康寧 (GLW) 2012 Q2 法說會逐字稿

Ladies and gentlemen thank you for standing by and welcome to the Corning Incorporated second quarter 2012 earnings results. Is my pleasure to turn the call over to Ann Nicholson, Director of Investor Relations. Please, go ahead.

女士們、先生們，感謝各位稍候並歡迎參加康寧公司（Corning Incorporated）2012 年第二季財報結果電話會議。我很高興把電話會議交給投資人關係總監 Ann Nicholson。請開始。

Thank you John and good morning. Welcome to Corning's second quarter conference call. Jim Flaws, Vice Chairman and Chief Financial Officer, will start the call was some prepared remarks. Before Jim starts, I'd like to remind you that today's remarks contain forward-looking statements that fall within the meaning of the Private Securities Litigation Reform Act of 1995. They involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially. These risks are detailed in the Company's SEC reports.

謝謝你，John，大家早安。歡迎參加康寧第二季電話會議。副董事長兼財務長 Jim Flaws 將以一些事先準備的談話開始本次會議。在 Jim 開始之前，我想提醒各位，今天的談話包含前瞻性陳述，屬於 1995 年《私人證券訴訟改革法》（Private Securities Litigation Reform Act of 1995）所界定的範圍。其中涉及多項風險、不確定性及其他因素，可能導致實際結果出現重大差異。這些風險已在公司向 SEC 提交的報告中詳述。

Now, I would like to turn the call over to Jim Flaws.

現在，我想把電話會議交給 Jim Flaws。

Thanks Ann and good morning everybody.

謝謝 Ann，大家早安。

Now before I turn to our comments on the quarter and the outlook, I actually have an organizational announcement. As some of you know, Ken Sofio, our Vice President, Investor Relations, has been working a reduced schedule since March. Ken has been getting treatment for a serious medical issue. Ken now needs to put full-time focus into his health. As a result he will not be on the call this morning and he will not be doing follow-up calls with investors.

在我談本季表現與展望之前，我其實有一項組織公告。如各位所知，我們的投資人關係副總裁 Ken Sofio 自三月起一直以減少工時的方式工作。Ken 一直在接受一項嚴重醫療問題的治療。Ken 現在需要把全部時間專注在健康上。因此，他今天早上不會參加電話會議，也不會與投資人進行後續回電。

Ann Nicholson, Director Investor Relations, will be the primary IR contact in the interim; Ann will be supplemented by myself, Tony Tripeny, our Corporate Controller, and Mark Rogus, our Treasurer. I have two requests of our investors. Number one, we will try to be as responsive as normal but please recognize that our response time may take slightly longer and time allocations may be a little shorter as we return calls today and tomorrow.

在過渡期間，投資人關係總監 Ann Nicholson 將成為主要的 IR 聯絡窗口；Ann 也將由我本人、公司總會計師 Tony Tripeny，以及財務長 Mark Rogus 協助。我對投資人有兩點請求。第一，我們會盡量維持一如往常的回應速度，但也請理解，今天與明天我們回電時，回覆時間可能會稍微延長，通話時間分配也可能會略短。

Number two. You can direct e-mails to Ken's email address with IR questions. Ken's assistant, Kelly Williams, will forward them to Ann Nicholson. You can also e-mail Ann or Kelly directly at the e-mail addresses shown on the screen. We ask that you keep Ken in your thoughts and if you wish to send a personal e-mail to him, Kelly will see that it gets to him. I appreciate your help at this time.

第二點。您可以將 IR 問題寄到 Ken 的電子郵件信箱。Ken 的助理 Kelly Williams 會將郵件轉寄給 Ann Nicholson。您也可以直接寄信給 Ann 或 Kelly，電子郵件地址如螢幕所示。我們也請各位把 Ken 放在心上；若您希望寄給他一封私人郵件，Kelly 會確保他能收到。感謝各位此時的協助。

So, now onto the quarter. Hopefully you've had a chance to read the press release we issued this morning on our second quarter results. If you haven't, you can find a copy on our IR website.

接著談本季表現。希望各位已經有機會閱讀我們今天早上發布的第二季業績新聞稿。若尚未閱讀，您可以在我們的 IR 網站找到副本。

In January, we told you of the reset in the Corporation's profitability and our plan of forming bottom and marching up. Briefly, I think we're making progress. Form bottom is our mandate in the display business. The phrase conveys the need to stabilize earnings and position ourselves to regain positive momentum.

在一月時，我們向各位說明公司獲利能力的重置，以及我們「築底並向上推進」的計畫。簡而言之，我認為我們正在取得進展。「築底」是我們在顯示器事業的首要任務。這個說法傳達了穩定獲利、並讓我們重新取得正向動能所需的定位。

The critical first step is to return to moderate quarterly price declines for LCD glass. Today, I'm delighted to tell you that our quarter two price declines for LCD glass were indeed much more moderate than the previous two quarters averaged. And just as important, we now believe price declines in Quarter Three will also be moderate. Now, we need to continue to repeat this over the coming quarters while we execute our cost reduction projects.

關鍵的第一步，是讓 LCD 玻璃的季度價格下跌回到溫和的幅度。今天我很高興告訴各位，我們第二季 LCD 玻璃的價格下跌幅度，確實比前兩季的平均下跌幅度溫和許多。同樣重要的是，我們現在也相信第三季的價格下跌幅度將同樣溫和。接下來幾季，在我們執行成本降低專案的同時，我們需要持續重複達成這一點。

We are also making progress on regaining positive momentum in Display, and this is all about new products for high-performance displays. We've introduced Lotus and Willow glasses. We have now formed our new OLED venture in Korea and we are shipping glass from that country. We are also shipping glass in our wholly-owned Display business for TSD metal oxide black planes. The march up portion of our plan is about capturing sales growth and expanding margins in Telecom, Environmental Life Sciences, and Specialty Materials with Gorilla. And we are also making progress against these objectives, despite some macroeconomic headwinds.

我們在顯示器事業重新取得正向動能方面也在進步，而這完全取決於高效能顯示器的新產品。我們已推出 Lotus 與 Willow 玻璃。我們也已在韓國成立新的 OLED 合資事業，並且正從當地出貨玻璃。此外，我們在全資擁有的顯示器事業中，也正為 TSD 金屬氧化物黑矩陣（black planes）出貨玻璃。我們計畫中的「向上推進」部分，重點在於在電信、環境科技、生命科學，以及以 Gorilla 為主的特殊材料領域，掌握銷售成長並擴大利潤率。儘管面臨一些總體經濟逆風，我們在這些目標上也正在取得進展。

So let me begin with our key messages this morning. First LCD glass prices. Q1 call I told you we had expected our glass price declines in the second quarter to be much more moderate than the average of the previous two quarters. As I said in my opening, but it bears repeating, price declines for LCD glass were indeed much more moderate in Q2 and we believe the price declines in Q3 will also be moderate.

那麼我先從今天早上的關鍵訊息開始。第一，LCD 玻璃價格。在第一季電話會議上，我曾告訴各位，我們預期第二季玻璃價格下跌幅度會比前兩季平均值溫和許多。如同我在開場時所說（也值得再重申一次），第二季 LCD 玻璃的價格下跌幅度確實溫和許多，而我們也相信第三季的價格下跌幅度將同樣溫和。

Second, as we assess the first half of the year for LCD glass, we see retail and supply chains statistics generally in line with our expectations. Obviously, all is not perfect for the economies around the world but unit growth combined with area size increases for televisions have allowed us to keep our outlook for the 2012 retail glass market size. On the supply-chain front we have come through Q2, always the trickiest quarter for Display, with inventories inline with our expectations.

第二，當我們評估上半年 LCD 玻璃的情況時，我們看到零售端與供應鏈的統計數據大致符合我們的預期。顯然，全球各地的經濟並非完美，但在出貨台數成長以及電視面積尺寸增加的帶動下，我們得以維持對 2012 年零售端玻璃市場規模的展望。在供應鏈方面，我們已度過第二季——一向是顯示器業務最棘手的一季——目前庫存水位符合我們的預期。

Third, we told you in the last call we were very alert to potential worsening economic headwinds. We are now experiencing those headwinds. We have seen lower sales of light-duty environmental products, principally in Europe, and we believe the economy could start to impact heavy-duty diesel soon. We have seen lower order rates than expected for some telecom products, not fiber, but in connectivity products due to project slowdowns. We've factored in these headwinds going forward, but as you will see in a minute our outlook for Q3 continues to include growth in most of our businesses.

第三，我們在上次電話會議中提到，我們對經濟逆風可能惡化保持高度警覺。我們現在正經歷這些逆風。我們看到輕型環保產品的銷售下滑，主要發生在歐洲；我們也認為經濟可能很快開始影響重型柴油相關業務。我們也看到部分電信產品（不是光纖，而是連接性產品）的訂單率低於預期，原因是專案進度放緩。我們已將這些逆風納入未來的考量；但如各位稍後將看到的，我們對第三季的展望仍包含多數業務的成長。

So with that intro I will walk you through our Q2 results and Q3 outlook. Second quarter sales were $1.9 billion. That was consistent with Q1 and down slightly from a year ago. Gross margin was 41.7%, just slightly lower than the first quarter as expected. Lower gross margins Display, driven primarily by the lower price, offset gross margin improvements elsewhere. SG&A was up slightly on a dollar basis, while R&D spending was flat. Just as a reminder, we do grant our annual merit increases in Q2 in the United States, which drove some of the increases.

在上述引言之後，我將帶各位回顧第二季結果與第三季展望。第二季銷售額為 19 億美元。這與第一季一致，且較去年同期略為下降。毛利率為 41.7%，如預期般僅較第一季略低。顯示器業務毛利率較低（主要由較低價格所驅動），抵銷了其他領域毛利率的改善。SG&A 以金額計略為上升，而研發（R&D）支出持平。提醒各位，我們在美國會於第二季發放年度績效調薪，這也帶動了部分增加。

Equity earnings of $259 million were up about 19% sequentially, compared to equity earnings of $218 million in Q1. Dow Corning drove most of the increase with sales growth in both silicones and polysilicon. Dow Corning results also included a favorable nonrecurring item of $11 million. EPS excluding special items was $0.31, generally consistent with Q1, but a material decline from a year ago. EPS, as stated here, is a non-GAAP measure. A reconciliation to GAAP can be found on our website.

權益法收益為 2.59 億美元，較上一季約成長 19%，相較第一季的權益法收益 2.18 億美元。Dow Corning 的成長貢獻了大部分增幅，其矽膠（silicones）與多晶矽（polysilicon）皆有銷售成長。Dow Corning 的結果亦包含一筆 1,100 萬美元的有利一次性項目。排除特殊項目的每股盈餘（EPS）為 0.31 美元，整體與第一季大致一致，但較去年同期明顯下滑。此處所述 EPS 為非 GAAP 指標。與 GAAP 的調節表可在我們網站上查閱。

So, now for our quarter two segment results, I will start with Display. Display sales were $641 million in Q2, a decrease of 9% sequentially, and down 16% versus last year. Volume was down in the mid-single digits, worse than our expectations, up consistent, mainly due to lower utilizations at some large customers. Price declines were more moderate, as expected. And the yen exchange rate was not a factor in comparing Q1 and Q2.

接下來談第二季各事業部門的結果，我先從顯示器事業開始。顯示器事業第二季銷售額為 6.41 億美元，較上一季下滑 9%，較去年同期下滑 16%。出貨量下滑約中個位數百分比，比我們預期更差，但仍大致一致，主要原因是部分大型客戶的稼動率較低。如預期，價格下跌幅度較為溫和。而日圓匯率在比較第一季與第二季時並非影響因素。

Volume in SCP was up in the mid-single digits sequentially, which was better than expected. I'm pleased to say that SCP secured a multi-quarter deal with a customer which gave them some additional volume in Q2. Equity earnings at SCP's LCD glass business were $184 million in Q2, an increase of 1% versus the first quarter. For your modeling purposes, SCP's second quarter LCD sales were $739 million, an increase of 1% from the first quarter. As a reminder this represents SCP's LCD sales only. Our public filings report SCP total sales which include CRT glass and other product sales.

SCP 的出貨量較前一季呈現中個位數百分比成長，表現優於預期。我很高興地表示，SCP 與一位客戶簽下了一筆跨多季的合約，使其在第二季獲得一些額外的出貨量。SCP 的 LCD 玻璃業務之權益法收益在第二季為 1.84 億美元，較第一季增加 1%。供您建模之用，SCP 第二季 LCD 銷售額為 7.39 億美元，較第一季增加 1%。提醒一下，這僅代表 SCP 的 LCD 銷售額。我們的公開申報文件所揭露的是 SCP 的總銷售額，其中包含 CRT 玻璃及其他產品銷售。

I'd like to spend a few minutes discussing inventory levels in the supply-chain, glass supply and demand, and retail. Our preliminary estimate of inventory at the end of Q2 was roughly 15.3 weeks. We think the supply-chain built a little over 100 million square feet of inventory in the quarter. This number was in line exactly with our forecast. As a reminder, Q2 is the lowest quarter retail all year long, so we always expect and experience inventory builds. The key is not to build too much.

我想花幾分鐘談談供應鏈中的庫存水位、玻璃供需，以及零售端情況。我們對第二季末庫存的初步估計約為 15.3 週。我們認為本季供應鏈增加了略高於 1 億平方英尺的庫存。這個數字與我們的預測完全一致。提醒一下，第二季是一年之中零售最淡的季度，因此我們一向預期並且也確實會出現庫存增加。關鍵在於不要增加過多。

Q2 is the quarter that has caused problems in the past. As of now with the build meeting our expectations, and with the number of weeks of inventory, it feels like the supply-chain is okay heading into the back half of the year. As always we will continue to monitor inventory levels, especially as we progress through the third quarter when we see panel utilization climbing in anticipation of the fall retail season.

第二季是過去曾引發問題的季度。就目前而言，庫存增加符合我們的預期，且以庫存週數來看，供應鏈在進入下半年時看起來狀況良好。一如既往，我們將持續監控庫存水位，特別是在進入第三季、面板產能利用率因應秋季零售旺季而上升之際。

Utilization rates in Taiwan are expected to increase on average from 70% to 75% in Q3. In Korea, we expect utilization rates to pick up slightly. In Japan, we expect utilizations to increase substantially from the sub-50% level that we experienced in Q2.

台灣的產能利用率預期在第三季平均將由 70% 提升至 75%。在韓國，我們預期產能利用率將小幅回升。在日本，我們預期產能利用率將自第二季低於 50% 的水準大幅提升。

Now we believe glass supply and demand remains in balance. Tanks have been brought back online to support the anticipated seasonal Q3 increase in demand. We are running our wholly-owned capacity at high utilizations driven by Gorilla glass and the expected Q3 seasonal uptick. SCP continues to have capacity off-line and tends to keep it so. At this time we would consider our glass inventory levels to be healthy. Actually came into Q2 on the low side of healthy, so we built a small amount of inventory in the wholly-owned business during the quarter.

目前我們認為玻璃供需仍維持平衡。為支援預期第三季季節性需求增加，部分熔窯已重新開爐。在 Gorilla Glass 的帶動以及預期第三季季節性回升下，我們自有產能正以高利用率運轉。SCP 仍有部分產能停線，且傾向維持停線狀態。就目前而言，我們認為玻璃庫存水位是健康的。其實進入第二季時庫存偏向健康區間的低端，因此本季在自有業務中小幅增加了一些庫存。

Now moving to retail. Retail and supply chain statistics are generally in line with our expectations. We are sharing some preliminary data that is a risk as final data does differ sometimes. But with the uncertainty in the world's economies we hope it will help investors. I'd like to add that we look at both unit data and area data by geographical locations. Unit data reveals the number of consumers purchasing, especially year-over-year, and it helps me think about the impact of the economy. Of course we look at area data, because in the end we sell by the square foot.

接著談零售端。零售與供應鏈的統計數據大致符合我們的預期。我們分享的是一些初步數據，這是有風險的，因為最終數據有時會有所不同。但在全球經濟充滿不確定性的情況下，我們希望這能對投資人有所幫助。我也想補充，我們會按地理區域同時觀察台數（unit）數據與面積（area）數據。台數數據反映消費者購買人數，尤其是年對年變化，並有助於我思考經濟的影響。當然我們也看面積數據，因為最終我們是按平方英尺銷售。

For the United States we've actually seeing positive unit growth rates all year. Unit growth rates are small as we would expect in a developed economy that is fully penetrated. Year-to-date unit growth is 3%. Year-to-date area growth in the United States is 8%. These numbers are in line with our expectations. Larger average screen size are driving the better area growth. In the US, 50 inch and above televisions are actually up 40% year to date.

在美國，我們其實全年都看到正向的台數成長率。台數成長率不大，這符合我們對於一個已高度滲透的成熟經濟體的預期。年初至今台數成長為 3%。年初至今美國的面積成長為 8%。這些數字符合我們的預期。更大的平均螢幕尺寸帶動了較佳的面積成長。在美國，50 吋以上電視年初至今實際上成長了 40%。

In Europe unit demand was definitely weaker in the first quarter but has improved over the last three months. Year-to-date units are down 5% and the area is up 2%. The economic uncertainty makes forecasting difficult. We'd love to see recent months' performance continue. As expected, year-over-year unit sales in Japan are down due to tough year-over-year comparisons with last year's EchoPoint promotions. We will expect to see easier comparisons starting in the fourth quarter.

在歐洲，第一季的台數需求確實較弱，但過去三個月已有所改善。年初至今台數下降 5%，面積上升 2%。經濟不確定性使得預測變得困難。我們希望近期幾個月的表現能夠延續。如預期，由於去年 EchoPoint 促銷帶來的高基期比較，日本的年對年台數銷售下滑。我們預期從第四季開始比較基期將變得較容易。

In China, we are seeing mixed performance. Now recall from the quarter one call that changing the time of New Year's holiday and promotion period made the early part of the year challenging to interpret. I told you the combined December to February units were up 15%. March and April were positive but not as strong. And as we all know now, the May holiday season's sales were weak. We are pleased to see positive unit growth in June in the preliminary numbers. I feel our biggest risk in our television forecast is China, and we're closely tracking the situation.

在中國，我們看到表現好壞不一。請回想第一季電話會議所提到的，農曆新年假期與促銷期間的時間調整，使得年初的情況較難解讀。我曾告訴各位，12 月到 2 月合計台數成長 15%。3 月與 4 月為正成長，但力道沒那麼強。而且如大家現在所知，5 月假期檔期的銷售疲弱。我們很高興在初步數據中看到 6 月台數呈現正成長。我認為我們電視需求預測中最大的風險在中國，我們正密切追蹤情勢。

On the positive side, China has now implemented a new stimulus that we feel could help television sales in the back half of the year. Emerging Asia and South America continue to show excellent growth year-over-year. In terms of PC demand for this year we're paying attention to the weak results in Q2 reported by the industry. Our forecast for the year calls for desktops at 0% growth, notebook and netbooks at 7%, tablets at 50% growth. We do not expect any growth in the monitor market.

正面來看，中國已推出新的刺激措施，我們認為這可能有助於下半年電視銷售。新興亞洲與南美洲的年對年成長仍然非常亮眼。就今年 PC 需求而言，我們正關注產業在第二季所公布的疲弱結果。我們對全年預測為：桌機 0% 成長、筆電與小筆電（netbook）7% 成長、平板 50% 成長。我們不預期顯示器市場會有任何成長。

In terms of glass demand at retail, our estimate remains 3.6 billion square feet. As I mentioned on our January conference call, we have a variety of cases with retail demand being above or below the point estimate of 3.6 million (sic) square feet, driven primarily by different economic scenarios.

就零售端的玻璃需求而言，我們的估計仍為 36 億平方英尺。如我在 1 月的電話會議中提到，我們有多種情境，零售需求可能高於或低於 360 萬（原文誤植：million）（sic）平方英尺的點估計，主要由不同的經濟情境所驅動。

We still expect the supply chain to lower weeks of inventory by about a half week by the end of the year. We expect the absolute amount of inventory to show a very slight increase year-over-year in square foot from the combination of retail growth offset partially by the decline in weeks of inventory. In terms of our to migration EAGLE XG Slim, we continue to make excellent progress. We have now met our goal of more than half our glass shipped being thin.

我們仍預期供應鏈到年底將把庫存週數降低約半週。我們預期庫存的絕對量（以平方英尺計）年對年將非常小幅增加，原因是零售成長與庫存週數下降部分互相抵銷後的結果。就我們向 EAGLE XG Slim 的轉換而言，我們持續取得極佳進展。目前我們已達成目標：出貨玻璃中超過一半為薄玻璃。

I'd like to comment on the new MOU announcement made on Tuesday relative to the new glass factory in China. Samsung and Corning are planning to invest in a new equity venture in China to supply LCD glass to the new Samsung Suzhou Gen 8 panel fab. This new entity has signed a MOU with the Wuxi new district in China on the intent to make this investment. The final agreements between Samsung and Corning need to be signed and more importantly we need to receive appropriate government approvals. The new glass factory would start production in line with Samsung start up.

我想就週二宣布、與中國新玻璃工廠相關的新 MOU 發表一些評論。三星與康寧計畫在中國投資成立新的合資公司，以供應 LCD 玻璃給三星蘇州第 8 代面板廠。該新實體已與中國無錫新區簽署 MOU，表達進行此項投資的意向。三星與康寧之間仍需簽署最終協議，更重要的是我們需要取得適當的政府核准。新玻璃工廠將配合三星的投產時程開始生產。

The ownership will be split 50/50 with Corning and Samsung. The capital will be funded by equity injections by Corning and Samsung and by loans. Corning's equity investment will be $100 million. The new company plans to invest up to $600 million in phases over the next few years. Now a portion of the equipment will actually be transferred from SCP, and as a reminder, SCP continues to have a significant capacity idle.

股權將由康寧與三星各持 50%。資金將由康寧與三星的股權注資以及貸款提供。康寧的股權投資將為 1 億美元。新公司計畫在未來幾年分階段投資最高達 6 億美元。另外，部分設備實際上將自 SCP 轉移；提醒一下，SCP 仍有相當可觀的閒置產能。

Lastly a comment on our high-performance displays. Samsung Corning Advanced Glass was officially established in the quarter and we started shipping glass. We are pleased with the progress we have made establishing programs with panel makers and hope to deliver a significant amount of Lotus glass to multiple customers by year-end.

最後談一下我們的高效能顯示器。Samsung Corning Advanced Glass 已於本季正式成立，我們也已開始出貨玻璃。我們對於與面板製造商建立專案所取得的進展感到滿意，並希望在年底前向多家客戶交付相當數量的 Lotus 玻璃。

Now in Telecom, sales were $559 million, up 10% sequentially versus our guidance of low to mid-teen growth. Growth was driven by enterprise and optical fiber and cable in North America and China. Compared to our expectations, we saw a slightly softer demand for optical fiber in EMEA and for legacy hardware products.

接著在電信事業方面，銷售額為 5.59 億美元，較前一季成長 10%，高於我們先前指引的低至中十位數成長。成長主要由北美與中國的企業客戶，以及光纖與光纜業務帶動。相較於我們的預期，EMEA 地區的光纖需求以及傳統硬體產品的需求略為疲弱。

Net income was $36 million, up from $21 million in Q1, but down from $46 million a year ago. The increase from quarter one was driven by the sales increase and a nonrepeat of a $3 million impairment in Q1. Compared to a year ago, the decrease in net income largely reflects fixed cost increases driven by investments for sales growth and some unfavorable product mix.

淨利為 3,600 萬美元，高於第一季的 2,100 萬美元，但低於去年同期的 4,600 萬美元。相較第一季的增加，主要來自銷售成長，以及第一季 300 萬美元減損未再發生。相較去年同期，淨利下滑主要反映因投資以支撐銷售成長而導致的固定成本增加，以及部分不利的產品組合。

Our fiber sales set a record in 2011, and we believe the market is on track to grow 10% or more in 2012. The growth is fueled by wireless fiber in the home and infrastructure investments in emerging markets and economic stimulus activities elsewhere. We're investing to meet this growth with investments in R&D for new products and capital efficient processes that will expand our capacity.

我們的光纖銷售在 2011 年創下紀錄，我們相信市場在 2012 年可望成長 10% 或以上。成長動能來自無線、光纖到府（fiber in the home）以及新興市場的基礎建設投資，並受其他地區經濟刺激措施帶動。我們正透過新產品研發（R&D）投資與資本效率更高的製程投資來因應成長，並將擴充產能。

In Environmental, sales were $249 million, down 5% sequentially, which was weaker than our expectations. Lower sales of light-duty diesel filters and substrates in Europe accounted for most of the sequential decline. Net income Environmental was $34 million, compared to $40 million in Q1 and $32 million in 2011. Year-over-year income was up 6% on slightly lower sales due to heavy-duty diesel gross margin improvement. Specialty Materials sales were $296 million, up 3% sequentially and below our expectations.

在環境事業方面，銷售額為 2.49 億美元，較前一季下滑 5%，弱於我們的預期。歐洲輕型柴油車濾清器與載體（substrates）銷售下滑，佔了大部分的季減幅度。環境事業淨利為 3,400 萬美元，第一季為 4,000 萬美元，2011 年為 3,200 萬美元。在銷售略降的情況下，受重型柴油產品毛利率改善帶動，年增獲利仍成長 6%。特殊材料銷售額為 2.96 億美元，較前一季成長 3%，但低於我們的預期。

Gorilla sales were up in the quarter, but less than we had anticipated. Forecasting sales in any given quarter in IT and handheld has proven difficult. The miss from expectations was due to a mix shift in orders late in the quarter that we could not react to. We will get those sales in Q3 and Q4. More on that outlook in a moment. Net income was $34 million, up from $21 million in Q1, an increase was driven by continued improvement in Gorilla glass margins.

本季 Gorilla 玻璃銷售成長，但低於我們原先預期。事實證明，在 IT 與手持裝置領域要預測單一季度的銷售相當困難。未達預期主要是因為季度末訂單出現組合轉移，我們無法及時因應。這些銷售將在第三季與第四季實現。稍後我會再談該展望。淨利為 3,400 萬美元，高於第一季的 2,100 萬美元，增加主要來自 Gorilla 玻璃毛利率持續改善。

In Life Sciences, Q2 sales were $162 million, up 5% sequentially, and up from a year ago. Net income was $11 million, consistent with Q1 and down slightly versus a year ago. We continue to work with the government to get final antitrust approval for the BD acquisition; we continue to be optimistic we will get that approval soon. More importantly we remain very excited by the transaction.

在生命科學事業方面，第二季銷售額為 1.62 億美元，較前一季成長 5%，也高於去年同期。淨利為 1,100 萬美元，與第一季相當，較去年同期略降。我們持續與政府合作，以取得 BD 併購案最終的反托拉斯核准；我們仍樂觀認為很快就能取得核准。更重要的是，我們對這筆交易仍感到非常振奮。

Now moving to Dow Corning, equity earnings were $61 million, up from $35 million in Q1. Dow Corning did have two small nonrecurring gains, which approximately $11 million improvement. Silicone sales were up slightly and margins improved due to manufacturing mix. Polysilicon sales were up, driven by price. Poly margin also improved.

接著談 Dow Corning，權益法認列收益為 6,100 萬美元，高於第一季的 3,500 萬美元。Dow Corning 確實有兩項小型一次性收益，合計約帶來 1,100 萬美元的改善。矽酮（silicone）銷售小幅成長，且因製造組合而使毛利率提升。多晶矽（polysilicon）銷售成長，主要由價格帶動。多晶矽毛利率也有所改善。

I'd like to pause here and comment on the recent developments in China on polysilicon. Ministry of commerce, MOFCOM, of the People's Republic of China, has initiated review of the United States and Korea manufactured polycrystalline silicon in response to Chinese polysilicon manufacturers' allegation that the companies like Hemlock Semiconductor Group have received unfair trade subsidies, and may have been dumping product in the Chinese market. This review is part of a broader trade conflict, extending far beyond polysilicon solar industries as an escalating number of trade disputes have been initiated throughout the globe in the last year.

我想在此暫停一下，評論近期中國在多晶矽方面的發展。中華人民共和國商務部（MOFCOM）已啟動對美國與韓國製造的多晶矽之調查，起因於中國多晶矽製造商指稱 Hemlock Semiconductor Group 等公司獲得不公平的貿易補貼，且可能在中國市場傾銷產品。此調查是更廣泛貿易衝突的一部分，影響範圍遠超多晶矽太陽能產業；過去一年全球各地發起的貿易爭端數量持續攀升。

MOFCOM's investigation is expected to take 12 to 18 months. Therefore at this time it's premature to speculate on any potential financial impact to Hemlock Semiconductor or Dow Corning. Dow Corning and Hemlock Semiconductor continue to work closely with government officials from the United States and China to express the need for trade policies that acknowledge the dynamics and opportunities in new and emerging global industry, and are optimistic that a reasonable and mutually acceptable resolution is within reach.

MOFCOM 的調查預期將耗時 12 至 18 個月。因此，目前推測對 Hemlock Semiconductor 或 Dow Corning 的任何潛在財務影響仍為時過早。Dow Corning 與 Hemlock Semiconductor 持續與美中兩國政府官員密切合作，表達需要能反映新興全球產業動態與機會的貿易政策，並樂觀認為可望達成合理且雙方可接受的解決方案。

Now turning to our balance sheet, we end the second quarter with $6.3 billion in cash and short-term investments. Capital spending was $441 million in the quarter. We also made the equity contribution of $104 million to our new Samsung OLED equity venture. We had received a larger dividend from SCP in Q1, which essentially keeps Corning cash neutral on this new venture. We're actually going to follow the same procedure for the new LCD glass factory in China that will supply Samsung's new panel fab in China.

接著看資產負債表，我們在第二季末持有 63 億美元的現金與短期投資。本季資本支出為 4.41 億美元。我們也對新的 Samsung OLED 權益合資案投入 1.04 億美元的權益出資。我們在第一季自 SCP 收到較大額股利，基本上使 Corning 在此新合資案上維持現金收支中性。我們實際上也將對中國新的 LCD 玻璃工廠採用相同作法，該工廠將供應 Samsung 在中國的新面板廠。

Free cash flow to the corporation for the quarter was a positive $27 million, and as a reminder free cash flow is a non-GAAP measure. A reconciliation to GAAP can be found on our website. We also continued our share repurchase program during the second quarter. We repurchased $314 million in the quarter, a much higher rate than quarter one, as we had guided you. We ended the quarter with approximately $2.2 billion in cash in the United States.

本季公司自由現金流為正 2,700 萬美元；提醒一下，自由現金流為非 GAAP 指標。與 GAAP 的調節表可在我們網站上查閱。我們在第二季也持續進行庫藏股回購計畫。本季回購金額為 3.14 億美元，回購速度明顯高於第一季，符合我們先前的指引。本季末我們在美國約持有 22 億美元現金。

As I mentioned in the Life Sciences section we have not received FTC approval for the BD transaction yet. BD transaction will predominately be a US cash acquisition. If the transaction closes this year, our US cash should end the year around $1.1 billion. We expect capital spending for the year to be approximately $1.8 billion to $1.9 billion. Capital spending in 2013 should be lower. It could be above our previous forecast of $1.3 billion if we decide to pursue new process technologies for high-performance displays.

如我在生命科學事業段落所提，我們尚未取得 FTC 對 BD 交易的核准。BD 交易將主要以美國現金收購方式進行。若交易於今年完成，我們的美國現金在年底應約為 11 億美元。我們預期全年資本支出約為 18 億至 19 億美元。2013 年的資本支出應會較低。若我們決定推進高效能顯示器的新製程技術，資本支出可能高於先前預估的 13 億美元。

So, now I'd like to turn to our outlook and I'll start with Display. In the third quarter the total volume of our wholly-owned business and SCP should be up in the low double digits sequentially as panel makers increase utilizations to supply the seasonally stronger retail demand in the second half. Customers in our wholly-owned business have averaged lower utilizations throughout the first half so we expect volume in our wholly-owned business to have more upside sequentially. At SCP volume should up sequentially, as well. The obvious risks for volume are economic ones and sudden supply-chain reductions. For glass pricing, as I've mentioned before, we expect our price declines to continue to be moderate in Q3.

接下來我想談我們的展望，先從顯示器事業開始。第三季我們全資事業與 SCP 的總出貨量，預期將較前一季成長低雙位數百分比，因面板廠提高稼動率以供應下半年季節性較強的零售需求。我們全資事業的客戶在上半年平均稼動率較低，因此我們預期全資事業的出貨量在季比上有更大的上行空間。SCP 的出貨量也應會較前一季增加。出貨量的明顯風險在於總體經濟因素以及供應鏈的突然縮減。至於玻璃價格，如我先前所提，我們預期第三季的降價幅度仍將維持溫和。

Turning to Telecom, we expect sales to be consistent sequentially in line with normal historical seasonal trends. We expect demand to be strong for fiber and cable and for enterprise solutions. In environmental, we expect sales to be flat to up slightly driven by a seasonal uptick in light-duty vehicle builds. Specialty Materials should have a very strong quarter led by Gorilla glass. We expect sales to be up 10% to 15% sequentially, led by growth in IT and handheld Gorilla sales. In Life Sciences, we expect sales to be flat to up slightly.

再看電信事業，我們預期銷售額將與前一季大致持平，符合歷史正常的季節性趨勢。我們預期光纖與光纜以及企業解決方案的需求將維持強勁。在環境事業方面，我們預期銷售將持平至小幅成長，主要由輕型車產量季節性回升帶動。特殊材料預期將有非常強勁的一季，主要由 Gorilla 玻璃領軍。我們預期銷售額將較前一季成長 10% 至 15%，主要由 IT 與手持裝置的 Gorilla 玻璃銷售成長帶動。在生命科學事業方面，我們預期銷售將持平至小幅成長。

At Dow Corning we expect equity earnings to be down about 30%, driven primarily by the absence of the nonrecurring gains of $11 million in Q2 and seasonal plant shutdown-related expenses. We do expect Dow Corning to begin paying some dividends to Corning again in the third and fourth quarter.

在 Dow Corning，我們預期權益法收益將下滑約 30%，主要是因為第二季缺少 1,100 萬美元的一次性收益，以及季節性工廠停機相關費用。我們也預期 Dow Corning 將在第三與第四季開始再次向 Corning 支付部分股利。

Now continuing on with the rest of the corporate quarter three forecast, we expect gross margin to increase by almost 1 percentage point, driven by volume increases in display. SG&A and R&D will be consistent as a percentage of sales in the third quarter. Equity earnings, excluding special items, should be down by about 10% sequentially.

接著談公司第三季其餘的展望，我們預期毛利率將提高將近 1 個百分點，主要由顯示器業務的出貨量增加所帶動。第三季的 SG&A 與 R&D 佔銷售額的比重將維持一致。不含特殊項目的權益法收益，預期將較前一季下滑約 10%。

Our tax rate for the year is forecasted to be around 19%. For foreign exchange the yen has been relatively stable in Q1 and Q2. We are hopeful there is no weakening. As a reminder, our results move with changes in the yen to US dollar exchange rate. A weaker yen lowers our results, a stronger yen helps. So, if the yen average is 1 point higher or lower in Q3 we estimate our sales and net income would decrease or increase by approximately $7 million.

我們預估全年稅率約為 19%。就外匯而言，日圓在第一季與第二季相對穩定。我們希望不會走弱。提醒一下，我們的業績會隨日圓兌美元匯率變動而變化。日圓走弱會拉低我們的業績，日圓走強則有助於提升。因此，若第三季日圓平均匯率高或低 1 個點，我們估計銷售額與淨利將分別減少或增加約 700 萬美元。

So that concludes my opening comments. Ann?

以上就是我開場的說明。Ann？

Thank you Jim. John, we'd now like to open the line for questions.

謝謝你，Jim。John，我們現在想開放提問。

Certainly.

當然。

(Operator Instructions)

(接線員指示)

Rod Hall, JPMorgan.

Rod Hall，摩根大通。

Just a couple of quick questions. One Jim, I wonder if you could talk a little bit about demand linearity through the quarter and how that progressed. Trying to get a feel for how rapidly demand might be deteriorating particularly in Europe and in China. And then I would also like to get some feel for the capacity situation out there. I think you said that you have more or less fully utilized capacity. How does that compare to the 25% capacity you guys took off-line a couple quarters ago? Is most of that now reutilized or are you talking about more full utilization of the stuff that's already running? If you could just give us some update on that. And then lastly on that China JV, just a clarification, are you guys going to guarantee the loans into that JV or can you give us some idea how the loan mechanics work into that operation? Thanks.

我有幾個簡短問題。第一個，Jim，我想請你談談本季需求的線性變化，以及其進展情況。我想了解需求惡化的速度，特別是在歐洲與中國。另外我也想了解一下目前的產能狀況。我記得你提到你們的產能大致已充分利用。這與你們在前幾季下線的 25% 產能相比如何？那部分大多已重新啟用，還是你指的是目前正在運轉的產線更接近滿載？如果可以，請更新一下。最後關於中國的合資案，想再釐清一下：你們是否會為投入該合資案的貸款提供擔保？或能否說明一下該營運中貸款機制如何運作？謝謝。

Sure. So in reverse order on the new Chinese venture. What's happening is Samsung and Corning are each putting in $100 million, approximately. That will be funded for each of us by dividends out of SCP and then the remainder of the funding, $600 million, and I emphasize that's spent over time, will come from loans from SCP to the new venture and therefore will not have any guarantee from Corning. So fundamentally, our cash going in is $100 million and that's $100 million extra that we're getting out of dividends from SCP, which is by way the exactly what we did with the OLED venture.

好的。我先從最後一題、也就是新的中國合資案說起。目前的安排是 Samsung 與 Corning 各自投入約 1 億美元。我們各自的資金將由 SCP 的股利支應，剩餘的資金 6 億美元——我強調這是分期逐步支出——將由 SCP 對新合資公司提供貸款，因此 Corning 不會提供任何擔保。所以本質上，我們投入的現金是 1 億美元，而這 1 億美元是我們透過 SCP 股利額外取得的；順帶一提，這與我們在 OLED 合資案所採用的作法完全相同。

In terms of capacity our wholly-owned capacity is running at high utilizations driven by a combination of Gorilla and the uptick in LCD glass heading into Q3. However if you recall the original 25% included our worldwide capacity and we still have significant capacity off-line at SCP. In terms of demand linearity, I think your question was around Q2 and what we saw was weakening in light-duty filters in Europe pretty much consistently starting in April. And in China the weakness in cars was really with the shutdowns that occur towards the end of Q2. In Telecom we saw weakness throughout the quarter in Europe principally in our legacy products.

就產能而言，我們全資擁有的產能在高稼動率下運轉，主要由 Gorilla 以及進入第三季前 LCD 玻璃需求回升所帶動。不過如果你還記得，當初的 25% 是包含我們全球產能，而我們在 SCP 仍有相當多的產能處於停線狀態。至於需求線性，我想你的問題是關於第二季；我們看到歐洲的輕型車濾材需求走弱，幾乎從四月開始就持續如此。而在中國，汽車需求的疲弱主要與第二季末發生的停工有關。在電信方面，我們整季在歐洲都看到疲弱，主要出現在我們的既有產品。

Okay. And Jim just given you are seeing weakness here, are you guys -- you didn't say anything about your 230 million TV unit expectation for the full year. Is that something that's under consideration or do you think it still makes sense at this stage to keep that number?

了解。Jim，既然你們看到需求走弱，你們——你剛才沒有提到你們對全年電視出貨量 2.3 億台的預期。這個數字是否正在重新評估？或你認為在目前階段仍合理維持這個數字？

I don't think our forecast was ever 230 million. It was in the low 220 millions. I think there is some risk that it could be in the upper two-teens. On the other hand the flip side is from an area point of view that's not hurting us because we're actually seeing stronger average sized television growth this year.

我不認為我們的預測曾經是 2.3 億台。我們的預測是在 2.2 億台出頭。我認為確實有一些風險，可能會落在 2.1 億台高段。但另一方面，從面積的角度來看這對我們不會造成傷害，因為我們今年其實看到平均電視尺寸成長更強。

Okay great. Thanks a lot.

好的，很棒。非常感謝。

Mark Sue, RBC Capital Markets.

Mark Sue，RBC 資本市場。

Thank you and Ken, hope you feel better. Jim just a question on the supply industry supply-side. Do you think that the industry might consider and Corning might consider idling capacity after a near-term volume bounce in the near-term considering the North American seasonality and possible rebound in China, the [hoja] capacity study? And subsequently what is the impact on price declines? Should we think about more moderate pricing declines to continue from now till year-end or can we see a step function down if the supply-chain further reduces their inventories?

謝謝你，Ken，希望你早日康復。Jim，我想問供給端、也就是產業供給面的問題。你認為在短期出貨量反彈之後，考量北美的季節性以及中國可能回升、以及 [hoja] 產能研究，產業（以及 Corning）是否可能考慮讓部分產能停線？接著，這對價格下滑的影響為何？我們是否應該預期從現在到年底價格下滑會更溫和地延續，或若供應鏈進一步降低庫存，價格可能出現階梯式下跌？

So in terms of industry capacity utilization, obviously our competitors will have to speak for themselves. But for Corning we have the ability to throttle back relatively easily. We always have a certain number of tanks that are coming up for their normal repair. And so to the degree that we saw in the fourth quarter and the need to do that we can do that relatively easily. Because there is always some tanks that we need to repair. In terms of pricing, I'm delighted by the Q3 pricing that we basically have reached agreement with almost all of our customers already. I'm not giving guidance for Q4 at this stage but we are quite hopeful that we will be able to again have Q4 pricing be moderate. Clearly that's our goal.

就產業產能利用率而言，當然競爭對手得為自己發言。但對 Corning 來說，我們有能力相對容易地調節、降低產出。我們一直都有一定數量的熔爐（tanks）會按例進行正常維修。因此，若像第四季那樣我們看到需要這麼做，我們可以相對容易地採取行動。因為總是有一些熔爐需要維修。至於定價，我對第三季的價格感到很滿意，因為我們基本上已經與幾乎所有客戶達成協議。目前我不對第四季提供指引，但我們相當希望第四季的價格也能維持溫和。這顯然是我們的目標。

Got it. And then separately just the Telecom business seems somewhat resilient. Does it feel that business might, the trends there continue, or do we come out somewhat peak and do they actually become impacted by the macro themselves, the telecom side? Maybe your thoughts of telecom sustainability, maybe beyond the near-term.

了解。另外，電信業務看起來相當有韌性。你覺得那邊的趨勢會持續嗎？還是我們其實已接近高峰，之後電信端也會受到總體環境影響？想請你談談電信業務的可持續性，可能不只是在短期。

Well the positive news for Telecom is that we think we are on the right side of the optical substitution transition with most of our products. And so compared to a lot of other telecom equipment providers we have that going for us. The flip side, we're not immune to the macro environment. We started to feel that as I mentioned in Europe and we've seen some projects we expected to happen, happen at a slower pace. But fundamentally, we feel very good about where we stand with our products. Demand for fiber remains very strong, particularly in China. We have good fiber to the home visibility. The Australian project regrettably is starting slower than what we expected and we probably should have remembered that because Verizon did also originally. But we feel pretty good about Telecom. I think our biggest worry would be Europe in Telecom.

電信的好消息是，我們認為就大多數產品而言，我們站在光學替代轉型的正確一側。因此，相較於許多其他電信設備供應商，這是我們的優勢。但另一方面，我們也不可能完全不受總體環境影響。如我提到的，我們已在歐洲開始感受到影響，也看到一些原本預期會發生的專案進度變慢。不過從根本上來說，我們對自身產品的競爭位置感到非常有信心。光纖需求仍然非常強勁，尤其是在中國。我們對 FTTH（光纖到府）的能見度良好。澳洲專案很遺憾地啟動得比我們預期慢，我們可能也應該記得 Verizon 當初也是如此。但我們對電信業務整體感覺相當不錯。我想我們最大的擔憂會是歐洲的電信市場。

That's helpful. Thank you. Good luck, gentlemen.

這很有幫助。謝謝你。祝各位先生好運。

Wamsi Mohan, Bank of America Merrill Lynch.

Wamsi Mohan，美國銀行美林。

Ken, I hope you do better soon. Jim can you address the need to set up another LCD glass melting operation in China. You characterized this market at the last analyst day as a mature market, sort of flattish over the next several years. I'm sure you have extensive analysis to support this but can you share maybe what is the cost differential to a panel maker if you shipped from Sakai which is running at low capacity utilizations or frankly SCP, versus making a local in China? And also, you have other operations in Beijing. Could you talk about the ramp-up of that facility too?

Ken，希望你很快好轉。Jim，你能否談談在中國再設立一座 LCD 玻璃熔融作業的必要性？你在上次分析師日把這個市場形容為成熟市場，未來幾年大致持平。我相信你們有大量分析支撐，但你能否分享一下：若從產能利用率偏低的堺（Sakai）或坦白說 SCP 出貨，與在中國當地生產相比，對面板廠的成本差異大概如何？另外，你們在北京也有其他營運據點。也請談談那座廠的爬坡進度？

That's a very complicated question, so I'll take a shot at it. As you recall in China when Chinese government requested applications from the panel industry to build several years ago, there were nine applications and I think five were approved. They have been phased I think appropriately by the various panel fab manufacturers on a very delayed manner. So we basically have BOE up and running, China stars up and running, and none of the other new ones are really running. So Samsung had received approval for their Gen 8.5 panel fab. They have started construction but it's on a much delayed basis from what they originally planned.

這是個非常複雜的問題，我試著回答。如你所記得，幾年前中國政府向面板產業徵求建廠申請時，共有九件申請，我想其中五件獲准。各家面板廠在推進上，我認為是以相當適當的節奏分期，但整體進度非常延後。所以目前基本上 BOE 已經投產，中國星也已投產，而其他新的案子大多還沒有真正運轉。因此三星曾獲准其第 8.5 代面板廠。他們已開始施工，但相較原先規劃已大幅延後。

This new facility is a small facility and it's located very close to theirs, will be built in phases, and only as they need it. And so it's not like we're turning it all on at once. The same thing is true for our Beijing facility. We are actually going to write up a capacity in the second half of this year but it will be on a very phased basis. We can ship in from Korea to Samsung. It would not come from our Japanese facility. And they could do that. I won't comment on the economics, but clearly Samsung very much wanted to have a glass facility built there next to their fab. But we are going to be very, very careful in our managing our overall capacity. And I will comment that at SCP we expect capacity to remain significantly idled with the loss of LG share.

這座新設施規模不大，位置非常靠近他們，將分期建置，並且只會在他們需要時才擴建。所以不會一次把全部產能開出來。我們北京的設施也是同樣情況。我們實際上會在今年下半年提高產能，但會以非常分期的方式進行。我們可以從韓國出貨給三星。不會從我們日本的設施出貨。他們也可以這麼做。我不評論經濟性，但很明顯三星非常希望在其面板廠旁邊就近建一座玻璃廠。不過，我們在管理整體產能方面會非常、非常謹慎。另外我也要補充，在 SCP 因為失去 LG 的份額，我們預期產能仍將維持相當程度的閒置。

Jim, thanks. What equipment are you specifically expecting to move from SCP to China?

Jim，謝謝。你們具體預期會把哪些設備從 SCP 移到中國？

We are not giving out that detail at this stage.

現階段我們不會提供那樣的細節。

Okay. And on the specialty side, sales came in a little below expectations. You alluded to mix shift and others. Can you give us anything a little more specific over there? Was it just the relative sizes that impacted volumes. So you had a more mix towards smartphones as opposed to tablets in the quarter.

好的。另外在特殊材料那邊，銷售略低於預期。你提到產品組合轉移等因素。能否再具體一點？是否只是相對尺寸影響了出貨量？也就是說，本季組合更偏向智慧型手機而非平板？

I'm sorry I'm not at liberty to give you more detail. I can just say that in the last month we received the surprise that the customer wanted a different product shipped and we had to scramble to try and make that and we couldn't get it done in the month of June.

抱歉，我無法提供更多細節。我只能說，在上個月我們意外收到客戶要求改出貨不同產品的通知，我們必須緊急應變去生產，但在 6 月份內無法完成。

Okay thanks, the last one for me. Have you seen any incremental activity in designs for Gorilla particularly as it relates to automotive and anything related to Windows 8-based applications? Thanks.

好的謝謝，最後一題。你們是否看到 Gorilla 的設計導入有任何增量活動，特別是與車用相關，以及任何與 Windows 8 為基礎的應用相關的部分？謝謝。

In terms of auto, we are working with several car manufacturers and are quite hopeful that we will get something designed in. As we've said before, the pace of the auto industry is quite a bit slower compared to consumer electronics. We are working with a number of people on touch devices. And I think people are hopeful about the impact of Windows 8. But I really can't give you any quantity forecast.

就車用而言，我們正與數家汽車製造商合作，也相當有信心能被納入設計。如同我們之前說過的，汽車產業的節奏相較消費性電子慢得多。我們也正與許多人合作觸控裝置。我想大家都對 Windows 8 的影響抱持期待，但我真的無法提供任何數量預測。

Thanks Jim.

謝謝你，Jim。

Amir Rozwadowski, Barclays

Amir Rozwadowski，巴克萊。

Jim when we were going over your commentary on [ASVs] and progression of in terms of the marketplace, it does seem as though the shared issue that you folks were dealing with earlier this year and late last year now seems to be behind you folks. Is that an appropriate characterization?

Jim，當我們回顧你對 [ASVs] 以及市場端進展的評論時，看起來你們在今年稍早與去年年底所面臨的份額問題，現在似乎已經過去了。這樣的描述恰當嗎？

Yes. I mean it's very obvious that we lost significant share in LG last year and it's no secret that was the customer. But I think by and large, we think shares have been relatively stable. In any given quarter they can move up and down a little, particularly because some customers may run at higher utilizations than others. But right now we think the share situation is relatively stable and it is our goal to maintain our share.

是的。我的意思是，很明顯我們去年在 LG 那邊流失了相當大的份額，而且那是哪個客戶也不是秘密。但我認為整體而言，我們覺得份額已相對穩定。在任何一個季度，份額可能會上下小幅波動，特別是因為有些客戶的產能利用率可能比其他客戶更高。但目前我們認為份額狀況相對穩定，而我們的目標是維持我們的份額。

Okay, so going forward in terms of your expectation you don't see any potential additional sort of potholes or anything along those lines that could cause material fluctuation in terms of your share?

好的，所以往前看，就你的預期而言，你不認為還會有任何可能的額外「坑洞」或類似情況，導致你們份額出現實質波動？

I'm not expecting any. I don't have a perfect crystal ball Amir, but I would say that I'm not aware of that. And I think what I'm delighted by, our display team in heading into quarter three has reached agreement with our customers, we are quite hopeful that with the utilizations ticking up in Japan that will be good for us. So not expecting any share potholes and as I said our goal is to maintain our worldwide share. In any given quarter, it can move up and down a couple points but generally that's what we expect to have happen.

我不預期會有。Amir，我沒有完美的水晶球，但我會說我並不知道有這樣的情況。而且讓我很高興的是，我們的顯示器團隊在進入第三季前已與客戶達成協議；我們也相當期待日本的產能利用率回升，這對我們會是好事。所以不預期會有任何份額「坑洞」，如我所說，我們的目標是維持全球份額。在任何一個季度，可能上下波動幾個百分點，但大致就是我們預期會發生的情況。

Okay that's very helpful Jim. Then in thinking about overall demand environment, you did mention that you expect utilization to pick up in the back half of this year as we head into the fall selling season. What are your expectations around the fall selling season and the holiday selling season this year. Are you expecting, embedded in your guidance, typical seasonality or are you taking it a notch lower with respect to the current macro environment?

好的，這很有幫助，Jim。接著談整體需求環境，你確實提到隨著進入秋季銷售旺季，你預期今年下半年產能利用率會回升。你對今年秋季銷售季與假期銷售季的預期是什麼？你們的指引中所隱含的是典型季節性，還是考量目前總體環境而把預期下修一檔？

I think it varies region by region. US, we are expecting to see relatively consistent unit growth. We are expecting to see the larger televisions do better as they have all year long. I think the place, as I indicated in my comments, that we have the most concerns about would be China, as to what the growth rate there will be in the back half of the year. And then if not in China, as you know it's not a traditional fall retail season like it is in the United States and Europe. And I think that's the one that we are most concerned about. In Europe, we are not looking for robust unit sales although as I mentioned, we are delighted that last three months have been year-over-year, units have been up and area even more strongly in Europe. So that's good news.

我認為各地區情況不同。在美國，我們預期單位數量成長會相對一致。我們預期大尺寸電視會表現更好，這點今年以來一直如此。我想如同我在評論中指出的，我們最擔心的地方會是中國，也就是今年下半年那邊的成長率會是多少。此外，如果不是在中國，你也知道那裡不像美國與歐洲有傳統的秋季零售旺季。我想這是我們最擔心的一塊。在歐洲，我們不預期單位銷售會很強勁；不過如我提到的，我們很高興過去三個月在歐洲的單位數量年增，而面積的增幅更強。所以這是好消息。

Okay. That's helpful Jim. Then lastly we've seen you folks put some of your cash to work either through acquisitions, obviously we are seeing some of the setups on the JV side, as well as a pickup in terms of your buyback this quarter. In the past, you guys mentioned that you're going to be more proactive around utilizing your cash balance. Any other developments that we could expect to hear on that front? Has you are thinking at all changed with respect to using your cash on shareholder return initiatives or anything along those lines?

好的。這很有幫助，Jim。最後，我們看到你們把部分現金投入運用，包括透過併購，顯然也看到合資（JV）方面的一些布局，此外本季你們的庫藏股回購也有所加速。過去你們提到會更積極運用現金餘額。在這方面還有其他進展是我們可以期待聽到的嗎？你們在把現金用於股東回饋措施或類似方向上的想法，有任何改變嗎？

I have nothing to announce today. We still have some money left on our share repurchase. Obviously we would love to close the BD deal. We are looking at some smaller acquisitions from time to time in telecom but there is nothing imminent. We shouldn't be looking for any announcement right away. But we are very alert to trying to improve shareholder returns and so I'm sure we will be discussing that as the year progresses.

我今天沒有什麼要宣布的。我們的股票回購計畫還剩下一些資金。顯然我們很希望能完成 BD 這筆交易。我們不時會在電信領域評估一些較小的併購，但目前沒有迫在眉睫的案子。我們不應該會在短期內就有任何公告。不過我們非常警覺、也一直在努力提升股東報酬，所以我相信隨著今年進展，我們會持續討論這件事。

Great. Thank you very much for the incremental color, Jim.

很好。Jim，非常感謝你補充的資訊。

Steven Fox, Cross Research.

Steven Fox，Cross Research。

Two questions, Jim. First of all, in terms of the outlook for the wholly-owned glass business, is the thing driven more by one or two customers especially one that's underutilized into the third quarter? And then secondly on the Gorilla glass outlook, any color you can provide in terms of units versus area, in other words are you seeing it being driven more by tablets in the second half or at least in this coming quarter? Any color on those two issues would be helpful. Thanks.

Jim，兩個問題。首先，就全資玻璃業務的展望而言，這是否主要由一兩個客戶所驅動，特別是有一個客戶到第三季仍處於產能利用不足的狀況？第二，關於 Gorilla Glass 的展望，你能否就出貨「台數」相對於「面積」提供一些說明；換句話說，你看到下半年或至少接下來這一季的成長，是否更主要由平板所帶動？這兩點若能提供一些補充會很有幫助。謝謝。

I don't have any unit data that I can give you on Gorilla, I'm sorry. In terms of outlook for our utilization in our wholly-owned business, we obviously are expecting a significant increase in Japan. But we are seeing utilization ramp already at our Taiwanese customers and in China. So it is really relatively across the board in our wholly-owned business. Obviously there's some customers we have stronger positions with and when they ramp up it helps us more.

很抱歉，我沒有任何可以提供給你的 Gorilla 的台數資料。至於我們全資業務的產能利用率展望，我們顯然預期日本會有顯著提升。但我們也已經看到台灣客戶以及中國的利用率正在爬升。所以在我們的全資業務中，基本上是相對全面性的提升。當然，我們在某些客戶上有更強的市佔/地位，他們一旦拉升產量，對我們的幫助就更大。

Great. And then maybe just to ask the Gorilla glass question a different way -- relative to your expectations for the quarter going forward how are you factoring in the economic environment into the demand for handheld devices where Gorilla is designed in?

很好。那我換個方式問 Gorilla Glass 的問題——相對於你們對未來季度的預期，你們如何把經濟環境因素納入對採用 Gorilla 的手持裝置需求的評估？

As you know, we have difficulty forecasting Gorilla. And on the positive side is we continue to feel smartphones are growing, continue to feel touch is prevalent on smartphones. We are not feeling any competitive loss there. The downside is it's hard for us to tell whether the economy is in fact going to impact phone sales. We think tablet sales are relatively strong. There obviously are from time to time model changes that influence quarters but we are not sensing economic weakness in the Gorilla business but it is a very difficult business for us to track because the supply chain is much more complicated than it is in display.

如你所知，我們很難預測 Gorilla 的需求。正面來看，我們仍然認為智慧型手機在成長，也仍然認為觸控在智慧型手機上非常普遍。我們沒有感受到在那裡有任何競爭流失。負面來看，我們很難判斷經濟是否真的會影響手機銷售。我們認為平板銷售相對強勁。當然，機型更替有時會影響季度表現，但我們沒有在 Gorilla 業務中感受到經濟疲弱；只是這個業務對我們而言非常難追蹤，因為其供應鏈比顯示器業務複雜得多。

Okay. Fair enough. And of course, all my best wishes to Ken and his family. Thanks.

了解。這樣說得通。當然，也把我最誠摯的祝福送給 Ken 和他的家人。謝謝。

Thanks, Steve.

謝謝你，Steve。

Amitabh Passi, UBS.

Amitabh Passi，UBS。

Jim, I think this morning one of your Japanese competitors reported and guided for flat volume in the September quarter versus your low double-digit increase. Should we take that to mean that you're potentially getting share in the third quarter relative to your competitors and what does that imply in terms of downside risk to pricing is removed through the rest of the year. And then just as a follow-up you talked about some capacity still left in your share buyback plan. Can you just remind us how much is left in your buyback plan?

Jim，我想今天早上你們的一家日本競爭對手公布財報並指引，9 月季度的出貨量持平；相較之下你們是低雙位數成長。我們是否可以解讀為你們第三季可能相對競爭對手在拿到市佔？這又代表今年剩餘時間價格下行風險是否有所消除？另外追問一下，你提到股票回購計畫還有一些額度。你能提醒我們回購計畫還剩多少嗎？

On the latter question, I think about $300 million is left in the existing buyback program. On our competitor's announcements this morning I think you should talk to them. The thing for you to think about analytically is their customer portfolio and what's happening with their customers.

關於後一個問題，我想現有回購計畫大約還剩 3 億美元。至於競爭對手今天早上的公告，我想你應該去問他們。你在分析上應該思考的是他們的客戶組合，以及他們的客戶目前發生了什麼。

Okay.

好的。

(multiple speakers) -- what's happening with our customers. I do not anticipate that we are going to experience anything other than moderate price declines as we talked about.

（多位發言者）——我們的客戶目前的狀況。我不預期我們會遇到除了我們先前談到的溫和價格下滑之外的情況。

Okay appreciated. Thanks, Jim.

好的，了解。謝謝，Jim。

Ehud Gelblum, Morgan Stanley.

Ehud Gelblum，Morgan Stanley。

Jim, couple questions. First, on Dow Corning a little bit aside from the current conversation, did I hear you correctly incentive volumes and margins were up, competitors like [Bocker were] down and expect from the macro that Dow Corning should be doing probably a little bit worse? Just trying to understand the correlation. I know there was the one-time, but in terms of revenue it sounds as though revenue was doing better there. So wanted to understand it. Did I misunderstand something or is something else going on there that is maybe one-time in nature or what is the difference there?

Jim，幾個問題。第一個，關於 Dow Corning，先稍微離題一下：我是否聽對了，你說激勵性（incentive）出貨量與毛利率上升，而像 [Bocker] 這類競爭對手則下滑；而從總體環境來看，Dow Corning 理應表現可能更差一些？我只是想理解其中的關聯性。我知道有一次性因素，但就營收而言，聽起來那邊的營收表現更好。所以想弄清楚。是我誤解了什麼，還是那邊有其他可能屬於一次性的因素，或是差異到底在哪裡？

Then on SCP, I think you mentioned something about signing a multi-quarter deal with I believe it was a new customer -- I'm not sure if it was a new customer or existing customer, but if you could give us some more clarity on that, that would be great. And then can you give us an update on the Gorilla side, how the yield improvements are impacting your long-term growth. I understand that in the near-term there was an impact to mix in Q2 that you couldn't supply and therefore that might be why it's so strong in Q3 but if we expand over multiple quarters, if you can help us correlate your previous comments on yield improvements over the last couple of quarters to what we should be expecting from Gorilla going forward.

第二個，關於 SCP，我想你提到與（我記得是）一位新客戶簽了跨多季的合約——我不確定是新客戶還是既有客戶；如果你能更清楚說明會很好。第三個，請你更新一下 Gorilla 方面：良率改善如何影響你們的長期成長。我理解短期內第二季因為組合影響，你們無法供應，因此第三季才會看起來很強；但若拉長到多個季度，你能否協助我們把你們過去幾季對良率改善的評論，與未來 Gorilla 的展望做個連結？

So I will try to get those questions. So on Gorilla, over time our customers are improving their yields as they take our glass and finish it. We do not believe that that yield improvement had any impact on the Q2. We think we had more significant impact from yields last year and we think it's a more gradual improvement. The comment on Q2 was really around a mix related with customers changing their orders from one thing to another very late in the quarter and we just couldn't react quickly enough.

我會試著回答這些問題。先談 Gorilla：隨著時間推進，我們的客戶在取得我們的玻璃並進行後段加工時，他們的良率正在提升。我們不認為這種良率提升對第二季有任何影響。我們認為去年良率的影響更顯著，而現在是較為逐步、漸進的改善。我們對第二季的評論，主要是與產品組合有關：客戶在季度很後段才把訂單從一種產品改到另一種，我們反應不夠快。

At SCP, it's an existing customer that we signed multi-quarter deal with. Dow Corning is a complicated company but our silicone business had volume increases and also had the benefit of, thankfully, some lower raw material cost structure. On the polysilicon side what we saw was slightly higher prices in the quarter. Polysilicon, which is perhaps the one that has more comparisons to Bocker -- it's a very difficult industry to predict right now because of what's going on in the solar industry. But we think that Hemlock did quite well in the most recent quarter. But it's a really hard industry to predict right now.

至於 SCP，是我們與一位既有客戶簽下的跨多季合約。Dow Corning 是一家很複雜的公司，但我們的矽酮（silicone）業務出貨量增加，同時也受惠於（幸運的是）較低的原物料成本結構。在多晶矽方面，我們看到本季價格略有上升。多晶矽可能是與 Bocker 更可比的那一塊——由於太陽能產業目前的狀況，這個產業現在非常難以預測。但我們認為 Hemlock 在最近一季表現相當不錯。不過這確實是一個目前很難預測的產業。

Great. As a follow up, was it the mix shift in Q2 that is causing the strong growth into Q3 or is it the seasonal trend?

很好。追問一下：第二季的組合轉移是否造成第三季的強勁成長，還是季節性趨勢所致？

I'm sorry. Relative to Gorilla?

抱歉。你是指 Gorilla 嗎？

Correct Your guidance for Q3 is strong for Gorilla and I'm wondering if that is seasonal or that's because you couldn't meet some demand in Q2 because of this late quarter mix shift and therefore that got pushed into Q3 and we're seeing a one-time bump.

對。你們對第三季的 Gorilla 指引很強，我想知道這是季節性因素，還是因為第二季末的組合轉移導致你們無法滿足部分需求，於是需求被遞延到第三季，讓我們看到一次性的跳升。

No. We don't believe it's a one-time bump. We think it's related to strong end-market demand for our products, our customer's products using the glass.

不是。我們不認為那是一次性的跳升。我們認為這與終端市場對我們產品、以及使用我們玻璃的客戶產品之強勁需求有關。

Okay so we should be assuming that the yield improvement story that was an issue before is less of an issue like you said before and therefore we should be assuming nice strong growth for Gorilla going forward.

好的，所以我們應該假設，如你先前所說，先前曾是問題的良率改善這個故事現在已經不那麼是問題了，因此我們應該假設 Gorilla 未來將有相當強勁的成長。

Hope so

希望如此。

Okay. Appreciate it. Thanks.

好的。感謝。謝謝。

Jim Suva, Citibank.

Jim Suva，花旗銀行。

Thank you very much to Corning and you and your team there. My first question has to do kind of just a bigger picture Jim as you look at the capacity expansions. Can you help people better understand the concern about excess supply coming into the industry of glass as there is quite a bit of idled capacity today and we know you we hear you talk about coming in with very measured ramps. But can you talk to us about the strategy of going into China? Is it more so that the customers are kind of strong-arming you into it or how come this industry isn't going into permanent oversupply.

非常感謝康寧以及你和你在那裡的團隊。我的第一個問題比較偏向大方向，Jim，當你看待產能擴張時。目前有相當多閒置產能，而我們也知道、也聽到你談到會以非常審慎的方式逐步拉升產能；你能否幫助大家更好地理解，玻璃產業可能出現供給過剩的疑慮？另外，你能談談進入中國的策略嗎？這比較像是客戶在強迫你們這麼做，還是為什麼這個產業不會走向永久性的供給過剩？

In the case of our new venture in China, our customers are partnered with Samsung. And this has been known, we actually have talked about this for quite a while. I think investors kind of hoped it wouldn't happen but we've always known it would happen at some point. Clearly Samsung will make their own announcements about the timing of their panel fab there but I think you should expect this not to be a sudden giant increase in capacity for the panel or the glass industry. We are building a factory to supply Samsung; it's a small factory; it's going to be relatively close to them. We're going to be very measured about how fast we ramp -- spend the money first and ramp the tanks.

就我們在中國的新合資案而言，我們的客戶與三星是合作夥伴。這件事大家早就知道了，我們其實也談了很久。我想投資人可能希望它不要發生，但我們一直都知道它終究會在某個時間點發生。很明顯，三星會就其面板廠的時程自行對外公告，但我認為你們應該預期，這不會是對面板或玻璃產業產能的突然、巨幅增加。我們正在建一座工廠來供應三星；這是一座小型工廠；而且會相對靠近他們。我們會非常審慎地控制拉升速度——先把資本支出花下去，再逐步把熔爐（tanks）拉升產能。

We're doing the exact same thing in Beijing. We're being very measured about how we bring up the capacity. I don't think you should expect us to do any further capital spending for glass in Korea or in our wholly-owned business in Japan or Taiwan. I think any capacity increases that we will get over the longer sweep of time will be around a productivity principally from Thin. I think that's by and large, my observation's probably true for the industry as a whole. I don't think you're going to be seeing a lot of new footprint there. So you should be thinking that this glass factory in China is very big and I will remind you that there is a significant amount of capacity in Korea that is off-line and likely to stay off-line.

我們在北京做的也是完全一樣的事。我們對於如何把產能拉上來非常審慎。我認為你們不應預期我們會在韓國或我們在日本、台灣的全資事業上再做任何玻璃相關的資本支出。我認為，從更長的時間跨度來看，我們能取得的任何產能增加，主要會來自 Thin 帶來的生產力提升。我想大體上，我的觀察對整個產業也大致成立。我不認為你們會看到大量新增的產能版圖。所以你們應該這樣想：這座在中國的玻璃工廠規模非常大；同時我也提醒你們，韓國有相當可觀的產能目前是停線狀態，而且很可能會持續停線。

And as my quick follow-up, when you mentioned that gross margins for the Company in total is going to increase about 1 percentage point. That's pretty good news. Is the strength behind that mostly driven by the increase of your wholly-owned utilization or is it a combination of other factors -- the strength from the wholly-owned last side of display?

另外我快速追問一下，當你提到公司整體毛利率將提升約 1 個百分點。這是相當好的消息。這背後的力道主要是來自你們全資事業的稼動率提升，還是其他因素的組合——例如顯示器全資端的強勁表現？

It's clearly the wholly-owned business with good volume growth this upcoming quarter, again moderate price decline should help our gross margin.

很明顯是全資事業；下個季度有不錯的出貨量成長，再加上溫和的價格下滑，應該會有助於我們的毛利率。

Thank you. Congratulations to you and your team according.

謝謝。也恭喜你和你的團隊。

Thanks, Jim.

謝謝，Jim。

George Notter, Jefferies and Company.

George Notter，Jefferies and Company。

I was curious about the decision to formulate a joint venture with Samsung in China. I think you certainly have the option to try to take the business to your wholly-owned division. What was the rationale there? Any flavor would be helpful. Thanks.

我想了解你們決定在中國與三星成立合資公司的考量。我想你們當然也可以選擇把這些業務導向你們的全資部門。當時的理由是什麼？任何補充說明都會很有幫助。謝謝。

Well I think we talked about before for Samsung when our original agreement, which is now almost 20 years old with them, they had the right if they wanted to put a panel operation in China that SCP could ship into them in consultation with them, we decided a better answer would be to build a new venture there. A small one and supply directly rather than ship in from Korea. But I am not at liberty to give you much more details than that. But they always had the right to self supply their panel fab in China from way back in 1995 when the original agreement was put in place.

我想我們之前談過，對三星而言，在我們最初的協議（現在與他們的協議已將近 20 年）中，他們擁有一項權利：如果他們想在中國設立面板營運，SCP 可以在與他們協商後向其出貨；我們認為更好的做法是在當地建立一個新的合資案。規模小一些，直接供貨，而不是從韓國運過去。但我不方便提供更多細節。不過他們一直都有這項權利：自 1995 年原始協議簽訂時起，就可以為其在中國的面板廠自供。

Thanks.

謝謝。

Carter Shoop, KeyBanc Capital Markets.

Carter Shoop，KeyBanc Capital Markets。

This is [Steve Shu] filling in for Carter. Thanks for taking my question. Can you guys talk about how your environmental tech division is positioned for the transition towards natural gas for the heavy duty truck sector?

我是 [Steve Shu]，代替 Carter。謝謝讓我提問。你們能談談你們的環境科技事業部，如何因應重型卡車產業轉向天然氣的趨勢嗎？

We are not expecting much, a significant switch in that at this stage. But clearly it could have an impact on the demand going forward because you don't need a diesel-particular filter. But we are not expecting a significant shift at this point in time.

在現階段我們不預期會有太多、或顯著的轉換。但很明顯，這可能會影響未來的需求，因為你不需要柴油微粒濾清器。不過就目前而言，我們不預期會有顯著的轉移。

Okay thank you very much.

好的，非常感謝。

Simona Jankowski, Goldman Sachs.

Simona Jankowski，高盛。

A couple of questions. First, I think you mentioned that half of your glass is now thin. Do you have an expectation of where that might be by year end or by next year? And then secondly, on the China JV how much capacity do you think that will add to your combined wholly-owned and SCP capacity? And also when you talk about the $100 million investment there, is that just a net reduction to your free cash flow or is there any other offset to that that you can have a by reducing your capital intensity elsewhere?

有幾個問題。第一，我想你提到你們現在有一半的玻璃是薄化（thin）。你們預期到年底或到明年會到什麼程度？第二，關於中國的合資案，你認為它會為你們合併後的全資產能與 SCP 產能增加多少？另外，當你談到在那裡投資 1 億美元時，這只是對你們自由現金流的淨減少，還是你們可以透過在其他地方降低資本密集度而有任何抵銷？

On the investment in the new glass venture there what you will see is a higher dividend from SCP for an extra $100 million sometime in the back half of the year and then we will turn around and put that into the equity portion of the new China factory. That is the only Corning financial impact and so essentially neutral and free cash flow over the course of the back half of the year. I don't have the exact timing of which quarter it will fall. But we could get the dividend in one quarter and the investment in another but essentially it's neutral to our free cash flow for the new venture. In terms of Thin, we are not giving out a forecast but we continue to expect that every quarter the percentage of glass going thin will increase and it will do so again next year and the year after. Ultimately, we will get to a point where almost all the glass will be thin.

關於那個新的玻璃合資案投資，你們會看到的是：今年下半年某個時間點，SCP 會多發放 1 億美元的股利，然後我們會把這筆錢投入到中國新工廠的股權出資部分。這就是康寧唯一的財務影響，因此在今年下半年整體而言，對自由現金流基本上是中性。我沒有確切的時間點會落在哪一季。但我們可能在某一季收到股利、在另一季完成投資；不過就新合資案而言，對我們下半年自由現金流本質上是中性的。至於 Thin，我們不提供預測，但我們仍預期每一季薄化玻璃的占比都會提高，明年、後年也會繼續提高。最終，我們會到達幾乎所有玻璃都會是薄化的狀態。

And in terms of how much of capacity will increase overall with the China JV?

那麼就中國合資案而言，整體產能會增加多少？

It's a very small number. We're not giving out the exact number but it's a small number.

是一個非常小的數字。我們不會公布確切數字，但它很小。

Okay, thank you.

好的，謝謝。

Jagadish Iyer, Piper Jaffray.

Jagadish Iyer，Piper Jaffray。

Two questions, Jim. First, how should we think about the mix between the Gorilla Glass 1 and the Gorilla Glass 2. Is there a qualification cycle or is it a seamless replacement and then is it fair to assume that 2013 will be majority of Gorilla Glass 2 and then I have a follow-up.

兩個問題，Jim。第一，我們應該如何看待 Gorilla Glass 1 與 Gorilla Glass 2 之間的產品組合？是否需要認證/導入週期，還是可以無縫替換？另外，是否可以合理假設 2013 年將以 Gorilla Glass 2 為主？我還有一個追問。

The answer to the latter is yes. What we find is the transition is generally around a model change. People very rarely have an existing model that has one glass in it and then will change to another. So we've been going through this but the transition is going seamlessly and customers are enthusiastic about Gorilla Glass 2.

後者的答案是肯定的。我們發現轉換通常發生在機種改款時。很少有人會在同一個既有機種上，原本用某一種玻璃，然後再改成另一種。所以我們一直在推進這件事；轉換進行得很順利，而且客戶對 Gorilla Glass 2 很有興趣。

And this year do you think, can you give us some idea about the mix between Gorilla Glass 1 and 2, please?

那麼今年您認為，能否請您給我們一些關於 Gorilla Glass 1 與 2 之間組合占比的概念？

We are not disclosing that. I'm sorry.

我們不會揭露這個。很抱歉。

Okay. Just a quick follow-up. You gave some thoughts on the stimulus in China for the second half of this year but you also mentioned there is some risk from China. If you look at the track record in terms of what the stimulus has done in China there was a big uptick in LCD a few years ago. But can you kind of give in that context how do you see in terms of how things are most likely to play out this time versus the last time?

好的。再快速追問一下。您談到今年下半年中國的刺激措施，但也提到來自中國有一些風險。如果回顧刺激措施在中國的效果，幾年前 LCD 曾出現大幅上升。但在這樣的背景下，您能否談談這次相較於上次，您認為事情最可能會如何發展？

So it's a tricky thing to judge because when that stimulus was done three years ago, originally the penetration of LCDs was much lower than it was today. But it's our belief that this will have some impact because the spread of LCDs is still moving, I'll characterize it westward in the country. And so we think it will be positive but maybe not as big of a pop is what we experienced when they rolled it out three years ago.

這很難判斷，因為三年前推出那次刺激時，LCD 的滲透率遠低於今天。但我們相信這次仍會帶來一些影響，因為 LCD 的普及仍在推進，我會形容為在國內向西擴散。因此我們認為會是正面影響，但可能不會像三年前推出時那樣出現那麼大的跳升。

Thank you.

謝謝。

John, I think we have time for a couple more questions.

John，我想我們還有時間再問兩個問題。

Medhi Hosseini, Susquehanna International

Medhi Hosseini，Susquehanna International

Two questions. One on balance sheet. Jim, how should we think about the free cash flow either in terms of absolute value or margin in the second half of the year? And I have a follow-up.

兩個問題。第一個關於資產負債表。Jim，我們應該如何看待今年下半年自由現金流，不論是絕對金額或是利潤率？我還有一個追問。

We expect free cash flow -- it's really two components. So I'll first say that we think operating cash flow will continue to be excellent in the third and fourth quarter. On free cash flow, it will all depend on the timing of the closing of the BD transaction. So if it closes in the third quarter it's obviously a very big outflow. Displays in the fourth quarter would affect that one, but other than that we expect strong operating cash flow and I don't think our capital spending will be all that different in the quarters going forward.

我們預期自由現金流——其實有兩個組成部分。我先說，我們認為第三季與第四季的營運現金流將持續非常出色。至於自由現金流，將完全取決於 BD 交易完成交割的時間點。因此若在第三季完成，顯然會有非常大的現金流出。第四季的顯示器業務也會影響那一項；除此之外，我們預期營運現金流強勁，而且我不認為我們未來各季的資本支出會有太大差異。

Sure. But on the blended basis for the second half should we expect free cash flow margin of mid single-digit?

了解。但若以今年下半年合併來看，我們是否應預期自由現金流利潤率在中個位數？

I'm sorry we are not quantifying the forecast of free cash flow.

抱歉，我們不會量化自由現金流的預測。

Okay. And moving on to your comment about the total number of TV shipment for this year low 220 million. To what extent are you concerned that there may have been demand pulled in due to Olympics or do we need to be even focusing on this given how Olympics have played into the TV shipment in the prior years?

好的。再談到您對今年電視總出貨量約低 2.2 億台的評論。您在多大程度上擔心，需求可能因奧運而提前拉貨？或者考量過去幾年奧運對電視出貨的影響，我們是否甚至不需要太聚焦這點？

It's always difficult for us to judge exactly sporting events and the impact on television demand. I would say compared to prior Olympics, remember the Chinese Olympics, I would say there is much less talk about the Olympics being a big driver in televisions this year. We do suspect there was some influence because of European soccer earlier this year may have had a little bit of influence, but we are not expecting as much of an impact from this Olympics as we did in 2008 with the Chinese Olympics.

對我們而言，體育賽事及其對電視需求的影響一向很難精準判斷。我會說，相較於以往的奧運——例如中國奧運——今年關於奧運會成為電視銷售重大驅動因素的討論少很多。我們確實懷疑有一些影響，因為今年稍早的歐洲足球賽事可能帶來了一點作用，但我們不預期本屆奧運的影響會像 2008 年中國奧運那麼大。

Got it. Thank you.

了解。謝謝。

Andrew Huang, Sterne Agee.

Andrew Huang，Sterne Agee。

Correct me if I'm wrong but I thought I heard you say that SCP would be transferring some equipment from Korea to Suzhou for the new JV. So first is that correct and can we take that to mean there would be very little net increase in glass capacity?

如果我沒聽錯的話，我以為我聽到您說 SCP 會把一些設備從韓國轉移到蘇州，用於新的合資企業。第一，這是否正確？第二，我們是否可以理解為玻璃產能的淨增加會非常有限？

They are transferring a small amount of equipment but as I've said several times now the capacity from this new facility which is still quite a ways in the future is not a very large amount.

他們會轉移少量設備，但正如我已經說過好幾次，這座新設施所帶來的產能——而且距離投產仍相當久——並不是很大的量。

Okay and then as a follow-on question, I think you mentioned at the last minute there was a change in demand for Gorilla glass. Can you give us a little more color on what that change was?

好的。接著追問，我想您提到在最後一刻 Gorilla Glass 的需求出現變化。您能否多提供一些細節，說明那個變化是什麼？

We have a customer who had ordered a particular products in Gorilla and then reduce that and changed it -- mixed into other products and we were unable to respond quite fast enough.

我們有一位客戶原本訂購某一款使用 Gorilla 的特定產品，之後把該訂單量下修並改變配置——轉而混入其他產品——而我們未能足夠快速地做出回應。

Okay thank you very much.

好的，非常感謝。

Thanks, Andrew and thank you, Jim. Thank you all for joining us today. A playback of the call -- I'm sorry, Jim go ahead.

謝謝你，Andrew，也謝謝你，Jim。感謝各位今天加入我們。本次電話會議的重播——抱歉，Jim 你先請。

We have one more announcement before we wrap up. We do have one IR announcement. We will be speaking at the Citi Technology Conference on Thursday, September 6, in New York City. Just like to offer one summary comment about our quarter. I think we're making progress on our plan to form bottom and display. We've had one quarter of moderate price declines behind us and we're executing on another quarter of that.

在結束之前我們還有一項公告。我們有一則投資人關係（IR）公告。我們將於 9 月 6 日（週四）在紐約市的 Citi 科技大會發表演說。我也想對本季做一個簡短總結。我認為我們在推動顯示器業務觸底的計畫上正取得進展。我們已經走過一季溫和的價格下滑，並且正在執行另一季同樣的情況。

We will only know for sure when we see bottom in the rear view mirror but I actually feel very good about our progress so far. Our other businesses are on track to gross sales and improved profitability. Obviously we are not happy with increasing economic headwinds affecting some of them. The worry is that economic headwinds make the march-up results perhaps be slightly smaller. So we can't control the world economies but we can control our costs and we tend to do so when we see more weakness. We look forward to updating you at the end of quarter three. Ann?

只有當我們在後視鏡裡看到真正的底部時，我們才會百分之百確定，但我其實對目前的進展感到非常樂觀。我們其他業務也正按計畫推進，以提升毛銷售額並改善獲利能力。顯然，我們對於不斷增加的經濟逆風影響其中一些業務並不滿意。令人擔心的是，經濟逆風可能使回升的成果略小一些。我們無法控制全球經濟，但我們可以控制成本，而且當我們看到更大的疲弱時，通常會這麼做。我們期待在第三季末向各位更新。Ann？

Thanks Jim. A playback of today's call is available beginning at 10.30 AM Eastern Standard Time and will run until 5 PM Eastern Standard Time on Wednesday, August 8. To listen dial 800-475-6701. The access code is 253774. Of course an audio cast is available on our website during that time. John, that concludes our call. Please disconnect all lines.

謝謝 Jim。今天電話會議的重播將於美東時間上午 10:30 開始提供，並持續至 8 月 8 日（週三）美東時間下午 5 點。收聽請撥打 800-475-6701。存取碼為 253774。當然，在此期間我們的網站也提供音訊網路直播。John，我們的電話會議到此結束。請切斷所有線路。