Slide 1: First-Quarter 2023 Investor Call
First-Quarter 2023 Investor Call Corning Reports First-Quarter Financial Results April 25, 2023 1
Slide 2: Forward-Looking and Cautionary Statements
Forward-Looking and Cautionary Statements The statements contained in this presentation and related comments by management that are not historical facts or information and contain words such as “will,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “seek,” “see,” “would,” and “target” and simi
Slide 3: Q1 GAAP Earnings: FX Hedge Accounting and Other Charges
Q1 GAAP EARNINGS FX Hedge Accounting and Other Charges • Recorded unrealized, non-cash, after-tax loss of $44M in Q1 2023 on mark-to-market adjustments associated with currency-hedging contracts and foreign debt • Translation hedges reduce our economic exposure to currency fluctuations, providing hi
Slide 4: First Quarter 2023 Core Performance
CEO PERSPECTIVE First Quarter 2023 Core Performance $3.4B Core Sales “We are focused on profitability and cash flow and will continue to 7% Decrease QoQ align our cost structure to demand. At the same time, Corning’s capabilities are vital to our customers’ growth strategies, so we will move forward
Slide 5: Performance Drivers: Optical Communications and Environmental Technologies
PERFORMANCE DRIVERS Optical Communications • Pricing actions partially offset greater-than-normal seasonal volume decline in connectivity solutions, associated with pacing of several large customer projects • Pricing and productivity actions resulted in net income improving sequentially despite lowe
Slide 6: Reflection on Short Term; Best-in-the-World Capabilities
CEO PERSPECTIVE Reflection on Short Term • Seeing improvement in some of our markets • Series of challenges continues to ripple across the global economy • Expect to grow sequentially in second quarter and improve our key financial metrics © 2023 Corning Incorporated 11 FOCUSED AND COHESIVE PORTFOLI
Slide 7: Capabilities Relevant Across Industries
FOCUSED AND COHESIVE PORTFOLIO Capabilities Relevant Across Industries OPTICAL COMMUNICATIONS Leading in the industry for more than 50 years using all 3 core technologies and 4 manufacturing and engineering platforms; fully evolved example of Corning’s focused portfolio DISPLAY Leveraging all 3 core
Slide 8: CEO Summary; CFO First Quarter Results
CEO Summary Continue to focus on operating each of our businesses well and adjusting to meet the needs of the moment Align our cost structure to the demand environment Advance growth initiatives and capabilities that will drive long-term success Remain well positioned to continue capturing the rich
Slide 9: CFO Highlights; Optical Communications Recap
CFO PERSPECTIVE Highlights • Demonstrated operational rigor during the quarter • Continue to make progress on improving our profitability • Align cost structure to successfully weather demand environment • Remain confident in our relevance to long-term secular trends and ‘More Corning’ approach • We
Slide 10: Display Technologies and Specialty Materials Segment Recap
SEGMENT RECAP Display Technologies Q1 Results • Q1 Sales of $763M, down 3% sequentially – volume and glass price declined slightly $763M • Q1 Net income of $160M, down 6% sequentially – on lower sales Q1 Net Sales Down 3% QoQ Observations • In March, panel makers increased utilization and as a resul
Slide 11: Environmental Technologies and Life Sciences Segment Recap
SEGMENT RECAP Environmental Technologies Q1 Results • Q1 Sales of $431M, up 9% sequentially – driven by increased GPF adoption • Q1 Net income of $82M, up 19% sequentially – driven by higher sales and $431M improved productivity Q1 Net Sales Up 9% QoQ Observations • Not projecting a recovery in the
Slide 12: Hemlock and Emerging Growth Businesses; Outlook
SEGMENT RECAP Hemlock and Emerging Growth Businesses Q1 Results • Q1 Sales of $386M, down 16% sequentially – driven primarily by seasonally lower volumes in semiconductor polysilicon $386M • Q1 Net income of $16M Q1 Net Sales Down 16% QoQ Observations • Continued strong demand for solar-grade polysi
Slide 13: Capital Allocation Priorities; CFO Summary
CFO PERSPECTIVE Capital Allocation Priorities • Reinvest organically through • Research and development • Capital expenditures • 20% or greater ROIC on new investments • Expect 2023 full-year capital expenditures to be slightly lower than 2022 • Reward shareholders with excess cash • Dividend per sh
Slide 14: Q&A Session; Investor Outreach Plans
Q&A Session Corning’s 2023 Investor Outreach Plans • April 27 – 2023 Annual Meeting of Shareholders • May 23 – J.P. Morgan 51st Annual Global Technology, Media and Communications Conference • May 31 & June 1 – Bernstein 39th Annual Strategic Decisions Conference • June 22 – 2023 Fox Advisors Transpo
Slide 15: 2023 Corporate Metrics
Appendix 2023 Corporate Metrics (as of April 25, 2023)(1)(2) Q2 2023 • Core Sales: $3.4B - $3.6B • Core EPS: $0.42 - $0.49 • Display volume: Up significantly sequentially Full-Year 2023 • Hemlock and Emerging Growth Businesses sales: $1.5B - $1.7B • SG&A and RD&E: Consistent with 2022 as a percent o
Slide 16: Q1 2023 Core and Operating Performance
Q1 2023 Core Performance Q1 Q4 Q1 $ in millions, except EPS 2023 2022 2022 Core Net Sales $3,367 $3,633 $3,744 Core Gross Margin $1,186 $1,222 $1,370 Gross Margin % 35% 34% 37% Core SG&A $411 $451 $461 % of Sales 12% 12% 12% Core RD&E $252 $264 $250 % of Sales 7% 7% 7% Core Operating Margin $523 $50
Slide 17: Non-GAAP to GAAP Reconciliations
Adjusted Operating Cash Flow Reconciliation $ in millions Q1 2023 Q1 2022 Cash flows from operating activities ($49) $534 Realized gains on translated earnings contracts $81 $40 Translation losses on cash balances ($33) ($20) Adjusted cash flows from operating activities ($1) $554 Less: Capital expe
Slide 18: Corning
CORNING 18