STMicroelectronics Reports 2007 Third Quarter and Nine Month Revenues and Earnin

    Third Quarter Net Revenues and Gross Profit Review    In Million US$ and %                            Q3 2007                                            ST            ST excluding FMG    Net Revenues                          $2,565                $2,213    Sequential Growth                       6.1%                  6.1%    Year-over-Year Growth                   2.1%                  3.7%

Net revenues for the third quarter increased 6.1% sequentially to $2,565million from the $2,418 million reported in the prior quarter, with growth ledby application-specific wireless and computer products. Excluding FMG, netrevenues also increased 6.1% sequentially.

In the 2007 third quarter, following a comprehensive review of employeebenefit plans, the Company revised its accounting for a seniority awardprogram existing at a large affiliate since 1986. Historically, charges wereexpensed when incurred and are now accrued over the service period of theemployee. In connection with this change the Company incurred a one-time, non-cash, pre-tax charge for past periods of about $21 million, of which more than$7 million are in cost of goods sold, more than $8 million are in R&D andnearly $5 million are in SG&A expenses. This revision to methodology had nomaterial impact on prior periods.

    In Million US$ and %                            Q3 2007                                            ST            ST excluding FMG    Gross Profit                            $902                  $865    Gross Margin                           35.2%                 39.1%

Gross profit was $902 million for the 2007 third quarter and the grossmargin was 35.2%. Before the seniority program charge, gross margin was 35.5%.Sequentially, both gross profit and gross margin improved from the priorquarter levels of $838 million and 34.7%, respectively. Excluding FMG, grossprofit was $865 million for the 2007 third quarter, representing a grossmargin improvement to 39.1%, compared to 37.8% in the second quarter. Grossmargin improvement in the quarter reflected better mix and manufacturingperformance, while only incorporating a portion of the recent exchange ratedegradation. In the year-ago quarter, the gross profit for the entire Companywas $904 million and the gross margin was 36.0%.

President and CEO Carlo Bozotti commented, "ST's third quarter financialresults came well in line with our expectations. Net revenues increased 6.1%sequentially, at the high end of our outlook range of 2% to 7%, and grossmargin was in the middle of our range excluding the one time charge. Withoutthe Flash Memories Group (FMG), gross margin reached 39.1%.

"Our Application Specific Groups (ASG), which represented 54% of netrevenues, posted the largest sequential quarterly improvements in both salesand operating income. ASG sales were up 7% sequentially on double-digitwireless and computer performance. Reflecting a more favorable product mix, aswell as manufacturing cost improvements, ASG's operating income increasedabout $90 million sequentially, leading to an operating margin over 10% forthe 2007 third quarter.

"ASG's performance in combination with good operating leverage in thethird quarter from our Industrial and Multisegment Sector (IMS) resulted inST's return on net assets (RONA), excluding FMG, reaching nearly 14%.

"We are moving towards the completion of the divestiture of our FlashMemories Group, which will become part of a new independent semiconductorcompany, Numonyx. Based upon current information, we anticipate the closing ofthe transaction during the fourth quarter, in line with the initialtimetable."

Operating Expenses

Combined selling, general & administrative and research & developmentexpenses represented 27.8% of net revenues in the third quarter, lower thanthe 29.6% in the second quarter of 2007, and somewhat above the 27.2% in theyear-ago quarter. R&D expenses of $442 million in the 2007 third quarter werefocused on product development while SG&A expenses of $272 million for the2007 third quarter were achieved by cost-control efforts and seasonal benefitsdespite currency and stock- based compensation effects. Excluding the one-timethird quarter charge, R&D and SG&A were $433 million and $268 millionrespectively, and combined were 27.3% of quarterly net revenues.

Operating Income and Profit Margin, Net Income and Earnings per Share

For the 2007 third quarter, the Company reported operating income of $181million, an operating margin of 7.0% (9.1% excluding seniority program andrestructuring and impairment charges of $21 million and $31 millionrespectively), and net income of $187 million, or $0.20 per diluted share($0.24 excluding seniority program and restructuring and impairment charges).In the year-ago quarter, the Company reported operating income of $194million, equal to an operating margin of 7.7% (8.5% excluding restructuringand impairment charges of $20 million), and net income of $207 million or$0.22 per share ($0.24 excluding restructuring and impairment charges). In theprior quarter, the Company reported an operating loss of $772 million,reflecting $906 million of impairment, restructuring charges and other relatedclosure costs primarily associated with the Company's plans to divest the FMGgroup. Excluding such costs, second quarter operating income was $134 million,operating margin was 5.5% and net income was $139 million or $0.15 per dilutedshare.

In the third quarter of 2007, the effective average exchange rate for theCompany was approximately $1.36 to euro 1, compared to $1.335 to euro 1 in thesecond quarter of 2007 and $1.255 to euro 1 in the year-ago quarter. TheCompany's effective exchange rate reflects actual exchange rate levelscombined with the impact of hedging programs.

Cash Flow and Balance Sheet Highlights

Net cash from operating activities was $511 million in the third quarterand $1,451 million for the first nine months of 2007. Net operating cash flow*was $255 million for the third quarter, compared to $225 million in the priorquarter and $81 million in the year-ago quarter. For the first nine months,net operating cash flow* totaled $652 million, up from $509 million in the2006 similar period.

Reflecting ST's successful progress in its lighter asset policy, capitalexpenditures were significantly lower for the quarter and year-to-date periodsin comparison to the respective 2006 periods. Specifically, capitalexpenditures were $228 million in the 2007 third quarter and $735 million forthe first nine months of 2007, compared to $451 million and $1,147 million forthe 2006 similar periods.

At September 29, 2007, ST's cash and cash equivalents, marketablesecurities, short-term deposits and restricted cash equaled $3.3 billion.Total debt was $2.2 billion. ST's net financial position** was $1.1 billion.Shareholders' equity was $9.3 billion.

* Net operating cash flow is a non-US GAAP metric, which the Company'smanagement utilizes as a measure of cash-generation capability. It is definedas net cash from operating activities ($511 million in the third quarter of2007) minus net cash used in investing activities (primarily capitalexpenditures) excluding restricted cash, payments for purchase of and proceedsfrom the sale of marketable securities and investment in and proceeds frommatured short-term deposits ($256 million in the third quarter of 2007).

** Net financial position is a non-US GAAP metric used by the Company'smanagement to help assess financial flexibility. It is defined as cash andcash equivalents, marketable securities, short-term deposits and restrictedcash ($3,289 million) minus total debt (bank overdrafts $0 million + currentportion of long-term debt $74 million + long-term debt $2,099 million).

Net Revenues by Market Segment for Q3 2007

The following table estimates, within a variance of 5% to 10% in theabsolute dollar amount, the relative weighting of each of the Company's targetmarket segments for the third quarter of 2007.

    As % of Net Revenues                          Q3 2007    Market Segment                       ST              ST excluding FMG    Automotive                           15%                   16%    Consumer                             17%                   18%    Computer                             16%                   17%    Telecom                              37%                   33%    Industrial & Other                   15%                   16%

For the combined Company results, Computer was up 14% sequentially andTelecom and Consumer were up 10% and 6%, respectively. Industrial and Otherswas approximately flat, and Automotive was lower by 3% sequentially. ExcludingFMG reduces the telecom market segment weighting by four percentage points,due to FMG's strong positioning within wireless, with the other four marketsegments benefiting equally.

Financial and Operating Data by Product Segment for Q3 2007

"An important highlight of the third quarter was our successful progressin wireless, demonstrating both ST's current, as well as future, leadershippositioning in this key market. We delivered double-digit sequential growthin wireless in the quarter. In addition, we have started to ramp, at a strongpace, our 3G digital baseband products at Ericsson Mobile Platform licensees.And finally, we entered into a strategic 3G digital-baseband sourcingagreement with Nokia on August 8th. We expect the Nokia transaction, whichincludes a talented team of design engineers, to close in the fourth quarterof 2007," added Carlo Bozotti.

    The following table provides a breakdown of revenues and operating incomeby product segment.    In Million US$ and %                                 Q3 2007                                                                  Operating                                                Net      % of Net   income    Segment                                   Revenues   Revenues   (loss)    ASG (Application Specific Product Groups)   $1,394     54.3%     $142    IMS (Industrial and Multisegment Sector)       804     31.4%      129    FMG (Flash Memories Group)                     352     13.7%      (35)    Others (1)(2)                                   15      0.6%      (55)    TOTAL                                       $2,565      100%     $181    (1) Net revenues of "Others" include revenues from sales of Subsystems and        other products not allocated to product segments.    (2) Operating loss of "Others" includes items such as impairment,        restructuring charges, and other related closure costs, start-up        costs, and other unallocated expenses such as strategic or special        research and development programs, certain corporate-level operating        expenses, certain patent claims and litigations, and other costs that        are not allocated to the product segments, as well as operating        earnings or losses of the Subsystems and Other Products segment. In        the 2007 third quarter the one-time charge for the seniority benefits        program are also included in "Others".    First Nine Months 2007 Results    In Million US$ and %              First Nine Months  2007                                    ST              ST excluding FMG    Net Revenues                  $7,258                $6,252    Year-over-Year Growth          -1.5%                  1.3%

Net revenues for the first nine-months were $7,258 million, a decrease of1.5% compared to 2006 first nine-month revenues of $7,371 million. ExcludingFMG, sales were 1.3% higher than last year's first nine-months.

Gross profit was $2,525 million, or 34.8% of net revenues, compared to$2,623 million or 35.6% of net revenues for the 2006 first nine-months.Excluding FMG and the third quarter seniority program charge, the gross profitand gross profit margin were $2,383 million and 38.1%, respectively, for the2007 first nine months.

Largely reflecting a one-time loss taken during the second quarter inconnection with the agreement to divest FMG, operating loss was $529 millionfor the 2007 nine-month period, compared to operating income of $504 millionin last year's first nine-months. Net loss was $496 million, or $-0.55 pershare, compared to net income of $506 million, or $0.54 per diluted share inlast year's first nine-months. Results included pre-tax seniority program,impairment, restructuring charges and other related closure costs of $970million ($1.03 per diluted share impact) and $67 million ($0.06 per dilutedshare impact) for the 2007 and 2006 first nine months results, respectively.

Research and development expenses increased 6.8% to $1,322 million,compared to $1,238 million in the 2006 first nine months, reflecting increasedproduct-design activity and currency impacts. Selling, general, andadministrative expenses increased 2.2% to $803 million compared to $786million in the 2006 period.

For the 2007 nine-month period, the effective average exchange rate forthe Company was approximately $1.33 to euro 1.00, compared to $1.23 to euro1.00 for the 2006 similar period.

First Nine Months 2007 Financial and Operating Data by Product Segment

    The following table provides a breakdown of revenues and operating incomeby product segment.    In Million US$ and %                          First Nine Months 2007                                                                   Operating                                                Net     % of Net    income    Segment                                   Revenues  Revenues    (loss)    ASG (Application Specific Product Groups)   $3,918     54.0%     $195    IMS (Industrial and Multisegment Sector)     2,292     31.5%      338    FMG (Flash Memories Group)                   1,006     13.9%      (77)    Others (1)(2)                                   42      0.6%     (985)    TOTAL                                       $7,258      100%    $(529)    (1) and (2) defined in earlier table.

Outlook

Mr. Bozotti stated, "Looking to the fourth quarter we see a seasonalrevenue growth pattern evolving for ST. We expect sequential sales to increasein the range between 4% and 9%. Due to currency factors and anticipatedproduct mix in the fourth quarter, we would expect that the gross margin forthe quarter will be about 36.5%, plus or minus one percentage point.

"We are completing our budgeting for 2008. Following the separation ofFMG, we are targeting to bring ST's capex to sales ratio below 10% for nextyear, further boosting our cash generation capability."

This outlook refers to the total Company, including FMG, and is based onan assumed currency exchange rate of approximately $1.41 = euro 1.00 for the2007 fourth quarter, which reflects current exchange rate levels combined withthe impact of existing hedging contracts.

    Recent Corporate Developments    -- On August 8, 2007, the Company and Nokia announced their intention to       deepen their collaboration in the licensing and supply of integrated-       circuit designs and modem technologies for 3G and its evolution. The       two companies also announced that they are negotiating a plan related       to the transfer of a part of Nokia's Integrated Circuit (IC) operations       to STMicroelectronics.    -- On August 9, 2007, the Company announced that Philippe Lambinet had       joined the company as Corporate Vice President and General Manager of       the Company's Home Entertainment and Displays (HED) Group, reporting       directly to President and CEO Carlo Bozotti.    -- With the recently received clearance from the FTC and the prior       European Commission approval, all required regulatory clearances for       Numonyx, the joint venture company that will combine key Flash memory       assets from both ST and Intel, have been received. Numonyx is on track       for a Q4 launch.    Products, Technology and Design Wins    Application-Specific Product Highlights    -- In mobile communications, ST announced the newest addition to its       Nomadik(TM) family of mobile multimedia application processors. The       STn8811 builds on the success of the STn8810 by increasing the speed of       its ARM9 core by almost 50% to deliver stunning performance for       general-purpose applications running alongside video, music and image       processing on smart mobile phones, personal media players and personal       navigation devices.    -- In connectivity, ST continued to increase its market share with the       gain of further design-ins for new phones, and strong shipments to       existing customers. ST's Bluetooth products have now been designed into       a multitude of mobile phones, of which 60 are already available in the       market; and ST's wireless LAN ICs are already in more than 15 phones       currently on the market.    -- In the communications infrastructure market, ST unveiled its new RF       synthesizer with integrated voltage-controlled oscillators and the       highest frequency coverage in the market. The STW81103 is the first       single-chip device to operate at up to 5GHz and is aimed at       applications such as wireless network infrastructures, CATV systems,       instrumentation and test equipment.    -- In digital consumer, ST announced that Korea Telecom's launch of its       new IPTV service, using high-definition (HDTV) set-top boxes (STBs), is       based on ST's STi710x family of highly integrated HDTV decoder chips.       ST also announced that it had shipped a cumulative total of more than       400 million MPEG-2 and MPEG-4 decoder chips - used worldwide in STBs,       digital television sets (DTV) and DVD players - since entering the       market with the world's first MPEG-2 System-on-Chip (SoC) decoder in       1995.    -- ST gained an important design win from a major Japanese manufacturer       for a sound processor to be used in a high-end TV for the Japanese       market. Additionally, ST started shipments of its 'Sound Terminal'       digital amplifiers with integrated sound processing and Bluetooth v1.2       connectivity capability to a major Japanese manufacturer that is       launching AD2P Bluetooth speakers in Europe and Japan. ST also gained       several other design wins for Bluetooth audio products in cradle and       home-system applications.    -- In computer peripherals, ST gained a design win from a world-leading       hard-disk drive (HDD) manufacturer for a 65nm SoC that uses ST's Read       Channel and Serial Interface (SATA) Intellectual Property (IP). The SoC       will be used in mobile and consumer HDDs, with production expected in       2009. Additionally, ST's leading-edge SPEAr(TM) (Structured Processor       Enhanced Architecture) family of customizable digital engines gained       significant design wins with three leading manufacturers of printers       and PC peripherals.    -- In automotive, ST strengthened its leadership in safety applications       with the design win for the next-generation airbag platform with a       major American company that will go into production in 2010 in vehicles       for the American, European and China markets. ST also won a design from       a major American maker for a full GDI (gasoline direct injection)       platform. In addition, ST expanded its customer base with wins from       several customers in applications, such as power-steering modules and       turbo controllers. And following ST's agreement with Mobileye, design       wins in advanced safety have also been awarded to ST by major       automotive OEMs.    -- In car radio and multimedia applications, ST gained important design       wins at major Japanese and Korean car radio makers and from Bosch       Blaupunkt for the new generation of Digital Audio Broadcasting (DAB)       and Digital Radio Mondiale (DRM) receiver platforms. ST also announced       it had shipped more than 15 million units of its TDA7540 high-       performance single-chip tuner IC used in analog AM/FM car-radio       applications. Additionally, ST launched volume production of its Teseo       GPS engine designed for use in certain Garmin Portable Navigation       Devices and handheld GPS receivers, and achieved important design-ins       for new navigation SoC devices with several customers, including major       European OEMs.    -- In car body applications, ST increased its market share with growth       coming from wide customer acceptance of ST's smart power products,       including a major design win for novel smart power actuators. ST also       achieved a design win from a world leader for a new 32-bit       microcontroller, jointly developed with Freescale, for a generic car       body platform. The Company also gained an important design in the       emerging automotive markets of India and the Middle East.    Industrial and Multi-Segment Product Highlights    -- ST introduced a new series of 8-bit Flash microcontrollers, within the       low-cost ST7Lite family, that feature up to 24 I/O (input/output)       lines, further extending the range of MCUs for cost-sensitive       applications. The ST7Lite49M is designed specifically for simpler       products such as security and lighting systems, power management, small       appliances, sensors and motor control.    -- ST announced the availability of its POS (Point of Sale) reference       design that integrates the card payment and fiscal cash register on a       single board. The all-in-one system delivers optimized performance and       significant cost benefits, coupled with superior reliability and       expandability. The solution addresses the main market requirements by       providing a machine that is equipped with a fiscal cash register, which       records all sales transactions for tax purposes.    -- A new family of secure microcontrollers based on a 0.13-micron state-       of-the-art process technology was introduced by ST, intended for       banking, loyalty card and other financial applications. This advanced       family is based on the new ST23 secure platform, which takes advantage       of the most recent improvements in security technology and offers       optimized computing power for next-generation secure applications.    -- ST announced a 1-Mbit serial EEPROM with SPI bus in the SO8N package -       the first in the market to squeeze this high EEPROM density into such a       tiny package. The M95M01 is aimed at storage of fast-changing parameter       data in digital TVs, DVD players and gaming, as well as in medical,       industrial, car infotainment and computer peripherals.    -- In MEMS, ST started mass production of its LIS302DL digital-output       three-axis accelerometer as the single source for two different       customers for mobile phone and portable multimedia player applications.       ST also extended its family of ultra-compact 'low-g' linear       accelerometers with the LIS244AL, which has an ultra-compact square       footprint and low power consumption, making the motion-sensing device       ideally suited for battery-powered portable applications.    -- In advanced analog, ST launched two families of Power-over-Ethernet       (PoE) interface controllers, which help eliminate external power       supplies to many wired LAN devices, such as VoIP phones and security       cameras. ST also announced two high-accuracy application-specific       digital chips intended for monitoring the temperature of the memory       modules used in PCs.    -- In voltage regulators and interfaces, ST gained an outstanding design       win with a new camera-flash driver IC. A key European mobile phone       maker has already qualified the product in two new platforms, which are       expected to be introduced to the market in Q2 2008. Additionally, an ST       high-speed transceiver moved into advanced qualification with a world-       leading European mobile phone manufacturer, with significant volume       production expected during 2008.    -- In the field of application-specific devices and IPAD(TM) (Integrated       Passive and Active Devices), ST gained several design-wins in mobile       phone and portable MP3 players with its family of ESD-protection       diodes, assembled in micro-QFN packages. In rectifiers, ST is now       successfully deploying worldwide its new ultra-fast diodes and Power       Schottky diodes with enhanced avalanche specifications. The Company has       achieved several key design-wins and new product introductions in       growing consumer applications, such as plasma display panels, LCD TV       power supplies and video game consoles.    -- In power conversion, ST won designs in multiple computing applications,       including a new controller for CPU power management from a leading US       server company, a family of high-voltage converters for a power-supply       design from a major Asian OEM, and a major socket for a new lighting       application from two leading manufacturers in Asia.    -- In power MOSFETs, ST achieved several important design wins, including       two in automotive with US manufacturers, and three for set-top boxes       from world leading European and US manufacturers. And in power RF, IGBT       and power bipolar products, ST gained design wins in several fields,       including lighting and home appliance applications.    Flash Memory Highlights    -- ST announced availability of the M25PX32, a 32-Mbit device that is the       first of the sector, sub-sector erase Serial Flash family to be offered       with Dual I/O. Digital flat panels and set-top-boxes are typical       applications that will benefit from this device. In addition, along       with other leading companies, ST announced it was supporting the       creation of a far-ranging industry specification for removable memory       cards and embedded memory solutions being standardized by the JEDEC       Solid State Technology Association.

All of STMicroelectronics' press releases (including all releases in Q3)are available at

Nomadik, Sound Terminal, SPEAr and IPAD are trademarks ofSTMicroelectronics. All other trademarks or registered trademarks are theproperty of their respective owners.

Some of the statements contained in this release that are not historicalfacts are statements of future expectations and other forward-lookingstatements (within the meaning of Section 27A of the Securities Act of 1933 orSection 21E of the Securities Exchange Act of 1934, each as amended) based onmanagement's current views and assumptions and involve known and unknown risksand uncertainties that could cause actual results, performance or events todiffer 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 all of which are highly variable and difficult to predict;    -- the financial impact of obsolete or excess inventories if actual demand       differs from our anticipations;    -- the impact of intellectual property claims by our competitors or other       third parties, and our ability to obtain required licenses on       reasonable terms and conditions;    -- changes in the exchange rates between the US dollar and the Euro,       compared to an assumed effective exchange rate of US $1.41 = euro 1.00       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 in an intensely competitive and cyclical       industry, where a high percentage of our costs are fixed and difficult       to reduce in the short term, including our ability to adequately       utilize and operate our manufacturing facilities at sufficient levels       to cover fixed operating costs;    -- our ability to close, as currently planned and scheduled, our agreement       with Intel and Francisco Partners concerning the creation of a new       independent Flash memory company to be named "Numonyx" if the       financial, business or other conditions to Closing as contractually       provided are not met; and the estimated loss of $857 million posted so       far, in relation to our Flash memory business, may materially change at       Closing as a result of developments in the Flash memory business;    -- our ability in an intensively competitive environment to secure       customer acceptance and to achieve our pricing expectations for high-       volume supplies of new products in whose development we have been, or       are currently, investing;    -- the attainment of anticipated benefits of research and development       alliances and cooperative activities, as well as the uncertainties       concerning the modalities, conditions and financial impact beyond 2007       of future R&D activities in Crolles2;    -- the ability of our suppliers to meet our demands for supplies and       materials and to offer competitive pricing;    -- significant differences in the gross margins we achieve compared to       expectations, based on changes in revenue levels, product mix and       pricing, capacity utilization, variations in inventory valuation,       excess or obsolete inventory, manufacturing yields, changes in unit       costs, impairments of long-lived assets (including manufacturing,       assembly/test and intangible assets), and the timing and execution of       our manufacturing investment plans and associated costs, including       start-up costs;    -- changes in the economic, social or political environment, including       military conflict and/or terrorist activities, as well as natural       events such as severe weather, health risks, epidemics or earthquakes       in the countries in which we, our key customers and our suppliers,       operate;    -- changes in our overall tax position as a result of changes in tax laws       or the outcome of tax audits, and our ability to accurately estimate       tax credits, benefits, deductions and provisions and to realize       deferred tax assets;    -- the outcome of litigation;    -- the results of actions by our competitors, including new product       offerings and our ability to react thereto.

Such forward-looking statements are subject to various risks anduncertainties, which may cause actual results and performance of our businessto differ materially and adversely from the forward-looking statements.Certain such forward-looking statements can be identified by the use offorward-looking terminology such as "believes", "may", "will", "should","would be" or "anticipates" or similar expressions or the negative thereof orother variations thereof, or by discussions of strategy, plans or intentions.Some of the risk factors we face are set forth and are discussed in moredetail in "Item 3. Key Information-Risk Factors" included in our Annual Reporton Form 20-F for the year ended December 31, 2006, as filed with the SEC onMarch 14, 2007. Should one or more of these risks or uncertaintiesmaterialize, or should underlying assumptions prove incorrect, actual resultsmay vary materially from those described in this release as anticipated,believed or expected. We do not intend, and do not assume any obligation, toupdate any information or forward-looking statements set forth in this releaseto reflect subsequent events or circumstances.

Unfavorable changes in the above or other factors listed under "RiskFactors" from time to time in our SEC filings, including our Form 20-F, couldhave a material adverse effect on our results of operations or financialcondition.

Conference Call Information

The management of STMicroelectronics will conduct a conference call onOctober 24, 2007, at 9:00 a.m. U.S. Eastern Time / 3:00 p.m. CET, to discussperformance for the third quarter of 2007.

The conference call will be available via the Internet by accessing thefollowing Web address: . Those accessing the webcastshould go to the Web site at least 15 minutes prior to the call, in order toregister, download, and install any necessary audio software. The webcast willbe available until November 2, 2007.

About STMicroelectronics

STMicroelectronics is a global leader in developing and deliveringsemiconductor solutions across the spectrum of microelectronics applications.An unrivalled combination of silicon and system expertise, manufacturingstrength, Intellectual Property (IP) portfolio and strategic partnerspositions the Company at the forefront of System-on-Chip (SoC) technology andits products play a key role in enabling today's convergence markets. TheCompany's shares are traded on the New York Stock Exchange, on Euronext Parisand on the Milan Stock Exchange. In 2006, the Company's net revenues were$9.85 billion and net earnings were $782 million. Further information on STcan be found at .

    STMicroelectronics N.V.    Consolidated Statements of Income    (in million of U.S. dollars, except per share data ($))                                                     Three Months Ended                                               (Unaudited)       (Unaudited)                                              September 29,      September 30,                                                  2007               2006    Net sales                                     2,555              2,502    Other revenues                                   10                 11      NET REVENUES                                2,565              2,513    Cost of sales                                -1,663             -1,609      GROSS PROFIT                                  902                904    Selling, general and administrative            -272               -264    Research and development                       -442               -421    Other income and expenses, net                   24                 -5    Impairment, restructuring charges     and other related closure costs                -31                -20       Total Operating Expenses                    -721               -710       OPERATING INCOME                             181                194    Interest income, net                             22                 17    Earnings (loss) on equity investments             3                 -1      INCOME BEFORE INCOME TAXES                    206                210       AND MINORITY INTERESTS    Income tax expense                              -18                 -2      INCOME BEFORE MINORITY INTERESTS              188                208    Minority interests                               -1                 -1      NET INCOME                                    187                207      EARNINGS PER SHARE (BASIC)                   0.21               0.23      EARNINGS PER SHARE (DILUTED)                 0.20               0.22      NUMBER OF WEIGHTED AVERAGE       SHARES USED IN CALCULATING       DILUTED EARNINGS PER SHARE                 945.2              957.1    STMicroelectronics N.V.    Consolidated Statements of Income    (in million of U.S. dollars, except per share data ($))                                                    Nine Months Ended                                              (Unaudited)        (Unaudited)                                              September 29,      September 30,                                                  2007               2006    Net sales                                      7,233              7,356    Other revenues                                    25                 15      NET REVENUES                                 7,258              7,371    Cost of sales                                 -4,733             -4,748      GROSS PROFIT                                 2,525              2,623    Selling, general and administrative             -803               -786    Research and development                      -1,322             -1,238    Other income and expenses, net                    20                -28    Impairment, restructuring charges     and other related closure costs                -949                -67       Total Operating Expenses                   -3,054             -2,119       OPERATING INCOME (LOSS)                      -529                504    Interest income, net                              57                 69    Earnings (loss) on equity investments             12                 -6      INCOME (LOSS) BEFORE INCOME TAXES             -460                567       AND MINORITY INTERESTS    Income tax expense                               -32                -60      INCOME (LOSS) BEFORE MINORITY INTERESTS       -492                507    Minority interests                                -4                 -1      NET INCOME (LOSS)                             -496                506      EARNINGS (LOSS) PER SHARE (BASIC)            -0.55               0.56      EARNINGS (LOSS) PER SHARE (DILUTED)          -0.55               0.54      NUMBER OF WEIGHTED AVERAGE      SHARES USED IN CALCULATING                   898.5              964.5      DILUTED EARNINGS (LOSS) PER SHARE    STMicroelectronics N.V.    CONSOLIDATED STATEMENTS OF CASH FLOWS                                            Three                                            Months                                            Ended        Nine Months Ended                                          September    September   September                                              29,          29,         30,    In million of U.S. dollars               2007         2007        2006                                          (Unaudited) (Unaudited) (Unaudited)    Cash flows from operating     activities:      Net income (loss)                       187        -496         506      Items to reconcile net income       (loss) and cash flows from       operating activities          Depreciation and amortization       309       1,079       1,337          Amortization of discount on           convertible debt                     4          13          13          Other non-cash items                 39          78          13          Minority interests                    1           4           1          Deferred income tax                  -6         -13         -40          (Earnings) loss on equity           investments                         -3         -12           6          Impairment, restructuring           charges and other related           closure costs, net of cash           payments                            20         905           2      Changes in assets and       liabilities:          Trade receivables, net              -82         -36        -163          Inventories, net                     62           9        -135          Trade payables                      -43         -45         235          Other assets and liabilities,           net                                 23         -35         157    Net cash from operating activities        511       1,451       1,932    Cash flows from investing     activities:      Payment for purchases of tangible       assets                                -228        -735      -1,147      Payment for purchases of       marketable securities, net of       proceeds from sale                      34        -608        -419      Investment in short-term deposits         0           0        -903      Proceeds from matured short-term       deposits                                 0         250         401      Restricted cash for equity       investments                              0         -32           0      Investment in intangible and       financial assets                       -28         -64         -71      Proceeds from the sale of Accent       subsidiary                               0           0           7      Capital contributions to equity       investments                              0           0        -212    Net cash used in investing     activities                              -222      -1,189      -2,344    Cash flows from financing     activities:      Proceeds from issuance of long-       term debt                               65          82       1,562      Repayment of long-term debt             -60        -112      -1,497      Decrease in short-term facilities       -40           0         -12      Capital increase                          0           2          28      Dividends paid                            0        -269        -107      Dividends paid to minority       interests                               -6          -6           0    Net cash used in financing     activities                               -41        -303         -26      Effect of changes in exchange       rates                                   28          32          50    Net cash decrease                         276          -9        -388    Cash and cash equivalents at     beginning of the period                1,374       1,659       2,027    Cash and cash equivalents at end of     the period                             1,650       1,650       1,639    STMicroelectronics N.V.    CONSOLIDATED BALANCE SHEETS    As at                            September 29,  June 30,  December 31,    In million of U.S. dollars           2007        2007        2006                                      (Unaudited) (Unaudited)  (Audited)    ASSETS    Current assets:    Cash and cash equivalents              1,650       1,374       1,659    Marketable securities                  1,389       1,406         764    Short-term deposits                        0           0         250    Trade accounts receivable, net         1,637       1,543       1,589    Inventories, net                       1,370       1,337       1,639    Deferred tax assets                      237         205         187    Assets held for sale                   1,211       1,204           0    Other receivables and assets             669         596         498    Total current assets                   8,163       7,665       6,586    Goodwill                                 230         225         223    Other intangible assets, net             165         157         211    Property, plant and equipment, net     4,904       4,843       6,426    Long-term deferred tax assets            124         134         124    Equity investments                         0           0         261    Restricted cash for equity investments   250         250         218    Other investments and other non-     current assets                          162         158         149                                           5,835       5,767       7,612    Total assets                          13,998      13,432      14,198    LIABILITIES AND SHAREHOLDERS' EQUITY    Current liabilities:    Bank overdrafts                            0          41           0    Current portion of long-term debt         74         127         136    Trade accounts payable                 1,015       1,003       1,044    Other payables and accrued     liabilities                             753         714         664    Deferred tax liabilities                  11          10           7    Accrued income tax                        72          41         112    Total current liabilities              1,925       1,936       1,963    Long-term debt                         2,099       1,992       1,994    Reserve for pension and     termination indemnities                 362         362         342    Long-term deferred tax liabilities        77          66          57    Other non-current liabilities            160         105          43                                           2,698       2,525       2,436    Total liabilities                      4,623       4,461       4,399    Commitment and contingencies    Minority interests                        51          56          52    Common stock (preferred stock:     540,000,000 shares authorized,     not issued; common stock: Euro     1.04 nominal value, 1,200,000,000     shares authorized, 910,293,420     shares issued, 899,320,243 shares     outstanding)                          1,156       1,156       1,156    Capital surplus                        2,070       2,055       2,021    Accumulated result                     5,274       5,087       6,086    Accumulated other comprehensive     income                                1,109         903         816    Treasury stock                          -285        -286        -332    Shareholders' equity                   9,324       8,915       9,747    Total liabilities and shareholders'     equity                               13,998      13,432      14,198