)
\u2014
(2
)
(1
)
\n
Trade receivables
\u2013
Net carrying amount
1,970
1,886
69
15
\u2014
\n
December 31, 2021
\n
Expected loss rate
1
%
1
%
10
%
100
%
\n
Trade receivables
\u2013
Gross carrying amount
1,778
1,736
39
\u2014
3
\n
Loss allowance
(19
)
(16
)
\u2014
\u2014
(3
)
\n
Trade receivables
\u2013
Net carrying amount
1,759
1,720
39
\u2014
\u2014
\n
The loss allowance for trade accounts receivable as of December 31, 2022 and December 31, 2021 reconcile to the
\n
opening loss allowance as follows:
\n
In millions of U.S. dollars
\n
As of December 31, 2020
16
\n
Additions
4
\n
Reversals
(1
)
\n
As of December 31, 2021
19
\n
Additions
5
\n
Reversals
(3
)
\n
As of December 31, 2022
21
\n
Trade accounts receivable are denominated in the following currencies:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
U.S. dollars
1,822
1,635
\n
Euro
35
37
\n
Japanese Yen
134
106
\n
Total
1,991
1,778
\n
The maximum exposure to credit risk was the fair value of trade accounts receivable, net of expected credit losses
\n
as of December 31, 2022 and December 31, 2021.
7.6.18. Other receivables and assets
The Group applies a forward-looking expected credit losses model on all financial assets measured at amortized cost,
\n
excluding trade accounts receivable. The major portion of other receivables and assets to which this expected credit
\n
loss model applies corresponds to governmental receivables. Due to the short maturity of these receivables and the
\n
existing history of zero-default on receivables originated by governments, the expected credit loss is assumed to be
\n
negligible. Other receivables, excluding receivables from government agencies, are composed of individually
\n
insignificant amounts at exposure of default. Consequently, no significant loss allowance was reported on other
\n
receivables and assets as of December 31, 2022 and December 31, 2021.
Credit risk
\n
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer
\n
contract leading to a financial loss. Credit risk typically arises from cash and cash equivalents, contractual cash flows
\n
of debt investments carried at amortized cost, measured at FVOCI and at FVPL, the counterparty of derivative
\n
financial instruments and deposits with banks and financial institutions, as well as credit exposure to customers,
\n
including outstanding receivables.
\n
The Group is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing
\n
activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial
\n
instruments.
\n
Credit risk is managed on the Group basis. The Group selects banks and/or financial institutions that operate with
\n
the Group based on the criteria of long-term rating from at least two major Rating Agencies and keeping a maximum
\n
outstanding amount per instrument with each bank not to exceed 20% of the total. For derivative financial
\n
instruments, management has established limits so that, at any time, the fair value of contracts outstanding is not
\n
concentrated with any individual counterparty.
\n
The Group monitors the creditworthiness of its customers to which it grants credit terms in the normal course of
\n
business. If certain customers are independently rated, these ratings are used. Otherwise, if there is no independent
\n
rating, risk control assesses the credit quality of the customer, considering its financial position, past experience, and
\n
other factors. Individual risk limits are set based on internal and external ratings in accordance with limits set by
\n
management. The utilization of credit limits is regularly monitored. Sales to customers are primarily settled in cash,
\n
which mitigates credit risk. There is no major concentration of credit risk, whether through exposure to individual
\n
customers, specific industry sectors, or regions. As of December 31, 2022 and 2021, no customer represented more
\n
than 10% of total trade accounts receivable. Any remaining concentrations of credit risk with respect to trade
\n
receivables are limited due to the large number of customers and their dispersion across many geographic areas.
The Group\u2019s investments in debt instruments primarily include U.S. Treasury Bonds and long-term receivables
\n
towards government bodies. As such, they are investments with unmaterial credit loss. Any remaining receivable is
\n
of low credit risk and are individually not significant. The credit ratings of the investments are monitored for credit
\n
deterioration.
\n
The Group has three types of financial assets that are subject to the expected credit loss model:
\n
\u2022
Trade receivables for sales of goods and services, as described in Note 7.6.17;
\n
\u2022
Debt securities measured at FVOCI, as described in Note 7.6.14.1; and
\n
\u2022
Debt investments, primarily long-term receivables, carried at amortized cost, as described in Note 7.6.15
\n
and Note 7.6.18.
\n
The impairment methodology by category of financial assets is further described in each respective note. While cash
\n
and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified impairment loss is
\n
deemed to be immaterial. The maximum exposure for all financial assets is their carrying amount.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCreditRiskExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12644": {
"value": "
7.6.14.1.
Other financial assets
Investments held in debt securities
The Group applies a forward-looking expected credit loss (ECL) approach on all debt financial assets not held at FVPL.
\n
For debt securities at FVOCI, the ECL is based on a 12-month expected credit loss basis. The 12-month ECL is the
\n
portion of lifetime ECLs that results from default events on a financial instrument that are possible within 12 months
\n
after the reporting date. Since the Group\u2019s quoted debt instruments at FVOCI comprise solely U.S. Treasury debt
\n
securities, the Group has considered that the ECLs on these investments are insignificant.
\n
Investments held in equity securities
\n
As of December 31, 2022, the Group also had investments in quoted equity securities for an aggregate value of
\n
$12 million, measured at FVPL (December 31, 2021: $13 million).
\n
As of December 31, 2022, the Group also reported other trading financial assets for an aggregate value of $14 million
\n
(December 31, 2021: $16 million).
\n
The Group irrevocably elected to measure at FVOCI unquoted equity securities for an aggregate value of $10 million
\n
(December 31, 2021: $10 million). Since these are strategic investments, the Group considers this classification,
\n
which implies that changes in fair value are not subsequently recycled to earnings, to be more relevant.
\n
The changes in fair value reported on the Group\u2019s investments held in equity securities for the years ended
\n
December 31, 2022 and December 31, 2021 were immaterial.
7.6.15. Other non-current assets
The major portion of other long-term receivables to which the expected credit loss model applies is long-term State
\n
receivables. Due to the existing history of zero-default on receivables originated by governments, the expected credit
\n
loss is assumed to be negligible as of December 31, 2022, and 2021. Other non-current assets presented in the table
\n
above on the line \"Other non-current assets\" are composed of individually not significant amounts not deemed to
\n
have exposure of default.
Consequently, no significant expected credit loss allowance was reported on other non-
\n
current assets at reporting date.
7.6.17. Trade accounts receivable
As described in Note 7.6.35, the Group monitors the creditworthiness of its customers to which it grants credit terms
\n
in the normal course of business. If certain customers are independently rated, these ratings are used. Otherwise, if
\n
there is no independent rating, risk control assesses the credit quality of the customer, considering its financial
\n
position, past experience and other factors. Individual risk limits are set based on internal and external ratings in
\n
accordance with limits set by management. The utilization of credit limits is regularly monitored. Sales to customers
\n
are primarily settled in cash.
\n
The Group uses a lifetime expected loss allowance for all trade receivables based on failure rates, as applied to the
\n
gross amounts of trade accounts receivable. The model includes reasonable assumptions about future credit trends.
\n
The historical loss rates are adjusted to reflect current and forward-looking information on macro-economic factors
\n
affecting the ability of the Group\u2019s customers to settle the receivables. In addition to the factors already embedded
\n
in the failure rates, as applied on trade accounts receivable, the Group has identified cyclicality and uncertainties
\n
around continued growth for the semiconductor industry and its serviceable available market to be the most
\n
relevant factors. These macro-economic factors are weighted into different economic scenarios, in line with
\n
estimates and methodologies applied by other business entities, including financial institutions. These scenarios
range from upside scenario (above-trend economic growth) to severe downside (recession). On that basis, the loss
\n
allowance as of December 31, 2022 and December 31, 2021 was determined as follows:
\n
Past due
\n
In millions of U.S. dollars
Total
\n
No
\n
past-due
\n
Less than
\n
a month
\n
Between
\n
1 and 6
\n
months
\n
Over 6
\n
months
\n
December 31, 2022
\n
Expected loss rate
1
%
1
%
10
%
100
%
\n
Trade receivables
\u2013
Gross carrying amount
1,991
1,904
69
17
1
\n
Loss allowance
(21
)
(18
)
\u2014
(2
)
(1
)
\n
Trade receivables
\u2013
Net carrying amount
1,970
1,886
69
15
\u2014
\n
December 31, 2021
\n
Expected loss rate
1
%
1
%
10
%
100
%
\n
Trade receivables
\u2013
Gross carrying amount
1,778
1,736
39
\u2014
3
\n
Loss allowance
(19
)
(16
)
\u2014
\u2014
(3
)
\n
Trade receivables
\u2013
Net carrying amount
1,759
1,720
39
\u2014
\u2014
\n
The loss allowance for trade accounts receivable as of December 31, 2022 and December 31, 2021 reconcile to the
\n
opening loss allowance as follows:
\n
In millions of U.S. dollars
\n
As of December 31, 2020
16
\n
Additions
4
\n
Reversals
(1
)
\n
As of December 31, 2021
19
\n
Additions
5
\n
Reversals
(3
)
\n
As of December 31, 2022
21
The maximum exposure to credit risk was the fair value of trade accounts receivable, net of expected credit losses
\n
as of December 31, 2022 and December 31, 2021.
7.6.18. Other receivables and assets
The Group applies a forward-looking expected credit losses model on all financial assets measured at amortized cost,
\n
excluding trade accounts receivable. The major portion of other receivables and assets to which this expected credit
\n
loss model applies corresponds to governmental receivables. Due to the short maturity of these receivables and the
\n
existing history of zero-default on receivables originated by governments, the expected credit loss is assumed to be
\n
negligible. Other receivables, excluding receivables from government agencies, are composed of individually
\n
insignificant amounts at exposure of default. Consequently, no significant loss allowance was reported on other
\n
receivables and assets as of December 31, 2022 and December 31, 2021.
Credit risk
The Group monitors the creditworthiness of its customers to which it grants credit terms in the normal course of
\n
business. If certain customers are independently rated, these ratings are used. Otherwise, if there is no independent
\n
rating, risk control assesses the credit quality of the customer, considering its financial position, past experience, and
\n
other factors. Individual risk limits are set based on internal and external ratings in accordance with limits set by
\n
management. The utilization of credit limits is regularly monitored. Sales to customers are primarily settled in cash,
\n
which mitigates credit risk. There is no major concentration of credit risk, whether through exposure to individual
\n
customers, specific industry sectors, or regions. As of December 31, 2022 and 2021, no customer represented more
\n
than 10% of total trade accounts receivable. Any remaining concentrations of credit risk with respect to trade
\n
receivables are limited due to the large number of customers and their dispersion across many geographic areas.
The Group\u2019s investments in debt instruments primarily include U.S. Treasury Bonds and long-term receivables
\n
towards government bodies. As such, they are investments with unmaterial credit loss. Any remaining receivable is
\n
of low credit risk and are individually not significant. The credit ratings of the investments are monitored for credit
\n
deterioration.
\n
The Group has three types of financial assets that are subject to the expected credit loss model:
\n
\u2022
Trade receivables for sales of goods and services, as described in Note 7.6.17;
\n
\u2022
Debt securities measured at FVOCI, as described in Note 7.6.14.1; and
\n
\u2022
Debt investments, primarily long-term receivables, carried at amortized cost, as described in Note 7.6.15
\n
and Note 7.6.18.
\n
The impairment methodology by category of financial assets is further described in each respective note. While cash
\n
and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified impairment loss is
\n
deemed to be immaterial. The maximum exposure for all financial assets is their carrying amount.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12646": {
"value": "7.6.14.1.
Other financial assets
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Other financial assets (including derivatives)
\n
Other financial assets
\n
Quoted debt securities at FVOCI
\n
(1)
\n
679
\u2014
\n
Unquoted equity securities at FVOCI
\n
(1)
\n
10
10
\n
Quoted equity securities at FVPL
\n
(2)
\n
12
13
\n
Other trading financial assets at FVPL
\n
(2)
\n
14
16
\n
Total other financial assets
715
39
\n
Current
679
\u2014
\n
Non-current
36
39
\n
Derivative financial instruments
\n
Cash flow hedges
\n
Foreign exchange forward contracts
30
2
\n
Currency collars
8
1
\n
Derivatives not designated as hedges
\n
Foreign exchange forward contracts
25
3
\n
Currency collars
6
\u2014
\n
Embedded call option - Senior unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche A)
13
11
\n
Embedded call option - Senior unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche B)
20
15
\n
Total derivatives financial instruments
102
32
\n
Current
69
6
\n
Non-current
33
26
\n
Total other financial assets (including derivatives)
817
71
\n
Total current
748
6
\n
Total non-current
69
65
\n
(1)
FVOCI: Fair Value through Other Comprehensive Income
\n
(2)
FVPL: Fair Value through P&L
\n
Risk management policies relating to credit risk exposure to derivatives counterparties are further described in Note
\n
7.6.35.
\n
Movements in other financial assets (excluding derivatives) recorded in 2022 are summarized as follows:
\n
In millions of U.S. dollars
Jan
1,
2022
\n
Change in
\n
fair value
\n
included in
\n
OCI*
\n
Change in
\n
fair value
\n
included in
\n
income
\n
statement
Purchase
\n
Proceeds at
\n
maturity
Accretion
\n
Realized
\n
gain
Dec
31,
2022
\n
Government bonds issued by
\n
the U.S. Treasury
\u2014
(16
)
\u2014
687
\u2014
8
\u2014
679
\n
Quoted equity
\n
instruments at FVPL
13
\u2014
(1
)
\u2014
\u2014
\u2014
\u2014
12
\n
Sub-total Quoted debt
\n
and equity securities
13
(16
)
(1
)
687
\u2014
8
\u2014
691
\n
Unquoted equity
\n
securities at FVOCI
10
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
10
\n
Other trading financial
\n
assets at FVPL
16
\u2014
(2
)
\u2014
\u2014
\u2014
\u2014
14
\n
Total other financial
\n
assets (excluding
\n
derivatives)
39
(16
)
(3
)
687
\u2014
8
\u2014
715
\n
*OCI: Other comprehensive income
\n
Movements in other financial assets (excluding derivatives) recorded in 2021 are summarized as follows:
\n
In millions of U.S. dollars
Jan
1,
2021
\n
Change in
\n
fair value
\n
included in
\n
OCI*
\n
Change in
\n
fair value
\n
included in
\n
income
\n
statement
Purchase
\n
Proceeds at
\n
maturity
\n
Foreign
\n
exchange
\n
result
\n
recognized in
\n
OCI*
\n
Realized
\n
gain
Dec
31,
2021
\n
Debt securities issued by
\n
the U.S. Treasury
133
(1
)
\u2014
\u2014
(132
)
\u2014
\u2014
\u2014
\n
Quoted equity
\n
instruments at FVPL
13
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
13
\n
Sub-total Quoted debt
\n
and equity securities
146
(1
)
\u2014
\u2014
(132
)
\u2014
\u2014
13
\n
Unquoted equity
\n
securities at FVOCI
10
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
10
\n
Other trading financial
\n
assets at FVPL
12
\u2014
4
\u2014
\u2014
\u2014
\u2014
16
\n
Total other financial
\n
assets (excluding
\n
derivatives)
168
(1
)
4
\u2014
(132
)
\u2014
\u2014
39
\n
*OCI: Other comprehensive income
\n
Investments held in debt securities
\n
As of December 31, 2022, the Group held $679 million of U.S. Treasury debt securities. The debt securities have an
\n
average rating of Aaa/AA+/AAA from Moody\u2019s, S&P and Fitch, respectively and an average maturity of 3.5 years. The
\n
debt securities were reported as current assets on the line \u201cOther current financial assets\u201d on the consolidated
\n
statement of financial position as of December 31, 2022, since they represented investments of funds available for
\n
current operations.
\n
Marketable securities totaling $750 million at principal amount were transferred to financial institutions as part of
\n
short-term securities lending transactions, in compliance with corporate policies. The Group, acting as the securities
\n
lender, does not hold any collateral in this unsecured securities lending transaction. The Group retains effective
\n
control on the transferred securities.
\n
The Group applies a forward-looking expected credit loss (ECL) approach on all debt financial assets not held at FVPL.
\n
For debt securities at FVOCI, the ECL is based on a 12-month expected credit loss basis. The 12-month ECL is the
\n
portion of lifetime ECLs that results from default events on a financial instrument that are possible within 12 months
\n
after the reporting date. Since the Group\u2019s quoted debt instruments at FVOCI comprise solely U.S. Treasury debt
\n
securities, the Group has considered that the ECLs on these investments are insignificant.
\n
Investments held in equity securities
\n
As of December 31, 2022, the Group also had investments in quoted equity securities for an aggregate value of
\n
$12 million, measured at FVPL (December 31, 2021: $13 million).
\n
As of December 31, 2022, the Group also reported other trading financial assets for an aggregate value of $14 million
\n
(December 31, 2021: $16 million).
\n
The Group irrevocably elected to measure at FVOCI unquoted equity securities for an aggregate value of $10 million
\n
(December 31, 2021: $10 million). Since these are strategic investments, the Group considers this classification,
\n
which implies that changes in fair value are not subsequently recycled to earnings, to be more relevant.
\n
The changes in fair value reported on the Group\u2019s investments held in equity securities for the years ended
\n
December 31, 2022 and December 31, 2021 were immaterial.
\n
Short-term deposits
\n
To optimize the return yield on its short-term investments, the Group invested $581 million of available cash in
\n
short-term deposits as of December 31, 2022, compared to $291 million as of December 31, 2021. These short-term
\n
deposits had a maturity beyond three months and no significant risk of changes in fair value. They are reported in
\nthe line \u201cShort-term deposits\u201d of the consolidated statement of financial position.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12987": {
"value": "
7.6.14.2.
Other financial liabilities
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Lease financial liabilities
250
203
\n
Deferred and contingent consideration on business acquisitions
31
97
\n
Derivative financial instruments
\n
Cash flow hedges
\n
Foreign exchange forward contracts
17
18
\n
Currency collars
6
7
\n
Derivatives not designated as hedges
\n
Foreign exchange forward contracts
12
12
\n
Currency collars
4
6
\n
Embedded conversion option - Senior unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche A)
110
255
\n
Embedded conversion option - Senior unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche B)
151
282
\n
Total other financial liabilities (including derivatives)
581
880
\n
Total current
204
125
\n
Total non-current
377
755
\n
Risk management policies relating to credit risk exposure to derivatives counterparties are further described in Note
\n
7.6.35. Lease financial liabilities are further described in Note 7.6.11.
7.6.21.
Other non-current liabilities
Long-term liabilities related to public funding included $46 million grants received mainly as part of the Nano2017
\n
program with the French government, which is subject to financial returns and depends on future cumulative sales.
\n
Advances from customers are primarily related to multi-annual capacity reservation and volume commitment
\n
agreements signed in 2022 with certain customers, as described in Note 7.6.23.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13052": {
"value": "
7.6.14.3.
Interest-bearing loans and borrowings
Aggregate contractual maturities of interest-bearing loans and borrowings outstanding, excluding repayments of
\n
coupons and interests, are as follows:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
2022
\u2014
143
\n
2023
168
143
\n
2024
168
143
\n
2025
918
893
\n
2026
167
142
\n
2027
903
877
\n
Thereafter
341
311
\n
Total
2,665
2,652
\n
The difference between the total aggregated future maturities in the preceding table and the total carrying amount
\n
of long-term debt is due to unamortized debt discount and issuance costs on the dual tranche senior unsecured
\n
convertible bonds.
Liquidity risk
\n
Prudent liquidity risk management includes maintaining enough cash and cash equivalents, short-term deposits and
\n
marketable securities, the availability of funding from committed credit facilities and the ability to close out market
\n
positions. The Group\u2019s objective is to maintain a significant cash position and a low debt-to-equity ratio, which
\n
ensure adequate financial flexibility. Liquidity management policy is to finance the Group\u2019s investments with net
\n
cash provided from operating activities.
\n
Management monitors rolling forecasts of the Group\u2019s liquidity reserve based on expected cash flows.
\n
A maturity analysis of interest-bearing loans and borrowings is shown in Note 7.6.14.3.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13054": {
"value": "7.6.14.3.
Interest-bearing loans and borrowings
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Funding program loans from European Investment Bank:
\n
2.67% due 2028, floating interest rate at Euribor + 0.589%
163
202
\n
1.20% due 2029, floating interest rate at Euribor + 0.564%
183
222
\n
1.31% due 2031, floating interest rate at Euribor + 0.583%
322
379
\n
0.89% due 2031, floating interest rate at Euribor + 0.660%
159
187
\n
Credit Facility from Cassa Depositi e Prestiti S.p.A.
\n
3.15% due 2027, floating interest rate at Euribor + 0.690%
120
156
\n
1.85% due 2027, floating interest rate at Euribor + 0.550%
107
\u2014
\n
2.15% due 2027, floating interest rate at Euribor + 0.850%
107
\u2014
\n
Dual tranche senior unsecured convertible bonds:
\n
Zero-coupon, due 2025 (Tranche A)
717
705
\n
Zero-coupon, due 2027 (Tranche B)
690
677
\n
Other Funding program loans:
\n
0.32% (weighted average), due 2023-2028, fixed interest rate
4
6
\n
Total interest-bearing loans and borrowings
2,572
2,534
\n
Total current
885
143
\n
Total non-current
1,687
2,391
\n
Interest-bearing loans and borrowings are denominated in the following currencies:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
U.S. Dollar
1,407
1,382
\n
Euro
1,165
1,152
\n
Total
2,572
2,534
\n
The European Investment Bank\u2019s loans denominated in Euros, but drawn in U.S. dollars, are classified as U.S. dollar
\n
denominated debt.
\n
Aggregate contractual maturities of interest-bearing loans and borrowings outstanding, excluding repayments of
\n
coupons and interests, are as follows:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
2022
\u2014
143
\n
2023
168
143
\n
2024
168
143
\n
2025
918
893
\n
2026
167
142
\n
2027
903
877
\n
Thereafter
341
311
\n
Total
2,665
2,652
\n
The difference between the total aggregated future maturities in the preceding table and the total carrying amount
\n
of long-term debt is due to unamortized debt discount and issuance costs on the dual tranche senior unsecured
\n
convertible bonds.
Senior convertible bonds
\n
On August 4, 2020, the Company issued $1,500 million in principal amount of dual tranche senior unsecured
\n
convertible bonds (Tranche A for $750 million and Tranche B for $750 million), due 2025 and 2027, respectively.
\n
Tranche A bonds were issued at 105.8% as zero-coupon bonds while Tranche B bonds were issued at 104.5% as zero-
\n
coupon bonds. The conversion price at issuance was $43.62 for Tranche A, equivalent to a 47.5% conversion
\n
premium and $45.10 for Tranche B, equivalent to a 52.5% conversion premium. These conversion features
\n
correspond to an equivalent of 4,585 shares per each Tranche A bond $200,000 par value and an equivalent of 4,435
\n
shares per each Tranche B bond $200,000 par value. The bonds are convertible by the bondholders or are callable
\n
by the issuer upon certain conditions, on a net-share settlement basis, except if the issuer elects a full-cash or full-
\n
share conversion as an alternative settlement. The net proceeds from the bond offering were $1,567 million, after
\n
deducting issuance costs payable by the Group.
\n
The issuer\u2019s call option and the holder\u2019s conversion option have been identified as embedded non-equity derivative
\n
instruments, resulting in the recognition of the options separately from the debt host contract. Upon initial
\n
recognition, the derivatives were measured at fair value based on the income approach, the debt being determined
\n
as a residual amount of the $1.5 billion total proceeds. The value of the issuer\u2019s call option was deemed to be nil at
\n
initial recognition. The value of the holder\u2019s conversion option was estimated at $219 million at issuance date, which
\n
determined the initial recognition of the liability component at $1,358 million before allocation of issuance costs.
\n
The fair value measurement of the embedded derivative instruments corresponded to a Level 3 fair value hierarchy
\n
measurement, which is further described in Note 7.6.14.5. The Group elected to allocate issuance costs, totaling
\n
$10 million, to the debt component. The debt was subsequently measured at amortized cost using the effective
\n
interest method.
\n
Starting August 2023 and August 2024 for Tranche A and Tranche B convertible bonds, respectively, the bondholders
\n
will have full conversion rights. Consequently, Tranche A non-equity embedded derivative instruments and Tranche
\n
A liability component were reported on the line Other current financial assets for an amount of $13 million, on the
\n
line Other current financial liabilities for an amount of $110 million and on the line Interest-bearing loans and
\n
borrowings \u2013 current portion for an amount of $717 million, respectively, of the consolidated statement of financial
\n
position as of December 31, 2022.
\n
Reconciliation of liabilities arising from financing activities
\n
The reconciliation for the year ended December 31, 2022 is as follows:
\n
In millions of U.S. dollars
\n
Interest-
\n
bearing
\n
loans and
\n
borrowings
\n
Other
\n
non-
\n
current
\n
financial
\n
liabilities*
\n
Interest-
\n
bearing
\n
loans and
\n
borrowings
\n
\u2013
current
\n
portion
\n
Other
\n
current
\n
financial
\n
liabilities**
Total
\n
December 31, 2021
2,391
685
143
55
3,274
\n
Cash flows
200
\u2014
(134
)
(58
)
8
\n
Non-cash changes:
\n
New leases
\u2014
112
\u2014
3
115
\n
Accreted finance costs
25
\u2014
\u2014
\u2014
25
\n
Fair value changes
\u2014
(276
)
\u2014
\u2014
(276
)
\n
Reclassification
(885
)
(169
)
885
169
\u2014
\n
Foreign currency translation
(44
)
(10
)
(9
)
\u2014
(63
)
\n
December 31, 2022
1,687
342
885
169
3,083
\n
* \u201dOther non-current financial liabilities\u201d reported above do not include deferred and contingent consideration, as they relate to business
\n
acquisitions.
\n
** \u201dOther current financial liabilities\u201d reported above correspond to the current portion of the lease liability for an amount of $59 million and
\n
Tranche A on bondholder\u2019s conversion option for an amount $110 million. Derivatives are not reported in the above table as they relate to
\n
operating activities. Lease financial liabilities are further described in Note 7.6.11 and convertible bonds are further described in Note 7.6.14.3.
\n
The reconciliation for the year ended December 31, 2021 is as follows:
\n
In millions of U.S. dollars
\n
Interest-
\n
bearing
\n
loans and
\n
borrowings
\n
Other
\n
non-
\n
current
\n
financial
\n
liabilities*
\n
Interest-
\n
bearing
\n
loans and
\n
borrowings
\n
\u2013
current
\n
portion
\n
Other
\n
current
\n
financial
\n
liabilities**
Total
\n
December 31, 2020
1,821
482
796
730
3,829
\n
Cash flows
775
(10
)
(1,384
)
(54
)
(673
)
\n
Non-cash changes:
\n
New leases
\u2014
80
\u2014
\u2014
80
\n
Settlement
\u2014
\u2014
573
(744
)
(171
)
\n
Accreted finance costs
23
\u2014
13
\u2014
36
\n
Fair value changes
\u2014
197
\u2014
68
265
\n
Reclassification
(153
)
(55
)
153
55
\u2014
\n
Foreign currency translation
(75
)
(9
)
(8
)
\u2014
(92
)
\n
December 31, 2021
2,391
685
143
55
3,274
\n
* \u201dOther non-current financial liabilities\u201d and \u201cOther current financial liabilities\u201d reported above do not include deferred and contingent
\n
consideration, as they relate to business acquisitions.
\n
** \u201dOther current financial liabilities\u201d reported above correspond to the current portion of the lease liability for an amount of $55 million.
\n
Derivatives are not reported in the above table as they relate to operating activities. Lease financial liabilities are further described in Note 7.6.11
\n
and convertible bonds are further described in Note 7.6.14.3
\n
The Group\u2019s long-term debt contained standard conditions but does not impose minimum financial ratios. The Group
\n
had unutilized committed credit facilities with core relationship banks totaling $1,281 million as of December 31,
\n
2022.
\n
As of December 31, 2022 the Group also had three long-term amortizing credit facilities with the European
\n
Investment Bank (\u201cEIB\u201d) as part of R&D funding programs and two long-term facilities with CDP SpA.
\n
EIB facilities
\n
The first one, signed in August 2017, is a \u20ac500 million loan, in relation to R&D and capital expenditures in the
\n
European Union, fully drawn in Euros, of which $346 million was outstanding as of December 31, 2022. The second
\n
one, signed in 2020, is a \u20ac500 million facility agreement with EIB to support R&D and capital expenditure programs
\n
in Italy and France. It was fully drawn in 2021, representing $481 million outstanding as of December 31, 2022. In
\n
2022, the Company signed a third long-term amortizing credit facility with EIB of \u20ac600 million loan, out of which, no
\n
amount had been drawn as of December 31, 2022.
\n
CDP SpA facilities
\n
The first, signed in 2021, is a \u20ac150 million loan, fully drawn in Euros, of which $120 million were outstanding as of
\n
December 31, 2022. The second one, signed in 2022, is a \u20ac200 million loan, fully drawn in Euros, of which $214
\n
million was outstanding as of December 31, 2022.
\n
As of December 31, 2021 the Group had three long\u2010term amortizing credit facilities with the EIB as part of R&D
\n
funding programs and one long-term facility with CDP SpA.
EIB facilities
\n
The first one, signed in August 2017, is a \u20ac500 million loan, in relation to R&D and capital expenditures in the
\n
European Union, fully drawn in Euros, of which $424 million was outstanding as of December 31, 2021. The second
\n
one, signed in 2020, is a \u20ac500 million facility agreement with EIB to support R&D and capital expenditure programs
\n
in Italy and France. It was fully drawn in 2021, representing $566 million outstanding as of December 31, 2021. In
\n
June 2021, we signed a new Facility Agreement with CDP SpA for an amount of \u20ac150 million, fully drawn in Euros, of
\n
which $156 million was outstanding as of December 31, 2021.
\n
CDP SpA facilities
\n
In June 2021, we signed a Facility Agreement with CDP SpA for an amount of \u20ac150 million, fully drawn in Euros, of
\nwhich $156 million was outstanding as of December 31, 2021.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBorrowingsExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13209": {
"value": "Reconciliation of liabilities arising from financing activities
The reconciliation for the year ended December 31, 2022 is as follows:
\n
In millions of U.S. dollars
\n
Interest-
\n
bearing
\n
loans and
\n
borrowings
\n
Other
\n
non-
\n
current
\n
financial
\n
liabilities*
\n
Interest-
\n
bearing
\n
loans and
\n
borrowings
\n
\u2013
current
\n
portion
\n
Other
\n
current
\n
financial
\n
liabilities**
Total
\n
December 31, 2021
2,391
685
143
55
3,274
\n
Cash flows
200
\u2014
(134
)
(58
)
8
\n
Non-cash changes:
\n
New leases
\u2014
112
\u2014
3
115
\n
Accreted finance costs
25
\u2014
\u2014
\u2014
25
\n
Fair value changes
\u2014
(276
)
\u2014
\u2014
(276
)
\n
Reclassification
(885
)
(169
)
885
169
\u2014
\n
Foreign currency translation
(44
)
(10
)
(9
)
\u2014
(63
)
\n
December 31, 2022
1,687
342
885
169
3,083
\n
* \u201dOther non-current financial liabilities\u201d reported above do not include deferred and contingent consideration, as they relate to business
\n
acquisitions.
\n
** \u201dOther current financial liabilities\u201d reported above correspond to the current portion of the lease liability for an amount of $59 million and
\n
Tranche A on bondholder\u2019s conversion option for an amount $110 million. Derivatives are not reported in the above table as they relate to
\n
operating activities. Lease financial liabilities are further described in Note 7.6.11 and convertible bonds are further described in Note 7.6.14.3.
\n
The reconciliation for the year ended December 31, 2021 is as follows:
\n
In millions of U.S. dollars
\n
Interest-
\n
bearing
\n
loans and
\n
borrowings
\n
Other
\n
non-
\n
current
\n
financial
\n
liabilities*
\n
Interest-
\n
bearing
\n
loans and
\n
borrowings
\n
\u2013
current
\n
portion
\n
Other
\n
current
\n
financial
\n
liabilities**
Total
\n
December 31, 2020
1,821
482
796
730
3,829
\n
Cash flows
775
(10
)
(1,384
)
(54
)
(673
)
\n
Non-cash changes:
\n
New leases
\u2014
80
\u2014
\u2014
80
\n
Settlement
\u2014
\u2014
573
(744
)
(171
)
\n
Accreted finance costs
23
\u2014
13
\u2014
36
\n
Fair value changes
\u2014
197
\u2014
68
265
\n
Reclassification
(153
)
(55
)
153
55
\u2014
\n
Foreign currency translation
(75
)
(9
)
(8
)
\u2014
(92
)
\n
December 31, 2021
2,391
685
143
55
3,274
\n
* \u201dOther non-current financial liabilities\u201d and \u201cOther current financial liabilities\u201d reported above do not include deferred and contingent
\n
consideration, as they relate to business acquisitions.
\n
** \u201dOther current financial liabilities\u201d reported above correspond to the current portion of the lease liability for an amount of $55 million.
\n
Derivatives are not reported in the above table as they relate to operating activities. Lease financial liabilities are further described in Note 7.6.11
\nand convertible bonds are further described in Note 7.6.14.3",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13460": {
"value": "
7.6.14.4.
Hedging activities and derivatives
\n
Derivative instruments not designated as hedge
\n
The Group conducts its business on a global basis in various major international currencies. As a result, the Group is
\n
exposed to adverse movements in foreign currency exchange rates, primarily with respect to the Euro. Foreign
\n
exchange risk mainly arises from future commercial transactions and recognized assets and liabilities at the Group\u2019s
\n
subsidiaries. The Group enters into currency forward contracts to reduce its exposure to changes in exchange rates
\n
and the associated risk arising from the denomination of certain assets and liabilities in foreign currencies at the
\n
Group\u2019s subsidiaries. These instruments do not qualify as hedging instruments and are marked-to-market at each
\n
period-end with the associated changes in fair value recognized in \u201cOther income\u201d or \u201cOther expenses\u201d of the
\n
consolidated income statement.
\n
To reduce its exposure to U.S. dollar exchange rate fluctuations, the Group also hedges certain Euro-denominated
\n
forecasted transactions that cover at reporting date a large part of its R&D and SG&A expenses through the use of
\n
currency forward contracts and currency options, including collars. These instruments do not qualify as hedging
\n
instruments and are marked-to-market at each period-end with the associated changes in fair value recognized in
\n
\u201cOther income\u201d or \u201cOther expenses\u201d of the consolidated income statement.
\n
The notional amount of these financial instruments amounted to $2,041 million in 2022 (2021: $1,244 million). The
\n
principal currencies covered at the end of the year 2022 are the Euro, the Singapore dollar, the Japanese yen, the
\n
China Yuan Renminbi, the Indian rupee, the Swiss franc, the Moroccan dirham, the Malaysian ringgit, the Philippines
\n
peso, the Taiwan dollar, the South Korean won and the Swedish krona.
\n
Foreign currency forward contracts and currency options, including collars, not designated as cash flow hedge
\n
outstanding as of December 31, 2022 had remaining terms of 4 days to 20 months, maturing on average after 144
\n
days.
\n
Foreign currency forward contracts and currency options, including collars, not designated as cash flow hedge
\n
outstanding as of December 31, 2021 had remaining terms of 4 days to 13 months, maturing on average after 106
\n
days.
\n
Derivative instruments designated as cash flow hedge
\n
To reduce its exposure to U.S. dollar exchange rate fluctuations, the Group hedges certain Euro-denominated
\n
forecasted transactions that cover at reporting date a portion of its front-end manufacturing costs of semi-finished
\n
goods through the use of currency forward contracts and currency options, including collars. The Group also hedges
\n
certain manufacturing transactions denominated in Singapore dollars.
\n
The principles regulating the hedging strategy for derivatives designated as cash flow hedge is to hedge up to 70%
\n
of the total forecasted transactions of the following quarter for these manufacturing costs. In order to follow a
\n
dynamic hedge strategy, the Group may change the percentage of the designated hedged item within the limit of
\n
100% of the forecasted transaction. The maximum length of time over which the Group could hedge its exposure to
\n
the variability of cash flows for forecasted transactions is 24 months.
These derivative instruments are designated and qualified as cash flow hedges. Hedge effectiveness is determined
\n
at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure
\n
that an economic relationship exists between the hedged item and the hedging instrument. The Group enters into
\n
hedge relationships where the critical terms of the hedging instrument match with the terms of the hedged item,
\n
which ensures a 1:1 hedge ratio on a monthly basis. The Group therefore performs a qualitative assessment of
\n
effectiveness. If changes in circumstances affect the terms of the hedged item such that the critical terms no longer
\n
match with the critical term of the hedging instrument, the Group uses the hypothetical derivative method to assess
\n
effectiveness. Ineffectiveness may arise if the timing of the forecast transaction changes from what was originally
\n
estimated, which cannot occur as the Group designates as hedged items forecasted intercompany transactions
\n
denominated in foreign currency over which the Group has full oversight, control, and visibility. Ineffectiveness may
\n
arise only if there are changes in the credit risk of the counterparty.
\n
The derivative instruments designated as cash flow hedges are reflected at fair value in the consolidated statement
\n
of financial position. The unrealized gain or loss from the effective portion of the hedge is reported in other
\n
comprehensive income and is reclassified into earnings in the same period in which the hedged transaction affects
\n
earnings, and within the same consolidated income statement line item as the impact of the hedged transaction.
\n
For the year ended December 31, 2022, the Group recorded an increase in cost of sales of $129 million (2021:
\n
decrease of $15 million) related to the realized loss incurred on such hedged transactions. No significant ineffective
\n
portion of the hedge was recorded on the lines \u201cOther income\u201d or \u201cOther expenses\u201d for the years ended
\n
December 31, 2022 and 2021.
\n
The notional amount of foreign currency forward contracts and currency options, including collars, designated as
\n
cash flow hedge amounted to $2,081 million (2021: $1,425 million). The forecasted transactions hedged at
\n
December 31, 2022 were determined to be highly probable of occurring.
\n
As of December 31, 2022, the amount of net deferred gains on derivative instruments included in the cash flow
\n
hedge reserve in equity was $15 million (2021: net deferred losses of $22 million), of which $10 million were
\n
expected to be reclassified as earnings during the next 12 months based on the monthly forecasted semi-finished
\n
manufacturing costs.
\n
Foreign currency forward contracts and currency options, including collars, designated as cash flow hedge
\n
outstanding as of December 31, 2022, had remaining terms of 4 days to 19 months, maturing on average after 228
\n
days.
\n
Foreign currency forward contracts and currency options, including collars, designated as cash flow hedge
\n
outstanding as of December 31, 2021, had remaining terms of 5 days to 13 months, maturing on average after 140
\n
days.
\n
As of December 31, 2022, the Group had the following outstanding derivative instruments that were entered into
\n
to hedge Euro-denominated and Singapore-Dollar-denominated forecasted transactions:
\n
Notional amount for hedge on
\n
forecasted manufacturing costs
\n
transactions
\n
In millions of
\n
Euros
\n
In millions of
\n
Singapore Dollars
\n
Forward contracts
986
247
\n
Currency collars
791
\u2014
As of December 31, 2021, the Group had the following outstanding derivative instruments that were entered into
\n
to hedge Euro-denominated and Singapore-Dollar-denominated forecasted transactions:
\n
Notional amount for hedge on
\n
forecasted manufacturing costs
\n
transactions
\n
In millions of
\n
Euros
\n
In millions of
\n
Singapore Dollars
\n
Forward contracts
604
214
\n
Currency collars
514
\u2014
\n
Cash flow and fair value interest rate risk
\n
The Group\u2019s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the
\n
Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate
\n
risk.
\n
The Group analyzes its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into
\n
consideration refinancing, renewal of existing positions, alternative financing and hedging. The Group invests
\n
primarily on a short-term basis and as such its liquidity is invested in floating interest rate instruments. As a
\n
consequence, the Group is exposed to interest rate risk due to potential mismatch between the return on its short-
\n
term floating interest rate investments and the portion of its long-term debt issued at fixed rate.
\n
Other market risk
\n
As part of its ongoing investing activities, the Group may invest in publicly traded equity securities and be exposed
\n
to equity security price. In order to hedge the exposure to this market risk, the Group may enter into certain
\n
derivative hedging transactions.
\n
Credit risk and the Group\u2019s impairment policies on financial assets are further described in Note 7.6.7.13 and Note
\n
7.6.35.
\n
Offsetting financial assets and financial liabilities
\n
The Group entered into currency collars as combinations of two options, which are reported, for accounting
\n
purposes, on a net basis.
As of December 31, 2022, the fair value of these collars represented assets for a net amount
\n
of $15 million (composed of $19 million assets offset with a $4 million liability) and liabilities for a net amount of $10
\n
million (composed of $15 million liabilities offset with a $5 million asset).
In addition, the Group entered into other
\n
derivative instruments, primarily forward contracts, which are governed by standard International Swaps and
\n
Derivatives Association (\u201cISDA\u201d) agreements and are compliant with Protocols of the European Market
\n
Infrastructure Regulation (\u201cEMIR\u201d), which are not offset in the statement of financial position and representing total
\n
assets of $54 million and liabilities of $29 million as of December 31, 2022.
\n
Risk management policies relating to credit risk exposure to derivatives counterparties is further described in Note
\n
7.6.35.
Market risk
\n
Foreign exchange risk
\n
The Group conducts its business on a global basis in various major international currencies. As a result, the Group is
\n
exposed to adverse movements in foreign currency exchange rates, primarily with respect to the Euro. Foreign
\n
exchange risk mainly arises from future commercial transactions and recognized assets and liabilities at the
\n
Company\u2019s subsidiaries.
\n
Management has set up a policy to require subsidiaries to hedge their entire foreign exchange risk exposure with
\n
the Group through financial instruments transacted or overseen by Corporate Treasury. To manage their foreign
\n
exchange risk arising from foreign-currency-denominated assets and liabilities, subsidiaries use forward contracts
\n
and purchased currency options. Foreign exchange risk arises when recognized assets and liabilities are denominated
\n
in a currency that is not the entity\u2019s functional currency. These instruments do not qualify as hedging instruments
\n
for accounting purposes. Forward contracts and currency options, including collars, are also used by the Group to
\n
reduce its exposure to U.S. dollar fluctuations in Euro-denominated forecasted intercompany transactions that cover
\n
a large part of its R&D, selling general and administrative expenses as well as a portion of its front-end manufacturing
\n
production costs of semi-finished goods. The Group also hedges using currency forward contracts certain Singapore
\n
dollar-denominated manufacturing forecasted transactions. The derivative instruments used to hedge the
\n
forecasted transactions relating to front-end manufacturing production costs meet the criteria for designation as
\n
cash flow hedge. The hedged forecasted transactions have a high probability of occurring for hedge accounting
\n
purposes.
\n
It is the Group\u2019s policy to keep the foreign exchange exposures in all the currencies hedged month by month against
\n
the monthly standard rate. At each month end, the forecasted flows for the coming month are hedged together with
\n
the fixing of the new standard rate. For this reason, the hedging transactions will have an exchange rate very close
\n
to the standard rate at which the forecasted flows will be recorded on the following month. As such, the foreign
\n
exchange exposure of the Group, which consists in the balance sheet positions and other contractually agreed
\n
transactions, is always close to zero and any movement in the foreign exchange rates will not therefore influence
\n
the exchange effect on items of the consolidated income statement. Any discrepancy from the forecasted values
\n
and the actual results is constantly monitored and prompt actions are taken, if needed.
\n
The hedging activity of the Group and the impact on the financial statements is described in detail in Note 7.6.14.4.
\n
The following sensitivity analysis was based on recognized assets and liabilities, including non-monetary items, of
\n
the Company and its subsidiaries. Equity would have been approximately $81 million higher/lower (2021: $54 million
\n
higher/lower) if the Euro strengthened/weakened by 300 basis points against the U.S. dollar, arising mainly from
\n
translation of net assets from subsidiaries whose functional currency is the Euro.
\n
As of December 31, 2022 if the Euro/U.S. dollar exchange rate had strengthened by 300 basis points with all other
\n
variables held constant, net result for the year would have been $73 million higher (2021: $45 million higher), mainly
\n
as a result of foreign exchange gains on outstanding derivative instruments. If the Euro/U.S. dollar exchange rate
\n
had weakened by 300 basis points with all other variables held constant, impact in net income would have been $72
\n
million lower (2021: $50 million lower), mainly due to foreign exchange losses on outstanding derivative
\n
instruments.
\n
Cash flow and fair value interest rate risk
\n
The Group\u2019s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the
\n
Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate
\n
risk.
\n
The Group analyzes its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into
\n
consideration refinancing, renewal of existing positions, alternative financing and hedging. The Group invests
\n
primarily on a short-term basis and as such its liquidity is invested in floating interest rate instruments. As a
\n
consequence, the Group is exposed to interest rate risk due to potential mismatch between the return on its short-
\n
term floating interest rate investments and the portion of its long-term debt issued at fixed rate.
As of December 31, 2022 and 2021, if interest rates had been 20 basis points higher/lower with all other variables
\n
held constant, net income for the year would have been $2 million and $1 million higher/lower respectively, mainly
\n
as a result of a high level of liquid assets in relation to debt, with no material impact on equity.
\n
During 2022 and 2021, the Group\u2019s borrowings at variable rate were denominated in Euros and in U.S. dollars.
\n
Price risk
\n
As part of its on-going investing activities, the Group may be exposed to quoted security price risk for investments
\n
measured at fair value, as described in Note 7.6.14.1. The Group did not hold as of December 31, 2022 and 2021 any
\n
significant investments in quoted equity securities.
\n
The measurement for accounting purposes of the embedded derivative instruments of the senior unsecured
\n
convertible bonds issued on August 4, 2020 is dependent on various factors including the performance of
\n
STMicroelectronics ordinary shares. With respect to the valuation of the embedded issuer\u2019s call options as of
\n
December 31, 2022, if the price of the Company\u2019s ordinary shares, as measured on the New York Stock Exchange,
\n
with other valuation inputs remaining equal, increases by 10%, the value of the embedded call options would
\n
increase by $6 million (2021: increase of $2 million), whereas for a decrease of 10% in the share price, the value of
\n
the embedded call options would decrease by $6 million (2021: decrease of $4 million). With respect to the valuation
\n
of the embedded bondholders\u2019 conversion options as of December 31, 2022, if the price of the Company\u2019s ordinary
\n
shares, as measured on the New York stock exchange, with other valuation inputs remaining equal, increases by
\n
10%, the value of the embedded conversion options would increase by $71 million (2021: increase of $126 million),
\n
whereas for a decrease of 10% in the share price, the value of the embedded conversion options would decrease by
\n
$65 million (2021: decrease of $108 million). Details of the sensitivity of the other valuation factors, more specifically
\n
implied volatility, are presented in Note 7.6.14.5.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfMarketRiskExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13462": {
"value": "7.6.14.4.
Hedging activities and derivatives
\n
Derivative instruments not designated as hedge
\n
The Group conducts its business on a global basis in various major international currencies. As a result, the Group is
\n
exposed to adverse movements in foreign currency exchange rates, primarily with respect to the Euro. Foreign
\n
exchange risk mainly arises from future commercial transactions and recognized assets and liabilities at the Group\u2019s
\n
subsidiaries. The Group enters into currency forward contracts to reduce its exposure to changes in exchange rates
\n
and the associated risk arising from the denomination of certain assets and liabilities in foreign currencies at the
\n
Group\u2019s subsidiaries. These instruments do not qualify as hedging instruments and are marked-to-market at each
\n
period-end with the associated changes in fair value recognized in \u201cOther income\u201d or \u201cOther expenses\u201d of the
\n
consolidated income statement.
\n
To reduce its exposure to U.S. dollar exchange rate fluctuations, the Group also hedges certain Euro-denominated
\n
forecasted transactions that cover at reporting date a large part of its R&D and SG&A expenses through the use of
\n
currency forward contracts and currency options, including collars. These instruments do not qualify as hedging
\n
instruments and are marked-to-market at each period-end with the associated changes in fair value recognized in
\n
\u201cOther income\u201d or \u201cOther expenses\u201d of the consolidated income statement.
\n
The notional amount of these financial instruments amounted to $2,041 million in 2022 (2021: $1,244 million). The
\n
principal currencies covered at the end of the year 2022 are the Euro, the Singapore dollar, the Japanese yen, the
\n
China Yuan Renminbi, the Indian rupee, the Swiss franc, the Moroccan dirham, the Malaysian ringgit, the Philippines
\n
peso, the Taiwan dollar, the South Korean won and the Swedish krona.
\n
Foreign currency forward contracts and currency options, including collars, not designated as cash flow hedge
\n
outstanding as of December 31, 2022 had remaining terms of 4 days to 20 months, maturing on average after 144
\n
days.
\n
Foreign currency forward contracts and currency options, including collars, not designated as cash flow hedge
\n
outstanding as of December 31, 2021 had remaining terms of 4 days to 13 months, maturing on average after 106
\n
days.
\n
Derivative instruments designated as cash flow hedge
\n
To reduce its exposure to U.S. dollar exchange rate fluctuations, the Group hedges certain Euro-denominated
\n
forecasted transactions that cover at reporting date a portion of its front-end manufacturing costs of semi-finished
\n
goods through the use of currency forward contracts and currency options, including collars. The Group also hedges
\n
certain manufacturing transactions denominated in Singapore dollars.
\n
The principles regulating the hedging strategy for derivatives designated as cash flow hedge is to hedge up to 70%
\n
of the total forecasted transactions of the following quarter for these manufacturing costs. In order to follow a
\n
dynamic hedge strategy, the Group may change the percentage of the designated hedged item within the limit of
\n
100% of the forecasted transaction. The maximum length of time over which the Group could hedge its exposure to
\n
the variability of cash flows for forecasted transactions is 24 months.
\n
These derivative instruments are designated and qualified as cash flow hedges. Hedge effectiveness is determined
\n
at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure
\n
that an economic relationship exists between the hedged item and the hedging instrument. The Group enters into
\n
hedge relationships where the critical terms of the hedging instrument match with the terms of the hedged item,
\n
which ensures a 1:1 hedge ratio on a monthly basis. The Group therefore performs a qualitative assessment of
\n
effectiveness. If changes in circumstances affect the terms of the hedged item such that the critical terms no longer
\n
match with the critical term of the hedging instrument, the Group uses the hypothetical derivative method to assess
\n
effectiveness. Ineffectiveness may arise if the timing of the forecast transaction changes from what was originally
\n
estimated, which cannot occur as the Group designates as hedged items forecasted intercompany transactions
\n
denominated in foreign currency over which the Group has full oversight, control, and visibility. Ineffectiveness may
\n
arise only if there are changes in the credit risk of the counterparty.
\n
The derivative instruments designated as cash flow hedges are reflected at fair value in the consolidated statement
\n
of financial position. The unrealized gain or loss from the effective portion of the hedge is reported in other
\n
comprehensive income and is reclassified into earnings in the same period in which the hedged transaction affects
\n
earnings, and within the same consolidated income statement line item as the impact of the hedged transaction.
\n
For the year ended December 31, 2022, the Group recorded an increase in cost of sales of $129 million (2021:
\n
decrease of $15 million) related to the realized loss incurred on such hedged transactions. No significant ineffective
\n
portion of the hedge was recorded on the lines \u201cOther income\u201d or \u201cOther expenses\u201d for the years ended
\n
December 31, 2022 and 2021.
\n
The notional amount of foreign currency forward contracts and currency options, including collars, designated as
\n
cash flow hedge amounted to $2,081 million (2021: $1,425 million). The forecasted transactions hedged at
\n
December 31, 2022 were determined to be highly probable of occurring.
\n
As of December 31, 2022, the amount of net deferred gains on derivative instruments included in the cash flow
\n
hedge reserve in equity was $15 million (2021: net deferred losses of $22 million), of which $10 million were
\n
expected to be reclassified as earnings during the next 12 months based on the monthly forecasted semi-finished
\n
manufacturing costs.
\n
Foreign currency forward contracts and currency options, including collars, designated as cash flow hedge
\n
outstanding as of December 31, 2022, had remaining terms of 4 days to 19 months, maturing on average after 228
\n
days.
\n
Foreign currency forward contracts and currency options, including collars, designated as cash flow hedge
\n
outstanding as of December 31, 2021, had remaining terms of 5 days to 13 months, maturing on average after 140
\n
days.
\n
As of December 31, 2022, the Group had the following outstanding derivative instruments that were entered into
\n
to hedge Euro-denominated and Singapore-Dollar-denominated forecasted transactions:
\n
Notional amount for hedge on
\n
forecasted manufacturing costs
\n
transactions
\n
In millions of
\n
Euros
\n
In millions of
\n
Singapore Dollars
\n
Forward contracts
986
247
\n
Currency collars
791
\u2014
\n
As of December 31, 2021, the Group had the following outstanding derivative instruments that were entered into
\n
to hedge Euro-denominated and Singapore-Dollar-denominated forecasted transactions:
\n
Notional amount for hedge on
\n
forecasted manufacturing costs
\n
transactions
\n
In millions of
\n
Euros
\n
In millions of
\n
Singapore Dollars
\n
Forward contracts
604
214
\n
Currency collars
514
\u2014
\n
Cash flow and fair value interest rate risk
\n
The Group\u2019s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the
\n
Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate
\n
risk.
\n
The Group analyzes its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into
\n
consideration refinancing, renewal of existing positions, alternative financing and hedging. The Group invests
\n
primarily on a short-term basis and as such its liquidity is invested in floating interest rate instruments. As a
\n
consequence, the Group is exposed to interest rate risk due to potential mismatch between the return on its short-
\n
term floating interest rate investments and the portion of its long-term debt issued at fixed rate.
\n
Other market risk
\n
As part of its ongoing investing activities, the Group may invest in publicly traded equity securities and be exposed
\n
to equity security price. In order to hedge the exposure to this market risk, the Group may enter into certain
\n
derivative hedging transactions.
\n
Credit risk and the Group\u2019s impairment policies on financial assets are further described in Note 7.6.7.13 and Note
\n7.6.35.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13634": {
"value": "
7.6.14.5.
Fair values
\n
Set out below is a comparison by class of the carrying amounts and fair value of the Group\u2019s financial instruments
\n
that are carried in the consolidated financial statements.
\n
Carrying amount
Fair value
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Financial assets
\n
Short-term deposits
581
291
581
291
\n
Trade accounts receivable
1,970
1,759
1,970
1,759
\n
Other receivables and assets
678
575
678
575
\n
Quoted financial instruments
705
29
705
29
\n
Unquoted equity securities
10
10
10
10
\n
Embedded call option - Senior unsecured
\n
convertible bonds issued on August 4, 2020
\n
(Tranche A)
13
11
13
11
\n
Embedded call option - Senior unsecured
\n
convertible bonds issued on August 4, 2020
\n
(Tranche B)
20
15
20
15
\n
Other financial assets
69
6
69
6
\n
Cash equivalents
\n
(1)
\n
2,996
2,883
2,996
2,883
\n
Financial liabilities
\n
Interest-bearing loans and borrowings
\n
(excluding senior unsecured convertible
\n
bonds)
1,165
1,152
1,165
1,152
\n
Senior unsecured convertible bonds issued
\n
on August 4, 2020
\n
(2)
\n
1,407
1,382
1,561
1,975
\n
Embedded conversion option - Senior
\n
unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche A)
\n
(2)
\n
110
255
\u2014
\u2014
\n
Embedded conversion option - Senior
\n
unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche B)
\n
(2)
\n
151
282
\u2014
\u2014
\n
Deferred consideration on business
\n
acquisitions
\u2014
19
\u2014
19
\n
Contingent consideration on business
\n
acquisitions
31
77
31
77
\n
Trade accounts payable
2,122
1,582
2,122
1,582
\n
Other payables and accrued liabilities
511
266
511
266
\n
Other financial liabilities
39
43
39
43
\n
(1)
Cash equivalents primarily correspond to deposits at call with banks.
\n
(2)
The carrying amount of the senior unsecured convertible bonds issued on August 4, 2020 and outstanding at December 31, 2022 and
\n
December 31, 2021 corresponds to the liability component only, since, at initial recognition, an amount of $219 million was separately
\n
recognized as embedded derivative financial instruments.
\n
The fair value of financial assets and liabilities are included at the price at which the instrument could be sold in an
\n
orderly transaction between market participants at the measurement date. The following methods and assumptions
\n
were used to estimate fair value:
\n
\u2022
For trade accounts receivable, cash equivalents, short-term deposits, trade accounts payable, other
\n
payables and accrued liabilities, the carrying amounts reflected in the consolidated financial statements
\n
are reasonable estimates of fair value due to the relatively short period of time between the origination
\n
of the instruments and their expected realization.
\n
\u2022
Other receivables and assets approximate their carrying amounts due either to their short-term maturities
\n
or to the fact that they are recorded at their net present value.
\n
\u2022
Financial investments (debt and equity securities):
\n
-
The fair value quoted debt and equity securities is determined based upon quoted market prices for
\n
identical instruments.
\n
-
The fair value of unquoted equity securities is based on the valuation of the underlying instruments
\n
on a new round of third-party financing or upon liquidation.
\n
\u2022
The fair value of interest-bearing loans and borrowings, including lease liabilities but excluding senior
\n
unsecured convertible bonds, is determined by estimating future cash flows on a borrowing-by-borrowing
\n
basis and discounting these future cash flows using the Group\u2019s incremental borrowing rates for similar
\n
types of arrangements.
\n
\u2022
The senior unsecured convertible bonds issued on August 4, 2020, and outstanding as of December 31,
\n
2022, and December 31, 2021, have been trading on the open market segment on the Frankfurt Stock
\n
Exchange since issuance. The fair value of these instruments is the observable price of the bonds on that
\n
market.
\n
\u2022
The fair value of derivatives instruments is determined based upon quoted market prices for similar
\n
instruments.
\n
\u2022
The bondholders\u2019 conversion option and the issuer\u2019s soft call embedded in the senior unsecured
\n
convertible bonds are measured at fair value based on the income approach using Bloomberg\u2019s option
\n
pricing model, which can be assimilated to a Black & Scholes model for pricing stock options. This model
\n
was elected as the best indication of fair value since it maximized the use of observable market-based
\n
inputs.
\n
Fair value hierarchy
\n
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by
\n
valuation technique:
\n
\u2022
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
\n
\u2022
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are
\n
observable, either directly or indirectly.
\n
\u2022
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are
\n
not based on observable market data.
\n
As of December 31, 2022, the Group held the following assets and liabilities measured at fair value:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
Level 1
Level 2
Level 3
\n
Assets measured at fair value
\n
Financial assets at FVPL
\n
Trading derivatives
\n
Foreign exchange forward contracts
25
\u2014
25
\u2014
\n
Currency collars
6
\u2014
6
\u2014
\n
Quoted equity securities at FVPL
12
12
\u2014
\u2014
\n
Other trading financial assets at FVPL
14
14
\u2014
\u2014
\n
Embedded call options
33
\u2014
\u2014
33
\n
Cash flow hedges
\n
Foreign exchange forward contracts
30
\u2014
30
\u2014
\n
Currency collars
8
\u2014
8
\u2014
\n
Quoted debt securities measured at FVOCI
\n
Government bonds issued by the U.S. Treasury
679
679
\u2014
\u2014
\n
Unquoted equity securities measured at FVOCI
10
\u2014
\u2014
10
\n
Short-term deposits
581
581
\u2014
\u2014
\n
Total assets
1,398
1,286
69
43
\n
Liabilities measured at fair value
\n
Derivative instruments
\n
Foreign exchange forward contracts
12
\u2014
12
\u2014
\n
Currency collars
4
\u2014
4
\u2014
\n
Cash flow hedges
\n
Foreign exchange forward contracts
17
\u2014
17
\u2014
\n
Currency collars
6
\u2014
6
\u2014
\n
Embedded conversion options
261
\u2014
\u2014
261
\n
Contingent consideration on business acquisitions
31
\u2014
\u2014
31
\n
Total liabilities
331
\u2014
39
292
\n
During the reporting period ending December 31, 2022, there was no transfer between Level 1 and Level 2 fair value
\n
measurements, and no transfer into and out of Level 3 fair value measurements.
\n
As of December 31, 2021, the Group held the following assets and liabilities measured at fair value:
\n
In millions of U.S. dollars
\n
December
31,
\n
2021
Level 1
Level 2
Level 3
\n
Assets measured at fair value
\n
Financial assets at FVPL
\n
Trading derivatives
\n
Foreign exchange forward contracts
3
\u2014
3
\u2014
\n
Quoted equity securities at FVPL
13
13
\u2014
\u2014
\n
Other trading financial assets at FVPL
16
16
\u2014
\u2014
\n
Embedded call options
26
\u2014
\u2014
26
\n
Cash flow hedges
\n
Foreign exchange forward contracts
2
\u2014
2
\u2014
\n
Currency collars
1
\u2014
1
\u2014
\n
Unquoted equity securities measured at FVOCI
10
\u2014
\u2014
10
\n
Short-term deposits
291
291
\u2014
\u2014
\n
Total assets
362
320
6
36
\n
Liabilities measured at fair value
\n
Derivative instruments
\n
Foreign exchange forward contracts
12
\u2014
12
\u2014
\n
Currency collars
6
\u2014
6
\u2014
\n
Cash flow hedges
\u2014
\n
Foreign exchange forward contracts
18
\u2014
18
\u2014
\n
Currency collars
7
\u2014
7
\u2014
\n
Embedded conversion options
537
\u2014
\u2014
537
\n
Contingent consideration on business acquisitions
77
\u2014
\u2014
77
\n
Total liabilities
657
\u2014
43
614
\n
During the reporting period ending December 31, 2021, there was no transfer between Level 1 and Level 2 fair value
\n
measurements, and no transfer into and out of Level 3 fair value measurements.
\n
Financial instruments in Level 1
\n
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet
\n
date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer,
\n
broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly
\n
occurring market transactions on an arm\u2019s length basis. The quoted market price used for financial assets held by
\n
the Group is the current bid price. These instruments are included in Level 1.
\n
Financial instruments in Level 2
\n
The fair value of financial instruments that are not traded in active markets (for example over the counter
\n
derivatives) is determined by using valuation techniques. These valuation techniques maximize the use of observable
\n
market data when available and rely as little as possible on entity\u2019s specific estimates. If all significant inputs required
\n
to fair value an instrument are observable, the instrument is included in Level 2. If one or more of the significant
\n
inputs is not based on observable market data, the instrument is included in Level 3. Specific valuation techniques
\n
used to value financial instruments include:
\n
\u2022
Quoted market prices or dealer\u2019s quotes for similar instruments; and
\n
\u2022
The fair value of foreign exchange forward contracts when determined using forward exchange rates at
\n
the balance sheet date, with the resulting value discounted back to present value.
\n
Financial instruments in Level 3
\n
For financial assets (liabilities) measured at fair value using significant unobservable inputs (Level 3), the
\n
reconciliation between January 1, 2022 and December 31, 2022 is presented as follows:
\n
In millions of U.S. dollars
\n
Fair value measurements using
\n
significant unobservable inputs (Level 3)
\n
As of January 1, 2022
(578
)
\n
Change in fair value of the embedded conversion option of the
\n
senior unsecured convertible bonds issued on August 4, 2020
\n
(Tranche A and Tranche B)
276
\n
Change in fair value of the embedded call option of the senior
\n
unsecured convertible bonds issued on August 4, 2020 (Tranche A
\n
and Tranche B)
7
\n
Change in fair value of the contingent consideration on business
\n
acquisitions
35
\n
Currency translation adjustment
4
\n
Payment of contingent consideration
7
\n
As of December 31, 2022
(249
)
\n
Amount of net gains included in the 2022 income statement
\n
attributable to assets (liabilities) still held at the reporting date
318
\n
The following table shows the impact on the income statement of the valuation of the embedded derivative
\n
instruments outstanding as of December 31, 2022:
\n
In millions of U.S. dollars
\n
Asset (liability) value as of December 31, 2021
(511
)
\n
Gains (losses) recognized in the consolidated income statement
283
\n
Asset (liability) value as of December 31, 2022
(228
)
\n
Contingent consideration reported as liabilities on the consolidated statement of financial position as of December
\n
31, 2022 and December 31, 2021 is based on the probability that the milestones defining the variable components
\n
of the consideration will be achieved. In 2022, the probability of achievement of these variable components was
\n
reassessed, resulting in a reduction of $35 million of the fair value of the contingent consideration related to the
\n
2020 acquisitions. The Group reported this change in fair value in the lines \u201cResearch and development\u201d and \u201cCost
\n
of sales\u201d of the consolidated statement of income, for $33 million and $2 million, respectively.
\n
The change in fair value amounting to $276 million on the embedded bondholders\u2019 conversion options was reported
\n
as \u201cFinance income\u201d in the consolidated income statement ended December 31, 2022. The change in fair value
\n
amounting to $7 million on the embedded issuer\u2019s call options was reported as \u201cFinance income\u201d in the consolidated
\n
income statement ended December 31, 2022.
\n
The model used to price the derivative instruments embedded in the senior unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche A and Tranche B) included the following inputs:
\n
\u2022
The risk-free interest rate for comparable maturities;
\n
\u2022
The reference price for the Company\u2019s ordinary shares as traded on the New York Stock Exchange;
\n
\u2022
The exercise price;
\n
\u2022
The dividend expected to be paid on the Company\u2019s ordinary shares over the life of the option;
\n
\u2022
The volatility of the Company\u2019s ordinary shares; and
\n
\u2022
The duration of the option.
\n
Sensitivity to the share price variations is further described in Note 7.6.35. Implied volatility should be considered
\n
an unobservable input due to the lack of market data (stock exchange listing of the bond option) for a time horizon
\n
equal to the duration of the option. The figure is, therefore, an assumption based on the volatility implied by the
\n
price of the financial instrument, as negotiated at the issue stage, and market volatility for the nearest time horizon.
\n
The prices of the bondholders\u2019 conversion options are sensitive to implied volatility. The table below shows a
\n
sensitivity analysis of the net carrying amount of the embedded conversion options in relation to a series of changes
\n
expressed in percentage point terms of volatility.
\n
Change in volatility of the Company
\u2019
s ordinary
\n
shares
-10 p.p.
- 8 p.p.
-5 p.p.
+5 p.p.
+8 p.p.
+10 p.p.
\n
Change in the net carrying amount of the
\n
bondholders
\u2019
conversion options
(89
)
(71
)
(44
)
43
69
85
\n
Net carrying amount of the embedded
\n
conversion
\n
options
172
190
217
304
330
346
\n
For financial assets (liabilities) measured at fair value using significant unobservable inputs (Level 3), the
\n
reconciliation between January 1, 2021 and December 31, 2021 is presented as follows:
\n
In millions of U.S. dollars
\n
Fair value measurements using
\n
significant unobservable inputs (Level
3)
\n
As of January 1, 2021
(1,035
)
\n
Change in fair value of the embedded conversion option of the
\n
senior unsecured convertible bonds issued on July 3, 2017
\n
(Tranche B)
(68
)
\n
Change in fair value of the embedded call option of the senior
\n
unsecured convertible bonds issued on July 3, 2017 (Tranche B)
(121
)
\n
Extinguishment of the embedded conversion option of the senior
\n
unsecured convertible bonds issued on July 3, 2017 (Tranche B)
744
\n
Extinguishment of the embedded call option of the senior
\n
unsecured convertible bonds issued on July 3, 2017 (Tranche B)
60
\n
Change in fair value of the embedded conversion option of the
\n
senior unsecured convertible bonds issued on August 4, 2020
\n
(Tranche A and Tranche B)
(197
)
\n
Change in fair value of the embedded call option of the senior
\n
unsecured convertible bonds issued on August 4, 2020 (Tranche A
\n
and Tranche B)
(6
)
\n
Change in fair value of the contingent consideration on business
\n
acquisitions
38
\n
Currency translation adjustment
8
\n
As of December 31, 2021
(577
)
\n
Amount of net losses included in the 2021 income statement
\n
attributable to assets (liabilities) still held at the reporting date
(165
)
\n
The following table shows the impact on the income statement of the valuation of the embedded derivative
\n
instruments outstanding as of December 31, 2021:
\n
In millions of U.S. dollars
\n
Asset (liability) value as of December 31, 2020
(922
)
\n
Settlement of Tranche B of the senior unsecured convertible
\n
bonds issued on July 3, 2017
804
\n
Gains (losses) recognized in the consolidated income statement
(393
)
\n
Asset (liability) value as of December 31, 2021
(511
)
\n
The change in fair value amounting to $265 million on the embedded bondholders\u2019 conversion option was reported
\n
as \u201cFinance costs\u201d in the consolidated income statement ended December 31, 2021. The change in fair value
\n
amounting to $127 million on the embedded issuer\u2019s call option was reported as \u201cFinance income\u201d in the
\nconsolidated income statement ended December 31, 2021.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13637": {
"value": "
7.6.14.5.
Fair values
The fair value of financial assets and liabilities are included at the price at which the instrument could be sold in an
\n
orderly transaction between market participants at the measurement date. The following methods and assumptions
\n
were used to estimate fair value:
\n
\u2022
For trade accounts receivable, cash equivalents, short-term deposits, trade accounts payable, other
\n
payables and accrued liabilities, the carrying amounts reflected in the consolidated financial statements
\n
are reasonable estimates of fair value due to the relatively short period of time between the origination
\n
of the instruments and their expected realization.
\n
\u2022
Other receivables and assets approximate their carrying amounts due either to their short-term maturities
\n
or to the fact that they are recorded at their net present value.
\n
\u2022
Financial investments (debt and equity securities):
\n
-
The fair value quoted debt and equity securities is determined based upon quoted market prices for
\n
identical instruments.
\n
-
The fair value of unquoted equity securities is based on the valuation of the underlying instruments
\n
on a new round of third-party financing or upon liquidation.
\n
\u2022
The fair value of interest-bearing loans and borrowings, including lease liabilities but excluding senior
\n
unsecured convertible bonds, is determined by estimating future cash flows on a borrowing-by-borrowing
\n
basis and discounting these future cash flows using the Group\u2019s incremental borrowing rates for similar
\n
types of arrangements.
\n
\u2022
The senior unsecured convertible bonds issued on August 4, 2020, and outstanding as of December 31,
\n
2022, and December 31, 2021, have been trading on the open market segment on the Frankfurt Stock
\n
Exchange since issuance. The fair value of these instruments is the observable price of the bonds on that
\n
market.
\n
\u2022
The fair value of derivatives instruments is determined based upon quoted market prices for similar
\n
instruments.
\n
\u2022
The bondholders\u2019 conversion option and the issuer\u2019s soft call embedded in the senior unsecured
\n
convertible bonds are measured at fair value based on the income approach using Bloomberg\u2019s option
\n
pricing model, which can be assimilated to a Black & Scholes model for pricing stock options. This model
\n
was elected as the best indication of fair value since it maximized the use of observable market-based
\n
inputs.
\n
Fair value hierarchy
\n
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by
\n
valuation technique:
\n
\u2022
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
\n
\u2022
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are
\n
observable, either directly or indirectly.
\n
\u2022
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are
\n
not based on observable market data.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13639": {
"value": "7.6.14.5.
Fair values
Set out below is a comparison by class of the carrying amounts and fair value of the Group\u2019s financial instruments
\n
that are carried in the consolidated financial statements.
\n
Carrying amount
Fair value
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Financial assets
\n
Short-term deposits
581
291
581
291
\n
Trade accounts receivable
1,970
1,759
1,970
1,759
\n
Other receivables and assets
678
575
678
575
\n
Quoted financial instruments
705
29
705
29
\n
Unquoted equity securities
10
10
10
10
\n
Embedded call option - Senior unsecured
\n
convertible bonds issued on August 4, 2020
\n
(Tranche A)
13
11
13
11
\n
Embedded call option - Senior unsecured
\n
convertible bonds issued on August 4, 2020
\n
(Tranche B)
20
15
20
15
\n
Other financial assets
69
6
69
6
\n
Cash equivalents
\n
(1)
\n
2,996
2,883
2,996
2,883
\n
Financial liabilities
\n
Interest-bearing loans and borrowings
\n
(excluding senior unsecured convertible
\n
bonds)
1,165
1,152
1,165
1,152
\n
Senior unsecured convertible bonds issued
\n
on August 4, 2020
\n
(2)
\n
1,407
1,382
1,561
1,975
\n
Embedded conversion option - Senior
\n
unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche A)
\n
(2)
\n
110
255
\u2014
\u2014
\n
Embedded conversion option - Senior
\n
unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche B)
\n
(2)
\n
151
282
\u2014
\u2014
\n
Deferred consideration on business
\n
acquisitions
\u2014
19
\u2014
19
\n
Contingent consideration on business
\n
acquisitions
31
77
31
77
\n
Trade accounts payable
2,122
1,582
2,122
1,582
\n
Other payables and accrued liabilities
511
266
511
266
\n
Other financial liabilities
39
43
39
43
\n
(1)
Cash equivalents primarily correspond to deposits at call with banks.
\n
(2)
The carrying amount of the senior unsecured convertible bonds issued on August 4, 2020 and outstanding at December 31, 2022 and
\n
December 31, 2021 corresponds to the liability component only, since, at initial recognition, an amount of $219 million was separately
\n
recognized as embedded derivative financial instruments.
\n
The fair value of financial assets and liabilities are included at the price at which the instrument could be sold in an
\n
orderly transaction between market participants at the measurement date. The following methods and assumptions
\n
were used to estimate fair value:
\n
\u2022
For trade accounts receivable, cash equivalents, short-term deposits, trade accounts payable, other
\n
payables and accrued liabilities, the carrying amounts reflected in the consolidated financial statements
\n
are reasonable estimates of fair value due to the relatively short period of time between the origination
\n
of the instruments and their expected realization.
\n
\u2022
Other receivables and assets approximate their carrying amounts due either to their short-term maturities
\n
or to the fact that they are recorded at their net present value.
\n
\u2022
Financial investments (debt and equity securities):
\n
-
The fair value quoted debt and equity securities is determined based upon quoted market prices for
\n
identical instruments.
\n
-
The fair value of unquoted equity securities is based on the valuation of the underlying instruments
\n
on a new round of third-party financing or upon liquidation.
\n
\u2022
The fair value of interest-bearing loans and borrowings, including lease liabilities but excluding senior
\n
unsecured convertible bonds, is determined by estimating future cash flows on a borrowing-by-borrowing
\n
basis and discounting these future cash flows using the Group\u2019s incremental borrowing rates for similar
\n
types of arrangements.
\n
\u2022
The senior unsecured convertible bonds issued on August 4, 2020, and outstanding as of December 31,
\n
2022, and December 31, 2021, have been trading on the open market segment on the Frankfurt Stock
\n
Exchange since issuance. The fair value of these instruments is the observable price of the bonds on that
\n
market.
\n
\u2022
The fair value of derivatives instruments is determined based upon quoted market prices for similar
\n
instruments.
\n
\u2022
The bondholders\u2019 conversion option and the issuer\u2019s soft call embedded in the senior unsecured
\n
convertible bonds are measured at fair value based on the income approach using Bloomberg\u2019s option
\n
pricing model, which can be assimilated to a Black & Scholes model for pricing stock options. This model
\n
was elected as the best indication of fair value since it maximized the use of observable market-based
\n
inputs.
\n
Fair value hierarchy
\n
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by
\n
valuation technique:
\n
\u2022
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
\n
\u2022
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are
\n
observable, either directly or indirectly.
\n
\u2022
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are
\n
not based on observable market data.
\n
As of December 31, 2022, the Group held the following assets and liabilities measured at fair value:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
Level 1
Level 2
Level 3
\n
Assets measured at fair value
\n
Financial assets at FVPL
\n
Trading derivatives
\n
Foreign exchange forward contracts
25
\u2014
25
\u2014
\n
Currency collars
6
\u2014
6
\u2014
\n
Quoted equity securities at FVPL
12
12
\u2014
\u2014
\n
Other trading financial assets at FVPL
14
14
\u2014
\u2014
\n
Embedded call options
33
\u2014
\u2014
33
\n
Cash flow hedges
\n
Foreign exchange forward contracts
30
\u2014
30
\u2014
\n
Currency collars
8
\u2014
8
\u2014
\n
Quoted debt securities measured at FVOCI
\n
Government bonds issued by the U.S. Treasury
679
679
\u2014
\u2014
\n
Unquoted equity securities measured at FVOCI
10
\u2014
\u2014
10
\n
Short-term deposits
581
581
\u2014
\u2014
\n
Total assets
1,398
1,286
69
43
\n
Liabilities measured at fair value
\n
Derivative instruments
\n
Foreign exchange forward contracts
12
\u2014
12
\u2014
\n
Currency collars
4
\u2014
4
\u2014
\n
Cash flow hedges
\n
Foreign exchange forward contracts
17
\u2014
17
\u2014
\n
Currency collars
6
\u2014
6
\u2014
\n
Embedded conversion options
261
\u2014
\u2014
261
\n
Contingent consideration on business acquisitions
31
\u2014
\u2014
31
\n
Total liabilities
331
\u2014
39
292
\n
During the reporting period ending December 31, 2022, there was no transfer between Level 1 and Level 2 fair value
\n
measurements, and no transfer into and out of Level 3 fair value measurements.
\n
As of December 31, 2021, the Group held the following assets and liabilities measured at fair value:
\n
In millions of U.S. dollars
\n
December
31,
\n
2021
Level 1
Level 2
Level 3
\n
Assets measured at fair value
\n
Financial assets at FVPL
\n
Trading derivatives
\n
Foreign exchange forward contracts
3
\u2014
3
\u2014
\n
Quoted equity securities at FVPL
13
13
\u2014
\u2014
\n
Other trading financial assets at FVPL
16
16
\u2014
\u2014
\n
Embedded call options
26
\u2014
\u2014
26
\n
Cash flow hedges
\n
Foreign exchange forward contracts
2
\u2014
2
\u2014
\n
Currency collars
1
\u2014
1
\u2014
\n
Unquoted equity securities measured at FVOCI
10
\u2014
\u2014
10
\n
Short-term deposits
291
291
\u2014
\u2014
\n
Total assets
362
320
6
36
\n
Liabilities measured at fair value
\n
Derivative instruments
\n
Foreign exchange forward contracts
12
\u2014
12
\u2014
\n
Currency collars
6
\u2014
6
\u2014
\n
Cash flow hedges
\u2014
\n
Foreign exchange forward contracts
18
\u2014
18
\u2014
\n
Currency collars
7
\u2014
7
\u2014
\n
Embedded conversion options
537
\u2014
\u2014
537
\n
Contingent consideration on business acquisitions
77
\u2014
\u2014
77
\n
Total liabilities
657
\u2014
43
614
\n
During the reporting period ending December 31, 2021, there was no transfer between Level 1 and Level 2 fair value
\n
measurements, and no transfer into and out of Level 3 fair value measurements.
\n
Financial instruments in Level 1
\n
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet
\n
date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer,
\n
broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly
\n
occurring market transactions on an arm\u2019s length basis. The quoted market price used for financial assets held by
\n
the Group is the current bid price. These instruments are included in Level 1.
\n
Financial instruments in Level 2
\n
The fair value of financial instruments that are not traded in active markets (for example over the counter
\n
derivatives) is determined by using valuation techniques. These valuation techniques maximize the use of observable
\n
market data when available and rely as little as possible on entity\u2019s specific estimates. If all significant inputs required
\n
to fair value an instrument are observable, the instrument is included in Level 2. If one or more of the significant
\n
inputs is not based on observable market data, the instrument is included in Level 3. Specific valuation techniques
\n
used to value financial instruments include:
\n
\u2022
Quoted market prices or dealer\u2019s quotes for similar instruments; and
\n
\u2022
The fair value of foreign exchange forward contracts when determined using forward exchange rates at
\n
the balance sheet date, with the resulting value discounted back to present value.
\n
Financial instruments in Level 3
\n
For financial assets (liabilities) measured at fair value using significant unobservable inputs (Level 3), the
\n
reconciliation between January 1, 2022 and December 31, 2022 is presented as follows:
\n
In millions of U.S. dollars
\n
Fair value measurements using
\n
significant unobservable inputs (Level 3)
\n
As of January 1, 2022
(578
)
\n
Change in fair value of the embedded conversion option of the
\n
senior unsecured convertible bonds issued on August 4, 2020
\n
(Tranche A and Tranche B)
276
\n
Change in fair value of the embedded call option of the senior
\n
unsecured convertible bonds issued on August 4, 2020 (Tranche A
\n
and Tranche B)
7
\n
Change in fair value of the contingent consideration on business
\n
acquisitions
35
\n
Currency translation adjustment
4
\n
Payment of contingent consideration
7
\n
As of December 31, 2022
(249
)
\n
Amount of net gains included in the 2022 income statement
\n
attributable to assets (liabilities) still held at the reporting date
318
\n
The following table shows the impact on the income statement of the valuation of the embedded derivative
\n
instruments outstanding as of December 31, 2022:
\n
In millions of U.S. dollars
\n
Asset (liability) value as of December 31, 2021
(511
)
\n
Gains (losses) recognized in the consolidated income statement
283
\n
Asset (liability) value as of December 31, 2022
(228
)
\n
Contingent consideration reported as liabilities on the consolidated statement of financial position as of December
\n
31, 2022 and December 31, 2021 is based on the probability that the milestones defining the variable components
\n
of the consideration will be achieved. In 2022, the probability of achievement of these variable components was
\n
reassessed, resulting in a reduction of $35 million of the fair value of the contingent consideration related to the
\n
2020 acquisitions. The Group reported this change in fair value in the lines \u201cResearch and development\u201d and \u201cCost
\n
of sales\u201d of the consolidated statement of income, for $33 million and $2 million, respectively.
\n
The change in fair value amounting to $276 million on the embedded bondholders\u2019 conversion options was reported
\n
as \u201cFinance income\u201d in the consolidated income statement ended December 31, 2022. The change in fair value
\n
amounting to $7 million on the embedded issuer\u2019s call options was reported as \u201cFinance income\u201d in the consolidated
\n
income statement ended December 31, 2022.
\n
The model used to price the derivative instruments embedded in the senior unsecured convertible bonds issued on
\n
August 4, 2020 (Tranche A and Tranche B) included the following inputs:
\n
\u2022
The risk-free interest rate for comparable maturities;
\n
\u2022
The reference price for the Company\u2019s ordinary shares as traded on the New York Stock Exchange;
\n
\u2022
The exercise price;
\n
\u2022
The dividend expected to be paid on the Company\u2019s ordinary shares over the life of the option;
\n
\u2022
The volatility of the Company\u2019s ordinary shares; and
\n
\u2022
The duration of the option.
\n
Sensitivity to the share price variations is further described in Note 7.6.35. Implied volatility should be considered
\n
an unobservable input due to the lack of market data (stock exchange listing of the bond option) for a time horizon
\n
equal to the duration of the option. The figure is, therefore, an assumption based on the volatility implied by the
\n
price of the financial instrument, as negotiated at the issue stage, and market volatility for the nearest time horizon.
\n
The prices of the bondholders\u2019 conversion options are sensitive to implied volatility. The table below shows a
\n
sensitivity analysis of the net carrying amount of the embedded conversion options in relation to a series of changes
\n
expressed in percentage point terms of volatility.
\n
Change in volatility of the Company
\u2019
s ordinary
\n
shares
-10 p.p.
- 8 p.p.
-5 p.p.
+5 p.p.
+8 p.p.
+10 p.p.
\n
Change in the net carrying amount of the
\n
bondholders
\u2019
conversion options
(89
)
(71
)
(44
)
43
69
85
\n
Net carrying amount of the embedded
\n
conversion
\n
options
172
190
217
304
330
346
\n
For financial assets (liabilities) measured at fair value using significant unobservable inputs (Level 3), the
\n
reconciliation between January 1, 2021 and December 31, 2021 is presented as follows:
\n
In millions of U.S. dollars
\n
Fair value measurements using
\n
significant unobservable inputs (Level
3)
\n
As of January 1, 2021
(1,035
)
\n
Change in fair value of the embedded conversion option of the
\n
senior unsecured convertible bonds issued on July 3, 2017
\n
(Tranche B)
(68
)
\n
Change in fair value of the embedded call option of the senior
\n
unsecured convertible bonds issued on July 3, 2017 (Tranche B)
(121
)
\n
Extinguishment of the embedded conversion option of the senior
\n
unsecured convertible bonds issued on July 3, 2017 (Tranche B)
744
\n
Extinguishment of the embedded call option of the senior
\n
unsecured convertible bonds issued on July 3, 2017 (Tranche B)
60
\n
Change in fair value of the embedded conversion option of the
\n
senior unsecured convertible bonds issued on August 4, 2020
\n
(Tranche A and Tranche B)
(197
)
\n
Change in fair value of the embedded call option of the senior
\n
unsecured convertible bonds issued on August 4, 2020 (Tranche A
\n
and Tranche B)
(6
)
\n
Change in fair value of the contingent consideration on business
\n
acquisitions
38
\n
Currency translation adjustment
8
\n
As of December 31, 2021
(577
)
\n
Amount of net losses included in the 2021 income statement
\n
attributable to assets (liabilities) still held at the reporting date
(165
)
\n
The following table shows the impact on the income statement of the valuation of the embedded derivative
\n
instruments outstanding as of December 31, 2021:
\n
In millions of U.S. dollars
\n
Asset (liability) value as of December 31, 2020
(922
)
\n
Settlement of Tranche B of the senior unsecured convertible
\n
bonds issued on July 3, 2017
804
\n
Gains (losses) recognized in the consolidated income statement
(393
)
\n
Asset (liability) value as of December 31, 2021
(511
)
\n
The change in fair value amounting to $265 million on the embedded bondholders\u2019 conversion option was reported
\n
as \u201cFinance costs\u201d in the consolidated income statement ended December 31, 2021. The change in fair value
\n
amounting to $127 million on the embedded issuer\u2019s call option was reported as \u201cFinance income\u201d in the
\nconsolidated income statement ended December 31, 2021.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14326": {
"value": "7.6.15. Other non-current assets
Other non-current assets consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Receivables from government agencies
156
124
\n
French research tax credit receivable
294
376
\n
Prepayments and deposits to third parties
107
21
\n
Other non-current assets
56
75
\n
Total
613
596
\n
The Group holds long-term receivables with the objective to collect the contractual cash flows and therefore, these
\n
receivables are measured subsequently at amortized cost using the effective interest method.
\n
Prepayments and deposits to third parties include receivables related to long-term supply agreements involving
\n
purchase of raw materials, capacity commitments, cloud-hosting arrangements, and other services.
\n
In 2022 and 2021, the Group entered into factoring transactions to accelerate the realization in cash of certain long-
\n
term receivables. The Group sold without recourse $110 million and $118 million of these receivables in the years
\n
ended December 31, 2022 and 2021 respectively, with a financial cost of less than $1 million for both years.
\n
The major portion of other long-term receivables to which the expected credit loss model applies is long-term State
\n
receivables. Due to the existing history of zero-default on receivables originated by governments, the expected credit
\n
loss is assumed to be negligible as of December 31, 2022, and 2021. Other non-current assets presented in the table
\n
above on the line \"Other non-current assets\" are composed of individually not significant amounts not deemed to
\n
have exposure of default.
Consequently, no significant expected credit loss allowance was reported on other non-
\n
current assets at reporting date.
\n
The carrying amounts of the Group\u2019s non-current assets are denominated in the following currencies:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
U.S. dollars
114
41
\n
Euro
487
545
\n
Japanese Yen
2
2
\n
Other currencies
10
8
\n
Total
613
596",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherNoncurrentAssetsExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14406": {
"value": "7.6.16. Inventories
Inventories consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Raw materials
349
223
\n
Work-in-process
1,490
1,241
\n
Finished products
744
514
\n
Total
2,583
1,978
\n
Write-offs of inventories were recognized in cost of sales as an expense and amounted to $71 million in 2022 (2021:
\n
$65 million). Further impact related to inventories on the consolidated income statement is provided in Note 7.6.27.
\n
The carrying amount of inventories is presented net of a reserve for obsolescence items of $98 million as of
\nDecember 31, 2022 (2021: $88 million).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInventoriesExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14433": {
"value": "
7.6.17. Trade accounts receivable
\n
Trade accounts receivable consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Trade accounts receivable
1,991
1,778
\n
Loss allowance
(21
)
(19
)
\n
Total
1,970
1,759
\n
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of
\n
business. Trade receivables are non-interest bearing with credit terms from 30 up to 90 day terms. They are all
\n
classified as current. The Group holds the trade receivables with the objective to collect the contractual cash flows
\n
and, therefore, trade receivables are measured subsequently at amortized cost. The Group does not expect to have
\n
any significant contracts where the period between the transfer of the promised goods or services to the customer
\n
and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction
\n
prices for the time value of money and no significant transaction with customers includes significant financing
\n
component. Due to the short-term nature of trade receivables, their carrying amount is considered to be the same
\n
as their fair value.
\n
As described in Note 7.6.35, the Group monitors the creditworthiness of its customers to which it grants credit terms
\n
in the normal course of business. If certain customers are independently rated, these ratings are used. Otherwise, if
\n
there is no independent rating, risk control assesses the credit quality of the customer, considering its financial
\n
position, past experience and other factors. Individual risk limits are set based on internal and external ratings in
\n
accordance with limits set by management. The utilization of credit limits is regularly monitored. Sales to customers
\n
are primarily settled in cash.
\n
The Group uses a lifetime expected loss allowance for all trade receivables based on failure rates, as applied to the
\n
gross amounts of trade accounts receivable. The model includes reasonable assumptions about future credit trends.
\n
The historical loss rates are adjusted to reflect current and forward-looking information on macro-economic factors
\n
affecting the ability of the Group\u2019s customers to settle the receivables. In addition to the factors already embedded
\n
in the failure rates, as applied on trade accounts receivable, the Group has identified cyclicality and uncertainties
\n
around continued growth for the semiconductor industry and its serviceable available market to be the most
\n
relevant factors. These macro-economic factors are weighted into different economic scenarios, in line with
\n
estimates and methodologies applied by other business entities, including financial institutions. These scenarios
\n
\n
\n
range from upside scenario (above-trend economic growth) to severe downside (recession). On that basis, the loss
\n
allowance as of December 31, 2022 and December 31, 2021 was determined as follows:
\n
Past due
\n
In millions of U.S. dollars
Total
\n
No
\n
past-due
\n
Less than
\n
a month
\n
Between
\n
1 and 6
\n
months
\n
Over 6
\n
months
\n
December 31, 2022
\n
Expected loss rate
1
%
1
%
10
%
100
%
\n
Trade receivables
\u2013
Gross carrying amount
1,991
1,904
69
17
1
\n
Loss allowance
(21
)
(18
)
\u2014
(2
)
(1
)
\n
Trade receivables
\u2013
Net carrying amount
1,970
1,886
69
15
\u2014
\n
December 31, 2021
\n
Expected loss rate
1
%
1
%
10
%
100
%
\n
Trade receivables
\u2013
Gross carrying amount
1,778
1,736
39
\u2014
3
\n
Loss allowance
(19
)
(16
)
\u2014
\u2014
(3
)
\n
Trade receivables
\u2013
Net carrying amount
1,759
1,720
39
\u2014
\u2014
\n
The loss allowance for trade accounts receivable as of December 31, 2022 and December 31, 2021 reconcile to the
\n
opening loss allowance as follows:
\n
In millions of U.S. dollars
\n
As of December 31, 2020
16
\n
Additions
4
\n
Reversals
(1
)
\n
As of December 31, 2021
19
\n
Additions
5
\n
Reversals
(3
)
\n
As of December 31, 2022
21
\n
Trade accounts receivable are denominated in the following currencies:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
U.S. dollars
1,822
1,635
\n
Euro
35
37
\n
Japanese Yen
134
106
\n
Total
1,991
1,778
\n
The maximum exposure to credit risk was the fair value of trade accounts receivable, net of expected credit losses
\nas of December 31, 2022 and December 31, 2021.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14649": {
"value": "
7.6.18. Other receivables and assets
\n
Other receivables and assets consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Public funding receivables
190
296
\n
Advances and prepayments
125
118
\n
Taxes and other government receivables
270
119
\n
Other current assets
93
42
\n
Total
678
575
\n
Public funding receivables relate to R&D contracts, research tax credits, industrialization contracts and capital
\n
investment projects.
7.6.21.
Other non-current liabilities
\n
Other non-current liabilities consisted of the following:
\n
In millions of U.S. dollars
\n
December 31,
\n
2022
\n
December 31,
\n
2021
\n
Long-term liabilities related to public funding
51
44
\n
Long-term advances from customers
73
\u2014
\n
Others
73
65
\n
Total
197
109
\n
Long-term liabilities related to public funding included $46 million grants received mainly as part of the Nano2017
\n
program with the French government, which is subject to financial returns and depends on future cumulative sales.
\n
Advances from customers are primarily related to multi-annual capacity reservation and volume commitment
\n
agreements signed in 2022 with certain customers, as described in Note 7.6.23.
7.6.28. Other income / expenses
\n
Other income consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
R&D funding
177
162
\n
Foreign exchange forward contracts and other currency derivatives
24
9
\n
Gain on sale of non-current assets
2
5
\n
Total other income
203
176
The Group receives public funding from governmental bodies in several jurisdictions. Public funding for research,
\n
development and other innovation programs is recognized ratably as the related costs are incurred once the
\n
agreement with the respective governmental body has been signed and all applicable conditions have been met.
\n
Public funding received in the year ended December 31, 2017, from the Nano2017 program with the French
\n
government is subject to a financial return in the year 2024 and depends on the future cumulative sales of a certain
\n
product group over a five-year period. As such, the criteria for recognizing the grant income are not met. As of
\n
December 31, 2022 an amount of $46 million, corresponding primarily to the Nano2017 program, was reported in
\n
as a liability in the consolidated statement of financial position as of December 31, 2022, compared to $44 million
\n
as of December 31, 2021.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGovernmentGrantsExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14654": {
"value": "7.6.18. Other receivables and assets
Other receivables and assets consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Public funding receivables
190
296
\n
Advances and prepayments
125
118
\n
Taxes and other government receivables
270
119
\n
Other current assets
93
42
\n
Total
678
575
\n
Public funding receivables relate to R&D contracts, research tax credits, industrialization contracts and capital
\n
investment projects.
The Group applies a forward-looking expected credit losses model on all financial assets measured at amortized cost,
\n
excluding trade accounts receivable. The major portion of other receivables and assets to which this expected credit
\n
loss model applies corresponds to governmental receivables. Due to the short maturity of these receivables and the
\n
existing history of zero-default on receivables originated by governments, the expected credit loss is assumed to be
\n
negligible. Other receivables, excluding receivables from government agencies, are composed of individually
\n
insignificant amounts at exposure of default. Consequently, no significant loss allowance was reported on other
\n
receivables and assets as of December 31, 2022 and December 31, 2021.
\n
Taxes and other government receivables include receivables related to value-added tax, primarily in European tax
\n
jurisdictions.
\n
The carrying amounts of the Group\u2019s other receivables and assets are denominated in the following currencies:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
U.S. dollars
245
104
\n
Euro
401
435
\n
Other currencies
32
36
\n
Total
678
575
\n
The maximum exposure to credit risk was the fair value of other receivables and assets, net of expected credit losses,
\nas of December 31, 2022 and December 31, 2021.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherCurrentAssetsExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14719": {
"value": "7.6.19. Cash and cash equivalents
Cash and cash equivalents consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Cash at bank and on hand
262
342
\n
Deposits at call with banks
2,996
2,883
\n
Total
3,258
3,225",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14755": {
"value": "
7.6.20. Equity
\n
7.6.20.1.
Outstanding shares
\n
The authorized share capital of the Company is \u20ac1,810 million consisting of 1,200,000,000 common shares and
\n
540,000,000 preference shares, each with a nominal value of \u20ac1.04. As of December 31, 2022, the number of
\n
common shares issued was 911,281,920 shares (December 31, 2021: 911,276,920 shares).
\n
As of December 31, 2022, the number of common shares outstanding was 903,865,763 shares (December 31, 2021:
\n
906,518,057 shares).
\n
7.6.20.2.
Preference shares
\n
The 540,000,000 preference shares, when issued, will entitle a holder to full voting rights and to a preferential right
\n
to dividends and distributions upon liquidation.
\n
The Company is a party to an option agreement regarding the preference shares with Stichting Continu\u00efteit ST (the
\n
\u201cStichting\u201d), entered into on January 22, 2007, with a duration of ten years, which agreement was extended for
\n
another ten years in October 2016. The Managing Board and the Supervisory Board, along with the board of the
\n
Stichting, have declared that they are jointly of the opinion that the Stichting is independent of the Company. The
\n
option agreement provides for the issuance of up to a maximum 540,000,000 preference shares. Any such shares
\n
would be issued to the Stichting upon its request and in its sole discretion and upon payment of at least 25% of the
\n
par value of the preference shares to be issued. The shares would be issuable in the event of actions which the board
\n
of the Stichting determines would be contrary to the Company\u2019s interests, shareholders and other stakeholders and
\n
which in the event of a creeping acquisition or offer for the Company\u2019s common shares are not supported by the
\n
Company\u2019s Managing Board and Supervisory Board. The preference shares may remain outstanding for no longer
\n
than two years. The effect of the preference shares may be to deter potential acquirers from effecting an unsolicited
\n
acquisition resulting in a change of control as well as to create a level-playing field in the event actions which are
\n
considered to be hostile by the Managing Board and the Supervisory Board, as described above, occur and which
\n
the board of the Stichting determines to be contrary to the Company\u2019s interests, shareholders and other
\n
stakeholders.
\n
There were no preference shares issued as of December 31, 2022 and December 31, 2021 respectively.
\n
7.6.20.3.
Treasury shares
\n
As of December 31, 2022, the Company owned 7,416,157 shares classified as treasury stock in the consolidated
\n
statement of equity compared to 4,758,863 shares as of December 31, 2021.
\n
The treasury shares have been originally designated for allocation under the Company\u2019s share-based remuneration
\n
programs. As of December 31, 2022, 74,520,215 of these treasury shares were transferred to employees under the
\n
Company\u2019s share-based remuneration programs, of which 6,587,002 in the year ended December 31, 2022.
\n
On July 1, 2021, the Company announced the launch of a share buy-back program of up to $1,040 million to be
\n
executed within a three-year period.
During 2022, the Company repurchased approximately 9.2 million shares of its
\n
common stock for a total amount of $346 million.
7.6.20.6.
Other reserves
\n
Other reserves include the following components as of December 31, 2022:
\n
In millions of U.S. dollars
\n
Share-based
\n
compensation
\n
reserve
\n
Fair
value
\n
reserve
of
\n
financial
\n
assets
at
\n
FVOCI
\n
Cash
Flow
\n
Hedge
(CFH)
\n
reserve
\n
Foreign
\n
currency
\n
translation
\n
reserve
\n
Employee
\n
benefit
plan
\n
reserve
\n
Total
other
\n
reserves
\n
As of December 31, 2020
1,160
(3
)
31
766
(231
)
1,723
\n
Employee share award scheme
220
\u2014
\u2014
\u2014
220
\n
Net movement recognized in the
\n
statement of comprehensive
\n
income
\u2014
(1
)
(59
)
(188
)
37
(211
)
\n
Transfer of cash flow hedge
\n
reserve to inventories
\u2014
\u2014
6
\u2014
\u2014
6
\n
As of December 31, 2021
1,380
(4
)
(22
)
578
(194
)
1,738
\n
Employee share award scheme
209
\u2014
\u2014
\u2014
209
\n
Net movement recognized in the
\n
statement of comprehensive
\n
income
\u2014
(14
)
35
(146
)
78
(47
)
\n
Transfer of cash flow hedge
\n
reserve to inventories
\u2014
\u2014
1
\u2014
\u2014
1
\n
As of December 31, 2022
1,589
(18
)
14
432
(116
)
1,901
\n
Share-based compensation reserve:
The share-based compensation reserve is used to recognize the value of equity-
\n
settled share-based payment to employees, including key management personnel, as part of their remuneration.
\n
Refer to Notes 7.6.20.4 and 7.6.20.5 for further details on these share-based compensation programs.
\n
Fair value reserve of financial assets at FVOCI:
This reserve records fair value changes on debt and equity securities
\n
measured at FVOCI.
\n
Cash Flow hedge reserve:
The cash flow hedge reserve contains the effective portion of the cash flow hedge
\n
relationship outstanding as of year-end.
\n
Foreign currency translation reserve:
The foreign currency translation reserve is used to record exchange
\n
differences arising from the translation of the financial statements for subsidiaries which functional currency is
\n
different from the U.S. dollars.
\n
Employee benefit plan reserve:
The employee benefit plan reserve is used to recognize the actuarial gains and losses
\n
and past service cost of post-employment pension plans.
\n
7.6.20.7.
Dividends
\n
The AGM held on May 25, 2022, authorized the distribution of a cash dividend of $0.24 per outstanding share of the
\n
Company\u2019s common stock, to be distributed in quarterly installments of $0.06 in each of the second, third and fourth
\n
quarters of 2022 and first quarter of 2023. An amount of $55 million corresponding to the first installment, of $54
\n
million corresponding to the second installment, and of $48 million corresponding to the third installment were paid
\n
as of December 31, 2022. The amounts of $6 million corresponding to the remaining portion of the third installment
\n
and $54 million corresponding to the last installment were presented in the line \u201cOther payables and accrued
\n
liabilities\u201d of the consolidated statement of financial position as of December 31, 2022.
\n
The 2021 AGM held on May 27, 2021 authorized the distribution of a cash dividend of $0.24 per outstanding share
\n
of the Company\u2019s common stock, to be distributed in quarterly installments of $0.06 in each of the second, third and
\n
fourth quarters of 2021 and first quarter of 2022. The amount of $54 million corresponding to the first installment,
$55 million corresponding to the second installment and $54 million corresponding to the third installment were
\n
paid as of December 31, 2021.
An amount of $55 million corresponding to the fourth installment was paid in 2022.
\n
The 2020 AGM held on June 17, 2020 authorized the distribution of a cash dividend of $0.168 per outstanding share
\n
of the Company\u2019s common stock, to be distributed in quarterly installments of $0.042 in each of the second, third
\n
and fourth quarters of 2020 and first quarter of 2021. The amount of $37 million corresponding to the first
\n
installment, $38 million corresponding to the second installment and $34 million corresponding to the third
\n
installment were paid as of December 31, 2020. The remaining portion of the third installment amounting to $4
\n
million and the fourth installment of $38 million were paid in 2021.
\n
7.6.20.8.
Legal reserves
\n
Refer to Note 8.3.12 for the composition of the Company\u2019s legal reserves.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14757": {
"value": "7.6.20. Equity
7.6.20.1.
Outstanding shares
\n
The authorized share capital of the Company is \u20ac1,810 million consisting of 1,200,000,000 common shares and
\n
540,000,000 preference shares, each with a nominal value of \u20ac1.04. As of December 31, 2022, the number of
\n
common shares issued was 911,281,920 shares (December 31, 2021: 911,276,920 shares).
\n
As of December 31, 2022, the number of common shares outstanding was 903,865,763 shares (December 31, 2021:
\n
906,518,057 shares).
\n
7.6.20.2.
Preference shares
\n
The 540,000,000 preference shares, when issued, will entitle a holder to full voting rights and to a preferential right
\n
to dividends and distributions upon liquidation.
\n
The Company is a party to an option agreement regarding the preference shares with Stichting Continu\u00efteit ST (the
\n
\u201cStichting\u201d), entered into on January 22, 2007, with a duration of ten years, which agreement was extended for
\n
another ten years in October 2016. The Managing Board and the Supervisory Board, along with the board of the
\n
Stichting, have declared that they are jointly of the opinion that the Stichting is independent of the Company. The
\n
option agreement provides for the issuance of up to a maximum 540,000,000 preference shares. Any such shares
\n
would be issued to the Stichting upon its request and in its sole discretion and upon payment of at least 25% of the
\n
par value of the preference shares to be issued. The shares would be issuable in the event of actions which the board
\n
of the Stichting determines would be contrary to the Company\u2019s interests, shareholders and other stakeholders and
\n
which in the event of a creeping acquisition or offer for the Company\u2019s common shares are not supported by the
\n
Company\u2019s Managing Board and Supervisory Board. The preference shares may remain outstanding for no longer
\n
than two years. The effect of the preference shares may be to deter potential acquirers from effecting an unsolicited
\n
acquisition resulting in a change of control as well as to create a level-playing field in the event actions which are
\n
considered to be hostile by the Managing Board and the Supervisory Board, as described above, occur and which
\n
the board of the Stichting determines to be contrary to the Company\u2019s interests, shareholders and other
\n
stakeholders.
\nThere were no preference shares issued as of December 31, 2022 and December 31, 2021 respectively.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14788": {
"value": "7.6.20.3.
Treasury shares
\n
As of December 31, 2022, the Company owned 7,416,157 shares classified as treasury stock in the consolidated
\n
statement of equity compared to 4,758,863 shares as of December 31, 2021.
\n
The treasury shares have been originally designated for allocation under the Company\u2019s share-based remuneration
\n
programs. As of December 31, 2022, 74,520,215 of these treasury shares were transferred to employees under the
\n
Company\u2019s share-based remuneration programs, of which 6,587,002 in the year ended December 31, 2022.
\n
On July 1, 2021, the Company announced the launch of a share buy-back program of up to $1,040 million to be
\n
executed within a three-year period.
During 2022, the Company repurchased approximately 9.2 million shares of its
\ncommon stock for a total amount of $346 million.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14802": {
"value": "7.6.20.4.
Unvested share awards for the Supervisory Board
\n
On an annual basis and until the year 2012, the Compensation Committee (on behalf of the Supervisory Board and
\n
with its approval) used to grant stock-based awards (the options to acquire common shares in the share capital of
\n
the Company) to the members and professionals of the Supervisory Board (\u201cThe Supervisory Board Plan\u201d). The
\n
awards were granted at the nominal value of the share of \u20ac1.04 (exercise price of the option). The options granted
\n
under the Supervisory Board Plan vested and became exercisable immediately, while the shares resulting from these
\n
awards vested and therefore became available for trade evenly over three years (one third every year), with no
\n
market, performance or service conditions.
\n
At the Company\u2019s AGM held on June 21, 2013, it was resolved to abolish and terminate the stock-based
\n
compensation for the Supervisory Board members and professionals.
\n
The table below summarizes grants under the outstanding stock award plans, as authorized by the Compensation
\n
Committee:
\n
Year of Grant
\n
Options
granted
\n
and vested
\n
Options waived
\n
at grant
\n
2011
172,500
(30,000
)
\n
2012
180,000
(22,500
)
\n
Since 2013
No options granted
\n
A summary of the options\u2019 activity by plan for the years ended December 31, 2022 and December 31, 2021 is
\n
presented below:
\n
Year of grant
\n
Outstanding
\n
as of
\n
31.12.2020
\n
Proceeds
at
\n
maturity
\n
Outstanding
\n
as of
\n
31.12.2021
Exercised
Cancelled
\n
Outstanding
\n
as of
\n
31.12.2022
\n
2011
7,500
(7,500
)
\u2014
\u2014
\u2014
\u2014
\n
2012
50,000
(30,000
)
20,000
(5,000
)
(15,000
)
\u2014
\n
The total intrinsic value of options exercised during the year 2022 were not significant, compared to $2 million in
\n
2021. The total intrinsic value of options outstanding was $1 million as of December 31, 2021.
\n
7.6.20.5.
Unvested share awards for the Employees
\n
On an annual basis, the Compensation Committee (on behalf of the Supervisory Board and with its approval) grants
\n
stock-based awards to senior executives along with selected employees (the \u201cEmployee Plan\u201d). The awards are
\n
granted for services under the Employee Plan. There are two types of unvested shares: (1) shares granted to
\n
employees, which are subject only to service conditions and vest over the requisite service period, and (2) shares
\n
granted to senior executives, whose vesting is subject to performance conditions.
\n
For the plans 2019 and 2020, the performance conditions consisted of two external targets (sales evolution and
\n
operating income compared to a basket of competitors) weighting for two thirds of the total number of awards
\n
granted and of one internal target (return on net assets compared to the previous period), weighting for one third
\n
of the total number of awards granted. For the plans 2021 and 2022, the performance conditions consisted of two
\n
external targets (sales evolution and operating income compared to a basket of competitors) weighting for two
\n
thirds of the total number of awards granted and of one internal target (Group\u2019s sustainability and diversity
\n
performance), weighting for one third of the total numbers of awards granted.
\n
Awards usually vest over a three-year service period (32% as of the first anniversary of the grant, 32% as of the
\n
second anniversary of the grant and 36% as of the third anniversary of the grant). In addition, for each of the years
\n
2019 and 2020, a Special Bonus was granted to the Group\u2019s CEO.
\n
The table below summarizes grants under the outstanding stock award plans in 2022, as authorized by the
\n
Compensation Committee:
\n
Date of Grant
Allocations under
\n
Number
\n
of shares
\n
granted
\n
Number of
\n
shares
\n
waived
\n
Number of
\n
shares lost
\n
on performance
\n
conditions
\n
May 23, 2019
2019 CEO Special Bonus
34,960
\u2014
\u2014
\n
July 24, 2019
2019 Employee Plan
7,752,940
\u2014
(1,161,966
)
\n
December 26, 2019
2019 Employee Plan
246,750
\u2014
(17,013
)
\n
June 17, 2020
2020 CEO Special Bonus
16,000
\u2014
\u2014
\n
July 23, 2020
2020 Employee Plan
7,437,580
\u2014
\u2014
\n
December 24, 2020
2020 Employee Plan
562,350
\u2014
\u2014
\n
July 28, 2021
2021 Employee Plan
6,327,205
\u2014
(920,263
)
\n
December 21, 2021
2021 Employee Plan
213,270
\u2014
(60,500
)
\n
July 27, 2022
2022 Employee Plan
6,243,670
\u2014
\u2014
\n
December 22, 2022
2022 Employee Plan
287,675
\u2014
\u2014
\n
A summary of the unvested share activity for the year December 31, 2022 is presented below:
\n
Allocation under
\n
Unvested
\n
as of
\n
December
31,
\n
2021
Granted
\n
Forfeited
/
\n
waived
Vested
\n
Unvested
\n
as of
\n
December
31,
\n
2022
\n
2019 CEO Special Bonus
11,652
\u2014
\u2014
(11,652
)
\u2014
\n
2019 Employee Plan
2,356,399
\u2014
(10,988
)
(2,345,411
)
\u2014
\n
2020 CEO Special Bonus
10,667
\u2014
\u2014
(5,333
)
5,334
\n
2020 Employee Plan
5,325,666
\u2014
(52,350
)
(2,492,520
)
2,780,796
\n
2021 Employee Plan
5,482,577
\u2014
(31,776
)
(1,751,287
)
3,699,514
\n
2022 Employee Plan
\u2014
6,531,345
(34,820
)
\u2014
6,496,525
\n
Total
13,186,961
6,531,345
(129,934
)
(6,606,203
)
12,982,169
\n
The grant date fair value of unvested shares granted to the CEO under the 2019 CEO Special Bonus Plan was $14.97,
\n
which was based on market price of the shares at the date of the grant.
\n
The grant date weighted average fair value of unvested shares granted to employees under the 2019 Employee Plan
\n
was $19.28. On March 25, 2020, the Compensation Committee approved the statement that with respect to the
\n
shares subject to performance conditions, two performance conditions were met. Consequently, the compensation
\n
expense recorded on the 2019 Employee Plan reflects the statement that \u2014 for the portion of the shares subject to
\n
performance conditions \u2014 two thirds of the awards granted will vest, as far as the service condition is met.
\n
The grant date fair value of unvested shares granted to the CEO under the 2020 CEO Special Bonus Plan was $26.64,
\n
which was based on the market price of the shares at the date of the grant.
\n
The grant date weighted average fair value of unvested shares granted to employees under the 2020 Employee Plan
\n
was $30.17. On March 24, 2021, the Compensation Committee approved the statement that with respect to the
\n
shares subject to performance conditions, all three performance conditions were fully met. Consequently, the
\n
compensation expense recorded on the 2020 Employee Plan reflects the statement that \u2014 for the portion of the
\n
shares subject to performance conditions \u2014 100% of the awards granted will fully vest, as far as the service condition
\n
is met.
\n
The grant date weighted average fair value of unvested shares granted to employees under the 2021 Employee Plan
\n
was $39.20. On March 23, 2022, the Compensation Committee approved the statement that with respect to the
\n
shares subject to performance conditions, two out of three performance conditions were fully met. Consequently,
\n
the compensation expense recorded on the 2021 Employee Plan reflects the statement that \u2014 for the portion of
\n
the shares subject to performance conditions \u2014 two thirds of the awards granted will fully vest, as far as the service
\n
condition is met.
\n
The grant date weighted average fair value of unvested shares granted to employees under the 2022 Employee Plan
\n
was $35.92. On March 22, 2023, the Compensation Committee approved the statement that with respect to the
\n
shares subject to performance conditions, three out of three performance conditions were met. Consequently, the
\n
compensation expense recorded on the 2022 Employee Plan reflects the statement that \u2014 for the portion of the
\n
shares subject to performance conditions \u2014 three thirds of the awards granted will fully vest, as far as the service
\n
condition is met.
\n
The following table illustrates the classification of pre-payroll tax and social contribution stock-based compensation
\n
expense included in the consolidated income statement for the year ended December 31, 2022 and 2021:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Cost of sales
34
33
\n
Research and development
69
68
\n
Selling, general and administrative
112
109
\n
Total pre-payroll tax and social contribution compensation
215
210
\n
The grant date fair value of the shares vested in 2022 totaled $189 million compared to $181 million in 2021.
\n
Stock-based compensation, excluding payroll tax and social contribution, capitalized as part of inventory was $11
\n
million as of December 31, 2022, compared to $9 million as of December 31, 2021. As of December 31, 2022, there
\n
was $228 million of total unrecognized compensation cost related to the grant of unvested shares, which is expected
\n
to be recognized over a weighted average period of approximately 9 months.
\n
The total deferred income tax benefit recognized in the consolidated income statement related to unvested share-
\n
based compensation expense amounted to $15 million for the year ended December 31, 2022, compared to
\n
$14 million for the year ended December 31, 2021. The excess tax benefit on unvested share-based compensation
\n
was not significant as of December 31, 2022, compared to $9 million as of December 31, 2021, and was recorded in
\n\u201cOther reserves\u201d in the consolidated statement of equity.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15134": {
"value": "
7.6.20.6.
Other reserves
\n
Other reserves include the following components as of December 31, 2022:
\n
In millions of U.S. dollars
\n
Share-based
\n
compensation
\n
reserve
\n
Fair
value
\n
reserve
of
\n
financial
\n
assets
at
\n
FVOCI
\n
Cash
Flow
\n
Hedge
(CFH)
\n
reserve
\n
Foreign
\n
currency
\n
translation
\n
reserve
\n
Employee
\n
benefit
plan
\n
reserve
\n
Total
other
\n
reserves
\n
As of December 31, 2020
1,160
(3
)
31
766
(231
)
1,723
\n
Employee share award scheme
220
\u2014
\u2014
\u2014
220
\n
Net movement recognized in the
\n
statement of comprehensive
\n
income
\u2014
(1
)
(59
)
(188
)
37
(211
)
\n
Transfer of cash flow hedge
\n
reserve to inventories
\u2014
\u2014
6
\u2014
\u2014
6
\n
As of December 31, 2021
1,380
(4
)
(22
)
578
(194
)
1,738
\n
Employee share award scheme
209
\u2014
\u2014
\u2014
209
\n
Net movement recognized in the
\n
statement of comprehensive
\n
income
\u2014
(14
)
35
(146
)
78
(47
)
\n
Transfer of cash flow hedge
\n
reserve to inventories
\u2014
\u2014
1
\u2014
\u2014
1
\n
As of December 31, 2022
1,589
(18
)
14
432
(116
)
1,901
\n
Share-based compensation reserve:
The share-based compensation reserve is used to recognize the value of equity-
\n
settled share-based payment to employees, including key management personnel, as part of their remuneration.
\n
Refer to Notes 7.6.20.4 and 7.6.20.5 for further details on these share-based compensation programs.
\n
Fair value reserve of financial assets at FVOCI:
This reserve records fair value changes on debt and equity securities
\n
measured at FVOCI.
\n
Cash Flow hedge reserve:
The cash flow hedge reserve contains the effective portion of the cash flow hedge
\n
relationship outstanding as of year-end.
\n
Foreign currency translation reserve:
The foreign currency translation reserve is used to record exchange
\n
differences arising from the translation of the financial statements for subsidiaries which functional currency is
\n
different from the U.S. dollars.
\n
Employee benefit plan reserve:
The employee benefit plan reserve is used to recognize the actuarial gains and losses
\n
and past service cost of post-employment pension plans.
7.6.20.8.
Legal reserves
\n
Refer to Note 8.3.12 for the composition of the Company\u2019s legal reserves.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15265": {
"value": "7.6.20.7.
Dividends
\n
The AGM held on May 25, 2022, authorized the distribution of a cash dividend of $0.24 per outstanding share of the
\n
Company\u2019s common stock, to be distributed in quarterly installments of $0.06 in each of the second, third and fourth
\n
quarters of 2022 and first quarter of 2023. An amount of $55 million corresponding to the first installment, of $54
\n
million corresponding to the second installment, and of $48 million corresponding to the third installment were paid
\n
as of December 31, 2022. The amounts of $6 million corresponding to the remaining portion of the third installment
\n
and $54 million corresponding to the last installment were presented in the line \u201cOther payables and accrued
\n
liabilities\u201d of the consolidated statement of financial position as of December 31, 2022.
\n
The 2021 AGM held on May 27, 2021 authorized the distribution of a cash dividend of $0.24 per outstanding share
\n
of the Company\u2019s common stock, to be distributed in quarterly installments of $0.06 in each of the second, third and
\n
fourth quarters of 2021 and first quarter of 2022. The amount of $54 million corresponding to the first installment,
\n
$55 million corresponding to the second installment and $54 million corresponding to the third installment were
\n
paid as of December 31, 2021.
An amount of $55 million corresponding to the fourth installment was paid in 2022.
\n
The 2020 AGM held on June 17, 2020 authorized the distribution of a cash dividend of $0.168 per outstanding share
\n
of the Company\u2019s common stock, to be distributed in quarterly installments of $0.042 in each of the second, third
\n
and fourth quarters of 2020 and first quarter of 2021. The amount of $37 million corresponding to the first
\n
installment, $38 million corresponding to the second installment and $34 million corresponding to the third
\n
installment were paid as of December 31, 2020. The remaining portion of the third installment amounting to $4
\nmillion and the fourth installment of $38 million were paid in 2021.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDividendsExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15269": {
"value": "0.24",
"decimals": 2,
"dimensions": {
"concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:USD/xbrli:shares"
}
},
"f15277": {
"value": "0.24",
"decimals": 2,
"dimensions": {
"concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:USD/xbrli:shares"
}
},
"f15301": {
"value": "0.168",
"decimals": 3,
"dimensions": {
"concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2020-01-01T00:00:00/2021-01-01T00:00:00",
"unit": "iso4217:USD/xbrli:shares"
}
},
"f15315": {
"value": "7.6.21.
Other non-current liabilities
Other non-current liabilities consisted of the following:
\n
In millions of U.S. dollars
\n
December 31,
\n
2022
\n
December 31,
\n
2021
\n
Long-term liabilities related to public funding
51
44
\n
Long-term advances from customers
73
\u2014
\n
Others
73
65
\n
Total
197
109
\n
Long-term liabilities related to public funding included $46 million grants received mainly as part of the Nano2017
\n
program with the French government, which is subject to financial returns and depends on future cumulative sales.
\n
Advances from customers are primarily related to multi-annual capacity reservation and volume commitment
\nagreements signed in 2022 with certain customers, as described in Note 7.6.23.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherNoncurrentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15344": {
"value": "
7.6.22. Employee benefits
\n
Employee benefits liabilities are detailed as follows:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Retirement benefit obligation liability
319
448
\n
Other long-term employee benefits
90
99
\n
Other employee benefits liabilities
38
39
\n
Salaries and wages
609
531
\n
Social charges on salaries and wages
205
222
\n
Total employee benefits liabilities
1,261
1,339
\n
Current liabilities
844
775
\n
Non-current liabilities
417
564
\n
Pensions
\n
The Group has a number of defined benefit pension plans covering employees in various countries. The defined
\n
benefit plans provide pension benefits based on years of service and employee compensation levels. The Group uses
\n
December 31 as measurement date for all its plans. Eligibility is generally determined in accordance with local
\n
statutory requirements. In 2022 and 2021, the major defined benefit pension plans and long-term employee benefit
\n
plans were in the USA (retirement plan closed to new entrants and future accrual), France (retirement indemnities),
Switzerland (retirement pension system), U.K. (retirement benefit scheme closed to new entrants and future
\n
accrual) and Italy (termination indemnity plan (\u201cTFR\u201d) generated before July 1, 2007).
\n
The amounts recognized in the statement of financial position are determined as follows:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Benefit obligations wholly or partially funded
(625
)
(849
)
\n
Fair value of plan assets
567
743
\n
Benefit obligations wholly unfunded
(243
)
(312
)
\n
Asset ceiling
(18
)
(30
)
\n
Total pension liabilities
(319
)
(448
)
\n
The movements in the pension liability are as follows:
\n
In millions of U.S. dollars
2022
2021
\n
Beginning of the year
448
500
\n
Exchange difference
(25
)
(23
)
\n
Pension expense
39
41
\n
Contributions paid
(38
)
(29
)
\n
Remeasurement (gain) / loss recognized in OCI
(105
)
(41
)
\n
End of the year
319
448
\n
Changes in defined benefit obligations are as follows:
\n
In millions of U.S. dollars
2022
2021
\n
Beginning of the year
1,161
1,218
\n
Service cost
33
36
\n
Interest cost
21
18
\n
Employee contributions
4
4
\n
Actuarial (gain) loss
\u2013
Experience
30
20
\n
Actuarial (gain) loss
\u2013
Demographic assumptions
(13
)
(13
)
\n
Actuarial (gain) loss
\u2013
Financial assumptions
(285
)
(58
)
\n
Benefits paid
(36
)
(33
)
\n
Effect of foreign exchange translation
(47
)
(31
)
\n
End of the year
868
1,161
\n
Defined benefit obligations by main geographical locations are as follows:
\n
In millions of U.S. dollars
2022
2021
\n
France
162
223
\n
Italy
84
105
\n
Switzerland
147
161
\n
United Kingdom
119
192
\n
United States
288
406
\n
Other countries
68
74
\n
End of the year
868
1,161
Changes in plan assets are as follows:
\n
In millions of U.S. dollars
2022
2021
\n
Beginning of the year
743
718
\n
Interest income
16
12
\n
Employer contribution
25
17
\n
Employee contribution
4
4
\n
Benefits paid
(23
)
(20
)
\n
Actuarial gain (loss)
(173
)
21
\n
Effect of foreign exchange translation
(25
)
(9
)
\n
End of the year
567
743
\n
The actual return on plan assets in 2022 was a loss of $157 million (2021: gain of $33 million). In 2022, the theoretical
\n
interest income on plan assets was a gain of $16 million (2021: gain of $12 million) resulting in an actuarial loss on
\n
plan assets of $173 million (2021: gain of $21 million).
\n
Plan assets by main geographical locations are as follows:
\n
In millions of U.S. dollars
2022
2021
\n
France
3
3
\n
Switzerland
133
125
\n
United Kingdom
128
206
\n
United States
259
365
\n
Other countries
44
44
\n
End of the year
567
743
\n
The effects of the asset ceiling are as follows:
\n
In millions of U.S. dollars
2022
2021
\n
Beginning of the year
(30
)
\u2014
\n
Effect of asset ceiling recognized during the year
9
(30
)
\n
Effect of foreign exchange translation
3
\u2014
\n
End of the year
(18
)
(30
)
\n
The amounts recognized in the income statement related to pensions are as follows:
\n
In millions of U.S. dollars
2022
2021
\n
Service cost
34
36
\n
Current service cost
34
36
\n
Net interest cost
5
5
\n
Interest cost
21
18
\n
Interest income
(16
)
(13
)
\n
Total pension costs
39
41
The Group\u2019s detailed pension plan asset allocation including the fair value measurements of those plan assets as of
\n
December 31, 2022 is as follows:
\n
In millions of U.S. dollars
Total
\n
Quoted
\n
Prices in
\n
Active
\n
Markets
\n
for
\n
Identical
\n
Assets
\n
(Level 1)
\n
Significant
\n
Other
\n
Observable
\n
Inputs
\n
(Level 2)
\n
Significant
\n
Unobservable
\n
Inputs
\n
(Level 3)
\n
Cash and cash equivalents
4
4
\u2014
\u2014
\n
Equity securities
95
1
94
\u2014
\n
Government debt securities
59
\u2014
59
\u2014
\n
Corporate debt securities
120
\u2014
98
22
\n
Investment funds
87
1
86
\u2014
\n
Real estate
6
\u2014
6
\u2014
\n
Other (mainly insurance assets)
194
\u2014
38
156
\n
Total
565
6
381
178
\n
The Group\u2019s detailed pension plan asset allocation including the fair value measurements of those plan assets as of
\n
December 31, 2021 is as follows:
\n
In millions of U.S. dollars
Total
\n
Quoted
\n
Prices in
\n
Active
\n
Markets
for
\n
Identical
\n
Assets
\n
(Level 1)
\n
Significant
\n
Other
\n
Observable
\n
Inputs
\n
(Level 2)
\n
Significant
\n
Unobservable
\n
Inputs
\n
(Level 3)
\n
Cash and cash equivalents
5
5
\u2014
\u2014
\n
Equity securities
130
2
128
\u2014
\n
Government debt securities
87
\u2014
87
\u2014
\n
Corporate debt securities
164
\u2014
139
25
\n
Investment funds
156
1
155
\u2014
\n
Real estate
10
\u2014
10
\u2014
\n
Other (mainly insurance assets)
191
\u2014
49
142
\n
Total
743
8
568
167
\n
The majority of plans (in the United Kingdom, United States and Switzerland) are governed by an independent board
\n
of trustees, which includes employer representatives.
\n
The Group\u2019s investment strategy for its pension plans is to optimize the long-term investment return on plan assets
\n
in relation to the liability structure to maintain an acceptable level of risk while minimizing the cost of providing
\n
pension benefits and maintaining adequate funding levels in accordance with applicable rules in each jurisdiction.
\n
The Group\u2019s practice is to periodically conduct a review in each subsidiary of its asset allocation strategy, in such a
\n
way that the asset allocation is in line with the targeted asset allocation within reasonable boundaries. The Group\u2019s
\n
asset portfolios are managed in such a way as to achieve adapted diversity. The Group does not manage any assets
\n
internally.
\n
After considering the funded status of the Group\u2019s defined benefit plans, movements in the discount rate,
\n
investment performance and related tax consequences, the Group may choose to make contributions to its pension
plans in any given year in excess of required amounts. In 2022, the Group\u2019s contributions to plan assets were $25
\n
million (2021: $17 million) and it expects to contribute cash of $30 million in 2023.
\n
Other long-term employee benefits
\n
Other long-term employee benefits include seniority and loyalty award programs. The movements in the other long-
\n
term employee benefits liability are as follows:
\n
In millions of U.S. dollars
2022
2021
\n
Beginning of the year
99
108
\n
Service cost
17
14
\n
Interest cost
1
1
\n
Actuarial (gain) loss
\u2013
Experience
2
(1
)
\n
Actuarial (gain) loss
\u2013
Demographic assumptions
3
1
\n
Actuarial (gain) loss
\u2013
Financial assumptions
(20
)
(3
)
\n
Benefits paid
(6
)
(5
)
\n
Effect of foreign exchange translation
(6
)
(16
)
\n
End of the year
90
99
\n
The amounts recognized in the income statement related to other long-term benefits are as follows:
\n
In millions of U.S. dollars
2022
2021
\n
Service cost
17
14
\n
Current service cost
17
14
\n
Net interest cost
(14
)
(1
)
\n
Interest cost
1
1
\n
Immediate recognition of (gains) losses
(15
)
(2
)
\n
Total other long-term benefits costs
3
13
\n
Assumptions
\n
The weighted average assumptions used in the determination of pension and other long-term obligations are as
\n
follows:
\n
2022
2021
\n
Discount rate
1.84
%
1.50
%
\n
Inflation rate
1.87
%
1.73
%
\n
Future salary increase
2.26
%
1.69
%
\n
The discount rate was determined by reference to high quality corporate bond rates applicable to the respective
\n
country of each plan and estimated terms of the defined benefit obligation. As required by IAS 19, and for pension
\n
plans with plan assets, the interest income on plan assets is set equal to the corresponding discount rate.
\n
The average duration of Defined Benefit Obligations is 12 years in 2022 (2021: 14 years).
\n
As of December 31, 2022, an increase of the discount rate of 0.50% would have resulted in a reduction of the Defined
\n
Benefit Obligations of $50 million and a decrease of the discount rate of 0.50% would have resulted in an increase
\n
of the Defined Benefit Obligations by $55 million. An increase of the inflation rate of 0.50% would have resulted in
\n
an increase of the Defined Benefit Obligations of $11 million and a decrease of the inflation rate of 0.50% would
\n
have resulted in a decrease of the Defined Benefit Obligations of $11 million. An increase of the life expectancy of
\n
one year would have resulted in an increase of the Defined Benefit Obligations of $13 million and a decrease of the
\n
life expectancy of one year would have resulted in a decrease of the Defined Benefit Obligations of $13 million.
\n
These sensitivity analyses are based on a change in an assumption while holding all other assumptions constant.
When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same
\n
method has been applied as when calculating the pension liability recognized within the consolidated statement of
\n
financial position.
\n
Assumptions regarding future mortality experience are set based on advice from published statistics and experience
\n
in each territory.
\n
Defined contribution plans
\n
The Group has certain defined contribution plans, which accrue benefits for employees on a pro-rata basis during
\n
their employment period based on their individual salaries. In 2022, the annual cost of these plans amounted to
\n
approximately $100 million (2021: $101 million).
7.6.27. Expenses by nature
Employee benefit expenses are detailed as follows:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Wages and salaries
2,800
2,710
\n
Payroll taxes and other social contribution charges
522
527
\n
Share-based compensation expense
215
210
\n
Pensions and other long-term benefits expense
142
155
\n
Total employee benefit expenses
3,679
3,602
\n
Of which included in:
\n
Cost of sales
1,621
1,595
\n
Selling, general and administrative
990
955
\n
Research and development
1,068
1,052
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15349": {
"value": "7.6.22. Employee benefits
Employee benefits liabilities are detailed as follows:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Retirement benefit obligation liability
319
448
\n
Other long-term employee benefits
90
99
\n
Other employee benefits liabilities
38
39
\n
Salaries and wages
609
531
\n
Social charges on salaries and wages
205
222
\n
Total employee benefits liabilities
1,261
1,339
\n
Current liabilities
844
775
\n
Non-current liabilities
417
564
\n
Pensions
\n
The Group has a number of defined benefit pension plans covering employees in various countries. The defined
\n
benefit plans provide pension benefits based on years of service and employee compensation levels. The Group uses
\n
December 31 as measurement date for all its plans. Eligibility is generally determined in accordance with local
\n
statutory requirements. In 2022 and 2021, the major defined benefit pension plans and long-term employee benefit
\n
plans were in the USA (retirement plan closed to new entrants and future accrual), France (retirement indemnities),
\n
Switzerland (retirement pension system), U.K. (retirement benefit scheme closed to new entrants and future
\n
accrual) and Italy (termination indemnity plan (\u201cTFR\u201d) generated before July 1, 2007).
\n
The amounts recognized in the statement of financial position are determined as follows:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Benefit obligations wholly or partially funded
(625
)
(849
)
\n
Fair value of plan assets
567
743
\n
Benefit obligations wholly unfunded
(243
)
(312
)
\n
Asset ceiling
(18
)
(30
)
\n
Total pension liabilities
(319
)
(448
)
\n
The movements in the pension liability are as follows:
\n
In millions of U.S. dollars
2022
2021
\n
Beginning of the year
448
500
\n
Exchange difference
(25
)
(23
)
\n
Pension expense
39
41
\n
Contributions paid
(38
)
(29
)
\n
Remeasurement (gain) / loss recognized in OCI
(105
)
(41
)
\n
End of the year
319
448
\n
Changes in defined benefit obligations are as follows:
\n
In millions of U.S. dollars
2022
2021
\n
Beginning of the year
1,161
1,218
\n
Service cost
33
36
\n
Interest cost
21
18
\n
Employee contributions
4
4
\n
Actuarial (gain) loss
\u2013
Experience
30
20
\n
Actuarial (gain) loss
\u2013
Demographic assumptions
(13
)
(13
)
\n
Actuarial (gain) loss
\u2013
Financial assumptions
(285
)
(58
)
\n
Benefits paid
(36
)
(33
)
\n
Effect of foreign exchange translation
(47
)
(31
)
\n
End of the year
868
1,161
\n
Defined benefit obligations by main geographical locations are as follows:
\n
In millions of U.S. dollars
2022
2021
\n
France
162
223
\n
Italy
84
105
\n
Switzerland
147
161
\n
United Kingdom
119
192
\n
United States
288
406
\n
Other countries
68
74
\n
End of the year
868
1,161
\n
Changes in plan assets are as follows:
\n
In millions of U.S. dollars
2022
2021
\n
Beginning of the year
743
718
\n
Interest income
16
12
\n
Employer contribution
25
17
\n
Employee contribution
4
4
\n
Benefits paid
(23
)
(20
)
\n
Actuarial gain (loss)
(173
)
21
\n
Effect of foreign exchange translation
(25
)
(9
)
\n
End of the year
567
743
\n
The actual return on plan assets in 2022 was a loss of $157 million (2021: gain of $33 million). In 2022, the theoretical
\n
interest income on plan assets was a gain of $16 million (2021: gain of $12 million) resulting in an actuarial loss on
\n
plan assets of $173 million (2021: gain of $21 million).
\n
Plan assets by main geographical locations are as follows:
\n
In millions of U.S. dollars
2022
2021
\n
France
3
3
\n
Switzerland
133
125
\n
United Kingdom
128
206
\n
United States
259
365
\n
Other countries
44
44
\n
End of the year
567
743
\n
The effects of the asset ceiling are as follows:
\n
In millions of U.S. dollars
2022
2021
\n
Beginning of the year
(30
)
\u2014
\n
Effect of asset ceiling recognized during the year
9
(30
)
\n
Effect of foreign exchange translation
3
\u2014
\n
End of the year
(18
)
(30
)
\n
The amounts recognized in the income statement related to pensions are as follows:
\n
In millions of U.S. dollars
2022
2021
\n
Service cost
34
36
\n
Current service cost
34
36
\n
Net interest cost
5
5
\n
Interest cost
21
18
\n
Interest income
(16
)
(13
)
\n
Total pension costs
39
41
\n
The Group\u2019s detailed pension plan asset allocation including the fair value measurements of those plan assets as of
\n
December 31, 2022 is as follows:
\n
In millions of U.S. dollars
Total
\n
Quoted
\n
Prices in
\n
Active
\n
Markets
\n
for
\n
Identical
\n
Assets
\n
(Level 1)
\n
Significant
\n
Other
\n
Observable
\n
Inputs
\n
(Level 2)
\n
Significant
\n
Unobservable
\n
Inputs
\n
(Level 3)
\n
Cash and cash equivalents
4
4
\u2014
\u2014
\n
Equity securities
95
1
94
\u2014
\n
Government debt securities
59
\u2014
59
\u2014
\n
Corporate debt securities
120
\u2014
98
22
\n
Investment funds
87
1
86
\u2014
\n
Real estate
6
\u2014
6
\u2014
\n
Other (mainly insurance assets)
194
\u2014
38
156
\n
Total
565
6
381
178
\n
The Group\u2019s detailed pension plan asset allocation including the fair value measurements of those plan assets as of
\n
December 31, 2021 is as follows:
\n
In millions of U.S. dollars
Total
\n
Quoted
\n
Prices in
\n
Active
\n
Markets
for
\n
Identical
\n
Assets
\n
(Level 1)
\n
Significant
\n
Other
\n
Observable
\n
Inputs
\n
(Level 2)
\n
Significant
\n
Unobservable
\n
Inputs
\n
(Level 3)
\n
Cash and cash equivalents
5
5
\u2014
\u2014
\n
Equity securities
130
2
128
\u2014
\n
Government debt securities
87
\u2014
87
\u2014
\n
Corporate debt securities
164
\u2014
139
25
\n
Investment funds
156
1
155
\u2014
\n
Real estate
10
\u2014
10
\u2014
\n
Other (mainly insurance assets)
191
\u2014
49
142
\n
Total
743
8
568
167
\n
The majority of plans (in the United Kingdom, United States and Switzerland) are governed by an independent board
\n
of trustees, which includes employer representatives.
\n
The Group\u2019s investment strategy for its pension plans is to optimize the long-term investment return on plan assets
\n
in relation to the liability structure to maintain an acceptable level of risk while minimizing the cost of providing
\n
pension benefits and maintaining adequate funding levels in accordance with applicable rules in each jurisdiction.
\n
The Group\u2019s practice is to periodically conduct a review in each subsidiary of its asset allocation strategy, in such a
\n
way that the asset allocation is in line with the targeted asset allocation within reasonable boundaries. The Group\u2019s
\n
asset portfolios are managed in such a way as to achieve adapted diversity. The Group does not manage any assets
\n
internally.
\n
After considering the funded status of the Group\u2019s defined benefit plans, movements in the discount rate,
\n
investment performance and related tax consequences, the Group may choose to make contributions to its pension
\n
plans in any given year in excess of required amounts. In 2022, the Group\u2019s contributions to plan assets were $25
\n
million (2021: $17 million) and it expects to contribute cash of $30 million in 2023.
\n
Other long-term employee benefits
\n
Other long-term employee benefits include seniority and loyalty award programs. The movements in the other long-
\n
term employee benefits liability are as follows:
\n
In millions of U.S. dollars
2022
2021
\n
Beginning of the year
99
108
\n
Service cost
17
14
\n
Interest cost
1
1
\n
Actuarial (gain) loss
\u2013
Experience
2
(1
)
\n
Actuarial (gain) loss
\u2013
Demographic assumptions
3
1
\n
Actuarial (gain) loss
\u2013
Financial assumptions
(20
)
(3
)
\n
Benefits paid
(6
)
(5
)
\n
Effect of foreign exchange translation
(6
)
(16
)
\n
End of the year
90
99
\n
The amounts recognized in the income statement related to other long-term benefits are as follows:
\n
In millions of U.S. dollars
2022
2021
\n
Service cost
17
14
\n
Current service cost
17
14
\n
Net interest cost
(14
)
(1
)
\n
Interest cost
1
1
\n
Immediate recognition of (gains) losses
(15
)
(2
)
\n
Total other long-term benefits costs
3
13
\n
Assumptions
\n
The weighted average assumptions used in the determination of pension and other long-term obligations are as
\n
follows:
\n
2022
2021
\n
Discount rate
1.84
%
1.50
%
\n
Inflation rate
1.87
%
1.73
%
\n
Future salary increase
2.26
%
1.69
%
\n
The discount rate was determined by reference to high quality corporate bond rates applicable to the respective
\n
country of each plan and estimated terms of the defined benefit obligation. As required by IAS 19, and for pension
\n
plans with plan assets, the interest income on plan assets is set equal to the corresponding discount rate.
\n
The average duration of Defined Benefit Obligations is 12 years in 2022 (2021: 14 years).
\n
As of December 31, 2022, an increase of the discount rate of 0.50% would have resulted in a reduction of the Defined
\n
Benefit Obligations of $50 million and a decrease of the discount rate of 0.50% would have resulted in an increase
\n
of the Defined Benefit Obligations by $55 million. An increase of the inflation rate of 0.50% would have resulted in
\n
an increase of the Defined Benefit Obligations of $11 million and a decrease of the inflation rate of 0.50% would
\n
have resulted in a decrease of the Defined Benefit Obligations of $11 million. An increase of the life expectancy of
\n
one year would have resulted in an increase of the Defined Benefit Obligations of $13 million and a decrease of the
\n
life expectancy of one year would have resulted in a decrease of the Defined Benefit Obligations of $13 million.
\n
These sensitivity analyses are based on a change in an assumption while holding all other assumptions constant.
\n
When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same
\n
method has been applied as when calculating the pension liability recognized within the consolidated statement of
\n
financial position.
\n
Assumptions regarding future mortality experience are set based on advice from published statistics and experience
\n
in each territory.
\n
Defined contribution plans
\n
The Group has certain defined contribution plans, which accrue benefits for employees on a pro-rata basis during
\n
their employment period based on their individual salaries. In 2022, the annual cost of these plans amounted to
\napproximately $100 million (2021: $101 million).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfProvisionsExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15957": {
"value": "
7.6.23. Trade accounts payable, other payables and accrued liabilities
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Trade accounts payable
2,122
1,582
\n
Dividends due to shareholders
60
55
\n
Taxes other than income taxes
68
58
\n
Advances from customers
225
25
\n
Advances from grants
37
34
\n
Royalties
32
29
\n
Deferred consideration for business acquisitions
-
27
\n
Other accrued liabilities
89
38
\n
Total other payables and accrued liabilities
511
266
\n
Advances from customers are primarily related to multi-annual capacity reservation and volume commitment
\n
agreements signed in 2022 with certain customers. These advances correspond to up-front payments received from
\n
customers, usually on a quarterly basis or according to contractually defined installments. They are recognized in
\n
earnings according to the satisfaction, upon deliveries or over time, of the corresponding performance obligations.
\n
Some of these arrangements include take-or-pay clauses, according to which the Group is entitled to receive the full
\n
amount of the contractual committed fees in case of non-compliant orders from those customers. Certain
\n
agreements include penalties in case the Group is not able to fulfill its contractual obligations. No significant
\n
provision for those penalties was reported on the consolidated statement of financial position as of December 31,
\n
2022.
7.6.25. Revenues
\n
7.6.25.1.
Nature of goods and services
\n
The Group designs, develops, manufactures and markets a broad range of products, including discrete and standard
\n
commodity components, ASICs, full custom devices and semi-custom devices and ASSPs for analog, digital and
\n
mixed-signal applications. In addition, the Group participates in the manufacturing value chain of smartcard
\n
products, which includes the production and sale of both silicon chips and smartcards.
\n
The principal activities \u2014 separated by reportable segments \u2014 from which the Group generates its revenues are
\n
described in Note 7.6.26.
\n
Other revenues consist of license revenue, service revenue related to transferring licenses, patent royalty income,
\n
sale of scrap materials and manufacturing by-products.
\n
While the majority of the Group\u2019s sales agreements contain standard terms and conditions, the Group may, from
\n
time to time, enter into agreements that contain multiple performance obligations or terms and conditions. Those
\n
agreements concern principally the revenues from services, where the performance obligation is satisfied over time.
\n
The objective when allocating the transaction price is to allocate the transaction price to each performance
\n
obligation (or distinct good or service) in an amount that depicts the amount of consideration to which the Group
\n
expects to be entitled in exchange for transferring the promised goods or services to the customer.
\n
7.6.25.2.
Revenue recognition and disaggregation
\n
The Group recognizes revenue from products sold to a customer, including distributors, when it satisfies a
\n
performance obligation at a point in time by transferring control over a product to the customer. This usually occurs
\n
at the time of shipment. The performance obligations linked to the sale of goods contracts usually have original
\n
expected length of less than one year. The transaction price is determined based on the contract terms, adjusted for
\n
price protection if applicable. The revenues from services are usually linked to performance obligations transferred
\n
over time and are recognized in line with the contract terms.
\n
In 2022, the Group signed several multi-annual capacity reservation and volume commitment arrangements with
\n
certain customers. These agreements constitute a binding commitment for the customers to purchase and for the
\n
Company to supply allocated commitment volumes in exchange for additional consideration. The consideration
\n
related to commitment fees is reported as revenues from sale of products as it is usually based on delivered
\n
quantities. Advances from customers received as part of those agreements are described in Note 7.6.21 and 7.6.23.
\n
The payment terms typically range between 30 and 90 days.
The Group\u2019s consolidated total revenues disaggregated by operating segment are presented in Note 7.6.26. The
\n
following table presents the Group\u2019s consolidated total revenues disaggregated by geographical region of shipment,
\n
nature and market channel.
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Total revenues by geographical region of shipment
\n
(1)
\n
EMEA
3,619
2,557
\n
Americas
2,310
1,525
\n
Asia Pacific
10,199
8,679
\n
Total revenues
16,128
12,761
\n
Total revenues by nature
\n
Revenues from sale of products
15,953
12,560
\n
Revenues from sale of services
130
169
\n
Other revenues
45
32
\n
Total revenues
16,128
12,761
\n
Total revenues by market channel
\n
(2)
\n
Original Equipment Manufacturers (
\u201c
OEM
\u201d
)
10,764
8,486
\n
Distribution
5,364
4,275
\n
Total revenues
16,128
12,761
\n
(1)
Total revenues by geographical region of shipment are classified by location of customer invoiced or reclassified by shipment destination in
\n
line with customer demand. For example, products ordered by U.S.-based companies to be invoiced to Asia Pacific affiliates are classified
\n
as Asia Pacific revenues. Furthermore, the Group, among the different periods, may be affected by shifts in shipments from one location to
\n
another, as requested by customers.
\n
(2)
Original Equipment Manufacturers (\u201cOEM\u201d) are the end-customers to which the Group provides direct marketing application engineering
\n
support, while Distribution refers to the distributors and representatives that the Group engages to distribute its products around the world.
\n
The Group does not disclose the value of unsatisfied performance obligations for (i) contracts with an original
\n
expected length of one year or less and (ii) contracts for which the Group recognizes revenue at the amount to which
\n
the Group has the right to invoice for services performed.
\n
In 2022, the Group\u2019s largest customer, Apple represented 16.8% (2021: 20.5%) of consolidated net revenues,
\n
reported in ADG, AMS and MDG segments.
\n
7.6.26. Segment information
The following tables present the Group\u2019s consolidated total revenues and consolidated operating income by
\n
reportable segment.
\n
Total revenues by operating segment:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
ADG
5,969
4,350
\n
AMS
\n
(1)
\n
4,911
4,587
\n
MDG
\n
(1)
\n
5,228
3,802
\n
Total revenues of operating segments
16,108
12,739
\n
Others
20
22
\n
Total revenues
16,128
12,761
\n
(1)
Effective July 1, 2022, the Low Power RF business unit was transferred from AMS to MDG with no significant impact on segment reporting.
\n
Prior period has been adjusted accordingly.
The following is a summary of operations by entities located within the indicated geographic areas for 2022 and
\n
2021. Total revenues represent sales to third parties from the country in which each subsidiary is domiciled. The
\n
Company is incorporated under Dutch law with head offices located in the Netherlands while the Company\u2019s
\n
operational office and headquarters are located in Switzerland. A significant portion of property, plant and
\n
equipment expenditures is attributable to front-end and back-end facilities, located in the different countries in
\n
which the Group operates. As such, the Group mainly allocates capital spending resources according to geographic
\n
areas rather than along product segment areas.
\n
Total revenues by geographical area:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Switzerland
4,569
3,282
\n
France
153
126
\n
Italy
47
56
\n
USA
1,981
1,253
\n
Singapore
8,604
7,442
\n
Japan
758
586
\n
Other countries
16
16
\n
Total
16,128
12,761
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRevenueExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15958": {
"value": "
7.6.23. Trade accounts payable, other payables and accrued liabilities
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Trade accounts payable
2,122
1,582
\n
Dividends due to shareholders
60
55
\n
Taxes other than income taxes
68
58
\n
Advances from customers
225
25
\n
Advances from grants
37
34
\n
Royalties
32
29
\n
Deferred consideration for business acquisitions
-
27
\n
Other accrued liabilities
89
38
\n
Total other payables and accrued liabilities
511
266
\n
Advances from customers are primarily related to multi-annual capacity reservation and volume commitment
\n
agreements signed in 2022 with certain customers. These advances correspond to up-front payments received from
\n
customers, usually on a quarterly basis or according to contractually defined installments. They are recognized in
\n
earnings according to the satisfaction, upon deliveries or over time, of the corresponding performance obligations.
\n
Some of these arrangements include take-or-pay clauses, according to which the Group is entitled to receive the full
\n
amount of the contractual committed fees in case of non-compliant orders from those customers. Certain
\n
agreements include penalties in case the Group is not able to fulfill its contractual obligations. No significant
\n
provision for those penalties was reported on the consolidated statement of financial position as of December 31,
\n
2022.
7.6.25. Revenues
\n
7.6.25.1.
Nature of goods and services
\n
The Group designs, develops, manufactures and markets a broad range of products, including discrete and standard
\n
commodity components, ASICs, full custom devices and semi-custom devices and ASSPs for analog, digital and
\n
mixed-signal applications. In addition, the Group participates in the manufacturing value chain of smartcard
\n
products, which includes the production and sale of both silicon chips and smartcards.
\n
The principal activities \u2014 separated by reportable segments \u2014 from which the Group generates its revenues are
\n
described in Note 7.6.26.
\n
Other revenues consist of license revenue, service revenue related to transferring licenses, patent royalty income,
\n
sale of scrap materials and manufacturing by-products.
\n
While the majority of the Group\u2019s sales agreements contain standard terms and conditions, the Group may, from
\n
time to time, enter into agreements that contain multiple performance obligations or terms and conditions. Those
\n
agreements concern principally the revenues from services, where the performance obligation is satisfied over time.
\n
The objective when allocating the transaction price is to allocate the transaction price to each performance
\n
obligation (or distinct good or service) in an amount that depicts the amount of consideration to which the Group
\n
expects to be entitled in exchange for transferring the promised goods or services to the customer.
\n
7.6.25.2.
Revenue recognition and disaggregation
\n
The Group recognizes revenue from products sold to a customer, including distributors, when it satisfies a
\n
performance obligation at a point in time by transferring control over a product to the customer. This usually occurs
\n
at the time of shipment. The performance obligations linked to the sale of goods contracts usually have original
\n
expected length of less than one year. The transaction price is determined based on the contract terms, adjusted for
\n
price protection if applicable. The revenues from services are usually linked to performance obligations transferred
\n
over time and are recognized in line with the contract terms.
\n
In 2022, the Group signed several multi-annual capacity reservation and volume commitment arrangements with
\n
certain customers. These agreements constitute a binding commitment for the customers to purchase and for the
\n
Company to supply allocated commitment volumes in exchange for additional consideration. The consideration
\n
related to commitment fees is reported as revenues from sale of products as it is usually based on delivered
\n
quantities. Advances from customers received as part of those agreements are described in Note 7.6.21 and 7.6.23.
\n
The payment terms typically range between 30 and 90 days.
The Group\u2019s consolidated total revenues disaggregated by operating segment are presented in Note 7.6.26. The
\n
following table presents the Group\u2019s consolidated total revenues disaggregated by geographical region of shipment,
\n
nature and market channel.
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Total revenues by geographical region of shipment
\n
(1)
\n
EMEA
3,619
2,557
\n
Americas
2,310
1,525
\n
Asia Pacific
10,199
8,679
\n
Total revenues
16,128
12,761
\n
Total revenues by nature
\n
Revenues from sale of products
15,953
12,560
\n
Revenues from sale of services
130
169
\n
Other revenues
45
32
\n
Total revenues
16,128
12,761
\n
Total revenues by market channel
\n
(2)
\n
Original Equipment Manufacturers (
\u201c
OEM
\u201d
)
10,764
8,486
\n
Distribution
5,364
4,275
\n
Total revenues
16,128
12,761
\n
(1)
Total revenues by geographical region of shipment are classified by location of customer invoiced or reclassified by shipment destination in
\n
line with customer demand. For example, products ordered by U.S.-based companies to be invoiced to Asia Pacific affiliates are classified
\n
as Asia Pacific revenues. Furthermore, the Group, among the different periods, may be affected by shifts in shipments from one location to
\n
another, as requested by customers.
\n
(2)
Original Equipment Manufacturers (\u201cOEM\u201d) are the end-customers to which the Group provides direct marketing application engineering
\n
support, while Distribution refers to the distributors and representatives that the Group engages to distribute its products around the world.
\n
The Group does not disclose the value of unsatisfied performance obligations for (i) contracts with an original
\n
expected length of one year or less and (ii) contracts for which the Group recognizes revenue at the amount to which
\n
the Group has the right to invoice for services performed.
\n
In 2022, the Group\u2019s largest customer, Apple represented 16.8% (2021: 20.5%) of consolidated net revenues,
\n
reported in ADG, AMS and MDG segments.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15960": {
"value": "7.6.23. Trade accounts payable, other payables and accrued liabilities
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Trade accounts payable
2,122
1,582
\n
Dividends due to shareholders
60
55
\n
Taxes other than income taxes
68
58
\n
Advances from customers
225
25
\n
Advances from grants
37
34
\n
Royalties
32
29
\n
Deferred consideration for business acquisitions
-
27
\n
Other accrued liabilities
89
38
\n
Total other payables and accrued liabilities
511
266
\n
Advances from customers are primarily related to multi-annual capacity reservation and volume commitment
\n
agreements signed in 2022 with certain customers. These advances correspond to up-front payments received from
\n
customers, usually on a quarterly basis or according to contractually defined installments. They are recognized in
\n
earnings according to the satisfaction, upon deliveries or over time, of the corresponding performance obligations.
\n
Some of these arrangements include take-or-pay clauses, according to which the Group is entitled to receive the full
\n
amount of the contractual committed fees in case of non-compliant orders from those customers. Certain
\n
agreements include penalties in case the Group is not able to fulfill its contractual obligations. No significant
\n
provision for those penalties was reported on the consolidated statement of financial position as of December 31,
\n2022.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16163": {
"value": "7.6.26. Segment information
The Group designs, develops, manufactures and markets a broad range of products, including discrete and standard
\n
commodity components, ASICs, full custom devices and semi-custom devices and ASSPs for analog, digital and
\n
mixed-signal applications. In addition, the Group participates in the manufacturing value chain of smartcard
\n
products, which includes the production and sale of both silicon chips and smartcards.
\n
The Group\u2019s operating segments are as follows:
\n
\u2022
Automotive and Discrete Group (ADG), comprised of dedicated automotive integrated circuits (\u201cICs\u201d), and
\n
discrete and power transistor products.
\n
\u2022
Analog, MEMS and Sensors Group (AMS), comprised of analog, smart power, MEMS sensors and
\n
actuators, and optical sensing solutions.
\n
\u2022
Microcontrollers and Digital ICs Group (MDG), comprised of general-purpose microcontrollers and
\n
microprocessors, connected security products (e.g. embedded secured elements and NFC readers),
\n
memories (e.g. serial and page EEPROM) and RF and Communications products.
\n
Effective July 1, 2022, the Low Power RF business unit was transferred from AMS (within the Analog sub-group) to
\n
MDG (within the Microcontrollers and Memories sub-group) with no significant impact on segment reporting. Prior
\n
year period has been adjusted accordingly.
\n
For the computation of the segments\u2019 internal financial measurements, the Group uses certain internal rules of
\n
allocation for the costs not directly chargeable to the segments, including cost of sales, SG&A expenses and a part
\n
of R&D expenses. In compliance with the Group\u2019s internal policies, certain costs are not allocated to the segments,
\n
but reported in \u201cOthers\u201d. Those comprise unused capacity charges, including reduced manufacturing activity due to
\n
COVID-19 and incidents leading to power outage, impairment, restructuring charges and other related closure costs,
\n
management reorganization expenses, start-up and phase-out costs of certain manufacturing facilities, and other
\n
unallocated income (expenses) such as: strategic or special R&D programs, certain corporate-level operating
\n
expenses, patent claims and litigations, and other costs that are not allocated to product groups, as well as operating
\n
earnings of other products. In addition, depreciation and amortization expense is part of the manufacturing costs
\n
allocated to the segments and is neither identified as part of the inventory variation nor as part of the unused
\n
capacity charges; therefore, it cannot be isolated in cost of sales. Finally, public grants are allocated to the Group\u2019s
\n
segments proportionally to the incurred R&D expenses on the sponsored projects.
\n
Wafer costs are allocated to the segments based on actual cost. From time to time, with respect to specific
\n
technologies, wafer costs are allocated to segments based on market price.
\n
The following tables present the Group\u2019s consolidated total revenues and consolidated operating income by
\n
reportable segment.
\n
Total revenues by operating segment:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
ADG
5,969
4,350
\n
AMS
\n
(1)
\n
4,911
4,587
\n
MDG
\n
(1)
\n
5,228
3,802
\n
Total revenues of operating segments
16,108
12,739
\n
Others
20
22
\n
Total revenues
16,128
12,761
\n
(1)
Effective July 1, 2022, the Low Power RF business unit was transferred from AMS to MDG with no significant impact on segment reporting.
\n
Prior period has been adjusted accordingly.
\n
Operating profit by operating segment:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
ADG
1,464
509
\n
AMS
\n
(3)
\n
1,234
1,021
\n
MDG
\n
(3)
\n
1,828
907
\n
Sub-total operating profit of operating segments
4,526
2,437
\n
Impairment, restructuring charges and other related closure costs
(11
)
(2
)
\n
Unallocated manufacturing results
(68
)
(15
)
\n
Strategic and other research and development programs and other
\n
non-allocated provisions
\n
(2)
\n
(20
)
(11
)
\n
IFRS/U.S. GAAP Adjustments
\n
(1)
\n
:
\n
Net impact of capitalized development costs
92
119
\n
Derivative instruments not designated as hedge instruments under
\n
IFRS
25
(39
)
\n
IFRIC 21 adjustment on levies
1
\n
Employee benefits adjustments
24
7
\n
Asset acquisition tax incentives
(40
)
(51
)
\n
IFRS 16 adjustment on lease expenses
5
7
\n
Operating profit
4,534
2,452
\n
(1)
The operating profit allocated by operating segments as reported in the above table is based on the Group\u2019s primary financial reporting
\n
framework (U.S. GAAP) and reflects the way the Chief Operating Decision Maker (\u201cCODM\u201d) monitors the operating performance of each
\n
segment.
\n
(2)
Includes unallocated income and expenses such as certain corporate-level operating expenses and other income (costs) that are not
\n
allocated to the product segments.
\n
(3)
Effective July 1, 2022, the Low Power RF business unit was transferred from AMS to MDG with no significant impact on segment reporting.
\n
Prior period has been adjusted accordingly.
\n
The following is a summary of operations by entities located within the indicated geographic areas for 2022 and
\n
2021. Total revenues represent sales to third parties from the country in which each subsidiary is domiciled. The
\n
Company is incorporated under Dutch law with head offices located in the Netherlands while the Company\u2019s
\n
operational office and headquarters are located in Switzerland. A significant portion of property, plant and
\n
equipment expenditures is attributable to front-end and back-end facilities, located in the different countries in
\n
which the Group operates. As such, the Group mainly allocates capital spending resources according to geographic
\n
areas rather than along product segment areas.
\n
Total revenues by geographical area:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Switzerland
4,569
3,282
\n
France
153
126
\n
Italy
47
56
\n
USA
1,981
1,253
\n
Singapore
8,604
7,442
\n
Japan
758
586
\n
Other countries
16
16
\n
Total
16,128
12,761
\n
Non-current assets other than other non-current financial assets and deferred tax assets:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Netherlands
2,769
1,499
\n
Switzerland
1,616
1,494
\n
France
2,246
1,688
\n
Italy
1,909
1,737
\n
USA
61
44
\n
Singapore
896
673
\n
Other countries
1,132
941
\n
Total
10,629
8,076",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16421": {
"value": "
7.6.27. Expenses by nature
\n
Expenses recorded as cost of sales, R&D and SG&A are detailed as follows:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Depreciation and amortization
1,509
1,349
\n
Employee benefit expenses
3,679
3,602
\n
Purchase of materials
3,308
2,828
\n
Power and Gas
380
273
\n
Freight
203
177
\n
Purchase of subcontracting services
2,559
2,064
\n
Changes in inventories
(650
)
(188
)
\n
Transportation
67
30
\n
Impairment charge
126
40
\n
Royalties and patents
120
99
\n
Advertising costs
18
14
\n
Other expenses
391
127
\n
Total cost of sales, selling, general and administrative, and research and
\n
development
11,710
10,415
\n
Employee benefit expenses are detailed as follows:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Wages and salaries
2,800
2,710
\n
Payroll taxes and other social contribution charges
522
527
\n
Share-based compensation expense
215
210
\n
Pensions and other long-term benefits expense
142
155
\n
Total employee benefit expenses
3,679
3,602
\n
Of which included in:
\n
Cost of sales
1,621
1,595
\n
Selling, general and administrative
990
955
\n
Research and development
1,068
1,052
7.6.28. Other income / expenses
Other expenses consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Start-up and phase-out costs
13
\u2014
\n
Foreign exchange forward contracts and other currency derivatives
44
35
\n
Net foreign exchange loss
9
2
\n
Patent costs
8
10
\n
Sanitation and other costs incurred to prevent the spread of COVID-19
10
19
\n
Other expenses
3
4
\n
Total other expenses
87
70
Start-up costs represent costs incurred in the ramp-up phase of the Group\u2019s newly integrated manufacturing
\n
facilities. Phase-out costs are costs incurred during the closing stage of a Group\u2019s manufacturing facility.
\n
Patent costs mainly include legal and attorney fees and payment for claims, patent pre-litigation consultancy and
\n
legal fees.
They are reported net of settlements, if any, which primarily include reimbursements of prior patent
\n
litigation costs.
\n
COVID-19 incremental costs are mainly composed of incremental expenses primarily related to sanitary measures
\n
undertaken to protect employees.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfExpensesExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16424": {
"value": "7.6.27. Expenses by nature
Expenses recorded as cost of sales, R&D and SG&A are detailed as follows:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Depreciation and amortization
1,509
1,349
\n
Employee benefit expenses
3,679
3,602
\n
Purchase of materials
3,308
2,828
\n
Power and Gas
380
273
\n
Freight
203
177
\n
Purchase of subcontracting services
2,559
2,064
\n
Changes in inventories
(650
)
(188
)
\n
Transportation
67
30
\n
Impairment charge
126
40
\n
Royalties and patents
120
99
\n
Advertising costs
18
14
\n
Other expenses
391
127
\n
Total cost of sales, selling, general and administrative, and research and
\n
development
11,710
10,415
\n
Employee benefit expenses are detailed as follows:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Wages and salaries
2,800
2,710
\n
Payroll taxes and other social contribution charges
522
527
\n
Share-based compensation expense
215
210
\n
Pensions and other long-term benefits expense
142
155
\n
Total employee benefit expenses
3,679
3,602
\n
Of which included in:
\n
Cost of sales
1,621
1,595
\n
Selling, general and administrative
990
955
\n
Research and development
1,068
1,052",
"dimensions": {
"concept": "ifrs-full:DisclosureOfExpensesByNatureExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16525": {
"value": "
7.6.28. Other income / expenses
\n
Other income consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
R&D funding
177
162
\n
Foreign exchange forward contracts and other currency derivatives
24
9
\n
Gain on sale of non-current assets
2
5
\n
Total other income
203
176
The Group receives public funding from governmental bodies in several jurisdictions. Public funding for research,
\n
development and other innovation programs is recognized ratably as the related costs are incurred once the
\n
agreement with the respective governmental body has been signed and all applicable conditions have been met.
\n
Public funding received in the year ended December 31, 2017, from the Nano2017 program with the French
\n
government is subject to a financial return in the year 2024 and depends on the future cumulative sales of a certain
\n
product group over a five-year period. As such, the criteria for recognizing the grant income are not met. As of
\n
December 31, 2022 an amount of $46 million, corresponding primarily to the Nano2017 program, was reported in
\n
as a liability in the consolidated statement of financial position as of December 31, 2022, compared to $44 million
\n
as of December 31, 2021.
\n
Foreign exchange gains (losses), net of foreign exchange forward contracts and other currency derivatives, represent
\n
the portion of exchange rate changes on transactions denominated in currencies other than the entity\u2019s functional
\n
currency and the changes in fair value of derivative instruments which are not designated as hedge, as described in
\n
Note 7.6.14.4.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16529": {
"value": "7.6.28. Other income / expenses
Other expenses consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Start-up and phase-out costs
13
\u2014
\n
Foreign exchange forward contracts and other currency derivatives
44
35
\n
Net foreign exchange loss
9
2
\n
Patent costs
8
10
\n
Sanitation and other costs incurred to prevent the spread of COVID-19
10
19
\n
Other expenses
3
4
\n
Total other expenses
87
70
Start-up costs represent costs incurred in the ramp-up phase of the Group\u2019s newly integrated manufacturing
\n
facilities. Phase-out costs are costs incurred during the closing stage of a Group\u2019s manufacturing facility.
\n
Patent costs mainly include legal and attorney fees and payment for claims, patent pre-litigation consultancy and
\n
legal fees.
They are reported net of settlements, if any, which primarily include reimbursements of prior patent
\n
litigation costs.
\n
COVID-19 incremental costs are mainly composed of incremental expenses primarily related to sanitary measures
\n
undertaken to protect employees.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16530": {
"value": "7.6.28. Other income / expenses
Other income consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
R&D funding
177
162
\n
Foreign exchange forward contracts and other currency derivatives
24
9
\n
Gain on sale of non-current assets
2
5
\n
Total other income
203
176
Other expenses consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Start-up and phase-out costs
13
\u2014
\n
Foreign exchange forward contracts and other currency derivatives
44
35
\n
Net foreign exchange loss
9
2
\n
Patent costs
8
10
\n
Sanitation and other costs incurred to prevent the spread of COVID-19
10
19
\n
Other expenses
3
4
\n
Total other expenses
87
70
\n
The Group receives public funding from governmental bodies in several jurisdictions. Public funding for research,
\n
development and other innovation programs is recognized ratably as the related costs are incurred once the
\n
agreement with the respective governmental body has been signed and all applicable conditions have been met.
\n
Public funding received in the year ended December 31, 2017, from the Nano2017 program with the French
\n
government is subject to a financial return in the year 2024 and depends on the future cumulative sales of a certain
\n
product group over a five-year period. As such, the criteria for recognizing the grant income are not met. As of
\n
December 31, 2022 an amount of $46 million, corresponding primarily to the Nano2017 program, was reported in
\n
as a liability in the consolidated statement of financial position as of December 31, 2022, compared to $44 million
\n
as of December 31, 2021.
\n
Foreign exchange gains (losses), net of foreign exchange forward contracts and other currency derivatives, represent
\n
the portion of exchange rate changes on transactions denominated in currencies other than the entity\u2019s functional
\n
currency and the changes in fair value of derivative instruments which are not designated as hedge, as described in
\n
Note 7.6.14.4.
\n
Start-up costs represent costs incurred in the ramp-up phase of the Group\u2019s newly integrated manufacturing
\n
facilities. Phase-out costs are costs incurred during the closing stage of a Group\u2019s manufacturing facility.
\n
Patent costs mainly include legal and attorney fees and payment for claims, patent pre-litigation consultancy and
\n
legal fees.
They are reported net of settlements, if any, which primarily include reimbursements of prior patent
\n
litigation costs.
\n
COVID-19 incremental costs are mainly composed of incremental expenses primarily related to sanitary measures
\nundertaken to protect employees.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16625": {
"value": "
7.6.29. Finance income / costs
\n
Total finance income consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Change in fair value of the call option of Tranche A convertible bonds
\n
issued on August 4, 2020
2
\u2014
\n
Change in fair value of the call option of Tranche B convertible bonds
\n
issued on August 4, 2020
5
\u2014
\n
Change in fair value of the conversion option of Tranche A convertible
\n
bonds issued on August 4, 2020
145
\u2014
\n
Change in fair value of the conversion option of Tranche B convertible
\n
bonds issued on August 4, 2020
131
\u2014
\n
Interest income on quoted debt securities
1
1
\n
Other finance income
70
12
\n
Total finance income
354
13
As described in Note 7.6.14.3, the change in fair value of the non-equity derivative instruments corresponding to the
\n
bondholders\u2019 conversion option and the issuer\u2019s call option embedded in the unsecured senior convertible bonds
\n
issued on August 4, 2020, generated an income of $276 million and $7 million respectively, for the year ended
\n
December 31, 2022 compared to a cost of $197 million and gain of $6 million respectively, for the year ended
\n
December 31, 2021. Additionally, the net-share settlement of the Tranche B of the unsecured senior convertible
\n
bonds issued on July 3, 2017 generated a cost of $189 million for the year ended December 31, 2021.
Other finance income is related to cash and cash equivalents and short-term deposits. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16627": {
"value": "7.6.29. Finance income / costs
Total finance costs consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Interest on Senior Bonds
25
38
\n
2017 issued senior convertible bond net-share settlement (Tranche B)
\u2014
189
\n
Change in fair value of the conversion option of Tranche A convertible bonds
\n
issued on August 4, 2020
\u2014
98
\n
Change in fair value of the conversion option of Tranche B convertible bonds
\n
issued on August 4, 2020
\u2014
99
\n
Change in fair value of the call option of Tranche A convertible bonds issued
\n
on August 4, 2020
\u2014
2
\n
Change in fair value of the call option of Tranche B convertible bonds issued
\n
on August 4, 2020
\u2014
4
\n
Interests on lease liabilities
5
5
\n
Interests on long-term loans and borrowings
8
1
\n
Bank charges and commissions
4
3
\n
Other finance expense
\u2014
2
\n
Total finance costs
42
441
\n
No borrowing costs were capitalized in 2022 and 2021.
\n
As described in Note 7.6.14.3, the change in fair value of the non-equity derivative instruments corresponding to the
\n
bondholders\u2019 conversion option and the issuer\u2019s call option embedded in the unsecured senior convertible bonds
\n
issued on August 4, 2020, generated an income of $276 million and $7 million respectively, for the year ended
\n
December 31, 2022 compared to a cost of $197 million and gain of $6 million respectively, for the year ended
\n
December 31, 2021. Additionally, the net-share settlement of the Tranche B of the unsecured senior convertible
\n
bonds issued on July 3, 2017 generated a cost of $189 million for the year ended December 31, 2021.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceCostExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16628": {
"value": "7.6.29. Finance income / costs
Total finance income consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Change in fair value of the call option of Tranche A convertible bonds
\n
issued on August 4, 2020
2
\u2014
\n
Change in fair value of the call option of Tranche B convertible bonds
\n
issued on August 4, 2020
5
\u2014
\n
Change in fair value of the conversion option of Tranche A convertible
\n
bonds issued on August 4, 2020
145
\u2014
\n
Change in fair value of the conversion option of Tranche B convertible
\n
bonds issued on August 4, 2020
131
\u2014
\n
Interest income on quoted debt securities
1
1
\n
Other finance income
70
12
\n
Total finance income
354
13
Total finance costs consisted of the following:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Interest on Senior Bonds
25
38
\n
2017 issued senior convertible bond net-share settlement (Tranche B)
\u2014
189
\n
Change in fair value of the conversion option of Tranche A convertible bonds
\n
issued on August 4, 2020
\u2014
98
\n
Change in fair value of the conversion option of Tranche B convertible bonds
\n
issued on August 4, 2020
\u2014
99
\n
Change in fair value of the call option of Tranche A convertible bonds issued
\n
on August 4, 2020
\u2014
2
\n
Change in fair value of the call option of Tranche B convertible bonds issued
\n
on August 4, 2020
\u2014
4
\n
Interests on lease liabilities
5
5
\n
Interests on long-term loans and borrowings
8
1
\n
Bank charges and commissions
4
3
\n
Other finance expense
\u2014
2
\n
Total finance costs
42
441
\n
No borrowing costs were capitalized in 2022 and 2021.
\n
As described in Note 7.6.14.3, the change in fair value of the non-equity derivative instruments corresponding to the
\n
bondholders\u2019 conversion option and the issuer\u2019s call option embedded in the unsecured senior convertible bonds
\n
issued on August 4, 2020, generated an income of $276 million and $7 million respectively, for the year ended
\n
December 31, 2022 compared to a cost of $197 million and gain of $6 million respectively, for the year ended
\n
December 31, 2021. Additionally, the net-share settlement of the Tranche B of the unsecured senior convertible
\n
bonds issued on July 3, 2017 generated a cost of $189 million for the year ended December 31, 2021.
\n
Other finance income is related to cash and cash equivalents and short-term deposits.
\nLeases are further described in Note 7.6.11.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16759": {
"value": "7.6.31. Income tax
The major components of income tax benefit (expense) for the years ended December 31, 2022 and 2021 are:
\n
Consolidated income statement
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
The Netherlands taxes
\u2013
current
\u2014
\u2014
\n
Foreign taxes
\u2013
current
(510
)
(285
)
\n
Current taxes
(510
)
(285
)
\n
The Netherlands taxes
\u2013
deferred
\u2014
\u2014
\n
Foreign deferred taxes
(7
)
(22
)
\n
Deferred taxes
(7
)
(22
)
\n
Income tax expense
(517
)
(307
)
\n
Consolidated statement of other comprehensive income (deferred tax related to items charged or credited directly
\n
to equity during the year).
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Re-measurements of employee benefit obligations
(23
)
(3
)
\n
Income tax credited (charged) directly to equity
(23
)
(3
)
\n
A reconciliation between income tax benefit and the product of income before tax multiplied by The Netherlands\u2019
\n
statutory tax rate for the years ended December 31, 2022 and 2021 is as follows:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Gain (loss) before income tax
4,846
2,024
\n
Income tax benefit (expense) at The Netherlands
\u2019
statutory tax
\n
rate of 25.8% (2021: 25%)
(1,251
)
(506
)
\n
Permanent differences and other non-deductible, non-taxable items
118
(66
)
\n
Change in the recognition of unrecognized tax losses
140
(2
)
\n
Effect on deferred tax rates of changes in enacted tax rates
6
6
\n
Current year credits
30
39
\n
Other taxes and credits
(51
)
(22
)
\n
Benefits from tax holidays
60
49
\n
Current year tax risk
(12
)
(8
)
\n
Earnings (losses) of subsidiaries taxed at different rates
443
203
\n
Income tax expense
(517
)
(307
)
\n
\n
\n
The effect of the change in fair value measurement related to the convertible debt is reported in the line \u201cPermanent
\n
differences and other non-deductible, non-taxable items\u201d in the above table.
\n
During the year ended December 31, 2022, the Group did not recognize deferred tax assets on net operating losses
\n
for an approximate amount of $4 million (2021: $3 million). The variation on the recognition of the deferred tax
\n
assets for $140 million is related to the assessment of the recoverability of the deferred tax assets in France, Malta
\n
and the U.S. following the improved stability of profits of the Group.
\n
The changes in enacted tax rates resulted in a decrease of tax expense of $6 million in 2022 (decrease of $6 million
\n
in 2021).
\n
The tax holidays represent a tax exemption period aimed at attracting foreign technological investment in certain
\n
tax jurisdictions. These agreements are present in various countries and include programs that reduce up to 100%
\n
of taxes in years affected by the agreements. The Group\u2019s tax holidays expire at various dates through the year
\n
ending December 31, 2029.
\n
The variation in the Earnings (losses) of subsidiaries taxed at different rates is related to the increase of the Group\u2019s
\n
subsidiaries profitability.
\n
For a particular tax-paying component of the Group and within a particular tax jurisdiction, all deferred tax assets
\n
and liabilities are offset and presented as a single amount. The Group does not offset deferred tax assets and
\n
liabilities attributable to different tax-paying components or to different tax jurisdictions.
\n
In millions of U.S. dollars
\n
December
31,
\n
2021
\n
Exchange
\n
differences
\n
Income
tax
\n
charged
\n
directly
\n
to
equity
\n
Income
\n
statement
\n
benefit
\n
(expense)
\n
December
31,
\n
2022
\n
Deferred tax assets
\n
Tax losses and investments credits
324
(19)
\u2014
(8)
297
\n
Impairment charge and restructuring
4
\u2014
\u2014
\u2014
4
\n
Fixed asset depreciation
60
(6)
\u2014
14
68
\n
Receivables for government funding
64
(7)
\u2014
64
121
\n
Pension service cost
26
(3)
(23)
62
62
\n
Other
94
\u2014
(5)
22
111
\n
Total deferred tax assets
572
(35)
(28)
154
663
\n
Deferred tax liabilities
\n
Accelerated tax depreciation
(32)
\u2014
\u2014
(5)
(37)
\n
Acquired intangible assets
(22)
1
\u2014
(2)
(23)
\n
Advances of government funding
(115)
11
\u2014
(73)
(177)
\n
Capitalized development cost
(1)
\u2014
\u2014
(67)
(68)
\n
Other
(12)
\u2014
\u2014
(14)
(26)
\n
Total deferred tax liabilities
(182)
12
\u2014
(161)
(331)
\n
Net deferred tax
390
(23)
(28)
(7)
332
\n
The line other deferred tax assets is primarily composed of deferred tax assets related to Inventory, Stock Awards
\n
and Commercial Accruals.
\n
In millions of U.S. dollars
\n
December
31,
\n
2020
\n
Exchange
\n
differences
\n
Income
tax
\n
charged
\n
directly
\n
to
equity
\n
Income
\n
statement
\n
benefit
\n
(expense)
\n
December
31,
\n
2021
\n
Deferred tax assets
\n
Tax losses
260
(4)
\u2014
68
324
\n
Impairment charge and restructuring
3
1
\u2014
\u2014
4
\n
Fixed asset depreciation
85
(2)
\u2014
(23)
60
\n
Receivables for government funding
40
\u2014
\u2014
24
64
\n
Pension service cost
103
(1)
(3)
(73)
26
\n
Other
99
(2)
\u2014
(3)
94
\n
Total deferred tax assets
590
(8)
(3)
(7)
572
\n
Deferred tax liabilities
\n
Accelerated tax depreciation
(21)
\u2014
\u2014
(11)
(32)
\n
Acquired intangible assets
(40)
1
\u2014
17
(22)
\n
Advances of government funding
(94)
1
\u2014
(22)
(115)
\n
Other
(16)
2
\u2014
1
(13)
\n
Total deferred tax liabilities
(171)
4
\u2014
(15)
(182)
\n
Net deferred tax
419
(4)
(3)
(22)
390
\n
The line other deferred tax assets is primarily composed of deferred tax assets related to Inventory, Stock Awards
\n
and Commercial Accruals.
\n
As of December 31, 2022, the Group has deferred tax assets on tax loss carry forwards and investment credits that
\n
expire starting 2023 out of which a deferred tax assets of $297 million are recognized, the expiry of the deferred tax
\n
assets as follows:
\n
Year
\n
In millions of U.S.
\n
dollars
\n
2023
1
\n
2024
\u2014
\n
2025
\u2014
\n
2026
\u2014
\n
2027
2
\n
Thereafter
319
\n
Total
322
\n
The majority of the amount reported on the line \u201cthereafter\u201d has no expiration date.
\n
As of December 31, 2021, the Group has deferred tax assets on tax loss carry forwards and investment credits that
\n
expire starting 2022, as follows:
\n
Year
\n
In millions of U.S.
\n
dollars
\n
2022
8
\n
2023
8
\n
2024
8
\n
2025
9
\n
2026
6
\n
Thereafter
364
\n
Total
403
\n
The majority of the amount reported on the line \u201cthereafter\u201d has no expiration date.
\n
As of December 31, 2022, deferred tax assets not recognized in the statement of financial position amounted to
\n
$415 million (2021: $504 million) and are mainly composed of the followings:
\n
\u2022
$218 million (2021: $213 million) relating to an agreement granting the Group certain tax credits for
\n
capital investments purchased through the year ended December 31, 2006. Any unused tax credits
\n
granted under the agreement will be impacted yearly by a legal inflationary index of 2.56% (2021: -0.45%).
\n
The credits may be utilized depending on the Group meeting certain program criteria. The credit may be
\n
utilized depending on the Company meeting certain program criteria and have no expiration date. In
\n
addition to this agreement, from 2007 onwards, the Group has continued and will continue to receive tax
\n
credits on the yearly capital investments, which may be used to offset that year\u2019s tax liabilities and
\n
increases by the legal inflationary rate. However, pursuant to the inability to use these credits currently
\n
and in future years, the Group did not recognize in 2022 and in 2021 these deferred tax assets in the
\n
statement of financial position.
\n
\u2022
$197 million (2021: $291 million) of tax loss carry forwards generated in on-going operations or
\n
corresponding to net operating losses acquired in business combinations, whose recovery was not
\n
considered probable. The majority of these unrecognized tax loss carry forwards has no expiry date.
\n
No deferred tax liability is recognized on temporary differences of $308 million relating to the unremitted earnings
\n
of subsidiaries as the Group is able to control the timings of the reversal of these temporary differences and it is
\n
probable that they will not reverse in the foreseeable future. As of December 31, 2022, a deferred tax liability of $22
\nmillion was recognized on the amount of earnings expected to be repatriated in the foreseeable future. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16760": {
"value": "7.6.31. Income tax
The major components of income tax benefit (expense) for the years ended December 31, 2022 and 2021 are:
\n
Consolidated income statement
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
The Netherlands taxes
\u2013
current
\u2014
\u2014
\n
Foreign taxes
\u2013
current
(510
)
(285
)
\n
Current taxes
(510
)
(285
)
\n
The Netherlands taxes
\u2013
deferred
\u2014
\u2014
\n
Foreign deferred taxes
(7
)
(22
)
\n
Deferred taxes
(7
)
(22
)
\n
Income tax expense
(517
)
(307
)
\n
Consolidated statement of other comprehensive income (deferred tax related to items charged or credited directly
\n
to equity during the year).
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Re-measurements of employee benefit obligations
(23
)
(3
)
\n
Income tax credited (charged) directly to equity
(23
)
(3
)
\n
A reconciliation between income tax benefit and the product of income before tax multiplied by The Netherlands\u2019
\n
statutory tax rate for the years ended December 31, 2022 and 2021 is as follows:
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Gain (loss) before income tax
4,846
2,024
\n
Income tax benefit (expense) at The Netherlands
\u2019
statutory tax
\n
rate of 25.8% (2021: 25%)
(1,251
)
(506
)
\n
Permanent differences and other non-deductible, non-taxable items
118
(66
)
\n
Change in the recognition of unrecognized tax losses
140
(2
)
\n
Effect on deferred tax rates of changes in enacted tax rates
6
6
\n
Current year credits
30
39
\n
Other taxes and credits
(51
)
(22
)
\n
Benefits from tax holidays
60
49
\n
Current year tax risk
(12
)
(8
)
\n
Earnings (losses) of subsidiaries taxed at different rates
443
203
\n
Income tax expense
(517
)
(307
)
\n
\n
\n
The effect of the change in fair value measurement related to the convertible debt is reported in the line \u201cPermanent
\n
differences and other non-deductible, non-taxable items\u201d in the above table.
\n
During the year ended December 31, 2022, the Group did not recognize deferred tax assets on net operating losses
\n
for an approximate amount of $4 million (2021: $3 million). The variation on the recognition of the deferred tax
\n
assets for $140 million is related to the assessment of the recoverability of the deferred tax assets in France, Malta
\n
and the U.S. following the improved stability of profits of the Group.
\n
The changes in enacted tax rates resulted in a decrease of tax expense of $6 million in 2022 (decrease of $6 million
\n
in 2021).
\n
The tax holidays represent a tax exemption period aimed at attracting foreign technological investment in certain
\n
tax jurisdictions. These agreements are present in various countries and include programs that reduce up to 100%
\n
of taxes in years affected by the agreements. The Group\u2019s tax holidays expire at various dates through the year
\n
ending December 31, 2029.
\n
The variation in the Earnings (losses) of subsidiaries taxed at different rates is related to the increase of the Group\u2019s
\n
subsidiaries profitability.
\n
For a particular tax-paying component of the Group and within a particular tax jurisdiction, all deferred tax assets
\n
and liabilities are offset and presented as a single amount. The Group does not offset deferred tax assets and
\n
liabilities attributable to different tax-paying components or to different tax jurisdictions.
\n
In millions of U.S. dollars
\n
December
31,
\n
2021
\n
Exchange
\n
differences
\n
Income
tax
\n
charged
\n
directly
\n
to
equity
\n
Income
\n
statement
\n
benefit
\n
(expense)
\n
December
31,
\n
2022
\n
Deferred tax assets
\n
Tax losses and investments credits
324
(19)
\u2014
(8)
297
\n
Impairment charge and restructuring
4
\u2014
\u2014
\u2014
4
\n
Fixed asset depreciation
60
(6)
\u2014
14
68
\n
Receivables for government funding
64
(7)
\u2014
64
121
\n
Pension service cost
26
(3)
(23)
62
62
\n
Other
94
\u2014
(5)
22
111
\n
Total deferred tax assets
572
(35)
(28)
154
663
\n
Deferred tax liabilities
\n
Accelerated tax depreciation
(32)
\u2014
\u2014
(5)
(37)
\n
Acquired intangible assets
(22)
1
\u2014
(2)
(23)
\n
Advances of government funding
(115)
11
\u2014
(73)
(177)
\n
Capitalized development cost
(1)
\u2014
\u2014
(67)
(68)
\n
Other
(12)
\u2014
\u2014
(14)
(26)
\n
Total deferred tax liabilities
(182)
12
\u2014
(161)
(331)
\n
Net deferred tax
390
(23)
(28)
(7)
332
\n
The line other deferred tax assets is primarily composed of deferred tax assets related to Inventory, Stock Awards
\n
and Commercial Accruals.
\n
In millions of U.S. dollars
\n
December
31,
\n
2020
\n
Exchange
\n
differences
\n
Income
tax
\n
charged
\n
directly
\n
to
equity
\n
Income
\n
statement
\n
benefit
\n
(expense)
\n
December
31,
\n
2021
\n
Deferred tax assets
\n
Tax losses
260
(4)
\u2014
68
324
\n
Impairment charge and restructuring
3
1
\u2014
\u2014
4
\n
Fixed asset depreciation
85
(2)
\u2014
(23)
60
\n
Receivables for government funding
40
\u2014
\u2014
24
64
\n
Pension service cost
103
(1)
(3)
(73)
26
\n
Other
99
(2)
\u2014
(3)
94
\n
Total deferred tax assets
590
(8)
(3)
(7)
572
\n
Deferred tax liabilities
\n
Accelerated tax depreciation
(21)
\u2014
\u2014
(11)
(32)
\n
Acquired intangible assets
(40)
1
\u2014
17
(22)
\n
Advances of government funding
(94)
1
\u2014
(22)
(115)
\n
Other
(16)
2
\u2014
1
(13)
\n
Total deferred tax liabilities
(171)
4
\u2014
(15)
(182)
\n
Net deferred tax
419
(4)
(3)
(22)
390
\n
The line other deferred tax assets is primarily composed of deferred tax assets related to Inventory, Stock Awards
\n
and Commercial Accruals.
\n
As of December 31, 2022, the Group has deferred tax assets on tax loss carry forwards and investment credits that
\n
expire starting 2023 out of which a deferred tax assets of $297 million are recognized, the expiry of the deferred tax
\n
assets as follows:
\n
Year
\n
In millions of U.S.
\n
dollars
\n
2023
1
\n
2024
\u2014
\n
2025
\u2014
\n
2026
\u2014
\n
2027
2
\n
Thereafter
319
\n
Total
322
\n
The majority of the amount reported on the line \u201cthereafter\u201d has no expiration date.
\n
As of December 31, 2021, the Group has deferred tax assets on tax loss carry forwards and investment credits that
\n
expire starting 2022, as follows:
\n
Year
\n
In millions of U.S.
\n
dollars
\n
2022
8
\n
2023
8
\n
2024
8
\n
2025
9
\n
2026
6
\n
Thereafter
364
\n
Total
403
\n
The majority of the amount reported on the line \u201cthereafter\u201d has no expiration date.
\n
As of December 31, 2022, deferred tax assets not recognized in the statement of financial position amounted to
\n
$415 million (2021: $504 million) and are mainly composed of the followings:
\n
\u2022
$218 million (2021: $213 million) relating to an agreement granting the Group certain tax credits for
\n
capital investments purchased through the year ended December 31, 2006. Any unused tax credits
\n
granted under the agreement will be impacted yearly by a legal inflationary index of 2.56% (2021: -0.45%).
\n
The credits may be utilized depending on the Group meeting certain program criteria. The credit may be
\n
utilized depending on the Company meeting certain program criteria and have no expiration date. In
\n
addition to this agreement, from 2007 onwards, the Group has continued and will continue to receive tax
\n
credits on the yearly capital investments, which may be used to offset that year\u2019s tax liabilities and
\n
increases by the legal inflationary rate. However, pursuant to the inability to use these credits currently
\n
and in future years, the Group did not recognize in 2022 and in 2021 these deferred tax assets in the
\n
statement of financial position.
\n
\u2022
$197 million (2021: $291 million) of tax loss carry forwards generated in on-going operations or
\n
corresponding to net operating losses acquired in business combinations, whose recovery was not
\n
considered probable. The majority of these unrecognized tax loss carry forwards has no expiry date.
\n
No deferred tax liability is recognized on temporary differences of $308 million relating to the unremitted earnings
\n
of subsidiaries as the Group is able to control the timings of the reversal of these temporary differences and it is
\n
probable that they will not reverse in the foreseeable future. As of December 31, 2022, a deferred tax liability of $22
\nmillion was recognized on the amount of earnings expected to be repatriated in the foreseeable future. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17236": {
"value": "7.6.32. Earnings per share
For the year ended December 31, 2022 and December 31, 2021, earnings per share (\u201cEPS\u201d) were calculated as
\n
follows:
\n
In millions of U.S. dollars except earnings per share data
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Basic EPS
\n
Net result attributable to the equity holder of the parent as reported
4,323
1,711
\n
Weighted average shares outstanding
905,606,885
904,332,429
\n
Basic EPS
4.77
1.89
\n
Diluted EPS
\n
Net result attributable to the equity holder of the parent as reported
4,323
1,711
\n
Weighted average shares outstanding
905,606,885
904,332,429
\n
Dilutive effect of stock awards
6,663,573
8,334,204
\n
Dilutive effect of settlement of 2017 unsecured senior convertible bonds
\u2014
11,088,820
\n
Number of shares used for diluted EPS
912,270,458
923,755,453
\n
Diluted EPS
4.74
1.85
\n
There was no dilutive effect of the senior unsecured convertible bonds issued on August 4, 2020 in the 2022 diluted
\nEarnings per Share since the conversion features were out-of-the-money. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17281": {
"value": "7.6.33. Related party transactions
The below table summarizes transactions incurred in 2022 and 2021 with companies for which certain members of
\n
the Group\u2019s management perform similar policymaking functions. These include, but are not limited to: Orange and
\n
Idemia France. Each of the aforementioned arrangements and transactions is negotiated without the personal
\n
involvement of the Supervisory Board members and are made in line with market practices and conditions.
\n
In millions of U.S. dollars
\n
December
31,
\n
2022
\n
December
31,
\n
2021
\n
Sales of goods and services to entities controlled by key
\n
management personnel
13
8
\n
Purchases of goods and services from entities controlled
\n
by key management personnel
25
19
\n
Accounts receivable from entities controlled by key
\n
management personnel
5
2
\n
Accounts payable from entities controlled by key
\n
management personnel
2
\u2014
\n
In addition, the Group shares one member of its Supervisory Board with CDP SpA. The Group holds two long-term
\n
credit facilities with CDP SpA, which contractual financing terms are described in Note 7.6.14.3.
\n
The Group did not hold any significant equity-method investments as of December 31, 2022 and 2021. Consequently,
\n
the Group did not report any material transaction with this type of investees in the corresponding years.
\n
The Group made a cash contribution of $1 million for the year ended December 31, 2022 to the ST Foundation, a
\n
non-profit organization established to deliver and coordinate independent programs in line with its mission. A cash
\n
contribution of $0.5 million was made for the year ended December 31, 2021. Certain members of the Foundation\u2019s
\n
Board are senior members of the Group\u2019s management.
\n
In 2022 and 2021, the total remuneration paid to the sole member of the Managing Board and to the other executive officers was as follows:
\n
Short-term benefits
Post-
\n
Share-
\n
based
\n
payments
\n
For
the
year
ended
December
31,
\n
2022, in U.S. dollars
Base Salary
Bonus
Benefits
\n
Social
\n
security
\n
contributions
\n
(1)
\n
employment
\n
benefits
\n
Pensions
\n
(2)
\n
Termination
\n
benefits
\n
Unvested
\n
stock
\n
awards
Total
\n
Sole member of the
\n
Managing Board
\n
1,250,954
2,506,576
108,023
857,447
452,230
\u2014
2,043,212
\n
7,218,442
\n
Executive officers (excluding sole
\n
member of the Managing Board)
\n
19,597,418
15,051,137
1,598,775
9,611,230
1,046,598
2,284,907
38,956,888
\n
88,146,953
\n
Senior Management
total
\n
remuneration
20,848,372
17,557,713
1,706,798
10,468,677
1,498,828
2,284,907
41,000,100
95,365,395
\n
Short-term benefits
Post-
\n
Share-
\n
based
\n
payments
\n
For
the
year
ended
December
31,
\n
2021, in U.S. dollars
Base Salary
Bonus
Benefits
\n
Social
\n
security
\n
contributions
\n
(1)
\n
employment
\n
benefits
\n
Pensions
\n
(2)
\n
Termination
\n
benefits
\n
Unvested
\n
stock
\n
awards
Total
\n
Sole member of the
\n
Managing Board
936,357
1,907,307
101,866
904,742
463,617
\u2014
3,245,640
7,559,529
\n
Executive officers (excluding sole
\n
member of the Managing Board)
13,729,105
9,569,622
1,293,643
8,721,451
330,770
3,288,715
39,797,294
76,730,600
\n
Senior Management
total
\n
remuneration
14,665,462
11,476,929
1,395,509
9,626,193
794,387
3,288,715
43,042,934
84,290,129
\n
(1)
Include compulsory contribution to pension plans
\n
(2)
Complementary pension plan for Senior Management
\n
The Group\u2019s 33 Senior Management members were granted in 2022 for free 1,405,000 unvested shares subject to
\n
the achievement of performance objectives and service conditions being met. The weighted average grant date fair
\n
value of unvested shares granted to employees under the 2022 Employee Plan was $35.92.
\n
The Group\u2019s 24 Senior Management members were granted in 2021 for free 1,118,000 unvested shares subject to
\n
the achievement of performance objectives and service conditions being met. The weighted average grant date fair
\n
value of unvested shares granted to employees under the 2021 Employee Plan was $39.20.
\n
The bonus paid to the executive officers corresponds to a Corporate Executive Incentive Program (the \u201cEIP\u201d) that
\n
entitles selected executives to a yearly bonus based upon the assessment of the achievement of individual,
\n
organizational and company objectives that are set on an annual basis and focused, inter alia, on return on net
\n
assets, customer service, profit, cash flow and market share. The maximum bonus awarded under the EIP is based
\n
upon a percentage of the executives\u2019 salary and the overall achievement of the above objectives on an annual basis.
\n
The 2022 EIP includes a sustainability index for Senior Management, as part of the Group\u2019s effort to include
\n
corporate social responsibility into the performance framework of Senior Management. The sustainability index has
\n
a weighting in the range of 5%-10%, and is divided into four criteria related to health and safety, environment,
\n
diversity & inclusion, and people engagement.
\n
The Senior Management members were covered in 2022 and 2021 under certain Group life and medical insurance
\n
programs, pension, state-run retirement and other similar benefit programs and other miscellaneous allowances.
\n
At the end of the year 2005, the Compensation Committee recommended and the Supervisory Board decided to
\n
grant an additional pension benefit plan to the Group\u2019s sole member of the Managing Board and a limited number
\n
of senior executives that have made key contributions to the Group\u2019s success. Pursuant to this plan, in 2022 the
\n
Group made a contribution of $0.5 million to the plan of the sole member of the Managing Board, and $1.05 million
\n
to the plan for all other beneficiaries. The amount of pension plan payments made for other beneficiaries, such as
\n
former employees retired in 2022 and/or no longer salaried in 2022 were $1.1 million.
\n
The Group did not extend any loans or overdrafts to the sole member of the Managing Board, President and Chief
\n
Executive Officer, nor to any other member of Senior Management. Furthermore, the Group has not guaranteed any
\n
debts or concluded any leases with the sole member of the Managing Board, nor with any other member of Senior
\n
Management or their families.
\n
The members of Senior Management, including the sole member of the Managing Board, President and Chief
\n
Executive Officer, were covered in 2022 under certain group life and medical insurance programs provided by the
\n
Group. The aggregate additional amount set aside in 2022 to provide pension, retirement or similar benefits for
\n
Senior Management, including the sole member of the Managing Board, President and Chief Executive Officer, as a
\n
group is in addition to the amounts allocated to the complementary pension plan described above and is estimated
\n
to have been approximately $7.5 million, which includes statutory employer contributions for state run retirement,
\n
similar benefit programs and other miscellaneous allowances.
\n
Individual remuneration paid to Supervisory Board Members in 2022 and 2021 was recorded as follows:
\n
In Euros
2022
\n
(1)
\n
2021
\n
(1)
\n
Maurizio Tamagnini
170,000
160,000
\n
Nicolas Dufourcq
\n
(2)
\n
\u2014
\u2014
\n
Janet Davidson
114,000
103,500
\n
Heleen Kersten
121,000
107,500
\n
Yann Delabri
\u00e8
re
99,500
98,500
\n
Lucia Morselli
\n
(3)
\n
9,000
104,000
\n
Alessandro Rivera
87,000
87,500
\n
Fr
\u00e9
d
\u00e9
ric Sanchez
102,000
100,000
\n
Donatella Sciuto
\n
(3)
\n
97,000
\u2014
\n
Ana de Pro Gonzalo
161,500
151,000
\n
961,000
912,000
\n
(1)
These amounts include a fixed annual compensation for the directors\u2019 mandate, together with attendance fees from January 1 until
\n
December 31.
\n
(2)
Mr. Dufourcq waived his rights to receive any compensation from the Group in relation to his mandate as a member of the Supervisory
\n
Board or otherwise.
\n
(3)
Ms. Lucia Morselli was a member of our Supervisory Board until May 25, 2022, and was replaced by Ms. Donatella Sciuto as of May 25,
\n
2022.
\nNo share awards were granted to Supervisory Board Members and Professionals in 2022 and 2021.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17585": {
"value": "7.6.34. Commitments, contingencies, claims and legal proceedings
Commitments
\n
The Group\u2019s commitments as of December 31, 2022 were as follows:
\n
In millions of U.S. dollars
Total
2023
2024
2025
2026
2027
Thereafter
\n
Purchase obligations
5,554
4,556
424
287
101
62
124
\n
Of which:
\n
Equipment purchase
3,587
3,584
3
\u2014
\u2014
\u2014
\u2014
\n
Foundry purchase
1,827
872
393
275
101
62
124
\n
Software, technology licenses and
\n
design
140
100
28
12
\u2014
\u2014
\u2014
\n
Other obligations
1,864
1,072
155
100
56
155
326
\n
Total
7,418
5,628
579
387
157
217
450
\n
The Group\u2019s commitments as of December 31, 2021 were as follows:
\n
In millions of U.S. dollars
Total
2022
2023
2024
2025
2026
Thereafter
\n
Purchase obligations
4,064
3,272
405
186
163
38
\u2014
\n
Of which:
\n
Equipment purchase
2,412
2,406
6
\u2014
\u2014
\u2014
\u2014
\n
Foundry purchase
1,488
768
358
167
157
38
\u2014
\n
Software, technology licenses and
\n
design
164
98
41
19
6
\u2014
\u2014
\n
Other obligations
1,059
621
172
107
63
30
66
\n
Total
5,123
3,893
577
293
226
68
66
\n
Purchase obligations are primarily comprised of purchase commitments for equipment, for outsourced foundry
\n
wafers and for software licenses.
\n
Other obligations primarily relate to firm contractual commitments with respect to partnership and cooperation
\n
agreements and other service agreements.
\n
Contingencies
\n
The Group is subject to possible loss contingencies arising in the ordinary course of business. These include but are
\n
not limited to: product liability claims and/or warranty cost on the products of the Group, contractual disputes,
\n
indemnification claims, claims for unauthorized use of third-party IP, employee grievances,
tax claims beyond
\n
assessed uncertain tax positions as well as claims for environmental damages. In determining loss contingencies, the
\n
Group considers the likelihood of impairing an asset or the incurrence of a liability at the date of the consolidated
\n
financial statements as well as the ability to reasonably estimate the amount of such loss. The Group records a
\n
provision for a loss contingency when information available before the consolidated financial statements are issued
\n
or are available to be issued indicates that it is probable that an asset has been impaired or a liability has been
\n
incurred at the date of the consolidated financial statements and when the amount of loss can be reasonably
\n
estimated. The Group regularly re-evaluates claims to determine whether provisions need to be readjusted based
\n
on the most current information available to the Group. Changes in these evaluations could result in an adverse
\n
material impact on the Group\u2019s results of operations, cash flows or its financial position for the period in which they
\n
occur.
\n
Claims and legal proceedings
\n
The Group has received and may in the future receive communications alleging possible infringements of third-party
\n
patents or other third-party IP rights. Furthermore, the Group from time to time enters into discussions regarding a
\n
broad patent cross license arrangement with other industry participants. There is no assurance that such discussions
\n
may be brought to a successful conclusion and result in the intended agreement. The Group may become involved
\n
in costly litigation brought against the Group regarding patents, mask works, copyrights, trademarks or trade secrets.
\n
In the event that the outcome of any litigation would be unfavorable to the Group, the Group may be required to
\n
take a license to third-party patents and/or other IP rights at economically unfavorable terms and conditions, and
\n
possibly pay damages for prior use and/or face an injunction, all of which individually or in the aggregate could have
\n
a material adverse effect on the Group\u2019s results of operations, cash flows, financial position and/or ability to
\n
compete.
\n
The Group has contractual commitments to various customers which could require the Group to incur costs to repair
\n
or replace defective products it supplies to such customer. The duration of these contractual commitments varies
\n
and, in certain cases, is indefinite. The Group is otherwise also involved in various lawsuits, claims, inquiries,
\n
inspections, investigations and/or proceedings incidental to its business and operations. Such matters, even if not
\n
meritorious, could result in the expenditure of significant financial or managerial resources. Any of the foregoing
\n
could have a material adverse effect on the Group\u2019s results of operations, cash flows or its financial position.
\n
Other Contingencies
\n
The Group regularly evaluates claims and legal proceedings together with their related probable losses to determine
\n
whether they need to be adjusted based on the current information available to the Group. There can be no
\n
assurance that its recorded reserves will be sufficient to cover the extent of its potential liabilities. Legal costs
\n
associated with claims are expensed as incurred. In the event of litigation which is adversely determined with respect
\n
to the Group\u2019s interests, or in the event the Group needs to change its evaluation of a potential third-party claim,
\n
based on new evidence or communications, a material adverse effect could impact its operations or financial
\n
condition at the time it were to materialize.
\n
As of December 31, 2022 and 2021, respectively, provisions for estimated probable losses with respect to claims and
\nlegal proceedings were not considered material. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17588": {
"value": "Commitments
The Group\u2019s commitments as of December 31, 2022 were as follows:
\n
In millions of U.S. dollars
Total
2023
2024
2025
2026
2027
Thereafter
\n
Purchase obligations
5,554
4,556
424
287
101
62
124
\n
Of which:
\n
Equipment purchase
3,587
3,584
3
\u2014
\u2014
\u2014
\u2014
\n
Foundry purchase
1,827
872
393
275
101
62
124
\n
Software, technology licenses and
\n
design
140
100
28
12
\u2014
\u2014
\u2014
\n
Other obligations
1,864
1,072
155
100
56
155
326
\n
Total
7,418
5,628
579
387
157
217
450
\n
The Group\u2019s commitments as of December 31, 2021 were as follows:
\n
In millions of U.S. dollars
Total
2022
2023
2024
2025
2026
Thereafter
\n
Purchase obligations
4,064
3,272
405
186
163
38
\u2014
\n
Of which:
\n
Equipment purchase
2,412
2,406
6
\u2014
\u2014
\u2014
\u2014
\n
Foundry purchase
1,488
768
358
167
157
38
\u2014
\n
Software, technology licenses and
\n
design
164
98
41
19
6
\u2014
\u2014
\n
Other obligations
1,059
621
172
107
63
30
66
\n
Total
5,123
3,893
577
293
226
68
66
\n
Purchase obligations are primarily comprised of purchase commitments for equipment, for outsourced foundry
\n
wafers and for software licenses.
\n
Other obligations primarily relate to firm contractual commitments with respect to partnership and cooperation
\nagreements and other service agreements.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCommitmentsExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17714": {
"value": "Contingencies
The Group is subject to possible loss contingencies arising in the ordinary course of business. These include but are
\n
not limited to: product liability claims and/or warranty cost on the products of the Group, contractual disputes,
\n
indemnification claims, claims for unauthorized use of third-party IP, employee grievances,
tax claims beyond
\n
assessed uncertain tax positions as well as claims for environmental damages. In determining loss contingencies, the
\n
Group considers the likelihood of impairing an asset or the incurrence of a liability at the date of the consolidated
\n
financial statements as well as the ability to reasonably estimate the amount of such loss. The Group records a
\n
provision for a loss contingency when information available before the consolidated financial statements are issued
\n
or are available to be issued indicates that it is probable that an asset has been impaired or a liability has been
\n
incurred at the date of the consolidated financial statements and when the amount of loss can be reasonably
\n
estimated. The Group regularly re-evaluates claims to determine whether provisions need to be readjusted based
\n
on the most current information available to the Group. Changes in these evaluations could result in an adverse
\n
material impact on the Group\u2019s results of operations, cash flows or its financial position for the period in which they
\n
occur.
\n
Claims and legal proceedings
\n
The Group has received and may in the future receive communications alleging possible infringements of third-party
\n
patents or other third-party IP rights. Furthermore, the Group from time to time enters into discussions regarding a
\n
broad patent cross license arrangement with other industry participants. There is no assurance that such discussions
\n
may be brought to a successful conclusion and result in the intended agreement. The Group may become involved
\n
in costly litigation brought against the Group regarding patents, mask works, copyrights, trademarks or trade secrets.
\n
In the event that the outcome of any litigation would be unfavorable to the Group, the Group may be required to
\n
take a license to third-party patents and/or other IP rights at economically unfavorable terms and conditions, and
\n
possibly pay damages for prior use and/or face an injunction, all of which individually or in the aggregate could have
\n
a material adverse effect on the Group\u2019s results of operations, cash flows, financial position and/or ability to
\n
compete.
\n
The Group has contractual commitments to various customers which could require the Group to incur costs to repair
\n
or replace defective products it supplies to such customer. The duration of these contractual commitments varies
\n
and, in certain cases, is indefinite. The Group is otherwise also involved in various lawsuits, claims, inquiries,
\n
inspections, investigations and/or proceedings incidental to its business and operations. Such matters, even if not
\n
meritorious, could result in the expenditure of significant financial or managerial resources. Any of the foregoing
\n
could have a material adverse effect on the Group\u2019s results of operations, cash flows or its financial position.
\n
Other Contingencies
\n
The Group regularly evaluates claims and legal proceedings together with their related probable losses to determine
\n
whether they need to be adjusted based on the current information available to the Group. There can be no
\n
assurance that its recorded reserves will be sufficient to cover the extent of its potential liabilities. Legal costs
\n
associated with claims are expensed as incurred. In the event of litigation which is adversely determined with respect
\n
to the Group\u2019s interests, or in the event the Group needs to change its evaluation of a potential third-party claim,
\n
based on new evidence or communications, a material adverse effect could impact its operations or financial
\n
condition at the time it were to materialize.
\n
As of December 31, 2022 and 2021, respectively, provisions for estimated probable losses with respect to claims and
\nlegal proceedings were not considered material. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17715": {
"value": "Contingencies
The Group is subject to possible loss contingencies arising in the ordinary course of business. These include but are
\n
not limited to: product liability claims and/or warranty cost on the products of the Group, contractual disputes,
\n
indemnification claims, claims for unauthorized use of third-party IP, employee grievances,
tax claims beyond
\n
assessed uncertain tax positions as well as claims for environmental damages. In determining loss contingencies, the
\n
Group considers the likelihood of impairing an asset or the incurrence of a liability at the date of the consolidated
\n
financial statements as well as the ability to reasonably estimate the amount of such loss. The Group records a
\n
provision for a loss contingency when information available before the consolidated financial statements are issued
\n
or are available to be issued indicates that it is probable that an asset has been impaired or a liability has been
\n
incurred at the date of the consolidated financial statements and when the amount of loss can be reasonably
\n
estimated. The Group regularly re-evaluates claims to determine whether provisions need to be readjusted based
\n
on the most current information available to the Group. Changes in these evaluations could result in an adverse
\n
material impact on the Group\u2019s results of operations, cash flows or its financial position for the period in which they
\n
occur.
\n
Claims and legal proceedings
\n
The Group has received and may in the future receive communications alleging possible infringements of third-party
\n
patents or other third-party IP rights. Furthermore, the Group from time to time enters into discussions regarding a
\n
broad patent cross license arrangement with other industry participants. There is no assurance that such discussions
\n
may be brought to a successful conclusion and result in the intended agreement. The Group may become involved
\n
in costly litigation brought against the Group regarding patents, mask works, copyrights, trademarks or trade secrets.
\n
In the event that the outcome of any litigation would be unfavorable to the Group, the Group may be required to
\n
take a license to third-party patents and/or other IP rights at economically unfavorable terms and conditions, and
\n
possibly pay damages for prior use and/or face an injunction, all of which individually or in the aggregate could have
\n
a material adverse effect on the Group\u2019s results of operations, cash flows, financial position and/or ability to
\n
compete.
\n
The Group has contractual commitments to various customers which could require the Group to incur costs to repair
\n
or replace defective products it supplies to such customer. The duration of these contractual commitments varies
\n
and, in certain cases, is indefinite. The Group is otherwise also involved in various lawsuits, claims, inquiries,
\n
inspections, investigations and/or proceedings incidental to its business and operations. Such matters, even if not
\n
meritorious, could result in the expenditure of significant financial or managerial resources. Any of the foregoing
\n
could have a material adverse effect on the Group\u2019s results of operations, cash flows or its financial position.
\n
Other Contingencies
\n
The Group regularly evaluates claims and legal proceedings together with their related probable losses to determine
\n
whether they need to be adjusted based on the current information available to the Group. There can be no
\n
assurance that its recorded reserves will be sufficient to cover the extent of its potential liabilities. Legal costs
\n
associated with claims are expensed as incurred. In the event of litigation which is adversely determined with respect
\n
to the Group\u2019s interests, or in the event the Group needs to change its evaluation of a potential third-party claim,
\n
based on new evidence or communications, a material adverse effect could impact its operations or financial
\n
condition at the time it were to materialize.
\n
As of December 31, 2022 and 2021, respectively, provisions for estimated probable losses with respect to claims and
\nlegal proceedings were not considered material. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17968": {
"value": "Capital risk management
The Group\u2019s objectives when managing capital are to safeguard the Group\u2019s ability to continue as a going concern in
\n
order to create value for shareholders and benefits and returns for other stakeholders, as to maintain an optimal
\n
capital structure. In order to maintain or adjust the capital structure, the Group may review the amount of dividends
paid to shareholders, return capital to shareholders, or issue new shares.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory",
"language": "en",
"entity": "scheme:213800Z8NOHIKRI42W10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
}
}
}