SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported) |
January 30, 2018 |
CORNING INCORPORATED
(Exact name of registrant as specified in its charter)
New York |
1-3247 |
16-0393470 |
One Riverfront Plaza, Corning, New York |
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14831 |
(607) 974-9000
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 ((§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company |
☐ |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ |
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)) |
Item 7.01 Regulation FD Disclosure.
Corning Incorporated (the “Company”) adopted the use of core performance measures as a supplement to U.S. generally accepted accounting principles (“GAAP”) in early 2013 when the Japanese yen began a significant weakening trend relative to the U.S. dollar. Corning used a yen-to-dollar rate (“constant-yen”) of ¥93 for its core reporting in 2013 and 2014, and a constant yen rate of ¥99 for its core reporting in 2015, 2016 and 2017, which aligned with the Company’s yen-denominated hedge rates during these time periods. Additionally, because a significant portion of Corning Precision Materials’ costs are denominated in Korean won, beginning in 2014, the Company used an internally derived won-to-dollar rate (“constant-won”) of ₩1,100 for its core reporting, which was consistent with historical prior period averages of the won.
Beginning with the first quarter of 2018, the Company is changing the constant-yen and constant-won rates used in the calculation of its core performance measures to ¥107, which closely aligns with yen-denominated hedges entered into for the years 2018 through 2020, and ₩1,175, which aligns with our current won portfolio of foreign currency hedges. The Company believes that the use of constant currency reporting allows investors to understand our results without the impact of volatile changes in currency exchange rates on our net sales and net income.
Exhibit 99 to this Form 8-K provides recasted core performance measures for Corning Incorporated in total, as well as the Display Technologies and Specialty Materials segments, for the years ended December 31, 2017 and 2016, and quarters ended March 31, 2017 and 2016, June 30, 2017 and 2016, September 30, 2017 and 2016, and December 31, 2017 and 2016. Corning’s remaining segments are not impacted by the change in constant-yen and constant-won.
In Exhibit 99, the Company discloses items not prepared in accordance with GAAP, or non-GAAP financial measures (as defined in Regulation G promulgated by the U.S. Securities and Exchange Commission). In managing the Company and assessing our financial performance, we supplement certain GAAP measures provided by our consolidated financial statements with measures adjusted to exclude certain items to arrive at core performance measures. The Company believes that reporting core performance measures allows investors to understand our results without the volatility of currency fluctuations, as well as other non-operational items, and reflects the underlying economics of the translated earnings contracts used to mitigate the impact of changes in currency exchange rates on our earnings and cash flows.
The recasting of previously issued financial information does not represent a restatement of previously issued financial statements and does not affect the Company’s reported sales, gross margin, selling, general and administrative expenses, equity earnings, net income or earnings per share, for any of the previously reported periods. The information contained in this Form 8-K is being furnished pursuant to Regulation FD in order to provide the financial community with historical financial data that is presented on a basis consistent with the Company’s core performance measure reporting structure.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits
(d) |
Exhibit |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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CORNING INCORPORATED |
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Registrant |
Date: January 30, 2018 |
By |
/s/ Edward Schlesinger |
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Edward Schlesinger |
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Vice President and Corporate Controller |
SUMMARY OF CHANGES IN CORE PERFORMANCE MEASURES
|
||||||||
Three months ended March 31, 2017 |
Corning |
Display |
Specialty |
|||||
|
Incorporated |
Technologies |
Materials |
|||||
Core net sales as reported @ ¥99 and ₩1,100 |
$ |
2,485 |
$ |
846 |
$ |
300 | ||
Constant yen adjustment to ¥107 |
(64) | (64) | ||||||
Constant won adjustment to ₩1,175 |
||||||||
Core net sales @ ¥107 and ₩1,175 |
$ |
2,421 |
$ |
782 |
$ |
300 | ||
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||||||||
Core earnings as reported @ ¥99 and ₩1,100 |
$ |
407 |
$ |
256 |
$ |
48 | ||
Constant yen adjustment to ¥107 |
(40) | (38) | ||||||
Constant won adjustment to ₩1,175 |
9 | 8 | ||||||
Core earnings @ ¥107 and ₩1,175 |
$ |
376 |
$ |
226 |
$ |
48 | ||
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Three months ended June 30, 2017 |
Corning |
Display |
Specialty |
|||||
|
Incorporated |
Technologies |
Materials |
|||||
Core net sales as reported @ ¥99 and ₩1,100 |
$ |
2,590 |
$ |
841 |
$ |
337 | ||
Constant yen adjustment to ¥107 |
(63) | (64) | ||||||
Constant won adjustment to ₩1,175 |
||||||||
Core net sales @ ¥107 and ₩1,175 |
$ |
2,527 |
$ |
777 |
$ |
337 | ||
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Core earnings as reported @ ¥99 and ₩1,100 |
$ |
431 |
$ |
240 |
$ |
58 | ||
Constant yen adjustment to ¥107 |
(40) | (40) | ||||||
Constant won adjustment to ₩1,175 |
9 | 8 | 1 | |||||
Core earnings @ ¥107 and ₩1,175 |
$ |
400 |
$ |
208 |
$ |
59 | ||
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Three months ended September 30, 2017 |
Corning |
Display |
Specialty |
|||||
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Incorporated |
Technologies |
Materials |
|||||
Core net sales as reported @ ¥99 and ₩1,100 |
$ |
2,700 |
$ |
860 |
$ |
373 | ||
Constant yen adjustment to ¥107 |
(65) | (65) | ||||||
Constant won adjustment to ₩1,175 |
||||||||
Core net sales @ ¥107 and ₩1,175 |
$ |
2,635 |
$ |
795 |
$ |
373 | ||
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Core earnings as reported @ ¥99 and ₩1,100 |
$ |
433 |
$ |
227 |
$ |
71 | ||
Constant yen adjustment to ¥107 |
(40) | (40) | ||||||
Constant won adjustment to ₩1,175 |
10 | 8 | 2 | |||||
Core earnings @ ¥107 and ₩1,175 |
$ |
403 |
$ |
195 |
$ |
73 | ||
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Three months ended December 31, 2017 |
Corning |
Display |
Specialty |
|||||
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Incorporated |
Technologies |
Materials |
|||||
Core net sales as reported @ ¥99 and ₩1,100 |
$ |
2,739 |
$ |
847 |
$ |
393 | ||
Constant yen adjustment to ¥107 |
(63) | (63) | ||||||
Constant won adjustment to ₩1,175 |
(1) | (1) | ||||||
Core net sales @ ¥107 and ₩1,175 |
$ |
2,675 |
$ |
783 |
$ |
393 | ||
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Core earnings as reported @ ¥99 and ₩1,100 |
$ |
485 |
$ |
221 |
$ |
73 | ||
Constant yen adjustment to ¥107 |
(40) | (39) | ||||||
Constant won adjustment to ₩1,175 |
10 | 9 | 1 | |||||
Core earnings @ ¥107 and ₩1,175 |
$ |
455 |
$ |
191 |
$ |
74 | ||
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Year ended December 31, 2017 |
Corning |
Display |
Specialty |
|||||
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Incorporated |
Technologies |
Materials |
|||||
Core net sales as reported @ ¥99 and ₩1,100 |
$ |
10,514 |
$ |
3,394 |
$ |
1,403 | ||
Constant yen adjustment to ¥107 |
(255) | (256) |
- |
|||||
Constant won adjustment to ₩1,175 |
(1) | (1) |
- |
|||||
Core net sales @ ¥107 and ₩1,175 |
$ |
10,258 |
$ |
3,137 |
$ |
1,403 | ||
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Core earnings as reported @ ¥99 and ₩1,100 |
$ |
1,756 |
$ |
944 |
$ |
250 | ||
Constant yen adjustment to ¥107 |
(160) | (157) |
- |
|||||
Constant won adjustment to ₩1,175 |
38 | 33 | 4 | |||||
Core earnings @ ¥107 and ₩1,175 |
$ |
1,634 |
$ |
820 |
$ |
254 |
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Three months ended March 31, 2016 |
Corning |
Display |
Specialty |
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Incorporated |
Technologies |
Materials |
|||||
Core net sales as reported @ ¥99 and ₩1,100 |
$ |
2,171 |
$ |
829 |
$ |
227 | ||
Constant yen adjustment to ¥107 |
(63) | (63) | ||||||
Constant won adjustment to ₩1,175 |
||||||||
Core net sales @ ¥107 and ₩1,175 |
$ |
2,108 |
$ |
766 |
$ |
227 | ||
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Core earnings as reported @ ¥99 and ₩1,100 |
$ |
340 |
$ |
223 |
$ |
32 | ||
Constant yen adjustment to ¥107 |
(41) | (39) | 1 | |||||
Constant won adjustment to ₩1,175 |
11 | 9 | 2 | |||||
Core earnings @ ¥107 and ₩1,175 |
$ |
310 |
$ |
193 |
$ |
35 | ||
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Three months ended June 30, 2016 |
Corning |
Display |
Specialty |
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Incorporated |
Technologies |
Materials |
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Core net sales as reported @ ¥99 and ₩1,100 |
$ |
2,440 |
$ |
880 |
$ |
266 | ||
Constant yen adjustment to ¥107 |
(67) | (67) | ||||||
Constant won adjustment to ₩1,175 |
||||||||
Core net sales @ ¥107 and ₩1,175 |
$ |
2,373 |
$ |
813 |
$ |
266 | ||
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Core earnings as reported @ ¥99 and ₩1,100 |
$ |
434 |
$ |
237 |
$ |
48 | ||
Constant yen adjustment to ¥107 |
(41) | (41) | ||||||
Constant won adjustment to ₩1,175 |
11 | 10 | 1 | |||||
Core earnings @ ¥107 and ₩1,175 |
$ |
404 |
$ |
206 |
$ |
49 | ||
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Three months ended September 30, 2016 |
Corning |
Display |
Specialty |
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Incorporated |
Technologies |
Materials |
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Core net sales as reported @ ¥99 and ₩1,100 |
$ |
2,548 |
$ |
943 |
$ |
295 | ||
Constant yen adjustment to ¥107 |
(71) | (70) | ||||||
Constant won adjustment to ₩1,175 |
(1) | (1) | ||||||
Core net sales @ ¥107 and ₩1,175 |
$ |
2,476 |
$ |
872 |
$ |
295 | ||
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Core earnings as reported @ ¥99 and ₩1,100 |
$ |
466 |
$ |
270 |
$ |
44 | ||
Constant yen adjustment to ¥107 |
(43) | (43) | ||||||
Constant won adjustment to ₩1,175 |
10 | 9 | 1 | |||||
Core earnings @ ¥107 and ₩1,175 |
$ |
433 |
$ |
236 |
$ |
45 | ||
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Three months ended December 31, 2016 |
Corning |
Display |
Specialty |
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Incorporated |
Technologies |
Materials |
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Core net sales as reported @ ¥99 and ₩1,100 |
$ |
2,551 |
$ |
904 |
$ |
336 | ||
Constant yen adjustment to ¥107 |
(68) | (67) | ||||||
Constant won adjustment to ₩1,175 |
||||||||
Core net sales @ ¥107 and ₩1,175 |
$ |
2,483 |
$ |
837 |
$ |
336 | ||
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Core earnings as reported @ ¥99 and ₩1,100 |
$ |
534 |
$ |
276 |
$ |
65 | ||
Constant yen adjustment to ¥107 |
(40) | (41) | ||||||
Constant won adjustment to ₩1,175 |
10 | 9 | 2 | |||||
Core earnings @ ¥107 and ₩1,175 |
$ |
504 |
$ |
244 |
$ |
67 | ||
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Year ended December 31, 2016 |
Corning |
Display |
Specialty |
|||||
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Incorporated |
Technologies |
Materials |
|||||
Core net sales as reported @ ¥99 and ₩1,100 |
$ |
9,710 |
$ |
3,556 |
$ |
1,124 | ||
Constant yen adjustment to ¥107 |
(269) | (267) |
- |
|||||
Constant won adjustment to ₩1,175 |
(1) | (1) |
- |
|||||
Core net sales @ ¥107 and ₩1,175 |
$ |
9,440 |
$ |
3,288 |
$ |
1,124 | ||
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Core earnings as reported @ ¥99 and ₩1,100 |
$ |
1,774 |
$ |
1,006 |
$ |
189 | ||
Constant yen adjustment to ¥107 |
(165) | (164) | 1 | |||||
Constant won adjustment to ₩1,175 |
42 | 37 | 6 | |||||
Core earnings @ ¥107 and ₩1,175 |
$ |
1,651 |
$ |
879 |
$ |
196 |
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Three Months Ended March 31, 2017
(Unaudited; amounts in millions, except per share amounts)
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Income |
Effective |
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before |
tax |
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Net |
Equity |
income |
Net |
(benefit) |
Per |
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sales |
earnings |
taxes |
income |
rate (a) |
share |
|||||||||||
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As reported |
$ |
2,375 |
$ |
80 |
$ |
20 |
$ |
86 | (330%) |
$ |
0.07 | ||||||
Constant-yen (1) |
46 | 46 | 34 | 0.03 | |||||||||||||
Constant-won (1) |
4 | 3 | |||||||||||||||
Translated earnings contract gain (3) |
442 | 278 | 0.26 | ||||||||||||||
Acquisition-related costs (4) |
22 | 15 | 0.01 | ||||||||||||||
Discrete tax items and other |
9 | 0.01 | |||||||||||||||
Litigation, regulatory and other legal matters (6) |
(12) | (9) | (0.01) | ||||||||||||||
Restructuring, impairment and other charges (7) |
10 | 8 | 0.01 | ||||||||||||||
Equity in earnings of affiliated companies (8) |
(72) | (72) | (46) | (0.04) | |||||||||||||
Adjustments related to acquisitions (9) |
(3) | (2) |
— |
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Core performance measures |
$ |
2,421 |
$ |
8 |
$ |
457 |
$ |
376 | 17.7% |
$ |
0.36 |
(a)Based upon statutory tax rates in the specific jurisdiction for each event.
See Reconciliation of Non-GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Three Months Ended June 30, 2017
(Unaudited; amounts in millions, except per share amounts)
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Income |
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before |
Effective |
|||||||||||||||
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Net |
Equity |
income |
Net |
tax |
Per |
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sales |
earnings |
taxes |
income |
rate (a) |
share |
|||||||||||
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As reported |
$ |
2,497 |
$ |
37 |
$ |
592 |
$ |
439 | 25.8% |
$ |
0.42 | ||||||
Constant-yen (1) |
30 | 1 | 32 | 24 | 0.02 | ||||||||||||
Constant-won (1) |
8 | 5 | |||||||||||||||
Translated earnings contract gain (3) |
(216) | (136) | (0.13) | ||||||||||||||
Acquisition-related costs (4) |
17 | 12 | 0.01 | ||||||||||||||
Discrete tax items and other |
21 | 0.02 | |||||||||||||||
Restructuring, impairment and other charges (7) |
40 | 27 | 0.03 | ||||||||||||||
Adjustments related to acquisitions (9) |
(2) | (1) |
— |
||||||||||||||
Pension mark-to-market adjustment (10) |
15 | 9 | 0.01 | ||||||||||||||
Core performance measures |
$ |
2,527 |
$ |
38 |
$ |
486 |
$ |
400 | 17.7% |
$ |
0.39 |
(a)Based upon statutory tax rates in the specific jurisdiction for each event.
See Reconciliation of Non-GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Three Months Ended September 30, 2017
(Unaudited; amounts in millions, except per share amounts)
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Income |
||||||||||||||||
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before |
Effective |
|||||||||||||||
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Net |
Equity |
income |
Net |
tax |
Per |
|||||||||||
|
sales |
earnings |
taxes |
income |
rate (a) |
share |
|||||||||||
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As reported |
$ |
2,607 |
$ |
31 |
$ |
479 |
$ |
390 | 18.6% |
$ |
0.39 | ||||||
Constant-yen (1) |
28 | 1 | 27 | 22 | 0.02 | ||||||||||||
Constant-won (1) |
7 | 6 | 0.01 | ||||||||||||||
Translation gain on Japanese yen-denominated debt (2) |
(14) | (9) | (0.01) | ||||||||||||||
Translated earnings contract gain (3) |
(28) | (18) | (0.02) | ||||||||||||||
Acquisition-related costs (4) |
21 | 14 | 0.01 | ||||||||||||||
Discrete tax items and other |
(2) | ||||||||||||||||
Core performance measures |
$ |
2,635 |
$ |
32 |
$ |
492 |
$ |
403 | 18.1% |
$ |
0.40 |
(a)Based upon statutory tax rates in the specific jurisdiction for each event.
See Reconciliation of Non-GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Three Months Ended December 31, 2017
(Unaudited; amounts in millions, except per share amounts)
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Income |
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before |
Effective |
|||||||||||||||
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Net |
Equity |
income |
Net |
tax |
Per |
|||||||||||
|
sales |
earnings |
taxes |
income |
rate (a) |
share |
|||||||||||
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As reported |
$ |
2,637 |
$ |
213 |
$ |
566 |
$ |
(1,412) | 349.5% |
$ |
(1.66) | ||||||
Constant-yen (1) |
40 | 1 | 36 | 35 | 0.04 | ||||||||||||
Constant-won (1) |
(2) | 1 | 12 | 9 | 0.01 | ||||||||||||
Translated earnings contract gain (3) |
(72) | (46) | (0.05) | ||||||||||||||
Acquisition-related costs (4) |
24 | 18 | 0.02 | ||||||||||||||
Discrete tax items and other |
99 | 0.11 | |||||||||||||||
Restructuring, impairment and |
22 | 27 | 0.03 | ||||||||||||||
Equity in earnings of affiliated companies (8) |
(80) | (80) | (51) | (0.06) | |||||||||||||
Adjustments related to acquisitions (9) |
15 | 16 | 0.02 | ||||||||||||||
Pension mark-to-market adjustment (10) |
7 | 5 | 0.01 | ||||||||||||||
Adjustments resulting from the Tax Cuts |
1,755 | 2.03 | |||||||||||||||
Core performance measures |
$ |
2,675 |
$ |
135 |
$ |
530 |
$ |
455 | 14.2% |
$ |
0.46 |
(a)Based upon statutory tax rates in the specific jurisdiction for each event.
See Reconciliation of Non-GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Year Ended December 31, 2017
(Unaudited; amounts in millions, except per share amounts)
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Year ended December 31, 2017 |
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Net |
Equity |
Income |
Net |
Effective |
Earnings |
||||||||||
|
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As reported |
$ |
10,116 | 361 | 1,657 | (497) |
130.0% |
(0.66) | |||||||||
Constant-yen (1) |
144 | 2 | 139 | 115 | 0.13 | |||||||||||
Constant-won (1) |
(2) | 29 | 23 | 0.03 | ||||||||||||
Translation gain on Japanese yen-denominated debt (2) |
(14) | (9) | (0.01) | |||||||||||||
Translated earnings contract loss (3) |
125 | 78 | 0.09 | |||||||||||||
Acquisition-related costs (4) |
84 | 59 | 0.07 | |||||||||||||
Discrete tax items and other |
127 | 0.14 | ||||||||||||||
Litigation, regulatory and other legal matters (6) |
(12) | (9) | (0.01) | |||||||||||||
Restructuring, impairment and other charges (7) |
72 | 62 | 0.07 | |||||||||||||
Equity in earnings of affiliated companies (8) |
(152) | (152) | (97) | (0.11) | ||||||||||||
Adjustments related to acquisitions (9) |
10 | 13 | 0.01 | |||||||||||||
Pension mark-to-market adjustment (10) |
22 | 14 | 0.02 | |||||||||||||
Adjustments resulting from the Tax Cuts |
1,755 | 1.96 | ||||||||||||||
Core performance measures |
$ |
10,258 |
$ |
211 |
$ |
1,960 |
$ |
1,634 |
16.6% |
$ |
1.60 |
(a)Based upon statutory tax rates in the specific jurisdiction for each event.
See Reconciliation of Non-GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Three Months Ended March 31, 2016
(Unaudited; amounts in millions, except per share amounts)
|
|||||||||||||||||
|
(Loss) |
||||||||||||||||
|
income |
Effective |
|||||||||||||||
|
before |
tax |
|||||||||||||||
|
Net |
Equity |
income |
Net (loss) |
(benefit) |
Per |
|||||||||||
|
sales |
earnings |
taxes |
income |
rate (a) |
share |
|||||||||||
|
|||||||||||||||||
As reported |
$ |
2,047 |
$ |
59 |
$ |
(672) |
$ |
(368) | (45.2%) |
$ |
(0.36) | ||||||
Constant-yen (1) |
61 | 1 | 57 | 37 | 0.03 | ||||||||||||
Constant-won (1) |
(5) | (3) | (0.00) | ||||||||||||||
Translated earnings contract loss (3) |
857 | 540 | 0.49 | ||||||||||||||
Acquisition-related costs (4) |
14 | 10 | 0.01 | ||||||||||||||
Discrete tax items and other |
22 | 0.02 | |||||||||||||||
Restructuring, impairment and other charges (7) |
109 | 75 | 0.07 | ||||||||||||||
Equity in earnings of affiliated companies (8) |
2 | 2 | 2 | ||||||||||||||
Adjustments related to acquisitions (9) |
(11) | (9) | (0.01) | ||||||||||||||
Pension mark-to-market adjustment (10) |
7 | 4 | |||||||||||||||
Core performance measures |
$ |
2,108 |
$ |
62 |
$ |
358 |
$ |
310 | 13.4% |
$ |
0.25 |
(a)Based upon statutory tax rates in the specific jurisdiction for each event.
See Reconciliation of Non-GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Three Months Ended June 30, 2016
(Unaudited; amounts in millions, except per share amounts)
|
|||||||||||||||||
|
Income |
Effective |
|||||||||||||||
|
before |
tax |
|||||||||||||||
|
Net |
Equity |
income |
Net |
(benefit) |
Per |
|||||||||||
|
sales |
earnings |
taxes |
income |
rate (a) |
share |
|||||||||||
|
|||||||||||||||||
As reported |
$ |
2,360 |
$ |
41 |
$ |
1,703 |
$ |
2,207 | (29.6%) |
$ |
1.87 | ||||||
Constant-yen (1) |
13 | 75 | 15 | 0.01 | |||||||||||||
Constant-won (1) |
(12) | 2 | |||||||||||||||
Translated earnings contract loss (3) |
1,201 | 758 | 0.64 | ||||||||||||||
Acquisition-related costs (4) |
80 | 74 | 0.06 | ||||||||||||||
Discrete tax items and other |
(111) | (0.09) | |||||||||||||||
Litigation, regulatory and other legal matters (6) |
55 | 70 | 0.06 | ||||||||||||||
Restructuring, impairment and other charges (7) |
11 | 7 | 0.01 | ||||||||||||||
Equity in earnings of affiliated companies (8) |
14 | 14 | 13 | 0.01 | |||||||||||||
Adjustments related to acquisitions (9) |
15 | 12 | 0.01 | ||||||||||||||
Pension mark-to-market adjustment (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 |
$ |
2,373 |
$ |
55 |
$ |
513 |
$ |
404 | 21.2% |
$ |
0.34 |
(a) |
Based upon statutory tax rates in the specific jurisdiction for each event. |
See Reconciliation of Non-GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Three Months Ended September 30, 2016
(Unaudited; amounts in millions, except per share amounts)
|
|||||||||||||||||
|
Income |
Effective |
|||||||||||||||
|
before |
tax |
|||||||||||||||
|
Net |
Equity |
income |
Net |
(benefit) |
Per |
|||||||||||
|
sales |
earnings |
taxes |
income |
rate (a) |
share |
|||||||||||
|
|||||||||||||||||
As reported |
$ |
2,507 |
$ |
19 |
$ |
257 |
$ |
284 | (10.5%) |
$ |
0.26 | ||||||
Constant-yen (1) |
(31) | (13) | (13) | (0.01) | |||||||||||||
Constant-won (1) |
10 | 7 | 0.01 | ||||||||||||||
Translated earnings contract loss (3) |
237 | 149 | 0.14 | ||||||||||||||
Acquisition-related costs (4) |
15 | 11 | 0.01 | ||||||||||||||
Discrete tax items and other |
6 | 0.01 | |||||||||||||||
Restructuring, impairment and other charges (7) |
11 | 9 | 0.01 | ||||||||||||||
Adjustments related to acquisitions (9) |
(49) | (41) | (0.04) | ||||||||||||||
Pension mark-to-market adjustment (10) |
26 | 17 | 0.02 | ||||||||||||||
Taiwan power outage (12) |
5 | 4 | |||||||||||||||
Core performance measures |
$ |
2,476 |
$ |
19 |
$ |
499 |
$ |
433 | 13.2% |
$ |
0.39 |
(a)Based upon statutory tax rates in the specific jurisdiction for each event.
See Reconciliation of Non-GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Three Months Ended December 31, 2016
(Unaudited; amounts in millions, except per share amounts)
|
|||||||||||||||||
|
Income |
||||||||||||||||
|
before |
Effective |
|||||||||||||||
|
Net |
Equity |
income |
Net |
tax |
Per |
|||||||||||
|
sales |
earnings |
taxes |
income |
rate (a) |
share |
|||||||||||
|
|||||||||||||||||
As reported |
$ |
2,476 |
$ |
165 |
$ |
2,404 |
$ |
1,572 | 34.6% |
$ |
1.47 | ||||||
Constant-yen (1) |
7 | (1) | 11 | 18 | 0.02 | ||||||||||||
Constant-won (1) |
3 | 2 | |||||||||||||||
Translated earnings contract loss (3) |
(1,847) | (1,165) | (1.09) | ||||||||||||||
Acquisition-related costs (4) |
18 | 12 | 0.01 | ||||||||||||||
Discrete tax items and other |
56 | 0.05 | |||||||||||||||
Restructuring, impairment and other charges (7) |
68 | 47 | 0.04 | ||||||||||||||
Equity in earnings of affiliated companies (8) |
(53) | (53) | (33) | (0.03) | |||||||||||||
Adjustments related to acquisitions (9) |
(4) | (4) | |||||||||||||||
Pension mark-to-market adjustment (10) |
7 | 5 | |||||||||||||||
Taiwan power outage (12) |
(8) | (6) | (0.01) | ||||||||||||||
Core performance measures |
$ |
2,483 |
$ |
111 |
$ |
599 |
$ |
504 | 15.9% |
$ |
0.47 |
(a)Based upon statutory tax rates in the specific jurisdiction for each event.
See Reconciliation of Non-GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Year Ended December 31, 2016
(Unaudited; amounts in millions, except per share amounts)
|
||||||||||||||||
|
Year ended December 31, 2016 |
|||||||||||||||
|
Net |
Equity |
Income |
Net |
Effective |
Earnings |
||||||||||
As reported |
$ |
9,390 |
$ |
284 |
$ |
3,692 |
$ |
3,695 |
0% |
$ |
3.23 | |||||
Constant-yen (1) |
50 | 1 | 74 | 57 | 0.19 | |||||||||||
Constant-won (1) |
11 | 8 | (0.03) | |||||||||||||
Translated earnings contract loss (3) |
448 | 282 | 0.25 | |||||||||||||
Acquisition-related costs (4) |
127 | 107 | 0.09 | |||||||||||||
Discrete tax items and other |
(27) | (0.02) | ||||||||||||||
Litigation, regulatory and other legal matters (6) |
55 | 70 | 0.06 | |||||||||||||
Restructuring, impairment and other charges (7) |
199 | 138 | 0.12 | |||||||||||||
Equity in earnings of affiliated companies (8) |
(37) | (37) | (18) | (0.02) | ||||||||||||
Adjustments related to acquisitions (9) |
(49) | (42) | (0.04) | |||||||||||||
Pension mark-to-market adjustment (10) |
67 | 44 | 0.04 | |||||||||||||
Gain on realignment of equity investment (11) |
(2,676) | (2,676) | (2.34) | |||||||||||||
Taiwan power outage (12) |
17 | 13 | 0.01 | |||||||||||||
Core performance measures |
$ |
9,440 |
$ |
248 |
$ |
1,928 |
$ |
1,651 |
14.4% |
$ |
1.55 |
(a)Based upon statutory tax rates in the specific jurisdiction for each event.
See Reconciliation of Non-GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Gross Margin and Selling, General and Administrative Expenses
Three Months Ended March 31, 2017, June 30, 2017, September 30, 2017 and December 31, 2017
(Unaudited; amounts in millions)
|
||||||||||||||||||||||||
|
Three Months Ended |
Three Months Ended |
Three Months Ended |
Three Months Ended |
||||||||||||||||||||
|
March 31, 2017 |
June 30, 2017 |
September 30, 2017 |
December 31, 2017 |
||||||||||||||||||||
|
Selling, |
Selling, |
Selling, |
Selling, |
||||||||||||||||||||
|
Gross |
general |
Gross |
general |
Gross |
general |
Gross |
general |
||||||||||||||||
|
margin |
and admin |
margin |
and admin |
margin |
and admin |
margin |
and admin |
||||||||||||||||
|
||||||||||||||||||||||||
As reported |
$ |
957 |
$ |
316 |
$ |
985 |
$ |
379 |
$ |
1,056 |
$ |
372 |
$ |
1,034 |
$ |
400 | ||||||||
Constant-yen (1) |
45 | 31 | 27 | 36 | ||||||||||||||||||||
Constant-won (1) |
4 | 7 | 7 | 11 | ||||||||||||||||||||
Acquisition-related costs (4) |
4 | 3 | (3) | |||||||||||||||||||||
Litigation, regulatory and |
12 | |||||||||||||||||||||||
Restructuring, impairment and |
32 | (8) | (9) | |||||||||||||||||||||
Adjustments related to acquisitions (9) |
4 | 2 | 7 | |||||||||||||||||||||
Pension mark-to-market adjustment (10) |
(15) | (6) | ||||||||||||||||||||||
Core performance measures |
$ |
1,010 |
$ |
332 |
$ |
1,055 |
$ |
358 |
$ |
1,093 |
$ |
372 |
$ |
1,081 |
$ |
389 |
See Reconciliation of Non-GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Gross Margin and Selling, General and Administrative Expenses
Three Months Ended March 31, 2016, June 30, 2016, September 30, 2016 and December 31, 2016
(Unaudited; amounts in millions)
|
||||||||||||||||||||||||
|
Three Months Ended |
Three Months Ended |
Three Months Ended |
Three Months Ended |
||||||||||||||||||||
|
March 31, 2016 |
June 30, 2016 |
September 30, 2016 |
December 31, 2016 |
||||||||||||||||||||
|
Selling, |
Selling, |
Selling, |
Selling, |
||||||||||||||||||||
|
Gross |
general |
Gross |
general |
Gross |
general |
Gross |
general |
||||||||||||||||
|
margin |
and admin |
margin |
and admin |
margin |
and admin |
margin |
and admin |
||||||||||||||||
|
||||||||||||||||||||||||
As reported |
$ |
764 |
$ |
303 |
$ |
951 |
$ |
499 |
$ |
1,041 |
$ |
302 |
$ |
990 |
$ |
368 | ||||||||
Constant-yen (1) |
56 | 19 | (12) | 11 | ||||||||||||||||||||
Constant-won (1) |
(4) | 2 | 9 | 1 | 3 | |||||||||||||||||||
Acquisition-related costs (3) |
3 | (62) | 2 | 7 | ||||||||||||||||||||
Litigation, regulatory and |
(52) | |||||||||||||||||||||||
Restructuring, impairment and |
29 | 13 | 8 | (4) | 52 | (15) | ||||||||||||||||||
Adjustments related to acquisitions (9) |
11 | (15) | 49 | 4 | ||||||||||||||||||||
Pension mark-to-market adjustments (10) |
(7) | (27) | (26) | (7) | ||||||||||||||||||||
Taiwan power outage (12) |
18 | 5 | (7) | |||||||||||||||||||||
Core performance measures |
$ |
845 |
$ |
307 |
$ |
1,006 |
$ |
343 |
$ |
1,053 |
$ |
329 |
$ |
1,049 |
$ |
350 |
See Reconciliation of Non-GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Display Technologies Segment
Three Months Ended March 31, 2017, June 30, 2017, September 30, 2017 and December 31, 2017
(Unaudited; amounts in millions)
|
||||||||||||||||||||||||
|
Three Months Ended |
Three Months Ended |
Three Months Ended |
Three Months Ended |
||||||||||||||||||||
|
March 31, 2017 |
June 30, 2017 |
September 30, 2017 |
December 31, 2017 |
||||||||||||||||||||
|
Net |
Net |
Net |
Net |
Net |
Net |
Net |
Net |
||||||||||||||||
|
sales |
income |
sales |
income |
sales |
income |
sales |
income |
||||||||||||||||
|
||||||||||||||||||||||||
As reported |
$ |
736 |
$ |
249 |
$ |
748 |
$ |
211 |
$ |
768 |
$ |
203 |
$ |
745 |
$ |
168 | ||||||||
Constant-yen (1) |
46 | 33 | 29 | 23 | 27 | 20 | 39 | 27 | ||||||||||||||||
Constant-won (1) |
3 | 5 | 5 | (1) | 8 | |||||||||||||||||||
Translated earnings contract gain (3) |
(48) | (43) | (33) | (45) | ||||||||||||||||||||
Discrete tax items and other |
38 | |||||||||||||||||||||||
Litigation, regulatory and |
(9) | |||||||||||||||||||||||
Restructuring, impairment |
13 | |||||||||||||||||||||||
Adjustments related to acquisitions (9) |
(2) | (1) | (5) | |||||||||||||||||||||
Core performance measures |
$ |
782 |
$ |
226 |
$ |
777 |
$ |
208 |
$ |
795 |
$ |
195 |
$ |
783 |
$ |
191 |
See Reconciliation of Non-GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Display Technologies Segment
Three Months Ended March 31, 2016, June 30, 2016, September 30, 2016 and December 31, 2016
(Unaudited; amounts in millions)
|
||||||||||||||||||||||||
|
Three Months Ended |
Three Months Ended |
Three Months Ended |
Three Months Ended |
||||||||||||||||||||
|
March 31, 2016 |
June 30, 2016 |
September 30, 2016 |
December 31, 2016 |
||||||||||||||||||||
|
Net |
Net |
Net |
Net |
Net |
Net |
Net |
Net |
||||||||||||||||
|
sales |
income |
sales |
income |
sales |
income |
sales |
income |
||||||||||||||||
|
||||||||||||||||||||||||
As reported |
$ |
705 |
$ |
209 |
$ |
801 |
$ |
204 |
$ |
902 |
$ |
279 |
$ |
830 |
$ |
243 | ||||||||
Constant-yen (1) |
61 | 41 | 12 | 14 | (30) | (9) | 7 | 8 | ||||||||||||||||
Constant-won (1) |
(3) | 2 | 7 | 2 | ||||||||||||||||||||
Translated earnings contract gain (3) |
(58) | (33) | (2) | (34) | ||||||||||||||||||||
Restructuring, impairment |
13 | 31 | ||||||||||||||||||||||
Adjustments related to acquisitions (9) |
(9) | 12 | (41) | (4) | ||||||||||||||||||||
Pension mark-to-market adjustment (10) |
1 | |||||||||||||||||||||||
Taiwan power outage (12) |
7 | 2 | (3) | |||||||||||||||||||||
Core performance measures |
$ |
766 |
$ |
193 |
$ |
813 |
$ |
206 |
$ |
872 |
$ |
236 |
$ |
837 |
$ |
244 |
See Reconciliation of Non-GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Display Technologies Segment
Year Ended December 31, 2017 and 2016
(Unaudited; amounts in millions)
|
|||||||||||
|
Year ended |
Year ended |
|||||||||
|
December 31, 2017 |
December 31, 2016 |
|||||||||
|
Sales |
Net |
Sales |
Net |
|||||||
As reported |
$ |
2,997 | 831 |
$ |
3,238 |
$ |
935 | ||||
Constant-yen (1) |
141 | 103 | 50 | 54 | |||||||
Constant-won (1) |
(1) | 21 | 8 | ||||||||
Translated earnings contract gain (3) |
(169) | (127) | |||||||||
Discrete tax items and other |
38 | ||||||||||
Litigation, regulatory and |
(9) | ||||||||||
Restructuring, impairment and |
13 | 44 | |||||||||
Adjustments related to acquisitions (9) |
(8) | (42) | |||||||||
Pension mark-to-market adjustment (10) |
1 | ||||||||||
Taiwan power outage (12) |
6 | ||||||||||
Core performance measures |
$ |
3,137 |
$ |
820 |
$ |
3,288 |
$ |
879 |
See Reconciliation of Non-GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Specialty Materials Segment
Three Months Ended March 31, 2017, June 30, 2017, September 30, 2017 and December 31, 2017
(Unaudited; amounts in millions)
|
||||||||||||||||||||||||
|
Three Months Ended |
Three Months Ended |
Three Months Ended |
Three Months Ended |
||||||||||||||||||||
|
March 31, 2017 |
June 30, 2017 |
September 30, 2017 |
December 31, 2017 |
||||||||||||||||||||
|
Net |
Net |
Net |
Net |
Net |
Net |
Net |
Net |
||||||||||||||||
|
sales |
income |
sales |
income |
sales |
income |
sales |
income |
||||||||||||||||
|
||||||||||||||||||||||||
As reported |
$ |
300 |
$ |
48 |
$ |
337 |
$ |
56 |
$ |
373 |
$ |
72 |
$ |
393 |
$ |
73 | ||||||||
Constant-won (1) |
1 | 1 | 1 | |||||||||||||||||||||
Restructuring, impairment and |
2 | |||||||||||||||||||||||
Core performance measures |
$ |
300 |
$ |
48 |
$ |
337 |
$ |
59 |
$ |
373 |
$ |
73 |
$ |
393 |
$ |
74 |
See Reconciliation of Non-GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Specialty Materials Segment
Three Months Ended March 31, 2016, June 30, 2016, September 30, 2016 and December 31, 2016
(Unaudited; amounts in millions)
|
||||||||||||||||||||||||
|
Three Months Ended |
Three Months Ended |
Three Months Ended |
Three Months Ended |
||||||||||||||||||||
|
March 31, 2016 |
June 30, 2016 |
September 30, 2016 |
December 31, 2016 |
||||||||||||||||||||
|
Net |
Net |
Net |
Net |
Net |
Net |
Net |
Net |
||||||||||||||||
|
sales |
income |
sales |
income |
sales |
income |
sales |
income |
||||||||||||||||
|
||||||||||||||||||||||||
As reported |
$ |
227 |
$ |
26 |
$ |
266 |
$ |
38 |
$ |
295 |
$ |
42 |
$ |
336 |
$ |
68 | ||||||||
Constant-yen (1) |
||||||||||||||||||||||||
Constant-won (1) |
1 | 1 | 1 | 1 | ||||||||||||||||||||
Restructuring, impairment and |
8 | 6 | 1 | |||||||||||||||||||||
Pension mark-to-market adjustment (10) |
||||||||||||||||||||||||
Taiwan power outage (12) |
4 | 2 | (3) | |||||||||||||||||||||
Core performance measures |
$ |
227 |
$ |
35 |
$ |
266 |
$ |
49 |
$ |
295 |
$ |
45 |
$ |
336 |
$ |
67 |
See Reconciliation of Non-GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Specialty Materials Segment
Year Ended December 31, 2017 and 2016
(Unaudited; amounts in millions)
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
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|
Year ended |
Year ended |
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|
December 31, 2017 |
December 31, 2016 |
|||||||||
|
Sales |
Net |
Sales |
Net |
|||||||
As reported |
$ |
1,403 | 249 |
$ |
1,124 |
$ |
174 | ||||
Constant-yen (1) |
|||||||||||
Constant-won (1) |
3 | 4 | |||||||||
Restructuring, impairment and other charges (7) |
2 | 15 | |||||||||
Taiwan power outage (12) |
3 | ||||||||||
Core performance measures |
$ |
1,403 |
$ |
254 |
$ |
1,124 |
$ |
196 |
See Reconciliation of Non-GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
Reconciliation of Non-GAAP Measures
In managing the Company and assessing our financial performance, we supplement certain measures provided by our consolidated financial statements with measures adjusted to exclude certain items, to arrive at core performance measures. We believe that reporting core performance measures provides investors greater transparency to the information used by our management team to make financial and operational decisions. Corning has adopted the use of constant currency reporting for the Japanese yen and South Korean won, and, beginning in the first quarter of 2018, uses an internally derived yen-to-dollar management rate of ¥107 and won-to-dollar management rate of ₩1,175. The Company believes that the use of constant currency reporting allows investors to understand our results without the volatility of currency fluctuations, and reflects the underlying economics of the translated earnings contract used to mitigate the impact of changes in currency exchange rates on our earnings and cash flows.
Net sales, equity in earnings of affiliated companies and net income are adjusted to exclude the impacts of changes in the Japanese yen and the South Korean won, gains and losses on our translated earnings contracts, acquisition-related costs, certain discrete tax items, restructuring and restructuring-related charges, certain litigation-related expenses, pension mark-to-market adjustments and other items which do not reflect on-going operating results of the Company or our equity affiliates. Management’s discussion and analysis on our reportable segments has also been adjusted for these items, as appropriate. These measures are not prepared in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”). We believe investors should consider these non-GAAP measures in evaluating our results as they are more indicative of our core operating performance and how management evaluates our operational results and trends. These measures are not, and should not be viewed as a substitute for GAAP reporting measures. See “Items which we exclude from GAAP measures to arrive at Core performance measures” for details on core performance measures.
Items which we exclude from GAAP measures to arrive at Core performance measures are as follows:
(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, 2018, we use an internally derived management rate of ¥107, 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 ₩1,175, which is closely aligned to our current won 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 South Korean won. |
(2) |
Translation gain on Japanese yen-denominated debt: The gain on the translation of our Yen-denominated debt to U.S. dollars. |
(3) |
Translated earnings contract gain (loss): We have excluded the impact of the realized and unrealized gains and losses of our Japanese yen and South Korean won-denominated foreign currency hedges related to translated earnings, as well as the unrealized gains and losses of our euro, New Taiwan dollar and Chinese yuan-denominated foreign currency hedges related to translated earnings. |
(4) |
Acquisition-related costs: These expenses include intangible amortization, inventory valuation adjustments and external acquisition-related deal costs. |
(5) |
Discrete tax items and other tax-related adjustments: This represents the removal of discrete adjustments (e.g. 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. |
(6) |
Litigation, regulatory and other legal matters: Includes amounts related to legal matters. |
(7) |
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. |
(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) |
Adjustments related to acquisitions: Includes fair value adjustments to the Corning Precision Materials indemnity asset related to contingent consideration, post-combination expenses and other acquisition and disposal adjustments. |
(10) |
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. |
(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 includes asset write-offs and charges for facility repairs, offset somewhat by partial reimbursement through our insurance program. |
(13) |
Adjustments to remove the impact of the Tax Cuts and Job Act: Includes a provisional amount related to the one-time mandatory tax on unrepatriated foreign earnings, a provisional amount related to the remeasurement of U.S. deferred tax assets and liabilities, changes in valuation allowances as a result of the 2017 Tax Act, and adjustments for the elimination of foreign tax credits. |