康寧 (GLW) 2012 Q4 法說會逐字稿

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

各位女士、先生，感謝各位耐心等候，歡迎參加康寧公司（Corning Incorporated）2012 年第四季財報結果電話會議。我很榮幸將電話會議交給投資人關係總監 Ann Nicholson 女士。請開始。

Thank you, John, and good morning. Welcome to Corning's fourth quarter conference call. Jim Flaws, Vice Chairman and Chief Financial Officer, will start the call with some prepared remarks.

謝謝你，John，大家早安。歡迎參加康寧第四季電話會議。副董事長兼財務長 Jim Flaws 將以一些事先準備的談話開場。

But before Jim begins, 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. These remarks involve a number of risks, uncertainties and other factors that could cause actual results to differ materially. These factors are detailed in the Company's SEC reports.

但在 Jim 開始之前，我想提醒各位，今天的發言包含前瞻性陳述，屬於 1995 年《私人證券訴訟改革法》（Private Securities Litigation Reform Act of 1995）所界定之範圍。這些發言涉及多項風險、不確定性及其他因素，可能導致實際結果出現重大差異。相關因素已在本公司向 SEC 提交的報告中詳述。

Now I'd like to turn the call over to Jim.

現在我想把電話會議交給 Jim。

Thanks, Ann. Good morning, everyone.

謝謝你，Ann。各位早安。

I'd like to begin today by looking back at 2012. This time last year, we knew we were facing some external headwinds. First, in our display business, second in the solar business at our equity venture Dow Corning, and third in the macroeconomic environment.

我想先從回顧 2012 年開始。在去年這個時候，我們知道正面臨一些外部逆風。第一，在我們的顯示器業務；第二，在我們權益法投資合資企業 Dow Corning 的太陽能業務；第三，在整體總體經濟環境。

In our LCD glass segment, we had experienced significant pricing step down in Q4 of 2011 that would continue into Q1 of 2012. Those price declines unfortunately reset the corporation's profitability to a lower level. So we laid out a plan to first stabilize the Company's earnings and second to grow earnings again.

在我們的 LCD 玻璃事業部，我們在 2011 年第四季經歷了顯著的價格下調，並將延續到 2012 年第一季。不幸的是，這些降價使公司的獲利能力重設到較低水準。因此我們提出一項計畫：第一，先穩定公司的獲利；第二，再讓獲利重新成長。

We call this plan Form Bottom March Up. The key element of earnings stabilization was to moderate our price declines in LCD glass and also to regain positive momentum in the Display segment. And our plan to grow earnings again would be driven by our Telecom, Environmental, Specialty Materials and Life Sciences segments.

我們稱這項計畫為「Form Bottom March Up」。獲利穩定的關鍵要素，是在 LCD 玻璃方面放緩價格下跌，同時讓顯示器事業部重新取得正向動能。而讓獲利再次成長的計畫，將由我們的電信、環境、特殊材料與生命科學事業部帶動。

I'm very pleased to say now one year later we've made great progress against both components over the course of 2012. Now let me share some highlights from the year. Coming into 2012, we quickly brought our LCD glass supply in balance with our demand.

我很高興地表示，一年後的今天，我們在 2012 年期間於這兩個面向都取得了很大進展。現在讓我分享一些年度重點。進入 2012 年後，我們很快就讓 LCD 玻璃供給與需求恢復平衡。

We successfully moderated our price declines in Q2 and Q3, and late in the third quarter we entered new agreements with some LCD customers. Now these agreements cause Q4 price declines to be slightly above Q3 levels in our wholly owned business, but we believe these agreements are an integral part of our plan to stabilize our Display business. And now our Q1 price guidance is that we expect price declines to moderate from what we experienced in Q4.

我們在第二季與第三季成功放緩了價格下跌，並在第三季末與部分 LCD 客戶簽訂了新的協議。目前這些協議使我們全資業務在第四季的價格下跌幅度略高於第三季水準，但我們相信這些協議是我們穩定顯示器業務計畫中不可或缺的一部分。而對於第一季的價格指引，我們預期價格下跌將較第四季的情況有所放緩。

We achieved record sales and expanded gross margins of our non-display businesses. We feel particularly good about achieving these results despite the worldwide economy's significant negative impact in all our segments. And when the economic malaise affected our business in the second half, we quickly took actions to control costs, manufacturing groups responded with great performance, and commercial groups captured every opportunity. We also retained our strong balance sheet while returning cash to shareholders in the form of an increased dividend and completion of a major stock buyback.

我們的非顯示器業務創下銷售新高，且毛利率擴大。我們對能達成這些成果感到特別振奮，因為全球經濟對我們所有事業部都造成了顯著的負面影響。當經濟低迷在下半年影響我們的業務時，我們迅速採取行動控管成本；製造團隊展現了優異表現；商務團隊也把握每一個機會。同時，我們在維持強健資產負債表的情況下，透過提高股利與完成一項大型庫藏股回購，將現金回饋給股東。

We closed a significant acquisition in Life Sciences, positioning it to become a $1 billion dollar business. And lastly, our young, fast growing, Gorilla Glass business achieved $1 billion in sales, a 44% increase over 2011, so something we take tremendous pride in, it's a great example of how we bring life changing innovations to market, and demonstrates our ability to generate big revenue streams quickly. Now I'd like to turn to quarter four with some highlights.

我們在生命科學領域完成一項重要併購，使其具備成為 10 億美元規模業務的定位。最後，我們年輕且快速成長的 Gorilla Glass 業務達成 10 億美元銷售額，較 2011 年成長 44%；這是我們引以為傲的成果，也是我們將改變生活的創新推向市場的絕佳例證，並展現我們快速創造大型營收來源的能力。接下來我想談談第四季的一些重點。

Quarter four was a record sales quarter in our 161-year history, accompanying our new full year record sales. I think more importantly, we returned to year-over-year EPS growth in the quarter before special items. This demonstrates progress against our plan to Form Bottom March Up, and this improvement would have been even better if not for the sudden weakening of the yen to the US dollar exchange rate or Hemlock's business conditions, and I'll talk more about these later.

第四季是我們 161 年歷史中銷售額最高的一季，也帶動全年銷售額創新高。我認為更重要的是，在扣除特殊項目之前，本季每股盈餘（EPS）恢復年對年成長。這顯示我們在「Form Bottom March Up」計畫上取得進展；若非日圓兌美元匯率突然走弱或 Hemlock 的營運狀況影響，改善幅度本可更佳，稍後我會再多談。

Both our Display and Specialty Materials segment sales exceeded our initial expectations for the quarter. We believe Display demand was driven by retail expectations for Q1, especially for Chinese New Year, and I'll comment more on that in a minute. Specialty Materials' Gorilla Glass business grew almost 15% sequentially as the supply chain dealt with surging smartphone growth and new product launches. On the other hand, Environmental Technologies sales were lower than expected as the light duty auto industry took longer year-end shut downs and adjusted inventory in a continued softer demand environment.

我們的顯示器與特殊材料兩個事業部，本季銷售均超出原先預期。我們認為顯示器需求主要由零售端對第一季的預期所帶動，特別是因應農曆新年；我稍後會再評論。特殊材料的 Gorilla Glass 業務在供應鏈因智慧型手機成長激增與新產品上市而調整之際，季對季成長近 15%。另一方面，環境技術的銷售低於預期，因為輕型車產業年終停工時間較長，並在需求持續偏弱的環境下調整庫存。

In light of the current situation, the market for solar grade polysilicon, Hemlock Semiconductor has seen steep declines in volume and pricing in 2012. This negatively impacted our equity earnings in the fourth quarter. And lastly, the yen/dollar exchange rate moved very sharply and significantly in December, negatively impacting our earnings in Q4, both sequentially and year-over-year and something we are watching closely as we enter 2013.

鑑於目前情勢，太陽能級多晶矽市場方面，Hemlock Semiconductor 在 2012 年的出貨量與價格均出現大幅下滑。這對我們第四季的權益法投資收益造成負面影響。最後，日圓/美元匯率在 12 月出現非常急劇且顯著的變動，對我們第四季獲利造成負面影響，無論是季對季或年對年；在進入 2013 年之際，我們也正密切關注此一變化。

Now let me delve into the fourth quarter details. In quarter four, we had a number of special items. I had previewed these for you on our Q3 call.

現在讓我深入說明第四季的細節。第四季我們有若干特殊項目。我在第三季電話會議時已先向各位預告過。

We took a corporate-wide restructuring charge to reduce our fixed cost. We actually realized translation gains from the liquidation of an internal entity. And we also took asset impairment charges in Specialty Materials for our large cover glass operations, and at our major equity ventures Dow Corning Corporation and Samsung Corning Precision. I'll report our results today ex-specials which is a non-GAAP financial measure. Please refer to GAAP reconciliations on our website.

我們提列了全公司範圍的重整費用，以降低固定成本。我們也因清算一個內部實體而實現了匯兌收益。此外，我們在特殊材料事業部的大尺寸蓋板玻璃營運，以及在主要權益法投資合資企業 Dow Corning Corporation 與 Samsung Corning Precision，提列了資產減損費用。今天我將以扣除特殊項目後（ex-specials）的基礎報告結果，這是一項非 GAAP 財務衡量指標。請參閱我們網站上的 GAAP 調節表。

I'm pleased to announce our results, both sales and earnings per share were above consensus for the quarter. Fourth quarter sales were $2.15 billion, up 5% versus Q3 and 14% from a year ago. Gross margins ex-specials were 43%, consistent sequentially as we had expected. SG&A and R&D were flat on a dollar basis sequentially versus a year ago, they were also flat on a dollar basis and down as a percentage of sales reflecting our efforts at cost control.

我很高興宣布我們的結果：本季銷售與每股盈餘均高於市場共識預期。第四季銷售額為 21.5 億美元，較第三季成長 5%，較去年同期成長 14%。扣除特殊項目後的毛利率為 43%，如我們預期，季對季持平。SG&A 與 R&D 以金額計較去年同期季對季持平；同時以金額計也持平，且占銷售比重下降，反映我們在成本控管上的努力。

Gross equity earnings of $198 million excluding specials were down about 14% sequentially and worse than our expectations, driven by even further volume declines at Dow Corning's subsidiary, Hemlock Semiconductor Corporation. I'll expand my comments on Hemlock later in the call.

扣除特殊項目後的權益法投資毛收益為 1.98 億美元，季對季下滑約 14%，且低於我們的預期，主因為 Dow Corning 旗下子公司 Hemlock Semiconductor Corporation 的出貨量進一步下滑。我稍後會在電話會議中進一步說明 Hemlock 的情況。

And as I previewed, EPS excluding special items was $0.34, even with Q3 and up $0.01 from versus a year ago. EPS as stated here is a non-GAAP measure and reconciliation GAAP can be found on our website. Foreign exchange rates negatively impacted our sales by $21 million and net income by $16 million sequentially in the quarter.

如我先前預告，扣除特殊項目後的 EPS 為 0.34 美元，與第三季持平，並較去年同期增加 0.01 美元。此處所述 EPS 為非 GAAP 指標，GAAP 調節表可在我們網站上查閱。本季外匯匯率變動對銷售造成 2,100 萬美元的負面影響，並對淨利造成 1,600 萬美元的負面影響（季對季）。

Now for the year, sales were $8 billion, slightly up from 2011. Corporate gross margins ex-specials were down 2 percentage points, driven by the significant year-over-year price declines in our LCD glass business that I mentioned in my opening.

就全年而言，銷售額為80億美元，較2011年小幅成長。扣除特殊項目後的公司整體毛利率下降2個百分點，主要受我在開場提到的LCD玻璃業務顯著的年對年價格下跌所驅動。

Specialty Materials improved their gross margin by double-digits in 2012 driven by higher volumes in Gorilla Glass. We improved Gorilla manufacturing performance, and reduced the losses on our large scale covered glass for the Sony televisions.

2012年，特殊材料事業部的毛利率在Gorilla Glass出貨量增加帶動下，以兩位數幅度改善。我們提升了Gorilla的製造績效，並降低了為Sony電視提供的大尺寸覆蓋玻璃所造成的虧損。

Now moving down the income statement, gross equity earnings ex-specials fell 35%. Our effective tax rate increased for the year from 13% to 18%. The larger increase in Q4 reflects the accounting treatment that caught us up on the full year rate. Our full year tax rate was 18.4%.

接著往下看損益表，扣除特殊項目後的股權法投資收益總額下滑35%。我們的有效稅率全年由13%上升至18%。第四季較大的增幅反映了會計處理方式，使我們追溯調整至全年稅率。我們全年稅率為18.4%。

I'll have more to say about taxes later and also at our upcoming investor relations day, as the recent activity in Washington DC has actually benefited Corning. EPS for the year, excluding special items, was $1.29 versus $1.76 in 2011. The primary driver of the earnings decline year-over-year was the significant impact of LCD glass price declines in our wholly owned business at SCP and reductions in Dow Corning's equity earnings. Again, EPS as stated here, is a non-GAAP measure and a reconciliation can be found on our website.

稍後我會再談更多稅務議題，也會在即將舉行的投資人關係日進一步說明，因為華盛頓特區近期的動向其實對康寧有利。全年每股盈餘（不含特殊項目）為1.29美元，2011年為1.76美元。年對年獲利下滑的主要原因，是我們在SCP全資業務的LCD玻璃價格大幅下跌，以及Dow Corning股權法投資收益的減少所造成的顯著影響。再次提醒，此處所述的每股盈餘為非GAAP衡量指標，對帳表可於我們網站查閱。

Now, I'd like to turn to our detailed quarter four and full year segment results and I'll start with Display. Display sales were $800 million in Q4, an increase of 5% sequentially and 3% versus last year. The yen exchange rate negatively impacted sales by $27 million. Gross equity earnings ex-specials from our equity venture in Korea were $157 million in Q4, a decrease of 16% versus the third quarter. The results included Corning's share of non-recurring charges, approximately $12 million including pension expense.

接下來我想轉到第四季與全年各事業部的詳細結果，先從顯示科技開始。顯示科技第四季銷售額為8億美元，較前一季增加5%，較去年同期增加3%。日圓匯率對銷售額造成2,700萬美元的負面影響。我們在韓國的合資公司第四季扣除特殊項目後的股權法投資收益為1.57億美元，較第三季下降16%。結果包含康寧分攤的一次性費用，約1,200萬美元（含退休金費用）。

During Q4, SCP also took some restructuring actions totaling $18 million in charges to our equity earnings, mainly for some asset write-offs. For your modeling purposes, Display equity companies fourth quarter LCD sales were about $749 million, an increase of 1% versus the third quarter. As a reminder, this represents SCP's LCD sales only. Our public filings report SCP total sales, which include various other products such as CRT, glass, and ITO targets.

第四季期間，SCP也採取了一些重整措施，相關費用合計1,800萬美元，計入我們的股權法投資收益，主要為部分資產沖銷。供各位建模參考，顯示科技股權法公司第四季LCD銷售額約為7.49億美元，較第三季增加1%。提醒一下，這僅代表SCP的LCD銷售。我們的公開申報文件揭露的是SCP總銷售額，其中包含CRT玻璃、ITO靶材等各類其他產品。

As we expected, our wholly owned LCD glass volumes were up in the mid-teens sequentially and more than a third year-over-year, driven by customer utilization increases and our new agreements. Volumes at SCP were up slightly sequentially and year-over-year. Volume increases were in line with their customer utilization rates.

如我們預期，我們全資LCD玻璃出貨量較前一季成長約中十位數百分比，年對年則成長超過三分之一，主要受客戶稼動率提升及新協議帶動。SCP的出貨量較前一季及去年同期均小幅增加。出貨量增幅與其客戶稼動率相符。

Now recall in Q3 of 2012, we signed new agreements with some key customers. These agreements stabilized Corning's share at each and maintained a fixed relationship between Corning's pricing and competitive pricing at that customer. So far, these new agreements have had their intended effect of keeping our share of these customers stable as required by the terms of the agreement. This share stability has allowed us to better forecast our capacity needs and, thus, to maintain high levels of capacity utilization at our plants and improve our cost performance.

回顧2012年第三季，我們與部分關鍵客戶簽署了新協議。這些協議穩定了康寧在各客戶的份額，並在該客戶端維持康寧定價與競爭性定價之間的固定關係。截至目前，這些新協議已達到預期效果，依協議條款要求維持我們在這些客戶的份額穩定。份額穩定使我們能更好地預測產能需求，進而在工廠維持高產能利用率並改善成本表現。

We also explained that initially we expected those new agreements would result in slightly higher price declines in Q4 than in the prior two quarters due to some initial adjustments to line up our prices with the requirements of the new agreements. In quarter four, we did in fact see middle-single-digit price declines in our wholly owned business, however, SCP sales saw prices declines remained more moderate in Q4. Net income ex-specials were down 8% sequentially driven primarily by the lower equity earnings at SCP.

我們也說明過，一開始我們預期這些新協議會使第四季的價格下跌幅度略高於前兩季，原因是需要先做一些初始調整，使我們的價格符合新協議要求。在第四季，我們全資業務的確出現中個位數百分比的價格下跌；然而，SCP銷售的價格下跌在第四季仍較為溫和。扣除特殊項目後的淨利較前一季下降8%，主要由SCP股權法投資收益較低所致。

For the full year, Display sales were $2.9 billion, down 8%. Higher volumes were more than offset by price declines. Sales for the full year were not impacted by changes in the yen exchange rate.

就全年而言，顯示科技銷售額為29億美元，下降8%。較高的出貨量被價格下跌所抵銷且有餘。全年銷售額未受日圓匯率變動影響。

Turning to industry data, the glass market for 2012 was about 3.7 billion square feet, up about 15%. On the supply chain front, we estimate that inventory grew, measured in weeks, the trunk in absolute square feet during the quarter. Because Q1 is seasonally lower at retail, we're watching inventories closely, but I will comment more on the supply chain in the outlook section.

轉向產業數據，2012年玻璃市場約為37億平方英尺，成長約15%。在供應鏈方面，我們估計本季庫存（以週數衡量）增加，且以絕對平方英尺計的庫存也增加。由於第一季零售端具有季節性較低的特性，我們正密切關注庫存狀況；我會在展望部分對供應鏈再多做評論。

As retail data for quarter four begins to come in, we estimate retail glass demand was approximately 3.5 billion square feet in 2012, as expected. LCD television unit demand was essentially flat year-over-year on a worldwide basis. However, if you take out Japan, where the absence of the Echo Point tax credit caused TV sales to be down 60%, the worldwide television unit demand last year was up 3%. We believe the weak macro economy dampened demand during the year.

隨著第四季零售數據陸續出爐，我們估計2012年零售端玻璃需求約為35億平方英尺，符合預期。全球LCD電視出貨量需求年對年基本持平。然而，若排除日本（因缺少Eco Point稅賦抵減導致電視銷售下滑60%），去年全球電視出貨量需求成長3%。我們認為疲弱的總體經濟在全年抑制了需求。

However, very importantly for us, large size televisions continued to sell well all year, driving the average screen size higher by two inches in 2012, and 50-inch plus televisions grew by more than 50% in 2012. And based upon what we saw at the Consumer Electronics Show we have expectations of this trend continuing next year.

不過，對我們而言非常重要的是，大尺寸電視全年持續熱銷，使2012年的平均螢幕尺寸增加了2吋，而50吋以上電視在2012年的成長超過50%。並且根據我們在消費性電子展所見，我們預期此趨勢明年將持續。

Now turning to Telecom, quarter four sales were $540 million, up 3% sequentially and 10% year-over-year. The ramp of Australia's NBN project and reconstruction efforts followed by Hurricane Sandy drove the sequential increase. The year-over-year increase was also driven by the NBN project and increased sales of fiber to China.

接著看電信事業，第四季銷售額為5.40億美元，較前一季成長3%，較去年同期成長10%。澳洲NBN專案的加速推進，以及颶風珊迪後的重建工作，帶動了季對季成長。年對年成長同樣由NBN專案帶動，並受對中國光纖銷售增加所推動。

Net income ex-specials was up 23% sequentially. The primary driver of improvement in earnings from Q3 were the higher sales and improved manufacturing efficiencies.

扣除特殊項目後的淨利較前一季成長23%。第三季到第四季獲利改善的主要驅動因素是銷售增加與製造效率提升。

Q4 net income ex-specials was up year-over-year by 105% or $22 million. Improvement in net income was driven by the 10% sales increase and manufacturing efficiencies.

第四季扣除特殊項目後的淨利較去年同期成長105%，或增加2,200萬美元。淨利改善主要由10%的銷售成長與製造效率提升所帶動。

For the full year, sales were $2.1 billion. Cable, Fiber-to-the-Home and wireless sales were up double-digit percents. We were quite pleased with these results given the weakening economy in the second half, and demand for fiber in China was strong in every quarter. Now Telecom's annual net income ex-specials, $135 million, was down 20%.

就全年而言，銷售額為21億美元。有線、光纖到府（FTTH）與無線相關銷售均以兩位數百分比成長。鑑於下半年經濟走弱，我們對這些結果相當滿意，而且中國的光纖需求在每一季都很強勁。不過，電信事業全年扣除特殊項目後的淨利為1.35億美元，下降20%。

This earnings decline for the full year was due mainly to weaker product mix in the first half of the year and non-repeat of compensation bonuses versus 2011 which were very low and 2012 which we intend to pay bonuses in Telecom.

全年獲利下滑主要是因為上半年產品組合較弱，以及相較2011年（當年獎金非常低）未能重複該等薪酬獎金因素；而2012年我們計畫在電信事業支付獎金。

In Environmental, Q4 sales were $219 million, down 6% sequentially versus our expectation of flat to down slightly. European demand for light duty diesel products fell further in the fourth quarter and the impact of year-end supply chain shut downs was greater than anticipated. Net income ex-specials was down 35% sequentially and 39% year-over-year, driven by these lower sales and lower production volumes.

在環境科技方面，第四季銷售額為2.19億美元，較前一季下降6%，低於我們原先預期的持平至小幅下滑。歐洲輕型柴油產品需求在第四季進一步下滑，且年末供應鏈停工的影響大於預期。扣除特殊項目後的淨利較前一季下降35%，較去年同期下降39%，主要受銷售下滑與產量降低所驅動。

For the year, Environmental sales were down 3%, driven primarily by lower sales of light duty diesel products in Europe. Heavy duty sales were up in 2012, but were impacted by, in the second half, by the slowing economy as Class A truck manufacturers adjusted production and their inventories. Environmental improved their gross margins 3 percentage points in 2012 due to strong manufacturing efficiency improvements despite the lower volumes.

就全年而言，環境事業銷售額下降3%，主要受歐洲輕型柴油產品銷售下滑所致。2012年重型產品銷售上升，但在下半年受到經濟放緩影響，因A級卡車製造商調整產量及其庫存。儘管銷量較低，環境事業仍因製造效率大幅改善，使2012年毛利率提升3個百分點。

In Specialty Materials, we had another record quarter with sales up 10% sequentially and 68% year-over-year. Gorilla Glass demand was up significantly in the quarter, driven by IT and handheld customers ramping for new product introductions.

在特殊材料事業，我們再度創下單季新高，銷售額較前一季成長10%，較去年同期成長68%。本季Gorilla Glass需求大幅上升，主要由IT與手持裝置客戶為新產品導入而加速拉貨所帶動。

Net income ex-specials was up slightly sequentially with improvements in Gorilla Glass gross margins. However, this was partially offset by increased research spending on some new innovations in glass.

扣除特殊項目後的淨利較前一季小幅上升，受惠於Gorilla Glass毛利率改善。然而，部分被玻璃若干新創新項目的研發支出增加所抵銷。

For the full year, sales were up 25% on an unprecedented demand for Gorilla Glass. Net income ex-specials for the full year improved primarily on expanding gross margins in Gorilla Glass business. Gorilla Glass gross margins, already above the corporate average in 2011, improved in 2012 on higher volumes.

就全年而言，受Gorilla Glass前所未有的需求帶動，銷售額成長25%。全年扣除特殊項目後的淨利，主要因Gorilla Glass業務毛利率擴張而改善。Gorilla Glass毛利率在2011年已高於公司平均，並於2012年在更高出貨量下進一步提升。

For those of you who were new to Corning's manufacturing processes, glass melting is a high fixed cost business, so when we get more glass volume, we get good variable margins, assuming we run efficiently, and this was the case in 2012. And we expect further gains in 2013 for Gorilla Glass.

對於剛接觸康寧製造流程的各位，玻璃熔融屬於高固定成本的業務，因此在我們取得更多玻璃產量時，只要運轉效率良好，就能帶來不錯的變動毛利，而2012年正是如此。我們也預期2013年Gorilla Glass將進一步提升。

In Life Sciences, our Q4 sales were up sequentially and year-over-year due to the additional sales from our large acquisition, which actually closed on October 31. The acquisition integration is just underway. It's going smoothly, and we expect this deal to be accretive to this segment. Net income ex-specials were up on the additional sales.

在生命科學事業，第四季銷售額較前一季及去年同期上升，原因是我們大型併購案帶來的額外銷售貢獻，該交易實際於10月31日完成交割。併購整合才剛開始。進展順利，我們預期此交易將對本事業部具增益效果。扣除特殊項目後的淨利因額外銷售而上升。

For the year, Life Sciences sales were $657 million, up primarily due to the Discovery Labware acquisition. Now net income was down year-over-year, but this was due to the acquisition expenses, deal integration costs and some specials related to it.

就全年而言，生命科學事業銷售額為6.57億美元，主要因Discovery Labware併購案所帶動。淨利較去年同期下降，但係因併購費用、交易整合成本，以及與其相關的若干特殊項目所致。

Now turning to Dow Corning, gross equity earnings ex-specials were down 13% in Q4 due to lower sales of polysilicon. Versus a year ago, silicone sales were up slightly, but polysilicon sales are much lower driven by dramatic lowering prices and lower volume due to the continuing softness of the solar market. This is reflected in the year-over-year gross equity earnings decline of 33%.

接著談Dow Corning，第四季扣除特殊項目後的權益法收益（毛額）下降13%，原因是多晶矽銷售下滑。相較一年前，矽酮銷售小幅上升，但多晶矽銷售大幅降低，主要受價格大幅下跌及太陽能市場持續疲弱導致的出貨量下降所影響。這也反映在權益法收益（毛額）年對年下降33%。

Now during the fourth quarter, Dow Corning took special charges of $175 million for workforce reductions in both silicones and polysilicon, and also for the write-offs of some polysilicon assets. Our share of these charges was $87 million.

第四季期間，Dow Corning就矽酮與多晶矽兩項業務的裁員，以及部分多晶矽資產的沖銷，認列1.75億美元的特殊費用。我們分攤的費用為8,700萬美元。

For 2012, Dow Corning sales, net income and our equity earnings were all down, driven primarily by the lower sales of polysilicon. The impact of lower polysilicon volume and pricing impacted 2012 equity earnings by approximately $150 million, with about $24 million of it happening in the fourth quarter.

2012年Dow Corning的銷售額、淨利以及我們的權益法收益皆下降，主要由多晶矽銷售下滑所致。多晶矽出貨量與價格下降對2012年權益法收益的影響約為1.5億美元，其中約2,400萬美元發生在第四季。

Now turning to the balance sheet, we ended the fourth quarter with $6.1 billion in cash, short-term investments. Capital spending for the quarter was $526 million. Free cash flow for the quarter was zero, but that's due to the closing of the Discovery Labware acquisition. As a reminder, free cash flow is actually a non-GAAP measure. The reconciliation to GAAP can be found on our website.

接著看資產負債表，我們在第四季末持有61億美元的現金與短期投資。本季資本支出為5.26億美元。本季自由現金流為零，但這是因為完成Discovery Labware併購案交割所致。提醒一下，自由現金流其實是非GAAP衡量指標。與GAAP的調節表可在我們的網站上查閱。

We completed our share repurchase program during the quarter and also acted to increase the dividend by 20% in the fourth quarter. We ended the quarter with approximately $1.5 billion in cash in the United States. Our capital spending for the year was $1.8 billion, about $100 million lower than our forecast and our current expectation remains that cap spending in 2013 will fall year-over-year to about $1.3 billion.

我們於本季完成庫藏股回購計畫，並在第四季將股利提高20%。本季末我們在美國境內持有約15億美元現金。全年資本支出為18億美元，較我們的預測低約1億美元；目前我們仍預期2013年資本支出將較去年下降至約13億美元。

And now to our outlook and I'll start with Display. Let me start with our view of the end market. We expect the retail market, as measured in square feet of glass, to be up mid- to high-single-digits. For reference, 2012 was 3.5 billion square feet. We think LCD television units will grow in the mid-single-digits, but area growth will be higher.

接下來談展望，我先從顯示事業開始。先談我們對終端市場的看法。我們預期以玻璃平方英尺衡量的零售市場將成長中到高個位數。供參考，2012年為35億平方英尺。我們認為LCD電視出貨台數將以中個位數成長，但面積成長將更高。

We believe the trend of consumers buying larger televisions will continue. We're not as bullish on the PC market growth, expecting 10% year-over-year unit growth, nearly all of it due to tablets, and monitor units are expected to be down slightly.

我們相信消費者購買更大尺寸電視的趨勢將持續。我們對PC市場成長則沒那麼樂觀，預期出貨台數年對年成長10%，幾乎全部來自平板電腦，而顯示器出貨預期將小幅下滑。

Now for quarter one. As we near the end of January, we see the quarter one LCD glass market declining mid-single-digits sequentially. This reflects the normal seasonality that we have seen in Display. Our wholly owned Display business and SCP combined are expected to be down as mid-single-digits.

再來看第一季。隨著我們接近1月底，我們看到第一季LCD玻璃市場較前一季下滑中個位數。這反映了我們在顯示事業所見到的正常季節性。我們全資的顯示事業與SCP合計，預期將下滑中個位數。

Recall, Q2 is actually the slowest season at retail, so the supply chain should be moderating Q1 to manage inventory. Now some of you may recall we expected the supply chain inventory to shrink in 2012 as measured in weeks. In fact, it actually expanded. Looking at 2013, however, we continue to believe it should shrink by about a half a week, but we admit it's a little bit of an unknown this early in the year. You should also note that the LCD glass market and volumes in Q1 will be up year-over-year reflecting a larger market.

請記得，第二季其實是零售端最淡的季節，因此供應鏈應在第一季放緩以管理庫存。各位可能也記得，我們曾預期2012年供應鏈庫存（以週數衡量）會縮減。事實上，它反而擴大了。不過展望2013年，我們仍認為庫存週數應縮減約半週，但也承認在年初這麼早的時間點仍有些不確定。你們也應注意，第一季LCD玻璃市場與出貨量將年對年成長，反映市場規模更大。

As for glass prices, recall again, that our new agreements with key customers. Last October, we explained that going forward after Q4 with our share stabilized and the industry maturing we expected price declines to moderate at all of our customers including those of the new agreements. The price decline that we expect in Q1 is less than Q4 in our wholly owned business.

至於玻璃價格，請再次回想我們與主要客戶簽訂的新協議。去年10月我們說明，隨著第四季後我們的市占趨於穩定且產業走向成熟，我們預期所有客戶（包含新協議客戶）的降價幅度將趨緩。我們預期第一季在全資業務的降價幅度將小於第四季。

Now at SCP, price declines did not increase with Q4, so they're expected to be about the same as our wholly owned business in Q1. As for our glass capacity, I want to reiterate we intend to diligently manage our capacity to supply as LCD enters its mature phase of growth. These new agreements actually help us better forecast our demand in 2013.

至於SCP，第四季的降價幅度並未擴大，因此預期第一季將與我們全資業務大致相同。至於玻璃產能，我想重申，隨著LCD進入成熟成長階段，我們將審慎管理產能以配合供應。這些新協議也確實有助於我們更好地預測2013年的需求。

Now in Q1, we continue to run at high utilizations to support demand and actually to rebuild some inventory for both our Gorilla and LCD glass businesses, both of which have inventories for us well below what we consider healthy. Doing so will provide us added flexibility for the growth later in the year.

第一季我們仍將維持高稼動率以支撐需求，並且實際上也為Gorilla與LCD玻璃兩項業務回補部分庫存；就我們而言，兩者的庫存都遠低於我們認為健康的水準。如此將使我們在年內稍後的成長上具備更高的彈性。

Now moving to Telecom, we expect Q1 sales to be consistent with the strong Q4, this puts them up 5% year-over-year driven primarily by the NBN ramp. In Environmental, we expect Q1 sales to be consistent sequentially, down 15% year-over-year across both light and heavy duty businesses. And that's comparing to a very strong market in Q1 of 2012 when we had record auto production, very high volumes in heavy duty diesel and a healthier light duty diesel market in Europe.

現在轉到電信業務，我們預期第一季銷售將與強勁的第四季一致，這使其年增5%，主要由NBN放量所帶動。在環境事業方面，我們預期第一季銷售與前一季大致持平，但在輕型與重型業務皆呈現年減15%。這是與2012年第一季非常強勁的市場相比，當時我們有創紀錄的汽車產量、重型柴油的高出貨量，以及歐洲較為健康的輕型柴油市場。

For the full year, we believe auto production will grow driven by strength in North America and Asia. We also believe tighter regulations in Europe and China will lead to growth in demand for our heavy duty diesel products.

就全年而言，我們認為汽車產量將在北美與亞洲的強勁帶動下成長。我們也相信歐洲與中國更嚴格的法規將帶動對我們重型柴油產品的需求成長。

Now Specialty Materials sales are expected to decline about 30% in Q1 off the very high growth of Gorilla in Q3 and Q4. Now for comparative purposes, I want to remind you that Gorilla sales have always been weakest in the first quarter. This is due to the industry seasonality. I think supply chain may be adjusting some inventory in Q1 after some build up in Q4.

接著，特種材料第一季銷售預期將下滑約30%，主要是因為Gorilla在第三季與第四季的高成長基期。為了便於比較，我想提醒各位，Gorilla的銷售一向在第一季最弱。這是由於產業的季節性因素。我認為供應鏈可能在第四季累積部分庫存後，於第一季進行一些庫存調整。

For the year, we expect double-digit market growth and it should be very strong driven by the penetration of touch in notebooks. We expect to see the impact on this in the second half of the year. Life Sciences, we expect sales to be up about 15% due to the added sales from our acquisition.

就全年而言，我們預期市場將有雙位數成長，並且在筆電觸控滲透率提升的帶動下表現非常強勁。我們預期在下半年會看到其影響。生命科學方面，我們預期銷售將成長約15%，主要來自我們併購所增加的銷售。

Now turning to Dow Corning, we expect equity earnings from Dow Corning to be down in the quarter. Silicone sales are expected to be about flat, but the demand for polysilicone at Dow Corning's consolidated subsidiary, Hemlock Semiconductor, is down severely, to about half of what we had in Q4. This will significantly impact the profitability of Dow Corning and, therefore, we expect equity earnings from Dow Corning to be only a few million dollars for quarter one.

接著談到Dow Corning，我們預期本季來自Dow Corning的權益法收益將下滑。矽膠（Silicone）銷售預期大致持平，但Dow Corning合併子公司Hemlock Semiconductor的多晶矽需求大幅下滑，約為第四季的一半。這將顯著影響Dow Corning的獲利能力，因此我們預期第一季來自Dow Corning的權益法收益僅有數百萬美元。

Now I'm going to take some extra time on the Hemlock situation this morning and I'll reference them again during our investor day. I'm going to comment mostly on the polysilicon portion of the solar industry. And I believe you know there is been significant impacts to other portions of the solar industry, wafer cells, installation, government subsidies, that are related and in some cases causing the impact to our poly market. I'll just pause to remind you that Hemlock also makes polysilicon for the semiconductor market and that part of our business remains fine, with prices strong and demand good.

今天早上我會多花一些時間談Hemlock的情況，並且在我們的投資人日也會再次提到。我主要會評論太陽能產業中的多晶矽部分。我相信各位知道，太陽能產業的其他環節——晶圓電池、安裝、政府補貼——也受到顯著影響，這些因素彼此相關，且在某些情況下正在造成對我們多晶矽市場的衝擊。我先暫停提醒各位，Hemlock也為半導體市場生產多晶矽，而我們這部分業務仍然良好，價格強勁、需求也不錯。

Now there have been two primary step downs that have affected Hemlock's business. First, the market for solar poly began to suffer in 2011 as growth in the solar market was less than expected in the true end market, and by the impact of new poly capacity brought on line worldwide. The solar poly industry moved to a significant over capacity position and this resulted in steep declines in the spot price of poly. The drop in the spot price was so severe in quarter four of 2011 that long-term contractual customers of poly producers, such as Hemlock and others, strongly requested negotiations on price.

目前有兩個主要的「下台階」因素影響了Hemlock的業務。第一，太陽能用多晶矽市場自2011年開始承壓，原因是終端太陽能市場的成長低於預期，以及全球新增多晶矽產能陸續投產的影響。太陽能多晶矽產業轉為明顯的產能過剩，導致多晶矽現貨價格大幅下跌。2011年第四季現貨價格跌幅極為劇烈，以致多晶矽生產商（如Hemlock及其他公司）的長期合約客戶強烈要求就價格進行協商。

Now long-term followers of Corning will recall that Hemlock prepared for this eventuality by requiring customer prepayments against the contracts. The theory was that even if the spot price went down lower than contract, customers would not attempt to walk away from these contracts and their prepayments. However, by Q4 of 2011 the spot price had fallen so far -- actually into the mid-$20 level -- that contractual customers were requesting contract modifications. Now Hemlock responded by making some temporary adjustments to the contracts.

長期關注Corning的投資人會記得，Hemlock早已為此可能性做準備，要求客戶就合約支付預付款。其邏輯是，即使現貨價跌到低於合約價，客戶也不會試圖放棄合約以及其預付款。然而到了2011年第四季，現貨價格下跌幅度過大——實際上跌到20多美元中段——使得合約客戶開始要求修改合約。Hemlock的回應是對合約做出一些暫時性的調整。

The price was lowered substantially and done quarter-by-quarter. However, in return for this change, customers were not allowed to earn back their prepays. These temporary adjustments did not change the firm commitment of customers to the take-or-pay nature of the poly over the life of the contract. Hemlock made these modifications with the expectations, and perhaps I should say hope, that the industry would sort itself out by shutting down excess capacity and the price would climb back over time.

價格被大幅下調，並以逐季方式執行。但作為交換，客戶不得取回其預付款。這些暫時性調整並未改變客戶在合約期間對多晶矽「照取或照付」（take-or-pay）性質的堅定承諾。Hemlock進行這些修改時的預期——或許我該說希望——是產業會透過關閉過剩產能來自我調整，價格也會隨時間回升。

The second big step down here relates to trade disputes on solar. In the United States, there was a dumping complaint against Chinese solar cells being imported. The initial ruling in spring of 2012 called for duties to be imposed. Last summer, in July, China announced a dumping investigation into polysilicon imports for solar into China, first, against the US sellers of poly and later expanded the case to include Korea and European makers of poly.

第二個重大下台階與太陽能相關的貿易爭端有關。在美國，有針對進口自中國的太陽能電池提出傾銷申訴。2012年春季的初步裁定要求課徵關稅。去年夏天7月，中國宣布對進口至中國、用於太陽能的多晶矽展開反傾銷調查，起初針對美國多晶矽賣方，之後擴大至涵蓋韓國與歐洲的多晶矽製造商。

China's Ministry of Commerce, known as MOFCOM, is investigating and has announced that they will have a preliminary ruling due in late February of 2013. The Chinese market has been very important for Hemlock sales of solar poly. As the MOFCOM investigation became known, Hemlock began experiencing declining solar sales into China. This started in August and then reached dire levels in the fourth quarter.

中國商務部（MOFCOM）正在調查，並宣布將於2013年2月下旬作出初步裁定。中國市場對Hemlock的太陽能用多晶矽銷售一直非常重要。隨著MOFCOM調查消息傳開，Hemlock開始經歷對中國的太陽能銷售下滑。這從8月開始，並在第四季惡化到非常嚴峻的程度。

It's our belief that no importer of solar poly wants to be subject to potential retroactive duties, and given the excess of poly capacity inventories why would they take a chance. It's this second step that impacted Hemlock so much in Q4 and will in Q1.

我們認為，任何太陽能用多晶矽的進口商都不希望承擔可能被追溯課徵關稅的風險；而在多晶矽產能與庫存過剩的情況下，他們又何必冒這個險。正是第二個因素在第四季對Hemlock造成如此大的衝擊，並且也將在第一季持續影響。

Now, obviously, we don't know what MOFCOM will rule, if they will even stick to their February date. We also don't know how the industry will react to whatever the ruling is, however, I can tell you is Hemlock is preparing for a variety of different scenarios, including difficult ones. The market for solar grade polysilicon is almost non-existent now as the industry deals with excess inventories and awaits resolution of these various trade disputes. We believe solar customers are just not buying polysilicon until they have more certainty regarding the MOFCOM investigation in China.

顯然，我們不知道MOFCOM會如何裁定，甚至也不知道他們是否會遵守2月的時程。我們也不知道產業將如何回應該裁定；不過我可以告訴各位，Hemlock正在為各種不同情境做準備，包括艱難的情境。目前太陽能級多晶矽市場幾乎不存在，因為產業正在處理過剩庫存，並等待各項貿易爭端的解決。我們認為太陽能客戶在對中國MOFCOM調查有更高確定性之前，基本上不會購買多晶矽。

As I mentioned earlier in the call, Hemlock Semiconductor impaired some assets in Q4. These brutal conditions in the solar polysilicon market are impacting our equity earnings, but we believe the Hemlock Board will actually take appropriate action to minimize these losses, even if it requires further impairments and layoffs. Now we'll communicate with you as we learn more regarding the MOFCOM investigation and any implications for Hemlock.

如同我先前在電話會議中提到的，Hemlock Semiconductor在第四季對部分資產進行了減損。太陽能多晶矽市場的嚴酷環境正在影響我們的權益法收益，但我們相信Hemlock董事會將採取適當行動以將損失降到最低，即使這需要進一步減損與裁員。我們會在更了解MOFCOM調查進展及其對Hemlock的任何影響後，與各位溝通。

I'd like to remind you that at Hemlock they prepared for negative volatility in the solar polysilicon industry. Hemlock had built additional capacity based on the long-term contracts with these customers. These contracts have actually very firm language about customer obligations to fulfill their commitments, and Hemlock reinforced these contracts by mandating customer prepays. We believe Hemlock is in a strong position to mitigate against severe issues. If necessary, the management team will move to enforce the take-or-pay nature of the contracts.

我想提醒各位，Hemlock已為太陽能多晶矽產業的負面波動做好準備。Hemlock是基於與這些客戶的長期合約而建置了額外產能。這些合約對客戶履行承諾的義務有非常明確且嚴格的條款，而Hemlock也透過要求客戶預付款來強化這些合約。我們相信Hemlock具備強勢地位，可用以緩解嚴重問題。如有必要，管理團隊將採取行動，強制執行合約的「照取或照付」性質。

These contracts actually held up last year in resolution with one customer and Hemlock believes they will again in the future if needed. Potential timing and restructure impairments and contract resolutions may make the individual quarters for Hemlock bumpy, however, Corning believes that Hemlock has the ability to reset operations to a lower level if that's what the market is and reduce the negative drag on earnings. Corning also believes the strength of the contract should allow Hemlock to offset the impact of any possible asset impairments or restructuring.

這些合約去年在與某一位客戶的協商解決中實際上經受住了考驗，Hemlock 相信未來如有需要也會再次如此。潛在的時點因素與重組減損，以及合約協商解決，可能使 Hemlock 的單季表現出現波動；然而，Corning 認為 Hemlock 有能力在市場需要時將營運重置到較低水準，並降低對獲利的負面拖累。Corning 也認為，合約的強度應可讓 Hemlock 抵銷任何可能的資產減損或重組所帶來的影響。

The upheaval in the solar industry is very disappointing. We actually continue to believe that polycrystalline solar technology does have a future, however, it may be a bumpy road. In the meantime, we believe Corning investors should judge Corning's earnings per share without the ups and downs of Hemlock, and we'll begin helping you to evaluate Corning on this basis.

太陽能產業的動盪令人非常失望。我們其實仍然相信，多晶矽太陽能技術確實有其未來，不過道路可能顛簸。在此同時，我們認為 Corning 的投資人應以不包含 Hemlock 起伏的方式來評估 Corning 的每股盈餘，而我們也將開始協助各位以此基礎來評價 Corning。

Now let me turn to the rest of our Q1 forecast. We expect gross margin to decrease by two points driven mainly by lower sales during the quarter, SG&A and R&D spending will be consistent with the fourth quarter. Equity earnings, excluding special items, will be down 35%.

接下來我談談我們其餘的第一季（Q1）預測。我們預期毛利率將下降兩個百分點，主要是因本季銷售較低所致；SG&A 與研發（R&D）支出將與第四季一致。不含特殊項目的權益法收益將下降 35%。

Our effective tax rate for 2013 will be about 19%. This projected rate is only slightly higher than 2012 as we expect a higher mix of our income from our wholly owned business which are taxed at a higher rate than equity earnings. However, it's much lower than what we had previously told you because the new US tax law, signed in effect on January 3, included tax extenders which are very favorable to Corning.

我們 2013 年的有效稅率約為 19%。由於我們預期來自全資事業的所得占比提高，而其稅率高於權益法收益，因此此預估稅率僅略高於 2012 年。不過，它遠低於我們先前告訴各位的水準，因為新的美國稅法於 1 月 3 日簽署生效，其中包含延長稅務優惠（tax extenders），對 Corning 非常有利。

Now as investors know, we currently price our LCD glass in Japanese yen. We have highlighted the impact of the yen to US dollar moves for investors for many years versus the foreign exchange rate moves. We do believe that the strengthening yen put more price pressure on the LCD business in the period from 2008 to 2012. The current weakening yen has the potential to help us moderate price declines.

如投資人所知，我們目前以日圓為 LCD 玻璃定價。多年來，相較於其他外匯匯率變動，我們一直為投資人強調日圓兌美元波動的影響。我們確實認為，2008 至 2012 年期間日圓走強，對 LCD 業務造成更大的價格壓力。目前日圓走弱，有可能幫助我們緩和價格下跌。

As you know, the yen has depreciated very suddenly, actually more than 10% since the beginning of December. Of course, we're hopeful there will be no further weakening. At the same time, we are considering various actions to minimize its impact if it weakens further.

如各位所知，日圓貶值非常突然，實際上自 12 月初以來已貶值超過 10%。當然，我們希望不會再進一步走弱。同時，若日圓進一步走弱，我們也在考慮各種行動以將其影響降到最低。

As a reminder, our results move with these changes in the yen to the US dollar exchange rate. All our LCD glass is sold in yen.

提醒各位，我們的業績會隨日圓兌美元匯率的變動而變化。我們所有的 LCD 玻璃皆以日圓銷售。

When the yen weakens, it lowers our Display results. On the other hand, it improves panel makers' results because the panel industry sells into hopes. When the yen strengthens the opposite happens. Specific to Corning, if the yen moves one point higher or lower in Q1, we estimate our sales would decrease or increase by $8 million.

當日圓走弱時，會拉低我們顯示科技（Display）的業績。另一方面，這會改善面板製造商的業績，因為面板產業的銷售是以美元計價。當日圓走強時，情況則相反。就 Corning 而言，若第一季日圓匯率上升或下降 1 個點，我們估計銷售額將減少或增加 800 萬美元。

Now similar to panel makers, we also have some Gorilla Glass manufacturing costs in the yen, but all of our Gorilla Glass is sold in dollars. So the net impact of a one-point move on our net income is only $6 million.

此外，與面板製造商類似，我們也有部分 Gorilla Glass 的製造成本以日圓計價，但我們所有 Gorilla Glass 皆以美元銷售。因此，匯率每變動 1 個點，對我們淨利的淨影響僅為 600 萬美元。

Now that concludes my opening comments and I'll turn it back to Ann.

以上就是我開場的說明，接下來我把時間交還給 Ann。

Thank you, Jim. John, we would now like to open it up for questions.

謝謝你，Jim。John，我們現在想開放提問。

Certainly. (Operator Instructions) First we'll go to the line of Mark Sue with RBC Capital Markets. Please go ahead.

好的。（接線員指示）首先我們接 RBC Capital Markets 的 Mark Sue 專線。請開始。

Thank you. Jim, we understand your focus on share stability for display glass to better forecast capacity and so far so good. What do the predicted indicators on pricing change foretell about the market share intentions from your competitors? I ask since every action has a reaction, and I'm wondering if rationality may prevail in the industry, or do you feel that competitors are still considering what they should do at this point? And do external factors such as currency actually imply some share shifts in the forthcoming quarters?

謝謝。Jim，我們理解你把重點放在顯示玻璃的市占穩定，以便更好地預測產能，目前看起來進展不錯。定價變動的預測指標，對於競爭對手的市占意圖透露了什麼？我之所以這麼問，是因為每個動作都會引發反應；我想知道產業是否可能回歸理性，或你覺得競爭對手此刻仍在考慮該怎麼做？另外，像匯率這類外部因素，是否也意味著未來幾季可能出現一些市占移轉？

Well, Mark, I'll have to let you speak directly to our competition about their intentions. We believe what we seen in quarter one, both in terms of how the contracts are working on our share and on more moderate price declines, indicates that we believe the industry is moving to more moderate price declines for LCD glass, so that's the only initial indicator I can give you. I believe our competition is announcing the results today and next week, so we'll look forward to hearing what they have to say about guidance. But it is our strong belief that we can see moderation in price declines in the LCD business.

Mark，關於競爭對手的意圖，我得請你直接去問他們。我們認為，從第一季所看到的情況來看，無論是合約對我們市占的運作方式，或是較為溫和的價格下跌，都顯示產業正朝向 LCD 玻璃更溫和的降價幅度發展；這是我目前能提供的唯一初步指標。我相信競爭對手今天和下週會公布業績，因此我們也期待聽到他們對展望（guidance）的說法。但我們堅信，在 LCD 業務上，我們可以看到價格下跌趨勢正在趨緩。

Okay. And then maybe if I touch on Gorilla Glass where you're focusing on moving up more capacity there. Gorilla Glass is just so highly differentiated, are we at a point where prices for Gorilla Glass can actually start stabilizing or not decline, since it is a premium product that's going to a lot of premium end markets such as smartphones and tablets, what should we kind of assume for pricing for the Gorilla Glass segment for the balance of the year?

好的。那我再談一下 Gorilla Glass，你們正把更多產能移往那邊。Gorilla Glass 的差異化非常高，我們是否已經到了 Gorilla Glass 的價格可以開始穩定、或不再下滑的階段？畢竟它是高階產品，面向智慧型手機、平板等許多高階終端市場；那麼對今年剩餘時間 Gorilla Glass 事業的定價，我們大概應該怎麼假設？

We expect prices to decline in Gorilla, this remains a new product, it's in the consumer electronics industry. However, we think we can keep up with any price declines. The price declines in Gorilla tend to happen in the first quarter of the year. So you should expect some price declines this year, but we're very confident we can keep up with that in terms of our cost reduction and experience the great growth that we expect from this market going forward. And we continue to do very well with all customers, and our recent announcement of our Gorilla 3 went over very well at the Consumer Electronics Show, and we're expecting a strong conversion rate of new customers to this improved damage-resistant glass.

我們預期 Gorilla Glass 的價格仍會下滑；這仍是一項新產品，且處於消費性電子產業。不過，我們認為我們能跟上任何價格下滑。Gorilla 的降價通常發生在每年的第一季。因此你應該預期今年會有一些降價，但我們非常有信心能透過成本降低與經驗累積來跟上，並在未來持續享受我們預期此市場將帶來的強勁成長。而且我們與所有客戶的合作持續表現良好；我們近期發布的 Gorilla 3 在消費性電子展（CES）上反應非常好，我們也預期新客戶轉換採用這款更耐損玻璃的比率會很高。

That's helpful. Thank you, good luck, Jim.

很有幫助。謝謝，祝你好運，Jim。

Thanks, Mark.

謝謝你，Mark。

Our next question is from Rod Hall with JPMorgan. Please go ahead.

下一個問題來自 JPMorgan 的 Rod Hall。請開始。

Good morning, Jim, good morning, guys. Thanks for taking my question. Jim, I wanted to clarify one thing you said which is, I think I heard you say that Specialty Materials is expected to be down 30% sequentially. I just want to make sure that we heard that right, and then if that is correct, just get you to give us a little more color on that. Is that a demand driven decline, because that's a little bit more decline than we would have anticipated or is there something else going on? Are there structural changes in the use of Gorilla Glass and certain form factors coming up, that sort of thing, so it would be good to get some color on that.

早安，Jim，各位早安。謝謝讓我提問。Jim，我想釐清你剛才說的一點：我想我聽到你說，特殊材料（Specialty Materials）預期將較前一季下滑 30%。我只是想確認我們是否聽對了；如果正確，也請你再多提供一些說明。這是需求驅動的下滑嗎？因為這個降幅比我們原先預期的還要大一些，還是有其他因素？例如 Gorilla Glass 的使用或某些外形規格（form factors）是否出現結構性變化之類的？因此希望你能多補充一些背景。

And then, the other thing, more on the positive side, I wanted to ask you about is the panel industry, just if you could comment on 2013 about the supply capacity of the panel industry, whether you think supply gets short as we move through 2013? Or just what you think the situation is there, and how that might come back and impact glass pricing? Thank you.

然後，另外一件事，偏正面的部分，我想請教您的是面板產業；想請您評論一下 2013 年面板產業的供給產能，您是否認為隨著 2013 年推進，供給會變得吃緊？或者您認為那邊的情況如何，以及這可能會如何回過頭來影響玻璃定價？謝謝。

Sure, Rod. So on Gorilla, I did say 30%, and we think it's probably slightly higher than what the normal seasonality that we experienced in Gorilla to be, probably because there was a little inventory built in Q4. But we now are, six-year Gorilla, and what we've determined is Q1 is always the quarter where we see the weaker demand. So, it is demand driven but that demand in us may be partially affected by inventory. We seen no change in market share for Gorilla and, in fact, we think Gorilla 3 will actually improve our position. It's a much better product.

當然可以，Rod。關於 Gorilla，我確實提到 30%，而我們認為可能略高於我們在 Gorilla 上所經歷的正常季節性，可能是因為第四季有一些庫存建立。但我們現在已經是 Gorilla 的第六年，而我們所確定的是第一季一向是我們看到需求較弱的季度。所以，這是需求驅動的，但我們的需求可能部分受到庫存影響。我們沒有看到 Gorilla 的市占率有任何變化；事實上，我們認為 Gorilla 3 會實際改善我們的地位。這是一個更好的產品。

So we're not worried about the slight down in Q1 and, actually, are anticipating very strong growth in the remainder of the year. In the back half of the year, we think touch will begin emerging on notebooks and, as you know, notebooks are about twice as big as a tablet and many times bigger than a smartphone, so we think that will be good for us. So, we're not worried about a slight down in Q1. Relative to panel industry, you know it's a little hard for us to judge.

因此，我們不擔心第一季的小幅下滑，而且實際上預期今年剩餘時間會有非常強勁的成長。在下半年，我們認為觸控將開始在筆記型電腦上出現；如您所知，筆電大約是平板的兩倍大，且比智慧型手機大很多倍，所以我們認為這對我們有利。所以，我們不擔心第一季的小幅下滑。至於面板產業，您知道，對我們來說判斷有點困難。

Clearly, the panel capacity has been moderated in terms of the growth over the past year. And the new panel capacity in China by LG and Samsung is not coming on fast. So as we continue to see the LCD market grow, and I'd emphasize again the large scale televisions, and I mentioned the growth of 50-inch this past year and the average size going up. I don't know if you had a chance to go to the Consumer Electronics Show, but clearly very large size and increasing focus on higher definition for those, I think we'll use up panel capacity. Whether it actually gets to a shortage position or not, it's hard for me to judge from my position. But I would say there's good signs in the panel industry, as well as in our LCD Glass business.

很明顯，過去一年面板產能在成長方面已經趨於節制。而 LG 與三星在中國的新面板產能也沒有很快投產。因此，隨著我們持續看到 LCD 市場成長——我再強調一次大型電視——我提到去年 50 吋的成長以及平均尺寸上升。我不知道您是否有機會去消費性電子展，但很明顯超大尺寸，以及對更高解析度的關注在提升；我認為這會消耗面板產能。至於是否真的會到供給短缺的狀態，從我的位置來看很難判斷。但我會說，面板產業以及我們的 LCD 玻璃業務都有不錯的跡象。

And Jim, could you just to follow-up your first part of that question? Thank you for that. But I wanted to see, could you make a more general comment then on your view of the consumer demand situation right now? Do you feel that demand here starting off the year is a little weaker than you would have anticipated, or just generally any color you can give us on what you're thinking on consumer demand would be interesting?

Jim，我可以就您剛才那個問題的第一部分再追問一下嗎？謝謝您剛才的說明。但我想了解，您能否更概括地評論一下您目前對消費需求情況的看法？您覺得今年一開始的需求是否比您原先預期的稍弱，或是您能提供一些您對消費需求的想法與觀察，會很有意思？

You're asking for Gorilla demand at retail?

您是在問零售端的 Gorilla 需求嗎？

No, just more general consumer demand, because you made some commentary on TV demand maybe being a little bit weaker here. Do you feel like consumer demand in general, at least the parts of consumer demand you're exposed to, is a little bit weaker than normal seasonality here heading into Q1 or, just curious what you think is going on with the consumer?

不是，是更一般的消費需求，因為您提到電視需求可能在這裡稍微弱一些。您是否覺得整體消費需求——至少您所接觸到的那部分——在進入第一季時比正常季節性更弱一些？只是好奇您覺得消費者目前發生了什麼情況？

I would say, I have to break it down by geographies, but in the US, I think television demand is fine heading into the Super Bowl. People forget that people buy televisions after Christmas. In China, we've had good contact with our customers who buy the glass there and Chinese television sellers, remember the Chinese brands are about 70% there. Their expectations are for a good Chinese New Year and demand, I think, it remains mediocre in Europe, that's really no surprise.

我會說，我必須按地區拆開來看；但在美國，我認為在超級盃前夕電視需求是可以的。大家常忘了人們會在聖誕節後買電視。在中國，我們與在當地買玻璃的客戶以及中國電視賣家保持良好聯繫；請記得中國品牌在那裡約占 70%。他們預期會有一個不錯的農曆新年與需求；我認為歐洲的需求仍然平平，這並不令人意外。

In our Car business, which is the other consumer phenomenon that we experience, Car demand, I think, in the United States remains strong, very weak in Europe. I think car demand in China looks fine. We do not feel like we've seen this big downdraft from -- in the United States -- from the payroll tax rolling back on. Obviously, the fiscal cliff negotiations helped a lot of Americans except for the very wealthy, so we are not seeing a big downdraft in consumer demand.

在我們的汽車業務——這是我們接觸到的另一個消費現象——汽車需求方面，我認為美國仍然強勁，歐洲非常疲弱。我認為中國的汽車需求看起來不錯。我們不覺得在美國看到因為薪資稅恢復徵收而出現的大幅下滑。顯然，「財政懸崖」談判對多數美國人幫助很大（除了非常富有的人），所以我們沒有看到消費需求出現大幅下滑。

Okay, thank you very much.

好的，非常感謝。

Our next question is from Wamsi Mohan with Bank of America Merrill Lynch. Please go ahead.

我們的下一個問題來自美國銀行美林（Bank of America Merrill Lynch）的 Wamsi Mohan。請繼續。

Yes, thank you, good morning. Jim, you mentioned mid-single-digit growth for the LCD glass industry, that equates to about 3.7 billion square feet. Where are we with glass supply now, and where do you think we will be exiting this year?

是的，謝謝，早安。Jim，您提到 LCD 玻璃產業中個位數中段的成長，這相當於約 37 億平方英尺。目前玻璃供給的狀況如何？您認為今年結束時會是什麼情況？

So, it's a little harder question to answer, Wamsi, than it used to because of how the mix for us of Gorilla versus LCD, but we would say right now supply/demand balance seems healthy. It was probably very tight in Q4 but it's healthy. We remain very full right now. The place where we have capacity down is in Korea.

Wamsi，這題比以前更難回答一些，因為我們的組合中 Gorilla 相對於 LCD 的比重變化；但我們會說目前供需平衡看起來健康。第四季可能非常吃緊，但現在是健康的。我們目前仍然非常滿載。我們產能較低的地方是在韓國。

There is really no new footprint of being built with the one exception, I believe, of NEG's one new tank in Korea, and so we're not really seeing new capacity come on line. Obviously, everybody is continuing to progress to more thin glass, but that is a more gradual. So we expect the supply/demand balance to remain in pretty good shape as we continue to grow, assuming we got it right in terms of the fact that glass demand will grow again this year.

除了我相信 NEG 在韓國新增的一座熔爐（tank）之外，基本上沒有新的產能版圖在建置，因此我們並沒有看到新的產能上線。顯然，大家都在持續推進更薄的玻璃，但那是較為漸進的過程。因此，只要我們對今年玻璃需求會再度成長的判斷是正確的，我們預期在持續成長的同時，供需平衡仍會維持在相當不錯的狀態。

Okay, thanks, Jim. And can you talk about what assets are getting written off at SCP? I think you had previously spoken about repurposing some of these assets in China. Is that still happening and is this write-off incremental to that?

好的，謝謝，Jim。另外，您能談談 SCP 那邊有哪些資產正在被沖銷（write-off）嗎？我記得您之前提過會在中國重新用途化（repurpose）其中一些資產。這件事還在進行嗎？而這次的沖銷是相對於那件事的增量嗎？

So, what we did at SCP, they had bought some assets for expansion that we never implemented there, and some of the assets were moved to their new project in China, but some of the assets actually couldn't be moved, they are more fixed in nature, so that's what we impaired there. We're really not expecting to add capacity again in Korea with what we know right now for LCD. So it was really around the plans they had. In 2011, they had capacity that we put on hold and then now we're moving equipment that can be moved to China and that they can't we're writing off.

關於 SCP，我們做的是：他們為了擴張買了一些資產，但我們從未在那裡實施；其中一些資產被移到他們在中國的新專案，但有些資產其實無法移動，性質上更偏固定資產，所以那部分我們就做了減損（impairment）。就我們目前對 LCD 的了解而言，我們並不預期會在韓國再增加產能。所以這主要是圍繞他們原本的計畫。2011 年他們有一些產能計畫我們先暫停，現在能移的設備就移到中國，不能移的我們就沖銷。

Okay, thanks, and last one for me. Can you talk about what options you're looking at to mitigate the impact of the yen? Is this more along the lines of hedging or is it actually changing the underlying denomination in which glass would be priced? Thanks.

好的，謝謝，最後一題。您能談談您正在評估哪些選項來降低日圓的影響嗎？這比較像是避險（hedging），還是實際改變玻璃定價所採用的計價幣別（denomination）？謝謝。

We're looking at both alternatives. One alternative would be to go to US dollar pricing. I think you're probably aware that the majority of our supply chain, both our customers get paid in dollars and most other components are priced in dollars. And then, we are also looking at whether we should hedge to protect ourselves further from weakening in the yen.

我們正在同時評估兩種替代方案。其中一個方案是改採美元計價。我想你可能也知道，我們供應鏈的大多數環節，包含我們的客戶以美元收款，以及多數其他零組件也都是以美元計價。另外，我們也在評估是否應該進行避險，以進一步保護我們免受日圓走弱的影響。

And when would you make that determination, Jim?

那你會在什麼時候做出這個決定，Jim？

I will tell you it's one of my top topics that I'm working on.

我可以告訴你，這是我目前正在處理的最重要議題之一。

Okay, thank you.

好的，謝謝。

Our next question is from Amitabh Passi with UBS. Please go ahead.

下一個問題來自 UBS 的 Amitabh Passi。請開始。

Hi, thank you, Jim. First question for you. Any update on where we are with Gorilla Glass penetration in markets such as automotive? And then, with respect to Gorilla Glass 3, how do we think about the potential benefit to Corning? Is there any sort of pricing premium you garner, or is it simply just a higher, or a better value that you provide to your customers at existing pricing?

嗨，謝謝你，Jim。第一個問題想請教你。關於 Gorilla Glass 在汽車等市場的滲透率，我們目前進展到哪裡？有沒有最新消息？另外，針對 Gorilla Glass 3，我們該如何看待它對康寧的潛在效益？你們是否能取得某種價格溢價，還是說它只是以既有價格提供給客戶更高、或更好的價值？

So on the latter, it's a better value that we provide to our customers. That's fundamentally what we do, actually in all of our products, is we go through generation shifts. We try to provide better value to them and I think it's getting very good reception. On Gorilla for automotive, as I think I said on an interview fairly recently, we are very confident that we will have an order this year for Gorilla Glass to be put on a car. Don't think big volumes, but the first order is the most important. So, I think we remain very confident that that could occur this year.

就後者而言，這是我們提供給客戶更好的價值。事實上，這基本上就是我們在所有產品上所做的事：我們會進行世代更迭。我們努力提供更好的價值，我認為市場反應非常好。至於汽車用 Gorilla，我想我在不久前的一次訪談中也提到，我們非常有信心今年會拿到一筆將 Gorilla Glass 用在車上的訂單。不會是很大的量，但第一筆訂單最重要。所以，我們仍然非常有信心今年可能會發生。

And just maybe as a quick follow-up, Jim, you've taken quite a bit of charges related to workforce reductions, as well. How do we think about potential benefits flowing through your P&L through 2013?

再快速追問一下，Jim，你們也認列了不少與人力縮減相關的費用。我們該如何看待 2013 年這些效益在損益表（P&L）上的反映？

I think that we're looking for, as a result of the wholly owned restructuring, about maybe $60 million of cost benefit.

我想，因為全資事業重整的結果，我們預期大概會有約 6,000 萬美元的成本效益。

In OpEx or COGS?

是在營業費用（OpEx）還是銷貨成本（COGS）？

It's spread between both, probably a little bit more on OpEx than cost of goods sold.

兩者都有分攤，可能營業費用的比重會比銷貨成本稍微多一些。

Okay, thank you.

好的，謝謝。

Our next question is from Amir Rozwadowski with Barclays. Please go ahead.

下一個問題來自 Barclays 的 Amir Rozwadowski。請開始。

Thank you very much, and good morning, folks.

非常感謝，各位早安。

Good morning, Amir.

早安，Amir。

Jim, just touching on Gorilla Glass, it seems like you continue to have very strong end market demand there. In thinking about sort of the addressable market, I know you just touched upon the automotive opportunity, but how should we think about sort of what your expectations are for touch enabled devices outside of what have now been the traditional markets such as smartphones and tablets? Could we find ourselves in a position where there's incremental growth in the end market that you guys are looking at to put Gorilla Glass into by this time next year?

Jim，談到 Gorilla Glass，看起來你們在終端市場的需求仍然非常強勁。在思考可服務市場（addressable market）時，我知道你剛提到汽車的機會，但我們應該如何看待智慧型手機和平板等傳統市場之外、其他具觸控功能裝置的預期？到明年這個時候，你們是否可能在終端市場上看到額外的成長機會，並把 Gorilla Glass 導入其中？

Yes, Amir, I hope you come to our IR day on February 8 because Jim Clappin will be addressing our outlook for both, but we continue to expect smartphones to grow as a percentage of overall phones. We think we're the product of choice for that. We think tablets will continue to grow in all formats, both small and normal size that we've gotten used to.

是的，Amir，我希望你 2 月 8 日能來參加我們的 IR Day，因為 Jim Clappin 會說明我們在這兩方面的展望。不過，我們仍然預期智慧型手機占整體手機的比重會持續提升。我們認為我們是該領域的首選產品。我們也認為平板在各種尺寸與型態上都會持續成長，包括小尺寸與我們已經習慣的標準尺寸。

I think the big upside for us in consumer electronics for Gorilla will be touch moving into the notebook market. I think you may have heard Wendell talk about this longer range, we think this doubles the size of the potential opportunity for Gorilla. And we think PC manufacturers are going to drive to put touch on that. Obviously, the cost of incremental touch on a computer has to be not too extreme, but we think people are working on that, and obviously working around products that will help them do that at a lower cost. So I think the future is very bright, but Jim Clappin is going to be walking through our detailed forecast in both areas.

我認為在消費性電子方面，Gorilla 最大的上行空間會來自觸控進入筆電市場。你可能聽 Wendell 談過這個較長期的趨勢；我們認為這會讓 Gorilla 的潛在機會規模加倍。我們認為 PC 製造商會推動在筆電上導入觸控。當然，在電腦上增加觸控的額外成本不能太高，但我們認為大家正在努力解決這點，也正在開發能以更低成本協助他們達成的產品。所以我認為未來非常光明，但 Jim Clappin 會針對這兩個領域帶大家走過我們的詳細預測。

Great. And then also, Jim, if I may, a clarification on sort of your LCD outlook. Given your expectations for moderate price decline, does that factor in any adjustments related to the recent move in the yen or how should we think about that?

很好。另外，Jim，如果可以的話，我想釐清一下你們對 LCD 的展望。在你們預期價格溫和下滑的前提下，這是否已納入近期日圓變動所帶來的任何調整？我們應該如何看待這點？

So, my comment on the pricing, as always, I speak only in the yen-to-yen price declines. We, obviously, believe that the recent weakening in the yen, which has benefited panel makers, should help us in trying to maintain low price declines. Remember that they took pain from the yen strengthening over that period of time and that increased the pressure on us. That's to be realized, but when I gave you the moderate, it's yen-to-yen.

所以，關於我對價格的評論，一如往常，我只談以日圓對日圓（yen-to-yen）的價格下滑。我們當然認為，近期日圓走弱讓面板廠受惠，應該也會有助於我們在努力維持較低的降價幅度。請記得，在那段期間日圓走強時他們承受了壓力，這也增加了我們這邊的壓力。這些影響會逐步反映，但我所說的「溫和」是以日圓對日圓來看。

Great, thank you very much for the incremental color.

很好，非常感謝補充說明。

Next we'll go to Jim Suva with Citi. Please go ahead.

接下來我們請 Citi 的 Jim Suva 提問。請開始。

Thank you, and congratulations there to you and your team there at Corning. It looks like you're really putting down a nice foundation. When we look at your comments around Q1 seasonally being softer for glass, can you just help us understand a little bit the context of that, because as I look back factually it looks like Q1 glass has been going up sequentially every year.

謝謝，也恭喜你以及康寧的團隊。看起來你們確實打下了很好的基礎。針對你提到第一季玻璃需求季節性較弱的評論，能否幫我們多理解一下背景？因為我回頭看數據，第一季的玻璃出貨似乎每年都是逐季成長。

Now maybe it has to do with kind of the volatility of what has happened in the supply chain, and changes to contracts, and things like that, but it just looks like historically Q1 has been up from Q4, and I think if I'm correct that actually China represents more TV sales than the US. I would expect that, wonder if the normal seasonality doesn't necessarily historically play forth going forward. And then the follow-up is if you can just talk about what is kind of the normal seasonal for each of the quarters of your year now when you look at seasonality for glass? Thank you.

也許這與供應鏈發生的波動、合約變更等因素有關，但從歷史上看，第一季通常都比第四季高，我想如果我沒記錯，中國的電視銷量其實比美國還多。因此我會預期，傳統的季節性未必能在未來延續。另外追問，你能否談談現在你們看玻璃業務時，一年各季的正常季節性大概是什麼樣子？謝謝。

So, you are correct that we have seen quarter ones be greater than quarter four by a slight amount. It really, however, is very dependent on what the inventory positions are at the end of Q4. So, we actually expected Q4 inventory work off to be a little bit greater, so we factor in that as we think about what we call the normal seasonality. I think you know in our model, obviously, we model our own glass, the panel makers, the set assembly and at retail.

所以，你說得沒錯，我們確實看到第一季通常會比第四季略高一些。不過這其實非常取決於第四季末的庫存水位。我們原本預期第四季的去庫存幅度會再大一些，所以在我們所謂的正常季節性判斷中也把這點納入考量。我想你也知道，在我們的模型裡，當然會同時建模我們自己的玻璃、面板廠、整機組裝以及零售端。

But I'd be happy, maybe at our IR day, to spend some time with you on the seasonalities by quarter. I think a couple years ago, we actually laid it all out in a graph. But it is the combination of what we would normally see as seasonality as we're talking about and the fact that the supply chain is coming out a little bit heavier on inventory than what we originally expected. If they hadn't done that we probably would have been saying it's a year-over-year increase.

不過我很樂意，也許在我們的 IR Day 上，花點時間和你討論各季度的季節性。我記得幾年前我們其實用一張圖把它完整呈現過。但這是我們所談的正常季節性，再加上供應鏈端的庫存水位比我們原先預期略高的綜合結果。如果他們沒有把庫存拉得那麼高，我們可能就會說是年增。

Thank you very much.

非常感謝。

We'll go to Brian White with Topeka. Please go ahead.

我們接著請來自 Topeka 的 Brian White。請發問。

Jim, I'm wondering if you could talk a little bit about the Gorilla market, obviously, it's still focused on tablets and smartphones, but a couple years ago you announced a TV customer. Where are we in that market? And also if you could talk about maybe the opportunity in notebook and auto? Thank you.

Jim，我想請你談談 Gorilla 市場的情況。顯然目前仍以平板與智慧型手機為主，但幾年前你們曾宣布有一家電視客戶。目前那個市場進展到哪裡了？另外，也請談談筆電與車用領域的機會。謝謝。

So, Brian, the opportunity in auto, I think, still exists. We believe that, as I said earlier in a question, we'll have a customer this year, and so we're still hopeful. The auto industry, I think, moves at a slower pace than consumer electronics. In terms of Gorilla, clearly, the strength has been in smartphones and tablets. We're believers that tablets will continue to grow very nicely. We think there's no question that smartphones continue to become a higher and higher percentage of phones sold. But I think the big upside opportunity is touch being extended to notebooks as we go through the course of this year into next and I think those are where the big opportunities are.

Brian，車用方面的機會我認為仍然存在。我們相信，正如我先前在回答問題時提到的，我們今年會有一位客戶，因此我們仍抱持希望。我認為車用產業的推進速度比消費性電子慢。就 Gorilla 而言，顯然其強項一直在智慧型手機與平板。我們相信平板將會持續相當不錯地成長。我們也認為毫無疑問，智慧型手機在整體手機銷售中的占比會愈來愈高。但我認為最大的上行機會在於觸控功能在今年到明年期間延伸到筆電上，而我認為那就是最大的機會所在。

Okay, great. Thank you.

好的，很棒。謝謝。

We'll go to Steven Fox with Cross Research. Please go ahead.

我們接著請 Cross Research 的 Steven Fox。請發問。

Thanks, good morning. Just two questions. First of all, Jim, what exactly is the yen rate that you're factoring into your Q1 guidance? And then secondly, with regards to Hemlock, is there any way -- this is a pretty difficult question -- but is there any way to sort of gauge the downside from here in terms of the risk to Corning's balance sheet or results going forward? Any help would be appreciated, thanks.

謝謝，早安。兩個問題。首先，Jim，你們在第一季指引中納入的日圓匯率假設到底是多少？第二，關於 Hemlock，有沒有辦法——這是個相當困難的問題——有沒有辦法衡量從現在起的下行風險，也就是對 Corning 資產負債表或未來業績的風險？若能提供任何協助將不勝感激，謝謝。

Sure. So on the yen, we don't actually, as you know, give sales guidance, but we always, as we think about the yen, we think about what the rate is at the time that we put together our forecast. So we would have been thinking in the 89 kind of range. We're not the world's best predictors of exchange rates so we don't try to predict where it's going to go.

當然。關於日圓，如你所知，我們其實不提供營收指引；但我們在思考日圓時，會以我們編製預測時當下的匯率為準。所以我們當時大概是以 89 左右的區間來思考。我們不是全球最會預測匯率的人，所以我們不會嘗試去預測它會走到哪裡。

On HSC, yes, we can help you. I'm going to do that at the IR day and when we file our 10-K, we'll walk you through it in more detail. You should not consider that any kind of risk or restructuring there has any impact on Corning's cash position. It would have, obviously, an impact on Dow Corning's earnings and, therefore, would flow through to us as a special, but it's not a cash issue. But we will actually outline all of those risks for you on February 8 and in our 10-K filing.

至於 HSC，是的，我們可以協助你。我會在投資人關係日（IR day）說明，並且在我們提交 10-K 時更詳細地帶大家走一遍。你不應該認為那裡的任何風險或重整會對 Corning 的現金部位造成影響。它顯然會影響 Dow Corning 的獲利，因此會以特殊項目（special）的形式反映到我們這邊，但這不是現金問題。不過我們會在 2 月 8 日以及 10-K 申報中，把所有這些風險為你清楚列出。

Great, that's helpful. Thanks so much.

很好，這很有幫助。非常感謝。

Our next question is from Patrick Newton with Stifel Nicolaus. Please go ahead.

下一個問題來自 Stifel Nicolaus 的 Patrick Newton。請發問。

Yes, thanks, good morning, Jim. Just to beat a dead horse on Gorilla, in this expectation of a second half rebound largely driven by notebooks, is this based on notebook and Ultrabook SKUs that are currently ramping with OEMs? And I'm trying to get a sense of the risk to your numbers of how the sell-through of these products goes and whether or not we could potentially have a similar issue to the Gorilla Glass story that we did in 2011 based on the TV being somewhat of a flop?

是的，謝謝，早安，Jim。再針對 Gorilla 這個話題多問一下：你們預期下半年反彈主要由筆電帶動，這是基於目前正與 OEM 一起放量爬坡的 notebook 與 Ultrabook SKU 嗎？我想了解的是，這些產品的終端銷售（sell-through）表現會如何、對你們數字的風險有多大；以及我們是否可能像 2011 年 Gorilla Glass 的故事一樣，因為電視端某種程度上不算成功而出現類似問題？

Well, first of all, we don't regard Gorilla as a dead horse, but --

嗯，首先，我們不認為 Gorilla 是一匹死馬，不過——

I mean on the questions, the number of questions on the topic. (laughter)

我是指這個主題被問到的問題數量。(笑聲)

I would say, the Sony television experience was, obviously, very disappointing for us, probably for Sony too. In the beginning of 2010, Sony told us what they were going to do and put it on a broad part of their line, including moderate priced televisions, and then one year later they didn't do that. And that was very disappointing to us because we actually invested to do that for them. I don't regard that to be a sign for touch on notebooks.

我會說，Sony 電視的經驗對我們而言顯然非常令人失望，對 Sony 可能也是。在 2010 年初，Sony 告訴我們他們打算怎麼做，並且要把它導入他們產品線的很大一部分，包括中等價位的電視；但一年後他們並沒有那樣做。這讓我們非常失望，因為我們其實為了他們而投資。但我不認為那能代表筆電觸控的前景。

I guess -- you have the opportunity to talk to all the notebook manufacturers and software manufacturers about what they believe and where touch is going to go. I guess we could be wrong. I think the wrong here would be maybe that the upside isn't as great as what we expected. I don't see any potential disappointment coming in smartphones or tablets, and so I think the question is whether touch on notebooks is a more moderate introduction or becomes a very strong introduction, and we'll have to see how that plays out. But we don't think the Sony television experience is a good forecaster of that.

我想——你有機會和所有筆電製造商與軟體廠商交流，了解他們的看法以及觸控將往哪裡走。我們也可能會判斷錯。我認為所謂的「錯」，可能是上行空間沒有我們預期那麼大。我不認為智慧型手機或平板會出現任何令人失望的情況，所以問題在於筆電觸控是較為溫和的導入，還是會成為非常強勁的導入；我們得看後續如何發展。但我們不認為 Sony 電視的經驗能很好地預測這件事。

Okay, that's good to hear. And then for your full year outlook for Gorilla and the double-digit market growth, does this include any of the high probability auto win or would that all be upside your expectations should that actually occur in 2013?

好的，很高興聽到。另外，關於你們對 Gorilla 的全年展望以及市場雙位數成長，這是否已包含任何高機率的車用案子（auto win）？還是說如果 2013 年真的發生，那會完全是超出你們預期的上行？

That would be all upside.

那會全部都是上行。

Okay, perfect. And then I guess just last one, given that you've utilized your $1.5 billion share repurchase, with your CapEx expectations declining in 2013, and solid free cash flow, should we anticipate any type of repurchase allotment or is that something that you're looking at carefully?

好的，完美。最後一個問題：鑑於你們已用完 15 億美元的庫藏股回購額度，而你們對 2013 年的資本支出（CapEx）預期下降、自由現金流也很穩健，我們是否應該預期會有任何新的回購配置？還是你們正在審慎評估中？

I think the Board is very focused on -- obviously, they would like to try to improve the performance of the stock. I won't, as I've said many times, pre-judge what their actions are. I think that they will continue to look at it as we go through the course of the year but I'm not going to say exactly what they would do. I think that you seen over the last 15 months the Board be very active in trying to return money to shareholders through two dividends increase and a large repurchase, so I think that they will remain focused on that.

我認為董事會非常專注於——顯然，他們希望能改善股價表現。我不會——正如我多次說過的——預先判斷他們會採取什麼行動。我認為他們會在今年的過程中持續檢視，但我不會明確說他們會怎麼做。我想你在過去 15 個月已看到董事會非常積極地透過兩次提高股利以及大規模回購來把資金回饋給股東，所以我認為他們會持續把這件事放在重點上。

All right, thank you, good luck.

好的，謝謝，祝順利。

John, we've got time for one more question.

John，我們還有時間再問一個問題。

And that will be from the line of Ehud Gelblum with Morgan Stanley. Please go ahead.

接著是 Morgan Stanley 的 Ehud Gelblum。請發問。

Hi, thank you very much, Jim. I appreciate it. Thanks, Ann. Couple things. First of all, for the year, can you give us a sense as to how you look at volumes for wholly owned versus SCP and how we should be thinking about volume growth at the two of them? And then I just want to see if the share contracts that you're in right now, do they set the pricing at the beginning of each quarter as you negotiate? I guess there's not much negotiating going on. Or do they change, because you promised, from what I understand, a match in market price?

嗨，非常感謝你，Jim。我很感激。也謝謝你，Ann。幾件事。首先，就全年而言，你們如何看待全資（wholly owned）與 SCP 的出貨量（volumes），以及我們應該如何思考兩者的量成長？另外我想確認一下，你們目前的分成合約（share contracts），是否在每季初透過協商來設定價格？我猜其實也沒什麼協商空間。或者價格會變動，因為據我了解，你們承諾會與市場價格一致（match in market price）？

Can they change over the course of the quarter if the market price changes? The reason I ask is NEG reported last night, and they said that they were sort of unclear on what pricing was going to be like in Q1 because they hadn't finished their price negotiations. And so I wonder if their price negotiations, when they are finished over the next few weeks, change whatever the market price is? Does that change what you have to match, as well or are you set and anything that NEG might do would only impact you for the June quarter? Thanks.

它們會不會在一個季度的過程中，因為市場價格變動而改變？我之所以這麼問，是因為 NEG 昨晚公布了，他們表示對於第一季的定價會是什麼樣子有點不確定，因為他們還沒完成價格談判。所以我想知道，他們在接下來幾週完成價格談判之後，是否會改變當時的市場價格？那會不會也改變你們必須匹配的價格？還是你們已經定案，NEG 可能做的任何事只會影響你們的 6 月季度？謝謝。

So, I won't comment on NEG. I'll just say that we're set for Quarter One. These contracts work at the beginning of the quarter and we're done, so we're not expecting an any change from that. Relative to wholly owned and SCP forecast, I have to admit we're not the best forecasters of getting it right, the split there. Right now I think we would expect to see slightly greater growth in our Wholly Owned business than at SCP.

所以，我不評論 NEG。我只想說，我們第一季已經定案。這些合約是在季度開始時運作，我們就完成了，因此我們不預期會有任何變動。至於全資（Wholly Owned）與 SCP 的預測，我必須承認，我們在預測兩者之間的分拆比例方面並不是最準的。目前我認為，我們預期全資業務的成長會略高於 SCP。

We're not really seeing an expansion of capacity at our Korean customers, whereas we have seen that in our Wholly Owned business, particularly in China. So, I would say we tend to think it will be slightly in favor of our Wholly Owned business, but, again, I offer you we're not the best forecasters of how it splits.

我們並沒有真正看到韓國客戶的產能擴張；相較之下，我們在全資業務上看到了擴張，特別是在中國。所以我會說，我們傾向認為會稍微偏向我們的全資業務，但再次強調，我只能告訴你，我們並不是最擅長預測它會如何分拆。

If I could just follow-up. The comment that was made that you made in the conference call in the preamble that a one-point change in the yen impacts your revenue by $8. Last quarter it was $6 and I've noticed it kind of bounces around between $6 and $9. What are the main elements to how that changes? What changed from last quarter to this quarter to make a $6 versus an $8 change? I don't know if it's too technical, but just trying to gauge where that sensitivity comes from?

如果我可以再追問一下。你在電話會議開場白中提到，日圓每變動 1 點會使你們的營收受到 8 美元的影響。上季是 6 美元，我注意到它大概在 6 到 9 美元之間上下波動。造成這個變化的主要因素是什麼？從上季到這季，什麼改變了，讓它從 6 美元變成 8 美元？我不知道這會不會太技術性，但我只是想衡量這種敏感度是從哪裡來的？

It's around the fact that Gorilla is a larger proportion of our Business and Gorilla is priced in dollars.

這主要是因為 Gorilla 在我們業務中的占比更大，而 Gorilla 是以美元計價。

Very helpful. Thanks so much.

非常有幫助。非常感謝。

Okay, I'd like to finish with a few comments. We have a few IR announcements. We'll be holding our investor day in New York City on February 8 at Cipriani. This year, in addition to the normal crowd favorite hands-on demonstrations at our business exhibits, we're going to give a detailed overview of our growth expectations for 2013. In addition to our CEO, Wendell Weeks, and myself, three of our business group leaders will be speaking to you about their plans to March Up our earnings. It's going to be very informative and hands-on, and I hope you'll consider attending in person.

好，我想用幾點說明作結。我們有幾項投資人關係（IR）公告。我們將於 2 月 8 日在紐約市 Cipriani 舉辦投資人日。今年，除了在我們的業務展示區提供一如既往、最受歡迎的實作示範之外，我們還會就 2013 年的成長預期提供詳細概述。除了我們的執行長 Wendell Weeks 和我之外，我們三位事業群領導人也會向各位說明他們推動我們獲利在 3 月季度提升的計畫。這將會非常具資訊性且可實際體驗，我希望你能考慮親自出席。

To summarize the highlights of our call, we think we made great progress on our plan to stabilize the Display and grow earnings in our other businesses during 2012. And although the economy did impact some of our plans we took actions to control costs and achieve new sales and business profitability milestones. I think most importantly, we grew earnings per share, ex-specials, year-over-year in quarter four, and this is the first time we've done this since 2010. We see this as an indication we've begun our return to earnings growth.

總結本次電話會議的重點，我們認為在 2012 年，我們在穩定顯示器（Display）並在其他業務提升獲利的計畫上取得了很大進展。雖然經濟情勢確實影響了我們部分計畫，但我們採取了控制成本的行動，並達成新的銷售與業務獲利里程碑。我認為最重要的是，我們在第四季的每股盈餘（不含特殊項目）較去年同期成長，這是自 2010 年以來我們第一次做到。我們將此視為我們已開始重回獲利成長的跡象。

Our Gorilla Glass business attained $1 billion dollars in sales after only six years. We made a key acquisition in Life Sciences. We finished a $1.5 billion share buyback and also increased our dividend by 20%. And though a deep downturn in the solar market is impacting Dow Corning and our equity earnings in the short term we believe we have ways to mitigate it.

我們的 Gorilla Glass 業務在短短六年後就達成 10 億美元的銷售額。我們在生命科學（Life Sciences）領域完成了一項關鍵收購。我們完成了 15 億美元的庫藏股回購，並將股利提高了 20%。此外，儘管太陽能市場的嚴重下滑在短期內正影響 Dow Corning 以及我們的權益法收益，但我們相信有方法可以加以緩解。

We're coming into 2013 with expectations in growth in several businesses. We do have some caution about the yen, but we intend to maintain stable Display earnings with moderate price declines, manage our glass capacity well, and with cost reductions, and Telecom, Specialty Materials, Life Sciences and Environmental are poised for growth in 2013. So, we'll look forward to seeing you at our annual investor meeting on February 8.

我們帶著多項業務成長的預期進入 2013 年。我們對日圓確實有些謹慎，但我們打算在價格溫和下滑的情況下維持顯示器獲利穩定，妥善管理玻璃產能並進行成本降低；而電信（Telecom）、特殊材料（Specialty Materials）、生命科學（Life Sciences）與環境（Environmental）業務在 2013 年都具備成長動能。因此，我們期待在 2 月 8 日的年度投資人會議上與各位見面。

Ann?

Ann？

Thank you, Jim, and thank you all for joining us today. A playback of the call is available beginning at 10.30 AM Eastern Standard time this morning and will run until 5 PM, Tuesday, February 12. To listen dial 1-800-475-6701. The access code is 276093. The audiocast, of course, is available on our website during that time. John, that concludes our call. Please disconnect all lines.

謝謝你，Jim，也謝謝各位今天加入我們。本次電話會議的重播將於今天上午美東時間 10:30 開始提供，並將持續到 2 月 12 日（週二）下午 5 點。收聽請撥 1-800-475-6701。存取碼為 276093。當然，在此期間也可於我們的網站收聽網路音訊直播回放（audiocast）。John，我們的電話會議到此結束。請斷開所有線路。