Second-Quarter Summary section, third bullet point should read: Display
Technologies wholly owned business LCD glass volume declined by
mid-single digits on a sequential basis and increased by mid-single
digits year over year. (sted Display Technologies wholly owned business
LCD glass volume declined by mid-single digits on a sequential and
year-over-year basis).
The corrected release reads:
CORNING ANNOUNCES SECOND-QUARTER RESULTS
Sequential LCD Glass Price Moderates
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 basis and increased by mid-single
digits year over year. 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
