Slide 1: Second-Quarter 2022 Investor Call
Second-Quarter 2022 Investor Call Corning Reports Strong Second-Quarter Results Highlighted by Continued Growth and Improved Profitability July 26, 2022 1
Slide 2: Forward-Looking and Cautionary Statements
Forward-Looking and Cautionary Statements The statements in this Quarterly Report on Form 10-Q, in reports subsequently filed by Corning with the SEC on Forms 8-K, and related comments by management that are not historical facts or information and contain words such as “will,” “believe,” “anticipate
Slide 3: FX Hedge Accounting
Q2 GAAP EARNINGS FX Hedge Accounting Recorded unrealized, non-cash, after-tax gain of $203M in Q2 2022 on mark-to- market adjustments associated with currency-hedging contracts and foreign debt – Translation hedges reduce our economic exposure to currency fluctuations, providing higher certainty for
Slide 4: Q2 Highlights
Q2 HIGHLIGHTS $3.8B Core Sales 7% Increase YoY SECOND QUARTER 2022 CORE PERFORMANCE “Corning executed very well in a challenging external environment 37.5% Gross Margin and delivered outstanding second-quarter results, with year-over- Expanded 90 bps Sequentially year sales and EPS growth of 7% and
Slide 5: Performance Drivers: Optical Communications and Hemlock
PERFORMANCE DRIVERS Optical Communications • Multiyear wave of growth for passive optical networks • Major innovation programs underway for broadband, 5G, and cloud • Accelerating customers’ ability to scale networks while driving “More Corning” solutions into the market © 2022 Corning Incorporated
Slide 6: Performance Drivers: Mobile Consumer Electronics
PERFORMANCE DRIVERS Mobile Consumer Electronics • Outperforming in a down market – “More Corning” approach – Product leadership – Ongoing collaboration with industry leaders • Customers adopting our innovations for new product launches expected this year © 2022 Corning Incorporated 11 Strategically
Slide 7: CEO Summary: New Generation of Technology Leadership
CEO Summary © 2022 Corning Incorporated 13 New Generation of Technology Leadership © 2022 Corning Incorporated 14 7
Slide 8: CFO Perspective
CFO Perspective $3.8B 37.5% $0.57 $440M Q2 Core Sales Q2 Gross Margin Q2 Core EPS Q2 Free Cash Flow 7% Increase YoY Expanded 90 bps 8 % Increase YoY Sequentially Executing well; driving growth and improved profitability; investing for long-term © 2022 Corning Incorporated 15 Second Quarter Highlight
Slide 9: Optical Communications and Display Technologies
OPTICAL COMMUNICATIONS Momentum Continues Q2 Results • Q2 Sales were $1.3B, up 22% YoY $1.3B • Net income of $182M, up 23% YoY from strong volume and price increases Q2 Net Sales Up 22% YoY Observations • Company believes passive optical market is in the early phases of a multiyear build cycle acros
Slide 10: Specialty Materials and Environmental Technologies
SPECIALTY MATERIALS ‘More Corning’ Approach Enables Growth Q2 Results • Q2 Sales were $485M, consistent with a strong Q2 2021 $485M • Net income of $91M, up 12% YoY Q2 Net Sales Consistent YoY Observations • Retail smartphone units expected to be down in 2022 • Expect sales growth in second half of
Slide 11: Life Sciences and Hemlock and Emerging Growth Businesses
LIFE SCIENCES Well Positioned to Serve Growing Segments Q2 Results • Q2 sales were $312M, consistent YoY $312M • Lower demand for COVID-related products offset by growth in research and Q2 Net Sales Consistent YoY bioproduction • Sales and net income were impacted by COVID lockdowns in China Observa
Slide 12: Outlook
Outlook Q3 2022 Expect benefit of pricing actions to • Core Sales: $3.65B - $3.85B continue • Core EPS: $0.51 - $0.55 Expect continued strong sales in FY 2022 Expectations other segments to offset lower Display volume • Core Sales to slightly exceed $15B; with growth up 6-8% Expectations facto
Slide 13: Q&A Session
Q&A Session Corning’s 2022 Investor Outreach Plans • Conference Plans: – September 8: Citi 2022 Global Technology Conference – September 13: Goldman Sachs 2022 Communacopia + Technology Conference • Management visits to investor offices in select cities • Scheduled visits to Corning locations for ho
Slide 14: 2022 Corporate Metrics
Appendix 2022 Corporate Metrics (as of July 26, 2022)(1)(2) Q3 2022 • Core Sales: $3.65B - $3.85B • Core EPS: $0.51 - $0.55 Full-Year 2022 • Core Sales: Slightly Exceed $15B; growing 6-8% • Hemlock and Emerging Growth Businesses sales: $1.4B - $1.6B • Other income/expense: (~$245M) net expense • Non
Slide 15: Q2 2022 Core Performance and Segment Performance
Q2 2022 Core Performance Q2 Q1 Q2 $ in millions, except EPS 2022 2022 2021 Core Net Sales $3,762 $3,744 $3,504 Core Gross Margin $1,410 $1,370 $1,326 Gross Margin % 37% 37% 38% Core SG&A $460 $461 $449 % of Sales 12% 12% 13% Core RD&E $244 $250 $236 % of Sales 6% 7% 7% Core Operating Margin $706 $65
Slide 16: Year-to-Date Core Performance and Segment Performance
Year-to-Date Core Performance YTD YTD $ in millions, except EPS Q2 2022 Q2 2021 Core Net Sales $7,506 $6,767 Core Gross Margin $2,780 $2,493 Gross Margin % 37% 37% Core SG&A $921 $837 % of Sales 12% 12% Core RD&E $494 $456 % of Sales 7% 7% Core Operating Margin $1,365 $1,200 Operating Margin % 18% 1
Slide 17: Adjusted Operating Cash Flow Reconciliation
Adjusted Operating Cash Flow Reconciliation YTD YTD $ in millions Q2 2022 Q2 2021 Q2 2022 Q2 2021 Cash flows from operating activities $758 $771 $1,292 $1,494 Realized gains on translated earnings contracts $92 $16 $132 $13 Translation (losses) gains on cash balances ($57) $8 ($77) ($51) Adjusted ca
Slide 18: Corning
- CORNING