Date of Report: (Date of earliest event reported)
|
July 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: July 25, 2012
|
By
|
/s/ R. TONY TRIPENY
|
R. Tony Tripeny
|
||
Senior Vice President & Corporate Controller
|
·
|
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.
|
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%)
|
Media Relations Contact:
|
Investor Relations Contact:
|
Daniel F. Collins
|
Ann S. Nicholson
|
(607) 974-4197
|
(607) 974-6716
|
collinsdf@corning.com
|
nicholsoas@corning.com
|
Three months
ended June 30,
|
Six months
ended 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 incomes 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
|
Three months
ended June 30,
|
Six months
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
|
June 30,
2012
|
December 31,
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
|
Three months ended
June 30,
|
Six months ended
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
|
Display
Technologies
|
Telecom-
munications
|
Environmental
Technologies
|
Specialty
Materials
|
Life
Sciences
|
All
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.
|
Three months ended
June 30,
|
Six months ended
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 settlement (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.
|
1.
|
Asbestos Litigation
|
2.
|
Weighted Average Shares Outstanding
|
Three months ended
June 30,
|
Three months
ended
March 31, 2012
|
||||
2012
|
2011
|
||||
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
|
2012
|
||||||||||||||
March 31
|
June 30
|
Six
Months
Ended
June 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
|
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
Share
|
Income Before
Income Taxes
|
Net
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’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
Share
|
Income Before
Income Taxes
|
Net
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 Amended PCC Plan.
|
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 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.
|
Q2 2012
|
Q1 2012
|
Sequential
% 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’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 months
ended
June 30,
2012
|
Six months
ended
June 30,
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
|