Slide 1: Second-Quarter 2024 Investor Call
Second-Quarter 2024 Investor Call Corning Reports Second-Quarter Financial Results July 30, 2024 1
Slide 2: Forward-Looking and Cautionary Statements; Use of Non-GAAP Financial Information
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: Q2 GAAP Earnings: FX Hedge Accounting and Other Charges
Q2 GAAP EARNINGS FX Hedge Accounting and Other Charges • Incurred restructuring charges of $130M after tax • Recorded realized gains and unrealized, non-cash mark-to-market losses on currency-hedging contracts for a net after-tax gain of $21M – Translation hedges reduce our economic exposure to curr
Slide 4: Second-Quarter 2024 Core Performance
CEO PERSPECTIVE Second-Quarter 2024 Core Performance “Our strong second-quarter results exceeded the guidance we provided in April and marked a return to year- over-year core sales and EPS growth. The outperformance was driven primarily by the strong adoption of our new optical connectivity products
Slide 5: Data Center Interconnections and Springboard Plan
Data Center Interconnections • Generative AI increases bandwidth requirements between data centers • Lumen Technologies and Corning have reached an agreement that reserves 10% of Corning’s global fiber capacity for each of the next 2 years to facilitate Lumen’s build of a new network to interconnect
Slide 6: Reaching Inflection Points; Springboard Sales Opportunity
Reaching Inflection Points • Materials science has moments of inflection • Critical milestones trigger quick succession of events • Over next several quarters, we expect to – Share customer announcements – Commercialize more innovations – March up in quarterly performance © 2024 Corning Incorporated
Slide 7: Springboard Sales Opportunity – Not Risk Adjusted
“Springboard” Sales Opportunity – Not Risk Adjusted $9 Incremental Annualized Sales Run-Rate vs. Q4’23 $8 $8B Incremental Annualized Sales vs. Q4’23 ($B) Significant Growth Opportunity New MAP $7 Emerging Growth Life Sciences Vessels $6 $5B MCE $5 Automotive Display $4 $3 Optical $2 $1 $0 Q4'23 Q4'2
Slide 8: Springboard Sales Opportunity – High-Confidence Plan
“Springboard” Sales Opportunity – High-Confidence Plan $9 Incremental Annualized Sales Run-Rate vs. Q4’23 $8 Incremental Annualized Sales vs. Q4’23 ($B) Second, we are risk adjusting to our $7 $3B+ High-Confidence Plan $6 $5 $4 $3B $3 $2 $1 $0 Q4'23 Q4'24 Q4'25 Q4'26 Q4'27 Q4'28 © 2024 Corning Incor
Slide 9: Strong Strength Expected to Continue in Third Quarter; CEO Summary
… and expect that strength to continue in third quarter $9 Incremental Annualized Sales Run-Rate vs. Q4’23 $8 Incremental Annualized Sales vs. Q4’23 ($B) $3.70B Q3’24F Sales $7 - $3.27B Q4’23 Sales $6 $0.43B Incremental x 4 Annualized $5B Not Risk Adjusted $5 $1.7B Q3’24F Run-Rate $4 $3B High-Confid
Slide 10: CFO Perspective: Springboard Plan and Sales Growth Examples
CFO PERSPECTIVE “Springboard” Plan Second-quarter results are a strong proof point of both the sales and the incremental profit and cash flow opportunity in our “Springboard” plan © 2024 Corning Incorporated 19 “Springboard” Sales Growth Examples Incremental Annualized Sales Run-Rate vs. Q4’23 $9 Op
Slide 11: Second-Quarter 2024 Results; Optical Communications
CFO PERSPECTIVE Second-Quarter 2024 Results “Our second-quarter results reflect great progress against our ‘Springboard’ plan. Core gross margin and operating margin improved 110 basis points and 190 basis points, respectively, versus the prior quarter. We also grew adjusted free cash flow to $353 m
Slide 12: Display Technologies; Approach to Display Price
SEGMENT RECAP Display Technologies Q2 Results • Q2 Sales of $1.0B, up 9% YoY $1.0B • Q2 Net income of $258M, up 24% YoY – driven by higher volume and price Q2 Net Sales Up 9% YoY Observations • Panel maker utilization ran at a higher rate in Q2 to support mid-year promotions • Q2 glass price consist
Slide 13: Specialty Materials; Environmental Technologies
SEGMENT RECAP Specialty Materials Q2 Results • Q2 Sales of $501M, up 18% YoY • Q2 Net income of $63M, up 91% YoY $501M Q2 Net Sales Up 18% YoY Observations • Year-over-year results in Q2 driven by continued strong demand for premium glasses for mobile devices and semiconductor-related products • Hig
Slide 14: Life Sciences; Hemlock and Emerging Growth Businesses
SEGMENT RECAP Life Sciences Q2 Results • Q2 Sales of $249M, up 8% YoY $249M • Q2 Net income of $17M, up 55% YoY Q2 Net Sales Up 8% YoY Observations • Longer-term, expect to outperform the broader market, focusing on fast- growing segments such as cell and gene therapy $17M Q2 Net Income Up 55% YoY ©
Slide 15: Q3 Outlook; Capital Allocation
Q3 Outlook • Sales: ~$3.7B – Growth in Optical Communications, including continued adoption of optical connectivity solutions for generative AI – Lower heavy-duty sales in Environmental Technologies from expected slowdown in the North America Class 8 truck market • EPS: $0.50 - $0.54 – Expected to g
Slide 16: CFO Summary; Q&A Session
CFO Summary • Off to great start on “Springboard” plan and on track to deliver $3B+ annualized sales opportunity • Q2 results and Q3 guide are strong proof point of incremental profit and cash flow we expect to deliver • Will continue to create value for shareholders as progress is made on “Springbo
Slide 17: Appendix: Corning's 2024 Investor Outreach Plans
Corning’s 2024 Investor Outreach Plans • August 14 – J.P. Morgan Hardware & Semis Management Access Forum • September 5 – Citi’s 2024 Global TMT Conference • September – Corning Incorporated Facility Visit • Management visits to investor offices in select cities © 2024 Corning Incorporated 33 Append
Slide 18: 2024 Corporate Metrics; Q2 2024 Core Performance
2024 Corporate Metrics (as of July 30, 2024)(1)(2) Q3 2024 • Core Sales: ~$3.7B • Core EPS: $0.50 - $0.54 • SG&A and RD&E: Consistent with Q2 ~$740M • Other income/expense: (~$95M) Full-Year 2024 • Hemlock and Emerging Growth Businesses sales: $1.30B - $1.35B • Environmental sales: Down slightly ver
Slide 19: Q2 2024 Operating Performance by Segment
Q2 2024 Operating Performance by Segment Optical Communications - Prior results have been recast to conform to the current period presentation. Reclassifications between Carrier and Enterprise reflect how customers are utilizing Corning products in their deployments. See below for recast 2023 amount
Slide 20: Year-to-Date Operating Performance by Segment; Adjusted Free Cash Flow Reconciliation
Year-to-Date Operating Performance by Segment Optical Communications - Prior results have been recast to conform to the current period presentation. Reclassifications between Carrier and Enterprise reflect how customers are utilizing Corning products in their deployments. Core performance measures a
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. © 2024 Corning Incorporated 41 21