The dividend is payable September 28, 2007 to shareholders of record as of the close of business on August 29, 2007.The aggregate quarterly dividend is estimated at approximately $80 million.
"We believe the timing is right for Corning to begin returning cash to shareholders through a quarterly cash dividend and a share repurchase program," Wendell P. Weeks, chairman and chief executive officer, said. "Five years ago we set out on a strategy to return Corning to profitability, protect the financial health of the company and continue to invest in our long-term future. We have made significant progress on these objectives."
Weeks pointed out that Corning's 2006 net profit after tax, before special items, was $1.78 billion, double what it was in 2000 at the height of the telecommunications boom. This is a non-GAAP financial measure. This and all non-GAAP financial measures are reconciled on the company's investor relations Web site and in an attachment to this news release. "We reduced our outstanding debt to $1.5 billion by the end of the first quarter from $4.2 billion at the end of 2002. And, the financial rating agencies have recently recognized our improved financial health. We are now rated at the equivalent of BBB+ with all three rating agencies," he said. In addition, Corning has generated significant operating cash flow in excess of capital expenditures in each of the last four years. "This decision reflects our confidence in our strategic plan and our ability to continue to generate positive free cash flow in the future," Weeks said.
"At the same time, we recognize that our most important goal is to reinvest in business opportunities that will help deliver future profitable growth for shareholders. We believe that Corning may be on the verge of one of the most productive decades in our history. We will need to make continued investments in research and development expense and capital spending to commercialize our emerging technologies, particularly in the areas of our Epic® System, the world's first high-throughput label-free drug screening process, which has the potential to shorten the drug discovery cycle; silicon on glass, which could provide longer battery life for handheld consumer electronic devices; microreactors, which have the potential to deliver major process innovation and cost reduction for the chemical processing industry; and other early-stage innovations in our laboratories. We believe these investments have the potential to create significant long-term value for our shareholders," Weeks said.
The company expects that continued strong business performance in both its consolidated businesses and equity investments will allow Corning to fund investments in new businesses and return cash to shareholders through dividends and share repurchases, while maintaining a strong balance sheet.
The share repurchase program authorizes the purchase of $500 million of the company's common stock from time to time through open market or private transactions depending on market conditions between now and the end of 2008.