Date of Report: (Date of earliest event reported)
|
July 27, 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: July 27, 2016
|
By
|
/s/ Edward Schlesinger
|
Edward Schlesinger
|
||
Vice President and Corporate Controller
|
·
|
Q2 GAAP EPS up $2.23 sequentially to $1.87, reflecting a one-time $2.7 billion non-taxable gain on strategic realignment of Dow Corning; core EPS up $0.09, or 32% sequentially, to $0.37; Q2 GAAP and core sales increased sequentially
|
·
|
Optical Communications sales increased 28% sequentially on strong demand and cable production recovery, exceeding management expectations
|
·
|
Corporate gross margin exceeded guidance by more than one percentage point, benefiting from higher sales and operational improvements in Optical Communications
|
·
|
Strategic realignment of Dow Corning Corporation was a significant milestone in focusing Corning’s portfolio, and added $4.8 billion in cash
|
·
|
Sales and EPS expected to grow both sequentially and on year-over-year basis in Q3
|
·
|
New $2 billion accelerated share repurchase further advances Strategy and Capital Allocation Framework
|
Q2 2016
|
Q1 2016
|
% change
|
Q2 2015
|
% change
|
|
GAAP Net Sales
|
$2,360
|
$2,047
|
15%
|
$2,343
|
1%
|
GAAP Net Income
|
$2,207
|
($368)
|
700%
|
$496
|
345%
|
GAAP EPS
|
$1.87
|
($0.36)
|
619%
|
$0.36
|
419%
|
Core Sales*
|
$2,440
|
$2,171
|
12%
|
$2,517
|
(3%)
|
Core Net Income*
|
$434
|
$340
|
28%
|
$522
|
(17%)
|
Core EPS*
|
$0.37
|
$0.28
|
32%
|
$0.38
|
(3%)
|
Q2 2016
|
Q1 2016
|
% change
|
Q2 2015
|
% change
|
|
GAAP Net Sales
|
$801
|
$705
|
14%
|
$789
|
2%
|
GAAP Earnings
|
$204
|
$209
|
(2%)
|
$303
|
(33%)
|
Core Sales*
|
$880
|
$829
|
6%
|
$963
|
(9%)
|
Core Earnings*
|
$237
|
$223
|
6%
|
$290
|
(18%)
|
Q2 2016
|
Q1 2016
|
% change
|
Q2 2015
|
% change
|
|
GAAP Net Sales
|
$782
|
$609
|
28%
|
$800
|
(2%)
|
GAAP Earnings
|
$77
|
$17
|
353%
|
$77
|
-
|
Core Earnings*
|
$86
|
$26
|
231%
|
$91
|
(5%)
|
Q2 2016
|
Q1 2016
|
% change
|
Q2 2015
|
% change
|
|
GAAP Net Sales
|
$259
|
$264
|
(2%)
|
$260
|
-
|
GAAP Earnings
|
$37
|
$34
|
9%
|
$46
|
(20%)
|
Core Earnings*
|
$37
|
$37
|
-
|
$46
|
(20%)
|
Q2 2016
|
Q1 2016
|
% change
|
Q2 2015
|
% change
|
|
GAAP Net Sales
|
$266
|
$227
|
17%
|
$272
|
(2%)
|
GAAP Earnings
|
$38
|
$26
|
46%
|
$44
|
(14%)
|
Core Earnings*
|
$48
|
$32
|
50%
|
$44
|
9%
|
Q2 2016
|
Q1 2016
|
% change
|
Q2 2015
|
% change
|
|
GAAP Net Sales
|
$215
|
$204
|
5%
|
$211
|
2%
|
GAAP Earnings
|
$17
|
$12
|
42%
|
$18
|
(6%)
|
Core Earnings*
|
$21
|
$18
|
17%
|
$21
|
-
|
Three months ended
June 30,
|
Six months ended
June 30,
|
||||||||||
2016
|
2015
|
2016
|
2015
|
||||||||
Net sales
|
$
|
2,360
|
$
|
2,343
|
$
|
4,407
|
$
|
4,608
|
|||
Cost of sales
|
1,409
|
1,368
|
2,692
|
2,704
|
|||||||
Gross margin
|
951
|
975
|
1,715
|
1,904
|
|||||||
Operating expenses:
|
|||||||||||
Selling, general and administrative expenses
|
499
|
337
|
802
|
653
|
|||||||
Research, development and engineering expenses
|
192
|
191
|
382
|
380
|
|||||||
Amortization of purchased intangibles
|
15
|
16
|
29
|
28
|
|||||||
Restructuring, impairment and other charges
|
(2)
|
78
|
|||||||||
Operating income
|
247
|
431
|
424
|
843
|
|||||||
Equity in earnings of affiliated companies
|
41
|
62
|
100
|
156
|
|||||||
Interest income
|
6
|
5
|
12
|
10
|
|||||||
Interest expense
|
(40)
|
(33)
|
(81)
|
(63)
|
|||||||
Translated earnings contract (loss) gain, net
|
(1,201)
|
162
|
(2,058)
|
191
|
|||||||
Gain on realignment of equity investment
|
2,676
|
2,676
|
|||||||||
Other expense, net
|
(26)
|
(21)
|
(42)
|
(38)
|
|||||||
Income before income taxes
|
1,703
|
606
|
1,031
|
1,099
|
|||||||
Benefit (provision) for income taxes
|
504
|
(110)
|
808
|
(196)
|
|||||||
Net income attributable to Corning Incorporated
|
$
|
2,207
|
$
|
496
|
$
|
1,839
|
$
|
903
|
|||
Earnings per common share attributable to Corning Incorporated:
|
|||||||||||
Basic
|
$
|
2.06
|
$
|
0.38
|
$
|
1.66
|
$
|
0.68
|
|||
Diluted
|
$
|
1.87
|
$
|
0.36
|
$
|
1.53
|
$
|
0.65
|
|||
Dividends declared per common share (1)
|
$
|
0.135
|
$
|
0.12
|
$
|
0.27
|
$
|
0.12
|
(1)
|
The first quarter 2015 dividend was declared on December 3, 2014.
|
Three months ended
June 30,
|
Six months ended
June 30,
|
||||||||||
2016
|
2015
|
2016
|
2015
|
||||||||
Net income attributable to Corning Incorporated
|
$
|
2,207
|
$
|
496
|
$
|
1,839
|
$
|
903
|
|||
Foreign currency translation adjustments and other
|
196
|
(40)
|
624
|
(296)
|
|||||||
Net unrealized (losses) gains on investments
|
(1)
|
(3)
|
1
|
||||||||
Unamortized gains (losses) and prior service credits (costs) for postretirement benefit plans
|
265
|
5
|
265
|
6
|
|||||||
Net unrealized (losses) gains on designated hedges
|
(22)
|
(41)
|
5
|
||||||||
Other comprehensive income (loss), net of tax
|
438
|
(35)
|
845
|
(284)
|
|||||||
Comprehensive income attributable to Corning Incorporated
|
$
|
2,645
|
$
|
461
|
$
|
2,684
|
$
|
619
|
June 30,
2016
|
December 31,
2015
|
||||
Assets
|
|||||
Current assets:
|
|||||
Cash and cash equivalents
|
$
|
7,144
|
$
|
4,500
|
|
Short-term investments, at fair value
|
100
|
||||
Trade accounts receivable, net of doubtful accounts and allowances
|
1,544
|
1,372
|
|||
Inventories, net of inventory reserves
|
1,501
|
1,385
|
|||
Other current assets
|
558
|
912
|
|||
Total current assets
|
10,747
|
8,269
|
|||
Investments
|
346
|
1,975
|
|||
Property, plant and equipment, net of accumulated depreciation
|
13,048
|
12,648
|
|||
Goodwill, net
|
1,569
|
1,380
|
|||
Other intangible assets, net
|
804
|
706
|
|||
Deferred income taxes
|
2,952
|
2,056
|
|||
Other assets
|
1,187
|
1,493
|
|||
Total Assets
|
$
|
30,653
|
$
|
28,527
|
|
Liabilities and Equity
|
|||||
Current liabilities:
|
|||||
Current portion of long-term debt and short-term borrowings
|
$
|
279
|
$
|
572
|
|
Accounts payable
|
938
|
934
|
|||
Other accrued liabilities
|
1,231
|
1,308
|
|||
Total current liabilities
|
2,448
|
2,814
|
|||
Long-term debt
|
3,918
|
3,890
|
|||
Postretirement benefits other than pensions
|
710
|
718
|
|||
Other liabilities
|
3,905
|
2,242
|
|||
Total liabilities
|
10,981
|
9,664
|
|||
Commitments, contingencies and guarantees
|
|||||
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: 1,685 million and 1,681 million
|
842
|
840
|
|||
Additional paid-in capital – common stock
|
13,668
|
13,352
|
|||
Retained earnings
|
15,331
|
13,832
|
|||
Treasury stock, at cost; Shares held: 648 million and 551 million
|
(11,566)
|
(9,725)
|
|||
Accumulated other comprehensive loss
|
(966)
|
(1,811)
|
|||
Total Corning Incorporated shareholders’ equity
|
19,609
|
18,788
|
|||
Noncontrolling interests
|
63
|
75
|
|||
Total equity
|
19,672
|
18,863
|
|||
Total Liabilities and Equity
|
$
|
30,653
|
$
|
28,527
|
Three months ended
June 30,
|
Six months ended
June 30,
|
||||||||||
2016
|
2015
|
2016
|
2015
|
||||||||
Cash Flows from Operating Activities:
|
|||||||||||
Net income
|
$
|
2,207
|
$
|
496
|
$
|
1,839
|
$
|
903
|
|||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|||||||||||
Depreciation
|
280
|
283
|
561
|
562
|
|||||||
Amortization of purchased intangibles
|
15
|
16
|
29
|
28
|
|||||||
Restructuring, impairment and other charges
|
(2)
|
78
|
|||||||||
Stock compensation charges
|
14
|
15
|
23
|
25
|
|||||||
Equity in earnings of affiliated companies
|
(41)
|
(62)
|
(100)
|
(156)
|
|||||||
Dividends received from affiliated companies
|
20
|
47
|
20
|
95
|
|||||||
Deferred tax (benefit) provision
|
(553)
|
36
|
(898)
|
31
|
|||||||
Restructuring payments
|
(4)
|
(10)
|
(7)
|
(23)
|
|||||||
Employee benefit payments less than (in excess of) expense
|
8
|
(2)
|
15
|
(8)
|
|||||||
Losses (gains) on foreign currency hedges related to translated earnings
|
1,201
|
(162)
|
2,058
|
(191)
|
|||||||
Unrealized translation (gains) losses on transactions
|
(1)
|
(62)
|
(124)
|
236
|
|||||||
Gain on realignment of equity investment
|
(2,676)
|
(2,676)
|
|||||||||
Changes in certain working capital items:
|
|||||||||||
Trade accounts receivable
|
(124)
|
(60)
|
(103)
|
(25)
|
|||||||
Inventories
|
(24)
|
(53)
|
(66)
|
(54)
|
|||||||
Other current assets
|
5
|
(87)
|
(71)
|
(100)
|
|||||||
Accounts payable and other current liabilities
|
178
|
123
|
(115)
|
(191)
|
|||||||
Other, net
|
23
|
29
|
(20)
|
16
|
|||||||
Net cash provided by operating activities
|
526
|
547
|
443
|
1,148
|
|||||||
Cash Flows from Investing Activities:
|
|||||||||||
Capital expenditures
|
(263)
|
(308)
|
(533)
|
(641)
|
|||||||
Acquisitions of business, net of cash acquired
|
(279)
|
(279)
|
(531)
|
||||||||
Investment in unconsolidated entities
|
(14)
|
(33)
|
(14)
|
(33)
|
|||||||
Cash received on realignment of equity investment
|
4,818
|
4,818
|
|||||||||
(Payments) proceeds from loan repayments from unconsolidated entities
|
(3)
|
2
|
(3)
|
6
|
|||||||
Short-term investments – acquisitions
|
(286)
|
(20)
|
(570)
|
||||||||
Short-term investments – liquidations
|
543
|
121
|
825
|
||||||||
Realized gains on foreign currency hedges related to translated earnings
|
52
|
172
|
145
|
321
|
|||||||
Other, net
|
3
|
3
|
|||||||||
Net cash provided by (used in) investing activities
|
4,314
|
90
|
4,238
|
(623)
|
|||||||
Cash Flows from Financing Activities:
|
|||||||||||
Net repayments of short-term borrowings and current portion of long-term debt
|
(64)
|
||||||||||
Principal payments under capital lease obligations
|
(1)
|
(1)
|
(1)
|
||||||||
Proceeds from issuance of short-term debt
|
2
|
2
|
|||||||||
Proceeds from issuance of long-term debt
|
745
|
745
|
|||||||||
Payments from issuance of commercial paper
|
(249)
|
(230)
|
|||||||||
Payments from settlement of interest rate swap agreements
|
(1)
|
(10)
|
|||||||||
Proceeds from the exercise of stock options
|
18
|
9
|
27
|
98
|
|||||||
Repurchases of common stock for treasury
|
(812)
|
(616)
|
(1,515)
|
(1,093)
|
|||||||
Dividends paid
|
(167)
|
(173)
|
(340)
|
(350)
|
|||||||
Net cash used in financing activities
|
(1,210)
|
(35)
|
(2,123)
|
(609)
|
|||||||
Effect of exchange rates on cash
|
(26)
|
62
|
86
|
(257)
|
|||||||
Net increase (decrease) in cash and cash equivalents
|
3,604
|
664
|
2,644
|
(341)
|
|||||||
Cash and cash equivalents at beginning of period
|
3,540
|
4,304
|
4,500
|
5,309
|
|||||||
Cash and cash equivalents at end of period
|
$
|
7,144
|
$
|
4,968
|
$
|
7,144
|
$
|
4,968
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||
Net income attributable to Corning Incorporated
|
$
|
2,207
|
$
|
496
|
$
|
1,839
|
$
|
903
|
||||
Less: Series A convertible preferred stock dividend
|
24
|
24
|
49
|
49
|
||||||||
Net income available to common stockholders – basic
|
2,183
|
472
|
1,790
|
854
|
||||||||
Add: Series A convertible preferred stock dividend
|
24
|
24
|
49
|
49
|
||||||||
Net income available to common stockholders - diluted
|
$
|
2,207
|
$
|
496
|
$
|
1,839
|
$
|
903
|
||||
Weighted-average common shares outstanding - basic
|
1,059
|
1,246
|
1,081
|
1,257
|
||||||||
Effect of dilutive securities:
|
||||||||||||
Stock options and other dilutive securities
|
8
|
10
|
8
|
11
|
||||||||
Series A convertible preferred stock
|
115
|
115
|
115
|
115
|
||||||||
Weighted-average common shares outstanding - diluted
|
1,182
|
1,371
|
1,204
|
1,383
|
||||||||
Basic earnings per common share
|
$
|
2.06
|
$
|
0.38
|
$
|
1.66
|
$
|
0.68
|
||||
Diluted earnings per common share
|
$
|
1.87
|
$
|
0.36
|
$
|
1.53
|
$
|
0.65
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||
Core earnings attributable to Corning Incorporated
|
$
|
434
|
$
|
522
|
$
|
774
|
$
|
1,006
|
||||
Less: Series A convertible preferred stock dividend
|
24
|
24
|
49
|
49
|
||||||||
Core earnings available to common stockholders - basic
|
410
|
498
|
725
|
957
|
||||||||
Add: Series A convertible preferred stock dividend
|
24
|
24
|
49
|
49
|
||||||||
Core earnings available to common stockholders - diluted
|
$
|
434
|
$
|
522
|
$
|
774
|
$
|
1,006
|
||||
Weighted-average common shares outstanding - basic
|
1,059
|
1,246
|
1,081
|
1,257
|
||||||||
Effect of dilutive securities:
|
|
|||||||||||
Stock options and other dilutive securities
|
8
|
10
|
8
|
11
|
||||||||
Series A convertible preferred stock
|
115
|
115
|
115
|
115
|
||||||||
Weighted-average common shares outstanding - diluted
|
1,182
|
1,371
|
1,204
|
1,383
|
||||||||
Core basic earnings per common share
|
$
|
0.39
|
$
|
0.40
|
$
|
0.67
|
$
|
0.76
|
||||
Core diluted earnings per common share
|
$
|
0.37
|
$
|
0.38
|
$
|
0.64
|
$
|
0.73
|
(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: Because a significant portion of Corning Precision Materials’ costs are denominated in South 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 South 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 other non-operational tax-related adjustments.
|
(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)
|
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.
|
(8)
|
Impacts from the acquisition of Samsung Corning Precision Materials: Fair value adjustments to the indemnity asset related to contingent consideration and other items related to the acquisition of Samsung Corning Precision Materials.
|
(9)
|
Post-combination expenses: Post-combination expenses incurred as a result of an acquisition in the first quarter of 2015.
|
(10)
|
Pension mark-to-market adjustment: Mark-to-market pension gains and losses, which arise from changes in actuarial assumptions and the difference between actual and expected returns on plan assets and discount rates.
|
(11)
|
Gain on realignment of equity investment: Gain recorded upon the completion of the strategic realignment of our ownership interest in Dow Corning.
|
(12)
|
Taiwan power outage: Impact of the power outage that temporarily halted production at our Tainan, Taiwan manufacturing location in the second quarter of 2016. The impact in the second quarter includes asset write-offs and charges for facility repairs, offset somewhat by partial reimbursement through our insurance program. We expect to receive the remainder of the insurance reimbursement in the latter half of 2016.
|
Three months ended June 30, 2016
|
|||||||||||||||
Net
sales
|
Equity
earnings
|
Income
before
income
taxes
|
Net
income
|
Effective
tax
rate
|
Per
share
|
||||||||||
As reported - GAAP
|
$
|
2,360
|
$
|
41
|
$
|
1,703
|
$
|
2,207
|
(29.6)%
|
1.87
|
|||||
Constant-yen (1)
|
78
|
2
|
75
|
56
|
0.05
|
||||||||||
Constant-won (1)
|
2
|
(12)
|
(9)
|
(0.01)
|
|||||||||||
Foreign currency hedges related to translated earnings (2)
|
1,201
|
758
|
0.64
|
||||||||||||
Acquisition-related costs (3)
|
80
|
74
|
0.06
|
||||||||||||
Discrete tax items and other tax-related adjustments (4)
|
(111)
|
(0.09)
|
|||||||||||||
Litigation, regulatory and other legal matters (5)
|
55
|
70
|
0.06
|
||||||||||||
Restructuring, impairment and other charges (6)
|
11
|
7
|
0.01
|
||||||||||||
Equity in earnings of affiliated companies (7)
|
14
|
14
|
13
|
0.01
|
|||||||||||
Impacts from the acquisition of Samsung Corning Precision Materials (8)
|
15
|
12
|
0.01
|
||||||||||||
Pension mark-to-market (10)
|
27
|
18
|
0.02
|
||||||||||||
Gain on realignment of equity investment (11)
|
(2,676)
|
(2,676)
|
(2.26)
|
||||||||||||
Taiwan power outage (12)
|
20
|
15
|
0.01
|
||||||||||||
Core performance measures
|
$
|
2,440
|
$
|
57
|
$
|
513
|
$
|
434
|
15.4%
|
0.37
|
Three months ended June 30, 2015
|
|||||||||||||||
Net
sales
|
Equity
earnings
|
Income
before
income
taxes
|
Net
income
|
Effective
tax
rate
|
Per
share
|
||||||||||
As reported - GAAP
|
$
|
2,343
|
$
|
62
|
$
|
606
|
$
|
496
|
18.2%
|
0.36
|
|||||
Constant-yen (1)
|
174
|
2
|
141
|
104
|
0.08
|
||||||||||
Constant-won (1)
|
1
|
||||||||||||||
Foreign currency hedges related to translated earnings (2)
|
(162)
|
(101)
|
(0.07)
|
||||||||||||
Acquisition-related costs (3)
|
12
|
7
|
0.01
|
||||||||||||
Litigation, regulatory and other legal matters (5)
|
2
|
1
|
|||||||||||||
Restructuring, impairment and other charges (6)
|
3
|
2
|
|||||||||||||
Equity in earnings of affiliated companies (7)
|
7
|
7
|
7
|
0.01
|
|||||||||||
Impacts from the acquisition of Samsung Corning Precision Materials (8)
|
(11)
|
(9)
|
(0.01)
|
||||||||||||
Post-combination expenses (9)
|
16
|
10
|
0.01
|
||||||||||||
Pension mark-to-market (10)
|
8
|
5
|
|||||||||||||
Core performance measures
|
$
|
2,517
|
$
|
71
|
$
|
623
|
$
|
522
|
16.2%
|
0.38
|
Three months ended June 30, 2016
|
Three months ended June 30, 2015
|
||||||||||||||
Net
sales
|
Gross
Margin
|
Gross
margin
%
|
Selling,
general
and
admin.
expenses
|
Net
sales
|
Gross
Margin
|
Gross
margin
%
|
Selling,
general
and
admin.
expenses
|
||||||||
As reported
|
$2,360
|
$ 951
|
40%
|
$499
|
$2,343
|
$ 975
|
42%
|
$337
|
|||||||
Constant-yen (1)
|
78
|
75
|
174
|
140
|
|||||||||||
Constant-won (1)
|
2
|
(10)
|
(1)
|
||||||||||||
Acquisition-related costs (3)
|
3
|
(62)
|
4
|
||||||||||||
Litigation, regulatory and other legal matters (5)
|
(52)
|
||||||||||||||
Restructuring, impairment and other charges (6)
|
13
|
3
|
|||||||||||||
Impacts from the acquisition of Samsung Corning Precision Materials (8)
|
(15)
|
2
|
12
|
||||||||||||
Post-combination expenses (9)
|
(16)
|
||||||||||||||
Pension mark-to-market (10)
|
(27)
|
(8)
|
|||||||||||||
Taiwan power outage (12)
|
18
|
||||||||||||||
Core performance measures
|
$2,440
|
$1,050
|
43%
|
$342
|
$2,517
|
$1,120
|
45%
|
$329
|
Three months ended
June 30, 2016
|
Three months ended
June 30, 2015
|
||||||||||
Net
sales
|
Net
income
|
Net
sales
|
Net
income
|
||||||||
|
|||||||||||
As reported
|
$
|
801
|
$
|
204
|
$
|
789
|
$
|
303
|
|||
Constant-yen (1)
|
78
|
55
|
174
|
105
|
|||||||
Constant-won (1)
|
1
|
(8)
|
|||||||||
Foreign currency hedges related to translated earnings (2)
|
(33)
|
(108)
|
|||||||||
Impacts from the acquisition of Samsung Corning Precision Materials (8)
|
12
|
(10)
|
|||||||||
Taiwan power outage (12)
|
7
|
||||||||||
Core performance measures
|
$
|
880
|
$
|
237
|
$
|
963
|
$
|
290
|
Three months ended
June 30, 2016
|
Three months ended
June 30, 2015
|
||||||||||
Net
sales
|
Net
income
|
Net
sales
|
Net
income
|
||||||||
|
|||||||||||
As reported
|
$
|
782
|
$
|
77
|
$
|
800
|
$
|
77
|
|||
Acquisition-related costs (3)
|
9
|
4
|
|||||||||
Post-combination expenses (9)
|
10
|
||||||||||
Core performance measures
|
$
|
782
|
$
|
86
|
$
|
800
|
$
|
91
|
Three months ended
June 30, 2016
|
Three months ended
June 30, 2015
|
||||||||||
Net
sales
|
Net
income
|
Net
sales
|
Net
income
|
||||||||
|
|||||||||||
As reported and Core performance measures
|
$
|
259
|
$
|
37
|
$
|
260
|
$
|
46
|
Three months ended
June 30, 2016
|
Three months ended
June 30, 2015
|
||||||||||
Net
sales
|
Net
income
|
Net
sales
|
Net
income
|
||||||||
As reported
|
$
|
266
|
$
|
38
|
$
|
272
|
$
|
44
|
|||
Constant-yen (1)
|
(2)
|
||||||||||
Restructuring, impairment and other charges (6)
|
6
|
2
|
|||||||||
Taiwan power outage (12)
|
4
|
||||||||||
Core performance measures
|
$
|
266
|
$
|
48
|
$
|
272
|
$
|
44
|
Three months ended
June 30, 2016
|
Three months ended
June 30, 2015
|
||||||||||
Net
sales
|
Net
income
|
Net
sales
|
Net
income
|
||||||||
As reported
|
$
|
215
|
$
|
17
|
$
|
211
|
$
|
18
|
|||
Acquisition-related costs (3)
|
3
|
3
|
|||||||||
Restructuring, impairment and other charges (6)
|
1
|
||||||||||
Core performance measures
|
$
|
215
|
$
|
21
|
$
|
211
|
$
|
21
|
Three months ended
June 30, 2016
|
Three months ended
June 30, 2015
|
|||||||||||||||||||
Dow
Corning (a)
|
Hemlock
Semiconductor (b)
|
Other
|
Total
equity
earnings
|
Dow
Corning
|
Other
|
Total
equity
earnings
|
||||||||||||||
As reported
|
$
|
26
|
$
|
22
|
$
|
(7)
|
$
|
41
|
$
|
57
|
$
|
5
|
$
|
62
|
||||||
Constant-yen (1)
|
2
|
2
|
2
|
2
|
||||||||||||||||
Equity in earnings of affiliated companies (7)
|
14
|
14
|
6
|
1
|
7
|
|||||||||||||||
Core Performance Measures
|
$
|
40
|
$
|
22
|
$
|
(5)
|
$
|
57
|
$
|
63
|
$
|
8
|
$
|
71
|
(a)
|
Includes equity earnings for Dow Corning, which includes the silicones business and Hemlock Semiconductor Group, through May 31, 2016, the date of the completion of the realignment of our ownership interest in Dow Corning.
|
(b)
|
Includes equity earnings for Hemlock Semiconductor Group from the date of the realignment to June 30, 2016
|
Three months
ended
June 30,
2016
|
Three months
ended
June 30,
2015
|
||||
Cash flows from operating activities
|
$
|
526
|
$
|
547
|
|
Realized gains on foreign currency hedges related to translated earnings
|
52
|
172
|
|||
Translation (losses) gains on cash balances
|
(20)
|
48
|
|||
Transaction costs related to realignment of equity investment
|
37
|
||||
Adjusted cash flows from operating activities
|
$
|
595
|
$
|
767
|