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) April 20, 2000
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. Current Events
Effective with Corning's first quarter press release in 2000, Corning will
transition to a new performance metric that will be its primary measure of
performance. Corning will report pro forma earnings, which will exclude
amortization of purchased intangibles and goodwill, purchased in-process
research and development, acquisition-related costs, discontinued operations
and any non-recurring items. This also represents the manner in which
segment net income amounts are evaluated regularly by executive management in
deciding how to allocate resources and in assessing performance. Corning
believes comparing its operating results excluding these items, provides a
better understanding of the trends in operating results. Corning's pro forma
earnings is not a measure that is in accordance with generally accepted
accounting principles (GAAP) and may not be consistent with measures used by
other companies. It should not be considered superior to or used as a
substitute for GAAP measures.
Filed herewith is the following financial information:
(1) Historical statements of income for the years ended December 31, 1998,
1997, 1996 and 1995.
(2) Pro forma statements of income for the years ended December 31, 1998, 1997,
1996 and 1995.
(3) Historical statements of income for the quarters ended March 31, 1999,
June 30, 1999, September 30, 1999 and December 31, 1999.
(4) Pro forma statements of income for the quarters ended March 31, 1999,
June 30, 1999, September 30, 1999 and December 31, 1999.
(5) Segment information for the quarters ended March 31, 1999, June 30, 1999,
September 30, 1999 and December 31, 1999, and the year ended December 31,
1998, restated to conform to future presentations.
<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: April 20, 2000 By /s/ KATHERINE A. ASBECK
Katherine A. Asbeck
Vice President and Controller
<PAGE>
Corning Incorporated and Subsidiary Companies
Consolidated Statements of Income
(In millions, except per share amounts)
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1998 1997 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues
Net sales $3,831.9 $3,831.2 $3,327.5 $2,900.1
Royalty, interest and
dividend income 50.0 38.9 30.2 28.4
Non-operating gains 39.7 21.5
-------- -------- -------- --------
3,921.6 3,870.1 3,379.2 2,928.5
-------- -------- -------- --------
Deductions
Cost of sales 2,360.5 2,224.3 2,006.0 1,750.9
Selling, general and
administrative expenses 542.8 593.4 548.1 444.2
Research, development and
engineering expenses 307.4 262.9 200.1 177.3
Provision for impairment
and restructuring 84.6 5.9 26.5
Amortization of purchased
intangibles including
goodwill 22.2 21.8 16.3 15.0
Interest expense 66.8 83.0 62.9 62.9
Non-recurring charges 80.9
Other, net 55.0 18.9 22.0 13.9
-------- -------- -------- --------
Income from continuing
operations before taxes
on income 482.3 665.8 517.9 356.9
Taxes on income from
continuing operations 149.5 223.3 174.2 118.5
-------- -------- -------- --------
Income from continuing
operations before
minority interest
and equity earnings 332.8 442.5 343.7 238.4
Minority interest in
earnings of subsidiaries (61.6) (77.4) (59.8) (75.2)
Dividends on convertible
preferred securities
of subsidiary (13.7) (13.7) (13.7) (13.7)
Equity in earnings of
associated companies 97.3 79.2 85.0 (279.8)
-------- -------- -------- --------
Income from continuing
operations 354.8 430.6 355.2 (130.3)
Income from discontinued
operations, net of
income taxes 66.5 30.9 (137.8) 27.4
-------- -------- -------- --------
Net Income $ 421.3 $ 461.5 $ 217.4 $ (102.9)
======== ======== ======== ========
Basic Earnings Per Share
Continuing operations $ 1.45 $ 1.77 $ 1.46 $ (0.55)
Discontinued operations 0.27 0.12 (0.57) 0.11
-------- -------- -------- --------
Net Income $ 1.72 $ 1.89 $ 0.89 $ (0.44)
======== ======== ======== ========
Diluted Earnings Per Share
Continuing operations $ 1.42 $ 1.71 $ 1.44 $ (0.55)
Discontinued operations 0.25 0.11 (0.54) 0.11
-------- -------- -------- --------
Net Income $ 1.67 $ 1.82 $ 0.90 $ (0.44)
======== ======== ======== ========
Shares Used In Computing
Earnings Per Share
Basic earnings per share 244.4 242.9 242.0 241.1
Diluted earnings per share 259.2 260.4 255.0 241.1
</TABLE>
<PAGE>
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
1998 - 1995
(In millions, except per share amounts)
<TABLE>
<CAPTION>
1998 1997 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues
Net sales $3,831.9 $3,831.2 $3,327.5 $2,900.1
Royalty, interest and
dividend income 50.0 38.9 30.2 28.4
-------- -------- -------- --------
3,881.9 3,870.1 3,357.7 2,928.5
Deductions
Cost of sales 2,360.5 2,224.3 2,006.0 1,750.9
Selling, general and
administrative expenses 542.8 593.4 548.1 444.2
Research, development and
engineering expenses 307.4 262.9 200.1 177.3
Interest expense 66.8 83.0 62.9 62.9
Other, net 55.0 18.9 22.0 13.9
-------- -------- -------- --------
Income before taxes 549.4 687.6 518.6 479.3
Taxes on income 169.3 228.0 171.8 132.1
-------- -------- -------- --------
Income before minority interest
and equity earnings 380.1 459.6 346.8 347.2
Minority interest in earnings
of subsidiaries (65.2) (77.4) (59.8) (75.2)
Dividends on convertible preferred
securities of subsidiary (13.7) (13.7) (13.7) (13.7)
Equity in earnings of associated
companies 97.3 79.2 85.0 85.7
-------- -------- -------- --------
Pro Forma Net Income $ 398.5 $ 447.7 $ 358.3 $ 344.0
======== ======== ======== ========
Pro Forma Diluted Earnings
Per Share $ 1.59 $ 1.78 $ 1.45 $ 1.42
======== ======== ======== ========
Shares Used In Computing
Earnings Per Share
Diluted earnings per share 259.2 260.4 255.0 241.1
</TABLE>
1998
The pro forma amounts for the year ended December 31, 1998 have been adjusted to
eliminate the $22.2 million ($17.4 million after tax) or $0.07 per share of
amortization of purchased intangibles and goodwill, $39.7 million ($22.9 million
after minority interest and tax) or $0.09 per share for a non-operating gain,
$84.6 million ($49.2 million after minority interest and taxes) or $0.19 per
share for a restructuring charge and $66.5 million after tax, or $0.25 per share
of income from discontinued operations.
1997
The pro forma amounts for the year ended December 31, 1997 have been adjusted to
eliminate the $21.8 million ($17.1 million after tax) or $0.07 per share of
amortization of purchased intangibles and goodwill and $30.9 million after tax,
or $0.11 per share of income from discontinued operations.
<PAGE>
1996
The pro forma amounts for the year ended December 31, 1996, have been adjusted
to eliminate the $16.3 million ($12.8 million after tax), or $0.05 per share of
amortization of purchased intangibles and goodwill, $1.5 million ($0.9 million
after tax), or $0.00 per share for early extinguishment of Oak Industries debt,
$5.9 million ($3.6 million after tax) or $0.01 per share for Oak restructuring
charge, $1.0 million ($0.6 million after tax), or $0.00 per share for a non-
operating gain, $20.5 million ($12.7 million after tax), or $0.05 per share and
$136.9 million after tax, or $0.54 per share for loss from discontinued
operations.
1995
The pro forma amounts for the year ended December 31, 1995, have been adjusted
to eliminate the $15.0 million ($11.8 million after tax), or $0.05 per share of
amortization of purchased intangibles and goodwill, $3.1 million ($1.6 million
after tax), or $0.00 per share for early extinguishment of Oak Industries debt,
$26.5 million ($16.1 million after tax), or $0.07 per share for a restructuring
charge, $80.9 million after tax, or $0.33 per share for an in-process research
and development charge for Oak Industries, $365.5 million after tax or $1.52 per
share for the impairment of the equity investment in Dow Corning and $29 million
after tax, or $0.11 per share for income from discontinued operations.
<PAGE>
Corning Incorporated and Subsidiary Companies
Consolidated Statements of Income
(In millions, except per share amounts)
<TABLE>
<CAPTION>
1999
-----------------------------------------------
Q1 Q2 Q3 Q4 Total
---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
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
Non-operating gains 30.0 30.0
------- -------- -------- -------- --------
1,007.0 1,141.0 1,284.0 1,380.5 4,812.5
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
Provision for impairment
and restructuring 15.5 (14.1) 1.4
Amortization of purchased
intangibles including
goodwill 6.9 7.0 7.3 6.6 27.8
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 121.0 169.9 184.1 199.9 674.9
Taxes on income from
continuing operations 37.3 52.3 55.7 61.8 207.1
------- -------- -------- -------- --------
Income from continuing
operations before
minority interest
and equity earnings 83.7 117.6 128.4 138.1 467.8
Minority interest in
earnings of subsidiaries (10.1) (17.4) (18.6) (20.7) (66.8)
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
------- -------- -------- -------- --------
Income from continuing
operations 92.5 131.0 141.9 145.6 511.0
Income from discontinued
operations, net of
income taxes 4.8 4.8
------- -------- -------- -------- --------
Net Income $ 92.5 $ 131.0 $ 141.9 $ 150.4 $ 515.8
======= ======== ======== ======== ========
Diluted Earnings Per Share
Continuing operations $ 0.36 $ 0.50 $ 0.54 $ 0.55 $ 1.95
Discontinued operations 0.02 0.02
------- -------- -------- -------- --------
Net Income $ 0.36 $ 0.50 $ 0.54 $ 0.57 $ 1.97
======= ======== ======== ======== ========
Shares Used In Computing
Earnings Per Share
Diluted earnings
per share 260.4 265.3 265.7 266.6 265.1
</TABLE>
<PAGE>
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)
<TABLE>
<CAPTION>
1999
-----------------------------------------------
Q1 Q2 Q3 Q4 Total
---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
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 1,380.5 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 before taxes
on income 127.9 176.9 176.9 192.4 674.1
Taxes on income 38.8 53.8 51.8 57.7 202.1
------- -------- -------- -------- --------
Income 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
</TABLE>
The above pro forma amounts for the quarter ended March 31, 1999 have been
adjusted to eliminate the $6.9 million ($5.4 million after tax) or $0.02 per
share of amortization of purchased intangibles and goodwill.
The above pro forma amounts for the quarter ended June 30, 1999 have been
adjusted to eliminate the $7.0 million ($5.5 million after tax) or $0.02 per
share of amortization of purchased intangibles and goodwill.
The above pro forma amounts for the quarter ended September 30, 1999 have been
adjusted to eliminate the $7.3 million ($5.7 million after tax) or $0.02 per
share of amortization of purchased intangibles and goodwill, an impairment
charge of $15.5 million ($10 million after tax) or $0.04 per share and a non-
operating gain of $30.0 million ($9.5 million after tax and minority interest)
or $0.04 per share.
The above pro forma amounts for the quarter ended December 31, 1999 have been
adjusted to eliminate the $6.6 million ($5.2 million after tax) or $0.02 per
share of amortization of purchased intangibles and goodwill, the release of
restructuring reserves totaling $14.1 million ($8.6 million after tax) or $0.03
per share and income from discontinued operations of $7.8 million ($4.8 million
after tax) or $0.02 per share.
<PAGE>
Corning Incorporated and Subsidiary Companies
Quarterly Information by Operating Segment
(In millions)
<TABLE>
<CAPTION>
1999 1998
---------------------------------------------- ------
Q1 Q2 Q3 Q4 Total
---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Telecommunications
Net sales $593.3 $ 692.5 $ 803.4 $ 869.0 $2,958.2 $2,139.6
Research, development
and engineering
expenses $ 56.1 $ 59.6 $ 71.3 $ 73.8 $ 260.8 $ 203.7
Interest expense $ 12.4 $ 12.8 $ 17.3 $ 16.3 $ 58.8 $ 39.8
Segment earnings
before minority
interest and
equity earnings $ 60.4 $ 81.4 $ 89.7 $ 98.9 $ 330.4 $ 265.3
Minority interest
in earnings of
subsidiaries (4.3) (8.7) (7.4) (14.2) (34.6) (38.0)
Equity in earnings
of associated
companies 4.0 2.6 4.9 3.4 14.9 22.7
------ -------- -------- -------- -------- --------
Segment net income $ 60.1 $ 75.3 $ 87.2 $ 88.1 $ 310.7 $ 250.0
====== ======== ======== ======== ======== ========
Advanced Materials
Net sales $252.1 $ 264.7 $ 257.7 $ 279.4 $1,053.9 $1,020.1
Research, development
and engineering
expenses $ 21.9 $ 23.2 $ 23.7 $ 25.7 $ 94.5 $ 80.0
Interest expense $ 4.3 $ 4.9 $ 6.0 $ 7.5 $ 22.7 $ 16.7
Segment earnings
before minority
interest and
equity earnings $ 20.0 $ 28.0 $ 23.6 $ 19.3 $ 90.9 $ 75.9
Minority interest
in earnings of
subsidiaries 0.1 (0.1) 0.3
Equity in earnings
of associated
companies 4.1 3.5 6.1 8.0 21.7 17.6
------ -------- -------- -------- -------- --------
Segment net income $ 24.2 $ 31.5 $ 29.6 $ 27.3 $ 112.6 $ 93.8
====== ======== ======== ======== ======== ========
Information Display
Net sales $145.7 $ 166.0 $ 178.7 $ 210.8 $ 701.2 $ 644.7
Research, development
and engineering
expenses $ 5.4 $ 5.7 $ 5.3 $ 6.5 $ 22.9 $ 23.7
Interest expense $ 2.6 $ 2.7 $ 2.7 $ 3.2 $ 11.2 $ 10.0
Segment earnings
before minority
interest and
equity earnings $ 9.4 $ 17.8 $ 12.9 $ 17.5 $ 57.6 $ 39.2
Minority interest
in earnings of
subsidiaries (5.9) (8.8) (1.5) (6.5) (22.7) (27.6)
Equity in earnings
of associated
companies 12.4 22.2 18.3 14.9 67.8 44.9
------ -------- -------- -------- -------- --------
Segment net income $ 15.9 $ 31.2 $ 29.7 $ 25.9 $ 102.7 $ 56.5
====== ======== ======== ======== ======== ========
Total Segments
Net sales $991.1 $1,123.2 $1,239.8 $1,359.2 $4,713.3 $3,804.4
Research, development
and engineering
expenses $ 83.4 $ 88.5 $ 100.3 $ 106.0 $ 378.2 $ 307.4
Interest expense $ 19.3 $ 20.4 $ 26.0 $ 27.0 $ 92.7 $ 66.5
Segment earnings
before minority
interest and
equity earnings $ 89.8 $ 127.2 $ 126.2 $ 135.7 $ 478.9 $ 380.4
Minority interest
in earnings of
subsidiaries (10.1) (17.5) (9.0) (20.7) (57.3) (65.3)
Equity in earnings
of associated
companies 20.5 28.3 29.3 26.3 104.4 85.2
------ -------- -------- -------- -------- --------
Segment net income $100.2 $ 138.0 $ 146.5 $ 141.3 $ 526.0 $ 400.3
====== ======== ======== ======== ======== ========
</TABLE>
<PAGE>
A reconciliation of the totals reported for the operating segment to the
applicable line items in the consolidated financial statements is as follows:
<TABLE>
<CAPTION>
1999 1998
----------------------------------------------- ------
Q1 Q2 Q3 Q4 Total
---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Revenues
Total segment
net sales $ 991.1 $1,123.2 $1,239.8 $1,359.2 $4,713.3 $3,804.4
Non-segment net
sales 5.9 6.5 5.5 9.9 27.8 27.5
Royalty, interest
and dividend
income 10.0 11.3 8.7 11.4 41.4 50.0
Non-operating gain 30.0 30.0 39.7
-------- -------- -------- -------- -------- --------
Total Revenues $1,007.0 $1,141.0 $1,284.0 $1,380.5 $4,812.5 $3,921.6
======== ======== ======== ======== ======== ========
Net income
Total segment
income 100.2 138.0 146.5 141.3 526.0 400.3
Unallocated
items:
Non-segment loss
and other (0.6) (5.8) (1.3) (2.1) (9.8) (0.2)
Non-operating gain 30.0 30.0 39.7
Non-recurring
charges (15.5) 14.1 (1.4) (84.6)
Amortization of
purchased
intangibles
including
goodwill (1) (6.9) (7.0) (7.3) (6.6) (27.8) (22.2)
Interest expense (0.4) (0.1) (0.5) (0.3)
Income tax 1.8 3.3 (3.9) (2.8) (1.6) 20.0
Equity in earnings
of associated
companies 0.7 2.5 2.9 1.8 7.9 12.1
Minority interest
in non-operating
gain (9.5) (9.5) 3.7
Dividends on
convertible
preferred
securities
of subsidiary (2.3) (2.3) (13.7)
-------- -------- -------- -------- -------- --------
Net income from
continuing
operations $ 92.5 $ 131.0 $ 141.9 $ 145.6 $ 511.0 $ 354.8
======== ======== ======== ======== ======== ========
</TABLE>
(1) Amortization of purchased intangibles relates primarily to the
Telecommunications segment.