康寧 (GLW) 2013 Q2 法說會逐字稿

Good morning. Welcome to the Corning Incorporated second-quarter 2013 earnings results. It is my pleasure to turn the call over to Ann Nicholson, Division Vice President of Investor Relations.

早安。歡迎參加康寧公司（Corning Incorporated）2013 年第二季財報結果電話會議。我很高興將電話會議交給投資人關係事業部副總裁 Ann Nicholson。

Thank you, Cynthia, and good morning. Welcome to Corning's second-quarter conference call. With me today is Jim Flaws, Vice Chairman and Chief Financial Officer. Before Jim begins his formal comments, I would 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. You should also note that this presentation contains a number of non-GAAP measures. A reconciliation can be found on our website. Now I would like to turn the call over to Jim.

謝謝你，Cynthia，早安。歡迎參加康寧第二季電話會議。今天與我一同出席的是副董事長兼財務長 Jim Flaws。在 Jim 開始正式發言之前，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）所定義的範圍。這些陳述涉及多項風險、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。也請注意，本簡報包含多項非 GAAP 衡量指標。其調節表可於我們的網站查閱。現在我想把電話會議交給 Jim。

Thanks, Ann. Good morning, everyone. Our priority over the last 18 months has been to reestablish positive momentum in our Display technology segment, and to also grow our other businesses. We had a very strong second-quarter, delivering our third conservative quarter of year-over-year double-digit EPS growth. We further stabilized our Display technology business, and achieved growth in our Telecom, Specialty Material, and Life Sciences businesses. Display continues to regain positive momentum. LCD glass price declines were less than in quarter one, and in the range we expected. Looking ahead, we expect Q3 price declines to be in the same moderate range as Q2, and our market share to remain stable going forward.

謝謝，Ann。各位早安。過去 18 個月我們的優先事項，是在顯示技術（Display Technology）事業部重新建立正向動能，同時也推動其他業務成長。我們第二季表現非常強勁，連續第三個保守季度實現 EPS 年對年雙位數成長。我們進一步穩定了顯示技術業務，並在電信（Telecom）、特殊材料（Specialty Materials）與生命科學（Life Sciences）業務達成成長。顯示業務持續恢復正向動能。LCD 玻璃價格下跌幅度小於第一季，且落在我們預期的區間。展望未來，我們預期第三季價格下跌幅度將與第二季相同，維持在溫和區間，而我們的市占率在未來也將保持穩定。

Combined with our new product developments and cost performance, we are delighted with Display's results in 2013, and we are growing our four other businesses. All four provided solid operation results, collectively contributing to sales growth, and 40% higher net income on a year-over-year basis. In total, with sales and gross margin up and S&A down, we delivered an additional $0.06 of EPS to the bottom line year-over-year, despite the weaker equity Company earnings. This is a significant achievement against our commitment to investors to return the Company to earnings growth. We believe three conservative quarters of double-digit year-over-year growth and on outlook for continued year-over-year earnings growth in quarter three, provides solid evidence that our strategy is working.

結合我們的新產品開發與成本表現，我們對 2013 年顯示業務的成果感到非常滿意，同時也在推動另外四項業務成長。這四項業務皆提供穩健的營運成果，合計帶動營收成長，並使淨利年對年提高 40%。整體而言，在營收與毛利率上升、S&A 下降的情況下，儘管權益法投資公司獲利較弱，我們仍使 EPS 年對年額外增加 0.06 美元。這是對我們向投資人承諾讓公司重回獲利成長的一項重大成果。我們認為，連續三個保守季度的年對年雙位數成長，以及第三季仍可望持續年對年獲利成長的展望，充分證明我們的策略正在奏效。

Now before we jump into the details, I would like to remind you that last quarter we began reporting our results as core earnings, in order to exclude nonperformance-related items and increase the transparency of operating results. It excludes two significant items, yen exchange rate fluctuations and the results of the polysilicone segment of Corning's affiliate, Dow Corning Corporation, and several other items such as acquisition costs, restructuring charges and pension adjustments. We report our results at a constant yen exchange rate of JPY93. As a reminder, we chose the JPY93 rate because of the hedging we did that lasts through 2014.

在進入細節之前，我想提醒各位，上季我們開始以核心盈餘（core earnings）方式揭露結果，以排除與績效無關的項目並提升營運結果的透明度。核心盈餘排除兩項重大因素：日圓匯率波動，以及康寧關聯企業 Dow Corning Corporation 的多晶矽（polysilicone）事業部門的結果；並排除其他若干項目，例如併購成本、重整費用與退休金調整。我們以固定日圓匯率 JPY93 來報告結果。提醒各位，我們選擇 JPY93 匯率，是因為我們所做的避險將持續至 2014 年。

To further reduce the impact of yen exchange rate fluctuations, core earnings exclude the impact of translation for the yen-to-dollar exchange rate and purchase collars. And beginning in quarter two, it also excludes the yen-related transactions, specifically yen-denominated transaction hedges. Removing the impact of these transaction hedges reduces our core EPS by about $0.01 in the first- and second-quarter of 2014. It also reduces our previous estimate of 2012 core earnings. A new 2012 summary and a 2011 core earnings non-GAAP reconciliation will be available on our website. Our core earnings are non-GAAP financial measures, and of course, we continue to report our GAAP results, and please refer to the GAAP reconciliations on our website. Ann Nicholson, in Investor Relations will be available after today's call to answer any questions you have about the financial reconciliations.

為進一步降低日圓匯率波動的影響，核心盈餘排除日圓兌美元匯率換算（translation）以及購買式區間（purchase collars）的影響。並且自第二季起，也排除與日圓相關的交易項目，具體而言為以日圓計價的交易避險（yen-denominated transaction hedges）。移除這些交易避險的影響，將使我們 2014 年第一季與第二季的核心 EPS 約減少 0.01 美元。這也會降低我們先前對 2012 年核心盈餘的估計。更新後的 2012 年摘要以及 2011 年核心盈餘的非 GAAP 調節表將公布於我們的網站。我們的核心盈餘屬於非 GAAP 財務衡量指標；當然，我們仍會持續揭露 GAAP 結果，並請參閱網站上的 GAAP 調節表。投資人關係部門的 Ann Nicholson 將在今天電話會議後提供協助，回答各位對財務調節的任何問題。

And now I would like to turn to our quarter two core earning results. Our second-quarter sales were $2 billion, up 11% versus a year ago. Gross margin was 43%, up 2 points year-over-year, and better than our expectation. Specialty Materials and Telecom had particularly good margin growth versus last year. Gross equity earnings of $173 million were down 18% versus a year ago. As a reminder, the SCP portion of this is at constant yen. I am going to provide more color on equity earnings in a few minutes.

接下來我將說明第二季核心盈餘結果。第二季營收為 20 億美元，較去年同期成長 11%。毛利率為 43%，年對年提高 2 個百分點，且優於我們的預期。特殊材料與電信業務的毛利率年對年成長尤其亮眼。權益法投資毛利（gross equity earnings）為 1.73 億美元，較去年同期下降 18%。提醒各位，其中 SCP 的部分是以固定日圓匯率計算。我將在幾分鐘後就權益法投資獲利提供更多說明。

Our core effective tax rate for Q2 was 16.6%. Core earnings per share were $0.32, up $0.06 over a year ago. Remember, core performance reports the results at a constant yen exchange rate of JPY93. Better operating performances drove the core EPS improvement over analyst consensus. EPS as stated here is a non-GAAP measure, and a reconciliation to GAAP can be found on our website. Now versus a year ago, SG&A was down in absolute dollars and as a percentage of sales, and R&D spending was also down as a percentage of sales.

第二季核心有效稅率為 16.6%。核心每股盈餘為 0.32 美元，較去年同期增加 0.06 美元。請記得，核心績效係以固定日圓匯率 JPY93 報告結果。較佳的營運表現帶動核心 EPS 優於分析師共識預期。此處所述 EPS 為非 GAAP 衡量指標，其與 GAAP 的調節可於我們的網站查閱。與去年同期相比，SG&A 以絕對金額及占營收比重皆下降，而研發（R&D）支出占營收比重亦下降。

So now let me go into our detailed quarter two segment results, and I will start with Display. Our view is the overall LCD glass market was up slightly in the quarter. Sequentially, Corning and SCP's combined volume grew by mid single-digits, with volume in the wholly-owned Display business up digits mid to high single-digits, and SCP volume up low single-digits. Overall, our market share remains stable.

接下來我將說明第二季各事業部的詳細結果，先從顯示業務開始。我們的看法是，本季整體 LCD 玻璃市場小幅成長。就季對季而言，康寧與 SCP 合計出貨量成長約中個位數百分比；其中全資顯示業務出貨量成長約中到高個位數百分比，而 SCP 出貨量成長約低個位數百分比。整體而言，我們的市占率仍維持穩定。

Core sales for Display were $670 million in Q2, an increase of 21% versus last year. Price declines were less than the first quarter, in the range we expected. Gross equity earnings, also measured at a constant yen from our Display equity affiliates were $117 million in Q2, a decrease of 19% year-over-year. For your modeling purposes, Display equity affiliates second-quarter Display glass sales in constant yen were about $564 million, a decrease of 12% from last year. As a reminder, this represents Display glass sales only. Our public filings will report our Display equity affiliates' total sales, which include other products.

顯示業務第二季核心營收為 6.70 億美元，較去年同期增加 21%。價格下跌幅度小於第一季，落在我們預期的區間。以固定日圓計算，來自我們顯示業務權益法投資關聯企業的權益法投資毛利（gross equity earnings）第二季為 1.17 億美元，年對年下降 19%。供各位建模參考，以固定日圓計算，顯示業務權益法投資關聯企業第二季顯示玻璃銷售額約為 5.64 億美元，較去年同期下降 12%。提醒各位，這僅代表顯示玻璃銷售額。我們的公開申報文件將揭露顯示業務權益法投資關聯企業的總銷售額，其中包含其他產品。

I think it is important to also call out year-over-year volumes. SCP volume in Q2 was consistent year-over-year, reflecting Korean panel makers' relatively constant utilizations with low capacity additions. Our wholly-owned business volume was up more than 40% versus last year, primarily reflecting the strong growth in the Chinese market, as well as worldwide large-size television demand. Display's core net income was up 11% versus Q2 of 2012. The results reflect increased sales and solid cost reduction efforts over last year, resulting in consistent percent gross margin. The ability to maintain gross margins through cost reduction is a significant part of Display's plans to reestablish positive momentum.

我認為也必須特別指出年對年出貨量的變化。SCP 第二季出貨量與去年同期一致，反映韓國面板廠在新增產能有限的情況下，稼動率相對持平。我們全資業務的出貨量較去年同期增加超過 40%，主要反映中國市場的強勁成長，以及全球大尺寸電視需求。顯示業務核心淨利較 2012 年第二季成長 11%。結果反映營收增加與相較去年穩健的降本努力，使毛利率百分比維持一致。透過成本降低維持毛利率的能力，是顯示業務重新建立正向動能計畫中的重要一環。

Now on the supply chain front, we estimate inventory grew to 18 weeks in Q2, up from 17 at the end of Q1. As a reminder, inventory was 18.7 at the end of Q2 last year. We continue to monitor inventory, but we believe several factors are in play driving the increase. First, we believe the supply chain inventory floor, or minimum carrying level to avoid stock outs has increased. Screen size proliferation by panel makers has increased the number of models carried at retail, and therefore, the absolute amount of inventory in the supply chain. We also believe the supply chain may need more inventory for growing and emerging markets. I will comment more on the supply chain in our outlook section.

就供應鏈方面而言，我們估計第二季庫存增加至18週，高於第一季末的17週。提醒一下，去年第二季末庫存為18.7週。我們持續監控庫存，但我們認為有數項因素正在推動這項增加。首先，我們認為供應鏈的庫存底線（亦即為避免缺貨所需的最低持有水位）已提高。面板製造商推動螢幕尺寸多樣化，增加了零售端所需承載的機型數量，因此也提高了供應鏈中的絕對庫存量。我們也認為，供應鏈可能需要更多庫存以支援成長中與新興市場。我會在展望部分對供應鏈再多做說明。

Now turning to Telecom, Q2 sales were $601 million, up 8% year-over-year. The majority of the year-over-year increase was due to Australia's NBN project ramp, growth in wireless, fiber cable and data center projects in China. Those offset the year-over-year decline we saw in Europe. Sales beat our expectations, driven by stronger fiber and home projects in North America. Sales grew 28% sequentially, driven by an increase in demand for nearly all products in all regions, particularly North American fiber in the home, in Canada, and China fiber and cable. An acquisition in Brazil and the consolidation of a previous small equity affiliate also contributed to sequential and year-over-year growth. Telecom's year-over-year net income was up 62%. Earnings improvement was driven by the higher volume, as well as cost reductions in manufacturing and SG&A. Quarter two was Telecom's highest sales and net income quarter in more than a decade.

接著談電信事業，第二季銷售額為6.01億美元，年增8%。年增的主要原因是澳洲NBN專案加速推進、無線業務成長，以及中國的光纖電纜與資料中心專案成長。上述成長抵銷了我們在歐洲看到的年減。銷售額優於我們預期，主要由北美更強勁的光纖與到府（home）專案所帶動。銷售額季增28%，係由各地區幾乎所有產品需求增加所驅動，尤其是北美到府光纖、加拿大，以及中國的光纖與電纜。巴西的一項收購，以及對先前一家小型權益法關聯企業的合併，也對季增與年增有所貢獻。電信事業的年增淨利上升62%。獲利改善來自更高的出貨量，以及製造與銷售、一般及管理費用（SG&A）的成本降低。第二季是電信事業十多年來銷售額與淨利最高的一季。

Now moving to Environmental. Q2 sales were down 8% year-over-year, and actually slightly below our expectations. You will recall that the first half of 2012, heavy duty truck sales were very robust, and we were actually sold out. Since then, the US Class A truck demand at retail and build rates have softened. Our heavy duty diesel sales were down versus last year, and were the main driver of the division sales decline. Light duty substrate sales were up slightly versus Q2 of 2012. We do expect a slight uptick in heavy duty diesel sales in the coming quarters, and I will comment more on that in the outlook. Now despite the environmental year-over-year sales decline, net income was actually consistent year-over-year, driven by strong operational execution in the auto business, offsetting decline in diesel product volumes.

接著談環境事業。第二季銷售額年減8%，且實際上略低於我們的預期。各位會記得，2012年上半年重型卡車銷售非常強勁，我們甚至是供不應求、全數售罄。自那之後，美國A級卡車在零售端的需求與生產（build）速度已趨緩。我們的重型柴油產品銷售較去年下降，並成為該事業部銷售下滑的主要原因。輕型載體（substrate）銷售較2012年第二季略有增加。我們預期未來幾季重型柴油產品銷售將小幅回升，我也會在展望中進一步說明。儘管環境事業銷售額年減，淨利其實與去年持平，係由汽車業務強勁的營運執行所帶動，抵銷了柴油產品出貨量下滑的影響。

Specialty Materials Q2 sales were up 17% sequentially as expected, and Gorilla delivered on its sequential growth target in the quarter. Core net income was up 33%, with significant improvements in Gorilla Glass manufacturing performance versus last year. We are very, very pleased with the improvement in Gorilla gross margins over the last several quarters. In Life Sciences, Q2 sales were up 35% year-over-year due to the additional sales from Discovery Labware acquisition which closed in October of last year. The acquisition integration is going very smoothly, and is accretive to the segment again this quarter. Year-over-year core net income more than doubled on these additional sales.

特殊材料第二季銷售額如預期季增17%，Gorilla在本季達成其季增目標。核心淨利上升33%，Gorilla Glass製造績效相較去年有顯著改善。我們對Gorilla毛利率在過去幾季的改善感到非常、非常滿意。生命科學方面，第二季銷售額年增35%，主要來自去年10月完成的Discovery Labware收購所帶來的額外銷售。收購整合進行得非常順利，本季再次對該事業部具增益（accretive）。在這些額外銷售帶動下，核心淨利年增超過一倍。

Now moving to Dow Corning. Gross equity earnings of silicones were down 19% year-over-year, down significantly from our original expectations. These earnings were flat with Q1, but we had been looking for improvement. Sales were down year-over-year, and pricing issues in lower-end silicone products in several geographies emerged during the quarter. I will comment more on this in the outlook section. Although we don't include Hemlock numbers in our core earnings, Hemlock results actually improved sequentially and year-over-year.

接著談Dow Corning。矽酮（silicones）的權益法毛利（gross equity earnings）年減19%，較我們原先預期大幅偏弱。這些獲利與第一季持平，但我們原本期待會有所改善。銷售額年減，且本季在多個地區的低階矽酮產品出現定價問題。我會在展望部分再多做說明。雖然我們不將Hemlock的數字納入核心獲利，但Hemlock的結果其實在季比與年比上都有所改善。

Our balance sheet remains very strong. We ended the second-quarter with $5.5 billion in cash and short-term investments, with about $1.3 billion of that in the United States. Our net cash position is $2.6 billion. Cap spending is $244 million in the quarter, and we remain on track to spend approximately $1.3 billion in capital this year. Free cash flow for the quarter was $62 million. As a reminder, free cash flow is actually is a non-GAAP measure. A reconciliation to GAAP can be found on our website.

我們的資產負債表仍然非常強健。第二季末我們持有55億美元的現金與短期投資，其中約13億美元位於美國。我們的淨現金部位為26億美元。本季資本支出為2.44億美元，我們仍按計畫在今年投入約13億美元的資本。本季自由現金流為6,200萬美元。提醒一下，自由現金流其實是一項非GAAP衡量指標。與GAAP的調節表可在我們的網站上查閱。

You may recall in late April, we announced an 11% common stock dividend increase, and launched our $2 billion stock buyback program. During quarter two, we repurchased $242 million of stock. Now also during the quarter we entered into some new FX forward contracts to mitigate the potential negative impact of a weakening yen on our results above JPY93.5. No upfront premium was required for these hedges. These new contracts hedge about 25% of our projected 2015 yen earnings.

各位可能記得在4月下旬，我們宣布普通股股利提高11%，並啟動20億美元的庫藏股回購計畫。第二季期間，我們回購了2.42億美元的股票。此外，本季我們也簽訂了一些新的外匯遠期合約，以降低日圓走弱至高於93.5日圓兌1美元（JPY93.5）時，對我們業績可能造成的負面影響。這些避險不需要支付任何前期權利金。這些新合約避險了我們預估2015年日圓計價獲利約25%。

Now let me turn to the outlook. In the third-quarter, we believe Corning is well-positioned to deliver a fourth conservative quarter of year-over-year EPS growth, driven by continued moderate LCD glass price declines, and growth in Telecom, Life Sciences and Environmental. This optimism is cautiously tempered by the equity earnings performance of Dow Corning, and somewhat at SCP. I will speak to each in more detail as I go through the forecast.

接下來談展望。在第三季，我們認為Corning具備良好條件，可望在LCD玻璃價格持續溫和下滑，以及電信、生命科學與環境事業成長的帶動下，交出連續第四季保守的每股盈餘（EPS）年增。這份樂觀仍需審慎看待，因Dow Corning的權益法獲利表現，以及SCP在某種程度上，帶來壓力。我在逐項說明預測時，會更詳細談到各項因素。

Let me start with Display. Our current view of the end market in 2013, we expect retail as measured in square feet of glass to be up mid to high single-digits. For reference, 2012 on a similar metric was 3.5 billion square feet. We have revised our forecast for LCD television units to grow in the mid single-digits, given continued softness in Europe and Japan. However, we are also raising our view of average screen size, driven by large-size television growth. Through May, worldwide TV sales of televisions 50-inch and larger were up 118%. Therefore, our view of demand for 2013 as measured in square feet remains the same. As a fun fact, to help you understand the dynamic of these larger televisions, a 65-inch television has as much glass as four 32-inch televisions.

先從顯示事業開始。我們目前對2013年終端市場的看法是，以玻璃平方英尺衡量的零售需求，預期將呈現中到高個位數成長。供參考，2012年以相同指標衡量為35億平方英尺。鑑於歐洲與日本持續疲弱，我們已將LCD電視出貨量成長預測下修至中個位數。不過，我們也上調了平均螢幕尺寸的看法，主要由大尺寸電視成長所驅動。截至5月，全球50吋以上電視的銷售量年增118%。因此，我們對2013年以平方英尺衡量的需求看法維持不變。補充一個有趣的事實，為了幫助各位理解大尺寸電視的動態：一台65吋電視所用的玻璃量，相當於四台32吋電視。

We factored into our forecast the conclusion of China energy savings subsidies, although there are of course, rumors that a more limited subsidy may be re-introduced this fall. Area sell-through in China in the first half was up 30% year-over-year and higher than we had thought. Given that, we are forecasting the second half area growth in China to only be about 5% versus the second half of 2012. PC market, we expect 10% year-over-year unit growth, with all of that attributable to tablets. Monitor units are expected to be down about 5%. Now in quarter three, we, as we near the end of July, we see the Q3 LCD glass market consistent to up slightly sequentially. We expect our wholly-owned Display business and SCP combined volumes to be consistent to up slightly with Q2 volumes, and our shares remain stable.

我們在預測中已納入中國節能補貼結束的影響；當然，市場也有傳聞指出今年秋季可能會重新推出規模較小的補貼。中國上半年以面積衡量的銷售（sell-through）年增30%，高於我們原先預期。因此，我們預測中國下半年面積成長相較2012年下半年僅約5%。PC市場方面，我們預期出貨量年增10%，且全部成長都歸因於平板電腦。顯示器（monitor）出貨量預期將下滑約5%。至於第三季，隨著我們接近7月底，我們看到第三季LCD玻璃市場與前一季持平至略為季增。我們預期全資的顯示事業與SCP合計出貨量將與第二季持平至略為增加，而我們的市占率維持穩定。

Q3 is typically when the supply chain expands inventory as measured in square feet in preparation for Q4 holidays. We believe this will happen again in Q3 of 2013, although this may be at a slightly reduced amount, given the second half of demand in China that I just mentioned. As measured by forward-looking weeks of inventory, we believe inventory will execute 3 lower than Q2. We expect -- we estimate LCD glass prices to -- in Q3 will decline at a similar rate to Q2. I think it bears repeating that moderate price declines in Q2, and our expectation they will to continue to moderate in Q3, provide another strong indicator that Display is stabilizing.

第三季通常是供應鏈為了準備第四季假期旺季，而以平方英尺衡量擴增庫存的時點。我們相信2013年第三季也會再次發生，儘管考量到我剛提到的中國下半年需求，增幅可能會略為縮小。以前瞻性的庫存週數衡量，我們認為庫存將比第二季低3週。我們預期——我們估計LCD玻璃價格在第三季將以與第二季相近的速度下滑。我認為值得重申的是，第二季溫和的價格下跌，以及我們預期第三季將持續溫和下跌，提供了另一個強烈指標，顯示顯示器業務正在趨於穩定。

Now moving to Telecom, we expect Q3 sales to be up about 20% versus Q3 of 2012, driven by strong fiber in the home demand in North America, Australia, and Europe, enterprise growth due to data center projects, particularly in the United States and China, and of course the sales of our recent acquisition in Brazil, and a full quarter of the newly-consolidated affiliate. For the year, we expect sales and earnings growth in Telecom driven by fiber to the home and enterprise projects. We expect the China fiber market actually to be flat in 2013, due to large China Telecom tenders coming later than originally expected. We expect the worldwide fiber market to be up slightly year-over-year, driven by emerging markets in India, other Asian economies, and Latin America.

接著談電信業務，我們預期第三季銷售額將較2012年第三季成長約20%，主要受北美、澳洲與歐洲強勁的光纖到府需求帶動，亦包括因資料中心專案（特別是在美國與中國）帶來的企業端成長，當然還有我們近期在巴西收購案的銷售貢獻，以及新納入合併之關聯企業的完整一季貢獻。就全年而言，我們預期電信業務的銷售與獲利成長將由光纖到府與企業專案所驅動。我們預期2013年中國光纖市場實際上將持平，原因是中國電信的大型招標時程比原先預期更晚。我們預期全球光纖市場將較去年小幅成長，主要由印度、其他亞洲經濟體與拉丁美洲等新興市場帶動。

In Environmental, we expect Q3 sales to be up slightly versus Q3 of 2012, driven by some recovery in the North American heavy duty diesel market. We believe tighter regulations in Europe and China will lead to growth and demand for heavy duty diesel products as we begin to enter into 2014. For the full year, we believe automobile production will continue to grow, driven by strength in North America and Asia. Specialty Material sales are expected to increase sequentially about 10% in Q3 driven by Gorilla Glass. We expect advanced optics sales to be consistent sequentially. The semiconductor industry may be turning cyclically positive coming in the second half, so our advanced optic business could see growth in Q4.

在環境事業方面，我們預期第三季銷售額將較2012年第三季小幅成長，主要受北美重型柴油市場部分復甦帶動。我們相信歐洲與中國更嚴格的法規，將在我們逐步進入2014年之際，帶動重型柴油產品的成長與需求。就全年而言，我們相信汽車產量將持續成長，主要由北美與亞洲的強勁表現所驅動。特殊材料第三季銷售預期將較前一季成長約10%，主要由Gorilla Glass帶動。我們預期先進光學的銷售將與前一季大致持平。半導體產業在下半年可能進入景氣循環的正向轉折，因此我們的先進光學業務在第四季可能出現成長。

In Gorilla Glass, our customers are moving to thinner glass which, of course, helps our manufacturing costs. This is an important driver of Specialty Material's net income being up 35% year-to-date. We expect the trend to thinner Gorilla Glass to continue. We expect the retail market for cover glass for phones and tablets to be up significantly, around 30% in 2013. Corning will feel less growth, with some work-off of excess inventory from Q4 2012 shipments, and also customer yield improvements this year. However, the retail growth, combined with product leadership leaves us very excited about our opportunities for Gorilla Glass.

在Gorilla Glass方面，我們的客戶正轉向更薄的玻璃，這當然有助於降低我們的製造成本。這是推動特殊材料事業年初至今淨利成長35%的重要因素。我們預期Gorilla Glass朝更薄化的趨勢將持續。我們預期2013年手機與平板的保護蓋玻璃零售市場將大幅成長，約30%。康寧的成長幅度將較小，原因包括消化2012年第四季出貨所形成的過剩庫存，以及客戶今年良率提升。然而，零售市場的成長，加上我們的產品領先地位，讓我們對Gorilla Glass的機會感到非常振奮。

Yesterday, we announced our latest Gorilla Glass product, Gorilla Glass NBT, our unique solution for touch-enabled notebooks. A major customer, Dell, will be integrating our glass into their new line-up of products launching this fall. Corning Gorilla Glass NBT has 8 to 10 times the scratch resistance of chem strength and soda lime glass, has superior surface strength that allows for thinner designs. At just a 1% to 2% of a device's retail price, we believe it is a very cost-effective solution for the protection of thinner, lighter, touch-enabled notebooks. We are working with additional customers now, and expect to announce additional models in the coming months.

昨天，我們宣布最新的Gorilla Glass產品——Gorilla Glass NBT，這是我們針對觸控筆記型電腦的獨特解決方案。主要客戶戴爾（Dell）將把我們的玻璃整合到其今年秋季推出的新產品系列中。康寧Gorilla Glass NBT的抗刮性是化學強化玻璃與鈉鈣玻璃的8到10倍，並具備更優異的表面強度，可支援更薄的設計。我們相信，以僅占裝置零售價格的1%到2%而言，這是保護更薄、更輕、具觸控功能筆電的極具成本效益的解決方案。我們目前也正與其他客戶合作，並預期在未來幾個月宣布更多機型。

We will likely see Gorilla Glass sales for these new products, beginning the second half of this year and continuing in 2014. We believe the market for touch notebooks could triple from 2013 to 2017, and Corning will have a significant incremental market opportunity as a result of this growth with our new NBT glass. Now Gorilla Glass NBT is our latest advancement in cover glass technology, and we continue to work on additional innovations. We expect to ship both our anti-microbial and anti-reflective Gorilla Glass products in the second of half of this year. Now in Life Sciences, we expect sales to be up about 40% to 45% year-over-year, mainly due to the added sales from our acquisition.

我們很可能會在今年下半年開始看到這些新產品帶來的Gorilla Glass銷售，並延續至2014年。我們相信觸控筆電市場在2013年至2017年間可能成長三倍，而康寧將因這項成長，透過我們新的NBT玻璃獲得顯著的增量市場機會。Gorilla Glass NBT是我們在保護蓋玻璃技術上的最新進展，我們也持續推動更多創新。我們預期在今年下半年出貨具抗菌與抗反射功能的Gorilla Glass產品。在生命科學事業方面，我們預期銷售額將年增約40%至45%，主要來自收購案新增的銷售貢獻。

Now let me turn to Dow Corning. We had told investors in February that Dow Corning expected silicone sales to be up in 2013 and margins to improve. As the year has unfolded, currency, the yen has created some drag. Volume growth has been okay, especially in what we call the spec chemical portion of Dow Corning silicones or the higher margin products. But their key issue is price pressure, especially in low-end silicone products. The reasons are different in China and Europe, but the pain is the same. Dow Corning is working through this by managing supply and shifting mix, while diligently focusing on cost reduction.

接著我談談Dow Corning。我們在2月曾告訴投資人，Dow Corning預期2013年矽膠銷售將成長且毛利率將改善。隨著今年進展，匯率因素——日圓——造成了一些拖累。銷量成長尚可，特別是在我們所稱Dow Corning矽膠中的特用化學品（spec chemical）部分，也就是毛利較高的產品。但他們的關鍵問題是價格壓力，尤其是在低階矽膠產品。在中國與歐洲的原因不同，但痛點相同。Dow Corning正透過管理供給與調整產品組合來因應，同時持續專注於降低成本。

Dow Corning is resetting its expectations for the year in total for silicone's business, and we expect our total equity earnings from Dow Corning silicone's business to now show only slight improvement year-over-year. Dow Corning expects earnings from its silicone segments to be down about 20% year-over-year, but the drop is more severe sequentially versus Q2, down almost 50%. Part of the more severe sequential drop is driven by cost movements within inventories, which should reverse in Q4. Dow Corning expects Q4 to bounce up, hopefully closer to the Q2 level of earnings. Most concerning to us is the level of price competition in lower-end silicones in Europe and China. We think this new Dow Corning information is different enough that I recommend analysts consider adjusting your models for the anticipated silicones impact.

Dow Corning正在重新設定今年整體矽膠業務的預期，而我們預期來自Dow Corning矽膠業務的權益法收益總額，現在僅會呈現年對年小幅改善。Dow Corning預期其矽膠事業部門的獲利將年減約20%，但相較第二季的季對季降幅更為嚴重，接近下滑50%。較嚴重的季對季下滑部分來自庫存內成本變動的影響，該影響應會在第四季反轉。Dow Corning預期第四季將反彈，期望能更接近第二季的獲利水準。我們最擔憂的是歐洲與中國低階矽膠市場的價格競爭程度。我們認為這項新的Dow Corning資訊差異已足夠大，因此我建議分析師在模型中考慮調整對矽膠影響的預期。

Now let me turn to comment on Hemlock. Last week the Chinese government did announce preliminary significant duties on Hemlock's poly going into China, up 53% in the trade case. This is a preliminary determination and one of many steps on a long path towards a final determination in China. While Dow Corning and we are disappointed with this preliminary finding, we have known this was a potential scenario for some time. The United States trade representative has confirmed to the media after this preliminary announcement, they are in discussions with China regarding the global issues in solar technology, including panels and polysilicone.

接著我評論Hemlock。上週中國政府確實宣布對Hemlock出口至中國的多晶矽課徵初步且顯著的關稅，在該貿易案件中稅率上調53%。這是初步裁定，也是通往中國最終裁定漫長流程中的眾多步驟之一。雖然Dow Corning與我們對此初步結果感到失望，但我們早已知道這是潛在情境之一。美國貿易代表在此初步宣布後也向媒體證實，他們正與中國就太陽能技術的全球性議題進行討論，包括面板與多晶矽。

Dow Corning has been and will remain actively engaged with all appropriate parties to seek a mutually acceptable settlement. Ultimately, any tariffs on polysilicone on our modules will impact markets dynamics, but we do not anticipate any immediate impact in Hemlock Semiconductor's performance. With the potential for tariffs looming, Hemlock Semiconductor sales in China were already significantly low. And they have already adjusted output and staffing to match current demand, enabling Hemlock Semiconductor to operate cash flow positive in the second-quarter of 2013.

Dow Corning一直並將持續與所有適當相關方積極接觸，以尋求雙方可接受的和解方案。最終而言，任何對我們模組所用多晶矽的關稅都將影響市場動態，但我們不預期會對Hemlock Semiconductor的表現造成任何立即影響。在關稅陰影下，Hemlock Semiconductor在中國的銷售原本就已顯著偏低。而且他們已調整產出與人力配置以符合目前需求，使Hemlock Semiconductor在2013年第二季得以維持正向營運現金流。

Now let me turn back to the remainder of our Q3 forecast. We expect our core gross margin to be up 1% year-over-year, driven by manufacturing increased sales. SG&A and R&D are expected to be down versus last year as a percentage of sales. Core equity earnings is expected to be down about 25% versus last year. And we expect our core effective tax rate for 2013 to be around 16%. That concludes my opening comments. Ann, I will turn it back to you.

接著我回到我們第三季預測的其餘部分。我們預期核心毛利率將年增1%，主要由製造業務銷售增加所帶動。SG&A與研發費用占銷售額比重預期將較去年下降。核心權益法收益預期將較去年下降約25%。我們預期2013年核心有效稅率約為16%。以上是我開場的評論。Ann，我把時間交還給你。

Thank you, Jim. Operator, we will now open the line for questions.

謝謝你，Jim。接線員，我們現在開放電話線供提問。

(Operator Instructions)

(接線員指示)

We will go to Mark Sue with RBC Capital Markets. Your line is open

我們先請 RBC Capital Markets 的 Mark Sue 提問。您的線路已開通

Thank you, good morning. Some of the programs you have initiated such as capacity control, and the move to thinner glass are helping to improve gross margins. So I am trying to get a sense of the sustainability of your efforts. Are we at a point of diminishing returns, or are there further efforts to tactically improve gross margins? And conversely, are we at a point where you are now getting the premiums, or the early signs of premiums, particularly as it relates to Gorilla Glass and for new applications such as NBT? Maybe if you could help us there, please?

謝謝，早安。你們已啟動的一些方案，例如產能控管，以及改用較薄玻璃，正在幫助提升毛利率。所以我想了解你們這些努力的可持續性。我們是否已到達邊際效益遞減的階段，或是還有進一步可戰術性提升毛利率的措施？反過來說，我們是否已到達你們現在開始取得溢價、或至少看到溢價早期跡象的階段，特別是就 Gorilla Glass 以及 NBT 等新應用而言？如果可以的話，請協助我們釐清，謝謝？

Well, Mark, I assume you are talking about our corporate gross margin. As you know, that is always a combination of the mix of our various businesses. But what we like about our business hand right now is, gross margins in Telecom, Specialty Materials, Life Sciences and Environmental are actually improving. The corporate mix will obviously be dependent on the mix and the sales of those businesses. But the fact that all are improving, leads me to believe that we have the potential to continue to move our year-over-year gross margins up.

Mark，我想你指的是我們的公司整體毛利率。如你所知，那一向是我們各項業務組合的綜合結果。但我們目前對業務狀況感到欣慰的是，電信、特殊材料、生命科學與環境等事業的毛利率其實都在改善。公司層面的組合當然會取決於這些事業的組合與銷售表現。但由於全部都在改善，這讓我相信我們有潛力持續推升年對年毛利率。

Obviously, the most important thing for us remains Display, and we must have moderate price declines. We had good price downward movement in Q2, being less than Q1. Expecting Q3 to be in a similar range. But we continue to believe this potential for price declines potentially to moderate even further as the quarters unfold. So I would say, we are not running into diminishing returns in terms of sustaining gross margins.

顯然，對我們而言最重要的仍是顯示器業務，而我們必須讓價格下滑幅度維持溫和。我們在第二季看到良好的價格下行走勢，且跌幅小於第一季。預期第三季會在相近區間。但我們仍相信，隨著季度推進，價格下滑幅度有可能進一步趨緩。所以我會說，就維持毛利率而言，我們並未遭遇邊際效益遞減。

Okay.

好的。

But it is premature for me to talk about the premiums on our new products.

但現在談我們新產品的溢價還言之過早。

I see. Jim, now that we are almost anniversarying your price change to Gorilla's -- to Corning's price and the market price, the thought is that the price declines, the moderate product price declines will prevail. How does that occur when you have a competitor that is still adding capacity, or is that just very localized, do you feel? And at the same time, as we move towards the back half of the year, are there annual price negotiations that are still variable? Or are we at a point where the pricing change that you have made is going to be beneficial for the industry going forward?

了解。Jim，現在我們幾乎快到你們調整 Gorilla——也就是康寧的定價與市場價格——的一周年了，市場的想法是溫和的產品價格下滑將會持續。在仍有競爭對手持續擴增產能的情況下，這要如何發生？還是你覺得那只是非常局部的狀況？同時，隨著我們進入下半年，是否仍有年度價格談判存在變數？或者我們已到達你們所做的定價調整將在未來對產業有利的階段？

Well, obviously, I can't speak for our competition, but we believe that price declines have moderated for the entire industry, glass industry. And particularly with the benefit to our panel customers from the yen, we believe there is potential for that to continue. In terms of the capacity additions by our competition, we believe only one of our competitors is adding capacity in Korea. And we believe even that is at a very moderate price. We have learned that capacity there is smaller tanks. So we are hopeful that we will be able to have an industry environment where price declines continue to be at a moderate level. It is premature for me comment on price negotiations and contracts. We will give you an update on that in October.

嗯，顯然我無法代表競爭對手發言，但我們相信整個產業——玻璃產業——的價格下滑幅度已經趨緩。尤其在日圓走勢讓我們的面板客戶受惠的情況下，我們認為這種趨勢仍有延續的可能。就競爭對手的產能擴增而言，我們認為只有一家競爭對手在韓國增加產能。而我們也認為即便如此，其規模也相當溫和。我們得知那裡的產能是較小的熔窯（tanks）。因此我們希望產業環境能讓價格下滑持續維持在溫和水準。現在評論價格談判與合約仍言之過早。我們會在十月向各位更新。

That's helpful. Thank you.

這很有幫助。謝謝。

Thank you. Our next question will come from the line of Wamsi Mohan with Bank of America Merrill Lynch. Your line is open.

謝謝。下一題來自美國銀行美林（Bank of America Merrill Lynch）的 Wamsi Mohan。您的線路已開通。

Yes. Thank you, good morning. Jim, can you comment on the China deceleration in the back half as it pertains to Display? I think you had mentioned an area growth of 5% in the second half? What is the underlying unit presumption, and will your glass shipments match that level of growth, or are inventory levels such that you might be undershipping that level?

是的。謝謝，早安。Jim，你能否就顯示器業務談談中國在下半年的放緩？我想你提到下半年面積成長 5%？其背後對出貨量（units）的假設是什麼？你們的玻璃出貨會與該成長幅度一致，還是因為庫存水位的關係，你們可能會低於該水準出貨？

So we are looking for our glass shipments to be consistent to up slightly. So units will be negative in China in Q3, and but area will be only slightly negative. We are looking for area to be up in Q4 in China. And remember, there are Chinese holidays again, in the later part of the year.

我們預期玻璃出貨將與持平到小幅成長一致。因此在中國，第三季的出貨量（units）會是負成長，但面積只會小幅為負。我們預期中國第四季的面積會轉為成長。另外請記得，年底較後段還會有中國假期。

Okay, thanks. And a quick follow-up, on Specialty Materials, it looks like the revenue outlook was a little softer than most expected. Can you address if this is an inventory correction-related issue, or is it weaker demand given the deceleration in tablets, and to some extent in smartphones? Any update you might have for us on auto? Thanks.

好的，謝謝。再追問一個，關於特殊材料，看起來營收展望比多數人預期稍弱。你能否說明這是否與庫存修正有關，或是因平板電腦放緩、以及某種程度上智慧型手機放緩而導致需求較弱？車用方面有沒有任何最新進展可以分享？謝謝。

So on auto, I don't have any update for Gorilla at this stage. Now relative to Gorilla for consumer electronics, we have been working hard on modeling the supply chain. And we believe that there was excess inventory built up by a number of customers from the fourth quarter, and that is being worked off this year. And then the second thing, of course, is that we have seen yield improvements in the supply chain over the course of the year. So those two things have been -- and it may be reflected in what you perceive as the softer demand for Gorilla. If you take those out, I mean I think would have -- we are looking at the amount of Gorilla being pulled from the supply chain, to go in the phones and tablets going to retail, and we think it is growing nicely. Obviously, it always depends somewhat on model launches in the phone business. But that is what is affecting it. But really, we did have some excess inventory carried over this year.

車用方面，就 Gorilla 而言，我目前沒有任何更新可提供。至於消費性電子的 Gorilla，我們一直努力建立供應鏈模型。我們認為有不少客戶自第四季起累積了過多庫存，而今年正在去化。第二點當然是，我們在今年也看到供應鏈良率提升。這兩點——可能反映在你所感受到的 Gorilla 需求較疲弱上。若把這些因素排除，我的意思是，我們觀察供應鏈拉貨的 Gorilla 用於手機與平板、並進入零售端的量，我們認為成長相當不錯。顯然這也總是會在某種程度上取決於手機業務的新機型推出。但這就是影響因素。不過確實，今年有一些過剩庫存延續下來。

Thanks, Jim.

謝謝，Jim。

Thank you. Our next question comes from the line of Rod Hall with JPMorgan. Your line is open.

謝謝。下一題來自摩根大通（JPMorgan）的 Rod Hall。您的線路已開通。

Yes, thanks for taking my questions. I just have a couple, Jim, for you. One is you had commented on the Chinese subsidy. You expect it may come back down again at the end of the year. Are you assuming that subsidy reduces in your guidance for Q3, or are you assuming it is static in Q3, and then we will wait and see what happens, and decide how to guide for Q4? So that is my first question. And then the other thing is, I wanted to ask you about -- I know you normally don't like to comment too much on capacity utilization. But it feels like utilization for glass capacity is getting relatively high, and I wonder if you could just comment on that? Give us any color on what you think capacity utilization looks like. And then also for panels, just where are we with capacity utilization, and where you think we will be as we get into the seasonally high months here, heading into the back end of the year? Thanks.

是的，謝謝讓我提問。Jim，我有幾個問題想請教你。第一個是你提到中國補貼。你預期年底可能會再度下調。你在第三季指引中是否已假設補貼會降低，還是假設第三季補貼維持不變，然後再觀察後續發展，決定第四季如何給指引？這是我的第一個問題。第二個是我想問你——我知道你通常不太願意對產能利用率多做評論。但感覺玻璃產能的利用率正在變得相對偏高，我想請你對此稍作評論。能否提供一些你對產能利用率狀況的看法？另外就面板而言，目前產能利用率處於什麼位置？以及當我們進入季節性旺季、邁向年底這幾個月時，你認為會到什麼水準？謝謝。

That is a lot of questions. So on our assumption on China demand is, we are assuming the subsidy has gone off, and we are not including anything coming back in our outlook for the remainder of the year. All we have heard is some rumors, is there may be a new subsidy in the fourth quarter. But that is not in our demand at this point in time. Relative to capacity utilization, our wholly-owned Display business is relatively full. We are delighted by that, as you saw the very strong shipments in quarter two. Gorilla, because of the inventory work-off is not as full right now. We have significant capacity still offline at SCP. Panel capacity, I mean, we think there is adequate panel capacity to meet what we see as retail demand.

這問題很多。就我們對中國需求的假設而言，我們假設補貼已經取消，而且在我們對今年剩餘期間的展望中，並未納入任何補貼回歸的因素。我們聽到的只有一些傳聞，說第四季可能會有新的補貼。但目前這並未反映在我們的需求預估中。就產能利用率而言，我們全資的顯示器業務產能相對滿載。我們對此很高興，正如你在第二季看到的出貨非常強勁。Gorilla 由於去化庫存，目前並沒有那麼滿載。我們在 SCP 仍有相當多的產能處於停線狀態。面板產能方面，我是說，我們認為面板產能足以滿足我們所看到的零售需求。

Okay. Thanks, Jim.

好的。謝謝你，Jim。

Thank you. Our next question comes from the line of Patrick Newton with Stifel. Your line is open.

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

Yes, thank you. Good morning, Jim. I wanted to dive a little bit into Display inventory levels. You seem relatively comfortable with the 18 weeks of inventory level. But I am curious if we go by geography, are there any areas where inventories were more elevated or lean, and specifically focusing on China, given your expectation for lack of subsidies in the second half? And then, do you have any concerns on inventory levels in tablets or smartphones relative to TVs?

是的，謝謝。早安，Jim。我想更深入談一下顯示器的庫存水位。你們看起來對 18 週的庫存水準相對放心。但我好奇，如果按地區來看，是否有任何地區的庫存較高或較精實？特別是聚焦中國，考量你們預期下半年不會有補貼。另外，相較於電視，你們對平板或智慧型手機的庫存水位是否有任何疑慮？

I don't have any detailed information on tablets/smartphone inventory. On Display inventories, I would -- I wouldn't characterize it as relatively comfortable. I am always nervous when inventories get to an 18-week level. We have done a lot of work on trying to figure out, is the items that I talked about with the more sizes really having an influence? And we have some positive information that says that has been contributing, but I remain nervous about the 18 weeks. I don't have a lot of geographic information. We only -- the only thing that I will comment on is, that we believe that there has been an excess of 32-inch televisions built in China. And that -- that is the only place that I am aware of where there is a potentially significant problem that is local -- that is localized.

我沒有任何關於平板／智慧型手機庫存的詳細資訊。就顯示器庫存而言，我會——我不會把它形容為相對放心。當庫存到 18 週水位時，我總是會緊張。我們做了很多工作，試著釐清我提到的、更多尺寸品項是否真的產生影響。我們有一些正面的資訊顯示這確實有所貢獻，但我對 18 週仍然感到不安。我沒有太多地理區域的資訊。我唯一要評論的是，我們相信中國生產了過量的 32 吋電視。而且——而且這是我所知道唯一可能存在相當顯著問題、且屬於在地——也就是局部性的地方。

All right. Thank you. And then I guess, as a follow-up on the Gorilla Glass outlook, I am trying to understand, you did make the comment that touch could be shipping, specifically the Gorilla Glass NBT in the second half of '13. I was wondering if any of that is baked at all into your guidance for 3Q? And then, the comments that you made about cover glass for phones and tablets increasing about 30% year-over-year, but you have yield improvements and inventory heading into the year, I am trying to circle that back to your previous guidance, I think that Gorilla Glass would grow double-digits year-over-year. Could you help us perhaps narrow that range between double-digits and 30%?

了解。謝謝。接著我想追問 Gorilla Glass 的展望。我試著理解，你確實提到觸控可能會出貨，特別是 13 年下半年的 Gorilla Glass NBT。我想請問，這部分是否有任何程度已反映在你們對第三季的指引中？另外，你提到手機與平板的蓋板玻璃年增約 30%，但你們今年有良率改善以及年初的庫存因素；我想把這與你們先前的指引連結起來，我記得你們說 Gorilla Glass 年增會是雙位數。你能否協助我們把這個區間在「雙位數」到「30%」之間再縮小一些？

I -- I guess I would say that, when we look at the amount of inventory, and the amount of yield issues that have occurred for this year, that we would -- we would have thought that the demand for Gorilla on us would be greater. And when we adjust for those two things, we are seeing -- we would say that there definitely is greater than 30% growth. But those two items have harmed us, if you do a comparison year-over-year.

我——我想我會這麼說：當我們看今年的庫存量，以及今年發生的良率問題的程度時，我們——我們原本會以為 Gorilla 對我們的需求會更大。而當我們把這兩個因素調整回來看，我們看到——我們會說成長確實高於 30%。但若做年對年比較，這兩項因素對我們造成了不利影響。

But still double-digit expectation for Gorilla Glass growth year-over-year?

但 Gorilla Glass 年對年成長仍然預期是雙位數？

Yes.

是的。

Okay. And then, I am sorry, and the touch notebooks at all baked into Gorilla Glass for 3Q?

好的。另外不好意思，觸控筆電是否有任何部分已反映在第三季的 Gorilla Glass 中？

Yes, but at very small levels. We are still, unsure about how fast the consumer acceptance will come on touch notebooks. I was delighted to see in the Best Buy circular of last week, quite a few advertised. But we put in a fairly low level right now.

有，但量非常小。我們仍然不確定消費者對觸控筆電的接受速度會有多快。我很高興看到上週 Best Buy 的傳單上有不少款式在做廣告。但我們目前納入的水位相當低。

Great. Thank you for taking my questions. Good luck.

很好。謝謝你回答我的問題。祝順利。

Thank you. Our next question comes from the line of Steven Fox with Cross Research. Your line is open.

謝謝。下一個問題來自 Cross Research 的 Steven Fox。請發問。

Thanks. Good morning. One clarification, and then one question on LCD glass. Just on the, Jim, on the guidance you have provided, you referenced year-over-year comparisons versus gross margins and expenses. Is that versus the restatements already provided, the $0.29 and 44% gross margins, or is there something else that has to be restated out of that, that you also mentioned? And then secondly, just on the LCD glass, the two big dynamics seem to be China and average screen size increasing. Is there any sense for how much the China subsidies helped, in terms of that 40% growth in the first half? And then, in terms of average screen size increasing, it seems to -- you seem to be implying an acceleration in sort of average screen size, even versus what you talked about at the analyst meeting. Any more color on how that is helping maybe in the second half of the year? Thank you.

謝謝。早安。一個釐清問題，然後一個關於 LCD 玻璃的問題。先針對你提供的指引，Jim，你提到年對年比較是針對毛利率與費用。這是相對於你們已提供的重編數字——每股 0.29 美元與 44% 毛利率——還是還有其他你也提到、需要從中再重編調整的項目？第二個，關於 LCD 玻璃，兩個主要動態似乎是中國與平均螢幕尺寸增加。你們是否能判斷中國補貼在上半年 40% 成長中貢獻了多少？另外，就平均螢幕尺寸增加而言，你似乎暗示平均尺寸的提升正在加速，甚至比你在分析師會議上談到的還快。能否再多提供一些資訊，說明這如何在下半年帶來幫助？謝謝。

So the demand -- the screen size thing is becoming increasingly important. We really started seeing this large-size impact start last year. We were uncertain whether it would continue to grow this year, but it definitely is. And it seems to be accelerating. And so you are right about that. I think all of my statements on gross margin are -- relate to our restated results from the prior year. And as I mentioned on our website, we have done some updates on that, and many analysts asked us to do 2011 also. So we are going to be publish -- putting that on our website, too.

所以需求——螢幕尺寸這件事正變得愈來愈重要。我們其實從去年就開始看到大尺寸帶來的影響。我們不確定今年是否會持續成長，但確實有。而且看起來正在加速。所以你說得沒錯。我所有關於毛利率的說法——都是——相對於我們前一年的重編後結果。如同我在我們網站上提到的，我們已對此做了一些更新，也有許多分析師要求我們也提供 2011 年的資料。所以我們也會把那個發布——放到我們的網站上。

And then, just in terms of China, how much do you think it helped, the subsidies helped in the first half?

那就中國而言，你認為上半年補貼幫助了多少？

I don't have a detailed number right now.

我目前沒有詳細數字。

Okay. Fair enough. Thanks.

好的。可以理解。謝謝。

Thank you. Our next question comes from the line of Brian White from Topeka. Your line is open.

謝謝。下一個問題來自 Topeka 的 Brian White。請發問。

Hi, Jim. Good morning. When we think about Gorilla Glass on the notebook, I just want to be clear. Are most of these wins primarily coming at the screen level, or are you also providing Gorilla Glass for the back casing and the keyboard?

嗨，Jim。早安。當我們談到筆電上的 Gorilla Glass，我想確認清楚。這些多數的導入案主要是用在螢幕端，還是你們也提供 Gorilla Glass 用於背蓋外殼與鍵盤？

That is a level of detail I just don't know, Brian. I am sorry.

Brian，這種細節層級我真的不知道。很抱歉。

Okay. And when we think about this ramp, you said obviously you have Dell. About how many other customers do you have? And is this more of a fourth quarter ramp, or it really does start in earnest in the third quarter?

好的。那當我們思考這個爬坡（ramp）時，你說很明顯你們有戴爾（Dell）。你們大概還有多少其他客戶？而這比較像是第四季的爬坡，還是其實第三季就會真正開始加速？

It starts in the third -- in the third quarter in earnest. I don't have a list of the number of customers. But we think our market share on touch on notebooks has been climbing. Initially, there was a lot of -- our competition was really subtle on, and -- for cost reasons. And we believe our market share on touch notebook wins has climbed every -- is climbing every quarter. So we are quite pleased by that. But we begin shipments in earnest this quarter. Again, as I mentioned in reply to an earlier questioner, what we are just uncertain about, is how well this -- these notebooks will do at retail. Obviously, a pretty weak PC market. But definitely in terms of the models that will be out there, we are increasing our market share.

會在第三季——在第三季真正開始加速。我手上沒有客戶數量的清單。但我們認為我們在筆電觸控方面的市占率一直在上升。一開始，競爭主要是——我們的競爭對手在成本考量下其實相當保守，且——我們相信我們在觸控筆電的得標市占率每一季都在攀升——正在每一季上升。所以我們對此相當滿意。但我們會在本季開始大量出貨。再次如我在回覆先前提問者時提到的，我們不確定的是，這——這些筆電在零售端的表現會有多好。顯然，PC 市場相當疲弱。但就將會上市的機種而言，我們正在提高市占率。

So if I have a $500 notebook, this is a $50 to $100 price for the consumer?

所以如果我有一台 500 美元的筆電，對消費者來說這是 50 到 100 美元的價格嗎？

I am sorry. I couldn't hear you.

不好意思。我聽不清楚你說什麼。

If you have a $500 notebook, this 1% to 2%, is the cost of the Gorilla Glass? $50 to $100?

如果是一台 500 美元的筆電，這個 1% 到 2% 是 Gorilla Glass 的成本嗎？50 到 100 美元？

No. 1% to 2% is like $5 to $10.

不是。1% 到 2% 大概是 5 到 10 美元。

$5 to $10. Okay. Thanks.

5 到 10 美元。好的。謝謝。

Thank you. Our next question comes from the line of Jim Suva with CitiGroup. Your line is open.

謝謝。我們下一個問題來自 CitiGroup 的 Jim Suva。請發問。

Thank you very much, and congratulations. It sounds like that you are indeed building in no return of the China subsidy into your outlook, which I think is a positive. Under the premise of, if the China subsidy were could to come back, do you have the capacity to ramp production? And if so, what is a typical lead time for you to pour the glass, get it into the channel, for then it to make it onto the shelves, or sell into the local Chinese citizen if the subsidy were to return?

非常感謝，恭喜。聽起來你們確實在展望中已經假設中國補貼不會回歸，我認為這是正面的。在這個前提下，如果中國補貼真的回來了，你們有產能可以拉升生產嗎？如果可以，你們典型的前置時間（lead time）是多久：從熔融/澆注玻璃、進入通路，到最後上架，或在補貼回歸時賣給中國當地消費者？

Well, we do have capacity and the lead time is relatively short, as we are in Asia. And it is pretty easy for us to do that. So I would say definitely, about two months or less we can have capacity there.

我們確實有產能，而且前置時間相對短，因為我們在亞洲。對我們來說要做到這點相當容易。所以我會說，確定大約兩個月或更短，我們就能把產能準備到位。

Great. Thank you very much.

很好。非常感謝。

Thank you. Our next question comes from the line of Amitabh Passi with UBS. Your line is open.

謝謝。我們下一個問題來自 UBS 的 Amitabh Passi。請發問。

Thank you. Jim, first question for you, I was wondering if you could comment on LCD demand trends in some of other geographies, particularly Europe and North America?

謝謝。Jim，第一個問題想請你評論一下其他地區的 LCD 需求趨勢，特別是歐洲與北美？

North America has been good, driven by sizes for the most part. Europe has been weak. Japan has been We think actually Japan television will probably be flat for the year, now that we have anniversaryed that. These are in terms of units. We are seeing good growth in the other Asian markets, in Latin America and the Middle East in terms of units.

北美表現不錯，主要是由尺寸帶動。歐洲偏弱。日本方面，我們認為日本電視今年可能會持平，因為我們現在已經度過了去年同期的高基期。這些是以出貨量（units）來看。以出貨量而言，我們在其他亞洲市場、拉丁美洲與中東看到不錯的成長。

I am curious relative to expectations, are these geographies generally in line, weaker or better?

我想問相對於預期，這些地區整體是符合預期、較弱，還是更好？

I would say Europe is weaker. Most of the rest are in line in terms of units. And then size is ahead of our expectations.

我會說歐洲較弱。其他大多數地區在出貨量方面符合預期。而尺寸則優於我們的預期。

Okay. And then, Jim, just based on the stock buyback that you did in the quarter, I would have expected a larger decrease in the share count. Should we expect some of that to show up in 3Q, or were there some offsets?

好的。另外，Jim，根據你們本季做的庫藏股回購，我原本預期流通股數會下降更多。我們是否應該預期其中一部分會在第三季的股數上反映出來，或是有一些抵銷因素？

Well, remember the stock buyback didn't start until later in the quarter. I mean, we didn't make the announcement until the end of at least one month had gone by.

嗯，記得庫藏股回購是到本季後段才開始的。我的意思是，我們直到至少過了一個月的月底才發布公告。

Yes. Okay. So we should expect some of that to show up in the share count in 3Q?

是。好的。所以我們應該預期第三季的流通股數會反映出一些變化？

Yes.

是的。

And then just any, any help you can give us in terms of your appetite to sustain buybacks at these levels, or how you are thinking about just capital allocation?

另外，關於你們維持目前回購水準的意願，或你們如何思考資本配置（capital allocation），你能提供任何協助性的說明嗎？

Oh, we have a $2 billion program authorized by the Board, and we expect to continue to buy back in Q3. Probably similar to slightly higher levels, maybe.

噢，我們董事會已核准一項 20 億美元的計畫，我們預期第三季會持續回購。可能會與目前相近，或略高一些的水準。

Got it. And then just one final one from me, fiber to the home. You talked about strength in North America. Just wondering where you are seeing that, is it with the Tier 1s or some of the smaller operators? Any incremental insight there would be helpful.

了解。最後一個問題，FTTH（光纖到府）。你提到北美的強勁表現。想請問你們是在哪裡看到這個需求？是 Tier 1 大型業者，還是一些較小的營運商？任何額外的洞見都會很有幫助。

That strength was mostly Canada.

那個強勁主要來自加拿大。

Got it. Okay. Thank you.

了解。好的。謝謝。

Thank you. Our next question comes from the line of Joseph Wolf with Barclays. Your line is open.

謝謝。我們下一個問題來自 Barclays 的 Joseph Wolf。請發問。

Thanks. I was just -- I wanted to come back to the inventory and the work you have done on the global side, and the differences between China, and I guess the rest of the world? And where you are in terms of reading that, and how we can think about that going forward in terms of maybe even not talking about price declines moderating, but prices starting to stabilize and maybe improve?

謝謝。我只是——我想回到庫存以及你們在全球面向所做的工作，還有中國與我想其他地區之間的差異？以及你們目前對此的判讀進度如何，還有我們未來該如何思考：也許不只是談價格跌幅趨緩，而是價格開始穩定、甚至改善的可能性？

I am not sure I follow your question. Are you asking about inventory in the supply chain regionally?

我不太確定我理解你的問題。你是在問供應鏈在各地區的庫存狀況嗎？

Regionally, and how that fits into, I guess you talked about a very strong demand into China, and Korea being kind of consistent. So if there is a global element to that inventory, and whether that will impact any pricing in 2014?

是地區性的，以及這如何與——我想你提到中國需求非常強勁、韓國則相對一致。所以如果庫存有全球性的因素，是否會影響 2014 年的任何定價？

As of right now, I don't have a reason to believe that we won't stay on this moderate price declines that we have experienced for these quarters. There is nothing that we are seeing right now. In terms of the level of inventory, I don't have a lot of details, as I mentioned in response to an earlier question, about where the inventory is. I did mention, that in China that (inaudible) seems to be an excess of the small-sized televisions, 32s. But beyond that, I don't have a lot of detail. I think that the worry that you are probably touching on is, if there is a sudden inventory correction, that that could impact on pricing. But right now, we are not feeling that. In fact, our order rate in July, and our order rate for August is remaining quite strong.

就目前而言，我沒有理由相信我們不會維持過去幾季所經歷的這種溫和價格下滑。我們現在沒有看到任何跡象。就庫存水位而言，如我在回覆先前問題時提到的，我沒有太多細節能說明庫存在哪裡。我確實提到，在中國（聽不清楚）似乎有小尺寸電視（32 吋）的庫存過剩。但除此之外，我沒有太多細節。我想你可能在觸及的擔憂是：如果出現突然的庫存修正，可能會影響定價。但目前我們沒有這種感受。事實上，我們 7 月的接單率，以及 8 月的接單率仍然相當強勁。

Okay. Great. Thank you.

好的。很好。謝謝。

Thank you. Our next question comes from the line of Simona Jankowski with Goldman Sachs. Your line is open.

謝謝。下一個問題來自高盛（Goldman Sachs）的 Simona Jankowski。請開麥。

Hi. Thanks very much. I just had a question on Display, and then a couple follow-ups on Gorilla. As far as on Display, you ended Q1 with what you considered were tight internal inventories, and were air-shipping some product. Is that still going on, or do you feel like you have caught up now, in terms of your own inventories and production? And also, did you convert any additional tanks to Gorilla in the second-quarter, or are you putting that on hold for now giving the situation in Gorilla you talked about?

嗨。非常感謝。我先問一個關於 Display 的問題，然後再追問幾個關於 Gorilla 的問題。就 Display 而言，你們在第一季結束時提到內部庫存偏緊，並且有用空運出貨一些產品。現在還有在進行嗎？或者就你們自身庫存與生產而言，你們覺得現在已經追上了？另外，你們在第二季是否又把任何額外的熔窯（tanks）轉為生產 Gorilla？還是考量到你們提到的 Gorilla 情況，暫時先按兵不動？

So we are not converting more tanks to Gorilla right now, as the supply chain works off some of the inventory. In terms of our own inventories, we actually remain tight. We did airship in Q2. We hope to not ship any -- airship in Q3. But we are still tight. We wouldn't mind having more Display inventory. Corporately, on inventories, we have built inventory. The build is largest in Telecom, where we built over $100 million inventory, and we have built some Gorilla inventory.

所以我們目前不會再把更多熔窯轉去生產 Gorilla，因為供應鏈正在消化一部分庫存。就我們自己的庫存而言，其實仍然偏緊。我們在第二季確實有用空運出貨。我們希望第三季不要再有任何——空運出貨。但我們仍然偏緊。我們不介意有更多 Display 的庫存。以公司整體來看，在庫存方面我們已經建立了庫存。增幅最大的是 Telecom，我們建立了超過 1 億美元的庫存，另外也建立了一些 Gorilla 的庫存。

Okay. And then on Gorilla, where you talked about the perceived softness there in the guidance. You commented on thin glass. Is that impacting the revenue growth levels in Gorilla? In particular, if that is causing you to get a lower ASP per square area? And then also, I wanted to get an update on your expectation for 3-D glass, if that is something that is going to ship this year, and is going to be a meaningful contributor? And then lastly, it seems that Asahi's Dragon Trail is gaining some traction in the market, and is starting to get used as a second source. Is that impacting your Gorilla expectations?

好的。接著談 Gorilla，你們在指引中提到那邊看起來有些疲軟。你提到了薄玻璃。這是否正在影響 Gorilla 的營收成長水準？特別是，是否會導致你們每單位面積的 ASP（平均售價）較低？另外，我也想更新一下你們對 3-D 玻璃的預期：今年是否會出貨，並且會是有意義的貢獻者嗎？最後，看起來旭硝子（Asahi）的 Dragon Trail 在市場上開始獲得一些動能，並開始被用作第二來源。這是否會影響你們對 Gorilla 的預期？

I don't think Dragon Trail is really impacting our expectations. Clearly, we don't have quite as strong a share as what we had originally, but it is still extraordinarily high. I don't have an update on 3-D. So I am sorry. I just, I am not current on whether we are going to ship anything this year or not. I know the program is continuing to move ahead.

我不認為 Dragon Trail 真的會影響我們的預期。很明顯，我們的市占率沒有一開始那麼強，但仍然是非常非常高。我沒有 3-D 的最新進度。所以很抱歉。我只是——我目前不清楚我們今年是否會有任何出貨。我知道這個專案仍在持續推進。

And on the thin glass in Gorilla?

那 Gorilla 的薄玻璃呢？

Thin glass in Gorilla, there is really -- I mean, it is just a -- it is primarily an impact on our cost.

Gorilla 的薄玻璃，這其實——我的意思是，它主要是對我們成本的影響。

Okay. So it doesn't change the ASP per square area?

好的。所以它不會改變每單位面積的 ASP？

I mean, just, it is primary impact is on our cost.

我的意思是，它主要的影響是在我們的成本上。

Okay. Thanks very much.

好的。非常感謝。

Thank you. Our next question comes from the line of Ehud Gelblum with Morgan Stanley. Your line is open.

謝謝。下一個問題來自摩根士丹利（Morgan Stanley）的 Ehud Gelblum。請開麥。

Hi, Jim. How are you? A couple questions, across a couple different segments. Quickly start on Telecom. You mentioned a, an affiliate that you brought in house. Can you just give a sense, a sense to what it was, how large it was, and how much that impacted numbers? And then you also mentioned in Telecom, that there were delays in China in some large fiber deals. Do you have any color on what caused those delays? Was it the change in management that happened in a couple Chinese carriers, and how far out those got pushed? And then I have some questions on LCD and Gorilla.

嗨，Jim。你好嗎？我有幾個問題，涵蓋幾個不同的部門。先快速從 Telecom 開始。你提到把一家關係企業納入公司內部。你能否大概說明那是什麼、規模多大，以及對數字造成了多大影響？另外你也提到 Telecom 在中國有一些大型光纖交易延遲。你能否提供一些背景，造成延遲的原因是什麼？是否與幾家中國電信業者發生的管理層變動有關？以及延後到多遠？然後我還有一些關於 LCD 和 Gorilla 的問題。

So the, a small company was a previous joint venture that our Corning cable systems unit had. Its impact was about $5 million in Q2, and I think it will be almost $10 million in Q3 in terms of consolidated sales. It is really relatively tiny. The Telecom tenders were from -- that we were expecting tenders to happen earlier. I can't tell you why they don't. And you probably heard me say in the past, that we believe all of the Telecom business in China is ultimately controlled by government policy. So whether it was the management changes or not, I can't know for sure. But definitely tenders that we expected earlier have not happened yet. They are -- there is a tendering process right now. What we just don't know is when it will be complete, and how much the volume will be. But definitely against our original expectations for China, this has been a slowdown.

所以，那是一家小公司，是我們 Corning 光纜系統事業單位先前的一個合資企業。它在第二季的影響大約是 500 萬美元，我想第三季在合併銷售額方面會接近 1,000 萬美元。其實相對非常小。Telecom 的標案是——我們原本預期標案會更早發生。我無法告訴你為什麼沒有。而且你可能也聽我過去說過，我們相信中國所有的 Telecom 業務最終都受政府政策所控制。所以是否因為管理層變動，我也無法確定。但可以確定的是，我們原本預期更早出現的標案，至今仍未發生。目前正處於招標流程中。我們只是不知道何時會完成，以及量會有多少。但相較於我們對中國的原始預期，這確實是一個放緩。

Okay. That's helpful. On LCD, obviously, screen sizes have been growing for the last, I would say, almost 18 months or so. To what extent do you think the significant fall-offs in glass pricing that we have seen over the last 18 to 24 months, how much do you think that has contributed to the -- people just buying larger TVs because the price points have come down, primarily because glass pricing has come down. And so now that we are -- that we are now in 2013, in an era of moderate price declines, as we get into 2014 and beyond do you think that maybe we will see an end to the larger screen sizes? You see what I am saying, that maybe the larger screen sizes are linked to the lower prices. When you stop having lower prices, you stop having larger screen prices a little later too?

好的。這很有幫助。關於 LCD，很明顯螢幕尺寸在過去——我想大約近 18 個月左右——一直在變大。在多大程度上，你認為我們在過去 18 到 24 個月看到的玻璃價格大幅下滑，對此有多少貢獻——也就是人們因為價格帶下來而去買更大的電視，而這主要是因為玻璃價格下來。所以現在我們——我們已經在 2013 年，處於價格溫和下滑的時代；當我們進入 2014 年及之後，你是否認為可能會看到大尺寸趨勢結束？你明白我的意思嗎，也就是大尺寸可能與較低價格連動。當你不再有更低的價格時，稍後也會停止出現更大的螢幕尺寸？

Yes. So I don't think the glass price declines have been the primary reason why pricing at retail have gone down. Obviously, it has contributed. And for panel makers, also the fact that the yen has helped them on their profitability has gone up. I just think that the price points and quality of televisions are so incredible, that it is hard to imagine people buying a small television now. And now, I spent -- I got up in this early this morning, and read a whole bunch of retail television ads for the past months. And I am just stunned by -- remained stunned by how low the price points are. So I am not expecting price points to go back up on large televisions next year. And I think, we will begin to see sometime next year, 2K/4K showing up. Obviously, that will be more expensive initially. But I don't think there is any going back on this size phenomenon.

是的。所以我不認為玻璃價格下滑是零售端價格下降的主要原因。很明顯它有貢獻。而且對面板廠來說，日圓走勢也幫助了他們，讓獲利能力提升。我只是覺得電視的價格帶與品質都好到不可思議，很難想像現在人們還會買小尺寸電視。而且我——我今天一大早起來，讀了過去幾個月一大堆零售電視廣告。我仍然對——價格帶之低感到震驚。所以我不預期明年大尺寸電視的價格帶會回升。而且我認為我們會在明年某個時候開始看到 2K/4K 出現。很明顯，一開始會更貴。但我不認為這種尺寸現象會有任何回頭路。

Okay. So I don't think prices will go up. I was just wondering what you thought about the glass prices going down, impacting the total price at retail. On the Gorilla side, you mentioned Dell. So are we to assume that they are the -- you said there were other OEMs coming out as well. But are we -- assume that Dell is the only one that really will be using Gorilla in any type of volume in 2013, and the rest of them are out in 2014? And then you had a previous comment, I think in the last conference call or previously before that, that you expected I believe 10% of notebooks and laptops to be either touch or have cover glass. I was wondering, what your current expectations are? Is it still in line with the 10%? And is that in line with the guidance now for Gorilla and Specialty Materials?

好的。所以我不認為價格會上漲。我只是想了解你對玻璃價格下跌、進而影響零售端總價的看法。在 Gorilla 這邊，你提到了戴爾（Dell）。所以我們是否可以假設他們是——你說也會有其他 OEM 推出。但我們是否——假設戴爾是 2013 年唯一會以任何規模使用 Gorilla 的廠商，而其他廠商要到 2014 年才會推出？另外你之前有個評論，我想是在上次電話會議或更早之前，你預期我記得是 10% 的筆記型電腦與筆電會是觸控或配有蓋板玻璃。我想請問你目前的預期是什麼？是否仍與 10% 一致？而這是否也與目前對 Gorilla 與 Specialty Materials 的指引一致？

Well, the guidance for the year was around 10%. It will be higher at the -- in the fourth quarter. I won't comment on customers. Dell is the one that announced with us yesterday. But we expect to be on a number of notebook manufacturers.

嗯，全年指引大約是 10%。在——第四季會更高。我不評論客戶。戴爾是昨天與我們一起宣布的那一家。但我們預期會在多家筆電製造商上採用。

In 2013?

在 2013 年？

Yes.

是。

Okay. That's helpful. I appreciate it. Thanks.

好的。這很有幫助。感謝你。謝謝。

Operator, we have time for one more question.

接線員，我們還有時間再問一個問題。

And that will be from the line of Jagadish Iyer from Piper Jaffray. Your line is open.

接下來是 Piper Jaffray 的 Jagadish Iyer 來電。您的線路已開通。

Yes, thanks for taking my question. Two questions, Jim. I just wanted to understand on, when you said you don't have any updates on the automotive segment. I just wanted to find out what is the gating item there, in terms of the adoption of these specialty glasses for these sunroof applications? And then I have a follow-up, please.

是的，謝謝讓我提問。Jim 兩個問題。我想先了解一下，當你說你在汽車領域沒有任何更新時。我想知道在這方面的關鍵卡點是什麼，就這些特殊玻璃在天窗應用上的採用而言？然後我還有一個追問，謝謝。

Well, it is always hard to get your first customer. We had hopes that we would get on a certain model. That has not turned out right now. But we are still trying very hard. But this is a fairly revolutionary new product for the auto industry, and it is always hard to win your first one. So beyond that, I can't say. I mean, we haven't stopped trying.

嗯，拿下第一個客戶總是很難。我們原本希望能導入某一款車型。目前看起來並沒有如願。但我們仍在非常努力推進。不過這對汽車產業而言是一個相當革命性的新產品，而贏得第一個案子總是很難。所以除此之外，我也無法多說。我的意思是，我們並沒有停止努力。

So do you have any timeline when we could potentially hear? Is it probably later this year or maybe next year?

那你們有沒有任何時間表，讓我們知道可能何時會聽到消息？可能是今年稍晚，或是明年？

I don't have a new timeline. I actually thought I would be already announcing. So I am -- we are a little disappointed by that.

我沒有新的時間表。其實我原本以為我現在就已經會在宣布了。所以我——我們對此有點失望。

Okay. Just quickly on when can we have some -- when do you think you will have some meaningful uptick of the Willow Glass, you are actively engaged with customers. When do you think we can have -- expect to hear more on the traction on Willow Glass?

好的。再快速問一下，Willow Glass 何時會有一些——你們正積極與客戶接洽。你認為我們何時能看到——或預期聽到 Willow Glass 的進展更有實質的上升？

For which product?

你指的是哪一個產品？

The Willow glass.

Willow glass。

Oh, Willow. Sorry, I misunderstood you. I think we will talk more about Willow in the October conference call.

喔，Willow。抱歉，我誤會你的意思了。我想我們會在 10 月的電話會議上多談一些 Willow。

Thank you.

謝謝。

Okay. So we will wrap up here. I just have a couple of Investor Relations comments. First, in case you missed our announcement, in June we did officially appoint Ann Nicholson Division VP, and she will be leading our Investor Relations function. We are delighted to recognize Ann's performance with this promotion. Our second announcement is, we will be speaking at the Citi Technology Conference on September 4 in New York City.

好的。那我們就到這裡結束。我這邊有幾點投資人關係的說明。首先，如果你錯過了我們的公告，我們在 6 月正式任命 Ann Nicholson 為事業部副總裁（Division VP），她將領導我們的投資人關係職能。我們很高興以這次升遷來肯定 Ann 的表現。第二項公告是，我們將於 9 月 4 日在紐約市的 Citi 科技大會上發表演說。

I would like to summarize a few highlights of the call. First, we have made great progress on our plan to stabilize Display, and then return to positive momentum in the segment. Second, we are executing on our goal to grow earnings in our other businesses. In addition to volume growth, strong operational execution and cost reduction efforts have been a significant driver of profitability improvements. We grew our core earnings per share year-over-year by double-digits, the last three-quarters. We think this is strong evidence we are marching up. Fourth, Dow Corning silicones are not improving year-over-year, and that is a big disappointment to us. Finally, as we look forward to Q3, we are confident we will have our fourth conservative quarter of year-over-year core earnings growth, despite the weak Dow Corning outlook. It will be driven by moderate glass declines in LCD, and growth in Telecom, Life Sciences, and Environmental. Ann?

我想總結本次電話會議的幾個重點。第一，我們在穩定顯示器（Display）業務、並讓該部門重回正向動能的計畫上已取得很大進展。第二，我們正在執行在其他業務中提升獲利的目標。除了出貨量成長之外，強勁的營運執行與成本降低的努力，一直是推動獲利改善的重要因素。過去三個季度，我們的核心每股盈餘（EPS）年增率皆達到雙位數成長。我們認為這是我們持續向上攀升的有力證據。第四，道康寧（Dow Corning）矽利康業務的年對年表現並未改善，這讓我們非常失望。最後，展望第三季，即使道康寧的前景疲弱，我們仍有信心將迎來今年第四個保守的核心獲利年對年成長季度。這將由 LCD 玻璃的溫和下滑，以及電信、生命科學與環境業務的成長所帶動。Ann？

Thank you, Jim, and thank you all for joining us today. A play back of the call is available beginning at 10.30 AM Eastern Time today, and will run until 5.00 PM Eastern Time on Tuesday, August 13. To listen, dial 800-475-6701. The access code is 297023. The audiocast, of course, is available on our website during that time. Operator, 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日美東時間上午 10:30 開始提供，並持續至 8 月 13 日（週二）美東時間下午 5:00。收聽請撥 800-475-6701。存取碼為 297023。當然，在此期間也可於我們網站收聽網路音訊直播回放。接線員，本次會議到此結束。請斷開所有線路。

Thank you. And ladies and gentlemen, that does conclude your conference call for today. You may now disconnect.

謝謝。各位女士、先生，今天的電話會議到此結束。您現在可以掛線。