Corning Reports Second-Quarter Results.Business & Technology 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)--July 25, 2001 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) ) today reported second-quarter 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. per share of $0.09, compared with $0.31 per share a year ago. The current quarter includes a previously announced pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge of $273 million ($184 million after tax), or $0.20 per share, to write off excess and obsolete inventory Obsolete Inventory Term that refers to inventory that is at the end of its product life cycle and has not seen any sales or usage for a set period of time usually determined by the industry. This type of inventory has to be written down and can cause large losses for a company. in the Photonic Dealing with light (photons). See photon and photonics. Technologies business. 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 results exclude the previously announced $4.8 billion pre-tax second-quarter charge for impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of goodwill and other intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . John W. Loose, president and chief executive officer, said, "Except for the disappointing results in the Photonic Technologies business, the company's second-quarter operating performance was significantly better than expected, primarily due to the strong results in the fiber and cable business. As anticipated, sales of LEAF(R) fiber, our premium high-data-rate optical fiber, remain significantly behind last year. However, we continue to see strong gains in overall fiber sales in Asia, particularly in China. We are also seeing a rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective in the 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. business." Second-Quarter Operating Results The company's second-quarter sales were $1.9 billion, an increase of 5 percent over 2000 second-quarter sales of $1.8 billion. Sales for Photonic Technologies were $158 million, a decline of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 33 percent sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen and year-over-year. Optical fiber volume grew 25 percent versus the second quarter of 2000 due to strong international and single-mode fiber See singlemode fiber. demand. International fiber volume was up more than 70 percent from last year. Pricing of optical fiber remained stable in the quarter on both a year-to-year and sequential One after the other in some consecutive order such as by name or number. basis. Volume of Corning's flat-panel display glass business grew 45 percent, however these gains were largely offset by modest price declines and the translation impact of the weak yen. Equity earnings were up due to strong results from international optical fiber cable ventures, offset by lower earnings from Samsung-Corning 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 glass for conventional TV and computer monitors. Second-Quarter Charges Corning recorded a pre-tax charge of $4.8 billion for the impairment of goodwill and other intangible assets, and an $8 million pre-tax charge for 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). . Including these non-recurring items and the 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, Corning's net loss for the second quarter of 2001 totaled $4.8 billion, or $5.13 per share. This compares with second-quarter 2000 net income of $149 million, or $0.17 per share, which included an 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. charge of $51 million, related to in-process research and development. Second-Half Outlook "The telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. market outlook remains turbulent," Loose said. "We continue to see a very significant decrease in the long-haul long haul n. 1. A long distance: It is a long haul from New York to Los Angeles. 2. A long period of time: Over the long haul the candidates performed well. market in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . The impact of this market decline has been most severe on our sales of LEAF fiber to new carriers and on our photonics photonics, the science and technology based on and concerned with the controlled flow of photons, or light particles. It is the optical equivalent of electronics, and the two technologies coexist in such innovations as optoelectronic integrated circuits. business. We have been able to partially offset the decline in the North America long-haul market with increased sales of single-mode fiber, sales of LEAF fiber in China, and stable pricing. However, we think the photonics business will continue to be weak for the remainder of the year." Loose added, "We have taken aggressive action to reduce our costs with capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. cutbacks, plant closings, and regrettably, staff reductions. Corning also has strong earnings from the flat-panel display business to balance shortfalls in telecommunications, and we remain well-positioned in our other core markets. We believe that the high-technology markets where we've we've Contraction of we have. we've have chosen to compete offer long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. rewards with growth surges as we've seen over the past few years and, occasionally, painful retreats, as we are seeing now. We are encouraged, however, that our market shares in our key businesses have remained stable or are increasing in this difficult period." Conference Call Information The company will host a conference call at 8:30 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT on Thursday Thursday: see week. , July July: see month. 26. To access the call, dial 800-779-1443 or 712-271-0963 and use password A secret word or code used to serve as a security measure against unauthorized access to data. It is normally managed by the operating system or DBMS. However, the computer can only verify the legitimacy of the password, not the legitimacy of the user. See NCSC. : Corning. A replay of the call will begin at approximately 10:30 a.m. and will run through 5 p.m. EDT on Wednesday Wednesday: see week. , Aug. 8. To access the replay, dial 402-530-7645; a password is not required. To listen to a live audio webcast of the call, go to http://www.corning.com/investor_relations/ and follow the instructions. The webcast will be archived on the www.corning.com site for 14 days following the call. Pro forma net income excludes impairment and amortization of purchased intangibles and goodwill, purchased in-process research and development, 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. About Corning Incorporated Established in 1851, Corning Incorporated (www.corning.com) 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 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, information technology 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 revenues for 2000 were $7.1 billion. 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 Incorporated and Subsidiary Companies
Pro Forma Consolidated Statements of Income
Excluding Impairment and Amortization of Goodwill and Other
Intangibles, Restructuring, Purchased In-Process Research and
Development, Acquisition-Related Costs and Non-Recurring Items
(Unaudited, in millions, except per share amounts)
For the three months For the six months
ended June 30, ended June 30,
------------------------- ------------------------
2001 2000 2001 2000
------------ ----------- ----------- -----------
Net sales $ 1,868 $ 1,776 $ 3,789 $ 3,127
Cost of sales 1,332 1,030 2,444 1,818
----------- ----------- ----------- -----------
Gross margin 536 746 1,345 1,309
Operating Expenses
Selling, general
and
administrative
expenses 271 258 532 458
Research,
development
and engineering
expenses 169 120 331 230
----------- ----------- ----------- -----------
Operating income 96 368 482 621
Interest income 11 19 35 35
Interest expense (34) (29) (68) (53)
Other expense, net (12) (4) (21) (17)
----------- ----------- ----------- -----------
Income before
income taxes 61 354 428 586
Provision for
income taxes 20 115 139 190
----------- ----------- ----------- -----------
Income before
minority
interest and
equity earnings 41 239 289 396
Minority interest in
earnings of
subsidiaries (7) (7) (12) (10)
Equity in earnings
of associated
companies 46 39 80 73
----------- ----------- ----------- -----------
Pro Forma
Net Income $ 80 $ 271 $ 357 $ 459
=========== =========== =========== ===========
Pro Forma Basic
Earnings
Per Share $ 0.09 $ 0.32 $ 0.39 $ 0.55
=========== =========== =========== ===========
Pro Forma Diluted
Earnings
Per Share $ 0.09 $ 0.31 $ 0.38 $ 0.54
=========== =========== =========== ===========
Dividends Declared $ 0.06 $ 0.06 $ 0.12 $ 0.12
=========== =========== =========== ===========
Shares used in
computing pro
forma per
share amounts:
Pro forma
basic
earnings
per share 926 845 923 828
=========== =========== =========== ===========
Pro forma
diluted
earnings
per share 934 872 940 856
=========== =========== =========== ===========
The above pro forma amounts for the quarter ended June June: see month. 30, 2001 have been adjusted to eliminate $160 million ($109 million after tax) of amortization of purchased intangibles and goodwill and $4,772 million ($4,726 million after tax) of provision for impairment and restructuring. The above pro forma amounts for the quarter ended June 30, 2000 have been adjusted to eliminate $49 million ($71 million after tax) of amortization of purchased intangibles and goodwill and $51 million of in-process research and development charges. The above pro forma amounts for the six months ended June 30, 2001 have been adjusted to eliminate $316 million ($254 million after tax) of amortization of purchased intangibles and goodwill and $4,772 million ($4,726 million after tax) of provision for impairment and restructuring. The above pro forma amounts for the six months ended June 30, 2000 have been adjusted to eliminate $62 million ($81 million after tax) of amortization of purchased intangibles and goodwill, $93 million ($77 million after tax) of in-process research and development charges, $47 million ($43 million after tax) of transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). from the Oak acquisition, $36 million after tax for the impairment of the entire equity 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, and $7 million ($4 million after tax) for a nonoperating gain related to the sale of Quanterra Incorporated. --------- Pro Forma ---------
Corning Incorporated and Subsidiary Companies
Condensed Consolidated Statements of Income
(Unaudited, in millions, except per share amounts)
For the three months ended For the six months ended
June 30, June 30,
-------------------------- ------------------------
2001 2000 2001 2000
------------- ----------- ----------- -----------
Net sales $ 1,868 $ 1,776 $ 3,789 $ 3,127
Cost of sales 1,332 1,030 2,444 1,818
----------- ----------- ----------- -----------
Gross margin 536 746 1,345 1,309
Operating Expenses
Selling, general
and
administrative
expenses 271 258 532 458
Research,
development and
engineering
expenses 169 120 331 230
Amortization of
purchased
intangibles,
including
goodwill 160 49 316 62
Acquisition-related
charges 51 140
Provision for
impairment and
restructuring 4,772 4,772
----------- ----------- ----------- -----------
Operating (loss)
income (4,836) 268 (4,606) 419
Interest income 11 19 35 35
Interest expense (34) (29) (68) (53)
Other expense, net (12) (4) (21) (17)
Nonoperating gain 7
----------- ----------- ----------- -----------
(Loss) income
before income
taxes (4,871) 254 (4,660) 391
(Benefit) provision
for income taxes (77) 137 31 192
----------- ----------- ----------- -----------
(Loss) income
before minority
interest and
equity earnings (4,794) 117 (4,691) 199
Minority interest
in earnings
of subsidiaries (7) (7) (12) (10)
Equity in earnings
of associated
companies 46 39 80 73
Impairment of
equity investment (36)
----------- ----------- ----------- -----------
Net (Loss) Income $ (4,755) $ 149 $ (4,623) $ 226
=========== =========== =========== ===========
Basic (Loss)
Earnings
Per Share $ (5.13) $ 0.18 $ (5.01) $ 0.27
=========== =========== =========== ===========
Diluted (Loss)
Earnings
Per Share $ (5.13) $ 0.17 $ (5.01) $ 0.27
=========== =========== =========== ===========
Dividends Declared $ 0.06 $ 0.06 $ 0.12 $ 0.12
=========== =========== =========== ===========
Shares used in
computing per
share amounts:
Basic earnings
per share 926 845 923 828
=========== =========== =========== ===========
Diluted
earnings
per share 926 872 923 848
=========== =========== =========== ===========
The accompanying notes are an integral part of these statements.
Corning Incorporated and Subsidiary Companies
Condensed Consolidated Balance Sheets
(Unaudited, in millions)
June 30, 2001 December 31, 2000
------------- -----------------
Assets
Current Assets
Cash and short-term investments $ 1,311 $ 1,794
Accounts receivable, net 1,348 1,489
Inventories 977 1,040
Deferred taxes on income and other
current assets 442 311
--------- --------
Total current assets 4,078 4,634
Investments 711 635
Plant and equipment, net 5,301 4,679
Goodwill and other intangible
assets, net 2,283 7,340
Other assets 278 238
--------- --------
Total Assets $ 12,651 $ 17,526
========= ========
Liabilities and Shareholders' Equity
Current Liabilities
Loans payable $ 473 $ 128
Accounts payable 512 855
Other accrued liabilities 910 966
--------- --------
Total current liabilities 1,895 1,949
Long-term debt 3,855 3,966
Other liabilities 812 830
Minority interest in
subsidiary companies 144 139
Convertible preferred stock 8 9
Common shareholders' equity 5,937 10,633
--------- --------
Total Liabilities and
Shareholders' Equity $ 12,651 $ 17,526
========= ========
The accompanying notes are an integral part of these statements.
Corning Incorporated and Subsidiary Companies Notes to Consolidated Financial Statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge Quarter 2, 2001 (1) Information by Operating Segment Information about the performance of Corning's three operating segments for the second quarter and first six months of 2001 and 2000 are presented below. These amounts exclude revenues, expenses and equity earnings not specifically identifiable to segments. Segment net income excludes impairment and amortization of goodwill and other intangibles, restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , purchased in-process research and development costs, one-time acquisition costs and other nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. items. This measure is not in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) and may not be consistent with measures used by other companies. Corning prepared the financial results for its three operating segments on a basis that is consistent with the manner in which Corning management internally disaggregates financial information to assist in making internal operating decisions. Corning has allocated some common expenses among segments differently than it would for stand alone financial information prepared in accordance with GAAP. Corning has realigned one product line from the Advanced Materials segment into the Telecommunications segment. Segment results for 2000 have been restated to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the current presentation.
Three months ended Six months ended
June 30, June 30,
-------------------------- ------------------------
2001 2000 2001 2000
------------- ----------- ----------- -----------
Telecommunications
Net sales $ 1,393 $ 1,295 $ 2,826 $ 2,200
Research,
development and
engineering
expenses $ 132 $ 86 $ 256 $ 164
Interest expense $ 23 $ 19 $ 48 $ 34
Segment (losses)
earnings
before minority
interest
and equity
earnings $ (1) $ 181 $ 185 $ 293
Minority
interest in
losses
of
subsidiaries 3
Equity in
earnings
(losses)
of
associated
companies 8 (3) 11 (3)
------------ ----------- ----------- -----------
Segment net income $ 7 $ 178 $ 196 $ 293
============ =========== =========== ===========
Advanced Materials
Net sales $ 251 $ 259 $ 533 $ 511
Research,
development and
engineering
expenses $ 28 $ 28 $ 56 $ 54
Interest expense $ 5 $ 5 $ 10 $ 11
Segment earnings
before
equity
earnings $ 11 $ 18 $ 37 $ 35
Equity in
earnings of
associated
companies 7 6 13 12
------------ ----------- ----------- -----------
Segment net income $ 18 $ 24 $ 50 $ 47
============ =========== =========== ===========
Information Display
Net sales $ 218 $ 216 $ 419 $ 404
Research,
development and
engineering
expenses $ 9 $ 6 $ 19 $ 12
Interest expense $ 6 $ 5 $ 10 $ 8
Segment earnings
before
minority
interest and
equity earnings $ 25 $ 32 $ 46 $ 52
Minority
interest in
earnings of
subsidiaries (7) (7) (12) (13)
Equity in
earnings of
associated
companies 29 35 54 62
------------ ----------- ----------- -----------
Segment net income $ 47 $ 60 $ 88 $ 101
============ =========== =========== ===========
Total segments
Net sales $ 1,862 $ 1,770 $ 3,778 $ 3,115
Research,
development and
engineering
expenses $ 169 $ 120 $ 331 $ 230
Interest expense $ 34 $ 29 $ 68 $ 53
Segment earnings
before
minority
interest and
equity
earnings $ 35 $ 231 $ 268 $ 380
Minority
interest in
earnings of
subsidiaries (7) (7) (12) (10)
Equity in
earnings of
associated
companies 44 38 78 71
------------ ----------- ----------- -----------
Segment net income $ 72 $ 262 $ 334 $ 441
============ =========== =========== ===========
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 Six months ended
June 30, June 30,
-------------------------- ------------------------
2001 2000 2001 2000
------------- ----------- ----------- -----------
Net sales
Total segment
net sales $ 1,862 $ 1,770 $ 3,778 $ 3,115
Non-segment
net sales (a) 6 6 11 12
------------ ----------- ----------- -----------
Total net sales $ 1,868 $ 1,776 $ 3,789 $ 3,127
============ =========== =========== ===========
Net income
Total segment
income (b) $ 72 $ 262 $ 334 $ 441
Unallocated
items:
Non-segment loss
and other (a) (2) (2) (3) (4)
Nonoperating gain 7
Amortization of
purchased
intangibles
and goodwill (c) (160) (49) (316) (62)
Acquisition-related
charges (51) (140)
Interest income (d) 11 19 35 34
Income tax (e) 94 (31) 97 (16)
Equity in
earnings of
associated
companies (a) 2 1 2 2
Impairment of equity
investment (36)
Provision for
impairment
and
restructuring(f) (4,772) (4,772)
------------ ----------- ----------- -----------
Net (loss)
income $ (4,755) $ 149 $ (4,623) $ 226
============ =========== =========== ===========
(a) Includes amounts derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from corporate investments. (b) Includes royalty Compensation for the use of property, usually copyrighted works, patented inventions, or natural resources, expressed as a percentage of receipts from using the property or as a payment for each unit produced. , interest and dividend income. (c) Amortization of purchased intangibles and goodwill relates primarily to the Telecommunications segment. (d) Corporate interest income is not allocated to reportable segments. (e) Includes tax associated with unallocated items. (f) Provision for impairment and restructuring relates primarily to the Telecommunications segment. (2) Depreciation and Amortization Depreciation charged to operations for the second quarter and six months of 2001 totaled $163 million and $318 million, respectively. Depreciation charged to operations for the second quarter and six months of 2000 totaled $126 million and $238 million, respectively. Amortization of purchased intangibles including goodwill charged to operations for the second quarter and six months of 2001 totaled $160 million and $316 million, respectively. Amortization of purchased intangibles including goodwill charged to operations for the second quarter and six months of 2000 totaled $49 million and $62 million, respectively. (3) Impairment of Goodwill and Other Intangible Assets During the first half of 2001, Corning experienced a significant decrease in the rate of growth of its telecommunications segment, primarily in the photonic technologies business, due to a dramatic decline in infrastructure spending in the telecommunications industry. During the second quarter, major customers in the photonic technologies business further reduced their order forecasts and canceled orders already placed. Management now believes that the growth prospects of this business are significantly less than previously expected and those of historical periods. As a result of these events and changes in circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , Corning assessed the recoverability of certain long-lived long-lived adj. 1. Having a long life: a long-lived aunt. 2. Lasting a long time; persistent: a long-lived rumor. 3. assets related to the photonic technologies business, including goodwill and other intangibles and concluded that these assets were impaired See assistive technology. . Corning recorded a charge equal to the difference between the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. and fair value of these assets. Management's estimate of fair value was based on multiples of forecasted revenue and earnings of publicly traded companies publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. with operations in the optical component market segment. Corning recorded pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern charges of $4.7 billion 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. a significant portion of the goodwill and approximately $100 million to impair intangible assets associated with certain business combinations completed in 2000. Of the total charge of $4.8 billion, $3.2 billion related to the acquisition of the Pirelli  This article or section is in need of attention from an expert on the subject.Please help recruit one or [ improve this article] yourself. See the talk page for details. optical components business and $1.6 billion related to goodwill resulting from the acquisition of NetOptix Corporation. (4) Provision for Inventory During the second quarter, major customers in the photonic technologies business further reduced their order forecasts and canceled orders already placed. As a result, management determined that certain products were not likely to be sold in their product life cycle. Corning recorded a provision for excess and obsolete inventory, including estimated purchase commitments, of $273 million ($184 million after tax) in cost of sales in the second quarter of 2001. (5) (Benefit) Provision for Income Taxes Corning's tax (benefit) provision for the second quarter and six months of 2001 was impacted by the significant impairment charge and amortization of goodwill. Corning's effective tax rate for the second quarter and first six months of 2000 was 53.8% and 49.0%, respectively. Excluding the impact of the impairment of goodwill and other intangibles (which is mostly not tax deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). ), amortization of purchased intangibles and goodwill, purchased in-process research and development, one-time acquisition costs and other nonrecurring items, the effective income tax rate for the second quarter and six months of 2001 was 32.5%, which is comparable to rates of 32.4% in both periods in 2000.
Corning Incorporated
Quarterly Sales Information
(in millions)
2001
--------------------------------------
Q1 Q2 Q3 Q4 Total
------ ------ ------ ------ ------
Telecommunications
Fiber and Cable $ 875 $ 939 $ $ $ 1,814
Hardware and Equipment 248 231 479
Photonic Technologies 236 158 394
Optical Networking Devices 14 10 24
Controls and Connectors 60 55 115
------ ------ ------ ------ ------
Segment net sales $ 1,433 $ 1,393 $ $ $ 2,826
====== ====== ====== ====== ======
Advanced Materials
Environmental $ 108 $ 96 $ $ $ 204
Life Sciences 70 69 139
Other Advanced Materials 104 86 190
------ ------ ------ ------ ------
Segment net sales $ 282 $ 251 $ $ $ 533
====== ====== ====== ====== ======
Information Display
Display Technologies $ 62 $ 87 $ $ $ 149
Conventional Video 86 73 159
Precision Lens 53 58 111
------ ------ ------ ------ ------
Segment net sales $ 201 $ 218 $ $ $ 419
====== ====== ====== ====== ======
2000
--------------------------------------
Q1 Q2 Q3 Q4 Total
------ ------ ------ ------ ------
Telecommunications
Fiber and Cable $ 479 $ 722 $ 795 $ 879 $ 2,875
Hardware and Equipment 183 276 288 273 1,020
Photonic Technologies 186 238 273 342 1,039
Optical Networking Devices 5 6 11
Controls and Connectors 57 59 61 64 241
------ ------ ------ ------ ------
Segment net sales $ 905 $ 1,295 $1,422 $ 1,564 $ 5,186
====== ====== ====== ====== ======
Advanced Materials
Environmental $ 103 $ 103 $ 101 $ 104 $ 411
Life Sciences 63 66 62 57 248
Other Advanced Materials 86 90 90 96 362
------ ------ ------ ------ ------
Segment net sales $ 252 $ 259 $ 253 $ 257 $ 1,021
====== ====== ====== ====== ======
Information Display
Display Technologies $ 61 $ 76 $ 88 $ 108 $ 333
Conventional Video 83 87 94 90 354
Precision Lens 44 53 54 56 207
------ ------ ------ ------ ------
Segment net sales $ 188 $ 216 $ 236 $ 254 $ 894
====== ====== ====== ====== ======
Exhibit I
Corning Contacts:
Corporate Communications Investor Relations
Daniel F. Collins Katherine M. Dietz
(607) 974-4197 (607) 974-8217
collinsdf@corning.com dietzkm@corning.com
Corning to Acquire Lucent's Fiber and Cable Interests
in China for $225 Million
CORNING, N.Y. -- Corning Incorporated (NYSE:GLW), announced today
that it has reached an agreement with Lucent Technologies (NYSE:LU) to
purchase Lucent's controlling equity interests in Lucent Technologies
Shanghai Fiber Optic Co., Ltd and Lucent Technologies Beijing Fiber
Optic Cable Co., Ltd. for an aggregate payment of $225 million in
cash. Corning's purchase of these interests is subject to the
satisfaction of certain conditions including, the approvals of the
other equity shareholders of each joint venture and relevant
governmental approvals.
As a world leading manufacturer and supplier of optical fiber,
optical cable and photonic components, Corning intends to expand its
presence in the growing Chinese telecommunications marketplace. "The
addition of these fiber and cable manufacturing assets is an important
element of our regional growth strategy for China and Asia," said
Corning President and CEO, John W. Loose. "With local fiber
manufacturing capability we will be able to gain stronger market
access to Chinese cablers and end user customers.
Adding to Corning Cable Systems' cable capacity in China will
strengthen our position as a leading optical cable supplier in China.
We are committed to working with the venture partners to ensure the
continued success of both ventures."
Established in 1851, Corning Incorporated (www.corning.com)
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 industry; and
high-performance displays and components for television, information
technology and other communications-related industries. The company
also uses advanced materials to manufacture products for scientific,
semiconductor and environmental markets. Corning revenues for 2000
were US$7.1 billion.
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion