Corning (GLW) 10-Q 2 Nov 09 2009 Q3 Quarterly report Financial data

Consolidated Balance Sheets

Consolidated Balance Sheets (USD $)
In Millions	Sep. 30, 2009	Dec. 31, 2008
Assets
Cash and cash equivalents	$1,962	$1,873
Short-term investments, at fair value	968	943
Total cash, cash equivalents and short-term investments	2,930	2,816
Trade accounts receivable, net of doubtful accounts and allowances - $20 and $20	835	512
Inventories	618	798
Deferred income taxes	126	158
Other current assets	338	335
Total current assets	4,847	4,619
Investments	3,818	3,056
Property, net of accumulated depreciation - $5,598 and $5,070	8,180	8,199
Goodwill and other intangible assets, net	680	305
Deferred income taxes	3,075	2,932
Other assets	147	145
Total Assets	20,747	19,256
Liabilities and Equity
Current portion of long-term debt	75	78
Accounts payable	470	846
Other accrued liabilities	975	1,128
Total current liabilities	1,520	2,052
Long-term debt	1,945	1,527
Postretirement benefits other than pensions	768	784
Other liabilities	1,496	1,402
Total liabilities	5,729	5,765
Shareholders' equity:
Common Stock - Par value $0.50 per share; Shares authorized: 3.8 billion; Shares issued: 1,614 million and 1,609 million	807	804
Additional paid-in capital	12,658	12,502
Retained earnings	2,974	1,940
Treasury stock, at cost; Shares held: 64 million and 61 million	(1,206)	(1,160)
Accumulated other comprehensive loss	(266)	(643)
Total Corning Incorporated shareholders' equity	14,967	13,443
Noncontrolling interests	51	48
Total equity	15,018	13,491
Total Liabilities and Equity	$20,747	$19,256

Consolidated Balance Sheet (Par

Consolidated Balance Sheet (Parenthetical) (USD $)
In Millions, except Per Share data	Sep. 30, 2009	Dec. 31, 2008
Consolidated Balance Sheet (Parenthetical) [Abstract]
Allowance for doubtful accounts and allowances	$20	$20
Accumulated depreciation	$5,598	$5,070
Common Stock, Par value	0.5	0.5
Common Stock, Shares authorized	3,800	3,800
Common Stock, Shares issued	1,614	1,609
Treasury Stock, at cost, Shares held	64	61

Consolidated Statements of Inco

Consolidated Statements of Income (USD $)
In Millions, except Per Share data	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Net sales	$1,479	$1,555	$3,863	$4,864
Cost of sales	880	820	2,419	2,433
Gross margin	599	735	1,444	2,431
Operating expenses:
Selling, general and administrative expenses	219	220	637	722
Research, development and engineering expenses	131	160	418	474
Amortization of purchased intangibles	3	2	8	7
Restructuring, impairment and other charges and (credits)	10	(2)	175	(3)
Asbestos litigation charge and (credit)	6	6	15	(312)
Operating income	230	349	191	1,543
Equity in earnings of affiliated companies	418	391	974	1,070
Interest income	4	22	16	74
Interest expense	(24)	(15)	(58)	(48)
Other-than-temporary impairment (OTTI) losses:
Total OTTI losses	(11)	0	(25)	0
Portion of OTTI losses recognized in other comprehensive income (before taxes)	10	0	23	0
Net OTTI losses recognized in earnings	(1)	0	(2)	0
Other income (expense), net	48	(30)	109	11
Income before income taxes	675	717	1,230	2,650
(Provision) benefit for income taxes	(32)	51	38	2,358
Net income attributable to Corning Incorporated	$643	$768	$1,268	$5,008
Earnings per common share attributable to Corning Incorporated:
Basic	0.41	0.49	0.82	3.2
Diluted	0.41	0.49	0.81	3.15
Dividends declared per common share	0.05	0.05	0.15	0.15

Consolidated Statements of Chan

Consolidated Statements of Changes in Equity (USD $)
In Millions	9 Months Ended Sep. 30, 2009
Beginning balance	$13,491
Net income	1,274
Foreign currency translation adjustment	313
Amortized postretirement benefit plan losses and prior service costs	(1)
Net unrealized gain on investments without credit losses	36
Unrealized gain on investments with credit losses	3
Unrealized gain on cash flow hedges	25
Reclassification adjustments on cash flow hedges	1
Total comprehensive income	1,651
Shares issued to benefit plans and for option exercises	122
Dividends on shares	(234)
Other, net	(12)
Ending balance	15,018
Additional paid-in capital [Member]
Beginning balance	12,502
Shares issued to benefit plans and for option exercises	155
Other, net	1
Ending balance	12,658
Common stock [Member]
Beginning balance	804
Shares issued to benefit plans and for option exercises	3
Ending balance	807
Retained earnings [Member]
Beginning balance	1,940
Net income	1,268
Dividends on shares	(234)
Ending balance	2,974
Treasury stock [Member]
Beginning balance	(1,160)
Shares issued to benefit plans and for option exercises	(36)
Other, net	(10)
Ending balance	(1,206)
Accumulated other comprehensive loss [Member]
Beginning balance	(643)
Foreign currency translation adjustment	313
Amortized postretirement benefit plan losses and prior service costs	(1)
Net unrealized gain on investments without credit losses	36
Unrealized gain on investments with credit losses	3
Unrealized gain on cash flow hedges	25
Reclassification adjustments on cash flow hedges	1
Ending balance	(266)
Total Corning Incorporated shareholders' equity [Member]
Beginning balance	13,443
Net income	1,268
Foreign currency translation adjustment	313
Amortized postretirement benefit plan losses and prior service costs	(1)
Net unrealized gain on investments without credit losses	36
Unrealized gain on investments with credit losses	3
Unrealized gain on cash flow hedges	25
Reclassification adjustments on cash flow hedges	1
Total comprehensive income	1,645
Shares issued to benefit plans and for option exercises	122
Dividends on shares	(234)
Other, net	(9)
Ending balance	14,967
Noncontrolling interests [Member]
Beginning balance	48
Net income	6
Total comprehensive income	6
Other, net	(3)
Ending balance	$51

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (USD $)
In Millions	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Cash Flows from Operating Activities:
Net income	$1,268	$5,008
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	586	483
Amortization of purchased intangibles	8	7
Asbestos litigation	15	(312)
Restructuring, impairment and other charges (credits)	175	(3)
Stock compensation charges	97	104
Loss on sale of business	0	14
Undistributed earnings of affiliated companies	(535)	(600)
Deferred tax benefit	(169)	(2,532)
Restructuring payments	(71)	(10)
Customer deposits, net of (credits) issued	(207)	(202)
Employee benefit payments less than (in excess of) expense	12	(31)
Changes in certain working capital items:
Trade accounts receivable	(265)	50
Inventories	204	(129)
Other current assets	13	(71)
Accounts payable and other current liabilities, net of restructuring payments	24	(106)
Other, net	9	78
Net cash provided by operating activities	1,164	1,748
Cash Flows from Investing Activities:
Capital expenditures	(727)	(1,155)
Acquisitions of business, net of cash received	(410)	(15)
Net proceeds from sale or disposal of assets	15	17
Short-term investments - acquisitions	(876)	(1,298)
Short-term investments - liquidations	859	1,890
Net cash used in investing activities	(1,139)	(561)
Cash Flows from Financing Activities:
Net repayments of short-term borrowings and current portion of long-term debt	(84)	(20)
Proceeds from issuance of long-term debt, net	346	0
Principal payments under capital lease obligations	(10)	0
Proceeds from issuance of common stock, net	18	19
Proceeds from the exercise of stock options	8	79
Repurchase of common stock	0	(625)
Dividends paid	(234)	(235)
Other, net	3	0
Net cash provided by (used in) financing activities	47	(782)
Effect of exchange rates on cash	17	(25)
Net increase in cash and cash equivalents	89	380
Cash and cash equivalents at beginning of period	1,873	2,216
Cash and cash equivalents at end of period	$1,962	$2,596

Significant Accounting Policies

Significant Accounting Policies
	9 Months Ended Sep. 30, 2009 USD / shares
Significant Accounting Policies [Abstract]
Significant Accounting Policies [Text Block]	1. Significant Accounting Policies Basis of Presentation In these notes, the terms Corning, Company, we, us, or our mean Corning Incorporated and subsidiary companies. Effective September 30, 2009, the Financial Accounting Standards Board (FASB) established The FASB Accounting Standards Codification (ASC) as the source of authoritative accounting to be applied by nongovernmental entities in the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). Except for newly issued standards which have not been codified, references to codified literature have been updated to reflect this change. The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and in accordance with GAAP for interim financial information. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been omitted or condensed. These interim consolidated financial statements should be read in conjunction with Cornings consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2008 (2008 Form 10-K). Corning evaluates all events or transactions that occur after the balance sheet date through the date of issuance of our financial statements. For the period ending September 30, 2009, subsequent events were evaluated through November 2, 2009. The unaudited consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of operations, financial position and cash flows for the interim periods presented. All such adjustments are of a normal recurring nature. Certain amounts for prior periods have been reclassified to conform to the 2009 presentation. The results for interim periods are not necessarily indicative of results which may be expected for any other interim period or for the full year. Effective January 1, 2009, the Company adopted ASC 810-10-65-1 Transition Related to SFAS No. 160 Noncontrolling Interests in Consolidated Financial Statements. A noncontrolling interest, previously called a minority interest, is the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent. Under this standard, noncontrolling interests in subsidiaries are now included as a component of equity in the consolidated statements of financial position. This guidance also provides the required accounting treatment for changes in ownership of noncontrolling interests. As required, the related presentation and disclosure provisions have been applied retrospectively. For the three and nine months ended September 30, 2009, and 2008, net income attributable to noncontrolling interests was not significant ($6 million and $1 million for the nine months ended September 30, 2009 and 2008, respectively) and therefore, was not presented separately on the consolidated statements of income. Effective January 1, 2009, the Company changed the presentation of equity in earnings

Restructuring, Impairment and O

Restructuring, Impairment and Other Charges (Credits)
	9 Months Ended Sep. 30, 2009 USD / shares
Restructuring, Impairment and Other Charges (Credits) [Abstract]
Restructuring, Impairment and Other Charges (Credits) [Text Block]	2. Restructuring, Impairment and Other Charges (Credits) 2009 Activities In the third quarter of 2009, we recorded a charge of $10 million which was comprised of severance costs for a restructuring plan in the Environmental Technologies segment and asset disposal costs in other segments. In the first quarter of 2009, we recorded a charge of $165 million associated with a corporate-wide restructuring plan to reduce our global workforce in response to anticipated lower sales in 2009. The charge included costs for severance, special termination benefits, outplacement services, and the impact of a $30 million curtailment loss for postretirement benefits. Total cash expenditures associated with this plan are expected to be approximately $105 million with the majority of spending completed by early 2010. The following table summarizes the restructuring, impairment and other charges (credits) as of and for the nine months ended September 30, 2009 (in millions): Reserveat January1, 2009 Charges Non-Cash Settlements Cash Payments Reserveat September30, 2009 Restructuring: Employee related costs $ 17 $ 152 $ (47) $ (68) $ 54 Other charges (credits) 17 5 (3) 19 Total restructuring charges $ 34 $ 157 $ (47) $ (71) $ 73 Impairment of long-lived assets: Assets to be disposed of $ 18 Total impairment charges $ 18 Total restructuring, impairment and other charges and (credits) $ 175 The year-to-date cost of these plans for each of our reportable operating segments was as follows (in millions): Operating segment Employee- related andother costs Display Technologies $ 29 Telecommunications 15 Environmental Technologies 22 Specialty Materials 17 Life Sciences 8 Corporate and All Other 84 Total restructuring, impairment and other charges $ 175 Cash payments for employee-related costs will be substantially complete by early 2010, while payments for exit activities will be substantially complete by the end of 2011. 2008 Activities The following table summarizes the restructuring, impairment, and other charges and (credits) as of and for the nine months ended September 30, 2008 (in millions): Reserveat January1, 2008 Revisions toexisting plans Net charges/ (reversals) Cash payments Reserveat September30, 2008 Restructuring activity: Employee related costs $ 12 $ (3) $ (3) $ (7) $ 2 Other charges 22 (3) 19 Total restructuring charges $ 34 $ (3) $ (3) $ (10) $ 21

Commitments and Contingencies

Commitments and Contingencies
	9 Months Ended Sep. 30, 2009 USD / shares
Commitments and Contingencies [Abstract]
Commitments and Contingencies [Text Block]	3. Commitments and Contingencies Asbestos Litigation Pittsburgh Corning Corporation. Corning and PPG Industries, Inc. (PPG) each own 50% of the capital stock of Pittsburgh Corning Corporation (PCC). Over a period of more than two decades, PCC and several other defendants have been named in numerous lawsuits involving claims alleging personal injury from exposure to asbestos. On April 16, 2000, PCC filed for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Western District of Pennsylvania. At the time PCC filed for bankruptcy protection, there were approximately 11,800 claims pending against Corning in state court lawsuits alleging various theories of liability based on exposure to PCCs asbestos products and typically requesting monetary damages in excess of one million dollars per claim. Corning has defended those claims on the basis of the separate corporate status of PCC and the absence of any facts supporting claims of direct liability arising from PCCs asbestos products. Corning is also currently involved in approximately 10,300 other cases (approximately 38,700 claims) alleging injuries from asbestos and similar amounts of monetary damages per case. Those cases have been covered by insurance without material impact to Corning to date. As described below, several of Cornings insurance carriers have filed a legal proceeding concerning the extent of any insurance coverage for these claims. Asbestos litigation is inherently difficult, and past trends in resolving these claims may not be indicators of future outcomes. On March 28, 2003, Corning announced that it had reached agreement with the representatives of asbestos claimants for the resolution of all current and future asbestos claims against it and PCC, which might arise from PCC products or operations (the 2003 Plan). The 2003 Plan would have required Corning to relinquish its equity interest in PCC, contribute its equity interest in Pittsburgh Corning Europe N.V. (PCE), a Belgian corporation, contribute 25 million shares of Corning common stock, and pay a total of $140 million in six annual installments (present value $131 million at March 2003), beginning one year after the plans effective date, with 5.5 percent interest from June 2004. In addition, the 2003 Plan provided that Corning would assign certain insurance policy proceeds from its primary insurance and a portion of its excess insurance. On December 21, 2006, the Bankruptcy Court issued an order denying confirmation of the 2003 Plan for reasons it set out in a memorandum opinion. Several parties, including Corning, filed motions for reconsideration. These motions were argued on March 5, 2007, and the Bankruptcy Court reserved decision. On January 10, 2008, some of the parties in the proceeding advised the Bankruptcy Court that they had made substantial progress on a proposed amended plan of reorganization (the Amended PCC Plan) that resolved issues raised by the Court in denying the confirmation of the 2003 Plan and that would therefore make it unnecessary for the Bankruptcy Court to decide the motion for reconsideration. On March 27, 2008 and May 22, 2008, the parties further informed the Bankr

Debt

Debt
	9 Months Ended Sep. 30, 2009 USD / shares
Debt [Abstract]
Debt [Text Block]	4. Debt Based on borrowing rates currently available to us for loans with similar terms and maturities, the fair value of long-term debt was $2.0 billion at September 30, 2009 and $1.5 billion at December 31, 2008. Third Quarter There were no significant debt transactions in the third quarter of 2009. Second Quarter In the second quarter of 2009, we issued $250 million of 6.625% senior unsecured notes and $100 million of 7% senior unsecured notes for net proceeds of approximately $248 million and $98 million, respectively. The 6.625% notes mature on May 15, 2019 and the 7% notes mature on May 15, 2024. We may redeem these debentures at any time. First Quarter In the first quarter of 2009, we recorded the impact of a capital lease obligation associated with a manufacturing facility in our Display Technologies segment. The balance of this obligation at March 31, 2009 was $141 million and is included in our long-term debt balance. Corning repaid $72 million of debt which included the redemption of $54 million principal amount of our 6.3% notes due March 1, 2009. There were no other significant debt transactions in the first quarter of 2009. There were no significant debt transactions in the first, second, and third quarters of 2008.

Income Taxes

Income Taxes
	9 Months Ended Sep. 30, 2009 USD / shares
Income Taxes [Abstract]
Income Taxes [Text Block]	5. Income Taxes Our (provision) benefit for income taxes and the related effective income tax rates were as follows (in millions): Threemonthsended September30, Ninemonthsended September30, 2009 2008 2009 2008 (Provision) benefit for income taxes $ (32) $ 51 $ 38 $ 2,358 Effective (tax) benefit rate (4.7)% 7.1% 3.1% 89.0% For the three months ended September 30, 2009, the effective income tax rate differed from the U.S. statutory rate of 35% primarily due to the following items: Rate differences on income/ (losses) of consolidated foreign companies. The impact of equity in earnings of affiliated companies. The benefit of tax holidays and investment credits in foreign jurisdictions. The impact of discrete items, including a restructuring charge of $10 million. Refer to Note 2 (Restructuring, Impairment and Other Charges (Credits)) for additional information about Cornings restructuring charge. Discrete items decreased our effective tax rate by 2.5 percentage points. In addition to the items noted above, the tax provision for the nine months ended September 30, 2009, reflected the impact of discrete items, including a restructuring charge of $165 million. Discrete items decreased our effective rate by 7.4 percentage points. For the three months ended September 30, 2008, the effective income tax rate differed from the U.S. statutory rate of 35% primarily due to the following items: The release of $70 million of valuation allowances resulting from a change in estimate regarding 2008 U.S. taxable income. A $43 million benefit related to a favorable tax settlement with the Canadian Revenue Agency. The impact of not recording net tax expense on income generated in the U.S. The benefit of tax holidays and investment credits in foreign jurisdictions. The impact of discrete items for which no tax benefit was recorded, including $39 million of net realized losses on short-term investments and a $14 million loss on the sale of our Steuben glass business. Discrete items and the valuation allowance release decreased our effective tax rate by 15.1 percentage points. Refer to Note 7 (Available-for-Sale Investments) for additional information about net realized losses. In addition to the items noted above, the tax provision for the nine months ended September 30, 2008 reflected the impact of the release of $2.4 billion of valuation allowances attributable to a change in judgment about the realizability of certain deferred tax assets and other discrete items for which no tax expense was recorded including an asbestos settlement credit of $312 million and litigationrelated items totaling $12 million. For the nine months ended September 30, 2008, discrete items and valuation allowance releases decreased our effective tax rate by 97.7 percentage points. Refer to Note 3 (Commitments and Contingencies) for additional information about asbestos settlement litigation. As more fully described in Note 6 (Income Taxes) to the consolidated financial statements in our 2008 Form 10-K, all of our U.S. deferred tax assets had full valu

Earnings per Common Share

Earnings per Common Share
	9 Months Ended Sep. 30, 2009 USD / shares
Earnings per Common Share [Abstract]
Earnings per Common Share [Text Block]	6. Earnings per Common Share The reconciliation of the amounts used in the basic and diluted earnings per common share computations follows (in millions, except per share amounts): ThreemonthsendedSeptember30, 2009 2008 Net Income Attributable toCorning Incorporated Weighted- Average Shares Per Share Amount Net Income Attributable toCorning Incorporated Weighted- Average Shares Per Share Amount Basic earnings per common share $ 643 1,550 $ 0.41 $ 768 1,558 $ 0.49 Effect of dilutive securities: Stock options and other dilutive securities 19 20 Diluted earnings per common share $ 643 1,569 $ 0.41 $ 768 1,578 $ 0.49 NinemonthsendedSeptember30, 2009 2008 Net Income Attributable toCorning Incorporated Weighted- Average Shares Per Share Amount Net Income Attributable toCorning Incorporated Weighted- Average Shares Per Share Amount Basic earnings per common share $ 1,268 1,549 $ 0.82 $ 5,008 1,564 $ 3.20 Effect of dilutive securities: Stock options and other dilutive securities 16 28 Diluted earnings per common share $ 1,268 1,565 $ 0.81 $ 5,008 1,592 $ 3.15 The following potential common shares were excluded from the calculation of diluted earnings per common share because their inclusion would have been anti-dilutive. In addition, the following performance-based restricted stock awards have been excluded from the calculation of diluted earnings per common share because the number of shares ultimately issued is contingent on our performance against certain targets established for the performance period (in millions): Threemonthsended September30, Ninemonthsended September30, 2009 2008 2009 2008 Potential common shares excluded from the calculation of diluted earnings per share: Employee stock options and awards 50 49 60 41 Performance-based restricted stock awards 4 2 4 2 Total 54 51 64 43

Available-for-Sale Investments

Available-for-Sale Investments
	9 Months Ended Sep. 30, 2009 USD / shares
Available-for-Sale Investments [Abstract]
Available-for-Sale Investments [Text Block]	7. Available-for-Sale Investments The following is a summary of the fair value of available-for-sale investments (in millions): AmortizedCost FairValue September30, 2009 December31, 2008 September30, 2009 December31, 2008 Bonds, notes and other securities: U.S. government and agencies $ 845 $ 733 $ 847 $ 737 Asset-backed securities 6 5 Other debt securities 119 210 121 201 Total short-term investments $ 964 $ 949 $ 968 $ 943 Asset-backed securities $ 78 $ 87 $ 41 $ 40 Total long-term investments $ 78 $ 87 $ 41 $ 40 Long-term investment securities are comprised of asset-backed securities with a fair value of $41million at September 30, 2009. We do not intend to sell, nor do we believe it is more likely than not that we would be required to sell, the $78million amortized cost-basis of these asset-backed securities (which are collateralized by mortgages) before recovery of their amortized cost basis. It is possible that a significant degradation in the delinquency or foreclosure rates in the underlying assets could cause further temporary or other-than-temporary impairments in the future. The following table provides the fair value and gross unrealized losses of the Companys investments aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2009 (in millions): PeriodEndedSeptember30,2009 LessThan12Months 12MonthsorGreater Total Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Bonds, notes and other securities U.S. government and agencies $ 102 $ 102 Asset-backed securities Other debt securities 10 $ 54 64 Total short-term investments $ 112 $ 54 $ 166 Asset-backed securities $ 41 $ (37) $ 41 $ (37) Total long-term investments $ 41 $ (37) $ 41 $ (37) Gross realized gains and losses for the three and nine months ended September 30, 2009 and 2008 were as follows (in millions): Threemonthsended September30, Ninemonthsended September30, 2009 2008 2009 2008 Gross realized gains $ 1 $ 2 $ 2 $ 5 Gross realized losses $ (1) $ (41) (1) $ (5) $ (46) (1) Realized losses in the third quarter of 2008 included an other-than-temporary impairment of $26 million for securities of Lehman Brothers Holdings Inc., which filed for bankruptcy protection in mid-September 2008. Gross unrealized gains and losses included in accumulated other comprehensive income at September 30, 2009 and December 31, 2008, were as follows (in millions): September30, 2009 December31, 2008 Gross unrealized gains $ 2 Gross unrealized losses $ (37)(1) $

Inventories

Inventories
	9 Months Ended Sep. 30, 2009 USD / shares
Inventories [Abstract]
Inventories [Text Block]	8. Inventories Inventories comprise the following (in millions): September30, 2009 December31, 2008 Finished goods $ 209 $ 293 Work in process 123 197 Raw materials and accessories 109 120 Supplies and packing materials 177 188 Total inventories $ 618 $ 798

Investments

Investments
	9 Months Ended Sep. 30, 2009 USD / shares
Investments [Abstract]
Investments [Text Block]	9. Investments Investments comprise the following (in millions): Ownership Interest(1) September30, 2009 December31, 2008 Affiliated companies accounted for by the equity method Samsung Corning Precision Glass Co., Ltd. 50% $ 2,746 $ 1,965 Dow Corning Corporation 50% 846 866 All other 20%-50% 222 221 3,814 3,052 Other investments 4 4 Total $ 3,818 $ 3,056 (1) Amounts reflect Cornings direct ownership interests in the respective affiliated companies. Corning does not control any of these entities. Related party information for these investments in affiliates follows (in millions): Threemonthsended September30, Ninemonthsended September30, 2009 2008 2009 2008 Related Party Transactions: Corning sales to affiliates $ 6 $ 9 $ 27 $ 32 Corning purchases from affiliates $ 14 $ 16 $ 26 $ 38 Dividends received from affiliates $ 20 $ 191 $ 439 $ 470 Royalty income from affiliates $ 62 $ 54 $ 167 $ 148 Contractual services to affiliates $ 14 $ 14 Corning transfers of assets, at cost, to affiliates $ 12 $ 53 $ 54 $ 152 As of September 30, 2009, balances due to and due from affiliates were $3million and $139million, respectively. As of December 31, 2008, balances due to and due from affiliates were $2 million and $20 million, respectively. We have contractual agreements with several of our equity affiliates which include sales, purchasing, licensing, financing and technology agreements. Summarized results of operations for our two significant investments accounted for by the equity method follow: Samsung Corning Precision Glass Co., Ltd. (Samsung Corning Precision) Samsung Corning Precision is a South Korea-based manufacturer primarily of liquid crystal display (LCD) glass for flat panel displays. Samsung Corning Precisions results of operations follow (in millions): Threemonthsended September30, Ninemonthsended September30, 2009 2008 2009 2008 Statement of Operations: Net sales $ 1,164 $ 1,022 $ 2,989 $ 2,837 Gross profit $ 854 $ 704 $ 2,145 $ 1,955 Net income $ 632 $ 540 $ 1,592 $ 1,494 Cornings equity in earnings of Samsung Corning Precision $ 316 $ 268 $ 797 $ 737 Related Party Transactions: Corning purchases from Samsung Corning Precision $ 8 $ 11 $ 12 $ 25 Corning sales to Samsung Corning Precision $ 9 $ 7 Dividends received from Samsung Corning Precision $ 126 $ 181 $ 277 Royalty income from Samsung Corning Precision $ 62 $ 54 $ 165 $ 148 Corning transfers of machinery and equipment to Samsung Corning Pre

Acquistion

Acquistion
	9 Months Ended Sep. 30, 2009 USD / shares
Acquisition [Abstract]
Acquisition [Text Block]	10. Acquisition On September 15, 2009, Corning acquired all of the shares of Axygen Bioscience, Inc. and its subsidiaries from American Capital Ltd. for $410 million, net of $7 million cash received. Axygen is a leading manufacturer and distributor of high-quality life sciences plastic consumable labware, liquid handling products, and bench-top laboratory equipment. The purchase price of the acquisition was allocated to the net tangible and other intangible assets acquired with the remainder recorded as goodwill on the basis of fair value. The following amounts represent preliminary estimates and are subject to revision when valuations are finalized (in millions): Total current assets $ 63 Other tangible assets 49 Other intangible assets 153 Current and non-current liabilities (80) Net tangible and intangible assets $ 185 Purchase price, including cash received 417 Goodwill (1) $ 232 (1) None of the goodwill recognized is deductible for U.S. income tax purposes. The goodwill was allocated to the Life Sciences segment. Goodwill is primarily related to the value of Axygens product portfolio and distribution network and its combination with Cornings existing life science platform, as well as synergies and other intangibles that do not qualify for separate recognition. Acquisition-related costs of $4 million in the three months ended September 30, 2009 included costs for legal, accounting, valuation and other professional services and were included in selling, general and administrative expense in the Consolidated Statements of Income. Supplemental pro forma information was not provided because Axygen is not material to Cornings consolidated financial statements.

Property, Net of Accumulated De

Property, Net of Accumulated Depreciation
	9 Months Ended Sep. 30, 2009 USD / shares
Property, Net of Accumulated Depreciation [Abstract]
Property, Net of Accumulated Depreciation [Text Block]	11. Property, Net of Accumulated Depreciation Property, net follows (in millions): September30, 2009 December31, 2008 Land $ 101 $ 71 Buildings 3,442 2,906 Equipment 9,087 8,364 Construction in progress 1,148 1,928 13,778 13,269 Accumulated depreciation (5,598) (5,070) Total $ 8,180 $ 8,199 In the three months ended September 30, 2009 and 2008, interest costs capitalized as part of property, net, were $6.3 million and $6.9 million, respectively. In the nine months ended September 30, 2009 and 2008, interest costs capitalized as part of property, net, were $24 million and $20 million, respectively. Manufacturing equipment includes certain components of production equipment that are constructed of precious metals. At September 30, 2009 and December 31, 2008, the recorded value of precious metals totaled $1.8 billion. Depletion expense for precious metals in the three months ended September 30, 2009 and 2008 totaled $4 million in both years. Depletion expense in the nine months ended September 30, 2009 and 2008 totaled $7 million and $10 million, respectively.

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets
	9 Months Ended Sep. 30, 2009 USD / shares
Goodwill and Other Intangible Assets [Abstract]
Goodwill and Other Intangible Assets [Text Block]	12. Goodwill and Other Intangible Assets Changes in the carrying amount of goodwill for the nine months ended September 30, 2009 are as follows (in millions): Telecom- munications Display Technologies Specialty Materials Life Sciences Total Balance at December 31, 2008 $118 $9 $150 $277 Acquired Goodwill(1) $232 $232 Balance at September 30, 2009 $118 $9 $150 $232 $509 (1) The Company recorded goodwill associated with the purchase of Axygen Bioscience, Inc. in the third quarter 2009. Refer to Note 10 (Acquisition) for additional information. Other intangible assets follow (in millions): September 30,2009 December31,2008 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Amortized intangible assets: Patents, trademarks, and trade names(1) $ 206 $ 120 $ 86 $ 129 $ 112 $ 17 Non-competition agreements 99 93 6 98 90 8 Other (1) 80 1 79 5 2 3 Total $ 385 $ 214 $ 171 $ 232 $ 204 $ 28 (1) The Company recorded other identifiable intangible assets associated with the purchase of Axygen Bioscience, Inc. in the third quarter 2009. Refer to Note 10 (Acquisition) for additional information. Amortized intangible assets are primarily related to the Telecommunications and Life Sciences segments. Estimated amortization expense related to these intangible assets is $10 million for 2009 and $7 million thereafter.

Customer Deposits

Customer Deposits
	9 Months Ended Sep. 30, 2009 USD / shares
Customer Deposits [Abstract]
Customer Deposits [Text Block]	13. Customer Deposits In 2005 and 2004, several of Cornings customers entered into long-term purchase and supply agreements in which Cornings Display Technologies segment would supply large-size glass substrates to these customers over periods of up to six years. As part of the agreements, these customers agreed to advance cash deposits to Corning for a portion of the contracted glass to be purchased. Between 2004 and 2007, we received a total of $937 million for customer deposit agreements. We received our last deposit of $105 million in 2007 and do not expect to receive additional deposits related to these agreements. Upon receipt of the cash deposits made by customers, we recorded a customer deposit liability. This liability is reduced at the time of future product sales over the life of the agreements. As product is shipped to a customer, Corning recognizes revenue at the selling price and issues credit memoranda for an agreed amount of the customer deposit liability. The credit memoranda are applied against customer receivables resulting from the sale of product, thus reducing operating cash flows in later periods as these credits are applied for cash deposits received in earlier periods. During the three and nine months ended September 30, 2009, we issued $42million and $207million, respectively, in credit memoranda. During the three and nine months ended September 30, 2008, we issued $64 million and $202 million, respectively, in credit memoranda. Customer deposit liabilities were $152million and $369 million at September 30, 2009 and December 31, 2008, respectively, of which $121million and $320 million, respectively, were recorded in the current portion of other accrued liabilities in our consolidated balance sheets. Because these liabilities are denominated in Japanese yen, changes in the balances include the impact of movements in the Japanese yenU.S. dollar exchange rate. In the event customers do not purchase the agreed upon quantities of product, subject to specific conditions outlined in the agreements, Corning may retain certain amounts of the customer deposits. If Corning does not deliver agreed upon product quantities, subject to specific conditions outlined in the agreements, Corning may be required to return certain amounts of customer deposits.

Employee Retirement Plans

Employee Retirement Plans
	9 Months Ended Sep. 30, 2009 USD / shares
Employee Retirement Plans [Abstract]
Employee Retirement Plans [Text Block]	14. Employee Retirement Plans The following table summarizes the components of net periodic benefit cost for Cornings defined benefit pension and postretirement health care and life insurance plans (in millions): Pensionbenefits Postretirementbenefits Threemonthsended September30, Ninemonthsended September30, Threemonthsended September30, Ninemonthsended September30, 2009 2008 2009 2008 2009 2008 2009 2008 Service cost $ 12 $ 12 $ 35 $ 39 $ 2 $ 3 $ 8 $ 9 Interest cost 39 37 117 112 13 12 38 36 Expected return on plan assets (45) (49) (134) (148) Amortization of net loss 8 4 23 11 3 2 8 6 Amortization of prior service cost 2 2 6 7 (1) (1) (2) (3) Total pension and postretirement benefit expense $ 16 $ 6 $ 47 $ 21 $ 17 $ 16 $ 52 $ 48 Curtailment charge 22 8 Total expense $ 16 $ 6 $ 69 $ 21 $ 17 $ 16 $ 60 $ 48 Corning and certain of its domestic subsidiaries offer postretirement plans that provide health care and life insurance benefits for retirees and eligible dependents. Certain employees may become eligible for such postretirement benefits upon reaching retirement age and service requirements. In response to rising health care costs, we changed our cost-sharing approach for retiree medical coverage. For current retirees (including surviving spouses) and active employees eligible for the salaried retiree medical program, we placed a cap on the amount we will contribute toward retiree medical coverage in the future. The cap equals 120% of our 2005 contributions toward retiree medical benefits. Once our contributions toward salaried retiree medical costs reach this cap, impacted retirees will have to pay the excess amount in addition to their regular contributions for coverage. This cap was attained for post-65 retirees in 2008 and has impacted their contribution rate in 2009. The pre-65 retirees are expected to trigger the cap in 2011. Further, employees hired or rehired on or after January 1, 2007 will be eligible for Corning retiree medical upon retirement; however, these employees will pay 100% of the cost. Third Quarter The impact of restructuring actions in the third quarter of 2009 was not significant to the Companys pension and postretirement benefit plans. First Quarter In the first quarter of 2009, Corning recorded restructuring charges of $44 million for pension and postretirement benefit plans. This included a curtailment charge of $30 million for the domestic qualified defined benefit plan (U.S. pension plan) and the domestic postretirement benefit plan. Accordingly, we remeasured the U.S. pension and postretirement benefit plans as of March 31, 2009. The remeasurement resulted in an increase of $115 million to the Companys U.S. pension liability and a decrease of

Hedging Activities

Hedging Activities
	9 Months Ended Sep. 30, 2009 USD / shares
Hedging Activities [Abstract]
Hedging Activities [Text Block]	15. Hedging Activities Effective January 1, 2009, Corning adopted ASC 810-10-65-1 Transition Related to SFAS No. 161 Disclosures about Derivative Instruments and Hedging Activities-an amendment of FASB Statement No. 133 which provides guidance for enhanced disclosures about derivatives. This pronouncement requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk related contingent features in derivative agreements. The adoption of this standard did not have a material impact on the Companys consolidated results of operation or financial condition. Corning operates and conducts business in many foreign countries and as a result is exposed to movements in foreign currency exchange rates. The areas in which exchange rate fluctuations affect us include: Financial instruments and transactions denominated in foreign currencies, which impact earnings; and The translation of net assets in foreign subsidiaries for which the functional currency is not the U.S. dollar, which impact our net equity. Our most significant foreign currency exposures relate to the Japanese yen, Korean won, New Taiwan dollar, and the Euro. We selectively enter into foreign exchange forward and option contracts with durations of generally 18 months or less to hedge our exposure to exchange rate risk on foreign source income and purchases. The hedges are scheduled to mature coincident with the timing of the underlying foreign currency commitments and transactions. The objective of these contracts is to neutralize the impact of exchange rate movements on our operating results. We engage in foreign currency hedging activities to reduce the risk that changes in exchange rates will adversely affect the eventual net cash flows resulting from the sale of products to foreign customers and purchases from foreign suppliers. The hedge contracts reduce the exposure to fluctuations in exchange rate movements because the gains and losses associated with foreign currency balances and transactions are generally offset with gains and losses of the hedge contracts. Because the impact of movements in foreign exchange rates on the value of hedge contracts offsets the related impact on the underlying items being hedged, these financial instruments help alleviate the risk that might otherwise result from currency exchange rate fluctuations. The following table summarizes the notional amounts and respective fair values of Cornings derivative financial instruments, which mature at varying dates (in millions): As of September 30, 2009 Assetderivatives Liabilityderivatives Notional amount Balance sheet location Fair value Balance sheet location Fair value Derivatives designated as hedging instruments Foreign exchange contracts $ 155 Other current assets $ 1 Other accrued liabilities $ (6) Derivatives not designated as hedging instruments Foreign exchange contracts $ 1,493 Other current assets $ 15

Fair Value Measurements

Fair Value Measurements
	9 Months Ended Sep. 30, 2009 USD / shares
Fair Value Measurements [Abstract]
Fair Value Measurements [Text Block]	16. Fair Value Measurements The following tables provide fair value measurement information for the Companys major categories of financial assets and liabilities measured on a recurring basis (in millions): September 30, 2009 FairValueMeasurementsatReportingDateUsing QuotedPricesin ActiveMarketsfor IdenticalAssets (Level1) SignificantOther Observable Inputs (Level2) Significant Unobservable Inputs (Level3) Assets Short-term investments $ 968 $ 817 $ 151 (2) Other assets $ 41 $ 41 Derivatives(1) $ 16 $ 16 Liabilities Derivatives(1) $ 48 $ 48 December31, 2008 FairValueMeasurementsatReportingDateUsing QuotedPricesin ActiveMarketsfor IdenticalAssets (Level1) SignificantOther Observable Inputs (Level2) Significant Unobservable Inputs (Level3) Assets Short-term investments $ 943 $ 531 $ 412 (2) Other assets $ 40 $ 40 Derivatives(1) $ 22 $ 22 Liabilities Derivatives(1) $ 81 $ 81 (1) Derivative assets and liabilities include foreign exchange contracts which are measured using observable quoted prices for similar assets and liabilities. (2) Short-term investments are measured using observable quoted prices for similar assets. The FASB deferred implementation of ASC 820 Fair Value Measurements and Disclosures (ASC 820) for certain assets and liabilities that are measured at fair value on a non-recurring basis until 2009. Corning adopted ASC 820, effective January 1, 2009, as it relates to certain non-financial assets and liabilities. Cornings assets and liabilities that are measured at fair value on a non-recurring basis include long-lived assets, goodwill, asset retirement obligations, cost and equity investments. These items are recognized at fair value when they are considered to be other than temporarily impaired. In the third quarter of 2009, there were no required fair value measurements for assets and liabilities measured at fair value on a non-recurring basis and no required additional disclosures resulting from adoption of this standard.

Share-based Compensation

Share-based Compensation
	9 Months Ended Sep. 30, 2009 USD / shares
Share-based Compensation [Abstract]
Share-based Compensation [Text Block]	17. Share-based Compensation Stock Compensation Plans The Company measures and recognizes compensation cost for all share-based payment awards made to employees and directors, including grants of employee stock options and employee stock purchases related to the Worldwide Employee Share Purchase Plan (WESPP), based on estimated fair values. Share-based compensation cost was approximately $97 million and $104 million for the nine months ended September 30, 2009 and 2008, respectively, and approximately $30 and $26 million for the three months ended September 30, 2009 and 2008, respectively, and included (1) employee stock options, (2) time-based restricted stock, (3) performance-based restricted stock and restricted stock units, and (4) WESPP shares. Stock Options Our stock option plans provide non-qualified and incentive stock options to purchase authorized but unissued shares or treasury shares at the market price on the grant date and generally become exercisable in installments from one to five years from the grant date. The maximum term of non-qualified and incentive stock options is 10 years from the grant date. The following table summarizes information concerning options outstanding including the related transactions under the option plans for the nine months ended September 30, 2009: Number ofShares (inthousands) Weighted- Average Exercise Price Weighted- Average Remaining Contractual Termin Years Aggregate Intrinsic Value (inthousands) Options Outstanding as of December 31, 2008 89,630 $ 26.92 Granted 9,550 $ 10.34 Exercised (1,273) $ 7.72 Forfeited and Expired (1,394) $ 16.96 Options Outstanding as of September 30, 2009 96,513 $ 25.68 4.61 $299,025 Options Exercisable as of September 30, 2009 76,226 $ 28.60 3.48 $222,741 The aggregate intrinsic value (market value of stock less option exercise price) in the preceding table represents the total pretax intrinsic value, based on the Companys closing stock price on September 30, 2009, which would have been received by the option holders had all option holders exercised their options as of that date. As of September 30, 2009, there was approximately $47million of unrecognized compensation cost related to stock options granted under the Plan. The cost is expected to be recognized over a weighted-average period of 2years. Compensation cost related to stock options was approximately $50million and $53 million for the nine months ended September 30, 2009 and 2008, respectively, and approximately $15 million and $14 million for the three months ended September 30, 2009 and 2008, respectively. Proceeds received from the exercise of stock options were $8million and $79 million for the nine months ended September 30, 2009 and 2008, respectively, and $4 million and $5 million for the three months ended September 30, 2009, and 2008, respectively. Proceeds received from the exercise of stock options were included in financing activities on the Companys Consolidated Statements of Cash Flows. The total intrinsic value of

Comprehensive Income

Comprehensive Income
	9 Months Ended Sep. 30, 2009 USD / shares
Comprehensive Income [Abstract]
Comprehensive Income [Text Block]	18. Comprehensive Income Components of comprehensive income, on an after-tax basis where applicable, follow (in millions): Threemonthsended September30, Ninemonthsended September30, 2009(1) 2008(1) 2009(1) 2008(1) Net income $ 648 $ 768 $ 1,274 $ 5,007 Other comprehensive income: Change in unrealized loss on investments without credit loss, net 6 (9) 11 (31) Change in unrealized loss on investments with credit loss, net 3 Change in unrealized gain on derivative hedging instruments, net (29) (6) 25 (10) Reclassification adjustment relating to derivatives, net 33 16 1 22 Foreign currency translation adjustment, net 530 (491) 313 (369) Amortization of postretirement benefit plan losses, net 9 35 (1) 48 Other, net(2) 14 (23) 25 (39) Comprehensive income $ 1,211 $ 290 $ 1,651 $ 4,628 Comprehensive income attributable to noncontrolling interests (5) (6) 1 Comprehensive income attributable to Corning $ 1,206 $ 290 $ 1,645 $ 4,629 (1) Other comprehensive income items for the three and nine months ended September 30, 2009 include net tax effects of $(12) million and $(16) million, respectively, and $(4) million for the three and nine months ended September, 2008. Refer to Note5 (Income Taxes) for an explanation of Cornings tax paying position. (2) Other, net includes unrealized gain of $14 million and $25 million for the three and nine months, respectively, ended September 30, 2009 and unrealized losses of $23 million and $39 million for the three and nine months ended September 30, 2008, respectively, related to the temporary impairment of auction rate securities held by Dow Corning Corporation. Refer to Note 9 (Investments) for additional information.

Significant Customers

Significant Customers
	9 Months Ended Sep. 30, 2009 USD / shares
Significant Customers [Abstract]
Significant Customers [Text Block]	19. Significant Customers For the three months ended September 30, 2009, Cornings sales to AU Optronics Corporation (AUO), a customer of our Display Technologies segment, represented 14% of the Companys consolidated net sales. For the three months ended September 30, 2008, Cornings sales to AU Optronics Corporation (AUO) and Chi Mei Optoelectronics Corporation (Chi Mei), two customers of our Display Technologies segment, represented 11% and 10%, respectively, of the Companys consolidated net sales. For the nine months ended September 30, 2009, Cornings sales to AUO represented 14% of the Companys consolidated net sales. For the nine months ended September 30, 2008, Cornings sales to AUO and Chi Mei, represented 12% and 11%, respectively, of the Companys consolidated net sales.

Operating Segments

Operating Segments
	9 Months Ended Sep. 30, 2009 USD / shares
Operating Segments [Abstract]
Operating Segments [Text Block]	20. Operating Segments Our reportable operating segments are as follows: Display Technologies manufactures liquid crystal display (LCD) glass for flat panel displays. Telecommunications manufactures optical fiber and cable and hardware and equipment components for the telecommunications industry. Environmental Technologies manufactures ceramic substrates and filters for automotive and diesel applications. This reportable operating segment is an aggregation of our Automotive and Diesel operating segments as these two segments share similar economic characteristics, products, customer types, production processes and distribution methods. Specialty Materials manufactures products that provide more than 150 material formulations for glass, glass ceramics and fluoride crystals to meet demand for unique customer needs. Life Sciences manufactures glass and plastic consumables for scientific applications. All other operating segments that do not meet the quantitative threshold for separate reporting are grouped as All Other. This group is primarily comprised of development projects and results for new product lines. We prepared the financial results for our reportable segments on a basis that is consistent with the manner in which we internally disaggregate financial information to assist in making internal operating decisions. We included the earnings of equity affiliates that are closely associated with our operating segments in the respective segments net income. We have allocated certain common expenses among segments differently than we would for stand-alone financial information prepared in accordance with GAAP. Segment net income may not be consistent with measures used by other companies. The accounting policies of our reportable segments are the same as those applied in the consolidated financial statements. Effective January 1, 2009, we began providing U.S. income tax expense (or benefit) on U.S. earnings (losses) due to the change in our conclusion about the realizability of our U.S. deferred tax assets in 2008. As a result of the change in our tax position, we adjusted the allocation of taxes to our operating segments in 2009 to reflect this difference. The impact of this change was not significant. Operating Segments (in millions) Display Technologies Telecom- munications Environmental Technologies Specialty Materials Life Sciences All Other Total Three months ended September 30,2009 Net sales $ 679 $ 450 $ 167 $ 90 $ 92 $ 1 $ 1,479 Depreciation(1) $ 146 $ 35 $ 25 $ 13 $ 5 $ 3 $ 227 Amortization of purchased intangibles $ 3 $ 3 Research, development and engineering expenses(2) $ 19 $ 21 $ 30 $ 17 $ 3 $ 20 $ 110 Restructuring, impairment and other (credits) charges $ (5) $ 3 $ (1) $ 1 $ (2) Equity in earnings of affiliated companies $ 317 $ 2 $ 3 $ 322

Document and Entity Information

Document and Entity Information (USD $)
In Billions, except Share data	9 Months Ended Sep. 30, 2009	Apr. 17, 2009	Jun. 30, 2008
Document and Entity Information
Entity Registrant Name	CORNING INC /NY
Entity Central Index Key	0000024741
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	Yes
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			35.5
Entity Common Stock, Shares Outstanding		1,553,874,440
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-09-30