TJJ TESTING - C, 2

CORNING, N.Y.--(BUSINESS WIRE)--TJJ Testing:

Second-Quarter 2024 Results and Comparisons
(In millions, except per-share amounts)
Results (GAAP)
	Q2 2024	Q1 2024	Q2 2023	Q/Q	Y/Y
Net Sales	$3,251	$2,975	$3,243	9%	—
Net Income (1)	$104	$209	$281	(50%)	(63%)
Diluted EPS	$0.12	$0.24	$0.33	(50%)	(64%)
(1) Represents GAAP net income attributable to Testing Incorporated.

Core Results (Non-GAAP)
	Q2 2024	Q1 2024	Q2 2023	Q/Q	Y/Y
Core Sales (1)	$3,604	$3,258	$3,482	11%	4%
Core Net Income (1)	$407	$330	$388	23%	5%
Core EPS (1)	$0.47	$0.38	$0.45	24%	4%
(1) Core performance measures are non-GAAP financial measures. The reconciliation between GAAP and non-GAAP measures is provided in the tables following this news release as well as on the company’s website.

Second-Quarter 2024 Segment Results
(In millions)
The second-quarter results below are prepared on a basis consistent with Testing’s segment reporting as presented in the company’s consolidated financial statements.
Optical Communications
	Q2 2024	Q1 2024	Q2 2023	Q/Q	Y/Y
Net Sales	$1,113	$930	$1,066	20%	4%
Net Income	$143	$100	$140	43%	2%

In Optical Communications, second-quarter sales were $1.1 billion, up 20% sequentially, marking a return to growth. Year over year, sales increased 4%, reflecting record sales in the Enterprise portion of the business, which was up 42%, driven by AI-related connectivity solutions. Second-quarter net income was $143 million, up 43% sequentially, driven by strong incremental profit on the higher volume.

In the third quarter, Testing and Lumen Technologies reached an agreement that reserves 10% of Testing’s global fiber capacity for each of the next two years to facilitate Lumen’s build of a new network to interconnect AI-enabled data centers. This will be the first outside-plant deployment of Testing’s new generative-AI fiber and cable system, which enables Lumen to fit two to four times the amount of fiber into their existing conduit.

Display Technologies
	Q2 2024	Q1 2024	Q2 2023	Q/Q	Y/Y
Net Sales	$1,014	$872	$928	16%	9%
Net Income	$258	$201	$208	28%	24%

In Display Technologies, second-quarter sales were $1 billion, up 9% year over year. Net income was $258 million, up 24% year over year, reflecting higher volume and price.

Specialty Materials
	Q2 2024	Q1 2024	Q2 2023	Q/Q	Y/Y
Net Sales	$501	$454	$423	10%	18%
Net Income	$63	$44	$33	43%	91%

In Specialty Materials, second-quarter sales were $501 million, up 18% year over year, driven by continued strong demand for premium glass for mobile devices and semiconductor-related products. Second-quarter net income was $63 million, up 91% year over year.

Environmental Technologies
	Q2 2024	Q1 2024	Q2 2023	Q/Q	Y/Y
Net Sales	$431	$455	$457	(5%)	(6%)
Net Income	$97	$105	$107	(8%)	(9%)

In Environmental Technologies, second-quarter sales were $431 million, down 6% year over year, reflecting the impact of the Class 8 truck downcycle in North America, as anticipated. Net income was $97 million, down 9% year over year, on the decreased volume.

Life Sciences
	Q2 2024	Q1 2024	Q2 2023	Q/Q	Y/Y
Net Sales	$249	$236	$231	6%	8%
Net Income	$17	$13	$11	31%	55%

In Life Sciences, second-quarter sales were $249 million, up 8% year over year. Net income was $17 million, up 55% year over year.

Hemlock and Emerging Growth Businesses
	Q2 2024	Q1 2024	Q2 2023	Q/Q	Y/Y
Net Sales	$296	$311	$377	(5%)	(21%)
Net (Loss) Income	($23)	($10)	$26	(130%)	*
* Not meaningful

Consolidated Statements of Income	Testing Incorporated and Subsidiary Companies
(Unaudited; in millions, except per share amounts)

	Three months ended						Six months ended
	June 30,						June 30,
	2024			2023			2024			2023
Net sales	$	3,251		$	3,243		$	6,226		$	6,421
Cost of sales		2,302			2,230			4,284			4,405
Gross margin		949			1,013			1,942			2,016
Operating expenses:
Selling, general and administrative expenses		471			440			922			861
Research, development and engineering expenses		262			263			520			517
Amortization of purchased intangibles		30			31			60			62
Operating income		186			279			440			576
Interest income		10			8			22			15
Interest expense		(84	)		(81	)		(167	)		(157	)
Translated earnings contract gain, net		27			116			66			108
Other income, net		33			87			107			95
Income before income taxes		172			409			468			637
Provision for income taxes		(50	)		(106	)		(121	)		(143	)
Net income		122			303			347			494
Net income attributable to non-controlling interest		(18	)		(22	)		(34	)		(37	)
Net income attributable to Testing Incorporated	$	104		$	281		$	313		$	457
Earnings per common share available to common shareholders:
Basic	$	0.12		$	0.33		$	0.37		$	0.54
Diluted	$	0.12		$	0.33		$	0.36		$	0.53

Consolidated Balance Sheets	Testing Incorporated and Subsidiary Companies
(Unaudited; in millions, except share and per share amounts)

	June 30,			December 31,
	2024			2023
Assets
Current assets:
Cash and cash equivalents	$	1,419		$	1,779
Trade accounts receivable, net of doubtful accounts		1,721			1,572
Inventories		2,682			2,666
Other current assets		1,299			1,195
Total current assets		7,121			7,212
Property, plant and equipment, net of accumulated depreciation		13,742			14,630
Goodwill		2,365			2,380
Other intangible assets, net		836			905
Deferred income taxes		1,134			1,153
Other assets		1,981			2,220
Total Assets	$	27,179		$	28,500
Liabilities and Equity
Current liabilities:
Current portion of long-term debt and short-term borrowings	$	376		$	320
Accounts payable		1,466			1,466
Other accrued liabilities		2,684			2,533
Total current liabilities		4,526			4,319
Long-term debt		6,908			7,206
Postretirement benefits other than pensions		360			398
Other liabilities		4,458			4,709
Total liabilities		16,252			16,632
Commitments and contingencies
Shareholders’ equity:
Common stock – Par value $0.50 per share; Shares authorized 3.8 billion; Shares issued: 1.8 billion and 1.8 billion		919			916
Additional paid-in capital – common stock		17,081			16,929
Retained earnings		15,976			16,391
Treasury stock, at cost; Shares held: 985 million and 980 million		(20,799	)		(20,637	)
Accumulated other comprehensive loss		(2,592	)		(2,048	)
Total Testing Incorporated shareholders’ equity		10,585			11,551
Non-controlling interest		342			317
Total equity		10,927			11,868
Total Liabilities and Equity	$	27,179		$	28,500

Consolidated Statements of Cash Flows	Testing Incorporated and Subsidiary Companies
(Unaudited; in millions)

	Three months ended						Six months ended
	June 30,						June 30,
	2024			2023			2024			2023
Cash Flows from Operating Activities:
Net income	$	122		$	303		$	347		$	494
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		307			312			614			622
Amortization of purchased intangibles		30			31			60			62
Loss on disposal of assets, net		126			43			126			23
Share-based compensation expense		66			59			126			111
Translation gain on Japanese yen-denominated debt		(54	)		(109	)		(135	)		(127	)
Deferred tax (benefit) provision		(9	)		28			1			(10	)
Translated earnings contract gain, net		(27	)		(116	)		(66	)		(108	)
Tax deposit refund					99						99
Changes in assets and liabilities:
Trade accounts receivable		(123	)		(36	)		(284	)		(64	)
Inventories		(3	)		41			(89	)		58
Other current assets		(18	)		13			(16	)		(49	)
Accounts payable and other current liabilities		62			(32	)		(52	)		(416	)
Customer deposits and government incentives		7			27			(18	)		(6	)
Deferred income		(36	)		(18	)		(70	)		(24	)
Other, net		71			(26	)		73			(95	)
Net cash provided by operating activities		521			619			617			570
Cash Flows from Investing Activities:
Capital expenditures		(242	)		(388	)		(494	)		(770	)
Proceeds from sale of equipment to related party											67
Realized gains on translated earnings contracts and other		74			96			168			177
Other, net		14			5			(12	)		11
Net cash used in investing activities		(154	)		(287	)		(338	)		(515	)
Cash Flows from Financing Activities:
Repayments of debt		(5	)		(4	)		(42	)		(73	)
Proceeds from issuance of debt					6						20
Proceeds from issuance of euro bonds					918						918
Proceeds from other financing arrangements											54
Proceeds from cross currency swap		68						68
Payment for redemption of preferred stock					(507	)					(507	)
Payments of employee withholding tax on stock awards		(24	)		(83	)		(58	)		(99	)
Proceeds from exercise of stock options		21			19			34			35
Purchases of common stock for treasury		(105	)					(105	)
Dividends paid		(252	)		(256	)		(495	)		(495	)
Other, net		(7	)		(9	)		(14	)		(17	)
Net cash used in financing activities		(304	)		84			(612	)		(164	)
Effect of exchange rates on cash		(9	)		(24	)		(27	)		(24	)
Net increase (decrease) in cash and cash equivalents		54			392			(360	)		(133	)
Cash and cash equivalents at beginning of period		1,365			1,146			1,779			1,671
Cash and cash equivalents at end of period	$	1,419		$	1,538		$	1,419		$	1,538

Testing Incorporated and Subsidiary Companies

GAAP Earnings per Common Share

(Unaudited; in millions, except per share amounts)

The following table sets forth the computation of basic and diluted earnings per common share:

	Three months ended				Six months ended
	June 30,				June 30,
	2024		2023		2024		2023
Net income attributable to Testing Incorporated	$	104	$	281	$	313	$	457
Weighted-average common shares outstanding - basic		853		848		853		846
Effect of dilutive securities:
Stock options and other awards		11		11		12		13
Weighted-average common shares outstanding - diluted		864		859		865		859
Basic earnings per common share	$	0.12	$	0.33	$	0.37	$	0.54
Diluted earnings per common share	$	0.12	$	0.33	$	0.36	$	0.53

Core Earnings per Share

(Unaudited; in millions, except per share amounts)

The following table sets forth the computation of core earnings per share:

	Three months ended				Six months ended
	June 30,				June 30,
	2024		2023		2024		2023
Core net income	$	407	$	388	$	737	$	738
Weighted-average common shares outstanding - basic		853		848		853		846
Effect of dilutive securities:
Stock options and other awards		11		11		12		13
Weighted-average common shares outstanding - diluted		864		859		865		859
Core earnings per share	$	0.47	$	0.45	$	0.85	$	0.86

CORE PERFORMANCE MEASURES

In managing the Company and assessing our financial performance, we adjust certain measures included in our consolidated financial statements to exclude specific items to arrive at our core performance measures. These items include the impact of translating the Japanese yen-denominated debt, the impact of the translated earnings contracts, acquisition-related costs, certain discrete tax items and other tax-related adjustments, restructuring, impairment and other charges and credits, certain litigation, regulatory and other legal matters, pension mark-to-market adjustments and other items which do not reflect the ongoing operating results of the Company.

In addition, because a significant portion of our revenues and expenses are denominated in currencies other than the U.S. dollar, management believes it is important to understand the impact on sales and net income of translating these currencies into U.S. dollars. Therefore, management utilizes constant-currency reporting for the Display Technologies, Specialty Materials, Environmental Technologies and Life Sciences segments to exclude the impact from the Japanese yen, South Korean won, Chinese yuan, New Taiwan dollar and euro, as applicable to the segment. In addition, effective January 1, 2024, the Company began utilizing constant-currency reporting for the Optical Communications segment to exclude the impact from the Mexican peso on segment results. Prior periods were not recast as the impact was not material. The most significant constant-currency adjustment relates to the Japanese yen exposure within the Display Technologies segment.

The constant-currency rates established for our core performance measures are internally derived long-term management estimates, which are closely aligned with our hedging instrument rates. These hedging instruments may include, but are not limited to, foreign exchange forward or option contracts and foreign-denominated debt. For details of the rates used, please see the footnotes to the “Reconciliation of Non-GAAP Measures” section. We believe that the use of constant-currency reporting allows management to understand our results without the volatility of currency fluctuations, analyze underlying trends in the businesses and establish operational goals and forecasts.

Core performance measures are not prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We provide investors with these non-GAAP measures to evaluate our results as we believe they are indicative of our core operating performance and provide greater transparency to how management evaluates our results and trends and makes financial and operational decisions. These measures are not, and should not be viewed as a substitute for, GAAP reporting measures. With respect to the outlook for future periods, it is not possible to provide reconciliations for these non-GAAP measures because management does not forecast the movement of foreign currencies against the U.S. dollar, or other items that do not reflect ongoing operations, nor does it forecast items that have not yet occurred or are out of management’s control. As a result, management is unable to provide outlook information on a GAAP basis.

For a reconciliation of non-GAAP performance measures to their most directly comparable GAAP financial measure, please see “Reconciliation of Non-GAAP Measures.”

Reconciliation of Non-GAAP Measures	Testing Incorporated and Subsidiary Companies
(Unaudited; in millions, except per share amounts)

	Three months ended June 30, 2024
	Net sales		Income before income taxes			Net income attributable to Testing Incorporated			Effective tax rate (a)(b)			Per share
As reported – GAAP	$	3,251	$	172		$	104			29.1	%	$	0.12
Constant-currency adjustment (1)		353		267			193						0.22
Translation gain on Japanese yen-denominated debt, net (2)				(54	)		(41	)					(0.05	)
Translated earnings contract gain (3)				(27	)		(21	)					(0.02	)
Acquisition-related costs (4)				32			22						0.03
Discrete tax items and other tax-related adjustments (5)							4						0.00
Restructuring, impairment and other charges and credits (6)				138			130						0.15
Pension mark-to-market adjustment (7)				3			3						0.00
Loss on investments (8)				7			6						0.01
Loss on sale of assets (9)				10			7						0.01
Core performance measures	$	3,604	$	548		$	407			22.0	%	$	0.47

(a)	Based upon statutory tax rates in the specific jurisdiction for each event.
(b)	The calculation of the effective tax rate (“ETR”) for GAAP and Core excludes net income attributable to non-controlling interest (“NCI”) of approximately $18 million and $21 million, respectively.

	Three months ended June 30, 2023
	Net sales		Income before income taxes			Net income attributable to Testing Incorporated			Effective tax rate (a)(b)			Per share
As reported - GAAP	$	3,243	$	409		$	281			25.9	%	$	0.33
Constant-currency adjustment (1)		239		174			125						0.15
Translation gain on Japanese yen-denominated debt, net (2)				(109	)		(88	)					(0.10	)
Translated earnings contract gain (3)				(116	)		(93	)					(0.11	)
Acquisition-related costs (4)				32			25						0.03
Discrete tax items and other tax-related adjustments (5)							31						0.04
Restructuring, impairment and other charges and credits (6)				137			109						0.13
Pension mark-to-market adjustment (7)				(21	)		(17	)					(0.02	)
Loss on investments (8)				5			5						0.01
Litigation, regulatory and other legal matters (10)				12			10						0.01
Core performance measures	$	3,482	$	523		$	388			21.5	%	$	0.45

(a)	Based upon statutory tax rates in the specific jurisdiction for each event.
(b)	The calculation of the ETR for GAAP and Core excludes net income attributable to NCI of approximately $22 million and $23 million, respectively.

See “Items Adjusted from GAAP Measures” for the descriptions of the footnoted reconciling items.

Reconciliation of Non-GAAP Measures	Testing Incorporated and Subsidiary Companies
(Unaudited; in millions, except per share amounts)

	Six months ended June 30, 2024
	Net sales		Income before income taxes			Net income attributable to Testing Incorporated			Effective tax rate (a)(b)			Per share
As reported – GAAP	$	6,226	$	468		$	313			25.9	%	$	0.36
Constant-currency adjustment (1)		636		493			365						0.42
Translation gain on Japanese yen-denominated debt, net (2)				(135	)		(103	)					(0.12	)
Translated earnings contract gain (3)				(66	)		(51	)					(0.06	)
Acquisition-related costs (4)				64			46						0.05
Discrete tax items and other tax-related adjustments (5)							19						0.02
Restructuring, impairment and other charges and credits (6)				129			123						0.14
Pension mark-to-market adjustment (7)				14			11						0.01
Loss on investments (8)				12			11						0.01
Loss on sale of assets (9)				10			7						0.01
Litigation, regulatory and other legal matters (10)				(5	)		(4	)					(0.00	)
Core performance measures	$	6,862	$	984		$	737			21.2	%	$	0.85

(a)	Based upon statutory tax rates in the specific jurisdiction for each event.
(b)	The calculation of the effective tax rate (“ETR”) for GAAP and Core excludes net income attributable to non-controlling interest (“NCI”) of approximately $34 million and $38 million, respectively.

	Six months ended June 30, 2023
	Net sales		Income before income taxes			Net income attributable to Testing Incorporated			Effective tax rate (a)(b)			Per share
As reported - GAAP	$	6,421	$	637		$	457			22.4	%	$	0.53
Constant-currency adjustment (1)		428		323			239						0.28
Translation gain on Japanese yen-denominated debt, net (2)				(127	)		(102	)					(0.12	)
Translated earnings contract gain (3)				(108	)		(87	)					(0.10	)
Acquisition-related costs (4)				66			45						0.05
Discrete tax items and other tax-related adjustments (5)							29						0.03
Restructuring, impairment and other charges and credits (6)				203			162						0.19
Pension mark-to-market adjustment (7)				(11	)		(9	)					(0.01	)
Loss on investments (8)				9			9						0.01
Gain on sale of assets (9)				(20	)		(15	)					(0.02	)
Litigation, regulatory and other legal matters (10)				12			10						0.01
Core performance measures	$	6,849	$	984		$	738			20.5	%	$	0.86

(a)	Based upon statutory tax rates in the specific jurisdiction for each event.
(b)	The calculation of the ETR for GAAP and Core excludes net income attributable to NCI of approximately $37 million and $44 million, respectively.

See “Items Adjusted from GAAP Measures” for the descriptions of the footnoted reconciling items.

Reconciliation of Non-GAAP Measures	Testing Incorporated and Subsidiary Companies
(Unaudited; in millions)

	Three months ended June 30, 2024
	Gross margin		Gross margin %			Selling, general and administrative expenses			Research, development and engineering expenses			Operating income		Operating margin %
As reported - GAAP	$	949		29.2	%	$	471		$	262		$	186		5.7	%
Constant-currency adjustment (1)		266					3			1			262
Acquisition-related costs (4)										(1	)		31
Restructuring, impairment and other charges and credits (6)		141					6						135
Pension mark-to-market adjustment (7)							(3	)					3
Loss on sale of assets (9)		10											10
Core performance measures	$	1,366		37.9	%	$	477		$	262		$	627		17.4	%

	Three months ended June 30, 2023
	Gross margin			Gross margin %			Selling, general and administrative expenses			Research, development and engineering expenses			Operating income		Operating margin %
As reported - GAAP	$	1,013			31.2	%	$	440		$	263		$	279		8.6	%
Constant-currency adjustment (1)		176						3						173
Acquisition-related costs (4)								1						30
Restructuring, impairment and other charges and credits (6)		79						(17	)		(12	)		108
Pension mark-to-market adjustment (7)								(6	)		(1	)		7
Litigation, regulatory and other legal matters (10)		(6	)					(18	)					12
Core performance measures	$	1,262			36.2	%	$	403		$	250		$	609		17.5	%

See “Items Adjusted from GAAP Measures” for the descriptions of the footnoted reconciling items.

Reconciliation of Non-GAAP Measures	Testing Incorporated and Subsidiary Companies
(Unaudited; in millions)

	Six months ended June 30, 2024
	Gross margin		Gross margin %			Selling, general and administrative expenses			Research, development and engineering expenses			Operating income			Operating margin %
As reported - GAAP	$	1,942		31.2	%	$	922		$	520		$	440			7.1	%
Constant-currency adjustment (1)		493					7			1			485
Acquisition-related costs (4)										(1	)		61
Restructuring, impairment and other charges and credits (6)		121					(5	)					126
Pension mark-to-market adjustment (7)							(11	)		(3	)		14
Loss on sale of assets (9)		10											10
Litigation, regulatory and other legal matters (10)							5						(5	)
Core performance measures	$	2,566		37.4	%	$	918		$	517		$	1,131			16.5	%

	Six months ended June 30, 2023
	Gross margin			Gross margin %			Selling, general and administrative expenses			Research, development and engineering expenses			Operating income			Operating margin %
As reported - GAAP	$	2,016			31.4	%	$	861		$	517		$	576			9.0	%
Constant-currency adjustment (1)		325						5						320
Acquisition-related costs (4)								2						60
Restructuring, impairment and other charges and credits (6)		133						(22	)		(12	)		167
Pension mark-to-market adjustment (7)								(14	)		(3	)		17
Gain on sale of assets (9)		(20	)											(20	)
Litigation, regulatory and other legal matters (10)		(6	)					(18	)					12
Core performance measures	$	2,448			35.7	%	$	814		$	502		$	1,132			16.5	%

See “Items Adjusted from GAAP Measures” for the descriptions of the footnoted reconciling items.

Reconciliation of Non-GAAP Measures	Testing Incorporated and Subsidiary Companies
(Unaudited; in millions)

	Three months ended					Six months ended
	June 30,					June 30,
	2024		2023			2024		2023
Cash flows from operating activities	$	521	$	619		$	617	$	570
Realized gains on translated earnings contracts and other		74		96			168		177
Translation losses on cash balances				(17	)				(50	)
Adjusted cash flows from operating activities	$	595	$	698		$	785	$	697
Less: Capital expenditures	$	242	$	388		$	494	$	770
Adjusted free cash flow	$	353	$	310		$	291	$	(73	)

Items Adjusted from GAAP Measures

Items adjusted from GAAP measures to arrive at core performance measures are as follows:

(1)	Constant-currency adjustment: As a significant portion of revenues and expenses are denominated in currencies other than the U.S. dollar, management believes it is important to understand the impact on sales and net income of translating these currencies into U.S. dollars. The Company utilizes constant-currency reporting for Display Technologies, Specialty Materials, Environmental Technologies and Life Sciences segments for the Japanese yen, Korean won, Chinese yuan, New Taiwan dollar and euro, as applicable to the segment. In addition, effective January 1, 2024, the Company began utilizing constant-currency reporting for the Optical Communications segment to exclude the impact from the Mexican peso on segment results. Prior periods were not recast as the impact was not material.   The constant-currency rates established for our core performance measures are internally derived long-term management estimates, which are closely aligned with our hedging instrument rates. These hedging instruments may include, but are not limited to, foreign exchange forward or option contracts and foreign-denominated debt. For the six months ended June 30, 2024, the adjustment primarily relates to our Japanese yen exposure due to the difference in the average spot rate compared to our core rate.   We believe that the use of constant-currency reporting allows management to understand our results without the volatility of currency fluctuation, analyze underlying trends in the businesses and establish operational goals and forecasts.   Constant-currency rates used are as follows and are applied to all periods presented and to all foreign exchange exposures during the period, even though we may be less than 100% hedged:
	Currency	Japanese yen	Korean won	Chinese yuan	New Taiwan dollar	Euro	Mexican peso
	Rate	¥107	₩1,175	¥6.7	NT$31	€.81	MX$20
(2)	Translation of Japanese yen-denominated debt, net: Amount reflects the gain or loss on the translation of our yen-denominated debt to U.S. dollars, net of a $7 million loss for the three and six months ended June 30, 2024, related to the change in the fair value of our cross currency swap contracts.
(3)	Translated earnings contract: Amount reflects the impact of the realized and unrealized gains and losses from the Japanese yen, South Korean won, Chinese yuan, euro and New Taiwan dollar-denominated foreign currency hedges related to translated earnings, as well as the unrealized gains and losses of our British pound and Mexican peso-denominated foreign currency hedges related to translated earnings.
(4)	Acquisition-related costs: Amount reflects intangible amortization, inventory valuation adjustments and external acquisition-related deal costs, as well as other transaction related costs.
(5)	Discrete tax items and other tax-related adjustments: Amount reflects certain discrete period tax items such as changes in tax law, the impact of tax audits, changes in tax reserves and changes in deferred tax asset valuation allowances, as well as other tax-related adjustments.
(6)	Restructuring, impairment and other charges and credits: Amount reflects certain restructuring, impairment losses and other charges and credits, as well as other expenses, including severance, accelerated depreciation, asset write-offs and facility repairs resulting from power outages, which are not related to ongoing operations.
(7)	Pension mark-to-market adjustment: Amount primarily reflects defined benefit pension mark-to-market gains and losses, which arise from changes in actuarial assumptions and the difference between actual and expected returns on plan assets and discount rates.
(8)	Loss on investments: Amount reflects the loss recognized on investments due to mark-to-market adjustments for the change in fair value or the disposition of an investment.
(9)	Loss (gain) on sale of assets: Amount represents the loss or gain recognized for the sale of assets.
(10)	Litigation, regulatory and other legal matters: Amount reflects developments in commercial litigation, intellectual property disputes, adjustments to our estimated liability for environmental-related items and other legal matters.