Date of Report: (Date of earliest event reported)
|
January 26, 2016
|
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 26, 2016
|
By
|
/s/ Edward Schlesinger
|
Edward Schlesinger
|
||
Vice President and Corporate Controller
|
·
|
Business segment performance consistent with the company’s expectations;
|
·
|
Moderate LCD glass price declines;
|
·
|
Significant progress on the company’s new strategy and capital allocation framework; and
|
·
|
Substantial progress on extending Japanese yen hedges.
|
·
|
Generated significant cash flow in the quarter, resulting in $3.2 billion in adjusted operating cash flow for the year, despite continuing global economic weakness.
|
·
|
Attained a moderate LCD glass price decline in the quarter, achieving the lowest sequential decline of the year. For 2015, the aggregate LCD glass price decline was the lowest in five years.
|
·
|
Initiated a $1.25 billion accelerated share repurchase program (completed in January 2016), supporting the company’s commitment to return more than $10 billion to shareholders.
|
·
|
Announced a realignment of the company’s interest in Dow Corning, a transaction that is expected to be accretive to the company’s earnings per share and essentially tax-free. As a result of the realignment, a newly formed entity, which will become a wholly owned subsidiary of the company, will hold approximately 40% ownership in Hemlock Semiconductor Group and $4.8 billion in cash. The transaction unlocks the value of Corning’s interest in Dow Corning’s silicones business, which today falls outside Corning’s three core technologies, four manufacturing and engineering platforms, and five market-access platforms.
|
·
|
Established a long-term supply agreement with a low-cash investment in a Gen 10.5 glass manufacturing facility adjacent to BOE Technology Group, Ltd., the largest panel manufacturer in China. The existing long-term supply agreement for Gen 8.5 and smaller panels was extended through 2025.
|
·
|
Announced that Ford’s GT supercar is using Corning® Gorilla® Glass for Automotive in its windshield and in two other windows – an example of Corning leveraging its market access with leading automakers to pursue disruptive opportunities while utilizing existing assets.
|
·
|
Display Technologies: Core sales in the fourth quarter were $903 million, compared with $1,055 million in the same period a year ago. Sequential LCD glass volume declined slightly, as expected. LCD glass prices continued to moderate as expected and declined less than in the third quarter. Core earnings in the fourth quarter were $234 million, compared with $356 million in the same period last year.
|
·
|
Optical Communications: Sales in the fourth quarter were $736 million, compared with $676 million in a year ago. Core earnings were $47 million, compared with $48 million in the fourth quarter 2014.
|
·
|
Environmental Technologies: Sales in the fourth quarter were $254 million compared with $250 million last year. Core earnings were $29 million, compared with $36 million in the comparable period a year ago.
|
·
|
Specialty Materials: Sales in the fourth quarter were $275 million, compared with $319 million a year ago. Core earnings for the quarter were $44 million, compared with $30 million in the fourth quarter 2014.
|
·
|
Life Sciences: Sales in the fourth quarter were $202 million, compared with $215 million in the previous year’s quarter. Core earnings were $12 million, compared with $18 million in the comparable 2014 period.
|
·
|
Core equity earnings from Dow Corning Corporation were $78 million, compared with $111 million in the fourth quarter 2014.
|
·
|
Display Technologies: In the first quarter, Corning anticipates that panel maker utilization will continue to decline, which will reduce inventory levels in the supply chain. As a result, the overall glass market and Corning’s LCD glass volume are expected to decline by a mid-to-high single-digit percentage sequentially. Corning’s LCD glass price decline is expected to be moderate, achieving what will be one of the lowest first-quarter declines in five years.
|
·
|
Optical Communications: Corning expects first-quarter sales to increase in the low-to-mid-single digit percentage range over its sales in the comparable period a year ago. For the full year, the company expects sales to increase by a mid-single-digit percentage and exceed the goal of two times the growth rate of industry capital expenditures.
|
·
|
Specialty Materials: First-quarter sales are expected to decline year over year by a mid-teen percentage. For 2016, the company estimates annual sales will grow by a low-teen percentage. The variable timing of mobile device product launches drives Corning® Gorilla® Glass demand and is expected to cause significant swings in quarterly results.
|
·
|
Environmental Technologies: The North American heavy-duty truck market is down after several years of robust growth. As a result, first-quarter sales are expected to decline by approximately 10%, compared with the same period last year. The full-year outlook is for sales to be down by a low single-digit percentage.
|
·
|
Life Sciences: First-quarter sales are expected to increase by a low single-digit percentage, compared with last year. For the full year, sales are anticipated to grow faster than the market, which is expected to be up by a low single-digit percentage.
|
·
|
Core equity earnings from Dow Corning are expected to be approximately $45 million.
|
Three months ended
December 31,
|
Year ended
December 31,
|
||||||||||
2015
|
2014
|
2015
|
2014
|
||||||||
Net sales
|
$
|
2,231
|
$
|
2,404
|
$
|
9,111
|
$
|
9,715
|
|||
Cost of sales
|
1,374
|
1,408
|
5,458
|
5,663
|
|||||||
Gross margin
|
857
|
996
|
3,653
|
4,052
|
|||||||
Operating expenses:
|
|||||||||||
Selling, general and administrative expenses
|
557
|
242
|
1,523
|
1,211
|
|||||||
Research, development and engineering expenses
|
208
|
210
|
769
|
815
|
|||||||
Amortization of purchased intangibles
|
14
|
8
|
54
|
33
|
|||||||
Restructuring, impairment and other charges
|
20
|
71
|
|||||||||
Asbestos litigation credit
|
(9)
|
(20)
|
(15)
|
(9)
|
|||||||
Operating income
|
87
|
536
|
1,322
|
1,931
|
|||||||
Equity in earnings of affiliated companies
|
104
|
23
|
299
|
266
|
|||||||
Interest income
|
5
|
5
|
21
|
26
|
|||||||
Interest expense
|
(39)
|
(32)
|
(140)
|
(123)
|
|||||||
Transaction-related gain, net
|
74
|
||||||||||
Foreign currency hedge gain, net
|
33
|
789
|
85
|
1,411
|
|||||||
Other (expense) income, net
|
(21)
|
16
|
(101)
|
(17)
|
|||||||
Income before income taxes
|
169
|
1,337
|
1,486
|
3,568
|
|||||||
Benefit (provision) for income taxes
|
55
|
(349)
|
(147)
|
(1,096)
|
|||||||
Net income attributable to Corning Incorporated
|
$
|
224
|
$
|
988
|
$
|
1,339
|
$
|
2,472
|
|||
Earnings per common share attributable to Corning Incorporated:
|
|||||||||||
Basic
|
$
|
0.17
|
$
|
0.76
|
$
|
1.02
|
$
|
1.82
|
|||
Diluted
|
$
|
0.17
|
$
|
0.70
|
$
|
1.00
|
$
|
1.73
|
|||
Dividends declared per common share (1)
|
$
|
0.12
|
$
|
0.22
|
$
|
0.36
|
$
|
0.52
|
(1)
|
The first quarter 2015 dividend was declared on December 3, 2014.
|
December 31,
|
|||||
2015
|
2014
|
||||
Assets
|
|||||
Current assets:
|
|||||
Cash and cash equivalents
|
$
|
4,500
|
$
|
5,309
|
|
Short-term investments, at fair value
|
100
|
759
|
|||
Total cash, cash equivalents and short-term investments
|
4,600
|
6,068
|
|||
Trade accounts receivable, net of doubtful accounts and allowances
|
1,372
|
1,501
|
|||
Inventories
|
1,385
|
1,322
|
|||
Deferred income taxes
|
248
|
||||
Other current assets
|
912
|
1,099
|
|||
Total current assets
|
8,269
|
10,238
|
|||
Investments
|
1,975
|
1,801
|
|||
Property, plant and equipment net of accumulated depreciation
|
12,648
|
12,766
|
|||
Goodwill, net
|
1,380
|
1,150
|
|||
Other intangible assets, net
|
706
|
497
|
|||
Deferred income taxes
|
2,056
|
1,889
|
|||
Other assets
|
1,513
|
1,722
|
|||
Total Assets
|
$
|
28,547
|
$
|
30,063
|
|
Liabilities and Equity
|
|||||
Current liabilities:
|
|||||
Current portion of long-term debt and short-term borrowings
|
$
|
572
|
$
|
36
|
|
Accounts payable
|
934
|
997
|
|||
Other accrued liabilities
|
1,308
|
1,291
|
|||
Total current liabilities
|
2,814
|
2,324
|
|||
Long-term debt
|
3,910
|
3,227
|
|||
Postretirement benefits other than pensions
|
718
|
814
|
|||
Other liabilities
|
2,242
|
2,046
|
|||
Total liabilities
|
9,684
|
8,411
|
|||
Commitments and contingencies
|
|||||
Shareholders’ equity:
|
|||||
Convertible preferred stock, Series A – Par value $100 per share;
Shares authorized 3,100; Shares issued: 2,300
|
2,300
|
2,300
|
|||
Common stock – Par value $0.50 per share; Shares authorized: 3.8 billion; Shares issued: 1,681 million and 1,672 million
|
840
|
836
|
|||
Additional paid-in capital – common stock
|
13,352
|
13,456
|
|||
Retained earnings
|
13,832
|
13,021
|
|||
Treasury stock, at cost; shares held: 551 million and 398 million
|
(9,725)
|
(6,727)
|
|||
Accumulated other comprehensive loss
|
(1,811)
|
(1,307)
|
|||
Total Corning Incorporated shareholders’ equity
|
18,788
|
21,579
|
|||
Noncontrolling interests
|
75
|
73
|
|||
Total equity
|
18,863
|
21,652
|
|||
Total Liabilities and Equity
|
$
|
28,547
|
$
|
30,063
|
Three months ended
December 31,
|
Year ended
December 31,
|
||||||||||
2015
|
2014
|
2015
|
2014
|
||||||||
Cash Flows from Operating Activities:
|
|||||||||||
Net income
|
$
|
224
|
$
|
988
|
$
|
1,339
|
$
|
2,472
|
|||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|||||||||||
Depreciation
|
288
|
290
|
1,130
|
1,167
|
|||||||
Amortization of purchased intangibles
|
14
|
8
|
54
|
33
|
|||||||
Restructuring, impairment and other charges
|
20
|
71
|
|||||||||
Stock compensation charges
|
10
|
11
|
46
|
58
|
|||||||
Equity in earnings of affiliated companies
|
(104)
|
(23)
|
(299)
|
(266)
|
|||||||
Dividends received from affiliated companies
|
31
|
143
|
1,704
|
||||||||
Deferred tax provision
|
(133)
|
198
|
54
|
612
|
|||||||
Restructuring payments
|
(2)
|
(9)
|
(40)
|
(39)
|
|||||||
Customer deposits
|
197
|
197
|
|||||||||
Employee benefit payments in excess of expense
|
(57)
|
(47)
|
(52)
|
(52)
|
|||||||
Gains on foreign currency hedges related to translated earnings
|
(38)
|
(769)
|
(80)
|
(1,369)
|
|||||||
Unrealized translation (gains) losses on transactions
|
(35)
|
192
|
268
|
431
|
|||||||
Contingent consideration fair value adjustment
|
(13)
|
(172)
|
(13)
|
(249)
|
|||||||
Changes in certain working capital items:
|
|||||||||||
Trade accounts receivable
|
110
|
47
|
162
|
(16)
|
|||||||
Inventories
|
(17)
|
(25)
|
(77)
|
2
|
|||||||
Other current assets
|
147
|
(33)
|
(57)
|
(16)
|
|||||||
Accounts payable and other current liabilities
|
148
|
336
|
(146)
|
(3)
|
|||||||
Other, net
|
225
|
69
|
180
|
169
|
|||||||
Net cash provided by operating activities
|
964
|
1,112
|
2,809
|
4,709
|
|||||||
Cash Flows from Investing Activities:
|
|||||||||||
Capital expenditures
|
(311)
|
(336)
|
(1,250)
|
(1,076)
|
|||||||
Acquisitions of businesses, net of cash (paid) received
|
(201)
|
(732)
|
66
|
||||||||
Proceeds from sale of a business
|
12
|
12
|
|||||||||
Investments in unconsolidated entities
|
(33)
|
(109)
|
|||||||||
Proceeds from loan repayments from unconsolidated entities
|
8
|
6
|
23
|
||||||||
Short-term investments – acquisitions
|
(110)
|
(228)
|
(969)
|
(1,398)
|
|||||||
Short-term investments – liquidations
|
583
|
213
|
1,629
|
1,167
|
|||||||
Realized gains on foreign currency hedges related to translated earnings
|
164
|
135
|
653
|
361
|
|||||||
Other, net
|
(1)
|
(1)
|
4
|
||||||||
Net cash provided by (used in) investing activities
|
137
|
(209)
|
(685)
|
(962)
|
|||||||
Cash Flows from Financing Activities:
|
|||||||||||
Net repayments of short-term borrowings and current portion of long-term debt
|
(12)
|
(2)
|
(12)
|
(52)
|
|||||||
Principal payments under capital lease obligations
|
(5)
|
(5)
|
(6)
|
(6)
|
|||||||
Proceeds from issuance of short-term debt, net
|
1
|
7
|
3
|
29
|
|||||||
Proceeds (payments) from issuance of commercial paper
|
481
|
(424)
|
481
|
||||||||
Proceeds from issuance of long-term debt
|
745
|
||||||||||
Proceeds from issuance of preferred stock (1)
|
400
|
||||||||||
Payments from the settlement of interest rate swap agreements
|
(10)
|
||||||||||
Proceeds received for asset financing and related incentives, net
|
1
|
1
|
1
|
1
|
|||||||
Proceeds from the exercise of stock options
|
3
|
18
|
102
|
116
|
|||||||
Repurchases of common stock for treasury
|
(1,323)
|
(183)
|
(3,228)
|
(2,483)
|
|||||||
Dividends paid
|
(160)
|
(152)
|
(679)
|
(591)
|
|||||||
Net cash used in financing activities
|
(1,014)
|
(740)
|
(2,603)
|
(2,586)
|
|||||||
Effect of exchange rates on cash
|
(27)
|
(207)
|
(330)
|
(556)
|
|||||||
Net increase (decrease) in cash and cash equivalents
|
60
|
(44)
|
(809)
|
605
|
|||||||
Cash and cash equivalents at beginning of period
|
4,440
|
5,353
|
5,309
|
4,704
|
|||||||
Cash and cash equivalents at end of period
|
$
|
4,500
|
$
|
5,309
|
$
|
4,500
|
$
|
5,309
|
(1)
|
In the first quarter of 2014, Corning issued 1,900 shares of Preferred Stock to Samsung Display Co., Ltd. in connection with the acquisition of their equity interests in Samsung Corning Precision Materials Co., Ltd. Corning also issued to Samsung Display an additional amount of Preferred Stock at closing, for an issue price of $400 million in cash.
|
Three months ended
December 31,
|
Year ended
December 31,
|
|||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||
Net income attributable to Corning Incorporated
|
$
|
224
|
$
|
988
|
$
|
1,339
|
$
|
2,472
|
||||
Less: Series A convertible preferred stock dividend
|
24
|
24
|
98
|
94
|
||||||||
Net income available to common stockholders – basic
|
200
|
964
|
1,241
|
2,378
|
||||||||
Add: Series A convertible preferred stock dividend
|
24
|
98
|
94
|
|||||||||
Net income available to common stockholders - diluted
|
$
|
200
|
$
|
988
|
$
|
1,339
|
$
|
2,472
|
||||
Weighted-average common shares outstanding - basic
|
1,146
|
1,276
|
1,219
|
1,305
|
||||||||
Effect of dilutive securities:
|
||||||||||||
Stock options and other dilutive securities
|
8
|
11
|
9
|
12
|
||||||||
Series A convertible preferred stock
|
115
|
115
|
110
|
|||||||||
Weighted-average common shares outstanding - diluted
|
1,154
|
1,402
|
1,343
|
1,427
|
||||||||
Basic earnings per common share
|
$
|
0.17
|
$
|
0.76
|
$
|
1.02
|
$
|
1.82
|
||||
Diluted earnings per common share
|
$
|
0.17
|
$
|
0.70
|
$
|
1.00
|
$
|
1.73
|
Three months ended
December 31,
|
Year ended
December 31,
|
|||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||
Core earnings attributable to Corning Incorporated
|
$
|
429
|
$
|
587
|
$
|
1,882
|
$
|
2,023
|
||||
Less: Series A convertible preferred stock dividend
|
24
|
24
|
98
|
94
|
||||||||
Core earnings available to common stockholders - basic
|
405
|
563
|
1,784
|
1,929
|
||||||||
Add: Series A convertible preferred stock dividend
|
24
|
24
|
98
|
94
|
||||||||
Core earnings available to common stockholders - diluted
|
$
|
429
|
$
|
587
|
$
|
1,882
|
$
|
2,023
|
||||
Weighted-average common shares outstanding - basic
|
1,146
|
1,276
|
1,219
|
1,305
|
||||||||
Effect of dilutive securities:
|
||||||||||||
Stock options and other dilutive securities
|
8
|
11
|
9
|
12
|
||||||||
Series A convertible preferred stock
|
115
|
115
|
115
|
110
|
||||||||
Weighted-average common shares outstanding - diluted
|
1,269
|
1,402
|
1,343
|
1,427
|
||||||||
Core basic earnings per common share
|
$
|
0.35
|
$
|
0.44
|
$
|
1.46
|
$
|
1.48
|
||||
Core diluted earnings per common share
|
$
|
0.34
|
$
|
0.42
|
$
|
1.40
|
$
|
1.42
|
(1)
|
Constant-currency adjustments:
|
Constant-yen: Because a significant portion of Display Technologies segment revenues and manufacturing costs are denominated in Japanese yen, management believes it is important to understand the impact on core earnings of translating yen into dollars. Presenting results on a constant-yen basis mitigates the translation impact of the Japanese yen, and allows management to evaluate performance period over period, analyze underlying trends in our businesses, and establish operational goals and forecasts. As of January 1, 2015, we used an internally derived management rate of ¥99, which is closely aligned to our current yen portfolio of foreign currency hedges, and have recast all periods presented based on this rate in order to effectively remove the impact of changes in the Japanese yen.
|
|
Constant-won: Following the acquisition of Samsung Corning Precision Materials and because a significant portion of Corning Precision Materials’ costs are denominated in Korean won, management believes it is important to understand the impact on core earnings from translating won into dollars. Presenting results on a constant-won basis mitigates the translation impact of the Korean won, and allows management to evaluate performance period over period, analyze underlying trends in our businesses, and establish operational goals and forecasts without the variability caused by the fluctuations caused by changes in the rate of this currency. We use an internally derived management rate of 1,100, which is consistent with historical prior period averages of the won.
|
|
(2)
|
Foreign currency hedges related to translated earnings: We have excluded the impact of the gains and losses of our foreign currency hedges related to translated earnings for each period presented.
|
(3)
|
Acquisition-related costs: These expenses include intangible amortization, inventory valuation adjustments and external acquisition-related deal costs.
|
(4)
|
Discrete tax items and other tax-related adjustments: This represents the removal of discrete adjustments attributable to changes in tax law and changes in judgment about the realizability of certain deferred tax assets, as well as other non-operational tax-related adjustments, including the tax effect of transfer pricing out-of-period adjustments in 2014 and 2015.
|
(5)
|
Litigation, regulatory and other legal matters: Includes amounts related to the Pittsburgh Corning Corporation (PCC) asbestos litigation, adjustments to our estimated liability for environmental-related items and other legal matters.
|
(6)
|
Restructuring, impairment and other charges: This amount includes restructuring, impairment and other charges, including goodwill impairment charges and other expenses and disposal costs not classified as restructuring expense.
|
(7)
|
Liquidation of subsidiary: The partial impact of non-restructuring related items due to the decision to liquidate a consolidated subsidiary that is not significant.
|
(8)
|
Equity in earnings of affiliated companies: These adjustments relate to items which do not reflect expected on-going operating results of our affiliated companies, such as restructuring, impairment and other charges and settlements under “take-or-pay” contracts.
|
(9)
|
Impacts from the acquisition of Samsung Corning Precision Materials: Pre-acquisition gains and losses on previously held equity investment and other gains and losses related to the acquisition, including post-combination expenses, fair value adjustments to the indemnity asset related to contingent consideration and the impact of the withholding tax on a dividend from Samsung Corning Precision Materials.
|
(10)
|
Post-combination expenses: Post-combination expenses incurred as a result of an acquisition in the first quarter of 2015.
|
(11)
|
Pension mark-to-market adjustment: Defined benefit pension mark-to-market gains and losses, which arise from changes in actuarial assumptions and the difference between actual and expected returns on plan assets and discount rates.
|
Net
sales
|
Equity
earnings
|
Income
before
income
taxes
|
Net
income
|
Effective
tax (benefit)
rate
|
Per
share
|
|||||||||||
As reported
|
$
|
2,231
|
$
|
104
|
$
|
169
|
$
|
224
|
(32.5)%
|
$
|
0.17
|
|||||
Constant-yen (1)
|
170
|
2
|
148
|
110
|
0.09
|
|||||||||||
Constant-won (1)
|
1
|
(1)
|
(12)
|
(9)
|
(0.01)
|
|||||||||||
Foreign currency hedges related to translated earnings (2)
|
(38)
|
(23)
|
(0.02)
|
|||||||||||||
Acquisition-related costs (3)
|
15
|
11
|
0.01
|
|||||||||||||
Discrete tax items and other tax-related adjustments (4)
|
11
|
0.01
|
||||||||||||||
Litigation, regulatory and other legal matters (5)
|
11
|
7
|
0.01
|
|||||||||||||
Restructuring, impairment and other charges (6)
|
40
|
36
|
0.03
|
|||||||||||||
Equity in earnings of affiliated companies (8)
|
(18)
|
(18)
|
(17)
|
(0.01)
|
||||||||||||
Impacts from the Acquisition of Samsung Corning Precision Materials (9)
|
(24)
|
(21)
|
(0.02)
|
|||||||||||||
Pension mark-to-market adjustment (11)
|
157
|
100
|
0.08
|
|||||||||||||
Core performance measures
|
$
|
2,402
|
$
|
87
|
$
|
448
|
$
|
429
|
4.2%
|
$
|
0.34
|
Net
sales
|
Equity
earnings
|
Income
before
income
taxes
|
Net
income
|
Effective
tax
rate
|
Per
share
|
|||||||||||
As reported
|
$
|
2,404
|
$
|
23
|
$
|
1,337
|
$
|
988
|
26.1%
|
$
|
0.70
|
|||||
Constant-yen (1) *
|
130
|
104
|
75
|
0.06
|
||||||||||||
Constant-won (1)
|
3
|
2
|
||||||||||||||
Foreign currency hedges related to translated earnings (2)
|
(769)
|
(510)
|
(0.36)
|
|||||||||||||
Acquisition-related costs (3)
|
8
|
5
|
||||||||||||||
Discrete tax items and other tax-related adjustments (4)
|
42
|
0.03
|
||||||||||||||
Litigation, regulatory and other legal matters (5)
|
(13)
|
(9)
|
(0.01)
|
|||||||||||||
Restructuring, impairment and other charges (6)
|
23
|
15
|
0.01
|
|||||||||||||
Equity in earnings of affiliated companies (8)
|
93
|
93
|
86
|
0.06
|
||||||||||||
Contingent consideration fair value adjustment (9)
|
(172)
|
(134)
|
(0.10)
|
|||||||||||||
Other items related to the Acquisition of Samsung Corning Precision Materials (9)
|
3
|
3
|
||||||||||||||
Pension mark-to-market adjustment (11)
|
29
|
24
|
0.02
|
|||||||||||||
Core performance measures
|
$
|
2,534
|
$
|
116
|
$
|
646
|
$
|
587
|
9.1%
|
$
|
0.42
|
*
|
In the first quarter of 2015, we changed the yen-to-dollar management rate from ¥93 to ¥99 to closely align with the yen-denominated hedges entered into for the years 2015 through 2017. Prior periods presented have been recast based on the new rate.
|
Net
sales
|
Equity
earnings
|
Income
before
income
taxes
|
Net
income
|
Effective
tax
rate
|
Per
share
|
|||||||||||
As reported
|
$
|
9,111
|
$
|
299
|
$
|
1,486
|
$
|
1,339
|
9.9%
|
$
|
1.00
|
|||||
Constant-yen (1)
|
687
|
6
|
567
|
423
|
0.31
|
|||||||||||
Constant-won (1)
|
2
|
(2)
|
(25)
|
(19)
|
(0.01)
|
|||||||||||
Foreign currency hedges related to translated earnings (2)
|
(80)
|
(48)
|
(0.04)
|
|||||||||||||
Acquisition-related costs (3)
|
55
|
36
|
0.03
|
|||||||||||||
Discrete tax items and other tax-related adjustments (4)
|
36
|
0.03
|
||||||||||||||
Litigation, regulatory and other legal matters (5)
|
5
|
3
|
||||||||||||||
Restructuring, impairment and other charges (6)
|
46
|
42
|
0.03
|
|||||||||||||
Equity in earnings of affiliated companies (8)
|
(34)
|
(34)
|
(33)
|
(0.02)
|
||||||||||||
Impacts from the acquisition of Samsung Corning Precision Materials (9)
|
(20)
|
(18)
|
(0.01)
|
|||||||||||||
Post-combination expenses (10)
|
25
|
16
|
0.01
|
|||||||||||||
Pension mark-to-market adjustment (11)
|
165
|
105
|
0.08
|
|||||||||||||
Core performance measures
|
$
|
9,800
|
$
|
269
|
$
|
2,190
|
$
|
1,882
|
14.1%
|
$
|
1.40
|
Net
sales
|
Equity
earnings
|
Income
before
income
taxes
|
Net
income
|
Effective
tax
rate
|
Per
share
|
|||||||||||
As reported
|
$
|
9,715
|
$
|
266
|
$
|
3,568
|
$
|
2,472
|
30.7%
|
$
|
1.73
|
|||||
Constant-yen (1) *
|
240
|
1
|
197
|
144
|
0.10
|
|||||||||||
Constant-won (1)
|
37
|
26
|
0.02
|
|||||||||||||
Foreign currency hedges related to translated earnings (2)
|
(1,369)
|
(916)
|
(0.64)
|
|||||||||||||
Acquisition-related costs (3)
|
74
|
57
|
0.04
|
|||||||||||||
Discrete tax items and other tax-related adjustments (4)
|
240
|
0.17
|
||||||||||||||
Litigation, regulatory and other legal matters (5)
|
(1)
|
(2)
|
||||||||||||||
Restructuring, impairment and other charges (6)
|
86
|
66
|
0.05
|
|||||||||||||
Liquidation of subsidiary (7)
|
(3)
|
|||||||||||||||
Equity in earnings of affiliated companies (8)
|
43
|
43
|
38
|
0.03
|
||||||||||||
Gain on previously held equity investment (9)
|
(394)
|
(292)
|
(0.20)
|
|||||||||||||
Settlement of pre-existing contract (9)
|
320
|
320
|
0.22
|
|||||||||||||
Contingent consideration fair value adjustment (9)
|
(249)
|
(194)
|
(0.14)
|
|||||||||||||
Post-combination expenses (9)
|
72
|
55
|
0.04
|
|||||||||||||
Impacts from the acquisition of Samsung Corning Precision Materials (9)
|
(9)
|
(12)
|
(0.01)
|
|||||||||||||
Pension mark-to-market adjustment (11)
|
29
|
24
|
0.02
|
|||||||||||||
Core performance measures
|
$
|
9,955
|
$
|
310
|
$
|
2,404
|
$
|
2,023
|
15.8%
|
$
|
1.42
|
*
|
In the first quarter of 2015, we changed the yen-to-dollar management rate from ¥93 to ¥99 to closely align with the yen-denominated hedges entered into for the years 2015 through 2017. Prior periods presented have been recast based on the new rate.
|
Three months ended December 31, 2015
|
Three months ended December 31, 2014
|
||||||||||||||||||||
Gross
Margin
|
Gross
margin
%
|
Selling,
general
and
admin.
expenses
|
Research,
development
and
engineering
expenses
|
Gross
Margin
|
Gross
margin
%
|
Selling,
general
and
admin.
expenses
|
Research,
development
and
engineering
expenses
|
||||||||||||||
As reported
|
$
|
857
|
38%
|
$
|
557
|
$
|
208
|
$
|
996
|
41%
|
$
|
242
|
$
|
210
|
|||||||
Constant-yen (1) *
|
145
|
1
|
1
|
104
|
|||||||||||||||||
Constant-won (1)
|
(10)
|
2
|
|||||||||||||||||||
Acquisition-related costs (3)
|
2
|
1
|
16
|
||||||||||||||||||
Litigation, regulatory and other legal matters (5)
|
(20)
|
(22)
|
|||||||||||||||||||
Restructuring, impairment and other charges (6)
|
11
|
(29)
|
|||||||||||||||||||
Impacts from the acquisition of Samsung Corning Precision Materials (9)
|
(11)
|
13
|
172
|
||||||||||||||||||
Pension mark-to-market adjustment (11)
|
3
|
(153)
|
(1)
|
2
|
(28)
|
(1)
|
|||||||||||||||
Core performance measures
|
$
|
997
|
42%
|
$
|
370
|
$
|
208
|
$
|
1,104
|
44%
|
$
|
380
|
$
|
209
|
*
|
In the first quarter of 2015, we changed the yen-to-dollar management rate from ¥93 to ¥99 to closely align with the yen-denominated hedges entered into for the years 2015 through 2017. Prior periods presented have been recast based on the new rate.
|
Year ended December 31, 2015
|
Year ended December 31, 2014
|
||||||||||||||||||||
Gross
Margin
|
Gross
margin
%
|
Selling,
general
and
admin.
expenses
|
Research,
development
and
engineering
expenses
|
Gross
Margin
|
Gross
margin
%
|
Selling,
general
and
admin.
expenses
|
Research,
development
and
engineering
expenses
|
||||||||||||||
As reported
|
$
|
3,653
|
40%
|
$
|
1,523
|
$
|
769
|
$
|
4,052
|
42%
|
$
|
1,211
|
$
|
815
|
|||||||
Constant-yen (1) *
|
565
|
1
|
197
|
(1)
|
|||||||||||||||||
Constant-won (1)
|
(19)
|
1
|
1
|
28
|
(2)
|
(2)
|
|||||||||||||||
Foreign currency hedges related to translated earnings (2)
|
(4)
|
||||||||||||||||||||
Acquisition-related costs (3)
|
4
|
4
|
30
|
(3)
|
|||||||||||||||||
Litigation, regulatory and other legal matters (5)
|
(18)
|
(22)
|
|||||||||||||||||||
Restructuring, impairment and other charges (6)
|
18
|
(27)
|
25
|
16
|
|||||||||||||||||
Impacts from the acquisition of Samsung Corning Precision Materials (9)
|
(8)
|
13
|
14
|
177
|
|||||||||||||||||
Post-combination expenses (10)
|
(25)
|
||||||||||||||||||||
Pension mark-to-market adjustment (11)
|
3
|
(161)
|
(1)
|
2
|
(28)
|
(1)
|
|||||||||||||||
Core performance measures
|
$
|
4,212
|
43%
|
$
|
1,311
|
$
|
769
|
$
|
4,348
|
44%
|
$
|
1,348
|
$
|
812
|
*
|
In the first quarter of 2015, we changed the yen-to-dollar management rate from ¥93 to ¥99 to closely align with the yen-denominated hedges entered into for the years 2015 through 2017. Prior periods presented have been recast based on the new rate.
|
Three months ended
December 31, 2015
|
Three months ended
December 31, 2014
|
||||||||||
Net
sales
|
Net
income
|
Net
sales
|
Net
income
|
||||||||
As reported
|
$
|
732
|
$
|
243
|
$
|
926
|
$
|
518
|
|||
Constant-yen (1) *
|
170
|
108
|
129
|
77
|
|||||||
Constant-won (1)
|
1
|
(8)
|
2
|
||||||||
Foreign currency hedges related to translated earnings (2)
|
(103)
|
(118)
|
|||||||||
Restructuring, impairment and other charges (6)
|
9
|
||||||||||
Impacts from the acquisition of Samsung Corning Precision Materials (9)
|
(10)
|
(134)
|
|||||||||
Pension mark-to-market adjustment (11)
|
4
|
2
|
|||||||||
Core performance measures
|
$
|
903
|
$
|
234
|
$
|
1,055
|
$
|
356
|
*
|
In the first quarter of 2015, we changed the yen-to-dollar management rate from ¥93 to ¥99 to closely align with the yen-denominated hedges entered into for the years 2015 through 2017. Prior periods presented have been recast based on the new rate.
|
Year ended
December 31, 2015
|
Year ended
December 31, 2014
|
||||||||||
Net
sales
|
Net
income
|
Net
sales
|
Net
income
|
||||||||
As reported
|
$
|
3,086
|
$
|
1,095
|
$
|
3,851
|
$
|
1,396
|
|||
Constant-yen (1) *
|
686
|
419
|
240
|
142
|
|||||||
Constant-won (1)
|
2
|
(17)
|
27
|
||||||||
Foreign currency hedges related to translated earnings (2)
|
(416)
|
(290)
|
|||||||||
Acquisition related costs (3)
|
37
|
||||||||||
Discrete tax items and other tax-related adjustments (4)
|
4
|
||||||||||
Restructuring, impairment and other charges (6)
|
40
|
||||||||||
Equity in earnings of affiliated companies (8)
|
6
|
||||||||||
Impacts from the acquisition of Samsung Corning Precision Materials (9)
|
(10)
|
1
|
(121)
|
||||||||
Pension mark-to-market adjustment (11)
|
4
|
2
|
|||||||||
Core performance measures
|
$
|
3,774
|
$
|
1,075
|
$
|
4,092
|
$
|
1,243
|
*
|
In the first quarter of 2015, we changed the yen-to-dollar management rate from ¥93 to ¥99 to closely align with the yen-denominated hedges entered into for the years 2015 through 2017. Prior periods presented have been recast based on the new rate.
|
Three months ended
December 31, 2015
|
Three months ended
December 31, 2014
|
||||||||||
Net
sales
|
Net
income
|
Net
sales
|
Net
income
|
||||||||
|
|||||||||||
As reported
|
$
|
736
|
$
|
33
|
$
|
676
|
$
|
38
|
|||
Acquisition-related costs (3)
|
1
|
(8)
|
|||||||||
Litigation, regulatory and other legal matters (5)
|
13
|
||||||||||
Restructuring, impairment and other charges (6)
|
5
|
||||||||||
Pension mark-to-market adjustment (11)
|
13
|
||||||||||
Core performance measures
|
$
|
736
|
$
|
47
|
$
|
676
|
$
|
48
|
Year ended
December 31, 2015
|
Year ended
December 31, 2014
|
||||||||||
Net
sales
|
Net
income
|
Net
sales
|
Net
income
|
||||||||
|
|||||||||||
As reported
|
$
|
2,980
|
$
|
237
|
$
|
2,652
|
$
|
194
|
|||
Acquisition-related costs (3)
|
16
|
(2)
|
|||||||||
Litigation, regulatory and other legal matters (5)
|
13
|
||||||||||
Restructuring, impairment and other charges (6)
|
(1)
|
17
|
|||||||||
Liquidation of subsidiary (7)
|
(2)
|
||||||||||
Post-combination expenses (10)
|
16
|
||||||||||
Pension mark-to-market adjustment (11)
|
13
|
||||||||||
Core performance measures
|
$
|
2,980
|
$
|
281
|
$
|
2,652
|
$
|
220
|
Three months ended
December 31, 2015
|
Three months ended
December 31, 2014
|
||||||||||
Net
sales
|
Net
income
|
Net
sales
|
Net
income
|
||||||||
As reported
|
$
|
254
|
$
|
29
|
$
|
250
|
$
|
31
|
|||
Pension mark-to-market adjustment (11)
|
5
|
||||||||||
Core performance measures
|
$
|
254
|
$
|
29
|
$
|
250
|
$
|
36
|
Year ended
December 31, 2015
|
Year ended
December 31, 2014
|
||||||||||
Net
sales
|
Net
income
|
Net
sales
|
Net
income
|
||||||||
As reported
|
$
|
1,053
|
$
|
161
|
$
|
1,092
|
$
|
178
|
|||
Pension mark-to-market adjustment (11)
|
5
|
||||||||||
Core performance measures
|
$
|
1,053
|
$
|
161
|
$
|
1,092
|
$
|
183
|
Three months ended
December 31, 2015
|
Three months ended
December 31, 2014
|
||||||||||
Net
sales
|
Net
income
|
Net
sales
|
Net
income
|
||||||||
As reported
|
$
|
275
|
$
|
39
|
$
|
319
|
$
|
25
|
|||
Constant-yen (1) *
|
(1)
|
(1)
|
|||||||||
Constant-won (1)
|
(1)
|
||||||||||
Foreign currency hedges related to translated earnings (2)
|
5
|
||||||||||
Restructuring, impairment and other charges (6)
|
7
|
1
|
|||||||||
Core performance measures
|
$
|
275
|
$
|
44
|
$
|
319
|
$
|
30
|
*
|
In the first quarter of 2015, we changed the yen-to-dollar management rate from ¥93 to ¥99 to closely align with the yen-denominated hedges entered into for the years 2015 through 2017. Prior periods presented have been recast based on the new rate.
|
Year ended
December 31, 2015
|
Year ended
December 31, 2014
|
||||||||||
Net
sales
|
Net
income
|
Net
sales
|
Net
income
|
||||||||
As reported
|
$
|
1,107
|
$
|
167
|
$
|
1,205
|
$
|
138
|
|||
Constant-yen (1) *
|
(6)
|
(3)
|
|||||||||
Constant-won (1)
|
(2)
|
||||||||||
Foreign currency hedges related to translated earnings (2)
|
5
|
14
|
|||||||||
Acquisition-related costs (3)
|
(1)
|
||||||||||
Restructuring, impairment and other charges (6)
|
14
|
12
|
|||||||||
Core performance measures
|
$
|
1,107
|
$
|
178
|
$
|
1,205
|
$
|
160
|
*
|
In the first quarter of 2015, we changed the yen-to-dollar management rate from ¥93 to ¥99 to closely align with the yen-denominated hedges entered into for the years 2015 through 2017. Prior periods presented have been recast based on the new rate.
|
Three months ended
December 31, 2015
|
Three months ended
December 31, 2014
|
||||||||||
Net
sales
|
Net
income
|
Net
sales
|
Net
income
|
||||||||
As reported
|
$
|
202
|
$
|
9
|
$
|
215
|
$
|
13
|
|||
Acquisition-related costs (3)
|
3
|
3
|
|||||||||
Restructuring, impairment and other charges (6)
|
2
|
||||||||||
Core performance measures
|
$
|
202
|
$
|
12
|
$
|
215
|
$
|
18
|
Year ended
December 31, 2015
|
Year ended
December 31, 2014
|
||||||||||
Net
sales
|
Net
income
|
Net
sales
|
Net
income
|
||||||||
As reported
|
$
|
821
|
$
|
61
|
$
|
862
|
$
|
67
|
|||
Acquisition-related costs (3)
|
12
|
14
|
|||||||||
Restructuring, impairment and other charges (6)
|
2
|
||||||||||
Core performance measures
|
$
|
821
|
$
|
73
|
$
|
862
|
$
|
83
|
Equity Earnings
|
|||||
|
Three months
ended
December 31,
2015
|
Three months
ended
December 31,
2014
|
|||
As reported
|
$
|
96
|
$
|
18
|
|
Equity in earnings of affiliated companies (8)
|
(18)
|
93
|
|||
Core performance measures
|
$
|
78
|
$
|
111
|
Equity Earnings
|
|||||
Year
ended
December 31,
2015
|
Year
ended
December 31,
2014
|
||||
As reported
|
$
|
281
|
$
|
252
|
|
Equity in earnings of affiliated companies (8)
|
(36)
|
35
|
|||
Core performance measures
|
$
|
245
|
$
|
287
|
Three months
ended
December 31,
2015
|
Year
ended
December 31,
2015
|
||||
Cash flows from operating activities
|
$
|
964
|
$
|
2,809
|
|
Less: Cash flows from investing activities
|
137
|
(685)
|
|||
Plus: Short-term investments – acquisitions
|
110
|
969
|
|||
Less: Short-term investments – liquidations
|
(583)
|
(1,629)
|
|||
Free cash flow
|
$
|
628
|
$
|
1,464
|
Three months
ended
December 31,
2015
|
Year
ended
December 31,
2015
|
||||
Cash flows from operating activities
|
$
|
964
|
$
|
2,809
|
|
Realized gains on foreign currency hedges related to translated earnings
|
164
|
653
|
|||
Translation gains (losses) on cash balances
|
35
|
(278)
|
|||
Adjusted cash flows from operating activities
|
$
|
1,163
|
$
|
3,184
|