Microsoft Word 10.0.4219; UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported) April 28, 2005
CORNING INCORPORATED
(Exact name of registrant as specified in its charter)
New York 1-3247 16-0393470
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
One Riverfront Plaza, Corning, New York 14831
(Address of principal executive offices) (Zip Code)
(607) 974-9000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 7.01. Regulation FD Disclosure.
------------------------
On April 28, 2005, Corning Incorporated issued a press release relating to
its annual meeting of shareholders which is attached hereto as Exhibit 99.
The information in this report, being furnished pursuant to Item 7.01 of
Form 8-K, shall not be deemed to be "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise
subject to the liabilities of that Section, and is not incorporated by reference
in any filing under the Securities Act of 1933, as amended, or the Exchange Act,
except as expressly set forth by specific reference in such filing.
Exhibit
99. Press Release dated April 28, 2005, issued by Corning Incorporated.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: April 28, 2005
CORNING INCORPORATED
By: /s/ WILLIAM D. EGGERS
-------------------------------
William D. Eggers
Senior Vice President and General Counsel
INDEX TO EXHIBIT
Exhibit
99. Press Release dated April 28, 2005, issued by Corning Incorporated.
Exhibit 99
FOR RELEASE -- APRIL 28, 2005
Media Relations Contact: Investor Relations Contact:
Monica L. Ott Kenneth C. Sofio
(607) 974-8769 (607) 974-7705
ottml@corning.com sofiokc@corning.com
Corning Chairman: Company is Growing Through Innovation, "The Way We
Do It Best"
Weeks named chief executive officer
CORNING, N.Y. -- Corning Incorporated's (NYSE:GLW) Chairman and Chief Executive
Officer James R. Houghton, today told shareholders that the company has
demonstrated a multi-year pattern of progress toward its financial goals
resulting in a renewed sense of pride and confidence.
Reflecting on the company's accomplishments since he returned as chairman and
CEO in 2002, Houghton said, "Three years ago, I told you we would succeed and we
did. We continued on our path, clearly defining our priorities, focusing
intently on what we do best--applying generations of knowledge of materials and
processes toward remarkable, life changing inventions. Three years later, our
message is not about losses, but about profits. Three years later, we can talk
not about cutbacks, but about real growth, growth the way we do it best, growth
through innovation."
Houghton made the remarks to more than 500 shareholders assembled for the
company's annual meeting in Corning, N.Y. He reminded them that sales are up and
debt is down. He said the balance sheet gets stronger with each passing quarter
and that the company continues to innovate. "We've been able to make successes
like these because we have focused relentlessly on a set of very basic
priorities," Houghton said. "One, to protect our financial health; two, to
improve our profitability; three, to invest in our future; and four, to do all
of these things while living our Values. These priorities have been the
foundation of our progress over the past three years and our results have been
excellent," Houghton added.
Financial Health and Improving Profitability
Houghton pointed out that the company's balance sheet has become stronger over
the past three years. He said the company has consistently reduced its debt and
plans to further reduce it to below $2 billion by the end of the year. He also
told shareholders that Corning's liquidity remains strong with $1.9 billion in
cash and short-term investments at the end of last year. "With all these
encouraging factors in place, I am pleased to say that just yesterday two of the
three rating agencies have upgraded our credit to BBB-, an investment-grade
rating," Houghton added. "This was one of our key priorities for this year and
is recognition from the financial community that we have delivered on our goal
to strengthen the balance sheet."
Corning Chairman: Company is Growing Through Innovation,
"The Way We Do It Best"
Page Two
Regarding profitability, Houghton pointed to the fact that the company improved
net profit before special charges by $500 million in each of the past two years
and that the company was well on its way to achieving profitability targets for
2005. This improvement in net profit before special charges 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 attachments to this news
release. "We just announced first-quarter results that were significantly better
than expected," Houghton said. "And we are confident in our prospects and
ability to succeed."
Investing in the Future
Houghton reminded shareholders of the company's continued investment in research
and development for near-term and long-term growth opportunities. "We continue
to invest 10 percent of our revenues into research and development," he said.
"Our world-class researchers are working not only on innovations for today's
opportunities; they are truly creating the next wave of growth."
He said Corning's technology investments are helping to maintain and secure
Corning's leadership position for its growth businesses; liquid crystal display
glass for notebook computers, flat-panel computer screens and LCD televisions;
for the fiber to the premises market; and for diesel emissions control.
Weeks Named CEO
Houghton also recognized Wendell P. Weeks, 45, who today succeeds him as chief
executive officer. The company had announced the transition plan in January.
Houghton told shareholders that Weeks, "has led some of our most significant
product development and innovation initiatives over the years...and has the
respect and full support of the board, the rest of the Management Committee, and
our employees around the world."
Houghton also recognized Peter F. Volanakis, 49, who succeeds Weeks as chief
operating officer.
Other Business
In other business during the Annual Meeting, shareholders elected the following
directors to three-year terms: John Seely Brown, 64, retired chief scientist for
Xerox Corporation; Gordon Gund, 65, chairman and chief executive officer of Gund
Investment Corporation; John M. Hennessy, 68, senior advisor to Credit Suisse
First Boston; and H. Onno Ruding, 65, retired vice chairman of Citicorp and
Citibank, N.A.
Corning Chairman: Company is Growing Through Innovation, "The Way We
Do It Best"
Page Three
Shareholders approved the 2005 Employee Equity Participation Program, which is
effective for fiscal 2005 and expires on May 1, 2010. This program enables
Corning to continue to make use of restricted stock and performance shares, thus
providing flexibility in the designing of its performance based compensation
programs.
In addition, shareholders ratified the Corning Board audit committee's
appointment of PricewaterhouseCoopers LLP as independent auditors for 2005.
Webcast Information
The company hosted a live audio webcast of the 2005 annual meeting of
shareholders in Corning, N.Y., from 11 a.m. to 12:15 p.m. EDT, April 28, 2005.
To access the webcast archive, go to http://www.corning.com/investor_relations
and click on the webcast icon. No password or registration is required. The
webcast will be archived on the Web site for one year following the broadcast.
Presentation of Information
Non-GAAP financial measures are not in accordance with, or an alternative to,
GAAP. Corning's non-GAAP net profit measure excludes restructuring, 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 or credits arising from
adjustments to the valuation allowance against deferred tax assets, equity
method charges resulting from impairments of equity method investments or
restructuring, impairment or other charges taken by equity method companies, and
gains from discontinued operations. The company believes presenting a non-GAAP
net profit measure is helpful to analyze financial performance without the
impact of unusual items that may obscure trends in the company's underlying
performance. This non-GAAP measure is reconciled on the company's Web site at
www.corning.com/investor_relations and accompany this news release.
Corning Chairman: Company is Growing Through Innovation, "The Way We
Do It Best"
Page Four
About Corning Incorporated
Corning Incorporated (www.corning.com) is a diversified technology company that
concentrates its efforts on high-impact growth opportunities. Corning combines
its expertise in specialty glass, ceramic materials, polymers and the
manipulation 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, environmental,
semiconductor, and life sciences industries.
Forward-Looking and Cautionary Statements
This press release contains forward-looking statements 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, import duties
and currency fluctuations; product demand and industry capacity; competitive
products and pricing; manufacturing efficiencies; cost reductions; availability
and costs of critical components and materials; new product development and
commercialization; order activity and demand from major customers; capital
spending by larger customers in the liquid crystal display industry and other
businesses; changes in the mix of sales between premium and non-premium
products; facility expansions and new plant start-up costs; possible disruption
in commercial activities due to terrorist activity, armed conflict, political
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 activities; the level of excess or
obsolete inventory; 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 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
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Year Ended December 31, 2004
(Unaudited; amounts in millions)
-------------------------------------------------------------------------------
Corning's comment, "...the company improved net profit before special charges by
$500 million for the past two years ..." 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 a
non-GAAP improvement in net income 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.
-------------------------------------------------------------------------------
Net Income Improvement
For the years ended December 31, 2004 2003
------------------------------------
2004 2003 2002 vs. 2003 vs. 2002
-------- --------- -------- -------- --------
Net income, excluding special items $ 674 $ 128 $ (392) $ 546 $ 520
========= =========
Special items:
Restructuring, impairment and other (charges)
and credits (a) (1,802) (26) (1,462)
Asbestos settlement (b) (30) (263)
(Loss) gain on repurchases and retirement of
debt, net (c) (34) 12 108
(Provision) benefit for income taxes (d) (937)
Equity in earnings of associated companies,
net of impairments (e) (56) (74) (34)
Income from discontinued operations (f) 20 478
--------- --------- --------
Net loss $ (2,165) $ (223) $ (1,302)
========= ========= ========
2004 Special Items:
(a) Corning recorded charges of $1.789 billion ($1.802 billion after-tax and
minority interest) primarily related to the impairment of goodwill and
fixed assets in the Telecommunications segment.
(b) As part of Corning's asbestos settlement arrangement to be incorporated
into the Pittsburgh Corning Corporation (PCC) reorganization plan, Corning
will contribute, when 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. For
2004, Corning recorded a charge of $33 million ($30 million after-tax) for
the change in its common stock price of $11.77 at December 31, 2004
compared to $10.43, the common stock price at December 31, 2003.
(c) During 2004, Corning retired a significant portion of long-term debt,
resulting in a loss of $36 million ($34 million after-tax).
(d) In the third quarter of 2004, Corning increased income tax expense by $937
million as a result of the company's decision to provide a valuation
allowance against a significant portion of its deferred tax assets.
(e) This amount reflects charges of $35 million for impairments of certain
non-strategic equity method investments in Corning's Telecommunications
segment and $21 million related to restructuring actions and bankruptcy
related charges recorded by Dow Corning Corporation.
(f) This gain relates to the final settlement of escrowed proceeds from the
2002 sale of Corning's precision lens business to 3M Company.
2003 Special Items:
(a) Corning recorded net charges of $111 million ($26 million after-tax) for
our decision to shutdown Corning Asahi Video Products Company, exit the
photonics technologies business within our Telecommunications segment, and
shutdown two of our Specialty Materials manufacturing facilities. The
charges for these actions were partially offset by credits to prior
periods' restructuring plans, most notably for our decision not to exit two
cabling sites previously marked for shutdown in 2002.
(b) This charge represents recording the initial liability based on the terms
of the PCC settlement agreement ($298 million) plus the charge to reflect
movements in Corning's common stock price from the settlement arrangement
date and December 31, 2003 ($115 million).
(c) During 2003, Corning retired a significant portion of long-term debt,
resulting in a gain of $19 million ($12 million after-tax).
(e) This amount primarily reflects our portion of asset impairment charges
recorded by our equity method investment, Samsung Corning Co., Ltd.
2002 Special Items:
(a) Corning recorded total net charges of $2.08 billion ($1.462 billion
after-tax and minority interest) related to the following significant
actions: restructuring charges of $1.271 billion ($929 million after-tax
and minority interest) for the closure of facilities, workforce reductions
and abandonment of certain construction projects, mostly in our
Telecommunications segment; $400 million ($294 million after-tax) for the
impairment of goodwill in our Telecommunications segment; and $409 million
($239 million after-tax) for the impairment of assets of our photonic
technologies and conventional video components businesses.
(c) During 2002, Corning retired a significant portion of long-term debt
resulting in a gain of $176 million ($108 million after-tax).
(e) This amount reflects charges for impairments of certain equity method
investments in Corning's Telecommunications segment.
(f) On December 13, 2002, Corning completed the sale of our precision lens
business to 3M Company for approximately $800 million in cash and recorded
a gain on the sale of $652 million ($415 million after-tax) included in
income from discontinued operations. The remaining $63 million, net of tax,
of income from discontinued operations represents the 2002 operating
results of the precision lens business prior to the sale to 3M Company.