STMicroelectronics Reports 2006 First Quarter Revenues and Earnings
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STMicroelectronics Reports 2006 First Quarter Revenues and Earnings

- Net operating cash flow was $187 million in the quarter.

GENEVA, April 25 /PRNewswire-FirstCall/ -- STMicroelectronics (NYSE: STM) reported financial results for the first quarter ended April 1, 2006.

Revenues, Gross Profit, and Margin Review

Net revenues for the first quarter were $2,364 million, 13.5% above the $2,083 million reported in last year's first quarter. This year-over-year growth was driven by double-digit sales increases in automotive and wireless applications. Wireless revenues grew over 40% compared to the year-ago quarter. Sequentially, net revenues declined 1.1% from the $2,389 million reported in the prior quarter. Sequential sales performance was driven by growth in automotive and digital consumer applications. In addition wireless application revenues, while lower sequentially, experienced less seasonality than originally expected.

Gross profit was $837 million for the 2006 first quarter, an increase of $152 million from $685 million in last year's first quarter. Gross margin was 35.4% in the first quarter, an increase of 2.5 percentage points from 32.9% in last year's first quarter. On a sequential basis, gross profit and gross margin decreased from the fourth quarter levels of $872 million and 36.5%, respectively, largely reflecting seasonal factors.

Operating Expenses

Combined selling, general, & administrative and research & development expenses represented 28.1% of net revenues in the first quarter, compared to 32.1% in the year-ago quarter and 27.7% in the fourth quarter of 2005. R&D expenses of $409 million in the first quarter were slightly higher than the $402 million in the prior quarter while SG&A expenses were $256 million for the 2006 first quarter compared to $259 million in the fourth quarter of 2005.

Operating Income, Net Income, and Earnings per Share

For the 2006 first quarter, the Company reported operating income of $140 million and net income of $132 million, or $0.14 per share. In the year-ago quarter, the Company reported an operating loss of $68 million and a net loss of $31 million or $-0.03 per share. In the prior quarter, the Company reported operating income of $197 million and net income of $183 million or $0.20 per share.

The Company posted $13 million of impairment, restructuring charges, and other related closure costs during the 2006 first quarter, representing an after-tax earnings per share impact of approximately $0.01. In the prior quarter, restructuring-related expenses were $16 million. In the year-ago quarter, the Company incurred $78 million in impairment, restructuring charges, and other related closure costs. First quarter of 2006 results included $4 million in pre-tax, stock-based compensation expenses versus $9 million in the prior quarter.

In the first quarter of 2006, the effective average exchange rate for the Company was approximately $1.20 to Euro 1.

Cash Flow and Balance Sheet Highlights

Net cash from operating activities in the first quarter was $577 million compared to $555 million in the prior quarter. Capital expenditures were $297 million in the 2006 first quarter, compared to $230 million in the prior quarter. Net operating cash flow* was $187 million for the first quarter, compared to $-216 million in the year-ago quarter, and $290 million in the prior quarter.

At April 1, 2006, reflecting the completion of a convertible note and bond issuance, ST's cash and short-term deposits grew to $3.73 billion and total debt was $3.33 billion. Net financial position** improved by approximately $600 million over the prior year quarter, to a net cash position of $400 million. Shareholders' equity was $8.8 billion at April 1, 2006.

    (*) Net operating cash flow is defined as net cash from operating
        activities ($577 million in the first quarter of 2006) minus net cash
        used in investing activities excluding payments for purchase of and
        proceeds from the sale of marketable securities and short-term
        deposits ($390 million in the first quarter of 2006).

    (**) Net financial position is defined as cash, cash equivalents and
         short-term deposits ($3,734 million) minus total debt (bank
         overdrafts $0 million + current portion of long-term debt $1,509
         million + long-term debt $1,825 million).

    President and CEO Remarks

Carlo Bozotti, President and CEO, commented, "ST had a very solid start to the year, with revenues coming in at the top end of our objectives. The Company's sequential sales performance benefited from growth in digital consumer and automotive as well as stronger wireless results than we initially expected. Furthermore, year-over-year ST grew revenues on a double-digit basis, which we believe is a good indicator that 2006 will be a year of market- share gains for the Company.

"Supporting our view is an expanding customer base and stronger product pipeline for 2006, where we expect to introduce major new products for our key platforms in each quarter of the year. We are already seeing the first benefits of our new digital consumer offerings and, looking ahead, we plan to begin shipping our Nomadik multimedia processor to our first wireless customer in the second quarter. We expect to finish 2006 with a much stronger product portfolio, which has important implications for our gross and operating margins over the medium term as planned.

"In summary, we continue to execute on our corporate performance roadmap put in place one year ago and are well on track with our initiatives across the Company. These efforts are resulting in improved earnings per share and cash flow."

Additional First Quarter 2006 Financial and Operating Data

The following table and commentary provide a breakdown of revenues and operating income (loss) by product segment.

    Net Revenues and Operating Income (Loss) by Product Segment:

    In Million US$                              Q1 2006
                                                                     Operating
                                                  Net     % of Net     income
    Segment                                     Revenues  Revenues     (loss)

    Application Specific Product Group*         $1,317     55.7%         $95
    MPA (Micro, Power & Analog)**                  491     20.8%          64
    MPG (Memory Products Group)                    539     22.8%           1
    Others (1)(2)                                   17      0.7%         (20)

    TOTAL                                       $2,364      100%        $140

    * Automotive; Computer Peripheral; and Home, Personal, and Communication
      products

    ** Effective January 1, 2006 the Microcontroller, Linear and Discrete
       (MLD) Group was renamed as the Micro, Power and Analog (MPA) product
       segment to better reflect product portfolio focus and increased
       capabilities in advanced Analog.  No change occurred in the Group's
       perimeter or organization.

    (1) Net revenues of "Others" include revenues from sales of Subsystems and
        other products not allocated to product segments.

    (2) Operating loss of "Others" includes items such as impairment,
        restructuring charges, and other related closure costs, start-up
        costs, and other unallocated expenses such as strategic or special
        research and development programs, certain corporate-level operating
        expenses, certain patent claims and litigations, and other costs that
        are not allocated to the product segments, as well as operating
        earnings or losses of the Subsystems and Other Products segment.
        Certain costs, mainly R&D, formerly in the "Others" category, have
        been allocated to the segments.

Sequentially, Application Specific Product Group revenues increased 0.9%, MPA sales were lower by 0.5%, and MPG sales declined 5.9%. Operating profit decreased seasonally for all segments with operating income of $95 million, $64 million, and $1 million for Application Specific Product Group, MPA, and MPG, respectively. Flash memory sales decreased 3.9% sequentially to $407 million.

Q1 2006 Net Revenues by Market Segment

The following table estimates, within a variance of 5% to 10% in the absolute dollar amount, the relative weighting of each of the Company's target market segments in the first quarter of 2006.

        % of Net Revenues
        Automotive                            15%
        Consumer                              16%
        Computer                              17%
        Telecom                               38%
        Industrial & Others                   14%

Four of the five market segments experienced sequential sales declines with decreases of approximately 2% for Telecom, Consumer, Industrial & Others; and slightly over 1% for Computer. Automotive net revenues increased nearly 4% sequentially.

Outlook

Mr. Bozotti stated, "Looking at the semiconductor market for 2006, we still see a year of high single-digit growth compared to 2005, a healthy level that will allow for a continuing expansion of our industry. For ST, we continue to see strong order flow. As a result we expect sequential sales growth in the range of 2% to 8%. Additionally, we expect to see sequential improvement in our gross margin, although some of our progress will not be visible in our reported gross margin figure in the second quarter, largely reflecting the final period of 6-inch manufacturing inefficiencies as we phase out three fab lines. Therefore, we believe it is appropriate to set a gross margin objective of about 35.8% plus or minus 100 basis points for the second quarter."

This guidance is based on an effective currency exchange rate for the Company of approximately $1.21 = Euro 1. Our effective exchange rate includes the impact of existing hedging contracts.

Other Corporate Developments

During the first quarter of 2006, ST issued debt instruments of approximately $1.6 billion, prior to the anticipated redemption of the Company's 2013 bond. The transactions consisted of a convertible bond, due 2016, with gross proceeds of $974 million including the exercise of the over- allotment option and the Company's debut offering in the Eurobond market for Euro 500 million of floating-rate bonds.

    Products, Technology and Design Wins

    Application-Specific Product Highlights

    -- In mobile communications, ST announced the STn8815, the third
       generation of Nomadik(TM) mobile multimedia application processor
       family, and an endorsement from Nokia. The Nomadik family also gained
       an automotive design win, in an application to deliver video over DMB
       (Digital Multimedia Broadcast) in the car, from a European OEM.

    -- ST announced volume production of its STLC4370 Wireless LAN (WLAN)
       IEEE802.11g solution, designed for cellular handsets. This low-power
       solution has already been designed into several Wi-Fi-enabled cellular
       handsets.

    -- ST started sampling its next-generation Bluetooth device to several
       tier-one mobile phone customers. The new product combines Bluetooth
       with FM and RDS (Radio Data System) functionality and is believed to
       offer the world's lowest power consumption together with the lowest
       number of required external components.

    -- Maintaining the momentum that propelled ST to the number one position
       for mobile phone camera modules, ST launched two more important imaging
       devices: the STV0984 image system controller supports two SMIA-
       compliant sensors with resolution of up to 2 megapixels in an ultra-
       low-power imaging solution and the VS6624 single-chip 1.3-megapixel
       camera subsystem integrates a CMOS sensor with a digital image
       processor and analog system functions in a tiny package for high-volume
       mobile applications.

    -- In communications infrastructure markets, ST announced its turnkey
       solution for the new 'mobile WiMAX'-standard (802.16e) base-station
       modems and consolidated its worldwide leadership in high-speed BiCMOS
       technologies by launching a partnership with Finisar, the market leader
       in the high-speed transceivers solutions for optical communications.
       Finisar will use ST's BiCMOS technology for all its new optical module
       development.

    -- ST launched the STi5188 low-cost satellite set-top box (STB) decoder
       chip for high-volume free-to-air (FTA) markets in Asia, the Middle
       East, Africa, South America, and Europe. This highly integrated device
       enables digital receivers to compete in cost with analog sets. ST also
       announced with AMD the commitment to bring immersive digital
       entertainment to advanced TVs; the first step in this effort is a
       network-connected STB reference design based on the STB7100 single-chip
       HDTV solution.

    -- ST introduced the DTV100, a high-performance dual-channel digital TV
       solution. The Company simultaneously announced a worldwide-standard-
       compliant reference design based on the STD2000, ST's latest single-
       chip high-definition TV processor, which can decode and display analog
       and digital broadcasts.

    -- ST gained an important design win for the STV82x8 family of digital
       audio decoder/processor chips, which it announced this quarter. The

       device will be used in a flat-panel TV project at Samsung. ST also
       started volume delivery of its STA323W digital-input Class-D power
       amplifier to all the main flat-panel TV customers including Samsung,
       LG, Panasonic, and Humax.

    -- ST and Freescale announced a wide-ranging initiative covering high-
       performance, cost-effective 32-bit microcontrollers. The initiative
       focuses on automotive applications and includes the creation of a joint
       design team to develop products to address powertrain, safety,
       navigation and multimedia applications, based on aligned 90nm embedded
       Flash process technology, and also the supply of ST's high-voltage
       power MOSFET and IGBT chips with the possible future transfer of the
       underlying technologies.

    -- In powertrain and safety, ST gained several design wins: a Japanese OEM
       selected an ST kit for electronic power steering for a 2008 model-year
       car; a tier-one European customer chose an ST powertrain kit for a US
       car maker's 2009 model-year vehicle; and a major Chinese OEM awarded ST
       a major kit for engine control.

    -- In telematics, ST captured a design win for a CD servo IC with MP3
       decoder from a major Chinese OEM, two important design-ins for custom
       SoCs for GPS applications, and consolidated its strong position in the
       digital satellite radio market by sampling three new chips, implemented
       in 90nm technology, for production in Q4 2006.

    -- In automotive body applications, ST's market leadership in intelligent
       high power modules was strengthened by several design wins from major
       OEMs in Europe and the US. ST also achieved design wins in smart power
       ICs with major OEMs in China.

    -- In computer systems, ST gained two design wins at a leading printer
       manufacturer:  the first for a mixed-signal ASIC for use in a number of
       new models of an inkjet printer family; the second for a 90nm digital
       ASIC for use in the mid-range models in multifunction printer and photo
       printer families.

    -- In data storage, ST achieved a design win for its next-generation 90nm
       SoC solutions with a major hard-disk drive (HDD) manufacturer for
       mobile and desktop HDD applications. Already in production with a 130nm
       solution, the new family expands the portfolio of SoCs based on ST-
       developed Intellectual Property specifically for read-channel and
       serial interface chips.

    -- ST's innovative In-Check Lab-on-Chip continues to attract developers.
       ST and Veredus Laboratories announced efforts to develop a fast, point-
       of-need diagnostic product to enable health-care practitioners to
       detect strains of Avian Flu and other influenza viruses within
       approximately one hour of testing.

    Multi-Segment Product Highlights

    -- In Flash memory, at the International Solid State Circuits Conference
       (ISSCC), ST unveiled details of an advanced 4 Gigabit Multi-Level Cell
       NAND Flash memory that achieves 50% greater throughput than any
       previous results from any company. Additionally, ST released details of
       a new MCP (Multi-Chip Package) NAND Flash portfolio for multimedia
       applications in 3G and CDMA mobile phones and other portable devices.

    -- ST also announced a new 128-Mbit Serial Flash device, the M25P128,
       which is intended principally for code storage in a broad range of high
       performance, cost sensitive, computer and consumer applications.

    -- To address the fast-growing ZigBee wireless networking market for
       remote monitoring, control, and sensor-network applications, ST signed
       an agreement with Ember to jointly develop a complete roadmap of next-
       generation ZigBee solutions, including hardware, software, and tools.

    -- ST launched the ST7FLITEUS series of 8-bit microcontrollers, which
       includes a full set of peripherals, in tiny 8-pin packages. These MCUs
       suit simple, cost-sensitive applications such as security, lighting,
       and motor control. ST also introduced a series of low-cost
       microcontrollers within the ST7Lite family and larger SRAM versions of
       the high-performance 8051-based uPSD3400 Turbo Plus microcontroller
       series.

    -- The Company's STR7 family of 32-bit ARM-based Flash microcontrollers
       was adopted by a leading European manufacturer as a general
       microcontroller platform for industrial power management, with designs
       in circuit breakers, communication modules, and motor-protection
       equipment.

    -- Aiming to expand its presence in home- and building-automation
       applications and Automatic Meter Reading (AMR) systems, ST announced
       the ST7538P and ST7540 power-line transceivers and introduced a motor-
       control reference design kit that simplifies the evaluation and
       implementation of practical 3-phase BLDC (Brushless Direct Current) and
       AC drive applications across three power ranges, up to 3kW.

    -- In amplifier and linear products, ST announced the TS4962 compact
       Class-D audio power amplifier, which gained an important design win
       from a major manufacturer for several mobile phone platforms; and two
       new 300MHz amplifiers, the TSH340/1, which drive very high-definition
       signals on 75-ohm video lines in high-end industrial and medical
       imaging systems, and in HDTV-enabled set-top boxes and DVD players.

    -- In advanced analog, ST gained a design win for real-time clock ICs and
       an audio DAC ASIC with a major customer for a multi-function printer
       application; and the STM6720 multi-voltage reset IC gained a design win
       in a set-top box platform with Scientific Atlanta.

    -- Following the launch of a worldwide marketing effort, ST secured a
       series of design wins for high-voltage IGBTs for various applications,
       including air conditioners, lighting, and induction cookers.

All of STMicroelectronics' press releases (including all Q1 releases) are available at www.st.com/stonline/press/news/latest.htm

Some of the statements contained in this release that are not historical facts are statements of future expectations and other forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended) based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those in such statements due to, among other factors:

    -- future developments of the world semiconductor market, in particular
       the future demand for semiconductor products in the key application
       markets and from key customers served by our products;

    -- pricing pressures, losses, or curtailments of purchases from key
       customers;

    -- the financial impact of obsolete or excess inventories if actual demand
       differs from our anticipations;

    -- changes in the exchange rates between the U.S. Dollar and the Euro,
       compared to the effective exchange rate of $1.21= Euro 1, and between
       the U.S. Dollar and the currencies of the other major countries in
       which we have our operating infrastructure;

    -- our ability to manage our fixed costs structure, including our ability
       to adequately utilize our manufacturing facilities at sufficient levels
       to cover fixed operating costs  in an intensively competitive and
       cyclical industry;

    -- our ability in an intensive competitive environment, to secure
       customer acceptance and to achieve our pricing expectations for high
       volume supplies of our new products currently under development;

    -- the anticipated benefits of research & development alliances and
       cooperative activities and the continued pursuit of our various
       alliances, in the field of development of new advanced technologies or
       products;

    -- the ability of our suppliers to meet our demands for supplies and
       materials  and to offer competitive pricing;

    -- changes in the economic, social, or political environment, as well as
       natural events such as severe weather, health risks, epidemics or
       earthquakes in the countries in which we and our key customers operate;

    -- changes in our overall tax position as a result of changes in tax laws
       or the outcome of tax audits;

    -- our ability to obtain required licenses on third-party intellectual
       property, the outcome of litigations and the results of actions by  our
       competitors.

Such forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of our business to differ materially and adversely from the forward-looking statements. Certain such forward-looking statements can be identified by the use of forward-looking terminology such as "believes," "may," "will," "should," "would be," "anticipates," or similar expressions, or the negative thereof, or other variations thereof, or comparable terminology, or by discussions of strategy, plans, or intentions. Some of these risk factors are set forth and are discussed in more detail in "Item 3. Key Information-Risk Factors" included in our Annual Report on Form 20-F for the year ended December 31, 2005, as filed with the SEC on March 3, 2006. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this release as anticipated, believed, or expected. We do not intend, and do not assume any obligation, to update any industry information or forward-looking statements set forth in this release to reflect subsequent events or circumstances.

Unfavorable changes in the above or other factors listed under "Risk Factors" from time to time in our SEC filings, including in our Form 20-F, could have a material adverse effect on our business or financial condition.

Conference Call Information

The management of STMicroelectronics will conduct a conference call on April 26, 2006, at 9:00 a.m. U.S. Eastern Time / 3:00 p.m. CET, to discuss performance for the first quarter of 2006.

The conference call will be available via the Internet by accessing the following Web address: http://www.vcall.com . Those viewing the webcast should go to the Web site at least 15 minutes prior to the call, in order to register, download, and install any necessary audio software. The webcast will be available until May 5, 2006.

About STMicroelectronics

STMicroelectronics is a global leader in developing and delivering semiconductor solutions across the spectrum of microelectronics applications. An unrivalled combination of silicon and system expertise, manufacturing strength, Intellectual Property (IP) portfolio and strategic partners positions the Company at the forefront of System-on-Chip (SoC) technology and its products play a key role in enabling today's convergence markets. The Company's shares are traded on the New York Stock Exchange, on Euronext Paris and on the Milan Stock Exchange. In 2005, the Company's net revenues were $8.88 billion and net earnings were $266 million. Further information on ST can be found at http://www.st.com .

                              (tables attached)

    For further information, please contact:

    INVESTOR RELATIONS:
    Stanley March                         Fabrizio Rossini
    Vice President, Investor Relations    Investor Relations Senior Manager
    Tel: +1.212.821.89.39                 Tel: +41.22.929.69.73
    Fax: +1.212.821.89.23                 Fax: +41.22.929.69.61
    Email: 
Email Contact              Email: 
Email Contact

    MEDIA RELATIONS:
    Maria Grazia Prestini
    Corporate Media and Public Relations
    STMicroelecronics
    Phone: + 41 22 929 6945
    
Email Contact



    STMicroelectronics N.V.
    Consolidated Statements of Income
    (in million of U.S. dollars, except per share data ($))

                                                       Three Months Ended
                                                (Unaudited)        (Unaudited)
                                                   April 1,           April 2,
                                                      2006               2005

    Net sales                                        2,363              2,081
    Other revenues                                       1                  2
      NET REVENUES                                   2,364              2,083
    Cost of sales                                   (1,527)            (1,398)
      GROSS PROFIT                                     837                685
    Selling, general and administrative               (256)              (265)
    Research and development                          (409)              (404)
    Other income and expenses, net                     (19)                (6)
    Impairment, restructuring charges
     and other related closure costs                   (13)               (78)
      Total Operating Expenses                        (697)              (753)
      OPERATING INCOME (LOSS)                          140                (68)
    Interest income, net                                22                  7
    Loss on equity investments                          (4)                 0
      INCOME (LOSS) BEFORE INCOME TAXES
       AND MINORITY INTERESTS                          158                (61)
    Income tax benefit (expense)                       (28)                31
      INCOME (LOSS) BEFORE MINORITY
       INTERESTS                                       130                (30)
    Minority interests                                   2                 (1)
      NET INCOME (LOSS)                                132                (31)

      EARNINGS (LOSS) PER SHARE (BASIC)               0.15              (0.03)
      EARNINGS (LOSS) PER SHARE (DILUTED)             0.14              (0.03)

      NUMBER OF WEIGHTED AVERAGE
      SHARES USED IN CALCULATING                     956.1              893.1
      DILUTED EARNINGS (LOSS) PER SHARE



       STMicroelectronics N.V.
       CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                      Three Months Ended
                                                  April 1,           April 2,
       In million of U.S. dollars                    2006               2005
                                               (Unaudited)        (Unaudited)

       Cash flows from operating
        activities:
         Net income (loss)                            132                (31)
         Items to reconcile net income
          (loss) and cash flows from
          operating activities
           Depreciation and
            amortization                              452                506
           Amortization of discount on
            convertible debt                            3                  1
           Other non-cash items                         3                  2
           Minority interest in net
            income (loss) of
            subsidiaries                               (2)                 1
           Deferred income tax                        (13)               (23)
           Loss on equity investments                   4                  0
           Impairment, restructuring
            charges and other related
            closure costs, net of cash
            payments                                  (11)                60
         Changes in assets and
          liabilities:
           Trade receivables, net                     (83)               (24)
           Inventories, net                           (53)               (65)
           Trade payables                              93                (57)
           Other assets and
            liabilities, net                           52                (11)
       Net cash from operating
        activities                                    577                359

       Cash flows from investing
        activities:
         Payment for purchases of
          tangible assets                            (297)              (564)
         Payment for purchases of
          marketable securities                         0               (525)
         Investment in short-term
          deposits                                   (903)                 0
         Investment in intangible and
          financial assets                            (23)               (11)
         Capital contributions to
          equity investments                          (70)                 0
       Net cash used in investing
        activities                                 (1,293)            (1,100)

       Cash flows from financing
        activities:
         Proceeds from issuance of
          long-term debt                            1,564                  0
         Repayment of long-term debt                  (49)               (20)
         Decrease in short-term
          facilities                                  (11)               (19)
         Capital increase                               3                  1
       Net cash from (used in)
        financing activities                        1,507                (38)
         Effect of changes in exchange
          rates                                        13                 (9)
       Net cash increase (decrease)                   804               (788)

       Cash and cash equivalents at
        beginning of the period                     2,027              1,950
       Cash and cash equivalents at end
        of the period                               2,831              1,162



        STMicroelectronics N.V.
        CONSOLIDATED BALANCE SHEETS

        As at                                April 1,  December 31,  April 2,
        In million of U.S. dollars              2006        2005        2005
                                          (Unaudited)   (Audited) (Unaudited)

        ASSETS
        Current assets:
        Cash and cash equivalents              2,831       2,027       1,162
        Marketable securities                      0           0         525
        Short-term deposits                      903           0           0
        Trade accounts receivable, net         1,563       1,490       1,414
        Inventories, net                       1,479       1,411       1,369
        Deferred tax assets                      152         152         141
        Other receivables and assets             563         531         740
        Total current assets                   7,491       5,611       5,351

        Goodwill                                 223         221         228
        Other intangible assets, net             218         224         250
        Property, plant and equipment,
         net                                   6,152       6,175       7,039
        Long-term deferred tax assets             66          55          59
        Investments and other non-current
         assets                                  235         153         119
                                               6,894       6,828       7,695
        Total assets                          14,385      12,439      13,046

        LIABILITIES AND SHAREHOLDERS'
         EQUITY
        Current liabilities:
        Bank overdrafts                            0          11          37
        Current portion of long-term debt      1,509       1,522         158
        Trade accounts payable                 1,084         965       1,027
        Other payables and accrued
         liabilities                             650         642         852
        Deferred tax liabilities                   6           7           7
        Accrued income tax                       170         152         157
        Total current liabilities              3,419       3,299       2,238

        Long-term debt                         1,825         269       1,702
        Reserve for pension and
         termination indemnities                 270         270         265
        Long-term deferred tax
         liabilities                              51          55          50
        Other non-current liabilities             16          16          22
                                               2,162         610       2,039
        Total liabilities                      5,581       3,909       4,277
        Commitment and contingencies
        Minority interests                        48          50          49
        Common stock (preferred stock:
         540,000,000 shares authorized,
         not issued;                           1,153       1,153       1,150
         common stock: Euro 1.04 nominal
         value, 1,200,000,000 shares
         authorized, 908,025,619 shares
         issued, 894,625,619 shares
         outstanding)
        Capital surplus                        1,974       1,967       1,925
        Accumulated result                     5,559       5,427       5,237
        Accumulated other comprehensive
         income                                  418         281         756
        Treasury stock                          -348        -348        -348
        Shareholders' equity                   8,756       8,480       8,720
        Total liabilities and
         shareholders' equity                 14,385      12,439      13,046

CONTACT: INVESTOR RELATIONS: Stanley March, Vice President, Investor
Relations, +1-212-821-8939, Fax: +1-212-821-8923, Email Contact, or
Fabrizio Rossini, Investor Relations Senior Manager, +41-22-929-69-73, Fax:
+41-22-929-69-61, Email Contact; or MEDIA RELATIONS: Maria Grazia
Prestini, Corporate Media and Public Relations, +41-22-929-6945,
Email Contact, all of STMicroelecronics

Web site: http://www.st.com/