Slide 1: Third-Quarter 2022 Investor Call
Third-Quarter 2022 Investor Call Corning Reports Third-Quarter Results Highlighted by Optical Communications and Solar Sales Growth October 25, 2022 1
Slide 2: Forward-Looking and Cautionary Statements
Forward-Looking and Cautionary Statements The statements 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 similar expres
Slide 3: FX Hedge Accounting and Other Charges
Q3 GAAP EARNINGS FX Hedge Accounting and Other Charges • Recorded unrealized, non-cash, after-tax loss of $128M in Q3 2022 on mark- to-market adjustments associated with currency-hedging contracts – Translation hedges reduce our economic exposure to currency fluctuations, providing higher certainty
Slide 4: Q3 Highlights and Market Dynamics
Q3 HIGHLIGHTS $3.7B Core Sales 1% Increase YoY THIRD QUARTER 2022 CORE PERFORMANCE “While three of our key demand drivers are down, our cohesive 36.1% Gross Margin and focused portfolio is providing strategic resilience in the 140 bps Decrease Sequentially current environment. We remain well positio
Slide 5: Corning Performance and Display Drivers
HIGHLIGHTS Corning Performance • Delivered results within our guidance range and expectations • Benefit from infrastructure investments in broadband and clean energy • 16% YoY sales growth in Optical Communications • 33% YoY sales growth in Hemlock and Emerging Growth Businesses • Confident our stra
Slide 6: Mobile Consumer Electronics and Semiconductor Industry
PERFORMANCE DRIVERS Mobile Consumer Electronics • Growth in third quarter driven by customer product launches and strength in semiconductor materials • Outperforming the market – Product leadership – “More Corning” approach – Ongoing collaboration with industry leaders • Continue to develop and laun
Slide 7: Automotive and Optical Communications
PERFORMANCE DRIVERS Automotive • Environmental Technologies delivering sales and profit growth despite constraints on vehicle production; outperforming market • Significant wins in Automotive Glass Solutions – strong pull for technical glass and optics innovations • CarUX using Corning® ColdForm™ Te
Slide 8: Evolv Portfolio and Hemlock Growth Businesses
PERFORMANCE DRIVERS Evolv™ Portfolio Enables network operators to: • Streamline permitting • Accelerate field installation • Optimize network testing © 2022 Corning Incorporated 15 PERFORMANCE DRIVERS Hemlock and Emerging Growth Businesses • Grew third-quarter sales 33% year over year • Secured cust
Slide 9: CEO Summary and CFO Perspective
CEO Summary Cohesive and focused portfolio provides strategic resilience Deep relevance to secular trends and ability to drive more content into markets over time Distinctive set of capabilities and long track record of life-changing and life- saving inventions is the basis of our ongoing success ©
Slide 10: Third-Quarter Takeaways; Optical Communications
Third-Quarter Takeaways Despite the challenging environment: • Able to offset significantly lower volume in Display Technologies, highlighted by Optical Communications and solar sales growth • Outperformed our underlying markets overall © 2022 Corning Incorporated 19 OPTICAL COMMUNICATIONS Investing
Slide 11: Display Technologies and Specialty Materials
DISPLAY TECHNOLOGIES Operating From a Position of Strength Q3 Results • Q3 Sales of $686M, down 28% YoY $686M • Net income of $134M, down 46% YoY due to high fixed-cost nature of glass Q3 Net Sales manufacturing Down 28% YoY • Glass price consistent sequentially Observations • Upgrading some of our
Slide 12: Environmental Technologies and Life Sciences
ENVIRONMENTAL TECHNOLOGIES Delivering Sales and Profit Growth Q3 Results • Q3 sales of $425M, up 10% YoY $425M • Net income of $87M, up 45% YoY Q3 Net Sales Up 10% YoY Observations • Automotive production in the third quarter improved as China demand recovered after second-quarter COVID lockdowns $8
Slide 13: Hemlock and Emerging Growth; Outlook
HEMLOCK AND EMERGING GROWTH BUSINESSES Continuing Strong Demand Q3 Results $407M • Q3 sales of $407M, up 33% YoY, driven by increased demand for semiconductor- Q3 Net Sales grade polysilicon and strong demand for solar materials Up 33% YoY • Continued to ramp solar capacity and entered long-term tak
Slide 14: CFO Summary
CFO Summary • Resilience from balanced and cohesive portfolio and “More Corning” approach • Executing well; long-term growth drivers remain intact • Maintaining strong balance sheet and disciplined approach to capital allocation • In current environment, taking actions to – Preserve profitability –
Slide 15: Corning's 2022 Investor Outreach Plans
Corning’s 2022 Investor Outreach Plans • Conference Plans: – November 29: Credit Suisse 26th Annual Technology Conference – December 8: Barclays Global Technology, Media and Telecommunications Conference • Management visits to investor offices in select cities © 2022 Corning Incorporated 29 Appendix
Slide 16: 2022 Corporate Metrics; Q3 2022 Core Performance
2022 Corporate Metrics (as of October 25, 2022)(1)(2) Q4 2022 • Core Sales: $3.45B - $3.65B • Core EPS: $0.41 - $0.47 Full-Year 2022 • Hemlock and Emerging Growth Businesses sales: ~$1.6B • Other income/expense: (~$225M) net expense • Non-controlling interest: ($70M - $80M) expense • Gross equity ea
Slide 17: Q3 2022 Operating Performance
Q3 2022 Operating Performance Segment Net Sales Q3 Q2 % Q3 % $ in millions 2022 2022 change 2021 change Optical Communications $1,317 $1,313 — $1,131 16% Carrier Network $975 $967 1% $855 14% Enterprise Network $342 $346 (1%) $276 24% Display Technologies $686 $878 (22%) $956 (28%) Specialty Materia
Slide 18: Year-to-Date Operating Performance
Year-to-Date Operating Performance Segment Net Sales YTD YTD % $ in millions Q3 2022 Q3 2021 change Optical Communications $3,828 $3,143 22% Carrier Network $2,865 $2,293 25% Enterprise Network $963 $850 13% Display Technologies $2,523 $2,758 (9%) Specialty Materials $1,497 $1,490 — Environmental Te
Slide 19: Reconciliation of Non-GAAP to GAAP Financial Measures
Reconciliation of Non-GAAP to GAAP Financial Measures Net Income Gross Gross Operating Operating Equity Income Before attributable to Tax Rate Per Q3 2022 Sales Margin Margin % SG&A RD&E Margin Margin % Earnings Income Taxes Corning (a) Share Incorporated As Reported - GAAP $3,488 $1,062 30.4% $461
Slide 20: Q3 Return on Invested Capital (ROIC)
Q3 Return on Invested Capital (ROIC) GAAP to Core GAAP Core Adjustments Operating income 292 326 618 Equity in earnings of affiliated companies 1 2 3 Operating Income before interest and taxes 293 328 621 Tax Rate 20.5% ‐Tax (127) Operating Income ‐ Tax Adjusted 494 Equity 11,548 + Debt 6,733 Invest
Slide 21: GAAP to Core Reconciliation; Balance Sheet
GAAP to Core Reconciliation (Earnings Deck) © 2022 Corning Incorporated 41 Balance Sheet (8-K) © 2022 Corning Incorporated 42 21
Slide 22: CORNING
- CORNING