Corning Incorporated : Q4Financial Statement & Exhibits2020 ()

CORNING INCORPORATED AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited; in millions, except per share amounts)

		Three months ended			Year ended
		December 31,			December 31,
		2020			2019			2020			2019
Net sales	$	3,350	$	2,817	$	11,303	$	11,503
Cost of sales		2,137			1,963			7,772			7,468
Gross margin		1,213			854			3,531			4,035
Operating expenses:
Selling, general and administrative expenses		471			401			1,747			1,585
Research, development and engineering expenses		232			278			1,154			1,031
Amortization of purchased intangibles		34			28			121			113
Operating income		476			147			509			1,306
Equity in (losses) earnings of affiliated companies		(42)			(64)			(25)			17
Interest income		3			5			15			21
Interest expense		(75)			(60)			(276)			(221)
Translated earnings contract (loss) gain, net		(43)			85			(38)			248
Transaction-related gain, net								498
Other income (expense), net		11			(96)			(60)			(155)
Income before income taxes		330			17			623			1,216
(Provision) benefit for income taxes		(78)			15			(111)			(256)
Net income attributable to Corning Incorporated	$	252	$	32	$	512	$	960
Earnings per common share attributable to Corning Incorporated:
Basic	$	0.30	$	0.01	$	0.54	$	1.11
Diluted	$	0.28		$	0.01	$	0.54	$	1.07

© 2021 Corning Incorporated. All Rights Reserved.

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CORNING INCORPORATED AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions, except share and per share amounts)

Assets

Current assets:

Cash and cash equivalents

Trade accounts receivable, net of doubtful accounts

Inventories, net of inventory reserves

Other current assets

Total current assets

Property, plant and equipment, net of accumulated depreciation

Goodwill, net

Other intangible assets, net

Deferred income taxes

Other assets

Total Assets

Liabilities and Equity

Current liabilities:

Current portion of long-term debt and short-term borrowings

Accounts payable

Other accrued liabilities

Total current liabilities

Long-term debt

Postretirement benefits other than pensions

Other liabilities

Total liabilities

Commitments and contingencies Shareholders' equity:

Convertible preferred stock, Series A - Par value $100 per share; Shares authorized 3,100; Shares issued: 2,300

Common stock - Par value $0.50 per share; Shares authorized: 3.8 billion; Shares issued: 1,726 million and 1,718 million

Additional paid-in capital - common stock Retained earnings

Treasury stock, at cost; shares held: 961 million and 956 million Accumulated other comprehensive loss

Total Corning Incorporated shareholders' equity

Noncontrolling interests

Total equity

December 31,

20202019

$	2,672	$	2,434
	2,133		1,836
	2,438		2,320
	761		873
	8,004		7,463
	15,766		15,337
	2,460		1,935
	1,308		1,185
	1,121		1,157
	2,116		1,821
$	30,775	$	28,898

$	158	$	11
	1,174		1,587
	2,435		1,923
	3,767		3,521
	7,838		7,729
	727		671
	4,995		3,980
	17,327		15,901

2,300	2,300
863	859
14,642	14,323
16,120	16,408
(19,928)	(19,812)

1. (1,171)

13,257	12,907
191	90
13,448	12,997

Total Liabilities and Equity

$

30,775

$

28,898

© 2021 Corning Incorporated. All Rights Reserved.

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CORNING INCORPORATED AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)

			Three months ended			Year ended
			December 31,			December 31,
			2020			2019			2020			2019
Cash Flows from Operating Activities:
Net income	$	252	$	32	$	512	$	960
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		358			364			1,399			1,390
Amortization of purchased intangibles		34			28			121			113
Loss on disposal of assets		31			78			138			123
Severance charges		7			38			148			63
Severance payments		(21)			(17)			(147)			(28)
Share-based compensation expense		80			13			207			56
Equity in losses (earnings) of affiliated companies		42			64			25			(17)
Dividends received from affiliated companies					106			1			106
Deferred tax provision (benefit)		76			(106)			(20)			(191)
Customer incentives and deposits, net		37			140			221			142
Pension plan contributions		(141)			(2)			(221)			(2)
Translated earnings contract loss (gain)		43			(85)			38			(248)
Unrealized translation (gain) loss on transactions		(79)			(53)			(133)			33
Asbestos claim payments		(95)						(130)			(50)
Tax assessment refunds								101
Asset impairment								217
Transaction-related gain								(498)
Gain on investment		(107)						(107)
Changes in certain working capital items:
Trade accounts receivable		7			217			(274)			48
Inventories		183			40			423			(298)
Other current assets		(12)			(80)			(31)			(300)
Accounts payable and other current liabilities		196			85			57			1
Other, net		(117)			156			133			130
Net cash provided by operating activities		774			1,018			2,180			2,031
Cash Flows from Investing Activities:		`
Capital expenditures		(391)			(376)			(1,377)			(1,978)
Proceeds from sale or disposal of assets		10						37
Sale of equipment for related party					16						78
Realized gains on translated earnings contracts		2			16			12			55
Other, net		1			(13)			18			(46)
Net cash used in investing activities		(378)			(357)			(1,310)			(1,891)
Cash Flows from Financing Activities:
Net repayments of short-term borrowings and current portion of long-term debt		(100)			(300)			(100)			(300)
Retirement of long-term debt		(121)						(121)
Proceeds from issuance of long-term debt, net		31			1,482			243			1,831
Proceeds from exercise of stock options		75			15			124			58
Repurchases of common stock for treasury					(232)			(105)			(940)
Dividends paid		(200)			(188)			(787)			(742)
Other, net		1			9			17			46
Net cash (used in) provided by financing activities		(314)			786			(729)			(47)
Effect of exchange rates on cash		76			16			97			(14)
Net increase in cash and cash equivalents		158			1,463			238			79
Cash and cash equivalents at beginning of year		2,514			971			2,434			2,355
Cash and cash equivalents at end of year		$	2,672		$	2,434		$	2,672		$	2,434

© 2021 Corning Incorporated. All Rights Reserved.

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CORNING INCORPORATED AND SUBSIDIARY COMPANIES

(Unaudited)

GAAP Earnings per Common Share

The following table sets forth the computation of basic and diluted earnings per common share (in millions, except per share amounts):

		Three months ended			Year ended
		December 31,			December 31,
		2020		2019			2020		2019
Net income attributable to Corning Incorporated	$	252	$	32	$	512	$	960
Less: Series A convertible preferred stock dividend		25		24			98		98
Net income available to common stockholders - basic		227		8			414		862
Add: Series A convertible preferred stock dividend		25							98
Net income available to common stockholders - diluted	$	252	$	8	$	414	$	960
Weighted-average common shares outstanding - basic		763		764			761		776
Effect of dilutive securities:
Stock options and other dilutive securities		16		7			11		8
Series A convertible preferred stock		115							115
Weighted-average common shares outstanding - diluted		894		771			772		899
Basic earnings per common share	$	0.30	$	0.01	$	0.54	$	1.11
Diluted earnings per common share	$	0.28	$	0.01	$	0.54	$	1.07

Core Earnings per Common Share

The following table sets forth the computation of core basic and core diluted earnings per common share (in millions, except per share amounts):

		Three months ended			Year ended
		December 31,			December 31,
		2020		2019			2020		2019
Core net income attributable to Corning Incorporated	$	462	$	406	$	1,237	$	1,578
Less: Series A convertible preferred stock dividend		25		24			98		98
Core net income available to common stockholders - basic		437		382			1,139		1,480
Add: Series A convertible preferred stock dividend		25		24			98		98
Core net income available to common stockholders - diluted	$	462	$	406	$	1,237	$	1,578
Weighted-average common shares outstanding - basic		763		764			761		776
Effect of dilutive securities:
Stock options and other dilutive securities		16		7			11		8
Series A convertible preferred stock		115		115			115		115
Weighted-average common shares outstanding - diluted		894		886			887		899
Core basic earnings per common share	$	0.57	$	0.50	$	1.50	$	1.91
Core diluted earnings per common share	$	0.52	$	0.46	$	1.39	$	1.76

© 2021 Corning Incorporated. All Rights Reserved.

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