Corning Announces First-Quarter Results; Results Exceed Guidance; Corning to Restate 2003 Pittsburgh Corning Corporation Litigation Settlement.CORNING Corning, city (1990 pop. 11,938), Steuben co., S N.Y., on the Chemung River, in a dairy and vineyard region; settled 1788, inc. as a city 1890. The glass industry for which the city is famous began in 1868. N.Y. -- Corning Incorporated Corning Incorporated NYSE: GLW is an American manufacturer of glass, ceramics and related materials, primarily for industrial and scientific applications. The company was known until 1989 as Corning Glass Works. (NYSE NYSE See: New York Stock Exchange :GLW GLW Glasgow Airport (UK) GLW Gross Laden Weight GLW Good Lady Wife (Australia) ) today announced first-quarter sales of $1.26 billion, with net income of $257 million, or $0.16 per share. Corning's first-quarter results included special charges totaling $168 million, or $0.11 per share. Excluding these charges, Corning's first-quarter net income would have been $425 million, or $0.27 per share. These are non-GAAP financial measures. These and all non-GAAP financial measures are reconciled rec·on·cile v. rec·on·ciled, rec·on·cil·ing, rec·on·ciles v.tr. 1. To reestablish a close relationship between. 2. To settle or resolve. 3. on the company's investor relations Investor relations The process by which the corporation communicates with its investors. Web site and in attachments to this news release. The company's first-quarter results exceeded its sales guidance range of $1.2 billion to $1.25 billion and significantly exceeded its guidance for earnings. Corning began expensing stock options in the first quarter of 2006. First-quarter results included $0.01 per share of expense related to stock options. "Our first-quarter results were very satisfying," Wendell Wendell is a name that has many uses: Places
Corning's first-quarter results were impacted by the following non-cash items: --A $185 million pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern and after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. net charge primarily reflecting the increase in market value of Corning common stock to be contributed to settle the asbestos asbestos, mineral asbestos, common name for any of a variety of silicate minerals within the amphibole and serpentine groups that are fibrous in structure and more or less resistant to acid and fire. litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. related to the Pittsburgh Pittsburgh (pĭts`bərg), city (1990 pop. 369,879), seat of Allegheny co., SW Pa., at the confluence of the Allegheny and the Monongahela rivers, which there form the Ohio River; inc. 1816. Corning Corporation. --A $38 million reduction in income tax expense related to the release of the valuation allowance on certain deferred tax assets in Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). . --A $21 million reduction in equity earnings related to the impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of long-lived long-lived adj. 1. Having a long life: a long-lived aunt. 2. Lasting a long time; persistent: a long-lived rumor. 3. assets at Samsung Corning Company, Ltd., Corning's 50-percent owned equity venture in Korea Korea (kôrē`ə, kə–), Korean Hanguk or Choson, region and historic country (85,049 sq mi/220,277 sq km), E Asia. , which manufactures glass panels and funnels for cathode ray tubes See CRT. (hardware) cathode ray tube - (CRT) An electrical device for displaying images by exciting phosphor dots with a scanned electron beam. CRTs are found in computer VDUs and monitors, televisions and oscilloscopes. for televisions and computer monitors. First-Quarter Operating Results Corning's first-quarter sales of $1.26 billion increased 5 percent over fourth-quarter sales of $1.2 billion, and increased 20 percent over last year's first-quarter sales of $1.05 billion. Gross margin of 45 percent for the first quarter was consistent with the fourth quarter. Equity earnings for the first quarter were $200 million, including the $21 million impairment charge at Samsung Corning. Absent this charge, equity earnings reflect strong operating results at Dow Corning Dow Corning is a multinational corporation headquartered in Midland, Michigan, USA. Dow Corning specializes in silicon and silicone-based technology, offering more than 7,000 products and services. Dow Corning is equally owned by The Dow Chemical Company and Corning, Inc. Corporation and Samsung Corning Precision Glass  The of this article or section may be compromised by "peacock terms".You can help Wikipedia by removing peacock terms. Co., Ltd., (SCP (1) (Service Control Point) A node in an SS7 telephone network that provides an interface to databases, which may reside within the SCP computer or in other computers. ), Corning's 50-percent owned equity venture in Korea, which manufactures liquid crystal display liquid crystal display (LCD) Optoelectronic device used in displays for watches, calculators, notebook computers, and other electronic devices. Current passed through specific portions of the liquid crystal solution causes the crystals to align, blocking the passage of light. (LCD (Liquid Crystal Display) A display technology that uses rod-shaped molecules (liquid crystals) that flow like liquid and bend light. Unenergized, the crystals direct light through two polarizing filters, allowing a natural background color to show. ) glass substrates. Corning's equity earnings from Dow Corning were $69 million in the first quarter, a 38-percent increase over fourth-quarter results. First-quarter equity earnings include about $15 million of non-recurring gains. First-quarter sales for Corning's Display Technologies segment were $547 million, a 71-percent increase over 2005 first-quarter sales of $320 million. First-quarter year-over-year LCD glass volume more than doubled. Sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen , first-quarter sales increased 6 percent over fourth-quarter sales of $518 million. Stronger-than-expected volume growth of 15 percent was partially offset by the anticipated upper single-digit price declines. Samsung Corning Precision's first-quarter volume increased 10 percent sequentially and 87 percent year-over-year. Equity earnings from SCP were $140 million in the first quarter, compared to $129 million in the previous quarter. Total volume in the Display Technologies segment, including both Corning's wholly owned business and SCP, increased 13 percent sequentially in the first quarter. Net income for the Display Technologies segment was $417 million, up 13 percent compared to $368 million in the fourth quarter. First-quarter Telecommunications segment sales increased 4 percent to $397 million versus $383 million last quarter, primarily due to higher fiber and cable sales in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . Fiber-to-the-premises (FTTP (Fiber To The Premises) The installation of optical fiber from the carrier directly into the home or office. Also called "fiber to the home" (FTTH). See PON and FTTC. See also FTP. ) sales in the first quarter increased slightly over fourth-quarter results. The Environmental Technologies segment had sales of $155 million in the first quarter, compared to $142 million in the fourth quarter of last year, a 9-percent increase. The increase was driven by an improvement in global automotive sales. The company also saw a 14-percent sequential One after the other in some consecutive order such as by name or number. sales increase in its Life Sciences segment of $72 million versus $63 million in the previous quarter. Cash Flow/Liquidity Update Corning ended the first quarter with $2.48 billion in cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments, an increase from $2.4 billion in the previous quarter. The company's debt level remained at $1.8 billion. James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. B. Flaws, vice chairman and chief financial officer, said, "We were delighted that Standard & Poor's Rating Services raised its credit rating on Corning to BBB BBB A medium grade assigned to a debt obligation by a rating agency to indicate an adequate ability to pay interest and repay principal. However, adverse developments are more likely to impair this ability than would be the case for bonds rated A and above. from the previous grade of BBB minus in early April. While we ended the quarter with a negative $176 million of free cash flow, it was the result of seasonally higher first-quarter working capital expenditures, our continued capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. in Display Technologies, and our equity investment in SCP early in the first quarter. We remain on track to be free cash flow positive for the full year." Free cash flow is a non-GAAP financial measure. Restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of 2003 Pittsburgh Corning Settlement Corning has determined that its accounting for the 2003 Pittsburgh Corning Corporation (PCC PCC prothrombin complex concentrate. ) asbestos litigation settlement was not in compliance with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). Specifically, two components of the settlement liability - Corning's investment in Pittsburgh Corning Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). (PCE PCE pseudocholinesterase; see cholinesterase. erythromycin Apo-Erythro (CA), Apo-Erythro-EC, Diomycin (CA), E-Base, E-Mycin, Erybid (CA), Erymax (UK), Ery-Tab, Erythromid (CA), PCE (CA), Rommix (UK), Tiloryth (UK) ) and the proceeds of certain insurance policies to be assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. - were accounted for at book value rather than at estimated fair value, as required by GAAP. The company also incorrectly in·cor·rect adj. 1. Not correct; erroneous or wrong: an incorrect answer. 2. Defective; faulty: incorrect programming of the computer. 3. suspended sus·pend v. sus·pend·ed, sus·pend·ing, sus·pends v.tr. 1. To bar for a period from a privilege, office, or position, usually as a punishment: suspend a student from school. recognition of equity earnings from Pittsburgh Corning Europe at that time. Corning management and its audit committee have concluded that the company will restate re·state tr.v. re·stat·ed, re·stat·ing, re·states To state again or in a new form. See Synonyms at repeat. re·state its historical financial statements to reflect the appropriate accounting. The primary impact of this restatement will be to increase the asbestos settlement liability by $94 million pretax, ($50 million after-tax) in the first quarter of 2003, and to increase the deferred tax valuation allowance recorded in the third quarter of 2004 by about $50 million. The restatement will have no impact on 2005 reported earnings per share. Corning will continue to recognize changes in the fair value of all components of the liability until a settlement occurs. Details of the restatement will be included in a Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. to be filed today. Flaws said, "We would like to emphasize to investors that this restatement is non-cash and solely relates to our accounting for the asbestos settlement liability and our investment in Pittsburgh Corning Europe. Additionally, there has been no change to the accounting for our contribution of Corning common stock as part of the proposed settlement. We are awaiting the bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most court's ruling on the proposed settlement." The company said that it will continue to have full access to its $975 million revolving credit agreement Revolving credit agreement A legal commitment in which a bank promises to lend a customer up to a specified maximum amount during a specified period. revolving credit agreement See line of credit. . As a result of the planned restatement, the company's previously issued consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge , including those contained in its 2005 Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and its first, second and third quarter 2005 Form 10-Qs Form 10-Q See 10-Q. , can no longer be relied upon. Corning intends to file an amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. 2005 Form 10-K and its first quarter 2006 Form 10-Q by May 10, 2006. Second-Quarter Outlook Flaws said that the company expects second-quarter sales to be in the range of $1.29 billion to $1.33 billion, and EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. in the range of $0.24 to $0.26 before special items. This EPS estimate is a non-GAAP financial measure and excludes special items. The gross margin percentage for the second quarter is expected to be in the range of 42 percent to 44 percent. Corning expects that the second-quarter corporate tax rate will be between 15 percent and 20 percent. In the Display Technologies segment, Corning anticipates that its second-quarter sequential volume growth for its wholly owned business will be in the range of flat to a 5 percent increase following very strong first-quarter volume growth. Year-over-year volume growth for the second quarter is expected to be greater than 60 percent. Samsung Corning Precision expects sequential volume growth in a range from flat to up 5 percent and year-over-year volume growth greater than 50 percent. Corning said that it expects pricing declines in the second quarter to be lower than first-quarter price declines. Corning expects its Display segment sales to be consistent with the first quarter. Flaws said, "Some of the strong LCD demand that we experienced last quarter may have contributed to an inventory buildup build·up also build-up n. 1. The act or process of amassing or increasing: a military buildup; a buildup of tension during the strike. 2. in the supply channel late in the quarter. This is contributing to Corning's slightly lower sequential growth rate. In early April, a lightning strike lightning strike n → huelga relámpago lightning strike n (Brit) → grève f surprise lightning strike n (BRIT to a utility line caused a temporary power outage Noun 1. power outage - equipment failure resulting when the supply of power fails; "the ice storm caused a power outage" power failure equipment failure, breakdown - a cessation of normal operation; "there was a power breakdown" at our Shizuoka Shizuoka (shĭz  `ôkä), city (1990 pop. 472,196), capital of Shizuoka prefecture, E central Honshu, Japan, on Suruga Bay. , Japan LCD plant. This will result in slightly lower
second-quarter manufacturing volumes and unusually high equipment repair
expenses. These two items will result in lower Display segment earnings
in the second quarter." Corning anticipates that no material
customer supply disruptions will result from the equipment repair.
Corning's Telecommunications segment second-quarter sales growth is expected to be in the range of 10 percent to 15 percent, driven primarily by hardware and equipment sales. Second-quarter sales in the company's Environmental Technologies segment are expected to be down slightly from the first quarter. Any weakness in the second quarter would be driven primarily by the U.S. auto market. The company anticipates second-quarter equity earnings to be lower than the first quarter, due primarily to the non recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. gains in the first quarter. Equity earnings from Dow Corning are expected to be consistent with the first quarter. Weeks said, "We believe the LCD market will continue to be strong over the course of the year, driven primarily by the growing acceptance of LCD technology in the television market. As we have told investors a number of times, supply chain issues could impact our results in any given quarter. However, we have not changed our view that the LCD industry will grow between 40 percent and 50 percent this year and that Corning's Display segment will grow at a rate faster than the industry." Meeting Investors The company also announced that it will be meeting investors on Tuesday Tuesday: see week. , May 2 at the Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. Technology conference in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . Annual Shareholders Meeting Corning will hold its annual meeting of shareholders on Thursday Thursday: see week. , April 27, 2006 beginning at 11 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT at the Corning Museum of Glass The Corning Museum of Glass grants permission to Wikipedia to include text from its website in the article below. The Corning Museum of Glass, in Corning, New York, explores every facet of glass: its unique place in art, history, culture, science and technology, auditorium auditorium Portion of a theater or hall where an audience sits, as distinct from the stage. The auditorium originated in the theaters of ancient Greece, as a semicircular seating area cut into a hillside. in Corning, N.Y. First-Quarter Conference Call Information The company will host a first-quarter conference call at 8:30 a.m. EDT on Wednesday Wednesday: see week. , April 26. To access the call, dial (210) 234-0007. The password A secret word or code used to serve as a security measure against unauthorized access to data. It is normally managed by the operating system or DBMS. However, the computer can only verify the legitimacy of the password, not the legitimacy of the user. See NCSC. is RESULTS. The leader is SOFIO. A replay of the call will begin at approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 10:30 a.m. EDT, and will run through 5 p.m. EDT, Wednesday, May 10. To listen, dial (203) 369-1253, no pass code is required. To listen to a live audio webcast of the call, please go to Corning's Web site: http://www.corning.com/investor_relations, and follow the instructions. The audio webcast will be archived for one year following the call. Presentation of Information in this News Release Non-GAAP financial measures are not in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with, or an alternative to, GAAP. Corning's non-GAAP net income and EPS measure excludes restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). , impairment and other charges and adjustments to prior estimates for such charges. Additionally, the company's non-GAAP measure excludes adjustments to asbestos settlement reserves required by movements in Corning's common stock price, gains and losses arising from debt retirements, charges resulting from the impairment of equity or cost method investments, or adjustments to deferred tax assets, and gains or losses recognized in equity earnings from restructuring, impairment or other charges or credits taken by equity method companies. Corning's free cash flow financial measures are also non-GAAP measures. The company believes presenting non-GAAP free cash flow, net income and EPS measures are helpful to analyze an·a·lyze v. 1. To examine methodically by separating into parts and studying their interrelations. 2. To separate a chemical substance into its constituent elements to determine their nature or proportions. 3. financial performance without the impact of unusual items that may obscure OBSCURE - "A Formal Description of the Specification Language OBSCURE", J. Loeckx, TR A85/15, U Saarlandes, Saarbrucken, 1985. trends in the company's underlying performance. These non-GAAP measures are reconciled on the company's Web site at www.corning.com/investor_relations and accompany To go along with; to go with or to attend as a companion or associate. A motor vehicle statute may require beginning drivers or drivers under a certain age to be accompanied by a licensed adult driver whenever operating an automobile. this news release. About Corning Incorporated Corning Incorporated (www.corning.com) is a diversified diversified (di·verˑ·s technology company that concentrates its efforts on high-impact growth opportunities. Corning combines its expertise in specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. glass, ceramic This article is about ceramic materials. For the fine art, see Ceramic art. The word ceramic is derived from the Greek word κεραμικός (keramikos). materials, polymers and the manipulation Manipulation Dealing in a security to create a false appearance of active trading, in order to bring in more traders. Illegal. of the properties of light, with strong process and manufacturing capabilities to develop, engineer and commercialize significant innovative products for the telecommunications, flat panel display A thin display screen for computer and TV usage. The first flat panels appeared on laptop computers in the mid-1980s, and the LCD technology became the standard. Stand-alone LCD screens became available for desktop computers in the mid-1990s and exceeded sales of CRTs for the first time , environmental, semiconductor, and life sciences industries. Forward-Looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. and Cautionary Statements This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve a variety of business risks and other uncertainties that could cause actual results to differ materially. These risks and uncertainties include the possibility of changes or fluctuations in global economic and political conditions; tariffs This is a list of tariffs and trade legislation:
The earliest stage of a new business venture. costs; possible disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. in commercial activities due to terrorist activity, armed conflict, political instability instability /in·sta·bil·i·ty/ (-stah-bil´i-te) lack of steadiness or stability. detrusor instability or major health concerns; ability to obtain financing and capital on commercially reasonable terms; adequacy and availability of insurance; capital resource and cash flow activities; capital spending; equity company activities; interest costs; acquisition and divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). activities; the level of excess or obsolete inventory Obsolete Inventory Term that refers to inventory that is at the end of its product life cycle and has not seen any sales or usage for a set period of time usually determined by the industry. This type of inventory has to be written down and can cause large losses for a company. ; the rate of technology change; the ability to enforce patents; product and components performance issues; changes in key personnel; stock price fluctuations; and adverse litigation or regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. developments. These and other risk factors are identified in Corning's filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the day that they are made, and Corning undertakes no obligation to update them in light of new information or future events.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in millions, except per share amounts)
Three months ended
March 31,
-------------------
2005 As
2006 Restated
-------- ----------
Net sales $ 1,262 $ 1,050
Cost of sales 689 621
-------- --------
Gross margin 573 429
Operating expenses:
Selling, general and administrative expenses 223 184
Research, development and engineering expenses 124 98
Amortization of purchased intangibles 3 5
Restructuring, impairment and other charges 6 19
Asbestos settlement (Note 2) 185 (12)
-------- --------
Operating income 32 135
Interest income 24 10
Interest expense (20) (35)
Loss on repurchases and retirement of debt, net (9)
Other income (expense), net 20
-------- --------
Income before income taxes 56 101
Benefit (provision) for income taxes (Note 3) 2 (19)
-------- --------
Income before minority interests and equity
earnings 58 82
Minority interests (1) (1)
Equity in earnings of associated companies, net of
impairments (Note 4) 200 169
-------- --------
Net income $ 257 $ 250
======== ========
Basic earnings per common share (Note 5) $ 0.17 $ 0.18
======== ========
Diluted earnings per common share (Note 5) $ 0.16 $ 0.17
======== ========
See accompanying notes to these financial statements.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited; in millions, except per share amounts)
December 31,
March 31, 2005 As
2006 Restated
---------- ------------
Assets
Current assets:
Cash and cash equivalents $ 1,262 $ 1,342
Short-term investments, at fair value 1,216 1,092
---------- ----------
Total cash, cash equivalents and short-
term investments 2,478 2,434
Trade accounts receivable, net 696 629
Inventories 616 570
Deferred income taxes 65 44
Other current assets 189 183
---------- ----------
Total current assets 4,044 3,860
Investments 1,929 1,729
Property, net 4,816 4,675
Goodwill and other intangible assets, net 336 338
Deferred income taxes 50 10
Other assets 582 595
---------- ----------
Total Assets $ 11,757 $ 11,207
========== ==========
Liabilities and Shareholders' Equity
Current liabilities:
Short-term borrowings, including current
portion of long-term debt $ 23 $ 18
Accounts payable 661 690
Other accrued liabilities 1,699 1,662
---------- ----------
Total current liabilities 2,383 2,370
Long-term debt 1,788 1,789
Postretirement benefits other than pensions 593 593
Other liabilities 907 925
---------- ----------
Total liabilities 5,671 5,677
---------- ----------
Commitments and contingencies
Minority interests 46 43
Shareholders' equity:
Preferred stock - Par value $100.00 per
share; Shares authorized: 10 million
Common stock - Par value $0.50 per share;
Shares authorized: 3.8 billion;
Shares issued: 1,564 million and 1,552
million 786 776
Additional paid-in capital 11,808 11,548
Accumulated deficit (6,591) (6,847)
Treasury stock, at cost; Shares held: 17
million (181) (168)
Accumulated other comprehensive income 218 178
---------- ----------
Total shareholders' equity 6,040 5,487
---------- ----------
Total Liabilities and Shareholders' Equity $ 11,757 $ 11,207
========== ==========
See accompanying notes to these financial statements.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in millions)
Three months
ended March 31,
-----------------
2005 As
2006 Restated
------- ---------
Cash Flows from Operating Activities:
Net income $ 257 $ 250
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 141 120
Amortization of purchased intangibles 3 5
Asbestos settlement 185 (12)
Restructuring, impairment and other charges 6 19
Stock compensation charges 32 6
Undistributed earnings of associated
companies (77) (26)
Deferred taxes (62) 3
Restructuring payments (4) (9)
Customer deposits (8) 20
Employee benefit payments less than expense 15 16
Changes in certain working capital items:
Trade accounts receivable (65) (54)
Inventories (46) (39)
Other current assets (8) (16)
Accounts payable and other current
liabilities, net of restructuring
payments (195) (151)
Other, net 7 10
------- -------
Net cash provided by operating activities 181 142
------- -------
Cash Flows from Investing Activities:
Capital expenditures (280) (323)
Investment in affiliate companies (77)
Short-term investments - acquisitions (858) (314)
Short-term investments - liquidations 735 486
Other, net 2
------- -------
Net cash used in investing activities (480) (149)
------- -------
Cash Flows from Financing Activities:
Repayments of short-term borrowings and current
portion of long-term debt (4) (192)
Proceeds from issuance of long-term debt, net 48
Retirements of long-term debt (2)
Proceeds from issuance of common stock, net 6 12
Proceeds from the exercise of stock options 219 9
Other, net (2) (5)
------- -------
Net cash provided by (used in) financing activities 219 (130)
------- -------
Effect of exchange rates on cash (25)
------- -------
Net decrease in cash and cash equivalents (80) (162)
Cash and cash equivalents at beginning of period 1,342 1,009
------- -------
Cash and cash equivalents at end of period $1,262 $ 847
======= =======
Certain amounts for 2005 were reclassified to conform to 2006
classifications.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
SEGMENT RESULTS
(Unaudited; in millions)
Our reportable operating segments include Display Technologies,
Telecommunications, Environmental Technologies and Life Sciences.
Environ-
Display mental
Tech- Telecom- Tech- Life All
nologies munications nologies Sciences Other Total
-------- ----------- -------- -------- ----- -------
Three months ended
March 31, 2006
Net sales $ 547 $ 397 $ 155 $ 72 $ 91 $1,262
Depreciation (1) $ 62 $ 42 $ 20 $ 5 $ 10 $ 139
Amortization of
purchased
intangibles $ 3 $ 3
Research,
development and
engineering
expenses (2) $ 30 $ 20 $ 30 $ 13 $ 8 $ 101
Restructuring,
impairment and
other charges
(before-tax and
minority
interest) $ 6 $ 6
Income tax
provision $ (29) $ (6) $ (3) $ (38)
Income (loss)
before minority
interests and
equity earnings
(loss) (3) $ 275 $ (2) $ (5) $ 2 $ 270
Minority interests $ 1 $ (2) $ (1)
Equity in earnings
(loss) of
associated
companies (4) 142 2 (1) (13) 130
------- -------- ------- ------- ----- -------
Net income (loss) $ 417 $ 1 $ (1) $ (5) $(13) $ 399
======= ======== ======= ======= ===== =======
Three months ended
March 31, 2005 -
Restated
Net sales $ 320 $ 427 $ 148 $ 74 $ 81 $1,050
Depreciation (1) $ 41 $ 46 $ 17 $ 5 $ 9 $ 118
Amortization of
purchased
intangibles $ 5 $ 5
Research,
development and
engineering
expenses (2) $ 21 $ 17 $ 23 $ 8 $ 7 $ 76
Income tax
provision $ (8) $ (8) $ (3) $ (1) $ (2) $ (22)
Earnings before
minority interest
and equity
earnings (3) $ 119 $ 18 $ 9 $ 4 $ 3 $ 153
Minority interests $ (2) $ (2)
Equity in earnings
of associated
companies 81 17 98
------- -------- ------- ------- ----- -------
Net income $ 200 $ 18 $ 9 $ 4 $ 18 $ 249
======= ======== ======= ======= ===== =======
(1) Depreciation expense for Corning's reportable segments includes an
allocation of depreciation of corporate property not specifically
identifiable to a segment.
(2) Research, development, and engineering expenses includes direct
project spending which is identifiable to a segment.
(3) Many of Corning's administrative and staff functions are performed
on a centralized basis. Where practicable, Corning charges these
expenses to segments based upon the extent to which each business
uses a centralized function. Other staff functions, such as
corporate finance, human resources and legal are allocated to
segments, primarily as a percentage of sales.
(4) Includes a $21 million charge (net of tax) for Corning's share of
an impairment charge for Samsung Corning Co., Ltd.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
SEGMENT RESULTS
(Unaudited; in millions)
A reconciliation of reportable segment net income (loss) to
consolidated net income (loss) follows (in millions):
Three months
ended March 31,
-----------------
2005 As
2006 Restated
------- ---------
Net income of reportable segments $ 399 $ 249
Unallocated amounts:
Net financing costs (1) (8) (37)
Stock-based compensation expense (32) (6)
Exploratory research (21) (19)
Corporate contributions (8) (5)
Equity in earnings of associated companies, net of
impairments 70 71
Asbestos settlement (2) (185) 12
Other corporate items (3) 42 (15)
------- -------
Net income $ 257 $ 250
======= =======
(1) Net financing costs include interest expense, interest income, and
interest costs and investment gains associated with benefit plans.
(2) The asbestos settlement arrangement to be incorporated into the
Pittsburgh Corning Corporation (PCC) reorganization plan, when
the reorganization plan becomes effective, will require Corning to
relinquish its equity interest in PCC, contribute its equity
interest in Pittsburgh Corning Europe (PCE), and 25 million
shares of Corning common stock to a trust. Corning also agreed
to make cash payments over the six years from the effective
date of the settlement and to assign certain insurance policy
proceeds from its primary insurance and a portion of its
excess insurance at the time of the settlement. The asbestos
liability requires adjustment to fair value based upon movements
in Corning's common stock price prior to contribution of the
shares to the trust as well as change in the estimated fair value
of the other components of the settlement offer. In the first
quarter of 2006 and 2005, Corning recorded a charge of $182
million and a credit of $16 million, respectively, to reflect the
movement in Corning's common stock price in each year and charges
of $3 million and $4 million, respectively, to reflect changes in
the estimated fair value of other components of the settlement
offer.
(3) Other corporate items include the tax impact of the unallocated
amounts and, in the first quarter of 2005, an impairment charge
of $19 million for the other-than-tempoary decline in our
investment in Avanex below its cost basis.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Description of Restatement
The Company and its audit committee concluded, on April 21, 2006, that
the Company will restate previously issued historical financial
statements to properly account for the asbestos settlement charges
and liability and for its investment in and equity earnings of
Pittsburgh Corning Europe (PCE) from March 31, 2003, through December
31, 2005. The Company will also change the classification of
accretion on a portion of the liability to be paid in cash from
interest expense to asbestos settlement charge for the same time
period. The restatement adjustments will have no impact on
previously reported revenue, cash balances, or compliance with any
debt covenants.
On March 28, 2003, we announced that we had reached agreement with the
representatives of asbestos claimants for the settlement of all
current and future asbestos claims against us and Pittsburgh Corning
Corporation (PCC), which might arise from PCC products or operations.
The proposed settlement, when the plan becomes effective, will
require Corning to relinquish its equity interest in PCC, contribute
its equity interest in Pittsburgh Corning Europe N.V. (PCE), a Belgian
corporation, and 25 million shares of Corning common stock. Corning
also agreed to make cash payments with a value of $131 million, in
March 2003, over six years from the effective date of the settlement
and to assign insurance policy proceeds from its primary insurance
and a portion of its excess insurance at the time of the settlement.
Between March 31, 2003, and December 31, 2005, the following errors
occurred:
-- Corning's asbestos settlement charges and the related
liability for the asbestos settlement did not reflect the
estimated fair value at initial recognition or subsequent
changes in fair value, of certain components of the proposed
settlement offer. As a result, asbestos settlement charges for
the years 2005, 2004, and 2003 were understated by $13
million, $24 million, and $117 million, respectively, and for
the quarter ended March 31, 2005 were understated $6 million.
-- Corning incorrectly suspended recording equity earnings of PCE
between March 31, 2003, and December 31, 2005. As a result,
equity in earnings of associated companies for the years 2005,
2004, and 2003 was understated by $13 million, $11 million,
and $7 million, respectively, and for the quarter ended March
31, 2005 was understated $2 million.
-- Accretion on the cash portion of the asbestos settlement offer
was incorrectly recorded as interest expense resulting in both
an overstatement of interest expense and an understatement of
asbestos settlement expense for the years 2005, 2004, and
2003, by $8 million, $8 million, and $5 million, respectively,
and for the quarter ended March 31, 2005 was understated $2
million.
In the restated financial statements, the higher asbestos settlement
charges will be tax-effected in 2003 and the first half of 2004. As
Corning provided a valuation allowance on most of its deferred tax
assets in the third quarter of 2004, that quarter will reflect an
increase in the valuation allowance of $55 million for the deferred
tax assets related to the higher asbestos settlement charges.
The restatement adjustments are expected to impact Corning's reported
net income and diluted earnings per share as follows (in millions,
except per share amounts):
Year ended December 31, Three months
------------------------------ ended
2005 2004 2003 March 31, 2005
--------- --------- -------- ---------------
As reported:
Net income (loss) $ 585 $ (2,165) $ (223) $ 249
Basic earnings (loss)
per share $ 0.40 $ (1.56) $ (0.18) $ 0.18
Diluted earnings (loss)
per share $ 0.38 $ (1.56) $ (0.18) $ 0.17
As restated:
Net income (loss) $ 585 $ (2,231) $ (280) $ 250
Basic earnings (loss)
per share $ 0.40 $ (1.61) $ (0.22) $ 0.18
Diluted earnings (loss)
per share $ 0.38 $ (1.61) $ (0.22) $ 0.17
These adjustments are not expected to change previously reported basic
and diluted earnings per share for the quarters ended September 30,
2005, June 30, 2005 and March 31, 2005.
The cumulative effect of these adjustments to Corning's balance sheet
as of December 31, 2005, is expected to result in an increase in
investments in affiliated companies of $32 million, an increase to
other long-term liabilities of $154 million, an increase to
accumulated deficit of $123 million, and an increase to accumulated
other comprehensive income of $1 million.
As a result of the restatement adjustments, the Company's previously
issued consolidated financial statements, including those contained
in the following filings, should no longer be relied upon: Annual
Report on Form 10-K for the fiscal year ended December 31, 2005;
Quarterly Reports on Form 10-Q for the quarters ended September 30,
2005, June 30, 2005 and March 31, 2005.
The Company plans to file an amended Annual Report on Form 10-K for
the fiscal year ended December 31, 2005 and its Quarterly Report on
Form 10-Q for the quarter ended March 31, 2006, by May 10, 2006.
The financial information included in this earnings release has been
restated to reflect the impact of the items described above.
Corning has not yet completed its evaluation of internal controls
relating to this restatement.
2. Asbestos Settlement
As a result of the proposed asbestos settlement, any changes in the
estimated fair value of the components of the proposed settlement
agreement will be recognized in our quarterly results until the date
of the contribution to the settlement trust. In the first quarter of
2006, we recorded a charge of $185 million (pretax and after-tax)
including a mark-to-market charge of $182 million reflecting the
increase in Corning's common stock from December 31, 2005 to March
31, 2006 and a $3 million charge to adjust the estimated fair value
of certain other components of the proposed asbestos settlement.
Beginning with the first quarter of 2003, we have recorded total net
charges of $1,003 million to reflect the estimated fair value of our
asbestos liability.
3. Provision for Income Taxes
In the first quarter of 2006, we recorded a $38 million tax benefit
from the release of our valuation allowance on Germany trade taxes
due to sustained profitability of certain of our German entities.
4. Equity in Earnings of Associated Companies
In the first quarter of 2006, equity in earnings of associated
companies includes a $21 million charge (net of tax) for the
impairment of certain long-lived assets of Samsung Corning Co., Ltd.,
a South Korea-based manufacturer of glass panels and funnels for
cathode ray tube television and display monitors.
5. Weighted Average Shares Outstanding
Our weighted average shares outstanding are as follows (in millions):
Three months
Three months ended ended
March 31, December 31, 2005
-------------------- -----------------
2005 As
2006 Restated As Restated
--------- ---------- -----------------
Basic 1,541 1,411 1,524
Diluted 1,592 1,503 1,524
Dilued used for non-GAAP
measures 1,592 1,510 1,571
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
QUARTERLY SALES INFORMATION
(Unaudited; in millions)
2006 2005
------- ---------------------------------------
Q1 Q1 Q2 Q3 Q4 Total
------- ------- ------- ------- ------- -------
Display Technologies $ 547 $ 320 $ 415 $ 489 $ 518 $1,742
Telecommunications
Fiber and cable 205 212 213 216 193 834
Hardware and
equipment 192 215 202 182 190 789
------- ------- ------- ------- ------- -------
397 427 415 398 383 1,623
Environmental
Technologies
Automotive 121 127 125 121 109 482
Diesel 34 21 21 23 33 98
------- ------- ------- ------- ------- -------
155 148 146 144 142 580
Life Sciences 72 74 75 70 63 282
Other 91 81 90 87 94 352
------- ------- ------- ------- ------- -------
Total $1,262 $1,050 $1,141 $1,188 $1,200 $4,579
======= ======= ======= ======= ======= =======
The above supplemental information is intended to facilitate analysis
of Corning's businesses.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Three Months Ended March 31, 2006
(Unaudited; amounts in millions, except per share amounts)
----------------------------------------------------------------------
Corning's net income and earnings per share (EPS) excluding special
items for the first quarter of 2006 are non-GAAP financial measures
within the meaning of Regulation G of the Securities and Exchange
Commission. Non-GAAP financial measures are not in accordance with,
or an alternative to, generally accepted accounting principles
(GAAP). The company believes presenting non-GAAP net income and EPS
is helpful to analyze financial performance without the impact of
unusual items that may obscure trends in the company's underlying
performance. A detailed reconciliation is provided below outlining
the differences between these non-GAAP measures and the directly
related GAAP measures.
----------------------------------------------------------------------
Income
Per Before Net
Share Income Taxes Income
--------- ------------- ---------
Earnings per share (EPS) and net
income, excluding special items $ 0.27 $ 241 $ 425
Special items:
Asbestos settlement (a) (0.12) (185) (185)
Provision for income taxes (b) 0.02 38
Equity in earnings of
associated companies (c) (0.01) (21)
--------- ------- -------
Total EPS and net income $ 0.16 $ 56 $ 257
========= ======= =======
(a) As a result of Corning's proposed asbestos settlement, any changes
in the estimated fair value of the components of the proposed
settlement agreement will be recognized in our quarterly results
until the date of the contribution to the settlement trust. In
the first quarter of 2006, Corning recorded a charge of $185
million (before- and after-tax) including $182 million for the
change in its common stock price of $26.92 at March 31, 2006,
compared to $19.66 at December 31, 2005 and $3 million for the
change in estimated fair value of certain other components of the
proposed asbestos settlement liability.
(b) Amount reflects a $38 million tax benefit from the release of our
valuation allowance on certain deferred tax assets in Germany.
(c) Amount reflects a charge of $21 million to reflect Corning's share
of an impairment charge at Samsung Corning Co., Ltd., a South
Korea-based manufacturer of glass panels and funnels for cathode
ray tube television and display monitors.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Three Months Ended December 31, 2005, As Restated
(Unaudited; amounts in millions, except per share amounts)
----------------------------------------------------------------------
Corning's net income and earnings per share (EPS) excluding special
items for the fourth quarter of 2005 are non-GAAP financial measures
within the meaning of Regulation G of the Securities and Exchange
Commission. Non-GAAP financial measures are not in accordance with, or
an alternative to, generally accepted accounting principles (GAAP).
The company believes presenting non-GAAP net income and EPS is helpful
to analyze financial performance without the impact of unusual items
that may obscure trends in the company's underlying performance. A
detailed reconciliation is provided below outlining the differences
between these non-GAAP measures and the directly related GAAP measure.
----------------------------------------------------------------------
Income
Before Net
Per Income Income
Share Taxes (Loss)
-------- --------- --------
Earnings per share (EPS) and net income,
excluding special items $ 0.22 $ 198 $ 344
Special items:
Restructuring, impairment and other
(charges) and credits (a) 0.05 84 84
Asbestos settlement (b) (0.01) (14) (14)
Loss on repurchases and retirement of
debt, net (c) (4) (4)
Provision for taxes (d) (0.28) (443)
-------- ------- -------
Total EPS and net income (loss) $ (0.02) $ 264 $ (33)
======== ======= =======
(a) Corning recorded a gain of $84 million (before- and after-tax)
for the reversal of the cumulative translation account of a
wholly-owned foreign subsidiary that was substantially
liquidated.
(b) As a result of Corning's proposed asbestos settlement, any
changes in the estimated fair value of the components of the
proposed settlement agreement will be recognized in our
quarterly results until the date of the contribution to the
settlement trust. In the fourth quarter of 2005, Corning
recorded a charge of $14 million (before- and after-tax),
including $8 million for the change in its common stock price of
$19.66 at December 31, 2005 compared to $19.33 the common stock
price at September 30, 2005 and $6 million for the change in
estimated fair value of certain other components of the proposed
asbestos settlement liability.
(c) Corning recorded a loss of $4 million (before- and after-tax) for
the cash redemption of $277 million principal amount of zero-
coupon convertible debentures.
(d) Amount reflects a net $443 million charge to tax expense in 2005
which was primarily to increase the valuation allowance against
deferred tax assets resulting from our conclusion that the sale
of an appreciated asset no longer met the criteria for a viable
tax planning strategy.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Three Months and Year Ended March 31, 2006
(Unaudited; amounts in millions)
----------------------------------------------------------------------
Corning's free cash flow financial measures for the three months ended
March 31, 2006 and December 31, 2005 are non-GAAP financial measures
within the meaning of Regulation G of the Securities and Exchange
Commission. Non-GAAP financial measures are not in accordance with,
or an alternative to, generally accepted accounting principles
(GAAP). The company believes presenting non-GAAP financial measures
is helpful to analyze financial performance without the impact of
unusual items that may obscure trends in the company's underlying
performance. A detailed reconciliation is provided below outlining
the differences between these non-GAAP measures and the directly
related GAAP measures.
----------------------------------------------------------------------
Three months ended Three months ended
March 31, 2006 December 31, 2005
------------------ ------------------
Operating cash flow $ 181 $ 659
Less: Investing cash flow (480) (516)
Plus: Short-term investments -
acquisitions 858 355
Less: Short-term investments -
liquidations (735) (289)
--------- -----------
Free cash flow $ (176) $ 209
========= ===========
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Three Months Ended March 31, 2005, As Restated
(Unaudited; amounts in millions, except per share amounts)
----------------------------------------------------------------------
Corning's net income and earnings per share (EPS) excluding special
items for the first quarter of 2005 are non-GAAP financial measures
within the meaning of Regulation G of the Securities and Exchange
Commission. Non-GAAP financial measures are not in accordance with,
or an alternative to, generally accepted accounting principles
(GAAP). The company believes presenting non-GAAP net income and EPS
is helpful to analyze financial performance without the impact of
unusual items that may obscure trends in the company's underlying
performance. A detailed reconciliation is provided below outlining
the differences between these non-GAAP measures and the directly
related GAAP measure.
----------------------------------------------------------------------
Income
Before
Per Income Net
Share Taxes Income
-------- -------- --------
Earnings per share (EPS) and net income,
excluding special items $ 0.17 $ 108 $ 257
Special items:
Restructuring, impairment and other
(charges) and credits (a) (0.01) (19) (19)
Asbestos settlement (b) 0.01 12 12
-------- ------- -------
Total EPS and net income $ 0.17 $ 101 $ 250
======== ======= =======
(a) In the first quarter of 2005, Corning recorded an impairment
charge of $19 million for an other than temporary decline in the
fair value of its investment in Avanex Corporation (Avanex). At
March 31, 2005, shares of Avanex were trading at $1.30 per share
compared to Corning's average cost basis of $2.40 per share.
Corning believes it will not recover its cost basis in Avanex
shares given the significant decline in its stock price.
(b) As part of Corning's asbestos settlement arrangement to be
incorporated into the Pittsburgh Corning Corporation
reorganization plan, Corning will contribute, if the
reorganization plan becomes effective, 25 million shares of
Corning common stock to a trust. This portion of the asbestos
liability requires quarterly adjustment based upon movements in
Corning's common stock price prior to contribution of the shares
to the trust. In the first quarter of 2005, Corning recorded a
credit of $16 million for the change in its common stock price
of $11.13 at March 31, 2005 offset by $4 million for the change
in estimated fair value of certain other components of the
proposed asbestos settlement liability.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Three Months Ended June 30, 2006
(Unaudited; amounts in millions, except per share amounts)
----------------------------------------------------------------------
Corning's earnings per share (EPS) excluding special items for the
second quarter of 2006 is a non-GAAP financial measure within the
meaning of Regulation G of the Securities and Exchange Commission.
Non-GAAP financial measures are not in accordance with, or an
alternative to, generally accepted accounting principles (GAAP). The
company believes presenting non-GAAP EPS is helpful to analyze
financial performance without the impact of unusual items that may
obscure trends in the company's underlying performance. A detailed
reconciliation is provided below outlining the differences between
this non-GAAP measure and the directly related GAAP measure.
----------------------------------------------------------------------
Range
-----------------
Guidance: EPS excluding special items $ 0.24 $ 0.26
Special items:
Restructuring, impairment and other (charges)
and credits (a)
Asbestos settlement (b)
------ -------
Earnings per share
----------------------------------------------------------------------
This schedule will be updated as additional announcements occur.
----------------------------------------------------------------------
(a) From time to time, Corning may need to make adjustments to
estimates used in the determination of prior year restructuring
and impairment charges, which could result in a gain or loss
during the quarter.
(b) As part of Corning's asbestos settlement arrangement to be
incorporated into the Pittsburgh Corning Corporation
reorganization plan, Corning will contribute, when the
reorganization plan becomes effective, 25 million shares of
Corning common stock to a trust. The common stock will be
contributed to the trust, after the plan has been approved by the
asbestos claimants and bankruptcy court. The portion of the
asbestos liability to be settled in common stock requires
adjustment each quarter based upon movements in Corning's common
stock price prior to contribution of the shares to the trust. In
the second quarter of 2006, Corning will record a charge or
credit for the change in its common stock price as of June 30,
2006 compared to $26.92, the common stock price at March 31,
2006. In addition, Corning will record an adjustment to the
asbestos liability to reflect the change in fair value of any of
the other components of the proposed asbestos settlement.
Please note that the company may pursue other financing, restructuring
and divestiture activities at any time in the future, and that the
potential impact of these events is not included within Corning's
first quarter 2006 guidance.
This schedule contains forward looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Such
forward looking statements are based on current expectations and
involve certain risks and uncertainties. Actual results may differ
from those projected in the forward looking statements. Additional
information concerning factors that could cause actual results to
materially differ from those in the forward looking statements is
contained in the Securities and Exchange Commission filings of this
Company.
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