Filed by Corning Incorporated
Pursuant to Rule 425 Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Exchange Act of 1934
Subject Company: NetOptix Corporation
Commission File No. 333-32714
On April 24, 2000, Corning Incorporated issued the following press release:
FOR RELEASE - APRIL 24, 2000
MEDIA CONTACT:
Robert W. DeMallie
(607) 974-8778
[email protected]
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
CORNING, N.Y. - Corning Incorporated (NYSE: GLW) 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 and e-commerce 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 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 Technologies Division increased
90%, led by demand for the company's optical amplifiers. Sales of flat-panel
display glass used in computer monitors grew at a rate of 45%.
(more)
<PAGE>
CORNING REPORTS Q1 EARNINGS
PAGE 2
Equity earnings were up nearly 60% in the quarter, due primarily to excellent
performance at Samsung Corning Precision Glass Company, Ltd., a Korean
manufacturer of flat-panel display glass.
The company reported first-quarter 2000 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 exclude amortization of purchased intangibles and goodwill, purchased
in-process R&D, one-time acquisition costs, discontinued operations 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, 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 of optical
technology in the world's communication network has only just begun. Corning
will capitalize on the expansion of the optical layer by adding capacity around
the world, successfully integrating our recent acquisitions, and continuing to
execute our growth strategy at a rapid pace. I am confident we will accomplish
all three."
Corning also recorded a first-quarter, pre-tax charge of $89.0 million ($69.1
million after-tax, 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 its entire investment in Pittsburgh 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 approval and is on track to close in mid-May.
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 industry; and
high-performance displays and components for television and other
communications-related industries. The company also uses advanced materials 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.
###
<PAGE>
INVESTOR RELATIONS CONTACT:
Katherine M. Dietz
(607) 974-8217
[email protected]
FORWARD-LOOKING AND CAUTIONARY STATEMENTS
Except for historical information and discussions contained herein,
statements included in this release may constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act 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 statement/prospectus describing the
merger with the United States 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 INVESTORS IN THE
COMMON STOCK OF NETOPTIX AND CORNING TO REVIEW THE PROXY STATEMENT/ PROSPECTUS
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 and may be obtained without charge from the Corporate
Secretary, Corning Incorporated, One Riverfront Plaza, Corning, NY 14831 (tele:
607-974-9000) or the Chief Financial Officer, NetOptix Corporation, c/o
Leisegang Medical, Inc., 6401 Congress Ave., Suite 160, Boca Raton, FL 33487
(tele: 561-994-0202, ext. 227). INVESTORS SHOULD READ THE PROXY
STATEMENT/PROSPECTUS CAREFULLY BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS.
<PAGE>
<TABLE>
<CAPTION>
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; in millions, except per share amounts)
Three Months Ended March 31,
--------------------------------
2000 1999
--------------- -------------
<S> <C> <C>
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
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
<TABLE>
<CAPTION>
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
--------------- ------------
<S> <C> <C>
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
=========== ===========
</TABLE>
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.
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; in millions)
March 31, 2000 Dec. 31, 1999
-------------- -------------
<S> <C> <C>
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
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
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.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
2000 1999
----------- ----------
<S> <C> <C>
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
=========== =========
</TABLE>
A reconciliation of the totals reported for the operating segments to the
applicable line items in the consolidated financial statements is as follows:
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------------
2000 1999
---------- -----------
<S> <C> <C>
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
========= ==========
</TABLE>
(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
<PAGE>
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.
<PAGE>
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.
- 30 -
<PAGE>
<TABLE>
<CAPTION>
CORNING INCORPORATED AND SUBSIDIARY COMPANIES Contact: Katherine M. Dietz
(In millions, except per share amounts) (607) 974-8217
INCOME STATEMENTS (GAAP)
EXHIBIT 1
2000
----------------------
Q1 TOTAL
--------- ---------
<S> <C> <C>
REVENUES
Net sales $ 1,351.4 $ 1,351.4
Royalty, interest and dividend income 23.5 23.5
Non-operating gains 6.8 6.8
--------- ---------
1,381.7 1,381.7
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
Amortization of purchased intangibles 13.1 13.1
Interest expense 24.2 24.2
Non-recurring charges 89.0 89.0
Other, net 20.9 20.9
--------- ---------
Income from continuing operations before taxes on income 136.8 136.8
Taxes on income from continuing operations 54.9 54.9
--------- ---------
Income from continuing operations before minority interest and equity earnings 81.9 81.9
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
Impairment of equity investment (36.3) (36.3)
--------- ---------
INCOME FROM CONTINUING OPERATIONS 76.9 76.9
INCOME FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES
-------- --------
NET INCOME $ 76.9 $ 76.9
========= =========
DILUTED EARNINGS PER SHARE:
Continuing operations $ 0.28 $ 0.28
Discontinued operations
-------- --------
$ 0.28 $ 0.28
========= =========
SHARES USED IN COMPUTING EARNINGS PER SHARE:
Diluted earnings per share 277.3 277.3
========= =========
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
Amortization of purchased intangibles 6.9 7.0 7.3 6.6 27.8
Interest expense 19.7 20.4 26.0 27.1 93.2
Non-recurring charges 15.5 (14.1) 1.4
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 83.7 117.6 128.4 138.1 467.8
earnings
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
Impairment of equity investment
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
-------- ------- ------- -------- ---------
$ 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>
<TABLE>
<CAPTION>
CORNING INCORPORATED AND SUBSIDIARY COMPANIES Contact: Katherine M. Dietz
(In millions, except per share amounts) (607) 974-8217
PRO FORMA INCOME STATEMENTS
EXHIBIT 2
2000
----------------------
Q1 TOTAL
--------- ---------
<S> <C> <C>
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
--------- -------- --------- --------- --------
<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
REDUCTIONS
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 89.1 123.1 125.1 134.7 472.0
earnings
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
========= ======== ======== ========= =========
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CORNING INCORPORATED AND SUBSIDIARY COMPANIES Contact: Katherine M. Dietz
(In millions, except per share amounts) (607) 974-8217
EXHIBIT 3
2000
----------------------
Q1 TOTAL
--------- ---------
<S> <C> <C>
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 0.04(5)
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 (0.03)(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 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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