What is an Accelerated Share Repurchase (ASR) and why is Corning using it?

An Accelerated Share Repurchase (ASR) is a transaction where a company buys back its own stock directly from an investment bank (like Morgan Stanley in this case) rather than through open market purchases. Corning is using this ASR to efficiently execute a significant portion of its previously authorized $4 billion share repurchase program, demonstrating a commitment to returning capital to shareholders and potentially signaling confidence in the company's valuation.

How many shares will Corning ultimately repurchase?

The exact number of shares Corning will ultimately repurchase is not fixed at the time of the filing. It will be determined by the average daily volume-weighted average price (VWAP) of Corning's common stock during the specified repurchase periods for each tranche, less a discount. The total number of shares can be subject to further adjustments at the final settlement based on the terms of the ASR agreement.

When will the share repurchases be completed?

Corning made an initial payment and received shares on July 28, 2016. However, the final settlement of both tranches of the accelerated share repurchase transaction is expected to occur in the fourth quarter of 2016. This means the full completion of the buyback, with the final share count determined, will happen during that period.

What is the total value of the share repurchase announced today?

The total value of the accelerated share repurchase transaction announced today is $2 billion. This amount is part of Corning's larger $4 billion share repurchase program authorized by its Board of Directors.

GLW 8-K: Material Agreements

Summary

Corning Incorporated (GLW) announced a significant acceleration of its share repurchase program through an accelerated share repurchase (ASR) transaction with Morgan Stanley & Co. LLC. This $2 billion ASR, executed in two tranches, represents a substantial commitment to returning capital to shareholders. The company made an aggregate payment of $2 billion on July 28, 2016, and immediately received an initial delivery of approximately 74.5 million shares. This move underscores Corning's confidence in its financial position and its stock's value. Investors should note that the final number of shares repurchased will be determined by the average daily volume-weighted average price of Corning's common stock during the repurchase periods, less a discount, with potential adjustments at settlement. The final settlement for both tranches is anticipated in the fourth quarter of 2016.

Key Highlights

1Corning entered into a $2 billion accelerated share repurchase (ASR) transaction with Morgan Stanley.
2The ASR is part of the company's previously announced $4 billion share repurchase program.
3Corning paid $2 billion on July 28, 2016, and received an initial delivery of approximately 74.5 million shares.
4The ASR is structured in two tranches, with $1.5 billion in the first and $500 million in the second.
5The final number of shares repurchased will be based on the average VWAP during the repurchase period, subject to discounts and adjustments.
6Final settlement for both tranches is expected in the fourth quarter of 2016.
7The terms of the ASR are subject to adjustments based on specific corporate actions or announced transactions by Corning.

CORNING INC /NY 8-K Report, Material Agreement (Jul 28, 2016)

Summary

Key Highlights

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