Date of Report: (Date of earliest event reported)
|
October 26, 2011
|
New York
(State or other jurisdiction
of incorporation)
|
1-3247
(Commission
File Number)
|
16-0393470
(I.R.S. Employer
Identification No.)
|
One Riverfront Plaza, Corning, New York
(Address of principal executive offices)
|
14831
(Zip Code)
|
¨
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
¨
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
¨
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
¨
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
CORNING INCORPORATED
|
|
Registrant
|
Date: October 26, 2011
|
By
|
/s/ R. TONY TRIPENY
|
R. Tony Tripeny
|
||
Senior Vice President & Corporate Controller
|
·
|
Sales were $2.1 billion, an increase of 3% sequentially and 30% year over year.
|
·
|
Earnings per share were $0.51. Excluding special items, earnings per share were $0.48*, consistent with last quarter, but down 6% year over year.
|
·
|
Display Technologies’ wholly owned business volume increased in the mid-single digits sequentially and was up more than 30% year over year. Samsung Corning Precision Materials Co., Ltd.’s volume declined more than 20% sequentially and 25% year over year. The combined total glass volume of Corning’s wholly owned business and SCP declined about 10% sequentially, in line with the overall glass market.
|
·
|
The Telecommunications, Environmental Technologies, Specialty Materials and Life Sciences business segments all experienced substantial year-over-year sales gains.
|
Q3 2011 | Q2 2011 |
% Change
|
Q3 2010 |
% Change
|
|
Net Sales in millions
|
$2,075 | $2,005 | 3% | $1,602 | 30% |
Net Income in millions
|
$ 811 | $ 755 | 7% | $ 785 | 3% |
Non-GAAP Net Income
in millions*
|
$ 766 | $ 758 | 1% | $ 808 | (5%) |
GAAP EPS
|
$ 0.51 | $ 0.47 | 9% | $ 0.50 | 2% |
Non-GAAP EPS*
|
$ 0.48 | $ 0.48 | 0% | $ 0.51 | (6%) |
Media Relations Contact:
|
Investor Relations Contact:
|
Daniel F. Collins
|
Kenneth C. Sofio
|
(607) 974-4197
|
(607) 974-7705
|
collinsdf@corning.com
|
sofiokc@corning.com
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
||||||||||
2011
|
2010
|
2011
|
2010
|
||||||||
Net sales
|
$
|
2,075
|
$
|
1,602
|
$
|
6,003
|
$
|
4,867
|
|||
Cost of sales
|
1,097
|
878
|
3,262
|
2,585
|
|||||||
Gross margin
|
978
|
724
|
2,741
|
2,282
|
|||||||
Operating expenses:
|
|||||||||||
Selling, general and administrative expenses (Note 1)
|
216
|
250
|
750
|
731
|
|||||||
Research, development and engineering expenses
|
166
|
148
|
494
|
437
|
|||||||
Amortization of purchased intangibles
|
4
|
2
|
11
|
6
|
|||||||
Restructuring, impairment and other credits
|
(1)
|
(3)
|
|||||||||
Asbestos litigation charge (credit) (Note 2)
|
5
|
6
|
15
|
(41)
|
|||||||
Operating income
|
587
|
319
|
1,471
|
1,152
|
|||||||
Equity in earnings of affiliated companies
|
324
|
504
|
1,150
|
1,447
|
|||||||
Interest income
|
6
|
3
|
15
|
8
|
|||||||
Interest expense
|
(23)
|
(29)
|
(72)
|
(81)
|
|||||||
Other income, net
|
27
|
2
|
97
|
130
|
|||||||
Income before incomes taxes
|
921
|
799
|
2,661
|
2,656
|
|||||||
Provision for income taxes (Note 3)
|
(110)
|
(14)
|
(347)
|
(142)
|
|||||||
Net income attributable to Corning Incorporated
|
$
|
811
|
$
|
785
|
$
|
2,314
|
$
|
2,514
|
|||
Earnings per common share attributable to Corning Incorporated:
|
|||||||||||
Basic (Note 4)
|
$
|
0.52
|
$
|
0.50
|
$
|
1.48
|
$
|
1.61
|
|||
Diluted (Note 4)
|
$
|
0.51
|
$
|
0.50
|
$
|
1.46
|
$
|
1.59
|
|||
Dividends declared per common share
|
$
|
0.05
|
$
|
0.05
|
$
|
0.15
|
$
|
0.15
|
September 30,
2011
|
December 31,
2010
|
||||
Assets
|
|||||
Current assets:
|
|||||
Cash and cash equivalents
|
$
|
4,901
|
$
|
4,598
|
|
Short-term investments, at fair value
|
1,520
|
1,752
|
|||
Total cash, cash equivalents and short-term investments
|
6,421
|
6,350
|
|||
Trade accounts receivable, net of doubtful accounts and allowances
|
1,189
|
973
|
|||
Inventories
|
939
|
738
|
|||
Deferred income taxes
|
356
|
431
|
|||
Other current assets
|
359
|
367
|
|||
Total current assets
|
9,264
|
8,859
|
|||
Investments
|
4,890
|
4,372
|
|||
Property, net of accumulated depreciation
|
10,266
|
8,943
|
|||
Goodwill and other intangible assets, net
|
881
|
716
|
|||
Deferred income taxes
|
2,715
|
2,790
|
|||
Other assets
|
157
|
153
|
|||
Total Assets
|
$
|
28,173
|
$
|
25,833
|
|
Liabilities and Equity
|
|||||
Current liabilities:
|
|||||
Current portion of long-term debt
|
$
|
27
|
$
|
57
|
|
Accounts payable
|
938
|
798
|
|||
Other accrued liabilities
|
1,044
|
1,131
|
|||
Total current liabilities
|
2,009
|
1,986
|
|||
Long-term debt
|
2,282
|
2,262
|
|||
Postretirement benefits other than pensions
|
891
|
913
|
|||
Other liabilities
|
1,300
|
1,246
|
|||
Total liabilities
|
6,482
|
6,407
|
|||
Commitments and contingencies
|
|||||
Shareholders’ equity:
|
|||||
Common stock – Par value $0.50 per share; Shares authorized: 3.8 billion; Shares issued: 1,635 million and 1,626 million
|
818
|
813
|
|||
Additional paid-in capital
|
13,014
|
12,865
|
|||
Retained earnings
|
8,958
|
6,881
|
|||
Treasury stock, at cost; Shares held: 66 million and 65 million
|
(1,243)
|
(1,227)
|
|||
Accumulated other comprehensive income
|
93
|
43
|
|||
Total Corning Incorporated shareholders’ equity
|
21,640
|
19,375
|
|||
Noncontrolling interests
|
51
|
51
|
|||
Total equity
|
21,691
|
19,426
|
|||
Total Liabilities and Equity
|
$
|
28,173
|
$
|
25,833
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
||||||||||
2011
|
2010
|
2011
|
2010
|
||||||||
Cash Flows from Operating Activities:
|
|||||||||||
Net income
|
$
|
811
|
$
|
785
|
$
|
2,314
|
$
|
2,514
|
|||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|||||||||||
Depreciation
|
241
|
212
|
699
|
624
|
|||||||
Amortization of purchased intangibles
|
4
|
2
|
11
|
6
|
|||||||
Asbestos litigation charges (credits)
|
5
|
6
|
15
|
(41)
|
|||||||
Restructuring, impairment and other credits
|
(1)
|
(3)
|
|||||||||
Cash received from settlement of insurance claims
|
66
|
||||||||||
Loss on retirement of debt
|
30
|
30
|
|||||||||
Stock compensation charges
|
21
|
22
|
66
|
77
|
|||||||
Undistributed earnings of affiliated companies
|
(249)
|
(438)
|
(686)
|
(1,096)
|
|||||||
Deferred tax provision (benefit)
|
22
|
(25)
|
118
|
(15)
|
|||||||
Restructuring payments
|
(2)
|
(8)
|
(15)
|
(58)
|
|||||||
Credits issued against customer deposits
|
(7)
|
(8)
|
(21)
|
(76)
|
|||||||
Employee benefit payments less than (in excess of) expense
|
37
|
(53)
|
105
|
(81)
|
|||||||
Changes in certain working capital items:
|
|||||||||||
Trade accounts receivable
|
61
|
131
|
(182)
|
(62)
|
|||||||
Inventories
|
(27)
|
(85)
|
(170)
|
(147)
|
|||||||
Other current assets
|
(7)
|
(15)
|
(49)
|
25
|
|||||||
Accounts payable and other current liabilities, net of restructuring payments
|
(64)
|
7
|
(107)
|
8
|
|||||||
Other, net
|
67
|
(134)
|
(132)
|
38
|
|||||||
Net cash provided by operating activities
|
913
|
428
|
2,032
|
1,743
|
|||||||
Cash Flows from Investing Activities:
|
|||||||||||
Capital expenditures
|
(640)
|
(225)
|
(1,666)
|
(534)
|
|||||||
Acquisitions of businesses, net of cash received
|
(148)
|
||||||||||
Net proceeds from sale or disposal of assets
|
1
|
1
|
2
|
1
|
|||||||
Short-term investments – acquisitions
|
(348)
|
(1,106)
|
(2,193)
|
(2,000)
|
|||||||
Short-term investments – liquidations
|
574
|
424
|
2,426
|
1,318
|
|||||||
Other, net
|
(5)
|
4
|
(1)
|
6
|
|||||||
Net cash used in investing activities
|
(418)
|
(902)
|
(1,580)
|
(1,209)
|
|||||||
Cash Flows from Financing Activities:
|
|||||||||||
Net repayments of short-term borrowings and current portion of long-term debt
|
(10)
|
(9)
|
(22)
|
(70)
|
|||||||
Principal payments under capital lease obligations
|
(1)
|
(32)
|
(1)
|
||||||||
Proceeds from issuance of long-term debt, net
|
34
|
689
|
34
|
689
|
|||||||
Retirements of long-term debt, net
|
(264)
|
(264)
|
|||||||||
Proceeds from issuance of common stock, net
|
15
|
||||||||||
Proceeds from the exercise of stock options
|
9
|
10
|
82
|
39
|
|||||||
Dividends paid
|
(79)
|
(79)
|
(237)
|
(235)
|
|||||||
Net cash (used in) provided by financing activities
|
(46)
|
346
|
(175)
|
173
|
|||||||
Effect of exchange rates on cash
|
(157)
|
216
|
26
|
54
|
|||||||
Net increase in cash and cash equivalents
|
292
|
88
|
303
|
761
|
|||||||
Cash and cash equivalents at beginning of period
|
4,609
|
3,214
|
4,598
|
2,541
|
|||||||
Cash and cash equivalents at end of period
|
$
|
4,901
|
$
|
3,302
|
$
|
4,901
|
$
|
3,302
|
Display
Technologies
|
Telecom-
munications
|
Environmental
Technologies
|
Specialty
Materials
|
Life
Sciences
|
All
Other
|
Total
|
||||||||||||||
Three months ended September 30, 2011
|
||||||||||||||||||||
Net sales
|
$
|
815
|
$
|
560
|
$
|
247
|
$
|
299
|
$
|
153
|
$
|
1
|
$
|
2,075
|
||||||
Depreciation (1)
|
$
|
131
|
$
|
31
|
$
|
27
|
$
|
41
|
$
|
8
|
$
|
3
|
$
|
241
|
||||||
Amortization of purchased intangibles
|
$
|
2
|
$
|
1
|
$
|
3
|
||||||||||||||
Research, development and engineering expenses (2)
|
$
|
21
|
$
|
29
|
$
|
27
|
$
|
35
|
$
|
3
|
$
|
22
|
$
|
137
|
||||||
Equity in earnings of affiliated companies
|
$
|
222
|
$
|
5
|
$
|
4
|
$
|
231
|
||||||||||||
Income tax (provision) benefit
|
$
|
(118)
|
$
|
(30)
|
$
|
(15)
|
$
|
(16)
|
$
|
(10)
|
$
|
9
|
$
|
(180)
|
||||||
Net income (loss) (3)
|
$
|
593
|
$
|
82
|
$
|
32
|
$
|
38
|
$
|
21
|
$
|
(17)
|
$
|
749
|
||||||
Three months ended September 30, 2010
|
||||||||||||||||||||
Net sales
|
$
|
645
|
$
|
464
|
$
|
208
|
$
|
159
|
$
|
125
|
$
|
1
|
$
|
1,602
|
||||||
Depreciation (1)
|
$
|
129
|
$
|
27
|
$
|
26
|
$
|
20
|
$
|
8
|
$
|
3
|
$
|
213
|
||||||
Amortization of purchased intangibles
|
|
$
|
2
|
$
|
2
|
|||||||||||||||
Research, development and engineering expenses (2)
|
$
|
22
|
$
|
27
|
$
|
24
|
$
|
25
|
$
|
5
|
$
|
24
|
$
|
127
|
||||||
Restructuring, impairment and other credits
|
$
|
(1)
|
$
|
(1)
|
||||||||||||||||
Equity in earnings of affiliated companies
|
$
|
386
|
$
|
1
|
$
|
16
|
$
|
403
|
||||||||||||
Income tax (provision) benefit
|
$
|
(108)
|
$
|
(20)
|
$
|
(5)
|
$
|
2
|
$
|
(7)
|
$
|
10
|
$
|
(128)
|
||||||
Net income (loss) (3)
|
$
|
648
|
$
|
41
|
$
|
11
|
$
|
(5)
|
$
|
13
|
$
|
(12)
|
$
|
696
|
||||||
Nine months ended September 30, 2011
|
||||||||||||||||||||
Net sales
|
$
|
2,365
|
$
|
1,582
|
$
|
764
|
$
|
836
|
$
|
452
|
$
|
4
|
$
|
6,003
|
||||||
Depreciation (1)
|
$
|
378
|
$
|
91
|
$
|
79
|
$
|
120
|
$
|
25
|
$
|
8
|
$
|
701
|
||||||
Amortization of purchased intangibles
|
$
|
5
|
$
|
5
|
$
|
10
|
||||||||||||||
Research, development and engineering expenses (2)
|
$
|
73
|
$
|
90
|
$
|
73
|
$
|
100
|
$
|
12
|
$
|
68
|
$
|
416
|
||||||
Equity in earnings of affiliated companies
|
$
|
835
|
$
|
4
|
$
|
1
|
$
|
13
|
$
|
13
|
$
|
866
|
||||||||
Income tax (provision) benefit
|
$
|
(375)
|
$
|
(71)
|
$
|
(44)
|
$
|
(28)
|
$
|
(24)
|
$
|
28
|
$
|
(514)
|
||||||
Net income (loss) (3)
|
$
|
1,857
|
$
|
169
|
$
|
93
|
$
|
69
|
$
|
51
|
$
|
(52)
|
$
|
2,187
|
||||||
Nine months ended September 30, 2010
|
||||||||||||||||||||
Net sales
|
$
|
2,261
|
$
|
1,269
|
$
|
584
|
$
|
381
|
$
|
368
|
$
|
4
|
$
|
4,867
|
||||||
Depreciation (1)
|
$
|
386
|
$
|
89
|
$
|
77
|
$
|
43
|
$
|
24
|
$
|
9
|
$
|
628
|
||||||
Amortization of purchased intangibles
|
$
|
1
|
$
|
5
|
$
|
6
|
||||||||||||||
Research, development and engineering expenses (2)
|
$
|
66
|
$
|
84
|
$
|
70
|
$
|
61
|
$
|
13
|
$
|
80
|
$
|
374
|
||||||
Restructuring, impairment and other credits
|
$
|
(1)
|
$
|
(2)
|
$
|
(3)
|
||||||||||||||
Equity in earnings of affiliated companies
|
$
|
1,083
|
$
|
1
|
$
|
5
|
$
|
32
|
$
|
1,121
|
||||||||||
Income tax (provision) benefit
|
$
|
(391)
|
$
|
(38)
|
$
|
(12)
|
$
|
14
|
$
|
(24)
|
$
|
34
|
$
|
(417)
|
||||||
Net income (loss) (3)
|
$
|
2,107
|
$
|
79
|
$
|
27
|
$
|
(29)
|
$
|
48
|
$
|
(46)
|
$
|
2,186
|
(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. In the three and nine months ended September 30, 2011, the Telecommunications segment included a credit of $22 million on the reduction in a contingent liability associated with an acquisition recorded in the first quarter of 2011.
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
||||||||||
2011
|
2010
|
2011
|
2010
|
||||||||
Net income of reportable segments
|
$
|
766
|
$
|
708
|
$
|
2,239
|
$
|
2,232
|
|||
Non-reportable segments
|
(17)
|
(12)
|
(52)
|
(46)
|
|||||||
Unallocated amounts:
|
|||||||||||
Net financing costs (1)
|
(47)
|
(47)
|
(146)
|
(137)
|
|||||||
Stock-based compensation expense
|
(21)
|
(22)
|
(66)
|
(77)
|
|||||||
Exploratory research
|
(23)
|
(15)
|
(59)
|
(44)
|
|||||||
Corporate contributions
|
(6)
|
(7)
|
(38)
|
(26)
|
|||||||
Equity in earnings of affiliated companies, net of impairments (2)
|
93
|
101
|
284
|
326
|
|||||||
Asbestos settlement (3)
|
(5)
|
(6)
|
(15)
|
41
|
|||||||
Other corporate items (4)
|
71
|
85
|
167
|
245
|
|||||||
Net income
|
$
|
811
|
$
|
785
|
$
|
2,314
|
$
|
2,514
|
(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. In the nine months ended September 30, 2010, equity earnings of affiliated companies, net of impairments, includes a credit of $21 million for our share of U.S. advanced energy manufacturing tax credits at Dow Corning Corporation.
|
(3)
|
In the three and nine months ended September 30, 2011, Corning recorded a charge of $5 million and $15 million, respectively, to adjust the asbestos liability for the change in value of the components of the Amended PCC Plan. In the three and nine months ended September 30, 2010, Corning recorded a charge of $6 million and a net credit of $41 million, respectively, primarily to reflect the change in the terms of the proposed asbestos settlement.
|
(4)
|
In the three months ended September 30, 2011, Corning recorded a $41 million tax benefit from the filing of an amended 2006 U.S. Federal Tax return to claim foreign tax credits. In the three months ended September 30, 2010, Corning recorded a loss of $30 million ($19 million after-tax) from the repurchase of $126 million principal amount of our 6.2% senior unsecured notes due March 15, 2016 and $100 million principal amount of our 5.9% senior unsecured notes due March 15, 2014. In the nine months ended September 30, 2010, other corporate items included a tax charge of $56 million from the reversal of the deferred tax asset associated with a Medicare subsidy.
|
1.
|
Contingent Liability
|
2.
|
Asbestos Litigation
|
3.
|
Provision for Income Taxes
|
4.
|
Weighted Average Shares Outstanding
|
Three months ended
September 30,
|
Three months
ended
June 30, 2011
|
||||
2011
|
2010
|
||||
Basic
|
1,569
|
1,557
|
1,568
|
||
Diluted
|
1,588
|
1,580
|
1,591
|
||
Diluted used for non-GAAP measures
|
1,588
|
1,580
|
1,591
|
2011
|
||||||||||||||
Q1
|
Q2
|
Q3
|
Nine
Months
Ended
Sept. 30
|
|||||||||||
Display Technologies
|
$
|
790
|
$
|
760
|
$
|
815
|
$
|
2,365
|
||||||
Telecommunications
|
||||||||||||||
Fiber and cable
|
248
|
265
|
276
|
789
|
||||||||||
Hardware and equipment
|
226
|
283
|
284
|
793
|
||||||||||
474
|
548
|
560
|
1,582
|
|||||||||||
Environmental Technologies
|
||||||||||||||
Automotive
|
123
|
121
|
119
|
363
|
||||||||||
Diesel
|
136
|
137
|
128
|
401
|
||||||||||
259
|
258
|
247
|
764
|
|||||||||||
Specialty Materials
|
254
|
283
|
299
|
836
|
||||||||||
Life Sciences
|
144
|
155
|
153
|
452
|
||||||||||
All Other
|
2
|
1
|
1
|
4
|
||||||||||
Total
|
$
|
1,923
|
$
|
2,005
|
$
|
2,075
|
$
|
6,003
|
2010
|
||||||||||||||
Q1
|
Q2
|
Q3
|
Q4
|
Total
|
||||||||||
Display Technologies
|
$
|
782
|
$
|
834
|
$
|
645
|
$
|
750
|
$
|
3,011
|
||||
Telecommunications
|
||||||||||||||
Fiber and cable
|
190
|
227
|
232
|
229
|
878
|
|||||||||
Hardware and equipment
|
174
|
214
|
232
|
214
|
834
|
|||||||||
364
|
441
|
464
|
443
|
1,712
|
||||||||||
Environmental Technologies
|
||||||||||||||
Automotive
|
117
|
109
|
119
|
117
|
462
|
|||||||||
Diesel
|
75
|
75
|
89
|
115
|
354
|
|||||||||
192
|
184
|
208
|
232
|
816
|
||||||||||
Specialty Materials
|
96
|
126
|
159
|
197
|
578
|
|||||||||
Life Sciences
|
118
|
125
|
125
|
140
|
508
|
|||||||||
All Other
|
1
|
2
|
1
|
3
|
7
|
|||||||||
Total
|
$
|
1,553
|
$
|
1,712
|
$
|
1,602
|
$
|
1,765
|
$
|
6,632
|
Corning’s net income and earnings per share (EPS) excluding special items for the third 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
Share
|
Income Before
Income Taxes
|
Net
Income
|
||||||
Earnings per share (EPS) and net income, excluding special items
|
$
|
0.48
|
$
|
904
|
$
|
766
|
||
Special items:
|
||||||||
Contingent liability (a)
|
0.01
|
22
|
22
|
|||||
Asbestos settlement (b)
|
(5)
|
(3)
|
||||||
Provision for income taxes (c)
|
0.02
|
26
|
||||||
Total EPS and net income
|
$
|
0.51
|
$
|
921
|
$
|
811
|
(a)
|
In the third quarter of 2011, Corning recognized a credit of $22 million resulting from a reduction to a contingent liability associated with an acquisition recorded in the first quarter of 2011.
|
(b)
|
In the third 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.
|
(c)
|
In the third quarter of 2011, Corning recorded a $26 million net tax benefit related to prior year foreign tax credits and other tax adjustments.
|
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
Share
|
Income Before
Income Taxes
|
Net
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’s net income and earnings per share (EPS) excluding special items for the third quarter of 2010 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
Share
|
Income Before
Income Taxes
|
Net
Income
|
||||||
Earnings per share (EPS) and net income, excluding special items
|
$
|
0.51
|
$
|
835
|
$
|
808
|
||
Special items:
|
||||||||
Asbestos settlement (a)
|
(6)
|
(4)
|
||||||
Loss on repurchase of debt (b)
|
(0.01)
|
(30)
|
(19)
|
|||||
Total EPS and net income
|
$
|
0.50
|
$
|
799
|
$
|
785
|
(a)
|
In the third quarter of 2010, Corning recorded a charge of $6 million ($4 million after-tax) to adjust the asbestos liability for the change in value of the components of the modified PCC Plan.
|
(b)
|
In the third quarter of 2010, Corning recorded a $30 million loss ($19 million after-tax) on the repurchase of $126 million principal amount of our 6.2% senior unsecured notes due March 15, 2016 and $100 million principal amount of our 5.9% senior unsecured notes due March 15, 2014.
|
Corning’s free cash flow financial measure for the three months ended September 30, 2011 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 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 months
ended
September 30,
2011
|
Nine months
ended
September 30,
2011
|
||||
Cash flows from operating activities
|
$
|
913
|
$
|
2,032
|
|
Less: Cash flows from investing activities
|
(418)
|
(1,580)
|
|||
Plus: Short-term investments – acquisitions
|
348
|
2,193
|
|||
Less: Short-term investments – liquidations
|
(574)
|
(2,426)
|
|||
Free cash flow
|
$
|
269
|
$
|
219
|