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) September 20, 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 2.05. Costs Associated with Exit or Disposal Activities
On September 20, 2005, Corning Incorporated management approved a restructuring
plan within its Telecommunications segment to continue to reduce costs in this
segment. As a result, Corning expects to record a restructuring charge of about
$30 million in the third quarter, which is comprised of cash severance costs.
Additional expenses, not included in this estimate, related to relocating
manufacturing assets, accelerated depreciation, and shutdown activities are not
expected to be material and will be expensed as incurred in future periods. See
also Item 2.06.
Item 2.06. Material Impairments
Corning learned that Samsung Corning Co., Ltd. (Samsung Corning), a 50-percent
owned equity company that manufactures cathode ray tube (CRT) glass panels and
funnels for monitors and conventional televisions, concluded that there was an
event of impairment related to its CRT glass business. This impairment is
triggered by the continued but accelerated decline in this business. More
specifically, the strong growth in the liquid crystal display (LCD) glass market
caused Samsung Corning in September to revise its outlook for the CRT glass
market prospectively, which will negatively impact its future operating results.
Upon further analysis, Samsung Corning management concluded that impairment
charges will be necessary for certain manufacturing assets. Samsung Corning
management also concluded that certain severance and exit actions will be
necessary. We expect Samsung Corning to incur impairment and other charges of at
least $200 to $300 million, which will reduce Corning's equity earnings by at
least $100 to $150 million in the third and fourth quarters. None of the charges
are expected to result in cash expenditures by Corning.
After the charges described above, Corning's investment in Samsung Corning will
approximate $200 million to $250 million. Corning also is evaluating the need to
separately impair this remaining investment in Samsung Corning.
Item 7.01. Regulation FD Disclosure
On September 21, 2005, Corning Incorporated issued a press release concerning
reaffirmed guidance for the quarter ended September 30, 2005. A copy of the
press release is furnished as Exhibit 99 and is incorporated herein by
reference.
The Exhibit and information in Item 7.01 of this report shall not be deemed to
be "filed" for purposes of Section 18 of the Securities and 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.
Item 9.01. Financial Statements and Exhibits
(d) Exhibit
99 Press Release dated September 21, 2005, issued by Corning Incorporated.
SIGNATURES
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 thereunto duly authorized.
CORNING INCORPORATED
Registrant
Date: September 21, 2005 By /s/ KATHERINE A. ASBECK
------------------------------------
Katherine A. Asbeck
Senior Vice President and Controller
Exhibit 99
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FOR RELEASE -- SEPTEMBER 21, 2005
Media Relations Contact: Investor Relations Contact:
M. Elizabeth Dann Kenneth C. Sofio
(607) 974-4989 (607) 974-7705
dannme@corning.com sofiokc@corning.com
Corning CFO to Speak at San Francisco Investor Conferences
Company to reaffirm third-quarter guidance; update display glass and optical
fiber volume guidance
CORNING, N.Y. -- Corning Incorporated (NYSE: GLW) Vice Chairman and Chief
Financial Officer James B. Flaws will discuss the company's growth opportunities
during two conferences taking place in San Francisco. The two conferences are
the Bank of America 35th Annual Investment Conference, which takes place today,
Sept. 21, and the USDC Display Technology and Supply Chain Investment Conference
to be held tomorrow, Sept. 22. Flaws will reaffirm the company's third-quarter
guidance excluding special items; provide adjustments to third-quarter volume
forecasts for display and optical fiber; discuss potential special items
expected in the third quarter; and remark on the recent upgrade of Corning's
debt rating.
"We continue to expect third-quarter sales for the company to be in the range of
$1.14 billion to $1.19 billion and earnings per share (EPS) to be in the range
of $0.20 to $0.22, excluding special items," Flaws will say at the Bank of
America conference. This EPS estimate is a non-GAAP financial measure and is
reconciled in an attachment to this release and on the company's investor
relations Web site.
"As we near the close of the third quarter," Flaws will go on to say, "we are
pleased to report that we have narrowed the range on our third-quarter volume
forecast for our Display Technologies segment to the upper end of previous
guidance. Our total segment volume, which includes both our wholly owned
business and Samsung Corning Precision Glass Co., Ltd., is now expected to grow
between 15 percent and 20 percent sequentially in the third quarter."
He will also provide an update on optical fiber volume guidance for the third
quarter. "We now believe that sequential fiber volume will be up 15 percent to
20 percent in the third quarter, whereas our original guidance was for optical
fiber volume to be flat to down 5 percent. This change is based on strengthened
fiber demand in North America," Flaws will say. The company does not expect this
change to impact its previously disclosed third-quarter guidance for the
Telecommunications segment of revenues flat to down 5 percent.
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Corning CFO to Speak at San Francisco Investor Conferences
Page Two
Flaws will remind investors that the continuing strong growth in the liquid
crystal display (LCD) market, primarily for monitors, will negatively impact the
results of Samsung Corning Co., Ltd., the company's 50-percent equity venture
that makes glass panels and funnels for monitors and conventional televisions.
"We expect that Samsung Corning will incur impairment and restructuring charges
that will reduce Corning's equity earnings by at least $100 million to $150
million in the third and fourth quarters," he will say.
Flaws also will say that the company is evaluating the need to separately impair
its investment in Samsung Corning, which will approximate $200 million to $250
million after the charges taken by Samsung Corning. In addition, Corning will
record a restructuring charge of about $30 million in the third quarter related
to continued cost reduction initiatives in its Telecommunications segment.
Flaws will also remark on the progress the company has made reducing debt levels
and generating free cash flow. "A year ago we set an objective to restore
Corning's credit rating to investment grade at all three agencies. We achieved
this objective yesterday when Moody's Investor Service upgraded our long-term
debt rating to Baa3 with a stable outlook," he will say. In April of 2005,
Standard & Poor's and Fitch both restored Corning's long-term debt rating to
investment grade.
At the USDC Display Technology and Supply Chain Investment Conference, Flaws
will discuss Corning's view of the LCD market, with an emphasis on the role that
LCD glass plays in this growth opportunity. He will reaffirm the company's
previously disclosed expectations regarding LCD market growth.
Corning's presentations to investors at the Bank of America 35th Annual
Investment Conference and the USDC Display Technology and Supply Chain
Investment Conference will be available via webcast through the investor
relations events calendar on Corning's Web site at
www.corning.com/investor_relations.
Presentation of Information in this News Release
Non-GAAP financial measures are not in accordance with, or an alternative to,
GAAP. Corning's non-GAAP EPS 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 resulting from the impairment of equity
or cost method investments and gains or losses recognized in equity earnings
from restructuring, impairment or other charges or credits taken by equity
method companies. The company believes presenting a non-GAAP EPS 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 accompanies this news release.
(more)
Corning CFO to Speak at San Francisco Investor Conferences
Page Three
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
Three Months Ended September 30, 2005
(Unaudited; amounts in millions, except per share amounts)
--------------------------------------------------------------------------------
Corning Incorporated's (Corning) earnings per share (EPS) excluding special
items for the third quarter of 2005 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 $ 0.20 $ 0.22
Special items:
Restructuring, impairment and other (charges)
and credits (a)
Asbestos settlement (b)
(Loss) gain on repurchases and retirements of
debt, net (c)
Equity in earnings of associated companies (d)
------ -------
EPS
--------------------------------------------------------------------------------
This schedule will be updated as additional announcements occur.
--------------------------------------------------------------------------------
(a) From time to time, Corning may record restructuring and impairment charges,
including adjustments to prior estimates for such charges, which could
result in a gain or loss during the quarter. In the third quarter of 2005,
Corning will record a restructuring charge of about $30 million related to
continued cost reduction initiatives in the Telecommunications segment.
(b) As part of Corning's asbestos settlement arrangement to be incorporated
into the Pittsburgh Corning Corporation plan of reorganization, 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 adjustment based upon movements in Corning's common
stock price prior to contribution of the shares to the trust. In the third
quarter of 2005, Corning will record a charge or credit for the change in
its common stock price as of September 30, 2005 compared to $16.62, the
common stock price at June 30, 2005.
(c) From time to time, Corning may repurchase or retire debt, which could
result in a gain or loss during the quarter.
(d) As the monitor and conventional television glass markets will be negatively
impacted by strong growth in the liquid crystal display (LCD) glass market,
it is reasonably possible that Samsung Corning Co., Ltd. (our 50% equity
method investment that makes cathode ray tube (CRT) glass panels and
funnels for monitors and conventional televisions) may incur additional
restructuring or impairment charges in the future. In the third and fourth
quarters of 2005, Samsung Corning Co., Ltd. will incur impairment and
restructuring charges that will reduce Corning's equity earnings by the
range of at least $100 million to $150 million.
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 third quarter 2005 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.