Corning Incorporated (NYSE: GLW) today announced its results for
the second quarter of 2012.
Second-Quarter Summary
- Sales were $1.9 billion, essentially
even with last quarter, but 5% lower than a year ago.
- Earnings per share were $0.30.
Excluding special items, earnings per share were $0.31,* a 35%
year-over-year decline.
- Display Technologies wholly owned
business LCD glass volume declined by mid-single digits on a
sequential and year-over-year basis. Volume at Samsung Corning
Precision Materials Co., Ltd. increased by the mid-single digits on
a sequential basis, but declined by low-double digits from a year
ago.
- LCD price declines were much more
moderate this quarter.
- Telecommunications sales increased 10%
sequentially and were up slightly on a year-over-year basis.
- Specialty Materials sales, which
include Corning® Gorilla® Glass, increased slightly sequentially
and 5% year-over-year.
Quarter Two Financial
Comparisons
Q2 2012
Q1 2012 % Change
Q2 2011 % Change Net
Sales in millions
$1,908
$1,920 (1%)
$2,005 (5%) Net Income in
millions
$462
$462 0%
$755 (39%) Non-GAAP Net Income
in millions*
$465 $463
0% $758
(39%) GAAP EPS
$0.30 $0.30
0% $0.47
(36%) Non-GAAP EPS*
$0.31
$0.30 3%
$0.48 (35%)
*These 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 investor
relations website.
Reflecting on Corning’s second-quarter performance, Wendell P.
Weeks, chairman, chief executive officer, and president, said, “We
had a solid second quarter in terms of sales and earnings
performance. We achieved much more moderate price declines for our
LCD glass as set forth in our goals that we shared in February.
Additionally, LCD glass retail and supply chain market statistics
were generally in line with our expectations. As a whole, our other
businesses grew 2% year-over-year.”
“However, we are concerned about the continuing economic
challenges in Europe and China’s decelerating GDP growth. We have
seen signs that the unsettled global economy impacted some of our
businesses in the past quarter. For example, in Europe our
Environmental Technologies segment saw reduced sales of light-duty
filters for auto emission systems. We are alert to the fact that
the economic woes may grow, and consumers may reduce their
spending, which could impact our customers. If we see further
weakness, we will respond with appropriate actions,” Weeks
said.
Second-Quarter Segment Results
Sales in the Display Technologies segment were $641 million, a
9% sequential and 16% year-over-year decline. LCD glass price
declines were, as expected, much more moderate.
Telecommunications segment sales were $559 million, a 10%
sequential and 2% year-over-year increase. The sequential gain was
driven by stronger optical fiber and cable products and enterprise
network solutions sales. North America and China were the most
robust geographies for Corning’s Telecommunications segment.
Specialty Materials segment sales were $296 million, a 3%
sequential and 5% year-over-year improvement. The increase was
driven by Gorilla Glass sales in the handheld and information
technology device markets.
Environmental Technologies segment sales were $249 million, a 5%
sequential and 3% year-over-year decline. The company saw strength
in its heavy-duty diesel products sales in the quarter, offset by
weakness in light-duty (auto) product sales, the result of planned
seasonal auto manufacturing plant shutdowns and weakness in the
European market.
Life Sciences segment sales were $162 million, representing 5%
sequential and year-over-year increases. The company anticipates
the completion of the BD Biosciences Discovery Labware unit
acquisition by year-end, pending U.S. government regulatory
approvals.
Dow Corning Corporation’s equity earnings were $61 million,
increasing 74% sequentially, but declining 36% on a year-over-year
basis. The second quarter increase, without one-time gains, would
have been 43%*. Dow Corning saw sequential quarterly sales
improvements in both its silicone and polysilicon segments.
Corning’s gross margin for the quarter was 42%, consistent with
the previous quarter. The company ended the second quarter with
$6.3 billion in cash and short-term investments. During the
quarter, Corning spent $314 million in stock buybacks.
Looking Forward
“We are pleased with the progress we have made against the goals
we outlined in February for stabilizing our Display Technologies
segment earnings and growing our other businesses,” James B. Flaws,
vice chairman and chief financial officer, said. “We are moving
forward on new opportunities in high performance displays, and our
recently formed OLED equity venture in Korea. We are excited about
the possibilities for Corning® Willow™ Glass, an ultra-slim
flexible glass that may enable some very unique opportunities for
us.”
For the third quarter, Flaws noted that Corning expects LCD
glass volume for the company’s wholly owned business and Samsung
Corning Precision to grow in the low double digits sequentially.
The stronger glass volume should be driven by normal industry
seasonality, along with continued demand for tablet computers and
larger TV sizes. Glass price declines in the quarter are expected
to remain moderate.
Telecommunications segment sales are expected to be consistent
with the previous quarter and consistent with normal seasonal
trends. Corning expects sales of optical fiber and cable in China
to remain strong.
Specialty Materials segment sales are anticipated to increase
10% to 15% sequentially, reflecting improved Gorilla® Glass sales
during the quarter.
Environmental Technologies segment sales are expected to be
similar to the previous quarter.
In the Life Sciences segment, Corning forecasts sales to be
consistent to up slightly over second-quarter results.
Dow Corning equity earnings in the third quarter are expected to
decline about 30%, driven primarily by the non-repeat of an $11
million gain in the second quarter. Normal summer manufacturing
shutdowns will contribute to the sequential decline.
Corning’s tax rate in the third quarter is anticipated to be
approximately 19%.
“Our first-half performance was in line with our expectations.
Our LCD glass business remains highly profitable, and our other
businesses in aggregate grew year-over-year,” Flaws said.
“Current economic conditions may present challenges for the near
term. In spite of this, we anticipate continued growth in several
of our businesses in the third quarter,” he said.
Upcoming Investor Events
Corning will present at the 2012 Citi Technology Conference in
New York on Sept. 6.
Second-Quarter Conference Call Information
The company will host a second-quarter conference call on
Wednesday, July 25 at 8:30 a.m. ET. To participate, please call
toll free (800) 230-1085 or for international access call (612)
288-0337 approximately 10-15 minutes prior to the start of the
call. The password is ‘QUARTER TWO’. The host is ‘SOFIO’. To listen
to a live audio webcast of the call, go to Corning’s website at
www.corning.com/investor_relations and click Investor Events on the
left. A replay will be available beginning at 10:30 a.m. ET and
will run through 5 p.m. ET, Wednesday, August 8, 2012. To listen,
dial (800) 475-6701 or for international access dial (320)
365-3844. The access code is 253774. The webcast will be archived
for one year following the call.
Presentation of Information in this News Release
Non-GAAP financial measures are not in accordance with, or an
alternative to, GAAP. Corning’s non-GAAP net income and EPS
measures exclude restructuring, impairment and other charges and
adjustments to prior estimates for such charges. Additionally, the
company’s non-GAAP measures exclude adjustments to asbestos
settlement reserves, gains and losses arising from debt
retirements, charges or credits arising from adjustments to the
valuation allowance against deferred tax assets, equity method
charges resulting from impairments of equity method investments or
restructuring, impairment or other charges taken by equity method
companies and gains from discontinued operations. The company
believes presenting non-GAAP net income and EPS measures is helpful
to analyze financial performance without the impact of unusual
items that may obscure trends in the company’s underlying
performance. Reconciliation of these non-GAAP measures can be found
on the company’s website by going to
www.corning.com/investor_relations and clicking Financial Reports
on the left. Reconciliation also accompanies this news release.
Forward-Looking and Cautionary Statements
This press release contains “forward-looking statements” (within
the meaning of the Private Securities Litigation Reform Act of
1995), which are based on current expectations and assumptions
about Corning’s financial results and business operations, that
involve substantial risks and uncertainties that could cause actual
results to differ materially. These risks and uncertainties
include: the effect of global political, economic and business
conditions; conditions in the financial and credit
markets; currency fluctuations; tax rates; product demand
and industry capacity; competition; reliance on a concentrated
customer base; manufacturing efficiencies; cost reductions;
availability of critical components and materials; new product
commercialization; pricing fluctuations and changes
in the mix of sales between premium and non-premium
products; new plant start-up or restructuring costs;
possible disruption in commercial activities due to terrorist
activity, armed conflict, political or financial instability,
natural disasters, adverse weather conditions, or major health
concerns; adequacy of insurance; equity company activities;
acquisition and divestiture activities; the level of excess or
obsolete inventory; the rate of technology change; the ability to
enforce patents; product and components performance issues;
retention of key personnel; stock price fluctuations; and adverse
litigation or regulatory developments. These and
other risk factors are detailed in Corning’s filings
with the Securities and Exchange Commission. Forward-looking
statements speak only as of the day that they are made, and Corning
undertakes no obligation to update them in light of new information
or future events.
About Corning Incorporated
Corning Incorporated (www.corning.com) is the world leader in
specialty glass and ceramics. Drawing on more than 160 years of
materials science and process engineering knowledge, Corning
creates and makes keystone components that enable high-technology
systems for consumer electronics, mobile emissions control,
telecommunications and life sciences. Our products include glass
substrates for LCD televisions, computer monitors and laptops;
ceramic substrates and filters for mobile emission control systems;
optical fiber, cable, hardware & equipment for
telecommunications networks; optical biosensors for drug discovery;
and other advanced optics and specialty glass solutions for a
number of industries including semiconductor, aerospace, defense,
astronomy, and metrology.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF
INCOME
(Unaudited; in millions, except per share
amounts)
Three months ended Six months ended
June 30, June 30, 2012 2011 2012 2011 Net sales $ 1,908 $
2,005 $ 3,828 $ 3,928 Cost of sales 1,111
1,116 2,217 2,165 Gross
margin 797 889 1,611 1,763 Operating expenses: Selling,
general and administrative expenses 291 284 570 534 Research,
development and engineering expenses 188 172 375 328 Amortization
of purchased intangibles 4 4 9 7 Asbestos litigation charge (Note
1) 5 5 6 10
Operating income 309 424 651 884 Equity in earnings
of affiliated companies 259 428 477 826 Interest income 3 5 7 9
Interest expense (24 ) (22 ) (44 ) (49 ) Other income, net 8
43 37 70
Income before income taxes 555 878 1,128 1,740 Provision for income
taxes (93 ) (123 ) (204 ) (237 )
Net income attributable to Corning Incorporated $ 462 $ 755
$ 924 $ 1,503 Earnings per common share
attributable to Corning Incorporated: Basic (Note 2) $ 0.31
$ 0.48 $ 0.61 $ 0.96 Diluted (Note 2) $ 0.30
$ 0.47 $ 0.61 $ 0.95 Dividends declared
per common share $ 0.075 $ 0.05 $ 0.15 $ 0.10
See accompanying notes to these financial statements.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
(Unaudited; in millions)
Three months Six months ended June 30,
ended June 30, 2012 2011 2012 2011 Net income attributable
to Corning Incorporated $ 462 $ 755 $ 924 $ 1,503 Other
comprehensive income (loss), net of tax 4 241
(47 ) 421 Comprehensive income attributable to
Corning Incorporated $ 466 $ 996 $ 877 $ 1,924 See
accompanying notes to these financial statements.
CORNING
INCORPORATED AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited; in millions, except per share
amounts)
June 30, December 31, 2012 2011
Assets
Current assets: Cash and cash equivalents $ 5,008 $ 4,661
Short-term investments, at fair value 1,337
1,164 Total cash, cash equivalents and short-term
investments 6,345 5,825 Trade accounts receivable, net of doubtful
accounts and allowances 1,157 1,082 Inventories 999 975 Deferred
income taxes 441 448 Other current assets 436
347 Total current assets 9,378 8,677 Investments
4,870 4,726 Property, net of accumulated depreciation 10,751 10,671
Goodwill and other intangible assets, net 916 926 Deferred income
taxes 2,565 2,652 Other assets 274 196
Total Assets $ 28,754 $ 27,848
Liabilities and Equity Current liabilities: Current
portion of long-term debt $ 29 $ 27 Accounts payable 929 977 Other
accrued liabilities 934 1,093 Total
current liabilities 1,892 2,097 Long-term debt 3,229 2,364
Postretirement benefits other than pensions 900 897 Other
liabilities 1,331 1,361 Total
liabilities 7,352 6,719
Commitments and contingencies Shareholders’ equity: Common stock -
Par value $0.50 per share; Shares authorized: 3.8 billion; Shares
issued: 1,645 million and 1,636 million 823 818 Additional paid-in
capital 13,096 13,041 Retained earnings 10,029 9,332 Treasury
stock, at cost; Shares held: 155 million and 121 million (2,458 )
(2,024 ) Accumulated other comprehensive loss (136 )
(89 ) Total Corning Incorporated shareholders' equity 21,354
21,078 Noncontrolling interests 48
51 Total equity 21,402
21,129
Total Liabilities and Equity $ 28,754
$ 27,848 See accompanying notes to these
financial statements.
CORNING INCORPORATED AND SUBSIDIARY
COMPANIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Unaudited; in millions)
Three months ended Six months
ended June 30, June 30, 2012 2011 2012 2011
Cash Flows from
Operating Activities: Net income $ 462 $ 755 $ 924 $ 1,503
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation 238 232 473 458 Amortization of
purchased intangibles 4 4 9 7 Cash received from settlement of
insurance claims 66 Stock compensation charges 16 22 40 45 Earnings
of affiliated companies (in excess of) less than dividends received
(256 ) (359 ) 44 (437 ) Deferred tax (benefit) provision (26 ) 81
21 96 Employee benefit payments less than (in excess of) expense 33
34 (33 ) 68 Changes in certain working capital items: Trade
accounts receivable (19 ) (122 ) (68 ) (243 ) Inventories (47 ) (64
) (35 ) (143 ) Other current assets (7 ) (16 ) (54 ) (42 ) Accounts
payable and other current liabilities, net of restructuring
payments 6 40 (45 ) (43 ) Other, net 166 (61 )
56 (216 )
Net cash provided by operating
activities 570 546 1,332
1,119
Cash Flows from Investing
Activities: Capital expenditures (441 ) (494 ) (853 ) (1,026 )
Acquisitions of businesses, net of cash received (148 ) Investments
in affiliates (104 ) (111 ) Short-term investments - acquisitions
(640 ) (962 ) (1,168 ) (1,845 ) Short-term investments -
liquidations 648 949 989 1,852 Other, net 2 2
4 5
Net cash used in
investing activities (535 ) (505 ) (1,139
) (1,162 )
Cash Flows from Financing
Activities: Net repayments of short-term borrowings and current
portion of long-term debt (3 ) (2 ) (13 ) (12 ) Principal payments
under capital lease obligations (1 ) (32 ) Proceeds from issuance
of long-term debt, net 95 886 Payments to settle interest rate
hedges (18 ) Proceeds from the exercise of stock options 3 9 19 73
Repurchase of common stock for treasury (314 ) (386 ) Dividends
paid (113 ) (79 ) (227 ) (158 )
Net
cash (used in) provided by financing activities (332 )
(72 ) 260 (129 ) Effect of exchange
rates on cash (185 ) 70 (106 )
183 Net (decrease) increase in cash and cash equivalents
(482 ) 39 347 11 Cash and cash equivalents at beginning of period
5,490 4,570 4,661
4,598
Cash and cash equivalents at end of
period $ 5,008 $ 4,609 $ 5,008 $ 4,609
Certain amounts for 2011 were reclassified to conform
to the 2012 presentation.
CORNING INCORPORATED AND SUBSIDIARY
COMPANIES
SEGMENT RESULTS
(Unaudited; in millions)
Our
reportable operating segments include Display Technologies,
Telecommunications, Environmental Technologies, Specialty Materials
and Life Sciences. Display Telecom- Environmental
Specialty Life All
Technologies
munications
Technologies Materials Sciences Other Total
Three months
ended June 30, 2012 Net sales $ 641 $ 559 $ 249 $ 296 $
162 $ 1 $ 1,908 Depreciation (1) $ 125 $ 34 $ 29 $ 36 $ 10 $ 3 $
237
Amortization of purchased intangibles
$ 2 $ 2 $ 4
Research, development and engineering
expenses (2)
$ 26 $ 35 $ 26 $ 37 $ 5 $ 29 $ 158
Equity in earnings of affiliated
companies
$ 184 $ 2 $ 9 $ 195
Income tax (provision) benefit
$ (78 ) $ (17 ) $ (17 ) $ (17 ) $ (5 ) $ 12 $ (122 ) Net
income (loss) (3) $ 371 $ 36 $ 34 $ 34
$ 11 $ (16 ) $ 470
Three months ended
June 30, 2011 Net sales $ 760 $ 548 $ 258 $ 283 $ 155 $ 1 $
2,005 Depreciation (1) $ 123 $ 32 $ 27 $ 42 $ 9 $ 3 $ 236
Amortization of purchased intangibles
$ 2 $ 2 $ 4
Research, development and engineering
expenses (2)
$ 27 $ 32 $ 23 $ 36 $ 5 $ 24 $ 147
Equity in earnings of affiliated
companies
$ 319 $ 1 $ 1 $ 5 $ 2 $ 328
Income tax (provision benefit)
$ (118 ) $ (22 ) $ (15 ) $ (9 ) $ (7 ) $ 10 $ (161 ) Net
income (loss) (3) $ 626 $ 46 $ 32 $ 23
$ 15 $ (20 ) $ 722
Six months ended
June 30, 2012 Net sales $ 1,346 $ 1,067 $ 512 $ 584 $ 317 $
2 $ 3,828 Depreciation (1) $ 254 $ 64 $ 57 $ 70 $ 20 $ 6 $ 471
Amortization of purchased intangibles
$ 5 $ 4 $ 9
Research, development and engineering
expenses (2)
$ 53 $ 70 $ 52 $ 74 $ 11 $ 56 $ 316
Equity in earnings of affiliated
companies
$ 366 $ (2 ) $ 1 $ 13 $ 378
Income tax (provision) benefit
$ (174 ) $ (29 ) $ (37 ) $ (28 ) $ (11 ) $ 22 $ (257 ) Net
income (loss) (3) $ 792 $ 57 $ 74 $ 55
$ 23 $ (36 ) $ 965
Six months ended
June 30, 2011 Net sales $ 1,550 $ 1,022 $ 517 $ 537 $ 299 $
3 $ 3,928 Depreciation (1) $ 247 $ 60 $ 52 $ 79 $ 17 $ 5 $ 460
Amortization of purchased intangibles
$ 3 $ 4 $ 7
Research, development and engineering
expenses (2)
$ 52 $ 61 $ 46 $ 65 $ 9 $ 46 $ 279
Equity in earnings of affiliated
companies
$ 613 $ 4 $ 1 $ 8 $ 9 $ 635
Income tax (provision) benefit
$ (257 ) $ (41 ) $ (29 ) $ (12 ) $ (14 ) $ 19 $ (334 ) Net
income (loss) (3) $ 1,264 $ 87 $ 61 $ 31
$ 30 $ (35 ) $ 1,438 (1) Depreciation
expense for Corning’s reportable segments includes an allocation of
depreciation of corporate property not specifically identifiable to
a segment. (2) Research, development, and engineering expense
includes direct project spending which is identifiable to a
segment. (3) Many of Corning’s administrative and staff functions
are performed on a centralized basis. Where practicable, Corning
charges these expenses to segments based upon the extent to which
each business uses a centralized function. Other staff functions,
such as corporate finance, human resources and legal are allocated
to segments, primarily as a percentage of sales.
CORNING
INCORPORATED AND SUBSIDIARY COMPANIES
SEGMENT RESULTS
(Unaudited; in millions)
A reconciliation
of reportable segment net income to consolidated net income follows
(in millions): Three months ended Six months ended June 30, June
30, 2012 2011 2012
2011 Net income of reportable segments $ 486 $ 742 $ 1,001 1,473
Non-reportable segments (16 ) (20 ) (36 ) (35 ) Unallocated
amounts: Net financing costs (1) (44 ) (47 ) (84 ) (99 )
Stock-based compensation expense (16 ) (22 ) (40 ) (45 )
Exploratory research (24 ) (19 ) (47 ) (36 ) Corporate
contributions (10 ) (11 ) (23 ) (32 ) Equity in earnings of
affiliated companies, net of impairments (2) 64 100 99 191 Asbestos
litigation (3) (5 ) (5 ) (6 ) (10 ) Other corporate items
27 37 60
96 Net income $ 462 $ 755
$ 924 1,503 (1) Net financing
costs include interest income, interest expense, and interest costs
and investment gains associated with benefit plans. (2) Primarily
represents the equity earnings of Dow Corning Corporation. (3) In
the three and six months ended June 30, 2012, Corning recorded a
charge of $5 million and $6 million, respectively, to adjust the
asbestos liability for the change in value of the components of the
Modified PCC Plan. In the three and six months ended June 30, 2011,
Corning recorded a charge of $5 million and $10 million,
respectively, to adjust the asbestos liability for the change in
value of the components of the Modified PCC Plan.
CORNING
INCORPORATED AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
1. Asbestos
Litigation Pittsburgh Corning Corporation (PCC) was
named in numerous lawsuits alleging personal injury from exposure
to asbestos and, on April 16, 2000, PCC filed for Chapter 11
reorganization. Corning, with other relevant parties, proposed a
Plan of Reorganization of PCC in 2003, which has not yet been
confirmed. Under this PCC Plan, Corning would contribute certain
payments and assets. In the second quarter of 2012, we recorded a
charge of $5 million ($3 million after-tax) to adjust the asbestos
litigation liability for the change in value of the components to
be contributed by Corning under this PCC Plan.
2.
Weighted Average Shares Outstanding Weighted average
shares outstanding are as follows (in millions):
Three months ended
June 30,
Three months
ended
2012 2011 March 31, 2012 Basic 1,506
1,568 1,516 Diluted 1,518 1,591 1,530 Diluted used for non-GAAP
measures 1,518 1,591 1,530
CORNING INCORPORATED AND SUBSIDIARY
COMPANIES
QUARTERLY SALES INFORMATION
(Unaudited; in millions)
2012 March 31 June
30
Six Months EndedJune
30
Display Technologies $ 705 $ 641 $ 1,346
Telecommunications Fiber and cable 254 302 556 Hardware and
equipment 254 257 511 508 559 1,067
Environmental Technologies Automotive 129 120 249 Diesel
134 129 263 263 249 512
Specialty
Materials 288 296 584
Life Sciences 155 162 317
All Other 1 1 2
Total $ 1,920 $ 1,908 $ 3,828
2011 Q1
Q2 Q3 Q4 Total
Display Technologies $ 790 $ 760 $ 815 $ 780 $ 3,145
Telecommunications Fiber and cable 248 265 276 262
1,051 Hardware and equipment 226 283 284
228 1,021 474 548 560 490 2,072
Environmental Technologies Automotive 123 121 119 113 476
Diesel 136 137 128 121 522 259
258 247 234 998
Specialty Materials 254 283 299 238
1,074
Life Sciences 144 155 153 143 595
All
Other 2 1 1 2 6
Total $ 1,923 $ 2,005 $ 2,075 $ 1,887 $ 7,890 The
above supplemental information is intended to facilitate analysis
of Corning’s businesses.
CORNING INCORPORATED AND SUBSIDIARY
COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURE TO GAAP FINANCIAL MEASURE
Three Months Ended June 30,
2012
(Unaudited; amounts in millions, except
per share amounts)
Corning’s net income and
earnings per share (EPS) excluding special items for the second
quarter of 2012 are non-GAAP financial measures within the meaning
of Regulation G of the Securities and Exchange Commission. Non-GAAP
financial measures are not in accordance with, or an alternative
to, generally accepted accounting principles (GAAP). The company
believes presenting non-GAAP net income and EPS is helpful to
analyze financial performance without the impact of unusual items
that may obscure trends in the company’s underlying performance. A
detailed reconciliation is provided below outlining the differences
between these non-GAAP measures and the directly related GAAP
measures.
Per Income Before Net
Share Income Taxes Income Earnings per
share (EPS) and net income, excluding special items $ 0.31 $ 560 $
465 Special items: Asbestos settlement (a) -
(5 ) (3 ) Total EPS and net income $ 0.30 $ 555
$ 462
(a) In the second quarter of 2012, Corning
recorded a charge of $5 million ($3 million after-tax) to adjust
the asbestos liability for the change in value of the components of
the Modified PCC Plan.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURE TO GAAP FINANCIAL MEASURE
Three Months Ended March 31,
2012
(Unaudited; amounts in millions, except
per share amounts)
Corning’s net income and
earnings per share (EPS) excluding special items for the first
quarter of 2012 are non-GAAP financial measures within the meaning
of Regulation G of the Securities and Exchange Commission. Non-GAAP
financial measures are not in accordance with, or an alternative
to, generally accepted accounting principles (GAAP). The company
believes presenting non-GAAP net income and EPS is helpful to
analyze financial performance without the impact of unusual items
that may obscure trends in the company’s underlying performance. A
detailed reconciliation is provided below outlining the differences
between these non-GAAP measures and the directly related GAAP
measures.
Per Income Before Net
Share Income Taxes Income Earnings per
share (EPS) and net income, excluding special items $ 0.30 $ 574 $
463 Special items: Asbestos settlement (a) -
(1 ) (1 ) Total EPS and net income $ 0.30 $ 573
$ 462
(a) In the first quarter of 2012, Corning
recorded a charge of $1 million ($1 million after-tax) to adjust
the asbestos liability for the change in value of the components of
the Modified PCC Plan.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURE TO GAAP FINANCIAL MEASURE
Three Months Ended June 30,
2011
(Unaudited; amounts in millions, except
per share amounts)
Corning’s net income and earnings per
share (EPS) excluding special items for the second quarter of 2011
are non-GAAP financial measures within the meaning of Regulation G
of the Securities and Exchange Commission. Non-GAAP financial
measures are not in accordance with, or an alternative to,
generally accepted accounting principles (GAAP). The company
believes presenting non-GAAP net income and EPS is helpful to
analyze financial performance without the impact of unusual items
that may obscure trends in the company’s underlying performance. A
detailed reconciliation is provided below outlining the differences
between these non-GAAP measures and the directly related GAAP
measures.
Per Income Before Net
Share Income Taxes Income Earnings per
share (EPS) and net income, excluding special items $ 0.48 $ 883 $
758 Special items: Asbestos settlement (a) -
(5 ) (3 ) Total EPS and net income $ 0.47 $ 878
$ 755
(a) In the second quarter of 2011, Corning
recorded a charge of $5 million ($3 million after-tax) to adjust
the asbestos liability for the change in value of the components of
the Modified PCC Plan.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURE TO GAAP FINANCIAL MEASURE
Dow Corning Corporation, Affiliated
Company of Corning Incorporated
Three Months Ended June 30 and March
31, 2012
(Unaudited; amounts in millions)
Corning’s equity in earnings of affiliated
companies excluding non-recurring items for the second and first
quarters of 2012 is a non-GAAP financial measure within the meaning
of Regulation G of the Securities and Exchange Commission. Non-GAAP
financial measures are not in accordance with, or an alternative
to, generally accepted accounting principles (GAAP). The company
believes presenting non-GAAP equity in earnings of affiliated
companies is helpful to analyze financial performance without the
impact of unusual items that may obscure trends in the company’s
underlying performance. A detailed reconciliation is provided below
outlining the differences between these non-GAAP measures and the
directly related GAAP measures.
Sequential
Q2 2012 Q1 2012 % Change Equity in
earnings of affiliated companies, excluding non-recurring items $
50 $ 35 43 % Equity in earnings of affiliated companies (a)
11 Equity in earnings of affiliated
companies $ 61 $ 35 74 %
(a) In the second quarter of 2012, equity
in earnings of affiliated companies included a $11 million credit
for Corning’s share of non-recurring items.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURE TO GAAP FINANCIAL MEASURE
Three and Six Months Ended June 30,
2012
(Unaudited; amounts in millions)
Corning’s free cash flow financial measure for the
three and six months ended June 30, 2012 is non-GAAP financial
measure within the meaning of Regulation G of the Securities and
Exchange Commission. Non-GAAP financial measures are not in
accordance with, or an alternative to, generally accepted
accounting principles (GAAP). The company believes presenting
non-GAAP financial measures are helpful to analyze financial
performance without the impact of unusual items that may obscure
trends in the company’s underlying performance. A detailed
reconciliation is provided below outlining the differences between
this non-GAAP measure and the directly related GAAP measures.
Three Six months ended months
ended June 30, June 30, 2012 2012
Cash flows from operating activities $ 570 $ 1,332
Less: Cash flows from investing activities (535 ) (1,139 )
Plus: Short-term investments - acquisitions 640 1,168 Less:
Short-term investments - liquidations (648 ) (989 )
Free cash flow $ 27 $ 372
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