CORNING INCORPORATED AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF (LOSS) INCOME (Unaudited; in millions, except per share amounts)
Three months ended | Year ended | |||||||||||
December 31, | December 31, | |||||||||||
Net sales | 2022 | 2021 | 2022 | 2021 | ||||||||
$ | 3,406 | $ | 3,676 | $ | 14,189 | $ | 14,082 | |||||
Cost of sales | 2,491 | 2,405 | 9,683 | 9,019 | ||||||||
Gross margin | 915 | 1,271 | 4,506 | 5,063 | ||||||||
Operating expenses: | ||||||||||||
Selling, general and administrative expenses | 517 | 476 | 1,898 | 1,827 | ||||||||
Research, development and engineering expenses | 281 | 280 | 1,047 | 995 | ||||||||
Amortization of purchased intangibles | 31 | 32 | 123 | 129 | ||||||||
Operating income | 86 | 483 | 1,438 | 2,112 | ||||||||
Interest income | 6 | 3 | 15 | 11 | ||||||||
Interest expense | (76) | (73) | (292) | (300) | ||||||||
Translated earnings contract gain, net | 94 | 92 | 351 | 354 | ||||||||
Other (expense) income, net | (106) | 80 | 285 | 249 | ||||||||
Income before income taxes | 4 | 585 | 1,797 | 2,426 | ||||||||
Provision for income taxes | (31) | (89) | (411) | (491) | ||||||||
Net (loss) income | (27) | 496 | 1,386 | 1,935 | ||||||||
Net income attributable to non-controlling interest | (9) | (9) | (70) | (29) | ||||||||
Net (loss) income attributable to Corning Incorporated | $ | (36) | $ | 487 | $ | 1,316 | $ | 1,906 | ||||
(Loss) earnings per common share available to common | ||||||||||||
shareholders: | ||||||||||||
Basic | $ | (0.04) | $ | 0.57 | $ | 1.56 | $ | 1.30 | ||||
Diluted | $ | (0.04) | $ | 0.56 | $ | 1.54 | $ | 1.28 | ||||
Reconciliation of net (loss) income attributable to Corning | ||||||||||||
Incorporated versus net (loss) income available to common | ||||||||||||
shareholders: | ||||||||||||
Net (loss) income attributable to Corning Incorporated | $ | (36) | $ | 487 | $ | 1,316 | $ | 1,906 | ||||
Series A convertible preferred stock dividend | (24) | |||||||||||
Excess consideration paid for redemption of preferred shares | (803) | |||||||||||
Net (loss) income available to common shareholders | $ | (36) | $ | 487 | $ | 1,316 | $ | 1,079 | ||||
© 2023 Corning Incorporated. All Rights Reserved
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited; in millions, except share and per share amounts)
December 31, | |||||||
Assets | 2022 | 2021 | |||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,671 | $ | 2,148 | |||
Trade accounts receivable, net of doubtful accounts | 1,664 | 2,004 | |||||
Inventories | 2,904 | 2,481 | |||||
Other current assets | 1,157 | 1,026 | |||||
Total current assets | 7,396 | 7,659 | |||||
Property, plant and equipment, net of accumulated depreciation | 15,371 | 15,804 | |||||
Goodwill, net | 2,394 | 2,421 | |||||
Other intangible assets, net | 1,029 | 1,148 | |||||
Deferred income taxes | 1,073 | 1,066 | |||||
Other assets | 2,179 | 2,056 | |||||
Total Assets | $ | 29,442 | $ | 30,154 | |||
Liabilities and Equity | |||||||
Current liabilities: | |||||||
Current portion of long-term debt and short-term borrowings | $ | 224 | $ | 55 | |||
Accounts payable | 1,804 | 1,612 | |||||
Other accrued liabilities | 3,090 | 3,139 | |||||
Total current liabilities | 5,118 | 4,806 | |||||
Long-term debt | 6,687 | 6,989 | |||||
Postretirement benefits other than pensions | 407 | 622 | |||||
Other liabilities | 4,955 | 5,192 | |||||
Total liabilities | 17,167 | 17,609 | |||||
Commitments and contingencies | |||||||
Shareholders' equity: | |||||||
Common stock - Par value $0.50 per share; Shares authorized 3.8 billion; | |||||||
Shares issued: 1.8 billion and 1.8 billion | 910 | 907 | |||||
Additional paid-in capital - common stock | 16,682 | 16,475 | |||||
Retained earnings | 16,778 | 16,389 | |||||
Treasury stock, at cost; Shares held: 977 million and 970 million | (20,532) | (20,263) | |||||
Accumulated other comprehensive loss | (1,830) | (1,175) | |||||
Total Corning Incorporated shareholders' equity | 12,008 | 12,333 | |||||
Non-controlling interest | 267 | 212 | |||||
Total equity | 12,275 | 12,545 | |||||
Total Liabilities and Equity | $ | 29,442 | $ | 30,154 | |||
© 2023 Corning Incorporated. All Rights Reserved
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in millions)
Three months ended | Year ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
Cash Flows from Operating Activities: | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Net (loss) income | $ | (27) | $ | 496 | $ | 1,386 | $ | 1,935 | ||||||||
Adjustments to reconcile net (loss) income to net cash provided by | ||||||||||||||||
operating activities: | ||||||||||||||||
Depreciation | 315 | 347 | 1,329 | 1,352 | ||||||||||||
Amortization of purchased intangibles | 31 | 32 | 123 | 129 | ||||||||||||
Loss on disposal of assets | 79 | 49 | 189 | 57 | ||||||||||||
Severance charges (reversals) | 62 | (13) | 70 | (13) | ||||||||||||
Share-based compensation expense | 30 | 73 | 175 | 190 | ||||||||||||
Translation loss (gain) on Japanese yen-denominated debt | 130 | (53) | (191) | (180) | ||||||||||||
Deferred tax (benefit) provision | (104) | (52) | (46) | 16 | ||||||||||||
Translated earnings contract gain | (94) | (92) | (351) | (354) | ||||||||||||
Unrealized translation (gain) loss on transactions | (72) | 12 | 68 | 77 | ||||||||||||
Changes in certain working capital items: | ||||||||||||||||
Trade accounts receivable | 9 | 92 | 170 | (54) | ||||||||||||
Inventories | 115 | (31) | (522) | (103) | ||||||||||||
Other current assets | (134) | (14) | (139) | (224) | ||||||||||||
Accounts payable and other current liabilities | 267 | 301 | 292 | 772 | ||||||||||||
Customer deposits and government incentives | (34) | (34) | 110 | 28 | ||||||||||||
Deferred income | (34) | (24) | (49) | (116) | ||||||||||||
Other, net | 78 | (66) | 1 | (100) | ||||||||||||
Net cash provided by operating activities | 617 | 1,023 | 2,615 | 3,412 | ||||||||||||
Cash Flows from Investing Activities: | ||||||||||||||||
Capital expenditures | (403) | (623) | (1,604) | (1,637) | ||||||||||||
(Payments) proceeds from sale of business | (1) | 1 | 76 | 103 | ||||||||||||
Investments in and proceeds from unconsolidated entities, net | (28) | (3) | (38) | 84 | ||||||||||||
Realized gains on translated earnings contracts | 91 | 37 | 300 | 67 | ||||||||||||
Premiums paid on hedging contracts | (49) | (20) | (75) | (48) | ||||||||||||
Other, net | 4 | (8) | (14) | 12 | ||||||||||||
Net cash used in investing activities | (386 | ) | (616 | ) | (1,355 | ) | (1,419 | ) | ||||||||
Cash Flows from Financing Activities: | ||||||||||||||||
Repayments of short-term borrowings | (87) | (144) | ||||||||||||||
Repayments of long-term debt | (716) | |||||||||||||||
Proceeds from issuance of short-term debt | 70 | |||||||||||||||
Proceeds from issuance of long-term debt | 20 | 3 | 57 | 22 | ||||||||||||
Payment for redemption of preferred stock | (507) | (507) | ||||||||||||||
Payments of employee withholding tax on stock awards | (3) | (4) | (47) | (61) | ||||||||||||
Proceeds from exercise of stock options | 5 | 6 | 40 | 97 | ||||||||||||
Purchases of common stock for treasury | (252) | (221) | (274) | |||||||||||||
Dividends paid | (236) | (212) | (932) | (871) | ||||||||||||
Other, net | (5) | (3) | (22) | 2 | ||||||||||||
Net cash used in financing activities | (219 | ) | (462 | ) | (1,649 | ) | (2,452 | ) | ||||||||
Effect of exchange rates on cash | 29 | (9 | ) | (88 | ) | (65 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents | 41 | (64 | ) | (477 | ) | (524 | ) | |||||||||
Cash and cash equivalents at beginning of year | 1,630 | 2,212 | 2,148 | 2,672 | ||||||||||||
Cash and cash equivalents at end of year | $ | 1,671 | $ | 2,148 | $ | 1,671 | $ | 2,148 | ||||||||
© 2023 Corning Incorporated. All Rights Reserved
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
(Unaudited)
GAAP (Loss) Earnings per Common Share
The following table sets forth the computation of basic and diluted (loss) earnings per common share (in millions, except per share amounts):
Three months ended | Year ended | |||||||
December 31, | December 31, | |||||||
2022 | 2021 | 2022 | 2021 | |||||
Net (loss) income attributable to Corning Incorporated | $ | (36) | $ | 487 | $ | 1,316 | $ | 1,906 |
Less: Series A convertible preferred stock dividend | 24 | |||||||
Less: Excess consideration paid for redemption of preferred shares | 803 | |||||||
Net (loss) income available to common shareholders - basic | (36) | 487 | 1,316 | 1,079 | ||||
Net (loss) income available to common shareholders - diluted | $ | (36) | $ | 487 | $ | 1,316 | $ | 1,079 |
Weighted-average common shares outstanding - basic | 843 | 849 | 843 | 828 | ||||
Effect of dilutive securities: | ||||||||
Stock options and other dilutive securities | 15 | 14 | 16 | |||||
Weighted-average common shares outstanding - diluted | 843 | 864 | 857 | 844 | ||||
Basic (loss) earnings per common share | $ | (0.04) | $ | 0.57 | $ | 1.56 | $ | 1.30 |
Diluted (loss) earnings per common share | $ | (0.04) | $ | 0.56 | $ | 1.54 | $ | 1.28 |
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, | |||||||
2022 | 2021 | 2022 | 2021 | |||||
Core net income attributable to Corning Incorporated | $ | 402 | $ | 465 | $ | 1,794 | $ | 1,811 |
Less: Series A convertible preferred stock dividend | 24 | |||||||
Core net income available to common shareholders - basic | 402 | 465 | 1,794 | 1,787 | ||||
Plus: Series A convertible preferred stock dividend | 24 | |||||||
Core net income available to common shareholders - diluted | $ | 402 | $ | 465 | $ | 1,794 | $ | 1,811 |
Weighted-average common shares outstanding - basic | 843 | 849 | 843 | 828 | ||||
Effect of dilutive securities: | ||||||||
Stock options and other dilutive securities | 13 | 15 | 14 | 16 | ||||
Series A convertible preferred stock | 31 | |||||||
Weighted-average common shares outstanding - diluted | 856 | 864 | 857 | 875 | ||||
Core basic earnings per common share | $ | 0.48 | $ | 0.55 | $ | 2.13 | $ | 2.16 |
Core diluted earnings per common share | $ | 0.47 | $ | 0.54 | $ | 2.09 | $ | 2.07 |
© 2023 Corning Incorporated. All Rights Reserved
CORE PERFORMANCE MEASURES
In managing the Company and assessing our financial performance, we adjust certain measures provided by our consolidated financial statements to exclude specific items to arrive at our core performance measures. These items include the impact of translating the Japanese yen-denominated debt, the impact of the translated earnings contracts, acquisition-related costs, certain discrete tax items and other tax-related adjustments, restructuring, impairment, and other charges and credits, certain litigation, regulatory and other legal matters, pension mark-to-market adjustments and other items which do not reflect the ongoing operating results of the Company.
In addition, because a significant portion of our revenues and expenses are denominated in currencies other than the U.S. dollar, management believes it is important to understand the impact on sales and net income of translating these currencies into U.S. dollars. Therefore, management utilizes constant-currency reporting for Display Technologies, Specialty Materials, Environmental Technologies and Life Sciences segments to exclude the impact from the Japanese yen, South Korean won, Chinese yuan, new Taiwan dollar and the euro, as applicable to the segment. The most significant constant-currency adjustment relates to the Japanese yen exposure within the Display Technologies segment. We establish constant-currency rates based on internally derived management estimates which are closely aligned with the currencies we have hedged. For details of the rates used, please see the footnotes to the "Reconciliation of Non-GAAP Measures" section.
We believe that the use of constant-currency reporting allows management to understand our results without the volatility of currency fluctuation, analyze underlying trends in the businesses, and establish operational goals and forecasts. Further, it reflects the underlying economics of the translated earnings contracts used to mitigate the impact of changes in currency exchange rates on our earnings and cash flows.
Core performance measures are not prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), but management believes that reporting core performance measures provides investors with greater transparency to the information used by our management team to make financial and operational decisions. We believe investors should consider these non-GAAP measures in evaluating our results as they are more indicative of our core operating performance and how management evaluates our operational results and trends. These measures are not, and should not be viewed as a substitute for, GAAP reporting measures. With respect to the outlook for future periods, it is not possible to provide reconciliations for these non-GAAP measures because management does not forecast the movement of foreign currencies against the U.S. dollar, or other items that do not reflect ongoing operations, nor does it forecast items that have not yet occurred or are out of management's control. As a result, management is unable to provide outlook information on a GAAP basis.
For a reconciliation of non-GAAP performance measures to their most directly comparable GAAP financial measure, please see "Reconciliation of Non-GAAP Measures".
© 2023 Corning Incorporated. All Rights Reserved
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Corning Inc. published this content on 31 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 January 2023 12:17:05 UTC.