Tait Sorensen - STMicroelectronics NV Carlo Bozotti - STMicroelectronics NV Carlo Ferro - STMicroelectronics NV Jean-Marc Chery - STMicroelectronics NV

Gareth Jenkins - UBS Ltd. (Broker) Achal Sultania - Credit Suisse Securities (Europe) Ltd. Jérôme Ramel - Exane, Inc. Sandeep S. Deshpande - JPMorgan Cazenove Adithya Metuku - Bank of America Merril Lynch Amit B. Harchandani - Citigroup Global Markets Ltd. Andrew M. Gardiner - Barclays Capital Securities Ltd. Gianmarco Bonacina - Equita SIM SpA Günther Hollfelder - Baader Bank AG (Broker) Veysel Taze - ODDO SEYDLER BANK AG

Ladies and gentlemen, good morning. Welcome to the STMicroelectronics' First Quarter Earnings Results Conference Call and Live Webcast. I'm Maria, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. After the presentation, there will be a Q&A session. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Tait Sorensen, Group Vice President, Investor Relations. Please go ahead, sir. Tait Sorensen - STMicroelectronics NV: Thank you everyone for joining our first quarter 2016 financial results conference call. Hosting the call today is Carlo Bozotti, ST's President and Chief Executive Officer. Joining Carlo on the call today are Jean-Marc Chery, Chief Operating Officer; Carlo Ferro, Chief Financial Officer; Georges Penalver, Chief Strategy Officer. This call can be accessed live through ST's website. A replay will be available shortly after the conclusion of this call. This call will include forward-looking statements that involve risk factors that could cause ST's results to differ materially from management's expectations and plans. We encourage you to review the Safe Harbor statement contained in the press release that was issued with the results this morning, and also in ST's most recent regulatory filings for a full description of these risk factors. Also, to ensure all participants have an opportunity to ask questions during the Q&A. Please limit yourself to one question and a brief follow up. And now, I'd like to turn the call over to Carlo Bozotti, ST's President and CEO. Carlo? Carlo Bozotti - STMicroelectronics NV: Thank you, Tait, and thank you all for joining us this morning on our first quarter earnings conference call. Today's agenda includes an overview, followed by a detailed discussion of our results and total groups, and update on the market environment and our outlook for the second quarter. So let's begin. We have started the year by putting in place the key initiatives to improve our market presence and financial performance, and in turn we have delivered some initial encouraging results. First, we have started to execute on our strategic focus with people, resources and investment centered in two areas, Smart Driving enabled by digitalization and electrification of the car subsystems, and the Internet of Things which includes consumer devices as well as smart homes, city and industry applications. Second, the new go-to-market organization we put in place in January is now fully operational. Our product portfolio is well-structured into three groups to reflect our focus, and importantly to leverage the synergies and working together with the Automotive and Discrete Group, ADG, which includes all of our automotive ICs, both digital and analog and our discrete products. The Microcontrollers and Digital ICs Group, MDG, which includes our general purpose and secure microcontrollers, our EEPROM memories and all of our digital ICs outside of automotive ICs. And the Analog and MEMS Group, AMG, which includes our low-power analog ICs, smart power products for industrial and power conversion and all of our MEMS activity. Third, two major product areas accounting for about 50% of our 2015 revenues, Automotive and Microcontrollers delivered year-over-year growth. This is an important first result towards a more broad based revenue growth. As we move further in the year and based on today's visibility we expect to see a larger proportion of our businesses driving growth. Fourth, aligned with our sharpened focus is the set-top-box restructuring plan targeting $170 million in savings on an annualized basis. We expect to progressively capture the savings generating about $145 million in 2017. The remaining savings will depend on the life span and of the residual products. During the first quarter we recorded restructuring charges of $26 million related to the set-top-box plan, and we expect to be on track with our timing exiting the second quarter. Now, let's turn to the first quarter results. Q1 was aligned with our guidance. Total revenue came in at $1.613 billion, representing a sequential decrease of 3.3%. We saw better than normal seasonality, despite entering the quarter with a volatile macroeconomic scenario and mixed industry dynamics. Looking at our revenue results on a year-over-year basis, our goal to return to growth met with some promising indicators, automotive driven by our pervasiveness in all domains, and the microcontrollers driven by the STM32 family, both grew above 4%, excluding negative currency effects. Our gross margin came in at 33.4% in the first quarter, better than a mid-point of our guidance of about 33%. Unused capacity charges were still meaningful as they negatively impacted gross margin by about 60 basis points. Operating expenses were well aligned with our plans with combined R&D and SG&A of $571 million compared to $591 million in the year ago quarter. As we progress through 2016, our set-top-box restructuring plan will further reduce our cost structure. We had an operating loss of $5 million before impairment and restructuring charges. On a year-over-year basis, ADG and MDG operating results improved, while AMG registered lower profitability mainly due to lower revenues. Our free cash flow was positive at $31 million. Also in the first quarter ST's Supervisory Board proposed to resolve at ST's Annual General Meeting of shareholders to be held on May 25. The distribution of cash dividend of $0.25 per share to be distributed in quarter installment of $0.06 per share in each of the second, third and fourth quarters of 2016 and first quarter of 2017. The proposed dividend represents an attractive yield of about 4.1% on our current share price, substantially in line with the historical dividend yield for STM shares. Of course, the dividend is subject to our shareholders' approval. Now, let's go through a deeper review of our product group's performance during the first quarter starting with our Automotive and Discrete. ADG's revenues of $671 million were substantially flat on a year-over-year basis, and when excluding negative currency effects, we are up about 1%. As I mentioned earlier, Automotive grew over 4% excluding negative currency effects, partially offset by market softness in Discrete. On a sequential basis ADG's revenues increased 5.4% driven by strong demand, especially in Europe in Automotive products. This was partially offset by the performance of our Discrete products impacted by market conditions, as well as seasonality due to the Chinese New Year. ADG operating income in the quarter was $39 million, representing an operating margin of 5.7%, compared to 5.4% in the year ago quarter. ADG's strategic focus is mainly on Smart Driving, that for ST means making cars greener, safer and more connected. A part of our offering to make us greener is our power discrete products. They are increasingly important to enable the pervasion of car electrification, and they represent an important opportunity moving forward. In this area we achieved the significant design win with multiple products in a silicon carbide technology for electrical traction in fully electrified cars. Our innovative SiC MOSFETs and rectifiers provide greater power efficiency, and will significantly reduce the size of the electrification modules. In the area of Active Safety, we extended our series of design wins for Blind Spot Detection with our 24 gigahertz radar offering, being selected by a leading European car maker. Our 32-bit microcontrollers were selected by a leading European Tier 1 to drive a 77 gigahertz radar system which will be used by Japanese and European premium carmakers. Continuing with strategy, our automotive MCUs were selected by a major Japanese Tier 1 for a braking system platform to be used by a leading carmaker. Other significant design wins include a major global Tier 1 for an automotive Gateway application as well as the continued penetration of American and European markets with multiple design wins for our microcontrollers with several industry-leading customers. Moving to AMG, our Analog and MEMS Group enables a broad range of Internet of Things applications, supplying sensors, analog and power solutions for everything from wearable devices to the smartphone and factory automation. AMG is our solving (11:04) products for automotive navigation and telematics. On a year-on-year basis, AMG sales decreased 17% due to the weakness in PC peripherals and in smartphones and to the commoditization of motion MEMS. AMG revenues were substantially flat quarter-to-quarter. AMG operating margin was 0.5% in 2016 first quarter, compared to 8.4% in the year ago quarter mainly due to lower revenues. Based upon visibility with customers, we expect to see an improved second half of the year for AMG, both from a revenue perspective as well as operating income. Looking at our progress with customers, in the Consumer segment, our sensors were chosen by a number of smartphone and wearable OEMs. In smartphones, we captured the optical image stabilization, the 6-axis inertial measurement unit, and the pressure sensor socket in a flagship smartphone from a top manufacturer and we won the 6-axis motion sensor in another flagship smartphone by a top Chinese brand. In China, we also had design wins for our touchscreen controllers and AMOLED driver. We expanded our presence with top wearable OEMs around the globe, winning sockets across our product portfolio into next generation wearables. And finally, we confirmed low-power high-performance accelerometer and Bluetooth Low Energy socket in a new activity tracker for a top player. We also won several projects in Smart Home, Smart City and the Smart Industry applications. I will give three examples of key markets where we won sockets during this quarter; electricity metering, factory automation, and datacenters. In electricity metering, we won a significant first order for a next generation meter from a key European manufacturer. In factory automation, we delivered engineering samples for a new IO-Link communication transceiver device that is designed to support the transition of factories to Industry 4.0. And in datacenters we introduced a family of ICs that delivers the industry's highest power conversion efficiency for the next generations, which is a 48 Volt datacenter architecture recently presented by Google. Turning now to MDG, our Microcontrollers and Digital Group's broad portfolio of general purpose microcontrollers, Secure Microcontrollers, EEPROM memories and Digital ASICs successfully serve all application areas within the Internet of Things. MDGs first quarter net revenues totaled $532 million, slightly up from $530 million in the year ago quarter, thanks to microcontrollers which increase over 4% when excluding negative currency effects. On a sequential basis, MDG sales decreased 13.4% due to the anticipated lower demand of microcontrollers after a stronger prior quarter and due to the phase-out of certain legacy products. At the operating income level, microcontrollers deliver a strong operating margin. On the other hand, Digital posted an operating loss, primarily due to the set top box. This led to essentially breakeven operating results for MDG. Our set top box restructuring plan, together with the top-line revenue growth we are expecting in Digital ASICs will help drive financial performance improvements. In that regard, earlier, I was highlighting our success in the domain of power conversion for data centers. We also serve the cloud infrastructure with ASICs, and during the first quarter we won a Silicon Photonics socket with a networking module manufacturer for 100-gigabit per second datacenter upgrades, as well as two projects in optical access network applications. In secure microcontrollers, we ramped production of an embedded SIM for the new generation of tablets and watches being designed by leading OEMs. Moreover, our Near Field Communication controller and Secure Element have been qualified to enable secure near-field communication transactions in the ARM mbed wearable reference design. Finally, in the quarter we continue to expand our highly successful general purpose microcontroller business. In our STM32 product family, we introduced one new high-end and nine new ultra-low-power MCU product lines, along with their related comprehensive development ecosystems. Our high-end STM32F7 has been selected by an American OEM for its next generation smartwatch. And our entry level STM32F0 has been selected by a major OEM for a smart charging application. Turning now to our second quarter guidance, let me share a few key points. We have started to see signs of some improvement in the semiconductor market following the market softness that held back revenue growth from the second half of 2015. More specifically, bookings are improving across our three regions; EMEA, Americas, and Asia-Pacific. This improvement was most visible in Automotive and Industrial. So we enter the second quarter with a higher level of optimism on the semiconductor market environment than we did three months ago. Based upon our current visibility, this translates into a sequential revenue growth guidance of about 5.5% plus or minus 3.5%, so somewhat better than normal seasonality. Product lines, excluding set top box are contributing – all product lines excluding set top box are contributing to this sequential growth. In terms of gross margin, we are targeting about 24% plus or minus 2 percentage points, reflecting unused charging – charges negatively impacted gross margin by about 60 basis points. Similar to the first quarter, we expect that in the second quarter the Automotive and Microcontroller businesses will continue to deliver year-over-year revenue growth. In Q2 we also expect year-over-year improvement in our Imaging business. Based upon our current visibility, we expect the year-over-year recovery of our Discrete and AMG to start later in the year, enabling them to grow their second half of 2016 revenues versus the second half of 2015. My colleagues and I would now be happy to take your questions. Thank you.

We will now begin the question-and-answer session. Our first question comes from Gareth Jenkins from UBS. Please go ahead, sir. Gareth Jenkins - UBS Ltd. (Broker): Yeah, thanks for taking my question. Just a quick question on margins if I can. I wonder whether you could talk us through what the MDG margins would be excluding set top boxes, and so what run rate we should expect for that business going forwards. And then more widely, just from your margin guidance, I think you are forecasting 60 basis points of underutilization again going forwards, but your bookings seem strong and you're talking about recovery. So just wonder how you can – whether you can help us square that one away for the fourth quarter. Thank you. Carlo Ferro - STMicroelectronics NV: Good morning, everyone. Carlo Ferro speaking. Gareth, I guess I take the first part of your question on the MDG margin. Again, the margin is very similar to the one that we have already experienced in the course of year 2015. The microcontrollers and the memory part of this new group is margin well in the teens and this quarter on the Digital part of the business we've experiences significant losses, not so much mitigated in respect to the prior quarter. And of course these will be cured and fixed towards the year with execution of our set top box restructuring plan. Carlo Bozotti - STMicroelectronics NV: Yeah, as far as unloading charges are concern, of course, it will depend greatly on the evolution of the business and the volume strength. Today what we see is a degree of unloading charges hitting the quarters during the course of this year and then a significant improvement starting from beginning of next year. Gareth Jenkins - UBS Ltd. (Broker): Great. Thank you. Carlo Bozotti - STMicroelectronics NV: Thank you, Gareth. Next question, please.

Next question is from Achal Sultania, Credit Suisse. Please go ahead. Achal Sultania - Credit Suisse Securities (Europe) Ltd.: Yeah, hi. Thanks for taking my question. So first to Carlo maybe on the restructuring plan, if I remember correctly I think you were targeting about $100 million of savings in year one. Can you just talk about, like are we on track to hit that level and how much should we expect in H1 versus H2? And second one, more longer term about this – the Nano R&D grant that you are receiving currently, I think it's about $125 million per year. I think this contract – this agreement expires end of 2017. So how should we think about the continuation of that contract into 2018, because that's a substantial contribution to your EBIT margins currently? Thank you. Carlo Bozotti - STMicroelectronics NV: Okay. Maybe I take the first part of the question and then certainly Jean-Marc can comment on the Nano2017 grant. Indeed, to the part, the few data points we have shared with you, introducing the plan at the end of January, the total plan target savings at completion of our $170 million, we said that were expecting a level of completion. So a run rate of savings at the end of this year in the range of $100 million, 60% of the total plan. Another important chunk in 2017 – exiting 2017, and we have a run rate of savings in the range of $145 million and then the rest detail to follow the lifespan of the legacy product to be maintained. All of these, the plan has been launch, start. All of these reference are well confirm and we are on track in these respect. When looking at the short term execution – and to address your question also on the quarterly impact in the course of 2016, the impact in Q1 has been so far quite soft, reason also being due to the fact that after the announcement of the plan, as usual we had to discuss and the review some of the future of each of the programs being part of this family with customers with lot of attentions to customers. And in this respect we've spent a few times before starting. The good is that now this process is totally completed and we exactly know where and from which program and when to pull out resources. So in this respect, you may anticipate an impact in the next quarter to progressively come. How the – quantifying about $8 million to $10 million the further cost benefit from Q1 into the second quarter and in a range of $20 million the cost benefit from Q1 into the fourth quarter of 2016. Jean-Marc? Jean-Marc Chery - STMicroelectronics NV: So, Jean-Marc. So about Nano2017, first I would like to highlight one point that the grants we report are not only Nano2017. There is many other programs and especially from Europe which let's say (25:01) to our R&D, okay, some incentive on the other type of grants. So this is a point number one. Then the point number two about the future of Nano2017. So I would like to simply say that we have not yet opened some discussion, so I cannot comment about the future. What I would like to say that in term of timing, there is nothing special. If I remember when NANO 2008, NANO 2012, Nano2017, we are absolutely not late about any possible discussion. So for the time being, okay, as a takeaway, first, grants are not only Nano2017. Then, second, we have not yet started discussion. And third, okay, we are not late according what we are facing at this time. (25:54) Achal Sultania - Credit Suisse Securities (Europe) Ltd.: That's clear. Thanks a lot. Jean-Marc Chery - STMicroelectronics NV: Thank you. Carlo Bozotti - STMicroelectronics NV: Thank you, Achal. Next question.

Next question is from Jérôme Ramel, Exane BNP Paribas. Please go ahead. Jérôme Ramel - Exane, Inc.: Yeah, good morning. I have one question concerning the top-line guidance for Q2. Could you give us a little bit more color in term of end market, where – which market you see outperforming or underperforming versus your average revenues growth you see in Q2. And I have a follow-up concerning the OpEx. How should we model the OpEx in Q2? Thank you. Carlo Bozotti - STMicroelectronics NV: Yes, so I take the first part of the question and Carlo Ferro will take question on the OpEx. Well, certainly, the markets where we see stronger traction today are Automotive, Industrial. And in general, we see a good trend of our point of sales with our distributors I would say in all the regions in the world. The areas where we see, let's say more weaknesses is certainly the PC industry. You know, we do not have many products for the PC motherboard, but we have certainly an important business in the area of PC peripherals. So – and this – and power supply; PC peripherals, hard disk drives, power supply etcetera. So this is the part that is more under pressure. And another one of course is the one of wireless. Naturally, market here is important, but also our presence in terms of new products in new flagship models makes – or can make a difference. So overall, I would say Automotive, Industrial, and the general distribution market pretty strong. And today, weaker PC, PC peripherals and smartphone industry. Carlo Ferro - STMicroelectronics NV: The second part of your question, Jérôme, is on the operating expenses for the second quarter. I said earlier that the set top box restructuring is anticipated to progress with further savings in the range of $8 million to $10 million. Then all the rest altogether, I could expect that to substantially wash. We have, assuming exchange rate stay at the current level in the range of $1.13, the currency net of hedging will play negatively. We have a bit of positive effect from the calendar. We have other cost control initiative that are a factor to positively contribute. So overall, I would expect all the – the rest to me wash and in the quarter we can take advantage of the $8 million to $10 million further savings from the restructuring plan. Jérôme Ramel - Exane, Inc.: Thank you very much. Tait Sorensen - STMicroelectronics NV: Thank you, Jérôme. Next question please.

The next question comes from Sandeep Deshpande, JPMorgan. Please go ahead. Sandeep S. Deshpande - JPMorgan Cazenove: Yeah, hi. A couple of small questions. When we look at the new break-up of the business units that you have disclosed, I mean none of them are at the 10% margin level. You did explain to an earlier question on the MDG that the underlying microcontroller business is at double-digit margins. How are you planning to take these different business units towards a double-digit – overall the company needs to be at around 10% margin. How do these different business units grow towards that 10% margin? And secondly, Carlo Ferro, why haven't you reported those discontinued items within the Digital business as discontinued items under IFRS? Thank you. Carlo Bozotti - STMicroelectronics NV: Well, to respond to the first one, I think certainly manufacturing is going to play an important role because the manufacturing performance, also the strong reduction of the bookings in the third quarter of last year did negatively contribute to the progress of the gross margin. And particularly Q4 was difficult from the point of view of manufacturing, and not only in terms of unloading charges but also in terms of the overall manufacturing efficiency. And certainly, this has impacted the two Analog and Discrete units significantly. The second element, of course, is growth. I mean, we have been hit particularly in the area of the mass market in Asia with a strong correction and I believe that now we are encouraged by the trend of the bookings. Also, on families like Discrete and other kind of standard products, so this will certainly contribute to our top-line evolution on these lines. But as I said before, only the second part of this year, we see AMG and the Discrete families to grow year-over-year – to be back on growth year-over-year. So this is the contribution of these two major elements for these families. Carlo Ferro - STMicroelectronics NV: Second part of your question, Sandeep, is on the segment reporting and I have to admit that the segment reporting has been always one of the most complex and arguable gap when falling into implementing the reporting under US GAAP. Again, to have a very clear and undisputable approach, also in agreement with our auditor, our segment reporting exactly follows the organization of the company. Again, the overall operating income of the company is the sum of the operating income of three product groups, where regional managers help Carlo to deliver result and the division Imaging and the result of Manufacturing where Jean-Marc helps the company and drive the company to deliver result. So we told that again, the most appropriate and the respectful of the accounting guidance segment reporting is the one based upon the three product groups and Imaging and manufacturing in the Other Product group – Other Segment report. Sandeep S. Deshpande - JPMorgan Cazenove: Just to follow-up, Carlo Bozotti. I mean, with regard to the margins in the different divisions which in the first half of last year were also for instance in Automotive and Discrete below 10% for instance, are you saying that your fab, even taking into account that in the latter half of the year they were under-loading charges, that the fab is not being fully filled and which is what is impacting the overall operating margin because other companies don't seem to report these sort of operating margins in a business where you should – you have market leadership and you should be seeing 10% margins as such really? Carlo Bozotti - STMicroelectronics NV: Yeah. I think we need to make a difference between Automotive and Discrete. In the case of Automotive, certainly we believe we are at the level we should be. For Discrete, this is not the case and is certainly a matter of top-line evolution. We had an important deterioration in the second half of last year. In terms of booking, it's reflected particularly in Q4 and in Q1 in an important deterioration of the top-line. But also, the manufacturing facilities were impacted. Is not only a matter of unloading charges; is also a matter of overall manufacturing efficiency. And we had a hit in this respect during the course of Q4 and this has materially impacted the performance in the first quarter this year of the gross margin. Sandeep S. Deshpande - JPMorgan Cazenove: Thank you. Carlo Bozotti - STMicroelectronics NV: Thank you, Sandeep. Next question, please.

Next question comes from Adithya Metuku, Bank of America Merrill Lynch. Please go ahead. Adithya Metuku - Bank of America Merril Lynch: Yeah, good morning, guys. I had a quick follow-up. Can you comment a bit on – can you comment a bit on the FX sensitivity, given the DPG restructuring? So how do you see – if you could comment on the gross profit line and also on the EBIT line, that would be really useful post the restructuring. And... Carlo Bozotti - STMicroelectronics NV: Adi, did you say the FX, the currency, or...? Adithya Metuku - Bank of America Merril Lynch: Yes, FX. So you used to give the sensitivities before – until Q3 last year, and then you stopped providing that. So given the DPG restructuring, I just want to understand how the FX composition of OpEx has changed? And going forward, how should we think about the impact of FX on gross margins and operating margins? Carlo Ferro - STMicroelectronics NV: Okay. I think the question, at the end the FX exposure or the euro exposure is not changing on the set top box restructuring dramatically. You have a look at prior quarter when we introduced the plan at the breakdown of restructuring between Europe and non-European countries and you noted that at the end it fairly reflects the cost structure of the average company. So once the plan will be completed, the euro-dollar exposure will not – on the total overall, will not change. Equally, if I look at the cost of goods sold at the end, the mix of sourcing for the set-top box, we have already discussed in other context is also including a very significant sourcing from foundry which is dollar-denominated, is including some sourcing from European fab which is euro-denominated. So overall at the end, there is no change in the overall exposure. Then going back to the currency effect, is obvious that moving from first quarter at an effective rate of $1.10 to a second quarter at an effective rate at $1.13, $1.12, $1 – in the range of $1.12, we have a slight negative impact affecting both the cost of goods sold and as said earlier, the expenses. Adithya Metuku - Bank of America Merril Lynch: Would it be fair to assume that it's roughly still $8 million for every 1% change in the euro-dollar rate on the operating profit side? Carlo Ferro - STMicroelectronics NV: Yeah, as a rule of thumb, remains the same in our – yes. Adithya Metuku - Bank of America Merril Lynch: Okay. Thank you. Carlo Ferro - STMicroelectronics NV: You are welcome. Carlo Bozotti - STMicroelectronics NV: Thank you, Adi. Next question please.

Next question comes from Amit Harchandani, Citigroup. Please go ahead. Carlo Bozotti - STMicroelectronics NV: Amit, are you there?

Mr. Harchandani? Amit B. Harchandani - Citigroup Global Markets Ltd.: Hello, can you hear me now? Carlo Bozotti - STMicroelectronics NV: Yes. Amit B. Harchandani - Citigroup Global Markets Ltd.: Hey, good morning. Thanks for taking my question. Just maybe firstly quickly if you could just remind us of what your CapEx plan is for the full year and whether that has changed depending on how you are seeing demand shaping up? And I have a quick follow-up. Thank you. Carlo Bozotti - STMicroelectronics NV: The CapEx plan is the same, is $600 million. This is what we had already announced late last year. No, we do not have any changes at this moment. Amit B. Harchandani - Citigroup Global Markets Ltd.: Great. And secondly, in terms of – as an unrelated follow-up, you obviously had some challenges on the Analog and the MEMS side. You are talking of the business returning to growth in the second half of the year, a much more positive growth. Would you remind us of your traction outside? I mean what's – what are the key product families or areas within Analog and MEMS that you are thinking of that would drive this growth? Is it going to be market share gains, design wins? And more broadly, could you also comment on your market share dynamics across the other segments of the Group? Thank you. Carlo Bozotti - STMicroelectronics NV: Yeah. Well, I think we can go through I think the major, let's say, weaknesses that we have seen are, as I said before, in the area of (39:15) and the – in the area of computer peripheral products for us. If we look at the evolution of the business, I believe that we will not see any significant changes in the personal computer and computer peripheral market. So, there will be a level of stability. And as I said, we are running below what was the business of last year. On the other hand, we expect a significant improvement and recovery in the area of smartphones. And this is more driven by new product contribution. If we look at the distribution market, during the course of Q4 and Q1, before last year, Q1 this year, there was an important correction in terms of inventory in the distribution. And this is being completed, and the trend of the point-of-sales is encouraging across the board in all regions, and this will be also an element of, let's say, positive growth evolution moving from the first half of this year to the second half of this year. If we move to other lines, I would say, that on Discrete it's very similar comment. We have important new discrete programs, let's say, on new flagship smartphone model. This is certainly will give a boost to our sales in Discrete. And then we believe that with the trends of the bookings and the good evolution of the point-of-sales, there will be also in the mass market and in distribution growth moving on in the years. I am talking about these families because these are the families that have been mostly impacted by either market situations like the one in the PC and PC peripheral business for us, and by the correction of the overall semiconductor market that started in Q3 last year. Tait Sorensen - STMicroelectronics NV: Thank you, Amit. We'll move to the next question, please.

Next question is from Andrew Gardiner, Barclays. Please go ahead. Andrew M. Gardiner - Barclays Capital Securities Ltd.: Good morning, gentlemen. Thanks for taking the question. I had two sort of building on the last one really. First on the Analog and MEMS side, I can understand what you are saying in terms of anticipating an improvement in the back half of the year given some other product cycles particularly on the smartphone side. But Carlo you also referenced in your statement the commoditization of motion MEMS. This is something that I think we've been monitoring for the last couple of quarters, it's clearly still there. How does that change your medium to longer term view of profitability of this group? Is there more to be done in terms of some of your new products within MEMS that cannot set it, or is it going to be a structurally more competitive market? And then secondly, just on your comments on point-of-sale and distribution being a bit more positive. Do you get the sense that your customers are willing to hold a bit more inventory, or is it purely just sell-through the entire channel is better? Thanks very much. Carlo Bozotti - STMicroelectronics NV: Yeah. Well, maybe before I get to your question one more comment on – we're already moving from Q1 to Q2 with the exception of the set-top-box. All product lines will contribute to the drop. This includes our AMG products. So already moving from the second quarter, we will see growth across the board in terms of products, I was more referring to a year-over-year growth in the second part of this year. Now, if we go to the question specifically, and specifically on the MEMS, certainly we are and we need to accelerate in all kind of MEMS applications, both sensors and micro-actuators that are not specific products for the smartphone. We need the volume of the smartphone sockets, the smartphone products, and we need more value from all other applications, particularly in the area of industrial, particularly in the area of very important of course automotive, but also new interesting projects and products in the area of MEMS microcontrollers. So in a synthesis, we need to accelerate in terms of diversification both for the markets but also for the product themselves. On the other hand we still need the volume on sensor MEMS to drive the overall operation at a higher level of financial performance. Andrew M. Gardiner - Barclays Capital Securities Ltd.: Okay. And just if I can quickly follow up on that, the competition in these other areas outside of smartphones, do you see that changing at the moment, or it's still a slightly more benign vertical in which to operate? Carlo Bozotti - STMicroelectronics NV: No, the competition, I would say, if you refer to competition in MEMS, for instance, in the automotive industry is – there are no substantial changes. It is same few suppliers that are operating in this area. We do not see any real changes in this domain. And I would of course not comment on certain projects that we have on micro actuators because these are more specific to certain important customers. Andrew M. Gardiner - Barclays Capital Securities Ltd.: The second question. Carlo Bozotti - STMicroelectronics NV: Second question was? Sorry. Andrew M. Gardiner - Barclays Capital Securities Ltd.: On POS, whether driven by end demand or inventory in the channel. Carlo Bozotti - STMicroelectronics NV: No, the POS is, what we see is of course driven by end demand. I think the pressure on inventory is there, and I believe will remain there. What is crucial and important for us is of course the evolution of the point of sales. And I think, overall the track record is not bad at all. Already in Q4 we had some good performance in the point of sales, and this is continuing. And now also what we see of course is the trend of bookings, starting from the loss of the Q3 of last year – now, I'm talking not about the POS but our own bookings – starting from the loss of the Q3 of last year, we have seen progressive improvement in bookings moving from Q3 to Q4, and then from Q4 to Q1, and then from Q1 to Q2. So there is the POS that is moving in the right direction, but also a continuous progressive recovery in the bookings trends. Andrew M. Gardiner - Barclays Capital Securities Ltd.: Thanks very much, guys. Carlo Bozotti - STMicroelectronics NV: Thank you. Tait Sorensen - STMicroelectronics NV: Thank you, Andrew. Next question please?

The next question is from Gianmarco Bonacina, Equita. Please go ahead, sir. Gianmarco Bonacina - Equita SIM SpA: Yes, good morning. Just a couple of quick ones. The first if you can, just to confirm the impact in the P&L from the saving from the set-top-box because you mentioned $10 million in the second quarter, and if I understood correctly $20 million in Q3, Q4 that makes about $50 million, while before you were speaking about a run rate of $100 million, so just to clarify on that. The other question is about the level of inventory which was going up in Q1 by 4%, while sales were dropping. Can you give us some indication on why was that, and also for the second quarter if you expect the inventory level to normalize a bit? Thank you. Carlo Bozotti - STMicroelectronics NV: Okay. Maybe I take both of the questions. Thank you for the first one, it asks to clarify the $10 million to Q2 and the $20 million to Q4 as mentioned are additional in respect to the savings already achieved in the first quarter, which I said is not so important but was already over $4 million. That's why $4 million plus $20 million plus some decimal times four is a run rate of about $100 million, and this hopefully squares the number. Then on inventory, at the end as I believe we said since the beginning of fiscal we have in front of us a pass and a plan of growing revenues quarter-after-quarter, and in order to optimize the utilization of the capacity we have and we are preparing in manufacturing the sales for the second quarter and the next quarter. So in this respect we do anticipate that inventory turns will progressively improve quarter-after-quarter. Gianmarco Bonacina - Equita SIM SpA: Thank you. Tait Sorensen - STMicroelectronics NV: Thank you, Gianmarco. Next question, please?

Next question is from Günther Hollfelder, Baader Bank. Please go ahead. Günther Hollfelder - Baader Bank AG (Broker): Many thanks. First question is on imaging systems, so what sort of sales level do you expect for imaging systems in 2016, and what sort of related loss this year for this business? Carlo Bozotti - STMicroelectronics NV: Well, I take this. I think we expect, first of all, the sequential improvement in the top line on our business, on imaging. And also an year-over-year improvement broad comparing Q2 2016 to Q2 2015, as I said before. And moving on during the course of 2016, we see additional opportunity for both sequential and year-over-year growth. As far as profitability performance, we do not provide the performance, we do not provide the quantification at the division level, but we see some good opportunities, and we see the evolution of this business also in terms of financial performance with a degree of optimism. Günther Hollfelder - Baader Bank AG (Broker): And do you expect to breakeven here during 2016, or that's more in 2017? Carlo Bozotti - STMicroelectronics NV: I just said that we do not provide... Günther Hollfelder - Baader Bank AG (Broker): Okay. Carlo Bozotti - STMicroelectronics NV: ...the P&L at the level because this is really product divisions not even a product group. But certainly (51:49) sequentially there will be also in Q2 this year over Q2 last year some growth. We expect that we have the opportunities to grow also in Q3 and in Q4 both sequentially and year-over-year, and that we see with optimism the evolution of the financial performance of the product division. Günther Hollfelder - Baader Bank AG (Broker): Okay. Second question, I saw that you had a nice design win here for transistors, in SiC transistors. So I was just wondering on what level did you receive this design win. Is it a module maker, or is it a Tier 1, or is it directly one at an OEM? How is the business model looking here? Carlo Bozotti - STMicroelectronics NV: I'm sorry, but this I can, really cannot comment. Günther Hollfelder - Baader Bank AG (Broker): Okay. And then in terms of timing, when do you expect sales from these silicon carbide MOSFETs with this project? Carlo Bozotti - STMicroelectronics NV: No comment. Tait Sorensen - STMicroelectronics NV: Good try, Günther. Günther Hollfelder - Baader Bank AG (Broker): Okay. Nevertheless, great assignment. Thanks. Tait Sorensen - STMicroelectronics NV: Thank you. Thank you, Günther. Next question, please?

Next question is from Veysel Taze from ODDO SEYDLER. Please go ahead. Veysel Taze - ODDO SEYDLER BANK AG: Yeah, hi, good morning, Veysel Taze from ODDO. Question regarding your microcontroller business. Can you comment a little bit on the microcontroller in the Automotive, how to design wins look like? And second part would be to the microcontroller non-auto, the Microcontroller division, what is your exposure to China, particularly in secure MCUs, because we got from one of your peers quite big microcontroller revenues for Q1. Carlo Bozotti - STMicroelectronics NV: Yeah, well, I think the evolution of designing effort that we have in the microcontrollers for automotive is positive, but still it's an important investment that we are doing in the automotive part of AMG (54:18). I think we are focusing on 32-bit of course microcontrollers for automotive. The design awards are continuing. Now, we have exceeded the $3 billion of cumulative design awards on this business. And as I was mentioning before, more and more are coming. But the other business on the 16-bit is going away, the 32-bit is growing a lot, and still I think this is tremendous opportunity for the company, but this today is still an investment. And we are, in general, very satisfied about the evolution of the digital part of the business in the automobile, in terms of new design wins in terms of the technology evolution. Our presence in all the automotive microcontrollers for IoT applications in the car, but also our presence in advanced safety systems with more complex ASIC products. If I now look at the 32-bit for general purpose application, here I think the pervasion is very global. I think we have, I believe we have good, sometimes great position in the three regions. And as I said before, our focus is to expand the product portfolio with more solutions at the power but also at higher performance. We have also decided to redeploy part of the set top box resources into this family, targeting more integration, integration between radio frequency solutions and microcontrollers, so more peripherals, and as I said, more low power and also targeting higher performance application. So it's a big effort. I believe we are prevailing everywhere. We are strong in the three regions, and the ecosystem, the STM32 ecosystem is certainly becoming a point of reference for thousand and thousand of customers in the electronic world. Veysel Taze - ODDO SEYDLER BANK AG: And on the secure M2 exposure for China, what is your exposure there? Carlo Bozotti - STMicroelectronics NV: Yeah, I mean, we are very strong in China. We are very strong in general purpose microcontrollers, while our presence in China is certainly more limited in the secure microcontrollers. Veysel Taze - ODDO SEYDLER BANK AG: And then a final question if I may. There was recently a Bloomberg report regarding the contract of the CEO, if – I think your contract is expiring somewhere in May, and there were rumors, STM a new CEO. Any comments there or did I miss here something? Carlo Bozotti - STMicroelectronics NV: No, certainly, I will not comment on this. We are very focused of course on the operation. We have a lot to do. I think we have the good opportunity to come back to growth now. So our purpose of course is just performance of the company, and expanding our presence with more and more customers in the world. Veysel Taze - ODDO SEYDLER BANK AG: Great. Thanks a lot. Carlo Bozotti - STMicroelectronics NV: Thank you. Tait Sorensen - STMicroelectronics NV: Thank you, Veysel.

Tait Sorensen - STMicroelectronics NV: So I think we don't have any more questions. At this point, I'd like to remind everybody that we will have our Capital Markets Day in New York on May 19, which is a Thursday. If you need additional information on that, please contact anybody in the Investor Relations office, and we'll look forward to seeing you in New York on May 19. Thank you very much. Carlo Bozotti - STMicroelectronics NV: Thank you all. Bye-bye.

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