<?xml version="1.0" encoding="us-ascii"?><InstanceReport xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xmlns:xsd="http://www.w3.org/2001/XMLSchema"><Version>2.2.0.25</Version><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios><ReportLongName>0402 - Disclosure - Accounting Policies (Policies)</ReportLongName><DisplayLabelColumn>true</DisplayLabelColumn><ShowElementNames>false</ShowElementNames><RoundingOption /><HasEmbeddedReports>false</HasEmbeddedReports><Columns><Column><Id>1</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelColumn>false</LabelColumn><CurrencyCode>USD</CurrencyCode><FootnoteIndexer /><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios><MCU><KeyName>1/1/2010 - 12/31/2010
USD ($)

USD ($) / shares

</KeyName><CurrencySymbol>$</CurrencySymbol><contextRef><ContextID>Jan-01-2010_Dec-31-2010</ContextID><EntitySchema>http://www.sec.gov/CIK</EntitySchema><EntityValue>0000932787</EntityValue><PeriodDisplayName /><PeriodType>duration</PeriodType><PeriodStartDate>2010-01-01T00:00:00</PeriodStartDate><PeriodEndDate>2010-12-31T00:00:00</PeriodEndDate><Segments /><Scenarios /></contextRef><UPS><UnitProperty><UnitID>USD</UnitID><UnitType>Standard</UnitType><StandardMeasure><MeasureSchema>http://www.xbrl.org/2003/iso4217</MeasureSchema><MeasureValue>USD</MeasureValue><MeasureNamespace>iso4217</MeasureNamespace></StandardMeasure><Scale>0</Scale></UnitProperty><UnitProperty><UnitID>USDEPS</UnitID><UnitType>Divide</UnitType><NumeratorMeasure><MeasureSchema>http://www.xbrl.org/2003/iso4217</MeasureSchema><MeasureValue>USD</MeasureValue><MeasureNamespace>iso4217</MeasureNamespace></NumeratorMeasure><DenominatorMeasure><MeasureSchema>http://www.xbrl.org/2003/instance</MeasureSchema><MeasureValue>shares</MeasureValue><MeasureNamespace>xbrli</MeasureNamespace></DenominatorMeasure><Scale>0</Scale></UnitProperty><UnitProperty><UnitID>Pure</UnitID><UnitType>Standard</UnitType><StandardMeasure><MeasureSchema>http://www.xbrl.org/2003/instance</MeasureSchema><MeasureValue>pure</MeasureValue><MeasureNamespace>xbrli</MeasureNamespace></StandardMeasure><Scale>0</Scale></UnitProperty><UnitProperty><UnitID>Shares</UnitID><UnitType>Standard</UnitType><StandardMeasure><MeasureSchema>http://www.xbrl.org/2003/instance</MeasureSchema><MeasureValue>shares</MeasureValue><MeasureNamespace>xbrli</MeasureNamespace></StandardMeasure><Scale>0</Scale></UnitProperty></UPS><CurrencyCode>USD</CurrencyCode><OriginalCurrencyCode>USD</OriginalCurrencyCode></MCU><CurrencySymbol>$</CurrencySymbol><Labels><Label Id="1" Label="12 Months Ended" /><Label Id="2" Label="Dec. 31, 2010" /></Labels></Column></Columns><Rows><Row><Id>2</Id><IsAbstractGroupTitle>true</IsAbstractGroupTitle><Level>0</Level><ElementName>us-gaap_GeneralPoliciesAbstract</ElementName><ElementPrefix>us-gaap</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>No definition available.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole /><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText /><NonNumericTextHeader /><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>xbrli:stringItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>No definition available.</ElementDefenition><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Accounting Policies [Abstract]</Label></Row><Row><Id>3</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>us-gaap_ConsolidationPolicyTextBlock</ElementName><ElementPrefix>us-gaap</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>No definition available.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table1 - us-gaap:ConsolidationPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.1&amp;#160;&amp;#8212;
    Principles of consolidation&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The consolidated financial statements of the Company have been
    prepared in conformity with U.S.&amp;#160;GAAP. The Company&amp;#8217;s
    consolidated financial statements include the assets,
    liabilities, results of operations and cash flows of its
    majority-owned subsidiaries. Subsidiaries are fully consolidated
    from the date on which control is transferred to the Company.
    They are de-consolidated from the date that control ceases.
    Intercompany balances and transactions have been eliminated in
    consolidation. In compliance with U.S.&amp;#160;GAAP guidance, the
    Company assesses for consolidation any entity identified as a
    Variable Interest Entity (&amp;#8220;VIE&amp;#8221;) and consolidates any
    VIEs, for which the Company is determined to be the primary
    beneficiary, as described in Note&amp;#160;2.10.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    When the Company owns some, but not all, of the voting stock of
    a consolidated entity, the shares held by third parties
    represent a noncontrolling interest. The consolidated financial
    statements are prepared based on the total amount of assets and
    liabilities and income and expenses of the consolidated
    subsidiaries. However, the portion of these items that does not
    belong to the Company is reported on the line
    &amp;#8220;Noncontrolling interest&amp;#8221; in the consolidated
    financial statements.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Describes an entity's accounting policy regarding (1) the principles it follows in consolidating or combining the separate financial statements, including the principles followed in determining the inclusion or exclusion of subsidiaries or other entities in the consolidated or combined financial statements and (2) its treatment of interests (for example common stock, a partnership interest or other means of exerting influence) in other entities, for example consolidation or use of the equity or cost methods of accounting. An entity also may describe its accounting treatment for intercompany accounts and transactions, noncontrolling interest, and the income statement treatment in consolidation for issuances of stock by a subsidiary.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name FASB Interpretation (FIN)
 -Number 46R
 -Paragraph 4
 -Subparagraph c

Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher SEC
 -Name Regulation S-X (SX)
 -Number 210
 -Section 02
 -Paragraph k
 -Article 1

Reference 3: http://www.xbrl.org/2003/role/presentationRef
 -Publisher AICPA
 -Name Accounting Principles Board Opinion (APB)
 -Number 18
 -Paragraph 5, 6, 16-19

Reference 4: http://www.xbrl.org/2003/role/presentationRef
 -Publisher SEC
 -Name Regulation S-X (SX)
 -Number 210
 -Section 02, 03
 -Article 3A

Reference 5: http://www.xbrl.org/2003/role/presentationRef
 -Publisher AICPA
 -Name Accounting Research Bulletin (ARB)
 -Number 51
 -Paragraph 2-6

Reference 6: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 140
 -Paragraph 46

Reference 7: http://www.xbrl.org/2003/role/presentationRef
 -Publisher AICPA
 -Name Accounting Principles Board Opinion (APB)
 -Number 18
 -Paragraph 20
 -Subparagraph a(2)

Reference 8: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name FASB Interpretation (FIN)
 -Number 46R
 -Paragraph 4
 -Subparagraph d

Reference 9: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Emerging Issues Task Force (EITF)
 -Number 97-2

Reference 10: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Emerging Issues Task Force (EITF)
 -Number 96-16

Reference 11: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name FASB Interpretation (FIN)
 -Number 46R
 -Paragraph 14, 15

</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Principles of consolidation</Label></Row><Row><Id>4</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>stm_UseOfEstimatesPolicyTextBlock</ElementName><ElementPrefix>stm</ElementPrefix><IsBaseElement>false</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>Use of estimates Policy Text Block.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table2 - stm:UseOfEstimatesPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.2&amp;#160;&amp;#8212;
    Use of estimates&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The preparation of financial statements in accordance with
    U.S.&amp;#160;GAAP requires management to make estimates and
    assumptions. The primary areas that require significant
    estimates and judgments by management include, but are not
    limited to:
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;table width="100%" border="0" cellpadding="0" cellspacing="0" style="text-align: left"&gt;
    &lt;tr&gt;
    &lt;td width="4%"&gt;&lt;/td&gt;
    &lt;td width="2%"&gt;&lt;/td&gt;
    &lt;td width="94%"&gt;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;    &amp;#8226;&amp;#160;
    &lt;/td&gt;
    &lt;td align="left"&gt;
    sales returns and allowances,
    &lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr style="line-height: 6pt; font-size: 1pt"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;    &amp;#8226;&amp;#160;
    &lt;/td&gt;
    &lt;td align="left"&gt;
    determination of the best estimate of selling price for
    deliverables in multiple element sale arrangements,
    &lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr style="line-height: 6pt; font-size: 1pt"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;    &amp;#8226;&amp;#160;
    &lt;/td&gt;
    &lt;td align="left"&gt;
    inventory reserves and normal manufacturing capacity thresholds
    to determine costs capitalized in inventory,
    &lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr style="line-height: 6pt; font-size: 1pt"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;    &amp;#8226;&amp;#160;
    &lt;/td&gt;
    &lt;td align="left"&gt;
    provisions for litigation and claims,
    &lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr style="line-height: 6pt; font-size: 1pt"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;    &amp;#8226;&amp;#160;
    &lt;/td&gt;
    &lt;td align="left"&gt;
    valuation at fair value of acquired assets including
    intangibles, goodwill, investments and tangible assets, and
    assumed liabilities in a business combination, as well as the
    impairment of their related carrying values,
    &lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr style="line-height: 6pt; font-size: 1pt"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;    &amp;#8226;&amp;#160;
    &lt;/td&gt;
    &lt;td align="left"&gt;
    assessment, in each reporting period, of events, which could
    trigger interim impairment testing,
    &lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr style="line-height: 6pt; font-size: 1pt"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;    &amp;#8226;&amp;#160;
    &lt;/td&gt;
    &lt;td align="left"&gt;
    estimated value of the consideration to be received and used as
    fair value for asset groups classified as assets to be disposed
    of by sale and the assessment of probability of realizing the
    sale,
    &lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr style="line-height: 6pt; font-size: 1pt"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;    &amp;#8226;&amp;#160;
    &lt;/td&gt;
    &lt;td align="left"&gt;
    measurement of the fair value of debt and equity securities, for
    which no observable market price is obtainable,
    &lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr style="line-height: 6pt; font-size: 1pt"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;    &amp;#8226;&amp;#160;
    &lt;/td&gt;
    &lt;td align="left"&gt;
    assessment of credit losses and
    &lt;font style="white-space: nowrap"&gt;other-than-temporary&lt;/font&gt;
    impairment charges on financial assets,
    &lt;/td&gt;
    &lt;/tr&gt;
    &lt;/table&gt;
    &lt;!-- XBRL Pagebreak Begin --&gt;
    &lt;!-- END PAGE WIDTH --&gt;
    &lt;!-- PAGEBREAK --&gt;
    &lt;div style="margin-left: 0%"&gt;
    &lt;!-- BEGIN PAGE WIDTH --&gt;
    &lt;div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;
    &lt;font style="font-family: 'Times New Roman', Times"&gt;
    &lt;/font&gt;
    &lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 0pt; font-size: 1pt"&gt;
    &lt;/div&gt;
    &lt;!-- XBRL Pagebreak End --&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;table width="100%" border="0" cellpadding="0" cellspacing="0" style="text-align: left"&gt;
    &lt;tr&gt;
    &lt;td width="4%"&gt;&lt;/td&gt;
    &lt;td width="2%"&gt;&lt;/td&gt;
    &lt;td width="94%"&gt;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;    &amp;#8226;&amp;#160;
    &lt;/td&gt;
    &lt;td align="left"&gt;
    valuation of noncontrolling interest, particularly in case of
    contribution in kind as part of a business combination,
    &lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr style="line-height: 6pt; font-size: 1pt"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;    &amp;#8226;&amp;#160;
    &lt;/td&gt;
    &lt;td align="left"&gt;
    restructuring charges,
    &lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr style="line-height: 6pt; font-size: 1pt"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;    &amp;#8226;&amp;#160;
    &lt;/td&gt;
    &lt;td align="left"&gt;
    assumptions used in calculating pension obligations,
    &lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr style="line-height: 6pt; font-size: 1pt"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;    &amp;#8226;&amp;#160;
    &lt;/td&gt;
    &lt;td align="left"&gt;
    the determination of the amount of taxes estimated for the full
    year, including deferred income tax assets and valuation
    allowances, and provisions for uncertain positions and claims.
    &lt;/td&gt;
    &lt;/tr&gt;
    &lt;/table&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company bases the estimates and assumptions on historical
    experience and on various other factors such as market trends
    and latest available business plans that it believes to be
    reasonable under the circumstances, the results of which form
    the basis for making judgments about the carrying values of
    assets and liabilities. While the Company regularly evaluates
    its estimates and assumptions, the actual results experienced by
    the Company could differ materially and adversely from
    management&amp;#8217;s estimates. To the extent there are material
    differences between the estimates and the actual results, future
    results of operations, cash flows and financial position could
    be significantly affected.
    &lt;/div&gt;
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Use of estimates Policy Text Block.</ElementDefenition><ElementReferences>No authoritative reference available.</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Use of estimates</Label></Row><Row><Id>5</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>us-gaap_ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock</ElementName><ElementPrefix>us-gaap</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>No definition available.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table3 - us-gaap:ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.3&amp;#160;&amp;#8212;
    Foreign currency&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The U.S.&amp;#160;dollar is the reporting currency of the Company.
    The U.S.&amp;#160;dollar is the currency of the primary economic
    environment in which the Company operates since the worldwide
    semiconductor industry uses the U.S.&amp;#160;dollar as a currency
    of reference for actual pricing in the market. Furthermore, the
    majority of the Company&amp;#8217;s transactions are denominated in
    U.S.&amp;#160;dollars, and revenues from external sales in
    U.S.&amp;#160;dollars largely exceed revenues in any other currency.
    However, labor costs are concentrated primarily in the countries
    of the Euro zone.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The functional currency of each subsidiary of the Company is
    either the local currency or the U.S.&amp;#160;dollar, depending on
    the basis of the economic environment in which each subsidiary
    operates. Foreign currency transactions, including operations in
    local currency when the U.S.&amp;#160;dollar is the functional
    currency, are translated into the functional currency using the
    exchange rate prevailing at the date of the transactions.
    Foreign exchange gains and losses resulting from the translation
    at reporting date of monetary assets and liabilities denominated
    in foreign currencies are recognized in the consolidated
    statements of income on the line &amp;#8220;Other income and
    expenses, net&amp;#8221;.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    For consolidation purposes, the results and financial position
    of the subsidiaries which functional currency is different from
    the U.S.&amp;#160;dollar are translated into the U.S.&amp;#160;dollar
    reporting currency as follows:
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    (a)&amp;#160;assets and liabilities for each consolidated balance
    sheet presented are translated at the closing rate as of the
    balance sheet date;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    (b)&amp;#160;income and expenses for each consolidated statement of
    income presented are translated at the monthly average exchange
    rate;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    (c)&amp;#160;all resulting currency translation adjustments
    (&amp;#8220;CTA&amp;#8221;) are reported as a component of
    &amp;#8220;Accumulated other comprehensive income (loss)&amp;#8221; in the
    consolidated statements of changes in equity.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Describes a reporting enterprise's accounting policy for (1) transactions denominated in a currency other than the reporting enterprise's functional currency, (2) translating foreign currency financial statements that are incorporated into the financial statements of the reporting enterprise by consolidation, combination, or the equity method of accounting, and (3) remeasurement of the financial statements of a foreign reporting enterprise in a hyperinflationary economy.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 52
 -Paragraph 5, 7-20, 80

</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Foreign currency</Label></Row><Row><Id>6</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>us-gaap_CashAndCashEquivalentsPolicyTextBlock</ElementName><ElementPrefix>us-gaap</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>No definition available.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table4 - us-gaap:CashAndCashEquivalentsPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.4&amp;#160;&amp;#8212;
    Cash and cash equivalents&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Cash and cash equivalents represent cash on hand and deposits
    with external financial institutions with an original maturity
    of ninety days or less that are readily convertible in cash.
    Bank overdrafts are not netted against cash and cash equivalents
    and are shown as part of current liabilities on the consolidated
    balance sheets.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>A description of a company's cash and cash equivalents accounting policy.  An entity shall disclose its policy for determining which items are treated as cash equivalents. Other information that may be disclosed includes (1) the nature of any restrictions on the entity's use of its cash and cash equivalents, (2) whether the entity's cash and cash equivalents are insured or expose the entity to credit risk, (3) the classification of any negative balance accounts (overdrafts), and (4) the carrying basis of cash equivalents (for example, at cost) and whether the carrying amount of cash equivalents approximates fair value. Cash includes currency on hand as well as demand deposits with banks or financial institutions.  It also includes other kinds of accounts that have the general characteristics of demand deposits in that the customer may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty.  In addition, cash equivalents include short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.  Generally, only investments with original maturities of three months or less qualify under that definition. Original maturity means original maturity to the entity holding the investment.  For example, both a three-month US Treasury bill and a three-year Treasury note purchased three months from maturity qualify as cash equivalents.  However, a Treasury note purchased three-years ago does not become a cash equivalent when its remaining maturity is three months.  For a bank, may include explanation and amount of requirement to maintain reserves against deposits.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher SEC
 -Name Financial Reporting Release (FRR)
 -Number 203
 -Paragraph 02-03

Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher SEC
 -Name Regulation S-X (SX)
 -Number 210
 -Section 02
 -Paragraph 1
 -Article 5

Reference 3: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 95
 -Paragraph 7, 8, 9, 10

Reference 4: http://www.xbrl.org/2003/role/presentationRef
 -Publisher AICPA
 -Name Technical Practice Aid (TPA)
 -Number 2110
 -Paragraph 6

</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Cash and cash equivalents</Label></Row><Row><Id>7</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>stm_RestrictedCashPolicyTextBlock</ElementName><ElementPrefix>stm</ElementPrefix><IsBaseElement>false</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>Restricted cash.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table5 - stm:RestrictedCashPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.5&amp;#160;&amp;#8212;
    Restricted cash&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Restricted cash includes collateral deposits used as security
    under arrangements for certain hedging transactions or financing
    of certain entities.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Restricted cash.</ElementDefenition><ElementReferences>No authoritative reference available.</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Restricted cash</Label></Row><Row><Id>8</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>us-gaap_ReceivablesPolicyTextBlock</ElementName><ElementPrefix>us-gaap</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>No definition available.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table6 - us-gaap:ReceivablesPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.6&amp;#160;&amp;#8212;
    Trade accounts receivable&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Trade accounts receivable are amounts due from customers for
    goods sold and services performed in the ordinary course of
    business. They are recognized at their sales value, net of
    allowances for doubtful accounts. The Company maintains an
    allowance for doubtful accounts for potential estimated losses
    resulting from its customers&amp;#8217;
    inability to make required payments. The Company bases its
    estimates on historical collection trends and records a
    provision accordingly. Additionally, the Company is required to
    evaluate its customers&amp;#8217; financial condition periodically
    and records a provision for any specific account the Company
    estimates as doubtful. The carrying amount of the receivable is
    thus reduced through the use of an allowance account, and the
    amount of the charge is recognized on the line &amp;#8220;Selling,
    general and administrative&amp;#8221; in the consolidated statements
    of income. Subsequent recoveries, if any, of amounts previously
    provided for are credited against the same line in the
    consolidated statements of income. When a trade accounts
    receivable is uncollectible, it is written-off against the
    allowance account for trade accounts receivables.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    In the event of sales of receivables and factoring, the Company
    derecognizes the receivables and accounts for them as a sale
    only to the extent that the Company has surrendered control over
    the receivables in exchange for a consideration other than
    beneficial interest in the transferred receivables.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Describes an entity's accounting policy for trade and other accounts receivable, and finance, loan and lease receivables, including those classified as held for investment and held for sale. This disclosure may include (1) the basis at which such receivables are carried in the entity's statements of financial position (2) how the level of the valuation allowance for receivables is determined (3) when impairments, charge-offs or recoveries are recognized for such receivables (4) the treatment of origination fees and costs, including the amortization method for net deferred fees or costs (5) the treatment of any premiums or discounts or unearned income (6) the entity's income recognition policies for such receivables, including those that are impaired, past due or placed on nonaccrual status and (7) the treatment of foreclosures or repossessions (8) the nature and amount of any guarantees to repurchase receivables.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher SEC
 -Name Regulation S-X (SX)
 -Number 210
 -Section 02
 -Paragraph 3-5
 -Article 5

Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 114
 -Paragraph 20
 -Subparagraph b

Reference 3: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Emerging Issues Task Force (EITF)
 -Number 92-5

Reference 4: http://www.xbrl.org/2003/role/presentationRef
 -Publisher AICPA
 -Name Statement of Position (SOP)
 -Number 01-6
 -Paragraph 13

</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Trade accounts receivable</Label></Row><Row><Id>9</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>us-gaap_InventoryPolicyTextBlock</ElementName><ElementPrefix>us-gaap</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>No definition available.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table7 - us-gaap:InventoryPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.7&amp;#160;&amp;#8212;
    Inventories&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Inventories are stated at the lower of cost or net realizable
    value. Cost is based on the weighted average cost by adjusting
    standard cost to approximate actual manufacturing costs on a
    quarterly basis; the cost is therefore dependent on the
    Company&amp;#8217;s manufacturing performance. In the case of
    underutilization of manufacturing facilities, the costs
    associated with the excess capacity are not included in the
    valuation of inventories but charged directly to cost of sales.
    Net realizable value is the estimated selling price in the
    ordinary course of business, less applicable variable selling
    expenses and cost of completion.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company performs on a continuous basis inventory write-off
    of products, which have the characteristics of slow-moving, old
    production date and technical obsolescence. Additionally, the
    Company evaluates its product inventory to identify obsolete or
    slow-selling stock and records a specific provision if the
    Company estimates the inventory will eventually become obsolete.
    Provisions for obsolescence are estimated for excess uncommitted
    inventory based on the previous quarter sales, orders&amp;#8217;
    backlog and production plans.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Describes an entity's accounting policies covering its major classes of inventories, bases of stating inventories (for example lower of cost or market), methods by which amounts are added and removed from inventory classes (for example FIFO, LIFO, or average cost), loss recognition on impairment of inventories, and situations in which inventories are stated above cost. If inventory is carried at cost, this description includes the nature of the cost elements included in inventory.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher SEC
 -Name Financial Reporting Release (FRR)
 -Number 206
 -Chapter 2
 -Paragraph b
 -Subparagraph i, ii

Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher AICPA
 -Name Accounting Research Bulletin (ARB)
 -Number 43
 -Chapter 4
 -Paragraph 3, 5-10, 15, 16, 17

Reference 3: http://www.xbrl.org/2003/role/presentationRef
 -Publisher SEC
 -Name Regulation S-X (SX)
 -Number 210
 -Section 02
 -Paragraph 6
 -Subparagraph a
 -Article 5

Reference 4: http://www.xbrl.org/2003/role/presentationRef
 -Publisher AICPA
 -Name Accounting Research Bulletin (ARB)
 -Number 43
 -Chapter 3
 -Section A
 -Paragraph 9

Reference 5: http://www.xbrl.org/2003/role/presentationRef
 -Publisher AICPA
 -Name Statement of Position (SOP)
 -Number 81-1
 -Paragraph 69-75

</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Inventories</Label></Row><Row><Id>10</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>us-gaap_IncomeTaxPolicyTextBlock</ElementName><ElementPrefix>us-gaap</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>No definition available.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table8 - us-gaap:IncomeTaxPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.8&amp;#160;&amp;#8212;
    Current and deferred income tax&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Income tax for the period comprises current and deferred income
    tax. Current income tax represents the income tax expected to be
    paid or the benefit expected to be received related to the
    current year income or loss in each individual tax jurisdiction.
    Deferred income tax is recognized, using the liability method,
    for all temporary differences arising between the tax bases of
    assets and liabilities and their carrying amount in the
    consolidated financial statements. However deferred tax
    liabilities are not recognized if they arise from the initial
    recognition of goodwill; deferred income tax is not accounted
    for if it arises from initial recognition of an asset or
    liability in a transaction other than a business combination
    that at the time of the transaction affects neither accounting
    nor taxable profit and loss. Deferred income tax is determined
    using tax rates and laws that are enacted by the balance sheet
    date and are expected to apply when the related deferred income
    tax asset is realized or the deferred income tax liability is
    settled. The effect on deferred tax assets and liabilities from
    changes in tax laws and tax rates is recognized in earnings in
    the period in which the law is enacted. Deferred income tax
    assets are recognized in full, but the Company assesses whether
    it is probable that future taxable profit will be available
    against which temporary differences can be utilized. A valuation
    allowance is provided for deferred tax assets when management
    considers it is more likely than not that they will not be
    realized.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company utilizes the flow-through method to account for its
    investment credits and research and development tax credits,
    reflecting the credits as a reduction of tax expense in the year
    they are recognized. As described in Note&amp;#160;2.20, French
    research tax credits are recorded as grants and reported as a
    reduction of research and development expenses.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company&amp;#8217;s intent is to indefinitely reinvest the
    earnings in the subsidiaries. Consequently, deferred taxes on
    the undistributed earnings of the Company&amp;#8217;s foreign
    subsidiaries are not provided for. Additionally, a distribution
    of the related earnings would not have any material tax impact.
    A deferred tax asset is recognized on compensation for the grant
    of stock awards to the extent that such charge constitutes a
    temporary difference in the subsidiaries&amp;#8217; local tax
    jurisdictions. Changes in the stock price do not impact the
    deferred tax asset or do not result in any adjustments prior to
    vesting. When the actual tax deduction is determined, generally
    upon vesting, it is compared to the deferred tax asset as
    recognized over the vesting period. When a windfall tax benefit
    is determined (as the excess tax benefit of the actual tax
    deduction over the deferred tax asset) the excess tax benefit is
    recorded in equity on the line &amp;#8220;Capital surplus&amp;#8221; on
    the consolidated statements of changes in equity. In case of
    shortfall, only the actual tax
    benefit is to be recognized in the consolidated statements of
    income. The Company writes off the deferred tax asset at the
    level of the actual tax deduction by charging first capital
    surplus to the extent of the pool of windfall benefits available
    from prior years, and then earnings. When the settlement of an
    award results in a net operating loss (&amp;#8220;NOL&amp;#8221;)
    carryforward, or increase existing NOLs, the excess tax benefit
    and the corresponding credit to capital surplus is not recorded
    until the deduction reduces income tax payable.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    At each reporting date, the Company assesses all material open
    income tax positions in all tax jurisdictions to determine any
    uncertain tax positions. The Company uses a two-step process for
    the evaluation of uncertain tax positions. The recognition
    threshold in step one permits the benefit from an uncertain tax
    position to be recognized only if it is more likely than not, or
    50&amp;#160;percent assured, that the tax position will be sustained
    upon examination by the taxing authorities. The measurement
    methodology in step two is based on a &amp;#8220;cumulative
    probability&amp;#8221; approach, resulting in the recognition of the
    largest amount that is greater than 50&amp;#160;percent likely of
    being realized upon settlement with the taxing authority. The
    Company classifies accrued interest and penalties related to
    uncertain tax positions as components of income tax expense in
    its consolidated statements of income. Uncertain tax positions,
    unrecognized tax benefits and related accrued interest and
    penalties are further described in Note&amp;#160;23.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Describes an entity's accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher AICPA
 -Name Accounting Principles Board Opinion (APB)
 -Number 4
 -Paragraph 11

Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name FASB Interpretation (FIN)
 -Number 48
 -Paragraph 20

Reference 3: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 109
 -Paragraph 6-34, 43, 47, 49

</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Current and deferred income tax</Label></Row><Row><Id>11</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>us-gaap_ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock</ElementName><ElementPrefix>us-gaap</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>No definition available.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table9 - us-gaap:ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.9&amp;#160;&amp;#8212;
    Assets held for sale&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Assets are classified as assets held for sale when their
    carrying amount is to be recovered principally through a sale
    transaction rather than through continuing use. The assets are
    classified as assets to be disposed of by sale when the
    following conditions have been met: management has approved the
    plan to sell; assets are available for immediate sale; assets
    are actively being marketed; sale is probable within one year;
    price is reasonable in the market and it is unlikely that there
    will be significant changes in the assets to be sold or a
    withdrawal to the plan to sell. Assets classified as held for
    sale are reported as current assets at the lower of their
    carrying amount and fair value less costs to sell. Costs to sell
    include incremental direct costs to transact the sale that would
    not have been incurred except for the decision to sell.
    Depreciation is not charged on long-lived assets classified as
    &lt;font style="white-space: nowrap"&gt;held-for-sale.&lt;/font&gt;
    When the
    &lt;font style="white-space: nowrap"&gt;held-for-sale&lt;/font&gt;
    accounting treatment requires an impairment charge for the
    difference between the carrying amount and the fair value, such
    impairment is reflected on the consolidated statements of income
    on the line &amp;#8220;Impairment, restructuring charges and other
    related closure costs&amp;#8221;. If the long-lived assets no longer
    meet the
    &lt;font style="white-space: nowrap"&gt;held-for-sale&lt;/font&gt;
    model, they are reported as assets held for use and thus
    reclassified from current assets to the line &amp;#8220;Property,
    plant and equipment, net&amp;#8221; in the consolidated balance
    sheet. The assets are measured at the lower of their fair value
    at the date of the subsequent decision not to sell and their
    carrying amount prior to their classification as assets held for
    sale, adjusted for any depreciation that would have been
    recognized if the long-lived assets had not been classified as
    assets held for sale. Any required adjustment to the carrying
    value of the asset that is reclassified as held and used is
    recorded in the income statement at the time of the
    reclassification and reported in the same income statement
    caption that was used to report adjustments to the carrying
    value of the asset during the time it was held for sale (line
    &amp;#8220;Impairment, restructuring charges and other related
    closure costs&amp;#8221;).
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Describes an entity's accounting policy for recognizing and measuring the impairment of long-lived assets. An entity also may disclose its accounting policy for long-lived assets to be sold. This policy excludes goodwill and intangible assets.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher SEC
 -Name Staff Accounting Bulletin (SAB)
 -Number Topic 5
 -Section CC
 -Subsection 3

Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 144
 -Paragraph 7-15, 26, 30-37

</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Assets held for sale</Label></Row><Row><Id>12</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>stm_BusinessCombinationsAndGoodwillPolicyTextBlock</ElementName><ElementPrefix>stm</ElementPrefix><IsBaseElement>false</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>Business combinations and goodwill.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table10 - stm:BusinessCombinationsAndGoodwillPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.10&amp;#160;&amp;#8212;
    Business combinations and goodwill&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company assesses each investment in equity securities to
    determine whether the investee is a Variable Interest Entity
    (&amp;#8220;VIE&amp;#8221;). The Company consolidates the VIEs for which
    the Company is determined to be the primary beneficiary. The
    primary beneficiary of a VIE is the party that: (i)&amp;#160;has the
    power to direct the most significant activities of the VIE and
    (ii)&amp;#160;is obligated to absorb losses or has the rights to
    receive returns that would be considered significant to the VIE.
    Assets, liabilities, and the noncontrolling interest of newly
    consolidated VIEs are initially measured at fair value in the
    same manner as if the consolidation resulted from a business
    combination.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The purchase accounting method applied to all business
    combinations concluded on or after January&amp;#160;1, 2009, is on
    the basis of the amended U.S.&amp;#160;GAAP purchase accounting
    guidance. The net of the acquisition-date amount of the
    identifiable assets acquired, equity instruments issued, and
    liabilities assumed is measured at fair value on the acquisition
    date. Any contingent purchase price, and contingent assets and
    liabilities, are recorded at fair value on the acquisition date,
    regardless of the likelihood of payment. Acquisition-related
    transaction costs and restructuring costs relating to the
    acquired business are expensed as incurred. Acquired in-process
    research and development (&amp;#8220;IPR&amp;#038;D&amp;#8221;) costs are
    capitalized and recorded as an intangible asset on the
    acquisition date, subject to impairment testing until the
    research or development is completed or abandoned. The excess of
    the aggregate of the consideration transferred and the fair
    value of any noncontrolling interest in the acquiree over the
    net of the acquisition-date amount of the identifiable assets
    acquired and liabilities assumed is recorded as goodwill. In
    case of a bargain purchase, the Company reassesses whether it
    has correctly identified all of the assets acquired and all of
    the liabilities assumed; the noncontrolling interest in the
    acquiree, if any; the Company&amp;#8217;s previously held equity
    interest in the acquiree, if any; and the consideration
    transferred. If after this review, a bargain purchase is still
    indicated, it is recognized in earnings attributed to the
    Company. The purchase of additional interests in a partially
    owned subsidiary is treated as an equity transaction as well as
    all transactions concerning the sale of subsidiary stock or the
    issuance of stock by the partially owned subsidiary as long as
    there is no change in control of the subsidiary. If as a
    consequence of selling subsidiary shares, the Company no longer
    controls the subsidiary, the Company recognizes a gain or loss
    in earnings.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Goodwill represents the excess of the aggregate of the
    consideration transferred and the fair value of any
    noncontrolling interest in the acquiree over the net of the
    acquisition-date amount of the identifiable assets acquired and
    liabilities assumed. Goodwill is carried at cost less
    accumulated impairment losses. Goodwill is not amortized but is
    tested annually for impairment, or more frequently if indicators
    of impairment exist. Goodwill subject to potential impairment is
    tested at a reporting unit level, which represents a component
    of an operating segment for which discrete financial information
    is available and is subject to regular review by segment
    management. This impairment test determines whether the fair
    value of each reporting unit for which goodwill is allocated is
    lower than the total carrying amount of relevant net assets
    allocated to such reporting unit, including its allocated
    goodwill. If lower, the implied fair value of the reporting unit
    goodwill is then compared to the carrying value of the goodwill
    and an impairment charge is recognized for any excess. In
    determining the fair value of a reporting unit, the Company uses
    a market approach with financial metrics of comparable public
    companies and estimates the expected discounted future cash
    flows associated with the reporting unit. Significant management
    judgments and estimates are used in forecasting the future
    discounted cash flows, including: the applicable industry&amp;#8217;s
    sales volume forecast and selling price evolution, the reporting
    unit&amp;#8217;s market penetration and its revenues evolution, the
    market acceptance of certain new technologies and products, the
    relevant cost structure, the discount rates applied using a
    weighted average cost of capital and the perpetuity rates used
    in calculating cash flow terminal values.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Business combinations and goodwill.</ElementDefenition><ElementReferences>No authoritative reference available.</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Business combinations and goodwill</Label></Row><Row><Id>13</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>stm_IntangibleAssetsPolicyTextBlock</ElementName><ElementPrefix>stm</ElementPrefix><IsBaseElement>false</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>Intangible assets.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table11 - stm:IntangibleAssetsPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.11&amp;#160;&amp;#8212;
    Intangible assets with finite useful lives&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Intangible assets subject to amortization include the intangible
    assets purchased from third parties recorded at cost and the
    intangible assets acquired in business combinations recorded at
    fair value, which include trademarks, technologies and licenses,
    contractual customer relationships and computer software.
    &lt;/div&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;Trademarks
    and technology licenses&lt;/font&gt;&lt;/i&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Separately acquired trademarks and licenses are recorded at
    historical cost. Trademarks and licenses acquired in a business
    combination are recognized at fair value at the acquisition
    date. Trademarks and licenses have a finite useful life and are
    carried at cost less accumulated amortization and impairment
    losses, if any. Amortization begins when the intangible asset is
    available for use and is calculated using the straight-line
    method to allocate the cost of trademarks and licenses over the
    estimated useful lives. The estimate useful lives on licenses
    range from 3 to 7&amp;#160;years while trademarks have a useful life
    ranging from 2 to 3&amp;#160;years.
    &lt;/div&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;Contractual
    customer relationships&lt;/font&gt;&lt;/i&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Contractual customer relationships acquired in a business
    combination are recognized at fair value at the acquisition
    date. Contractual customer relationships have a finite useful
    life and are carried at cost less accumulated amortization and
    impairment losses, if any. Amortization is calculated using the
    straight-line method over the expected life of the customer
    relationships, which ranges from 4 to 12&amp;#160;years.
    &lt;/div&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;Computer
    software&lt;/font&gt;&lt;/i&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Separately acquired computer software is recorded at historical
    cost. Costs associated with maintaining computer software
    programmes are expensed in the consolidated statements of income
    as incurred. The capitalization of costs for internally
    generated software developed by the Company for its internal use
    begins when preliminary project stage is completed and when the
    Company, implicitly or explicitly, authorizes and commits to
    funding a computer software project. It must be probable that
    the project will be completed and will be used to perform the
    function intended. Amortisation on computer software begins when
    the software is available for use and is calculated using the
    straight-line method over the estimated useful life, which does
    not exceed 4&amp;#160;years.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The carrying value of intangible assets with finite useful lives
    is evaluated whenever changes in circumstances indicate that the
    carrying amount may not be recoverable. An impairment loss is
    recognized in the consolidated
    statements of income for the amount by which the asset&amp;#8217;s
    carrying amount exceeds its fair value. The Company evaluates
    the remaining useful life of an intangible asset at each
    reporting period to determine whether events and circumstances
    warrant a revision to the remaining period of amortization.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Intangible assets.</ElementDefenition><ElementReferences>No authoritative reference available.</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Intangible assets with finite useful lives</Label></Row><Row><Id>14</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>us-gaap_PropertyPlantAndEquipmentPolicyTextBlock</ElementName><ElementPrefix>us-gaap</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>No definition available.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table12 - us-gaap:PropertyPlantAndEquipmentPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.12&amp;#160;&amp;#8212;
    Property, plant and equipment&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Property, plant and equipment are stated at historical cost, net
    of government funding and any impairment losses. Property, plant
    and equipment acquired in a business combination are recognized
    at fair value at the acquisition date. Major additions and
    improvements are capitalized, minor replacements and repairs are
    charged to current operations.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Land is not depreciated. Depreciation on fixed assets is
    computed using the straight-line method over their estimated
    useful lives, as follows:
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;table border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent; text-align: left"&gt;
    &lt;!-- Table Width Row BEGIN --&gt;
    &lt;tr style="font-size: 1pt" valign="bottom"&gt;
    &lt;td width="87%"&gt;&amp;#160;&lt;/td&gt;&lt;!-- colindex=01 type=maindata --&gt;
    &lt;td width="2%"&gt;&amp;#160;&lt;/td&gt;&lt;!-- colindex=02 type=gutter --&gt;
    &lt;td width="5%" align="right"&gt;&amp;#160;&lt;/td&gt;&lt;!-- colindex=02 type=lead --&gt;
    &lt;td width="1%" align="right"&gt;&amp;#160;&lt;/td&gt;&lt;!-- colindex=02 type=body --&gt;
    &lt;td width="5%" align="left"&gt;&amp;#160;&lt;/td&gt;&lt;!-- colindex=02 type=hang1 --&gt;
    &lt;/tr&gt;
    &lt;!-- Table Width Row END --&gt;
    &lt;!-- TableOutputHead --&gt;
    &lt;!-- TableOutputBody --&gt;
    &lt;tr valign="bottom" style="background: #cceeff"&gt;
    &lt;td nowrap="nowrap" align="left" valign="bottom"&gt;
    &lt;div style="text-indent: -10pt; margin-left: 10pt"&gt;
    Buildings
    &lt;/div&gt;
    &lt;/td&gt;
    &lt;td&gt;
    &amp;#160;
    &lt;/td&gt;
    &lt;td nowrap="nowrap" align="right" valign="bottom"&gt;
    &amp;#160;
    &lt;/td&gt;
    &lt;td nowrap="nowrap" align="right" valign="bottom"&gt;
    33&amp;#160;years
    &lt;/td&gt;
    &lt;td nowrap="nowrap" align="left" valign="bottom"&gt;
    &amp;#160;
    &lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="bottom"&gt;
    &lt;td align="left" valign="bottom"&gt;
    &lt;div style="text-indent: -10pt; margin-left: 10pt"&gt;
    Facilities&amp;#160;&amp;#038; leasehold improvements
    &lt;/div&gt;
    &lt;/td&gt;
    &lt;td&gt;
    &amp;#160;
    &lt;/td&gt;
    &lt;td nowrap="nowrap" align="right" valign="bottom"&gt;
    &amp;#160;
    &lt;/td&gt;
    &lt;td nowrap="nowrap" align="right" valign="bottom"&gt;
    5-10&amp;#160;years
    &lt;/td&gt;
    &lt;td nowrap="nowrap" align="left" valign="bottom"&gt;
    &amp;#160;
    &lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="bottom" style="background: #cceeff"&gt;
    &lt;td align="left" valign="bottom"&gt;
    &lt;div style="text-indent: -10pt; margin-left: 10pt"&gt;
    Machinery and equipment
    &lt;/div&gt;
    &lt;/td&gt;
    &lt;td&gt;
    &amp;#160;
    &lt;/td&gt;
    &lt;td nowrap="nowrap" align="right" valign="bottom"&gt;
    &amp;#160;
    &lt;/td&gt;
    &lt;td nowrap="nowrap" align="right" valign="bottom"&gt;
    3-10&amp;#160;years
    &lt;/td&gt;
    &lt;td nowrap="nowrap" align="left" valign="bottom"&gt;
    &amp;#160;
    &lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="bottom"&gt;
    &lt;td align="left" valign="bottom"&gt;
    &lt;div style="text-indent: -10pt; margin-left: 10pt"&gt;
    Computer and R&amp;#038;D equipment
    &lt;/div&gt;
    &lt;/td&gt;
    &lt;td&gt;
    &amp;#160;
    &lt;/td&gt;
    &lt;td nowrap="nowrap" align="right" valign="bottom"&gt;
    &amp;#160;
    &lt;/td&gt;
    &lt;td nowrap="nowrap" align="right" valign="bottom"&gt;
    3-6&amp;#160;years
    &lt;/td&gt;
    &lt;td nowrap="nowrap" align="left" valign="bottom"&gt;
    &amp;#160;
    &lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="bottom" style="background: #cceeff"&gt;
    &lt;td nowrap="nowrap" align="left" valign="bottom"&gt;
    &lt;div style="text-indent: -10pt; margin-left: 10pt"&gt;
    Other
    &lt;/div&gt;
    &lt;/td&gt;
    &lt;td&gt;
    &amp;#160;
    &lt;/td&gt;
    &lt;td nowrap="nowrap" align="right" valign="bottom"&gt;
    &amp;#160;
    &lt;/td&gt;
    &lt;td nowrap="nowrap" align="right" valign="bottom"&gt;
    2-5&amp;#160;years
    &lt;/td&gt;
    &lt;td nowrap="nowrap" align="left" valign="bottom"&gt;
    &amp;#160;
    &lt;/td&gt;
    &lt;/tr&gt;
    &lt;/table&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company evaluates each period whether there is reason to
    suspect that tangible assets or groups of assets held for use
    might not be recoverable. Several impairment indicators exist
    for making this assessment, such as: significant changes in the
    technology, market, economic or legal environment in which the
    Company operates or in the market to which the asset is
    dedicated, or available evidence of obsolescence of the asset,
    or indication that its economic performance is, or will be,
    worse than expected. In determining the recoverability of assets
    to be held and used, the Company initially assesses whether the
    carrying value of the tangible assets or group of assets exceeds
    the undiscounted cash flows associated with these assets. If
    exceeded, the Company then evaluates whether an impairment
    charge is required by determining if the asset&amp;#8217;s carrying
    value also exceeds its fair value. This fair value is normally
    estimated by the Company based on independent market appraisals
    or the sum of discounted future cash flows, using market
    assumptions such as the utilization of the Company&amp;#8217;s
    fabrication facilities and the ability to upgrade such
    facilities, change in the selling price and the adoption of new
    technologies. The Company also evaluates, and adjusts if
    appropriate, the assets&amp;#8217; useful lives, at each balance
    sheet date or when impairment indicators exist.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    When property, plant and equipment are retired or otherwise
    disposed of, the net book value of the assets is removed from
    the Company&amp;#8217;s books. Gains and losses on disposals are
    determined by comparing the proceeds with the carrying amount
    and are included in &amp;#8220;Other income and expenses, net&amp;#8221;
    in the consolidated statements of income.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Lease arrangements in which the Company has substantially all
    the risks and rewards of ownership are classified as capital
    leases. Assets leased under capital leases are included in
    &amp;#8220;Property, plant and equipment, net&amp;#8221; and recorded at
    inception at the lower of their fair value and the present value
    of the minimum lease payments. They are depreciated over the
    shorter of the estimated useful life and the lease term. The
    financial liability corresponding to the contractual obligation
    to proceed to future lease payments is included in long-term
    debt, as described in Note&amp;#160;2.15. Lease arrangements
    classified as operating leases are arrangements in which the
    lessor retains a significant portion of the risks and rewards of
    ownership of the leased assets. Payments made under operating
    leases are charged to the consolidated statements of income on a
    straight-line basis over the lease period.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Describes an entity's accounting policy for property, plant and equipment which may include the basis of such assets, depreciation methods used and estimated useful lives, the entity's capitalization policy, including its accounting treatment for costs incurred for repairs and maintenance activities, whether such asset balances include capitalized interest and the method by which such is calculated, how disposals of such assets are accounted for and how impairment of such assets is assessed and recognized.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher AICPA
 -Name Accounting Research Bulletin (ARB)
 -Number 43
 -Chapter 9
 -Section C
 -Paragraph 5

Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 144
 -Paragraph 7

Reference 3: http://www.xbrl.org/2003/role/presentationRef
 -Publisher AICPA
 -Name Accounting Principles Board Opinion (APB)
 -Number 22
 -Paragraph 12, 13

Reference 4: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 34
 -Paragraph 8, 9

Reference 5: http://www.xbrl.org/2003/role/presentationRef
 -Publisher SEC
 -Name Regulation S-X (SX)
 -Number 210
 -Section 02
 -Paragraph 13
 -Subparagraph a
 -Article 5

Reference 6: http://www.xbrl.org/2003/role/presentationRef
 -Publisher AICPA
 -Name Accounting Principles Board Opinion (APB)
 -Number 12
 -Paragraph 5
 -Subparagraph d

</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Property, plant and equipment</Label></Row><Row><Id>15</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>stm_EquityAndCostMethodInvestmentsPolicyTextBlock</ElementName><ElementPrefix>stm</ElementPrefix><IsBaseElement>false</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>Equity and Cost Method Investments Policy</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table13 - stm:EquityAndCostMethodInvestmentsPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.13&amp;#160;&amp;#8212;
    Investments&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company assesses each investment to determine whether the
    investee is a Variable Interest Entity (&amp;#8220;VIE&amp;#8221;). The
    Company consolidates the VIEs for which the Company is
    determined to be the primary beneficiary, as described in
    Note&amp;#160;2.10.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    For investments in public companies that have readily
    determinable fair values and for which the Company does not
    exercise significant influence, the Company classifies these
    equity securities as
    &lt;font style="white-space: nowrap"&gt;held-for-trading&lt;/font&gt;
    or
    &lt;font style="white-space: nowrap"&gt;available-for-sale&lt;/font&gt;
    as described in Note&amp;#160;2.24. Investments in equity securities
    without readily determinable fair values and for which the
    Company does not have the ability to exercise significant
    influence are accounted for under the cost method. Under the
    cost method of accounting, investments are carried at historical
    cost and are adjusted only for declines in value. The fair value
    of a cost method investment is estimated on a non-recurring
    basis when
    there are identified events or changes in circumstances that may
    have a significant adverse effect on the fair value of the
    investment. An impairment loss is immediately recorded in the
    consolidated statements of income when it is assessed to be
    &lt;font style="white-space: nowrap"&gt;other-than-temporary&lt;/font&gt;
    and is based on the Company&amp;#8217;s assessment of any significant
    and sustained reductions in the investment&amp;#8217;s fair value.
    For unquoted equity securities, assumptions and estimates used
    in measuring fair value include the use of recent arm&amp;#8217;s
    length transactions when they reflect the orderly exit price of
    the investments. Gains and losses on investments sold are
    determined on the specific identification method and are
    recorded as a non-operating element on the line &amp;#8220;Gain
    (loss) on financial instruments, net&amp;#8221; in the consolidated
    statements of income.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Equity investments are all entities over which the Company has
    the ability to exercise significant influence but not control,
    generally representing a shareholding of between 20% and 50% of
    the voting rights. These investments are valued under the equity
    method and are initially recognized at cost. Goodwill on equity
    investments is included in the carrying value of the investment
    and is not individually tested for impairment. Equity
    investments also include entities which the Company determines
    to be variable interest entities, as described in
    Note&amp;#160;2.10, if the Company has the ability to exercise
    significant influence over the entity&amp;#8217;s operations even if
    the Company owns less than 20% and is not the primary
    beneficiary. Equity investments are presented on the face of the
    consolidated balance sheets. The Company&amp;#8217;s share in the
    result of operations of equity investments is recognized in the
    consolidated statements of income on the line &amp;#8220;Earnings
    (loss) on equity investments&amp;#8221; and in the consolidated
    balance sheets as an adjustment to the carrying amount of the
    investments. Where there has been a change recognized directly
    in the equity of the investee, the Company recognizes its share
    in the adjustment, when applicable, directly in the consolidated
    statement of changes in equity. The financial statements of the
    equity investments are prepared for the same reporting period as
    the Company or with a quarter lag if the investee cannot issue
    financial statements in a timing compliant with the closing
    timeframe requirements of the Company. Where necessary,
    adjustments are made to bring the accounting policies in line
    with those of the Company. At each period-end, the Company
    assesses whether there is objective evidence that its interests
    in equity investments are impaired. Once a determination is made
    that an
    &lt;font style="white-space: nowrap"&gt;other-than-temporary&lt;/font&gt;
    impairment exists, the Company writes down the carrying value of
    the equity investment to its fair value at the balance sheet
    date, which establishes a new cost basis. The fair value of an
    equity investment is measured on a non-recurring basis using
    primarily a combination of an income approach, based on
    discounted cash flows, and a market approach with financial
    metrics of comparable public companies.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company, when it acted, until 2010, as a guarantor,
    recognized, at the inception of a guarantee, a liability for the
    fair value of the obligation the Company assumed under the
    guarantee. When the guarantee was issued in conjunction with the
    formation of a partially owned business or a venture accounted
    for under the equity method, the recognition of the liability
    for the guarantee resulted in an increase to the carrying amount
    of the investment. The liabilities recognized for the
    obligations of the guarantees undertaken by the Company were
    measured subsequently on each reporting date, the initial
    liability being reduced as the Company, as a guarantor, was
    released from the risk underlying the guarantee.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Equity and Cost Method Investments Policy</ElementDefenition><ElementReferences>No authoritative reference available.</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Investments</Label></Row><Row><Id>16</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>stm_ConstructiveObligationsPolicyTextBlock</ElementName><ElementPrefix>stm</ElementPrefix><IsBaseElement>false</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>Provisions.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table14 - stm:ConstructiveObligationsPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.14&amp;#160;&amp;#8212;
    Provisions&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Provisions are recognized when the Company has a present legal
    or constructive obligation as a result of past events; it is
    probable that an outflow of resources will be required to settle
    the obligation; and the amount has been reliably estimated.
    Provisions are not recognized for future operating losses. Where
    there are a number of similar obligations, the likelihood that
    an outflow will be required in settlements is determined by
    considering the class of obligations as a whole. A provision is
    recognized even if the likelihood of the outflow with respect to
    any one item included in the same class of obligations may be
    small.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Provisions.</ElementDefenition><ElementReferences>No authoritative reference available.</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Provisions</Label></Row><Row><Id>17</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>us-gaap_DebtPolicyTextBlock</ElementName><ElementPrefix>us-gaap</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>No definition available.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table15 - us-gaap:DebtPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.15&amp;#160;&amp;#8212;
    Long-term debt&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;(a)&amp;#160;Convertible
    debt&lt;/font&gt;&lt;/i&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Zero-coupon convertible bonds are recorded at principal amount
    in long-term debt and are subsequently stated at amortized cost.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Debt issuance costs are reported as non-current assets on the
    line &amp;#8220;Other investments and other non-current assets&amp;#8221;
    of the consolidated balance sheets. They are subsequently
    amortized through earnings on the line &amp;#8220;Interest income
    (expense), net&amp;#8221; of the consolidated statements of income
    until the first redemption right of the holder.
    Outstanding bond amounts are classified in the consolidated
    balance sheet as &amp;#8220;Current portion of long-term debt&amp;#8221;
    in the year of the redemption right of the holder.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company may from time to time proceed to the repurchase on
    the market of issued bonds. The gain (loss) on the bonds&amp;#8217;
    buyback is determined as the difference between the amount paid
    for the buyback and the carrying amount of the corresponding
    debt, including related debt issuance costs, at the date of
    repurchase. The gain (loss) on debt buyback is reported in the
    consolidated statements of income on the line &amp;#8220;Gain (loss)
    on financial instruments, net&amp;#8221;.
    &lt;/div&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;(b)&amp;#160;Bank
    loans and senior bonds&lt;/font&gt;&lt;/i&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Bank loans, including non-convertible senior bonds, are
    recognized at historical cost, net of transaction costs
    incurred. They are subsequently stated at amortized cost; any
    difference between the proceeds (net of transaction costs) and
    the redemption value is recognized in the consolidated
    statements of income over the period of the borrowings using the
    effective interest rate method.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    As described in Note&amp;#160;2.12, lease arrangements in which the
    Company has substantially all the risks and rewards of ownership
    are classified as capital leases. The Company reports the leased
    assets on the line &amp;#8220;Property, plant and equipment&amp;#8221; and
    recognizes a financial liability corresponding to the
    contractual obligation to proceed to future lease payments,
    which is included in long-term debt. Each lease payment is
    allocated between the debt repayment and interest expense.
    Borrowings are classified as current liabilities unless the
    Company has an unconditional right to defer settlement of the
    liability for at least twelve months after the balance sheet
    date.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Describes the entity's accounting policies with respect to costs incurred to obtain or issue debt, the effects of refinancings, method of amortizing deferred financing costs and original issue discount, and classifications of debt on the balance sheet.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher AICPA
 -Name Accounting Principles Board Opinion (APB)
 -Number 22
 -Paragraph 8, 12

</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Long-term debt</Label></Row><Row><Id>18</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>us-gaap_CompensationRelatedCostsPolicyTextBlock</ElementName><ElementPrefix>us-gaap</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>No definition available.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table16 - us-gaap:CompensationRelatedCostsPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.16&amp;#160;&amp;#8212;
    Employee benefits&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;(a)&amp;#160;Pension
    obligations&lt;/font&gt;&lt;/i&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company sponsors various pension schemes for its employees.
    These schemes conform to local regulations and practices in the
    countries in which the Company operates. They are generally
    funded through payments to insurance companies,
    trustee-administered funds or state institutions, determined by
    periodic actuarial calculations. Such plans include both defined
    benefit and defined contribution plans. A defined benefit plan
    is a pension plan that defines the amount of pension benefit
    that an employee will receive on retirement, usually dependent
    on one or more factors such as age, years of service and
    compensation. A defined contribution plan is a pension plan
    under which the Company pays fixed contributions into a separate
    entity for which the Company has no legal or constructive
    obligations to pay further contributions if the fund does not
    hold sufficient assets to pay all employees the benefits
    relating to employee service in the current and prior periods.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The liability recognized in the consolidated balance sheet in
    respect of defined benefit pension plans is the present value of
    the defined benefit obligation at the balance sheet date less
    the fair value of plan assets. The overfunded or underfunded
    status of the defined benefit plans are calculated as the
    difference between plan assets and the projected benefit
    obligations. Significant estimates are used in determining the
    assumptions incorporated in the calculation of the pension
    obligations, which is supported by input from independent
    actuaries. Actuarial gains and losses arising from experience
    adjustments and changes in actuarial assumptions are charged or
    credited to income over the employees&amp;#8217; expected average
    remaining working lives. Past-service costs are recognized
    immediately in earnings, unless the changes to the pension
    scheme are conditional on the employees remaining in service for
    a specified period of time (the vesting period). In this case,
    the past-service costs are amortized on a straight-line basis
    over the vesting period. The net periodic benefit cost of the
    year is determined based on the assumptions used at the end of
    the previous year.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    For defined contribution plans, the Company pays contributions
    to publicly or privately administered pension insurance plans on
    a mandatory, contractual or voluntary basis. The Company has no
    further payment obligations once the contributions have been
    paid. The contributions are recognized as employee benefit
    expense when they are due. Prepaid contributions are recognized
    as an asset to the extent that a cash refund or a reduction in
    the future payments is available.
    &lt;/div&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;(b)&amp;#160;Other
    post-retirement obligations&lt;/font&gt;&lt;/i&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company provides post-retirement benefits to some of its
    retirees. The entitlement to these benefits is usually
    conditional on the employee remaining in service up to
    retirement age and to the completion of a minimum service
    period. The expected costs of these benefits are accrued over
    the period of employment using an accounting
    methodology similar to that for defined benefit pension plans.
    Actuarial gains and losses arising from experience adjustments,
    and changes in actuarial assumptions, are charged or credited to
    income over the expected average remaining working lives of the
    related employees. These obligations are valued annually by
    independent qualified actuaries.
    &lt;/div&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;(c)&amp;#160;Termination
    benefits&lt;/font&gt;&lt;/i&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Termination benefits are payable when employment is
    involuntarily terminated, or whenever an employee accepts
    voluntary termination in exchange for termination benefits. For
    the accounting treatment and timing recognition of the
    involuntarily termination benefits, the Company distinguishes
    between one-time termination benefit arrangements and on-going
    termination benefit arrangements. A one-time termination benefit
    arrangement is established by a termination plan and applies to
    a specified termination event or for a specified future period.
    One-time involuntary termination benefits are recognized as a
    liability when the termination plan meets certain criteria and
    has been communicated to employees. If employees are required to
    render future service in order to receive these one-time
    termination benefits, the liability is recognized ratably over
    the future service period. Termination benefits other than
    one-time termination benefits are termination benefits for which
    criteria for communication are not met but that are committed to
    by management, or termination obligations that are not
    specifically determined in a new and single plan. These
    termination benefits are all legal, contractual and past
    practice termination obligations to be paid to employees in case
    of involuntary termination. These termination benefits are
    accrued for at commitment date when it is probable that
    employees will be entitled to the benefits and the amount can be
    reasonably estimated.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    In case of special termination benefits proposed to encourage
    voluntary termination, the Company recognizes a provision for
    voluntary termination benefits at the date on which the employee
    irrevocably accepts the offer and the amount can be reasonably
    estimated.
    &lt;/div&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;(d)&amp;#160;Profit-sharing
    and bonus plans&lt;/font&gt;&lt;/i&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company recognizes a liability and an expense for bonuses
    and profit-sharing plans when it is contractually obliged or
    where there is a past practice that has created a constructive
    obligation.
    &lt;/div&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;(e)&amp;#160;Other
    long- term employee benefits&lt;/font&gt;&lt;/i&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company provides long-term employee benefits such as
    seniority awards in certain countries. The entitlement to these
    benefits is usually conditional on the employee completing a
    minimum service period. The expected costs of these benefits are
    accrued over the period of employment using an accounting
    methodology similar to that for defined benefit pension plans.
    Actuarial gains and losses arising from experience adjustments,
    and changes in actuarial assumptions, are charged or credited to
    earnings in the period of change. These obligations are valued
    annually with the assistance of independent qualified actuaries.
    &lt;/div&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;(f)&amp;#160;Share-based
    compensation&lt;/font&gt;&lt;/i&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company grants nonvested shares to senior executives,
    selected employees, members and professionals of the Supervisory
    Board. The shares are granted for free to employees and at their
    nominal value for the members and professionals of the
    Supervisory Board. The awards granted to employees contingently
    vest upon achieving certain market or performance conditions and
    upon completion of an average three-year service period. Shares
    granted to the Supervisory Board vest unconditionally along the
    same vesting period as employees but are not forfeited even if
    the service period is not completed. The Company measures the
    cost of share-based service awards based on the grant-date fair
    value of the award. That cost is recognized over the period
    during which an employee is required to provide service in
    exchange for the award or the requisite service period, usually
    the vesting period. Compensation is recognized only for the
    awards that ultimately vest. The compensation cost is recorded
    through earnings over the vesting period against equity, under
    &amp;#8220;Capital surplus&amp;#8221; in the consolidated statement of
    changes in equity. The compensation cost is calculated based on
    the number of awards expected to vest, which includes
    assumptions on the number of awards to be forfeited due to the
    employees&amp;#8217; failing to provide the service condition, and
    forfeitures following the non-completion of one or more
    performance conditions. When the stock-award plan contains a
    market condition feature, the market condition is reflected in
    the estimated fair value of the award at grant date.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Liabilities for the Company&amp;#8217;s portion of payroll taxes are
    not accrued for over the vesting period but are recognized at
    vesting, which is the event triggering the measurement of
    employee-related social charges, based on
    the intrinsic value of the share at vesting date, and payment of
    the social contributions in most of the Company&amp;#8217;s local tax
    jurisdictions.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Describes the entity's accounting policies for salaries, bonuses, incentive awards, postretirement and postemployment benefits granted to its employees, including share-based arrangements; describes its methodologies for measurement, and the bases for recognizing related assets and liabilities and recognizing and reporting compensation expense.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 123R
 -Paragraph 4, 9-15, A240

Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 132R
 -Paragraph 5, 6, 7, 9, 11, 12, 13

</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Employee benefits</Label></Row><Row><Id>19</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>stm_ShareCapitalPolicyTextBlock</ElementName><ElementPrefix>stm</ElementPrefix><IsBaseElement>false</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>Share capital.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table17 - stm:ShareCapitalPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.17&amp;#160;&amp;#8212;
    Share capital&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Ordinary shares are classified as equity. Incremental costs
    directly attributable to the issuance of new shares or options
    are shown in equity as a deduction, net of tax, from the
    proceeds.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Where the Company purchases its equity share capital (treasury
    shares), the consideration paid, including any directly
    attributable incremental costs (net of income taxes), is
    deducted from equity attributable to the Company&amp;#8217;s
    shareholders until the shares are cancelled, reissued or
    disposed of. Where such shares are subsequently sold or
    reissued, any consideration received net of directly
    attributable incremental transaction costs and the related
    income tax effect is included in equity.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Share capital.</ElementDefenition><ElementReferences>No authoritative reference available.</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Share capital</Label></Row><Row><Id>20</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>stm_ComprehensiveIncomeLossPolicyTextBlock</ElementName><ElementPrefix>stm</ElementPrefix><IsBaseElement>false</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>Comprehensive income (loss).</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table18 - stm:ComprehensiveIncomeLossPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.18&amp;#160;&amp;#8212;
    Comprehensive income (loss)&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Comprehensive income (loss) is defined as the change in equity
    of a business during a period except those changes resulting
    from investment by shareholders and distributions to
    shareholders. In the accompanying consolidated financial
    statements, &amp;#8220;Accumulated other comprehensive income
    (loss)&amp;#8221; primarily consists of temporary unrealized gains or
    losses on securities classified as
    &lt;font style="white-space: nowrap"&gt;available-for-sale,&lt;/font&gt;
    the unrealized gain (loss) on derivatives designated as cash
    flow hedge and the impact of recognizing the overfunded and
    underfunded status of defined benefit plans , all net of tax, as
    well as foreign currency translation adjustments.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Comprehensive income (loss).</ElementDefenition><ElementReferences>No authoritative reference available.</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Comprehensive income (loss)</Label></Row><Row><Id>21</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>us-gaap_EarningsPerSharePolicyTextBlock</ElementName><ElementPrefix>us-gaap</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>No definition available.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table19 - us-gaap:EarningsPerSharePolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.19&amp;#160;&amp;#8212;
    Earnings per share (&amp;#8220;EPS&amp;#8221;)&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Basic earnings per share are computed by dividing net income
    (loss) attributable to parent company shareholders by the
    weighted average number of common shares outstanding during the
    period. Diluted earnings per share are computed using the
    treasury stock method by dividing net income attributable to
    parent company shareholders (adding-back interest expense, net
    of tax effects, related to convertible debt if determined to be
    dilutive) by the weighted average number of common shares and
    potential common shares outstanding during the period. The
    weighted average number of shares used to compute diluted
    earnings per share include the incremental shares of common
    stock relating to stock-options granted, nonvested shares and
    convertible debt to the extent such incremental shares are
    dilutive. Nonvested shares with performance or market conditions
    are included in the computation of diluted earnings per share if
    their conditions have been satisfied at the balance sheet date
    and if the awards are dilutive. If all necessary conditions have
    not been satisfied by the end of the period, the number of
    nonvested shares included in the computation of the diluted EPS
    is based on the number of shares, if any, that would be issuable
    if the end of the reporting period were the end of the
    contingency period and if the result were dilutive.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Discloses the methodology and assumptions used to compute basic and diluted earnings (loss) per share for each class of common stock and participating security. Addresses all significant policy factors, including any antidilutive items that have been excluded from the computation and takes into account stock dividends, splits and reverse splits that occur after the balance sheet date of the latest reporting period but before the issuance of the financial statements.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 128
 -Paragraph 40
 -Subparagraph a

Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 128
 -Paragraph 6, 8-16, 60

</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Earnings per share ("EPS")</Label></Row><Row><Id>22</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>us-gaap_RevenueRecognitionPolicyTextBlock</ElementName><ElementPrefix>us-gaap</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>No definition available.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table20 - us-gaap:RevenueRecognitionPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.20&amp;#160;&amp;#8212;
    Revenue Recognition&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Revenue is recognized as follows:
    &lt;/div&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;Net
    sales&lt;/font&gt;&lt;/i&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Revenue from products sold to customers is recognized when all
    the following conditions have been met: (a)&amp;#160;persuasive
    evidence of an arrangement exists; (b)&amp;#160;delivery has
    occurred; (c)&amp;#160;the selling price is fixed or determinable;
    and (d)&amp;#160;collection is reasonably assured. This usually
    occurs at the time of shipment.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Consistent with standard business practice in the semiconductor
    industry, price protection is granted to distribution customers
    on their existing inventory of the Company&amp;#8217;s products to
    compensate them for declines in market prices. The ultimate
    decision to authorize a distributor refund remains fully within
    the control of the Company. The Company accrues a provision for
    price protection based on a rolling historical price trend
    computed on a monthly basis as a percentage of gross distributor
    sales. This historical price trend represents differences in
    recent months between the invoiced price and the final price to
    the distributor, adjusted if required, to accommodate a
    significant move in the current market price. The short
    outstanding inventory time period, visibility into the standard
    inventory product pricing (as opposed to certain customized
    products) and long distributor pricing history have enabled the
    Company to reliably estimate price protection provisions at
    period-end. The Company records the accrued amounts as a
    deduction of revenue at the time of the sale.
    &lt;/div&gt;
    &lt;!-- XBRL Pagebreak Begin --&gt;
    &lt;!-- END PAGE WIDTH --&gt;
    &lt;!-- PAGEBREAK --&gt;
    &lt;div style="margin-left: 0%"&gt;
    &lt;!-- BEGIN PAGE WIDTH --&gt;
    &lt;div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;
    &lt;font style="font-family: 'Times New Roman', Times"&gt;
    &lt;/font&gt;
    &lt;/b&gt;
    &lt;/div&gt;
    &lt;!-- XBRL Pagebreak End --&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company&amp;#8217;s customers occasionally return the
    Company&amp;#8217;s products for technical reasons. The
    Company&amp;#8217;s standard terms and conditions of sale provide
    that if the Company determines that products are non-conforming,
    the Company will repair or replace the non-conforming products,
    or issue a credit or rebate of the purchase price. Quality
    returns are not related to any technological obsolescence issues
    and are identified shortly after sale in customer quality
    control testing. Quality returns are usually associated with
    end-user customers, not with distribution channels. The Company
    provides for such returns when they are considered as probable
    and can be reasonably estimated. The Company records the accrued
    amounts as a reduction of revenue.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company&amp;#8217;s insurance policy relating to product
    liability only covers physical damage and other direct damages
    caused by defective products. The Company does not carry
    insurance against immaterial non consequential damages. The
    Company records a provision for warranty costs as a charge
    against cost of sales, based on historical trends of warranty
    costs incurred as a percentage of sales, which management has
    determined to be a reasonable estimate of the probable losses to
    be incurred for warranty claims in a period. Any potential
    warranty claims are subject to the Company&amp;#8217;s determination
    that the Company is at fault for damages, and such claims
    usually must be submitted within a short period following the
    date of sale. This warranty is given in lieu of all other
    warranties, conditions or terms expressed or implied by statute
    or common law. The Company&amp;#8217;s contractual terms and
    conditions limit its liability to the sales value of the
    products which gave rise to the claims.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    While the majority of the Company&amp;#8217;s sales agreements
    contain standard terms and conditions, the Company may, from
    time to time, enter into agreements that contain multiple
    elements or non-standard terms and conditions, which require
    revenue recognition judgments. Where multiple elements exist in
    an arrangement, the arrangement is allocated to the different
    elements based upon verifiable objective evidence of the fair
    value of the elements for periods prior to 2008. In 2009, the
    Company early adopted new U.S.&amp;#160;GAAP guidance for multiple
    deliverable arrangements and allocation has been based since
    that date on verifiable objective evidence, third party evidence
    or management&amp;#8217;s best estimate of selling price of the
    separable deliverables. These arrangements generally do not
    include performance-, cancellation-, termination- or refund-type
    provisions.
    &lt;/div&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;Other
    revenues&lt;/font&gt;&lt;/i&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Other revenues consist of license revenue, service revenue
    related to transferring licenses, patent royalty income, sale of
    scrap materials and manufacturing by-products.
    &lt;/div&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;Funding&lt;/font&gt;&lt;/i&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company receives funding mainly from governmental agencies
    and income is recognized when all contractual conditions for
    receipt of these funds are fulfilled. The Company&amp;#8217;s primary
    sources for government funding are French, Italian, other
    European Union (&amp;#8220;EU&amp;#8221;) governmental entities and
    Singapore agencies. Such funding is generally provided to
    encourage research and development activities, industrialization
    and local economic development. The conditions for receipt of
    government funding may include eligibility restrictions,
    approval by EU authorities, annual budget appropriations,
    compliance with European Commission regulations, as well as
    specifications regarding objectives and results. Certain
    specific contracts contain obligations to maintain a minimum
    level of employment and investment during a certain period of
    time. There could be penalties if these objectives are not
    fulfilled. Other contracts contain penalties for late deliveries
    or for breach of contract, which may result in repayment
    obligations. The Company&amp;#8217;s revenue recognition policy,
    funding related to these contracts is recorded when the
    conditions required by the contracts are met. The Company&amp;#8217;s
    funding programs are classified under three general categories:
    funding for research and development activities, capital
    investment, and loans.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Funding for research and development activities is the most
    common form of funding that the Company receives. Public funding
    for research and development is recorded as &amp;#8220;Other income
    and expenses, net&amp;#8221; in the Company&amp;#8217;s consolidated
    statements of income. Public funding for research and
    development is recognized ratably as the related costs are
    incurred once the agreement with the respective governmental
    agency has been signed and all applicable conditions are met.
    Furthermore, following the enactment of the French Finance Act
    for 2008, which included several changes to the research tax
    credit regime (&amp;#8220;Cr&amp;#233;dit Imp&amp;#244;t Recherche&amp;#8221;),
    French research tax credits are deemed to be grants in
    substance. Unlike other research and development funding, the
    amounts to be received are determinable in advance and accruable
    as the funded research expenditures are made. They are thus
    reported as a reduction of research and development expenses.
    The research tax credits are to be reimbursed in cash by the
    French tax authorities within three years in case they are not
    deducted from income tax payable during this period of time.
    &lt;/div&gt;
    &lt;!-- XBRL Pagebreak Begin --&gt;
    &lt;/div&gt;
    &lt;!-- END PAGE WIDTH --&gt;
    &lt;!-- PAGEBREAK --&gt;
    &lt;div style="margin-left: 0%"&gt;
    &lt;!-- BEGIN PAGE WIDTH --&gt;
    &lt;div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;
    &lt;font style="font-family: 'Times New Roman', Times"&gt;
    &lt;/font&gt;
    &lt;/b&gt;
    &lt;/div&gt;
    &lt;!-- XBRL Pagebreak End --&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Capital investment funding is recorded as a reduction of
    &amp;#8220;Property, plant and equipment, net&amp;#8221; and is recognized
    in the Company&amp;#8217;s consolidated statements of income
    according to the depreciation charges of the funded assets
    during their useful lives. The Company also receives capital
    funding in Italy, which is recovered through the reduction of
    various governmental liabilities, including income taxes,
    value-added tax and employee-related social charges.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Funding receivables are reported as non-current assets unless
    cash settlement features of the receivables evidence that
    collection is expected within one year. Long-term receivables
    that do not present any tax attribute or legal restriction are
    reflected in the balance sheet at their discounted net present
    value. The subsequent accretion of the discount is recorded as
    non-operating income in &amp;#8220;Interest income (expense),
    net&amp;#8221;.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company receives certain loans, mainly related to large
    capital investment projects, at preferential interest rates. The
    Company records these loans as debt in its consolidated balance
    sheet.
    &lt;/div&gt;
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Describes an entity's accounting policy for revenue recognition. If the entity has different policies for different types of revenue transactions, the policy for each material type of transaction should be disclosed. If a sales transaction has multiple element arrangements (for example, delivery of multiple products, services or the rights to use assets) the disclosure may indicate the accounting policy for each unit of accounting as well as how units of accounting are determined and valued. The disclosure may encompass important judgment as to appropriateness of principles related to recognition of revenue. The disclosure also may indicate the entity's treatment of any unearned or deferred revenue that arises from the transaction.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher SEC
 -Name Staff Accounting Bulletin (SAB)
 -Number Topic 13
 -Section B
 -Paragraph Question 1

Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher AICPA
 -Name Accounting Principles Board Opinion (APB)
 -Number 22
 -Paragraph 8, 12, 13

</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Revenue Recognition</Label></Row><Row><Id>23</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>us-gaap_AdvertisingCostsPolicyTextBlock</ElementName><ElementPrefix>us-gaap</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>No definition available.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table21 - us-gaap:AdvertisingCostsPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.21&amp;#160;&amp;#8212;
    Advertising costs&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Advertising costs are expensed as incurred and are recorded as
    selling, general and administrative expenses. Advertising
    expenses for 2010, 2009 and 2008 were $11&amp;#160;million,
    $9&amp;#160;million and $10&amp;#160;million respectively.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Describes an entity's accounting policy for advertising costs. For those costs that cannot be capitalized, discloses whether such costs are expensed as incurred or the first period in which the advertising takes place. For direct response advertising costs that are capitalized, describes those assets and the accounting policy used, including a description of the qualifying activity, the types of costs capitalized and the related amortization period. An entity also may disclose its accounting policy for cooperative advertising arrangements.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher AICPA
 -Name Statement of Position (SOP)
 -Number 93-7
 -Paragraph 49

Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Emerging Issues Task Force (EITF)
 -Number 02-16
 -Paragraph 6

</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Advertising costs</Label></Row><Row><Id>24</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>stm_ResearchAndDevelopmentExpendituresPolicyTextBlock</ElementName><ElementPrefix>stm</ElementPrefix><IsBaseElement>false</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>Research and Development Expenditures Policy.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table22 - stm:ResearchAndDevelopmentExpendituresPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.22&amp;#160;&amp;#8212;
    Research and development&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Research and development expenses include costs incurred by the
    Company, the Company&amp;#8217;s share of costs incurred by other
    research and development interest groups, and costs associated
    with co-development contracts. Research and development expenses
    do not include marketing design center costs, which are
    accounted for as selling expenses and process engineering,
    pre-production or process transfer costs which are recorded as
    cost of sales. Research and development costs are charged to
    expense as incurred. The amortization expense recognized on
    technologies and licenses purchased by the Company from third
    parties to facilitate the Company&amp;#8217;s research is recorded as
    research and development expenses. Research and development
    expenses also include charges originated from purchase
    accounting, such as in-process research and development
    recognized on business combinations concluded before
    January&amp;#160;1, 2009 and amortization of acquired intangible
    assets. Research and development expenses are reported net of
    research tax credits received in the French jurisdiction, as
    described in Note&amp;#160;2.20.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Research and Development Expenditures Policy.</ElementDefenition><ElementReferences>No authoritative reference available.</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Research and development</Label></Row><Row><Id>25</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>stm_StartUpAndPhaseOutCostsPolicyTextBlock</ElementName><ElementPrefix>stm</ElementPrefix><IsBaseElement>false</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>Start Up and Phase Out Costs Policy.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table23 - stm:StartUpAndPhaseOutCostsPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.23&amp;#160;&amp;#8212;
    &lt;font style="white-space: nowrap"&gt;Start-up&lt;/font&gt; and
    phase-out costs&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    &lt;font style="white-space: nowrap"&gt;Start-up&lt;/font&gt;
    costs represent costs incurred in the
    &lt;font style="white-space: nowrap"&gt;start-up&lt;/font&gt; and
    testing of the Company&amp;#8217;s new manufacturing facilities,
    before reaching the earlier of a minimum level of production or
    &lt;font style="white-space: nowrap"&gt;6-months&lt;/font&gt;
    after the fabrication line&amp;#8217;s quality qualification.
    &lt;font style="white-space: nowrap"&gt;Start-up&lt;/font&gt;
    costs are included in &amp;#8220;Other income and expenses, net&amp;#8221;
    in the consolidated statements of income. Similarly, phase-out
    costs for facilities during the closing stage are also included
    in &amp;#8220;Other income and expenses, net&amp;#8221; in the
    consolidated statements of income. The costs of phase-outs are
    associated with the latest stages of facilities closure when the
    relevant production volumes become immaterial.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Start Up and Phase Out Costs Policy.</ElementDefenition><ElementReferences>No authoritative reference available.</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Start-up and phase-out costs</Label></Row><Row><Id>26</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>stm_MarketableSecuritiesPolicyTextBlock</ElementName><ElementPrefix>stm</ElementPrefix><IsBaseElement>false</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>Marketable Securities Policy.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table24 - stm:MarketableSecuritiesPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.24&amp;#160;&amp;#8212;
    Financial assets&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company did not hold at December&amp;#160;31, 2010 and 2009 any
    financial assets classified as
    &lt;font style="white-space: nowrap"&gt;held-to-maturity&lt;/font&gt;
    or financial assets for which the Company would have elected to
    apply the fair value option. Consequently, the Company
    classified its financial assets in the following categories:
    &lt;font style="white-space: nowrap"&gt;held-for-trading&lt;/font&gt;
    and
    &lt;font style="white-space: nowrap"&gt;available-for-sale.&lt;/font&gt;
    The classification depends on the purpose for which the
    financial assets were acquired. Management determines the
    classification of its financial assets at initial recognition.
    Unlisted equity securities with no readily determinable fair
    value are carried at cost, as described in Note&amp;#160;2.13. They
    are neither classified as
    &lt;font style="white-space: nowrap"&gt;held-for-trading&lt;/font&gt;
    nor as
    &lt;font style="white-space: nowrap"&gt;available-for-sale.&lt;/font&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Purchases and sales of financial assets are recognized on the
    trade date&amp;#160;&amp;#8212; the date on which the Company commits to
    purchase or sell the asset. Financial assets classified as
    &lt;font style="white-space: nowrap"&gt;available-for-sale&lt;/font&gt;
    and financial assets classified as
    &lt;font style="white-space: nowrap"&gt;held-for-trading&lt;/font&gt;
    are initially recognized and subsequently carried at fair value.
    Financial assets are derecognized when the rights to receive
    cash flows from the investments have expired or have been
    transferred and the Company has transferred substantially all
    risks and rewards of ownership; the relevant gain (loss) is
    reported as a non-operating element on the consolidated
    statements of income on the line &amp;#8220;Gain (loss) on financial
    instruments, net&amp;#8221;.
    &lt;/div&gt;
    &lt;!-- XBRL Pagebreak Begin --&gt;
    &lt;!-- END PAGE WIDTH --&gt;
    &lt;!-- PAGEBREAK --&gt;
    &lt;div style="margin-left: 0%"&gt;
    &lt;!-- BEGIN PAGE WIDTH --&gt;
    &lt;div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;
    &lt;font style="font-family: 'Times New Roman', Times"&gt;
    &lt;/font&gt;
    &lt;/b&gt;
    &lt;/div&gt;
    &lt;!-- XBRL Pagebreak End --&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The fair values of quoted debt and equity securities are based
    on current market prices. If the market for a financial asset is
    not active and if no observable market price is obtainable, the
    Company measures fair value by using assumptions and estimates.
    These assumptions and estimates include the use of recent
    arm&amp;#8217;s length transactions; for debt securities without
    available observable market price, the Company establishes fair
    value by reference to publicly available indices of securities
    with the same rating and comparable underlying collaterals or
    industries&amp;#8217; exposure, which the Company believes
    approximates the orderly exit value in the current market. In
    measuring fair value, the Company makes maximum use of market
    inputs and relies as little as possible on entity-specific
    inputs.
    &lt;/div&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;&lt;font style="white-space: nowrap"&gt;Held-for-trading&lt;/font&gt;
    financial assets&lt;/font&gt;&lt;/i&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    A financial asset is classified in this category if it is a
    security acquired principally for the purpose of selling in the
    short term or if it is a derivative instrument not designated as
    a hedge. Financial assets in this category are classified as
    current assets when they are expected to be realized within
    twelve months of the balance sheet date.
    &lt;font style="white-space: nowrap"&gt;Marked-to-market&lt;/font&gt;
    gains or losses arising from changes in the fair value of
    trading financial assets are reported in the consolidated
    statements of income within &amp;#8220;Other income and expenses,
    net&amp;#8221; in the period in which they arise, when the
    transactions for such instruments occur within the
    Company&amp;#8217;s operating activities, as it is the case for
    trading derivatives that do not qualify as hedging instruments,
    as described in Note&amp;#160;2.25. Gains and losses arising from
    changes in the fair value of financial assets not related to the
    operating activities of the Company, such as discontinued fair
    value hedge on interest rate risk exposure, are presented in the
    consolidated statements of income as a non-operating element
    within &amp;#8220;Gain (loss) on financial instruments, net&amp;#8221; in
    the period in which they arise.
    &lt;/div&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;&lt;font style="white-space: nowrap"&gt;Available-for-sale&lt;/font&gt;
    financial assets&lt;/font&gt;&lt;/i&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    &lt;font style="white-space: nowrap"&gt;Available-for-sale&lt;/font&gt;
    financial assets are non-derivative financial assets that are
    either designated in this category or not classified as
    &lt;font style="white-space: nowrap"&gt;held-for-trading.&lt;/font&gt;
    They are included in current assets when they represent
    investments of funds available for current operations or when
    management intends to dispose of the securities within twelve
    months of the balance sheet date.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Changes in the fair value, including declines determined to be
    temporary, of securities classified as
    &lt;font style="white-space: nowrap"&gt;available-for-sale&lt;/font&gt;
    are recognized as a separate component of &amp;#8220;Accumulated
    other comprehensive income (loss)&amp;#8221; in the consolidated
    statements of changes in equity. The cumulative loss or gain is
    measured as the difference between the value at initial
    recognition and the current fair value, less any impairment loss
    on that financial asset previously recognized in earnings.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company assesses at each balance sheet date whether there is
    objective evidence that a financial asset or group of financial
    assets classified as
    &lt;font style="white-space: nowrap"&gt;available-for-sale&lt;/font&gt;
    is impaired. When equity securities classified as available for
    sale are determined to be
    &lt;font style="white-space: nowrap"&gt;other-than-temporarily&lt;/font&gt;
    impaired, the accumulated fair value adjustments previously
    recognized in equity are reported as a non-operating element on
    the consolidated statements of income on the line
    &amp;#8220;Other-than- temporary impairment charge and realized
    losses on financial assets&amp;#8221;. For debt securities, if a
    credit loss exists, but the Company does not intend to sell the
    impaired security and is not more likely than not to be required
    to sell before recovery, the impairment is separated into the
    estimated amount relating to credit loss, and the amount
    relating to all other factors. Only the estimated credit loss
    amount is recognized currently in earnings on the line
    &lt;font style="white-space: nowrap"&gt;&amp;#8220;Other-than-temporary&lt;/font&gt;
    impairment charge and realized losses on financial assets&amp;#8221;,
    with the remainder of the loss amount recognized in accumulated
    other comprehensive income (loss). Impairment losses recognized
    in the consolidated statements of income are not reversed
    through earnings.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    When securities classified as available for sale are sold, the
    accumulated fair value adjustments previously recognized in
    equity are reported as a non-operating element on the
    consolidated statements of income on the line &amp;#8220;Gain (loss)
    on financial assets&amp;#8221;. The cost of securities sold and the
    amount reclassified out of accumulated other comprehensive
    income into earnings is determined based on the specific
    identification of the securities sold.
    &lt;/div&gt;
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Marketable Securities Policy.</ElementDefenition><ElementReferences>No authoritative reference available.</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Financial assets</Label></Row><Row><Id>27</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>us-gaap_DerivativesPolicyTextBlock</ElementName><ElementPrefix>us-gaap</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>No definition available.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table25 - us-gaap:DerivativesPolicyTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.25&amp;#160;&amp;#8212;
    Derivative financial instruments and hedging
    activities&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    Derivative financial instruments are initially recognized on the
    date a derivative contract is entered into and are subsequently
    measured at their fair value. The method of recognizing the gain
    or loss resulting from the derivative
    instrument depends on whether the derivative is designated as a
    hedging instrument, and if so, the nature of the hedge
    transaction. The Company has designated certain derivatives as
    either:
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    (a)&amp;#160;hedges of a particular risk associated with a highly
    probable forecasted transaction (cash flow hedge);&amp;#160;or
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    (b)&amp;#160;hedges of the fair value of recognized assets or
    liabilities (fair value hedge).
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company documents, at inception of the transaction, the
    relationship between hedging instruments and hedged items, as
    well as its risk management objectives and strategy for
    undertaking various hedging transactions. The Company also
    documents its assessment, both at hedge inception and on an
    ongoing basis, of whether the derivatives that are used in
    hedging transactions are highly effective in offsetting changes
    in fair values or cash flows of hedged items. Derivative
    instruments that are not designated as hedges are classified as
    &lt;font style="white-space: nowrap"&gt;held-for-trading&lt;/font&gt;
    financial assets, as described in Note&amp;#160;2.24.
    &lt;/div&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;Derivative
    financial instruments classified as held for trading&lt;/font&gt;&lt;/i&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company conducts its business on a global basis in various
    major international currencies. As a result, the Company is
    exposed to adverse movements in foreign currency exchange rates.
    The Company enters into foreign currency forward contracts and
    currency options to reduce its exposure to changes in exchange
    rates and the associated risk arising from the denomination of
    certain assets and liabilities in foreign currencies at the
    Company&amp;#8217;s subsidiaries. These instruments do not qualify as
    hedging instruments as per U.S.&amp;#160;GAAP guidance, and are
    &lt;font style="white-space: nowrap"&gt;marked-to-market&lt;/font&gt;
    at each period-end with the associated changes in fair value
    recognized in &amp;#8220;Other income and expenses, net&amp;#8221; in the
    consolidated statements of income, as described in
    Note&amp;#160;2.24.
    &lt;/div&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;Cash Flow
    Hedge&lt;/font&gt;&lt;/i&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    To reduce its exposure to U.S.&amp;#160;dollar exchange rate
    fluctuations, the Company hedges certain Euro-denominated
    forecasted transactions that cover at reporting date a large
    part of its research and development, selling, general and
    administrative expenses as well as a portion of its front-end
    manufacturing costs of semi-finished goods through the use of
    currency forward contracts and currency options, including
    collars. The Company also hedges certain Swedish
    krona-denominated forecasted transactions that cover at
    reporting date a large part of its future research and
    development expenses through the use of currency forward
    contracts.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    As part of its ongoing investing and financing activities, the
    Company may from time to time enter into certain derivative
    transactions that are designated and qualify for cash flow
    hedge. In 2010, the Company entered into structured collar
    hedging transactions to cover the highly probable sale of Micron
    Technology Inc. shares received as consideration in the sale of
    Numonyx equity investment, as described in Note&amp;#160;12.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    These derivative instruments are designated and qualify for cash
    flow hedge at inception of the contract and on an on-going basis
    over the duration of the hedge relationship. They are reflected
    at their fair value in the consolidated balance sheets. The
    criteria for designating a derivative as a hedge include the
    instrument&amp;#8217;s effectiveness in risk reduction and, in most
    cases, a
    &lt;font style="white-space: nowrap"&gt;one-to-one&lt;/font&gt;
    matching of the derivative instrument to its underlying
    transaction with the critical terms of the hedging instrument
    matching the terms of the hedged forecasted transaction. This
    enables the Company to conclude that changes in cash flows
    attributable to the risk being hedged are expected to be
    completely offset by the hedging derivatives.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    For derivative instruments designated as cash flow hedge, the
    gain or loss from the effective portion of the hedge is reported
    as a component of &amp;#8220;Accumulated other comprehensive income
    (loss)&amp;#8221; in the consolidated statements of changes in equity
    and is reclassified into earnings in the same period in which
    the hedged transaction affects earnings, and within the same
    consolidated statements of income line item as the impact of the
    hedged transaction. For these derivatives, ineffectiveness
    appears if the cumulative gain or loss on the derivative hedging
    instrument exceeds the cumulative change in the expected future
    cash flows on the hedged transactions. Effectiveness on
    transactions hedged through purchased options is measured on the
    full fair value of the option, including time value. However, on
    certain specific combined options (contingent zero-cost
    collars), the contingency premium is excluded from effectiveness
    measurement and recorded immediately in earnings, as described
    in Note&amp;#160;27.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    When a forecasted transaction is no longer expected to occur,
    the cumulative gain or loss that was reported in
    &amp;#8220;Accumulated other comprehensive income (loss)&amp;#8221; in the
    consolidated statements of changes in equity is immediately
    transferred to the consolidated statements of income within
    &amp;#8220;Other income and expenses, net&amp;#8221; if the de-designated
    derivative relates to operating activities. If upon
    de-designation, the derivative instrument is held
    in view to be sold with no direct relation with current
    operating activities, changes in the fair value of the
    derivative instrument following de-designation are reported as a
    non-operating element on the line &amp;#8220;Gain (loss) on financial
    instruments, net&amp;#8221; in the consolidated statements of income.
    If the derivative is still related to operating activities, the
    changes in fair value subsequent to the discontinuance continue
    to be reported within &amp;#8220;Other income and expenses, net&amp;#8221;
    in the consolidated statements of income, as described in
    Note&amp;#160;2.24.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    In order to optimize its hedging strategy, the Company can be
    required to cease the designation of certain cash flow hedge
    transactions and enter into a new designated cash flow hedge
    transaction with the same hedged forecasted transaction but with
    a new hedging instrument. De-designation and re-designation are
    formally authorized and limited to the de-designation of
    purchased currency options with re-designation of the cash flow
    hedge through subsequent forward contract when the
    Euro/U.S.&amp;#160;dollar exchange rate is decreasing, the intrinsic
    value of the option is nil, the hedged transaction is still
    probable of occurrence and meets at re-designation date all
    criteria for hedge accounting. At de-designation date, the net
    derivative gain or loss related to the de-designated cash flow
    hedge deferred in &amp;#8220;Accumulated other comprehensive income
    (loss)&amp;#8221; in the consolidated statements of changes in equity
    continues to be reported in net equity. From de-designation
    date, the change in fair value of the de-designated hedging item
    is recognized each period in the consolidated statements of
    income on the line &amp;#8220;Other income and expenses, net&amp;#8221;,
    as described in Note&amp;#160;2.24. The net derivative gain or loss
    related to the de-designated cash flow hedge deferred in net
    equity is reclassified to earnings in the same period in which
    the hedged transaction affects earnings, and within the same
    consolidated statements of income line item as the impact of the
    hedged transaction.
    &lt;/div&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;Fair
    Value Hedges&lt;/font&gt;&lt;/i&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    The Company entered in 2006 into cancellable swaps to hedge the
    fair value of a portion of the convertible bonds due 2016
    carrying a fixed interest rate. The cancellable swaps were sold
    in 2009. Until November 2008 the derivative instruments met the
    criteria for designation as a fair value hedge. These criteria
    included evaluating whether the instrument was highly effective
    at offsetting changes in the fair value of the hedged item
    attributable to the hedged risk. Hedged effectiveness was
    assessed on both a prospective and retrospective basis at each
    reporting period. Any ineffectiveness of the hedge relationship
    was recorded as a gain or loss on derivatives as a component of
    &amp;#8220;Other income and expenses, net&amp;#8221;, in the consolidated
    statements of income. At the point that the cancellable swaps no
    longer met the criteria for designation as a fair value hedge,
    the swaps continued to be marked to fair value but not the
    underlying portion of the convertible bonds. The changes in the
    fair value of the swaps until their sale were recognized on the
    line &amp;#8220;Gain (loss) on financial instruments, net&amp;#8221; of
    the consolidated statement of income while the associated bonds
    were no longer marked to fair value, the difference between fair
    value and amortized costs being amortized to earnings as a
    component of interest expense.
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Describes an entity's accounting policies for its derivative instruments and hedging activities. Disclosure may include: (1) Each method used to account for derivative financial instruments and derivative commodity instruments ("derivatives"); (2) the types of derivatives accounted for under each method; (3) the criteria required to be met for each accounting method used, including a discussion of the criteria required to be met for hedge or deferral accounting and accrual or settlement accounting (for example: whether and how risk reduction, correlation, designation, and effectiveness tests are applied); (4) the accounting method used if the criteria specified for hedge accounting are not met; (5) the method used to account for termination of derivatives designated as hedges or derivatives used to affect directly or indirectly the terms, fair values, or cash flows of a designated item; (6) the method used to account for derivatives when the designated item matures, is sold, is extinguished, or is terminated. In addition, the method used to account for derivatives designated to an anticipated transaction, when the anticipated transaction is no longer likely to occur; and (7) where and when derivatives, and their related gains (losses) are reported in the statement of financial position, cash flows, and results of operations and (8) an accounting policy decision to offset fair value amounts with counterparties. An entity should also consider describing its embedded derivatives, and the method(s) used to determine the fair values of derivatives and any significant assumptions used in such valuations.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 133
 -Paragraph 44

Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher SEC
 -Name Regulation S-X (SX)
 -Number 210
 -Section 08
 -Paragraph n
 -Article 4

Reference 3: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name FASB Interpretation (FIN)
 -Number 39
 -Paragraph 10

</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Derivative financial instruments and hedging activities</Label></Row><Row><Id>28</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>us-gaap_ScheduleOfNewAccountingPronouncementsAndChangesInAccountingPrinciplesTextBlock</ElementName><ElementPrefix>us-gaap</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>No definition available.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>
    &lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged Accounting Policy: STM-20101231_note2_accounting_policy_table26 - us-gaap:ScheduleOfNewAccountingPronouncementsAndChangesInAccountingPrinciplesTextBlock--&gt;
    &lt;div align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times"&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;2.26&amp;#160;&amp;#8212;
    Recent accounting pronouncements&lt;/font&gt;&lt;/b&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;(a)&amp;#160;Accounting
    pronouncements effective in 2010&lt;/font&gt;&lt;/i&gt;
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    In June 2009, the FASB issued amendments to the guidance on
    accounting for transfers of financial assets and the guidance on
    consolidation of variable interest entities. The amendment
    regarding accounting for transfers of financial assets includes:
    (i)&amp;#160;eliminating the qualifying special-purpose entity
    (&amp;#8220;QSPE&amp;#8221;) concept; (ii)&amp;#160;a new unit of account
    definition that must be met for transfers of portions of
    financial assets to be eligible for sale accounting;
    (iii)&amp;#160;clarifications and changes to the derecognition
    criteria for a transfer to be accounted for as a sale;
    (iv)&amp;#160;a change to the amount of recognized gain or loss on a
    transfer of financial assets accounted for as a sale when
    beneficial interests are received by the transferor, and
    (v)&amp;#160;extensive new disclosures. The amendment regarding
    consolidation of variable interest entities includes:
    (i)&amp;#160;the elimination of exemption for QSPEs; (ii)&amp;#160;a new
    approach for determining who should consolidate a
    variable-interest entity and (iii)&amp;#160;changes to when it is
    necessary to reassess who should consolidate a variable-interest
    entity. Both amendments are effective as of the beginning of an
    entity&amp;#8217;s first fiscal year beginning after
    November&amp;#160;15, 2009 and for interim periods within that first
    year. Earlier adoption was prohibited. The Company adopted the
    amendments as of January&amp;#160;1, 2010. The new guidance did not
    have any significant impact on the Company&amp;#8217;s financial
    position or results of operations. See further information on
    variable interest entities in Notes&amp;#160;8 and 12.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    In September 2009, the FASB issued final guidance on measuring
    the fair value of liabilities. It amends the Codification
    primarily as follows: (i)&amp;#160;it sets forth the types of
    valuation techniques to be used to value a liability when a
    quoted price in an active market is not available;
    (ii)&amp;#160;clarifies that when estimating the fair value of a
    liability,
    a reporting entity is not required to include a separate input
    or adjustment to other inputs relating to the existence of a
    restriction that prevents the transfer of the liability;
    (iii)&amp;#160;clarifies that both a quoted price in an active
    market for the identical liability at the measurement date and
    the quoted price for the identical liability when traded as an
    asset in an active market when no adjustments to the quoted
    price of the asset are required are Level&amp;#160;1 fair value
    measurements. The amended guidance is effective for the first
    reporting period beginning after issuance. The Company adopted
    the amendment as of January&amp;#160;1, 2010. The new guidance did
    not have any significant impact on the Company&amp;#8217;s financial
    position or results of operations.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    In January 2010, the FASB issued new guidance for fair value
    measurements which requires more robust disclosures regarding
    (i)&amp;#160;different classes of assets and liabilities measured at
    fair value, (ii)&amp;#160;valuation techniques and inputs used,
    (iii)&amp;#160;activities within Level&amp;#160;3 fair value hierarchy
    measurements (i.e. purchases and sales), and (iv)&amp;#160;transfers
    between Levels&amp;#160;1, 2, and 3 of the fair value hierarchy. The
    new disclosures are effective for the first interim or annual
    reporting period beginning after December&amp;#160;15, 2009, except
    for the roll forward of Level&amp;#160;3 assets and liabilities
    which will be effective for annual reporting periods beginning
    after December&amp;#160;15, 2010. The Company adopted the required
    disclosures of this new guidance as of January&amp;#160;1, 2010. The
    required disclosures can be found in Note&amp;#160;27.
    &lt;/div&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    In July 2010, the FASB issued new guidance on disclosures about
    the credit quality of financing receivables and the allowance
    for credit losses. It amends the Codification to provide
    information in order to understand the nature of credit risk in
    a company&amp;#8217;s financing receivables, how that risk is
    analyzed in determining the related allowance for credit losses
    and changes to the allowance during the reporting period. It
    defines a finance receivable as a contractual right to receive
    money on demand or in fixed or determinable dates that is
    recognized as an asset in the entity&amp;#8217;s statement of
    financial position but excludes from its scope certain financial
    instruments such as trade accounts receivable with contractual
    maturities of one year or less that arose from the sale of goods
    and services. A significant change from the current disclosure
    requirements is that the information must be provided for both
    the finance receivables and the related allowance for credit
    losses at disaggregated levels. The new disclosure guidance
    introduces two new defined terms that will govern the level of
    disaggregation: a portfolio segment, defined as the level at
    which an entity determines its allowance for credit losses, and
    a class of financing receivable, defined as a group of finance
    receivables determined on the basis of their initial measurement
    attribute. The guidance is effective for the Company for both
    interim and annual reporting periods ending December&amp;#160;15,
    2010. The Company applied these new disclosure requirements to
    the consolidated financial statements for the year ended
    December&amp;#160;31, 2010 and such requirements did not have any
    impact on the notes to the consolidated financial statements.
    &lt;/div&gt;
    &lt;div style="margin-top: 12pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent; text-align: left"&gt;
    &lt;tr&gt;
    &lt;td width="3%"&gt;&lt;/td&gt;
    &lt;td width="97%"&gt;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="top"&gt;
    &lt;td&gt;
    &lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;(b)&amp;#160;&lt;/font&gt;&lt;/i&gt;
    &lt;/td&gt;
    &lt;td&gt;
    &lt;i&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;Accounting
    pronouncements expected to impact the Company&amp;#8217;s operations
    that are not yet effective and have not been adopted early by
    the Company&lt;/font&gt;&lt;/i&gt;
    &lt;/td&gt;
    &lt;/tr&gt;
    &lt;/table&gt;
    &lt;div style="margin-top: 6pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"&gt;
    In December 2010, the FASB issued amendment to the guidance on
    testing for goodwill impairment. The amendment modifies Step 1
    of the goodwill impairment test for reporting units with zero or
    negative carrying amounts, for which the entity is required to
    assess whether it is more likely than not that the reporting
    units&amp;#8217; goodwill is impaired. If the entity determines that
    it is more likely than not that the goodwill of one or more of
    its reporting units is impaired, the entity should perform Step
    2 of the goodwill impairment test for those reporting units. The
    amendment is effective for fiscal years beginning after
    December&amp;#160;15, 2010. Earlier adoption is not permitted. The
    Company will adopt the amendment as of January&amp;#160;1, 2011 and
    does not expect any significant impact on the Company&amp;#8217;s
    financial position and results of operations.
    &lt;/div&gt;
    &lt;!-- XBRL Pagebreak Begin --&gt;
    &lt;!-- END PAGE WIDTH --&gt;
    &lt;!-- PAGEBREAK --&gt;
    &lt;div style="margin-left: 0%"&gt;
    &lt;!-- BEGIN PAGE WIDTH --&gt;
    &lt;div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"&gt;
    &lt;b&gt;
    &lt;font style="font-family: 'Times New Roman', Times"&gt;
    &lt;/font&gt;
    &lt;/b&gt;
    &lt;/div&gt;
    &lt;!-- XBRL Pagebreak End --&gt;
    &lt;div style="margin-top: 18pt; font-size: 1pt"&gt;&amp;#160;
    &lt;/div&gt;
    &lt;/div&gt;
    &lt;/div&gt;
  </NonNumbericText><NonNumericTextHeader>&lt;!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --&gt;
    &lt;!-- Begin Block Tagged</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Represents disclosure of any changes in an accounting principle, including a change from one generally accepted accounting principle to another generally accepted accounting principle when there are two or more generally accepted accounting principles that apply or when the accounting principle formerly used is no longer generally accepted. Also disclose any change in the method of applying an accounting principle, or any change in an accounting principle required by a new pronouncement in the unusual instance that a new pronouncement does not include specific transition provisions.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 154
 -Paragraph 2, 17, 18

Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher AICPA
 -Name Accounting Principles Board Opinion (APB)
 -Number 28
 -Paragraph 23, 24

Reference 3: http://www.xbrl.org/2003/role/presentationRef
 -Publisher SEC
 -Name Regulation S-X (SX)
 -Number 210
 -Section 01
 -Paragraph b
 -Subparagraph 6
 -Article 10

</ElementReferences><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Recent accounting pronouncements</Label></Row></Rows><Footnotes /><NumberOfCols>1</NumberOfCols><NumberOfRows>27</NumberOfRows><ReportName>Accounting Policies (Policies)</ReportName><MonetaryRoundingLevel>UnKnown</MonetaryRoundingLevel><SharesRoundingLevel>UnKnown</SharesRoundingLevel><PerShareRoundingLevel>UnKnown</PerShareRoundingLevel><ExchangeRateRoundingLevel>UnKnown</ExchangeRateRoundingLevel><HasCustomUnits>false</HasCustomUnits><SharesShouldBeRounded>true</SharesShouldBeRounded></InstanceReport>
