CORNING INC NY

Previous wording

The Company has outlined a plan called “Springboard,” – to add more than $3 billion in annualized core sales with strong incremental profit and cash flow in the next three years as cyclical factors and secular trends converge.

Current wording

Springboard is our plan to add more than $3 billion in annualized core sales and to achieve a core operating margin of 20% by the end of 2026. We expect a number of upward cyclical factors and secular trends to drive growth across our Market-Access Platforms. As we capture this growth, we expect to deliver powerful incremental profit and cash flow; we already have the required production capacity and technical capabilities in place, and the cost and capital are already reflected in our financials. With the success of the plan, we also expect to be able to accelerate the return of cash to shareholders.

Previous wording

We expect core net sales of approximately $3.7 billion for the third quarter of 2024.

Current wording

We expect core net sales of approximately $3.75 billion for the fourth quarter of 2024.

Previous wording

For the six months ended June 30, 2024, net sales decreased $195 million, or 3%, when compared to the same period in 2023. This was primarily driven by decreases in telecommunication product sales of $148 and polycrystalline silicon product sales of $120 million, partially offset by increases in specialty glass product sales of $123 million.

Current wording

For the three months ended September 30, 2024, net sales increased $218 million, or 7% when compared to the same period in 2023. This was primarily driven by an increase in telecommunication product sales of $328 million, partially offset by decreases in environmental substrate and filter products of $58 million and polycrystalline silicon product sales of $36 million.

Previous wording

For the three months ended June 30, 2024, net sales were up slightly when compared to the same period in 2023. This was primarily driven by increases in specialty glass product sales of $77 million and telecommunication product sales of $47 million, offset by decreases in polycrystalline silicon product sales of $59 million, environmental substrate and filter product sales of $29 million and display product sales of $21 million.

Current wording

For the nine months ended September 30, 2024, net sales increased $23 million when compared to the same period in 2023. This was primarily driven by increases in telecommunication product sales of $180 million and specialty glass product sales of $106 million, offset by decreases in polycrystalline silicon product sales of $156 million and environmental substrate and filter products of $67 million.

Previous wording

For the three months ended June 30, 2024, gross margin decreased $64 million, or 6%, and decreased as a percentage of sales by 2 percentage points when compared to the same period in 2023. This is primarily driven by a $62 million increase in restructuring and asset write-off charges, as discussed in Note 2 (Restructuring, Impairment and Other Charges and Credits) in the accompanying notes to the consolidated financial statements.

Current wording

For the three months ended September 30, 2024, gross margin increased $133 million, or 13%, and increased as a percentage of sales by 2 percentage points when compared to the same period in 2023. This is primarily driven by the increase in net sales, as discussed above.

Previous wording

For the six months ended June 30, 2024, gross margin decreased $74 million, or 4%, and remained consistent as a percentage of sales when compared to the same period in 2023.

Current wording

For the nine months ended September 30, 2024, gross margin increased $59 million, or 2%, and slightly increased as a percentage of sales when compared to the same period in 2023.

Previous wording

For the three months ended June 30, 2024, selling, general and administrative expenses increased $31 million, or 7%, and remained consistent as a percentage of sales when compared to the same period in 2023. For the six months ended June 30, 2024, selling, general and administrative expense increased $61 million, or 7%, and increased as a percentage of sales due to the lower sales in the current period as compared to the same period in 2023.

Current wording

For the three months ended September 30, 2024, selling, general and administrative expenses increased $42 million, or 9%, and remained consistent as a percentage of sales when compared to the same period in 2023. For the nine months ended September 30, 2024, selling, general and administrative expense increased $103 million, or 8%, and slightly increased as a percentage of sales in the current period as compared to the same period in 2023.

Previous wording

For the three and six months ended June 30, 2024, research, development and engineering expenses remained relatively flat and consistent as a percentage of sales when compared to the same periods in 2023.

Current wording

For the three and nine months ended September 30, 2024, research, development and engineering expenses increased 9% and 3%, respectively, and remained consistent as a percentage of sales when compared to the same periods in 2023.

Previous wording

Included in translated earnings contract gain, net, is the impact of foreign currency contracts which economically hedge the translation exposure arising from movements in the Japanese yen, South Korean won, new Taiwan dollar, euro, Chinese yuan and Mexican peso and its impact on net income.

Current wording

Included in translated earnings contract (loss) gain, net, is the impact of foreign currency contracts which economically hedge the translation exposure arising from movements in the Japanese yen, South Korean won, new Taiwan dollar, euro, Chinese yuan and Mexican peso and its impact on net (loss) income.

Previous wording

The following table provides detailed information on the impact of translated earnings contract gain, net (in millions):

Current wording

The following table provides detailed information on the impact of translated earnings contract (loss) gain, net (in millions):

Previous wording

For the three and six months ended June 30, 2024, the effective tax rate differed from the United States (“U.S.”) statutory rate of 21%, primarily due to certain pre-tax losses with no corresponding expected tax benefit. These losses were mostly driven by asset write-offs associated with the closure of a display manufacturing plant. Refer to Note 2 (Restructuring, Impairment and Other Charges and Credits) in the accompanying notes to the consolidated financial statements for additional information.

Current wording

For the three months ended September 30, 2024, the effective tax rate differed from the United States (“U.S.”) statutory rate of 21%, primarily due to certain pre-tax losses with no corresponding expected tax benefit, changes in estimates based on the final 2023 U.S. Federal Income Tax Return, and the impact of foreign exchange losses. For the nine months ended September 30, 2024, the effective tax rate differed from the U.S. statutory rate of 21%, primarily due to certain pre-tax losses with no corresponding expected tax benefit.

Previous wording

For the three and six months ended June 30, 2023, the effective tax rate differed from the U.S. statutory rate of 21%, primarily due to changes in valuation allowance assessments, partially offset by differences arising from foreign earnings, adjustments to share-based compensation, and a net benefit due to foreign derived intangible income.

Current wording

For the three months ended September 30, 2023, the effective tax rate differed from the U.S. statutory rate of 21%, primarily due to differences arising from foreign earnings partially offset by changes in estimates based on the final 2022 U.S. Federal Income Tax Return. For the nine months ended September 30, 2023, the effective tax rate differed from the U.S. statutory rate of 21%, primarily due to differences arising from foreign earnings, changes in estimates based on the final 2022 U.S. Federal Income Tax Return and adjustments related to share-based compensation, partially offset by changes in valuation allowance assessments.

Previous wording

The effective tax rate for the three and six months ended June 30, 2024 increased when compared to the same periods in 2023 primarily due to certain pre-tax losses during the three and six months ended June 30, 2024 with no corresponding expected tax benefit and a reduction in the net benefit due to foreign derived intangible income.

Current wording

For the three and nine months ended September 30, 2024, the effective tax rate differed when compared to the same period in 2023 primarily due to changes in certain pre-tax losses with no corresponding expected tax benefit and the impact of foreign exchange losses.

Previous wording

Comprehensive (loss) income attributable to Corning Incorporated

Current wording

Net (loss) income attributable to Corning Incorporated

Previous wording

As a result of the items discussed above, net income attributable to Corning Incorporated and per share data were as follows (in millions, except per share amounts):

Current wording

As a result of the items discussed above, net (loss) income attributable to Corning Incorporated and per share data were as follows (in millions, except per share amounts):

Previous wording

Comprehensive loss attributable to Corning Incorporated for the six months ended June 30, 2024 was $231 million compared to comprehensive income of $88 million for the three months ended June 30, 2023. This movement is driven by the increase in net losses on foreign currency translation adjustments of $150 million, primarily driven by losses in the Japanese yen, euro and Korean won, partially offset by gains in the Chinese yuan.

Current wording

Comprehensive income attributable to Corning Incorporated for the three months ended September 30, 2024 was $467 million compared to comprehensive loss attributable to Corning Incorporated of $39 million for the three months ended September 30, 2023. This movement is driven by the increase in net gains on foreign currency translation adjustments of $816 million, primarily driven by gains in the Japanese yen, Korean won, Chinese yuan and euro, partially offset by a $277 million decrease in net income.

Previous wording

Comprehensive loss attributable to Corning Incorporated for the three months ended June 30, 2024 was $113 million compared to comprehensive loss of $21 million for the three months ended June 30, 2023. This movement is driven by the decrease in net losses on foreign currency translation adjustments of $96 million, primarily driven by gains in the Japanese yen and Chinese yuan, partially offset by losses in the Korean won and euro.

Current wording

Comprehensive income attributable to Corning Incorporated for the nine months ended September 30, 2024 was $236 million compared to $49 million for the nine months ended September 30, 2023. This movement is driven by the increase in net gains on foreign currency translation adjustments of $666 million, primarily driven by gains in the Japanese yen, Korean won Chinese yuan and euro, partially offset by a $424 million decrease in net income.

Previous wording

Financial results for the reportable segments and Hemlock and Emerging Growth Businesses are prepared on a basis consistent with the internal disaggregation of financial information to assist the chief operating decision maker (“CODM”) in making internal operating decisions, which is more fully discussed within Note 15 (Reportable Segments) in the accompanying notes to the consolidated financial statements and includes a reconciliation of our segment information to the corresponding amounts in our consolidated statements of income.

Current wording

Financial results for the reportable segments and Hemlock and Emerging Growth Businesses are prepared on a basis consistent with the internal disaggregation of financial information to assist the chief operating decision maker (“CODM”) in making internal operating decisions, which is more fully discussed within Note 15 (Reportable Segments) in the accompanying notes to the consolidated financial statements and includes a reconciliation of our segment information to the corresponding amounts in our consolidated statements of (loss) income.

Previous wording

The increase in segment net sales for both the three and six month periods was due to higher sales volume, attributable to increased panel maker utilization driven by growth in retail demand, as well as pricing actions taken in the second half of 2023.

Current wording

The increase in segment net sales for both the three- and nine-month periods was due to higher sales volume, attributable to increased panel maker utilization, as well as pricing actions taken in the second half of 2023 and currency-based price adjustments implemented in the third quarter of 2024.

Previous wording

The increase in segment net sales for both the three and six month periods was due to continued strong demand for premium glass for mobile devices as well as semiconductor-related products.

Current wording

Segment net sales for the three-month period slightly decreased as compared to the same period in 2023. The increase in segment net sales for the nine-month period was due to continued strong demand for premium glass for mobile devices as well as semiconductor-related products.

Previous wording

The decrease in segment net sales for both the three and six month periods was primarily due to a decline in heavy-duty diesel, reflecting the impact of the Class 8 truck downcycle in North America.

Current wording

The decrease in segment net sales for both the three- and nine-month periods was primarily due to a decline in heavy-duty diesel, reflecting the continued impact of the Class 8 truck downcycle in North America.

Previous wording

The increase in segment net sales for the three month period was primarily due to increased demand as customers are completing their inventory drawdowns. Segment net sales for the six month period was relatively flat with the prior year.

Current wording

The increase in segment net sales for both the three- and nine-month periods was primarily due to increased demand as customers are completing their inventory drawdowns.

Previous wording

The decrease in segment net sales for both the three and six month periods was primarily due to a decrease in our HSG business driven by lower pricing for solar-grade polysilicon and lower sales in our Pharmaceutical Technologies business due to the completion of volume commitments for COVID-related products.

Current wording

The decrease in segment net sales for the three-month period was primarily due to a decrease in our HSG business driven by lower pricing for solar-grade polysilicon, partially offset by an increase in our Automotive Glass Solutions business. The decrease in segment net sales for the nine-month period was primarily due to a decrease in our HSG business driven by lower pricing for solar-grade polysilicon and lower sales in our Pharmaceutical Technologies business due to the completion of volume commitments for COVID-related products.

Previous wording

The increase in segment net income for both the three and six month periods was primarily driven by the increase in sales, as outlined above, and manufacturing improvements.

Current wording

Segment net income for the three-month period was flat with the prior year. The increase in segment net income for the nine-month period was primarily driven by the increase in sales, as outlined above, and manufacturing improvements.

Previous wording

The decrease in segment net income for the three month period was primarily driven by the decrease in sales, as outlined above. The increase in segment net income for the six month period was primarily driven by improved operating performance.

Current wording

The decrease in segment net income for both the three- and nine-month periods was primarily driven by the decrease in sales, as outlined above.

Previous wording

The increase in segment net income for the three month period was primarily driven by the increase in sales, as outlined above. The increase in segment net income for the six month period was primarily driven by profitability improvements from productivity actions taken.

Current wording

The increase in segment net income for both the three- and nine-month periods was primarily driven by profitability improvements from productivity actions taken.

Previous wording

The decrease in segment net income was primarily driven by our HSG and Pharmaceutical Technologies businesses due to lower sales, as outlined above.

Current wording

The decrease in segment net income for both the three- and nine-month periods was primarily driven by our HSG and Pharmaceutical Technologies businesses due to lower sales, as outlined above.

Previous wording

For the three months ended June 30, 2024, we generated core net sales of $3.6 billion compared to core net sales of $3.5 billion for the same period in 2023. The increase in core net sales of $122 million was primarily driven by increased segment sales of $86 million in Display, $78 million in Specialty Materials and $47 million in Optical Communications, partially offset by decreased segment sales of $81 million in Hemlock and Emerging Growth Businesses. Net sales by reportable segment and Hemlock and Emerging Growth Businesses are discussed in detail in the “Segment Analysis” section of our MD&A.

Current wording

For the three months ended September 30, 2024, we generated core net sales of $3.7 billion compared to $3.5 billion for the same period in 2023. The increase in core net sales of $274 million was primarily driven by increased segment sales of $328 million in Optical Communications and $43 million in Display Technologies, partially offset by decreased segment sales of $67 million in Environmental Technologies and $29 million in Hemlock and Emerging Growth Businesses. Net sales by reportable segment and Hemlock and Emerging Growth Businesses are discussed in detail in the “Segment Analysis” section of our MD&A.

Previous wording

For the six months ended June 30, 2024, we generated core net sales of $6.9 billion compared to core net sales of $6.8 billion for the same period in 2023. The increase in core net sales of $13 million was primarily driven by increased segment sales of $195 million in Display and $126 million in Specialty Materials, offset by decreased segment sales of $156 million in Hemlock and Emerging Growth Businesses and $148 million in Optical Communications. Net sales by reportable segment and Hemlock and Emerging Growth Businesses are discussed in detail in the “Segment Analysis” section of our MD&A.

Current wording

For the nine months ended September 30, 2024, we generated core net sales of $10.6 billion compared to $10.3 billion for the same period in 2023. The increase in core net sales of $287 million was primarily driven by increased segment sales of $238 million in Display Technologies, $180 million in Optical Communications and $111 million in Specialty Materials, partially offset by decreased segment sales of $185 million in Hemlock and Emerging Growth Businesses and $69 million in Environmental Technologies. Net sales by reportable segment and Hemlock and Emerging Growth Businesses are discussed in detail in the “Segment Analysis” section of our MD&A.

Previous wording

For the three months ended June 30, 2024, we generated core net income of $407 million compared to core net income generated of $388 million for the same period in 2023. The increase of $19 million was primarily due to higher segment net income of $50 million in Display and $30 million in Specialty Materials, partially offset by lower segment net income of $49 million in Hemlock and Emerging Growth Businesses. Net income by reportable segment and Hemlock and Emerging Growth Businesses are discussed in detail in the “Segment Analysis” section of our MD&A.

Current wording

For the nine months ended September 30, 2024, we generated core net income of $1.2 billion compared to $1.1 billion for the same period in 2023. The increase of $78 million was primarily due to higher segment net income of $134 million in Display Technologies, $35 million in Specialty Materials and $28 million in Optical Communications, offset by lower segment net income of $79 million in Hemlock and Emerging Growth Businesses. Net income by reportable segment and Hemlock and Emerging Growth Businesses are discussed in detail in the “Segment Analysis” section of our MD&A.

Previous wording

Core earnings per share increased for the three months ended June 30, 2024 to $0.47 per share, primarily as a result of the changes in core net income, outlined above.

Current wording

Core earnings per share increased for the three months ended September 30, 2024 to $0.54 per share, primarily as a result of the changes in core net income, outlined above.

Previous wording

Core earnings per share decreased for the six months ended June 30, 2024 to $0.85 per share, primarily as a result of the changes in core net income, outlined above.

Current wording

Core earnings per share increased for the nine months ended September 30, 2024 to $1.38 per share, primarily as a result of the changes in core net income, outlined above.

Previous wording

We utilize certain financial measures and key performance indicators that are not calculated in accordance with GAAP to assess our financial and operating performance. A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the comparable measure calculated and presented in accordance with GAAP in the consolidated statements of income or statements of cash flows, or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the comparable measure as calculated and presented in accordance with GAAP in the consolidated statements of income or statements of cash flows.

Current wording

We utilize certain financial measures and key performance indicators that are not calculated in accordance with GAAP to assess our financial and operating performance. A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the comparable measure calculated and presented in accordance with GAAP in the consolidated statements of (loss) income or statements of cash flows, or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the comparable measure as calculated and presented in accordance with GAAP in the consolidated statements of (loss) income or statements of cash flows.

Previous wording

We participate in accounts receivable management programs, including factoring arrangements to sell certain accounts receivable to third-party financial institutions or accelerate collections through our customer’s supply chain financing arrangements. Sales of accounts receivable are reflected as a reduction of accounts receivable in the consolidated balance sheets and the proceeds are included in cash flows from operating activities in the consolidated statements of cash flows. By utilizing these types of programs, we have accelerated the collection of $380 million and $389 million of accounts receivable during the three months ended March 31, 2024 and June 30, 2024, respectively. We believe these accounts receivables would have been collected during the normal course of business in the following quarter.

Current wording

We participate in accounts receivable management programs, including factoring arrangements to sell certain accounts receivable to third-party financial institutions or accelerate collections through our customer’s supply chain financing arrangements. Sales of accounts receivable are reflected as a reduction of accounts receivable in the consolidated balance sheets and the proceeds are included in cash flows from operating activities in the consolidated statements of cash flows. By utilizing these types of programs, we have accelerated the collection of $380 million, $389 million and $267 million of accounts receivable during the three months ended March 31, 2024, June 30, 2024 and September 30, 2024, respectively. We believe these accounts receivable would have been collected during the normal course of business in the following quarter.

Previous wording

Net cash provided by operating activities for the six months ended June 30, 2024 increased $47 million when compared to the same period in the prior year primarily driven by improvements in working capital.

Current wording

Net cash provided by operating activities for the nine months ended September 30, 2024 slightly improved by $24 million when compared to the same period in the prior year.

Previous wording

Net cash used in investing activities for the six months ended June 30, 2024 improved by $177 million when compared to the same period last year, primarily driven by lower capital expenditures of $276 million, partially offset by $67 million in proceeds from the sale of equipment in the prior period.

Current wording

Net cash used in investing activities for the nine months ended September 30, 2024 improved by $233 million when compared to the same period last year, primarily driven by lower capital expenditures of $400 million, partially offset by $67 million in proceeds from the sale of equipment in the prior period and $31 million less realized gains on our translated earnings contracts.

Previous wording

Net cash used in financing activities for the six months ended June 30, 2024 increased by $448 million when compared to the same period last year, primarily driven by the $918 million in proceeds from the issuance of euro-denominated notes in 2023, partially offset by $507 million in payments for the redemption of preferred stock in 2023. Additionally, we repurchased 3 million common shares for $105 million in 2024 compared to no share repurchases made in the same period last year.

Current wording

Net cash used in financing activities for the nine months ended September 30, 2024 increased by $424 million when compared to the same period last year, primarily driven by the $918 million in proceeds from the issuance of euro-denominated notes in 2023, partially offset by $507 million in payments for the redemption of preferred stock in 2023 and $135 million in purchases of common stock in 2024 compared to no repurchases in 2023.

Previous wording

As of June 30, 2024, we had $1.4 billion of cash and cash equivalents. Our cash and cash equivalents are held in various locations throughout the world and are generally unrestricted. We utilize a variety of strategies to ensure that our worldwide cash is available in the locations in which it is needed. As of June 30, 2024, approximately 48% of the consolidated cash and cash equivalents were held outside the U.S.

Current wording

As of September 30, 2024, we had $1.6 billion of cash and cash equivalents. Our cash and cash equivalents are held in various locations throughout the world and are generally unrestricted. We utilize a variety of strategies to ensure that our worldwide cash is available in the locations in which it is needed. As of September 30, 2024, approximately 51% of the consolidated cash and cash equivalents were held outside the U.S.

Previous wording

Our Revolving Credit Agreement includes affirmative and negative covenants with which we must comply, including a leverage (debt to capital ratio) financial covenant. The required leverage ratio is a maximum of 60%. As of June 30, 2024, our leverage using this measure was approximately 40%. As of June 30, 2024, we were in compliance.

Current wording

Our Revolving Credit Agreement includes affirmative and negative covenants with which we must comply, including a leverage (debt to capital ratio) financial covenant. The required leverage ratio is a maximum of 60%. As of September 30, 2024, our leverage using this measure was approximately 39%. As of September 30, 2024, we were in compliance.

Previous wording

We have access to certain Chinese yuan-denominated unsecured variable rate loan facilities, whose proceeds are used for capital investment and general corporate purposes. As of June 30, 2024, borrowings totaled $249 million and these facilities had variable interest rates ranging from 2.9% to 4.1% and maturities ranging from 2024 to 2032. As of June 30, 2024, Corning had 1.1 billion Chinese yuan of unused capacity, equivalent to approximately $150 million.

Current wording

We have access to certain Chinese yuan-denominated unsecured variable rate loan facilities, whose proceeds are used for capital investment and general corporate purposes. As of September 30, 2024, borrowings totaled $340 million and these facilities had variable interest rates ranging from 2.8% to 3.9% and maturities ranging from 2025 to 2032. As of September 30, 2024, Corning had 229 million Chinese yuan of unused capacity, equivalent to approximately $33 million.