Date of Report: (Date of earliest event reported)
|
January 25, 2012
|
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: January 25, 2012
|
By
|
/s/ R. TONY TRIPENY
|
R. Tony Tripeny
|
||
Senior Vice President & Corporate Controller
|
·
|
Sales were $1.9 billion, a decline of 9% sequentially, but a 7% increase year over year.
|
·
|
Earnings per share were $0.31. Excluding special items, earnings per share were $0.33*, a decline from third-quarter EPS of $0.48 and $0.46 a year ago.
|
·
|
Display Technologies’ wholly owned business glass volume was in line with the company’s expectations. Samsung Corning Precision Materials Co., Ltd.’s volume was higher than the company’s revised guidance last November.
|
·
|
Telecommunications segment sales declined 13% sequentially as expected, while improving by 11% year over year.
|
·
|
Sales were $7.9 billion, a 19% increase over $6.6 billion last year. This represents a record high annual sales performance for the company.
|
·
|
Each of Corning’s major business segments recorded annual sales gains, led by Specialty Materials nearly doubling in sales to $1.1 billion, and Telecommunications improving to $2.1 billion compared to $1.7 billion last year.
|
·
|
Earnings per share were $1.77, a 21% decline from last year. Excluding special items, earnings per share were $1.76*, a 15% decline from last year.
|
·
|
Free cash flow for the year was $544 million*.
|
Q4 2011
|
Q3 2011
|
% Change
|
Q4 2010
|
% Change
|
|
Net Sales in millions
|
$1,887
|
$2,075
|
(9%)
|
$1,765
|
7%
|
Net Income in millions
|
$ 491
|
$ 811
|
(39%)
|
$1,044
|
(53%)
|
Non-GAAP Net Income in millions*
|
$ 513
|
$ 766
|
(33%)
|
$ 733
|
(30%)
|
GAAP EPS
|
$ 0.31
|
$ 0.51
|
(39%)
|
$ 0.66
|
(53%)
|
Non-GAAP EPS*
|
$ 0.33
|
$ 0.48
|
(31%)
|
$ 0.46
|
(28%)
|
2011
|
2010
|
% Change
|
|
Net Sales in millions
|
$7,890
|
$6,632
|
19%
|
Net Income in millions
|
$2,805
|
$3,558
|
(21%)
|
Non-GAAP Net Income in millions*
|
$2,789
|
$3,276
|
(15%)
|
GAAP EPS
|
$ 1.77
|
$ 2.25
|
(21%)
|
Non-GAAP EPS*
|
$ 1.76
|
$ 2.07
|
(15%)
|
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 December 31,
|
Year ended
December 31,
|
||||||||||
2011
|
2010
|
2011
|
2010
|
||||||||
Net sales
|
$
|
1,887
|
$
|
1,765
|
$
|
7,890
|
$
|
6,632
|
|||
Cost of sales
|
1,062
|
998
|
4,324
|
3,583
|
|||||||
Gross margin
|
825
|
767
|
3,566
|
3,049
|
|||||||
Operating expenses:
|
|||||||||||
Selling, general and administrative expenses (Note 1)
|
283
|
284
|
1,033
|
1,015
|
|||||||
Research, development and engineering expenses
|
177
|
166
|
671
|
603
|
|||||||
Amortization of purchased intangibles
|
4
|
2
|
15
|
8
|
|||||||
Restructuring, impairment and other charges (credits) (Note 2)
|
129
|
(326)
|
129
|
(329)
|
|||||||
Asbestos litigation charge (credit) (Note 3)
|
9
|
(8)
|
24
|
(49)
|
|||||||
Operating income
|
223
|
649
|
1,694
|
1,801
|
|||||||
Equity in earnings of affiliated companies (Note 4)
|
321
|
511
|
1,471
|
1,958
|
|||||||
Interest income
|
4
|
3
|
19
|
11
|
|||||||
Interest expense
|
(17)
|
(28)
|
(89)
|
(109)
|
|||||||
Other income, net
|
21
|
54
|
118
|
184
|
|||||||
Income before income taxes
|
552
|
1,189
|
3,213
|
3,845
|
|||||||
Provision for income taxes (Note 5)
|
(61)
|
(145)
|
(408)
|
(287)
|
|||||||
Net income attributable to Corning Incorporated
|
$
|
491
|
$
|
1,044
|
$
|
2,805
|
$
|
3,558
|
|||
Earnings per common share attributable to Corning Incorporated:
|
|||||||||||
Basic (Note 6)
|
$
|
0.32
|
$
|
0.67
|
$
|
1.80
|
$
|
2.28
|
|||
Diluted (Note 6)
|
$
|
0.31
|
$
|
0.66
|
$
|
1.77
|
$
|
2.25
|
|||
Dividends declared per common share
|
$
|
0.08
|
$
|
0.05
|
$
|
0.23
|
$
|
0.20
|
December 31,
|
|||||
2011
|
2010
|
||||
Assets
|
|||||
Current assets:
|
|||||
Cash and cash equivalents
|
$
|
4,661
|
$
|
4,598
|
|
Short-term investments, at fair value
|
1,164
|
1,752
|
|||
Total cash, cash equivalents and short-term investments
|
5,825
|
6,350
|
|||
Trade accounts receivable, net of doubtful accounts and allowances
|
1,082
|
973
|
|||
Inventories
|
975
|
738
|
|||
Deferred income taxes
|
448
|
431
|
|||
Other current assets
|
347
|
367
|
|||
Total current assets
|
8,677
|
8,859
|
|||
Investments
|
4,726
|
4,372
|
|||
Property, net of accumulated depreciation
|
10,671
|
8,943
|
|||
Goodwill and other intangible assets, net
|
926
|
716
|
|||
Deferred income taxes
|
2,652
|
2,790
|
|||
Other assets
|
196
|
153
|
|||
Total Assets
|
$
|
27,848
|
$
|
25,833
|
|
Liabilities and Equity
|
|||||
Current liabilities:
|
|||||
Current portion of long-term debt
|
$
|
27
|
$
|
57
|
|
Accounts payable
|
977
|
798
|
|||
Other accrued liabilities
|
1,093
|
1,131
|
|||
Total current liabilities
|
2,097
|
1,986
|
|||
Long-term debt
|
2,364
|
2,262
|
|||
Postretirement benefits other than pensions
|
897
|
913
|
|||
Other liabilities
|
1,361
|
1,246
|
|||
Total liabilities
|
6,719
|
6,407
|
|||
Commitments and contingencies
|
|||||
Shareholders’ equity:
|
|||||
Common stock – Par value $0.50 per share; Shares authorized: 3.8 billion; Shares issued: 1,636 million and 1,626 million
|
818
|
813
|
|||
Additional paid-in capital
|
13,041
|
12,865
|
|||
Retained earnings
|
9,332
|
6,881
|
|||
Treasury stock, at cost; Shares held: 121 million and 65 million
|
(2,024)
|
(1,227)
|
|||
Accumulated other comprehensive (loss) income
|
(89)
|
43
|
|||
Total Corning Incorporated shareholders’ equity
|
21,078
|
19,375
|
|||
Noncontrolling interests
|
51
|
51
|
|||
Total equity
|
21,129
|
19,426
|
|||
Total Liabilities and Equity
|
$
|
27,848
|
$
|
25,833
|
Three months ended
December 31,
|
Year ended
December 31,
|
||||||||||
2011
|
2010
|
2011
|
2010
|
||||||||
Cash Flows from Operating Activities:
|
|||||||||||
Net income
|
$
|
491
|
$
|
1,044
|
$
|
2,805
|
$
|
3,558
|
|||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|||||||||||
Depreciation
|
243
|
222
|
942
|
846
|
|||||||
Amortization of purchased intangibles
|
4
|
2
|
15
|
8
|
|||||||
Asbestos litigation charges (credits)
|
9
|
(8)
|
24
|
(49)
|
|||||||
Restructuring, impairment and other credits
|
129
|
(326)
|
129
|
(329)
|
|||||||
Cash received from settlement of insurance claims
|
259
|
66
|
259
|
||||||||
Loss on retirement of debt
|
30
|
||||||||||
Stock compensation charges
|
20
|
15
|
86
|
92
|
|||||||
Earnings of affiliated companies less than (in excess of) dividends received
|
35
|
850
|
(651)
|
(246)
|
|||||||
Deferred tax (benefit) provision
|
(3)
|
83
|
115
|
68
|
|||||||
Restructuring payments
|
(1)
|
(8)
|
(16)
|
(66)
|
|||||||
Credits issued against customer deposits
|
(7)
|
(7)
|
(28)
|
(83)
|
|||||||
Employee benefit payments less than (in excess of) expense
|
27
|
(184)
|
132
|
(265)
|
|||||||
Changes in certain working capital items:
|
|||||||||||
Trade accounts receivable
|
98
|
(100)
|
(84)
|
(162)
|
|||||||
Inventories
|
(31)
|
(13)
|
(201)
|
(160)
|
|||||||
Other current assets
|
29
|
17
|
(20)
|
42
|
|||||||
Accounts payable and other current liabilities, net of restructuring payments
|
80
|
184
|
(27)
|
192
|
|||||||
Other, net
|
34
|
62
|
(98)
|
100
|
|||||||
Net cash provided by operating activities
|
1,157
|
2,092
|
3,189
|
3,835
|
|||||||
Cash Flows from Investing Activities:
|
|||||||||||
Capital expenditures
|
(766)
|
(473)
|
(2,432)
|
(1,007)
|
|||||||
Acquisitions of businesses, net of cash received
|
(67)
|
(63)
|
(215)
|
(63)
|
|||||||
Net proceeds from sale or disposal of assets
|
2
|
1
|
|||||||||
Short-term investments – acquisitions
|
(389)
|
(768)
|
(2,582)
|
(2,768)
|
|||||||
Short-term investments – liquidations
|
745
|
743
|
3,171
|
2,061
|
|||||||
Other, net
|
1
|
1
|
7
|
||||||||
Net cash used in investing activities
|
(476)
|
(560)
|
(2,056)
|
(1,769)
|
|||||||
Cash Flows from Financing Activities:
|
|||||||||||
Net repayments of short-term borrowings and current portion of long-term debt
|
(2)
|
(5)
|
(24)
|
(75)
|
|||||||
Principal payments under capital lease obligations
|
(8)
|
(32)
|
(9)
|
||||||||
Proceeds from issuance of long-term debt, net
|
86
|
120
|
689
|
||||||||
Retirements of long-term debt, net
|
(100)
|
(364)
|
|||||||||
Proceeds from issuance of common stock, net
|
15
|
||||||||||
Proceeds from the exercise of stock options
|
8
|
16
|
90
|
55
|
|||||||
Repurchases of common stock for treasury
|
(780)
|
(780)
|
|||||||||
Dividends paid
|
(117)
|
(78)
|
(354)
|
(313)
|
|||||||
Net cash used in financing activities
|
(805)
|
(175)
|
(980)
|
(2)
|
|||||||
Effect of exchange rates on cash
|
(116)
|
(61)
|
(90)
|
(7)
|
|||||||
Net increase in cash and cash equivalents
|
(240)
|
1,296
|
63
|
2,057
|
|||||||
Cash and cash equivalents at beginning of period
|
4,901
|
3,302
|
4,598
|
2,541
|
|||||||
Cash and cash equivalents at end of period
|
$
|
4,661
|
$
|
4,598
|
$
|
4,661
|
$
|
4,598
|
Display
Technologies
|
Telecom-
munications
|
Environmental
Technologies
|
Specialty
Materials
|
Life
Sciences
|
All
Other
|
Total
|
||||||||||||||
Three months ended
December 31, 2011
|
||||||||||||||||||||
Net sales
|
$
|
780
|
$
|
490
|
$
|
234
|
$
|
238
|
$
|
143
|
$
|
2
|
$
|
1,887
|
||||||
Depreciation (1)
|
$
|
133
|
$
|
32
|
$
|
28
|
$
|
36
|
$
|
9
|
$
|
4
|
$
|
242
|
||||||
Amortization of purchased intangibles
|
$
|
2
|
$
|
2
|
$
|
4
|
||||||||||||||
Research, development and engineering expenses (2)
|
$
|
18
|
$
|
35
|
$
|
23
|
$
|
37
|
$
|
7
|
$
|
30
|
$
|
150
|
||||||
Restructuring, impairment and other charges (3)
|
$
|
(1)
|
$
|
130
|
$
|
129
|
||||||||||||||
Equity in earnings of affiliated companies
|
$
|
192
|
$
|
(1)
|
$
|
(9)
|
$
|
2
|
$
|
184
|
||||||||||
Income tax (provision) benefit
|
$
|
(126)
|
$
|
(11)
|
$
|
(14)
|
$
|
52
|
$
|
(5)
|
$
|
11
|
$
|
(93)
|
||||||
Net income (loss) (5)
|
$
|
492
|
$
|
26
|
$
|
28
|
$
|
(105)
|
$
|
10
|
$
|
(26)
|
$
|
425
|
||||||
Three months ended
December 31, 2010
|
||||||||||||||||||||
Net sales
|
$
|
750
|
$
|
443
|
$
|
232
|
$
|
197
|
$
|
140
|
$
|
3
|
$
|
1,765
|
||||||
Depreciation (1)
|
$
|
127
|
$
|
29
|
$
|
28
|
$
|
29
|
$
|
8
|
$
|
3
|
$
|
224
|
||||||
Amortization of purchased intangibles
|
$
|
2
|
$
|
2
|
||||||||||||||||
Research, development and engineering expenses (2)
|
$
|
24
|
$
|
31
|
$
|
26
|
$
|
26
|
$
|
3
|
$
|
34
|
$
|
144
|
||||||
Restructuring, impairment and other credits (3)
|
$
|
(324)
|
$
|
(2)
|
$
|
(326)
|
||||||||||||||
Equity in earnings of affiliated companies (4)
|
$
|
369
|
$
|
2
|
$
|
13
|
$
|
384
|
||||||||||||
Income tax (provision) benefit
|
$
|
(227)
|
$
|
(8)
|
$
|
(8)
|
$
|
(1)
|
$
|
(6)
|
$
|
16
|
$
|
(234)
|
||||||
Net income (loss) (5)
|
$
|
886
|
$
|
19
|
$
|
16
|
$
|
(3)
|
$
|
12
|
$
|
(29)
|
$
|
901
|
||||||
Year ended
December 30, 2011
|
||||||||||||||||||||
Net sales
|
$
|
3,145
|
$
|
2,072
|
$
|
998
|
$
|
1,074
|
$
|
595
|
$
|
6
|
$
|
7,890
|
||||||
Depreciation (1)
|
$
|
511
|
$
|
123
|
$
|
107
|
$
|
156
|
$
|
34
|
$
|
12
|
$
|
943
|
||||||
Amortization of purchased intangibles
|
$
|
7
|
$
|
1
|
$
|
7
|
$
|
15
|
||||||||||||
Research, development and engineering expenses (2)
|
$
|
91
|
$
|
125
|
$
|
96
|
$
|
137
|
$
|
19
|
$
|
98
|
$
|
566
|
||||||
Restructuring, impairment and other charges (3)
|
$
|
(1)
|
$
|
130
|
$
|
129
|
||||||||||||||
Equity in earnings of affiliated
companies
|
$
|
1,027
|
$
|
3
|
$
|
1
|
$
|
4
|
$
|
15
|
$
|
1,050
|
||||||||
Income tax (provision) benefit
|
$
|
(501)
|
$
|
(82)
|
$
|
(58)
|
$
|
24
|
$
|
(29)
|
$
|
39
|
$
|
(607)
|
||||||
Net income (loss) (5)
|
$
|
2,349
|
$
|
195
|
$
|
121
|
$
|
(36)
|
$
|
61
|
$
|
(78)
|
$
|
2,612
|
||||||
Year ended
December 30, 2010
|
||||||||||||||||||||
Net sales
|
$
|
3,011
|
$
|
1,712
|
$
|
816
|
$
|
578
|
$
|
508
|
$
|
7
|
$
|
6,632
|
||||||
Depreciation (1)
|
$
|
513
|
$
|
118
|
$
|
105
|
$
|
72
|
$
|
32
|
$
|
12
|
$
|
852
|
||||||
Amortization of purchased intangibles
|
$
|
1
|
$
|
7
|
8
|
|||||||||||||||
Research, development and engineering expenses (2)
|
$
|
90
|
$
|
115
|
$
|
96
|
$
|
87
|
$
|
16
|
$
|
114
|
$
|
518
|
||||||
Restructuring, impairment and other credits (3)
|
$
|
(324)
|
$
|
(3)
|
$
|
(2)
|
$
|
(329)
|
||||||||||||
Equity in earnings of affiliated companies (4)
|
$
|
1,452
|
$
|
3
|
$
|
5
|
$
|
45
|
$
|
1,505
|
||||||||||
Income tax (provision) benefit
|
$
|
(618)
|
$
|
(46)
|
$
|
(20)
|
$
|
13
|
$
|
(30)
|
$
|
50
|
$
|
(651)
|
||||||
Net income (loss) (5)
|
$
|
2,993
|
$
|
98
|
$
|
43
|
$
|
(32)
|
$
|
60
|
$
|
(75)
|
$
|
3,087
|
(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)
|
In the three months and the year ended December 31, 2011, restructuring, impairment and other charges includes $130 million impairment charge in the Specialty Materials segment related to certain long-lived assets. In the three months and year ended December 31, 2010, restructuring, impairment and other credits includes $324 million on the settlement of business interruption and property damage insurance claims in the Display Technologies segment resulting from earthquake activity near the Shizuoka, Japan facility and a power disruption at the Taichung, Taiwan facility in 2009.
|
(4)
|
In the three months and year ended December 31, 2010, equity in earnings of affiliated companies includes a $61 million credit in the Display Technologies segment for our share of a revised Samsung Corning Precision tax holiday calculation agreed to by the Korean National Tax service.
|
(5)
|
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.
|
Three months ended
December 31,
|
Year ended
December 31,
|
||||||||||
2011
|
2010
|
2011
|
2010
|
||||||||
Net income of reportable segments
|
$
|
451
|
$
|
930
|
$
|
2,690
|
$
|
3,162
|
|||
Non-reportable segments
|
(26)
|
(29)
|
(78)
|
(75)
|
|||||||
Unallocated amounts:
|
|||||||||||
Net financing costs (1)
|
(44)
|
(46)
|
(190)
|
(183)
|
|||||||
Stock-based compensation expense
|
(20)
|
(15)
|
(86)
|
(92)
|
|||||||
Exploratory research
|
(20)
|
(15)
|
(79)
|
(59)
|
|||||||
Corporate contributions
|
(10)
|
(7)
|
(48)
|
(33)
|
|||||||
Equity in earnings of affiliated companies, net of impairments (2)
|
137
|
127
|
421
|
453
|
|||||||
Asbestos settlement (3)
|
(9)
|
8
|
(24)
|
49
|
|||||||
Other corporate items (4)
|
32
|
91
|
199
|
336
|
|||||||
Net income
|
$
|
491
|
$
|
1,044
|
$
|
2,805
|
$
|
3,558
|
(1)
|
Net financing costs include interest income, interest expense, and interest costs and investment gains and losses associated with benefit plans.
|
(2)
|
Equity in earnings of affiliated companies, net of impairments, is primarily equity in earnings of Dow Corning Corporation which includes the following items:
|
·
|
In the three months and year ended December 31, 2011, Corning recorded an $89 million credit for our share of Dow Corning Corporation’s settlement of a dispute related to long term supply agreements.
|
·
|
In the three months and year ended December 31, 2010, Corning recorded a $26 million credit for our share of a valuation allowance on foreign deferred tax assets. Corning also recorded a $16 million credit for our share of excess foreign tax credits from foreign dividends of Dow Corning Corporation.
|
·
|
In the year ended December 31, 2010, a $21 million credit for our share of U.S. advanced energy manufacturing tax credits.
|
(3)
|
In the three months and year ended December 31, 2011, Corning recorded charges of $9 million and $24 million, respectively, to adjust the asbestos liability for the change in value of certain components of the Modified PCC Plan. In the three months and year ended December 31, 2010, Corning recorded a net credit of $8 million and a net credit of $49 million, respectively, to adjust the asbestos liability for the change in value of certain components of the modified PCC Plan.
|
(4)
|
Other corporate items include the tax impact of the unallocated amounts and the following significant items:
|
·
|
In the year ended December 31, 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 year ended December 31, 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.
|
1.
|
Contingent Liability
|
2.
|
Restructuring, Impairment, and Other Charges (Credits)
|
3.
|
Asbestos Litigation
|
4.
|
Equity in Earnings of Affiliated Companies
|
5.
|
Provision for Income Taxes
|
6.
|
Weighted Average Shares Outstanding
|
Three months ended
December 31,
|
Year ended
December 31,
|
||||||
2011
|
2010
|
2011
|
2010
|
||||
Basic
|
1,546
|
1,560
|
1,562
|
1,558
|
|||
Diluted
|
1,564
|
1,584
|
1,583
|
1,581
|
|||
Diluted used for non-GAAP measures
|
1,564
|
1,584
|
1,583
|
1,581
|
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
|
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 fourth 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
|
$
|
0.33
|
$
|
606
|
$
|
513
|
||
Special items:
|
||||||||
Contingent liability (a)
|
-
|
5
|
5
|
|||||
Restructuring, impairment, and other credits (b)
|
(0.05)
|
(130)
|
(83)
|
|||||
Asbestos settlement (c)
|
-
|
(9)
|
(5)
|
|||||
Equity in earnings of affiliated companies (d)
|
0.04
|
80
|
74
|
|||||
Provision for income taxes (e)
|
(0.01)
|
-
|
(13)
|
|||||
Total EPS and net income
|
$
|
0.31
|
$
|
552
|
$
|
491
|
(a)
|
In the fourth quarter of 2011, Corning recognized a credit of $5 million resulting from a reduction in a contingent liability associated with an acquisition recorded in the first quarter of 2011.
|
(b)
|
In the fourth quarter of 2011, Corning recorded a $130 million ($83 million after-tax) asset impairment charge for certain long-lived assets in our Specialty Materials segment.
|
(c)
|
In the fourth quarter of 2011, Corning recorded a charge of $9 million ($5 million after-tax) to adjust the asbestos liability for the change in value of the components of the modified PCC Plan.
|
(d)
|
In the fourth quarter of 2011, equity in earnings of affiliated companies included a $80 million ($74 million after-tax) credit for Corning’s share of the future portion of Dow Corning Corporation’s settlement of a dispute related to long term supply agreements.
|
(e)
|
In the fourth quarter of 2011, Corning recorded a $13 million net tax provision related to the adjustment of deferred taxes as a result of enacted tax rate reductions primarily in Japan.
|
|
Corning’s net income and earnings per share (EPS) excluding special items for the fourth 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
|
$
|
0.46
|
$
|
754
|
$
|
733
|
||
Special items:
|
||||||||
Insurance settlement (a)
|
0.13
|
324
|
206
|
|||||
Asbestos settlement (b)
|
-
|
8
|
5
|
|||||
Equity in earnings of affiliated companies (c)
|
0.07
|
103
|
100
|
|||||
Total EPS and net income
|
$
|
0.66
|
$
|
1,189
|
$
|
1,044
|
(a)
|
In the fourth quarter of 2010, Corning recorded $324 million ($206 million after-tax) on the settlement of business interruption and property damage insurance claims in the Display Technologies segment resulting from earthquake activity near the Shizuoka, Japan facility and a power disruption at the Taichung, Taiwan facility in 2009.
|
(b)
|
In the fourth quarter of 2010, Corning recorded a net credit of $8 million ($5 million after-tax) to adjust the asbestos liability for the change in value of the components of the modified PCC Plan.
|
(c)
|
In the fourth quarter of 2010, equity in earnings of affiliated companies included a credit of $26 million ($24 million after-tax) for our share of a release of valuation allowance on foreign deferred tax assets, a $16 million ($15 million after-tax) credit for our share of excess foreign tax credits from foreign dividends and a $61 million credit for our share of a revised Samsung Corning Precision tax holiday calculation agreed to by the Korean National Tax Service.
|
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 year ended December 31, 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
|
$
|
1.76
|
$
|
3,260
|
$
|
2,789
|
||
Special items:
|
||||||||
Contingent liability (a)
|
0.02
|
27
|
27
|
|||||
Restructuring, impairment, and other credits (b)
|
(0.05)
|
(130)
|
(83)
|
|||||
Asbestos settlement (c)
|
(0.01)
|
(24)
|
(15)
|
|||||
Equity in earnings of affiliated companies (d)
|
0.04
|
80
|
74
|
|||||
Provision for income taxes (e)
|
0.01
|
-
|
13
|
|||||
Total EPS and net income
|
$
|
1.77
|
$
|
3,213
|
$
|
2,805
|
(a)
|
In 2011, Corning recognized a credit of $27 million resulting from a reduction to a contingent liability associated with an acquisition recorded in the first quarter of 2011.
|
(b)
|
In 2011, Corning recorded a $130 million ($83 million after-tax) asset impairment charge for certain long-lived assets in our Specialty Materials segment.
|
(c)
|
In 2011, Corning recorded a charge of $24 million ($15 million after-tax) to adjust the asbestos liability for the change in value of the components of the Modified PCC Plan.
|
(d)
|
In 2011, equity in earnings of affiliated companies included an $80 million credit ($74 million after-tax) for Corning’s share of the future portion of Dow Corning Corporation’s settlement of a dispute related to long term supply agreements.
|
(e)
|
In 2011, Corning recorded a $26 million net tax benefit related to prior year foreign tax credits and other tax adjustments. Also in 2011, Corning recorded a $13 million net tax provision related to the adjustment of deferred taxes as a result of enacted tax rate reductions primarily in Japan.
|
Corning’s net income and earnings per share (EPS) excluding special items for the year ended December 31, 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
|
$
|
2.07
|
$
|
3,376
|
$
|
3,276
|
||
Special items:
|
||||||||
Restructuring, impairment and other charges (a)
|
-
|
2
|
1
|
|||||
Insurance settlement (b)
|
0.13
|
324
|
206
|
|||||
Asbestos settlement (c)
|
0.02
|
49
|
30
|
|||||
Equity in earnings of affiliated companies (d)
|
0.08
|
124
|
120
|
|||||
Loss on repurchase of debt (e)
|
(0.01)
|
(30)
|
(19)
|
|||||
Provision for income taxes (f)
|
(0.04)
|
-
|
(56)
|
|||||
Total EPS and net income
|
$
|
2.25
|
$
|
3,845
|
$
|
3,558
|
(a)
|
In 2010, Corning recorded a credit of $2 million ($1 million after-tax) for adjustments to restructuring reserves.
|
(b)
|
In 2010, Corning recorded $324 million ($206 million after-tax) on the settlement of business interruption and property damage insurance claims in the Display Technologies segment resulting from earthquake activity near the Shizuoka, Japan facility and a power disruption at the Taichung, Taiwan facility in 2009.
|
(c)
|
In 2010, Corning recorded a net credit of $49 million ($30 million after-tax) to adjust the asbestos liability for change in value of the components of the modified PCC Plan.
|
(d)
|
In 2010, equity in earnings of affiliated companies included a credit of $21 million ($20 million after-tax) primarily for Corning’s share of advanced energy manufacturing tax credits at Dow Corning Corporation. Also, included is a credit of $26 million ($24 million after-tax) for our share of a release of valuation allowance on foreign deferred tax assets, a $16 million ($15 million after-tax) credit for our share of excess foreign tax credits from foreign dividends at Dow Corning Corporation and a $61 million credit for our share of a revised Samsung Corning Precision tax holiday calculation agreed to by the Korean National Tax Service.
|
(e)
|
In 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.
|
(f)
|
In 2010, Corning recorded a $56 million tax charge from the reversal of the deferred tax asset associated with a Medicare subsidy.
|
Corning’s net income excluding special items 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.
|
Total
|
Telecommunications
|
Environmental Technologies
|
Specialty Materials
|
Life Sciences
|
|||||||||||||||||||||||||
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
|||||||||||||||
Net income, excluding special items
|
$397
|
$168
|
136%
|
$168
|
$98
|
71%
|
$121
|
$43
|
181%
|
$47
|
$(33)
|
*
|
$61
|
$60
|
2%
|
||||||||||||||
Contingent liability (a)
|
27
|
27
|
|||||||||||||||||||||||||||
Restructuring, impairment, and other credits (b)
|
(83)
|
1
|
(83)
|
1
|
|||||||||||||||||||||||||
Net income
|
$341
|
$169
|
102%
|
$195
|
$98
|
99%
|
$121
|
$43
|
181%
|
$(36)
|
$(32)
|
13%
|
$61
|
$60
|
2%
|
(a)
|
In 2011, Corning recognized a credit of $27 million resulting from a reduction to a contingent liability associated with an acquisition recorded in the first quarter of 2011.
|
(b)
|
In 2011, Corning recorded a $83 million, net of tax, asset impairment charge for certain long-lived assets in our Specialty Materials segment. In 2010, Corning recorded a credit of $1 million, net of tax, for adjustments to restructuring reserves.
|
Corning’s comment, “We set new records for … operating income” includes 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 operating income 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.
|
2011
|
2010
|
||||
Operating income, excluding special items
|
$
|
1,821
|
$
|
1,426
|
|
Special items:
|
|||||
Contingent liability (a)
|
27
|
||||
Restructuring, impairment, and other credits (b)
|
(130)
|
2
|
|||
Insurance settlement (c)
|
324
|
||||
Asbestos settlement (d)
|
(24)
|
49
|
|||
Operating income
|
$
|
1,694
|
$
|
1,801
|
(a)
|
In 2011, Corning recognized a credit of $27 million resulting from a reduction to a contingent liability associated with an acquisition recorded in the first quarter of 2011.
|
(b)
|
In 2011, Corning recorded a $130 million asset impairment charge for certain long-lived assets in our Specialty Materials segment. In 2010, Corning recorded a credit of $2 million for adjustments to restructuring reserves.
|
(c)
|
In 2010, Corning recorded $324 million on the settlement of business interruption and property damage insurance claims in the Display Technologies segment resulting from earthquake activity near the Shizuoka, Japan facility and a power disruption at the Taichung, Taiwan facility in 2009.
|
(d)
|
In 2011, Corning recorded a charge of $24 million to adjust the asbestos liability for the change in value of the components of the Modified PCC Plan. In 2010, Corning recorded a net credit of $49 million to adjust the asbestos liability for change in value of the components of the modified PCC Plan.
|
Corning’s free cash flow financial measure for the three months and year ended December 31, 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
December 31, 2011
|
Year ended
December 31, 2011
|
||||
Cash flows from operating activities
|
$
|
1,157
|
$
|
3,189
|
|
Less: Cash flows from investing activities
|
(476)
|
(2,056)
|
|||
Plus: Short-term investments – acquisitions
|
389
|
2,582
|
|||
Less: Short-term investments – liquidations
|
(745)
|
(3,171)
|
|||
Free cash flow
|
$
|
325
|
$
|
544
|
Corning’s comment, “The Company generated positive free cash flow for the eighth consecutive year.” includes 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.
|
Year
ended
Dec. 31,
2004
|
Year
ended
Dec. 31,
2005
|
Year
ended
Dec. 31,
2006
|
Year
ended
Dec. 31,
2007
|
Year
ended
Dec. 31,
2008
|
Year
ended
Dec. 31,
2009
|
Year
ended
Dec. 31,
2010
|
Year
ended
Dec. 31,
2011
|
||||||||||||||||
Cash flows from operating activities
|
$
|
1,009
|
$
|
1,939
|
$
|
1,803
|
$
|
2,077
|
$
|
2,128
|
$
|
2,077
|
$
|
3,835
|
$
|
3,189
|
|||||||
Less: Cash flows from investing activities
|
(922)
|
(1,712)
|
(2,181)
|
(561)
|
(1,699)
|
(1,370)
|
(1,769)
|
(2,056)
|
|||||||||||||||
Plus: Short-term investments – acquisitions
|
1,685
|
1,668
|
2,894
|
2,152
|
1,865
|
1,372
|
2,768
|
2,582
|
|||||||||||||||
Less: Short-term investments – liquidations
|
(1,389)
|
(1,452)
|
(1,976)
|
(2,862)
|
(2,083)
|
(1,281)
|
(2,061)
|
(3,171)
|
|||||||||||||||
Free cash flow
|
$
|
383
|
$
|
443
|
$
|
540
|
$
|
806
|
$
|
211
|
$
|
798
|
$
|
2,773
|
$
|
544
|