CORNING INC /NY - FORM 8-K - EX-99 - BENEFIT PENSION PLAN PRESS RELEASE - April 5, 2013

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Exhibit 99


FOR RELEASE –– April 5, 2013

Corning Announces Change in Pension Accounting

CORNING, N.Y. — Corning Incorporated (NYSE: GLW) announced today an accounting change relating to expense recognition for company-sponsored pension plans.  The new method, adopted in the first quarter of 2013, will result in simpler, more transparent financial reporting.  Today’s announcement is an accounting change only and does not affect benefits for plan participants, Corning’s funding obligations, or the company’s cash flow.

This improved methodology records most of the actuarial gains and losses in the income statement in the year incurred, rather than amortizing them over time.  The difference between actual and expected returns on assets, as well as other actuarial gains and losses that together fall outside a recognition corridor (10% of the greater of plan assets or benefit obligations) will be recognized in the fourth quarter of each year.  Actuarial gains or losses result from changes in discount rates and other actuarial assumptions.

“We believe this accounting change will provide greater transparency that will allow investors to more clearly evaluate the company’s operating performance by recognizing actuarial gains and losses outside of the corridor in its operating results in the year in which the gains and losses occur, rather than amortizing them over future periods,” said James B. Flaws, Vice Chairman and Chief Financial Officer.  “Importantly, this accounting change has no impact on benefits received by participants of our pension plans or on pension plan funding obligations or decisions.”

These changes have been applied retrospectively.  Financial results from prior periods have been revised to include the impact as if the changes had been in place during those periods.  As a result of the retrospective application of this change, Corning’s diluted earnings per share for the years ended December 31, 2012, 2011, and 2010 decreased from $1.15 to $1.09, increased from $1.77 to $1.78, and increased from $2.25 to $2.26, respectively.  Excluding the fourth-quarter mark-to-market adjustment and other special items previously disclosed, diluted earnings per share from continuing operations for 2012, 2011, and 2010 would have increased from $1.29 to $1.38, from $1.76 to $1.79, and from $2.07 to $2.08, respectively.  Reconciliations between reported company earnings and revised company earnings, and GAAP and non-GAAP measures for the years 2012, 2011, and 2010 are attached to provide year-over-year comparability for future periods.

Presentation of Information in this News Release
Non-GAAP financial measures are not in accordance with, or an alternative to, GAAP.  Corning’s non-GAAP net income and EPS measures exclude restructuring, impairment and other charges and adjustments to prior estimates for such charges.  Additionally, the company’s non-GAAP measures exclude adjustments to asbestos settlement reserves, gains and losses arising from debt retirements, charges or credits arising from adjustments to the valuation allowance against deferred tax assets, equity method charges resulting from impairments of equity method investments or restructuring, impairment or other charges taken by equity method companies, mark-to-market effects of pension gains and losses, and gains from discontinued operations.  The company believes presenting non-GAAP net income and EPS measures is helpful to analyze financial performance without the impact of items that may obscure trends in the company’s underlying performance.  Reconciliation of these non-GAAP measures can be found on the company’s website by going to www.corning.com/investor relations and clicking Financial Reports on the left. Reconciliation also accompanies this news release.

 
 
 



Forward-Looking and Cautionary Statements
This press release contains “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995), which are based on current expectations and assumptions about Corning’s financial results and business operations, that involve substantial risks and uncertainties that could cause actual results to differ materially.  These risks and uncertainties include: the effect of global political, economic and business conditions; conditions in the financial and credit markets; currency fluctuations; tax rates; product demand and industry capacity; competition; reliance on a concentrated customer base; manufacturing efficiencies; cost reductions; availability of critical components and materials; new product commercialization; pricing fluctuations and changes in the mix of sales between premium and non-premium products; new plant start-up or restructuring costs; possible disruption in commercial activities due to terrorist activity, armed conflict, political or financial instability, natural disasters, adverse weather conditions, or major health concerns; adequacy of insurance; equity company activities; acquisition and divestiture activities; the level of excess or obsolete inventory; the rate of technology change; the ability to enforce patents; product and components performance issues; retention of key personnel; stock price fluctuations; and adverse litigation or regulatory developments.  These and other risk factors are detailed in Corning’s filings with the Securities and Exchange Commission.  Forward-looking statements speak only as of the day that they are made, and Corning undertakes no obligation to update them in light of new information or future events.

About Corning Incorporated
Corning Incorporated (www.corning.com) is the world leader in specialty glass and ceramics.  Drawing on more than 160 years of materials science and process engineering knowledge, Corning creates and makes keystone components that enable high-technology systems for consumer electronics, mobile emissions control, telecommunications and life sciences.  Our products include glass substrates for LCD televisions, computer monitors and laptops; ceramic substrates and filters for mobile emission control systems; optical fiber, cable, hardware and equipment for telecommunications networks; optical biosensors for drug discovery; and other advanced optics and specialty glass solutions for a number of industries including semiconductor, aerospace, defense, astronomy, and metrology.



Media Relations Contact:
Daniel F. Collins
(607) 974-4197
collinsdf@corning.com
 
Investor Relations Contact:
Ann H. S. Nicholson
(607) 974-6716
nicholsoas@corning.com


###


 
 
 


CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; in millions, except per share amounts)


 
Year ended December 31, 2012
(In millions, except per share amounts)
As
Previously
Reported
(Before
Accounting
Change)
  
Effect of
Accounting
Change
  
As
Adjusted
(After
Accounting
Change)
                     
Net sales
$
8,012 
          
$
8,012 
  
Cost of sales
  
4,615 
  
$
78 
(1)
    
4,693 
(1)
                     
Gross margin
  
3,397 
    
(78)
      
3,319 
  
                     
Operating expenses:
                    
Selling, general and administrative expenses
  
1,165 
    
40 
(1)
    
1,205 
(1)
Research, development and engineering expenses
  
745 
    
24 
(1)
    
769 
(1)
Amortization of purchased intangibles
  
19 
            
19 
  
Restructuring, impairment and other charges
  
133 
            
133 
  
Asbestos litigation charge
  
14 
            
14 
  
                     
Operating income
  
1,321 
    
(142)
      
1,179 
  
                     
Equity in earnings of affiliated companies
  
810 
            
810 
  
Interest income
  
14 
            
14 
  
Interest expense
  
(111)
            
(111)
  
Other income, net
  
83 
            
83 
  
                     
Income before income taxes
  
2,117 
    
(142)
      
1,975 
  
Provision for income taxes
  
(389)
    
50 
      
(339)
  
                     
Net income attributable to Corning Incorporated
$
1,728 
  
$
(92)
    
$
1,636 
  
                     
Earnings per common share attributable to Corning Incorporated:
                    
Basic
$
1.16 
  
$
(0.06)
    
$
1.10 
  
Diluted
$
1.15 
  
$
(0.06)
    
$
1.09 
  
                     
Dividends declared per common share
$
0.32 
          
$
0.32 
  

(1)  
Includes mark-to-market adjustment for pension plans actuarial net losses of $217 million.

 
 
 

 
 
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; in millions, except per share amounts)


 
Year ended December 31, 2011
(In millions, except per share amounts)
As
Previously
Reported
(Before
Accounting
Change)
  
Effect of
Accounting
Change
  
As
Adjusted
(After
Accounting
Change)
                     
Net sales
$
7,890 
          
$
7,890 
  
Cost of sales
  
4,324 
  
$
(10)
 (1)
    
4,314 
(1)
                     
Gross margin
  
3,566 
    
10 
      
3,576 
  
                     
Operating expenses:
                    
Selling, general and administrative expenses
  
1,033 
    
(5)
 (1)
    
1,028 
(1)
Research, development and engineering expenses
  
671 
    
(3)
 (1)
    
668 
(1)
Amortization of purchased intangibles
  
15 
            
15 
  
Restructuring, impairment and other charges
  
129 
            
129 
  
Asbestos litigation charge
  
24 
            
24 
  
                     
Operating income
  
1,694 
    
18 
      
1,712 
  
                     
Equity in earnings of affiliated companies
  
1,471 
            
1,471 
  
Interest income
  
19 
            
19 
  
Interest expense
  
(89)
            
(89)
  
Other income, net
  
118 
            
118 
  
                     
Income before income taxes
  
3,213 
    
18 
      
3,231 
  
Provision for income taxes
  
(408)
    
(6)
      
(414)
  
                     
Net income attributable to Corning Incorporated
$
2,805 
  
$
12 
    
$
2,817 
  
                     
Earnings per common share attributable to Corning Incorporated:
                    
Basic
$
1.80 
          
$
1.80 
  
Diluted
$
1.77 
  
$
0.01 
    
$
1.78 
  
                     
Dividends declared per common share
$
0.23 
          
$
0.23 
  

(1)  
Includes mark-to-market adjustment for pension plans actuarial net losses of $64 million.

 
 
 

CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; in millions, except per share amounts)


 
Year ended December 31, 2010
(In millions, except per share amounts)
As
Previously
Reported
(Before
Accounting
Change)
  
Effect of
Accounting
Change
  
As
Adjusted
(After
Accounting
Change)
                     
Net sales
$
6,632 
          
$
6,632 
  
Cost of sales
  
3,583 
  
$
(13)
 (1)
    
3,570 
(1)
                     
Gross margin
  
3,049 
    
13 
      
3,062 
  
                     
Operating expenses:
                    
Selling, general and administrative expenses
  
1,015 
    
(7)
 (1)
    
1,008 
(1)
Research, development and engineering expenses
  
603 
    
(4)
 (1)
    
599 
(1)
Amortization of purchased intangibles
  
8 
            
8 
  
Restructuring, impairment and other credits
  
(329)
            
(329)
  
Asbestos litigation credit
  
(49)
            
(49)
  
                     
Operating income
  
1,801 
    
24 
      
1,825 
  
                     
Equity in earnings of affiliated companies
  
1,958 
            
1,958 
  
Interest income
  
11 
            
11 
  
Interest expense
  
(109)
            
(109)
  
Other income, net
  
184 
            
184 
  
                     
Income before income taxes
  
3,845 
    
24 
      
3,869 
  
Provision for income taxes
  
(287)
    
(8)
      
(295)
  
                     
Net income attributable to Corning Incorporated
$
3,558 
  
$
16 
    
$
3,574 
  
                     
Earnings per common share attributable to Corning Incorporated:
                    
Basic
$
2.28 
  
$
0.01 
    
$
2.29 
  
Diluted
$
2.25 
  
$
0.01 
    
$
2.26 
  
                     
Dividends declared per common share
$
0.20 
          
$
0.20 
  

(1)  
Includes mark-to-market adjustment for pension plans actuarial net losses of $17 million.

 
 
 

CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited; in millions, except per share amounts)


 
December 31, 2012
 
As
Previously
Reported
(Before
Accounting
Change)
  
Effect of
Accounting
Change
  
As
Adjusted
(After
Accounting
Change)
Assets
                
                 
Current assets:
                
Cash and cash equivalents
$
4,988 
        
$
4,988 
Short-term investments, at fair value
  
1,156 
          
1,156 
Total cash, cash equivalents and short-term investments
  
6,144 
          
6,144 
Trade accounts receivable, net of doubtful accounts and allowances
  
1,302 
          
1,302 
Inventories
  
1,051 
          
1,051 
Deferred income taxes
  
579 
          
579 
Other current assets
  
619 
          
619 
Total current assets
  
9,695 
          
9,695 
                 
Investments
  
4,915 
          
4,915 
Property, net of accumulated depreciation
  
10,625 
          
10,625 
Goodwill and other intangible assets, net
  
1,496 
          
1,496 
Deferred income taxes
  
2,343 
          
2,343 
Other assets
  
301 
          
301 
                 
Total Assets
$
29,375 
        
$
29,375 
                 
Liabilities and Equity
                
                 
Current liabilities:
                
Current portion of long-term debt
$
76 
        
$
76 
Accounts payable
  
779 
          
779 
Other accrued liabilities
  
1,101 
          
1,101 
Total current liabilities
  
1,956 
          
1,956 
                 
Long-term debt
  
3,382 
          
3,382 
Postretirement benefits other than pensions
  
930 
          
930 
Other liabilities
  
1,574 
          
1,574 
Total liabilities
  
7,842 
          
7,842 
                 
Commitments and contingencies
                
Shareholders’ equity:
                
Common stock – Par value $0.50 per share; Shares authorized: 3.8 billion; Shares issued: 1,649 million
  
825 
          
825 
Additional paid-in capital
  
13,146 
          
13,146 
Retained earnings
  
10,588 
    
(656)
    
9,932 
Treasury stock, at cost; Shares held: 179 million
  
(2,773)
          
(2,773)
Accumulated other comprehensive (loss) income
  
(300)
    
656 
    
356 
Total Corning Incorporated shareholders’ equity
  
21,486 
          
21,486 
Noncontrolling interests
  
47 
          
47 
Total equity
  
21,533 
          
21,533 
                 
Total Liabilities and Equity
$
29,375 
        
$
29,375 


 
 
 


CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited; in millions, except per share amounts)


 
December 31, 2011
 
As
Previously
Reported
(Before
Accounting
Change)
  
Effect of
Accounting
Change
  
As
Adjusted
(After
Accounting
Change)
Assets
                
                 
Current assets:
                
Cash and cash equivalents
$
4,661 
        
$
4,661 
Short-term investments, at fair value
  
1,164 
          
1,164 
Total cash, cash equivalents and short-term investments
  
5,825 
          
5,825 
Trade accounts receivable, net of doubtful accounts and allowances
  
1,082 
          
1,082 
Inventories
  
975 
          
975 
Deferred income taxes
  
448 
          
448 
Other current assets
  
347 
          
347 
Total current assets
  
8,677 
          
8,677 
                 
Investments
  
4,726 
          
4,726 
Property, net of accumulated depreciation
  
10,671 
          
10,671 
Goodwill and other intangible assets, net
  
926 
          
926 
Deferred income taxes
  
2,652 
          
2,652 
Other assets
  
196 
          
196 
                 
Total Assets
$
27,848 
        
$
27,848 
                 
Liabilities and Equity
                
                 
Current liabilities:
                
Current portion of long-term debt
$
27 
        
$
27 
Accounts payable
  
977 
          
977 
Other accrued liabilities
  
1,093 
          
1,093 
Total current liabilities
  
2,097 
          
2,097 
                 
Long-term debt
  
2,364 
          
2,364 
Postretirement benefits other than pensions
  
897 
          
897 
Other liabilities
  
1,361 
          
1,361 
Total liabilities
  
6,719 
          
6,719 
                 
Commitments and contingencies
                
Shareholders’ equity:
                
Common stock – Par value $0.50 per share; Shares authorized: 3.8 billion; Shares issued: 1,636 million
  
818 
          
818 
Additional paid-in capital
  
13,041 
          
13,041 
Retained earnings
  
9,332 
    
(565)
    
8,767 
Treasury stock, at cost; Shares held: 121 million
  
(2,024)
          
(2,024)
Accumulated other comprehensive (loss) income
  
(89)
    
565 
    
476 
Total Corning Incorporated shareholders’ equity
  
21,078 
          
21,078 
Noncontrolling interests
  
51 
          
51 
Total equity
  
21,129 
          
21,129 
                 
Total Liabilities and Equity
$
27,848 
        
$
27,848 


 
 
 



CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Years Ended December 31, 2012, 2011 and 2010
 (Unaudited; amounts in millions)


Corning’s net income and earnings per share (EPS) excluding special items for the years ended December 31, 2012, 2011 and 2010 are non-GAAP financial measures within the meaning of Regulation G of the Securities and Exchange Commission.  Non-GAAP financial measures are not in accordance with, or an alternative to, generally accepted accounting principles (GAAP).  The company believes presenting non-GAAP net income and EPS is helpful to analyze financial performance without the impact of unusual items that may obscure trends in the company’s underlying performance.  A detailed reconciliation is provided below outlining the differences between these non-GAAP measures and the directly related GAAP measures.


 
Year ended December 31, 2012
 
Per
Share
  
Income Before Income
Taxes
  
Net
Income
                 
Earnings per share (EPS) and net income, as previously reported
$
1.15 
  
$
2,117 
  
$
1,728 
EPS and net income impact of previously shown special items*
  
0.14 
    
240 
    
212 
EPS and net income impact of pension mark-to-market
  
0.09 
    
217 
    
140 
                 
New EPS and net income, excluding special items
$
1.38 
  
$
2,574 
  
$
2,080 

 
Year ended December 31, 2011
 
Per
Share
  
Income Before Income
Taxes
  
Net
Income
                 
Earnings per share (EPS) and net income, as previously reported
$
1.77 
  
$
3,213 
  
$
2,805 
EPS and net income impact of previously shown special items*
  
(0.01)
    
47 
    
(16)
EPS and net income impact of pension mark-to-market
  
0.03 
    
64 
    
41 
                 
New EPS and net income, excluding special items
$
1.79 
  
$
3,324 
  
$
2,830 

 
Year ended December 31, 2010
 
Per
Share
  
Income Before Income
Taxes
  
Net
Income
                 
Earnings per share (EPS) and net income, as previously reported
$
2.25 
  
$
3,845 
  
$
3,558 
EPS and net income impact of previously shown special items*
  
(0.18)
    
(469)
    
(282)
EPS and net income impact of pension mark-to-market
  
0.01 
    
17 
    
10 
                 
New EPS and net income, excluding special items
$
2.08 
  
$
3,393 
  
$
3,286 

*
No change from previously disclosed amounts.

CORNING INC /NY Reports