GLOBALFOUNDRIES(GFS) - 2024 Q3 - Quarterly Report

Financial Performance - Net revenue for Q3 2024 was $1,739 million, a decrease of 6.1$1,852 million in Q3 2023[8] - Gross profit for Q3 2024 was $414 million, down 21.7$529 million in Q3 2023[8] - Operating income for Q3 2024 was $185 million, a decline of 29.1$261 million in Q3 2023[8] - Net income for Q3 2024 was $178 million, down 28.6$249 million in Q3 2023[8] - Basic net earnings per share for Q3 2024 were $0.32, a decrease from$0.45 in Q3 2023[8] - Total comprehensive income for Q3 2024 was $226 million, slightly up from$225 million in Q3 2023[10] - For the nine months ended September 30, 2024, net income was $467 million, a decrease of 37$740 million for the same period in 2023[17] - The effective tax rate for the three months ended September 30, 2024, was 8.7%, compared to (2.5)% in 2023, primarily due to U.S. withholding tax reclassification[41] - Basic earnings per share (EPS) for the three months ended September 30, 2024, was $0.32, down from$0.45 in 2023, reflecting a decrease of 28.9%[46] Expenses and Investments - Research and development expenses increased to $130 million in Q3 2024, up 20.4$108 million in Q3 2023[8] - Depreciation increased to $1,094 million in 2024 from$952 million in 2023, reflecting a rise of approximately 15%[17] - The company incurred share-based compensation of $143 million in 2024, up from$120 million in 2023, representing an increase of about 19%[17] - The company incurred restructuring charges of $1 million for the three months ended September 30, 2024, significantly lower than$17 million in the same period of 2023[50] - The company plans to continue investing in new technologies and market expansion to enhance its competitive position in the semiconductor industry[21] Assets and Liabilities - Total current assets as of September 30, 2024, were $6,598 million, an increase of 4.3$6,327 million as of December 31, 2023[5] - Total liabilities decreased to $6,523 million as of September 30, 2024, down 5.4$6,893 million as of December 31, 2023[5] - Total equity increased to $11,582 million as of September 30, 2024, up from$11,151 million as of December 31, 2023[5] - Total inventories as of September 30, 2024, increased to $1,802 million from$1,487 million as of December 31, 2023, representing a rise of 21.1%[59] - The net book value of property, plant, and equipment as of September 30, 2024, was $8,950 million, slightly down from$9,000 million as of December 31, 2023[49] - The company reported a total of 1,323 million in trade receivables as of September 30, 2024, down from $1,420 million as of December 31, 2023[54] - Work in progress inventory as of September 30, 2024, was$1,199 million, an increase from $1,005 million as of December 31, 2023[59] Cash Flow and Investments - Net cash provided by operating activities was$1,265 million, down from $1,441 million in the previous year, indicating a decline of about 12$1,033 million, compared to $1,787 million in 2023, showing a reduction of approximately 42$2,286 million, an increase from $1,880 million in the prior year[17] - Investments in marketable securities increased to$2,047 million as of September 30, 2024, up from $1,501 million as of December 31, 2023, reflecting a growth of approximately 36.5$3,944 million as of September 30, 2024, compared to $3,398 million as of December 31, 2023, an increase of approximately 16.1$2.372 billion as of December 31, 2023, to $2.313 billion as of September 30, 2024[66] - The company has unutilized credit facilities totaling$1.118 billion as of September 30, 2024, compared to $1.058 billion as of December 31, 2023[66] - Future payments under purchase agreements amounted to$591 million as of September 30, 2024, down from $1.1 billion as of December 31, 2023[72] - The company reported cash outflow for leases of$42 million for the nine months ended September 30, 2024, compared to $57 million for the same period in 2023[63] - The company has commitments of$368 million due within the next 12 months as of September 30, 2024[72] Share Repurchase and Equity - On May 22, 2024, the company announced a share repurchase of 3.9 million ordinary shares at a price of $50.75 per share, totaling$200 million[93] - The company completed the share repurchase on May 28, 2024, and subsequently canceled the 3.9 million shares[93] - The company’s investments in equity instruments increased from $19 million as of December 31, 2023, to$25 million as of September 30, 2024, marking a growth of approximately 31.6%[82] Derivatives and Fair Value - The company reported total liabilities for derivatives at $56 million as of December 31, 2023, which decreased to$42 million by September 30, 2024, indicating a reduction of approximately 25%[82] - The fair value of other long-term debt was estimated at $2,256 million as of September 30, 2024, down from$2,319 million as of December 31, 2023, a decrease of about 2.7%[88] - Derivative assets increased from $132 million as of December 31, 2023, to$166 million as of September 30, 2024, representing a rise of approximately 25.8%[82] - The company utilizes the Black-Scholes and Monte Carlo models for estimating the fair value of share-based compensation, which involves subjective assumptions and management judgment[89] Legal Matters - The trial related to IBM's claims is scheduled to commence on February 3, 2025[74]