publIshed by InfIneon TechnologIes AG Am Campeon 1 – 12, 85579 Neubiberg Quarterly Report of 2nd Quarter 2011 Printed in Germany Infineon Technologies AG 69638_Quartalsbericht_2_2011.indd 2 18.05.11 10:04 (This page intentionally left blank) INFINEON TECHNOLOGIES QUARTERLY REPORT MARCH 31, 2011 CONTENT CONTENT Selected Consolidated Financial Data..................................................................................................................... 3 Interim Group Management Report (unaudited)...................................................................................................... 4 First six months of the 2011 fiscal year: Infineon continues to perform well......................................................... 4 Important Events in the first half of the 2011 fiscal year....................................................................................... 5 Performance of the Infineon share in the first half of the 2011 fiscal year............................................................ 6 Industry Environment........................................................................................................................................... 7 Segment Performance ......................................................................................................................................... 8 Material Items of the Consolidated Statement of Operations............................................................................. 12 Financial Condition ............................................................................................................................................ 14 Liquidity.............................................................................................................................................................. 15 Employees ......................................................................................................................................................... 18 Subsequent Events............................................................................................................................................ 19 Outlook............................................................................................................................................................... 19 Risks and Opportunities..................................................................................................................................... 20 Consolidated Statement of Operations (Unaudited) for the three and six months ended March 31, 2011 and 2010 ............................................................................. 21 Consolidated Statement of Comprehensive Income (Unaudited) for the three and six months ended March 31, 2011 and 2010 ............................................................................. 22 Consolidated Statement of Financial Position (Unaudited) as of March 31, 2011 and September 30, 2010......... 23 Consolidated Statement of Cash Flows (Unaudited) for the six months ended March 31, 2011 and 2010........... 24 Consolidated Statement of Changes in Equity (Unaudited) for the six months ended March 31, 2011 and 2010.............................................................................................. 26 Condensed Notes to the Unaudited Consolidated Financial Statements .............................................................. 28 1 / Basis of Presentation................................................................................................................................ 28 2 / Accounting Policies .................................................................................................................................. 28 3 / Divestitures and Discontinued Operations................................................................................................ 29 4 / Financial Income ...................................................................................................................................... 33 5 / Financial Expense .................................................................................................................................... 33 6 / Income Tax............................................................................................................................................... 33 7 / Earnings per Share................................................................................................................................... 33 8 / Trade and Other Receivables................................................................................................................... 35 9 / Inventories................................................................................................................................................ 35 1 INFINEON TECHNOLOGIES QUARTERLY REPORT MARCH 31, 2011 CONTENT 10 / Trade and Other Payables................................................................................................................... 35 11 / Provisions ............................................................................................................................................ 36 12 / Debt ..................................................................................................................................................... 36 13 / Equity................................................................................................................................................... 37 14 / Share-based compensation ................................................................................................................. 38 15 / Related Parties .................................................................................................................................... 38 16 / Commitments and Contingencies ........................................................................................................ 39 17 / Operating Segment Information ........................................................................................................... 43 Responsibility Statement by the Management Board............................................................................................ 45 Review Report....................................................................................................................................................... 46 Supplementary Information (Unaudited)................................................................................................................ 47 2 INFINEON TECHNOLOGIES QUARTERLY REPORT MARCH 31, 2011 SELECTED CONSOLIDATED FINANCIAL DATA SELECTED CONSOLIDATED FINANCIAL DATA ThreemonthsendedMarch31, SixmonthsendedMarch31, € in millions; except earnings per share and Total Segment Result Margin 2011 2010 2011 2010 Selected Results of Operations Data Revenue 994 781 1,916 1,468 Total Segment Result 202 96 379 166 Total Segment Result Margin 20.3% 12.3% 19.8% 11.3% Income from continuing operations 173 75 322 16 Income from discontinued operations, net of income taxes 399 4 482 128 Net income 572 79 804 144 Basic earnings per share attributable to shareholders of 0.53 0.07 0.74 0.13 Infineon Technologies AG (in Euro) Diluted earnings per share attributable to shareholders of 0.50 0.07 0.70 0.13 Infineon Technologies AG (in Euro) Selected Liquidity Data Net cash provided by operating activities from continuing 177 207 311 308 operations Net cash provided by operating activities 261 173 471 320 Net cash used in investing activities from continuing operations1 (1,632) (372) (1,762) (492) Net cash used in investing activities1 (555) (389) (740) (302) Net cash used in financing activities from continuing operations (152) (145) (232) (205) Net cash used in financing activities (151) (145) (235) (205) Net decrease in cash and cash equivalents (445) (361) (504) (187) As of € in millions; except number of employees March 31, 2011 September 30, 2010 Selected Financial Condition Data Total assets 5,724 4,993 Total equity 3,249 2,625 Gross cash position 2,691 1,727 Debt (short-term and long-term) 356 396 Net cash position 2,335 1,331 Employees2 25,119 26,654 1 Thereof € 1,468 million and € 348 million net purchases of financial investments during the six months ended March 31, 2011 and 2010, respectively (three months ended March 31, 2011 and 2010: € 1,468 million and € 350 million, respectively). 2 Prior period amount includes the employees transferred to Intel as part of the sale of the Wireless mobile phone business. 3 INFINEON TECHNOLOGIES QUARTERLY REPORT MARCH 31, 2011 INTERIM GROUP MANAGEMENT REPORT (UNAUDITED) INTERIM GROUP MANAGEMENT REPORT (UNAUDITED) FIRST SIX MONTHS OF THE 2011 FISCAL YEAR: INFINEON CONTINUES TO PERFORM WELL Second quarter of the 2011 fiscal year (January 1, 2011 to March 31, 2011): Revenue up by 27 percent to €994 million, an increase of 8 percent on the previous quarter. Total Segment Result improved to €202 million, more than double the result of €96 million reported for the second quarter one year earlier. Total Segment Result was also 14 percent ahead of the previous quarter. Total Segment Result Margin (defined as Revenue divided by Total Segment Result) of 20 percent, compared to 12 percent in the second quarter of the 2010 fiscal year and 19 percent in the first quarter of the current fiscal year. Net income improved to €572 million, compared to €79 million in the same quarter last year. The current year’s figure includes income from discontinued operations of