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GLW · Corning

37 filings

10-K

GLW 10-K Annual Reports

Corning - 37 annual reports

Filing record · 2016–202610-K1110-Q338-K111

2025
Corning Annual Report, Year Ended Dec 31, 2025
Corning Inc. (GLW) closed 2025 with a strong year driven by the Optical Communications segment, which benefited from AI-driven demand for data center and enterprise fiber and connectivity products. Net sales rose 19% to $15.6 billion from $13.1 billion, gross margin expanded 3 percentage points to 36%, and GAAP net income attributable to Corning more than tripled to $1.6 billion ($1.83 diluted EPS) from $506 million. Core net sales reached $16.4 billion (up 13%) and core EPS rose 29% to $2.52. Management states it achieved both its Springboard growth target (adding $4 billion in annualized core sales) and its 20% core operating margin target a full year ahead of the end-2026 schedule. The company guided Q1 2026 core net sales to $4.2–4.3 billion. Balance sheet and cash flow strengthened, with operating cash flow of $2.7 billion (up from $1.9 billion) and cash of $1.5 billion. Total debt rose to $8.4 billion (41% of total capital, up from 39%) as the company took on roughly $1.4 billion of finance leases, primarily for a solar manufacturing facility in Hemlock, Michigan. Capital expenditures were $1.3 billion in 2025, with guidance of about $1.7 billion for 2026. Shareholder returns included $999 million in dividends and $163 million in buybacks, with about $3.0 billion remaining under the 2019 repurchase authorization. The company also declared a quarterly dividend of $0.28 per share for March 2026. Investor watch items include concentrated customer exposure (top customers account for 28% to 61% of segment sales), growing exposure to the solar business, which posted a segment net loss in 2025 as it ramped capacity, and a $6.0 billion deferred tax asset recognized with a full valuation allowance. The company also disclosed a February 2026 unfavorable South Korean tax ruling that will trigger a roughly $92 million noncash charge in Q1 2026. Foreign currency remains a material factor, with 57% of sales from international markets and significant yen exposure.
Feb 12, 2026
2024
Corning Annual Report, Year Ended Dec 31, 2024
Corning's FY2024 10-K (filed February 13, 2025) shows a company in early recovery from a difficult 2023-2024 earnings cycle. Net sales rose 4% to $13.1 billion, with gross margin expanding to 33% from 31%, driven by Optical Communications growth tied to AI data center connectivity demand and by price increases in Display Technologies. Reported GAAP net income attributable to Corning fell to $506 million ($0.58 diluted EPS) from $581 million, primarily due to $131 million of non-cash cumulative translation losses from foreign entity liquidations and a $49 million write-down tied to a customer's insolvency. On a non-GAAP basis, which management uses as its core measure, core net sales grew 7% to $14.5 billion and core EPS rose 15% to $1.96. Management launched a three-year "Springboard" plan to add more than $3 billion in annualized sales by the end of 2026 and reach a 20% operating margin target by then. Q4 2024 sales grew while profit grew significantly faster, which management presents as an encouraging start. Optical Communications (32% of segment sales) and Display Technologies (27%) are the main earnings engines, with Display generating $1.0 billion of segment net income, a large share of company profit. Concentration risk is significant: a small number of customers account for large shares of several segments, and Display Technologies depends heavily on pricing and volume. Balance sheet and liquidity remain solid. The company ended 2024 with $1.8 billion of cash, total debt of $7.2 billion (39% of total capital), and a $1.5 billion undrawn revolver. Operating cash flow was $1.9 billion, capital expenditures fell to $1.0 billion from $1.4 billion, and the company paid $986 million in dividends. Roughly $3.1 billion remains under the buyback authorization, and the quarterly dividend was declared at $0.28 per share. Key watch items include a $1.1 billion-plus synthetic lease for a solar facility, the South Korean tax dispute receivable, and the reliance of Hemlock and Emerging Growth Businesses, where segment income turned negative in 2024.
Feb 13, 2025
2023
Corning Annual Report, Year Ended Dec 31, 2023
Corning Incorporated's (GLW) 2023 Form 10-K reveals a challenging year marked by an 11% decline in net sales, largely due to inventory drawdowns in the Optical Communications segment and softness in the Life Sciences and Specialty Materials sectors. Despite these headwinds, the company has taken steps to improve profitability through price increases and productivity enhancements. The Display Technologies segment showed resilience with a 7% sales increase driven by higher volumes and pricing actions. Looking ahead, Corning anticipates normalized market conditions in the midterm and is positioned to capitalize on growth drivers like 5G, cloud computing, AI, larger display sizes, and stricter emission regulations. The company remains committed to innovation and maintaining its market leadership across its diverse segments. Investors should monitor the company's progress in restoring demand and profitability, particularly in its key Optical Communications and Display Technologies segments, as well as its disciplined approach to capital allocation and ongoing strategic investments.
Feb 12, 2024
2022
Corning Annual Report, Year Ended Dec 31, 2022
Corning Incorporated's (GLW) 2022 Form 10-K highlights a year of resilience amidst a challenging economic environment, marked by inflationary pressures and supply chain disruptions. Net sales saw a modest 1% increase to $14.2 billion, driven by robust growth in the Optical Communications segment (+15%) and the Hemlock and Emerging Growth Businesses segment (+34%). However, this growth was tempered by a significant 11% decline in Display Technologies revenue and a negative impact from foreign exchange rates. Net income attributable to Corning Incorporated decreased by 31% to $1.3 billion, largely due to increased charges related to severance, accelerated depreciation, asset write-offs, and legal matters, alongside adverse foreign currency translation impacts. The company is actively managing cost pressures by implementing price increases and optimizing productivity. Despite headwinds, Corning remains confident in its long-term strategy, focusing on capturing market opportunities and driving innovation across its diverse portfolio, expecting continued multi-year growth with improved margins and cash generation.
Feb 13, 2023
2021
Corning Annual Report, Year Ended Dec 31, 2021
Corning Incorporated (GLW) reported strong performance in its 2021 fiscal year, driven by robust demand across its key segments. The company saw a significant increase in net sales, reaching $14.1 billion, a 25% rise compared to 2020. This growth was fueled by strong performance in Optical Communications, Life Sciences, and Environmental Technologies, with Display Technologies also showing positive momentum. The company's strategic focus on core technologies and market-access platforms continues to yield results, contributing to increased profitability and robust free cash flow generation. Corning's outlook for 2022 is positive, with projected net sales of approximately $15 billion, indicating continued growth. The company remains committed to rewarding shareholders through increased dividends and share repurchases while investing in innovation to maintain its leadership positions. Key risks highlighted in the filing include the ongoing impact of the COVID-19 pandemic, inflationary pressures on raw materials and logistics, supply chain disruptions, and customer concentration in certain segments. Corning also emphasizes its reliance on intellectual property and the need for continued innovation to maintain its competitive advantage. Despite these challenges, the company's diversified portfolio and strong financial position provide resilience.
Feb 14, 2022
2020
Corning Annual Report, Year Ended Dec 31, 2020
Corning's 2020 10-K shows a year of sharp earnings pressure and portfolio reshaping. Net sales fell 2% to $11.3 billion, while gross margin dropped 12% to $3.5 billion (31% of sales, down from 35%). GAAP net income fell 47% to $512 million, or $0.54 per diluted share, versus $960 million in 2019. The decline was driven by a $211 million R&D asset impairment in 'All Other', $827 million in total restructuring, impairment and other charges, a $105 million cumulative revenue reduction from a customer exiting LCD panel production, and $226 million in translated earnings contract losses. These were partly offset by a $498 million pre-tax gain from consolidating Hemlock Semiconductor Group (HSG) and an $83 million after-tax gain on an IPO-related investment. Core net income, a non-GAAP measure, fell 22% to $1.24 billion, or $1.39 per diluted share. Segment results diverged. Optical Communications sales fell 12% to $3.56 billion as carrier and enterprise customers cut capital spending, and segment net income dropped 25%. Display Technologies, Corning's largest profit contributor at $717 million of segment net income, declined 9% on lower first-half volumes and severance-related restructuring. Specialty Materials grew 18% to $1.88 billion, driven by premium cover glass (Gorilla Glass Victus and Ceramic Shield for Apple) and semiconductor demand, and its segment net income rose 40%. Customer concentration is high: four customers account for 74% of Display sales, and no single customer exceeded 10% of consolidated sales overall. Liquidity and capital allocation remain conservative. Cash and equivalents were $2.7 billion, total debt to capital was 37% against a 60% covenant, and operating cash flow was $2.2 billion. Capital expenditures fell to $1.4 billion, with a similar level planned for 2021. Share repurchases were suspended in March 2020, although the quarterly dividend was raised 9% to $0.24 per share. Management guided to Q1 2021 net sales of $3.0 to $3.2 billion and expects year-over-year growth to accelerate.
Feb 12, 2021
2019
Corning Annual Report, Year Ended Dec 31, 2019
Corning's FY2019 10-K shows a year of mixed results: net sales rose 2% to $11.5 billion, but net income fell 10% to $960 million ($1.07 diluted EPS) as gross margin dropped to 35% from 40%. Growth came from Environmental Technologies (gasoline particulate filters, +16%), Specialty Materials (Gorilla Glass, +8%) and Life Sciences (+7%). Display Technologies (-1%) and Optical Communications (-3%) weakened in the second half of 2019 as lower volumes hurt factory utilization, and Optical Communications is guided down 5-10% for 2020. Equity earnings collapsed to $17 million from $390 million, mainly because Hemlock Semiconductor Group took a $369 million pre-tax share of an impairment on its solar business. On a non-GAAP basis, core net income fell 6% to $1.58 billion ($1.76 core diluted EPS). Cash generation was softer, with operating cash flow down to $2.03 billion from $2.92 billion, mainly due to lower customer deposits. Capex fell to $1.98 billion, and the company returned cash through $742 million in dividends and $940 million in buybacks, while raising about $1.5 billion of new U.S. dollar notes, including $1.1 billion of 60-year bonds. Management also raised the quarterly dividend 10% to $0.22 and announced a 2020-2023 plan to invest $10-12 billion in growth and return $8-10 billion to shareholders. The filing flags several risks: heavy customer concentration (Display Technologies' top four customers are 72% of segment sales), exposure to South Korea, and a yen hedge book with $12.2 billion of notional translated-earnings contracts. It also discloses an early COVID-19 (coronavirus) risk tied to Wuhan operations, which the 2020 outlook excludes. The auditor's critical audit matters centre on a $415 million South Korean tax deposit receivable and the HSG impairment.
Feb 18, 2020
2018
Corning Annual Report, Year Ended Dec 31, 2018
Corning's 2018 10-K shows a year of strong top-line growth and a sharp rebound in reported earnings. Net sales rose 12% to $11.29 billion, led by Optical Communications (up 18%, including the $841 million acquisition of 3M's Communication Markets Division) and Environmental Technologies (up 17%). Net income attributable to Corning was $1.07 billion, or $1.13 diluted EPS, versus a net loss of $0.5 billion in 2017, which had been depressed by about $1.5 billion of one-time tax reform charges. Core diluted EPS, a non-GAAP measure management emphasizes, rose to $1.78 from $1.60, and core earnings grew 2% to $1.67 billion. The quality of the improvement is mixed. Display Technologies, historically the profit engine, saw segment net income fall 6% to $835 million as Gen 10.5 ramp-up costs and display glass price declines weighed on results, even though pricing stabilized in the second half. Operating cash flow improved to $2.92 billion, but capital spending rose to $2.24 billion, and net cash fell during the year. Customer deposits climbed to $1.0 billion, which boosted operating cash flow but represents liabilities tied to future glass supply rather than earned revenue. Legal expenses also rose $105 million, and the company faces concentration risk, with a few customers driving most segment sales, including two South Korean display customers. Capital allocation remained shareholder-friendly. Corning repurchased 74.8 million shares for about $2.2 billion, paid $685 million in dividends, and raised the quarterly dividend 16% to $0.18 for 2018 and again to $0.20 in 2019. Total debt rose to about $6.0 billion, and debt-to-capital was 30%, comfortably below the 60% covenant limit. Management's 2019 outlook calls for low-teens Optical Communications growth, high-single-digit Environmental Technologies growth, and a narrowing of display price declines to mid-single digits.
Feb 12, 2019
2017
Corning Annual Report, Year Ended Dec 31, 2017
Corning's 2017 10-K shows a year of divergent segment performance. Net sales rose 8% to $10.1 billion, driven by Optical Communications (up 18% to $3.5 billion) and Specialty Materials (up 25% to $1.4 billion, on Gorilla Glass growth), while Display Technologies declined 7% to $3.0 billion on LCD glass price declines of roughly 10%. Corning reported a GAAP net loss of $497 million, or $(0.66) per share, versus net income of $3.7 billion in 2016, which included a $2.7 billion non-taxable gain on the Dow Corning realignment. The swing was driven mainly by a $1.1 billion provisional toll charge and a $347 million remeasurement of deferred tax assets under the 2017 Tax Act. On a non-GAAP basis, which excludes those tax items, currency effects, and other one-time items, core earnings were $1,756 million, or $1.72 per diluted share, versus $1.55 in 2016, with core EPS helped by lower share count from buybacks. Capital allocation remained shareholder-focused. Corning repurchased about $2.4 billion of stock in 2017, paid $651 million in dividends, and raised the quarterly dividend 14.8% to $0.155 for 2017 and, in February 2018, another 16.1% to $0.18. Capital spending rose to $1.8 billion, mainly for the Gen 10.5 LCD facility in China, gas particulate filter capacity, and optical fiber and cable expansion. The company also agreed to acquire 3M's Communication Markets Division for about $900 million, expected to close in 2018. Management guides 2018 core sales to about $11 billion, with Optical Communications up about 10% and Display pricing declines narrowing to mid-single digits. Key risks include concentrated customer bases (three Display customers account for 62% of segment sales), heavy dependence on Japanese yen and Korean won exchange rates (about 69% of sales are outside the U.S.), the pending 2017 Tax Act accounting that remains provisional, and the Display segment's exposure to LCD price pressure, which funds a large share of cash flow. Total debt rose to $4.7 billion of long-term debt, pushing debt-to-capital to 25% from 18%.
Feb 15, 2018
2016
Corning Annual Report, Year Ended Dec 31, 2016
Corning's fiscal 2016 results (10-K filed February 6, 2017) were dominated by a one-time, non-taxable $2.7 billion gain from the May 31, 2016 realignment of its Dow Corning stake, which lifted reported net income to $3.7 billion, or $3.23 diluted EPS, versus $1.3 billion ($1.00) in 2015. Excluding that gain and other non-operating items, the business is the better guide to run-rate earnings. Core net sales fell 1% to $9.71 billion and core diluted EPS declined to $1.55 from $1.40 on a per-share basis (core earnings fell 6% to $1.77 billion, though share count reduction helped EPS), with the Display Technologies segment under pressure from LCD glass price declines slightly above 10%. Reported GAAP sales rose 3% to $9.39 billion, aided by a 10%+ yen tailwind. Capital allocation remained shareholder-focused. Corning repurchased about 197 million shares for $4.2 billion in 2016, and the Board authorized a new $4 billion buyback in December 2016 and raised the quarterly dividend 12.5% in 2016 and another 14.8% (to $0.155) in February 2017. Operating cash flow fell to $2.5 billion from $2.8 billion, and year-end cash was $5.3 billion against $3.6 billion of long-term debt, with total debt-to-capital of 18%. Management guided to 2017 capex of about $1.5 billion, with growth in Optical Communications (low-teens sales growth) and Environmental Technologies (flat to up slightly), while the Display segment expects a more moderate price decline. Key risks for investors include customer concentration (three customers drove 65% of Display sales and Samsung Display was 11% of consolidated sales), exposure to the Japanese yen through roughly $16.7 billion of translated-earnings hedges, a $2.4 billion goodwill and intangible base, unresolved non-PCC asbestos claims, and $12.6 billion of unremitted foreign earnings that could carry material tax cost if repatriated.
Feb 6, 2017
2015
Corning Annual Report, Year Ended Dec 31, 2015
Corning's 2015 10-K shows a year of contraction after a strong 2014. Net sales fell 6% to $9.1 billion, driven by a 20% decline in Display Technologies (LCD glass), which was hit by a roughly 11% depreciation of the yen and price declines in the low teens. Net income attributable to Corning fell 46% to $1.3 billion ($1.00 diluted EPS) from $2.5 billion, largely because 2014 included a large foreign currency hedge gain. On a non-GAAP 'core' basis, which strips out hedge gains, currency effects and pension mark-to-market items, earnings were $1.9 billion ($1.40 per share), down 7%. Optical Communications (+12%) and Specialty Materials were the bright spots, with Gorilla Glass volume growth offset by declining advanced optics sales. Management's strategic response is a new capital allocation framework announced in October 2015. It targets roughly 80% of R&D and capex on three core technologies, four manufacturing platforms and five market-access platforms. Corning plans to generate more than $20 billion in cash and return over $10 billion to shareholders through 2019, and to raise the dividend by at least 10% annually. During 2015 it repurchased about 151 million shares for roughly $3.2 billion, and in January 2016 it raised the quarterly dividend 12.5% to $0.135. The most significant pending event is the exchange of Corning's 50% stake in Dow Corning for a new entity holding about 40% of Hemlock Semiconductor and roughly $4.8 billion in cash, expected to close in the first half of 2016. Dow Corning contributed $281 million of Corning's $299 million in equity earnings. Investors should also watch the asbestos exposure tied to the PCC plan (about $678 million liability, with the non-PCC stay expected to lift in 2H 2016), the pending Gen 10.5 LCD investment in China backed by a $400 million customer deposit, and the risk that LCD glass pricing pressure persists. Balance sheet leverage remains moderate, with debt-to-capital at 19% and cash and short-term investments of $4.6 billion.
Feb 12, 2016
2014
Corning Annual Report, Year Ended Dec 31, 2014
Corning's 2014 10-K shows a year transformed by the January 2014 acquisition of full ownership of Samsung Corning Precision Materials (now Corning Precision Materials). Net sales rose 24% to $9,715 million from $7,819 million, and net income attributable to Corning rose 26% to $2,472 million, or $1.73 per diluted share. Much of that headline growth is non-operating or acquisition-driven: $1,406 million of pre-tax gains on yen hedging programs, a $249 million contingent-consideration fair value adjustment, and consolidation of the Samsung entity added $1.8 billion of sales. Management's core performance measures, which strip out these items, show core net sales of $10,217 million (up 29%) and core diluted EPS of $1.53 (up 24% from $1.23), a more modest picture of operating momentum. The Display Technologies segment, now 40% of sales and reliant on a few customers (three accounted for 61% of segment sales), is the core earnings engine but faces mid-teens percentage price declines that outpaced roughly 10% volume growth. Optical Communications (27% of sales) and Environmental Technologies (11%) grew strongly. Balance sheet and cash generation are solid: $6.1 billion in cash and short-term investments against $3.3 billion of debt, a 13% debt-to-capital ratio, and operating cash flow of $4.7 billion (boosted by a roughly $1.6 billion dividend from the consolidated Samsung entity). Corning returned heavily to shareholders, repurchasing about $2.5 billion of stock in 2014 and raising the quarterly dividend 20% to $0.12. Key risks for investors include the Dow Corning equity affiliate (about 95% of 2014 equity earnings, $266 million total), the Pittsburgh Corning/non-PCC asbestos liability of $681 million, pending Department of Justice antitrust investigation of automotive substrates with no estimate of impact, and currency exposure, since roughly 73% of sales are outside the U.S. and about 40% of Display sales are yen-denominated.
Feb 13, 2015
2013-A
Corning Annual Report (Amendment), Year Ended Dec 31, 2013
This filing is an amendment (10-K/A) to Corning Incorporated's 2013 Annual Report, specifically addressing the omission of three exhibits: Form of Officer Severance Agreement, Form of Officer Change in Control Agreement, and Subsidiaries of the Registrant. The amendment does not alter the previously reported financial statements or other disclosures from the original filing on February 10, 2014. Investors should note that this filing is administrative in nature and does not introduce new financial performance information or strategic updates for the fiscal year 2013. The company's status as a large accelerated filer and well-known seasoned issuer is reiterated. For investors seeking substantive information, this amendment highlights the company's commitment to corporate governance through the inclusion of standard officer agreements and transparency regarding its corporate structure via the subsidiary list. While no new financial data is presented, the filing confirms the completeness of the previous 10-K filing regarding these specific exhibits.
Mar 21, 2014
2013
Corning Annual Report, Year Ended Dec 31, 2013
Corning Incorporated (GLW) filed its 2013 10-K on February 9, 2014, detailing its performance across five key segments: Display Technologies, Optical Communications, Environmental Technologies, Specialty Materials, and Life Sciences. The company demonstrated resilience with stable net sales compared to the previous year, while achieving a notable 20% increase in net income, driven by strong hedging program gains, improved equity earnings from Dow Corning, and solid performance in several operational segments. A significant strategic move during the period was the acquisition of full ownership of Samsung Corning Precision Materials, which is expected to provide greater operational flexibility and strengthen Corning's position in the Display Technologies market. The company also continued its commitment to innovation and financial health, with substantial investments in research and development and a solid cash flow position. The outlook for 2014 was positive, with anticipated growth across most segments, despite potential headwinds from foreign exchange rates and lower equity earnings from Dow Corning.
Feb 10, 2014
2012
Corning Annual Report, Year Ended Dec 31, 2012
Corning Incorporated's 2012 10-K shows a year of record sales but sharply lower profits, driven mainly by price declines in its LCD glass (Display Technologies) business. Net sales rose slightly to $8.0 billion (up 2%), but net income attributable to Corning fell 38% to $1.73 billion, or $1.15 diluted EPS, versus $2.8 billion ($1.77) in 2011. Equity earnings from affiliates fell 45% to $810 million, reflecting weaker results at Samsung Corning Precision Materials (LCD glass) and Dow Corning (silicones and polysilicon via Hemlock). Growth came from Specialty Materials (Gorilla Glass sales up 25%, segment net income swinging to $142 million from a loss) and Telecommunications, while Display Technologies sales fell 8% and segment net income fell 32%. The balance sheet remains strong, with $6.1 billion in cash and short-term investments, $3.2 billion of operating cash flow, and total debt to capital rising to 14% from 10% after new bond issuances. Corning repurchased $720 million of stock in 2012, completed a $1.5 billion buyback program, and raised its quarterly dividend 20% to $0.09. Capital spending fell to $1.8 billion from $2.4 billion, with $1.3 billion planned for 2013. Management also recorded a $60 million after-tax restructuring charge and guided to moderating LCD price declines and sales growth in four of five segments in 2013. Key risks for investors include concentration in a few LCD panel customers, pricing pressure and excess glass capacity, the Dow Corning and Pittsburgh Corning asbestos and breast-implant liabilities, a pending DOJ antitrust investigation into automotive catalysts and substrates, and sensitivity to the Japanese yen, which is the currency of much of Display Technologies' sales.
Feb 13, 2013
2011
Corning Annual Report, Year Ended Dec 31, 2011
Corning Incorporated's 2011 10-K shows a company whose top-line growth was strong but whose earnings fell sharply, driven by its Display Technologies segment. Net sales rose 19% to $7.89 billion, led by Specialty Materials (up 86% on Corning Gorilla Glass demand) and strong Telecommunications and Environmental Technologies results. However, net income attributable to Corning fell 21% to $2.8 billion ($1.77 diluted EPS, versus $2.25 in 2010), because equity earnings from Samsung Corning Precision dropped about 30% on LCD glass price declines and excess industry capacity, and because 2010 included a non-recurring $324 million insurance settlement. Equity affiliates contributed $1.5 billion of earnings, with 98% coming from Dow Corning and Samsung Corning Precision, so a large share of profit depends on investments Corning does not control. The balance sheet and cash position remain strong. Corning ended 2011 with $5.8 billion in cash and short-term investments, a debt-to-capital ratio of 10%, and $3.2 billion of operating cash flow. Management repurchased 55 million shares for $780 million under a $1.5 billion authorization and raised the quarterly dividend 50% to $0.075 per share. Capital expenditures more than doubled to $2.4 billion, mainly for LCD glass capacity in China and Gorilla Glass capacity in Japan, and 2012 capex is planned at about $1.8 billion. The main forward-looking risks are the LCD glass oversupply, which led management to cut worldwide glass capacity by roughly 25%, a $130 million impairment on large cover glass assets, and lower expected equity earnings from Dow Corning in 2012 as polysilicon prices fall at Hemlock Semiconductor. Asbestos exposure through Pittsburgh Corning is still unresolved: the company carries a $657 million liability, and the Amended PCC Plan faces a February 2012 court hearing with contingencies. Management guides to moderate sales growth in 2012, led by Telecommunications and Environmental Technologies, with continued double-digit price declines in Display.
Feb 13, 2012
2010
Corning Annual Report, Year Ended Dec 31, 2010
Corning's 2010 Form 10-K (filed February 10, 2011) shows a company that rebounded strongly from the 2009 downturn. Net sales rose 23% to $6.63 billion, and net income attributable to Corning more than doubled-plus-to $3.56 billion, or $2.25 per diluted share, versus $2.0 billion ($1.28) in 2009. Results were lifted by volume growth in LCD glass, a $324 million pre-tax insurance settlement tied to 2009 earthquake and power-disruption losses in Display Technologies, a $265 million tax benefit from repatriation, and strong equity earnings of $1.96 billion. Equity affiliates, primarily Samsung Corning Precision and Dow Corning, supplied 98% of equity earnings from the two largest investments, so investors should recognize that a large share of profit comes from companies Corning does not control. Balance sheet and cash generation strengthened materially. Operating cash flow was $3.8 billion, cash and short-term investments reached $6.35 billion, and the debt-to-capital ratio held at 11%. Management guided to significant 2011 sales growth, led by Corning Gorilla glass, and expects 2011 capital spending of $2.4 to $2.7 billion, with roughly half directed to LCD glass capacity expansion, including an $800 million new facility in China. Management also flagged headwinds: higher 2011 taxes after the absence of 2010 repatriation benefits, expected pricing pressure, and lower dividends from equity affiliates that may reduce operating cash flow. Key risks remain concentrated. The ten largest customers accounted for 55% of sales, three Display customers accounted for 72% of segment sales, and about 74% of sales came from outside the U.S. Legal exposures include the Pittsburgh Corning asbestos plan, with a $633 million liability, and the Dow Corning breast implant matters, which carry contingent equity-earnings risk. Investors should weigh the strong 2010 earnings and cash position against the cyclicality of LCD glass demand, customer concentration, and unresolved asbestos-related uncertainty.
Feb 10, 2011
2009
Corning Annual Report, Year Ended Dec 31, 2009
Corning Incorporated's 2009 Form 10-K (filed February 10, 2010) shows a company that absorbed a sharp demand shock in the first half of 2009 and then recovered through the second half, with a headline net income that is far below 2008 only because 2008 included non-recurring items. Net sales fell 9% to $5.4 billion, and gross margin contracted from 46% to 39%, driven by 19% price declines in Display Technologies LCD glass and volume losses in Environmental Technologies (automotive) and Telecommunications. Net income attributable to Corning was $2.0 billion, or $1.28 diluted EPS, versus $5.3 billion ($3.32) in 2008. The 2008 comparison is distorted by a $2.4–2.5 billion deferred tax valuation allowance release and a $340 million asbestos credit; 2009 instead carried a $228 million restructuring charge and a $20 million asbestos charge, and the effective tax rate was negative (-3.8%). The key earnings engine remains equity income: equity in earnings of affiliates rose 6% to $1.4 billion, about 27% of net sales, with Samsung Corning Precision (50% owned, LCD glass in Korea) contributing $1.1 billion and Dow Corning contributing $287 million. Operating cash flow was stable at $2.1 billion, cash and short-term investments rose to $3.6 billion, and the debt-to-capital ratio held at 11%. Capital spending fell to $890 million from $1.9 billion as the Taichung expansion was halted, and 2010 spending guidance is $600–700 million. Management guided to higher 2010 sales, expanding gross margin, and continued LCD glass market growth of 14–22%, while warning that telecommunications sales would decline. Investors should weigh several risks: heavy customer concentration (the top ten customers were 52% of sales, and three Display customers were 62% of that segment's sales), reliance on Asian manufacturing with exposure to the yen (a 10% yen move affects net income by roughly $340 million), large asbestos liabilities of $682 million tied to the still-unconfirmed Amended PCC Plan, Dow Corning breast-implant exposure, and an ongoing EU antitrust investigation into LCD glass pricing.
Feb 10, 2010
2008
Corning Annual Report, Year Ended Dec 31, 2008
Corning's 2008 results were a tale of two halves. Net income reached $5.26 billion ($3.32 diluted EPS), but this was inflated by non-operating items: a $2.5 billion release of U.S. deferred tax valuation allowances and a $340 million net credit to asbestos litigation expense. Net sales were essentially flat at $5.95 billion (up 2%), with the first half up 21% and the second half down 16% as the LCD glass and consumer electronics markets collapsed. Gross margin fell to 28% in Q4 from above 47% in the first three quarters, reflecting idle capacity and accelerated depreciation. Operating income before the one-time items was far weaker than headline earnings suggest, so investors should focus on underlying operating trends rather than the reported bottom line. The balance sheet and liquidity remain solid. Corning ended 2008 with $2.8 billion in cash and short-term investments, $2.1 billion of operating cash flow against $1.9 billion of capex, and a debt-to-capital ratio that improved to 11%. Equity earnings from affiliates were $1.3 billion, with roughly 96% coming from Samsung Corning Precision (LCD glass in Korea) and Dow Corning (silicones). These affiliates are a major part of earnings quality and are exposed to Asia-Pacific and bankruptcy-related risks. Management halted further Taiwan expansion, idled more than half of Display Technologies capacity, and announced a restructuring of $115-165 million in Q1 2009 that will cut about 3,500 jobs and target profitability at a $5 billion sales level. The outlook is cautious. Management expects 2009 sales to be lower, with Display volumes down 20-25% in Q1 2009 versus Q4 2008, and it plans to cut 2009 capex to about $1.1 billion. Key risks include concentrated customers (ten largest about 54% of sales, two Display customers at 21% combined), pricing pressure in every core business, the proposed Amended PCC asbestos plan that remains subject to court approval and creditor votes, and the Dow Corning and Samsung-related litigation. The company has resumed dividends and repurchases, but management has stated it does not intend further buybacks until economic conditions improve.
Feb 24, 2009
2007
Corning Annual Report, Year Ended Dec 31, 2007
Corning Incorporated's 2007 Form 10-K shows a company at a strong inflection point, with record results driven overwhelmingly by its Display Technologies segment. Net sales rose 13% to $5.86 billion, gross margin expanded to 47% from 44%, and net income climbed 16% to $2.15 billion ($1.34 diluted EPS). Display Technologies accounted for 45% of sales and about $1.99 billion of segment net income, and Samsung Corning Precision (50% owned) contributed $582 million of equity earnings. Operating cash flow of $2.1 billion comfortably exceeded $1.3 billion of capital spending, and cash, equivalents and short-term investments reached $3.5 billion. Management guided to 2008 capital spending of $1.5 to $1.7 billion, with roughly $800 million to $1.0 billion directed to LCD glass. Investors should weigh several concentration and balance-sheet risks against these results. AU Optronics alone was 12% of consolidated sales, and the ten largest customers represented about half of sales. Net income depends heavily on equity affiliates, which contributed $942 million, most of it from Samsung Corning Precision and Dow Corning. The company maintains a full valuation allowance against its U.S. deferred tax assets, so its effective tax rate is only 6.2%. Litigation is also material: the PCC asbestos settlement is accrued at about $1.0 billion in total, a $185 million settlement charge hit 2007 earnings, and Dow Corning faces a $1.7 billion breast implant reserve and pending commercial creditor interest claims. Pricing pressure is expected to continue into 2008, particularly in LCD glass and telecom products. Overall, the filing presents a company with strong cash generation, improved credit ratings (BBB+ / Baa1), a newly initiated dividend of $0.05 per quarter, and a $500 million buyback program (of which $250 million had been used by year-end). Its near-term trajectory depends on LCD glass demand, the pace of its capacity expansion relative to customer demand, and the resolution of asbestos and Dow Corning-related liabilities.
Feb 15, 2008
2006
Corning Annual Report, Year Ended Dec 31, 2006
Corning Incorporated's 2006 10-K filing reveals a strong performance driven primarily by its Display Technologies segment, which saw significant revenue growth. The Telecommunications segment also contributed positively with increased sales, while Environmental Technologies and Life Sciences segments showed more modest growth or faced challenges. The company made substantial investments in expanding manufacturing capacity, particularly for LCD glass substrates, anticipating continued demand. Financially, Corning demonstrated a strengthening balance sheet with positive cash flows from operations and reduced long-term debt. The adoption of new accounting standards, specifically for share-based compensation (SFAS 123(R)), impacted reported expenses but did not alter the company's underlying financial health. Investors should note the company's heavy reliance on key customers in its major segments and the associated risks, as well as its ongoing efforts to manage intellectual property and navigate complex legal and environmental matters.
Feb 27, 2007
2005-A
Corning Annual Report (Amendment), Year Ended Dec 31, 2005
Corning's amended 2005 Form 10-K/A (filed May 9, 2006) is primarily a restatement filing. Management concluded the company had to restate 2003–2005 results to correct errors in accounting for the PCC asbestos settlement liability (fair value vs. book value treatment of components settled via PCE equity and insurance assignments), the suspension of equity earnings from Pittsburgh Corning Europe, and the classification of accretion on the cash portion of the settlement. Restated 2005 net income is unchanged at $585 million ($0.38 diluted EPS), but the restatement shifted $21 million into asbestos settlement expense, reduced operating income to $592 million, and increased equity earnings to $611 million. The restatement also increased accumulated deficit by $123 million and other accrued liabilities by $154 million as of year-end 2005. Management and PwC concluded that Corning had material weaknesses in internal control over financial reporting as of December 31, 2005, meaning the company's previously reported effective controls assessment was withdrawn. Underlying operations were strong in 2005. Net sales rose 19% to $4.579 billion, driven by Display Technologies (LCD glass volumes up about 64%) and gross margin expanded to 43% from 37%. The company returned to profitability after a $2.2 billion loss in 2004 that was driven largely by a $1.42 billion Telecommunications goodwill impairment. Results were helped by a $525 million valuation allowance increase on U.S. deferred tax assets, which pushed the effective tax rate to 103%. The balance sheet improved meaningfully: cash and short-term investments reached $2.4 billion, total debt fell by roughly $885 million, and all three rating agencies upgraded the company to investment grade (BBB-/Baa3). Management expects 2006 capital spending of $1.3 to $1.5 billion, mostly for LCD glass capacity, and anticipates sharper LCD price declines in 2006. For investors, the key issues are the quality of earnings and governance. Equity earnings from Samsung Corning Precision and Dow Corning contributed $611 million, a large share of the total. The restatement, material weaknesses, PwC's disclosed non-audit services in Europe and China (raising independence questions), pending PCC bankruptcy approval, and concentrated customer and LCD exposure are all material risks that could affect future results.
May 9, 2006
2005
Corning Annual Report, Year Ended Dec 31, 2005
Corning's 2005 Form 10-K shows a company in recovery and transition. Net sales rose 19% to $4.579 billion, driven by a surge in demand for LCD glass substrates in the Display Technologies segment (now 38% of sales). Gross margin improved to 43% from 37%, and the company swung to net income of $585 million ($0.38 diluted EPS) from a $2.165 billion loss in 2004, which had been dominated by a $1.42 billion Telecommunications goodwill impairment. Results were also helped by $598 million of equity earnings, mainly from Samsung Corning Precision and Dow Corning. Management reduced net debt by $885 million, and all three rating agencies upgraded Corning to investment grade, though the ratings are still at the lowest investment-grade notches (BBB-/Baa3). The key risks are concentration and cost. Five customers make up 75% of Display segment sales, and the company is spending heavily on capacity, with 2006 capital spending guided to $1.3-1.5 billion. Management expects significantly steeper LCD price declines in 2006 as competitors add capacity. The Telecommunications segment faces ongoing pricing pressure from overcapacity, and Corning is operating a mothballed Concord fiber plant. Income was also boosted by a $525 million valuation allowance that flows through the tax line, which left the 2005 effective tax rate at 101%. The company has resumed no dividend (discontinued in 2001), and the PCC asbestos settlement remains tentative, with a continuing mark-to-market charge tied to 25 million Corning shares.
Feb 24, 2006
2004
Corning Annual Report, Year Ended Dec 31, 2004
Corning Incorporated's 2004 Form 10-K shows a company in transition: a deep net loss of $2,165 million (basic and diluted EPS of -$1.56) driven mainly by a $1,420 million goodwill impairment in the Telecommunications segment, $350 million in fixed-asset impairments (largely the abandoned Concord, NC optical fiber construction), and a $937 million valuation allowance that raised the tax provision to $1,031 million. Excluding these non-recurring items, management characterizes 2004 as not indicative of 2005 profitability. Net sales rose 25% to $3,854 million, led by Display Technologies (+87% to $1,113 million), which benefited from LCD glass volume growth of roughly 65%. Equity earnings from Samsung Corning Precision and Dow Corning rose to $443 million, underscoring how much of Corning's earnings now come from non-controlled affiliates. The balance sheet and liquidity picture improved. Cash and short-term investments reached $1.9 billion, up $615 million, helped by $400 million of new senior notes and $204 million of customer deposits from a Taiwanese LCD customer, with $171 million more expected in 2005. Total debt to capital was 41% against a 60% covenant. The company retired $487 million of convertible debentures, though a $2 billion revolving credit facility expires in August 2005 and management is negotiating a replacement of up to $1 billion. Capital spending jumped to $857 million and is guided to $1.2-1.4 billion in 2005, mostly for LCD capacity. Significant risks remain. Telecommunications pricing is depressed, with management expecting the Verizon fiber-to-the-premises build-out to drive the segment. Asbestos exposure tied to Pittsburgh Corning requires contributing 25 million Corning shares plus $144 million in cash, with the bankruptcy plan still pending confirmation. Customer concentration is high, with six LCD customers accounting for 76% of Display sales. Credit ratings sit at BB+/Ba2, below investment grade. Management expects a 2005 loss in Telecommunications, though smaller than in 2004, and continued return to profitability overall.
Feb 22, 2005
2003
Corning Annual Report, Year Ended Dec 31, 2003
Corning Inc.'s 2003 Form 10-K shows a company in the late stages of a severe telecom-driven downturn, with 2003 marking a turn toward stabilization. Net sales were $3.09 billion, down 2% from $3.16 billion in 2002, but gross margin rose to 27% from 19%, and the net loss narrowed to $223 million ($0.18 per share) from $1.3 billion in 2002. The improvement came mainly from far lower restructuring, impairment and other charges ($111 million versus $2.08 billion in 2002), partly offset by a new $413 million asbestos settlement charge tied to the Pittsburgh Corning (PCC) bankruptcy plan. Management says Telecommunications sales have stabilized, and Technologies is the growth engine, with display (LCD glass) sales up 47% to $595 million. The balance sheet improved meaningfully. Management cut debt from about $4.2 billion to $2.8 billion through $630 million of equity offerings and cash-funded repurchases of zero-coupon convertible debentures, lowering the debt-to-capital ratio from 47% to 34%. Cash and short-term investments were $1.3 billion at year-end, and a $2 billion revolver remains undrawn. Operating cash flow was weak at $133 million, and 2003 earnings did not cover fixed charges. Credit ratings remain sub-investment grade (S&P BB+, Moody's Ba2, Fitch BB), which keeps Corning out of the commercial paper market. Key risks for investors include a potential valuation allowance against the $1.3 billion of net domestic deferred tax assets if U.S. profitability does not return by 2005, a possible goodwill impairment (the Telecommunications unit carries $1.6 billion of goodwill), asbestos settlement costs that move with Corning's share price, a $425-475 million 2004 LCD capex program, and a Chinese anti-dumping investigation into U.S. fiber exports. Management guides to a 2004 telecom sales decline of flat to slightly down with a loss, and to a 2005 telecom recovery.
Mar 1, 2004
2002
Corning Annual Report, Year Ended Dec 31, 2002
Corning's 2002 10-K shows a company in severe downturn, driven by the collapse in telecommunications capital spending. Net sales fell 48% to $3.16 billion from $6.05 billion, and gross margin compressed from 30% to 19%. The company reported a net loss of $1.30 billion (loss per share of $1.39), including $2.08 billion in restructuring, impairment, and other charges, of which $400 million was a goodwill impairment in the Telecommunications segment. The Telecommunications segment sales fell 63%, while the Technologies segment (display glass, environmental substrates, life sciences) was comparatively resilient, declining only 4%. Balance sheet and liquidity remain the central investor concern. Management reports $2.1 billion in cash and short-term investments and an undrawn $2.0 billion revolver, and states that it has sufficient liquidity for 2003. However, all three major rating agencies have cut Corning to sub-investment grade (S&P BB+, Moody's Ba2, Fitch BB, all with negative outlooks), which removes access to the commercial paper market. The debt-to-capital ratio stood at 47% against a 60% covenant. Management also expects earnings to be insufficient to cover fixed charges in 2003, and it guides to flat 2003 sales with a goal of returning to profitability before one-time charges. Legal exposure is significant but largely unquantified. The most material item is asbestos litigation tied to Pittsburgh Corning, where management estimates a possible after-tax settlement charge of $125 million to $175 million, while noting that it currently appears more likely than not that Corning will litigate. Other contingencies include the Dow Corning bankruptcy (with a $270 million unrecognized equity difference), the Schwinger/Stevens toxic-tort suits, and securities class actions. Management characterizes most of these as remote or without material impact, but investors should weigh these contingencies against the company's depressed earnings base.
Feb 20, 2003
2001-A
Corning Annual Report (Amendment), Year Ended Dec 31, 2001
Corning's 10-K/A for fiscal 2001 shows a company in severe downturn. Net sales fell 12% to $6.27 billion, and the company posted a net loss of $5.50 billion ($5.89 per share), driven mainly by a $4.76 billion second-quarter impairment of goodwill and intangibles tied to the Pirelli and NetOptix acquisitions, plus $961 million in restructuring and impairment charges and $333 million in inventory write-downs. Pro forma net income, a non-GAAP measure Corning defines, fell 85% to $157 million, or $0.17 per share. Management expects 2002 sales to be significantly below 2001 and continued losses in the short term, with no recovery until late 2002 or early 2003. The balance sheet and liquidity picture is mixed. Corning ended 2001 with $2.2 billion in cash and short-term investments and an unused $2.0 billion revolving credit facility, and management says it has ample liquidity for 2002. Shareholders' equity dropped from $10.6 billion to $5.4 billion, and long-term debt rose to 45% of total capital. Dividends were discontinued in July 2001. Credit ratings were cut during the year (S&P BBB, Moody's Baa1, Fitch BBB- after a February 2002 downgrade), all with negative outlooks, which could raise borrowing costs and restrict commercial paper access. Capital spending was cut from a planned $2.5 billion to $1.8 billion, with 2002 capex budgeted under $500 million. The amendment itself is narrow. It corrects the reported 2001 sales of the photonic technologies business to $509 million from the $462 million stated in the original 10-K filed March 4, 2002, and makes no change to the financial statements. Investors should also weigh material contingent liabilities: the Dow Corning bankruptcy, the Pittsburgh Corning asbestos bankruptcy (about 14,000 other asbestos cases), several patent suits, and securities class actions filed in late 2001 and early 2002.
Mar 7, 2002
2001
Corning Annual Report, Year Ended Dec 31, 2001
Corning's 2001 10-K shows a sharp downturn. Net sales fell 12% to $6.27 billion from $7.13 billion, and the company posted a net loss of $5.5 billion ($5.89 per share), driven mainly by a $4.76 billion second-quarter impairment of goodwill and intangibles tied to the Pirelli and NetOptix acquisitions in the photonic technologies business. Restructuring and impairment charges totaled $961 million, inventory write-downs were $333 million, and the company is eliminating about 12,000 positions and closing seven major plants. Pro forma net income (a non-GAAP measure that excludes these items) fell 85% to $157 million, or $0.17 per share. Management expects 2002 sales to be significantly below 2001 levels, with losses continuing in the short term and no recovery in telecom demand until late 2002 or early 2003. Liquidity looks adequate, with $2.2 billion in cash and short-term investments and an undrawn $2.0 billion revolver, but the balance sheet weakened considerably: long-term debt rose to 45% of total capital from 27%, shareholders' equity fell to $5.4 billion from $10.6 billion, and the common dividend was discontinued in July 2001. Credit ratings were cut across all three agencies (Fitch to BBB- in February 2002, S&P to BBB, Moody's to Baa1), all with negative outlooks, and Corning's earnings did not cover fixed charges in 2001. The filing also details significant contingent exposures, including the Dow Corning bankruptcy and breast implant litigation, the Pittsburgh Corning asbestos bankruptcy (over 240,000 open claims), a securities class action tied to the 2000 convertible debenture offering, and patent suits from Shin Etsu and Hereaus. Management says it believes the claims lack merit, but the outcomes are uncertain. Investors should weigh the depressed earnings outlook and credit pressure against the company's liquidity position and the cost savings expected from restructuring (roughly $400 million annually starting in 2002).
Mar 4, 2002
1999-A2
Corning Annual Report (Amendment), Year Ended Dec 31, 1999
This Form 10-K/A (Amendment No. 2) for fiscal 1999 from Corning Incorporated (NYSE: GLW) was filed to expand disclosure on the Dow Corning breast implant litigation, which remains the most significant contingent overhang. Dow Corning, a 50/50 joint venture with Dow Chemical, is in Chapter 11, and a Joint Plan confirmed in November 1999 could require up to ~$3.2 billion (nominal, over 16 years) in funding. The December 1999 bankruptcy court opinion limited shareholder (Corning and Dow Chemical) releases to tort claimants who voted for the plan, and appeals are set for District Court argument on April 12, 2000. Corning carries Dow Corning at zero after a 1995 $365.5 million write-off, so any resolution is a contingent upside or downside rather than a balance sheet item, and management views implant-suit exposure against Corning as remote. Operationally, 1999 was a strong year. Net sales rose 24% to $4.7 billion, diluted EPS from continuing operations increased 37% to $1.95 (or $1.92 excluding non-recurring items), and the Telecommunications segment grew 38% on premium LEAF fiber and photonics demand. The company is in a major growth-investment phase: the Oak Industries pooling merger closed January 28, 2000, the Siemens optical fiber business was acquired for $1.4 billion, and the pending NetOptix acquisition (~$2 billion in stock) was announced. Capex is projected at about $1.2 billion for 2000. To fund this, Corning raised roughly $2.2 billion in an equity offering and about $485 million in euro-denominated securities in early 2000, which significantly strengthens liquidity but dilutes existing holders. Key risks for investors include execution on large integrations and capacity expansions, the cyclicality of optical fiber pricing (prices fell 10% to 20% in 1999 even as volumes tripled), dependence on a limited number of optical component suppliers, Asian and foreign currency exposure (about 22% of income from continuing operations came from equity affiliates, 96% of which are foreign-based), and the unresolved Dow Corning proceedings. Note that this amendment restates no financial statements; it supplements the litigation disclosure in the original 10-K.
Apr 7, 2000
1999-A
Corning Annual Report (Amendment), Year Ended Dec 31, 1999
Corning Incorporated's amended FY1999 Form 10-K/A (filed March 8, 2000) presents results restated to include Oak Industries, which was merged in a pooling of interests on January 28, 2000. On a restated basis, 1999 net sales rose 24% to $4.74 billion, income from continuing operations increased 44% to $511.0 million, and diluted EPS from continuing operations rose 37% to $1.95. Excluding non-recurring items, diluted EPS was $1.92, up 26%. All three segments grew, led by Telecommunications, where sales increased 38% to roughly $3.0 billion on premium fiber (LEAF) demand, although its segment net income rose only 24% because of heavier R&D and lower-margin volume. The filing is dominated by a strategic build-out and financing program for 2000. In February 2000 Corning completed the roughly $1.4 billion Siemens optical fiber and cable acquisition, and it signed a definitive agreement to acquire NetOptix for about $2.0 billion in stock, expected to close in Q2 2000. To fund these, Corning raised about $2.2 billion in an equity offering on January 31, 2000, plus about $485 million in euro-denominated debt. Management expects 2000 capital expenditures of about $1.2 billion and anticipates further growth in sales and earnings. Balance sheet leverage rose, with long-term debt at 35% of total capital at year-end 1999, though the equity raise substantially changes the capital structure going forward. The main risk overhang is the Dow Corning breast-implant bankruptcy. The Joint Plan could require Dow Corning to fund up to about $3.2 billion over 16 years, and Corning and Dow Chemical each face up to $150 million in credit facilities. The bankruptcy court limited shareholder releases to claimants who voted for the plan, and appeals are set for argument on April 12, 2000. Corning also carries Superfund and other environmental exposures (about $20 million accrued), a Quest Diagnostics indemnity, and a Shin Etsu patent suit in Japan. Management characterizes most litigation exposure as remote, but the Dow Corning outcome remains uncertain.
Mar 8, 2000
1998
Corning Annual Report, Year Ended Dec 31, 1998
Corning's 1998 10-K shows a year of sharp earnings pressure driven by the Asian economic slowdown and pricing declines, especially in optical fiber. Net sales were $3.48 billion, roughly flat versus 1997's $3.52 billion, while income from continuing operations fell to $327.5 million, or $1.39 diluted EPS, from $408.9 million, or $1.72. Excluding an $84.6 million restructuring charge and $39.7 million in non-operating gains, EPS from continuing operations was $1.50, a 13% decline. Reported net income was $394.0 million, including a $66.5 million gain-driven contribution from the sale of the consumer housewares business. Management guided to a return to earnings growth in 1999, with Telecommunications sales expected to rise significantly. The Telecommunications segment, which Corning's growth story rests on, was the weak point: segment net income dropped to $205.3 million from $297.5 million as fiber prices fell on global overcapacity. Advanced Materials and Information Display were more stable, with Information Display improving to $56.5 million in segment net income, helped by equity earnings from Samsung Corning. Cash from operations was $637.6 million against capital spending of $713.6 million, and working capital was modestly lower at $235.6 million. Long-term debt was 31% of total capital, down from 36%. The main investor overhang is the Dow Corning breast-implant bankruptcy. Corning's 50% stake is fully reserved, and the proposed Joint Plan could require Dow Corning to fund up to about $3.2 billion over 16 years, with Corning sharing a $150 million credit commitment. Confirmation hearings are scheduled for June 1999, and the outcome is uncertain. Separately, the February 1999 redemption of the MIPS preferred securities is expected to convert most holders into common stock, which would add shares and dilute per-share figures.
Feb 24, 1999
1997-A
Corning Annual Report (Amendment), Year Ended Dec 31, 1997
This is Amendment No. 1 (Form 10-K/A) to Corning Incorporated's annual report for fiscal 1997, filed July 1998. It does not restate the full annual report; it substitutes Item 14 and Exhibit 27 to reflect the April 1, 1998 recapitalization and sale of a controlling interest in the consumer housewares business, which is now presented as a discontinued operation. Reported 1997 results: net sales of $3,516.8 million (revenues $3,554.3 million including royalty and other income), up about 16% from $3,024.0 million in 1996. Income from continuing operations was $408.9 million, or $1.72 diluted EPS, versus $1.40 in 1996, and net income was $439.8 million ($1.85 diluted EPS) after $30.9 million of discontinued operations income. Growth was driven by the Communications segment (revenues $2,465.9 million, pre-tax income $684.3 million), while Specialty Materials grew more modestly. The balance sheet grew considerably, with total assets of $4,691.9 million (from $4,183.4 million) largely due to plant and equipment rising to $2,267.9 million from heavy capital spending of $745.6 million. Total debt rose: short-term loans payable reached $213.0 million and long-term loans were $1,125.8 million. Stockholders' equity rose to $1,246.5 million from $961.1 million, helped by the 1997 earnings. Operating cash flow from continuing operations was $654.1 million, which covered capex but left a funding gap that was bridged with borrowings. Key risk items for investors include the Dow Corning equity investment, which Corning has fully reserved since 1995 and continues to carry at zero while Dow Corning remains in Chapter 11 over breast implant litigation, and the uncertain resolution of that proceeding. Corning's accounting for the 1998 housewares sale also means prior-period comparisons are restated on a continuing-operations basis.
Jul 8, 1998
1997
Corning Annual Report, Year Ended Dec 31, 1997
Corning Incorporated's 1997 Form 10-K shows a strong year driven by the Communications segment, particularly optical fiber and cable. Consolidated net sales rose about 12% to $4.09 billion (total revenues $4.13 billion), and income from continuing operations reached $439.8 million, or $1.85 per diluted share, up roughly 28% on a continuing-operations basis from 1996. Communications sales grew to $2.47 billion, with pre-tax income of $684.3 million, while Specialty Materials and Consumer Products made smaller contributions. Management is also investing heavily: 1997 capital spending was $774.8 million and about $750 million is planned for 1998, including new optical fiber capacity in Concord, North Carolina and high-purity fused silica capacity in South Carolina. The balance sheet is more leveraged after the 1996 spin-off of Quest Diagnostics and Covance. Working capital fell to $406.9 million, the current ratio dropped to 1.4 from 1.8, and total loans payable rose to about $1.35 billion. Management guided to a more modest growth rate for 1998, citing volatility in Asian markets, which it expects to pressure pricing in optical fiber and Samsung-Corning earnings. The most significant risk for investors is the Dow Corning breast implant litigation. Corning owns 50% of Dow Corning, which has been in Chapter 11 since 1995. Corning fully reserved its investment in 1995 and recognizes no equity earnings from it. Dow Corning's Second Amended Plan of Reorganization was filed February 17, 1998, but its outcome, and any impact on Corning, remains uncertain. Corning also faces a federal securities class action tied to the implant issue and has accrued about $20 million for environmental matters.
Mar 10, 1998
1996
Corning Annual Report, Year Ended Dec 31, 1996
Corning Incorporated's 1996 10-K reflects a company in the midst of a strategic repositioning. On December 31, 1996, Corning distributed its health care services businesses (Quest Diagnostics and Covance) to shareholders, reporting them as discontinued operations. The core business performed strongly: consolidated net sales from continuing operations rose 12% to $3.7 billion, and income from continuing operations was $342.9 million, or $1.50 per share, versus a loss of $71.5 million in 1995 that was driven by the Dow Corning write-off and a restructuring charge. Excluding those 1995 items, continuing earnings per share grew about 16%. The Communications segment, led by optical fiber, was the primary growth engine, with sales of $1.97 billion, up 15%. The balance sheet changed materially. Stockholders' equity fell to $961 million from $2.1 billion after the Distributions, and long-term debt rose to 42% of total capital from 33%. Net income was $175.6 million after a $167.3 million loss from discontinued operations, which included a $176.5 million provision for loss on the Distributions tied largely to government billing claims at Quest Diagnostics. Management plans roughly $600 million of capital spending in 1997, concentrated on optical-fiber capacity expansions in North Carolina, and expects to reduce the debt-to-capital ratio over the year. The main risk overhang is the Dow Corning breast-implant litigation. Dow Corning remains in Chapter 11, and Corning's investment in it is fully reserved. Corning also faces ongoing tort suits, with dismissals to date in over 6,500 cases, and several shareholder class actions. Corning is not a party to the Global Settlement and says the outcome of the Dow Corning bankruptcy is impossible to predict. Investors should weigh strong operating momentum in optical fiber against a more leveraged balance sheet and the unresolved litigation exposure.
Mar 12, 1997
1995
Corning Annual Report, Year Ended Dec 31, 1995
Corning Incorporated's 1995 10-K shows a company whose headline results were dominated by a single non-recurring-type charge: the full write-off of its 50% stake in Dow Corning. After Dow Corning filed for Chapter 11 on May 15, 1995 over breast-implant litigation, Corning recorded an after-tax charge of $365.5 million in Q2 1995 and stopped recognizing equity earnings from the venture. The result was a 1995 net loss of $50.8 million, or $0.23 per share, versus net income of $281.3 million ($1.32 per share) in 1994. Excluding Dow Corning and restructuring/special charges, net income was roughly flat at $337.7 million and EPS was $1.49, down about 6% on an adjusted basis. Revenue grew 11% to $5.3 billion, and the growth was driven by the Communications segment (optical fiber, video components) and pharmaceutical services. Operating performance was mixed. Communications was the clear standout, with sales of $1.71 billion and pre-tax income of $434.9 million, and management says optical-fiber capacity is at maximum, with a roughly $250 million expansion in Wilmington, North Carolina underway. Health Care Services (clinical labs) grew sales to $2.06 billion but its pre-tax income fell to $106.3 million, hurt by a $62 million charge for uncollectible receivables and pricing pressure. Consumer Products declined in sales and profit. Balance-sheet liquidity remained adequate, with working capital of $669.2 million, a current ratio of 1.6, and $788 million in bank credit lines, though long-term debt to total capital rose to 34%. For investors, the key issues are the remaining breast-implant exposure (about 11,400 tort suits named against Corning, with some dismissals), the Department of Justice and Inspector General investigations into clinical-lab billing practices, and the capital-intensive growth plan (about $700 million of capex expected in 1996). The Dow Corning reserve means any future recovery would be a benefit, but the filing gives no timeline for emergence from bankruptcy.
Mar 7, 1996
1995
Corning Annual Report, Year Ended Jan 1, 1995
Corning Incorporated's 1994 fiscal year was a strong rebound year on the top line and in core earnings, though reported results remain distorted by special charges and the Dow Corning breast-implant overhang. Consolidated sales rose 19% to $4.8 billion, with roughly half the increase coming from acquisitions. Reported net income was $281.3 million, or $1.32 per share, versus net losses in 1993 and 1992. Management says earnings excluding special charges rose 31% in net income and 19% in EPS, and that the 1994 results include an $82.3 million restructuring and special charge tied to the Nichols, Maryland Medical and Bioran acquisitions. The Communications segment (optical fiber and cable, video components) and Specialty Materials drove most of the operating improvement, while Laboratory Services grew sales sharply but faced pricing pressure from managed care and Medicare reimbursement cuts. The main investor risk is the breast-implant litigation at Dow Corning, a 50%-owned equity affiliate. Dow Corning took after-tax charges of $75.9 million in 1994 and $203.1 million in 1993 that reduced Corning's equity earnings, and it recorded a further $151.8 million after-tax charge in Q4 1994. Corning says it is not a party to the $4.2 billion settlement and does not expect a material effect on overall financial condition, but it acknowledges that a future charge could materially hurt quarterly earnings. Corning also faces environmental liabilities (about $30 million accrued across 22 Superfund-related sites), Justice Department and Inspector General probes into MetPath and Damon laboratory billing, and shareholder suits. Balance sheet and liquidity improved. The ratio of long-term debt to total capital fell to 33% from 45%, working capital rose to $652.1 million, and $1.2 billion in bank credit lines were available. Financing came from a February 1994 common stock offering and a $364.4 million 6% convertible monthly income preferred securities offering that retired the Damon acquisition debt. Management expects 1995 capital spending of about $575 million and continued growth in most segments, with the Laboratory Services and Communications outlooks both positive. The dividend was raised to $0.18 per quarter.
Mar 20, 1995
1994
Corning Annual Report, Year Ended Jan 2, 1994
Corning Inc.'s 10-K for fiscal 1993 (year ended January 2, 1994) shows a company in transition: sales rose 8% to $4,004.8 million, but the company posted a net loss of $15.2 million ($0.09 per share) because of $202.8 million in pre-tax non-recurring charges, a $203.1 million equity charge tied to Dow Corning's breast-implant liability, and a $9.5 million Vitro Corning restructuring charge. Excluding special items, earnings from consolidated operations declined about 4%, pressured by weak Consumer Products results, cyclical Specialty Materials businesses in Europe, and higher interest expense from the Damon acquisition. The balance sheet grew substantially through acquisitions. Total assets rose to $5,231.7 million from $4,286.3 million, driven by roughly $405 million for Damon Corporation, $552 million of goodwill from that deal, and Costar via pooling. Long-term debt rose to $1,585.6 million, and the ratio of long-term debt to total capital climbed to 45% from 28%. Management plans to retire a significant portion of the remaining acquisition debt with a 1994 equity offering, and it completed an 8 million share offering in February 1994 for about $233 million. The dominant investor risk is the breast-implant litigation involving Dow Corning, a 50%-owned equity affiliate. Dow Corning took a $640 million pre-tax charge, and Corning's share flows through equity earnings, with potential further charges that could materially affect quarterly earnings. Corning also faces securities class actions, derivative suits, and a MetPath Medicare billing settlement of $39.8 million. Corning management says none of these is expected to have a material adverse effect on financial condition, though some outcomes could hit earnings in a specific quarter.
Mar 18, 1994