Liquidity and capital resources
Our liquidity is affected by many factors, some of which are related to our ongoing operations while others are related to the semiconductor and semiconductor equipment industries, and to the economies of the countries in which we operate. Although our cash requirements fluctuate based on the timing and extent of these factors, we believe that cash generated by operations, together with the liquidity provided by our existing cash resources and our financing arrangements, will be sufficient to fund working capital, capital expenditures and other ongoing business requirements for at least the next 12 months.
On December 31, 2014, the Company’s principal sources of liquidity consisted of €386 million in cash and cash equivalents and €150 million in undrawn bank lines.
For the most part, our cash and cash equivalents are not guaranteed by any governmental agency. We place our cash and cash equivalents with high quality financial institutions to limit our credit risk exposure.
Cash flow front-end segment
In our continuing operations we generated cash from operating activities of €124.7 million (2013: €65.6 million). In our continuing operations we used €46.1 million (2013: €25.2 million) for investing activities. In our continuing operations we used cash for financing activities of €37.9 million in 2014 and €285.2 million for 2013 (including a capital repayment of €269.5).
As per December 31, 2014 the Company was free of debt. In December 2013 we finalized the extension of ASMI’s existing standby revolving credit facility. The maturity date of the credit commitment of €150 million was extended to December 31, 2018. As per December 31, 2013 this facility was undrawn.
See Notes 4, 13, 16, 17 and 22 to our Consolidated financial statements for discussion of our funding, treasury policies and our long-term debt.
As per December 31, 2014 ASMI remains debt free. ASMI may borrow under separate short-term lines of credit with banks. The lines contain general provisions concerning renewal and continuance at the option of the banks. Total short-term lines of credit amounted to €150 million at December 31, 2014. The amount outstanding at December 31, 2014 was nil so the undrawn portion totaled €150 million. The undrawn portion represents the Company’s Standby Revolving Credit Facility of €150 million with a consortium of banks. In December 2013 the maturity date of the credit commitment of €150 million was extended from July 31, 2014 until December 31, 2018. Once the facility is used, this usage is secured by a portion of the Company’s shareholding in ASMPT or accounts receivable.
The credit facility of €150 million includes two financial covenants:
- minimum consolidated tangible net worth; and
- consolidated total net debt/total shareholders' equity ratio.
These financial covenants are measured twice each year, at June 30 and December 31. The Company is in compliance with these financial covenants as of June 30, 2014 and as of December 31, 2014.
See Notes 4, 13, 17 and 20 to our Consolidated financial statements for discussion of our funding, treasury policies and our long-term debt.
Our Back-end segment, which is conducted through ASMPT, our 39.75%-owned associate on December 31, 2014 had net cash to an amount of €275 million. The cash resources and borrowing capacity of ASMPT are not available to our Front-end segment.
Although certain directors of ASMPT are directors of ASM International, ASMPT is under no obligation to declare dividends to shareholders or enter into transactions that are beneficial to us. As a substantial shareholder, we can participate in the shareholders approval of the payment of dividends, but cannot compel their payment or size. Cash dividends received from ASMPT during 2012, 2013 and 2014 were €29.6 million, €10.3 million and €20.0 million, respectively.
At the end of 2014 the market value of our 39.75% investment in ASMPT was approximately €1,257 million (carrying value €1,092 million).