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) July 3, 1996
CORNING INCORPORATED
(Exact name of registrant as specified in its charter)
New York 1-3247 16-0393470
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
One Riverfront Plaza, Corning, New York 14831
(Address of principal executive offices) (Zip Code)
(607) 974-9000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
<PAGE>2
Item 5. Other Events
As previously announced, in May 1996, Corning's Board of Directors approved a
plan to distribute to its shareholders on a pro rata basis all of the shares
of Corning Clinical Laboratories Inc. and Corning Pharmaceutical Services
Inc. (the "Distributions"). The result of the plan will be the creation of
two independent, publicly-owned (but as yet unnamed) companies. Corning has
submitted to the Internal Revenue Service a request for a ruling that the
Distributions will qualify as tax-free distributions under the Internal
Revenue Code of 1986. The final terms of the Distributions, which are
subject to approval by Corning's Board of Directors, will be set forth in
registration statements to be filed with the Securities and Exchange
Commission and in an Information Statement to be distributed to Corning's
shareholders. The Distributions are expected to occur by the end of 1996.
As a result of the plan to distribute the clinical-laboratory and
pharmaceutical-services businesses, Corning's consolidated financial
statements will report these businesses, which comprised Corning's Health
Care Services segment, as discontinued operations. Prior period consolidated
financial statements will be restated accordingly to reflect the results of
the Health Care Services segment as discontinued operations.
To provide a basis against which to evaluate 1996 quarterly results, the
attached exhibits present the restated income statements and other analyses
reflecting the Health Care Services segment as discontinued operations for
the first quarter of 1996 and for each of the 1995 quarters. Income (loss)
from operations of the discontinued businesses includes an allocation of
Corning's interest expense based on the ratio of net assets of discontinued
operations to Corning's consolidated net assets.
As previously reported on a Form 8-K dated February 15, 1996, Corning changed
its accounting calendar, effective January 1, 1996 to make Corning's results
more comparable with other companies and enable Corning to report results of
certain subsidiaries on a more current basis. Corning did not restate its
quarterly historical financial statements for this calendar change. To
provide an additional basis against which to evaluate 1996 quarterly results,
the attached exhibits also present management's pro forma estimates of 1995
quarterly results as if the calendar change had occurred at the beginning of
1995 and reflect the Health Care Services segment as discontinued operations.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
The followings exhibits are attached:
A1 - 1996 first quarter and 1995 quarters as reported
Income statement
A2 - 1996 first quarter and 1995 quarters as reported
Analysis of net income and EPS excluding unusual items
B1 - 1996 first quarter and 1995 quarters, restated for spin-offs
Income statement
B2 - 1996 first quarter and 1995 quarters, restated for spin-offs
Analysis of net income and EPS excluding unusual items
C1 - 1996 first quarter and 1995 quarters, restated for spin-offs and
showing the pro forma impact of the calendar change
Analysis of revenue, net income and EPS excluding unusual items
<PAGE>3
<TABLE>
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
(In millions, except per-share amounts)
EXHIBIT A1
<CAPTION>
1996 AS REPORTED 1995 AS REPORTED (13 PERIODS)
------------------ ------------------------------------------------
Q1 TOTAL Q1 Q2 Q3 Q4 TOTAL
---- ------ ---- --- ---- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES
Net sales $1,352.6 $1,352.6 $1,116.1 $1,297.8 $1,568.8 $1,330.4 $5,313.1
Royalty, interest and dividend income 8.8 8.8 6.9 8.7 9.1 8.3 33.0
------- ------- ------- ------- ------ ------- -------
1,361.4 1,361.4 1,123.0 1,306.5 1,577.9 1,338.7 5,346.1
DEDUCTIONS
Cost of sales 873.2 873.2 713.6 816.5 988.5 867.4 3,386.0
Selling, general and administrative
expenses 283.3 283.3 221.5 243.2 357.2 271.6 1,093.5
Research and development expenses 46.1 46.1 38.6 41.2 53.7 46.2 179.7
Provision for restructuring and
other special charges 67.0 67.0
Interest expense 29.8 29.8 26.0 28.5 35.8 27.5 117.8
Other, net 8.1 8.1 15.4 8.1 8.3 4.4 36.2
------ ------ ------- ------ ------- ------- -------
Income before taxes on income 120.9 120.9 107.9 102.0 134.4 121.6 465.9
Taxes on income 44.8 44.8 39.9 33.3 42.2 39.3 154.7
------- ------- ------- ------- ------- ------- -------
Income before minority interest
and equity earnings 76.1 76.1 68.0 68.7 92.2 82.3 311.2
Minority interest in earnings of
subsidiaries (12.5) (12.5) (11.3) (18.2) (23.8) (13.5) (66.8)
Dividends on convertible preferred
securities of subsidiary (3.4) (3.4) (3.2) (3.1) (4.2) (3.2) (13.7)
Equity in earnings (losses) of
associated companies:
Other than Dow Corning Corporation 11.6 11.6 8.4 20.9 19.3 17.9 66.5
Dow Corning Corporation 17.5 (365.5) (348.0)
------ ------ ------- ------- ------ ------- -------
NET INCOME $ 71.8 $ 71.8 $ 79.4 $(297.2) $ 83.5 $ 83.5 $ (50.8)
======= ======= ======= ======= ======= ======= =======
EARNINGS PER COMMON SHARE:
NET INCOME $ 0.31 $ 0.31 $ 0.35 $ (1.32) $ 0.37 $ 0.37 $ (0.23)
======= ======= ======= ======== ======= ======== =======
WEIGHTED AVERAGE SHARES OUTSTANDING 227.2 227.2 225.4 226.3 227.2 226.7 226.6
======= ======= ======= ======= ======= ======= =======
</TABLE>
<PAGE>4
<TABLE>
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
(In millions, except per-share amounts)
EXHIBIT A2
<CAPTION>
1996 AS REPORTED 1995 AS REPORTED (13 PERIODS)
------------------ ------------------------------------------------
Q1 TOTAL Q1 Q2 Q3 Q4 TOTAL
----- ------ ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
NET INCOME
Before Unusual Items and
Dow Corning Corporation $ 71.8 $ 71.8 $ 61.9 $ 108.8 $ 83.5 $ 83.5 $ 337.7
------- ------- ------- ------- ------- ------- -------
Dow Corning Corporation
operating results 17.5 17.5
Dow Corning Corporation
special charges (365.5) (1) (365.5)
------ ------ ------ ------- ------ ------- -------
Total Dow Corning Corporation 17.5 (365.5) (348.0)
------ ------ ------- ------- ------ ------- -------
Before Unusual Items 71.8 71.8 79.4 (256.7) 83.5 83.5 (10.3)
Unusual items, excluding Dow Corning (40.5) (2) (40.5)
------ ------ ------ ------- ----- ------- -------
NET INCOME (LOSS) $ 71.8 $ 71.8 $ 79.4 $(297.2) $ 83.5 $ 83.5 $ (50.8)
======= ======= ======= ======= ======= ======= =======
EARNINGS PER SHARE
Before Unusual Items and
Dow Corning Corporation $ 0.31 $ 0.31 $ 0.27 $ 0.48 $ 0.37 $ 0.37 $ 1.49
Dow Corning Corporation
operating results 0.08 0.08
Dow Corning Corporation
special charges (1.62) (1) (1.62)
------ ------ ------ -------- ----- ------- -------
Total Dow Corning Corporation 0.08 (1.62) (1.54)
------ ------ ------- -------- ------ ------- -------
Before Unusual Items 0.31 0.31 0.35 (1.14) 0.37 0.37 (0.05)
Unusual items, excluding
Dow Corning (0.18) (2) (0.18)
------ ------ ------ -------- ----- ------- -------
NET INCOME (LOSS) $ 0.31 $ 0.31 $ 0.35 $ (1.32) $ 0.37 $ 0.37 $ (0.23)
======= ======= ======= ======== ======= ======== =======
WEIGHTED AVERAGE SHARES OUTSTANDING 227.2 227.2 225.4 226.3 227.2 226.7 226.6
======= ======= ======= ======= ======= ======= =======
(1)Reflects a charge to fully reserve Corning's investment in Dow Corning Corporation.
(2)Reflects a RESTRUCTURING charge associated with ongoing re-engineering efforts of $67 million ($40.5 after tax or $0.18 per
share).
</TABLE>
<PAGE>5
<TABLE>
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
(In millions, except per-share amounts)
EXHIBIT B1
<CAPTION>
1996 RESTATED FOR SPINS
(CALENDAR QUARTERS) 1995 RESTATED FOR SPINS (13 PERIODS)
---------------------- ------------------------------------------------
Q1 TOTAL Q1 Q2 Q3 Q4 TOTAL
----- ------ ---- ---- ---- ---- ------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES
Net sales $ 837.6 $ 837.6 $ 632.2 $ 764.8 $1,045.6 $ 814.5 $3,257.1
Royalty, interest and dividend income 8.0 8.0 6.4 8.2 8.3 7.7 30.6
------- ------- ------- ------- ------- ------- -------
845.6 845.6 638.6 773.0 1,053.9 822.2 3,287.7
DEDUCTIONS
Cost of sales 517.0 517.0 392.4 474.8 645.0 520.4 2,032.6
Selling, general and
administrative expenses 158.4 158.4 116.1 124.9 172.8 142.4 556.2
Research and development expenses 45.3 45.3 37.5 39.9 53.0 45.3 175.7
Provision for restructuring and
other special charges 26.5 26.5
Interest expense 17.7 17.7 14.8 16.8 21.2 16.5 69.3
Other, net 7.1 7.1 7.9 1.8 8.0 3.6 21.3
------ ------ ------- ------- ------- ------- -------
Income before taxes on income 100.1 100.1 69.9 88.3 153.9 94.0 406.1
Taxes on income 33.5 33.5 22.8 25.1 45.0 25.3 118.2
------- ------- ------- ------ ------- ------- -------
Income before minority interest
and equity earnings 66.6 66.6 47.1 63.2 108.9 68.7 287.9
Minority interest in earnings of
subsidiaries (12.2) (12.2) (11.0) (17.3) (23.1) (13.0) (64.4)
Dividends on convertible preferred
securities of subsidiary (3.4) (3.4) (3.2) (3.1) (4.2) (3.2) (13.7)
Equity in earnings (losses) of
associated companies:
Other than Dow Corning Corporation 11.6 11.6 8.4 21.0 19.5 17.8 66.7
Dow Corning Corporation 17.5 (365.5) (348.0)
------ ------ ------- ------- ------ ------- -------
INCOME (LOSS) FROM CONTINUING OPERATIONS 62.6 62.6 58.8 (301.7) 101.1 70.3 (71.5)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS,
NET OF INCOME TAXES 9.2 9.2 20.6 4.5 (17.6) 13.2 20.7
------- ------- ------- ------- ------- ------- -------
NET INCOME (LOSS) $ 71.8 $ 71.8 $ 79.4 $(297.2) $ 83.5 $ 83.5 $ (50.8)
======= ======= ======= ======= ======= ======= =======
EARNINGS PER COMMON SHARE:
CONTINUING OPERATIONS $ 0.27 $ 0.27 $ 0.26 $ (1.34) $ 0.45 $ 0.31 $ (0.32)
DISCONTINUED OPERATIONS 0.04 0.04 0.09 0.02 (0.08) 0.06 0.09
------- ------- ------- -------- ------- -------- -------
NET INCOME (LOSS) $ 0.31 $ 0.31 $ 0.35 $ (1.32) $ 0.37 $ 0.37 $ (0.23)
======= ======= ======= ======== ======= ======== =======
WEIGHTED AVERAGE SHARES OUTSTANDING 227.2 227.2 225.4 226.3 227.2 226.7 226.6
======= ======= ======= ======= ======= ======= =======
</TABLE>
<PAGE>6
<TABLE>
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
(In millions, except per-share amounts)
EXHIBIT B2
<CAPTION>
1996 RESTATED FOR SPINS
(CALENDAR QUARTERS) 1995 RESTATED FOR SPINS (13 PERIODS)
--------------------- ------------------------------------------------
Q1 TOTAL Q1 Q2 Q3 Q4 TOTAL
----- ------ ---- ---- ---- ---- ------
<S> <C> <C> <C> <C> <C> <C> <C>
NET INCOME
Before Unusual Items and
Dow Corning Corporation $ 62.6 $ 62.6 $ 41.3 $ 79.9 $ 101.1 $ 70.3 $ 292.6
------- ------- ------- ------- ------- ------- -------
Dow Corning Corporation
operating results 17.5 17.5
Dow Corning Corporation
special charges (365.5) (1) (365.5)
------ ------ ------ ------- ------ ------- -------
Total Dow Corning Corporation 17.5 (365.5) (348.0)
------ ------ ------- ------- ------ ------- -------
Before Unusual Items 62.6 62.6 58.8 (285.6) 101.1 70.3 (55.4)
Unusual items, excluding Dow Corning (16.1) (2) (16.1)
------ ------ ------ ------- ----- ------- -------
NET INCOME (LOSS) FROM
CONTINUING OPERATIONS 62.6 62.6 58.8 (301.7) 101.1 70.3 (71.5)
NET INCOME (LOSS) DISCONTINUED
OPERATIONS 9.2 9.2 20.6 4.5 (3) (17.6) 13.2 20.7
------- ------- ------- ------- ----- ------- -------
NET INCOME (LOSS) $ 71.8 $ 71.8 $ 79.4 $(297.2) $ 83.5 $ 83.5 $ (50.8)
======= ======= ======= ======= ======= ======= =======
EARNINGS PER SHARE
Before Unusual Items and
Dow Corning Corporation $ 0.27 $ 0.27 $ 0.18 $ 0.35 $ 0.45 $ 0.31 $ 1.29
Dow Corning Corporation
operating results 0.08 0.08
Dow Corning Corporation
special charges (1.62) (1) (1.62)
------ ------ ------ -------- ----- ------- -------
Total Dow Corning Corporation 0.08 (1.62) (1.54)
------ ------ ------- -------- ------ ------- -------
Before Unusual Items 0.27 0.27 0.26 (1.27) 0.45 0.31 (0.25)
Unusual items, excluding Dow Corning (0.07) (2) (0.07)
------ ------ ------ -------- ----- ------- -------
NET INCOME (LOSS) FROM
CONTINUING OPERATIONS 0.27 0.27 0.26 (1.34) 0.45 0.31 (0.32)
NET INCOME (LOSS) DISCONTINUED
OPERATIONS 0.04 0.04 0.09 0.02 (3) (0.08) 0.06 0.09
------- ------- ------- -------- ----- ---- -------
NET INCOME (LOSS) $ 0.31 $ 0.31 $ 0.35 $ (1.32) $ 0.37 $ 0.37 $ (0.23)
======= ======= ======= ======== ======= ======== =======
WEIGHTED AVERAGE SHARES OUTSTANDING 227.2 227.2 225.4 226.3 227.2 226.7 226.6
======= ======= ======= ======= ======= ======= =======
(1)Reflects a charge to fully reserve Corning's investment in Dow Corning Corporation.
(2)Reflects a RESTRUCTURING charge of $26.5 million ($16.1 million after tax or $0.07 per share).
(3)Includes a RESTRUCTURING charge of $40.5 million ($24.4 million after tax or $0.11 per share).
</TABLE>
<PAGE>7
<TABLE>
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
(In millions, except per-share amounts)
EXHIBIT C1
<CAPTION>
1996 RESTATED FOR SPINS 1995 PRO FORMA RESTATED FOR SPINS
(CALENDAR QUARTERS) (CALENDAR QUARTERS)
----------------------- ------------------------------------------------
Q1 TOTAL Q1 Q2 Q3 Q4 TOTAL
--- ------ ----- ---- ----- ---- ------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES $ 845.6 $ 845.6 $ 774.2 $ 810.1 $ 841.2 $ 862.2 $3,287.7
======= ======= ======= ======= ======= ======= ========
NET INCOME
Before Unusual Items and Dow
Corning Corporation $ 62.6 $ 62.6 $ 56.5 $ 80.3 $ 84.3 $ 71.5 $ 292.6
------- ------- ------- ------- ------- ------- -------
Dow Corning Corporation
operating results 17.5 17.5
Dow Corning Corporation special
charges (365.5) (1) (365.5)
------ ------ ------ ------- ------ ------- -------
Total Dow Corning Corporation 17.5 (365.5) (348.0)
------ ------ ------- ------- ------ ------- -------
Before Unusual Items 62.6 62.6 74.0 (285.2) 84.3 71.5 (55.4)
Unusual items, excluding
Dow Corning (16.1) (2) (16.1)
------ ------ ------ ------- ----------- -------
NET INCOME (LOSS) FROM CONTINUING
OPERATIONS 62.6 62.6 74.0 (301.3) 84.3 71.5 (71.5)
NET INCOME (LOSS) DISCONTINUED
OPERATIONS 9.2 9.2 26.4 3.1 (3) (21.3) 12.5 20.7
------- ------- ------- ------- --------- ------- -------
NET INCOME (LOSS) $ 71.8 $ 71.8 $ 100.4 $(298.2) $ 63.0 $ 84.0 $ (50.8)
======= ======= ======= ======= ======= ======= =======
EARNINGS PER SHARE
Before Unusual Items and
Dow Corning Corporation $ 0.27 $ 0.27 $ 0.25 $ 0.35 $ 0.38 $ 0.31 $ 1.29
Dow Corning Corporation
operating results 0.08 0.08
Dow Corning Corporation
special charges (1.62) (1) (1.62)
------ ------ ------ -------- ----------- -------
Total Dow Corning Corporation 0.08 (1.62) (1.54)
------ ------ ------- -------- ------ ------- -------
Before Unusual Items 0.27 0.27 0.33 (1.27) 0.38 0.31 (0.25)
Unusual items, excluding Dow Corning (0.07) (2) (0.07)
------ ------ ------ -------- ----------- -------
NET INCOME (LOSS) FROM
CONTINUING OPERATIONS 0.27 0.27 0.33 (1.34) 0.38 0.31 (0.32)
NET INCOME (LOSS)
DISCONTINUED OPERATIONS 0.04 0.04 0.11 0.02 (3) (0.10) 0.06 0.09
------- ------- ------ -------- ----- ---- ----
NET INCOME (LOSS) $ 0.31 $ 0.31 $ 0.44 $ (1.32) $ 0.28 $ 0.37 $ (0.23)
======= ======= ======= ======== ======= ======== =======
WEIGHTED AVERAGE SHARES OUTSTANDING 227.2 227.2 225.6 226.4 227.1 227.2 226.6
======= ======= ======= ======= ======= ======= =======
(1)Reflects a charge to fully reserve Corning's investment in Dow Corning Corporation.
(2)Reflects a RESTRUCTURING charge of $26.5 million ($16.1 million after tax or $0.07 per share).
(3)Includes a RESTRUCTURING charge of $40.5 million ($24.4 million after tax or $0.11 per share).
</TABLE>
<PAGE>8
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.
CORNING INCORPORATED
Registrant
Date: July 3, 1996 By /s/ KATHERINE A. ASBECK
Katherine A. Asbeck
