Corning Earnings Up More Than 75% in First Quarter Before Special Items; Company beats Wall Street consensus and revises full-year guidance to reflect bright outlook.Business/High Tech Editors CORNING Corning, city (1990 pop. 11,938), Steuben co., S N.Y., on the Chemung River, in a dairy and vineyard region; settled 1788, inc. as a city 1890. The glass industry for which the city is famous began in 1868. , N.Y.--(BUSINESS WIRE)--April 24, 2000 Corning Incorporated Corning Incorporated NYSE: GLW is an American manufacturer of glass, ceramics and related materials, primarily for industrial and scientific applications. The company was known until 1989 as Corning Glass Works. (NYSE NYSE See: New York Stock Exchange : GLW GLW Glasgow Airport (UK) GLW Gross Laden Weight GLW Good Lady Wife (Australia) ) reported today that its first-quarter earnings before special items increased more than 75%, exceeding Wall Street's revised consensus by 9 cents. While virtually all of its high-technology businesses performed well above expectations, demand was especially strong for the company's optical fiber and optical-networking products used to support the growth of Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. traffic. The company reported first-quarter earnings of $0.64 per share before special items, an increase of 78%, compared with $0.36 per share in 1999. Income for the first quarter of 2000 totaled $178.1 million before special items, an increase of 93%, as compared with $92.5 million in 1999. Commenting on the quarter, Corning Chairman and Chief Executive Officer, Roger G. Ackerman, said, "The quarter was a home run for Corning. We are reaping the benefits of our efforts to concentrate every aspect of the company on the development of new products for optical communications Optical communications The transmission of speech, data, video, and other information by means of the visible and the infrared portion of the electromagnetic spectrum. and other high-growth markets." First-quarter sales were $1.35 billion, an increase of 36% as compared with 1999 first- quarter sales of $997 million. Excluding the impact of acquisitions, sales increased 28%. Sales of optical fiber remained strong, with overall demand increasing more than 50%, and demand for Corning(R) LEAF(R) optical fiber tripling in the quarter. Sales in the Photonic Dealing with light (photons). See photon and photonics. Technologies Division increased 90%, led by demand for the company's optical amplifiers A device that boosts light signals in an optical fiber network. Unlike regenerators, which have to convert light to electricity in order to amplify it and then convert it back again to light, the optical amplifier amplifies the light signal itself. . Sales of flat-panel display flat-pan·el display n. A thin lightweight video display used in laptop and notebook computers and employing liquid crystals, electroluminescence, or a similar alternative to cathode-ray tubes. Also called flat screen. glass used in computer monitors grew at a rate of 45%. Equity earnings were up nearly 60% in the quarter, due primarily to excellent performance at Samsung Corning Precision Glass  The of this article or section may be compromised by "peacock terms".You can help Wikipedia by removing peacock terms. Company, Ltd., a Korean Korean, language of uncertain ancestry. It is thought by some scholars to be akin to Japanese, by others to be a member of the Altaic subfamily of the Ural-Altaic family of languages (see Uralic and Altaic languages), and by still others to be unrelated to any known manufacturer of flat-panel display glass. The company reported first-quarter 2000 pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income per share of $0.68, an increase of 79%, compared with $0.38 per share in the first quarter of 1999. Pro forma net income was $188.3 million in first quarter 2000, an increase of 92% as compared with $97.9 million in the same period of 1999. Pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. exclude amortization of purchased intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. and goodwill, purchased in-process R&D, one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. acquisition costs, discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. and other non-recurring items. Going forward, Corning will report pro forma earnings as its primary performance measure. Commenting on the company's outlook for 2000, Ackerman said, "Given the strength of the first-quarter results and the market's phenomenal response to products that deliver on the demand for ever-increasing bandwidth bandwidth Measurement of the capacity of a communications signal. For digital signals, the bandwidth is the data speed or rate, measured in bits per second (bps). For analog signals, it is the difference between the highest and lowest frequency components, measured in hertz , we anticipate pro forma earnings growth this year of about 35%, including announced acquisitions. We are raising our full-year pro forma earnings guidance to $2.70 to $2.75 per share to reflect this strong outlook. "The quarter fuels our long-held belief that the penetration The successful unauthorized breach of a security perimeter. See penetration test. of optical technology in the world's communication network has only just begun. Corning will capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the expansion of the optical layer by adding capacity around the world, successfully integrating our recent acquisitions, and continuing to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution our growth strategy at a rapid pace. I am confident we will accomplish all three." Corning also recorded a first-quarter, pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge of $89.0 million ($69.1 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. , or $0.25 per share) related to acquisitions. In addition, Corning recorded a pre-tax gain of $6.8 million ($4.2 million after tax), or $0.02 per share, for a non-operating gain related to the sale of Quanterra Incorporated. Finally, Corning incurred an after-tax charge of $36.3 million, or $0.13 per share, to impair im·pair tr.v. im·paired, im·pair·ing, im·pairs To cause to diminish, as in strength, value, or quality: an injury that impaired my hearing; a severe storm impairing communications. its entire investment in Pittsburgh Pittsburgh (pĭts`bərg), city (1990 pop. 369,879), seat of Allegheny co., SW Pa., at the confluence of the Allegheny and the Monongahela rivers, which there form the Ohio River; inc. 1816. Corning Corporation. Including these non-recurring items, Corning's net income for the first quarter of 2000 totaled $76.9 million, or $0.28 per share. This compares with first quarter 1999 net income of $92.5 million, or $0.36 per share. During the first quarter, Corning announced a definitive agreement for a stock-for-stock merger with NetOptix Corporation. The transaction has secured regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approval and is on track to close in mid-May n. 1. the middle part of May. Noun 1. mid-May - the middle part of May period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue period" . Established in 1851, Corning Incorporated creates leading-edge technologies for the fastest-growing markets of the world's economy. Corning manufactures optical fiber, cable and photonic products for the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. industry; and high-performance Adj. 1. high-performance - modified to give superior performance; "a high-performance car" superior - of high or superior quality or performance; "superior wisdom derived from experience"; "superior math students" displays and components for television and other communications-related industries. The company also uses advanced materials Advanced Materials is a leading peer-reviewed materials science journal published every two weeks. Advanced Materials includes Communications, Reviews, and Feature Articles from the cutting edge of materials science, including topics in chemistry, physics, to manufacture products for scientific, semiconductor and environmental markets. Corning's revenues in 1999 were $4.7 billion. More information on the company is available at www.corning.com. Forward-Looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. and Cautionary Statements Except for historical information and discussions contained herein, statements included in this release may constitute "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements involve a number of risks, uncertainties and other factors that could cause results to differ materially, as discussed in the company's filings with the Securities and Exchange Commission. Corning and NetOptix have filed a proxy See proxy server. (networking) proxy - A process that accepts requests for some service and passes them on to the real server. A proxy may run on dedicated hardware or may be purely software. statement/prospectus describing the merger with the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Securities and Exchange Commission (SEC). In addition, Corning and NetOptix have each filed other information and documents concerning the merger and their business with the SEC. WE URGE URGE Uniform Rating of Generating Equipment INVESTORS IN THE COMMON STOCK OF NETOPTIX AND CORNING TO REVIEW THE PROXY STATEMENT/ PROSPECTUS A document, notice, circular, advertisement, letter, or communication in written form or by radio or television that offers any security for sale, or confirms the sale of any security. AND OTHER INFORMATION TO BE FILED WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. These documents are available without charge on the SEC's web site at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. and may be obtained without charge from the Corporate Secretary, Corning Incorporated, One Riverfront riv·er·front n. The land or property along a river. Plaza For the hotel in New York City, see . Plaza (IPA /'plaθa/ or /'plasa/ , Corning, NY 14831 (tele ("long distance") Operations performed remotely or by telephone. The "tele" prefix is used to designate many technologies such as telecommunications and teleconferencing. : 607-974-9000) or the Chief Financial Officer, NetOptix Corporation, c/o Leisegang Medical, Inc., 6401 Congress Ave AVE Avenue AVE Average AVE Alta Velocidad Espanola (train between Madrid and Seville) AVE Alta Velocidad Española (Spanish: High Speed Train) AVE Audio Video Entertainment AVE Advertising Value Equivalent ., Suite 160, Boca Raton Boca Raton (bō`kə rətōn`), city (1990 pop. 61,492), Palm Beach co., SE Fla., on the Atlantic; inc. 1925. Boca Raton is a popular resort and retirement community that experienced significant industrial development in the 1970s and 80s. , FL 33487 (tele: 561-994-0202, ext. 227). INVESTORS SHOULD READ THE PROXY STATEMENT/PROSPECTUS CAREFULLY BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS.
Corning Incorporated and Subsidiary Companies
Consolidated Statements of Income
(Unaudited; in millions, except per share amounts)
Three Months Ended March 31,
--------------------------------
2000 1999
--------------------------------
Revenues
Net sales $ 1,351.4 $ 997.0
Royalty, interest,
and dividend income 23.5 10.0
Non-operating gains 6.8
--------------------------------
1,381.7 1,007.0
Deductions
Cost of sales 787.8 613.9
Selling, general
and administrative expenses 199.8 152.2
Research, development
and engineering expenses 110.1 83.4
Amortization of purchased
intangibles including goodwill 13.1 6.9
Interest expense 24.2 19.7
Non-recurring charges 89.0
Other, net 20.9 9.9
--------------------------------
Income before taxes 136.8 121.0
Taxes on income 54.9 37.3
--------------------------------
Income before minority
interest and equity earnings 81.9 83.7
Minority interest
in earnings of subsidiaries (2.6) (10.1)
Dividends on convertible
preferred securities of subsidiary (2.3)
Equity in earnings
of associated companies 33.9 21.2
Impairment of equity investment (36.3)
--------------------------------
Net Income $ 76.9 $ 92.5
================================
Basic Earnings Per Share $ 0.28 $ 0.37
================================
Diluted Earnings Per Share $ 0.28 $ 0.36
================================
Dividends Declared $ 0.18 $ 0.18
================================
Shares used in computing
earnings per share
Basic earnings per share 270.4 248.4
================================
Diluted earnings per share 277.3 260.4
================================
The accompanying notes are an integral part of these statements.
Corning Incorporated and Subsidiary Companies
Pro Forma Consolidated Statements of Income
Excluding Amortization of Purchased Intangibles and Goodwill,
Purchased In-Process Research and Development,
Acquisition-Related Costs and Non-Recurring Items
(In millions, except per share amounts)
Three Months Ended March 31,
--------------------------------
2000 1999
--------------------------------
Revenues
Net sales $1,351.4 $997.0
Royalty, interest,
and dividend income 23.5 10.0
----------------- -----------------
1,374.9 1,007.0
Deductions
Cost of sales 787.8 613.9
Selling, general
and administrative expenses 199.8 152.2
Research, development
and engineering expenses 110.1 83.4
Interest expense 24.2 19.7
Other, net 20.9 9.9
----------------- -----------------
Income before taxes 232.1 127.9
Taxes on income 75.1 38.8
----------------- -----------------
Income before minority
interest and equity earnings 157.0 89.1
Minority interest
in earnings of subsidiaries (2.6) (10.1)
Dividends on convertible
preferred securities of subsidiary (2.3)
Equity in earnings
of associated companies 33.9 21.2
----------------- -----------------
Pro Forma Net Income $188.3 $97.9
================= =================
Pro Forma Basic
Earnings Per Share $0.70 $0.39
================= =================
Pro Forma Diluted
Earnings Per Share $0.68 $0.38
================= =================
Dividends Declared $0.18 $0.18
================= =================
Shares used in computing
pro forma earnings per share
Basic earnings per share 270.4 248.4
================= =================
Diluted earnings per share 277.3 260.4
================= =================
The above pro forma amounts for the quarter ended March 31, 2000
have been adjusted to eliminate $13.1 million ($10.2 million after
tax) or $0.04 per share of amortization of purchased intangibles and
goodwill, $42 million ($25.7 million after tax) or $0.09 per share of
in-process research and development charges, $47 million ($43.4
million after tax) or $0.16 per share of transaction costs from the
Oak acquisition, $36.3 million after tax or $0.13 per share for the
impairment of the entire equity investment in Pittsburgh Corning
Corporation, and $6.8 million ($4.2 million after tax) or $0.02 per
share for a non-operating gain related to the sale of Quanterra
Incorporated.
The above pro forma amounts for the quarter ended March 31, 1999
have been adjusted to eliminate $6.9 million ($5.4 million after tax)
or $0.02 per share of amortization of purchased intangibles and
goodwill.
PRO FORMA
Corning Incorporated and Subsidiary Companies
Condensed Consolidated Balance Sheets
(Unaudited; in millions)
March 31, 2000 Dec. 31, 1999
-------------- -------------
Assets
Current Assets
Cash and short-term
investments $ 1,313.1 $ 280.4
Accounts receivable, net 1,146.6 872.4
Inventories 787.0 602.2
Deferred taxes on income and
other current assets 253.9 229.2
----------- -----------
Total current assets 3,500.6 1,984.2
Investments 522.0 504.4
Plant and equipment, net 3,629.1 3,201.7
Goodwill and
other intangible assets, net 1,150.3 506.7
Other assets 212.3 329.0
----------- -----------
Total Assets $ 9,014.3 $ 6,526.0
=========== ===========
Liabilities and Shareholders' Equity
Current Liabilities
Loans payable $ 150.1 $ 420.7
Accounts payable 416.7 418.0
Other accrued liabilities 698.2 715.3
----------- -----------
Total current liabilities 1,265.0 1,554.0
Other liabilities 745.8 720.6
Loans payable beyond one year 1,987.8 1,490.4
Minority interest
in subsidiary companies 126.5 284.8
Convertible preferred stock 10.4 13.5
Common shareholders' equity 4,878.8 2,462.7
----------- -----------
Total Liabilities and
Shareholders' Equity $ 9,014.3 $ 6,526.0
=========== ===========
The accompanying notes are an integral part of these statements.
Corning Incorporated and Subsidiary Companies
Notes to Consolidated Financial Statements
Quarter 1, 2000
(1) Information about the performance of Corning's three operating
segments for the first quarter of 2000 and 1999 are below. These
amounts do not include revenues, expenses and equity earnings not
specifically identifiable to segments. Corning has changed the
performance measurement of its operating segments to a new metric
- net income excluding amortization of purchased intangibles and
goodwill, purchased in-process research and development, one-time
acquisition costs, discontinued operations and other non-recurring
items. The segment results for 1999 have been restated to conform
to the new measure.
Three months ended
March 31,
2000 1999
----------- -------
Telecommunications
Net sales $ 893.4 $ 593.3
Research, development
and engineering expenses $ 77.1 $ 56.1
Interest expense $ 15.2 $ 12.4
Segment earnings before
minority interest
and equity earnings $ 107.8 $ 60.4
Minority interest in
earnings of subsidiaries 3.0 (4.3)
Equity in earnings
of associated companies (0.4) 4.0
----------- ---------
Segment net income $ 110.4 $ 60.1
=========== =========
Advanced Materials
Net sales $ 264.2 $ 252.1
Research, development
and engineering expenses $ 27.2 $ 21.9
Interest expense $ 5.5 $ 4.3
Segment earnings before minority
interest and equity earnings $ 21.9 $ 20.0
Minority interest in
earnings of subsidiaries 0.1
Equity in earnings
of associated companies 6.5 4.1
----------- ---------
Segment net income $ 28.4 $ 24.2
=========== =========
Information Display
Net sales $ 187.9 $ 145.7
Research, development
and engineering expenses $ 5.8 $ 5.4
Interest expense $ 3.4 $ 2.6
Segment earnings before
minority interest
and equity earnings $ 19.3 $ 9.4
Minority interest in
earnings of subsidiaries (5.6) (5.9)
Equity in earnings
of associated companies 26.8 12.4
----------- ---------
Segment net income $ 40.5 $ 15.9
=========== =========
Total segments
Net sales $ 1,345.5 $ 991.1
Research, development
and engineering expenses $ 110.1 $ 83.4
Interest expense $ 24.1 $ 19.3
Segment earnings before
minority interest
and equity earnings $ 149.0 $ 89.8
Minority interest in
earnings of subsidiaries (2.6) (10.1)
Equity in earnings
of associated companies 32.9 20.5
----------- ---------
-----------
---------
Segment net income $ 179.3 $ 100.2
=========== =========
===========
=========
A reconciliation of the totals reported for the operating segments
to the applicable line items in the consolidated financial statements
is as follows:
Three months ended
March 31,
2000 1999
---------- ---------
Revenues
Total segment net sales $ 1,345.5 $ 991.1
Non-segment net sales (a) 5.9 5.9
Royalty, interest
and dividend income 23.5 10.0
Non-operating gain 6.8
--------- ----------
Total revenues $ 1,381.7 $ 1,007.0
========= ==========
Net income
Total segment income (b) $ 179.3 $ 100.2
Unallocated items:
Non-segment loss and other (a) (2.2) (0.6)
Non-operating gain 6.8
Amortization of purchased
intangibles and goodwill (c) (13.1) (6.9)
Non-recurring charges (89.0)
Interest income 15.2
Interest expense (0.1) (0.4)
Income tax (d) 15.3 1.8
Equity in earnings
of associated
companies (a) 1.0 0.7
Impairment of equity
investment after tax (36.3)
Dividends on convertible preferred
securities of subsidiary (2.3)
--------- ----------
Net income $ 76.9 $ 92.5
========= ==========
(a) Includes amounts derived from corporate investments.
(b) Includes royalty, interest and dividend income.
(c) Amortization of goodwill and intangibles relates primarily to
the Telecommunications segment.
(d) Includes tax associated with special charges (unless otherwise
noted), interest income, amortization of purchased intangibles
and goodwill and non-operating gains.
(2) On January 28, 2000, Corning merged with Oak Industries, Inc. (Oak
Industries) in a pooling of interests transaction. Oak Industries
shareholders received 0.83 of a share of Corning common stock for
each share of Oak Industries stock owned. Corning issued 14.8
million shares of Corning common stock and 2.7 million options to
purchase Corning common shares to complete the transaction. The
consolidated financial statements for the prior period of 1999
have been restated to include the financial position and results
of operations of Oak Industries. During the first quarter of 2000,
Corning recognized a charge of $47 million ($43.4 million after
tax), or $0.16 per share, for one-time acquisition costs related
to Oak Industries.
(3) In February of 2000, Corning acquired the worldwide optical cable
and hardware business of Siemens AG and the remaining 50% of its
investment in Siecor Corporation and Siecor GmbH (the Siemens
transaction). The purchase price of $1.4 billion (subject to
customary purchase price adjustments) includes approximately $120
million in assumed debt and $145 million in contingent performance
payments to be paid, if earned, over a four-year period. Portions
of the transaction will close at dates into 2001. At March 31,
2000, total cash paid to Siemens approximated $1.1 billion. This
acquisition has been accounted for under the purchase method of
accounting. The purchase price has been allocated based on
estimated fair values at date of acquisition, pending final
determination of certain acquired balances. This preliminary
allocation has resulted in acquired intangibles and goodwill of
approximately $650 million, which is being amortized over lives of
5 to 20 years.
(4) On February 14, 2000, Corning acquired British Telecommunication's
Photonics Research Center for approximately $66 million in cash.
Corning recorded a charge of $42 million ($25.7 million after
tax), or $0.09 per share, for in-process research and development
costs. Remaining purchase price has been recorded as property,
plant and equipment and purchased intangibles and goodwill being
amortized over lives up to 9 years.
(5) Pittsburgh Corning (PCC) is a 50% owned equity investment of
Corning Incorporated and PPG Industries, Inc. On April 16, 2000,
PCC filed for Chapter 11 reorganization in the United States
Bankruptcy Court for the Western District of Pennsylvania. It
indicated that the high costs of defending or settling asbestos
claims, coupled with sharply increasing settlement demands, had
threatened its financial health and left it with no alternative
means of resolving the asbestos claims brought against it. As a
result of this event, Corning recorded an after tax charge of
$36.3 million, or $0.13 per share to impair its entire investment
in PCC.
(6) In January 2000, Corning sold Quanterra Incorporated to Severn
Trent Laboratories for $35 million. In the first quarter of 2000,
Corning recorded a non-operating gain of $6.8 million ($4.2
million after tax), or $0.02 per share, as a result of this
transaction.
(7) Depreciation and amortization charged to operations during the
first quarters of 2000 and 1999 totaled $125.6 million and $101.6
million, respectively.
(8) Excluding the impact of special items, Corning's effective tax
rate was 33% for the first quarter of 2000, and 30.8% for the
first quarter of 1999.
(9) On January 31, 2000, Corning completed an equity offering of 14.95
million shares of common stock generating net proceeds of $2.2
billion. The proceeds were used to repay $98 million of bank debt
assumed in the Oak Industries merger and $372 million of
commercial paper and to fund a portion of the Siemens transaction.
The remaining proceeds of approximately $1.1 billion will be used
for general corporate purposes, including funding Corning's
capital spending program.
(10) In February 2000, Corning completed an offering of
Euro-denominated debt securities, which generated net proceeds of
$485 million. The proceeds were used to finance a portion of the
Siemens transaction.
(11) On February 14, 2000, Corning announced that it had signed a
definitive agreement to acquire NetOptix Corporation for
approximately 12 million shares of Corning common stock. NetOptix
manufactures thin film filters for use in dense wavelength
division multiplexing components. Under the terms of the
agreement, Corning will exchange 0.90 shares of Corning common
stock for each share of NetOptix common stock. Corning will
account for the transaction under the purchase method of
accounting. Based on the average closing price for Corning for a
range of days surrounding the announcement, the transaction is
valued at approximately $2.1 billion, most of which will be
allocated to goodwill and intangibles. Corning currently expects
goodwill and intangibles to be amortized over 10 years and to be
non-tax deductible. Corning expects the transaction to close in
mid-May.
(12) In the fourth quarter of 1999, the United States Bankruptcy Court
for the Northern District of Michigan entered an order confirming
the plan of reorganization filed jointly by Dow Corning
Corporation and the Committee of Tort Claimants ("Joint Plan").
Corning and The Dow Chemical Company each own 50% of the shares of
Dow Corning. On December 21, 1999, however, the Court limited
shareholder releases provided in the Joint Plan to apply to all
claimants who voted in favor of the Joint Plan and not to those
who voted against the Plan or abstained. Appeals from these
December 21, 1999 rulings were taken on a variety of grounds to
the United States District Court for the Eastern District of
Michigan by the proponents, the two shareholders, and parties
objecting to elements of the Joint Plan. Certain parties moved to
dismiss the appeals by the proponents and shareholders as
untimely. The proponents and shareholders also filed motions to
vacate parts of the December 21, 1999 ruling. These motions and
appeals were joined by the Court for coordinated briefing and
argument. On April 12 and 13, 2000, the District Court held a
hearing and permitted extensive oral argument. The Court indicated
that it would rule on the appeals and motions within 30 days. It
is probable that the District Court's ruling will be subject to
further appellate review. The timing and eventual outcome of these
proceedings, including any subsequent appeals, remain uncertain.
Further details concerning these proceedings appear in Corning's
Form 10-K/A for 1999.
Corning Incorporated and Subsidiary Companies
(In millions, except per share amounts)
Income Statements (GAAP)
Exhibit 1
2000 1999
-------------------- -------------------
Q1 TOTAL Q1 Q2
-------- --------- --------- --------
Revenues
Net sales 1,351.4 $ 1,351.4 $ 997.0 $1,129.7
Royalty, interest and
dividend income 23.5 23.5 10.0 11.3
Non-operating gains 6.8 6.8
-------- --------- --------- --------
1,381.7 1,381.7 1,007.0 1,141.0
Deductions
Cost of sales 787.8 787.8 613.9 693.3
Selling, general and
administrative expenses 199.8 199.8 152.2 151.2
Research, development and
engineering expenses 110.1 110.1 83.4 88.5
Amortization of purchased
intangibles 13.1 13.1 6.9 7.0
Interest expense 24.2 24.2 19.7 20.4
Non-recurring charges 89.0 89.0
Other, net 20.9 20.9 9.9 10.7
-------- --------- --------- --------
Income from continuing
operations before taxes on
income 136.8 136.8 121.0 169.9
Taxes on income from
continuing operations 54.9 54.9 37.3 52.3
-------- --------- --------- --------
Income from continuing
operations before minority
interest and equity
earnings 81.9 81.9 83.7 117.6
Minority interest in
earnings of subsidiaries (2.6) (2.6) (10.1) (17.4)
Dividends on convertible
preferred securities of
subsidiary (2.3)
Equity in earnings of
associated companies 33.9 33.9 21.2 30.8
Impairment of equity
investment (36.3) (36.3)
-------- --------- --------- --------
Income from continuing
operations 76.9 76.9 92.5 131.0
Income from discontinued
operations, net of income
taxes
-------- --------- --------- --------
Net income $ 76.9 $ 76.9 $ 92.5 $ 131.0
========= ========= ========= ========
Diluted earnings per share:
Continuing operations $ 0.28 $ 0.28 $ 0.36 $ 0.50
Discontinued operations
-------- --------- --------- --------
$ 0.28 $ 0.28 $ 0.36 $ 0.50
========= ========= ========= ========
Shares used in computing
earnings per share:
Diluted earnings per
share 277.3 277.3 260.4 265.3
========= ========= ========= ========
1999
--------------------------------
Q3 Q4 TOTAL
---------- --------- ---------
Revenues
Net sales $ 1,245.3 $ 1,369.1 $ 4,741.1
Royalty, interest and
dividend income 8.7 11.4 41.4
Non-operating gains 30.0 30.0
---------- --------- ---------
1,284.0 1,380.5 4,812.5
Deductions
Cost of sales 767.0 856.1 2,930.3
Selling, general and
administrative expenses 172.0 192.0 667.4
Research, development and
engineering expenses 100.2 106.1 378.2
Amortization of purchased
intangibles 7.3 6.6 27.8
Interest expense 26.0 27.1 93.2
Non-recurring charges 15.5 (14.1) 1.4
Other, net 11.9 6.8 39.3
---------- --------- ---------
Income from continuing
operations before taxes on
income 184.1 199.9 674.9
Taxes on income from
continuing operations 55.7 61.8 207.1
---------- --------- ---------
Income from continuing
operations before minority
interest and equity
earnings 128.4 138.1 467.8
Minority interest in
earnings of subsidiaries (18.6) (20.7) (66.8)
Dividends on convertible
preferred securities of
subsidiary (2.3)
Equity in earnings of
associated companies 32.1 28.2 112.3
Impairment of equity
investment
---------- --------- ---------
Income from continuing
operations 141.9 145.6 511.0
Income from discontinued
operations, net of income
taxes 4.8 4.8
---------- --------- ---------
Net income 141.9 $ 150.4 $ 515.8
========== ========= =========
Diluted earnings per share:
Continuing operations 0.54 $ 0.55 $ 1.95
Discontinued operations 0.02 0.02
---------- --------- ---------
0.54 $ 0.57 $ 1.97
========== ========= =========
Shares used in computing
earnings per share:
Diluted earnings per
share 265.7 266.6 265.1
========== ========= =========
Corning Incorporated and Subsidiary Companies
Pro Forma Income Statements
Exhibit 2
2000
--------------------
Q1 TOTAL
--------- ---------
Revenues
Net sales $ 1,351.4 $ 1,351.4
Royalty, interest
and dividend income 23.5 23.5
--------- ---------
1,374.9 1,374.9
Deductions
Cost of sales 787.8 787.8
Selling, general
and administrative
expenses 199.8 199.8
Research, development
and engineering expenses 110.1 110.1
Interest expense 24.2 24.2
Other, net 20.9 20.9
--------- ---------
Income from continuing
operations before
taxes on income 232.1 232.1
Taxes on income from
continuing operations 75.1 75.1
--------- ---------
Income from continuing
operations before
minority interest
and equity earnings 157.0 157.0
Minority interest in
earnings of subsidiaries (2.6) (2.6)
Dividends on convertible
preferred securities of
subsidiary
Equity in earnings of
associated companies 33.9 33.9
--------- ---------
Pro Forma Net income $ 188.3 $ 188.3
========= =========
Pro Forma Diluted Earnings
Per Share $ 0.68 $ 0.68
========= =========
Shares used in computing
earnings per share:
Diluted earnings per share 277.3 277.3
========= =========
1999
------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
--------- -------- --------- --------- ------
Revenues
Net sales $ 997.0 $1,129.7 $ 1,245.3 $ 1,369.1 $4,741.1
Royalty, interest
and dividend
income 10.0 11.3 8.7 11.4 41.4
--------- -------- -------- -------- --------
1,007.0 1,141.0 1,254.0 ,380.5 4,782.5
Deductions
Cost of sales 613.9 693.3 767.0 856.1 2,930.3
Selling, general
and administrative
expenses 152.2 151.2 172.0 192.0 667.4
Research,
development
and engineering
expenses 83.4 88.5 100.2 106.1 378.2
Interest expense 19.7 20.4 26.0 27.1 93.2
Other, net 9.9 10.7 11.9 6.8 39.3
--------- -------- -------- --------- -------
Income from
continuing
operations before
taxes on income 127.9 176.9 176.9 192.4 674.1
Taxes on income from
continuing operations 38.8 53.8 51.8 57.7 202.1
--------- -------- -------- --------- -------
Income from
continuing
operations before
minority interest
and equity earnings 89.1 123.1 125.1 134.7 472.0
Minority interest in
earnings of
subsidiaries (10.1) (17.4) (9.1) (20.7) (57.3)
Dividends on
convertible
preferred
securities of
subsidiary (2.3) (2.3)
Equity in earnings of
associated companies 21.2 30.8 32.1 28.2 112.3
--------- -------- -------- --------- -------
Pro Forma Net income $ 97.9 $ 136.5 $ 148.1 $ 142.2 $ 524.7
========= ======== ========= ======== ========
Pro Forma Diluted
Earnings
Per Share $ 0.38 $ 0.52 $ 0.56 $ 0.54 $ 2.00
========= ======== ======== ======== ========
Shares used in
computing
earnings per share:
Diluted earnings
per share 260.4 265.3 265.7 266.6 265.1
========= ======== ======== ======== ========
NOTE TO EDITORS: The following table corrects any previous
version of this table released by Corning Inc.:
Corning Incorporated and Subsidiary Companies
(In millions, except per share amounts)
Exhibit 3
2000
Q1 TOTAL
Net Income
Net Income $ 76.9 $ 76.9
Purchased in-process
research and development 25.7(1) 25.7
Oak acquisition costs 43.4(2) 43.4
Provision for impairment
and restructuring
Impairment of equity investment 36.3(3) 36.3
Non-operating gain (4.2)(4) (4.2)
Net income from
discontinued operations
Income before special items $ 178.1 $ 178.1
Amortization of purchased
intangibles including goodwill 10.2(8) 10.2
Pro Forma Net Income $ 188.3 $ 188.3
Earnings Per Share
Diluted earnings per share:
Net Income $ 0.28 $ 0.28
Purchased in-process
research and development 0.09(1) 0.09
Oak acquisition costs 0.16(2) 0.16
Provision for impairment
and restructuring
Impairment of equity investment 0.13(3) 0.13
Non-operating gain (0.02)(4) (0.02)
Net income from
discontinued operations
Income before special items $ 0.64 $ 0.64
Amortization of purchased
intangibles including goodwill 0.04(8) 0.04
--------------------
Pro Forma Net Income $ 0.68 $ 0.68
====================
Shares used in computing
earnings per share:
Diluted earnings per share 277.3 277.3
1999
Q1 Q2 Q3 Q4 TOTAL
-----------------------------------------------
Net Income
Net Income $ 92.5 $ 131.0 $141.9 $150.4 $515.8
Purchased in-process
research and development
Oak acquisition costs
Provision for impairment
and restructuring 10.0(5) (8.6)(7) 1.4
Impairment of equity investment
Non-operating gain (9.5)(6) (9.5)
Net income from
discontinued operations (4.8) (4.8)
-----------------------------------------------
Income before
special items $ 92.5 $ 131.0 $ 142.4 $ 137.0 $ 502.9
Amortization of
purchased intangibles
including goodwill 5.4(9) 5.5(10) 5.7(11) 5.2(12) 21.8
-----------------------------------------------
Pro Forma Net Income $ 97.9 $136.5 $ 148.1 $ 142.2 $ 524.7
===============================================
Earnings Per Share
Diluted earnings per share:
Net Income $ 0.36 $ 0.50 $ 0.54 $ 0.57 $ 1.97
Purchased in-process
research and development
Oak acquisition costs
Provision for impairment
and restructuring 0.04(5) (0.03)(7) 0.01
Impairment of equity investment
Non-operating gain (0.04)(6) (0.04)
Net income from
discontinued operations (0.02) (0.02)
-----------------------------------------------
Income before
special items $ 0.36 $ 0.50 $ 0.54 $ 0.52 $ 1.92
Amortization of
purchased intangibles
including goodwill 0.02(9) 0.02(10) 0.02(11) 0.02(12) 0.08
-----------------------------------------------
Pro Forma Net Income $ 0.38 $ 0.52 $ 0.56 $ 0.54 $ 2.00
===============================================
Shares used in computing
earnings per share:
Diluted earnings
per share 260.4 265.3 265.7 266.6 265.1
===============================================
(1) Reflects a non-operating charge of $42.0 million ($25.7 million after tax), or $0.09 per share. (2) Reflects a non-operating charge of $47.0 million ($43.4 million after tax), or $0.16 per share. (3) Reflects a non-operating charge of $39.0 million ($36.3 million after tax), or $0.13 per share. (4) Reflects a non-operating gain of $6.8 million ($4.2 million after tax), or $0.02 per share. (5) Reflects a non-operating charge of $15.5 million ($10.0 million after tax), or $0.04 per share. (6) Reflects a non-operating gain of $30.0 million ($9.5 million after tax and minority interest), or $0.04 per share. (7) Reflects a release of restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). reserves totaling $14.1 million ($8.6 million after tax), or $0.03 per share. (8) Reflects the elimination of $13.1 million ($10.2 million after tax), or $0.04 per share of amortization. (9) Reflects the elimination of $6.9 million ($5.4 million after tax), or $0.02 per share of amortization. (10) Reflects the elimination of $7.0 million ($5.5 million after tax), or $0.02 per share of amortization. (11) Reflects the elimination of $7.3 million ($5.7 million after tax), or $0.02 per share of amortization. (12) Reflects the elimination of $6.6 million ($5.2 million after tax), or $0.02 per share of amortization. |
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