Slide 1: Third-Quarter 2023 Investor Call
Third-Quarter 2023 Investor Call Corning Reports Third-Quarter Financial Results October 24, 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,” “target,” “estimate,”
Slide 3: Q3 GAAP Earnings: FX Hedge Accounting and Other Charges
Q3 GAAP EARNINGS FX Hedge Accounting and Other Charges • Incurred restructuring charges of $58M after tax • Recorded realized gains and unrealized, non-cash mark-to-market losses on currency hedging contracts for a net after-tax gain of $16M • Translation hedges reduce our economic exposure to curre
Slide 4: Third Quarter 2023 Core Performance
CEO PERSPECTIVE Third Quarter 2023 Core Performance $3.5B “Our markets continue to reflect demand below trend lines, but our Core Sales Consistent QoQ sales will recover, and we will return to growth. In the meantime, we will continue to improve our profitability and cash flow, even in this current
Slide 5: "More Corning" Highlights and Current Situation
CEO PERSPECTIVE “More Corning” Highlights MOBILE CONSUMER ELECTRONICS Extended our market leadership by collaborating with Apple to deliver durable glass with infused color – a first for any smartphone – for the back of the iPhone 15 and iPhone 15 Plus devices LIFE SCIENCES Announced Corning® Viridi
Slide 6: Global Fiber Shipments ex-China vs Corning Fiber Shipments
Q1'07 Q1'04 Q2'07 Q2'04 Q3'04 Q3'07 Q4'04 Q4'07 Source: CRU Q1'05 Q1'08 Q2'05 Q2'08 Q3'05 Q3'08 Q4'05 Q4'08 Q1'06 Q1'09 Q2'06 Q3'06 Q2'09 CEO PERSPECTIVE CEO PERSPECTIVE Q4'06 Q3'09 Q1'07 Q4'09 Q2'07 Q1'10 Q3'07 Q2'10 Q4'07 Q3'10 Q1'08 Q4'10 Q2'08 Q3'08 Q1'11 Q4'08 Q2'11 Q1'09 Q3'11 Q2'09 Q4'11 Q3'0
Slide 7: Trendline Analysis Used in All MAPs
CEO PERSPECTIVE Corning Fiber Shipments (M fkm) Corning Fiber Shipments (M ) 30%+ gap Corning CAGR 2012-2022: 7.3% Q4'23E Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'1
Slide 8: Market Leadership and Optical Communications
CEO PERSPECTIVE Market Leadership • Built a more advantaged position over the last few years • We are the technology leader as well as lowest-cost producer • Built more opportunities to capitalize on growth in our markets, increasing our value capture with our “More Corning” approach © 2023 Corning
Slide 9: Automotive and Display Technologies
CEO PERSPECTIVE Automotive • New U.S. EPA regulations go into effect starting in 2027 • Regulations force adoption of gasoline particulate filters – we are the inventor and clear market leader • Gasoline particulate filter adoption adds two to three times the content opportunity for internal combust
Slide 10: New Product Platforms and Market Recovery
CEO PERSPECTIVE New Product Platforms Continue to build new product platforms in new categories • Pharmaceutical packaging • Automotive exterior glass for high-autonomy systems • Rapidly growing opportunity to re-shore U.S. solar capacity © 2023 Corning Incorporated 19 CEO PERSPECTIVE Market Recover
Slide 11: CEO Summary and Third Quarter Results
CEO Summary • Continue to improve profitability and cash flow in the near term • Maintain powerful platform throughout this downcycle • Ability to deliver another $3B+ in sales with strong incrementals and minimal cash investments © 2023 Corning Incorporated 21 CFO PERSPECTIVE Third Quarter Results
Slide 12: Optical Communications and Display Technologies Segment Recap
SEGMENT RECAP Optical Communications Q3 Results • Q3 Sales of $918M, down 14% sequentially – reflecting lower order rates from carriers as they continue to draw down inventory $918M • Q3 Net income of $91M, down 35% sequentially – on lower volume Q3 Net Sales Down 14% QoQ Observations • Not counting
Slide 13: Specialty Materials and Environmental Technologies Segment Recap
SEGMENT RECAP Specialty Materials Q3 Results • Q3 Sales of $563M, up 33% sequentially – driven by customer product launches • Q3 Net income of $72M, up 118% sequentially – primarily driven by higher volume $563M and adoption of premium cover materials Q3 Net Sales Up 33% QoQ Observations • Higher Co
Slide 14: Life Sciences and Hemlock and Emerging Growth Businesses
SEGMENT RECAP Life Sciences Q3 Results • Q3 Sales of $230M, consistent sequentially $230M • Q3 Net income of $13M, up 18% sequentially – driven by productivity- improvement actions Q3 Net Sales Consistent QoQ Observations • Year over year sales decline reflects significantly lower demand for COVID-
Slide 15: Outlook and Strong Financial Discipline
Outlook Q4 2023 • Core Sales: ~$3.25B • Core EPS: $0.37 - $0.42 • Gross Margin Percent: Similar to third quarter • Cash Flow: Expect another strong quarter, despite sequential sales decline Outlook Reflects • Current order run rates • Continued weak demand in Optical Communications • Sequentially lo
Slide 16: CFO Summary and Q&A Session
CFO Summary • Continue focus on improving profitability and cash flow, despite muted sales outlook for fourth quarter • Remain well positioned to capture significant additional sales with minimal cash investment • Longer term, remain confident in our ability to • Outperform our markets as they recov
Slide 17: Appendix: Corning's 2023 Investor Outreach Plans
Corning’s 2023 Investor Outreach Plans • November 28 – UBS Global Technology Conference • Management visits to investor offices in select cities © 2023 Corning Incorporated 33 Appendix 17
Slide 18: 2023 Corporate Metrics and Q3 2023 Core Performance
2023 Corporate Metrics (as of October 24, 2023)(1)(2) Q4 2023 • Core Sales: ~$3.25B • Core EPS: $0.37 - $0.42 • Gross Margin Percent: Similar to third quarter • SG&A and RD&E: ~$430M and ~$250M, respectively Full-Year 2023 • Hemlock and Emerging Growth Businesses sales: $1.45B - $1.5B • Other income
Slide 19: Q3 2023 Operating Performance by Segment
Q3 2023 Operating Performance by Segment Core performance measures are non-GAAP measures. Definitions and reconciliations are provided on our website. © 2023 Corning Incorporated 37 Year-to-Date Core Performance Core performance measures are non-GAAP measures. Definitions and reconciliations are pro
Slide 20: YTD Operating Performance and Adjusted Operating Cash Flow Reconciliation
Year-to-Date Operating Performance by Segment Core performance measures are non-GAAP measures. Definitions and reconciliations are provided on our website. © 2023 Corning Incorporated 39 Adjusted Operating Cash Flow Reconciliation Core performance measures are non-GAAP measures. Definitions and reco
Slide 21: Reconciliation of Non-GAAP to GAAP Financial Measures
Reconciliation of Non-GAAP to GAAP Financial Measures Core performance measures are non-GAAP measures. Definitions and reconciliations are provided on our website. © 2023 Corning Incorporated 41 21