Tony Tripeny · 2019-06-25 · 23. Cash Generation. 2020-2023 Capital Allocation. 1. Cash Flow from Ops (pre-RD&E) $16-18B *Utilize debt capacity while maintaining strong financial

Tony TripenyExecutive Vice Presidentand Chief Financial Officer

2© 2019 Corning Incorporated 2© 2019 Corning Incorporated

Strategy & Capital Allocation Framework

Strategy & Growth Framework

2016 - 2019 2020 - 2023


• Focus Portfolio: Deliver strong financial performance and capital stewardship– Improve ROIC– Create new sales and profit streams– Seek upside for cash distributions, e.g., potential transactions outside focus areas

• Utilize Financial Strength: Deploy $26-30B in cash through 2019– Deliver >$12.5B to shareholders including >10% annual dividend increases– Invest ~$10B in our growth and sustained leadership– Target Debt/EBITDA ≈ 2x

Focus Portfolio and Utilize Financial StrengthLeadership Priorities Through 2019

Fully Delivering on Goals

4© 2019 Corning Incorporated

2016-2019 Capital Allocation ModelSources Uses

Global Cash Target Level ~$2B

Total Funds

Available$26-30B

Cash

RD&E (after-tax)

Capital Expenditures

M&A

~$2B$6-7B$1-3B

Grow

th

Existing Cash atYear End 2015

Target Debt/EBITDA ≈ 2x

~$4.6B

~$4-5B

1~$13-16BCash Flow from Ops(before RD&E investment)

Potential Transactions ~$4.8B+ ~$?B

5Expand Share Repurchase Program

Increase Dividend per Share

+ >$12.5B

Shareholders


2016-2019 Capital Allocation Model

1Sources Uses


Total Funds

Available$26-30B

Cash

RD&E (after-tax)


M&A

~$2B$6-7B$1-3B

Grow

th



~$4.6B

~$4-5B

2Potential Transactions ~$4.8B+ ~$?B

~$13-16BCash Flow from Ops(before RD&E investment)



+ >$12.5B

Shareholders


Sources


1Uses


3Total

FundsAvailable

$26-30B

Cash

RD&E (after-tax)


M&A

~$2B$6-7B$1-3B

Grow

th



~$4.6B

~$4-5B





+ >$12.5B

Shareholders


Sources


1Uses

4


3Total

FundsAvailable

$26-30B

Cash

RD&E (after-tax)


M&A

~$2B$6-7B$1-3B

Grow

th



+ >$12.5B

Shareholders



~$4.6B

~$4-5B




Sources


1Uses

4

5Global Cash Target Level ~$2B

3Total

FundsAvailable

$26-30B

Cash

RD&E (after-tax)


M&A

~$2B$6-7B$1-3B

Grow

th

Expand Share Repurchase Program


+ >$12.5B

Shareholders



~$4.6B

~$4-5B




Sources


1Uses

4


3Total

FundsAvailable

$26-30B

Cash

RD&E (after-tax)


M&A

~$2B$6-7B$1-3B

5G

rowth

Expand Share Repurchase Program


+ >$12.5B

Shareholders



~$4.6B

~$4-5B




Returned >$12.5B

>60%October 2015 Market Cap

67%Dividend/Share Increase

>37%Reduction in Shares


Bigger and Stronger Corning

Strong Foundation for Growth

50%2015 2019F

$9

>$12

Sales ($B) EPS ROIC

~300bps


Grow

Increase Returns

• Sales CAGR of 6-8%• EPS CAGR of 12-15%• Invest $10-12B

• Increase operating margin and ROIC• Deliver $8-10B to shareholders, including

>10% annual dividend increases

Strategy & Growth FrameworkLeadership Priorities 2020 through 2023

Focus Portfolio and Utilize Financial Strength:


6-8%Sales CAGR




2020-2023: Market-Access Platform Growth Goals

~2X Passive Optical Market GrowthOptical Communications 5G and Hyperscale

Double Sales by 2023Automotive GPF and Auto Glass Solutions

Continue on Path to DoublingMobile Consumer Electronics More Value per Device

Life Sciences Vessels

>2X Industry Growth and Valor® Glass Franchise Launch

Cell and Gene Therapy; Customer and Regulatory Adoption

Display Stable Returns Gen 10.5 and Moderate Price Declines

Objective Drivers

14


Grow

Increase Returns







12-15%EPS CAGR




Grow

Increase Returns






Operating margin and ROIC





Grow

Increase Returns






Deliver $8-10B to shareholders

Invest $10-12B




2020-2023 Capital Allocation

1Cash Flow from Ops(pre-RD&E)

$16-18B

*Utilize debt capacity while maintaining strong financial metrics and investment grade rating

Cash Generation Investment and Returns

Financial Strength• Cash • Debt Capacity*• Portfolio Mgt

$5B+Increase Dividend/Share>10% Annually

Share Repurchases

~$3B

$5-7B

Returns

RD&E (after-tax)


Strategic Acquisitions

~$3B

$6-8B

~$1B

Grow

th

$8-10B

$10-12B


Cash Generation



$16-18B


Investment and Returns

2Financial Strength• Cash • Debt Capacity*• Portfolio Mgt


Share Repurchases

~$3B

$5-7B

Returns

RD&E (after-tax)



~$3B

$6-8B

~$1B

Grow

th

$8-10B

$10-12B


Cash Generation



$16-18B


Investment and Returns

Increase Dividend/Share>10% Annually

Share Repurchases

~$3B

$5-7B

Returns

RD&E (after-tax)



~$3B

$6-8B

~$1B

Grow

th

$8-10B

$10-12B

2Financial Strength• Cash • Debt Capacity*• Portfolio Mgt

$5B+


Attractive Debt Maturity Profile

$0M

$200M

$400M

$600M

$800M

$1,000M

'19 '20 '21 '22 '23 '24 '25 '26 '27 '28 '29 '30 '36 '37 '40 '41 '42 '48 '57 '68

USD Denominated JPY Denominated

Debt Maturity: • Avg. Maturity: 18.7 yrs• Due Through 2023: $1B • No Significant Maturity Towers

Yen Debt: • Natural Hedge• Low Interest Rates




$16-18B





Share Repurchases

~$3B

$5-7B

Returns

3

RD&E (after-tax)



~$3B

$6-8B

~$1B

Grow

th

$8-10B

$10-12B







Share Repurchases

~$3B

$5-7B

Returns $8-10B


$16-18B 3

Grow

th

RD&E (after-tax)



~$3B

$6-8B

~$1B

$10-12B







Share Repurchases

~$3B

$5-7B

Returns $8-10B


$16-18B

3

RD&E (after-tax)


~$3B

$6-8B

~$1B

Grow

th $10-12BCapital Expenditures


2020-2023 Capital Spending

Inner Loop

$4B


2020-2023 Capital Spending

Build

$2-4B




$16-18B

* Utilize debt capacity while maintaining strong financial metrics and investment grade rating



$5B+ $8-10BIncrease Dividend/Share>10% Annually

Share Repurchases

~$3B

$5-7B

Returns

RD&E (after-tax)


~$3B

$6-8B

~$1B

Grow

th $10-12BCapital Expenditures




$16-18B





Share Repurchases

~$3B

$5-7B

Returns

RD&E (after-tax)



~$3B

$6-8B

~$1B

Grow

th $10-12B


RD&E (after-tax)



~$3B

$6-8B

~$1B

Grow

th $10-12B



$16-18B





Share Repurchases

~$3B

$5-7B

Returns




1RD&E (after-tax)



~$3B

$6-8B

~$1B

Grow

th $10-12BCash Flow from Ops(pre-RD&E)

$16-18B



$5B+

Returns

Increase Dividend/Share>10% Annually

Share Repurchases

~$3B

$5-7B$8-10B



Cash Flow from Ops(pre-RD&E)

$16-18B



Grow

th $10-12B


$5B+

Returns $8-10B


Strong value for shareholders

Well positioned for additional growth

Bigger and stronger Corning


Documents

Tony Tripeny · 2019-06-25 · 23. Cash Generation. 2020-2023 Capital Allocation. 1. Cash Flow from Ops (pre-RD&E) $16-18B *Utilize debt capacity while maintaining strong financial