16
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) December 28, 1999
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>
Item 5. Other Events
As disclosed in Corning's current report on Form 8-K filed November 18, 1999,
Corning Incorporated and Oak Industries Inc. have entered into an agreement and
plan of merger whereby Oak Industries will be merged with and into a wholly-
owned subsidiary of Corning in a stock-for-stock transaction that will be tax-
free to Oak shareholders. The transaction is expected to be consummated in the
first quarter of 2000 and to be accounted for as a pooling of interests.
Corning expects to restate its financial statements after consummation of the
acquisition of Oak Industries to present combined results of the merged
companies. Pro forma financial statements reflecting this restatement were
included in Corning's Registration Statement on Form S-4 filed with the
Securities and Exchange Commission on December 27, 1999. This information is
being filed herewith.
Item 7. Financial Statements, Pro Forma Financial Information, and Exhibits
The following pro forma combined financial statements are being filed herewith:
(1) Pro forma combined Balance Sheet as of September 30, 1999.
(2) Pro forma combined Statements of Income for the nine months ended September
30, 1999 and 1998.
(3) Pro forma combined Statements of Income for the years ended December 31,
1998, 1997, and 1996.
<PAGE>
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: December 28, 1999 By /s/ KATHERINE A. ASBECK
Katherine A. Asbeck
Vice President and Controller
<PAGE>
CORNING INCORPORATED
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The following describes the pro forma effect of the merger on (1) the unaudited
historical balance sheet as of September 30, 1999, (2) the unaudited historical
statements of income for the nine months ended September 30, 1999 and 1998, and
(3) the statements of income for the years ended December 31, 1998, 1997 and
1996 of Corning under the assumptions and adjustments described below. The pro
forma adjustments reflect the application of pooling of interests accounting
discussed in "The Merger - Accounting Treatment." The following unaudited pro
forma combined financial information and the accompanying notes should be read
in conjunction with the historical financial statements and related notes of
Corning and Oak Industries, incorporated by reference in this Proxy
Statement/Prospectus.
The unaudited pro forma combined financial information is provided for
informational purposes only and does not purport to represent what the combined
financial position and results of operations would actually have been had the
merger in fact occurred at the dates indicated. The following unaudited pro
forma combined statements of income and unaudited pro forma combined balance
sheet illustrate the estimated effects of the merger as if that transaction had
occurred at the beginning of each period presented for the statements of income
and at the end of the period for the balance sheet, and gives effect to the
merger as a pooling of interests for accounting purposes. The unaudited pro
forma combined statements of income do not include the impact of nonrecurring
charges directly attributable to the transaction.
For financial accounting purposes, it is expected that the merger will be
accounted for using the pooling of interests method of accounting. Accordingly,
it is expected that (1) the recorded historical cost basis of the assets and
liabilities of Corning and Oak Industries will be carried forward to the
combined company, (2) results of operations of the combined company will include
income of Corning and Oak Industries for the entire fiscal period in which the
combination occurs and (3) the historical results of operations of the separate
companies for fiscal years before the merger will be combined and reported as
the results of operations of the combined company. Adjustments have been made
to reclassify the presentation of Oak Industries historical financial
information to be consistent with Corning's presentation. However, no
adjustments have been made to the historical financial statements of Corning and
Oak Industries to conform the accounting policies of the combining companies as
the nature and amounts of such adjustments are not expected to be significant.
In addition, no adjustments have been made in the unaudited pro forma combined
financial information for transactions between Corning and Oak Industries as
such transactions were determined to be immaterial.
<PAGE>
Unaudited Pro Forma Combined Balance Sheet
As of September 30, 1999
(In millions)
<TABLE>
<CAPTION>
Oak Pro Forma Combined
Corning Industries Adjustments Pro Forma
------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Assets
Current assets
Cash $ 70.0 $ 8.2 $ $ 78.2
Short-term investments,
at cost which approximates
market value 31.5 31.5
Accounts receivable, net of
doubtful accounts and
allowances 768.4 68.3 836.7
Inventories 550.6 73.2 623.8
Deferred taxes on income
and other current assets 211.5 14.1 225.6
-------- ------ ------ --------
Total current assets 1,632.0 163.8 1,795.8
-------- ------ ------ --------
Investments
Associated companies,
at equity 393.0 10.0 403.0
Others, at cost 58.8 0.2 59.0
-------- ------ ------ --------
451.8 10.2 462.0
-------- ------ ------ --------
Plant and equipment
net of accumulated
depreciation 2,909.9 96.1 3,006.0
Goodwill and intangible
assets net of accumulated
amortization 344.5 189.8 534.3
Other assets 335.6 14.9 350.5
-------- ------ ------ --------
$5,673.8 $474.8 $ $6,148.6
======== ====== ====== ========
Liabilities and Shareholders' Equity
Current liabilities
Loans payable $ 297.8 $ 1.9 $ 45.0 (a) $ 344.7
Accounts payable 283.8 23.8 307.6
Other accrued liabilities 637.1 25.7 662.8
-------- ------ ------ --------
Total current liabilities 1,218.7 51.4 45.0 (a) 1,315.1
-------- ------ ------ --------
Other liabilities 690.1 10.7 700.8
Loans payable beyond one year 1,287.6 108.2 1,395.8
4 7/8% Convertible
Subordinated Notes 100.0 100.0
Minority interest in
subsidiary companies 361.4 361.4
Convertible preferred stock 15.2 15.2
Common shareholders' equity
Common stock, including
excess over par value
and other capital 1,032.5 328.7 (65.7) (b) 1,295.5
Retained earnings 1,730.8 (46.8) (45.0) (a) 1,639.0
Less cost of common stock
in treasury (642.9) (65.7) 65.7 (b) (642.9)
Accumulated other
comprehensive income (19.6) (11.7) (31.3)
-------- ------ ------ --------
Common shareholders' equity 2,100.8 204.5 (45.0) 2,260.3
-------- ------ ------ --------
$5,673.8 $474.8 $ $6,148.6
======== ====== ====== ========
</TABLE>
<PAGE>
Unaudited Pro Forma Combined Statement of Income
Nine Months Ended September 30, 1999
(In millions, except per share data)
<TABLE>
<CAPTION>
Oak Pro Forma Combined
Corning Industries Adjustments Pro Forma
------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues
Net Sales $3,048.8 $323.2 $ $3,372.0
Royalty, interest and
dividend income 29.6 0.4 30.0
Non-operating gain 30.0 30.0
-------- ------ ----- --------
3,108.4 323.6 3,432.0
Deductions
Cost of sales 1,861.6 212.6 2,074.2
Selling, general and
administrative expenses 428.4 63.5 (16.5) (c) 475.4
Research, development and
engineering expenses 260.9 11.2 (c) 272.1
Provision for restructuring
and impairment 15.5 15.5
Amortization of purchased
intangibles 15.9 5.3 (c) 21.2
Interest expense 56.1 10.0 66.1
Other, net 32.5 32.5
-------- ------ ----- --------
Income from continuing
operations before taxes
on income 437.5 37.5 475.0
Taxes on income from
continuing operations 132.4 12.9 145.3
-------- ------ ----- --------
Income before minority
interest and
equity earnings 305.1 24.6 329.7
Minority interest in
earnings of subsidiaries (46.1) (46.1)
Dividends on convertible
preferred securities
of subsidiary (2.3) (2.3)
Equity in earnings of
associated companies 84.9 (0.8) 84.1
-------- ------ ----- --------
Income from continuing
operations $ 341.6 $ 23.8 $ $ 365.4
======== ====== ===== ========
Basic earnings per share
from continuing operations $ 1.42 $ 1.35 $ 1.43 (d)
Diluted earnings per share
from continuing operations $ 1.39 $ 1.26 $ 1.40 (d)
Weighted average shares
outstanding-basic 239.7 17.7 254.4 (d)
Weighted average shares
outstanding-diluted 247.2 20.9 264.7 (d)
</TABLE>
<PAGE>
Unaudited Pro Forma Combined Statement of Income
Nine Months Ended September 30, 1998
(In millions, except per share data)
<TABLE>
<CAPTION>
Oak Pro Forma Combined
Corning Industries Adjustments Pro Forma
------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues
Net Sales $2,557.2 $249.5 $ $2,806.7
Royalty, interest and
dividend income 32.9 0.8 0.5 (c) 34.2
Non-operating gain 20.5 0.7 21.2
-------- ------ ----- --------
2,610.6 251.0 0.5 2,862.1
Deductions
Cost of sales 1,583.4 155.6 1,739.0
Selling, general and
administrative expenses 352.1 53.3 (13.9) (c) 391.5
Research, development and
engineering expenses 213.8 9.8 (c) 223.6
Provision for restructuring
and impairment 84.6 84.6
Amortization of purchased
intangibles 11.8 4.6 (c) 16.4
Interest expense 43.8 7.1 50.9
Other, net 40.4 40.4
-------- ------ ----- --------
Income from continuing
operations before taxes
on income 280.7 35.0 315.7
Taxes on income from
continuing operations 84.1 13.7 97.8
-------- ------ ----- --------
Income before minority
interest and
equity earnings 196.6 21.3 217.9
Minority interest in
earnings of subsidiaries (38.6) (0.6) (39.2)
Dividends on convertible
preferred securities
of subsidiary (10.3) (10.3)
Equity in earnings of
associated companies 75.5 1.1 76.6
-------- ------ ----- --------
Income from continuing
operations $ 223.2 $ 21.8 $ $ 245.0
======== ====== ===== ========
Basic earnings per share
from continuing operations $ 0.97 $ 1.22 $ 1.00 (d)
Diluted earnings per share
from continuing operations $ 0.95 $ 1.15 $ 0.98 (d)
Weighted average shares
outstanding-basic 229.7 17.9 244.6 (d)
Weighted average shares
outstanding-diluted 243.9 20.6 259.4 (d)
</TABLE>
<PAGE>
Unaudited Pro Forma Combined Statement of Income
For the Year Ended December 31, 1998
(In millions, except per share data)
<TABLE>
<CAPTION>
Oak Pro Forma Combined
Corning Industries Adjustments Pro Forma
------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues
Net Sales $3,484.0 $347.9 $ $3,831.9
Royalty, interest and
dividend income 48.4 1.0 0.6 (c) 50.0
Non-operating gain 39.7 0.7 40.4
-------- ------ ------ --------
3,572.1 349.6 0.6 3,922.3
Deductions
Cost of sales 2,138.1 222.4 (0.9) (c) 2,359.6
Selling, general and
administrative expenses 487.7 74.4 (20.0) (c) 542.1
Research, development and
engineering expenses 293.9 13.5 (c) 307.4
Provision for restructuring
and impairment 84.6 1.6 (c) 86.2
Amortization of purchased
intangibles 15.8 6.4 (c) 22.2
Interest expense 56.7 10.1 66.8
Other, net 55.7 55.7
-------- ------ ------ --------
Income from continuing
operations before
taxes on income 439.6 42.7 482.3
Taxes on income from
continuing operations 132.8 16.7 149.5
-------- ------ ------ --------
Income before minority
interest and
equity earnings 306.8 26.0 332.8
Minority interest in
earnings of subsidiaries (60.9) (0.7) (61.6)
Dividends on convertible
preferred securities
of subsidiary (13.7) (13.7)
Equity in earnings of
associated companies 95.3 2.0 97.3
-------- ------ ------ --------
Income from continuing
operations $ 327.5 $ 27.3 $ $ 354.8
======== ====== ====== ========
Basic earnings per share
from continuing operations $ 1.42 $ 1.54 $ 1.45 (d)
Diluted earnings per share
from continuing operations $ 1.39 $ 1.46 $ 1.42 (d)
Weighted average shares
outstanding-basic 229.6 17.8 244.4 (d)
Weighted average shares
outstanding-diluted 243.9 20.6 259.2 (d)
</TABLE>
<PAGE>
Unaudited Pro Forma Combined Statement of Income
For the Year Ended December 31, 1997
(In millions, except per share data)
<TABLE>
<CAPTION>
Oak Pro Forma Combined
Corning Industries Adjustments Pro Forma
------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues
Net Sales $3,516.8 $314.4 $ $3,831.2
Royalty, interest and
dividend income 37.5 0.4 1.0 (c) 38.9
-------- ------ ------ --------
3,554.3 314.8 1.0 3,870.1
Deductions
Cost of sales 2,026.3 198.0 2,224.3
Selling, general and
administrative expenses 541.6 69.2 (17.4) (c) 593.4
Research, development and
engineering expenses 250.3 12.6 (c) 262.9
Amortization of purchased
intangibles 16.0 5.8 (c) 21.8
Interest expense 72.0 11.0 83.0
Other, net 18.9 18.9
-------- ------ ------ --------
Income from continuing
operations before
taxes on income 629.2 36.6 665.8
Taxes on income from
continuing operations 209.5 13.8 223.3
-------- ------ ------ --------
Income before minority
interest and
equity earnings 419.7 22.8 442.5
Minority interest in
earnings of subsidiaries (76.3) (1.1) (77.4)
Dividends on convertible
preferred securities
of subsidiary (13.7) (13.7)
Equity in earnings of
associated companies 79.2 79.2
-------- ------ ------ --------
Income from continuing
operations $ 408.9 $ 21.7 $ $ 430.6
======== ====== ====== ========
Basic earnings per share
from continuing operations $ 1.79 $ 1.22 $ 1.77 (d)
Diluted earnings per share
from continuing operations $ 1.72 $ 1.20 $ 1.71 (d)
Weighted average shares
outstanding-basic 228.1 17.8 242.9 (d)
Weighted average shares
outstanding-diluted 245.4 18.1 260.4 (d)
</TABLE>
<PAGE>
Unaudited Pro Forma Combined Statement of Income
For the Year Ended December 31, 1996
(In millions, except per share data)
<TABLE>
<CAPTION>
Oak Pro Forma Combined
Corning Industries Adjustments Pro Forma
------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues
Net Sales $3,024.0 $303.5 $ $3,327.5
Royalty, interest and
dividend income 29.7 0.5 30.2
Non-operating gain 21.5 21.5
-------- ------ ------ --------
3,053.7 325.5 3,379.2
Deductions
Cost of sales 1,817.4 189.4 (0.8) (c) 2,006.0
Selling, general and
administrative expenses 499.4 67.1 (18.4) (c) 548.1
Research, development and
engineering expenses 189.2 10.9 (c) 200.1
Provision for restructuring
and impairment 5.9 (c) 5.9
Amortization of purchased
intangibles 12.7 3.6 (c) 16.3
Interest expense 57.2 5.7 62.9
Other, net 22.0 22.0
-------- ------ ------ --------
Income from continuing
operations before
taxes on income 455.8 63.3 (1.2) 517.9
Taxes on income from
continuing operations 151.4 22.8 174.2
-------- ------ ------ --------
Income before minority
interest and
equity earnings 304.4 40.5 (1.2) 343.7
Minority interest in
earnings of subsidiaries (52.5) (7.3) (59.8)
Dividends on convertible
preferred securities
of subsidiary (13.7) (13.7)
Equity in earnings of
associated companies 85.1 (1.3) 1.2 (c) 85.0
-------- ------ ------ --------
Income from continuing
operations $ 323.3 $ 31.9 $ $ 355.2
======== ====== ====== ========
Basic earnings per share
from continuing operations $ 1.42 $ 1.77 $ 1.46 (d)
Diluted earnings per share
from continuing operations $ 1.40 $ 1.71 $ 1.44 (d)
Weighted average shares
outstanding-basic 227.1 18.0 242.0 (d)
Weighted average shares
outstanding-diluted 239.5 18.7 255.0 (d)
</TABLE>
<PAGE>
Notes to Unaudited Pro Forma Combined Financial Information
(a) Corning and Oak Industries estimate that they will incur direct transaction
costs of approximately $45 million (pre-tax) associated with the merger.
These costs consist primarily of investment banking, legal and accounting
fees, as well as certain payments to senior Oak executives described further
in "Certain Compensation Arrangements". The unaudited pro forma combined
balance sheet reflects such expenses as if they had been paid as of the end
of the third quarter of 1999.
(b) Adjustments reflect the issuance of 14.4 million shares of Corning common
stock to effect the exchange of Oak Industries common stock at the exchange
ratio of 0.83 of a share of Corning common stock for each share of Oak
Industries common stock. Adjustments also reflect the cancellation and
extinguishment of all Oak Industries' common stock held in treasury at the
effective time of the merger.
(c) Adjustments reflect a reclassification of Oak Industries' reported amounts
of research and development expense, amortization of intangibles,
restructuring and impairment charges, and royalty income to conform to
Corning's presentation.
(d) The pro form combined per share amounts and weighted average common shares
outstanding reflect the combined weighted average of Corning and Oak
Industries common shares outstanding for all periods presented, after
adjusting the number of Oak Industries common shares to reflect the exchange
ratio of 0.83 of a share of Corning common stock for each share of Oak
Industries common stock. The diluted unaudited pro forma per share
information for Corning is based on the weighted average number of
outstanding shares of Corning common stock adjusted to include (1) the
dilutive effect of Corning employee stock options and Corning monthly income
preferred securities and Corning convertible preferred stock, in certain
periods, and (2) the number of shares of Corning common stock that would be
issued in the merger and (3) the dilutive effect of Oak Industries employee
stock options, restricted stock and 4 7/8% Convertible Subordinated Notes.
