SMIC Reports 2013 Fourth Quarter Results

Other financial assets increased to $240.3 million in 4Q13 from $2.6 million in 3Q13, primarily because the Company issued US$200.0 million zero coupon convertible bonds in 4Q13 and temporarily invested them in short-term investments carried at fair value through profit or loss.

Cash Flow

Amounts in US$ thousands	4Q13	3Q13
Net cash from operating activities	205,437	269,581
Net cash used in investing activities	(269,147)	(213,133)
Net cash from financing activities	52,749	154,045
Effect of exchange rate changes	(63)	59
Net change in cash	(11,024)	210,552

Capex Summary

Capital expenditures for 4Q13 were $114.3 million.
Capital expenditures for foundry operations in 2013 were $651 million. Capital expenditures for non-foundry operations were $119 million, which were mainly for the construction of living quarters for employees as part of the Company's employee retention program.
The planned 2014 capital expenditure for our foundry operation is approximately $880 million of which around $570 million is for our new Beijing project, which is 55% funded by SMIC and 45% funded by the other shareholders of the project.
In addition, we have budgeted 2014 capital expenditures for non-foundry operations of approximately $110 million mainly for the construction of living quarters.

Recent Highlights and Announcements

ARM and SMIC Broaden IP Partnership with 28nm Process for Mobile and Consumer Applications (2014-02-09)
Circulars - Notification Letter and Request Form to Non-registered Shareholders (2014-01-28)
Circulars - Notification Letter to Registered Shareholders (2014-01-28)
Notice of Extraordinary General Meeting (2014-01-28)
Proxy Forms - Form of Proxy for Use at the Extraordinary General Meeting to be Held on 17 February 2014 (2014-01-28)
Circulars - Non-exempt Connected Transactions (1) Pre-emptive Subscription of Bonds by Datang and Country Hill (2) Proposed Further Special Mandates to Issue Conversion Shares on Conversion of the Pre-emptive Bonds (3) Notice of Extraordinary General Meeting (2014-01-28)
Notification of Board Meeting (2014-01-27)
SMIC Unveils 28nm Readiness and MPW Milestone (2014-01-26)
Dual-interface Financial IC Card Chip Based on SMIC's eEEPROM Platform Gains CC EAL4+ Certification (2014-01-22)
"SMIC Liver Transplant Program for Children" Helps 18 Kids (2014-01-13)
Delay in Despatch of Circular (2014-01-13)
eMemory and SMIC Expand Partnership in eNVM Technical Development (2013-12-30)
(1) Non-exempt Connected Transactions and (2) Pre-emptive Subscription of Bonds by Datang and Country Hill (2013-12-18)
(1) Non-exempt Connected Transactions (2) Exercise of Pre-emptive Rights by Datang and Country Hill (2013-11-08)
Completion of the Issue of US$200,000,000 Zero Coupon Convertible Bonds Due 2018 (2013-11-07)
Grant of Options (2013-11-04)
(1) Proposed Issue of US$200 Million Zero Coupon Convertible Bonds Due 2018 (2) Pre-emptive Right of Datang and (3) Pre-emptive Right of Country Hill (2013-10-25)
Potential Non-exempt Connected Transactions; Potential Exercise of Pre-emptive Rights by Datang and Country Hill (2013-10-24)
SMIC Reports Unaudited Results for the Three Months Ended September 30, 2013 (2013-10-22)
List of Directors and Their Roles and Functions (2013-10-22)
Appointment of Alternate Director (2013-10-22)
SMIC Announces Formation of Center for Vision, Sensors and 3DIC (2013-10-21)
SMIC Offers Differentiated 0.13um Low-Leakage Embedded Flash Manufacturing Process (2013-10-15)
Notification of Board Meeting (2013-10-08)
Bank Card IC Products Adopting SMIC eEEPROM Platform Certified by China Union Pay (2013-10-08)
SMIC IP R&D Center Applies EDA Solution of Beijing Empyrean (2013-10-04)

Please visit SMIC's website at http://www.smics.com/eng/press/press_releases.php and http://www.smics.com/eng/investors/ir_filings.php for further details regarding the recent announcements.

Semiconductor Manufacturing International Corporation CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND COMPREHENSIVE INCOME (In US$ thousands except share data)

			For the three months ended
			December 31, 2013	September 3 0, 201 3
			(Unaudited)	( Un audited)

Revenue			491,797	534,256
Cost of sales			(398,858)	(422,274)
Gross profit			92,939	111,982
Research and development expenses			(46,256)	(37,564)
General and administration expenses			(36,610)	(24,718)
Sales and marketing expenses			(8,385)	(9,324)
Other operating income			6,411	8,159
Profit from operation			8,099	48,535
Other income (expense), net			7,756	(4,681)
Profit before tax			15,855	43,854
Income tax expense			(170)	(914)
Profit for the period			15,685	42,940
Other comprehensive income
Item that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations			333	77
Total comprehensive income for the period			16,018	43,017
Profit for the period attributable to:
Owners of the Company			14,681	42,491
Non-controlling interests			1,004	449
			15,685	42,940
Total comprehensive income for the period attributable to:
Owners of the Company			15,014	42,568
Non-controlling interests			1,004	449
			16,018	43,017

Earnings per share attributable to Semiconductor Manufacturing International Corporation ordinary shareholders, basic and diluted			0.00	0.00
Earnings per ADS attributable to Semiconductor Manufacturing International Corporation ordinary ADS holders, basic and diluted			0.02	0.07

Shares used in calculating basic earnings per share			32,102,304,565	32,083,651,959
Shares used in calculating diluted earnings per share			33,692,855,386	32,354,552,218

Reconciliations of Non- GAAP Financial Measures to Comparable GAAP Measures ⁽ ¹ ⁾
Non-GAAP revenue			483,597	503,669
Non-GAAP cost of sales			(390,879)	(392,407)
Non-GAAP gross margin			19.2%	22.1%

Note :
(1)	SMIC defines non-GAAP revenue, non-GAAP cost of sales and non-GAAP gross margin, which are non-GAAP financial measures, as revenue, cost of sales and gross margin, in each case excluding wafer shipments from Wuhan Xinxin. SMIC reviews non-GAAP financial measures together with revenue, cost of sales and gross margin to understand, manage and evaluate its business and make financial and operational decisions. The Company also believes it is useful supplemental information for investors and analysts to assess its operating performance without the effect of wafer shipments from Wuhan Xinxin, which were not output through its production capacity. SMIC announced in March 2013 that it had ceased to manage and operate the 300mm wafer fab in Wuhan owned by Wuhan Xinxin, and began gradually phasing out wafer shipments from Wuhan Xinxin in 3Q13. However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact our net profit for the period. In addition, because non-GAAP financial measures are not calculated in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measure in isolation from or as an alternative to revenue, cost of sales and gross margin prepared in accordance with IFRS. The following table sets forth the reconciliation of each of non-GAAP revenue, non-GAAP cost of sales and non-GAAP gross margin to its most directly comparable financial measure presented in accordance with IFRS, for the periods indicated.

		For the three months ended
		December 3 1, 201 3	September 3 0, 201 3	December 3 1, 201 2
		(Unaudited)	( Unaudited )	( Unaudited )
	Revenue	491,797	534,256	485,894
	Revenue from Wuhan Xinxin	(8,200)	(30,587)	(48,510)
	Non-GAAP revenue	483,597	503,669	437,384

	Cost of sales	(398,858)	(422,274)	(389,127)
	Cost of sales of Wuhan Xinxin	7,979	29,867	47,370
	Non-GAAP cost of sales	(390,879)	(392,407)	(341,757)

	Gross margin	18.9%	21.0%	19.9%
	Non-GAAP gross margin	19.2%	22.1%	21.9%

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